Friday, June 24, 2011

Victory for freedom of association

Hells Angels bikie member wins challenge to NSW gang law

BIKIES have scored a victory over the New South Wales Government, securing a High Court ruling that a tough law designed to break up their clubs is invalid.

The High Court ruled today that a Hells Angel's challenge had been successful and the NSW law had been declared invalid, a registrar at the High Court in Canberra said today. The NSW Attorney-General's office confirmed the decision.

The NSW Government introduced the Crimes (Criminal Organisations Control) Act in 2009 following the death of Hells Angel associate, Anthony Zervas, during a violent brawl at Sydney Airport.

The law allowed the police commissioner to ask a NSW Supreme Court judge to declare bikie gangs criminal organisations and then seek control orders banning individual members associating with one another.

Derek Wainohu, a prominent member of the Hells Angel Motorcycle Club, launched a bid in 2010 on behalf of Sydney chapters of the club to have the law declared invalid.


Dial M for monopoly and send the bill to consumers

The NBN deal kills competition, trashes hardware and chains us to a white elephant

Henry Ergas

IT'S done, though not fully disclosed. And Telstra has done very well out of it. But the "dial M for monopoly" deal between the government, NBN Co and Telstra gives consumers and taxpayers nothing to cheer about.

Start with consumers. If the National Broadband Network is to be built, it should share Telstra's ducts and pipes. That reduces costs, making consumers better off. But eliminating competition is a different proposition altogether.

This is not merely a question of the retirement of Telstra's copper network. Ultimately, that would happen anyway, though scrapping it now is not especially sensible. But paying Telstra, and it appears, Optus, to cease providing high-speed data services over their hybrid fibre coax networks is nothing more than the NBN buying itself a monopoly.

As NBN Co CEO Mike Quigley recognised in Senate estimates, those networks provide effective competition to fibre optic networks in many advanced economies. Indeed, careful studies find that network competition reduces prices by 10 to 20 per cent while significantly enhancing the quality of service consumers receive.

The government's argument is that Australia is too small to accommodate multiple providers. But these networks exist already and their running and expansion costs are very low. Moreover, the agreement explicitly envisages their continued use to provide pay-TV services, so those costs will be borne in any event. Far from avoiding needless duplication, the deal merely prevents the fullest use of scarce capital.

Even more appalling is the prohibition on Telstra "promoting wireless services as a substitute for fibre-based services for 20 years". With few fixed networks in the world's most rapidly growing telco markets, investment is pouring into developing ever higher speed wireless services. This clause, along with others aimed at preventing those services from competing with the NBN, will therefore not only cement NBN Co's market power but also impede our access to cutting-edge technologies. None of this is to deny that NBN may be able to achieve scale economies by expanding its customer base. But let it do so by winning consumers over, not through sweetheart deals that pay rivals to shut down. The first is competitive rivalry, with all the gains it brings; the second is no better than price-fixing.

The government claims any resulting harms are offset by wider benefits. The greatest of these, it says, is that the NBN will be structurally separated, giving Telstra's rivals a competitively neutral platform from which to compete.

But this claim too makes little sense. After all, the government has repeatedly emphasised that regardless of any deal with Telstra, the NBN will proceed. The structurally separated platform will therefore be put in place quite independently of the restrictions on competition the deal mandates. Removing those restrictions would only make the consumer benefits all the greater. Indeed, the government fully knows its claim is bunk. That is why it has exempted the deal from the trade practices provisions of the competition law. Those provisions would allow the deal even if it created a monopoly, so long as NBN Co could convince the competition regulator, and the competition tribunal in the event of appeal, that the deal's competitive detriments really were outweighed by public benefits. It is the fact that such a claim has no prospect of success that has forced the government to grant NBN Co the unparalleled exemption it has now obtained.

But it is not only consumers who lose; taxpayers too will suffer. The government has negotiated policy changes valued by Telstra at $2 billion, without any pretence of adequate prior public disclosure or consultation. There also seem to be tax concessions, though these are undisclosed. But the damage to taxpayers goes even further.

NBN Co will be a government-owned monopoly. Freeing it from competitive disciplines means allowing inefficiency and cronyism to flourish. That the initial sites chosen for the NBN's deployment are largely marginal electorates is merely a sign of things to come. As such waste becomes the order of the day, it is taxpayers who will bear the losses.

Bad as all that is, the greatest victim is the quality of public policy. Exactly 20 years ago, the Telecommunications Act, 1991 marked a new era, opening telecommunications markets to competition, reducing cross-subsidies and setting clear bounds on political interference. Certainly, serious mistakes were made; but those broad policy directions have more than proven their value.

A sensible government would have used a Productivity Commission inquiry to identify options for addressing the mistakes while preserving the achievements. Instead, the Rudd government's grand promises degenerated into a stunt it announced before it had even been costed. The Gillard government then used backroom deals, lubricated by taxpayer-financed largesse, to bring a poor idea to poorer implementation.

That is this government's style. So too is trashing every principle of good governance along the way. Billions of dollars have been committed without even the semblance of a cost-benefit analysis, legitimating wasteful public spending decisions more widely. Inefficient cross-subsidies, painfully reduced over a long period, have not only been restored but are being locked in. As for consumers, they will be faced with a monopoly that the government, now back as both owner and rule-maker, has powers to manipulate at will. And future generations will bear losses that every study concludes could well be substantial.

Even worse, the deal includes break clauses forcing any government that reversed those decisions to make huge payments to Telstra. There is nothing wrong with ordinary commercial penalties, which only compensate for costs, legitimately incurred, that otherwise could not be recouped. But these clauses seem to go beyond that in shackling future policy.

As well as being constitutionally abhorrent, such clauses undermine fiscal honesty by creating liabilities that do not show up as government outlays. And to aggravate matters, they make rent-seeking more profitable by obliging future governments to honour their predecessors' tainted promises. So that is what we have come to: white elephant projects that squander the income from depleting our mining wealth; backroom deals that bribe firms to go along with bad policy; and penalty clauses to protect shabby bargains from the democratic process.

Yet this, the government tells us, is economic reform. With reforms such as these, can it be long before we are undone?


The cattle export mess continues -- maybe worsens

FOREIGN Minister Kevin Rudd has been recruited to help solve the worsening crisis over the ban on live cattle exports to Indonesia and has met with a key industry group several times this week.

As criticism mounts over the Gillard government's handling of the issue and deteriorating relations with our neighbour, The Australian has confirmed Mr Rudd has had numerous meetings with the Northern Territory Cattlemen's Association.

The revelation of Mr Rudd's involvement comes on the first anniversary of his removal as prime minister and follows repeated calls by the opposition for Mr Rudd to take the lead on negotiations over the cattle standoff between the countries.

It is understood Mr Rudd is taking a supporting role, bolstering Australia's position.

The damage done to Australia's relationship with Indonesia is also expected to be one of the main topics discussed at a meeting today between Julia Gillard and West Australian Premier Colin Barnett.

Confirmation of Mr Rudd's involvement in the cattle dispute comes amid suggestions Australian officials in Indonesia warned the Department of Foreign Affairs about animal welfare issues as far back as six months ago.

DFAT has refused to confirm or deny the existence of diplomatic cables, citing long-standing protocols that it does not comment on the subject of internal correspondence. Mr Rudd's office has stated that he "has not seen any cables on this matter".

Agriculture Minister Joe Ludwig returned from Indonesia on Tuesday night after failing to secure an agreement with the Indonesian government on a timetable for trade to resume or agreed standards.

Senator Ludwig was initially criticised by animal welfare groups for failing to act when they first raised their concerns, and then by industry players for being heavy-handed and not allowing trade to continue with Indonesian abattoirs currently operating to Australian standards.

Nationals leader Warren Truss yesterday implored the Prime Minister to "release" her Foreign Minister and allow Mr Rudd to negotiate a solution. "The government must urgently send the Foreign Minister to Indonesia to patch up the damaged relations between our two countries," Mr Truss said. "The government's bungling of this issue has damaged our relationships with our important neighbour."

The foreign relations crisis was sparked when the Gillard government suspended the $320 million live cattle trade to Indonesia on June 8 following a community outcry over shocking revelations in an ABC Four Corners program of animal cruelty in the country's slaughterhouses.

Australian cattle exporters fear Australia could be pushed out of the Indonesian cattle marketplace, with the head of an Indonesia parliamentary agriculture commission Muh Romahurmuziy saying the country could push for a permanent ban on Australian cattle.


An unfixable bureaucracy?

Nurse docked thousands by 'fixed' Queensland Health payroll system

A NURSE has warned Queensland Health's disastrous payroll system is far from fixed after she was recently docked more than $14,000 for a HECS debt she repaid seven years ago.

While payroll bungles continue to dog the system, Queensland Health has referred some staff to police for claiming hardship payments during the debacle.

Payroll workers throughout the state are so incensed over the ongoing fiasco they will rally today demanding more recognition for the extra work and expertise involved in running the new system.

The nurse said she had been forced to work for an agency on her days off from Queensland Health and borrow money from family after being grossly underpaid for months. She said although Queensland Health had recently repaid her more than $30,000 in lost wages, $14,000 of that was taken out and paid to the Australian Tax Office in HECS that she did not owe.

"The payroll system is definitely not fixed and I think they're a long way from fixing it," she said. The nurse did not want to be named, but showed The Courier-Mail a copy of her payslip.

Her case questions Queensland Health's assertion to auditor-general Glenn Poole that the payroll system had stabilised since October and was now considered "business as usual".

A report by Mr Poole, released this week, found staff had been overpaid more than 47,000 times since the payroll system was introduced 15 months ago, amounting to about $43 million. Another $9 million was given out in emergency cash payments. Queensland Health began moves this month to recoup the money.

Opposition health spokesman Mark McArdle said he was concerned the payroll system was still causing grief despite the many millions of dollars that had been spent trying to fix it. "Yet another nurse has become a victim of the payroll debacle, suffering a crippling financial outcome," he said. "You have to wonder how many more people are in the same boat."

Queensland Health deputy director-general John Cairns said calls to the payroll hotline had fallen 80 per cent since last year, indicating the system had stabilised and reflecting the increased accuracy of the department's pay runs.

A payroll employee, who did not want to be named, yesterday confirmed the system was still far from fixed. She'll join other payroll workers at lunchtime rallies throughout the state today.


You call this even-handed? Refugee series is strictly for the gullible

Misleading series from Australian public TV broadcaster

One of the most passionate and enduring debates in this country has been built on a falsity, a false choice that is being carefully recrafted, repackaged and re-presented on SBS this week, at taxpayer expense.

A comment that sums up the falsity at the centre of this debate and the three-part series Go Back to where You Came from came from one of the six manipulated participants in the show, Darren Hassan, who complained that the group was being subjected to enforced empathy.

He had seen the loaded dice at the centre of the progressive argument about boat people: that if you believe in stopping the small number of asylum seekers who arrive by boat, you are lacking in empathy, lacking in compassion, and probably anti-Muslim. The entire series is designed to enforce this maxim. The participants are lied to. The audience is lied to. This is an empathy forced march.

In the first part, on Tuesday night, the unseen narrator said the participants had just ''survived a sinking, burning boat''. In fact it was an obvious charade. We were told that ''at the last minute, the stricken boat is spotted''. Again, only for the gullible. The rescue was as false as the emergency.

The narrator told us that only ''1 per cent of the world's refugees are resettled by the UN''. Again, a highly misleading statistic.

The empathy argument is easily turned on its head, something the producers carefully avoid doing. Far from lacking empathy, the decision to send a punitive signal to the people smugglers and their clients has been proven to stop the people-smuggling trade. Detention centres, instead of being opened all over the country, would empty out. Lives would not be lost at sea. Hundreds of millions of dollars would be spent on people instead of policing. More refugees could come to Australia under less stress and for less cost.

Because this debate is not about empathy. It is not about numbers. It is not about race. It is about principle: control the borders. The biggest beneficiaries of strict border control would be legitimate asylum seekers.

Much to the chagrin of the progressive side of politics, this argument is the one that has carried the day in Australia. After 15 years of being bashed over the head, especially by the ABC and SBS, the public has not budged. The Gillard Labor government could fall on this issue alone, given how badly it has been handled for almost four years. This year it will spend more than $750 million on illegal entries, an increase of 700 per cent over the final year of the Howard government.

The bedrock opposition of Australians to the empathy argument is quickly evident from the questions asked by some of the participants in Go Back to where You Came from. Adam Hartup: Why didn't the boat people stay in Malaysia or Indonesia where they were in no danger? Why do 99 per cent of them arrive with no papers?

Darren Hassan: Once they leave Malaysia, and then Indonesia, they become economic migrants. We need to send a tougher signal. People who are destroying documents, what are they trying to hide?

Raye Colbey (after visiting settled refugees from Africa who had come via the UN process): These are real refugees. They came the right way.

None of these basic questions were seriously addressed by the producers in their opening salvo. They had carefully sifted through 500 people before selecting the six for the program, and carefully chosen the refugees the participants would visit in Australia. But it would have been possible to randomly select six Australians, take them to a refugee camp, or to a newly arrived refugee's home, and see a ramp-up in empathy in most cases. This series is about something else.

While the quality of the filmmaking is good, the laudatory descriptions of the program as being even-handed are overstated. It is stacked with commentary, from the narration, to the structure, to the guide, Dr David Corlett, who is immersed in the refugee industry, is highly political, and in 2003 wrote a Quarterly Essay, ''Sending Them Home'', with Robert Manne. This is the producers' idea of dispassionate objectivity.

Last August, the ABC's Four Corners presented a searing program, ''Smugglers' Paradise'', which presented a far more accurate and confronting picture of the people smuggling trade to Australia. It was reality TV that was real. This new series has real people in real places, but it remains an exercise in manipulation for everyone involved.


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