No let-up: Another drubbing for the Labor Party

The Brisbane municipality is huge so control of it is the biggest municipal prize in Australia.  Its budget is comparable to Tasmania's

Queensland Labor’s "thugs and villains" should fall on their sword following the ALP’s drubbing in Brisbane City Council elections yesterday, retiring councillor David Hinchliffe says.

The long-serving Labor figure last night warned the ALP had become the "personal fiefdom of a few egomaniacs" and renewed calls for the party’s state secretary, Anthony Chisholm, to resign.

Labor was reduced to six - possibly seven - wards in Brisbane City Council’s 26 wards in last night's emphatic win by the LNP, with Lord Mayor Graham Quirk also returned with a higher share of the vote than LNP predecessor Campbell Newman achieved in 2008.

It means twice in five weeks Labor in Queensland has been routed by a resurgent Liberal National Party, given the comprehensive state election loss on March 24.

Mr Hinchliffe called for elder Labor statesman Wayne Goss, Jim Soorley and Peter Beattie to play a senior role in re-shaping the Labor party at a state conference to be held "as soon as possible".

Mr Hinchliffe, who has served as a councillor since 1988 and was deputy mayor between 2004 and 2008, said he had been threatened over the phone last night after making earlier comments to brisbanetimes.com.au. "I have already had them on the phone to me tonight," he said last night.  "They will be loading up the guns to shoot the messenger."

Mr Hinchliffe believed the party administration needed to stand down.  "The executive of the party that has been responsible for the two disastrous campaigns - and the third of those campaigns will be on its way as soon as the federal election is called - those people should tender their resignations and get out of the way," he said.

Mr Hinchliffe described Saturday’s Brisbane City Council loss as "a tsunami on top of a wipe-out".

Mr Hinchliffe said he felt entitled to have his say because he had been in office for a quarter of a century and in the party for one-third of its history.  "And that is what I am doing, as vocally and as loudly as I possibly can," he said.  "This is not the time to sit idly by and wait for some mythical pendulum to swing back. "

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China drops axe on mine spend after political 'interference'

With both farmers and the Greens baying loudly against mining, the NSW government dithers  -- when it should be acting decisively  on behalf of the community as a whole

THE Chinese government has delivered a damning verdict on doing business in NSW, pulling the plug on a planned $10 billion in mining-related investments across Australia.

The Shenhua Group, which has spent $600 million developing a coal mine in Gunnedah, in northern NSW, will no longer pursue plans to spend a further $9 billion across the country, The Sun-Herald has learnt.

According to mining industry sources, Shenhua told the department of the federal Resources Minister, Martin Ferguson, that it would take its money elsewhere. The energy company will instead invest in mining projects in Africa and closer to home in Mongolia.

Mr Ferguson's office declined to answer detailed written questions from The Sun-Herald about Shenhua's warning, instead referring the questions to the Department of Resources, Energy and Tourism.

"Commercial decisions by the Shenhua Group are a matter for the company," a spokesman said.  The company did not respond to questions.

While the Opposition Leader, Tony Abbott, is likely to claim Shenhua's retreat was a reaction to the carbon tax, sources said it was a direct response to "political interference" and regulatory roadblocks it has experienced under the Coalition government in NSW.

Shenhua officials met the Minister for Trade, Andrew Stoner, on Friday in a hastily-arranged meeting as the state government fights to ensure Shenhua remains committed to the Watermark coalmine at Gunnedah. The project is a 30-year mine in the Liverpool Plains region, which is prime agricultural land.

Just a week ago, Shenhua received the latest stage of government approval for the mine - the "director-general's requirements". The company had waited seven months for the approval, which is supposed to take 28 days.

Sources in the O'Farrell government said the approval had been delayed by the paralysis in the Department of Planning, as the government continues to review planning laws and integrate its strategic lands policy.

The company, which paid the previous state Labor government $300 million to exploit the area, was also furious when the Minister for Energy, Chris Hartcher, changed the conditions of its exploration licence last year.

Mr Hartcher's media statement at the time boasted of "tough new conditions for the renewal of Shenhua Watermark Coal's exploration licence" in response to community concern. Farmers in the Liverpool Plains have battled against a number of mining proposals.

Mr Stoner has also commissioned an investigation into the intentions of foreign investors in NSW.

A government source said "companies are screaming about delays".

"Why would an investor come to NSW, where it takes four years to get a project approved and into production, when you can do it in less than two in Africa? If [Shenhua] money is withdrawn, it sends an awfully powerful message to other investors when Australia and NSW is seen as a less-attractive option than Africa," the source said.

The NSW Minerals Council has been lobbying on behalf of Shenhua. Its chief executive, Stephen Galilee, the former chief of staff to the Treasurer, Mike Baird, asked for written questions before declining to make any comment.

An industry source said: "Shenhua has made it quite clear it has had enough of what it sees as political interference in NSW. There are meetings going on to try to change their minds but this is a seriously bad thing for NSW. The last hope for some of the foreign miners is whether 'can do' [Queensland Premier] Campbell [Newman] can do."

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Premier set to act on Victoria's  IT fiasco

Governments and  computers = money down the drain. And all in the name of "savings", of course.   Projects are almost invariably too ambitious

The board of the Victorian government's troubled information technology agency is set to be removed after a review found the body suffered from poor governance.

The move is likely to be welcomed by thousands of state public servants still struggling with substandard IT despite the investment of hundreds of millions of dollars since 2008.

CenITex, which services the computing needs of 36,800 public servants, has been the subject of three inquiries this year, including an Ombudsman's investigation and a police probe by the fraud and extortion squad.

Fairfax Media understands the Baillieu government has acted on the findings of the State Services Authority review, which was expected to be released but has recently been suppressed and labelled cabinet-in-confidence by Assistant Treasurer Gordon Rich-Phillips.

Last month, an investigation by Fairfax revealed that 46 per cent of the $377 million worth of contracts CenITex signed since 2008 had gone to highly paid contractors - many on $1000 a day - while the bureaucracy noticed little improvement in its outdated IT.

CenITex's board is headed by chairman Warren Hodgson, a former secretary of the Department of Innovation, Industry and Regional Development.

Also on the board are Graeme Bowker, former Melbourne Water Corporation chairman Alan Clayton, senior public servant Randall Cohen, who is also a non-executive director of the Mt Baw Baw Alpine Resort, Christina (Chris) Gillies, a director of MS Australia and Jim Monaghan, a former managing director of the Queen Victoria Market.

Fairfax understands that the State Services Authority's draft report into the IT body was critical of Treasury's oversight of CenITex. But senior government and CenITex sources have told Fairfax the department successfully pressured the State Services Authority to soften its criticism in its final report.

Government spokeswoman Stephanie Ryan said the government was considering "the best way" for CenITex to deliver shared IT services across departments and agencies and enhance value for money for taxpayers. The government's move, she said, "will bring CenITex closer to government and improve ongoing accountability".

"CenITex will continue to operate as normal during this period," Ms Ryan said.

In the Victorian Government Gazette yesterday, CenITex was declared a "reorganising body" under the State Owned Enterprises Act 1992. This allows the government to effectively remove the board and appoint an administrator.

CenITex was supposed to amalgamate the government's network systems, internet providers, data centres and help-desk services for the public service.

Treasury officials had hoped the "shared services" model would save on the government's huge IT bill, which has been running at $1.65 billion a year, according to a 2008 cabinet-in-confidence business case obtained by Fairfax..

But some of those who established the agency told Fairfax these savings - to be diverted to "frontline" services for Victorians - may take years to materialise.

Problems with CenITex's service ranged from months of consistently poor internet access for the Department of Business and Innovation to severe service interruptions in the Wangaratta government office to the Department of Justice turning its back on CenITex to outsource the courts IT system to a private provider.

Former executives told Fairfax IT specialists brought into CenITex were paid on average $1000 a day. Leaked internal wages information showed senior manager Gordon Miles, who has been at CenITex since March 2009, was paid $1697 a day, making him one of Victoria's highest-paid public office holders.

CenITex spokesman Ross Gilmour would not comment on the board's removal, while the Ombudsman's office would not confirm or deny its investigation into CenITex.

The ongoing police investigation is into allegations, revealed by Fairfax last year, that CenITex managers awarded a contract to themselves.

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Will Australia learn from Europe's mistakes?

In looking at Europe, Australia may well see its own future. In some ways, Australia is just 20 or 30 years behind the developments in the Old Continent. Australia’s population is also ageing, albeit starting from a younger level. Australian governments have recently relapsed into financing their massive public spending increases on borrowing, just as European governments did in the 1970s and 1980s. And Australian government programs now sound as least as ambitious as EU initiatives—and they will probably end up at least as wasteful and inefficient.

The European public debt crisis is a wake-up call to those who believe in running a country on ever more feel-good programs, welfare initiatives, and industry assistance. The crisis of Europe is a crisis of government that has become too big. This is where the massive debt burdens originate—only a small component of government debt is the result of the financial crisis. The financial crisis did not cause Europe’s problems. It only made them apparent.

Perhaps this is the greatest benefit to Australia from Europe’s current woes. Europe provides us with a clear warning. It shows us what happens when government spending grows continually faster than government revenue. Such a scheme of financing government ultimately becomes a Ponzi scheme when eventually more debt needs to be raised to just pay the interest on previous borrowing.

Australian politicians keen to implement their next flagship policy should be sent on a mandatory field trip to Greece or Portugal each time they want to spend extra money (or maybe not, since both countries are still nice places to visit as tourists). The lessons from Europe’s decades-long spending binge need to be learned and understood. Australian governments should refrain from adding any extra programs to existing spending commitments for as long as the budget remains in deficit. Not only would this ease Australia’s dependence on offshore funding but it would also reduce our vulnerability to global economic shocks and prevent us from edging closer to a situation similar to the one in which Greece, Portugal, Spain and other European countries find themselves.

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