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Category: Constraints

17/02/2023

The Triple Lunacy of Westconnex

17 February 2023

Westconnex, the underground freeway network will open later this year. Few realised the extent of it and for a period, trafffic will flow more smoothly.

But it was, is and will be a triple lunacy.

Nowhere else in the world are governments building freeway networks, let alone tunnelling them undergroup at vast cost. Cities like London have congestion taxes, some European cities are even closing their major roads, and it a subject of significant discussion (ww:://h2020-flow.eu/news/news-detail/when-roads-are-closed-where-does-the-traffic-go-it-evaporates-say-studies/). The world is trying to have more public transport to lessen the need for private cars, their cost, their parking and their greenhouse gases- except NSW!
The underground freeways will be privatised, so represent a huge subsidy from the taxpayer, as the private monopolies have a track record of huge tolls and guaranteed revenue. The tolls are already subsidised to lessen commuter pain, which amounts to continuing payments to the toll operators. Chris Minns’ Labor election platform is to subsidise motorists who spend more than $60 a week on tolls. Who are these and how many of them are there? Logistics companies? Couriers? Or tens of thousands of commuters? Naturally there will only be a few toll operators.
The money spent on road tunnels was not spent on a decent Metro system, that would have made most trips unnecessary and taken the cars off the roads. Of course a train tunnel is smaller than a road tunnel, much cheaper to build per Km, carries far more people and does not require ventilation (or very little).

One might ask why all this happened. My theory is that the RTA engineers were far more politically savvy than the State Rail Authority. The RTA were dealing with politicians and building motorways all over the state, wherever they could get the government to pay for them. The SRA confined its thinking to the existing rail network, and thought in terms of better train technology and industrial relations problems, rather than building their network and having a big part in urban planning. And of course the lobbying was probably helped by big bankers and big construction companies and by ex-politicans at Infrastructure NSW, which was set up in 2011 by Barry O’Farrell with ex-Premier and ex British-American tobacco executive, Nick Greiner in charge- a great privatiser.

WestConnex has beavered away at vast but unperceived cost and only attracted attention for its ventilation shafts in suburbia, or the chaos on existing roads as its portals were constructed. Now, for the next few years the affluent and the through traffic will have an easier time of it, and we can continue to lobby for the Metro system.

Web of steel, concrete and cable takes shape below

WestConnex is on track to open late this year, writes Matt O’Sullivan. (SMH 17 February 2023)

The scale and complexity of the final stage of the $17 billion WestConnex motorway project, buried up to 60 metres beneath inner Sydney, becomes clear the deeper workers venture into a twisting maze of road tunnels, ventilation passages and giant caverns for jet fans and substations.

Above ground, inner-city residents and motorists get a sense of the scale – and disruption whenever they pass a massive construction depot for the project on a site that was once the Rozelle rail yards, next to the City West Link roadway. However, the surface work represents only a fraction of the motorway junction below, which features three layers of tunnels.

All up, Australia’s most complex motorway project comprises 24 kilometres of tunnels beneath Rozelle and Lilyfield, about seven kilometres of which motorists will never see because it will be used mostly for ventilation. Once opened late this year, the $3.9 billion interchange will connect the recently opened M4-M8 Link between St Peters and Haberfield, the City West Link, the Anzac Bridge, Iron Cove and, by 2027, the planned Western Harbour Tunnel.

Almost four years after construction started, Rozelle interchange project director Steven Keyser said the focus was now on fitting out the finished tunnels and connecting ‘‘everything together, so it all talks to each other’’ as the targeted completion date looms. ‘‘We have the body built, but we need the brains,’’ he said of the mechanical and electrical systems.

Keyser said other road tunnel projects built in Sydney in the past decade had taught his team that fitting them out with mechanical and electrical equipment often took longer than anticipated. ‘‘We’ve got 1.7 million metres of cabling to run through all those tunnels. It’s a real spider network of cabling,’’ he said. ‘‘The back end takes a lot longer, and we’re scheduling far more intensely to get that right. And so we’re in a good position to open at the end of the year.’’

Keyser said that, while facing disruption from the 2019-20 Black Summer bushfires, the pandemic and wet weather, the biggest logistical challenge for the project had been ensuring equipment and componentry arrived in the correct sequence. ‘‘We had 23 road-headers [excavating] and 500 blue-collar workers starting and stopping each day, getting in and out of the tunnels. This is one of the biggest logistical exercises and that’s all hidden,’’ he said.

Like the rest of WestConnex, the Rozelle interchange has been contentious due to the disruption caused to inner-city residents, and the eyesore it has created near Sydney Harbour during the years of construction.

Transport for NSW’s deputy secretary of infrastructure and place, Camilla Drover, said the project would have been far more controversial if early plans for the interchange had been pursued. ‘‘The original scheme for this was all above ground. Can you imagine? It would have been viaduct and overpasses. But the fact that it is now all underground, and we have a park instead, that is the evolution people forget about,’’ she said.

The 10-hectare park, which includes two sporting fields, on the site of the old rail yards, will open late this year when the interchange is completed.

And Keyser said the public would see the construction site change quickly over the coming months as the park began to emerge. ‘‘We’re getting to the stage where you can see what the finished product will look like,’’ he said.

Underscoring the complexity of the underground junction, the state’s transport agency took control of the project in 2017 from a corporation set up to oversee WestConnex after only one bid from contractors to build it was received in the initial tender process. The interchange was also separated from construction of the M4-M8 Link, which forms the other part of the third and final stage of the 33-kilometre motorway project. The upshot is that the risk of delivering the interchange ultimately rests with the government.

While the tunnels for the interchange average 35 to 40 metres beneath the surface, a sump where water is collected before being pumped out is about 60 metres deep. Twin tunnels for the $27 billion Sydney Metro West rail line between the CBD and Parramatta, which will include a train station next to White Bay power station at the so-called Bays West, will be dug even deeper beneath a part of the interchange over the coming years.

For tunnellers, ground conditions have presented a constant challenge during construction. ‘‘It’s always challenging with ground conditions, no matter where you are in the world. Each time we’re digging the tunnels we’re checking the reactions of what’s happening,’’ Keyser said. ‘‘We’re always a step ahead, probing things, making sure that things are only moving to the model. We have probably 5000 instruments around measuring.’’

While sandstone is easier to excavate, softer soil conditions required so-called rock bolts to be installed closer together in the tunnel walls to provide extra support. The closest the tunnels get to each other is about 10 metres. ‘‘You’re basically doing what the Romans did – you’re creating an arch [in the tunnels],’’ Keyser said of the tunnelling techniques.

About a quarter of the $3.9 billion cost of the interchange, being built by contractors CPB and John Holland, has been spent on a labyrinth of ventilation tunnels and related facilities. Three exhaust stacks about 35 metres high, which are connected to the interchange below, have been built on the site of the old rail yards. Large caverns – some about 23 metres high – also had to be dug deep underground for electricity substations and to house giant fans for the ventilation system.

Part of the reason for the mammoth size of the ventilation facilities is the need to design the interchange to cope with a catastrophic event. ‘‘You’re always catering for what is the worst case, which is if something catches fire in the tunnel,’’ Keyser said. ‘‘The standards now are quite high and the design caters for that emergency situation. In the roof, you have a fire deluge system, which is going through its testing.’’

Greens MP for Balmain Jamie Parker, who has been highly critical of WestConnex, said the interchange’s construction had caused major disruption to nearby residents over the past four years. ‘‘Everyone is relieved that it will be over. But the local community feels like they have had such widespread impacts on their homes, and now they have to deal with the longer-term consequences of the three exhaust stacks which should be filtered,’’ he said. ‘‘The impact is really significant, and it is ongoing.’’

While acknowledging the disruption to locals from construction, NSW Metropolitan Roads Minister Natalie Ward said the interchange, along with the rest of WestConnex, would result in significant travel-time savings for motorists once fully completed. ‘‘There are always challenges in construction – it’s messy; it’s disruptive,’’ she said.

‘‘The upside is it gives local roads back to local communities. This area, you might remember, was just disused rail yards; it was overgrown … [and] you couldn’t enter. We are transforming this to see community benefits.’’

18/12/2022

Trust – a letter to Ross Gittins, who wrote the below article on Trust

18 December 2022

Dear Ross,

I congratulate you on your article on ‘Trust’. It is the glue that holds society together, and when it is broken there are huge consequences.

Since the first plane hijacking in 1970 checking people onto planes is a growth industry. Years ago you could walk into any office building, take the lift to the top floor and ask the General Manager’s secretary if you could speak to (almost always) him. Now everyone carries tags even to get in the front door or the lift. This may all be related to inequality or only mostly.

But it is also the rise of the manager. The best expose of this I have read is ‘The Political Economy of Health’ by Julian Tudor-Hart. He follows the British NHS from its founding till 1998. At first it was a noble experiment with all those in it paid adequately and trying to give health for all as well as they could. The whole thing was self-governing, and everyone was trusted to procure things as cheaply as possible and look after each other and the patients. Then managers came and asked ‘What is the cost of a day in hospital?’ or’ What is the cost of an X-Ray?’ Some said that it was unwise to ask this, as keeping records that detailed would simply add to costs, which everyone was reasonably sure were as low as possible already. Hart details successive management demands and consequent cost increases until the cost of management became about 35% of the total, without any apparent improvement in the service.

Managers do not trust people to do their jobs, so they insist on KPIs, which then become more important than the job itself, distort the tasks done and kill any initiative that might have been used by the staff. Since the task are all defined to be as simple as possible the staff are de-skilled or not allowed to use any initiative and the managers award themselves a pay rise, so the gap between the lowest and highest paid reaches its current obsene level.

We now have a situation where most people work down to their station rather than up to their ability. We have a huge workforce in security and no one is allowed to use their own initiative beyond their management defined protocols as they pour time into producing KPIs so that they can be checked up on. Management has created immense overheads, even on top of their own inflated salaries. And no one can figure out why productivity growth is stalled! More trust is one solution. I can think of others.

2022: The year our trust was abused to breaking point

Ross Gittins Economics Editor SMH

December 14, 2022

As the summer break draws near, many will be glad to see the back of 2022. But there’s something important to be remembered about this year before we bid it good riddance. Much more than most years, it’s reminded us of something we know, but keep forgetting: the central importance of trust – and the consternation when we discover it’s been abused.

Every aspect of our lives depends on trust. Spouses must be able to trust each other. Children need parents they can trust and, when the children become teenagers, parents need to be able to trust them. Friendships rely on mutual trust.

Trust is just as important to the smooth functioning of the economy. Bosses need to be able to trust their workers; workers need bosses they can trust. The banking system runs on trust because the banks lend out the money we deposit with them; should all the depositors demand their money back at the same time, the bank risks collapse.

Just buying stuff in a shop involves trust that you won’t be taken down. Buying stuff on the internet requires much more trust. Tradies call on our trust when they demand payment before they start the job.

Our democracy runs on trust. We trust the leaders we elect to act in our best interests, not their own. Our country’s co-operation with other countries rests on trust. Of late, our relations with China, our major trading partner, have become mutually distrustful.

The trouble with trust, however, is that it can make us susceptible. And, as Melbourne University’s Tony Ward reminds us, it can be just too tempting to the less scrupulous to take advantage of our trusting nature.

They can get away with a lot before we wake up. But when we do, there are serious repercussions. Much worse, the loss of trust – some of it warranted; much of it not – makes our lives run a lot less smoothly.

The truth is that, as a nation, we’ve slowly become less trusting of those around us. But this year is notable for events where trust – or the lack of it – was central.

It’s widely agreed that the main reason the federal Coalition government was tossed out in May was the unpopularity of Scott Morrison. The Australian National University’s Australian Election Study has found that the two most important factors influencing political leaders’ popularity are perceived honesty and trustworthiness.

Its polling showed Morrison 29 percentage points behind Anthony Albanese on honesty, and 28 points behind on trustworthiness.

By contrast, many were expecting Daniel Andrews to be punished at the recent Victorian election for the harsh measures he insisted on during the pandemic. It didn’t happen. We don’t have fancy studies to prove it, but my guess is he retained the trust of the majority of voters.

The ANU study always asks questions about trust in government. This year it found 70 per cent of respondents agreeing that “people in government look after themselves” and only 30 per cent agreeing that “people in government can be trusted to do the right thing”.

This helps explain why the federal election was no triumph for Labor. The combined primary vote for the major parties fell to 68 per cent, the lowest since the 1930s. Labor’s own election report explains this as “part of a long-term trend driven by declining trust in government, politics and politicians”.

Related Article

Jessica Irvine

Senior economics writer SMH

Ward reminds us of the benefits of a high level of trust. It reduces “transaction costs” – the cost of doing business. “Profits and investments are higher if you don’t have to spend lots of time and money checking whether other parties are honest or not,” he says.

“People invest more in their own education if they believe a fair system will reward their efforts. If you think the system is rigged, why bother?”

Comparing countries, economists have found strong links between more social trust and higher levels of income. Trust is one of the top determinants of long-term economic growth.

And high-trust societies, with less distrust of science, had better outcomes in tackling COVID. That’s one respect in which we didn’t do too badly this year.

26/11/2022

The IR Bill- two problems and a suggestion

25 November 2022

When I buy petrol, I sometimes ask the attendant how much he or she is paid. Often they glance at the CCTV camera and say that they cannot answer that. But the other morning early I asked an attendant who looked like a very tired student from the Indian subcontinent. Yes, she had worked all night, a 12 hour shift for $10/hour cash. I asked her how she thought she might get a decent wage. She replied, ‘Well, an Australian boss might help’. I took this to mean someone who paid an award wage.

As small business tries hard to exempt itself from ‘sector-wide’ bargaining, I wondered how she will fare if there is still no industry-wide award or no enforcement. What will change?

I have a friend who runs a small business and he says that although wages have not risen, neither have small business profits. I asked why? He said that the supply chain had ‘consolidated’ and took a larger share of the final price. One might note that Deliveroo just left food delivery, Amazon is taking an increased percentage of online retail sales, Airbnb takes an increasing percentage of accommodation spending, Uber has increased its percentage take from its rides, and Spotify pays very little to those who make their music. It is the Monopoly game in real life, the big get bigger and the frail are pressed to the rail. The view that the biggest problem small business has is big business seems a neglected truism. The question is whether this will or indeed can be addressed by Federal Parliament. The point is that competition drives down prices, but cartels and oligopolies develop if not stopped. A new book looks at this problem, Chokepoint Capitalism www.thesaturdaypaper.com.au/culture/books/2022/11/30/chokepoint-capitalism#mtr

Another aspect is that the system seems totally unable to restrain is the salaries of top executives. One person I know advised, ‘I always vote against the management salary increases at the AGM’. There is legislation that salary rises have to be approved by the shareholders, but it seems that the top executives always have enough proxies to ensure that they salary rises come despite the efforts of small shareholders like my friend. So I suggest legislation that stipulates that no executive may get more money than, say, 20 times the full time equivalent hourly rate of the lowest paid person in the organisation. It seems that a few hundred thousand at the top does not matter, but a few dollars at the bottom do. This needs to brought into perspective.

24/11/2022

iCare- a letter to the Editor of the Sydney Morning Herald

24 November 2022

Dear Editor,
iCare was set up by private insurers on their model with the NSW government keen to minimise costs, take profits and distribute them (just before the last election). So iCare delays or refuses treatments to the needy, and was very careless about what their Pre-Accident Average Weekly Earnings (PIAWE) were. Many accident victims complained that they were underpaid, and that was before their compensation was stopped or cut because they were certified partially fit to do jobs that could not be found.

The overheads of Medicare are about 5%, iCare about 38%, so it is totally inefficient as well as incompetent with bloated salaries for the top executives who think it is a financial problem rather than a medical one and hence are unable to solve it. The real solution would be to fund Medicare as the only medical system and let the insurers have widespread income-guarantee insurance.
Sincerely
Dr Chesterfield-Evans- works as a GP specialising in Workers Comp and CTP injuries.

Here is an article from today’s SMH

EXCLUSIVE
Injured workers to lose benefits
Adele Ferguson

Greg Dayman is one of almost 400 workers who will get a Christmas ‘‘present’’ they will never forget.

The Sydney construction worker was badly injured on a building site in 2013, which left him unable to work with chronic pain in his neck, the side of his head, down his arm, torso and leg.

In 2017 he was among thousands of employees whose compensation payments to cover wages were cut as part of controversial reforms to the state’s scandal-ridden icare organisation. Changes to the legislation terminated injured workers receiving weekly wage benefits after five years unless they met a whole body impairment assessment of more than 20 per cent.
However, he still received medical or health benefits. Now he has found out even these will be cut from December 25.

‘‘It’s another upper-cut,’’ he said. ‘‘And to do it on Christmas Day, that’s just cruel.’’

Dayman is one of 395 workers facing a grim future as a crisis at icare deepens, with a document prepared by the State Insurance Regulatory Authority (SIRA) revealing the workers’ compensation scheme ‘‘has deteriorated to the point the longer-term sustainability of the scheme is under threat’’.

NSW Auditor-General Margaret Crawford will hold a performance audit into icare next year that will examine how effectively key risks are managed, including the rising cost of workers’ compensation claims and its payment processes. Dayman said he lost everything after his injury.

‘‘I lost my health, my career, and financially I’m in a position that if my specs break I can’t afford to buy them. The system dehumanises you, so you give up.’’

He does now qualify for a disability pension but will have to rely on Medicare for future medical treatment. ‘‘I have been suicidal at times because of the system and the way it treats you,’’ he said. ‘‘My time is spent trying to survive.’’

In the executive summary of SIRA’s review into icare’s Nominal Insurer Improvement Plan, dated September 26, the authority said it had a ‘‘low level’’ of confidence icare’s strategy would improve return to work rates and overall performance.

In 2015-16, 93 per cent of injured workers were back at work 26 weeks after their injury, compared with 84 per cent in August 2022.
SIRA said it believed icare’s strategy ‘‘encompasses an increase in work capacity decisions to cease worker benefits instead of focusing on improving health and recovery through return to work’’.
Richard Harding, icare’s managing director and CEO, said it was the insurer’s role to implement the law, and legislation ‘‘does not give icare any discretion to act outside that’’. ‘‘Tailored and individualised support is provided to workers transitioning from the workers’ compensation scheme,’’ he said. ‘‘This may include support from NDIS, Community Support Services and Medicare in conjunction with their GP.’’

This masthead this week revealed a third underpayment scandal of injured workers and concerns raised by NSW Treasury in August that a deterioration in icare’s finances would require insurance premiums to rise 33 per cent by 2025, or $1 billion a year, to cover the shortfall.

Against this backdrop, the icare board granted pay increases to 116 of its executives, including Harding, making him one of the state’s top-paid public servants, earning more than $1 million a year.
Shadow Treasurer Daniel Mookhey said icare’s finances were in a catastrophic condition.

‘‘They’ve lost billions. They are planning massive premium hikes. And their next step is to expel even more injured workers from the system,’’ he said.

‘‘It is a ruthless tactic stemming from their financial desperation.’’
In a statement, SIRA chief executive Adam Dent said its views on the Nominal Insurer Improvement Plan in September were made with limited detail on how the plan would be executed.

‘‘Over recent weeks, SIRA has continued to engage with icare to address information gaps, including detailed briefings on managing IT and transition risks associated with the onboarding of new claims services providers.’’

But SIRA said poor return to work performance continued to be an issue of concern.

‘‘Icare’s targets for 2023 are lower than current return to work rates, and they are projecting a further decline of 2.5 per cent on 26-week return to work rates through 2023 and 2024 as the scheme transitions to new claims providers,’’ Dent said.

Icare said its focus was building injured workers’ capacity for employment using rehabilitation providers and associated vocational placement interventions. ‘‘This includes assistance with job seeking and vocational retraining. Work capacity decision-making is applied when the worker has a demonstrated capacity for work and has been provided the right support.’’
Lifeline: 13 11 14

24/11/2022

Australia’s Role in the COP 27 Farce in Egypt.

24 November 2022

It seems that there is a growing view that gas is part of decarbonising the world to save it from Climate Change. The term ‘Climate Change’ is itself a euphemism for ‘Global Warming’ as the latter is a bit more threatening, like we have ‘new prices’ rather than ‘price rises’.

Natural gas is largely methane, which is carbon and hydrogen and burns to carbon dioxide and water. But methane is itself also a greenhouse gas, far more potent than carbon dioxide in terms of its warming effects, and quite a lot of it escapes into the atmosphere unburnt, especially if it is released by fracking. One may remember Jeremy Buckingham’s videos of him lighting the gas coming out of the river in Grafton. Carbon Capture and Storage or CCS is a bad joke, with the fossil fuel industry getting grants to research this. My view it is merely a tactic to play for time, like the search for the ‘safe cigarette’. It allows them to keep doing what they are doing, as regulators hope for a technofix.

The fossil fuel industry was in Egypt and seems did quite well, getting agreements to cut down on coal, but not gas and oil. And Australia’s approval for more gas was not criticised here, presumably because Europe is in such a mess with no Russian gas that they had become dependent on.

The cost of extracting gas has not changed, but Australia’s gas companies can just charge the world’s prices and can pocket the extra margin, known in economics as ‘super normal profits’. It might be noted that silly Liz Truss in the UK was going to subsidise gas for the people, i.e. simply give the extra profits to the gas companies by creating a taxpayer debt; a Tory idea of ‘welfare’. In Australia we just let the money go from consumers to the companies with few royalties. Norway and Qatar benefit from their resources- we don’t.

It seems that the COP meeting in Egypt was overshadowed by the G20 and the ASEAN meetings, but it is also likely that Egypt was leaned on by its affluent neighbours, the Middle East fossil fuel producers.

Here is a summary- it is not encouraging. The much-praised Albanese government has not done enough!

COP27: Australia promotes fossil fuels as pathway to carbon neutrality

19/11/2022

BUGA UP – the issues keep resurfacing

19 November 2022

BUGA UP originated in 1979, when its 3 founders were prevented from a regular evening out to re-face tobacco billboards by pouring rain. As it they sat and waited, they thought about how to publicise their work so that it did not appear as random anti-tobacco graffiti. They wanted a word that would be irreverent and would embody the concept of hitting back against the unhealthy promotions. After some discussion, the word BUGA UP was developed, an acronym for Billboard Utilising Graffitists Against Unhealthy Promotions. From that night they signed all the re-faced billboards with BUGA UP.

The major problem at that time was tobacco promotion, which accounted for over half outdoor advertising, with alcohol second. The concept was self-regulatory in that anyone taking up a spray can had to make their own decision about what they wanted to say, i.e. what they were willing to be arrested for.

A relatively large number of graffitists, especially from the medical fraternity, were inspired by what appeared to be a large campaign and were willing to be arrested for spraying on tobacco billboards. Other activists were concerned about alcohol promotion and some were concerned about sexism in advertising. A relatively small percentage were willing to be arrested for junk food or drink ads. (There were no ads for gambling at that time).

BUGA UP, however, looked at the whole issue of the regulation of advertising, asking that it not be one-way communication with no input from consumers or regulators as to the content or consequences of the promotions. The advertisers’ position was that it was their money, they could say what they liked, as this was ‘freedom of commercial speech’. Note the extra word in the cliche ‘freedom of speech’.

The advertisers set up a farcical ‘Advertising Standards Council’ which had very loose ‘codes of practice’ and an industry dominated judicial system, which took so long to work that the ad campaign was invariably over even if they banned an ad, which very rarely happened as they had the numbers in the kangaroo courts. One hapless paediatrician was recruited onto one of these committees, had his name used to champion the quality of its membership, and of course was outvoted in every deliberation. He eventually acknowledged sadly that he had been ‘used’ and he resigned.

But BUGA UP was active, producing a publication, ‘Billboard’, which was sent to all the major players in the advertising industry to emphasise to them that their regulatory systems were recognised as farcical. BUGA UP invented the ‘Advertising Double Standards Council’ to satirise the ‘Advertising Standards Council’. Its slogan was ‘If advertising standards are good, double standards are twice as good’.

One of BUGA UP’s members, Peter Vogel, wrote over 400 complaints about many ads. He was labelled a ‘serial complainer’ and they wanted not to respond to his complaints. He insisted that by their own charter they had to. They rejected all 400+!

Eventually there had been so much publicity about advertising regulation that the advertising industry wanted the Trade Practices Commission to re-legitimise its self-regulatory system, presumably as they thought government regulation was possible in the future. The Fairfax newspapers fronted this action, and it was opposed by ACA, The Australian Consumers’ Association. The advertisers said that their codes and practices were working well. At this stage Peter Vogel of BUGA UP came out of the woodwork, with his huge file of denied complaints. He had systematically made complaints using every item of the advertisers codes of practice and had a farcical response to every item, which the Commission could judge for itself.

Two academics, Shenagh Barnes and Michael Blakeney wrote a book called ‘Advertising Regulation’ (Law Book Co 1982) which concluded that the self regulatory system manifestly lacked credibility’. But despite the moral victory, the consequences of the trial were not good. The Trade Practices Tribunal concluded that it was not able to set up a regulatory structure, but could only either approve or reject what was put in front of it, so in the absence of any alternative it approved the self-regulatory system as it might have a bit of benefit over nothing at all. ACA, the Consumers’ organisation, was almost sent bankrupt by the legal fees involved, and overall the Industry had got what it wanted. A few years later when the issue had faded from the public eye, the Advertising Standards Council faded too.

The original BUGA UP guide, ‘Ad Expo- a self-defence course for children’ from 1983 is still available online, but of course its ads are now dated. (ww.bugaup.org/publications/Ad_Expo.pdf)

But now, as gambling wreaks havoc with families, and childhood obesity skyrockets, the issue of irresponsible advertising is back in the spotlight. Let us hope that there is more success this time, but a lot of work will be needed even to get up the momentum that BUGA UP had in 1983.

Here is an article on sugar and obesity:

Sugar shovellers are making us sick, fat and poor (and check out what they pay in tax!)

19/11/2022

The Myth of Liberal Competence-1

19 November 2022

One of the enduring myths of politics is that conservatives are better money managers. This is the case in the US, where the Republicans, who enthusiastically dismantle government programs that help poor people and the UK Conservatries who do the same. And it is the case here with the Liberals.

Perhaps the logic is that since they are rich, they must be better with money. But I wonder at the influence of Christianity. The key message is that you must suffer to be redeemed. Suffering is worthy and will later be rewarded. This seems to play into notions that the country will benefit if we all suffer now, ‘we’ in this case being those more dependent on welfare, or those at the bottom of the heap.

The other overarching fact in a market economy the more wealthy people can set the prices, which effectively means they set their incomes. At the bottom of the social pyramid, those at the bottom compete for the jobs and wages set by others. In short, the rich get richer and the poor get poorer. The game ‘Monopoly’ was designed to illustrate this. People play Monopoly, and when they win or lose, they stop the game and go on with life. But what is the game were real and never ended? The losers would get poorer and poorer until they had nothing else to give. That arguably is what a market economy will do without some intervention from an outside force, like a government, to intervene in the cause of those going backward.

Arguably the world’s leading economist is Thomas Piketty. He is a Frenchman who, as he rose, was offered a post in Harvard. He did not take it, opining that economics in the US was theoretical and not based on hard data, as a science should be. Records of national income and death duties going back for 400 years in 4 countries had been put together and he analysed it. His book, ‘Capitalism in the 21^st Century’ is a towering work. It is long, but it is very well-structured with concise conclusions at the beginning and the proof in the later chapters for those who want to read more. He observed that the wages of the population go up at the inflation rate, and the income of the rich who loaned money go up at the interest rate, but the interest rate was always higher than the inflation rate, otherwise there would be no profit in lending. So the income of the rich would always go up faster than the rest of the population, so social inequality would increase in the absence of other interference.

It has always been known that money goes round, and to stimulate the economy people have to spend more. But Piketty points out that poor people spend a greater percentage of their money than rich people. Very poor people spend all the money they have, rich people save about a third. So if you want to stimulate an economy, you should give money to poor people. This is of course not what conservative governments do. They give money to infrastructure, which these days means big private contractors or have industry assistance packages. But these initiatives are giving money to the rich, on the assumption that it will generate more jobs in the long term than the extra consumption would have generated.

(You might ask why Piketty has not got a Nobel Prize for being the first economist to use real data over centuries and come to such a profound conclusion. If you did ask that you might wonder if the Nobel prize economics committee are all neo-liberal economists and you might be right).

The point is without government intervention, the rich will get richer and the poor will get poorer. The best way to minimise this is to have as much shared wealth as possible in the form of park and public facilities, such as transport, health, education and essential services that blunt the significance of income disparities, as a base-line is set without it having the stigma of charity.

But conservative governments, like the Nobel committee want to ignore Piketty and the obvious facts as they do not suit their ideological agenda. A cynic would say that the ideological agenda from right wing ‘think tanks is merely an endless list of convenient reasons to keep the money flowing to the top end of town, to lessen government ‘interference’ which might act for fairness, and to commodify everything such as housing, transport and education so they can become profitable, increase inequality and profit those at the top. How can this agenda ever be considered the foundation of good financial management?

But as Treasurer, Morrison was not even clever in his management of his own revenue. Here is a tale of how his GST deal with Western Australia was out by a factor of almost 10 times over 3 years. Yet the legacy of this shambles is contracts and deal that other have to grapple with.

One of the modest contributions that I am seeking to make to political discourse is to sheet home the blame for failures to the people responsible for them. Here is a start, from the SMH:

Cost of Morrison’s WA GST deal blows out by $20 billion as debt hits record high

By Shane Wright SMH November 14, 2022 — 5.00am

A deal put in place to placate Western Australia when its share of GST revenue was tumbling is on track to cost the nation’s taxpayers 10 times more than originally forecast, helping drive up federal government debt and interest payments to record levels.

Pulled together by then-treasurer Scott Morrison in 2018 before being put through parliament by his successor, Josh Frydenberg, the deal that was originally expected to cost $2.3 billion is now on track to cost more than $24 billion.

WA, which delivered four seats to Labor at the May election on the back of a 10.6 per cent swing, is vowing to fight to keep the arrangement, due to expire in 2026-27.

Morrison struck the deal at a time WA’s share of the tax pool had fallen to an all-time low of 30 cents for every dollar of GST raised within the state. Its iron ore royalties were effectively being redistributed among the other states and territories based on a Commonwealth Grants Commission formula that takes into account each state’s revenue sources and expenses.

Under Morrison’s deal, from 2022-23 WA must receive a minimum of 70 cents in the dollar before increasing to 75 cents in 2024-25. When the policy was put in place, it was expected iron ore prices would fall and WA’s share of the GST pool would therefore rise. Instead, prices have soared.

The Morrison government ensured other states and territories wouldn’t be worse off, which requires the top-up funding for the deal to come from outside the $82.5 billion GST pool.

It was originally forecast to cost federal taxpayers $2.3 billion over three years, including just $293 million in 2021-22, but the surge in iron ore prices has meant more top-ups and for longer.

The October budget revealed that last year, the deal cost $2.1 billion and is forecast to jump to $4.2 billion this financial year. By 2025-26, the cost of the entire deal is on track to reach $22.5 billion, with another $2-3 billion likely the year after that.

Throughout the entire period, the budget is expected to be in deficit, forcing the extra cash to be borrowed. In percentage terms, the blowout in cost is larger than the NDIS, aged care, health or defence.

Independent economist Chris Richardson said the deal had been ill-conceived from the beginning with the cost to be borne by future taxpayers.

He said all significant spending programs needed to be properly assessed, including the GST deal.

“Yes, the politics of it are difficult. But we have a whole host of other issues, like the NDIS, and the economics of them have to be dealt with,” he said.

Any change to the GST deal would create enormous political problems in WA which is likely to gain more political power with an additional seat in a looming federal electorate redistribution.

WA Premier and Treasurer Mark McGowan, who reported a $5.6 billion budget surplus for the 2021-22 financial year, told this masthead he expected the GST deal to remain.

“I have made it very clear that West Australians will not accept any changes to the GST distribution,” he said.

“Those on the east coast who are demanding WA lose out still do not realise that under the reforms, WA will receive 70 per cent of its population share of the GST next financial year. In complete contrast, no other state has ever received a share of the GST lower than 83 per cent.

“WA will continue to subsidise all the other states into the future under this arrangement. No state has lost a dollar under these reforms.”

The extra borrowing for the GST deal has contributed to the lift in gross debt, which on Friday reached a record $909.4 billion.

Ahead of the COVID-pandemic, gross debt was expected to reach $576 billion this financial year. Instead, it is now forecast to reach $927 billion before reaching $1 trillion in 2023-24.

Treasurer Jim Chalmers said the cost of servicing the debt was getting more expensive and was now the budget’s fastest-growing expense.

“We’ve made good progress in a very short space of time. We’ve found $22 billion in savings and kept real spending growth flat across the forward estimates,” he said.

“[But] it will take more than one budget and more than one term of government to make up for a decade of missed opportunities and messed-up priorities.”

05/11/2022

The Twitter Story- and the bigger subtext

5 November 2022
Elon Musk likes to play in every game. His car company existed on hope for many years, but has at last ramped up production. He is in software, AI, batteries, cars infrastructure with tunnelling and trains, space rockets, investments, and now politics.

Twitter has established itself as the world’s political events exchange platform. A new concept like Twitter, which allows direct person to person contact was a good idea. Naturally if there is to be a conversation, everyone has to be in it, so a monopoly system is favoured if the system is new and is seen to work. So Twitter has become unique and immensely powerful. But the technologies that have everyone able to have an equal voice enable radical and socially damaging perspectives to be aired and publicised, legitimised by their ubiquity. Radical groups can link up with others anywhere, adding strength to isolated opinions and tending to lead to discussions that become even more radical and may lead to action.

So the social effects of the new technologies have created new and effectively unaccountable power structures. The regulation of these can be by government edict, as in China, or left to the corporate owners as in the West. Both these regulatory actions and the lack of them are controversial and many have long term political and social effects.

Now Elon Musk seems to have offered to pay too much for Twitter. He tried to withdraw his offer, but was forced to honour it. Having paid too much, he now wants to cut staff numbers radically. I was under the impression that social and political pressure was making Twitter more responsive to concerns about its social and political effect and its staff were part of an effort to minimise any harm it might do. If this is so, it is likely to be, no staff = no action.

So looking at Twitter as purely a financial entity verges on the absurd, but that is what is happening. And a financial mistake by Musk, and his corrective action in sacking people may have considerable effects. Commentators are already talking about the polarisation of US politics and the rise of violence with the storming of the US Capitol and the easy and unsophisticated attack on Paul Pelosi.

So the subtext of the situation is that an unregulated world market allows the immense concentration of power such that when the world’s richest man corrects what is for him a relatively minor financial error a major world information system is significantly disrupted and may become dysfunctional. (Whether it was considered dysfunctional before is a matter of opinion- it is hard to get an exact understanding of how much power the Twitter information model has).

One of the more ridiculous features of our society is that those with money, or who know about it are assumed to know about everything. They know about money, and have usually specialised in making it to the exclusion of other concerns. Often, it is dubious that they have the faintest idea about the implications of their actions.

Because the world’s economy advisers have allowed the world to become just a market we have the equivalent of elephants in China shops and we wait and wonder which way they will turn. A more cynical view would be that we have a situation where the playthings of the rich can have massive uncontrolled consequences and there are no regulatory mechanisms that have either the will or the power to influence the situation in the public interest.

The jobs of the Twitter employees are the tip of a very large iceberg, and the stories of Twitter’s share price have a much larger subtext. Here is an article from today’s SMH:

Twitter staff shut out as global purge starts
Zoe Samios, Nick Bonyhady

Twitter Australia staff were being locked out of their company accounts yesterday as billionaire Elon Musk’s job cuts hit the local office in Sydney, which employs about 40 people.
Musk told confidants he planned to eliminate half of Twitter’s workforce to slash costs at the social media platform he acquired for $US44 billion ($70 billion) last month.
Local staff in marketing and news curation were shut out of Twitter’s systems after receiving an email signalling layoffs but without any official confirmation that their jobs were being axed. Others were waiting to see if they would still have a job come Monday.
One employee said there was a sense of relief. ‘‘It’s not the company that we joined, and it’s not the app that we all love any more,’’ they said.
Others familiar with the company said the news team, which selects articles on topical moments in the national discourse, is among the largest local units and had about 10 staff. Some communications staff for the Asia-Pacific region have also been locked out.
Twitter’s local public relations representative declined to comment.
Australian staff received an email yesterday morning saying Twitter would ‘‘go through the difficult process of reducing our global workforce’’. Staff were to be told whether they still had a job via email by 9am Pacific Standard Time, or 3am AEDT yesterday, but the lockouts started early.
‘‘We recognise that this will impact a number of individuals who have made valuable contributions to Twitter, but this action is unfortunately necessary to ensure the company’s success moving forward,’’ the email, which was obtained by the Herald, said.
The Herald revealed in July that Twitter was closing its Australian office in Sydney, with staff to work from home.
All told, Musk wants to cut about 3700 jobs at San Francisco-based Twitter, people with knowledge of the matter said this week. The entrepreneur had begun dropping hints about his staffing priorities before the deal closed, saying he wants to focus on the core product.
‘‘Software engineering, server operations & design will rule the roost,’’ he tweeted in early October.
Twitter was sued over Musk’s plan to eliminate the jobs, with workers saying the company is doing without enough notice in violation of federal and California law. A class-action lawsuit was filed on Thursday in San Francisco federal court. The federal Worker Adjustment and Retraining Notification Act restricts large companies from mounting mass layoffs without at least 60 days’ notice.
Security staff at Twitter’s San Francisco headquarters carried out preparations for layoffs, while an internal directory used to look up colleagues was taken offline on Thursday afternoon, people with knowledge of the matter said.
Employees have been girding for firings for weeks. In recent days, they raced to connect via LinkedIn and other non-Twitter avenues, offering each other advice on how to weather losing one’s job, the people said. with Bloomberg

01/11/2022

Want to know about high energy prices?

4 September 2022

It is about market failure. When public power utilities were privatised a market was set up and power producers could bid into a market to supply at a certain price for each period of time. But obviously if someone bid in at a low price for part of the market, they would then watch as others bid in higher and made more money. So the price to all producers was set at the last bid, so the cheap producers made a lot of money.

There were a few problems. The amount of electricity needed varies widely. Coal fired power is not very flexible-it needs a constant load, cannot be stopped and can vary its output only slowly and within a limited range. When renewables came, solar is only in the daytime, and wind varies, so the system had a problem with ‘stability’- the ability to dispatch power when it was needed.

Another problem was rorting, though no one wanted to talk about this. There were big players who could withhold power so that there was a shortage; the price went up, and then they all cashed in. ‘Imperfect competition’ as economists would call it. No one wanted to build coal plants and there was not enough storage to let renewable energy last overnight or for dull or windless days. So the Morrison government said that gas was a ‘transition fuel’ and more gas plants would be built.

Meanwhile the Australian gas industry agreed to massive export contracts on the assumption that they could frack Australia as the US had been fracked. But the environmentalists realised the harm this did and resisted. So our price of gas went up. So the companies pressured the Albanese government, which is now breaking its election promises and approving fracking. Sorry environment- what is a bit of permanently polluted groundwater and desertification between friends?

Of course years ago, publicly owned utilities run by professional engineers were charged with providing electricity and gas to the public on a non-profit basis. They charged enough to cover their costs with some money for maintenance and future planning. The price was the average price of generation, not the most expensive component. The model worked quite well and could again. The change to a ‘market’ was ideological.

At an international level, the problem is similar, but it all being blamed on Russia, which is only partly true. Naturally in a globalised world, we are also affected by the European gas market, but less directly, especially if we frack to get out of it; which is a very bad solution, substituting a long-term problem for a short-term one.

Here is an international article:

https://eand.co/this-is-why-your-energy-bills-are-going-through-the-roof-cc99e2a59d12

26/10/2022

Electric Vehicles: How helpful are they for Climate Change?

5 June 2020

There are claims and counter claims for how much electric vehicles (EVs) improve the greenhouse gas situation. The production of batteries is quite energy-intensive, so a large battery car takes about twice as much energy to produce as a normal Internal Combustion Engine (ICE) car.

The ‘payback’ time for that extra energy is about 2 years based on the number of km an average (UK) driver does per year.

But the key variable is how the electricity is generated, both in making the battery and in running the car. If it is made in Asia with coal fired electricity to manufacture the car and then charged with coal powered electricity, there is very little benefit. If the battery is produced by renewable electricity and the car charged with renewable electricity, the savings are more than two thirds by 150,000km.

If you keep your old ICE car for 4 years, it will have produced about the same amount of greenhouse gas as it takes to produce a new electric car. Looked at it the other way, it takes 4 years for a new electric car to pay for itself from an emissions point of view as against paying just for the petrol of an existing ICE car.

www.carbonbrief.org/factcheck-how-electric-vehicles-help-to-tackle-climate-change