Catallaxy Files

Last year I wrote that Stern Hu was doomed, and today we have confirmation of that prediction.

The judge presiding over the case said the four men had seriously damaged the competitive interests of Chinese steel companies.

He said their actions forced Chinese steel companies into an unfavourable position in price negotiations, and this led to the collapse in iron ore price negotiations in 2009.

The four executives were tried last week in a Shanghai court but most of the proceedings were held behind closed doors.

This is what I wrote last year.

Michael Danby is the MP for Melbourne Ports. He is also chairman of the Parliamentary Foreign Affairs Sub-Committee. Unlike the US, Parliamentary sub-committees do not exercise any real power or authority and Danby is actually just a back-bencher. He has published an op-ed in the Wall Street Journal Asia that can only be described as spin.

Mr. Rudd’s immediate priority however is to get the matter of Mr. Hu resolved. The correct course is for Australia to work patiently but firmly to ensure that Mr. Hu is treated correctly, that the charges against him are brought as soon as possible, that he has access to legal counsel, and that he receives a fair and open trial.

I’ve added the emphasis on ‘immediate priority’. Glenn Milne seems to think that the Rudd government’s immediate priority is to gain a Security Council seat.

What Hu’s family must have thought of Australia’s Foreign Minister, Stephen Smith, rushing off to a meeting of non-aligned nations in Cairo in the middle of the increasingly ugly diplomatic stand-off with China over their husband and father can only be imagined.

But nothing was deterring Smith, or more properly Rudd. Forget Hu. Smith was dispatched to Cairo with one preconditioned riding instruction: to lobby UN members at the non-aligned conference for votes in Rudd’s bid to secure his Security Council seat.

In Rudd’s foreign policy firmament, Hu apparently came a distant second to the UNSC priority. Smith was left to remain in touch with the Australian public regarding the fate of one of its own via Sky News.

The biggest problem with Michael ‘chair of the Parliamentary Foreign Affairs Sub-Committee’ Danby’s argument, however, is this

The previous conservative Australian government learned the hard way how carefully Australia-China relations must be handled. In 1997 Australia had a similar case to this one, when Australian businessman James Peng was arrested in China. Mr. Howard didn’t “pick up the phone” to President Jiang Zemin. Instead he worked patiently through diplomatic channels, and eventually secured Mr. Peng’s release.

The Australian Broadcasting Corporation describes these events as follows

Successive governments have made sure the Peng case has been an irritant in the bilateral relationship since 1993. It was then the Chinese-born Australian citizen was seized by Chinese security officials in the Portuguese enclave of Macau, bundled across the border and charged with embezzlement and misappropriation of company funds. And then, after two years in detention, a sixteen-year sentence in a Chinese jail, based on laws passed sixteen months after his initial detention.

All through failed legal and political appeals the case twisted and turned, with Mr Peng’s supporters pushing the line that the whole saga was pay-back over a failed business deal with one of Deng Xioping’s relatives. Yet constant lobbying from Prime Minister’s and Foreign Ministers down had no impact on the Chinese Government.

Even Biggles couldn’t weave his magic. James Peng was eventually deported to Australia in November 1999 and won some vindication in the Hong Kong courts – but in 1993 why would John Howard pick up the phone to the Chinese? At that time he was a failed washed-up former leader of the opposition who wasn’t going anywhere fast. (On that note, let’s give thanks one more time that Paul Keating won the 1993 election and saved Australia from a Hewson government. Hewson was in the Fin Review Friday saying that the Chinese wouldn’t have arrested Hu unless they had a water tight case. Remember to trust the government – they only ever arrest guilty people, the innocent have nothing to fear.)

You also have to worry about Danby’s description of ‘arrested in China’. The Sydney Morning Herald seems to think ‘Mr Peng was kidnapped from a hotel room in the then Portuguese colony of Macau and taken to Shenzhen’.

All up, I think the Hu family and friends can take little comfort from the Rudd government – especially if the best they can do is roll out a backbencher to write error-ridden partisan apologetics for doing nothing.

On a related note be sure to read David Burchell.

Andrew Fraser told us on the weekend

But the bigger error is to overstate the involvement of the Prime Minister and Wayne Swan. In 1995, the Treasurer was the federal member for Lilley, while Mr Rudd was the endorsed ALP candidate for Griffith, and both were focused on the coming federal election. Both helped out in the campaign, but they weren’t involved in the day-to-day work and planning.

While I was trying to hunt down whether or not Rudd was a public servant at the time of the 1995 Queensland election – he propably wasn’t – I found some great quotes in the Sydney Morning Herald (no links unfortunately).

Mr Johns said the campaign team – which includes Mr Wayne Swan, the Federal member for Lilley, and Mr Kevin Rudd, a Goss political adviser who will stand for the marginal Labor seat of Griffith – were “a panicky little mob”.

“They’re very anally retentive, and they turned in on themselves,” he said.

That’s Gary Johns the then federal Special Minister of State quoted in the SMH 18 July 1995.

The feeling of many in the ALP is that Goss had become arrogant and lost touch with community feeling. His critics claim he relied too much for advice on an inner circle of confidants, known as the “boys in suits”, principally the Federal ALP candidate for Griffith and former director-general of the Queensland Cabinet, Kevin Rudd; the Federal MP and former State ALP secretary, Wayne Swan; Swan’s successor, Mike Kaiser; and the head of the Government’s media unit, Dennis Atkins.

Those words were written by Greg Roberts and published in the SMH on 22 July 1995.

Stephan Lewandowsky March 29, 2010

one must understand that peer review is egalitarian but not indiscriminate; that it is fallible but self-correcting; and that it exercises quality control but not censorship.

Phil Jones March 31, 2004

Recently rejected two papers (one for JGR and for GRL) from people saying CRU has it wrong over Siberia. Went to town in both reviews, hopefully successfully. If either appears I will be very surprised, but you never know with GRL.

Isn’t it amazing/hypocritical that the Health Minister, Nicola Roxon, today criticised Tony Abbott for spending his Sunday completing a triathlon (the Iron Man competition)?

The same Minister who is in charge of a department that is promoting Government programs such as:

• A healthy and active Australia; and
• How do you measure up (raising awareness of the importance of a healthy lifestyle)

On 15 August 2008, the Minister announced funding of $17.6 million to promote healthy lifestyles.  This included the promotion of exercise.

In a speech on 22 October 2009, the Minister said:

The Rudd Government is deeply committed to ensuring that by the time a child leaves school good eating and exercise habits are in place.

So why would she – of all people – criticise the Leader of the Opposition for partaking in a triathlon?

Is it because she is unwilling/incapable of doing so herself?

The Health Minister should instead be encouraging the Prime Minister to follow the Leader of the Opposition’s example.

After all, in that 22 October 2009 speech, the Minister also said:

Physical activity reduces depression, stress and anxiety, and improves self confidence, self esteem, energy levels, sleep quality and concentration.

So, Minister Roxon, let’s celebrate Tony Abbott’s achievements together.

With its recent “active transport”  policy for Canberra transportation, the ACT Greens once again shows it is out of touch with reality.

The Party’s planning spokesman, Caroline Le Couteur, announced the policy which includes some amazing silliness:

• speed limits of 30 km/h in town centres
• banning drivers from “busy parts of the city”

She also wants to increase parking fees to

wean Canberrans off their reliance on cars

She also said:

Active transport is fuelled by people, not fossil fuels, so it is also good for our planet’s health.

My vision is that Canberra will move from a car-based city to a city that prioritises people.

Look at Sydney, look at Brisbane, look at all larger cities. People know they can’t just drive where they want and expect to park.

Does it not occur to Ms Le Couteur that Canberra has a number of special features, including a relatively low population spread widely? Canberra is 814 square kilometres of occupied city with a density of 424.6 people per square kilometre. This is partly by design, but mainly because planners in Canberra have prevented large parts of the city being occupied – there are huge tracts of land in between the major centres of Belconnen, Tuggeranong, Gungahlin, Weston Creek, Queanbeyan (in NSW) etc.

Canberra has a population of about 345,000.

Compared to Canberra’s population density, the other capital cities have:

• Sydney: 2058 persons per square kilometre
• Melbourne: 1566 persons per square kilometre
• Brisbane: 918 persons per square kilometre
• Adelaide: 1295 persons per square kilometre
• Perth: 289 persons per square kilometre
• Hobart: 895 persons per square kilometre
• Darwin: 926 persons per square kilometre

It takes me around 20 minutes to drive to work. If I take buses, it is around 2 hours. That would mean increasing my transportation time from 40 minutes a day to 4 hours a day. Is that what Ms Le Couteur expects?

Get real Greens – the future of transportation is private, not public. It is an individualised transportation module. One day, perhaps, roads will be redundant when we have our own self-piloting vehicles that can fly. But until then I will enjoy my car and the freedom it gives to me.  And I don’t use ACTION – the longest distance between any two points is an ACTION bus route.

Several of my Facebook friends have put up this picture and claim they’ll be putting on all their lights etc. Others will celebrate human achievement hour and so on. How people choose to live their lives is their business.

I really like the picture because it demonstrates that markets work better than government planning.

Great interview in the WSJ.

I begin with the obvious question. “The health-care legislation? It’s a bad bill,” Mr. Becker replies. “Health care in the United States is pretty good, but it does have a number of weaknesses. This bill doesn’t address them. It adds taxation and regulation. It’s going to increase health costs—not contain them.”

Drafting a good bill would have been easy, he continues. Health savings accounts could have been expanded. Consumers could have been permitted to purchase insurance across state lines, which would have increased competition among insurers. The tax deductibility of health-care spending could have been extended from employers to individuals, giving the same tax treatment to all consumers. And incentives could have been put in place to prompt consumers to pay a larger portion of their health-care costs out of their own pockets.

“Here in the United States,” Mr. Becker says, “we spend about 17% of our GDP on health care, but out-of-pocket expenses make up only about 12% of total health-care spending. In Switzerland, where they spend only 11% of GDP on health care, their out-of-pocket expenses equal about 31% of total spending. The difference between 12% and 31% is huge. Once people begin spending substantial sums from their own pockets, they become willing to shop around. Ordinary market incentives begin to operate. A good bill would have encouraged that.”

Never believe anything until it’s been officially denied is a very cynical approach to modern politics. Today, The Australian has published the denial.

IT was something of a shock to read Piers Akerman in Sydney’s Daily Telegraph this week outlining how Kevin Rudd helped devise a “rancid turd” strategy in the 1995 Queensland state election to demonise the Coalition on health.

It was even more of a shock when he revealed that Wayne Sanderson, an ABC journalist at the time, claimed this was told to him by a “senior campaign official” within the ALP.

I can reveal without a shadow of doubt the identity of that official. It is someone I have known and trusted for years. As George Bush senior once said: “I am that man.”

At the time, I was press secretary to then Queensland health minister Jim Elder, so while I had a pretty busy election in that role, I was well down the pecking order of campaign officials. Still, Sanderson wouldn’t be the first journalist to paint his sources as being more important than they actually are.

But it’s time for a few facts. Firstly, while I can confirm I used the word “turd”, I didn’t use the word “rancid”. My word was “smelly” – how could such an object be otherwise?

So as best I can work out the whole denial turns on the fact that journalist Wayne Sanderson (yes, that’s our old friend) says ‘rancid’ and Andrew Fraser said ‘smelly’. Fraser goes on to make a big thing over he fact that he never said the word ‘rancid’ and we are then expected to believe that that whole of the rest of the story isn’t true.

But what did Sanderson say?

I was eventually told by a senior campaign official that they had a rather glorious title for the style of campaigning they were adopting. They said that it came under the rancid turd theory. Now, allow me, if you are game, to elaborate. This particular theory goes like this: if you have a problem in a particular area, such as health, then you look for the ugliest, nastiest unmentionable in that same area and you throw it at your opponents—the theory being that by the time they have got the smell off their suits, the campaign is over.

Okay – so substitute the word ‘smelly’ and ‘rancid’ and consider how that story changes. Well, actually it doesn’t change at all. It is also not clear that Fraser’s comments and Sanderson’s comments are inconsistent either. Fraser may well have said ‘smelly’ and Sanderson then says that this is covered by the ‘rancid turd theory’. Fraser is also remembering back over a period of 15 years.

To my mind that component of the Fraser admission is a sideshow. What it does do is confirm the Sanderson account. The Goss government deliberately set out to mislead the voters through an advertising campaign. As I suggested before, there is an element of voter beware – and as we know the voters in the 1995 Queensland election did not take kindly to this.

Unfortunately for Labor, I think the smell ended up on the wrong suits, so to speak. Even worse for them was the damage it did to Wayne Goss’ standing and credibility. It had been their most potent political weapon and, as the coalition’s campaign director observed after the campaign, that campaign allowed the coalition for the first time to target Wayne Goss’ standing.

The far more important question is who decided the undertake that misleading advertising? Piers Akerman picks up the story.

IF you thought there was something smelly about the so-called health debate, you would be entirely correct. It was nothing more than a re-run of the strategy adopted by Queensland Labor’s Goss government in 1995, a strategy formulated by the two most senior public servants in premier Wayne Goss’s inner-circle, Kevin Rudd and Wayne Swan, in concert with Mike Kaiser, the then ALP state secretary.

As best I can work out Rudd and Swan are only mentioned once each in the Sanderson document – Rudd is described as supporting the Hilmer reforms, how times change. So Fraser has now confirmed that Rudd was involved, as was Swan. Fraser tries to suggest that they only had a peripheral in the campaign.

Both helped out in the campaign, but they weren’t involved in the day-to-day work and planning.

But how would he know? By his own admission he was a lowly official on the campaign, so he wouldn’t have been party to senior meetings or serious decision making. But then perhaps he was a senior official as Sanderson suggests. Of course, Sanderson hasn’t said who he spoke to; Fraser is assuming that Sanderson had only spoken to him.

So where does this leave us? All up we now have a confirmation of the basic facts, but no credible denial of the role that Rudd and Swan played in the 1995 misleading health ads. We also know that Rudd and Swan, fifteen years later, are trying the same stunt.
Update: Myrddin Seren, in comments, raises a good point. At the 1995 election Kevin Rudd was a senior public servant – why was he helping out in the campaign at all? By this time Wayne Swan was a sitting federal MP and as the former State Secretary it is quite appropriate that he ‘helped out in the campaign’.
Update II: Badm0f0 suggests that Rudd wasn’t a public servant at the time of the 1995 Queenland election. I can’t find a definitive date for when Rudd left the public service, but news reports that I have managed to find speak of him in the past tense. So I think we should accept Bad’s memory as being correct.
Update III: Wayne Sanderson emails to deny that he was MichaelF.

In an excellent article in today’s Financial Review, John Roskam outlined the failures of the NSW administration, stating

At the rate it’s going, NSW will end up like Europe. A nice place to go for a holiday, but you wouldn’t want to live there. Or start a business there.

John then cites statistics showing that, since 1995, the growth in the NSW economy – as measured by gross state product (GSP) – has lagged considerably the other states and territories.

I thought it worth comparing the growth in real gross state product per capita since 1995.

It turns out that real GSP per capita in NSW since 1995 grew 25 per cent compared with the national average (real GDP per capita) of 33.4 per cent and the other states and territories as follows:

• Victoria, 36.8 per cent
• Queensland, 40 per cent
• South Australia, 37 per cent
• Western Australia, 38.7 per cent
• Tasmania, 38.9 per cent
• Northern Territory, 46.1 per cent
• Australian Capital Territory, 35.3 per cent

The data extracted from the ABS appears below.

It is telling that in 1995, GSP per capita in NSW exceeded the national average, it now is below the  national average.

Now some of this relative decline is due to catch up by the other states – perhaps through better policies and better luck (eg: resources).

But a significant portion of the relative decline is probably due to poor governance – the lack of courage to take economically reformist policies and to govern in the State’s interest rather than looking after one or more vested interests. NSW today is close to, if not at, crony capitalism.

But at least it is a nice holiday destination.

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