Issue 251, 07 October 2009

Issue of the week:

“Overall, growth through 2010 looks likely to be close to trend.” With this short sentence in a one and a half page statement announcing a 25 point rise in the official cash rate, the RBA effectively declared a return to our regularly scheduled economic programming. The Banks’ statement also said “it is now prudent to begin gradually lessening the stimulus provided by monetary policy”.

Treasurer Wayne Swan was far more cautious in his appraisal of the situation, saying the economy still requires support, which justifies continuing the economic stimulus in light of the Coalition’s push for the Government to wind back the funding measures.

Unfortunately for the Opposition, the cash splash is done and dusted. The stimulus is now focused mainly on infrastructure spending and pushing too hard for it to be wound back could be electorally disastrous. The electorate doesn’t have a deep grasp of economics and rates go up and down. They do know, however, people employed on school, road and rail construction, and they send their kids to schools getting a shiny new gym or classroom.

What’s to come:

Peter Dutton’s failure to obtain pre-selection for McPherson has set off another round of calls to undo the merger of the Queensland Liberal and National Parties, adding to Malcolm Turnbull’s already difficult leadership position.

Dutton, currently Opposition health and ageing spokesperson, is considered a potential future Liberal leader. The only problem is that following an electoral redistribution his knife-edge marginal seat of Dickson in northern Brisbane has become notionally Labor, and holding it at the 2010 election will be tough for the 38 year-old former policeman. Seeking a safer home to continue his career, Dutton entered the pre-selection race in the safe Gold Coast seat.

Although Turnbull is understandably keen to keep Dutton in Parliament, he is left with few options. Having ruled out standing for the newly created seat of south-west Brisbane seat of Wright in strong Nationals territory, under LNP grandfathering provisions attached to the merger he is unable to challenge a tired sitting member.

Old allegiances die hard and we can expect more messy and public difficulties for conservative politics as they move through the pre-selection round and election lead-up.

Something you didn’t know:

When the Prime Minister was last in the US he delivered a number of addresses to different audiences, as you would expect. What’s a little unusual is that the presentation was often accompanied by a pretty nifty PowerPoint presentation. You can take the boy out of KPMG, but apparently you can’t take KPMG out of the boy.

ICU:

Banks are hardly the most beloved of our large institutions and brands. The sector received another hit this week with a Melbourne Business School study finding the departures of many female bank staff “can be attributed to unfriendly and even discriminatory work practices that occur amid organisational change and masculine cultures”.

The departure of talented female managers and professionals also drains the pool of women who can become directors. The Productivity Commission identified gender imbalance on Australian boards as a problem in its review of executive pay. Twenty-five years on from the introduction of the Sex Discrimination Act we’ve still got some way to go.

Personality of the week:

Giving Deakin University’s annual Searby oration in Melbourne last week, Finance Minister Lindsay Tanner proved once again he’s one of the thinkers in the Rudd Government. The speech, on productivity and complacency, was thoughtful, considered, strategic in its outlook, and political.

In discussing the various reforms that have transformed the Australian economy over the last two and a half decades, the former Federated Clerks Union official said “microeconomic reform, labour market reform, and ICT investment formed a virtuous circle that generated a surge in productivity growth in the 1990s”.

Tanner made the case that most of the current Government’s reform agenda was small and incremental stuff – infrastructure, skills, innovation and deregulation – that together added up to a significant whole. But, he said, the Government’s big reform was the NBN, which “will change almost everything”.

“Every time a major new technological leap is on the horizon, many insist on seeing its possibilities as limited to what currently occurs through established technologies,” he said.

“Hence some economists have calculated the price monthly vanilla broadband access plans will cost based on a minimum commercial return for the broadband network. This is rather like replacing a goat-track with a four-lane freeway but assuming it will be used only by the same vehicles.”

Political quotes of the week:

“People do not want to have imposed on them candidates from outside their own area simply because there has been a sort of factional deal stitched up.”

- We’re wondering if Peter Dutton now regrets his comments in Parliament on 15 September last year on ALP state pre-selections in Queensland.

Media quote of the week:

“The Liberals should beware the idea they have an obligation to commit political suicide in the national interest. If Rudd's policies are so disastrous then he should be entitled to bear their consequences.”

- Paul Kelly, in The Australian, 7 October, 2009.

ICU quote of the week:

“It’s apparent too many of our female managers and professionals continue to face workplace discrimination, which is often hidden under the guise of ‘restructuring’.”

- Associate Professor Isabel Metz, from the Melbourne Business School at the University of Melbourne, 5 October, 2009.