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Sep 13, 2012

Cognitive dissonance as Newman flails the coal industry

Concerns about the quality of Australian management, once claimed to be partisan sniping, are now shared by a conservative premier. That didn't fit the narrative at all.

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Well, ouch. That didn’t fit the narrative at all.

Campbell Newman not merely raised coal royalties in Queensland on Tuesday, but went on to attack coal mining companies yesterday, blaming poor management for their high cost:

“Now the mining industry’s had problems for some time. They’ve allowed their costs to get out of control. They’ve allowed basically poor industrial relations practices, poor management practices. The productivity has dropped. If there are going to be mines that are closing, well that’s not just about royalties, it’s a lot to do with the performance of the companies themselves.”

Let’s roll back a few weeks in the productivity (non)debate to recall what happened when Treasury released a paper suggesting that poor management practices might have contributed to the decline in multifactor productivity in the manufacturing sector: it was criticised (“dramatically miss[es] the target” opined Henry Ergas, who’d know a thing or two about poor management) and cited as evidence of Treasury’s Labor bias. We copped a blast from Judith Sloan for daring to mention the paper.

But it turns out concerns about the quality of Australian management aren’t confined either to an allegedly partisan Treasury or to manufacturing. Campbell Newman, whom the conservative commentariat is cheering on as he cuts a swathe through Queensland’s public services, shares them.

A clutch of commentators and industry players are thus left having to rework their narratives. Clive Palmer, who used to dwell at length on how the federal government’s mining tax was evidence of Labor’s “communism” or “socialism” (he apparently thinks they’re the same), had to resort to blaming Newman’s lack of business experience (along the way claiming that he himself was “the most successful Queenslander in the commercial world that’s ever lived”). And by the way, did you spot Palmer’s unsubtle plug for Lawrence “three-time loser” Springborg in the course of that interview?

The egregious Mitch Hooke, king of the rent-seekers, sounded forth from his Barton Minerals Council redoubt, but seemed unable to comprehend that it was a state conservative government that had lifted royalties and criticised mining management. “Increasing budget deficits, worsening industrial relations, the carbon tax, tax grabs in lieu of tax reform and a focus on redistribution rather than boosting the productive side of the economy is having an adverse material impact on costs, productivity and sovereign risk reputation,” he intoned to the AFR.

Ah, sovereign risk. So when Labor imposes a taxes, including one that Hooke himself helped to water down, it’s “sovereign risk” but not when a conservative government unilaterally lifts royalties.

The AFR today devoted extensive coverage to remarks by Jac Nasser, faithfully noting down seemingly every word that fell from the lips of the BHP chairman at “The Australian Financial Review and Deutsche Bank’s inaugural ‘Conversation Series'”, complete with photo of Nasser and editor Michael Stutchbury listening raptly to James Packer, whose views on how to effectively exploit gambling addicts were, alas, either unsought or unreported.

Nasser is most famous for being sacked from Ford. And as we’ve pointed out too many times to mention, BHP-Billiton track record of wasting money, including most recently with its massive write-down on US shale gas investment, is truly impressive. But he continues to exert a bizarre hold over the local business media, who regard every half-baked prognostication he utters (“it is a cyclical industry in a cyclical global economy”) as the wisdom of Solomon.

No wonder it’s apparently heretical to raise questions about the quality of local management when executives are treated as semi-divine by the local media no matter what their record (a point, incidentally, the excellent Ian Verrender touched on in his final column for Fairfax).

Nasser also repeated his claim that mining companies would go elsewhere unless Australian fell into line with industry demands. It was only in March that Australia was ranked the best destination in the world for mining investment for the third year running by US mining analyst Behre Dolbear. We’ll see how Australia fares in the same survey next year. But the only thing that will have changed in 12 months is a conservative government slapping a royalties increase on coal miners.

Odd how governments, charged with the real-world task of raising revenue and balancing budgets, suddenly take a different perspective on the self-interested claims of industry than they did in opposition, no matter what their political stripe. Unfortunately, it tends to cause severe cognitive dissonance for media cheerleaders used to blaming Labor for everything.

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162 thoughts on “Cognitive dissonance as Newman flails the coal industry

  1. michael r james

    Izatso & Jimmy, please desist. (And what has happened to J? It seems his body has been invaded by the ghost of SB, who has disappeared recently; not complaining unless she has reincarnated posing as someone else…)

    Anyway, below is the link and a small extract from a good article on TPP from Slate back a few months. There are also lots of good comments (check out Chad in particular; no I’m not Chad but am there in another guise!) which is not something we could claim for this thread in Crikey thanks to you two. One of the points of the story is the very inaccessibility of the current status of the TPP agreement.

    The Most Important Trade Agreement That We Know Nothing About
    The Trans-Pacific Partnership could completely change intellectual property law. But the details are being kept secret.
    By David S. Levine | Posted Monday, July 30, 2012
    Imagine being invited to formally offer input on a huge piece of legislation, a proposed international agreement that could cover everything from intellectual property rights on the Internet to access to medicine to investment rights in the agreement’s signatory countries. For 10 minutes, you’d be able to say whatever you’d like about the proposed law—good, bad, or indifferent—to everyone involved in the negotiations. But there’s a caveat: All of your questions, all of your input, on what may be the most controversial part of the package, would have to be based on a version of the proposed international agreement that was 16 months old. And in that 16-month period, there were eight rounds of negotiations that could have changed any and all of the text to which you had access, but no one could tell you if that version was still accurate.
    Would you still take the deal? This is not a hypothetical question; rather, this is the take-it-or-leave-it offer made to the public in May by the United States Trade Representative regarding the intellectual property rights chapter of the massively important but little-known Trans-Pacific Partnership Agreement (TPP). Unfortunately, this modest but sad excuse for public participation was the best offer to ask questions and offer input to TPP negotiators since the public phase of the negotiations began more than two years ago. So civil society groups, academics, experts (“nerds”), and regular Joe concerned citizens said yes.
    The above Kafkaesque scenario reveals a truly odd and disturbing 21st-century situation. Asking informed questions is probably man’s oldest form of letting someone know his views. But in 2012, with all of the technology that allows for unprecedented (if not totally unfettered) flows of information, the vestiges of 20th-century secrecy continue to permeate international lawmaking, as reflected in the negotiations of TPP.]

  2. izatso?

    U.S. negotiators are alone in seeking to expand this extra-judicial enforcement system to also allow the
    use of foreign tribunals to enforce contracts foreign investors may have with a government for
    government procurement or to operate utilities contracts and even for concessions related to natural
    resources on federal lands. (Text that is not yet agreed in the leaked text appears in square brackets and
    Public Citizen has seen a version of the text that lists which countries support various proposals.) While 600 official U.S. corporate advisors have access to TPP texts and have a special role in advising
    U.S. negotiators, for the public, press and policymakers, this leak provides the first access to one of the
    proposed agreement’s most controversial chapters. In May, Sen. Ron Wyden, the Chair of the Senate
    Finance Subcommittee on Trade – the U.S. congressional committee with jurisdiction over TPP –
    submitted legislation requiring that access be provided to members of Congress and their staff after he
    and his staff were denied access to even the U.S. TPP text proposals submitted during negotiations. The TPP may well be the last trade agreement that the U.S. negotiates. This is because the TPP, if
    completed, would have a new feature: it would be open for any other country to later join. TPP offered
    an opportunity to develop a new trade agreement model that could deliver the benefits of expanded
    trade without undermining signatory nations’ domestic public interest policies or establishing special
    privileges for foreign corporations. President Obama campaigned on fixing these investment rules to
    protect the public interest.1 Unfortunately, Public Citizen’s analysis of this text shows that the U.S.
    positions do not reflect the changes that candidate Obama pledged to remedy this regime’s threats.

  3. geomac62

    For what its worth wiki:
    Controversy over Intellectual Property (IP) provisions

    There has been criticism[30][31][32] of some provisions relating to the enforcement of patents and copyrights alleged to be present in leaked copies of the US proposal for the agreement:

    The Office of the United States Trade Representative proposal for the TPP intellectual property chapter would:
    Include a number of features that would lock-in as a global norm many controversial features of U.S. law, such as endless copyright terms.
    Create new global norms that are contrary to U.S. legal traditions, such as those proposed to damages for infringement, the enforcement of patents against surgeons and other medical professional, rules concerning patents on biologic medicines etc.
    Undermine many proposed reforms of the patent and copyright system, such as, for example, proposed legislation to increase access to orphaned copyrighted works by limiting damages for infringement, or statutory exclusions of “non-industrial” patents such as those issued for business methods.
    Eliminate any possibility of parallel trade in copyrighted books, journals, sheet music, sound recordings, computer programs, and audio and visual works.
    Require criminal enforcement for technological measures beyond WIPO Internet Treaties, even when there is not copyright infringement, impose a legal regime of ISP liability beyond the DMCA standards.
    Require legal incentives for service providers to cooperate with copyright owners in deterring the unauthorized storage and transmission of copyrighted materials.
    Require identifying internet users for any ISP, going beyond U.S. case law, includes the text of the controversial US/KOREA side letter on shutting down web sites.
    Require adopting compensation for infringement without actual damages.
    Require criminal punishment of commercial and non-commercial copyright and trademark infringement.

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