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Cognitive dissonance as Newman flails the coal industry

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.

162
  • 1
    Jimmy
    Posted Thursday, 13 September 2012 at 1:12 pm | Permalink

    More evidence Campbell Newman is the best thing to happen to the ALP in years.

  • 2
    Bob the builder
    Posted Thursday, 13 September 2012 at 2:02 pm | Permalink

    If only Labor had Newman’s backbone, they would have vigorously defended their modest mining taxes in the face of outrageous rent-seeking, rather than timorously put their views in a debate framed by the mining companies.

  • 3
    Jimmy
    Posted Thursday, 13 September 2012 at 2:08 pm | Permalink

    Bob - It’s pretty easy to have backbone when you have the media on your side and you know that the miners will get the increased royalties compensated under the MRRT so all he is doing is effectively charging the Fed’s more.

  • 4
    izatso?
    Posted Thursday, 13 September 2012 at 2:11 pm | Permalink

    Odd ….. Cognitive Dissonance/Media Bias/Management Fudgeing/Incompetence/Inaptitude …… Business As Usual, CYA/Best Practice etc, etc, ad inf….. Not So Odd then ……………

  • 5
    MJPC
    Posted Thursday, 13 September 2012 at 2:33 pm | Permalink

    Well said Jimmy;
    ALP had Mark Latham and now the LNP has Campbell Newman (as well as Tony Abbott).

    As for Newman’s backbone…it’s easy to slash and burn when you have no opposition and only one house of parliament which allows you to do as you wish. In another country this would be called a dictatorship.

    Let’s see what happens Queenaland as the mining lobby starts to contract with the mining slowdown and rational voters start to regret what they did to allow a loose canon unfettered power.

  • 6
    Jimmy
    Posted Thursday, 13 September 2012 at 2:37 pm | Permalink

    MJPC - I surprisingly found myself agreeing with Clive Palmer last night, he was actually bagging Newman’s austerity measures as counter productive, slashing jobs will lead to lower payroll tax, lower GST take because of lower spending etc.

  • 7
    geomac62
    Posted Thursday, 13 September 2012 at 2:56 pm | Permalink

    Bob the builder
    I agree with you but not entirely as The Rudd mining tax came out of the blue . I guess you could say the same about QLD but everyone knew their budget would be a shocker , just didn,t realise it would so bad .
    I had never heard any discussion from Rudd or ministers informing the public prior to the announcement of the mining tax . Industry might have been aware but the public had nothing and thats the first thing a government should do , inform the public to get them onside .
    Jimmy
    Trouble with Clive is that he comes across as part parody and part businessman . How many take him seriously or actually separate which hat he is wearing when he speaks is the concern . Imagine QLD slashing health of all things ? One thing Clive did nail was regarding Costello and the vast difference between a large state like QLD and a smaller state like Victoria and the people required to provide public service .

  • 8
    Jimmy
    Posted Thursday, 13 September 2012 at 3:06 pm | Permalink

    Geomac - I didn’t see all the interview, I am one of those who don’t take him seriously so I went to bed, but from what I have seen it wouldn’t be hard to point to errors in Costello’s report, it appears to be a very shoddy piece of work that decided what the answer was then set out to prove it anyway it can.

    All three eastern state conservative govt’s have made some stupid decisions re budget cuts, Newman targeting Health, O’farrell slashing education (despite supporting GOnski) and O’Farrell & Baillieu whacking TAFE when everyone is crying out “skills shortage”. If this is a precursor to Abbott (which it almost certainly is) we should be very worried.

  • 9
    CML
    Posted Thursday, 13 September 2012 at 3:27 pm | Permalink

    @ JIMMY - I also found myself agreeing with Clive Palmer, to my great surprise! He had many interesting things to say, not the least of which is that Newman will be gone before Christmas. Since Clive is supposed to be the biggest bankroller of the LNP in Qld, and that presumably gives him some clout, there could be interesting times ahead to our north?

    Funny that the Crikey editorial today was used to tip a bucket on Kevin Rudd (as usual), when Clive’s interview was much more pertinent to both the national and state scenes. Go figure!

  • 10
    SBH
    Posted Thursday, 13 September 2012 at 3:34 pm | Permalink

    Did I hear someone say ‘Orwell’? No - oh well any way, Bernard Keane seeing as it’s apparently beyond the Ken of a whole raft of people including Alan Kohler and Mitch Hook, Can you please tell us all, wtf ‘sovereign risk’ means or like ‘social capital’ it now just means precisely what I want it to mean (apols Lewis Carroll)

  • 11
    Jimmy
    Posted Thursday, 13 September 2012 at 3:36 pm | Permalink

    CML - The whole Rudd thing is a load of rubbish, he said “under the leadership of the Prime Minister” which Prime Minister did Leigh Sales think he was referring to? Up until Gillard took the job every other PM has alway had the privilege of being referred to as Prime Minister, the fact the media have treated Gillard with less reverence shouldn’t lead Sales to be confused as to which PM Rudd was referring! He should of said her name earlier than he did but I got the impression he thought the question was stupid and therefore was being stubborn.

    On Clive thinking Newman will be gone before Christmas that is also rubbish, I think he has been caught on the wrong side of a power struggle up there and his man Springborg is on the outs so now Clive has gone off the reservation.

  • 12
    Daveo11
    Posted Thursday, 13 September 2012 at 4:09 pm | Permalink

    GEO:
    Sometime before Kevin Rudd announced his version of the Mining Super Profits Tax, the Australian Greens policy was (from memory) for up to 50% tax to be spent mainly on infrastructure, health and education.

  • 13
    David Hand
    Posted Thursday, 13 September 2012 at 4:12 pm | Permalink

    I think it’s a bit over the top for Newman to bag mining companies for bad management. The whole industry has been in such a state of expansion that everyone is working one or two levels above what they would have been exposed to in the recent past.

    So we have inexperienced miners, inexperienced front line supervision inexperienced superintendents and inexperienced mine managers. Because of this, the focus has rightly been in safety and not business performance. The latter has been covered by the high price of coal. As the price has plummeted this year, coal mining companies have suddenly found themselves exposed to a very unwelcome squeeze of high costs and operating losses.

    The fact that your average Bowen Basin bottom level miner can earn north of $140k per year might have contributed to high costs but in an industry that is experiencing sudden unwelcome change, rushing round to gain short term advantage by criticising mine managers is pretty shallow. The other problem with Newman’s announcement is that it’s a royalty on volume, not a tax on profit and will most likely drive a lot more mines into risk of closure than would otherwise have happened.

  • 14
    Hugh (Charlie) McColl
    Posted Thursday, 13 September 2012 at 4:15 pm | Permalink

    Clive Palmer has now pulled out of two election contests before he even entered them. 1. against Wayne Swan in Lilley and 2. against Bob Katter in Kennedy. He also said the other day that he hasn’t spent any money on the LNP this year. So what are we doing crediting him with some electoral credibility? Clive Palmer is entertainment value only.

  • 15
    CML
    Posted Thursday, 13 September 2012 at 4:17 pm | Permalink

    @ JIMMY - While I agree that Clive if frequently “over the top”, there just might be something in his comments that the back bench are restless. No doubt they are getting adverse feedback from their electorates, but I wonder whether there might be dissention between the “former” Nationals and Liberals who make up the LNP? I’m talking about the backbench, not the executive. And remember, all those said backbenchers vote in any leadership spill!! I think it will depend to a large extent on how the voters are disadvantaged by the public service cuts, especially in those “National” electorates outside Brisbane. Time will tell!

  • 16
    Hamis Hill
    Posted Thursday, 13 September 2012 at 4:21 pm | Permalink

    SBH That “social capital” term annoys the hell out of me.
    It seems to go back to Adam Smith’s observation that wealth is the product of Capital and Labour.
    Capital is defined, not as money, but the materials from which “goods” are made by the application of labour.
    Those describing people as social capital, in turn, from Smith’s definitions, seem to be saying that people are materials owned by capitalists, ie slaves, but ironically are too ignorant to understand what they are actually saying.
    But it is oh so sophisticated to loftily refer to “social capital” and totally mislead anyone about the origin of the terminology by overturning its meaning altogether.
    Skilled labour and capital results in the production of increased wealth.
    Social capital and capital together produce what? Drivel.
    All logic and history on the subject is subsumed to the flaunting of mindless jargon from which we are supposed to understand that those using it exist at a higher level of understanding when, in fact, they are pretentious and destructive ignoramuses.
    Perhaps they are “Post-Modern”?
    Whatever the hell, that means.

  • 17
    Harry Rogers
    Posted Thursday, 13 September 2012 at 4:26 pm | Permalink

    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”

    I dont think Newman is far wrong about Australian management when this sort of crap is trumpeted from what was once a solid information newspaper.

    I dont know anybody that listens to Nasser or Packer unless they are sycohantic employees or of course like Richardson on the payroll. Hmmm….30 pieces of silever alive and well.

  • 18
    TheFamousEccles
    Posted Thursday, 13 September 2012 at 5:19 pm | Permalink

    Can someone please explain what “sovereign risk” is, as it pertains to a private sector entity? Seriously, I am at a loss.

  • 19
    CHRISTOPHER DUNNE
    Posted Thursday, 13 September 2012 at 5:57 pm | Permalink

    Another piece of journalism from Team Crikey that puts the remnants of the MSM to shame…if they can ever actually feel any.

  • 20
    David Hand
    Posted Thursday, 13 September 2012 at 8:27 pm | Permalink

    Sovereign risk is a technical term that is about governments defaulting of deciding not to meet their debt obligations.

    It is often misunderstood (and I’ve done this myself) to mean the risk that governments will destroy business confidence by changing the rules at a whim, reducing businesses’ willingness to invest in the future because a country or state has become riskier to invest in.

    Though not technically correct, the meaning of the article is clearly about the risk to future investments in Australia - a factor that the owners of a certain large fishing vessel are reflecting on at the moment.

    The risk of being beaten up by a sovereign Australian State or Federal government seems pretty high at the moment.

  • 21
    izatso?
    Posted Thursday, 13 September 2012 at 8:32 pm | Permalink

    wups, I agree David. Its a meme that gets hijacked by someone who wishes to destabilise his opponents debate.

  • 22
    izatso?
    Posted Thursday, 13 September 2012 at 8:34 pm | Permalink

    See, of course ‘Cognitive Dissonance’

  • 23
    Harris Evan
    Posted Thursday, 13 September 2012 at 8:35 pm | Permalink

    Relax , Hamis Hill. Social capital used to mean all the social goods that sustain our communities and the economy at large, as distinct from money, share scrip and other valued matters deriving from the presence o0f the State. It still means that, I like to think. Today, however, Facebook found a way to value social capital and turn it into a share price. Long may it suffer, and soon may it evaporate.

  • 24
    Harris Evan
    Posted Thursday, 13 September 2012 at 8:37 pm | Permalink

    Can someone explain why people are allowed to dig Australia up and send bits of it overseas?Does it remain Australian territory? I think it should.

  • 25
    Scott
    Posted Thursday, 13 September 2012 at 9:52 pm | Permalink

    Yeah, rather than sovereign risk, which has more to do with treasury debt, they should be referring to political or regulatory risk, a form of event risk that can affect private debt and equity. But sovereign risk sounds better I guess.

  • 26
    gautillard dellron
    Posted Friday, 14 September 2012 at 1:34 am | Permalink

    it’s not socialism when liberal governments do it, remember that.

  • 27
    gautillard dellron
    Posted Friday, 14 September 2012 at 1:36 am | Permalink

    perhaps we’ll get the “it’s not a tax it’s a levy” line?
    that’s always welcome.

  • 28
    Hamis Hill
    Posted Friday, 14 September 2012 at 7:26 am | Permalink

    So Social Capital is an “investment”, something like Adam Smith’s “The Expenses of the Sovereign for the Education of Youth” with the “Risk” that, if the investment is inadequate, better educated foreign investors may buy up the whole nation.
    So do foreigners invest in social capital or does that “equity” risk belong to the sovereign?
    The nation or “locals” build up their social capital and, through mismanagement, risk foreigners, who didn’t pay for it, getting it for nothing.
    Might explain the conservatives’ scorched earth policies on the social capital investment of public services.
    Why risk that sort of investment when fire saleing your national sovereignity for private profit is your bottom line?
    And all that social capital investment just makes the place attractive to boat people.
    Turn the place into a howling wilderness of dusty quarries just like Nauru. and they’ll find some where else to go.
    If, Maggie Thatcher style, there is no society then you don’t have social capital or sovereignity to risk.
    Cracking the privateers’ policy code for fun and profit, everyone for themselves!
    (As the nation sinks).It’s complicated!

  • 29
    Liamj
    Posted Friday, 14 September 2012 at 8:20 am | Permalink

    There will be little cognitive dissonance Bernard, because most media will quickly forget the unscripted info.

    We could test this by counting how many times a Tory-bot says “Gillard govt .. wrecking the mining industry/economy” before next federal election, and how many times Premier Newmans actions are raised in challenge. 100:1, easy. Where would the LNP be without the servility of the commercial media?

  • 30
    SBH
    Posted Friday, 14 September 2012 at 9:12 am | Permalink

    Harris Evans, that’s a very good definition although arguably it doesn’t include the negative effects of ‘bad’ social capital. My point was more, as Hamis Hill elaborated, that it is used so loosely and with such ignorance that it can be used to mean anything. Like ‘quantum leap’. Anyone else catch Gary McDonald in Rake last night? High-larious!

    Journalists have a role to educate their readers especially when dealing with complex detail in an arcane field like finance. It’s a bulwark against people using terms to confound, obfuscate and stultify so they can hide stuff they’d rather you didn’t know about.

    So instead of talking about the real problems faced by governments have raising sufficient revenue to meet convergent voter demands, we have a catch all ‘sovereign risk’. If we talked about the need for and efficiency of centralised taxation and spending systems people like Kohler wouldn’t be able to wail about the ‘tax burden’ and ‘red tape’ and other Edward Lear style government impositions

  • 31
    SBH
    Posted Friday, 14 September 2012 at 9:17 am | Permalink

    - have
    +in

  • 32
    Jimmy
    Posted Friday, 14 September 2012 at 9:17 am | Permalink

    SBH - “Anyone else catch Gary McDonald in Rake last night? High-larious!” Certainly did, he was great, although it was also quite depressing due to it’s accuracy.

  • 33
    Harry Rogers
    Posted Friday, 14 September 2012 at 10:21 am | Permalink

    Rake”

    The show is like a fresh shower and restores your faith in the “silent majority” who write this jewel of snapshot of todays society.

    Long may the writers reign.

  • 34
    fredex
    Posted Friday, 14 September 2012 at 10:31 am | Permalink

    OK.
    Sheridan’s self confessed partisan defence of Abbott alleged violence has been refuted by a colleague, Abbottt has gone quiet after being caught in 3 or so ‘fibs’ [I’m being tactful] in the last week, his poll approval [sic] is abyssal despite a whole crew of mates like Sheridan, the COALition edifice is visibly crumbling with millionaire backers [plural] attacking and being attacked, Hockey and Barnaby have opened their mouths again and spewed typical infantile stuff, there are COALition types who have opened expressed opinions directly confronting the COALition’s line in parliament about the big boat…..

    When is Crikey going to stir the pot about the leadership wrangle that is going on inside the Liberal Party?
    What’s sauce for the goose is sauce for the gander.

  • 35
    izatso?
    Posted Friday, 14 September 2012 at 1:01 pm | Permalink

    Crikey! How does a TPP, a Trans Pacific Partnership secret Bullshit Deal Fly under the freaking radar ? HEY ?!!

  • 36
    izatso?
    Posted Friday, 14 September 2012 at 1:04 pm | Permalink

    wikipedia …. ‘Of the 26 chapters under negotiation, only a few have to do directly with trade. The other chapters enshrine new rights and privileges for major corporations while weakening the power of nation states to oppose them.’

  • 37
    Jimmy
    Posted Friday, 14 September 2012 at 1:09 pm | Permalink

    Izatso? - Wikipedia? Really? Surely you can get a better source than that for such a complex agreement

  • 38
    izatso?
    Posted Friday, 14 September 2012 at 1:29 pm | Permalink

    dont be so smug Jim, tell us some distracting disinformation, huh?

  • 39
    Jimmy
    Posted Friday, 14 September 2012 at 1:35 pm | Permalink

    Nothing to do with smugness Izatso, in fact I have not read much on the agreement at all but Wikipedia is known for not being a reliable source of information and the wording of the couple of sentences you posted indicates the author is not exactly a neutral observer.

    My point is that if you are that concerned with the lack of coverage the topic is getting you need to provide a more detailed analysis than 2 sentences from wikipedia.

  • 40
    Jimmy
    Posted Friday, 14 September 2012 at 1:35 pm | Permalink

    Nothing to do with smugness Izatso, in fact I have not read much on the agreement at all but Wikipedia is known for not being a reliable source of information and the wording of the couple of sentences you posted indicates the author is not exactly a neutral observer.

    My point is that if you are that concerned with the lack of coverage the topic is getting you need to provide a more detailed an a l ysis than 2 sentences from wikipedia.

  • 41
    izatso?
    Posted Friday, 14 September 2012 at 1:39 pm | Permalink

    well get reading then, it is to be signed in 4 days, and I’ve just tripped over the Big Yank Steamroller Operation, FFS

  • 42
    izatso?
    Posted Friday, 14 September 2012 at 1:43 pm | Permalink

    and if you come over all ‘something something relax, it is simply’ blah blah, just remove your blind-siding *ss to the Radio Times, ta ……..

  • 43
    Jimmy
    Posted Friday, 14 September 2012 at 1:45 pm | Permalink

    well get reading then” Frankly I have better things to do with my time. But again if you want people to bel ieve it isn’t a free trade agreement but in fact a right wing conspiracy to have corporations usurp our democratic freedoms you need to post something more than just 2 sentences from wikipedia.

  • 44
    izatso?
    Posted Friday, 14 September 2012 at 1:46 pm | Permalink

    Radio Times for you then ? piss off, ok ?

  • 45
    Jimmy
    Posted Friday, 14 September 2012 at 1:48 pm | Permalink

    and if you come over all ‘something something relax, it is simply’ blah blah, just remove your blind-siding *ss to the Radio Times, ta ……” Did you have a stroke? How is my *ss blind-siding?

    All I ahve done is ask you to back you claims up, 3 posts later and no more information!

  • 46
    Jimmy
    Posted Friday, 14 September 2012 at 1:49 pm | Permalink

    Sorry 4 post later and no more information!

  • 47
    izatso?
    Posted Friday, 14 September 2012 at 2:02 pm | Permalink

    jimmy you are cognitive dissonance personified, rack off

  • 48
    Jimmy
    Posted Friday, 14 September 2012 at 2:14 pm | Permalink

    Izatso - Why is it so hard to back up your statement? Unless they have changed the meaning of cognitive dissonance since last I looked it wasn’t asking for position to be logically argued.

    To me you sound like you are a second year university student, you just know the evil corporations are corrupting the world and this FTA is just a rouse to allow them to gain more power and weaken our democracy (it probably has some evil clause relating to the persecution of Assange as well) but because you only hang out with like minded people a few well worn phrases and cliches is enough to impress the ladies with your moral righteousness and the few times anyone has bothered to challenge your prententious posturing you simply denounce the as right wing stooges or simply unable to comprehend your supposed highly intellectual musings.

    However in the real world if you make statements you need to support them if you wish to convince anyone, right now I have no strongly held opinions regarding this FTA, why don’t you try to convince me of your case?

  • 49
    izatso?
    Posted Friday, 14 September 2012 at 2:32 pm | Permalink

    this ole Steamroller is being fast-tracked ahead of the US election and you are real casual about that little fact. You would have a (….. I will fill this in later Jim ! …..)before you would defend Australias interest. That is My Statement, so, come on, give up your strongly held opinions for posterity …….

  • 50
    Jimmy
    Posted Friday, 14 September 2012 at 2:43 pm | Permalink

    Izatso - “this ole Steamroller is being fast-tracked ahead of the US election and you are real casual about that little fact.” What are you alleging here - that the US corporations want to get this deal through while there is still a democratic president to push their agenda?

    You would have a (….. I will fill this in later Jim ! …..)before you would defend Australias interest.” And you make this statement based on what? I in fact think Australia’s interests should always be of paramount importance when making these deals, things like the PBS should be sacrosanct, but that doesn’t mean Australia doesn’t have to give up something to get something after all greater access to foreign markets is definitely in the interest of a small country with a large amount of natural resources, agriculture & education to export and a weakening manufacturing sector.

    And I am not usre you know what a well argued position is, simply making (or reiterating) wild statements with out any evidence to support them is the exact opposite of what I am asking you to do.

    If that is you best effort in convincing me you failed badly, maybe you are only a first year Uni student.

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