Breaking into the property market has become more difficult for first home buyers in Australia as of late mostly because of reasons I’ve explained in detail on this blog before. It’s not an easy problem to solve as many of the options championed by self proclaimed experts are politically charged and increasing the housing supply isn’t as simple as many people think it to be. Thus many of the measures that the incumbent government suggests are often things that don’t address any of the underlying issues directly and instead look to put more money in the hands of potential first home buyers. Joe Hockey’s recent brainwave to address this problem, by allowing first home buyers to dip into their super for a deposit, is a classic example of this and it will neither help first home buyers nor address the underlying issues that they face.
Whilst it’s not a formal policy they’re looking to submit yet (hence the lack of detail around how the actual scheme would work) Hockey says that he’s been approached by lots of young people looking to tap into their superannuation in order to fund their first home purchase. On the surface it sounds good, younger Australians get to put a roof over their heads and get their foot into the property market, something which should hopefully sustain them for the future. The main problems I see with this are two fold; firstly most people won’t have enough super to make a difference and, secondly, it will likely set most people back meaning their retirement will likely not be fully funded by super.
On average your typical superannuation balance at 25 is on the order of $10,000, not a whole lot in the grand scheme of things. Even the most generous loans that let you get away with a 5% deposit would only see you able to get a loan for $200,000 with that amount of cash, not exactly the amount that many now first time home buyers are looking to finance. That figure doubles by the time they reach their 30s but that’s still not enough to finance the home on its own. Indeed first home buyers are likely to need double or triple that in order to buy their first homes which means that they’ll need to have at least $20,000 in savings for those meager amounts of super to help push them over the line. If they’re able to save that you’d then think that bridging the gap wouldn’t be outside of their reach, at least within a reasonable timeframe.
This then leads onto the conclusion that the opposite situation, one where someone couldn’t save that much and required their superannuation to bridge the gap, is the least preferable scenario for a first home buyer. You see a savings track record proves that someone will be able to cope with the repayments that a mortgage requires whilst at the same time still being able to afford everything else they need to live. If you don’t have this and are looking to get into property diving into your super isn’t going to help you, instead it’s going to put you in the unenviable position of having even less money available to you, eradicating any chance you had at getting ahead. You’d hope that the last batch of lending reforms would prevent most people like this from getting a loan in the first place but I think we’ve all seen people get themselves into this situation before.
On top of this using most or all of your super would essentially put you back 5 or 10 years in planning for your retirement. That might not sound like much when most people will have 50+ years of working life but a lot of the power of super comes from compound interest. When you take an axe to your initial savings it resets the clock, pushing back the compounding rate significantly. That means you hit the high growth part of your super much later in life, leaving a lot less than you’d expect for retirement. This would mean more people getting onto the aged pension sooner, something which the whole superannuation system was designed to avoid.
I’ll hold off on any other criticisms until I see an actual policy on this but suffice to say the idea is rife with issues and I think the only reason that they’re entertaining it is to win back some favour with the youth vote. If they do put a policy before parliament though it’ll be interesting to see how they address criticisms like this as I know I’m not the only one to find fault with this policy. Heck I’d love to see more people getting into property since it’d bolster my investments but honestly I’d rather see the underlying issues, like lack of supply and the owner-occupier CGT exemptions, tackled first before they start looking towards trashing people’s futures for short term gains.
Why the Abbott government hasn’t abandoned their incredibly unpopular metadata policy yet is beyond me. Nearly all other developed nations that have pursued such a policy have abandoned it, mostly because attempting to pass something like this is akin to committing political suicide. Worse still in their attempts to defend the policy from its critics the Abbott government has resorted to tactics and sensationalist rhetoric, none of which has any bearing on the underlying issues that this policy faces. Top this off with a cost estimation that seems to be based on back of the napkin math and you’ve got a recipe for bad legislation that will likely be implemented poorly and at a great cost to all Australian citizens.
Conceptually the idea is simple: the government wants to mandate that all ISPs and communications providers keep all metadata they generate for a period of 2 years. Initially this was sold as not being an increase in the power that authorities had however that idea is incredibly misleading as it greatly increases their ability to exercise that power. Worse still obtaining access to metadata doesn’t require a warrant and isn’t just the realm of law enforcement or intelligence agencies as people on local councils can obtain this data. Suffice to say that the gathering and retention of this data is a massive invasion of the privacy that the general public expects to have from its government and that is exactly why nearly all developed nations have dropped such policies before they’ve been implemented.
As expected the usual tropes for these kinds of policies have been trotted out, initially under the guise of a requirement for national security. I’d concede that point if it wasn’t for the fact that mass surveillance has not proved to be effective in combating terrorism, something which the critics of the policy were quick to point out. The rhetoric has then shifted away from national security to local security with Abbott saying that the metadata will help them track down peadophiles and child traffickers. Suffice to say if surveillance of this nature doesn’t help at a national level then I highly doubt its effectiveness at the lower levels and “think of the children” arguments like this are nothing more than an appeal to emotion.
Yesterday Abbott was pressed to give some hard figures on just how much this scheme would end up costing and he retorted with the rather ineloquent quip that it would be an “explosion in an unsolved crime“. When pressed the figure he gave was $300 million, estimated to be less than 1% of the total $40 billion that the entire telecommunications sector is estimated to be worth. That figure has apparently been sourced from PricewaterhouseCoopers (PwC) however the details of that figure have not been made public. In all honesty I cannot see how that figure can be accurate given the amount of data we’re talking about and the retention times required.
To put it in perspective Australians consumed something on the order of 1 Exabyte in 6 months up to June last year which is a 50% increase on the year previous. The amount of metadata on that data would be a fraction of that and, taking the same 1% liberty that Abbott seems intent on using, you get something like 50 Petabytes worth of storage required. Couple that with the fact that it won’t be stored in one place (negating economies of scale), the infrastructure requirements to provide access to it and the personnel required to fullfil requests and that $300 million figure starts to look quite shakey. Indeed the Communications Alliance in Australia has estimated it to be between $500 million and $700 million which casts doubt over how accurate Abbott’s lowball figure is.
Honestly this legislation stinks no matter which way you cut it and the rhetoric that the incumbent government has been using to defend it speaks directly to that. These policies are just simply not effective in what they set out to achieve and the only tangible result we’ll ever see from them will be an increased cost to accessing the Internet and a reduction in the expectation of privacy. I do hope Abbott keeps harping on about it though as the more he talks the more it seems likely that we’ll be able to cement the One Term Tony phrase in the history books.
There seems to be this small section of my brain that’s completely disconnected from reality. At every turn with the Liberal’s and the NBN it’s been the part of my head that’s said “Don’t worry, I’m sure Turnbull and co will be honest this time around” and every single time it has turned out to be wrong. At every turn these “independent” reports have been stacked with personnel that all have vested interests in seeing Turnbull’s views come to light no matter how hard they have to bend the facts in order to do so. Thus all the reports that have come out slamming Labor’s solution are not to be trusted and the latest report, the vaulted cost benefit analysis that the Liberals have always harped on about, is a another drop on the gigantic turd pile that is the Liberal’s NBN.
The problems with this cost-benefit analysis started long before the actual report was released. Late last year Turnbull appointed Henry Ergas as the head of the panel of experts that would be doing the cost-benefit analysis. The problem with this appointment is that he’d already published many pieces on the NBN before which where not only critical of the NBN but were also riddled with factual inaccuracies. So his opinion of the NBN was already well known prior to starting this engagement and thus he was not capable of providing a truly independent analysis, regardless of how he might want to present it. However in the interests of fairness (even though Turnbull won’t be doing so) let’s judge the report on it’s merits so we can see just how big this pile of horseshit is.
The report hinges primarily on a metric called “Willingness to Pay (WTP)” which is what Australians would be willing to pay for higher broadband speeds. The metric is primarily based around data gathered by the Institute for Choice which surveyed around 3,000 Australians about their current broadband usage and then showed them some alternative plans that would be available under the NBN. Problem is the way these were presented were not representative of all the plans available nor did they factor in things like the speed not being guaranteed on FTTN vs guaranteed speed on FTTP. So essentially all this was judging was people’s willingness to change to another kind of plan and honestly was not reflective of whether or not they’d want to pay more for higher broadband speeds.
Indeed this is even further reflected in the blended rate of probabilities used to determine the estimation of benefits with a 50% weighting applied to the Institute for Choice data and a 25% modifier to the other data (take-up demand and technical bandwidth demand) which, funnily enough, find in favour of the FTTP NBN solution. Indeed Table I makes it pretty clear that whenever there was multiple points of data the panel of experts decided to swing the percentages in ways that were favourable to them rather than providing an honest view of the data that they had. If the appointment of a long anti-NBN campaigner wasn’t enough to convince you this report was a total farce then this should do the trick.
However what really got me about this report was summed up perfectly in this quote:
The panel would not disclose the costs of upgrading [to] FTTP compared with other options, which were redacted from the report, citing “commercial confidentiality associated with NBN Co’s proprietary data”.
What the actual fuck.
So a completely government owned company is citing commercial in confidence for not disclosing data in a report that was commissioned by the government? Seriously, what the fuck are you guys playing at here? It’s obvious that if you included the cost of upgrading a FTTN network to FTTP, which has been estimated to cost at least $21 billion extra, then the cost-benefit would swing wildly in the direction of FTTP. Honestly I shouldn’t be surprised at this point as the report has already taken every step possible to avoid admitting that a FTTP solution is the better option. Hiding the upgrade cost, which by other reports commissioned by the Liberals is to be required in less than 5 years after completion of their FTTN NBN, is just another fact they want they want to keep buried.
Seriously, fuck everything about Turnbull and his bullshit. They’ve commissioned report after report, done by people who have vested interests or are in Turnbull’s favour, that have done nothing to reflect the reality of what the NBN was and what it should be. This is just the latest heaping on the pile, showcasing that the Liberals have no intention of being honest nor implementing a solution that’s to the benefit of all Australians. Instead they’re still focused on winning last year’s election and we’re all going to suffer because of it.
Copyright law in Australia isn’t as cut and dry as many believe it to be. Whilst some of our laws are in line with what the general public thinks they are (I.E. United States based) there’s a lot of things that are more draconian, like the lack of safe harbor provisions, and others that are a lot more lax like the lack of any formal infringement notification systems. This has often been cited as one of the main reasons why piracy is so rampant in Australia although that’s really only a minor part of the equation. Still this hasn’t stopped rights holders from lobbying members of our parliament into getting the laws changed and a recently leaked discussion paper, from the offices of Senator Brandis and Minister Turnbull, showcases a rather disturbing future for Australian copyright.
The discussion paper reads as a wish list of measures that rights holders would like to see implemented that would be used to curb copyright infringement behaviour within Australia, taking inspiration from similar schemes overseas. The proposed measures will be familiar to anyone who’s been involved in the copyright debate ranging from requiring ISPs to take “reasonable action” against infringing users (something our High Court has ruled against in the past), blocking websites that facilitate infringement and the measures required to support those processes. There are some potential positive questions for discussion in there, like the expansion of safe harbor provisions, but the rest of them will only cause more headaches than they will solve.
The first discussion point around ISP’s taking “reasonable steps” towards discouraging users from engaging in copyright infringement is a blatant attempt to skirt around the high court’s previous ruling that there are no such steps that an ISP can take. Essentially it comes down to a question of liability as increasing the exposure that the ISPs have make them a better target for litigation than the thousands of individuals beneath them do. The worst thing about this is that it will most certainly lead to increased costs for consumers with no benefits for anyone but the rights holders themselves. Honestly this smacks of the “mandatory voluntary” system that Conroy proposed, and then swiftly abandoned, all those years ago. If it didn’t work then I fail to see how it could work now.
The second point revolves around blocking some sites outright which they’re proposing to do at the ISP level. Now the paper doesn’t go into details about how the site would be blocked, just that injunctions could be granted, however we know that whatever method they use will end up being ineffectual. DNS blacklisting, IP blocks and all other methods that other countries have used in the past simply do not work in an environment with users with a modicum of technical experience. Heck there are dozens of browser extensions which help with this and there’s already a healthy number of Australians completely circumventing any ISP level blocking through the use of VPNs. So realistically the discussion point about what matters should be considered in granting an injunction are moot as it won’t stop the site from being available.
The last 3 points dig into what the impacts will be (both in terms of reducing infringement and the cost to business) as well as asking if there are any alternative measures that can be taken. Honestly I feel these are the points that should be front and center rather than the previous two I mentioned as this is the real crux of the copyright issue in Australia. In terms of the discussion paper though they feel like afterthoughts, each given a brief paragraph with a one liner question following them. It really looks like the other points are, essentially, already agreed to and these are just there to placate those who feel that they need to have their voice heard.
What this discussion paper completely misses is the real issue here: the lack of content systems that are on the same level available overseas. The Australian tax is no longer just catch cry, it’s a fact, and the residents of this country have voted with their wallets. Indeed the high use of Netflix within Australia shows that we’re ready, willing and able to pay for the services should rights holders be willing to provide them but instead this paper wants to focus on the stick rather than the carrot.
If Brandis and Turnbull are serious about copyright reform in Australia they should be looking into what they can do to encourage those services to come Australia rather than attempt to dissuade people from pirating their content. History has shown that the latter can never be prevented, no matter what legislation you put in or DRM you attempt to ram down the customer’s throats. The latter has a tried and true history of being successful and I have no doubts that rights holders would see similar success in Australia should they choose to bring their services here. For now though it seems like they’re still stuck in the past, trying to protect business models that are failing in the new Internet powered economy. They’ll have to come around eventually, it’s just a question of whether they do it before someone else does.
Oh wait they already are. Time to wake the fuck up.
There’s 2 main reasons why I’ve avoided writing about the NBN for the last couple months. For the most part it’s been because there’s really been nothing of note to report and sifting through hours of senate talks to find a nugget of new information to write about isn’t really something I’m particularly enthused about doing. Secondly as someone who’s deeply interested in technology (and makes his living out of services that could make heavy use of the NBN) the current state of the project is, frankly, infuriating and I don’t think people enjoy reading about how angry I am. Still it seems that the Liberal’s MTM NBN plan has turned from a hypothetical farce into a factual one and I’m not one to pass up an opportunity to lay down criticism where criticism is due.
The slogan the Liberal’s ran with during their election campaign was “Fast. Affordable, Sooner.” promising that they’d be able to deliver at least 25Mbps to every Australian by the end of 2016 with that ramping up to 50Mbps by the end of 2019. This ended up being called the Multi-Technology Mix (MTM) NBN which would now include the HFC rather than overbuilding them and would switch to FTTN technology rather than FTTP. The issues with this plan were vast and numerous (ones I’ve covered in great detail in the past) and suffice to say the technology community in Australia didn’t buy into the ideas one bit. Indeed as time as progressed the core promises of the plan have dropped off one by one with NBNCo now proceeding with the MTM solution despite a cost-benefit analysis not being completed and the speed guarantee is now gone completely. If that wasn’t enough it’s come to my attention that even though they’ve gone ahead with the solution NBNCo hasn’t been able to connect a single customer to the FTTN solution.
It seems the Liberal’s promises simply don’t stand up to reality, fancy that.
The issues they seem to be encountering with deploying their FTTN trial are what many of the more vocal critics had been harping on for a long time, primarily the power and maintenance requirements that FTTN cabinets would require. Their Epping trial has faced several months of delays because they weren’t able to source adequate power, a problem which currently doesn’t have a timeline for a solution yet. The FTTP NBN which was using Gigabit Passive Optical Network (GPON) technology does not suffer from this kind of issue at all and this was showing in the ramp up in deployment numbers that NBNCo was seeing before it stopped its FTTP rollouts. If just the trial of the MTM solution is having this many issues then it follows that the full rollout will fare no better and that puts an axe to the Liberal’s election promises.
We’re rapidly approaching the end of this year which means that the timeline the Liberals laid out is starting to look less and less feasible. Even if the trial site gets everyone on board before the end of this year that still gives only 2 years for the rest of the infrastructure to be rolled out. The FTTP NBN wasn’t even approaching those numbers so there’s no way in hell that the MTM solution would be able to accomplish that, even with their little cheat of using the HFC networks.
So there goes the idea of us getting the NBN sooner but do any of their other promises hold true?
Well the speed guarantee went away some time ago so even the Liberals admit that their solution won’t be fast so the only thing they might be able to argue is that they can do it cheaper. Unfortunately for Turnbull his assumption that Telstra would just hand over the copper free of charge something which Telstra had no interest in doing. Indeed as part of the renegotiation of the contract with Telstra NBNCo will be paying some $150 million for access to 200,000 premises worth of copper which, if extrapolated to all of Australia, would be around $5.8 billion. This does not include the cabinets or remediating any copper that can’t handle FTTN speeds which will quickly eat into any savings on the deal. That’s not going into the ongoing costs these cabinets will incur during their lifetimes which is an order of magnitude more than what a GPON network would.
I know I’m not really treading any new ground by writing all this but the MTM NBN is beyond a joke now; a failed election promise that’s done nothing to help the Liberal’s waning credibility and will only do damage to Australia’s technology sector. Even if they do get voted out come next election it’ll be years before the damage can be undone which is a royal shame as the NBN was one of the best bits of policy to come out of the tumultuous time that was Labor’s last 2 terms in office. Maybe one day I’ll be able to look back on all my rants on this topic and laugh about it but until that day comes I’ll just be yet another angry IT sector worker, forever cursing the government that took away my fibre filled dream.
If you’re of voting age then you’re likely aware of the rhetoric that surrounds our two major political parties. Typically Labor is cast as a party that favours spending with the Liberals being more conservative (and usually “more responsible”). These stereotypes aren’t without merit however as the previous incarnations of both governments ran very close to those lines although the global circumstances in which both of them existed were radically different. Indeed the reason why Australia was one of the few developed countries to avoid a recession during the Global Financial Crisis and the follow Eurozone Crisis was due to the stimulus programs they engaged. However Australians, for one reason or another, seem to prefer our government run a surplus whenever possible and last night’s budget is setting them up for just that.
Hockey and Abbott had been priming us for bad news since talk of the budget first started circulating, noting that we’d all have to pay our fair share in order to correct the “budget emergency”. The line items in the budget show pretty much everyone losing out (with a few notable exceptions including high income earners, private sector business and mining) so the rumors were well founded. You’d be hard pressed to find any regular Australian that was happy with the budget but the consensus from the wider press seems to be that it’s economically sound and will eventually lead us to surplus. As you can probably guess I’m not a fan of it myself as it feels like getting to a surplus, mostly through cutting expenditure, is only being done for the sake of having a surplus.
Australia’s budget isn’t like your home budget where running a deficit for a couple years would likely see you sink into financial ruin. As long as a government is able to make repayments on its debt and is sensible about deficit spending it’s typically not an issue. Indeed when compared to the rest of the world Australia’s debt to GDP ratio is extremely low, well below that of many other countries (including Germany) that are considered fiscally responsible. Thus the talk of a “budget emergency” is built upon a base of incorrect assumptions, ones which have resulted in a budget that hits everyone and hits those hardest who are least able to afford it.
In all honesty it seems like a long term play, one that the current government can take some political pain on now so that when the next election rolls around they can point to the budget and say “Look at this magnificent surplus”. Sure the current projections don’t have that happening for 4 years but this is the first budget of 3 and there’s the real possibility that the next budget will be in the same vein. That is what worries me as whilst running a surplus sounds good the cuts made to get to it are likely to be far more destructive than the small amount of debt required to maintain them.
It will be interesting to see how this plays out with the wider public as this was what the majority of Australians wanted but I’m sure many of them did not expect it to come and slap them in the face like this. The true test will be to see if the political pain is only short term as I believe that’s what the Liberal’s current strategy is betting upon. Abbott is already having a tough enough time as it is with people quickly realising he’s great in opposition but not so in power. Still the Australian public seems to have a short memory and a shiny surplus in 3 years might be enough to convince everyone of the Liberal’s economic credentials (and not the lack thereof).
It seems you can’t go a week without reading at least one article about how us Australians are filthy pirates, depriving the poor rights holders of their hard earned dollars. Whilst the coverage has become a lot more balanced in recent times, mostly thanks to the support of some of the higher up execs in places like HBO, it still seems that Australia’s political landscape is tilted in the wrong direction. For the most part it’s all been postering and bluster but recent statements from our new attorney-general have brought the possibility of draconian and ineffectual piracy control schemes closer to reality. Indeed it seems that rather than tackle the root cause of the issue, I.E. providing a service that’s competitive with what the pirates provide, rights holders are still only interested in protecting their out-dated business models.
George Brandis recently announced that the government would be looking to bring in anti-piracy policies as early as this week which, predictably, sparked outrage among the wider Internet community. The potential policies are the usual suspects we’ve seen bandied about in other countries, things like three strikes laws, taking down sites linking to infringing material and outright blocking larger “infringement enabling” websites. The issues with all these systems are well known and all of them have proved to be vastly ineffective in curbing the amount of piracy that occurs. Worst still Brandis’ rhetoric on the matter shows a complete lack of understanding of the issue at hand: Australian’s don’t have access to a viable alternative. Whilst I’m sure none of his policies will make it through the senate I do worry about people in his position of power making decisions without considering both sides of the piracy equation.
It’s been shown that some of the worst pirates are also the ones spending the most money on content showing that it’s not an issue with wanting something for free. The primary motivator for many pirates is convenience and in this case the legitimate alternative falls far short of what the alternatives provide. You don’t have to look far for evidence of this, just take Steam which has converted many a pirate into paying customers in regions that were once considered impossible to turn a profit in. Piracy rates in Australia will remain high until a solid competitor appears in this space as every entry thus far has proved to be much less than ideal. It’s not like there’s a technical limitation preventing this either, you can use a DNS service to get around the blocking many of the services use, it all comes down to the rights holder’s desire to not change their business model for the digital age.
Indeed the measures proposed are reflective of that stance as whilst they might have worked in the past (shutting down a bootleg CD seller pretty much guarantees that source is gone) they simply don’t function in the Internet age. Blocking websites, no matter what level you do it at, is an incredibly easy thing to work around, so much so that there’s browser extensions to do it for you. With most of those sites not being hosted in Australia the power for Australian ISPs to do anything about them is limited and even then most of them are seconds away from being replicated somewhere else. The Three Strikes style laws are by far the worst as they’re open to wide abuse, usually without little recourse. Whilst this does open up the opportunity for some fun shenanigans (it wouldn’t take much to get every politicians Internet taken down) it’s far better for them to not exist in the first place.
Undoubtedly this situation has arisen due to Australia’s odd place in the world. We’re a remote, affluent country that has a hunger for everything our other western counterparts do. However that remoteness means that companies are, for one reason or another, not interested in bringing their business here or, if they do, it is done at an exorbitant premium. Once rights holders realise that we’ll switch to their services in a heartbeat if they’re reasonably priced and widely available you’ll see the piracy rates of Australia plummet. Until then though all this political posturing will do no one any good and Australia will remain the nation of pirates.
Back in 1996 one of the incoming Howard government’s core promises was to reduce their expenditure dramatically, specifically with regards to their IT. The resulting policy was dubbed the IT Initiative and promised to find some $1 billion dollars in savings in the following years primarily through outsourcing many functions to the private sector. It was thought that the private sector, which was well versed in projects of the government’s scale and beyond, would be able to perform the same function at a far reduced cost to that of permanent public servants. The next decade saw many companies rush in to acquire these lucrative IT outsourcing arrangements but the results, both in terms of services delivered and apparent savings, never matched that which was promised.
For many the reasons behind the apparent failure were a mystery. Many of the organisations involved in providing IT services to the government weren’t fly by night operations, indeed many of them were large multi-national companies with proven track records, but they just didn’t achieve the same outcomes when it came to the government contracts. After nearly a decade of attempting to make outsourcing work many departments began insourcing their IT departments again and relied on a large contractor workforce to bring in the skills required to keep their projects functioning. Of course costs were still above what many had expected them to be, result in the Gershon Report that recommended heavy cuts to said contractor workforce.
This all stems from the one glaring failure that the government has still yet to realise: it can’t negotiate contracts.
I used to work for a large outsourcer in the Canberra region, swept up while I was still fresh out of university into a job that paid me a salary many took years to attain. The outsourcer had won this contract away from the incumbent to provide desktop and infrastructure services whilst the numerous other outsourcers involved in the contract retained ownership of their respective systems. After spending about 6 months as a system admin my boss approached me about moving into the project management space, something I had mentioned that I was keen on pursuing. It was in this position that I found out just how horrible the Australian government was at contract negotiation and how these service providers were the only winners in their arrangements.
My section was dedicated to “new business”, essentially work that we’d be responsible for implementing that wasn’t in scope as part of the broader outsourcing contract. Typically these would be small engagements, most not requiring tender level documentation, and in all honesty would have been considered by any reasonable individual to fall under the original contract. Of course many of the users who I came back to with a bill detailing how much it would cost to do the work they needed often responded with much surprise and often would simply drop the request than try to seek approval for the cost.
The issue still exists today primarily because many of the positions that handle contract negotiations don’t require specific skills or training. This means whilst the regulations in place stop most government agencies from entering into catastrophically bad arrangements the more subtle ones often slip through the cracks and it’s only after everything is said and done that oversights are found. All of the large outsourcers in Canberra know this and it’s why there’s been no force working to correct the problem for the better part of 2 decades. It’s why Canberra exists as a strange microcosm of IT expertise, with salaries that you won’t see anywhere else in Australia.
The solution is to simply start hiring contract negotiators away from the private sector and get them working for the Australian government. Get contract law experts to review large IT outsourcing arrangements and start putting the screws to those outsourcers to deliver more for the same amount of money. It’s not an easy road to tread and it won’t likely win the government any friends but unless they start doing something outsourcing is always going to be seen as a boondoggle, only for those with too much cash and not enough sense.
We’re a country of polluters, there’s no question about that. In terms of world ranking we seem to hover around 11th in per capita pollution, beating other big polluters like China, India and even the United States. Whilst we can lay the blame for a good chunk of that on our resources sector it doesn’t mean that we, as a country, aren’t responsible for it and are obligated to do as much as we can to reduce the amount of carbon and other pollutants that enter our atmosphere. The previous government made some headways into this however our current representatives seem intent on undoing the small amount of good they managed to get through, even if it makes absolutely no sense to do so.
Yesterday it was announced that the Renewable Energy Target (RET), which was revised under the previous government to a larger figure, was going to be reviewed. Now typically this wouldn’t be something to fret about, especially considering that reviews like this are supposed to be carried out by the Climate Change Commission, but since Abbott disbanded them it’s now being led by Dick Warburton a confessed anthropogenic climate change denier. To make matters worse it’s also going to be done in the context of an apparent oversupply of electricity in Australia, something which the current rhetoric from the Abbott government seems to pin wholly on the rapid uptake in renewables.
Are you fucking kidding me.
The Small Scale Renewable Energy Scheme (SRES) and the Large Scale Renewable Target (LRET) schemes have been responsible for a massive increase in the amount of grid connected renewable energy in Australia. Indeed it’s been so successful that we’ve even had some regions revise their own targets above what they initially planned, meaning a very healthy percentage of Australia’s energy now comes from renewable resources. The argument being made now is that the incentives provided to those renewables is costing Australia too much and is leading to a glut of energy production, driving prices lower. Whilst I’d argue that the cost of the program (~$1.6 billion according to Warburton) is worth it I can’t understand the thought process behind people complaining about lower electricity costs.
The source of this rhetoric is somewhat understandable; it’s because Warburton doesn’t believe that we’re responsible for the climate change. Thus, when you take that view, renewables get an unfair amount of treatment with their subsidies and feed in tariffs. However if you take the rational scientific view where we are responsible then the picture becomes far more clear and the paltry price we pay to have such a large percentage of renewable energy is a sound investment. Indeed should we lose both the carbon tax and the RET there’s no telling how much further up the global polluter ranks we’ll climb and I don’t think any rational Australian wants that.
We’re seeing the results of electing a government that is packed with representatives who are running with an agenda that clearly runs opposite to the facts. Whilst I’d love to believe that a review of the RET would show that everything should continue as planned I’m afraid I lost all trust in reviews commissioned in this manner after the total farce that was the NBN strategic review. With Warburton at the helm it’s guaranteed that we’ll see cuts to the RET which will have a strong, negative impact on the state of renewable energy in Australia. Unfortunately that will just be the first hit to soften us up before the real hit comes: the abolishment of the carbon price.
If it wasn’t for the HECS/HELP system I definitely wouldn’t be in the position that I am today. Whilst I didn’t come from an exactly poor family we were definitely on the lower end of the middle class and the prospect of going to uni meant that I’d have to start paying my way. Thankfully I was able to defer my HECS debt until I was able to pay it back through tax allowing me to attend university without having to fork out the $25,000 or so which I simply did not have. After 4 years of an accelerated career that was directly attributable to my university experience the debt was fully repaid back to the Australian government with a little bit of inflation added on top for good measure.
In other countries this same situation probably wouldn’t have been possible. In the USA for instance I would have had to secure a student loan with a bank, something that probably would have seen me paying exorbitant interest rates on top the much higher cost of education. Even if the loan amount remained the same I would’ve been repaying the debt for at least another year just because of interest and I would have been much less inclined to take the risks that I did knowing that I’d have to make those monthly repayments regardless of my current employment situation. The couple percent interest I paid on my HELP debt to curb the deflation on the debt seems like nothing in comparison to that.
The difference between the two systems is the motive behind the loans. HECS/HELP is made by the government to encourage people to go into higher education in the hopes that, because of said education, they will get higher paying jobs and will then be able to contribute more to the economy as well as repaying their debt. Loans made by banks on the other hand, regardless of their intended purpose, are done purely for the motive of generating a profit and they will do anything to maximise the return on them as such. This is why the Liberal’s proposal to securitise (read: sell off) student debt is an inherently bad move.
Should such a deal go down the government would likely have to sell the debt for a fraction of its current value, usually on the order of 40%~60%. This would mean an instant cash windfall of approximately $11 billion or so with the annuity streams being collected by the new owners of the debt. If your government is strapped for cash (which we really aren’t at the moment) then this would seem like a good move however it would only account for 3% of our total budget and only for the year in which it happened. For comparison HECS/HELP revenue was around $1.4 billion back in 2009/2010 financial year meaning that the $11 billion windfall would become a shortfall in 8 years (probably less considering that repayment rates would have likely increased in the interim). It’s a short term cash grab that will make the budget its in look a lot better but at the cost of making every budget that follows it look a lot worse.
The real problem though is the transfer of government owned debt to a private company, one that will inevitably look to make the most out of their investment. Whilst HECS/HELP is one of the few things you can’t discharge through bankruptcy you’re under no obligation to repay it should you not have the means to, a key to encouraging people to at least attempt higher education to further their careers. Should the debt be owned by a bank however there’s no guarantees that the same structures will hold and it’s almost inevitable that the banks would look to squeeze delinquent loans for all they’re worth. Don’t believe me? Just look at the student loan situation in the USA.
Whilst the Liberals may have said that such a plan is not current policy the fact that it’s under consideration should ring alarm bells. It’s an incredibly short sighted move, one that favours short term gains over long term losses which is something that a “fiscally responsible” government should be doing everything to avoid. Selling off national assets, especially one that provides as much value as HECS/HELP does, will only hurt us in the long term no matter how warm and fuzzy running a surplus makes you feel now.