Consolidate or disintegrate

It won't be easy
You'll think it strange
When I try to explain how I feel
That I still need your love
After all that I've done
You won't believe me
All you will see
Is a girl you once knew
Although she's dressed up to the nines
At sixes and sevens with you

I had to let it happen
I had to change
Couldn't stay all my life down at heel
Looking out of the window
Staying out of the sun
So I chose freedom
Running around trying everything new
But nothing impressed me at all
I never expected it to

Don't cry for me Argentina
The truth is I never left you
All through my wild days
My mad existence
I kept my promise
Don't keep your distance

And as for fortune and as for fame
I never invited them in
Though it seemed to the world
They were all I desired
They are illusions
They're not the solutions
They promise to be
The answer was here all the time
I love you and hope you love me ...

- Andrew Lloyd Webber Don't Cry For Me Argentina

The only word in those lyrics that doesn't apply to Julia Gillard is the foreign country. In this and that we see the Prime Minister has realised what all successful politicians come to realise: they get to a point where their base isn't coming with them, so they have to rally the base and only then can they truly move forward.

The last Labor government combined programs that helped working people (e.g. Medicare, superannuation) with those that didn't (e.g. euthanasing inefficient, labour-intensive industries), such that Labor people at least gave it the benefit of the doubt. Rudd and Gillard have done plenty that gets the rank-n-file going (e.g. apologising to Stolen Generation Aborigines, increasing the role of unions under FairWork as a make-work scheme for union staffers) and those that get them upset (e.g. perpetuating the Northern Territory Intervention, maintaining the ABCC), so that it's as irrelevant to them as it is to the non-committed whether or not this government survives.

Gillard has gotten too far out in front of her supporters. Labor people who complain about factional goings-on at the branch or conference level aren't impressed by someone who got where she is by a factional fix. People who volunteer their time and effort aren't impressed by someone who gets up early and drones on and on, full of ... jargon. Factional hacks that are imposed on Labor people do that sort of thing: why should the Prime Minister of Australia carry on like an indifferent union undersecretary or a forgettable candidate for state parliament? Gillard needed a change, and to her credit she is starting to make that change.

This speech is the start of Labor's consolidation, where Gillard rallies the disaffected in her own party. As I've said, the legislative battle over the Malaysian solution is another example where Gillard is setting herself up well. The media has (again) fallen for Abbott's pantomime of "will I or won't I ... umm, after careful consideration, no". The real story is that, for the first time, Gillard has a backup plan; one that engages Labor people.

When (not if, press gallery clowns) the Coalition knocks back the Malaysian solution, Gillard will announce onshore processing of refugee applications. In doing so, she will throw herself on the mercy of the ALP. There will be tears, there will be mea culpa and hugs and forgiveness, emotive politics of a kind we haven't seen since Bob Hawke at his peak.

The slight possibility that Kevin Rudd might return to lead the ALP will be closed by this outpouring of emotion. Factional heavies are always wary of groundswells that might sweep them out of office, but they put the PM where she is and if the punters love the PM then their positions are safe (so long as they dump ideas of bringing back someone they were never keen on: no big loss). Labor loves all that sentimental redemption stuff, and Gillard will dish it up to them.

This isn't to say Gillard will go all soppy, all Giving and Learning like some light Oprah. She needs to keep on snarling at those who will never vote for her. She did it once with Abbott's relentless negativity, and while it would be counterproductive to do it too often she needs to do it more often. She needs to go back on the Alan Jones show and put him in his box: Jones fans will be appalled at "that woman", but no more so than they are already. Next time someone calls her a liar to her face she should go them: not too hard, but enough to show who's boss, enough to show the mongrel that Labor people need to see in someone standing up for their interests.

The solutions themselves aren't much chop: US-style primaries, e-whatsits and the idea that collective wisdom isn't the only wisdom. It is actually quite surprising that it hasn't been dismissed out of hand by press gallery groupthink. Coming on top of a few rebarbative performances in parliament, and a lot of backgrounding that Labor's powers-that-be are locked in behind Gillard, the idea of Gillard is some sort of punchline is starting to fade.

By about mid 2012 Gillard will be absolutely adored by Labor people, however hesitant uncommitted voters might still be then. By that time Abbott's hubris will have run away with him. Abbott is utterly confirmed that everything he says and does is working. In his mind he can do no wrong. Anyone who says anything he doesn't want to hear, whether Peter Reith or one of the tougher-minded journalists, is wasting their time in the hope of changing Abbott's mind. The High-Speed Train to Hubris has left the Liberal station. As it recedes into the distance all people like Reith can do is shake their fists at it.

Abbott reckons he can simply avoid debates that don't suit him, or that he can smarm his way through them. Until recently, this was a fair assumption, but it just doesn't cut it any more. He's being outflanked by an opponent who's smarter than he is and who won't just sit there and cop it any more.

The media continue to cover Abbott and Gillard as though the structural changes haven't taken place, as though Gillard is on the knife-edge while Abbott is PM in waiting. Abbott won't survive the trip to hubris but it will be fascinating to see how the journosphere crawls out of that wreckage. Toot toot!

... Don't cry for me Argentina
The truth is I never left you
All through my wild days
My mad existence
I kept my promise
Don't keep your distance

Have I said too much?
There's nothing more I can think of to say to you
But all you have to do
Is look at me to know
That every word is true.

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Blank cheques

By the end of the year the government will have dealt with two big issues, refugees and the carbon tax. These aren't the two biggest issues facing people at the moment, regardless of how much they might occupy the MSM or what Robert Manne calls 'The Political Class'. However, they are significant in having the potential to disrupt the Coalition-inspired MSM theme that the Gillard government is a bumbling do-nothing government. The way the government deals with these issues may establish one way or another that if it can act in its own interests it may be able to act in the interests of the nation as a whole; but we'll see.

Quite rightly, there has been a lot of focus on the government during this time, having been humiliated by the High Court and with people wondering whether (rather than when) Gillard is going to turn things around. The incumbent government always deserves the scrutiny that comes with office, and if I had better data and more time I'd add to that scrutiny here.

The Opposition gets a lot of coverage, but not a lot of scrutiny, on the basis that while it isn't in government the polls show it is close to getting there. The Opposition is fairly weak when it comes to policy but with polls the way they are at the moment, so what?

The government doesn't have to beat the better angels of its nature, it just has to beat the alternative. Labor people do get all emotional about what a Labor Government might be and should be, but that's a relic from days when Labor Governments were wouldn't-it-be-luvverly aspirations, or few and far between, and you could hang anything you wanted on them and the idea would just float shimmering in mid-air. The least amount of sentimentality as to what a Labor Government is can be found in NSW, where Labor's been in power for 60 of the past 80 years.

The Coalition deserves more scrutiny. If they're going to become the government we need to know what they're likely to do - not just what they say. We need to know whether they are truly up to the job rather than (as I suspect they are) still screaming after being dragged from the lolly shop. Not many journalists do this, fewer than you'd imagine.

The dilemma facing the Coalition is one that faces all politicians with a lot of political capital. Any step they take in any direction will be a step down, but standing still won't help anyone either. This is a question of courage and leadership, and as such it's a challenge that The Situation cannot and will not rise to meet.

The clearest indicator of The Coalition's failure is here, a pro-Abbott article that damns him where it means to flatter. Gillard needs bipartisan support to get offshore processing up. If she doesn't get it she throws herself into the arms of Labor and the Greens and goes with onshore assessment of refugees. Either way she's a winner, and about time.

Surely by now even the biggest fool in either the Labor strategy team or the press gallery should realise that Abbott would squib a bipartisan solution. As was said of Yasser Arafat when negotiating with the Israelis: he never misses an opportunity to miss an opportunity.

Mr Abbott said he wanted to see Labor's amendment's [sic] to the Migration Act before agreeing to support the government.

"I'm not going to pre-empt the government and I'm not going to give them a blank cheque," the Opposition Leader said.

This is hardly news. He does this every time - every time, for years now:

• Day 1: the government extends the hand of bipartisanship to The Situation.
• Day 2: ah, he says, I'll think about it, but no blank cheque.
• Day 3: no, no, no, no - what a surprise!

Every time. It's not even news that he does this. You may as well report that he was wearing a tie.

Just because this is the dull pantomime that politicians dish out, it does not mean that this is the dull pantomime that MSM consumers want or need to be presented with. Massola has no excuse to be unprepared for the sheer absence of anything but bluff in the Coalition response:

As Opposition Leader Tony Abbott refused to say whether the Coalition would back Labor's amendments to the Migration Act, Ms Bishop rejected Immigration Department advice given to the Coalition that Nauru could now be on shaky legal ground.

"I don't believe that we need amendments to the Migration Act for us to reopen the detention centre on Nauru and for it continue to work as it has in the past," she said.

Well, there's the small matter of legal advice, and if you won't accept the good stuff direct from the professionals then no amount of railing from a blogger will do any good.

Because journalists won't do it, let's look more closely at Nauru.

Nauru needs a lot of input from Australia in order to develop the bureaucratic apparatus necessary to sustain the UN Refugee Convention. It is unlikely that a Nauru Solution II would escape scrutiny as it did under Howard.

Kevin Rudd has spent a lot of time schmoozing UN stakeholders recently, and while the Coalition and some journos have sneered at the junket aspect of that they are underestimating Rudd both in policy terms and as a tactician. If Nauru's passage toward UN endorsement were to be held up it would make the Coalition look bad: not to mention the half-baked attempt at fudging a fairly clear direction from the High Court on what's legal and what isn't. One can respect Julie Bishop's legal training and experience while respecting even more those of six High Court judges put together.

The Coalition could have broken with two years of kneejerk reaction and backed the legislation. The question would then be one of how well it was executed: every time there was any sort of shortcoming in the Malaysian solution they could wring their hands and declare that they supported the government in good faith, pearls before swine, you can't trust these people, etc.

Until now, the Coalition got a good run from the MSM on refugee issues for three reasons:

• Their position was clear: it was part of the Rollback pre-2007 thing that is at the core of The Situation's appeal, if not his very political being. Journos love their cliches, especially when those cliches buy them drinks.
• No matter what the government did on refugees it looked like it was on the back foot. This was true when Howard was in government too but the then-Opposition and the press gallery never woke up to that: they still haven't.
• Scott Morrison was always available to bag whatever the government did on asylum-seekers.

Today, the first option has been deep-sixed by the High Court, the second will be much less obvious, and the third will result in uncomfortable questions and thus the access will be cut back. Talk about a no-win situation.

There may still be people in the Coalition who think they can get the same good run by plugging the same line on this issue. All you can do is hope that those engaged on such a doomed mission have a fallback position, and bid them good luck into the future.

Scrape away all that rhetorical bluff and fudge (c'mon, journalists; this is meant to be your job) and it looks like the Coalition is covering up for four years of policy inaction, four years of denying that the voters rejected them for good reasons.

The Government has two perfectly serviceable options ready to go: what they're proposing with their legislation, and onshore if the legislation fails. The Opposition has no policy options on refugees, having forsaken all others to the point where any rethink would involve a humiliating climbdown and a loss of public clarity on what their position is: that sort of thing sees polling leads and donations evaporate, and leaders dumped. At last, this government is learning to play the strategically-limited Coalition off an even break.

Even more enjoyable is watching Niki Savva snookering herself:

... if Labor MPs stick with [Gillard], they are stuck with the carbon tax, which means the government is finished and a Coalition victory is assured.

The scare campaign only works so long as the tax is, like the stuff being taxed, in the ether. Niki Savva saw how quickly the anti-GST campaign collapsed when we actually started paying it, when some things went up and others down and otherwise life went on. I've said it before and like a good former staffer, I'll say it again and again: what value is there in a Niki Savva analysis?

Abbott's second-worst nightmare has to be Gillard striking a workable, humane policy on asylum-seekers which stops the boats, secures the support of Left and Right, and does it without his help. In all our dreams, most likely.

If we do have onshore processing, watch for harrowing tales from applicants followed by pictures of firm but humane processing, followed by happily resettled people warmly embraced by the community. Asylum-seekers will not be an issue at the next election: only the fringe-dwellers will dare go near that issue.

Given his office has (wrongly) taken backbenchers and frontbenchers to task for raising industrial relations reform, and Cory Bernardi had (rightly) been dragged into line for yet another transgression on Islamic issues, because the leadership did not want any distractions from the main game - in this case asylum-seekers - Abbott's threat [to deny Craig Thomson a pair to attend the birth of his child] was plain dumb.

In other words: when Gillard was at her lowest ebb, The Situation not only failed to deliver the killer blow but inflicted damage on himself. What a goose. Has he learned nothing?

The union movement have beaten the Coalition in the last two elections over WorkChoices. Recently the President of the ACTU, Ged Kearney, told the National Press Club that they were going to do the same thing again next time. Labor lost nine elections in a row last century because they couldn't shake the perception that they were too soft on communism. They later won four in a row because the Coalition couldn't shake the perception that they were too hard on Medicare. The Coalition is either too stupid, or too afraid of losing political capital, to rethink workplace relations policy from the ground up: until they do, The Spectre of WorkChoices is the gift that keeps on giving for Labor and the unions. No amount of shrieking from Peta Credlin can or will change that.

Going after Thomson is inextricably linked to Coalition policy on workplace relations. The sort of flexibility Thomson requires (and which Abbott is denying him) is the very sort of give-and-take a modern workplace policy needs (and which doesn't give you confidence in Abbott's ability to come through). As for the other allegations against Thomson, the fact that the police are onto it robs the allegations of any political force and brings to an end the Javert-like role of Senator Brandis. It drags out the timescale (Libs need a quick result, which is not possible when trawling through documents and interviewing different people with competing claims and agendas) and makes a result like this more likely.

Speaking of parasites, Cory Bernardi is undeniably of a piece with today's Liberal Party and its federal leadership. If you're going to attend rabble-rousing rallies in Canberra and receive people like Chris Monckton or David Clarke, on what arbitrary basis do you declare Geert Wilders beyond the pale? This is what happens when you lower standards to the point where The Situation is your choice for Prime Minister. People like Savva are treating Bernardi like he's from another planet, but he was Nick Minchin's protege and was SA President of the Liberal Party. If his roots in the Liberal Party ran less deep, like Pauline Hanson's in 1996, he'd be gone from the Liberal Party by now. The fact that he isn't is more significant than Savva can bear to contemplate.

Savva must feel all righteous in calling for Bernardi to be dumped, but if she's any sort of analyst she must confront the idea that The Situation won't dump him, and what happens then?

Despite Abbott's denial, Bernardi did offer to help divisive Dutch politician Geert Wilders with his proposed visit to Australia. Once again Bernardi embarrassed his leader, and infuriated his colleagues, who believe his behaviour threatens votes in western Sydney. This is not limiting free speech; it's about Bernardi not knowing or not caring that he has crossed a line.

Bernardi thinks that he's shaping debate, within the toxic environment created by the rhetoric around asylum-seekers, and the dog-whistling by his leader, the Shadow Minister for Immigration and other senior members of the Coalition. Bernardi's actions and beliefs are squarely within the Liberal mainstream today. The Liberal Party will indeed lose votes in western Sydney - and Melbourne, and you'd be surprised where else - because Bernardi is not the wacky outlier Savva tries to make him out to be.

That's why Abbott won't sack him - and if he did, like Howard's axing of Ian Campbell, the only effect it would have would be to lower morale (and, perhaps, give rise to Cory's Kampf).

Savva is right about Kevin Andrews but while I can say that, coming from her it's just mean. Is there really anyone left from Costello's office who hasn't yet been looked after? Besides, when ALP Vice President Joe de Bruyn wants the Liberals to do him a favour, who will he turn to once Andrews - the father of WorkChoices - goes?

A failing, defensive party will always indulge insiders rather than sacrifice in the hope of wider appeal from those not yet inside the party room. Howard in 1985 would have stood up for someone like Bernardi, but ten long and hard years later he would have thrown someone like that under a bus and appeared on TV the next day eating Turkish delight.

Abbott also has to take ownership of the economic debate. Rather than release detailed policies, he can talk about themes and propositions. What is his story about where the country should go? Which threads will he use to bind and distinguish his administration?

He won't do it convincingly, he can't do it convincingly. "Themes and propositions" didn't work for Andrew Peacock or Simon Crean and they won't work for The Situation. Niki Savva has no excuse for not knowing this. She has no excuse for not conveying to her readers her sheer inability to come to terms with this particular pig, let alone hold it still long enough to slap some lipstick on it - or why she feels compelled to do so.

The carbon tax - along with the mining tax - is a massive change to the way we fund our government. Once a tax is introduced it never gets abolished, it just means that other taxes are adjusted around it. Because of that it represents a change as to what we can expect from government. At one stage only people with property (i.e. people who paid taxes) were able to vote or be represented in Parliament, and so when the franchise was extended so too the nature of government changed, because those who were served by government underwent change.

The journosphere should look into the carbon tax more than it has: not into the horse-race impact of "who wins the daily media" but into the longterm shift of who pays for what. Savva's assumption that it is an automatic boost for the Coalition is stupid. Is there a competing vision from The Situation, and if so what is it? That's the kind of information we need to make voting decisions, actual value-add, rather than preparing us for a government in which Tony Abbott simply plays cat-and-mouse with every new idea put to him before killing it.

Let's descend from the high plains of Theory and Policy, though, and see that even if you stick to conventional horse-race political reporting, Tony Abbott is not "riding high in the polls". He's in diabolical trouble, and it looks like his whole business model will be on the rocks by Christmas.

Peter Brent makes some good and telling points about where Abbott's support is and isn't coming from but he does himself no favours with this:

People aren’t great at anticipating how they’d vote in a hypothetical situation.

All polling is a hypothetical situation. There will be no election this Saturday, and there wasn't one last Saturday either. There hasn't been a barrage of trite tat which I discard straight away, despite having paid for it with my taxes. There hasn't been the sort of Freudian slips or character-revealing lapses which are worth more than a thousand hours of staged bullshit. I remember polls where Kim Beazley and Mark Latham were "riding high in the polls", yet neither man became Prime Minister. Even if you fully enter the magic wardrobe and accept the premise of polls, they play the same role in modern politics that weighing oneself several times a day plays in the life of someone with an eating disorder.

Depth is what we want from political coverage and you're not going to get it from Niki Savva or James Massola. If that sort of depth is too hard for today's journalists then we need new and different and better journalists.

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Issue of the week II: Julia Gillard death-watch

The media have decided that Prime Minister Gillard has pretty much had it over the decision to end offshore processing of refugee applications. However much of a consensus this might be among the press gallery, they've been caught in consensuses (consensi?) like that before which have ultimately proven fruitless. You'd think they'd learn, and ought to have no sympathy for them if they don't.

Many journalists have been employed to create low-value non-stories around leadership speculation, an unsustainable business model if ever there was one.

How many hectares of screen real-estate (or hectares of actual forest) were sacrificed to Howard-Costello speculation? It began in about 1997, when the novelty had worn off Prime Minister Howard and a few hacks had not quite adjusted to Life After Keating. It did not end for another dozen years: Costello never challenged Howard for the leadership, he didn't even challenge after Howard had lost his seat (when he would've had no opponents: some challenge) and was accused of plotting up to the very point that the exit doors in Parliament House hit his backside on the way out. Every bit of reportage on that issue was wasted.

Then, Kevin Rudd went from having the shine taken off him to being dead meat within a few weeks. The entire US State Department knew that Rudd had become hated by his party, and having read Machiavelli they knew what it meant for a leader to be hated. The Australian parliamentary press gallery had no idea until David Marr's catty Quarterly Essay (i.e. not a daily news outlet, like the one that actually employs him), and then most of the action took place over a single night. It was too late for the press gallery to be getting new insights at that point so they all wrote the same story, faceless men ooh-ah.

If you could sum up the political situation in a sentence, it would be: Labor people are concerned about their polling but nobody is scuttling around doing any numbers to depose Gillard. There. I've written the story so journos don't have to. Now, can we get some journalists in to dig around for some other stories using some actual journalism?

At some point Julia Gillard will cease to be Prime Minister. It may be that there will be real moves against her. Until then, it would be nice if the fearless sleuths of the press gallery found out what was going on at the same time as the US embassy.

As for this, Gillard needs to do three things:

• Announce that refugees arriving here will be dealt with on shore, with full UNHCR input and access to those that want it;
• Call Abbott out for proposing a course of action that's illegal and cruel. Conservatives can handle the accusation of cruelty, it was water off a duck's back with Tampa in 2001 and it still is today. The impracticality and illegality, though, that's how you hit conservatives where they live. They believe in following the rule of law and being practical, not airy-fairy, so for Liberal policy to be illegal and impractical will be devastating and demoralising; and
• Say that she doesn't trust Abbott. Abbott says one thing and does another all the time, why should she negotiate with him? Call him a flake. Make that float-like-a-butterfly stuff count against him. Make herself out to be the responsible adult in this governing business, following the law and doing a difficult job under trying circumstances.

The Situation is not a given in Australian politics, he has to be cut down if the government is to be re-elected. If not, the government may not be re-elected. Now look at what the government offers, in its clumsy way, then look at what The Situation offers, and you tell me a) which is more important and b) why it's more important than education funding.

If, after all that, you're not as edified as billy-o, try one bogan from Adelaide picking on another, but without the beer and chunder. A man must have a hobby but I still think Hicks was stupid to alight on jihad; that said, for all his bluster, you know Kenny would snap like a twiglet after 48 hours in Gitmo. a) and b) above apply here too, in spades.

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The most important issue of the week, part one

The most important issue of last week was the release of the Gonski Report into school education funding.

Yes it was. Asylum-seekers are few in number: some of the nation's shock-jocks cannot claim an audience as high as the number of asylum-seekers we receive each year. Very few voters (and almost none in marginal seats) will change from supporting Labor over the issue to supporting the Coalition, or vice versa.

Education is one issue where many people will - and do - switch their votes. With millions of students in the Australian education system, and with everyone having an interest in a well-educated workforce, it is one of the most important issues facing the country.

Each time government has changed at the federal or state/territory level in this country, one of the key planks in the insurgent opposition's campaign has been to portray the government as incompetent in managing the education. A government that has an effective rebuttal/counterattack on education policy against the opposition has more than a fighting chance of being re-elected.

It is probably the only policy area that can consistently mobilise Australians to engage in public protests. Leaving aside the small cohort that protests at the drop of a hat (largely consisting of university students/staff and activists of unions such as the CFMEU), threats to diminish education funding or standards gets people who wouldn't otherwise participate in protest action to hit the streets. It isn't the only issue: the odd war or environmental issue can stir the passions but these are few and far between.

Two reasons why leftists and anarchists are wasting their time when they latch on to protests in the hope of being able to steer popular dissatisfaction to their ends: education is not deliverable in conditions of chaos and is aspirational (in both social and materialistic terms) in character.

David Gonski is a busy man. He's a much sought-after board member of corporate boards, he was executor of Kerry Packer's estate, he's Chancellor of UNSW. It is telling that such a man has taken time out to chair the committee conducting this review. The report is too in-depth to be some rich-man's folly and it puts to shame all those edifices and "causes" that are (I mean, fancy scrapping over becoming a director of an AFL club. Honestly).

It is fair to expect that the Australian media, with an eye to both real and big issues and to selling product that appeals to the market, would have been all over the Gonski Report. There is something in it for everyone. Journalists should have the skill and media organisations should have the range to cover the full range of public policy on this issue, from decisions at Federal Cabinet to delivery in classrooms, public and private, across the nation.

Once again, the media have obsessed over a few snippets which don't really matter, and ignored big and complex issues that matter a lot. The people who are running the mainstream media into the ground think it's clever to do that, they think it's clever to avoid the hard work of writing simply about complex issues. Their whole 'profession' is going down the toilet because they can't snap out of this, and they can't understand why people don't trust them:

• This and that were the best value articles out there and should have been the start of a series of articles. Each of the dotpoints in the Milburn article warrant a 400-1000 word investigation, as does the chop-and-change approach to teachers' professional development in Zyngier's piece;
• This does the ABC trick of starting out with the opposition response before you find out what is being criticised. Journos may love this but it makes for poor information: you shouldn't have to wrestle with a text just to find out what is being said;
• This shows the limits of aggregated media. Why people in Wingham should care about what happens in Lansvale without a contrasting local angle isn't clear (but that would assume that readers' interests matter more than the fact that Fairfax has content to pump at them);
• In this, Kevin Donnelly is apoplectic that someone, somewhere, disagrees with him about anything. The idea of all this outrage is for transactional politicians to give up and give poor old KD whatever he wants, anything to avoid a bit of fuss; which leads to
• Crap like this, in which our correspondent is outraged that a government she didn't vote for might consult people she doesn't like, which almost adds up to a slander against Gonski and a disincentive to conducting public service in the way that he has;
• You'd almost feel sorry for the writer of this, starting off as a straight piece of reporting but slowly and inexorably sucked into the party line toward the end.

Public policy should be examined all the way from the interest groups that raise issues, through the parliament and back to the community through frontline services. It's stupid and wrong to regard parliament as where the public policy action is - but that's a tradition of journalism apparently. The only thing that gets in the way of the traditions of journalism is the future of journalism, and as the latter dims you can only wonder at the sheer puffery that exists around the former.

If journalism is going to stuff up big and important issues like education funding, and beggar their own profession, you can't trust them to get anything right.

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No refuge

I supported the Malaysian solution. Go ahead, laugh. Not being a journalist or a politician I'm free to admit when I'm wrong.

To inform myself on the High Court's recent decision on this matter I read both kinds of mainstream media articles about it: gloaty pieces from those who dislike everything this government does balanced with gloaty pieces from those who disapprove of inhumane treatment of asylum-seekers in particular. Hooray and whoop-de-do for balanced reportage: at least I paid for them as much as they were worth.

I supported the Malaysian solution because I thought it would form the start of some sort of regional co-operation across southeast Asia on the matter of stateless and displaced people. Nauru and Manus Island were designed to hide the problem, not as a basis to work with others to solve it. Proposals for East Timor and, yes, bloody Manus Island again show what happens when you focus your policy-making energies on announceables rather than longterm solutions.

No country in the region can or should have to deal with thousands of refugees by themselves. Countries adjacent to states like Afghanistan, Sri Lanka, Burma or Vietnam from which asylum-seekers come have to sustain populations far in excess of Australia's on a fraction of our income: they can be cruel to asylum-seekers and refuse to recognise them legally because this is the only option they have to minimise the numbers of people they have to deal with.

Countries like Australia are attractive destinations for refuge-seekers, not just because of relative economic prosperity but also because we have a strong record of actually accepting those who seek asylum. For hundreds of years this country has been a place to which the wretched of the earth come to build a good life: it is true for Afghans and Somalis today, it was true of South Vietnamese and "Balts" and Greeks of previous generations, and my Scottish crofter ancestors in the 1830s. I can't believe that aspect of our history and our national character no longer applies.

Neighbouring countries resent being somehow responsible for those who use their territory as refuge from a dispute they have not provoked, or as a way-station for people en route to Australia. Rather than have countries feeling put-upon and resenting their neighbours for making their lives harder, we should co-operate so that we can all deal with asylum-seekers better than we do.

The good thing about the Malaysian solution, while it lasted (if such an apparition can be said to have 'lasted') was that there was more scrutiny over the last three months of the way Malaysia treats asylum-seekers than there ever was. I thought/hoped that a regional solution might lead to more of this sort of thing: watch it evaporate now.

With so many unemployed journalists in this country, with readily available media platforms and such cheap airfares to Asian countries, I'm surprised that more journalists aren't doing more freelance reporting from southeast Asia. Admired journalists like John Pilger cut their teeth by doing exactly that - but none of those who are Editors/News Directors today did, so young journalists demonstrating quality journalism under tough conditions would probably be lost on those people.

People who spend their lives standing up for human rights enjoy few rewards, but one of them can be a sense of righteousness that repulses more than it attracts. Observations of how asylum-seekers are treated in Malaysia have given rise to some talk about how Australia might guide Malaysia on human rights issues. This ignores the fact that relations between Australia and Malaysia have never been so fraught as when Australia decides to set itself up as an exemplar to Malaysia. There are 93,000 asylum-seekers in Malaysia and less than a tenth that number here: we aren't going to resolve anything or help anyone by putting ourselves in a position we can't sustain.

I thought that failing to conceive of a broader solution to the refugee issue was a weakness of Julian Burnside's piece, but you don't get to be a QC by being all pie-in-the-sky and taking your eye off real legal principles like we at the Politically Homeless Institute do. I agree with his criticism of the "Weird economics ... mandatory detention costs us about $1 billion a year", but I think here he is being disingenuous:

There is simply no merit in the idea of detaining people indefinitely just because they have arrived in Australia by boat. Asylum seekers also arrive by air: typically they arrive on short-term visas such as business, tourist or student visas.

Yes, but those who arrive by air have identity issues sorted. You don't get on an aeroplane unless you have a passport containing a visa. The issuing of both documents resolves the sorts of identity and background questions that are yet to be resolved for those who turn up with nothing but the clothes on their backs.

If Australia capped initial detention to just a month for health and security checks, overcrowding in detention would be solved instantly; the cost of operating the detention system would reduce dramatically; and the foreseeable mental harm which is caused by indefinite detention would stop.

It's not clear why a month would be sufficient to resolve security questions. Equally, it isn't clear why everybody should be held in detention in order to catch a few who might be doubtful. This, and the disturbing al-Kateb principle that Burnside cites, is one of the problems with extrapolating the general to the specific in public policy. Australia has a general right to exclude non-citizens from its territory and from many of its legal protections, but in exercising this right we impede the rights of human beings to whom we owe variously binding duties of care.

For all the wonders of the Australian legal system and its British heritage, &c., &c., the issue of national sovereignty versus universal principles is a serious design flaw. Again, it is a weakness of Burnside's piece that it does not examine that.

Speaking of assumptions that may prove unsustainable, it has been a mainstay of this blog that Annabel Crabb is a fool. This has come under considerable challenge with successive articles which appear to have come from beyond Parliament House: instead of wilting in such a strange environment she seems to have developed a sense of perspective, which we at the Politically Homeless Institute had long considered impossible for her to acquire convincingly or sustainably. This is still a dollop of conventional politico-media wisdom, but one of the better examples rather than among the worst. Some allowance, but not much, should be made for the fact that Crabb had to write this and post it within hours of a long and complex court case being decided.

Today's decision from the High Court is disastrous for the Government ... because the deterrent effect that was the redeeming feature of this harsh and - in terms of Labor's history in this policy area - hypocritical solution has now evaporated. Australia remains obliged to accept 4,000 new refugees from the Malaysian queues, and must now additionally expect a new influx of boat arrivals through the usual channels.

Burnside is sceptical of the deterrent effect and I am inclined to agree with him. In a world of push-factors for refugees, the pull factors have always been overstated by the Australian media (and by those wishing to pitch stories to the Australian media, such as the Coalition, which explains why the Coalition get such a good run from the media).

Crabb mentions push and pull factors briefly, but only from the government's perspective. She does not consider it from any position of whether or not it might be objectively valid in the case of the people concerned in seeking asylum. Yes, she had limited time, but raising the issue other than as a perception problem for government would prove some consideration of policy issues as they apply in the world beyond Canberra.

But the most egregious aspect of today's decision by the High Court is that it provides a new and crushing chapter in what has become a tale of rambling incompetence. Across both Rudd and Gillard governments, this policy area has played host to a most dispiriting display of opportunism, mendacity and half-arsedness. The Rudd government repealed some of the harshest elements of the Pacific Solution, but never acknowledged the plain-as-day reality that this decision would have some effects on the rate of boat arrivals. Busy denying the bleeding obvious, the Rudd government instead occupied itself with slogans about "tough and humane" policies while desperately casting about for regional assistance.

So: anything the government does - a program to build school facilities with a 97% success rate - is incompetent. Old-fashioned journalists used to chase stories: new-fashioned ones chase memes. I still think the search for a regional solution is more baby than bathwater but it looks like the media herd will trample it.

Do you recall the election campaign, in which the western Sydney MP David Bradbury materialised beside the PM on a patrol boat in Darwin Harbour, apparently monitoring the horizon for foreign wayfarers determined enough to invade his seat by means of the Parramatta River?

The Parramatta River trickles to a creek well before you get to the fabled electorate of Lindsay, but yes, I remember how both Gillard and Bradbury looked not like Defenders of the Commonwealth, but like a couple of dorks.

The confident assurance from the Immigration Minister just weeks ago that the High Court legal challenge had been anticipated and rigorously prepared-for was hit amidships early on by High Court Justice Hayne, who growled at the [Solicitor]-General that his submission was "half-baked". And now today's decision, in which the Government's Malaysia Solution is not crippled, not winged or crimped or slightly frustrated by our nation's highest court, but clean bowled.

Set aside the mixed metaphors and see that Chris Bowen has no credibility as Immigration Minister in pursuing or spruiking a policy that has been the polar opposite of what he has said and done for over a year. He should resign, and have sufficient faith in his political skills that his chances of becoming a minister again at some point are not yet gone.

For him to stay in his current office would put him in the same position as the ministers in the last unlamented Labor government in NSW. It would put him in the same position as the so-called moderates in the Liberal Party, whose clout is demonstrated by the utter lack of any moderate policies held or advanced by "their" Party (credit to @thewetmale for putting it so pithily).

Gillard needs a new Immigration Minister. Bowen may not warrant being removed from the ministry altogether so there may be scope to swap him. Possible alternative Immigration Ministers whose current portfolios could be entrusted to Chris Bowen:

• Greg Combet;
• Tanya Plibersek (nah, her activism for Palestine over Israel would make her unacceptable);
• Brendan O'Connor (he's outside Cabinet; but Bowen can take one for the team and come back, just like Amanda Vanstone did);
• Tony Burke (keeps the state and factional equilibrium; Immigration would make Burke or break him, while bushies would more easily relate to a minister who's been through tough times himself and who'd be more decisive than Burke).

Here we could play all sorts of games about reinvigorating the government, or rearranging deckchairs on the Titanic; either way the status quo is a non-option.

Nauru is the one reversal the Government has so far not permitted itself. Perhaps it will now. It hardly matters anymore; if anyone in the Government is still wondering why voters don't believe Julia Gillard when she says she has things under control, today should provide a devastating answer.

As the court has said nuh-uh to Nauru, there are two courses of action open to the government now. First and foremost is to process asylum applications in Australia. Plenty of people and even a few polls have called for this. People suspected of being dodgy or malicious should be dealt with in the standard manner: you have the right to remain silent ...

The second is to station more DIAC staff at embassies in countries from which asylum-seekers come. Phillip Ruddock recalled the Immigration official from the Australian embassy in Islamabad; this should be reversed. Embassies across the region should have staff capable of performing assessments and processing, and I'll bet the cost of doing so beats hands down the existing costs of detention.

The Coalition's preferred options of Nauru and Manus are shot every bit as much as the government's Malaysian solution. The idea that desperate people should form an orderly queue and not attempt to come here has no basis in fact, and should not be relied upon as the basis for policy.

And yet, imagine for a minute that the government were to take the first course in particular, when all other options have so clearly failed. The very process of going against a decade of practice in immigration policy, the sheer scope of destruction of all those hoary old themes and memes and half-baked assumptions, would be more than the press gallery could cope with, let alone communicate to the citizenry. It would take the sort of sell job that Paul Keating did during the 1980s across the gamut of economic reforms in order to effect such a transition. There is no way that the Australian media would or could adapt to the mental shift required in looking at refugees in such a new way.

The Coalition have their preferred options closed to them - with the exception of Temporary Protection Visas, and while they might appear as attractive as an ice-cream in a heatwave I would be fascinated if they lasted as long in the face of a High Court challenge. It can still complain about whatever the government does, with the expectation that the media will take its statements on face value. The Coalition does not, however, have any policy options to offer Australian voters:

• Nauru and Manus Island are off the table. Any attempt to establish that human rights protections exist at those sites would look weaselly and be negated by the next example of Abbott flakiness;
• The idea of a regional solution would not occur to anyone in the Coalition and they do not have the foreign-policy clout to pull it off;
• Immigration spokesthing Scott Morrison lives from press release to press release and represents The Shire in federal parliament. In policy-development terms he is a sillyhead. If any politician is stuck in the tough-on-asylum-seekers theme, it's him.
• The Situation would not survive any transition to a post-Howard immigration policy either. His job is to make people angry. Nauru and Manus have lost credibility, so a key aspect of his whole Howard Restoration theme is finished. It would be easy to simply agree with the government and have a moderate policy, perhaps with more of an emphasis on chasing the phantom of skilled migration; but Abbott is all about sharp and cutting differences with the government. Burying this policy difference would throw out his whole business model (if not his business case).

Asylum-seeker processing that was not only onshore but community-based would be the most radical departure Gillard ever did. Like Malcolm Fraser, her appetite for reform appears exhausted by the very means by which she ascended to the Prime Ministership. Yet, for all its political scope and risk, it is the only one with a clear advantage for the government.

Prime Ministers need to have gone through the wars a bit to get some respect, and Gillard has been there. Earlier this week she was starting to get on the front foot with News Ltd and even in Question Time. For her to keep trying to play the old game after the siren has sounded isn't committed or determined, it would be pathetic. A Prime Minister must never be pathetic: this is how the NSW Labor government ended up.

With its level of popular support, community processing with an increased offshore presence and cross-national co-operation is a winner. Well, in comparison to all the other loser policies it is. It has the capacity to rewrite the rules of the political game such that the Opposition as it is currently configured cannot compete. It would show that this is a government that does the right thing, however reluctantly; governments that do the right thing can be indulged in gaming the opposition. Those who don't demonstrably make that case look like they're just mucking about in sinking to the Opposition's level.

That said, I could be wrong about all this too.

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Swallow it up

For they have sown the wind, and they shall reap the whirlwind: it hath no stalk; the bud shall yield no meal: if so be it yield, the strangers shall swallow it up.

- Hosea 8:7 (The Bible, King James Version)

Destroying opposition leaders is brutal work and it is a relief to see the Prime Minister realise finally that it is an essential part of her job. Some pests can't just be swatted away: there comes a point where you have to get out some strong and smelly chemicals and blast them to kingdom come (starting with some Old Testament can really get the blood moving!). She finally got up on her hind legs in Question Time last week, and she really gave it to Milney and News Ltd and seems to have stunned Andrew Bolt into silence. While welcome, this won't matter if it isn't part of a pattern that shows that she will not tolerate empty stunts from The Situation as somehow balancing substantive achievement.

Niki Savva believes that it's just a "mission" for the Opposition to have a go at the Government, but if the Government dishes it back, horror!

IF the Gillard government could pin the Ibrahim family's gang wars in Sydney and Mick Gatto's successful auction bid for lunch at the Lodge on Tony Abbott, then it would. Throw in the London riots, too. After all, the Opposition Leader visited there around the same time.

That's what passes for wit from Savva; its lowest form, certainly, but standard fare for someone who's spent far too long in Canberra. It's the sort of thing Peter Costello used to come out with when flailing various members of the ALP, the sorts of performances that weaker personalities on his staff like Savva and Tony Smith absorbed into their core perspectives on life. It's the sort of thing that journalists complain about when coming from bloggers or "the twittersphere".

Now that the Liberals aren't in government Savva believes it's somehow illegitimate for Liberals to be on the receiving end of any form of criticism, hype or bluster. Savva's kernel of truth is neutered by her hypocrisy. She has put the Liberals in breach of one of the basic laws of politics: if you're big enough to dish it out, you have to be big enough to cop it.

In the last little while Labor and its acolytes have blamed Abbott's scare campaign on the carbon tax for making it impossible for the government to sell its policy, and further that some of his lines of attack are either xenophobic or racist. His negativity about May's budget made it flop. He has talked down the economy so much he has shaken business and consumer confidence. He created sovereign risk and devalued assets by getting stuck into the coal-seam gas industry. The workers he claims to stand up for will be destroyed by Son of Work Choices.

When you've been around politics for as long as I have, you'll remember Peter Costello or Keating or even Malcolm Fraser's Treasurers getting stuck into every opposition leader and most of their frontbenchers for talking down the economy, creating sovereign risk, shaking business and consumer confidence, doing over the workers, etc. The last budget "flopped" about as much as any of Costello's budgets "flopped". That's politics for ya.

I don't blame Abbott for failing to sell the carbon tax, but then again it would be lazy to assume I'm some sort of Labor acolyte.

[Abbott] has trashed democracy, breached the divide between the justice system and the executive, and infected Australia with down and dirty Tea Party politics.

Let's see how Savva addresses these strong claims with her very next paragraph:

Meanwhile, the Craig Thomson scandal ...

Let's not admit that critics of The Situation have a point: let's just complain that what's sauce for the goose shouldn't be sauce for the gander.

If you want scandal, look at that female Liberal senator charged with shoplifting $92 worth of goods from the supermarket. And Abbott hid it for two months! Shame.

Don't forget the question of assaulting a guard who apprehended Fisher, Niki; a guy doing his job and standing up for his employer gets thumped by some pampered jobsworth from Canberra, without so much as a phone call from George Brandis. Surely your long-standing concern for health sector workers extends to those protecting struggling retail outlets from smash-and-grab raids.

Mary Jo Fisher was charged in South Australia and will be tried there. Policing and courts are run by state governments, and the State Government of South Australia is a Labor government. If a Liberal senator had been charged by the NSW Police when Labor was in State Government here, they would have used it to absolutely negate the next attack by state or federal Liberals. Maybe the SA government really has run its course.

Anyway, back to Savva:

Not only is Abbott culpable for asking questions about this and ignoring massive job losses in manufacturing as if that is suddenly a good news story, which I guess comparatively it is [sic], he is also remiss for not asking them sooner.

Shit happens, eh Niki?

She insists it would have been unremarkable for her adviser to call a public servant to check a fact.

Did Peter Costello never call Ken Henry or any other public servant to check matters of fact? Really?

... when Abbott calls for an explanation, attack puppy Craig Emerson denounces him for maliciously smearing the Prime Minister and calling her a liar.

Never mind they had set the hounds after George Brandis, CSI, for calling the NSW Police Minister and the Police Commissioner to advise he was seeking an investigation into Thomson's activities.

Savva is complaining that the government is giving the opposition as good as it gets.

Let's assume the "CSI" thing is a typo for "SC": maybe a public servant could have helped check that. Besides, it calls to mind George looking into dead things, which one or two actual lawyers might doubt is within George's competence.

Emerson had to spoil it all by being unable to answer questions on travel warnings to the US during Cyclone Irene, forgetting his day job was Acting Foreign Minister.

I thought it was "attack puppy".

And they reckon this issue is not distracting the government.

Since when is the Australian government distracted by Cyclone Irene? What vast numbers of travellers planning a trip to the United States listen in to Question Time for a travel advisory? Or, could it be that a supposedly experienced journalist and staffer (i.e. someone who lives and dies by the way they express themselves) has flung some sloppy wording at the reader in a fit of partisan frustration?

Not a word about The Situation's economic policy failure on manufacturing, and how Emerson skewered him well and truly. Costello was right about Abbott, Niki, as are Emerson and Paul Kelly: the guy really is an economic moron. Why would anyone want an economic moron running this country? So Greek.

In a revealing interview on Friday, Leon Compton, of ABC Statewide in Tasmania, valiantly and repeatedly tried to elicit from Gillard some expression of concern about allegations of gross misuse of union members' hard-earned contributions. All he got were platitudes ...

No, this is a standard thing with journalists who confuse themselves with big-time interviewers Holding To Account. It's dumb, it's boring, but they keep doing this terrible journosphere cliche. It goes like this: an investigation is underway, so the journalist asks the politician about it. The politician says let the investigators investigate, I won't interfere. The journalist keeps on asking anyway: this pantomime is what journalists call "hard-hitting".

The Prime Minister gave a reasonable and responsible response, but Leon sucked up all her time with some sort of insistence that she interfere with an official investigation: so hard-hitting, so valiant.

[Gillard] thinks her only hope is to make [Abbott] appear unacceptably risky, hopelessly negative, internally inconsistent and completely ill-equipped to be prime minister.

Yep. Perhaps not her only hope, but this could be the closest thing you'll get to cogent political analysis from Niki Savva.

He is drawn into every story, every scenario when really, if the government wants people to recognise and focus on its achievements, ministers should talk about them more and him less.

They do, then journalists - harried by imaginary notions of "balance" - chuck in one of his stunts and insist that the government comment on it. They've sunk into the abyss by giving him respect and courtesy, which includes ignoring his more unhinged remarks. What they're doing now is dishing it back to The Situation and his cronies, and they can't handle it at all.

They make [Abbott] seem effective and unstoppable; however, where they have succeeded, with a lot of help from him, is in making him scary.

Destroying prime ministers is brutal work and it is painful to watch Abbott day after day, Terminator-like, fulfilling his mission. It has paid dividends for the Coalition vote, but it has kept his personal standing low. Until now he has been willing to pay that price. He can't afford to do that indefinitely and if he is looking for a role model to avoid, and one that shows how difficult it is to change perceptions once they are set, she stands before him.

It's at this point that a Coalition apologist will blithely insist that The Situation will flick the switch to Prime Ministerial mode, coming out with good and sensible policies, toning down the over-the-top rhetoric, and doing all those things that The Situation can no more do than fly to the moon.

Abbott has time to soften the negatives ...

But not the capacity, Niki, nor the inclination. If you knew Abbott at all, and were being honest with your readers, you'd know that and you'd admit it.

With Arthur Sinodinos entering the Senate, he has an immediate opportunity to re-weight economic debate. Sinodinos could have a new portfolio of productivity, which gets him into the heart of economic policy without having to unseat anyone already there.

If the Coalition doesn't have anyone focused on productivity, as implied by that proposal, then everyone in the opposition's economic policy team deserves to be "unseated", if not dumped at sea in a chaff bag. Productivity has been a vital concern to this country's economy since the latter term of the Howard government; you'd think that after four years, and with WorkChoices having caused more problems than it solved, they would have come up with a few ideas. If not, they are not ready for government and may never be.

If Sinodinos is the answer, then never mind the Senate - why isn't he candidate for Dobell?

Then, unless he has a new prime minister to deal with ...

Or an old one with a new ticker and a sense of perspective, and who already has form in knocking The Situation into a cocked hat ...

... Abbott should take the summer break to modify and refine his approach. He can afford to ease off. She is pretty much dead woman walking.

That has to be the stupidest political advice since Fraser called an early election in 1983 hoping to pin Hayden to the Labor leadership. Firstly, The Situation might get photographed in his sluggos again, and secondly when he spent a week away the press gallery realised what a vacuous dickhead he really is and he's been battling ever since.

The Situation doesn't have an off-switch, he can't be softened and he doesn't have much of a mind to change. The Situation will go on and on while the Gillard government does grown-up governing work, so that at the next election an imperfect government offers itself for re-election against a clownish alternative that can dish it out but can't cop it. Niki Savva knows The Situation isn't good enough, and her painful equivocations show this; yet, she can't admit it when the critics have a point. Savva should be big enough to realise that you have to be able to cop it if you dish it out, but she isn't. That's politics for ya, Niki, swallow it up.

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Gold and soil and wealth for toil

Who'll manage our sovereign mineral wealth? That's the answer to who'll win the next Federal election. Labor have put the next election on the carbon price and the mining tax. The Coalition, it would seem, are softening us up for a sovereign wealth fund (SWF).

I got halfway through writing an article like this, but not as good, to show how the Coalition had bet everything on being able to knock off the carbon tax - only to find that Jane Shaw had already written it. Read Shaw's piece, it's good; see you when you get back.

Shaw is right about the frantic attempts to get rid of Thomson. If the Coalition had been smart they would have gone after him during the negotiations with the independents: Crook, Wilkie and Oakeshott would have found it difficult to support Labor and Gillard would probably have forced Thomson out for the sake of keeping them on board. If Thomson survives until the election then Ross Cameron (hi Ross! I know you Google your name often and end up here) will be absolutely spewing.

This article by Josh Frydenberg is the tipoff. There are two things you need to realise about Frydenberg. First, he's intensely ambitious. Second, he's not smart enough to live up to the expectations placed upon him. He works hard at nothing other than networking, and he's a sillyhead. It's a poor article and normally I'd rip straight in, but there's a broader issue here to which Josh thoughtfully alerts us:

... the calls for a sovereign wealth fund from senior business leaders like Mike Smith at ANZ, Ralph Norris while heading CBA and CSL's Brian McNamee ... the IMF and Australia's own Reserve Bank governor Glenn Stevens ... OECD secretary-general Angel Gurria .. my colleague Malcolm Turnbull has made a thoughtful and considered speech on the subject, and Joe Hockey ... Both are more attune to the debate than the government.

And that's the heart of the article: arse-covering and name-dropping, an authentic product of its author.

Seriously though, there might well be a case for a sovereign wealth fund. It's just that Josh isn't the one to make it. The first quarter of the article is a nice rundown of Australia's macroeconomic situation. Then there's this:

Ensuring the competitiveness of our manufacturing base and other important exchange rate-exposed sectors like tourism will not be easy.

No, it won't be easy, and that's why Josh won't refer to those industries again in this article.

As far as tourism goes, what more do they want? If ever there was a lazy industry that has to be weaned off the public teat that has to be it. We've given them the Olympics and the Rugby World Cup three years later. The renovation craze that swept pubs, licensed clubs and people's homes has bypassed the tourism sector. They are still relying on products from another age as good enough for the likes of us, still keening for Americans when millions in Asia have the time and the money to come see us but aren't being pitched to by dull-witted government tourism bureaucrats and the spivs they notionally serve.

Workplace reform and productivity gains will be key.

No they won't, they'll be fiddling at the margins. As I said recently, if the employees at Bluescope worked for nothing it would still be run into the ground.

But at the same time, Australia has a unique opportunity.

Yes it does. That's Josh's code for "let's move on from hard issues".

We must save some of the proceeds of the boom and invest them for a time when they are needed most.

When will that time come? How will we know when it has arrived and what does Maximum Need look like?

Are the guys who rolled over so completely on the mining tax really the guys who'll stand up and demand a sovereign wealth fund? Are they strong enough to fend off vested interests from pecking it to death?

Imagine we had a sovereign wealth fund today:

• Should we have given SWF money to the flooding of our third-biggest city? You'll remember how the Coalition wailed about a flood levy.


• Should we have given SWF money to build education facilities? What if we could guarantee those projects had a 97% acceptance rate?


• Should we give SWF money to high-speed rail? What about the Christchurch quake victims or those burnt out of Marysville? Maybe a Tasmanian AFL team (you know, productive assets).

Let's look at those engines of global growth, China and India. What are they investing in? Infrastructure: roads, rail, optic fibre networks, education, urban communities. What are they not investing in? Shutting apples out of import markets, and whatever other pissant measures that Josh and his pals consider to be extremely important.

Why not actually invest in productive assets directly? Why bother setting up some Great Artesian Fund that just second-guesses speculative investments? Why not identify major projects that promise a productive return to the country as a whole, and invest in those? We have a number of shocking roads in Sydney that were built by merchant bankers, there is no reason why we can't have better infrastructure funded directly from mining income.

International experience indicates that a sovereign wealth fund for a commodity-driven economy like ours could be an appropriate vehicle towards this end.

Sovereign wealth funds are not new. Kuwait established one in 1953, Abu Dhabi in 1977 and Norway in 1990. Owned by the government, these funds and others like them in Chile, Russia and Qatar hold, manage or administer a diverse set of financial assets in the pursuit of commercial objectives.

It's hardly a ringing endorsement to say that a SWF "could be appropriate". You'll notice that Josh has neglected to mention the SWFs in France and Ireland, which are stuffed chock-full of - um, what?

A sovereign wealth fund can perform a number of different functions: it can be the source of long-term wealth creation, otherwise known as intergenerational equity, or have a shorter-term objective to stabilise revenue cycles.

In the case of the former, when the finite resources run out, future generations will still benefit from the wealth created.

This can be done by investing directly in productive assets. Texas and California have pretty much run out of oil but they still have the educational institutions and the hi-tech economies that came from shrewd and direct investments. God only knows what those states would have spent a SWF on.

And in the case of the latter, when commodity prices take a downward turn, there will be money available for governments to call on should it be required.

Just like Ireland and France.

In both instances countries that use the significant reserves of a sovereign wealth fund to invest offshore may see downward pressure on their exchange rate ...

May see? First he's ambivalent about whether it's appropriate at all, now he's not sure whether it will have any sort of effect of the kind so often advanced as a prime reason to set up a SWF. Don't go cold on us Josh!

In terms of determining the best fit for Australia, Chile's sovereign wealth funds are quite instructive. In 2006, they morphed their existing Copper Stabilisation Fund into two new funds: first, a pension/savings fund, which they seeded with $600 million and which receives 0.2 per cent of the previous year's GDP on an annual basis.

In the event the fiscal surplus is greater than 0.2 per cent, the fund can receive a maximum of up to 0.5 per cent of GDP. Significantly, no withdrawals are allowed from this fund for the first 10 years.

The second fund, which began with $5bn and now has more than $20bn, is the recipient of fiscal surpluses when they are above 1 per cent of GDP.

Given Chile's strong commodity-based economy, both these funds are designed to provide the government with fiscal flexibility should the commodity cycle turn.

Why two funds? If the first is about pension/savings, what does the other one do? Why are commodities less valuable depending on whether or not the government has a surplus? How is Chile's manufacturing and tourism bearing up under all of this: thriving, is it?

I could look up the answers to all those questions but I'm not the one making the case for an Australian SWF. Given that the government can't withdraw money it doesn't provide any sort of flexibility: it isn't an option.

Domestic superannuation fund is not a sovereign wealth fund as [Shorten] likes to tell us. It provides no insurance against a downturn in the commodity cycle; nor does it impact the exchange rate in the way a major sovereign wealth fund can.

Australia's superannuation is the fourth-largest such fund in the world and keeps on accruing so long as fund members stay employed. It is possible that unemployment could rise coincidentally with a commodity price fall but the two are not linked. It's worrying that the exchange rate impact still seems to be a matter of theory rather than fact.

Joe Hockey has called the sovereign wealth fund idea the "Maserati of public policy".

What could this mean? It's flashy, all the merchant bankers want one but it breaks down regularly?

the Coalition, when last in government, put in place a Future Fund to meet the unfunded superannuation liabilities of commonwealth public servants ...

That was from the sale of Telstra, and why were those liabilities unfunded in the first place?

... now, five years on, Australia should actively consider a new, broader sovereign wealth fund as a means of securing its long-term economic interests.

But are our longterm economic interests really served best by measures other than investment in infrastructure?

This could be the answer to the great gaping hole where the heart of the Liberal pitch at the next election should be. If they are going to cut $70b from the budget then they can't promise much (well, they can if the press gallery keep letting them get away with it). When BHP Billiton announced a record profit immediately after crying poor over a RSPT, and when miners celebrated their great victory by squabbling amongst themselves, the idea of getting more money out of our finite resources took on considerable popular appeal. Thankfully, though, Josh is pushing it back on the list of priorities:

Before establishing a sovereign wealth fund, a number of relevant issues would need to be canvassed around governance, mandates and the overall opportunity cost involved.

Crucially, it would also be necessary to first return the budget to surplus and pay down Labor's $107bn of government debt.

He's run this idea by Joe Hockey and it hasn't exactly been seized upon with inarticulate cries of delight. Any idea, good or bad, can be shunted to the back of the queue with this fixation on debt and deficit. Hockey saw how Peter Costello established his authority over Howard's ministry in '96 by telling them what they could and couldn't do with their shiny new portfolios, and he wants some of that for himself. That imperative has clearly come ahead of one big idea that could lend a bit of credibility to promises in need of funding (or the appearance thereof).

Watch for the idea of a sovereign wealth fund to become more and more prominent from the Liberal side. Any idea floated by Turnbull and Frydenberg has deniability for The Situation; candidates will be unable to help themselves in indicating that it might be a good idea, allowing Liberals to claim the appealing aspects without facing the scrutiny that comes from an official policy (assuming, of course, that the press gallery get back into the business of scrutinising what the Liberals come out with).

In terms of the rights and wrongs of a SWF I had to go hunting for stuff like this. It was simply not possible to trust Josh Frydenberg and his half-baked equivocations on this important issue. As with nuclear power, a SWF needs to be highly and forcefully regulated in the face of powerful interests. Josh isn't the man to do that or even propose it with any credibility.

This isn't to say that the idea is dead, far from it; Frydenberg has a reputation as a thinker and a smart operator among the journosphere, provided you have no experience of thinking nor any sense for a tragedy waiting to happen. In this environment a sovereign wealth fund is an easy sell. Expect the Liberals, their camp-followers in the press gallery and more than a few Queenslanders to be all over it.

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