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Call for new approach to Asia relations

AUSTRALIA’S political leaders have been criticised by some of the most senior foreign policy advisers for clumsy handling of relations with Asia and slavish devotion to the US alliance.
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A conference held in the NSW Parliament yesterday by the Australian Institute of International Affairs, a federal government chartered and assisted body, heard calls from eminent diplomats for a more balanced approach to the rise of Asia.

The institute’s national president, John McCarthy, who has been Australia’s envoy to Washington, Jakarta, Tokyo and New Delhi, said Australians should not let themselves be led to think they have to choose between new ties with China and the military alliance with the US.

Most thinking Australians supported the ANZUS treaty alliance with the US, making it difficult to change ”even if we personally disagreed with aspects of it”, he said.

”But there is a lot to be said for paying our alliance dues only where it is strictly necessary in terms of the alliance – we don’t necessarily have to please the Americans, as it is often put,” he said. ”We have to honour the terms of the alliance, as a responsible ally will do [but] not say things or offer things that really aren’t necessary.”

He said the the announcement last November that the US would station 2500 marines in Darwin for six months every year was an example of what could have handled better. ”The Chinese and the Indonesians could have been forewarned, very seriously, two or three days before, and explained very very carefully at a very senior level what it all meant. None of that was done.”

This story Administrator ready to work first appeared on Nanjing Night Net.

Still in the dark, with governor on the defensive

Defensive … the Reserve Bank governor, Glenn Stevens, before the House of Representatives economics committee in Canberra yesterday.THE testimony given yesterday by the RBA governor, Glenn Stevens, about the Reserve’s handling of the bank-note bribery scandal was faltering, defensive and, at times, evasive.
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It was in keeping with Mr Stevens’s past appearance at the committee and highlighted again the need for a proper inquiry into the affair.

Mr Stevens was asked about briefings given to senior officers of the RBA in 2007 about bribery and corruption in its subsidiaries.

The facts are clear. A briefing was given to the RBA deputy governor Ric Battellino by Brian Hood, the company secretary of RBA firm Note Printing Australia. The briefings raised serious allegations of bribery and corruption, including the claim that a Malaysian agent was paying off politicians.

Earlier this month, the federal police told Parliament it expected serious bribery allegations received by a Commonwealth agency to be reported to police.

But the RBA didn’t call in the cops in 2007. The AFP were only called after it was reported by the Herald and The Age in 2009. Even then, the RBA didn’t immediately hand over a damning 2007 memo written by Mr Hood.

And, for the past five years, the RBA has chosen not to tell the public or Parliament about the 2007 briefings, even when the opportunity begged.

Instead, Mr Stevens has stuck to the line that the RBA was in the dark about the alleged bribery in its subsidiaries until the 2009 media expose´.

This week, the Herald and the ABC demolished that claim by publishing the contents of the 2007 briefings. The revelations expose a major corporate governance failure at the top of the RBA, as well as an inability to be open about this failure.

At the economics committee yesterday, the Liberal MP Tony Smith asked Mr Stevens when he’d read a 2007 corruption memo addressed to his then deputy, Mr Battellino.

Mr Stevens said that, according to his memory, he didn’t read it in 2007 but may have later.

He thought Mr Battellino “may have been shown a copy at some point”, despite the fact that the memo was addressed directly to him. But Mr Stevens said he couldn’t be “certain of that.” Despite the intense media pressure surrounding the issue earlier this week, Mr Stevens said he hadn’t spoken to Mr Battellino in the last few days.

Mr Stevens couldn’t recall if he was told about Mr Hood’s 2007 meeting with Mr Battelino prior to it occurring. Asked if he had read the memo in the lead-up to his February committee appearance, Mr Stevens couldn’t recall.

When asked by Mr Smith if it would have been in the “interests of openness” for Mr Battelino (who retired in February) to have told the committee during previous hearings about the explosive 2007 briefings, Mr Stevens answered: “I didn’t myself feel that that particular event was of the importance that you seem to feel it is.”

This was a remarkable answer: the “particular event” Mr Stevens felt was unimportant involved a senior company executive exposing details of the most serious scandal to hit corporate Australia in decades.

After just several minutes of questioning by Smith, Mr Stevens was thrown a Dorothy Dixer that would make any backbencher proud. Committee chair and Labor MP Julie Owens clumsily tried to give Mr Stevens an out by stating that his past claim that the RBA knew nothing about corruption prior to 2009 had been misrepresented.

Ms Owens claimed that because the RBA corruption briefings in 2007 dealt with Note Printing Australia and not Securency – and because Mr Stevens was responding to questions about Securency when claiming the RBA knew nothing – he was in the clear.

But Mr Hood’s 2007 briefings to the RBA dealt with NPA and Securency. His memo clearly stated that both firms were using a potentially corrupt Malaysian middleman.

Mr Hood’s briefings also stated that Graeme Thompson, the chairman of NPA, had authorised a payment to this middleman despite probity concerns. Mr Thompson was also the chairman of Securency. The 2007 briefings also accuse Chris Ogilvy, who was the chief executive of NPA and a director of Securency, of malfeasance.

But, instead of ensuring Mr Stevens faced appropriate oversight in her role as committee chair, Ms Owens went in to bat for him. In doing so, she appears to have followed the lead of the Treasurer, Wayne Swan, whose three-years-and-counting response to this growing scandal has been to say nothing and do nothing. By not confronting the unpleasant questions about the RBA and other government agencies that flow from this scandal, the Gillard government is rapidly becoming part of the cover-up.

This story Administrator ready to work first appeared on Nanjing Night Net.

PM tries to tame beast risen from the grave

“Indeed, every union has what it refers to as a re-election fund, slush fund, whatever, which is the fund that the leadership team … puts money so that they can finance their next election campaign” … Prime Minister Julia Gillard.What’s in a name, Shakespeare’s Juliet doth often ask. For shaken Julia, it seems, the answer is quite a lot. Indeed, just what is in the public understanding of ”re-election slush fund” may well determine whether the Prime Minister can extricate herself from swirling allegations that she acted improperly while a solicitor two decades ago.
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If she cannot, her critics will claim vindication in their portrayal of Gillard as a person of questionable trustworthiness and poor judgment. Her electoral stocks will further suffer. If she can knock the allegations into a cocked hat, Gillard will get her head above the parapet probably for the first time since the equivocal election, although she and Labor won’t be out of the woods.

Until a week ago, with mixed success, Gillard employed stonewalling, indignation, intimidation and haranguing to keep her accusers mostly quarantined to internet blogging in the matter we will attempt to outline here. Last year, she scored a humiliating triumph over mainstream journalists who attempted to report suspicions against her. But she didn’t count on her sacked attorney-general Robert McClelland opening old wounds about the extent of union corruption and recent corroboration from people well placed to challenge Gillard’s clean-sheet approach.

As a Slater and Gordon solicitor in Melbourne, Gillard advised her then boyfriend – an Australian Workers Union rising star, Bruce Wilson – on constructing a union facade, the Australian Workers Union Workplace Reform Association, from which Wilson and his AWU sidekick Ralph Blewitt allegedly misdirected hundreds of thousands of dollars.

The association’s stated purpose – at least according to a 1992 public notice – was to promote and encourage ”workplace reform” in construction and maintenance. But it wasn’t used for workplace safety and training. Gillard acknowledged this week she thought it was intended as a union leadership re-election fund where levies on union officials, and the proceeds of fund-raising dinners and so on, could be safely deposited.

In 1995, she confided to senior colleagues that the association was a ”re-election slush fund”. ”It’s a common practice,” she told them. ”Indeed, every union has what it refers to as a re-election fund, slush fund, whatever, which is the fund that the leadership team … puts money so that they can finance their next election campaign.”

On Thursday, Gillard conceded her slush fund reference, uttered in the context of a casual and jovial conversation, ”wasn’t the best form of words”. ”But I’d ask people to assess the form of words in the context in which it was being used in a sentence where the description of the purpose of the association, as I understood it, is exactly the same as the description I’ve given you here today,” she told journalists.

Gillard said her description was not inconsistent with workplace safety aspirations because they were key goals of the union leadership ticket.

Instead, Wilson and Blewitt extracted big deposits from construction and resource companies employing AWU members. Initially, the national AWU knew none of their activity but subsequently notified police of its suspicions and went so far as demanding a royal commission, a call that fell on deaf ears in the Keating government.

Wilson and Blewitt allegedly used the money as a sort of private bank account, buying a house in Melbourne’s Fitzroy, after Wilson moved from Perth, and spending on other activities unrelated to the association’s given purpose.

Wilson, who works as a part-time club cook on the mid-north coast of NSW, and Blewitt, who fled Australia for Indonesia (where he is accused of a land swindle) and Malaysia, have been investigated by police in Perth and Melbourne. Documents reveal Perth detectives wanted them charged but could not convince the builder Thiess to co-operate. Wilson and Blewitt have not been charged but the latter has told The Australian newspaper that ”sham” transactions took place and that he will tell all in return for indemnity from prosecution. An AWU civil action against Wilson went nowhere.

Gillard claimed on Thursday her role was limited to advice and not to execution, that she did not know what improper use Wilson and Blewitt would make of the entity she helped establish, and that she severed the relationship with Wilson in 1995 when ”I became aware that I had been deceived about a series of matters”.

Much of the more salacious, zany and explicitly offensive commentary (and invention) has been restricted to internet ranting – to what Gillard called misogynists and nut jobs. That is not a description neatly befitting Peter Gordon and Nick Styant-Browne, two former senior partners at Slater and Gordon, however.

Together, they are the source – intentionally or otherwise – of much of the fresh revelation. Gillard’s handling of the AWU matter angered some of her senior colleagues and she was interviewed on September 11, 1995, by Gordon and another as part of an internal investigation.

According to a transcript of the interview, Gillard conceded the renovations to her inner Melbourne home might unintentionally have benefited from the rorted union funds, although she doubted this. She provided receipts to show the renovation work was paid by her.

In a Peter Gordon-leaked draft statement, the former Slater and Gordon principal said last week the firm considered terminating Gillard’s salaried partner position but accorded her the benefit of the doubt and accepted her explanations. ”Nevertheless, the partnership was extremely unhappy with Ms Gillard, considering that proper vigilance had not been observed and that [her] duties of utmost good faith to [her] partners, especially as to timely disclosure, had not been met. Ms Gillard elected to resign and we accepted her resignation without discussion.”

But a statement by Slater and Gordon’s managing director Andrew Grech said Gillard took leave of absence at the time to contest unsuccessfully a Senate election and, in May 1996, resigned to become chief of staff to the then Victorian opposition leader John Brumby. Said Gillard on Thursday: ”It had long been an aspiration of mine to move to a political career so I made the determination to resign from Slater and Gordon.”

This story Administrator ready to work first appeared on Nanjing Night Net.

Royal reputation, a flash in the pan

Prince Harry. In the Nude. In Las Vegas. Pratting about. Just about the second after the Queen had finally managed to reinvigorate respect for the royal family with her goodnatured participation in the London Olympics (and, indeed, her own diamond jubilee) along comes flashing Harry, caught on camera disporting himself in a manner unbecoming. He was snapped while allegedly playing ”strip billiards” and while one assumes royalty has always found a way to have its own kind of fun in the past, the sight of Harry once more looking less the senior royal statesman and more like an extra from American Pie VIII was too much for the Palace. It tried to have the two offending pictures banned from the US celebrity website on which they first appeared. To which the world said: Barn Door. Horse. Bolted …
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Speaking of diplomacy – the week kicked off with celebrity publisher and international information ”fence” Julian Assange stepping onto the balcony of the Ecuadorean embassy in Knightsbridge, London, and pleading earnestly to be left alone, especially by the US government. Good luck. The US has a terrific record of flexibility and leniency on the issue of national security, as Bradley Manning, incarcerated for more than 800 days without trial, will attest.

At home the big news was that the mining boom was suddenly over – the Resources Minister, Martin Ferguson, was sure of it, after BHP shelved its Olympic Dam mine expansion. Ferguson probably just meant that it had peaked but once he’d put the grey cloud in the political sky everyone rushed to give their own interpretation. The Finance Minister, Penny Wong, thought the cloud was more off-white than grey, saying the boom had a long way to run. On the other hand, Julie Bishop and Tony Abbott, in galoshes and sou’westers, declared the cloud evidence of a big storm approaching, with Abbott asking ”How can you have a government whose policy is to spread the benefits of the boom, now that the boom is officially over?”

One person for whom at least the fun of the boom might have peaked was mining magnate Nathan Tinkler. It was revealed on Monday his horse racing company. Patinack Farm, had failed to meet its employees’ superannuation payment since November, and those employees were on the verge of mutiny.

Channels Seven and Ten were on the verge of apoplexy when a last-minute deal saw Channel Nine and Fox win the rugby league TV rights. Seven had come close to a winning bid that would have meant up to four live games a week broadcast free-to-air, as opposed to the mere one we are stuck with. State of Origin matches will remain on Wednesday nights, the issue of mobile broadcasts remains unresolved with Telstra, and Nine will continue to pick and choose which game and what time it will screen matches.

After the deal it was said of Nine’s chief executive, David Gyngell, that he had done ”a Packer”. If so it wasn’t half as impressive a Packer as realised by Lachy Hulme in Howzat!. Hulme gave us a fearsome, fearless unstoppable Packer. Nearly 2.1 million viewers watched the first episode of the two-part drama for Nine, a figure Kerry would have approved. Kerry Packer was Australian royalty of a sort: rich, brash, of the people – and certainly no Flash Harry.

This story Administrator ready to work first appeared on Nanjing Night Net.

The stuff of dreams … punked-up Prospero with ray guns

TOP hats, leather masks, cyborg eye sockets and corsets will take over the stage in a ”Steampunk” cabaret recreation of The Tempest, as part of this year’s Sydney Fringe Festival. It’s Shakespeare meets ’90s film Wild Wild West in an adaption that combines a 400 year-old play with a growing modern subculture to explore humans’ love affair with technology.
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”Steampunk”, influenced by Victorian-era fashion garnished with brass accessories resembling gadgets from science fiction fantasy, forms the basis of John Galea’s contemporary adaptation of one of Shakespeare’s last works.

”It’s Victorian-era but not as you know it. Ray guns, Tesla coils, cogs, goggles and airships,” the director and producer John Galea said. ”Steampunk is where you have the same sort of post-modernist mash up going on, but it’s more in the Jules Verne clockwork machine, an alternative Victorian-era history.”

Galea initially prepared to stage The Tempest in a sci-fi setting, in the vein of Star Wars or Star Trek, but adopted a ”Steampunk” theme after attending a cabaret party.

”For any other Shakespeare, it may not work but because The Tempest is a fantasy to start with set on a tropical island, it lends itself really easily to that change of scene,” Galea said.

It took little time for the unusual setting to be adorned by the actors, who knew little of the subculture before auditions.

”I didn’t know much about it until now but when we did a fund-raiser for this a few weeks ago, it attracted so many people who dressed up in Steampunk and they looked amazing,” the actor Bernadette Galea said. ”I quite like wearing a corset now.”

Speaking at a final dress rehearsal at Rosebank College, Five Dock, the actor John Michael Burdon who plays Caliban, as a cyborg-like creature, believes the theatricality of Steampunk feeds into the element of fantasy Shakespeare created when writing The Tempest in 1611.

”I think because of the magical element and that they’re deserted on an island, it gives the illusion that it’s in another world. Burdon said. ”I think a lot of people who play The Tempest play into that magical world.

The Tempest is running from the August 29-September 8 at Sidetrack Theatre, Marrickville as part of the Sydney Fringe Festival.

This story Administrator ready to work first appeared on Nanjing Night Net.

After the boom, the main game

Australia’s mining boom was never going to last forever.
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Tucked away in the budget papers two years ago were estimates from Treasury and Geoscience Australia about how long each of the nation’s minerals would last. Iron ore was set to run out in 70 years at the current rate of extraction, gold in just 30 years. Black coal would last longer – 90 years, meaning many very young Australians will still be alive when the last known lumps of black coal are dug from Australian soil and thrust into furnaces.

Treasury was careful to say its estimates weren’t definitive. Higher prices could ”encourage greater investment in exploration activities and new discoveries”. But its message was clear: mining would be unable to power Australia’s economy forever. Sooner or later – within one lifetime or maybe two – we would have to face up to the question of what comes next.

It’s the sort of question Australia has faced in the past. Those who grew up in the 1950s were forever being told the nation rode on the sheep’s back. Back then the farm sector accounted for one-quarter of Australia’s production. Today it accounts for a little over 2 per cent.

For the most part that transition away from agriculture has been managed smoothly (although for a while woolgrowers tried to stare change in the face by legislating a floor price for wool, with disastrous consequences). The subsequent decline of manufacturing has been more painful, mainly because of the number of people employed. In the 1960s manufacturing provided jobs to one in every four Australian workers. Today it employs just one in 12.

On Thursday, the Resources Minister, Martin Ferguson, appeared to ring in the next change. Speaking to the ABC’s AM program after BHP shelved plans to

build what would have been the world’s biggest uranium mine at Olympic Dam in South Australia’s arid north he declared the boom over.

”It’s about time Tony Abbott stopped talking down Australia both at home and internationally and recognised how well placed we are,” he said.

”But you’ve got to understand, the resources boom is over. We’ve done well – $270 billion in investment, the envy of the world. It has got tougher in the last six to 12 months. Look at Europe, the state of the European and global economy. Think about the difficulties in China, with still strong growth. The next round was always going to be difficult and I must say Olympic Dam was always a very, very challenging project – its sheer size.”

The Prime Minister rushed to reassure the public that Ferguson hadn’t meant to say what it sounded as if he had.

”He has indicated that prices have come off a bit – or, if you like, that the commodity price boom has passed its peak,” she told Parliament. ”But there is a huge investment phase with still some way to run and the export boom in resources still has a very long way to run.”

The simultaneous industrialisation of the world’s two most populated nations – China and India – has decades to run. Another 1.1 billion Asians are expected to move to cities over the next 30 years and they will require housing and supporting infrastructure. The Reserve Bank has estimated a typical Chinese apartment requires about six tonnes of steel, while 10 kilometres of metropolitan subway requires about 75,000 tonnes. Each tonne of steel produced requires about 1.7 tonnes of iron ore and more than half a tonne of coking coal.

But the plummeting mining profits and shelved resource projects have underscored the need for Australia to prepare for a time when it must rely on a different mix of exports, mostly knowledge-based services.

Resources exports have forged deep economic ties between Australia and Asia. But the mining boom may just be the prelude to the main game of Asia’s economic emergence. By the middle of this century, more than half of the world’s economic activity will occur in Asia.

This landmark shift creates economic possibilities unimagined even a decade ago. As the region’s middle class becomes richer, demand for a long and different menu of Australian exports including foodstuffs, tourism, education, financial services, business services, professional services and niche manufactures will steeple.

But the shift from selling Asian customers bulk commodities such as coal, iron ore and gas to the far more nuanced task of exporting a wide range of goods and services into diverse Asian markets won’t be easy.

”It is one thing to sell a homogenous minerals commodity to a minerals-hungry industrialist in China, and another thing entirely to design and market a sophisticated personal service to someone living in that culture,” the former Treasury secretary Ken Henry said in a speech to business this week.

Australians have become much more aware of Asia, especially through holiday travel. But experts warn our knowledge is superficial. Even though so many more of us are travelling to Indonesia and other south-east Asian destinations there are fewer students studying Indonesian now than in the 1970s.

A recent business survey found less than half of Australian businesses with dealings in Asia have any senior executives or board members with Asia experience or language ability.

Asia’s middle-classes are emerging as the world’s biggest consumer group but many of them won’t speak English. They will also have business cultures and political systems very different from Australia’s.

Henry, who is writing the government’s white paper on preparing Australia for the Asian century, says the nation needs to build its ”Asia-relevant capabilities”.

It will be crucial that Australian students gain a much deeper understanding of the culture and languages of Asia.

Businesses will also need to think differently. Many firms that are defined as Australian will have to start looking at themselves as regional and be willing to move components of their business to Asia in order to survive.

The Prime Minister and the Resources Minister are both right. The resources boom has ended, but only in a limited sense, for now.

It was kicked off last decade by an explosion of urbanisation in China. The first impact was to ramp up prices. With Australia and suppliers in Brazil and India ill-prepared, the only way China could get the iron ore it needed to cater for its rapidly expanding cities was to bid up the price from a long-term average of about $US13 a tonne in 2002 to an extraordinary $US180 a tonne by 2011.

For Australian miners the undreamt of price was pure profit – they hadn’t needed to spend an extra cent to get it, which is why Kevin Rudd and Wayne Swan wanted to tax some of it away as super profits.

The price boom begat the investment boom as resources companies scrambled to mine more of the stuff. The investment boom is boosting the economy in its own right, drawing in billions in overseas capital and employing more workers constructing mines than will eventually be employed operating them.

But as miners across the world have ramped up production, prices have eased.

A year ago iron ore was fetching about $US180 a tonne but yesterday the price slipped below $US100 for the first time since the global financial crisis.

Investment will turn down soon. The Reserve Bank governor, Glenn Stevens, told Parliament’s economics committee yesterday he expects investment spending to peak ”within the next year or two” although it will remain at an unusually high level for a long time.

Big investments in gas production means exports are set to quintuple by the end of this decade.

But Peter Coleman, the chief executive of Woodside Petroleum, Australia’s biggest gas producer, says that as commodity prices fall miners are becoming more cautious about investments.

”We’re just seeing a natural part of the cycle to be honest, it’s kind of like that long wave that comes into the beach, it’s starting to break, that’s what commodity cycles do, and then we’ll pick up another one here soon, it just depends on picking the right one.”

But even if the resource price boom is over and the resource investment boom coming to an end, our resource income boom still has some way to run.

This payoff from the investment boom – the extra resources Australia is able to ship out of the country – will stay with us for decades.

After China will come India. China has just passed a historic milestone: one half of its population now live in cities. India’s rate of urbanisation is just a third so it has a long way to go. In the past 15 years India has shot up from being the world’s 10th-biggest steel producer to the fourth.

While India is blessed with vast reserves of its own high quality iron ore, it is desperately short of the coking coal traditionally used to turn it into steel. Australia, with its abundant stocks of coking coal, looks to be in the box seat once more. It already exports more coal to India than China.

Even so, a director at Deloitte Access, Chris Richardson, says there could be a ”tricky phase” for the Australian economy as commodity prices fall and we wait for recent investment in mining capacity to come on line.

”In late 2014 going into 2015 we are going to have to change gears from construction as an economic driver to export earnings,” he said. ”There could be a pothole. We don’t know how big it will be.”

Some parts of the economy will benefit as the effects of the mining boom fade a little. The Australian dollar will probably fall providing a boost to important sectors that have been badly affected by the high exchange rate like tourism, education and parts of manufacturing and retail. The firms in those sectors that have weathered the effects of the soaring exchange rate are likely to thrive if the dollar pulls back.

Meanwhile, Henry says there is no room for complacency. Australia should waste no time adapting and reforming its policy settings to make the most of opportunities beyond the mining boom.

”It would be a mistake to think that geography and/or geology alone will get us where we want to go and allow Australia somehow to ride the wave of the Asian century around us,” he said.

with Paddy Manning

This story Administrator ready to work first appeared on Nanjing Night Net.

For richer and poorer, the battle goes on

Illustration: Simon Bosch.The chief executive officer of ANZ bank, Mike Smith, whose annual salary converts to about $27,400 a day, thinks people on unemployment benefits of $34 a day get too much.
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His prescription for prodding the jobless to move to the salt mines of Western Australia is to cut the fat from a stipend so stingy that paying the rent and eating are mutually exclusive. It’s too sad.

As I write my last column for the Herald – a gig I started as a freelance journalist in 1988, six years before I joined the staff – I am moved to wonder: has anything changed?

I began trying to make sense of the world in these columns in the decade when Greed was Good, when Alan Bond and Christopher Skase were household names, and when inequality, after a long period of quiescence, was taking off like a race hound.

In the time since then, the ratio of CEO pay to the pay of an average worker has quadrupled.

We are a harder, more individualistic, self-reliant and overall richer society. Some things have changed for the better. But some problems are depressingly familiar from a quarter of a century ago.

Public understanding about people stuck at the bottom is still mired in the old stereotypes of ”dole bludger”, ”beach bum” and welfare cheat.

Smith’s remedy might make more sense if the Newstart Allowance were generous, and thus a disincentive to taking a job, instead of a below-poverty-level payment.

If the unemployed comprised only fit young men, starving them into mobility might be worth it. But the unemployed include young and older women, people with mental illness and intellectual disabilities, and physically worn-out older men, all unlikely to move to the mines no matter how low Newstart goes.

Harsh and simplistic solutions to complex social problems are still trotted out by the rich and powerful whose encounters with the lives of the poor are usually non-existent.

It is the same story in the schools debate. Twenty-four years ago I wrote, ”If state schools are to avoid their fate as repositories of the poor, and thus electorally dispensable, the middle class must be wooed back.” They weren’t.

The Gonski report presents a compelling economic and social argument for equalising opportunities for children in public schools. No subject is more important than improving the life chances of poor children through the best education possible.

But the debate appears lost, as the Prime Minister, once dedicated to the cause, panders to a middle-class with kids in private schools who consider themselves hard-up. She promises to give extra funds she doesn’t have to wealthy schools while the Opposition Leader claims rich schools are the true victims of funding injustice. Plus c¸a change.

Mandatory detention of refugees began in 1992 under then prime minister Paul Keating. A lot of us overlooked the development in far-away Port Hedland at the time. All these years later, harsh treatment of refugees of a kind we know is bound to cause mental illness and suicides remains our only response, and the ”regional solution” is no closer.

Journalism students doing assignments have sometimes called to ask me if I thought my work made a difference. ”I don’t know,” I tell them. ”Maybe it’s like drops of water on rock.” Some issues and problems are perennials and solutions elusive as ever.

Yet I don’t write about the ”mummy wars” any more. Mothers, sooner rather than later, make their way into the paid workforce, and not even Tony Abbott will stop that tide or reignite the old ideological divide. Young girls are outsmarting boys; young men are kinder, more dedicated fathers, and more conflicted about the long-hours culture.

But the work/life balance still favours men. Workplaces have not changed fast enough to accommodate the needs of children. Women’s talents and ambitions are sacrificed for the family, and men’s relationships are sacrificed for the business, just as they were when I began writing. The feminist dream of men and women sharing equally the pleasures and responsibilities of the traditional gender spheres is still a long way off.

In this column, I have banged on about gender and economic inequality but I have also shared the birth of my sons, now adults, my breast cancer, my mother-in-law’s dementia, my father-in-law’s falling in love at 83, and my mother’s living will.

I have been paid for my opinions, a privileged way to earn a living now that opinion is free on the blogosphere, and everyone is a commentator. I have been allowed to write about the unemployed, single parents or the price of bananas when everyone knows the way to get hits online and prove your popularity is to mention oral sex. (There, I’ve mentioned it.)

Recently I have found myself writing more about death and ageing than childbirth or childcare. I was of the generation that helped transform the culture and change attitudes to women’s rights, gay rights and sex. Now my generation is starting to redefine ageing and retirement. We’re learning how to shape a useful and pleasurable life after we have left behind the office, the full-time job, and the deadlines.

So this is my last column. I leave the Herald with thanks to my loyal readers and my astute critics. I’m letting go in the nicest sense of the word; not to spend the day in a dressing gown but to think, write, participate, and to engage with my generation in a different way. Thanks for sharing the ride.

[email protected]南京夜网.au

This story Administrator ready to work first appeared on Nanjing Night Net.

Global retail chains link up Down Under

International appeal … Jemma Baines wears an outfit from Cotton On which showed its new CO. range during the Mercedes-Benz Fashion Festival yesterday.IN the 1960s, the Americans coined the phrase ”British invasion” to describe the arrival on their shores of rock stars such as the Beatles, the Rolling Stones and the Searchers.
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Almost 50 years later, Australians might invoke the words ”American invasion” to describe the retail blitz here by US chain store powerhouses such as Gap, Abercrombie & Fitch and the soon to open J.Crew, Sephora and Banana Republic.

Hip American brand Hollister will also hang out its shingle next year to sell its ”SoCal [Southern Californian] clothing for Dudes and Bettys”. The youth-oriented beachwear brand will be direct competition for surfwear labels such as Billabong and Rip Curl, and its arrival as part of the US invasion comes in the wake of European chains including the Spanish giant Zara and British high-street phenomenon Topshop. Cheap Japanese denim and cashmere chain Uniqlo and the Swedish fast-fashion retailer H&M also intend to open stores in Australia as part of global interest in retail opportunities here.

But why Australia? And why now, as other local brands continue to struggle in the economic climate?

The cynical answer is because there is hardly anywhere else left to go for brands such as Gap, Zara and H&M, which have colonised almost every corner of the globe from Delhi and Denmark to Moscow and Uruguay. Continuing expansion is key to the growth of such immense retailers that thrive on economies of scale, and despite the likes of Country Road blaming its 11.6 per cent fall in full-year net profits on ”extremely difficult” local retail conditions, compared with the faltering economies of Europe and the US, Australia’s is relatively strong.

Another factor is that companies such as Gap and Banana Republic put new global stores on the drawing board years in advance of their opening, and are more concerned with securing a lease on a prime site for the long-term than they are with short-term fluctuations in local markets.

We may lack the sophistication of more established fashion capitals such as Paris and Milan, but Sydney’s relaxed approach to style also dovetails well with the easy, breezy aesthetic of youthful American brands.

Much has been made of the supposed negative impact on Australian high-street chains by international arrivals, but the likes of Witchery, Country Road, Sportscraft and Oroton are not only all still trading, they have revitalised their product and are making a bigger deal of the Australian heritage.

And it’s not all a one-way high street. Local chain Cotton On has opened more than 800 stores in seven countries around the world, including 116 outlets in America and five in the United Arab Emirates.

The retail chain founded in 1991 in Geelong opened its first store in Thailand several months ago and will open in the Philippines in three weeks.

Yesterday, Cotton On showed its new CO. by Cotton On range on the runway during the Mercedes-Benz Fashion Festival Sydney, which it sells exclusively online as a more fashion-forward alternative to its core product offering of T-shirts, shirts and denim.

Instead of focusing on doom and gloom predictions for the fortunes of local retailers, you could argue the arrival of international high-street brands has helped our country’s shopping options evolve to mirror those available to consumers overseas. In a twist on the Starbucks and McDonald’s phenomenon, the same stores and brands are colonising the globe, resulting in a kind of United Nations of affordable fashion options and trends, whether you are in Australia or the US.

This, in turn, is generating an opportunity for indigenous labels to stand out internationally by offering a point of view and design direction that could not have come from anywhere else.

This story Administrator ready to work first appeared on Nanjing Night Net.

The third man

Hidden agenda … Whitlam looks on as David Smith reads the proclamation dissolving parliament. Sir Anthony Mason.
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As he will be in the shades of history when this is read, his role should be known.

-John Kerr

Sir John Kerr had been governor-general for just eight months when, in March 1975, he approached the vice-chancellor of the Australian National University with a confidential request.

Kerr put forward an unusual proposition – the formation of a group within the university to meet with him, in confidence and without the knowledge of the prime minister, and to advise him on the nature and extent of his powers as governor-general.

Kerr did not inform Prime Minister Gough Whitlam that he had sought advice from this hand-picked advisory group and Kerr never revealed the role played in the formation of this group by its most senior judicial figure, Sir Anthony Mason.

Mason was a sitting justice of the High Court, and a pro-chancellor of the ANU. He and Kerr had been ”close personal friends” since Mason first appeared as a junior counsel to Kerr in the 1950s, and it was Mason who drove the discussions with Kerr on the establishment of this advisory group, conferring directly and confidentially with the Governor-General about ”constitutional problems”.

Kerr’s request for confidential advice posed ”some difficulty” for Justice Anthony Mason, since the matters this group was likely to consider were those same controversial political and legal points currently the subject of intense political debate and that were also likely to come before the High Court.

Mason acknowledged his dilemma to Kerr:

“I have felt some difficulty as to my own participation in the discussions, for it may appear to some that we are engaged in the consideration of important questions which may sooner or later come before the High Court for decision,” he wrote.

“No doubt the questions which you have in mind are presently hypothetical. Unfortunately the hypothetical questions of today have a distressing habit of becoming the actual questions of tomorrow. I therefore doubt whether it would be proper for me to become a member of the group on a continuing basis.”

While expressing some doubt over his own involvement, Mason told Kerr that he would attend the initial meeting and ”refrain from expressing my opinion on questions which might become controversial”.

The group, variously described as a ”seminar” or a ”tutorial” for the Governor-General, met twice at the ANU during September 1975; Sir John Kerr attended with his official secretary, David Smith.

By October, with the opposition senators refusing to vote on the government’s Appropriation Bills in a bid to force a general election, it was clear the ANU was involving itself in matters of partisan political controversy with the Governor-General. Kerr was told their ”tutorials” would have to cease.

The end of his private tutorials did not signal the end of Sir John Kerr’s solicitations to Justice Mason. Before the opposition had taken action in the Senate against the government’s budget, Kerr had initiated, according to his records, a ”running conversation” with Mason to discuss ”probable future events and discretionary alternatives open to me”.

These records describe a series of strategic and undisclosed exchanges that continued through the mounting political crisis, marked by the extraordinarily close involvement of both Justice Mason and the Chief Justice, Sir Garfield Barwick, in Kerr’s final actions, and which ended only with the end of the Whitlam government itself.

Kerr later set out a detailed archival record of what had transpired between himself and Justice Mason and without which ”his part in my thinking in October-November 1975 will not … be known to history”:

“In the light of the enormous and vicious criticism of myself, I should have dearly liked to have had the public evidence during my lifetime of what Mason had said and done during October-November 1975 … [but] he would be happier … if history never came to know of his role,” he wrote.

“I shall keep the whole matter alive in my mind till the end, and if this document is found among my archives, it will mean that my final decision is that truth must prevail, and, as he played a most significant part in my thinking at that critical time, and as he will be in the shades of history when this is read, his role should be known.”

The scenario depicted in Kerr’s record dramatically recasts our understanding of these events and of the role of key individuals within them. This remarkable document presents a hidden history, now left for archival posterity as much for personal vindication as public illumination.

Kerr records that, at every stage in the fraught and apparently confidential discussions between the Governor-General and the Prime Minister during the month from October 12 to November 11, 1975, he was confiding every meeting and recounting every detail to Justice Mason, ”to fortify myself for the action I was to take”.

Sir Anthony Mason has refused to speak on these matters, despite repeated requests to do so. Whitlam was oblivious to it all.

The precise nature of Mason’s role in Kerr’s deliberations has never been revealed, either by Kerr or by Mason himself. In his memoirs Kerr referred cryptically to ”conversation with one person only other than the Chief Justice”.

Although speculation soon emerged that Mason was this unidentified ”third man” in conversation with Kerr, it would be another 20 years before he was identified as the ”third man” and as having spoken to Kerr during that time.

But Kerr’s records suggest that Mason was not merely the third man: he was, in many ways, the man. From their earliest discussions, months before there was even any Supply crisis in the Senate, Kerr records that it was Mason who met, talked with, planned for and counselled him, guiding him through his deliberations and advising him on the action he should take.

Of equal significance from Kerr’s detailed record is his depiction of Mason as providing a necessary bridge between Kerr and the Chief Justice, Sir Garfield Barwick.

In the years to follow, the more his own actions were questioned, the more eager Kerr became that Mason’s opinions and advice to him should be revealed: ”From my point of view it is unfortunate that they are unknown,” Kerr wrote.

Five years after these events, Kerr noted in his journal that he had renewed his plea to Mason to make his involvement public, and that Mason had again refused. Mason’s view, as he still maintained when pressed nearly 40 years later was, ”I owe history nothing”.

What is clear from Kerr’s detailed archival record of these discussions is that, even before Supply had been blocked, he had reached a decision on the critical element fundamental to the resolution of the political crisis that would engulf the Parliament and occupy much of his negotiations with both the Leader of the Opposition and the Prime Minister in the coming weeks.

Kerr accepted without question the existence of ”the reserve powers” – powers that would, if presumed to exist, enable the Governor-General to act independently, even against the advice of his elected ministers.

But the question of the existence of the reserve powers was not only the subject of intense legal debate, it lay at the heart of the political differences over the role of the governor-general. The advice proffered by the shadow attorney-general, Robert Ellicott, was that the reserve powers not only existed but that Kerr should act on them immediately and remove Whitlam from office from the moment Supply was blocked.

The government’s chief law officers and formal legal advisers to the Governor-General – the solicitor general, Maurice Byers, and the Attorney-General, Kep Enderby – firmly rejected Ellicott’s approach.

But from his own record of their conversations over this time, Kerr had not even received the advice of his legal advisers when he declared to Mason he would ignore it anyway, in favour of the advice of the shadow attorney-general.

Kerr had already decided he could act against Whitlam and his government as early as October 12, 1975, at the time of the first of his discussions with Mason when, Kerr’s archival record states, they considered ”probabilities, options and timing”.

On that day, when there was no crisis, no block in the Senate and, as Kerr himself noted, ”no conceivable ground for action on my part, supply not having been blocked”, Kerr resolved that he should not act yet, but that he should ”await further developments”.

By October 17, with Supply blocked for barely two days, Kerr was even more certain in his decision to act against the government. It was just a question of when: ”the real question at this time is whether I should act before the money runs out and whilst the Senate is still only deferring”, he noted.

The next week, as Kerr’s archival record presents it, he again met with Mason and on October 20 resolved to ”still follow the same line” and do nothing for the moment. According to Kerr’s records, it was at this meeting and again by phone the following day that he and Mason discussed for the first time ”the desirability … of seeking Barwick’s formal advice”.

The notion of the Governor-General seeking ”formal advice” from the chief justice, against the advice of the Prime Minister, was an exercise of unilateral vice-regal power, since the Governor-General’s formal adviser is the Prime Minister and his formal legal advisers are the solicitor-general and the Attorney-General.

At this point, as Kerr recorded it, Mason advised he should only approach Barwick once he knew ”what he would be likely to advise”. Barwick believed, as Ellicott did also, that Kerr should move immediately against Whitlam; ”Barwick … would advise immediate radical action – dismissal,” Kerr noted. Barwick therefore should be approached only once Kerr was ready to act.

The timing of this exercise was crucial and, according to Kerr’s record of their conversation, Mason cautioned that ”such advice [immediate dismissal] would be disastrous at this time”.

The next day Whitlam reminded Kerr that he was not entitled to seek outside advice, that ”I could get advice only through him”. Kerr ignored this directive and, according to his records, told Mason of it and continued to seek outside guidance.

Kerr’s actions represented a dramatic subversion of the role of the Governor-General in a parliamentary democracy as an appointed official who acted on the advice of his ministers.

Through this circular, self-referential process, Kerr was constructing an entirely new notion of an independent, unelected governor-general with literal and extensive powers, a view that was at odds with the democratic understanding of the role and certainly at odds with Whitlam’s unstinting trust and belief in him – personally and as Governor-General.

The interaction between Kerr and Barwick on this political struggle stretched back several weeks, to September 20 when Kerr was guest of honour at the annual dinner of the Order of St Michael and St George (a British order conferred for distinguished service overseas or in foreign affairs) in Sydney.

Kerr was seated next to Barwick and the two discussed the possible role of the Governor-General should the opposition senators refuse to vote on the government’s Appropriation Bills. Kerr asked Barwick whether he would be prepared to advise him on his own position and actions. The chief justice agreed.

Kerr’s consistent and repeated concern was for his own security, that the Prime Minister might advise the Queen to dismiss him as Governor-General if he knew that his own dismissal was being contemplated.

Kerr was presented with an unexpected opportunity to canvass his concerns directly with ”the Palace” in the unlikely setting of Port Moresby in September.

During Prince Charles’s 1974 visit to Australia, Kerr had discussed with him the possibility of Charles’s own future appointment as Governor-General, a proposal seriously considered in light of the lengthy time the prince was likely to wait before becoming king.

Kerr took this previous interaction to suggest a personal connection to the Prince of Wales and now, as the two met again in Port Moresby, the Governor-General took the extreme step of raising with the prince the possible dismissal of the Whitlam government and his grave fears that he would himself be dismissed by Whitlam should he do so.

Apparently oblivious to constitutional expectations, Charles replied, according to Kerr’s notes of their exchange, ”But surely Sir John, the Queen should not have to accept advice that you should be recalled at the very time, should this happen when you were considering having to dismiss the government”.

On his return to England, Charles took up Kerr’s concern with the Queen’s private secretary, Sir Martin Charteris. Unknown to Whitlam, who considered Charteris a friend, Charteris then wrote to the Governor-General just one week before the Supply crisis began, with equally remarkable advice.

Charteris told Kerr that, should what he euphemistically termed ”the contingency to which you refer” arise, the Queen would ”try to delay things” although, Charteris acknowledged, in the end the Queen would have to take the advice of the Prime Minister.

Neither Kerr nor the Palace ever revealed that, weeks before any action in the Senate had been taken, the Governor-General had already conferred with the Palace on the possibility of the future dismissal of the Prime Minister, securing in advance the response of the Palace to it.

Kerr’s letter dismissing Whitlam would be accompanied by a statement ostensibly from the Governor-General, setting out the reasons for his decision. According to Kerr’s archival record, Justice Anthony Mason’s role in the dismissal of the Whitlam government was complete with his authorship of this statement.

Kerr states that at their final meeting in Sydney on 10 November, Mason gave him ”a document … in his own handwriting”, to which Kerr added some material but otherwise used as his own words: ”that sheet as added to by me became incorporated in my final public statement”.

Thirty-five years later, when asked specifically about his authorship of one of these key dismissal documents, Mason refused to comment.

Kerr’s archival notes record that after forewarning his wife, Anne, of his intentions on November 9, he then called Anthony Mason and arranged to have another ”private talk” with him later that day.

“I began the conversation by saying that I had decided to dismiss the government, commission Fraser as a caretaker prime minister and get Parliament dissolved on Tuesday the 11th if the crisis was not resolved by then,” Kerr wrote.

Kerr says Mason replied spontaneously and with genuine relief, saying: “I am glad of that. I thought that I might this afternoon have to urge that course upon you.”

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Astor saga nears happy ending

Opening credits: Eighty-year-old cinema saviour and St Kilda businessman Ralph Taranto shows off his new acquisition.ST MICHAEL’S Grammar School has sold the Astor cinema, bringing to an end its much-maligned plan to redevelop the heritage-listed art deco building as a multi-purpose performing arts complex.
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St Kilda businessman Ralph Taranto has bought the Astor for an undisclosed sum believed to be less than the $3.8 million St Michael’s paid for it at auction in 2007.

”You’d have to spend about $20 million to build it today, but the return on it means it’s not worth much more than $2 million,” the 80-year-old Mr Taranto told The Saturday Age. ”I’m not buying it for the return, I’m buying it for the passion, the love.”

St Michael’s put a brave face on the sale, chairman of the board Paul Orton telling The Saturday Age that it was ”a terrific outcome for the school, for the community and for this wonderful historic cinema”.

But in a prepared statement the school blamed what it called ”misinformation” for a protest campaign that had drawn more than 13,000 signatures on change南京夜网 and torrents of abuse in social media, finally leading it to conclude that ”a shared community arts facility was no longer a viable proposition”.

Now, it seems, it’s as-you-were for the Astor, with Mr Taranto intending to leave the running of the cinema in the hands of George Florence, the man who has run the business since 1982. Asked if his intention was to keep it as a single-screen cinema, Mr Taranto’s response was simple: ”Oh God yes. I wouldn’t buy it otherwise.”

Settlement isn’t until October 31, but he is already lining up builders, plumbers and electricians to attend to urgent repairs. He also wants to consolidate the small shops at the front of the building, probably to create a cafe. ”I think there’ll be a big difference by next Easter,” he said.

This isn’t the first foray into the cinema industry for Mr Taranto. He worked for MGM in the 1940s and for Hoyts in the 1950s. He was in the fruit and vegetable business (he also owned a shoe store) but made his real money in property.

”I used to have about 60 flats in St Kilda and Elwood,” he said. ”Never had an agent, always used to collect the rent myself.”

He bought the Brighton Bay cinema, which he still owns (it is leased to Palace), in 1992.

In 1999, he put a deposit on the Walter Burley Griffin-designed Capitol Theatre in the city before buying the George Cinema in St Kilda instead.

Palace leased the George from Mr Taranto until 2010. In March 2011, he took it over himself and relaunched it as the Aurora, saying: ”It’s always been my dream to run my own cinema.” Eight days later, he closed it.

”I realised pretty quickly that for it to work I’d have to be there to run it myself. I thought, ‘This is madness’. I could do it, no problem – I’ve run businesses since I was 19 – but I’m 81 on New Year’s Eve. If I was younger I’d not have done that, but I want to be a bit free. While you’re still well every day’s a plus, that’s the way I look at it.”

(The George went to auction this month, but was passed in.)

With Mr Florence at the helm, Mr Taranto feels the Astor is in safe hands. So, too, do the Friends of the Astor. ”We’re delighted the sale has finally gone through,” said FOTA president Vanda Hamilton.

”We believe Mr Taranto will act in the best interests of the Astor and we look forward to speaking to him very soon in regard to setting up a trust to ensure that the Astor runs far into the future.”

Mr Taranto has not yet committed himself to setting up a trust to own and manage the cinema in perpetuity, a central plank of the FOTA campaign.

”That’ll come later. First I’ll own it, then I’ll fix it up, and then we’ll see what happens,” he said.

Mr Florence is confident it’s no more than a formality. ”It’s Ralph’s and my intention to form a not-for-profit trust, and he will bequeath the Astor to that trust and I will roll my business into it,” he said yesterday. ”I believe he has honourable intentions.”

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The paper trail

All the news that fits the screen … Bill Nighy in State of Play. Dustin Hoffman and Robert Redford in All the President’s Men.
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Gene Evans and Mary Welch in Park Row.

I arrived in the newsroom of this newspaper fresh from school in January, 1976. I was 18 and impressed with everything I saw. This was a newspaper, even if 235 Jones Street, Broadway, looked like Stalin’s other headquarters.

Later that year I saw All the President’s Men, Alan J. Pakula’s masterpiece about Watergate, and I was dumbstruck. The Washington Post newsroom was so modern and white, so big, and ours was so brown and grimy. ”What a dump,” I thought, looking around the fifth floor at fort Fairfax. Such is the power of movies, to make you feel as though you’re not living the right life.

I watch that movie maybe once a year. Now that newspapers are under siege, I may have to step it up to twice, to remind myself that the profession of journalism is still big, even if the newspapers got small.

All the President’s Men is my favourite newspaper film, for its seriousness, the way it shows how a story is constructed, the things you hate yourself for doing (like when Dustin Hoffman has to coax the frightened White House staffer into talking), the terrible price of making a mistake and the inspiration that comes from a great editor, like Jason Robards as Ben Bradlee (”Nothing’s riding on this except the, uh, first amendment to the constitution, freedom of the press and maybe the future of the country. Not that any of that matters but if you guys f— up again, I’m going to get mad.”)

Robards also played a tough proprietor in Ron Howard’s underrated 1994 comedy about a New York tabloid, The Paper. He tore a strip off Glenn Close for going over Robert Duvall’s bald head to ask for more money.

Close has a deadly battle with Michael Keaton, as metro editor. They end up in a fist fight over an interesting issue. He wants to stop the presses and remake the lead story because he has confirmed it’s wrong. She says it will cost too much: ”The story was right when we printed it.”

That nails one of the big conundrums of newspapers: they are finite, not continuous. Each issue is a weapon, an artefact, and once it’s on the street, you can’t just bring it back, like on radio or TV or the internet. A quicker mechanism has arrived.

I am confining myself to newspaper films, not the best media films. That excludes Good Night, and Good Luck, Broadcast News and great films about reporters in the field, such as The Killing Fields. I want ink, paper, the sound of typewriters and the rumble of the presses.

That’s another thing I loved about The Paper: they touch the air vents to find out when the presses are running. The very building quakes, as it did at Broadway in the days of hot metal.

If those words are a mystery, go to YouTube and type in Park Row. You will get part of Samuel Fuller’s classic 1952 film about the newspaper business in the 1880s in New York, when newspaper type was set by hand, letter by letter.

One of the characters invents the linotype machine, changing the business forever. Park Row is the story of Phineas Mitchell (Gene Evans), a hard-drinking reporter who sets up his own paper to defeat the ruthless woman for whom he once worked, Charity Hackett (Mary Welch).

Their circulation war is an actual war, with bombs and henchmen. At one point, Mitchell tells another drinker: ”Mr Spiro, escort the wench back to her slaughterhouse before I throw her outta here right on her front page.”

Samuel Fuller was an ex-journo and Hollywood has always been a second home for them. After all, newspapers and movies are in the same business, that of retailing stories, although the pay is better at the fictional end.

Ben Hecht wrote for the Chicago Daily News. Charles MacArthur worked for the Chicago Tribune, then the Daily News. Together, they invented the modern newspaper movie, albeit as a play, The Front Page, in 1928. It is still the most accurate portrayal of the cynicism and scepticism of the profession and a defence of its greatest purpose: holding power to account.

The first of four films based on the play appeared in 1931 but my favourite is the 1940 version, His Girl Friday, in which Hildy Johnson is a woman – and what a woman. Rosalind Russell is a gal any scribe would fall for – smart, funny, gorgeous and as hard-nosed as any of the boys in the press room at City Hall, where most of the action takes place, waiting for a hanging.

Cary Grant plays her editor (and ex-husband), Walter Burns, devastatingly handsome and dapper, as well as devious, cheap and utterly fearless. I’ve known editors and reporters like both of them, just not to the same degree.

”A journalist?” Hildy cries, when Walter says she’ll always be one. ”And what does that mean? Peeking though keyholes, chasing after fire engines, waking people up in the middle of the night to ask them if Hitler’s gonna start another war, stealing pictures off old ladies? I know all about reporters, Walter, a lot of dandy buttinskys running around without a nickel in their pockets.”

She got the last bit right. Last year, there were said to be 10,000 journalists out of work in the US. A lot of bad novels are going to be written.

I can’t list all the great newspaper films. Who could exclude Kirk Douglas keeping a man trapped in an old mine for six days to prolong his story in Billy Wilder’s Ace in the Hole, or Humphrey Bogart denouncing the way papers had moved away from news in Deadline – USA.

”It’s not enough to give ’em just news, they want comics, contests, puzzles. They want to know how to bake a cake, win friends and influence the future, ergo, horoscopes, tips on the horses, interpretation of dreams, so they can win on the numbers lotteries. And, if they accidentally stumble on the first page, news,” he says.

That was in 1952. How prescient. And there is Charles Foster Kane (Orson Welles) sending a message to his man in Havana: ”You provide the prose poems. I’ll provide the war.”

What of the profession today, rather than the romance of before? That’s easy. The best drama about a modern newspaper is the English television series State of Play, in which Bill Nighy plays the editor to John Simm’s investigative reporter. There are more dirty tricks in this than any newspaper film I’ve seen.

It’s like a road map of the horrors of modern British journalism: phone-tapping, room-bugging, threatening and kidnapping sources, withholding evidence, more lies than the News of the World had readers. And these are done by the good guys; the people they go after are murderers. Thank heavens it’s just fiction.

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Rinehart may move on Fairfax: analysts

FAIRFAX Media shares hit a record low yesterday as the market waited for the next move by the media group’s largest shareholder, mining magnate Gina Rinehart.
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The shares plunged about 12 per cent at one stage, trading at 44.5¢, after Mrs Rinehart’s unsuccessful attempt to offload a 5 per cent stake in the company.

Following a record loss by Fairfax on Thursday, her broker, Morgan Stanley, tried to offload 117 million shares at 50¢ but was knocked back by a market that failed to bite at the price – a 1¢ discount on the closing price.

Yesterday was the sixth-biggest trading day for Fairfax’s shares in a year, with 56 million of them changing hands for 45¢. Multiple parcels of up to 3.3 million shares traded after market close, according to Bloomberg. Broking firm UBS traded 13 million Fairfax shares while Morgan Stanley traded 5.6 million shares.

Media reports yesterday morning suggested institutional investors showed no interest in paying above 45¢ a share.

The corporate regulator was staying silent on questions over whether the sale was a means of testing the market to see how low Fairfax shares could go.

A spokesman for the Australian Securities and Investments Commission would only say: ”We are unable to comment on operational matters or specific companies.”

Now that the stock has reached a record low, speculation is swirling around Mrs Rinehart’s intentions.

A rumour flew through the investment community that Mrs Rinehart never intended to sell the shares on offer, but knew the cheaper offer would push the price down. This would make it cheaper for her to buy more shares or put additional pressure on the board.

One broker said: ”If it keeps falling then I think we fully expect her to make a bid for the company and probably move in to break it up.”

She said shareholders were holding out to make a profit in the event of a break-up while fund managers who knocked back the offer on Thursday afternoon said they preferred to buy into companies with certainty.

Mrs Rinehart’s office did not return calls.

Following the $2.8 billion write-down by Fairfax on Thursday and a gloomy outlook for the short term by chief executive Greg Hywood, analysts yesterday cut their earnings forecasts for this financial year. Mr Hywood said the company was facing the ”perfect storm of structural change and cyclical downturn”.

Mrs Rinehart has laid out an estimated $285 million on Fairfax shares, building up a 18.7 per cent stake. Early in July she cut her stake to 14.99 per cent to meet rules surrounding a corporate insurance policy held by Fairfax.

Fairfax made no comment.

Fairfax shares closed down 5.5¢, or 10.78 per cent, at 46¢.

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The only way is up for tax reform

‘Although some of these problems with the tax base may go away in time, it’s hard to see that time occurring in the next five to 10 years.’ONE OF Julia Gillard’s proudest claims is that the federal tax burden is much lower under Labor than it was when John Howard and Peter Costello were in charge. It’s true. But it’s not anything to boast about – the tax base has sprung a leak. Several leaks.
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In the mid-noughties, federal tax receipts hit a record 24.2 per cent of gross domestic product. This year they’re expected to equal only 22.1 per cent, despite the introduction of the carbon tax and the mining tax.

The fact is, the global financial crisis hit tax revenue hard and it’s yet to fully recover. The budget’s forward estimates see it returning only to 22.9 per cent by 2015-16.

If you don’t enjoy paying tax you may be tempted to regard all this as good news, but as both the present Treasury secretary, Dr Martin Parkinson, and his predecessor, Dr Ken Henry, have warned in the past week or so, it’s quite worrying.

It means the budget won’t ”whirr back into surplus” the way it did after the recessions of the early 1980s and early ’90s. It will be a continuing struggle to keep the budget in surplus, meaning it will take a long time to pay off the net public debt incurred in the recession everyone says we didn’t have.

It means we’ll be struggling to keep up with the growth in existing spending programs – particularly health – with little scope to pay for the disability insurance scheme, the Gonski Report’s proposals for education, aged-care spending and any other improvements we’d like to see, without dropping some big programs or introducing new taxes.

So what exactly is the problem with the tax base? Why has it never been the same since the GFC?

The biggest problem is with company tax collections. For many years they averaged about 3 per cent of GDP, but in the long boom that preceded the crisis, they grew to an unprecedented 5.3 per cent. Last year they were 4 per cent.

Much of the trouble is the collapse of receipts from capital gains tax. The long boom of rising share and property prices saw many taxpayers building up capital gains, which were realised and taxable when the assets were sold. Capital gains tax receipts got to as much as about 1.5 per cent of GDP, most of which was paid by companies.

The financial crisis saw big falls in the sharemarket, wiping out unrealised gains and creating losses. Share prices on the Australian stock exchange haven’t recovered to their peak before the crisis, and it’s hard to see another boom starting any time soon.

At present, gains tax is raising only about 0.5 per cent of GDP.

The second big change in company tax revenue since the crisis concerns the mining companies. In the first phase of the resources boom before the crisis coal and iron ore prices shot up and miners’ profits with them. Pretty much 30 per cent of that increase would have been taxable.

The second phase following the crisis saw prices go even higher, but by then many of the miners had embarked on major expansion plans, so that the depreciation charges on their capital spending significantly reduced their taxable profits.

So the mining investment boom adds to GDP on one hand, but directly subtracts from company tax collections on the other.

The problem with personal income tax collections arises from the eight tax cuts in a row announced by Costello (with Labor delivering the last three). When you cut taxes that often, you do a lot more than give back the proceeds of bracket creep (known to economists as ”fiscal drag”).

So the real level of income tax was reduced. The width of the tax brackets was widened, with the threshold for the top tax rate raised from $60,000 to $180,000 a year, thereby greatly reducing the tax scale’s capacity to generate bracket creep.

Yet another tax with big problems is the goods and services tax. With households’ decade-long spending spree a thing of the past, consumption spending is now growing no faster than household incomes.

But not all consumer spending is subject to the GST, and some of the categories that aren’t – particularly private spending on education and health – are growing a lot faster than the categories that are, meaning GST collections are growing slower than consumption.

That’s not the states’ only revenue problem. They’re locked in a destructive competition to raise the threshold at which payroll tax becomes payable. And the weakness of the residential property market – including the lower number of sales – has hit another key state tax, conveyancing duty.

Although some of these many problems with the tax base may go away in time, it’s hard to see that time occurring in the next five to 10 years.

And by then the problems for the taxman created by globalisation and the greater mobility of capital and highly skilled labour (which I wrote about last Saturday) may be starting to bite.

To many people – particularly business people – the words

”tax reform” make them think of paying less tax. One day soon it will dawn on them that the reform we must bring about is new and higher taxes.

Twitter: @1RossGittins

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