It shouldn’t be too hard to explain why spending must slow

In 1996, when Pauline Hanson was asked on 60 Minutes if she was xenophobic, she replied: “Please explain?” It was an intelligent question from a poorly read person to a smart-arse journalist.

Politicians use simple language because they believe that many voters are like Hanson; that is, poorly read.

But poorly read voters, just like well-read voters, crave good explanation. This was, and is, Paul Keating’s gift to politics. He could explain complexity, without mouthing slogans (and yes, he could do that too).

Politicians often speak in slogans because they believe voters are not curious.

Politicians also speak in slogans because they are afraid of the consequences of ­explanation: offending a constituency.

In doing so, it becomes possible for the Abbott (or Turnbull) government to fail in its quest to lower government spending despite the obvious need. It becomes possible for the debt-denying Bill Shorten (good slogan huh!) to succeed.

Tony Abbott’s latest mantra, delivered in his National Press Club address, “creating more jobs; easing the pressure on families; building roads; strengthening national security”, explains nothing.

Take as a case study the recent debate about privatisation in Queensland.

Although privatisation was but an element of the Liberal National Party’s defeat, Campbell Newman’s abrasiveness being the other, the two go together.

Instead of explaining the intricacies of how assets could be better used, Newman would bark his lines about debt reduction and a stronger economy. The link between privatisation and a stronger economy was not obvious. It was framed as a gamble: a known stream of money versus a lump sum reinvested.

Some voters preferred the stream they knew. Trade unionists, on the other hand, wanted to protect jobs. In doing so, they also prevented the best use of capital. They did not want managers to create wealth; they wanted a few privileged workers paid more than they were worth. Explanation of how to turn public assets into better assets was avoided because it would have required revealing a few home truths.

Cally Wilson, a former employee of Energex, recently made public her damning assessment of the state-owned power corporation. She criticised a “public-sector mentality” as partly responsible for higher power bills, and argued that Energex staffing levels were “excessive for its actual needs”.

“Walking around the building, I saw row upon row of employees spending large amounts of their day engrossed in personal activities while … employees often spend large parts of their days in unproductive meetings. Staff are provided exceedingly generous income and benefits compared to commercial standards for the same roles.

“This in itself contributes to an inefficient workplace, as once people are in jobs that provide pay and benefits well in excess of market conditions, employees are more likely to cling to jobs.”

It has been reported that a ­review into network costs commissioned by the Newman gov­ernment found “647 staffers earned more than 1½ times their base salary across the three state-owned network businesses – Ergon, Energex and Powerlink”.

Twenty-seven staff doubled their base pay in 2011-12, which was argued to spawn “lower levels of productivity”. “No forced redundancy” ­clauses exist throughout the government corporations sector, which means staff are almost unsackable.

Stories are similar in NSW.

George Maltabarow was chief of state-owned Ausgrid between 2004 and 2012.

In this period, average annual household electricity bills rose from $900 to $1925.

Maltabarow argued that two-thirds of the increases in prices were linked to over-investment in the electricity networks, the rest from increased operating expenditure and other costs, including above-inflation wage rises, large overtime bills and other perks. Both are good reasons to privatise assets.

“The ETU (Electrical Trades Union) has been able to secure wage rises far in excess of those available to the wider community through industrial blackmail and attempting to intimidate management of government-owned networks,” he said.

“They have maintained restrictive practices in successive award determinations, frustrated attempts to contract out construction and other services and now oppose privatisation through a scare campaign on prices.”

The commonwealth undertook privatisation 20 years ago. That it is still contentious at state level is testament to the power of public service unions and the paucity of politicians to explain the problems of holding commercial assets in public hands.

The Abbott government’s problems are analogous. It has serious work to do to have voters understand that the commonwealth, and the states for that matter, spends more money than it raises. And it raises more than it used to.

Slogans do not satisfy the voters’ need to know why change is necessary.

They ask: “Please explain?”

This article was first published in The Australian.

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