June 29, 2012 | Graham

Newman hikes workers’ compo insurance 23.4% for video stores

If the Queensland government is interested in privatising anything, they could do worse than running their ruler over WorkCover.

They  must be sensitive about their latest price hike – I’ve never before had a phone call from WorkCover to inform me that my premiums are about to rise.

Perhaps they are super sensitive in that an increase of 23.4% for video stores is well above the 13% average increase, which in itself is quite bracing.

What is going on here?

Well as insurance premiums inevitably lag the market, this will reflect past events, so presumably one, or a combination, of three things has happened:

  • premiums have been set too low, leading to under-provisioning and insufficient reserves;
  • accidents have increased;
  • payouts have increased faster than the rate of growth in the economy.

Actually point one can operate entirely on its own, as in when a company unsustainably under-cuts its competitors to buy business, or may be a byproduct of two and three.

Point three can be a byproduct of lax dispute settling procedures, or increasingly generous judges.

I’ll send a copy of this blog off to WorkCover to see if they will disentangle this for me.

It is certainly hard to see how the increase could be justified in the case of video stores.

WorkCover premiums are automatically indexed to growth in the economy as they are a percentage of your wages bill. As the economy grows, wages grow, and so does the premium.

Video Stores have a fairly low risk of injury to staff. Paper cuts are the worst injury you encounter on a regular basis – or attention deficit disorder because something really cool is playing on the instore television.

This is reflected in our premium being $0.47 per $100 of wages. This will now increase to $0.58.

The man who rang me from WorkCover advised me that premiums are set on the basis of a client’s claims history, and the claims history of the industry.

We haven’t had any claims, so this increase must be based on the industry. I find it hard to believe that there has been an increase of 23.4% in accidents in the video industry, or that judges have suddenly become over-generous in what awards there have been.

That all points to WorkCover having under-provisioned in the past.

So it’s probably not Campbell’s fault, but another mess he has to clean up.

And if he is to clean it up, I’d suggest investigating the prospects of privatisation at the same time that the area is opened-up to competition.

Just as third party insurance is compulsory, but you can have your choice of private insurer, the same ought to be true of workers’ compensation insurance.

While the government enjoys a monopoly position, no-one in business could have any confidence that the premiums are being set fairly and honestly.

And as an operating insurer, WorkCover has a book that has an asset value from which the state could realise some money to apply to reducing that debt and getting back our Triple A credit rating.


Posted by Graham at 12:53 pm | Comments (3) |

June 28, 2012 | Graham

Why 20K Queensland public servants could lose their jobs

I’m on Steve Austin’s ABC radio program tomorrow along with former Queensland Labor A-G Cameron Dick. Not sure what we are going to talk about, but there’s a good chance public service cuts will be on the list.

I’ve been wondering how Campbell Newman has reached the conclusion that 20,000 public servants have to go, and whether this is a reasonable figure.

While I still don’t know how he exactly does his calculations, I have found at least one way of triangulating them. In 2001 Labor had been in power more or less since 1989, with a brief 2 year interregnum of minority coalition rule between 1996 and 1998.

It would therefore seem reasonable to assume that the level of public service in 2001 was one that not too many Labor supporters would be able to criticise (although Coaltion supporters might suspect it had run ahead of itself a little). According to this helpful graph from the Courier Mail there were 147,722 public servants then.

Queensland Public Service Growth 2001-2012

In 2011 the graph shows that were 206,082, growth of 40%.

Using a generous population growth rate of 2.5%, over the corresponding period there were only 28% more Queenslanders to be publicly serviced.

If the public service had kept pace with population, rather than outpacing it, there would be 17,718 fewer public servants today. Allow for some increased efficiency and economies of scale that should be present in a larger state, and Newman could argue that he is merely restoring Queensland to the position that it was in under Peter Beattie in 2001.

Others might argue he’s not really trying hard enough.

What would be really interesting would be to compare Queensland’s public service employment figures against those in the other states to see how we compare to best practice.

Posted by Graham at 2:36 pm | Comments (12) |

June 27, 2012 | Ronda Jambe

What can we learn from the Mid-Evil?

What is the anthropocene?

That’s the term Jim Cruzen coined to describe the tiny span in our plantet’s history that has been shaped by human activity.  Scratching the soil, playing with fire, seeing if water can be moved or blocked, the stuff that led to civilisation.

This started long before recorded history, or the classic medieval period when castles like this one in Carcassonne were built:

I prefer to think of it as the Mid-Evil, and our current epoch more correctly as the Late-Evil. About 800 years ago, they had only the most general idea of resource depletion. Today we know, and still we persist in the ponzi-scheme of unlimited growth, a planet without limits.

And we flatter ourselves that nation states and the modernised sector more or less invented and sustains democracy. The reality is that tiny places like la Rochelle in France had communes and elected their mayor many centuries ago.

Who were the Cathars?

The Museum of the Inquisition in Carcassonne reveals how religious dissent was handled in the 1100’s. The Cathars can be seen as early reformers, anti-Papist and anti-corruption. They were pretty much  exterminated in the First Crusade.

The lovely faded shutters everywhere in France, which Peter Mayle mentions nostalgically in his book Encore Province, have borne witness to a great deal of bloodshed. It is easy to forget that when presented with present day charm:

The fortified bishops palace in Albi

Mid-evil rulers also knew about privilege, and protection.

At least they had good taste, as these gardens behind high walls and along the river reveal.  Even today, the public cannot walk down into them. Ironically, part of the palace has been converted to a museum about Henri de Toulouse Lautrec, a crippled syphillitic painter who specialised in the darker side of Parisian nightlife in MontMartre.

France has built on its history to become a prosperous and powerful country. Their model of local marketplace that blends with social interaction is still gracious. Australian urban planning is in the dark ages compared to this:

 What is perhaps the earliest example of planned grids for streets?

They tell me it might be the Bastide de Saint Louis, which is the ‘new’ medieval part of Carcassonne. The exiled peasants were told to set up on the other side of the Aude River. The streets are so narrow that all of them are one way, but cities like Toulouse have used this feature to ban cars entirely from some streets. The result, a true back to the future and very positive scenario, is a naturally pedestrianised area:

Also good for casual karioke, as we saw during the Night of Music, a national celebration they have every June 21 on the equinox.

Not forgetting all the development of vineyards and wine varieties done by  the monks of long ago, I prepare to leave after a month in Carcassone. Salut to all lovers of good living throughout the ages


Posted by Ronda Jambe at 6:06 pm | Comments Off on What can we learn from the Mid-Evil? |

June 27, 2012 | Graham

Newscorp split misses the point of convergence

Newscorp’s proposal to split into a TV and Entertainment company and a Publishing group seems to misunderstand what convergence means. In the digital world a newspaper is a television station and vice versa.

I’m limiting myself in how I use of the word newspaper, because it implies that a print outlet needs paper, when it demonstrably doesn’t.

The converse of that is amply demonstrated by the ABC which is one of the largest distributors of print news in Australia, but doesn’t publish any of it on paper.

Newspapers aren’t so much publishers, as news organisations, a description they have in common with television stations.

One major difference between a newspaper and a television station is actually in the percentage of the output of each devoted to news.

Newspapers do mostly news and television stations, unless they are Al Jazeera, or 24 hour news stations, do mostly entertainment.

But as their mediums of delivery converge on the Internet, then it is their intent that defines them rather than how their content is presented.

In a world of print and audio-visual delivered via the ‘net a news organisation ought to work on the basis of presenting its information first on the web, before distributing it through other channels, such as hard copy.

So with live news and analysis the pathway would run something like this with.

  1. Stream the whole of a media conference to your website and archive it there.
  2. Publish text excerpts from the conference on your website as well as transcript when available.
  3. Edit and broadcast audio and audio-visual snippets and summary from the media conference. You can reuse text excerpts in these broadcasts where appropriate.
  4. Include summary broadcast in major broadcast news bulletin, providing split screen links to text summary
  5. Blog initial analysis of media conference engaging core audience who will provide critique and better material via blog comments
  6. Produce rounded print analysis for website for reuse in other media as appropriate.
  7. Do broadcast version of print analysis.
  8. Throughout the process engage with social media.

The first news organisation to operate on this basis will blitz the rest as they will totally dominate the news cycle producing material for a variety of different audiences on a variety of platforms before anyone else.

They would also go close to collapsing the costs of a news television station and a newspaper into one, increasing profitability, or at least their cost competitiveness.

Approached the right way they would also have rich audience feedback that would make their coverage even deeper than it is now.

I thought Newscorp was the most likely news company to adopt that approach, but it appears I may have been wrong.

Posted by Graham at 1:55 pm | Comments Off on Newscorp split misses the point of convergence |
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June 25, 2012 | Graham

Nonsense on asylum seekers

There is zero chance of a bipartisan solution to asylum seekers unless the government adopts the opposition’s policies. Any analysis that says otherwise is day dreaming.

What the offer from the government is about is an attempt to pivot off the deaths of 100 or so asylum seekers in Indonesian waters last weekend and entangle the opposition in the government’s asylum seeker problem.

The opposition won’t buy into this for a number of reasons.

Bipartisan presumes compromise. If the opposition were to do business with the government on the issue, then not only will they be tarred with the “failures” of a policy that is only partly theirs, but they will get mired in the future compromises required to try to make it work.

If the government accepts in toto opposition policy, then the opposition will probably grit its teeth and live with it. Indeed, they are already setting themselves up for this possibility by Scott Morrison’s 7.30 Report position that not only does it matter what the policy is, but whether the people smugglers believe that the government implementing it is serious.

In other words, to make this policy work, not only do you need to adopt our policies, but you need us to be in office.

The government senses a possibility of wedging the opposition on the issue. The numbers in the House of Representatives are so tight that they might need an opposition member or two if they can’t get Greens cooperation, and if they can pass the legislation with a defection the media will see that as a huge defeat for Tony Abbott.

Julia Gillard knows about wedges, because she is wedged on the issue herself.

She is looking for a way out of the vice between the traditional Labor strongholds in the suburbs, that are where the really strong anti-asylum seeker sentiment resides, and Labor’s new friends in the inner cities who think that restricting this sort of immigration is not just xenophobic, but racist.

If a change in position is the result of compromise without capitulation, then she thinks she has a chance of keeping both factions equally, but less, unhappy with her.

Abbott doesn’t share this problem. Anyone who wouldn’t vote Liberal because of the Libs boat people policies doesn’t vote for them now, so he has nothing to lose by maintaining a tough line, and a whole swag of nominally safe Labor seats to gain to boot.

Some of the Liberals’ left will want to deal with the government, but as Russell Broadbent demonstrated on Waleed Ali’s RN Drive, they have plenty of room to argue compassion and stick with Abbott.

Indeed, there would be more chance of the government getting cooperation from them if the parliament were not so tight.

But as it is, the pressure from their colleagues will be immense. In the end it is impossible to see any of them, and I guess I am talking about Mal Washer and Judy Moylan, being party to any deal with Gillard.

While both might see benefits in changing refugee policy, they should see that the government’s offer is more to do with political advantage than it is to do with any genuine human rights concerns.


Posted by Graham at 11:24 pm | Comments Off on Nonsense on asylum seekers |
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June 24, 2012 | Graham

Have Australian diplomats got their eyes in the right places?

Agence France-Presse has just launched a fascinating tool that maps international diplomacy using twitter accounts of the foreign policy elites. As much as it is an accurate measure the ediplomacy hub suggests that Australia’s diplomats aren’t looking in the right places.

Australia’s diplomats appear to be parochial, shunning huge parts of the developing world, and fixated on Julian Assange when the rest are talking about Syria.

The map below shows who we are tweeting to. Note that the only one of the BRIC nations we talk to is India. There is no traffic with the emerging giants of China, Russia or Brazil at all. Nor is there any chatter with Japan, after China our second largest trading partner, or Singapore, our fourth largest.

A possible reason for lack of contact with China could be a lack of twitter accounts there. However, a scan of who the US talks to disproves that thesis. The UK also talks to the Chinese. They also find time to talk to the Russians, and the Japanese.

What these maps suggest is a serious lack of engagement with a huge percentage of the world. As representatives of a powerhouse of mining innovation Australian diplomats ought to be in close contact with the countries who are emerging mineral producers and major competitors, but it looks like they aren’t.

The site also provides snap shots of what subjects are being talked about by each country. For Australia the top hashtag is #Assange. For the world the top five in order are #syria, #bahrain, #cuba, #egypt and #rioplus20.

It is also interesting that the top e-diplomat in Australia is Kevin Rudd, who is neither foreign minister, nor head of state/government. In the UK top e-diplomat is David Cameron; in the USA it is Barack Obama; in Canada it is Stephen Harper; in New Zealand it is John Key. Can it be that Australia’s misdirection starts right at the top?

AFP ranks Julia Gillard at 116 out of 200 of the most influential diplomatic actors, just about novellist Cory Doctorow, and just below Piedad Cordoba Ruiz from Colombia. Kevin Rudd ranks at number 25.

In Australia Bob Brown comes in at third behind Julia Gillard, while Opposition foreign spokesperson Julie Bishop at 9 just beats Bob Carr, the foreign minister, at 10.

Posted by Graham at 10:47 pm | Comments Off on Have Australian diplomats got their eyes in the right places? |
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June 21, 2012 | Graham

What’s Fairfax worth to Australians?

Dr Joseph Toscano may be an anarchist, but he’s interested in some collective action on Fairfax. The plan is to get enough Australians to invest $100 in Fairfax shares that they can stop Gina Rinehart buying or controlling it.

I’m not sure how he thinks this works. To effectively control a company you don’t need 100%, or even in reality 50%. Rinehart has potential allies such as fund managers Allan Gray, who own 9% of Fairfax, and there are other disgruntled large shareholders. So at the moment she has a potential block of at least 27%, with other large shareholders likely to fall into line. She might not be that far off control as it is.

Dr Toscano would need 10% to stop a takeover (assuming Rinehart is interested in that), which would mean finding 1,387,653.88 Australians who agreed with him and were prepared to stump up the readies. Given that one of the problems that Fairfax faces is that they can’t get a much more modest readership to pa a large enough cover price to maintain the newspapers, that seems a little quixotic.

Given that the SMH sells 340,000 copies of their Saturday edition (the largest edition by sales) and The Age 275,000, the figures also seem improbable.

To exercise control he would need even more. He might be better-off trying to find some left-wing would-be Beaverbrooks to stump up significantly more. But then why would they?

As it appears that the metropolitan dailies are heading towards blogdom, you could start a new masthead for less than the hundreds of millions of dollars involved in fighting for control of Fairfax.

If you’re interested in being part of Dr Toscano’s scheme, then you can contact him on people@communitysavesfairfax.com or 0439 395 489, or by visiting his website www.communitysavesfairfax.com.

Posted by Graham at 1:07 pm | Comments Off on What’s Fairfax worth to Australians? |
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June 20, 2012 | Ronda Jambe

Beyond tragic – Australia’s ambivalence on fossil fuel subsidies

Why did Australia’s representatives insert wording into the Rio + 20 statement that weakened the world’s committment to ending these pernicious subsidies?

And why aren’t we party to the group of countries that is trying to achieve fossil fuel subsidy reform? NZ has raised their voice, but Australia remains captive to an industry that is destroying our future.

This forwarded para from today’s Crikey gives the figures:

Oil Change International estimates the figure to be between $775 
billion and $1 trillion each year. The Australian government 
estimates that our own our fossil fuel subsidies are between $A6-9 
billion, although a report from the UTS Institute of Sustainable
 Futures a few years ago put the figure as high as $11 billion.

Gee, that's a lot of potential investment in a post-carbon future, 
but if the game continues with  these rules, maybe we won't have 
to worry about that.

Posted by Ronda Jambe at 6:10 pm | Comments Off on Beyond tragic – Australia’s ambivalence on fossil fuel subsidies |
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June 19, 2012 | Graham

How do you start a small business?

In the early nineties one joke went “How do you start a small business?” The punchline “Give Warwick Fairfax a large one.” It was a reference by the privatisation and near destruction of the Fairfax media group by the twenty-something great-grandson of the founder.

The culprits have changed, but the joke is quite similar, if you substitute “the  Fairfax board” into the punchline.

Which makes it even funnier to hear communications minister Conroy claiming on ABC radio this morning that this century’s Fairfax predator, Gina Rinehart.

“… is entitled to representation but what she is not entitled to do is trash the brand for all the other shareholders,” he told ABC radio.

“If she was to directly interfere and breach that charter, it would actually lead to a crisis of confidence among the readership, and if the readership deserted, the share price for every shareholder would decline.

“Now that is not in the interest of all of the other shareholders.”

Rinehart appears to be the only potential manager of Fairfax to have credentials that read “How do you start a monster business?”

If I were a shareholder of Fairfax I’d take the view that Rinehart is the only chance of Fairfax actually escaping with something intact from the technology wreck. And failing that, she’s probably the only person that would buy my shares, giving me a clean exit from the company.

Either way, I’d be as relaxed as it is possible to be when investing in media at the moment, and having watched my shares decline from over $5 five years ago.

Which begs the question  as to how the board managed to Bonzai such as venerable institution. One answer to that is also provided by Conroy – any board of directors that would accept something like the editorial charter of independence is obviously weak, incompetent and in breach of their duties as directors.

In what other business would the board accept that it is OK for the staff to have the final say on virtually everything related to the product? Micro-managing is one thing, but taking your hands completely off the steering wheel and only retaining control of the accelerator and the brake, is lunacy too.

I would be the first to accept that a business run merely for profit will most likely founder, but so will one run without any regard for it.

One wonders what business the communications minister thinks he has interfering in corporate affairs like this. As far as I know the commonwealth has no legitimate interest in what is a private company. I certainly don’t remember anyone hyperventilating when Young Warwick launched his ill-fated bid, so why now?

If Conroy is right, then Rinehart will fail and Fairfax will fade into irrelevance. Not something any of us should worry about, least of all the government, as Rinehart loses her chance to influence public opinion through the group and some other news organisation will fill the void.

And if she succeeds, again on Conroy’s analysis, it will be because the “readership” supports her by buying the product, and what could be wrong with that?

One is left with the impression that if there were more Gina Rinehart’s and fewer Stephen Conroy’s then the business of Australia would end up much bigger than it is now. Ultimately, the joke appears to be on us.

Posted by Graham at 2:00 pm | Comments (1) |
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June 18, 2012 | Graham

Fairfax changes good for readers, not so good for community

What Fairfax announced today was obvious 13 years ago – the traditional newspaper model has been broken for quite some time. But that doesn’t mean that the alternative model is going to fill the role of the fourth estate as well as the existing one.

Not that the fourth estate has been functioning as effectively as it should. While technology is a problem for Fairfax, so is editorial. It has increasingly adopted a soft-left ideology at odds with the views of its readers, and with reality. The effect of that has been to double up on the erosion of its market share due to the Internet.

Which brings its own blessing, because if it is going to make a go of the Internet it will have to reconnect with the customer as subscriptions will be the only way to pay the bill.

Print news has become a bloated process because of the cross subsidies that used to be available from classified and display advertising. While those cross subsidies made life very comfortable for the news side of the operation, like most unearned income, it was poison to the recipient.

It allowed indulgence and encouraged over-production. It cultivated a journalistic culture which sneered at readers and served them what they should read rather than what they wanted or needed.

With the advertiser out of the way, the customer is now in control. And while the Fairfax news agenda is likely to swing back to mainstream opinion that doesn’t mean that print media organisations (better get used to not calling them newspapers) will have the broad reach that they used to.

Which means that the print news business is about to get fragmented. I’m not convinced this is going to be good for democracy.

The print news media organisation of the future is more likely to be like a Crikey (which has a sustainable economic model more or less at the moment) or an On Line Opinion (which is still working one out, but has such low overheads that it can keep operating on very little) than the paper behemoths of the present.

It is also more likely to be transparently an aggregation of smaller sites targeting niches. So you will have a sports site, and a finance site, and a lifestyle site, as well as a news and commentary site.

That means higher productivity from journalists, with a weighting towards name journalists (as occurs on the Alan Kohler Business Spectator/Eureka site).

It means fewer cross subsidies (financial news will be able to charge a premium, for example, while lifestyle will be strung out on display ads, pity the lifestyle journalists).

It means free, low value giveaway material being widely available, as  bait to get much smaller groups of readers to buy news, and then news add ons.

The Internet will weight the value in the news operation away from the hard assets and the production and distribution network, which will allow print news media to prosper with fewer readers, and therein lies the rub.

At the moment we have mass media which consist of broadcast and print. Broadcast does a very good job of transmitting headline versions of the news, but a very poor one in general of analysis, and only a reasonable one of fact. Print has been diminishing as a mass conduit for the facts and headlines, but still retains a mass role in analysis (even taking account that analysis is more of a niche interest).

To the extent that serious news is going online it goes off the news stands, and more importantly, off the lunch room tables. The serendipitous encounters that we all have with news in the hard copy world will diminish.

Of course they will be replaced by online encounters, but these will be less serendipitous, and more directed.

We are all on someone else’s email list, even if we aren’t on their Twitter feed or friends with them on Facebook. I am certainly on all three, and my experience is that it is generally the partisans who are most likely to push something through to me.

As a result, were it not for the reading I do for On Line Opinion, it would be easy for me to live in an information and analysis ghetto. Partisans know your politics, and they generally don’t push stuff to you if they think you won’t be sympathetic.

So, while print news media is collectively about to get closer to its readers, it is also individually about to get further away from its community.

That is a challenge for democracy, and for the media’s self-imagined role as the fourth estate.

Posted by Graham at 11:36 pm | Comments Off on Fairfax changes good for readers, not so good for community |
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