July 29, 2013 | Graham

ABC methane madness flouts reality

The ABC has been running alarmist reports from a Nature paper that suggests methane released from the  Arctic permafrost could cause $60 trillion worth of damage to the economy.

I’m watching Emma Alberici on Lateline, and surprisingly, she’s actually putting some criticisms of the paper to one of the authors. That’s not the Emma I expected to see.

Perhaps that is because real life is starting to fracture the simplistic fairytale version of climate change touted by any number of rent-seeking scientists. Climate change establishment figures like Richard Tol and Gavin Schmidt are prepared to criticise rubbish, and ABC researchers can access them on the Internet, including Twitter.

As the Arctic, in relatively recent history, has been much warmer and colder than it is at the moment, you’d have to say that the real historical model we have suggests there is nothing much to worry about, even if the temperature increase claims of the authors of this paper are borne out.

Chances are that they won’t be.

Steve McIntyre at Climate Audit has been looking at history too. In his case, historical models of CO2 forcing. One of the early 20th Century investigators of the phenomenon, Guy Callendar, developed a simple mathematical model which ignores things like water vapour forcing (which makes up the majority of the presumed temperature increase from CO2 emissions).

It turns out that Callendar’s model outperforms 10 out of the 12 climate models that McIntyre benchmarked it against, and ties with the other two.

In today’s post, I’ll describe Callendar’s formula in more detail. I’ll also present skill scores for global temperature (calculated in a conventional way) for all 12 CMIP5 RCP4.5 models for 1940-2013 relative to simple application of the Callendar formula. Remarkably, none of the 12 GCM’s outperform Callendar and 10 of 12 do much worse.

Not only that, but it suggests that global temperature may be less sensitive to CO2 emissions than the IPCC reports suggest.

So why are we spending so much money on “sophisticated” climate models which have less skill than the most basic ones? And why are we basing so much government policy on them?

There are a number of reasons for this, but the strongest one is that we humans like the idea of certainty, and we like the idea we can actually know the future.

Denser, less comprehensible models convince us that we are getting more predictability and certainty, when the opposite is often the case.

That’s certainly my experience in building financial and business models. But I’ve rarely found the results to be much better than back of the envelope calculations, apart from when it comes to persuading bankers to part with their cash.

So, when I talk about skill in a model, I’m not talking about its ability to predict, but to persuade. Why should climate change be any different?

Oh, and my back of the envelope calculations are generally pretty good!

Posted by Graham at 11:21 pm | Comments (16) |
Filed under: Uncategorized

July 26, 2013 | Graham

Is Rudd “redux” or “van Winkle”?

When the Ruddbot was at his zenith it was a different world. Those were the days before the GFC, or in its near aftermath, when we still hadn’t realised that the party wasn’t going to go on forever.

As reported in Business Spectator, a Boston Consulting Group report finds that Australians are increasingly likely to be saving rather than spending. As Robert Gottliebsen reports:

In just one year the proportion of consumers who want to save in 2013 rather than spend has risen from 40 per cent to 46 per cent while those who are less inclined to buy new things has risen from 49 per cent to 54 per cent.

This mirrors everything that my qualitative research has been showing for the last couple of years. People are insecure, and while they know things are better here than most places, everything is relative.

Added to that the most economically and socially significant demographic ever – the babyboomers – are either in retirement or approaching it, so they are even less inclined to spend.

The world in which Kevin 07 easily vanquished Honest John Howard with a few airy “vision” things like an “education revolution” that was actually a promise to buy schools shiny new computers, no longer exists.

But watching Rudd redux, it appears that he missed the intervening years.

You probably can’t blame him too much. While he was asleep Julia Gillard was cranking up the bankcard and making promises to be paid for on the never never and by someone else.

Which was one reason she was on the slippery slope with electors who knew that sort of maths no longer works in the real world.

But the befuddled Rudd is pursuing the same policies.

He’s in the wrong decade. The only way to win this election for him would be to show that new Kevin has learned from old Kevin’s mistakes.

To prove this all he would have to outflank Abbott, and his own party, from the frugal right and repudiate Gonski and the NDIS, adopt the Liberals’ broadband policy, and bring government expenditure back in line with government revenue.

He could do this, while Abbott can’t, because no matter how tough Labor is, they’re never blamed for it the same way the Liberals are. And if he did do this he would gain real credibility.

He’d also address the black hole at the heart of the budget which is threatening to tear the surplus apart.

Of course he won’t, because this story doesn’t have a fairy-tale ending, and Rudd hasn’t really changed. What’s worse, is that he’s been awake all along too and never noticed that this time it is different.

Which makes him neither “redux” nor “van Winkel”, but vanquished.


Posted by Graham at 2:49 pm | Comments (1) |
Filed under: Uncategorized

July 23, 2013 | Graham

We are not tax cheats

I have a confession. My car is salary packaged. And I don’t feel guilty about that.

But now I have a government telling me that this is a tax loophole that needs to be closed.

Since Paul Keating introduced fringe benefits taxes it has been perfectly legal to salary sacrifice for a company car, and the federal government has given a tax benefit for that.

The tax benefit is on the basis that the car will be used for work, but instead of charging a per kilometre cost to my employer, or filling in a log book, I can use a statutory formula tied to the number of kilometres I travel.

The assumption is that the more kilometres I travel, the more of them are likely to be for work.

This might be a poor assumption, but I don’t write the laws. I live my life and I try to keep the amount of tax that I pay to a legal minimum.

In my case I don’t know whether that is a poor assumption or not, because I don’t keep a log book, but I suspect it is not a good assumption.

If the government agrees, then they should have said so…a long time ago. Paul Keating has been politically dead for almost 20 years.

In fact, they reconfirmed two years ago that this sort of arrangement was OK, no matter how much business I was doing with my car.

In the 2013 budget Wayne Swan announced that he would change the arrangements so that everyone who salary packaged their car and didn’t fill-in a log book would only pay 20% of its capital value as tax.

So, while I agree that the government can change the law, I object to them branding  me as some sort of tax dodger.

I can’t double guess what they are going to think is a reasonable deduction tomorrow and organise my life to take account of that today.

They said it was OK in 2013. How can it be wrong today?

Federal Labor never had my vote, so politically, in my case, it might be smart.

But they did have the vote of many of my fellow “rorters”. This sort of salary packaging is widely used in the NGO sector and the public service.

My barbs are bearable, but when you put the local priest offside because his parish has to raise another $5,000 so he can take communion around after church on Sunday, you’ve moved into a whole different universe.

You would have thought Kevin would have understood that, given that his favourite Sunday media conference backdrop is the lychgate of his local church.

Should have checked his new policy out with his local parish council, they might have a keener feeling for real sin than he does.


Posted by Graham at 11:15 pm | Comments (6) |
Filed under: Uncategorized

July 23, 2013 | Graham

Sauce for the ganders?

We can tell whether Labor’s change to its rules to make Kevin Rudd leader for the term of his political life is a projection of Rudd’s naked self-interest, or a genuine attempt at reform, by applying a simple test.

Rudd is only one of 8 elected parliamentary Labor leaders. So if it’s an historically democratic move for the federal leader to be elected on this basis, and a good thing, then there is no reason it shouldn’t be applied to every state and territory leadership position.

I’m sure the Liberals are looking forward to every one of them being locked into place for the next elections.

Posted by Graham at 8:43 am | Comments (2) |
Filed under: Uncategorized

July 20, 2013 | Graham

Will people smugglers back Rudd’s plan?

Kevin Rudd’s deal with PNG depends on the assumption that it will stop the flow of immigrants within a month or two. Papua has no interest in becoming “Nuginistan” to allow its former colonial master to escape it’s refugee “problem”, so there has to be a limit to how many refugees it will take.

I suspect that limit is in the thousands, as in much less than the tens of thousands. At the current rate, that is probably less than two months of illegal immigration to Australia. To know the real figure you’ll have to know what winks and nods, or something more substantial, were exchanged in the meetings between O’Neill and Rudd.

What does this mean for the people smuggling trade?

It may mean nothing. It’s possible that the deal will be found to be illegal by the courts. That’s what happened to the Malaysian solution.

But the Malaysian solution had a problem that the PNG one doesn’t – PNG is a signatory of the refugee convention and Malaysia isn’t which was the primary reason the challenge succeeded.

If a legal challenge succeeds, then the people smugglers aren’t affected at all. However, they don’t necessarily need to wait for a legal challenge to be heard.

If they can bring enough people into Australia to overflow the PNG limit, then the trade will still achieve its aim, but only for those who arrive after the limit is breached. That means any refugees between now and then will fail in their aim of reaching Australia.

How might they convince enough refugees to form the bridge over this gap?

It might not be that difficult. If the PNG solution only encompasses a couple of months’ illegal immigration, and all those after that time are then effectively eligible for asylum in Australia again, then pressure could be applied for those in New Guinea to get the same treatment.

Indeed the people smugglers will probably head down this path, because that’s what they are doing already.

While it might make more sense to try to keep Labor in power by stopping the boats until after the election, that is a high risk bet, and the smugglers have obviously decided to offer a once only, illegal immigration, closing down sale as the low risk way of maximising their profits.

In which case the Rudd plan may be neutered even before he is in a position to pass a law.


Posted by Graham at 8:46 pm | Comments (7) |
Filed under: Uncategorized

July 16, 2013 | Ronda Jambe

Under the Moruya Moon (15)

Another year slides by, perhaps teaching me patience. A few steps forward, along with slow progress towards distant goals. Like the landscaping. As I spend more time here, the people are what pull me. Along with the solitude are developing friendships that provide balance and a feeling of belonging. It sometimes feels like I am embedded, both observer and participant. That is a good methodology for learning, and lots of learning is seeping in, so I hope. One symbol of change is the view off the kitchen, which no longer has a spotted gum so close up:

big gum off kitchen

The view from the deck hasn’t changed much, except that the big chair is now visible by the dam, an attraction for climbing:


big chair by dam

One of my ‘bespoke’ follies, it was done by a local guy who worked with me to get the proportions and structure right, and the placement. The timber was milled from trees (like the one in the picture off the kitchen) that were cut to keep us safe from wind and fire. Yesterday 3 teenage girls and their mothers enjoyed it with me. Creating that sort of fun has to gladden your heart.

The community gardening group is also very rewarding, and my picture appeared with the group in an edition of a green magazine about their efforts. Gardening guru Costa has visited, and the page we are all on is one of both pleasure and shared learning and values. How do you explain the quiet delight in having a surplus of grapefruit and lemon around the town, and a workshop on how to process the excess? So what if my attempts at a semi-commercial crop of corriander have come to naught? I am still getting enough every day to enhance every meal, baffled that some people find this herb unappealing. A shop in town was selling corriander seeds with my name on it, how cute is that?

We play table tennis daily, using Julian the Wikipuss as an occasional handicap. When I’m winning I do the ping-pong haka.

ping pong

Another step forward has been the new kitchen, planned in my head for years and now a luxurious reality. It replaces one donated from a flat in Canberra and reassembled here 10 years ago. The tiling will have wait til spring, but the storage and use of space is a great success:

back door

We have also continued to participate and learn as members of the local State Emergency Services, and my respect and admiration for this organisation continues to grow. Their skills and dedication for community benefit are impressive, and remind me of my minimal practical knowledge. I gave a brief climate change presentation, and hope to work with them on community education on my return.

For I am about to leave again, making up for travel not taken in my youth. Along with a history of Europe from 9000 BC to 1000 AD (by Barry Cunliffe), I have just finished reading a book by Australian author Peter Robb about Caravaggio. I will be chasing more of the paintings by the wild artist who broke through all the conventions of his time. His time was the counter-reformation, more violent and corrupt than we are now. The implication of the book is that Caravaggio, the most famous painter in Europe at the time, was hunted down and murdered for his sexual orientation.

I need that avenue into the past, as the present sometimes is distressing, if I look outside my own easy life. Moruya is a home for my idealism as well as my energies. How else can I deal with the bad news that is ‘out there’, but by having an ‘in here’ that is safe and comforting? Some disgusting reports of violence against women in Egypt and Pakistan (we won’t talk about Australian politics just now) leave me feeling powerless, and my only response is a collage:

woman torn by war small

The name is ‘woman torn by war’, but I don’t think anyone would tell their 7 year old daughter that.

When we return, there will be more building, road works and excavations, hopefully some serious planting, and the new water tank nearly full. I’ve got a lot of cuttings going, some of them will become bushes in the projected landscape patterns. Several more workers have instructions and tasks to get on with in my absence. Bit by bit I am progressing my agenda, which is something like an ecovillage by stealth, although I have fantasies of a cult. Maybe a cult headed by a woman is what the world needs. But first I have have to design the hats, can’t have a cult without good hats.



Posted by Ronda Jambe at 3:02 pm | Comments (5) |
Filed under: Uncategorized

July 16, 2013 | Graham

The unspeakable in pursuit of the inedible

The gnattering (sic) Nabobs of negativity (enlisted in the cause of the politics of positivity of course) are at it again – manufacturing reasons to bash Tony Abbott. They must be desperate.

Yesterday Abbott said that an ETS “[Is] a so-called market in the non-delivery of an invisible substance to no one“. Not his best line, and definitely not as clever as some of those I’ve enlisted above, but vaguely amusing.

And what’s more not one part of it is untrue. The ETS is an exercise in futility, the market for trading in permits is rigged, it is an invisible substance, and the contracts don’t end in physical delivery and what’s more don’t generally end in a reduction in global CO2.

Indeed, expressed this way, the comment draws attention to the fact that many of the people involved in so-called carbon markets are actually shonks, and that a leading light in the early stages of the market was Enron, and that was the major reason it went broke.

It was just such a derivatives market that plunged the world’s banking system into chaos and led to the GFC.

Yet we’ve had Penny Wong fronting the cameras to ridicule Abbott.

I’m not sure whether she thought of the issue herself, or picked it up from Twitter where the issue first started to trend.

And now it’s everywhere, with wiseacres even pronouncing that CO2 isn’t invisible, including someone called Dr Darren Saunders who produced a photo of dry ice to prove that CO2 isn’t invisible or weightless which the Greens saw fit to retweet.

They must be desperate to discredit Abbott to carry on with this nonsense.

So I’m quietly pleased that it will have the alternative effect. Australian politics has been dominated by this sort of bullying for too long.

Away from the echo chamber of Twitter, where all the twits apparently gather, the punter in the public bar, or the punteress picking the kids up from daycare, will nod their heads and say “He must be onto something if all these smarty pants are piling into him like that.”

And so he is. Run RAbbot run.

Australian politics is much poorer if the audience is so dumb they can’t appreciate the humour in a verbal flourish. A case of “no turn unstoned”.


Posted by Graham at 8:26 am | Comments (1) |
Filed under: Uncategorized

July 12, 2013 | Nick

Parliamentary leaders should not be elected by party organisations

In my youth, I was enthusiastic about the idea of taking parliamentary leadership out the hands of parliamentarians. As president of the Young Liberals in Queensland, I proposed – unsuccessfully – to have a series of “primaries” to elect the parliamentary leader.

It was at a time when the Liberal Party was in crisis. Alexander Downer was suffering the death of a thousand cuts. The Western Australian division of the Party had gone rogue on land rights. The New South Wales Right had gone crazy in a more general sense. The Queensland Division was being the Queensland Division. And the murine John Howard, having conspired to kill off John Hewson, was waiting in the wings for the Party to return to him.

As it turned out, Howard was exactly what the Liberal Party needed, but in late 1994, the Liberal Party was on track to lose again. The last time it had selected an election-winning leader was in 1975. The last time it had won a federal election was in 1980.

My point is that this sort of proposal – election of a parliamentary leader by people outside parliament – gains currency when a party is in crisis. It is a solution proposed without really looking at the problem. It’s what Yes Prime Minister described as politicians’ logic:

That message runs deep in Kevin Rudd’s current project.

In the end, a political party (not just the Prime Minister) will answer to the people for its decisions. The Labor Party was set to be trounced, not least because it refused to do what the people wanted: return Kevin Rudd. The Labor Party, responding to the apparent wishes of the people, restored Rudd and is drawing a massive benefit from having done so. They will certainly perform much better at the election as a result of the change in leadership. It’s not beyond the realms of possibility that they might even win, although I think that is unlikely.

Kevin Rudd’s restoration is a plain demonstration that participants in the political process have the information necessary to respond to what the public wants and the capacity to respond. The proposal to tie up the ALP leadership in government and replace the power of the people’s elected representatives to determine who should be the Prime Minister with an internal Labor Party organisational process is a solution looking for a problem.

It is also anti-democratic, to the point of being immoral.

Why is it that the choice of Prime Minister should be reposed in the very few who join a political party? Those people have no responsibility to anyone. They are certainly not representative of the broader community. They cannot be. The point of a political party, and its attraction to those who join it, is to agitate for wider acceptance of policies not generally or widely accepted.

One of Kevin Rudd’s express hopes is that his proposal will broaden the base of the Labor Party, and so it might, but that is a benefit bestowed upon the Labor Party at the expense of the electorate at large, especially all those in the electorate who could never conscientiously join the Labor Party, but might prefer a Labor Government to a Liberal Government.

Unless you’re going to open up the leadership of the Party to the whole electorate, the best way to ensure that you have a democratically responsible leader is to leave the leadership decision to those democratically elected.

I conclude by returning to my observation that Mr Rudd’s proposal is a solution looking for a problem. There is a serious problem with the Labor Party at the moment, but it has nothing to do with the leader. It has everything to do with history. The Labor Party was set up to achieve a set of circumstances which now largely exist. Most workers have good conditions. Most have a pretty good work-life balance (and most who don’t would not vote Labor).

This lack of purpose is reflected in the shallowness of its parliamentary gene pool. Labor’s parliamentary ranks are awash with apparatchiks from the unions and from the Party. It’s difficult to imagine who else would join the Labor Party at the moment.

The Labor Party doesn’t need new mechanisms as much as it needs a new project.

Posted by Nick at 2:14 pm | Comments (2) |
Filed under: Uncategorized

July 11, 2013 | Graham

Rudd looking for pie recipe

A quick follow-up to my previous post. Kevin Rudd’s announcement today of a push for a “productivity pact” shows he knows he really should grow the pie, but simply has no idea how to do it, which confirms that new Kevin is old Kevin and not much different from real Julia.

Last time Rudd was Prime Minister he was similarly bereft of plans, and so was born the 2020 Summit, whose only fruit to date is the NDIS.

Promising to get together and talk after the election is eerily similar to Hawke’s tactic when catapulted into the Labor leadership in 1983 almost at the same moment Malcolm Fraser called the election.

Hawke had an excuse for a lack of policy. He really had only just taken over the job, which was that of Opposition Leader, not Prime Minister. Opposition leaders are cut some slack on policy. Not so Prime Ministers, and even less so, Prime Ministers who have been the author of most of the policies currently being followed by their government.

After 6 years you would expect Kevin Rudd to have some ideas of his own that he was prepared to share with the electorate this side of the election.

Which reminds me of Julia Gillard’s proposal to deal with the Carbon Tax via a citizens jury, which was deferral dressed-up as consultation. She hoped to skate around the question of a carbon tax long enough to win the election. As a tactic it never really worked, and she ultimately paid the price for the lack of an honest policy on taxing carbon.

Rudd has good reason for wanting to defer discussion until after the election, otherwise electors might pick up some of the discrepancies.

Discrepancies such as:

  • How does he propose to lower the price of electricity at the same time as an emissions trading scheme makes it more expensive?
  • How will he make the labour market less rigid without moving in the direction of Work Choices and “insecure employment”?
  • When was the last time his government cut regulations, and if it hasn’t cut them to date, how could it do so in the future?
  • If the government can’t reliably forecast a budget outcome, what weight can we put on a policy to lift productivity growth from 1.6 per cent to 2 per cent or better?

Rather than growing the pie, this looks like pie in the sky.

Posted by Graham at 4:33 pm | Comments (2) |
Filed under: Uncategorized

July 11, 2013 | Graham

So what’s he done to grow the pie?

At the Press Club today Kevin Rudd will pay homage to Clint Eastwood’s Republican Convention “oration on an empty chair”, by debating Tony Abbott on the economy without Abbott actually being their.

I guess he will do a selfie of this performance to post to Instagram along with his homage of yesterday to Norman Gunston.

While Kevin’s done a lot to grow his social media audience using a range of impressions, you can’t say the same about the economy.

If any journalist wants to derail him today, they should ask him to name any economic policy of the last six years that has actually had the effect of growing the Australian economy.

I’m struggling to find one, but I’m sure the prolix Rudd won’t be caught that short, even if he’s likely to be caught without decent cover.

The sad fact is that the last government that positively contributed anything to economic growth was the Howard Government.

So while he’s likely to point to taxation “reform”, health “reform” and education “reform”, and “steering us through the GFC” as policies of growth, in fact none of them has done anything to make all of us richer.

When it comes to Labor governments of the last six years the term “reform” has been used as often as not to mask “redistribution”. And while redistribution is not necessarily bad, a government whose only claim to fame is robbing the rich to give to the poor is likely to be impoverishing us all at the same time.

Which is why voters aren’t prepared to give the Labor party any marks on the economy. They know that Labor inherited a very healthy animal and that rather than programming it for higher performance they’ve been doping it with ever increasing amounts of debt.

They know that without John Howard, and Paul Keating, and Bob Hawke, none of these “reforms” would have been possible and we wouldn’t have escaped the GFC unscathed.

Those of us who have invested in businesses know that you can pay any number of fancy experts to tell your bankers and investors how well your business is performing, but at the end of the day the only measures that count are what’s in your bank account, and how much you own, net of debt.

On those measures Labor has done nothing for Australia, and they are the measures, economically, that count.

Posted by Graham at 8:22 am | Comments (1) |
Filed under: Uncategorized
Older Posts »