Balneus

Australian Lefty on Politics, Governance, Science and Info Management

Oz climate policy levers Jeffed by state premiers

Posted by Dave Bath on 2008-12-21


The real problem changing Australia’s course to one that is sustainable was created years ago: the most relevant and powerful policy levers were smashed, mainly by right-wing state premiers (of both Liberal and Labor right wing flavors).

Compare how amenable power suppliers are to being told "sell less stuff" when the supplier is a normal company (whether private or publically listed) versus an agency of government (whether a self-funding quango or a standard government department).

The company would bleat for government handouts in compensation (and probably ensure the largesse with promises of donations to the party in power), while the engineers who typically ran such utilities would have said "Yippee!  We don’t need to worry about the costs of upgrading the power-handling capacity of all those transmission lines and pipes!".

The problems deciding on correct policy for essential services and implementing them successfully by public service or commercial enterprise are the same whether those essential services relate to education, health, energy, communications or defence.

How easily have states managed military mercenaries over history?  Not very well, and recent state use of mercenaries such as Halliburton supports the idea that mercenaries are not only more costly, but corrupt the process that might lead to the best outcomes.  Sooner or later, the mercenaries (or pampered Praetorians) determine state policy.  Perhaps only once did they make a wise decision, by selecting Claudius the Stammerer as Emperor of Rome (requiring money in return), and even then that was merely a happy accident.

The new Praetorians and mercenaries now determining (or at least derailing) state policy are the "public" transport companies, the power (mainly Big Carbon), water and telecommunications utilities.

Too often Roman emperors served at the pleasure of the Praetorian guard, who were the emperor’s nominal guardians but actually their greatest threat.  If it wasn’t the Praetorians, it was a money-minded soldiery demanding boons of their general to support his ambitions to the purple.

These days it appears that governments serve, through the threat of strangulation of campaign funds, at the pleasure of utility companies that are no longer controlled by the state.  Where the previous arm of government managing communications, the PMG, bowed to the service levels demanded by government, we now watch a privatized Telstra thumbing its nose (that’s putting it politely) at government demands for even a half-satisfactory broadband network.

When the opposite has occurred, and companies were mere cyphers for government policy, such as the East India Company being essentially an arm of British foreign policy and colonial ambition (and some might also point to Gazprom), the objectives of the state, however deplorable, were met.

Now the righties will point to Stalin and Mao and go "central control always leads to disaster", without acknowledging that there is very little difference between megalomaniacs lusting after power, whether they call themselves communists or fascists.  (Note that megalomaniacs lusting after the high opinion of history, such as Julius Caesar, can be extremely useful).

The righties will also bring out the argument that utilities require capital investment (yep, agree so far) and that this is best done by companies or PPPs, (even though governments can, except in extreme cases like Zimbabwe borrow money at a lower rate).  I’d also counter with my experience developing treasury software, and supporting them in the treasuries of traditional government utilities (such as the State Electricity Commission of Victoria) and finance houses (which I won’t name).  In my personal experience, the treasuries in organizations run by engineers were better run than the treasuries of the finance houses, as the government engineers were more concerned with long-term planning rather than quarterly balance sheets.

(As an aside about long term planning, it’s worth noting that whenever the SECV put in a power pole, they pencilled in the week 30 years hence that it would be replaced, and put a few samples of each new type of pole in the most miserably wet part of the state, checking them annually to confirm the adequacy of the 30 year plan.)

Personally, if I was dictator of Oz, I’d refuse to give Big Carbon any boons of free carbon permits, watch their share prices plummet, then step in and buy them, calling it a "rescue" rather than the "nationalization".  I’d do analogous things in all the other areas where the state needs robust policy levers: telecommunications, water… the list goes on.

There’s only one bit of free-market philosophy I’d keep for essential services: the idea of performance based bonuses.  If we truly applied that concept to those who have been mismanaging the finance industry, the trains, etc, etc, they’d be all put up against the wall and shot.

The last Victorian Liberal Premier, Jeff Kennett, by discarding government control over the utilities and granting favors to friendly companies, gave rise to the verb "Jeff", usually found in the passive voice "X was totally Jeffed", (and Brumby has continued to Jeff us).  Well our climate policy levers have been, and are ever more, Jeffed… only now it’s Federal Labor doing more Jeffing than the premiers.

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3 Responses to “Oz climate policy levers Jeffed by state premiers”

  1. […] "Oz climate policy levers jeffed by state premiers" (2008-12-21) which applies just as much to financial policy levers as those required to manage climate change risks […]

  2. […] "Oz climate policy levels Jeffed by state premiers" (2008-12-21) points out how the ability to implement policy was castrated by privatizing utilities. […]

  3. […] is better than RecessionKrugman echoes in favor of nationalization « Balneus on Oz climate policy levers Jeffed by state premiersKrugman echoes in favor of nationalization « Balneus on Buggered: No wonder how, now […]

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