Wednesday, November 24, 2010

On the QT: Lift and separate (structurally)

And so Julia came to the rescue.

After a fair bit of bluster and a good deal of brinkmanship by the Senator Xenophon, Julia got into the room, did the deal and released the summary of the NBN Business Plan. It is being reported as a 50 page summary – but it’s only 36 pages. 

So what does the summary tell us? Well for a start it tells us that perhaps the ALP needs to work on its strategy.

The document is one the ALP should want out in the public domain.  They should have been handing it out last Monday morning. The only possible reason I can think for them to keep it in reserve and thus get to a point where releasing this innocuous document would be classed as a back down, is because they were worried that if they released it earlier, Xenophon would be demanding more – more perhaps than they really wanted to give out. 

As such I guess you can say it is good poker by the PM. She kept quiet, let Turnbull and Abbott make more and more out of the business case than it ever was going to be (seriously did anyone expect a business case from NBN Co to say that there was no business case for NBN Co?) and thus when Xenophon started saying he wouldn’t vote for the structural separation of Telstra unless the Government released the business plan, she was able to come in and save the day by getting him to agree to just having the summary released.

It is good politics, but I do worry a bit that politics over policy seems to be the order of the day.

What it also shows (again) is that Julia is a master negotiator. Doing what Rudd was pretty loathe to ever do she actually got involved with negotiations with Senators and got the job done. image

Let me be bold and say this right now: we will have a price on carbon before the next election*. It will be a shitty, God awful, drag-down, knock them out negotiation, and then Julia will get involved and the deal will be done. This is a woman who knows how to work with people, and most of all she bloody well likes to win.

So what is in the NBN business plan? Well to be honest, not a hell of a lot more than we already knew. Some interesting bits are the Product Release Road Map: a series of five “Product Drops”. The second of these was “Emerging Entertainment Capability” – ie being able to deliver TV through the internet (called triple play because it will be delivering TV, internet and telephone services).

I won’t go too much into it, because it is not my field and I’d only make a fool of myself (yeah , I know, why stop now), but this document is not a real financial business plan. It is a political business plan. The entire point of this summary is not to get people to buy shares in NBN, but to get Xenophon and Fielding to buy into it politically. So for all those who bleat and blather about it not being enough, about there not being enough figures, about it not being what a private company would be required to provide, I say, sorry, you’ve missed the point. Gillard this week does not care what you or Turnbull are saying: she only cares what Xenophon is saying, because he had the vote. She did enough to have him coming out and praising her:

YNDAL CURTIS: Nick Xenophon, have you won a back down from the Government?

NICK XENOPHON: This is not about a back down. This is about a sensible compromise being reached and this is good for consumers, it is good for businesses and it is good for certainty for Telstra shareholders as well.

LYNDAL CURTIS: You met Julia Gillard twice on this, talked to her again today. Was her decision to get involved in negotiations over this the key factor in changing your mind?

NICK XENOPHON: I met with Julia Gillard twice last night and I think it is fair to say that the Prime Minister's intervention did make all the difference to bringing this to a conclusion, to a good conclusion.

At this point Julia was going to do just enough to get that result – why pay over the odds for a vote?

And just in case the policy gets forgotten, the result of all of this? Telstra will be separated – the wholesale and retail arms will be split.

This is no small thing.

This is the absolute holy grail of communication's policy. 

Many commentators (myself included) have been pretty hard on this Government's lack of reform. George Megalogenis on News Radio this morning made the point that Labor under Rudd and Gillard too often seems to think reform is doing things that are popular and easy.

Well this may be popular (though probably not greatly – who really sits around talking about the governance of Telstra) but it sure as hell was not easy. Any one who thinks Telstra was going to allows itself to be split without a big fight is kidding themselves. Yes they are getting a big payout here, but they are giving up the things they held most dear – its copper network and exchanges. Howard kept the two arms together so he could sell Telstra for the biggest price (its so easy to pay off debt when you just sell something – beats the hell out of imposing spending restrictions on your budget). After that the Libs tried to get them to separate “operationally” – ie put up Chinese walls etc etc. The industry knew it was bollocks – that is unless you think Optus was treated by the wholesale arm of Telstra the same as it treated the retail arm of Telstra?  If you think that you’re at odds with the ACCC.

Now it is split. Well done Conroy (by the way ignore pieces that says Conroy is in trouble, the guy has had a very, very good year), and well played Julia.


QT was dominated by the Liberal Party quoting The Australian. Nothing new there I know, but they were quoting some leaked minutes of the ALP Caucus meeting the day Rudd got knocked. The big thing was Rudd made a speech were he apologised for everything. Apparently this means that everything he says is true. I guess we should ignore the emotional roller coaster the guy had been on and that he had most likely not had any sleep and that he was feeling lower and more pissed off than he would ever have felt in his entire life. But let’s ignore that.

He said his Government had made mistakes. 

Take for example this bit of his speech:


The Oz and the opposition claimed this was Rudd admitting to everything they had been saying. Well no. Yeah mistakes were made in the implementation of the insulation scheme, and yes there was some waste and mismanagement of the BER. But the biggest mistake Rudd made was allowing The Australian and the opposition to report and talk about that waste and mismanagement out of context. Finding some poorly designed and constructed buildings is all well and good, but a proper media would acknowledge the 97 per cent of cases where good work is done. And a better advocate as PM would have made such a fact impossible for the media to ignore.

But still this is all old hat. Elections are amazing things. They do wipe the slate clean, and oppositions who continue to fight on issues that existed prior the last election are doomed to fail at the next election. Take Julie Bishop’s question to Gillard. She referenced Rudd’s speech where he said that Gillard and Swan had advised him to dump the CPRS, and she wanted to know why did she call for it to be dumped.

The problem of course is it was dumped only after the Libs dumped it – so they can’t very complain that Gillard dumped it when they themselves did it as well – or do they want Gillard to bring it back? The point is NOW Gillard is for a carbon price, so too is Rudd, so too is Swan. The Libs can talk all they want about events in early 2010, but they won’t win the CPRS fight twice. The caravan has moved on, Abbott and Co need to keep up.

And so we have one day to go. It looks like the Government will end on a high note – the passing of the Bill splitting up Telstra – and Abbott leads a party bereft of ideas. Sure the ALP is reform-light – reform in the 80s,90s style of let’s cause some pain. But in the next 12 months they’re going to attempt to  put the NBN into reality, bring in a mining rent tax, and put a price on carbon. If they achieve all three it will be had to say they are a do nothing Government, and it will be very hard for the Libs to win in 2013 with a policy program that consists basically of “Stop the …”.

This past fortnight in QT the opposition have pretty well targeted Gillard only. Usually in the early part of a Government the opposition likes to find a weak link Minister and go them . To do that however requires some sort of policy to challenge them on, and the opposition doesn't really have anything at the moment, and so Gillard fields the questions, and the rest put up their feet and wait for their turn at a Dorothy Dixer.

Next year the Opposition will need some policy so they can test out some of those Ministers, because Julia ain;t going to fall.

*yes I realise saying she’ll get a price on carbon is a massive jinx. Blame me if it doesn’t happen. 


Sonia said...

Gillard in QT is very good. She is far better in this environment than when she gives a speech.
So only one QT to go although I may not be able to tear myself away from the cricket to watch it

Anonymous said...

I would like to agree with you Grog re this: "and it will be very hard for the Libs to win in 2013..." but I'm afraid that the media wil kick shit out of the ALP [and the Greens] in the next 3 years and the COALition will win 2013 in a canter no matter what the government does or does not do.


timjkergan said...

There is some good reform work being done by DEEWR on bringing the early childhood sector into the 21 st century. There will be some pain. Garrett has carriage so it will be a big fight. Also reference Brough and the collapse of ABC.

Greg Jericho said...

Fred, Can't see it. Firstly, I wouldn't bet money on Abbott surviving to the next election. The US economy will keep improving (low base, yes)- so China will stay good.

The media kicked the shit out of Rudd, and the ALP shot itself in the foot multiple times and still they got over the line.

The ALP had a terrible campaign. I don't think you could have a worse one. The media were useless and slanted on very many issues, and still they got over the line.

Julia was the first woman PM (don't underestimate the difficulty of a woman winning), had been in the job for all of a minute, and still they got over the line.

I'm not saying they've got it sewn up, but my prediction is this is as close as Abbott will get to being PM (and I think quite a few in the Lib Party know this).

There are too many in the Lib Party who want some policies. Abbott hates policies - he is useless with them. The Libs might seem all nice and united now, but over Christmas a few will wake up in the middle of the night and scream, "How the hell did we lose???!"

Anonymous said...

I'd agree with you Grog about the NBN, Mining Tax, and Carbon Price. I think that they will, and have to get those done in 2011 (but maybe Carbon Tax will take till early 2012).

I'd add in Murray Darling Basin / Water reform. It will be hard as there is plenty of water around at the moment so some of the urgency is gone, but its really now they need to do it so that people in the Basin are better prepared for the next big drought which WILL come.

Still, they have had a good end to the year and the Coalition will spend the xmas break chewing the furniture and desperately trying to justify Aboot as leader to themselves.


Pip said...

I'm with you on Abbott , Greg, he hasn't really landed anything of substance on Labor for all his efforts. He even came out again this week for another sporty photo op. which didn't last long. Short of Julia appearing in a purple polka dot bikini to steal his thunder he'd better come up with some real policies before next year or he'll go the way of Brendan and Malcolm. Oh wait, Malcolm is still there....although he also needs to start talking sense as well.
Reporters have been talking about the "business case" and at other times the "business plan" and it sounds a lot like they get the two confused, as do I !! but if they want to write about them shouldn't they figure out the difference first ?
Anonymous, I agree the media will continue to kick the shit out of Labor along with the Greens, and the Independents. News Ltd. is already on Oakeshott's case.
By the way did anyone see the story of the Woodside citizens who went to Canberra with a view to seeing the PM. They didn't succeed, but one Mr. Prince was very concerned that the refugee mothers and their children might spy on the Army base at Inverbrackie, and the citizens of Woodside.
Present at the meeting were Messrs. Abbott, Morrison and Briggs. According to AdelaideNow "none took issue" with the residents' concerns about the spies. That'd be right.

drsusancalvin said...

And finally there is some positive press emerging.

han said...

You are giving too much undeserved credit to the Gillard team. There is a simpler explanation for the unnecessary fight over the business plan: Conroy stuffed it up (exhibit one: who got the idea of seven years of confidentiality, then back down to two, then finally down to 2 weeks? Conroy blamed it on an "overly eager" bureaucrat") . After all, this is the same team that dreamed up citizens assembly, the new Julia Gillard, and they couldn't even get the education ministry's name right when the independents handed them power.

Anonymous said...

(by the way ignore pieces that says Conroy is in trouble, the guy has had a very, very good year)

Agree with that.

Now, if only we could get him to give up his filtering scheme.

Richard Green said...

I suspect that by far the largest reason the press gallery consider Conroy a failure is that his strategy completely disregards them as players. Not resentment that he's ignoring them as such (though perhaps that has role), but because the only measure they know for success is "getting the message accross", "communication", "cutting through". Not anything like passing legislation or getting things happening. Conroy seems be far bloody minded to care about spinning anything and actually ends up getting something done. I wish the government was using that bloodymindedness in service of a carbon price rather than a filtering scheme, but it's the only way you're going to achieve anything.

If you play to the gallery, they'll give you mild plaudits for a while and then (without a trace of introspection) dismiss you as being all spin and no substance. You may as well be all policy and no spin and have the media attack you constantly. You'll have a leagacy, and only political tragics are paying attention to the race calling anyway.

Richard said...

Gillard won the Election?? 36% of the vote. The Mining tax will not get up as Australia will not kill its golden goose WA, the only reason Pollies from East can pontificate on the utter Bullshit concept of Global Warming is that the money flows from mining.

Clytie said...

Some people do spend a good deal of time talking about the structural separation of Telstra. If you're connected with the Internet services industry at all, you've been losing money and market share because Telstra sells BigPond retail more cheaply than it charges you for wholesale.

Many frustrated mutters and chewed fingernails have occurred over this situation. Dealing with Telstra (for an industry rep.) is bad enough, but being cheated by them is much worse. Thanks for the ACCC link in your blog post.

We're all holding our collective breath, hoping the Telstra separation goes through, and the NBN gets built. It will be good for the country, not just for the Internet industry.

It will be particularly good for regional centres (like the Riverland SA, where I live) which are currently limited to ADSL1 or dialup, due to Telstra's refusal to develop the exchanges.

Hope is a wonderful thing. :)

L said...

(though probably not greatly – who really sits around talking about the governance of Telstra)

Have to agree with Clytie - a lot of people nurse a belly full of smouldering anti-Telstra rage. People in IT, whose industry has been held back by them for years; country people, who (I've noticed) tend to aim at least some of their general dissatisfaction with telecommuncations services in Telstra's direction; and anyone who's ever had to deal with their tech support for any problem that can't be solved by unplugging the cable and blowing on it. Tell any of them that Telstra's being 'forcibly separated' and they'll cheer on principle even if they don't know what it means.

Also, I hope you're right about the carbon price, but I will be beyond astonished if it actually happens. The Govt is still getting used to the idea of doing things that will piss off parts of the media - it has a long road to travel before it starts doing things that will directly harm the short-term financial interests of large parts of the electorate. Wanna bet?

Pip said...

Have a good break Grog, you've certainly earned it after a busy, and at times, very trying time.
Your blogs are freshingly sensible compared to ...well there is no comparison.
See ya next year.