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Here was South Australian Premier Mike Rann last Sunday on the occasion of Mary MacKillip’s canonisation:

“The values that Mary MacKillop cultivated, nurtured and lived, are the values that underpin our regional towns and communities – an ethos that embraces pragmatism, equality, neighbourly compassion and stoicism in the face of adversity.

For hers was not a dream of self-aggrandisement, personal wealth or power. Her mission was to give comfort and solace to the poor, education to the deprived, hope to society's forgotten underclass.

In Mary MacKillop we see - embodied in shining, heavenly raiment - the pioneering Australian spirit. Our neighbourly, hard-fought ideals of communal decency and good fellowship, and their triumph over power, prejudice and bigotry.

Here is a life to be celebrated, and learned from.”

So what have we learned? What do we celebrate? Here, yesterday, were the people of Woodside in South Australia, the very state that celebrated MacKillip as one of its own:

VOX POP 1: This is something that will wreck this beautiful little town.

VOX POP 2: And we don't want a prison in our backyard lit up with spotlights 24 hours a day. They are not going to assimilate into the community. All they are going to do is their kids are going to come to school and go back behind the fence.

VOX POP 3: Refugees aren't criminals. They are not illegal.

VOX POP 4: Hang on. Yes they are. They have come in illegally so we don't trust them. That's what we're suspicious about, that they are coming in by the back door. They sneaked in.

Last night to protest 400 asylums seekers being moved in to an army barracks at Inverbrackie (near Woodside in the Adelaide Hills) more than 500 people attended a  meeting at the Woodside Institute. The people who attended this meeting were outraged that a whole 400 people – a large percentage of whom will be children – would be coming into their town area. Why? Well that’s not clear because there was not a hell of a lot of logic on display.

There was anger that health services would be stretched, and then when informed that the detention centre would have its own medical facilities there was anger that they should have better services than the locals.

There was anger that the children would be attending the schools, but there was also anger that they would not assimilate in to the community.

There was anger that there would be spotlight “24 hours a day” (not sure what good the lights will do at noon), but when told the fences would be “low level fencing, it could be like pool fencing or colourbond fencing” there was anger that the security would not be enough.

My old home state has not covered itself in glory this past 24 hours. This reaction coupled with Karen Barlow’s brilliant but shocking report of alleged workplace practises at chicken processor Baiabda in Adelaide does not make the state seem all that great. Barlow’s report contained some awful allegations made by the largely migrant workers:

ANYUON MABIOR: I was called a black c*nt, a black cheat, dumb and everything that has spoken to me and I just (inaudible) for the sake of getting money to solve my problems.

KAREN BARLOW: Workers say they're afraid to raise problems at the factory - even something as small as not getting a pay slip. And Anyuon Mabior claims he and other Adelaide poultry workers have experienced on-site punishments, in his case for refusing to use a forklift in what he says was an unsafe manner. He says he was taken to a termination site where they stun chickens using gas.

ANYUON MABIOR: They took me there for - as a punishment, to make me feel like I've done something wrong. And that's when I've looked like, is it how everyone is treated in Australia, or is it because all the workers here are migrant?

KAREN BARLOW: How long were you sent there for?

ANYUON MABIOR: I work there for 30 minutes and I was really very sick.

KAREN BARLOW: What happened to you?

ANYUON MABIOR: Like, I feel like I'm contaminated by the gas, because I inhale some gases and it give me a lot of coughing and give me a lot of dizziness. And when I leave the (inaudible) I went to my doctor and I was given some medication by them.

It’s rare that a report on chicken processing is detailing that the chickens get better conditions than the workers.

Over on The Advertiser’s website the comments on the detention centre came thick, fast and ugly (no sight of any mention of Baiabda):

Mick of Adelaide Posted at 1:11 PM October 18, 2010

Send them back on the boats from which they came. I for one am absolutely sick of half my wages being taxed to fund this BS!

Yep, half his wages. Hell he must be on a nice wicket to be in that tax bracket.

Brad of Greenwith Posted at 1:18 PM October 18, 2010

Just send them home! Kids or no kids... Dont come here. Just go back or go else where.

Angela Posted at 1:35 PM October 18, 2010

What a pathetic decision. The issues of these illegal immigrants are not our problem. Who cares whether their children are coping - the parents are responsible for them being in the situation to begin with. Let them take responsibility for it.

“Who cares whether their children are coping”… what can you say?

Mandy of Brisbane, QLD Posted at 6:18 PM October 18, 2010

This is a disgrace. I was born and raised in Woodside and my parents are still living there. This has devastated them and now I don't look forward to coming home each year for Christmas as much. I knew that Julia would make a mess of everything... This is only the beginning.

Amazing. Boy I’ve tried a few excuses in my time to get out of going back to the parents for the holidays, but not going because a detention centre is being built on an army barracks is a new one. I wonder if it will fly?

Thankfully there were a minority of sane comments among the hate:

Dave of Morphett Vale Posted at 4:15 PM October 18, 2010

My dad lived at Woodside with his family when they got off the boat (as "legal" refugees from eastern Europe) in 1949. A site such as Woodside will be far less damaging to refugees than a spot in the desert like Woomera, and will be a cheaper option for all of us in the long run.

Jonathan of Adelaide Hills Posted at 3:41 PM October 18, 2010

The irony that many Adelaide Hills towns were founded by German refugees is obviously lost on many NIMBY's.

These comments highlight why I am so disappointed by the response, and also why I am suspicious of it. South Australia more than any other state is a state founded on migration. There were no convicts, you only came to South Australia if you wanted to. And many of those (including my forefather) were Germans. Some of those (about 5 per cent) came because of religious persecution, but most came because they wanted a better life.

Here is a description of how things were:

Most of the early German immigrants were extremely poor and therefore migration to South Australia was an improvement in both economic and religious matters. Although there were many exceptions, most Germans kept mainly to themselves and married their own kind, kept up their language, customs, such as the Liedertafel and skittle alley, religion and education system. Wherever they went they established their German schools.

Replace the word German with Afghan and ask yourself if things have changed?

And yet guess what: the German migrants did assimilate – they spread and became part of the culture – it is impossible to imagine South Australia without the impact of the German migrants – and yet we are talking about such a vastly smaller number that it is doubtful the direct impact on the culture will be more than negligible – at least for many years.

Oh yeah, my lot came “legally”; they weren’t queue jumpers. Well here’s the question, and the first person to answer it can be Liberal MP Jamie Briggs who was at the Woodside meeting to stoke the fire  listen to his constituents. Show me the queue. Maybe I have been completely wrong about all of this and the media just hasn’t bothered to report it, but if there is a queue, find me one person in it who knows that next year they will be coming out to Australia (or Canada, or America). Then find me someone who knows they will have to wait two years, then someone who has to wait three years. Find me any sense of a queue.

The fact is there is no queue – as the Parliamentary library background note demonstrates:

Are asylum seekers ‘queue jumpers’?

There is a view that asylum seekers, particularly those who arrive in Australia by boat, are ‘jumping the queue’ and taking the place of a more deserving refugee awaiting resettlement in a refugee camp. The concept of an orderly queue does not accord with the reality of the asylum process. Paul Power, CEO of the Refugee Council of Australia (RCOA) notes that:

Implicit in this view is that Australia should not be bothered by people seeking protection under the Refugee Convention and that genuine refugees should go to other countries and wait patiently in the hope that Australia may choose to resettle them.

The reality is that only a small proportion of asylum seekers are registered with the UNHCR:

UNHCR offices registered some 73 400 applications out of the total of 861 400 claims in 2008. This number has decreased compared to 2007 (79 800 claims). The office’s share in the global number of applications registered stood at 9 per cent in 2008 compared to 15 per cent in 2006 and 12 per cent in 2007. As the overall number of applications has continued to rise, states are increasingly taking responsibility for refugee status determination.

Once registered with the UNHCR, many refugees seek resettlement to a country such as Australia. Refugees do not have a right to be resettled, and states are not obliged under the 1951 Refugee Convention or any other instrument to accept refugees for resettlement. It is a voluntary scheme co-ordinated by the UNHCR which, amongst other things facilitates burden-sharing amongst signatory states. Resettlement therefore complements and is not a substitute for the provision of protection to people who apply for asylum under the Convention.

According to the UNHCR, less than 1 per cent of the world’s refugees may be resettled in any given year:

Millions of refugees around the world continue to live with little hope of finding a solution to their plight … resettlement benefits a small number of refugees; in 2008, less than 1 per cent of the world’s refugees directly benefited from resettlement.

So the next time any report includes the phrase “queue” you know you are reading or listening to someone who has no idea of the facts (or is flat out ignoring them).

To be honest, I doubt the 500 people who attended the meeting reflect the real view of most people who live in the hills. My suspicion is more than a few of those who attended the meeting don’t even live in Woodside. If Jamie Briggs wants them to be his supporters, then go for it – but he can then forego any crud about him being “a moderate”. My view is that the real majority of the residents is voiced by people such as Kim Galdigau who “said the Christian church community in the area wanted to know what it could do to help”.

My hope – and actually my belief – is that when the asylum seekers do arrive they will be treated well and very soon it will become hardly an issue.

Let us hope so, lest the view of South Australia become one of angry people not having any care for those in desperate states.

And lets hope as well that when the asylum seekers do finally settle in this country they don’t end up in a situation like the one detailed in Barlow’s report.

The morning laughs started early when Joe Hockey went head to head with Louise Yaxley on AM (so good it is here in full):

JOE HOCKEY: I want the Treasurer to exert the influence that a competent and respected Treasurer can wield and I think the banks do listen when a Treasurer uses all the levers in his armoury to place pressure on them, but this Treasurer's not being listened to and on 30 different occasions he's been ignored.

Yaxley asked the very obvious question:

LOUISE YAXLEY: What levers does he have that he could be using that would make them pay attention?

JOE HOCKEY: Well the banks have a constant interaction with government, be it from a regulatory perspective, a credential perspective or even since the global financial crisis, in a commercial perspective getting government and tax payer support for their own fundraising endeavours. So I would say that the Treasurer is not using the obvious levers available to put pressure on the banks to stop them from raising interest rates outside of the changes brought about by the Reserve Bank itself.

Ah, I see: “obvious levers”. Yaxley ain’t letting that hogwash get past her:

LOUISE YAXLEY: Just to go back to the levers, you've made it very clear that one of them is to point out that what the minutes of the Reserve Bank have said about bank costs, what else should he be doing?

JOE HOCKEY: Well there are a range of different initiatives that are available to a Treasurer. The banking system itself is heavily regulated.
I think you can use a whole lot of levers and as a former financial services minister from time to time, I used them, to persuade the banks not to gouge consumers. It's up to the Treasurer to use those levers.

Oh, a “range of levers”. Nice Joe, you’ve fronted up with out any details. Hmm wonder if that’ll pass muster?

LOUISE YAXLEY: Can you give us any further indication of what you mean when you talk about the levers though, what the things are that he could be doing?

Nope – Yaxley drills him for the third time in a row to come up with some specifics.

JOE HOCKEY: Well there are a raft of levers that are available that may be punitive in measure when it comes to the banks, but the banks ought to understand they rely heavily on a government and a parliament that delivers good will and if the banks trade off that good will to gouge the Australian consumers, then if the Government doesn't move to put pressure on the banks then the parliament will.

A “raft of levers now”? So we’ve got an obvious range of a raft of levers. Gee that sounds impressive. And to top it all off he’s got some ideas for parliament to do some things to the banks… oooh interesting. Yaxley poses a question which you would think Joe would be expecting:

LOUISE YAXLEY: What do you mean by that?

JOE HOCKEY: Well, we'll wait and see.

Wait and see?? Oh dear. Economics policy for Joe has become a bad 1980s two part episode TV show. Oh my God, will Jake get himself out of that trap in time to save the Fatman? Oh wait it’s already 8:29pm, oh no it’s a two part episode! And here it comes: to be continued…

Luckily for us before the second part we had a comic interlude from Liberal MP Don Randall, who arrived at Parliament House to do a doorstop and noticing that the place where the cameras wanted him to stand was an ABC logo he stomped on it and then when someone suggested it was “your ABC” he scoffed and said "Not my ABC. Gay-BC”

Gay-BC? Huh? Seriously, what?

Firstly it would be nice if Randall could explain why he thinks the ABC is particularly “Gay”, and also why is he deciding that using “Gay” as a slur is ok? I guess it is just one of those cases where because he is considered a bit of a nothing; a bit of a colourful character, he’s allowed to get away with such things. He didn't bother to make a personal explanation on the matter after Question Time, so obviously neither he nor the Liberal Party thinks is is that big a deal…

He did however make a personal explanation about the next thing he said at the doorstop when he was asked about the policy to getting parliament to take action to intervene on banks raising interest rates:

“Well, you know, this is typical of, you know, Bob Brown before the election and during the election wanted to talk about a super profits tax on the banks. This is just another one of their, as I said lunatic fringe-type ideas.”

Oh dear. Your day isn’t good when making a joke about Gay-BC is actually a high point.

Needless to say Joe had to come out and front the press before Question Time. He stood in the Parliament House courtyard and gave one of the most baffling press conferences this side of Tony Smith trying to talk about broadband. All that was missing from Hockey’s talk was mention of the opposition having a secret plan to fight inflation.

It took him 15 minutes and the entire press gallery shouting “what levers!” (one wag even asked him to name three!) before he provided some specifics.

Now here’s the problem for Joe and the opposition. First off – why was he even bringing this issue up today? The story for the Libs today should have been the MRRT and the kerfuffle over whether or not future royalty increases are included in the deal or not. I mean if Libs are going to ignore the guidance of The Oz, you’ve got to wonder what is the point. Oppositions only need one issue a day – oppositions can focus on the news cycle,  they don’t actually have to do anything like govern the country, so all they need to do is pick one major issue each day that they know the Government would rather not talk about.

Poor George Brandis has been battling away in estimates finding out that the Resources, Energy and Tourism Department didn’t know that Treasury was getting legal advice on the constitutionality of the MRRT  and yet Joe blows that off. (OK it is pretty irrelevant given RET doesn't need to know if the legislation which is only in the drafting stage might be unconstitutional, but hey, at least George is trying!)

And so firstly Joe is bringing up an issue that could have been left for next week – or at the very least before the next RBA meeting. Secondly, the big problem for Joe is when he did finally get around to coming up with some “levers”, they actually deserved some discussion:

JOE HOCKEY: There are a range of levers that are available to the Government. Well name three; okay: three of them are - they're funding the residential mortgage backed securities market right. They could differentiate between support for smaller banks, smaller entities and the banks, larger banks themselves if they are getting any support.

Step two; fees are paid to APRA and they can be varied as well.

Step three; the banks have new capital and liquidity rules associated with Basel 3. The Government can negotiate on some of those as well with the banks.

Step four; the banks are always looking for greater opportunities through financial services reform to deliver better outcomes, include reducing red tape for the banks themselves and so on it goes on and on and on.

Problem is by this stage he had pretty well blown his credibility. He had wished and washed all over the place, back flipped (or as The Oz calls backflips when done by the Liberal Party – he “shifted ground”) and blathered, before finally saying what he should have been saying when he was sitting across from Louise Yaxley early this morning. 

The other problem is his blather about the banks ignoring Swan 30 times is a tad stupid – really they’ve ignored him 30 times? So each time he has told them not to raise interest rates they have raised them? Gee I must have missed that. And he should also stop referring to brave Peter Costello standing up to the banks. The only things that scared the banks back when Costello was treasurer was Rams and Aussie Homes Loans.

So Hockey is right when he talks about the residential mortgage backed securities market – if that is bolstered there is a better chance that the banks will face some competition again.

The other problem for Hockey is his quoting of the RBA saying that borrowing costs are now down and interest margins are up (ie banks are making good money on their borrowing) is that is rather kills his whole “crowding out” thesis.

So only a few problems, for Joe. Not a bad morning’s work.

And so on to Question Time.

The first question was by Abbott on the MRRT. Was Julia troubled? Well no. She was even less troubled by Abbott’s supplementary. Thus far Abbott really hasn't come to grips with the whole supplementary process – mostly because he plans them in advance and thus he asks them even when there is little reason. The other problem is having just one supplementary per Question Time is rather pointless. It’s a bit like only being able to bowl one bouncer per over.

Wayne Swan had the first Dorothy Dixer. To say he had good material to work with is an understatement. Unfortunately he took his free hit and missed. Not for the first time in three years I sighed and wondered what the great PJK would have done with Hockey’s statements. Swan had another go with the next Dorothy and he was much better as he made use of Randall’s stellar morning work. It was obviously better because Chris Pyne was up and down quite a bit:

Mr Ripoll, 2:11:39 PM, to Mr Swan (Treasurer), Point of order, Mr Pyne, 2:13:06 PM, Mr Swan, 2:13:52 PM, Point of order, Mr Pyne, 2:14:50 PM, Mr Swan, 2:15:56 PM, Point of order, Mr Randall, 2:17:37 PM, Mr Swan, 2:18:37 PM

But even still, Swan’s answer really didn’t leave you remembering any of his lines.

Gillard was asked about East Timor (again) and again she did it easy, though her response did stray into John Lennon territory when she started listing the things she didn’t believe in:

I do not believe in three-word slogans, I do not believe in boat phone and I do not believe in the Prime Minister of the nation pretending that he or she is in a better position than a patrol boat commander to deal with a situation at sea.

A few journos rightly pointed out that during the election she was pretty happy to believe in a two word slogan, and they are right – neither side can look back to that four week campaign with much pride.

An interesting aspect to Question Time is to look at who is asking the questions. Here was the line-up today:

Mr Abbott
Mr McCormack
Mr Secker
Mr Wyatt
Ms Griggs
Mr Hockey
Mr Vasta
Ms Gambaro

You’ll notice after Abbott, only Hockey (who was almost forced to ask a question after his morning work) from the front bench asked a question. Now it is good to give the back benchers some questions to show their electorate they care, but no minister is really going to be troubled by a non-shadow Minister. Where has Turnbull been? Yesterday he introduced a Private Members’ Bill to try and force the Government to do a Cost Benefit Analysis of the NBN and yet he gets no questions?

Chris Pyne has Garrett now as his opposite and yet he gets one question in a week?

I think the Opposition doesn't really know what it is doing yet. It is almost like they are waiting for the Christmas break and then desire to start afresh next year. They certainly don’t seem to have their hearts in it, otherwise their tactics committee wouldn’t let Gambaro bowl up such a long hop to Gillard:

Ms GAMBARO (3.15 pm)—My question is to the Prime Minister. I refer the Prime Minister to Solar Wise, a small business in Queensland almost sent broke by the government’s roof batts program. If Solar Wise and other small businesses like it that trusted the government to get its roof batts program right now cannot rely on the government to fix it after it went wrong, why should they trust the government on anything?

Now the first part was fine, but ending with the smarmy “trust the government on anything” gave Gillard the opportunity to talk about “anything” – which she did, with ease.

It all was part of what I guess in retrospect was some sort of a cunning, subtle plan by the Liberals to lead up to a Matter of Public Importance by Abbott after Question Time on “The failure of the Government to keep its commitments to Australian industry”. It is again interesting to see who responds on behalf of the Government. Today to counter the Leader of the Opposition, the ALP put up Jason Clare, the Minister for Defence Materiel. Clare is believed to be a bit of a comer, but it says a bit about how the ALP is feeling at the moment that they didn’t even bother putting up a cabinet minister to counter Abbott.

Perhaps their confidence may have come from them winning the first division called during a questions time. It occurred when Chris Pyne moved that Simon Crean no longer be heard– he had been bagging them for wanting to bring back Work Choices. In the division all the independents except Crook voted with the Government – giving them an easy 75-72 win.

Pyne had worked himself up into a bit of a lather today. During an answer by Albanese he made a point of order in which he said: “I had thought on a general point that these ‘slag and bag’ answers were going to end with the new standing orders”.

Personally, I like nothing more than some slag and a hell of a lot of bag in my QT. But maybe that’s just me.

The Liberal Party tried a unique attack on the ALP’s asylum seeker policy today. They decided to lead with their big gun Scott Morrison, who blasted Julia Gillard for softening the detention policy, and then they followed up with John Forrest and Tony Abbott trying to get her to agree that the ALP were only doing what John Howard had done in 2005. It appears that first step to stopping the boats is stopping the logic. 

What was done in 2005 seemed to be of paramount importance to the Libs. They really nailed Julia as she agreed with them and then wondered how they could both want to take credit for the policy and also to criticise it. All I know is that it sounds like the Libs 2005 asylum seeker policy is really good. I hope it serves them well in the 2007 election, they must really fancy their chances at winning that.

The other big target of the day was Tony Burke. He was asked five questions and while he might be getting in some nice exercise by getting up and down a lot during the hour and a half, he thus far isn't close to breaking a sweat due to panic from the questions.

The whole Question Time is to be honest a bit of a waste at the moment. You would have no idea from the first two days’ of questions this week that there was an estimates period on. Estimates are the time for the opposition to have fun and find out things the Government wishes it doesn't wish to talk about. When done well, questions asked in the morning of an estimates sessions will feed into the questions asked during Question Time.

This week? Nothing.

Fro example, the “grilling” today of Air Chief Houston only served to reveal that Abbott’s attack last week of the Government's approach on the three soldiers charged over a deadly raid in Afghanistan was way off base.  Which is why there were no questions on that issue today.

Tonight NBN was before estimates, so maybe Turnbull will get to ask a question tomorrow, because thus far he hasn’t had anything to do.

Greg Hunt got elevated up the order from question number 19 to number 17 today. He asked Combet about not releasing the results of inspections on insulation batts – ie wanting to know how many of the inspections have resulted in work being redone. Combet answered that he wasn’t going to release them as yet because the sample is not random – ie those who have received an inspection are more likely to have had an installation that requires redoing – if your insulation didn’t need redoing you most likely would not have requested an inspection.

Combet offered Hunt a confidential briefing of the current results. What he should have also done is offered to give Hunt a link to Possum's latest blog post where he reveals (through some very good digging through a number of reports) that prior to the insulation program the number of fires per thousand installation was 1.31, whereas the number of fires resulting from installations done by the program was 0.16 per thousand.

Yep a fall by a factor of eight.

A stunning success on that score. Absolutely stunning. But it’s too late to say anything about it now. That ship sailed a long time ago, but it’s nice to know that mathematics still wins through, even if the spin doesn't.

If I had to say one thing about Question Time since the election it would be that it lacks passion. Dull questions, dull answers, all seemingly done in manner that makes it appear like all participants are viewing it like a visit to an unloved relative, or perhaps like eating a big bowl of bran. Nice and regular, but seeming to take a hell of a lot longer than it does in reality.

This lack of passion fed nicely into the beginning of the “debate” on Afghanistan that occurred straight after. First Julia Gillard spoke for 36 minutes, and then Tony Abbott followed. Was it a debate? No

Who said the following: Gillard or Abbott?*

Australia’s mission in Afghanistan is still to suppress the threat of terrorism. It’s still to be a reliable member of the Western alliance but it’s also to build a society where merely to be different is not to risk death. By resisting those who would impose on all a particular version of Islam, our soldiers are asserting the universal right to a society where women are not discriminated against, dissent is not a capital crime and religion is more a reproach to selfishness than an instruction manual for everyday life.

The usual point of a debate is for there to be two points of view that have some sense of opposition. There is also generally some desire to convince the listener that the speaker’s view is the one deserving of support. Both Gillard and Tony presented nice, well intentioned and no doubt well thought out speeches. But hell, we’re talking about war here – get passionate.

Julia quite often adopts a considered, quiet, point by point manner when she is prosecuting a case. And it is often very effective. But today I felt the tone was just wrong. It was too reverential, as though there was a great desire not to upset anyone, not to come across as war hungry, not to make it seem like she was disrespecting the troops in any way. Treating the whole issue with sombre reason.

Abbott as well took this tone.

When you read the speeches, they seem quite passionate, but there was none of that in the delivery. I’m not asking for the Battle of Agincourt or fighting on the beaches, but hell, we are at war – get fired up.

I don’t know who the two leaders were speaking to, but they were not doing anything that would have convinced anyone who thought otherwise that what we are doing in Afghanistan is the right course of action.

Gillard especially needs to be aware of the dangers in this calm approach. Peter Lewis in a very good piece today in The Drum noted how the main problem the Rudd Government had with its approach to climate change was the increase in apathy. People went from supporting an ETS to “don’t know” rather than to opposing it – in less than a year the “Don’t know” response in the issue went form 17 percent to 34 per cent.

If we are fighting for a good cause, a right cause, a just cause then our leader should be bloody proud of it, and be proud in her advocacy of it.

Both Gillard and Abbott are adversarial creatures – they work best when opposing someone. On this issue they don’t really know what to do because they know each other is in basic agreement. But the public is not. Sixty one percent of the public according to a recent Essential Poll want our troops brought home.

If the war in Afghanistan is just, right and good (and I believe it is) then it needs some leaders who are prepared to go out there and try and change the minds of that 61 percent.

If the leaders don’t think it is worth advocating, then you have to ask if it is worth fighting.

***

The RBA minutes of the previous meeting came out today. Stunningly there was no mention of stimulus, waste, debt or deficit. God knows what game they think they’re playing up there in Martin Place, but they really are not helping with the narrative.

***

In my post yesterday on Andrew Leigh’s speech I did not mention that Malcolm Turnbull was in the chamber listening to it. I think it is worth mentioning, because it shows the level of respect Leigh is held by those in the Liberal Party with the sense to know that Leigh is not some standard political hack. Peter Martin tells us that Turnbull was the only member of the opposition front bench listening….

***

*it was Abbott

Today marked the start of Estimates week (or if you wish to be technical, the 2010-11 Supplementary Budget Estimates hearings). The fun started quickly over in the Environment and Communications Committee where for a around half an hour the life was sucked out of everyone watching while the senators argued over the late reply of Questions on Notice. Now QONs (as they’re known) are very important, but geez the lengths they went to wondering why the QON’s weren't answered, and then why were they all answered at once, and where were the seven that weren’t answered and …oh just get on with it!

Unfortunately they did and thus we needed to find out when to the minute did members from the Department of Climate Change know about the change in policy of the CPRS – did they know when a door stop interview was being conducted? Yep, I could see the media getting ready with pens poised – “Public Servants not aware of political decision”. Hold the front page.

The tone improved markedly when the committee got down to the vexed question of whether or not climate change was real. Has the planet been warming in the last decade, asked Senator Abetz. He was pretty stunned to find it has, and so around and around we went, with National’s Senator John Williams joining in for some fun on sea levels. I’ll wait till the Hansard comes out to comment further because such nuttery deserves to be quoted verbatim.

[UPDATE: The Hansard is now out. Here’s a nice taste:

Senator IAN MACDONALD—Are you aware of that second article—the one from the Daily Mail?

Mr Carruthers—I have not seen that article, personally. I have been overseas for the past week.

Senator IAN MACDONALD—One quote that is alleged by the Daily Mail to come from that report is: The Royal Society now also agrees with the GWPF that the warming trend of the 1980s and 90s has come to a halt in the last 10 years ...Is that accurately reported from the Royal Society? Is that inaccurate?

Prof. Steffen—Yes.

Senator IAN MACDONALD—So the Royal Society did not say that?

Prof. Steffen—No. I have the report here on my computer.

Senator IAN MACDONALD—Okay. Perhaps I am being a bit specific, when in this general area I was trying to be broader.

So when he quoted a specific article he was trying to be broad. Oh dear. And that was high point for McDonald. ]

While this was happening over in the Finance and Public Administration Committee we were discovering to our horror that the official florist to the Governor General had not been reappointed. And yet life continues on. Miracles do happen, I guess. I don’t think I’ll wait for the Hansard for that one.

Prior to Question Time, Julia Gillard and Chris Bowen announced what had been pretty well spoiled for them by Sarah Hanson-Young over the weekend – namely that the Government:

would partner with community organisations to transfer unaccompanied minors and families who are awaiting the outcome of their applications for asylum into community-based accommodation.

One journalist in response tweeted:

A lurch to the left from JG on asylum seeker policy.

That such a policy announcement could be described as such is a pretty sad indictment on the point to which the asylum seeker debate has reached. To my mind all that was done today was what most people assumed was going to happen when Rudd was elected in 2007. It is not so much a lurch to the left as doing the bare minimum of what any decent Government should do.

Gillard and Bowne were at great pains to say they were doing this of their own volition and was not a Greens initiative – perish the thought! 

The Government also announced they would be opening two more detention centres – one 80km out of Perth and one in Inverbrackie in the Adelaide Hills. This was not so well received – nor called a lurch to the happy side of things. But at least you could not say they centres are out in the middle of nowhere, miles away from hospitals etc. I know the Adelaide Hills area quite well, and Inverbrackie is about as nice a spot as you would like to be put in a detention centre…which doesn’t exactly make up for the bit about being in a detention centre, but you know small steps… 

Tony Abbott ain’t one for taking any steps, and his opening question today had him him straight talking all the way to his next focus group. He asked “How will opening more beds stop more boats?” In a stunning coincidence this was the exact same question posed by Scott Morrison on radio later in the day. What amazing luck the Libs have to posses two such fine straight talkers – no spin from them.

Gillard responded to the question with pretty much infinite ease – referring to Abbott’s three word slogan of the election campaign as not quite being enough to deal with the problem. Absurdly, Abbott rose to waste the session’s only supplementary question asking Gillard why, if it was so urgent that new detention centres be built, did she not pick up the phone to the President of Nauru.

It being nearly cricket season, we should be kind and suggest his supplementary was merely a half volley rather than a rank long hop, but given Gillard has been asked this question on a good many occasions over the last two months, she was hardly going to be bowled by it today. And given she can now refer to the boat phone, anytime Abbott mentions  telephonic devices in connection with asylum seekers, he is best warned to try a different tack.

One tack he should also give a rest is asking Julia questions that he has telegraphed the day before in an interview with Laurie Oakes. Yesterday on the Sunday Today Show, Abbott said:

Pre-election the Prime Minister committed to all of the recommendations of the Authority, sight unseen,

Today he asked the Prime Minister why she had committed to all the recommendations of the Authority sight unseen. Gee, she must have been stumped coming up with a response to that one given it came from nowhere.

(Incidentally, Oakes’s interview is a must watch – especially for his questioning on the military tribunal).

The Murray Darling Basin issue got a bit of a working over with Jamie Briggs, Sussan Ley, Sophie Mirrabella, Warren Truss and Tony Abbott all firing damp squibs at either Gillard or Tony Burke.

The problem for the opposition on this issue is that the Murray Darling Basin Authority was set up by the Howard Government, and thus Gillard and Burke were able to cite speeches by Turnbull (the then Environment Minister in charge – now the Shadow Minister for Ipad) and by Mirrabella herself. Burke had great fun pointing out that when the Bill to establish the Murray Darling Basin Authority was introduced Mirrabella said:

Important elements of this bill, which give effect to the National Plan for Water Security, include an independent Murray-Darling Basin Authority with enforcement powers; a basin plan which sets a cap on water systems; an environmental watering plan to coordinate management of the available water in the basin…

He also was able to refer to a media release by Abbott, Birmingham and Barnaby Joyce made during the election which said of the Murray Darling Basin Plan:

The Coalition will release the draft Basin Plan within two weeks of coming to office and proceed with its implementation without delay. Labor’s delays must come to an end.

Burke pointed out it was rather difficult for the Libs to complain about the guide to the draft plan when they had pledged to implement it “without delay” (sight unseen no less).

The other problem they will continue to have is that at the moment Burke will say again and again that it is merely a guide to the draft plan and that the final decision is a long way from being made.

He made however a very important point – namely that when the draft plan is introduced it will be subject to a disallowance motion in both houses, and given the state of the numbers that means every single member will need to decide what happens. This issue has a long way to run, and it will remain one of the more fascinating to watch – for how the Government acts, how the opposition reacts, and how the media reports.

Other questions of note were Adam Bandt’s first – and it was excellent. He asked Stephen Smith on Afghanistan:

Given that one of the oft-stated rationales for our involvement in Afghanistan is the propping up of the Karzai government, is the government concerned about the reported level of corruption, to the highest levels of the Karzai government, and does the government agree with US General David Petraeus’s reported comment that the Afghan government is a ‘criminal syndicate’?

A damn good question that deserves a decent response, because it goes to the heart of what we’re doing in the war. If when we leave all that remains is a corrupt Government that is only good if compared to the Taliban, well then you have to ask if that is any measure of success.

Smith answered forcibly and seriously – he always does – though it did verge a little bit on the it’s in our interest to be in Afghanistan because our interests are to be in Afghanistan line of response. But it was a nice appetizer for tomorrow’s debate on the war.

Kate Ellis also got a chance to answer again as Minister for Sport when she took a question on behalf of Senator Arbib on the Commonwealth Games. Her response was perhaps only worthy of note because Lib MP Andrew Lamming decided this most docile of questions deserved some pathetic hurling of abuse that had Ellis momentarily pausing at the absurdity of it all. If you’re going to interject Andrew, best not to do it on an issue that has bipartisan support.

Finally Greg Hunt go to ask question number 19 on the home insulation report by the ANAO. That he was on so late gives you a good idea of what the Libs think are their chances of getting a scalp from it all. What is more interesting is that Hunt is Shadow Environment Minister, and yet he did not get one question on the Murray Darling Basin Plan. I think that  also gives you a good idea of how the Libs will treat the issue – as a regional/rural one, not environmental.

***

Prior to and after Question Time the new members for the ACT electorates – Gai Brodtmann in Canberra and Andrew Leigh in Fraser (my electorate) – gave their maiden speeches. Both were very fine – Brodtmann’s perhaps most notable for the cameras showing a very proud (and justifiably so) Chris Uhlmann watching from the press gallery. She did greatly praise the union movement, but as a former small business owner also acknowledged the need for balance. She ended with a very rousing series of points made about the benefits of “when we [the ALP] win”. It was real True Believers stuff and was good to see (as an old true believer).

Leigh’s speech would have warmed the hearts of economists everywhere – especially those playing the economists’ Parliament drinking game, who for 110 years had been waiting to take a skoll when Leigh finally made history by being the first member to ever utter the phrase “randomised policy trials”. He also promised that he would “speak more [of it] during my time in this place”. So get those beer glasses ready!

Leigh also used the speech to beautifully skewer the Liberal Party and paint it as a Conservative Party, rather than a truly “liberal” one. He cited Alfred Deakin:

Alfred Deakin was one of the earliest Australian leaders to make the distinction between liberals and conservatives. Deakin argued that liberalism meant the destruction of class privileges, equality of political rights without reference to creed, and equality of legal rights without reference to wealth. Liberalism, Deakin said, meant a government that acted in the interests of the majority, with particular regard to the poorest in the community.

As for conservatives, to quote Deakin’s description of his opponents, they are:

‘ a party less easy to describe or define, because, as a rule it has no positive programme of its own, adopting instead an attitude of denial and negation. This mixed body, which may fairly be termed the party of anti-liberalism, justifies its existence, not by proposing its own solution of problems, but by politically blocking all proposals of a progressive character, and putting the brakes on those it cannot block.’

A century on, it is hard to escape the conclusion that if Deakin were in this parliament today, he and his brand of progressive liberalism would find a natural home in the Australian Labor Party. (And given the numbers in today’s parliament, I am sure my colleagues would welcome his vote.)

Liberals like Malcolm Turnbull and George Brandis who have addressed the Alfred Deakin lectures and who would see themselves as Deakin’s decedents would no doubt be gnashing their teeth at hearing Leigh’s words. Their gnashing would not only be because with Abbott as leader Leigh is spot on, but also because in Leigh they have someone who when they step into the ring with intellectually they know they will not be in for an easy fight.

This week’s flick of the week takes us with Willem Dafoe from his small role as Captain John Darius in Inside Man, to his breakout role as Sergeant Elias in Oliver Stone’s seminal Vietnam War film, Platoon. 

Dafoe has certainly made a career of turning up in some very good films. He is a bit of a go to guy when you need someone who is serious but also a little bit unhinged. The guy’s characters always seem to have a past. Oddly, his role of Elias runs somewhat counter to his current persona. Elias is “a crusader” to quote the other Sgt in the platoon – Sgt Barnes (played by Tom Berenger in the best thing he’s ever done). Were the film being cast today it is unlikely that Dafoe would be considered for Elias (ignoring the age issue). Defoe now has that nasty aspect that would have you expecting Elias to go on a killing spree at any moment rather than philosophising about war. Berenger meanwhile would not be cast because he has milked this role to death in all those God-awful Sniper films.

Would Charlie Sheen be cast in the lead role? Er well probably not. Were they to go back in time, more likely the role would now go to Johnny Depp who has a bit part – though Sheen is well cast.

It’s easy to forget the impact Platoon had when it came out. After The Deer Hunter, with its odd depictions of Russian Roulette, and Apocalypse Now with its madness that makes it utterly compelling, but hardly realistic, cinema was ready for a film to treat the Vietnam War with some realism. When it was released it packed a punch that had the media (especially in America) talking about how watching it was an almost cathartic process for Vietnam Vets. It certainly pulled no punches and there are many scenes that leave you gasping. I was always a bit bemused when Saving Private Ryan came out, and how reviewers made a big deal about how it depicted war, as though Platoon (and many other excellent war films) had never been made.

For Aussie Vietnam Vets the film likely had an impact as well – but it certainly does not depict their experience – The Odd Angry Shot did that job. Aussie soldiers in Vietnam for example were not dope smokers – and certainly not while on patrol. (By the way, my old colleague from James Cook Uni, Janine Hiddlestone has an excellent study on the impact on the stereotype of the American experience in the Vietnam War on Australian veterans). But just having the war so discussed and visible was a huge step – and as the film was only released in Australia in 1987 it coincided somewhat with the veterans’ welcome home parade held in Sydney in 1987 October of that year.

The film of course was written and directed by that mad genius of the baby boomer era, Oliver Stone. For a short while there he was the pre-eminent director in Hollywood from his amazing Salvador, through Platoon, Wall Street, Born on the Fourth of July, the indulgent The Doors and then the magnificent JFK (regardless of if you believe the theories, Stone directed the hell out of that film). Then things started to get a bit fuzzy – Heaven and Hell was, well I’ve watched it only once, and don’t really want to go back, and Natural Born Killers has plenty of fans, but for mine it was a film before its time, and I don’t think that time will ever come.

There are some great and very intense scenes in the film – the massacre of the village, Elias’s death (a take that was so perfectly done  by Dafoe they used it even though the fake blood packets didn’t fire as planned – you see him react as though shot, but no blood is seen), and the final battle. It deservedly won Best Picture – though it wasn't a strong year – hell Crocodile Dundee got nominated for Best Screenplay. 

The film has always resonated pretty strongly for me. When I first saw it I saw it twice in a week and it was one of those films which I quickly came to know all the dialogue. In 1989 when I was in Japan I met a group of other exchange students – some of whom were from Canada. The night prior to our meeting Platoon had actually been on TV. As we were walking around the temples that we were sightseeing that day I mentioned that I had watched it and one of the Canadians said he had as well, and suddenly we were quoting the entire script back to each other.

When such a thing happens you just know you have met a friend for life, and so it has turned out to be. (You also know everyone else in the group is looking at both of you as though you are rather deranged.)

1989, was an odd time – the cold war ended and the threat of world war seemed gone for good. We were just old enough to feel some sort of connection with the characters in the film, but knew as well that neither of us were ever going to have to worry about being drafted to go kill someone for some unknown reason. It was a year in which so much happened that for some it seemed nothing could be the same again – Francis Fukuyama for example would write an essay called “The End of History”

Our generation – that terribly named Generation X – to a very large extent grew up without war. The Gen X war films are Buffalo Soldiers – a film about bored soldiers with no war to fight, or Jarhead – about Desert Storm that was over so quickly the snipers didn't even get to shoot. This is not say no soldiers died in Desert Storm, but overwhelmingly the vision for people of that war was just of a smart missile going through a door. Infantry? Grunts? The long drawn out years like Vietnam? The protests? That would not happen then; its time would come again though.

By September 2001 my generation was at least in the mid-twenties; many over thirty, and joining to go fight was neither realistic, nor a concern from most. Of course my generation had no say over any of the timing of all of this, though I like to think that we were so obsessed by the baby boomer period – so determined to repudiate all of it we just wouldn’t have stood for the whole let’s go off and fight a long drawn out war game. We knew in our rebellious teenage years that we were pretty well rebelling against not having much to rebel about (try going to uni and the best you can do is go for a march against HECS and see how fired up you can get). In the end you knew it was nothing of any real consequence – and given the general apathetic nature of the generation, a war just seemed to smack of effort that was well beyond us. 

Perhaps I just think too much about this film. But whenever I watch it and see the opening title card with the passage from Ecclesiastes of “Rejoice O young man in thy youth...”, I think of my youth in 1989 when quoting dialogue from a war film was fun and I knew I’d never have to worry about going into battle.

Previous Flicks of the Week:

Inside Man – Clive Owen
Gosford Park – Robert Altman
The Player – Tim Robbins
Bull Durham – Kevin Costner
Field of Dreams – Ray Liotta
Goodfellas – Samuel L Jackson
Pulp Fiction – Frank Whaley
Swimming with Sharks – Kevin Spacey
Working Girl – Sigourney Weaver
Aliens – Bill Paxton
Apollo 13 – Ron Howard
American Graffiti – Richard Dreyfus 
The Graduate – Dustin Hoffmann
All the President’s Men – Jason Robards
Once Upon a Time in the West – Henry Fonda
Mister Roberts – Jack Lemmon
Some Like it Hot – Billy Wilder
Witness for the Prosecution – Marlene Dietrich
Touch of Evil – Orson Welles
The Third Man – Trevor Howard
Brief Encounter - David Lean
Lawrence of Arabia – Claude Reins
Casablanca – Humphrey Bogart
The Big Sleep – Howard Hawks
His Girl Friday – Cary Grant
Charade – John Williams
Schindler’s List – Liam Neeson
Love Actually – Emma Thompson
Sense and Sensibility – Ang Lee
Crouching Tiger, Hidden Dragon – Michelle Yeoh
Tomorrow Never Dies – Pierce Brosnan
The Thomas Crown Affair – Renee Russo
In the Line of Fire – Clint Eastwood
Where Eagles Dare – Richard Burton
Zulu – Stanley Baker
The Guns of Navarone – Peter Yates
Breaking Away – Dennis Quaid
The Right Stuff – Ed Harris
The Rock – Sean Connery
The Longest Day – Richard Beymer
West Side Story – Ernest Lehmann
North By Northwest - The first one

It’s Friday night, who wants to think about bloody economics or politics (errr best ignore the post just below this one)?

Tonight is a night to kick back, and if you’;re anywhere on the south-eastern seaboard listen to the rain beating down (hope the flooding is not too bad).

One thing I love about YouTube is the mash-ups people do of movies – where they take a movie and mix it with the music or dialogue of another movie. Usually the lame ones just take any film and put on the Brokeback Mountain theme and suggest the movie is about a homosexual affair. But an excellent one came out a couple days ago – one which take Toy Story and mixes it with the John Wayne western – True Grit (for Toy Grit naturally) (Screendoor Slams has alerted me that the mash up is actually the Coen Bros soon to be released version of True Grit, not the John Wayne one. That would explain why you can’t hear the Duke’s voice!).

Enjoy

With the news coverage of the Chilean miners my thoughts turned to the great Billy Wilder film Ace in the Hole. Last night on Twitter, film critic Thomas Calwell noted how for those who have not seen it, they will be shocked at how cynical the film is for one made in 1951 (it’s easy to forget cynicism did not start with your own generation). The film is perhaps the most biting and black take on journalism ever put to celluloid. It is a must see for anyone in the media, and anyone who consumes what the media produces.

Here, the NY Times film critics AO Scott reviews the film and shows a few excerpts:

Enjoy your weekend.

So last night all political-economics nerds and those with no life (but I repeat myself) were watching the currency markets in the hope the Aussie dollar might hit parity with the US Dollar. It topped out at 99.936 cents, which some wit on Twitter quickly pointed out could be rounded to 99.94 meaning currency traders are obviously cricket fans.

Last week was also a fun one for political-economic nerds with the RBA making a decision on interest rates and the ABS releasing the latest unemployment figures.

So much fun to be had; so much joyful news to be turned into misery.

Firstly the Reserve Bank decided to trick the market and Terry McCrann (and myself I must add) by not raising the cash rate. A few commentators (notably Rismark’s Christopher Joye) suggested part of the RBA’s decision may have been to purposefully wrong foot McCrann. That may be true, though for mine I think McCrann just made the wrong call because he is blinded by his bias against the stimulus and all things ALP. Consider the article he wrote on the day of the RBA’s non-decision:

YOU can blame Julia Gillard and Wayne Swan - and Ken Henry - for being at least partly and arguably significantly responsible for Tuesday's interest rate rise.

They are continuing to run a hugely expansive fiscal policy, splashing taxpayer money around - stupidly, I might add, but that's another story - in the middle of the biggest commodity boom in this country's history.

Reserve Bank governor Glenn Stevens won't put it in quite these words today, but he's forced to move in part to offset all that spending with a rate rise

This was a decidedly odd statement to make, given nowhere in any of the previous statement since the Global Financial Crisis and the injection of the stimulus has the RBA made any negative murmurings about the the fiscal policy. Last Tuesday again the Governor's statement was sadly lacking in any joy for Joe Hockey, McCrann and others who would have us believe the Government has ballsed up the economy.

The Governor’s statement on the fiscal side of life said:

Information on the Australian economy shows growth around trend over the past year. Public spending was prominent in driving aggregate demand for several quarters but this impact is now lessening, while the prospects for private demand, and in particular business investment, have been improving. This is to be expected given the large rise in Australia’s terms of trade, which is now boosting national income very substantially.

So it was prominent, but now is lessening. Hardly the RBA laying blame for any future rate rise at the feet of Gillard and Swan (let alone Ken Henry!). The RBA’s outlook on inflation was equally moderate:

Inflation has moderated from the excessive pace of 2008. The effects of the rise in tobacco taxes aside, CPI inflation has been running at around 2¾ per cent over the past year. That looks likely to continue in the near term.

But of course the statement did give out a pretty good indication of what lies ahead:

If economic conditions evolve as the Board currently expects, it is likely that higher interest rates will be required, at some point, to ensure that inflation remains consistent with the medium-term target.

Meaning that rates are pretty likely to go up in November and possibly December.

They almost have to go up now if only because it is not good for the RBA to play funny buggers too often. Back in September the Governor's  statement said:

… members considered that if the central scenario came to pass it was likely that higher interest rates would be required, at some point, to ensure that inflation remained consistent with the medium-term target.

Now, it’s ok to put out a such a statement and not back it up with a rate rise, but to do it twice would start having the market distrust the words of the Governor – and it is not good for the market to be thinking when the head of the Reserve Bank says one thing to expect the opposite. 

But such things are amazingly fickle. Here was a report back in the far past of August:

BORROWERS will not be slugged with any more interest rate rises this year after the release of softer jobs figures, economists say.

The joy of economics is its fluidity. You can never predict anything with certainty because all predictions are based on assumptions based on economic theory, and economic theory quite often has buried beneath its own assumptions the phrase “certeris paribus” (“all other things being equal”). And unfortunately in real life all other things are never equal.

However there are some things in life you can count on – and idiocy from the opposition on economic matters unfortunately seems to be one.

Andrew Robb has been standing in for Joe Hockey in the past couple of weeks, and some would think that would mean an appreciable increase in economic acumen, but I have to say  think Robb is massively overrated by many in the media. Last week he came out with this pearler:

“The government should urgently consider a mini-budget to rein in the reckless spending which is attributing to higher interest rates and therefore a higher dollar. The message to the government is that with the dollar at its 27-year high, everything should be done to minimise the rise in the dollar so that the competitive position of Australian industry can be maintained.”

That Robb would think the Government needs to cut back on spending to stop interest rate rising suggests he reads McCrann religiously, but forgets to read Glenn Steven’s statements. A mini-budget? Seriously?

And to top it all off Robb did it again today:

A PRE-CHRISTMAS mini-budget is necessary to reverse the reform malaise that has gripped the Gillard government.

The new government is already asleep at the wheel. It is simply sitting back letting higher and higher interest rates, and a record high exchange rate, do all the heavy lifting in taking the inflationary steam out of the Australian economy. And industry and mortgage holders are paying for it.

Let’s look at this dollar issue. Yep it is at a 27 year high. What exactly does Robb think the Government can do about it? The Aussie dollar is but a cork on the sea of international currency exchange. Our economy is not of a size that could in any change in policy could have any meaningful impact on the exchange rate. Let’s have a look at the dollar since Rudd beat Howard:

Check out September 2008 to March 2009. Was the Australian Government doing anything wrong then? Nope – in fact then as now the Australian economy was looking better than anywhere else. It was just that commodity prices took a hit because of the recession in the US and Europe, in times of panic investors tend to flock to the US Dollar because they know the Greenback is not going to go broke, and the RBA put the cash rate at emergency levels.

Could the Government at that stage do anything to increase the value? Well yes, and it has. Since that time the US economy has continued to perform poorly; the Australian economy has continued to perform well. Commodity prices have boomed, and the stimulus worked. As a result Australia’s interest rates are increasing, the US’s are stuck at emergency levels of 0-%0.25%.

The only way to do anything about the currency in the short term would be to have our interest rates decline.

Here’s Robb today:

The director of Access Economics Chris Richardson said this week: "The rough rule of thumb in economic models is that you have to cut by about $13 billion a year to achieve maybe a 1 per cent reduction in interest rates, which might, in turn, make maybe a cent or two difference to the level of the Australian dollar."

This confirms that Australia's interest rates, and exchange rate, would be lower, saving households thousands of dollars a year if the government's reckless spending and waste had been reined in during the past 12 months.

Well yes, ceteris paribus. Problem is things aren’t equal at the moment – the US, Japan and others are doing what they can to keep their own currency down. The other problem is Robb may be right that the Government should do what it can to ensure interest rates don’t go any higher than they need to, but get them go lower? Does Robb really think the RBA would cut interest rates because the Government cuts spending? The RBA sees interest rates at the moment at a neutral setting. The only reason they would drop them is if the RBA thought the economy needed stimulating.

Do we really want to be in that situation? Does Robb suggest the Government hold a mini-budget where it announces that it is slashing Government expenditure so greatly that the public sector withdraws from the economy to such an extent that the Reserve Bank thinks it needs stimulating through lower interest rates? Really – is that what Robb? Because at this point unless the US economy starts to pick up, that is the only way the dollar is going to go down.

In the short term, the boom in the mining sector and the basket case economy of the US, and the currency “wars” means the Aussie dollar is going to be high and all the blather from Robb is not going to change a thing.

In the long term, the best thing the Government could do to reduce a high dollar is to do something about the mining boom – for example bring in a resources rent tax on mining such that the heat in the boom is lessened. Though suggest such a thing to Robb or Abbott or Hockey and they’ll say you’re killing the golden goose, meanwhile they’re ignoring the goose is being burnt to a crisp.

On the inflation front it might be nice to think that people are reacting with some rational expectations and because the Governor says rates will likely go up, that people are saving and spending as if rate have gone up – meaning that they don’t need to because demand has declined. Christopher Joye, however put paid to that theory:

The graph shows that consumer spending is spiking – and when that happens inflation generally increases and thus interest rate rises are sure to follow. (Incidentally if you are interested in finance and economics Joye’s blog is a must read.)

One positive of the increased dollar value is that the price of imports has declined meaning inflationary pressures ease on that score (by the way I’m betting this Christmas we’re going to see some amazing specials on flat screen TVs). But that in turn fuels demand for such products, and off we go again.

So we’ve got consumer spending increasing, import prices coming down, interest rates going up, unemployment going down and the exchange rate going up... And people wonder why I love economics? Herding cats has nothing on keeping control of the macro economic picture, and contributions like Robb’s do nothing except suggest he’s not up to the task of being in charge of it.

Now despite my slap down on McCrann and Robb and the lack of anything remotely suggesting the stimulus is currently fuelling inflation, that doesn't mean I think the Government can sit back with their feet up. If the private economy is powering on, then it behoves the Government to get out of the way – in effect get back to a surplus ASAP – and if that means looking for ways to get there earlier than the dopey “three years ahead of schedule” then so be it. But you shouldn't be setting you fiscal policy around what it will do to the exchange rate – that is unless you think you can also control events outside our borders and control.

[By the way, bragging that the budget will be in surplus 3 years ahead of schedule gives me the sh*ts. It’s not like they’re getting through High School in 3 years sooner than everyone else. All that happened was a prediction was made, and now another prediction has been made that suggests the same thing will happen 3 years’ quicker than they first thought. Such talk is just more of the useless spin that got the ALP into trouble in the first place – please Wayne stop it!]

So now we wait for the next inflation figures to give us an indicator of where things are at; to give us an idea of what the RBA will do on Cup Day. The employment scenario however is damn good:

The announcement by the ABS last week that unemployment was steady at 5.1%, and that full time employment grew by 55,800 jobs was a truly startling figure.

It of course meant that the media took about 0.0001 seconds to begin with stories of an interest rate rise next month (first law of economic reporting – everything must be reported through the prism of what impact it will have on interest rates).

The figures are  excellent and should be greeted with joy, and bugger the impact on interest rates. 

I will say this again and again and again: were anyone to be forced to choose between having a job or having to pay more for his/her mortgage, he/she would take the job every single time – unless you think paying a mortgage on the dole is fun.

Interest rates are important – hell I don’t want them to go up, I’d love to be able to have more money to spend each month – but jobs are the key to an economy – would you really prefer to be like America and have the cash rate at 0-0.25% but have unemployment at 9.6%?

I’m not saying having unemployment at 0.25% and interest rates at 9.6% would be all that wonderful either (it would be an almost impossible combination for a start), but there is a balance to be had, and I like Australia's balance at the moment. Just as a reminder here’s the comparison of the US and Australian unemployment rates:

In point of fact when the Reserve Bank kept the cash rate at 4.5%, and the unemployment figures came out it continued a rather unusual run of low unemployment and low interest rates.

The usual combination of statistics to arrive at the “Misery Index” is unemployment and inflation, but I actually prefer the combination of unemployment and interest rates.

Inflation certainly is crucial – it does impact on our daily lives – but in many ways the impact of interest rates is more immediate.

Since November 2008 this Misery Index (call it Grog’s Misery) has been in uncharted territory:

For the first time ever the index has been under 10 – ie the unemployment rate+cash rate = less than 10.

You can see for much of the Howard years post 2001 it was bumping between 10 and 12, but with the GFC and the huge drop in interest rates for the first time it went below 10.

But will such a state of affairs continue? Has the GFC changed things in a structural sense?

It would be nice to think we have entered an era of low interest rates and low unemployment, but I think it would be foolhardy to think thus.

The cash rate is likely to go up 0.5% by the end of the year, and if it does we’ll be back over 10 on the Grog Misery scale, unless unemployment drops by a similar amount, and I think that is a bit much to ask. 

What the Government will need to consider is what can it do to keep inflation down (and thus pressure on interest rate) but such that the the employment growth continues. Is the economy at a point that the private sector is able to once again take up the slack when the Government gets out of the way? Will the high dollar have an impact on exports such that growth abates? Will the high dollar be enough to have the RBA pause and consider whether or not to go higher with interest rates? Will banks go higher all by themselves, thus meaning the RBA doesn’t need to raise the cash rate?

So many questions (which is why economics is the field where retrospective brilliance is most observed).

The balance we seek is the key, and the joy of economics is that the balance is never set; never constant.

And whenever there is joy for some there is misery for others.