Wilkinson's sex and interest group' bias

Comments on Cassandra Wilkinson "If Rudd is Pepsi, can we have a Coke?", 18/02/2013, http://www.theaustralian.com.au/national-affairs/opinion/if-rudd-is-pepsi-can-we-have-a-coke/comments-e6frgd0x-1226579832152

Cassandra, with due respect, your view and analysis is nonsense, inconsistent, contradictory and sex discrimination. It is a shame even more given that you are the same side of the sex claiming victims.

It would have had a little appeal if this piece was coming from the opposite side.

You said Rudd Prime Ministership is a case that "it's already been tried, tested and rejected." But what about Gillard's? Relatively speaking, whose is worse or better?

Your illogical reasoning and analysis reflects how poor your analytical skills and how poor your judgement is.

Yes, we all watched on TV that Rudd didn't treat nicely the NSW previous premier who's female and your boss since you worked as an advisor to her.

But one should get over that given that changed politics since.

Rudd the unpredictable in the coming election

Comments on Michelle Gratten “Rudd's adrenaline charge will pressure Gillard”, 16/02/2013, http://www.businessspectator.com.au/bs.nsf/Article/Kevin-Rudd-Julia-Gillard-Labor-MRRT-PM-pd20130215-4X6T6?OpenDocument&emcontent_spectators&src=rot

Clearly the Rudd factor is the most explosive and unpredictable in the coming election, not just for the ALP, but arguably also for the coalition, because if the ALP switches to Rudd, then the coalition may also switch to another person as opposed to continue with Abbott as the leader. The difference in voter appeal between Rudd and Abbott would make it too hard for the coalition to bear and for the fear of losing another unloseable election.

I think what Rudd and indeed his supporters should do is to devise a strategy of approaching the ALP heavy weights and assure them that the goal is to win the next election and to win as many seats for them as possible and there will be no retribution but complete reconciliation and the reliance on merits and talents.

Clearly, Shorten is a key figure among heavy weights. However, some more neutral heavy weights could also play a pivot role, given that the prospect of winning the next election is getting more and more impossible day by day and the interests of the whole party should be paramount in any consideration.

Gillard has been given enough opportunities and time to demonstrate her Prime Ministerial leadership skills, but her performance over the past couple of years has been mush less than satisfactory and boarded on the more disappointing to say the least.

Swan is another uncertain factor in the sense that should he realise that Gillard's fortune may certainly improve should he stand down as early as possible and leave at the next election. But Swan is unlikely to do that.

Should the Rudd supporters try to hand out more olive branches to the neutral and those within the Gillard strong supporters, the situation may change very quickly. It needs some real change from Rudd and the sooner he realise that the better his political fortune will become.

Rudd is smart enough to learn what is needed and required and take the necessary steps.

Past lessons are rich enough.

Gillard let many people down

Comments on Dennis Shanahan “Leadership tensions turn poisonous”, 16/12/2010, http://www.theaustralian.com.au/news/opinion/leadership-tensions-turn-poisonous/story-e6frg75f-1226223363282

While Rudd had his shortcomings during his prime ministership, Gillard has shown a remarkable lack of strategic leadership skills and sound judgement.
At the time when Gillard got the prime ministership from Rudd, many were hoping that she would continue her good standing that had been observed before that time.
And there were enormous good wishes from many people for the first female prime minister good and well.
So far, those people have been hugely disappointed by her dismal performance.
Gillard has let so many good wishing people down.

Gillard and Rudd

12/10/2011, http://www.theaustralian.com.au/national-affairs/opinion/poll-brings-julia-gillards-troubles-to-the-boil/story-e6frgd0x-1226164291828
It may or may not be too late for the federal ALP government's turn of fortune if it changed leadership in a bloodless and smooth transition from Gillard to Rudd.

Rudd has the experience to defeat the most skilful political opponent in the last decade and a half, that is the former prime minister John Howard, and rally the public, no matter it was
false appearance or not.

Abbott, while often underestimated by many for his powerful political leadership skills, may not be as effective as he has been to undermine Gillard's prime ministerial leadership, even though Rudd was deposed shortly after Abbott became the opposition leader. Rudd's demise from the previous prime ministership was his own unfortunate political skills towards his own caucus colleagues, and nothing more than that.

He should have learnt enough from the last political episodes, including the key shortcomings and failures such as overpitch of the climate change issues and his back away from the ETS after those kitchen cabinet colleagues advised him to do so, as well as his unfortunate role in the RSPT and his ill treatment of his colleagues.

He may be still revengeful, but he will be much more skilful next time.

And that is the hope the federal ALP can get if they act to ensure the leadership change is seen as natural and smooth and not as treacherous and bloody.

They will realise that and take necessary actions, no matter how painful they may be for some of them, especially those who played key roles in the removal of Rudd the last time. Self interest will dictate their actions, or rather inaction to oppose such a change in
leadership from the current one to Rudd.

I’d bet that is more likely than not to happen.

It would be interesting to see if the coalition will also need to change should Rudd become the prime minister again.

It's time for Gillard to face the inevitable and be graceful

Comments on Dennis Shanahan “Even Victorian faithful think Labor is on the nose”, 27/09/2011, http://www.theaustralian.com.au/national-affairs/opinion/even-victorian-faithful-think-labor-is-on-the-nose/story-e6frgd0x-1226147314109

The problem for Labor is that the longer Gillard hangs on the more unpopular it gets and the bigger its electoral loss in the next election.

Gillard should swallow her personal ego and be wise enough to accept and acknowledge her problem is unsolvable and pass the leadership to another person, presumably the one who has the best chance to win the next election. She would serve the ALP and herself a big favour if she did just that, the sooner the better.

An voluntary and orderly change in the ALP leadership would be the best for ALP, certainly much better than another leadership change forced by its parliamentary caucus.

Now it appears that that person may be Rudd or Smith. Neither of them may guarantee an election victory, but either of them is infinitely more electable than the current one, if the polls are a rough guide.

Is Rudd good enough?

Comments on Niki Savva “Kevin Rudd a golden opportunity for Labor”, 27/09/2011, http://www.theaustralian.com.au/national-affairs/opinion/rudd-a-golden-opportunity-for-labor/story-e6frgd0x-1226147266953

There are two potential problems for Rudd should he be returned to the Prime Ministership.

Firstly, whether he has changed enough to get the ALP federal caucus on his side and united in governing. He may have learnt his lessons from his lost of that leadership, but it is unclear whether his own character has afforded him enough self reflection.

Secondly, the three problems Gillard said would be hers priority to fix, namely mining tax, border protection/boat arrivals and climate change, are likely to continue to hunt Rudd, even though he may choose new strategies by saying that he would seek mandate on them from an election.

Yes, the gambling/poker machine issue may not be a serious one for him.

However, when an election is on, voters may get serious on Rudd and change attitude from a honey moon period one towards Rudd. The question is whether the sympathy toward him for his treatment by the ALP federal caucus would be enough to warrant them to vote him back into prime minister.

That would be an interesting question to be seen.

Rudd may do a better job this time

Comments on Paul Kelly “It's not just the leaders, it's the party”, 7/09/2011, http://www.theaustralian.com.au/national-affairs/opinion/its-not-just-the-leaders-its-the-party/story-e6frgd0x-1226130893027

While the core point Paul Kelly has made that the ALP needs to reflect and change is obviously correct, his argument that a change in leadership does not do the job may not be so correct.

A change in leadership, say back to Rudd, can work if the new leader is determined to change and can bring about that change. Otherwise, a mere change in leadership will not work, as Paul has put it elegantly.

Rudd, if he has learnt the lessons why and how he lost the leadership, is the best person to do just that. He has the quality to bring the public with him and be popular with the voters, although what he would really also need to do is to add real substance to policy and achieve hard results.

With that quality, he would be in a position to push changes of the ALP culture. Of course he would need to work collegiately with the caucus colleagues to achieve it.

A show of Rudd's influence

Comments on Annmaree O'Keeffe “Aid sector all go but no direction”, 17/05/2011, http://www.theaustralian.com.au/national-affairs/budgets/aid-sector-all-go-but-no-direction/story-fn8gf1nz-1226057773073

The large increase in foreign aids money at a time of restrained increase in the budget total may have something to do with Rudd as the Foreign Minister.

Gillard and Swan probably didn't have the courage to refuse any reasonable demand by Rudd, given the current situation with the Gillard's minority government in the parliament.

The government commissioned review in last November could also have something to do with Rudd as the foreign minister, after losing his prime ministership and the election outcome.

The fact, that Rudd didn’t do it during when he was prime minister, but did it soon after he became the foreign minister, indicates his interesting role in the Gillard government.

Irresponsibility and incompetence of a government

Comments on “The budget that got away”, see Mumble Blog, 10/05/2011 on the day of federal budget, http://blogs.theaustralian.news.com.au/mumble/index.php/theaustralian/comments/tough_budget/

It is hard to understand why we have to had such levels of deficits, to the tune of $51 billion this financial year and $20 billion next financial year, given that, first we didn't experience a recession, second we have very good terms of trade and external demand for our commodities is extremely high, third, we have unemployment rates at or below 5%.

Yes, Rudd/Gillard/Swan didn't have the guts to reduce government expenditure in their first budget and used the GFC as an excuse to ramp up their own spending and wastage.

More ironically and or hypocritically, they didn't dare to stop the tax cuts that Howard/Costello introduced and continued to the Rudd years. Although that may not necessarily have been a bad thing compared to their wastage, they nevertheless blame Howard/Costello for causing the so called structural budget deficits.

The fact is that Howard/Costello had budget surplus, repaid government debts and created future fund, as well as cut taxes.

What Rudd/Gillard/Swan has done? Deficits and large deficits, debts and increased debts. Wait, there are more, new taxes and more new and big taxes.

For them to blame their predecessors is a bit too rich in politics and political incompetence and spin at the extreme!

It is a shame of them. But they don’t have a sense of shame and they don’t and can’t feel it.

That is a government out of touch, and senseless!

Kelly is right: no big bang health reform, just realism

This is an expanded version of my comments online. There is a limit of 1200 characters for comments online for the Asutralian.

Comments on Paul Kelly “No big bang health reform, just realism”, 16/02/2011, http://www.theaustralian.com.au/news/opinion/no-big-bang-health-reform-just-realism/story-e6frg6zo-1226006577132

While the basic framework of equal partnership with 50-50 of increased funding can stick, there is no guarantee that the core concept of the single national pool will survive.

Equal partnership clarifies the role of funding by each layer of government. That will save potential future arguments between the federal and state governments that exist under the current funding arrangement. In that sense, it is good for the federation. It also separates the funding responsibility and operational responsibility. So the state and territory governments will be accountable for hospital outcomes.

Further, it was never a good approach to take money from the States and brand it as Commonwealth funding that was the sticking point with the Rudd package last year. Asking the states to give up 30% of their GST revenue to give that to the Commonwealth and to enable to have 60% of funding was simply a very crude political joke.

But there is still the question of hospitals versus primary health care and the cost shifting between them. Better primary care can reduce the high hospital rates existing now and reduce hospital costs.

The states and territories are unlikely to give up their control over their own potion of the health fund. More importantly, they don’t want their funds redistributed among the states and territories. So it is highly likely that it will be either a single fund in name only with eight separate accounts, eight separate pools, or nine (8+1) pools.

The efficiency argument can be empty without substance if the rise in hospital costs is from increasing demand. Further the concept of efficiency funding is easy to say but very difficult to do.

Wages are different between the states and locations within a state. Transport costs are different. Other costs can also be affected by location within a state and between the states. So the notion of a single efficiency price does not exist in reality. You can only compare likes with likes. You cannot compare pears with apples.

It is likely there are many efficiency prices for the same medical treatment between hospitals across different locations and states to reflect those underlying cost differences beyond the control of individual hospitals.

These kinds of cost differences are best reflected in the costing of state services by the Commonwealth Grants Commission in its work to distribute the GST revenue among the states and territories.

Whether it is the Productivity Commission, the proposed to be created newly independent authority or another agency to do the efficiency pricing, it will be a difficult job and there will be a lot of arguments from different states and different hospitals on how their efficiency price needs to be higher.

The jury is still out on whether Gillard can deliver and the crucial test if the single national funding pool where it is likely that serious problems can arise.

Kevin's change of heart

Comments on Kevin Rudd “The 10 big global challenges facing Australia”, 16/01/2011, http://www.smh.com.au/opinion/politics/the-10-big-global-challenges-facing-australia-20110115-19rsb.html

First, it is interesting to note that Rudd's 10 big global challenges facing Australia only include his greatest moral challenges of human kind, that is, climate change and emissions reduction as a sub item to food security, energy security and climate change.

What a change from K Rudd, after falling from Australian Prime Minister in June 2010!

Is that a change of heart, or change from learning?

It will be interesting to see and know.
 
Second, some people would observe the difference he describes China's rise and India's, perhapsa sign that the shadow of his advice to the US on using force against China still lingers. Closely related is how his APC idea will go in the region. It is likely that will go down the drain, together with his ambition to become the UN Secretary General.
 
Third, Rudd puts the continuing global democratic deficit before his number 10 challenge - the problem of global governance – so central to dealing with practically all the above challenges. This must be wrong order of priority for him.

PS: the site where Rudd's post appeared did not allow normal comments but on twitter, so I could not submit my comments, so you will not be able to find my comments there.

Rudd and Rudd - brothers

Comments on Greg Rudd “Always expect the unexpected”, 30/12/2010, http://www.theaustralian.com.au/news/opinion/always-expect-the-unexpected/story-e6frg6zo-1225978219105

While I was amused when reading the first half about we Australians making jokes about our PMs, I have some questions about G Rudd's second half.

His argument about America and China in terms of unintended consequences, for example, may be only half correct. Clearly, access to large overseas markets like the America's has played a useful and possibly important role in China's rise over the past two decades, the seed of its rise was sod in the late 1970s. Further, the key elements of China's economic rise have lied in its political stability with its main focus on economic development as opposed to political campaigns that has characterised the Mao's era proceeding the reforms.

So, in my view, America to the most played a useful reservoir role to China's economic growth to adjust its uneven processes, and to accelerate its capital accumulation process. But that should not have been the deciding factor.

Another is his argument about 2011: "a leading global issue for 2011 is going to be workforce availability and cost of labour."

That will undoubtedly be true for Australia, possibly for some developing countries including possibly China (the emerging shortage of surplus rural labour supply), but it will be unlikely true for the US, Japan and most of Europe and they still have a lions share of the world economy. The latter' economies will still be struggling to rid of their recession or debt issues or austerity consequences like the UK.

The world has been multi speed economy! The global economic crisis, more more accurately, the North Atlantic financial and economic crisis, has made the differences in economic growth among the world economies much more contrasting and possibly more enduring!

However, for Australia, there is a question about the improvement or benefit for local "labour", of mining boom. Many business people argue that immigration should be used to ease the pressure of labour shortage, but they are for their own interests, that is, more immigration and increases in labour supply will depress labour wages and increase their profits at the expenses of local labour.

The government should consider the impact on local businesses and local labour of immigration, as compared to just taking a pro business approach and liberalise immigration. That is unjust to local labour both in terms of the direct effects on current wages and the indirect effect on their skills upgrading!

That is the essence of analysis of political economy!

More interesting time lies ahead to watch!

Gillard's danger is too opposite to Rudd in vision

Comments on David Burchell “Let grandiose plans wither on the vine”, 29/11/2010, http://www.theaustralian.com.au/national-affairs/let-grandiose-plans-wither-on-the-vine/story-fn59niix-1225962381497
Burchell says: "The worst mistake would be to seek emancipation from Rudd by emulating him. We have no more call for high-flown self-kiddery and flamboyant insincerity. We can live without the grandiose self-puffery and fantastical self-conceptions. Least of all do we need any more prime ministerial philosophy lectures."

That is unlikely to be the case with Gillard. To the contrary, Gillard is in danger of being too far to the other extreme: lack of vision.

That is itself a serious problem for her and the government – no policy but poor ones.

With such a government as Gillard as the PM and its core, as well as the Rudd legacy to reflect, the nation will pay a hefty price!

Lethal Rudd factor yet to play out in full

Comments on Paul Kelly “Recipe for uncertain government”, 8/09/2010, http://www.theaustralian.com.au/news/opinion/recipe-for-uncertain-government/story-e6frg6zo-1225915572606
It would be fair to say that the new Gillard government is likely to be much better than the government under Rudd in the past three years or so. It has to be much more disciplined than ever before. But the Greens will exercise more power and that can be detrimental to regional Australia and the whole nation as a whole.

Having said that, I think it is not right that a government that was that bad has only been punished by the people but not by the two rural independents. That is unfair to the Australian people.

Further, a consequence of the two indies decisions is that the NBN waste will continue and the total costs will possibly be much more than the $43 billion price tag that the last government put on it.

One potential instability of the new Gillard government may be the Rudd factor within the ALP, no matter how the two indies act, hope and wish.

If any of Rudd supporters decides to pull the plug, then a by-election may be on the way coming.

That may be the ultimate way to do justice to the Australian people and ironically to the indies themselves.

PS: For Rudd and supporters, the most important issue may not be whether Rudd will be an important minister or not, it may be how the Rudd era will be viewed in history. On that front, big egos may come to play. That may defy some logic but will have its own logic.

Rudd has both weaknesses and strengths

Comments on Barry Cohen “No one assassinated Rudd, he simply topped himself”, 27/07/2010, http://www.theaustralian.com.au/news/opinion/no-one-assassinated-rudd-he-simply-topped-himself/story-e6frg6zo-1225897188218
While it is likely that Rudd had undone himself in the end, it could also be the case that when he was in power, few nasties about him were said and after he fell from grace, many people may vent their displeasure of him in volumes and say excessively on his nasties and not mention any of his virtual if any had existed. Both are exaggerating.

It is just like the pendulum swings, left and right but seldom in the right spot.

So the true is likely somewhere in between.

Rudd definitely has both enormous strengths and significant weaknesses. But in the end, his weaknesses became dominant that led to his falling from grace.

However, one should acknowledge both his weaknesses and strengths if to be objective and unbiased. That seems lost at the moment and he is all engulfed in negativity. That is a bit unfortunate.

It appears now that some people within the government and possibly the Unions who want to see Rudd completely destroyed and leave no place for him in the cabinet if the government is returned.
That is understandable, but can be nasty too.

Rudd could be an excellent foreign minister

Comments on Malcolm Colless “Lack of tact would make Rudd poor diplomat”, 13/07/2010, http://www.theaustralian.com.au/news/opinion/lack-of-tact-would-make-rudd-poor-diplomat/story-e6frg6zo-1225890927529
Rudd clearly has some weaknesses in his leadership style. But those weaknesses are likely to be magnified when the scope of issues expands. Conversely, when the scope of the issues is narrow as in one ministry, Rudd could be performing well even with those weaknesses.

Further, the public humiliation of being dumped from PM and the public revelation of his weaknesses are likely to force him to improve his leadership style.

Another point is that if Rudd is not in the supreme position such as the Prime Ministership, his weaknesses may be constrained because he himself is constrained.

In short, Rudd is intellectually very talented and should be afforded another chance to contribute to the nation. Rudd could be an excellent foreign minister after all.

We should all take a notice how scarce of talented politicians are in Australia politics, especially now. Let's not waste scarce political human resources we have got.

An important point missing among controversies

Comments on Tim Costello “Like a death in the national family”, 1/07/2010, http://www.theaustralian.com.au/news/opinion/like-a-death-in-the-national-family/story-e6frg6zo-1225886408476
With all respect for Tim Costello, it seems he has got some incorrect views on the event of Rudd's demise from his Prime Ministership.

It was not just the polls but also his leadership style and poor political judgement and bad policy proposals that brought him undone. He is reported as a control freak, does not consult even the senior ministers, let alone the caucus and other people, his people and management skills are also reported to be very poor sometimes showing little or no minimum courtesy to others.

He clearly had made a few bad policy choices and or poor implementation of policies or programs.

It is unfortunate that the former PM lost in such a way, but given the facts and the way he dealt with issues and policies why should a nation stick with a poor leader? A related question, why should a person's own fault affect or even determine the fate of a party? Isn’t the nation better off if an incompetent national leader gives way to better leaders?

We all may have some sympathy for Rudd, but we should also find and accept a way for better national governance.

If looking from that point of view, there is nothing too bad from that event of changing the prime ministership.

However, given the controversies that event has caused, it is worthwhile to consider how the national governance can be improved and what institutions and mechanisms we need to ensure that can happen under the current model of democracy and election system.

It is a pity that few Australians have discussed this important issue.

Duckling Swan still swimming and sweating

Comments on Alan Kohler “Gillard must mop up Swan's mess”, 25/06/2010, http://www.businessspectator.com.au/bs.nsf/Article/Gillard-must-mop-up-Swans-mess-pd20100625-6QT66?OpenDocument&src=sph
It indeed has been interesting to see that Swan has been promoted to Deputy Prime Minister and remains Treasurer, after so many Treasury disasters and the fatal RSPT fiasco.

I would have thought Swan should have been promoted from a senior minister. Even he has been promoted to the Deputy, he should have been removed from his Treasury portfolio to another non-economic portfolio to show to the taxpayers and the public that the new government is serious about its past mistakes.

The most interesting irony of this is that Swan has shown no loyalty to his former boss and long time friend Mr Rudd at all, given what he has done and the fact that it was him who had caused his former boss' top job in the country.

Haven’t we heard of “the gang of two” out of “the gang of four”? Haven’t we heard from Rudd what role Swan played in both the shelving of the ETS and the RSPT? (Actually no one needs to be reminded of Swan’s role in the RSPT because he was and still is the Treasurer.)

That does not look good for his character or personality – he does not have the gutter to take responsibility if things go bad.

On the other hand, Lindsay Tanner, whether it was coincidental or not, has shown a quite different story of loyalty from Swan.

It is indeed interesting politics, but I reckon it was for the numbers and political stability and once the election is over, we can expect more significant changes.

Even that, few would deny it is fascinating! That could, however, have laid the seed of future problems for the Gillard ministry.

While it is a matter and business for the ALP and Gillard to decide, I don't think Swan has the ability to do good for the nation, if his past performance is a guide.

The price paid by Rudd personally - and taxpayers

Comments on Christopher Joye “How Rudd's bad advice won Gillard power”, 24/06/2010, http://www.businessspectator.com.au/bs.nsf/Article/Rudd-refused-the-best-advice-pd20100624-6PUZL?OpenDocument&src=sph
This rare and useful information provides excellent insights into the pitfalls of decision makings at the top of the national government.

Of course, we can only see how the PMO advisors operated. Some other interesting of the picture would be how Treasury and the Treasurer operated in such an environment.

Ultimately, it was the combination of them, and possibly some other handful people involved in the process.

This is the price Rudd paid, but ultimately the taxpayers have paid for low transparency and mal-management by the government.

PS: I find the information is extremely insightful. In case that the reference would not be available for any reasons in the future, here is a copy of the article:

So Australia has its first female prime minister.

In the inevitable wave of post-mortems written about Kevin Rudd’s prime ministership there will be much made of his political mis-steps.
The absence of a historical constituency of factional support. The school-boy errors committed by his chief of staff, which disenfranchised key powerbrokers when he sought to count numbers on the PM’s behalf – a job typically left to MPs – and then leaked this fact to the media.
Here the lay observer might be confused. Yet to the initiated, Alister Jordan’s actions were insulting to Julia Gillard and her backers, since they insinuated that she’d been seeking to undermine the PM when, in practice, Gillard had been relentless in offering support. In the words of one kingmaker, this was the straw that broke the camel’s back.
Then there was, of course, Rudd’s unilateral decision-making processes, which in the early days of his administration were lauded by the commentariat as commendable reform to the archaic and undemocratic caucus system. In this context, the deliberate centralisation of authority within the closed-circle that was Ruddland was most clearly displayed by Kevin07’s determination to eviscerate caucus’ right to appoint cabinet ministers.
We will doubtlessly hear much talk of the ruthless retribution wrought by the serpentine unions that control caucus, and whose incredibly well-funded campaign against the coalition’s WorkChoices policy were essential ingredients to Rudd’s success at the last election.
Watching the slaying of a Prime Minister on Sky News and in real-time via twitter and text offered political tragics visceral satisfaction rarely experienced since the days of Ancient Rome’s coliseums. The advent of a world enmeshed by the internet has yielded us a new form of gladiatorial bloodsport, which, once shielded by elites behind closed doors, now plays out blow-by-blow in our living rooms.
While there will be many putative victors in this battle, perhaps the most intriguing is the charismatic hitman Paul Howes of the AWU, who in his late twenties is shaping up as the country’s most influential and politically capable union official and an heir to Bob Hawke.
But when all is said and done, the commentariat’s conclusions will miss the point. They will be consumed by the superficial symptoms of Kevin Rudd’s problems, rather than their underlying cause. This was not really about politics. The PM’s political errors were merely visible manifestations of a far deeper and more significant malaise.
At the end of the day, Rudd’s downfall was about leadership in the conventional managerial sense that the owners of small businesses and chief executives understand. And it was about the exceptionally poor preparation professional politics affords one prior to tackling the single most challenging leadership exercise of them all.
The early indication of Rudd’s date with a one-term destiny was his inability to recognise his own shortcomings. In any normal circumstances, the CEO of a major company who lacked experience relevant to his task would promptly compensate for this deficiency by surrounding himself with advisors that possessed the requisite skills. Take James Packer’s decision following his father’s death to immediately establish a council of the most weathered and hard-headed minds in the business. This talent was critical to helping him transition away from the family’s traditional media investments at the best possible point in the cycle.
By way of revealing contrast, Kevin Rudd constructed a benign dictatorship on the back of three influential twenty-somethings with virtually no experience at all. That is to say, his principal political, media and economic advisors had never held down day-jobs in the real world for any meaningful length of time. And how could they have been expected to do so? While brimming with talent, these guys had only been out of university for a handful of years.
Rudd’s decision to surround himself with youngsters who acted as echo chambers of his own opinions was a mistake of both stunning and catastrophic proportions. Having been out of government for a similar period time, his predecessor’s office, which was guided by veterans such as Grahame Morris, Arthur Sinodinos, and Tony Nutt, with decades worth of germane know-how, makes for an awkward comparison.
The composition of Rudd’s office was the most transparent signal that he had no idea what he was doing. If he was indeed a proven managerial maestro, he could have got away with it. (Some argue that Bob Hawke did.) Yet Rudd was none of these things.
Jejune hubris resulted in both Rudd and his advisors attributing their seamless success at the 2007 election to unique political skills, which appeared in no need of support, when, in fact, their ascendancy had more to do with an electorate fatigued with an ageing, multi-term prime minister, and the myopia born from having been inculcated from economic adversity for 18 years.
I was personally exposed to, and could empathise with, Ruddland’s naiveté. After years at Goldman Sachs, the Reserve Bank of Australia, and Sydney and Cambridge Universities, I felt like I could take on the world. I thought that there was really not much more I needed to learn. And it was with this mentality that I decided to start an awesomely ambitious business. Over the ensuing years I would learn that no matter how smart you are, there is simply no substitute for hard won, life experience. Rudd and his advisors will reluctantly arrive at the same conclusion when they reflect on what went wrong.
For better or worse, I also got to see first-hand the writing on the wall. One of Rudd’s consigliere would occasionally call me for economic advice. And these exchanges would reveal the raw inexperience that was driving the country. In the middle of the GFC I fielded a call asking me what the ‘commercial paper’ (CP) market was. Rudd’s office had been accused by the deputy governor of the RBA of inadvertently ‘killing the CP market’ with the government’s bank guarantees. What does all this mean, I was asked.
The commercial paper market provides the short-term funding needs for very highly rated corporations. By offering to lend the Commonwealth’s AAA-rating to banks and building societies with far lesser credit ratings, the government had unwittingly destroyed demand, or liquidity, for debt securities in more highly rated sectors that did not have the benefit of this taxpayer support. This included AAA-rated residential and commercial mortgage-backed securities, mortgage trusts, and highly-rated commercial paper that large companies relied on. I obliged with an explanation while at the same time wondering why I was having to supply one.
Then there was Rudd Bank. Australians were greeted with the surprising news that Rudd had decided to commit $2 billion of taxpayer cash, and nearly $30 billion worth of taxpayer guarantees, to bailing out small commercial property investors on the unstated basis that these assets posed a threat to the major bank’s balance-sheets.
So I asked Rudd’s advisor what their assessment of the risks had been prior to launching this unprecedented and expensive initiative. In particular, I asked what they thought the banks’ loan-to-value ratios (LVRs) were to the commercial property assets in question.
Westpac and ANZ had already had near-death experiences with commercial property in the early 1990s. Since that time all the majors had scaled back their exposures and adopted much more conservative lending practices.
My own intelligence suggested that the vast bulk of the loans were written with low LVRs of 50 per cent of less. This meant that the assets would have to suffer extraordinary hair-cuts in value before the banks were genuinely threatened.
Anyways, the response I received was worrying. The short answer was that the PM’s office did not know. Stunned, I enquired as to how they could possibly have made the decision to commit billions of dollars taxpayer funds without first having this information. After all, it existed—it was just a matter of getting it from the banks.
We cannot make head or tail of APRA’s data, I was told. But mate, you are providing hundreds of billions of dollars worth of taxpayer guarantees to these institutions. Surely you have asked for this directly from them? Nope. We primarily just meet with the chairmen and CEOs.
Shocked, I said, That’s a bit disturbing. The PM’s office should be getting fortnightly or monthly feeds directly from these institutions on all their key operating and risk metrics so long as the insurance is in place.
Backtracking, I was asked whether I could prepare a ‘data request form’ that they could then send to the banks. I naturally obliged and was subsequently told by senior regulators that the PM’s office had implemented the new regime.
The problem for Rudd and his advisors was they did not know what they did not know. The professional inexperience meant that they were being plagued by Rumsfeld’s ‘unknown unknowns’. But this is not the way it had to be. Rudd could have humbly taken the counsel of vastly more learned operators. That he chose not to is precisely why he is no longer Prime Minister today.
The temporary abandonment of the ETS was not the final nail in Rudd’s coffin. It was a politically expedient decision that most thoughtful folks agreed with. Rudd’s ute-gate was the RSPT. The irony of this is that the principle underlying the RSPT had near-universal support from academic and professional experts. The theory was sound. It was once again the ‘execution’, which is the most visible evidence of leadership, that was fatally flawed.
In an election year, Rudd ended up isolating vital nodes of support from the leader of the nation’s sovereign wealth fund, to directors of the central bank, the financially influential resources industry, and even his principal private sector advisor, Rod Eddington.
Perhaps the most unprecedented and withering criticism came from Australia’s most respected macroeconomist and Reserve Bank board member, Professor Warwick McKibbin. Yesterday he laid Rudd’s headstone:
“I also disagreed with the scale of the stimulus package, and I would say I was right... It wasn't evidence-based policy, they panicked…
The government rammed those decisions through the economy even though they were fraught with risk. No-one was consulted about an alternative view and if you did say anything you were attacked by the Treasurer and the Prime Minister in public...
The stimulus created a problem. The government overspent...so they come up with a really badly designed resource tax to try and get the position to look good three years from now, and in the middle of a sovereign risk crisis exposed the economy to a reassessment of sovereign risk...
I am stunned that the Treasury keeps supporting the government. The review of the tax system should have been independent of the Treasury and then critiqued by it and other economic agencies...
The government has ceased to use the Productivity Commission for sensitive questions. It should have been critiquing the National Broadband Network which is a gigantic white elephant waiting to happen.”

Rudd - from huge success to unprecedented loss

Comments on Alan Kohler “Ignorance, hubris, failure”, 24/06/2010, http://www.businessspectator.com.au/bs.nsf/Article/Kevin-Rudd-Julia-Gillard-leadership-challenge-spil-pd20100624-6PT7V?OpenDocument&src=sph
An excellent piece, Alan.

I think adding to the success or perceived one in tackling the GFC impact was the election victory that laid the foundation of his power centralisation on top of his autocratic management and leadership style. Without that election victory, he would not have been able to ignore the factions.

While his leadership style obviously played an important part, but seemingly good but actually poor advice from the advisors in his office and the federal beauracracy also had a role. He had not been served well by his chosen advisors, or the Treasury and its secretary Dr Henry in the process.
The spending to deal with the GFC was far too excessive and a large proportion of that spending was unnecessary.

That excess laid the foundation for the silly RSPT proposal and possibly the abandoning of the ETS to try to get to budget balance earlier for the purpose of election due to other policy failures, because he thought he needed something to back up his claim of good and conservative economic management.