Banking Royal Commission’s damning report: ‘Things are so bad that new laws might not help’


Peter Martin, The Conversation

Royal Commissioner Kenneth Hayne has identified “greed” as the key reason banks and other financial institutions repeatedly broke the law, along with an inability to manage, and repeated decisions by the Securities and Investments Commission and the Prudential Regulation Authority not to properly punish them.




Read more:
Three billion per year. How the financial system rips us off


The three-volume interim report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, released today, concludes that Australia’s banks have built every part of their operations around selling, to maximise profits, at the expense of serving their customers’ needs.

The report says:

Selling became their focus of attention. Too often it became their sole focus of attention. Products and services multiplied. Banks searched for their “share of the customer’s wallet”. From the executive suite to the front line, staff were measured and rewarded by reference to profits and sales… How else is charging continuing advice fees to the dead to be explained?

The report reaches damning conclusions about the management systems in place at the Commonwealth Bank and the National Australia Bank, saying they were the only two organisations unable to furnish a proper list when asked about the misconduct they had been aware of over the previous five years:

Taken together, the course of events and the explanations proffered can lead only to the conclusion that neither CBA nor NAB could readily identify how, or to what extent, the entity as a whole was failing to comply with the law.

If that is right, neither the senior management nor the board of the entity could be given any single coherent picture of the nature or extent of failures of compliance; they could be given only a disjointed series of bits of information framed by reference to particular events.

It says when misconduct was revealed, it either went unpunished or hurt the perpetrators little:

The corporate regulator ASIC rarely went to court to seek public denunciation of what had been done. The prudential regulator, APRA, never went to court.

Much more often than not, when misconduct was revealed, little happened beyond apology from the entity, a drawn out remediation program and protracted negotiation with ASIC of a media release, an infringement notice, or an enforceable undertaking that acknowledged no more than that ASIC had reasonable “concerns” about the entity’s conduct.

Infringement notices imposed penalties that were immaterial for the large banks. Enforceable undertakings might require a “community benefit payment”, but the amount was far less than the penalty that ASIC could have properly asked a court to impose.

Commissioner Hayne says in the report that it may be pointless to introduce new laws designed to achieve what the existing laws did not:

The law already requires entities to “do all things necessary to ensure” that the services they are licensed to provide re provided “efficiently, honestly and fairly”. Much more often than not, the conduct now condemned was contrary to law… Passing some new law to say, again, “Do not do that” would add an extra layer of legal complexity to an already complex regulatory regime. What would that gain?

What is needed is better enforcement in order to ensure that banks and other financial institutions apply basic standards of fairness and honesty “by obeying the law, not misleading or deceiving, acting fairly, providing services that are fit for purpose, delivering services with reasonable care and skill, and, when acting for another, acting in the best interests of that other?”




Read more:
Vital Signs: for all its worth, the banking royal commission could hurt a generation of battlers


Commissioner Hayne says the basic ideas are very simple.

That means there is a case for the laws being made even simpler rather than more complex to reflect the ideas better.

Receiving the report, Treasurer Josh Frydenberg said if the regulators
enforced the laws but they had at their disposal and imposed the
penalties they had available, banks were more likely to comply with the law.

But he said whatever the criticisms of the regulator, it was important to remember who perpetrated the misconduct.

“That was the financial institutions themselves,” he said. “They are
ultimately, and the individuals involved, ultimately the ones who must
be held accountable and responsible for their actions.”




Read more:
There is nothing sacrosanct about corporate culture; we can and must regulate it


The chief executive of the Australian Bankers Association, Anna Bligh, described the report’s findings as “shocking”.

“Our banks have failed in many ways – failed customers, failed to obey
the law and failed to meet community standards. And all of these
failures are totally unacceptable,” she said.

“Too many customers have been hurt and it has to stop.”

“Australians have every right to expect the world’s best
banks. It is clear today that as an industry we have failed to deliver
that.




Read more:
Embedding regulators in banks can help change cultures of wrongdoing, despite the risks


“Make no mistake, today is a day of shame for Australia’s banks.”

“Having lost the trust of the Australian people, we must now do whatever it takes
to earn that trust back. To move from a selling culture
to a service culture, there is much more work to be done in every
bank. But every bank is determined to find the problems, to fix them
and to pay back every penny.”

The interim report released on Friday examined only the behaviour of the banking, financial advice and wealth management industries. An entire volume details case studies of misconduct.

The Commission’s final report, which will also cover the superannuation and insurance industries, is due on February 1.The Conversation

Peter Martin, Editor, Business and Economy, The Conversation

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Advertisements

Government report provides important opportunity to rethink Australia’s relationship with India



File 20180721 142411 ixjnxe.jpg?ixlib=rb 1.1
Importantly, the new strategy is ambitious, and will be led by, at least for now, the governments of Malcolm Turnbull and Narendra Modi.
AAP/Ella Pellegrini

Craig Jeffrey, University of Melbourne

By 2060, India may be the world’s largest economy. It will certainly be the world’s most populous country. At that point, Australians will ask, “What did we do in the 2020s to build a relationship with this superpower?” They may also ask: “How did economic cooperation with India benefit both countries in the early 21st century?”

The federal government’s report, An India Economic Strategy to 2035, was launched last week in Brisbane. Written by University of Queensland Chancellor Peter Varghese, it is an excellent basis for reflecting on these questions and the wider issue of Australia-India cooperation.

The strategy identifies numerous sectors – health, education, and tourism, for example – that can help enhance economic cooperation, and in which Australia has some comparative advantage. It also specifies ten Indian states as targets for collaboration based on their economic heft, commitment to reform, and relevance to the sectors in which Australia has competitive advantages.

Importantly, the strategy is ambitious. It sets itself the goal by 2035 to lift India into Australia’s top three export markets. It intends for India to become “the third largest destination in Asia for Australian outward investment”, and for it to be brought “into the inner circle of Australia’s strategic partnerships.”




Read more:
Why it’s the right time for Australia and India to collaborate on higher education


The strategy emphasises two areas that need attention in order to meet these objectives. First, Australia needs to leverage the strengths of the Indian diaspora, which now numbers about 455,000.

The rapid growth of the Indian diaspora population can be a spur to economic cooperation. The Indian population in places like Silicon Valley drive the IT and biotech booms in India and the US. Canada is highly adept in enrolling its Indian diaspora in projects of national and international development.

Second, Australia needs to build more knowledge of India and support organisations that work on the bilateral relationship. While Australia made a pivot towards China in the last quarter of the 20th century, businesses, governments, and the public developed comparatively little knowledge about India.

The emphasis on China led to a neglect of India in education, media, and the policy sphere. There is a need to rebuild public understanding of India and the institutions that can activate this understanding to achieve lasting impact. Culture and arts will be very important here, both as a sector and enabler – points implicit in the strategy.

Varghese says we need to move beyond constantly drawing comparisons between India and China. “India is not the next China,” he writes. India is a distinct opportunity for engagement that merits discussion in its own terms.

The base from which Australia is working with respect to cooperation is certainly different: Australian exports to India are less than a sixth of those to China.

Two further issues will be crucial for the strategy’s successful implementation. The first concerns the relationship between growth and wellbeing. It is clear that the India Economic Strategy imagines enhanced cooperation not as a basis for economic growth as such, but also higher standards of living.

There is a need to reflect carefully here. We must think not only about spurring growth in the Australian and Indian economies, but also ensuring that growth is meaningful in four ways: that it addresses social and economic inequalities, creates jobs, is environmentally sustainable, and fosters opportunities to lead fulfilling social and cultural lives.

This is where the comparison between India and China is important. Since 2000, India’s economic growth has been not much more than half as effective at lifting people out of poverty as China’s economic growth. This means that for every 1% growth in Gross Democratic Product in China nearly twice as many people are elevated out of income poverty as in India. This partly reflects the depth of social inequalities in India.




Read more:
Australia and India: some way to go yet


In the context of rising concern over inequality in Australia as well, the key question is: How can international economic cooperation create growth that reduces inequalities, generates jobs, and protects the environment in the countries concerned? It is a question that puts Australia and India on the same side of the table.

A second issue concerns the term “navigation”, which is in the title of the strategy. As the Danish anthropologist Professor Henrik Vigh has pointed out, navigation is a great metaphor. It connotes plotting and re-plotting a course on a moving plane. The complexity of that plane in this case calls to mind the six degrees of motion of a boat: pitch, roll, yaw, sway, heave, and surge. The strategy’s recommendations and ideas are excellent, and can be re-calibrated as India and Australia pitch, heave, and yaw.

The ConversationThe India Economic Strategy is an exciting document written with confidence and ambition. It provides a foundation for reflecting on economic cooperation and striving for meaningful growth.

Craig Jeffrey, Director and CEO of the Australia India Institute; Professor of Development Geography, University of Melbourne

This article was originally published on The Conversation. Read the original article.

Lessons to learn, despite another report on missing flight MH370 and still no explanation


Geoffrey Dell, CQUniversity Australia

The latest report into the disappearance of Malaysia Airlines flight MH370 says that investigations have failed to find any explanation as to why the aircraft went missing with 239 passengers and crew on board.

The 449-page main report (with additional appendices) from the Malaysian government builds on previous reports on the investigation into the missing aircraft but admits it is “limited by a significant lack of evidence”.


Read the report: MH370 Safety Investigation Report – Ministry of Transport Malaysia


It’s been four years since the Boeing 777-200ER went missing from its routine flight between Malaysia’s capital Kuala Lumpur and China’s capital Beijing.

The aircraft was later found to have deviated from that flight path, with calculations showing that it probably disappeared somewhere in the Indian Ocean, off the Western Australian coast.

But despite an extensive search led by Australia, and later a private operator search, the report says no main wreckage or bodies of the 227 passengers and 12 crew on board have ever been found.

Some parts identified as confirmed or almost certain to have been from the missing aircraft have been recovered, washed up around the Indian Ocean.

Confirmed and almost certain debris identification wreckage from MH370.
Ministry of Transport Malaysia

The aircraft itself has not been located, and neither the aircraft’s Flight Data Recorder (FDR) nor the Cockpit Voice Recorder (CVR) has been recovered. The only information available to the investigators was from other sources, making triangulation and validation of evidence difficult, if not impossible.




Read more:
The search for MH370 is over: what we learnt and where to now


Who’s to blame?

The report notes that MH370 went missing on March 8, 2014, soon after a routine handover from the Malaysian to Vietnamese air traffic control. Communications with the aircraft were lost less than 40 minutes after takeoff.

Both Malaysian and Vietnamese air traffic controllers delayed initiation of emergency procedures once communication could not be established with the aircraft following the crossover from one air space to another. This, the report says, delayed any search-and-rescue response.

Given that the initial search area was north of the Malaysian Peninsula on the aircraft’s intended track, and any information suggesting the aircraft might have flown back over the peninsula didn’t emerge for some time, the initial delays in initiating the search-and-rescue phase may be moot.

The report covers several other issues related to the flight, aircraft maintenance, the crew, the cargo etc, but its conclusion ends with the line:

…the (Investigation) Team is unable to determine the real cause for the disappearance of MH370.

Still a mystery

Clearly, someone or something was responsible for the loss of the aircraft, passengers and crew. But without evidence from the flight recorders it’s unlikely that any of the many theories as to the cause will be proven.

The report suggests that from the available information and simulations, the aircraft was manually turned off the planned track, suggesting an intent on behalf of whoever was flying the aircraft. The turning off of the transponders that allow the aircraft to be tracked by civilian radars also suggests intent.

Hence the report goes to some lengths to suggest that unlawful interference with flight MH370 cannot be ruled out.

But extensive background checks of the captain and other crew found absolutely no evidence of anything other than a dedicated, professional team who set off to do their job as they had done many many times before.

So the causes of the tragedy are likely to remain conjecture for some considerable time, unless new evidence comes to light.

No closure for the families

Clearly the families of those who perished onboard MH370 will not gain much closure from this report. It contains very few answers for them.

But it needs to be said that the air safety investigators need data from multiple sources to try to establish with a reasonable degree of certainty the causes of crashes.

Aviation is a very complex socio-technical system that requires reliable analytics to fully understand the system interactions and deviations. Yet without the recorded flight data and no access to the wreckage, the ability to find cause is critically hampered.

Lessons learned (and to learn)

Since the loss of MH370 there has been a global push to improve tracking of airline aircraft. Clearly the travelling public want air traffic control authorities to know where all the aircraft are all of the time, without fail and without the capacity for anyone to turn the tracking system off.

Many in aviation would like that ideal world too. But the current tracking systems don’t have that capacity. The amount of data that would entail is well beyond the capacity of the present systems, and the cost of upgrading the systems to cope with that would be exorbitant.

For example, the current satellite constellation would need to be expanded or significantly enhanced. So, there has to be a compromise.

As the report suggests, it’s likely that improvements to the system will result in airborne aircraft “handshaking” with the tracking system every 15 minutes with GPS position, altitude, heading and speed data.

This should significantly improve the probability of finding an aircraft lost, but it will not guarantee a lost aircraft’s location will be known.

For example, if the aircraft is cruising at 350 knots (about 650kph) when it makes its last handshake with the tracking system, in 15 minutes it could be anywhere in a search area with around a 300km diameter, still representing a significant search conundrum.

Changes in emergency locator beacon capability are also arising from the MH370 experience. The problems with underwater signal acoustics will remain problematic. So design changes in future will likely see beacons that have the capability to detach and float to the surface if an aircraft crashes into water.

From the perspective of the families and from the basis of needing to understand the real lessons from MH370, ideally the search for the aircraft should continue.

The ConversationBut the real challenge is where to look. Without new data to inform a new search effort, the only thing really known is the aircraft is most likely in the Indian Ocean somewhere. That’s the message from the wreckage that has washed ashore.

Geoffrey Dell, Associate Professor/Discipline Leader Accident Investigation and Forensics, CQUniversity Australia

This article was originally published on The Conversation. Read the original article.

Consumers let down badly by electricity market: ACCC report


Michelle Grattan, University of Canberra

The Australian Competition and Consumer Commission has called for sweeping reform of the national electricity market to lower power prices and restore consumer confidence.

In its damning report, to be released on Wednesday, the ACCC says consumers face a confusing and unfair market. Discounts are misleading and need to be made fairer; customers should be able to compare these against a benchmark rate set by the Australian Energy Regulator.

The ACCC backs the Turnbull government’s push for its National Energy Guarantee (NEG), calling on other governments to commit to it. The federal government is presently trying to bed down the NEG with states and territories, against a distracting background of criticism from former prime minister Tony Abbott.

Prime Minister Malcolm Turnbull will deliver a consumer-focused speech on energy and power prices to the Queensland Media Club on Wednesday.

The ACCC’s recommendations would require action by federal and state governments.

The ACCC says the electricity market is facing its most challenging time, with the present situation being unacceptable and unsustainable. But it holds out the prospect of “significant gains” for consumers and businesses if the changes it recommends are made.

Urging a reset, it says reform can “bring down prices and restore consumer confidence and Australia’s competitive advantage”. Unnecessary costs need to be got out of the system to save consumers hundreds of dollars annually.

The ACCC urges changes to get greater competition among wholesalers and retailers, and says network charges must fall.

Tougher powers should be given to the Australian Energy Regulator to deal with “market manipulation”.

The customer transfer process needs to be speeded up, enabling people to move to new offers quickly. Special conditions like pay-on-time discounts should not operate in a harsh punitive manner.

The ACCC says small businesses should get access to the same improved rules as households.

Third-party sites showing comparisons in prices should state their commissions, it says.

The ACCC says there is a case for government support to underpin long-term contracts for large commercial and industrial users that brings on new dispatchable generation from operators that do not currently have a large market share.

It says big generators and retailers (“gentailers”) have market strength and often charge a large premium when selling wholesale electricity to their own retail operations.

The ConversationIt recommends a cap on any further merger or acquisition by a company with more than 20% generation market share – although such a company would be permitted to build new generation capacity.

Michelle Grattan, Professorial Fellow, University of Canberra

This article was originally published on The Conversation. Read the original article.

No clear target in Australia’s 2030 national innovation report



File 20180131 38223 npe3qq.jpg?ixlib=rb 1.1
The new report started as a central plank of Prime Minister Malcolm Turnbull’s 2015 National Innovation and Science Agenda.
from www.shutterstock.com

Leigh Dayton, Macquarie University and Roy Green, University of Technology Sydney

The long wait is over. As of this week, Australia has a strategic plan that promises to rejuvenate the nation’s lagging innovation performance – Australia 2030: Prosperity Through Innovation. But instead of a roadmap for action, it’s more of a sketch with detours, dead ends, and red lights which should be green.

This plan started as a commitment in Prime Minister Malcolm Turnbull’s 2015 National Innovation and Science Agenda. And it has now been prepared and released by an independent public agency, Innovation and Science Australia (ISA), after a Senate inquiry into the Australia’s research and innovation system and broad consultation across the community.

The report offers a range of 30 recommendations categorised into five “imperatives for action”: Education, Industry, Government, Research and Development, and Culture and Ambition. As part of this last imperative, ISA also proposes an ambitious National Missions initiative, comparable with moon shots.

We have a problem

Not only has Australia 2030 been widely anticipated in industry and in the research and education sector, it is much needed. The nation has a problem. On most international measures, such as the widely recognised Global Innovation Index, Australia consistently lags behind international competitors.

In 2017, the index ranked Australia 23rd of 127 countries in terms of its research performance. But on innovation efficiency, which is a measure of how well we translate research into commercial outcomes, we rank a lowly 76th. Even New Zealand beat Australia on both measures. And it gets worse. Australia was last on the 2017 OECD Science, Technology and Industry Scoreboard when it comes to high growth enterprises.

Before he was appointed Chair of the ISA Board, Bill Ferris bluntly declared of the nation’s research and development (R and D) performance,

Australia has internationally competitive R and bugger-all D.




Read more:
National Science Statement a positive gesture but lacks policy solutions: experts


A curate’s egg

So it comes as a disappointment that the new strategic plan is something of a “curate’s egg” – good in some parts, but with missed opportunities in others. It is perfectly right, for example, in:

  • restating the need for urgent action if Australia is to maintain its social, economic and environmental well-being

  • recognising that the nation’s science and innovation system is a fragmented collection of institutions, programs and enterprises – public and private – cobbled together in a complex array of federal and state jurisdictions

  • identifying a leading role for government in the establishment of the policy and regulation settings within which participants in the innovation system operate, and

  • urging government to take an active role itself in the innovation process by, for instance, encouraging pre-commercial procurement of products from industry and “role modelling” 21st century service delivery.

Implementation not clear

However, the plan’s weaknesses become apparent when considering the policies and mechanisms needed to achieve the goals it outlines. How often is it in these discussions that laudable aspirations struggle to be matched by a coherent and adequately funded implementation strategy?

Consequently, the plan reads like a shopping list of disconnected ideas and initiatives, many of which are jarringly specific – “grow government procurement from Small to Medium Enterprises to 33% by 2022” – while others are sweeping: “increase commercialisation capability in research organisations”.

The problem is that details about how to turn such ideas into reality are less easy to find. This is surprising as there are many programs and approaches, both in Australia and internationally, which offer models and solutions.

An example: many Australian universities are taking steps to ramp up their “commercialisation capability” by hiring people with industry experience, encouraging scientists to collaborate with the end-users of their research, and simplifying the management of their intellectual property.

Similarly, little is said about the broader research and innovation system, and its deficiencies, in which the policy proposals are supposed to achieve results? These deficiencies are noted, not tackled. In contrast, global players like the UK, Germany, Finland, Sweden, South Korea and Singapore are busy reshaping their innovation systems with targeted industry policies to identify areas of current and future competitive advantage.

What are we good at?

While the ISA’s strategic plan paints a broad picture of where Australia needs to be in 2030, it does not provide any guide, let alone analysis, of these areas of potential competitive advantage. What is this country good at doing? What does it need to learn to do to compete in the global markets and value chains, and in which sectors of the economy?

Answering such questions is the job of technology foresight exercises where future scenarios are mapped out and planned for – something ISA seems not to have tried. It certainly had plenty of time to do so. Instead, the plan offers a set of national missions and strategic opportunities, with only isolated illustrations of how they can be achieved.

For example, the plan proposes a national mission to make Australia “one of the healthiest nations on Earth”. Who could argue? But in targeting “genomics and precision medicine”, where Australia does indeed excel, it avoids more controversial issues like controlling the population’s sugar intake.




Read more:
It’s 2030, and precision medicine has changed health care – this is what it looks like


Moreover, some of the other major issues facing Australia were seemingly not up for discussion, such as the challenges of renewable energy and super-fast broadband. Though these are mentioned as “beyond the scope of this plan”, can we realistically sell new national missions while current ones are unresolved?

For a plan that is supposed to embody longer term thinking, it is disappointing to see such capitulation to short-term political pressures. Why not try to deal head-on with the reality that the current government – every government – is ruled by politics and the three year political cycle. It’s frustrating for everyone that policies, funding and programs are chopped and changed, according to the government of the day.

Right now, the Turnbull government is moving in the opposite direction to the policies and priorities needed to underpin the ambitions of Australia 2030. It is cutting research and education, ignoring climate change, and clinging to a commodity economy.

Need for clear direction

Of course these are difficult challenges for a body like ISA. However, it is the function of a national science, research and innovation strategy to identify challenges and address them. It must offer not only a clear direction for the future but also coherent and effective pathways that enable those operating in the innovation system to deliver tangible outcomes.

No doubt the ISA strategy contains elements that will hit these targets, which is why we must wish it well. But equally it needs an organisational rethink: what are the national goals? What are the problems, and how do we go about fixing them, step-by-step, in a systematic way? Maybe this can be the next item on its agenda.

The ConversationGlossy plans and lofty ambitions are good, and their educational value for both the political classes and the wider community should not be underestimated. But a blueprint for a constantly evolving, properly funded and joined-up research and innovation system would be better.

Leigh Dayton, PhD candidate, Macquarie University and Roy Green, Dean of UTS Business School, University of Technology Sydney

This article was originally published on The Conversation. Read the original article.

The royal commission’s final report has landed – now to make sure there is an adequate redress scheme



File 20171217 17878 1ykrkkb.jpg?ixlib=rb 1.1
The royal commission has handed down its final report – now the real work begins.
Shutterstock

Ben Mathews, Queensland University of Technology

The Royal Commission into Institutional Responses to Child Sexual Abuse has performed its task magnificently. Its scale, complexity and quality is unprecedented. Its work is already being acknowledged internationally as a model of best practice.

As a nation, we can be proud of the commissioners and their staff. We should acclaim the courage of all survivors, including those who informed the commissioners about their experiences, and we should honour those who have not lived to see this day.

We must recognise the integrity and strength of those who advocated for the inquiry, including survivors, their families, journalists and police. We should applaud former prime minister Julia Gillard for initiating the commission, and the current federal government for ensuring it was adequately resourced.

But this is not the end. The real work begins now. Australian governments and major social institutions now have not only the opportunity, but the responsibility, to create lasting social change. Their responses will be monitored here, including through requirements to report on their actions, and around the world.

The royal commission’s impact

This watershed inquiry has created the conditions for a seachange in how society deals with child sexual abuse in institutions, which can flow to our treatment of sexual abuse in other settings.

Our society’s leaders can build progress from the pain of former failings. Not meeting this responsibility would surely stick as a lifelong regret for those in positions to cement change. Fulfilling this imperative can leave a legacy of which these government and institutional leaders can be proud.

Substantial progress has already been made. The commission’s earlier reports have influenced important changes to civil justice systems, criminal justice systems, organisational governance, and prevention, including situational prevention in child and youth-serving organisations.

The Child Safe Standards now promoted by the commission are substantially embedded in legislation in several states, requiring organisations to adopt comprehensive measures to prevent, identify and respond appropriately to child sexual abuse.

Civil laws have been amended in most jurisdictions to allow claims for compensation, holding individuals and organisations accountable.

In some states, new requirements to report known and suspected cases apply through special “failure to report” and “failure to protect” offences in criminal laws. They also apply through separate reportable conduct schemes that add essential independent external oversight.


Read more: Royal commission recommends sweeping reforms for Catholic Church to end child abuse


Yet much remains to be done. The reforms already made in some states must be adopted elsewhere to create national consistency.

Accountability of individuals and organisations is essential to create cultural change, and needs to be achieved through both civil systems (such as following Western Australia’s recent bill enabling lawsuits against organisations that previously could not be sued, such as the Catholic Church), and criminal systems (for example, prosecuting those who harbour offenders, and removing criminal law principles that compromise criminal prosecutions).

Other state and territory mandatory reporting laws need to be harmonised, as recommended by the commission. Many of the commission’s new 189 recommendations are rightly directed towards prevention, especially through the Child Safe Standards, including their requirements for education, codes of conduct, situational prevention, and the commitment required of organisations’ leadership.

We must focus our efforts on the future, but we must also ensure we properly deal with the past. Perhaps the single most important aspect of this is the redress scheme.

What happens now with redress?

The national redress scheme is behind schedule and must be finalised with sufficient funding, and government and institutional commitment.

The bill for the scheme remains before parliament, awaiting a committee report due in March 2018. It is yet to receive the commitment of all states, territories, and relevant organisations.

The commission recommended the scheme be operational by July 1, 2017, with an upper cap of A$200,000 and an average redress payment of $65,000. Under the bill, the scheme’s cap is $150,000, substantially below the recommendation, and even further below the average payment awarded in Ireland of more than €60,000 (about A$92,200). In Ireland, the highest payment was more than €300,000 (about A$461,000).

The Australian scheme contains three elements. First, a monetary payment as tangible recognition of the wrong suffered by a survivor. Second, access to counselling and psychological services (estimated at an average of $5,500 per person). Third, if requested, a direct personal response from the responsible institution(s), such as an apology.

Not all survivors will apply to the scheme, as many are not financially motivated. However, it is an essential part of a healing response. This has been shown internationally in Canada, Ireland and elsewhere.

Redress schemes are more flexible and speedy, with less formality and cost, and less trauma and confrontation, than conventional legal proceedings. Payments are not intended to replicate the amount that would be payable under a formal civil compensation claim, and instead are far lower.

Accordingly, institutions should recognise the lower financial commitment required to discharge their ethical obligation to participate compared with their liability in formal civil compensation amounts, especially since recent reforms to civil statutes of limitation have removed time limits and allow a claim to be commenced at any time.

Ten key aspects of the proposed Australian scheme are:

  1. People are eligible to apply to the scheme if they experienced sexual abuse in an institution while they were a child, before July 1, 2018.

  2. A lower evidentiary threshold applies, meaning that eligibility for a redress payment is assessed on whether there was “a reasonable likelihood” the person suffered institutional sexual abuse as a child.

  3. Applicants who have received redress under another scheme or compensation through a settlement or court judgment are still eligible, but prior payments by the institution will be deducted from the amount of redress.

  4. Only one application per person can be made; where a person was abused in more than one institution, provisions enable the decision-maker to determine the appropriate share of each institution.

  5. Applicants can access legal assistance to help determine whether to accept the offer of redress.

  6. A person who accepts an offer of redress must sign a deed of release, meaning the institution(s) responsible for the abuse will not be subject to other civil liability.

  7. Payments are not subject to income tax.

  8. Reviews of decisions are limited to internal review, and not to merits review or judicial review.

  9. Criminal liability of offenders is not affected.

  10. The scheme is intended to open on July 1, 2018, and operate for ten years; applications need to be made at least 12 months before the closing date of June 30, 2028.


Read more: When it comes to redress for child sexual abuse, all victims should be equal


Five further factors need to be accommodated by the scheme to ensure it functions properly and complies with the clear recommendations of the royal commission.

  1. The upper cap should be $200,000 to ensure sufficient recognition of severe cases.

  2. To ensure equal access to the scheme, legal assistance must be made available to assist people in making applications.

  3. Governments and institutions should opt in as soon as possible and commit resources to discharge their duty to participate in the scheme.

  4. Governments – federal or state – should be the funder of last resort in all cases where the institution is unable to reimburse the Commonwealth (for example, where the institution no longer exists, or lacks resources to participate).

  5. The method of determining the amount of the payment, based on the severity of the abuse, its impact, and other relevant factors, must be made available as soon as possible so it can be adequately debated.

The commission’s work contributes a historic, international legacy. The sexual abuse of children in institutions will be revealed in more nations in coming years. This will involve some of the same religious institutions in which it has been found here to be so prevalent, and so heinously concealed and facilitated. Simply due to population, countless children will be shown to be affected.

The ConversationFor this reason, our governments and institutions must now ensure their actions add to the royal commission’s example, and demonstrate to other countries how civilised societies should respond.

Ben Mathews, Professor, School of Law, Queensland University of Technology

This article was originally published on The Conversation. Read the original article.

‘Finkel’s new energy report’ isn’t new and it isn’t by Finkel


David Blowers, Grattan Institute

The headline almost writes itself: “Finkel backs Labor’s renewables policy”. A report released yesterday, The role of energy storage in Australia’s future energy supply mix, has found that Australia can reach 50% renewables by 2030 with limited impact on reliability.

It has, inevitably, lead to claims that Labor’s target of 50% renewables by 2030 is both achievable and correct. But focusing on the politics would be missing the point.


Read more: Shorten goes on front foot over 50% renewables ‘target’


It should first be noted that, despite the many headlines citing his involvement, Australia’s Chief Scientist Alan Finkel did not actually write the report. The report is by the Australian Council of Learned Academies (ACOLA), an independent, not-for-profit organisation that brings together Australian academics to provide evidence-based solutions to national and global policy problems. Yes, funding was provided by the Office of the Chief Scientist, and yes, Finkel himself has been supportive of the report, but describing it as a “new Finkel report” is stretching things a little.

The report explores how much energy storage – whether in batteries, pumped hydro or solar thermal – we will need as we increasingly rely on renewable, and therefore intermittent, electricity generation. As more renewable generation enters the system, there needs to be alternative sources of generation, such as storage, that can meet demand when the sun isn’t shining or the wind isn’t blowing.


Read more: Want energy storage? Here are 22,000 sites for pumped hydro across Australia


The ACOLA report finds that only a small amount of storage would be required to balance a system with 50% renewables. Cue the political debate about the quality of the electricity market modelling that ACOLA relied on to make this finding.

There is far too much focus on electricity market modelling in Australia these days – particularly regarding renewable energy. Finkel’s policies are distrusted and dismissed by people on one side of the debate because they believe his modelling shows too high a level of renewables. And the Coalition’s National Energy Guarantee (NEG) is distrusted and dismissed by people on the other side of the debate because they say it shows too low a level of renewables.

This debate rages on even though no modelling has been revealed; the federal government has promised to unveil the modelling behind the NEG at a meeting of the COAG Energy Council this Friday.

The truth is, modelling is an inexact science. The outcomes depend on the assumptions you use and the data you shove in. This is why the results for Finkel and the NEG will differ so much, despite them using the same emissions reduction targets and using emissions reduction mechanisms that impact the market in very similar ways.


Read more: Politics podcast: Energy Security Board chair Kerry Schott on a national energy plan


As it happens, I have limited confidence that you need only a little storage with 50% renewables but a lot of storage at 75% renewables, as ACOLA’s report claims. But the specifics are not important. What is important is that Australia will need something to balance intermittent renewables – and at some point, we will need quite a lot of balancing.

The most important aspect of the ACOLA report is that it brings into focus an unavoidable fact: Australia has serious problems with its electricity system. System security – making sure that the system doesn’t break – is an immediate concern. Reliability – ensuring the system has enough power to meet demand – is a growing problem. And energy storage is a potential solution to both.

ACOLA is not the first to point this out. Finkel’s blueprint for the National Electricity Market, released in June, identified these concerns. The Australian Energy Market Operator in September identified the need for a new mechanism to address medium-term reliability issues in the market.

Without the right policy settings to address reliability and security concerns, storage will have no chance of helping to fix our energy mess, regardless of the quality of ALOCA’s modelling.

The ConversationOur politicians need to focus on the substance of this debate, rather than the headlines. Hitting each other over the head because there are too many – or too few – renewables in the policy basket is pointless and will ultimately prove self-defeating. Instead, how about finding an actual policy solution? Starting at this Friday’s COAG Energy Council meeting. Please?

David Blowers, Energy Fellow, Grattan Institute

This article was originally published on The Conversation. Read the original article.

Morrison finds his productivity report is useful for Labor too


File 20171024 30605 xcc2x1.jpg?ixlib=rb 1.1
Treasurer Scott Morrison on Tuesday said reform was harder now than in the 1990s.
Lukas Coch/AAP

Michelle Grattan, University of Canberra

Just as the government hopes it is making progress on the energy conundrum, it finds itself struggling on another front of deep public disgruntlement – the NBN.

The rollout of what’s generally considered a second rate model is producing a high level of complaints. Monday’s ABC Four Corners program showed how customers in Australia are getting an inferior service compared with New Zealanders.

The government predictably is blaming Labor, though much of the trouble stems from scaling back to a cheaper version than the one it inherited. Malcolm Turnbull, who oversaw the NBN as communications minister, argues it’s obvious that as more houses are connected, the number of complaints rises. That logic only goes so far.

Faults with household and business internet services are sensitive consumer issues. The blame game only increases people’s irritation. It’s been the same for months with electricity, as the government lambasted Labor while trying to get together its own energy policy, which it released last week.

Essential polling released on Tuesday indicates that at this early stage people are not hostile to that policy, but many are confused.

More than a third (35%) approved the proposed National Energy Guarantee, with only 18% opposed. But the “don’t know” category is 47%.

People divided fairly evenly when asked whether they approve the government’s decision not to include a Clean Energy Target in the new plan – 35% approved, 32% disapproved, and 33% were “don’t knows”.

But many people retain their strong attachment to renewables. Asked whether they approved the government decision to phase out subsidies for these, 41% disapproved, 32% approved.

This result shows that in political terms, it could be sensible for Labor to accept the basic structure of the government’s scheme – and promise to improve on it. At Tuesday’s Coalition party room, Turnbull predicted Labor would propose a higher level of renewables within the Coalition’s policy framework.

If so, that would provide a measure of bipartisanship, which would at least encourage investment.

As the government and opposition argue over the claim the new policy could bring down prices by a small amount – a proposition to be tested by the modelling the government commissioned last week – the Essential polling showed the public are healthily sceptical. Only 16% think it will; 31% believe it will increase prices.

The grim reality faced by the government is that it is hard to get any messages through the high level of public distrust, and this is exacerbated when the messages chop and change.

It’s not just in the energy area where this has happened. Since the Coalition won office in 2013 it has had to alter course on many policies and much of its initial ambition.

The early attempts of the Abbott government at swingeing changes quickly collided with the realities of an angry public and a truculent Senate.

Releasing a report on Tuesday from the Productivity Commission (PC) on Australia’s productivity performance, Treasurer Scott Morrison said reform was harder now than in the 1990s, when there was “a lot of low hanging fruit” and “the burning platform” of recession “focused the debate and compelled greater bipartisanship”.

These days, he said “reform comes more stubbornly and incrementally”.

“We also need to understand that many Australians are now far more sceptical of change. Whenever governments mention the word ‘reform’ or ‘productivity’, they get nervous. They’ve seen this movie before.

“Unlike last time when economic reform was a mystery to most, this time around Australians are more alive to the costs of change as well as the benefits.

“Plus, the economic and political bandwidth available for change is narrower than it once was, made more difficult by the binary way change is viewed and exploited. Who are the winners and who are the losers? Where is the conflict?” Morrison said.

While his argument is right, other factors were also important to achieving reform in the 1980s and early 1990s under the Hawke-Keating government. Some of the change involved trade offs, under the accord with the trade union movement. And reform was better sold by the political leadership than today.

The PC report promotes a reform agenda focused on individuals, “involving the non-market economy (mainly education and healthcare), the innovation system, using data, creating well-functioning cities, and re-building confidence in institutions”.

The recommendations are a mixed bag of old and new, the sensible and – as happens with the PC – the near impossible, either politically or practically (such as automatic dispensing of medicines).

The report’s language is redolent of that used by Labor, notably when it says that “a key issue will be to ensure that future economic, social and environmental policies sustain inclusive growth — by no means guaranteed given current policy settings, and prospective technological and labour market pressures.

“Productivity growth provides a capacity for higher incomes and poverty alleviation — either directly through higher wages or indirectly by increasing the capacity for funding transfers to lower-income households.

“The motivation for limiting inequality extends beyond its intrinsic value to the desirability of avoiding too great a dispersion in incomes, given evidence that this can, in its own right, adversely affect productivity growth. Public support is also more likely for reforms that offer benefits to the bulk of people.”

Shadow treasurer Chris Bowen said: “The Productivity Commission has pointed out that investment in our human capital is the key to economic growth. Well we agree, we agree strongly.”

Morrison is alert to this possible political crossover.

“I haven’t got up here today to talk about a new inclusion agenda”, he told a CEDA function. “I’m talking about a productivity agenda”.

“From a Liberal-National perspective, we’re coming at this quite differently from our political opponents. This isn’t about social justice. This is about more and better paid jobs, because I think that’s the best justice for anyone. … This is about lifting living standards.

“I’m not trying to settle scores in health and education as some sort of social justice wars. I’m just trying to lift people’s wages.

“This is not the product of ideology, it’s the product of economics and the economics say pretty clearly that people [who] are healthier and better equipped through the education system are going to do better.”

The ConversationSharing ground with Labor can be uncomfortable.

https://www.podbean.com/media/player/k27zv-7889f2?from=site&skin=1&share=1&fonts=Helvetica&auto=0&download=0

Michelle Grattan, Professorial Fellow, University of Canberra

This article was originally published on The Conversation. Read the original article.