Musings for Barnaby – dancing with wolves can get you eaten

It shouldn’t really be any great surprise that the National Party is willing to support the sale of Telstra, despite the widespread opposition of people living in rural areas (and the rest of the country too). After all, every National Party Senator has voted to sell part or all of Telstra a total of 5 separate times since 1996. The only question mark was whether new Senators Barnaby Joyce and Fiona Nash might have been different from all the other National Party Senators. There’s some extra money this time to sweeten the pill, but it looks like the vote will be the same once again (although Matt Price suggests it’s not a sure thing yet, as does this piece in the Sydney Morning Herald).

As a reminder:

  1. on the 11th December, 1996, all National Party Senators voted in favour of selling one third of Telstra, enabling the Telstra (Dilution of Public Ownership) Bill 1996 to pass the Senate by 34-32 with the support of Brian Harradine and Labor renegade Mal Colston.
  2. on the 11th July 1998, (on a Saturday night at 8.19pm), all National Party Senators voted in favour of selling the next 16% of Telstra. However the final vote on the Telstra (Transition to Full Private Ownership) Bill 1998 was tied at 33-33, thus negating the Bill, when Mal Colston voted against.
  3. on the 21st June 1999, all National Party Senators again voted in favour of selling the next 16% of Telstra, enabling the Telstra (Transition to Full Private Ownership) Bill 1998 to pass the Senate by 37-35 with the support of Brian Harradine and Mal Coslton.
  4. on the 30th October 2003, all National Party Senators voted in favour of selling all of Telstra, although the Telstra (Transition to Full Private Ownership) Bill 2003 was defeated by 34-26.
  5. on the 30th March 2004, all National Party Senators again voted in favour of selling all of Telstra, although the Telstra (Transition to Full Private Ownership) Bill 2003 [No. 2] was defeated by 35-30, thus creating a trigger for a double dissolution election to be called.

I noticed a quote from Barnaby Joyce in this piece by Matt Price which gives some sign that he’s aware of the nature of those he’s dealing with.

“I don’t know what the people think but I think we’ve screwed something out of them (the Libs) we were never going to get,” he admitted in idle pre-interview chatter. “(But) we’ve got to see the paperwork, the Libs are great at doing stuff and when it’s time to see the paperwork it’s completely different.”

Senator Joyce seems to have learnt Step 1 in how the Howard Government makes ‘agreements’. I hate to disillusion him, but there’s many more steps to go. I can tell him from bitter experience that when it comes to breaching agreements, there’s a lot more left in the Government’s armoury.

Step 2 is, even if you get the paperwork to really reflect your agreement, they just try to ignore the bits they don’t like. Step 3 is where they start cutting money out of existing expenditure until it equals the amount of extra money they promised they would spend. Step 4 is to spend that ‘new’ money on something completely different from what was promised (see Step 2). Step 5 is to refuse to administer the laws and regulatory protections that were put in place as part of enabling the original agreement. Step 6 is to tie you up trying to address Steps 2-5 while they gradually change and remove the legislative and regulatory protections that were put in place as part of enabling the initial agreement. Step 7 is where all the relevant Ministers have changed to other portfolios and the new Ministers say they are not bound by old arrangements. If you haven’t given up by this time, then Step 8 is to insist that the use of the word “will” can actually be interpreted as “will not” in certain circumstances, or that the paperwork reflects views that have now been superseded by the intervening election. Eventually, if they get tired of being hassled about it, they’ll just say there never was any paperwork and you must be getting it confused with something else.

I’ve seen independent Peter Andren and Barnaby himself say that Telstra could be the National Party’s GST – which I presume means a big chunk of their constituency could see this as betraying them on a core issue. I don’t know if that will be the case, but given that Barnaby himself has said it, (indeed he used the GST analogy to me when I met him for the first time out at Birdsville) I’m a bit surprised he looks likely to give in so quickly and cheaply. I guess Barnaby has gained more than the other National Senators Boswell, MacDonald and McGauran sitting around him who have just rolled over and put their hands up 5 times in a row without getting anything in return apart from a few nice words.

I support efforts to try to negotiate constructive compromises if it is possible to get an overall result which will clearly move things forward, but if what is under discussion involves compromising a fundamental principle, then it’s best to just forget it. Unless you can get a major fundamental advance on a key issue, you’re just getting bought off with what in the long-term will turn out to be beads and trinkets.

Barnaby had his own analogy for this when he said that the problem with selling Telstra was that it was akin to a man with a shotgun who keeps threatening to kill your dog.

“Then one day the bloke turns up with a shotgun and kills your dog. And then you know you’ve got a big problem, a dead dog and a bloke with a shotgun. That’ll be Telstra for us. The day we sell it off, the problem will be huge.”

I must say I’m not sure I fully understand what this is meant to mean, but I know it’s not good.

Of course, negotiating with Government can involve the prospect of agreeing to something which may intrinsically not be very good, but still better than what would occur if things stayed unchanged. This was basically the situation the Democrats were in when I was negotiating with the Government about improvements to their Medicare package in 2003-04. I can’t see how this applies to the situation with Telstra, as Barnaby is in the position of stopping it being sold altogether.

I’ve been close to or directly involved in negotiations with Government a number of times over the years, and I can assure Barnaby that if the Government is under strong political pressure to resolve an issue, then you have a lot more time that you think to make a decision. The media attention and frenzy that can develop around negotiations does create an atmosphere where you feel you have to decide quickly, but it’s just one of those illusions that can befall you when you’re in the cocoon of Parliament House. If you set your bottom line in your own mind first (which should at a minimum match your honest assessment of what would constitute a definite advance on the status quo/no deal option) and the other side won’t come up to it, then it’s not really that hard to walk away. If it’s that important to them, they’ll come back to you.

A few days of the media calling you dithering is nothing compared to a few years of your supporters calling you stupid or a sell-out (not to mention the opportunity cost and the permanent consequences for those people negatively affected by what you agree to). Of course, the problem for Barnaby is that, for all his talk about representing the Qld Nationals and not the Coalition, he is in the end part of the Government. That means his ability to really just say No is a lot less than he suggests. This is why having an independent Senate, not controlled by any party, is so much better. If the Government knows you really are capable of saying No, you’re in a much better position to negotiate and make a balanced impartial judgement about what is best for the public (as long as they also know you are capable of saying Yes as well).

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9 Comments

  1. Correct me if I’m wrong, but doesn’t Sen Joyce have the same ability to say “no” as every other Senator? Surely he’s there because he was elected, regardless of his party. Yes, there are consequences – he could be expelled from the party. But he’ll have done something for which a lot of Australians will be proud of him. He’ll have a name Australians recognise. He’ll have a decent chance for re-election even without a party ticket and even if he doesn’t, if he can do this within two months of being sworn in, imagine all the imact he could have in six years.
    What I think isn’t emphasised NEARLY enough is that the government is about governing, not politics. Parties are NOT the be-all-end-all of everything, they are a collection of people who share views and have a big, consistant (except for Labour – joke!) organisation to represent those so they can say “I’m a Democrat” rather than explaining their views on everything. Doesn’t mean they can’t say “I’m a Democrat except for when I’m a monarchist” (for example). Government over politics – my slogan for the next decade.

  2. I think Barnaby Joyce has shown that he is easily heavied by intimidating Liberal politicians and has demonstrated that he can’t say “no” and he won’t stick to his promise. Senator Joyce promised at the last election that he would not support any sale of Telstra. He weakened his position and said that it would require $7bn to get services to the bush up to scratch and unless he got that commitment from the Govt he wouldn’t support the sale. He then weakened further and supported Telstra CEO Sol Trujillo’s position of $5bn for upgrade of bush services. Then recently he has been dithering on whether to support the Nationals proposed $3bn fund for bush services.
    I don’t think Senator Joyce has any idea what he is doing and he is most definitely incapable of saying “no”.
    I am predicting that he will give in to pressure from the coalition. He has already used the excuse that if he says no, the Government will deal with Family First’s Senator Fielding and the bill could pass.
    If Barnaby Joyce caves in, it will be RIP The Nationals at the next election. I think they could be punished much more severely than the Democrats were at the last election.

  3. Australia does not have a high enough number of customers per wire-mile to keep a privatised Telstra profitable. This is Trujillo’s complaint- and he’s correct. As long as Telstra is required by law to provide services to low population density areas, it will not turn a profit- unless subsidised by government.
    Where will subsidy monies come from if Telstra is sold? That’s right, out of general revenue. Right now, Telstra carries its own weight. If sold, government will have new expenses and will not have a cash-cow to fund them.
    Moreover, Telstra have underinvested in their infrastructure since before the advent of fibre-optics. Telstra are already cheating bush subscribers by using ‘pair gain’ to fudge upward the theoretical capacity of existing copper lines instead of installing new cabling. In many cases, Telstra only installed a single copper line to residences, leaving no capacity for adding additional lines to those residences without either running new copper cable or using pair gain, the latter not being suitable for data connections.
    Australia needs a fibre-optic network to support broadband data & simultaneous voice services to all residences, not just those out bush. Richard Alston is primarily responsible for the failure to install that fibre network- remember, he was the one who said broadband would only be used by computer gamers…
    In truth, broadband is essential for rural and remote subscribers, even now. Broadband to the bush will also help Australia diffuse population numbers from the capital cities. Why have a call centre in Mumbai when you can have one in Dubbo? It’ll take the ‘big pipes’ for data & voice to make these sorts of new opportunties possible.
    We need to stop relying on being the ‘lucky country’ and try that ‘knowledge nation’ idea once again.

  4. Well said weezil (and as an aside, I think I’ve come across you before – do you know Dr Sexenheimer by any chance? Perhaps I’ve come across you through FDB?)
    I think a rollout of fibre nation-wide would be great. I’m on HiBis-subsidised two-way satellite here (and I commute daily to Hobart for uni) but it’s still not brilliant. High latency is always an issue with satellite.
    The problem we have with fibre rollout is that it will cost a lot. Order of tens of billions. And there’s just not that much care for broadband by the government – not to mention the easy accessibility of 1mbit connections in high population density areas removing the need. Yes, eventually all the existing infrastucture will need to be upgraded to fibre but right now the push just isn’t big enough.

  5. Max I dont know if thats the case. He may have been pressured, or he may think this actually is the best deal hes going to be able to squeeze. Without him, the Nats would have already rolled and there would be no deal, any money so far is a result of him playing hardball and threatening to cross the floor.
    The sale is going to happen eventually, and he seems to be worried that when it does, the bush will get nothing. I wouldnt put it past the ALP to sell it either, after what they did with the banks.
    Pretty much every dollar Barnaby squeezes out of the government is a victory, but hes probably not squeezing hard enough.

  6. I do admit that Joyce has done a good job at getting the concessions he has already got, but I am of the belief that Telstra should be split up and the infrastructure and network component remain in Government control. If you spin off the retail arm and have the Government in charge of infrastructure, it will mean that all Australians can keep the Government to account on providing services and there is the possibility of better competition in the retail sector because then Telstra would not have a monopoly on the network services, the Governmnent would. If the infrastucture component is privatised then the only shareholders will be holding network management to account. Shareholders always demand bigger profits and reduced costs and as others have said, a privatised Telstra cannot economically expand services without Government subsidy.

  7. Andrew I like what you have written on this issuw. BJ was always going to sell out when he got to Canberra. But please clarify, isn’t your own collegue Senator Murray wanting to sell Telstra anyway?

  8. andrew m
    A full outline of Senator Murray’s views on Telstra can be found by reading his speech opposing the last Bill that attempted to sell the rest of Telstra back in 2003 (see http://www.andrewmurray.democrats.org.au/Media/Speech_Display.htm?speech_id=1271&display=1)
    If he was just “wanting to sell Telstra anyway” he would have voted for it then, rather than against it as he did then and every other time Bills have been debated which sell any of Telstra.
    Similarly, if he was just going support a sale now, the Govt would not have bothered with Barnaby. You don’t negotiate a spending package with someone if there is someone else who will do the same thing for nothing. That’s why Barnaby’s suggestion that he had to take this offer or someone else would have agreed to a sale for less is so absurd – either deliberately dishonest or extremely naive.
    Andrew Murray’s speech indicates the sorts of conditions which would need to be in place before he would even consider supporting a sale – which includes a majority of the funds i.e. well over $10 billion, being spent on the environment, plus substantial improvements in the regulatory regime to guarantee proper customer service and pricing throughout the country, and fair competition in the markets and areas where competition is viable.
    This is so far from where the Govt is at as to be barely worth discussing.

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