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"We want the car industry to continue. I've said all along if you are a first-world economy you should be capable of making cars. Second point: under the Coalition there will be generous assistance available for the motor industry." - Tony Abbott, July 11 2013.

The 'perfect storm' of the high Australian dollar, high costs and low volumes was used as the official reason for General Motors discontinuing domestic production of the Holden beyond 2017. But the real reason was the policy uncertainty displayed by the Abbott government.

Indeed, policy certainty and policy continuity would have ensured that General Motors retained Holden in this country beyond 2017.

Just think for a moment about the messages the company was receiving from the new Australian government. First, a cut of half a billion dollars in industry assistance. Then a Productivity Commission review that was well outside the timetable of December this year, set (and well understood) by General Motors. And finally, to rub salt into the wounds, a deliberate leak by selected federal cabinet ministers to the ABC questioning General Motors' real commitment to Australia. Federal Treasurer Joe Hockey's comments in Parliament on Tuesday only served to confirm these anonymous and authorised leaks.

These matters were seriously analysed in Detroit and understandably taken into account in assessing the Australian government's likely policy. And GM's assessment was that if the Australian government wasn't committed why should it bother, given those additional 'perfect storm' issues. What a tragedy.

That is not to say that federal Industry Minister Ian Macfarlane didn't try. Indeed, he understands the export and global supply chain issues well and was no doubt arguing his case to Prime Minister Tony Abbott and other cabinet ministers. Ian Macfarlane must have felt severely let down and undermined over the past week.

There is no replacement for the Prime Minister (and the premiers) taking up these issues directly - meeting with General Motors executives, understanding their need for long-term policy certainty, and then driving any outcomes through cabinet.

None of that happened with Prime Minister Abbott. He appeared like a passive bystander left only to offer commentary through scripted lines.

(Steve Bracks is a former Premier of Victoria).
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Australian Herald

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New South Wales is one of many Australian states upset by the proposed re-jigging of the Gonski schools reforms by the Tony Abbott-led Federal government. This story today from The Conversation: David Gonski and members of his panel on school funding, who included Kathryn Greiner and Carmen Lawrence, have every reason to feel appalled at the way their work has been treated and trashed by both sides of politics.

Labor completely mishandled the issue. Shortage of money might reasonably explain that the Gillard government couldn’t fully take up the model. But nothing justified its delay in dealing with the report, which meant that it didn’t give itself a fighting chance of winning broad agreement before the election.

Now we have the duplicity of the new government.

The Coalition never much liked the Gonski plan (although then education spokesman Christopher Pyne sometimes had a good word to say about the loadings). It initially flagged it would not implement it unless there was national (or “overwhelming”) agreement to it from states and territories.

But on the eve of the formal election campaign, Abbott dramatically put himself on a “unity ticket” with Labor, promising to match the ALP’s funding for the first four years of the six-year program (while reducing some of what the Coalition dubbed the prescriptive “command-and-control” conditions Labor was imposing on the funding).

Abbott declared on August 2: “We will honour the agreements that Labor has entered into. We will match the offers that Labor has made.”

Now the Coalition has walked away from that promise. It has used the dual rationale that the forward estimates in the Pre-election Economic and Fiscal Outlook (PEFO) did not contain funding for those jurisdictions that hadn’t signed up, and that the whole thing is a shambles.

Well yes, it is a shambles, but the Coalition was fully aware of that before the election.

And it also knew that $1.2 billion had been removed from the forward estimates for the non-signatory states. The Coalition’s current claim that it thought the money was parked somewhere else and would subsequently materialise is laughable.

Education Minister Pyne was asked on ABC Lateline this week when he found out about the $1.2 billion’s removal. “Well, I read it in PEFO but I was surprised and believed that post the election we could make sure that money was put back.”

The interviewer noted that Joe Hockey had talked about the $1.2 billion on Lateline and it had been in the media and yet the Coalition continued to say it would put $2.8 billion into the reforms. Pyne said: “I always hoped that the $2.8 billion would be there post the election. After my briefing with Treasury, with Finance, with the Department of Education, it became quite apparent that Bill Shorten hadn’t just taken the money out in PEFO, they’d banked it as a saving.”

Pyne now is providing in 2014 the funds already budgeted for the jurisdictions with agreements, and has produced $230 million for the non-signatories - Queensland, Western Australia and the Northern Territory.

Next year he will release a blueprint for 2015 and subsequent years, that he says will be national, fair and needs-based. First he suggested the Howard government’s SES model “is a good starting point for a school funding model”, but then he said “that will not be the basis of a new funding model because we’ve moved beyond that”. The government says the pledge to match Labor’s “funding envelope” over the forward estimates will be kept – the smaller “envelope”, that is.

Whatever way you look at it, the Coalition has broken its “unity ticket” undertaking. It has been tricky and misleading.

It has returned to an interim position that it had before the “unity ticket” – which was to implement Labor’s program for the 2014 year (because there is no time to do anything else) and then rework the model.

Abbott said in late July: “We will continue to work constructively with the states to come up with arrangements which genuinely do improve our schools and which are affordable for the long term, but arrangements that have been put in place for the start of next year are not going to be disturbed by the Coalition”.

We don’t know whether the Coalition decided on its ploy - of using the convenient funding hole as an escape hatch - during the election campaign or after winning.

We do know that, especially after the high flown rhetoric about honesty and “no surprises”, it is low-rent politics. Such behaviour can leave a sour taste in the mouth of an already cynical electorate, especially when the Coalition had banged on so much about “trust”.

It would have been better, and more honest, for Abbott to have stuck by his late July position for the campaign. But the Coalition, concerned about the Rudd comeback, wanted to neutralise education, one area where Labor might have the potential for traction. Hence the backflip to the unity ticket.

The government is making things worse by its reliance on the technicalities. “Tasmania didn’t sign up, the Catholics didn’t sign up,” Pyne said yesterday. There’s dispute about what “sign up” meant, but anyway, the detail could have been found out during the campaign.

For Pyne to be talking about the “revelations about the Shorten shambles” is just insulting the voters, given his prior knowledge.

Pyne’s refusal to say where the $230 million for the non-signatory states is coming from is also trying to be too clever. He says that information will be revealed in the mid-year budget update, released after Parliament rises. It’s a fair bet that Peter will be robbed to pay Paul.

Abbott has said that ministers have to be careful of “tone”. We have already seen Immigration Minister Scott Morrison having to adjust an unfortunate “tone”. Pyne is showing signs of bad “tone”.

It’s not just Labor that is jumping on the Coalition’s shift. The government promising more co-operative federalism has found itself in an immediate federal-state stoush.

The conservatives states of NSW and Victoria have been appalled at the turn of events. NSW premier Barry O'Farrell declaredthis week: “Can I just make this point to the federal Education Minister … When you move into government you have got to stop behaving like an opposition”.

Those with deals have two beefs. One is that they went into agreements for six years (with the big dollars at the end), and the Abbott government will only talk about four. In theory there’s an argument over whether a previous government’s agreements should be honoured, but the states can’t say they weren’t warned.

Their other complaint is the uncertainty about what will happen for three of the next four years – and on that they have been ambushed.

Pyne meets his state counterparts Friday. “I think I will get a very warm reception,” he said yesterday. The day will tell which variety of “warmth” he receives.

In education policy, the Abbott government will be judged on whether the blueprint Pyne produces next year is superior to the Gillard one.

On the issue of political trust, a judgement can already be made, and a black mark awarded.

Pyne was asked Thursday about Shorten’s accusation that the Coalition had lied over schools funding. “Well, I would say that people in glass houses shouldn’t throw stones,” he said. There spoke a man ensconced in a glass house.

(Michelle Grattan AO - The Conversation).
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Have them in circles
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Australian Herald

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Chinese hackers are reported to have stolen plans for a new $600m Australian spy headquarters as part of a growing wave of cyberattacks against business and military targets of the US ally.
The hackers also stole confidential information from the Department of Foreign Affairs and Trade, which houses the overseas spy agency the Australian Secret Intelligence Service, Australia's ABC Television said. Prime Minister Julia Gillard has described the TV report as "inaccurate" . The Australian Broadcasting Corporation's investigative program Four Corners reported that hackers, thought to be from China, had breached government agencies including the prime minister's office and cabinet, as well as the departments of foreign affairs and defence. The report alleged that a cyberattack from a server in China stole the blueprints to the new headquarters of the ASIO, Australia's top intelligence organization, including details on the building's security and communications systems, its floor plan and the locations of its servers. But Gillard sought to play down the TV program's claims.
"There were a number of unsubstantiated allegations of hacking in the Four Corners report as the attorney general has stated," she said, according to CNN affiliate Network Seven.
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Australian Herald is a national online news service covering Australia and its major cities.
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Australian Herald has been serving Australia since 2002. Providing late breaking news from across the country, with individual coverage of major cities such as Sydney, Melbourne, Brisbane, Perth, Adelaide, and the capital, Canberra,