Friday, March 2, 2012

Humpty Dumpty fell – do something about it or stop whining and get over it!

Yesterday’s piece on the growing circle of frustration between the WA Premier and his Liberal colleagues (Cantankerous Col Pot and his nervous nannies) drew a fair bit of support from unlikely people and places.

I guess it was a bit inevitable that Labor MP’s would use it to assert that our Premier is a kind-of Liberal version of their side’s inflexible and grumpy former dictat… umm, Leader, KRudd. Similarly, it’s not all that surprising that some of the underpaid journo’s who sit through hours and hours of tedious Parliamentary tit-for-tat and punctuation-free narcissistic ramblings expressed their gratitude for the fact that someone publicly acknowledged their place in democracy without spitting or cursing. (Yes, I see the irony in that long sentence!)

I also wasn’t too shocked to hear from a number of current and former government staff who have been burnt or hung out to dry for standing up to the sycophants I mentioned. What I really didn’t expect were the phone calls and messages of support from Liberal Members, land developers and senior industry leaders. The sentiment of those communications ranged from a simple “thank you” to detailed anecdotes about their particular frustrations.

It seems plenty of people are talking, but many of those in direct contact with the Premier and his team are feeling like there is a real reluctance, or perhaps even fear, to act. One CEO told me he thought the Government was “paralysed by risk aversion”. I think the Premier would say he has taken many risks and I agree - the commitments to build a stadium and redevelop the Perth waterfront are big risks. And given what I heard yesterday, perhaps he has actually under-estimated just how risky it is to create the perception that those big-ticket items will be built at the expense of other things that industry actually wants?

However, I do have some sympathy for the Premier. I’ve recently learnt what he has probably known for many years: it really is impossible to please all of the people all of the time. He must feel very disappointed that his dream of being the next Sir Charles Court – remembered fondly as the guy who made bold decisions to prepare WA for “periods of sustained growth” - is just not that easy when you have to appease the Nationals and other colleagues who would like to spend some money in their electorates to help them get re-elected in 12 months.

But if I’m being truly objective, I can’t be too generous to the man.

The whole truth is that Mr Barnett has a rather bizarre habit of arbitrarily making rods and strapping them to his own back – and this is a major source of frustration among his Cabinet colleagues. I’m no economist and I respect that he certainly is, but his decision to make it a “government objective to retain debt below $20 billion” has been both a broken promise and a heavy noose around his own neck. He has talked up the need to maintain the State’s credit rating so much that Mum and Dad think the sky will fall in if we jeopardise one of Standard and Poor’s “A’s”.

Again, being only halfway through my MBA, I don’t claim to be an expert but other highly respected commentators have outright said the State can cope with a significantly higher debt level than $20b. They say for the sake of building infrastructure to meet the short to medium term needs of industry, the government should release the brakes and spend some of tomorrow’s money now.

But if Mr Barnett has already over-played the debt card and can't increase the limit without looking like, well, Julia Gillard, what other choice do he and his nervous nannies have?

Well, if it was a truly conservative government – that is, true to its roots - it would have absolutely no trouble privatising one of its businesses and in doing so, cut the Premier free from the noose of his own words. I’m sure this would be music to the ears of both voters who are longing for the return of a properly conservative party. I also reckon it might help the myriad of so-called Liberal backbenchers who find themselves having an identity crisis talking up an $800m gift to the social services sector while slowly admitting to their electorate that they have no ability to get $50,000 to help local small businesses.

But the real question remains - is their bold, visionary leader too risk averse to contemplate this? You bet.

As Chief of Staff to the Energy Minister, I agreed to help my guy in the Premier’s office by letting him call it “The P word” whenever we discussed the pros and cons of privatising one of the Government’s most commercially successful businesses – Western Power. From Dumas House in West Perth where the Premier put the Nationals and other Ministers he didn’t want to bump into while riding the lift, it seemed that privatisation was just too unpopular for the jellybacks on the 24th floor of the Premier’s St George’s Terrace office to say out loud.

It has already been reported that Western Power is currently seeking approval to spend nearly $10 billion over the next 5 years. While the ERA will undoubtedly recommend a reduction to that figure, most of whatever is spent will add to State debt. The Premier and his nervous nannies might do what they did last time and chop it up into bite-sized chunks to make the debt figures look a bit better. This will help him by keeping the debt lower before the next election but in the long run, probably cost tax-payers more due to the inefficiencies caused by Western Power not being able to lock in long-term resourcing and infrastructure plans.

Sheesh, no wonder the CEO and Chairman have walked away…

Anyway, it’s a widely held belief that there would be very strong interest in the shares of a company with such an enormous existing asset-base and strong market dominance, operated in the tightly controlled regulatory environment in which a monopoly supplier of energy to the State would have to operate. But has there been any formal work done to test the viability of this win-win proposition? Nope. The reason is primarily because the Premier thinks the public doesn’t like privatisation and no-one has the balls to argue the case for a strong decision that at the end of the day, would relieve the government of its silly debt noose and return the Liberal Party its traditional place on the political spectrum - right of centre.

Meanwhile, the Premier still regularly talks to the media (not the energy Minister) about the need to put some of the energy utilities back together. But in true contemplative Colin fashion, rather than doing something about it, he chooses to sit on his hands while they get all pins-and-needly under the weight of his own frustrating inertia.

Premier, you are the Leader. Find some people strong enough to tell you the truth to your face, have a little think about their advice, then make a decision and lead, please. All the Kings Horses and all the Kings Men are waiting…

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