Reshuffle kerfuffle – Part 2: Troy Buswell

Other parts already published:

• Part 1: Timing

Other parts coming soon:

• Murray Cowper
• Michael Mischin
• Liza Harvey / Rob Johnson
• Staff fallout
• Cost to the State
• Other movements and their wider impact

I’ve said it before and I’ll say it again: Premier Barnett is a supreme thinker.

Take for example the way Troy Buswell found himself back in charge of the State’s purse strings last Thursday. From the outside, the Cabinet reshuffle the Premier announced last week looked messy, rushed even - and maybe it was -but the plan to give Mr Buswell the Treasury started a long time ago.

Given that Mr Barnett disclosed recently he had known Christian Porter was considering his move to the Federal sphere for “6 months or so”, this OpEd piece I wrote and never published in November 2011 shows the Premier was thinking of Troy way back then:

Something big shifted in Western Australian politics last week. Troy Buswell came back.

It was quietly reported that the Premier has asked Housing and Transport Minister Troy Buswell to re-join the EERC – the Economic and Expenditure Reform Committee. This group of senior Ministers meets regularly to scrutinise and evaluate proposals from their Ministerial colleagues. Basically, if someone wants to spend the State’s money, the responsible Minister has to make their case to the EERC.

And it’s not always a cordial affair. The meetings are often brutally open and frank in debate about the benefits of each proposal – economically and of higher priority to this group, politically. Ministers who don’t have the skills to sell their idea to their senior colleagues or bring forward a proposal that simply costs more than the EERC believes the State can afford, often leave empty handed.

Although the room also contains several advisers who play a significant part in the final decision, the meetings are typically chaired by the Treasurer who first asks the Minister to brief the meeting on the proposal. After the short introduction from the Minister or their Departmental Head, the Treasurer and his senior Cabinet colleagues ask clarifying questions. With the mix of personalities and intellect at the table ranging from cool, wise heads like Norman Moore, quiet contemplators such as John Day and ferociously barking attack dogs like Simon O’Brien and Brendan Grylls, chairing the meeting to deliver an outcome is no mean feat.

Which brings me to the big shift.

It is widely acknowledged that for a lawyer, Christian Porter is doing a great job of managing the State’s finances. Indeed, having sat through a number of fierce EERC meetings, Porter’s prosecutorial background equips him with an incredibly valuable skill for the Treasury portfolio – the ability to ask the right questions to quickly get to the crux of the issue.

So if the Treasurer is doing well, why would the Premier bring Buswell back to the EERC and risk it looking like a vote of no confidence in Christian Porter?

I propose two plausible reasons:

1. There will soon be a vacancy on EERC and the Premier is ensuring a hand-over

Given that the Premier confirmed Norman Moore expressed interest in the job of Agent General and then publicly defended the possibility of it happening, it is likely that the Premier is just ensuring EERC is fully staffed if Minister Moore departs in December.

The downside of this move is that Buswell’s presence on the EERC could cause tension between him and the real Treasurer – it’s always difficult to put aside anger and envy when you’re expected to work as part of a sled team that you used to lead.

2. December’s “minor” reshuffle will see more than just Troy Buswell back as Treasurer.

This makes sense on one level - Buswell is a standout in terms of intellect and political nous – exactly the kind of guy you would want defending the State’s economy in the lead up to the 2013 election. However, this is only sellable if Christian Porter is willing to say he isn’t enjoying being the Treasurer or moving on to something bigger and better. For those with ambition in politics, there’s only one job more coveted than that of Treasurer – you guessed it, the Premier.

As Premier, Colin Barnett is notorious for holding his cards very close to his chest so the public will know anything about his retirement plans until the day he enacts them. However, as unlikely as many say it is, it’s definitely plausible that he won’t be Premier at the next election.

Personally, the Premier turned 60 last year and after 21 years in the Parliament and 3 as Premier, he has a sizeable superannuation and good health that would allow him and his family to enjoy it. Professionally, he brought the Western Australian Liberal Party back from oblivion on the eve of the last election and has since stood strong and proud as the only Liberal Premier in more than his fair share of COAG meetings. Among an impressive list of his achievements in his 38 months as Premier, Colin Barnett brought the Queen to Perth, secured funding for the Stadium, started work on the foreshore redevelopment, sent more money to the bush than ever before and oversaw the beginning of construction of the Fiona Stanley Hospital.

Other than bringing water from the north, he has ticked a number of extraordinary boxes on any ordinary man’s bucket list – what else could he want in life? Perhaps a happy retirement on the porch of his Toodyay property reading about everyone dealing with what will be a difficult election in just over 12 month’s time.

Whatever the Premier’s rationale, the reinstatement of Troy Buswell to the EERC signals the beginning of a significant change to the Western Australian political landscape.

Watch this space.

(19/11/2011)

Colin Barnett hates the way the West Australian newspaper has given him the unofficial title of “Emperor” but the fact is he plots, plans and executes in a way that would have embarrassed many actual Emperors of the past.

Cost reflective, defective?

We keep hearing it: “cost of living increases will be the downfall of the current State Government.”

This really isn't news - the Opposition and numerous media outlets in Western Australia have been suggesting it for sometime. Indeed, the Premier himself even agreed with the premise this morning when he spoke with Geoff Hutchinson on 720 ABC Perth radio.

But if this proposition has merit and everyone including the Premier knows it, why doesn’t the government just stop increasing the price of water and energy?

The solution isn’t quite that easy - unless we had a Labor government that is.

In fact, one of the truths in Premier Barnett’s explanation of why his government has savagely raised water and electricity tariffs over the past 3 years is because the previous government did what only a Labor Government can - subsidised utility charges.

As a former Chief of Staff to both a Water and an Energy Minister in this government, I’m only too aware that this is a genuine problem for Mr Barnett and his (small L) liberal colleagues. The previous Labor government’s decision to repeatedly freeze tariffs and let the gap between the true cost of supplying our utilities and what we all pay for them increase was political genius. Regardless of whether it was done strategically or not, this move was destined to become a mighty large thorn in the side of any conservative government that followed them – and it has.

The key to this quandary is that any Labor government is acting well within the realm of its core ideology to take money from one part of the budget and use it to subsidise utility charges - or education, health, police - whatever. That's exactly what die-hard Labor voters want their governments to do.

In contrast, a pure liberalist view is that each element of the budget should be cost neutral. In a perfect liberal world, school fees would fund teacher's salaries, police would carry a mobile eftpos machine to charge anyone they help, people would pay the full cost of any health services they might use and yep, you guessed it – we would all pay the true cost of every drop of water and watt of power we use. In short, blue-blooded liberals believe in a “user-pays” system.

But the problem is that neither theory works in its pure form. To the average voter, too much government cross-subsidisation smells a bit too much like communism and on the other extreme, the public would simply refuse to pay $25 for a bus ticket to work just to ensure the public transport service breaks even.

So over time, both sides of the political divide have compromised their core values a little in order to appeal to the increasing number of voters who sit somewhere in the middle of each school of thought. For example, successive Liberal governments in WA have ruled out introducing toll roads (which should theoretically be OK with their supporters) and Labor governments have implemented various user-pays policies (that normally wouldn't be supported by its supporters).

So given that the voting public seems fairly comfortable with this fuzzy grey blob between the red and blue edges, why does the Barnett government keep telling us that we should all pay a true cost for our utilities?

Hmmm… to start with, our Economist-turned-Premier and his very (small L) liberal Treasurer Troy Buswell started their term with very big plans. The then Treasurer was eager to prove his economic credentials by lowering taxes and duties and our statesman-like new Premier had grand visions of an infrastructure boom under his watch. They knew that to achieve these goals, they would have to keep recurrent costs low and reduce any unnecessary drains on the government's coffers. It’s also only fair to recognise that they also knew they had to deliver a truck-load a of cash to their new "partners" every year in the guise of the Nationals’ Royalties for Regions scheme.

So when Mr Barnett and Buswell sat around the big table with treasury geeks and started to frame their first budget, they were somewhat shocked to learn that the former government had made the conscious decision to spend hundreds of millions of dollars keeping the prices of water and energy low.

Immediately, the little L liberal in both men came to the fore. The Premier and Treasurer agreed that not only were these subsidies contrary to core liberal philosophy, they were also tying up wads of cash the new government could use to help deliver the big ticket items they had been dreaming about.

As the first budget got closer, the Premier and Treasurer finally took the brave decision to boldly set an agenda of eventually removing all subsidies from utility tariffs – and agreed to big jumps in prices across the board.

So, like any budget decision - positive or negative - a couple of media people bounced it around and soon after, devised the amazing, brilliant, happy, happy "cost reflectivity" plan. As time went by and the budget day media was finalized, this spin was refined to include lines about the need to get tariffs up to cost reflectivity in order to attract more competition, which in turn would put downward pressure on prices (go figure).

Now, I've had a bit of fun with that but in all seriousness I don't think the first decision (or even the resulting spin) was much of a mistake for the current government. Tariffs hadn't increased for a number of years and the government did have some big plans for the extra cash. In any case, the bill shock was only 6 months into a 4 and a half year term and if the government had slowed its increases from then on, I suggest we wouldn't be talking "cost of living issues" now.

But unfortunately old habits die hard.

As we know, every year since, the government has implemented more increases and then reinforced the same old explanation: cost reflectivity is vitally important in order to increase competition - which will eventually reduce costs. The decision to continue to ‘sell’ cost reflectivity as a holy grail has left the government in a very ugly position with only one budget and 11 months before the next election.

An Economic Regulation Authority (ERA) report released only last week confirmed that residential electricity tariffs are still 23% away from being cost reflective. In spite of this, the Premier said on radio this morning, “the big hits in electricity prices are behind us” and went on to reassure the public that there would only be a “modest increase” in this year’s budget.

Old habits do indeed die hard.

This is an ugly problem for the government and creates two very uncomfortable questions that the Premier will no doubt have to try to answer sooner or later:

1. If the tariffs are raised by only a nominal amount this year, doesn’t that mean we are no longer closing the gap to cost reflectivity - and with further increases in the cost of fuel and labour expected over the 12 months following this year’s budget, isn’t it possible that a small increase could even take us further away from cost reflective prices?
2. If cost reflectivity is no longer a priority and the government has decided that cross-subsidies are now ok, why do we need to have any price rise at all? In fact, couldn’t we cut tariffs a bit?

Talk about a rock and a hard place.

They say it isn’t easy being green, but I reckon the next 11 months will prove it’s probably tougher being blue.

Power shake-up imminent… I think… well, probably

The article on the front page of today’s West Australian newspaper is hilarious. Not for its journalistic qualities mind you, it’s the message that’s funny.

The headline is “Energy shake-up imminent: Collier”. However, to paraphrase what the courageous Minister for Energy says in the body of the story – “I am strong and in control. Now that the Premier has talked incessantly about how he wants the disaggregation of the State’s energy utilities re-aggregated, I agree… I think. No plans yet, but I’m sure it will happen.”

Is this a commitment? Has Treasurer Christian Porter agreed? If so, what did he agree to? When? How? Is this is anything more than a kneejerk reaction to the Premier’s moaning? If this was in any way planned, why did the Government allow both Verve and Synergy to sign off on separate multi-million dollar gas contracts just a few months ago?

The truth is WA’s government energy sector IS under pressure, but it probably has more to do with the way it is being managed than issues of disaggregation.

Let me explain.

To be fair, there are genuinely some costs and processes that do increase as a result of the former Government’s decision to split Western Power into four separate utilities. Obviously, there are three more Boards of management and three more groups of reasonably paid executives. There are also the issues all corporations with a single shareholder face such as reduced buying power because under competition policy, they all have to negotiate fuel and service contracts independently – without colluding on prices.

However, that is probably where the real issues of disaggregation end.

Beyond that, the big problems are well and truly within Premier Barnett’s remit. As I wrote in this article last week, it is bewildering to most taxpayers that the Premier has consistently claimed it would be better for the public to re-merge some of the Government’s energy corporations but have no plans to do it.

But the revelation by the Sunday Times yesterday that the last of the State’s energy executives has decided to quit offers an insight to another problem damaging our energy market - and it’s a problem that Mr Barnett knows was not caused by anything other than his own hand.

The problem is of course, Peter Collier - not his staff, not his policies… him, plain and simple.

1. Verve
2. Western Power
3. Synergy
4. Horizon
5. Office of Energy
6. Department of Indigenous Affairs…

Actually it’s far quicker to just name agencies under the control of Minster Collier that haven’t had at least one change of its chief executive during his short reign so far:

1. Department of Training and Workforce Development

“So what?” Western suburbs folks might say. “It’s good to see a politician rolling up his sleaves and cleaning out the dead wood,” they might naively add.

As a conservative voter growing more and more desperate for some truly conservative leadership, I would wholeheartedly support such a move… if only it was a calculated one.

But the truth is these losses are not the result of some Machiavellian master plan by a fearless powerbroker ridding the bureaucracy of under-performers. On the contrary, the fact is that most of these people have voluntarily walked away from their prestigious and lucrative roles as highly respected long-term members of the public service. The problem for all of us is that when they walked, they took with them many years of valuable experience and a great deal of corporate knowledge the State needs now more than ever.

But they, as well as a number of highly experienced Board Members, are gone – bridges burnt. And when I say bridges burnt, I mean to the ground. Indeed, one of Minister Collier’s own favourite (yet culturally insensitive) clichés when talking about relationships he has destroyed is that he "napalmed” it.

Oh the irony.

Now for the record, it’s important for me to acknowledge that being any Minister in the current WA State Government isn’t easy. The Premier is a lone wolf and often informs his Cabinet and Party Room colleagues of his thinking via talkback radio. No one, other than the jelly-backs and sycophantic kiss-ups, would argue this point. The Premier himself publicly acknowledged his tendency to shoot from the hip during an exclusive one-on-one puff piece recently aired on Channel 9. However, Cantankerous Col Pot and his nervous nannies proves that I don't think this is the worst quality you could have in a leader - at least he does have his own ideas.

It’s the impact of his leadership style on the rest of his team that causes the biggest problems for the state. At the end of the day, Ministers are just people and like all of us, they want to feel respected and valued. Some of them are very self-confident, intelligent individuals who are able to just put the frustrations aside and get on with doing the best they can with what they have. Ministers Waldron, Redman, Porter and Buswell are a few who seem to have that magic ability.

However others, like Peter Collier, don’t. But please, I really don't envy Mr Collier. In fact my feelings toward him are currently much closer to pity.

Imagine being a devotee of a political party for 35 years, since you were 16 years old. You do your best to repress all your other urges and pursue a 20 year teaching career. During that time you manoeuvre yourself into a position of being admired as somewhat of an expert in politics and eventually get the ego-stroking title of ‘powerbroker’ within the party. After doing what you have to do for almost four decades, imagine then being slapped in the face by the bloke you helped to become Premier.

It’s no secret that as a former teacher, Peter Collier was desperate to take on the Education Ministry when the Liberal-National government was formed in late 2008. And I'm sure that I am one of many who would say that he was a highly effective Shadow Education Minister and therefore probably deserved to get the nod from the Premier.

But the fact is; he didn’t.

At the very first public test of their relationship, the Premier chose to tell the world that he simply didn’t trust Peter Collier enough to get the Ministry of his choice. Instead, Colin Barnett set about persuading someone else to take on the role – even though that person didn’t ask for it.

Having received that very public slap from a guy you thought was a friend, imagine how it would feel to then come to the personal realisation that you are 100% incapable of using the power people think you have to influence that or any decision of the Premier since.

At a human level, realising you’re impotent before you have a chance to conceive is nothing short of heartbreaking. I really do feel for him, but the biggest issue here isn’t personal – it’s the impact this has on the effectiveness of our State Government.

Situations like this cause problems for all of us because Ministers are just people - and when people get resentful, it sometimes manifests in anger and bitterness. We all know people who in spite of tragic misfortune, can manage these feelings and turn the energy into positive outcomes. But there are also those who try to repress every uncomfortable feeling they come across until they eventually explode and spray everyone around them with their offensive bile. People in this situation - those living a lie - are often highly anxious control freaks prone to angry, irrational outbursts when things don’t go precisely to plan.

Clearly, this would dent anyone’s ability to maintain mutually respectful, productive relationships on any level. And it has. The very real public interest in this is that during his three short years as Minister so far, Peter Collier has ‘napalmed’ many relationships important to the efficient operation and future of the government. Under his watch, a number of powerful former friends have unnecessarily become powerful threats – the head of almost every agency reporting to him has taken his or her knowledge and expertise to the private sector, numerous high profile Board members of government trading enterprises are now gone and he has had more than 35 staff in his Ministerial office of just 12.

As well as the public sector’s loss of expertise and wisdom, turnover of senior officers costs the taxpayer dearly. There are real dollars required to recruit and train replacements and the confidence and efficiency of all the other people working in the agencies plummets every time there is an extraordinary change of leadership.

Regardless of what lies at the core of Minister Collier’s tendency to destroy relationships, he needs urgent coaching to help him stop burning the government’s valuable bridges. Interestingly, the latest in the long line of executives to vote with their feet and walk away from Minister Collier, Verve CEO Shirley In't Veld, is held in quite high regard by the Premier. Hopefully with her new-found independence, she will soon be in a position to personally encourage Colin Barnett to help his Minister value his human resources a little more.

Unfortunately, I think Ms In't Veld might find Minister Collier’s direct line manager is simply too busy spreading his own accelerant on other bridges.