What do you reckon about the Democrats these days? My state of mind on the matter is in a column in today’s Herald and below, followed by initial reaction from Alex Dunnin, John Bignucolo, Max Phillips, David Davis and Jenny Forster. To end, a detailed piece by Susan Brown, a former adviser to Democrats leaders Cheryl Kernot and Meg Lees.

First an apology. I forgot to put under the piece in the paper the disclosure that I own Telstra shares. That’s fixed for the online version.

I bought T1 shares because my father was an engineer in the Post Master General’s Department, which became Telecom – I think when Labor started corporatising it. He died before the partly privatised Telstra was born. My father was very distressed when engineers began losing their power to the accountants. In response he became interested in the ‘union’ – the Professional Officers Association – and sometimes went to Melbourne to argue the engineers’ case before the Arbitration Commission. It was a big step for him, as he was a Joh Bjelke-Petersen supporter.

My Dad was an early proponent of Optic Fibre cable, and fought hard to get it put in around the country. He invented the “Alcorn Capstan” to help lay the cable, and got into big fights with the accountants because he wanted to wrap the cable in a material that would last 100 years and the accountants wanted a cheaper alternative that would last a much shorter time. Cost before excellence, short term elevated above long term. And that was just the corporatisation phase,

There’s a couple of good pieces in the Australian Financial Review today about selling Telstra.

Alan Kohler, the most clear-sighted and thought-provoking finance writer in Australia in my opinion (sorry Alan), argues that the proceeds of sale should go to an independent body to decide – after public submissions – what public infrastructure to spend it on, free of porkbarrelling. He notes that it’s ridiculous to sell Telstra before we are convinced the proceeds will be well spent. We were told Telstra sale proceeds would retire government debt, but now we know that would reduce that debt too much, destroying the bond market. So now Treasury wants to keep the debt, and invest the Telstra proceeds in a share fund.

Crazy! Government is there to spend money on long term projects of benefit to the Australian people, including children and future children. That’s what it’s for, whether it builds national infrastructure or saves the Murray River by itself or in partnership with private enterprise. The market doesn’t do the long-term stuff.

I sometimes wonder why some of our political ‘leaders’ wanted to go into politics if their aim was to hand over responsibility for everything to people who aren’t elected by us.

In a letter to the editor, Philip Henty of Canterbury in Victoria wrote:

“Darryn Abraham of Access Economics … hits the nail on the head when he says that in working out the value for the sale of its remaining 51 percent stake in Telstra, the Federal Government should be thinking about maximising the returns to the country as a whole, over time.

“This approach would, of course, require the government to present some hard data on costs and benefits, together with reinvestment options to support this major capital allocation decision.

“Further, in line with Abraham’s advice, it would mean that the Government would need to present a comprehensive argument reflecting the triple bottom line approach to the sale encompassing social and environmental impacts and including a regulatory package. It’s the sort of basic process companies have to undertake every day of the week.

“Unfortunately we are unlikely to see these arguments presented. Transparency and financial rigour in the Government’s micro-economic management is increasingly in short supply.

“…Taken as a whole, the sheer scale of, and lack of rigour and transparency applied to, recent government spending and asset management decisions indicates a significant deterioration in micro-management. Poor quality decision making inevitably ends up affecting the macro position, as it does with any enterprise.

“The lack of critical argument presented for and against the Telstra sale is truly staggering.”

Indeed, but why should the Libs bother with all that if the Opposition won’t make them? Total opposition to the sale without putting the government to proof and demanding details of what the proceeds will be spent on and how before the Senate vote is an abdication of Labor’s responsibilities. Labor should listen to Meg Lees and learn something. She says we should sell if the government can PROVE it’s in the public interest to do so, and that judgement can only be made when the government reveals what it will do with the proceeds. It should set out the parameters of its answer to that question BEFORE the horsetrading is done in the Senate to buy votes.

***

Removing Lees is essential to Democrats’ survival

By Margo Kingston

In the beginning there was Pauline Hanson, whose power climaxed last year with Tampa. Now the fallout: the transformation of Australian politics to accommodate the new climate.

Lefties are deserting Labor for the Greens. Their backs are to the wall – on state ownership, unionism and social policy – and they want to dig in and just say no. The Greens know which side their bread is buttered on – their leadership rejected Bob Brown’s push to sell Telstra in exchange for an end to logging of old-growth forests because economic leftism is vital to keep growing the voter base.

Labor doesn’t believe in what it used to and hasn’t worked out what it does believe in that’s any different from the Liberals. The Liberals shed their small “l” credentials in favour of big brother social conservatism, indifference to human rights and a radical dismantling of the state in favour of the market.

And the Democrats?

The public split between their former and current leader is about where the Democrats can profitably position themselves in the new political marketplace. Where is the significant gap the Democrats could credibly fill?

The answer is obvious. There is no party representing free market policies balanced by concern for the human cost, environmental responsibility and progressive social values. Voters of this mind – Liberal- and Labor-leaning – are disenfranchised.

This is the place for the Democrats in the new politics. It is why former Liberal Greg Barns has joined the party. The left won’t forgive the Democrats’ GST deal. The voters they could get – social progressives who, for example, would like to see Telstra sold in return for some big-spending repair and conservation of our natural environment – are frustrated by Natasha Stott Despoja’s hard-left economic stances.

It’s no accident that the issue dividing the Democrats is Telstra. There’s a good argument that we were lucky Telstra stayed in majority government ownership during the tech boom, because it couldn’t spend up too big.

But now, with telecommunications companies around the world in ruins and Telstra well placed to pick up great assets at fire-sale prices, it’s time for the Government to sell out and let Telstra grow. Unless, of course, your constituency sees opposition to the sale as a bottom line.

The Democrats were born of a Liberal split when Malcolm Fraser ruled. They developed a Labor lean during the years of Labor power, and began to lean back under the Liberals when Cheryl Kernot did the deal on industrial relations reform.

The Democrats appeal to voters who want to avoid the excesses of absolute power by either side, who want to see longer-term concerns included in debate, and who want governments to prove their case for change on merit. Voting Democrats is not a radical act, it is a vote for the middle ground.

A period of calm after the leak to crikey.com.au of Meg Lees’s incendiary letter to the Democrats “compliance committee” has ruptured, and Lees’s expulsion is again on the cards. In my view, her expulsion would be good for the party and for Australian politics.

In the new Senate, the Government needs the Democrats or four of the other five senators to pass a law. Sack Lees, and the Government needs four of six.

Lees is a great cost-benefit deal-maker. If expelled, she could exploit the Democrats’ rules that senators have a conscience vote on every issue and swing the Telstra vote by attracting supportive Democrats senators once Howard offered her a deal on sale proceeds. Lees could effectively hold the balance of power in the Senate.

In this scenario, Stott Despoja’s leftie wing of the Democrats – which failed so woefully in the head-to-head with the Greens at the last election – withers and becomes absorbed into the Greens. Lees leads the rest into a viable alternative for small “l” Liberals and “Third Way” Labor voters.

Maybe Lees is thinking the same way. Sack her now, Stott Despoja, and the Democrats could mutate and survive as a powerful political force. Keep her on, and the Democrats could die.

Disclosure: The writer owns Telstra shares

***

Alex Dunnin

Very simple yet profound piece in today’s Herald. I think you’ve nailed the real game that will emerge – indeed I met an apparently influencial labour sympathiser who suggested as much, though obviously from the view that the union links are holding them back and so the whole 50:50 debate is irrelevant.

***

John Bignucolo

I read your analysis of the dynamics of the Australian Democrats’ impending breakup with interest. One aspect of the analysis that concerned me was your characterisation of the Greens as a refuge for desperate, disenfranchised, and determined left wingers. I wish it wasn’t so, but I think you’re right.

I stopped voting for the Labor Party some elections ago and switched to the Greens, precisely because of their environmental policies. Not because they opposed privatisation and not because they objected to the Howard government’s border protection policies. There is a danger here that the Greens are going to lose focus and forget why they established themselves in the first place.

The notion of the Greens – founded on the notion of “It’s the Environment, stupid” – being hijacked by rebadged Trots and Sparts is a depressing one. However, it’s an observable phenomenon. One can see it in faded billposters for “Green Left Weekly” or in the sandbox of university politics.

Bob Brown’s suggestion that the Greens consider trading the sale of Telstra for the end of logging in old growth forests is exactly what I would want an environmental party to pursue. Whatever the merits or otherwise of the public ownership of Telstra, it has didly to do with the environment. However, the executive of the Greens chose this over the forests. This does not represent a good outcome for the environment.

I’d be really happy if all those grumpy, dismayed leftwingers engaged in a little truth in advertising and went off to form their own party instead of co-opting and debasing the Greens’ founding principles.

***

Max Phillips

I disagree with you on Meg Lees and the Democrats. Firstly, if, as you argue, Telstra has benefitted by being majority state owned, why should it be sold now? You say they can benefit from a fire sale of international communications assets? Why do we need Telstra to become another megalomaniacal global communications-media corporation?

Why can’t it be simply be a telecommunications company *servicing* Australia? Do the people of Australia really need to endanger their telecommunication services, and sell off a national asset, to let some overpaid boys in suits play takeover and merger games?

Secondly, you advise Lees to split from the Democrats and become independent, and then hypothesise a scenario where “Lees could effectively hold the balance of power in the Senate”. When people vote for the Senate, they vote for a party – around 96% vote above the line.

In my book, a Senator who resigns from their party should vacate their seat for a nominee from their former party. This principle was true in Mal Colston’s case, and should hold true for the Lees scenario – especially as the Democrats pride themselves as a grass roots democracy party.

If Lees wants to be an independent senator, she should run for the Senate as an independent next election. She is welcome to make the sale of Telstra a plank in her policy platform. It would be interesting to see how many votes she would get.

***

David Davis in Switzerland

Under either of your scenarios, Stott Despoja ends up on some sort of scrap heap (ultimately). This is where she belongs. It’s a war of ideas and she’s lost it. She can’t compete with Labor or Liberal and as you rightly point out, she can’t even compete with the Greens with her kind of policy agenda.

The Democrats would be better off if they went back to where they started, as a kind of honest, realistic policy broker. Constantly throwing tantrums and saying no to everything is not being an honest broker, it’s being a waste of space.

Someone like Meg Lees is the only one who could convince disenfranchised “small l’s” and other variants of “third way” voters to choose the Democrats. Lees has proved in the past that she is very smart in making great gains for her party. She has actually implemented some of their policies and made a Democrats mark on the country. By being prepared to horse trade on the GST, she did more than be involved in a perpetually meaningless talkfest. She actually had substantial impact.

Politicians and parties should be measured by the impact they make. They are lawmakers in the end so you have to judge them by how they impacted legislation. A lot of the other stuff is fluff and bizarre pantomime.

Kernot has long made a lot of noise about the adversarial nature of Australian politics. That’s the system, or is it? Lees proved that you can work the system to achieve quite unexpected outcomes. You don’t see Lees walking around making shrill announcements and talking garbage. You just get the impression that she’s smart and a hard worker who can get things done without a lot of fuss.

Until she is back, I can’t imagine a single small “l” person being attracted to vote for the Democrats*. Why would they be? Instead of trying to be all things to all people it strikes me that the Democrats are trying to be nothing to nobody.

Trying to be sacked is rather Machiavellian. Successful Machiavellians are far more interesting than the ones who botch it up or do it so obviously that they some how lose the Machiavellian nature of it in the process! The dark horse prepares for another run and my money is on her. Meanwhile the show pony returns to the stable.

* Greg Barns excluded I suppose!

***

Jenny Forster in Sydney

Cathy Bannister makes a good point in Weighing in on ‘The Affair’ (July 8):

“If Meg Lee’s GST deal, which seemed oh so sweet at the time, is a prime example. What has happened to the $400 million to be spent on the Greenhouse Gas Abatement Program? Well, firstly the Australian Greenhouse Office (who administered the program), didn’t approve funding of most proposed projects during the first year, on the (ludicrous) grounds that only projects that are not commercially viable were eligible. (Naturally, those that were not commercially viable tended to be dogs, thereby being also ineligible for funding. Catch 22.)

“And this year, the whole $400 million kitty has been swallowed back up in defence and border protection. So poor Meg’s brilliant deal was for nothing.”

Could the green lobby and the Labor Party please note what Cathy says. It seems that Howard is now hell-bent on selling the rest of Telstra at any old (low) price to appease the “mums and dads”, as share purchasers are referred to in Howard’s picket fence Australia.

They lost on T2 and he will see them right this time. With Telcos in tatters world wide it is the worst time to sell to get a good price. The suggestion is that Telstra can scoop up some of the Telco corpses at bargain rates.

Bob Brown almost accepted the carrot of a payment to the environment but was reeled in by the rest of the party. We can all see the need for a lot of money to halt the spread of salinity , stop logging of old growth forests and seed companies who want to produce wind products and energy as a renewable resource.

What Howard is going to do is weigh Telstra on one side of the scale and the environment on the other then call the Greens and Labor for environmental delinquents in the parliament/press if they object. Anyway, have they stopped beating their mother?

By the time the public wakes up to the fact that the environmental money from Telstra 3 has gone on the army/navy/airforce/border control/war in Iraq Howard could be in retirement travelling the world on his gold card. Did someone say Teflon?

***

Mr Howard, the number you have called may just be connected

By Susan Brown

Disclosure: Susan Brown is a hack and sometime flack for The Brisbane Institute. She is a North Queenslander who worked around Australia before acquiring a degree in social and environmental policy from the Royal Melbourne Institute of Technology. After working in the Mines Department of Victoria and for CSIRO she became Coordinator of the North Queensland Conservation Council just as the Port Hinchinbrook development hit the headlines. Australian Democrat Leader Cheryl Kernot head-hunted her as an adviser. When Cheryl defected she became a senior adviser to Meg Lees. After six years of heady parliamentary life, including being part of the GST team which got more than one billion dollars in new money on air pollution and transport initiatives, she left to look after two sons.

Talk about a mixed message. Queensland Democrat Senator Andrew Bartlett is busily celebrating the virtues of a party that embraces difference and where Senators vote as their conscience dictates, and his leader is running around calling for a united front and saying “disunity is death”.

Party polls have dived to their lowest levels in recent memory and the party is struggling to overcome obvious differences in approach to some big ticket government agenda items.

On Telstra, varying combinations and permutations of Democrat Senators nationally are either open or closed minded on the issue, depending which newspaper or radio you listen to and what time of day it is. And former leader Meg Lees is facing party disciplinary proceedings that look like an uneasy cross between a firing squad and a counselling session.

It is instructive to recall Don Chipp’s 1980 address emphasising the Democrats having a conscience vote on each issue as the Democrats gained balance of power the first time. “We’ll bring a refreshing change by voting as each of us see the issues as they affect our electors – not obeying a combined Trades Union monolith or a multinational consortium, or even a political party hierarchy, but to you, the Australian people.”

Since then, Democrats mostly vote together but until now it has been acceptable to split on various issues. ABC radio presenter Steve Austin reminded his audience that Democrat Senators had recently split over the republic vote, gaming legislation, euthanasia legislation and even the GST.

The constructive versus obstructive approach is a way of assessing different styles of Democrat leaders. While many journalists paint the difficulties between Lees and Stott Despoja as a cat fight, or the bitterness of a deposed leader versus the inability to be inclusive of the new leader, the problem is deeper than that.

Of course there is something in the shallow interpretations. Lees (and a number of other Senators) are grumpy at being shut out, tightly controlled and given scant resources. But that isn’t the whole story.

There is an ideological difference in Democrat Senator and leadership styles. Crusaders for progressive policy and true reforms in the way we deal with each other, our economy and our environment are passionate folk and they have different approaches.

In parliament and the media, Stott Despoja is mostly in protest and block mode.

This gets to the heart of the matter, declaring or delivering.

In Germany the Greens are described as fundies or realos. The fundies (or fundamentalists) would rather get nothing than settle for less than 100% of their ask. The realos are prepared to settle for a continual process of getting incremental gains in their direction.

This starkly demonstrates the difference in Australian Democrat leadership style, Stott Despoja talking it up publicly but delivering little practical gains for the party in Parliament is a classic fundi. She is competing with Federal Parliament’s other fundi, Senator Bob Brown. In this battle, he has all the advantages.

Indeed, she is following in the footsteps of her mentor and the other notable Democrat fundi leader Senator John Coulter. He led the party to their worst ever election mauling.

Under Stott Despoja, the Democrats are abandoning their claimed ground of reasonableness, fairness and balance to brawl with the Greens. And the grass roots activism based Greens won’t lose this ground.

Lees was a realo type of leader, who accepted the people chose the Government, and worked with the Government and opposition of the day to get tangible outcomes in progressive policy delivery and spending initiatives in the Democrats areas of interest. And like her realo predecessors of Chipp, Haines, and Kernot she delivered – with massive spending programs and hundreds of significant amendments to legislation.

One of the problems for the Democrats is the tension between what Democrat members want and what Democrat voters want. While the party is viewed as being leftist, many of the voters are small ‘l’ liberals. Sixty percent of Democrat Senate voters used to direct their House of Representatives votes or preferences to the Liberals.

The large vote in the upper house from major party voters in the lower house was a form of third party insurance. I want a major party to be in government, but I want some form of check over them was the thinking behind the votes. There was a real resonance in the old slogan “Keep the bastards honest” while new slogan “Change politics” does not seem to be resonating anywhere much.

With a claimed rise in younger membership under Stott Despoja, members are probably more idealistic and fundi while votes are probably more pragmatic about the reason they want the Democrats there. The leader, as with any party leader, has a difficult and delicate path to tread between these competing needs.

Under Lees leadership, when Stott Despoja indicated she would not vote for a GST in any form she was not hassled in the party room. She was not stopped from speaking publicly about it, she was not harassed by the National Executive or referred to the National Compliance Committee. None of the leader’s spin doctors were tramping the press gallery whispering about expulsion.

This illustrates both a maturity in the former Lees leadership and an immaturity and intolerance in Stott Despoja’s. Intolerance is another fundi trait.

Another poke by the National Compliance Committee to Lees earlier this week received another public outburst from her on Telstra and another flurry of media activity focussing on Democrat fights. Stott Despoja moved to quell it, saying the argument was between the party and Lees and had nothing to do with her. This is as accurate as her claim that she and her staff were not running the leadership spill out of her office.

Deputy Leader Aden Ridgeway unhelpfully said that he too could make his own mind up on things, saying the party should keep an open mind. He isn’t the only one to think this according to more media stories listing other Senators also thinking for themselves, so the National Compliance Committee may soon have their hands full.

Queensland Senator John Cherry is very firm about the prospect of a Telstra sale: “All Democrat Senators said they would vote against the Telstra sale in this parliament when we went to the last election. Beyond that we can’t bind the party or ourselves for subsequent terms.” Cherry points to the huge financial, regulatory and service issues and says he can’t see how the Howard Government having the will to sort it out. Reminding us that Howard lost around $5 billion in the first Telstra sale, he estimates current share prices would see a $5-10 billion loss this time.

“I can’t see how the Government could make a Telstra sale acceptable this term,” he says.

The Government senses a split in the air, and is moving quickly to exploit it.