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September 15, 2012

Mark Metherell is health correspondent

View more articles from Mark Metherell

 Australia’s knowledge economy is flexing its muscles in a host of highly successful biomedical industries, writes Mark Metherell.

textGaining perspective … blind woman Dianne Ashworth received an implant last month.

Amid the gloom surrounding Australia’s struggle to sell its manufactures overseas, who can name our top manufactured exports? The winning merchandise tends not just to be made in Australia, but invented here, too. The products come from a clean, smart industry. Its leading players are barely household names and there are many other smaller enterprises whose output sells around the world.

We are talking about the biomedical industry, which in recent years has risen to top place among Australia’s elaborately transformed manufactured exports, leaving cars and wine far behind.

Whether it be an underarm gel to treat grumpy old men, a device to correct sleep disorders, a transforming treatment for head lice or a product to reverse dental decay, this country’s biomedical inventions are earning a significant slice of the $4 billion Australia earns in exports from pharmaceutical and medical gadget exports.

textVisionary … Bionic Vision Australia’s bionic eye. Photo: AFP/Bionics Institute/Bionic Vis

This week’s announcement of a significant advance towards a bionic eye follows the international success of the Melbourne-developed bionic ear, the centrepiece of the hugely successful multinational Cochlear company, now generating $1 billion in sales.

It used to be argued that Australia was strong on medical ideas – thus six Nobel prizes for medicine – but weak on taking the idea from the laboratory to the bedside. But in the past two decades, a sea change has come. Besides Cochlear there are CSL and Resmed and they all ride significantly on local expertise. CSL is the plasma and vaccine conglomerate which in recent years mass produced the cervical cancer vaccine Gardasil, created by Australian Ian Frazer and his team.

ResMed, which is now based in San Diego but was born of the pioneering design of Sydney University’s Professor Colin Sullivan of a device to beat obstructive sleep apnoea, still drives much of its research and development in Australia.

But who knows that the worth of Australia’s publicly listed biomedical companies is actually higher on a per capita basis than is the case for such companies in the US? Australia’s higher input is despite a much lower level of venture capital investment compared with the US.

The paradox is that despite Australia’s relatively golden performance, the nation appears to display scant interest in its home-grown smart performers glowing in the sophisticated arena of medical research and development.

The biotech industry blooms, while the heavily-protected car manufacturers struggle to survive and the winemakers prosper behind a defensive tax regime.

Little-known Australian companies such as Pharmaxis are scoring international approvals and sales for its medications for lung disease, and opening factories in Australia too. Its products include Bronchitol, developed in Australia and offering a new treatment for cystic fibrosis, one of the world’s most common life-shortening genetic diseases.

Another rising star is Acrux, which has gained a world reputation for its products, developed by Monash University scientists. These are fast-drying sprays and liquids including an underarm testosterone treatment for men.

The small company Mesoblast describes itself as a world leader in ”regenerative medicine” for treatments of rheumatoid arthritis. It is linking with global businesses to develop adult stem cell therapeutics for conditions including cardiovascular and central nervous system diseases.

Australia’s medical research and development is the subject of a review which is expected to urge fundamental changes to ensure research is ”embedded” into the health and hospital system and to call for more funding to match the soaring research effort overseas.

The federal government has commissioned Simon McKeon, the chairman of the CSIRO, to report later this year on findings of a wide-ranging inquiry into the strategic direction of medical research.

A recent review in NSW by Peter Wills has prompted a state overhaul to foster stronger ”translation” of research, aimed at speeding the transfer of proven results from the laboratory to the patient care.

The Federal Health Minister, Tanya Plibersek, who ensured her portfolio included medical research when she took on the job, says she cannot get over the breadth and quality of research work she sees.

Plibersek is not signalling her likely response, but the funding of medical research, now running at $800 million a year, is the subject of intense debate.

The National Health and Medical Research Council funds a mind-numbing range of areas. The McKeon review is finding sharp criticism of the way funding gets shared around at present; that regulatory hoops keep scientists from their laboratories for weeks at a time meeting bureaucratic requirements; and that too little money is spared to finance promising discoveries in the crucial time between invention and commercial development.

In talks to other scientists, McKeon is said to have pressed for greater ”embedding” of medical research in everyday healthcare.

The retiring chief executive of CSL, Brian McNamee, says Australia needs ”to keep nurturing our world-class research base, but we should think about how we can better help institutes take their ideas from the lab through to initial human trials”.

Strong research results, he says, can attract investment from industry ”for the most expensive and risky phases of development”.

Read more:

by: Jessica Irvine National Economics Editor
  • From: News Limited Network
  • September 16, 2012 12:00AM

Jessica irvine

News Limited economics reporter Jessica Irvine. Picture: Sam Ruttyn Source: The Sunday Telegraph 

TWICE a year on a Sunday, my local council arranges a “hard rubbish” collection day. For nosy-parkers like me, it’s a wonderful opportunity to legitimately rifle through neighbours’ rubbish as they leave it on the curb for collection.

A few years back, hard rubbish day saw footpaths transformed into makeshift, outdoor lounge rooms as new-looking lounge suites, televisions, lamps, throw rugs and cushions – unwanted, but in pristine working order – were relegated to the street.

This year’s Spring clean out was different.

This year the stuff people put on the streets really was just trash; bits of old wood, broken garden chairs, busted suitcases and soiled mattresses. And there seemed to be less of it.

What changed?
During the property boom of the early 2000s, Australians embarked on a debt-fuelled spending binge. A halving in interest rates since the mid 1990s meant families could afford to borrow twice as much. Banks were more willing to lend.

Supported by rising incomes and low unemployment, we went on a spending splurge. House prices boomed – more than doubling in a decade. Australia’s debt to household income ratio soared above 150 per cent – one of the highest in the world.

During the height of the property frenzy in the early 2000s, one in 12 Australian homes changed home each year (it has since dropped back to one in 25). As we moved, we treated ourselves to a few housewarming presents: new furniture and appliances – all on the plastic, of course.

At the same time, the rise of China meant the price of imported appliances, furnishing and gadgets plummet. We stuffed our homes with them and we kicked our old – but still perfectly good – possessions to the curb.

That was then.

Today, it’s an entirely different story.

The GFC was an almighty wake up call for Australian households. Our love affair with debt had already turned sour in 2006 and 2007 as the Reserve Bank lifted interest rates to eye wateringly high levels to cool the inflation created by all this spending.

When the US investment bank Lehman Brothers collapsed in late 2008, sending shockwaves through the global financial system, households really battened down the hatches. Interestingly, the crisis gave households both the motive – uncertainty – and the means –lower interest rates and stimulus money – to start saving again. We took that first stimulus cheque and have been squirreling away as much savings as possible ever since.

It’s a double whammy for industries like retail and tourism who are also struggling against a high Australian dollar created by the mining boom.

Retailers’ annual revenues grew by about 8 per cent or more during the early 2000s. Spending is now down to around 4 per cent growth a year – more in line with annual wages growth.

But is it only a matter of time before we return to our big spending ways?

I suspect not. All the signs suggest the Australian consumer mindset has changed fundamentally. We have turned our back on debt. More of us are ahead on our mortgage payments. Our credit card balances are shrinking. New loans are down. We are treasuring our possessions once more.

We have become more conservative with our finances. When asked to nominate the safest place for our savings, the proportion of us saying “in the bank” is at a 38 year high. The proportion saying “in shares” is at a record low. National accounts figures suggest households are saving about 12 cents in every dollar they earn, reversing the trend of the early 2000s when we spent more than we earned.

Economists call the trend “deleveraging”. It’s what makes the downturns that follow credit crises so protracted. We want to pay down our debts before we can start spending again.

That is bad new for jobs in the retail and property sectors of the economy, which are likely to remain on the ropes for some time to come.

But it is good for the long term stability of our economy, helping us to build a buffer against uncertain times.

Even if it does make trawling through your neighbours’ trash less rewarding.

Average credit card balance in July, down 2 per cent (or $69) on the previous month – the biggest percentage fall in 18 years.

15 million
Number of credit card accounts in Australia – up 1 per cent over the year

35 million
Number of debit card accounts in Australia – up 6 per cent over the year.

Annual growth in retail spending in 2003.

Annual growth in retail spending over the year to July.

Increase in the value of outstanding home loans over the year ended March 2004 – the peak of new home borrowing.

Increase in the value of home loans last financial year.

Per cent of Australians who say the wisest place for savings is in the bank – the highest reading in 38 years.

Per cent of Australians who think shares are the wisest place to put savings – the lowest reading on record.

Jessica Irvine is News Ltd’s national economics editor.

by David Burkus

Still from Basil Twist’s “The Rite of Spring.”
Have you ever debuted an exciting new idea to the world only to receive a lukewarm or even highly critical response? Well, get used to it. Mounting evidence shows that we all possess an inherent bias against creativity. The good news is there’s something we can do about it.On May 29, 1913 in Paris, Igor Stravinsky debuted perhaps his greatest work, The Rite of Spring ballet. Up until that point, most ballets were graceful and elegant, full of traditional music. Rite was different. Stravinsky had written intentionally inharmonic notes and arranged around pagan themes.

Within minutes of the show’s start, the audience began to boo the performers. Supporters rallied against the discontented audience members, and the show quickly degenerated into an all-out riot. Before the first intermission arrived, police had to intervene to calm the raging crowd. During the second half of the performance, riots broke out again. Surprised by the reaction, Stravinsky fled the theater before the show even ended.

Of course, history would vindicate Stravinsky. The Rite of Spring is now regarded as a milestone in the history of ballet and musical composition. Yet, even this legendary idea was initially rejected, which likely came as quite a shock to Stravinsky after he spent years crafting and refining the piece.

Similar rejections can leave us wondering what we did wrong or why others just couldn’t appreciate our creative idea. Fortunately, recent research in human psychology is finally shedding some light on how our brains accept (or reject) new ideas.

Creativity requires an element of novelty.

For a work to be truly creative, it has to depart from the status quo at some point. That departure makes many people uncomfortable. Despite our oft-stated desire for more creativity, we also hold a stronger desire for certainty and structure. When that certainty is challenged, a bias against creativity develops.

This bias was first discovered in two studies by researchers from Cornell, Penn and the University of North Carolina. The research team, led by Penn’s Jennifer Mueller, studied our perceptions about creative ideas when faced with uncertainty. In the first study, the team divided participants into two groups and created a small level of uncertainty in one group, telling them they would be eligible for additional payment based on a random lottery.

For a work to be truly creative, it has to depart from the status quo at some point. That departure makes many people uncomfortable.
The participants were then given a series of tests. The first test presented pairs of words on a computer to the participants and asked them to select their preferred pairing. The pairings shown always came from two groups: creative versus practical (novel, original, functional, useful) or good versus bad (sunshine, peace, ugly, vomit). In each round, participants would chose their preference between pairs like “novel vomit” or “useful peace.” The test, known as an “Implicit Associations Test” uses the speed of participants’ reaction time to measure the strength of their mental associations.

The second test was more overt; it measured participants’ explicit perceptions of creativity by asking them to rate their attitudes toward creativity and practicality on a seven-point scale (from strongly negative to strongly positive). When the researchers calculated the results from both groups, they found that the baseline group (the one given no chance at extra compensation) held both implicit and explicit associations between creativity and practicality. The uncertainty group, however, was different. This group held an explicitly positive association between the two, but implicitly their minds separated creative from practical. In other words, they had an implicit bias against creativity relative to usefulness.

Novelty provokes uncertainty.

If this bias is present in most people during periods of uncertainty, then it could well explain why society has a history of rejecting its greatest innovations. To test this thesis, the research team returned to the lab and this time studied a new group of participants’ ability to judge a creative product idea. The participants were again divided into two groups – this time into groups with a high tolerance or a low tolerance for uncertainty.

The high tolerance group was primed by being asked to write an essay supporting the idea that multiple solutions existed for every problem. The low tolerance group was primed by writing an essay arguing the opposite. Both groups were given the same implicit and explicit associations tests and then asked to rate a creative idea for a new product, a running shoe that automatically adjusted its fabric thickness to cool the foot in hot conditions. As anticipated by the first study, the low uncertainty tolerance group showed the same implicit bias against creativity and was more likely to rate the running shoe idea poorly.

Mueller’s results have powerful implications as we think about how to “sell” our own ideas. We now know that regardless of how open-minded people are, or claim to be, they experience a subtle bias against creative ideas when faced with uncertain situations. This isn’t merely a preference for the familiar or a desire to maintain the status quo. Most of us sincerely claim that we want the positive changes creativity provides. What the bias affects is our ability to recognize the creative ideas that we claim we desire. Thus, when you’re pitching your creative idea, it may not be the idea itself that is being rejected. The more likely culprit could be the uncertainty your audience is feeling, which in turn is overriding their ability to recognize the idea as truly novel and useful.

Regardless of how open-minded people are, they experience a subtle bias against creative ideas when faced with uncertain situations.
If the implicit bias against creativity is triggered by uncertainty, then crafting your pitch to maximize certainty should improve the odds of the idea being accepted. You can do this in a variety of ways. Reaffirming what the client or your manager knows is true about their project should prime them to be more accepting of novel ideas. Connecting the idea to more familiar ideas, such as previous successful projects or similar works, will also increase the odds that your idea will be seen as practical and desirable. Lastly, try leading clients toward your idea with a series of statements they agree with and then pitching your idea as if it’s theirs. Thus, counteracting the bias against creativity with an even more powerful bias – the bias for our own ideas!

Have Your Ideas Been Rejected?

Have you had great ideas shot down?

Do you think that minimizing uncertainty could help your idea succeed next time?

David Burkus is a professor of management at Oral Roberts University and editor of LDRLB, an online resource that offers insights from research on leadership, innovation, and strategy.


 by Stephanie Zillman | 14/08/2012 | 1 comments

An employer has been ordered to pay nearly $40,000 in compensation to a former employee following an unfair dismissal hearing – the arbitrator said the employer’s response had, from the very outset, “no reasonable prospect of success”.

In the case of Stan Kunce v Deliver Australia Pty Ltd (U2012/6097), Fair Work Australia found that while the employer had lodged material in response to an unfair dismissal claim, on the day of the hearing it withdrew its witnesses and failed to make any submissions.

The employer was represented by its HR manager, and Commissioner Bissett was scathing of the manager’s preparedness. “The only motive that can be attributed to the (employer) for its behaviour in the hearing is that it maintained its opposition to the claim of the (employee) when, on some reflection in the days prior to the hearing, it was apparent that its position was not defensible,” Commissioner Bissett said. “It was only after the decision was made and the order for compensation was issued did the (employer) seek to engage in dialogue with the (employee) on some other basis for settling the claim,” she added.

The Fair Work Act allows for one party to pay another party’s costs if their application (or response to an application) is vexatious, without reasonable cause or where it should have been apparent that is had no reasonable prospect of success.

In this particular case, the unfairly dismissed employee submitted that the employer changed the reasons it relied on for termination, produced no evidence in relation to its reasons, failed to cross-examine its own evidence and provided “limited” submissions in its defence. As such, the former employee argued that the employer’s lack of response could be seen as acceptance that it had little chance of success. “Whilst the [employer] now pleads naivety and inexperience with tribunal procedures, no such matter was brought to the tribunal’s attention during or prior to the hearing,” Bissett found.

The employer has some 40 employees on staff, and the HR manager had ample opportunity to seek advice or assistance prior to the hearing, but chose not to. Bissett found that while the reasons for termination weren’t changed as alleged by the aggrieved employee, it must have been ‘reasonably apparent’ immediately before and during the hearing that the employer’s response had no reasonable prospect of success.

In making her decision, the arbitrator took into consideration the employer’s apparent lack of knowledge of the tribunal procedures, but was also mindful that having withdrawn its witnesses the employer was aware, by its response to questions by the tribunal, that without its witnesses it could not substantiate its allegations. “Ignorance, however, can be no satisfactory defence against the claim for costs,” Bissett ruled.

Commissioner Bissett ruled that the employer pay costs incurred the day before and on the day of the hearing.

HR takeaway

The case serves as warning for HR to assess the risks that can come with defending claims. All up, the employer was ordered to pay the maximum penalty of 26 weeks’ pay, coupled with the costs for representation during the hearing. It’s important to seek accurate, strategic advice as soon as a claim is received to ensure risks are minimised.


Timothy Egan

Timothy Egan on American politics and life, as seen from the West.



The tutorial in 8th grade biology that Republicans got after one of their members of Congress went public with something from the wackosphere was instructive, and not just because it offered female anatomy lessons to those who get their science from the Bible.

Take a look around key committees of the House and you’ll find a governing body stocked with crackpots whose views on major issues are as removed from reality as Missouri’s Representative Todd Akin’s take on the sperm-killing powers of a woman who’s been raped.

On matters of basic science and peer-reviewed knowledge, from evolution to climate change to elementary fiscal math, many Republicans in power cling to a level of ignorance that would get their ears boxed even in a medieval classroom. Congress incubates and insulates these knuckle-draggers.

Let’s take a quick tour of the crazies in the House. Their war on critical thinking explains a lot about why the United States is laughed at on the global stage, and why no real solutions to our problems emerge from that broken legislative body.

Clockwise, from top left: Representatives John Shimkus of Illinois, Joe Barton of Texas, Jack Kingston of Georgia, Michele Bachmann of Minnesota, Todd Akin of Missouri and Paul Broun of GeorgiaClockwise, from top left: Seth Perlman/Associated Press; Manuel Balce Ceneta, via Associated Press; Stephen Morton, via Getty Images; Daniel Acker for The New York Times; Christian Gooden/St. Louis Post-Dispatch, via Associated Press; Paul Morigi, via Getty Images for OvationClockwise, from top left: Representatives John Shimkus of Illinois, Joe Barton of Texas, Jack Kingston of Georgia, Michele Bachmann of Minnesota, Todd Akin of Missouri and Paul Broun of Georgia

We’re currently experiencing the worst drought in 60 years, a siege of wildfires, and the hottest temperatures since records were kept. But to Republicans in Congress, it’s all a big hoax. The chairman of a subcommittee that oversees issues related to climate change, Representative John Shimkus of Illinois is — you guessed it — a climate-change denier.

At a 2009 hearing, Shimkus said not to worry about a fatally dyspeptic planet: the biblical signs have yet to properly align. “The earth will end only when God declares it to be over,” he said, and then he went on to quote Genesis at some length. It’s worth repeating: This guy is the chairman.

On the same committee is an oil-company tool and 27-year veteran of Congress, Representative Joe L. Barton of Texas. You may remember Barton as the politician who apologized to the head of BP in 2010 after the government dared to insist that the company pay for those whose livelihoods were ruined by the gulf oil spill.

Barton cited the Almighty in questioning energy from wind turbines. Careful, he warned, “wind is God’s way of balancing heat.” Clean energy, he said, “would slow the winds down” and thus could make it hotter. You never know.

“You can’t regulate God!” Barton barked at the House speaker, Nancy Pelosi, in the midst of discussion on measures to curb global warming.

The Catholic Church long ago made its peace with evolution, but the same cannot be said of House Republicans. Jack Kingston of Georgia, a 20-year veteran of the House, is an evolution denier, apparently because he can’t see the indent where his ancestors’ monkey tail used to be. “Where’s the missing link?” he said in 2011. “I just want to know what it is.” He serves on a committee that oversees education.

In his party, Kingston is in the mainstream. A Gallup poll in June found that 58 percent of Republicans believe God created humans in the present form just within the last 10,000 years — a wealth of anthropological evidence to the contrary.

Another Georgia congressman, Paul Broun, introduced the so-called personhood legislation in the House — backed by Akin and Representative Paul Ryan — that would have given a fertilized egg the same constitutional protections as a fully developed human being.

Broun is on the same science, space and technology committee that Akin is. Yes, science is part of their purview.

Where do they get this stuff? The Bible, yes, but much of the misinformation and the fables that inform Republican politicians comes from hearsay, often amplified by their media wing.

Remember the crazy statement that helped to kill the presidential aspirations of Michele Bachmann? A vaccine, designed to prevent a virus linked to cervical cancer, could cause mental retardation, she proclaimed. Bachmann knew this, she insisted, because some random lady told her so at a campaign event. Fearful of the genuine damage Bachmann’s assertion could do to public health, the American Academy of Pediatrics promptly rushed out a notice, saying, “there is absolutely no scientific validity to this statement.”

Nor is there is reputable scientific validity to those who deny that the globe’s climate is changing for the worst. But Bachmann calls that authoritative consensus a hoax, and faces no censure from her party.

It’s encouraging that Republican heavyweights have since told Akin that uttering scientific nonsense about sex and rape is not good for the party’s image. But where are these fact-enforcers on the other idiocies professed by elected representatives of their party?

Akin, if he stays in the race, may still win the Senate seat in Missouri. Bachmann, who makes things up on a regular basis, is a leader of the Tea Party caucus in Congress and, in an unintended joke, a member of the Committee on Intelligence. None of these folks are without power; they govern, and have significant followings.

A handful of Republicans have tried to fight the know-nothings. “I believe in evolution and trust scientists on global warming,” said Jon Huntsman, the former Utah governor, during his ill-fated run for his party’s presidential nomination. “Call me crazy.”

And in an on-air plea for sanity, Joe Scarborough, the former G.O.P. congressman and MSNBC host, said, “I’m just tired of the Republican Party being the stupid party.” I feel for him. But don’t expect the reality chorus to grow. For if intelligence were contagious, his party would be giving out vaccines for it.


Published 7:30 AM, 21 Aug 2012

The Shadow Minister for Communications, Malcolm Turnbull, hopped into your correspondent yesterday for describing Coalition policy on the NBN as “madness” (The Coalition’s NBN policy is madness, August 20).

Well, I read his response (Alan Kohler’s NBN fantasy, August 20) and we had a long talk last night. Sorry Malcolm, it’s still crazy, and you should still ditch the policy, although of course you’re not, as you argued forcefully to me, an idiot – not that I said you were.

The basic problem, as I see it, is that on this subject the Coalition will go to the election with a plan that won’t be very popular, based on saving money. Everybody’s looking forward to getting fibre: Malcolm Turnbull is going to be the party pooper, coming just as things are getting interesting and pulling the plug on the stereo.

Worse, the money saved – Turnbull estimates $20 billion – can’t be spent elsewhere or used to bring down taxes, because it is capital expenditure, not operating expenditure.

Campaigning on saving money is not usually recommended, and I’m not sure the next election will be fought on the need to bring down government debt, since it’s not too high in Australia to begin with. “Labor waste” might be an issue, but then you have to argue that connecting 93 per cent of Australian homes and businesses to a 21st century optic fibre network is wasteful, which of course is what Malcolm Turnbull does argue.

The Coalition’s policy is based on the proposition that Telstra will quickly agree to hand over its copper access network to the NBN Co for the same money as it is currently getting for transferring customers from it and renting ducts and pipes.

I must admit that is possible. Telstra chief executive David Thodey is a very nice man and it probably wouldn’t enter his head to use the fact that the new minister has made an election promise to screw him for more money.

Indeed, Turnbull argues that Telstra will get its money earlier because a fibre to the node network would be faster to do than fibre to the premise, so Thodey will jump at it. Maybe. But it took years of intensive work to negotiate the existing deal and changing won’t take a couple of days. And in any case the NBN will be a gigantic machine in full flight by this time next year and turning that particular Queen Mary will be not be easy or fast.

So then it comes down to a question of how far advanced the NBN will be by the time Malcolm Turnbull can become its minister and can stop the rollout and negotiate a new deal with Telstra.

It’s true that the latest corporate plan says 54,000 premises will be “connected” by July next year. The election will be held in the second half of next year and I’d say the earliest the rollout could be stopped – unless Turnbull simply declares force majeure, “down tools” – is the following July, when 487,000 homes will be connected.

My estimate of more than a million comes from another definition: “commenced or completed”. It seems to me that’s a more relevant number since the Coalition has said it will fulfill existing contracts.

The plan says 758,000 premises will be commenced or completed by 31 December 2012. There is no estimate for that figure by the middle of next year, but I understand the internal forecast is 1.2 million. The number of premises to be “passed” by July 2014 is 1.1 million, and since it takes 12 months to build each module, that’s consistent with that same number being commenced in July 2013.

It’s possible, I guess, for the new government to pay the contractors to go away and leave those million or so homes and businesses with copper access instead of fibre. But those people will all know they are about to get fibre and might regard paying to have them NOT get fibre as pretty wasteful too.

So Malcolm Turnbull will have to argue that, yes, 1.2 million homes and businesses have fibre available but they can’t use it because we’re going back to copper to save money, although Telstra will get the same amount as before (maybe – if they’re nice, that is).

The other problem, which I forgot to mention yesterday, is that maintenance of the copper access network is now $600-700 million a year as it deteriorates. Over 20 years that adds up to about $15 billion, wiping away most of the savings from using the copper in the first place. The $20 billion in savings is just a guess anyway: it probably won’t be that much because savings never are what you think they’ll be.

The final thing to remember is that the Coalition is not proposing to go back to the way things were. The NBN Co would still be a monopoly provider of wholesale broadband access – it would just do it with fibre only as far as neighbourhood cabinets and then copper the rest of the way – for most but not all, since more than a million premises will already have fibre all the way.

Also, the new minister would have to sack the entire senior management of the NBN Co and hire a whole new team because Mike Quigley and the rest of them all believe passionately in fibre to the premises. And he would have to tell all the service providers that have been gearing up to FTTP, including Telstra, that – terribly sorry – you have to change all your planning to FTTN now.

Very messy, it seems to me. Lots of pain, little gain.



Malcolm Turnbull

Published 12:52 PM, 20 Aug 2012 Last update 12:52 PM, 20 Aug 2012

Alan Kohler’s column today “The Coalition’s NBN policy is madness” is pure fantasy.

He says that by the time of the next election the NBN will have “about a million” connected to its fibre to the premises network.

Yet the NBN Co’s own corporate plan, released with great fanfare only a few weeks ago, says that by June 30, 2013 there will be 54,000 premises in total connected to FTTP with only 341,000 premises passed. So even if he confused “connected” with “passed”, he is out by a factor of 3.

So where does the 1 million figure come from? Alan should explain it or publish a correction.

Further, it is far from certain that the 54,000 figure target will be met by June 30 next year – after all as at May 2012 the NBN Co had less than 4,000 premises connected to the FTTP network.

As far as Telstra is concerned a move to FTTN does not require major revisions to the deal with NBN Co (other than securing access to the D side copper) and would advantage Telstra because more customers would be switched over to the NBN network sooner and so the payments to Telstra would be accelerated with a consequent higher NPV. As an example BT in the UK passed 7 million households with its FTTN rollout in just the last year.

His argument about a “two tier internet access regime” fundamentally misunderstands the nature of the internet, the whole point of which is to enables the propagation of signals over a range of networks and channels. The internet is a network of networks – fibre, copper (of many varieties), HFC, wireless, satellite – and it is that interoperability which is one of is greatest strengths. The issue for customers is not the particular medium of communication connecting their device to the internet but rather the quality of the experience. If bandwidth is sufficient for their needs, then whether it is on HFC or VDSL or GPON or wireless or a combination of some or all of them is not particularly relevant if it is relevant at all.

It has to be remembered that the speed of connection is determined by the slowest segment of the network between the customer’s device and the server with which they are connecting which in many cases may not even be in Australia.

And as for saying I should ensure the NBN is delivered “on budget” – if only there was a budget! The NBN Co has no budget. It has a project the scope of which was given them by the government and they regularly provide estimates of what it will cost. There is no budget in the sense of a cap or ceiling on what they can spend. It is exactly like asking a builder to build you a house with no contract other than to pay him what it costs.

Malcolm Turnbull


Published 12:52 PM, 20 Aug 2012 Last update 3:21 PM, 20 Aug 2012


Former treasury boss Ken Henry has told business the Australian dollar is likely to remain high for the foreseeable future.

Dr Henry told the Australian Industry Group forum in Canberra it would not be prudent to bank on an early sizeable depreciation in the exchange rate.

“There is no silver bullet that is going to rapidly devalue the dollar and make things easier for Australian businesses in the immediate future,” he said.

Many trade-exposed businesses have suffered under the strong currency, which has been lifted by strong demand for the nation’s commodities and economic troubles in the US.

However, Dr Henry said Australia’s economic policy framework – which includes a floating exchange rate, the independent setting of monetary policy and competition policy – had served the nation well.

“These things have helped to protect Australia from the impact of several economic shocks emanating from overseas,” he said.

“It is important that we will build on them and resist the temptation to dismantle parts of the framework, even though we may perceive from that dismantling a short term advantage.”

He also said local businesses must start acting like regional entities, by becoming part of regional supply chains, partnering with similar or complimentary foreign firms or moving parts of their operations to Asia.

Dr Henry conceded that moving components to Asia was not easy because such plans often attracted criticism from unions and local communities.

But he pointed to the example of Australian bootmaker Blundstone, which prospered from moving part of its business offshore despite being criticised.

“It is clear today that if Blundstone had not shifted elements of its manufacturing to Asia five years ago, it would have gone out of business completely,” he said.

Separately, Mr Henry also said his soon to be released Asia white paper will be a strategic plan for the decades ahead, not a shopping list of spending proposals.

Tax debate could improve

The debate about Australia’s tax system needs to be a “hell of a lot better”, Dr Henry believes.

He told the business forum that if governments don’t lead change, change will be forced upon.

“You want to avoid putting yourself on a burning platform,” he said.

“In order to get to the place that we need to get to, we are going to need a hell of a lot better debate.”

Dr Henry agreed with current Treasury Secretary Martin Parkinson, who in a speech last week warned governments may have trouble meeting demands for spending from the existing tax base.

Dr Henry said commonwealth tax revenue, as a ratio to gross domestic product, would not return to where it was before the global financial crisis – at least not under the present system.

He said state revenues were in a much worse position, describing it as “fragile”.

“At the moment, it looks okay for the resource rich states, and for the others it looks desperately bad,” Dr Henry said.

“But even for the resource rich states, at some stage the royalties will deliver less revenue than they have been delivering. They are going to front a grimmer fiscal reality as well.”

by: By Tim Ayres

IT might seem like everything’s made in China these days but chances are, you use something every day that’s made in Sydney’s western suburbs – whether it’s the automatic transmission in your car, a scratchie, a solar panel or a smoke alarm.

As trains and motorways are funneling commuters east, work is already under way at the thousands of small and medium-sized factories and workshops often hidden from view.

Near Liverpool, workers at HPM make the only Australian-made powerboards, sockets, smoke alarms and switches you’ll find at your local hardware store.

At Minto, workers churn out Streets paddle pops and Cornettos. At Bella Vista, workers at ResMed make devices to treat sleep apnea.

Of course, making things in Sydney has its challenges. Across Australia, manufacturers are being squeezed by the high Australian dollar and low-cost overseas competitors.

As western Sydney is a manufacturing centre, the current squeeze on the industry disproportionately hurts the region. 

Jobs are being hit.

Two hundred jobs were lost when multinational Reckitt Benckiser closed its West Ryde factory, sending the manufacture of its iconic Australian brands Mortein and Dettol overseas. The Huntington factory that supplies Australia with its scratchie instant lottery tickets is soon to shut, with the work being sent overseas. Sixty jobs are going there.

Hundreds of jobs will be lost when Shell stops refining oil at its Clyde site.

The same story of job losses is playing out on a smaller scale at many workplaces across western Sydney. If we don’t pay attention to our manufacturing base in western Sydney, we face watching it fade away. Good, skilled trades jobs in manufacturing industries with a future are critical to the economic success of the region.

Wages from good blue-collar jobs sustain suburban economies, while local manufacturing creates supply chains that spread economic benefit well beyond a single enterprise.

With real commitment from industry and government, Sydney’s west can be a smart and skilled manufacturing centre in the competitive global economy.

We need to aim for a future in which an auto component maker in Blacktown can win a contract against one in Guangzhou.

We won’t get there on labour costs: we’re lucky to live in a country where people earn fair wages. It will be through investment in technology, innovation and skills; a commitment from industry to employ managers who are capable of leading their enterprises in a tough environment; and a serious effort from government.

Government’s role is not to prop up outdated technologies and industries. But it should be fighting for good local jobs, supporting the industries of the future and creating the environment for them to thrive.

We haven’t seen much of that lately: 17,000 manufacturing jobs have been lost from NSW since the O’Farrell government took office. Barry O’Farrell may not have personally sacked those workers but nor has he been defending them nor putting up the big ideas for the NSW manufacturing jobs of the future.

A place to start would be the North West Rail Link. The state government has trumpeted the project’s potential to create jobs, yet has set no local-content target.

The North West Rail Link could be a driver of manufacturing jobs in western Sydney in steel fabrication, in rolling-stock components, in air-conditioning units, in concrete.

Or tenderers could just send all of that work – for thousands of Aussie jobs – overseas.

In Granville, workers at Knorr-Bremse produce brake sets for trains – I’d love to see them get the chance to supply the trains that run on the new train line. But I’m not holding my breath.

A mandated ratio of apprentices to skilled tradespeople on North West Rail Link contracts would deliver some serious investment in training and valuable opportunities for young people to take up a trade.

There are many elements to building a thriving manufacturing future for western Sydney. Business, unions, training organisations, residents and government at all levels have a role to play.

But it won’t happen by itself. 

Tim Ayres is NSW secretary of the Australian Manufacturing Workers Union

Print Article15 August 2012 7:23am

 Industrial tribunals have responded well to the challenges posed by social media misconduct, and employers shouldn’t be afraid to take action in appropriate cases, says barrister Elizabeth Raper.

In grappling with the topic, courts have been “making sure they undertake a balanced exercise in terms of the need to sanction outside-work conduct, against the legitimate interests of those that are responsible for the conduct when it falls in the workplace, for which employers can be vicariously liable”, Raper told the 20th Labour Law Conference in Sydney this week.

The main issue that has been brought into “stark relief” from Facebook cases in the industrial arena is the extent to which conduct outside of work can be the subject of sanction by an employer, she says. “So related to this issue is whether the conduct is private, and whether it’s outside, therefore, the purview of employers.”

She says social-media-related misconduct cases tend to fall into three categories:

  • crossing of “professional boundaries” via social media;
  • social media misconduct outside of work – for example making disparaging comments online, or harassing or intimidating co-workers; and
  • social media as a contemporaneous record of misconduct – for example where an employee claims to be sick, but posts photos from the party they’re attending, or posts evidence online of misconduct that occurred in the workplace.

According to Raper, decisions to date reveal a similar evolution to that seen with sexual harassment cases in the 1980s, and email pornography cases in the 1990s. In all three areas, “courts have gained over time a greater understanding of the technology, and then have considered the misconduct in the light of the wider obligations of employers to protect their workforces”.

Further, as with these earlier cases, “there’s a lesson to be learned from all parties in terms of employers understanding what their rights and obligations are, and also employees working out, ‘When does the conduct overstep the mark and can be the subject of sanction?'”

Out-of-hours misconduct

Employers struggle with the issue of sanctioning employees for misconduct outside of work, but there are some instructive decisions to guide their actions, Raper says.

The 1996 Federal Court decision in McManus v Scott-Charlton, for example, shows that “When considering the question of obeying lawful direction and the extent to which an employer can give a direction or sanction an employee for conduct outside of work, it was said rightly that when you’re considering the conduct, it’s about matters affecting work”, she says.

Tribunals expect employers to provide “some legitimate level of supervision of the relationship of employees inter se… in order to protect the interests of an employer from adverse effects that can flow from employee misconduct”, she says.

“So the cases in terms of dealing with misconduct generally reveal that derogatory comments on Facebook will give rise to sanction.”

In determining whether sanctions are fair and warranted, an independent umpire will specifically consider “the extent to which the conduct has affected the employer’s business, and whether the relationship of trust and confidence has been compromised”, Raper notes.

In the case of O’Keefe v Good Guys, it was legitimate for an employer to sack a worker who said intimidating and damaging things about a colleague on Facebook from his home, she points out.

“In that decision Deputy President Swan quite rightly said, ‘Let’s see what the employee handbook says about being courteous and respectful. Let’s deal with the issues about how an employee shouldn’t behave. [And] putting aside whether there was a policy in place that dealt with Facebook or not, or email, or inappropriate outside-work conduct… let’s deal with common sense that would dictate that one could not write and therefore publish insulting and threatening comments about another employee in the manner which occurred’.

“What the decisions reveal is that conduct on online socialising sites, just like conduct outside work, will be dealt with in the way that the tribunals have always dealt with misconduct.”

Social media “not a private conversation at the pub”

Raper says she is often asked how “making derogatory comments on Facebook is any different from having a private conversation down at the pub on a Friday night, when you’re just having a whinge”.

“The difference is this: there’s a wider audience; it can be on-sent to other people and out of context; it’s often communicated to work colleagues; there’s a permanent record; and it can be republished time and time again. By virtue of those things it’s different from the old conversations that we used to deal with.”