Louise Hall Courts

December 1, 2011

THE wife of a Gold Coast businessman accused of running a tax avoidance scheme cannot refuse to answer questions about her husband's alleged illegal activities, the High Court has ruled.

In a majority opinion, the court held that the common law does not recognise a privilege against spousal incrimination.

The case arose when Louise Stoddart was called before the Australian Crime Commission to give evidence in an examination of her husband, Ewan Alisdair James Stoddart in April 2009.

Mrs Stoddart, who worked part-time as a secretary in her husband's accounting practice, refused to answer questions about her husband, claiming that as his wife she had the right not to give evidence that might incriminate him.

Under the wide-ranging powers of the Australian Crime Commission Act, a person can be forced to answer questions which tend to incriminate themselves, however the rights of a spouse are not canvassed.

Mrs Stoddart applied to the Federal Court for an injunction restraining the examiner from forcing her to answer questions which might expose Mr Stoddart to a criminal conviction. She lost, but the decision was overturned when three appeal judges found that the common law right against spousal incrimination did exist and that the act did not negate it.

Yesterday the High Court upheld an subsequent appeal by the commission, giving it the green light to compel interviewees to answer questions or face five years' jail.

In a dissenting judgment, Justice Dyson Heydon relied upon an English case from 1817 in which Ann Willis was called to give evidence that she had married George Willis, to prove he was bigamous.

Justice Heydon said spousal privilege did exist at common law and he went on to argue that it could be characterised as a human right. ''It preserves a small area of privacy and immunity from the great intrusive powers of the state, and those who invoke them,'' he said.

The ruling will not affect criminal trials in NSW, where family members can be excused from testifying.

An Associate Professor at Melbourne Law School Jeremy Gans said the decision was likely to affect bodies such as royal commissions and anti-corruption watchdogs.

Terry O'Gorman, a criminal barrister and the president of the Australian Council for Civil Liberties, said that the ruling would have ''significant consequences''.

''It's a very surprising decision in that it overturns what criminal lawyers understand to have been the law for in excess of a century,'' he said.

High Court rules wife must give evidence

Richard Baker, Nick Mckenzie

December 1, 2011

The Reserve Bank bribery scandal has spread. Photo: Jessica Hromas

THE Reserve Bank bribery scandal has spread to the Australian government's trade agency, with documents revealing Austrade met a notorious Indian arms dealer hired by Securency and knew of payments to a Vietnamese spy chief to secure contracts.

Austrade documents obtained by the Herald raise serious questions about whether some of its top officials knew about alleged multimillion-dollar bribes being paid by RBA subsidiaries Securency and Note Printing Australia across Asia. They show:

Austrade's senior trade envoy in Vietnam, Elizabeth Masamune, was told by Securency in 2001 that a firm controlled by Anh Ngoc Luong, a colonel in Vietnam's Ministry of Public Security, would act as a ''post box'' between the RBA firm and Vietnam's central bank. Ms Masamune worked closely with Colonel Luong, who the Australian Federal Police alleged in July had received up to $20 million in suspected bribes from Securency.

Austrade's regional director for south-east Asia, David Twine, met Indian arms dealer Vipin Khanna in May 2007 to discuss work for Securency. They met after Mr Khanna's passport was seized by Indian police following the revelation that he benefited from corrupt oil deals with Saddam Hussein.

A secret May 2007 deal arranged by Mr Twine for Austrade to perform due diligence services on Securency's foreign agents and to "provide a watching brief on specific organisations important to Securency (such as agents, customer governments and other 'influencers')''. A confidential Austrade memo states that both special ''assignments'' would be recorded in a ''discrete agreement'' and not documented in the agency's official contract with Securency.

The Herald has learnt Mr Twine left Austrade in October after his position was abolished in a restructure.

In a statement last night, Austrade said it was unable to answer specific questions because of the ongoing police investigation and court cases.

Austrade ''has fully co-operated with the investigation … there are no allegations of impropriety against Austrade and no Austrade employee has been charged in relation to the AFP bribery investigation,'' it said.

Austrade assisted Securency International and NPA in 49 countries between 1996 and 2009. Two former senior trade commissioners, Paul Martins and Gustavo Ascenzo, joined Securency as sales executives. Mr Martins later returned to Austrade.

The federal government has blocked moves for an independent inquiry into corrupt dealings by the RBA subsidiaries and Austrade's role in their affairs since the Herald exposed bribery concerns in May 2009.

Documents released under freedom-of-information legislation show Ms Masamune, now Austrade's general manager for east Asian markets, knew in 2001

that Securency had financial dealings with Colonel Luong, who had been hired to help persuade Vietnam's central bank to switch its entire banknote issue from paper to plastic supplied by the RBA firm.

Despite Australia introducing foreign bribery laws in 1999, no one in Austrade warned Securency that it might be acting illegally by making payments to Colonel Luong and his firm, CFTD.

Internal Austrade documents indicate senior trade officials knew of Colonel Luong's connections to Vietnam's Ministry of Public Security as early as 1998. In 2007 and 2008, Austrade formally warned the RBA and Securency that Colonel Luong was a senior officer in the intelligence and security agency.

The financial aspect of Securency's dealings in Vietnam is referred to in emails between Ms Masamune and former banknote executive Cliff Gerathy.

In January 2001 Ms Masamune advised Mr Gerathy that she would ''stay in touch with Anh [Colonel Luong] and follow-up on the letters he needs to write to you regarding other financial issues''.

Two months later, Mr Gerathy sent an email to Ms Masamune stating: ''In the case of Vietnam, we are doing more than we have for any other country, especially in terms of financial commitment, which we are regarding as an investment.''

Securency and NPA, along with nine former executives, including Mr Gerathy, have been charged with bribing officials in Vietnam, Malaysia, Indonesia and Nepal in order to win banknote contracts.

Banknote scandal widens

November 30, 2011

Opinion

EDITORIAL

"Rudd's words would push Labor where it needs to go." Photo: Kate Geraghty

WHEN Kevin Rudd speaks about the present state and future prospects of the Labor Party, the messenger is also to some extent the message. That alters and qualifies everything he says. Rudd's analysis, though, is correct.

Labor's century-long evolution has included regular crises. It is at another such point now: either it embraces reform or it dies of irrelevance. If Labor wants to know what an unreformed future looks like, it can examine its moribund NSW branch - an increasingly conservative, inward-looking and timid organisation, led in Parliament without vision or idealism, and dominated by vested interests in the trade union movement and associated factions. Its overriding concern: to cling to what little power it still has. Branch members' concerns are irrelevant. The party is living proof of Robert Michels's iron law of oligarchy - that even the most democratic organisations become oligarchies over time, as the realities of power, the need for efficiency and leadership, overwhelm ideals.

Rudd proposes to re-energise the party membership by giving members the power to elect top officials and delegates to the national conference. That would undermine the oligarchs' power, which is why unions and factional players oppose it. When unionism was truly a mass movement, with half the workforce enrolled, their pre-eminence within the workers' party had a meaning. Those days are past but the party has not changed to reflect the fact and now suffocates under their institutionalised dead weight. Rudd, who is not factionally aligned - unlike the Prime Minister, Julia Gillard - recognises the need for change that goes deeper than Gillard's plan for US-style primaries to select candidates.

But Rudd is not blameless on party reform. As prime minister he did try to reduce the factions' sway but also presided over one of the most stage-managed and least outwardly democratic party conferences. If that is his idea of reform, it is pretty unimpressive. His abiding flaw as prime minister - a desire to control and micro-manage and to exclude dissent - in effect undercuts the argument he is making now for more consultation and democracy. Factions and unions, whatever their shortcomings, at least provide a counterweight to a single domineering individual, critics can argue.

The argument has weight but if all it does is preserve the status quo, it is self-defeating. Without reform, Labor will die. Rudd's past actions may suggest otherwise, and his present words may serve an unstated leadership agenda. But they would push Labor where it needs to go. The party should listen.

On Labor, Rudd is right. But …

November 28, 2011

"Julia Gillard has put [Peter Slipper] into the biggest job in the Parliament" ... Opposition Leader Tony Abbott. Photo: Alex Ellinghausen

THE Opposition Leader, Tony Abbott, has defended the Coalition turning a blind eye to the alleged indiscretions of Peter Slipper over many years, saying the party was in the process of pushing the Queenslander out of Parliament when Labor swooped.

Labor has struck back at recent attacks by the opposition that Mr Slipper, who quit the Liberals and replaced Harry Jenkins as Speaker, was a compromised character.

There are questions concerning Mr Slipper's personal behaviour and his use of parliamentary allowances, and Labor is anticipating the drip feeding of a Coalition dirt file on him in subsequent weeks.

The Minister for Foreign Affairs, Kevin Rudd, said yesterday that if such indiscretions abounded, ''what have they sat on for such a long period of time,and why hasn't Mr Abbott brought all this forward?''

''He said on the record, within the last 12 months, that Mr Slipper has a complete clean bill of health on these questions,'' Mr Rudd said. ''Now is Mr Abbott saying to us that he has been dishonest in this period of time?''

Mr Abbott dismissed the point. ''The difference is that we were trying to manage Peter Slipper out of the Parliament. Julia Gillard has put him into the biggest job in the Parliament,'' he said.

In a shock ambush last week, Mr Jenkins announced his resignation and Mr Slipper filled the void. He was on the outer with his Queensland Liberal-National colleagues and was going to lose his preselection to the former Howard government minister Mal Brough.

Mr Abbott urged the LNP to back off until closer to the election so Mr Slipper would not leave the party and serve out his term on the crossbench.

His defection means Labor has a 76-73 majority after picking up an extra vote. The buffer has insulated it against losing a byelection and means it needs just three of the four crossbenchers upon whom it has depended.

Barring mishaps, it should now last the full term.

''Abbott can no longer claim there's some sense of chaos and the government's about to fall,'' a senior minister said yesterday.

''It's gone, it's a huge lift.''

The Tasmanian independent Andrew Wilkie, who has had the government over a barrel with his demand it legislate for poker machine reforms or lose his support, warned the government yesterday not to burn him.

Mr Wilkie conceded his bargaining position had been weakened but remained assured after the Prime Minister, Julia Gillard, told him she intended to honour the agreement.

 

Phillip Coorey

Sydney Morning Herald chief political correspondent

Abbott tries to deflect Slipper finger-pointing

November 27, 2011

"The public has had a gutful of what currently passes for much of our national political debate" ... Kevin Rudd.

KEVIN RUDD has called for sweeping reform of the Labor Party to prevent it becoming a ''marginalised third party'' in a move that attempts to hijack Prime Minister Julia Gillard's own agenda for change.

''There is a real danger that we simply fade away as other progressive parties around the world have done, becoming a shadow of their former selves against the aggressive conservative onslaught of a resurgent right,'' Mr Rudd said at the launch of a book written by a former Labor staffer in Brisbane yesterday.

He warned: ''We are fools if we do not understand that the public has had a gutful of what currently passes for much of our national political debate.''

A spokeswoman for Ms Gillard declined to comment on the speech, saying the Prime Minister had made a point of not commenting on anyone's offerings before next weekend's national conference.

But senior Labor sources said Mr Rudd's ideas were entirely his own and he had not drawn from a post election review of the party conducted by the elder statesmen John Faulkner, Steve Bracks and Bob Carr.

The Foreign Affairs Minister called for wide-ranging reform of party structures, including the direct election of all delegates to the national conference and the executive body, a more radical suggestion than Ms Gillard's reform agenda.

Ms Gillard has said she wants a trial of US-style primaries to preselect candidates in some seats, the introduction of online membership recruiting to meet a target of 8000 new members next year and the system of three rotating national presidents replaced with one three-year president. The changes are designed to stop Labor members from becoming frustrated and drifting towards the Greens and activist groups such as GetUp.

Mr Rudd noted that his core concern ''is how to reform our party so that it has a future, not just as a diminished political rump, not a marginalised third party of Australian politics given the opportunism of the Greens, but as the force of progressive politics for our nation''.

The conference will debate other contentious policies including a conscience vote on gay marriage, overturning a ban on selling uranium to India and asylum seekers.

Mr Rudd said the Labor Party's values had been ''lost in the mud of factional intrigue'' and called for the national conference to be ''a genuine public contest of ideas''.

He later asked his followers on the social media site Twitter for their suggestions on how to re-energise the party. If Labor could not reform itself then ''it cannot reform the nation'', Mr Rudd said.

He wants the national conference to be held every year - instead of every three years - so the party is more regularly updated.

Labor MP reactions to Mr Rudd's speech ranged from anger to amusement. ''We all know why Kevin does anything,'' one said. Another MP wryly noted that Mr Rudd was not known for being consultative during his prime ministership.

In the speech, Mr Rudd also took a swipe at the government's efforts to communicate its achievements, saying the public ''is tired of spin''.

''We must be a party that is honest, truthful, straightforward - warts and all.''

He criticised the former Keating government minister Graham Richardson, who has been critical of the government, saying Mr Richardson was an inappropriate role model for people interested in politics.

''I was troubled recently to hear that the latest Young Labor national conference had former senator Graham Richardson as a guest presenter,'' Mr Rudd said.

''To hold Senator Richardson up as a moral exemplar for the next generation of our party and our movement is just wrong. The author of 'Whatever it takes' - good grief.''

We'll fade away, Rudd warns

November 26, 2011

Opinion

'The pressure is squarely on Abbott to come up with a new strategy.' Photo: Stefan Postles

IT WAS a throwaway line, but it summed up the end-game of a political strategy that was all about blasting Julia Gillard out of office, as quickly as possible. ''See you next year at The Lodge for drinks,'' a cheerful Abbott told reporters who attended the Opposition Leader's Christmas drinks at this time last year.

Whether it was achieved by wooing one of the independents who helped Gillard form minority government, or blasting out a Labor MP accused of behaving badly, or fuelling speculation of an imminent challenge to Gillard by Kevin Rudd, didn't matter.

Abbott was one vote away from the prime ministership and - courtesy of his relentless assault on Gillard's integrity and Labor's ineptness - a country mile ahead in the polls. His was a ''government-in-waiting'', and it all made for a very disciplined party room.

A year on, Abbott's Coalition is still mightily ascendant in the polls, but the game has changed. The coup that delivered the speakership to the disaffected Peter Slipper has transformed this contest, giving Gillard a two-seat buffer and dramatically increasing the odds that the Parliament will run full term.

That means Gillard has a better chance of building a recovery from the foundations of recent weeks. It certainly means the pressure is squarely on Abbott to come up with a new strategy in the months ahead. No wonder he is crying foul.

As Abbott describes it, the departure of the much-respected Harry Jenkins, and his replacement by Slipper, is just another ''squalid manoeuvre'' from Gillard's Machiavellian playbook. The PM deployed the ''Sussex Street death squads'' of Labor's Sydney machine to dispatch a good, decent and loyal man for the sole purpose of shoring up her own position.

More than that, she chose to replace him with a man who, in Abbott's words, had been a problem for the conservative side of politics for years. ''But he's now Julia Gillard's problem and I think she may well find that this is an interesting one,'' he told the Nine Network yesterday.

There are, to be sure, several people on the Labor side who think the recruiting of Slipper could blow up in Gillard's face and, if and when it does, be the catalyst for the much-anticipated push to bring back Rudd. ''It looks clever on the surface, but I suspect it's not going to end well,'' is how one veteran put it yesterday.

But the simple truth is that the Abbott account of what took place on the last sitting day of the year does not stand up to scrutiny. It may also be the case that any implosion of the Slipper speakership will not change the numbers of the floor of the House. Even so, it's a very high-risk play.

Gillard invited suspicion when she gave the most minimalist answer when asked by Abbott about her involvement in any discussions on replacing Jenkins with Slipper. All she said was that the first she knew of Jenkins' intentions was when he came to see her at 7.30 on Thursday morning. This beggared belief, the Coalition claimed. Surely she was the architect of a strategy to persuade Jenkins to move and encourage Slipper to rat?

It fell to Tasmanian independent Andrew Wilkie to make some sense of what had happened. ''It was always on the cards that something like this would occur,'' he told the ABC's Fran Kelly yesterday. ''It was often spoken about, the possibility of the speaker stepping down and Peter Slipper taking on the role. If anything, it was becoming increasingly likely, given the way the LNP [Liberal National Party] has been treating Peter Slipper in his own seat. In some ways, this is a problem for Tony Abbott of his own making.''

From the moment Slipper stood, with Labor's backing, to become the deputy speaker after the election, it was apparent the Queensland MP had designs on the main role. And from the moment Jenkins threatened to quit the post after being rebuffed in a vote on the floor in May, it was clear that his commitment to the role was qualified. Back then, Jenkins confided his frustrations to Simon Crean, another with a reputation for putting the party first.

Anthony Albanese, Labor's chief parliamentary tactician, didn't need to court Slipper or pressure Jenkins. All he had to do was move swiftly when Jenkins decided he wanted to reconnect with Labor after four years in the speaker's chair.

Jenkins visited Crean the day before he quit, giving rise to speculation that the former leader played the go-between role in facilitating the play. He did no such thing. Jenkins merely repeated that he was becoming increasingly frustrated by the stricture he had willingly accepted - that he divorce himself from party politics.

Abbott's failure to anticipate the move is all the greater because he walked away from the original agreement for parliamentary reform that would have seen the speaker's vote paired with the vote of the deputy speaker - an agreement that meant any change in who sat in the chair had no implications for the numbers of the floor of the Parliament.

It is greater, too, because Abbott could have installed Rob Oakeshott as speaker after the election if he been willing to accommodate the Port Macquarie independent's insistence that he still be able to initiate motions and legislation on behalf of his constituents.

Around midday on Thursday, Abbott rang Oakeshott and offered to back him on the original terms. While Oakeshott says he politely declined, the approach took some of the edge off Abbott's claim yesterday that he would never do what Gillard did in this instance. Even so, there are four potential downsides for Gillard. First, while I accept Jenkins' explanation on face value, the appearance this week was of the kind of ruthlessness that killed Rudd's prime ministership and damaged Gillard's standing. Even if it wasn't one, it smacked of an execution.

Second, Slipper may perform badly in the role when Parliament resumes in February and, as a consequence, add weight to the Abbott charge that the government is in perpetual crisis. The best that can be said here is that Slipper has had a long apprenticeship. He was first elected to Parliament in 1984 and has served as an acting speaker since February 2008. He knows the rules.

Third is the risk that he will not see out the term and be brought down by some allegation of wrongdoing or rorting. Already, there is speculation that his enemies within the Liberal National Party in Queensland have been given the go-ahead to throw whatever mud they have been accumulating on the man who conceded his first speech as speaker that he was ''not perfect''.

Of course, if it does emerge that Slipper has been profligate with his expenses, or something far worse, any wrongdoing would have occurred while he was a member of the Coalition. As one Labor MP puts it: ''If anything untoward went on, it happened on their watch, and they turned a blind eye.'' But the question of whether Gillard did due diligence would arise.

(However, even if Slipper were forced to stand down as speaker, the odds are that he would take a seat on the crossbenches and not vote with the Coalition, rather than quit the Parliament and force a by-election.)

Finally is the downside that has been overlooked so far. By embracing a flawed maverick from the other side of politics to slightly bolster her numbers - rather than backing Labor's next most qualified alternative, Anna Burke - Gillard has opted for pragmatism over principle and, in the view of several of her MPs, surrendered the high moral ground. ''We're all about hunting rats down - not bringing them into the fold,'' one said.

This concern will be compounded should Gillard bring back her Malaysian people-swap legislation - knowing full well that, even if it passes the lower house, it will be blocked in the Senate.

She has also taken some of the edge off her great achievement in the designated year of decision and delivery: that she has made minority government work, and delivered on the many commitments she made to those on the crossbench.

It's no surprise that she told these MPs - Wilkie, Oakeshott, Tony Windsor and the Green's Adam Bandt - what was happening on the speakership before she told the Labor caucus; and no surprise that she reassured Wilkie at the outset that this is not some insurance policy in the event she fails to meet his expectations on poker machine reform.

Gillard's people skills have helped in ticking off two of the three nominated priorities when she became prime minister - a price on carbon and the mining tax - and much more besides. In all, 254 pieces of legislation have been passed in a Parliament Abbott says doesn't work.

Abbott has fuelled the damaging impression that this is a Greens-led government, but the fact is that progress has been made on many fronts because Gillard has dealt in good faith with those on whose support she ultimately relies. As Oakeshott puts it: ''The big difference between this and other parliaments is that there is no too-hard basket. Even when things get hot, issues are dealt with on their merits - and that's the way a parliamentary democracy should work.''

Next year, both leaders move into new territory and new challenges, with workplace relations looming as one of the biggest. No one - not Gillard, not Abbott, and certainly not Peter Slipper - should be feel too confident about who will hold the ascendancy this time next year.

Michael Gordon is national editor.

Bitter aftertaste ruins Abbott toast to future

The furore over the elevation of Liberal rogue turned independent MP Peter Slipper to Speaker of the House of Representatives continues to boil.

On Thursday the Opposition claimed Labor was trashing the Westminster system by appointing a non-Labor Speaker.

But the Government has taken a swipe at Opposition Leader Tony Abbott, saying he is acting hypocritically after allegedly offering the job to independent MP Rob Oakeshott.

Mr Slipper replaced Labor MP Harry Jenkins against the wishes of his former party, whose members have taken to dubbing him "a rat".

The move gives the Government a two-vote majority on the floor of the Lower House.

Leader of the House Anthony Albanese says Mr Abbott made an offer to Mr Oakeshott on Thursday morning.

"I noticed Tony Abbott saying this morning that he wouldn't have done something like this," Mr Albanese said.

"Well, Tony Abbott and his team spent all of yesterday morning trying to coax an independent, any independent would have done, to stand for the position of Speaker on the floor of the House of Representatives."

Liberal frontbencher Joe Hockey says that is not true.

"Tony Abbott didn't ring Rob Oakeshott yesterday asking him. Not at all," he said.

But Mr Oakeshott says otherwise.

"It's a matter for Joe to look himself in the mirror and ask himself why he's making that up," Mr Oakeshott said.

"About 12:15pm yesterday Mr Abbott rang my office. I accepted the call. He made an offer and I thanked him and rejected it.

"That's the facts. It's up to Joe to try and spin it otherwise, and I guess it's up to the Australian community to decide who they want to believe."

Mr Abbott's office insists Mr Oakeshott approached the Opposition and that Mr Abbott called him and told him directly the Coalition would not be nominating him.

But Mr Oakeshott says at no time did he approach anyone about seeking the speakership.

He released a statement saying Deputy Opposition Leader Julie Bishop, as well as some crossbench MPs, approached him about seeking the speakership.

Ms Bishop says the discussions centred around whether Mr Oakeshott could muster enough support from the other independents to get nominated and that he asked Mr Abbott to call him.

'Good guy'

Audio: Fever pitch furore over new Speaker (PM)

While Coalition MPs rail against their erstwhile colleague, Chief Government Whip Joel Fitzgibbon has nothing but praise for the new Speaker.

"Peter Slipper is a good guy. He's proven to be a competent person in the chair," he said.

Mr Fitzgibbon says the Coalition has itself to blame because it drove the MP to jump ship.

"Peter Slipper was certainly pushed by his own party and those who were out to take his seat, so they created this dynamic for themselves," he said.

"You didn't have to be rocket scientist to work out that if an opportunity presented itself Peter Slipper would take it.

"He's a survivor and my view is he'll continue to survive."

Controversy magnet

Video: Labor's political plays discussed (Lateline)

The Speaker's electoral neighbour, long-time Liberal Alex Somlyay, says Mr Slipper repeatedly attracts controversy.

"We dread opening the local newspaper because of the controversies that he manages to get himself involved in," he said.

"There are a lot of things that we have disagreed on in the past and a lot of those things concern expenditure of public money.

"Peter was always the highest, the big spender in the Parliament, and of course that brought us a lot of bad publicity."

Locals sent a petition to Parliament in September calling for a full audit of Mr Slipper's travel entitlement claims during the past decade.

Mr Abbott says Mr Slipper is now the Government's problem.

"Peter Slipper is the Prime Minister's Speaker and all questions about Mr Slipper, his travels, his use of entitlements, his conduct, should go to the Prime Minister," he said.

Coalition accused of Speaker job hypocrisy - ABC News (Australian Broadcasting Corporation)

November 25, 2011

Opinion

The new prime ministerial pooch, Rueben, was passed carefully from hand to hand, like a newborn.

In between bouts of appreciative cooing, Labor MPs on Wednesday night downed party pies, onion tarts and beverages on the lawns of The Lodge. Christmas drinks for the caucus after a bone-jarring 12 months.

The longest night had finally yielded the mining tax. Host Julia Gillard cheerfully rattled off the achievements of the year, but unbeknown to most of the guests, another ''achievement'' was unfolding back at the parliamentary precinct.

Hot seat: Manager of opposition business Christopher Pyne talks with the newly installed Speaker Peter Slipper during question time yesterday. Photo: Andrew Meares

Speaker Harry Jenkins, mulling his future in the abstract for some months, and more intensively over the past few weeks, was building up to a momentous 24 hours.

Late on Wednesday, according to party sources, Jenkins sought the ear of his old mate and fellow Victorian Simon Crean.

Insiders insist Jenkins' mind was already made up at that point. He was out. Crean declined to comment when contacted by The Age last night.

Architect: Anthony Albanese. Photo: Alex Ellinghausen

Having spoken to Crean, late on Wednesday Jenkins ascertained whether or not the Governor-General would be at home if he called round before 9.30 the next morning.

Harry Jenkins was about to give the manager of government business, Anthony Albanese, his most devout wish: another number for Labor on the floor of the House of Representatives.

This would be the ultimate crash or crash-through politics. Controversial Queensland Liberal Peter Slipper, a figure of derision and loathing within Coalition ranks, was about to ascend to the speakership. Given the dancing partner of choice is Slipper, some in Labor fear the end result will be crash.

Government sources say Albanese has held Slipper carefully in his back pocket since the rancorous negotiation that installed the renegade Queensland Liberal as deputy speaker.

Not explicitly of course, that would be improper, but implicitly. The vibe. A love that cannot be spoken. That kind of thing.

The government watched on as events inside the Liberal Party pushed Slipper inexorably Labor's way.

Despite the best efforts of Tony Abbott and federal party officials to slow what was looking increasingly inevitable - a defection, most likely to the crossbench, in the first part of 2012 - the natives in Queensland were restless. Slipper's preselection would be challenged, whatever the consequences for Abbott, and that was that.

Labor of course had its own contingencies to sweat on. Some in the government were concerned the New Year might bring charges against Craig Thomson - the NSW MP who ran into trouble with his trade union credit card.

And there was the cursed pokies reforms - next policy heartburn off the rank. Labor is divided. The Greens running interference on the Left, Abbott not giving an inch. When it came to Andrew Wilkie and his foot stamping on pokies, insurance would be useful.

So rather than wait passively, and watch, Labor stole a march.

In near complete secrecy - many Labor colleagues who had known Jenkins for decades knew nothing of his intentions before yesterday morning - events surrounding the speakership began to play out over the past couple of weeks.

Some Labor people believe Jenkins was leaned on, heavily, to be a good soldier for the Labor Party.

Others insist that kind of rough housing would have backfired, given Jenkins has a tendency to stand on dignity. ''He would have said get stuffed,'' insists one of his parliamentary friends.

Was there reward in the offing? Like father, like son. Jenkins' father, Harry senior, vacated his seat and the speakership in 1985 and, courtesy of an agreement with Bob Hawke, was given an ambassadorial post to Spain.

Jenkins' increasing discomfort in his role was known to confidants. ''He wanted to be an independent Speaker, but the circumstances don't allow that,'' one of his friends told The Age yesterday.

He contemplated resigning in May when a critical vote went against him. But the desire to be Speaker trumped hurt feelings.

But not any more. The desire to be a good soldier apparently trumped the desire to be Speaker.

Julia Gillard insisted she knew nothing of Jenkins' decision until their conversation at 7.30 yesterday morning - although that seems difficult to believe, given those in the know were discussing the looming events sotto voce late Wednesday afternoon.

Albanese - the architect of the Slipperhood - said he had no discussion with Jenkins until yesterday, and no discussion with Slipper.

The other camp, naturally begs to differ.

The Queensland Liberal National Party director, Michael O'Dwyer, could barely contain his outrage, saying Slipper had significant questions to answer.

O'Dwyer claimed Slipper had disclosed ''to a third party that he was intending to resign from the party during the forthcoming state election campaign to purposely create a serious distraction for his state colleagues''.

He claimed evidence had been presented ''confirming that Mr Slipper had been planning for some time to leave the Liberal National Party, and this evidence confirms Mr Slipper's actions today were pre-meditated and in train for an extensive period of time''.

Peter Slipper New Speaker Of House

November 25, 2011

Opinion

EDITORIAL

THE resignation of the speaker of the federal Parliament, Harry Jenkins, appears to have caught MPs on both sides by surprise. Unexpected too, given the constant, head-banging aggression of this Parliament, was the warmth and sincerity of the applause he received from both sides of the chamber. Jenkins has been, as all sides acknowledge, an excellent speaker, one of the few in our history to have earned the respect of all his peers. His departure is a significant loss.

Though the debates in this Parliament have been close, raucous and bitter, Jenkins's management has been a genuine improvement on what, for the most part, went before. The Parliament has had some excellent speakers - some, but too few. It would be a great advance for politics and the status of the Parliament if Jenkins's impartiality could become an entrenched tradition. It may well do so during this term at least. Peter Slipper, who was elected Speaker yesterday, is a controversial figure. He is acceptable to Labor because he has fallen out with his party and lost preselection. Despite the venom he arouses in Coalition ranks, he has served Parliament as deputy speaker with similar impartiality.

The event may be a surprise but the politicking behind it is not. Jenkins told Parliament he had become impatient with the restrictions of the position. He wanted to participate in policy and parliamentary debate. That is reasonable and should be respected. It is unfortunate the speaker feels hampered as an elected representative.

But there is another motive, not of Jenkins's making. His departure for the backbench is as fine a manoeuvre as Machiavelli could have wished for. With Jenkins back in the Labor caucus and a Liberal elected to replace him, the numbers on the floor have shifted the government's way. It is no longer so beholden to the independents to keep its majority. In particular, Andrew Wilkie no longer holds the whip hand in negotiations over the poker machine legislation which has been causing the government pain. Wilkie's ultimatum - that the law must pass by early next year or he will withdraw his support for the government - may lose its potency. We say "may" because who knows what Wilkie's reaction will be to his loss of relevance, or what thrills and spills await Labor and Julia Gillard as their parliamentary high-wire act continues?

Whether he genuinely wanted to quit, Jenkins's resignation is possibly the most partisan act he has been responsible for as speaker. His legacy may be secure but the way he is leaving the post tarnishes it a little. Labor thinks it has pulled a swiftie on the opposition. Tony Abbott, by his angry reaction, thinks so too. He calls it unprecedented, and it is - almost. But Labor's tactic does recall Gough Whitlam's attempt in 1974 to shore up numbers in the Senate by appointing Vince Gair, the Democratic Labor Party senator, as ambassador to Ireland. Gillard will want her piece of cleverness to end better than the Gair Affair.

Coalition gets a world view

THE term maiden speech suggests the speaker is a newcomer. Arthur Sinodinos, who joined the Senate this month and gave his maiden speech on Wednesday, is nothing of the kind. Over two decades from the mid-1980s Sinodinos was a member of the Coalition's inner sanctum, perhaps John Howard's closest adviser, and acknowledged universally as one of the sharpest minds in politics.

His speech offers insights into Coalition thinking from one long familiar with it. Sinodinos is no market purist, though he favours full-scale development and a big Australia - the objective Kevin Rudd embraced and Julia Gillard stepped away from. Sinodinos rightly acknowledges the environmental challenges this race-for-growth approach presents, arguing that a richer economy is better able to meet them.

Somewhat surprisingly for a Liberal (at least one from this century), he hints at an interventionist approach to industry - policies that encourage smart manufacturing, and home-grown exploitation of Australian research successes, including in alternative energy. Of course, in the much larger Australian economy that Sinodinos advocates those objectives might be achieved without excessive government intervention. One of the best arguments for a bigger Australia is that a larger domestic market would make it easier for local start-ups to succeed, and fewer Australian ideas would have to look overseas for financial backing.

He is optimistic, too, about social cohesion being maintained alongside a large-scale immigration policy which rapid growth would require. A larger economy, he says, would allow new areas, particularly in the north of the country, to be more closely settled, and more global cities to be created. People the north, in other words - an old idea for which Sinodinos puts 21st century arguments.

Sinodinos sketches his ideas with a broad brush - it is a maiden speech, after all, not a budget. But he offers a synthesised view of the direction the country should take, into which he manages to fit the Coalition's present scattered policy fragments - no mean feat. The opposition's platform given coherence and shape is a welcome advance.

Gillard fixes up her numbers

November 25, 2011

Opinion

Of the three loves of Harry Jenkins' life, the one that peaked when he made Barack Obama laugh, was - in the end - the one that ran a distant third.

Jenkins' dream was always to follow his father's footsteps and become the Speaker of the Federal Parliament. He did it so well that, according to Liberal National MP Bruce Scott, he single-handedly lifted the ratings of question time on TV.

''Wherever I travel, I find people have become avid watchers of question time and I think it is because you are in the chair,'' Scott told Jenkins yesterday.

Former Speaker Harry Jenkins is congratulated by Malcolm Turnbull. Photo: Andrew Meares

What Harry lacked in panache, he more than made up for with a kind of homely sincerity and good humour that was as authentic as it was, occasionally, awkward. It showed when he bade Obama farewell, and wished him a safe return ''to your cheese-and-kisses'' and the ''billy lids'' - and then translated his rhyming slang.

If he sometimes mangled the language, he left no one on either side of Parliament in any doubt about his impartiality from the Speaker's chair.

It helped he had a forensic knowledge of the rules of the game, honed by watching his old man, Dr Harry Jenkins, who was Speaker during Bob Hawke's first term as PM.

But, as Victorian Liberal Russell Broadbent noted in Parliament yesterday, Jenkins had two priorities that transcended his attachment to the job that delivered the big salary, the best office in the Parliament and the chance to hobnob with presidents and queens.

The first was his family and the people of Melbourne's outer north-east who elected him. The second was to what Broadbent called his ''other family'', the Australian Labor Party. It was always, opined Broadbent, bigger than his love of being Speaker.

When Jenkins told Parliament he wanted to renew his Labor connections it wasn't, as one Liberal noted, because he missed having a beer with the caucus colleagues. It was, those close to him insist, because he could see the bigger picture.

Yes, he wanted to participate in internal policy debates, having already declared his passionate support for pokie reform. And yes, he could see the potential for Peter Slipper to be recruited as his successor and for Labor to have an extra number in a hung Parliament.

What made the announcement puzzling - and invited the idea he had been either offered an inducement to leave, or threatened with retribution if he stayed put - was the notion that someone could walk away from the job they had always aspired to fill, and just when those on both sides thought he was doing a tough job well.

But Jenkins, 59, had come close to pulling the pin before, the fourth anniversary of his ascension seemed the right time to move, and most colleagues accepted his explanation as genuine. The irony, however, was not lost on many MPs.

One man has walked from the job that delivered personal glorification because he felt a higher loyalty to his party; another, having felt betrayed by his party, walked out on it when opportunity beckoned for personal glorification.

Harry Jenkins Resigns, Moves To The Backbench

By Jeremy Thompson and Ben Atherton

Updated November 24, 2011 14:15:22

A desperate Opposition rearguard action failed to stop renegade LNP MP Peter Slipper from being installed as Speaker of the House of Representatives in a stunning Labor coup today.

A day of extraordinary political drama began when Labor Speaker Harry Jenkins announced his resignation.

The move pitched Mr Slipper into the spotlight, with the Labor Caucus wasting little time in nominating him for the Speaker's role - a move which will effectively give Labor one more seat in the House of Reps and lessen its reliance on independent and Greens MPs.

Opposition Leader Tony Abbott hit back by threatening to throw Mr Slipper out of the party if he accepted the job.

The vote to install Mr Slipper was scheduled for 12:30pm AEDT and Mr Slipper announced that he would accept Labor's nomination - effectively casting himself into the political wilderness and guaranteeing his expulsion from the Liberal ranks.

What the Speaker switch means

• the Government has a stronger position on votes in the House of Representatives
• to pass legislation, Labor now only needs three instead of four votes out of Tony Windsor, Rob Oakeshott, Andrew Wilkie, Adam Bandt, Bob Katter and Tony Crook

But manager of Opposition business Christopher Pyne stepped up to nominate a succession of Labor MPs for the job instead.

All declined; Anna Burke, Dick Adams, Sid Sidebottom, Sharon Bird, Kirsten Livermore, Steve Georganas ... the list went on.

Finally Mr Pyne gave up the unequal task and Mr Slipper's election to the Speaker's role was confirmed.

In remarks to the House, Mr Slipper confirmed he would be an independent Speaker in the Westminster tradition and would relinquish his membership of the LNP.

Ms Burke, the Member for Chisholm, was later elected Deputy Speaker, defeating Bruce Scott 72 votes to 71.

Mr Scott, the LNP Member for Maranoa, was nominated by the Opposition, which suggested that if Ms Burke declined the role of Speaker she would not be suitable for the deputy's role.

In May 2011, Mr Jenkins said he would have to consider his position after one of his rulings was defeated.

However, Opposition Leader Tony Abbott promptly put forward a confidence motion in Mr Jenkins, which was passed.

Coup

It is understood the Government had been negotiating with Mr Slipper for some weeks, deliberations that were kept secret, and surprised his former colleagues today.

The coup strengthens the Government's position in the Lower House and means independent MP Andrew Wilkie will not be able to carry out his threat to bring down the Government should his bill on poker machine reform be defeated.

Mr Slipper's political future had already been under a cloud, with calls in Queensland's Liberal National Party for him to be sacked over a series of internal and ongoing disputes.

He angered party bosses by appearing with Foreign Minister Kevin Rudd on the same day former prime minister John Howard was launching an LNP candidate's campaign.

Reports had indicated he was unlikely to retain pre-selection for his Queensland seat of Fisher.

Related Story: Parliament in turmoil as Speaker resigns

Related Story: Harry's gift: a seat, a vote, and order from chaos

Related Story: Tributes flow as Speaker resigns

Deal with renegade Liberal boosts Labor's numbers - ABC News (Australian Broadcasting Corporation)

By ABC's Annabel Crabb

Posted November 24, 2011 13:00:51

Photo: Harry Jenkins resigned from the speakership this morning.

Just when you thought this parliamentary year had entirely run out of fizzy-pop, there it was. Harry Jenkins, resigning from the speakership, relinquishing the nicest office in Parliament House, and causing thereby a fairly considerable power shift in the House of Representatives.

His stated reason? He had become frustrated by the speakership's obligation to remain aloft from partisan political matters.

"My desire is to be able to participate in policy and parliamentary debate, and this would be incompatible with continuing in the role of Speaker," he told an electrified chamber.

Now, a man who resigns in order to spend more time with his policies is a man of whom further questions probably need to be asked. That this impulse should strike Mr Jenkins at exactly the same time as the concerted attempt by the Queensland Liberal/National Party to disown its difficult and profligate son Peter Slipper further strains the notion of coincidence.

The result? A disaffected Slippery (already held in pretty poor odour among his colleagues) will commit party treason and defect, in return for an office of dignity and respect, a more accommodating pay packet, and the right to pour brandies for visiting bigwigs.

Slipper has remained in the chamber doggedly directing traffic on the floor of parliament pending what will presumably be his formal election to the speakership some time after lunch. Quite possibly, he was loath to step outside, lest he encounter an angry mob of his erstwhile colleagues.

Ambassador Jenkins (if I may be so bold as to rehearse the title) will return to the Government benches, boosting Labor's voting numbers by one, and thus shifting the Poker Machine Of Damocles from its customary position six inches above the Prime Minister's head.

What lies ahead? I think it is reasonably safe to predict several things:

1) A flood of recovered memories from the Opposition benches about irregularities in Mr Slipper's conduct. Colleagues tend to forgive such failings, but adversaries never do, and one can expect all of the savagery of Labor's Mal Colston fixation to be visited upon Mr Slipper from this point on.

Mal Colston was the Labor senator whom John Howard's Coalition duchessed with the Senate deputy presidency in 1996.

Speaking this morning, Tony Abbott likened Labor's recruitment of Mr Slipper to Whitlam's sensational purchase of Vince Gair in 1974, in which the DLP senator was offered the ambassadorship to Ireland in order to free up his seat.

"This is a Government in crisis," he told reporters, and sternly refused to discuss the Colston analogy on the grounds that it was "ancient history".

(Abbott history, one may conclude, features a wrinkle in time around about the mid-'90s, when dinosaurs roamed the earth, and mudskippers edged from the primordial slime with nascent hopes of one day helping John Howard flog off a third of Telstra.)

2) A Christmas bonus for Anthony Albanese, who has been working on today's coup for a bit and who - despite historically chilly relations with Julia Gillard - was this morning able to present her with something money can't buy: An extra vote. I don't know what Tim's got planned, but it's not going to beat Mr Albanese's gift. Mr Albanese's speech at yesterday's censure motion – read it here - was also one of the strongest of any minister, all year.

3) A distinct devaluation in the Independent currency in the House of Reps. From now on, instead of having to win four extra votes for any given issue (out of Windsor, Oakeshott, Wilkie, Bandt, Katter and Crook) the Government will only have to win three. If today's events had taken place this time last week, for example, the Government could have saved itself the $100 million or so it handed to Andrew Wilkie in concessions on the mining tax (which would additionally have saved them all the consequent fuss and bother it took to get the, er, Bandt back together)

Luck, or planning? A bit of both, really.

After a year and a half during which it often seemed as if some unseen cosmic hand was timing events of random misfortune to coincide most grievously with unforced strategic errors from the ALP, November 2011 seems to have brought a rearrangement of sorts.

Some vast pieces of legislation tucked away. Confusion to her enemies. The Prime Minister's year has ended with the audacity of hope.

Annabel Crabb is the ABC's chief online political writer.

Harry's gift: a seat, a vote, and order from chaos - The Drum (Australian Broadcasting Corporation)

November 23, 2011

Opinion

Click to play video

Royals' day of Danish promotion

Mary and her prince begin their day in Melbourne with a special message delivered from a little girl.

A strange giddiness overtakes the otherwise relatively sober when they find themselves in the presence of royalty, but Opposition Leader Tony Abbott quite lost his grip yesterday when welcoming Crown Prince Frederik and Australian's own royal highness, Crown Princess Mary of Denmark.

''In the past,'' brayed Mr Abbott to a luncheon in honour of the couple in Parliament House, Canberra, ''Sir Joh Bjelke-Petersen was probably considered Denmark's greatest gift to Australia.''

This may have come as a surprise, even to Sir Joh himself were he still alive. The former Queensland premier and steward of what turned out to be one of Australia's most corrupt state governments was born in New Zealand in 1911 (his parents had emigrated from Denmark).

The Danish royal couple are greeted by Prime Minister Julia Gillard in Canberra. Photo: Andrew Meares

Abbott plunged on. ''Subsequently, some may have nominated Joern Utzon, the designer of the Opera House, as Denmark's greatest gift to Australia.'' That was more like it, though the unfortunate Utzon came up against the New South Wales Liberal state government of the corrupt Robert Askin.

Utzon packed his bags in 1966, vowing never to return, and was not invited to the official opening in 1973.

The crown prince and the crown princess sat through Mr Abbott's welcome with remarkable aplomb. They had, after all, been treated already to a gushing introduction by Prime Minister Julia Gillard, who spoke of their marriage as ''a modern fairytale''. ''A beautiful young woman meets a handsome prince and they live happily ever after,'' Ms Gillard said. Tim Mathieson was nowhere in sight.

Even Ngunnawal indigenous elder Janette Phillips, delivering a welcome to the country, was swept away. Princess Mary, she declared, had given Australian women everywhere fresh hope that ''Prince Charming really could be out there''.

But Mr Abbott outdid all, declaring the former Mary Donaldson's marriage to Crown Prince Frederik was a pretty good effort for a girl from Taroona High School in Hobart, a rather better achievement, he said, than that of fellow Taroona graduate, the opposition leader in the Senate, Eric Abetz.

Mr Abbott did not mention that Senator Abetz was a gift to Australia from his birthplace in Stuttgart, Germany.

Mr Abbott the fitness fanatic paid special tribute to Prince Frederik for his ''remarkable distinction of running a marathon in three hours and 22 minutes''.

''Many of us in this building would wish to emulate that feat, sir,'' said Mr Abbott, whose best time is 3:47 - although his most recent effort took almost five hours.

The crown prince could not quite help himself when he rose to accept the accolades. He pointed out it was actually three hours and six minutes, and he had done it six times.

The prince then treated guests - and Mr Abbott, a climate change sceptic - to a gentle lecture about the need to face up to a future where population growth and climate change were the great challenges. Denmark, through research and development, carbon pricing and the introduction of alternative energy sources, had become one of the most energy-efficient nations in the world, he said. There had been no growth in power consumption while its population had ballooned, and it had reduced carbon emissions by 15 per cent since 1990.

He was too elegant to add, though he could have, surely: ''Take that!''

Tony Wright

National affairs editor of The Age

Princess Mary and Prince Frederick in Australia

Updated November 23, 2011 21:15:47

Photo: Senator Arthur Sinodinos called for a bigger Australian population to meet the economic challenges of the future. (AAP: Alan Porritt)

Related Story: Sinodinos endorsed for Senate vacancy

Related Story: Howard's chief of staff makes Senate push

Related Story: Helen Coonan retires from Senate

John Howard flinched as his former right-hand man Arthur Sinodinos declared he wanted to hold a memorial service for the Coalition's failed WorkChoices policy.

Senator Sinodinos, who replaced former frontbencher Helen Coonan who retired as a NSW Liberal senator this year, was one of the architects of the controversial workplace relations policy when he was chief of staff for then prime minister Howard.

"Let me conduct a brief memorial service for the industrial relations policy formerly known as WorkChoices," Senator Sinodinos told a packed upper house during his first speech to parliament.

In the public gallery's first row, sitting next to the senator's wife Elizabeth and son Dion, Mr Howard visibly flinched, perhaps mindful that the 2007 election defeat was partly blamed on the policy.

The new senator said under WorkChoices the award safety net was stripped back and this had been a mistake.

"The truth is we failed to prepare the ground for such a major reform," Senator Sinodinos said.

"Some employers abused that freedom."

Opposition Leader Tony Abbott is on the public record saying WorkChoices is "dead, buried and cremated" but the Government continues to taunt the Coalition about the policy.

Covert power

During the Howard years Mr Sinodinos was often lauded as the "the real deputy PM" and ranked in media power lists as the "most covertly powerful Australian".

Senator Sinodinos, who gave up a lucrative gig with National Australia Bank to take up the Senate spot, heaped praise on his old boss.

"John Howard is a fighter, someone who was prepared to take the knocks for what he believed, pick himself up and have another go," he said.

"Observing John Howard convinced me that politics is not worth a candle unless you are fighting for something."

Despite reportedly advising Mr Howard in government to back a carbon emissions trading scheme, Senator Sinodinos said the Labor Government's carbon tax was a "giant churn of taxpayers' money".

"In the absence of international action, it will only harm Australian industry and send greenhouse emissions offshore," he said.

Senator Sinodinos was equally critical of the Government's mining tax, saying it should be "put on hold to avoid a double whammy on the resources sector".

He also suggested that, when it is affordable, Australia should consider a new sovereign wealth fund modelled on those of Singapore and Korea.

"Such a fund could also kick-start a genuine venture capital market so more Australian inventions and innovations are commercialised here rather than abroad," he said.

Big Australia

Paying tribute to his Greek heritage, he advocated a bigger Australian population, saying it was needed to meet the economic challenges of the future.

"Mr President, I'm not a Polyanna, I do not doubt that a bigger Australia poses environmental, planning, infrastructure and other challenges, but a richer economy is also better equipped to deal with such matters," he said.

"For me the social dividend in particular of a big Australia is more jobs, jobs and jobs. This is the best income redistribution known to man.

"I am proud of my Greek heritage, which is the basis of Western civilisation," Senator Sinodinos said, as the gallery erupted in laughter.

"And you should still be paying for it, and you will."

Elizabeth Sinodinos blew a kiss to her husband below when he thanked her for her love and support.

"She's tougher, smarter and more discerning in her judgments than I am," he said.

Dressed in blue with a pretty bow in her hair, his restless toddler daughter Isobella had to be escorted out of the gallery during the speech in a staffer's arms.

"To my children Dion and Isobella, I hope you will forgive my absences and in coming years learn that serving others is a noble cause," he said.

Liberal Party top brass turned out to hear the senator's speech including Mr Abbott, Joe Hockey, Malcolm Turnbull, Peter Dutton, Bronwyn Bishop, Sophie Mirabella and Christopher Pyne.

The former finance and treasury department official was Mr Howard's chief of staff from 1997 to 2006 and was recognised for his public service with an Order of Australia in 2008.

ABC/AAP

Howard flinches during Sinodinos maiden speech - ABC News (Australian Broadcasting Corporation)

 Paul Sheehan Sydney Morning Herald columnist

November 14, 2011

Opinion

Illustration: Michael Mucci

At the weekend I went to a talk by one of the most impressive public intellectuals in Australia, Pierre Ryckmans. After the session, I asked him about the deteriorating economy of Europe.

''It's incredible,'' he replied. ''They are living in a fantasy.''

He summed it up with this: the European social democrats, and their allies in the bureaucratic class, have been living in a fantasy world that is now unravelling.

The country of Ryckmans' birth and adolescence, Belgium, has not had a federal government for more than a year (more than 500 days, in fact). Belgium has been run by a caretaker prime minister.

Brussels, the capital of Belgium and the base of the European Union, is split politically and demographically by a fault line between the (more productive) Flemish-speaking north and the (less productive) French-speaking south, with a large, rapidly growing and unemployment-plagued Muslim minority in the mix.

The first major bank failure in this year's euro zone crisis was in Belgium, when the Dexia group had to be bailed out by taxpayers. Belgium's public debt as a percentage of gross domestic product is almost 100 per cent, the highest in Europe outside Greece and Italy, both now in crisis.

So, the EU's policymakers in Brussels don't have far to look to find the failure of the intrusive, micro-managing, social-engineering, welfare-dispensing, pension-absorbing public sector - the obese state - that is the root cause of Europe's malaise.

Government spending is more than 50 per cent of GDP in the euro zone, while government revenues are about 44 per cent of GDP, according to the latest figures from Eurostat.

This deficit spending has been exacerbated by a great structural flaw, the power grab by the bureaucratic class and social democrats when they expanded their reach via the introduction of a single currency, to be managed by 17 different central banks, responsible to 17 different parliaments, reflecting 17 different cultures.

To keep this flawed edifice going, the entire euro zone ignored its own basic premise when the euro was set up in 1999: that a member state's budget deficit should not exceed 3 per cent of GDP and total public debt not exceed 60 per cent of GDP. Penalties would be imposed for breaching thresholds.

Today, the combined budget deficit of the euro zone is about 6 per cent, twice the accepted maximum limit set down by the euro agreement. The combined public debt is 85 per cent of GDP, more than 40 per cent higher than the safety threshhold the euro members set for themselves. No penalties were imposed.

The supposed paragon of thrift, Germany, which has been setting the agenda in the euro zone, has itself been in breach of the euro zone guidelines, with a 3.3 per cent budget deficit and 83 per cent public debt.

Herein is the fantasy: to maintain prosperity and growth, governments in several countries spent and borrowed trillions of euros to pay for bureaucrats, pensions, welfare payments and social programs. Greece is the most extreme version of this folly.

The real cost of the subjugation of reality by bureaucracy is revealing itself. The weaker support beams of the euro are fracturing.

The weekend resignation of Italy's longest serving prime minister in the past 60 years, Silvio Berlusconi, followed the attrition that took the former prime minister of Greece, George Papandreou, just days earlier. These two leaders and their governments were not toppled by voters but by a combination of policy demands from Germany and France and by the global credit market, now deeply sceptical that Europe can contain Italy's debt burden.

Berlusconi is a billionaire and Papandreou is a member of a Greek political dynasty, but both were rendered mere chaff in the wind by forces outside their own countries.

What has not yet been put into sufficient consideration is the deeper problem, the extent to which the euro zone malaise will place strain on democracy itself.

To resolve the crisis, members of the euro zone will have to give up basic rights of sovereignty to a centralised European technocracy with much greater monetary powers. Or some members will withdraw from the euro zone, with the certainty a deep recession will accompany the process.

If there is a middle way, closer to the status quo, it has yet to be revealed with credibility. The status quo is broken. The euro experiment has failed. The European Central Bank, fixated by its legal mandate of restraining inflation, is actively exacerbating the impetus to recession. Whatever happens, Greece is heading for a depression, Italy is in recession, and the entire euro zone will be in recession soon enough.

If all this seems far distant from Australia, it is not as distant as it appears. The same affliction that is dragging down Europe - excessive, unproductive government spending - has become a problem since the federal Labor government inherited a budget surplus and zero public debt in 2007, and then a global financial crisis one year later.

The federal budget deficit now exceeds the euro-zone guideline of 3 per cent of GDP. Public debt has risen dramatically from zero to about 25 per cent of GDP.

The size and scope of government has expanded. Farmers and rural communities have become concerned over basic land and water rights. A regressive and pervasive carbon tax on the economy has been passed into law.

Union militancy has been unlocked via the Fair Work Act. Productivity growth has sunk to near zero. The government has produced a conveyor-belt of gold-plated policy debacles.

Whatever excesses greedy corporate executives, gouging banks and casino capitalism have added to the mix, it is obese government that pushed Europe into financial crisis. Australia's government has thickened in the past four years, a process that really needs to stop.

Europe shows how a fat public sector consumes an economy

November 19, 2011

Opinion

EDITORIAL

THE polls are yet to let voters have their say but it is likely that most Australians will approve, initially at least, of the Gillard government's open-armed embrace of the US alliance, and this week's announcement of closer military co-operation. Certainly the move will be popular in the Northern Territory where an enlarged military base and routine visits by thousands of cashed-up US Marines will bring solid economic benefits.

The pictures day after day of President and Prime Minister greeting, smiling, embracing, shaking hands and the rest reflect a genuine friendship between two leaders, but also a broader and deeper relationship between two nations which share many values and a long history of co-operation and military alliance.

But Australia's acquiescence in what will in effect be a low-level US military build-up in the NT goes beyond a simple gesture of friendship. The decision is a significant turn in the direction of Australia's foreign policy. This country had been negotiating a potentially tricky course part-way between two powerful countries, the US and China. The helm has now been turned decisively to one side.

There has been a good deal of diplomatic camouflage around the move. Australia has not agreed to a new US base on its soil. The marines will be stationed at an Australian base and their movements subject to Australian approval. That is presumably intended to satisfy those who, like the Greens and some on Labor's Left, fear or resent any reduction in Australian sovereignty.

In practice, though, Australian approval for US troop movements or operations is unlikely ever to be withheld. In effect, the US has a new base but quite possibly paid for by Australians. The opposition would like to call a spade a spade and declare the base a joint facility. That shows admirable candour but it may not be a vote-winner. Alliances may be close, but closeness has its limits.

China has played up its own opposition to the decision, too. But the annoyance it has expressed in official English-language publications should be understood in context. Australia is a long-standing US ally. Beijing may not have expected this particular move but it will not be a complete surprise. Much of the heat in the Chinese response can be discounted but its awareness of a fundamental change in the direction of Australian foreign policy cannot.

Is this latest strategic move a case of Australia bringing the US in on its side to face China? Or is it the US bringing Australia onside? The analyst Hugh White believes it is the latter, and points to previous ambivalence within the Australian defence and diplomatic establishment towards following Washington too closely in its confrontation with Australia's biggest trading partner. Certainly the move suits Washington's and the Obama administration's interests.

It consolidates the US presence in the Pacific and helps redefine a more aggressive US stance towards China. In doing so, Obama moves the focus of US foreign policy from Bush-era priorities in the Middle East towards what his administration chooses to define as a threat - a China rising in economic prosperity and military power. The extent and intensity of his criticism of Chinese shortcomings - in trade, currency manipulation and territorial claims, not to mention the old favourite, freedom - during his recent trip make it clear that facing China down is central to his refurbished foreign policy agenda.

In Australia, the move initially seems surprising for Labor, a party on the side of politics which has been most suspicious of great-power alliances and concerned to assert Australian independence and self-reliance in foreign policy. But in recent years Labor has reshaped itself in several areas to fit a more conservative mould. Just as it is determined to impress voters with its fiscal conservatism, so too is it keen to show itself willing to embrace a less assertive foreign policy.

The fundamental question, though, is: does the move suit Australia's interests? If, god forbid, it came to a showdown between the US and China, Australians would, without any doubt, choose to side with the former - regardless of our close economic ties with the latter. But though relations between the US and China may have difficulties - some of them severe - things are a long way from conflict. Australia's friendship with the US is well known. It is not taken for granted, either here or in Washington. We have nothing to prove. Similarly, this country has been a good friend to China during its recent rapid economic development, and would benefit greatly from continuing good relations. Australia would have had much to gain from keeping to its middle course between two great powers. Having taken sides early, though, we have taken a risk. We will find out in coming years how much was at stake in that premature decision.

What else are allies for?

FORGIVE us for being suspicious but wasn't it a bit too convenient that our reporter Dylan Welch just happened to be scanning a gutter 100 metres from Parliament House and found the full schedule for Barack Obama's visit? We've read Le Carre and Clancy and Ludlum and the rest. We know what goes on. Men in trench coats with hats pulled down over their eyebrows are constantly to be found rummaging through the bins and gutters of snowy northern capitals in search of dead drops. They are laughably easy to foil with red herrings such as this one. We were meant to find this document, with its second-by-second details of the President's itinerary and whom to ring if there's an emergency and he needs air strikes or a full missile launch. This book is a fake, you mark our words. If we tried to ring up US Air Combat Command on the number in the book and gave them the code word and told them to take out our long-term enemy, we doubt we'd get very far. Besides, now the World Cup is over and said enemy has won it, there is little point. Come to think of it our cricketers could use some extra firepower. Perhaps the missiles could be pointed a few thousand kilometres to the west. Just to try them out, you understand.

Great, powerful - and ever closer

November 18, 2011

''Americans have bled with you for this progress'' … Barack Obama addresses Australian troops in Darwin yesterday. Photo: AP

THE United States President, Barack Obama, has increased the temperature in the Asia-Pacific with a vow to use ''every element of American power'' to establish security, prosperity and human dignity in the region.

With China concerned and angry at what it regards as a provocative push against its own rapidly growing influence, Australia was in lockstep with the new US strategic shift while maintaining it could still have a strong relationship with Beijing as well.

The Foreign Affairs Minister, Kevin Rudd, said last night the US-Australia alliance virtually predates the establishment of the People's Republic of China and the status of the alliance had long been known to the Chinese.

Click for more photos

President Obama's visit: day 2

President of the United States of America, Barack Obama, lays a wreath in the tomb of the unknown soldier at the Australian War Memorial in Canberra. Photo: Marina Neil

''We are not going to have our national security policy dictated by any other external power,'' Mr Rudd said. ''It's a sovereign matter for Australia.

''We don't seek to dictate to the Chinese what their national security policy should be and therefore this must be advanced on the basis of mutual respect.''

He said China had a stated policy of eliminating US alliances in East Asia.

After a 26-hour visit, Mr Obama left Australia last night for Bali, to attend what is now expected to be a tense two-day East Asia summit.

Mr Obama mentioned twice yesterday the sensitive issue of access to shipping lanes in the South China Sea, an issue China does not want discussed at the summit.

After announcing with the Prime Minister, Julia Gillard, on Wednesday plans to increase the presence of US troops, planes and equipment in Australia's Top End, Mr Obama gave an emphatic speech to Parliament yesterday that was clearly aimed at China.

With ''the tide of war'' in the Middle East now receding, America's focus would shift firmly to the Asia-Pacific, a region that, he said, would largely define whether this century would be marked by conflict or co-operation, needless suffering or human progress.

''The United States has been, and always will be, a Pacific nation,'' Mr Obama said.

Australian and US troops had fought side by side in the Pacific over the decades ''so democracies could take root, so economic miracles could lift hundreds of millions to prosperity''.

''Americans have bled with you for this progress and we will never allow it to be reversed,'' he said.

''The United States will play a larger and long-term role in shaping this region and its future, by upholding core principles and in close partnership with allies and friends.

''Let there be no doubt. In the Asia-Pacific in the 21st century, the United States of America is all in.''

A senior Australian official told the Herald that the US push should give backbone to other nations who felt intimidated by China, be it commercially or militarily.

''The whole point of doing this is to say to the rest of the region 'You can stand up' and the Americans haven't left,'' the official said.

A Chinese Foreign Ministry spokesman, Liu Weimin, said: ''When countries are developing relations between themselves, they should consider the interests of other countries and of the region, as well as regional peace and stability.''

Mr Obama said Australia and the US wanted a peaceful and prosperous China and that China had a co-operative role to play, for example, by helping defuse the North Korean situation.

He singled out China's poor record on human rights, free trade, intellectual property theft and its refusal to fully float its currency.

And he warned Beijing that people could not be suppressed forever.

''Democracy and economic growth go hand in hand,'' he said. ''Prosperity without freedom is just another form of poverty.''

The currents of history might ebb and flow but over time they moved decidedly, decisively, in a single direction.

''History is on the side of the free,'' he said.

Pax Americana in the Pacific

By ABC's Barrie Cassidy

Posted November 18, 2011 07:44:04

Photo: Barack Obama and Julia Gillard walk from their joint press conference. (Reuters: Jason Reed)

When United States president Barack Obama talked about American leadership and the Australian partnership in the same sentence, as he did in his speech to the joint sitting of the Federal Parliament, you get the idea.

Given the size, reach and power of the United States, the relationship with Australia has always been uneven.

Try as they might to give a sense that they are not pushovers, Australian prime ministers go weak at the knees when the bells and whistles are brought out at the White House, or when they bring them to these shores.

All of them, whether they are Liberal or Labor, desperately want a good relationship with the president, whether he is Democrat or Republican. They are all seduced to some extent.

That seemed to be the case with Julia Gillard in the early moments of the joint news conference with Barack Obama on Wednesday evening. It wasn't exactly a panic attack, but it did seem as if the magnitude of the event suddenly overwhelmed her. It was quite a shock, given her customary unflappable nature. She quickly recovered and performed well. But it was nevertheless, symbolic of the relativities at work.

Unlike the Kiwis, who once told the Americans where they could stick their nuclear powered warships, Australians have been compliant.

Not always. Bob Hawke once had to tell president Ronald Reagan that he needed to withdraw his support for the testing of US MX missiles in Australia. It was June, 1985, and Hawke was woken up in Brussels on route to Washington to be told by powerbrokers Graham Richardson and Robert Ray that caucus wouldn't cop it.

A young Paul Keating got on the phone and said to Hawke: "Stuff them (the Americans), you know, let's face up to them."

It's the sort of advice you give when you are not the one headed for your first White House experience as prime minister. (The thoroughness of WikiLeaks has never exposed the moment when a prime minister Paul Keating told the Americans to get stuffed!)

Hawke was eventually bailed out by the secretary of state, George Schultz, who found an alternative way to monitor the tests in international waters. He was relieved, but nevertheless annoyed that the Americans had exposed him to the hostility of his own caucus when a perfectly satisfactory alternative existed all along.

Hawke – a Labor prime minister – went on to have a very good working relationship with Reagan – a Republican, every bit as good as the relationship that two leaders from the right, John Howard and George W Bush, enjoyed later on.

The speaker of the US House of Representatives, Tip O'Neill, once said of Reagan to Hawke: "There has never been a more conservative son of a bitch in the White House. But you can't help but like the guy can you?"

Hawke visited the United States five times under the Reagan presidency and he often said he never met anyone who didn't like him.

Australians though didn't have the same regard for Reagan that they clearly have for Obama.

Writing in the Financial Review, Laura Tingle raised the question - in the light of Obama's rock star reception - "would an announcement of an expanded US military presence in Australia … be greeted in quite the sanguine way if it had occurred under the former president?"

Of course, the answer is no. Greens leader Bob Brown heckled the previous president but joined the queue to shake the hand of this one.

President Obama is unquestionably popular in Australia, far more popular than he is at home. That is why Julia Gillard must get some residual goodwill from her close encounters with him. She has been relaxed and comfortable in his presence. The president has quite deliberately sent the right signals through his own body language. It matters more to this Prime Minister than most because she has suffered, almost uniquely, from a lack of status and authority that normally comes with the job. She lacked those qualities because of the circumstances which initially led to her leadership. Then when she went to an election to seek a mandate, she got a hung parliament.

There will probably be a bounce in the polls as a result of the Obama visit, if not in the Government's primary vote, then at least, you would expect, in terms of personal approval rating and preferred prime minister.

But like a summer tan, a White House glow eventually fades. The winters are still long.

Barrie Cassidy is the presenter of ABC programs Insiders and Offsiders.

Aussie PMs can't resist a bit of presidential charm - The Drum (Australian Broadcasting Corporation)

Dylan Welch, National Security Correspondent

November 15, 2011

A file image of Ismail Al-Wahwah speaking at a rally organised by Hizb ut-tahrir in Lakemba. Photo: Steven Siewert

A CONTROVERSIAL Australian sheikh has been left stranded in Jordan after authorities confiscated his Australian passport, possibly in relation to his membership of an international group that advocates a global Islamic caliphate.

Ismail al-Wahwah, a Hebron-born sheikh who lives in Sydney, had finished the haj pilgrimage in Saudi Arabia and travelled to Jordan to visit family.

But upon arrival at Amman airport his passport was confiscated, leaving him stranded.

Advertisement: Story continues below

Sheikh al-Wahwah is a member of Hizb ut-Tahrir, which is banned in Jordan.

The Australian spokesman for the group, Uthman Badar, said the confiscation was likely on behalf of Jordan's chief intelligence agency, the General Intelligence Directorate, and emphasised the ''urgent need of a radical and comprehensive change'' in the country.

Hizb ut-Tahrir, or party of liberation, formed in 1953 in Jerusalem, has spread to more than 40 countries and has hundreds of thousands of members. Its goal is the creation of a global pan-Islamic state.

While it advocates achieving that goal through non-violent means, it has been criticised for the fiery rhetoric of some senior members. Its global leader, Ata Abu-Rishta, in 2006 called for the ''destruction'' of Jews in Israel, Hindus in Kashmir and and Russians in Chechnya.

In 2007, Sheikh al-Wahwah was forced to fly back to Australia from Jakarta after Indonesian authorities refused him entry. He had been planning to speak at an international Hizb ut-Tahrir conference.

A spokeswoman for the Department of Foreign Affairs said it had not received a request for assistance from the Australian embassy in Amman.

Sydney Sheik Stranded | Ismail Al-Wahwah