Debates around Telstra sometimes seem to have their own special form of internal logic, where people argue and apply principles and positions that they would not do in other circumstances.

The government’s plan for Telstra appears to basically be requiring a form of divestiture – a measure which is often suggested, but rarely able to be acted on, when a player or players excessively dominate a particular industry.

Many have highlighted the lack of adequate divestiture provisions in our Trade Practices Act, which would complement existing prohibitions on acquisitions which substantially reduce competition in a particular sector.  Former Democrat Senator Andrew Murray was one who regularly called for such a reform.

There are circumstances unique to Telstra which make such action possible in this case, and even then it requires at least the threat of specific legislation to bring it about.

Coles and Woolworths domination of – and increasing vertical integration within – the retail sector is a commonly mentioned example of unhealthy and anti-competitive concentration of market power, but there is currently little that can be done about it under our existing competition laws.

It would be nice if the debate surrounding the federal government’s plans for Telstra moved beyond the peculiarities of Telstra’s situation and history, and gave stronger consideration to the merits of adopting stronger divestiture provisions in Australia, such as those which currently apply in the USA or Europe.

This comment is undoubtedly true, and I would add that such understanding is also essential in improving the prospects of regional stability and developing more cooperative approaches to environmental and social challenges in our region.

The Business Alliance for Asia Literacy is hardly the first group to argue that improving the understanding of Asian languages, culture and history would be beneficial to Australia.  However, the trends in this area in recent times have not been very positive.

On the same day The Age article appeared, The Australian reported that “Victoria University has dropped all its language courses except Vietnamese, while intensifying remedial English courses.”

You can hardly blame a University for not offering a course if there is little demand for it from students. But one benefit of Australia’s large and diverse migration intake, including a very high number of international students, is that a majority of these people are already fluent in different cultures and in languages other than English.

Many of these are Asian languages and cultures, so when they further strengthen their English language skills – which is where Victoria University is devoting more of their resources – it achieves many of the same goals the Business Alliance for Asia Literacy is calling for, just in reverse order.

Bringing more people of Asian background into Australia doesn’t negate the benefits of better educating other Australians about the languages and culture of our region.  But it is an indication that Australia is becoming more Asia-literate than might be assumed, as well as a reminder of the benefits of making better use of the skills and talents that migrants, including students, bring with them.

A lot of the comments from bloggers and twitterers that I have seen thus far seem to be quite positive.  Even though I get about 90% of my information through the Web, I’m not really across all the technology issues. 

Of course one doesn’t have to understand a technology to be able to use it, and as both a user and a follower of policy debates, I have mixed feelings about this announcement.  The decision to provide fibre direct to the household, avoiding the need to use Telstra’s connections to homes, should dodge some significant problems.

I have long believed that investing in the top of the range telecommunications infrastructure is an important pathway to improvements in economic efficiency and opportunity, education and service delivery, especially to regional areas. Getting internet speeds in regional and (some) rural areas which match those in the capital cities will go a long way to making it more feasible for people to move to or stay in regional towns.

However, I am wary that a large scale, long-term project like this may end up being out of date not long after construction of the network is finished.  This article by Peter Martin back in June last year highlighted the risks of large-scale spending on major technological investments.  He uses the example of Canberra’s Black Mountain tower. It was originally built as microwave transmission facility but “Within years of its opening in 1980 it was out of date.”

His view is that “anyone who specifies a particular technology ……  is highly likely to find that it is superceded or made redundant by the time it is built.”

However, while that is a risk, it seems clear that the private market isn’t able to deliver a high speech broadband network with anything like the geographic reach and speed that is proposed with the government’s new plan.

Given that the private sector is not able to construct a similar level of communication infrastructure under the current telecommunications law, it is necessary for the government to step up to the plate.  While there may be some risks in the government’s approach, Australia cannot continue to limp along with the woefully inadequate broadband that most of us have to endure.

ELSEWHERE: Most of the coverage of the plan to date has been very positive, although some are suggesting it may be difficult to raise the suggested amount of money from private investors.  Michelle Grattan says it is “either a stroke of ambitious brilliance or a rash extravagance that might be impossible to implement”.

Meanwhile, the Coalition are in strife again over it, with Nationals’ Leader Warren Truss backing the criticisms made by Malcolm Turnbull and Nick Minchin, while the Nationals’ Senate Leader, Barnaby Joyce, and his colleague Fiona Nash saying it is a good plan similar to one they put forward a few years ago.

More at PollieGraph, John Quiggin and  Larvatus Prodeo.

Nobel Prize winning economist Paul Krugman questions whether European governments were wrong to let themselves become so tightly integrated, and “in particular, (whether) the creation of the euro was a mistake.”

Poor leadership is part of the story. European banking officials, who completely missed the depth of the crisis, still seem weirdly complacent. And to hear anything in America comparable to the know-nothing diatribes of Germany’s finance minister you have to listen to, well, Republicans.

But there’s a deeper problem: Europe’s economic and monetary integration has run too far ahead of its political institutions. The economies of Europe’s many nations are almost as tightly linked as the economies of America’s many states — and most of Europe shares a common currency. But unlike America, Europe doesn’t have the kind of continentwide institutions needed to deal with a continentwide crisis.

This apparent structural weakness of the European Union in a time of major economic crisis provides a lesson as Australia embarks on slowly moving towards closer cooperation in our region.  Not that we’re likely to see any sort of economic or political linkages with neighbouring countries along the lines of what occurs in Europe happen in my lifetime – apart from the probability of even closer ties with New Zealand.

Europe as a united entity is unlike to start splintering. But not only is there a possibility of a major shift in the way Europe operates in the international arena. It is possible that Europe as an entity lacks the authority and political capacity to respond adequately to the current economic woes, which makes it more difficult for the world as whole to recover economically from the current financial mess.

Labor Senators recommended some technical clarifications, while concluding that “the Bill be passed without delay”.  Liberal Senators “acknowledged that Workchoices is dead”, outlined “aspects of the legislation which appear to be unfair, which may destroy jobs and which are at odds with the Rudd Government’s promises”, identified some “significant and unresolved flaws” and said the “government should honour commitments made to Australian business” made in their election policy. Despite all this, they didn’t say the legislation should be defeated if these changes were not made. The Greens focused heavily on queries about whether the legislation is compliant with International Labour Organisation (ILO) conventions, concluding by stating that the legislation provides “fairer regulation of workplaces than Work Choices. However, the Bill also contains too much of the Work Choices regime” and “represents a missed opportunity to cement a truly fair and progressive industrial relations system”.  They also don’t state that they will oppose the legislation if amendments are not made to make it “truly fair”.

The key point missing from most of the media commentary about the Fair Work Bill is that it doesn’t even go close to returning the law to a pre-Workchoices situation.  This is regardless of the fact that both major parties have now adopted the sensible view that we should try to maintain a consistent set of national laws governing workplace relations.  The issue is not that the laws are national, but what rights are contained in those laws.  For those who still like to portray industrial relations as a two dimensional contest, where workers and employers are constantly engaged in a battle with each other, there is no doubt that the Fair Work Bill leaves things tilted far more in the employers’ favour than was the case pre-Workchoices. 

This simple fact betrays the fervent cries that the Fair Work Bill will cost heaps of jobs are little more than bombastic nonsense.  These claims could only have substance if the same people argued that the workplace relations regime that operated under the first nine years of the Howard government were even worse.  Whilst there was a continuing campaign around a few specific measures, such as unfair dismissals, there was never any suggestion Howard’s laws were pro-union or anti-jobs.  It was only once the ideological monstrosity of Workchoices was bulldozed through a rubber-stamp Senate by a Coalition eager to hang itself with the extra rope the electorate handed them at the 2004 poll that history was rewritten to suggest that Howard’s own pre-Workchoices laws were some sort of trade union nirvana.

When the Senate considers amendments to the Fair Work Bill later this week, it is possible the Coalition may get some amendments passed with the support of Senators Fielding and Xenophon. It is hard to see the Greens getting the necessary Coalition support for any of their amendments, unless the Coalition decides to do so for the purposes of trying to embarrass the government.

However, it is possible that the government will accept a few amendments from the Greens or the others on the cross-bench.  This would give them a way to counter allegations that they are hardline ideologues captive to a union agenda, by showing them as being willing to compromise and consider different views (as long as they aren’t the Liberal’s views, who Labor is clearly trying to portray as hardline ideologues still pining for a return to Workchoices).  Accepting a few Senate amendments may also provide a way for Labor to get a few extra things the unions want in the final legislation, while being able to say to business that it was the Senate that made them do it.

Regardless of that, given public statements made by both the Coalition and the Greens, it is very hard to see a majority of the Senate insisting on any amendments it makes, should the government reject them in the House of Representatives.  This means Labor will make the eventual decision on what type of amendments, if any, they are willing to wear and the Senate debate will serve mainly as a vehicle for the various parties to do some positioning on what is still a politically significant issue.

Reports suggest Ukraine is heading into some major instability, with daily queues outside banks and some cities “going days without heat or water because they cannot pay their bills”.

Ukraine holds a very strategic position in some of the political faultlines between Russia and western Europe, and is also big enough to create wider economic and social instability if it really hits the skids. 

Things are starting to look sufficiently bad that the European Union itself is starting to show serious strain.

Mirek Topolanek, the Czech PM and current holder of the EU’s rotating presidency put it this way: “This is the greatest crisis in the history of European integration.”

I know many people are still suggesting things aren’t as bad as they seem, especially in Australia, but I’m not very convinced,

This is reminscent of Ireland, which until recently was widely lauded as the ‘Celtic Tiger’, but is now in very very deep financial strife. Along with all the financial difficulties being felt virtually everywere, the very weak state of their banks, helped along by what looks rather like corrupt behaviours by some bank officials, makes the Irish situation leak very bleak indeed.

It’s hard not to think there will be a few more governments topple over the course of this year. But the real issue is not how various governments will fare, but how the public at large – especially those who are already amongst the poor or struggling – will fare as the year unfolds.

* (it seems more like a global economic and social crisis to me, rather than a global financial one- and GFC always makes me think of Global Fried Chicken – but who am I to buck the labelling trend)

However, there was a curious contrast between two separate stories published today.  One, in The Australian newspaper, said the job creation scheme was “being jeopardised by federal government bureaucrats who are creating roadblocks and not sticking to their end of the deal.”

It quoted from a letter Mr Forrest had written to the Prime Minister, which stated that “surprisingly the economic downturn is not a risk to the Aboriginal Employment Covenant.  Rather, employers will not sign up to the AEC unless they know there are improvements in the government system for training and support and that the AEC is involved through the whole process.”

No prizes for guessing who leaked that letter.

At the same time over in the Sydney Morning Herald, an article reported views from indigenous academic, Professor Marcia Langton, that “hundreds of Aboriginal workers had lost their jobs as the mining industry sheds employees and deals with Aboriginal contractors collapse.  Miners had not been targeting indigenous workers, but their growing reliance on indigenous employees and contractors had left them exposed.”

Marcia Langton is also on the steering committee of the AEC.

One could hardly blame Mr Forrest or the AEC if they decided to reduce their original target given the major economic decline, including in the mining industry, which has occurred since the plan was first announced.  It was an ambitious goal even at the time – although I hasten to add we should encourage ambitious efforts to make major improvements in the situations faced by many Indigenous people.

But it is hard not to see Mr Forrest’s letter as, at least in part, an attempt to shift the blame on to government and its bureaucrats when the target isn’t reached.

These changes flow on from a review conducted last year by Barabara Deegan, who has a background in industrial relations.  Her final report is available at this link.

This visa class has been the subject of a lot of controversy in recent years, much of it driven by concerns raised by some trade unions about worker safety, as well as alleged impacts on the wages and conditions of workers in their industries.

The subclass 457 visa is demand driven, and it is worth noting figures released by the Minister which show that “application rates for Subclass 457 visas in January 2009 were 31 per cent lower than in September 2008, reflecting the change in economic conditions. The declines were most pronounced in the construction, mining and manufacturing sectors.”

This is a rapid but not unexpected drop and is consistent with long-standing arguments that large numbers of temporary skilled workers had to be found from overseas due to skill and labour shortages, rather than to undercut wages payable to workers already in Australia.

New obligations are being proposed for employers in areas such as:

• Payment of a minimum salary to Subclass 457 visa holders
• Payment of return travel costs for visa holders and their spouses
• Stronger legal requirements to cooperate with inspectors.

The Minister Chris Evans specifically states that these changes “will effectively make them a more expensive option for employers”.

But the Minister also says that the draft regulations “propose removing the requirement for employers to cover health care costs for temporary overseas workers. Instead, Subclass 457 visa holders will be required to take out private health insurance at their own expense and cover any school expenses for their children.”

This obviously reduces a potential cost for employers, while making it significantly more expensive for migrants who seek to come to Australia to work – particularly those with a family.

The Minister has indicated that “a panel of industry, union and state government representatives will now begin assessing the proposed new regulations to provide feedback to government.”

The process of considering changes to this particular aspect of our migration laws regularly takes advice from unions, industry and governments.  However, there rarely seems to be a voice provided for people representing the views and experiences of migrants and migrant families.

Even the interpretations given to current economic data seem to be all over the place. Some have suggested there is clear evidence the first, pre-Christmas stimulus package worked, while others say it was mostly wasted.  Yesterday’s figures on ANZ’s count of newspaper and internet job advertisements was reported in  one article as sliding “a further 6 per cent last month and down 34 per cent over the year”, but another piece, also in The Age said

‘The Government was encouraged yesterday by the ANZ’s observation that an increase in newspaper job advertising provided “some tentative evidence that the Government’s first fiscal stimulus package may be having a positive impact on the labour market in early 2009″.’

Given Treasury head Ken Henry has said that even after the event we might never know whether the stimulus package worked or not, I guess we’re all stuck with just ignoring the partisan cheerleaders and continuing to read articles and blogs by economists (apart from the economists who are partisan cheerleaders) to see if anything closer to a consensus emerges.

One consensus which does seem to be emerging is that the latest stimulus package does ignore the unemployed and the many who are likely to soon be in that position.  Quite what to do about it with the current is another matter, given the very tight timeline, but at least it increases the chances that that group of people will be given more assistance in the federal Budget which will be brought down in a few months time.