The Melbourne Review

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• Shirley Stott Despoja

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Writers’ festivity

June 2012

At the airport in Melbourne on a Thursday morning, flying to Perth for a writers’ festival. It’s not my first but it feels like it. Going out West as part of a posse and staying in the festival hotel etc.

This morning is a bit special as Kevin Rudd has just resigned and Prime Minister Julia Gillard has ordered a leadership spill for the Labor Party. In the Qantas gate area, George Megalogenis from The Australian strains to catch the audio from the TV screen suspended high on the wall, the sound all but inaudible against the ambient noise of the departure area. He, and many other political commentators, are going to be on the other side of the country during a tumultuous weekend of politicking. Marieke Hardy politely kisses Robert Manne. George waves at him, Robert doesn’t see. This pretty much sets the bar for the intense, wordy awkwardness which will ensue over the next few days.

On the plane I watch a sci-fi movie starring Justin Timberlake on a large screen. It looks foggy and pixelated and with no sound in my ears, seems kind of interesting in a 70s Euro psychologically taut kind of way. I try to listen to some music on an antique Discman but the all-enveloping low hum of the jet only lets puny, treble notes through. I read an old British music magazine, stories about old musicians and records that were rightly ignored the first time around. Back in the old days – those days – my own low hum and powerful forward thrust had revealed only the puny trebly nature of these acts. Now, with vintage experience and the general middle-aged phoniness of the current scene I am too slow and actually hear someone suggest there may have been more to these clowns. I doubt it!

Once landed and reunited with our luggage we all pile into a school bus. This is cute! I engage with a likely fellow who is a fourth time novelist. “Does it get any easier?” I ask. “No!” he says and we both laugh. He has never been out of Melbourne, let alone here to the West Coast. I give him the benefit of all my prejudices, explaining how, like Brisbane, they have excellent arts festivals because they throw so much moolah at it. The Art. “They worship us as GODS!” I inform him, shouting above the din of the diesel powered but largely empty bus. We laugh. Five minutes later he catches a glimpse of the WACA and shouts in extraordinary joy! As if he has been impressed.

“Hush now!” I say. “Don’t fuck it up for the rest of us!”

We arrive at the hotel where we are told our rooms won’t be ready for another two hours. “Look, I’m from Melbourne!” I say with a smile. This usually opens any door around but alas, WA hotels operate to a strict turnover timetable and will not budge the clock for an Eastern whim, no way.

A festival worker arrives to work out a script with me for our informal chat, which will occur two days into the future. I have time to kill so I swing along with her European efficiency. We shoot the shit over a coffee in the intense Perth heat and I dazzle her with preposterous ambit claims to entertainment authenticity. She humours me. We tear down a world and build a teepee wherein people might feel it nice to be invited. Different.

Back at the hotel lobby, tempers are fraying. Robert and Anne Manne nod at the festival worker (Anne is to be next in line to trade some clues with). They are more concerned with winning entry to their room though. Stuart Littlemore walks past and the festival worker follows in his silken wake. I am forgotten. Peter Fitzsimons sits about in a loud bandana. I think to myself that it is no wonder that Andrew Bolt cuts through this mob like a hot knife through butter. We need new smartarses – fresh wits!

The Festival opening night was a speech given by Germaine Greer. The bus was chock full of literary freaks. I sat in front of others, straining to hear their measured, even tones tease out the guts and the tail of the ongoing drama of Rudd and Gillard. “Well Crean reacted like a normal person to a defeat and just found his way through his career”… “It’s interesting – leaders both going for a presidential pitch…” Fascinating, and rude, to eavesdrop on such high-toned, private talk about public matters. But I’m well into my life and still playing the outsider in so many situations. It’s my attitude, my tone – I can’t fight City Hall.

The talk was also mostly inaudible due to the air being choked up with zombie talk from the Brisbane trio to the fore of me. The bus stopped and I saw Robert Manne greet right-wing humourist Imre Saluzinsky with, “It’s fated we should meet – this is Anne…” This was delivered in grey, robotic tones and very little eye contact made. 

Germaine had filled the large hall at the UWA. A giant organ flanked a large glass structure seemingly ripped straight from an Aztec temple. Germaine would after refer directly to the room, “I love this mad Italian fantasy in which I am speaking….” The talk had begun with us being welcomed by local indigenous people. A fellow called Derek blew most impressively on a didgeridoo and, using circular breathing, kept a note going without a break for a good five minutes. He toyed with the sound billowing through the room. He could have stopped anywhere into his “song” and we would have been amazed, so exotic and alien was the sound and its very shape and sense to us. Germaine spoke of “eco feminism”, touching on slime moulds and nasal microbes and winding up with an 18^th century poem by a woman about a hare being hunted. She was talking about man’s place in his own hierarchy with women and animals being below him. She was questioning it, of course. She also advised everybody against cleaning too much or sterilising their homes.

Back at the hotel I had quickly settled into a kind of routine. It was like I’d been sent back to school and was on a trip with a class. The august Frank Moorhouse, standing at the lift with his white linen suit jacket over his shoulder was asked by a younger colleague as to how he was travelling. Frank stopped, paused within that stop as if to consider the question more thoughtfully and answered that he was indeed very well and that may have been to do with the “gastronomic tour of the south west” he had indulged in for a couple of days. Later, in the lobby, I said hello and asked what he was up to for the rest of the day. “Another panel – and more talk of sex,” he replied. I surmised that it went with the abundant folding stuff that this part of the country was awash with.

I went for a walk into the shopping area of Perth. The West End? The sun was fierce. A crusty, scabbed gent fell onto the bench beside me. “Mate! Where the fuck am I?” “Hay Street Mall, Perth,” I told him. “Mate! I don’t know! I come from Rockingham! I don’t know nothin’ ‘bout this!” I repeated my opinion of our co-ordinates and pointed in the direction of the station but also informed him that I wasn’t a local. “I dunno nothin’ about this!” he cried and stumbled off into the bright afternoon.

I went down to the Festival area three hours early, as I was bored of the hotel. I sat in the green room and checked out the race. Soon I was very pleased to renew my acquaintance with Ramona Koval. Until recently she had run the best book show in Australia but the ABC, in its wisdom and new drive to completely dunce down the corp, had lost her in order to get more direct feedback from the listeners as to arts and literature. We accompanied a friend of hers, who wanted to smoke, outside and continued an arch but icily witty skewering of the various talents that Radio National has put in place in their mania for hearing the opinions of the audience, that is to say, the ignorant. “Where are the experts?” we cried. And laughed. Robert and Anne Manne joined us. They all spoke warmly of the UWA grounds, where we were standing. Robert mentioned that Mick Malthouse had been given a doctorate at Latrobe. Ramona and I were disgusted, though her opinion was formed completely without the distortion of knowing how dull Mick Malthouses’s pronouncements can be. She is not sporty. Stuart Littlemore hovered around our tight circle but we held to our structures and he had to go and play with Peter Fitzsimons, a fellow Sydney-sider. It was only right. We Melbournians enjoy stirring the denizens of Sin City. Cashed up, but lacking our quality tones, all vintage EQ and valve compression.

I then sat around with Marieke Hardy and John Birmingham. These felt to be more peers and contemporaries. I missed the old school manners and exotic personal tics of the elders I had been hanging with, however briefly. I felt the ambience turn to matters of pop culture. It just happened. No one was taking care of things.

I then sat through an hour of the comedian Fiona O’Loughlin being interviewed by a younger comic. Like all the panellists and talkers – thrown together by an arts administrator after a bottle of scotch and a round of darts on the deck one warm night. Comedians are neurotic at best. Fiona had some badness, an interesting mix of Australian slackness and show business remove. Totally unresolved tensions. The interviewer was parochial and banal. (Older people should interview younger people – it’d be more fun). It helped that the audience was swinging around the same pole and things went very smoothly. My session was next. In my mind I imagined the audience changing completely, which they hadn’t really. A lovely sunken garden in mock ancient, overgrown ruin design. I was interviewed by Simon Collins for an hour, sang a song called “Life’s a dream”, signed some books, walked back to the green room and took a bus with George Megalogenis and Andrew Robb to the hotel. George likes Wilco.

The next day I met a new friend on the bus. Selena Hastings, an English woman with a delightful London accent who was to do a panel on biographical writing. “Who have you written of?” I asked. “Somerset Maugham, Evelyn Waugh and Unity Mitford,” she replied. Bang! Bang! Bang! Top shelf life material there.

I saw the last part of her talk. She was on a panel with Fiona O’Loughlin and Andrew Robb who had a book out about his battle with depression. A very disparate bunch. The grounds of the UWA are lovely. The venues are called “The great hall”, “The secret garden”, “the tropical grove”, “the Romeo tent” and several others. I did a panel with Fiona O’Loughlin and Anne Manne on writing memoirs, moderated by the poet I had met days before, Tinecke, who had put in a lot of research into everybody.

Back at the green room I was yacking again with Ramona Koval and Patricia O’Donnell. There were a couple of young authors into “Young Adult” fiction there but I like to parlez with the pros. Going at the same speed, with sure knowledge of the limits of our worlds. 

Later, back at the hotel, I went for a swim in the pool which was outside, on the fifth floor, in the warm night and looked straight into a reception room where a rich young West Australian wedding was in full flight. 

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Irregular writings

May 2012

• Dave Graney

I am by nature a contrarian and a cheapskate. If I had tens of thousands of dollars to throw about I would not buy a guitar and an amp. I would buy a car or something. Fix something in my house.

Basically I’m a singer. For the first couple of decades as a performer I liked to stand there at the mic and sing. I didn’t want to be stuffing around with a guitar. In the Moodists, Steve Miller had a Fender twin and Mick Turner had a small Marshall combo. They were pretty intuitive as to what they played. Somehow we arranged our one chord boogies by ear.

The Moodists were operating in the post punk scene. Guitar heroes were few. These were ours: Johnny Thunders, Steve Jones, Keith Levene, Tom Verlaine, Robert Quine, Lou Reed, Poison Ivy, Bryan Gregory, Kid Congo, Rowland Howard.

Later, after the Moodists, I wanted to be a singer songwriter in a 70s kind of way as that was the music I was tuning into. That’s what I’ve done ever since. I wrote songs on an acoustic guitar but usually turned them over to my band, which pretty much always had a piano, bass, guitar and drums. The guitar was always pretty trebly and clean and played with the piano. The guitar didn’t have to be the central part of the sound. We always had the vocals and the rhythm section front and square. Influences from R&B.

I had an acoustic guitar I bought from Robert Forster from the Go-Betweens. Twenty pounds it cost me. Some time in the late 80s I started to do some acoustic shows. The beginning of the vogue for all things “unplugged”. I bought some crappy Ovation style copy from Dean Street in London. Scratched out some performances that way. It was just a cheap way to get around.

Some time in the late 90s, after the Coral Snakes period, I started to play electric guitar, and got myself a Harmony semi acoustic. During this period we had started to use a lot of harmony singing and the sound on stage had to be controlled. The volume of the guitar is always an issue with lots of open mics around, so we were always wanting the guitar amp to be at a lower volume.

I had started to think hard about textures and sound and production and wanted to get a small combo with no piano and clean sounding guitars. A beat group. Stuart Perera played guitar, a left handed solid body Rickenbacker. He put it through a Laney combo and still does. I liked it all pretty loose. Low volume, loud lead vocal, harmonies.

When I was a kid I loved those dudes like Hound Dog Taylor and they all had the cheapest gear. Punk bands like the Buzzcocks proudly had Tesco (supermarket) guitars and the Subway Sect played Fender Squires. I always tune out when people start to rave about “warm valve sounds”. I know, from experience, that it’s all true but there are other sounds. I mean Neil Young and The Foo Fighters might record on tape and the like but they are millionaires. End of story.

The Moodists did a reunion gig in 2005 and the young rock sound engineer was telling our guitarist, who had his own sound and was an original gangster, to “dial some mids in”. I had to tell the young cat that the ideal sound was not always Bon Jovi or Aerosmith, this was the sound we had. Steve turned all the treble on his amp up and there it was – that spindly, loud, reverbed-out Fender twin sound. The kid put his earplugs in.

I’d been putting out my own albums for more than 20 years in between Moodists shows. By now I had some other references for guitar sounds that I loved. Jerry Garcia, Jorma Kaukonen, John Cippolina, Ike Turner, Gatemouth Brown, Grant Green, Duane Allman, Ed King. Lots of people. American rock and jazz. 

So that’s where my attitude towards the sound I was looking for came in. I can’t wipe all that away from my sensibility. That’s how I ended up buying a $120 solid state Fender combo amp from eBay. The amp had a beautiful clean sound which is what I wanted. Only it was piercingly loud and trebley. The volume was at “1” and it was overpowering.

I became obsessed with building my own sound and scoured the online guitar forums on different subjects. Needless to say, guitar folk love to talk. All continually searching for their own sound, or one somebody else had perfected. I ventured into the world of online opinion and critiquing of the electric guitar experience. The language was pretty amazing – occasionally. I came across the terms “sag” and “bloom”. Using a valve amp, there is a kind of power compression when a note is hit hard and the amp can’t respond straight away. Being valves, they behave differently to solid state circuits. The power “sags” and then gathers and “blooms”, becoming louder and more resonant.

Sag and Bloom. Like a couple of Jewish entertainment lawyers. I was reading this stuff and almost getting it. Then I had to investigate as the Janglebox was very noisy being plugged into mains power. I learned that people preferred batteries in the studio for a better sound but mains power at gigs where reliability had to be uppermost. The sound was better with batteries. New batteries? Well with that question a new rabbit hole appeared when a fellow opined that the “sweetest” sound he’d ever heard was when he used batteries that were just about to run out. Carbon batteries too, whatever they were. I left the building at this stage, happy with the sound I had been able to chase down, ready to go and play and record. Guitar and combo amp still pretty much weighing in the same. Leaving them to all their endless talk.

 

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Walking with Retail Dinosaurs

May 2012

• Peter Singline & David Ansett

Twenty five year old student Jessica Waters was recently quoted as saying “I don’t buy more than I used to, but I buy differently…” and in those simple words she eloquently summed up the quandary facing Australia’s retailers.

Traditional retailers such as department stores, bulk electronics, whitegoods and homeware stores can today be typically identified as undifferentiated generalists. In their time they had a relevant role in the retail landscape, but as the world of shopping and shoppers changed over the last two decades towards niche specialist retail, they have not evolved with it. 

Meanwhile a new generation of retail brands have emerged, defined by their appetite to be truly exceptional in one or more defining dimension of their business. This new breed of retail brands move quickly, adopting new technologies, sensing new consumer movements and building brand fans as naturally as they draw breath.

Australia’s retailers have enjoyed a ‘Goldilocks economy’ over the decade or more leading up to the global financial crisis. Whilst the good times meant year after year growth for retailers without the need for real innovation, the current climate has revealed the flip side of prosperity – complacent businesses who find themselves in a constricting market, unprepared for the changes demanded by this tough new world.

It is undeniable Australian consumers are spending less money with our retailers.  David Jones, Myer, JB Hi Fi, Harvey Norman and Billabong are amongst the big-name retailers to have predicted lower profit expectations for this year. David Jones recently announced their full year profit would be down 40% with fellow department store Myer reporting a 19.8% drop in profit.

As the new reality bites, one major retailer after another has announced strategic plans to transform themselves into omni-channel businesses. It’s clear today’s customers expect retail brands to fit seamlessly with their lives in a manner unimaginable ten years ago, and the omni-channel strategy is designed to bridge that gap. The challenge for traditional retailers is to raise their aim above the tactical to understand the extent of transformation this strategy demands.

Whilst much of the discourse driven by big retail has focused on the impact of internet shopping and the threat to our local industry from overseas e-tailers, National Australia Bank’s Online Retail Sales Index reveals that online still represents just 4.9% of Australia’s $216 billion retailing industry, with less than half of those sales from overseas sites. These figures provide a clear perspective that if there is a single demon facing retail in Australia, it simply isn’t off-shore eCommerce. Deborah Sharkey, eBay Managing Director (Australia and New Zealand) agrees, commenting that “the consumer is giving us a clear message – their needs have evolved and the retail industry needs to evolve to meet the changing needs.” Choice’s Christopher Zinn also believes that “the big chains should recognise that it’s their high prices, limited range and poor customer service that increasingly encourages people to use the internet.” The reality is there’s no single, simple answer. Searching for a silver bullet to meet the challenges facing retailers in Australia will be fruitless, but at least the way forward is clear.

Many traditional retailers in Australia have lost touch with the ‘value’ dimension of their value proposition. Retailer Harvey Norman was this year named the third most valuable retail brand in the Asia Pacific region in an annual survey by Interbrand. This matched their ranking from 2011, but the brand was valued at almost US$25 million less than twelve months ago, with the report recommending that Harvey Norman ‘needs to develop a stronger, more unique brand positioning in 2012’ to maintain its position.

Today more than ever, time-poor and choice-rich consumers demand real clarity on why and how brands add value to their lives. And, here’s the kicker, that value must go way beyond the functional stakes of price and practicality. Brands need to clearly articulate the emotional benefits they offer – from beautiful design to extraordinary customer service, from ease and friendliness of transaction to brag appeal. Too many of our retailers are simply masters of assortment, bundling a diverse range of products under one roof and believing that is all that is required of them. 

One retail brand who stands out from the pack is Apple. Apple stores deliver the highest sales per square metre of any retailer (in the US Apple stores deliver sales of US$65,000 per m2, that’s 25% higher than the next best performing retailer Lululemon Athletica) and there’s much to learn for many retailers from the way they’ve gone about it. 

Apple has long had absolute clarity around their brand which layers intuitive technology with beautiful design aesthetic and soul. Over time Apple has built a huge community of passionate loyalists, the envy of brands across the spectrum. Apple retail stores provide a place beyond the functional where these fans go to connect with the brand. Customers continue to flock to Apple stores where they’re willing to pay a premium for the Apple experience, even when the same products are available in the US at Wal-Mart, Best Buy, Target and on Amazon at lower prices. 

Beyond their brand clarity, service bar concept, and product range playground, the defining dimension of Apple stores is their retail staff. Staff are carefully trained to be experts in the forgotten art of ‘making customers happy’. Apple retail staff don’t earn sales commissions, it makes no difference to them whether they sell a customer the latest Mac Book, or get their old one running smoothly again. The role of Apple’s store staff is to deepen customer relationships and build loyalty by discovering what they need and helping them get there – no cross-selling, no up-selling. 

Former Senior VP for retail at Apple, Ron Johnson believes retailers shouldn’t be asking, “How do we create a store that’s going to do $15 million a year?” but rather “How do we reinvent the store to enrich our customers’ lives?” In the current landscape, this represents perhaps the most defining challenge facing the old guard of retail.

 

Peter Singline and David Ansett are co-founders and directors of Truly Deeply, a Melbourne based brand strategy and design consultancy.

trulydeeply.com.au

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Malaysia’s guessing game

May 2012

• Sen Lam

Malaysia’s Prime Minister Najib Razak seems to be examining his options, as he keeps the people guessing about the date of the next general elections

 

In Malaysia, they’re known as ‘Merdeka Babies’, people born in the year of independence (merdeka) from British rule. And so it is, for the Barisan Nasional coalition government, and in particular, the dominant UMNO party. UMNO, which has ruled uninterrupted since independence in 1957, has been in crisis mode even before the 2008 general election; with party renewal and rejuvenation sorely needed after half a century in government.

John F. Kennedy was fond of pointing out that the Chinese word for ‘crisis’ is made up of two characters – one representing danger, the other, opportunity. Whether or not UMNO has the leadership and unity of purpose to seize the opportunity for change, is as yet unclear, even though Prime Minister Najib Razak has for the past twelve months been espousing reform and democratisation.

For example, the unpopular and once dreaded Internal Security Act or I-S-A has been abandoned in a few short months, and replaced with several other ‘security’ laws. And with suspicious haste, it would seem, according veteran lawyer Ambiga Sreenavasan, who’s also the public face of Bersih, the campaign for free and fair elections.

Bersih (translated as ‘clean’ in Malay) is a non-partisan organisation, but because it has the support of the Opposition Pakatan Rakyat coalition, Bersih and its co-chair Ambiga have been the target of much vitriol from less-tolerant elements within UMNO (particularly the youth wing) and the ultra-right Malay PERKASA organisation.

Whether or not the government is sincere in seeking genuine change, one place to begin may be the culture within UMNO. An ‘all or nothing’ mentality which brooks little tolerance for dissent or different points of view has trickled down to the government machinery.

One source speaks of Malaysian students abroad on government scholarships being given strong hints not to participate in democracy workshops or events, or risk being sent home. Stories of SB (special branch) men, hovering menacingly in the background at civil society meetings are commonplace in Malaysia.

I was a curious observer at the July 2011 Bersih2 rally in Melbourne’s Federation Square. There were some men perched on various vantage points taking pictures with giant cameras. Were they media, or were they ‘special branch’? Hard to say. But the Bersih organisers came prepared, and with that special brand of Malaysian humour, handed out paper face masks with the image of Bersih co-chair Datuk Ambiga. This was to allow those of a nervous constitution to stay for the event, to hear what the clean election advocates had to say.

Bersih3 (held on April 28) elicited more of the heavy-handed response by Malaysian police. In contrast to the rallies taking place in 75 world cities, including Melbourne’s Federation Square, where local authorities facilitated safe venues for the Malaysian diaspora, Malaysian police fired tear gas at demonstrators in Kuala Lumpur. The government says allegations of police brutality will be investigated.

Prime Minister Najib Razak has a natural disposition towards democratic values. But as the President of UMNO, he has to balance the courage of his convictions with the realpolitik of party survival. There are still many conservatives who want things done the ‘old way’, not unlike the struggle currently on display in China’s Communist Party, as demonstrated in the Bo Xilai saga.

The PM has to show leadership, without being seen as draconian. He has to concede without being seen as weak, if he’s not to suffer the fate of his amiable but ultimately unsuccessful predecessor, Abdullah Badawi.
On the home front, Prime Minister Najib has to contend with allegations of extravagance levelled against his wife, Datin Seri Rosmah. Mrs Najib is reportedly fond of expensive jewellery and trips abroad to order couture frocks from, of all places, Sydney.

In Malay culture, blatant exhibition of wealth is in poor taste. The stories in social media have taken on an increasingly gossipy and unflattering tone – not unlike those suffered by another avid shopper, the ill-fated Marie Antoinette, 220 years earlier.
The Malaysian electorate, apart from maturing in spirit, is also increasingly youthful. Many Malaysians in their 20s will be voting for the first time. This social-media savvy generation is also an impatient one. Driven by the immediacy of smart phones and inspired by civil society movements overseas, many want change, and they want it now.

That Prime Minister Najib and BN are trying to ‘democratise’ is heartening to the Malaysian diaspora like myself, who remember the years when, in the absence of the Internet, the only ideas and discourse were those driven by government-owned or controlled media. So credit where credit is due. Malaysia is a far freer place today, compared to the 1990s.

For a southern Johor boy like myself, long used to the dictates of UMNO (Johor being a stronghold) the nurturing of a healthy public forum for the free exchange of ideas can only bring good. As is transparency and the ongoing battle against corruption and crony capitalism.

In a sense, Malaysians (including Malays, the biggest ethnic group) have given the BN government a mandate to institute change.

Accountability and a healthy opposition are crucial if Malaysia is to achieve the developed nation status of Dr Mahathir’s Vision2020 which is, after all, only two elections away. The BN government, the Opposition and Malaysians have a choice. Whether to go for cosmetic options to stave off the inevitable, or to face the maturing process through the more holistic path of openness, tolerance and courage to embrace change.

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The North Korean fiasco

May 2012

• Alexander Downer

There isn’t an English word for what the Germans call schadenfreude but the sentiment is universal; comfort at the discomfort of others. We may not like to admit it but we all feel it from time to time. I did when I saw the North Korean intercontinental ballistic missile had crashed and burned soon after takeoff.

It was welcome news. That odious regime had humiliated itself on the grand scale. The launch was to coincide with the centenary of the birth of North Korea’s founder, Kim Il Sung, sometimes known as the Great Leader. It was a time of great official celebration, celebrations which were to include a demonstration of North Korean technical excellence. 

Mind you, it’s quite something that a country with a GDP less than half the State of South Australia’s can build and launch an intercontinental missile. But it also says something about the regime’s priorities that it spends its limited resources in that way. Imagine if the South Australian government spent money on such enterprises. It would be seen as eccentric, just as it is eccentric for North Korea to build long range missiles. 

I’ve often wondered why North Korea would bother to build not just long range missiles but nuclear weapons. It also has a vast army. With a population about the same as Australia’s, North Korea has an army said to be about 5 million strong. 

The traditional view is that North Korea has made all these investments to protect itself from a South Korean and American invasion. Well, the vast army could do that, at least making any invasion very costly. But a nuclear weapon? Let’s think about it rationally.

North Korea probably has around 3 to 5 nuclear warheads. So far, they cannot attach one to a missile. It would take many years to develop that technology. They could, of course. Pakistan has and its missile technology has been sold to them by North Korea. The real question is, in what circumstances would North Korea ever use a nuclear weapon?

I don’t think they ever would. On one occasion when I was the foreign minister and he was Secretary of State, Colin Powell rang me about a North Korean related issue and we had a brief discussion about this very topic. Now Colin Powell is no Dick Cheney style neo-conservative hardliner. But he was pretty emphatic. “Alex,” he said, “if North Korea ever dropped a nuclear bomb on the South, we’d turn the North into a parking lot”. 

That’s the point. The North Korean regime isn’t suicidal. They know that the use of nuclear weapons would bring the end to their regime, and pretty quickly. So it still begs the question, why would the government of poverty stricken North Korea spend so much of its GDP on a nuclear program and long range missiles which could, conceivably, be armed with a nuclear warhead?

We can only guess but here’s a thought. During my first visit to North Korea, the then foreign minister took me to dinner at a government guest house several kilometres outside the capital, Pyongyang. Dinners are important in diplomacy. After a few drinks, the two sides open up more frankly with each other. On this occasion, the conversation turned to the issue of the re-unification of all Korea. This isn’t an issue we know much about when we speak of North Korea. I wanted to know what the North Korean vision was. After all, in the early 1950s their vision was to invade the South and impose a brutal, Stalinist regime on the whole peninsula. 

His reply was fascinating. North Korea wanted re-unification, but of a very different kind. They wanted a loose federation of two quite distinct states. The North would retain its autocratic – we would say Stalinist – system and the South its more open liberal capitalist system. There would be a federal government which would comprise representatives of the two states and they would take responsibility for Korea’s foreign relations and other essential functions like currency which would more or less unite the country.

This, I thought, is a pretty odd model. I couldn’t imagine it could ever work. But it is interesting that in both North and South Korea the leaders and their people still dream of the re-unification of their country.

So what has this to do with North Korea’s nuclear and missile programs? Well, remember that the South has double the population of the North and its economy is twenty to thirty times larger. In a re-unified entity, the South would be predominant. But not totally if the North retained a significant military capability.

The North’s calculation is that if Korea re-unifies, the Americans will leave the peninsula and Korea will become a neutral country. In that environment, the North with its nuclear weapons and missiles would be a formidable partner with the South.

Personally, I think it sounds eccentric but the alternative scenario is that reunification would be on the South’s terms. The North wants re-unification but on equal terms. It can’t happen but it helps explain the otherwise eccentric policies of the North Koreans.

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Third age

April 2012

• Shirley Stott Despoja

Bread and butter and hundreds and thousands.

Sometimes I think that the only things that have not changed in my lifetime are arrowroot biscuits, and pass-the-parcel at children’s parties. At my granddaughter’s fourth birthday party last month I experienced the shock of the old when I realised that a child’s indoor birthday party is basically the same as it was 70 years ago.

My friend Anne, a great-grandmother, and I found that soothing, I think. The parents playing the pass-the-parcel music cheated to ensure every child was a winner, in just the same incompetent way as I used to, decades ago. I half expected an appeal to the court of disputed results, but those little children knew both the rules and when they should be broken. The table groaned with good things, of course, but my humble offering of fairy bread went down like a dinner. Bread and butter with hundreds and thousands forever! Completely tasteless, but traditional, comforting, absolutely unchanging party food. The balloons stayed up (they didn’t in our day) and nobody cried. It made me ridiculously happy, though I realise that was not quite the point of my granddaughter’s party.

Third agers need these little touchstones of continuity now and then to counter the continual thrust into our lives of the new, especially at those times, as Henry Francis Lyte’s doleful hymn goes, when change and decay in all around we see. Of such sadness, here is an example:

When we were young we built our houses and planted trees to shade them. Now builders rip out trees and bushes, fill up the block with house. Then they cover up the builders’ rubble with some sad soil and shove in some spiky yuccas that go with the verandah-less, jail-house domestic architecture of today.

I cannot be doing with yuccas. They could take out the eye of an unwary person, especially a child, and they provide no shade at all. Trees that survive, especially big shady ones, have no security of tenure. There’s always an excuse for chopping down or mutilating a tree, it seems. The man behind my house trimmed a neighbour’s gum tree and in doing so changed the micro-climate of my small back garden without a by-your-leave. Councillors cave in to all sorts of requests to kill off trees which are deemed “unsuitable “or “dangerous” with little proof that this is so. Skin cancer is a lot more dangerous and prevalent than shady tree danger. 

My Yates garden club contact tells me: “At last gardens are moving away from the spiky, clumping plants that have been so much in favour in recent years. While there will always be a place for structured plants, there’s nothing quite as inspiring as a garden filled with colourful flowers.”  For structured read yukky yuccas.

Flowers, yes, always, but where are the garden trees and substantial shrubs of yesteryear and who, if anyone, is planting them? Flame trees, jacarandas, wattles, gum trees, oleanders, hibiscuses, bottlebrushes, weeping myrtles, bauhinias, crepe myrtles? Where I live there are some old gardens left from the 50s, tangled and mysterious and beautiful, with height and understoreys, hiding cottages that developers only see as ripe for demolition. I seek these gardens out like old, lost friends and risk lace curtains being twitched as I stare and touch if I can. An old camellia can make my day; honeysuckle brings tears to my eyes. An apple-scented magnolia is all the sweetness and drama I need for a week. I am watching those beloved old bauhinias in the street near the new river development on the former Channel 7 site at Gilberton. If some bugger argues that he can’t get his truck onsite without their removal, I will do something drastic, I know.

A garden is a potent metaphor. Squabbling birds, rampant climbers, lemon trees firing off lemons in a storm, barren figs, woody pears, the gardener’s constant struggle with pests and efforts to grow something where the aspect is wrong… I used the complex habitat of my last old garden as disguised political commentary for years in a long-gone column, evading the censorship of my then editorial master who never quite got it. But my readers had no difficulty getting the message. And now we have few trees, many yuccas and even plastic lawn… what better metaphor is there for certain aspects of modern life and human behaviour?

Lesley Cains is a woman who worries about gardens. Hers is one of the last small garden shops to survive against the competition of the big hardware/garden chains. Lesley knows that her 35 year old garden will not survive her. Gardening makes one realistic. About the likelihood of suburban garden tree planting, she says Generation X and Y can’t visualise a tree that takes 15 years to grow when they expect to move on in three or five years. Lesley made her garden from cuttings from her older neighbours’ gardens when she moved to a housing trust place. The old neighbours have gone and so have their gardens, but there is something of them still in Lesley’s place.

She thinks young people are getting interested in eating from their gardens and enjoys advising them. Don’t be like the old man who waited until his flower-loving wife died to expand vastly his vegie patch. Without the flowers, bees did not come to the garden and the vegies died. She has excellent advice for old people struggling to maintain their gardens, too. Get friends in on a rota to help. Someone among them will have a strong back, someone else some good knees. That’s the theory anyway.

 

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Private label needs public disclosure

April 2012

• Peter Singline & David Ansett

Whichever way you cut it, the growth in private label brands is going to continue within Australian supermarkets.

Consumers in Australia are increasingly seeing private label products as representing great value. A recent AC Nielsen research report into the power of private label brands globally found an average of 69% of all respondents agreed that ‘supermarket own brands are usually extremely good value for money’. In Australia 81% shared this sentiment.

Growing consumer adoption, combined with more sophisticated private label branding by supermarkets, has seen private label sales increase steadily from 15% in 2003 to above 25% of total sales today. Given that private label penetration is strongly correlated with market concentration, both Coles and Woolworths, with approximately 80% of all supermarket sales between them, are in a strong position to achieve their stated aims of pushing their private label sales closer to 40% of total sales.

From a consumer perspective this perhaps represents good news. Consumers are cashing in on some big savings while also believing that the discounted private label will often be coming out of the same factory as the national branded product. On the surface it’s all upside.

However, for many Australian food processors and manufacturers who have their own branded products in the market, private label is turning into a nightmare. They are witnessing the transformation of their once dedicated channel partners into formidable competitors with an unfair advantage. Never before have they had a competitor who required them to sit down and share their new product and promotional plans in advance. Never before did they have a competitor able to dictate their product pricing – a major issue when their input costs keep rising. Never before did they have a competitor who determined shelf allocations, positioning and promotional slots.

You get the picture.

The conflicting roles of Coles and Woolworths, as both supermarket channel partner and product (private label) brand competitor, places national brand owners at a huge disadvantage. They are not only facing a new breed of competitor in the supermarkets, they are also encountering a ‘take no prisoners’ attitude. Significant discounting by private label brands in 2011 spurred global Heinz executives to describe the Australian market as an ‘inhospitable environment’ for suppliers.

Turning the market upside down – it’s an increasingly tough world for food brands like Heinz.

The lot of many national brand owners is further complicated by the fact they also supply the supermarkets with their private label products. They have rationalised their role in supplying what is essentially a competitor, on the basis of lowering their overall unit costs of production, reaffirming their relationship with the supermarket, and believing if they did not do it one of their competitors would. Regardless of their reasoning they are being complicit in a significant restructuring of their own market.

The growth in private label is building the dominant position of our supermarkets to the point where they can dictate where our food products come from and the terms on which they are delivered. This will inevitably lead to an increased proportion of product being sourced at lower cost from overseas with the potential to threaten the viability of many local food producers.

Veteran food industry consultant Dr McKinna says that while food production costs such as labour, energy, freight and compliance are rising, the retail price of virtually every supermarket food category has dropped 5% in the past 18 months, with milk and bread prices down 30-50%. He said 50% of all food sold by the major retailers was now marketed at a sale price. While Coles may have based their business strategy on ‘Down Down, Prices Are Down’ it does not mean the interests of the food industry are being well served.

Given the role private label brands are playing in reshaping the landscape of the food industry we have a somewhat radical suggestion: Why don’t we make the whole thing far more transparent?

Why not make it mandatory to declare the manufacturing source of products on the pack? This would allow consumers to identify whether the private label product they’re considering is sourced from the same factory as the national brand or not. If it is and has the same ingredients, then for most it’s a no-brainer to take the lower price. However, for a food manufacturer with national brand equity to protect the decision to also supply to the supermarkets, their private label products becomes one of brand suicide.

As a result, the majority of national brands would no longer agree to supplying private label products. The supermarkets would have to form relationships with second and third tier manufacturers, who may not have the volumes to deliver the low unit prices the supermarkets are demanding. National brands would have to get on with what they were created to do: build their brands. It may also result in the supermarkets having to vertically integrate by taking ownership of some of their supply sources. This in turn means they would have to build new skill sets and confront some of the same operational risks their current supply sources face. If they can do it better than the national brand players, then it will be on merit not muscle.

Total transparency of food product manufacturing would change the rules of engagement significantly. The respective roles of brand owner, food manufacturer and supermarket would have sharper clarity with no one – including consumers – left feeling exploited.

Peter Singline and David Ansett are co-founders and directors of Truly Deeply, a Melbourne based brand strategy and design consultancy.
trulydeeply.com.au

 

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Turning from a two speed economy to a clean economy

April 2012

• John Thwaites

Whether it’s the two speed economy or a patchwork economy, we’ve got every right to be worried in Victoria.

Victoria is losing jobs, not gaining them. Growth has stalled. The latest figures show while Western Australia gained 54,000 jobs last year, Victoria lost 34,000. The mining boom is forcing up the value of the Australian dollar making it much tougher for Victorian manufacturers and service industries like education and tourism to compete. Other sectors like retail and construction are not so exposed to the rising dollar but are nevertheless suffering from uncertainty and lack of confidence.

If Victoria is going to survive in these challenging times we need a plan to rebuild jobs and confidence.

With this in mind I was struck by a report of what states on the other side of the Pacific are doing. The Governors of the Pacific Coast states of Oregon, Washington and California in the USA, and the Premier of British Columbia in Canada, have just this month signed an action plan to create one million new jobs in their states by 2020.

How are they going to do it? By looking to the clean economy.

The governments have identified four key sectors of the economy that stand out for job growth potential across their region. The sector with the largest potential increase in new employment is energy efficiency and green building. Over three hundred thousand new jobs are planned in building retrofitting, energy saving products and green building construction. The plan also identifies hundreds of thousands of new jobs in resource management, clean transportation and clean energy.

A report prepared for the Governors stated: “The clean economy is the single most important global opportunity on the medium term horizon with revenues expected to reach $2.3 trillion in 2020.”

It’s true. Across the world, countries are switching to cleaner energy sources: wind, solar, hydro, bioenergy and geothermal. Bloomberg New Energy Finance estimates that a record US$260 billion was invested in new clean energy in 2011, five times the investment in 2004 and more than in fossil fuels.

Germany, for example, is undertaking a massive reconstruction of its energy supply and transforming to a low carbon economy. Germany has a target for 35-40 per cent of its electricity to be from renewable sources by 2020. It is investing 20 billion euros a year in renewable energy capital investments. Some 367,000 people are employed in the renewable energy sector. Last year alone, 7,500 megawatts of solar PV was installed – enough to power more than one million homes.

The clean tech sector in China is staggering. China is now the world’s largest investor in clean energy, investing $54 billion in 2010, mainly in wind and solar. China will quadruple its wind power capacity to 200,000 megawatts by 2020.

But China is also grappling with massive environmental problems as hundreds of millions of its people move from rural areas to east coast cities – the biggest migration in history. Now China is starting to build greener cities. This is a major opportunity for Australian firms who have considerable expertise in engineering, city planning, waste and water management.

Where are the other opportunities for Australia and Victoria in the clean economy?

A number of companies are leading the way in green building but there are massive opportunities to make our existing buildings and new suburbs more sustainable. Our manufacturers and industry would be more profitable and long-lasting if they reduced their costs through energy efficiency. We have high quality educational institutions that could attract more foreign students to learn how to meet global sustainability challenges. And we have great renewable energy resources with plenty of sun and wind and productive opportunities for algae based biofuels, wave power and geothermal power.

Modelling for the Climate Institute shows that with the right policies close to 34,000 new jobs could be created in clean energy in Australia by 2030, 7,800 of them in Victoria. Many of these jobs could be created in regional Australia where the best renewable resources are located. New wind farms could lead to billions of dollars of investment and thousands of jobs in construction, virtually all in regional Australia. However the industry is facing a headwind in Victoria courtesy of new government planning regulations that make it tougher to build a wind farm than a coal fired generator.

Renewable energy is only part of the story. A report by the ACTU and ACF estimated that 500,000 new jobs could be created in Australia by 2030 with the right incentives across six key sectors: renewables, energy efficiency, sustainable water, biomaterials, green buildings, waste and recycling.

A price on carbon and the Federal Government’s $10 billion Clean Energy Finance Corporation are steps in the right direction. But states and regions should develop plans that link clean economy opportunities and carbon reduction with new business opportunities and jobs.

Some regions are already doing that. Geelong and Gippsland have developed low carbon growth plans with the assistance of ClimateWorks Australia that identify the most financially attractive opportunities. Geelong has identified $1 billion of inward investment that could be attracted through building and manufacturing efficiency, transport improvements, cogeneration and generating power from waste. Gippsland has identified clean economy opportunities that would generate over $800 million in investment to the region and save businesses and households over $100 million a year through more efficient energy use.

Now is not the time to go backwards in Victoria. A plan to make the most of clean economy opportunities can create long-term, well paid jobs. As Oregon Governor John Kitzhaber said at the launch of the Pacific Coast action plan: “Job creation rates in the clean economy are well above those for other shrinking sectors of the economy, pay better, and have been more resilient to the recent economic downturn.”

John Thwaites, former Deputy Premier of Victoria, is Professorial Fellow Monash University and Chair of Monash Sustainability Institute and ClimateWorks Australia.

 

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Death in Tonga

April 2012

• Alexander Downer

Not long after becoming foreign minister I made a visit to Tonga. Now Tonga’s a hard place to get to so I flew there in an RAAF executive jet. I was told by the Australian mission in Nuku’Alofa that the then Crown Prince would meet me at the airport. 

That was my first surprise. Sitting on the tarmac as the aircraft pulled up was a London taxi. You know the sort. Black and boxy with immense room in the back. And out of the back of the taxi emerged a rather corpulent Crown Prince. He greeted me warmly and ushered me into the taxi. It was quite a vehicle. Instead of black plastic or nylon cloth seats as you would find in London, it was upholstered in the finest white Connolly hide. And instead of metal facias and lining, Rolls Royce style walnut had been used.

But the mechanicals were pure London taxi.

The Crown Prince took me in this extraordinary conveyance not to my hotel but to his house which was half way between the airport and the town of Nuku’Alofa. This was my second surprise. The house had none of the characteristics of a Tongan dwelling, not even of a Pacific Island palace. It was a reproduction of a Palladian villa. Pure Italian. The architect had been recruited in Italy and the design based on an 18th century Italian nobleman’s villa.

To be honest, it was a truly elegant place although it looked idiosyncratic in Tonga. The furnishings were clearly carefully chosen by a celebrated European design house. A combination of English eighteenth century furniture and continental drapes and wall paper. Nice.

The Crown Prince introduced me to the manager of the villa who seemed to be the organiser of the ensuing banquet. I know it’s politically incorrect to say this but I want you to understand the scene. She was the most beautiful woman. But you know the sort: beautiful but almost entirely silent! Pity. I like talkers!

And what would you expect to be served for pre-dinner drinks in Tonga? Not, I suspect, vintage French champagne but there it was, crystal flutes and all, from the house on Lanson.

Memorable too was the conversation. The Crown Prince had been educated at the renowned British military academy, Sandhurst. He had acquired the accent of the Sandhurst graduate and many of their interests. For half an hour the Crown Prince and I discussed the relative merits of the generals and admirals of the Napoleonic Wars. It was fun. I don’t find many people share my interest in history.

The banquet was exquisite but it went on and on. By 2 am I was dead tired and still the evening ploughed on. Finally, it was time to go and I was driven to our hotel. It was a world away from the Palladian villa. It was a dump. But I had a bed and I fell into it and mercifully slept.

Well, the years passed, the King died and this unusual Crown Prince became the King.

For someone so supremely aristocratic, the new King became a champion of democracy. In the face of protests against a regime which lacked true democratic legitimacy, he guided Tonga towards what we all understand as democratic norms.

The next time I visited Tonga, we had dinner again at the Palladian villa. This time, the by then King outlined his plans to redevelop Nuku’Alofa’s centre into a reproduction of renaissance Sienna. It was a fine idea but I couldn’t quite understand the maths. The plans looked impressive but the cost was prohibitive. And so it was.

In mid March this year, the King of Tonga died. It was sad he died in his mid sixties. A tear rolled down my cheeks as I read the news. He was a good man. An eccentric for sure but he was a man who had good instincts and a good heart. He knew the virtues of democracy and knew his country had to catch up with the modern world.

This was one of the more idiosyncratic eras of the South Pacific. I had encouraged him and his prime minister to modernise his political system and the King did it. Good on him. And by doing so he had stabilised his country.

There is a message in all this for the new foreign minister, Bob Carr. The South Pacific is part of Australia’s neighbourhood. We are the biggest and most powerful country in the region. Many of the small island states depend on us for their livelihoods and for wise advice. It’s understandable the Australian foreign minister focuses on the big powers of Asia, woos Washington and wrestles with a variety of multilateral issues.

But he has to devote a bit of time every year visiting and getting to know the leaders of the Pacific. What is more, he will enjoy it. And he will enjoy the company of many of the region’s unusual personalities.

 

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How green is your renovation? The life cycle of homes

March 2012

• John Thwaites

Home renovation is a national pastime for Australians. Whether it is TV shows like The Renovators and The Block or whether we just like to keep up with our neighbours, something is leading us to spend a fortune on extensions out the back, en suites and new kitchens. Australians spend about as much each year on upgrading existing homes as we do on building new ones.

When our family decided to do the standard back extension to an existing Edwardian home, I was surprised at the size of the builder’s quote.

“But I could buy a whole house for this,” I said. “Well you are, and there is a lot of demolition involved as well,” the builder not unreasonably replied.

At the same time that we are adding on rooms to existing houses, new houses are getting bigger and bigger. The average size of new houses has grown by about 40 percent over the last twenty years. This not only has a financial cost but an environmental cost as well in the energy, water and materials used in construction and in the energy needed to heat and cool our larger homes.

Last month I wrote about the life cycle of clothes and their impact on the environment. It turns out that most of the environmental impact comes not from production of clothes but from consumer use: washing, ironing and drying them.

But what about buildings? How much of their environmental impact comes from building construction and materials? And how much comes from their occupation?

Traditionally sustainability experts have focused on energy use in buildings: the energy used to heat and cool them and to run lights and appliances. This is understandable as buildings use around 40 percent of Australia’s energy and produce around 20 percent of our greenhouse gas emissions. Building regulations have been introduced to improve design and thermal efficiency and new buildings must now be built to a six star standard. As well, more efficient heating and cooling systems and appliances are available that can slash energy use and greenhouse emissions.

Just as life cycle assessment (LCA) enables us to better understand the environmental impact of clothing, so also it can help with buildings. In Melbourne we have experts in this life cycle assessment including Professor Ralph Horne and his team at the Centre for Design at RMIT.

Professor Horne has carried out a case study of housing in Victoria that compares the energy required for the whole building life cycle: the materials used in construction, the operational energy required to heat and cool it, and maintenance over a fifty year life of the house. The study reviewed four housing types: brick veneer with a concrete slab, mud brick with a concrete slab, weatherboard with a concrete slab and weatherboard with a timber sub-floor.

In the construction phase, the mud brick house with a concrete slab had the lowest emissions, because the production of mud bricks was far less energy intensive than producing commercial bricks or timber. The weatherboard with a timber sub-floor had less energy demand than the houses with a concrete slab because of the high energy and greenhouse gas emissions associated with the production of cement: approximately one kilogram of carbon dioxide for each kilogram of cement produced.

However, a different story emerged when Professor Horne investigated the operational energy demand for heating and cooling of the different housing types over a fifty year life. Here the brick veneer on a concrete slab performed best and the mud brick house used 70 percent more energy. Essentially this is because the mud brick house had no cavity wall or insulation and so required a lot of heating in the Victorian winter.

So which is more important – the embodied energy in the construction phase (where the mud brick performed best) or the energy used in operating the house over its lifespan (where the brick veneer did better)?

Professor Horne found that taking the whole life cycle into account including construction, operation and maintenance, the brick veneer used about 30 percent less energy than the mud brick. He found that in all cases the lifetime operational energy used was much greater than the embodied energy. In the mud brick house the operational energy represented nearly 90 percent of total energy and in the brick veneer it was around 70 percent.

However, Professor Horne also found that in very energy efficient housing, embodied energy comprises a greater proportion of lifecycle energy: up to 60 percent. As energy efficiency standards improve, embodied energy will become increasingly important. This is an important finding because our building regulations currently only cover operational performance and not the whole life cycle.

Embodied energy becomes increasingly important when we renovate our homes regularly. As part of the house is demolished and replaced, a lot of the building fabric becomes waste. New materials represent considerable extra embodied energy in our homes. The more frequently we renovate the greater the proportion of embodied energy.

Last month I pointed to Tullia Jack’s research that indicated we could cut down our environmental impact by reducing unnecessary washing of clothes. Perhaps we also need to make our home renovations a little more modest, or at least recycle as many of the building materials as possible.

John Thwaites, former Deputy Premier of Victoria, is Professorial Fellow Monash University and Chair of the Monash Sustainability Institute.

 

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Who the bloody hell are we?

March 2012

• Peter Singline & David Ansett

Australia needs a Nation Branding Strategy.

 

Yes, we escaped the financial meltdown of 2008 relatively unscathed – but to a large degree, this was gifted to us by the strength of the current resources boom. However, the resulting two-speed economy is, by default, shaping significant industry re-structuring.

The booming resources-fuelled Australian dollar is also beginning to shape our future. Exporters and import competing businesses are finding it more and more difficult to compete, simply because whatever previously defined their competitive edge has been significantly discounted. In terms of foreign trade, the two star performers, education and tourism, are being seriously squeezed.

Paul Cleary, in his recent book Too Much Luck: The Mining Boom and Australia’s Future (Black Inc.) cites that numerous studies around the world over a long period have found an inverse relationship between natural resource endowments and overall prosperity. He argues there is a broader effect that takes place as resource wealth drives the local currency up and sucks the life out of the rest of the economy.

Add to this what economist Michael Spence highlights in his book The Next Convergence: The Future Economic Growth in a Multispeed World – that many advanced western economies, like the US, are only showing employment growth in what he refers to as ‘non tradeable’ industries, such as health care and Government. In Australia we have a similar trend, with the biggest job growth in the four years since Labor came to power being the 250,000 jobs that have shifted into the healthcare and social assistance sector, along with 103,000 jobs added to public administration and safety. In the 1960s, social assistance transfers amounted to around 4% of GDP in Australia, now they have doubled to 8%.

Spence also highlights the role that globalisation and technology are playing in moving the world closer to a single market for labour. The movement of work abroad in the search of lower labour costs is no longer confined to manufacturing, but also now includes white collar jobs from computer programming, to copy-writing and back office legal tasks.

Add to these structural changes the cry from the business sector that Australia in a more general sense is losing the battle to be internationally competitive, and has become a high-cost, low productivity country, complacent about what is needed to secure its prosperity. Business Council of Australia president Tony Shepherd summed up their mindset (and frankly also ours) brilliantly when he said Australians were adopting a ‘magic pudding approach’ to the economy, relying on the resources boom rather than taking difficult decisions to boost competitiveness.

The world has changed enormously in the past few decades and we need to change with it, but we are lacking a coherent game plan. A game plan that puts sectorial self interest aside and adopts a nationwide mindset as to how we should forge our future together. We are therefore advocating that the nation’s major stakeholders come together and adopt a nation branding mindset. True branding, not in the sense of logo or a strap line, but where all key stakeholders within Australia engage in structured conversations about our future. Representatives from industry, Government, NGOs, the arts, education, health, agriculture, media and other relevant sectors, along with members of the wider community need to participate in deep, factual and informed dialogue around the desired pathways for building Australia’s future prosperity.

We all intuitively understand the role brands play in our purchase decisions. What we need to do now is expand our brand paradigm to the context of the brand owner, and the planning and decision making involved in successfully building a brand. Australia is our brand, we all own it, and the question is how we are going to responsibly develop it.
When one reflects on the public utterances about concerns over Australia’s economic future, it is all a little one-dimensional. It is largely focused on the need to increase productivity and remove bureaucratic red tape. There is an underlying tone that implies that whatever needs to be done, it is some else’s responsibility to do it. However, an authentic and rigorous nation branding project has the power to imbue a shared sense of responsibility for the future prosperity of Australia.

Finland published its brand plan for the future in 2010. As a case study it is notable not just because of the noble and inspiring mission it has set for itself, but also because it is a reminder that in the competitive frontier of globalisation our competitors are turning their mind to how they wish to position themselves relative to Australia and other countries. It also provides us with a useful model of how to weave culture, social conscience and commerce into a holistic vision for the future.

Interestingly, over the years Australia has been referenced in various marketing publications as a country that has undertaken successful nation branding. But from our perspective it has never truly moved beyond positioning Australia as a remarkable tourist destination (which it is). However, the speed of globalisation on every front calls for a far more comprehensive brand mindset. And fast. We need a game plan capable of directing our focus and investments.

Which industries and infrastructure do we build? What capabilities and knowledge do we nurture? How do we increase productivity and share the rewards? What is it about our products and services that positions them positively in world markets? How do we transfer the economic wealth we are currently generating from mining into a foundation for the prosperity of future generations?

Australia is our collective brand. We have a shared responsibility to actively manage its future prosperity. We need to get cracking; we need to start the conversation in earnest today.

Peter Singline and David Ansett are co-founders and directors of Truly Deeply, a Melbourne based brand strategy and design consultancy.
trulydeeply.com.au

 

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Saved but unseen

March 2012

• Alex McCulloch

Art cast into the dark by superannuation laws?

 

Investing in art has become a legitimate way for collectors to contribute to their superannuation funds. Indeed Self Managed Super Funds (SMSF), which may be a choice for art collectors, have grown substantially and attract numbers that contribute over 30% of monies/assets held in all superannuation funds.

There are laws, however, that must be adhered to, the most significant being that the benefits of these funds can only be accessed at retirement. This of course applies to all superannuation funds with rules that, for example, label monetary investments, usually deducted from incomes, as preserved and therefore untouchable. Somehow this is a logical and comprehensible edict when applied to financial contributions but when applied to art, whilst the logic is sustainable in financial terms, is less so when one thinks of beautiful art works ‘cast into the dark’ in storage places. And this is a requirement for those investing in art works as part of their self-managed superannuation fund.

Criss Cannings’ Banksia and Wild Flowers is a good test case. Resplendent in its hues of the Australian bush, these flowers exude a dynamic contrast in their golds, greens, reds, pinks and greens. This still life set against an intense white light is necessarily all about the external world of nature and one cannot help being perturbed at the thought of it being put away into storage.

To actually hang an artwork on the wall to be enjoyed and claimed as a personal asset is a breach of superannuation law. Instead, it is the case that some of Australia’s finest art for the present generation of art lovers cannot be seen – though of course the collector can visit the storage space and look at it when the need occurs. This furtive lurking in dark places to view extraordinary works of colour and design is perhaps yet another anomaly of the commodification of art that is so much a part of capitalism and its investment strategies.

The new rules for artwork held at 30 June 2011 grant a five-year transitional period for funds to comply. They include the requirement that artworks purchased after this date cannot be stored in the private residence of the members or related parties. ‘Private residence’ includes the land used for private residence and other buildings on that land such as a garage or a shed. Lurking in the back shed to see one’s art collection has been made redundant.

Does this make sense? Is there a way that this might be changed and in turn benefit the art industry, in particular, young artists attempting to survive financially? Or is there a way for art investors, despite the superannuation laws, to ensure these paintings can be seen?

Investment in art has grown substantially given that this investment can be linked to superannuation funds. Tax concessions offered along with predictions that these artworks will increase in value at a higher rate than investment in shares and property has buoyed the industry, whether the investors are owners of commercial galleries, workers in the art world such as curators, art hangers, administrative staff et al, or even, and perhaps most significantly, the artists themselves. This increased investment has also provided means by which new professions have developed within the art industry, not the least being post-graduate degrees in art curatorship, art history, conservation, the role of art as cultural capital, and general knowledge. If art is conceived as a canny form of investment, people who buy art need advice from people trained in the area, whether formally or by experience in the art world, who have been shown to provide professional advice that has ensured a sound return on investment.

Non-compliance with superannuation laws that insist that the art works be placed in storage has heavy penalties: tax benefits are withdrawn and art collectors would therefore be expected to pay 45% tax on the perceived value of the collection and forced to sell the works within five years heavily reducing the anticipated value of the works if retained for a longer period.

Although the current law no longer allows 5% of a collection owned by a fund (since 30 June 2011) to be on show in one’s home, funds that held artworks at 30 June 2011 have five years (to 30 June 2016) to comply with the new rules. For artworks purchased by a fund after 1 July 2011 it is an offence if the members of the fund or any related parties have any use of these pieces.

However this story has many possible happy endings for the art collector. Art must not be cast into the dark. There are other possibilities open to the art lover who wishes to indulge in his/her passion, accumulate superannuation funds and simultaneously enjoy continual public access to their artwork. The advantages need to be seen in terms of the expenses incurred. Superannuation rules have now added costs to the art investor in demanding annual evaluations by experts in the field. There is now also a requirement for artwork purchased after 1 July 2011 to be insured in the name of the fund within seven days of acquisition. And of course it has always been the case that art when sold from the fund required a market valuation.

On the other hand there is also the possibility of renting out the art in public buildings or allowing the artworks to be exhibited in public in other circumstances. It becomes therefore a choice for art collectors to either hide them away or bring them into the light.

Whether it can be claimed that investing in art is necessarily more profitable than investment in shares and property is problematic. Certainly there are many examples where this is the case. Investment by its nature is risky and is affected by the unknowable elements of global economics and levels of inflation, not to mention the question of the enduring popularity and/or acclaim for the works of particular artists or genre. There are careless investors in this area as there are in others, which is why choosing the right advisors is of paramount importance.

Collectors of art who choose to have Self Managed Super Funds do have choices, and it is to be hoped that one of these is not to ignore the loophole that allows precious artifacts to be seen either in public galleries as a community service, or as rentals which receive 6%-8% value of the art annually.

Alex McCulloch is Director, Metro Gallery.
Disclaimer: Please consult your accountant or a financial expert before making any decisions on your financial future.

Image: Criss Canning, Banksia and Wildflowers, oil on canvas, 61 x 56 cm (detail)

 

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spare a thought for the punters

March 2012

• Alexander Downer

 

When we think of Greece we think of history and holidays. You know, Aristotle, Plato and Socrates and, of course Alexander the Great. But that was millennia ago. These days, there’s the magnificence of the Acropolis towering over Athens, the beauty of Corfu with its sparkling sea, charming villages and tempting restaurants and the almost constant sunshine.

But for Greeks, their own beautiful country has fallen on very hard times.

In the Australian, British and American media it’s the Greeks who have brought all this on themselves. They signed up to joining the euro and in doing so accepted that their  government debt should never exceed 60 per cent of GDP and the budget deficit should stay below 3 per cent of GDP.   

Well, they’ve come nowhere near it. Their government debt is a massive 160 per cent of GDP – nearly three times the allowable limit. And the budget deficit is over 10 per cent of GDP, more than three times the allowable limit.

It’s a terrible story of public policy failure. All this debt has to be funded just as your own household debt has to be funded. Without help, it can’t be. The government would be unable to service its loans. So to avoid default the Greeks have asked the rest of the eurozone for help. And this is my point. They’ve said they will but at a very steep price. That price will extract a very high human toll. Greece has to implement an austerity package more drastic and socially savage than anything we’ve experienced since the Great Depression.

Think about it: before the latest package, Greece had already agreed to increase taxes by around $8 billion by 2013. That means increasing the GST, reducing the tax free threshold, the introduction of taxes on luxuries and the payment by everyone of a “solidarity bonus” of between 1 and 2 per cent.

That isn’t all. 30,000 public servants are to be retrenched, pensions reduced by up to 20 per cent and public sector pay severely cut.

Now imagine doing all that here in Australia! Imagine the reaction of the unions. Imagine the reaction of voters! The public would be outraged.

And this was before the latest, additional austerity measures were foisted on the Greeks. With the latest package, they have to cut government spending by a further 1.5 per cent of GDP. If we had to do that, it would mean spending cuts of around $150 billion. This time there are to be further cuts in public sector jobs and public sector wages. And the minimum wage has to be cut by over 20 per cent.

I’m not sure why but our media don’t focus on this pain. Riots may not be responsible or even excusable but I think you’d agree, with austerity packages of these dimensions they are explicable. By the way, all this pain will allow Greece to access €130 billion of extra loans so that it won’t have to default on its borrowings. That means Greece can stay in the euro.

Some Greeks – and others – think they might be a better off just defaulting on their loans. Well, it’s hard to believe this will make matters better. For a start, Greece would leave the eurozone and re-introduce the Drachma. At a guess is would depreciate by about 50 per cent. So the savings and assets of Greeks would be halved in value. They couldn’t get loans. No one would want to lend to them. So the cuts which they have to make under the austerity packages would have to be made anyway.

And then there’s the contagion effect. Europe’s banks hold a whole lot of Greek debt. For a start, French banks hold €15 billion of Greek government debt. German banks hold about €22 billion. Add to that the fact those same banks hold a good deal of Greek private sector debt and the problem becomes more worrying. All up, French banks hold over €50 billion of Greek debt and German banks around €35 billion.

A collapse of Greece would mean all that money was lost. So French and German banks would have to be bailed out by their governments. And that’s just the French and Germans. Spare a thought for little Cyprus which would need plenty of outside help.

So sure, Greece is a lovely place and the people are warm and friendly. But you need to understand why they are so agitated. And who’s to blame?  Well, that’s a tough one. For a start, successive Greek governments cooked the books. Secondly, the banks were more than happy to keep lending money thinking that because Greece was in the euro nothing could go wrong. Thirdly, the politicians just kept spending unconcerned about the consequences. Finally, the voters elected those politicians.

So they can work out for themselves who is to blame. But spare a thought for the average Greek “working family”. They are seeing their living standards devastated. For those of us who like Greece and like the Greeks, it’s a very sad situation.

 

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Irregular writings

March 2012

• Dave Graney

A trip to Planet Hobart

Hobart. It’s a different joint every time you step onto the island. Every time you turn around! Sometimes it’s a very sophisticated scene, other times, a world of sleepy thugs. Not very scary though as, you know, I’m from Melbourne.

The flight over was strange. I walked up the gangway and watched the pilot washing the window of the plane. At least he didn’t get a squeegee out like he was in a gas station. Two extremely tall men were last to get on. A voice from nowhere was announcing their presence as they walked up the plane. They squeezed into a couple of sets back behind and across from me. Then the “voice” appeared at eye level to me. A Person of Restricted Growth. With a very loud, deep, rasping voice. He climbed in between two old ladies with a few apologies that would not have been out of place in the rural 1940s and then sat perched high on his seat. His legs were not in proportion to the rest of him and didn’t reach the floor. The two tall men behind kept ragging him and touching his crusty baseball cap and he said something along the lines of “strike me lucky! It’s gonna be outta control dealin’ with these jokers for the whole trip!” Colloquial antiquities abounded. The show was on for young and old! The old ladies giggled, kind of pleased to be supporting players to a bunch of recognizeable, old school blokes.

As the flight took off the loud voiced man had a VB in his hand as soon as he could and proceeded to burp very loudly. As if he was in a shearing shed or work lunchroom. Only this time there were women around. Ducks on the pond! Didn’t seem to phase him though. He carried on regardless. A trooper. As we touched down he and the old lady were both deep into nodding tut-tutting agreement about some politically correct bureaucratic bungling that was impinging upon the world as they experienced it. Madness – but what can you do?
I took a bus to the venue. I was staying in a room above the stage.

I went for a walk to the harbour to buy some fish and chips from one of the punts there. On the way a young sheila smiled and winked at me. On the way back another young bird gave me a flying flirt from a passing car. Of course I pulled my gut in and walked a little lighter. Like I still had it. At this stage, that sort of interaction is odd and seldom. Maybe they don’t have enough men in Hobart?

Seemed like a bit of a ghost town, something must be on! Suits me as I’m feeling a little ghostly.

The next day I went for another walk around the town. It was cold and wet. Hobart always turns it on for me. Last two times there I have been chesty, phlegmy, feverish and always walking headlong into an Antarctic wind. This time I was in rude health and the wind was light. I find an apple. I always look for them in the apple isle. I feel it’s my duty. They are not easy to find though, as if the locals are ashamed of them and shush them under the couch when visitors are on the scene.

Poncey Melbourne acquaintances have yelled at me about the new art museum in Hobart. I have nothing but time here but don’t take the opportunity to take the ferry to MONA. Yeah, I’m a philistine. Guilty. I’ll make the trip one day, when I have even more time to fill up. I enjoy the freakiness of Hobart itself. Just being there. I’ve read lots of great stories written about the island. Christopher Koch’s “The Double Man” being my favourite. Witchcraft, dope and folk rock. I love those flavours. When I get to the end of the kinks that abound in Tasmania I’ll get on the ferry and avail myself of the freaked collection at the gallery. That’s my story!

At the gig I am alone with my songs and an acoustic. Takes me a few songs to dig into the right tempo and intensity of playing. When you start to play a solo gig, after playing with a band a lot, you try to fill up all the noise a bit too much. Strumming and singing out, getting some smoke and noise happening. I started out pretty low key. A fellow who’d wanted me to sign a book had mentioned some songs he liked. I did them first up. The first time I’d touched them in years. “I’m just havin’ one of those lives” and “A million dollars in a red velvet suit”.
I walk through the two one hour sets, enjoying myself and visiting all kinds of tunes I normally can’t access with my band. Yes, I am otherwise being held prisoner.

Making the most of this tiny rush for freedom I play all kinds of tunes and feels and get to enjoy the picking and singing and groaning. Sick skills. After the show I walk upstairs and read myself to sleep.

The next morning I get a cab to the airport. I see a table load of African Americans in the food area and gravitate towards them. People from the real world. I enjoy a coffee and a literary journal I have brought with me in my bag and ascertain that they are the band members for the Pointer Sisters and they had played at the casino last night. As I walk to the plane I hear a familiar sound. “The voice” appears in the queue along with his too tall buddies, all cracking up at some pedestrian bloke shit that a regular sized person would have stepped over pretty easily.

Back in Melbourne, I grabbed my guitar and took a bus and a train to the hills. At the train station there was another Person of Restricted Growth at the bottom of the escalator. This one had hipster glasses and a rockabilly hairdo. Melbourne style. Got off the train at my stop and walked up the hills. Hadn’t really talked to anyone for a couple of days but had sung my life out for two hours the night before. Sat around in an empty, quiet house, taking the silence as it was. Happy to be with a night of no appointments or places to be. I’d already started the sweet slide downhill to the changing of the years.

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