October 03, 2013

Horse 1548 - Party Like It's 1994

Well within three years, a tax White Paper will have canvassed how we can have lower, simpler, fairer taxes for higher economic growth and better and more sustained services.
A federalism White Paper will have canvassed how overlap and duplication between different levels of government can be reduced so that it will be much clearer who is in charge of what and who is responsible when things are wrong.
Recommendations from these reviews that the government takes to the 2016 election will form a part of any incoming Coalition government’s second term agenda.
- Tony Abbott, to the National Press Club, 2nd Sep 2013

Let's cut to the chase here be just be upfront about what that Coalition government’s second term agenda is going to be. It's been less than a month since the Federal Election and parliament has not even sat yet but several key steps are already in place. Some of those steps as we have seen even just today, have been a turning of the clocks and calendars back to 1994.
To peek into the future of 2016 from 2013 is almost a parallel of peeking into the future of 1997 from 1994; the strange thing is that many of the characters are the same.

Malcolm Turnbull
Mr Turnbull in 1994 was as now, highly intelligent and very very astute in the world of business. He had already run a successful investment banking firm with former Premier of NSW, Neville Wran and the son of a former Prime Minister and ex-CEO of the State Bank of New South Wales, Nicholas Whitlam.
Malcolm was in 1994 also very forward looking. Following Eternal September when America Online (Aol) opened its services up to the general public, Malcolm saw that this was a brilliant opportunity to jump in on the ground floor of what would become a massive industry. From his purchase of a $500,000 holding in OzEmail, he would see that grow a staggering one-hundred-and-fourteen-fold when he finally sold his stake for $57 million in 1999 to WorldCom. OzEmail would be the very first Australian stock to be listed on the NASDAQ, which means to suggest that in 1994 Mr Turnbull was either incredibly forward looking or knew a good investment deal when the opportunity presented itself.

Ziggy Switkowski
Ziggy or to be more polite Zygmunt, is very skilled at watching things decay. He has a PhD in nuclear physics no less and much much later became head of ANSTO.
In 1994 though, Ziggy was head of a formerly owned government-entity which had changed its name from AUSSAT to Optus. In September of 1994, the telecommunications market in Australia was deregulated and Optus joined Telstra.
Although it was Frank Blount who was head of Telstra in 1997 when the company was floated, Ziggy replaced him in 1999 and was then given the job of basically degrading the company so that it could be split up and sold more effectively through the T2 and T3 tranches. Ziggy appointed former Optus executive Ted Pretty to the Convergent Business Group and another Optus executive, Dick Simpson to the head of Mobile and Wireless Communications.
Basically after having stripped the company, letting the maintenance and replacement schedules fall to the rate to the point when in the year he was replaced by Sol Trujillo, Telstra received a record 14.3 million fault calls, Ziggy lept with a golden parachute into a director's position at the banking and insurance group Suncorp.

Tony Abbott
The current Member for Warringah was first elected to this safe seat after working as a press secretary to Dr John Hewson and the sudden resignation of Michael MacKellar. He was appointed to the position of Parliamentary Secretary to the Minister for Employment, Education, Training and Youth Affairs under Senator Amanda Vanstone before finally being promoted to the position of Minister for that same department in 1998.
Abbott was perhaps being groomed for stardom by the PM John Howard when he was later appointed to the position of Minister Assisting the Prime Minister for the Public Service in 2001. Indeed in Howard's autobiography "Lazarus Rising: A Personal and Political Autobiography" he writes that it was on his recommendation that Hewson appoint Abbott as his press secretary. John Howard, the master of one of the longest political comebacks in Australian political history (having been treasurer from 1977-83 before finally becoming PM in 1996, 13 years later), must have instilled in Tony a sense of the long game of politics and patience.

So fast forward to 2013. Tony Abbott is now the Prime Minister, Malcolm Turnbull is now the Minister for Communications and only just today, Ziggy Switkowski has been given the top spot at NBN Co. What does 2016 look like?
If 1994 was anything to go by, Abbott will be looking to privatise something... anything. Most of the assets that the government once owned were flogged off years ago. The silverware cabinet is decidedly bare. Really all that's left that's worth selling are Medibank Private, the ABC and SBS and NBN Co.
It's curious that Ziggy Switkowski who was charged with gutting Telstra should be appointed the head of NBN Co. It's also curious that within a week, five of the seven members of the NBN Co board tendered their resignations to Mr Turnbull. Is this a case of rats jumping before the ship has even been scuttled? I think so.
Just be very very afraid when the word "mandate" gets bandied about.

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