A New Education Myth: Latham's Reform Plans

Mark Latham's policy that good teachers in bad schools should be paid more is a good idea. It represents a recognition from the Labor Party that market forces apply in education as they do in every other walk of life.

If teachers are paid the same regardless of whether they are at a "good" government school in a middle-class suburb where most students come from two-parent families -- or at a "bad" school in an economically depressed area where many of the students come from single-parent families suffering poverty, it is obvious what the outcome will be.

And this is precisely what has occurred. The best and most experienced teachers in the government system are overwhelmingly concentrated in schools which are selective or situated in affluent locations.

The conclusion from research conducted both in Australia and overseas is that the main reason why students from "bad" schools perform poorly compared to students from "good" schools is not because of students' background. It is because of the qualities of the school itself, particularly the standard of teaching and educational leadership offered by the headmaster or principal.

The great myth of education policy in this country is that non-government schools outperform government schools because government schools must teach any student that wishes to attend, while non-government have the privilege of choosing who they enrol.

In fact the reason why non-government schools achieve higher outcomes is because they employ better teachers than do government schools, and they are largely free from the dictates of state education departments and teacher unions.

The idea of using salary incentives to attract teachers to bad schools, and more generally to improve the pay of good teachers is hardly new or radical.

Over the last few decades both Liberal and Labor politicians have supported the concept. For example, it was a plank of the education policy of the first Kennett government in 1992, and nearly ten years, Latham himself floated the proposal in What did you learn today?

And yet nothing has happened.

This year a teacher at the top of the pay scale in a government school in Sydney will be paid $59,000 per year regardless of their competence, and regardless of the type of school at which they teach.

Why?

Because the union of teachers in government schools, the Australia Education Union (AEU) is implacably opposed to both merit pay and differential salaries because such measures require an assessment of the performance of individual teachers and of their school.

As recently as November last year the Victorian Branch of the AEU said its gravest fear was the introduction of performance-based pay scales.

Since the 1970s the AEU has consistently argued that instead of paying good teachers better, governments should employ more teachers to reduce class sizes.

Such a strategy increases the unions' membership, but its educational worth is dubious.

This is appreciated by parents who are increasingly choosing non-government schools ahead of government schools even though in many cases non-government schools have larger class sizes and fewer resources than their government counterparts.

Providing a bad government school with additional poor or inexperienced teachers is of little value. But if such a school could replace half of its teachers on salaries of $59,000 with the same number of teachers each paid $85,000 the result would be quite different.

This is precisely the sort of policy being pursued by the Blair Government in an effort to deal with what it calls "underperforming schools".

Whether Latham has the courage of his claimed convictions time will tell, but so far the signs are not good.

The Howard government's university legislation, which would give universities the same sort of flexibility that Latham wants for government schools is being blocked by Labor in the Senate.

Likewise, notwithstanding his cries about the "crisis of masculinity" Latham refused to support the Coalition's measures to allow for male only teacher scholarships.

The lesson of the last Labor leader who attempted to confront the AEU should not be forgotten.

In 1999 John Brumby the then leader of the Victorian Labor opposition suggested something very similar to what Latham is proposing. A few months later Brumby was forced to quit after a caucus revolt orchestrated by the teachers' union.

Unfortunately for Latham he can't have it both ways. He can't reform government schools and satisfy the demands of one of Labor's core constituencies.

If Mark Latham was serious about the policies he's announced he deserves to be applauded. The only problem is he isn't. If he was serious he wouldn't have committed himself to implement his policy "in cooperation" with the AEU -- which is precisely what he has done.

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Making a Meal Over GM Ban

It turns out that aside from chomping on kebabs in his recent visit to the Middle East, Victorian Premier Steve Bracks was also undertaking market research.  He discovered, according to a press release on Thursday, that many parts of the Middle East have reservations about GM foods.  He offered this as a major reason for banning the production of GM canola in Victoria.  Canola is the most important oilseed grown in Australia and is the basis for a range of products including margarine and cooking oil.

Victoria's action puts pressure on the NSW Government to do likewise.

In announcing the ban, Mr Bracks acknowledged that all scientific studies and the Commonwealth's Gene Technology Regulator had declared the product safe for human health and the environment.  His case rested on an alleged wish to avoid jeopardising key Victorian markets, like the Middle East, where he claimed there were some concerns.

Yet the report he commissioned (by ACIL Tasman) could find no evidence anywhere that any such concerns adversely affected prices.  That report also pointed out that Australia's main competitors which have embraced the new technology (the US, Canada, Argentina) have lost no market share.  In the US, GM production accounts for over 80 per cent of soy, 40 per cent of corn and 75 per cent of canola.

Moreover, the Middle East, far from shying away from GM foods, is actually a major importer of GM grains from North America!  And the timing of the decision is exquisite, since last week saw the lifting of the EU's embargo on GM canola, removing the restraint from the only area where it had been in place!

It also turns out, according to the data assembled by the Victorian Government's consultants, that Australia actually imports GM products.  Soy meal is imported from the US and its main use is as feed for dairy cattle.

So why introduce the ban?

Well there is the usual noisy clutch of anti-science groups and the organic farmers.  There is also support from some other farmers who want to proclaim their goods as GM free and avoid any costs entailed in segregating them from GM products.  They care little that their fellow farmers are denied a product with massive productivity advantages.

There is another constituency the government quotes in support of its decision.  This includes some major players in the Victorian dairy sector, ironically a sector that is already using GM products for stock feed.  Dairying may, however, feel it stands to gain from the decision to exclude home grown canola.  After all, butter and margarine (mainly produced from canola) are vintage competitors.  Older Australians will recall the days when governments advantaged butter by insisting on margarine being coloured pink.  Some dairy producers may see a threat from GM canola, which is 15-30 per cent more productive than regular canola.  That would pretty soon translate into a price reduction of this order and lower prices to the consumer.

Preventing a competitor obtaining an advantage is a classic industry strategy.  Equally, the proper role of government is to combat this.

The dairy industry actually has no issues with GM products, and the United Dairyfarmers of Victoria have criticised those in the industry that gave comfort to the Victorian government position.  The industry is keenly awaiting the development of faster growing or salt tolerant GM grasses as inputs to its own products.

The Bracks decision also flies in the face of a major arm of the government's industry strategy.  It closes many doors on the biotechnology industry.  Paradoxically, the Victorian government has been engaged in a bidding war with Queensland to attract biotechnology research to the state.  It has funded bodies like the BioMelbourne Network to promote biotechnology in foods "such as papaya, soybeans and corn".  This is now looking like a bucketful of wasted money, especially since its main rival, Queensland, already produces GM crops and has no problem abiding by the decisions of the Commonwealth's expert, the Gene Technology Regulator.

In this respect, the experience of the European Union is salutary.  EU Commissioner Philippe Busquin lamented that the EU moratorium on GM crops taken without sound scientific evidence, had severely harmed European capabilities.  He said, "If we do not reverse the trend now, we will be unable to reap the benefits of the life science revolution and become dependent on technologies developed elsewhere".

Of course, Bracks' claims of industry support for his fundamentally anti-technology decision are purely a smoke screen.  In putting the ban in place, the Bracks government is pandering to irrational green hysteria.  Unfortunately, the decision speaks volumes about the Premier's lack of leadership and willingness to abandon technology and soundly based public policy at the first whiff of a green panic campaign.

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Bracks Sowing GM Seeds of Doubt

If the Bracks Government were honest, it would tell us the real reason it announced the ban on the commercial planting of genetically modified (GM) canola.

Instead of being honest, however, the State Government has given reasons that can not be supported by logical argument, and that fly in the face of expert advice.

Indeed, the Premier is misleading when he claims that the growing of GM crops in Victoria will adversely impact on our grains and dairy export markets and his decision will cost farmers up $135 million per year.

So much for his government concern for rural communities. Last year, in anticipation of the Australian Office of the Gene Technology Regulator giving the go-ahead for the planting of GM canola, the Victorian Government slapped a one-year ban on its commercial planting.

At that time we were promised an independent review of market implications.

It was accepted that there were no human health or environmental issues.

The independent review by Professor Peter Lloyd, released the same day the Premier announced he was extending the ban on the commercial production of GM canola to 2008 (25th March 2004), clearly states: "the Victorian canola industry is an export-orientated industry ... In almost all countries food and products processed from GM canola varieties can be sold, subject in some countries to labelling requirements".

Hence, the crucial question is -- is there a premium for non-GM canola seed over GM canola seed in overseas canola markets?

The answer is a clear "no".

A detailed study undertaken last year by the Australian Bureau of Agricultural and Resource Economics (ABARE) reached the same conclusions: GM products are being traded on the world market; GM producing countries dominate the world grain trade; and that there is no premium for non-GM product.

The Bracks Government commissioned a second report from ACIL Tasman, also released when the decision to continue the ban on GM canola was announced.

This report is also clear in its findings, stating, "while there are some sensitivities to GM crops in Australia's key markets for agricultural produce, there is little or no evidence of any general price discrimination or market access problems."

Interestingly, while the Premier claimed the dairy industry supported the ban on GM canola, the ACIL report explains that the Victorian dairy industry currently imports significant quantities of GM soybean meal to feed its cows.

If the dairy industry is already using GM products, why would it seek to impose restrictions on domestic canola growers?

Double standards are common in the GM debate. Indeed few people realize that fully 35 per cent of the vegetable oil consumed in Australia is from cotton seed -- and the cotton industry has been growing GM crops since 1995.

Interestingly, the first plantings of GM cotton predate the Australian launch of the anti-GM Greenpeace campaign and the formation of the Network of Concerned Farmers.

The anti-GM campaigners are now conveniently ignoring cotton as an important source of vegetable oil and wrongly promoting GM canola as the first GM food crop.

The cotton industry, fearing a backlash from the multinational anti-GM lobby, is saying nothing. Because cotton seed oil extracted from GM cotton is identical to the product crushed from non-GM seeds, no-one has been the wiser.

In Sydney last year, Greenpeace re-launched its True Food Guide.

The big names of the Australian food scene attended the launch where Margaret Fulton declared that she hoped to keep Australia free from GM food and thus our food "safe to eat for my children, grand children and great grandchildren".

Never mind that the takeaway down-the-road was probably selling fish and chips cooked in cotton seed oil.

We can respect Margaret Fulton's desire not to eat GM food -- in the same way that we respect the rights of Moslems not to eat pork -- but the anti-GM campaigners do not appear to accept other people's right to choose GM.

We might choose to eat GM because of real environmental benefits, particularly in terms of reduced insecticide and herbicide use.

For example, the latest GM cotton varieties reduce pesticide use by an impressive 75 per cent. The new GM canola varieties will also require smaller quantities of safer pesticides while giving a higher yield. GM cotton has been an impressive commercial success and is used by over 90 per cent of Australian cotton growers.

The Bracks Government made a big mistake in banning the commercial planting of GM canola. The real reason was not concern for export markets, but fear. Fear of the unknown and fear of a backlash from fearmongers such as Greenpeace.

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Let's be Clear on Native Veg Clearing Rates

Let's be clear on native veg clearing rates

New tree clearing laws will soon come into effect in NSW. They will change the way applications to clear native vegetation are assessed. Under the new rules, locally-based experts on regional Catchment Management Authorities, rather than bureaucrats, will deliberate over applications. The NSW Farmers' Federation has welcomed the changes on the basis the new regime will provide more flexibility and decisions to reject applications will need to be based on "clear scientific reason".

Local decision making was promoted in Queensland a few years ago. The regionally developed plans, however, were never going to be implemented once it became evident that this would result in what the environment movement deemed to be too high a clearing rate. New Queensland legislation, purportedly to outlaw broad-scale tree clearing by December 2006, is due to be introduced into the Queensland Parliament this week.

The tree clearing rate in Queensland averaged 437,000 hectares per year over the period 1991-2001. This includes approximately 757,000 hectares "panic cleared" in 1999-2000 immediately before the introduction of the Vegetation Management Act 2000. However, according to the Queensland Government report Land Cover Change in Queensland 1999-2001, even then, during the height of clearing, the annual clearing rate was only 0.71 per cent of the 81 million hectares of woodland, forest and shrub cover across Queensland.

According to page 14 of the same report, there has been a 5 million hectares increase in the area classified as woody vegetation in Queensland over the period 1992 to 2001.

John Benson's much quoted Setting the Scene: The Native Vegetation of New South Wales report of the Native Vegetation Advisory Council of NSW (1999) emphasizes loss of biodiversity associated with broad-scale tree clearing and shows the total area that has been cleared of native vegetation for each bioregion in NSW (Benson is from the Royal Botanic Gardens, Sydney). The report, however, does not indicate the net change in native vegetation cover. It indicates 35 million hectares of land was cleared before 1921 (page 27) and a number of anecdotes are added to allow the reader to assume that subsequent clearing has made the problem worse.

Curiously, the report does not have a total figure for the State. A simple tally reveals that a lesser value of 28 million ha is recorded being cleared by 1998. Subtracting the 1998 value (28m ha) from the 1921 value (35m ha) would suggest that, despite all clearing in NSW since 1921, there has still been a net increase in native vegetation of approximately 7 million ha. In other words, the general trend is one of increasing native vegetation cover.

The new laws in Queensland and NSW have been developed in a political environmental that has assumed a trend of increasing native vegetation loss -- in particular that there has been a reduction in the extent of forest cover. The official statistics, however, suggest a trend of increasing forest cover for both States.

Re-growth and woodland thickening in the rangelands of both NSW and Queensland is well documented in the scientific literature. The phenomenon, however, has been largely ignored by the political process driven by green campaigning that has given the very false impression that broad-scale tree clearing is the key issue -- reducing overall forest cover and destroying the environment.

Despite some good intentions, I can't see any of the vegetation management issues being resolved in the short to medium term. At what point can we conclude that there has been sufficient conservation if we do not know, or can not agree, what the long-term trends are with respect to re-growth and woodland thickening?

We need better information, including relevant statistics and honest discussion. It may also need to be acknowledged that our grasslands are as valuable and as vulnerable as our forests.

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Cut the Tax on Properties

It is time for relief for Victorian taxpayers, and the place to start is a reduction in conveyancing fees.

The Bracks Government has been the beneficiary of an enormous tax windfall.  Over the last four years, tax receipts have grown 27 per cent more than expected by the government.

Instead of giving the windfall back to taxpayers or reducing its taxing effort, the Government has spent the lot, primarily on more and better-paid public servants.

It is now times to redress the tax imbalance.

Aside from fees and fines, now 119 per cent higher than predicted four years ago, the most egregious increases have been in property taxes;  specifically conveyancing duty.

The Victorian Government levies seven different taxes on property which are expected to raise a total of $3.5 billion in 2003-04.  This will represent 35 per cent of the State's total tax receipt -- a level greater than in any other State or Territory.

The largest property tax, by a substantial margin, is the conveyancing duty which is levied on all property transactions, including the sale of private homes.  Receipts from conveyancing duty are now expected to increase to $2.3 billion in 2003-04 or $400 million above budget.  Moreover, over the last four years, the conveyancing duty receipts have more than doubled, generating $1.2 billion in windfall revenue.

Clearly the boom in house prices and in sales has contributed to the rapid growth in conveyancing receipts.  However, these are not the only reasons.  As detailed by the Productivity Commission in their Discussion Paper on First Home Ownership, Victoria has imposes the most onerous set of conveyancing duties in the country.  Even after adjusting for differences in average house prices, Victoria's effective rate of duty is 30 per cent above the average of all States.  Moreover, its duty rate is higher for most classes of buyers, including First Home Buyers.

The reasons are clear.  Victoria levies high duty rates which kick in at low property values, and its highest duty rate is reached at relatively low values.

Conveyancing and other stamp duties have a number of pernicious effects which make them particularly bad taxes.  First, they inhibit necessary capital adjustments.  For example, they inhibit people from moving home in search of work.  Or, as is currently the case with Loy Yang A, inhibit the necessary sale of assets.  Second, they are imposed multiple times on the same asset.  For example, duties are imposed on the same piece of land as it passes from developer, to builder and to the final purchaser, and are imposed on the sale of the property, as well as on its mortgage and its insurance policy.  Third, receipts tend to be very lumpy and induce governments to commit to unsustainable levels of expenditure.  And there is little doubt that when the property bubble deflates, the Bracks Government's fiscal position will be exposed.

The solution lies in reducing stamp duties across the board.

The next question is:  how to fill the gap in income?  I suggest that the most equitable way would be to cut back on the waste that has been built up over the last four years of easy money.

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Exploring the Past to Define the Future

Have you heard of the "wet paddocks cause rain" phenomena?  These are stories that confuse cause and effect.

Just as an appreciation of the immediate history of an area can help determine whether or not the ground was wet before it rained, the writings of the early explorers can give us an appreciation of the state of the environment before European settlement.

In my column, "Putting Murray River where its mouth is" (The Land, February 5, p15), I suggested that the River's mouth could reasonably be considered to be where the River enters Lake Alexandrina near Wellington -- rather than below the barrages and the lakes which is the current official position of the mouth.  There has been considerable interest in this issue including a rebuttal from John Formby ("Misled on Murray", The Land letters, February 19, p20).

Famed explorer, Charles Sturt, also thought the mouth was where the River enters Lake Alexandrina.  Sturt recorded his impressions in February 1830 as follows, "The view was one for which I was not altogether prepared.  We had, at length, arrived at the termination of the Murray.  Immediately below me was a beautiful lake, which appeared to be a fitting reservoir for the noble stream that had led us to it;  and which was now ruffled by the breeze that swept over it".

Charles Sturt was in a whale boat, food supplies were low, and he was apparently suffering from tooth-ache.

He spent the next several days crossing Lake Alexandrina and his observations provide insight into the lake's environment before European settlement.  Stuart wrote, "I was surprised at the extreme shallowness of the lake in every part, as we never had six feet upon the line".  And, "Thus far, the waters of the lake had continued sweet;  but (on the second day) the transition from fresh to salt water was almost immediate".

As he attempted to reach the ocean from the southern extremity of the lake complex he observed, "it was in vain that we beat across the channel from one side to the other it was a continued shoal (submerged sandbank), and the deepest water appeared to be under the left bank.

"The tide, however, had fallen, and exposed broad flats, over which it was hopeless, under existing circumstances, to haul the boat.  We again landed on the south side to the channel, patiently to await the high water".

But subsequent attempts were also futile with Sturt reporting that, "Shoals again closed in upon us on everyside.  We drag the boat over several, and at last got amongst quicksands ...  I found we had struck the south coast deep in the bight of Encounter Bay".

The next day he reported, "If I had previously any hopes of being enabled ultimately to push the boat over the flats that were before us, a view of the channel at low water, convinced me of the impracticability of any further attempt.  The water was so low that every shoal was exposed, and many stretch directly from one side of the channel to the other".

In 1830 Sturt wrote that the Murray River terminated at the entrance to Lake Alexandrina.  The southern perimeter of the Lake, now officially the Murray's Mouth, was then a maze of impassable sandbars.  The explorer's observations indicate that Lake Alexandrina was shallow and salty and without a navigable passage to the ocean many decades before water was first extracted from the Darling and Murray Rivers for irrigation.

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The Fortunes of Economics

Economics and its Enemies:  Two Centuries of Anti-Economics
by William Oliver Coleman
(Palgrave-Macmillan, London, 2002, hardback, 328 pages, A$198)

In this excellent work of scholarship, the Tasmanian academic William Coleman reviews the attacks on economics that have persisted since its foundation and which continue unabated today.  In the opening chapter, the author draws the battlelines between the accusers and the defendants, and describes the field of action.  This patient and methodical introduction leads into a careful and balanced description of two centuries of conflict over economics.

This absorbing study provides not only detailed information and a telling commentary, it is also entertaining.  Coleman organises the many sources of criticism and condemnation directed at economics and economists, starting with Smith, Hume and the Physiocrats, and following the trail until economics reached maturity with Marshall and the Marginalist School.  He makes a genuine assessment of both sides of the argument, explaining the confusions caused by economic texts as well as the malicious self-indulgence of the enemies of economics.  Yet he is never condescending and restricts his judgements to the final chapter.  His patience must have been sorely tested by such restraint.

The lesson is that the enemies of economics are drawn principally from political interests of one sort or another.  For the most part, these enemies defame rather than discredit any analysis or logical argument that weakens or undermines their rhetoric.  Their goal is to destroy economics as an intellectual pursuit;  to demolish its precepts rather than simply to criticise.

This is illustrated by the contradictory use of economics in the revolutions that ended the Age of Enlightenment.  Economic reasoning based on self-interest and economic freedom brought by markets was first decried as anti-monarchist and disruptive of social order in the lead-up to the French Revolution.  This was then condemned when the Republic was established because "the citizens" saw self-interest as supporting hierarchy.  When the monarchy was restored economics was again regarded as disruptive of law and order.  Some would argue that this confusion about economics has remained with French politics until the present day!

Although Classical economists regarded themselves as apolitical, economics generated strong reactions in political circles.  The Age of Revolution saw Napoleon establish aggressive nationalism, following the United States' more peaceful model.  Nationalism elevated public policy and history/ culture above abstract economic theory.  The rise of the new Germany in 1870 coincided with the establishment of The German Historical School which introduced the inductive historical method into economics.  Economics had to be part of national development.  The protectionism advocated earlier by Hamilton and List was incorporated into industrial policy and mercantilism revived.  This all-encompassing nationalism was to exact an enormous price from Europe in the next hundred years!  The German Historical School is now part of history but, Coleman notes, its ghosts linger in so-called "development economics".

Politicians' concerns about economics and nationalism are nowhere better illustrated than in Coleman's chapter on economists in Totalitarian States.  Stalin would not tolerate alternative opinions.  First he bullied, then brutalised eminent Russian economists, before he eradicated them.  This must have been a considered decision because he is reported to have had a large collection of economics books that he had annotated.  This chapter is disturbing to read because memories of the Stalinist monster-state and Hitler's Third Reich are revived.

Coleman spends some time on the disaffection of 19th century churchmen with economics.  The main concern was that, by arguing for self-interest and individual freedom, economics undermined social order and respect for national institutions -- in particular, the status of the Church.  This was part of a common cause against universal education and intellectual freedom that saw the Church speak out against progress in scientific advances as well as economics.  The Romantic School (Coleridge, Wordsworth, Southey, et al.) were motivated to support the Church to protect the privileges they enjoyed under the established order.  Coleman examines the Romanticists at length.  He notes that their objections to rational thought and social change have found renewed expression in contemporary environmentalism -- who is to put a price tag on "the priceless"?  The Romantics and other professional scribes are treated gently until the final chapter, when Coleman exposes not only their general ignorance of the works of the economists they attacked, but also their own disturbed mental states, ill health and drug addictions.

It was Carlyle and Ruskin who most vigorously opposed "the dismal science".  This catch phrase was devised by Carlyle (1849) when commenting on The Nigger Question (p156), where he referred to the economic damage arising from the emancipation of slaves.  Ruskin was equally reactionary:  "Slavery is not a political institution at all but an inherent, natural and eternal inheritance of the human race".  These savage attacks arose because most economists supported the abolition of slavery.  Reference to "the dismal science" by modern "public intellectuals" shows how little they understand of economics, and how little research they do.

While Coleman declares the failure of anti-economics, on grounds of misrepresentation, distortion and unworthiness, he criticises economics and economists too.  Anti-economics is undermined by ignorance of economics, but it fails because economics frustrates political interests, affronts moral principles with self-interest and humiliates those demanding social status.  Because anti-economics misdirects its fire, economics also loses.  Coleman argues that if the criticisms had been better directed, economics would have to become more relevant, by reducing its erudition and being more comprehensible to its audience, which is the general public.

This leads me to some specific comments on this volume.  First the commentary ends too soon.  Economics has continued to be abused, criticised and rejected since the beginning of the 20th century, while the subject has been strengthened by intense internal disputes.  Yet, except for the excellent, though disturbing, chapter on the totalitarian states, the coverage of this volume ceases around 1900.  Since the dust jacket is adorned with an image of Keynes, one would expect more comment on this towering personality's contributions.  Keynes receives only five passing references in the book.

Probably the publisher is to blame for the misleading graphic, as well as the price of the book, which takes it beyond the budget of most potential readers.  This is unfortunate, because it is an amusing and readable history which makes a serious contribution to increasing understanding of long-standing conflicts, which are still repeated by present-day enemies of economics.  I hope that William Oliver Coleman can be persuaded to take up his pen again to bring this story up to date -- I am sure it will continue to unfold.

Turnbull a force for change

Not often can members of either the Liberal Party or the Labor Party claim with a reasonable degree of certainty that they have preselected not only a future cabinet minister, but also a possible prime minister.

Whether on Saturday the 158 Liberal members in the federal seat of Wentworth had in mind the occasion of the preselection of Menzies in 1934, Whitlam in 1952 or Hawke in 1979 is uncertain.

But what is certain is that Malcolm Turnbull's entry into federal politics at the next election will be just as momentous as was that of those three.  Overnight, Turnbull's victory has changed the dynamics of the Howard succession and the Liberal party room.

The fact that, according to any measure of ability, Turnbull when he becomes an MP should immediately be given a senior frontbench position is the first reason for the significance of his preselection.

The plans for the advancement of dozens of junior ministers and backbenchers have been thrown into disarray, and there is the suspicion of self-interest from those MPs who have expressed disapproval at his vigorous approach to the challenge of a sitting Liberal member.

Turnbull's preselection is also significant because of its longer-term consequences for the Liberal Party and for national politics generally.

If the Liberals win the next federal election he will help shape the government's fourth-term agenda.  If they lose, which is unlikely, but not impossible, his energy and intellect will be required to rebuild the party.

As chairman of the Liberal Party's think tank, the Menzies Research Centre, Turnbull has championed more than just the republic:  reforms to school education, refashioning welfare to families and the redesign of the tax system are all issues on which he has made important contributions.  He puts his position forcefully and passionately, and even his opponents have conceded that regardless of whether they agree or disagree with him, they always know where he stands.

In certain aspects Turnbull has much in common with his two fellow New South Welshmen, both of whom at various times he has been opposed to -- Tony Abbott and Mark Latham.

They each would be loath to admit it but the style of politics they all practise is remarkably similar.  Each is keen to experiment with new ideas, and in contrast to the risk-averse attitudes of many other politicians, they will dare making a mistake -- and if they're wrong, they'll admit it.

They are also different from their peers in that they are not afraid to display and discuss their personal and political philosophies and indeed they take every opportunity to do so.

Despite their political differences, they are relatively socially conservative, and each emphasises the strengthening of individual and family responsibility as a key objective of government policy, particularly in helping to overcome social disadvantage.

Whether Turnbull, Abbott or Latham ever becomes prime minister, time will tell.

But regardless of whether they do or not, each has already helped change Australian politics.

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Attacking Rehame

In years gone by it was comparatively easy to understand what was happening in industrial relations.  Unions would organise workers to engage in strikes, pickets and other industrial action to pressure the "bosses" to improve wages and conditions.  It was a form of orchestrated "class war" in which everyone seemed to know their place and their role.  The business of being a union was structured entirely around the maintenance of this class war.

But things have changed because of one basic fact:  union membership in the private sector is now down around 18 per cent.  More importantly, union membership and influence in most businesses is now so small (often non existent) that unions have enormous difficulty starting, let alone maintaining, class war within individual companies.

The outcome is that the business of being a union is under severe stress.  And to survive, some unions have undertaken far-reaching reconceptualisation of their processes and campaign models.  In applying these new models against targeted firms and industries, unions have changed the nature of the game in ways that firms do not understand.  One of these new campaign models creates industrial leverage by attacking a company's brand name.

Recently, the media monitoring company Rehame was subject to such an attack.  The campaign against the company is the early phase of a union push to capture the media monitoring industry and it closely follows campaigns conducted against call centres and the clothing industry.  In this new industrial warfare, nothing is what it seems and it takes business some time to understand what is happening and to sort out how to respond.

Media monitoring businesses engage people to read newspapers and magazines, listen to radio and watch television and to pull out material that names or affects the business of its subscriber clients.  In the industry, transcripts of media reports are usually delivered to clients within hours (sometimes minutes) of a media report appearing.  Some aspects of the business involve high-tech monitoring, but much entails people simply sitting and reading or listening.  The low-tech aspects ideally suit people who want to work from home -- including students, retirees, parents and others who want the lifestyle and income benefits of such work.

The trouble for unions is that industrial organization of people who work from home is almost impossible.  Unions need employers to operate sweat-shop like factories if the business of being a union is to survive.  If a company follows family friendly type practices where people can work from home, unions have difficulty leveraging for members.  Hence the campaign against Rehame where unions alleged that people who work in their own homes are working in sweatshops.  This, "your home is a sweatshop" slogan, confuses community perceptions and masks union agendas.  And in their efforts to stop people having the right to work from home, the Victorian Government has been lobbied to discriminate against Rehame to stop them offering people these small business options.

To achieve the end game, the company's name is likely to be subject to considerable and sophisticated attack on a wide variety of fronts from coalitions of community groups organized through unions.  The company may risk losing clients and its competitors will duck for cover (all the while claiming that they are well-behaved) or could use the situation to gain increased market share at their opposition's expense.  The campaign intent is to stop the offering of work to small business people who operate from home.

Eventually a "white knight" industry association will negotiate a "peace" which, in effect, will deliver the union's agenda.  A "code of practice" will be established in conjunction with government and legislation stipulating the price of media monitoring operations in minute detail will likely follow.  The "settlement", operating outside normal industrial relations legislation, will effectively control vital aspects of how the industry is able to operate.  The campaign loop will be closed.  The industry will be captured.

How do we know this?  Because this is what transpired in the clothing industry over ten years, and in part, in the call centre industry in just four years.  It will probably happen much faster in the media monitoring industry.

These campaign and control mechanisms effectively destroy domestic outsourcing operations.  But, paradoxically, there is no evidence that unions win more members as a result.  Instead, domestic outsourcing stops.  Companies shift their focus offshore and external outsourcing proceeds apace.  Witness the trends with call centres and the collapse of domestic clothing manufacturing!  The campaigns actually destroy local jobs.

In the electronic age, most media monitoring can be done in India, Malaysia, Hong Kong or wherever fluent English-speakers reside.

Industrial relations is no longer just about class warfare controlled through industrial relations legislation.  There is an entirely new paradigm of aggressive war in which every business is lined up for targeting.  And the process is just in its infancy!

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