Category 'Public Affairs'

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Mike Baird does a "John Key” and quits politics

News, Public Affairs
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Despite his success in running Australia’s biggest state, outgoing New South Wales Premier Mike Baird, who announced his resignation today after nine years in Parliament, was never going to be a career politician.

Despite his success in running Australia’s biggest state, outgoing New South Wales Premier Mike Baird, who announced his resignation today after nine years in Parliament, was never going to be a career politician.

Baird, a former Sydney investment banker, carefully considered his future over the recent long Christmas break. He reflected on the highs and lows of his Government and also on the health challenges being faced by three members of his family.

Then he acted, putting his personal situation as a priority and announced his departure from State politics altogether from next week.

Baird leaves behind a government and state in strong financial shape. New South Wales is the leading economy in Australia with low unemployment, a significant budget surplus, a building and construction boom creating thousands of jobs and government infrastructure projects that will continue for two decades.

Baird took over the Premier’s job in 2014 from his friend Barry O’Farrell who resigned over not declaring a $3,000 bottle of Grange Hermitage given to him by a party donor.

Baird’s main competitor for the leadership at the time was Gladys Berejiklian, the ex-banker who did not stand in the end to preserve party unity and became Treasurer and a loyal Deputy-Leader.

A political moderate, Berejiklian has worked hard managing the financial fortunes of the state including overseeing a multi-billion dollar privatization program including the sale of New South Wales’ power assets. As a result, much of the money is being spent on roads, rail and other major projects to transform the state’s transport system.

A hard-working Minister, Berejiklian has the numbers to assume the leadership (she has already declared her candidacy) but there may be conservative candidates considering nominating for the job. The lay Party in New South Wales is factionally very divided between moderates and the hard and centre right groups so competition for all key positions can be expected. We will know the outcome next week.

Despite economic success, the Baird Government has had its problems, most of them self-inflicted.

Responding to public concerns about alcohol-related violence, it put in place regulations to limit late night trading hours for hotels, bars and entertainment venues in the Sydney area around the City of Sydney and Kings Cross. This effectively ruined many smaller businesses and upset people who would traditionally have been Liberal Party supporters. Only a growing wave of protests against the “Nanny State” saw the Government back down in late 2016, loosening the laws.

And in an almost dictatorial move, Baird personally moved to shut down the state’s greyhound racing industry that had been plagued for many years with bad practices including incidences of cruelty to dogs. Without warning many smaller trainers and owners in rural areas (again traditionally conservative voters) were contemplating financial losses including the closure of their businesses and livelihood. Once again, after much hand-wringing (and appalling opinion polls) the government softened its position.

Whoever wins the leadership contest next week the new Premier and government faces electoral challenges. Change will bring new faces into Cabinet and new approaches although the private-enterprise friendly complexion of the government won’t change. The next election is not due until March 2019.

What Baird’s surprise announcement today says that (like the recent departure of John Key as Prime Minister of New Zealand) good political leaders in the 21st century are not focused on longevity but doing what they set out to do then handing over to someone else to take over.

Just as in the corporate sector (with the shelf life of a CEO three years), politics is probably following that trend.

Turnbull shuffles the deck

Government Affairs, Health, News, Public Affairs
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Prime Minister Malcolm Turnbull has announced a minor re-shuffle of his ministry following the departure of Sussan Ley as Minister for Health earlier this month.

Prime Minister Malcolm Turnbull has announced a minor re-shuffle of his ministry following the departure of Sussan Ley as Minister for Health earlier this month.

Turnbull has moved quickly to replace Ley following a revelation of misuse of her parliamentary travel allowances and ahead of the return of Federal Parliament on February 7 and what is likely to be a robust political year.

The key appointment of former Industry and Innovation Minister Greg Hunt to the high-profile Health portfolio is the biggest news of the day.

Hunt is from Victoria and is a political moderate who is close to Turnbull. He is a highly-energetic and capable minister who was previously a successful Minister for the Environment. He negotiated the repeal of the unpopular carbon tax through Federal Parliament and was instrumental in Australia signing the Paris Climate Change Agreement in 2016.

Hunt has family connections to the health portfolio. His wife was a nurse and he regularly supports fundraising and awareness-raising efforts in his electorate of Flinders for juvenile diabetes and autism. His mother was bi-polar, so he has a strong affiliation with the impact of mental health issues on families.

As a moderate, while philosophically to the left, he will need all his negotiating skills to maintain spending levels in the traditionally high cost of the public health sector in the face of the Turnbull Government’s desire to cut expenditure and reduce the country’s rising deficit.

The other main portfolio change is to appoint Senator Arthur Sinodinos to the Industry, Innovation and Science ministry formerly held by Greg Hunt. A high-profile and well connected New South Wales Senator, Sinodinos is one of Turnbull’s closest advisers and parliamentary friends.

He was instrumental in seeing Turnbull succeed to the leadership of the Liberal Party in September 2015, deposing Tony Abbott and removing several right-wing members from the Cabinet.

While some question remains over Sinodinos in relation to his fundraising activities in New South Wales politics while Treasurer of the Liberal Party (which is still subject to an ICAC review), the Prime Minister has nevertheless appointed him to an important portfolio that includes Innovation, one of the key planks of the Coalition’s election campaign in 2016.

Senator Sinodinos’ old job of Cabinet Secretary will now sit within the Prime Minister’s office as a public service not elected position. Another key ally, Senator Scott Ryan, has been promoted to Minister Assisting the Prime Minister in Cabinet while Ken Wyatt, the nation’s first indigenous House of Representatives Member has been made Minister for Aged Care and Indigenous Health recognising two of the key public policy challenges facing the Government. Conservative Michael Sukkar has been made Assistant Minister to the Treasurer.

While Turnbull has avoided major changes to his barely six-month-old ministry, we can expect these won’t be the last as the year unfolds.

The Prime Minister’s media statement can found here

Nic Jarvis – Head of Public Affairs – Edelman Australia

nic.jarvis@edelman.com

Explaining America

Government Affairs, Insights, News, Public Affairs, Reputation, Trade
United States flag blows in the wind

Last night’s election of Donald J. Trump as President of the United States not only stunned the pundits, but confirmed many of the trends we’ve seen in populist movements worldwide. It signifies the potential for dramatic change to come in American policy on issues ranging from foreign policy and immigration to the environment and health care. It appears America chose to turn inward.

Last night’s election of Donald J. Trump as President of the United States not only stunned the pundits, but confirmed many of the trends we’ve seen in populist movements worldwide. It signifies the potential for dramatic change to come in American policy on issues ranging from foreign policy and immigration to the environment and health care. It appears America chose to turn inward.

This was a declaration by working class white Americans, who have suffered a decline in living standard and fear for their future in a globalized world, echoing the Brexit vote in the United Kingdom. It was a profound rejection of the establishment, especially of the mainstream media, which uniformly endorsed Secretary Hillary Clinton. Here are a few thoughts on the implications of the election.

Why this happened:

1. Inequality of Trust and Income Has Consequences — The 2016 Edelman Trust Barometer found that the informed public/elites (college plus education, top 25 percent of income, report significant media consumption) had much higher trust levels in institutions, than the mass population, particularly in the U.S. and UK (respectively). Income inequality correlates with trust inequality, with a 31 point gap between high and low income respondents in the U.S. on trust in institutions. Trump’s victory is a vote of no confidence in institutions and in the establishment.

2. Twitter Triumphs over The New York Times  Trump went direct to the people, mostly through his community of 14 million followers on Twitter. The mainstream media, notably The New York Times, broke stories on Trump’s non-payment of taxes, his failed Trump University and his questionable behavior with women. None of those stories ultimately were enough to change the tide. There was a near-universal set of editorial endorsements of Clinton. Trump used this disparity to his advantage, to claim media bias and unify his base of supporters. Social media coverage captured the angry tone of the country better than mainstream because it relies on a ‘person like me,’ doing away with the hierarchical in favor of the personal.

3. Genuine and Authentic Beats Intellectual and Measured — The short-form, speed and consistency of communication by Trump beat Clinton’s nuanced, detailed and long-form communication. Trump came across as more genuine, Clinton as less than transparent. Trump engaged directly with his community, Clinton spoke through the media in a careful and less frequent manner.

4. Advertising and Celebrities Hurt the Cause — The dominant advertising advantage of Clinton, with spending of 10 to 1 over Trump, reinforced the perception that she was trying to buy, rather than earn, votes. Her emphasis on negative campaigning, focused on Trump’s persona, instead of on economic issues, proved ineffective. The use of celebrity spokespeople may have rallied her base, but among swing voters it only exacerbated the feeling Clinton was part of the establishment, out to protect its own interests.

What must happen next:

1. Business in the Dialogue, Not Bystander — The temptation might be for business to use the Republican dominance in both Houses of Congress and in the Executive Office to seek less oversight in environment, financial services, and health care. This would be a mistake of monumental proportions, seen as the politics of self-interest. His Republican party can be deeply hostile to business. The need for Business to lead has never been more evident, whether on supply chain, pushing for free trade, or on immigration. CEOs should fill a leadership void, educating employees and their communities on issues such as trade while creating movements such as Starbucks’* 100,000 Opportunities jobs program.

2. Business Must Calm the Resentments — The election reflects a deep suspicion about the pace of change, the threat posed by globalization and the rise of the sharing economy. The Trump campaign slogan, “Make America Great Again,” is a simple line that relies on nostalgia. There must be a better explanation of the How and the Why, not simply the What. Any sense of cultural condescension must go away, in favor of a narrative that can be shared with employees and their families.

3. Recognize that Much of Your Audience Rejects Established Authority — The usual cultivation of academic experts and opinion leaders on issues is insufficient, if not counter-productive. We have to find voices who are believed by the average person, from long-tenured employees to passionate brand enthusiasts.

4. Consider the Impact of Nationalism and the Power of Local — We must recognize the rejection of long-accepted brands in favor of upstart locally sourced brands. National identity will be deeply important. The foreign companies seeking to prosper in the U.S. will have to emphasize their community involvement, training programs and local executive talent. There will be a much higher hurdle for brands from developing markets such as China.

5. Every Company Needs to Be a Media Company — Institutions are better served by going direct to end users, establishing a channel for direct dialogue and feedback. It is a world of many to one, not one to many. The predominant axis of communication is horizontal, that mass population relies on search and social, not mainstream media. Our content has to be short-form, shareable and with an opportunity for consumer generated response and engagement.

6. Truth Matters More Than Ever — In the campaign, there were several instances of exaggeration or part-truths. The hashtag #NeverHillary spread lies like wildfire. In a post-election context, there will be a need to prepare for similar pressure through social channels, best answered by passionate consumers and well-informed employees.

In January, in my essay on the findings of the 2016 Edelman Trust Barometer, I suggested that the Grand Illusion of the elites was coming to an end. The illusion was premised on three concepts: that elites had superior information, that elites were acting in the best interests of the mass population, and that someday a few in the mass population could become elites. The results of the Brexit vote and the U.S. election have confirmed the idea that the Pyramid of Influence, with elites at the top holding authority and influence, has been flipped on its head, with mass population now in control and wielding influence.

Historical context is vital. Many were concerned that the election of Ronald Reagan in 1980 would provoke nuclear war with the Soviet Union; ultimately he reached a deal on nuclear weapons with Soviet leadership. The populist sentiment unleashed by Trump has unsettled minority and LGBT populations. We would be advised to remember this is a country of laws, with a three-branch government designed by the Founding Fathers to check any momentary popular impulse. As an American running a global business, I have faith in our system, in our Constitution’s mandate to the balance of powers. President Obama said this morning that “Ultimately, we’re still on the same team.” Gridlock will cause government to walk away from key issues, giving the private sector an opportunity to fill this void. Edelman employees should also get more deeply involved in volunteer work for non-profits, to take up some of these societal challenges. Together, it’s our time to lead.

Richard Edelman is president and CEO.

*Edelman client

The Turnbull Government – two steps forward, one big step back

Government Affairs, News, Public Affairs
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The decision by the Australian Labor Party to vote against the proposed plebiscite on same sex marriage captures perfectly the position Malcolm Turnbull finds himself in. The plebiscite is a commitment he reluctantly took to the Australian people at the last election, even though most Australians were against it, but it was a policy of the former Abbott Government that he was forced to follow in return for conservative support in the Liberal and National party rooms. But it was also a policy designed to fail which it ultimately did.

Down with plebiscites

The decision by the Australian Labor Party to vote against the proposed plebiscite on same sex marriage captures perfectly the position Malcolm Turnbull finds himself in.

The plebiscite is a commitment he reluctantly took to the Australian people at the last election, even though most Australians were against it, but it was a policy of the former Abbott Government that he was forced to follow in return for conservative support in the Liberal and National party rooms. But it was also a policy designed to fail which it ultimately did.

Turnbull himself preferred a vote in Federal Parliament to resolve the matter. The failure of the plebiscite means the question of resolving marriage equality might be years away. And it demonstrates, in a country that preaches tolerance and respect, how politics can play such a wrecking game.

Whether you support marriage equality or not, Australia is now way behind the rest of the world. We call ourselves progressive but despite having the most multicultural country in the world, a relatively simple process to legalise something the majority of the population agree with has failed due to different, competing agendas.

Turnbull won the leadership of the Liberal Party in 2015 with a huge amount of national and internal party goodwill. It was at that point, with a popularity rating approaching 60% that he had the opportunity to govern in his own right and introduce policies in line with his own convictions. But there’s little evidence of the “old Malcolm” now.

Despite the failure of the plebiscite Turnbull could do a Mike Baird-type backflip and allow a parliamentary vote. Although this is probably unlikely, it would at least put the decision in the hands of the elected members of parliament who are there to represent the voting public. The result of the vote would then decide the matter decisively.

Business as usual, or is it?

While the plebiscite has been the main political (and media) focus in Australia, the Coalition Government has been quietly working on major economic measures to kick-start the economy and fulfil its election promises.

Many of the unpopular changes to the superannuation system have been voted through in deals with the ALP, minor parties and independents. And a range of expenditure and revenue raising measures, promised before the election to balance the budget, have also been passed without too much fanfare.

The modus operandi of Turnbull is now quiet negotiation and bridge-building with the new parliament to achieve outcomes. This is a different but in some ways welcome approach in contrast to the previous administration’s “my way or the highway” method that won few friends.

The Prime Minister’s overseas visits to G20 and the US have been viewed successfully. Turnbull is continuing the Abbott Government’s progression on free trade agreements, being one of the first leaders to start negotiations with a post-Brexit United Kingdom and is now advancing an FTA with India. If as expected Hilary Clinton is elected US President in November, Turnbull will need to negotiate the TPP with a new Congress and a President who has expressed reservations about the world’s biggest free trade agreement, especially the impact on American jobs and industry.

The Australian economy, while still suffering from a post-mining boom hangover is showing some green shoots. Infrastructure spending is significant particularly in New South Wales and Victoria and coking coal prices are up, meaning a potential $25 billion boost to GDP.

Another measure currently under debate in Parliament is the Coalition’s significant proposed cuts to company tax. The ALP has opposed cuts for big business but other independent MP’s and Senators are divided. It looks as if, to get passed, tax cuts will flow to the SME sector but not the big end of town.

One of people’s key frustrations seem to be the difference between expectation and reality. Unfortunately for a maverick politician like Turnbull, compromise is now the name of the game. With the next election in 2019, how long this lasts is anyone’s guess.

Image sourced from SMH.com.au.

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