May 25, 2026 | Change, Governance
Economist Joseph Schumpeter observed in 1942, “economic progress, in a capitalist society, means turmoil.” That observation shows he had a good handle on the future as it is currently panning out. Chaos seems to be the order of the day, globally, as well as in this country.
The federal budget presented on May 12 was based on the principle of generational equity. Clearly, the tax pendulum has swung too far against Australians under 45 or so, in favour of their parents, and requires adjustment.
The incentivising of investment in real estate was enacted in the changes to the tax treatment of Capital gains in the 1999/2000 budget. Mixed with negative gearing which had been a feature of the tax system since 1936, it created a tax driven distortion in the allocation of capital, resulting in a shelter for investment in real estate.
Taxing capital gains has a potted history.
Prior to 1985 capital gains were untaxed, while wages and salaries were taxed at a 60% top marginal rate. Why should capital profits go untaxed while wages were fully taxed? This inequity created distortions in the deployment of capital. The Hawke government introduced a capital gains tax that matched the top marginal rate, excluding primary domestic residences in 1985, and reduced the top marginal tax rate to under 50%. The taxing of capital gains brought a fierce backlash. In 1987 there was a discount system put in place that recognised the impact of inflation on prices and removed the inflationary impact from any sale price for tax purposes. The changes in 1999 were aimed at simplifying the calculations to arrive at a taxable income that included capital gains, by introducing a flat 50% discount.
The backlash is evident again, as interest groups very effectively use the tools of AI combined with social platforms to rail against the proposed changes. While there are some areas where the detail in the budget was absent, and there are reasonable arguments against the blunt instrument approach in the budget, the principle was clear. Make the difficult changes now. Accept the impact on political capital for the benefit of the economy in the long term.
The pendulum swings again!
There was a lot of other stuff in the budget, but mostly it was business as usual and window dressing. This was not good enough in my view, when there are significant pressures coming from the changing environmental and geopolitical context that need attention.
A few of those are noted in the following sceptical notes.
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- Climate change and the industrial challenges created in manufacturing largely generated by the pivot to electricity sourced from renewables rather than from fossil fuels and the accompanying/enabling technology is a huge change. We need to invest heavily in the technology and infrastructure of global electrification to catch the wave, or be left behind. We must ignore the anti-scientific and financial nonsense coming from some parts of the political spectrum demanding we remain wedded to fossil fuel. Kicking that can down the road, again, is just plain stupid.
- Digital has morphed into AI, and the hounds are, rightly, concerned about job losses, as the shape of organisations and daily work pivots to ‘done for you’ by a machine. The disruption will be substantial, and upon us very quickly, so we need to be prepared. We are not even doing the basic things that will prepare for the changes, such as thinking creatively about how to educate our kids for a world very different to the one we grew up in.
- The steady reversal of the economy from one relying on physical assets to services has made the measurement of just about everything that we see as the foundation of economic modelling redundant. Modelling the outcomes of policy and economic activity is now about as certain as the mumbling from the coloured tent in the corner of the fairground. We desperately need an agreed methodology to realistically measure progress on those parameters. GDP as a realistic measure of activity in the economy is nonsense when it cannot capture most of the activity in services. The cliché ‘if you cannot measure it, you cannot manage it’ is as true in the case of an economy as it is in the management of an SME.
- Geopolitics is in turmoil. This is not just from the depredations of the current idiot in the White House, who has turbocharged it, and the grab by Russia to rebuild the USSR, but from the rise of China. 30 years ago China was an agricultural economy. Now it is the worlds manufacturing and industrial technology powerhouse. While domestic growth has slackened off, it has not stopped, but the rest of the world now relies on China for critical inputs to their supply chains for everything from advanced technology to manufacturing simple appliances, and Christmas ‘stocking-stuffers’. Where to next for China? I think it will attack the sclerotic economies of the west by buying in and disrupting the comfortable order that prevails. For example, European and US car manufacturing is being killed by Chinese imports of EV’s. So, they respond with various barriers that protect their own industries. The natural response from China will be to buy into the market either by start-ups or buying established brands, and building manufacturing capability behind any barriers. Chinese firms already own Volvo, MG and Lotus. Who is next? Volkswagen? The Chinese strategy is clear, and driven by long term thinking, not the next election cycle.
- Australia is not immune. International investment in Australia is essential for our economy. To date it has largely been US and European investors, we have a somewhat xenophobic attitude to Chinese investment, noting we cannot easily invest in China, and if we do, the conditions are onerous. However, we need them more than they need us, so the outcome is obvious. Australia and the western world generally has prospered under the umbrella of international trade fostered by the US since the Marshall Plan set about rebuilding Europe and Japan after the war. Now that plan is in tatters, torn up by its parent. We however, remain wedded to it as the US is so deeply integrated into our economy, while no longer being our biggest trading partner. That guernsey goes to China, the recipient of the openness of world trade, and now in a position to shape it through its domination of the key commodities and technologies of the early 21st century. That reality is yet to work its way into the Australian narrative in any way beyond observations of the importance of China as the major buyer of coal and iron ore. We were taught a painful lesson about the power of China to dictate terms under the previous government. The position we hold as a critical supplier of commodities will diminish over the next 25 years as Chinese integration into mineral wealthy Africa comes of age. What will we do then? Nothing in the budget even gives a hint of preparation, indeed, we continue to spend heavily on straw men like AUKUS.
- Australian R&D, both public and private is low by standards seen in competitive economies. It is also fragmented by our governance system that feeds turf wars at every level of activity. If we set about designing a governance system with a clean sheet of paper, there is no way we would end up with what we currently face. Therefore, it should be a priority of the government, every government, to remove the duplication, waste and opportunity cost such a system encourages. The budget did allocate a small increase in funding for CSIRO, but also directed that the current headcount reduction continue. Other changes to the R&D tax incentive and allocations to specific projects were also announced, but none to address the central challenge of doing the science, then turning it into a commercial outcome.
- The US S&P is driven by tech companies. Of the top 10 in market value, only Berkshire Hathaway is what might be termed ‘Old industry.’ In Australia it is the exact reverse. Of the top 10 only CSL could be termed ‘new industry’. Notably, several unicorns born in Australia have migrated, Atlassian and Canva being the poster children of this migration, but by far, not the only ones. We must find ways to create and nurture innovation. Progressively taking the axe to public expenditure on science, as noted above, is not a good start.
- November 2022 saw the public release of ChatGPT, which kicked off the AI ball. Subsequently, AI-related stocks have registered 76% of the S&P 500’s return, 87% of earnings growth, and 90% of Capex growth. The returns in the US, upon which much of our super returns rely is reliant on the ‘magnificent 7’, and most specifically Nvidia, continuing their growth driven by AI. Shakey ground indeed for the future prospect of returns when we are increasingly reliant on a superannuation system heavily invested in the S&P to fund retirement.
- We have an ossified political system. It is however, starting to break down, exemplified by the capturing of seats by ‘Teal’ candidates who removed the heart of the Liberal party over the last 2 elections, and the rise of the policy free bluster-ball that is One Nation. We need imagination and vision in the national parliament, and the courage to follow through. The outdated structures need to be at least renovated if not removed. We should start by limiting or even removing corporate donations to political parties. The alternative is a publicly funded system, open to citizens, and capable of receiving donations from citizens with a limit. The limit is to prevent rich individuals and businesses donating more than a concerned citizen on a median wage can afford. That might begin to earn the title of ‘Democracy’, and put a brake on the ability to influence policy choices by vested interests.
This is not a complete list, but it touches most of what concerns me about the direction we are taking.
Header: My thanks to Hugh McLeod for once again, capturing a complex idea in a simple graphic.
Mar 30, 2026 | Governance, Leadership
In the pre-internet age, facts had a pedigree. You could trace them back to a source, weigh their credibility, and argue your position with some confidence. These days, we are so awash with claimed ‘facts’ that we are overwhelmed. Cheap, mass-produced, often anonymous ‘facts’ handed from one digital platform, morphed and handed on again. No clear origin, no accountability, just noise, self-serving claims, paranoia, or dreams, dressed up as certainty.
That creeping uncertainty has seeped into every corner of our lives, mostly unnoticed. The rules we live by are still shaped by politicians and enforced by institutions funded with our tax dollars. But the values behind those rules have all but disappeared.
We used to look for consistency. If someone claimed to value integrity, we expected them to act like it. Now we get performative posturing. Followed by policy U-turns, PR spin, or flat-out contradiction.
When behaviour doesn’t match the values on the label, it screams hypocrisy. As the old marketing joke goes ‘the consumer is not stupid, she is your wife’
We’re hardwired to trust facts. However, when the ‘facts’ themselves are selectively shaped, bent to fit a narrative, or worse, manufactured from thin air, we get understandably anxious and likely to distrust.
In its mild form, this is spin. In its extreme form, it’s lying. Denial. Gaslighting.
Hypocrisy is no longer just the politician’s disease; it has crept into every corner of our lives.
Public debate has been hijacked by competing ‘facts’. Not competing opinions. Competing truths. There’s no transparency, because transparency forces accountability. When nobody is accountable, integrity goes out the window.
Integrity now is so rare we wouldn’t recognise it even if it walked up and smacked us with a code of conduct.
The result? Polarisation.
Information travels faster than reflection. The moment a ‘fact’ hits the feed, the rebuttal, if it exists at all, is buried under a pile of clickbait. And if by chance a real fact does slip through, one that’s been tested, sourced, and stands up to scrutiny, it gets drowned in the noise.
Knowledge used to mean something. Now it’s riddled with bias, spin, and wishful thinking. Often wrong. Always louder than it should be.
That erosion of clarity has gutted our trust in political systems. We expect spin, so we ignore or do not recognise the occasional truth when it confronts us. When we stop trusting the institutions, we stop trusting what they publish, even when they’re right, imagination and conspiracy theories take their place.
What follows is stubbornness disguised as principle.
We cling harder to our own view, no matter how flawed. We trust only those who confirm it. Collaboration becomes competition. Dialogue turns into tribal shouting.
Meanwhile, confirmation bias is doing its work: steering our decisions, shaping our teams, and wrecking our ability to truly listen.
So, what’s the fix?
Truth. Accountability. Transparency. Not slogans. Actions.
Tell the truth based on facts you can trace. Show your working. Hold yourself and others to the same standard. Accept that facts evolve, but insist that the path of that evolution is open for all to see.
That’s how you earn trust back. One uncomfortable truth at a time.
Header credit: A single panel from and old ‘First dog on the moon’ cartoon says it all.
Mar 2, 2026 | Governance, retail
As a kid Mum used to make a Christmas pudding and claim that the fairies had magically stuck in a bunch of threepences and sixpences into it. (yes, I am that old)
The possibility of finding a couple of weeks pocket money in the pudding created intense sibling rivalry around who could sneak the biggest piece, and thus have a greater chance of finding some magic.
Coles and Woolies in their most recent results announced in the last fortnight have delivered the Australian community a magic pudding.
Times are tough, there is a cost of living crisis happening around us, yet their recently released year end results hide magic for shareholders. (to be fair, most of us are now shareholders via superannuation)
The domination of these two chains is fuelling inflation.
This is a perspective not covered in any of the commentary I have seen so far.
The logic is as follows:
Margin expansion.
Coles and Woolworths have been able to preserve, and in Coles’ case expand, healthy margins over the past year. Together, they control roughly 60–65% of the supermarket sector, with Aldi and various independents supplied by wholesalers (usually Metcash) making up most of the rest. This means that for most packaged food and grocery suppliers, the path to survival runs through the trading terms imposed by just two buyers.
The latest financials show that Coles has widened its supermarket margins from 26.6 % to 27.4% and its EBIT margin edged up from 5.0% to 5.3%. Woolworths’ Australian Food division reported a gross margin of 28.6% and EBIT margin 5.4% in FY25, only slightly down from the previous year after a period of “price investment”. In other words, the duopoly has not absorbed the inflation shock through lower profits; it has kept margins high and, in Coles’ case, increased them.
The cost of living crisis has not dampened the margins of Colesworth during the tough times.
Retail real estate.
Coles and Woolies dominate shelf space and therefore set the ‘reference prices’ that other retailers follow. As a result they influence price inflation far beyond their own stores.
Woolworths and Coles use their buyer power to squeeze suppliers via terms demands, rebates, expensive promotional deals, and all the other tricks they have in their magic pudding. The power suppliers are able to exert in these pricing negotiations is extremely limited. This applies even for major key suppliers in major categories for whom supermarket volumes are essential to covering operating overheads. Colesworth are then able to set shelf prices with no reference to any competitor beyond the other gorilla. Suppliers must accept lower margins and/or push up prices in other channels just to survive.
Smaller independents, convenience outlets, foodservice and export customers then face higher input costs, which in turn pushes their retail prices closer to and usually way above the duopoly’s. They rely on ‘convenience’ and stores in population centres below the cut-off for the gorillas to invest in outlets.
The more the big two protect or expand their margins under the cover of “inflation”, the more this cost‑shifting machine drives price rises right across the grocery market.
‘Colesworth’ market share sets prices and terms across two thirds of Australia’s FMCG market.
Scale delivers price immunity to Colesworth
Oligopoly economics.
This is an oligopoly at work. They are taking advantage of a general inflationary environment to widen or protect margins, and establishing a sticky price level that will persist when inflationary pressures ease. That will be a nice windfall!
In a genuinely competitive market, we would expect that at least some of the pain of higher energy, labour and logistics costs shows up in thinner supermarket margins.
In Australia’s hyper‑concentrated grocery sector, the evidence points the other way. Without Aldi as an anchor, we would be in real trouble at the checkout.
Increasing costs are not impacting on Colesworth margins. Their scale enables them to push EBIT above 5% by pushing price up faster than the cost increases.
Medicine unavailable.
Unfortunately, I see no short-term measures that will reverse the concentration it has taken the 45 years I have been observing, to evolve. Politicians can have all the enquiries, reports, and ‘band-aid’ measures they can dream up, but none will get at the core problem other than breaking up the oligopoly. Forced divestiture.
I have written elsewhere that this is a really stupid idea. A legislated breakup would only increase costs significantly in the supply chain that would be felt at the checkout. It is therefore only a brainfart of those who will never see government, but which persists as a policy option.
The horse has not just bolted, it is over the hill. It will take another 20 years for changes in the retail environment to deliver a more genuinely competitive sector.
Header: My thanks to Scott Adams. The single Dilbert panel says it all.
Feb 23, 2026 | Governance, Strategy
The political energy wars in Australia will flare again with the ascendancy of the right of the Liberal party, surging of One Nation, and relative gutlessness of the government.
The ‘debate’ will be about residential energy costs.
It is too easy for faux ‘Current affairs’ programs and politicians to find someone with 3 small kids not able to pay the electricity bill. That story gets splashed around as the core of the ‘national conversation’.
What is rarely given any oxygen is the impact of energy costs on industry. From the local coffee shop, bakery, and warehouse to energy intensive industries like smelting commodity ores, and cement.
When energy becomes too expensive, unstable or unreliable, businesses close, or relocate, and lift prices.
The principals of these businesses rarely get heard, unless they are a really major business like an aluminium smelter. As a result, the ‘debate’ will be about the wrong thing.
We should be talking about ‘energy sovereignty’.
Throw away the slogans, and work towards making energy one of the inputs to our way of life that we actually control. Why be a price taker at the whim of others, and a flailing and ineffective domestic policy vacuum.
Renewables are now cheaper than fossil fuel generated power, but the fight remains about the environment and retail prices, not cost and sovereignty.
Cheap power is rapidly becoming the strategic necessity of the 21st century. It shapes both national and geopolitical outcomes. Those who control power generation will end up controlling the economy. Foundational to control of power generation is the control of the essential elements in the power supply chain: lithium, graphite and other science fiction sounding minerals.
China is not only generating the cheapest power, but they also control the supply of these minerals from the extracted commodity to the final input to manufactured products.
Our focus on the retail price of energy is way too narrow.
We should be focussed on the strategic importance of the whole supply chain, and where in that chain strategic power can be exercised.
Currently Australia has none, but we have the potential to be a major global player.
That means bi partisan agreement on significant long-term investment with a long-term ROI measured by the standard of living of our grandchildren.
Is there any chance of all of that happening?
Header courtesy Tom Gauld at New Scientist.
Jan 26, 2026 | Change, Governance
John Maynard Keynes observed that the real difficulty in progress lies not in developing new ideas, but in escaping from old ones. On Australia Day 2026, that quote sounds entirely appropriate.
We remain trapped in habits that once worked but now quietly undermine our future: short‑term populism, dependence on other nations’ industrial and manufacturing infrastructure, and a policy culture that treats national problems like household pests: spray them, move on, and hope they do not return.
If we want our children to inherit a standard of living at least as good as our own, we must move beyond management by press release and confront the structural weaknesses of Australia.
Public Policy: Reform in Name Only
Genuine reform has become a terminal case. A three‑year election cycle rewards noise over nuance, blame over building, and slogans over systems.
We need bipartisan, long‑term policy that serves the economy and the welfare of Australians. Debate and argument about the detail is healthy and welcomed, but the strategy should be bipartisan and apolitical. It seems we are moving further away from that ‘Pollyanna’ view of what is needed by the day.
Governance
Four‑year fixed federal terms would create the certainty required for capital, planning, and reform. Nations do not rebuild themselves on political marketing timetables.
Our federated system with the states and territories all having their own political and economic agendas leads to a disjointed, fragmented and inconsistent set of regulations that act as an ‘internal tariff’ adding complication, and therefore cost to doing business, innovating, and employing people. The further complexity and general incompetence of local government magnifies the complexity for little or no return.
Tax: Builders vs. Rent‑Seekers
Our tax base leans ever harder on PAYE workers while wealth slips through loopholes. The Henry Tax Review still gathers dust after more than a decade, its recommendations largely consigned to the waste basket with little or no serious consideration. We reward speculation more than production and tolerate profit shifting, particularly of international companies.
Multinational companies can, and are encouraged by the rules, to move profits made in Australia to low tax countries. Billions of dollars in profits made using Australia’s infrastructure, education, natural resources, and innovation without contributing to the development, or even maintenance of the assets they plunder are moved ‘taxless’ overseas.
Sovereign Capability
Depending on the stability of others is not strategy; it is complacency. We must replace “cockroach subsidies”, panic payments to multinationals to stay open, with disciplined investment in capabilities where Australia can genuinely compete. Agricultural and mined commodities, critical minerals, med‑tech, and renewables.
As the world fractures, defence will consume more of an already overstretched budget as we seek to ensure we can defend ourselves. In this context, the shipping of billions to a now unpredictable partner should lead to reconsideration of the budget chunk being allocated to AUKUS. Investing our own defence capability would be a catalyst to building the complexity of the economy by enabling domestic innovation and manufacturing.
When you look at the erosion of sovereign capability, and the lack of development over the past 20 years from a ‘first principles’ perspective, energy costs play a significant role. The little we are doing to re-engineer energy is too little, too slow, and too mired in vested interest.
Political Maturity
The shallowness of political discourse has been obvious for decades, but the Bondi attack, exposed how little institutional depth we have built beneath decades of prosperity. We struggle to conduct informed debate, let alone deliver constructive outcomes. The coalition bust-up during the past week, seemingly more serious than the tiff just after the election whitewash is ample demonstration of the lack of depth and maturity.
The Coalition was in a weak electoral and philosophical position before the split. Now however, the current government is without an effective, rational, or even marginally coherent opposition, which is never a good outcome.
Economics
Current expenditure patterns discourage entrepreneurship and quietly mortgage the future. Eight state‑based regulatory regimes function as internal trade barriers and sources of massive and wasteful duplication. Harmonising licensing, standards, safety rules, and a host of other factors would remove a silent and pervasive tax on productivity.
We are running a structural budget deficit. This cannot last forever, but since Covid, we seem to have just accepted that as the status quo. Prior to Covid, the argument across the federal parliament was defined by who could deliver the least deficit. Economic logic played little part in the finger pointing, but even that quasi discipline is now gone. To be fair, the deficit to GDP ratio in Australia currently around 1%, compared to the enormous debt in other countries, notably the US. However, that just means we are a little less worse off than they are.
Making change is hard. There will be winners and losers, and the losers will not be grateful. Instead they will make a lot of noise, goose up their local members, creatively make up statistics that demonstrate that the sky will fall, and generally try and scare away any change that might affect their position.
Lee Kwan Yew, then the PM of Singapore observed that Australians risked becoming the white trash of Asia in about 1978. The comment contributed to the significant changes made by the Hawke and Keating governments, but since then, with the single exception of the introduction of the GST by the coalition on July 1, 2000, there has been no further progress. Meanwhile the world has changed, but we remain stuck in the 20th century.
Transparency
The promised culture of openness by the current government as part of their election platform for the 2022 election never arrived. The NACC, set up to ‘honour’ the election pledge, exists without teeth. FOI processes now resemble obstacle courses as anything that might be debated is redacted, assuming you can get a request filled without a court order. Government transparency has become a slogan, not a practice.
Gambling Reform
Every poll tells us that a huge majority of Australians are in favour of a complete ban on gambling advertising. It was promised, then abandoned. Advertising continues, while sporting bodies and state treasuries collect their share of a misery dividend. The fact that we cannot excise such a blight on the national face because the vested interests are too strong, and cash strapped states need the revenue is a national disgrace.
Housing
Housing is a wicked problem born of long neglect. Any meaningful reform will create losers who will complain loudly. The memory of the changes proposed in the 2019 election still paralyses political courage. Meanwhile, a generation drifts further from ownership and stability.
Infrastructure and the Future of Work
We cannot build a nation on slogans. We must invest in productive assets that will generate returns over time by acting as the foundations of commercial activity.
Energy
The renewable transition is not optional. We either invest in transmission, storage, and firming, or we continue our slow slide toward industrial irrelevance. Mobile capital will not invest when the key manufacturing input, energy, is not internationally competitive, and stable. Australia is a net exporter of energy delivered via huge reserves of gas and coal. Added to that is the potential of renewables to deliver globally competitive energy for manufacturing, and initial value adding of current commodity exports. The political ‘food‑fights’ over the last 20 years introduced uncertainty. That delays and erodes the competitiveness of both domestic private investment, and the needed international capital inflows.
Education
Education is foundational infrastructure. From primary school through to post graduate and trade certification, we desperately need to invest to provide a base for future prosperity. The recent loading of university costs onto student, is incredibly stupid, short sighted, and destructive. Treating international students, who are filling a significant funding gap in universities, as a housing policy instrument is economic self‑harm and diplomatic short‑sightedness. We amputate revenue, talent, and long‑term regional influence in one clumsy gesture to appease a noisy minority.
Universities must also abandon twentieth‑century teaching models. The future belongs to those who can govern machine reasoning, not merely memorise outputs. The need to teach kids how to think, rather than to remember has never been more fundamental.
Industrial Complexity
Australia now ranks around 102 on the global complexity index, nestled uncomfortably between industrial giants Senegal and Yemen. That is not a badge of honour.
We need trades, technicians, managers, and engineers again. Complexity depends on energy certainty, skills depth, and management capability. Right now, all three remain constrained.
How Enterprises Must Respond
While governments stumble, enterprises cannot wait.
Digitise everything.
Search is no longer a box on Google. It is a behaviour across Instagram, TikTok, ChatGPT, Reddit, and LinkedIn, amongst others. Businesses must structure their messaging for conversational discovery, not keyword games.
Platforms are building ecosystems that punish exits. Businesses must capture leads inside ecosystems using automated, conversational engagement rather than fighting algorithms designed to manage behaviour. I suspect the digital world will coalesce into a small number of ecosystems with high and expensive barriers to exit.
Like it or not, the world is now digital, and rapidly evolving in unpredictable ways (despite my prediction above) beyond knowing that tomorrow will be different to today. Resilience, awareness of externalities and a willingness to embrace change have become mandatory, and being digitised enables that.
Conversely, this need to digitise to survive also means that there will be a rebirth of the importance of brands, what they stand for and deliver to customers. Being differentiated in ways that create genuine value for customers in a niche your brand ‘owns’ will evolve into a driver of success greater than it ever has been.
The power of one to one communication, referrals, and deep personal relationships will a hugely valuable discriminator amongst this sea of Digital ‘sameness’.
The Age of AI is here.
AI has flooded the world with plausible nonsense, as well as astonishing potential for productivity gains. Building AI capability into all facets of an organisation is essential to survival, but it will not happen by decree or osmosis, it takes that magic and rare ingredient: leadership.
Authenticity and evidence of humanity now carries commercial value as bulwarks against the tsunami of AI generated slop assaulting us from all directions
The problem is that the slop improves daily. Branding, as noted, will become more important, not less. Unfortunately, branding demands patience, discipline, and faith: three qualities accountants, lawyers, and engineers who run corporations rarely demonstrate. Those representing the customer must step up an ensure that investment choices are made that enable long term commercial sustainability
Australia and Geopolitical Reality
The American writer and philosopher H.L. Mencken wrote in the Baltimore Evening Sun on July 26, 1920:
“As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people. On some great and glorious day the plain folks of the land will reach their heart’s desire at last, and the White House will be adorned by a downright moron.”
It took 103 years, but Menken, were he still alive, would have seen his prediction come true. Perhaps he was looking down as President Trump berated rationality generally, and Europeans specifically in Davos last week.
Australia, like much of the world, has largely bent the knee to the Trump administration. With limited exceptions, such as recognising the rights of Palestinians to have a place of their own. We have accepted the chaotic and inconsistent behaviour of our long-term alliance, trading and defence partner because we cannot change it, and are wary of the consequences of any level of disagreement. Our options are limited. Middle powers cannot reshape empires, but they can preserve self‑respect and build sovereignty. This position was effectively articulated by Canadian PM Mark Carney in Davos, just before Trump delivered his incomprehensible bucket of drivel
Short‑term discomfort from speaking plainly costs less than long‑term erosion of national confidence.
Meanwhile, our chief trading partner, China, is in a race for world dominance with the US. It seems they are standing back, recognising the wisdom of never interfering with a rival while they are busy screwing up. However, being the meat in the sandwich is never comfortable.
Climate Change: The Moral Failure
Kevin Rudd proclaimed ‘Climate change is the great moral challenge of our generation’ in 2007. This came at the tail end of 30 years of scientific evidence and advice to governments from Fraser onwards that we were going to have a problem, and the sooner it was tackled the better it would be. Climate change is not Australia’s scientific failure; it is another failure of governance. To be fair, Australian politicians are in good company from around the world on that score.
We have never lacked information. We have lacked resolve. We have treated climate policy as a political inconvenience rather than an intergenerational responsibility. Each government has acknowledged the problem in principle, then diluted it in practice. Targets were framed as aspirations, not obligations. Timelines became negotiating tools, and responsibility was endlessly deferred. The result is a policy culture that behaves as though physics is negotiable.
Climate change exposes a deeper problem: our inability to act collectively when the benefits are long‑term and the costs are immediate. It reveals how easily leadership collapses into tactical marketing when sacrifice becomes visible.
Indigenous Australia
Australia Day cannot pass without recognising the unresolved deficit in Indigenous living standards. Of nineteen ‘Closing the Gap’ targets, only four remain on track. It is a national disgrace that one group of Australians does not enjoy the living standards of the rest of us, finds themselves incarcerated at multiples of their share of the population, and are denied basic services. Clearly the efforts that have cost billions are ineffective, but we seem not to recognise that fact, and try some different strategies.
To many, today is ‘Invasion day’, and while I disagree with that interpretation as a reason to change the name or date of the public holiday, I do accept the generational pain that came as a result.
Conclusion: The Real Deficit
Australia’s true deficit is not fiscal. It is moral.
We avoid honest conversations about trade‑offs, replace leadership with performance, and substitute courage with political choreography.
Reform will remain theatre until we demand better from those who claim to represent us, and the systems that generate political leadership are fundamentally reformed. I expect that reformation is in the very early stages of development. Our grandchildren will not have an institutionalised two party system, but one made up of independent members, and loose groupings of them that evolve to face the challenges of the day. One thing the writers of the constitution did give us that has, and will continue to deliver stability, is the compulsory preferential voting system
Meanwhile, amongst the economic and political carnage, we have what is becoming the usual summer bushfires, while at the other end of the country, the place is under water. In those times, Australians find that working together, pulling for the common good pays off, and we do it automatically. Why would you want to live anywhere else?
Yes, have a beer. Throw another snag on the barbie. But between mouthfuls, we should be considering the country we are leaving behind, and setting out to address in our own small ways the challenges our descendants will face, as we progressively pop off.
Escaping old ideas is hard. But if any country can do it, Australia can.
Happy Australia Day.
Header Image by Nano Banana
