Peter Smith

Perfect storm of incompetence

Forget about the High Court and what it decided about the legality of the Malaysian deal.

Just consider what your average person of commonsense would think of a deal – announced before its terms were agreed – which had Australia sending 800 asylum seekers to Malaysia, a non-signatory to the UN refugee convention, in exchange for accepting 4000 refugees from Malaysia, with Australia picking up all of the costs. It defined incompetence.

We have all suffered at the hands of incompetents. My own view is that competence is not as common as we would like to think. I sometimes wonder how the world works. But, that aside; it seems to me that competence is unequally dispersed among different professions. During my years in the workforce, a good deal of it in the banking industry, I was struck by how incompetence (and thuggery – that is another story) seemed to be no impediment to promotion within that industry.

There are some demanding professions which quickly weed out incompetence because its effects are immediate and evident and sometimes fatal. For example, from among a large number: cabinet making, making machine parts, respraying motor vehicles, heart and brain surgery, flying passenger aircraft. There are many professions where it is extremely difficult to hide incompetence for more than a very brief period. My working hypothesis is that this leaves a proportionately higher number of people in professions where incompetence can lurk for years during good times, waiting for its moment to wreak havoc.

The Global Financial Crisis provided a case study among senior bankers. I recall an Australian bank CEO publicly excusing his bank’s losses, through holding US mortgage-backed securities, on the basis that they had been rated triple-A. This provides a clue to the incompetent mindset.

Not only did highly paid bankers invest their depositors’ money solely on the say-so of some third-party rating agencies, which had previously rated Enron triple-A; but thought this provided them with a reasonable escape hatch. Such lack of understanding is astonishing. Or it would be among the competent. Of course, incompetents don’t know that they are incompetent. Delusions take over. They are inclined to blame other people and/or external factors for their failures. If this applies to bankers, it most certainly applies to politicians. This has been no more evident than in the perfect storm of incompetence exhibited by the Rudd/Gillard government.

A perfect storm occurs when adverse mutually-reinforcing elements combine. In this case we appear to have numbers of ministers in the same government, at the same time, who together are practitioners of incompetence to rival, perhaps outdo, the Whitlam government.

I was trying to think about what the government had done which might be regarded as a major accomplishment. I couldn’t think of anything at all. Personally, I have no difficulty with a government doing nothing. Unfortunately, in this case, accomplishing very little has been accompanied by trying to do a great deal.

We all remember the Prime Minister herself recording that the Rudd government had lost its way, even though she had been a prominent part of it. It wasn’t her fault. This goes without saying in the world of incompetency.

Failed schemes and reckless spending littered the Rudd regime. Fuel watch and grocery watch; the digital education revolution; the health revolution; the aborted legislation to combat the great moral issue of our time; the magic pudding RSPT mining tax (mining investment won’t suffer however high the tax), championed by Mr Swan with “expert” help from Ken Henry – now personally advising Ms Gillard (be concerned). And then there was reckless and wasteful so-called stimulus spending; turning Australia from creditor to debtor nation – starting under Mr Rudd, continuing under Ms Gillard.

 Ms Gillard with the assistance of Wayne Swan and other cabinet ministers has had no apparent difficulty in continuing, extending and expanding on this legacy of maladministration: the cobbled together new mining tax whose incidence and impact remain shrouded; the green loans and pink batts fiascos; the BER extravaganza rort; the multi-billion dollar back-of-an-envelope (disaster in waiting) NBN scheme; the prospective manufacturing-jobs-destroying carbon tax; the inept administration of the export ban on live animals; the Dili “solution”; and now the Malaysian deal.

Some of the usual left-wing suspects in the media applauded the deal; no-one of ordinary commonsense did or would. From the start it was a deal put together by incompetents whether legally valid or not. Of course Ms Gillard, in a hissy fit, blamed the High Court. That is what incompetents do. It is always someone else’s fault. Otherwise, the awful truth might dawn. Delusions take over and you hear her saying: “I am the best person to lead Australia”.

Two years before an election means that more damage can be done. Some of it will be costly to undo. I know that. I was employed by the State Bank of Victoria which had been a successful bank since 1842 before a small group of incompetent bankers got hold of it. Undoubtedly they thought they were the best people to lead the bank. I knew them. They did think that.

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