Does anyone still think Kennet is such a hero ? [Archive]

Pessimistic

28 Feb 2002, 07:09

In my opinion he's just sad and sunk lower than even he thought possible, taking a job on radio.

I don't think Flicka will be able to look her girlfreinds in the eye again.

After all the favours he did for the big end of town you'd think they would have made him a director of coles myer or something.

Read on....

Mediocrity has its reward: Kennett
Richard Baker, Philip Hopkins
February 28 2002

Former premier Jeff Kennett yesterday accused the Bracks Government of rewarding mediocrity and inefficiency by giving Melbourne's three private tram and train operators up to $105 million of taxpayers' money.

Mr Kennett, whose privatisation reforms the Labor Government has blamed for the poor operating conditions faced by National Express, Connex and Yarra Trams, called the payments an "abrogation of responsibility".

He defended the privatisation of public transport overseen by his government in 1999 and said the companies were well aware of what the contracts contained.

"The people who tendered did it quite clearly knowing what the contracts contained. If they have failed to deliver ... then under no circumstances should Mr Batchelor or the government acquiesce," Mr Kennett said.

"What they have fundamentally done is reward inefficiency again and that's defeated the whole purpose of the contracts, which were understandably tough, deliberately tough, to get outcomes."

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The government said there was a risk the public transport system could have collapsed had they not made the payments.

Mr Kennett said if it became clear that the companies had failed to deliver on their promises, they should be penalised rather than rewarded.

But Connex Trains chairman Bob Annells told ABC radio yesterday that at the time of bidding, his company was not aware of the state of the ticket system. "The ticketing system clearly had problems, but people were not aware at the time of privatisation, either on the government or the operator's side, as to the extent of these problems, nor the flow-on effects of those problems to things like fare evasion," he said.

Around the world, it had become almost impossible to assess adequately the cost of running a public transport system. "The costs compared to the fare structures are simply getting out of control," Mr Annells said.

In January the government gave the operators $4.2 million in performance bonuses after the latest report on service levels showed improvements in punctuality and reliability.

Transport Minister Peter Batchelor announced on Tuesday that the companies would get $41.6 million to settle $110million worth of outstanding claims stemming from the privatisation process. They will also get $27 million to help develop new strategies to boost patronage and will share $3 million each year until their contracts expire between 2011 and 2014.

While Mr Kennett acknowledged that the ticket system introduced through privatisation was problematic, he said the government had been negligent in the administration of the public transport system.

The government yesterday maintained its attack on the Kennett government's handling of privatisation. Premier Steve Bracks told parliament the previous government had "mucked up badly" on public transport.

Treasurer John Brumby has compiled a list of what he termed failed privatisations with the potential to cost the state $500 million. This included the $20.2 million payment to end the contract for the Deer Park women's prison and $118 million to electricity companies.

London Dave

1 Mar 2002, 02:59

Jeffrey is still a hero, just ask him. i suggest you look up ken davidsons columns from the age, regarding privatisation...the kennett govt didnt do a great job with the privatisation of the state's electricity assets...Davidson was pretty much a lone voice in this debate, though Kennett never listened (just like his 'banning' of the ABC, dont like getting asked curly questions...) although Davidson has slammed the efoorts of Peter Batchelor in the Transport area.

Why did he never get invites to the top end of town???? he's thick, that's all, served his purpose.

joffa_pies4ever

1 Mar 2002, 05:54

LONG LIVE THE DEATH OF THE STINKING KENNETT LIBERAL REGIME.

Bloodstained Angel

1 Mar 2002, 06:49

Interesting also to note that there seems to be no place for him in Federal Politics either.

Would actually have loved to have seen Kennett on the Coalition backbench, making things very uncomfortable for all the NSW Tories that currently dominate the Coalition.

He would have had plenty to say about the boatt people debacle, thats for sure !

cheers

Shinboners

1 Mar 2002, 07:06

Yep, Kennett is still a hero. I still have memories of what a wasteland Victoria had become under Cain and Kirner.

Bee

1 Mar 2002, 07:22

HERO: A man of distinguished courage or performance, admired for his noble qualities.

Since when did Jeff ever fit that description?

Hero? Pffftt Not bloody likely!

1AD

1 Mar 2002, 07:28

Originally posted by Shinboners
Yep, Kennett is still a hero. I still have memories of what a wasteland Victoria had become under Cain and Kirner.

And now the wasteland is all Freeways (beep!!, there goes the some more $$$$$$$$'s) FREEways hahahahahahah

Kennett pfffftttttt

Pessimistic

1 Mar 2002, 07:28

Originally posted by Shinboners
Yep, Kennett is still a hero. I still have memories of what a wasteland Victoria had become under Cain and Kirner.

When bad governments (your opinion) get voted out sometimes the lousiest replacements get voted in, there's no real competition.

Shinboners

1 Mar 2002, 07:36

Originally posted by Pessimistic

When bad governments (your opinion) get voted out sometimes the lousiest replacements get voted in,

As you acknowledged, it's a matter of opinion. I thought that the Cain/Kirner government were a rabble that destroyed Victoria. I thought that Kennett did a very good job of fixing it.

there's no real competition.

Better get Alan Fels onto it then.

Theoden

1 Mar 2002, 10:07

Most people I speak to said he did a lot of good.

It must be pretty difficult being a liberal premier in the Australian capital of communism and totalitarianism.

Darky

1 Mar 2002, 10:51

Mr Kennett, whose privatisation reforms the Labor Government has blamed for the poor operating conditions faced by National Express, Connex and Yarra Trams, called the payments an "abrogation of responsibility".

The public transport system has long been a money pit. Although there are arguments for and against, I don't think it is a problem that a transport system running at a loss was offloaded to the private sector, without a major impact on the public.

But Connex Trains chairman Bob Annells told ABC radio yesterday that at the time of bidding, his company was not aware of the state of the ticket system. "The ticketing system clearly had problems, but people were not aware at the time of privatisation, either on the government or the operator's side, as to the extent of these problems, nor the flow-on effects of those problems to things like fare evasion," he said.

Around the world, it had become almost impossible to assess adequately the cost of running a public transport system. "The costs compared to the fare structures are simply getting out of control," Mr Annells said.

Sounds like they have bitten off more than they can chew. Why put in a multi-million dollar bid when you are "not aware" of what the ownership entails?

In January the government gave the operators $4.2 million in performance bonuses after the latest report on service levels showed improvements in punctuality and reliability.

So Kennett gets blamed for the flaws of privatisation, but then shouldn't he get the credit for privatisation's "improvements in punctuality and reliability"? It's got to work both ways.

The government yesterday maintained its attack on the Kennett government's handling of privatisation. Premier Steve Bracks told parliament the previous government had "mucked up badly" on public transport.

Where the blame lies for the public transport system's flwas lies is debatable. Previous Liberal government? Previous Labor governemnt that ran that state's coffers into the ground whic forced the Liberal government to privatise public enterprises? Inefficient management on the private operator's behalf? Current government which has had three years to fix things but still sooks about everything Kennet did?

Treasurer John Brumby has compiled a list of what he termed failed privatisations with the potential to cost the state $500 million. This included the $20.2 million payment to end the contract for the Deer Park women's prison and $118 million to electricity companies.

Compiled a list eh? No matter what's on it, it'll be a bigger list than the list of policies he came up with while Opposition Leader!

Pessimistic

1 Mar 2002, 11:12

You can;t deny that the autoticketing has been a fiasco. It took several years to implement yet you expect the current government to fix it within 3 years ?

The government would always be over a barrell on public transport - if the private operators run it down the efficiency of the city of melbourne goes with it.

Now I know for a fact the kennet government used tory party hacks as advisers when privatising stuff. Despite the fact that there were huge failures apparent already in the UK (the rail system was shut down indefinately a few years ago).

For Jeff to now criticise is a bit rich. I suspect he will only harm the liberals chances of re-election.

Pessimistic

1 Mar 2002, 11:16

Darky

1 Mar 2002, 11:29

Originally posted by Pessimistic
You can;t deny that the autoticketing has been a fiasco. It took several years to implement yet you expect the current government to fix it within 3 years ?

The government would always be over a barrell on public transport - if the private operators run it down the efficiency of the city of melbourne goes with it.

Now I know for a fact the kennet government used tory party hacks as advisers when privatising stuff. Despite the fact that there were huge failures apparent already in the UK (the rail system was shut down indefinately a few years ago).

For Jeff to now criticise is a bit rich. I suspect he will only harm the liberals chances of re-election.

Admittedly yes, the current government has had less than three years to fix things up, and I would not apportion a huge part of the blame to them. But the automated ticketing sytem was introduced in late in 1997, and the Liberals were voted out in September 1999, so the "years to implement" was really only two years so it's not as if the system was in place for very long under Kennett either.

In addition, the new ticketing system was being gradually intoduced across the whole transport network, so it took almost the full two years for it to cover the whole lot. You could also say that the FULL introduction of it was not complete until couple of months ago when the old clipped paper tickets and scratchies were scrapped once and for all. So two years of teething under Kennett and less than three under Bracks.

The automated ticketing was an attempt to reduce fare evasion and reduce lost income to address the losses of the public transport system. How quickly the current Labor government forgets that it was they that introduced the scratch ticket system, just as easily as they forget who introduced the poker machines into Victoria.

It is beyond doubt that privatisation and revised ticketing have had their problems, but there have been benefits as well.

Trains are cleaner, better maintained, more punctual and in my opinion are safer (relatively) than they were four or so years ago when privatisation took place.

The cycle of blame and political point-scoring never ends though.

Voice of Reason

1 Mar 2002, 11:36

This is all very reminiscent of the Thatcher era in the UK (I've lived in both UK & Victoria at the relevant times).

Few could sensibly argue that both Thatcher and Kennett were voted in by the people to do a job - fix the total mismanagement of the previous Labour and Labor governments. Horrific debts, prisoners to the trade uniions, strikes, inefficiency, public service waste, in short deplorable fiscal incompetence.

Because they were voted in for that reason, and in difficult times, people were more understanding than they might have been about the obvious flaws of both people themselves (arrogant, didn't listen, couldn't take criticism) and their policies.

The only critics tended to be either:
- your joffas ("battlers" to use the word I dislike most in Australian politics, apart from pork-barrelling) who would criticise anything that was Conservative or Coalition; or
- people easily characterised/demonised as bleeding-heart lefties or whatever.

The oppositions remained a rabble for several years after the Thatcher/Kennett victories.

Now, many years on, Thatcher's Britain is showing many flaws, primarily caused by short-termism and a failure to invest in the infrastructure, most starkly in transport and health, but also in any urban environment really.

"Big deals" and short term economic success diverted people but they didn't consider the long term. Strong-minded people who don't listen and make their decisions according to what they want to do can expect longer term pain and unexpected consequences.

It is fair though to point out the context in which both were elected in order to say why the pendulum swung so far the other way.

Shinboners

1 Mar 2002, 11:48

Originally posted by Pessimistic

Colonial stadium - disa$ter

Yes, but how much of the blame also rests with the AFL, Channel 7, and the investors who put their money into it?

Ca$ino

It can hardly be Kennet's fault that (damn...forgot his name...the guy that eventually sold the Casino to Packer) Mr. Thingy overspent on building the Casino, thus ensuring that any profits he made would be eaten up by the interest payments to build the thing.

The oil rig (federation square)

I'm actually willing to see how it turns out before having a go at it.

Tollways

As a user of the tollways for work, I'm quite happy with them. It saves me so much time when travelling.

Ticketing system

Well, I rarely use public transport, so I can't really comment on it.

The main thing I disagree with when it comes to privatisation is when it comes to national assets like gas, electricity, telephone etc. I think that essential services should remain in government hands so that it is available to everyone. On a national scale though, I don't have a problem with the privatisation of organisations like the Commonwealth Bank and Qantas as I don't see why governments should be running a retail bank or airline.

Pessimistic

1 Mar 2002, 13:45

I think there was one story where the tories in britain spent billions hut to privatise a small deparment worth a couple of million.

I saw a program a few years back which was very critical of the economic performance of governments of both colours from thatcher right back to the war. They were far too ideological and the only one to be credited with a sensible approach was the Callaghan labour one which preceeded Thatcher. It was moderate and was taking the correct steps.

Thatcher was very much for destroying and rebuilding and if I can use an analogy its like demolishing an old house then bulding a new one when you could have renovated. except you wanted blue bricks instead of red ones. and of course you sllep under the stars for awhile (as many people in britain did)

I think the program said it was almost 10 years before britains output reached the level thatcher inherited form labour. Some say the 'rot' was entrenched in britain and needed very drastic action to remove it. I'm not so sure, for all kennets faults they (and indeed hawke/keating) took a much more pragmatic view while achieving much the same thing.

I don't think thatcher should be looked back upon kindly. Not that she is bothered, she's quite batty these days.

Voice of Reason

1 Mar 2002, 14:48

Originally posted by Pessimistic
I think there was one story where the tories in britain spent billions hut to privatise a small deparment worth a couple of million.

I saw a program a few years back which was very critical of the economic performance of governments of both colours from thatcher right back to the war. They were far too ideological and the only one to be credited with a sensible approach was the Callaghan labour one which preceeded Thatcher. It was moderate and was taking the correct steps.

Thatcher was very much for destroying and rebuilding and if I can use an analogy its like demolishing an old house then bulding a new one when you could have renovated. except you wanted blue bricks instead of red ones. and of course you sllep under the stars for awhile (as many people in britain did)

I think the program said it was almost 10 years before britains output reached the level thatcher inherited form labour. Some say the 'rot' was entrenched in britain and needed very drastic action to remove it. I'm not so sure, for all kennets faults they (and indeed hawke/keating) took a much more pragmatic view while achieving much the same thing.

I don't think thatcher should be looked back upon kindly. Not that she is bothered, she's quite batty these days.

I don't think you can believe everything you see on TV - especially not about the Callaghan government that was completely incompetent. As a person, yes, Jim was moderate, but he couldn't control the people he presided over and the Healey economics era is best summed up by the story where he addressed the House saying "we were standing on the edge of a precipice." One year later, he said "we have taken a giant step forward."

I certainly don't look kindly on Thatcher.

I also accept that politicians have a lot less influence than they'd like to believe, in other words they are often dependent on events outside their control (oil prices, world deflation, etc)

Shinboners

1 Mar 2002, 16:07

Originally posted by Pessimistic
They were far too ideological and the only one to be credited with a sensible approach was the Callaghan labour one which preceeded Thatcher. It was moderate and was taking the correct steps.

And that's the key. When governments blindly follow ideology, then they will get results that will end up causing more hurt and damage than what they may have originally intended. It's not a matter of it being a left or right wing thing, both sides do it.

Furthermore, it's not just a government thing either. It was shown that companies that followed the "downsizing" trend of the 80s and 90s without taking into consideration whether it actually applied to their situation or not, more often than not fell behind their competitors. They lost key staff.....an extreme case was what Al Dunlap did to Sunbeam.

In the end though, just how much influence do governments have? I always liked a comment that Bill Clinton made when questioned about his input into the growth of the US economy during his presidency. He said something to the effect that he had no idea what decisions he made that led to economic growth, but hell, he'll take the credit for it.

The Hitman

1 Mar 2002, 17:27

Kennett made decisions. Some good, some bad. Cain and Kerner made shonky decisions which brought the state to it's knees, and Bracks hasn't really made any decisions.

Let me pose this. If Christine Campbell was a minister in Kennett's government, would she still be there? Bracks hasn't acted - I believe Jeff would have.

The Hitman

P.S. It was Lloyd Williams who was the owner of Crown, Shinners.

Bee

1 Mar 2002, 18:09

Hmmm Hitter, when are you 18?
I need to have a little talk to you before you are eligible to vote.

You sound too bloody smart to be a Lib.

Come on over to the left, that's where all us political astute people belong. :) ;)

Shinboners

1 Mar 2002, 18:17

Originally posted by Bee
Come on over to the left, that's where all us political astute people belong. :) ;)

Well, if you want to spend your life wondering (and whinging about) why every day cannot be a sunny day, then the left is the place for you. Or you can join us on the right* where we make all the money and have all the fun. :D

*Please note, we have a special "centre-right" membership where you can make your money and still have a social conscience at the same time. Just don't expect to have a say in the policies of the federal Liberal party. ;)

The Hitman

1 Mar 2002, 18:31

Come on folks, there is enough of me to go around.

Bee, I actually got a birthday card for my 17th from the electoral roll. I turn 18 in February (ironically the same date I turned 17! ;)), and I look forward to voting, although in my Labour dominated area, it won't exactly matter.

Don't get me wrong, I am not a full-on Lib. I come from a poor, working class background of Labour voters, and I'd rather have Bracks than Napthine. That said, Kennett was a better Premier then Bracks will ever be.

I would probably be classified as a swinging voter, but not one of those influenced easy. If pressed I'm a Lib, and would vote Howard over Beazley or Crean. I see Labour as not having many solutions - just whinging.

Something is always better then nothing...

The Hitman

Bee

1 Mar 2002, 18:38

Originally posted by Shinboners

Well, if you want to spend your life wondering (and whinging about) why every day cannot be a sunny day, then the left is the place for you. Or you can join us on the right* where we make all the money and have all the fun. :D

*Please note, we have a special "centre-right" membership where you can make your money and still have a social conscience at the same time. Just don't expect to have a say in the policies of the federal Liberal party. ;)

Brett, if you aspire to be another Johnny Howard, Peter Reith or God forbid, Alexander Downer then take Shinners advice and join him. But if what you want is "a fair go for all Australians" then take my hand come with me.

BTW the money Shinners is talking about comes from hard working taxpayers just like you will be soon. Do you really want to be like that? Do you really want to steal from the workers?
:D

joffa_pies4ever

1 Mar 2002, 20:19

Originally posted by Shinboners

As you acknowledged, it's a matter of opinion. I thought that the Cain/Kirner government were a rabble that destroyed Victoria. I thought that Kennett did a very good job of fixing it.

Better get Alan Fels onto it then.

HAHAHAHAHAHAHAHAHAAA

YOUR A DEADSET LOSER MATE !!!

ITS OBVIOUS YOUR A PART OF THE ESTABLISHMENT THAT'S THE ONLY PEOPLE THAT THUCKEN ****ER EVER CARED ABOUT!!!

GO AWAY YOU POOR FOOL!!!!!!!!

Shinboners

1 Mar 2002, 20:36

Originally posted by Bee

BTW the money Shinners is talking about comes from hard working taxpayers just like you will be soon. Do you really want to be like that? Do you really want to steal from the workers?
:D

What....do you mean in the same way that the unions, Simon Crean, Steve Bracks etc. nailed their colours to the mast of the good ship (or should that be aeroplane?) Fox/Lew/Tesna?

Bee

1 Mar 2002, 21:20

Originally posted by Shinboners

What....do you mean in the same way that the unions, Simon Crean, Steve Bracks etc. nailed their colours to the mast of the good ship (or should that be aeroplane?) Fox/Lew/Tesna?

No of course not Shins. I mean the way Peter Reith gave his phone card to his Merchant Banker son so he could share it with all his Merchant Banker friends!

BTW you do know what Merchant Banker is rhyming slang for, don't you? :D :p

Shinboners

1 Mar 2002, 21:28

Originally posted by Bee

No of course not Shins. I mean the way Peter Reith gave his phone card to his Merchant Banker son so he could share it with all his Merchant Banker friends!

Well, you know....I like to share my things too. Only difference is that I actually pay for them, with my own money, first. Unlike Reith Jr, Mr. Fox and Mr. Lew.

BTW you do know what Merchant Banker is rhyming slang for, don't you? :D :p

Does it rhyme with Natasha Stott-Despoja?!??! :D

Bee

1 Mar 2002, 22:35

Originally posted by Shinboners

Does it rhyme with Natasha Stott-Despoja?!??! :D

What's wrong with 'Tash? She is articulate, intelligent & attractive.
The only thing I can see wrong with her is her political allegiance. :p :)

Dippers Donuts

1 Mar 2002, 22:36

joffa_pies4ever

1 Mar 2002, 23:20

Originally posted by Dippers Donuts

In the interests of preserving workers entitlements, how exactly is that a bad thing?

Well said dipper

THE WORKERS UNITED
WILL NEVER BE DEFEATED!!

there quick to get stuck into the battling working man, actually its quite pathetic how todays society have been brainwashed to believe that any form of unionism is a bad thing....i'd hate to see where we would be now without ever having the union movement

But then again the world and its people today are thucked so why am i really suprised ?

ACV

1 Mar 2002, 23:23

I love reading politically based threads. It shows peoples inability to rationally assess arguments that differ to theirs. If anyone actually cared to look closely at the two major political parties in Australia they would notice that they are, esentially no different (aside from the fact that corporations tell the liberals what to do and the unions tell the ALP what to do) and have not been for quite a while now. On the political spectrum they are basically side by side in the dead center of the spectrum, if they weren't one party would win in a landslide everytime.

I find it quite interesting as to why people vote the way they do and in my experience most people don't really know why they vote the way they do (its often who their parents voted for, and even though people don't know why they really should vote for a certain party they are prepared to defend that party to the hilt. Another thing that p*sses me off is that people often don't take into account factors that effect political decisions ie Liberal voters often have scant regard for human need where as ALP voters often seem incapable of acknowlodging that running a country is now effectivly akin to running a business.

Apologies for this post really being off the topic, as it ended up in a different place to where i intended it to go (thats what you get for going out drinking and then trying to articulate a coherant argument). But i think basically what i'm trying to say is that people need to assess other peoples arguments and to try and understand where they are coming from before dismissing them just because they are different to yours

ACV

1 Mar 2002, 23:34

Originally posted by joffa_pies4ever

THE WORKERS UNITED
WILL NEVER BE DEFEATED!!

there quick to get stuck into the battling working man, actually its quite pathetic how todays society have been brainwashed to believe that any form of unionism is a bad thing....i'd hate to see where we would be now without ever having the union movement

But then again the world and its people today are thucked so why am i really suprised ?

The way that i see it is that unions are really outdated in todays society. I agree with you about the unions never existing, i also think that unions are a must in developing countries where working conditions are such that workers have absolutly no rights, either contractural or statutory.

However, in this day and age unions are simply disruptive and an impediment to the successful running of the country. Although having said that i think that they are very important in ensuring things like work place health and safety. Consequently, i refer to unions as a necessary evil in today society and the less power they have the better. (By the way i actually used to be in a union so i know what they are like)

Joffa are you in a union? If you dont mind me asking, which one?

The Hitman

2 Mar 2002, 04:41

I blame the Unions almost entirely for the grounding of Ansett Mark II. Yes, I support some unions to a certain extent, and that they are necessary, they pushed too far on this issue.

The Hitman

Santos L Helper

2 Mar 2002, 08:30

Originally posted by The Hitman
I blame the Unions almost entirely for the grounding of Ansett Mark II. Yes, I support some unions to a certain extent, and that they are necessary, they pushed too far on this issue.

The Hitman

examples? reasons? Come on Brett, please back up your claims.

Shinboners

2 Mar 2002, 10:38

Originally posted by Dippers Donuts

In the interests of preserving workers entitlements, how exactly is that a bad thing?

Firstly, Fox and Lew used the worker entitlements issue to get union backing for their package. The key issue for them were Ansett's rights at Sydney airport and the ability to make a hell of a lot of money from those rights. Once Greg Combet, Simon Crean, Steve Bracks etc. so publically aligned themselves to the Fox/Lew bid, there was no way for them to back out of it. After all, how could Combet tell his union members one day that he's backing the Tesna bid as being best for the workers, and then the next day say that he's made the wrong choice. Remember, the original plan was for 4,000 Ansett workers. It then became 3,000. And Combet, Crean etc. were very quiet on that issue. An easy win to Fox and Lew.

Onto the alternatives:

If Ansett had been liquidated back in September, then the workers would have recieved their full entitlements.

If the administrators had taken on the Patricks/Virgin offer, then Ansett would have probably remained a viable business (with Patricks taking freight, Virgin taking the domestic routes), at least 2,000 people would still have had their jobs and the rest would have received their entitlements. But of course, Patricks was not acceptable to the unions because Chris Corrigan runs Patricks.

With the Fox/Lew bid, they were only after the rights for the Sydney airport terminal. They structured Tesna into two parts - one for the terminal, one for the airline. Sydney airport wanted a guarantee that the WHOLE Fox/Lew bid would run an airline and they refused to give that guarantee. In other words, they were prepared to let Ansett die in the long term as long as they still had control of the terminals (which they could sell access rights to the various airlines). But what has happened is that Fox/Lew did not get their way (or the $1 billion worth of assistance from the government....at 3,000 jobs, that $333,3333 to give each worker a job for a couple of years when Fox/Lew really couldn't care if the airline survived or not), and the final line is that the workers will get only a few cents in the dollar of their entitlements, and even then, they won't be getting it in a lump sum.

In the end, the politics of the situation (and I'm including the federal government as well as the ALP and unions in this) destroyed any chance of the workers getting the best out of, what was, a situation that never should have arisen.

In the end, Australia is too small a market for 3 airlines. Everytime a third airline has tried to enter the market, they've failed. Throwing (taxpayer) money at a third airline won't change that fact.

Shinboners

2 Mar 2002, 10:40

Originally posted by Bee

What's wrong with 'Tash? She is articulate, intelligent & attractive.
The only thing I can see wrong with her is her political allegiance. :p :)

She's all fluff and no substance.

And something about fairies (or was it pixies?) at the end of the garden..... :D

Dippers Donuts

2 Mar 2002, 23:53

Originally posted by Shinboners

Firstly, Fox and Lew used the worker entitlements issue to get union backing for their package. The key issue for them were Ansett's rights at Sydney airport and the ability to make a hell of a lot of money from those rights. Once Greg Combet, Simon Crean, Steve Bracks etc. so publically aligned themselves to the Fox/Lew bid, there was no way for them to back out of it. After all, how could Combet tell his union members one day that he's backing the Tesna bid as being best for the workers, and then the next day say that he's made the wrong choice. Remember, the original plan was for 4,000 Ansett workers. It then became 3,000. And Combet, Crean etc. were very quiet on that issue. An easy win to Fox and Lew.

Onto the alternatives:

If Ansett had been liquidated back in September, then the workers would have recieved their full entitlements.

If the administrators had taken on the Patricks/Virgin offer, then Ansett would have probably remained a viable business (with Patricks taking freight, Virgin taking the domestic routes), at least 2,000 people would still have had their jobs and the rest would have received their entitlements. But of course, Patricks was not acceptable to the unions because Chris Corrigan runs Patricks.

With the Fox/Lew bid, they were only after the rights for the Sydney airport terminal. They structured Tesna into two parts - one for the terminal, one for the airline. Sydney airport wanted a guarantee that the WHOLE Fox/Lew bid would run an airline and they refused to give that guarantee. In other words, they were prepared to let Ansett die in the long term as long as they still had control of the terminals (which they could sell access rights to the various airlines). But what has happened is that Fox/Lew did not get their way (or the $1 billion worth of assistance from the government....at 3,000 jobs, that $333,3333 to give each worker a job for a couple of years when Fox/Lew really couldn't care if the airline survived or not), and the final line is that the workers will get only a few cents in the dollar of their entitlements, and even then, they won't be getting it in a lump sum.

In the end, the politics of the situation (and I'm including the federal government as well as the ALP and unions in this) destroyed any chance of the workers getting the best out of, what was, a situation that never should have arisen.

In the end, Australia is too small a market for 3 airlines. Everytime a third airline has tried to enter the market, they've failed. Throwing (taxpayer) money at a third airline won't change that fact.

Simplistic nonsense. Combet and the unions bought into the Tesna plan for one reason only - a continuation of employment for the 3000 Ansett workers. Lew and Fox gave endless assurances to the unions that their plan was viable, who was the ACTU to disbelieve them.

As for Combet, Creans etc backing for the Tesna plan, could you realistically expect them to have done otherwise? In theory it was a sensible plan. They did NOTHING wrong, all blame should be sheeted to Lew and Fox.

Your alternatives are also naive. Corrigin? Pigs arse (to quote Sir Jack). Only interested in the terminal rights, has no idea about running a low lost airline for the masses. He is not concerned about a third airline, he simply wants to maximise terminal revenues - and you are a fan of this miscreant?

The Patrick/Virgin proposal was never realistic, only considered by the deluded like yourself.

Vale Ansett, a low cost third carrier is possible in Australia, ye gods, only good management is required.

Shinboners

3 Mar 2002, 07:54

Originally posted by Dippers Donuts

Simplistic nonsense. Combet and the unions bought into the Tesna plan for one reason only - a continuation of employment for the 3000 Ansett workers. Lew and Fox gave endless assurances to the unions that their plan was viable, who was the ACTU to disbelieve them.

And now there won't be any Ansett workers with a job. I have no doubt with the ACTU's motivation...that is, the preservation of jobs. But what I do have a problem with was the whole politicisation of the process, especially with the Federal election that was happening at the time.

The other thing about the plan was that Fox and Lew only started it in September 2001 once Ansett had appointed the (original) PriceWaterhouseCoopers administrators. Corrgian had been planning for as early as March (?!??) 2001 as by then, Ansett's problems were well and truly being reported in the financial press and Corrigan anticipated that Ansett would eventually collapse. So Corrigan had at least a 6 month head start with planning. In fact, Fox/Lew's planning was so flawed that they tried to get Virgin involved in their bid during January 2002.

As for Combet, Creans etc backing for the Tesna plan, could you realistically expect them to have done otherwise? In theory it was a sensible plan. They did NOTHING wrong, all blame should be sheeted to Lew and Fox.

You make the point below that Corrigan had no idea on how to run an airline. What makes you think that Lew and Fox had any better idea than Corrigan? At least with Corrigan, he would have been working with Virgin Airlines. And I can't see why Lew and Fox should get all the blame when it was the unions who pursued them.

Your alternatives are also naive. Corrigin? Pigs arse (to quote Sir Jack). Only interested in the terminal rights, has no idea about running a low lost airline for the masses. He is not concerned about a third airline, he simply wants to maximise terminal revenues - and you are a fan of this miscreant?

But unlike Fox and Lew, Corrigan did not hide his true intentions. He wanted Ansett for their air freight capabilities...it would have fitted in well with his stevedoring operations and now his rail operations. As for the passenger service, that would have gone to Virgin Airlines. Corrigan knew what he was doing and how to fit it into his business. Fox and Lew didn't. In the end, Corrigan has a good chance of getting the Sydney terminal access and/or the Ansett freight services for much less than what he would have paid had his original proposal been accepted.

As for you other question, yes, I am a fan of Corrigan. As someone who works in a business that has to deal with the docks, getting goods in and out of the country has become so much easier since the Patricks dispute.

The Patrick/Virgin proposal was never realistic, only considered by the deluded like yourself.

As I've pointed out above, Corrigan knew how the Ansett operations would fit into his business. Fox and Lew were effectively starting from scratch. Which one is more realistic?

Vale Ansett, a low cost third carrier is possible in Australia, ye gods, only good management is required.

I wish a low cost third carrier was possible, but there have been four attempts (Compass, Compass 2, Impulse, and Virgin). The first three all failed and the fourth, Virgin, killed off Ansett. Surely it can't be all due to bad management? A more likely reason is that we just don't have the air traffic to sustain a profitable 3rd airline.

Voice of Reason

3 Mar 2002, 08:58

Originally posted by Shinboners

Firstly, Fox and Lew used the worker entitlements issue to get union backing for their package. The key issue for them were Ansett's rights at Sydney airport and the ability to make a hell of a lot of money from those rights. Once Greg Combet, Simon Crean, Steve Bracks etc. so publically aligned themselves to the Fox/Lew bid, there was no way for them to back out of it. After all, how could Combet tell his union members one day that he's backing the Tesna bid as being best for the workers, and then the next day say that he's made the wrong choice. Remember, the original plan was for 4,000 Ansett workers. It then became 3,000. And Combet, Crean etc. were very quiet on that issue. An easy win to Fox and Lew.

Onto the alternatives:

If Ansett had been liquidated back in September, then the workers would have recieved their full entitlements.

If the administrators had taken on the Patricks/Virgin offer, then Ansett would have probably remained a viable business (with Patricks taking freight, Virgin taking the domestic routes), at least 2,000 people would still have had their jobs and the rest would have received their entitlements. But of course, Patricks was not acceptable to the unions because Chris Corrigan runs Patricks.

With the Fox/Lew bid, they were only after the rights for the Sydney airport terminal. They structured Tesna into two parts - one for the terminal, one for the airline. Sydney airport wanted a guarantee that the WHOLE Fox/Lew bid would run an airline and they refused to give that guarantee. In other words, they were prepared to let Ansett die in the long term as long as they still had control of the terminals (which they could sell access rights to the various airlines). But what has happened is that Fox/Lew did not get their way (or the $1 billion worth of assistance from the government....at 3,000 jobs, that $333,3333 to give each worker a job for a couple of years when Fox/Lew really couldn't care if the airline survived or not), and the final line is that the workers will get only a few cents in the dollar of their entitlements, and even then, they won't be getting it in a lump sum.

In the end, the politics of the situation (and I'm including the federal government as well as the ALP and unions in this) destroyed any chance of the workers getting the best out of, what was, a situation that never should have arisen.

In the end, Australia is too small a market for 3 airlines. Everytime a third airline has tried to enter the market, they've failed. Throwing (taxpayer) money at a third airline won't change that fact.

Hey Dip,

You called this simplistic nonsense - I reckon it's pretty damn close to the mark.

I reckon Australia is actually a one and a half airline country - and I don't see that changing without massive immigration. A niche like Virgin might go all right and regional airlines ditto. We should use the international airlines, which often have a lot of spare capacity internally, more creatively.

Ansett and (even more so) Air New Zealand were appallingly managed, but it's hard to make it work here and it is difficult for good management to admit when thet're trying to make the unworkable work. I was interested to see that ASIC are not going to prosecute the directors for insolvent trading as there is no case.

In terms of blame, I blame the unholy alliance of Fox, Lew, the administrators and the unions, which was spiced up even further by the media and the understandable wishful thinking of all concerned. Of those parties, I think Fox and Lew acted the most selfishly - the others were either doing their job or trying to do the best for other people.

Theoden

3 Mar 2002, 12:48

There is far too much depth in the matter to put it all on one post.
Bu here's a simplistic view.

Why did Ansett go under in the first place?

It is easy to say 'bad management', and it would be true. But were the management ever allowed to manage? The root cause was that Ansett was massively overencumbered with costs. These costs were a direct result of affordability created by the collusion betwen Ansett and Qantas and were paid for by the public exhorbitant air fares. Deregulation, and in particular Compass, broke that partnership and Ansett nearly went under over a decade ago because of it. Qantas was protected by international routes that buffered the local price war.
Strike after strike had resulted in costs increasing as management chose capitulation rather than suffer strike action and immediate revenue loss. An example is redundancy pay. negotiated to 4 weeks for every year worked. Agreement to that had no immediate effect on profitability as such costs are not provided for in accounts. However, look at the dilemma future management would have due to that agreement. A loss making part of Ansett perhaps should be closed but the cost of redundancy may make such a huge profit hit that the management is forced to keep going with the loss making part. And as the financial position gets more precarious the threat of a strike is a threat to bring the company over the precipice and so management is forced to capitulate........a slippery slope but perhaps it can be seen that the unions have controlled the destiny of Ansett since deregulation.

Tesna......Fox/Lew

Have they any experience of running airlines? No. So why would they commit so much money to buying Ansett? The answer is simple. They didn't want Ansett. They wanted the terminals and the freight business. That industry they are good at. Ansett as a flying concern......plan one: a deal with Virgin Blue plan2: sell it off to Singapore airlines or another buyer. Interim: Offset the losses with the profit from the airports/freight etc. and squeeze as much out of the government as possible.
Let's face it, why did Tesna need the terminal leases to fly. Virgin, Compass etc had no leases. International airlines have no leases. All it needs is an agreement on landing rights and use of terminal space,,,,,,,,,,,but Fox/Lew didn't want the albatross without the crown of jewels.

The Future

Ansett died many months ago, its passenger numbers in the past three months were meaningless. Virgin Blue and Qantas have the market and Virgin Blue will erode the market share of Qantas because of it's preferable attitude to customers. Virgin or a new player will arise to challenge Qantas for corporate business. And in time niche operations, similar to Ryanair, will be introduced with airfares lower than anyone can imagine. In time Qantas will be forced to reduce costs by confronting the unions or go the way of Ansett, the unions are already trying to manipulate Virgin workers to re-establish control over the industry for fear of just that.

Shinboners

3 Mar 2002, 13:36

Here's an excerpt from an article (Ansetts Unholy Alliance by Stephen Long) in this weekend's Australian Financial Review. Now tell me, are the unions still free of blame of the Ansett fiasco?

"From the outset, the unions' agenda was one that puzzled some who worked in the staid realm of accountancy: virtually at any cost, get the airline backin business ans save the jobs. Initially at least, it was the union bosses, not insolvency experts, who decided whether perspective buyers had the right stuff and, just as importantly, the right intentions.

And they were willing to use their muscle, as Hedge discovered. Four days after Ansett collapsed, unions forced him and his team from PricewaterhouseCoopers to resign as administrators. Allegedly, they were ousted because of a conflict of interest stemming from PwC's role as auditor of Air New Zealand, which owned Ansett and was blamed by the unions for Ansett's demise. While there is no doubt that perceived conflict of interest was a factor - anger and hostility towards Air New Zealand was at a boling point. Such conflicts abound in the professions - Andersen, which the ACTU installed in place of the dumped firm, act as corporate auditor for Fox and Premier Investments, owned by Lew. PwC's decision to ground Ansett's aircraft was the real reason it was dumped. Unions wer furious at the decision, taken at 2am a day into the administration, which key leaders read as a signal that Hedge wanted to swiftly liquidate the airline.

Unions chose Mark Mentha and Mark Korda of Andersen because, in the words of Australian Workers Union secretary Bill Shorten, "they were seen as insolvency doctors who tried to keep companies alive". Shorten and a Melbourne labour lawyer who gained notoriety during the docks dispute, Josh Bornstein of Maurice Blackburn Cashman, were pivotal in the dumping of PwC and bring in Andersen. Both had worked with the two Marks and were impressed by their efforts to save companies, including the textiles group Bradmill Undare where 35% of the workforce kept their jobs; and Pelaco, where 50% of jobs were saved; and music retailer Brashs where 8 in 10 kept jobs.

But as time went on, high level Andersen partners became disturbed at the apparent closeness between the administrators and the unions. Andersen insiders say that Chris Knoblanche, a senior partner, was horrified when he read that his colleagues were feted as heroes at an ACTU dinner by unionists who fell to their knees before the two Marks, bowing and chanting, "we are not worthy".

Virgin Blue's CEO, Brett Godfrey, tried to woo Ansett's unsecured creditors, and further his ambition to push aside Tesna and buy Ansett's valuable terminals in coalition with Corrigan, by criticising the closeness between the unions and the administrators. The Marks, to loud applause from the unions, quipped that they, "didn't need a Virgin to come in and show them how to doe the job". Fox dropped his dacks and declared that Corrigan could kiss his arse. More and more, it seemed that the Ansett battle was about mates: you were either mates with the unions or mates with the government."

So there you have it. The unions selected the buyer of Ansett (Fox/Lew) and the seller of Ansett (the Two Marks from Andersens). The sale was a closed shop, it collapsed, and for that alone, the ACTU has to take their share of the blame. Furthermore, they ignored the only serious buyers for Ansett in the market, Virgin Blue and Patricks Corporation, and the final result was that they screwed over the very people (the Ansett workers) that they were trying to protect.

ACV

3 Mar 2002, 17:03

Originally posted by Shinboners
and the final result was that they screwed over the very people (the Ansett workers) that they were trying to protect.

And this comes as a suprise to anyone?

Dippers Donuts

4 Mar 2002, 00:23

Originally posted by Shinboners

And now there won't be any Ansett workers with a job. I have no doubt with the ACTU's motivation...that is, the preservation of jobs. But what I do have a problem with was the whole politicisation of the process, especially with the Federal election that was happening at the time.

The other thing about the plan was that Fox and Lew only started it in September 2001 once Ansett had appointed the (original) PriceWaterhouseCoopers administrators. Corrgian had been planning for as early as March (?!??) 2001 as by then, Ansett's problems were well and truly being reported in the financial press and Corrigan anticipated that Ansett would eventually collapse. So Corrigan had at least a 6 month head start with planning. In fact, Fox/Lew's planning was so flawed that they tried to get Virgin involved in their bid during January 2002.

You make the point below that Corrigan had no idea on how to run an airline. What makes you think that Lew and Fox had any better idea than Corrigan? At least with Corrigan, he would have been working with Virgin Airlines. And I can't see why Lew and Fox should get all the blame when it was the unions who pursued them.

But unlike Fox and Lew, Corrigan did not hide his true intentions. He wanted Ansett for their air freight capabilities...it would have fitted in well with his stevedoring operations and now his rail operations. As for the passenger service, that would have gone to Virgin Airlines. Corrigan knew what he was doing and how to fit it into his business. Fox and Lew didn't. In the end, Corrigan has a good chance of getting the Sydney terminal access and/or the Ansett freight services for much less than what he would have paid had his original proposal been accepted.

As for you other question, yes, I am a fan of Corrigan. As someone who works in a business that has to deal with the docks, getting goods in and out of the country has become so much easier since the Patricks dispute.

As I've pointed out above, Corrigan knew how the Ansett operations would fit into his business. Fox and Lew were effectively starting from scratch. Which one is more realistic?

I wish a low cost third carrier was possible, but there have been four attempts (Compass, Compass 2, Impulse, and Virgin). The first three all failed and the fourth, Virgin, killed off Ansett. Surely it can't be all due to bad management? A more likely reason is that we just don't have the air traffic to sustain a profitable 3rd airline.
And now there won't be any Ansett workers with a job. I have no doubt with the ACTU's motivation...that is, the preservation of jobs. But what I do have a problem with was the whole politicisation of the process, especially with the Federal election that was happening at the time
So you blame the ACTU for the loss of jobs? As I said before the ACTU did the only thing they could have done and that was to support continuity of employment rather than a termination payment. That is their role in life. They can not be criticised for that.

The other thing about the plan was that Fox and Lew only started it in September 2001 once Ansett had appointed the (original) PriceWaterhouseCoopers administrators. Corrgian had been planning for as early as March (?!??) 2001 as by then, Ansett's problems were well and truly being reported in the financial press and Corrigan anticipated that Ansett would eventually collapse. So Corrigan had at least a 6 month head start with planning. In fact, Fox/Lew's planning was so flawed that they tried to get Virgin involved in their bid during January 2002.
So how do you explain your statement above in light of the fact that the Corrigin bid was received AFTER the Lew/Fox bid was accepted by the administrators?

You make the point below that Corrigan had no idea on how to run an airline. What makes you think that Lew and Fox had any better idea than Corrigan? At least with Corrigan, he would have been working with Virgin Airlines. And I can't see why Lew and Fox should get all the blame when it was the unions who pursued them.
It is in the public record that Lew/Fox romanced the unions. Why? Probably because they realised that the payouts after the fact would have been too prohibitive. As for Corrigin's efforts to run an airline, don't make me laugh, he runs balance sheets first and foremost, people are a distant second.

As for you other question, yes, I am a fan of Corrigan. As someone who works in a business that has to deal with the docks, getting goods in and out of the country has become so much easier since the Patricks dispute.
Fan of jackboots and balaclavas are you?

As I've pointed out above, Corrigan knew how the Ansett operations would fit into his business. Fox and Lew were effectively starting from scratch. Which one is more realistic?
Corrigin knew how to maximise profit from the maintainance and terminal operations, nothing to do with running an airline.
Fox and Lew may have been starting from scratch, at least with union support one could imagine the poor old Ansett worker may have stood a chance. Corrigin has never given a fat rats about the worker, to him it's all dollars and cents, dry economics. For that, this eejit is admired by like minded souls.

I wish a low cost third carrier was possible, but there have been four attempts (Compass, Compass 2, Impulse, and Virgin). The first three all failed and the fourth, Virgin, killed off Ansett. Surely it can't be all due to bad management? A more likely reason is that we just don't have the air traffic to sustain a profitable 3rd airline.
A third airline is feasible. If it wasn't why are there repeated attempts to crack this market? It will happen again (ie another player will enter the market) although I would suggest that initially some luck is needed (in terms of fuel prices, world economic conditions etc). Australia is a jewel of an air transport market, 1-2 carriers, growth economy etc.Qantas may be a fierce competitor but they are by no means unbeatable.

Theoden

4 Mar 2002, 10:49

The only reason that ACTU backed Tesna is that the 4000 employees were union loyalists and most of their inflated conditions were to be kept. The Corrigan/Virgin offer was the only long term credible one but workers would have been put on new contracts the same as the other Virgin employees and the ACTU could not stomach that.

But what is bugging me about Ansett is that it highlights an apalling deficiency in accounting standards. Companies have to make provisions in their accounts for accrued leave where it is payable. That is fair enough because it is a true liability. But what about redundancy pay? Most companies are at one week per year of employment and average wages are reasonably low enough for it not to make a huge difference. But look at Ansett when it went under, 18,000 employees on an average $90,000 a year, 4 weeks pay per year and an average of 5 years service. Quick calculation $623Million not shown as a liability. Now if that had been shown on the books many, many companys would not have given credit to Ansett. So I belive the standards need revising to show this real liability.

Pessimistic

4 Mar 2002, 11:54

Sadly this ansett thing has become a very political thing with TESNA/FOX/LEW/ACTU/ALP on one side and CORRIGAN/LIBS/Herald sun on the other. so the 'truth' may never come out.

Watch this space for the hun to announce corrigan to come in as a white night and how wonderful he is.

Shinboners

4 Mar 2002, 20:59

Originally posted by Dippers Donuts

So you blame the ACTU for the loss of jobs? As I said before the ACTU did the only thing they could have done and that was to support continuity of employment rather than a termination payment. That is their role in life. They can not be criticised for that.

I never put all the blame for the loss of jobs on the ACTU. As I posted earlier, I do understand their intentions. However, as someone once said, the road to hell is paved with good intentions, and they made the wrong choice. Compounding their error, they vetoed the Virgin/Patricks proposal.

So how do you explain your statement above in light of the fact that the Corrigin bid was received AFTER the Lew/Fox bid was accepted by the administrators?

Corrigan is a shrewd operator, who shortly after his bid was rejected, commented that "this game isn't over yet". I can only speculate on Corrigan's timing, but I think he would've realised that once the ACTU got control of the administration process, his bid would be rejected regardless of merit. Perhaps knowing this, he decided to wait to see what Fox and Lew came up with, see whether he could improve his own proposal, and then put pressure on the administrators by trying to trump the bid after the "acceptance" of the Fox/Lew bid.

As anyone who has watched the process of administration, or indeed the takeover battles of recent years (Rio Tinto vs Anglo-American for North Ltd. and later Argyle Diamonds were two very interesting battles) knows that deadlines are a flexible thing.

It is in the public record that Lew/Fox romanced the unions. Why? Probably because they realised that the payouts after the fact would have been too prohibitive. As for Corrigin's efforts to run an airline, don't make me laugh, he runs balance sheets first and foremost, people are a distant second.

Perhaps if the people who were running Ansett concentrated on their balance sheet too, we'd still have that airline in the sky. And why do you think Fox and Lew pulled out? They knew that their own numbers wouldn't add up. So it's pretty churlish to have a go at Corrigan for keeping his own numbers within a degree of financial viability (after all, we don't want anymore HIH style disasters, do we?).

As for the romance, it's also on the public records that the unions rang around various potential buyers (except for Patricks) including Fox and Lew. As it turned out, Fox and Lew were preparing their own bids and it was the unions that suggested that the two of them get together (as reported in the Australian Financial Review).

Fan of jackboots and balaclavas are you?

As I've said earlier, I work in an industry that has to deal with the docks. If you want thuggery, try the docks pre-Patricks.

Corrigin knew how to maximise profit from the maintainance and terminal operations, nothing to do with running an airline.
Fox and Lew may have been starting from scratch, at least with union support one could imagine the poor old Ansett worker may have stood a chance. Corrigin has never given a fat rats about the worker, to him it's all dollars and cents, dry economics. For that, this eejit is admired by like minded souls.

You're concentrating on Corrigan and totally ignoring the Virgin Blue part of his proposal. We all know that Corrigan wanted the terminals plus the air freight operations with the travelling and tourism going to Virgin Blue.

And yes, Corrigan does concentrate on the dollars and cents. But the reality is that a business cannot work unless a profit is made.

A third airline is feasible. If it wasn't why are there repeated attempts to crack this market? It will happen again (ie another player will enter the market) although I would suggest that initially some luck is needed (in terms of fuel prices, world economic conditions etc). Australia is a jewel of an air transport market, 1-2 carriers, growth economy etc.Qantas may be a fierce competitor but they are by no means unbeatable.

I wish I could be as optimistic as you, but I don't think we'll see a third airline until Australia gets a larger population.

You and I aren't going to agree on any of this. Please understand that I don't put all the blame on the unions....the government, the ALP, Qantas, the NZ government, all had a role in destroying Ansett. I just believe that something could have been salvaged if the Patricks/Virgin Blue bid had been accepted.

Shinboners

4 Mar 2002, 21:03

Originally posted by Theoden
But what is bugging me about Ansett is that it highlights an apalling deficiency in accounting standards. Companies have to make provisions in their accounts for accrued leave where it is payable. That is fair enough because it is a true liability. But what about redundancy pay? Most companies are at one week per year of employment and average wages are reasonably low enough for it not to make a huge difference. But look at Ansett when it went under, 18,000 employees on an average $90,000 a year, 4 weeks pay per year and an average of 5 years service. Quick calculation $623Million not shown as a liability. Now if that had been shown on the books many, many companys would not have given credit to Ansett. So I belive the standards need revising to show this real liability.

I don't think the accounting standards need to be tightened. And anyway, there are so many loopholes that plenty of things can be hidden in a set of accounts.

What needs to be strengthened is the law. If the government can compel all companies to pay money into their workers superannuation accounts, then surely it can't be that difficult to change the law so that all worker entitlements are paid into a trust account with the money being paid out when a company goes bust or the employee leaves the company.

Pessimistic

5 Mar 2002, 07:49

Dippers Donuts

5 Mar 2002, 08:31

Originally posted by Shinboners
I never put all the blame for the loss of jobs on the ACTU. As I posted earlier, I do understand their intentions. However, as someone once said, the road to hell is paved with good intentions, and they made the wrong choice. Compounding their error, they vetoed the Virgin/Patricks proposal.

Given Corrigin's previous union 'dealings' one can understand any reticence on their part in dealing with him. They made no real error rejecting the patricks proposal, by that stage they had already agreed to back the Fox/Lew consortium.

As anyone who has watched the process of administration, or indeed the takeover battles of recent years (Rio Tinto vs Anglo-American for North Ltd. and later Argyle Diamonds were two very interesting battles) knows that deadlines are a flexible thing. To a point true, in the Ansett case Corrigin/Patrick though had plenty of time to get their offer in earlier. Part of the Corrigin 'blowtorch to the belly' style of management I suppose.

Perhaps if the people who were running Ansett concentrated on their balance sheet too, we'd still have that airline in the sky. And why do you think Fox and Lew pulled out? They knew that their own numbers wouldn't add up. So it's pretty churlish to have a go at Corrigan for keeping his own numbers within a degree of financial viability (after all, we don't want anymore HIH style disasters, do we?). No one doubts Ansett cocked it up big time, that's not at issue here. Why did Fox and Lew pull out? Probably because the govt. failed to cough up the support they needed. Also Fox and Lew weren't prepared to spend any of their own money (ie assume any risk). As I have said before Fox/Lew deserve most of the blame here. I am also saying that Corrigin is not the white knight here.

As for the romance, it's also on the public records that the unions rang around various potential buyers (except for Patricks) including Fox and Lew. As it turned out, Fox and Lew were preparing their own bids and it was the unions that suggested that the two of them get together (as reported in the Australian Financial Review). Fox and Lew getting together made considerable sense at the time, without them pooling their 'resources' they had no hope of achieving anything. As for the Fin Review, it's not a bad read, good for share news etc, but when it comes to political comment I treat what they say with healthy skepticism.

As I've said earlier, I work in an industry that has to deal with the docks. If you want thuggery, try the docks pre-Patricks And if you wanted thuggery on a massive scale, try the docks during the waterfron dispute. As someone once said you can't have an ommelette without breaking a few eggs.

And yes, Corrigan does concentrate on the dollars and cents. But the reality is that a business cannot work unless a profit is made. That's obvious, I just wish Corrigin would view the workforce as an asset, not as a liability where costs can reduced. He seems to be from the Al Dunlap slash and burn school of managment. Sure it in theory can 'work' but there continually seems to be a terrible price to pay.

I wish I could be as optimistic as you, but I don't think we'll see a third airline until Australia gets a larger population. We'll see, my feeling is within twelve months somebody else will have a crack at it. Time wil tell.

You're concentrating on Corrigan and totally ignoring the Virgin Blue part of his proposal. We all know that Corrigan wanted the terminals plus the air freight operations with the travelling and tourism going to Virgin Blue. Virgin was part of his plan only because the law says that airport leases must be maintained by an actual airline carrier.

You and I aren't going to agree on any of this. Please understand that I don't put all the blame on the unions....the government, the ALP, Qantas, the NZ government, all had a role in destroying Ansett. I just believe that something could have been salvaged if the Patricks/Virgin Blue bid had been accepted. Fair enough to that, although I am not convinced as you seem to be of the merits of the Corrigin/Virgin (there, I said it) proposal. We'll probably never know I suppose, whilst it is still on the table it would require considerable re-working given Virgins vastly improved prospects since the Ansett crash.

Theoden

5 Mar 2002, 10:14

Originally posted by Shinboners

I don't think the accounting standards need to be tightened. And anyway, there are so many loopholes that plenty of things can be hidden in a set of accounts.

What needs to be strengthened is the law. If the government can compel all companies to pay money into their workers superannuation accounts, then surely it can't be that difficult to change the law so that all worker entitlements are paid into a trust account with the money being paid out when a company goes bust or the employee leaves the company.

I don't think your suggestion is workable as the liability is unrealised and for 99% of companies (those that don't go broke) it will never be realised. Putting money into a fund this way takes the companies working capital which would then be replaced with debt and a weaker company. It is also a suggestion of horrendous red tape as the redundancy entitlements swing on a weekly basis (daily for the likes of Ansett) and the cost of accounting plus the fund management costs would be a huge drain.
It is not the redundancy entitlements that concern me so much. Employees rank above unsecured creditors. In Ansetts case the employees will get paid out but unsecured creditors will get nothing and many small businesses will go to the wall. What can be done is an annual calculation of redundancy liability and that figure going on the balance sheet. That way a small business can see what would be left if the company went under and they can decide whether to offer credit terms based upon more accurate information.

ps Balance sheets tend to hide profits for tax purposes so are upside apart from this liabilty disclosure

Shinboners

5 Mar 2002, 17:51

Originally posted by Theoden

I don't think your suggestion is workable as the liability is unrealised and for 99% of companies (those that don't go broke) it will never be realised. Putting money into a fund this way takes the companies working capital which would then be replaced with debt and a weaker company. It is also a suggestion of horrendous red tape as the redundancy entitlements swing on a weekly basis (daily for the likes of Ansett) and the cost of accounting plus the fund management costs would be a huge drain.

Well managed companies can always find a way to adapt....some companies are so well run that they return capital to their shareholders (like Woolworths did a couple of years ago).

It is true that the liability is unrealised, and paying out that liability when an employee leaves is fine if the company is still solvent. However, a problem arises when a company isn't solvent as the assets do not cover the liabilities, and since employees effectively rank as unsecured creditors, the chances are they will finish with nothing. The issue thus, comes down to this, what is the best way to protect employee entitlements when a company goes bust? While it's true that a company can use the employees entitlement money as working capital, but the fact is that money is not for the company to use. That money is the employee's property. As we saw with Ansett, there were many employees who made a lifelong commitment to Ansett and will come out of it with nothing. Why should these people suffer?

As we've seen with companies like Enron and HIH, those up at the top and in the know were able to withdraw funds to protect themselves financially. Intimate knowledge of the finanical state of a company and the ability to remove funds is not available to employees. The only way to prevent the removal of assets that hurt the employees is to take away from the company the money that belongs to the employees, thus putting it out of the way of bad managers....hence, make companies pay it out to an outside trustee.

When a company goes bust. The administrators and liquidators get paid. The secured creditors get paid. The tax office gets paid. Then there is nothing. By forcing companies to take some money and paying it to a trust will ensure that employees get paid if a company goes bust.

Another point. The Ansett workers may eventually get their full entitlement by way of the $10 levy. But what happens to the thousands of other workers in less high profile companies who lose their entitlements when their employer goes bust? Not every company has John Howard's brother on the board of directors.

It is not the redundancy entitlements that concern me so much. Employees rank above unsecured creditors. In Ansetts case the employees will get paid out but unsecured creditors will get nothing and many small businesses will go to the wall. What can be done is an annual calculation of redundancy liability and that figure going on the balance sheet. That way a small business can see what would be left if the company went under and they can decide whether to offer credit terms based upon more accurate information.

It's an interesting solution, but I figure that most small companies are pretty much forced to sell to whoever they can. Unless a small company has a product that no-one else can supply, then the buyer will find another business that is willing to sell to them. The other thing is that private companies are not required to have their financial statements put onto the public record.

ps Balance sheets tend to hide profits for tax purposes so are upside apart from this liabilty disclosure

You seem to know your stuff.....probably better than I do. But if someone like me knows how to hide stuff in the financial statements, heaven knows what the experts can do.....and the experts did do it with situations like Bond, Qintex, Enron, HIH etc. etc.