$150 Million For 6 Minutes Of Work – Why Not?

Less than a day after the news that shares in Elon Musk’s Tesla Motors are down 20% on their peak as questions start to mount about the company’s ability to successfully deliver quality products (including here, here, here, here and here ) comes the news that Tesla, already the beneficiary of $5 billion of taxpayer subsidies has now won the right to build 100 megawatts (*or 129 megawatt hours, see note below) of battery storage in South Australia.

Predictably, the media is all over it, and is happily running the government and the company’s lines – including that it is about “securing power,” shoring up the grid, and pushing that wicked coal and gas further to the sidelines. How lucky South Australia is that  Tesla has come to save the day!

But let’s do the journos’ job for them and ask a few questions:

  • How Much Will It Cost?

No idea.  After scouring available news sources it doesn’t appear that the South Australian Government has revealed how much of its long-suffering taxpayers’ money is being spent. But it’s probably most of the $150 million set aside for battery storage by the SA Government earlier this year. This is quite a lot – and much more than the $8 million per year that it would have cost to have kept South Australia’s last coal-fired power station open a little longer.

  • Batteries Are the Solution to Our Problems, Right?

No – electricity batteries are not Duracell. They don’t come with stored power and still rely on the electricity that somebody else needs to generate. If renewables were able to generate all of the electricity that households and businesses need in the first place then we wouldn’t need batteries!

  • Isn’t 129 Megawatt Hours Big?

While 129 megawatt hours certainly sounds like a lot of battery space, it actually isn’t

According to an official Australian Energy Market Operator report into South Australia of last year, SA electricity consumption in 2015-16 was 12,934 gigawatt hours or 12,934,000 megawatt hours. This equals an average of 35,435 megawatt hours a day or 1,476 megawatt hours an hour or 24.6 megawatt hours a minute.

So yes – if your maths is OK you will realise that this $150 million ‘mega-battery’ will only provide 6 minutes worth of South Australian electricity.

  • But It Can Help Stabilise the System, Right?

Yes, renewables when coupled with batteries can help to solve some of the problems that renewables themselves have created over the last 10 years but at what cost? Because traditional coal and gas generators are able to be controlled at will, they have been able to provide the so-called “grid stabilization” measures that the network needs to function. As gas and coal are pushed out of the market by government-subsidised renewables that cannot be controlled because their performance depends on the sun or wind at the time, authorities have to apply various band-aids which may very well include a bunch of expensive batteries ready to be used if needed. Stealing food scraps from bins may satisfy your hunger, but a good meal is much better.

  • What Could it Really Be About?

The official Tesla announcement is as amusing as it is revealing in that it seems to imply the batteries will solve any number of problems including helping to “solve power shortages, reduce intermittencies, and manage summertime peak load to improve the reliability of South Australia’s electrical infrastructure.” It also clams its power output is equal to the consumption of 30,000 homes which it magically claims is equal to the number of homes that lost power during last year’s blackout. Convenient.

The most relevant sentence from the Release is: “Tesla Powerpack will charge using renewable energy from the Hornsdale Wind Farm and then deliver electricity during peak hours to help maintain the reliable operation of South Australia’s electrical infrastructure.”

In other words it will be built partly with taxpayer funds, get cheap electricity from a nearby wind farm, wait until the market price is high then sell its limited output for a very large profit. This will also further undercut the economics of the gas generators that faithfully supply electricity into the market for less and less of the time but stick around because they can make up some of their costs during these peak times. Batteries that throw their power into the grid during peak times will push reliable gas and coal generators out of the market sooner.

  • Is there a More Detailed Explanation of Why a Battery Won’t Solve South Australia’s Problems?

Yes. For a slightly technical, but interesting explanation of some of this issues involved and why the battery is unlikely to fix them, see this blog piece by Paul McArdle from March where he explains that there are actually six problems in the South Australian power network.

  • Summary

This is what happens when politicians are in panic mode, particularly when it is to fix the problems that their own policies have created.

Like Transurban’s proposal for a new Melbourne road tunnel to help the Victorian Government get out of its East-West Link cancellation pickle at the cost of extending tolls on existing roads for another 10-15 years, battery providers have used the South Australian Government’s inability to guarantee a reliable supply of electricity to have its taxpayers subsidise their own business model.

The only reason Australia is suffering from supply interruptions and unprecedented price rises, is because governments have pursued policies that have destroyed the electricity market. This problem is likely to get a lot worse before it gets better.


(* Note that a megawatt is typically a unit of strength, not of a unit of output like the traditional megawatt hour. Batteries are usually measured by how much electricity they can provide not by how big they are. Fortunately Tesla has confessed that its 100 megawatt battery will provide only 129 megawatt hours (i.e. the equivalent of 129 megawatts for one hour) of actual electricity. It is like the difference between speed and kilometres travelled).

The Marxist roots of VCE

The truth is finally out. Over twenty -five years after the ALP Government led by John Cain government in Victoria introduced a new two year compulsory Victorian Certificate of Education (VCE) English Study to Years 11 and 12, what has long been suspected a finally been admitted in an innocuously entitled chapter in an equally innocuously book entitled ‘Required Reading: Literature in Australian Schools since 1945’, published earlier this year by Monash University Press. The re-imagined curriculum of the newly introduced VCE imposed on thousands of Victorian schoolchildren in 1990 was in fact – as this book make clear – underpinned by a dangerous Marxist ideology which considered schooling to be one of the many structures of bourgeoisie dominance which warranted destruction in the name of ‘equality.’

In a chapter devoted entirely to a discussion of ‘Text Selection and Curriculum Development of VCE English’, the authors who admit as much opine that the VCE ‘was a brave and imaginative attempt to develop an English curriculum which would no longer privilege the interests of the social “elites.”’  They are clearly of the opinion that the creators of the VCE were courageous social justice warriors, whose ultimate goal was to ensure that the new curriculum would no longer serve the purpose of those interests of the ruling ‘bourgeoisie’, otherwise known as the Australian middle class, the children of which presumably all went to private schools anyway.

It is highly symbolic that the contributors of this particular chapter chose to both introduce and conclude their piece in ‘Required Reading: Literature in Australian Schools since 1945’ with quotes from Louis Althusser. Althusser was a dogmatic Marxist revolutionary, member of the French Communist Party and intellectual leader of the left- wing revolution which swept through the institutions of learning in the 1960s.  After strangling his wife in 1980 on account of her ‘revisionism’ he then spent much of the ensuing decade in psychiatric institutions from whence he continued to write prolifically until his death in 1990.

Althusser’s particular contribution to the development of Marxist ideology was that he invented a highly impenetrable language in which questions could be neither posed nor answered. He also claimed that the only valid reason for intellectual endeavour was revolution. By this he meant the overthrowing of all those institutions which he considered to favour the ruling class, such as Church, family, school, trade unions, culture, press, judiciary and education, all of which he categorised as Repressive State Apparatuses (RSA).  To Althusser, education served the interest of the few to the detriment of the many and thus needed to be abolished or altered. To that end, Althusser redefined its purpose. ‘Schooling’, he wrote, ‘hails’ or ‘interpellates’ individuals as ‘concrete subjects.’

In the 1980s, both Althusser’s ideology and language were adopted by teachers such as Tony Delves who is cited in the chapter of ‘Required Reading: Literature in Australian Schools since 1945 under discussion. Delves subscribed to the Althusserian notion that education was longer about the acquisition of knowledge but rather about who you are and where you belong.  In an essay published at the time, Delves asserted, with a decent dose of revolutionary rhetoric, that English teachers ‘must be concerned with our students as vital, spontaneous, social beings who are being educated in a culture-destroying and soul- destroying community.’  His ideal curriculum was one in which grammar, structure, vocabulary, punctuation and other such trifles of the English language were to be done away because they are the work of the ‘liberal intellectual.’ For Delves and his comrades, this was all part of the class struggle necessary to achieve the Utopian socialism of their dreams.

Thus the VCE was an outright rebellion by the left against the existing order. Everything was reduced to the lowest common denominator in the name of ‘inclusion’ and ‘diversity.’ Percentages were done away and replaced with thoroughly dispiriting and non-discriminatory ‘S’ and ‘N’- ‘Satisfactory and ‘Not Satisfactory’. The authors of ‘Required Reading: Literature in Australian Schools since 1945’ happily informs us that many of classics were expunged and replaced with a dazzling array of modern texts which honed in on Althusser’s long list of RSAs. Olga Master’s’ Amy’s Children’, Marilyanne Robinson’s, ‘Housekeeping’, and Willy Russell’s ‘Educating Rita’ all undermined the traditional notions of the family.  The individual, twentieth century prejudice and discrimination were the main focus of ‘Love Poems and Other Revolutionary Actions’ by Roberta Sykes and ‘In Country’ by Bobbie Anne Mason.

At the time of its implementation, the VCE was quickly sized up by the main daily paper and other mainstream media which took one look at the new reading list and correctly concluded that the ‘Mickey Mouse’ curriculum was a dumbing down and a complete and utter waste of time.  In particular, the inclusion of Raymond Brigg’s graphic novel about the aftermath of a nuclear holocaust, ‘Where the Wind Blows’, attracted much condemnation. Much of the uproar also came from the appalled English teaching community who were of the opinion that the new curriculum did not do ‘justice to supporting our cultural heritage.’  And they were, of course, completely justified. This choice of texts was an undisguised exercise in social engineering and it deprived students of their cultural heritage and core knowledge.

Althusser’s diabolical ideology of the 1960s and the language he employed to express it, was thus formalised into Australian government policy in the 1980s by the then Education Minister, Joan Kirner, with the assistance of the teachers’ unions and a handful of left -wing revolutionaries masquerading as educators. This group of individuals, inspired by Marxist critique, performed a massive disservice to individuals and ultimately the nation. While their efforts were contested with varying degrees of effectiveness by successive governments, much of the philosophy and content ultimately found its way into the ill-considered National Curriculum mandated by the Howard government.

Monash University Press no doubt produced the book for the new ruling class of professional educators keen to congratulate themselves on the progress they have made in destroying the pre-existing model of education and imposing their own. But in providing evidence of the motivations and ideologies of those who drove the changes, it has also done a service to those who believe that this was where the rot started and therefore why a reversal of course is now more important than ever.


Australians back globalisation, free trade, and US alliance

Australians are overwhelmingly positive about globalisation and free trade, are showing signs of renewed support for the US alliance, and see China as an economic partner, not a military threat, according to the Lowy Institute annual poll released this week.

Most Australians (78%) believe globalisation, especially the increasing connections of our economy, is mostly good for Australia. This is largely unchanged from when the question was last asked in 2009, and higher (by 14%) than in 2006.

Despite anti-trade rhetoric across the West, most Australians are still positive about free trade. Australians believe free trade improves their standard of living (67%), the Australian economy (67%), Australian companies (61%) and job creation (55%).

Our attitudes to Donald Trump have also softened. In 2016, a small majority (51%) said that Australia should remain close to the United States under a theoretical President Donald Trump. In 2017, now that Trump is actually president, this has increased to nearly two-thirds (65%). Meanwhile, support for Australia’s alliance has actually increased under Trump. In 2016, 71% of Australians thought Australia’s security links with the US was very or fairly important; in 2017, 77% believe our alliance with the US is important.

Australia’s historic bonds of Britain also remain strong. On which global power Australians trust the most to ‘act responsibility in the world’, we express the greatest faith in the United Kingdom (90%). In our own region, most (79%) see China as more of an economic partner then military threat.

The news isn’t all good – most (79%) of Australians are dissatisfied with the direction of the world, and nearly half (48%) are dissatisfied with the way Australia is going. Meanwhile, almost all Australians see international terrorism (94%) and North Korea’s nuclear program (92%) as a critical and important threat. People are nevertheless optimistic about Australia’s economy (74%).

Australians’ views towards democracy also remain a concern. While a majority (60%) view democracy is preferable to any other form of government, there remains solid minorities who believe non-democratic government can be preferable (20%) or don’t care what form of government we have (16%). As confirmed by the IPA’s Growing Freedom survey, young Australians, aged between 18-29, express a lower support for democracy (52%).

Overall, there’s a lot to be happy about in Lowy’s latest survey. Our historic bonds and alliances have widespread support, and Australians understand the benefits of globalisation and free trade. Nevertheless, there is evidence of some pessimism and continued uncertainty about democracy.

Missed The Bank Tax Inquiry? Here’s 6 Points To Catch You Up

Today, a Senate Inquiry into the Major Bank Levy Bill 2017 was held in Parliament. Executives from the major banks and their associations gave evidence to Senators on a range of issues concerning the bank tax, including its likely effects and the policy process that led to its design.

Here are six key takeaways from the hearings.

1. Large scale deregulation and liberalisation of the financial sector is required

Australia is a corporatist country. Many sectors – finance, telecommunications, air transportation, groceries, internet service delivery – are dominated by a small number of large incumbent firms. Their market position is, in part, protected by regulations that make it difficult for smaller competitors to enter the market.

In the financial sector this includes the implicit government guarantee to bail-out a financial institution in the event of a failure. Anna Bligh, CEO of the Australian Bankers’ Associations argued that “I cannot imagine any Australian government of any political persuasion allowing one of our banks to fail.”

While large incumbent businesses may enjoy this position, the corresponding effect is that it is difficult for them to prosecute effective arguments against increased government encroachment. If some regulation is good, why is more bad? If the government guarantee is desirable, why is it wrong for the taxpayer to seek recompense for it?

In the future, it will be important for the banks to argue in favour of free enterprise capitalism, rather than crony capitalism. Yes, reducing regulation and red tape will have a negative effect on the market share of large incumbent businesses. But a more decentralised banking sector would make it more difficult for the government to justify interfering in the commercial affairs of financial institutions, which will be a long run benefit to the sector.

2. The process to develop the tax was poor

The hearings confirmed what has already been widely reported: that the design of the levy was rushed and lacked clarity of purpose.

Stakeholders had just two days to make a submission on draft legislation and only two days to provide a submission to the Senate Inquiry. The Commonwealth Bank noted that they only had one meeting with Treasury officials to discuss details of the policy. While Westpac noted that they had not received any modelling from Treasury despite requests.

In addition, the banks were required to sign non-disclosure agreements in order to receive details of the tax which is highly undemocratic and illiberal.

3. The tax is likely to be increased

Concerns were raised that the tax would likely be increased for two key reasons: firstly, the tax may not meet its revenue target, and, secondly, raising the tax is an easy option for future governments to meet any shortfall to general revenue.

A number of banking executives noted that this raises uncertainty about the future trajectory of the tax and is discouraging investment.

A similar tax introduced in the United Kingdom has been increased four-fold since introduction.

4. There is no such thing as absorbing a tax

Westpac was very strong on this point. Peter King, Chief Financial Officer of Westpac argued “a bank is not an entity separate from customers, shareholders, suppliers and employees.” Ultimately, a combination of these groups will pay the tax through, for example, higher borrowing costs and lower returns to shareholders.

Mr King also argued that the total tax liability increases as lending increases, which effectively makes the levy a tax on growth.

5. The tax has already had a negative effect

A number of the participants noted that the levy has already had a negative effect on the banks, financial markets, consumers, and the broader economy. Anna Bligh argued that $32 billion of share value was lost following the announcement of the tax.

This follows observations by business leaders outside of the financial sector, such as Alan Joyce, CEO of Qantas, that the levy is raising concerns that other profitable enterprises will be targeted for specific taxation.

Indeed, Mr King noted that “this law codifies the notion that it’s ok to tax a small number of companies to fill a budget gap just because they can afford it.” The effect has been to create uncertainty for investors. Mr King argued that institutional investors have already downgraded their position in Australia due to the tax.

6. There should be a sunset clause

All participants argued that, if the rationale for the levy is for Budget repair, then the levy should sunset once the Budget returns to surplus.

See the IPA’s submission to the Inquiry into the Major Bank Levy Bill 2017 and the Treasury Laws Amendment Bill 2017 here.

Everything you need to know about the Finkel Review

Finkel Review Will Make Electricity Price Problem Worse

If Superman pushed down a building then flew in to save all of the people, would he be praised as a hero or rightly condemned for creating the problem in the first place?

Renewables are not the hero of Australia’s current electricity price and security fiasco – they are the cause.

The problem with the Final Report of the Finkel Review, published this afternoon, is that it will only make this problem worse.

The only reason that prices are going through the roof and reliability is becoming a problem is because government legislation is pushing energy technologies that can deliver 24/7 electricity (coal, gas and nuclear) out of the market in favour of other technology (renewables) that cannot.

Clean Energy Target

The Review’s suggested replacement of the current Renewable Energy Target with a Clean Energy Target is a small improvement as it at least canvasses a role for coal and gas (to the chagrin of The Greens). The devil of course will be in the detail because if in fact only generators with carbon dioxide emissions below 700 kilograms per megawatt hour (700kg/MWh) of electricity are left penalty-free (as floated in the media this week) this will exclude almost all coal.

You can’t be serious about keeping power prices low if you rule out an ongoing role for the source of 75% of Australia’s current and 40% of the world’s electricity, particularly when Australia has at least 100 years of black coal and 1,000 years of brown coal still in the ground.

Under the 700kg/MWh rule, there is no way that Victoria would be able to efficiently use its world-class brown coal resource.

The Clean Energy Target will also be of little use if the states continue to do their own thing, with Victorian Premier Daniel Andrews this morning promising that he would keep his government’s 40% renewable target regardless.

Renewables Back-Up

The Review’s acknowledgement that renewables create intermittency and frequency variability problems is also welcome, though the suggested solution that new renewables in regions susceptible to supply disruption be able to cover shortfalls does not go far enough.

For supply security reasons and also to treat treating different fuel technologies equally, it should be a requirement that all generators be able to ‘cover’ those times when the weather isn’t playing ball either through alternative generators or batteries. The cost of this back-up should be met by each company, not the government.


Also welcome was the recognition that gas still has a role in the electricity mix, though it was ominously framed as a means to transition to a renewables-rich future.

However the report made it clear that new sources of supply are desperately needed and that rather than blanket bans on the unconventional gas industry, projects should be assessed on a state-by-state basis.


In fact, all energy sources – including gas, coal and uranium should be encouraged to participate in a free and open market to determine the most efficient way to generate electricity.

Three Years’ Notice

Evidence of the vengefulness of bureaucracy comes with the recommendation that generators will have to give 3 years notice if they want to close their plant.

Bureaucrats typically expect to be able to write the rules and boss the private sector around at will, hence were genuinely shocked and affronted when the operator of the now-closed Hazelwood brown coal power station in Victoria announced last November that it would close in March.

While most people in the private sector, or who have a personal relationship, know, if you treat someone like rubbish, and tell them over and over that they aren’t wanted, you shouldn’t be surprised if they suddenly pack up and leave.


It should be up to the private sector owners of a particular asset to decide if they can afford to remain in a particular market. If they want to leave then there is something wrong with the market, not with them.

Where To Going Forward?

The main take-out of the Finkel Report is that once again, carbon emissions policy has proven to be the tail wagging the energy affordability and reliability dog.

The role of an electricity system is to provide electricity for all of the consumers and businesses that need it – it isn’t supposed to be a laboratory for environmental activists to implement their own policy agenda.

While it will be up to government to respond to the report’s recommendations, it needs to do so cognisant of the need to keep the lights on and prices low. To this end, it is ominous that Federal Labor’s Shadow Environment Minister Mark Butler earlier this week spoke of taking whatever new scheme is implemented and scaling it up if Labor wins the next election.

Also ominous is today’s confirmation that major electricity company AGL that wholesale electricity prices having doubled over the last 24 months, retail electricity prices in major markets will rise by nearly 20% again on 1 July.

Electricity prices would be a lot cheaper, and supply a lot more secure, if governments let normal forces of demand and supply sort out how to satisfy consumer needs.

Brett Hogan is Director of Research at the Institute of Public Affairs 

Lionel Messi Is A White-Collar Criminal

Lionel Messi is in Melbourne with his Argentinian teammates to play Brazil at the MCG tonight. But should he actually be locked up in a Spanish jail?

Messi was convicted last year of evading millions of euros in taxes. His appeal was denied last month and his sentence of 21 months in prison and a €2 million fine was upheld. Messi, however, is likely to avoid jail because in Spain, first offences carrying sentences of less than two years are usually suspended.

By contrast, Melissa Higgins of Albury was recently sentenced to four years in prison for defrauding the Commonwealth of funding for her childcare business. Last year, we saw the sentencing of stockbroker Oliver Curtis to prison for insider trading. At the behest of the Greens, not normally known for being tough-on-crime, the Senate later held an inquiry into toughening penalties for white collar crime.

All of this takes place in the context of rapidly growing incarceration and related costs in Australia. Our national prison population has grown by almost 40 percent in the last 10 years, and governments now spend almost $4 billion on prisons each year. Fifty-nine percent of prisoners in Australian jails have been imprisoned before.

Forthcoming IPA research finds that Australia’s prison population has grown faster than all but five other OECD countries, and that our annual per prison expenditure is the fourth highest in the OECD. The growth of police spending has similarly far outpaced comparable countries. And yet, polling shows that despite this high expenditure, Australia consistently ranks among the countries whose people are most concerned about crime.

Clearly, we are not getting value for money. But how do we go about fixing this?

We need to start from first principles: personal responsibility and fair punishment. All offenders should be punished. Violent criminals must be locked-up to keep the community safe. But for nonviolent, low-risk criminals, other punishments are possible.

Unfortunately, the Spanish approach seems to forego punishment altogether for some offenders. We need an approach that recognises the inefficiency of jailing nonviolent, low-risk offenders but still delivers meaningful punishment.

In reshaping our criminal justice system, there are lessons we can learn from other jurisdictions. The IPA’s latest criminal justice research paper, Criminal justice reform: lessons from the United States outlines how reformers in American states have rationalised their states’ criminal justice systems towards community safety by targeting resources towards violent and recidivist offenders.

This process begins with punishment reform for nonviolent criminals, including petty thieves, low-level drug offenders, and white-collar criminals. Nonviolent offenders can be punished with a combination of home detention, movement restrictions, community service, fines, and restitution orders. These measures are cheaper and have shown promising results.

Community-based punishments also enable offenders who have jobs to continue in their work. This is important not only because unemployment is strongly correlated with a higher-risk of offending but because offenders can then be productive members of the community, rather than a drain on public resources. Which is to say, the public is better off with Lionel Messi on a soccer pitch than confined to a prison cell. And this should be a general principle, not one reserved just for famous and popular athletes.

If the Greens and others were serious in their contention that white-collar crime should be treated like violent offences, they would have objected to Lionel Messi being granted a visa. After all, over the years we have seen musicians, sportsmen, and activists all banned from entering Australia because of their criminal records. Singer Chris Brown was rightly denied entry because of his violent crimes, as was boxer Floyd Mayweather. Rapper Snoop Dogg was denied entry for drugs and gun charges. Tyler the Creator did not even bother applying for a visa, such was the controversy about his lyrics. If white-collar crime is so bad as to warrant prison, then Messi should have joined that list. Instead, the silence of the white-collar crime scare campaigners reveals their position to be inconsistent and opportunistic.

As we enjoy the spectacle tonight, we should imagine how it would be without its main attraction. His presence on the field should be a reminder that for some low-risk criminals, prison is an expensive waste.

Andrew Bushnell is a Research Fellow at the Institute of Public Affairs.

Image: “Messi Copa America 2011” by LG전자 is licensed under CC BY 2.0

McCapitalism burned by Hollywood

I should have known better. The founder of one of the world’s biggest corporations – and the forefather of ‘Big Food’ – was never going to get a sympathetic treatment from Hollywood.

But for a while, director John Lee Hancock had me. The Founder – Hancock’s biopic of McDonald’s founder Ray Kroc – starts promisingly enough. A down-on-his-luck travelling salesman, Kroc criss-crosses 1950s America, stopping at one lousy diner after another.

When a restaurant in the California desert puts in an unusually large order for Kroc’s latest gimmick (a state-of-the-art milkshake machine), he drives to San Bernardino to see it for himself. There, he meets Mac and Dick McDonald, proprietors of a thriving burger stand with lines around the block. They explain how they keep prices low by cutting down on overheads: No wait staff, all-disposable packaging and a menu limited to a handful of popular items. And unlike the drive-in restaurants, food at McDonald’s is served within 30 seconds, not 30 minutes, thanks to its revolutionary kitchen assembly line.

Obsessed with their brilliant business model, Kroc begs the McDonald brothers to let him franchise the restaurant. The three of them draw up a contract, and Kroc scuttles off to whip up franchisees in the Midwest.

So far, so good: A chance meeting of kindred entrepreneurial spirits gives birth to one of the greatest American success stories of all time. Hancock’s direction also makes the film a pleasure to watch and Michael Keaton is superb as Kroc.

But around the halfway point, The Founder gets preachy. Kroc’s commercial zeal sees him neglect his wife, alienate his friends and mortgage his house. But despite McDonalds’ runaway success, the paltry franchise fees are barely enough for him to break even.

Kroc’s luck changes when he meets Harry Sonneborn, an underhanded financial Svengali. With hushed tones in Kroc’s darkened office, Sonneborn convinces Kroc that he would make far more money if he owned the land on which McDonald’s restaurants were built and leased it back to the franchisee. Kroc is sold on what sounds an awful lot like modern-day serfdom and proceeds to buy up the land under every McDonald’s restaurant, including the original San Bernardino location.

When the McDonald brothers get wind that Kroc is their new landlord, their business relationship irreparably sours. Tensions had already been building: The McDonalds are suspicious of Kroc’s manic expansion of the franchise and unimpressed with his cost-cutting ideas, like using powdered milkshakes instead of ‘the real thing’. ‘This crass commercialism is not what McDonald’s is about,’ Dick McDonald pleads at one point, in an apparently bitter irony.

In the end, Mac and Dick have no choice but to let Kroc buy them out. They watch tearfully as the McDonald’s name – now a trademark owned by Kroc’s corporation – is removed from their restaurant. Apparently, the sum of $2.7 million they received is cold comfort (roughly $22 million US in today’s terms, probably the most expensive purchase of a single burger stand in American history).

The film ends in 1970 at Kroc’s Beverly Hills mansion, with Kroc practicing lines for a speech accepting an honour to be conferred on him by Governor Reagan (of course). When part of the speech alludes to him as the founder of McDonald’s, a flash of conscience crosses Kroc’s face (he stole it, after all), but it doesn’t last. Kroc smiles and staggers off like a demented villain.

Ray Kroc was, no doubt, a shrewd businessman who drove a hard bargain, but there is no evidence that he was the kind of unhinged sociopath Hancock portrays in The Founder. Kroc is driven to madness by his success, taking exquisite pleasure in steamrollering the McDonald brothers. ‘I’m national, you’re f—ing local’, he says to a distressed Dick, threatening to drown the brothers in legal fees if they try to wrest back their brand.

What should have been quite a ‘feel good’ – if complex – story becomes a tired meditation on corporate greed versus ‘the little guy’. Kroc himself is the biggest casualty: We sympathise with the earnest salesman at the beginning of the film and hate the heartless tycoon at the end. Capitalism is all well and good, until you actually end up with some capital.

Naturally, the film is mostly silent on the thousands of mom-and-pop franchisees for whom McDonald’s delivered a piece of the American dream, or the millions of jobs created, or the sizeable charitable foundations founded by Kroc during his lifetime.

It’s a wonder that the audience is spared the usual catalogue of grievances with McDonald’s: the obesity ‘epidemic’, preying on children, cultural imperialism and sundry environmental infractions. Maybe Hancock is saving all that for the sequel.

Gideon Rozner is a research fellow at the Institute of Public Affairs.

Climate Change: The Facts 2017

The Weekend Australian includes an article that begins:

“Iconic, ailing Australian satirist Clive James has penned a savage essay on climate change alarmism, controversially cooking everyone from Barack Obama to Kevin Rudd to Tim Flannery to Al Gore to Donald Trump in the boiled and rising ocean of his wit…”

The essay in The Inquirer section of the same newspaper is an extract from chapter 22 of the book I have been working on for many months now.

Contributors to Climate Change: The Facts 2017 do not conform to a unitary view.   As I explain in the book’s introduction:

“An advantage of my approach in the compiling of the chapters for this book – an approach where there has been no real attempt to put everything into neat boxes – is that there are many surprises. I am referring to the snippets of apparently anomalous information scattered through the chapters. These can, hopefully, one day, be reconciled. As this occurs, we may begin to see the emergence of a coherent theory of climate – where output from computer-simulation models bears some resemblance to real-world measurements that have not first been ‘homogenised’.

“There are many chapters in this book about ‘homogenisation’ (chapters 5, 6, 7, 8 and 9 by Anthony Watts, Tony Heller, Dr Tom Quirk, Jo Nova and me, respectively). Homogenisation, in essence, involves the remodelling of data, and is now a technique integral to the development of key official national and global measures of climate variability and change – including those endorsed by the IPCC.

It is generally stated that without homogenisation temperature series are unintelligible. But Dr Jaco Vlok from the University of Tasmania and I dispute this – clearly showing that there exists a very high degree of synchrony in all the maximum temperature series from the State of Victoria, Australia – beginning in January 1856 and ending in December 2016 (chapter 10). The individual temperature series move in unison suggesting they are an accurate recording of climate variability and change. But there is no long-term warming trend. There are, however, cycles of warming and cooling, with the warmest periods corresponding with times of drought.

Indeed, some climate sceptics consider the homogenisation technique used in the development of the official temperature trends to be intrinsically unscientific. They consider homogenisation a technique designed to generate output consistent with the computer-simulation models, which, in turn, are integral to the belief that there are consistent year-on-year temperature increases – contrary to the actual measurements. Temperature series that are a product of homogenisation could be considered ‘alternative facts’ – although, ironically, this is a term newly minted by those who generally agree with these self-same homogenised (remodelled) temperature constructs.”

Climate Change: The Facts 2017 is available for pre-order http://thefacts2017.ipa.org.au

Media enquiries should be directed to the IPA’s Media and Communications Manager, Evan Mulholland on 0405 140 780 or [email protected]