Trility MD Francois Gouws: a major player in delivering quality Australian water

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Francois Gouws knows just about everything there is to know about treating and delivering water on a large scale.

The corporate executive has decades of experience in the global water industry; working in locations in the United States, Africa and Australia, where today he is Managing Director of TRILITY, a major Australian water utility services provider. For more than 25 years, he has been working with the communities he serves, to deliver water to their residents and businesses alike.

“I’ve worked with every water technology that is available in the market through my career,” he says. In addition to managing TRILITY, Gouws is a leader in many industry groups and also serves on the Australian board of WaterAid, a charity that focuses on providing clean water and sanitation to some of the world’s poorest communities.

“I personally believe in giving back to the sector in which we serve,” he says about an ongoing involvement with many organisations in the utilities sector, including as president-elect of the Australian Water Association, the country’s premier industry association serving hundreds of corporate members.

“I’m tremendously proud to be able to contribute back to the sector and where I can, help move the sector forward,” Gouws says. “I’m very happy to be working in, not just the water sector, but also the infrastructure sector.”

TRILITY delivers an important contribution to the water infrastructure sector, he adds. “It’s the most dynamic and most incredible company I’ve had the privilege to work with,” he says. TRILITY operates throughout Australia and New Zealand, working with local government and utilities to build or manage water treatment, desalination and wastewater treatment plants, wastewater and bio solids management schemes and even irrigation networks.

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TRILITY is a truly national company with over 300 staff and more than 40 facilities they operate and maintain

TRILITY began operations in 1991 and started out as United Utilities Australia, which was a subsidiary of United Utilities UK, the largest listed water company in the United Kingdom. The company grew throughout Australia for many years and then experienced an ownership change in 2010, taking on primarily Japanese shareholders.

“That was a fundamental change,” Gouws says. “Before then we were a subsidiary of this massive international organisation. Then we became a standalone Australian company. That saw us go through a total restructure in order to be self-sustaining.”

From there, the company re-branded itself and began to plan toward a future of sustainable growth in the water sector. After 12 years working with leading international water companies on major projects across the globe, Gouws decided to move to Australia where he first worked in Sydney prior to joining United Utilities Australia. His international experience, which included ownership changes, saw Gouws promoted to Managing Director at TRILITY during transition to a new parent company. Today, he is the only Australian on TRILITY Group’s Board of Directors.

“We’ve got a diverse business and we’ve structured the TRILITY Group into business units,” he says. “Every business unit and the group as a whole has a number of clients.” These consist of large, publicly-owned utility companies such as Melbourne Water and Sydney Water, as well as local government entities. “Pretty much every large water utility or council-owned utility is a client in some form,” he adds.

Operating across Australia, TRILITY is a truly national company with the majority of its contracts involving rural clients. “That’s one of our strengths that we excel in—remote and rural operations,” Gouws explains. “It sees us get contracts from government, either through councils or state utilities, and these contracts range from 5 to 35 years. We then get the right [to] set up the finance for the infrastructure, construct the infrastructure and then operate it for the term.”

Though Australia has a federal government, water management is a local concern and therefore the responsibility of the state governments. Because of this, TRILITY has been strategically positioned as a diversified company with operations spread throughout the Australian states and New Zealand. It has over 300 staff in four main offices, five secondary offices, and over 40 facilities to operate and maintain and another 800 service sites. Gouws says the TRILITY team is also very agile.

“Wherever the need is, we can move people around,” he says. “We have people in every state. We deliberately run a dispersed management team—a dispersed business—in order to have relationships and to position ourselves in every state.”

This allows staff to analyse the local situation carefully and to decide which opportunities are worth pursuing. After that, a unit will typically begin gathering resources for a project. “We line up the correct technology to provide the optimum solution for what’s required,” he says. “[It’s] important to note that it’s not just a technical solution that we offer; we offer the entire whole-of-life solution. Over a 35-year period, requirements can change, supply agreements can change, industrial relations can change and the right culture is required to manage these changes seamlessly.”

Gouws says one of TRILITY’s key strengths is its ability to provide long-term solutions over the decades-long projects, not just the initial installation of the infrastructure. The company’s focus is on the science of water management and looking ahead to when equipment will need to be upgraded and replaced. “That’s how we manage to deliver optimum service over a long period in a cost-effective manner. Obviously, we do carry public and environmental health in the services we do, so [they’re] responsibilities [that] we take extremely seriously.” Thanks to this efficient approach, the company generates annual revenues of approximately $AUD150 million.

TRILITY’s workforce is broken down into four main business units, each with its own unique function that contributes to the overall Group.

First, there is Operations and Maintenance, which comprises employees operating and maintaining plants. “[We have a] dedicated and very capable team, operating our plants 24/7,” Gouws says of this business unit.

The next group is the Asset Ownership, which is responsible for the financial and administrative aspects of the business. “Wherever we have ownership of assets, we administrate that separately,” he adds.

Then there’s Design and Construction, comprising of a team of highly skilled engineers, construction and project managers that handle upgrading and construction of infrastructure at all of TRILITY’s facilities.

Finally, there is Hydramet which falls under Services. “Hydramet was one of our first strategic acquisitions after we identified a gap in the Group; so we brought in a company that specialises in disinfection solutions.” Hydramet maintains 800 of these disinfection facilities across Australia and many of them in very remote locations. The four business units together with the crucial support of TRILITY’s corporate and administrative services operate as one, making for a well-balanced and integrated approach in servicing the sector.

The most important thing about the businesses TRILITY runs is that they are complimentary and work well with each other to help TRILITY’s steady expansion. “We’re at our best when we can combine our business units,” Gouws says.

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TRILITY operates throughout Australia and New Zealand, working with local government and utilities to build or manage water services

This is TRILITY’s winning strategy in a very complex sector. Every state has a different way of managing its own water resources, so the company must be diverse, agile and adaptable to accommodate a variety of different scenarios.

“It’s also a long-term sector,” Gouws says. “Aging assets; many of the networks, especially the underground systems, were constructed in the 1950s and 1960s.” He adds that this makes the water sector a rewarding yet challenging sector to work in.

In addition, “it requires massive capital investment, that then […] doesn’t see an immediate payback, and that’s a challenge that the sector constantly faces.” The water sector is further cyclical and largely influenced by drought patterns.

“When there’s a crisis you try to catch up with infrastructure, then by the time construction is finished, the drought in some cases may have passed.” Gouws goes on to explain that this cyclical nature of the sector also plays out heavily when it comes to its skilled manpower. The sector like so many others routinely expands and contracts, and during a period of contraction, it’s difficult to maintain the resources of highly seasoned professionals. We are always seeking new ways to better manage this transition so as to ensure sector knowledge is retained. However, looking towards the future, there is still much work to be done. Two of TRILITY’s target projects include refurbishing and upgrading old equipment, as well as finding new strategies for the reuse of water for agricultural and other purposes.

Australia is in fact a growing market for recycled water. “We supply several intensive farming operations across both Australia and New Zealand with specifically reused water, and we see that together with the upgrading of aging facilities as a major driver going forward,” Gouws says.
This devotion to long-term operation and maintenance isn’t the only thing that makes TRILITY a trusted company. The business has many “unique selling points.” Chief among them is their strong focus on developing staff.

“We invest heavily in our people and in developing our people,” Gouws says. “When it comes to delivering services to customers, it’s the people that matter.” Because TRILITY operates in a sector where so many technical problems can arise at inopportune times, having a team of dedicated employees who are very passionate about what they do is an invaluable asset according to Francois. It’s that positive culture and environment that truly fuels the company.

Another unique selling point is TRILITY’s commitment to technical excellence. “[We have] a culture of continuous improvement,” he says. It’s a company that is quick to analyse new ideas brought forward by its employees and implement them as soon as possible. Further, this idea of constant, never-ending improvement permeates across the entire business. TRILITY is a diverse company, which greatly benefits clients because the organisation as a whole can handle nearly every aspect of a given project and maintain what they have built over the long-term using innovative methods.

As a large company, TRILITY has been involved in many such projects, but a few of them are notable in that they illustrate the company’s ability to innovate in diverse situations. For instance, TRILITY is responsible for the “impressive treatment plant” outside of Perth that services the scheme delivering water to Kalgoorlie. It is the first privately-owned water treatment plant in Western Australia. TRILITY and its partners received numerous awards for an innovative approach. The project required over $300 million in initial investment with a contract to manage the operation for 35 years.

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Another example, at the very northern tip of Australia, is a facility in Bamaga. Though TRILITY did not build the facility, the company staffed it with local and committed people to run the plant. “They are extremely dedicated employees and incredibly skilled at operating a plant in such a remote location.” The area is so remote that during the rainy season it can take days for trucks to get to the plant. However, as Gouws proudly asserts, rural areas are TRILITY’s bread and butter, and they excel at serving these kinds of locations.

TRILITY also has a large contract in the Macarthur region with Sydney Water. Also a privately owned plant on a 35-year management contract, the facility handles very large volumes of water before it is distributed by Sydney Water to its customers.

Over in Victoria, TRILITY has a bio solids facility that serves as a prime example of sustainability within the water sector. It turns waste into bio solids that then are reused as fertiliser. “We truly believe that’s the way of the future,” Gouws says.

Aside from the examples above, TRILITY runs dozens of plants in rural and remote areas. “Once we install those plants, the communities have immediate benefit—from drinking river water, to drinking world-class water,” he adds. “We consider ourselves part of the community, because we are there for the long term — we avidly believe in supporting the communities in which we serve by way of employing locally and giving back by supporting various local community activities and events”.

Getting to this point is not easy. There are many challenges that the utilities sector faces, which is why there is such a high barrier to entry and thus requires a solid and proven track record.

“You can imagine [that] to come up with a solution of what it’s going to cost to treat water over 35 years means you have got to completely design and completely negotiate a contract in order to get to the final dollar treatment cost,” he says. Even just the planning aspect can be costly, especially since it must be projected well into the future and take in to account inflation and other factors. Attempting to predict when equipment will eventually fail and need to be replaced is also a huge challenge. Anticipating how the sector might change requires a lot of experience and expertise.

However, when it comes to change TRILITY is no stranger to constant evolution, according to Gouws. “[TRILITY Group’s] shareholders will change within the next year, and that is something [that is] a big focus for us as a management team, to ensure the same level of service continues to be delivered. We have long-term obligations to clients, and [there will be] no interruption to that during ownership change.”

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Written by Raul Betancourt.

SNC-Lavalin’s (TSX:SNC) Mark Hughes: using cooperation and collaboration to achieve growth

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Mark Hughes firmly believes that the foundation of any successful company is focusing on developing excellent relationships that embrace clients, competitor-collaborators and employees.

“Only an organization that is truly aware and focused on the importance of those personal relationships and has a plan to continuously improve them can really hope to succeed,” Mr Hughes says.

Over the last few years Mark has tried to ensure that the company’s recruitment and development of staff positively promotes the importance of the soft skills, as well as ensuring it continues to deliver high quality service and advice on a technical nature. Even in the midst of the highly technical and pressurized project environments, the human element cannot be ignored.

“At SNC-Lavalin,” Mr Hughes adds, “whilst we are a world leading engineering and construction company, we are ever-more so a relationship-oriented business, not a transactional one, and we want clients to want to do business with us, and people to choose to work for us rather than competitors. As such we’ve been spending time investing in both.”

In Australia, the company is building on its ethos of a One-Company approach. For an organization globally of 40,000 people, and several thousand people in Australia working across all four of its key sectors, Oil and Gas, Infrastructure, Mining and Metals and Power, Mark is very clear that SNC-Lavalin’s business model across all sectors is firmly to deliver excellence in engineering and construction, safely and through the power of relationships.

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“We are in a highly competitive market place,” he says. “It requires us to focus on our clients, collaborators, staff, and our future staff – we want to be the obvious choice for people at all stages of their careers and across all our market sectors.”

Leadership Capability
Originally from the UK and a graduate of British Railways, where he held a variety of posts within both the passenger and freight sectors, Hughes found himself in the consultancy environment for over a decade with Interfleet Technology. It was during this time in 2011 that SNC-Lavalin acquired Interfleet.

As well as leading the London business for 6 years, Mr Hughes’ consulting experience involved significant periods working for the major transport groups during intense periods of franchise bidding, latterly and most interestingly as MTR Corporation’s Bid Director for the Crossrail Franchise.

The combination of a strong rail operations, commercial understanding and leadership capability proved to be the right blend of skills for SNC-Lavalin to move Hughes to the Australian arm of SNC-Lavalin, where he is currently the Regional Director of their Infrastructure sector, heading up their Rail & Transit and Environment and Geoscience teams.

A real testament to SNC-Lavalin’s approach to relationships and collaboration is its recently awarded contract on behalf of the Commonwealth Government as the consortium lead for the rail design element of the Western Sydney Airport.

Mr Hughes says: “Whilst we were shortlisted for tender by the Department of Infrastructure & Regional Development (DIRD), we realized that we could offer a much stronger offering through collaboration with our industry peers, so we set about bringing a consortium together very quickly, developing our bid as a team, presenting as a team and ultimately succeeding as a team.

“Having the relationships already developed to be able to bring such a consortium together was in itself a fantastic achievement. Having won, SNC-Lavalin’s strength in programme and stakeholder management, systems engineering and future operations understanding made our role at the core of the project team an excellent fit as the overall integrator.”

Elsewhere under Mr Hughes, another Joint Venture is nearing its completion in Malaysia, where SNC-Lavalin have a team of 15 personnel performing the role of rail systems Independent Checking Engineers on the recently opened (Phase 1) Klang Valley line, with Phase 2 due for completion in July this year.

The Klang Valley project started in 2011, and in pursuing the company strategy for this role it had to understand the market and the need to identify and be able to work with a local partner that brought the civil capability as a complement to its systems capability. Mr Hughes emphasizes the need to understand the culture of the environment where the company is working.

“You need to be local, [but should also recognize] the strengths that you bring; in our case, [we bring] systems and integration strengths, and our partner [brings] civil design and construction strengths.”

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Through collaboration with peers and JV opportunities, SNC-Lavalin is engaged in a number of projects including Malaysia and domestically as the consortium lead for the rail design element of the Western Sydney Airport

On many occasions the partnerships are not so much about technical problems themselves, but about having a local resource and good relationships that can help to really interpret the client’s concerns. However, Hughes also recognizes the volatility of these markets, and stresses that responding to changes in the industry and moving the focus to the expanding sectors is of paramount importance.

“Right now, Infrastructure in the transport domain is described by many as in a boom time. Certainly in certain states in Australia they have a number of significant and exciting projects to point to, whether new metros, tunnels, level crossing removal, light rail schemes or freight enhancement schemes.

“SNC-Lavalin is delighted to have been involved or still involved across all these important schemes. However, it will at some point not be quite so buoyant in terms of growth and investment, and it’s my job and the job of others in my team to identify other aspects of the infrastructure marketplace that we could respond to, or indeed other sectors that SNC-Lavalin operates in where our skills can be deployed.”

Being responsible for around 100 staff in the Infrastructure business, and a further thousand or so indirectly across the other business sectors, Mr Hughes takes the responsibility of keeping SNC-Lavalin running a sustainable business model very seriously, even personally.

“You have to be looking to the future and how you can sustain the employment of those people as well as grow the business,” he says. “You have to look to the future, and I mean years not just 12 months, and navigate a path that you can describe to your staff and your business about where you will be in that future. If you can’t do that with a level of confidence, then you can’t expect your team to believe in you or your company.”

Of course that is easier said than done. Complications arise through the booms and busts of both state and the national economy that impact the industry, and especially the government politics involved. Part of Mr Hughes’ job is to try and predict these cycles and brace the business for them, but in the long run, change is the only answer.

“You have to be able to accept that eventually, either what you provide to the market will need to change, or the spending in that sector of the market will change and you have to adapt.”

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In practical terms, this means that SNC-Lavalin will always have to be looking throughout their businesses for re-deployable skills that they can apply across the sectors as the landscape of the market changes. It is SNC-Lavalin’s diverse business model that allows this “recycling” of talent and expertise.

“In power, for example, we have the diversity and capability to move from nuclear on one end of the spectrum, to renewable on the other,” Mr Hughes says.

Recycling competences such as electrical or systems engineering, telecommunications, asset management and programme management between different sectors are also part and parcel of the business strategy.

This resourcefulness allows the company to run a robust and stable business even as the winds change in multiple industries. “Here in Australia, we are lucky to have all four sectors in operation, with each at varying stages of maturity and economic optimism.”

Roughly 10% of SNC’s operations are in Australia, including major oil and gas operations such as the Ichthys LNG project and Gorgon project in Western Australia, one of the world’s largest natural gas operations. Whilst the company’s Oil and Gas team is still very significant in terms of financial and operational scale, there is no denying that future work will be less about construction and more about operations and maintenance as the industry moves from a CAPEX phase into an OPEX phase.

However, the skills held within the Oil and Gas team are immense, the extensive construction expertise within this team can be deployed across any of our other three sectors. Likewise, the company’s telecommunications and security team can service across all four sectors ensuring clients receive the best solutions.

This ability for one or more sectors of the company to work synergistically to better serve the customer and make operations more efficient, especially in the fast-changing power and infrastructure industries, adds to SNC’s strength and service offering.

Currently, a large focus of the company’s efforts is on winning renewable energy projects and bringing both its expertise and capital investment into that sector. “Power and Infrastructure are growing markets for us,” Mr Hughes says.

Client-centric Approach
Collaboration and the recognition that SNC-Lavalin can use the talents of a diverse range of companies comes in the form of new acquisitions as well. Four years ago the company acquired Kentz, a construction and engineering company that operates mostly in the oil and gas sector.

“[Kentz] is extraordinarily dynamic in the way that it’s done business and innovated, and [it] has very strong leadership.” This acquisition served to reaffirm SNC-Lavalin’s commitment to oil and gas, in spite of a currently difficult market and low oil prices.

Besides this spirit of cooperation, one of the things that SNC-Lavalin strives for is to be, in Mr Hughes’ words, “client-centric.” According to Mr Hughes: “We absolutely understand that you only get repeat business by doing a fantastic job and not just a good job.”

This means that SNC-Lavalin spends a lot of time and effort drawing feedback from its customers and constantly improving based on their suggestions. “We ask for regular feedback from our clients on how we did, and we don’t just take it and say, ‘thank you very much.’ The company looks at the data and analyzes it deeply in order to incorporate what they learned into future projects.”

Hughes maintains that this is integral to acquiring repeat business, and that repeat business is integral to a company’s livelihood in its industry. “Repeat business is a lot easier to win than competing through a bidding competition all the time.”

He accepts, however, that constantly bidding for projects is a normal feature of acquiring clients in the public sector, which is why the business has invested significantly in professionalizing its bid team capability in the region.

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SNC-Lavalin’s recent acquisition of Kentz demonstrates the continued growth of the business through their key sectors of Oil & Gas, Infrastructure, Mining & Metals, and Power

Another one of SNC-Lavalin’s primary concerns, especially in Australia, within Infrastructure due to the nature of the business, is having a highly engaged workforce in order to ensure it retains its large and talented team. Recruiting and keeping staff is a major part of the business’ focus, because attrition can not only have direct costs but can also negatively affect the staff that are left, as well as lead to inefficiency.

“Losing staff to clients is often more of a challenge than to competitors”, Mr Hughes says. “In the consulting world, as any other, this is a well-known, well-trodden problem. You put staff amongst your clients, and you want to put your best staff prominently, and every now and again either the client sees something which they want to keep for themselves, or the individual sees that that’s an organization they want to work with.”

Often, these consultants will leave for a time, only to return to SNC-Lavalin eventually. “We’re a good place to work—we want to be an excellent place to work—and we invest in our staff feedback to understand that. It is a constant battle of being able to offer the right level of reward and the right environment and interesting work.”

One of SNC-Lavalin’s greatest development benefits to its employees is allowing them the ability to work internationally, since the company has a presence in many countries. This benefits both parties, as it allows the company to send talent to where it is needed most, anywhere in the world, where it cannot find the required skills and experience available in the local market.

Infrastructure
Though SNC-Lavalin’s Infrastructure Australian market is still relatively small in comparison to the size of its North American business, it is a growing presence, and also an important one. In spite of its size, Mr Hughes describes the market here as “mature.”

He remarks that in terms of landscape, population density, and other concerns, Australia and Canada have a lot in common, but that SNC-Lavalin has simply not had a very long presence in Australia compared to its century-old business in Canada. “We don’t want to wait a hundred years to reach the same size and scale of course” he says.

One of the factors that affects growth in the rail Infrastructure sector in Australia is the different engineering and safety standards in railways across the different states. Rail gauges differ as well as local safety and regulation requirements, not to mention the political environment and available funding.

“All states will vary, and as a result of that, it makes [planning and business forecasting] complex. It makes it complex not just for running trains, but it makes it complex for procurement of trains.” Mr Hughes suspects that these differences will continue to produce challenges well after his lifetime.

“It makes Australia a smaller market than it could be,” he says, “because many of these individual issues effectively fragment the market. That’s just not great when you are trying to attract international commitment and investment.”

SNC-Lavalin does not shy away from these challenges, however, as Mr Hughes maintains that engineering and strategic infrastructure solutions is what his company does best. “Increasingly, the recognition in our company is that complex environments as well as complex engineering and systems engineering is where we bring a lot of expertise. That’s the difficult stuff.”

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One of SNC-Lavalin’s recent concerns has been integrating this infrastructure sector of their business into the other units, to help serve as part of the backbone.

“The Presidents of each of the four sectors are targeting working together in a more holistic and joined up way. Cross-selling is one thing, but Cross-delivery is the real focus – back again to sharing skills and competencies in a planned and strategic way.”

This integration may be important as the company turns towards new market demands for “big data.” As technology improves, the raw amounts of information that must be understood are overwhelming clients, and this has become an important service that consulting companies could provide.

“Our ability to work with clients to enhance their businesses is very much driven by a race to[wards] who can understand and provide more insight into the information that our clients perhaps don’t necessarily have time to sift and understand themselves.”

While there’s a “backdrop” of engineering, being able to improve system performance through data collection and understanding is a major factor. Many organizations, especially those in transport, are only starting to grapple with these challenges—and SNC-Lavalin, Mr Hughes says, is making progress, but needs to do better.

With this work on Infrastructure being aligned with the company’s client-centric approach, its service continues to grow and develop in line with the industry. “[It’s] a partnership of mindset, rather than a partnership of contract,” Mr Hughes emphasizes. The relationship-building aspect of their business will always be primary at SNC-Lavalin.

Written by Raul Betancourt.

The Canberra Quarterly Presented By Inside Canberra’s Michael Keating

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Inside Canberra’s Editor-In-Chief Michael Keating provides a summation of Canberra’s political landscape for the first quarter of 2017.

New Ministerial Arrangements

The Parliamentary Year started off early on Thursday the 19th of January when the Prime Minister decided to reshuffle the Ministry. The changes were due to the resignation of then Health Minister Sussan Ley MP on Friday the 13th of January due to using time paid for by her entitlements to buy a private property.

New arrangements saw the elevations of Greg Hunt to Minister for Health, Arthur Sinodinos as Minister for Industry, Innovation and Science and Ken Wyatt as Minister for Aged Care and Indigenous Health. The new Ministry was sworn in on Tuesday the 24th of January.

Parliament commenced at the start of February with politics dominated by the new President of the United States, Donald Trump.

Both Party leaders delivered headland speeches which sank without trace in the hot media of talk-back radio and twitter. There was some interest among the gallery in the proposal to subsidise coal red power and a passing interest in Malcolm Turnbull’s electoral donation of $1.75 million, but it was all overshadowed by President Trump.

The key to it all was the Prime Minister’s conversation with the President over the weekend confirming the US would proceed with a deal to take 1,250 refugees from Manus Island and Nauru. Mr Turnbull’s understanding was that it was a done deal, but then the White House press corps told the media that the deal was still under consideration. Only after this had generated a considerable amount of confusion did State Department officials confirm that the deal would proceed.

The Prime Minster also had a first call with the new President of the United States. “It should have been one of the most congenial calls for the new commander in chief – a conversation with the leader of Australia, one of America’s staunchest allies, at the end of a triumphant week.” At a press conference the Prime Minister refused to comment on the phone call.

The depictions of Trump’s calls are also at odds with sanitised White House accounts. The official read-out of his conversation with Turnbull, for example, said that the two had “emphasised the enduring strength and closeness of the US – Australia relationship that is critical for peace, stability, and prosperity in the Asia – Pacific region and globally”.

Corporate Tax

The big issue in Parliament in March was the government’s centrepiece policy of corporate tax reductions. The plan proposed to gradually cut the corporate tax for all companies from 30% to 25% over ten years. The first stage is a cut from 30% to 27.5% for businesses with a turnover of less than $10 million. The cuts for larger companies take place in the ensuing years. At that time the Senate was prepared to accept the cuts for companies with turnovers of less than $10 million but reject the rest of the plan. That meant that the government will have to come back year after year to seek further cuts, the implementation of which will depend on the circumstances at the time.

Labor has waged a torrid campaign against the government’s tax plan characterising it as “tax cuts for billionaires” and “$50 billion tax cuts for the big end of town” and contrasted this with spending cuts that affect low and middle income earners. Defeat of the tax cuts is critical for the opposition because it has used the $50 billion worth of cuts, which are currently contained in the budget, to fund many of the policies it intends to take to the next election, including increased spending on schools and hospitals.

Bob Day

The make-up of the Senate changed when the High Court, sitting as the Court of Disputed Returns, decided that Bob Day was ineligible to stand for election at the last ballot. The basis of the decision was that he was in a position to directly or indirectly secure a benefit from the crown because he owned a building which he transferred to a friend who then sought to negotiate a lease with the Department of Finance, the proceeds of which were to be paid to the Day family trust. Apart from Day’s electoral office the building housed the conservative Samuel Griffiths Society, the Australian Taxpayers Alliance and the Family First headquarters all of whom support low taxes and minimal government finances.

Media commentators have made much of Bob Day’s hypocrisy in trying to rip off the government: the irony is that he paid the rent for the whole time he was in the building and the Commonwealth didn’t hand over a cent. Nevertheless the High Court adopts a Caesar’s wife approach and so found Day ineligible and ordered a recount. Labor argued the Australian Electoral Commission should discount the effect of Bob Day’s party following but the Court rejected this which means that the number two on the Family First ticket will probably be elected. She is Lucy Gichuhi, a lawyer and accountant who was born in Kenya but immigrated to Australia in 1999. Unlike Bob Day whose main interest was urban development, Ms Gichuhi’s areas of concern are immigration and women’s legal services. At this stage there is no indication that she will support the government as emphatically as former Senator Day did.

Treasurer Scott Morrison has had a go at big business for not being sufficiently enthusiastic about tax cuts. He said that the community did not trust the top end of town and so the government was having a hard time selling the cuts. He added that if business continued to sit on the fence it would suffer reputational damage. Mind you when business took up the popular issue of marriage equality in an attempt to show that it has a social conscience the government stuck the boot in.

Who Will Replace Tony Nutt?

The announcement that Alexander Downer would remain in London until the end of the year put an end to the rumours that he would return to take over the leadership of the South Australian Liberals and subsequently become Premier after the March election. However another Liberal luminary, Nick Minchin who’s currently Consul General in New York, will return to Australia shortly. Since Tony Nutt announced his resignation and with the likely prospect of a damning report from Andrew Robb on the way the last federal election campaign was run, thoughts have turned to who will succeed Nutt.

The party could do worse than give Nick Minchin the job, at least until after the next federal election. Former Senator Minchin has been a successful secretary of the South Australian branch of the Liberal Party and has had the ear of a number of Liberal leaders. He has very good political instincts which the Turnbull government desperately needs at the moment. He’s from the conservative wing of the Liberal Party but is not a social conservative. Most importantly he would probably be able to work with Tony Abbott to convert him into a team player.

Of course, he won’t get the job.

Malcolm Turnbull won’t have forgotten that Nick Minchin masterminded the coup against him when he was leader of the opposition. Turnbull will want a rusted-on supporter from the moderate wing of the party to run the organization, but successful backroom operators from the moderate wing who have run successful campaigns are thin on the ground. One of those is Senator James McGrath who’s run successful campaigns in London for Boris Johnson and in Queensland for Campbell Newman.

The Here and Now

It’s been another bad run for the government. Any message it was trying to get out on economic management prior to the budget has been swamped by a nebulous debate over housing affordability and the proposal that young first home buyers should be able to access their superannuation accounts to fund the deposit. This proposition was never likely to pass the Senate and, given the public’s ambivalent response, it was a mistake to raise it.

The way the government’s handled the issue has highlighted the matters raised in the Robb report on the government’s dismal electoral performance. In that report there was a specific reference to the absence of polling during the run up to the election. On the issue of housing affordability, it defies common sense that proposals weren’t road tested before they were put into the public arena. Even worse, the policy has generated a rift in cabinet and the government at large.

We also had the unseemly argument over ‘work for the dole’ with the Minister for Employment Michaelia Cash having to assert that the programme will not be changed in the face of comments made by members of the government that the policy is a “heap of shit”.

Moreover the Prime Minister’s visit to India has turned out to be difficult. He’s canned the Abbott initiative for a free trade agreement as being too hard and has nothing else to show for a head of government mission. The discussion of opportunities in the vocational training area was no more than aspirational.

The government’s thrashing around confirms the opposition’s claims that it’s in trouble and lacks a plan for the country. It needs to take control of the agenda and to do it quickly but at the moment it seems bereft of ideas.

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