I am ambivalent about recently-axed SIHIP head, Jim Davidson.
His history shows that he can be sweepingly arrogant, convinced of his own intellectual superiority, and able to enjoy the very sourest of grapes. When he lost to my former employer, David Tollner, in the 2004 Federal Election, he remarked that he’d lost because soldiers voted for Dave Tollner so they could go to Iraq and earn danger pay. He’d called them, in so many words, mercenaries. Unsurprisingly he was not invited back for the 2007 election.
Today Davidson was out sinking the boot into various persons related to the SIHIP program, including the shiny-bums sent to look his shoulder by Jenny Macklin. Just another example of his propensity to lash out when things don’t go his way.
But, as I said, I am ambivalent about Mr Davidson. Putting his personality to one side, let’s focus on what he did. In my opinion, Jim Davidson got the sack for behaving ethically.
Davidson is an engineer by training and experience. Engineers, like medicos and legal eagles, hold themselves to a strict, high standard of ethical integrity.
Amongst other things, engineers are required to tell their employers the truth, no matter how unpalatable that truth might be. When Davidson saw Alison Anderson and told her that SIHIP would only be able to build perhaps 300-400 buildings, instead of 700, he was doing the ethical thing: telling the truth to his employer.
It was, of course, not a truth that was politically acceptable. It was a truth that NT Chief Minister Paul Henderson did everything in his power to discredit. Davidson had done the one thing that the foolish leader cannot forgive: he told the truth, despite the fact that his masters did not want to hear it or have it heard.
I find Davidson’s conduct as a professional engineer was ethically correct. I find Henderson’s punishment of that ethical correctness to be contemptible, low and self-serving.
I wish Jim Davidson further success in his career. We who are engineers, or in professions aspiring to that august title, could learn from his example.
Additional: There’s some confusion amongst non-NT readers about the order of events. Dave’s remarks give a good summary; I’ve also posted a comment below with a potted summary.
Additional remarks from Dave Bath below the fold.
- A briefing he gave to the former Indigenous Policy Minister, Alison Anderson, was the beginning of a controversy that eventually led to her resigning from the Labor Party.
- Ms Anderson said she had been told that up to 70 per cent of SIHIP funding would go towards indirect costs, such as administration and contractors’ fees.
- The company Mr Davidson works for, Parsons Brinkerhoff, has confirmed it is in negotiations with both governments about its future with the program.
- Mr Henderson says the matter has nothing to do with the Government.
OK, so therefore a few more questions….
- Did Davidson only brief the Minister, and not unauthorized persons?
It seems he didn’t do anything wrong.- Is Chief Minister Henderson in contempt of parliament for a lie (“nothing to do with the Government” – because heading up a government-branded program such as SIHIP is probably not something that should be at the pleasure of one of the subcontractors), or was he splitting split hairs?
- If it isn’t a matter for government who heads a branded initiative for a hundreds-of-millions dollars government funding (at least two-thirds of a billion, probably going up to a billion by the time the program is “finished” in 2013 excluding late delivery), then WTF is going on? Derogation of duty by the political lords I’d say – and I’d be interested to now what the cutoff in hundreds-of-millions is between whether it is or isn’t a matter of government business.
- At the very least, Davidson should probably have attempted to put this in a project or program risk register. It would be interesting to know if the Financial Management Act requires this. If he was prevented from putting it in a register then who prevented him, given he headed SIHIP? Who manages the risk register for SIHIP?
This is the tender for indigenous housing, including a statement of confidentiality clauses.
So… from what I can see public service rules may apply – and I cannot see anything to indicate Davidson broke those rules. If his advice was competent and only to the Minister and authorized persons, this indicates compliance with both professional and public service ethics and regulations. Even if there is no ombuds in the NT, the federal branding might indicate a federal ombuds or the public service commission might be available to him (unless expressely ruled out in any agreement between Davidson and governments – which should make one very suspicious about those who drew up any agreement).
It makes one wonder what else is going on with government programs.
“HowRudd” is no joke anymore.
ACLP in the NT context, maybe.
I don’t know what the whole story is here, but in general I would strongly agree that it is very important for engineers – and, frankly, anyone else – to make bad news known to one’s employers/superiors in a prompt and honest manner.
Furthermore, it is the responsibility of managers to not shoot the messenger when they fess up.
As a PhD student, the one thing that my supervisor demanded was that if we became aware our work contained an error, we needed to fess up to it immediately, even if it was a major disappointment or nuisance. It’s the first thing I explained to mine.
Part of the problem is that our political culture doesn’t deal well with the inevitable fact that stuffups happen even with the most talented and diligent leadership.
A brief order of events:
2007: SIHIP program is established to build 750 houses in NT indigenous communities. It is funded with ~650 million dollars and will run for 5 years.
July 2009: In a briefing with NT Indigenous Affairs minister Alison Anderson, SIHIP head Jim Davidson explains that the program will probably only build 300 or so houses, not 750; and that nearly 70% of expenses would be consumed by items not directly related to construction — administration, consultants, travel expenses etc.
Davidson’s briefing causes Anderson to quit the ALP, causing a political crisis which leaves ALP clinging to power with the help of independent Gerry Wood.
August 2009: Jim Davidson sacked.
Interestingly, neither Hendo, Housing Minister Rob Knight nor federal Aboriginal Affairs Minister Jenny Macklin have denied Davidson’s explicit statements this morning that the SIHIP programme in its present form with its present funding would allow the construction of only 300 houses (not 750), nor Davidson’s suggestion that it would cost another $300 million or so on top of the committed $762 million to actually meet the commitment to 750 houses. All the politicians simply ignored those points when asked about them and just kept repeating that they WOULD build 750 houses. That leads to the irresistible inference that what Davidson said is the truth.
Moreover, 300 houses also leads irresistibly to the inference that Alison Anderson’s claim that Davidson told her the admin component was around 70% is probably correct too, even though Davidson now denies that publicly. It depends on what cost components you categorise as “administration” and what components you categorise as part of the actual capital housing cost. If you work on the NT government’s current claimed admin component of 11.4% and accept Davidson’s figure of 300 houses in total on extrapolation of current costings (which no-one has denied is correct), you end up with a cost per house of around $2.2 million!!!
The more likely explanation is that very large amounts of money are currently being absorbed by endless consultations with indigenous people about what sorts of houses they actually want (lots of different sorts, meaning no economies of scale and therefore very high costs*) and lots of consultancies about how to maximise indigenous employment in the construction programme. Given that the vast majority of potential indigenous employees have no skills whatever, are functionally illiterate and innumerate, barely speak English and in many cases have chronic medical conditions like major deafness etc, the challenges involved in generating significant employment in the short term are huge and probably insurmountable (even if significant numbers would actually WANT a job, a highly dubious assumption in itself).
On the other hand, several recent Productivity Commission reports have highlighted the fact that successful programmes for indigenous people generally involve high levels of consultation, “partnership” and a sense of ownership. Externally imposed programmes rarely work and waste large amounts of money. However, whether that applies to a basic item like adequate housing, as opposed to ongoing programmes that can only work with a sense of ownership and real involvement, may be questionable. Most of the other appalling facts about indgenous communities (child abuse, low school attendance, extreme violence, alcoholism, appalling hygiene and nutrition and therefore disease etc) are directly related to dreadful and overcrowded housing, and can only be mitigated if that is addressed. One can mount a reasonable argument that the most important thing is to build as many appropriately designed houses as possible in the shortest possible time for the least amount of money, and:
At present the federal government is making housing and other community funding contingent on communities agreeing to 40 year head leases, but is being forced to proceed through a protracted negotiation process and only then move to compulsory acquisition under the Emergency Response legislation if communities refuse the deal after prolonged (and no doubt very expensive) negotiation. Even then, dissident Alice Springs town camp residents led by long-time activist Barbara Shaw obtained a Federal Court injunction a couple of weeks ago restraining Macklin from proceeding with compulsory acquisition (to allow construction to commence to mitigate the unbelievably squalid conditions in town camps over which the Tangentyere Council has happily presided for years) on the basis that the painfully protracted negotiations might nevertheless not satisfy common law “natural justice” requirements. My own view is that the Commonwealth should legislate to abolish common law natural justice in this respect so that construction can commence ASAP without being obstructed by this nonsense. This is something that only the Commonwealth can do; it is outside NT legislative powers.
In summary, I suspect that the main causes of the cost blowout which Jim Davidson’s interview confirms has occurred, are:
All these elements result from federal government requirements and to a major extent can’t be sheeted home to the NT government (as I suspect Alison Anderson well knows). Macklin appears to have tried to reconcile her latte left instincts towards consultation and unconstrained and unaccountable indigenous self-determination with the Brough/Howard gung ho imposed intervention approach. Trying to combine these fundamentally contrasting approaches was always doomed to create an expensive, unworkable dog’s breakfast of a fiasco.
The big political question now is whether and how they will manage to honour Macklin’s unequivocal renewed promises today that 750 houses WILL be built. That can only occur if either the existing commitments to consultation and maximisation of indigenous employment are drastically wound back and houses instead built as quickly and cheaply as possible (Hendo hinted at this in his Legislative Assembly speech on the “no confidence” motion, but the media missed the significance of his remarks**), or if an extra $200-300 million can somehow be found. The chances of that occurring in the current deficit situation are not good. More likely Macklin will to an extent “rob Peter to pay Paul” (as Alison Anderson mischievously suggested today) and divert housing and other funding which should properly go to other States. That option, however, is fraught with political danger and I can’t see Rudd endorsing it once State Premiers realise what she’s doing and start squealing like stuck pigs (as they certainly will). The SIHIP issue has a long way to go and has major national implications that aren’t yet appreciated by most observers.
*A recent article in The Australian quoted SIHIP building consortium Territory Alliance:
**Hendo’s actual words were:
Need I point out the absolute, gold plated, wrapped with a bow GIFT that the $2.2million/house figure is to the next One nation style populist who starts to agitate about how Aborigines are living lives of luxury on the sweat of the working family etc, etc.
Engineers tend to be familiar with the unforgiving (and downright inconsiderate, but scrupulously honest) nature of the physical world. When you see a train heading for a narrow bridge over a deep chasm, you weight up the various bits of experience you might have and make an educated guess weather it will cruise across or crash, burn and fall screaming into the river below.
In situations where you are confident that the train is NOT going to make it, one thing becomes of overriding importance… you don’t want to be on that train.
Sometimes the train may pull into a station and you can step off gracefully, nod a genial goodbye to all concerned and set up a deck chair and pour a bit of gin and tonic, slice of lemon wot. Other times maybe you get thrown off the train, come down hard with bruises and gravel rash… but you don’t want to be on that train.
Of course, the original mistake here was made when a politician promised to deliver a tangible deliverable on a tangible budget — and worse, the deliverable was such that regular people are in the habit of knowing the going price. Whoever made that decision is unfit for office and gets not one Iemma of sympathy from me.
Ken, as for your idea of “Commonwealth should legislate to abolish common law natural justice”, have you considered that just because you are having a bit of trouble negotiating with your local top-end ratbags, absolutely does not imply that the rest of Australia wants to take one further step towards Totalitarian Central Planning? How exactly will replacing one top-heavy and unworkable government system with an even bigger, more centralised and more unworkable system improve matters? Maybe just hand the entire contract to the UN and get 3 houses for the same price…
“Most of the other appalling facts about indgenous communities (child abuse, low school attendance, extreme violence, alcoholism, appalling hygiene and nutrition and therefore disease etc) are directly related to dreadful and overcrowded housing, and can only be mitigated if that is addressed.”
I’ve heard that said many times but never actually believed it. In my first trip to Vietnam in the late eighties I stayed in a house that was no bigger than a two bedroom flat but which was home to a middle-class family of 10 some years earlier. The problems you mention did not exist, nor did they exist to any great extent in the similarly small and crowded homes of neighbours as far as I could tell.
I think the cause of indigenous disadvantage is much more complicated than that, although good housing is no doubt a part of the solution.
Main problem – particularly for Ministers, is that for far to long been politically unacceptable to speak honestly, bluntly:
1. This is your land, build your houses with your money.
2. The Land Trusts own the land, they should be doing all this. These Land Trusts are corporations you are the owning shareholders, you need to take up with your Land Trust corporate bodies and Land Council advisers how you are going to raise the money…
3. IF you would like to obtain assistance from the government, then here are the terms and conditions which apply to all other Australians seeking such assistance.
4. There are some areas where we may chose to provide additional monies towards cost of these housing projects if the first two are satisfied.
Resolving wider problems depends upon educating people in these communities.
Leases for schools (and related houses) were obtained when the NTG stood hard and demanded them as a condition to provide the schools.
Where people wish NOT to be involved more in the wider world, they can follow examples such as the Amish or similar.
Society still requires all children to obtain a basic education, particularly areas of literacy, numeracy and functional oral ability in the dominant language – English.