Doctor's Wives: An Apt Metaphor

Judith Brett (Opinion, 24/9) finds the term "doctors' wives" extraordinarily patronising.  Far more patronising surely is Brett's claim that women are, somehow, morally superior to men.

My understanding of "doctors' wives" is that it objectively describes a certain class of women that is, in essence, so relatively distant from, and independent of, any economic pressure or material need (rather like tenured academics) that it can afford the luxury of making economically destructive choices like supporting the Australian Greens.

It has nothing whatsoever to do with whether or not they vote "in the economic interests of their husbands".  Indeed, as an extended metaphor, it could well include men anyway.

This new, educated, wealthy elite is quite unlike the middle-class Liberal supporters of the Menzies period.  It has much in common with Brett's "pinko, inner-city latte drinkers":  time-rich, irresponsible, narcissistic and full of moral superiority.

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Inquiry into Regulatory Barriers to Regional Economic Development

Submission to the Victorian Competition & Efficiency Commission

INTRODUCTION

Our major agenda is to provide critiques of Government regulations and draw attention to the more damaging of them, to point out the costs they impose upon society as a whole and to recommend more suitable approaches.

Systematic review of regulation achieved prominence during the 1980s under the Hawke Government, which established the Business Regulation Review Unit (now called the Office of Regulation Review (ORR)).  This was in response to heightened concerns about the adverse effects that the growing body of business regulation might be having on business costs, flexibility and efficiency as well as on the achievement of social and environmental objectives.

The Commonwealth body was followed by other, state based regulation review bodies, of which the most active was Victoria's.  The expansion of duties and responsibilities of the Victorian unit into the Competition and Efficiency Commission reflects a commendable renewed determination to counter any adverse effects that business regulation might have on the State's economic performance.  Perhaps coincidentally, it comes at a time when there is a similar interest elsewhere.  Thus, the federal ALP platform heralds a Red Tape Reduction Office to replace the ORR with expanded duties.

Over recent years there has been considerable progress in freeing up the regulation of prices and access to markets in Victoria and elsewhere.  It was not so long ago in this State that there were limits on the distance that bread could be transported in order to protect local bakeries.  More recently we have seen the withering away of agricultural marketing boards, extension of shopping hours, abolition of most price restraints as well as privatisation of a great many assets formerly owned by the government (but still price controlled in gas and electricity).  Much of this was conducted under the auspices of Commonwealth grants through the National Competition process but the trends were already underway prior to the Commonwealth-State agreements on this.

In contrast to the advances in removing "economic regulation", advances that have made a major contribution to economic resurrection in Victoria and Australia more generally, "social regulation" has generally been increased and made more intrusive.  There has been no progress in reducing government market intervention in areas designed to protect the environment, to prevent consumer deception or to promote greater safety in the workplace and elsewhere.

These areas of social regulation are more pervasive than the traditional regulation of business which prevented new entrants offering to supply markets or stipulated the price at which such supplies could be offered.  While offering some advantages, they also tend to engender large costs.  Environmental regulation, in particular, has proliferated in recent years developed often in response to environmental campaigning and without a cost to benefit analysis.  It is timely to step back and consider whether the current and proposed body of regulation is necessary, whether it achieves its stated (or any useful) outcome, whether it does so at an acceptable cost to the community and whether the best regulatory approach is being pursued.

LABOUR MARKET REGULATIONS

Labor market regulations are one area of "economic regulation" that has seen only modest progress towards deregulation.  Harking back to bygone romanticised eras of class struggle, shearers' strikes and Winter Palace storming, laws and regulations have often been formulated in ways that create privilege for trade unions.  Victoria was once justly regarded as an egregious example of the loss of competitiveness that ensconcing such privilege can bring.

The labour unions in this state remain somewhat more militant than elsewhere in Australia and this lends some vulnerability to the state's development process.  Such activity depends upon government regulation in permitting specific labour unions to claim coverage of sites, thereby requiring workers on those sites to be a part of the union in question.  Demarcation disputes between different unions for coverage are a particularly poisonous development of an indulgent approach to monopolistic activity that governments would not tolerate elsewhere.

Two recent examples of destructive union activity that impact regional Victoria significantly are the disputes over Patricia Baleen and the Saizeriya complex.  Pickets at the Patricia Baleen gas-processing plant in East Gippsland, Victoria, were imposed by the unions to try and stop the use of Australian workplace agreements (AWAs) and to force company-specific enterprise agreement negotiations onto unwilling firms.

In the case of Saizeriya, the firm had decided to centralize its food manufacturing operations to a state-of-the-art, purpose built facility at Melton on the outskirts of Melbourne.  It was the most important development to date in building on the vision of turning Victoria into a value-adding, food-manufacturing hub for Asia.  If completed, the Saizeriya complex would have involved more than $350 million in investment, with eight large factories and direct employment of more than 1,200 people.  But one of the worst examples of the destructive culture of Australian unionism thwarted this.  The Government gave the National Union of Workers the enterprise agreement rights over the running of the complex.  The Australian Manufacturers Workers Union claimed they should have been given coverage, declared war, and co-opted the CFMEU to apply industrial action against Saizeriya during construction, hoping they could leverage control over the enterprise agreement and future potential membership.

The Victorian government, which had promised the Japanese smooth construction and operation phases, worsened the problem by high-level ineptness in the advice they gave the firm.  As a result the first of the planned factories was delayed by eighteen months and Saizeriya was obliged to pull out of all but that one committed plant.  The victims are the thousand and more people who are denied secure jobs opportunities, farmers who have lost millions of dollars in fresh food supply opportunities, construction workers who have seven fewer factories to build and every Australian for the loss of millions of dollars in investment, export and tax income.  The damage is compounded by the reputation we regain among overseas investors as a State unable to control destructive union activity.

What makes these cases highly relevant is that they coincide with federal ALP proposals to remove secondary-boycott provisions from the Trade Practices Act (TPA) and to place them in industrial relations legislation where they will be neutered.  The impact on economic activity would be profound.  It is always important that the law be upheld but rural Australia is especially vulnerable to regulatory measures that fail to bring unions within the purview of the law that generally prevails.

Accordingly, the Victorian Government should oppose measures that would dilute the legal obligations on unions.

REGULATORY FRAMEWORK FOR
INNOVATIVE FOOD CROP TECHNOLOGY

The use of modern genetic technology to develop better crop varieties is recognised globally as a dynamic current area of technological innovation.  The total land area sown to new genetically modified (GM) crops developed from biotechnology continues to expand globally.

Agriculture remains as a significant contributor to economic activity in Victorian economy.  Promotion of an investment climate that fosters innovation in this growing field should be a major component of both the state's economic strategy, and indeed also major component of the state's research and innovation strategy.

Nevertheless, the Victorian Government has recently introduced Legislation (Gene Technology Act 2004 [sic]) this year that has banned the commercialisation of two new GM canola varieties.  These GM varieties had previously passed stringent Federal government regulatory requirements to assure they pose no risks to the environment or to human health.

The Victorian act has also made it impossible for oilseed growers to carry out demonstration farm trials to establish their ability to effectively segregate GM produce from surrounding farms and other crops and, for example demonstrate whether adventitious presence of GM canola in dairy pastures can be avoided.

These prohibitions and the long time lags in plant variety improvement mean that genetic technology used already for ten years by Victoria's international trade competitors including in Canada and Argentina are denied Victorian farmers.  As a result of this legislation and of the political risks posed towards plant biotechnology, innovative plant breeding research groups in rural Victoria have now been disbanded.  General concerns about the effects of this legislation on the state's agricultural biotechnology sector have been well articulated by the Ausbiotech Industry Association.

A detailed enquiry into the punitive effects of the Victorian gene technology legislation on crop variety innovation in Victoria is well within the scope of the commission's brief.

The actual outcomes of the Victorian Gene Technology Act would seem to be in direct conflict with the economic policy position paper Victoria:  Leading the way.  The Gene Technology act does not "Make Victoria a location of choice for agricultural biotechnology businesses", it does not "Foster innovation", neither does it "Maximise sustainable returns" or "Create best practice by cutting red-tape and reducing costs" which are the stated priorities of the position paper.

Also, as a separate issue, the current Victorian Government biotechnology strategy does little to address the difficulties now faced by organisations seeking to bring new plant varieties, developed using modern genetics, through to the market and instead of leadership only voices caution.

There are several areas of substantial ongoing research which the Commission could profitably investigate concerning the impacts of the Victorian genetic technology regulation on future economic competitiveness.  For example, the Victorian Government itself has commissioned two substantial economic studies (ACIL, Lloyd Reports) which conclude that marketing issues are not an impediment to deploying new plant genetic technology in this state.

Although safety concerns are repeatedly raised by environmental activists, scientific studies including a recent report from the United States National Academy of Science continue to confirm the objective safety of the new food products and the validity of decisions by the Federal Office of the Gene Technology Regulator.  The Australian cotton industry provides a case study documenting the very real contribution of GM technology to sustainability.

Finally, the commission could well investigate changes in policy stance that are occurring in overseas markets for our export produce, such as the recent approval by the European Commission of genetically modified maize for farming in the European Community.

REGULATORY "TAKINGS" IN WATER

Agriculture in the Murray Darling Basin is generally dependent on irrigation.  The area contributes some 40 per cent to Australian agriculture and very much more than that to Victorian agriculture.

Rural Victoria has prospered over recent times as a result of irrigated agriculture founded on well understood property rights to water.  It is notable that agriculture in this state features a far greater share of high value perennial crops than is the case in NSW.  Many have attributed this to the highly secure property rights to water that are perceived to exist in Victoria and which have been less clear in NSW.

Regulatory takings of water in pursuit of ill-founded but oft-repeated claims that water is needed to remedy environmental degradation are likely to have significantly impact economically on rural Australia while delivering little if any environmental benefit.  According to the Centre for International Economics, the cost of current plans to take 500 gigalitres (about 7 per cent of allocations) from the Murray irrigators is $72 million per year.  The federal ALP would triple this at a cost of $316 million per year (the Greens would take 3000 gigalitres for starters, at a cost of $800 million per year).

Such measures would clearly detract form the ability of the agricultural sector to survive let alone flourish.  There is strong evidence to show that the Murray Darling system is not under the sort of stress portrayed by green groups and accepted by many in urban Australia.  Together with ecologist Dr Lee Benson, we have carefully sifted through the evidence for degradation and found it seriously lacking.  A Commonwealth Parliamentary Committee that has comprehensively examined the matter issued a bipartisan report, expressing severe reservations about the validity of the science on which proposals to take water for environmental initiatives were being made.

Farmers need to have confidence about fair play with future decisions.  Irrespective of the merits of the water allocation decisions and water rights acquisitions that have taken place over the past century or more, the status quo of de facto rights needs to be the starting point of any reformed system.

Broadly speaking, the Intergovernmental Agreement on a National Water Initiative offers benefits in requiring that governments offer full and fair compensation if they wish to take more water for environmental, indigenous or other uses.  Rights holders would lose water without compensation only in proportion to their share of losses that might result if the total available is reduced as a result of climatic events or changes.

These sorts of measures are essential if the sector is to realize its potential to contribute to prosperity in rural Victoria.  The Government should, in pursuit of this, oppose any further regulatory takings and ensure that confidence in the security of property rights is maintained by requiring full and fair compensation for the takings presently planned.  It should also ensure that a full trading scheme should be in place (one that does not require land and water to be jointly traded) to facilitate the transfer of water to those activities where it is valued most.

NATIVE VEGETATION

The principal legislative instruments here are the Planning and Environment Act 1989 and the Fauna Guarantee Act 1988 (which impinges on the management of native vegetation) and their subordinate regulations.  These were covered in the broader report of the Productivity Commission on Impacts of Native Vegetation and Biodiversity Regulations.

The legislation is similar in many respects to that enacted in other States, with the rider that clearance of native vegetation has been more extensive in Victoria in the past.  Clearance rates now are negligible.  Just over 1 million hectares of native vegetation are on private land.

The legislation provides some exemptions mainly to facilitate normal farming activities.  But these exemptions are sometimes more apparent than real and there are many adverse effects of regulation which would repay examination -- not least because there has been no comprehensive review of these regulations since their introduction 15 years ago.

The unease with these sorts of regulations is not just a Victorian characteristic.  Specific issues are many.

First, the regulations do not embody well-defined objectives.  For this reason their proponents and administrators are not obliged to weigh the costs and benefits of the regulations or the decisions made under them.  This situation arises because the regulations have generally been devised without those who bear the costs being consulted and, as a result, not adequately considered.  This is not just a problem for those in the rural economy but it tends to have more widespread effects there.  It is past the time where we can accept all environmental restrictions as an absolute good.  The costs arise both from the processes and the outcomes.

Second, there is inconsistency in the application of the regulations.  The reason is that they are devised at a high policy level and administered by local authorities, case by case, often by unqualified staff with no means of cross checking.  Moreover, officials often have little experience in or knowledge of the pressures and requirements of practical farming.  This is not helped when the Government changes the rules to reverse particular cases such as the novel restrictions which have been on vermin control activity.  Such a case was identified by the Productivity Commission.

Third, the provisions for compensation are either non-existent or inadequate where decisions are made that affect the income-earning capacity or capital value of assets.  Where limited compensation is applied under the Fauna Guarantee Act there appears to be a more realistic application of restrictions -- it applies some form of explicit valuation.

Fourth, because the rules are more stick than carrot, there are powerful incentives for landowners to undermine the purpose of the regulations.  This is reinforced by the increasingly popular but farcical requirement for Net Gain of native vegetation cover whenever an application to clear is made.  This principle inappropriately values native vegetation as an absolute good.  The results are predictable:

• Many sound, beneficial clearing proposals are not put forward as the costs of regulation exceed the benefits to the farmer.
• Farmers tend to favour exotic species in tree planting to avoid future reservation for environmental purposes.
• New native forestry activities are discouraged for the same reason.
• Rare and endangered species of vegetation are concealed to avoid quarantining of productive land.
• Poor management practices (overgrazing of native vegetation) are encouraged in an effort to circumvent the restrictions.

This perverse incentive structure is all the more regrettable given the relatively small area of remaining native vegetation on private land in Victoria.

Finally, the regulations tend to be "one size fits all".  This implies both a distinct inequity and a significant barrier to entry.  Small operators find the regulation both more daunting and relatively more costly than large businesses.  New entrants to businesses affected by the regulations, especially those with limited capital, find the cost of compliance a strong disincentive.  The discouragement of small business and start up activity is an unhealthy aspect of the State economic administration which the establishment of this inquiry seeks to combat.

BUSHFIRE HAZARD REDUCTION

In the 2003 bushfires, twenty thousand hectares of Alpine Ash were burned.  These caused an estimated economic loss of $121 million in four shires alone.  The Alpine parks were severely damaged.  The 3 million hectares burned across Australia would classify as "clearing" under native vegetation rules.  This compares with average annual clearing rates in NSW and Victoria together of less than 20,000 hectares and logging over all Australia of 60,000 hectares.

There is a propensity to regard such fires as natural events and therefore beyond the reach of human control.  This is not the case.  With our increased knowledge of wildfire behaviour we should be responding more effectively in advance of such events rather than engaging in frantic emergency reaction when the fires are out of control.

Many factors have played a part in the tragedy.  One is the indiscriminate, massive enlargement of under resourced National Parks.  But regulation plays a part as many of the official inquiries have since found.  Given the enormous cost of the fires it would be worth examining whether there is potential for improvement in the various regimes as a special case to allow them to mitigate the losses.

Several possibilities occur:

• A relaxation of the rules to allow more extensive hazard reduction burning.  This would be combined with more precise and proactive guiding principles for bushfires control.  This links to the preceding section in that the processes for approval of burning native vegetation are detailed, delayed and expensive.
• Rewrite National Parks regulations to require a style of management which favours hazard reduction, maintains better access and concentrates on protection of fire sensitive areas rather than whole tracts of bush.
• Enforce rural building fire regulations on the urban fringe to prevent construction among trees and other high fuel load areas and require regular hazard reduction.
• Dismantle regulation-mandated committees that give excessive influence to groups with no interest in the land and allows them to apply inertia to prevent decisions on mitigation.
• Apply realistic regulation to fire operations, which assess overall rather than immediate risks -- the application of strict OH&S rules to the fires in Canberra allowed a controllable fire to develop into a firestorm.

This area of regulation is an amalgam of different State departmental responsibilities but the issue is sufficiently important and integrated to merit a unique regulatory response.  We have already forgotten the fires but the fuel build began again immediately.  Fires will inevitably occur but we can reduce their toll.

A Green Vote is a Vote for Economic Vandalism

John Quiggan claims that the Greens are not "irrational kooks" but "are defending rational, evidence-based policies against populism and pork-barrelling".

I beg to differ.  Wherever you look with the Greens economic policies you see school kid posturing and trendy, wealth-sapping strategies.

The Greens are concerned about our high current account deficit.  Fair enough.  The obvious answer to solving it is to export more.  But the Greens actually plan to shut down coal, our biggest export industry.  In addition, their policies would devastate the export potential of our other energy intensive industries, like alumina/ aluminium and steel.  As they seek to eliminate non-renewable energy sources, they also appear to rule out new natural gas developments.  Import replacement, an alternative approach to filling the payments gap, is not even mentioned other than promoting local production of windmills.

The Greens build on their illogical current account policies with capital account policies that would stop foreign investment inflows.  This would require a plummeting exchange rate.  The Greens autarkical policies would thereby amount to economic disruption worse than that faced by Indonesia and Philippines in the aftermath of the 1999 Asian Crisis, and establish us on a downward economic path that would hurtle us towards those countries' living standards.

Proposals to gut our major export industries, while expressing concern for the current account deficit and ruling out capital inflows, surely, are not examples of "evidence based policies".

But export and other balance of payments policies are only the start of the Greens' economic vandalism.  As well as shutting down coal exports, they also plan to stop its use for domestic electricity generation.  Given that it provides 88 per cent of our electricity, this would be catastrophic.  The Greens' energy policies would require increases in the share of renewables from the planned 5 per cent of electricity in 2010 to 12 per cent, rising to 25 per cent by 2020.  This would double the cost of electricity, with all that this implies for industrial disruption and family hardship.

Moreover, their favoured substitutes for fossil fuels, wind, solar and other renewables have reliability problems -- they only work when the sun shines and the wind blows.  Hence they need massive back-up, comprising 90 per cent of their capacity.

One thing the Greens are fond of is more and higher taxes.  They have a spider's web of 41 new taxes or tax increases.  These include taxes or higher taxes on superannuation, savings, and even the family home -- so much for addressing the aging population and national saving problems.  The new taxes combine the predictable -- like a plastic bag levy -- with the absurd -- taxing the electromagnetic spectrum assets.

The only major tax cut is the elimination of the GST but this will be replaced with a consumption tax -- a proven recipe for subjecting the tax system to populist pork barrelling.

Even without accounting for their disincentive effects on economic activity, these taxes will be insufficient to pay for the one thousand plus new spending measures across every major social program.  The Green budget deficit would plumb new depths.

The Greens have specially targeted the farming community.  They propose to flush an additional 3000 gigalitres of water down the Murray Darling system.  This would take over 40 per cent of the water now allocated to irrigated farming.  It would devastate rural communities throughout the interior.  They are persevering with their policy in this matter in spite of a recent a major study on the impact environmental flows which has indicating that it would cost the economy $800 million a year.

The Green's assault on the rural economy does not stop with water.  Under their policies, control of farming land will pass out of the hands of farmers into Green accredited "environmental management systems" and third party consultative processes.  As farmers' costs and taxes are forced up by other Green policies, their production options will narrow.  Native forestry, live animal exports and GM crops all fall foul of Green ideology.

The Green's infrastructure policy calls for the stock of transport infrastructure to be cut back to 1995 levels.  As with so many of their proposals, this would play havoc with productivity growth.  The one ameliorating strategy that gets an honourable mention is a plan to increase bicycle trips by 20 per cent!

The Greens' policies are as loopy as they have always been.  The difference now is that they stand to gain the balance of power in the Senate.  Their stated policies provide a good indication of the direction they will be pushing an ALP or Coalition Government.  That direction is totally wrong.

The Greens, having already decided to offer preferences in most seats to the ALP, are now auctioning forestry electorates.  This puts the Australian timber industry on the Green Line.  Voters who favour the Greens out of a social conscience need to be aware of the widespread damage that their policies will do.

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Bold changes needed to lift productivity

Following the 9 October election, the Coalition must consolidate and build upon the reforms blocked in the Senate.

Further reform is vital to accommodate the significant changes taking place in Australia.  Chief among these changes is the ageing population and the more open world economy.  These create pressures for on-going improvements in productivity both to support more dependents and to maintain competitiveness.

Industrial relations stands out as the priority.  A more flexible labour force and an ability of people freely to agree employment contracts with each other allows huge productivity dividends.  This is the area were Hawke and Keating failed and where a Labor Party tied to monopoly-seeking unions will always fail.

It is also the area strongly pressed by the Howard Government, which as a result, has a comprehensive, electorally mandated agenda sitting on the shelf.  Its mandate includes allowing greater flexibility through paring back restraints on small firms wishing to dismiss unproductive workers, restraints on strike activity during the life of agreements and secret ballots before strikes are permitted.

None of these are particularly radical.  Nor are the restraints proposed on the AIRC.  For the future, the agenda should be taken a further stage that would totally abandon Australia's nineteenth century oriented industrial relations system.  The current IR system was framed within a context of a largely, unskilled male workforce working fulltime in the same factories for life.  The unique Australian embellishment, an arbitration court determining workers' pay and conditions, has aggravated the detrimental effects of that framework on productivity.

The productivity bonus from industrial relations reform will assist us to cope with the effects of the ageing population.  This has already invited promises at both ends -- greater funding of child care centres and greater health insurance incentives for older people.  The Government has, correctly, pursued these goals by emphasising self reliance and consumer choice rather than handouts and a uniform system of benefits.

It needs to do more to combat the blowout of the ratio of dependents to breadwinners.  One way is to encourage an abandonment of the norm of retirement at 60/65 years old.  This made sense in an era when retirement at 65 was normally followed by death within five years and when the nature of work was more physical.  Today's 65 year old has more than 20 years life expectancy and a workplace effectiveness equivalent to that of yesterday's 55 year old.

Like industrial relations reform, tax reform has merit in itself and has become all the more urgent as a result of demographic trends.

Avoiding taxation of savings is a vital component of any reform.  At present, payments into the main savings vehicle, superannuation, are taxed both on entry and exit.  In addition, the superannuation industry's regulatory wrapping imposes excessive accountancy costs and shields incumbent funds from more efficient rivals.  All of this is not only a disservice for people to provide for their retirement but it does great disservice to one of our considerable failings as a nation -- to increase savings.

The top income tax rates remain too high.  These high rates reflect the politics of envy rather than an efficient tax system.  Lower taxes reduce the disincentives to work harder and to incur fruitless expenditures on tax avoidance.  Bringing taxes to a 30 per cent level and making them flatter should be the goal.  Depending on how thresholds are set, this is achievable for $10 billion a year.

John Howard added the cream to his victory by staring down green activism during the election.  A bucolic nirvana has replaced socialism as today's romantic New Jerusalem.  The urban elites consider that the modern economy is killing the world's natural environment.  They are calling for serious reductions in tree felling, fossil fuel burning, in water use, and for a halt to new GM agricultural technology.

The native forest open to harvesting has been pegged back.  Only 12 per cent of Tasmanian old growth forest is available for logging on public land.  On some estimates banning logging would cost the Tasmanian economy $12 billion.  The government stood against these policies and must continue to do so.

Genuflecting to Kyoto has meant a big spend on exotic sources of energy and a requirement that 4.5 per cent of electricity must be provided by these sources by 2010.  Renewables cost three times the price of conventional electricity.  With its energy intensive industry base Australia must re-think this element of its energy policy.

With irrigation, governments are to take a Sydney harbour's worth of water (500 gigalitres) from the Murray irrigators in pursuit of ill-founded but oft-repeated claims that this is needed to remedy environmental degradation.  The loss of water is estimated by the Centre for International Economics to cost the economy $72 million per year.  The ALP would triple this water grab at a cost of $316 million per year.

Halting new technology in GM agriculture has been vigorously pursued by all State Governments except Queensland.  The Commonwealth has acquiesced in this knee-jerk ingratiation to green luddites.

The costs of these regulatory measures are, in the main, off-budget.  They are, nonetheless, real economic costs.  Governments, Federal and State must examine proposals on the basis of science and economics.  The advice they need must be unpolluted by a self-interest in further regulations and the funding that accompanies this.

Of other matters, clearly privatisation of Telstra should now happen -- Australia is one of the few advanced nations with its telecommunications industry largely in government ownership.  Recognising the electronic revolution that has transformed the industry, cross ownership media rules should also be abandoned.

These, though are the fillers.  The fundamental work needs to be in industrial relations, taxation and in rolling back the productivity-sapping green no go areas.

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Water draws opportunists

Having little political rating 20 years ago, water is now a battleground area in the Federal election campaign.

Farmers use 70 per cent of the water that is available from dams and, especially in the Murray-Darling area, increased access to water has lifted rural prosperity.  It has even allowed them to stay in business during the worst drought in a century.  Not long ago a hollowing out of Australia was on the cards as all but the coastal strip faced economic decline.  Now, thanks to the greater productivity of irrigated agriculture, we are talking of food processing industries expanding on the back of low cost quality produce.

For green activists water has presented an opportunity to pursue political influence at the cost of curbing prosperity.  They are tugging urban heartstrings with fabrications about a dying Murray River, a continent engulfed in salt and disappearing fish.  No such reality is evident -- salt levels in the Murray have actually halved over the last 20 years.

However, pressing political buttons is having its effect.  We can see this with the gymnastics the Bracks Government is engaged in.  These include curbing Melbournians' use of water and avoiding new dam building even though this is far and away the most cost-effective approach.

The effect can also be seen with the governments of NSW, South Australia and Victoria taking back 500 gigalitres from Murray irrigators.  This is equivalent to a Sydney Harbour and represents about 7 per cent of the irrigators' water.  The governments want this water to flush down the river and to feed "stressed" environmental iconic sites conjured up by green campaigning.

An early volley in the present federal election has been served by the Nats against a South Australian Liberal.  The member for Barker, Patrick Secker dared to speak the truth about the Murray-Darling system in a Parliamentary report.  He agreed that there was no evidence to justify the scheduled 500 gigalitres new environmental flush for the Murray River.  Apparently, though, the politics of water brooks little room for honesty, even amongst allies.

The ALP says it would up the 500 gigalitres ante to 1500 gigalitres (21 per cent of irrigators' use).  Proving they can never be outbid in the wealth-destroying stakes, the Greens have come out with a whopping 3000 gigalitres that they would take from farmers.  A recent report from the respected Centre for International Economics has costed this at $800 million a year but has left them undaunted.  To start the ball rolling the Greens would take all the water from the nation's largest and most productive cotton farm, Queensland's Cubby Station.

To court the green vote, John Howard is offering $2 billion for efficiency improvements, sewerage infrastructure and the like.  Most of this is for measures already planned but it includes a long overdue funding for research into water supply needs and quality.

The states have cried foul because much of the $2 billion is to be funded from Commonwealth funds they had earmarked to spend on their own vote-gathering projects.  Be that as it may, a Latham victory would not bring greater generosity from Canberra.

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Energy Market Needs Certainty

Government indecision and inaction is creating on-going uncertainty in the energy market.  This is threatening investment.

The Productivity Commission has already produced a report demonstrating the "chilling" effect of the current approach to regulatory price setting and approvals.  It argued that the National Competition Commission and the ACCC had created a straightjacket that deterred efficient investment.  The Parer Report, Towards a Truly National and Efficient Energy Market, endorsed an important Productivity Commission proposal for regulatory holidays for new "greenfield" proposals.  Now the Productivity Commission is in the process of examining gas in greater detail.  Doubtless it will again emphasise the need for prices and service levels to be the determined by competition, and not the regulatory agencies.

On top of this, the fallout continues from the shambles of last month's CoAG meeting.  The State Premiers managed to remain around the table long enough to solemnise some vital agreements on water.  However, they did their health funding dummy-spit before they had put the seal on energy policy reforms.

The energy reforms were intended to unify the gas and electricity regulatory regimes.  They were also to amend market rules so that ministers would have a formal role in the action which is currently exclusively in the hands of regulators.

The changes were to address governance issues revolving around three key areas of the industry:

• how the wholesale market should operate
• how to ensure efficient investment in the natural monopoly elements of the gas and electricity grids
• how the process of full retail competition should be progressed.

It appears that there was a rare near-consensus for two new regulatory bodies to be formed to replace two existing ones at the federal level and six at the state level.  On the basis of material that leaked out from preliminary meetings of ministers and officials, one of the two proposed regulatory bodies is to make the rules for the market and the other is to apply them.

Subsequent reports suggest some lingering uncertainty about the on-going role for state regulators.  If these were to remain, the lofty sentiments about rationalising a number of regulatory bodies would be eroded.  However, in the present environment, even a standstill on the number of bodies has to be chalked up as a win!

One long-standing area of debate has been the role of the ACCC and whether a regulatory body should be separate from it (the Parer view and that of the states) or be semi-autonomously housed within it (Industry Minister Macfarlane's view).  The Commonwealth had largely given ground on this issue.

The tentative agreements appear to foreshadow no marked change in the current careful processes for vetting investment proposals that rely on government regulations for their income.  These processes provide a bulwark to over-ambitious investment being undertaken.  Even so, without a public document, investors are in the dark and must react with caution.

The agreements were supposed to be bedded down and set out in legislation by July of next year.  This timetable is no longer possible.

The vacuum that is now in place means uncertainty about what the new governance structures will entail.  This is compounded by continued sniping by ministers since the failed CoAG meeting, with ministers' suggestions that the present arrangements are not delivering enough new investment, and claims that generators are unfairly forcing up prices.

Some ministerial statements appear to nostalgically hark back to the days when investment decisions were in the hands of politicians.  In fact the changes proposed appear to include no provision for ministerial direction vis-à-vis specific proposals.

The problem with ministerial histrionics where there is no formal public statement clarifying the more responsible agreed position is that they bring additional investment uncertainties.  These can mean delays or even cancellation of projects as investors wait to see whether government action might offer assistance or might reduce the value of any expenditures they might be contemplating.

Maintaining the present arrangements in place will not do irreparable damage, but it does, at least, delay the timing of a much needed relaxation in regulatory control over new "greenfield" gas pipelines.  Moreover, the lack of public information on the new proposals is giving rise to considerable speculation on whether we are facing a new era of ministerial intervention.  It also risks unravelling the tentative agreements that have reportedly been reached.

Market confidence needs to be reassured.  One means of doing this would be to publish the agreements presently reached between the energy ministers.  This at least will offer some assurances to investors that ministerial rhetoric on the issue does not foreshadow a harmful backsliding to the previous regime of political direction over new investment.

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"Easing the squeeze" on farmers

I've just finished watching the one and only televised debate between the Prime Minister, John Howard, and Opposition Leader, Mark Latham, scheduled for the federal election campaign.

Rural and regional Australia was mentioned just once -- when the Prime Minister said no-one understood the bush like his Deputy Prime Minister, John Anderson.

Neither leader mentioned the word "environment".

Defence, health and education were the issues that dominated discussion.  Mr Latham often repeated the phrase "ease the squeeze on middle Australia".

There is also a need to "ease the squeeze" on the bush -- including the squeeze created by the environmental policies of the Federal Coalition and State Labor governments.

A lot of pressure has been created by giving into environmental activists in a bid to neutralise "the environment" as an issue -- including as an election issue.

There has also been an increase in funding to environmental groups.

In its report, "Taming the Panda:  The Relationship between WWF Australia and the Howard Government", The Australia Institute shows that over the last 11 years funding to WWF has increase by more than 500 per cent and is now around $11 million.

Much of the increase is attributed to increasing Federal Government funding of this environmental organisation.

I am for the environment.  But thinking globally and acting locally, I reckon the best thing any government can do for the environment is to back Australian farmers rather than broking deals which result in increased pressure on them to give back land and water.

The world's population is predicted to increase by another three billion people before stabilising at around 9 billion in 2100.  This represents a lot more people to feed and clothe.

I would prefer not to see any more land brought under cultivation, and no more water infrastructure developed.  But I also don't want to see people go hungry.

Given the global outlook, people who really care about the environment should be looking to back efficient farmers -- farmers who can produce a lot of food and fibre from the smallest area of land and with the least amount of water.  In this regard Australian producers have long reigned supreme.

Most of Australia's primary production is concentrated in the Murray Darling Basin.  This is not because this region has the most suitable land or because this is where most water falls but rather because this is where the water infrastructure has been developed.

Forward thinking politicians who are genuine about protecting our remaining wild rivers would support Australian agriculture where the infrastructure is now already developed.

Instead farmers in the Murray Darling Basin are under the most pressure and are being "squeezed" the most.

Over the last 40 years the world's farmers have managed to produce double the quantity of food from approximately the same area of land (1.5 billion hectares) by adopting new and improved technologies including better irrigation, fertilisers and pesticides.

The next big efficiency gains are potentially through biotechnology advancements and GM food crops.

Yet during this election campaign, no-one is defending, let alone promoting, the best thing for the environment -- modern high yielding agriculture.

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The Australian Greens Election Policies

Occasional Paper

EXECUTIVE SUMMARY

• Green policies now matter as their voter base grows, their parliamentary power increases and their policy ambit widens.
• Contrary to popular perception their policies are not narrowly environmental -- in their entirety they mimic the central planning model now rejected by all but a few closed societies.
• Their environmental policies are based on quasi-religious belief and serious misconceptions of the quality and resilience of the environment -- they will strike particularly hard at the rural sector.
• Green economic policies will radically redistribute the shrinking national income their policies will bring about.
• Investment controls, weak labour policies and other forms of interference in markets will destabilise the economy.
• Energy consumption and exports will be drastically reduced by quarantining our principal energy source, coal, and any other feasible alternative.
• Wind, solar and other renewables can replace only a fraction of current supply at a much higher cost -- they will enforce negative economic growth.
• Immigration policy will focus on facilitating the entry of refugees and restricting the current flow of skilled and highly educated immigrants.
• Other policies will enlarge the public sector, tighten censorship, restrict overseas trade and liberalise drug use.
• Twenty or more new or increased taxes are proposed to reduce incomes, increase prices, tax inheritances and shrink the rental property pool.
• Green policies will hit the poor hardest through increased taxation, high energy (and hence goods and services) prices, lower employment and economic growth and reduced choices -- we will all be worse off but the poor will suffer most.
• Green policies are inward and backward looking, have failed universally at great cost to those who have been misguided enough to try them and are inconsistent with a free and tolerant society.
• These policies ought to be rejected.

WHY GREENS' POLICIES MATTER

Until recently, the policies of the Australian Greens have escaped serious analysis.  The public expression of those policies in narrowly based direct action campaigns has received largely sympathetic media reporting and commentary.  The images of defiant protesters in forests, rivers and reefs has simplified complex matters and elevated them to quasi-religious status.  The public has generally acquiesced in the collaboration or surrender to these tactics by the political class.

For several reasons, this self indulgence by the public and politicians is no longer responsible or feasible.

First, the green movement, by its highly selective approach to issues, has attracted a significant support base and will be augmented by the impending implosion of the Australian Democrats.  This widening voter base has grown in an atypical manner, often in conservative electorates.  The new voter base is almost certainly not aware of the full measure of the Greens' policies.

Second, the Greens could possibly hold the balance of power in the Senate after the next election.  They will then be able to use the traditional strategy of political blackmail to force adoption of a much wider range of policies than those relating directly to the environment.  If the Greens are to be the party of review in this way, we need to know what their values are and whether they are pragmatic or dogmatic.

Third, the Greens have issued a much more comprehensive policy document for this election, which displays the extent of their ambition and the colour of their political philosophy.

Green policies therefore deserve close analysis and should undergo the same unsparing critical analysis of their practicality and their public benefit that is routine for the major parties.  The Greens can no longer be allowed to get away with loose, generalised, emotive statements to justify their policies.  The business of government is too serious for that.

THE POLICY FRAMEWORK

In general, the Greens' policies is a ramshackle collection.  They resemble the unedited record of an extended workshop of strident and diverse interest groups pushing their own barrows and narrow ideologies -- doomsayer environmentalists, anti-globalisers, gender politicians, indigenous activists, welfare professionals, industrial relations club members and disappointed adherents of the old Left.

They are as populist and as pork-barrelling at the other parties -- just aimed at the hip pocket of a far more Left wing- crowd.

But underneath this diversity, and despite a number of startling internal contradictions, there lies a common theme.  The Green policy framework could be said to be revolutionary.  If enacted, it would radically alter existing policies and political processes.  It is not new, however.  Its philosophy is now more than a century old.

Although the policies all claim to pivot around environmental concepts, the processes, and most of the policies themselves, are a reincarnation of the tired old Marxist, totalitarian model.

These include:

• high levels of state ownership in the economy and a significant increase in bureaucracies and their powers,
• pervasive controls on economic, social and cultural life,
• inward looking/xenophobic economic policies, and
• high taxation and government spending.

The detailed protection through control of the environment at the core of policy is little more than a variant of state control of land and natural resources that has always been crucial to socialist policies and regimes.

Worse, these controls are founded on a misunderstanding of how the natural environment is structured and how ecosystems function.  The ideological foundation appears to be a remapping of traditional Judeo-Christian beliefs and myths, including the concept of an original Eden.  In this framework, modern Man is in a state of sin wherever He attempts to modify or control the landscape.

The Greens' idea of environmental protection is thus "lock it up".  An inevitable outcome of this approach is environmental neglect and the destruction of biodiversity as wrought by the Canberra fires of the summer of 2003.

The Greens also have a lack of concern for Australia's defence and a willingness to surrender sovereignty on some important matters, such as refugees, to UN bodies.  This policy has no track record and carries an inevitably high risk through relying on foreigners to possess the same goals and interests as those we have ourselves and to share our own resolve in defending them.  It is especially risky given the unrepresentative nature of the UN.

Yet, contrary to their rhetoric and willingness to relinquish national policy management in some areas to UN bodies, the Greens are not looking forward and outward -- they are looking backward and inward.  They are a party of the far Left like their counterparts in Germany.  It is not possible here to analyse the policies, of which the environment is only one plank, in great detail.  The comprehensive agenda of the Greens can be found on their website for those interested (www.greens.org.au).

The following is an attempt to illustrate some of the more important weaknesses of the policies and their inherent contradictions.

SOME CORE POLICIES

ENVIRONMENT

Environment policy is at the centre of Green policies.  It is difficult to weigh its impact, partly because much of it is no more than meaningless repetition of sustainability mantras, and partly because it permeates all other policies.

For instance, energy efficiency, proper management of marine resources and control of pollution are all laudable and already on the agenda of the mainstream parties.

However, our most significant environmental improvements over the last two decades have not come from environmental idealists but from new and innovative technological advances.  These include real but unglamorous advances such as sewage treatment, air quality improvement and the sort of engineering solutions that have seen a halving in salinity levels in the Murray River.

Recently, advances in biotechnology and the broad scale adoption of this technology by agriculture in the USA have resulted in a 20 million kg reduction in pesticide use and a 2 billion kg increase in yield.  The adoption of the first GM cotton varieties in Australia saw pesticide application rates reduced by 56 per cent and it is anticipated that this will increase to 75 per cent with the widespread adoption of the second GM variety.  Yet the Greens are against this technology and have actively and successfully banned GM food crops.  They have done so on the basis that GM is unnatural and poses risks to humans and to the environment in spite of a decade of evidence to the contrary.  In short, the Greens are fundamentally narcissistic, because they will forgo the potential for real environmental benefits to satisfy their own quasi-religious beliefs.

The Green's policy involves many radical initiatives in traditional green areas.  Greenhouse emissions will be drastically reduced by 80 per cent in 50 years and then phased out.  This goes far beyond even what extreme green interest group such as Greenpeace advocate.  The native forest industry will be restricted to plantations.  Coastal development will be frozen.  Rivers and native vegetation on private land will be strictly controlled.  No new ports will be allowed.  Pollution will be very severely punished and expensively insured against.  All waste will eventually be recycled.  All of this is proposed without any evidence of its need, or expected success, and with absolutely no expression of concern or even recognition of the impact such action would have on the economy, on people and on communities.

The approach ignores the reality that rivers are not fixed in their flow volume or direction and trees regrow.  The Greens policies cannot deal with the reality of a dynamic Nature and Humanity.

The transition to the sort of society and economy envisaged by the Green policies will be costly and painful for the nation, and largely unnecessary.  Where such policies have been most enthusiastically embraced, as in Germany, governments are now in full retreat.

All this is most clearly illustrated by the fate reserved for farmers, who will become the "proud custodians" of 70 per cent of the environment in this new world.

According to Green policies, farmers will be required to practice "sustainable agriculture.  But to the Greens, "sustainable" is a confused, ambiguous, even meaningless concept.  Sustainable agriculture is exactly what farmers do already, if only because they own their land and want to ensure it delivers a sustainable income.  Having little respect for, and no understanding of the inherent motivations to ensure sustainable resource use, the Greens want to impose their own central planning as a substitute for individual actions that stem from well defined property rights.

Their policy will require operations on each farm to be subject to a national ecological plan based on "coherent bioregions" (which are a figment of Green imagination).  Each farmer will be subject to a detailed "accredited environmental management system".  These systems are already, and notoriously, an administrative and bureaucratic nightmare, even for large corporations.  Each farmer will be required to consult numerous outside bodies about his operations.  All this in the face of the recent Productivity Commission report's claim that the existing, less onerous regulations are already excessive and misdirected.

The upshot of all the Green policies for farmers is:

• rising energy and fertiliser costs as energy prices rise
• rising feed costs as genetic improvement is banned
• new and higher taxes of various kinds, including the nutrient pollution tax
• detailed planning/interference in operations by government and local action groups
• tighter regulation of the environment and food standards

These burdens will be carried with:

• a more restricted usable farm area
• more restricted production options, which exclude GM crops, native forestry and live animal exports
• less access to water and water trading

This is a bigger nightmare than the Soviet experiment with collective farming.  Not only do the Greens want to impose state planning they also want to prevent farmers using resources efficiently.

Thus, the Greens are arguing for six times the quantity of water to be released into the River Murray (3,000 gigalitres equivalent to 6 Sydney Harbors) than that already committed by the Prime Minister (500 gigalitres).  The Labor Party has committed to 1,500 gigalitres which is the amount demanded by the conservation groups.  But, there is no indication in the Greens' policy documents how the 3,000 gigalitres will be used and how it will benefit the environment.  This must be a figure pulled out of the air.  If Bob Brown intends to run all the water held by a full Hume Dam down the river and out to sea this will create its own environmental problems -- as well as devastating regional communities along the river.

A study by La Trobe University estimates that taking half this amount of water, 1,500 gigalitres, would cost local communities approximately $162 million and the loss of up to 3,300 jobs.  The study concluded that this would destroy whole communities, not just the agriculture sector.  3000 gigalitres would eliminate 40 per cent of water entitlements to Victorian irrigators.

At the same time farmers must manage for climate change though, thankfully, given the confused state of the debate on this, they will have some flexibility here.

However, those farmers least able to do so will not be required to bear the costs of all this.  All costs will, presumably, be shifted to the productive farms.

Green environmental policy is superficially high minded, but it comes at a very high social cost.  It involves detailed state supervision of society, locks up valuable national resources, closes off numerous sound economic options and would result in a much lower standard of living.  This would be in return for environmental gains that are often questionable or achievable in other less punishing ways.

ECONOMIC

The first stated principle, and goal, of the Greens' economic policy is ecological sustainability.  This is sufficiently vague as to be meaningless in this context.  Getting down to the real thrust, the policy involves detailed supervision of the economy.  The purposes are mainly social rather than environmental.  They are intended to:

• dramatically redistribute income and wealth both at home and internationally
• enlarge the state sector
• achieve national self sufficiency in investment
• enforce "ethical" investment
• introduce industry planning
• deny farmers access to water and technology
• give organised labour new concessions and powers

As this agenda shows, the Greens are far from a single issue party.

The extreme versions of this socialist model have collapsed spectacularly around the world and the milder manifestations in countries such as our own have been drastically modified to encourage economic freedom and growth.  The devil is in the detail of the processes that impinge upon the lives of individual Australians.  There are a few unavoidable consequences.

A much more progressive tax scale will enforce significant redistribution of income and wealth.  As total revenue must also increase substantially (see below) the income tax will have to bear very heavily on middle income earners (lower incomes will benefit from a higher tax threshold).  The new estate duties will also need to be very progressive.  Together with the multitude of new taxes (see below), which are ultimately borne by all consumers, the Green policy outcome is to tax productive, thrifty individuals very hard.

National self-sufficiency in investment and the associated control of "speculation" is an extreme version of the old controls on capital flows.  These will require import and export controls, as well as exchange controls on the currency of a severity generally confined to wartime.  With this policy we would be virtually on our own in the world, apart from certain closed societies such as North Korea and Cuba.  If the policy worked, it would create immediate disruption and loss of confidence.  It would deprive us of access to the surplus capital (savings) of other countries -- not very bright when Green policies require major new investment and while our domestic saving rate is headed toward zero.

The policy would also require strict rationing of foreign currency for current payments to bring the current account of the balance of payments to a net zero -- to match the capital account.  At such a time, one would not like to be at the Reserve Bank counter explaining to migrants that they could not send money to their ailing parents, or to a businessman with a legal obligation to pay debt interest, or to importers from China with invoices in hand, or to travellers needing foreign currency to visit family or go on holiday.  This policy is patent nonsense.

The alternative is a currency board which would simply sell foreign currency to who ever bids.  With capital inflow banned, this arrangement would ensure a very low and unstable A$.

The Greens would exert government pressure on superannuation funds to make "ethical" investments.  This faces two obvious objections.  One is that super funds are legally obliged to invest to maximise the return to superannuants.  Apart from this strict legal requirement, restricting the funds' investment choices reduces their potential to do their best.  Do superannuants really want Bob Brown's acolytes to run their super fund?  Do we want to forego benefits of high pensions for pretentious notions of "ethics" expressed by naive Green activist?  Some people may, and they should be free to do so, but they should not be free to commandeer the savings of the majority who simply want the best chance of a secure retirement.

Industry planning as proposed by the Greens has a long history of failure.  It creates permanently inefficient, high cost industries.  With great and enduring pain, Australia removed industry protection and subsidies, which were part of the Country Party's planned approach to manufacturing.  The economy did not collapse and consumers benefited.  Protection of ecologically sustainable industries will be the same.  Perhaps the greatest experiment in preserving culture and environment in this way is the European Common Agricultural policy.  QED

Enlarging the state sector substantially, as proposed, hints at the nationalisation of enterprises, particularly in the transport and communication sectors.  Privatisation in Australia has not always lived up to expectations but even a cursory comparison of the present structure against the hidebound, overmanned, inefficient state bodies of the past should convince that a wholesale retreat to the public sector would not improve services or reduce prices.

One example is the Victorian electricity industry which, under government ownership, employed over 20,000 people.  Today it has one third of these numbers producing 50 per cent more electricity.  Do we really want our economy to be run under wasteful conditions with all that this entails for drastically lower living standards?

The proposal to give state sponsored concessions to organised labour is damaging on several counts.  Freeing up the labour markets creates employment;  reregulating with a bias to labour will do the opposite.  Granting a shorter working week and "lifestyle friendly work practices" has immediate appeal but a moment's reflection reveals the folly of it.  It will simply add to costs.  Consumers (workers) will pay for their shorter week in higher prices.  With an aging population supported by a dwindling workforce, a shorter working week also sends all the wrong signals.  France is already regretting its intemperate decision to shorten the working week.

There are many other aspects of the Green economic policies that are unworkable and damaging, but the real difficulty seems to be that the Greens live in a parallel world, which bears no resemblance to the real one.

ENERGY

The air of unreality and wishful thinking are strongest in energy policy.

The principal plank of the policy is to reduce energy consumption by reducing production.  The biggest "gain" will be through phasing out use of coal by 2050.  No new coal fired stations would be built and the existing ones would not be refurbished (presumably even to reduce emissions).  We would thus lock up enormous energy reserves and deny ourselves by far the cheapest source of energy available to us.

It would also phase-out our second largest export industry, and force China, Japan and Korea to rely on dirtier sources of coal.

Nuclear power is the only really credible, clean, large-scale alternative and there is no question that the Greens would acquiesce to Australia using this to generate electricity.

Nuclear power aside, non-carbon emitting electricity sources are over twice the cost of conventionally generated electricity.

The Green's policy proposes "small scale distributed generators" but, especially as these will not be using fossil fuels, they are not a solution.  Moreover, though intermittent forms of generation like solar can be currently produced at only a little over twice the cost of coal, this massively understates the penalty once significant quantities are involved.  This is partly because existing wind generation is using the most useful sites.  More importantly, wind energy is so unreliable and creates so many stability problems in the management of electricity supply that it is estimated by the Australian electricity market manager (NEMMCO) to require back up capacity to be installed for 92 per cent of its output.  In addition, its dispersed nature would call for considerable additional expenditure in building the grid to allow its carriage to users.

Renewables are also increasingly subject to the sort of passionate environmental campaign with which the Greens are familiar.

Currently the heavily subsidised renewables are sheeted to supply 2 per cent of Australia's electricity.  Even this will put an annual cost on the economy of between $380 and $530 million.  Additional imposts will seriously damage our competitiveness.

The Green energy world will be one of high energy prices, smaller, more expensive homes, less lighting, heating and air conditioning, less travel, more expensive consumer goods and frequent power interruptions.  Like all production driven policies it will require strict controls and rationing on the consumption side.  Rationing will be broad based by blackout, and bureaucratised through licences granted to the favoured few.

Again, ordinary Australians would see a dramatic decline in their living standards and many of our resource industries would disappear overseas.

In case anyone should attempt an end run around this policy, we would also lock up our massive oil shale reserves, which could well be economic now at current oil price levels.  Large-scale (clean) hydro-electric power would also be banned.

We are supposed to cope with this almost energy free world through increased energy efficiency and conservation on the demand side and renewable energy sources on the other.

As the policy contains an overarching right of the population to energy services, rationing or price will largely drive this efficiency and conservation.  Prices would indeed increase dramatically but not enough to more than halve our use.

Low-income groups will suffer most from Green energy policies as they have the least capacity to adapt, least influence to jump the rationing queue and the least resources to pay high prices.  They will also be the first to lose their jobs in the shrinking economy that would be a consequence of the Green plan.

IMMIGRATION

Immigration policy is stood on its head.  More precisely, it disappears between the jaws of population policy and refugee policy.

Population policy is based upon ecological sustainability, which implies low population growth and low overall immigration numbers.

Such immigration as is allowed will be dominated by family reunion and humanitarian -- refugees/asylum seekers -- categories.

Refugee entry will be encouraged in a number of ways:

• an expanded refugee intake -- this is not quantified and in practice would depend upon how many people happened to arrive
• humanitarian visa categories will be expanded to include all who are displaced by famine, poverty, environmental degradation, war, political oppression or any direct or indirect denial of their fundamental human rights -- this covers hundreds of millions of people
• immigration will not discriminate on grounds of language, education, disability, sexuality etc -- we will accept virtually anybody
• all entrants without visas will be presumed to be asylum seekers and given every assistance to establish their refugee status -- a stowaways charter
• asylum seekers will be released with full social service support within 14 days unless security checks are negative -- given the time such checks can take this means an effective 14 days holding period
• existing temporary refugee visa holders will be given immediate permanent residence
• if asylum seekers are detained or ordered to be repatriated, they will be allowed unlimited rights to legal challenge with full welfare entitlements and legal aid at all stages.
• reception centres will be open door
• much of the interdiction and detention apparatus will be dismantled.

Over the whole immigration program there will be less emphasis on financial resources and English language skills in selection of migrants.

The message seems clear.

If you are a skilled tradesman or talented businessman or a hardworking blue collar worker from a peaceful and prosperous country, and do not have family in Australia, you would not welcome and your chances of coming to Australia are negligible.

The surest mode of immigration to Australia (though not the safest) will be for those from the numerous disturbed countries of the world.  They can pay an enterprising boat owner, who would then be able to pass largely unhindered through our waters under the new non-interdiction policies.  The migrants could then claim refugee status on arrival.  They will then enter a fast stream, welfare-supported process to rapid permanent residence in Australia;  then send for their families.  In short, we will abandon our existing immigration program, designated an outstanding success by a recent Flinders University study, for virtually uncontrolled entry of immigrants of unknown quality.  Immigration becomes a random international welfare policy tool rather than a focussed program of benefit to Australia.

The benefits to Australia from this policy are unclear to say the least.

OTHER POLICIES

The Green policy document is 180 pages long.  There are many other policies that deserve detailed analysis.  Collectively they are an unsustainable wish list.  Several, however, merit at least brief comment.

There is a proposal for a guaranteed adequate income for all Australians at a level above the poverty line.  The cost of this measure and its effects on the incentive to work are impossible to calculate without extensive financial and economic modelling but they would be many billions of dollars.  This policy is either naïve or a cruel hoax on public pensioners.

Censorship would be extended to include video games, live performances and all leisure technologies.  The mixture of liberationist and puritan in the Green makeup is worth further study, particularly with the New Left and the "pink" revolution

A raft of new official bodies and consultative processes will be set up including a Commissioner for Children, a federal energy agency, a National Commissioner for Ecological Sustainability, an Australian multinational company ombudsman and an Office for the Status of Lesbian, Gay, Bisexual, Transgender and Intersex People.

The Greens will work for fair trade at the international level, not free trade.  This might make the EU very happy, but it would entail a vast new bureaucracy to determine the "fair" price and to enforce sales and purchases at these prices.  Nothing like this has been tried since the failure of the Soviet Gosplan.  As an addendum, Australian companies will be obliged to meet Australian environmental standards when operating overseas and the government would facilitate foreigners' legal challenges to their operations.  As this would result in Australian law overriding the laws of counties in which these firm operate, it would cause great disquiet in the international community.

The illegal drug policy of the Greens has been widely discussed.  It should be noted that the Greens did not say that they proposed "examining" the question of making illegal drugs available.  The policy says "The Greens will initiate or support" the decriminalisation of cannabis for personal use, pilot programs to make heroin available in controlled conditions, the controlled availability of cannabis and investigation of the options to supply ecstasy in controlled environments.  People differ widely on this matter but the Greens have given a clear signal that they favour liberalisation of drug laws.

Internationally, The Greens favour the break up of our nearest large neighbour, Indonesia, through self-determination for West Papua and Aceh.

PAYING FOR YOUR GREENS

It is customary for minor parties not to cost their policies in any detail.  The Australian public should now be told the total cost of Green policies as a condition of taking seriously the Green's claim to participate in the governance of Australia.

In the event, almost no costing of policies seems to have been done.  The package is non-exclusive wish list of interests clustered under the Green banner.  This is a quite serious problem as the policies incorporate a breathtaking array of new initiatives and increases in spending on current programs.  There are over a thousand in all.

The new spending measures are too numerous to recount here.  They cover almost every area of existing government and a host of new initiatives.  Many of them are almost open-ended and extraordinarily financially absorbent.  These include across-the-board increases in spending on childcare, education, health, housing, aged care, pensions, youth, Aboriginal affairs, welfare, occupational health and safety, foreign aid, research, arts and others.

Under each of these headings, multiple increases and new programs are proposed, as well as significant slackening in expenditure control mechanisms.

There are also the universal indirect costs which will flow from centralised economic planning, policing the centrally planned ecology, intervention in economic activity, redirection of superannuation investment and prohibition of foreign investment.  All of these extra burdens are to be carried by the productive sectors of the economy.

The Greens might argue that they have made provision for extra finance although this is by no means clear.

Certainly there will be many new and increased taxes [see Box below].  The staggering array of new taxes may well kill the economic goose that lays the golden egg.  Expenditure programs would become academic.  Insofar as they did not send the economy over the cliff, they would almost certainly not cover the new spending programs.  The massive growth in government will be accompanied by a massive growth in the Commonwealth deficit.

The Greens propose that this all be financed internally -- there will be no overseas borrowing -- from the currently almost nil private savings which the prosperity induced by their policies will generate.  At this point, Green policy enters the realm of fantasy fiction.

WHO WILL PAY?

There is no Magic Pudding.  The mainstay of the working population, comprising wage and salary earners and small business, will pay for the Green policies.  The government always ends up counting on them, because their earnings represent most of the reward for productive effort.

The policies will hit hardest those on the bottom of the social scale.  The "guaranteed adequate income" is a sham because it is an oxymoron.  It cannot be guaranteed at a level adequate to protect the poor from the effects of higher prices for goods and services, scarce and costly energy, and reduced availability of transport options (no cars for the poor).

In that sense, the Green world will turn out at least as inequitable as that which now exists, with the rider that we will all be worse off together.

CONCLUSION

Both Green policies, and Green candidates ought to be rejected at the next election.

This is not simply because those policies are xenophobic, inward looking and based on poor understanding of the world.

It is not simply because they fail to demonstrate public benefit.  It is not because they will undermine the incentives to work, to innovate and to create wealth.  It is not even because they patently won't work.

It is because they are a rerun of a whole political philosophy and structure that has been resoundingly rejected, not only in the West, but also by all those countries that applauded the destruction of the Berlin Wall.

Pursuing these policies in Parliament, the Greens will seek to pressure other parties to:

• restrict the use of energy
• shrink the economy
• restrict the flow of skilled people and foreign funds to Australia
• restrict the import of goods and services
• regulate our society in detail

These policies will make us all worse off.  The poor will suffer most.  No other party, and only a tiny minority of closed communist societies, is trying to do this.  In the end, the policies stifle natural and fundamental human aspirations to better our condition and that of succeeding generations.

MORE TAXES FOR ALL
The Australian Greens' Taxations Policy

NEW TAXES OR TAX INCREASES (POLICY SECTION REFERENCE)

1. Increased income tax rates (3.3.2)
2. New Consumption tax with multiple rates (3.3.8)
3. Increase capital gain tax (3.3.9,3.3.10)
4. Higher Fringe Benefit tax (3.3.3)
5. Eliminate salary sacrificing (3.3.3)
6. Introduce estate duties [including family home] (3.3.11)
7. Introduce gift tax (3.3.12)
8. Higher Medicare levy with progressive rates (3.3.15, 3.3.16)
9. Eliminate Private Health Insurance rebate (3.3.18)
10. Increased taxations of superannuation(3.3.19, 3.3.20)
11. Tax family trusts (3.3.14)
12. Increased company tax to 33% (3.3.21)
13. Tax on franked dividends (3.3.22)
14. Carbon levy (3.3.24)
15. Increased timber royalties (17.1.8)
16. Tax equivalent on non recycled paper (17.1.8)
17. Tax bottles and containers (17.1.7)
18. plastic bag levy (17.1.7)
19. private transport user tax (2.4,2.5)
20. Tax on batteries (7.1.12)
21. Increased tax on rental property (3.3.28)
22. Mining environmental levy (15.1.6)
23. Nutrient pollution tax (3.3.25)
24. Tax on fossil fuel usage (3.3.25)
25. Tax on water pollution (3.3.25)
26. Tax on soil pollution (3.3.25)
27. Tax on air pollution (3.3.25)
28. Tax on timber use (3.3.25)
29. Tax on use of ocean (3.3.25)
30. Tax on use of freshwater (3.3.25)
31. Tax on mineral use (3.3.25)
32. Tax on land sites according to land value (3.3.25)
33. Tax on electromagnetic spectrum assets (3.3.25)
34. Tax on petroleum (3.3.25)
35. Higher taxes on ecologically damaging industries 3.3.27)
36. Currency transaction tax (3.3.36)
37. 33 % tax surcharge on high corporate salaries (3.3.31)
38. Pay-roll tax to fund employee entitlements (4.3.25)
39. Landfill taxes (16.2.3)
40. Increased environmental charges and fines (16.2.3, 16.2.8)

TAX ELIMINATION OR REDUCTIONS (POLICY SECTION REFERENCE)

1. GST (Replaced with consumption tax) (3.3.8)
2. Cut tax on bartering or black market (3.3.29)
3. Increase tax-free threshold (3.3.31)
4. Tax cut for non-frequent flyers (3.16)
5. Eliminate Higher Educations charge (2.18)

Celebrating our Natural Heritage

An Address to the Queensland Rural Network Annual Conference
Heritage and Heroes,
Warwick, 11 September 2004

INTRODUCTION

Thank you for the opportunity to be a part of this conference, and what a great conference title and theme:  "Heritage and Heroes".

Poet Dorothea McKellar is a part of our cultural heritage, and 100 years ago she was writing about our "Natural Heritage" -- our environment.  In the poem "My Country", she wrote:

I love a sunburnt country
A land of sweeping plains,
Of ragged mountain ranges,
Of drought and flooding rains.
I love her far horizons,
I love her jewel sea,
Her beauty and her terror --
The wide brown land for me!

And the third verse:

Core of my heart, my country!
Her pitiless blue sky,
When sick at heart, around us,
We see the cattle die --
But then the grey clouds gather,
And we can bless again
The drumming of an army,
The steady, soaking rain.

In this poem, McKellar acknowledges and celebrates Australia's environment as diverse, with climate extremes -- and note that she wrote of "sweeping plains".

Her experience was of the countryside of north-west NSW around Gunnedah 100 years ago -- but when I read the poem, I think of north-west Queensland and the Mitchell Grasslands.

It is my experience that, over recent decades, environmental activists have sought to redefine what is understood by our natural heritage.  In last week's Land newspaper, Senator Bob Brown from the Australian Greens was reported as saying that his vision for Australia's agricultural landscape was one which was "evergreen, harmonious and teeming with life".

Planting trees, taking water off irrigators and being organic are considered "good for the environment".  But I will suggest that this approach has some major flaws, shows an ignorance and disregard for the bigger global issues and prevents us from celebrating our natural heritage and Australian agriculture's many significant achievements over recent decades.

In my 30 minutes I will focus in on three issues to illustrate this point:

1. I will briefly touch on tree-clearing in Queensland,
2. Then consider claims that the Murray River is dying, before
3. Looking at global population trends and the need over the next 100 years to produce more food from less land.

1. TREE-CLEARING IN QUEENSLAND

The outlawing of broad-scale tree-clearing was a key Queensland State Government election commitment.  The message from the government to farmers protesting against the new legislation has been to stop whingeing because the Government has a clear mandate.

But what if the election mandate was based on misinformation?  What if forest cover has actually been increasing in Queensland over the last decade?

I live in the marginal Brisbane seat of Indooroopilly and the propaganda on this issue in the lead-up to the Queensland Election was relentless.  The junk mail gave the very clear impression that broad-scale tree-clearing was turning Queensland into a treeless wasteland.  Indeed, this was the slogan for the media campaign driven by the Wilderness Society:  "Tree Clearing Turning Queensland into Wasteland".

Yet according to the State Government report, Land Cover Change in Queensland 1999-2001, there has been a 5 million hectares increase in the area classified as forest over the period 1992 to 2001.

Woodlands thickening and acacia forests are replacing once-open grasslands over approximately 50 million hectares of rangeland, thereby threatening grassland bird species and the productive management of our rangelands.

Interestingly, Queensland satellite data show that 26 per cent of all clearing in 2000-2001 was of land that had no trees in 1991.

Australian Aborigines were not forest dwellers.  They roamed over extensive grassland areas.  The end of Aboriginal burning and the introduction of sheep and cattle has resulted in forest encroachment beginning in the late 1800s.  Forest encroachment is well documented in the scientific literature.  It has, however, been ignored by the political process driven by activist campaigning.

2. CLAIMS THAT THE MURRAY IS DYING

"Water Dreaming" was the title of a feature in Melbourne's Age newspaper on 19 April 2003 in which Tim Flannery, director of the South Australian Museum, was reported as explaining how water is at the heart of our inability as Australians to reconcile ourselves with our land.  He also said that the Murray-Darling system is "the lifeblood of the continent" and a symbol of how we may be losing that war -- "The river is dying, trees that have been growing for 300 years are now pegging it because of the poor and declining water quality.  The loss of biodiversity in that river, the salinisation;  it is clearly unsustainable."

I came to the issue a few months later -- in July last year.  At that time, the Wentworth Group, of which Tim Flannery is a member, was asking all irrigators to give up 10 per cent of their water allocation for the "dying river".  The total amount of 1,500 gigalitres (3 Sydney Harbour equivalents) was worth approximately $1.8 billion.

The Australian Greens -- the party that may hold the balance of power in the next federal parliament -- are now asking irrigators to give up double this amount without a cost-benefit analysis or a plan or explanation as to how this will actually benefit the environment.

When I came to the issue last year, I looked for the evidence to support the claims of declining water quality, declining native fish stock and dying red gums.  I discovered junk science supporting predetermined agendas.

Last year the CSIRO Website was claiming that "salt levels are rising in almost all of the Basin's rivers." The reality is that salinity levels have reduced over the last two decades, particularly at the key site of Morgan where the levels have halved.  Morgan is just upstream from the off-takes for Adelaide's water supply.

Despite repeated claims that other water quality indicators are also deteriorating, official statistics indicate that nitrogen, phosphorus and turbidity levels are stable and generally consistent with a healthy river system in the context of inland Australia.

Red gum forests in Victoria and New South Wales are generally healthy.  Indeed, the largest forests are recognized as internationally significant wetlands because of their high biodiversity and because they regularly support very large colonies of water birds.

Despite propaganda that dryland salinity and rising water tables are destroying agriculture and the environment in the Murray-Darling Basin, the region celebrated a record wheat harvest last summer.

Murray cod was listed as vulnerable to extinction in July last year on the basis there had been a 30 per cent decline in numbers over the last 50 years.  The Australian newspaper ran a story titled, "For cod's sake, Murray needs stronger flow" (July 5, 2003).  But there are no data to support the claims of declining Murray cod numbers.

The most widely quoted source on native fish status in the Murray-Darling Basin is a 1995-96 NSW Fisheries survey.  The report's principal conclusions include the statement that:  "A telling indication of the condition of rivers in the Murray region was the fact that, despite intensive fishing with the most efficient types of sampling gear for a total of 220 person-days over a two-year period in 20 randomly chosen Murray-region sites, not a single Murray cod ...was caught."

A local Murray River fisherman's retort to the scientist's declaration that they caught no fish goes something along the lines, "The scientists, although having letters behind their names, spending some $2million on gear, and 2 years trying, evidently still can't fish."

In short, in the same regions at the same time that the scientists could catch not a single Murray cod, the commercial harvest was 26 tonnes.

The Environmental scientist sector is currently operating well below the standards of accountability that have been established and are enforced for other sectors.

Metropolitan Australia gets upset about "children overboard" and WMD -- but turns a blind eye when it comes to whopping lies from environmental activists.

3. FEEDING THE WORLD

The world's population has doubled over the last 40 years.  Renowned environmentalist Paul Ehrlich predicted in 1968 that, as a consequence of the rapidly increasing population numbers, "The battle to feed all of humanity is over.  In the 1970s the world will undergo famines -- hundreds of millions of people are going to starve to death."

This didn't happen.  The world's farmers managed with the help of technology -- fertilizers, pesticides, irrigation and new varieties -- to produce twice the amount of grain and oil seed from the same area of land.  We now feed twice the number of people from essentially the same land area, 1.5 billion hectares.

The UN predicts that population will grow by another 3 billion and start to plateau at about 9 billion by 2050.  So we have about 3 billion more mouths to feed and bodies to clothe over the next 50 years.  That is a lot of people;  2.98 billion more than the current population of Australia.  Furthermore, people in the developing world are getting richer and eating better -- in particular, more meat and dairy.

The significant growth in demand for food because there are more people, and also because they are eating better, will put intense pressure on the world's natural resources over the next 50 years.

People who really care about the environment should be looking to back efficient farmers -- farmers who can produce a lot of food from the smallest area and with the least amount of water and pesticide.  Thinking globally and acting locally, environmentalists should be looking to back the world's most efficient farmers.

On a tonnes per hectare basis, Australian producers have long reigned supreme.

But I don't know how often I have heard members of our supposedly educated elite say "but we simply shouldn't grow rice and cotton and sugar in Australia because we don't have the water".  Yet according to the World Resource Institute, Australia has 51,000 litres of available water per capita per day.  This is one of the highest levels in the world, after Russia and Iceland, and well ahead of countries such as Indonesia (33,540), the United States (24,000), China (6,000) and the United Kingdom (only 3,000 litres per capita per day).

Furthermore, according to the Federal Government's Australian Water Resources Assessment 2000, we divert only five per cent of the average annual national runoff.  So, effectively, 95 per cent of the rain that falls in Australia is for the environment.

We cultivate approximately 6 per cent of the land area of Australia to crops and sown pasture and this area has remained stable since the early 1980s.

So we:

1. Use 6 per cent of our land mass,
2. Less than 5 per cent of the rainfall that falls in an average year,
3. Have the most efficient farmers from a production perspective in terms of tonnes per hectare and water use efficiency.

And yet everyone seems determined to take water and land off our farmers!

Australia contributed approximately 14 per cent of the wheat traded globally last financial year.  Rice production in the Murray-Darling Basin over the last 10 years was enough to feed almost 40 million people a meal each day, every day of the year.

Interestingly, most of our primary industries are concentrated in southern Australia.  Not because this is where we have most suitable land or water -- most water falls across northern Australia and there are fertile flood plains in the north -- but because most water infrastructure has been developed in the south.

The Murray-Darling Basin covers 14 per cent of the land mass of Australia and produces 41 per cent of the national output from rural industries.

I don't necessarily want to see any more land cultivated or any more water infrastructure developed, so I say let's back our efficient and sustainable producers where we already have the infrastructure.

Don't keep insisting they give up water allocation -- just because it makes those with narcissistic tendencies feel more righteous.

IN SUMMARY

Some months ago, I gave a lecture to university environmental science students on the "Burden of Proof in the Environment Sphere".  My key message was that proof or evidence appears to be increasingly unnecessary as scientists increasingly operate on the basis of belief.

Evidence is information establishing fact.  Belief is trust and acceptance of a received theology.  It is the latter -- acceptance of the belief system that underpins environmental fundamentalism -- which is increasingly underpinning public policy decision-making in Australia.

I have noted that while environmental campaigners often express great concern over a problem, they often also seem deeply committed to the continued existence of the same problem.

Theirs is a pessimistic mindset and a determination to preach doom and gloom regardless of the real state of the environment.

There is a need to reject this approach.  If we walk around with our eyes wide closed to the facts of the matter we risk bumping into things and falling down flights of stairs.  We risk wasting time and effort on phantom issues while real and pressing problems go ignored.

Boxing at shadows can be exhausting -- and it achieves nothing.

We need to start acknowledging that we really do have a lot to celebrate.

1. Australian agriculture has the smallest footprint in the world and therefore is arguably the most environmentally friendly -- in terms of both yield per hectare and megalitre of water per tonne of product.
2. The hard data, the evidence, indicates that key environmental indicators show general improvement.  Australian agriculture is generally reducing, not increasing, its impact on the Australian landscape.  Forest cover is actually increasing in both Queensland and nationally.  Water quality is generally improving, including in the Murray.  There have been no species extinctions for over 20 years and Koala numbers are increasing to such an extent that the Victorian government is developing a hormone-based contraception control plan.
3. There is an economic opportunity and a moral obligation on Australian farmers to stay efficient as the world's population both increases and gets richer, seeking more resource-intensive food.

We need modern high yielding agriculture, including biotechnology.  Biotechnology/GM food crops offer the next big potential efficiency gains and pesticide saving -- yet our pseudo-environmentalists are even rallying against this.

In Australia, only the cotton industry has access to biotechnology because the first GM cotton variety was introduced before the Greenpeace anti-GM campaign.  The campaigners conveniently ignore cotton as a source of home-grown GM vegetable oil -- so they can invoke the precautionary principle.

In Sydney last year, Greenpeace re-launched its True Food Guide.  The big names of the Australian food scene attended the launch where Margaret Fulton declared that she hoped to keep Australia free from GM food and thus our food "safe to eat for my children, grand children and great grandchildren".  Never mind that the takeaway down-the-road was probably selling fish and chips cooked in cotton seed oil.

IN CONCLUSION

I love a sunburnt country,
A land of sweeping plains,
Of ragged mountain ranges,
Of drought and flooding rains,

And I salute Australian farmers, and farmers all over the world, for the progress they have made since Dorethea McKellar penned "My Country" in 1904.

Their history, our history, has mostly been one of continuous improvement.  Sure, mistakes have been made and environmental disasters have happened.  But they have mostly now been fixed or are being fixed.  The evidence is clear -- key environmental indicators are trending in the right direction.

I also salute the technologists.  The plant breeders and irrigation specialists and developers of herbicides -- that have freed us from the burden of manually weeding the fields.  Thanks to modern high yielding agriculture we now have a capacity to produce double the amount of food from the same area of land.  This means we can feed the world while protecting wild places -- our natural heritage.

Farmers and technologists -- you are my heroes.

Thank you.