Rachel Carson: too successful for her own legacy

Rachel Carson was born on May 27, 1907.  If she were still alive, she would be 100 years old today.

Many claim her as founding the modern environment movement.  Her work also had a direct influence on government.  The US Congress went on to pass the National Environmental Policy Act, establish the Environmental Protection Agency, and ban DDT based on her activism.

Before Rachel Carson became an activist she was a writer.

She was just 10-years-old when her first story was published in a children’s literary magazine.  She read widely, including the English Romantics, and was influenced by their belief in the concept of "the balance of nature" and "pristine wilderness".

A zoology professor urged her to major in biology rather than English at Pennsylvania College for Women, today known as Chatham College.  She was later to say that science, in particular marine biology, also gave her "something to write about".

She never married, or completed the PhD she began at John Hopkins University in marine biology.  Her first job was as a junior aquatic biologist at the Bureau of Fisheries where she was soon moved into communications and within 10 years was editor-in-chief of all the agency’s publications.

In 1951, still at the Bureau, her second book the The Sea Around Us was published and she became an overnight literary celebrity when it was serialised by the New York Times.

Her fourth book, Silent Spring, published in 1962 was also serialised by the newspaper.  It combined Rachel Carson’s passion for writing and nature, with her growing hatred of industrialisation.  The book was written to alert the American public to the environmental and human dangers of the indiscriminate use of pesticides and it also captured the imagination of President John F. Kennedy.

The book became a best seller.

In the same way people like Al Gore and Tim Flannery are today warning of a climate crisis, as far back as 1945 the Reader’s Digest was publishing Rachel Carson warning of the dangers of pesticides, particularly DDT.  She wrote that the pollution of the environment through ignorance and greed was the ultimate act of human arrogance.  She turned the widespread use of DDT into a moral issue in the same way Al Gore has turned global warming into a moral issue, including for the US government.

Like Al Gore, Rachel Carson gave testimony before congress.  She claimed that public opinion was being ignored and government must take responsibility for the damage from the widespread use of toxic chemicals.  At that time the Senate Committee on Commerce was hearing testimony on the Chemical Pesticides Coordination Act which would require labels to tell how to avert damage to fish and wildlife.

She had no institutional affiliation and had no scientific publications in the area of chemical toxicology but she galvinised public and government support for more controls on the use of chemicals.

Rachel Carson died of breast cancer on April 14, 1964, aged just 56, and before much of her work had its real impact.  In 1980, she was posthumously awarded the highest civilian honour in the USA, the Presidential Medal of Freedom.  The same year Time Magazine published a feature entitled "The Poisoning of America" claiming that "Of all of man’s interventions in the natural order, none is accelerating quite so alarmingly as the creation of chemical compounds".

Recently, with the approach of the centenary of Rachel Carson’s birth, US Senate Democrats planned a resolution to honour her legacy, but Republican Senator Tom Coburn, a practising Doctor and campaigner for the use of DDT in the fight against malaria in Africa, scuttled this.

The senator has said that Rachel Carson used junk science and that her "warnings about environmental damage have put a stigma on potentially lifesaving pesticides" like DDT.

In 1962, the same year that Silent Spring was published, Carlos Alvarado and L.J. Bruce-Chwatt ¹ in Scientific American wrote of the hopeful outlook for the control of malaria, that during the last 15 years "modern methods" have cut the number of cases of malaria worldwide from 350 million to less than 100 million with complete eradication achieved in several areas including the USA.  At that time the World Health Organisation was aiming for the total eradication of the disease from the whole human population.

But Rachel Carson’s campaign cut across this effort.  She advocated that mankind seek to live in harmony with "Mother Nature" rather than to seek to conquer her.

Had Rachel Carson been less successful, had her books and her activism resulted in the introduction of more controls on agricultural chemicals, without the complete banning of DDT in the US, her ultimate legacy may have been a better one.

FOOTNOTES

1. Malaria, by Alvarado and Bruce-Chwatt is in a special anthology of Scientific American articles entitled The Insects selected and introduced by Thomas Eisner and Edward Wilson published by W.H. Freeman and Company, 1977.

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Dredging Lake's Political Barrage

I was in Adelaide a couple of weeks ago and drove over to Lake Alexandrina.

The lake is part of a huge lake system covering some 86,000 hectares at the bottom of the Murray River.

While the dams at the top of the Murray-Darling are very low -- or basically empty -- there was plenty of water in Lake Alexandrina.

Taking a drive around the western perimeter of the lake, the countryside was green, and I was surprised by the extent of new housing development.  There is also a new marina on Hindmarsh Island.

I visited the town of Wellington, where there has been some talk about a new weir to save water for Adelaide.

At Wellington, the Murray River enters the large lake system where some estimated evaporation in an average year exceeds 800 gigalitres of water -- that's 800,000 megalitres!

When Charles Sturt sailed down the Murray in 1830 he considered Wellington the river's mouth.

It took him two days to get across Lake Alexandrina and then he couldn't get his boat over the sandbars.

There are still sandbars at the bottom of the lake system, except that now there is a dredge working to maintain a narrow channel.

South Australians use the "blocked Murray mouth" as an excuse to call for more water complaining irrigators in NSW and Victoria are taking all their water.  Never mind that there was no deep channel at the bottom of the lake system in 1830 -- long before irrigation.

In fact, without the water infrastructure build for irrigation, including the Dartmouth and Hume dams collecting runoff from the Snowy Mountains, there would have been no water flowing down to South Australia given the severity of the recent drought.

If a weir does go in at Wellington, it will be interesting to see if anything is done about the large network of barrages build at the southern end of Lake Alexandrina.

The barrages were built in the 1920s to stop freshwater from the Murray potentially flowing out to sea.

If South Australia was fair dinkum about more water for the "Murray mouth" it would dismantle the barrages and let water flow out the narrow entrance.

But, if the barrages were removed, the lakes might become salty and that would affect the many irrigators growing various crops around the lakes.

But if more farmland ends up as housing estate and marina, the new residents might demand the barrages be dismantled anyway, so they can catch saltwater fish species in what some now consider an artificially fresh evaporation basin.

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GM foods offer a rosy future

Penicillin wouldn't exist if we had the same attitude to pharmaceuticals as we do to genetically modified food.  One of the arguments against GM food is that genetic engineering is somehow "unnatural".  Yet creating antibiotics to take as medicine is just as "unnatural" as manipulating the genes of plants to produce food.

Penicillin has dramatically improved the quality of life of the people who are lucky enough to have access to it.  GM food could have the same beneficial impact.  GM crops need less pesticide, use less water and require less fertiliser than conventional crops.  GM food can make up for the vitamin deficiency of the world's malnourished.  While the use of penicillin is taken for granted, growing GM crops is prohibited in Victoria.

What is "unnatural" is in the eye of the beholder.  There's nothing unnatural about using science and human ingenuity to make our lives better.  What would be unnatural is if we denied ourselves the advantages of science because of an unfounded concern about the unknown.

The State Government's ban on GM food will expire at the beginning of next year.  Quite appropriately, the Government has announced that before a decision on whether the ban will continue or be lifted, there will be public consultation.  That consultation will reveal two things about the GM debate.

The first is the widespread misunderstanding about the subject.

The second is that much of the resistance to GM food is not based on science.  Instead, it is the product of opposition to multinational companies and their role in the supply and marketing of GM technology.

Despite the ban on GM crops, we already consume genetically modified food.  Thirty-five per cent of the vegetable oil consumed in this country is from GM cottonseed, most of which is grown in Queensland.

GM technology doesn't threaten Victoria's clean and green image.  One of the motivations behind the original GM ban was the concern that if GM crops were grown in the state, Victorian food exports to non-GM countries would be threatened.  The reality is that both Canada and the United States have GM crops and none of their markets has been affected.

In other countries, both organic and GM crops are cultivated and marketed successfully.  All the evidence is that the consumers actually like having the choice between organic food, GM food and food grown as it is now.

The claim that GM organisms might escape and infect non-GM animals and plants is scare-mongering.  Sensible precautions are necessary when growing GM food.

Opponents of GM crops protest that GM technology is a profit-driven enterprise.  There's one simple answer to that accusation.  Of course it is.  All food production is profit-driven.  Dairy farmers don't produce the milk that we pour on our morning cereal out of the goodness of their hearts.  GM is a big business and developing GM technology is expensive.  Naturally anyone who invests in GM wants to make a profit.  The search for profit encourages innovation.  The profit incentive encouraged the great figures of Australian agriculture such as H.V. McKay who invented the Sunshine Harvester and William Farrer who developed Federation wheat.  Thanks to Farrer's wheat-breeding discoveries, the yield from the national wheat crop at the beginning of the 20th century was more than doubled.

Another complaint is that many patents for GM technology are owned and controlled by "multinational agribusiness companies".  This is true -- but it's irrelevant to the question of whether GM crops should be grown in Victoria.  Farmers themselves are in the best position to know what is in their own best interests.

The patents to the computer software packages used by farmers to manage their business are also owned by multinational companies.  No one is suggesting that farmers should not be allowed to use these computer programs.

Our farmers would not be among the world's best if the only technology they had access to was that owned by other Australians.

Victorian Labor MP Tammy Lobato has warned that the introduction of GM crops "would mean the end of agriculture as we know it".  And she's right.  Agriculture is continuously changing and every year the process of farming is different from the year before.  GM technology is an improvement that should be welcomed -- not feared.

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Single desk monopoly has to go

Many Liberal MPs bemoan the failure of Malcolm Fraser's government to reform the Australian economy in the late 1970s.  A key example is Fraser's failure to deregulate airlines, instead sponsoring a cosy duopoly for TAA and Ansett that made flying across Australia as expensive as flying across the world.

Wheat deregulation has become the two-airline policy of the Howard Government.  Like the two-airline policy there is no economic or national interest justification for the continuation of a single desk for wheat.  The decision is purely political, the protection of powerful vested interests, in this case the discredited AWB and its political partners, the National Party.

A single desk is an anathema to the principles and benefits of a free-market economy.  It protects vested interests at the expense of Australia's broader economic interests.  And the AWB has already demonstrated it is not up to the job by corruptly selling wheat with kickbacks to Saddam Hussein and now trying to breach sanctions against Iran.

Why should wheat growers be any different from cattle producers, dairy farmers or horticulturists who export successfully without a single desk?  Only full deregulation of wheat exporting fits the idea of a government committed to free market principles.  No minor tweaks, such as leasing out the single desk for three-year terms, can be justified -- especially as this model will guarantee AWB retains the desk.  In no other industry are sellers forced to sell to a single exporter.

One of the ironies of this whole debate is that all wheat growers who export also profitably grow barley and canola for export without a single desk.  Whether wheat producers are compared to manufacturers or to other farmers, no case can be made that wheat is exceptional and merits exceptional treatment.

What would be the reaction if all the small exporters selling their wares via the internet were forced to deliver their goods to a publicly-listed export company?  These are small businesses not much different in size to a viable family farm, successfully exporting all sorts of things, from toys to computer modems.  And there are countless examples of small Australian enterprises selling their products through myriad distributors who then undertake the exporting.  There is no special case for wheat.

Most wheat growers may want to retain a single desk but it has never been demonstrated that most exporting growers want the single desk.  Much of the wheat grown in Queensland, New South Wales and Victoria is consumed in Australia.  By contrast, most West Australian and South Australian wheat is exported.  Yet the biggest push to retain the single desk is coming from Queensland and NSW growers, particularly those in National Party seats.

It is morally wrong to force exporting wheat growers to sell their wheat into a national pool if they do not want to.  Industrial relations reform is not popular but it is a vital economic reform.  The unions don't like the reforms but the union movement is a constituency of the Labor Party and were always going to oppose the reforms.  Yet even if business was critical, as it was with the introduction of the GST, industrial relations reform was the right thing to do.  But what is the difference with wheat marketing?

The test is not whether some wheat farmers support a single desk.  The test is whether it is the right thing to do.  Failure to act on wheat marketing brings to mind the potent attacks by Prime Minister John Howard on his predecessor Paul Keating as beholden to vested interests.  Howard was initially elected on the slogan "For All of Us".  This slogan is a repudiation of special interests in favour of national interests.  In the case of wheat, the broader and much more important issue is the merit of policy, not the level of opposition by special interests.

In light of the unambiguous fact that the single desk for wheat creates a government-sanctioned monopoly, it is surprising the only voice within the parliamentary party supporting deregulation is Wilson Tuckey's.  Just because Tuckey is easily dismissed by many of his parliamentary colleagues is not a reason for those with economic reform pretensions to go missing from this debate.  Tuckey is right on this and should be supported.

It is a sad state of affairs when reformers such as Peter Costello, Nick Minchin and Ian Macfarlane have only Tuckey arguing the need for comprehensive deregulation of wheat.  Where are the young guns of economic reform to demand this anachronistic policy failure is removed?  History is watching the Liberals on the single desk.

Time for wheat to cut against the grain

Wheat exporting needs reform.  Restricting exports to the discredited AWB is outmoded and against the national interest.

The wheat regulator could develop transparent and sound principles for export which ensure wheat growers are paid and then licence exporters to all who meet the stringent criteria.

Only this action accords with the principle of a free market economy.  Only deregulation will give wheat growers the same choice of who to sell their product to as every other farmer, manufacturer, shopkeeper and business has.

The Australian wheat industry suffers from a lack of innovation, poor infrastructure investment, and no incentives to develop farm-based economies of scale.

Recent research on what wheat varieties are required by wheat buyers, compared to what Australia grows, shows a failure to adapt to the changing needs of major customers.  The US and Canada have not missed this opportunity.  This failure to innovate can be laid squarely at the feet of the single desk.

Many economic studies have determined that a single desk is of no benefit to Australian wheat growers or to the Australian community.

Even a recent report commissioned by AWB itself fails to identify any price premiums received by growers from the operation of the single desk.

In the most recent reviews and polls on the single desk, at best only 10 per cent of growers participated.  With 90 per cent either not motivated, warned off or just too busy to participate, there is the real risk of ill-informed, uneconomic producers dictating their views at the expense of the viable growers.

Why is wheat regarded as special but dairy, beef, sheep meat and wool, not to mention horticulture, are all regarded as capable of exporting without a single desk?

The answer lies in the continued efforts of the AWB in seeking to convince growers into falsely thinking AWB's interests are the same as growers.

The Nationals have hitched their wagon to the single desk even though less than 1 per cent of Nationals voters are wheat growers.  Liberals have allowed themselves to be spooked by the Nationals' table-thumping.

The solution to the political mess in the Coalition over wheat export requires leadership, principle and action.

Bad policy needs to be recognised as such and removed.  Political considerations are always hard to overcome but with careful application they can be.

With wheat, why are all the proposed solutions about keeping a single desk?

To smooth the transition to a deregulated wheat market, there are many choices available.

There could be a wheat plan that assists small, unprofitable growers.  Or there could be services offered to wheat growers to help them find more profitable varieties of wheat and better methods of growing it.

If the government really wanted to help wheat growers, it could inject major funds into upgrading rail and receivals infrastructure to reduce the enormous cost it takes to bring the wheat to port.

Australia has benefited from deregulation of the economy across many sectors.  Wheat farmers should be wondering why they are not allowed to benefit from a similar reform.

The answer, as always, is politics.

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Give MacBank a break

Tiger Woods, J.K. Rowling and Allan Moss, the chief executive of Macquarie Bank, have much in common.  They manage global operations, they face fierce international competition, and they are very good at what they do.  And each of them is extremely wealthy.  The public doesn't seem to have any problem with the financial benefits that accrue to the world's leading golfer and a writer of children's books.  But when it comes to a discussion of the pay packets of directors at the "millionaires factory" we lose all sense of perspective.

In response to the $33 million paid to Moss, a national welfare rights group labelled the amount as "excessive", "unjustified" and "harmful to the overall social fabric to our whole society".  Last year Rowling reportedly earned three times more than Moss.  As yet the author of Harry Potter has escaped accusations that her royalties are wrecking the social fabric.  The welfare rights group didn't comment on the fact that the astronomical salaries and bonuses of Macquarie Bank's employees generate astronomical tax bills that pay for schools, hospitals and social security benefits.

Executives of public companies are singled out for special treatment because they are symbols of "capitalism" in a way that sportsmen and writers are not.  If the way that Macquarie's executives were treated this week is the shape of things to come, it's no wonder that private equity is becoming so popular.

In Australia, if someone is lucky enough to be born with particular athletic prowess or artistic talents we have no objection to them becoming rich.  Indeed, governments provide taxpayer funding and invent tax schemes so that they can make even more money.

Australians are uneasy when individuals use capitalism to enrich themselves, and the company that they work for, and the company's shareholders.  We laud Woods winning 12 majors, but on the scale of social benefit created he simply doesn't rate against Macquarie Bank.  In the decade since it was listed Macquarie has generated at least $40 billion of shareholder value.  Admittedly some of this value is the product of monopoly profits, but a fair degree of intelligence and skill has been applied as well.

And it is only when Macquarie's deals go wrong, such as they have done recently in the case of Qantas and Alinta, that the degree of risk to which the bank is exposed becomes apparent.  Making a $1.4 billion profit is a little bit more complicated than ensuring everyone turns up for work on time.

It isn't only the bank's executives who benefit.  The superannuation funds that invest the retirement savings of average Australians have profited mightily from the work of Moss and others.  Thousands of families have a stake in the continued success of Macquarie.  Across the economy the efficiencies imposed by the bank on the assets it controls result in lower costs for business, and ultimately lead to a higher standard of living.

A double-standard is applied between billionaires and mere millionaires.  Billionaire property developers for whom $33 million is small change are showered with honours and considered "nation builders".  Yet the millionaires who have founded one of Australia's only world-class companies are pilloried in the press.  On Tuesday, on talkback radio, the Prime Minister could only provide a half-hearted defence of Macquarie's achievements.  One can only imagine the outrage if he had instead said:  "Yes, $33 million is a lot of money -- isn't capitalism great! -- and that's why I am proud to lead a party committed to free enterprise".

The public reaction to Macquarie's salaries reveals a great deal about our attitudes to wealth and business.  Many Australians are afraid, and even ashamed, of the financial rewards that come from hard work.  In Australia we can afford to be ambivalent about success.  The populations of China and India don't have that luxury.

It is emblematic that a few days before Macquarie Bank announced its record-breaking results, the ABC screened the publicly funded Bastard Boys, a blatantly political, anti-business diatribe that portrayed a world that was both familiar and comfortable.  Thankfully that world is almost gone.

For many Australians (including our politicians) the world of $30 million bonuses to company executives is very unfamiliar and very uncomfortable.  But it is a world we had better get used to.

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Ingrained prejudice

Many Liberal MPs bemoan the failure of Malcolm Fraser's government to reform the Australian economy in the late 1970s.  A key example is Fraser's failure to deregulate airlines, instead sponsoring a cosy duopoly for TAA and Ansett that made flying across Australia as expensive as flying across the world.

Wheat deregulation has become the two-airline policy of the Howard Government.  Like the two-airline policy there is no economic or national interest justification for the continuation of a single desk for wheat.

The decision is purely political, the protection of powerful vested interests, in this case the discredited AWB and its political partners, the National Party.

A single desk is an anathema to the principles and benefits of a free market economy.  It protects vested interests at the expense of Australia's broader economic interests.  And the AWB has already demonstrated it is not up to the job by corruptly selling wheat with kickbacks to Saddam Hussein, and now trying to breach sanctions against Iran.

Why should wheat growers be any different from cattle producers, dairy farmers or horticulturists who export successfully without a single desk?

Only full deregulation of wheat exporting fits the idea of a government committed to free market principles.  No minor tweaks, such as leasing out the single desk for three-year terms, can be justified -- especially as this model will guarantee AWB retains the desk.

In no other industry are sellers forced to sell to a single exporter.  One of the ironies of this whole debate is that all wheat growers who export also profitably grow barley and canola for export without a single desk.  Whether wheat producers are compared to manufacturers or to other farmers, no case can be made that wheat is exceptional and merits exceptional treatment.

What would be the reaction if all the small exporters selling their wares via the internet were forced to deliver their goods to a publicly listed export company?  These are small businesses not much different in size to a viable family farm, successfully exporting all sorts of things, from toys to computer modems.  And there are countless examples of small Australian enterprises selling their products through myriad distributors who then undertake the exporting.  There is no special case for wheat.

Most wheat growers may want to retain a single desk, but it has never been demonstrated that most exporting growers want the single desk.  Much of the wheat grown in Queensland, New South Wales and Victoria is consumed in Australia.  By contrast, most West Australian and South Australian wheat is exported.  Yet the biggest push to retain the single desk is coming from Queensland and NSW growers, particularly those in National Party seats.

It is morally wrong to force exporting wheat growers to sell their wheat into a national pool if they do not want to.

Industrial relations reform is not popular, but it is a vital economic reform.  The unions don't like the reforms but the union movement is a constituency of the Labor Party and were always going to oppose the reforms.  Yet even if business was critical, as it was with the introduction of the GST, industrial relations reform was the right thing to do.  But what is the difference with wheat marketing?

The test is not whether some wheat farmers support a single desk.  The test is whether it is the right thing to do.  Failure to act on wheat marketing brings to mind the potent attacks by Prime Minister John Howard on his predecessor Paul Keating as beholden to vested interests.

Howard was initially elected on the slogan "For All of Us".  This slogan is a repudiation of special interests in favour of national interests.  In the case of wheat, the broader and much more important issue is the merit of policy, not the level of opposition by special interests.

In light of the unambiguous fact that the single desk for wheat creates a government-sanctioned monopoly, it is surprising that the only voice within the parliamentary party supporting deregulation is Wilson Tuckey's.  Just because Tuckey is easily dismissed by many of his parliamentary colleagues is not a reason for those with economic reform pretensions to go missing from this debate.  Tuckey is right on this and should be supported.

It is a sad state of affairs when reformers such as Peter Costello, Nick Minchin and Ian Macfarlane have only Tuckey arguing the need for comprehensive deregulation of wheat.  Where are the young guns of economic reform to demand this anachronistic policy failure is removed?

History is watching the Liberals on the single desk.

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When reform has no bang and barely a whimper

What a difference a year makes.  One year ago, when Communications Minister Helen Coonan released the discussion paper which was to become the September 2006 media reform package, was also coincidently the same day that Apple's iTunes service released its first movie for download -- High School Musical, a movie apparently popular with the tween set.  iTunes has now sold 50 million TV shows.  Apple started shipping their Apple TV, a device which delivers content downloaded from the iTunes service to the family television, in March this year.

The frenzied media commentary which greeted YouTube's sale to Google in October for $US1.65 billion wasn't all hyperbole.  YouTube only opened for business a year prior, and, due to its popularity, it now plays a central role in modern political campaigns, public relations, and is at the centre of debate about copyright online.  No television program with aspirations of greatness can ignore the contradictory importance of YouTube -- success on the online social video networking site can mean enormous popularity, but also copyright infringement on a massive scale.

YouTube and iTunes are merely two of the largest services.  Video downloading services, in different shades of legality, have sprouted up rapidly over the last twelve months, and are injecting themselves into media consumption habits across the globe.  In 2004, an American study found that in the United States, consumers spent roughly 10 per cent of their leisure time online.  With the increase of applications and bandwidth since then, that number is no doubt higher.

There are few serious commentators on the media who doubt that in the near or at least foreseeable future, new media will be as popular, important and influential as the traditional print, radio and television triangle was in the second half of the 20th century.

On the one hand, change of this dramatic nature isn't new.  The history of media and technology is scattered with examples of disruptive, radical innovations.

Numerous technological innovations have altered the way we consume, produce and interact with media.  The transition in the 1960s and 1970s of magazine printing from the older rotary press to offset lithography dramatically reduced the cost of printing, resulting in the proliferation of hundreds of specialty publications, in contrast with the previously rather limited selection.

The history of popular music was shaped by the potent combination of the use of the FM band by independent broadcasters, and the emerging competition from television in the 1950s.  Vinyl recordings, tapes, CDs and MP3s -- and the devices they are played on -- have further altered our relationship with popular music, and the content of the music itself.

Similarly, entrepreneurs have altered patterns of media consumption with existing technologies with innovative new business models.  Charles Dickens serialised his novels in popular magazines, changing the nature and structure of his stories, and creating new market opportunities to great effect.  The practise of block booking, where film studios bundled multiple films together to sell to theatres, buttressed the Hollywood studio system, until it was prohibited by the Hollywood Antitrust Case of 1948.

The history of media is change, not continuity.

The dynamism of technological innovation couldn't be better contrasted than by the narrow approach taken by governments to media law and regulation.  It is a consequence of the inertia of the political process that major regulatory changes can be enacted perhaps once a decade.  When policy is made and reform is pursued it must be forward-looking enough to facilitate unexpected changes in the industry it is trying to regulate.  By this measure the government's 2006 media law reforms were a regrettable failure -- after ten years of promises to liberalise Australia's media regulation, the package passed in Parliament in October had no bang, and barely a whimper.

Minor adjustments to ownership rules, the introduction of two crippled "non-traditional TV" licences, loop-hole closing in anti-siphoning regulations, another delay of switchover to digital television -- it is only by force of habit that the package was referred to by commentators as "reform".  Where large regulatory decisions changes were made, they went in the opposite direction.  Regional and rural radio licensees ended 2006 staring down the barrel of a draconian array of new regulatory controls, designed to keep rural politicians on the air, rather than increase any level of local "diversity".

The federal government's reluctance to pursue any meaningful reform after such a long build up is most unfortunate.  The laws which govern Australia's media are a fragmentary web of protectionism and restriction.  It is hard to beat the Productivity Commission's characterisation of a regulatory framework that "reflects a history of political, technical, industrial, economic and social compromises.  This legacy of quid pro quos has created a policy framework that is inward looking, anti-competitive and restrictive".

These regulations rest on an outdated conceptual framework.  They assume that there is a fixed pie of media content and media outlets -- there can only be so many television or radio stations, for instance.  The regulatory framework then slices up that pie to a number of operators, and ensures they don't get in each other's way.

But this model is entirely unsuited to the contemporary media landscape.  Gone are the days when our consumption of news and opinion was constrained by the number of printers in the town, or broadcasters with licenses.  An infinite range of news and opinion can be now gathered at almost no cost from the Internet, produced by professionals and, increasingly, amateurs.

This new availability of sources requires us to look carefully at what we mean by "diversity".  The left-wing political critique of the 2006 reforms centred on the notion that a free market in media would necessarily result in media monopolies -- Australians ruled over by omnipotent media moguls, rather than their democratically elected politicians.  It's true that the vast bulk of media consumed by Australians is still clustered around these "traditional" owners -- Fairfax and News Limited have the lions share of online readership for Australian news sources.

But the measure of diversity should not be an analysis of what everybody is currently reading or watching, but what is available for their consumption, should they choose to investigate outside of the Murdoch, Packer and Stokes empires.  We should not only include sources like On Line Opinion, but also the Washington Post, Pravda, and the Borehamwood & Elstree Times.  Diversity is a question of available choice, not a question of how best to stop everybody reading Murdoch's tabloids.

This question about what constitutes true diversity pervades the debate over ownership regulation.  The reflections of former FCC chairman Michael Powell on a similar debate about reform in the United States could easily apply to Australia:

Here's the truth:  the ownership debate is about nothing but content ...  [The ownership rules] became a stalking horse for a debate about the role of media in our society.  ...  It was really an invitation for people with particular viewpoints to push for a thumb on the scale, for content in a direction that people preferred.

Luckily, little the government does will alter the inevitable migration of our media consumption to the Internet.  But retaining the byzantine regulations which we have inherited punishes consumers by both privileging and restricting the traditional media outlets which have, until recently, been protected from full exposure to the market.

There are a range of specific reforms that can be adopted.  Governments could take convergence seriously and being to harmonise regulations across networks -- the regulations that apply to radio broadcasting should apply to television broadcasting, which should also in turn apply to web broadcasting and podcasts.  Similarly, the use of the electromagnetic spectrum should be determined by the market -- who owns it, what technologies utilise it, how many television and radio stations are broadcast on it, and so on.

But the biggest change needed is philosophical.  There is no legitimate role for government in the entertainment business.  Consumers determine what they want to watch on television, listen to on the radio, or browse on the Internet.  The sooner policy-makers acknowledge this simple fact, the better off our media will be.

Go easy on regulation in carbon fight

Australian spending and regulatory measures for greenhouse mitigation fall under two categories:  subsidies by governments for carbon dioxide reductions and direct regulations.

In the budget, the $8000 subsidy for solar panels, costing $150 million a year for a very expensive electricity supply, was one of the most obvious money wasters.  It comprises part of Commonwealth annual spending earmarked for greenhouse mitigation estimated at $500 million, up from $184 million last year.  With the Green Buildings, Greenhouse Gas Accounting and other programs, Commonwealth spending would certainly exceed $650 million a year.

In addition, the states favour active industry policies promoting renewables.  As well as parading a moral superiority, these are designed to capture a share of the world market in energy efficiency, like winner-picking policies of the past.  NSW is spending $200 million and Victoria $106 million over five years.  Queensland has set aside $300 million from the sale of its electricity retailers.  Hence total state spending may add a further $100 million a year in real money.

The second category of expenditures is direct regulations.  These include requirements on consumers to source electricity from high-cost exotic renewables.  The Commonwealth's mandatory renewable energy target obligates consumers to use 9500 gigawatt hours of this electricity in 2010 (around 4.5 per cent of supply) at an annual cost of $380 million.  Queensland, Victoria and NSW have additional requirements.  Together, at maturity the four schemes will cost $843 million a year.

Other regulations include energy-efficiency requirements for domestic appliances.  Dominating these is the five-star energy saving requirement for housing.  This is over and above measures for solar power and adds between $7000 and $14,000 per new house, or $1 billion to $2 billion a year in aggregate.  The measure has the political merit of avoiding a voter backlash, since it falls only on the new-house buyer.

In total, the estimable expenditures and regulatory measures amount to $2.5 billion to $3.5 billion a year.  That is already equivalent to a greenhouse tax on stationary energy sources of perhaps $9 to $12 a tonne of CO₂ -- a far cry from the tax requirements of $120 a tonne estimated by the Stern report, but in line with some estimates of what is needed to meet Kyoto targets.

But the pressure for more will follow the report of the Prime Minister's task group on emissions trading later this month.  This will pave the way for a greenhouse emissions cap-and-trade policy or a new greenhouse tax.

Although such "economic" measures are preferable to the present hodge-podge of taxes, subsidies and regulations, their merit is lost if, as politicians seem to want, they supplement rather than replace those inefficient interventions.

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South Pole "keeping its cool" -- IPCC

The United Nation's Intergovernmental Panel on Climate Change (IPCC) has a mandate to deliver a comprehensive assessment of human-induced climate change every few years.

So, far this year it has delivered summaries of the first three parts of its Fourth Assessment Report, AR4.

The latest summary report, released on Friday, suggests agricultural practices that result in an increase in soil carbon content can help stop climate change.

While some of the headlines announcing the release of its first summary in February suggested the end of the world was nigh, the report was actually fairly undramatic.  It concluded that the world has warmed by 0.74°C over the past 100 years and that while temperatures at the Arctic have increased at almost twice the global average there has been no warming at all at the Antarctic.  That's right.  No global warming at the South Pole.

Furthermore, while Al Gore predicted a six metre rise in sea level in his documentary, An Inconvenient Truth, the inconvenient truth in the February summary from the IPCC was that sea levels are unlikely to rise by more than 59cm by 2099.

The next IPCC summary report, issued in early April, focused on potential impacts of climate change and suggested a significant loss of biodiversity by 2020 in some ecologically-rich sites including the Great Barrier Reef, Kakadu wetlands and alpine areas.

Last Friday the third summary report was released with a focus on how to combat climate change.  This report was released after exhaustive discussions in Bangkok involving scientists and bureaucrats from 120 countries.

The focus in this May report is on how to reduce greenhouse gas emissions such that severe climate change can be avoided.

I've always considered it somewhat pretentious to believe that humans can actually stop climate change given that the earth's climate has always change, but it's certainly worthwhile considering the various mechanisms possible to reduce atmospheric levels of carbon dioxide which are elevated as a result of the burning of fossil fuels.

Amongst a long list of regulatory options, the report suggests financial incentives and more regulation of agriculture including to maintain or increase soil carbon content and more efficient use of fertilisers.

So far the Australian government has focused on banning broad scale tree clearing to reduce carbon dioxide emissions, but this policy may have worked against increasing soil carbon content.  Indeed perennial grasses, not woody weeds, generally favour the build-up of soil carbon.

The Australian government's carbon accounting system may need to be expanded to consider the various ways in which carbon can be sequester on-farm if the latest IPCC recommendations are going to be implemented.

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Playing the cards casino has dealt

For 10 years Crown Casino has been a part of Melbourne, and for most of that time it has never been far from controversy.  It's difficult to think of anything else in Victoria that has been so controversial for so long.  The city is now a different place from that which existed before the casino opened.  Partly this has to do with the casino and partly it has to do with changes in things like shop trading hours and the times that we are allowed to eat and drink at restaurants.

Melbourne without Crown seems as old-fashioned as late-night Friday shopping.  Many of those nostalgic for a world without poker machines and the casino are actually seeking a return to a 1970s way of life.

However, it's undeniable that the casino and the almost unremitting spread of poker machines through our neighbourhoods have caused problems.  In many cases, those problems have been personal and family tragedies.

The State Government's budget is now so reliant on gaming taxes that it has a financial incentive to encourage people to gamble.  In fact, the Victorian Government cannot afford not to have people gamble.  What's more, the way that gaming taxes are collected means that they are highly regressive, so that the poor bear a relatively higher tax burden than the wealthy.

With hindsight Joan Kirner and Jeff Kennett would have done things differently.  In the early 1990s, it was bizarre to have Kirner as Victorian premier relying on shopping and gambling to provide the impetus for economic recovery.  It was a testament to the state's dire financial situation.

Kirner, as the premier who liberalised Victoria's gambling laws, should have appreciated the problem that exists when government regulates gambling while at same time seeking to raise as much money as possible from it.  Regulating tobacco and alcohol has the same sort of conflict.  If taxes on gambling, tobacco, and alcohol were abolished, we'd have better regulation.

For his part, Kennett should have ensured that the bidding process for the casino licence was transparent.  It is, however, interesting how times have changed;  these days few people seem to care that Labor has been just as reluctant as the Coalition to make public its arrangements with the casino operators.  For years after the casino opened, government ministers were unsure whether it was their job to regulate the casino or to promote it.  In 1997 it was quite understandable that Kennett was proud of the new casino and its role in the rejuvenation of Melbourne south of the Yarra, but many Victorians interpreted his enthusiasm as inappropriate spruiking for Crown.

Despite all of the mistakes over the past decade, whether Melbourne should have poker machines and a casino ultimately comes down to two simple questions:  Should individuals be free to choose how they spend their money and how they spend their time?  And is it appropriate that everyone is prevented from enjoying poker machines and casinos because a small percentage of the community will engage in these activities and do themselves harm?

No one is forced to gamble.  People visit poker machine venues and the casino for a variety of reasons.  Some people go because they've convinced themselves they can win, others go because they have nowhere else to go and some go because they are addicted.

For the vast majority, playing poker machines and gambling at the casino are enjoyable leisure activities.  When we allow people to make their own choices we allow them to make their own mistakes.

By all means we should assist those with gambling problems, but that assistance should not extend to affecting the choices of those who do not have a gambling problem.

Some argue that poker machines are so "evil" and the consequences of gambling addiction so awful that poker machines should simply be banned -- as Peter Craven did on these pages on Monday.  The problem with such a position is that prohibitions of this sort seldom achieve their purpose.  Also, there are many other pursuits that are not forbidden and which cause far more personal and social damage than gambling.  And then there is the broader issue of whether in a free society such bans can ever be legitimate.  Melbourne pays a price for its casino and its poker machines, but the price would be far higher if they were banned.

Telling someone what they can and cannot do "for their own good" is a dangerous business.  And just because governments are now more willing than ever to tell us how to live our lives doesn't mean this is a trend that should be encouraged.

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At last, a decision that holds water

The Bracks Government's greatest long-standing policy blunder has been to allow environmental activists to dictate water policy.

Environment Minister John Thwaites came to office baring a hairy green chest.

He cancelled long-standing plans to cater for Melbourne's water needs by damming the Mitchell River.

Not only was the project shelved but the area was made into a national park, designed to deny forever the river's water to a growing city population.

An apostle of the "we should use less" school, Mr Thwaites' legacy is the depletion of the dams supplying the city's water.

Among the reasons against a new dam is that it would cost a billion dollars.

Rather than spend that the Government has been putting out meaningless propaganda tracts like "A new dam will not create new water".

It has also introduced a multitude of regulations and subsidies to conserve household water use.

These include regulations requiring three-star showerheads, dual-flush toilets, backyard water tanks and subsidies for various water-saving appliances.  Collectively these amount to a mere hill of beans in restraining water use.

The Government has also commissioned endless reports, including grants to the 47 regional councils to develop water conservation plans for each council's own facilities.

None of these has offered any magic pudding on how to save water.

More people mean more water requirements.  And if we had our druthers, most of us would use more water per head for washing and gardening.

Of course, it is important that we pay the real cost of the water.

But 85 per cent of household water costs comprise the transport rather than the water itself.

So, even if the water itself was to treble in price, it would only mean a 30 per cent increase in costs at the tap.  This would deter some, but not very much, use.

It is now more than two decades since the commissioning of Victoria's last major dam, the Thomson.

With a population rise of 30 per cent, more water must be procured.

As industry and households in Melbourne use only 8 per cent of available supplies, this is not a difficult task.

Farmers are willing sellers at a price city users can afford.

Recurring droughts in Victoria mean we need a buffer.

The Government's true believers in global warming think this will further reduce Victoria's rainfall, making them doubly derelict in their inaction.

This week's Budget finally introduced some sanity.  It foreshadowed four options to boost Melbourne's water supply.

These include treating sewerage for use as cooling in the Latrobe Valley, a desalination plant, and harvesting Yarra stormwater.

Clearly these three options are there as face-savers.  They enable the Government, "after an exhaustive review", to adopt its only real and financially responsible option.  That's to bring water from the Goulburn River.  This, though inferior to the previously planned Mitchell, is at least realistic.

So the Government has abandoned the hippie solutions to water policy and come to its senses.  But not before the community has suffered avoidable hardships and costs from water restrictions.

Will any politician pay the penalty for the past policy disaster?  I doubt it.

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Gillard reverts to type

Practically Lathamesque is the best way to sum up the Labor Party's week.  One of the enduring memories of Mark Latham's brief and inglorious ALP leadership was his press conference denouncing the Australia-US alliance.  A few days later, standing in front of an American flag, he issued an almost complete retraction.

What Julia Gillard has achieved this week would do the former leader proud.  Announcing the details of Labor's industrial relations policy at the weekend, Gillard in effect said that she didn't care what employers thought of her policy.  She didn't apologise for the fact that while she had consulted the ACTU she hadn't bothered to talk to business.  Finally, for good measure, the potential deputy prime minister threatened companies that if they campaigned in favour of the present industrial arrangements they would suffer "injuries".

By the end of the week the long march back to sensible policy had begun.

Following the reaction from business, Gillard is now proposing to "fine tune" Labor's policy.  She would have realised that things were getting serious when even BHP Billiton, a company renowned for studious indifference to most things controversial, was roused to issue a statement of concern.

On Wednesday Gillard met representatives of the resources companies and engaged in "constructive discussions".  She even went so far as to acknowledge that the business community and the mining sector were generating "so much of the nation's wealth".  Labor's message at the week's end was very different from its message of three days earlier.  There was no retreat from the promise to abolish Australian workplace agreements, but the rhetoric had shifted.  Of course, there's nothing new in politicians changing what they say and how they say it.  That's what politicians do.  But in the case of the ALP's industrial relations policy, seldom has there been such a change on such a major issue in so short a space of time.  (The speed with which Labor went into reverse was comparable to the speed at which John Howard acted to force an apology from Liberal senator Bill Heffernan following Heffernan's remarks about Gillard's personal life).

The problem for Australian businesses is not Labor's policies, it is Labor's attitude.  Business might win this battle, but there is no guarantee of success in the war against those who believe Australia should return to a pre-1970s industrial relations system.

It is easy to change policies.  Changing ideology is more difficult.  The fear is that Gillard's initial reaction revealed what she really thought of business.  So far there hasn't been much of an indication from Gillard that she regards industrial relations as anything other than a zero-sum game -- either bosses win or workers win.  There's not much comprehension that these days when a mining company puts an electrician working in the Pilbara on an AWA and payshim or her $100,000 a year, both the company and the employee think they are getting a good deal.

On Wednesday ACTU president Sharan Burrow declared that "greedy corporations" should "back off' from criticising Labor.  Those comments were as helpful to Kevin Rudd as George Bush would be to John Howard if the US President told the Australian public to vote for the coalition because of its policies on Iraq.  The only thing the ACTU could do that would be worse for Labor would be for Greg Combet to announce that he looked forward to receiving the industrial relations portfolio in a Rudd government.

Invoking the image of "greedy corporations" might rally the troops at a Construction, Forestry, Mining and Energy Union rally, but it doesn't do much more.  It is thanks to "greedy corporations" that Australia's unemployment rate is at its lowest level in 30 years.  If the people who have a veto of the ALP's industrial relations policy really want to start a class war, it is not only business that should be concerned.

Latham's behaviour over the US alliance didn't cost Labor the 2004 election, and Gillard won't all by herself cost Labor the 2007 election.  But Latham's actions contributed to the creation of a perception, just as Gillard's have.

It is unfortunate that just as federal Labor was regaining a degree of policy credibility, its industrial relations policies undo all of its previous good work.

In recent months ALP shadow ministers have made more than useful contributions on issues such as the coalition's spending priorities, performance pay for teachers and the red tape burden for small business.  All of this is now forgotten.

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Privatisation of trains, trams a runaway success

One of the central policy decisions for the Bracks Government this year will be whether to continue the private operation of Melbourne's public transport.

While Public Transport Minister Lynne Kosky has given some indications that she opposes the Government regaining control of the system, it would be reassuring to have it confirmed.

The decision should be an easy one.  While there is still plenty of scope for reform, it is clear there have been improvements since public transport was privatised in 1999.

Patronage has risen strongly -- 37.6 per cent on trains and 25.5 per cent on trams.  In fact, some of the problems the system is now experiencing, such as overcrowding, are problems of success rather than failure.

Reliability and punctuality have improved, although more consistently in trams than trains, and 65 new trains and 95 new trams have been introduced.  Users have also had new services (an 11.4 per cent increase in the overall number of service kilometres).

A key feature is that commuters no longer experience the huge inconvenience caused by strikes and stoppages that historically plagued Melbourne's public transport.

While privatisation has not delivered the reductions in subsidy forecast by the bidders in 1999, it has not led to increased subsidies.  As the auditor-general commented in 2005, under privatisation "the cost has remained (and is expected to remain) relatively constant" -- quite an achievement compared with the rapidly expanding public sector in Victoria.

Yet despite these solid gains, some public transport activists are still calling for a return to public ownership.

This should not come as a surprise, as the debate around public transport has been riddled with red herrings for many years.

Too often public transport has been seen not as a transport option for potential customers, but as a social service structured to meet social needs.  It has been regarded as a means of providing jobs for its employees, mobility for the socially disadvantaged, or environmental benefits.

Too often in its life in the public sector, it has been the battle ground between competing interest groups, such as when the heritage and disability lobbies battled over the historic, but inaccessible, W-Class trams.

Too often it has been advocated by planning fanatics who see it as the panacea for urban sprawl and yet, at the same time, it has often been unable to commercially develop its property, or conduct routine maintenance efficiently, due to local "nimbyism".

For the foreseeable future, public transport will continue to play a major role in moving people.  While it is true that public transport's share of motorised trips has declined to about 8 per cent, it takes 70 per cent of trips to the CBD, with 55 per cent of journeys to work in the CBD by train.

The current train and tram franchises expire in November next year unless the Government gives notice by November this year that it wants to extend them.

As well as confirming the continuation of private train and tram operation, the Government needs to spell out whether it intends to have a negotiated renewal process with existing operators, or re-tender.

Given the degree of disruption in the public transport system in recent years, there is at least a reasonable argument to provide a short extension (three years) to the existing arrangements so that the performance of the incumbents can be tested in a more stable environment.  This will also enable the new ticketing system to be implemented without any other dislocation.

However, it is vital that tendering for the franchises must be periodically conducted to ensure that both commuters and taxpayers are getting the best possible value from their transport operators.

The government monopoly of train and tram operation continued uninterrupted from the 1920s to the 1990s, the seven decades leaving a legacy of declining service, recurring strikes, ballooning deficits and declining patronage.

By contrast, private operation has been given seven years and, while there are certainly many areas that can be improved, it is clear that overall it has been a positive.

The choice is clear:  Re-nationalise and return to the seven decades of decline;  persist with private operation and continue building a cycle of commercially driven growth.

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We need more people to help WA prosper

What is the major factor limiting Western Australia's continued prosperity?  It's not water, global warming, Canberra or even the OBE, but people.  The State needs people, lots of people who are willing and able to work.

The State has gone beyond full employment.  The unemployment rate now stands at 2.7 per cent -- a historic low.  Youth unemployment which was above 25 per cent seven years ago now stands at 6 per cent.  At the same time the proportion of the population in the workforce has been pushed to historic levels.

The pressure on the labour force is growing.  Vacancies are at record levels with the number of registered vacancies exceeding the number of people on unemployment rolls.  While the vacancies are largest in construction and mining, all occupations, businesses and locations are facing labour shortages.

This is not a temporary phenomenon, but a pointer of things to come.  We have entered a world where the key limiting factor is people.

The population bomb was a dud.  Fertility rates have declined sharply for decades in all but the most dysfunctional countries.  All countries, including Catholic Ireland and teeming China, are preparing for the day when their populations begin to decline.  Japan's population is already in freefall and most of Europe is on the edge of doing so.

Australia, while better off than most wealthy countries thanks to its high immigration levels, is already experiencing the effects of slowing population growth.  The workforce is ageing, becoming less mobile and less willing to work full time.  At the same time the flow of new entrants into the workforce is declining.  These trends are expected to accelerate over the next 50 years, leading eventually to a declining workforce.

While WA faces a slightly less-pressing population outlook than the nation as a whole, it confronts much greater opportunities and demands for labour.

We are now in the largest boom in the State's history.  The challenge for the State is to make the most of the boom and getting more people to the State is the key to doing so.

The main task is to ensure that as many long-term resource projects get built and are operating so that when commodity prices do fall and investment slows we have a large stock of working mines and processing facilities to keep the economy growing and the Government coffers full.

We also need to use the boom to build Perth as a resource hub for the region and beyond.  This is a real opportunity and challenge which offers the potential to both diversify the State's economic base and strengthen the mining and energy sector.

However, projects are already getting delayed and cost overruns are rampant because of the lack of workers.  These cost overruns are permeating throughout the economy, pushing up costs, undermining competitiveness and causing some firms to simply shut down.

The labour shortage might ease once the boom subsides but it will not go away.

Most sectors throughout the economy, but particularly the mining sector, face a rapidly ageing and retiring workforce.

The average age of mining and construction workers is 48 years with most retiring at 55.  Moreover, our young are avoiding these occupations despite the high pay and the steady work

This along with growth in demand will cause large on-going labour shortages even when the boom subsides.

Recent research by Flinders University predicted that the State's mining sector will in just 10 years face shortages in its operating workforce in excess of 50 per cent across all occupations, with the greatest shortages among labourers (81 per cent) and tradesmen (70 per cent).

The teaching, health, government, farming, manufacturing, transport and property and finance sectors face a similar scenario.

The real challenge is getting people.  The world is short of people particularly of the types we need.  The mining and building boom is a global phenomena and its workforce is in high demand around the world.  Moreover, as people age they become less mobile.

In the past we have relied heavily on interstate migration to fill our labour shortage.  However, people are no longer coming in numbers, at least on a permanent basis.  Indeed, the available data indicate there has been no growth in interstate arrivals for over a decade.

Instead we need to look overseas for people, preferably as permanent migrants, but if not then as temporary ones.

While more people will bring challenges, such as ensuring that there is adequate land for housing, schools, hospital beds and roads, it is the key to our future prosperity.

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Union wrong on China trade

Australians are lucky the Australian Manufacturing Workers Union doesn't write horoscopes -- if it did, every day would be "stay in bed" day.

If you want a pessimistic view of the future just ask the AMWU.  Its recent "study" on the impact of an Australia-China Free Trade Agreement doesn't deviate.  According to the AMWU, free trade already hurts our economy and an FTA will worsen the effects.

But what more can Australians expect from the AMWU?  During the debate on the Australia-United States FTA, the AMWU commissioned a study showing Australia would lose up to $52.4 billion from its GDP and lose more than 57,700 jobs.  This FTA has been in place since 2005.  Is union secretary Doug Cameron really going to argue we have higher unemployment because of the FTA?

Similarly its China FTA report concludes our manufacturing sector would be decimated under a flood of cheap imports produced by cheap Chinese labour.  The report's tone of economic xenophobia is disappointing when most Australians left behind these sorts of attitudes following the dismantling of the White Australia Policy.  Clearly it still resonates in the manufacturing sector.

Yet even with the cheap flow of imports consumers would win.  The AMWU argues that it would come at the expense of machinery and textile, clothing and footwear jobs, primarily.

Furthermore, it argues that 170,000 manufacturing jobs will be lost and will be offset with only minimal gains in the agriculture and mining sectors due to increased exports.

This is bogus.  It ignores the fact that capital now directed to manufacturing jobs will be lost, when it will really be reinvested to create new sustainable jobs in another part of the economy.  But the larger problem with the AMWU's argument is its static view of Australia's economy.  Protectionists of all stripes have always failed to comprehend the dynamic potential of a free market economy.  While they argue that jobs are lost, they do not comprehend the cost of the present situation and the unpredictable benefits of liberalisation.

They spin their argument as protection for the industry to preserve jobs, families and livelihoods, but they are actually arguing for a halt to Australia's economic growth to protect their way of life.  The beneficiaries of protectionism can always be seen, but the unseen costs dog our economic potential.

When an industry is liberalised it is always easy to point to the losers.  It is much harder to point to the people who have been losing out because of the existing protection precisely because everyone is losing in small doses.  It is just as hard to point to liberalisation's beneficiaries because the benefits haven't flowed yet.

The AMWU excels at this short-sightedness.  It is not surprising that its union leaders push this position -- any drop in membership numbers hardly benefits the power and prestige of their union.  But it comes at the long-term expense of their members' interests.  While in the short term their members' interests may be preserved through protectionism, their long-term job sustainability is undermined.  The higher the protectionist wall is built, the further workers and industry have to fall when it comes crumbling down.

If we have learnt nothing from the structural reform of the Australian economy, the sooner industries begin structural reform and liberalise the more likely they are to adapt and provide sustainable jobs.

The real opportunity of free trade flows from the decisions of the allocation of resources by the market.  Dismantling protectionism brings benefits to the economy because it frees up capital dedicated to an unproductive purpose and redirects it to a productive one.  The consequence is the development of sustainable industries and jobs.  It is also impossible to predict the industries that would develop.  Recent history demonstrates this well.  In the 1970s it would have been impossible to predict how our economy would appear today.  The extent and impact of technology and the growth of technology-dependent industries were unknown, largely because much of the technology and its application had not started.

As a case in point, only a few years ago the US Bureau of Labour suggested that travel agents were going to be in high demand as rising incomes and decreasing flight costs encouraged more people to travel.

What the study didn't predict was the role the internet would play in individuals taking responsibility for booking their own travel arrangements.  The eventual outcome was the demand for travel agents decreased in a short time-frame.

Cameron and the AMWU genuinely believe manufacturing jobs will be worse off if Australia has an FTA with China.  But hindering free trade will only delay an inevitable restructure of an uncompetitive industry.  The best interests of AMWU members will be served when their jobs are sustainable, regardless of the industry they work in.

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