Greens' population policy no better than the others

Bob Brown didn't manage to get in the leaders' debate, to the annoyance of his supporters.  In a way, that's a shame.

Sure, the Greens treat human society as a wholly-owned subsidiary of the environment.  But they do try to present clear policy where Labor and the Coalition just waffle.

They're definitely against the internet filter (although admittedly they chose the person responsible for the filter, Clive Hamilton, to run as a candidate).  They're definitely for climate change policy (although admittedly they voted with the Coalition against the emissions trading scheme).

A fourth body on the stage could have made the debate a little less of a sixty minute slogan slog.

Nevertheless, on the big issue of the campaign so far -- immigration and population growth -- Bob Brown offers nothing but equivocation and confused messages.

First:  equivocation.

In response to the intergenerational report last year which famously projected Australia would have nearly 15 million more people in 2050, Brown called for ... wait for it ... an inquiry.  A review.  Another report.

Speaking in March, Brown asked, "How they think we're going to handle 35 million, I don't know, but if they think we can, let's see the plan.  It's just really saying let us have the knowledge base that responsible policy making should come out of."

The Greens are obviously learning the politics of policy from the big kids.  Kevin Rudd would be proud.

Then confusion.  In her Twitter feed on Sunday night, Sarah Hanson-Young, the Greens senator from South Australia, tried to claim "Compassion is key to any discussion of population growth".

Certainly, the party's approach to asylum seekers is clear cut.

The Greens want to increase Australia's refugee intake, which is good.  Their asylum seekers policy is one carefully refined after years of activism and involvement with refugee protests, and driven by dissatisfaction on the left with the major parties.

Yet the party is as rife with contradiction as any of the majors they despise:  the Greens also want to cut back other immigration.

And they're clearer than the ALP or Coalition about who the bad guys are in the population debate -- skilled migrants.

Oh well, the Greens were never going to get much of the business vote.

Hanson-Young has argued the skilled migration program could have some "fat" trimmed from it.  (Masterchef has made food metaphors cool.)

Indeed, the best comment this week came from a regular Masterchef guest, Neil Perry, responding on Twitter to the opposition's similar promise to cut migration:  "great can't get enough people to work now!!  Guess I should think about closing restaurants not opening them!"

Perry's comment applies as readily to the Greens' proposed immigration cut as it does to the Coalition's.

Our current immigration program only partly alleviates business needs.

There is a genuine demand in the Australian economy for skilled and semi-skilled workers right now.  No amount of high-handed rhetoric about the need to train local workers will change that fact.

And the lucky migrants who get into Australia benefit from our high living standards, stable rule of law, and liberal democracy.

So how is stopping people finding a new life in Australia, as the Greens would like to do, in any way compassionate?

Let's be clear.  If you are a refugee fleeing persecution, then a Green government will embrace you.  But if you are fleeing something as banal and commonplace as poverty, economic hardship, low wages, a lack of opportunity or jobs, or if you're just looking for a better life for you and your family -- then the door to Australia is closed.

The Greens are torn.  On the one side, they have supporters who value Australia's role accepting more refugees and providing opportunity for migrants.

But on the other side, they have supporters who see people as the ultimate environmental problem.  Each Australian has a relatively high carbon footprint.  So, for some environmentalists, the goal should be to make sure there are as few Australians as possible.

That means keeping foreigners out.  Poor people are better for the environment.  They can't afford gas guzzling cars, or always-on-standby plasma televisions, or gaudy McMansions with heating and cooling systems.

Anyway, that's the theory.  Many people holding this view say we should increase foreign aid, but they are convinced the effective path out of poverty -- immigration -- should be blocked.

Bob Brown has to negotiate the terrain between these two views.  It's clearly uncomfortable.  (Refugees settling in Australia have growing carbon footprints as well, but that's best not spoken about.)

Brown's hedging means the Greens are no better on population than the Coalition and the ALP.  No party wants to embrace the high immigration which has been the fuel of the Australian economy for two centuries.

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Thank NSW Labor for small thinking

Western Sydney, we get it.  Your state government is laughably incompetent.  It's unable to build the infrastructure and supply the services needed by a growing city.

The New South Wales government is too busy destroying its leaders to bother with boring roads and railways.  For years, the chief focus of the government has been mining the backbench for new premiers.  What are they on now?  Not Team B, or Team C;  it must be Team E, at least.

But give us back our federal election, please.

The anti-population growth policies of Julia Gillard and Tony Abbott are specifically calibrated to stoke western Sydney's disaffection with the failings of their ageing Labor government.  Asylum seekers, multiculturalism, sustainability, infrastructure, congestion, the lot -- it's all been dropped into the population bag.

That's right:  the anxieties of a few clustered electorates in NSW have inspired every major political party to abandon Australia's two-century-long goal of population growth.

It's no surprise one of the most prominent anti-population activists is Bob Carr, whose premiership kicked off Sydney's decline.  Mark Latham -- the self-styled voice of the west -- is annoyed at his old friend Gillard for treating his brethren as mugs.  Latham thinks the PM should be openly enthusiastic about slashing immigration.

And one of Gillard's first acts as Prime Minister was to fly David Bradbury, ALP member for the marginal Sydney seat of Lindsay, to Darwin so they both could join a navy exercise.  The two posed with handsome navy officers and played a spot-the-refugee-boat game for photographers.  Border security is a western Sydney issue, you see.

The phrase ''little Australia'' says it all:  little population, little economy and tiny aspirations.  The Coalition even wants to neuter one of our great institutions, the Productivity Commission -- admired and imitated internationally -- and recast it as the ''Productivity and Sustainability Commission'' to focus on limiting population growth.

Admittedly, they'll have to change its name, otherwise the commission would tell them Australia needs increased population growth for economic reasons -- we need labour, skilled and unskilled, to expand our prosperity, to keep inflation down, and to protect ourselves against future economic crises.

There's also a good moral argument for letting people from the developing world live and work in Australia, but an election is no place for moral arguments.

Late last year Kevin Rudd was concerned voter dissatisfaction with NSW Labor would undermine his re-election.  The 25 per cent massive swing to the Liberals in the Penrith state by-election in June apparently confirmed this view.

There's not a lot the federal government can do to fix western Sydney's congestion problem.

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Renewable energy comes at exorbitant price

Coal-powered electricity generators and abundant coal supplies bring Victoria the world's cheapest electricity.

This will change, partly because of the risk of a government carbon tax.  This makes it impossible for companies to build new coal-powered generators.

In addition, government programs subsidise wind and solar energy.  And the Commonwealth has a ''20 per cent renewable'' requirement.  This forces consumers, through electricity retailers, to buy expensive electricity from renewable sources.

Large-scale hydro electricity is the only low-cost renewable energy source, but no more dams can be built -- so renewable electricity supplies must come from high-cost sources.

The Greens think they can run Melbourne on renewable energy within a decade with innovations such as covering the MCG in solar panels.  They want to ''Repower Melbourne'' with massive subsidies to renewables and a national carbon price.

These truckfuls of your money are to fulfil ''forward to the past'' dreams of a de-industrialised car-free city.

We expect the Greens to promote off-the-planet energy policies.  But Labor and the Liberals also favour expensive impositions.

Among these is requiring electricity businesses to pay households for the energy produced by solar panels.  Victorian energy retailers have to pay households 60 per kilowatt hour -- tenfold its worth.  Other state governments require even greater payments.  In NSW that price must be paid even for the electricity the consumer uses in their own house.

The costs of this are paid for in the electricity bills of consumers without solar panels.

Then there's the ''20 per cent renewable'' requirement.  The penalty for using renewable energy includes its inherently high cost and the need for back-up supply, because the vagaries of the weather make wind and solar intrinsically unreliable.  A further cost is transmission investment to bring electricity from dispersed wind farms or solar factories.

In kilowatt/hour terms it costs about 8 to get coal-generated electricity from the Latrobe Valley to the Melbourne hub.  For wind farms the cost is about 17.  For large-scale solar power the cost is closer to 30.  And rooftop solar panels need a payment of 60 plus assorted other subsidies.

Wind power is a mature technology that won't get any cheaper.

Solar is hopelessly uneconomic.  All the solar generating facilities started in Australia have failed.  The Commonwealth and Victorian governments together gave $120 million to a $420 million large-scale solar power plant in Mildura, ''the biggest and most efficient solar photovoltaic power station in the world''.  Even with the subsidy the plant was not viable -- and was closed with the money wasted.

Victorian Premier John Brumby says his climate change policy will create 1200 new jobs.  These will be phantom jobs, just like the 2000 new jobs that were previously forecast from a subsidised windmill blade factory.  And if, as suggested, the policy involves closing the Hazelwood Power Station it would prove disastrous.  Hazelwood delivers a third of the state's electricity at a quarter the cost of renewable alternatives.

Prime Minister Julia Gillard has spoken about Australia's mineral wealth as a birthright.  But our real birthright is low-cost energy -- an asset politicians seem intent on eradicating.

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Business lacks courage

Six days into the federal election campaign and Work Choices has dominated the news on five of those days.  We know all about Tony Abbott ducking and weaving and somersaulting on whether Work Choices is alive, dead, or just cryogenically frozen.

If Abbott isn't careful this could be the second election in a row that Work Choices has helped sink the Coalition.  Certainly the ALP and the ACTU have done a brilliant job at demonising Work Choices.  But there's more to it.  The Coalition has allowed itself to be defined by the single issue of industrial relations.  At the moment the only two Coalition commitments that most voters could name would be Abbott's tax on business to pay for parental leave, and his promise on Work Choices.

It's perplexing that Abbott has got himself into this position, given that he's written an entire book about what he believes in and why.  He was a minister for nearly a decade, compared with Julia Gillard, who has been a minister for less than three.

Given its interest in Abbott's industrial relations policies, you'd think the Canberra press gallery would press Gillard on the problems with her own Fair Work legislation.  Alas -- no such luck.  If ever proof was needed of the different standards journalists apply to Labor and conservative politicians this is it.

Matthew Spencer should be a household name, but he isn't.  The media's priority is getting a ''gotcha'' moment against Abbott.  Spencer was a then 17-year-old employed at a hardware store operated by the Terang and District Co-op in country Victoria.  He worked there after school from 4pm until the store closed at 5.30pm.  His situation was no different from thousands of other young Australians in part-time retail jobs.  Spencer was working to earn enough money to pay back his parents for the loan they gave him to buy a car.

In February this year, he was told that he had lost his after-school shift because of changes to the industrial award covering the retail industry.  As a result of Labor's ''Fair Work'' legislation, businesses are banned from offering shifts of less than three hours' duration.

An appeal to allow a two-hour minimum shift and to give special consideration to school students was dismissed.  The vice-president of Fair Work Australia, Graeme Watson, acknowledged that jobs would be lost as a result of the award changes but he said the legislation gave him no choice but to uphold the three-hour minimum.

This decision doesn't quite match the ALP's promise made before the 2007 election that no worker would be left worse off by Labor's award changes.

On Wednesday at the launch of a new trades training program for students, the PM was asked, considering she thought work experience was so important, ''why won't you clear the way for kids to get after-school jobs?''.

Her answer was:  ''Well I certainly believe the Fair Work Act has got the balance right.''  And then the press conference moved on to asylum seekers.

It's no wonder people such as Brambles and Bluescope chairman and Reserve Bank of Australia board member Graham Kraehe are frustrated.  As Kraehe said a few days ago:  ''It is disappointing that some of the rigidity put in place by Fair Work Australia will not be addressed in the next parliament.  There are some flaws in Fair Work Australia that need to be urgently corrected''

Kraehe is right, but his disappointment is misdirected.  Given the current situation it would be political suicide for Abbott to suggest changing the Fair Work Act.  If he did so the ALP and the ACTU would oppose him tooth and nail, while most business organisations would stand on the sidelines.  If business wants the Coalition to take up the industrial relations fight it is going to have to do more than just talk about it -- it will have to fund it as well something it has shown no inclination to do.

This week the ACTU endorsed a $1 levy on every union member to fund advertising against Work Choices.  That's $1.8 million that will be spent to, in effect, campaign against the Coalition.

If business leaders want changes to the Fair Work Act they could urge a levy on companies to pay for a campaign to achieve this.  Of course this won't happen.  It's much easier to sit in the boardrooms of Martin Place and Collins Street and murmur complaints about the opposition and its lack of policy bravery.  At least there's one thing that can be said about the union movement:  it puts its money where its mouth is.  The same can't be said of business.

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Spending cuts in the obvious places

The government spends a lot of money on a lot of things.

Not all of it wisely.  It's easy to be careless when you're spending other people's cash.

So credit where credit's due:  in the unlikely event there is an Abbott government in Canberra at the end of next month, the Opposition has proposed some genuine cuts to the federal budget.  Tuesday morning they released another list of ''savings'' -- some $1.2 billion worth -- which they claim would help get the budget back into surplus.

Some of them are so stultifyingly obvious it's amazing nobody has committed to scrapping them yet.

Retooling for Climate Change was announced by a fresh looking Rudd government all the way back in 2008.  The government pays selected small businesses to upgrade to more environmentally friendly machinery.

In the two years the program has run, it has been taken up by just 65 businesses.

So it probably hasn't made a substantial impact on global carbon emissions levels.

The Green Building Fund, a program to upgrade buildings in a green-ish manner, is even more expensive, and just as futile.  The Opposition says scrapping it will save $400 million over the next few years.

The United Nations Security Council bid was another of Kevin Rudd's attempts to aggrandise himself on the world stage.  Dropping the bid, and keeping the $5.7 million the Coalition claims it would have cost, should be a no-brainer.

Every budget cut is controversial.  Even this one.  After Abbott announced his hostility to the UN bid, the Australian foreign policy establishment was decrying that doing abandoning this would undermine our ''prestige''.

We've spent a lot of money in the past trying to enhance our ''prestige'' in the world.  Remember the Sydney Olympics?

Indeed, if Tony Abbott is in the mood to kill some sacred cows he might consider abandoning Australia's bid for the World Cup.  We've given $45.6 million to Football Federation Australia to manage the bid so far.  The cost to the Australian economy will be extraordinary if we win:  PricewaterhouseCoopers has estimated hosting the Cup will cost at least $2.9 billion.

Supporters of the World Cup claim we'll recoup the money through tourism and other miscellaneous sources.  But a mega event which pays back is an extraordinarily rare one, despite the fevered dreams of their advocates.  Let's cut our losses while we still can.

Community cabinets, which Abbott also wants to eliminate, were always bit of a joke.

Sure, they flattered those communities which had a turn meeting senior politicians and complaining to their face.  But if the Labor Party wants to run focus groups, it should pay for them itself.

And Rudd's community cabinets were absurd when you realise that his actual cabinet was being marginalised.  Senior ministers couldn't get a few minutes of Rudd's time to discuss major policy -- so spending an hour with the PM at a community cabinet meeting was probably as exciting for his colleagues as it was for the dutiful citizenry.

The Opposition claims that, when added to the savings already announced before and after the May budget this year, it adds up to $23.8 billion of cuts.  The federal government spends around $350 billion per year, but you have to start somewhere, I guess.

Nevertheless, we should dwell on the net effect of these savings.  Both the Government and the Coalition believe that they will bring the budget to surplus by the 2012-13 financial year.

And projections of what the budget will look like in 2013 are, well, projections.  Economic circumstances change.  (After all, recall that as the global financial crisis was beginning to hit, the Rudd-Swan-Gillard-Tanner team were still saying our economy was doing too well, and pushing up interest rates.)  And political circumstances change;  governments decide they have new spending priorities.

So there is reason to be optimistic about these proposed cuts.

The Opposition could go a hell of a lot further.  Here's another idea for them to mull over:  if a program appears on the AusIndustry website -- as Retooling for Climate Change does -- that should qualify it for immediately abolition.  The site lists 53 separate government programs:  all of which funnel money to favoured industries and lucky applicants who have mastered the art of filling out paperwork.

Of course, when the Opposition claims that it is dedicated to reducing ''Labor waste'' they are being too disingenuous by half.  The Howard government was no stranger to waste.  Their Regional Partnerships Program defined for a generation what pork-barrelling looks like in Australia.  When Abbott claims ''this reckless spending must stop'' he is just redeploying Kevin Rudd's powerful critique of Howard.

And Abbott is putting new pressure on the budget too:  yesterday he announced more tax rebates on education.

No party has a good record on cutting spending.  But every promise to do so counts.

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Despite the right turn, Gillard is no Iron Lady

When Kevin Rudd won the 2007 election, conventional wisdom suggested Labor's victory would mark a political realignment in Australia.  Not only did the Coalition's defeat spell the end of John Howard, we were told it signalled the nadir of conservatism and dawn of a new era of progressivism.

Somebody forgot to tell Julia Gillard.

Consider what the PM has done in the past month.  She has backed down on her predecessor's economically crushing mining industry super tax.  She has changed Labor's tune on asylum seekers and promised to toughen up border protection.  She has repudiated a big spending fiscal policy and praised the economic reform agenda of Paul Keating and Peter Costello.

She has distanced herself from the emissions trading system.  She has pledged her support for the war on terrorism in Afghanistan.  She has thrown up the white flag in the culture wars, vacating the battlefield to Tony Abbott on citizenship, gay marriage and constitutional change.  Add to this her opposition to teacher unions over league tables and schools curriculums, and it is no wonder some commentators have depicted her as Australia's Margaret Thatcher.

It is a measure of Abbott's success that the ALP not only ditched Rudd within months of his becoming Opposition leader.  It has also installed a leader, Gillard, who either embraces Abbott's positions or substantially modifies Labor policies to make them less threatening to middle Australia.

All of which shows what conservatives have long believed about Australia:  that we, like America, remain essentially a centre-right nation.

In the US, Barack Obama's liberal overreach is generating a strong conservative backlash.  So much so that Republicans could even regain the House of Representatives and the Senate in November's mid-term elections.

In Australia, meanwhile, polls continue to show that the key voting groups that help turn federal elections are not the so-called small ''l'' liberal elites from metropolitan Melbourne and Sydney who care passionately about refugees, multiculturalism and man-made global warming.  The key voters are sections of the culturally conservative working and lower middle classes, most notably from the outer suburbs of Sydney and Brisbane and especially the sun-belt seats of Queensland.

It was these people who formed Howard's core support during most of his 12 years in power.  It was these people to whom Rudd appealed in 2007.  And it is these people to whom both Gillard and Abbott will primarily appeal in coming weeks.

They may not read Edmund Burke but they are a temperamentally conservative lot, wary of change, believing that efforts to transform anything quickly will have, as Burke wrote, ''pleasing commencements'' but ''lamentable conclusions''.

In this political environment, it's hardly surprising that Gillard is running as a don't-rock-the-boat conservative.  Just don't believe her sincerity.  Take border protection.  In 2007, Gillard said the Labor government was ''committed to ending the so-called Pacific Solution, we would not have offshore processing in Manus Island and Nauru''.  Just last year she insisted:  ''We also said to the Australian people ... we were going to end the Pacific Solution, which had cost so much money for so little result.''

And now, 18 months after Labor substantially softened border controls, culminating in a huge increase in unlawful arrivals?  Gillard proposes something that looks an awful lot like the Pacific Solution:  processing refugees, not in Nauru, but in East Timor.  Apparently, asylum seekers have become such a red-hot button issue that internal ALP polling showed it would kill Labor's chances of holding onto power if it did not toughen up policy.

Nor is border protection the only area where Gillard has done a volte face.  Take climate change.  Whereas until Copenhagen she deemed it blasphemy for Coalition MPs to dare question Labor's plans to implement an ETS, today Gillard stresses there is no consensus for a complicated cap-and-tax scheme.

Of course, it makes no sense to raise prices up and down the energy chain in Australia when China, India and the US are doing very little to reduce carbon emissions.  A pledge to lead the world on slashing greenhouse gases may warm the hearts in Labor's inner-city seats of Melbourne and Sydney's Grayndler, where Labor faces stiff opposition from the Greens.  But in the absence of a genuine global post-Kyoto deal, such grandstanding would be economic and political suicide.

Economic, because it would threaten our energy-intensive industries, and the accompanying jobs.  Politically, because it would alienate the battler vote in outer suburban seats who are mortgaged to the hilt.

The choice for the electorate on August 21, then, is clear:  would Australians rather have a centre right government led by a man who is sympathetic to their values, ideals and lifestyles?  Or a pale imitation playing catch-up, led by a woman hoping no one notices her sudden change of heart?

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Rudd is gone, but he's still the focus

Tony Abbott and Julia Gillard agree:  Kevin Rudd must not be allowed to win this election.

The former prime minister will not be a big participant in the campaign, but it seems he will be its primary focus.

Labor candidates across the country have photoshopped him out of their campaign photos.  We can now see the results:  in the western Sydney electorate of Macquarie an ALP flyer is being distributed that features Gillard rejecting a ''big Australia''.  The bogyman on that flyer is not Abbott, but Rudd.

So far, all Gillard's policy announcements have been Rudd-centric.  She's backed down on Rudd's mining tax, she's toughening up the refugee policy she inherited from Rudd, she's fudging climate change as much as she can.

The statement to the Canberra press gallery this week that her campaign would be frugal sounds responsible.  But it has to be frugal.  She, and Rudd, and the rest of the kitchen cabinet have used up all the government's money already.

One thing wasn't about Rudd.  Last week she announced, with the sort of pomp and ceremony befitting a declaration of war, that school uniforms would be eligible for the education tax refund.  Whether that's a good policy or not is immaterial;  it's not much policy at all.

The ALP seems to be asking for three more years to retract the last three.  ''Moving forward'' is, well, a little backward looking.  And it's not a lot to hang a campaign on.

Gillard has no lack of issues she could pick up.  The former prime minister's irritable policy-making style ensured that.

If there's a slow news day, she could jump aboard any of the few hundred recommendations from the Henry tax review, the Preventative Health Taskforce, and the 2020 Summit, or the health reform, or the Asia union.  She could even take up the entirely futile and entirely noble campaign for nuclear disarmament.

At the very least, Gillard will have to decide which of Rudd's proclamations she wants to support or discard.

Spare a thought for Tony Abbott.

The Coalition wanted to run against Kevin10.  Their policies on refugees, population, the mining tax and climate change are concentrated to capitalise maximally on his weaknesses.

Rudd was the Coalition's best asset.  Soldiering on, Abbott has started referring to the ''Rudd-Gillard government''.

But with no Rudd, the Opposition Leader appears to be just hoping Gillard will break something.

With the failure to lock in a refugee processing centre in East Timor, Gillard may have.

Yet surely what's more memorable about the Dili solution is that the new PM is -- again -- repudiating her predecessor's approach.

Rudd is skulking around, pretending to be the political powerhouse he isn't.

But now the election is on, both Gillard and Abbott are going to have to face each other directly.  Doing so will take serious policy creativity.

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Resource rent tax is absurd as its predecessor

The resource super-profits tax is buried, the minerals resource rent tax is terminally sick.

Treasury's estimate that the MRRT would reduce the RSPT's estimated $12 billion tax collections by only $1.5bn was never credible.

Analysts assessing the costs of the government's attempted plunder of the mining industry are now revealing a more accurate picture.  According to Citibank, the RSPT would have devalued the main businesses' worth by 13 per cent to 25 per cent;  Citibank puts the cost of the MRRT on BHP, Rio and Fortescue at 1 per cent to 3 per cent of value.  Deutsche Bank sees the MRRT's adverse effect on two of the three main listed coalminers at less than 1 per cent of value.

The RSPT was founded on seizing present assets of businesses and adding heavy penalties to future mining investment.  It was glibly assumed these measures would have no influence on the affected sector's decisions.

How could such naive policy have been developed?  Who was responsible and how do we prevent a repetition?  The government has offered Kevin Rudd as the fall guy.  And he was doubtless a big player in the debacle.

The RSPT was devised by Treasury secretary Ken Henry and is the only recommendation of his taxation review picked up by Wayne Swan.  The Treasurer saw the tax as a way to bridge the fiscal haemorrhage created by the government's spending spree in response to the global financial crisis.

Finance Minister Lindsay Tanner was part of the quartet that ticked off on the proposal, as of course was Julia Gillard.

An early endorser was Resources Minister Martin Ferguson, who called it a major reform.  Such is political life.  Another was Small Business Minister Craig Emerson, who said, ''We are going to implement a resources tax, a resource super-profits tax, because we want to use the proceeds, again, to invest in the future.''

And Climate Change Minister Penny Wong proved her gullibility is not restricted to buying the underestimated regulatory cost of measures to reduce carbon emissions when she maintained the RSPT ''would strengthen the Australian economy, increase productivity and increase mining output''.

Although the MRRT raises little from big existing mines and Treasury's revenue forecasts of the two mining taxes are grossly inconsistent, the MRRT is still scheduled to raise future revenues.  Eventually, however, the government will realise it will actually have a negative revenue effect.  This is because the Treasury forecasts are predicated on the tax bringing no adverse future investment consequences.

According to Goldman Sachs, the combined effect of the MRRT plus profits tax on a future coal mine will be 45 per cent, which is down from 57 per cent under the RSPT but up from 37 per cent at present.  Among big competitors the equivalent tax rate in India is 41 per cent, South Africa 35 per cent and Russia 24 per cent.  For iron ore, the MRRT plus profits tax combined is also 45 per cent, up from the existing 35 per cent and somewhat above the 36 per cent equivalent in Brazil.

Miners will use these or similar numbers to assess the merits of different investment locations.  As Rio's Tom Albanese has said in the context of the MRRT:  ''But of course our Australian projects will always have to compete for capital with our other investment opportunities across the globe.''

This dooms the MRRT.  Miners will quietly divert capital to places with more accommodating tax regimes, the bureaucracy will duly inform the government, which, also anxious about constitutional challenges from Western Australia, will discreetly drop the whole proposal.  Unlike the RSPT, the death of the MRRT will therefore not follow a humiliating capitulation by the government.

The proposed tax changes have foundered on the shoals of demand, supply and competition.  Demand and supply has led to a doubling of coal and iron ore prices in the past year or so.  But analysts (whose guesses are better informed than most) expect prices to subside to their previous levels in the coming years, even if China continues to boom.  This is because no firm has a monopoly on mining skills and technology continues to offset the increasing costs of accessing new deposits.

With the RSPT, a costly policy error was made.  Rudd has paid with his political career.  So far Swan, the chief propagator, and Henry, the chief strategist, have shown themselves to be indifferent to the costs - probably billions of dollars - of their incompetence in proposing the tax.

This is understandable with Swan, a politician with the hide of a rhinoceros.  But Henry has done a massive disservice.  He has presided over the debauchment of Treasury.  His poorly thought-through mining tax was accompanied by deceptive estimates of its revenue effects.  This follows other actions in promoting fiscal irresponsibility, including the response to the GFC and inventing data that put a rich gloss on the adverse repercussions of a carbon tax.

The suspicion is these mistakes are more than errors of judgment and stem from a contempt for the market system and a hubristic wish to reconstruct it.  Either way, he and others of similar mind who are in positions of influence within the Treasury should be dismissed as a step towards repairing confidence in the department.

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Climate change: healthy debate not a health debate

Want the earth to be cooler?  Unleash the psychologists.

At least, that's the argument presented by one of the keynote speakers at the 2010 International Congress of Applied Psychology, being held in Melbourne this week.

According to Robert Gifford, a Professor of Psychology and Environmental Studies at the University of Victoria in British Columbia, the profession needs to help scientists and policymakers overcome the psychological barriers to action on climate change -- things like the public's limited understanding of the dangers of global warming, ideological reluctance, and mistrust of government.

He's not alone:  it's a developing area of study.  The American Psychological Association has a Task Force on the Interface Between Psychology and Global Climate Change.  In a report last year, it too found psychologists should try to overcome our psychological barriers to saving the planet.

Of course, all this assumes that having governments take aggressive action on climate change as soon as possible is inherently desirable.

And if you don't think so, well, you have psychological problems.  Or, at least, we as a society do.

In other words, if we think the costs of climate change policies could be greater than the benefits, if we think there are better uses for the money governments want to spend on the environment, if some of us don't want to make the lifestyle changes necessary to cut carbon emissions by 80 per cent, then we need psychological treatment.

Case closed.

But there is serious debate to be had about climate change.  Debate about the best response to the changing climate and the degree to which we are responsible for that change.  Debate about how we can adapt to a warmer or colder environment.  Debate about whether Australia should bother trying to "lead the world" if the world isn't interested in following.

Instead of tackling those questions, many climate activists would prefer to treat the existence of public uncertainty about the origin, costs and consequences of climate change as not just wrong, but corrupt, immoral, and, now, unhealthy.

This attitude has the stale whiff of authoritarianism.  Not to the degree that dictatorships have used psychology as a tool of political power, jailing dissidents in mental institutions, sure.  But it is distinctly authoritarian to respond to a political disagreement with a medical diagnosis.

The Australian Psychological Society claims the profession has a "special responsibility to be proactively involved in fostering more ecologically sensitive and sustainable behaviours and lifestyles".  This seems a little outside its brief.

Yet it accords with the trendy view that lawmakers should team up with psychologists to manipulate our decisions.  People apparently need a little help from social engineers to ensure they make the "best" choices about their personal diet, finances, and lifestyle.

Thus the huge range of personal values and opinions held by individuals can be treated as if they are deviant in some way, and need professional and legal treatment.

No-one is disputing the electorate has misguided views about many public policy questions.

In his 2007 book The Myth of the Rational Voter:  Why Democracies Choose Bad Policies, Bryan Caplan documented the four big economic biases -- views held by the general public but rejected by economists who have spent years or decades studying them.

People tend to underestimate the value of labour-saving practices.  They overlook the benefits of free trade.  They believe the economy is always in decline, and they undervalue the social benefits of the voluntary interaction in the marketplace.

These beliefs account for much of the harmful demagoguery which surrounds economic debate.

Yet neither the Australian Psychological Society nor the American Psychological Association has a section on their website dedicated to the psychological barriers to sound economic policy making, as they do with climate change.  Nor do their conferences focus on diagnosing the impediments to international support for lower tariffs.

Instead we all rightly treat economic policy as a legitimate area for discussion and disagreement.  Climate change policy needs to be approached with the same open attitude.

The way the debate over climate change has developed has encouraged this sort of public policy dogmatism.

The Intergovernmental Panel on Climate Change (IPCC) has been promoted as the last word on climate.

The IPCC process is a bold attempt by a small number of experts to distil an enormous amount of scholarship into a single document, with enough coherence for politicians to act upon.

So the IPCC's reports are not just dispassionate reviews of the scientific literature.  They are riddled with economic assumptions, political judgements, and ethical and moral assessments.

That the general public is sceptical the IPCC has reached scholarly perfection -- to question some of its judgments -- is not an indication we all have psychological issues.  It's healthy debate.

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How strange bedfellows make for better government

Something strange is happening in Britain.  When the Conservative Party failed to get an outright majority in the May general election, it was forced into coalition with Britain's (distinctly left-leaning) third party, the Liberal Democrats, to take government.  But here's the strange part:  the coalition seems to be working.

The Liberal Party in Australia should be watching this embryonic alliance closely.  David Cameron and his Liberal Democrat Deputy PM Nick Clegg are getting along like a parliament house on fire.  The two men are even proposing to address each other's national conferences this year.

It's more than just a personal relationship.  Surprisingly, the coalition seems a lot stronger than you'd expect from a marriage of convenience.

If it holds, the UK could see a dramatic ideological realignment.  After all, David Cameron's project to soften the Tory image was about more than just looking green and modern.

No party calling itself "conservative" will ever be a fully libertarian one.  Social conservatives who've voted Tory forever would not look kindly upon mixing social liberalism (gay marriage, for example) with its Margaret Thatcher-style economics (lower taxes, smaller government).

But while the Tories are in coalition with the Liberal Democrats, the government could get close to that philosophical union.  At their best, the Liberal Democrats are socially liberal and civil liberty-minded.

The dynamics of coalition with the Liberal Democrats gives influence to social liberals in the Conservative Party.  It also gives power to those Liberal Democrats who want to cut down the size of government and deregulate.

So the coalition could be a generally centrist, modest and mainstream government, but one that cares about individual liberty -- a new "liberal conservative" government.  That's what seems to be happening.

Clegg is working on the Great Repeal Bill, a suite of legislation to clear away some of the restrictions on civil liberties, government intrusions on privacy, creepy government databases, and nutty nanny state laws that built up in the Labour government's decade in power.

The government is eliminating the compulsory national identification card scheme.  They've promised to stop detaining asylum seeker children.  They're talking about devolution, giving more power to local councils and communities, expanding school choice and pushing public sector reform.

Sure, there are big things the two parties disagree on.  On immigration there is tension.  But Labour has evidently decided disaffection with foreigners was the reason it lost government.  So while Labour is going after British National Party types, the Liberal Conservative coalition can temper its own position.

It is early days for the Cameron-Clegg partnership.  But it looks good so far.  So if the Liberal Party isn't paying attention, it should be.

When Malcolm Turnbull was rolled last year as Liberal leader, there was a minor sub-genre urging him to start his own party -- a party for social liberals and economic dries.  Sounds delightful.  But not many of the people who proposed this new party would vote for it, let alone join.

Turnbull may be all loveable and cuddly on climate change and Bill Henson, but such a party would also have to be economically pretty dry.  Imagine a party with an industrial relations policy to actually deregulate Australia's workplaces, rather than, as with WorkChoices, just smack around trade unions a bit.  Or one that wanted to do more horrifying things:  privatise Australia Post, cut taxes, abolish the Australian Institute of Sport.

Of course, the chances of a breakaway party are pretty slim.  But it is a central tenet of the Australian Liberal Party that it's the party of individual freedom, small government and personal responsibility.

The Cameron-Clegg alliance is a real-world test of the marketability of a government that cares about individual liberty in both economic and social spheres.  It's a style of government with promise.  The Australian population is becoming more liberal on social issues every year.  Gender and sexual equality are no longer debatable.  Even multiculturalism, so controversial in recent decades, is widely accepted.

Yet many on the Australian right believe the reason David Cameron didn't win big enough against Gordon Brown to hold government on his own was because he was insufficiently conservative.  He could have talked more about immigration, for instance.  The lesson from Britain, they argue, is that Tony Abbott needs to tack right, and tack right hard, to be credible.

But the new British coalition could offer a very different example for the Australian Liberal Party.  If Cameron and Clegg can make it work, the combination of social and economic freedom may not be such electoral poison after all.

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Less is more when it comes to election vows

With a State election pending, political parties will offer new spending promises and regulatory benefits to selected voter categories.

But any baubles governments might provide to targeted voters can only come from commandeering funds and imposing regulatory costs on others.

The electoral game involves politicians punting that the losers won't notice their pockets have been picked and that the costs imposed by new funding and regulatory measures won't damage private production too much.

If, instead of this approach, the political auction was conducted on the basis of reduced spending and less regulation, we would see lower taxes and greater prosperity.

The available gains can be observed by comparing the performance of different US states.

In California, Arnie campaigned on cutting spending and regulations but failed to follow through and, in spite of its premier role in high-tech industries, the state has experienced a dismal economic performance.

Texas adopted spending restraint and low regulation and has been a success story.

Over the past decade, income levels in Texas grew 65 per cent while California saw its income levels grow only 40 per cent.  In per capita terms that barely out-paced inflation.

In California the State Government comprises 28 per cent of the state's income levels whereas Texans make do with 18 per cent.

California has Australian-style regulatory policies on land that create high land prices and consequent high house prices.  Texas has few planning restraints on land use and, as a result, Houston's house prices are half those in Los Angeles.

Where are the lessons for Australia?

In terms of their own budgets, the Labor governments in power throughout the country have shown themselves to be spendthrifts.

In Victoria, government spending has doubled over the past 10 years.  Even the much ridiculed New South Wales Government has done better with spending having risen by ''only'' 77 per cent.

The Victorian Labor Government was fortunate since prior to being voted into office the state's spending base had been pruned by the previous Kennett government.

The Kennett government also improved the state's efficiency with a privatisation program that was vigorously opposed by Labor.

Australia is over-regulated, a symptom of which is that all state governments have planning measures that raise the costs of land for housing.

The cost of a new greenfield block should be around $60,000.  In Victoria, planning regulations raise this to $150,000.  In NSW regulations lift the cost of a block to $330,000 but it is small comfort for an aspiring house buyer to learn Victoria's government is not as bad as its NSW counterpart.

We are well past the point where government spending and regulations offer any net benefit and it is time political parties started to compete with each other by offering lower spending, reduced taxes and a bonfire of regulations.

As the Texas example shows, this would lay the foundations for higher living standards.

The popularity of deregulation and cost-cutting is greatest following an economic crisis.

Gross mismanagement by Victorian ALP Governments in the 1990s caused such a crisis but the benefits of reform should be pursued without such a trigger.

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The ''Three Cheers'' used to come from the Left

Last August, Kevin Rudd called for an end to hostilities in the History Wars.  Yet, as with many other Rudd proclamations, this one is unlikely to come to anything.  Already in 2010 we have seen Keith Windschuttle and Robert Manne resume their longstanding battle over the ''Stolen Generations'', and the government's own history curriculum has been assessed by many through the History Wars prism, despite Julia Gillard's assertion that its interpretations were neither ''Black Armband'' nor ''White Blindfold''.

So, if the History Wars are to continue, it seems opportune to highlight one often overlooked fact.  While in recent decades the Left have clung to a ''Black Armband'' interpretation of Australian history, until the 1960s, most of them supported what is normally called the ''Three Cheers'' (or to use Gillard's term ''White Blindfold'') view.

The terms ''Black Armband'' and ''Three Cheers'' to describe those who see mainly negatives, or mainly positives, in the nation's past, were coined by the perennially adroit wordsmith Geoffrey Blainey.  In his seminal 1993 Latham Lecture, Blainey explained how ''to some extent'' his generation had been brought up on a ''Three Cheers'' view, which maintained that ''nearly everything that came after [the convict era] was believed to be pretty good''.  He acknowledged that this position may have been ''too favourable, too self-congratulatory'', but he argued that the swing to the opposite ''Black Armband'' extreme had resulted in a take on the nation's history that was ''even more unreal and decidedly jaundiced''.

When Blainey was young, ''the Left wing and the Right wing were alike in their congratulations, though they rarely congratulated the same events''.  However, while in the ''school lessons or papers or radio'' that Blainey absorbed in his youth, the Left and Right may have been equally represented, there is no doubt that the Left had the numbers when it came to writing the more intellectual versions of Australian history, or teaching it in the universities.

Writing in the Introduction to Australian Civilization in 1962, The Spectator Australia's own Peter Coleman described ''the standard radical-Leftist interpretation of Australian history which is given in nearly all the textbooks''.  Coleman cited works by V.G. Childe, H.V. Evatt and Brian Fitzpatrick, and even the Cambridge History of the British Empire.  This standard Left position tried to cement ''the unfolding of Social Progress and the increasing initiative of the working class'' as the overriding themes of Australian history.

However, according to Coleman, some relief was at hand.  A postwar Counter-Revolution was underway.  It was led by a historian who ''by his questioning of orthodox assumptions ... did more than anyone else to release historians from the prison of the radical interpretation and to begin the systematic study of the neglected themes in our history, especially of religion''.  The historian in question was Manning Clark.

Clark was still seen as the leader of the new more pessimistic history when, in 1977, Michael Roe dubbed the standard Leftist optimistic brand as a ''Whig interpretation of Australian history''.  Identifying many of the same characteristics as Coleman had in traditional Left-leaning historians, Roe ran through some of the elements which made Australian history a ''success story'' for them.

He highlighted the fact that ''Australians had outpaced Britons in gaining many of the radical boons defined most emphatically by the Chartists''.  Other aspects of the nation's past which appealed to this school of historians included the Eureka Stockade and the spread of pastoralism.  Most of all, ''the burgeoning of the Labor parties, roughly 1890-1914, ... appears as crucial -- capping the best of what had gone before, and determining much of the future''.

Roe also pointed out that ''Australian Whiggery has had a strong Marxist tincture'', evidenced by historians such as Fitzpatrick, Russel Ward and R.A. Gollan, all of whom ''were confident that Australia was peculiarly the product and property of the working man''.  This was a working man who read the Bulletin, loved the poems of Henry Lawson, idealised mateship, voted Labor and to whom no policy mattered more than White Australia.

Historian John Thompson has identified what has happened to this version of history in more recent decades.

The radical national or Old Left tradition of Australian history has long since fallen from favour.  Indeed, its conspicuous masculinist values and its perceived limitations, evasions or omissions concerning subjects such as race and cultural diversity have been powerfully challenged and progressively revised from the time of the first assault in the late 1960s to the present.

One of the first steps towards the exit door for the ''Three Cheers'' Old Left school came in 1968 when New Left historian Humphrey McQueen launched an attack on Ward and his most famous work, The Australian Legend.  In a 1979 study of Australian historiography, Rob Pascoe draws attention to the fact that many of McQueen's criticisms of the Old Left were similar to those made by Coleman in 1962.

Of course, Coleman and McQueen had very different versions of history with which they wanted to replace the Old Left model, but the fact that the dominant paradigm both were challenging belonged to the Left has been largely forgotten in many of today's simplistic debates.

Interestingly, one of Ward's main arguments, in his response to McQueen's critique, was that the latter was not following the normal forms of historical disagreement, and he hoped that ''some sense of group solidarity with one's fellow historians should help us disagree without rancour and to debate without sneering''.  Ward, and anyone else who challenged the New Left view once it became dominant, was to be sadly disappointed.  The New Left were always willing to fight their battles aggressively.

The replacement of the Old Left historical paradigm by that of the New Left meant that, whereas ordinary Australians were in the past idealised by their historians, they were now regarded with growing suspicion.  Instead of Australians being praised for their belief in democracy, progress and material prosperity, such concepts became problematic;  a view that only became more entrenched among intellectuals when Australians used their democratic rights to protect their material prosperity by voting Liberal in December 1975.  Within a couple of decades, the unthinkable had happened:  concepts such as mateship were being used more by John Howard than by the Left.

There is no doubt that Coleman's 1962 analysis was correct:  the Old Left historians did have a skewed vision of Australia's past.  One should not lament their demise.  However, it is vital to remember them and to understand that, prior to what are now called the History Wars between Left and Right, the battle between the ''Three Cheers'' and ''Black Armband'' views of Australian history was a civil war within the Left.

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Tax grab was not reform

According to Yes Minister, there are two sorts of decisions that governments make.  ''Controversial'' decisions cost votes.  And then there are those famous ''courageous'' ones that cost elections.

But none of the 38 episodes of the comedy series describe the sort of the decision Kevin Rudd made about the resource profits tax.  For the Labor Party the decision to pursue the tax was worse than courageous -- it verged on crazy.  The tax had diabolical electoral consequences, while its policy merits were arguable at best and non-existent at worst.  For Rudd, the personal consequences were devastating.  lf it wasn't for the tax he'd probably still be living in the Lodge.

Of the three people who most vigorously promoted the tax he was the only one who suffered any retribution.  Ken Henry, secretary to the Treasury Department has (for the time being at least) kept his job, while Wayne Swan actually got a promotion and became Deputy Prime Minister.  Such is the fortune of politics.

Kevin Rudd will have plenty of time to contemplate the lessons of the resource super profits tax from the back bench.  The entrails of the episode will be examined for years to come, and the mining industry campaign against the tax will join the Australian Council of Trade Unions campaign against Work Choices in advertising and marketing textbooks.  Inevitably the history of the tax will be rewritten.  Which is why it's important to dispel the three myths already starting to take hold.

The first myth is that ''reform'' is now dead.  Supposedly we've now got proof that the era of grand economic reform is over.  And we're supposed to think this because the government wanted to impose the highest mining taxes in the world, and after an advertising campaign against the tax the government backed down.

So let's correct a few misconceptions.  For starters, simply calling something ''reform'' doesn't mean it is reform.  The resource tax was not reform.  Reform is when government cuts taxes.  Increasing taxes on one of the few internationally competitive industries in this country is not reform.  Only Kevin Rudd would have the temerity to claim that collecting billions of dollars in additional tax was reform.  If increasing tax is the definition of reform then Gough Whitlam was Australia's greatest economic reformer.  Lowering the corporate tax rate doesn't qualify as reform if the price is higher taxes elsewhere in the economy.

The story of what happened to the resource super profits tax doesn't tell us too much about reform.  Instead, it tells us what happens when politicians unquestioningly endorse the theoretical modelling of econometricians that bears no relationship to the experience of the real world.

The second myth about the resource tax is that the changes to it announced by Julia Gillard are another victory for big business.  In fact the reality is that the government's back-down was a victory for a handful of big mining companies.  It was hardly a win for the small and medium-sized explorers and miners that still don't know what sort of tax regime they face.  And it was hardly ''another'' victory.  Since the election of the federal Labor government in 2007 it's difficult to spot what are all the other victories that big business has supposedly won.  The abolition of Work Choices was hardly a triumph for corporate Australia.

Kevin Rudd's delay of his emissions trading scheme had nothing to do with big business.  Big business supported the scheme because it allegedly provided ''business certainty''.  Those wanting to discover a big business conspiracy behind every government decision conveniently forget that there are many instances of business supporting higher taxes and more regulation -- and the emissions trading scheme is just one example of this.  Many companies are not averse to higher taxes if those taxes can be passed on to consumers and if those taxes don't affect the companies' profitability.  Which is what occurred with the emissions trading scheme.

The difference with the resource tax was that the higher taxes the mining companies had to play could not be passed on -- and the tax did affect the companies' profit margins.

The third myth is that it was somehow illegitimate for the mining companies to campaign against the resource super profits tax.  The mining companies had just as much right to run advertising campaigns against Rudd government as the ACTU had to run advertising against the Howard government.  It's true that sometimes the more money you have the louder your voice.  But that's freedom of speech.

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Resource tax blundering has the government digging itself into a deeper hole

Since the Henry review was released, Australians have seen a new tax go from recommendation, to revenue inclusion in budget forecasts, to being dumped -- along with a prime minister.

It's clear the biggest, immediate loser from this exercise has been Kevin Rudd.  But the biggest loser in the whole resource super profits tax (RSPT) shemozzle must be public confidence in the policy process.

Ross Gittins has argued that politicians should not trust economists.  I'll go further:  never trust anyone trying to sell you something you don't understand.

That was the problem with the RSPT.  Many people couldn't understand it and when they did finally understand it they quickly worked out it was a dud.  It didn't help that Rudd and Treasurer Wayne Swan couldn't clearly explain the tax.  Appeals to authority don't work when the product doesn't pass the ''birthday cake'' test.  The 21 economists and other worthy authorities, such as the International Monetary Fund, did themselves no favours by supporting a clearly dud tax.

In a public policy sense the mineral resource rent tax (MRRT) is also flawed.  Locking up the miners and government ministers until they agree on a tax structure is a tad too practical to be good public policy.  It takes the notion of taxation with the consent of the taxed to a whole new level.  From the government's perspective this is policy on the run.  For all its faults -- and there are many -- the Henry review was a considered 18-month inquiry costing $10 million.  Solutions generated in the shadow of a looming election should not inspire public confidence.

Ultimately the MRRT does not solve the basic problem that the RSPT was designed to solve.  A nationally consistent profit-based royalty mechanism to replace the state-based royalties has not been delivered.  For all the talk about a fair return on non-renewable resources, the MRRT has a narrow base and state-based royalties will be credited against the MRRT only if the company is liable for MRRT.

Irrespective of whether the RSPT would have been a good solution to the problem, the MRRT makes no attempt to deal comprehensively with (apparently inefficient) state-based royalties.

It is also unclear how much revenue the MRRT will raise.  There are two benchmarks to consider.  First the MRRT needs to raise more money than the current arrangement where the Commonwealth raises corporate tax and the states charge royalties.

The second benchmark is the RSPT.  We're being told, somewhat implausibly, that the MRRT will raise almost as much revenue as the RSPT.  Yet the uplift factor is nearly double, miners can elect to be taxed on the market value of their assets and the effective tax rate is almost half the RSPT rate.  Ken Henry told the Senate that Treasury had revised its commodity price forecasts when calculating expected MRRT revenue.  The global financial crisis experience is that Treasury forecasts are not reality.  The MRRT revenue claims beggar belief.

So the MRRT doesn't resolve the problem for the RSPT was to have solved, the inefficient state royalty systems, and doesn't seem likely to raise much revenue.  What is making things worse is that Treasury is staying tight-lipped, as if Australians had no right to take an interest in fiscal matters.

The government and Treasury just want us to trust them.  But the lesson of the RSPT debate is that we can't trust them.  These are the same people who told us that miners only pay 17 per cent in tax.  These are the people who called miners liars and ignorant.  These are the people who argued that the uplift factor had to be the government long-term bond rate to avoid over-compensation, and the 40 per cent tax rate was non-negotiable.

After suffering a long series of blunders and falsehood, the community is well within its rights to ask some tough questions.  It is not good enough that the miners are happy to pay a given tax.  The community is entitled to know the costs and benefits of the new tax.  Answers to questions such as how much revenue will the tax raise and how does this tax rate against alternatives, including the status quo, should not be state secrets.

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The Great Disappointment

For progressives, if 2007-08 was the financial year of hope and change, then 2009-10 must have been the financial year of disappointment.

The relentless disappointments of Kevin Rudd have been documented well enough, I think.

Now Julia Gillard, less than a fortnight into her new job, is condemning ''political correctness'' and planning to harden up the government's asylum seeker policy.

It's gotten so bad even Phillip Adams has quit the Labor Party.  Adams was an ALP member for half a century.  Can you imagine how many disappointments he has lived through?  And still sent in his membership renewal?

The Great Disappointment is a worldwide phenomenon.

In the United Kingdom, Gordon Brown was supposed to be a principled revitalisation of the British Labour government -- less polished, but more progressive.  That didn't last long.

There's Barack Obama, whose ascent to the White House throne was accompanied by the global equivalent of a Hillsong service:  non-sexual ecstasy by crowds of swaying thousands.

Yet in retrospect, it doesn't seem like that was really ''the moment when the rise of the oceans began to slow and our planet began to heal'', as Obama manically put it in a post-campaign address.

(What did Obama mean saying the planet would begin to heal?  Geologists have discovered the African continent is slowly ripping itself in two, and will eventually form a new ocean.  Chalk that up as another Obama failure.)

Not only has Obama failed to shut down the Guantanamo Bay detention camp, he's deliberately affirmed many of the war on terror policies -- indefinite detention, warrantless wiretaps, renditions, the assassination of American civilians -- which he damned during the 2008 presidential campaign.  The United States is still in Iraq, and it's ramping up in Afghanistan.

Then there is the disappointment of international action on climate change.  Spare a thought for the 6,172,820 frustrated citizens of Hopenhagen.  They discovered that the awesome power of concentrated motherhood statements could not convince the Chinese economy to power down.

My point is not to revisit the last few years.

And it's not to ask why this generation of leaders have failed to live up to the imaginings of their supporters.

It's to ask why those supporters had such imaginings in the first place.

Many extremely intelligent, politically-mainstream people took Obama's ''change'' rhetoric deeply seriously, were charmed rather than repulsed when Rudd said ''he was here to help'', and imagined that Copenhagen could be a kind of international Kumbaya, where heads of governments would set aside the demands of their own domestic politics and think only of humanity.

Turns out Obama's ''change'' was referring just to a change of government.  Rudd was talking about helping himself.  And Copenhagen was nothing more than a conference full of politicians doing politician things.

So a little more cynicism wouldn't have gone astray.

Writing in The Monthly before the 2007 Australian election, Robert Manne prophesied if Rudd won, ''Australia will become a different and, in my view, a better and more generous country.''

That was a bizarrely optimistic assessment of Rudd's potential.  Yet it was one shared -- perhaps not so boisterously -- by much of the intellectual left who had been traumatised by years of conservative government.

It's too easy to blame the Great Disappointment on the fact that Kevin Rudd was a crazy person.  Or that Barack Obama can't stand up to the Tea Party movement.

Instead, blame the system.  Politics -- and the people who chose to play politics for a living -- don't deserve the ludicrous amount of faith they were given by much of the left.

Liberals and conservatives are used to disappointments.

George W Bush and John Howard were extremely high taxing, high regulating supporters of big government.  If you had hoped otherwise, you'd have had a glum decade.

But more than that, the idea politicians are inherently disappointing is built into liberal and conservative political philosophy.

Politics is not a form of self-expression, or an opportunity for catharsis.  Politics is a game of winners and losers, a means by which special interest groups seek to get themselves maximum private benefit with other people's money.  It's grubby.

Sure, not all politicians are venal and self-serving, but enough of them are.  Even the most honourable political leader has to make compromises which tear their principles apart.

After all, the pursuit of power isn't an ennobling one.  The American journalist Henry Adams called politics ''medieval'', a description I quite like.

Incidentally, that's why liberals and many conservatives believe politics kept in a small, discrete box, as far away from society and as far away from the economy is possible.

Optimism might be a nice way to live your personal life.  But in politics, it just leads to disappointment.

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Revenue grab creates little revenue

The Resources Super Profits Tax (RSPT) comprised two aspects.  One was its naked theft of decades of shareholder investment.  The other was a tax increase on new mines that would derail the locomotive of the Australian economy.

The focus of the Minerals Resource Rent Tax (MRRT) as a replacement of RSPT is on substituting current output based royalties with profit based royalties.  Many see advantages in this and profits based royalties are quite common throughout the world.  But a mechanical change of this nature is not consistent with the Government's revenue estimates.  The RSPT was estimated to raise an additional $9 billion a year.  Based on Government statements, MRRT still raises $7.5 billion a year.

On the information that the Government has presented, it is however difficult to see how the replacement MRRT collects any additional revenue at all.  The RSPT applied to the written down assets of mines but MRRT is levied on their current valuations.  This removes the retrospective tax aspect which accounted for almost all the previously envisaged tax revenue.  Furthermore, MRRT is restricted to iron ore and coal and its rate is reduced from 40 per cent to, in effect, 22.5 per cent.

Other elements of the MRRT would also reduce its revenue raising capacity.  Thus, the tax free threshold becomes the bond rate plus 7 per cent -- about 13 per cent compared with under 6 per cent for the RSPT and new investment is eligible for an immediate write-off.

Moreover, in the case of iron ore, state royalties are likely to generate more tax revenue than the MRRT.  This is because MRRT is to be levied ''as close as possible to the point of extraction'', whereas the present royalty is levied at the port.  As demonstrated by the prolonged litigation over the use of BHP and Rio's Pilbara rail lines, iron ore at the mine head is worth very little.

The Gillard Government recognises that confiscating part of existing investment streams leads the dispossessed to fight tooth and nail.  And no special tax is actually justified.  According to the Australian Tax Office, mining paid an effective tax rate of 28 per cent in 2007/8 (41 per cent including royalties) compared with the average tax rate across all sectors of 25 per cent.

Unlike measures that expropriate existing investments, an increased tax on new projects is a legitimate area for governments to consider.  However, potential resource development cannot simply be milked.

The experience of increased levels of taxation in South Africa, Mongolia, and different Canadian provinces demonstrates the footloose nature of exploration expenditure.  In all these cases higher taxes led to marked reductions in exploration activity.  Australia enjoys no domination of mineral reserves, not even in coal or iron ore -- and the enthusiasm that governments of Australia's rival mining provinces have expressed for our proposed new tax baggage is colourful evidence of this.

Julia Gillard says, ''Australians are entitled to a fairer share of the mineral wealth ... that we all jointly own and ... can only be dug up and sold once''.  But for all practical purposes, mineral deposits, like iPads and AIDS drugs, only exist if someone discovers or invents them.  A special tax on them will seriously dampen the search for hidden wealth.  Hence, any government demanding significantly more sit-down money masquerading as ''fairness'' is likely to see a reduced income stream for the nation as a whole.

For Australia, this is especially the case if the target is mining where local firms have demonstrated world leadership.  Australia imposing an additional tax rate on mining is like the US placing punitive taxes on Apple, Google and Cisco.  And the effect would be similar -- the assembled skills would move or at least see their activities directed to overseas locations.

The fact is that there are not and cannot be any super profits, or ''rents'' in mining for governments to tax.  Entry into the mining industry is open-ended and the existing players are ferociously rivalrous.  Profits of miners can never be sustained at levels significantly above those of average businesses.  Any super profits are whittled down by competition from new ventures.

This is evident in long term profit data.  Australian miners' annual return on capital from 1973 to 2009 was 14.7 per cent, somewhat higher than the all industry average of 13.6 per cent.  Two decades ago, the mining industry's long term return on capital was 11.7 per cent, considerably below the 14.7 per cent average for all industries.  Mining could again experience lower than average profit levels -- and very quickly if the Chinese economy is wobbling.

The Government has said the new MRRT will ''provide certainty''.  This is a curious statement from a government that has created turmoil by announcing, out of the blue, a massive revenue grab.  It is made all the more so by the lack of detail on the provisions of the tax and how it raises the revenue claimed of it.

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A good time to cut the strings

This week marks the 10th anniversary of the GST, however there does not seem to be any congratulatory messages from the states.

It may be a statement of the obvious that nobody would want to be seen celebrating such an occasion, such is the political odium surrounding taxation.  Yet the introduction of the GST was greeted with great fanfare by premiers and chief ministers eager to gain access to more revenue.

Even Labor premiers at the time, although opposing the federal Coalition's GST in principle, signed an agreement giving their states GST revenue in exchange for abolishing a host of inefficient state taxes.

At the final Premiers' Conference in 1999, former prime minister John Howard promised that "for the first time the states will have enough money to fund all the services that they want to fund".

Despite a temporary reduction in GST revenue due to the global financial crisis, proceeds from the tax have surged from $24.4 billion in 2000-01 to $44.5 billion in 2009-10.

This equates to an average annual growth rate of 7 per cent, exceeding state tax growth of 5.8 per cent.

By comparison, payroll tax, transferred by John Gorton to the states in 1971, was estimated to have generated over $16 billion in revenue last financial year.

Financial institutions duty and debits tax, handed over by Bob Hawke, were abolished as part of the GST deal.  If they still existed, they may have raised about $3 billion in 2009-10.

It was not only suggested in the past by the Commonwealth that the states had access to a growth tax, but that the GST was a bona-fide state tax.  Treasury even went so far as to stop publishing estimates of vertical fiscal imbalance for a number of years, on the basis that the misalignment of federal and state spending and revenue had finally been resolved by the GST revenue grants.

However, the states are barred from directly accessing the GST tax base by successive High Court judgments, and GST rates cannot be adjusted by an individual jurisdiction.

Even though the abolition of some transaction-based state taxes had a positive effect on economic efficiency, the GST aggravated the perverse incentives surrounding the Commonwealth keeping the fiscal purse.

As foreshadowed by former prime minister Alfred Deakin as early as 1902, the states are firmly entrenched in a position of dependence that has "left them legally free, but financially bound to the chariot wheels of the Commonwealth".

It has been long established in the fiscal federalism literature that an extensive fiscal imbalance across governments blurs political accountability to the electorate.  A manifestation of this is the intergovernmental "blame game", a much despised aspect of Australian politics for average voters.

Significantly, the reliance of the states on Commonwealth funding also leaves state constitutional responsibilities prone to capture by federal politicians eager to extend their policy influence.  This has been illustrated in no uncertain terms by the Gillard Government's move to exert far greater federal involvement in public hospital governance and funding, which hinges on the clawback of 30 per cent of GST revenues that would otherwise flow freely to the states.

With the key problem of centralised state bureaucracies presiding over a hospital system that heavily restricts access to services left unresolved, the door is ajar for additional future stipulations by the Commonwealth as to how states must expend GST revenues.

It would be misleading to characterise the GST as nothing more than a Trojan horse storming the citadel of state government policy.  Indeed, the GST changes coincided with the election of new state governments eager to overcome the alleged spending "neglect" of their predecessors.

State general government expenditure increased from $99.9 billion in 2000-01, the first full year of the GST, to an estimated $187.4 billion in 2009-10.

Instead of a transformative improvement in service delivery outcomes under the GST, such as in education, health or transport, much of the extra money spent has been dissipated in public service wages and salaries.

Over the course of the decade, state general government sector employee expenses rose from $39.3 billion to $73.3 billion.  The average annual growth rate of this spending exceeded that of the GST.

This GST-fuelled spending binge ultimately proved to be unsustainable.  Annual growth in state general government spending overshot the increase in revenue, which eventually led to budget deficits that must now be reined in.

Rather than fortifying the position of states as autonomous political entities in the federation, the GST reform has effectively extended the reach of Canberra into state affairs.

The influx of additional revenue has also encouraged big-spending premiers and chief ministers to waste a golden opportunity to reform how states are being managed.  Most significantly, the product of these two forces has meant that a decade-long promise of a functional federalism has once again been dashed.

The unfulfilled promise of Australian federalism will continue until such time that lower levels of government are equipped with real revenue-raising responsibilities with no federal strings attached.

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Exposed: The Inaccurate and Inappropriate Campaign by Zoos Victoria

EXECUTIVE SUMMARY

Zoos Victoria is constituted by the State of Victoria under the Zoological Parks and Gardens Act 1995 and is responsible to Environment Minister, Gavin Jennings.  Last year, Zoos Victoria received $14.6 million of taxpayer funds.

One of the functions of Zoos Victoria is ''to carry out and promote zoological research, the conservation of wildlife and its natural habitats and the maintenance of biodiversity''.  It is on these grounds that Zoos Victoria has transformed into a ''Zoo-based Conservation Organisation'', engaging in public advocacy campaigns – including the Don't Palm Us Off campaign.

However, Zoos Victoria is in danger of overstepping the mark.  The Don't Palm Us Off campaign is a political campaign aimed at pressuring politicians to regulate for the mandatory labelling of palm oil in products sold in Australia.

There is no evidence that the Don't Palm Us Off campaign is aimed at conservation of the Orang-utan or their habitat.  Nor is there evidence that targeting the use of palm oil in Australia will have any benefit for Oran-utan populations.  Out of the twelve 'facts' promoted by Zoos Victoria to support its Don't Palm Us Off campaign, only two are actual facts, eight are false and the remainder cannot be substantiated.

By running a campaign which is based on substantially false claims, Zoos Victoria is running a political advocacy campaign – not a conservation campaign.

This means that Zoos Victoria is treading a fine line between the use and misuse of public funds.

Instead of running its Don't Palm Us Off political campaign, Zoos Victoria should refocus its resources on delivering evidence-based zoological services to Victorians.

Zoos Victoria's 'Facts'	'Facts' status
Over 85% of the world's palm oil comes from Malaysia and Indonesia	TRUE
Today, the most common cause of deforestation and fragmentation in Indonesia is related to palm oil development	FALSE
An estimated 40% of food on our supermarket shelves contains palm oil	UNKNOWN
In SE Asia alone, the equivalent of 300 football fields are deforested every hour for palm oil production	FALSE
Palm oil typically costs the lives of up to 50 Orang-utans each week	UNKNOWN
Australians unknowingly consume on average 10 kilograms of palm oil each year because we do not currently have the ability to exercise consumer choice	FALSE
Sustainable Palm Oil Plantations are a possibility however you need you to tell FSANZ you want palm oil labelling if they are to become a reality	FALSE
Once palm oil is labelled, consumers can actually drive a market for proper certified sustainable palm oil because they can demand it of manufacturers (as we've seen with Fair Trade and Rainforest Alliance products)	FALSE
Palm oil from certified sustainable RSPO sources only accounts for 8 percent of the global supply of palm oil	FALSE
90% of Orang-utan habitat has been lost already.  If all of it is lost then so are the livelihoods of many people	UNKNOWN / FALSE
The industry needs to increase yields on land that has already been cleared but right now there is very little incentive for them to do this	FALSE
We share 97% of our DNA with Orang-utans.  You could say they are our wild cousins	TRUE

1.0 INTRODUCTION

Zoos are typically non-controversial and benign institutions dedicated to preserving and educating the public on animal species.

But as Australia's oldest zoo, and one of the oldest in the world, Melbourne Zoo, as part of Victoria Zoos, has recently begun engaging in political activity by running campaigns in favour of environmental causes.

The most glaring example of this is the Don't Palm Us Off campaign which draws public attention to palm oil and its alleged contribution to deforestation and the loss of orang-utan populations in Indonesia and Malaysia.

But the campaign is more than just drawing the public's attention to Melbourne Zoo's concerns.  The campaign is now encouraging Australians to engage in political activity to support its view through promotional activities and petitions.

As part of the campaign, Zoos Victoria is now advocating for Australians to lobby Parliamentarians for legislative reform.

This occasional paper will look at the activities of Zoos Victoria and assess the legitimacy and merit of their recent emergence as a political campaign entity and consider the impact of its current direction.

2.0 ABOUT ZOOS VICTORIA

Zoos Victoria is a statutory authority operating under the Victorian Parliament's Zoological Parks and Gardens Act 1995.  Zoos Victoria is currently responsible for the operation and management of three Zoos – the Melbourne Zoo, Healesville Sanctuary and Werribee Open Range Zoo.

Under The Act, Zoos Victoria's governance is provided by its Board, and is responsible to the relevant Minister currently identified as the Minister for Environment and Climate Change, Gavin Jennings.

Under The Act the Board functions:

1. to conserve, protect, manage and improve the zoological parks and managed land and the zoological collections.
2. to promote and increase public enjoyment of the zoological collections and the zoological parks and managed land.
3. to increase public knowledge and awareness of the zoological collections and zoological parks through exhibition of the zoological collections, publications, educational programs, advisory services and other activities.
4. to carry out and promote zoological research, the conservation of wildlife and its natural habitats and the maintenance of biodiversity.
5. to advise the Minister on matters relating to the Board's functions or powers or on any other matter referred to it by the Minister.
6. to provide consultancy and advice services to the public on zoological matters.
7. to provide for services and facilities for visitors to the zoological parks and managed land.
8. to carry out any other functions conferred on it by this or any other Act. ⁽¹⁾

As a consequence, the clear intention of The Act is for the Zoos Victoria Board to be responsible for the management of Victoria's zoological attractions, to promote these to Victorians, to appropriately engage in research that supports zoological efforts, and to provide advice to the public on matters related to the zoo.

Zoos Victoria operates on a number of different income sources.  The majority of funding is provided through private sources, notably ticket sales and retail income.  A modest return is also delivered as a result of the income derived from assets.  The other major source of income is the taxpayers of Victoria.  According to the Financial Statements of its 2008/09 Annual Report, Zoos Victoria receives government grants amounting to $14.6 million. ⁽²⁾  Of that $14.6 million, $13.4 million is recurrent contributions and $1.2 million is non-recurrent.

3.0 ZOO VICTORIA'S TRANSFORMATION

Zoos Victoria is the custodian of Australia's oldest, and one of the world's oldest zoos – Melbourne Zoo.  In addition to Melbourne Zoo, the state government entity is also responsible for the Werribee Open Range Zoo and Healesville Sanctuary and managing the operations of these zoos remains its primary role.

But recently Zoos Victoria has sought to redefine its role.  In July 2009, Zoos Victoria launched its 2009 – 2029 Zoos Victoria Strategic Plan. ⁽³⁾  A key platform of its Strategic Plan was to transition Zoos Victoria's activities from fulfil its transition from a ''Traditional Zoo'' to a ''Zoo-based Conservation Organisation''.  Table 1 outlines the differences between a ''traditional zoo'', a ''21st Century Zoo'' and a ''Zoo-based Conservation Organisation''.

As a Zoo-based conservation organisation Zoos Victoria is seeking to transform itself as a public institution designed to provide zoological services to the public, notably the exhibiting of animals, and broadening its mandate to engage in campaigning, and inspiring Victorians to engage in campaigning, on conservation issues.

According to Zoos Victoria, being a zoo-based conservation organisation involves:

• Opening the door by providing exceptional wildlife encounters that reach beyond the boundaries of our campuses.
• Leading the way by communicating and demonstrating the role of conservation and research in all we (Zoos Victoria) do
• Catalysing action through inspiring experiences that motivate participation leading to conservation and sustainability outcomes. ⁽⁴⁾

As well as:

• Influencing key decision makers
• Associations with like organisations, and
• Advocacy on behalf of conservation. ⁽⁵⁾

And while Zoos Victoria outlines a number of performance indicators, one of the most relevant for its broadened role is to measure the ''presence of Zoos Victoria's voice in conservation issues – through the number of stories in the media and the number of contributions to industry publications and conferences.'' ⁽⁶⁾  And in delivering its revised mandate, Zoos Victoria is also seeking the support of its staff to implement these programs.  Zoos Victoria wants ''to run successful call-to-action environmental campaigns and programs that are linked to our priority conservation programs and/or those of our partners'' and ''to ensure staff ... are knowledgeable, supportive, actively engaged and advocates.'' ⁽⁷⁾

Table 1 | Zoos Victoria's activities transition

Role	Primary activity	Animal collection	Funding
Traditional Zoo	Concerned with the delivery of animal-based recreation Social service that delivers family-based recreation at a reasonable price Educational programs for schools	Availability Public appeal Director's preference	Government-supported Commercially-orientated Public attendance
21st Century Zoo	Animal-based, recreation destination with conservation as its main focus Educational programs, involvement in conservation projects and involvement in research projects support operations	Consideration of the collection to conservation outcomes Sustainable collection Capturing animals from the wild is undesirable	Government-supported Public attendance Philanthropic support Commercially-orientated
Zoo-based Conservation Organisation	Conserve threatened species Direct conservation activities that have tangible conservation benefits Advocating for wild places and wildlife Supporting habitat conservation and environmental sustainability by engaging with and influencing the behaviour and actions of visitors, communities and stakeholders	Species as part of recovery programs Endangered species Species that promote conservation messages Species that enable visitors to connect with animals Species related to research priorities	Government-supported Public attendance Philanthropic support Consulting Partnerships Leveraging assets

Source:  Adapted from Zoos Victoria, 2009, ''2009 – 2029 Zoos Victoria Strategic Plan'', Parkville, Australia

4.0 BECOMING A ZOO-BASED CONSERVATION ORGANISATION

In becoming a ''Zoo-based Conservation Organisation'', Zoos Victoria will continue managing zoos.  But in addition, they have taken on a number of Australian and international conservation programs, in part, designed to assist in the preservation of species through ''sophisticated recovery programs'' for endangered or rare species. ⁽⁸⁾  Programs are outlined in Table 2.

Table 2 | Zoos Victoria's Australian and international conservation programs

Conserving Australia's wildlife	International conservation
Tasmanian Devil Southern Corroboree Frog Eastern Barred Bandicoot Helmeted Honeyeater Mountain Pygmy-possum Orange-bellied parrot Spotted Tree Frog Sunshine Diuris Orchid	Melako Community Conservancy Tenkile Convservation Program Sumatran Conservation Program Cardamom Mountains – Cambodia Philippine Crocodile Recovery Program Conserving Asian Freshwater Turtles

Source:  Zoos Victoria, 2009, ''Australian Conservation Programs'', Parkville, Australia and Zoos Victoria, 2009, ''International Conservation Programs'', Parkville, Australia

The role of Zoos Victoria in Australian conservation programs is unlikely to be controversial.  While it likely overlaps with other State and Federal government agency roles, Australian zoos reasonably have a responsibility for the conservation of Australian species.

Table 3 | Zoos Victoria's sponsored campaigns

Campaign	Detail
Act4Nature	Zoos Victoria is supporting the Act4Nature campaign which encourages individuals to take action to address environmental degradation.  Each month the campaign focuses on an individual species that may be threatened by environmental degradation. (9)
Don't Palm Us Off	A political campaign lobbying Food Standards Australia and New Zealand to label palm oil separately from other oils currently labelled ''vegetable oils''.  Zoos Victoria will cease collecting signatures for its petition to support separate food labelling from the 1st of July 2010.
Beads for Wildlife	The sale of beads from Kenya to provide a livelihood for the Rendille people who are working to support the preservation of zebras and elephants.
Seal the Loop	Seal the Loop is designed to improve recycling to limit the environmental and wildlife harm caused from waste, particularly plastics, in the ocean by placing bins from recycled plastics in known fishing locations.
They're Calling on You	A campaign to encourage consumers to recycle their mobile phones to reduce the demand for coltan mining in Africa that is claimed to result in the destruction of habitats for gorillas and contribute to local unrest.

Source:  Zoos Victoria, 2009, ''Zoos Victoria's Campaigns'', Parkville, Australia

International conservation projects are more controversial, especially on the basis that State-based taxpayer dollars are now being used in foreign projects that should ordinarily be left to the Federal government.  Similarly, there are grounds to argue that the conservation of foreign species outside of Australia reasonably belongs with the governments of those countries.  But in light of the development stages of those countries, Australia has a part to play in conservation in the short to medium period.

In addition to Zoos Victoria's conservation programs, they are also engaging in a number of sponsored campaigns to promote their Zoos-based conservation agenda.  The zoo-based conservation agenda is a new and radical direction for zoos, which focuses on the organisation and their staff engaging in campaigning and political activity.  Table 3 outlines the main sponsored campaigns.  The campaigns vary in their activity, but primarily involve encouraging greater awareness about potential environmental threats that may harm wildlife species, and provide recommendations about how these potential environmental threats can be addressed.

But one of the campaigns does not take the form of promoting awareness – Don't Palm Us Off – and instead encourages political campaigning on public policy issues.

5.0 THE Don't Palm Us Off POLITICAL CAMPAIGN

The Don't Palm Us Off campaign was launched in mid-August 2009 at Melbourne Zoo to promote awareness of concerns that the Malaysian and Indonesian palm oil industries are contributing to the loss of habitat for orang-utans.

As part of the Don't Palm Us Off campaign, Zoos Victoria has attracted celebrity ambassadors and is encouraging Australians to sign petitions against palm oil.

The Don't Palm Us Off campaign includes a number of different avenues to raise awareness, including a schools campaign that encourages students to turn information they learned at the zoo into action by auditing their canteen of products that may contain palm oil and completing a postcard signature drive to raise awareness of the objectives of the Don't Palm Us Off campaign. ⁽¹⁰⁾

5.1 THE POLITICAL RESPONSE

The cause of the Don't Palm Us Off campaign has been taken up by Independent South Australian Senator, Nick Xenophon, who introduced the Food Standards Amendment (Truth in Labelling - Palm Oil) Bill 2009.  The Bill is currently being considered by an Inquiry of the Senate Community Affairs Committee which has attracted at least 327 submissions. ⁽¹¹⁾  However, the vast majority of these submissions are from individuals who are repeating the core messages of the Don't Palm Us Off campaign. ⁽¹²⁾

The proposed Bill would require the separate labelling of palm oil and privately certified sustainable palm oil (CS palm oil) on food product labels.  It is argued by its proponents that because the production of palm oil may lead to some environmental degradation, consumers may wish to reserve the right to not consume products which include palm oil or non-certified sustainable palm oil, and that without separate labelling they will be denied that choice.

The purpose of the Bill is ''to ensure that consumers have clear, accurate information about the inclusion of palm oil in foods;  and ... to encourage the use of certified sustainable palm oil in order to promote the protection of wildlife habitat''. ⁽¹³⁾

Similarly, The Council of Australian Governments has commissioned a review into Australia's food labelling policy and laws chaired by Dr Neal Blewett AC.  In its issues consultation paper, the committee raised a series of questions addressing possible justifications and proposals for reform of Australia's food labelling regulations.  These included the mandatory labelling of palm oil ingredients. ⁽¹⁴⁾

5.2 INCORRECT 'FACTS' OF THE Don't Palm Us Off POLITICAL CAMPAIGN

But the campaign against palm oil by Zoos Victoria, Senators Xenophon, Brown and Joyce, and its inclusion in the COAG food labelling review is founded on false information.  Included as part of the Don't Palm Us Off campaign is a fact sheet which makes a number of claims.  As Table 5 outlines, out of the twelve 'facts' put forward by Zoos Victoria, only 2 are true, with the remaining 10 either being false or unable to be substantiated.

In fact the broad campaign against palm oil is based on a misinterpretation that deforestation is responsible for reduced orang-utans habitats.  Palm oil is not responsible for deforestation.  Poverty is.

Deforestation occurs around the world as poor farmers seek to lift themselves out of poverty through the production of commodities that are in demand in domestic and international markets.

As the world's largest traded oil, palm oil is in heavy demand throughout the developing and developed world because it is a high-yield, trans-fat free, Vitamin A-rich, low-cost oil. ⁽¹⁵⁾  Without palm oil deforestation would still occur in the developing world.  But instead of palm oil, growers would simply produce different crops, such as replacement oil seeds.  Such a scenario would lead to expanded environmental degradation and deforestation because of the relatively low-yield of alternatives.

Based on data from Oil World ⁽¹⁶⁾ palm oil remains the most efficient oil seed.  Even one of palm oil's critics and sponsors of the Bill, Senator Bob Brown, acknowledges that ''oil palm is the most productive oil seed''. ⁽¹⁷⁾

Table 4 | Zoo Victoria's 'facts' versus the facts

Zoo Victoria's 'Facts' 1	'Facts' status	The Facts
Over 85% of the world's palm oil comes from Malaysia and Indonesia	TRUE	Based on United States Department of Agriculture Data approximately 86 per cent of the world's palm oil is sourced from Malaysian and Indonesian major and small holder palm oil plantations. 2
Today, the most common cause of deforestation and fragmentation in Indonesia is related to palm oil development	FALSE	The Stern Review on the economics of climate change found less a fifth of cleared forest in Indonesia was to support the palm oil industry, and less than a third in Malaysia. 3
An estimated 40% of food on our supermarket shelves contains palm oil	UNKNOWN	The percentage of products including palm oil vary, but it is accepted that a large percentage of consumer products do contain palm oil as an ingredient.
In SE Asia alone, the equivalent of 300 football fields are deforested every hour for palm oil production	FALSE	The claim that 300 football fields are deforested first appeared in a Greenpeace short paper – INDONESIA, a great country? 4  But as the title suggests the paper wasn't about South East Asia, it was only about Indonesia.  And the data sourced from an FAO report didn't discuss palm oil and deforestation;  it was about illegal logging in general.  And since the release of the paper the FAO has downgraded the volume of logging by a quarter. 5
Palm oil typically costs the lives of up to 50 Orang-utans each week	UNKNOWN	There is no supportable evidence for this claim.  The potential loss of orang-utan populations varies from campaign to campaign.  For example Perth Zoo claims that up to 6,000 orang-utans are dying each year, or around 116 a week, and allude that the palm oil industry is responsible. 6
Australians unknowingly consume on average 10 kilograms of palm oil each year because we do not currently have the ability to exercise consumer choice	FALSE	It is impossible to know whether Australians unknowingly consume a product.  Consumers can exercise consumer choice by buying products that carry the Roundtable for Sustainable Palm Oil logo.
Sustainable Palm Oil Plantations are a possibility however you need to tell FSANZ you want palm oil labelling if they are to become a reality	FALSE	Sustainable Palm Oil Plantations are already a reality and are certified by the Roundtable for Sustainable Palm Oil. 7
Once palm oil is labelled, consumers can actually drive a market for proper certified sustainable palm oil because they can demand it of manufacturers (as we've seen with Fair Trade and Rainforest Alliance products)	FALSE	Both Fair Trade and Rain Forest Alliance products are not legally required to be labelled.  Their markets are driven by voluntary labelling.  Legally requiring certified sustainable palm oil will create a non-voluntary artificial market operating nothing like Fair Trade and Rainforest Alliance products. 8
Palm oil from certified sustainable RSPO sources only accounts for 8 percent of the global supply of palm oil	FALSE	According to the Roundtable on Sustainable Palm oil its membership represents 35 per cent of the world's palm oil production. 9
90% of Orang-utan habitats have been lost already.  If all of it is lost then so are the livelihoods of many people	UNKNOWN / FALSE	The reality is that data on the world's orang-utans is unknown and at best there are only estimations available.  But it is false to suggest that people will lose their livelihoods from the loss of orang-utan populations.
The industry needs to increase yields on land that has already been cleared but right now there is very little incentive for them to do this	FALSE	The primary incentive for producers to increase yields is to make profits using fewer resources to produce more palm oil.  The United States Department of Agriculture considers yield growth one of the more important contributing factors to the growth of global production over recent years. 10
We share 97% of our DNA with Orang-utans.  You could say they are our wild cousins	TRUE	A recent paper published in the Journal of Biogeography supports the conclusion that humans share a percentage of DNA with different types of orang-utan. 11

Table 4 Sources:

¹ Zoos Victoria, 2010, ''Don't Palm Us Off Facts''

² Calculated from data found at Foreign Agriculture Service, 2010, ''Table 16 Copra, Palm Kernel and Palm Oil Production'', United States Department of Agriculture

³ Greig-Gran, M., 2008, ''The cost of avoiding deforestation:  Update of the report prepared for the Stern Review of the Economics of Climate Change'', International Institute for Environment and Development, London, United Kingdom

⁴ Greenpeace, 2005, ''INDONESIA, a great country?''

⁵ World Growth, 2009, ''Caught red handed:  The Myths, Exaggerations and Distortions of Greenpeace, Friends of the Earth and Rainforest Action Network'', Green Papers, i4

⁶ Perth Zoo, 2009, ''Orangutan breeding success''

⁷ Roundtable on Sustainable Palm Oil, 2009, ''Overview of RSPO''

⁸ Wilson, T., ''Fair trade and voluntarism'', in Macdonald, K. & Marshall, S. (Eds), 2010, ''Fair trade, corporate accountability and beyond:  Experiments in global justice'', Ashgate Publishing, Surrey, United Kingdom

⁹ Roundtable on Sustainable Palm Oil, 2009, ''Overview of RSPO''

¹⁰ Foreign Agriculture Service, 2005, ''Malaysia:  Palm oil yields surprisingly high'', Production estimates and crop assessment division, United States Department of Agriculture

¹¹ Grehan, J.R. & Schwartz, J. H., 2009, ''Evolution of the second orangutan:  phylogeny and biogeography of hominid origins'' Journal of Biogeogrpahy, v36

Table 5 outlines the yield potential of four major competing oils and clearly identifies the high-yield potential of palm oil.  Should alternative oils be grown more land would be needed to produce an equivalent volume of oil to replace palm oil likely resulting in further deforestation.

Table 5 | Comparison of oil yield (tonne / hectare)

Oil	Tonnage per hectare
Soybean oil	0.37
Sunflower oil	0.50
Rapeseed oil	0.75
Oil palm	4.09

Source:  Oil World, 2010, ''Oil World Annual 2020'', Hamburg, Germany

While this may appear to be a contestable claim, Zoos Victoria actually supports this conclusion in an alternative campaign they are running.  The Beads for Wildlife campaign is designed to encourage visitors to Werribee Open Range Zoo to buy beads produced in Kenya.  The objective is to provide a livelihood for the Rendille people of Melako, Kenya through the purchasing of products they produce.  According to Zoos Victoria ''it is easier saving wildlife when you have a steady income and food in your stomach''. ⁽¹⁸⁾

Political campaigns against palm oil have a cost – economic instability for the roughly one million Indonesians and Malaysian workers who depend on the industry for their livelihoods and the millions of people dependent on it as a dietary staple.

Being an agriculture crop principally grown in developing countries, small holder palm oil farmers include some of the world's poorest producers.  And they are not insignificant contributors to the industry.

In Malaysia small holders account for up to 40 per cent of the total area of planted oil palm and in Indonesia it is 45 per cent. ⁽¹⁹⁾  And the industries in both countries support hundreds of thousands of workers.  That is one of the reasons why the Asian Development Bank finances palm oil projects, whose success ensures that it delivers strong repayment rates on loans from funded projects. ⁽²⁰⁾

5.3 THE PROBLEM WITH THE Don't Palm Us Off POLITICAL CAMPAIGN

Zoos Victoria is a public entity who is clearly charged with responsibility of delivering zoological services.  While its responsibilities under The Act are broad, the intention of the focus of the organisation is clear.

Zoos Victoria is clearly and rightly given some latitude by the government and the people of Victoria to deliver zoological services.  And while the role of Zoos Victoria to participate in international conservation programs may be a questionable use of the public resources provided to it to deliver Victorian zoological services, it is not an outright misuse of taxpayer's funds.  Similarly, its sponsored campaigns are a broad interpretation of Zoos Victoria's role.

The same standard does not apply to the Don't Palm Us Off political campaign.  By encouraging Australians to petition their government and regulators to take political action in favour or against a particular product is a misuse of taxpayer's dollars.

The Don't Palm Us Off campaign also raises a number of serious issues about the role of government agencies using public funds to campaign for changes to the rules and regulations of other government agencies.

Similarly, the irresponsible publication of incorrect facts brings into question the credibility and responsibility of Zoos Victoria to act in the best interests of Victorian taxpayers and fulfil its mandate to engage in evidence-based research with which to educate Victorians on zoological matters.

7.0 CONCLUSIONS

Zoos Victoria has an obligation to provide zoological services to Victorians, and while the latitude provided to deliver those services is broad the vast majority of services provided fulfil those guidelines.

But Zoos Victoria's Don't Palm Us Off campaign does not.

Instead of being a conservation campaign the Don't Palm Us Off campaign is a political campaign to encourage Australians to petition Food Standards Australia and New Zealand to regulate for food labelling regulations to require the disclosure of the use of palm oil and its production method.

Zoos Victoria is currently using Victorian taxpayer dollars to run its political campaign and raises serious issues about the role of government agencies campaigning for other government agencies to change their practices.

Zoos Victoria's campaign is also based on a series of largely false claims about the cause of deforestation in Indonesia and Malaysia.

Out of the twelve 'facts' put forward by Zoos Victoria, only 2 are true, with the remaining 10 either being false or unable to be substantiated.

In the short term the consequence is that Zoos Victoria is misleading Victorians and Australians, and in the long-term is likely to result in greater environmental damage and harm because of the ill-considered consequences of denying Indonesians and Malays in rural areas of their livelihood.

Instead of running its Don't Palm Us Off political campaign, Zoos Victoria should refocus its energy on delivering evidence-based zoological services to Victorians.

8.0 REFERENCE LIST

• ACT4Nature, 2010, ''About Act4Nature''
• Asian Development Bank, 1999, ''Project performance audit report on the West New Britain small holder development project''
• Brown, B., 2009, ''Second reading speech:  Food Standards Amendment (Truth in labelling – Palm oil) Bill 2009'', Australian Senate, Commonwealth of Australia, Canberra, Australia
• Community Affairs Committee, 2010, ''Inquiry into Foods Standards Amendment (Truth in Labelling – Palm Oil) Bill 2009'', Parliament of Australia, Canberra, Australia
• Council of Australian Governments, 2010, ''Issues Consultation Paper:  Food Labelling Law and Policy Review'', Canberra, Australia
• Foreign Agriculture Service, 2005, ''Malaysia:  Palm oil yields surprisingly high'', Production estimates and crop assessment division, United States Department of Agriculture
• Foreign Agriculture Service, 2010, ''Table 16 Copra, Palm Kernel and Palm Oil Production'', United States Department of Agriculture
• Greenpeace, 2005, ''INDONESIA, a great country?''
• Grehan, J.R. & Schwartz, J. H., 2009, ''Evolution of the second orangutan:  phylogeny and biogeography of hominid origins'' Journal of Biogeogrpahy, v36
• Greig-Gran, M., 2008, ''The cost of avoiding deforestation:  Update of the report prepared for the Stern Review of the Economics of Climate Change'', International Institute for Environment and Development, London, United Kingdom
• Oil World, 2010, ''Oil World Annual 2020'', Hamburg, Germany
• Parliament of Victoria, 1995, ''Zoological Parks and Gardens Act'', Victoria, Australia
• Perth Zoo, 2009, ''Orangutan breeding success''
• Roundtable on Sustainable Palm Oil, 2009, ''Overview of RSPO''
• UNICEF, 2004, ''Vitamin and mineral deficiency:  A global damage assessment report'', United Nations, New York
• Vermeulen, S. & Goad, N., 2006, ''Towards better practice in smallholder palm oil production'', International Institute for Environment and Development, p4
• Wilson, T., ''Fair trade and voluntarism'', in Macdonald, K. & Marshall, S. (Eds), 2010, ''Fair trade, corporate accountability and beyond:  Experiments in global justice'', Ashgate Publishing, Surrey, United Kingdom
• World Growth, 2009, ''Caught red handed:  The Myths, Exaggerations and Distortions of Greenpeace, Friends of the Earth and Rainforest Action Network'', Green Papers, i4
• Zoos Victoria, 2009, ''2009 – 2029 Zoos Victoria Strategic Plan'', Parkville, Australia
• Zoos Victoria, 2009, ''Action area – conservation''
• Zoos Victoria, 2009, ''Australian Conservation Programs'', Parkville, Australia
• Zoos Victoria, 2009, ''Beads for Wildlife''
• Zoos Victoria, 2010, ''Don't Palm Us Off Facts''
• Zoos Victoria, 2009, ''Don't Palm Us Off – Get Your School Involved'', Parkville, Australia
• Zoos Victoria, 2009, ''Vision and Mission'', Parkville, Australia
• Zoos Victoria, 2009, ''Zoos Victoria Financial Report''

---

ENDNOTES

1.  Parliament of Victoria, 1995, ''Zoological Parks and Gardens Act'', Victoria, Australia

2.  Zoos Victoria, 2009, ''Zoos Victoria Financial Report''

3.  Zoos Victoria, 2009, ''2009 – 2029 Zoos Victoria Strategic Plan'', Parkville, Australia

4.  Zoos Victoria, 2009, ''Vision and Mission'', Parkville, Australia

5.  Zoos Victoria, 2009, ''2009 – 2029 Zoos Victoria Strategic Plan'', Parkville, Australia

6.  Zoos Victoria, 2009, ''2009 – 2029 Zoos Victoria Strategic Plan'', Parkville, Australia

7.  Zoos Victoria, 2009, ''Action area – conservation''

8.  Zoos Victoria, 2009, ''Australian Conservation Programs'', Parkville, Australia

9.  ACT4Nature, 2010, ''About Act4Nature''

10.  Zoos Victoria, 2009, ''Don't Palm Us Off – Get Your School Involved'', Parkville, Australia

11.  As listed on the Senate Community Affairs Committee's website on 21st of June 2010

12.  Community Affairs Committee, 2010, ''Inquiry into Foods Standards Amendment (Truth in Labelling – Palm Oil) Bill 2009'', Parliament of Australia, Canberra, Australia

13.  Community Affairs Committee, 2010, ''Inquiry into Foods Standards Amendment (Truth in Labelling – Palm Oil) Bill 2009'', Parliament of Australia, Canberra, Australia

14.  Council of Australian Governments, 2010, ''Issues Consultation Paper:  Food Labelling Law and Policy Review'', Canberra, Australia

15.  UNICEF, 2004, ''Vitamin and mineral deficiency:  A global damage assessment report'', United Nations, New York

16.  Oil World, 2010, ''Oil World Annual 2020'', Hamburg, Germany

17.  Brown, B., 2009, ''Second reading speech:  Food Standards Amendment (Truth in labelling – Palm oil) Bill 2009'', Australian Senate, Commonwealth of Australia, Canberra, Australia

18.  Zoos Victoria, 2009, ''Beads for Wildlife''

19.  Vermeulen, S. & Goad, N., 2006, ''Towards better practice in smallholder palm oil production'', International Institute for Environment and Development, p4

20.  Asian Development Bank, 1999, ''Project performance audit report on the West New Britain small holder development project''