In Defence of More Freedom

Occasional Paper

THE WILD-EYED DIATRIBES OF IRAN'S MAHMOUD AHMADINEJAD REGISTER AS EXTREME EVEN BY THE HOTHOUSE STANDARDS OF THE MIDDLE EAST.

First, the Iranian president denied the Holocaust.  Then, so as to leave nobody in doubt, he threatened to wipe Israel off the map.

To my knowledge, only one other world leader in the past 60 years has advanced seriously the notion of obliterating another nation.  That was Cuba's Fidel Castro during the missile crisis of the early 1960s, when he urged the Soviets to launch pre-emptive nuclear strikes against the United States.  Thankfully, Khrushchev would have none of it.

That Iran's president has been prepared to speak so publicly, so ghoulishly, of his ambition to reduce Israel to nothingness says something about the dangers of strategic weapons in the possession of the fevered minds of zealots.  For while there may have been a bleak genius to the Cold War calculus of mutually assured destruction, this remained so only for as long as those in command of the doomsday technology were rational actors.

Ahmadinejad, elected one year ago, styles himself as the authentic voice of a great nation of 70 million.  In fact, he represents a tight circle of power within Iran, a radical clerical elite which masquerades cynically as a democracy.  Yes, Iran has an elected assembly, but it is the Council of Guardians which determines who is -- and, more often, who is not -- eligible to stand.  It is this same shadow state that controls the secret police and Revolutionary Guards.  It is this Iran that sponsors international terror.  It is this Iran that has been pursuing nuclear weapons for 20 years in blatant defiance of the international protocols.  It is this Iran that is making mischief through its proxies in Iraq.

To that extent, the advent of Ahmadinejad has helped to crystallise the great challenges to global security early in the 21st century -- the risk that one day not too far away a megalomaniac will get his hands on a weapon of mass destruction.  This is the emerging security threat George W. Bush has gone to great pains to stress in world forums since the September 11 attacks on America.  It represents the broad strategic underpinning for all that has happened since, including wars in Afghanistan and Iraq, global efforts to hunt down terror networks, the attempt to put some punch back into nuclear non-proliferation and the tense diplomatic stand-offs with North Korea and Iran.

Most ambitiously of all, it is driving the US president's project to liberalise the politics of the greater Middle East.  For too long, the region has been brutalised by the notion that power is won, and preserved, only through fear and subjugation.  Alarmingly, with radical Islamism on the march, this violent narrative now has been stamped for worldwide export.

Bush's place in history will be defined by his progress on this agenda.  He has bet the ranch on two propositions:  first, that the people of the Middle East are willing to make great sacrifices to wrest back control of their lives from the demagogues and dictators;  second, that his fellow Americans, and their allies, will continue to make great sacrifices to help win the freedom of others.  Neither outcome is assured.

The president argues the expansion of freedom's frontier is the best -- perhaps the only -- long-term cure for the social deprivation and economic backwardness in the Middle East.  Social and political reform, after generations of misrule by a motley crew of despots, princes and potentates, constitutes the only likely antidote to the tide of radicalism in the region so worrying for global security.  Yet, approaching five years into this campaign, it has to be said Bush is struggling desperately to cut through with this message.

There have been concrete advances wrought by the demonstration effect of US actions.  The milestones include elections in Iraq, an orderly transfer of power in Lebanon, pardons for jailed democracy activists in Saudi Arabia, the enshrining of women's rights in Kuwait, tentative concessions to political freedoms in Egypt and even Libya, and massive protests in Morocco and Jordan against the ultra-violence of al-Qaeda.  Is anyone suggesting the return of girls to the classrooms of Afghanistan is other than a good thing?

Don't imagine for a moment the intervention in Iraq has not had a ripple effect.  In societies governed by corrupt elites, those who have enjoyed unchallenged privilege have much at stake.  For them, demands for popular sovereignty will summon to mind Albert Camus' reference to freedom as "that terrible word inscribed on the chariot of the storm".

Across the world, a host of authoritarian regimes are throwing up the barricades, playing a waiting game, and calculating that the next incumbent at the White House will have neither the mandate nor the nerve to take them on.  They are hoping a collapse of popular support for the Bush strategy in the US, and among its allies, will see this extraordinary moment of American interventionism come to a screeching halt.  Despairingly, it is not inconceivable that they might just be right.

For whatever progress is made in the Middle East, the Western media is submerged in a plague of self-doubt.  Amid much mudslinging, many have rushed to pronounce the democratisation project wrong-headed and doomed to failure.

During his recent visit to Australia, Britain's Tony Blair told federal Parliament that divisions today were between societies open to the world and those fearful of a changing world.  This might explain the wails of "Western imperialism" from those with most invested in the grim status quo in the Middle East.  But why, Blair asked, was this refrain taken up so slavishly and strenuously by critics of Bush in America, Europe and Australia:  "Their case is that democracy is a Western concept we are forcing on unwilling cultures.  The problem we have is that a part of opinion in our own countries agrees with them."

The Bush Doctrine is a harrowing and confronting agenda.  No doubt about it.  In the US, the president's slump in approval, despite a resurgent economy, suggests increased anxiety in middle America about the wisdom of persisting with the course set by his administration, especially in an Iraq consumed by shocking sectarian conflict.  At both ends of the political spectrum, second-guessing Bush has become not only the fashion, but an obsession.  In Europe, notably in France, it verges on hysteria.

How did it come to this?  To hear the shrill voices opposing the Bush strategy to combat extremism in the Arab and Islamic worlds, you begin to wonder when, where, how and why democracy became such a dirty word.  What is so wrong, so threatening, about open societies and open minds?

WHAT EXACTLY IS THERE TO FEAR FROM FREEDOM?

In 1941, the Atlantic Charter signed by Franklin D. Roosevelt and Winston Churchill laid down the template for a postwar international order.  Still facing the twin threats of Nazism and Japanese militarism, they spoke of aspiring for a peace under which "all the men in all the lands may live out their lives in freedom from fear and want."  The noble sentiment of this text would later be incorporated in the United Nations Charter.

But whatever the altruistic fervour at the time to prevent a repeat of the horrors of world wars, the attempts to fashion a new and more liberal international system ran headlong into Cold War rivalries, while, in the developing world, the freedom agenda soon came to be overshadowed by power struggles between authoritarians of the right and left.

Here, there were no winners, only survivors.  When ultimately the key citadels of communism collapsed at the end of the 1980s, there was fresh hope again for a more stable and peaceable world order.  But this, too, was soon to flounder, amid ongoing conflicts in the Middle East, violent tribal, ethnic and sectarian divisions in Africa and the Balkans, and the emergence of a virulent strain of religious extremism in the Islamic world, culminating in al-Qaeda's mega-terror assault on the US in September, 2001.

A year later, against the backdrop of commemorative services to mourn the victims in New York and Washington, Bush announced a revised national security strategy, revisiting the themes of the 1940s:  "The great struggles of the twentieth century between liberty and totalitarianism ended with a decisive victory for the forces of freedom -- and a single, sustainable model for national success:  freedom, democracy and free enterprise."

Confronting a dangerous new foe, which had shown a readiness to resort to the worst excesses of "total war", Bush implored Americans to accept the role of global leadership in this ongoing struggle.  His speech carried unmistakable echoes of Churchill's famous Harvard address of 1943:  "The price of greatness is responsibility.  If the people of the United States had continued in a mediocre station ... absorbed in their own affairs ... they might have remained forgotten and undisturbed beyond their protecting oceans.  But one cannot rise to be in many ways the leading community in the civilised world without being involved in its problems, without being convulsed by its agonies and inspired by its causes.  The people of the United States cannot escape world responsibility."

In a subsequent speech to the UN General Assembly in September, 2004, Bush went further still, offering a blunt admission on the failings of US postwar foreign policy towards the Arab world:  "For too long, many nations, including my own, tolerated, even excused, oppression in the Middle East in the name of stability.  Oppression became common, but stability never arrived.  We must take a different approach.  We must help the reformers of the Middle East as they work for freedom, and strive to build a community of peaceful, democratic nations."

For an American president, this was a signal departure from the crude realpolitik of the Cold War years.  It marked belated recognition that the practice of coddling corrupt rulers in the Middle East, either in the name of stability (or, as often, in the cause of Cold War one-upmanship) had succeeded only in producing a greater sense of grievance and disillusionment among the Arab citizenry.  As a statement of contrition of behalf of the superpower, as a frank admission of past mistakes, this speech should have been welcomed intuitively by progressive liberals everywhere.  Predictably, it wasn't.

In fact, the speech brought forth only scorn.  Some denounced the Bush project as an impossible dream -- disruptive, delusional and downright dangerous.  Others spoke of cultural imperialism, accusing Washington and its allies of trying clumsily, arrogantly, to superimpose Western values on societies with different traditions, interests and priorities.

It has to be said this critique involves curious logic for anyone who holds to the notion of universal human rights.  Why should political freedoms extended to our own citizenry remain exclusively a Western construct?  To argue the consent of the governed is not, or cannot be, a universal value is to say, in effect, that some humans might prefer to live in subjugation.  There can be no proposition more objectionable, more defeatist.  The point was made best by Lincoln, in his address to the Indiana regiment:  "I have always thought that all men should be free;  but if any should be slaves, it should first be those who desire it for themselves, and secondly those who desire it for others.  Whenever I hear anyone arguing for slavery, I feel a strong impulse to see it tried on him personally."

There can be only a handful of explanations for the fact that freedom, as an aspiration, seems so undervalued by so many in the West who enjoy its benefits and privileges in their own lives.  One is that they deem the people of the Middle East temperamentally unsuited to function in open, pluralistic societies.  This would be old-fashioned racism.  Another is that they believe it is best not to interfere if people on the other side of the world want to go about killing each other.  This would be old-fashioned isolationism.  A third explanation is that it's better to leave the people of the region to the mercy of the brutes running some of these societies rather than risk unnecessary confrontation.  This would be old-fashioned appeasement.  A fourth is that they don't care so much about what happens to the people of the Middle East as long as the Americans take a beating.  It's not the first time we've come across that odious phenomenon, either.

During the Cold War years, there were many cheerleaders for Marxism-Leninism, duped into the belief that Soviet society offered a superior economic and political model, and that Western-style capitalism was the greater evil.  The formidable French polemicist, Jean-Francois Revel, captured the tragedy of this collective idiocy.  "Even in the best-informed societies, there exists a domestic third world of ignorance," he wrote in his landmark work, The Totalitarian Temptation.  "Having been told over and over that the free societies of the industrial West are history's most horrendous cases of oppression and misery, any change (is seen as) preferable to the awful present.  But from the moment people are in a position to evaluate totalitarian rule from their own experience, they no longer have the ability to abolish it, or criticise it, or alter it, or even to escape it."

Thus were more than 300 million eastern Europeans consigned to a massive prison block for almost five decades.  Apologists in the West insisted these people were not coerced into servitude, but were willing champions of the proletarian revolution, forsaking individual liberties for the advantages of centrally-planned development.  It was an obnoxious hoax.  Yet despite the implosion of the Soviet empire, the utterly shameless defenders of this defunct ideology have lost none of their animus towards Western "values" or, more particularly, American leadership.  We heard it during the wars in the Balkans.  We heard it again during the campaign to oust the Taliban.  We hear it on Iraq.

Although Revel himself started out as a man of the left, he never forgot or forgave those who had so willfully misread the lessons of Cold War history.  Before he died at the end of April, he offered one last scathing critique of the post-Marxist narrative:

The simplistic article of Marxist faith that capitalism is absolute evil, and that it is incarnated in and directed by the United States, may be the most important principle shared by the current crop of anti-globalisers, having learned nothing from the socialist catastrophes and absurdities of the last generation ... Even in nations like China where political communism has artificially prolonged its existence, it has done so only by thoroughly expunging economic socialism through privatisation, appeals to foreign investors, deregulation of commerce, and establishment of cross-border trade agreements.  Only Cuba and North Korea have clung to economic collectivism, with utterly disastrous results.  (Yet) what we end up with ... is a topsy-turvy situation in which those seeking to destroy democracy appear to be fighting for legitimate aims, while its defenders are pictured as repressive reactionaries.

For all his fears about this self-destructive tendency within Western intellectual circles, Revel might well have taken heart from the myriad inspiring examples in recent history of peoples and nations celebrating the rites of freedom.  Sixty-seven dictatorships have fallen since 1972.  The beneficiaries of this wave of liberation have included not only the eastern Europeans but another 700 million people across Africa, Latin America and East Asia.  A billion individuals emancipated from tyranny in one generation.  One corollary of this growing pool of democracies is greater peace and prosperity.  There is not one instance in history of a democracy launching a war of aggression against a fellow democracy.  This is the peace dividend of freedom.  It is one of the strongest arguments in Bush's armoury, and one of the most piercing retorts to those who ritually, religiously, adopt the nay-saying predisposition the French call quaintly alter-mondiale.

Of course, not everywhere has moderation triumphed over extremes.  Several former Soviet states fail absymally the legitimacy test.  Russia under Vladimir Putin has gone into reverse gear.  And suspicion of behind-the-scenes involvement by US-based groups like Freedom House in the "color revolutions" in Georgia, Ukraine, and Kyrgyzstan has led to a backlash.  Politicians from China to Zimbabwe have placed restrictions on Western aid to human rights activists and opposition groups.  In Latin America, a new breed of leftist populists have come to power.  Most prominent among them is Venezuala's Hugo Chavez, who cites US democracy promotion as part of a Bush Administration campaign to oust him.  Chavez blocks American aid, and uses his nation's oil riches to support anti-American candidates in the region, in the hope of spreading what he calls his "Bolivarian Revolution."

These same regimes are never busier than when myth-making about the ruthlessness of American power.  Just as it was fashionable to besmirch Britain's history as a coloniser (ignoring, for one thing, the pivotal role of its naval might in bringing an end to the evils of slavery) so it is fashionable now to pillory American stewardship of the war on terror.  Some will argue the US has only itself to blame, that Guantanamo Bay, for example, has soured perceptions of its human rights agenda.  And although two reservists are serving prison sentences for abuses at Abu Ghraib, Washington is still paying hugely for the impact of that scandal on international opinion.

IRAQ PROVIDES THE CRUCIAL TEST

Nowhere is there a more critical litmus test for the broader initiative to promote democracy than the campaign to add Iraq to the rollcall of free societies.  It was inevitable that any war and occupation to end one of the world's most despicable dictatorships was going to bring violence and upheaval.  But that process has uncorked three decades of repression, lifting the veil on profound ethnic and religious divides within Iraqi society.  Some say the sectarian fires ablaze in Baghdad represent a signpost to the imminent collapse of the Bush project.

The stated mission in Iraq is to help create a stable, pluralist, democratic, unitary state with strong constitutional protections for minority rights.  As a goal, this is entirely unobjectionable -- which, of course, is why so many of its critics scour the periphery in search of ulterior motives.  But the task of pacifying, then rehabilitating, so brutalised a society was always a huge ask.  From the beginning of Arab-Muslim history, Iraq has been ruled by cruel oppression.  The standard was set as long ago as the eighth century, when the emissary sent from Damascus to govern the rebellious provinces, al-Hadjadj ibn Yusuf, forewarned of a never-ending reign of terror:  "By God, O people of Iraq, people of discord and dissembling and evil character ... I shall strip you like bark, I shall truss you like a bundle of twigs, I shall beat you like stray camels ... I swear by God that you will keep strictly to the true path, or I shall punish every man of you in body."

The downfall of Saddam has provided one of the few openings in Iraq's history to clamber free of this brutal history.  Most Iraqis say they want democratic government that works in the interests of all, regardless of ethnicity or sect.  They have voted three times, in ever-increasing numbers, for such an outcome.  The significance of this cannot be gainsaid:  no longer can a dictator present to the world a counterfeit version of the nation's aspirations;  today, the Iraqis speak for themselves.

Tragically, however, radicals and hotheads from rival traditions have taken up arms and launched a frenzy of tit-for-tat killings.  The conflict in the streets of the capital, Baghdad, can hardly be dismissed as a pocket of anarchy.  In such a climate, will there ever be sufficient cohesion to allow the evolution of democratic institutions that will protect the rights of all Iraqis?  Or must the nation's future, like its past, be forged in blood and fire?

These are profoundly troubling questions and it is at this moment we usually hear the familiar refrain that it could all have been so much easier, so much less costly, that the lives of the Iraqis would have been better, if only we had left Saddam Hussein in power.  Wrong.  Anyone still tempted to delude themselves that the former regime was somehow more tolerable than the war of intervention to remove it might wish to peruse Le Livre Noir de Saddam Hussein.  Written by Arabs, Americans, Germans, French and Iranians, it is the most comprehensive work to date on the former regime's war crimes.

Contributors include Archaeologists for Human Rights, which has catalogued the discovery so far of 288 mass graves.  "There is no secret about these mass graves," they write.  "Military convoys crossed towns, full of civilian prisoners, and returned empty.  People living near execution sites heard the cries of men, women and children.  They heard shots followed by silence."  We are hearing more of this sordid tale at the trials of Saddam and his henchmen for crimes against humanity at Dujail and Halabja.

Furthermore, knowing what we know now of the sleazy backroom games in and around the UN, it requires an extraordinary leap of faith to persist with the assertion that Saddam and his psychopathic sons might have been contained indefinitely by sanctions and inspections.  The far greater probability would have been the erosion and ultimate collapse of the sanctions regime, and an Iraq free to resume its weapons programs.

The US military has begun the process of releasing the mountains of official Iraqi documentation collected since the fall of Saddam.  Combined with the interrogation of former high-ranking Iraqi officials, including Saddam's deputy prime minister, Tariq Aziz, the Iraqi Perspectives project has shed fresh light on what was happening in the shadows of those fateful UN debates in 2002.  Many more documents are to be released in the coming months.  Not only can we expect to learn more about the double-dealing at the UN but there is the likelihood we will learn more -- much more -- about Saddam's connections to international terrorism.

Much of the world remains in denial about the extent of the nexus between Saddam's Iraq and the spear-carriers of Islamic radicalism, almost as if a regime notorious for crimes against humanity somehow deserves the presumption of innocence.  In fact, we know Saddam had no philosophical aversion whatsoever to the notion of using proxies to launch attacks, at home or abroad.  We know the Iraqi Intelligence Service had regular contacts with a range of militant groups across the region, and was heavily involved in financing and training terrorist operatives.  We know of the cheques paid to the families of the "martyrs" of the Palestinian Islamic Jihad.  Much more is still to be learned.

But we also have the historical record of what the Iraqi strongman said himself.  It is worth reflecting, more than 15 years later, on that terse conversation between Saddam and US Ambassador, April Glaspie, in June, 1990, only days before he launched his invasion of Kuwait.  Much of the reporting of this meeting has focused on the suggestion that Glaspie gave Saddam the "green light" to proceed with the annexation of a small, oil-rich neighbour.  The transcript as recorded by Iraqi note-takers doesn't sustain that charge.  What it does tell us is that Saddam was acutely conscious of the risk of US intervention, and that he was intent on warning Washington to back off:  "If you use pressure, we will deploy pressure and force.  We know that you can harm us although we do not threaten you.  But we too can harm you ... We cannot come all the way to you in the United States, but individual Arabs may reach you."  These words must have been ringing in the ears of US intelligence agencies after the first attack on New York's World Trade Centre in 1993.  It would be astonishing if they did not also resonate after September 11.

From the moment of his defeat in the Gulf War, there had been strong elements of strategic contiguity between the Iraqi dictator and the brand of Sunni extremism that would give rise to al-Qaeda and its offshoots.  Both were sworn enemies of the House of Saud.  Both saw the US-led action against Iraq as an attack on Arab, particularly Sunni Arab, sovereignty.  Both saw removing American influence from the region as critical to their interests.  Both sought to generate popular support by demonising (and attacking) Israel.  Both used religious chauvinism opportunistically to advance their political aims.  And just as Saddam had lined his bookshelves with the thoughts of Stalin, so, too did radical Islamism spill off the same conveyor belt of totalitarian excess.  Like fascism and communism, radical Islamism is a predatory, punitive and expansionary ideology.  It is all of these things because it cannot ever be seen to admit the possibility of alternatives to domination of mankind by one all-embracing belief-system.  And, like Saddam, it has no compunction about monstering and mauling any who stand in its path.

THE ANTI-WESTERN THREAT

History reminds us it is crucial to understand the brutal logic that underpins such a mindset before the awful midnight arrives when terror turns up on the doorstep.  Yet, remarkably, despite the jihadis inflicting vicious attacks on civilians from New York to London, Madrid to Moscow, from Bali to Beslan and back again, many in the Arab world, and some strands of Western society, seem unconvinced of the nature of the beast.

For Hannah Arendt, who so powerfully documented Nazi war crimes, it is the capacity for wholesale, indiscriminate destruction that distinguishes totalitarian ideology as so radically evil, so desperately mad.  As she asked:  "Why should lust for power ... suddenly transcend all previously known limitations of self-interest ... not only to kill whoever is in the way of further power but also innocent and harmless bystanders?"  We should ask this same question as we study the nail bomb attacks at a Cairo bazaar, or in London's tube and bus network.  We should ask this same question as we wonder how many more assaults on the impoverished people of Bali or Baghdad will it take to end the ludicrous efforts by so many to apply conventional Marxist class warfare analysis to Islamist terror.

In tracing the origins of Arab and Muslim grievance, it is germane to consider the history of the Islamic world's relative decline, the impact of colonialism, the partition of Palestine, and economic deprivation and corruption in modern Arab society.  But do these factors together establish a "root cause" (hence, somehow a justification) for the carnage and crimes against humanity being perpetrated in the name of the downtrodden of the Arab and Islamic worlds?  Emphatically not.  Nor should the deliberate, calculated mass murder of civilians ever be excused by the sort of post-Marxist silliness that would have us define (and, in some grotesque cases, defend) terrorism as "a weapon of the weak."

Using ambulances to carry out suicide bombings is not a weapon of the weak.  Bombing school buses is not a weapon of the weak.  Beheading civilian hostages is not a weapon of the weak.  None of these are weapons of the weak.  They are weapons of the wicked.  International law should say so.  No ifs, buts or maybes.

Nor should so much of the reflexively anti-Western rhetoric in this debate be allowed to deflect attention from where it matters most.  For what is too often forgotten is that the main targets for the Islamic radicals are the moderates of the Muslim world.  This is the crux of the struggle, and it is creating difficult dynamics for societies such as Indonesia.

Traditionally, Islam in South-East Asia has been peaceable and inclusive.  Over the centuries, it was able to integrate the secular and sacred.  Communities in Indonesia came to understand the constraints of a multi-ethnic and multi-faith society.  However, over 20 years, more than $US100 billion has been spent by wealthy Arabs spreading an austere version of the Muslim faith across Asia.  Increasingly, this chauvinistic version of Islam has become active at the intersection of religion and politics in places like Java, as young radicals take their inspiration from the likes of Sayyid Qutb, and borrow their war-fighting techniques from al-Qaeda.  Sooner or later, progressive Indonesians are going to have to grapple with this for, as the Muslim feminist, Irshad Manji notes, colonialism is not the preserve of people with pink skin.  There is such a thing as Islamic imperialism.

In some respects, the nation-building task facing Indonesia is not so dissimilar to those faced by Middle Eastern societies such as Iraq.  Indonesia, too, was ruled by a dictator, as recently as eight years ago.  After the fall of Suharto, it, too, suffered tens of thousands of deaths in sectarian violence.  While Indonesia is further advanced in the task of establishing democratic institutions, nobody should underestimate the ongoing challenges, given the combustible ingredient of religious zealots preaching revolutionary violence.

It takes resolute political leadership, and often a great deal of international support and understanding, to create a consensus among rival communities for institutional and legal settings that allow for representative politics, a public sector rid of corruption, and constitutional protection for civil and minority rights.  It also requires altruism on the part of individuals to assume mutual responsibility for melding together a viable society.

More than 10 years after the signing of the Dayton accords, and five years after the fall of Slobodan Milosevic, 25,000 NATO troops remain stationed in Bosnia and Kosovo.  Is this not a benchmark against which to measure expectations, in Iraq or elsewhere?  The lesson is that liberating and rebuilding nations fractured by ethnic and sectarian divides is not about overnight miracles.  Progress is patchy, with as many setbacks as advances, until local actors commit to the principles of a rules-based society.  Often, it takes extraordinary courage to stand up to the bullies, bigots and gunmen.  This might seem a big ask today for, say, the average citizen of Baghdad.  But not impossible.

In Belfast, it is arguable five sisters have done as much as anyone to hasten the obsolescence of the Irish Republican Army.  Following the IRA murder of Robert McCartney in a pub, his sisters spoke out fearlessly against the bullying gunmen.  This shattered a decades-old tradition in the back alleys of West Belfast -- a strict code of unquestioning loyalty to the paramilitaries.  Slogans of insurrection on the streets of the neighbourhood were soon supplanted by a new injunction:  "IRA scum out."

This was a victory for civilised rule.  No wonder the sisters were invited to the White House.  President Bush needs many more such examples.  For, in all of this, the worst of all outcomes would be a superpower chastened by its Iraq experience, and forced into retreat.  There is already a popular backlash against the foreign policy activism of Bush.  If the trend continues, will this see the return of a more inward-looking America, seeking solace in isolation?  As the mystics say, be careful what you wish for.

Feeding off the expectation that the Bush strategy will not survive beyond the Bush presidency, America's enemies are biding their time, waiting anxiously to celebrate that Saigon moment, when the last departing US chopper flies out of Baghdad.  Lest some think this too melodramatic, it is worth recalling what Ahmadinejad told leaders of Hamas and Hezbollah at a recent meeting in Damascus.  Insisting the US does not have the stomach for protracted conflict, he predicted Washington would soon revert to its traditional policy of "running away," leaving Afghanistan and Iraq, indeed the whole of the Middle East, to be reshaped by Iran and its allies.  His argument was that once Bush is gone, the UN will become more pliable, and Iran will be able to do pretty much as it pleases:  "They can pass resolutions until they are blue in the face."

AHMADINEJAD'S DEFIANCE IS PROVING CONTAGIOUS.

With the help of some cut-price oil and soft loans, Ahmadinejad has convinced Syria's Bashar al-Assad to dig in his heels over the UN investigation of the murder of former Lebanese prime minister, Rafik Hariri.  There are signs Saudi Arabia may be having second thoughts about a dialogue on political reform.  In Qatar, talk of a new democratic constitution has subsided.  And, in the Palestinian territories, the hardliners of Hamas have surged to power, more grist to the mill of those who have warned that democracy will produce more perversity than diversity in a region with little or no history of rule by consensus.

In Iraq, concerns the US will not remain as committed to the project has prompted some Shi'ites to turn to Tehran and for some Sunni leaders to have second thoughts about their decision to join the political process.  Meanwhile, the Iraqi Kurds view suspiciously efforts to bind them closer to the Iraqi state.  Again, they claim they have to "take precautions in case the Americans run away."

Will the Americans run away?  I, for one, hope and trust they will not.  But one of the sacred joys of living in an open society is that, ultimately, it is not the rulers, but the ruled, who get to have the last word.  If Bush is judged to have failed in his strategy (and it is far too soon to even begin to make such a call) the Congress, a robust media, and the American people, will combine to deliver a reckoning.

In democracies, leaders don't write their own history.  Sadly, no such protections, no such checks and balances, are available to those forced to endure the claustrophobia of one party states, official state-run media, and the habitual use of violence to entrench in power the hard men at the top.  One consequence of this disparity is that mistakes made by governments in open societies can be so magnified, so distorted, that we see characterisations of Guantanamo Bay as a gulag, or of Bush as a Hitler.  Meanwhile, gangster regimes get on with their corrupt and murderous ways, unburdened by scrutiny.

For all that, it is hard to see how the shrinking club of tyrants will survive indefinitely the tidal wash of globalisation, with its unrelenting flow of ideas and information, including the trademark Western concept described by Hannah Arendt as "the right to have rights".

Of course, despotic regimes will kick and scratch and snarl in their attempts at self-preservation.  They will bully opposing voices.  They will trash international protocols.  They will seek to engender fear and panic.  Some may go so far as to sponsor terrorism.

All the more reason, as Blair explained to the Australian Parliament, for true progressives everywhere to be resolute in the struggle to defend the bedrock principles of freedom:  "The strain of, frankly, anti-American feeling in parts of European and in world politics is madness when set against the long-term interests of the world we believe in."

Blair is right to sound this warning.  For if the message sent to the thugs and extremists is that the 21st century is theirs to keep, we had all better prepare for a reprise of the darkest horrors of the century just gone.

Why the birthrate's falling

When politicians say they want to "help families", it is difficult to object.  After all, families are the single most important institution in the community, and when families fail it is the community that picks up the financial and social costs.  The federal budget has further increased welfare to families with children and so far there appear to be few objections.

The fact that welfare is now being handed out to middle-class families who once upon a time would neither have wanted nor accepted such assistance has passed without much comment.  In recent decades there has been a significant shift in our attitudes to welfare spending.

Previously, welfare was tightly targeted at the alleviation of poverty for the most disadvantaged.  Any additional government funding for welfare would have been devoted to the poorest -- to raising the "safety net".

However, now we have a situation where the extra revenue that the Government receives from the booming economy is being passed on as welfare to those who are relatively high on the income scale.  The middle class feels it has contributed a disproportionate amount to the Government's coffers and it has no qualms about receiving a hand-out in return.  Indeed, it has almost come to expect it.

Families on incomes of $50,000 are now eligible for some part of the family tax benefit.  Obviously families on $50,000 are not as well off as those on $100,000, but they are in a better position than those on $30,000.  While the budget did contain measures aimed at improving the condition of the low-paid with, for example, from July next year those with annual earnings of $25,000 being eligible for the full rate of the low-income tax offset, it is the middle class that is the big winner from the budget.  The 2007 federal election will be decided, as are most elections, by the middle-class voters in the marginal seats.

Whether the middle class should receive welfare payments is not just an argument about economic efficiency.  It is expensive and wasteful for government to collect taxes then hand those taxes straight back to taxpayers as welfare.  There is the larger issue of the extent to which it is fair that taxpayers on low incomes should contribute to the financial benefits received by those on middle incomes.

A few weeks ago Prime Minister John Howard mounted a strong defence of the Coalition's welfare policies.  He made no apology for the Government's strategy of directing financial support to middle-income families with children, and he resisted calls to scrap measures such as the "baby bonus" that were paid to families regardless of their wealth.

The Prime Minister made the point that raising children is for the benefit of the community and that it was reasonable for the community to contribute to the costs of bringing up children.  This is all true.

In a world of unlimited funding, we may wish to support all families with children, regardless of the wealth of the family.  But in reality, the question we face is different.

Despite what some people might think, government funds are limited and it is a matter of determining what is the best use of the finances that are available.  A baby bonus of $4000 paid to a family with an annual income of $100,000 has nowhere the same effect as it does for a family on an income one-quarter of that.  The equation could be taken further.  The benefits to the community of making a payment of $8000 to a family on $25,000 outweigh the costs of not making a payment of $4000 to a family on $100,000.

The justification for the present system of family payments is that Australia needs to boost its declining birthrate, and the best way of reversing this trend is by providing monetary encouragement, especially to the middle class, to have more babies.  And much of the burden of paying for this falls on unmarried singles without children who are now positively discriminated against by the tax system.

Forcing single people without children to fund couples with children could in the long term actually reduce the birthrate further.  This is because a person's decision to have children is determined not only by expectations about their future income.  An individual's current financial status can be just as important a factor when they choose whether to form a family, and it is singles and couples without children who have received the least from recent budgets.

When combined with other aspects such as the increase in housing unaffordability caused by state governments refusing to release land for building, it is no surprise that an increasing number are delaying or postponing indefinitely the decision to have children.

Helping families is a worthwhile objective.  But there's no easy way of doing it.

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Government misses tax reform boat

Australia has not taken advantage of buoyant conditions to reduce tax.

The high-level budget debate has predominantly concentrated on tax.  In the past, the focus was on the appropriate balance between income and expenditure taxes, especially in the lengthy GST deliberations.  More recently, income tax rates have been at the centre of debate.

A flatter tax philosophy is now in the ascendancy worldwide.  In Australia, Malcolm Turnbull's tax scheme has been among the more radical of a number of such proposals.

This switch in emphasis reflects a heightened prominence on restoring a greater incentive to work, attracting and holding those people capable of earning high incomes, and reducing the incentives to shirk.  Other related motives are to diminish incentives for wasteful evasion measures resulting from taxpayers diverting income to areas where the taxman is less grasping.

Pursuit of flatter taxes has meant a corresponding lower priority on using tax to promote greater income equality.

All this focus on tax is, however, misplaced.  It disguises the fact that tax is a consequence of government spending.  Tax policy is about devising the best means of plucking the goose while minimising its squawks and, above all, trying not to discourage it from laying the golden eggs.

For these reasons flatter tax rates have considerable appeal.  However, they are no substitute to tackling government spending head-on.

Flatter taxes than Australia's are seen, for example, in most European countries.  These are the cannon fodder Treasury uses in composing international comparisons that flatter Australia's performance.  Their tax regimes have not prevented Eurosclerosis except in Britain and Ireland.  And Britain's moderately good performance is set to end as tumescent spending under Blair/ Brown has gradually dissipated the Thatcher legacy of fiscal discipline.  Britain's Government sector is now larger than that of Germany, which has been Europe's sickest man over the past decade or so.

Overall, general government spending in Australia has risen from 30 per cent of gross domestic product at the start of the 1990s, just before Paul Keating's recession we had to have, and is stuck at 35 per cent.

The Howard/ Costello period has avoided fiscal mismanagement.  Real spending (excluding state grants) by the Commonwealth since 1998-99 has increased about 3.5 per cent a year and is set to remain at that level.  Though roughly in line with the economy's growth, this is hardly commendable.

The Asian-fired resource boom and the benefits of the micro-economic reforms, many of which were bequeathed by Hawke/ Keating, have offered us opportunities for genuine reform.  We have not taken advantage of buoyant conditions to introduce policies that reduce our tax-hungry levels of expenditure.

The 2 per cent annual real per capita growth we have been experiencing is poor reward for the superb economic environment in which we find ourselves.  It is even more so when we consider that overseas borrowings are running at 6 per cent of GDP.

Lifting our growth requires cutting government expenditures, most of which are deadweight costs.  Two-thirds of Commonwealth spending is on social security, health and general public service.  Obvious areas to target include the ballooning payments for people with disabilities (over the past 20 years those claiming disabilities have moved from 13 to 20 per cent of the population) and, in the light of booming demand, unemployment payments.

Paring back spending on these and other items to return the government share of GDP to what it took in 1990 could easily allow 3 per cent per capita annual growth instead of the 2 per cent we are experiencing.  That would mean real incomes within two decades at over 30 per cent above what they would otherwise be -- it would in short mean Australians enjoying average living standards similar to those in the US.

The key to achieving these benefits is a reorientation away from taxation and towards lowering expenditure.  There is any number of worthy causes clamouring for government funding.  While the Treasurer should play a greater role in whittling down the claims on the taxpayer, the finance minister is crucial as the gatekeeper.

Australia has rarely been well served in this respect.  The last person for the job is an avuncular chap with an indulgent perspective on government spending.  Hence, Australia had its worst expenditure gatekeeper when Labor was in power, with Kim Beazley as finance minister.  Ironically, Labor also gave us the best finance minister:  Peter Walsh, a man whose natural parsimony and cynicism about government expenditure provided an ideal coupling for the job.

The current budget, as with most under Howard/ Costello, has avoided the worst excesses.  It has not placed us into hock.  But it has not done anything to undo decades of overspending.

The Treasurer tells us that freedom from debt "has enabled the Government to redirect expenditure to spending on health, education and national security".

Why not embark on a genuine reform so that less taxpayer money is taken in the first place?

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NSW work safety laws are the worst in the world

The NSW government has been suffering from a lot of criticism over their work safety laws.  They deserve the criticism because their laws have been the worst in Australia and possibly the worst in the developed world.

The main problem is that the laws deny people in NSW natural justice.  There is a presumption of guilt instead of presumption of innocence.  There is no right to trial before a jury and convicted people cannot appeal.

This legal set-up has created a stacked prosecution process.  People in NSW have been convicted for work safety accidents when in other states the same accidents would not result in prosecution.

For example a NSW plumber was convicted after a hot water safety value failed.  The plumber followed all the manufacturer's instructions.  The accident happened after a microscopic hairline fracture inside the sealed valve, caused the valve to fail.  Even though the evidence was that the plumber could not possibly have known of the problem he was convicted and lost his business.

These unjust laws have resulted in NSW having 64% of the nations OHS prosecutions with only 33% of the workforce.  And NSW has no different injury rate to any other state.

To their credit however, the NSW government has recognised they have an unfair system.  Just recently they announced proposals for a dramatic shift in the OHS act.  They are removing presumption of guilt and aligning with the rest of the states.

People will be held accountable for what they control given what is reasonable and practical.  For the first time NSW employees will be held accountable for their actions having parallel obligations to an employer.

These changes, along with others are positive first step improvements.  But more change is needed if NSW work safety laws are to achieve full community confidence and total focus on work safety.

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So rich, we can afford to keep "Saving the Murray River"

The Murray River is a national icon, and campaigning for years by the Australian Conservation Foundation means the river is usually a focus when the federal government wants to show-off its commitment to saving the environment, particularly at budget time.

This Budget the Government has decided the river will get another $500 million with the money being promised to further reduce salinity levels, buy another 500 gigalitres of environmental flow, and build more fishways.

But does the Murray still need saving?  Is there room for another salt interception scheme or another fishway?  And didn't government promise this same amount of water in November 2003?

When the State and Federal Government Environment Ministers agreed to return 500 gigalitres of water to the environment in November 2003, the focus was to be on iconic sites along this iconic river.

The 500 gigalitres was heralded as a "first step" and it was widely reported as the first time water had been given back to the river.  Yet the first listed icon site, the Barmah-Millewa forest, has enjoyed an environmental flow allocation of 100 gigalitres a year since 1993.  The same forest also got up to 25 gigalitres of environmental water through the Flora and Fauna Bulk Entitlement for Northern Victoria and then there was potentially 30 gigalitres from the NSW Murray Wetland Working Group.

It is a well kept secret that in 2002, at the height of the drought and at a time when Peter Garrett -- then President of the Australian Conservation Foundation -- was asking for more water for the environment, the NSW Murray Wetland Working Group sold 23 gigalitres of water to irrigators for $3.8 million dollars.  Much of the money from the trade was apparently used to build a fishway.  This may have been a good investment, but we don't know because there has been inadequate monitoring of the river environment.

The Murray Darling Basin Commission (pdf file 636KB) has just started collecting data on the movement and population dynamics of native fish species as part of its new Sea-to-Hume Dam fishway construction program.  Vertical slots are being punched through barrages and ladders built up dam walls all with the purpose of making it possible for a fish to travel from Lake Hume to the Murray's mouth.  Before this project the best data on fish migration was kept by Terry Holt, the Reservoir Controller at Torrumbarry Weir and Torrumbarry fishway.  Interestingly Mr Holt was recording silver perch, listed as critically endangered under Victorian legislation, in similar numbers to the feral European carp.  (See Myth and the Murray:  Measuring The Real State of the Environment.)

The Murray's mouth was also identified as an icon site in November 2003.  By January 2004, Mark Latham, then the new leader of the Opposition, was declaring that a full 450 gigalitres of water, worth about $540 million should be allocated there.

In fact, the Murray River flows into a large lake complex.  When British explorer Charles Sturt first sailed down the river in the early 1830s in a whale boat, he could not access the Southern Ocean because the river's mouth was blocked by sand bars and sand banks.  We now dredge the sand to create a mouth and have built a series of large barrages across five channels to stop freshwater flowing out to sea.  An intended consequence of the barrages is that they keep the seawater out, even when the ocean breaks through the sand bars.  This keeps the lower lakes artificially fresh and at a more-or-less constant water level.

When politicians talk about water for the Murray's mouth, it is really code for the lower lakes and the recreational fishermen and commercial irrigators who use this resource.

During the recent drought, South Australia and these lakes, were guaranteed 85 per cent of their normal water allocation.  Given this commitment, there was no opportunity to let stretches of the river just dry-up, as would naturally occur during a major drought event.

While we now expect the Murray River to be always brimming with water, Charles Sturt observed that Australian rivers:

Fall rapidly from the mountains in which they originate into a level and extremely depressed country;  having weak and inconsiderable sources, and being almost wholly unaided by tributories of any kind, they naturally fail before they reach the coast and exhaust themselves in marshes or lakes;  or reach it so weakened as to be unable to preserve clear or navigable mouths, or to remove the sand banks that the tides throw up before them.

But in the intervening years, South Australians, the Australian Conservation Foundation and others have conspired to rewrite history.  The sandbars at the bottom of the lakes now equal inadequate environmental flow.

When I asked the Murray Darling Commission in June 2004 how much water is already allocated as environmental flow they explained they didn't know because:

Environmental water comes in a variety of forms including minimum flows, environmental flow rules, contingency allowances and tradeable entitlements.

In the 1960s and '70s salt levels were rising and hundreds of millions of dollars of public money was pledged to build salt interception schemes.  The first was completed in 1982.  They have been spectacularly successful.  Salinity levels at the key site of Morgan, which is just upstream from the offshoot for Adelaide's water supply, are now half what they were 20 years ago.

How much lower does the government want to push salt levels?  The Murray is not a European river, the Australian landscape is naturally salty and many native fish species are adapted to fluctuating levels of salt including periods of high salinity particularly during droughts.

I am curious that the Government has made the Murray River a focus for environmental expenditure again this year, this budget.  A commitment of $500 million from Australian tax payers, and 500 gigalitres of water for the environment is an enormous investment.  I can only conclude that we are indeed a rich society if we can afford so much, for so little obvious environment gain -- or hasn't anyone realised that the Murray River has already been saved?

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Cutting Red Tape in Victoria's Planning Processes

Submission to the Victorian Department of Sustainability and Environment

INTRODUCTION

Department of Sustainability and Environment has asked for advice on cutting red tape in the context of the planning process.  The planning process is an important part of the economy both in terms of registering title to land and in terms of establishing the need for and determining priorities for infrastructure.

It is also traditionally important in ensuring that urban use of land in a particular area is not incompatible with its use elsewhere.  Practical considerations have ensured that certain activities that impinge adversely on others are undertaken in areas that are separated.  Traditionally, this has applied to manufacturing, especially manufacturing involving noise or air pollution.  This has been extended to similar sorts of activities like wholesaling and transport centres.

Over recent years, planning in Australia and many other countries has assumed a greatly enlarged role in determining the use of land.  This is an outcome which we regard as regrettable and one that imposes huge economic costs onto the community as well as undermining the property rights which are the bulwark of a free society.

The focus upon Red Tape has assumed a higher profile over the past year or so and both the State and Commonwealth Governments have placed a high priority to the issue.  At the February 10 COAG meeting regulation was a major agenda item and governments agreed to:

• establish and maintain effective arrangements to maximise the efficiency of new and amended regulation and avoid unnecessary compliance costs and restrictions on competition;
• undertake targeted public annual reviews of existing regulation to identify priority areas where regulatory reform would provide significant net benefits to business and the community;
• identify further reforms that enhance regulatory consistency across jurisdictions or reduce duplication and overlap in regulation and in the role and operation of regulatory bodies;  and
• in-principle, aim to adopt a common framework for benchmarking, measuring and reporting on the regulatory burden.

The meeting also agreed under Decision 5.9(a)

COAG will request the Local Government and Planning Ministers' Council to recommend and implement strategies to encourage each jurisdiction to:-

1. systematically review its local government development assessment legislation, policies and objectives to ensure that they remain relevant, effective, efficiently administered, and consistent across the jurisdiction, and
2. ensure that referrals are limited only to agencies with a statutory role relevant to the application and that referral agencies specify their requirements in advance and comply with clear response time.

URBAN LAND PLANNING

THE MOTIVATING FACTORS

A great deal of planning is motivated by opposition to urban sprawl.  Unlike in the 19th Century where the concerned elites had thought of cities as replete with Satanic Mills, new generations came to venerate the crowded urban landscapes.  More importantly they resented the growth of suburbia, and its more recent incarnation "exurbia", said to be eating up rural land.  Much of the genesis of this view was from England and the rural landscapes that were cherished were the villages, especially those in the south east.  From the 1940s Green Belts surrounded London.

Other UK cities followed London and inexorably the new ideology came to infect the Oceanic outposts of Australia and New Zealand.  Like many such infections, it took a highly virulent form here, despite the lack of any population pressure -- unlike the England and Wales (and even there urban developments only covers 8 % of the country) in Australia the urban sprawl covers less than 0.3% of the total land area.

Cities like Melbourne have declined in density.  People prefer to live in greater personal space, both internal and external, and detached somewhat from their neighbours.  Urban sprawl is not the "inevitable unhappy result of laissez-faire capitalism" but embodies individual preferences.  Technological developments and income growth allowed these consumer preferences to become manifest.  Once technology allowed rapid journeys -- first via rail and later by road -- the cities expanded.  Added to this, we have seen a great dispersal of work locations, partly due to the decline of large integrated factories, partly due to the changed nature of work:  especially the growth of service industries which tend to be geographically dispersed.

In Sprawl, (University of Chicago Press, 2005) Robert Bruegmann traces the ebbs and flows of geographic dispersions and the policies attached to them.  He finds a remarkable similarity across the world (Soviet-era Moscow being a rare exception made possible by total government control).  European and Australian cities have tended to invest more than American cities in public transport and have in many cases put in place much stricter planning ordinances and subsidised housing to prevent geographic spread.  Nonetheless, the density levels are comparable.

He also points out that there is some reversal of trends as people see more merit in inner city living.  In this respect he says, "One of the ironies is that much of what is most attractive ... about cities' 'traditional' character, is that many of the things that once defined them has disappeared.  The decanting outward of all kinds of manufacturing and warehousing functions led to a dramatic reduction in street congestion, truck traffic and pollution".  In the process, factories were converted to lofts and the city centre itself became focussed on entertainment and other leisure activities.  This has also led to a reversal in cities like San Francisco (and Melbourne and Adelaide) of the affluent/slum centre/suburb polarity.

Bruegmann also points out that the trend back is not leading to the higher concentrations favoured by anti-sprawl activists but that new in-fillers and those finding their homes in leafy suburbs have used ordinances and other measures to stop densities from rising -- a phenomena best observed in Melbourne in the suburb of Camberwell.

Anti sprawl campaigns now dominate urban planning.  Fuelling them and mightily facilitating their media profile are the arrivistes and others seeking to preserve a suburb or a favoured rural hideaway by keeping out the hoi polloi.  Contradictions abound in this series of alliances.  Thus, while the incumbents (Bruegmann calls them the "sensitive minority") want to preserve a suburb, the planners want to re-create the denser populations that they hope will feed the café latte society they favour.

In fact, urban change is endemic.  The row houses on the periphery of major cities that were the sprawl of the 1930s and 1950s are now highly valued by the avante-garde.  Daly City in San Francisco about which folk singer Pete Singer disparagingly sang in "Little Boxes" ("all made out of ticky-tacky and all look just the same") is now respected and preserved.  There is of course little different in this from even earlier eras -- many of the most prized real estate in Australian cities was last century's urban sprawl -- the Prahrans, and Richmonds.

Demographia has assembled house prices across a hundred cities and demonstrated a remarkable relationship between housing costs and restrictive land planning regimes.  Those cities with the lowest prices include those enjoying rapid growth like Atlanta and Houston as well as those declining somewhat like Pittsburgh.  They all have in common a relatively unrestrictive planning framework.  In Europe too these same cause and effects are found -- British house prices are over twice those found in Germany where there are constitutional rights that restrain planning regulations.

MELBOURNE'S URBAN LAND PLANNING

Melbourne Planning Operations

It is exceedingly difficult to construe the present operations of the State's planning rules as being compatible with ensuring the wisest and most economically advantageous use of land for activities normally associated with urban life.  Planning at its basic level is the response to the community's common infrastructure needs (roads, water provision etc.).  This involves weighing up different needs for housing, jobs, leisure facilities and commerce, and projecting them forward in time;  it means assessing consequential requirements for infrastructure, its costs and alternatives.

But this planning role can be abused -- instead of responding to consumers' market based needs, planners have sought to impose their own preferences or paid undue regard to those who have only an incidental interest in the development.  We should be most wary of giving rein to specialists in planning and other disciplines who make claims to be better placed than individuals in deciding the best use of resources.  In almost all other areas of economic activity such notions have been abandoned -- markets based on free exchange and property rights have brought better outcomes.

Proponents of the sort of detailed planning restrictions found in Victoria would doubtless maintain that they are merely engaging in setting broad parameters for activities and not micro-managing within those areas.  Some argue that this is not the case and that the extensive interaction between applicants and regulatory authorities demonstrates this.  Others, we among them, would also argue that the planning requirements amount to a gross set of restrictions on land use, generate wasteful lobbying and restrict land availability for the purposes most valued by its owners and those seeking to make use of it.

DSE appears to be very supportive of the planning role it performs.  In its Development Contributions FACT SHEET, DSE says, "Decisions by State or local government to designate, rezone or subdivide land for urban development creates significant increases in land values."  This illustrates a serious misunderstanding of the economics of supply shortage creation.  It is DSE's actions which give rise to the high values.  But unlike actions in the commercial world that create value by applying capital or skills or new technologies, the value of developable land arises largely because the government regulates its supply.  The Government, in reserving land from development, creates its scarcity.

The value of the scarcity which the government has created becomes apparent when some of the land is released, unfrozen, from the condition mandated by planning controls.  And such land can only be worth the sort of sums the Fact Sheet discusses ($300,000 to $400,000 per hectare) as long as an artificial scarcity remains in place.  Land used for alternative purposes to urban development (i.e. agriculture) on the periphery of Melbourne is worth only a few thousand dollars per hectare.  The fact that it sells for a premium, even before its release, reflects speculators' views that the authorities will eventually designate the land as usable for purposes the community actually values most.

Land prices on the urban boundary that are considerably in excess of agricultural land prices reflect the inflated scarcity value caused by regulatory restrictions on supply.  Any cost-based causes of high prices are dwarfed by those attributable to regulation-induced scarcity.  Were it not for this, it is barely conceivable that a block of land on the periphery of Melbourne would command a price in excess of some $60,000 per hectare and much of this would be caused by development costs.

DSE has introduced a new tax on land released from its regulatory corset.  This tax is set at $2,700-$3,100 per block (11 blocks per hectare) for UGB land already zoned for urban development, $4,000-$4,400 for such land that is not yet zoned;  and $4,900-$5,400 for land brought within the Urban Growth Boundary in November 2005.  These new taxes represent an attempt by the government to obtain a share of the scarcity value its planning regulations create.  They have little relationship to the costs of the infrastructure that people would otherwise willingly pay for.

By requiring those in new suburbs to bear costs for sewerage systems, roads, parks, schools, community facilities etc., the tax discriminates in favour of those living in the established suburbs.  It is far from clear that the costs of the latter are less than those of the former, especially with regard to water and sewer systems which are far more expensive to replace in crowded urban areas than in new suburbs.  Moreover, the transport systems (bearing in mind that at least 80 per cent of the costs of public transport is paid for by the community in general) can never be as intensive and useful in suburban developments as in densely populated central areas.

The legacy of the increasingly tightened planning regulations in escalating house prices driven by land costs is demonstrated below.

	1976-77	1992	2005
Melbourne House	$63,200	$169,000	$340,000
Land share	24%	24%	38%

Planning and Public Transport

Much of the basis of planning is posited on outdated notions of the city.  These notions see the city as a radial development centred on the CBD.  Yet, facilitated by the car and communications advances, different work patterns and increased need for space extensive shopping centres, have been among the factors that have refashioned modern cities.  These trends and developments have changed the nature and importance of the CBD.

These trends are exemplified by a declining share of employment in CBDs.  In Melbourne, jobs in the central area fell from 55% to 28% of the total between 1961 and 2001.  In that latter year, the CBD accounted for only 10% of jobs.  This has immense ramifications for planning, especially road development and public transport.

Mass public transport cannot operate at acceptable cost in a city where workplaces and houses are highly dispersed.  Melbourne's density levels have fallen to 1,500 per square kilometre and is now about one third of its level 50 years ago.  The densest suburb, Port Phillip, has 5,500 people per square kilometre which is about tenfold the density of Frankston East and Casey.  It takes a modern city of the density of Hong Kong (40,000 people per square kilometre) to make mass transit acceptable and affordable.

Trying to force the city's development around a mass transit system will constrain its adaptability and result in it losing relevance and attractiveness.  It was Charles de Gaulle who proclaimed, to the wrath of youthful demonstrators, that Paris must adapt to the car and in doing so allowed the centre of Paris to be compromised but at the same time retain its commercial viability, preventing its relegation to that of an ancient curiosity shop.

A planning system built around arrogating public transport to a prime role is one that will strangle the city's adaptability to the needs of the people living within it.

SHOPPING CENTRE REGULATIONS

Under Melbourne 2030, retail activity is to be increasingly concentrated in a limited number of existing large centres.  This is reinforced by existing planning laws which require new retail developments to prove they will not have a deleterious impact on existing retail centres in their region -- in other words, they will not compete with existing centres.

The planning laws also require that new centres provide the same level and character of public amenity and access as existing facilities, irrespective of their clients' desires and nature.

As such, planning laws have greatly reduced the scope for expansion of retail infrastructure and handed monopoly development rights to shopping centre owners.

The laws have also reduced the scope for new forms of shopping such as factory outlets and bulky goods centres.  These types of retail outlet place a higher premium on car transport than existing centres and planners.  It is, after all, hard to bring a dishwasher, a lathe or 20 boxes of shoes home on the tram.

They also aim to provide a low-cost, single-purpose experience rather than the high-cost, all-things-to-everyone environment forced on shopping centres.

Take the example of the recent redevelopment of Essendon airport.  In the late 1990s the Federal Government decided to sell Essendon, along with most other airports around the country.

While Essendon was to remain a functioning airport, use of it would have been small-scale, providing scope to divert a substantial amount of land in a rapidly growing area to other purposes.

Being a Commonwealth entity, the airport was exempt from state and local government planning laws and specifically from the tentacles of Melbourne 2030.  In pursuit of a higher price and good policy, the Government sold the property with the exemption largely intact.

Not surprisingly, the purchaser of Essendon airport paid a premium for the property and announced its intention to redevelop the site as a large retail centre, starting with a 120-store, Direct Factory Outlet centre.

Again, not surprisingly, the owners and financiers of existing shopping centres were furious and pursued legal actions to stop the development.

The development undermined the monopoly powers they had obtained and the profit that flowed from them.

The State Government and its planners also resisted the decision, as they undermined the ability to extract their own share of the excess prices stemming from the protection of existing centres, as well as their control over people's actions and lifestyle.

Here is a clear case of government seeking to impose its own views and preferences on those of the consumer.  Just because not everyone has access to a car, it is presumed that nobody may use a centre which does not give the same advantages to car owners as non car owners.  Just because some developers have paid their political dues and gained a priority planning permission as a result of offering outlays that government bodies demand means that all should pay these.  Taxation is available to provide distribution of resources from those who are deemed able to support others to those deemed worthy of support.

Shops exist to supply services to willing consumers.  They do not have a reason for existence per se and to offer them protection detracts from their reasons for establishing in the first place.  Regulatory measures like those identified and proudly paraded in Planning Schemes constitute a hidden form of taxation that makes it difficult for the community to evaluate, or even to recognise, as a charge on their purchases.  And, as recent events in northern Melbourne, Geelong, and the Gold Coast have demonstrated, it provides a pool of resources that corrupts the democratic processes.

RURAL LAND

The zones for rural Victoria require 40 hectare per lot size for subdivisions in the "farming zone".  A new definition designates a "rural living zone" in which an 8 hectare minimum prevails.

Farmer representatives are reportedly against urban expansion.  They maintain that it pushes up land values (and therefore rates) and brings about restrictions on farming activity.  There is merit in having regard to these matters -- it should for example be incumbent on any people electing to build near farms that have objectionable features to accept those features and relinquish any grounds for seeking to have them curtailed.  Similarly, it appears unfair to charge farmers increased rates unless they obtain correspondingly increased value.

However, we should be wary of accepting farmer views that amount to vetoes on the use of land other than their own.  It is easily possible to create a surfeit of democracy whereby the individual is oppressed by a majority.  Land is something individually owned and not the responsibility of something called "the community".  It is not appropriate that organizations should be able to successfully lobby for others not to use their property as they see fit -- farmers in general cannot be given a mandate to determine what other farmers do with their land (they do, of course have the right to insist on non-interference with the peaceful use of their own property).

IMPROVING THE ADMINISTRATION OF
PLANNING APPLICATIONS

Appraisal of planning applications should not be lengthy and time consuming.  The law is clear over the matters that fall within the applications and the applications themselves are almost invariably made by qualified surveyors (indeed, except for single lot subdivisions only a surveyor is permitted to make an application).  The issues should be approved automatically and without recourse to the political elements of councils.

There are some councils which have a good reputation for expeditious consideration and some which do not.  The industry is familiar with the intrusiveness of different councils and there would be many operational staff within DSE with similar knowledge.  Importantly, delays commonly occur because of councilor (and sometimes council official) intrusiveness regarding applications.  There should be far greater automatically in processing of development applications and less discretion at the local level in their assessment.  A person's property and its use should not be subject to socialization which is the outcome of intensive oversight of its use.

It would be useful to assemble material on applications and the gestation times involved on a comparative basis in processing applications.  This would facilitate the introduction of improved approval procedures and may allow the development of incentive systems to expedite approvals.  Saving time offers the opportunity to make savings in land inventories -- a one month such saving would be worth tens of millions of dollars to the community.

Measures could be readily developed to provide incentives (and penalties) to councils based on their performance in expediting outcomes.

CONCLUDING COMMENTS

Australia has perhaps the lowest level of urban development (0.3% of the land area) in the world.  And although Victoria is the most densely populated of the states, its urban area occupies among the lowest proportion of any comparable world region and the urban area itself would certainly comprise under 2% of the land mass.  Denying people the right to build homes on property they own is an example of egregious NIMBYism on the part of arrivistes seeking to deny others a break and often in the process expecting the increased scarcity of housing land in their own area to yield a windfall gain.  Such actions are all the more inexcusable in a nation with the greatest abundance of land in the world.

Though requiring organisational skills (and, sadly, skills in working through labyrinthine bureaucratic structures), the process of building a house is not complex as evidenced by the tens of thousands built every year in Victoria.

The role for government should not be to police every person's actions on their own property.  Rather it should be to ensure certain essential services are undertaken, services that in the main provide "collective goods".  Thus, in a free society based on private ownership, the government cannot arrogate to itself or be dragooned into a role of property control.  While nobody has exclusive control of her own property, since it necessarily infringes on that of other people, the rights of "standing" for those who wish to object to a use or curtail the landowners preferred usage must be strictly limited.

It is, for example, perfectly reasonable for a property owner to require peaceful use of his land without the invasion of noxious smells from an adjoining or nearby property.  It may be reasonable for the property owner to have rights to an unencumbered view.  The common law has evolved a very sophisticated, and generally economically efficient, ability to cope with such interactions in the use of property.  But it is not appropriate for a property owner some distance from another property owner's land to object to the nature of the dwelling on that land.

The wider that "standing" of people with an entitlement to object to a use of land that they themselves do not own, the more property falls under collective ownership.  With increased infringements on the landowners' rights the land use itself is socialised -- owned by the state as a bureaucratic collective -- with all the shortcomings and inflexibilities of inefficient use this entails.

One outcome of that socialisation is already evident with the escalating developable land prices.  Another outcome is the scarcity of shopping centres and the suppression of competitive forces in shopping developments that leads to very high profits by the political entrepreneurs who obtain approvals, profits earned from excessive prices on consumers which scarcity of competition allows.

These matters are assuming an increased prominence.  Micro-economic reform has restored competition and property rights to its appropriate role within the political firmament but local government and planning issues have been immune.  Rather astonishingly, the Government's response to the NCC review of Victoria's Planning and Environment Act recognised that "Zoning laws prevent land from being put to a more productive use that is valued more highly by the community" (p. 20) Insouciantly it went on to argue that zones had been made less restrictive.  This in itself is debateable and seems to be confounded by the evidence of higher land costs.  The very notion of the planning regulations is so alien to the deregulatory agenda that is National Competition Policy, however, that its on-going existence cannot be compatible with anything other than major efforts to rescind the restrictions on competitive provision of land for housing and other uses that its landowners would wish for it.

Among the claims of zoning controls that are presently in place is that they ensure "land is used for its most productive purpose".  There is an Orwellian touch about such statements which seem to rest on the premise that the all wise all seeing government official is superior to the market in making such assessments.  Surely the history of the world since 1917 has demonstrated the falseness of such statements.

RECOMMENDATIONS

The restoration of low costs for the home building industry and in other urban costs and services requires measures such as:

• Relaxation of restraints on where homes may be built, even if this means growth in the urban sprawl so dreaded by the chattering classes.  This might entail restricting area restraints only to areas of great natural beauty, for example, national parks and so on.
• Considerably curtailing requirements on builders to set aside land for public use.
• Restraining the demands that can be placed on developers for expenditures on infrastructure by redefining infrastructure to mean such essential features as water and sanitation, and local roads, and by recognizing that much of the expenditure for these services is already funded out of general State and local charges.
• Immediately remove restrictions on land outside of the growth boundary to allow house building on the scale and to the extent that the builder and developer can see a means of attracting customers.  Allow shopping centres to be built without reference to perceptions of "need" and without insistence of installing transport and other services that the owner does not consider appropriate to meet the target ed consumers.
• Immediately remove restrictions on new building in rural areas.
• Instruct administrators in local authorities on how to expedite planning applications and introduce a system of performance based incentives to support this.

Victoria deserves a good Opposition

Victoria is once again a one-party state, Labor for now and beyond.

The Liberal Party -- the party of free enterprise and business -- has functionally collapsed.

The party has no leader, no money, no staff.  And 30 per cent of sitting members, including many of its most competent, are leaving by choice at the next election.

Moreover, even before Mr Doyle's departure this week, polls indicated that the party will not only lose the election in November but also lose 10 seats and therefore be out of range of government for at least another eight years.

Should business be concerned?

On the positive side, the Bracks Labor Government is, in the main, pro-development, pro-business, pro-reform, fiscally conservative and open to ideas.

It has continued, with a bit of tweaking, the reforms of the Kennett government and has rightly focused most of its spending on delivering better services in public hospitals, public schools and public safety.

In no small way, the Labor's competence has caused the collapse of the Liberals.

Moreover, the Liberal Party is not now fit to govern.  It has not done the hard yards on policy.  At best, its approach has been to adopt a "me too, but better" stance.

This is not for lack of issues.  In many areas the Bracks Government has blundered:  its mismanagement of biotechnology, energy and resource development;  its failure to control the numbers and wages of bureaucrats;  and its failed Melbourne 2030 planning laws.

Instead, the Liberals have focused more on themselves than the wider community.

Of course, it is very difficult to have your voice heard in opposition.  And with its mountain of cash and heavy expenditure on media management and manipulation, the Government has made the task more difficult but not impossible.

In the long run, good governments need good oppositions -- and the Bracks Government needs it more than most.

The disciples of Kirner still hold sway in the Government.  The union movement not only has undue sway over the Government but is seeking to use it and its resources as their own.

The green influence is still on the ascendancy.  The leadership team of Brumby and Bracks are all that stand between good and awful government.

To date, the memory of failures past and the strong desire to win government have kept the forces of irrationality largely in check.

However, both sources of motivation are likely to wane with time and another election victory.

The Bracks Government remains largely untested fiscally.  Thanks to rapid economic growth, the GST and a huge fiscal inheritance, it has been able to simultaneously spend at record rates and balance its books.

This will not last.

Sooner rather than later, tax receipts will slow, exposing the unsustainable level of past spending and the Government will be forced to make some tough decisions.

We need an opposition to bring the Government to account on spending and taxing and punish it politically when it gives in to special interests -- or just simply gets lazy.

Our system and quality of life depend upon it.

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Curse of bountiful resources

History shows that boom times contain the germ of their own downfall.

It's possible to have too much of a good thing.  Individuals can consume too much chocolate.  Governments can collect too much revenue.  Countries can have too many natural resources.  What at first glance appears to be positive might have long-term negative consequences.

This is hardly a new insight.  In the 18th century, in his book The Wealth of Nations, Adam Smith discussed the paradox of China.  Even though it had land that was more fertile and more easily cultivated than in the West, its population lived in a poverty worse than in "the most beggarly nations in Europe".  Smith speculated that a reason for this was that because of the ease with which livelihoods could be sustained, albeit at a low level, there was no incentive for improvement.

In the 20th century a similar phenomenon was given the name the "resource curse".  Nations rich in natural resources experienced growth rates far below others that appeared to have few inherent advantages.  It is the story of Africa compared with Asia.  In countries with access to effortless wealth, there is no imperative for political or economic reform.  Nor is there any concern to ensure that growth is sustainable.  Elites concentrate on distributing income rather than on generating it.

It might be that in 2006 Australia is experiencing its own resource curse.

Surging Asian demand for our energy and minerals has generated billions of dollars of additional tax receipts for the federal government.

As ANZ Banking Group economist Saul Eslake pointed out in these pages on May 2, total tax revenue for the next fiscal year is likely to be at least 10 per cent higher than when it was first estimated three years ago.  Next Tuesday when he delivers the budget, Treasurer Peter Costello might provide tax cuts, but it appears unlikely that the additional funds will be devoted to tax reform.

One of the symptoms of the resource curse is the tendency to assume that conditions will continue as they are indefinitely.

It was such a belief in an unchanging world that led Labor and the union movement to oppose Work Choices.  Their argument was that if the present industrial relations system has given the country its current record levels of employment there's no reason to change that system.  What they ignored was the possibility that, with reform, unemployment might be even lower than it is now, and that the legislation was as much about the future as the present.

Some of this same sort of thinking is reflected in the Coalition's approach to welfare spending.  It is taken for granted that we'll keep being able to afford the existing high level of transfer payments to the middle class.  At a time when private income for the middle class is growing, the Coalition is providing it with ever-increasing government support.  The government should be doing the opposite of what is happening.  In the midst of unparalleled prosperity, middle-class welfare should be withdrawn, not increased.

There is a precedent for what is occurring.  Although Australia has had similar resource booms in recent times, none of them created the kind of structural change now taking place as the federal government's high-taxing, high-spending regime becomes entrenched.

The parallel with today lies in the middle of the 19th century when natural resources, primarily gold, produced unprecedented riches.  By 1870 Australia's per capita gross domestic product was the highest in the world, 15 per cent higher than Britain's, and 50 per cent higher than in the United States.  Within a few years the twin disasters of industry protection and centralised wage fixation were established, and in the following decades the country's economic performance plunged.  Wealth produced bad policy:  a resources curse, indeed.

Colonial politicians believed they would always have enough money to fund any policy decision they chose to make.  It's taken more than a century to unwind the damage created by the discovery of gold, and in the case of industrial relations the task even now is not complete.

The question of how to manage the financial beneficence the nation is now enjoying is one of which the Coalition is acutely aware.  Indeed, last year Prime Minister John Howard himself identified the issue facing the government.

"The politics of prosperity are no less challenging than the politics of adversity", he said.  "The biggest challenge of all is to avoid the pitfalls of complacency.  Complacency is the giant-killer of Australian politics".

He might have added that complacency is also the giant-killer of good policy.

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Grasslands value lost on greenies

Last year the Victorian government spent an extraordinary $400,000 to save a large gum tree in Albert Park in the middle of Melbourne.

The eucalyptus was in the way of the new swimming pool being built for the Commonwealth Games, so the Government had the whole venue redesigned, rather than suffer protests like those that erupted when three old elms were cleared from Albert Park a year earlier.

This overwhelming desire to save large trees, and old trees, perhaps reflects a general fear that we have already cut down too many trees.

There is this idea that most of the rainforest in Brazil has been destroyed, but interestingly despite the publicity given to clearing activity in South America, 83 percent of the Amazon remains intact.

I lived in Africa during the late 1990s and watched open savannah country replaced with acacia forest in areas where elephants were excluded.

In Australia several million hectares of the vast Mitchell grasslands, which extend from the Northern Territory through western Queensland into northern NSW, have also become infested with Africa's prickly acacia which have colonised these areas.

Poet Doretha MacKellar may have been writing about the Mitchell grasslands when she penned "My Country" in 1904 with the verse:

"I love a sunburnt country,
A land of sweeping plains".

The MacKellar family had properties in the North West near Gunnedah.

Gunnedah is a few hours drive east of Gilgandra, Warren and Nyngan, where police assisted NSW Department of Natural Resources staff carrying out land clearing compliance checks a few weeks ago.

This highlighted the fact that across Australia many landholders and Landcare projects focused on restoring grassland areas are now constrained by tree clearing laws and regulations that perhaps over value trees and totally ignore the ecological value of grasslands.

Interestingly, the last comprehensive environmental report by the Australian Bureau of Statistics, "Measuring Australia's Progress 2002", only reported on the area of tree clearing.

It did not report on the net change in tree cover, as though trees do not re-grow and grassland can not be lost to invasive scrub and rainforest -- which is the situation in many parts of rural and regional Australia.

In Albert Park in Melbourne most of the trees are located along roadsides or between fairways in the golf courses.

The trees are generally either in avenues or clusters and any re-growth is carefully restricted or managed.

Imagine if The Wilderness Society decided Albert Park had too few trees?

Imagine also if the environmentalists insisted that that the mowing of grass stop altogether?

There would probably be good Eucalyptus re-growth within a year and an outcry from the same local residences who insisted the single gum tree be saved from the redevelopment for the recent Commonwealth Games.

You would think these city folk would be demanding space to kick a ball and fly a kite, in much the same way as farmers at Nyngan or Coonamble want to be able to manage invasive scrub on their farms so they can run a few cows.

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Labour clique threatens free market

Although it may sometimes be demonised, a free market is the essence of what makes successful economies work.  We might fear free-market competition from China for example, but history has taught us free markets expand the economic cake.  Restricted market economies, such as that of North Korea, create unemployment, poverty and human misery.

But the mechanism that enables free markets to operate is under threat from an unexpected source, the International Labour Organisation, and the stakes are high.

The ILO is a division of the United Nations.  It is the peak international labour regulation body, setting standards that countries usually use as the benchmark for domestic legislation and policies.

Over the past decade, the ILO has been engaged in its most protracted and difficult debate, one which effectively defines the reach of labour law and the influence of the ILO.  The debate is expected to conclude next month, and if it goes where some proponents intend, labour law will be allowed to cross over into commercial law.

This is why the free market is under attack.  In its legal construct, the free market is a product of commercial law.  Commercial contract law, reinforced by legislation such as the Trade Practices Act, holds that price-fixing and collusive, monopoly activity are illegal.

By comparison, employment law, backed by ILO principles, sanctifies price-fixing of employment contracts and encourages employee collusion under collective bargaining.  This is accepted on grounds of employee protection and social good.

The agreed, sharp legal distinction between commercial and employment contracts has maintained the policy separation between free-market processes and collective labour.

If, however, employment law gains jurisdictional reach over aspects of commercial law, collusion and price-fixing will become legal commercial activities, albeit under the guise of employment law.  Law and policy designed to enforce and protect free markets would spiral into confusion should this occur.  Free markets are therefore facing a cancerous threat.

The platform for this is the ILO's "Scope of Employment" debate.  This first emerged in 1996 in response to the labour regulator's concerns that growing numbers of independent contractors were falling outside their regulation.  Inconclusive debate occurred in 1998, proceeded again in 2003 and is listed, once again, for next month.  The ILO intends to create a new international instrument on the issue.

What defines independent contractors is the fact that individuals earn their living by using the commercial contract as opposed to the employment contract.  The ILO recognises and accepts this legal distinction.  In effect, individuals can be a business, even if just a business of one.  As commercial businesses, independent contractors are subject to commercial law requiring them to operate under free-market principles.

But labour regulators have difficulty conceiving of individuals as a business.  It's an alien concept to their historical policy paradigm of dependent employees.

Yet, in Australia, 1.9 million people work this way, including some 28 per cent of the private-sector workforce.  The ILO has surveyed the numbers of independent contractors internationally, identifying that they comprise from 5.3 per cent to 91.8 per cent of national workforces globally.

Next month, the ILO will debate the claim that people who are in "triangular" relationships are employees.  The argument is that if there are two commercial contracts between three parties and one party is an individual, that employment exists.  The ILO also proposes that employment law can intrude into commercial contracts to enable price-fixing.  That turns commercial law and economic policy on its head.  It's illogical -- but logic may not figure in the ILO's decision.  Some countries ignore ILO decrees, saying they are illogical, but an unsavoury ILO policy result could seriously affect Australia.

Australia is a world leader in embracing independent contractors through appropriate regulation while maintaining their business status.  Pay as you go taxation is just one example.  It resolved problems over the Australian Tax Office's tax withholding powers.  The impending Independent Contractors Act will secure independent contractor rights to be a business.  Both are a world first.  The ILO agenda runs counter to these policy initiatives.

Further, developing economies lean heavily on the ILO for advice in designing their labour regulations.

An ILO steering developing nations into labour regulation that sanctified price-fixing and collusion under commercial contracts, would wreak economic havoc.  In Australia's Asia-Pacific region sphere of interest, undoing such policy damage would be a significant task.

The ILO is an important international body.  It can help or hinder workers' rights and global economic advancement.  The stakes are high.  The outcome is uncertain.

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OHS the new battle ground

Anyone who thought the battlelines over workplace reform were clearly established around Work Choices needs to look again.  The extent to which Work Choices is only one part of a much larger structural change is becoming apparent.

In the latest development, occupational health and safety laws have shifted firmly onto the agenda, in a way few could have expected, affecting everything that made the old industrial relations club in Australia so powerful.

The effect will be particularly acute in NSW, where the political fallout could affect both the federal and state elections.

The Commonwealth is not attempting a direct OHS takeover, but in 2004 it made its own workers compensation scheme, Comcare, available to businesses large enough to self-insure and which were in competition with a government authority or ex-authority.

And early this year, the Commonwealth introduced legislation to ensure that, when a business joins Comcare, it is subject to federal OHS laws and exempt from state laws.

It is understood that a rush of applications to join Comcare is now underway.  Why?

The federal OHS laws are similar to most of the state laws.  Some key principles apply where employers, suppliers and so on (including employees) are held liable and responsible for what they reasonably control.  But in two areas the states differ markedly from the Commonwealth.

Most states give unions high workplace entry rights on OHS issues, and there is a state push to jail managers over deaths without applying normal criminal processes.  Commonwealth OHS laws downplay union OHS entry rights and apply strict criminal standards in the event of possible jailing.

The Commonwealth package of single, national workers compensation and OHS standards is extremely attractive to nationally operating businesses.  It's a significant, initial step towards national consistency.

In NSW, the reaction on the OHS issue is massive.  The state has OHS laws unlike any other state and, possibly, unlike any country.

The 2000 act holds employers automatically guilty in the event of an OHS incident.  With a glaring double standard, employees are deemed not to be guilty.  The test of "reasonable control" is not applied in the prosecution of employers -- only in defence.  Unions prosecute and receive half the fines.  Jailing outside of normal criminal processes is possible.  Prosecutions occur in the industrial relations system without rights of appeal.

Significant numbers of prosecutions of small and large businesses have occurred, or are in the pipeline, and owners and managers have become fearful.

Examples of clear and severe injustices are widely known.  There is an emerging view that OHS prosecutions in NSW are tainted by political and union agendas.

The OHS laws are being spoken of as a factor in the declining NSW economy.

To try to quell the brewing unrest, the state government conducted a review of OHS last year.  For the first time, every industry association made submissions calling for fundamental change.

The NSW political settlement around OHS has collapsed.

The government is caught in a corner.  It can no longer claim business support for its OHS laws.  If it makes the laws consistent with those in other states, it risks a damaging split with NSW unions.

The Commonwealth is offering an escape, for larger NSW businesses at least.  Smaller businesses may look to a change of NSW government in March 2007.

The NSW government's response has often been to deny the truth of its laws.  Recently, a huge public relations counter-offensive was launched, focusing on work-safety victims.  It's designed to intimidate businesses and industry associations into keeping their objections quiet.  It's also an attempt to paint the Commonwealth as a defender of unsafe business practices.

A new phase of the national work reform agenda has began.  The Commonwealth push for nationally consistent OHS laws is now on.  With NSW under the greatest pressure.

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Wind in sails of a new chorus of claims

The first cancellation of a project as a result of environmental activism took place 30 years ago.  The previously unknown snail darter was judged to be under threat and would face extermination if the then 95 per cent completed Tellico Dam in Tennessee were commissioned.

Federal Environment Minister Ian Campbell justified his decision early this month to prevent the building of a wind farm in Gippsland on fears its blades would chop up the occasional rare orange-bellied parrot.

Australia has had many examples of anti-development zealotry.  Unlike the Gippsland wind farm, most of the halted projects would have had considerable economic benefits.  Malcolm Fraser led the way.  Shortly after the snail darter stopped the Tellico Dam, he brandished his green credentials by banning sand mining on Fraser Island, where it would have done no harm.

We saw mighty oaks of green economic vandalism flourishing from such acorns.  The ALP tapped the environmentalist current in winning the 1983 election.  A policy banning the construction of a major new dam began the gradual process of locking up Tasmania for development.

This was followed by the Hawke government's banning uranium mining on a former cattle station -- which one minister described as "clapped-out buffalo country" -- within the boundaries of a national park.  And we have seen the travails of the ALP policy from resolutely in favour of uranium mining, to adamant opposition, to "three mines" and now heading back towards support.

The High Court provided another arm to regulatory imperialism when, in the Mabo decision, it reversed the established law of property by inventing a new notion of indigenous rights.  Native title overlaying ordinary title is, with environmentalism, throttling new mining developments.

Both have proved enduring and immune from criticism.  Hence, Minerals Council of Australia chief executive Mitch Hooke ("Unblock minerals investment", AFR, April 11) complains about "structural impediments" to exploration.  Rather than seeking removal of the regulatory measures that have a choke hold over the industry he represents, Hooke falls back on seeking tax breaks.

Campbell's ostensible concerns for the orange-bellied parrot are in stark contrast to former Victorian premier Jeff Kennett's dismissal of suggestions that the bird might prevent the relocation of the Coode Island chemical complex;  he declared he would not be thwarted by some "trumped-up corella".

Campbell must have clear and well-justified reservations about the Gippsland wind project and used the Commonwealth's Environment Protection and Biodiversity Conservation Act to halt it.

One problem with using the act is that its provisions are sufficiently malleable to be exploited by opponents of economic development.  There are suggestions a bird previously considered extinct could be used to stop new iron ore mining proposals at Hamersley.  A Melbourne housing development is also in the sights of the anti-development brigade, who claim a moth may be threatened.

There are too many grounds for reducing prosperity by regulating business.  The wind farm furore coincided with the publication of the report of the Taskforce on Reducing the Regulatory Burden on Business, which addressed excessive regulation driven by "societal and political pressures" stemming from "a growing and unsustainable aversion to risk".  Contrary to the findings of that report, Campbell has stoked the fires of environmental activism.  He is wrong if he thinks he can harness them.  Not only will his reactivation of the Environment Protection Act's provisions engender a new chorus of claims, but it will build pressure for hiving off such decision making to an expert committee, the membership of which will doubtless become dominated by those with environmental concerns.

A postscript:  The outcome for the Tellico Dam was a deal five years later involving unrelated measures that allowed the dam to proceed.  The snail darter was found to be far from endangered.  It thrived throughout the area and was sufficiently adaptable to continue doing so in the dam.

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