Thursday, May 24, 2007

A Government of Idiots?

Until the unions did their best to sink him, Australia's presumptive next Prime Minister was doing a good job of presenting himself as relatively conservative. The article below by Colebatch the Younger is therefore a useful corrective

Australia is a stable, well-governed country, but if Kevin Rudd becomes Prime Minister it may not be possible to go taking this for granted.

In the 11 years since it was elected, the right-of-centre government of John Howard has proved itself Australia's best government ever. That is not to say it has been perfect, just very good indeed. The economy has boomed and gone on booming. Per capita income has soared, inflation, unemployment and interest rates have all been low. More Australians are wealthy and enjoy a higher living-standard than ever before. A number of potentially serious regional foreign crises have been handled effectively. Australia in general is one of the most respected countries in its region and a leading player in south-east Asian international co-operation and diplomacy. It has taken a strong position in the war on terror and supported the U.S. internationally both diplomatically and militarily.

Australia has been well-governed and prosperous for so long that there is a feeling that such is the natural and unchangeable order of things. This could be a dangerous delusion. Kipling once warned of:

Life so long untroubled, that ye who inherit forget.
It was not made with the mountains, it is not one with the Deep.
Men, not gods, devised it; men, not gods, must keep ...

Alvaro Vargas Llosa wrote recently of the "Return of the Idiot" -- of economically illiterate populists like Hugo Chavez fired by anti-Americanism and the ghost of communism: "Today, the species is back in force in the form of populist heads of state who are reenacting the failed policies of the past, opinion leaders from around the world who are lending new credence to them, and supporters who are giving new life to ideas that seemed extinct." There are signs of this attitude re-surfacing on the Left in mainstream Australian politics.

That the opposition Australian Labor Party is now ahead in the opinion polls, with an election a maximum of about seven months away, is ominous, given what it has become. Bob Hawke, Labor prime minister for much of the 1980s, proved a sound, responsible and beneficial economic reformer. But it seems times have changed, and not for the better. The present leader, Kevin Rudd, despite wearing nice suits (he is an ex-diplomat) and projecting innocuousness, seems to have a grasp of economics comparable to that of Hugo Chavez. Indeed a group of Rudd's supporters -- including the national president of the Labor Party and a host of Labor-affiliated union leaders -- signed a letter inviting Chavez to Australia to advise on the governance of the country, claiming:

We have watched developments in Venezuela with great interest. We have been impressed by the great effort that your government has taken to improve the living standards of the majority of Venezuelans. Although we are on the opposite side of the globe, we feel that our shared ideals of social justice and democracy bring us close together ... what Venezuela has been able to achieve in so little time will be a source of inspiration and ideas for many in Australia.

Rudd has condoned this poisonous nonsense and refused to discipline or rebuke those responsible, despite or perhaps because of the fact that apart from anything else it is an obvious insult to Australia's closest ally, the U.S. Rudd himself spouts simplistic anti-market extremism:

Our common enemy is the political project of John Howard which seeks to reconstruct Australian society ... Howard's vision for Australia is Friedrich Hayek's rampant individualism where unfettered free markets determine the value of not only every commodity but of every person and institution.

Rudd bolsters his self-righteousness and economic ratbaggery by invoking religion. In the U.S. this might be normal for a politician. In Australia, where politicians don't wear their religion on their sleeves (Howard is a Christian but doesn't invoke the fact to justify his actions), it is a disquieting departure. This is particularly so when it is bracketed with anti-capitalism and eco-extremism, with implied or explicit claims to superior moral worth over the so-called "common enemy" and of a general monopoly of moral rectitude. Rudd has claimed:

What, for example, is a Christian view on the impact of the Americanization of our industrial relations system on family living standards and family life? What is a Christian view of global climate change, given Christian teachings on the proper stewardship of creation?

In a recent article titled "Child of Hayek," Rudd demonstrated a truly scary, Chavez-like blend of moral self-righteousness and ignorance of economic thought, theory and history. He claimed: "Friedrich Hayek...argued that the only determinant of human freedom was the market."

Actually, Professor Friedrich von Hayek said centrally planned economies are incompatible with liberty. In free societies he should be regarded as a hero. Rudd also claimed absurdly that: "Hayek argued that any form of altruism was dangerous because it distorted the market." Nothing like this is to be found in Hayek's writing. Is Rudd confusing Hayek with Ayn Rand? Or trusting no-one in his audience knows the difference? Hayek's commitment to humanity, compassion and charity was abundant and has never been questioned by competent scholars. That Rudd is capable of such perversion of history and economic ideas, whether through ignorance or irresponsibility, might seem a small thing for a private individual -- but not one who may well be Australia's next prime minister.

Rudd's green extremism crosses the borders of the irrational, with a bizarre promise to reduce Australia's carbon emissions by 60% by 2050. Terry McCrann, one of Australia's most respected and politically impartial economics journalists, summed the matter up starkly:

Kevin Rudd has recommitted a Labor government to damaging the economy in the short-term and destroying it in the longer-term.

What he proposes would do far more economic damage, sow far worse social chaos, and specifically and directly hurt individual Australians more than the damage we are still suffering from the disastrous Whitlam period in the 1970s.

Michael Chaney, president of the Business Council of Australia, has said: "You run the real risk that you'll destroy the economy without any benefit to the world's climate." This is extraordinarily strong language from the council, a normally cautiously-spoken body that works hard to cultivate good relations with all political parties.

Rudd's deputy, Julia Gillard, is a far-leftist who claimed in the national daily the Australian that a "strong economy should not be at the cost of fairness" -- and it is hardly rocket-science to work out what that means. Rudd's environment spokesman, Peter Garrett, is a lawyer but best known as a rock-singer and anti-development, anti-capitalist, anti-U.S. activist and general subscriber to the package-deal of modern far-leftism. He has said that economic growth "almost always" leads to a worse environment. Shadow Finance Minister Lindsay Tanner is a member of the Party's "socialist left," the most left-wing faction in the Labor Party spectrum. He is a former student radical and strong advocate of compulsory student unions (abolished by the Howard government, to the great benefit of most of the country's university students).

Senior journalist Paul Kelly, who is anything but an uncritical supporter of the present government, has written in words of astonishment about Rudd's economic primitivism: "Rudd has seized a bizarre fate -- a resurrection of trade union power, collective bargaining rights and a far stronger industrial umpire as the keys to [the prime ministership]. Rudd's new industrial policy is a giant step into the past. Indeed, so sweeping is Labor's embrace of the principles of collective power and re-regulation that it must be wondered whether Rudd fully comprehends what he has done."

Even the Labor Party premier of Western Australia, Alan Carpenter, heading a state whose mineral exports make it one of Australia's principal economic power-houses, seems unnerved at what is being proposed.

In 1972, Australia elected a Labor government led by Gough Whitlam, a smooth, pragmatic-seeming lawyer, who came to office with an image of suave modernity not dissimilar to that of Rudd today. It took Whitlam and his cabinet, enthralled by economically illiterate populism, only a few months to reduce Australia to economic chaos. Inflation went from 4.5% to 16.9%, devastating the lives of pensioners and others on fixed incomes (Mrs. Whitlam dismissed it as "a lot of hoo-hah"). A later Labor finance minister, Peter Walsh, said: "Most of the time Whitlam behaved as if the economy didn't matter. Most of the 10 or 12 dominant ministers were economic cranks."

When Whitlam came to power, Australia had an unemployment rate of 2.4% and falling. It went into double-digits. Economic growth rate went from 4.9% in 1972 into minus figures. In September, 1974, with the country ravaged by inflation and unemployment, the Whitlam government approved a 32.5% increase in government spending. By the end of 1974 this had risen by 45%, the budget deficit had gone from 0.6% to 4.2% of GDP, and unemployment had more than doubled over the year.

The crackpot Jim Cairns, sometime deputy prime minister and treasurer, was probably a Soviet agent of influence (Whitlam himself tacitly admitted to the U.S. ambassador that Cairns was a security risk and would not share U.S. intelligence briefings with him). Cairns as treasurer printed money ever faster in an attempt to destroy capitalism. A multifaceted attack was made on the federal system, with the intention of destroying the states lest they obstructed grandiose plans of social engineering. It culminated in a bizarre attempt by the federal government to borrow money from Iraq for an undisclosed quid pro quo. Finally, with the government in complete dysfunction, the governor-general intervened to call a general election. Australia has strong democratic institutions and traditions and it survived. Nonetheless it took many years to recover from the economic damage. Though the Whitlam government's wrecking activities were limited by its relatively short term in office, the lesson is chilling: Australia elected a government of Llosa's idiots once and it could do so again.


Rudd's union problem

Plainly industrial relations is by far the most important policy issue to emerge in this election year, the one with the potential to decide the election outcome. The strongly adverse business reaction to the launch of Labor’s industrial relations policy took the political momentum away from Kevin Rudd for the first time, but only in the parliament, not the opinion polls.

The challenge for John Howard and Peter Costello if they are to retain power is to communicate the very real economic threat posed by Labor’s policy and translate it into a broader electorate concern with Rudd’s economic credentials. This is something they have notably failed to do so far. Yet Labor’s industrial relations platform is a repudiation of the very basis of Rudd’s claim for legitimacy as the next prime minister.

He is selling himself as the fresh new leader who will ensure Australia’s prosperity outlives the mining boom, and paints Howard as the ageing Prime Minister who failed to grasp his policy opportunities to secure Australia’s future. Rudd’s address to the ALP’s National Conference at the end of April was called “A Party for the Future”, and he told his audience his first step would be “to throw out Mr Howard’s Work Choices laws lock, stock and barrel”. This is not a step into the future but a retreat into Australia’s failed economic past. Paul Keating liked to call it an industrial museum. The three biggest dinosaurs in the museum were protectionism, and the unions and arbitration system that depended on it.

Under Bob Hawke and Keating, Labor largely dismantled the tariff wall and Keating introduced enterprise bargaining, albeit union enterprise bargaining. Under Howard, and with the market pressures from globalisation, the opening of the Australian labour market has continued. Until now.

It says a lot about Rudd’s industrial relations policy, none of it good, that the great resource companies at the forefront of Australia’s dynamic interaction with the global economy are also the ones bearing the brunt of Labor’s attack - with its pledge to abolish the Australian Workplace Agreements that have been crucial to these companies’ competitiveness in global markets, and the aim of returning the unions as a force in the iron ore fields, where they used to create industrial havoc. Regular strikes over such compelling industrial issues as the tomato sauce in the canteen so undermined Australia’s reputation as a reliable supplier that it hastened the emergence of Brazil as a major competitor. It is no coincidence that the mining companies, operating in fiercely competitive world markets, led the charge to dismantle Australia’s tariff wall and demanded the right to talk directly with their workers and not through unions and their cat’s-paws in the state and federal industrial commissions.

Julia Gillard, the architect of Labor’s policy in consultation with the ACTU, and Rudd - who admitted knowing little of the policy detail when he announced it - have been obliged to engage in sham “negotiations” with the miners. Rudd told The Australian that the mining sector had a legitimate interest when it came to flexibility because it was exposed to international trade, then promptly confirmed he would abolish AWAs.

But it isn’t only the resources sector that has a vital interest in labour market flexibility. As Rudd acknowledged, it is a “legitimate expectation” of the general business community. Which makes all the more extraordinary Gillard’s reaction to the suggestion that business might run its own advertising campaign to explain the virtues of Work Choices. She immediately warned Australian business it could get injured, code for union biffo. “I’d be concerned if the business community got itself into the political fray. I’d be concerned if they became, if you like, propagandists for Mr Howard,” an unblushing Gillard said.

Apparently it’s OK for the ACTU and the unions to spend $25 million or more of their members’ funds engaging in the political fray and running a virulent scare campaign against Work Choices, but nobody else is supposed to have a say. Subsequent attempts by Gillard and Rudd to play down Gillard’s revealing blunder as a joke that misfired have been unconvincing.

Business is only too familiar with union violence. Labor loves to deride Howard as a politician from the era of the white picket fence. Labor’s picket fence is the one manned by violent unionists engaging in illegal industrial action and contemptuous of the law, and Labor’s proposed industrial relations framework, from what we know of it, will create an institutional and legal structure where this may again become acceptable behaviour.

Obviously the problems with Gillard’s industrial relations policy run much wider and deeper than just AWAs, important as they are. The proposal to get rid of the Australian Industrial Relations Commission, for example, is driven by the unions, who resent the fact that the Howard Government has been able to make enough appointments to the commission to stop it being a reliable instrument of union power. It is to be replaced by a union-friendly bureaucratic octopus with tentacles that can reach into every workplace, from offices located in city suburbs and regional centres.

Shutting down the highly successful Australian Building and Construction Industry Commissioner, who has brought industrial peace to an industry long marked by constant industrial disputes and rampant union thuggery, is another disturbing development. So is the introduction of compulsory collective bargaining and Labor’s unfair dismissal proposals.

And the reason for all these changes? Because the unions want them, and the unions still control Rudd Labor. Yet in the engine room of the economy, the private sector, about 85 per cent of employees are not members of a union. So who is Rudd representing with his anachronistic industrial relations policies? Union bureaucrats and public servants? Hardly the most likely progenitors of our future prosperity.

In a world economy that has to absorb the output of many millions of new, largely unskilled, workers from developing countries such as China and India and cope with shrinking workforces due to population ageing in developed economies such as Australia, a flexible labour market will be crucial. Rudd promises flexibility but his labour market policies will not deliver it, and this failure strikes at the heart of his claim to have the economic credentials to be Australia’s next prime minister.


Agrarian socialism lives on

No disgrace seems enough to kill it -- and the Australian Wheat Board got it very wrong indeed -- as one of Saddam's little helpers

THE Howard government had a tremendous opportunity to radically reform one of the last bastions of socialism, and scrap forever the single desk for wheat exports, to crack open the market to competition, to create a new world, where grain growers would have freedom to trade in the same way as other businessmen.

Clearly, this was too much to expect. It’s an election year. The National Party is under siege. Growers threatened mutiny if the single desk was scrapped. Many of them still support AWB.

Never mind that AWB doesn’t deliver the best prices; that it charges hefty service fees; that it has damaged, perhaps forever, Australia’s precious trading reputation. Never mind that free trade is always better than shackled trade.

The government’s “reform” - announced during question time this afternoon - essentially maintains a single desk for wheat exports, run by a company that will look and smell very much like AWB. Also, no punishment for any minister or official; but again, what more can one expect in an election year?


Last days of literature

ENGLISH literature was in danger of disappearing and should be taught as a separate subject in schools, an education conference has heard. Griffith University Associate Professor Pat Buckridge told more than 150 English teachers on Saturday that Queensland faced the "imminent disappearance of the literary canon" if literature was not restored in schools. "In ecological terms, the thing we're on the brink of losing can be thought of as a huge and priceless piece of cultural heritage to which everyone in Australia and the rest of the world has an inalienable right of access and to which - if they want it - everyone in Australia should be offered the means of access," he said.

Professor Buckridge said a major difference he noticed in current students from those leaving school 30 and even 10 years ago was how much English and world literature they had never heard of, let alone read. "Most of them have studied, in some fashion, a couple of Shakespeare plays, but unless they're from interstate or overseas or an older age group they know of nothing beyond a few mid to late 20th century novels." He was speaking at a symposium on English Beyond the Battle Lines: Rethinking English Today hosted by the English Teachers Association of Queensland (ETAQ).

Association President Garry Collins said most English teachers were actively engaged in teaching students to use language well, including correct functional grammar and engaging students in literature. Mr Collins said the association was keen to give classroom teachers a major say on English curriculum content as part of the current review of the Queensland syllabus and the prospect of a national syllabus.

Mr Welford said a literature stream for interested students would broaden choice, just as many schools offered several maths subjects. "We could have literature, mainstream English and English communication for students intending to pursue vocations pathways," Mr Welford said. Sunshine Coast University academic and The Courier-Mail columnist, Dr Karen Brooks, said a balance between popular culture texts and traditional literature from antiquity to the present was vital.


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