Thursday, July 26, 2007

The reality of Australia's "noble savages"

Note first the Rousseauian description of Aboriginal life by pathetic Australian Leftist Robert Manne:

"not an Edenic but an enchanted world, in the technical sense of the sociologist Max Weber. They discovered an intricate social order in which, through the kinship structure, every human being had a precise and acknowledged place. They discovered a world that was filled with economic purpose; leavened by playfulness, joy and humour; soaked in magic, sorcery, mystery and ritual; pregnant at every moment with deep and unquestioned meaning."

That wet dream was a fantasy about Aboriginal life before the white man came. Compare it with the reality today described below. Note that the description below is of the situation in Aboriginal settlements where Aborigines are again free to run their own lives in their own way -- in the "playful" way described by Manne if they so choose

Cockroaches and dead flies are being syringed out of the ears of Aboriginal children in remote Western Australia and their hearing is so poor that some are being educated by loudspeakers. At Balgo, in the northeastern reaches of the Great Sandy Desert and 100 km from the Northern Territory border, 85 per cent of school-age children cannot hear properly, leading to learning difficulties and social disadvantage.

Backing up a Productivity Commission report showing that hearing problems among indigenous children are three times as high as those of white kids, local doctor Nicolette deZoete said the problem was often detected when an infant was four to six weeks old. Like trachoma - the eye disease that plagues many Aboriginal communities - chronic hearing disorders were preventable, she said. "Because these kids don't have a strong immune system when they're born, combined with the health environment in which they find themselves from day one, the problem keeps on recurring, even after we clean it up," she said. "The ears of kids around here are chronically full of pus. It may be fixed in two weeks, but then they go back to their houses, where 12 or 16 people may live, they sleep on the same blanket that the dog does, and - what a surprise - they're having the same problems all over again."

These problems manifest themselves in the child's development from toddler to adolescent, as they try to learn English as their second or third language. "Quite often they can't even hear what's being taught," Dr deZoete said. Teachers at Balgo's Catholic school use loudspeakers to get their messages across to the 110 school-age children in the community.

Child health nurse Robyn Smythe, who has been running infant health programs at the outpost for three years, said locals' immune systems were low because underweight babies were born to smoking, drinking mothers, a significant proportion of them under 16. Some mothers had arrived at the community clinic the day they gave birth so their understanding of pre- and post-natal care was almost non-existent, she said. "By the time the child is 18 months, it's often up to them to find their own food," Ms Smythe said. "Quite often it's survival of the fittest."

Dr deZoete said the problem was environmental health. "Wouldn't it be smarter, simpler and cheaper to sort out the environmental health issues so they didn't get sick in the first place?" she said.

The above article by Tony Barrass appeared in "The Australian" on July 21, 2007

Crackdown on rogue unions pays big dividends for all

A NEW era of industrial peace on the nation's building sites has delivered a $15 billion boost to the economy and produced a remarkable 9.4 per cent jump in productivity. In a stark pre-election message to Labor, a new study reveals the demise of militant unionism in the $90 billion construction sector has helped trim inflation as the cost of building office towers has been cut by 5.2 per cent. On the eve of Kevin Rudd's housing summit in Canberra, the report reveals the benefits have also flowed on to residential housing, with construction costs falling by 3 per cent.

Commissioned by the Australian Building and Construction Commission, the economic report - to be released today - highlights the challenge for Labor as it considers winding back the Coalition's workplace reforms.

Under pressure from the ACTU and powerful building unions, the Labor leadership has promised to abolish the ABCC, which was established in the wake of the Cole royal commission into the building industry as a tough "cop on the beat", from 2010.

Amid industry warnings that some firms are already factoring in "risk of Rudd" premiums to future contracts, ABCC head John Lloyd last night warned it would be "most regrettable" if militant practices returned to building sites. Mr Lloyd will today release the economic study, by respected forecaster Econtech, the first of its kind since the Cole inquiry revealed a culture of union intimidation with its landmark March 2003 report. The Econtech study estimates that productivity in the building and construction sector has jumped 9.4 per cent since the Cole inquiry. It compares labour costs this year against the average over the period from 1994 to 2003. Econtech estimates the ABCC's clampdown on militant behaviour - it has about 100 matters under investigation - has also contributed to a 1.5 per cent rise in GDP above what it would otherwise have been. It also suggests inflation is 1.2 per cent lower than if the ABCC had not been established.

Mr Lloyd, who has been targeted by building unions, said the study justified the tough stance taken by the ABCC since 2005. "This study shows that significant gains are flowing through to the wider Australian economy. The ABCC has had real impact," Mr Lloyd told The Australian.

Labor announced in late May that it would retain the ABCC through to 2010. This followed lobbying by the building sector, which was alarmed that Labor would demolish a tough regulatory cop that has driven reform and radically cut strikes across the nation's big construction sites.

In a clear sign of the nervousness in Labor ranks over the Government's targeting of its union links, the Opposition Leader last month moved to expel senior Western Australian Construction Forestry Mining and Energy Union official Joe McDonald from the ALP. This came after Mr McDonald was caught on camera delivering an expletive-laden tirade against an employer.

Industrial relations spokeswoman Julia Gillard said Labor has not seen the report commissioned by the ABCC, but the party supported "driving productivity in all industries, including building and construction". "Productivity will be the focus of Labor's new industrial relations system," Ms Gillard, also Deputy Opposition Leader, said. "As previously announced, Labor will always have a strong cop on the beat in the building and construction industry."

Mr Lloyd last night hailed the "marked improvement" in industrial behaviour on the nation's building sites, and said "industrial unrest" margins of up to 30 per cent had been slashed to negligible levels. In a sharp message to Labor, Mr Lloyd said it would be "most regrettable if the practices and conduct of the past re-emerged".

The Australian Constructors Association - whose membership includes the nation's biggest building firms including Leighton Holdings, Thiess, John Holland, Multiplex and Bovis Lend Lease - is considering funding a campaign in favour of the Governments's workplace relations laws. Its board will meet on August 23, with Mr Rudd and Ms Gillard scheduled to attend. Last night, Master Builders Australia - whose membership also includes some of the nation's biggest construction firms - said the ABCC study vindicated its own economic analysis on the benefits of the workplace reforms. "(The ABCC study) makes it very difficult for the ALP to argue that there are very few economic benefits," MBA chief executive Wilhelm Harnisch said. "It vindicates the position that we put to the ALP, that taking away the ABCC is turning back the clock."

The economic study reveals the previous large gap between the costs of commercial building and residential housing has been slashed as thuggish union behaviour is brought under control. While commercial building costs were on average 10.7 per cent higher compared with residential housing from 1994 to 2003, this cost gap has been whittled back to just 1.7 per cent this year. The benefits also flow to other industries which are taking advantage of the improved cost structures in construction. The Econtech study estimates a 5.4 per cent boost in mining production, for instance, while that industry's costs have been cut 1.7 per cent. Manufacturing (1.7 per cent) and transport (1.6 per cent) have experienced smaller production gains.


Australian Left reverses under pressure: Now in favour of cutting down trees

KEVIN Rudd yesterday scrapped forest policies which cost Labor two key Tasmanian seats at the last federal election - and he sweetened the deal with $20 million. The Labor leader pledged support for the Regional Forest Agreement and the Tasmanian Community Forest Agreement. This means no more areas of old-growth trees would be turned into reserves and locked away from felling - which brings Labor into line with the Federal Government policy. The key forestry union, the forestry industry and the State Government all welcomed the policy change. It was condemned by The Wilderness Society.

A few days before the 2004 election, Prime Minister John Howard was greeted as a hero in Tasmania by workers afraid the old-growth reserves preservation policy of then Labor leader Mark Latham would cost them their jobs. CFMEU forestry branch national secretary Michael O'Connor said then: "I would only say Mr Howard's policy is better than Mr Latham's." The industry anger was linked to Labor's election loss of Bass and Braddon in Tasmania and a seat in Victoria.

Yesterday Mr O'Connor said: "The ghost of Mark Latham is well and truly buried." And Mr O'Connor's Tasmanian counterpart Scott McLean, who cheered Mr Howard three years ago, shook Mr Rudd's hand after the policy announcement at the 100-year-old Britton Bros sawmill at Smithton on the North-West Coast. "What this policy does is finally put the ghost of Mark Latham to bed," Mr McLean said.

Mr Rudd said: "In the last election we didn't get the balance right, that's why I came back here to Tasmania very soon after becoming leader of the Parliamentary Labor Party. "In the period since then we've been consulting with the local industry, with others here in Tasmania, with (Braddon candidate) Sid Sidebottom. Our shadow minister Kerry O'Brien has also been part and parcel of the decision. "We support its implementation in full, and believe the implementation is necessary to provide long-term stability and security to Tasmania's forest industry."

The $20 million package for industry development includes $9 million to boost value-adding in Tasmania, plans for a ban on illegal imported timber and also a major study into the impact of climate change on the timber sector. Mr Rudd said the package was a fresh commitment to the industry in Tasmania to provide long-term certainty. "I'm here today to make it clear-cut where we stand in terms of the Tasmanian Community Forest Agreement," he said. "Mr Howard is locked in behind that, I'm locking in behind that, I can't be any clearer than that."

The TCFA protects 170,000ha of forest, including 45,000ha on private land through the Forest Conservation Fund. Mr Rudd said Labor's $9 million Forest Industries Development Fund would help reverse the trade deficit in forest products. Another $1 million will go to a new Forest Industry Skills Council to build capacity for the forestry workforce. The $1 million program to fight illegal timber will support certification schemes for products sold in Australia.


Greens' energy tax would destroy the Australian economy

Green fanatics are talking about cutting emissions by a suicidal 60 per cent. I say suicidal because such a policy would be devastating for living standards. To cut USA Co2 emissions by 33 per cent everything powered by petrol would have to be abandoned. If the emissions cut was raised to about 70 per cent they would have to virtually abandon electricity production. In plain English: these fanatics and their media allies are demanding that Australians should destroy their country's capital structure and adopt the `life-style' of a medieval peasant.

Some greenies have tried to use the economic concept of discounting to deceive people in thinking that emission cuts would be economically painless. Discounting recognizes the fact that we value present goods more highly than future goods. That is why we have interest. If it were not so, then $100 ten years hence would have the same value as $100 in the hand. In business planned expenditures are discounted by the rate of interest to provide an estimate of their present value. At an interest rate of 10 per cent $100 in a year's time is worth $91 today. Obviously, the higher the interest rate the lower the present value of a future good.

When a firm, for example, is appraising a potential investment it can calculate its internal rate of return. If the internal return is greater than the rate at which it can borrow, the investment is profitable. (This, of course, is a great simplification of the investment process). Therefore discounting is used by firms to measure and compare future flows of benefits and costs in dollar terms. This is basically what most economic models try to do when they attempt to compare the costs of cutting CO2 with the apparent benefits. But this approach also brings into play the economic concept of cost. Every economist knows that the real cost of anything is not its money price but displaced values: those things that must be sacrificed to obtain the desired good. Economists aptly call these sacrifices opportunity costs.

Thus the real cost of buying a car is all the other goods and services that would have otherwise have been bought. To a firm, its costs would be displaced alternative revenue flows. The effect, and intention, of reducing emissions is to burden the economy with higher production costs. Thus the costs to society of these green policies will be lower productivity, more premature deaths, fewer opportunities for more productive technologies, especially energy intensive ones, fewer resources for schools and hospitals, the loss of investments yielding more and more better paid jobs, etc. And no amount of discounting can make these costs disappear. In fact, the greater the reduction in Co2 emissions the more savage the cut in living standards

If we focus on the firm for a moment we see that when it considers a potential project it will discount the anticipated stream of earnings and costs and compare them with each other. Should the costs exceed anticipated earnings then obviously the project will be rejected. A crude way of applying the same principle to an economy would be to try and calculate the alleged future costs to the economy of CO2 emissions, discount these alleged costs at a certain rate of interest, divide the result by the population to get a per capita figure and then subtract the figure from per capita GDP.

If the per capita GDP figure is $30,000 and the per capita cost is $10,000 then the loss of income is significant. (The figures are arbitrary and chosen for reasons of exposition). Of course, it will be argued that it's still worth the cost and it's only a one-off sum anyway that doesn't have to be paid at once.

The problem is that it's not a one-off sum - none of these figures are one-offs. Journalists who claim otherwise are liars. What is being deliberately ignored is that a permanent increase in energy costs will force firms to restrict output by eventually changing their factor combinations in a way that will bring operating costs into line with a lower level of output. To argue otherwise is to assert that rising production costs do not affect output. If this were so, then an immediate doubling of wage rates would not affect output or the demand for labour.

It clearly follows that the reduction in output becomes a permanent feature of the economy. Now a non-green economist could argue that there need not be a permanent fall in living standards or any fall whatever, merely a reduction in the rate of increase in consumption. What this amounts to is that part of those savings that would have gone into increased production will be directed into reducing CO2 emissions. In other words, instead of having a 4 percent growth rate we only get 3 percent.

This argument overlooks the fact that this policy would only slowdown CO2 emissions, which would cause the greens to demand more stringent reductions. This is because the greens' goal is to use greenhouse taxes to reduce absolute production and not just its rate of growth. In other words, the greens real target is industrialisation. In any case, it's ridiculous to assert that deliberately slowing down capital accumulation is not a cost to society. Any government action that forcibly reduces investment and consumption is a cost to society. (The Nazi and Soviet economies are graphic examples of this economic truth).

Moreover, the idea of blanket energy taxes and aggregate discounting for the economy are highly questionable, falling into the trap of what I call the tyranny of aggregates. By concentrating on discounting for the economy economists have neglected the key role that the market rate of interest plays in not only equating the supply of capital with the demand for capital but of allocating capital through time. Production takes time, a fact that no one would dispute. The question is: How much time? This is where interest plays its vital hand. If the rate of interest falls naturally, i.e. people are saving more, from 5 percent to 3 percent then this will signal to entrepreneurs that more capital is available.

By definition, this means that the discount rate also falls. Many capital-intensive projects that were ignored because the previous rate of interest made them unprofitable because of their highly time-consuming nature now become profitable at the lower rate of interest. Therefore the effect of market fall in the rate of interest is to lengthen the production structure by adding more time-consuming but highly productive stages to it. (This is what is meant by allocating capital through time).

Imagine the economy expressed as a right-angled triangle with a number of rectangles going through it, with each rectangle representing a stage of production. As the triangle gets longer and wider more and more time-consuming complex stages are added to it, which eventually increases the flow of consumer goods and services. Now take two identical triangles and then have one expand at 5 percent a year and the other at 2 percent. The one expanding at 5 percent will double in size in about 14 years while the other will take about 35 years. We can see that after 14 years of growth the differences in size would be enormous. Let us now superimpose the slow growing triangle A on the fast growing one B. The area outside A but still within B is what B would have had to sacrifice if its growth rate had been cut to 2 percent.

As B is now a far richer economy than A because it has a longer production structure it can allocate more resources to fighting whatever environmental problems it comes to face. This means that instead of imposing an energy tax on production economy B can pay for the environment out of general revenue. In addition, its rapid growth also means that advances in technology would be embodied in its capital structure. On the other hand, the cost to A of fighting environmental problems will be far greater. Greens can argue that there is no time to lose; impending doom in the form of global warming calls for measures now. And that the economic benefits from cutting Co2 emissions will greatly exceed the costs. No and No. In fact, the evidence against the existence of man-made global warming is mounting.

Antarctica is getting colder and accumulating more ice, and sea levels are not rising. The IPPC has conceded that the warming up to 1940 was the result of solar activity during the early part of the century. So the ice caps are not melting and polar bears are not disappearing. The Medieval Warm period - which was much warmer than today - and the Little Ice Age happened independently of human activity, indicating that even severe weather fluctuations are a natural part of global weather patterns.

In other words - don't let the greens panic you. Considering the amount of anti-warming evidence that is accumulating, I think people are being wise in questioning the motives of those who are using hysterical language in an attempt to bulldoze us into adopting policies that would destroy our living standards while simultaneously increasing government control over our lives.


Arrogant Australian lawyers show their contempt for democracy

THE political war between much of the legal profession and the Howard Government is now open and unconcealed as barristers and the bench resort to leaking, lecturing and campaigning against the executive and the parliament. This is a deadly contest, fuelled over many years but growing more bitter over the anti-terrorist security laws. It is a war the legal profession is destined to lose because of its flawed intellectual position, its engulfing hubris and the ultimate reluctance of the Australian people to accept the legal polemic about the threat to our democracy.

The bedrock view of the lawyers' rebellion is their refusal to accept the legitimacy of executive action based on statute and invoking the national interest. Insisting they know better, the lawyers offer themselves as saviours of civil liberties (but not necessarily saviours of the best interests of their clients).

The case involving Mohamed Haneef has exposed the fracture in dramatic terms. His barrister, Stephen Keim, has become a part-time political operative, defiant in going to the media, seeking to sway public opinion and casting himself in an epic encounter "that could affect the lives of our grandchildren". Yes, that's what the barrister told the ABC's Lateline before taunting the Prime Minister and the federal police to "come and grab me" if they dare, revealing he was "very passionate" about the issue and dismissing any need to consult either his client or solicitors before providing the media with the 142-page transcript of Haneef's interview with the Australian Federal Police. Verily, any defendant would beg for the services of such an advocate.

This is a guise all too tedious: the lawyer as political hero. What good it will do his client Haneef (or how much it damages the defence case) is not clear. It is, however, a reminder of the David Hicks saga. As explained by journalist Leigh Sales in her recent book, while John Howard could have brought Hicks's suffering to an end, so could his own lawyers by striking a plea bargain three years earlier. They didn't. Their aim was to wage a political campaign to break Howard's will and force his complete backdown over Hicks. It failed.

This week Melbourne barrister Robert Richter QC identified the Howard Government as being guilty of terrorist-type tactics. "This is a terrorist threat to our legal system," he told the ABC of ministerial actions. "Not by the terrorists, but by (Philip) Ruddock and his cohorts." Assume this is a considered view. Lest anybody suspect Richter was in a minority, Australian Bar Association president Stephen Estcourt branded the cancellation of Haneef's visa "a cynical exercise" that "constitutes an assault on the rule of law". That's all.

This paper quoted Estcourt as saying that "disquiet is pretty universal" among lawyers. He was reported saying that thousands of lawyers were deeply concerned about the Howard Government's actions. There is no reason to doubt such extraordinary claims. The lawyers are mobilising against executive tyranny. Observe that only a fortnight ago former chief justice Gerard Brennan critiqued the Government's anti-terror laws at a Sydney conference. Brennan complained that the definition of a terrorist act related to the motive of advancing "a political, religious or ideological cause". This seems, at face value, an accurate portrait of the threat. But Brennan argued that motive added nothing to the criminality of the act and might "easily be misunderstood as targeting the entire group who wish to advance the religious cause of Islam".

Brennan slammed the detention powers as a "remarkable infringement on a person's common-law rights". Such an expansion of executive power was undertaken without sufficient safeguards, the defect being "to transfer the protection of individual liberty from the judicial to the executive branch of government".

Brennan's remarks are illuminating. They make the pivotal issue one of power between executive and judiciary. His clear implication is that public acceptance of the laws cannot validate this defect nor make it acceptable. Such laws were passed on the votes of the Coalition and Labor. It is noteworthy that Labor has supported the Howard Government's action over Haneef. Labor's shadow immigration minister Tony Burke has been supportive but silent.

The message is that the executive-judiciary struggle is entrenched beyond party politics. It will endure under a Labor government but without the special venom that marks the profession's attitude towards Howard and Attorney-General Ruddock. Indeed, it may be some time before the legal lions liken Kevin Rudd's government to terrorists. But it will happen.

A comic footnote in this 11-year contest was provided by Melbourne barrister Julian Burnside, who told the Future Summit in May that Australia should introduce a law making it an offence for politicians to lie. Burnside's idea won rapturous applause. He said it could be modelled on the misleading and deceptive conduct provision of the Trade Practices Act. Yes, he conceded it would mean more by-elections, but the public was sick of politicians lying. "If there were the possibility of going to jail" then the politicians might change their ways, he suggested.

This is the ultimate lawyer fantasy: being able to put politicians in jail for dishonesty in the conduct of their duties. Imagine the trials, fit only for barristers as heroes. One example Burnside gave was Howard's previous global warming policy. He said the big turnaround "in the past six months is just the best demonstration that they have been lying up to now". Howard, for better or worse, might have thought his climate change stance was about advancing Australia's interest. Poor fool. Burnside knows the truth: Howard was lying all the time. Don't worry about children overboard if you can jail him for global warming.

Such hyperbole has value. It reveals the depth of delusion and mad hubris beating at the heart of this legal culture. The lawyers are weak on political science. Influenced by the feeble and defective analysis of Australian governance, they actually believe the Howard Government has suppressed dissent, corrupted the political system and destroyed accountability, and they see themselves as the last line of defence.

The Government's main problem has been incompetence feeding declining public trust. This goes to the real issue involved in Immigration Minister Kevin Andrews's decision this week to revoke Haneef's visa. This is a ministerial power created by the parliament that vests obligations on the minister. The power is used frequently in the public interest to remove from the nation visa holders who have had associations with criminal conduct. It is usually invoked for resident non-citizens who have served jail time for an offence. It is a necessary executive power made more necessary by the terrorist threat. What is different this time is the situation in which Andrews used the power.

The legal establishment says that because a court process was under way, Andrews should not have acted and that he has prejudiced a fair trial. This is by no means clear since different criteria are involved. The test Andrews had to apply was only that of reasonable suspicion. The test for conviction at a trial is guilt beyond reasonable doubt. They are, of course, quite different tests.

The lawyers, it seems, will say almost anything to tear down executive action. Witness the claim that Andrews is really trying to get a conviction in court and the claim that Andrews is motivated merely by politics and not genuine concerns. (It is by no means obvious that Andrews's action helps the Government win votes.) Andrews's decision is reviewable at both administrative and judicial levels. He can revise his decision if the evidence changes, and the courts can also review his decision.

Nobody would argue the Government has not made a mess of the situation. The problem with Andrews's decision is that he cancelled a visa but cannot immediately deport Haneef. The deeper problem will come if Andrews and the AFP are found to have relied on false information. Haneef's has become a case study in the collapse of trust between lawyers and the executive. Australia's anti-terror laws are now hostage to both executive incompetence and the political campaign against them waged by much of the legal profession.


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