Global cooling hits Victoria

Where have Victoria's days of summer gone? Cool and cloudy days have forced beach lovers indoors, and bikini and ice cream sales have slumped. One ray of sunshine is a bright outlook for Christmas - long range forecaster John Moore says Christmas Eve will be fine and 26 [Celsius], and Christmas Day fine and 25. But he says showers will return on Boxing Day. Melbourne has seen an average of just seven hours' sunshine a day this month, well down on the December average of 8.3 hours.

The silver lining is that parts of Victoria had more than their December average of rain in just one day - last Friday - and Melbourne's December fall is already well above average.

While no one needs an expert to work it out, Dr Harvey Stern, at the Bureau of Meteorology, confirmed it was unusual to have so few hot days in December. "There's no sign of really hot weather in the next week," he said. "Mostly we are looking at temperatures in the 20s."

Summer swimwear retailers have been particularly hit by the cold weather, many brands reporting a drop in bikini and board short sales. Rip Curl marketing manager Nick Russell is really looking forward to a break in the weather. The surf brand's bikini sales are well down on previous years, especially in coastal holiday spots. "We would be significantly better off if it had have been 35C and beautiful for the past fortnight or so," he said. Mark Mariotti, who owns St Kilda ice cream store Seven Apples, said his business was losing thousands of dollars a week. "My business is all about summer and sales and it's not happening . . . we want some sun," he said.

Dr Stern said Melbourne's rainfall of 67mm this month was 10mm above average. Melbourne Water's supply manager John Woodland said an average of 65mm of rain fell over Melbourne's major catchments, boosting the city's water storages by 11 billion litres. The rain topped up catchments by 0.6 per cent, taking the nine reservoirs to 34.6 per cent of capacity, compared with 39.1 per cent at the same time last year. Smaller gains are expected for the rest of the week as more water flows from streams across the 160,000ha catchment area. Mr Woodland said despite the downpours the city's storages still faced an 80 billion litre shortfall.

Dr Harry Hemley, vice-president of the Australian Medical Association Victoria, said GPs had been flooded with patients complaining of common colds during the cold snap. "There has been an influx since we've had the cold spell of weather and people have been indoors coughing over each other," Dr Hemley said. "Prior to this little cold spell we had more hay fever coming in and that seems to have declined and now we've got more upper respiratory infections."

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Immigration tightened to save jobs

A GROWING jobs shortage and rising unemployment figures in Australia have forced the Rudd Government to start closing the gate on foreign workers. Jobs vacancies for skilled workers have plunged 50 per cent in Queensland as demand for professionals and tradespeople dries up and mining giants slash staff. Nearly 550 Queensland miners were axed on Tuesday and up to $30 billion in planned mining developments are in doubt because of the sudden downturn in world demand for the state's coal.

In response, the Federal Government has moved to tighten immigration laws to protect Australian jobs. This will involve the Government making it harder for skilled foreign workers to come to Australia, but fast-tracking those who meet critical shortfalls. Immigration Minister Chris Evans said the revised program would start in January and would better target the workers Australia needed. "In light of changing economic circumstances, the Rudd Government has reviewed the skilled migration program and consulted with business and industry along with state and territory governments Australia-wide about their skills need," Senator Evans said. "There were concerns that the permanent skilled migration program was not delivering the right skills to the right areas and there was an increasing use of the temporary skilled migration program by employees to meet their needs."

The 133,500 skilled migrants applying to work in Australia will now be required to have a job - sponsored by an employer or by a state government - before they arrive or meet a critical skills list, including medical, engineering and construction.

The move to save jobs for Australians comes as Treasurer Wayne Swan hit out at a bookmaker who offered $1.12 odds on Australia plunging into recession. "I think that sort of talk is utterly irresponsible," Mr Swan said. "What the Australian Government is doing in the face of the global financial crisis is everything we possibly can to strengthen our economy and to protect jobs in that environment."

On top of the mining job cuts in the Bowen Basin and northwest Queensland, it yesterday emerged about 80 staff at the Brisbane headquarters of collapsed childcare giant ABC Learning Centres had been sacked. The losses add to about 100 jobs tipped to go from ABC childcare centres next month.

The Employment Department's job index for skilled workers plunged by more than 50 per cent in Queensland in the past year, the second biggest decrease after NSW. Nationally, skilled vacancies have dropped by nearly 38 per cent as the financial crisis hit the broader economy. The biggest drop was for printing trades, which were down by 24.2 per cent, followed by metal trades at 15.8 per cent and wood trades at 14.1 per cent. The only occupation on the rise was medical and science technical officers, which rose by 0.8 per cent. The grim economic news follows moves by the US Federal Reserve to reduce interest rates virtually to zero to stimulate the economy out of recession. Professor of economic policy at Curtin University's Graduate School of Business Peter Kenyon said the resource sector would feel more pain in the short term.

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Rudd's wildly gyrating economic policies show complete amateurism and incomprehension

ANOTHER day, another stimulus package. Who cares if the package du jour's main course, the nation-building projects, are merely commitments made by the previous government, frozen by this Government, and now hastily defrosted for the occasion? As Bob Geldof said about world poverty, "Something must be done, anything ... whether it works or not."

Shades of Gough? Perhaps. But if the Whitlam government was opera, this is soap opera: grandeur gone, soaring rhetoric replaced by a thicket of half-baked cliches and bureaucratic prose, all the character development of a high school musical. The Whitlamesque ambition, however, remains intact.

Super-ego on wings to a planet in distress, Kevin Rudd is everywhere, saving the Doha Round one moment, averting catastrophic climate change the next, and all the while corralling a reluctant G20 to banish from the temple the merchants of "extreme capitalism". The activism has been even more pronounced on the home front, as the war on inflation mutates into a war on the financial crisis, only to be followed by a war on unemployment. Wars without end: but where is the strategy? If there is an economic strategy, it is cleverly hidden. Of course the Government wants to avert recession. But "spend, spend, spend" is hardly a sensible approach to economic management.

It is true that globally, Keynesianism is back, albeit in exceptionally crude form. Indeed, few assets have known booms and busts in their market valuation quite as spectacular as those affecting the intellectual legacy of John Maynard Keynes, and not without reason. For Keynesian policies are drugs that may do good (though even that is arguable, especially in an open economy) but are difficult to control, readily habit-forming and, when abused, extraordinarily destructive. Their use consequently requires the greatest discipline and sense of caution. But bringing those to bear is no easy task, because the fog of war, in which decisions are taken in ignorance of effects, is no less treacherous in economic policy than on the battlefield. It is therefore fair to question the Government's headlong rush into deficit while the economy is still growing, even if at a significantly slower rate, and before it can judge what has come of its first round of handouts. Deficits should not be demonised; but, ultimately, all spending must be paid for, so today's unfunded outlays are tomorrow's distorting taxes. Moreover, if the spending is wasteful, like the car plan or the so-called solar revolution, the generations on whom that burden is shifted will be doubly poorer, paying higher taxes from a base of reduced wealth.

Seen in that light, the pace and scale of the change in the Government's fiscal stance seem extraordinary, especially when one considers the strident "beat inflation first" rhetoric of only a few months ago. The Government's response is that circumstances have changed in ways no one could have predicted. But when Peter Costello, in the midst of the election campaign, warned of a tsunami that would hit the Australian economy, Wayne Swan and Kevin Rudd led the chorus in howls of derision. And when, several months later, Malcolm Turnbull stressed the dangers of financial crisis, he too was derided by a Government as smug as it was poorly advised. If the Government was caught unaware, it can hardly have been listening.

This is not to deny the speed and severity of the deterioration in economic circumstances, which clearly demands a policy response. But that is no excuse for abandoning the middle ground in a dash to action fraught with risks and riddled with inconsistencies. How can it make sense, for example, to reduce labour market flexibility just as the economy heads into recession? And having increased the effective cost of labour, is it wise to then subsidise investment, further distorting relative factor prices and accentuating the substitution of capital for labour, exactly as happened with the investment subsidies many European governments provided in the late 1970s and early '80s?

As for the emissions trading scheme, if the main emitters are not reducing their emissions -- as the Government's 5 per cent target assumes -- why go it alone? Far from serious reform, is this not merely costly symbolism, with the pain disguised by subsidies thrown at each possibly affected group, entrenching the fantasy that no matter what harm it does to the economy, government can ensure no one is worse off? "Every man a winner": speak of fiscal illusion.

Nor is the Government's penchant for nation-building any better thought out. Now in tatters with the Telstra fiasco, the scheme is based on the false premise that vast new projects are what this country needs. But whatever Australian politicians lack, ribbon-cutting opportunities are not among them. Rather, our infrastructure suffers from the fact that having willed the ends, we persistently misuse the means, including by sacrificing maintenance for ambitious, poorly judged but electorally popular new projects.

Consider Victoria, which proclaims its aspiration to be a paragon of good government. Between 1998-99 and 2007-08, there was a 22 per cent increase in the number of road structures in regional Victoria and a significant increase in road kilometres. However, maintenance outlays fell ever further below the levels required to keep the road network in safe, sustainable shape.

As for NSW, the latest comprehensive review found that despite a string of big new projects, ride quality on Sydney roads has been falling and accumulated road damage is worse than it was 10 years ago.

We have, in other words, transferred a growing maintenance deficit and attendant tax burden to the future. But far from addressing the systemic failures in state governments this reflects, the new Building Australia Fund seems set to throw yet more money at symbolic projects, impoverishing our children and grandchildren.

Are these just teething errors? Or is it that the Government's frenetic activity masks a lack of serious thought and of guiding principles -- ultimately, of wisdom -- that could help it deal coherently with a situation that every day becomes more difficult and threatening?

If that is the problem, as seems plausible, no number of all-nighters can fix it. Rather, they only make bungles more likely, as sheer exasperation and angry obstinacy cloud judgment and undermine the careful consideration of options and consequences. Government by exhaustion is, in historian Keith Hancock's famous phrase, a recipe for policies that yield diminishing and then negative returns, as decisions taken in a state of prostration become a positive danger to the purposes that called them into existence.

Staring at the wreckage of the Bruce and Scullin governments as they ineptly struggled with progressively harsher economic times, politician and diplomat F.W. Eggleston wrote that he wished for a PM who occasionally "has the courage to do nothing". As we move into 2009, it is not inaction that is called for, but action that is properly considered, based on guiding principles, by a Government willing, for once, not to tick the box of each interest group but to count the costs, refuse the favours and set limits on the policies that have been launched. No matter how worthy the ambition, the alternative is ultimate disappointment, with unending grief along the way.

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Destructive Victorian government meddling in education

Angry state school principals have attacked a plan by the Brumby Government to curtail their power to suspend and expel unruly students. They say that a move to suspend students a maximum of three days in a row would seriously undermine state education and drive more middle-class families into private schools. "In the case of a serious assault or the selling of drugs to other students, three days is simply inadequate and sends a terrible message to other members of the school community," said a submission by a principals' group.

The Victorian Association of State Secondary Principals was responding to draft student behaviour guidelines released by the Education Department. As revealed by the Herald Sun last week, the proposals include plans to suspend students for a maximum three days instead of 10 now. The total days a student could be suspended in a year would be cut from 20 to 15. And principals would have less power to expel students, with education bureaucrats given the right to overturn decisions.

The VASSP's submission said that the draft guidelines were part of an unrelenting campaign to wind back the autonomy of Victorian principals. "The proposed guidelines completely undermine the role of the principal and school council president," it said. That a bureaucrat, often with no school-leadership experience, is considered better placed to make this judgment is an insult to dedicated school leaders, the submission said.

The submission included comments by several principals and assistant principals, such as: "This is unarguably the greatest threat to the good order of our schools that we have seen. "It is designed by 'do gooders' with no actual concept of what occurs within a school."

Education Minister Bronwyn Pike has said the Government wants a bigger focus on schools preventing bad behaviour before suspensions were required. Ms Pike is expected to release the revised guidelines early next year after considering submissions.

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