ZEG

In his latest offering, conservative Australian cartoonist ZEG has some New Year wishes up





Housing prices soar

That is seen as good news. And for existing housing owners it obviously is. And it is also evidence of recovery from the financial crisis. That is all very blinkered thinking, however, and ignores the plight of prospective first-time home buyers -- mostly young. Construction costs have risen little so what it shows is a shortage of land for building. And that is almost entirely due to government-imposed land-use restrictions -- many of which are Greenie-inspired. FALLING prices would be a sign of humane government policies

MELBOURNE house prices soared by 17 per cent in the first 11 months of 2009, outstripping growth in all other capital cities, new figures show. The latest RP Data index, compiled from Valuer-General's figures, indicates the Melbourne median house price hit a new record of about $580,000 in November.

The news came as the Australian sharemarket closed at its highest level for the year. The S&P/ASX 200 index finished yesterday at 4870.6, up 31 per cent for the year and 55 per cent from its trough.

Melbourne's 17 per cent house price jump eclipsed Darwin's 15 per cent, Hobart's 14 per cent and Sydney's 12 per cent. And the rise more than offset the 5 per cent slide in Melbourne prices that followed the global financial crisis. Melbourne's median apartment price increased even more strongly, up 19 per cent to $440,000.

RP Data cautioned that the November figures were preliminary and based on incomplete sales data. However, the inclusion of further sales figures would be unlikely to alter the strong upward trend.

CommSec economist Craig James said immigration was a key driver of prices, with Victoria receiving more than its proportional share. "With population growing at the fastest rate in 40 years boosting demand for homes, state and federal governments need to be focused on ways to get more homes built," Mr James said. "Barriers to housing investment need to be removed, and scrutiny needs to be applied to lifting land production and revising zoning laws."

House prices continued to rise in October and November despite successive interest rate rises in those months and the winding back of first home buyer grants. "First home buyers have been trending down since peaking in May," said RP Data research director Tim Lawless. "But the gap is being filled by upgraders and investors who are much less sensitive." Credit figures released yesterday showed borrowing for housing up a further 0.7 per cent in November and up 8 per cent over the year.

Mr James said the resilience of the housing market increased the chance of a further interest rate rise when the Reserve Bank board next meets in February. "The main worry is that home prices are rising at unsustainable rates in some capital cities such as Darwin, Hobart and Melbourne," he said. "The last thing anyone wants to see in 2010 is another boom-bust scenario."

Mr Lawless said he expected more modest house price growth in 2010 after an "exceptional and surprising" 2009. "We would expect conditions to moderate into 2010 as interest rates continue to move back to a neutral setting and the remainder of the stimulus is rolled back," he said. "But the primary driver of growth will continue to be an under-supply of housing coupled with extraordinary demand fuelled by population growth."

Yesterday's sharemarket peak of 4870.6 is still a long way from the pre-financial crisis high of 6851. And there is little joy for investors in The Age's half-yearly economic survey to be published tomorrow, with economists predicting a rise of just 5.4 per cent in share prices this year. With LUCY BATTERSBY

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$30 million cheap at the price

Most "asylum seekers" are not remotely desperate and are certainly not penniless. They are just economic migrants making a good investment. Leftists however always highlight the cases who tell a good story

ASYLUM-seekers trying to get to Australia paid up to $30 million to people smugglers to make the perilous journey in 2009. In a growing problem for the Federal Government, almost 2700 asylum-seekers were intercepted on 59 unauthorised boats last year. Three boats arrived in just 48 hours this week. The year before, just 161 asylum-seekers arrived on seven boats.

The going rate to get to Australia from Afghanistan is up to $US10,000, or about $A11,000, sources said. Tamils fleeing war-torn Sri Lanka pay less because of the shorter distance.

Refugee advocate Pamela Curr said not all asylum-seekers paid their full travel costs up front; many took out loans. Those rejected as refugees often faced death threats from smugglers when they returned home, she said. Many families faced terrible choices about which family members to send on the journey.

"There was a man on Christmas Island with his daughter," she said. "He and his wife had five children but she was the one who had to go, the eldest girl, because she had been marked by the Taliban for a forced marriage."

Prime Minister Kevin Rudd branded people smugglers the "scum of the earth" last year after a deadly explosion on an unauthorised boat. As more boats arrived, he defended his border protection policies as "tough but humane".

Flagging a renewed assault on the issue this year, Opposition Leader Tony Abbott said the Government lacked the "steel" to send the boats back. "An Australian government that doesn't have the option of turning boats back in the right circumstances is a government that is not doing enough," he said.

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New anti-job laws now in force

Making life difficult for employers means that they will be slower to hire

AT the stroke of midnight, as the champagne corks popped heralding the New Year, doing business in Australia just got harder. Thanks to the federal government's fair work industrial relations laws, being an employer is more expensive and more regulated. Not many champagne corks are popping today in employer and small business land.

The government is planning a big pubic relations campaign next week to sell the IR laws. You can bet it will feature the word fairness. Even the legislation, the tribunal and workplace inspectors are called Fair Work something or other.

While parliament can and should set a safety net of standards, real fairness in the workplace depends on the behaviour of managers, employees and unions. Just like Work Choices, the government of the day claims it has the workplace formula right, but employers have learned to be wary. The pendulum looks like having swung too far back.

It is best that employers focus on what changes are happening today, not the political claims and counterclaims. Today, the second and final stage of the Rudd government's new IR laws come into operation. The first stage began six months ago. This second stage imposes new mandatory wage and employment standards on almost every employer in the country.

The government says it is restoring the safety net after Work Choices. In truth, the government is today imposing two safety nets. New employment regulation written directly by the parliament (called the national employment standards, or NES) and additionally, new employment regulation written by its new industrial tribunal, Fair Work Australia (called industrial awards). Two safety nets is a recipe for over-regulation; that is what parts of the fair work system deliver. Rather than just restoring the pre-Work Choices safety net of employment standards, the government has added to it.

Combined with last July's IR laws, today's changes complete a re-regulation of the labour market that will be a slow burn on the economy unless greater flexibility is introduced, and unions and tribunals limit claims and decisions to what is economically responsible.

To be fair to the government, none of this is unsurprising. For those in the know, the government has for a long time used its determination to get rid of the Work Choices laws to also change laws that existed until Work Choices.

It must be said not everything in the new laws is a backward step. A national set of laws is a good idea. But the government must account for some broken promises (such as that new awards would not increase labour costs) along with some extra regulation never promised (such as tribunal powers to arbitrate higher wage agreements than the new standards require).

The biggest problem is that the new standards are mostly one-size-fits-all. There is almost no flexibility for businesses of different types or different health to make changes. A lack of flexibility leads to unfairness.

Impacts of the new employment standards will differ between industries and between states. For some employers the changes will seem to be slight; for others, severe. In totality the new laws make the business of being an employer more tricky and often more costly. That amounts to a slow burn on the economy.

Some of these costs will build up over time. Some of the new wages and penalty rates in some industries will be phased in over years to soften the impact. Some of the new powers that unions and tribunals have will only be felt by an employer when a union official takes aim at that business.

Worryingly, today's standards are not the end of the story; they can be topped up by union activism and tribunal intervention. Early signs are that unions are already making more aggressive claims. Pre-Christmas strikes returned to the IR landscape, and the new tribunal is being asked to be more interventionist, with comparative wage justice claims dressed up as pay equity, equal remuneration and claims against lower-paid industries.

Even old unfair-dismissal laws, which ate away at employer confidence over many years, are back, in a slightly changed form. Those changes need to be given a go, but early experience has been mixed.

The government's PR will sound impressive. We will hear that the national employment standards include only 10 requirements. We will hear that the new awards only add another 10 conditions. We will hear that a massive deregulation has taken place with thousands of awards reduced to just over a hundred. We will hear that businesses operating across state boundaries will be more efficient because there will not be differences in employment conditions between locations. In each of these claims, there is an element of truth, but even bigger caveats.

For example, there are fewer awards, and that is commendable. But the content of those fewer awards for some large employing industries in some states, means that higher wages, reclassifications and higher penalty rates even though employees are working no different hours or duties. Not much is fair about that.

From next week individual employers should use the services of their employer organisation to find which of these new laws affect their business, and how. These changes are now law. They are non-negotiable. Ignore the laws, and you are a lawbreaker. Even the fines have gone up.

We all want 2010 to be the year that real economic growth returns to Australia. It still can, but these new IR laws make that task harder. Employers need to comply, not lose faith in employing people, and urge the government to make changes when experience shows the new IR system to be too inflexible or costly.

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Eucalypts promote bushfires

THE surge in severe bushfires over the past decade has prompted much agonised soul-searching. Last year's Victoria fires led to demands to reassess a number of established practices: the leave or stay-and-defend policy; the question of controlled burning and fuel-load reduction; and the green environmental policies that have encouraged and even mandated the planting of eucalypts in rural and semi-rural areas.

But if we really want to reduce the fire threat, perhaps we need to ask some even more basic questions. Is the eucalypt the right tree for rural dwellings, the urban fringe and semi-settled areas? Should we be planting more of them when climatic modelling predicts decreasing rainfall and more days of extreme weather conditions like those that whipped up infernos such as the Canberra firestorm of 2003 and the Kinglake-Marysville disaster? Should we consider planting less inflammable and more fire-resistant species instead?

Eucalypts are fire-adapted, lethally so, as they are full of volatile oils that vaporise in not-so-extreme heat and explode like a bomb. On top of that they drop masses of dry bark, leaves and twigs that burn just as furiously - hot enough to melt brass taps at several metres.

One lesson of history (1851, 1939, 1983 ) we seem to be taking a long time to learn is that a mature eucalypt forest is a gigantic bonfire waiting for a dry spell, a north wind and a spark. The downside of eucalypts' capacity to survive fire (or as with mountain ash their dependence on it to germinate seed) is that they also promote fires.

A few years after the Canberra firestorm we took a walk in the Blue Range, an area just west of the city and in the heart of the pine forest that supplied the fuel for the blaze of January 18, 2003. The terrain had been cleared, but the site of the former Sherwood homestead was easy to find because the trees that surrounded it were alive and green. The settlers had planted oaks and elms, and although their windward side had been scorched by the flames, they were still healthy and vigorous. The area within their perimeter was untouched: a little oasis that had been protected from the blaze by a barrier of green leaves.

It was a similar picture at Callignee, South Gippsland, where homesteads protected by oaks or elms survived February's fires. In contrast, many dwellings surrounded by bare lawns had been damaged or burnt by flying embers, while those near gums or pines had nearly all been destroyed.

Eucalypts have been implicated in the increasing incidence and severity of wildfires in Spain, where they have been extensively planted in reafforestation projects and to provide pulp for paper production. Spanish authorities point out that the native holm oak (Quercus ilex) is fire-resistant.

There are many northern hemisphere and some Australian trees that would have an equally fire-retardant effect, such as liquidambars, plane trees and poplars. Among hundreds of species of oaks, particularly those from the Mediterranean and arid regions of North America, there are several that tolerate hot, dry conditions and would thrive in many parts of southern and inland Australia. The three plantations of cork oaks on the western edge of Canberra not only survived the firestorm, but checked its advance; the stand on the northwest corner of Curtin slowed the fire and protected the homes behind, not one of which was damaged. Further up the hill, where eucalypts took over, several houses were burnt.

The ACT Department of Municipal Services notes that, unlike gum trees, "Cork oak is essentially fire resistant and the foliage results in a relatively non-flammable, low-level ground fuel".

As well as oaks, there are many trees originating in dry areas of the Middle East and southern Asia that would do the job - quinces, pistachios, pears and apricots, for example, and the ubiquitous peppercorn tree, once an inevitable feature of every rural homestead. Suitable native species include the kurrajong and several varieties of wattle and casuarina.

Non-eucalypts offer other advantages. A plantation of wet-leaf trees is more effective as a firebreak than a strip of cleared or burnt ground, since their foliage blocks flying embers. During the Canberra fire large manchurian pears in Morehead Street, Curtin, stopped flaming embers from reaching several houses.

Unlike eucalypts, whose roots release acids that limit the growth of rival plants, and whose dead leaves lie around until consumed in the next fire, leaf litter from deciduous trees rots down into compost and enriches the soil.

They also moderate air temperature and increase humidity through transpiration, keeping the ground cooler and less fire-prone, and they do not desiccate soils to the same degree as thirsty gums. As the early settlers complained, gum trees are so heat-adapted they turn the edges of their leaves to the sun and give very little shade.

Non-eucalypts may also offer advantages in terms of increased net carbon absorption. When calculating the effectiveness of a eucalypt plantation as a carbon sink, it is necessary to compare the quantity of carbon it absorbs during its years of growth with the quantity it releases when it burns - as, inevitably, it eventually will.

We don't want to give the impression that we are advocating anything like the program of the 19th-century acclimatisation societies, which sought the wholesale replacement of native ecosystems with English trees, shrubs and fauna - though it should be that recognised Aboriginal "fire-stick farming" radically transformed the botanical profile of the continent, assisting fire-loving species to become dominant. It would be absurd to clear stretches of mountain forest and replant it with oaks.

All we are suggesting is that tree-planting programs, particularly on the urban fringe and in areas where there is substantial settlement in gum forests and woodlands, consideration be given to varying the species mix by the addition of non-eucalypt varieties known for their fire-resistant properties.

Local governments should particularly encourage the planting of such species on the edge of towns and around dwellings. A belt of oaks or pistachios instead of eucalypts could mean the difference between life and death in the climatic conditions that lie ahead.

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