Monday, May 05, 2014

What crisis? Government's only crisis is Labor's debt

Paul Sheehan

Unusually, history offers a precise time and place, right down to the day, to appreciate why Australia has gone, seemingly suddenly, from a land of boom to a nation facing an austerity budget with sacrifices expected of all. The date was February 4, 2009.

On that day, for the first time in the 15 months since the Howard government had been defeated, a spontaneous upsurge of genuine unity, concern and outrage came from the opposition. It crossed all factions and cliques. It fused Liberals and Nationals.

The cause of their collective alarm was the size and scale, and haste and dubious design, of six appropriations bills that Kevin Rudd’s government was about to ram through Parliament. These bills would transform the budget.

The catalyst for this was the 2008 financial crisis that had thrown the United States and western Europe into recession and come close to fusing their banking systems. The crisis had not, however, affected Canada or most of Asia. It was countries running big government debt and deficits that were in crisis control.

Rudd said Australia needed decisive action to avoid a recession. When the opposition caught a glimpse of what he intended it saw immediately that Rudd’s grandiosity was dangerously at work. We are now discovering in great detail, via the Royal Commission into the Home Insulation Scheme, the extent of dysfunction of Rudd’s management vision.

Joe Hockey, who was about to become shadow treasurer, opened the attack on February 4. "We have not seen the six bills that are going to be introduced, debated and voted on in this place today," he said. "These six bills will take us into $100 billion of debt."

Malcolm Turnbull, then opposition leader, followed soon after. "In four years, net debt will be $70 billion … and the government has asked for the right, just a moment ago, to borrow up to $200 billion, or $9500 for every man, woman and child in Australia," he said.

"The plan reeks of nothing more than panic ... We do not reject the need for a stimulus at this time. Our judgment is that $42 billion is more than is appropriate right now. The government is looking increasingly like a frightened soldier who fires off all his ammunition in a panic in the first minutes of an engagement … Our judgment is that a more appropriate level of stimulus is in order, 1 to 2 per cent of GDP, or between $15 billion and $20 billion."

All night, Coalition members, 57 in the House and Senate, rose to speak. Former treasurer Peter Costello, silent on the back bench for a year, was moved to genuine outrage.

"When you inherit an economy which has a budget in surplus and no net debt, which has unemployment at 30-year lows, where the credit rating has been restored to a AAA rating on foreign currency bonds, where you have a Future Fund of $61 billion and a Higher Education Endowment Fund, when you inherit an economy in that condition you have to find a fault somewhere," he said. "If you cannot find a fault somewhere, what problem have you got to solve? So the Labor Party, naturally enough, looked for a problem. The trouble is, it was the wrong one."

When debate was finally guillotined it was 4.45am. For the opposition it was a new dawn. It did not need to wait for opinion polls or focus groups.

Typical was this from former minister Bruce Billson. "The Coalition is seeking to ensure that the nation does not sleepwalk into a poorly designed, irresponsible and unsustainable package dreamt up by a panicked government," he said. "The only certain outcome of this package is waking up to the nightmare of decades of excessive debt and deficit."

That is exactly what happened. Rudd was worse than Whitlam. In the six years Labor was in government, the growth in Australia’s real federal expenditure was close to highest in the Organisation of Economic Co-Operation and Development – even though Australia was a resource economy with a sturdy banking sector and no housing bubble, and thus not susceptible to the financial shock in the US and much of Europe.

It is difficult to move the macro-economic needle quickly in a $1.5 trillion economy that is the 12th largest in the world (larger than Spain, which has 47 million people). In 2009, Rudd managed to jolt the needle, ramping up federal spending as a percentage of GDP.

He was also more profligate than Julia Gillard and she was no prize, loading future budgets with the Gonski education program, the national disability insurance scheme and the multibillion asylum seeker debacle without seeming to have a Gonski about how it would all be paid for.

Now that the bills are coming due, neither Rudd nor Gillard are around. It is the morning after. The clean-up. The payment due date. And the demographic challenge has loomed into focus. So let’s not confuse who did the spending and who is having to pay.

It would also be remiss not to mention the supposed "crisis" in NSW. The people who instigated the current revelations about Liberal politicians, lobbyists and fund-raisers were a Liberal senator, Bill Heffernan, and a Liberal Party executive member, Holly Hughes. Not exactly a cover-up.

New South Wales has a new premier untouched by scandal. He has a thumping majority in Parliament and firm hand on the budget. The Independent Commission Against Corruption is doing its duty to the discomfit of both sides of politics, unhindered by political interference. Its work will lead to better governance of all political parties.

A clean-up is not a crisis. We’ve already had a false crisis and are about to pay for it.


Climate scientists in audit commission's crosshairs

The nation’s climate and weather predicting capacity and the jobs of dozens of scientists are at risk if the Abbott government accepts a recommendation of the National Commission of Audit to axe a key program, researchers said.

The Australian Climate Change Science Program’s four-year funding of $31.6 million, mostly to the CSIRO and the Bureau of Meteorology, duplicates work by those and other agencies and “should be returned to the budget or allocated to priority areas”, the commission said in its report.

But scientists, including Michael Raupach, formerly of the CSIRO and now at the Australian National University, said the program supported a “great deal of critical scientific work” that helps refine climate models which are also used for weather forecasting.

“The future course of climate change matters hugely for Australia, and continued observation and modelling of climate is absolutely vital,” said Dr Raupach, whose research over more than three decades for CSIRO also included funding from the program. “The ACCSP is an important component of our national effort, and the whole effort would be much reduced without this program.”

“The government is currently considering the commission of audit,” said a spokesman for Environment Minister Greg Hunt, declining to elaborate.

While the bulk of the commission’s recommendations – ranging from cutting the minimum wage to raising the cost of doctor visits – are not expected to feature in the federal budget on Tuesday week, the dismissal of the threat from global warming by senior Abbott government members has scientists nervous about their future.

One scientist said the $4 million or so provided to the CSIRO by the ACCSP per year was the reason the institution “was still in the game". Another said 30 to 35 climate scientists would lose their jobs directly if the program ceased and probably a similar number indirectly.

Despite the increasing heatwaves, rising sea levels and ocean acidification - which scientists link to rising greenhouse gas levels - the Abbott government has downplayed the risks from climate change, said Opposition climate change spokesman Mark Butler.

“This is a government that has shown a disdain for scientific research,” Mr Butler said. “From the Prime Minister down, it has regularly denigrated the work of scientists here in Australia and internationally around the area of climate change.”

Last week Treasury launched a Productivity Commission inquiry into disaster relief funding with its terms of reference omitting any mention of climate change, noting only that "the impacts and costs of extreme weather events can be expected to increase in the future with population growth and the expanding urbanisation of coast lines and mountain districts near our cities".

Axing the ACCSP may also put at risk Australia’s ability to receive information from other agencies. Australia's area of expertise includes the Southern Ocean and Antarctica, information the program shares with international bodies, receiving access to their work in turn on other regions also important to Australia’s climate.

“Climate change has not gone away,” said Dr Raupach. “The best scientific assessments indicate that Australia could be subject to warming over the 21st century that could range from less than two to more than five degrees.”

“The high end of this range would be catastrophic,” he said.

The potential for cuts to climate modelling comes as odds increase for an El Nino weather pattern in the Pacific. Recent signals include a significant weakening of the tradewinds and the warm pool of water now extending east of the international dateline.

El Nino years tend to be drier and hotter than average in Australia, with increased risk of droughts and bushfires.


Islam and Gun Violence in Sydney

The following video is a joint Baron-Vlad Tepes production. It uses maps of the Sydney metropolitan area to compare and contrast the level of gun violence with the percentage of Muslims in the population.

The initial map is of gun offences;  It moves about half way through to a map of Muslim  presence

Take note that the dark green area on one map means the number of shootings, and the dark green on the other map of the same area means the percentage of Muslims in the population. Draw your own conclusions:

If the issue were anything but Islam — if we were looking at the percentages of Trobriand Islanders, or bald-headed men, or Presbyterians — the obvious correlation would be widely published and universally acknowledged.

Furthermore, if those dark green splotches represented the number of white men the neighborhoods of Sydney, the story would generate above-the-fold headlines in every newspaper and the would be the top item on ABC for weeks.

As it is, we can expect these statistics to be quietly forgotten.

And don’t be surprised if the Australian government stops including religious affiliation in its published census data.


Australian study disproves omega-3 baby claims

Pregnant mothers who take omega-3 fatty acid supplements to boost their baby's brain power are probably wasting their time, according to a major Australian study.

Researchers found no benefit after following more than 600 children from before they were born until the age of four.

The study did not test other health benefits of omega-3 fatty acids.

There was no difference in the cognition, language or motor scores of children whose mothers took supplements and those who were given a placebo, according to the study published in the Journal of the American Medical Association (JAMA).

"Given the amount of marketing that occurs around the use of fish oil supplements for brain development, these are significant findings," says study leader Professor Maria Makrides of the South Australian Health and Medical Research Institute and the University of Adelaide.

The study did not test other health benefits of omega-3 fatty acids.

In the study, pregnant women received either DHA - an omega-3 fatty acid - supplements or a placebo.

The researchers found no difference in the two groups at 18 months.

In a follow-up at four years, the children were tested for differences in cognition, the ability to perform complex mental processing, language and executive functioning such as memory, reasoning and problem solving.

Again, there was no significant difference.

"Our research does not support prenatal DHA supplementation to enhance early-childhood development," Prof Makrides says.


1 comment:

Paul said...

As per ususal in Australian politics, its like the Rudd/Gillard debacle never happened. So much ignorance and stupidity in this country when it comes to politics and money.