Monday, January 31, 2011

Floods' economic pain is greatly exaggerated

Ross Gittins

Most of us are back at work, but the silly season won't be over until we get the Queensland floods into perspective. They are a great human tragedy, but they're not such a big deal for the economy.

It's not surprising the public has been so excited about such amazing scenes and so much loss of life and property. Nor is it surprising the media devoted so much coverage to the floods when, with most of us at the beach, there's been so little other news.

It's not even surprising the Gillard government has been beating up the story, making it out to be the biggest thing since the global financial crisis. At one level this is just the pollies doing their instinctive I-feel-your-pain routine. They could seem heartless if they tried telling people things weren't as bad as they seemed.

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At another level it's easy to see Julia Gillard trying to gain the same boost to her popularity as Anna Bligh. She'd be well aware of all the seats Labor lost in Queensland at the election in August. It's an almost inevitable assumption by the punters and the media that if an event is huge in human and media terms it must be just as big in its effect on the economy. When the punters tire of seeing footage of people on roofs, you "take the story forward" by finding some expert who'll agree it also spells disaster for the economy.

The wise and much-loved econocrat Austin Holmes used to say that one of the most important skills an economist needed was "a sense of the relative magnitudes" - the ability to see whether something was big enough to be worth worrying about.

That sense has been absent from the comments of those business and academic economists on duty over the silly season, happily supplying the media's demand for comments confirming the immensity of the floods' economic and budgetary implications.

With the revelation last week of the econocrats' estimates of the likely magnitudes, it's clear the figures supplied by business economists were way too high. And the economists' furious debate over how the budgetary cost of the rebuilding effort should be financed is now revealed as utterly out of proportion to the modest sums involved.

Of course, you still wouldn't have twigged to this had you focused on the government's rhetoric rather than its figures. In Gillard's speech on the budgetary costs and Wayne Swan's speech on the economic impact both were busily exaggerating the size of the crisis, even while revealing how small it really was.

Gillard said it was "the most expensive disaster in Australia's history" and that the "cost to the economy is enormous". The government's task, she kept repeating, was to "rebuild Queensland".

Swan repeated that "this is likely to end up being the most costly disaster in Australian history", which was "going to cost Australia dearly" and involves a "massive reconstruction effort". The closest he got to the truth was his observation that "the economic questions pale into insignificance next to the human cost of what we've seen".

If this is the most expensive natural disaster in Australian history, all it proves is the cost of earlier disasters was negligible. If you can "rebuild Queensland" for just $5.6 billion, it must be a pretty tin-pot place.

If $5.6 billion seems a lot, consider some "relative magnitudes": the economy's annual production of goods and services (gross domestic product) totals $1400 billion, and the budget's annual revenue collections total $314 billion.

Note that, though no one's thought it worthy of mention, the $5.6 billion in spending will be spread over at least three financial years, making it that much easier to fund.

We know that more than a third of the $5.6 billion will be paid out in the present financial year with, presumably, most of the rest paid in 2011-12. So just how the flood reconstruction spending could threaten the budget's promised return to surplus in 2012-13 is something no one has explained.

And if $5.6 billion isn't all that significant in the scheme of things, how much less significant is the $1.8 billion to be raised from the tax levy? The fuss economists have been making about it tells us more about their hang-ups over taxation than their powers of economic analysis.

And how they can keep a straight face while claiming it could have a significant effect on consumer spending (well over $700 billion a year) is beyond me.

Turning from the budget to the economy, Treasury's estimate is that the floods will reduce gross domestic product by about 0.5 percentage points, with the effect concentrated in the March quarter.

Thereafter, however, the rebuilding effort - private as well as public - will add to GDP and probably largely offset the initial dip. So the floods will do more to change the profile of growth over the next year or two than to reduce the level it reaches.

Most of the temporary loss of production will be incurred by the Bowen Basin coal miners. But, though it won't show up directly in GDP, their revenue losses will be offset to some extent by the higher prices they'll be getting as a consequence of the global market's reaction to the disruption to supply.

And despite all the fuss the media have been making over higher fruit and vegetable prices, Treasury's best guess is that this will cause a spike of just 0.25 percentage points in the consumer price index for the March quarter, with prices falling back in subsequent quarters.

So the floods do precious little to change the previous reality that, with unemployment down to 5 per cent and a mining investment boom on the way, the economy is close to its capacity constraint and will soon need to be restrained by higher interest rates.


Floods levy may help rich and hurt poor

Gillard wants to help the most needy but her new tax is hardly foolproof.

ONE criticism made about the flood levy is that "taxation" is the wrong sort of instrument to provide disaster relief, that there is something unseemly about forcing people to give charity, especially when the recipients are our compatriots. "Mates," Tony Abbott tells us, "help each other; they don't tax each other."

In a world where we could rely on people freely dipping into their pockets to solve the world's problems, there might be something to this criticism. But people don't dip into their pockets nearly often - or deep - enough.

According to the Giving Australia report, published in October 2005, voluntary giving in Australia amounts to only 0.68 per cent of GDP (less than half of what Americans give). Of this, only about an eighth goes to people overseas.

This might explain why we resort to taxes to provide much of our foreign aid. But even the foreign aid we give through taxes - about 0.35 per cent of gross national income - is far from enough. When Haiti was rocked by an earthquake last year - a disaster far more costly in monetary and humanitarian terms - Australia provided only $15 million in aid (less than 1 per cent of the $1.8 billion that the government plans to raise through the flood levy).

This is not to criticise or belittle the provision of much-needed support to flood-affected areas. It is only right that we, as fellow citizens, should support those devastated by the recent floods. But do we do enough to help those in need when they are not our "mates"? Are fellow citizens really 100 times more deserving of our support than victims of overseas disasters? We go out of our way to help disaster victims in our own country but we incarcerate people fleeing disasters overseas.

There is nothing fundamentally unjust or unfair about the idea of using taxation to raise aid. The federal government has imposed similar levies before, often for less urgent needs. Nonetheless, the government must ensure that the levy does not exacerbate existing disadvantage.

The purpose of redistributing wealth through taxation should be to alleviate the hardship of those who are worse off, to improve the life chances of the disadvantaged so that it is not only the wealthy who have the opportunity to lead a flourishing life. Taxes that take from the worse off and give to the better off aggravate social disadvantage by increasing the inequality in life chances between the rich and the poor.

The government has rightly made the flood levy a progressive tax, charging people according to their ability to pay.

Much has also been made about those affected by the floods not being asked to pay the levy. This means that anyone who has received either a Disaster Recovery Payment or a Disaster Income Recovery Subsidy will be exempt. But these payments are not means tested. People who earn hundreds of thousands of dollars a year are eligible for these payments. Anyone who was "stranded within their home or unable to gain access to their residence for at least 24 hours, or whose principal place of residence was without electricity, water, gas, sewerage or another essential service for at least 48 hours" is eligible for the payment, while anyone who can demonstrate a direct loss of income from the floods is eligible for the income subsidy.

Even if they don't need these payments, affluent households may still claim them simply to avoid the flood levy, and so many of those living in multimillion-dollar homes along the Brisbane River may well be exempt from paying.

But surely they have a much greater ability to contribute to the costs of rebuilding Queensland than families living on just $55,000 a year in non-flood-affected areas. Since some of the levy will be used to cover the costs of the Disaster Recovery Payment and Income Recovery Subsidy, the levy may well also end up diverting income from the poor to the rich.

There are, of course, a great many people who are very badly off as a result of the floods and in genuine need of assistance, particularly low-income households who thought they were insured against flood damage only to discover that they were not.

The federal government has yet to provide details as to whether part of the levy will be used to help those whose homes are uninsured against flood damage. If it does decide to do so, let us hope that it will distribute this money fairly between flood victims, that claims will be means tested, and that people will not be entitled to more compensation simply because their homes are more valuable.

In the Christchurch earthquake, homes that sustained little damage other than to antique furniture and artwork are nevertheless entitled to compensation (up to $20,000). The mechanics of New Zealand's earthquake fund are very different to the flood levy (it is paid for by pooled insurance premium contributions), but let us hope that no such claims for compensation will be entertained by either the state or federal governments: that aid will be directed to those most in need and that the levy will not penalise the poor to cover the losses of the rich.


The NSW political disaster

The retirement of Bob Carr has exposed how little talent there is in NSW Labor

THE first electoral test of the year will be on March 26 when NSW voters go to the polls. Kristina Keneally must know it is therefore only a matter of months before she is out of the state's top job, which is why some inside the Labor Party are canvassing the possibility of her switching to federal politics, moving into the seat of Kingsford Smith if Peter Garrett chooses to call it quits.

But the fact that Labor has been in office in NSW for 16 long years is not the only reason that it is lurching towards a sizeable defeat. Policy decision making (or sometimes a lack thereof) is at the heart of voter disillusionment with the NSW Labor government.

Just before Christmas that feeling was once again fuelled when Treasurer Eric Roozendaal authorised the sale of the state's electricity services. It was a fire sale, reaping just over $5 billion (but really only $3bn because one of the conditions of the sale was that the government purchase a $2bn coal mine).

Carr tried to sell electricity assets in 1997 for approximately $30bn but was overruled by Labor's state conference and Morris Iemma tried again in 2007 for half that amount but was also overruled (being toppled as leader as a consequence).

The cheap price tag of today is doubly galling for voters, especially considering the opposition is opposed to the sale and would have retained the assets at least until they were able to get a better price once elected.

Keneally is for all intents and purposes presiding over a caretaker administration. She had no business allowing such a controversial sale right before an election, certainly not considering that to make it happen the government had to replace nine directors from the boards of the public electricity companies because they refused to approve the plan, believing it was a dud sale.

Throw in the fact that the man most likely to take over the reins for Labor after the election is John Roberston, the former union official who scuttled Iemma's bid to sell electricity assets at a more reasonable price three years ago - and the political damage this issue has caused Labor may not end on polling day.

But electricity privatisation isn't the only controversial policy area in NSW. The release of land for development has been slow. The alternative policy of creating inner-city density has upset local communities who feel crowded out by too many home units in their suburbs. And the state's infrastructure has been allowed to run down, even with a late injection of funds courtesy of the federal government's Infrastructure Australia fund.

What we will find out when Barry O'Farrell becomes premier after the March election is whether the problems of Sydney are simply big-city issues that are unavoidable when urban sprawl reaches the level it has in Australia's largest city, or whether the problems can be addressed by good management and a rationalisation of government services.

If the former is the case the Labor Party just might recover quickly to become politically competitive in Labor's favourite state. If, however, the latter is the case and O'Farrell repairs Labor's mess, it could be a long wait in the political wilderness for the NSW Labor machine and that would also have federal implications.

Julia Gillard will be hoping that with NSW Labor out of power she will be able to rebuild Labor's brand in the commonwealth's largest state. But she might want to think again about that prospect, because with voter angst so strongly opposed to the NSW Labor brand, the federal party will need to be careful, given the number of names in its ranks who built careers in NSW Labor.


Aid goes in too many directions, says report

AUSTRALIA'S overseas aid is often fragmented, poorly directed and difficult to evaluate, according to an annual report on the effectiveness of the government's overseas development program.

The report, by AusAID's internal watchdog, the Office of Development Effectiveness, praised the aid program's "impressive reach … and effectiveness", but said there were significant structural problems.

"AusAID does not have an overarching strategy on implementing the aid effectiveness agenda and has not clarified how to report against aid effectiveness principles," the report says.

"It needs a strategy for reporting that sets out benchmarks and targets for country and regional programs in terms of aid effectiveness principles."

The report, covering 2009 but made public only recently, comes soon after the Foreign Affairs Minister, Kevin Rudd, ordered the first independent review of the aid program in 15 years.

A panel will assess whether Australia's $4.3 billion in annual aid is being spent efficiently and make recommendations to improve its structure and delivery.

Since his appointment as foreign minister after the election in August, Mr Rudd has emphasised that Australia's aid program must be defined by its effectiveness as much as the total spent.

In October the government announced the number of Australian aid advisers in East Timor would be cut by a third, saving an estimated $3 million, which will be redirected to new and existing projects. The cuts followed a similar overhaul of the aid program in Papua New Guinea.

The report says there is a tendency to funnel aid money through the recipient governments, ignoring grassroots organisations.

"Much of the aid program's knowledge of governance and the public sector is at the national level and there is little understanding of the complex system that determines whether services are actually delivered," it says.

It also says there is an increasing tendency for more, smaller projects, noting the number of bilateral aid projects tripled between 1996 and 2006, more than double the increase in aid.

"An increase in the number of small activities increases the burden on partner countries, which have to manage, co-ordinate and monitor aid contributions," it says.

"Australia and its partner countries have made commitments to address proliferation, however, the data suggest that to date there has been a lack of follow-through."


Sunday, January 30, 2011

Tony Abbott says Julia Gillard's flood levy is to cover her overspending

OPPOSITION leader Tony Abbott is urging rural independent MPs to ditch their support for Prime Minister Julia Gillard, accusing her of using the floods to mask her government's spending addiction.

In a speech to the Young Liberals convention on the Gold Coast today, Mr Abbott ramped up his criticism of the federal government's flood levy to rebuild Queensland's infrastructure.

Also today, NSW Premier Kristina Keneally continued to push for changes to the national flood levy due to the high cost of living in Sydney, despite Ms Gillard ruling out any special treatment, and Treasurer Wayne Swan said he felt sickened Mr Abbott was putting his own political ambitions ahead of rebuilding the shattered lives of Queensland flood victims.

Ms Gillard, on Thursday, announced the government would impose a one-off, modest flood levy on taxpayers earning more than $50,000.

"A prime minister who's unconvincing when responding to a natural disaster is unlikely to solve the much more politically and administratively complex problems that she had previously set herself to fix," Mr Abbott told the audience. "Like the global financial crisis under Kevin Rudd, the government could use the floods as a justification for its spending addiction and as a licensed distraction from actually delivering on its promises.

"At some point, the independent MPs who returned the government to office could start to reconsider their decision."

Mr Abbott said Ms Gillard will face a voter backlash. "The Prime Minister is pitching it as a mateship tax even though mateship is about helping people, not taxing them," he said. "Mates choose to help; they're not coerced. Mateship comes from people, not from government. People resent being ordered to pay what they'd gladly give of their own volition especially by a government so reckless with taxpayers' money.

"Invoking a disaster to justify a tax, compounds the allegedly wooden demeanour that Julia Gillard showed during the floods with a tin ear afterwards."

He conceded the federal government will have to cover the lion's share of the repair bill for damaged infrastructure but said money could be found elsewhere.

"Flood victims simply can't be without the roads and the railways which are necessary for modern life," he said. "(The bill) will run into billions of dollars but that's no excuse for the flood tax ... there's about $2 billion uncommitted in various funds."

Mr Abbott urged Ms Gillard to drop the tax for the "spirit of national unity". "She apparently can't grasp the rip-off involved in taxing people in order to be generous to them," he said. "Two years ago, the government sent out $900 cheques to almost nine million people. Now, it's effectively taking the money back."

More here

Nanny-staters think that people read labels

The few who do are probably careful about what they eat and drink anyway. The New York experience shows that the sort of labelling advocated below will achieve nothing. Do the brainiacs below think Australians are more sophisticated than New Yorkers? Good luck with that assumption

FOOD police would enforce labels showing nutritional value on packaging and cigarette-style health warnings on alcohol under changes recommended for national laws.

A report released yesterday to improve food labelling laws in Australia and New Zealand contains 61 recommendations, including dropping mandatory "per serve" columns while explicitly stating the inclusion of trans-fats and salt content.

The report, Labelling Logic, was commissioned by the Australia and New Zealand Food Regulation Ministerial Council in October 2009 and compiled by a panel of independent experts, led by former federal health minister Dr Neal Blewett.

Information about food safety would be of primary importance followed by preventative health, new technologies such as genetic modification and lastly consumer values like "free range".

"The crux of the review was to address the tensions between competing interests that drive food labelling policy and seek to resolve them," Dr Blewett said.

Some of the recommendations call for food manufacturers to voluntarily adopt proposals such as a traffic light front-of-pack labelling system before they are legislated.

Food manufacturers attacked the traffic light recommendation, arguing there was a lack of consensus on the best way to label food. "The industry rejects traffic light labelling on the basis that it's badly understood by consumers and the system has been rejected by countries around the world," Australian Food and Grocery Council CEO Kate Carnell said.

The Federal Government has until December to respond to the recommendations.

The State Government has welcomed the review, which recommends fast food chains and vending machines declare energy (kilojoule) content - a move introduced in New South Wales last November which takes effect from February 1.

Under the recommendations, country-of-origin labelling would be tightened along with mandatory identification of any food prepared or treated with new technologies.

Alcoholic beverages would have generic health warnings including specific messages about the risks of drinking while pregnant. Alcoholic drink labels would also have to reveal their energy content.


Get tough on Victoria's bad school teachers, say parents

VICTORIAN parents want bad teachers sacked and schools with poor results to be named and shamed. A national schools survey found most of the state's parents feared their children would fall victim to physical or cyber bullying and believed alcohol and drug abuse among students was getting worse.

Nearly 5000 Australians responded to the Sunday Herald Sun online survey, revealing parents wanted schools and teachers to be more accountable for their children's performance at school.

Responses from the 1646 Victorians surveyed showed parents and teachers were often at loggerheads about what was best for students. At the heart of the great divide was parents' demands for more information about their children's schools and for teachers who don't make the grade to be sacked.

Of 794 Victorian parents surveyed, 63 per cent believed the worst-performing teachers needed to be expelled from the education system. On the flip side, teachers achieving good academic results should be paid more than their colleagues, according to 79 per cent of parents.

Schools were also in the firing line, with 67 per cent of parents calling for a rating system for schools, and more than half saying under-performing schools should be publicly named and shamed.

Mordialloc mother Jenny Power, who has two school-age children, called on the Department of Education to provide more information on schools' academic performances. "Most parents are limited for choice when it comes to schools, but it would be nice to know how your own kid's school stacks up against the others," Ms Power said. "If teachers aren't achieving what they should in the classroom, they shouldn't be there, just like any other profession."

But Australian Education Union president Mary Bluett said ranking schools and sacking low-performing teachers was a simplistic approach to fixing a complex system. "Education does suffer from the fact that everyone has been to school and everyone thinks they are an expert," Ms Bluett said. "Certainly, nobody wants incompetent teachers, but having said that, I'm happy to say the overwhelming majority of teachers are very competent."

Ms Bluett said existing ways to measure schools' performances - including NAPLAN tests - didn't give an accurate picture of teaching standards.

Up to 76 per cent of teachers were against ranking schools and only 13 per cent supported naming and shaming schools that under-perform in numeracy and literacy.

More here

Victorian Labor government ignored flood advice

They probably believed Greenie prophecies of drought

THE Brumby government knew for three years that Victoria was ill-equipped to deal with flood disasters but ignored recommendations to introduce a warning system that had the backing of the state's top emergency services and weather experts.

A report prepared for the Brumby government in 2007 said the Google Maps-style, web-based system would reduce losses, damage and injury, and save $16.5 million from Victoria's average annual flood bill, estimated at $350 million.

The report, released by the Baillieu government yesterday as northern Victoria continued to battle a massive inland sea, said such a system would greatly improve the co-ordination and response of emergency services that were relying on "skeletal information" to predict how and when flood waters would hit communities.

The Baillieu government yesterday vowed to explore the sort of state-of-the-art flood management system Labor had ignored.

A government spokesman slammed the previous government, accusing it of neglectfully ignoring funding requests for a system that would allow the public, emergency services and the media to predict and analyse floodwaters more accurately.

In the October 2007 report, Labor was told by its public service that it could "vastly improve" flood management by investing in an $11 million system called FloodZoom, which would use weather forecasts, satellite observations, river gauges and hydraulic modelling to simulate the depth and spread of flood waters.

The system was backed at the time by the State Emergency Service, Melbourne Water, the Bureau of Meteorology, the State Flood Policy Committee and the then emergency services commissioner, Bruce Esplin, who saw the need for better communication and warning systems after the Gippsland floods of 2007.

Speaking to The Sunday Age yesterday, Mr Esplin, who recently resigned after a decade as the state's top emergency manager, said the system "would provide a way for the community and the media to understand what floodwaters are doing" and limit the need for people to call Triple 0 for information.

A Baillieu government spokesman said it was committed to implementing a better statewide flood warning and management system. "The Brumby government had ignored at least three years of strong recommendations to implement better flood management and warning systems in Victoria. The neglect … is appalling," the spokesman said.

But Opposition Leader Daniel Andrews said the Premier was playing cheap politics when he should be "spending all his time supporting flood victims". "While thousands of Victorians are still devastated by these floods, it is disgraceful that Ted Baillieu is playing politics with this issue," Mr Andrews said.

Labor sources said the bid for a better flood management system had been one of many proposals fighting for limited funds as part of the state innovation strategy. Also, they said, in 2007 Victoria was in drought, and the government would have been criticised for diverting money to flood management.

The Department of Innovation, Industry and Regional Development report warned:

* The state had "significant deficiency" in its emergency response to flood, and emergency workers had few tools to issue accurate flood warnings, leading to most major floods being "characterised by confusion and uncertainty".

* It was difficult to provide a clear depiction of the extent, severity and movement of a live flood situation or to answer questions about likely developments over hours and days under different weather conditions.

Residents in Wickliffe, in the state's west, called for a better warning system after they were forced to make hasty evacuations from floodwaters in the early hours of January 15. They said there had been no warnings that the town was at risk of flood.


Saturday, January 29, 2011

Wrapped in the flag and loving it

Sally Neighbour makes observations below that are similar to the ones I made briefly on Australia day. Note that I was able to explain what she cannot

NOT usually one for patriotic musings, at lunchtime on Wednesday I nonetheless found myself pondering the meaning of Australia Day and how this once second-rate public holiday became the source of such riotous celebration across the land.

At the time I was floating on a giant inflatable plastic thong, clinging to a rope tethered between buoys beyond the breakers at Bondi Beach.

For the record, it wasn't my idea. But there we were, bobbing on the ocean, me and 2067 other patsies, all set to make a world record for the number of people gullible enough to queue for 45 minutes and - get this - pay $30 to promote a foreign brand of rubber thong. The marketing genius who thought that up surely deserves an Order of Australia for services to advertising.

As the hoary strains of Men At Work's Down Under drifted predictably across the sea, our mooring provided a novel vantage point of Bondi Beach, now crowded with tens of thousands of bodies, outnumbered only by Australian flags - on bikinis, board shorts, towels, hats, umbrellas, beach shelters, painted faces and fake tattoos.

I wondered: how had it come to this? How had I been roped into such a commercial stunt? (In short, because my in-principle objections sounded lame in the face of my 11-year-old's protestation: "but it'll be fun". And damn it, it was.) More to the point, when and why had Australians embraced with such gusto an event that, not long ago, was regarded as just an excuse for a day off?

In the 1970s and 80s, having a holiday to commemorate the arrival of the first boats of white settlers was widely regarded - at least among my generation - as passe, an anachronistic nod to a history we weren't sure whether to be proud of or not.

As for the Australian flag, it was seen by many as an irrelevant relic of our colonial past, doomed for the scrapheap come the republic.

We would no sooner have draped ourselves in such a frumpy ensign than donned our grandma's bowling whites and headed for the local green.

For some, a vague discomfort with Australia's national symbols was only sharpened in recent years by the spectre of Pauline Hanson wrapped in the flag and its use as a symbol of ugly jingoism at Cronulla in 2005. "The cloak of racism," one friend calls it.

But such reservations have little traction among generations X and Y. Ambivalence has given way to unabashed pride in all things Australian, not least the flag.

They turn up to the Big Day Out with it tattooed on their skin. The same young Australians flock to Gallipoli each year to mark Anzac Day, and trek in their thousands along the Kokoda Track.

Just why this is so is a question that intrigues social researcher Rebecca Huntley, director of the survey-based market research firm, Ipsos. She has commissioned a study beginning this year called "being Australian", which will examine, among other things, the patriotism of gens X and Y.

Ipsos research thus far shows the things people most typically associate with being Australian are time-honoured values such as the "great Australian dream" of owning their own home, the idea of having a "laid-back" lifestyle, which Huntley says is "a core part of being Australian", and the knowledge that people will pull together in a time of need such as the recent floods. The surging affinity with nationalistic symbols is a more recent trend, most markedly in the past three years.

Huntley is reluctant to jump to conclusions about why young Australians are clearly more comfortable with the flag than the generation before them.

Maybe the young revellers simply realise how fortunate they are. It's hard to know when all you can get out of them is, "Ozzie Ozzie Ozzie, Oi Oi Oi!" It was left to a jubilant newcomer at a citizenship ceremony in Sydney to articulate why being Australian was something to be immensely grateful for. "The opportunity to find jobs here is much better and it's much safer. I do think that Australians who haven't travelled and seen how the rest of the world lives take the freedom here for granted."


The chattering classes are out of step

Christopher Pearson

ANOTHER Australia Day means yet another opportunity to trash national institutions, most notably the constitution and the flag.

It comes as no surprise that the latest Australian of the Year, Simon McKeon, is as disdainful of both as 12 of his recent predecessors. What does continue to surprise is that ignorance about the constitution and eagerness to get rid of a very popular flag still pass for evidence of civic virtue in the mass media.

Even in the pages of The Weekend Australian Magazine, the Heart of the Nation page last Saturday was given over to jejune institution-bashing. It carried a photograph of the interior of the memorial hall at Cambooya, a town on the Darling Downs.

An elderly man is seen draping bunting decorated with the flag over a framed picture of the young Queen Elizabeth , which just happens to be hanging over the door to the men's toilet.

The accompanying text, by Ross Bilton, quotes Dawn Ruming, the secretary of the hall committee, as saying that Cambooya is a conservative sort of place and monarchist feelings run deep.

Would she and her committee stand still for the portrait having a permanent place over the gents, I wonder, or was this a set-up shot designed to parody rather than illustrate the values of rural communities?

Perhaps Bilton's story provides a few clues. His opening line is: "God bless the Queen. Even if you favour a republic, you've got to admit the old girl has been worth her weight in public holidays." As dopily dismissive remarks go, it's not really up there with Thomas Keneally's likening the queen to a colostomy bag on the body politic, but it's certainly callow.

No fair-minded observer could doubt that she has honoured her coronation oath of a life lived in service to her people, or that she has been a model of constitutional propriety. As well, for many she's an embodiment of social stability, the rule of law and Christian civilisation.

Even people who don't set nearly as much store in such values as the previous generation should recognise their utility in an era of tumultuous change.

Bilton tells us to disregard the portrait's placement and the fact that the image is 60 years out of date. "The point is that this satellite town of Toowoomba, with its hotel, post office, general store, school and garage, still feels part of her realm: the same realm that also takes in the frozen wastes of Canada, the beaches of Barbados and the jungles of Belize."

Patrick Hamilton, the photographer around whose picture the story is built, doesn't feel himself a member of this sophisticated supra-national commonwealth. Instead he's an old-school gumnut nationalist and, Bilton notes, "he's a republican. And Australia Day to him simply means barbecued lamb chops, wine and friends."

Forget about our country's contributions to defeating fascism in World War II, a more recent triumph in East Timor or battlefield valour in Afghanistan. It's as though, chez Hamilton, remembering them on the national holiday were somehow anachronistic, perhaps almost in bad taste.

As if, for Bilton, one self-congratulatory banality weren't enough to be going on with, he tells us that for Hamilton, the kindness of complete strangers to victims of the Brisbane floods "says far more to him about our national identity than the Queen, or the flag, ever will".

Far be it from me to underestimate the Good Samaritan instinct wherever it emerges, but I often wonder whether the notion that we're more richly endowed with it than other countries isn't self-serving mythology.


Labor MPs revolt over Julia Gillard's flood tax levy

A new tax is always "courageous", as Sir Humphrey would say

FURIOUS Labor MPs have turned on Prime Minister Julia Gillard over the controversial $1.8 billion flood tax, labelling it one of the "dumbest decisions" by a federal government.

Premier Kristina Keneally publicly criticised the levy, calling for western Sydney to be spared its full effects, reported The Daily Telegraph.

As Ms Gillard embarked on a publicity offensive to sell the $5.6 billion flood rescue package, senior Labor figures were shaking their heads at the lack of consultation with Cabinet. It is understood ministers only received a full briefing on the rescue package a few hours before they met in Canberra on Wednesday morning.

Adding to pressure on Ms Gillard, one of Australia's most powerful unions claimed scrapping the Green Car Innovation Fund would cost jobs. In a direct challenge to the PM, Australian Manufacturing Workers Union boss Dave Oliver said he would lobby key independent MPs and the Greens to retain the scheme.

Labor MPs said they were being "belted" by the public reaction to the levy. "This is one of the dumbest decisions I have ever seen - the feedback is we have made an atrocious decision," one Labor MP said.

The Government will exempt anyone earning less than $50,000 from paying the flood tax but this has done little to quell anger in caucus. "The Labor heartland feels it is being singled out in this levy," a Labor MP said.

Ms Keneally is understood to have consulted senior colleagues before deciding to go public with concerns that the flood tax will place further strain on Sydney families.

The flood tax will cost someone earning $100,000 an extra $5 a week but Ms Keneally believes Canberra should take account of higher living costs in Sydney. "Mortgages are higher in NSW on average and other costs of living are higher than other capital cities," she said.

Ministers were so angry Ms Gillard - who was monstered during several media appearances yesterday - treated Cabinet with "contempt" that some were drawing an unfavourable parallel with the behaviour of Kevin Rudd


Start the revolution with basics of English

QUIS MAGISTROS IPSOS DOCEBIT? (Who will teach the teachers?)

ACROSS Australia, schools are reopening for the start of the academic year. This year also heralds the start of the national curriculum, on a limited trial basis.

In May, students in Years 3, 5, 7 and 9 will take the fourth round of national literacy and numeracy testing, known as NAPLAN. When those results are released, parents and others will again make judgments about schools and teachers, reigniting the controversy that has marked this component of Labor's education revolution.

In fairness to the children who attempt the NAPLAN tests, whose schooling is directly affected by every change made by federal and state curriculum authorities, and who are dependent on the teachers appointed to work with them each day, it is important to consider this stage of the revolution from their point of view. What is needed to deliver the promised transparency in educational practices and the improvements in teacher quality?

The NAPLAN tests are designed to provide a snapshot of student progress to inform teaching practices and to evaluate the performance of schools. But at least one test, of language conventions (grammar, spelling and punctuation), is demonstrably inadequate for both purposes.

There are three reasons for this. First, the tests are poorly designed. Second, no national curriculum is in place to which the tests can be clearly linked. Third, and most importantly, the longstanding failure to train teachers in these aspects of English means that not only is there no consensus on how language conventions should be taught, teachers themselves are not confident about their professional competence.

The major drawback of the language tests is that they lack order and coherence. The range of questions does not adequately address the common errors that characterise students' written work, and are most detrimental to fluency. Some items appear to be testing multiple points simultaneously. Other questions are written in ways that rely on native speaker intuition, or common sense and logic, rather than a solid grasp of how English works. The language used to frame the questions is inconsistent, sometimes referring to a part of speech by its appropriate name, and at other times asking simply for the correct "word/s". If students are expected to learn and to use the metalanguage in other subjects such as mathematics, music and geography, why is this not the case in English?

The Australian Curriculum, Assessment and Reporting Authority, which administers the tests, is developing a national curriculum that appears to place a strong emphasis on accurate written expression. ACARA's National Curriculum Framing Paper (English) states that: "Attention should be given to grammar across K-12, as part of the 'toolkit' that helps all students access the resources necessary to meet the demands of schooling and of their lives outside of school."

ACARA chairman Barry McGaw says: "We don't want to just nod in the direction of grammar and say it should be taught. We need to say what that means."

But as the Australian Association of Teachers of English points out, agreement is yet to be reached on how to teach grammar. The English Teachers Association of Western Australia claims "English teachers are concerned about their ability to teach grammar". The Queensland Department of Education concedes that: "Many of our teachers are young graduates with limited grammar, who realise that this deficit makes it difficult for them to discuss work with their students."

Students rely on their teachers to model best practice and to be able to identify and to explain all language errors. The sceptic will argue that language is dynamic and that those who insist on correct usage are pedants who place more emphasis on the mechanics than on the message. Our response is that students who master the mechanics of English gain the freedom to concentrate on the sophisticated expression of ideas.

As one teacher commented last year, "Every day we ask the students to produce pieces of written work -- narratives, reports, essays and so on -- and we say that they should edit and proofread their own work, but we don't give them the tools to actually do that, and so many of them just don't know where to start and they give up."

The Australian Primary Principals Association insists that "teaching about language is essential at all stages of schooling and is not confined to the primary school". In secondary schools, any focus on basic literacy skills is normally left to English teachers and literacy co-ordinators.

The sort of courses needed to enable teachers to teach correct English usage have been neglected in recent decades.

A language revolution is required. All teachers must develop the capacity to correct their students' work for language as well as subject content. This will create what the Australian Curriculum describes as "confident communicators who appreciate and use the English language creatively and critically in a range of contexts and for a range of purposes".

Australian educational jurisdictions face a significant, long-term dilemma. As is the case in every profession, there are those who resist change. Some are uncomfortable with the NAPLAN tests and the My School website. However, the new curriculum places a renewed focus on language as a foundation skill, and all teachers in all subjects are now official members of the revolution.


Friday, January 28, 2011

Flood levy blues

THOUSANDS of people, including high-income earners whose homes were not flooded, have a ready-made loophole to avoid paying the Federal Government's new flood levy.

And several Queensland projects designed to stop flooding on the Bruce Highway are likely to fall victim to federal spending cuts to help rebuild the state.

The flood levy will not apply to anyone who received the Australian Government Disaster Recovery Payment, which was not means tested. As of last Friday more than 250,000 Queenslanders - one in every eight - had collected the payment of $1000 for adults and $400 for children.

The eligibility criteria was broad and paid out even if residents simply could not access or leave their homes for 24 hours or lost electricity, water or gas for at least 48 hours.

Prime Minister Julia Gillard said the floods posed a massive challenge to build and manage economic capacity. "We're not just going to need money, we're going to need concrete and rubber and steel and more importantly, we're going to need carpenters and bricklayers and road gangs," she said.

However, Opposition Leader Tony Abbott yesterday continued his attack on the levy, calling it unfair, particularly on those who lost their businesses but whose homes remained unaffected. "They obviously face very great reconstruction costs that in many instances won't be covered by insurance and they will still be paying the flood tax under the scheme," he said.

The Government has gone all out to sweeten its levy, restricting its impact to people earning over $50,000 and promising it will not increase and will last just 12 months starting from July 1.

Those earning between $50,000 and $100,000 will pay 0.5 per cent in 2011-12 which rises to 1 per cent on taxable income above $100,000. According to the Government, 60 per cent of taxpayers will pay $1 a week or less and the tax hike only reaches $5 a week when income exceeds $100,000 a year.

But it came under fire for its planned $2.8 billion in spending cuts which hit several projects agreed with the Greens to help Labor form government after the last election.

The federal Independents are also expected to see cutbacks to the $10 billion in regional spending they secured in exchange for supporting Labor.

Queensland Independent Bob Katter has thrown his support behind the levy, saying the precedent was sure to one day benefit North Queensland.

The Greens accused the Government of turning its back on the cause of the disaster climate change. "But it does a disservice to all those tragically affected by these floods . . . to keep insisting that these are one-off events and ignore the role of climate change," Greens Senator Christine Milne said.

Independent Rob Oakeshott said he would examine the package and discuss possible amendments. "On the specific question of flood package impacts on the agreement reached to form Government, I expect that all aspects of the agreement both in writing and in spirit will be upheld," he said.

Agriculture Minister Joe Ludwig the Gillard Government's point man for the recovery told The Courier-Mail the work so far had focused on cleaning up after the floods and the effort would now shift to the bigger rebuilding task. "Queensland needs to be rebuilt and it will be rebuilt," he said.

State Premier Anna Bligh supported the package and thanked Australians for helping Queensland. "I understand that no one wants to pay more but the people of Queensland didn't want this disaster either," she said.


Julia Gillard cops heat from radio host over flood levy

JULIA Gillard has angrily dismissed suggestions her floods response is politically motivated as "complete nonsense".

In a sometimes heated 20-minute radio interview with 3AW host Neil Mitchell, Ms Gillard denied she was sticking to her 2013 return-to-surplus timetable to squirrel money away for the next election. “The motivation for bringing the budget back to surplus is an economic one, not a political one,” the Prime Minister said.

She accused Mitchell of patronising her after the high-rating Melbourne radio host warned the public would not tolerate rorts or wasted money under the floods package. “Neil you don't need to patronise me, thank you very much,” Ms Gillard said. “I understand Neil, thank you, the need for value for money.”

Mitchell hit back: “I am simply looking at history and I think that people are looking at history and saying `This government has a history of waste, please don't waste this new tax'.”

Ms Gillard denied her $1.8 billion levy was just another tax, saying the floods were the most expensive natural disaster Australia had experienced.

She rejected suggestions the levy was massively unpopular in the community. “I believe people are generous, they do want to contribute and people will make their minds up about it,” she said.


School chaplain scheme goes to court

A rare event: Australia's version of the U.S. First Amendment in play

A FATHER won the first round in his historic battle yesterday to have government-funded chaplains thrown out of the nation's public schools.

Ron Williams journeyed from Toowoomba to Sydney yesterday for a directions hearing in his challenge and was thrilled to hear that his case could be heard in the High Court over three days in May. "This is a very important moment," a jubilant Mr Williams said yesterday.

The father of six, who has four children attending Queensland public schools, said his main argument was that the funding for chaplains in schools breached Section 116 of the Australian Constitution, which states that the "Commonwealth not legislate in respect of religion". "This is not about getting chaplains out of schools, it's about the government funding them, which I believe is against the Constitution," he said.

If Mr Williams wins his challenge, government funding for chaplains would be removed.

The National School Chaplaincy Program was introduced in 2006 by former prime minister John Howard. The national program won support from Prime Minister Julia Gillard, an atheist who, just before the election last year, pledged $222 million to extend the program for four years.

More than 430 schools in NSW get up to $20,000 each a year for their chaplain services, totalling almost $12 million, and more than 2500 school across Australia now have chaplains at a cost of more than $151 million.

The chaplain program is run in Queensland by that state's branch of the Scripture Union. In NSW the program is run by the National School Chaplaincy Association which is based in Western Australia.

A spokesman for the association said yesterday it was not appropriate to comment.

NSW Greens MP John Kaye said yesterday's decision was good news for those who believed in separation of church and state. "The anger felt by many of us at the use of public money will now at least be tested in the court," he said. "There will now be an opportunity to hear in court why this program so deeply contradicts the integrity of the Australian Constitution."


Australia already has substantial school choice but that is being "reviewed" and is at risk of being scaled back

by Kevin Donnelly

Just ask Mark Latham about the impact of the hit list of so-called privileged schools he championed when he was leader of the ALP. No wonder that Kevin Rudd and Julia Gillard, on taking over as leaders, rejected the politics of envy and argued in favour of school choice.

During the 2010 campaign, Prime Minister Gillard was so concerned about the issue that she promised to keep the existing socioeconomic status (SES) funding model for an additional year, until 2013.

Gillard also promised that Catholic and independent schools would not lose money as a result of the Gonski funding review currently underway – established by Gillard when she was Education Minister and due to report in 2011.

Unlike the Liberal Party, the ALP is a late convert to school choice. Such pragmatism is understandable. Across Australia, approximately 34% of students attend non-government schools and the figure rises to over 40% at years 11 and 12.

Parents, especially in marginal seats, are voting with their feet and over the years 1999-2009 enrolments on Catholic and independent schools grew by 21.3% while the growth figure for government schools flatlined at 1.2 per cent.

Given that non-government schools are increasingly popular and that school choice, especially for those parents committed to faith-based schools, is a fundamental human right, one might expect that all would agree that such schools should be properly funded.

One might also expect that the best response to government schools losing market share is to ask why state schools are no longer attractive to increasing numbers of parents and what can be done to strengthen such schools.

Logic and reason are not the hallmarks of the self-serving groups like the Australian Education Union and it should not surprise that the AEU, instead of addressing underlying causes, has mounted the barricades to argue that non-government schools should be starved of funding and subject to increased government regulation and intervention.

The AEU has mounted a campaign, including petitions, dedicated websites, surveys and fact sheets, arguing that non-government schools are over-funded, that such schools only serve the privileged and that Catholic and independent schools promote social instability and reinforce disadvantage.

The reality suggests otherwise. Instead of being over funded non-government schools receive significantly less funding when compared to government schools (the following figures are taken from the Commonwealth Parliamentary Library Background Note on school funding, dated 17 November 2010).

On average, and excluding capital expenditure, government school students receive $12,639 in funding from state and federal governments, the figure for non-government schools is $6,606. Every student that attends a non-government school saves government, and taxpayers, approximately $6,000.

In terms of total funding non-governments schools raise 43% of their income from private sources with state and federal governments providing the other 57%. Contrary to the impression created by the AEU it is also the case that federal funding is allocated to schools according to a school’s socioeconomic status (SES).

In the words of the Parliamentary Library paper, “Australian Government recurrent per student funding for non-government schools is based on a measure of need”. Wealthier non-government schools only receive 13.7% of the federal funding figure, known as the Average Government School Recurrent Costs (AGSRC), with less privileged schools receiving 70%.

The AEU also argues that non-government schools contribute to social inequality and educational disadvantage. Once again, the evidence suggests otherwise.

Research both here and overseas concludes that Australia has a high degree of social mobility and one of the main reasons is because we have an education system, based on an analysis of the 2007 PISA results, that is high quality/high equity.

In the words of the 2008 OECD report Growing Unequal?: Income Distribution and Poverty in OECD Countries, “Australia is one of the most socially mobile countries in the OECD” and “the educational attainment of parents affects the educational achievements of the child less than in most other countries”.

It’s also the case that while the ALP and the cultural-left condemn low SES students to educational failure, supposedly as disadvantage automatically leads to poor results, the example of non-government school proves otherwise.

Researchers at the Australian Council for Educational Research (ACER) after analysing Year 12 results conclude that non-government schools are more effective, compared to government schools, in getting low SES students to succeed.

In a 2002 ACER report analysing the factors that lead to success at Year 12, the researchers state, “Students who attended non-government schools outperformed students from government schools, even after taking into account socioeconomic background and achievement in literacy and numeracy”.

During the 2010 election campaign Julia Gillard nullified funding as an issue by maintaining the existing SES model until 2013 and promising that “no school will lose a dollar in funding”.

It’s significant that while the ALP’s rhetoric is supportive, the Gillard-led Government refuses to guarantee that funding will be maintained in real terms and that Catholic and independent schools will not suffer, either financially or in terms of their autonomy, as a result of the Gonski review.


Thursday, January 27, 2011

Let’s get over our dam phobia

Bob Brown is ever the opportunist, even if his timing leaves a very bad taste in everyone’s mouths. His recent pronouncement that our coal industry is to blame for the devastation caused by the floods in Queensland, NSW, Victoria and Tasmania is both absurd and insensitive.

All the experts, whatever their views on climate change, agree that the increased rainfalls are driven by the long-established cycles of La Nina weather events, just as El Nino is associated with drought.

No-one in the Coalition is suggesting that additional dams would have prevented the tragic Queensland floods.

The onset of the floods did, however, prompt a renewed resolve from the Coalition to ignore political correctness and to put dams back on the agenda as part of the national water management debate.

Dams are by no means the answer in every instance, but nor should they be automatically excluded purely because of politics.

If you consider Brisbane’s Wivenhoe Dam, built after the 1974 floods, there is consensus that it reduced the peak flood level of the 2011 disaster by about two metres.

ANU dam expert Jamie Pittock says that a “two metre higher flood level would have been much more damaging in terms of Brisbane directly, but also Ipswich.”

While NSW Dam Safety Committee executive engineer Paul Henreichs says the Brisbane floods would have been much worse than 1974 had the dam not been there.

“Without extra dams we are still going to get bigger floods and therefore I think people will suffer more,” he says.

This is no consolation and means little to the thousands of unfortunate Queenslanders affected by this disaster, but it does highlight the point that strategically placed dams have a vital role to play.

Despite the obvious, dams have not seriously been in the mix for two or three decades, largely due to the opposition and influence of green groups.

This was again highlighted when the Coalition recently announced our intention to develop a dam and water management plan over the next 12 months.

What we saw was a predictable negative, knee-jerk reaction from Bob Brown and Julia Gillard, before our work had even started. The fact the Gillard government is beholden to the Greens is a real problem, with base politics guiding its agenda, not common sense and prudence.

The political correctness which has shaped the water management debate in this country in recent decades was starkly illustrated in Victoria under the Brumby government.

At the peak of the drought, Brumby avoided dams like the plague and instead pursued monumentally expensive and impractical solutions such as the Wonthaggi desalination plant and the North South Pipeline.

Desalination plants also require enormous amounts of power to operate and should be an option of last resort, certainly not first choice.

The floods have reemphasised that Australia doesn’t have a problem with the amount of water we have, but with the management of it.

The Coalition opposed the Traveston Crossing Dam for a variety of reasons which have been well documented, and we absolutely stand by that decision. The Bligh government, to its credit, was at least prepared to seriously canvas the option of a new dam, albeit one of unacceptable design and location.

In the right locations, however, dams are not only effective forms of water storage for general consumption, for food production and for environmental flows, but can also play a part in low-emission power generation and of course flood mitigation.

Other soil conservation measures, including large-scale river levees and more localised landscaping projects also have a proven role in reducing flood flows.

In terms of the Coalition’s work, the consideration of appropriate dams will include looking at all areas of water management, including new technologies and innovations and consulting widely with the scientific and engineering communities, land owners as well land management and environmental groups.

The CSIRO, for example, has done some outstanding work looking at the potential in underground water storage, which could have widespread application.

While naturally occurring underground aquifers can’t hold anywhere near the volume of conventional dams, they are cheaper and can be located closer to the water user.

There is also exciting technology available in the areas of computer-aided river management, irrigation and flood control which we’ll be having a close look at. The Murrumbidgee River project comes to mind.

Utilising this type of technology, in conjunction with dams, enables the more efficient use of water within a system. If you have a stand of red gums that need flooding just once every four years from an environmental perspective, you can do it every four years, preserving water for other purposes.

While Julia Gillard and Bob Brown will no doubt attempt to whip up a scare campaign against our work, we will not be deterred. It is time to put political correctness aside and to overcome our dam phobia.


Earth's climate crisis ain't necessarily so

Christopher Monckton

WHILE the Gillard government's climate-change parliamentary committee plots to wreck Australia's economy with a rigged market to make motoring and electricity unaffordable as soon as the new Greens-infected Senate starts work in July, thoughtful pollies are at last - privately, quietly - beginning to ask the Gershwin question.

What if it ain't necessarily so? Suppose there's no climate crisis?

The Romans used to farm out tax collection to "tax farmers" such as St Matthew. The cap-and-tax boondoggle is a tax-farming scam to impoverish the working man and enrich the new tax farmers: bankers, traders, ministers, officials and media moguls. None of them saints.

Cap-and-tax in Europe has been a wickedly costly fiasco. The rigged market has collapsed twice. Member states cheated by allowing themselves more rights to emit than their actual emissions, so the price of emission rights plummeted. Then the tax farmers simply invented 90 per cent of their carbon trades.

Result: electricity prices have doubled. In the name of preventing global warming, many Britons are dying because they cannot afford to heat their homes.

Cap and tax is as pointless as it is cruel. Australia accounts for 1.5 per cent of global carbon emissions. So if it cut its emissions, the warming forestalled would be infinitesimal.

It's worth explaining exactly why. Suppose the Australian committee's aim is to cut emissions by 20 per cent by 2050. Anything more ambitious would shut Australia down, especially while the Greens insist on not letting the country use its own zero-carbon-emitting uranium as fuel.

A 20 per cent cut by 2050 is an average 10 per cent cut from now until then. Carbon dioxide concentration by 2050 probably won't exceed 506 parts per million by volume, from which we deduct today's concentration of 390 ppmv. So humankind might add 116 ppmv from now until then.

The CO2 concentration increase forestalled by 40 years of cap-and-tax in Australia would be 10 per cent of 1.5 per cent of that 116 ppmv, or just 0.174 ppmv. So in 2050 CO2 concentration would be - tell it not in Gath and Ashkelon - 505.826 ppmv, not 506.

Thus what we maths wonks call the proportionate change in CO2 concentration if the committee got its way would be 505.826 divided by 506, or 0.9997. The UN says warming or cooling, in Celsius degrees, is 3.7 to 5.7 times the logarithm of the proportionate change.

It expects only 57 per cent of manmade warming to occur by 2100: the rest would happen slowly and harmlessly across 1000-3000 years.

To be charitable to the committee, let us take the UN's high-end estimate. The warming forestalled by cutting Australia's emissions would be very unlikely to exceed 57 per cent of 5.7 times the logarithm of 0.9997: that is - wait for it - a dizzying one-thousandth of a degree by 2050.

I have set out this calculation to show how certainly it is known that all attempts to cut CO2 emissions will expensively fail. Focused adaptation to any adverse consequences of such warming as may occur would be orders of magnitude more cost-effective. But do we need to cut CO2 at all? Some cold facts:

Satellite datasets show last year was not the warmest on record. It was not the least snow-covered year but the most snow-covered: a largely unreported gain in Antarctic sea ice since 1979 almost matches the widely reported loss of Arctic sea ice.

It was not the worst year for hurricanes, but the best year: the accumulated-cyclone-energy index shows less tropical-cyclone activity worldwide than for 30 years.

The forest fires in Russia and southern Australia, and the floods in Pakistan and eastern Australia, were far from the worst ever. Nor can they be attributed to human influence: the UN's climate panel has warned us against that.

They were caused by naturally occurring weather patterns called blocking highs. And global warming can scarcely be blamed after a decade without any.

Nor did 2010 see the second-highest level of natural catastrophes. Yes, 90 per cent of them were weather-related, but in most years that is true, and was true long before we could have influenced climate.

Nor is sea level rising fast. It has risen at the rate of just 0.3m a century since satellites measured it reliably in 1993, under a quarter of the average rate during the past 11,400 years. The Greens don't believe their own whining about sea level: their Hobart office is just metres from the "dangerously" rising ocean.

Nor do most scientists believe man-made global warming will be catastrophic. Most are not climate scientists and take no view, and only a few climatologists have published on the central question how much warming there will be.

Of these, the researchers using measurement and observation rather than modelling have shown that much of the radiation the models say should be warming the surface is escaping to space as before.

The upper air in the tropics that the models predict should warm at thrice the surface rate is warming only at the same rate; model-predicted surface evaporation in response to warming is a third of the observed rate.

The missing heat energy imagined by the models but not present as warming in the past decade is not lurking in the oceans; and the entire warming of the late 20th century can easily be explained without blaming man.

Just one of these fatal discrepancies between prediction and reality - and each points to very little future warming - would normally be enough to dismiss climate catastrophism.

As the Gershwins rightly concluded, "It ain't nessa, ain't nessa, ain't nessa, ain't nessa, ain't necessarily so."


Nuclear option our safest bet

JULIA Gillard's weakened leadership needs a power surge. No one knows this better than her Minister for Energy and Resources, Martin Ferguson.

Ferguson, an outspoken proponent of nuclear energy, is in Washington this week for talks with US Energy Secretary Steven Chu. A Nobel laureate in physics, Chu supports America's expanding nuclear program, saying it "is going to be an important part of our energy mix."

For Chu and many others, nuclear power is critical to a more sustainable energy and environmental future.

If our Prime Minister is to stay true to her promise and make 2011 the year of "delivery and decision", she needs to take the lead and initiate a comprehensive discussion about nuclear power, which happens to be the only carbon-neutral baseload energy source.

Failure to do so ignores the informed views of a long list of technical experts, environmentalists and many of Gillard's Labor colleagues.

So, why is it time for Australia to have the nuclear debate? And why is it, in the words of former prime minister Bob Hawke, "intellectually unsustainable to rule it out as a possibility"?

The answer is threefold. As a leading source of uranium, Australia has a competitive advantage; as a clean form of energy, nuclear power is better for the environment; and as the only advanced economy not embracing it as the answer, it is time we caught up.

The facts are compelling. Australia is home to 38 per cent of the world's known recoverable reserves of uranium, and we export uranium to more than 10 countries.

As I said in my first speech to parliament last year, Australia is in a curious moral, economic and environmental position where we are prepared to export uranium, but not use it.

Today, 31 countries host 440 nuclear reactors, providing two-thirds of the world's people with electricity. More than 55 new reactors are under construction, nearly half of them in China.

The European Union generates more than 30 per cent of its energy from nuclear power. The US figure is 20 per cent and rising. In each of these countries the decision to go nuclear was a practical one, cutting across the partisan divide.

In Britain, it was Labour prime minister Gordon Brown, not a Tory, who described nuclear power as "a fundamental pre-condition of preparing Britain for a new world".

In the US it is Barack Obama, a Democratic President, not his Republican predecessor, who has committed more than $8 billion in federal loan guarantees for the next generation reactors.

Only in Australia does entrenched ideological opposition prevail. Only in Australia is the Prime Minister looking back down the time tunnel.

But, looking to the future, if Australia is going to be serious about meeting its carbon emission reduction targets, we must contemplate the nuclear option.

It is a message the International Energy Agency's executive director Nobuo Tanaka recently carried to Canberra: "If you don't use nuclear, totally renewable energy is very, very expensive, and also it is fragile in terms of its productivity."

It is a message that has for a long time resonated in Tanaka's native Japan.

With a commitment to cut greenhouse gas emissions from 1990 levels by an ambitious 80 per cent by 2050, Japan plans to build 9 new nuclear reactors by 2019 on top of the 55 already in place. For the leadership in Tokyo nuclear power is a proven winner and indispensable to a greener, cleaner future.

While Japan and many of our other regional neighbours including India, Korea, Taiwan, Vietnam and China have already embraced the nuclear concept, Australia can catch up.

The pre-eminent voice in the Australian debate, Ziggy Switkowski, chairman of the Australian Nuclear Science and Technology Organisation, believes Australia can have its first reactor operating by 2020 and 50 in place by 2050, providing 90 per cent of the nation's energy needs.

Such a move would propel us a long way towards meeting our emissions targets by 2050.

Developments in reactor technology are also occurring so fast that the construction phase is likely to shrink from 60 to 30 months in coming years.

New generation reactors will also be considerably smaller, built underground, and with the potential to be gas cooled, so they would not need to be located close to large sources of water.

Incidentally, Australian companies like Worley Parsons are involved in the construction of new reactors as in Egypt, where they are gaining an international reputation for their project management expertise.

Huge strides are also being made to dramatically reduce the amount of nuclear waste. Fourth generation reactors will burn most of the fuel, with the surviving waste having a half life a fraction of that produced by today's reactors.

Today's reactors are also significantly safer than their predecessors. The explosions at Chernobyl and Three Mile Island were decades ago and since then there have been thousands of reactor hours without incident.

A comprehensive and informed debate about a nuclear power industry for Australia is long overdue.

It will require our Prime Minister to overcome the ideological bogies of the past and think of the benefits that will accrue to future generations.

If Gillard started to listen to Hawke and other senior voices on the Labor side, the pathway ahead for Australia would soon become abundantly clear.


Class warriors prepare to ambush private schools

Janet Albrechtsen

SO far it's just shots across the bow in what will be this year's political sleeper issue: the Gonski review into federal funding of schools.

Soon enough we will get a barrage of rapid fire from the teachers unions as they do what they always do when it comes to any talk about funding schools: cast aside inconvenient facts, ignore parental choice and wage a misleading war against private education.

Last Sunday, Fairfax's Sun-Herald joined the side of union leaders, trying to shock parents about fee increases at private schools, giving the last word to the Greens to complain about "ever greater amounts of government money flooding into wealthy private schools".

Flooding is extreme imagery at the moment. And quite deliberate. Submissions to the Gonski review are due by March. After that, the teachers unions' carefully orchestrated campaign of misinformation about the evils of funding private education and the virtues of funding public education will get into full swing.

That's a shame. Funding our schools raises important principles ripe for discussion, recommendation and determination.

As then education minister Julia Gillard said in April last year, when announcing a review of the complicated, hotchpotch approach to funding schools, funding principles "should be based on simplicity, flexibility, stability, equity, value for money, transparency and best practice".

All laudable principles that the review will consider over the course of this year. Alas, Gillard either forgot or deliberately ignored another principle that has long guided funding of schools in Australia. The principle of choice.

To be sure, the threshold issue of choice was settled long ago. Australia has a fine tradition that mixes public and private investment in education. Plenty of parents have followed P.J. O'Rourke's basic observation that when you spend your money on yourself, you spend it much more wisely than when the government spends your money on other people.

The real question, now critical to the Gonski review, is whether we encourage parents to spend their own money on their children's education, whether we merely tolerate it or whether we actively penalise it.

By failing to mention the principle of parental choice to privately educate their children in her discussion paper and draft terms of reference, Gillard seems to fall into the "tolerate choice but don't encourage it" camp.

That, too, is a shame. Logic would suggest that once the state has used taxpayers' money to provide acceptable minimum standards of education to every child, it should then actively encourage parents to lavish as much of their own money on their child's education as they can. But this most basic logic eludes the cheerleaders of public education entirely, most particularly the teachers unions. Many of them actually want to punish parents who spend their own money (over and above their taxes) on their child's education.

That's because unions don't really approve of allowing private choice when it comes to parents spending their money on their child's education. For the time being, their class warfare means they want a funding model that penalises parents who choose to educate their children privately.

And misinformation is at the heart of this campaign. Consider the Australian Education Union's submission to the Gonski review about its terms of reference, in which it demands a "comprehensive, evidence-based analysis of both the state and federal funding mechanisms for non-government schools". On its face, that seems appropriate. The entire funding pie for each sector is relevant to any meaningful review of funding. Except that when unions compare public schools with private schools, they invariably look only at federal funding. And the reason is simple. Although education is a state responsibility and the states and territories provide the largest slice of funding to public schools, the unions don't want you to recall this inconvenient fact.

Instead, critics of private education use misleading figures to suggest government-condoned inequity - the rich taking from the poor in our schools. Take Trevor Cobbold, convener of Save Our Schools, who likes to highlight average total expenditure. In government schools in 2007-08 it was $10,723 a student, compared with $15,147 in independent schools and $10,399 in Catholic schools. It's true that total expenditure in government schools is about $10,500 per student. But now add the relevant facts. State and territory governments provide about 88 per cent of funding to public schools, the federal government provides about 8 per cent and parents the remaining 4 per cent. Almost the reverse funding pie applies to independent schools. State and territory governments provide just 12 per cent of the funding per student, the federal government picks up the tab for 31 per cent and parents, and the school community provides 58 per cent of the funding per student.

In dollar amounts, if you compare state and federal funding to government and non-government schools, as any meaningful review of funding must, students at government schools receive about twice the government funding received by students at non-government schools.

Fair enough. Parents who choose to educate their children privately accept that the bulk of the funding is private: they choose to foot the largest part of the bill to educate their children, with estimated savings to governments of $3.1 billion each year.

Still, teachers unions are committed to first reducing, then obliterating, any public funding to private schools. Their message to parents: if you can pay anything at all towards a private education, you should pay for the lot.

Union leaders may talk about equality of opportunity but their aim is equality of outcome: each Australian student attending the same kind of school, receiving precisely the same kind of cookie-cutter education. Diversity, usually such a fashionable word in the teachers union world, is taboo when it comes to schools and choice. Being an advocate of public education is a fine vocation indeed, except when it means becoming a specialist in dishonest and illogical arguments aimed at bludgeoning the federal government into giving less and less to private schools. No strategem goes unused in their attempt to strangle private education.

Imagine how refreshing it might be to hear an advocate of public education talk about the importance, too, of private schools within our education system. Imagine if this public education advocate recognised the need to encourage - not just tolerate, and certainly not penalise - parents who can afford to privately educate their children, to do just that. Imagine if the Gonski review said just that. And just imagine if the Gillard government agreed.

After all, telling hardworking parents who sacrifice in order to fund their children's education that the more they invest, the more they will be punished by a withdrawal of federal funding is no way to build an education revolution.


Wednesday, January 26, 2011

Australia Day today

It commemorates the arrival of the first white settlers in Australia in 1788 and has become an increasingly popular celebration. As the Left-run schools have robbed Australians of their history, the few shreds that remain in people's consciousness are seized on eagerly. The same goes for Anzac Day, which goes from strength. My family on my mother's side have for many years celebrated the day in a good Aussie way -- with a family get-together over a BBQ lunch. I will be off to that as soon as I post this. I expect to see lots of cars with Australian flags on them -- something that is a phenomenon of recent years only

A pesky one for the Warmists

In their usual form, Warmists have been out in force blaming the recent Brisbane flood on global warming (e.g. here), quite ignoring the fact that Brisbane flooding has been happening since Brisbane was founded nearly 200 years ago.

They also allege that the world has warmed significantly in recent decades. That should mean that the recent flood was greater than previous floods. Since the previous flood, however, a conservative government built the huge "Wivenhoe" flood mitigation dam. So flood levels don't necessarily tell us much.

What DOES tell us something is the amount of rainfall. If global warming were the dark person in the woodpile, recent rains should have been a record high. They were not. The recent Brisbane rainfall was dwarfed by the amount of rain that fell during the previous flood 36 years ago

BRISBANE had more rainfall in the 1974 floods than it did in the latest episode, preliminary figures show. And rainfall during the 1893 floods may have dwarfed both the 1974 and 2011 events.

The weather bureau on Tuesday unveiled rainfall comparisons suggesting the city falls were relatively light compared with '74. But the inland falls that caused the flooding of the Brisbane River were extremely heavy. The bureau stressed all data was not yet complete.

But weather experts suggested "peak rainfalls from the 1974 event were substantially heavier than those in 2011". Brisbane's three-days and one-day totals were 600mm and 314mm in 1974, compared with 166mm and 110mm in 2011. "However, in 1974 the heaviest rains were closer to the coast whereas in 2011 heavy rains spread further inland," the bureau said.

Insufficient data exists for a comprehensive assessment of the 1893 floods. But what data the bureau has suggests 1893's rainfall was extreme. Crohamhurst in the Glass House Mountains, inland from the Sunshine Coast, received 907mm on February 3, 1893. That remains an Australian daily record.


Flood levy will hit already 'struggling' Australians as food prices rise, says Joe Hockey

A $5-a-week levy to pay for flood reconstruction is a "dumb idea" when Australians are already struggling with flood-related price rises, the Coalition says. Opposition treasury spokesman Joe Hockey said it was “absurd” for Julia Gillard to ask Australians to donate to Queensland Premier Anna Bligh's flood relief fund and then impose a $3.5 billion new tax. “What's even worse is that flood victims will have to pay this levy, they have been affected by the floods and then they are now going to have to pay the levy.”

The Prime Minister is expected to announce a 0.5 per cent increase in the 1.5 per cent Medicare levy at the National Press Club tomorrow. The move would cost average earners an estimated $5 a week, raising about $3.5 billion in 12 months to rebuild damaged infrastructure such as roads, bridges, rail lines and community amenities.

News Limited newspapers reported today that Ms Gillard met with Treasurer Wayne Swan, Finance Minister Penny Wong and Infrastructure Minster Anthony Albanese yesterday to sign off on the levy.

Mr Hockey promised the opposition would oppose the imposition of a new tax in parliament. “This is a dumb idea on the back of increases in fruit and vegetable prices, rising interest rates, a carbon tax and a mining tax, it will indirectly affect everyone because there will be less money and less spending in the community, whether people have to pay it or not,” he said. “This is going to hit people who are struggling.”

Mr Hockey said a Coalition government would not impose a reconstruction levy if it found itself in government soon. “We absolutely rule out a levy, from our perspective the rebuild can be paid for out of existing government budget,” he said. "They are sitting on billions of dollars in various funds that they are afraid to touch because they are slush funds for re-election.”

The Howard government imposed a series of levies when it was in office, including the $500 million gun buyback levy and the $286 million Ansett levy, imposed on airline tickets, to pay workers entitlements after the airline's collapse. It abandoned a plan to impose a levy to pay for the military engagement in East Timor after community resistance.


Another useless government hospital kills a kid

Parents watched son die before their eyes

No doctor, a student nurse, faulty equipment and a stricken father forced to start CPR on his dying son when medical staff failed to notice the boy's heart had stopped. This was the nightmare unfolding at Nambour Hospital's emergency department on August 25 after an ambulance arrived with critically ill Sunshine Coast four-year-old Tom Olive, who later died.

His Mooloolah parents Andrew and Trudy Olive have called for an investigation into their son's treatment and a review of procedures so that other families don't endure the same trauma.

The Courier-Mail in November revealed the tragic loss of Tom and fears his three-year-old sister Laura could be at risk from the mystery disease that caused a devastating breakdown of his muscle tissue. His parents said their initial goal had been to protect Laura and now they were confident about her future, they wanted answers about their emergency department ordeal.

They have sent two letters to Deputy Premier and Minister for Health Paul Lucas through their lawyer Peter Boyce. A reply said the circumstances surrounding their son's death would be addressed by the State Coroner.

"This could take years. There is only a small window of time to save a child when they get this critical," Mr Olive said. "The children of the Sunshine Coast deserve better. I will not sit back and wait any longer. Changes must be put in place now as more lives could be lost.

"What we encountered was madness. There was no doctor waiting for us. A uni student nurse was trying to take Tom's temperature with equipment she said had been 'playing up all morning'. "The paramedic also had to point out that the blood pressure reading would be inaccurate because of its placement and Tom had moved.

"Later, when we were moved to a resuscitation room, there were up to eight staff present and no one except us was watching Tom. I was the first to notice his heart had stopped and started CPR. "All hell broke loose. The only resuscitation mask was an adult one that didn't fit and people were running everywhere looking for a kid's one. It was only at this stage that a doctor became involved."

Mr Olive said despite the ambulance stopping to pick up an intensive care paramedic and the hospital being called before their arrival, there was no doctor on hand. "How serious does a little boy have to be before he gets to see a proper doctor? It's too late when he's dead," Mr Olive said. "I don't blame the student nurse in any way, she should not have been put it in this situation."

Sunshine Coast Health Service District chief executive Kevin Hegarty said the matter was subject to an ongoing coronial investigation. "I appreciate the grief and anxiety this young family must be experiencing," he said. "I assure them that we are doing everything possible to assist the coronial investigations."


More legal stupidity

Man fined for trying to paint over offensive graffito on road. He should have been thanked, not fined

A Brisbane bayside man who tried to cover "offensive graffiti" of a penis left by others by painting over it was fined $300 and ordered to pay for its partial clean-up.

Simon Corbett pleaded guilty in the Redcliffe Magistrates Court to one count of wilful damage at Scarborough, north of Brisbane, on October 29 last year.

Prosecutor Jodie Brennan said police interviewed Mr Corbett after neighbours saw him painting on a section of road that was later found to have graffiti featuring "indecent representations" of a phallus - an erect penis.

Senior Constable Brennan said Mr Corbett was originally charged with an added aggravating feature of the offence - meaning they believed he was responsible for the original offensive road artwork. However, Mr Corbett, who was self-represented, said he had simply tried to cover the offensive "phallus" by painting over it.

It was expected Mr Corbett would defend the charge during a summary trial, but entered a plea of guilty when police revealed they would not pursue the allegation he was responsible for the offensive graffiti. Constable Brennan said the prosecution accepted Mr Corbett had only tried to cover graffiti allegedly left by one or more other people. "He was trying to cover up (offensive) representations on the road," she said.

The court was told the clean-up bill to remove the graffiti was $770. Mr Corbett said he did not think it would be fair to lumber him with the whole cleaning bill. Magistrate Alec Chilcott agreed and ordered Mr Corbett pay only $100 restitution.

Mr Chilcott said under the circumstances it was appropriate to not record a conviction against Mr Corbett, but did impose a fine of $300.


Tuesday, January 25, 2011

A failed attempt to impose guilt on ordinary Australians

The intelligentsia claim to feel guilt about events in Australia's past and present as a way of making ordinary Australians feel guilty too. It has been an epic fail. It just makes the intelligentsia look as out-of-touch as they are. So the hatred for ordinary people behind the guilt crusade remains unsatisfied, rather pleasingly

At the Australia Day lunch in Sydney last Friday, Germaine Greer delivered a brief and dignified address. She spoke on behalf of the four prominent women honoured as recipients of Australia Post's Australian Legends awards - Greer, Eva Cox, Elizabeth Evatt and Anne Summers - and whose images appear on the 50¢ stamp.

Ever the thespian, Greer gave a polished performance. However, she felt compelled to make one broadly political comment when referring to "the guilt that hangs over this country".

The reference was clearly to the events of 1788 and after - when those sent from Britain (then one of the most developed societies on Earth) began to interact with indigenous Australians (then among the most traditional of cultures).

The concept of guilt is a phenomenon felt by many members of the Australian intelligentsia. But there is unlikely to be much evidence of guilt when the increasingly popular Australia Day celebrations take place tomorrow. Guilt for the deeds, or rather misdeeds, of others is essentially a condition embraced by intellectuals.

The novelist Tom Keneally has taken a stance between guilt and celebration. On The Late Show on SBS TV last week, he saw reason for Australians to commemorate the existence of a highly successful contemporary society while not forgetting that errors were made in the past.

It's just over five years since the Cronulla riots of late December 2005. The attacks by an intoxicated group of Australians of Anglo-Celtic background on Australians of Muslim Lebanese background were an unpleasant manifestation of tensions which exist within all democracies.

But, as the scholar James Jupp pointed out at the time, they were not the worst racially motivated incident since the Lambing Flat attack on the Chinese in 1860. He commented that "the Kalgoorlie riots of 1934, directed against southern Europeans, and the Battle of Brisbane during World War II, directed against US servicemen, were worse and lives were lost". There were no fatalities during or following the Cronulla riots.

December 2005 was a time for high theory from guilt-obsessed intellectuals. From London, Greer predicted riots and counter-riots from the Gold Coast to Perth. This "looks like being a bloody summer in Australia", she prophesied. It wasn't. From La Trobe University, Professor Marilyn Lake saw the events as evidence of Australian support for "racial exclusion in the name of the nation". In fact, nothing occurred at Cronulla in Australia's name during 2005.

Soon after, journalist academic Peter Manning depicted the occasion as a "seminal event" in Australian history which demonstrated "the true face of Australian fascism". Yet more hyperbole. The years after the Cronulla incident saw one of the largest, and most diverse, inflows of immigration in Australian history. This took place during the final period of John Howard's Coalition government and the early years of Kevin Rudd's Labor administration. What has been remarkable about Australia during the time of the global financial crisis has been the lack of ethnic tension.

Meanwhile, rates of inter-marriage between ethnic groups remain very high. In other words, the intelligentsia misread the times.

It was much the same with the dismissal by the governor-general Sir John Kerr of Gough Whitlam's Labor government, 35 years ago last year.

Monash University academic Max Teichmann put out a pamphlet in which he presented Australia in November 1975 as being in much the same pre-fascist condition as existed in Germany just before the Nazis came to power. Teichmann even predicted that the election of Malcolm Fraser's Coalition would lead to a dictatorship, since it was most unlikely that he "would merely surrender office" after losing an election. Fraser surrendered office in March 1983.

There were a few who rejected Teichmann's hyperbole at the time. Professors Hugo Wolfsohn and Rufus Davis, both of Jewish European background, wrote to The Age that "Australian democracy is not in crisis nor has it come to an end". They queried the "alarming statements" of many fellow academics and described the constitutional crisis of 1975 as a "temporary technical difficulty in the working of our parliamentary system". And so it turned out to be - Wolfsohn and Davis understood what real fascism was like.

It was much the same with the dismissal of the Lang Labor government in NSW in 1932 by governor Sir Philip Game. Despite the view of some historians, Australian democracy was not threatened at the time.

All too many members of the intelligentsia want to project their disillusionment - or sense of guilt - on to the society at large. But the success of Australia's continuing democracy suggests that this is an empirical society in which there is little room for high theory and scant feelings of collective guilt.


Australian cities to more than double in size under current immigration levels

AUSTRALIA'S capital cities will more than double in size within 50 years under current immigration rates, dramatically affecting quality of life and cutting food production.

Research for the Department of Immigration and Citizenship has found more than 430,000 hectares of land will have to be found for housing in both Sydney and Melbourne if net overall immigration remains above 260,000 a year. Even with zero migration, the capitals will grow in size by roughly 50 per cent, costing residents an extra $1000 a year due to added congestion within the next two decades.

Under current migration rates, each capital would become an estimated one and a half times bigger, with massive gridlock-induced costs.

Posted on the department's website before Christmas, the National Institute of Labour Studies research reveals the extent of the policy problems facing the Gillard government as it plans for a “sustainable Australia”.

“The magnitude of the impacts at all net overall migration levels suggests that unless substantial and timely actions are taken to address these impacts, some impacts have the potential to disrupt Australia's economy and society,” the paper warns.

Lead researcher Dr Jonathan Sobels, from Flinders University, said farms and public land would be consumed as bulging cities expanded. He said Sydney would lose about half of its productive land used for fresh fruit and vegetable production.

“Sydney and Melbourne will rise to something of the order of seven million people. We've got something in the order of half of that now,” he said. “Where are they all going to go? They're not going to all go into 50-storey apartment blocks. “Physically, the demand on land is going to be immense.”

Affluence is forecast to rise faster under higher immigration scenarios, driving up the use of space and resources. Per capita wealth would rise by about 2.3 times by mid-century with migration at the level of 260,000 a year. Without migration, per capita wealth would double over the same timeframe.

Consumption is forecast to rise with affluence, contributing to growing levels of waste, congestion and use of environmental resources.

Sydney would need an extra 2.5 landfills for every one required today under higher migration scenarios, with much of the extra waste resulting from demolition of old buildings.

The report suggests agricultural production would increase toward 2030, and then decline.

Former prime minister Kevin Rudd was a supporter of a “Big Australia”, arguing for a population of 36 million-plus by 2050.

Julia Gillard modified the approach amid a growing suburban backlash, calling instead for a sustainable Australia.

Net overseas migration was running at almost 300,000 but is expected to fall when the latest figures become available in about six months, after changes to cut the number of overseas students staying in Australia following their studies.



Three current articles below

Another huge "Green" hit on the pocket of the taxpayer

SHORTLY before Christmas, federal Resources and Energy Minister Martin Ferguson announced seven proposals were being assessed for two spots in the first round of subsidies for large-scale solar power.

Though dwarfed by the waste demonstrated in the $42 billion Building the Education Revolution, the government's Solar Flagship program aims to provide $1.5bn to assist in the creation of intrinsically uneconomic large-scale solar electricity generation.

Infigen, created out of the carcass of Babcock & Brown, has received preliminary approval from the NSW government for a 100 megawatt capacity solar farm at Nyngan in the northwest of NSW, the cost of which is $300 million.

The simple arithmetic on the investment costs, assuming an 11 per cent return on capital, suggests the project would require its output to be sold at a price of more than $240 per megawatt hour if it were to be viable. But $240 per MWh is more than eightfold the average spot market price in the 2010-11 year to date. So how can the proposal be contemplated?

Well, first, it will receive a subsidy of about $80m from the financially beleaguered NSW government. In a triumph of hope over experience, the Keneally government hopes the project will "contribute to the development of the utility scale renewable energy industry in NSW". An ambitious Victorian solar scheme sponsored by the previous Labor government was to create a new industry and 10,000 jobs, but was mugged by reality and abandoned, with considerable loss to its commercial sponsor.

Second, the Nyngan proposal aims to get another $100m courtesy of the taxpayer from the commonwealth government. To earn an adequate return on the $120m of private capital invested would still require a wholesale market price for electricity of $100 per MWh, compared with the prevailing $30 to $40 price. To bridge the gap, there are further subsidies paid by the consumer as a result of government regulations.

The first of these is the renewable energy requirement, which compels energy retailers to incorporate a rising proportion of uneconomic renewable energy into our electricity supply. Under present legislation this proportion will be 20 per cent by 2020. To meet the commitment, the retailer has to buy Renewable Energy Certificates, which represent electricity supply that is not derived from any commercial supply source such as large-scale hydro. The REC price is presently low due to the overfulfilment of rooftop solar systems (another subsidised renewable scam), but if the REC price rises to $55 per MWh, large-scale solar power systems would start to look profitable if they could sell their electricity at $45 per MWh.

This is feasible since, as a result of the government-created risk of a carbon tax, there is precious little investment in new electricity generation from commercial sources. The upshot is that prices must inevitably rise for electricity as a whole. If they rise from the present (somewhat depressed) level of $30 per MWh to $60 per MWh, this would provide a cushion and allow a large-scale solar plant to turn a profit. Hence, to convert a $300m sow's ear that would produce electricity for a cost that is eightfold its value into a silk purse requires four waves of the governmental magic wand:

* A NSW government grant of $80m.

* A commonwealth Solar Flagship grant of $100m.

* The subsidy from the "20 per cent by 2020 renewable energy" requirement, which doubles the venture's returns.

* And, bringing home the proposal's bacon, the government-created risk of a carbon tax, which prevents new commercial supplies being built and is likely to increase the ex-generator national electricity price by about 50 per cent ($20 to $30 per MWh).

Government regulations and subsidies therefore leverage an investment with a market value of $30m to one that can be profitable at a cost of $300m. The Solar Flagships scheme may not be the most extravagant piece of government expenditure, but the "mere" $1.5bn it is budgeted to squander in taxpayer resources serves to illustrate just how inured we have all become to misused government spending. Moreover, combined with other government distortions of the marketplace, the Solar Flagships scheme is destabilising the commerciality of the electricity supply industry.

As such, it is undermining what was arguably the world's most efficient electricity supply industry, bringing adverse consequences directly to the consumer and to industry competitiveness.


An embarrassing $150 million "clean coal" flop

Two Bligh Government bureaucrats went on a $30,000 round-the-world trip to tell the world Queensland's $150 million clean coal dream was in tatters. In a final "sayonara" for the Japanese-backed ZeroGen project, Department of Economic Development associate director-general Dan Hunt and Queensland Treasury official Lloyd Taylor embarked on the 10-day business-class jaunt in late-October across Japan and the United States.

The move came only weeks before The Sunday Mail revealed in December the government would give ZeroGen to the coal industry and can its proposed $4.3 billion clean coal power plant in central Queensland after taxpayers pumped $150 million into the initiative.

However, there are conflicting claims for the purpose of the trip to Tokyo, New York and Washington DC. Mr Hunt yesterday said the $30,285 trip satisfied government guidelines and was designed to brief technology vendors, including representatives from ZeroGen backer Mitsubishi, personnel of other investors and government officials.

"(The briefings were about the) Government's future investment strategy in low-emission coal technologies and its implication for the ZeroGen and Wandoan Power projects," he said.

However, former premier Peter Beattie wrote in a newspaper column on October 23 the trip was held to try to sell ZeroGen. "The Queensland Government is now selling this project," Mr Beattie wrote. "Dan Hunt and a key Treasury officer have been dispatched this past week to Japan and US to begin negotiations for ZeroGen's sale."

However, this is contradicted by a departmental annual report released at the time which shows the government had already written off its portion of the $150 million investment as a loss.

ZeroGen sources have told The Sunday Mail the Tokyo leg of the trip was essentially to say sorry after it was thought damage had been done to the relationship with the state's key trading partner. "They went there to apologise to the Japanese," a source said. "The government was so rude to them by stuffing them around over the past year before finally abandoning the project."


Green scheme in the red

TAXPAYERS are spending millions of dollars to subsidise the electricity bills of Cate Blanchett's Sydney Theatre Company and replace in-room fridges with "green" Eskies on Heron Island.

Designed to demonstrate solar power and save water, the Gillard Government has spent $15 million on the Green Precinct program at just a dozen "high profile" demonstration projects.

They include a grant of $1.2 million towards the Sydney Theatre Company's Greening The Wharf project that will reduce energy costs by just $100,000 a year. The total program cost is $5 million.

The cost of reducing greenhouse gas emissions is sky high under the scheme compared to the Government's failed bid to introduce an emissions trading scheme with a carbon price of around $30 a tonne. Based on the projected savings under the scheme, the Opposition estimates the Green Precincts Fund comes with an estimated price tag of $2022 per tonne of carbon dioxide saved.

Coalition spokesman on Scrutiny of Government, Jamie Briggs said: "If there is a more expensive way of delivering a government program this Labor Government will find it." "While Australians are wrestling with increased power bills, Labor is finding new ways to burn money."

First announced in the 2008 Federal Budget, the projects are designed to save 142 megalitres of water and 9 million kilowatt hours of energy.

The scheme has proven a winner for lucky recipients including the Sydney Theatre Company, whose general manager Patrick McIntyre confirmed he hoped to slash the company's $140,000-a-year electricity bill by 70 per cent.

The Department of Sustainability disputed the Coalition's calculations on the cost of the scheme in terms of the cost of carbon abatement per tonne, but was unable to provide its own estimate. A spokeswoman said, for example, if the Sydney Theatre Company saved 555 tonnes per year over 20 years, the cost per tonne would be $108 per tonne, not $2162.


* Sydney Theatre Company: For solar power and rainwater harvesting: $1.2 million (Expected to save $98,000 a year on power bills during next decade . total investment of $5 million)

* Wide Bay Water Corporation of Heron Island: To generate solar power and 'replace in-room refrigeration with coolers' at the Heron Island resort: $1.29 million

* Blue Mountains Sustainable Precinct: For rainwater harvesting and rooftop rain gardens: $1.5 million

* Perth's Shire of Peppermint Grove's Library Project: Rainwater harvesting, climate-sensitive building design, including thermal maze and double glazing: $1.5 million

* Essendon Football Club: $1.5 million

* Australian National University: $1 million