Climate policies helped kill manufacturing, says adviser

THE unprecedented cost of energy driven by the renewable energy target and the carbon tax had destroyed the nation's competitiveness, Tony Abbott's chief business adviser has declared.

Maurice Newman also says climate change policies driven by "scientific delusion" have been a major factor in the collapse of Australia's manufacturing sector. "The Australian dollar and industrial relations policies are blamed," Mr Newman said. "But, for some manufacturers, the strong dollar has been a benefit, while high relative wages have long been a feature of the Australian industrial landscape."

In an interview, Mr Newman said protection of climate change policies and the renewable energy industry by various state governments smacked of a "cover-up".

He said an upcoming review of the renewable energy target must include examination of claims made in federal parliament that millions of dollars were being paid to renewable energy projects that allegedly did not meet planning guidelines. Mr Newman's comments follow those of Dow Chemicals chairman and chief executive Andrew Liveris, who said Australia was losing its natural advantage of abundant and cheap energy.

"As far as new investments go, our primary energy sources of natural gas and electricity are now or will soon become negatives to any comparative calculation," Mr Liveris said.

"Average prices of electricity have doubled in most states in recent years and the unprecedented contraction in consumption threatens a 'death spiral' in which falling consumption pushes up prices even further, causing further falls in consumption," he said.

Mr Newman said Australia had become "hostage to climate-change madness". "And for all the propaganda about 'green employment', Australia seems to be living the European experience, where, for every 'green' job created, two to three jobs are lost in the real economy," he said.

"The scientific delusion, the religion behind the climate crusade, is crumbling. Global temperatures have gone nowhere for 17 years. Now, credible German scientists claim that 'the global temperature will drop until 2100 to a value corresponding to the little ice age of 1870'."

Mr Newman said the climate change establishment, through the Intergovernmental Panel on Climate Change, remained "intent on exploiting the masses and extracting more money".

"When necessary, the IPCC resorts to dishonesty and deceit," he said.

In Australia, Mr Newman said, Victorian Democratic Labour Party senator John Madigan had told parliament how politicians and bureaucrats were paying tens of millions of dollars annually to wind turbine operators that had not received final planning approval.

"It could be hundreds of millions of dollars and we have a government that is keen to rein in the budget deficit," he said. "If you can save a million dollars that should never have been spent, we should be doing it."

Senator Madigan said the issuing of renewable energy certificates to one of the non-compliant wind farms, at Waubra in Victoria, reflected "a culture of noncompliance arising from systematic regulatory failure that impacts every wind farm in Victoria".

He said the issue involved "the pain and suffering of little people living in rural Australia, environmental damage, fraud on a grand scale, deception, lies and concealment".

The clean energy regulator has defended the decision to allow the Waubra wind farm to receive renewable energy certificates.

Mr Newman's comments came as the Australian Competition & Consumer Commission revealed that in the 18 months since the carbon tax commenced, it had received 3132 complaints and inquiries in relation to carbon price matters.

The Coalition has committed to bolstering the watchdog's powers, with additional funding and new penalties to ensure that companies lower energy costs after the repeal of the carbon tax laws.

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The blight that is excessive bargaining

There is a queue of corporate beggars forming at the door of government, but I am putting the people in that queue, and their wealthy international owners, on notice.

Try to get your hands on our money, and you will find me shining a great big torch up your jacksi.

Luckily for us, enterprise bargaining agreements are public documents; if you have voluntarily locked yourself into ridiculous arrangements with a high fixed cost base, the spectacular incompetence of your local management team will be exposed for all to see.

Public sympathy will turn to scorn and the government will subsidise you at its peril. As Tony Abbott says, before you come looking to us for help, get your own house in order. After all, there is a "budget emergency" on.

The narrative many in this country would have you believe is this: Australia's high wage costs and unproductive work practices are commanded by law.

All manufacturing jobs will have to be heavily subsidised.

Major projects cost a fortune because the Fair Work legislation mandates that they must.

Enterprise bargaining with unions is compulsory and you are forced to agree with everything they want.

The only way out is for Abbott to bring in individual contracts and abolish the Fair Work system.

He won't do this because he is a ninny and scared of the Work Choices label.

Therefore it is hopeless; there is nothing to be done but whinge about our slow decline.

This narrative is extremely misleading. The reason I constantly rail against it is because it provides a convenient cover for corporate collusion with unions, incompetence, ignorance and sloth.

Believe in it if you must, but you will only perpetuate failure if you do.

I believe we must all do better than this, and my experience tells me we can.

Yes, our minimum wages are high by international standards but our biggest problems don't lie there because fewer than 20 per cent of workers are on the minimum wage. Dropping the pay of the person who makes the bed in your hotel room from 16 bucks an hour to 12 will not solve Australia's biggest problems.

Our big issue lies with the dramatic excesses of voluntary enterprise bargaining: 50 per cent of workers are on these arrangements and many of them are unaffordable and unsustainable.

Corporate leaders have told me of their unskilled workers making things like beer and car parts earning about $150,000 per annum.

I have seen the group certificate of a road worker on $330,000 and interviewed an entry-level boilermaker on $130,000. There are plenty of high wage examples around.

None of these wages were gained at gunpoint. Companies agreed to them voluntarily. And of course, no one is going to begrudge anyone exorbitant wages, as long as their taxes are not paying for them.

SPC signed its enterprise agreement just under a year ago. At that time it would have known it was in strife. Why did it sign the agreement and why did it give out pay increases of 5 per cent?

Toyota signed its current enterprise agreement in late 2011. It expires in 2015, but the document binds it to start negotiations in January 2015 for yet another agreement beyond this one.

That is madness.

Toyota also agreed to not "make any further claims in relation to wages or any other terms and conditions of employment and take any steps to terminate or replace this agreement without the consent of the other parties".

When a judge recently enforced this clause, everyone blamed the judge, who is duty bound to interpret the obvious legal meaning of the words.

I blame the person within Toyota who agreed to put the clause in a document and sign it.

Companies with terrible enterprise agreements have a wide range of options open to them. They can cease bargaining and let wages and conditions be "frozen" for a few years.

They can seek to leave wages the same but bargain for more flexibility. They can bargain downwards and reduce pay and conditions or they can attempt to dissolve the agreement completely by application to the Fair Work Commission.

Unfortunately, and here is where publicly listed companies baulk, all options involve recasting or severing their relationships with unions.

This requires strong leadership and industrial discomfort.

Managing in the listed company environment is often little more than a popularity exercise. When you've played Santa with shareholders' money for years on end how can you turn around and start being Scrooge?

When unions have always been "stakeholders" who you've had a "good relationship" with, how do you suddenly tell them to get knotted?

When you've always let the unions veto your industrial relations advisers, how do you defy them and hire a good cost cutter they hate? When you've always managed your workforce through the union reps, how do you bypass them and engage with the workers directly?

The Fair Work Act is simply a piece of machinery. With the right driver, the right results can be delivered. Unions have just always been better drivers. Listed companies are going to have to start hiring people who are just as good.

There are quite a few of them around, but they've all been black-banned in the past by unions and the companies have stupidly observed the bans. Legislation is never perfect but our problems are more cultural than legislative. Legislative change will come in time, I suppose, but in the meantime, we need cultural change to occur.

This will happen only if the discomfort of change is less than the discomfort of exposure. That is where I and my great big torch come in. Happy New Year to all.

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Anti-terrorism laws a test of Attorney-General George Brandis' commitment to freedom of speech

Federal Attorney-General George Brandis has embarked on a surprising mission. Rather than following the antagonistic path of his Coalition predecessors, he is seeking to champion the cause of human rights. His goal is to reshape and lead the debate.

Brandis' intentions have been signalled with two announcements.

He has directed the Australian Law Reform Commission to identify where Commonwealth laws encroach upon traditional rights, freedoms and privileges and to determine whether such encroachments are justified. This audit will show how the extension of laws and regulations into almost every facet of Australian life, unconstrained by anything like a bill of rights, has come at significant cost.

His most prominent announcement was the appointment of Institute of Public Affairs policy analyst Tim Wilson as a ''freedom commissioner'' at the Australian Human Rights Commission. Wilson's brief is unashamedly to promote rights such as freedom of speech, which Brandis argues has been neglected by the commission.

Wilson's appointment should be welcomed. Rather than take the expected approach of starving the commission of funds and driving it into political irrelevancy, Brandis is hoping to redirect it.

The commission has a strong record of combating deep-seated discrimination on the basis of a person's race, sex or age. On the other hand, it has been conspicuously absent from debates on other rights, including freedom of speech, because no commissioner has had responsibility for the area. The commission will be a stronger and more effective body for addressing democratic rights of this kind.

Australian law provides only weak protection for freedom of speech and it shows. The freedom has been eroded by a myriad of state and federal laws. This needs to be tackled and it can only be hoped that this will not be overtaken by the battle over racial vilification and section 18C of the Racial Discrimination Act. That section could sensibly be pared back but repealing it would be excessive and counterproductive.

Brandis' commitment to human rights will be tested in the coming year. Some challenges will stem from Coalition policies, including those on asylum seekers. Governments have become used to trampling upon the rights and freedoms Brandis hopes to protect and so he will quickly run up against the plans of his colleagues. It will be interesting to see whether he has the will and the clout to get his way.

The biggest challenge may arise from Brandis' own portfolio. His responsibilities include unresolved problems stemming from the numerous anti-terrorism laws passed since September 11, 2001.

These problems have been brought to light by several inquiries and reports, most notably by the government's own adviser on such matters. Two reports released this year by Bret Walker, SC, the independent monitor of Australia's anti-terrorism laws, reveal how key parts of these laws are ineffective or unnecessary.

Walker's reports, along with the report of another committee convened by the Council of Australian Governments and led by retired judge Anthony Whealy, QC, identify a long list of laws that need to be fixed. Many trespass on the freedoms Brandis seeks to protect.

The list of changes includes abolishing preventative detention orders, under which a person can be held without charge for up to 14 days. Walker also argues that the Australian Security Intelligence Organisation should no longer have an extraordinary power that enables it to detain in secret for up to a week Australian citizens not suspected of any crime.

Some of these laws have an invidious effect on freedom of speech. One bans any book, film or computer game that praises a terrorist act where this might lead a person, including a person suffering from mental illness, to engage in terrorism. Given that Australia's definition of terrorism encompasses the acts of people such as Nelson Mandela, there is real possibility that a book on his life could be censored.

Another law makes it an offence to disclose ''operational information'' about a person's detention by ASIO within two years of that person being detained. A journalist revealing such information, including the mere fact that someone was detained, can be imprisoned for up to five years. There are no exceptions for fair reporting or if a media story reveals ASIO has misused its powers or mistreated detainees.

A strong commitment to freedom of speech is not consistent with laws of this kind. Brandis has yet to make his position known but the early signs are not promising. When asked for his response to Walker's recommendations, he merely said that he would ''carefully consider'' them but that he otherwise had ''no plans to make material alterations to the anti-terrorism legislation''.

The Attorney-General cannot be a champion of human rights if he ignores prominent areas where such rights have been breached. He has made a positive start by engaging constructively in the debate but the real test will lie with his actions. His commitment to liberty and freedom will be compromised unless he tackles the hard cases, in addition to controversies such as section 18C.

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Indonesia travel warning, citing terrorist threat

The Department of Foreign Affairs has issued a travel warning to Indonesia, including tourist hotspot Bali, because of the high threat of a terrorist attack.

The department's latest travel advice contains a warning that terrorists remain active in the country despite police efforts to stop them.

"Indonesian authorities have warned that extremists may be planning to attack churches in Jakarta, and elsewhere in Indonesia, during the 2014 new year period," the travel advice said.

Earlier this month national police chief Sutarman said there were indications that militants may be assembling bombs to target areas of worship.

"The terrorists have cells everywhere and they are active. We are continuing to pursue them," he told reporters, without giving details of specific targets.

DFAT warns the threat to Australians in Indonesia may reach beyond churches.

"Terrorists have previously attacked or planned to attack places where Westerners gather, including nightclubs, bars, restaurants, international hotels, airports and places of worship in Bali, Jakarta and elsewhere in Indonesia," it said.

There have been several attacks on Western targets in the past decade, including the 2002 Bali bombings which killed 202 people, including 88 Australians.

DFAT also notes that travellers to Indonesia could experience natural disasters like tsunamis, or be the victims of petty crime, drink-spiking and scams.

The advice does not recommend Australians stay away from Indonesia, but it does urge travellers to exercise a high degree of caution in the country.

However, Australians are urged to reconsider the need to travel to some areas including the provinces of Central Sulawesi, Maluku and Papua.

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