Liberal senator James McGrath makes radical call for GST rise, privatisation of 'left-biased' ABC

An incoming Liberal senator has set out a radical libertarian program in his maiden speech, calling for the GST rate to rise to 15 per cent, federal health and education departments to be abolished and for the immediate sell-off of youth radio station Triple J, with the rest of the ABC to also be privatised if it fails to address perceived left-wing bias.

Former Liberal Party deputy director James McGrath also defended people's right to make homophobic comments, as well as "hurtful and bigoted and stupid and dumb things".

Senator McGrath also flagged plans to introduce a private member's bill that would "bring back true voluntary student unionism" as he argued the GST should rise to 15 per cent and include items that are currently excluded, such as fresh food.

He vowed to argue for lower regulation and smaller government as he took aim at the federal health and education departments, which had thousands of staff but had no patients, ran no schools and did not teach students.

"Bureaucracies have become more bloated, more process-driven and more out of touch," he said.

"The states run hospitals and schools - why do we need to be involved? I'm calling for the abolition of the federal departments of health and education, and for universities to be run at a state level."

Turning to the ABC, Senator McGrath said he had grown up listening to the ABC in country Queensland but that the broadcaster had "left people like me and my constituents behind".

"I want to support the ABC. I like the ABC.  "Yet while it continues to represent only inner-city leftist views, and funded by our taxes, it is in danger of losing its social licence to operate.

"I'm calling for a review of the charter of the ABC and if they fail to make inroads to restore balance then the ABC should be sold and replaced by a regional and rural broadcasting service."

Youth broadcaster Triple J should be sold immediately, he added.

Senator McGrath also set out his support for unrestricted freedom of speech, a proposal the government has been grappling with in its now-stalled attempt to repeal section 18C of the Racial Discrimination Act.

"Freedom of speech should never be restricted by government because when freedom of speech is regulated in any manner, speech is no longer free," he said.

"People will say hurtful and bigoted and stupid and dumb things, people will make racist and sexist and homophobic comments. The views are wrong but the right to express them is not.

"If you believe in democracy, you cannot cleanse it of the view you disagree with. The best way to deal with those with whom you disagree is not force them into the dark shadows but let the sun shine, let the disinfectant of light and public scrutiny judge those offensive views."

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Conservative army officer contests his dismissal

One of Australia's highest-profile anti-gay activists has recruited one of the nation's busiest anti-Islam campaigners to help him get his job back as an Army Reserve officer.

Bernard Gaynor, sacked by the army over his online comments about gays, Muslims and women, has hired Sydney lawyer Robert Balzola to represent him in a Federal Court challenge to his sacking, which came into effect on Friday.

Mr Balzola has been involved in the groups "Concerned Citizens of Canberra" and "Concerned Citizens of Bendigo", which have campaigned against mosques being opened in the ACT and the Victorian regional city.

The Sydney lawyer and Liberal Party member has also taken part in similar campaigns in Sydney, including the opposition to an Islamic school in Camden, while Mr Gaynor has lent his support to the latest "Concerned Citizens" campaign in Bendigo.

But the team has lost its first legal gambit against Mr Gaynor's sacking by failing to secure a last-minute injunction on the dismissal.

Federal Court Judge Robert Buchanan has found no need for an emergency injunction and told Mr Gaynor and Mr Balzola to lodge their application to challenge the army's decision in the usual way.

The former intelligence officer, father of five and Iraq veteran said he was keen to pursue the case but would make a final decision after more talks with his legal team.

"The Chief of the Defence Force acted to terminate my commission in a biased manner," Mr Gaynor said.

"There's a whole bunch of reasons why this decision is wrong; what you've got is a black-and white case of political discrimination in the Australian Defence Force.

"This termination has been entirely about my religious beliefs, nothing to do with my performance."

Mr Gaynor declined to discuss how he teamed up with Mr Balzola.

"I'm not discussing anything about my legal team," he said.

"My legal team is advising me on issues I face in relation to my termination."

Mr Balzola declined to be interviewed on Wednesday.

Mr Gaynor's dismissal from his Army Reserve position came after Defence Force Chief General David Hurley questioned his ability to uphold the values of the Australian Army.

"Your public comments demonstrate attitudes that are demeaning and demonstrate intolerance of homosexual persons, transgender persons and women and are contrary to the ... cultural change currently being undertaken within the Army," General Hurley wrote in a minute.

Mr Gaynor's sacking was set in train in December last year, despite the former officer claiming he had been cleared of wrongdoing by two military investigations, and became final at midnight, July 11.

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Carbon tax merely a blip in power price scandal

Prime Minister Tony Abbott is right about one thing: the price of electricity has shot up and is now a lot higher than it should be. It's a scandal, in fact. Trouble is, the carbon tax has played only a small part in that, so getting rid of it won't fix the problem.

Until a rotten system is reformed, the price of electricity will keep rising excessively, so I doubt if many people will notice the blip caused by the removal of the carbon tax. (As for the price of gas, it will at least double within a year or two, as the domestic price rises to meet the international price, making the carbon tax removal almost invisible.)

So Abbott will be in bother if too many voters remember all the things he has said about how much the tax was responsible for the rising cost of living, how much damage the tax was doing to the economy and how much better everything would be once the tax was gone.

He would be wise to change the subject and join the push to reform the electricity pricing arrangements.

A new report by Tony Wood and Lucy Carter, of the Grattan Institute, Fair Pricing for Power, says that over the past five years the average Australian household's electricity bill has risen by 70 per cent to $1660 a year.

And this has been happening while the amount of electricity we use has been falling, not rising. Just why electricity demand has been falling is a story for another day.

The cost of actually generating the power accounts for 30 per cent of that total. The cost of delivering the power from the generator to your home via poles and wires – that is, the electricity transmission and distribution network – accounts for 43 per cent of the total.

That leaves the costs of the electricity retailer – the business you deal with – accounting for 13 per cent of the total bill, with the carbon tax making up 7 per cent and the various measures to encourage energy saving or use of renewables making up the last 7 per cent.

Of these various components, the one that does most to account for the rapid rise in overall bills is the cost of the physical distribution network. Whereas there's fierce competition between the now mainly privately owned power stations, the network businesses – still government-owned in NSW and Queensland, but privatised in Victoria and South Australia – are natural monopolies.

This means the prices the networks are allowed to charge – whether government or privately owned – are regulated by government authorities. And this is the source of the problem. Loopholes in the price regulation regime have made it easy for the network businesses to feather their nest at the expense of you and me.

Why would a government-owned network business want to overcharge? Because their profits are paid to the state Treasury, which needs all the cash it can get. So the NSW and Queensland governments gain by looking the other way while their voters are ripped off. The gouging hasn't been nearly as bad in privatised Victoria, where electricity prices are well below the national average.

An earlier report from the Grattan Institute identified four main faults in the system used to regulate the prices of network businesses: the pricing formula allows excessive rates of return, considering essential monopolies are low risk; government ownership leads to excessive investment in infrastructure and reduced efficiency; reliability standards to prevent blackouts are wastefully high; the pricing formula rewards investment in facilities you don't really need.

The various combined state and federal regulatory bodies have belatedly begun attempting to fix these problems, but they could do a lot more if the politicians prodded them harder.

Meanwhile, the latest Grattan report proposes a solution to one aspect of the over-investment problem: coping with peak demand. The trouble with electricity networks is that, if you want to avoid blackouts, the network has to be powerful enough to cope with the periods when a lot of people are using a lot of electrical appliances at the same time, which these days is a hot afternoon.

Over the course of a year, these occasions are surprisingly few, so you end up having to build a lot of capacity, which is expensive, but then is rarely used. It would make far more sense to encourage people to avoid such extreme peaks in their demand.

The way the pricing system works at present, however, is that far from discouraging people from buying airconditioners and turning them on full blast on very hot afternoons, they're subsidised by those householders who don't.

The simple answer would be for the part of people's bills that relates to their share of network costs to be changed from charging for how much power they use to a capacity-based charge. That is, they pay according to the maximum load they put on the network in peak periods.

The result would be to remove the subsidy between high and low-capacity users, increasing or reducing their bills by up to $150 a year.

The greater benefit would be the price signal sent to high-capacity users to reduce their use of appliances during peak periods and save. As people responded to this incentive, the need to keep adding to the network's capacity would fall, thus reducing the need for higher electricity prices.

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Mentioning the war doesn't discredit government's deft diplomacy

 For the last two weeks, Canberra has been buffeted by Asia's great power politics.

During Japanese Prime Minister Shinzo Abe's visit to Australia last week, Prime Minister Tony Abbott stumbled into North Asia's heated history wars.

Reflecting on Australia's evolving perceptions of Japan, Abbott said that Australians 'admired the skill and the sense of honour' that the Japanese submariners killed in the attack on Sydney in 1942 'brought to their task although we disagreed with what they did.'

Owning to acute Chinese sensitivity to anything resembling amnesia about the horrors of Japan's wartime history, Abbott's comments prompted a biting backlash. The Chinese Foreign Ministry spokesperson even suggested that 'no one, as long as he or she is of conscience, would agree with what the Australian leader has said.'

Meanwhile, in response to a Fairfax report last week which seemed to imply that Foreign Minister Julie Bishop had said that 'Australia will stand up to China,' an editorial in China's nationalistic Global Times labelled Bishop a 'complete fool.'

Notwithstanding the appearance of a succession of diplomatic debacles, Australia's regional relations are still in excellent health.

China might have been outraged by Abbott's praise for Japanese World War II soldiers, but the substance of Abe's visit prompted a relatively muted reaction from Beijing.

In response to news of Australia's deepening defence ties with Japan, China's Foreign Ministry spokesperson noted: 'We hope that cooperation among relevant countries can contribute positively to regional peace and stability, instead of the opposite.'

Canberra's expanding military relationship with Tokyo neither surprises nor disappoints China: It is precisely what Beijing expects given that Japan and Australia are both liberal democratic allies of the United States with a warm and mutually beneficial partnership that spans more than six decades.

Moreover, Australia's embrace of Japan is in step with the region-wide response to Asia's changing balance of power.

China's economic resurgence, rapidly rising defence budget, and aggressive assertions of sovereignty over disputed territory have prompted India, Vietnam, the Philippines and many of Australia's other friends and partners in Asia to develop tighter ties with Japan as a means of hedging against Chinese power.

Of course, Canberra's affection for Tokyo is at odds with feelings in Beijing, where officials warn against the risk posed by Japan's supposed remilitarisation.

However, given that Australia's interests in Asia cannot be reduced to its interests in China, divergence between Beijing and Canberra is to be expected sometimes.

Indeed, with Beijing regularly rankling and intimidating its Asian neighbours, the only way for Australia to support its friends and partners in the region will be to periodically disappoint China.

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