A great day for the monarchy in Australia



Tony Abbott, the Australian prime minister, has welcomed Prince Harry to Sydney – but apologised that not everyone was pleased to see him.

Mr Abbott was born in Britain [of an Australian mother] and was once head of Australia's monarchist movement.

And addressing Prince Harry on his first visit to Australia, he said: "I regret to say that not every Australian is a monarchist, but today everyone feels like a monarchist."

He added: "You grace us as your family has graced our nation from its beginning. It is quite fitting on a day such as this when we think back over 100 years of the Royal Australian Navy that you are here as the crown is a symbol of continuity, decency, stability in our public life."

Prince Harry received a rapturous welcome in Sydney for his short visit, which included a trip on the harbour to inspect a warship parade. The harbour visit generated much excitement and forced police to remove one woman, Victoria McRae, 20, who ventured onto the harbour on a kayak with a flag that read "I (heart) U Harry".

"He's an eligible bachelor, I thought I was in with a chance," she said.  "I just wanted to see Harry on the boat really, I thought we'd get up close. We got towed away, but it was worth it. We were under the Harbour Bridge and they were worried we were going to get run over."

Mr Abbott was beaming as he blithely ignored warnings to "lock up" his daughters and proudly introduced his wife and two younger daughters to the visiting prince.

Prince Harry then joined Mr Abbott, his wife Margie and two daughters, Frances, 22, and Bridget, 20, for a casual stroll through the waterside gardens of his official residence.

The prince later cheekily warned some well-wishers at the front gate that their new neighbour, Mr Abbott, who was elected last month, may be planning to bring his dogs into new residence.

"What do you think of your new neighbour?" Prince Harry asked. "He has got lots of dogs. They have not arrived yet."

Prince Harry earlier boarded the Australian navy's survey ship HMAS Leeuwin to sail past the Sydney Opera House and inspect a parade of international naval fleets and tall ships on the harbour. The parade marks the centenary of Australian navy's entrance into Sydney harbour.

The Prince was then greeted by thousands of well-wishers and spoke to screaming fans during a stroll along the waterfront.

He had a lengthy chat with a Georgia Marks, 11, who later burst into joyful tears.  "He asked me about the fireworks," she said, referring to an impending fireworks display across the harbour. "He is nice. He talks to everybody."

The Prince's visit has sparked much interest in Australia, despite the public's slight leaning towards becoming a republic. His visit has been short – he leaves Sydney for Perth and then Dubai on Sunday – but generated excitement and roars of applause wherever he was sighted.

"Go, The Ranga," went some cries, using the slang term for redheads.  Others cried "We love you Harry" and "Harry, Harry, Harry!"

Around the harbour, crowds had flocked to watch the naval parade, view the fireworks and try to spot the Prince.

"It's the new game to play on the harbour," reported the Sydney Morning Herald.  "Let's spot Prince Harry. Made easier because Captain Wales is dressed in a white tropical dress uniform of the British Army and a blue Army AirCorp beret. He stands out quite well among all those dark naval uniforms."

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Prince Harry's popularity



There has been huge coverage of Prince Harry's visit to Sydney

PRINCE Harry is arguably the most popular royal in Australia.
We love the fact that despite his position of privilege, he has somehow managed to remain a normal bloke.

He likes to party, he drinks, he dresses up in stupid outfits and every now and then he ditches his clothes for a friendly game of strip poker.

He's one of us.

The 29-year-old will arrive in Sydney today for the International Fleet Review and thousands of Aussies will no doubt wave at him as if he's one of their best mates.

In fact we probably know more about Harry than we do about some of our close friends.

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Incredible workers' compensation claims from the Australian Public Service

A MAN who says his penis and surrounding tissue swelled because his government employer made him sit in a small plane seat is among current and former public servants seeking compensation.
Another woman claimed to the taxpayer-funded insurer Comcare she suffered a psychological injury after she said colleagues laughed when she revealed she had suffered a bout of diarrhoea in the office toilet.

Comcare offered to pay part of another man's $16,000 fitness bill after he said the gym and personal training helped with his workplace psychological injury and his "fear of people and strangers."

The former public servant who claimed his genital condition was caused by being forced to sit for five hours in a small plane seat had his compensation bid rejected.

He appealed to the Administrative Appeals Tribunal with doctors reports showing due to his obesity his "penis became retracted into perineal fat folds" during the flight in March 2010.

The man later developed scrotal cellulitis, a life-threatening condition which required hospitalisation and hyper baric treatment, with the man also claiming compensation for partial deafness caused by antibiotics used during treatment.

A doctor found sitting in a cramped plane seat for five hours "would have contributed" to the development of the condition for a man who was obese.

The Tribunal last month dismissed the appeal, finding the flight did not contribute by "a significant degree" to the man's illness.

In August the tribunal also dismissed an appeal by the female public servant who claimed an "anxiety state" after she told colleagues she had been in the bathroom for 20 minutes with diarrhoea in September 2010.

At the time the workers in her department were only allowed to be absent from their desks without explanation for ten minutes and the woman said her anxiety disorder commenced from her feeling "embarrassed" by a colleague.

After that and a later incident in which her work was questioned, she said she "felt stressed, emotionally drained, angry, (had) difficulty sleeping and increasing headache."

A man who was compensated for his adjustment disorder which was suffered at work in 2007 was offered a free $750 gym membership and $480 worth of personal training support by Comcare.

He appealed to the Tribunal seeking almost $16,000 to refund what he had spent on personal trainers which he claimed helped his psychological injury.

Comcare told the tribunal the man had "exaggerated his sense of isolation and his need for a personal trainer."

The Tribunal agreed Comcare should cover six personal training sessions to introduce the man to the gym, which it agreed Comcare should pay for, but rejected the man's claim for compensation for his entire personal fitness bill.

"We find that it was not medical treatment for the purposes of the Act," the Tribunal said.

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Hypocrisy cry as Barnaby Joyce switches on foreign investment

BARNABY Joyce, who has built his political career opposing foreign investment, is under fire for hypocrisy after giving his blessing to the sale of two of the Northern Territory's best known cattle stations to Indonesia's biggest live cattle importer.

The Agriculture Minister, who two weeks ago asked Australians to "make a big noise" and oppose the Indonesian government's plan to purchase a million hectares of cattle country, said he supported the latest sale after talking to the Northern Territory cattle industry.

The Santori company - a subsidiary of the Indonesian agribusiness Japfa group - is purchasing two large Northern Territory cattle properties, Riveren and Inverway stations.

Mr Joyce said last night he made the decision to support the sale after talking to northern Australian cattlemen.  "They wanted the sale to go forward," he said.

The Deputy Nationals Leader said the purchase of the two cattle stations was a joint venture on lease-hold land, that would kick-start the live cattle trade to Indonesia.

He dismissed the charge of hypocrisy, declaring the Greens wanted to "shut down the trade all together" and Labor had created the slump in cattle exports in the first place. "We are just trying to sweep up the dishes they dropped," he said.

Former agriculture minister Joel Fitzgibbon said it had taken Mr Joyce "all of five minutes to fall into line behind the Liberals".

"This deal is in the national interest and we can be thankful the Nationals are so ineffectual," Mr Fitzgibbon said.

Mr Fitzgibbon expressed doubt about whether the Coalition government would persist with its plan to lower the threshold for foreign purchases of land to be scrutinised by the Foreign Investment Review Board to $15 million, a policy he derided as "silly".

Greens leader Christine Milne said Mr Joyce's decision to back the sale of 5500sq km of prime farmland to the Santori company showed he was willing to talk tough in opposition but "sell the farm" on behalf of his Liberal Coalition partners in government.

"I never thought of Barnaby Joyce as a gymnast, but this stunning backflip has sold out his constituents with a perfect 10," Senator Milne said.

"The Nationals have now adopted the open-slather approach of Labor and Liberal."

Mr Joyce's decision to support the sale is a stark departure from his public call - about two weeks ago, before being appointed to the ministry - for Australians to "make a big noise" and oppose a similar plan from the Indonesian government to buy farmland and raise cattle for the domestic market.

"I cannot possibly see how it is in the national interest, what benefit is it to Australian farmers, to Australian taxpayers, if another entity buys our land to breed their cattle, exports them to their own facilities and pays tax in another country," Mr Joyce said at the time.

The Nationals deputy leader's about-face received a mixed reception from his party colleagues yesterday. Some of them have flagged a tough fight on the potential sale of Australia's largest listed agribusiness, GrainCorp, to US firm Archer Daniels Midland if it is approved by Joe Hockey.

NSW Nationals senator John Williams said Australia should own its own farmland, with the profits going back into regional and rural towns.

"Have the owners of those stations had them on the market for a long time?" Senator Williams said. "Are they desperate to get out? If they can't get a local buyer, then I wouldn't blame them for selling to a foreign buyer. But I like to see Australians own our farmland. I want to see the profits of those farms spent locally in our regional towns."

Queensland LNP MP George Christensen said Mr Joyce was only meeting the demands of industry.

"You have to talk to the local industry, and my understanding is that they are all behind it.

"In that case, as Australia's Agriculture Minister, he is (fulfilling) the wishes of the Australian agricultural industry," he said.

Labor senator Doug Cameron said Mr Joyce's comments were part of a pattern of Coalition MPs retreating from their former positions on a range of issues.

"I think this just demonstrates the flippant approach that has been taken by the Coalition on a whole range of areas," Senator Cameron said.  "It's not just Barnaby Joyce.  "You see this on issues such as the asylum-seekers.  "And you now see it on foreign investment."

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CSG limits to 'cost jobs, lift gas prices'

BUSINESS has warned that the NSW government's move to protect a further one million hectares of prime agricultural land from coal-seam gas extraction risks jobs, plant closures and imposing higher energy costs on households and manufacturers.

Australian Industry Group chief executive Innes Willox warned there was a "real risk" of industrial closures sparked by steeply rising gas prices within a couple of years as he criticised the NSW government for proceeding with "the most restrictive elements of its revamp of coal-seam gas regulation, regardless of the looming and intense gas-supply issues facing NSW".

NSW Resources Minister Brad Hazzard announced that hundreds of horse studs and vineyards would be "off limits" to coal-seam gas extraction activities as he increased to 2.8 million hectares the amount of valuable agricultural land that has been deemed "strategic".

The move increased by one million hectares the amount of land for which CSG companies will be required to have their plans reviewed by a "gateway panel" consisting of six state-appointed groundwater, agricultural and mining experts.

While business and the CSG industry attacked the move as economically damaging, farmers argued prime agricultural land remained under threat.

Premier Barry O'Farrell seized on the dissatisfaction from both sides as evidence that the government had got its regulation right.

"Today we have both farmers and miners criticising the government's moves," Mr O'Farrell said. "It sounds as though we have achieved the balance we want."

Peter Stackhouse's 50ha cattle and vegetable farm on Iron Pot Creek near Kyogle in northern NSW has been included in the dark green section of the new government maps released yesterday, that affords added protections to the most important farming land.

But Mr Stackhouse is not convinced by the new measures and thinks they may be a political smokescreen.

The staunch opponent of CSG extraction questions why the NSW government has earmarked 464 vineyards and 297 horse studs in the Upper Hunter Valley as "off-limits" to all CSG mining, declaring them a "critical industry cluster", but has not gone so far with other farmland.

"It should make no difference if your farm has grapes or horses or cows; it's an injustice to protect some farms and not others," Mr Stackhouse said.

"If these plans are as good as it gets to protect farm land, then this government is falling very short of the mark."

The state's peak business organisation, the NSW Business Chamber, said it had serious concerns that the NSW government's decision would risk the livelihoods of businesses and their employees by ignoring the need for NSW to rapidly develop its own gas industry.

The chamber's chief executive, Stephen Cartwright, said he did not see a plan to secure increased gas supplies for industry and domestic users, which was "absolutely essential" to help moderate price spikes expected in 2016.

"The decision to completely exclude parts of NSW - including 2km zones around residential areas and around critical industry clusters - from gas exploration has put the future of NSW gas-dependent industries such as manufacturing at risk."

Mr Willox said all eastern states faced tight gas supply and steeply rising prices thanks to the imminent start of liquefied natural gas exports, but NSW had the worst problem.

"Shortages and industrial closures are a real risk in the next few years if local and Victorian supply cannot fill the gap left by South Australian gas diverted to export," he said.

Mr Willox said firm regulation of gas production was wise.

The NSW Chief Scientist's recent report highlighted that, while many fears were unfounded, there were genuine environmental issues concerning water that must be managed safely.

The NSW Strategic Regional Land Use Policy went well beyond what was needed by excluding large tracts of the state's best energy resources from development.

The NSW Farmers Association raised concerns over the ability of the government's proposed "gateway process" to protect prime agricultural land from mining.

NSWFA Association president Fiona Simson claimed the panel lacked teeth.

Energy giant AGL backed the assessment of the Ai Group and NSW Business Chamber.

"AGL has consistently raised concerns about the impact of the government's policies on the cost of energy to NSW families and businesses. On face value, the government's announcement will only add upward pressure on gas prices in NSW and exacerbate the gas supply issues facing the state," said AGL managing director Michael Fraser.

Federal Resources Minister Ian Macfarlane said the Coalition was proceeding with plans to work with the NSW government to convene a group of farmers, gas explorers, producers, consumers and relevant stakeholders to address issues relating to the long-term gas supply in NSW.

"An important part of that will be focused on the development of the coal-seam gas industry in a way that will benefit landholders and local communities," he said.

"The regulations for the coal-seam gas industry are a matter for state governments, and the group will work within the rules and regulations that are put in place by the NSW government."

Australian Petroleum Production & Exploration Association chief executive David Byers said the policy announced by the NSW government did not do enough to "proactively support development of the natural gas industry in NSW and does too little to address the state's growing gas needs".

The east coast gas market is undergoing significant transformation, with demand set to triple once three large interstate export projects enter production from late next year.

NSW produces 5 per cent of its own gas supply, with the rest coming from interstate.

Santos east coast chief James Baulderstone said the extended moratorium on NSW CSG exploration would drive up prices.

Mr Baulderstone said Santos would not be affected by the NSW legislation and was happy the state government had agreed to support its Pilliga project and AGL's Gloucester project.

BG Group Australia chairman Catherine Tanna said the decision to extend the NSW ban on CSG exploration increased the perception of risk for the nation.

"If you picked up the newspaper this morning you would have seen enormous risk and it's become more elaborate," Ms Tanna said.

She denied there was a looming shortage of gas in NSW or any other east coast state and accused gas consumers of waging a scare campaign.

"There is gas there if people are willing to pay for it," Ms Tanna said.

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Senators line up with Tony Abbott to axe taxes

Great news!  I don't normally blog on Saturday but I could not resist putting this up.  Gillard will be shirty to see her major "achievement" flushed down the toilet.  With more compromise Gillard might have achieved bipartisanship for her policies.  And that would have produced something more lasting.  But Leftists don't like compromise.  They want it all.  And that generates no compromise from the other side too

Note the addled and hate-filled response of the Greens

TONY Abbott will have the numbers to scrap the carbon and mining taxes from July next year after the Palmer United Party and three crossbench senators confirmed they would back his mandate, eliminating the threat of a double-dissolution election.

As the Prime Minister won support to repeal Labor's carbon pricing regime, he said the Greens' loss of the balance of power in the upper house was a "great political achievement for the Coalition".

The Coalition will have 33 votes in the 76-seat chamber when the make-up of the new Senate begins on July 1. It means Mr Abbott, who has a substantial majority in the House of the Representatives, will need the support of six of the eight crossbench senators to pass his agenda.

The PUP, which has three senators subject to the outcome of an appeal by the Greens in Western Australia, along with the Liberal Democratic Party, Democratic Labour Party and Family First senators confirmed to The Weekend Australian that they would vote to abolish the carbon and mining taxes.

The LDP's incoming senator David Leyonhjelm said: "I guarantee I'll vote in favour of repealing both of those. I'll vote for any reduction in taxes."

Family First's senator-elect Bob Day said: "If the Labor Party has got any sense, it will recognise just what's happened in the last three years on both the mining tax and the carbon tax and vote for the repeal of both. If they don't and Abbott has to wait until July 1, I certainly will be voting for their repeal."

The PUP's West Australian senator-elect, Zhenya Wang, reaffirmed the formal position of Clive Palmer's party to scrap the taxes, saying "the carbon tax is punishing ordinary Australian people".

DLP senator John Madigan said: "Basically, I'm not in favour of the carbon tax."

With the Coalition able to pass its two key election commitments next year, Mr Abbott avoids the prospect of forcing Australians back to the polls for a double-dissolution election.

However, the Coalition is expected to bring on an early vote to repeal the carbon tax, thereby forcing Labor to take a formal position in parliament. Environment Minister Greg Hunt said: "Our focus is on Labor and whether it will listen to the Australian people or ignore the strong message sent by the electorate at the election. No matter who leads Labor, every day they support the carbon tax is another day they support higher electricity prices."

Legislation to axe the carbon tax will be introduced in the first parliamentary sitting, expected in mid-November.

Labor leadership contenders Bill Shorten and Anthony Albanese have said they will not support unwinding the carbon and mining taxes.

Greens leader Christine Milne said Mr Abbott would need to engage in serious negotiations with the crossbench senators.

"I wonder what the rest of Australia thinks about Prime Minister Abbott taking credit for the bizarre make-up of the new Senate," Senator Milne said. "He wants the Senate to wave through his cruel, ideological and secretive agenda, but it simply won't."

Mr Abbott yesterday told 2GB radio that managing the Senate had been a challenge for previous prime ministers.

"While it's not going to be easy and I'm going to have to treat every member of parliament, including every member of the Senate, with respect and courtesy ... I think we will be able to form an effective government in the Senate as well as in the House of Representatives," he said.

He conceded he expected "a few management issues" in negotiating with the new Senate and cautioned Mr Palmer to learn from former NSW independents Rob Oakeshott and Tony Windsor.

"Hopefully people like Clive will have learnt the lesson of the last parliament which is: if you get elected as a conservative and then act like a socialist, well you get punished by the electors and that's as it should be," he said.

A PUP spokesman confirmed it was party policy to scrap both taxes.

Mr Wang told the ABC: "I believe in climate change but I don't believe (the) carbon tax is the right solution. Essentially, the carbon tax is punishing ordinary Australian people. The mining tax is an ill-designed tax. It doesn't work to its original purpose. The big miners do not really pay much at all and I would like to see it gone."

Mr Wang is likely to take up the WA Senate spot after the West Australian Electoral Officer denied Greens senator Scott Ludlam a recount.

The Greens have appealed to Australian Electoral Commissioner Ed Killesteyn for a recount but a decision is yet to be made.

Independent senator Nick Xenophon said he would have a constructive relationship with Mr Abbott and indicated he was open to supporting both the carbon and mining tax repeals.

"I voted against the carbon tax when the government tried to put it in," Senator Xenophon said. "I think it's important that we replace it with something that's effective

"I supported the mining tax, but clearly the model that was in place didn't work. I want to make sure that any replacement encourages small and emerging miners because they provide growth in the industry, in terms of jobs growth."

Mr Abbott faces a more difficult task to introduce his direct action policy, with senators-elect Day and Leyonhjelm ruling out supporting the policy, and senators Madigan and Xenophon expressing significant reservations about the plan.

Mr Day said it was important Labor changed its position to support Mr Abbott's repeal of the carbon tax because the overwhelming evidence showed that taxing carbon dioxide was a futile endeavour.

"It is pointless taxing CO2 to try and reduce emissions, even if you wanted to reduce emissions. Taxing CO2 doesn't do that. Introducing an emission trading scheme doesn't do that," he said.

"The whole thing is just a futile exercise ... the IPCC's predictions have failed spectacularly."

Labor Senate leader Penny Wong said the opposition would be "unwavering" in its scrutiny of all of the Abbott government's policies.

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Labor must suck it up and relent on carbon pricing

By Tim Dunlop, a moderate Leftist, who realizes that if Abbott does not have a mandate, no-one does.  So by blocking Abbott, the ALP could kill off all future claims of a mandate for themselves.  Leftists are not good at thinking ahead, however, so Abbott quite likely will have to go to a double dissolution -- JR

Most talk of a "mandate" in Australian politics is pure nonsense. It is a rhetorical move deployed by parties to justify the concentration of power in their own hands. A party that claims "we won the election therefore we get to do whatever we want" is not citing any sort of constitutional truism: it is strategically deploying a rhetorical trope in order to get its own way.

The concept of a mandate is doubly difficult when the newly elected government has been vague about what exactly they are planning to do on any number of issues. You cannot claim consent - let alone a mandate - for an agenda that you did not make explicit.

Having said that, there is also no doubt that an election victory does give to the winning party or parties the right to govern. As imperfect as the whole system is, a democracy works on the assumption that the winning party has the support of a majority of the population.

But there are complicating factors, and it is worth reminding ourselves of them.

A government must rule for the entire nation. In other words, they must rule for those who didn't vote for them as well as those who did. Yes, democracy is based on the idea of majority rule, but only on the understanding that the interests of the minority are not trampled in the process.

In other words, the system asks that both winners and losers of the democratic competition accept some level of humility. Compromise is built into the fabric of democratic governance and no-one gets all of what they want.

Given this, Labor has to think very seriously about opposing the new government's legislation to repeal a price on carbon (the so-called carbon tax). No matter how short sighted it is to remove this mechanism for controlling our carbon output, no matter how much it hurts to reward the dishonesty of the campaign run by Mr Abbott and sections of the media and the business community in discrediting it and misrepresenting it, there is no doubt that the new PM went to the election promising to repeal it and in winning the election he has the right, in this matter at least, to govern as he sees fit.

Democratic governance is tough, not because it constantly asks us to choose between good and bad options, but because it asks us to choose between competing good options.

In this case, the good options Labor are being asked to choose between are, on the one hand, foiling Mr Abbott's desire to repeal the price on carbon, and on the other, the principle that says the winning party ought to be able to govern as it said it would.

Given this choice, I'm inclined to say that protecting the norms of democratic governance is ultimately more important than taking some sort of symbolic stand against repeal.

I'm sure some will disagree and say that the environment trumps everything, that addressing climate change is the most compelling issue we face, and that you can't practice politics on a dead planet. Fair enough.

But I would say in response that politics is the only way we have of implementing planet-saving policies in the first-place. Every move we make that undermines the legitimacy of the process itself damages the main tool we have to bring about the change we want.

This is a hard and bitter paradox, but it is one I think Labor needs to get its heads around.

Arguing, as Bill Shorten did on Q&A on Monday night, that Labor can oppose repealing the legislation because they have, by virtue of the votes they received, a mandate to do so, is nonsense. Losing an election doesn't give you a "mandate" for anything.

For three long years, Tony Abbott, the power bases in our society that support him, and significant sections of the media sought to delegitimise the Labor government, and in the process they did great damage to our democracy. You only have to look at the poor turnout for the election and the general level of contempt directed at our governing institutions to know this is true.

Once regular democratic governance is discredited like this, it gives legitimacy to those who seek to influence governments outside of our shared institutions, and that is almost invariably a free kick to those already steeped in power and influence.

So this process of denigration is not something Labor should be party to: when conservatives are trashing our democratic institutions, the genuinely progressive position is to advance the conservative case for the preservation and integrity of those institutions.

I realise that this argument will be dismissed as naive by some, as one that amounts to bringing a cucumber to a knife fight, that it simply rewards bad behaviour, and I am sympathetic to those concerns.

But if you want to see what happens to a nation when a beaten minority refuses to bend in the face of all the norms of democratic governance, look no further than the United States. There, a rump of the Republican Party, in the form of its so-called Tea Party members, is currently destroying not just Congress itself but the nation's faith in its ability to effectively govern itself.

The ramifications of that are huge, and we shouldn't let it happen here.

Notice I am not saying Labor should abandon climate mitigation policies - far from it. I am just saying that they have to start from scratch and rebuild support for their plans in the community. That's tough to do, but that's what happens when you waste your time in power fighting stupid leadership battles and lose elections because of it. You have to start again.

Trying to block Mr Abbott's attempt to repeal the carbon price is simply not justified, and Labor should suck it up and let him have his victory.

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Credit controls won’t fix housing

And recent price rises are just catch-up anyway

News that capital city dwelling prices rose to new record highs in September has been accompanied by the usual hand-wringing and warnings of a housing “bubble”.

In fact, recent price increases are far from exceptional from a long-run perspective. The bigger danger is not a house price “bubble”, but that policy makers resort to crude attempts at suppressing demand rather than stimulating housing supply.

Capital city dwelling prices rose 5.5 per cent in the year to September or about 3 per cent in real terms, RP Data-Rismark says. The strongest gains were seen in Sydney, where dwelling prices rose 8 per cent over the same period or about 5.6 per cent in real terms.

While these gains may sound impressive, it is important to put them in longer-run context. Over the past decade, Sydney house prices have risen only 2.5 per cent a year, slightly less than the average rate of inflation.

The decade average conceals considerable shorter-term cyclical variation, but it highlights the fact that we should not read too much into short-term price movements. Annualising monthly or quarterly rates of dwelling price inflation makes for good headlines, but may be misleading about longer-run trends.

Dwelling prices have benefited from recent reductions in official interest rates by the Reserve Bank. Asset prices, including house prices, are one of the key mechanisms through which changes in monetary policy are transmitted to the rest of the economy. Far from being a problem, the responsiveness of dwelling prices to changes in official interest rates provides the central bank with useful leverage over the economy.

US Federal Reserve chairman Ben Bernanke would give his right arm for a housing market as responsive to monetary policy as Australia’s. It is ironic that gains in house prices are seen by many commentators as a constraint on RBA policy rather than evidence that monetary policy is actually working.

The RBA should not conduct monetary policy on the basis of house prices any more than share prices. The historical record of central banks taking an activist approach to asset price cycles is nothing short of disastrous.

It has been suggested that Australia might borrow from the Reserve Bank of New Zealand and resort to macro-prudential regulation to curb highly leveraged lending for housing. This would be a return to the bad old days of quantitative controls on lending that resulted in non-price credit rationing and was particularly harmful to low-income borrowers looking to enter the housing market for the first time.

Housing credit growth in Australia has been on a moderating trend over the past decade and the household debt has stabilised relative to disposable income since the global financial crisis.

Many commentators have singled out the role of investors as a factor driving house prices, including those who may be negatively gearing, foreign investors and, more recently, self-managed super funds.

Investors play a particularly important role in supplying the rental market. The dwelling stock, including rental housing, must ultimately be owned by someone. Reducing incentives for investment in housing will do more to harm housing supply than limit demand. While saving via owner-occupied housing is tax free, this does not mean that housing as such is untaxed. The Centre for International Economics has estimated that 44 per cent of the price of a new home in Sydney reflects the combined effects of explicit and implicit taxes.

The Henry review made clear that reducing incentives for investment in rental housing would lead to severe dislocations.

The National Housing Supply Council said Australia had a national shortage of 228,000 dwellings in 2011 and the demand-supply gap is expected to widen to 663,000 dwellings by 2031. Increases in house prices are being driven by long-run fundamentals, not excessive leverage or “speculation”.

Rather than adopting crude macro-prudential controls, the focus of public policy should be on reducing the tax burden on new housing and freeing up the supply side of the housing market so it can accommodate rising demand without putting upward pressure on prices.

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$400 a year: NSW households set to save on electricity

All remaining controls over electricity and gas prices in NSW should be removed, the state government has been told.

This is because households could be as much as $400 better off a year if they turn to market-based contracts, the Australian Energy Markets Commission said in a report released Thursday.

Like the banking and telecom markets, a handful of players dominate the market. In electricity in NSW, it is just three.

Origin Energy has a dominant 42 per cent, EnergyAustralia 34 per cent and AGL 19 per cent. This leaves independents with just 5 per cent, unlike Victoria where independents now have a 30 per cent share, after it removed all price controls several years ago.

"Around 60 per cent of small NSW electricity consumers and 70 per cent of small natural gas consumers have chosen a competitive offer, and 21 per cent of electricity consumers and 14 per cent of natural gas consumers switched their retailer in 2012 in pursuit of a better deal," the Commission's chairman, Mr John Pierce said.

"In these competitive retail markets, the regulated price is not the best price."

Over the past few years, electricity prices in particular have risen sharply in NSW, largely to fund network upgrades, with the pace of rises expected to slow over the next few years. Victoria removed all price controls some years ago, with South Australia following suit earlier this year after reaching agreement with its main electricity supplier to cut prices by 9 per cent until the end of 2014.

All states have committed to removing all price controls, which leave gas and electricity prices paid by small households beholden to the volatility of energy markets. Despite saying that all price controls could be removed in NSW, the Commission called for ongoing "market monitoring" coupled with the state government retaining the powers to reintroduce price controls if future conditions warrant it.

Like in the banking and telecom sectors, a handful of companies dominate the market, putting them in a position to control the market. In electricity and gas, the three dominant companies are Origin Energy, AGL and EnergyAustralia.

The call to open up the energy market in NSW comes in the wake of aggressive competition between the three majors which has driven down prices in NSW for the time being, amid caution that prices will rise steadily over the next few years as the major's seek to recover margins.

In recent reports, both Origin and AGL complained the level of discounting in the market is not sustainable as they look to raise prices as competitive pressures ease.

Despite claims Victoria is one of the most competitive energy markets globally, earlier this year, its Essential Services Commission warned over the lack of competition in that market.

"Either competition is not effective or retailers are extracting economic rent," the Commissioner, Mr Ron Ben-David said in a little noticed speech, referring to the possibility the retailers are using their market position to distort prices.

"Victoria may have the most competitive market ... but is it efficient?"

Recently, the Queensland government committed to removing electricity price regulation in south-east Queensland by July, 2015 along with the introduction of price monitoring.

“The current role of the Queensland Competition Authority in setting prices will be retained for the Ergon area (of the state’s south-east) while the Government finalises a strategy for introducing competition into regional Queensland,” Queensland Energy Minister Mark McArdle said recently.

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Paid like surgeons: 240k a year Rio Tinto train drivers to be replaced by robots

Train drivers employed by Rio Tinto to haul iron ore across Australia's outback make about the same money as surgeons in the US. It's little wonder the mining company will replace them with robot locomotives.

The 400-plus workers in the remote Pilbara region who earn about $240,000 a year probably are the highest-paid train drivers in the world, according to UK-based transport historian Christian Wolmar. Australia's decade-long mining boom has sucked up skilled workers, raising wages for engineers to drivers at Rio, the second-largest exporter of the mineral, and its closest competitors, Vale and BHP Billiton.

The three companies that control about 59 per cent of the $145 billion-a-year ($155 billion) global iron ore trade are automating to bolster margins and squeeze out extra capacity as they boost supply to a record to feed steel mills in China, the biggest buyer. The push by Rio, which aims to move about 290 million metric tonnes on its rail network by next year, is expected to be the biggest driver for cost cuts in its iron ore unit after currency swings, according to Deutsche Bank AG.

Advanced technology:Rio is aiming to have the first fully-automated long-distance railway in place by 2015.
Rio is aiming to have the first fully-automated long-distance railway in place by 2015. Photo: Erin Jonasson
"All producers are chasing better margins and stronger returns," said Chris Drew, an analyst in Sydney with Royal Bank of Canada. "Rio is ahead of the competition in terms of automation of trucks and trains," Drew said in an interview after touring its ore operations in the mostly arid Pilbara, home to Western Australia's biggest deposits for export.

SEABORNE GLUT

The pace of automation is picking up as the seaborne market is poised for at least four years of gluts. The price of ore, which rose as much as eightfold in the past decade as China added $6.8 trillion to its gross domestic product, will drop to $US80 a tonne in 2015 from about $US130 this week, according to a Goldman Sachs Group Inc. forecast.

Rio, which last year approved spending of $US7.2 billion to expand the iron ore operations, is aiming to have the world's first, fully automated, long-distance and heavy-haul rail system operating in 2015. Its automated rail will have 1,500 kilometres (930 miles) of track, 10,000 wagons and individual train sets 2.3 kilometres long, according to Credit Suisse Group AG. The company is spending $US518 million on the program that was announced last year.

"You need to have quite a significant amount of scale" in fleet and volumes to benefit from automation technology, said Evy Hambro, manager of BlackRock Inc.'s $US7.7 billion World Mining Fund.

Regulators in Canada and the US are reviewing rules for transporting hazardous materials after a runaway train carrying crude oil derailed and exploded on July 6 in Lac-Mégantic, killing 47 people and incinerating 30 buildings. The train was operated by a single engineer, who parked the train for the night and left it unattended.

LASER DETECTORS

Rio's rail, port and truck movements are all watched over from a control center in Perth, that has about 250 controllers working three shifts a day. The rail automation is part of the company's push to use technology to improve productivity and safety and wring out extra capacity from existing assets, Simon Prebble, general manager for Rio's automated trains project, said in an interview yesterday.

The trains have on-board systems that check speed, signals and operate the brake, Prebble said. Rio has installed a new radio-based network to communicate with the trains as well as close-circuit television at every public level crossing, he said. "We also have an obstruction detection system which uses laser scanners to continually look for any obstructions."

EARNINGS DRIVER

The competitiveness of some iron ore mines in the Pilbara as well as some future projects is set to improve with the adoption of the new technologies on trucks and trains, Australia's Bureau of Resources and Energy Economics said yesterday in a report.

Iron ore will remain the dominant earnings driver for BHP and Rio as rising production offsets falling prices, Citigroup said in a September 13 report. The mineral accounted for 78 per cent of Rio's earnings before interest, depreciation and amortisation last year, and 92 per cent for Vale, according to data compiled by Bloomberg. BHP had 43 per cent Ebitda from iron ore in fiscal 2013, the data show.

"It's going to provide a healthy return on investment for Rio," Adrian Wood, a Sydney-based analyst with Macquarie Group said by phone. "They're trying to squeeze out those extra few tonnes a year by automating it."

Rio's Ebitda margin per ton of ore is forecast to drop 43 per cent to $US43.99 in 2015 from $US70.01 in 2013, with BHP's set to fall 42 per cent to $US40.68 and Vale by 61 per cent to $US23.11, according to Goldman.

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Clive Palmer's United Party wins WA Senate spot, Greens devastated

CLIVE Palmer has knocked off a Greens senator to nab a third Senate spot in Western Australia.  The Palmer United Party's candidate Zhenya Wang secured a seat in the upper house after preferences were formally distributed today.  He beat current serving Greens Senator Scott Ludlam to secure the spot.

Mr Palmer's party took the fifth spot in WA, ahead of Labor's Louise Pratt who nabbed the last spot.

Senator Pratt, who had looked like losing her place, said: "The closeness of the result has only strengthened my resolve to help put Labor on track to win the next election."

Senator Ludlam suggested he would call for a recount in the WA results.  "Thanks to everyone who went through this wait with us. checking for recount possibility; meantime your support means a lot," he posted on his Twitter account.

Greens Leader Christine Milne said her colleague was "a terrific senator".

The Greens confirmed they have requested a recount and Senator Milne said WA stood to lose an intelligent and passionate environmental and social justice advocate if the current Senate result stands.

The Coalition's Arthur Sinodinos has held on to his Senate seat, taking the last spot in NSW.

The AEC this morning formalised preferences for the Senate spots in NSW and QLD with former foreign minister Bob Carr also keeping his position.

But it is unclear if Senator Carr will stick around with speculation he will abdicate for either Deb O'Neill or Mike Kelly - who both lost their lower house seats on September 7.

The Liberal Democratic Party's David Leyonhjelm secured the number 5 NSW spot ahead of Senator Sinodinos, in what he himself admits was a fluke because voters associated him with the Liberal party of Tony Abbott.

Senator Sinodinos was widely thought to have been promoted to cabinet in Mr Abbott's government but speculation over whether he would keep his spot saw him overlooked.

In Queensland, as widely anticipated, Clive Palmer's star candidate Glenn Lazarus secured the number 5 Senate position.

Former chief of staff for the National's Barnaby Joyce, Matthew Canavan, took out the last spot.

Mr Palmer said he was on holidays when contacted by News Corp Australia today and said he had "no comment" on his success in the upper house.

Tony Abbott will now face a tedious task of having to negotiate with a slew of minor parties who now have secured spots in the Senate.

Victoria's results were yesterday formerly published by the AEC, with "Kangaroo poo" candidate Ricky Muir confirmed in the number 6 spot.  Mr Muir was a candidate for the Australian Motoring Enthusiasts Party and footage emerged last month of him throwing around what appeared to be Kangaroo poo with his family and laughing.

In South Australia, which was also declared yesterday, Bob Day from the Family First party was elected into the fifth Senate spot.  Nick Xenophon also returned as a Senator for the state along with the Greens Sarah Hanson-Young who was seen as under siege.

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Fairfax axes jobs, shuts magazines

FAIRFAX Media has announced more job cuts and magazine closures amid what it calls "challenged" times for the print media.

Forty-five jobs will be axed and Fairfax's glossy monthly inserts, the(sydney)magazine and the(melbourne)magazine, are to close.

As mooted in The Australian's Media Diary yesterday, Allen Williams, the managing director of Fairfax's Australian publishing, has outlined in an email to staff the further “work being done to transform the Australian Publishing Media (APM) division”.

Of the 45 jobs to go, 25 staff are in the business media division, while the axing of a further 20 jobs across the news media and life media divisions is being blamed on “current revenue challenges”.

The major move is the merging of business teams across Fairfax Media titles - a move that has already caused angst given the different “cultures” of the reporting teams at Fairfax's daily metros and the Australian Financial Review.

The first major example of this was seen yesterday as the Sydney Morning Herald splashed with a story that was also on the front page of the AFR, written by the AFR's Joe Aston.

The integration of business staff across titles accounts for 25 of the redundancies.

Mr Williams said the company had already been consulting “extensively” with business media staff about producing new “efficiencies” in that division.

The closure of the two high-profile monthly insert magazines, the(sydney)magazine and the(melbourne)magazine, finishing with the November 2013 issues, is a surprise given they have attracted lucrative advertising.

But the magazines have thinned and Mr Williams noted in his email: “It's no secret to anyone in the media business that magazines have been an increasingly challenged platform. The sydney/melbourne titles have been great magazines, but it makes commercial sense to make these changes.”

Mr Williams said while the magazine closures would impact 10 employees, these staff would not necessarily be made redundant, with the company to explore “redeployment” opportunities.

Mr Williams said the AFR's quarterly Capital magazine would now become a “run of book quarterly newspaper section”.

He said the company was consulting the journalism union, the Media Entertainment and Arts Alliance about the cuts.

But he appeared to foreshadow more moves ahead. “We anticipate being in a position to communicate our decision about the next steps by October 14,” he said.

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Hawke sets example- dumps political correctness

FORMER Prime Minister Bob Hawke broke up the audience when he cracked a politically incorrect joke at a luncheon commemorating the thirtieth anniversary of Australia II’s historic America’s Cup win Thursday.

That, serendipitously, the crowd was gathered just hours after an American boat sailed by Australian skipper James Spithill, from Sydney’s Pittwater, and manned by predominantly by Australians, had defeated a Kiwi yacht in the latest America’s Cup series, doubtless added to the overall success of the Sydney event.

Hawke, wearing a replica of the eye-hammering Australia jacket he had worn at the Royal Perth Yacht Club’s celebrations in 1983 when he famously declared that “any boss who sacks anyone for not turning up today is a bum” let her rip with a story that would have had the prudes in today’s ALP wincing with feigned offence.

A Frenchman an Englishman and an Australian were slogging their way across the Andes, he said. “It’s about 45 bloody degrees,” he began, after describing how the trio had traversed an scorched alpine desert, “they look down. There’s this most beautiful, pristine lagoon. They go scrambling down ... and dive in ... The natives come and grab ‘em. Take ‘em to the chief. The chief says (and here Hawke slipped into broken English): ‘You have broken the sacred law. This our most sacred site. For this you die. When we kill you we take off skin. Out of skin make canoe. Put canoe on lake. Permanent reminder to all peoples. Never infringe on our most sacred site.’”

Naturally, the chief offers them a last request, and Hawke assumed a Pepe Le Pew accent and an upper class English drawl in which the Frenchman and Englishman asked for knives with which they killed themselves rather than die slowly and painfully.

“Then they go to the Aussie,” Hawke continued. “He says, ‘I want a fork.’ He proceeds to stab himself all over.

“‘There goes your f . . king canoe!’”

Former PM Bob Hawke declares ‘any boss who sacks anyone for not turning up today is a bum’ after Australia won the America’s Cup thirty years ago. Courtesy: Channel Nine
The former prime minister brought the house down but the various commissions appointed to defend the rights and protect Australians from offence, from the Press Council to the Anti-Discrimination bodies could no doubt list the tedious rules he had broken.

He had mocked Africans (though what an African chief was doing near an Andean lake is a mystery), he had ridiculed the French and the British and he had sworn in a public place.

Yet no-one present seemed to think he was a silly old bugger.

Hawke reminded the guests of the enormous boost in national pride the capture of the elusive America’s Cup had triggered, and the shared glow that he had basked in even though Labor had been returned just six months earlier with the greatest number of seats (75) since John Curtin’s 1943 election.

Nothing lifted the nation as much as wresting the Cup after 132 years of US domination, and as Hawke said, most Australians were keener on cricket and various codes of football than sailing.

Hawke’s anecdotes (not the one about the canoe) pointedly reminded the guests what Australia has lost to political correctness over the past thirty years.

The nightmarish web of regulation imposed by the recent Rudd-Gillard-Rudd Labor governments and the attempts to muzzle the media and silence critics with harsh recourse to the “thought” courts, let alone the threats of recrimination made to business figures stifled debate.

Attacking from the Left, the taxpayer-funded ABC, the largest media organisation in Australia, has largely stifled conservative voices and permitted fringe activist groups to assume grossly overblown profiles totally at odds with their minuscule memberships.

The Labor Party itself, which has been captured by extremist activists and branch-stacking factional bosses, is only now making a half-hearted attempt to undergo some long overdue reform and pay lip-service to its shrunken rank-and-file membership.

The robust figures of Hawke’s day, people like former shearer Mick Young for example, have been replaced by pallid backroom assassins who work the numbers like stilettos.

Had any figure from the other side of politics told the same joke as Hawke it would have made front page news and whoever told it would have been publicly castigated with furious demands for apology being made by various self-declared guardians of public morality as well as those who are now paid to protect Australians from themselves.

And that’s before anyone had mentioned his use of the F-word, or the “F” bomb, as some writers described it.

The larrikin spirit, embodied in Hawke and the inspiration for such Aussie classics as Crocodile Dundee, doesn’t burn as brightly today as it did thirty years ago.

To his credit, Hawke insisted his remarks were non-partisan, and they were.

But the killjoys in the modern Labor Party are very political, and I suspect Hawke knows it and is concerned about the effect their political correctness is having on the spirit of the land he loves.

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How animal extremists and officious bureaucrats devastated a family business

Animal activists, with the help of gullible reporters, help to destroy a family business - and those depending on it - with dodgy allegations.  The ABC’s Landline explains:

    PIP COURTNEY, PRESENTER: In November 2011, allegations of animal cruelty were levelled at an abattoir in regional Victoria…

    Authorities quickly shut down the abattoir, sending a ripple effect through the local community, leading to job losses and business closures. But the most serious charges were dropped before the matter ever went to court, raising questions about the tactics of the animal right groups, Animals Australia, and the behaviour of the Victorian Government body responsible for the prosecution, PrimeSafe…

    COLIN GILES, ABATTOIR OWNER:… We’ve been through two years of hell.

    Monday November 21, 2011, dawned like most at LE Giles & Sons Abattoir.

    The abattoir, small by modern standards, processed cattle, sheep, goats and pigs. On that day, it was killing pigs and 60 of them quietly awaited slaughter in the holding pen. Mid-morning a visitor arrived. She gave her name as Kate and was led up to the killing floor.

    JAMES RODEWELL, FORMER ABATTOIR SUPERVISOR: On the way up I had a discussion with her and asked her what she was doing and she said, ‘I’m just taking a few photos for a university project I’m doing.’…

    COLIN GILES: She came in under the guise of being a photography student.

    BRUCE GILES, FORMER ABBATTOIR WORKER: She lied who her proper name and everything. And we had let schools in before.... So we’ve never, ever been shy of showing the place off…

    TIM LEE: This time the Giles family’s open approach to the public proved disastrous. Kate was in fact Sarah Lynch, a well-known animal rights activist… [As] the last few pens of 60 pigs were stunned electronically prior to slaughter, she got the footage she was seeking… Sarah Lynch raced the footage back to Melbourne to Animals Australia, which contacted PrimeSafe… Animals Australia claimed to have evidence of widespread cruelty at Giles Abattoir.

    PrimeSafe then contacted LE Giles & Sons and ordered an immediate halt to all work…

    TIM LEE: Colin Giles alleges they were told by PrimeSafe that unless they complied they faced the possibility of jail… For Terry and Sandra McPhee the closure spelt catastrophe. At Neerim South in the Eastern Ranges they’d built a fledgling, but thriving, enterprise raising prime quality meat goats. ..

    SANDRA MCPHEE: Devastating....  It was coming up to Christmas and we had a lot of Christmas orders ready to go, but we had no abattoir to slaughter the animals for us…

    TIM LEE: The abattoir’s closure had an immediate impact on stock markets the length of Gippsland and beyond… It took a terrible toll on Ray Giles.

    MORRIS GILES: He withdrew into himself. We had trouble getting him out of the house. He just was… just was traumatic, absolutely traumatic to see what it’s done to him. You know he’s, at the moment he’s at the Warringal Hospital undergoing therapy. We don’t know whether he will ever be the man he was.

    Dad had a stroke Christmas Eve, Christmas Day…

    TIM LEE: By now Colin Giles, quality assurance manager James Rodwell and three of the abattoir slaughtermen had been charged with a number of offences under the Prevention of Cruelty to Animals Act…

    In September 2012 the three slaughtermen pleaded guilty to charges that they failed to ensure pigs did not endure: ‘unreasonable pain and suffering’, during slaughter. The judge found that any cruelty was not deliberate and noted the: ‘significant penalties’, the trio had already endured, including the loss of their jobs.

    All three escaped conviction and were each given a twelve-month good behaviour bond.

    NEVILLE GILPIN, FORMER SLAUGHTERMAN: It come down to a financial thing, where my solicitor said it could cost me a fair bit of money to fight this charge and not having a job and a daughter to put through uni I just took the easy way out, yes.

    TIM LEE: However, Colin Giles and James Rodwell were determined to have their day in court.

    But that day never came. The case was due to be heard here at the Morwell Magistrates’ Court on Monday, April 15. But on the Friday the Giles family was told all charges against them had been dropped because the DPI’s lawyers believed there was little chance of a successful prosecution…

    TIM LEE: Funding their legal defence had cost the Giles family more than $150,000 ... and it was pitted against the bottomless resources of the State Solicitor’s Office acting for the Department of Primary Industries.The cost of justice appeared prohibitive, so the family reluctantly accepted the legal truce. But the sudden abandonment of such a high-profile case has only fuelled speculation of gross injustice…

    Sarah Lynch took footage of one pig which escaped from the killing pen and got onto the abattoir floor.

    COLIN GILES: There was four or five blokes along here with knives and pouches and things on, and they’d left a sledgehammer up against the hide puller because they were doing a job and it had jammed or something, and the blokes just grabbed it and - which it says in the regs that, you know, in those sort of circumstances, as a safety thing, blunt trauma can be used… There was no cruelty in it. And that was the first charge that the DPI dropped, was the blunt trauma one…

    TIM LEE: Neville Gilpin alleges that Sarah Lynch caused that pig to escape. He claimed she’d stressed them by being far too close… Animals Australia is unwilling to discuss the case.

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The burning issue of inequity in the Solar Bonus Scheme

The comments below refer to Queensland but the situation is similar in other States

BEWARE of governments bearing subsidies because if you're not getting any of what's on offer, then you're definitely paying for someone else who is.

That's how it works of course. Governments, like Robin Hood, are always redistributing the wealth, collecting taxes and fees here and building schools and roads there.

But sometimes the government's cash grab is so blatant and unfair you wonder why people aren't marching in the streets.

Take the former state Labor government's Solar Bonus Scheme to encourage homeowners to install domestic solar power systems.

The government's carrot was it would let households sell all their excess power back to the grid at 44¢ per kilowatt hour, which was about 10 times more than the cost of coal-fired electricity.

The scheme was so wildly successful Energex has had to spend $167 million buying solar power from homeowners in the 2012-13 financial year, even though it had budgeted for only $7 million.

It's the same story for Ergon, which credited solar-powered households $76 million during the year, compared with just $28 million the year before.

And what's wrong with that you might say? Isn't solar good? Right up there with motherhood? And don't we want more of it for the day we can finally say goodbye to coal-fired power?

Well, yes to all that. But there are some principles of equity here that are being trampled in our rush to go green.

The problem is that the money being paid to all those virtuous households with solar power is coming straight out of the pockets of the state's other, non-solar-power users by way of higher electricity bills.

The huge take-up of home solar system is also creating further expense for the power distribution companies, which have to upgrade their networks to take electricity flows in both directions - another cost that gets passed on to all power users.

All up, the scheme will add about $32 to the average power bill this year, climbing to $67 next year and $276 by 2015-16.

The Newman Government has been trying to reduce this growing imbalance between the solar haves and have-nots by slashing the feed-in tariff from 44¢/kWh to 8¢/kWh as of mid-last year.

But anyone already on the old rate can keep reaping their profits at the higher level until the 20-year scheme runs out in 2028.

The LNP says that even with the new lower rate, the eventual cost to taxpayers will be about $900 million.

No matter how you look at it, this was a remarkably badly conceived idea, which reinforces two points. One is that governments are terrible at thinking much past the three-year political cycle.

When the Bligh government launched the Solar Bonus Scheme in 2008, all the rhetoric was about addressing climate change and helping the local renewable energy industry. There was no discussion about how much it might all one day cost.

As late as September 2011, less than six months before Labor lost office, then energy minister Stephen Robertson was insisting the program "doesn't place upward pressure on electricity prices".

This particular policy also highlights the dangers inherent in governments trying to influence the way markets operate. In this case it encouraged consumers to buy solar systems by offering them a price for their excess energy hundreds of per cent above the going rate.

Not a bad deal for those who could afford the initial cost and it certainly worked. Queensland now has the highest solar take-up rate in the country, with 290,000 households installing panels so far.

Proof indeed, you might argue, that government intervention in the marketplace can work. But at what cost? And even if you think $900 million or so is fair value, why should householders who couldn't afford or weren't able to install solar systems have to foot the bill?

In any event, if solar is such a good idea, householders, in response to ever-increasing power prices, will twig eventually, with or without a government subsidy.

When the Labor government introduced the Solar Bonus Scheme everyone thought it was a good idea, even LNP MPs, then in opposition, who argued the feed-in rate being offered should have been even higher.

But in the end, this really was just a cynical vote-buying scheme that bought the Labor government some green credibility. Not that anyone who managed to climb aboard this particular solar-powered gravy train before it left the station would agree with that proposition.

Let's hope though that they've got the good grace to occasionally say thanks to their non-solar-powered neighbours.

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Tony Abbott's Indonesia visit seals deal over live-cattle trade

TONY Abbott's Jakarta visit has been rewarded with a breakthrough in restoring the live cattle trade, with a special quota for 53,000 additional animals and in-principle resolution of a dispute that was threatening the introduction of a new Indonesian import quota system.

The cattle trade breakthrough was managed by negotiators from the two agriculture ministries on the eve of the Prime Minister's arrival, but his impending visit gave impetus to the resolution.

They agreed to compromise on Indonesia's demand for animal health tracking information, something the Australians had rejected as unacceptable.

That in turn cleared the way for Indonesia to issue a special quota for 53,000 "slaughter-ready" cattle, in addition to the December quarter quota of 46,000 head for fattening in Indonesian feedlots.

The only problem is that Top End pastoralists are unlikely to be in a position to muster the necessary numbers, or the larger sizes wanted by the Indonesians, before the end of the year.

Elders chief executive Malcolm Jackman said numbers of available cattle were well down because of destocking, in response to a poor wet season and adverse trade conditions in Indonesia, and the opening of markets in Vietnam and The Philippines.

"I suspect that 53,000 in three months will be a bit of a struggle but I think that people will get after it pretty rapidly," he said.

However, Australian producers would want to reassure Indonesians they were the first-ranking market.

"It's by far the most natural market -- the market's well-established, the relationships are well-established and because it's so close, it works really well," said Mr Jackman, who was a member of Mr Abbott's heavyweight business mission.

In another step towards stabilising the troubled industry, Mr Abbott yesterday flagged a positive response to Indonesia's plan to invest in 1.5 million hectares of northern cattle land, though the purchases will likely be subject to Foreign Investment Review Board scrutiny.

Mr Abbott was claiming no premature victories on the live trade, which has been reduced by 60 per cent since 2010.

Instead, he was intent on contrasting the Coalition's "open for business/no surprises" approach against the Gillard government's mid-2011 suspension of the live trade, in response to an animal cruelty scandal.

"We can work together -- but it will take some effort, especially after the shock of the former Australian government cancelling the live-cattle export trade in panic at a TV program," he told a business breakfast.  "Nothing like this can ever be allowed to happen again."

However, the Prime Minister provoked anger from animal rights activists with his following observation.  "Last year, I visited abattoirs in Indonesia which were quite comparable to those in Australia and reject any notion that Indonesian standards are lower than Australia's."

Former agriculture minister Joel Fitzgibbon claimed the government was considering winding back the Export Supply Chain Assurance System safeguards put in place after the scandal. "That would be a disaster for the industry and a complete misread of the mood of the broader Australian community, which expects the highest animal welfare standards," Mr Fitzgibbon said.

The new biosecurity standard is within a broader agreement, still to be finalised, to replace Indonesian cattle import quotas, which had gradually choked the trade, with a market price-based "trigger" system.

Indonesian importers and Australian exporters hope the new system will let Indonesian shipments next year reach 500,000 head and build from there towards the 2009-10 peak of 718,074 head.

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A huge Labor Party boondoggle

The Labour Party didn't start this but they had 6 years to get it right

A MEDICAL scheme that was meant to boost the rural workforce has delivered just one new doctor to the bush after nine years.

And doctors receiving a $16,000 taxpayer funded medical school scholarships under another rural workforce scheme are opting to work overseas to avoid their bush practice obligation.

A Grattan Institute paper on rural doctor shortages says its proof that current solutions to the crisis aren’t working.  The Grattan Institute is a Melbourne-based non-aligned public policy think tank.

A government review of health workforce programs says the $13 million a year Medical Rural Bonded Scholarship Scheme that supplies doctors with $16,000 a year scholarships if they work in the bush should be phased out.

Students who get the scholarship are meant to work for up to six years in a rural or remote area when they graduate.  There are over 1200 participants in the scheme but to date fewer than 50 recipients have commenced their return of service period.

“The Department has suggested it is common for participants to make representations seeking a way out of their obligations, which for some may include pursuing employment overseas,” the report said.

The report’s author says the older Bonded Medical Scheme should also be closely monitored.

This scheme, set up by the Howard Government in 2004, allocated 25 per cent of first year university medical places to solving the rural workforce shortage.

Those who accepted the places had to work in the bush once they graduated.

The scheme has over 4500 participants but a recent survey found only one graduate had so far started a return of service obligation in the bush while three others had bought their way of their obligation.

At least one in four participants planned to withdraw from the scheme once they graduated, a recent survey found.

This will mean they have to pay back 75 per cent of the cost of their education but the review says this works out cheaper than paying full fees for a medical degree.

“The unintended consequence of the scheme could be that for a substantial minority of participants it becomes an alternative to a full-fee-paying medical course,” the report said.

“Since the cost of ‘buying out’ represents approximately 75 per cent of the total cost of the medical school placement, it may be perceived by participants as a low cost or interest free loan that can relatively easily be repaid once fully qualified,” the report said.

The Grattan Institute Report says at current rates of improvement it will be 65 years before remote areas of Australia get the same level of GP services those in big cities get today.

A Rural Doctors Association of Australia survey shows some rural residents are waiting six months to see a GP and two in three had to leave their local area to get health treatment.

The Grattan Institute says the solution to the crisis is to allow pharmacists in these areas to write repeat prescriptions for a drug the doctor has already prescribed and deliver vaccinations.

It also suggests producing an army of three-year trained physician assistants who, working under a GP, could order blood tests, X-rays and write prescriptions to ease the rural workforce shortage.

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Flexibility needed to prune public staff costs

Commonwealth bureaucrats must be cheaper, more mobile and easier to sack if the federal government is to achieve its ambitious savings targets, a public sector labour expert says.

Meyer Vandenberg lawyer Jennifer Wyborn says next year's civil service-wide enterprise bargaining round is a chance for the Abbott government to keep a lid on wages growth, achieve productivity gains and curb the bureaucracy's generous redundancy payouts.

Enterprise agreements for the country's 170,000 federal public servants expire on June 30, next year and Ms Wyborn, writing in Fairfax Media's Public Sector Informant, says the talks are a test of resolve for the government.

Unions are likely to demand a move towards ending the pay gaps - of tens of thousands of dollars, in some cases - between public servants working at the same level in different departments.

However, Ms Wyborn says looking at raw wage numbers is a simplistic approach to an increasingly complex internal jobs market in the public service because it "ignores the variety of work performed across the APS [Australian public service]," she writes.

"No two jobs are the same; different work is performed and different skills are needed, even though the positions may be at the same level.

"The system isn't perfect, but it allows agencies to offer wages that are attractive to skilled workers and which, arguably, reflect the market value of their labour."

Ms Wyborn says an "economically responsible" government should "resist populist calls to artificially inflate wages." She writes: "Any increases should be linked to productivity gains and reflect the value of the work performed."

However, after several years of "efficiency dividends" those productivity gains could be hard to come by. "Given that the APS has already been through several efficiency dividend increases in recent years, agencies will need to engage in some serious reflection and analysis to identify productivity gains or efficiencies that could be achieved to justify wage increases, " she says.

It is also time the government critically examined redundancy and flexibility provisions in the public service and it may need to get tough on generous payouts to retrenched public servants, Ms Wyborn says.

"The cost of potential redundancies will not be far from the minds of the government," she says. "The current APS standard provides for up to 48 weeks' pay, depending on age and length of service.

"This is significantly more than the maximum entitlement of 12 weeks in the Fair Work Act, making redundancies in the APS a costly exercise."

The lawyer argues that the controversial "spill and fill" redundancy procedure, whereby a number of workers are asked to apply for a lesser number of jobs, should be formalised.

"The advantage of this is it allows an employer to use a merit-based process for filling a reduced number of positions, and can avoid allegations of discrimination or inequality associated with the 'last on, first off' procedure," she writes.

Ms Wyborn also says departments should have the power to send workers to regional Australia, "where it would be more efficient for those roles to be performed than in metropolitan areas".

Agency bosses should also have the flexibility to allow their staff to move to part-time arrangements.

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Former PM Julia Gillard admits to "murderous rage"

A typically Leftist emotion, though not often admitted publicly.  All politicians get a hard time from opponents but that was "sexism" in her case, she alleges.  She seriously says that she was entitled to "a right to an environment that treats you with respect".  Maybe she should have joined the clergy.  Or does she want to bring back traditional "paternalist" kid-glove treatment for women?  Not very feminist.  She's suffering from a severe case of wanting to have her cake and eat it too, I suspect.  Probably a spoilt little girl

JULIA Gillard has revealed the disbelief, anger and "murderous rage" she felt over the "violent, ugly sexism" that plagued her prime ministership.

And she says it is infantile to say a woman who stands up for herself is starting a gender war.

In her first public appearance since losing the prime ministership to Kevin Rudd in June, Ms Gillard told a public forum in Sydney she was surprised at the depth of abuse levelled at her as Australia's first female prime minister.

"It just amazes me that we can be having this infantile conversation about gender wars, and ... you just feel like saying: 'Well, if it was your daughter and she was putting up with sexist abuse at work, what would you advise her to do?'," Ms Gillard said.

"Because apparently if she complains, she is playing the victim, and playing gender wars, and if she doesn't complain, then she really is a victim."

She said women and girls had "a right to an environment that treats you with respect, treats you as an equal and raising your voice about that isn't starting a war, it isn't playing the victim, it's just asking for what simply is right".

As a guest of author Anne Summers at a public forum at the Sydney Opera House, with former deputy Wayne Swan watching from the crowd, Ms Gillard said she had thought Australia was beyond that kind of thinking.

"And it's kind of depressing that we're not, but at least we know exactly where the balance of it is now and what more remains to be done for women to be truly equal," she told the crowd, adding it would be easier for the country's second woman PM.

Asked how she felt seeing the kinds of sexist cartoons and comments online about her, she said "murderous rage" best described it.

"And so for my personal liberty, it's probably a good thing that I didn't focus on them," she said.

Recent incorrect reporting that she and long-term partner Tim Mathieson had split showed another case point in the "foibles" of the media, she said.

Ms Gillard will soon take up an honorary professorship at Adelaide University and revealed she will also work on global education as a senior fellow at Washington think tank Brookings.

After keeping a low profile since losing her job, apart from writing a column in which she described the gut-wrenching feeling of losing power, she said she and Mr Swan knew she would lose the vote against Kevin Rudd on going into the Caucus vote.

"When I was getting myself together to go out and give my final speech as PM, I certainly did say to myself that I wouldn't give those ... people ... the satisfaction of seeing me shed a tear, I wouldn't do that," she said.

In a subtle dig at Mr Rudd, she said the difference between the two was that she had always worked for Labor.

"So I quickly concluded after the meeting that the best thing I could do is accept that that was the judgment that had been made and to give a gift of silence to the Labor Party during the course of the campaign, to do absolutely nothing," she said.

Ms Gillard, who will front a second Conversations forum in Melbourne on Tuesday, also had some advice for Prime Minister Tony Abbott.

"It is a big step from criticising what you think is wrong to working out and implementing what you think is right," she said.

"On current indications, PM Abbott is intending to take that step slowly."

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Jakarta agrees to talks on boats:  Both sides give ground

Indonesian President Yudhoyono says bilateral talks on asylum seekers are now possible, while Tony Abbott says Australia will consult Indonesia over his government's 'tow-back' policy.

The Indonesian President has made a significant concession to Tony Abbott's demands on asylum seekers in talks in Jakarta, agreeing that Indonesia will need to make direct deals with Australia to solve the people-smuggling problem.

Until now, Indonesia's position has been that any potential policies should be dealt with at the multilateral forum, the Bali Process. Many of Mr Abbott's policies - from boat tow-backs to establishing transit ports for asylum seekers on Indonesian soil - have been considered a threat to Indonesian sovereignty.

But after meeting Mr Abbott late on Monday on his first overseas trip as Prime Minister, President Susilo Bambang Yudhoyono agreed the countries also needed to work one-on-one.  "Indonesia has striven to overcome this issue, but it would be much better if the co-operation was at the bilateral level," he said.

The statement opens the door to Indonesia making more concessions to Australian demands, though Mr Abbott and Dr Yudhoyono left tricky details for later.

Australian Immigration Minister Scott Morrison and his Indonesian counterpart, Djoko Suyanto, will meet to thrash out the details in coming weeks.

The concession comes as a senior adviser to the Indonesian Vice-President says her country does not have the legal rights to stop asylum seeker boats leaving their coast for Australia.

Dewi Fortuna Anwar, adviser to Vice President Boediono, told ABC TV on Monday there was nothing her country could do to stop boats leaving Indonesia if there were no clear violations of the law.   "Indonesia does not really have the legal right to stop boats leaving Indonesia towards Australia," Dr Anwar said.

"In the same way that the Australian government was not able to stop the so-called freedom flotilla from leaving Australian shores with the clear intention of trying to show their support for a separatist movement in Papua."

Dr Anwar added her country did not regard it as a violation of their law when refugees paid people smugglers to take them overseas.  "It depends on the perspective. These people probably don't see themselves as smugglers," she said.  "The fishermen were paid openly by those who wished to go to Australia, and they are pretty open about it."

Dr Anwar also criticised two of the Abbott government's plans to combat the people smuggling trade, one of which is to pay Indonesians to spy on people smugglers, the other to buy boats off Indonesian fisherman.  "I doubt very much that Indonesia would approve any other country spying on Indonesia, regardless what the purpose would be," she said.

"If you buy those leaky boats then the fisherman will have money to buy more boats.  "I'm not sure that will solve the problem."

Mr Abbott also said in the presence of Dr Yudhoyono: "People smuggling is an issue of sovereignty, especially for Australia."

However, he emphasised Australia's "total respect for Indonesia's sovereignty, a total respect for Indonesia's territorial integrity".

Indonesian Foreign Minister Marty Natalegawa, who has made much of the sovereignty issue, later drew attention to these comments, saying he was "reassured".

To sweeten the people-smuggling issue, Mr Abbott announced a $15 million commitment to a new Australian Centre for Indonesia Studies, based at Melbourne's Monash University, to "build trust and understanding" between the two countries.

He also pleased Indonesia by taking an unusually tough line on protesters in Australia agitating for independence for the Indonesian province of West Papua.  "The government of Australia takes a very dim view . . . of anyone seeking to use our country as a platform for grandstanding against Indonesia. We will do everything that we possibly can to discourage this and prevent this," he said.

Being overseas made no difference to Mr Abbott's strong political campaigning against Labor. He apologised in a dinner speech for Australian "aberrations" in "putting sugar on the table for people smugglers" and for cancelling the live-cattle trade.  "Never again should this country take action that jeopardises the food supply of such a friend and partner as Indonesia," he said.

The high-level talks come as a key part of the Abbott government's asylum seeker policy - transfers within 48 hours to offshore detention - has been called into question by medical experts concerned that vital health checks will be sacrificed for political expediency.

At his weekly boats briefing, Mr Morrison was forced to defend the government's policy of removing people to offshore detention within 48 hours.

The meeting between Mr Abbott and Dr Yudhoyono also comes in the shadow of the latest asylum boat tragedy off Java, with 36 people so far confirmed drowned, and the arrival of another vessel at Christmas Island carrying 78 people.

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Friends through ups and downs

The Israeli-Australian relationship thrived despite the fake passport affair and death of Ben Zygier

WHEN Israel's ambassador to Australia, Yuval Rotem, returns home this week he will take a small part of this country with him.   Golden retriever Bailey, probably the most heavily guarded dog in Canberra but far from a guard dog, will still travel with the family.  "It will be her first time in the Holy Land," Rotem says.

Rotem, a career diplomat, finishes his six-year Australian posting on Thursday and has never been short on guards.

The fourth-longest serving head of mission in Canberra, a position he will give up when he leaves, has constantly had an Australian Federal Police car parked outside his home and, like all Israeli ambassadors, has his own bodyguards.

While his colleagues were targeted by botched terrorist attacks across the world, his term here was not punctuated by violence towards him.

When Rotem arrived here, he became the first Israeli ambassador to Australia to bring his children into the Yarralumla compound that has both an embassy and residence. At the time, he was the only ambassador in Yarralumla with children. "They've developed Aussie accents and they're using slang now," he says.

Children soon moved into the US, Irish, Belgian and Polish embassies as well as the European Commission to Australia.

"I think it's a very important sign for this country [Australia]," Rotem says. "The age of ambassadors is an indication of a bigger role Australia plays.

"When a country becomes a place for diplomats before they retire, it shows the place has little to offer but the moment you see a wave of young diplomats - with energy and motivation - you know it has a role to play."

Rotem says Australia's rising importance as a diplomatic destination is because of increased business links between the two countries and not solely because of our place on the G20 or the United Nations Security Council.

He points to Israeli company Elbit Systems, which won a contract worth well over $100 million to modernise the Australian Federal Police's information management system.

Rotem leaves Australia on a high. He came to this country as Labor took power and, while supportive of Israel, Labor was not as good for Israel as the Coalition will be, if first impressions are any indication.

In the words of one writer for The Jerusalem Post, Australia's federal election was a battle of the good friends of Israel versus the very good friends of Israel.

"And, with the victory of Tony Abbott's Liberal-National Coalition over Kevin Rudd's Labor Party, the very good friends won this time around," wrote the Post's Herb Keinon.

According to reports, Abbott plans to make it easier for Israelis to get Australian visas and the new government already went on the record leading up to the election saying it would make it harder for organisations running boycott, divestments and sanctions campaigns against Israel to receive government funding.

In particular, this could mean funding for the University of Sydney's Centre for Peace and Conflict Studies - which has reportedly received more than $150,000 in federal government funds in recent years - is reduced or withdrawn.

Centre director Jake Lynch is concerned he might miss out on funding because of his views.  "I would expect my applications for research grants, on unrelated topics, to be considered on the same basis as those from any other academic," Lynch says.

"I should not be penalised or damaged in my profession simply because my opinions on the Israel-Palestine conflict do not coincide with those of members of the government … I fully understand that I can expect no government funding to publicise the academic boycott of Israel and I have never received, nor spent any."

He says Israel's military checkpoints violate Palestinian human rights and labels Israel's attacks on Gaza as war crimes. The centre he oversees refused Hebrew University of Jerusalem academic Dan Avnon's proposed fellowship with the university under an academic exchange program.

Rotem insists stripping organisations, such as the one run by Lynch, of government funding is about the correct use of public money and not about censorship.

"I also have a problem intellectually with BDS, which creates an unusual marriage between extreme left-wingers and the most extreme muslims who are anti-gay, anti-women and non-inclusive," he says.

The Abbott government's stronger stance in favour of Israel comes after rocky decisions late in Labor's reign.

Almost a year ago, then prime minister Julia Gillard was forced to back down from her personal position to vote against a resolution at the UN giving Palestine observer status. Australia eventually abstained from the vote even though Gillard apparently wanted to side with Israel and the US.

Later, then foreign affairs minister Bob Carr came under fire for saying all Israeli settlements on Palestinian land were illegal.

Not to be forgotten from Rotem's time here are the occasions Israel came under fire, such as the time a Mossad kill squad was found using fake Australian passports to do their dirty work.

Then there was the case of Ben Zygier, an Australian-Israeli citizen known as Prisoner X linked to spy activities who died in custody in Israel in 2010, a tragedy Rotem says "we all need to draw lessons from".

Despite the controversies, there have been highlights, such as when Gillard made Raoul Wallenberg, who saved thousands of Jews in World War II, an honorary Australian citizen.

But Rotem's most memorable moment was in 2008 when Rudd moved a motion to celebrate Israel's 60th anniversary, a moment watched by Holocaust survivors.

Rotem, who will not rule out a political career, will be replaced by Shmuel Ben-Shmuel, who arrives in mid-October.

Ben-Shmuel has served as deputy consul general of the Israeli consulate in New York and has also been head of the World Jewish Affairs and Inter-Religious Affairs Bureau of the Foreign Affairs Ministry.

He served in the 1973 Yom Kippur War and the Lebanese War and joined the Ministry of Foreign Affairs in 1981.

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NSW prisoners to be banned from smoking

Smoking in all NSW prisons is set to be banned within 18 months after the state's prison boss expressed his concern about the health effects lighting up in jails is having on staff and inmates.

But the prison officers union said NSW risks becoming the last state to outlaw cigarettes in jails and has written to the government for funding to help inmates and staff shake the habit.

Britain's Justice Ministry announced plans last week for a pilot scheme to monitor how inmates react to a similar move there. If the trial is successful, the ban would be rolled out across all prisons.

Two NSW prisons, at Lithgow and Cessnock, have run trials banning smoking within cells and other buildings, but inmates and staff can still smoke outdoors.

Corrective Services Commissioner Peter Severin said those trials have worked "but it's only getting us halfway there". He wants the grounds of all NSW jails to be smoke-free environments.  "We are very clearly working on it," Mr Severin said.

"It is clearly a workplace health and safety issue but it is complex. It will be a significant shift: 80 per cent of inmates are smokers and it will be equally as challenging for staff as it is for inmates."

For the first time he has publicly stated a timeframe for such a ban.

"I know that there are issues raised about civil liberties, but for me it's a health issue," he said. "It's about preventing passive smoking for staff and other inmates.

The NSW Cancer Council says the prisoner smoking rate of 80 per cent makes it the highest of any distinct population group in NSW. Currently prisoners are allowed to smoke in their cells or in a designated smoking area outside.

A survey in 2009 however found that a large majority of prisoners who smoke wanted to quit.

In New Zealand it has been a "smooth transition" from 67 per cent of the prison population previously smoking to it being a smoke-free environment.

South Australia and Tasmania have pledged to have smoke-free jails by 2015.

Prison Officers Vocational Branch senior industrial officer Stewart Little said with no fixed date announced by the state government it was likely NSW would become the last jurisdiction to ban smoking in jails.

He said any ban would need a 12-month lead-in period where prisoners were given access to patches and medical treatments.

He wrote to NSW Justice Minister Greg Smith asking for funding for that treatment. "It's a health problem and it should be treated as such and it requires adequate funding and resources," he said.

A spokeswoman for Mr Smith said making all prisons smoke-free is a major step, requiring careful planning.

"Corrective Services are working with staff, unions, Justice Health and other stakeholders," she said.

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