The Good Oil by Rod Brown*
I have been a long time sceptic of many claims emanating from environmental groups. But a colleague, a top Canberra lobbyist, insists that global warming is the next ‘really big’ issue for the Australian Government. He says it’s not an easy issue. Australia is more than 90 per cent dependent on coal fired power generation, and radical measures will affect our economic welfare. Not just coal and gas exports, but if the energy input costs for business – especially areas like alumina and steel production – go up, then we are less competitive on global markets. But he rightly observes that if we’re facing extreme changes in climate then it becomes a public interest issue and people need to know what their grandchildren are in for.
Among other things, there will be the massive economic and social costs that go with unregulated greenhouse gas emissions in developed countries. Congratulations to the Australian businesses (BP, Origin Energy and others) that recently delivered some hard truths to the Prime Minister on global warming.
Australia and the US did not sign the Kyoto Agreement for reasons of particular national circumstances. Despite the fact that we stuck out like the proverbial, it looked like a defensible thing to do at the time. And we said we would try and meet the Kyoto objectives anyway, by limiting greenhouse emissions to 106 per cent of 1990 emissions over 2008-2012. Now even that does not look like enough.
Manufacturing – wake up Australia
The issues are global and the outcomes will be catastrophic according to my friend who argues that the average American puts 20 times the greenhouse gases into the atmosphere compared with the average Chinese, and even more than the average Indian. But what happens when those two countries have 2.5 billion people saying they want to consume and produce at US levels?
Both sides of politics in Australia need to put that into the national equation. If we sidestep the issue by saying what difference can Australia make by comparison with China, think again. China will and does look closely at the examples set by others. And China’s paternalistic government is less captive to conservative business interests than the US Republican Party’s pseudo scientific think tanks.
If you reside in Adelaide, Wollongong, Geelong, Ballarat or Bendigo please read on. On 19 April at the National Press Club, Heather Ridout (Australian Industry Group) released the most extensive study of the future of the manufacturing sector in a decade. It notes that 30,000 manufacturing jobs were lost last year (four per cent of the total), with a similar drop expected this year. The study argues that Australia is the now most open economy in the western world, and manufacturers must become globally engaged, and determine where they fit on the international supply chain.
The report makes 29 recommendations. The most relevant are:
- reduce the company tax rate from 30 per cent to 25 per cent, and review the tax regime on investment
- allow Invest Australia to facilitate investments of multinational enterprises (MNEs) already operating here (very interesting!)
- expand the skilled migration program
- double the funding of the Export Market Development Grant Scheme
- remove tax barriers to offshore expansion by Australian companies (this raised a few eyebrows because it would speed up the offshoring process)
- lift business capability by providing advisers to better link firms to government initiatives (perhaps a return to the much lamented AusIndustry Networks Program?)
- develop regional and industry collaboration networks
- make science/engineering undergraduate programs eligible for concessional HECS arrangements
- introduce a grant scheme to support SMEs to meet the professional costs associated with IP protection, particularly in overseas markets (lost cause?).
Most of this was over the heads of the Press Gallery who showered Ms Ridout with questions on tax reform. Senior officials from the industry department were there in ‘quiet force’. There is corridor talk of a possible major industry statement this year, and the impact of imported cars selling in the Australian market for $10,000. Australian producers now hold less than 40 per cent of the domestic market – compared with 80 per cent in the mid 1980s. Go to www.aigroup.asn.au to dowload a copy of this report.
Transport conference in Canberra
Those looking to get more involved in national issues should attend the 6th Transport Colloquium titled ‘Transport Reform, Competition and the Future’. It is on 14-15 June at Parliament House, and convened by the Bureau of Transport and Regional Economics.
The sessions include:
- regulating transport infrastructure – how light a touch?
- intermodal freight transport – what are the policy obstacles to growth?
- air transport services for regional Australia – what are the issues for government?
- reducing urban congestion – which strategies?
- trends in energy for transport – what are the policy implications?
The keynote speaker is Dr Clifford Winston (Brookings Institution, Washington DC). Registration is $770 or $440 for one day. Phone (02) 6274 8034 or email lisa.sprott@dotars.gov.au
Local Government in gun in NSW
I was also intrigued by a very aggressive passage in the NSW Economic and Financial Statement. In the face of criticism about NSW losing investments to other States, the Premier seems to lay the blame squarely with Local Government (the bold print is in the original document):
‘The State only determines about 400 major development applications annually, while Local Government deals with 125,000 applications. There is considerable concern in the community at the performance of some Councils in this area. Since the new legislation was introduced, the Minister for Planning has received numerous requests to “call in” projects that should properly be handled by local Councils.
‘For this reason, the Government will increase its focus on Local Government performance in planning and development matters. Legislation will be introduced soon to empower the Minister for Planning to more easily oversight the performance of local Councils in these areas. These reforms will include more stringent performance reporting, and greater flexibility for the Minister to intervene in cases of unsatisfactory performance.
‘Existing legislation provides for the Minister for Planning to appoint a planning administrator where Councils do not comply with the provision of the Act. The Government will move to extend this provision to be applicable for unsatisfactory performance.
‘Further, where Councils fail to meet their performance obligations, the Minister will be able to empower Planning Assessment Panels to exercise any of the planning functions of a Council found wanting.’
* Rod Brown’s Canberra based consultancy group, Australian Project Developments Pty Ltd, specialises in industry/regional development and government liaison. For further information telephone (02) 6231 7261 or email apd@orac.net.au
