Thursday, April 24, 2008

2020 Summit

A week ago the Federal Parliament had a summit called 2020. They invited a thousand people from around Australia to attend and discuss the future. If you thought we had a couple of really important issues facing our future as a Planet let alone a country, you wouldn't real know it from the reports coming out. Not to say some ideas put forward, are not good ideas, but they are not novel. One major concern was for Australia to become a republic. Not new, in fact we had a referendum on this only a few years ago. And it was rejected.

Over the last year or two we have been made aware of the growing concern amongst scientists that as a planet we are heading down a dangerous track. Where our norms, in weather which affects so many things, from, Food production, through to sea levels are changing much quicker than we thought they would. We need to approach our responses as if we are on a war footing. We can no longer pretend it is someone/somewhere elses problem. If we have any chance of seeing the next millennium we need to make big changes to the way we live.

See below, for one persons take on the 2020 Summit from Age columnist .


Woof.


The great summit missed the mark on the really important issues.

THE two biggest constraints on Australia's social and economic development between now and 2020 are the dying River Murray (officially solved) and Australia's foreign debt (officially ignored). Neither issue was addressed by the 2020 Summit.

If the summit had been a serious exercise it would have begun with these questions: What are the alternative scenarios for Australia's development, which is the most preferred and what are the barriers for its achievement?

These scenarios might be: low immigration, which would give Australia a better chance to adjust to the environmental issues by muddling through; high immigration, causing major dislocation and requiring high tax levels to replace energy-intensive infrastructure and lifestyles incompatible with a sustainable environment; and, business as usual, justified by our history, which has shown that something always turns up or because global warming will turn out to be a scientific furphy.

Economic scenarios might involve revisiting the protection debate. There are meagre returns from further reductions in protection for manufacturing industry but the finance industry gets fabulous assistance. When push comes to shove, the central banks exist to prop up the financial system when the banks lend to the point of self-destruction in a deregulated financial market. It is happening now. Should the banks be re-regulated? What quid pro quo should the community demand for its largesse? Are financial markets sacred?

The $60 billion Future Fund circulates through the sharemarket, whose prime purpose is to provide liquidity for speculation rather than new capital for new enterprise. Tax concessions to the superannuation industry amounted to $27 billion this year and are rising rapidly. The commissions and fees charged on this financial churning cost billions of dollars. Do wage-earners get real value for money apart from the hope that their retirement coincides with the peak of an asset price bubble rather than the trough?

Are there better ways to allocate the nation's savings to boost real investment and distribute the returns equitably? What about examining the role of the Reserve Bank and central banks in general?

Despite the denigration of Keynesian economics when it serves particular right-wing agendas, the standard central bank response to the first sign of recession is to pump liquidity into the economy. Given the erosion of the power of trade unions, this credit expansion hasn't emerged in the form of wage-push inflation since the early 1980s. This is why the resultant inflation has been expressed through asset price bubbles, which don't show up in inflation as measured. Arguably the social consequences of this inflation are worse — rising wealth differentials and the demise of affordable housing for first-home buyers except on city outskirts.

Given the challenge of global warming and peak oil, debate about tax reform should be focused on what changes are necessary to encourage environment-friendly investment and lifestyles instead of the old debate about the "tax burden", which is completely divorced from what taxes buy.

Measures to stimulate consumption of fossil fuels total more than $4 billion a year. Why should the fringe benefits tax reward those who use their company cars mostly for private use while lesser mortals pay income tax and GST on their public transport fares?

Climate Change Minister Penny Wong squashed a move in the environmental group to recommend that no more coal-fired power stations be built. Why? Already base-load solar photovoltaics and solar thermal and geothermal energy can competitively meeting the full growth in electricity consumption with a $20-$30 a tonne charge on carbon dioxide emissions.

The governance group resurrected the republic debate without touching the central issue of whether the president would be elected or appointed by the parliament. If the president is elected, power will be leached out of the parliament into the president's office, as has occurred in the US, unless there is a constitutional amendment to prevent a hostile Senate blocking supply.

The debate should be about the future of the Westminister system, which is based on the accountability of the executive to the parliament.

The place to begin is the High Court decision in 2005 to approve the Howard government's authority to spend $40 million advertising its WorkChoices legislation. This, even though legislation had not been presented to parliament and was covered by a one-line omnibus appropriation for the Industrial Relations Department of $1.4 billion designed to produce the "outcome" of "higher productivity, higher paid workforces" plus "efficient and effective labour assistance".

The assault on accountability was made possible by the shift from cash accounting, where parliament appropriates money for specific purposes with objective descriptions, to accrual accounting, where appropriations are classified by "outputs", which have become little more than political slogans.

When the budget is brought down in May we will discover whether, thanks to an inept High Court, the rotting door of executive accountability has been kicked completely down or whether the Rudd Government will resist the temptation and restore some credibility to the budget papers.

Kenneth Davidson is a senior columnist.

2 comments:

savannah said...

it makes you wonder why/how some people were elected to office, sugar. i still wonder why it is that we, as you, me, our friends, can sit around and talk and come up with if not solutions, recognition at least, and then attempts at possible scenarios for a solution...boggles the mind what governments consider immediate.

MJ said...

Just dropping by to thank you for dropping by.

*waves to Savannah*