Friday, May 30, 2008

Game Over In Power Struggle?

It appears that the way is now clear for the privatization of the electricity industry in New South Wales to go ahead. Treasurer Michael Costa has announced that the government will meet all of the opposition’s demands for the sale to go ahead. That means there is no need for the government to seek the support of the Greens or the independents, but can press ahead with the process. This, despite the fact that the unions and many within the Labor Party are still firmly opposed to the idea.

But is it really all over? Not yet. Chief among the demands made by the opposition is the requirement for the sale to be assessed by the Auditor General in reference to the price, the timing, and the consumer guarantees. Other demands include the preparation of a rural and communities impact statement, independent monitoring of the use of the proceeds, and parliamentary oversight of the clean energy requirements. These add up to a series of hoops that may yet scupper the deal.

If the opposition was bluffing with its demands, then the treasurer has just called them. But the fact is that the Auditor General may well find some deficiency in the sale arrangements and that would be enough for the opposition to withdraw their support. If the assessment does have an unfavourable result, then the real test will be what the opposition decides to do.

Will they oppose it and win the support of the 80 per cent of voters who are against privatization? Or will they continue to support it because they believe in the principle of the privatization if not the detail?

In this case, it aint over until Barry O’Farrel sings.

Thursday, May 29, 2008

Give Fuelwatch A Go

It seems we can’t stop talking about the price of petrol. That’s understandable given that motorists around the country are entitled to feel that we are all being taken for a ride. Now, to add to the confusion, two embarrassing leaks from the government have prompted us all to question whether Fuelwatch is going to be an expensive waste of time which could even cost us all more at the bowser. It’s easy to feel that the whole thing is falling apart before the scheme has even left the starting blocks.

Adding to the conundrum is the fact that these two leaks of confidential documents from within the heart of government put on public display the deep divisions in opinion inside the cabinet. That in itself is a serious concern for the government, not because the differences of opinion exist, but because somebody inside the government is obviously working to undermine their credibility. This has been reported as the end of the Rudd honeymoon, and that is not putting the case too strongly. It is however out of all proportion to suggest that it might be the beginning of the Rudd demise.

Like any significant challenge, it may be the catalyst for the Labor government to lift its game, or it may not. That remains to be seen. What we do know however is that it should be no surprise that there is a range of different views and opinions about fuelwatch inside the government just as there is in the wider community.

While the projected savings of up to 1.9 cents a litre on average may not sound like much, the crucial point is that the A.C.C.C.’s analysis shows that fuelwatch will not cost consumers more, and that the program gives consumers a degree of certainty that does not exist now. I believe that we should not rely on fuelwatch alone, and that other measures need to be considered, including Brendan Nelson’s tax reduction. However, we should give fuelwatch a go and see if it delivers as promised.

And anyway, I would think that even if the savings are miniscule, and all it does is give the oil companies a thorn in the side, then it’s worth doing just for that.

Wednesday, May 28, 2008

Police Call Time For Last Drinks

It’s easy to get the impression that crime is out of control. Whenever an outrageous crime is committed the headlines scream for justice, and there have been some horrendous crimes over the years. Sensationalist reporting might help to sell newspapers, but at the same time that it leaves us all with the idea that crime is escalating out of control. But’s just not true. All of the objective statistics indicate that overall the incidence of crime is declining. But there are some isolated exceptions.

The most notable exception is an increase in violent crime associated with alcohol. It’s a problem not only in News South Wales, but around the nation. That’s why police commissioners from around Australia and New Zealand have joined forces to take a united stand on the issue. Together the police commissioners have proposed a range of measures including lower tax on lower alcohol drinks, community sobering up centres, and the most important proposal, a reduction in trading hours.

In particular, the commissioners questioned the need for 24 hour trading. Research quite clearly links longer trading hours with violence, and plain common sense dictates that if the bars are all shut then that would reduce the opportunity for problems to arise. International comparisons show that in places such as Los Angeles bars close at 2am. Even if Australian bars were to close at 3am, would that really be such an inconvenience?

This is not about stopping people from having a good time. There is ample opportunity to go out on the town and have fun before 3am. I would suggest that the only people likely to complain are also the people likely to be causing trouble in the first place. There may be a few others inconvenienced, but they would be a small minority compared to the ratbag element who seem to delight in running amok.

Let’s face it. We’ve had our chance, we’ve tried 24 hour trading, and there are enough people who cannot be trusted to behave themselves to make the whole thing not worth the trouble. It’s time to close the door at a sensible hour.

Tuesday, May 27, 2008

There Is No Substitute For Experience

Sometimes it’s hard to come to terms with what appears to be a crazy mixed up world. We have all been brought up to believe that it is wrong to kill. Most of us are Christians and have the fifth commandment “Thou Shalt Not Kill” firmly embedded in our minds. Most of us find the idea of war to be abhorrent. But most of us also realise that there have been occasions in history when good people have been unable to prevent war and have been confronted with the stark choice of fighting back or surrendering our freedom.

For that reason it is important to maintain a well trained and professional defence force. The irony, and the moral dilemma, of this is that for an army to be good at what it must do it is necessary to enlist people who are motivated to do what must be done. It means that we will have soldiers who want to fight. It means that you can’t escape the cruel logic that an army must have operational experience to maintain its capabilities. There is no substitute for experience. It also means that we as a society must be prepared to put those people in harm's way.

The report that Australian soldiers are ashamed to wear the uniform because they are not being sent on offensive operations is a sign of the strange times in which we live. Australians don’t want to see body bags coming back from Iraq and Afghanistan, but we also want to have pride in the achievements of our men and women in uniform. It seems that our infantry forces have been trained for war, sent to a war zone, and then told to sit on the sideline, while others do the actual fighting. It’s the kind of paradox which seems to have some of our soldiers asking why they are there at all.

Strangely that’s the same question that many Australians are also asking, but in a totally different context.

Monday, May 26, 2008

Petrol Plan Delays Action Until Next Year

While Brendan Nelson’s proposal to lop 5 cents a litre off the excise on petrol was a simplistic and populist idea, it is looking more and more attractive. As the cost of fuel continues to rise, families are struggling more to make ends meet. Some of them are going broke. In Sydney there has been a 10 per cent increase in the number of bankruptcies, and around 6 per cent in the rest of the state. That’s due to a combination of factors, but the petrol price spiral is a big part of it.

It appears that the government is at least hearing the message with its clarification of the planned tax system review. It has now been confirmed that one of the items the review will consider is the interaction of the GST with fuel excise and other taxes. It’s a strong hint that we might expect to see the GST levied on the excise on fuel will be cut. The excise is 38.14 cents per litre, so that means 3.814 cents off the price of fuel. That’s even less than the cut promised by Brendan Nelson. Even if it comes to pass, it looks like we will have to wait until the review is completed in eighteen months time.

Of course it would be even better if the GST was removed from petrol altogether, saving around 14 cents per litre. Or if the excise was also removed saving a total in excess of 50 cents a litre. But it is extremely unlikely that the government will contemplate giving up that much revenue.

In the mean time, it is expected that the new fuelwatch program will save around an average of 2 cents a litre, and the scrutiny of the Petrol Price Commissioner may prevent some of the more blatant profiteering. While that is obviously a small step in the right direction, it’s easy to see why Brendan Nelson’s approach of simply cutting the tax is so appealing. It could be done today, and it could also be expanded to become a program of progressive excise reductions each year to help cushion the future price increases.

Kevin Rudd has a choice now. He can stick to his guns, and nothing further will be done about petrol prices until the tax review hands in its report at the end of next year, or he can bite the bullet and make a decision now.