Friday, June 6, 2008

Big Picture Politics Has Pitfalls

Is Kevin Rudd a grand visionary, or a master of the grand gesture? The proposal to build an Asia Pacific Community for future prosperity and security has caught people by surprise, and prompted a barrage of criticism for a range of reasons. Firstly, it appears to have been put together in a hurry, with the man appointed to head the program, Richard Woolcott, informed only hours before the announcement. Foreign governments were apparently given a heads up, but were left in the dark as to any detail. The concern is that it might be because there isn’t any.

Secondly, Kevin Rudd made specific reference to the European Union, which is a structure which has taken 60 odd years to develop after World War Two. Critics, including former Prime Ministers Paul Keating and Bob Hawke, have pointed out that European nations have handed over a chunk of their sovereignty to an over-arching level of government which has its own parliament and makes its own laws. Within the EU it’s as if national borders no longer exist, and a single labour market means workers can move about the continent competing for each other’s jobs. Imagine that happening here and having Australians competing directly for work against Indians on $2 an hour.

Of course, Kevin Rudd never said anything about giving an Asia Pacific Community EU style legislative abilities. But having made the reference, it has become the inevitable comparison. In the haste to make a grand statement prior to his visit to Japan, it appears the announcement has been made without the benefit of any in depth planning or consultation. Judging by what the Prime Minister has actually said, and not by what others have inferred, the idea is a constructive effort to promote regional security and prosperity. The trouble is that without the benefit of detail, others have filled in the blanks and drawn the conclusion that this is ad hoc policy making on the run, and has the potential to become an embarrassment.

It seems Kevin Rudd wants to be seen as a visionary leader. Well, that’s fine, but other visionary leaders of the Labor party such as Gough Whitlam and Paul Keating quickly found that voters get tired of big ideas when the little details of ordinary life are hurting them.

Right now, Australians are wondering about the promise to make life easier for working families who have trouble paying for their petrol and their groceries.

Thursday, June 5, 2008

Hilary’s Hopes Are Finished… For Now

Finally, the fat lady is warming up her vocal chords in the United States presidential race. After a protracted campaign, Barack Obama has the numbers to be the Democratic Party candidate, and Hillary Clinton has announced that her campaign will be suspended from this weekend. Of course, the real race between the two major parties is only just beginning. It also remains to be seen just who will be chosen to run as Obama’s vice presidential candidate. Many have suggested Hilary, others, including former President Jimmy Carter, have said that would be a bad choice.

Clearly, Hilary still has ambitions, but running for Vice President might not only undermine Obama, but her own future prospects for success. It might be better for her own aspirations to bide her time for a future election race. If Obama wins, she would still be a viable chance to succeed him in eight years time. And if the Republican John McCain wins she might even get a shot in four years.

Of course, it’s easy to look at American politics from a distance and feel that it has little relevance for us here on the other side of the world. But that ignores the obvious. From World War Two onwards, American politics and foreign policy has dictated the direction of our own country in almost every way. From “all the way with L.B.J.” right through to George W. Bush’s deputy sheriff in the Pacific, our nation and our way of life have been dominated by American doctrine.

So it makes a difference who sits in the Oval Office, and what their policies are. The relationship between Australia and the United States is one of the things which defines our own identity. It has for decades determined whether or not we go to war, and it continues to be the predominant outside cultural influence upon us. American foreign policy decisions have the effect of shaping the world, whether we like it or not, and Australia has made a point of remaining inside that particular tent.

We may not have a vote in determining the outcome of the Presidential elections, but that outcome will certainly have an impact on how we live.

Wednesday, June 4, 2008

Michael Costa Means Business

The New South Wales State budget has the strange distinction of being for the most part warmly welcomed by business groups, while being the subject of outrage from the unions. That’s not exactly the outcome you would normally expect from a Labor Government. However, in this case, it’s no surprise. The division between the government and the unions was on display for the world to see at the recent ALP state conference.

The budget has clearly kicked important goals with the commitment to expend record amounts on infrastructure, and to reduce the tax burden on business. $58 billion has been earmarked for capital investment, and it’s long overdue. Despite the fact that the government is essentially making up for its past negligence, the move has been welcomed even by the government’s critics. Similarly, the move to reduce payroll tax may not go far enough to redress the imbalance between the states, but it does go some way to providing relief for business and incentive to invest in jobs and is to be applauded. The Treasurer clearly wants to get the message across that New South Wales is open for business.

But this comes at a cost. First, the budget confirms the government’s intention to press ahead with the privatization of the electricity industry, despite the fact that both the general public and the union movement are opposed to it. Secondly, the budget requires the public employees of New South Wales to accept wage and salary increases limited to 2.5%, well below the rate of inflation. This has incensed the unions, and it’s easy to understand why. Nurses, teachers, police officers, and other essential workers are being told that their living standards must decline for the good of the state’s finances.

The truth is that many people employed in these essential roles already cannot afford to live near their work, especially within Sydney. In fact, housing affordability is perhaps the biggest missed opportunity in the budget, which is disappointing because it is also one of the biggest challenges confronting the community.

Cutting people’s income in real terms is only going to make it worse.

Tuesday, June 3, 2008

Homes Out Of Reach For Ordinary Workers

It has always been the conventional wisdom that it is more expensive to live in Sydney than in the rest of Australia. That has been born out once again by research by Bank West which shows that Sydney remains Australia’s most expensive place to live. And it’s getting worse.

The report identifies so called “key workers”, that is people such as nurses, police officers, teachers, paramedics and so on, who can no longer afford to live where they work. Across Australia, wages for key workers have increased by about 31 per cent, while house and unit prices have risen by a dramatic 66 percent. Although other capital cities such as Perth and Canberra have had more dramatic increases, Sydney was already expensive to start with. The report shows that 93 per cent of Sydney’s local government areas are now beyond the reach of key workers.

There’s no simple solution to this, but it is one of the most significant challenges confront all Australian governments, State and Federal, at this time. It’s not just a matter of a few people falling behind in the economy. It’s a matter of the whole community suffering from an increasing inability to both accommodate it’s members, along with an inability to deliver services to where they are needed.

Something somewhere simply doesn’t add up, and it is not sustainable. In the long run, such disparity inevitably leads to social disruption, and the break down of community cohesion. It’s simply un-Australian that ordinary families can no longer aspire to owning a home in a significant and growing number of locations. It’s a trend which cannot continue, but for which there is no easy escape.

Housing prices must fall relative to incomes, but how we get to that result without considerable fallout is the conundrum which currently confounds the experts. But unless our governments do come to grips with this problem the Australian way of life will be profoundly changed.

Monday, June 2, 2008

Iraq: Was It Worth It?

Well it’s over. Australian combat troops have been withdrawn from Iraq. After 5 years and a cost of $2.3 billion the question still remains: has it been worth it?

About 14 000 Australian troops have served in Iraq, 110 will remain in Baghdad guarding the Australian Embassy, and the joint command headquarters is also in Baghdad until it moves to refocus on Afghanistan. Unlike the Americans and British, no Australians have been killed in battle.

There has been some discussion about the policy to keep Australian troops confined to low risk missions, and the feeling that perhaps their standing amongst allies had been diminished as a result. Of course, that ignores the high risk missions carried out by Australian S.A.S. teams, as well as the reality that Baghdad continues to be a dangerous place. If the policy has meant that Australian Mothers and Fathers have been spared the anguish of lost sons and daughters then it has been a good policy.

When Australia went to war in 2003 we were told that it was to disarm Saddam Hussein and make the world a safer place. Critics at the time have largely been proven right, as it turned out that the weapons of mass destruction existed only in the American administration’s imagination, and that the risk of terrorism is now seen by many as greater than it was before. The war has even been blamed for contributing to the high price of oil, which is impacting on us all.

So, was it worth it? For Australia, the benefits include operational experience which adds to the capabilities of our defence forces, along with the strengthening of our strategic alliance with the United States. The negatives are perhaps an increased profile as a terrorism target, and higher petrol prices. The relative merits will be debated for decades, but the most important thing at this time is that Australia’s troops have come home safely from Iraq. That has to be worth more than anything else.