Friday, December 19, 2008

Merry Christmas

I can’t believe it’s the end of the year already. It sounds clich├ęd, but it’s true. At this time of year it’s fairly normal to both look back and to look ahead. 2008 will go down in history as the year of the Global Financial Crisis, and it’s fair to assume that the fallout from that will continue to have a significant impact on the year to come.

Despite the brave optimism of the Federal Government, nobody seriously believes that it will be possible for Australia to stave off a recession while at the same time avoiding a budget deficit. It might just be possible to do one or the other, but almost certainly not both. In fact, after the recent spate of Federal spending there really isn’t a great deal of surplus left. It won’t take much more to tip the balance.

The important thing is to realize is that deficit is not the dirty word that Peter Costello made it out to be. It certainly would have been if we had been running a deficit during the boom times, but that was not the case. However, times have changed, and like a tropical storm the economic downturn has arrived suddenly and dramatically. It is the right and appropriate thing for the government to do to use a budget deficit to stimulate the economy, and most importantly protect jobs.

Employment is the key. As much as we might be told to go out and spend to keep the economy going, nobody is going to do that if they are worried about their jobs. The lack of spending reduces company revenue, leading to job cuts, leading to further reductions in consumer spending, and the whole thing becomes a vicious circle. Anything the government can do to create employment is not only desirable, it is essential.

So how bad will it get? That’s hard to say, but as long as the government is in a position to continue spending money, Australians will be sheltered from the worst of it. In the meantime, we’ve all earned a break from the doom and gloom, so regardless of the economy it is time to appreciate the good things in our lives and to remember that even if we can’t afford to spend very much, at least we can spend some time with our families and friends, in the best part of the world.

Until next year, Merry Christmas, and look after yourself, but more importantly, let’s remember to look after each other… after all, each other is all we ever really have.

Thursday, December 18, 2008

Piece Of Paper Is Not Enough

It would be far too easy to say that the death of Melissa Cook is a tragedy that should not have happened. As more details of her appalling relationship with her husband have been revealed it is obvious that there were plenty of warning signs to the authorities that the risk was real. John Kudrytch had a documented history of assaulting his wife and, on at least one occasion, threatening her with a gun held at her head. He was known to be a former member of the notorious Commanchero bikie gang. He was known to be a violent man.

The Apprehended Violence Order against him was supposed to protect Melissa. As a legal instrument such orders are useless when those who pose the greatest threat have no trouble treating them with complete disregard. There’s nothing wrong with the principle of an AVO, but in practice the protection they are supposed to provide is undermined by a number of factors. The most crucial is the difficulty in enforcing the order.

In this case, the existence of an AVO was no hindrance at all. John Kudrytch just ignored it. And yet, when Melissa and her family reported breaches to the Police, little if anything was done. It’s not that Police don’t want to help, but the problem is that even when Police can find the time to investigate a complaint about the breach of an AVO, the culprit in many cases simply goes to court, gets listed for a hearing and is released again.

In addition to that, the sheer numbers of AVOs that are issued creates a massive workload, and while many AVOs are issued for very good reason, there are also too many which are not. Too often AVO’s are sought and awarded over relatively trivial matters, or even worse used as a tactic in Family Law proceedings, or to deny a spouse access to a matrimonial home. When Apprehended Violence Orders are issued for relatively trivial matters, it should be no surprise that sometimes breaches of those orders are also treated as less than urgent. It’s a state of affairs which obviously courts the risk of misreading a situation.

Even so, any breach of any AVO should be taken seriously. And when there is clear evidence of the threat of serious violence, then the response must be more robust, both in its swiftness and its effectiveness. That’s not a criticism of the Police, but an observation of the way the system is designed. Sadly, the truth is that when an individual has murderous intent, no piece of paper will stop him. That’s why the piece of paper must be backed by a more workable system.

Wednesday, December 17, 2008

At Last, Some Good News!

I have spent a considerable amount of time in recent years criticizing the New South Wales Government. God knows there has been plenty to criticize. Even now it’s difficult to resist the temptation to begin listing all the failures that continue to plague the state. Even today, it has emerged that rather than increase the number of acute care hospital beds, the government wants to reduce the number of patients admitted. It’s a great idea really, and it will work… eventually enough people will die so that the demand will ease off. But I digress.

Really, I wanted to say something positive. Having spent so much time bagging the government it’s only fair that when they do something right I should mention it. As much as it might seem out of character to praise the government, it’s the least I can do, especially as this decision delivers a measure that I have argued for many times. I refuse to be distracted by the sideshow that has been staged by the Premier trying to tell us all that an increase in rail and bus fares is actually good news and that we should all be pleased as punch.

I mean really, how could we be so ungrateful? The cost of using an overcrowded unreliable public transport system is about to go up, despite the reported study which shows that the capacity of the system to cope with demand is at breaking point, and we are expected to welcome the increase because it’s not as big as it might have been. And we are supposed to feel reassured that the increased fares will go towards the provision of better service, when all of the evidence of the past would suggest that carving pumpkins into carriages would be more plausible!

No, I wouldn’t want to be distracted by such pettiness, because the government has actually done something right. Following much pressure from lobby groups and commentators, the extortionate developer charges and levies are to be cut. Taxes which add almost $100 000 to the cost of a home will be reduced substantially in an effort to kickstart the housing sector and boost the economy of the state.

Although the levies won’t all disappear entirely, and perhaps that would be too much to hope for, it does represent a massive epiphany on the road to Damascus. The net effect of the various changes would see almost $100 000 of levies cut to about $30 000, which is a significant difference in anybody’s language. It is overdue, and it is welcome. And at last, I get to say something nice about the New South Wales government.

I wonder if that will ever happen again…

Tuesday, December 16, 2008

Giving With One Hand…

From January first, the price that pensioners must pay for their prescriptions will increase from $5.00 to $5.30. Although thirty cents doesn’t sound like much, it represents a jump of 6%, well above the inflation rate which has been at 5%. Many pensioners find themselves dependent upon several different medications, in some cases as many as ten. Even if each needs to be renewed only once a month that is still 120 scripts per year. Thankfully, there is a threshold beyond which pensioners will get their medications for free.

But wait a minute! Adding injury to insult, that threshold is set to increase from 58 to 60 prescriptions in the course of a year. Presumably somebody somewhere thought that the pensioners wouldn’t mind if the figure was increased to make it a nice round number. Whatever the reason, it simply adds just a little more to the cost burden to be born by the pensioner. The individual amounts may be small but they add up to a death by a thousand cuts.

It is particularly ironic that this follows not only the debate about the inadequacy of the base rate of the aged pension, but also the dramatic round of cash bonuses delivered this month. While telling us all that the cash bonuses will be good for the economy and that pensioners deserve a bit of a boost, it turns out that pensioners might be better off saving up their bonus money to pay for the increased cost of their medications. It’s a classic example of the government giving with one hand and taking away with the other.

The Federal Government has responded to concerns by pointing to the review of pensions which will be completed in February. The health minister has stated that the review includes an investigation of the effectiveness of benefits such as the pharmaceutical subsidy. So while the price goes up in January, the inference which is encouraged is that relief will be delivered after the review is completed. Presumably, whatever reforms or adjustments are finally adopted will be delivered in July after the next budget.

Once again, the government has deflected concerns about pensioners by indicating that those concerns will be addressed in the outcome of the review. It has actively raised expectations in the community that pensioners will get a better deal. If that is to be genuine, it must include not only pharmaceutical benefits, but the entire range of benefits and concessions available to seniors, and it must leave pensioners tangibly better off than they are now. Anything less would be seen as simply more of the same old double dealing.

The government has been very careful not to make specific promises, but that won’t prevent a massive backlash if the people are left feeling that they have been dudded again.

Monday, December 15, 2008

The Soft Option

In attempting to pursue a sensible course in its white paper on Climate Change, the Australian Government has apparently delivered a compromise position which will please very few. At the centre of the announcement is the setting of an emissions reduction target for 2020, as part of the Carbon Pollution Reduction Scheme which will see a trading system commence in July 2010. While many in industry were calling upon the government to delay the introduction of carbon trading, the government has confirmed the 2010 start date in the interests of providing certainty for the business community. What is less certain is the targets themselves.

Rather than identifying a hard number as the emissions reduction target, the Government has committed to an unconditional reduction of 5%, and a reduction of up to 15% on the condition of a strong global agreement. Even if the rest of the world should miraculously agree to more aggressive cuts, the Australian target is capped at 15%. Again, this cap is supposed to provide certainty, but the fact is that the target has a range of between 5% and 15% and is by definition less than certain.

Despite that, it is likely that business will breathe a sigh of relief as the targets are smaller than anticipated, while the compensation measures remain quite substantial. On the other hand, environmentalists will be bitterly disappointed. Scientific opinion has favoured much deeper cuts ranging from at least 25%, up to 40%, as a minimum to avert damaging climate change. It would seem to be logical to argue that smaller targets are worse than a waste of time because they will cause massive economic disruption without any discernible benefit for the environment. If you believe the scientific advice, there is no soft option.

When the trading scheme commences emissions will be priced at $25 per tonne of carbon dioxide, disappointing those who were pressing for a zero price to provide a soft start. The scheme is expected to generate $12 billion a year, and the bulk of that will be redirected to compensation, not only for families and individuals, but also for industry. The problem with that though is that very little of it will be directed to energy efficiency measures or the development of alternative energy sources. While it is important that pensioners and families are given assistance to accommodate higher electricity prices, there is an element of the dog chasing its own tail here.

If the revenue from what amounts to a new tax is paid out as compensation to those most affected by the imposition of that tax, why impose the tax in the first place? If the problem is the impact of pollution from traditional sources of energy, shouldn’t more of this money go into developing alternatives? Yes, there is investment in renewable energy sources, but the point here is that, like so many other aspects of the plan, the compromise delivers a diluted result. As long as the existing energy sources are propped up with compensation, the incentive to develop alternatives is undermined.

And that’s the big failure from this plan. You will hear a great deal from the government about getting the balance right, but the truth is that this is a compromise which will please no one. Now that might be OK in politics, but when it comes to science, that just doesn’t work.