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July 28, 2006
I see that inflation in Australia is edging up again (4% annual rate) to the point where another interest rate rise may be on the cards, with the possibility of a fourth rise latter in the year. If so that increase will hit heavy debt-servicing households hard.
Inflation is being represented as caused by increases in the price of bananas and petrol, and so the government is not responsible. Hence we have blame deflection and political distancing by the Howard government. Isn't there another kind of international dimension working here ----the big resource boom that is confronted by skills shortages and tight labour markets?
Strangely, bananas have been signaled out. Isn't the Howard Government committed to free trade? If so why cannot it import bananas to help reduce the 250% increase in the domestic price of bananas since the crop was destroyed by cyclone Larry earlier in the year? Isn't that refusal to allow bananas to be imported a form of protectionism of Australian agriculture?
Wasn't Australia arguing for reduced protection for agriculture by the EU and Japan at the WTO's Dohra round of negotiations? Does that imply Australia is in favour of open competitive markets? So why does Australia close its markets?
Isn't the Howard Government responsible for that anti-free trade position? So why do we continue to represent the Howard Government as being in favour of trade liberalisation.
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Banana's are a little bit of a special case.
They are incredibly susceptible to disease - as it is a true monoculture - the plant is effectively a clone of the parent stocks, and there is little genetic variation to allow for resistance.
A bit of a worry for one of the worlds staple crops.
I don't know whether the import ban is scientifically based, but if any crop can justify this sort of non-tariff barrier, it is banana's.
Besides, some of the banana growing areas rest on marginal seats....