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March 31, 2014
IPCC: Fifth Assessment Report
UN's Intergovernmental Panel on Climate Change (IPCC) Impacts volume of the Fifth Assessment Report ----- Climate Change 2014: Impacts, Adaptation and Vulnerabilities----- is the second of three reports to make up the IPCC Fifth Assessment Report. The first, The Physical Science basis, was released in September 2013. The final part, Mitigation of Climate Change, will be released next month, with the compiled report due in late 2014.
Nearly 500 people have signed off on the wording of the report, including 66 expert authors, 271 officials from 115 countries, and 57 observers. There has been no reverse in the trend of global warming, the warming of our oceans has accelerated, and at lower depths and the emissions from fossil fuels has increased. That means more floods, more droughts and more intense heatwaves.
The Report states that the observed impacts of climate change are "widespread (from the equator to the poles) and consequential (it's already affecting food supply). It is leading to increasing risks for coastal infrastructure and low-lying ecosystems in Australia, threatening “widespread damage towards the upper end of projected sea-level-rise ranges.
In the Conversation professors Colin Butler and Helen Louise Berry, and Emeritus professor Anthony McMichael say that up to now what has been missing from the public debates:
is the threat climate change poses to Earth’s life-support system – from declines in regional food yields, freshwater shortage, damage to settlements from extreme weather events and loss of habitable, especially coastal, land. The list goes on: changes in infectious disease patterns and the mental health consequences of trauma, loss, displacement and resource conflict.
No doubt the denialists and sceptics will try and argue that it would be cheaper to adapt to climate change and pay the costs of climate damages, rather than reduce (or mitigate) human greenhouse gas emissions and switch from fossil fuels to renewable energy.
Since 1950, Australia has warmed by between 0.4C and 0.7C, the sea level rising by around 70mm and a “greater frequency and intensity of droughts and heatwaves”. Australia is facing increasing risks for “coastal infrastructure and low-lying ecosystems” and is set to experience a “significant reduction in agricultural production in the Murray-Darling Basin and far south-eastern and south-western Australia if scenarios of severe drying are realised.
However, increased sea level and increased severity of flooding and storm surges aren’t that big a problem if your cities are located in areas that are elevated above land vulnerable to inundation and wave erosion, and where barriers are erected to counter such events. Likewise bushfires aren’t much of a problem if your house is built in areas away from forests or is highly resistant to catching fire.
Posted by Gary Sauer-Thompson at 11:12 AM | Comments (14) | TrackBack
March 28, 2014
Brandis: people have a right to be bigots
After Monday's cabinet meeting George Brandis’ proposed changes to sections sections 18B, C, D and E of the Racial Discrimination Act, which maim to loosen constraints on racist insults and hate speech, is now a draft exposure bill. This tactic of a stalking horse gives the Abbott Govt wriggle room to make minor concessions.
Brandis’s underlying rationale for the proposed changes is that people have a right to be bigots ie., allow completely unrestrained race-based comments in public discussion, and racial abuse in public places. His classical liberal position---that there should be minimal controls on speech--- is premised on the rights of property. So free speech" is "free print/broadcast", that is, the right of the propertied to issue opinions in a dominated space.
Alan Moir
Simon Rice says that the proposed changes drop the current test for racial vilification – “conduct causing offence, insult, humiliation or intimidation” – and replace it with a test of “conduct that is reasonably likely to vilify [which means incite hatred] or to intimidate”:
Focus switches from the harm that is caused by race-based speech to the conduct that intimidates or incites hatred. Instead of being concerned to prevent harm, the concern is to maintain public order... By addressing only incitement to racial hatred, Brandis is winding back the vilification prohibition to cover a single – and increasingly rare – type of behaviour: the crude, public rantings of a racist.
The third part of the proposed changes is the conduct that is explicitly permitted. Vilifying or intimidating public conduct that is done because of a person’s race is prohibited, but it is allowed when it is done in the course of public discussion. There is no qualification to this exception.
In other words, anything goes in the name of free speech, accurate or not. It's unrestrained biffo all round given that the proposed law does not prohibit race-based conduct that incites, for example, serious contempt or severe ridicule of a person, or revulsion towards them. Nor does it prohibit race-based conduct that causes offence, insult or humiliation.
A good argument can be made that Racial Discrimination Act does needs amendment that renders its focus toward a dominant purpose of humiliation and/or intimidation, and away from insult and/or offence – concepts better left to the realm of defamation.
The draft bill’s exceptions clause, which no longer contains any requirement for reasonableness or even accuracy, is problematic because it implies that the Abbott Government has an indifference or disdain for speech and genuine debate to take place in a respectful manner.
Posted by Gary Sauer-Thompson at 7:15 AM | Comments (3) | TrackBack
March 25, 2014
business-as-usual politics
The Independent Commission Against Corruption (ICAC) inquiry is exposing business-as-usual insider politics.
This is a world of consummate insiders, the greased-palm, cronyist insider politics, the welcoming of lobbyists mostly working for corporations and corrupt conduct. Basically, corruption is an extralegal institution used by interest groups to gain influence over the actions of the bureaucracy to an extent that would not otherwise be possible. An example is the murky world of Wollongong City Council which was open for business.
David Rowe
Business-as-usual politics is structured around a “cutthroat” system in which campaign contributions were a prerequisite for both access to ministers, funding for pet projects, and government contracts. It is a world of greased palms, shady business practices, dirty tricks, insider information and the big spend. The result is one of protected markets, regulatory capture and crony capitalism. Australian politicians tangle with the mighty national mining industry at their peril.
Sometimes the shaping of policy outcomes depends on political influence as in the mainstream media. For instance, Australia's cross-media ownership laws, which at present prohibit a proprietor from owning more than two of three kinds of outlet — print, television and radio — in the same local market, are all that prevents yet further concentration of media ownership.
Communications Minister Malcolm Turnbull has indicated that the Abbott Government favours lifting these restrictions, citing the usual argument that the merging of delivery platforms in the digital age makes distinctions between print and broadcast media obsolete. Future media acquisitions, he says, should be regulated only by the Australian Competition and Consumer Commission, just like any other corporate merger or takeover.
The result, as we all know, is that the media corporation would be most interested in acquiring the assets that would be up for grabs if the cross-media laws are repealed would be News Ltd, not the proprietors of the newer, digital-only sites. News Ltd would move to buy Channel Ten. Many commentators see the foreshadowed law change as a pay-off for News Corp's support of the Coalition in the 2013 election. There are many ways to grease the palms of politicians.
News Corp is not alone. The mining and gas industries, big pharma, the liquor and gambling industries, the insurance companies, banks, the media and big retailers represent a formidable set of vested interests and they have shown how they can bend parliamentary decision-making to their liking—and even remove politicians who stand in their way.
In this world personal welfare is bad, but corporate welfare is good.
Posted by Gary Sauer-Thompson at 2:16 PM | Comments (2) | TrackBack
March 24, 2014
SA Labor hangs on
The Weatherill Labor Government has been returned to power for another 4 years with the help of Geoff Brock, the Independent of Frome, to support a minority government. Bob Such, the other Independent is on sick leave. Weatherill's victory was mostly unexpected, and it was generally seen as unlikely by the savvy political commentators who have inside information.
SA Labor will serve another 4 year term in Government. However, Labor is clinging to the barest of majorities, with the constant danger of being brought down by a by-election defeat or the defection of any member who might happen to feel aggrieved over a policy dispute or demotion.
Part of the price for Brock's support is a deal to transform Port Pirie’s ageing smelter into an “advanced poly-metallic processing and recovery facility”. Brock is also to become the Minister for regional development and local government relations.
The Liberal Party and conservatives are saying that Weatherill’s government is an illegitimate, that it doesn’t have a mandate to govern and that the Independents are turncoats. The Independents are are turncoats because these are really Liberal electorates. They are calling for fresh election. It's a very familiar set of talking points from the three years of this from 2010-2013 at the federal level.
Labor is in a difficult position. It needs to reboot the state’s economic situation. On the one hand it the ALP is committed to keeping up its steady stream of state-driven infrastructure building (the politics of stimulus), whilst on the other hand it is committed to reducing the state's expenditure given the decline in GST revenue by around $308 million.
Posted by Gary Sauer-Thompson at 1:33 PM | Comments (6) | TrackBack
March 20, 2014
the return of the Rum Corps
So we have Australian Water Holdings (AWH) donating money to the Liberal Party on multiple occasions, and charging some of these donations back to the publicly owned Sydney Water. AWH systematically overcharged Sydney Water (i.e. the taxpayers who own it) millions of dollars over the years. So this greasing the palm is a form of corruption
David Rowe
The Liberal Party is now a part of the political corruption. AWH was seeking a public-private partnership (PPP) with the NSW Government in which AWH would effectively take over the utility's monopoly services and cash flows from the state-owned utility Sydney Water monopoly services and cash flows from northwest Sydney. It is alleged that federal assistant treasurer, Arthur Sinodinos, who was employed in 2008 as an AWH director and its deputy chairman, stood to receive a $20m bonus. His remit was to open doors to senior Liberal identities once it became clear the party was going to win the 2011 NSW election.
Though the Liberal Ministers come out in force to defend Sinodinos you do gain the impression that many politicians use their time in government to enrich themselves by acting on behalf of corporations furthering their self interest.
You can see this with way that Sinodinos, who was previously employed by both the National Australia Bank and investment bank Goldman Sachs JBWere – in addition to his work with Australian Water Holdings, acted to propose the wind-back of consumer protection laws for financial advisers.
The proposed changes will allow financial advisers to provide advice that's in their own best interest, rather than the client's. The big winners from the proposed regulatory changes will be the banks as they will be able to, via commissions, to once again use financial planners like mortgage brokers flogging investment products instead of loans.
The Liberal Party is just too keen to govern for the interests of Big Mining and the Big Banks who never spend much time never spending much time to think about, or be concerned with, the lives, the jobs, and the faces underlying the employment numbers. Finance capital doesn't really care about loans that are hard to get, businesses that aren’t investing, kids shacking up with their families, or people dropping out of the labor force because they can’t find jobs. What Finance capital cares about is the federal government doing what is in the interests of Finance Capital.
Posted by Gary Sauer-Thompson at 8:09 AM | Comments (7) | TrackBack
March 18, 2014
scaling up
It appears that over the past decade Santos has decided to transform itself from a non-controversial domestic gas supplier into a global energy player focusing upon the high risk “unconventional gas” reserves unlocked through the highly controversial extraction process called “fracking”.
Santos is constructing a massive gas processing and export facility on Curtis Island near Gladstone in central Queensland and it needs a reliable, long-term sources of gas in place to supply both its domestic customers and its prospective international customers. It's in a pickle as Santos, in conjunction with its partners in the GLNG consortia, has signed onto contracts and invested billions of dollars to supply huge quantities of gas overseas, before it had confirmed it could access that amount of gas. It is struggling to find the additional supplies of gas needed. Hence the O’Farrell Government in NSW fast tracking the approval process for Coal Seam Gas mining.
The fossil fuel industry spin is that: that an expansion of CSG will create a large number of jobs; that without a big increase in CSG extraction, gas prices will rise dramatically; and that an expansion of CSG will reduce Australia’s greenhouse gas emissions. The spin downplays the risks to human and environmental health when mining in prime agricultural land. It is spin because it is close to myth making.
For example the claim that without a big increase in CSG extraction, gas prices will rise dramatically is misleading because, though gas prices in eastern Australia are going to rise substantially, this is due to an increase in demand in the world gas market. Australia's low domestic gas prices will rise (triple) because Australian gas producers will have the option to sell to the Japanese who are willing to pay $15 per gigajoule, instead of the domestic price of $3 to $4 per gigajoule.
At the moment Santo's search for reliable, long-term sources of gas involves coal seam gas in NSW with its risk of contamination of aquifers caused by water leaking from a retaining pond, with lead, aluminium, arsenic, barium, boron, nickel and uranium. This recently happened in the Pilliga Forest, near Narrabri, in the north west of the state of New South Wales.
The biggest concern to human health is he biggest risk to human health was from wastewater.Wastewater is water extracted from the coal seam that has returned to the surface and contains fracking and drilling chemicals among other materials. The water is stored in ponds but leaks and spills can occur and there are concerns this can contaminate drinking water.
So we have increasing tensions between energy and water. There is competition over water between different industries (agriculture and municipal water) and the prospect of tougher regulations on use of water. The actual volume of water recycling happening in fracking fields is relatively low.
Posted by Gary Sauer-Thompson at 8:33 AM | Comments (1) | TrackBack
March 17, 2014
SA: its early days but...
If South Australia does buck the political cycle, and a minority Weatherall Labor Government is able to hang onto power with support from the two Independents, then it and the Independents will be under constant attack from the tribal conservatives in Canberra and their partisan supporters in Big Business and the Big Media.
David Rowe
It's still early days, yet since the large proportion of the pre-polling, absentees and postal votes still need to be counted and this will affect the close margins in the contested seats. But the conservative attack line is currently being put into play.
The Greens have a low profile in South Australia so the bog standard conservative demonizing---ie; "bashing the anti-business Greens"--- won't cut it in SA. The immediate conservative attack line is that it is the duty of the two Independents (Such and Brock) to support the Liberal Party to gain power it rightly deserves. The reasoning is that the Independent's electorates are really Liberal ones, the Liberal party won the majority vote, and the SA electorate clearly voted for change. Any other option is unjust and anti-democratic.
Well, the two Independents campaigned as independents and they have been elected as independents and that indicates a clear fissure in the two party system. So the conservative strategy is put back them in their box by using political language that encourages black and white division (goodies and baddies) hate and resentment towards the baddies.
The next line of attack, if the Weatherall Government is returned to power, will be the political spin from the Abbott Government and the Murdoch media that South Australia's economic problems are all due to the 12 years of Labor profligacy, capped off by big-spending. It was, and is, a wasteful and profligate administration. This hides the real problem hat if we are to have decent public services we need a tax base to support them.
In this context the Liberal approach---ie., a return to small government and low taxes--- means that in some areas, such as better public schools and public transport, we will just go without. It also means no government intervention to help building our knowledge-based industries.
Posted by Gary Sauer-Thompson at 10:29 AM | Comments (1) | TrackBack
March 15, 2014
SA State election 2014
The mainstream media says that it is foregone conclusion. After 12 years of a Labor Government voters in SA want change and a new majority Liberal Govt. With Tasmania going Liberal it will be Liberal Governments everywhere in the Australian federation except in the ACT. Public polling indicates that the Liberals will win the election in SA. So this election is done and dusted.
Matt Golding
In digging a bit deeper we find that what is certain is that Labor will lose some of its 11 marginal seats that it managed to sandbag in the last election in 2010 and retain by less than 5%. The key question is how many marginal seats will it lose, given that the Liberals are expected to win Mount Gambier from independent Don Pegler. A net loss of 3-5 Labor seats to the Liberals would lead to a hung parliament. If the Liberals win 6 seats they will be able to form government in their own right.
Labor's primary vote is low---it's around 37% in metropolitan Adelaide, down from 43% in 2010. As always it needs Green preferences to survive. The Canberra Press Gallery narrative is that the swing to the Liberals appears to be higher in Adelaide, giving the Liberal party a good chances of cleaning out some Labor's marginals with a 2PP that otherwise would probably not be enough. What is interesting is how the ALP in SA is not facing a Tasmanian style wipeout even after 12 years in power.
With Newspoll indicating a late swing to the ALP, we are probably heading for a close result and, possibly, a hung Parliament.The Liberals will concentrate on Tasmania as they can write their "Greens are finished" rhetoric, and that Labor needs to burn every connection to the anti-business, anti-reason Greens, who are dreamers not doers.
The Weatherall Labor Government has defended its economic interventionist in opposition to the Marshall Liberal Party's free market economics of small government + low taxes, which implies a radical program of public sector cuts. Who ever wins, the new government will have to face the consequences of the collapse of the Australian automotive industry, on-going de-industrialization, the end of the low-cost model of South Australian economic development, high unemployment and the Olympic Dam project staying on the back burner.
That history, and the fear of an economy in decline and the return of the spectre of a ''rust-belt'' state, means that developing a new growth strategy is a policy imperative. Although how to do this is a key issue facing SA, unsurprisingly, this was not a main issue in the election campaign, given the high Australian dollar and the low cost manufacturing in Asia. However, the pathway is clear--SA must develop a knowledge based economy:
A smart growth strategy is needed in Australia, one that better harnesses the very considerable talents available in our universities and creates new and very agile institutions capable of driving successful knowledge transfer, innovation and commercialisation.Researchers working with industry in both advancing and applying knowledge are easier said than done. We underinvest in this and urgently need to create a network of industry innovation centres to fill the gap.
How will this happen in Adelaide? What are the possibilities?
The politicians didn't say that much during the election campaign. Neither did the Canberra Media Gallery. The latter see that as policy and they are more interested in the details of horse race politics. So all we have are gestures about high tech manufacturing, food exports, branding, bio-tech innovation and opportunities for universities. These gestures are summed up by 'smart city'.
Update
It was not a night of celebration for the Liberals in South Australia as they'd expected, despite their win of about 52.5-47.5 on two-party preferred vote. The public voted Liberal but they are not getting a Liberal government. Just like the last election in 2010. The problem with the disconnect between the popular vote and the seats is that the Liberals have consistently massive majorities in rural seats and they have lost seats to Independents.
The Liberals needed six seats to win government, and they only clearly won two from Labor (Bright and Hartley) and one from an independent (Mount Gambier). However, it does look as if late-count rehearsals will add Mitchell to that list.
Though Labor can yet get to a majority if they can hold on to Mitchell, that is unlikely. The most likely result at this stage appears to be a hung parliament, and it will be the two returned independents, Geoff Brock in Frome and Bob Such in Fisher, who will decide the issue.
Posted by Gary Sauer-Thompson at 11:14 AM | Comments (14) | TrackBack
March 13, 2014
Ken Henry speaks
Ken Henry, the ex-Secretary of the Treasury says on the 7.30 Report that that Australia cannot afford new social policies without tax reform and predicted the GST will have to rise to tackle structural holes in the budget:
We cannot afford new social policies with the current revenue base. We can't. If you look at the circumstances that the Commonwealth was in after the last big tax reform package - and I'm really talking about the implementation of the GST back now in 2000-2001. At that time in 2000-2001, with the GST implemented and all the other bits of the package implemented, the Commonwealth budget revenue was 26 per cent of gross domestic product. That's how much the Commonwealth raised in revenue. Today, that's down at 23 per cent.Three full percentage points of GDP lower - that's in the year 2012-2013, the last concluded fiscal year, right? Three percentage points of GDP.
David Rowe
Henry continues:
Now you probably know that the projected budget deficit of the Commonwealth in 2013-2014 is, guess what: three percentage points of GDP, right? And which is another way of saying if we had the same revenue collections today as we had in 2000-2001, guess what: there would be no budget deficit at the Commonwealth level, but we don't. And instead what we have is new social programs particularly, but spending programs generally being added on to a revenue base that we know is declining, has declined quite considerably.
It is clear in retrospect that the tax cuts and increases in family payments that were provided in the early part of this century, particularly in those years from 2004 through to 2007, 2008, have put very considerable pressure on the budget.
Henry adds:
But if you ask me the question: do we have the capacity to finance new spending without new sources of revenue, the answer is no. if the present revenue system is not capable of funding those programs, are there alternative government spending programs that could be cut in order to make way for the new programs? That's a very big question, and I have serious doubts about that, by the way. Or - and if that's not the case, then are there alternative revenue sources that one could turn to in order to finance those programs?
Abbott's response is that is that Australia's policy direction changed very substantially back in September of last year. Australia went from being a high-tax, high-regulating government to being a low-tax, deregulating government. Cutting taxes and regulation for business will restore economic growth.
No quite. The Abbott government is working in the short term interests of business not the long term interests of the society. Cutting taxes and regulation for business will restore economic growth.
Posted by Gary Sauer-Thompson at 9:51 PM | Comments (3) | TrackBack
March 11, 2014
signs of change
The Coalition's Direct Action is part of a short-term political manoeuvre that helped deliver power to the conservative parties. It is not a long-term policy position to deal with climate change. Their long term policy position is to defend the fossil fuel industries, and to push for push for greater fossil fuel consumption even though the market for conventional generation is effectively dead. This position involves hostility to the renewable energy industry.
Australia is investing tens of billions of dollars building new assets to promote fossil fuels, be it in LNG, coal, the Galilee Basin and the Abbot Point port infrastructure even though the demand for coal in China and India is declining. China, the biggest consumer of coal, is placing a cap on coal consumption whilst imported coal from Australia is too expensive for India.
David Pope
Committing to the economic primacy of fossil fuels, particularly coal, may well result in stranded assets and asset write downs. In the Australian market energy consumption continues to fall while renewable energy development rises. This is driving down wholesale market prices and eroding the value of coal and natural gas plants.
The fundamental structural change in the electricity market that is underway that is undercutting the traditional utility business model. And the utilities, fossil fuel generators and state governments that own the old electricity assets (eg., WA, Queensland and NSW) do not like the declining profits.
Posted by Gary Sauer-Thompson at 1:50 PM | Comments (4) | TrackBack
March 8, 2014
an emerging authoritarianism?
The Abbott Government's commitment to a neo-liberal mode of governance is now clear. In this mode of governance civil society is a market, and the role of the government is to keep the market running by removing as many market distortions as politically possible--to get the economic fundamentals right ---and to let the market sort things out. The government gets out of the way and the market produces the right outcomes with respect to prosperity,” “growth,” and “development.
David Pope
One of the market outcomes it to lower wages--- most of those unemployed by the destruction wrought by the dynamics of the global market on Australian companies--eg., manufacturing, airlines--- will eventually find work with lower wages and worse conditions. Neo-liberal governance aims at transforming recipients of welfare and social insurance into entrepreneurial subjects, who may be motivated to become responsible for themselves--get them off welfare and into the workforce.
Those neo-liberal subjects who are displaced from work by the forces of competition and who are are unable to find work to ensure the bare necessities of life become disqualified, and they are excluded from the good life and thus not treated or represented as part of the “people.”
Of course, the Abbott Government's commitment to a neo-liberal mode of governance is not pure since the market does need the support of the state to be laissez-faire: autonomous and self-sustaining. Secondly, neo-liberal subjects are more than just economic subjects and the economic order tends to operate in connection with many others: for example, through uses of multimedia and digital technologies, life active participation in consumption, and engagement in conducting life as an enterprise.
Thirdly, the Abbott Government coercive and authoritarian tendencies indicates dealing with a state of exception due to national insecurity (the suspension of the juridical order by law), by repressing organizations, activities, and individuals that fall into its definition of political enemy.
Posted by Gary Sauer-Thompson at 3:28 PM | Comments (1) | TrackBack
March 6, 2014
ending the Tasmanian Forests Agreement
You would think that the majority of Tasmanians are sick of the conflict over native forestry and would support an agreement to end it and to shift to becoming less dependent on their extractive industries over time given that forestry is a minor industry in the state. It generates just over 1,200 jobs – or less than 0.5 per cent of total employment in the state.
Not so for the conservatives. For example, speaking at a timber industry dinner in Canberra Tony Abbott said too much forest is currently locked up in Tasmania. He also recommitted to repealing part of the state’s Wilderness World Heritage Area made under the forest peace deal. Under the deal, 170,000 hectares of forest was added to the area, and the Government has formally asked the World Heritage Committee to delist 74,000 hectares.
This tear-up is supported by the state Liberal Party, which is likely to gain government in late March. The political cycle in Tasmania has swung back in favour of the forestry industry, even though it is an industry in structural decline:
David Rowe
The World Heritage areas were part of the peace deal negotiated by representatives of the forestry industry, unions and mainstream green groups and implemented by the Labor-Greens minority government last year.
In dumping it, the state and federal Liberal Party is advocating the further clearfelling and logging of natural forests in order to keep a failing native forest industry struggling against the tide. That would mean more public subsidies for the logging industry since the the entire public native forest industry itself is on indefinite life support courtesy of the Tasmanian taxpayer through numerous assistance packages.
Forestry Tasmania, which is responsible for public native forests in Tasmania, recorded a net loss before tax of $64 million over the period 2009-2012, according to The Australia Institute.
Tasmania iand Western Australia are examples of the “resource curse” which refers to countries rich in non-renewable natural resources are more prone to government mismanagement, corrupt institutions and weak economic growth. The rhetoric of the mining and forestry companies advocate laissez-faire capitalism, are reflexively hostile to any form of government intervention, hold that resource industries (especially mining) are the future for Australia and climate change is a left-wing/green conspiracy.
The resource industries close to politicians, fund their parties, employ lobbyists and acquire media outlets and they require approvals in their favour with respect to infrastructure, environmental protection and native title. The consequences are familar:
Positive wealth shocks from the natural resource sector (along with consumer preferences that translate this into higher demand for non-traded goods) creates excess demand for non-traded products and drives up non-traded prices, including particularly non-traded input costs and wages. This in turn squeezes pro"ts in traded activities such as manufacturing that use those non-traded products as inputs yet sell their products on international markets at relatively fixed international prices. The decline in manufacturing then has ramifications that grind the growth process to a halt.
Resource-abundant countries tended to be high-price economies and that, partly as a consequence, these countries tend to miss-out on export-led growth in other sectors.There is a decline in the competitiveness of other economic sectors (caused by appreciation of the real exchange rate as resource revenues enter an economy. There is also a lack of economic diversification and a lack of long-term investment in infrastructure which would support a more diverse economy.
Posted by Gary Sauer-Thompson at 6:54 AM | Comments (7) | TrackBack
March 5, 2014
a future climate scenario for Australia
The State of Climate Report --2014 is the third in a series of reports produced by CSIRO and the Australian Bureau of Meteorology and it confirms past trends and projections. No doubt the Abbott Government will ignore it as it continues its rhetoric of dumping the "carbon tax" so as to decrease the costs of business, restore profitability, and increase economic growth.
The State of Climate Report --2014 states that the evidence is clear that human-induced climate change is continuing to increase the risk of extreme weather and temperatures:
(1) Australia’s climate has warmed by 0.9°C since 1910, and the frequency of extreme weather has changed, with more extreme heat and fewer cool extremes.
(2) Rainfall has declined since 1970 in the southwest, dominated by reduced winter rainfall. Autumn and early winter rainfall has mostly been below average in the southeast since 1990.
(3) Australian temperatures are projected to continue to increase, with more extremely hot days and fewer extremely cool days.
(4) Average rainfall in southern Australia is projected to decrease, and heavy rainfall is projected to increase over most parts of Australia.
(5) Projected sea-level rise will increase the frequency of extreme sea-level events.
The Report also states that it is extremely likely that the dominant cause of recent warming is human-induced greenhouse gas emissions and not natural climate variability and is caused by continuing to pump more greenhouse gases into the atmosphere.
So the scenario for Australia is hot days, higher fire risk, more severe droughts. That means droughts are set to be more frequent, longer and more severe. Even if all emissions are stopped tomorrow, there is likely to be enough greenhouse gases in the atmosphere already to push the limits of the internationally agreed "guard rail" of two degrees of warming
No doubt the climate change deniers will continue to say that there is "nothing we can do about it as its just natural, climate has always changed and always will". Rejecting the science and doing nothing is betting on a very low probability scenario.
Failing to mitigate global warming by significantly reducing greenhouse gas emissions is fundamentally equivalent to continuing to smoke cigarettes, driving without a seat belt, or refusing to buy homeowner's insurance. Each of these situations represents the failure to take action to reduce the risks of a dangerous outcome.
Science isn't a matter of opinion. It's not like politics, where any topic of discussion can be debated by anybody with contrary views. Climate policy, in contrast, is in the realm of opinion. Australia's emissions come predominantly from burning coal for electricity hence the need for a price on carbon since it is designed to send a clear price signal to coal-fired power stations by charging them for each tonne of CO2 emitted.
The Abbott Govt's strategy on this, and other issues (the budget, debt, unemployment, de-industrialization) is not to govern the country; it is to wedge Labor. The bad economic news is all Labor's fault. The Abbott Govt's plan to fix things is being frustrated by the Labor Party in the Senate. Labor needs to be destroyed.
Posted by Gary Sauer-Thompson at 6:48 AM | Comments (9) | TrackBack
March 2, 2014
An expanionist Russia
Putin's Russia has taken over Crimea which is a major part of Ukraine, a neighbouring sovereign state. Russian forces have gained control of Crimea, which looks as if it will vote to secede from Ukraine.
If the big fear is that Moscow is planning a full-scale annexation of Crimea, with its majority ethnic Russian population, it may also be the case that Russia may primarily trying to secure its naval base and to destabilize the Ukrainian government.
Martin Rowson
This is Russia's response to three months of protest, with 82 people being killed in clashes with riot police and thugs deployed by Viktor Yanukovych's corrupt authoritarian regime; a response to a classic popular revolution that was pro-Europe in orientation. The opposition demonstrators in Kiev were ordinary citizens who were fed up with the corruption and misrule of President Viktor Yanukovych and his clique, and who were opposed to the country's slide into an outright dictatorship.
It was a bottom-up revolution. The Euromaidan ‘protesters were armed with little more than homemade shields, rubbish helmets and molotov cocktails. The Euromaidan protests appear to have been essentially pro-democratic, pro-European and multicultural whilst including far-right nationalists and neo-fascists.
The trigger appears to have been the enormous Russian political and economic pressure on Ukraine, combined with the pro-Russian policies of Yanukovych, and his grotesque corruption, coupled to Ukraine's inequality, economic stagnation and poverty.
Now there is an interim government with new presidential elections in May. Ukraine is facing default on its various debts and the transitional government has to deal with only two major problems in new Ukraine: (1) the Kremlin-backed separatism and (2) the economic crisis.
Ukrainians are deeply divided about European integration largely along an axis between the largely Russian-speaking east and south and the traditionally nationalist western Ukraine.
Ukraine's economy is in a mess as it was beggared by the neoliberal shock therapy and mass privatisation of the post-Soviet years. The country does not have the resources to pay for a major economic change programme. The interim president has said that a return to the path of European integration is his priority. This means that the EU needs to set out the conditions Ukraine would have to meet in order to become a member of the Union. Some of those conditions would involve significant economic reform and loans for austerity, as part of a German-led drive to open up Ukraine for western companies.
It is highly unlikely that the US, Britain or France will respond militarily to Russia's invasion of Crimea and Crimea's secession. NATO likewise, rhetoric notwithstanding. Ukraine is not a member of an expansionist NATO, and Russia is very resistant to Nato's undisguised ambition to continue two decades of expansion into what used to be called "post-Soviet space".
Update
Putin's post-Soviet Russian nationalism sees the borderline states ---Moldova, Armenia, Belarus Georgia--- as being within Russia's sphere of interest/influence in eastern Europe and a part of Russia's planned economic integration in the post-Soviet space. Russia lost an empire and the vacuum is being filled by Putin's geopolitical project, which is the creation of an Eurasian Union. Russia sees Ukraine, given its strategically important location, as the lynchpin to establishing its Eurasian Union. Without at least parts of Ukraine integrated into the Customs Union (a single market bloc) Putin's Eurasian Union won’t really work.
If the ostensible purpose of Putin's new integration project for Eurasia is economic, then its primary objective is geopolitical to be achieved in large part by economic means with Russia ruling supreme. A crucial question in relation to the concept of regional hegemony, in the form of a Eurasian economic union, is whether the wider public in post-Soviet countries, where opposition to Russian domination, and a sense of grievance and injustice, remain strong, will passively accept Putin's scenario.
Memories of the seven-decade experiment in totalitarianism that was imposed on them by Russia are bound to resurface and the wider public would be understandably be wary of an economic union becoming a vehicle for the reduction of their political sovereignty by the Kremlin.
Posted by Gary Sauer-Thompson at 1:28 PM | Comments (15) | TrackBack
March 1, 2014
the “deserving” and the “undeserving” poor
The bleating fossil fuel industry is uses the Abbott Government to defend its short term profits under threat from the emergence of renewables (solar and wind), to evade environmental regulation at open cut coal-mines and to socialize the externalities such as public health.
David Pope
Meanwhile the bleating farmers in NSW and Queensland get yet another handout or public subsidy in the form of drought assistance.
The justifcation for yet another exception to the end of the age of entitlement--recall the Cadbury chocolate factory in Tasmania---- is that drought is a natural disaster. Yet drought is commonly accepted in public policy circles as a normal part of Australia's weather, and a permanent element of the Australian landscape. Farmers are seen as the deserving poor.
It's called protecting the conservative base. The manufacturing and canning industry, in contrast, is union based and allowing union jobs to go the wall weakens the unions and an ALP still heavily dependent on the support of blue collar unions. The unionized workers are the undeserving poor.
So much for the level playing field and the hard line free market approach. Politics rules. That is clearly seen with Qantas becoming a political football in order to wedge the ALP over increasing the 49 per cent foreign ownership through amending the Qantas Sale Act.
Labor opposes changing this part of the Act (it is in favour of both increasing the 35 % limit on the stake by foreign airlines and the 25 % limit on an single foreign shareholder). So Labor is held responsible for the decline of Qantas and the loss of jobs and that destroys Labor's (union-backed) argument of "protecting Aussie jobs".
Despite the obvious public health issues caused by the fire in the open cut coalmine supplying the Hazelwood power plant (the air quality is very poor because of the particulates produced in the fire), the Abbott Government has announced a study into the health impacts of wind energy and continues to talk about the cheap energy provided by Australia's abundant coal reserves.
Posted by Gary Sauer-Thompson at 9:20 AM | Comments (4) | TrackBack