Month: May 2000

In bringing down the Budget yesterday, Treasurer Gary Humphries was careful to ensure that the ACT Government was not seen as a bunch of market-driven ideologues. He painted his Budget as a liberal Budget, with a small l, not a conservative Budget. This might be a change in heart or an act of political expediency. Either way, it is at least a recognition that the role of Government is quite different from the role of a business. There is more to what government should do than attend to the bottom line.

Mr Humphries turned his attention to social capital. He said the Government should help sustain social capital – the connections between people, institutions and organisations. And he pushed some money that way. In doing so, however, he stressed an important point: governments should only spend money on social capital when they have it to spend. He could have made the further point that spending borrowed money on social capital is counter-productive. Ultimately it, and the interest, has to be paid back at a huge economic and social cost.
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The war or words and threatened violence that led up to the election of Taiwan’s President Chen Shui-bian has, thank goodness, subsided into a war of semantics. Mr Chen’s inauguration speech at the weekend drew back from his promises during the election campaign to seek full independence from the mainland. And the reaction from the communist regime in Beijing was helpful. It opened an offer for talks through some recognised intermediary. The whole episode was encouragingly vague. Everybody knows that Taiwan is independent in fact. All that is missing is recognition of the fact by major nations of the world and a seat in the United Nations. Taiwan satisfies all the requirements of international law (with one possible reservation) to be recognised as an independent nation. And this is the more so since the election of Mr Chen. He was elected in a free and fair democratic election. He ended the 50-year rule of Kuomintang Nationalists – most of it undemocratic and forceful. It as the first peaceful and democratic handover of power in the history of China.
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The Federal Government is huffing and puffing over internet gambling again. In the face of a move by the ACT Government to issue the first internet gambling licence under purpose-designed legislation that has been in place for some time. The response of the Federal Government has been to announce it will backdate a moratorium on internet gambling.

The Federal Government’s position on internet gambling is ignorant and irresponsible. Its proposed one-year moratorium is just grandstanding and gives a false impression that it is taking a tough stand against gambling. The exact opposite it true. The Federal Government is putting hits head in the sand by refusing to responsibly regulate internet gambling site in Australia. The Federal Government cannot possibly prohibit overseas-based internet sites and cannot possible prevent Australians from logging on to them over the phone lines at the speed of light as if they were in the same room. If the Federal Government carries out its threat to overturn territory and state licensing systems for Australian-based sites, it will be denying Australians access to regulated internet gambling sites and leaving them to the mercy of unscrupulous or unknown overseas sites.
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The stand-off in Fiji after Friday’s coup is troubling, but hopeful. It was the third coup in 13 years, but unlike the previous two, this one does not seem likely to succeed. The armed forces, police and (largely ceremonial) presidency have denounced the coup and armed men who stormed Fiji’s Parliament building taking Prime Minister Mahendra Chaudhry and two score MPs prisoner. The men are led by bankrupt businessman George Speight. The military led the previous two coups.

But the underlying cause of all three coups is the same – racial tension between the indigenous Fijian population and the descendants of Indian indentured labourers brought to the islands by the British. The Indians have made great commercial success in the major cities. By 1987, the time of the first coup, the Indians began to outnumber the indigenous Fijians. In April that year a Coalition led by an indigenous Fijian Prime Minister but with a majority of Indian Ministers won the election. The gradual population changes and economic success coupled with the sudden political success of the Indians caused great resentment. A military coup, led by Sitiveni Rabuka, followed a month later.

Settlement talks and a new Government under a compromise constitution did not get a chance. A second coup was launched by Lieutenant-Colonel Rabuka who then took the reins of government for several months before handing over to civilians with himself in a military watchdog role as Minister for Home Affairs. Mr Rabuka returned to the prime ministership under a racist Constitution that barred Fijian nationals of Indian or other non-indigenous background from the top job. After a decade’s work that Constitution was replaced.
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It is fortunate for Australia that our business and education ties with Malaysia are very strong. It means that as soon as the present Malaysian Prime Minister Mahathir Mohamad leaves office, political and diplomatic ties with Malaysia can return to the close, warm and strong ties that they should be. Dr Mahathir asserted this week that Australia had turned tis back on Asia and had adopted a bullying attitude to regional Asian partners. He accused Australia of taking advantage of countries like Indonesia that had been hard hit by economic and political crises. He said that the best way Australia could be a friend to Asia was for Australia to mind its own business.

It was an inconsistent, incoherent and ill-informed attack on Australian foreign policy. And heaven alone knows there is much about Australian foreign policy that can be attacked. Dr Mahathir was playing the race card and making a tough-guy stand for domestic political purposes. He seems now to have quelled his opposition – largely through abuse of power and subversion of the judicial system – and he seems to have settled his succession question in a way that will not destabilise his twilight of power. So now he obviously feels he can let of some steam so he can look to be in charge. And what easier target is there for him that Australia? He upsets no-one in his own country. No other country in the region will publicly come to Australia’s help, so it is essentially a free kick.
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The US Federal reserve has increased the US official interest rate by half a percent. This presents the board of the Australian Reserve Bank with a quandary when it meets next month. Does it follow suit just because the US has increased its rate, or does it make a judgment independent of US conditions? If Australia does not increase its rate in line with the US increase, it is inevitable that Australian dollar will fall as investors depart for investment in more lucrative US markets. If is does increase the rate in line with US markets, the Australian currency may hold, but it will be an artificial holding up of the currency. It would be as foolish as gong back to the old days of a pegged rate. It may be that conditions in Australia warrant an increase in the interest rate for reasons aside from what has happened in the US. If so, all well and good. But that is unlikely to be the case. The Australian economy is performing differently form the US economy. It is not growing as fast. Nor does it have the same inflationary and wage pressures as the US economy.

The important thing here is for the Reserve not to act on the basis of the US economy. True, Australia needs foreign investment to ensure our balance of payments stays in control. However, it would be folly to increase interest rates on that basis alone if it meant that the brakes were applied to the Australian economy with excessive force. The Reserve needs to look at the Australian currency in a global context. While it looks poorly against the US dollar, so are other currencies. Indeed, the euro is doing worse against the US dollar than the Australian dollar is.
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The question of voluntary voting was raised again this week. This time it was the case of a Canberra man, Maxwell Smithies, who was prosecuted by the Australian Electoral Commission for failing that to vote in the 1999 referendum. He was fined $50 in the ACT Magistrates’ Court and ordered to pay $350 in costs. Mr Smithies is a crusader against compulsory voting, arguing that it was against his conscience to vote under such a regime.

The commission was rather stupid to rise to Mr Smithies’ bait, though the commission is in somewhat or bind. If it allows people who say their conscience is offended by compulsory voting to escape prosecution, anyone could use that excuse and de-facto voting would become voluntary, defeating the philosophy and purpose of he law requiring compulsory voting.

In fact, it would not matter too much if the commission allowed the odd case of conscientious objection to slip through. It would hardly open up a floodgate because, by and large, Australians are law-abiding. The commission has fallen into Mr Smithies’ trap, namely, to make a martyr of himself and to bring the question of compulsory voting into public debate.
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One of the more ridiculous arguments put up by the Australian Medical Association against giving patients access to medical records was that doctors have kept their patients information confidential for more than 6000 years. The federal vice-president of the association, Trevor Mudge, argued that many people could be harmed by looking at their own records, such as psychiatric patients, children and adolescents.

The comments came after the federal privacy commissioner, Malcolm Crompton, published draft health privacy guidelines which, subject to a consultation process, will come into force in December. Under the guidelines, people’s medical records, including doctors’ written opinions, would be made available to patients for free within a month of a personal request. Doctors are resisting. In doing so, they are putting forward quite a few spurious arguments which are just a decoy for what is probably their real concern: that their diagnoses and treatment prescriptions might be exposed to questioning, either informally or through formal complaints or legal avenues. The President of the National Council for Civil Liberties, Terry O’Gorman, made a pertinent point when he said, “It is those doctors who practise on a pedestal and look down their noses at patients, as it not being entitled to any information, who have something to fear from these proposals.””
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The minister for veterans affairs, Bruce Scott, has indicated that the Federal government it is about to consider a report by the Department of Defence that recommends that women should be able to serve in front-line military combat duties. The suggestion has drawn immediate fire from the Returned Services League which objects strongly to the idea of women serving in that frontline combat positions. A leading at feminist academic, either Cox, on the other hand has applauded the suggestion.

Already, 95 per cent of positions in the Australian armed forces are open to women. In theory, it would be possible for a woman to be Chief of the Defence Force or chief of any of the three armed services. However, while women remain excluded from some combat roles, they will always be at a disadvantage when it comes to promotion at the higher echelons of the Australian Defence Force. And there is every reason why women’s ills should be used there. After all, Queen Boadicea, with modest forces, cut the Roman ninth legion to bits in defending her homeland in the first century.
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The ACT Legislative Assembly rejected Government legislation last week over betterment charges. The charges apply when someone wants to change the purpose of their lease, say, from residential to office, or office to retail. The charges are set according to the value of the lease (without improvements) before the change of purpose and what the value would be if the lease allowed a new purpose. So if a lease were converted to retail purpose it might be worth $200,000 more than it is worth as a retail lease.

Health Minister Michael Moore since he entered the first Assembly in 1989 been a consistent supporter of making developers pay the full increase in value to the Government for the change of use. He argues that under the leasehold system any increase in value attributed to change in use is a public asset and should not be given away. Developers should not get a windfall profit. He took off his ministerial hat this week and donned his Independent MLA hat in support of that view. There is some merit in it, but it has one significant drawback.

The Government, on the other hand, feels that development should be encouraged. It feels that the change of use charge should be only 50 per cent of the increase in value, replacing the present temporary rate of 75 per cent which applied until September when it reverts to the permanent 100 per cent rate.
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