Month: January 2002

The economic orthodoxy of fighting inflation at all costs has indeed been costly for Argentina. As Eduardo Duhale – the fifth president in two weeks – took power this week, he will inherit a bankrupt economy. That is not hyperbole. The definition of a bankrupt is one who cannot pay their debts as they fall due – precisely Argentina’s position. But unlike an individual who can declare bankruptcy, deliver up their assets for part payment of the debt and start afresh, a nation has to struggle on with the debt burden. How Mr Duhale does this is a matter of major concern for those who cherish the ideal of political and economic liberty. The rioting and violence in the streets in Buenos Aires in the past week which is a direct result of the economic failure has threatened those liberties.

At the behest of the heavily-US-influenced International Monetary Fund, Argentina began a classic reform program about four years ago. It cut tariffs, privatised state enterprises, welcomed multi-national companies, cut government spending and pegged the peso to the US dollar. For a time, things looked good. Foreign investment poured in.

The fear of inflation in Latin America is perhaps more pronounced that elsewhere because in the past inflation has run riot on occasions as governments just printed money in an attempt to meet welfare spending and often to keep corrupt payments running. So pegging the peso seemed a good idea at the time. But it was not. The enemy was not inflation – that was a mere symptom. The real enemies were unrestrained government spending and corruption. A floating exchange rate is an important way for an economy to self-correct, especially when combined with the intelligent application of monetary policy. Australia is a good example. We may well moan about the falling value of our dollar, but it has prevented some of the horrors of the Argentinian situation.
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This Christmas-New Year we have seen heart-breaking images of people outside their destroyed homes; valuable farmland and precious bushland burnt-out. Perhaps as many as 200 houses have gone up in smoke.

This holiday 46 people (and probably more by the end of today) have died on Australia’s roads. Perhaps 10 times that suffered injury. It is a much worse toll than the bushfires, yet it has had scant attention – ironically because it has been eclipsed by the bushfires. Forty-six grieving families have lost a love one – not a house that can be rebuilt.

There are now signs that the significant falls in the road toll achieved in the late 1980s and early 1990s are not continuing. Although 2001 with 1749 dead was better than 2000 with 1817, the large reductions of a decade ago are not apparent. Victoria had a horror year on the state’s roads last year, with 451 deaths. It was the worst result since 1991 when there were 503.
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The Indian Government is rightly angry at the December 13 attack on the Indian Parliament that left 14 people dead. It was an attack at the heart of Indian democracy and made. However, India’s response, especially in the past few days, has been misdirected – ironically from the very pressures of democracy which arise when voters demand action and bay for blood. The attack was a terrorist attack organised and led by people who want an end to Indian rule over Kashmir – the only territory in India with a Muslim majority.

India, however, has repeated its old line – that Pakistan sponsors Kashmiri terror against Indian rule and is seeking the incorporation of Kashmir into Pakistan. About 30,000 people have died in Kashmir violence since a rebellion against Indian ruled erupted 11 years ago.
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On attaining government in 1972, Labor Prime Minister Gough Whitlam set up an inquiry into accident compensation headed by Justice Woodhouse. Woodhouse had earlier conducted an inquiry in New Zealand.

The inquiry recommended an overhaul of the common-law system of awarding damages to those injured in public places, workplaces and through medical negligence. Legislation was drafted, passed the House and was knocked back by a conservative majority in the Senate. And now 30 years later, the conservatives want the system overhauled – for different reasons.
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People love something for nothing. And they hate missing out on it.

The astonishing roller-coaster in the housing industry is a good example of it. And, according to figures issued this week, the roller-coaster continued. Indeed, the Australian term Big Dipper might be more appropriate.

The Big Dipper has been caused by Governments messing around with the market, in particular with the First Home Owner Grant to a lesser extent by the pernicious levels of stamp duty.

The scheme was introduced on July 1, 2000. Under it, every first-time purchaser of a dwelling got $7000 cash. The theory was to compensate them for the introduction of the GST.

The scheme was flawed from the start. Dwellings were exempt from the GST, so there was no need for the grant to apply across the board. There might have been an argument for a grant to people constructing new dwellings because the GST was to apply to the labour and materials in construction, whereas the wholesale sales tax it replaced applied only to some of the materials.
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What a calamity. What a terrible Christmas-New Year disaster. All that destruction and heartbreak. All that piecing of lives together. All those huge insurance claims for millions of dollars to be paid out. And it need not have happened. It was nearly all caused by human culpability and stupidity.

No, not the bushfires. I am talking about the road toll. Fifty-seven people were killed over Christmas New Year. You can reckon on $1 million a death in economic loss. If you add the cost of injury, it means the road toll cost more in economic terms than the bushfires and the road deaths happen every year. Perhaps because they happen every year we take less notice. Indeed, the bushfires have made us take even less notice of the road toll this year.

Last year 1750 people were killed on Australian roads. It is slightly fewer than last year, but calamitous nonetheless.
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Courts generally accept DNA evidence these days. Defence lawyers have attempted to get the evidence excluded for time to time, but without a great deal of success.

Reports this week of the great success of DNA testing of Victorian prisoners have revived questions about civil liberties and also questions about whether the ACT is doing as good a job with similar legislation.

Since compulsory testing of prisoners began in Victoria in 2000, authorities have linked 99 prisoners with 238 previously unsolved crimes, including violent rape and murder. Many are yet to be charged tried and sentenced.
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