Month: June 2002

The people of the ACT have some grounds for self-congratulation over the latest Social Trends figures issued by the Australian Bureau of Statistics, but we should not become too smug. The trends found that Canberrans live longer, healthier and wealthier lives that people in other states and territories. We are less likely to die in a car accident, less like to commit suicide, have the highest incomes, lowest social security dependency, highest educational standard and so on. However, we have among the highest alcohol consumption and the lowest fertility.

Some of these statistics have lessons for others in Australia. For all of the Canberra-bashing that goes on in Australia, it seems that having a planned city must have some major benefits. But so also does a huge amount of the federal money spent over the years creating the place including its health and education infrastructure and a large influx of highly educated federal public servants. It also helps to have a younger population than elsewhere and one concentrated in one city – unlike the other states and territories.

If Canberrans are leading longer, healthier, more educative and therefore perhaps happier lives, it seems there is a lot to be said for public spending on – nay, investing in — health, education and infrastructure. It means good economics, too, even from the Government’s point of view. Canberrans earn higher incomes and therefore pay more tax.
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The Reserve Bank of Australia is playing a dangerous game. First its Governor, Ian Macfarlane, used words at a parliamentary committee hearing last week that could only translate as meaning an increase in interest rates of 2 per cent in the near to medium future. Then this week the bank increased rates by a quarter of one per cent (25 basis points in the jargon) which followed a similar rise a month ago.

It may be that Mr Macfarlane was engaging in some artful scare tactics. By merely warning of such large rises, he will cause consumer sentiment to turn, particularly in the housing market. That might not be such a bad thing. The alacrity with which people put their hands up a real-estate auctions, particularly in Sydney, is alarming. However, the Australian economy is more than the Sydney housing market. And in any event the Sydney housing market will adjust itself without any help from Mr Macfarlane. There comes a time when people in Sydney will question whether they will get a return on capital and whether it is wise to spend so much on housing. It does not matter a great deal whether the Sydney housing boom busts this year, next year or the year after. No the real concern is business investment. If Mr Macfarlane succeeds in scaring the business-investment horses as well as the hapless home-buyers of Sydney, he will not have done the country a service.
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Slowly the political forces are moving towards the full privatisation of Telstra. A year ago, only the Liberal party would countenance its privatisation. Now its Coalition partner, the Nationals, have opened the door towards privatisation in this term provided a review found that services in rural and regional Australia were up to scratch. Moreover, Green senator Bob Brown has suggested that he would think about allowing the privatisation in return for major expenditure and policy commitments on environmental concerns. A third of the ranks of the Democrats have said the issue ought to be looked at in the context of the national interest and One Nation Senator Len Harris has said he would agree to a privatisation in some circumstances provided it were delayed for 18 months. Even the Opposition Labor Party has stated it would permit a full privatisation of part of Telstra – the service provider element – provided the infrastructure were left in public hands.

These stances by the non-Liberal elements in the Federal Parliament might seem quite encouraging for the Liberals. The trouble is that it is no use getting all the opponents half way to agreeing to a privatisation. Rather the Liberals need to get most of the opponents all the way to agreeing to a privatisation.
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The story was quite horrific. I knew of the man, by name and sight. He was a solicitor and had something to do with the school. I learned later that he had had a stroke and collapsed, just after turning on the hot water tap as he was about to get into the shower. The burns were horrific and he died a short-time later. Such a story remains powerfully in the memory.

So even with this horror event in my mind, let me relate a classic story of Nanny State’s left hand not knowing what its right hand is doing on water temperature.

I have never come across a similar scalding event. A few children get scalded each year, but no-one dies of it. Nevertheless, a hot-water standard is slowly being imposed upon all of us. I learned of this when doing the socially and environmentally responsible thing by installing a solar hot-water system – and, incidentally taking advantage of the ACT and Federal Government’s socially and environmentally responsible $1500 subsidy — all in the cause of reducing greenhouse gases by using the sun instead of fossil fuels to heat the water.
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This is very much a Labor Budget – the post-war Labor tradition. It means you have to take the bad with the good.

Tax the rich. Tax the middle and the upper middle. Tax business. In this budget stamp duty, land tax, payroll tax, car registration, tip fees and parking fees went up. It hurts job growth and wealth creation but raises money for the worthwhile if spent wisely.

Spend on public education. Spend on public hospitals. This budget has substantial increases. Fine if spent at the pointy end. But this Budget as an unspent $7.2 million slush fund for anything that might come up in the year.
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The ACT Government was offered $10 million in the lead-up to this year’s Budget in the form of an upfront fee for Casino Canberra to get poker machines.

The money would have obviated the need for any tax increases. The Government refused the proposal.

The office of Treasurer Ted Quinlan confirmed the approach by the casino, but refused to outline any details.
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Floriade entry fee

Stamp duty up by up to 22 per cent

Land tax rises
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The biggest hurdle Chief Minister Jon Stanhope has with his proposal to increase the Legislative Assembly to 23 Members with three six-member and one five-member electorates is the law that entrenches the Hare-Clark system in the ACT.

That Act – which was approved by 65 percent of the electorate at a referendum in 1995 — states that at a general election, “”an odd number of members of the Legislative Assembly shall be elected from each electorate”. It said there must be a minimum of five in each electorate. To overturn that, Labor would need a two thirds vote of the Assembly or a simple majority in a referendum.

Neither is very likely. The Liberal Party on its own would be able to defeat the 23-Member proposition. The Greens are also against it. If it went to the vote, voters would rightly see it as a fiddle. How the Labor Party can put up such a doomed proposition beggars belief.
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