EDITORIAL : THE AUSTRALIAN, AUSTRALIA

It's the economy in Queensland 

IT remains to be seen if Campbell Newman is able to make the difficult transition from local government to state politics.

But Brisbane's Lord Mayor is right about one point. Queensland's bureaucracy is overblown and business is struggling because of red tape and poor infrastructure, especially in the southeast, far from the state's booming mining regions. Tourism and service industries are in the doldrums in the state's two-speed economy and are under pressure after summer's natural disasters.
Mr Newman's elevation by the Liberal National Party to alternative premier has already had one positive effect. It has kicked off an important economic debate in what was once Australia's boom state, but which lost its AAA credit rating two years ago. Despite the mining boom it has also fallen short on growth, employment, non-residential construction and business investment. Mr Newman made a good start yesterday in an interview with The Weekend Australian, outlining his vision for economic change. But he must also address issues such as state taxes and charges, especially the burden of payroll tax and how he intends to pay for the transport and water infrastructure the state needs.
Premier Anna Bligh faces a major challenge overseeing reconstruction, but also needs to pay more attention to these issues. She would restore the state's AAA credit rating much faster if she reined in the public service, for example. But Ms Bligh has done well staring down union and public opposition to the sale of major assets such as Queensland Rail's coal freight business. If Queensland is to recover its former prosperity and avoid a long-term malaise like NSW, the economy must be the battle ground in the contest between two seasoned leaders.

Time to shed light on real climate challenges

TOKEN gestures, like switching off the lights for an hour to demonstrate solidarity with the planet, appeal to a certain corner of the climate change debate but don't shed light on the critical issues.

Hard-headed analysis of the impact of carbon prices on our emissions growth and economic wellbeing is much more illuminating. Which is why the intervention of the Productivity Commission through chairman Gary Banks was so important this week. Mr Banks has explained the complicated balancing act needed to set the right price on Australian carbon through the proposed new tax. The risk is that if the price is too low the tax will be ineffectual, if too high it will simply send Australian jobs and emissions overseas. That's economic pain for no environmental gain.

The commission, however, is taking the analysis much further, as discussed by economics editor Michael Stutchbury in our pages today. By examining the effective carbon price here and overseas, the commission is attempting to estimate the cost impacts of numerous other government interventions, such as renewable energy targets mandating large quantities of expensive zero-emissions electricity. Juggling the various effects of carbon prices here and overseas so that a local carbon tax can be imposed without seriously undermining our industry, exports, employment and wealth is, in Mr Banks's view, a "wicked" challenge. Strange then, that the commission wasn't called in earlier. It was only at the behest of independent MP Tony Windsor that the government even agreed to this inquiry into the international carbon pricing environment -- a study that should have occurred at the start of Labor's considerations even before the failure of Copenhagen.

While Mr Banks's final report is eagerly awaited and his warnings about the practical difficulties are timely, they come as the government increasingly looks rattled and disorganised. After spending the early part of the week embracing the possibility of merging personal tax cuts into the carbon tax compensation measures, and admonishing the opposition for promising to scrap these imaginary cuts, it has now backed away. In a week of policy absurdity, presumably Labor no longer is critical of the opposition for promising to scrap proposed tax cuts it now no longer believes advisable? Little wonder if voters become confused.

The Prime Minister and Climate Change Minister Greg Combet have been keen to portray anyone who disagrees with their tax as climate change deniers.

As Mr Banks makes clear, even if you are committed to cutting emissions, there are a hundred ways to skin this cat, and we need to get it right. The commission implicitly recognises the opposition's direct action plan is not the cheapest way to cut emissions. But, then again, it is a plan that doesn't involve radical structural change to the economy and, on paper at least, doesn't increase the overall tax take, so its proponents can argue, if they choose, that it is a prudent way forward. We also need to keep our debate in perspective, realising that Australia accounts for less than 1.5 per cent of global emissions. The Weekend Australian believes a market mechanism is the best way to control emissions but we must not disadvantage the economy by moving too far ahead of our competitors. But the danger of focusing obsessively on one policy is that it neglects other priorities. We believe, for instance, that one of the government's highest priorities should be working towards a sovereign wealth fund to lock in the gains of the boom, and not squander our resources wealth. Name-calling over taxes and debates about a couple of offensive placards only distract Australia from real and complex economic challenges ahead.

Labor should return to workers

ON a day when Labor faces a humiliating defeat in NSW, the heirs to the nation's socialist tradition might pause and reflect.

Whenever the party loses its way, it returns instinctively to the speech Ben Chifley delivered to the NSW branch of the ALP on June 12, 1949. It is commonly known as the Light on the Hill speech, but we prefer its original title -- For the Betterment of Mankind Anywhere. To assist new Labor leaders and young union leaders hazy on history, the speech has been posted on our website, www.theaustralian.com.au. (We also recommend Tom Dusevic's feature, "Who's in bed with Kristina Keneally?" on the nepotism and patronage that have destroyed NSW Labor.)

On this exceptional day, we quote from the concluding paragraphs of Chifley's speech: "When I sat at a Labour meeting in the country with only 10 or 15 men there, I found a man sitting beside me who had been working in the Labour movement for 54 years. I have no doubt that many of you have been doing the same, not hoping for any advantage from the movement, not hoping for any personal gain, but because you believe in a movement that has been built up to bring better conditions to the people. Therefore, the success of the Labour Party at the next elections depends entirely, as it always has done, on the people who work. I try to think of the labour movement, not as putting an extra sixpence into somebody's pocket, or making somebody prime minister or premier, but as a movement bringing something better to the people, better standards of living, greater happiness to the mass of the people.

A few months later, Robert Menzies was elected prime minister, relegating Labor to 23 years in opposition. That should not deter today's leaders from returning to this speech, however. They should recall that under Chifley, Labor secured 42.2 per cent of first preference votes in the December 1949 election, but this week's Newspoll had NSW Labor at 23 per cent.
The world has changed since Chifley's day. The phrases "working man" and "the working class" are out of fashion, but the values of those they describe are not. They are Howard's battlers, Kevin Rudd's working families and Julia Gillard's hard-working Australians.
For Labor, as for Labour, success depends, as it always has done, on the people who work.