EDITORIAL : THE AUSTRALIAN, AUSTRALIA

 

The challenges continue in multi-level economy

ALMOST three years after avoiding the global financial crisis, the nation is facing complex economic challenges that must be addressed if we are to ensure prosperity for all Australians.

As this newspaper reported this week, it's a mixed world out there, with the mining boom masking a real economy that exhibits weaknesses in sectors such as tourism, retail and housing.

None of these contradictions is news to the millions of Australians who, despite tightening their belts and paying down their mortgages since the GFC struck the northern hemisphere in 2008, are still feeling cost-of-living pressures.

Nor is it news to the Reserve Bank of Australia, which has been signalling for several quarters now that managing this economy is not just a simple matter of adjusting interest rates. Yet Labor has failed to advance the kinds of deep structural reforms needed to take the pressure off the non-resource sectors. Indeed, two-speed is an over-simplification, given that even the minerals-rich state of Western Australia is in a technical spending recession with successive quarters of negative growth in state spending.

The contradictions in the economy are matched only by the contradictions in the Gillard government's stance on a whole range of related issues. The government talks of the need to tackle a skills shortage yet spruiks a small-Australia policy, eschewing the robust immigration approach that has always underpinned national growth. It talks about pulling people off the disability and unemployment benefits list at a time when more workers are needed and unemployment is below 5 per cent, yet at the same time endorses rigidities in a labour market that is increasingly seen to favour hard-core union bosses rather than assisting Australian employers and entrepreneurs who want to expand their businesses and develop new ones. It talks about reform while pursuing three new taxes -- the flood levy, the mining tax and the carbon tax -- that have more to do with ideology than with sound economic thinking. Finally, this is a government that is committed to returning the budget to surplus on the one hand and committed to huge spending projects, such as the Building the Education Revolution and the National Broadband Network, on the other.

This loose fiscal policy is undermining efforts by the RBA to manage the economy through interest rates and the floating dollar, and it is compounding the differences between mining and the rest of the economy.

There can be no excuses for Labor's failure to come to grips with the nation's economic challenges. After almost 12 years in opposition and 3 1/2 years in power, the party should have a clearer appreciation of the need for policies that aid rather than inhibit the market and business.

Indeed, if Wayne Swan had a surer command of his portfolio, he would have been arguing the case well before now for some policy U-turns to address some of these challenges. He and Julia Gillard must urgently reverse the reregulation of the labour market; they must look at genuine tax reform; they must address infrastructure problems; and they must reverse the move to a "small" Australia. They talk of problems in the economy, but too many of the policies they are pursuing simply add to those pressures.

Spies, lies and life lessons 

THE cache of M15 files released in London last weekend are more than half a century old but have lost none of their power to shock and enlighten.

As our European correspondent, Peter Wilson, scours the documents, extraordinary information -- as fascinating as any WikiLeaks dump -- continues to emerge about a period of our history that is only now beginning to be fully understood.

Today we reveal how the then prime minister, Robert Menzies, so distrusted Labor leader Herbert Evatt that he secretly ordered ASIO to hand top-secret files to Britain and the US for safe keeping ahead of the 1958 election that he feared Labor would win. It is a vital reminder of the fears of communist infiltration at the highest levels in Canberra in this volatile Cold War period. Some, like security expert Des Ball, believe the M15 files suggest Evatt was not just erratic but almost certainly a Soviet agent. Others give the Labor leader the benefit of the doubt. But the material, along with other revelations that ASIO chief Charles Spry warned M15 during the 1954 Petrov affair that Britain should consider withholding intelligence information from a Labor government, confirm the complete breakdown of the normal bonds of trust between political leaders and bureaucrats in this period.

That it had come to this says much about the passion with which some of the nation's best and brightest had pursued the communist dream of delivering a better life for the working man. Dismayed by what they saw as the excesses of capitalism as it was developing in the US and with the trauma of the Great Depression still fresh, many Australians, and others in the West, who followed broad social-democratic principles, flirted with Soviet communism. They were blind to the monstrousness of a regime that caused the death of 25 million of its citizens. The death toll under Mao was even higher, at 70 million; the total under communist regimes, 105 million.

It is clear that those who allied themselves to the communist cause were desperately misled. Energy, talent and resources were wasted in support of a distorted political creed. Some who find themselves on the wrong side of history cling to the notion that Petrov was a beat-up and Evatt a hero. The M15 files tell a different story.

Their value in the search for historical truth and as a lesson in the dangers of being consumed by a bad idea is invaluable.

Red-tape overkill is no solution

IF the Gillard administration is determined to qualify for what ANZ chief executive Mike Smith yesterday called "the weak government club", its national occupational health and safety strategy is a step in the right direction.

It looks every bit like short-term, populist policy that is against the nation's long-term interest.

It fails to live up to the promise of the Council of Australian Governments agreement in July 2008 to standardise workplace safety laws inspired by Kevin Rudd's vision for a more effective federalism, one that boosts productivity by reducing red tape across different jurisdictions. The reverse will be the case if the government's workplace health and safety agency, Safe Work Australia, proceeds with many of the excessively prescriptive proposals detailed in 550 pages of draft regulations, as well as 12 codes of practice covering issues such as preventing hearing loss in noisy environments, labelling hazardous chemicals, removing asbestos and preventing falls in the workplace.

Business is rightly concerned that the government's approach will increase compliance costs, hand excessive powers to employee representatives and divert resources away from frontline safety to paper compliance. As the Business Council of Australia argues, safety regulations should be simple, clear and sensibly enforced. They should not attempt to provide for all possible eventualities but establish a flexible framework to ensure workers are safe on the job.

Unfortunately, such heavy-handed, process-driven solutions are typical of the bureaucratic approach favoured by the Rudd and Gillard governments, from prescribing fines for use of the "naughty corner" in childcare centres to Health Minister Nicola Roxon's investigating the ugliest colour for cigarette packets as a supposed deterrent for smokers. Kevin Rudd's health changes were also more about bureaucratic changes than directly improving outcomes for patients.

Labor's approach to Aboriginal art fraud is another example: rather than directing police to track down and prosecute carpetbaggers forging Aboriginal art and profiteering, the government adopted a bureaucratic approach, including a voluntary code of conduct. Such micro-management wastes resources and is not the best solution to most issues.