Privatisation, 80s style

I haven’t had time for a detailed analysis of the Iemma government’s proposed privatisation of the NSW electricity industry, though what I saw of the Owen report suggested that the case was weak.

Fortunately, the announcement that the sale will .help pay for a “new vision” for urban transport, a European-style metro rail line, better country roads and improved water management.’ tells us everything we need to know. The quotes in that link should be around “pay for”, not around “new vision”. There is no meaningful sense in which selling an income-generating asset allows you to pay for anything. The sale price merely offsets the loss of income.

As a matter of public policy, either a metro rail line is a good investment or it isn’t. Whether or not electricity assets are sold can make no difference to this. However, lots of evidence suggests that when people get money that they can regard as ‘free’, they generally squander it.

This is all set to be a repeat of the 1980s and 1990s privatisations when the proceeds of asset sales were sprayed against the wall (I’ve slightly bowdlerised the picturesque description offered at the time).

Following on from the Cross-City Tunnel fiasco, the Labor government in NSW is cementing its reputation as the country’s worst fiscal manager.

Charter of Rights

In the aftermath of the election, it’s striking how much the dullness of the campaign reflected the fact that a lot of issues weren’t even debated. Labor’s proposal for a Charter of Rights provides one example. From Labor’s viewpoint, those who liked the idea were probably already aware of it, so there was no payoff from pushing it hard. And while the culture warriors would have liked nothing better than to try and make a big deal of it, even Howard could see that running against human rights would be a risky tactic, especially in view of the government’s record.

Having tried and failed to wedge Labor on rights issues (notably gay marriage), the Liberals were quiet on the topic during the campaign. Now they face the risk of being wedged themselves. The rightwing fanatics who delivered the leadership to Nelson will find it hard to back down quietly, but I can’t see Nelson himself wanting a fight on this.

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The end of the Pacific solution

Without a great deal of fanfare, the new government has ended the shameful ‘Pacific solution’ under which refugees were held in offshore camps, located on the territory of neighbouring countries which the Australian government bullied and bribed into hosting them. Most of the refugees held at the Nauru camp have been allowed to settle in Australia.

Defenders of the Howard government can make whatever claims they like about this evil system, whether to say that it was justified by results or to claim that Labor’s policy isn’t really all that different. The fact remains that this was a cruel and brutal response to community panic; panic the government itself did a great deal to stir up, and even more to exploit politically. Those responsible, most notably Howard himself and Phillip Ruddock, will carry the stain of the Pacific solution to their graves and beyond.

Good and bad starts

The Rudd government has made a good start, but only a start, on improving standards of governance. One move that is particularly sensible is the complete ban on ministers having personal shareholdings. Any other rule is bound to create grey areas, and politicians being as human as they are, attempts to push the boundaries. That said, I’m sure someone will be found who is silly enough to breach even a clear-cut rule like this. When this comes to light, it’s crucial that Rudd should bite the bullet and sack the person concerned, regardless of their other merits. I’m struck by the extent to which the Beattie government has come unscathed through a string of scandals, largely because, once a breach of the rules became apparent, those responsible were sacked.

The big problem of ministerial accountability remains to be addressed, but at least we have some hope of an improvement in standards of financial probity, which is long overdue. More on this from Tim Dunlop.

Meanwhile, even allowing for a difficult position, I’ve been disappointed by Brendan Nelson so far. Surely, for example, it would be better to leave a frontbench position vacant than to appoint Bronwyn Bishop. On a more serious note, having supported the ratification of Kyoto, Nelson appears to have shifted to opportunistic opposition to anything that would build on this first step.

Bleached

One of my newer research tasks is to look into ways to offset the damage caused to coral reefs by global warming and other aspects of climate change. I’ve been in Cairns at a workshop on this issue, and yesterday we went for a day on the reef snorkelling and diving. Mainly R&R but the trip brought home the severity of the damage caused by the bleaching events* in 1998 and 2002. While the reef is still colourful and full of life, and new visitors have a great time, we were told on the tour that returning visitors often express disappointment. So, climate change is likely to have economic impacts on the tourism sector in the near future.

I made a foray into underwater photography, with results that could charitably be described as “mixed”. Here’s an example of the conseqences of bleaching.

Bleaching

Australia ratifies Kyoto

Almost immediately after being sworn in as Prime Minister, Kevin Rudd has signed the instrument of ratification of the Kyoto Protocol. Of course, it’s only a first step, but one that seemed well beyond us only a couple of years ago.

The formal ratification process will take 90 days, but the effect is that Australia can take part in the Bali conference as a full participant, leaving only one significant holdout – the Bush Administration in the United States.

A significant side benefit for Australia is that our attendance at Bali as a participant rather than a spoiler will help to cement the improvement in our often fraught relationship with Indonesia, evident since Rudd replaced Howard.