October 18th 2003

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Articles from this issue:

COVER STORY: ENVIRONMENT: Don't spoil a good story with the facts ...

CANBERRA OBSERVED: Reshuffling the decks

AGRICULTURE: Unrestricted water trading a danger to farmers

FEDERAL ELECTION: Deregulation, drought, the dollar and the $7.5 billion surplus

FAMILY: AFA Conference calls for strengthening of marriage law

COMMENT: Poor always the losers in a middle class game

LETTERS: WA capitulates on Competition Policy (letter)

LETTERS: Taiwan and the UN (letter)

LETTERS: First Mildura Irrigation Trust (letter)

LETTERS: Rural economy (letter)

LETTERS: The future of rail (letter)

TAIWAN: Making strides in biotech

STRAWS IN THE WIND: Flying down to Rio / Shooting stars and black holes / Digging holes and filling them up again

RELIGIOUS AFFAIRS: Dr Pell's new appointment welcomed

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Flying down to Rio / Shooting stars and black holes / Digging holes and filling them up again

by Max Teichmann

News Weekly, October 18, 2003
Flying down to Rio

The youngest of my remarkable sons is touring South America, travelling mainly by foot and in old buses. Having learnt enough Spanish from a previous sojourn in Guatemala and Mexico, the six months he has spent so far this time are quite illuminating. After one of his emails, I ventured the opinion that we, here, are the spoilt children of paradise, feeling that boredom and satiety are worse than hunger and insecurity.

Bolivia, where he has stayed for weeks, is the poorest country in South America. Touring a giant silver mine which has been operating since 1545, he was told that if all the silver extracted from this mine - first by the Spaniards and then, until the present - was put end to end, it would reach Europe. Bolivia obviously has not benefited.

Because of the great depth at which mining now proceeds, the temperature is around 40-45 degrees celsius. Miners cannot eat while down below, because their food suffers arsenic contamination. So, they chew coca leaves during their 10-12 hour shifts.

Their working life is ten years or so, by which time their health is irretrievably ruined. The guide had laboured for five years from the age of 15, then managed to find work above ground. This, he felt had saved his life.

I remember reading, over decades, of riots and insurrections around this mine - always put down by troops or police. Nothing has changed. So little employment is available, that plenty of new workers are always waiting. This is the story of South America and of much of the world.

Asked whether he thought if these admirable people - friendly, hospitable and attractive - would ever get out of their trap and make a good life and stable countries ... my son is baffled. Many, many things would have to change - including attitudes. A deep mistrust of successive governments in so many countries there, based upon the politicians' very untrustworthiness, is part of the political tradition. And the rich, the powerful and the educated hold all the cards in the game against the majority poor. No great hopes are reposed in the IMF or World Bank - except the hope that they don't make things worse. Many observers think that they do.

Anti-Americanism is ubiquitous: they are the culprits. But this callously unequal system was well-established much earlier than when Uncle Sam turned up.

Religion is still one of the main emotional supports - so, what the Church's roles should be in this situation is, as readers know, the subject of continuous debate among Christians. Here too, there are no easy answers.

"Lovely continent to visit, with beautiful people. But to live there? Only if you avoided looking at the poor," he thinks.

Shooting stars and black holes

One of the most endearing spectacles of our time is Tony Blair: the way he handles his party, the way he deals with foreigners, his unconcealed dislike of the British press, and the dislike they can't conceal for him.

This last dislike is faithfully reproduced by much of our media, with the result that both report actual, as against desired events, with numbing inaccuracy. For months he was "on the ropes", his government was in disarray - it was said - the Spectator had someone each issue, under the same headline, "Blair must go". The Labour Conference just passed, was to be his last.

In fact, he had the Conference eating out of his hand, finishing with the longest standing ovation (apparently) - seven-and-a-half minutes - in the history of the Labour Party. Each your heart out, Stalin!

Having first had all mention of Iraq in the form of motions, etc., removed from the notice paper, he put on a bravura performance of a quality that I have rarely observed.

The media's response to this total silencing of his critics was bemusement, then virtually ceasing to report this vital conference. Deutsche Welle which was no more pleased than the British media, at least told us enough of the story. But now the face-saving starts once more.

Robin Cook, who resigned from the post of Foreign Secretary under Blair, has produced a critical memoir which, judging from extracts in the Sunday Times, sound as exciting as George Formby's My Days at the Hippodrome. But he is the media's latest Weapon of Mass Destruction (WMD). Blair, I think, and he is still developing, is performing against remarkable odds better than Harold Wilson or Margaret Thatcher, or even Macmillan. And can anyone remember Callaghan, Major, Heath, Foot? Labour has a winner - and knows it. Can they contain their envy?

By contrast, Germany's Chancellor Schroeder is enduring a nightmare which will not go away. In another barely reported state election, this time in Bavaria, Germany's most prosperous state, Schroeder's Social Democrats polled their lowest since the war. Their vote fell from 28 per cent to 18 per cent. If the German Chancellor wishes to succeed in passing his timid reforms of the welfare system - the cost of which has become the burning issue - he will need the opposition to support him. For part of his own left-wing might bolt.

Having scraped back a year ago on Iraq and anti-Americanism, he finds, like Labor here, that it is an expensive hobby. Europeans are praying that their bogeyman - America - will recover economically so that they can be lifted in the slipstream. Otherwise, they wallow, and Germany declines further - and this is the rival power bloc to the USA! Whereas Britain prospers by sticking to Uncle Sam, and mumbling sweet nothings to everyone else. Well ... not quite everyone.

And it is the strategy which Howard and Downer are duplicating with great finesse.

Digging holes and filling them up again

Peter Costello and Treasury Secretary Dr Ken Henry, have been talking about the increasing mismatch between those in the workforce and those out of it, and how the former are facing an ever-increasing tax burden, so as to provide for more and more citizens who are drawing on one or other of the hundreds of different kinds of social welfare. A slow crisis of fiscal sustainability is moving though the West with countries like Germany and Sweden in deepest trouble. The more generous, the more all-inclusive the welfare, the deeper the trouble.

Mr Costello said 41 per cent of the population would be outside working age by 2042; whereas our present figure is only 19 per cent. Five working people support every retiree at present; whereas two-and-a-half will have to support everyone outside the workforce then.

All things being equal, all those in work will have to pay twice as much as they do now.

Dr Henry thought Government might need a GST rate of 22 per cent rather than the current ten per cent, and, "The government services and infrastructure we take for granted may also disappear from the balance sheet."

The keys to the growing crisis are the declining fertility rate, the increasing longevity of the population, and rates of economic growth greatly reduced from those of the first of five decades following the war. In Western Europe zero economic growth or worse settled over key nations as it did over Japan. In a global community which, since the war, has believed that the way to grow is in expanding trade and investment, the stagnation or worse of some economies drags down the rest.

Peter Costello is suggesting a voluntary raising of the retirement age - a change which he thinks many who are confronting approaching retirement would greatly welcome. And so they would, financially and psychologically. But ... would they stand in the way of new hirings or others awaiting promotion? Would they accept a more junior or diminished role in the workforce? Employment agencies are reporting intransigence on this matter from many retrenched or retired workers.

Mr Costello is also concerned at the ease with which 55 year olds can draw on their nest eggs and drop out. The loss to the community - their experience, their contributions to revenue and, just possibly, to their long-term psychic health - may be considerable.

Should it be made more difficult for people to raid their super at this age, he asks?

Tony Abbott, now that he has taken over the black hole of health, is concerned with the number on disability pensions, and how these numbers have greatly increased, and are still increasing. As in Italy in the 1950s, as I discovered, massive unemployment, especially in the south, was being concealed by disability pensions. There were seven million disabled pensioners in Italy, most of them in the south. As jobs were created, many of them recovered their health. The Italian Miracle that economists speak about?

Something like that has been going on here. It is, for example, a way of handling refuseniks, who are quite numerous among the young. You could say they are disabled: psychologically, either for work or training. What to do? Returned to the dole, they swell the ranks of long-term unemployed. Governments are blamed for this. Blamed, irrespective of the real reasons for many, especially the young, never working. But Mr Abbott feels this problem has to be confronted.

Finally, more-and-more of us are pointing to a developed world, but one without work. The fruits of growth without job creation; or economic rationalism - growth with job destruction. So, many of the devices which seem duplicitous, and as letting people off the hook, appear rather different when you consider the alternatives. So ... padding the public payroll, keeping young people in large numbers in implausible and dead-end forms of "education", disabled pensions, and wasteful public works a la the pharoahs, still seem better than the dole. So, late capitalism and runaway technology are conspiring to make humbugs of us all.

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