December 1st 2001


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Articles from this issue:

Cover Story: Afghanistan: After the fall of the Taliban - the tasks ahead

Editorial: Policies for John HowardÂ’s agenda

Canberra Observed: Election outcome - reality and dreamland

Irian Jaya: Was Jakarta involved in West Papuan leaderÂ’s murder?

Queensland: Boswell beats Hanson, but what now?

Interview: Will Bailey answers development bank critics

LAW: International Criminal Court leads to legal uncertainty

Straws in the Wind

MEDIA: ABC electioneering

Letter: A bad mix

Letter: New patrol boats

Letter: Queue jumping

Interview with Bjorn Lomborg: Science versus name-calling

ECONOMY: The trade news from Doha

WA family debate hots up

DRUGS: Community drug prevention

Books: 'Meaninglessness: The Solutions of Nietzsche, Freud and Rorty', by Michael Casey

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Editorial: Policies for John HowardÂ’s agenda


by Peter Westmore

News Weekly, December 1, 2001

During the recent election campaign, the Prime Minister, John Howard, released a series of action plans which foreshadow substantial government investment in a range of areas, including increased assistance for Australian industry, and greater government expenditure on health, education, tourism, the environment and other areas.

His innovation package, Backing Australia’s Ability, promised Australian industry $2.9 billion over five years, much of which is in the form of tax concessions to business for research and development.

He also made a range of other commitments, including increased support for rural and regional Australia, and a doubling of the number of Australian exporters by the year 2006.

Mr Howard also promised increased defence spending by $32 billion over the next ten years to protect Australia’s borders, improved palliative care, and expansion of the Government’s "tough on drugs" program, including opposition to "shooting galleries" and "heroin trials".

The Howard Government’s change in direction on issues such as rural services, delayed Telstra privatisation, and the ban on Shell’s takeover of Woodside Petroleum, suggests that economic rationalism has run its course - although it has not been totally abandoned.

Welcome as these developments are, much more needs to be done to address the difficulties faced by single income families, small and medium business, and primary industry over the years ahead.

The First Child Tax Refund was a feature of Mr Howard’s policy launch. It will pay back to first time mothers who leave the workforce some or all of the tax paid on their income earned in the year prior to the birth of the child, if she does rejoin the workforce immediately.

Every measure which assists families is welcome; but this taxation concession benefits high income earners, while those on low or zero income have no real incentive to become full-time homemakers.

As the Coalition is, however, determined to help families through the tax system, its plan would be significantly improved if the full refund were to be made available in the first year after leaving the workforce, when the decline in family income is most heavily felt, rather than over a five year period.

It would also give more mothers time to bond with their babies, and so reduce the likelihood of wanting to return to the workforce.

Telstra

In relation to the part-privatised Telstra, the Prime Minister gave an assurance that privatisation would not proceed until services meet acceptable community standards.

If the Government proceeds with privatisation, it will simply cause the re-emergence of the hostility to Telstra which prompted the Telecommunication Service Inquiry.

In its report last year, the Inquiry noted "the frustration of many consumers, particularly concentrated in rural and remote Australia, in getting basic and reliable telephone services connected quickly and repaired in a timely manner ...

"A substantial number of those who contributed to the Inquiry pointed to the problems they experienced as a result of service reliability, dated network capabilities or issues regarding the infrastructure available in their area.

"Many consumers, again with a greater concentration in rural and remote Australia, experience slow data speeds when accessing the Internet. These people are sometimes further disadvantaged in lacking access to the Internet at local call rates."

Privatisation will leave Telstra as a virtual monopoly (like Qantas), chasing larger profits by investing in its most profitable businesses, while services to rural Australia decline.

A better way to proceed would be to separate Telstra’s infrastructure from its retail business, maintaining the infrastructure network - a natural monopoly - as a publicly-owned utility, and privatising Telstra’s retail services, which can equally be provided by Optus, Hutchison or other telecommunication companies.

Such a policy would avert the further waste of resources as competing telecommunications companies pour billions of dollars into things like optic fibre cable and Third Generation mobile phone networks, ultimately paid for by consumers.

On industry policy, there is a pressing need for a new Development Bank, as suggested by Will Bailey. It could help establish thousands of new businesses.

Rural and regional development requires all three levels of government - along with local industry and regional development economists - to determine what infrastructure is needed for regional growth.

Australian manufacturers have called for effective anti-dumping policies, to stop the flood of subsidised manufactured, food and fibre products that are destroying the domestic market for Australia’s highly effective industries, aggravating the current account deficit and the foreign debt.

The immediate future of Australia will depend largely on whether the Howard Government has the courage to make the hard choices.

  • Peter Westmore is President of the National Civic Council




























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