November 24th 2012

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Articles from this issue:

EDITORIAL: Obama's re-election: what it means for Australia

CANBERRA OBSERVED: Behind the collapse in the Greens' vote

IMMIGRATION: European crisis should open door to new migrants

LIFE ISSUES: Assisted suicide rationalised by misguided motives

EXPORTS: Restarting Australian agriculture: what needs to be done?

PRIMARY INDUSTRY: US grain giant's $2.7 billion bid for Australia's GrainCorp

ECONOMIC AFFAIRS: Dow chief's plan for rebuilding Australian manufacturing

POLITICAL IDEAS: Hilaire Belloc's The Servile State: a centenary reflection

QUEENSLAND: Will LNP reverse Labor's council amalgamations?

SCHOOLS: Asia white paper used as pretext to push radical agenda

OPINION: Need for self-control and civility in politics


CINEMA: Violent journey into the heart of darkness

BOOK REVIEW: Marital status the most reliable social indicator

BOOK REVIEW A unique historical record

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Obama's re-election: what it means for Australia

by Peter Westmore

News Weekly, November 24, 2012

Despite the closeness of public opinion polls in the week before the US presidential election, on election day almost every closely-contested state swung to President Obama, with the result that the vote in the US Electoral College was a convincing 332 votes to 206. Democrats who expected a close race were exuberant. Republicans were devastated.

However, in the cold light of day, it is clear that the US elections almost exactly restored the status quo. President Obama has been comfortably re-elected, but he faces a Republican-controlled House of Representatives with almost the same majority as before, and a Democrat majority in the Senate.

In other words, the American people voted to continue the impasse which had characterised relations between the President and Congress for the past two years.

The president’s first priority is to deal with the stalemate over the US Budget. For years, both sides have claimed that the Congress would have to cut the US deficit, and under laws passed previously, at the end of 2012, tax cuts will be abolished and cuts will automatically be made to US government programs.

While both sides have said that they want to compromise, Obama has insisted that high-income earners will have to pay more tax, whereas Republicans have rejected higher taxes and insist that other government programs must be cut, including President Obama’s expensive new Medicare program.

While some compromise could be reached, both sides are digging in for battle, and the uncertainty is paralysing the confidence of both US consumers and America’s trading partners, particularly exporting countries in Asia, notably China.

With China’s economy slowing, the probability is that commodity prices will stall, with damaging effects on investment in the mining industry — one of the engines of the Australian economy.

One of the more extreme proposals being aired in the United States to address the looming budget crisis is the introduction of a carbon tax. Despite claims by Administration officials that no such tax is pending, a previous attempt to implement a national US emissions trading scheme failed narrowly in 2010 when it stalled in the US Senate after narrowly passing the House of Representatives.

With low-tax Republicans now controlling the House of Representatives, it is inconceivable that the House would now support a carbon tax.

Additionally, the European Union’s emissions trading scheme is a shambles. Despite repeated claims that the EU would “go it alone” on emissions trading, the eurozone financial crisis has cut the price of carbon permits from around $40 a tonne in 2008 to about $10 today, and there is a glut in available carbon permits.

The Gillard government’s carbon tax of $23 a tonne of coal has already pushed up electricity prices for consumers, and can be expected to have a negative impact on small business and job creation in the months ahead.

During the election campaign, President Obama announced his support for “same-sex marriage”, and in four states — Maine, Washington, Maryland and Minnesota — voters endorsed this stand.

While these states are the first in America in which voters have supported “same-sex marriage”, the margins in each state were close, 52-48 or closer, and each of these states is strongly Democrat and, generally, among the most left-liberal in the United States.

Nonetheless, Australian Marriage Equality and other supporters of same-sex unions in Australia have already flagged a new push in Australia.

The French government of François Hollande has announced that it will introduce “same-sex marriage” legislation, as has David Cameron in the United Kingdom.

These moves will ensure that the campaign in Australia will continue. The push for state-based legislation supporting “same-sex marriage” could have success in NSW where Premier Barry O’Farrell has offered Liberal MPs a conscience vote on the issue.

Despite this, at the national level, a vote in the Australian parliament is unlikely to succeed — at least while Tony Abbott leads the opposition. The campaign to replace Abbott, the most successful Liberal leader since John Howard, is therefore continuing apace.

In the long run, perhaps the most serious consequence of Obama’s re-election is that it will result in massive cuts in US defence spending, as Washington grapples with the deficit, and the war in Afghanistan winds down.

Despite claims to the contrary, this will reduce America’s commitment to its international peace-keeping initiatives, not only in north Asia where tensions between China and its neighbours could flare at any time, but also in the Middle East, where American naval vessels have kept the peace in the Persian Gulf for years.

Little wonder that a senior US defence official expressed concern about Australia’s defence cuts before the recent defence talks in Perth (Sydney Morning Herald, November 10, 2012). The world is becoming more unstable, and Australia’s own cuts to defence expenditure could make this even worse.

Peter Westmore is national president of the National Civic Council.

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