March 10th 2001

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Articles from this issue:

COVER STORY: Nationals: the last hurrah?

EDITORIAL: Government embraces the politics of panic

CANBERRA OBSERVED: Competition Policy the next to go?

INDONESIA: Borneo violence further weakens Wahid

NATIONAL AFFAIRS: Why refugees are a soft target

Help needed for North Queensland farmers

DRUGS: Drug policy criticised by international board

Straws in the Wind

Letter: Kim Beazley - look at the record

Senate inquiry attacks NZ apple import proposal

ECONOMICS: Trade blocs - where will Australia fit?


HUMAN RIGHTS: Amnesty Report may sink China's Olympic bid

HEALTH: Lessons of SA abortion experience

COMMENT: Paul Lyneham - Australia's H. L. Mencken

Teen books gone from "honest" to "offensive"

Letter: Refugees - coarsening of attitudes

Letter: Alice Springs - Darwin railway

Letter: One Nation

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Government embraces the politics of panic

by Peter Westmore

News Weekly, March 10, 2001
The shockwaves which have blasted through the Liberal and National Parties, following the landslide victory of Labor's Geoff Gallop in Western Australia, and the even more decisive win by Peter Beattie in Queensland, have forced the Federal Government to make a U-turn on petrol prices, modify the GST, postpone Mr Costello's plan to tax family trusts like corporations, and bring forward major road construction projects for regional Australia.

These represent a knee-jerk reaction by a poll-driven government to a collapse in its approval ratings.

It does not signify that Mr Howard, or his Government, is reversing its commitment to economic rationalism and the ideology of globalism, the set of economic policies based on the assumption that global prosperity will be maximised when all artificial barriers to the transfer of capital, goods and services throughout the world have been removed.

In fact, the Coalition Government is being pressured by its key business constituencies, represented by the Australian Industry Group and Australian Business Council, to hold the line on economic reform, and a key advisory body, the Australian Bureau of Agriculture and Research Economics (ABARE), last week warned that it was "too late" - whatever that may mean - to wind back the reform process.

All the signs are that we are at the beginning, not the end, of the shake-up which extends beyond the Coalition, and will now determine the direction which politicians, their minders and bureaucrats have taken Australia over the past 20 years.

A clear reflection of this was the decision of Natasha Stott Despoja, an opponent of the GST, to challenge Meg Lees for leadership of the Australian Democrats, following the collapse in the Democrat vote in WA and Queensland.

Under the mantra of National Competition Policy, gas, rail, water, electricity and local government services have been deregulated, leading to job losses throughout rural areas.

Support programs for industries such as dairying and sugar have been abandoned, the push continues to deregulate the rice and wheat industries, while serious deficiencies remain in the provision of communications services, outlined last year in the Telecommunication Services Inquiry.

In the meantime, incomes for many primary producers continue to fall, while there is an almost complete absence of what used to be called decentralisation policies, to encourage the establishment of viable industries in rural and regional areas.

While the rural backlash, alone, may well bring about the defeat of the Howard Government, it is only part of a much deeper problem which arises from successive governments' adherence to economic rationalism in Australia, and at the international level, globalism.

It is unlikely that a change of government alone will address these issues. In an interview with the leading Sydney journalist, Alan Jones, on February 16, Labor's Mr Beazley confirmed his position as being "between globalisation which leaves people behind, and globalisation which includes all of our fellow citizens".

The rejection of a resolution in favour of "fair trade", in favour of "free trade", at the last ALP National Conference, reinforces the view that a Labor Government would go down the same road, but at a slower pace. Senator Cook, Labor's Shadow Minister for Trade, repeated that view last week. (Financial Review, February 27, 2001)

The policies which have brought Australia to its current impasse can be reversed by the careful adoption of a set of policies, currently practised by other countries, including:

* Reducing Australia's foreign debt by vigorous support for Australian industries - agricultural, manufacturing, mining and services - as is done in Europe, the US and Japan. A major infrastructure program, such as that proposed by Professor Lance Endersbee, is an important component of this, as is a policy favouring Australian manufactured equipment for the Defence Forces.

* Insistence that foreign corporations in Australia pay their fair share of tax. Currently, only 20 per cent are reported to pay company tax. Foreign corporations repatriate $30 billion of interest payments overseas every year, all of which is tax-free. Their tax avoidance is entirely legal; but it imposes unfair burdens on other taxpayers, and gives foreign corporations an unfair competitive advantage against Australian competitors who have to pay their taxes in Australia.

* Encourage the superannuation industry to invest in Australia the $100 billion currently placed off-shore, as Singapore has done, to develop industries and jobs in Australia. This would provide a capital pool for industry, national development and infrastructure.

* Establishing government-run banks, on the model of the now abolished Commonwealth Development Bank and Primary Industry Bank, to meet the deficiencies in the existing banking system. Interestingly, New Zealand which led Australia in deregulating its banking system in the 1980s, and where all its major banks are now foreign-owned, has decided to establish a new government-backed bank. (Financial Review, February 21, 2001).

If these and other policies are adopted, Australia can build a secure future as a free and independent nation.

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