China Share Meltdown Shows Folly of Too Many Eggs in One Basket

China is our largest trading partner – our largest export market and our largest source of imports. Last week there was a hearing of the Joint Standing Committee on Treaties on the China Free Trade Agreement. At that Hearing I asked a Department of Foreign Affairs Deputy Secretary whether such a great reliance on China made Australia vulnerable to their economic fortunes, and asked whether Australia might be better served by trying to diversify, or become more self-reliant.

The Deputy Secretary's reply expressed puzzlement at my describing our trade relationship with China as making us potentially vulnerable. She was clearly of the view that the more trade the better, and that we could not possibly have too much of this good thing.

But I think the dramatic events on global share markets in the past week have borne out my concern. Commentators have regularly mentioned how dependent Australia is on China, using expressions such as "If China sneezes, Australia catches a cold". We are referred to as one of the commodity exporting countries at risk if China's growth is less than expected.

The fact is that we have put a lot of eggs in the China basket. For the past thirty years we have engaged in an experiment, putting our faith in globalisation and free trade. We have allowed our manufacturing industries to go to the wall and have allowed our economic base to narrow. As a result we are less self-sufficient and more vulnerable than we used to be more vulnerable than is good for us.

This is one of the reasons for my concern about the China Free Trade Agreement. I hope the Department of Foreign Affairs and Trade and the Australian Government will take a good hard look at what has been happening in the past few months, and rethink a strategy that is all about commodities and to hell with manufacturing. Australia needs to be more independent, self-sufficient and self-reliant than the policies of the past thirty years have left us.

Tax Cuts Less Important than Balancing the Books

After its election the Liberal Government waxed long and hard about what it called a Budget Emergency. There was no end to the shrill and hysterical rhetoric about the state of the Budget and the prospect of Budget Deficits into the future.

The Budget Emergency was used as the alibi for all manner of attacks on public services and lower income earners in the 2014 Budget. It was the justification for the cutting of pension indexation. It was the justification for the deregulating of fees for university students. It was the justification for a new payment to visit the doctor. It was the justification for cuts of billions of dollars in health and education for the States. It was the justification for cuts to foreign aid, legal aid, and the ABC. It was the justification for abandoning the promise to implement the Gonski funding which had been promised to schools.

When we voted against these broken promises, these harsh and counterproductive austerity measures, the Labor Opposition was attacked relentlessly for sabotaging the Government's efforts to "repair the Budget".

Then, disappearing almost as suddenly as it came, the Budget Emergency vanished. The 2015 Budget took a new tack altogether. The Government stopped talking about it, and if asked about it, suggested they now had the problem under control.

But the fact is that the Budget Deficits are still there. And yet Treasurer Hockey now talks about tax cuts! What a lightweight Joe Hockey is. He is totally incoherent on the subject of economic management. He must think the Australian electorate has the memory of a goldfish, that people will forget that only last year he was lecturing us day in day out on the need to balance the books.

 
The fact is that balancing the books does matter, and we should not be talking about tax cuts – and note that it is only talk, there is no substance to this talk whatsoever – until we have the books in a healthier condition, and have taken serious action to crack down on tax avoidance. It is not prudent or responsible to spend money we don't have, and Joe Hockey damages the credibility of politicians generally when he abandons the idea of fiscal discipline without any rational basis for doing so.

Garfield Barwick=Liberal

Garfield Barwick was a Liberal MP, then a Liberal Government Attorney-General and Minister for External Affairs. He was appointed to the High Court by a Liberal Government, where he proved controversial, ruling in favour of tax avoiders and giving under the radar advice to John Kerr which was highly prejudicial to the Whitlam Government. His autobiography was titled “A Radical Tory”!

So when you get invited to give a “Garfield Barwick” Lecture, you don’t need the forensic skills or analytical ability of a High Court judge to suspect that the Lecture might be a Liberal Party show. Dyson Heydon’s position as Royal Commissioner is untenable and he should resign from it.

Shooting the Environment Messenger

If there was a narrative about the Liberal Government it is one of payback and punishment, in this case, of environmental groups who dare to have the temerity to challenge projects, as environmental groups should when environmental damage is foreseeable

The announcement yesterday of proposed changes to the Environmental Protection and Biodiversity Conservation Act to repeal a section of the Act that allows green groups to mount legal challenges to environmental approvals is all about the government not accepting the umpire’s decision. This is following the Federal Court forcing the Government to reconsider its approval of Adani's $16 billion Carmichael coal mine because Environment Minister Greg Hunt had not properly considered the impacts on the yakka skink and ornamental snake.

The Mackay Conservation Group launched its legal challenge in the Federal Court in January, alleging that greenhouse gas emissions from the mine, vulnerable species and Adani's environmental track record had not been taken into account. "The Minister conceded that he had made an error and Adani did as well that the proper process hadn't been followed in approving the Carmichael mine. He is required to take advice from his department on threatened species into account and he didn't do that,” Mackay Conservation Group coordinator Ellen Roberts said.

Rather than seeing a failure in the Minister’s lack of due diligence, the Government has decided to shoot the messenger.

The Government's claims the EPBC Act is costing jobs is not borne out by the facts. Since being passed by the Howard Government 15 years ago, the EPBC Act has been the overriding national environmental protection law, including throughout the mining boom – and environmental groups are required to operate within this law.

Very few projects are legally challenged, and hardly any have been stopped. Adani has not been stopped, it has simply been required to comply with the law, as it should be.

 
Labor will not support weakening environmental protections or limiting a community's right to challenge Government decisions.

Government Ignores Climate Change Authority on Greenhouse Emissions

The Liberal Government's announcement that it plans to reduce greenhouse emissions by 26-28 per cent below 2005 levels by 2030 falls a long way short of what is needed to effectively tackle extreme weather events.

Its claim to be comparable with the United States is utterly misleading. The US plan is indeed for 26-28 per cent reductions, but by 2025, not 2030. How on earth can we claim to be going as fast as the United States when it will take us 5 years longer to get there?

Moreover the Liberal target is way short of the recommendation of Australia's Climate Change Authority. The Climate Change Authority was charged with taking into account not only climate science and current and future climate change impacts, it was also tasked with examining what other countries are doing, and the economic and social impacts of climate action. Its investigation was comprehensive and its recommendations deserve to be treated with the utmost seriousness.

The Climate Change Authority recommended that we get 15 per cent below our 2000 level by 2020, 30 per cent by 2025, and 40 to 60 per cent below our 2000 level by 2030. Our 2000 level was 560.78 million tonnes of carbon dioxide equivalent (Mt CO2-e). Therefore the Climate Change Authority has recommended that we get to 476.66 Mt CO2-e by 2020 and at least 336.47 Mt CO2-e by 2030. So we need to get well under 350 million tonnes of greenhouse gases by 2030.

But the 26 per cent below 2005 levels which the government says is acceptable is a 26 per cent reduction on 611.93 Mt CO2-e, the 2005 figure, that is 452.82 Mt CO2-e. So by 2030 instead of being under 350 million tonnes of greenhouse gases, we would be over 450 million tonnes!

The Climate Change Authority worked out its recommendations taking into account the agreement by all countries, including Australia, that we need to stop global temperatures from rising by more than 2 degrees Celsius, and working out an Australian carbon budget which tried to make things fair both between us and future generations, and between Australia and other countries.

The bottom line is that 450 million tonnes is not fair between us and future generations, is not fair between Australia and the rest of the world and will not be accepted as fair, and that it will not stop global temperatures rising beyond 2 degrees Celsius, which climate scientists have made clear will usher in an era of chaotic and uncertain weather for the planet. The recommendations of the Climate Change Authority deserve more respect.