A Return to Realism in Australia

ImageNOTES ON THE NEWS: Returning to Australia a spell in Europe is an interesting experience – Kevin Rudd back at the Lodge, another switch in immigration policy, the opinion polls putting the main parties neck and neck, and Treasury ministers (finally) admitting the economy is all over the place.

Very little of this was reported in European media, and when you are on holiday you want minimum exposure to the web, given the extortionate charges for snail-like internet connectivity or global roaming. It makes you realise that the National Broadband Network – when built and under new leadership – will be a prime asset for Australia.

I learned of Julia Gillard’s removal from the London Daily Telegraph, which claimed that her demise was the result of a “blokey” culture , a view reinforced by a second article in the same edition by sad John McTernan, her unfortunate media adviser. This strained credibility almost as much as the stunt portraying Gillard knitting for bonny Prince George. It’s not clear whether she took advantage of the UK Daily Mail’s offer of an ‘ABSOLUTELY FREE Royal Baby Bear Knitting Kit. ‘

On a more serious note, the change in policy towards boat people may not have caught much global media attention – after all our numbers are small compared with the tens of thousands that have infiltrated Europe – but the switch did damage our reputation at United Nations headquarters, this in the year in which we take our seat on the Security Council.

The Rudd government is unmoved. It said this weekend that its PNG solution will accommodate 10,000 boat people, and also has signed an agreement with Nauru, enraging those who, like Greens’ leader Christine Milne, believe Australia should adopt less harsh policies.

However, ministers in Port Moresby say Papua New Guinea is not expecting such large numbers to settle in the country, meaning that either Rudd’s new policy will deter boat people from setting off, or that many PNG arrivals could be denied refugee status. The first will be regarded as a success, but the second will leave the authorities with the difficult task of establishing if claims are genuine, and getting them back to their country of origin if not.

The Government is budgeting $1.1 billion for this policy over four years, but that is the least of it. Camps have to be built and manned and secured. These are tasks that will go by contract to a grateful private sector, because few of Canberra’s public servants will be involved in building work or day-to-day care and control.

Arrangements have to be made for the health, education and welfare of all boat arrivals in PNG and Nauru. These need to go beyond the basics to psychological assessments and issues of mental health. I was interested to see that the NSW Government is now training all its police officers in core mental health issues – a wise move that needs to be extended to those manning the boat peoples’ camps.

The best news upon returning home was to find the Rudd government starting to face up to its declining finances. For several years we have had to put up with people like Gillard and former treasurer Wayne Swan telling us how well off we were – arguments that were too easily swallowed by some economists and the illiterate end of the business media.
Now we know the truth. But it’s not only Wayne Swan’s forecasts that have been wrong.

The Treasury’s track record is none too good. As Alan Kohler said on ABC’s Inside Business the Government has been “hopelessly caught out”.

It’s a far cry from those optimistic speeches from Treasury secretary Martin Parkinson, when he reprimanded the pessimists like a stern head master. The Treasury, like many others, misread the symptoms of the China slowdown. Double digit Chinese growth was never going to be sustainable, but those of us at the AIIA NSW that forecast a fall to 7 per cent were mocked at the time.

There is a tendency now for some of those who misread the Australian economy to blame the latest numbers on problems in the United States and Europe. I have news for them. Despite difficulties, the United States is creating jobs as fast as Australia will lose them.

The US economy is recovering, and Europe has just exp-experienced its first quarter of growth for a long time. Australia’s problems are its own.

Colin Chapman is president of the AIIA in New South Wales, and a former BBC economics correspondent.

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