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Not the Asian Century White Paper
Tomorrow the Prime Minister will launch the Australia in the Asian Century White Paper. This document, which will plot a way forward for Australia in what is already considered to be the “Asian Century”. It will act as the government’s version of a SWOT analysis. The paper will examine the real internal strengths of Australia and external factors that lead that do contribute to our strengths as we continue to engage in the region. The paper will also look at our weaknesses in terms of trade in particular, but also security. The paper will look at the opportunities for Australia in the Asian century, with whom we can engage more to our benefit. Finally, the document will also look at the threats in the region.
In a way, the Asian Century White Paper is behind the times. Trade with Asia already makes up about 70% of Australia’s international trade. This makes it appear clear, as do public statements, that the blueprint is more about the rise of China and to a lesser extent India, than it is about looking at the strengths, weaknesses, opportunities and threats that exist in the Asia-Pacific area. As such, the possibilities of greater relations with the “Asian Tigers” and rapidly growing Asian economies will likely not receive much press.
This examination will look mostly at the bilateral activities Australia undertakes currently, could enhance or could begin to participate in and less at the specific domestic policy directions necessary to cope with living in a strong and prosperous Asia.
Undoubtedly, the Asian White Paper will say that China is the country, above all others to focus our energies on. You would be hard-pressed to find many who would say otherwise. We need China and they need us. Our commodities are prized by China and we source cheap goods from the Asian powerhouse, now the second biggest economy in the world after overtaking struggling Japan. To this end, concluding Free Trade Agreement negotiations with China is an absolute must.
Some will have you believe that China also serves as one of the great uncertainties of the Asian Century. “Reds under the beds” is not a worry that should be occupying the mind’s of our people. China’s continued growth will almost certainly be one of peaceful empire. Their growth is because of the embrace of market economics and China is communist in name and some aspects of internal behaviour only. The military build-up in China is entirely consistent with the growth of the country as a world power and countries like the United States of America have nothing to fear except for loss of economic dominance. 
In terms of Japan, our second largest trading partner, the future of the economic relationship at least is not as certain. The economy of Japan has been battered by high levels of debt, natural disasters and unstable economic leadership. In saying this though, the relationship with the nation of islands should be maintained with caution and buttressed by increasing economic cooperation with other nations in the region. However, it is in our interests to continue to proceed with free trade negotiations with the Japanese.
Trade relations with South Korea continue to be strong with the nation, as of 2011, being our 3rd biggest export market. We have commenced Free Trade Agreement negotiations with Korea, but the discussions have hit the final hurdle. The agreement was supposed to have been concluded by now, but negotiations are ongoing.
Our next biggest market, is also our second biggest opportunity as the growth of Asian economies explodes. That nation is India. This is a nation with economic growth to rival that of China. While India is not in a position to rival China in terms of the size of her economy, India does provide opportunities. This includes, somewhat contentiously, uranium exports which are now being negotiated and also the restoration of Indian confidence in Australia’s safety for the large overseas student and tourism market the nation of the subcontinent can and has provided. Finalising the Australia-India Comprehensive Economic Agreement is also a necessary step in continuing to open up India to Australia and vice versa.
There are other nations of Asia in the list of our top 10 training partners too. In fact, Asian countries make up more than half of those nations. Also in the top 10 is Taiwan, Singapore and Thailand. With both Singapore and Thailand we have established Free Trade Agreements. However, in the case of Taiwan, there is no economic agreement being negotiated, awaiting approval or in force. Perhaps an opportunity lies there, perhaps we are frightened to pursue one for fear of causing China offense or perhaps our priorities are not mutual.
There are also other Asian states that are outside of the 10 biggest Australian trading partners with which we have already or are in the process of negotiating or approving FTA’s. There is an ASEAN-Australia-New Zealand Free Trade Agreement which includes Brunei, Myanmar, Cambodia, Indonesia, Laos, Malaysia, Singapore, the Philippines, Thailand and Vietnam. This includes nations such as Singapore, Thailand, Indonesia and Malaysia with whom we either have individual FTA’s or are in the process of either negotiating or seeking domestic approval for.
In a broad sense, continuing to pursue the recently commenced negotiations over the Trans-Pacific Partnership Agreement is also a must and will only enhance economic relations with both Asia and other parts of the world.
So in terms of economic cooperation in the Asian region and into the Asian century, the task is not really to establish new markets, but rather to consolidate and build upon those already available to Australia. In the case of the services sector in particular the task is returning it to the vitality we know. Particularly in the case of tourism this will be a lot easier when the price of the dollar lowers and economies recover.
In terms of economic engagement with Asia and the focus that it is given, it is a positive but has the potential to be a negative from time to time. Putting too many eggs in the Asian basket might expose us to regional shocks. So far, with the economic activities we undertake in Asia though, we have managed to avoid major damage to our economy when other countries in the Asia-Pacific have not been spared. But the possibility of exposure to risks should still be in the front of the mind’s of our policy-makers.
New Zealand and the other Pacific Island nations must also factor into the Asian equation. They are as much a part of Asia as we are. New Zealand is our greatest ally in the Asia-Pacific region, a long-term friend and economic partner and we will continue to share and grow our economic relationship and broader bilateral relations with her.
In terms of security, the most volatile place in the Asian region, the place that has the potential to most impact on our security, is Indonesia. Enhancing current cooperation with Indonesia on counter-terrorism efforts is a must. However, this must not be at the expense of combating homegrown terrorism on Australian soil.
It is certain that we will be seen to be deeply connected with the USA . We can, will and should make clear that our actions in the region will be peaceful and aimed at trade and our ongoing security, rather than offensive actions and manoeuvres that constitute a threat.
In terms of China, as stated earlier, it has been quite easy for some to classify the economic growth and consequential militarisation of China as a threat. This eventuality though, as stated before, appears hard to fathom. On the other hand, disputes involving China and her nearer neighbours, currently festering, do have the potential to develop into problems for those nations. By and large, these are conflicts Australia can remain independent of.
With regard to people movements, Indonesia as well as Sri Lanka and Malaysia will remain central to our efforts in cutting down on irregular people movement. We would be foolish to ever imagine that we as a country or even the wider Asian region could solve the complex issue that is asylum seeker movements.
Later on in the Asian century it is also reasonable to keep in mind the potentially significant movement of people in our region brought about by climate change. The scale of this is hard to calculate, but the prospect must be factored into equations. Australia as a rich and prosperous country would be expected to take up the majority of the resettlement burden in such circumstances.
Overwhelmingly the opportunities for Australia in the Asian Century are good. The positives far outweigh the negatives. We must however be careful of too much dependence on the region and too much nation specific interaction within the Asia-Pacific.
We must think, for the century ahead, well beyond commodities and to sources of renewable energy. An ongoing and healthy services sector is also a must as resources begin to diminish.
There is the possibility of regional instability, but much of that should not have consequences for Australia. The major threat will continue to be terrorism with hatred fomented and potential non-state actors trained in Indonesian camps in particular.
We will be seen as one of America’s deputies in the Asia-Pacific, along with South Korea and Japan as well as New Zealand to some extent. In reality though, this should not colour the way we interact in our geographical region nor the way in which our peaceful advances are received.
People movement will continue to be something Australia experiences for as long as there is security and economic concerns in nations around the world. Later in the century this will probably be exacerbated by climate change, particularly in the low-lying areas of the Asia-Pacific.
Australia must not be happy with the status quo. Moving towards greater engagement and cooperation not just in Asia, but the world, is the answer to making the most of the opportunities and the threats that we and the region already experience and may encounter in the future.
Time to Throw Aside Politics and Support our UN Security Council Efforts
In the early hours of the morning Australian time, voting for the two-year temporary seats on the Security Council. Five years in the making, we thought that the ballot would be tight, that it might take until the second round of voting, if at all, before we secured one of the two vacancies on offer. The odds were good, two out of three nominees would get up. Our competition was Luxembourg and Finland, with many believing the latter to be the overwhelming favourite to secure the first spot.
Ultimately, and surprisingly, Australia prevailed after the first round. One hundred and forty votes was more than enough to get us over the line in a contest requiring 129 votes, a two-thirds majority of the UN General Assembly.
The importance and efficacy of the position on the UN Security Council was questioned by some. What could a temporary spot on a flawed body, where a veto power exists, offer Australia? That was the main question asked. The absence of an explanation, other than having a seat at the table, surely added to the confusion and a lack of interest domestically over what such a role might bring.
In effect though, a short-term chair on the UN Security Council will actually mean little or nothing in the short-term and even less in the long-term.
However, while the benefits of having a spot on the Security Council are few and far between, now that we have won the election, it is important that the role is taken incredibly seriously despite the fact that there are many factors which make the role practically pointless.
Australia must, over the two-year term, make a lot of noise and throw itself at the role without fear or favour. To not now fully and actively engage with the actions and processes, whether flawed or not, would actually damage our relative standing in the world.
This government and the next must be willing to sufficiently fund the position for the entire period we occupy that temporary spot. By virtue of the fact that the Labor Party, through former Prime Minister Kevin Rudd actually launched the bid and continued with it, it is clear that the ALP have a commitment to fully funding the 24 months that we will have a vote on the Security Council.
It is also equally as clear that while the Liberal Party disagreed with the priority of seeking election to the UN body, and still appearing sceptical of the benefits of such a move, they will commit to taking the temporary tenure seriously if in government. The Shadow Foreign Minister Julie Bishop confirmed as much this morning.
But that commitment from the Coalition does not come without conditions and rightly so.
As Julie Bishop said, the Gillard Government must now, since it really failed to prior to the bid, set out a clear list of priorities for the two years we have on the Security Council.
Later this morning, after Julie Bishop’s comments on breakfast television, the Prime Minister outlined the key issues that will be pursued and not surprisingly Afghanistan was at the top of that list, closely followed by Syria. Action has already been pursued in relation to the former and ongoing commitments will undoubtedly be wholeheartedly supported by the Security Council and the UN as a whole entity.
In the case of the latter, Syria, concrete and decisive action has already been blocked by the obstructionist body, with Russia and China using the veto power . In that sense, Australia, needing to pursue action in relation to Syria, are and will be fighting a losing battle.
We must have a focus and also a recognition that we cannot save the world from itself, even individual countries, in such a short period of time.
In commenting on the win this morning, Julie Bishop made another very sound point. We must use our time on the Security Council to push for reform of the UN. That task is immense and we will inevitably fail. The threshold to force change in the processes and workings of the UN and the Security Council is as high as the bar is to actually get resolutions to pass. But this is too important to not voice an opinion on and a strong conversation at the very least has to be commenced.
The time for complaining about the bid is now over. The emphasis now has to be on giving our diplomats the resources and governmental support needed to give a difficult task their best shot. To do otherwise would mean showing contempt for the world.
Crowing About Making Life Harder
It feels like a while since any substantial discussion has occurred involving policy and the business of government more broadly. Lately we’ve been stuck on constructing and deconstructing personalities and political parties. We’ve also been debating what should or should not be said as part of the usually robust, but recently vitriolic public discourse. Today is the day we must again begin focusing on policy and the business of government, looking above and beyond the easy analysis of people and personalities.
During all the hubbub a milestone went by almost undetected, with only a brief passing mention in the political media as the sexism and misogyny debate accelerated.
The Gillard Government, often wrongly accused of not getting on with the business of government, announced to the media that they had managed to have passed through the parliament over 400 bills. That much legislation passed over 2 years is certainly not, by any stretch of the imagination, not getting on with the business of government.
There was probably much back-slapping and the brief mention smacked of pride. Why wouldn’t the government be proud of that achievement? That much work making it through the parliament, a minority government occupying the benches, would not have been an easy task, made both easier and harder at different junctures since the August 2010 federal election.
But is all this work necessarily a good thing? Will all this work lead to less government and bureaucratic interference in the lives of individuals and businesses? Will it make life in Australia a smoother process? Finally, what is better, new rules and regulations and processes to follow or new or beefed up penalties for existing or newer forms of wrongdoing ?
The answer to the first question is an emphatic ‘no’. Having passed 400 bills is not something to crow about. Yes, there will be legislation now in force among the new laws which will be beneficial. But that does not mean the overall number of bills passed is a good thing, it is not. But of course, for a government struggling to be able to take credit for work they have actually done, well, you cannot really blame them.
The problem with passing over 400 bills through the parliament is that it inevitably means there will be more government, not less and that the level of bureaucratic interference in the lives of individuals and businesses will of course be higher. There will be more rules to follow, more forms to fill out in your personal life and in the life of businesses and that is never a good thing for time or money.
So life in Australia as a matter of course, with over 400 new bills passed will not be smoother in a broad sense. Again, there will be, in that immense stack of paper, some legislation that might serve to make life easier in some narrow sense. However, with the sheer amount of bills that have been made into law being so high, those act’s of parliament making life easier, will be drowned out but extra rules and regulations in other areas of life.
What should governments focus on when engaging in the business of lawmaking? Should they have a predisposition toward business and people going through more regulatory approval, having more forms to fill out? Should the focus instead be on increasing penalties for wrongdoing rather than more oversight aiming to stem bad behaviour? Or is it the case that administrations need to focus on repealing laws?
The answer is a combination of the above. What should be first and foremost when thinking of amending or even introducing legislation is a focus on the penalty side of the good and wrongdoing equation. This means that those behaving appropriately are rewarded with less time needed for bureaucratic nonsense and more to do the business, personal or otherwise that they need to do. At the same time it punishes those few that do the wrong thing.
There should be little or no focus at all on increasing rules and regulations. Extra rules, read for breaches of law, should only be introduced to deal with wrongdoing that evolves or emerges, whether that’s for new technology or new practices which develop.
More red-tape is, in just about every case, an absolute no-no. Bureaucracy must be avoided at just about any cost. Businesses and people, both time-poor, just do not need extra time and pressure to apply for or get approval for aspects of their businesses and lives. There will of course be times where it is necessary.
Ideally, there should be a predilection toward actually cutting approval processes, forms and other time-consuming activities where practical and that means actually repealing some legislation or parts thereof. Stupid offences too, and there are certainly plenty of those, should also be on the legislative chopping block.
So really, the ALP might be happy with their work and so too the cross-benchers closely linked with the government, but the question is, should we the people and should the businesses of this country be jumping for joy too?
Question Time Ahead of Time
Another day of federal parliament and Question Time has passed us by. Tuesday was a bit of a noisy one, louder than Monday anyway. Tuesday’s session of Questions Without Notice saw the Member for Mayo, Jamie Briggs booted from the lower house under standing order 94a for abusing a point of order he raised in relation to an answer from the Acting Prime Minister, Wayne Swan. Despite that, a wide array of issues were canvassed from across the parliament, though the variety of policy areas was more diverse on the government side through the use of the Dorothy Dixer.
The Opposition spent the bulk of Questi0ns Without Notice pursuing the government over their spending priorities, in particular the so-called “big new spending” announced by the government this financial year. The questions pointed out the spending and revenue problems that the Gillard Government faces as they prepare to, most likely in vain, return to surplus next year. Most of the questions asked whether or not taxes would be raised in order to aid the government in returning to surplus.
Though there were a majority of questions focused on the budget, the price on carbon did make a much larger return to the Question Time arena on Tuesday, with questions about hospitals and the carbon tax and closing coal-fired power stations which will at this stage no longer occur as the government seeks to cut carbon emissions.
Oh, and there was the obligatory asylum seeker question from the Coalition at the start of Question Time.
The government again was much less focused on one or two issues during Question Time and continued using the Dorothy Dixer to ask a number of different questions on different policy areas. There were questions on the economy, supporting those in need, the so-called ‘super trawler’, schools investment, health, jobs, skills, wages and housing.
Because of the predictable nature of this, the 43rd parliament, it is almost certain that the strategy for Questions Without Notice for both sides of the political divide will remain the same, or at least largely identical.
On Wednesday, again the Coalition will most likely focus questions to the government around the budget. They will again ask how the government will return to surplus with new and continued spending commitments and whether or not this will require tax increases or whether or not it just won’t happen.
A second major focus may be the price on carbon again which was the focus of the second part of Question Time on Tuesday afternoon. This will likely focus around coal-fired power and businesses and organisations that are impacted by the carbon price but will not receive compensation from the government.
Of course, it being the Coalition, there is always the distinct possibility that there will be at least a question or two on asylum seekers and refugees as the government prepares to send the first boat arrivals to Nauru.
The ALP for their part will again try to prosecute their case for having acted in a wide selection of policy areas. This will likely include again, the comparative strength of the economy, schools investment, health, vulnerable people, jobs, wages, skills, housing and infrastructure.
The only unknown is how bad the behaviour will be, but we can all live in hope that it might just be a little more constrained and dignified than we have become accustomed to when it comes to politics.
Question Time Ahead of Time
Question Time for Monday has now passed. A wide array of issues were examined in general. But first, the parliament spent the first half of Questions Without Notice expressing their condolences for the loss of six Australians since parliament rose for a short break. Those who died were 5 soldiers across two incidents in Afghanistan and the Prime Minister’s father who passed away suddenly at the weekend while Prime Minister Gillard was at the APEC Summit in Russia.
But just after 2:30pm, questions began in the lower house with spending priorities and the federal budget the main focus of the Tony Abbott led Opposition as well as asylum seekers early on.
The Gillard Government, with Wayne Swan as Acting Prime Minister breached a wider selection of issues including the economy as compared with the world, infrastructure and education.
Tomorrow of course presents the the very high possibility, indeed certainty of exactly the same kinds of issues being brought up during Question Time, with perhaps slight differences in the amount of time dedicated to each issue. But nonetheless, the same general formula and topics will be used to frame questions for Tuesday’s session of Questions Without Notice from Canberra.
Again, the Coalition will probably focus a large part of Question Time on the new and existing big spending items that the Gillard Government has announced. This includes the NDIS, the new dental health plan and the as yet undisclosed contribution to be negotiated with the states and territories to fund the Gonski recommendations in education.
The Liberal and National Party Opposition too, could decide to return to asking questions of the government over the carbon tax which recently saw the floor price dropped by the government as well as plans to purchase five power stations, crucial to combating polution, being scrapped last week.
In fact, it was quite a surprise given these developments and the fact that attacking the price on carbon has been a long-term strategy of the Coalition in and outside of the federal parliament. Perhaps the Opposition Leader did heed the words of Malcolm Turnbull last week, though the variety of issues that questions were asked on did remain narrow despite the slight change.
The ALP through the Dorothy Dixer will continue the strategy of examining a wide selection of government policy areas. That is likely to again include a mix of at least some of the following including carbon price compensation, the economy compared with others around the world, health, education, infrastructure and workplace relations.
We were blessed with comparatively improved behaviour, though a few MP’s did manage to test the patience of the Acting Speaker, the usual suspects really. Will they be as lucky tomorrow?
A Carbon Price Policy That Continues With Twists and Turns
Carbon pricing has been front and centre in the political debate in Australia, particularly since the August 2010 election, but also in the lead-up to Kevin Rudd becoming Prime Minister, right through until he was deposed. At that stage it had disappeared from the agenda after talks failed at the Copenhagen summit after which then Prime Minister Rudd swiftly dumped his governments’ plans for an emissions trading scheme. We then had nothing in the form of emissions trading or carbon pricing when Julia Gillard became Prime Minister, until after the election where Ms Gillard had promised there would not be a carbon tax under her government.It was then, that under negotiations for a minority government, the PM, in seeking support to remain Prime Minister agreed to put forward plans for a price on carbon emissions.
From that moment on the problems started for the Gillard Government. First it was a problem of credibility, our nation’s leader had lied and her administration has never recovered from that. Then the negotiations, particularly with the Australian Greens, who wanted a lot more from the new carbon price than the ETS Kevin Rudd proposed, proved a delicate process where there was clearly a lot more giving in then taking concessions from the Greens.
Then it was time for the hard selling of the policy to the public, already let down by the lie and finding it extra hard to believe that the compensation would be enough to allay the extra cost burden under a carbon pricing regime. In recent weeks it has become clear that a significant number of people are probably less concerned about the extra costs of the carbon tax and the government would be hoping that the numbers continue to head in the right direction.
Since the fixed price carbon reduction scheme began on July the 1st though, elements of it have either been dropped or temporarily sat aside. First, just last week, in linking our carbon price with the European Union from 2015, the ALP agreed to drop the floor price. This would have meant that the cost of carbon credits did not drop below $15 dollars per tonne.
Today there was another backdown. The Labor Government gave up on talks to secure the shutdown of five of the biggest coal-fired power stations. The sticking point being that the compensation put on the table by the government was not enough. Now, this could be returned to at a later date, but the outcome of future talks would probably be more of the same without more latitude being given.
If the scheme hadn’t already been thrown into confusion over revenue with the removal of the floor price, now any thoughts of the mid to long-term reduction of domestic emissions appear dashed- not that domestic emissions would have been reduced under early years of the policy anyway.
So now, not only is future revenue with the emissions trading scheme beginning in three years time in doubt, now even the emissions reduction targets are in jeopardy if talks cannot be resumed and a mutually agreeable outcome reached.
What’s next on the rollercoaster that is carbon pricing? The story won’t end here.
Gonski Another Lacking in Detail Policy Almost Certainly Heading for the Scrap Heap
Well, the long-awaited response to the Gonski review into education has finally arrived- or has it? The Prime Minister made an appearance at the National Press Club to launch what was supposed to be her response to the the recommendations of the report by businessman David Gonski into how to better fund our education system in the future. Julia Gillard spoke of the need for a new model of funding along the lines of that suggested by Mr Gonski in his report. But what was missing was the dollar amount though the Prime Minister says the Gonski recommendations would require about $6.5 billion. After winding us all up with expectations of new education dollars the exact financial commitment was left unsaid.
The new model of funding that the Prime Minister has accepted calls for a base level of money which is directly in relation to the number of students enrolled in a particular school. On top of that, the Gonski scheme of school funding calls for loading for schools that are in a rural or remote area, teach children with poor levels of English, if the school is smaller, has students from low income families enrolled or caters for people with a disability or those from an indigenous background.
From the outset, the Gillard Government knows that they have little money to play with and that any would be borrowed, so this is not a good starting point.
Like the National Disability Insurance Scheme, the future funding of the new system of education will be fought over in Council of Australian Governments meetings. This is certainly why the PM didn’t announce a price tag for the much needed education reforms.
The Prime Minister today signalled that negotiations over the joint funding of the future of education will take place between the commonwealth and the states. This could well lead to the collapse of the proposed policy before it begins, the COAG process isn’t exactly a walk in the park, and at the very least this will result in protracted negotiations.
There’s also the small matter of the timing of the implementation of the new framework. Prime Minister Gillard announced that there would be a six year process of policy implementation which would start in 2014. Based on this timetable alone it is within reason to think that the Prime Minister is not serious about setting up the new system. It’s increasingly likely that the Prime Minister and her government will not be in power from 2013 and we already know that an incoming Coalition Government would get rid of this vital education reform.
It seems clear that this announcement today is about pretending to do something while not taking seriously the need to put the ideas that Mr Gonski put forward after his review into action. There have been a number of policies where either the money has been announced or just the policy itself, or in the case of the NDIS, some cash put towards the scheme, but not enough. This isn’t brave, it’s just pure politics.
The report has been sat on for months and all that the ALP have managed to come up with is a timetable and a promise to negotiate with the states and territories, knowing full well that at the very least negotiations will take a long time. and at worst, the talks will collapse completely without an outcome. Or alternatively, and more likely, a Liberal and National Party Government would repeal the legislation and money upon taking office.
What is a real shame about the half announcement today is that there was no immediate commitment to the loading payments for various types of disadvantage which have been overlooked with previous ways of dealing with education costs. Indigenous students, children from low income families, rural and regional students and those with a disability are the most in need of increased support and have fallen behind because that extra financial commitment for their specific needs has not been available.
This is clearly a policy response on the run and gives the appearance of action to the naked eye. When you look closely there’s no clear goals, other than for Australia to be in the top 5 countries in reading, science and maths by 2025. This is another policy area that the Labor Government would well know is almost certainly not going to come to fruition and that’s a big shame given that it’s about education and providing equal access to learning opportunities. This should, for the most part, be a politics free zone, especially when developed from expert advice.
Dental Health Funding Filling Put In But There Could Be an Extraction
Dental care has been a much discussed and debated issue in Australian politics. The sick state of the dental health care system, including the immense and prohibitive costs received increased attention after the 2010 election when the Greens demanded that the Gillard Government provide increased funding for dental care. They wanted Denticare, a fully-funded oral healthcare scheme for all.
Today the Greens got some of what they wanted, millions of children and l0w-income earners will be covered under a new dental plan announced by Health Minister Tanya Plibersek.
The Labor Government will spend $2.7 billion on treatment for children whose families are able to apply for Family Tax Benefit Part A. A further $1.3 billion will be spent, helping 5 million people on a low income as well as those in rural areas. All up, that’s $4 billion extra going into mental health at a time when the budget is under much strain.
The $2.7 billion to be spent on treatment for children will allow for families to claim up to $1000 over a two year period for their child’s dental treatment and is available to approximately 3.4 million children. The $1.3 billion will be focused on early treatment to cut down waiting lists for public dental care. A further $200 million will target treatment in rural areas.
The $4 billion dollar package is added to the $515 million that was allocated in the last budget by the Labor Party.
Providing support for oral treatment and care is extremely important and has positive flow-on health benefits for those that are able to seek and obtain preventative treatment. The devastating effects of poor oral health can affect the overall health of people with untreated dental problems and so in itself should be cheered.
What should not be celebrated is the lack of detail over where the money will be coming from for such a large scheme, a multi-billion dollar allocation in fact. Then there’s the matter of what that does to the budget in the future for both the ALP and the Opposition.
What we do know is that the Chronic Disease Dental Scheme, which now costs upwards of $80 million dollars a month will be scrapped by the Labor Government in favour of this new program. That still leaves a substantial amount of savings that the government must find to keep its promise to return the budget to surplus in 2012-13, not that it’s going to happen anyway. We’re still expecting a significant announcement in education funding which could easily go into the billions of dollars.
The Medicare-funded Teen Dental Plan will also be cut to make way for the new allocation for children.
But what else will be cut from the budget for 2014? We know that a significant amount of funds will still need to be cut to make way for this latest promise and at the same time keep the projected, yet likely fantasy surplus in place.
It’s also entirely possible, even likely that the scheme will not start before it’s cut. On current polling, the Liberal and National Party Coalition is set to take government and after comments today, it would seem that this new funding could be set to be trimmed from the federal budget by an incoming Coalition Government.
Another issue that arises, particularly with the $1000 allocation per eligible child over a two-year period is that in some cases that simply won’t be enough over two years. This will be particularly the case when receiving dental treatment from the private sector with treatment at the dentist, even from the most basic care, is a significant cost burden. There could well be a need for further funds here in the future or for people to dip into their own pockets from time to time or again not seek treatment at all and this could be harmful to health just the same.
The struggles and intricacies of minority government and the balancing of spending priorities for both sides of politics continue with this latest promise, as will the budget woes. However, the overall health benefits are a big win, if it’s not cut by an incoming government that is.
Government Still Emitting Mixed Messages and Potentially Leaking Revenue
Carbon pricing is happening, it’s been legislated and that legislation has commenced. The fixed price period began almost two months ago now, on July the 1st. But today things have moved forward as far as the floating price, the emissions trading scheme which will commence in just under 3 years time after the fixed price period ends. The Australian Government has today announced that they’ve reached an agreement with the European Union to link their respective schemes which means Australia joins with 30 other nations in a common market for carbon credits.
But there’s also been a step backwards from existing Labor Party carbon pricing policy, there will no longer be a floor price, that’s gone as part of the pact with the EU linking Australia and European Union countries. This new market, though heavily regulated, will be the largest carbon market in the world, but by no means does it cover anywhere near the majority of the globe and its population. The European ETS covers just over 500 million people and Australia will add a further 22 million people living under the carbon market.
For the first 3 years of the emissions trading scheme, Australians will have access to European carbon credits but not vice versa. European businesses being able to purchase carbon credits in Australia will be allowed to occur from 2018.
Aside from the broken promise over the carbon price, the biggest point of contention since the decision was made in minority government to pursue the carbon price was over the floor price.
The floor price was instituted by the government supposedly to provide certainty to business and to avoid the price of emissions becoming too low. This price was to be set at $15 per tonne from 2015 when the market-based trading scheme will start. We were told, just as recently as last week that the floor price would happen, though reports had surfaced that the ALP were considering backing away from this element of their climate change policy.
Essentially now, the common market with the European Union will determine the price, any price it likes, and if the EU example is an indication, that price has the potential to go quite low, well and truly under the $29 per tonne that the Treasury modelling banks on for the year 2015-16. This means the revenue projections are surely under serious threat.
But Greg Combet doesn’t think so. The Climate Change Minister today said that the long-term average over the past 4 years of the European ETS has been $23 per tonne of carbon emissions. But whether that’s enough to achieve an effective price of $29 in 2015-16 alone is fanciful. This is especially so with a European economic community in chaos financially, a common market that has seen their permits go as low as single digits per tonne of carbon emissions.
Worse still, this backdown on the floor price is in effect an admission that the Gillard Government was wrong with its legislated policy direction. Rightly or wrongly, it will be construed as the government admitting that a floor price would have hurt Australia and our competitiveness and the people dealing with the flow-on costs of the scheme and that could easily have further negative implications at least temporarily for the struggling ALP.
For an administration struggling with expectations, the mixed messaging and second backflip this month doesn’t bode well in trying to run consistent messaging in areas of public policy and that just makes the government look confused and scared.
By far the biggest damage will be to revenue and that will in turn make promises much harder to deliver, though maybe they’re not too worried about that given the chances that they’ll hold the purse-strings at the start of the floating price are slim. Oh, and the fact that the trading scheme might well not be there under a Liberal Government. But who knows, it’s certainly much, much harder to repeal now.
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