Behind the blather

Issue 

In the lead-up to the federal election, your guide to what's really happening behind the spin of the official campaign.

Lib-Lab hot air emissions

The ALP is better than the Coalition on global warming, right? Well, hardly. According to the Climate Institute's "pollute-o-meter" (<http://www.climateinstitute.org.au>), the Coalition's climate change policy would increase greenhouse gas emissions by 20.8% by 2020, while ALP policy would increase them by ... 18.5%.

This is partly because neither "party of government" has yet specified any short-term targets, nor calculated the likely impact of any local carbon trading scheme. The difference is therefore due entirely to the ALP's support for signing the Kyoto Protocol.

By contrast an article published in the October 25 Nature magazine by British researchers Steve Rayner and Gwyn Prins argues that the carbon trading schemes embodied in Kyoto will fall further and further behind the scale of the global warming challenge. They argue instead to "put public investment in energy R&D [research and development] on a wartime footing".

"We stare at stark divergences of trends. On the one hand, the International Energy Agency predicts a doubling of global energy demand from present levels in the next 25 years. On the other, since 1980 there has been a worldwide reduction of 40% in government budgets for energy R&D. Without huge investment in R&D, the technologies upon which a viable emissions reduction strategy depends will not be available in time to disrupt a new cycle of carbon-intensive infrastructure ...

"It seems reasonable to expect the world's leading economies and emitters to devote as much money to this challenge as they currently spend on military research — in the case of the United States, about $80 billion per year. Such investment would provide a more promising foundation for decarbonization of the global energy system than the current approach."

That's an important part of what the Socialist Alliance's Climate Change Charter says, and a conclusion to which any dispassionate student of the climate change challenge is driven (check it out at <alliance.org>).

From welfare to the gutter

The Howard government's welfare-to-work "reforms", which put the boot into the poorest and most defenceless — and received the support of the ALP (surprise!) — are certainly having an impact: complaints to government ministries about unfair treatment have skyrocketed over the past year, from 28,000 to 33,000.

The situation is so bad that the Commonwealth Ombudsman, John McMillan, is to launch an official investigation. McMillan says that welfare recipients have had payments cancelled for up to eight weeks without being notified or Centrelink even establishing that they weren't "meeting obligations".

In one case, the person concerned ran out of money, was hit with eviction notices, lost use of power and telephone and was "forced to survive without a basic social security payment and [had] no means of earlier resolution, because all appeal avenues were unavailable".

The bipartisan war on welfare terrorism "continues" ...

Their trade unionists and ours

Former prime minister Paul Keating agreed to launch former Australian Council of Trade Unions (ACTU) secretary Greg Combet's campaign for the Newcastle seat of Charlton because he wanted to counter the Coalition's "willful despicable reduction of trade union and trade unionism".

What was it about trade unionists that Keating wanted to defend? Defence of workers' wages and conditions, especially in weaker workplaces?

Nothing so banal. Keating was at Combet's launch to claim the Reserve Bank's 2-3% inflation target (which hangs the threat of an interest rate hike over every union wage claim) as beginning "with me as prime minister and Bill Kelty representing the ACTU".

Keating didn't mention another gain of the "trade unionism" of the Kelty years — the fall in real wages that occurred under the Accord. Nor did he mention — as he once had the honesty to do — that all the extra profits given to the corporations in those days weren't invested productively but "pissed up against the wall".

Thanks to the Kelty brand of "trade unionism" we now have a situation where few think to even ask whether business price-fixing might have some impact on inflation, and the cost of living price increases are all "wage-driven".

Such an awful heresy certainly didn't enter Combet's head, who has long forgotten his days as a student in Sydney University's subversive political economy department. Combet told the audience at his campaign launch that "you cannot be effective in a union role unless you are mindful and respectful of the legitimate interests of those with whom you are dealing in the business community and government and unless you are responsible in relation to the economic circumstances".

Are these the "trade unionists" the Coalition wants us to be terrified of?

Pick a CPI, any CPI!

For years, whenever inflation looked like topping the 3% upper limit set by the Reserve Bank, Treasurer Peter Costello would always point to the steadiness of "underlying inflation" (measured without the influence of price changes in "volatile elements" that mean so little to the average worker — like fruit and vegetables).

But when last week´s Commodity Price Index figures came out it was backflip time. For once, the full ("headline") CPI gave a lower annual inflation rate (1.9%) than the "underlying" rate (3%).

This was basically due to a one-off crash in banana prices and a fall in the cost of child care due to an easing of the criteria for getting the childcare tax rebate.

With underlying inflation at near 3%, the markets are saying an interest rate rise from the Reserve Bank in early November is a near certainty.

What can a poor treasurer do, especially as a new round of rent and public transport fare rises are in the pipeline?

In the past he would always reach for another CPI, like that kept by the Australian Bureau of Statistics. This excludes another "volatile item" — petrol. Costello should follow the same approach in his present predicament. We suggest he investigate the following possibilities for CPI adjustment:

•The Dick Pratt cartel-adjusted CPI. This CPI would give a new figure for underlying inflation by removing price rises generated by the illegal cardboard packaging cartel set up by Amcor and Visy in seedy pubs in Richmond. According to the damages claims being talked about by big victims like Cadbury-Schweppes (who solemnly swear that they would have passed the lower cost onto the consumer), this rip-off adjusted CPI would always be lower than the headline rate.

•The general monopoly adjusted CPI. The Australian Consumer and Competition Commission caught Pratt through its new policy of promising any company in a cartel immunity from prosecution if it spills the beans on its price-fixing scam. The rumour is that scores of firms are negotiating potential pardon with the ACCC. Generalise this approach, remove that part of the CPI increase that reflects unreasonable superprofits due to price-fixing, and the monopoly adjusted CPI increase will shrink way below the headline rate.

•The Hugo Chavez action-adjusted CPI. If the two previous methods of adjusting the CPI don't work, Costello may have to look at this approach as a last resort. It doesn't adjust the CPI so much as the inflation rate itself. When the Venezuelan government discovered that certain big capitalists were conspiring to drive up prices, it threatened them with nationalisation and at the same time cut prices in competing state-owned stores. The Venezuelan CPI fell rapidly.

Somehow we don't think Costello would ever adopt an approach that doesn't figure in the textbooks of "economic conservatism".

[Compiled by Dick Nichols.]

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