The perils of resources export

Wednesday, May 1, 1991

The Return of Scarcity: Strategies for an Economic Future
By Dr H.C. Coombs
University of Cambridge Press, 1990
Reviewed by Malcolm Abbot

Collected in this book are nine essays written by "Nugget" Coombs since his retirement as governor of the Reserve Bank in 1968. Since then his main concerns have been the arts and Aboriginal people. He is presently a visiting fellow at the Australian National University's Centre for Resource and Environmental Studies.

This book reflects his increasing concern with what he sees as a long-term deterioration of the Australian economy and environment. He attempts to identify the origins and nature of conflicts between development and the environment.

Coombs analyses changes in the world economy and Australia's place in it. Accepting that the rise of transnational corporations has eroded national independence and led to increased polarisation of wealth and poverty, he says Australia's reliance on exporting natural resources makes it exceptionally vulnerable.

While recognising that Australia's position could improve as world resources dwindle, he says few Australians will benefit from this. He says it is wrong to believe economic development in one area will benefit the whole country.

He points out that the output of extractive industries is simply recorded as income and not depletion of national resources. He strongly criticises the sale of Australian resources at a fraction of their real value. He argues for resource taxes to reduce concentration of wealth and income in fewer hands.

There must be physical limits to production, Coombs argues, advocating a transition to an ecologically sustainable economic system. He supports direction of resources to ecologically acceptable goods and services.

He calls for economic growth based on more effective use of known resources and an end to development based on exploitation of large quantities of raw materials.

Coombs also sees technology as a potentially redistributive influence. At present, along with corporate control of scarce resources, it is a force for concentration of wealth and power. He is concerned that environmental law and government policy mainly reinforce the powers of resource exploiters while imposing few responsibilities. n