Saturday, November 08, 2008

THE NATIONALS CAN BLAME THEMSELVES FOR THE PLIGHT OF RURAL W.A.

Let's not get too carried away with the deal that the WA Nationals have brokered with the Colin Barnett-led Liberals to form government in what is in effect a loose coalition. The Royalties for Regions scheme has merit, to be sure, but how did the need for such a scheme arise?

At least in part, the Nationals can blame themselves for many of the problems currently being suffered by rural people. Certainly, services and infrastructure are inadequate in many parts of the state but it would be unfair to only blame the last eight years of Labor government.

From 1993 to 2001, the Richard Court government was a coalition between Liberal and the then National Party. For all of this time, deputy premier and Nationals leader Hendy Cowan was in an extremely powerful position to focus the government's attention on country problems. Sadly, based upon my experience as the MP for the country seat of Vasse, Cowan was more interested in playing party politics than in having the needs of his constituents attended to.

The best (or worst) example is the way that Cowan and the Nationals used (or abused) the regionally-based Development Commissions, of which nine exist around WA. Originally set up as government Authorities by the Brian Burke Labor government of the 1980s, in theory these Commissions were designed to assist and encourage economic development within each of their regions. The Burke government quickly realised that the Commissions were very effective as propaganda instruments that could be used for party political purposes by whoever was the Minister for Regional Development at the time. It's possible that Burke may have set them up with this intention in mind from the beginning but the official line states otherwise.

In 1997, as a newly elected MP for Vasse, I naively assumed that local government in WA was largely free of party political shenanigans. Little did I realise that the South West Development Commission was working to assist the National Party's Beryle Morgan who was at that time president of the Busselton Shire. I can only guess at whether the Commission was following a dictate of regional development minister Hendy Cowan or was responding to a request from Ms Morgan but almost certainly Cowan would have been aware of what was happening within his development commission.

To summarise what happened in 1997, the South West Development Commission commissioned a report investigating the lack of services and infrastructure within the seat of Vasse. The report was provided to the Busselton Shire Council and listed for discussion at a full council meeting. I found out about the report's existence only when I scanned that meeting's agenda pages. Upset that such a report should be written without the state MP being asked for input, I was further upset when I had just three days to submit a response to Busselton councillors so that they could have an alternative view to the bland and non-specific concerns raised in the report. For the next few years, as Mrs Morgan stood against me at two subsequent elections as the National Party candidate, this report was trotted out to try and criticise me and the Court government.

As an aside, at a parliamentary Estimates Committee hearing after the election of the Gallop government in 2001, South West Development Commission CEO Don Punch admitted that he was not aware of any other south west electorate for which a similar report had been prepared by the Commission.

A further criticism of the Nationals relates to the very effective election campaign they'd run for almost three years prior to the September 6 election in 2008. Is it any wonder that the Labor government and the Parliament as a whole wasn't aware of the shortfall in services and infrastructure in the bush when the five (now four) lower house Nationals MPs were out electioneering for most of the last term of government? Rather than representing their constituents and calling on government to allocate more money to the bush, the Nationals spent most of the last three years trying to win votes. That they succeeded in this goal is commendable but they can't deny the accusation that they must accept some of the blame for the Carpenter government's focus on Perth.

A final parting shot at Hendy Cowan. After eight years as the deputy premier, he gave his valedictory speech in 2001 prior to resigning and unsuccessfully standing as a candidate at the federal election. The final four years of his deputy premiership were in spite of the Liberals having won enough seats in the Legislative Assembly to govern without the support of the Nationals, yet Richard Court honoured the coalition agreement and retained Cowan and two other Nationals MPs as ministers.

Not once in his final speech did Cowan recognise nor thank Court for his eight years as the premier's deputy. Not once did he acknowledge the coalition agreement which had allowed the Nationals to be part of the government. Quite a few MPs noted the lack of gratitude and acknowledgement in Cowan's speech.

Ironically, one of the best rural policy initiatives to come out of the Court government era was the country water supply scheme, whereby subsidies were provided to allow scheme water to be piped to individual farms. What a pity for the Nationals that the idea came from Liberal MP Bill McNee. In contrast, it was former Nationals minister for transport Murray Criddle who pushed through the sell-off of Westrail Freight which owned the thousands of kilometres of rural railway line. The sell-off was opposed in the Coalition party room by a number of Liberal MPs who believed that it would only lead to a reduction in rail services in the country, an outcome that's now a reality.

Brendon Grylls deserves the accolades he and his party are currently basking in. Just remember, however, he and his predecessors are in part responsible for many of the problems being experienced in rural and regional WA.

Are there any lessons here for incoming premier Colin Barnett? He should either close down the development commissions and fund the appointment of economic development officers within local government bodies, or he should place all development commissions under one Liberal minister and make it difficult for the commissions to be used for party political purposes.

Wednesday, October 29, 2008

We won't lose our beaches as sea level rises!

Various media outlets and some otherwise scientifically sound climate change spokespersons claim that Perth's beaches will be lost forever if and when sea level rises and engulf them. The following letter to the editor of The West Australian wasn't published but it outlines what will actually happen.

"A major sea level rise of the Indian Ocean will not 'destroy' most of Perth's beaches (West, October 23, 2008, page 56). A rise in sea level along a sandy shoreline will move the shoreline inland in a ratio of about 1:100. For Scarborough and most other sandy beaches, a one metre rise will create a new beach some 100 metres inland. For some of the smaller 'pocket' beaches trapped within rocky coastlines such as around Trigg, these beaches will disappear completely unless large volumes of sand are washed northwards or artificial replenishment from inland occurs.

In the face of rising sea levels, we really only have two options: withdraw or defend. We can remove buildings and other structures so that a new beach is allowed to form inland of the old one. Alternatively, we can protect existing structures with massive engineered walls if the assets under threat are worth a lot more than the cost of their protection. Gold Coast sea defences cost up to $15,000 a linear metre or $15 million per kilometre. One consequence of seawalls is that they deflect wave energy seaward, causing the beach to be washed away. The resulting concrete structure with deep water immediately offshore is far less attractive than a natural sandy beach."

On a similar theme, The Sunday Times printed the following letter in reply to the statement that some Pacific island countries are threatened by sea level rise:

"Not all low lying countries like Tuvalu are threatened by sea level rise (Sunday Times, October 5). As a geologist, I know that many parts of the world are sinking as a result of tectonic movements deep in the earth. Many remote atolls are built on ancient volcanoes which are sinking, so it is inaccurate to state that sea level rise is the only or even the main threat to these countries.

Even so, the end result is the same and developed countries like Australia will have to address the question of what to do with the thousands and millions of people who will need to find a new home over coming decades."

Tuesday, October 21, 2008

GM crops deserve more reasoned debate

From: Science and Development Network. Published October 20, 2008

Debates around the potential benefits of GM crops for developing countries must be reasoned and evidence-based, says Albert Weale.

The World Bank recently estimated that a doubling of food prices over the last three years could push 100 million people in low-income countries deeper into poverty. And the future does not look brighter. Food prices, although likely to fall from their current peaks, are predicted to remain high over the next decade.

As the world considers how to respond, the debate about genetically modified (GM) crops has inevitably reared its ugly head. 'Ugly' because the public exchange about this technology has usually seen extreme viewpoints gaining the most airtime. For example, in the United Kingdom, Prince Charles' spirited but ill-informed attack on GM crops this summer led to a flurry of opinionated responses. We could have been back in the polarised debates of the earlier part of this decade.

Since 1999, my organisation, the UK-based Nuffield Council on Bioethics, has twice examined the ethical issues raised by GM crops. In a 2003 report, the Council specifically focused on developing countries. Two of the conclusions are still particularly relevant today.

Ethical Obligation
First, the council concluded that there is an ethical obligation to explore whether GM crops could reduce poverty, and improve food security and profitable agriculture in developing countries. In coming to this conclusion, the council considered differing perceptions of risk. When people have enough food, as in developed countries, consumers and producers will feel free to avoid risk — even if that risk is theoretical rather than real. But developing nations, struggling with widespread poverty, poor health, limited pest control and poor agricultural sustainability, have a different risk-benefit calculation. This is perhaps why the acreage of GM crops has tripled in developing countries over the past five years, compared to just doubling worldwide.

Consumers in prosperous countries are being asked to suppress their doubts about GM crops so that research relevant to the developing world continues. In effect, they are being asked to concede that any potential losses to them are outweighed by potential gains to poor countries, where yields are declining and conventional agriculture is increasingly unsustainable.

This does not belittle other factors needed for poverty reduction and food security — such as stable political environments, appropriate infrastructures, fair international and national agricultural policies, and access to land and water. GM crops are just one part of a large and complex picture. But we will not know how important a part until we explore their potential.

Case by case consideration
The Nuffield Council's second key conclusion was that the wide range of GM crops and situations must be considered individually. Those who oppose or support GM crops per se make an unhelpful generalisation.

Each time, the gene or combination of genes being inserted, and the nature of the target crop, must be assessed. It is also important to compare a GM crop with local alternatives.

For example, Golden Rice — enhanced for b-carotene to help fight vitamin A deficiency — is not needed where people have sufficient vitamin A from leafy greens, or ready access to vitamin supplements. But where this is not the case, the crop may significantly improve nutrition.

Similarly, herbicide-resistant soybeans can reduce demands for local labour. This may be devastating if a community relies on wages from manual weeding. But it may help communities struggling with a labour shortage due to high prevalence of diseases such as HIV/AIDS.

The role of research
Scientific and other evidence must be central in the debate, and over the past few years evidence about GM crops has grown.

For example, according to a recent news report in Science, soon-to-be-published research will clarify the amount of Golden Rice a child would need to eat each day to prevent vitamin A deficiency. This kind of research is vital if governments and farmers are to make informed decisions about GM crops. Indeed, before new research is funded, national and regional bodies in developing countries should be consulted about their priorities for crops and desirable GM traits.

In the United Kingdom, the government has committed £150 million (US$263 million) over the next five years to research aimed at making agriculture more resilient to the pests and diseases affecting poor farmers, and increasing smallholders' agricultural productivity.

Research efforts are also growing in the developing world, with South African scientists developing and working to commercialise virus-resistant maize, and countries like Kenya and Nigeria hosting projects to develop virus-resistant varieties of key African crops.

Striking a balance
Many people worry about possible environmental risks from GM crops, such as gene flow to other plants, and this is something that scientific research must clarify. But alarm-raising without evidence is as helpful as calling 'fire' in a crowded theatre. Similarly, demanding evidence of zero risk before allowing a new technology is fundamentally at odds with any practical strategy for investigating new technologies. Mobile phones or aeroplanes might never have seen the light of day if such stringent demands had been placed on them.

In the case of GM technology it is clearly crucial to ask what the risks of adopting GM crops are. But it is also important to ask what the risks of not doing so are. Realistic cost-benefit analyses that consider local social and environmental conditions and development goals are needed on a country-by-country basis.

Heated debate about the food crisis must not detract from an evidence-based assessment of biotechnology's potential for improving agricultural productivity in developing countries. The benefits of GM crops must not be overstated. But neither can poor arguments be allowed to obscure strong arguments for a good cause.

Professor Albert Weale is chair of the Nuffield Council on Bioethics and professor of government at the University of Essex, United Kingdom.

Sunday, July 27, 2008

IS FUELWATCH THE BEST THAT WE CAN DO?

Why are our politicians restricting the debate on fuel prices to side issues such as FuelWatch and reduced fuel taxes? Surely the huge resources of government can be better directed to finding other ways of reducing the pain felt by motorists? Effective solutions exist but they require strong governments willing to make difficult decisions.

At the global level, Australia can do nothing about the price of crude oil. The international market and the laws of supply and demand mean we're price takers, not price setters. Our hands are tied at this level.

Nationally, we've adopted a price structure based on the price of fuel coming out of Singapore's refineries. We could change our policy and allow local refineries to sell below these benchmark prices, but then the incentive to explore for oil and gas in Australia would be reduced. As well, the nation's existing oil refiners wouldn't invest money in new or upgraded facilities when they can make greater profits in other countries? No, our hands are tied at this level as well.

But market forces and competition in Australia are restricted. With WA having just one oil refinery, there's no internal competition. Transport costs make it unviable to ship large volumes of refined petroleum products into the state to try and compete with our existing refinery.

To encourage competition, the state could provide incentives to build another refinery. But this is unrealistic: the cost would be billions of dollars and we'd still have to ship crude oil in at world parity prices, so the gains would be minimal.

A more realistic action is to investigate the profitability of the existing refinery at Kwinana and see if BP is ripping off fuel users in WA. As owner of the state's only refinery, BP doesn't disclose the profits it makes at individual refineries. Globally, the company made US$20.8 billion profit after tax in 2007 and its annual report barely mentions Australia, let alone the money made from its individual operations. Maybe it's time for the state government to undertake a confidential analysis of BP's operations in WA. If company profits are found to be unreasonably high, tax and other mechanisms exist to reduce the load on fuel users in this state.

Remember: BP's Kwinana refinery is the largest in Australia. It's mostly an old plant, having been built in the 1950s, so depreciation and similar charges against operating costs would be small in comparison with the total cost of the asset. WA should be enjoying lower fuel prices than the rest of Australia simply because the Kwinana refinery should be delivering economies of scale - the bigger the plant, the smaller the overheads per unit of production. It'd be nice to have BP explain why their terminal gate price for fuel isn't the cheapest in the country.

Can FuelWatch be made to work better? There's no doubt that it provides a useful service to those consumers prepared to visit the website and find out where the cheapest fuel is each day. But the law requiring prices to remain fixed for a 24 hour period is anti-competitive. Competition's ability to bring prices down is lost when you can't lower your price once you've seen what your competitor is charging.

The state government should make a simple change to FuelWatch so that the posted prices are the maximum. An individual service station operator should be able to lower the stated price to gain a competitive advantage. Kevin Rudd should insist upon this change if the scheme is to go national.

Making the posted price a maximum, capable of being lowered within the 24 hour period, will make life tough for smaller, independent operators who probably won't be able to compete with the big fuel providers. But they stopped buying fuel from Singapore years ago, instead buying from BP's Kwinana refinery. So the public need to decide whether they really want lower fuel prices and a system that is truly competitive, even if some small operators get hurt in the process. Sadly, in our modern cut-throat business culture, you often can't have both.

Finally, the Rudd government can take a simple step to address the issue of why country fuel prices are often so much higher than in the city: amend the Trade Practices Act to outlaw discriminatory pricing. Shortly after the Howard government was elected in 1996, a review of this Act received submissions from big business that the existing laws against discriminatory pricing - where a supplier can sell the same product at different prices to different customers - were pointless as no one had ever been prosecuted under the existing provisions. In 1998, the relevant clauses were removed and very quickly we saw different prices being charged to different customers, even if the size of orders were the same.

Today, a large fuel retailer in country WA is usually forced to pay much more per litre for their wholesale fuel than a similar sized retailer in Perth. How often do you hear a small or rural business complaining that it's forced to pay a wholesale price that's higher than the retail price for the same item in Perth or at a national supermarket chain such as Coles or Woolworths?

Mr Rudd, if you want to make some serious changes to fuel prices, stop tinkering around the edges and amend the Trade Practices Act. And Mr Carpenter, you can bring genuine competition into fuel prices in this state by allowing the daily fuel price advised to FuelWatch to be a maximum price.