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Economics and Public Policy

Australia's Changing Ties with the Middle East

Australia recently signed a deal with the United Arab Emirates to provide uranium for the Persian Gulf country’s planned nuclear power plants.

A Pakistan-US deal but for how long?

Last week's deal between Pakistan and the US to reopen NATO's supply routes into neighbouring Afghanistan ends seven months of deep freeze in the bilateral relationship. But the deal will be very fragile.
 
The circuit breaker to this outcome was US Secretary of State Hillary Clinton's very carefully crafted apology for the deaths of 24 Pakistani troops killed in a NATO air strike in November last year.  Clinton expressed "deepest regrets" for the November incident and offered "sincere condolences" for the loss of lives.
 
This apology, which appears genuine, was a big win for Pakistan given that US Secretary of Defence Leon Panetta had recently stated that there would be none.
 
This was the best Pakistan could hope for.

Cutting cycling funding is economic non-sense

In the current climate of economic uncertainty and fiscal restraint, governments are quick to reassure us that they are making every effort to “do more with less”. Providing mobility for citizens in Australia’s rapidly growing cities is a key public policy goal. When faced with alternative transport options, sensible governments will invest in measures that achieve maximum benefits for the least cost, right? Well, um, maybe.

In fact, governments of all persuasions in Australia have been slow to align transport policies with comprehensive assessments of the benefits and costs of alternative transport modes. A recent example of this mismatch is the Victorian Government’s decision to stop funding the VicRoads Bicycle Program. Funding for the program (which averaged $15 million a year over the last three years) has effectively been abolished.

Pakistan blockade: US convoys are not going anywhere soon

For the past six weeks a high-level US team has been in Pakistan trying to negotiate a resumption of the convoys which travel through the country and provide Coalition forces in Afghanistan with about 30% of their non-lethal supplies.

Pakistan decided unilaterally to stop the convoys following the killing of 24 Pakistani soldiers at a border post by Coalition fighter planes in November last year.

One of the major sticking points in the negotiations is the fee Pakistan wants to impose on each container truck travelling through the country. Prior to the halt, Islamabad used to charge US$250 per truck; they are now asking for $3000.

The deep freeze

Broadband politics and competition

The Australian Competition and Consumer Commission and its new chairman, Rod Sims, have allowed their pro-competition charter to be sacrificed on the altar of broadband politics.

The decision to allow Optus to be paid to withdraw access to the HFC cable that reaches well over 1.4 million customers, destroys competition in broadband, restricts a cheaper option for state-owned and vulnerable NBN, and means that the choice other countries have between fast HFC cable models and NBN fibre connections is denied Australians.

Next the ACCC will pretend it’s OK for NBN to pay $20 billion over time to Telstra for closing down copper and the HFC cable as channels for broadband.

Again, a travesty in terms of what the ACCC should be about – promoting competition, not euthanasia of telecommunications assets.

This article first appeared in The Australian Financial Review,  31 May 2012

NDIS funding a start but limited trial means a long wait for most

Last night’s budget contained an important step towards realising a National Disability Insurance Scheme (NDIS), with $1bn allocated over the next four years. Of these funds, $342.5 million will pay for individualised care and support for 10,000 people in four yet-to-be-announced “launch sites” in 2013-14. The trial will grow to include 20,000 people by 2014-15.
The remainder of the funding will go towards the set-up costs of the NDIS over four years, including systems for data collection and analysis, local area coordinators, a new agency to oversee implementation and manage delivery, assessment of need and monitoring of outcomes and the effectiveness of the scheme.
The government’s announcement will see people assisted by the scheme a year earlier than the timeline the Productivity Commission suggested in its 2011 report into disability care and support.
But there are some major shortfalls in last night’s announcement.

Accounting tricks behind the budget surplus

Government budgets are increasingly becoming more political documents. This has been particularly evident with the federal government’s pledge to return the budget to surplus. However, budget numbers are calculated pursuant to accounting principles and a number of accounting ‘tricks’ can be identified behind the $1.5 billion surplus number.

Moving of spending out of the 2012-13 budget year

Given its commitment to announcing a surplus, the government has had an incentive to move spending out of the 2012-13 budget year.

What is especially evident is the extent to which the government has made ‘policy decisions’ which have taken spending out of the 2012-13 year and brought it forward into the current financial year (ie year ending 30 June 2012).

Spin in the Victorian Government Budget

In the recently released Victorian government budget and in the accompanying Treasurer’s speech, the government made much of a fall in GST and stamp duty revenue, claiming ‘significant revenue write downs’ and a reduction of $7.6 billion over the forthcoming four year period 2012-13 to 2015-16.

This would suggest an actual expected decline in the total revenue amounts from past years and into future years.

However, close reading of the budget indicates that the reference to the decline relates to estimates made in late 2010.

In fact, the budget figures clearly show that government revenue has actually been increasing steadily since the time of those estimates and that this will continue to be the case.

Total revenue will increase by 3.2% for 2012-13 and then increase by an average of 4.4% for the following three years.

($million)

If you think the disability insurance scheme is not your problem, think again

AT THE moment there is no automatic right of access to disability support across the board in this country. If your child fell out of a tree tomorrow and sustained serious brain damage, what sort of help would you expect and hope for?

He or she would be entitled to care in a public hospital, but once discharged, you'd be largely on your own.

This article first appeared in The Age 26 April 2012.

Bounty on Pakistani will not pay off

(A version of this blog was published in The Australian on 11 April 2012)
 
Washington’s decision last week to post a US$10 million reward for information leading to the arrest of Hafiz Mohammed Saeed, founder of the Lashkar-e-Taiba (LeT), a terrorist organization accused of being behind the Mumbai attack in 2008 which killed 166 people, will not help put US-Pakistan relations back on track. 
 
On the contrary, it will complicate matters further, both bilaterally and regionally. 
 
This award is on par as the one offered for the leader of the Afghan Taliban, Mullah Omar, who is said to be hiding in Quetta, the capital of Baluchistan’s province in western Pakistan.
 
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