We congratulate the Australian taxpayers for their generosity. The auto industry would not have been our preferred charity, now would we have allocated such a large sum, but what the hell. Rudd wants to be loved. If France can subsidise its industries why can't Australia??
What is a bit of a shame is that so little of this package is actually being spent to "green" the industry. Reading the spin you would have thought that every cent was going into the greening.
This also removes one of the comparative advantages that Australia had remaining after the global financial crisis began. Pretty much all OECD Governments had been forced to spend billions bailing out banks. Australia and New Zealand put up some guarantees, but no money - indeed the guarantee schemes might actually generate revenue. Now Australia has gone and blown $6.2 billion to keep the auto industry going.
This from The Australian
THE federal government's $6.2 billion automotive industry package will support jobs at a time of a global financial crisis and into the future, Prime Minister Kevin Rudd says.
The nation needed a green-car industry that would create high-paid, high-skilled green jobs for the future, he said launching the government's new car industry plan in Melbourne today. The plan sets aside $500 million - double the amount recommended by the Bracks review - for a green car innovation fund. It also confirms a reduction in the automotive tariff to 5 per cent will go ahead as planned in 2010. “In the time of global financial crisis the government today has taken further decisive action to support Australian industry, to support Australian jobs, because we believe this industry has a future,” Mr Rudd said. “We take decisive action to build an international, competitive green economy for the future. “Australia needs a green car industry that manufacturers the fuel efficient, low-emissions vehicles of the future and creates the well paid, high skilled green jobs of the future.” The choice was not between having a growing economy in the short-term and a green economy in the medium to long-term. “We can work effectively to develop both, and that's what a large part of today's package is all about. The automotive industry was part of Australia's future, Mr Rudd said. Building a low-emissions economy was the next step in the government's response to the global financial crisis. “By implementing a green investment strategy today we can transform our industry and create green jobs for tomorrow,” he said. “It's a future in which we should have absolute confidence - fuel-efficient technologies, low-emissions technologies, better designed and safer vehicles.” Australia could be world leader in green car technology, Mr Rudd said. The automotive industry faced a whole new set of market, economic and environmental changes and challenges. “The domestic market for cars has become more fragmented. Australian car makers do battle in a very crowded field, with 60 other car brands, Mr Rudd said. “Consumer preferences have shifted away from sedans, to both smaller vehicles on the one hand and four-wheel drives on the other.” Higher petrol prices had driven consumer demands for more fuel-efficient vehicles, he said. Mr Rudd said the automotive industry had a key role to play in climate change and faced a complicated set of industry challenges. “Some might say it's not worth trying to have a car industry, that is not my view, it is not the view of the Australian government and it never will be the view of any government which I lead,” he said. “I don't believe that car making is yesterday's business or something better left to the Germans and the Japanese. “But I also don't believe that industry policy is about 'saving' the automotive industry, it's about helping to transform the industry to meet the challenges of the future. “It's not about passive assistance, it's about active support for innovation and change.”
Showing posts with label Australia. Show all posts
Showing posts with label Australia. Show all posts
Aug 20, 2008
DFAT Fuck Up Big Time
Heads will roll over the media release of the DFAT Clark Bio. Luckily the High Commisioner is about to leave. Meetings between him and the PM or Heather could be a bit frosty from now on. Will Larkindale be sent in to kick shins??
What we want to know is whether any other Bios were released? Key? Did he meet Peters?
Here are three reports
NZ Herald
Stuff
Tracy Watkins
Update DFAT have apologised and blamed the High Commission here.
Larkindale won't be doing any shin kicking in Canberra as he is in Wellington!
What we want to know is whether any other Bios were released? Key? Did he meet Peters?
Here are three reports
NZ Herald
Stuff
Tracy Watkins
Update DFAT have apologised and blamed the High Commission here.
Larkindale won't be doing any shin kicking in Canberra as he is in Wellington!
Jul 5, 2008
Is Cap And Trade The Right Way To Go?
The climate change debate is really hotting up in Australia in advance of the Garnault and Government papers being released. This think piece by Warwick McGibbon caught our eye. We too have been skeptical of the adoption of the EU model. We quote some sections
What is needed is a global framework of agreed actions that take into account the environmental gains and the economic costs rather than a framework of national targets. It is not a large step to go from the current Kyoto approach into a more effective post-Kyoto approach.
The design of the Australian policy needs to be done in the national interest and not used as a short-term political football nor designed as a short-term revenue-raising device to pick winners in industry.
Is cap and trade the answer?
The standard approach of ''cap and trade'' permit markets based on the idea of ''target and timetables'' does not deal sufficiently with the uncertainty surrounding climate change. In this approach a target for emissions is picked and industry then needs to buy a permit from a limited pool if they emit carbon. The price will be whatever the demand in the market generates given a fixed number of permits.
However, this simple and seductive idea is not adequate to tackle the uncertainty that defines the climate question how much to cut or how quickly. Science does not tell us what concentrations of greenhouse gases should be sought globally in 2050. It does not tell us which of many paths of emissions reductions the world should follow.
Then what is?
Instead, what is needed are long-term markets within countries to enable the private sector and individuals to manage long-term climate risk and reduce emissions where possible at low cost. There should be clear and credible policy goals that long-term markets can value so policymakers are held accountable, innovators can innovate, and entrepreneurs can hedge their investment risk in existing and new technologies.
These are far more important than where the debate has hovered for the past year in Australia which has focused on short-term carbon prices and revenue-raising auctions of short-term emission permits. What is needed is a hybrid approach of long-term emissions trading with 100 years of future carbon prices along a carbon yield curve, but a short-term fixed price for carbon. This is how monetary policy works in Australia. The short-term interest rate (carbon price) is set by an independent authority within a framework based on an inflation goal (long-term concentration goal) set by the government but a long-term bond market (long-term carbon market) guiding long-term investment decisions given the goals of policy and the stance of the Reserve Bank of Australia (carbon bank).
Will this work?
Professor Ross Garnaut has publicly dismissed this approach for Australia while large parts of the rest of the world are considering it. Rather than following the European trading system designed in the 1990s, Australia should look forward to a framework that will encourage countries to reduce greenhouse gas emissions, knowing the maximum cost in the near term of any reduction commitment but with markets that enable risk management and clear long-term carbon-price signals.
The idea that countries should promise to hit a target no matter what it costs is what has prevented most countries from taking binding emission targets and what has caused many countries with binding targets to miss those targets.
Our empirical results show that the real story for Australia is not how we price carbon in Australia but how our major trading partners implement their climate policies and how this impacts on our fossil-fuel exports.
It is in Australia's national interest to have a global system that encourages comparative advantage through coordination of national carbon prices along the lines of the McKibbin-Wilcoxen hybrid rather than one of arbitrary targets with inefficient and potentially volatile ''cap and trade'' permit markets of the type usually advocated. Australia and the world have a lot at stake in the decisions to be made in coming months about climate change in this country. We have already waited far too long for sensible climate policy.
What is needed is a global framework of agreed actions that take into account the environmental gains and the economic costs rather than a framework of national targets. It is not a large step to go from the current Kyoto approach into a more effective post-Kyoto approach.
The design of the Australian policy needs to be done in the national interest and not used as a short-term political football nor designed as a short-term revenue-raising device to pick winners in industry.
Is cap and trade the answer?
The standard approach of ''cap and trade'' permit markets based on the idea of ''target and timetables'' does not deal sufficiently with the uncertainty surrounding climate change. In this approach a target for emissions is picked and industry then needs to buy a permit from a limited pool if they emit carbon. The price will be whatever the demand in the market generates given a fixed number of permits.
However, this simple and seductive idea is not adequate to tackle the uncertainty that defines the climate question how much to cut or how quickly. Science does not tell us what concentrations of greenhouse gases should be sought globally in 2050. It does not tell us which of many paths of emissions reductions the world should follow.
Then what is?
Instead, what is needed are long-term markets within countries to enable the private sector and individuals to manage long-term climate risk and reduce emissions where possible at low cost. There should be clear and credible policy goals that long-term markets can value so policymakers are held accountable, innovators can innovate, and entrepreneurs can hedge their investment risk in existing and new technologies.
These are far more important than where the debate has hovered for the past year in Australia which has focused on short-term carbon prices and revenue-raising auctions of short-term emission permits. What is needed is a hybrid approach of long-term emissions trading with 100 years of future carbon prices along a carbon yield curve, but a short-term fixed price for carbon. This is how monetary policy works in Australia. The short-term interest rate (carbon price) is set by an independent authority within a framework based on an inflation goal (long-term concentration goal) set by the government but a long-term bond market (long-term carbon market) guiding long-term investment decisions given the goals of policy and the stance of the Reserve Bank of Australia (carbon bank).
Will this work?
Professor Ross Garnaut has publicly dismissed this approach for Australia while large parts of the rest of the world are considering it. Rather than following the European trading system designed in the 1990s, Australia should look forward to a framework that will encourage countries to reduce greenhouse gas emissions, knowing the maximum cost in the near term of any reduction commitment but with markets that enable risk management and clear long-term carbon-price signals.
The idea that countries should promise to hit a target no matter what it costs is what has prevented most countries from taking binding emission targets and what has caused many countries with binding targets to miss those targets.
Our empirical results show that the real story for Australia is not how we price carbon in Australia but how our major trading partners implement their climate policies and how this impacts on our fossil-fuel exports.
It is in Australia's national interest to have a global system that encourages comparative advantage through coordination of national carbon prices along the lines of the McKibbin-Wilcoxen hybrid rather than one of arbitrary targets with inefficient and potentially volatile ''cap and trade'' permit markets of the type usually advocated. Australia and the world have a lot at stake in the decisions to be made in coming months about climate change in this country. We have already waited far too long for sensible climate policy.
Jun 20, 2008
Rudd's Asian Community Plan Lacks Conviction
Could it really just be "an idea dreamed up on the run to provide story lead for his Asia Society speech and a news peg for his trip to Japan and Indonesia"? Well, that is what Hugh White say on the Lowy Institute Blog The Interpreter. We wonder what Grant Roberston will make of the rest of White's post?
I am so unenthusiastic about the PM’s diplomacy. There are two reasons.
First, I do not believe he is serious about the whole thing. Everything that Rudd has said and the way he has said it about the Asia-Pacific Community suggests that this was an idea dreamed up on the run to provide story lead for his Asia Society speech and a news peg for his trip to Japan and Indonesia. If this was a serious policy proposal, we would have seen evidence of deep thought, careful preparation, detailed exposition and patient diplomacy – and key regional players would have been sounded out well in advance. It looks to me as if none of this happened. There seems to be a pattern emerging here, because the same is true of the nuclear disarmament idea Rudd announced in Japan a few days later. Let me stick my neck out and offer a prediction: in six months both ideas will have disappeared completely from sight. That is why I call them ‘strangely meaningless’: because it is meaningless to announce what purport to be major policy initiatives without doing any of the work needed to develop, promote and realise them, and it is strange, and sad, to see our government doing foreign policy this way.
Second, I don’t much like the Asia-Pacific Community idea, even if Rudd is serious about it, because I do not think it is an effective way to address the real risks and challenges we face in Asia. Let’s leave to one side a host of questions about the appropriateness of taking the EU as an exemplar (though I can’t help but wonder, for example, whether Mr Rudd is ready to promote free movement of peoples across national borders in his Asia Pacific Community, as they have in the EU). Let’s even leave to one side the deeper question of whether Rudd was thinking of his Asia Pacific Community as a forum (like APEC) or an institution (like the EU): he seemed confused on this, as he used both metaphors, but probably he had in mind a forum that might one day grow into an institution.
The most important question then is whether the best way to start building a peaceful future for Asia is by building new forums, or in some other way. Forums are fun, which is why diplomats and politicians tend to focus on them – the alphabet soup of ASEAN plus 3, ARF, Six-Party Talks and all that. But what really matters is how countries get on, and especially how big and powerful countries get on with one another. It is the attitudes and expectations they bring to the forums that determine what gets agreed and what doesn’t. The forums themselves have at most a marginal effect. Does anyone really believe that strategic competition is growing between the US and China because they have not found the right shaped table to sit down at yet?
So let’s get real: before we can build forums or institutions that work effectively to create the kind of peaceful Asia we all hope for in the Asian Century, the region’s major powers are going to have to start accepting that they have to deal with one another on a rather different basis from the way they have been operating for the last few decades. To build Rudd’s vision, the US will have to start treating China as an equal, China will have to start treating Japan as an equal. These are big concessions, which will not easily be made, and so far there is little sign that they will be. Helping to mobilise these fundamental changes in relationships between major powers is the most urgent issue for Asia, and an immense challenge to Australian diplomacy. But nothing is more important for us.
And Japan? Sam says I ask nothing of Japan. I don’t think that’s right. As I think I made clear in my op-ed on Friday, stable major power relations in Asia will require Japan to accept a closer relationship between the US and China, and hence give up the comfortable assurance that the US will always back Japan, right or wrong, in any dispute with China. For Japan that is a very scary prospect, but the alternative – a systemically adversarial relationship between the US and China – is even scarier. These are the issues that will do most to shape Asia’s future, and these are the issues that Rudd should have been addressing in Tokyo last week. His bogus Big Ideas were simply a distraction. Worse, they may erode his credibility, and hence his credentials for serious diplomacy on real issues in future.
White's analysis is very much with our own. As we said on 14 June, this is all about domestic posturing.
Who is White? His Government experience seems to have been working with a previous Labor administration.
Adding Noughts also has a post worth reading on this topic.
I am so unenthusiastic about the PM’s diplomacy. There are two reasons.
First, I do not believe he is serious about the whole thing. Everything that Rudd has said and the way he has said it about the Asia-Pacific Community suggests that this was an idea dreamed up on the run to provide story lead for his Asia Society speech and a news peg for his trip to Japan and Indonesia. If this was a serious policy proposal, we would have seen evidence of deep thought, careful preparation, detailed exposition and patient diplomacy – and key regional players would have been sounded out well in advance. It looks to me as if none of this happened. There seems to be a pattern emerging here, because the same is true of the nuclear disarmament idea Rudd announced in Japan a few days later. Let me stick my neck out and offer a prediction: in six months both ideas will have disappeared completely from sight. That is why I call them ‘strangely meaningless’: because it is meaningless to announce what purport to be major policy initiatives without doing any of the work needed to develop, promote and realise them, and it is strange, and sad, to see our government doing foreign policy this way.
Second, I don’t much like the Asia-Pacific Community idea, even if Rudd is serious about it, because I do not think it is an effective way to address the real risks and challenges we face in Asia. Let’s leave to one side a host of questions about the appropriateness of taking the EU as an exemplar (though I can’t help but wonder, for example, whether Mr Rudd is ready to promote free movement of peoples across national borders in his Asia Pacific Community, as they have in the EU). Let’s even leave to one side the deeper question of whether Rudd was thinking of his Asia Pacific Community as a forum (like APEC) or an institution (like the EU): he seemed confused on this, as he used both metaphors, but probably he had in mind a forum that might one day grow into an institution.
The most important question then is whether the best way to start building a peaceful future for Asia is by building new forums, or in some other way. Forums are fun, which is why diplomats and politicians tend to focus on them – the alphabet soup of ASEAN plus 3, ARF, Six-Party Talks and all that. But what really matters is how countries get on, and especially how big and powerful countries get on with one another. It is the attitudes and expectations they bring to the forums that determine what gets agreed and what doesn’t. The forums themselves have at most a marginal effect. Does anyone really believe that strategic competition is growing between the US and China because they have not found the right shaped table to sit down at yet?
So let’s get real: before we can build forums or institutions that work effectively to create the kind of peaceful Asia we all hope for in the Asian Century, the region’s major powers are going to have to start accepting that they have to deal with one another on a rather different basis from the way they have been operating for the last few decades. To build Rudd’s vision, the US will have to start treating China as an equal, China will have to start treating Japan as an equal. These are big concessions, which will not easily be made, and so far there is little sign that they will be. Helping to mobilise these fundamental changes in relationships between major powers is the most urgent issue for Asia, and an immense challenge to Australian diplomacy. But nothing is more important for us.
And Japan? Sam says I ask nothing of Japan. I don’t think that’s right. As I think I made clear in my op-ed on Friday, stable major power relations in Asia will require Japan to accept a closer relationship between the US and China, and hence give up the comfortable assurance that the US will always back Japan, right or wrong, in any dispute with China. For Japan that is a very scary prospect, but the alternative – a systemically adversarial relationship between the US and China – is even scarier. These are the issues that will do most to shape Asia’s future, and these are the issues that Rudd should have been addressing in Tokyo last week. His bogus Big Ideas were simply a distraction. Worse, they may erode his credibility, and hence his credentials for serious diplomacy on real issues in future.
White's analysis is very much with our own. As we said on 14 June, this is all about domestic posturing.
Who is White? His Government experience seems to have been working with a previous Labor administration.
Adding Noughts also has a post worth reading on this topic.
Jun 18, 2008
Australia Keen On CER Investment Treaty
Fran O'Sullivan writes today on the welcome news that the Rudd Government is keen on finishing off CER's unfinished business - investment. This is great news. But what disconcerts us is this
But other signals given during the forum - which was held under Chatham House rules - suggest a measure of impatience had been built-up on the Australian side over the length of time it has taken Wellington to respond to prior approaches and the clear view that domestic political concerns had got in the way.
Cullen has been sitting on this issue since October 2006 - the date the previous Australian Liberal Government lobbed in its own "offer" to match the investment threshold provisions in its free trade deal with the United States. Under the US-Australia FTA, US investors enjoy (in most circumstances) the right to establish, acquire and operate investments in Australia on an equal footing with local investors and those of other countries.
This is a worry as New Zealand was the side that was pushing for an investment treaty for many years, but Australia was reluctant. If we have the opportunity to secure this now we should be taking it.
But other signals given during the forum - which was held under Chatham House rules - suggest a measure of impatience had been built-up on the Australian side over the length of time it has taken Wellington to respond to prior approaches and the clear view that domestic political concerns had got in the way.
Cullen has been sitting on this issue since October 2006 - the date the previous Australian Liberal Government lobbed in its own "offer" to match the investment threshold provisions in its free trade deal with the United States. Under the US-Australia FTA, US investors enjoy (in most circumstances) the right to establish, acquire and operate investments in Australia on an equal footing with local investors and those of other countries.
This is a worry as New Zealand was the side that was pushing for an investment treaty for many years, but Australia was reluctant. If we have the opportunity to secure this now we should be taking it.
Jun 17, 2008
A More Positive Spin On Last Week's Forum With The Aussies
Colin James has a look at last week's Australia New Zealand Leadership Forum. It is a far more positive assessment than that from Brian Fallow yesterday. Read it here
Jun 16, 2008
Business Drops The Ball On Australia
Brian Fallow reports in today's Herald on the Australia-New Zealand Leadership Forum. He suggests that business failed to take advantage of the opportunity afforded by the meeting. This really annoys The Hive. Not the article, but what it reports. This is marked contrast to the US and Japan counterparts where business is firmly in the driving seat. It is little wonder that the US and Japanese fora deliver more earth shattering results. Thanks Brian for writing this critique.
Update :we are told that Fallow has been very negative and that business leaders did press for improvement in several areas.
Update :we are told that Fallow has been very negative and that business leaders did press for improvement in several areas.
Jun 14, 2008
Does Grant Robertson Believe Rudd Was Right Not To Consult New Zealand On His "New" Idea?
Interesting post from Grant Robertson (we did actually link to the WSJ article in question and the author's background is clearly stated at the bottom of the WSJ article, but then "Attack, attack, attack -never defend, admit nothing, deny everything, launch counter attack" is not just a Winston Peters strategy). It is not clear from Grant what he thinks about the fact that Rudd did not think it necessary to consult with New Zealand before going public on his plan. Is being a bit quick out of the starting blocks a reference to this?
We will do a separate post on "attack, attack etc". But since we are sporting types we refer Grant to page 57 of the June 2 issue of the New Yorker. There may still be a copy at Magnetix or Borders, should Grant not subscribe.
We will do a separate post on "attack, attack etc". But since we are sporting types we refer Grant to page 57 of the June 2 issue of the New Yorker. There may still be a copy at Magnetix or Borders, should Grant not subscribe.
Messages To Canberra
Well if the Aussies missed the messages being conveyed by Trans Tasman and The Hive they will get it double barrel by reading today's Herald. Fran O'Sullivan makes it quite clear what New Zealand expects for the future.
Memo Kevin Rudd - Stay family, if you want to be taken seriously. That's the clear message Helen Clark sent to the Australian Prime Minister when she leaked to a Wellington newsletter that she had not been consulted before Rudd floated his vision of an Asia-Pacific community planning economic, political and security matters.
Clark's decision to use Trans Tasman - rather than her Monday post-Cabinet press conference - to signal her gritted-teeth interest in hearing more from Australia's Acting Prime Minister Julia Gillard about the new venture was well chosen.
Clark could simply resort to plausible deniability by suggesting to Gillard that the newsletter had beaten up her position. But Trans Tasman is well read by bureaucratic and media elites in both New Zealand and Australia.
Australia's diplomats are well aware that Clark sets aside a weekly briefing with the publication to telegraph her Government's positions.
In the parlance of the diplomatic game, the Prime Minister had got her position out there.
Fran concludes
Right from the time he was Labor's shadow foreign minister, Rudd framed his party's foreign policy in terms of "Three Pillars" - its engagement with the United Nations, Asia and the United States alliance. It was apparent that the former Australian foreign affairs official did not rate this country as a significant other, warranting just a few paragraphs in his 150-page document.
But there is a more profound issue at work here.
The reality is that while New Zealand was not in the frame, neither were many leading nations consulted. Barely coded messages have been sent by other nations to strengthen bilateral relations first, before hoping to take a leadership role in the region.
Rudd's enthusiasm simply got the better of good judgment.
Even the Australian headlined a critical commentary on his clumsy diplomacy "The new Mad Hatter".
If Gillard is perceptive she will take back to Canberra a clear view that New Zealand also intends to be a leading small player in the region.
It has no pretensions to be a middle power. But through its more understated manner, it can get things done.
There are some things mum knows.
Fran is being diplomatic. Every Asian capital we have consulted over the Rudd idea has said that it is ill conceived, poorly executed, and its announcement verged on the offensive and arrogant. They don't like the Australians much to begin with. They like Rudd less now. The fact is that Asians don't say "no". They know Rudd knows this and they suspect that he has cynically used this grand idea to posture at home, knowing full well that it will get nowhere.
Memo Kevin Rudd - Stay family, if you want to be taken seriously. That's the clear message Helen Clark sent to the Australian Prime Minister when she leaked to a Wellington newsletter that she had not been consulted before Rudd floated his vision of an Asia-Pacific community planning economic, political and security matters.
Clark's decision to use Trans Tasman - rather than her Monday post-Cabinet press conference - to signal her gritted-teeth interest in hearing more from Australia's Acting Prime Minister Julia Gillard about the new venture was well chosen.
Clark could simply resort to plausible deniability by suggesting to Gillard that the newsletter had beaten up her position. But Trans Tasman is well read by bureaucratic and media elites in both New Zealand and Australia.
Australia's diplomats are well aware that Clark sets aside a weekly briefing with the publication to telegraph her Government's positions.
In the parlance of the diplomatic game, the Prime Minister had got her position out there.
Fran concludes
Right from the time he was Labor's shadow foreign minister, Rudd framed his party's foreign policy in terms of "Three Pillars" - its engagement with the United Nations, Asia and the United States alliance. It was apparent that the former Australian foreign affairs official did not rate this country as a significant other, warranting just a few paragraphs in his 150-page document.
But there is a more profound issue at work here.
The reality is that while New Zealand was not in the frame, neither were many leading nations consulted. Barely coded messages have been sent by other nations to strengthen bilateral relations first, before hoping to take a leadership role in the region.
Rudd's enthusiasm simply got the better of good judgment.
Even the Australian headlined a critical commentary on his clumsy diplomacy "The new Mad Hatter".
If Gillard is perceptive she will take back to Canberra a clear view that New Zealand also intends to be a leading small player in the region.
It has no pretensions to be a middle power. But through its more understated manner, it can get things done.
There are some things mum knows.
Fran is being diplomatic. Every Asian capital we have consulted over the Rudd idea has said that it is ill conceived, poorly executed, and its announcement verged on the offensive and arrogant. They don't like the Australians much to begin with. They like Rudd less now. The fact is that Asians don't say "no". They know Rudd knows this and they suspect that he has cynically used this grand idea to posture at home, knowing full well that it will get nowhere.
Jun 13, 2008
Audrey Young On The Current State Of Australia New Zealand Relations
Audrey Young today suggests that Helen Clark's meeting tonight with the Australian Deputy PM will be an interesting one. She suggests that relations are not what they should be, and that the fault is not on this side of the Tasman
But despite being the closest of neighbours, in sister parties, and with DFAT and MFAT working closely, no reference was made to her by Rudd about his grand idea for an EU-style expansion of the region and dispatching an envoy to capitals to push idea.
Either he consulted other countries, but not her, or he consulted no one, which is plain stupid.
According to the tipsheet Transman Clark was not consulted and has been talking about the Rudd Plan through ''gritted teeth.''
It is not hard to see why. Rudd is six months into his job and hasn't attended a single big regional meeting (East Asia Summit, Apec) and he is offering everyone else his ''vision'' about where to go.
He was apparently pushing the same idea when he was a DFAT officer.
Leadership for Kevin in 08 is not about being able to recognise a good idea or a good policy - anyone can do that - it is knowing how to turn it into reality - of knowing who your friends are.
But despite being the closest of neighbours, in sister parties, and with DFAT and MFAT working closely, no reference was made to her by Rudd about his grand idea for an EU-style expansion of the region and dispatching an envoy to capitals to push idea.
Either he consulted other countries, but not her, or he consulted no one, which is plain stupid.
According to the tipsheet Transman Clark was not consulted and has been talking about the Rudd Plan through ''gritted teeth.''
It is not hard to see why. Rudd is six months into his job and hasn't attended a single big regional meeting (East Asia Summit, Apec) and he is offering everyone else his ''vision'' about where to go.
He was apparently pushing the same idea when he was a DFAT officer.
Leadership for Kevin in 08 is not about being able to recognise a good idea or a good policy - anyone can do that - it is knowing how to turn it into reality - of knowing who your friends are.
Is Kevin Rudd A Sexist Pig?
Could Rudd's foreign policy marginalisation of New Zealand be a result of sexist attitudes? Maybe. From what we hear several senior New Zealand women leaders could have done with a dose of anger management counselling when they read about Rudd's Asia Pacific Community idea in the newspaper.
It seems that Rudd is capable of applying double standards and sexist attitudes to women. See this from CNN.
It seems that Rudd's deputy Julia Gillard is in full support of her Leader.
It seems that Rudd is capable of applying double standards and sexist attitudes to women. See this from CNN.
It seems that Rudd's deputy Julia Gillard is in full support of her Leader.
Jun 11, 2008
Rudd's Clumsy Asian Diplomacy
We found this interesting commentary on Australian foreign policy under Rudd in the Wall Street Journal. We recommend the entire article but what interested us most was this comment on Rudd's Asia Pacific Community idea (was NZ consulted on this?)
Further muddying the waters, Mr. Rudd last week proposed the establishment of an Asia-Pacific Community by 2020. Little detail was provided about what such a group would actually do; about the only thing we know for sure, following media questioning, is that he isn't proposing a single regional currency. It could well be a pie in the sky suggestion, but the mere fact that the government is suggesting such a thing has potential diplomatic ramifications.
The problem is not just that Mr. Rudd's grand regional vision lacks detail and smacks of policy made on the fly. And it certainly isn't that the region's existing multilateral institutions are so well-designed and on top of the challenges facing the region – whether financial meltdowns, natural disasters or security flashpoints – that there's no need for enhanced cooperation.
Rather, it is that Asia's stability and prosperity – and a successful Australian foreign policy – continue to be underpinned by strong bilateral relationships. It is democracies such as Australia, the U.S., Japan and India that work together in partnerships to provide the overwhelming majority of the region's "public goods" – as they did after the 2004 tsunami. The best way to ensure that the Asia-Pacific region remains peaceful and continues to prosper is to work with our democratic partners in particular to ensure these sinews of regional cooperation are kept in good repair.
The Rudd government's clumsy early diplomacy has set back this agenda. There is a place for selective, well-considered multilateral diplomacy and for improving the efficiency of existing organizations, particularly the Asia-Pacific Economic Cooperation association. But even though Mr. Rudd has already shown at home that he is a master of political symbolism, the last thing the region needs is more grand visions, envoys and international conferences. The brand of "activist middle power diplomacy" he espouses is more likely to succeed if he leaves the gesture politics at home and concentrates on first earning the trust and respect, and then perhaps the support, of Australia's natural partners.
Further muddying the waters, Mr. Rudd last week proposed the establishment of an Asia-Pacific Community by 2020. Little detail was provided about what such a group would actually do; about the only thing we know for sure, following media questioning, is that he isn't proposing a single regional currency. It could well be a pie in the sky suggestion, but the mere fact that the government is suggesting such a thing has potential diplomatic ramifications.
The problem is not just that Mr. Rudd's grand regional vision lacks detail and smacks of policy made on the fly. And it certainly isn't that the region's existing multilateral institutions are so well-designed and on top of the challenges facing the region – whether financial meltdowns, natural disasters or security flashpoints – that there's no need for enhanced cooperation.
Rather, it is that Asia's stability and prosperity – and a successful Australian foreign policy – continue to be underpinned by strong bilateral relationships. It is democracies such as Australia, the U.S., Japan and India that work together in partnerships to provide the overwhelming majority of the region's "public goods" – as they did after the 2004 tsunami. The best way to ensure that the Asia-Pacific region remains peaceful and continues to prosper is to work with our democratic partners in particular to ensure these sinews of regional cooperation are kept in good repair.
The Rudd government's clumsy early diplomacy has set back this agenda. There is a place for selective, well-considered multilateral diplomacy and for improving the efficiency of existing organizations, particularly the Asia-Pacific Economic Cooperation association. But even though Mr. Rudd has already shown at home that he is a master of political symbolism, the last thing the region needs is more grand visions, envoys and international conferences. The brand of "activist middle power diplomacy" he espouses is more likely to succeed if he leaves the gesture politics at home and concentrates on first earning the trust and respect, and then perhaps the support, of Australia's natural partners.
Jun 9, 2008
Australia-New Zealand Leadership Forum
Audrey Young has more detail on this week's Leadership Forum with the Aussies. It is a pitty that Phil Goff is not going to be there. We are not sure about Rudd's 2020 vision. We are doing some digging on the otherside of the ditch and will dedicate some posts to this when we know more.
Jun 8, 2008
The Australia Relationship
Fran O'Sullivan today previews the forthcoming meeting of Australian and New Zealand political and business leaders at the leadership forum next weekend. This is our most important relationship and in some ways the most sensitive. It is another relationship that has really not developed much at Government to Government level in recent years, in sharp contrast to the ever increasing economic integration that is occurring. Attempts by the previous co-chairs of the relationship to take the formal relationship forward saw them being fired. On the New Zealand side the Chair is now an SOE chief - NZ Post's John Allen, deemed by MFAT and Government to be a safe pair of hands (ie will do what he is told and won't rock the boat).
Fran looks at what is on the agenda for the discussions and then looks at what should be up for discussion. It will be a great shame if the leaders from both sides of the Tasman don't take this opportunity to discuss Fran's agenda (perhaps with the Customs Union idea dropped).
We also hope that National's Tim Groser is part of the process. He was one of the original negotiators of CER and would be well placed to lead discussion on the first item of Fran's agenda.
What should be on agenda?
The global food crisis: New Zealand and Australia can take leadership on pushing for freer farm trade at the WTO. New Zealand's long-run economic prospects are quite rosy given the dire outlook for food supplies as the world population escalates. This factor is not appreciated sufficiently by Australian elites.
The credit crunch: The New Zealand Reserve Bank fought off an attempt to administer Australasian banking prudential supervision by a single regulator. With the credit crunch in full swing, the wisdom of governor Alan Bollard's subsequent moves to bolster the capital of New Zealand-domiciled banks is clear: the Australian parent banks have not "turned off the tap". But there are still common challenges which should be confronted.
Taxation: Leading Kiwi accountants such as PriceWaterhouseCoopers' John Shewan were chastised by Costello for pushing for mutual recognition of imputation or franking credits. But as the transtasman investment environment gains greater connectivity this issue cannot be left off the table.
Currency: National's John Key pushed a common currency at the last forum and has continued to do so. His contention is Kiwi business would benefit through lower transactional costs. Opponents have pointed to negatives, such as the end of an independent monetary, loss of economic sovereignty and a reduced ability to insulate ourselves from any shocks befalling the Australian economy.
Customs union: The Treasury asked the New Zealand Institute for Economic Research to explore a transtasman customs union, a free trade area with a common tariff. There are revenue implications on both sides and difficulties posed by the varying degrees of protection.
Fran looks at what is on the agenda for the discussions and then looks at what should be up for discussion. It will be a great shame if the leaders from both sides of the Tasman don't take this opportunity to discuss Fran's agenda (perhaps with the Customs Union idea dropped).
We also hope that National's Tim Groser is part of the process. He was one of the original negotiators of CER and would be well placed to lead discussion on the first item of Fran's agenda.
What should be on agenda?
The global food crisis: New Zealand and Australia can take leadership on pushing for freer farm trade at the WTO. New Zealand's long-run economic prospects are quite rosy given the dire outlook for food supplies as the world population escalates. This factor is not appreciated sufficiently by Australian elites.
The credit crunch: The New Zealand Reserve Bank fought off an attempt to administer Australasian banking prudential supervision by a single regulator. With the credit crunch in full swing, the wisdom of governor Alan Bollard's subsequent moves to bolster the capital of New Zealand-domiciled banks is clear: the Australian parent banks have not "turned off the tap". But there are still common challenges which should be confronted.
Taxation: Leading Kiwi accountants such as PriceWaterhouseCoopers' John Shewan were chastised by Costello for pushing for mutual recognition of imputation or franking credits. But as the transtasman investment environment gains greater connectivity this issue cannot be left off the table.
Currency: National's John Key pushed a common currency at the last forum and has continued to do so. His contention is Kiwi business would benefit through lower transactional costs. Opponents have pointed to negatives, such as the end of an independent monetary, loss of economic sovereignty and a reduced ability to insulate ourselves from any shocks befalling the Australian economy.
Customs union: The Treasury asked the New Zealand Institute for Economic Research to explore a transtasman customs union, a free trade area with a common tariff. There are revenue implications on both sides and difficulties posed by the varying degrees of protection.
May 12, 2008
Aussies Inspired By Kiwi Example?
Australia trying to muscle in on our image? Pages 72 and 73 of The Economist suggest they may be. Apparently Chairman Kevin and colleagues don’t like “where the bloody hell are you” and instead like the idea of a more high brow appeal. The Economist suggests that Tourism Australia might like to seek inspiration from New Zealand’s “100% Pure New Zealand” campaign which amongst other things “successfully targeted adventure seeking tourists” and which is “stirring rather than stereotypical”. We shall see. “Where the bloody hell are you” did it for us!
Mar 9, 2008
Let's Offer The Productivity Commission Asylum This Side Of The Ditch
New Zealanders don't like feeling jealous of their cousins in Australia, but one area where brave economists and business leaders are prepared to admit this feeling is over the existence of the Productivity Commission. New Zealand has no comparable institution and it is little wonder that New Zealand's productivity performance has suffered from this difference.
As we have reported at The Hive the new Australian Government led by Chairman Rudd
and notables such as Kim Il-Carr are squandering this advantage over New Zealand and ignoring the Productivity Commission in important policy reviews.
This seems to us to offer New Zealand a huge potential windfall gain. Why don't we, should we have a change of Government in New Zealand, offer the Productivity Commission a new home in Wellington? There is plenty of work to be done this side of the ditch, maybe starting with a review of New Zealand trade policy.
One of the great fans of the Productivity Commission is National Party Trade Spokesperson Tim Groser. He gave a speech at a cheerleading conference hosted by the Tasman Transparency Group on the need to export the Productivity Commission model in Sydney last July. So Tim, there is a challenge for you - are you prepared to offer Gary Banks and his team asylum once you become Minister?
Mar 6, 2008
Why Is Rudd Not Using The Productivity Commission?
Andy Stoeckel asks why in The Australian....
IN its annual review of member states, Going for Growth, released yesterday, the Organisation for Economic Co-operation and Development highlighted that the main reason Australia's per capita income is below that of the US is lower productivity.
The Rudd Government made much of productivity in the run-up to last year's election, and for good reason. Productivity is the key to a more prosperous, cleaner, greener Australia, with lower inflation to boot. Productivity means you can have more for less. It means we can have more income using fewer workers (there is a skills crisis), less water (water restrictions are in force) less energy (there are worries about climate change) and less capital (there is a credit crunch). But there is a creeping sense that the Rudd Government is already losing its way on the productivity front.
The biggest driver of productivity is the way people behave economically: what they do and how they do it. Economic behaviour is dictated by the incentives people face. And incentives are shaped in a significant way by policies. If the price of water goes up, people have an incentive to conserve it. Engineers have an incentive to design more water-efficient appliances and irrigation technology. Scientists have an incentive to breed more water-efficient plants. Planners have an incentive to build more water storages or design systems for water recycling. The result is we produce more goods and services with less water: that's productivity. But as Treasury secretary Ken Henry reminded us yesterday in the Ian Little Memorial Lecture, our policies do not let the price of water go up. Instead, we have costly regulation and rationing. We are not using water in its highest value use. We do not yet have best policies in the water market.
So how do we get good policies that allow for productivity? The answer is through the ongoing public scrutiny of the national benefits and costs of the policy choices we face. For best results this scrutiny has to be done with some particular features in mind. One is the results have to be credible in the eyes of the public. Good reviews can be done by ad hoc committees, but perceptions matter. Credibility is best achieved by an independent body professionally scrutinising policies in a fully open and transparent way. For when the electorate comes to accept and understand good policies it will vote for them. That is, good public governance processes educate the electorate about better policies and eventually they get adopted. Good transparent policy reviews change the politics of reform.
We know what to do to have an efficient water market; Henry spelled it out (again). It's the politics that holds us back.
In Australia we have the world's best transparent process of scrutiny of policy, provided it is used.
That process is run by the Productivity Commission. It was first set up as the Industries Assistance Commission under Gough Whitlam and later given a new lease of life by the Hawke-Keating government. The commission has done us proud and Australia's performance improved markedly once it got in on the act. International institutions attest to this.
Yet, as Melbourne Business School's Paul Kerin noted in The Australian last month, the Rudd Government has announced a series of reviews that do not use the commission's transparency processes. Reviews have been announced into car tariffs, trade policy and quarantine arrangements, to name a few. But these bypass the commission's transparency processes. To forsake the world's best transparent process of review policy, where independence is defined by statute, unnecessarily invites the question of whether there is a hidden agenda. The electorate may not believe the findings. The educative role of policy scrutiny will be lost and the politics of reform set backwards. The chance to lift productivity may be lost.
Good transparent policy reviews by an independent agency work through several subtle interrelated ways. They identify what is in the national interest, whether that is more income or clear air. Such reviews expose vested interests and weaken their influence. Transparent reviews, conducted under basic principles of good governance, where discussion papers are circulated, draft reports issued and open submissions taken from the public, themselves subject to scrutiny, all serve to involve stakeholders and lower the cost of educating the electorate about good policy choices.
Transparency helps build countervailing forces for reform and thereby helps shift the politics of reform.
We have a Productivity Commission set up by previous Labor governments for good reason and effect. We should use it if we want to lift productivity and prosper as a nation with less waste of our scarce resources.
Andy Stoeckel is executive director of the Centre for International Economics in Canberra.
IN its annual review of member states, Going for Growth, released yesterday, the Organisation for Economic Co-operation and Development highlighted that the main reason Australia's per capita income is below that of the US is lower productivity.
The Rudd Government made much of productivity in the run-up to last year's election, and for good reason. Productivity is the key to a more prosperous, cleaner, greener Australia, with lower inflation to boot. Productivity means you can have more for less. It means we can have more income using fewer workers (there is a skills crisis), less water (water restrictions are in force) less energy (there are worries about climate change) and less capital (there is a credit crunch). But there is a creeping sense that the Rudd Government is already losing its way on the productivity front.
The biggest driver of productivity is the way people behave economically: what they do and how they do it. Economic behaviour is dictated by the incentives people face. And incentives are shaped in a significant way by policies. If the price of water goes up, people have an incentive to conserve it. Engineers have an incentive to design more water-efficient appliances and irrigation technology. Scientists have an incentive to breed more water-efficient plants. Planners have an incentive to build more water storages or design systems for water recycling. The result is we produce more goods and services with less water: that's productivity. But as Treasury secretary Ken Henry reminded us yesterday in the Ian Little Memorial Lecture, our policies do not let the price of water go up. Instead, we have costly regulation and rationing. We are not using water in its highest value use. We do not yet have best policies in the water market.
So how do we get good policies that allow for productivity? The answer is through the ongoing public scrutiny of the national benefits and costs of the policy choices we face. For best results this scrutiny has to be done with some particular features in mind. One is the results have to be credible in the eyes of the public. Good reviews can be done by ad hoc committees, but perceptions matter. Credibility is best achieved by an independent body professionally scrutinising policies in a fully open and transparent way. For when the electorate comes to accept and understand good policies it will vote for them. That is, good public governance processes educate the electorate about better policies and eventually they get adopted. Good transparent policy reviews change the politics of reform.
We know what to do to have an efficient water market; Henry spelled it out (again). It's the politics that holds us back.
In Australia we have the world's best transparent process of scrutiny of policy, provided it is used.
That process is run by the Productivity Commission. It was first set up as the Industries Assistance Commission under Gough Whitlam and later given a new lease of life by the Hawke-Keating government. The commission has done us proud and Australia's performance improved markedly once it got in on the act. International institutions attest to this.
Yet, as Melbourne Business School's Paul Kerin noted in The Australian last month, the Rudd Government has announced a series of reviews that do not use the commission's transparency processes. Reviews have been announced into car tariffs, trade policy and quarantine arrangements, to name a few. But these bypass the commission's transparency processes. To forsake the world's best transparent process of review policy, where independence is defined by statute, unnecessarily invites the question of whether there is a hidden agenda. The electorate may not believe the findings. The educative role of policy scrutiny will be lost and the politics of reform set backwards. The chance to lift productivity may be lost.
Good transparent policy reviews by an independent agency work through several subtle interrelated ways. They identify what is in the national interest, whether that is more income or clear air. Such reviews expose vested interests and weaken their influence. Transparent reviews, conducted under basic principles of good governance, where discussion papers are circulated, draft reports issued and open submissions taken from the public, themselves subject to scrutiny, all serve to involve stakeholders and lower the cost of educating the electorate about good policy choices.
Transparency helps build countervailing forces for reform and thereby helps shift the politics of reform.
We have a Productivity Commission set up by previous Labor governments for good reason and effect. We should use it if we want to lift productivity and prosper as a nation with less waste of our scarce resources.
Andy Stoeckel is executive director of the Centre for International Economics in Canberra.
Feb 29, 2008
Australia Getting Cold Feet On Free Trade With China
While New Zealand moves towards signature of its FTA with China, Australia might eb moving in the opposite direction. Trade Minister Simon Crean is reviewing the negotiation.
The Hive wonders whether this is really about concern at the quality of the potential deal. The FTA will be a difficult sell to some areas of Australian industry - and who is Industry Minister? None other than Kim Il-Carr (described to us today as probably the most left wing Minister ever in Australia's history).
The Hive wonders whether this is really about concern at the quality of the potential deal. The FTA will be a difficult sell to some areas of Australian industry - and who is Industry Minister? None other than Kim Il-Carr (described to us today as probably the most left wing Minister ever in Australia's history).
Feb 27, 2008
Australia: Trade Policy Review
This will not be news to those who follow developments across the ditch closely. Last week Australia's Trade Minister Simon Crean announced a review of Australia's trade policy and trade performance. The reason: because, minerals aside, Australia has felt that it has been under performing in its exports.
This review seems a bit strange to us here at The Hive, particularly as it seems to being done by the wrong people. We would have thought it logical for the Productivity Commission (that most excellent of institutions that we are very jealous of this side of the ditch) to undertake any review of this nature. Instead it is being done by David Mortimer, the chairman of Leighton Holdings and Australia Post, will head the review, with the assistance of HSBC chief economist John Edwards, a former adviser to Paul Keating during his time as treasurer and prime minister.
Don't get us wrong, John Edwards is a good mate of one of our team. We meet with him regularly. And Mortimer is a serious player also, but neither has the real expertise that is displayed by the productivity commission.
We are also a little surprised that Australia has such a poor opinion of its recent trade performance. And on the policy front it has done very well. The only real misstep has been not to join the Trans-Pacific Strategic Economic Partnership (though the quality of their FTA with Thailand is pretty poor, and they could probably been tougher in the negotiation with the US). Joining P4 must now have greater appeal given the US entry into that process.
Lets hope that one issued covered is a serious questioning of why one economy - CER - negotiates so many FTAs separately? As with climate change we would be far happier if Australia and New Zealand moved in concert. We will drop John Edwards a line......
This review seems a bit strange to us here at The Hive, particularly as it seems to being done by the wrong people. We would have thought it logical for the Productivity Commission (that most excellent of institutions that we are very jealous of this side of the ditch) to undertake any review of this nature. Instead it is being done by David Mortimer, the chairman of Leighton Holdings and Australia Post, will head the review, with the assistance of HSBC chief economist John Edwards, a former adviser to Paul Keating during his time as treasurer and prime minister.
Don't get us wrong, John Edwards is a good mate of one of our team. We meet with him regularly. And Mortimer is a serious player also, but neither has the real expertise that is displayed by the productivity commission.
We are also a little surprised that Australia has such a poor opinion of its recent trade performance. And on the policy front it has done very well. The only real misstep has been not to join the Trans-Pacific Strategic Economic Partnership (though the quality of their FTA with Thailand is pretty poor, and they could probably been tougher in the negotiation with the US). Joining P4 must now have greater appeal given the US entry into that process.
Lets hope that one issued covered is a serious questioning of why one economy - CER - negotiates so many FTAs separately? As with climate change we would be far happier if Australia and New Zealand moved in concert. We will drop John Edwards a line......
Jan 30, 2008
Apple Access To Australia
A few weeks ago we were critical of the lack of coverage in the New Zealand media about the first ever case New Zealand has taken against Australia at the WTO - apples. We were therefore pleased to see today that there were two publications looking at the issue. The Dominion Post (inspired maybe by last night's Australia Day Reception Tim?) wrote a good Editorial on the topic. There is also an analysis of the issues in The Independent (page 4). The Independent suggests that a successful result from the WTO could potentially be worth $50 million plus a year.
The article in The Independent is quite interesting, particularly the comments made by Agriculture Minister Jim Anderton
In the meantime the way remained open for Australia to come back to New Zealand with a mutually satisfactory resolution to the issue, said Agriculture Minister Jim Anderton.
"The ball is now in Australia's court to come up with a proposal. We would assess any proposal made by Australia on its merits."
Is Jim hinting that behind the scenes Australia is seeking an out of court settlement? Certainly we don't think Australia will want to be seen to have lost the case in the WTO as this might encourage further challenges to its strict import regime (which developing countries in particular argue is more about trade protection than disease prevention). We will watch this space very closely.
The article in The Independent is quite interesting, particularly the comments made by Agriculture Minister Jim Anderton
In the meantime the way remained open for Australia to come back to New Zealand with a mutually satisfactory resolution to the issue, said Agriculture Minister Jim Anderton.
"The ball is now in Australia's court to come up with a proposal. We would assess any proposal made by Australia on its merits."
Is Jim hinting that behind the scenes Australia is seeking an out of court settlement? Certainly we don't think Australia will want to be seen to have lost the case in the WTO as this might encourage further challenges to its strict import regime (which developing countries in particular argue is more about trade protection than disease prevention). We will watch this space very closely.
Subscribe to:
Posts (Atom)