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Wednesday, 4 April 2007

Murray Darling Agreement Still Leaking

The spur of the moment decision by Prime Minister John Howard to try and take over management of the Murray Darling River system is looking more and more like one of those things that seemed like a good idea at the time. At the moment the Victorian Government is still refusing to agree to the Howard plan that was developed without even going to Cabinet and the Secretary of the Treasury, Ken Henry, according to this morning's Australian Financial Review, has given a scathing assessment of the Howard government's recent water and climate-change policies.

Environment Minister Malcolm Turnbull is the man with the difficult task of rescuing what his leader planned as a key plank in his efforts to establish the environmental credentials of his Coalition Government. Yesterday Mr Turnbull was down by the river in Victoria trying to persuade irrigation farmers to back the $10 billion Commonwealth plan but, as the Age reported , he was having some difficulty. The Victorian Farmers Federation told him it wanted a written guarantee that Victorian irrigators would maintain their existing water entitlements and property rights and a written guarantee that bulk water entitlements - legal agreements that divide the water in the Murray-Darling Basin between environmental, agricultural and urban users - would not be reviewed until 2020, as enshrined in state law.

Until the VFF is satisfied, the Victorian Premier Steve Bracks is not inclined to join his fellow Labor Premiers from NSW, Queensland and South Australia and give the Commonwealth the powers it is asking for. Federation president Simon Ramsay is in no hurry saying that "the view by industry is that there is some urgency for the Prime Minister to get all the states signed up. I've said to Malcolm (Turnbull) we won't be pushed into trying to meet their election deadline merely to satisfy the PM."

Nor will the Treasury Secretary be as acquiescent as Mr Turnbull might like. Ken Henry was reported as telling an internal department forum back on 14 March that there is a "greater than usual risk of the development of policy proposals that are, frankly bad" ahead of the federal poll with the Murray Darling proposal being an example. Mr Turnbull this morning tried to defend the lack of Treasury involvement in the plan by saying information had to be gathered from people on the ground. "The Treasury does not know how much it costs to pipe a channel, how much it costs to replace a Dethridge wheel with a computerised flume gate, and how much it costs to line 10 kilometres of leaky pipe along the Murrumbidgee River ," he told ABC radio .

Unfortunately for Mr Turnbull and Mr Howard, what the Treasury does know is nonsense when they read about it after a decision has been made. The Ken Henry assessment will just make the Victorian Government more determined than ever to hold out for a sensible solution.

A Reminder of Catch 22

I am grateful to Brian Miller, one of my esteemed readers, for the following extract from Catch 22 where Yossarian was told he could go back home, released from the army, on one condition:

Colonel Cathcart: All you have to do is ... like us.

Lt Col. Korn: All you have to do is be our pal.

Colonel Cathcart: Say nice things about us.

Lt Col. Korn: Tell the folks at home what a good job we're doing. Take our offer Yossarian.

Colonel Cathcart: Either that or a court-martial for desertion.

Bad News for Unions Not Bad for Labor

Confirmation by the Australian Bureau of Statistics that the trade union membership decline is continuing apace was bad news for union leaders but not necessarily for Labor Leader Kevin Rudd. For a start the union movement knows that the coming election will be a last chance to stop sliding to virtual irrelevance. The return of a Coalition Government would increase the trend which has seen the proportion of Australian workers in a union fall from 35% to 20% since 1994 so there is no point in keeping money in reserve. Every available dollar must be spent by the unions in an effort to get Labor in to office. This should see Kevin Rudd in charge of a record advertising war chest.

With the figures on declining trade union power so stark, the Opposition Leader has the opportunity to tailor the Labor Party message on industrial relations law changes to the broader community. He himself looks a lot different from the traditional labour type of Labor leader and he can use the coming party conference to manufacture some issues where he boldly defeats the union delegates. Knowing that a Rudd victory against John Howard is their only hope of maintaining at least some of their power, the union bosses will gracefully cop hearing that the new modern Labor Party is no longer the political wing of the labour movement.

Mr Rudd can, however, gain an advantage from talking about how the changes that have seen a decline in the past conflicts between capital and labour, and a decline in trade union membership, have increased, rather than decreased, the need for government to adopt the role of ensuring fairness in the labour market. His new way can be guaranteeing that those least capable of negotiating on their own behalf still receive decent rates of pay and conditions.