BALANCING ACT

Correspondence

Bob Katter

I was on the tally-room panel on Queensland election night when it was announced that Premier Campbell Newman had lost his seat and government. I observed that the implications were quite profound. The “average lifespan” of a premier in Queensland was now just 2.4 years, and this in a state where before 1990 there had been only one change of government in seventy-five years. 

I then proceeded to provoke the panel by providing an explanation for this phenomenon. “In 1990, we, the Country Party, were running Queensland on a budget of just $8 billion – the ALP couldn’t run it on $49 billion and the LNP needed $51 billion!” 

A fellow panellist, the ex-Brisbane mayor Jim Soorley (ALP), pointedly commented, “Yeah, you and Leo Hielscher.” (Leo was Under Treasurer of Queensland under Joh Bjelke-Petersen.) 

I replied, “Well, more power to us.” Soorley was undoubtedly right: Leo Hielscher and Sid Schubert delivered, as did the government, a very competent public service. 

Laura Tingle’s Political Amnesia shows the damage done by the politicisation of that “valuable repository of memory,” the public service. Forthright advice and a sense of duty have been replaced by quiescence, or more properly a self-serving acquiescence. But Tingle’s essay falls short of explaining why Queenslanders loved their governments so much for seventy-five years and yet dislike them so intensely now.

George Megalogenis’s Balancing Act quite rightly asserts that “something deeper is happening here than the predictable incompetence of politics.” Thoughtful people would agree. Not surprising, really, because people are now enduring the bitter harvest sewn by twenty-five years of market fundamentalism. What the Honourable Billy Wentworth called “marketisation” is the removal of all mechanisms of protection and support. This while the giants – the US, the EU and Japan – have removed very little. I’ll give but one example of this: world agriculture receives 41.5 per cent of its income from government, whereas Australian agriculture receives only 5.6 per cent. And while the giants have maintained their levels of support, the BRIC economies have remained aggressively interventionist. 

Megalogenis avers that voters are asking for “a return to some form of government intervention in the economy” and that “this is resisted … because of a misguided faith in the open economic model.” It can be added that such faith is very bipartisan, deep-rooted and semi-religious. Consequent upon the mantras of “deregulation” and “National Competition Policy” becoming government fiat, the manufacture of motor vehicles in Australia has ceased, and gone is all whitegoods manufacture, as well as almost all manufacturing of footwear, clothing, personal accoutrements, watches, mobiles, biros and glasses.

Wool, up until deregulation, was Australia’s biggest export commodity. Since deregulation, sheep numbers have declined by 64 per cent. Since deregulation, 31 per cent of the dairy herd has gone. Since deregulation, 17 per cent of our sugarcane production has gone. So too 20 per cent of the beef and veal cattle herd. Ironically, with cattle, this is a result of social interventionism: the ban on live cattle exports and the moratorium placed on all “on-farm” (micro) irrigation. And a propped up Australian dollar.

Not surprisingly, economic “anti”-interventionism has led to no Reconstruction Board and no ethanol. (The US and Brazil have ethanol, and as a consequence their cattle access the valuable byproduct distillers grain.) 

The economic rationalists told us that “freeing the market” – getting rid of industries that need government “intervention” – will liberate resources to move into other industries. After twenty-five years we are entitled to ask, “What other industries?” 

We’re told, “service industries.” Australians’ future is to be waiting on tables and cleaning toilets for foreign visitors (tourism). Or are our universities to become visa shops (education)?

In the ten years before marketisation, electricity prices stayed almost static at a miniscule $740 per household. In the ten years following marketisation, prices shot up to $2347. Now we have the world’s second-highest electricity charges. This prices us out of mineral processing. In April 2016 the steel plant in Whyalla and the nickel plant in North Queensland both announced they would close. Much of the NSW steel industry is also gone. Plans to expand aluminium at Gladstone have been scrapped. 

Megalogenis’s Balancing Act avers that the electorate is demanding intervention in the form of deficit budgeting. He is right, of course. The time-honoured aphorism says it well: “The people in pain will punish the people in power.” 

Megalogenis doesn’t answer a question; he poses a question. He rightly points out that Kevin Rudd borrowed money for insulating your roof and improving school buildings. These generated more debt, but there was no increase in revenue to service this debt. The global financial crisis made this quick fix an imperative. History will undoubtedly applaud Rudd and Swan. But the point still holds: Labor offers social benefits and pork-barrelling, but this is more than offset by the growing burden of servicing the debt that results. This traditional approach is colourfully described by Professor John Quiggin as “Zombie Economics.” 

Professor Brian Galligan long ago delineated how the Queensland Country Party government borrowed nearly half a billion dollars for just two items. This was on an annual state budget of less than $1 billion – it was deficit budgeting on a cosmic scale.

Half of this money was spent building ports, coal loaders and rail lines for the (yet to be developed) Queensland coalfields. The other half was spent building the “world’s biggest” power station. There were no contracted customers for the coal, nor for the electricity. This truly was government venture financing on a grand scale. 

Until the 1960s most referred to Queensland as the State of Stagnation. The 1966 Queensland Year Book recorded coal production of a miniscule 1.6 million tonnes, while aluminium production was nil. By 1986 coal was 69 million tonnes per year. In today’s money that is $5 billion a year. In 1986 Queensland produced 3 million tonnes of alumina and aluminium (in today’s money, earnings of over $1 billion a year). 

Macro-analysis removes Canberra from reality and communicates in a language that only esoteric commentators understand. Government and the Roman Church used Latin in the Middle Ages to prevent people from participating in matters of importance. The expert commentator speaking jargon can get away with not having the slightest clue what he is talking about.

Back in the land of reality, clearly the way forward is deficit budgeting – borrowing money – but only money to create development. What will we get for the $5-billion tunnel announced by the Newman (Qld LNP) government, or Bill Shorten’s $5000-million River Rail crossing. To quote the Courier-Mail, in a wonderful piece of irony, “it will get you home 15 minutes earlier to watch the TV.”

If this money goes not to self-indulgence but to development, it can build the NT–Qld border canal, the rail-line into the Galilee coalfields, the dam projects south-west of Cairns and Townsville – new industries creating $15 billion a year into the indefinite future.

Let me be very specific: the current situation of buying everything from overseas but selling nothing to pay for it is the Path to Perdition.

The question remains: will we walk into the land of reality? Or continue on ever deeper into the ideological wilderness? 

Bob Katter

Bob Katter is a federal MP and the leader of Katter’s Australian Party. He is the author of An Incredible Race of People.