Category: Uncategorized

Speech to ACT Planning and Land Authority seminar on sustainability. 1 December 2008

By CRISPIN HULL

We all want a sustainable future for subsequent generations. But we all want the good life now.

Whether we get sustainable future and what comprises we will have to make with the good life will be almost entirely due to land use and population policy.

Let’s take the extremes: we can use land for mining, oil wells, clear-felling, cotton-farming, rows of residential McMansions, shopping malls and factories and so on. We can use it for national parks, organic farming, public open space, cycleways and so on.

The former uses tend to jeopardise sustainability but contribute to the good life. And vice versa for the latter. Somewhere between the extremes lies the balance that will maximize the good without threatening sustainability.

Alas, we don’t know exactly where that balance is, or even how to find out where it is. Some of us have different views about where that balance is. Some of us will be unduly alarmist; others too optimistic; and others too selfish.

The people who decide on land use – both political and bureaucratic — may have better knowledge or greater understanding, or at least the means of getting it. But they may also be influenced by a range of other factors which will prevent them for making optimal decisions – ideology, emotion or religion might influence them; a desire to be re-elected might drive them. A desire to return favours or get wealthy might influence them.

So how are decision-makers (elected and unelected) influenced (for good or bad)?

In an ideal world it would be a reasoned appraisal of all the facts and advice and deciding in the long-term interests of the whole community. And in that ideal world a well-informed, altruistic community would support the decision either because they understand it and see the decision-makers have done the right thing, or because they trust the decision-makers on past performance or from knowledge of previous sound decisions about which they have knowledge.

But it is not an ideal world. There are many other factors influencing decisions.

1. The link between the community and politics (the media) has a profound influence.

2. Political systems have influence.

3. The way decision makers behave – their personal contacts and relationships (people of influence and others who impress); party leader; party; pre-selectors.

4. The personal qualities of decision makers: gut feel; principle; ideology; religion; corruption; laziness.

Let’s look at some of these influences.

1. Media. The great cases on free speech – Sullivan in the US and Theophanous in Australia (why do the villains get naming rights by the way) – both stressed the importance of a free media in a democratic society. Without it, voters could not be well-informed and democracy would not work.

Unfortunately, the media does not do an especially good job at informing the voters. I do not say that in the glib way that people blame the media for everything from the conviction of Lindy Chamberlain to global warming. I am not pointing a finger of blame here. Rather I want to try to help you understand why the media is not especially good at informing.

For a start, the main aim of media organisations is not to inform the public. Rather it is to stay in existence. To do that it must make a profit, or in the case of public broadcasters get enough public appeal so the public continues to support public broadcasting in a way that prevents political masters withdrawing the money that runs it.

How do you keep those public eyes on your media product so you can make a profit or keep support – not by mere production of information. Rather the media produces “news” which is quite different from “information”. News is determined by “news values”. And these are different from “information values”, which are based solely on importance and usefulness – though there may be a little intersection.

News values are: Impact (consequence), conflict, timeliness, prominence, proximity, currency, human interest, emotion, novelty and the unusual.

Impact and consequence are similar to information values, but the other values are not. And you can see how they can warp information.

Good examples are the public perception of breast cancer, climate change, crime and dangers of all kinds.

Human interest means media covers only the tragic cases of young mums or sports stars suffering breast cancer. Journalists with honest intent cover these stories and report them accurately. The public perception becomes that breast cancer is a disease of women in their 30s and 40s.

On dangers, car crashes are the most likely cause of injury and death, but gets little coverage. Aircraft are much safer but get big coverage.

Crocs, spiders, sharks and snakes get lots of coverage, yet accidents at work are a far bigger killer and maimer.

Novelty and timeliness are critical – the infomation value is the same from one day to the next but if it is “old”, the news value is less. If it is eclipsed by a dead pope on the day it happens it will not be revived later even if the information value is still the same.

Some land-use information gets downgraded or shoved aside this way.

Some politicians are very astute at using the timeliness and novelty requirements of “news values”.

1. Creating “olds”. John Howard often would make a general announcement on refugees or industrial relations – then when the nasty detail arrived later he would brush it away as an “old” story not worth coverage.

2. Creating novelty. Former ACT Chief Minister Kate Carnell would go parachuting or ballooning to get coverage.

The media is ephemeral. If you miss coverage on the day it is gone.

The internet provides a place where information is always available, but the trouble is the main media companies dominate the net and draw the lion’s share of the eyes that see it.

Worse, the hits on prurient stories send messages to news selectors on internet sites that the prurient stories should get great prominence because they will attract more eyes and more ads.
2. Political systems:

We have a vicious circle of politicians doing stunts to get votes and getting media coverage and therefore votes and therefore doing more stunts and spin.

Dangers of single-member seats and majority governments.

They make branch stacking and pre-selection rorts easier.

They make it easier for donations to sound in favourable decisions – particularly development decisions.

Personal contact:

Personal contact can warp decision-making based on sound research.

The testimonial is the most effective advertising. You research extensively and decide an Avanti mountain bike is best buy for you. Day before you buy a mate tells you of a pedal coming off his mate’s Avanti bike. Your research goes out the window and you buy a different bike.

Party, Party Leader, Pre-Selectors:

The need to please the party, the leader and pre-selectors detract from rational evidence-based decision making.

Ideology, Principle, gut feel or Religion

These can get in the way of rational decision making.

Laziness.

Taking the simple populist way out happens often. It is easy and you can get away with it for a long time.

Conclusion

These influences that militate against rational decision-making in the long term interest of the community often result in simplicity being preferred over complexity. Land use and tax are good examples.

But the world is complex. Problems often require complex long-term solutions. Simple solutions are all too often the wrong one.

I don’t pretend that fighting these influences is easy – particularly the media. But at least armed with some understanding of the influences on decision-making you might be in a better decision to take up that fight.

JUST when the arrogant Telstra appeared to have shot itself in the foot, along comes the Government and foolishly lets it off the hook.

Communications Minister Stephen Conroy said the Government’s expert panel would consider Telstra’s 13-page bid for the Australia-wide broadband internet project for which the taxpayer is forking out $4.7 billion. Continue reading “Govt letting Telstra off the hook”

The tax system can be made simpler, but only at a cost to fairness. The trick is to make it simpler where the cost to fairness is minimal. And that is at the lower end of the scale.

Treasury secretary Ken Henry was bemoaning last week that the system is too complicated. He said it had 128 different taxes and that nearly three-quarters of taxpayers used a tax agent compared under a third in New Zealand. Continue reading “Tax simplicity threatens fairness”

Forty-eight years ago, in another transition to a new and hopeful presidency, a prophetic and dire warning was given by a man who knew. His warning has not been heeded and America, and the world is the worse for it.

The question is whether Barack Obama can understand the threat — perhaps the greatest American faces — and resist it. Continue reading “Military-industrial complex still threatens”

Sorry to rain on the party, but covert racism appears to be still alive and well in America.

Yes, the Electoral College vote of about 340 to Barack Obama and about 160 to John McCain was apparently a huge victory for America’s first black president.

But it disguises some other facts and figures which suggest many US voters might have not voted for Obama because of race and others voted for him purely because of race. Continue reading “Figures show race played a part for Obama”

They are lining up on opposite sides. On one side, is the “we are all Keynesians now” mob who are delighting in saying: “We told you so; all this deregulation will end in tears.” Or, “Marx was right; capitalism is inherently unstable. On the other side we have those who say capitalism will rebound as it always does; capitalism is the least worst system; we should not re-regulate for that will sow the seeds of the next recession.

Neither is right. The seeds of this financial crisis lay not in too much de-regulation or too much regulation. Rather, in one poor piece of regulation and one poor piece of de-regulation. Both in the US in the late 1990s. Continue reading “Why did it happen and where did the $ go”

Joy Burch, welcome to the frontbench. Indeed, you may indeed be totality of Labor’s frontbench after the Assembly next meets.

Labor has only seven members. Take away the five ministers and a speaker and that you have a backbench of one. Presumably, that will be the newest member, Joy Burch. It is a bit silly. Continue reading “Pros and cons of Hare-Clark”

DOUBLE dissolution election is a not likely to be a remedy for the woes of the Rudd Government, despite the mutterings of a least one back-bencher. Continue reading “Double dissoultion no remedy”

Usually I bristle when shock jocks and others assert that Canberrans are out of touch. Usually they use the metonomy of “Canberra” rather than use the word Canberrans because it is easier to slag off at a city rather than the people in it.

However, I suspect that many Canberrans may be out of touch in not understanding the levels of ignorance and apathy of public policy questions by the mass of the voting public. Nor do they understand the strength of the forces that will keep them that way. Continue reading “US can’t lead on climate so Australia must”

I went to my financial planner this week to tell him about the results of a marvellous money-saving scheme.

It was a do-it-yourself scheme to replace at least part of the costly commercial supply of a scarce household item with my own “free” supply. Everyone should do it. I am talking about water, of course.

Why pay Actew $2.57 per thousand litres for water that falls free from the sky?

Then my financial planner pointed out some pertinent facts.

Canberra averages 600mm of rain. If you put that on a 200 square metre roof and allow for overflow waste and evaporation you get about 100,000 litres of water.

To collect that amount of water without wasting too much on overflow you would need at least a 4000-litre tank and associated plumbing from the gutters to the tank. You would also need a $600 pump. Total cost: around $3500.

You could buy the 100,000 litres of water from Actew for just $257.00.

So, the financial planner said, the $3500 spent on a rain-water tank is not an investment but a foolish act of consumption. You could put the $3500 to the mortgage and save about $300 a year tax-free and use the money to pay Actew and have some money left over.

So why do people bother with rain-water tanks? Why does the Government encourage people to put them in and, indeed, insist on it with new houses?

We put a tank in for two reasons. In the unlikely event we get to Stage 4 restrictions we want to save valuable plants, particularly irreplaceable mature ones. Secondly, you are not allowed to fill a swimming pool except by bucket unless you get an exemption. You can only get an exemption if you put an ugly, inconvenient “blanket” on the pool. This is irrespective of how low your other water consumption might be.

The swimming pool rules do not bear scrutiny. Swimming pools do not use very much water. Rather the water is being constantly treated and recycled. A pool will use much less water than lawn and about the same as an equivalent sized garden. Pools, particularly lap pools, are good for your health. But prejudice and the politics of envy demand strict rules.

As for government encouragement of tanks, it is more noise than reality. The ACT rebate scheme is pitiful compared to other jurisdictions. You only get a rebate if your tank is connected to a toilet or laundry inside the house. The cost of connection is not worth the rebate. In other jurisdictions, logic is applied. They say that any use of tank water will cut consumption of potable water so they give a rebate for tanks used solely for outside water.

In fact, it is precisely because tank water can be a substitute for potable water on gardens and to fill pools as well as in loos and laundries that tanks could be economic, despite the grim figures quoted above.

Those figures show a return of around 7 per cent for the tank, given that without the tank you would have to buy potable water. The return would be higher for tanks constructed more cheaply at the time the house is built.

Actew, on the other hand, aims for a return on capital of about 7.5%, so it is a fairly even field. ActewAGL has about $14 billion in assets and aims for a profit of $105 million. No doubt there are variations between its water, sewerage, electricity and communications arms, but they are not significant here.

But if demand for water required an expensive new dam, the profit level would fall. So it is in Actew’s interests (and the interests of the environment and the Government’s political interests) to put that day off for as long as possible, if not indefinitely.

Actew is in the odd position for a business: it wants customers to buy less of its product.

Actew has managed ACT’s water supplies pretty well through this drought. Unlike NSW it has exercised prudence rather than panic. NSW committed itself to an energy-guzzling desalination plant for Sydney in the middle of the crisis when dams were at 30 per cent and looks a bit silly now the dams are at 60 per cent. Rather than the grand gesture driven by a looming election, Actew has tweaked the supply with some clever, less expensive engineering and cut demand with some effective educational pressure to comply with some not-too-onerous water restrictions.

Unlike most other businesses, Actew has to deal with major public health and environmental matters as well as securing supply of an essential. Unlike a Mars Bar manufacturer it cannot put a sign up saying “Out of stock.”

Commercially, it means that when (and let’s hope it is not if) steadier rainfall returns and dams fill regularly, Actew will not make as much money as it did pre-drought. More people will have tanks and most people’s water-consumption habits will have fallen permanently.

Even so, Canberrans are still massive consumers of water on a world scale. And on world standards it is very cheap here – still too cheap for price to affect consumption. Consumption reductions have been achieved by education and force.

Water is charged at 77.5 cents for the first 100,000 litres; $1.67 for each of the next 100,000 litres and $2.57 for every 100,000 litres thereafter.

But if the $2.57 rate kicked in 100,000 litres earlier and a higher price was charged after 300,000 litres, the tank would become an economic proposition. New dams could be put off. Water security would improve and Actew’s revenues would rise and could be applied to reducing other rates.

In the meantime, tanks are simply not worth it unless you have a pool which the law prohibits you from filling from the tap.