Author: ericknight

Treasury boss Martin Parkinson last week returned productivity to center stage of the political discussion in this country. At the dinner speech to the Growth Challenge conference in Melbourne, he argued that Australia’s terms of trade would “come off slowly” as the mining boom matured.

That means growth in living standards will slow over time unless we turn our minds to driving productivity improvements across the economy. There is an obvious place to look – telecommunications infrastructure – which is why it is so astonishing that the recent NBN deal with Telstra and Optus has received so little coverage.

There are political motives at play with the poor coverage. Some saw it as a Government smokescreen for the one year anniversary of The Deposal. Others believe the rural crossbenchers will buy it, no matter what the price. The most likely reason is probably internal workings within the Opposition. Rumor has it that Tony Abbott is keeping Malcolm Turnbull on a tight leash. It’s a strange strategy to adopt. Unless the Opposition can tackle the productivity agenda, their chances at the next election are significantly diminished.

This all raises an obvious question: what should we make of the National Broadband Network? For my thoughts on the subject published in today’s SMH click here.

Yesterday was a hot news day. President Obama announced the withdrawal of 10,000 from Afghanistan, the NBN Co was formally launched, Lord Monckton was hauled up for calling Ross Garnaut fascist, and the departing league of Australia’s 2004 Senators said farewell. Meanwhile, I found myself held up by the security guards in Ultimo, Sydney because my name wasn’t down on their guest list. I was there to appear on the ABC The Drum panel discussion but the security guards did not care one bit. “You’re not on the list so you can’t come in,” they said as I sat in my orange Toyota corolla on Ultimo Road.

I managed to get in eventually. For my take on the latest issues hitting the airwaves, catch Thursday’s (June 23rd) broadcast of The Drum on ABC iview. It’s available for the next seven or so days here. I appear with Tim Soutophamasanne, author of Reclaiming Patriotism, and John Barron, ABC journalist.

We tend to think of Australia as a country whose most valuable resources lie underground. I think that values what we have above ground too lightly. In The Monthly, out now, I make the case through one of Australia’s most compelling entrepreneurs. Shi Zhengrong is not a household name – but he should be. What he has produced is a template for a different kind of Australia – one that weaves its way in the global economy by the thread of its best minds and budding businessmen. Buy a copy or subscribe here to read my essay.

The Economist released a special issue on Australia last week which made a related point. I have written a piece in The Age today – click here – which begins to draw the connections. This is a question ripe for now . We are a country whose economy is booming and whose chief customer, China, is ascendant. It won’ always be, so what are we doing to invest the surplus wisely? Canberra is not giving a lot away in that respect but in my piece in The Age I begin to explore some ideas.

The Government has been leaking all kinds of things about the budget. It comes out next week. Most of what is being leaked isn’t very attractive. In the spirit of Flight of the Concords, they’re putting out the recycling which isn’t part of the foreplay but it’s very important. (Incidentally if you miss this reference check out their song It’s Business Time).

It’s impossible to know what’s fact or fiction until budget night. But some of the most alarming leaks have been around cuts to medical research funding and re-structuring welfare-to-work programmes. You have to wonder why Gillard would focus on these areas. The rumours don’t make any economic sense, as I try to argue in this piece in the Canberra Times from just before Easter.

The more likely scenario might be playing politics. Gillard thinks she can probably take votes from employees in the education and social sectors for granted. It’s for you to decide if she’s right. But if the market’s anywhere near efficient it might take a longer view of history.

I’ll be off regular posts and editorials for the next 6 weeks. The book is taking my full attention and I’ll but online after then. Meanwhile, I have a longer essay in the June edition of The Monthly which may interest. It’s about an untold Australian story of one of this country’s richest men. You probably won’t have heard of him.

Let me reveal one of the most confusing things about climate policy. There are actually two totally separate things going on. One is the policy to try and clean up the economy. In Australia I call this the ‘Clean Up Australia’ campaign. It’s the attempt to remove carbon from the Australian energy sector. The other is the investment agenda. It is the attempt to make the world’s leading clean tech companies have a ‘Made in Australia’ sticker on them. Politicians try to conflate these two policies. The truth is that the two are totally separate.

I wrote a piece in the SMH last week which tries to shed a bit of light on the first of these issues. How much will it actually cost to clean up Australia? The truth is that this is a notoriously hard question to answer. Why? Because it is hard to predict just our competitive Australia’s energy sector really is. Until a price is introduced into the economy, it’s a mug’s game trying to model how it will work.

There is, of course, an a-priori question here. It is this: do you really want to clean up the Australian economy? Phil Coorey on ABC Insiders earlier this year acknowledged what few on the left may concede – decarbonizing the Australian economy will not do an enormous amount to solve climate change. There might be other reasons you want to do it – ethical responsibility, civic virtue, political necessity. But preventing climate change is probably not your strong hard.

Where Australia may punch above it’s weight in decarbonizing the global economy is with technology. We can build the companies and incorporate the technologies which can sell energy into the global market. I have an essay in The Monthly which will come out shortly on this topic. Stay tuned. For now, enjoy this piece in last week’s SMH.