Tuesday, July 27, 2010

A failure of leadership

LAST week, pollster Gary Morgan pulled out some old polls like, really old. In 1952, when the postwar immigration program was starting to transform Australia from an Anglo-Irish nation into a very diverse one, his dad, Roy Morgan, found 52 per cent of Australians wanted the immigration intake reduced while only 43 per cent wanted to maintain or increase it.

Did prime minister Robert Menzies change the policy to satisfy its opponents? No, he kept immigration rolling, and gradually Australians got used to it. By 1959, the Morgan poll found supporters outnumbered opponents 59-34 and, by 1969, 64-26.

Why didnt Menzies buckle? Because the Labor opposition supported the policy, which it had initiated in 1947. My father used to send the results to both Menzies and Arthur Calwell (then Labors deputy leader), Gary Morgan recalls. They were at one on this, so there was no political issue.

Fast forward to July 2010. The latest Morgan poll finds 58 per cent of Australians support the official immigration program of 170,000 or want it higher, while just 40 per cent want it lower. Yet our political leaders are doing backflips to appease them.

Why? Because Tony Abbott, after repeatedly supporting high immigration, swung his party behind a scare campaign against its own former policies. It is a failure of leadership. And its a classic demonstration of our inability to produce a bipartisan policy when it is needed.

Another, still more important, was our failure to agree on a policy to reduce carbon emissions as cheaply as possible. That means putting a price on them a carbon tax or an emissions trading scheme so business and households factor it into their investments and purchases to minimise their costs.

Instead, the latest in our dumbing down of policy is Julia Gillards plan to take $394 million out of programs to develop solar energy or carbon capture and storage so she can give $2000 each to people trading in pre-1995 cars for more fuel-efficient new ones. This, she says, will cut emissions by 1 million tonnes and save buyers $344 million in fuel costs.

Two points of basic arithmetic. First, $394 million spent to save $344 million? Thats $50 million wasted. Second, as prominent economist Warwick McKibbin points out, the scheme will cost us $394 per tonne of emissions saved. Weve been talking about carbon prices of $20 or $30 a tonne. A solar power plant or carbon capture and storage scheme would cost a fraction of this price.

Which is more dopey: this scheme or the citizens assembly Gillard proposes to debate what to do about climate change? Mmm, hard call.

I am one of millions of Australians angry that no political party at this election is offering a climate change policy that would reduce carbon emissions as quickly as possible, as cheaply as possible.

Abbott rules out ever having a carbon price, instead proposing a mix of expensive gimmicks which the Climate Institute estimates will fall far short of meeting the bipartisan target to reduce emissions to 5 per cent below 2000 levels by 2020.

Gillard says we should have a carbon price, but only when there is community consensus for it (that is, no political pain).

The Greens want to reduce emissions to 40 per cent below 1990 levels by 2020 that is, almost halving our emissions in the next 10 years. How could we do that? Wed have to shut down nearly all our power stations, find hundreds of billions of dollars to invest immediately to build energy-efficient but far more expensive ones, which would put energy-dependent industries out of business. Thats not a serious policy.

You see why we need bipartisan policies? The Garnaut report should have gone to all party leaders, who could then have thrashed out a policy they would all own, which would last for decades, and give investors the certainty to invest their money in low-emission technologies.

Back to immigration. The Howard government was the author of the high-immigration policy that Howards heirs are now campaigning against. It saw that Australia would need a lot more skilled workers, and that it was cheaper to attract migrants with the skills than to train Australians in the numbers needed. So it made three profound changes.

First, after an initial cut to the official migration program, it steadily lifted it from 67,100 to 158,630 in a decade. Second, in 2001 it made a momentous change by allowing foreign students with skills to stay here permanently if they could line up a job after graduating. And third, it introduced section 457 visas to allow businesses to bring in overseas workers in areas of skills shortages.

These were sensible moves, and won broad support. The only controversy was over rorting of section 457 visas by unscrupulous employers. But a crisis was building. Net overseas immigration which includes the movements of temporary workers and students, as well as permanent settlers, New Zealanders and Australians rose to 306,000 in the year to March 2009.

That number was swollen by rorts of student and section 457 visas, by a net 30,000 Australian workers returning home, and by a red-hot labour market.

Since then, Immigration Minister Chris Evans has ended the visa rorts, and there are fewer jobs for foreign workers to fill. Net arrivals so far this year are down 31 per cent.

Its not the immigration program thats out of control. Its Abbotts inability to distinguish between opposition and opportunism.

Immigration is one of Australias great success stories. Its a bipartisan success story. Why cant we keep it that way?