What Australian newspapers say on Wednesday, April 30, 2008

AAP General News (Australia)
04-30-2008
What Australian newspapers say on Wednesday, April 30, 2008

SYDNEY, April 30 AAP - The debate over whether the Reserve Bank of Australia should
rethink its response to inflation being driven by higher global oil and food prices has
certainly unmasked some middle-class thinking by economic commentators troubled by the
notion of change, The Australian says today in an editorial.

But this is not a debate about whether inflation is such a bad thing after all. Of
course it is. Unchecked inflation saps the value of retirement savings and forces wage
earners to work harder to stand still. But recognising the odious nature of inflation
is a different thing entirely from knowing how to combat it in all circumstances.

Consumer and business confidence measures have plunged but inflation has remained stubbornly
high. Those economists who now question whether a rethink is necessary have accepted the
lessons of history.

The death of an Australian commando in fighting against Taliban forces in Afghanistan,
and on the same day a brazen assassination attempt against the country's president, Hamid
Karzai, during a military parade in the capital, Kabul, were shocking reminders of the
perils inherent in Australia's commitment there, The Sydney Morning Herald says.

To his credit, Prime Minister Kevin Rudd was commendably frank in describing the situation
as grim, and warning that the year ahead will be "difficult and dangerous and bloody",
with more Australian casualties very likely.

But being honest about the immediate security prospects is not enough. If the toll
of dead and wounded does indeed mount, a restive public will increasingly ask other more
basic questions. Such as, what are we hoping to achieve there? What are the benchmarks,
military and political, by which we will know whether we are succeeding, or that it is
time to bring our troops home?

It has been accepted for nearly two decades that a national economy requires a national
system of corporate regulation, The Australian Financial Review says.

Attempts to establish national markets for energy and water followed with mixed results.

But a national system of occupational health and safety rules backed by a competitive
national market for workers' compensation has still not been agreed on.

This is despite the Productivity Commission putting it on the agenda in 1994 and persuading
then Labor minister Gary Johns to run with it. He hit a brick wall of union resistance
that has continued to this day, fortified by the states' reluctance to give up their workers'
compensation monopolies and small business's addiction to the subsidies they receive at
the expense of big companies.



The problem for NSW premier Morris Iemma isn't his government's enthusiasm for privatising
the state's electricity supply, The Daily Telegraph says.

In fact, this newspaper is on record as supporting privatisation, provided consumers
are not slugged with increased costs.

Privatise away, we say. After all, it's probably not a great idea to leave a few trillion
deadline volts in the hands of such a butter-fingered government in the first place.

The problem for Mr Iemma is that he wasn't up front about his government's privatisation
ambitions.

Knowing privatisation would be unpopular with sections of the ALP base, such as unions
and power workers, Iemma's office sought to reassure them before last year's election.

If he had been up front, we may have had a proper debate on the merits - which we still
maintain are considerable - on the privatisation of the state's power supply.



The federal government's preventative health task force might well have logic on its
side when one of its members suggests that beer and wine should be taxed on the basis
of their alcohol content and not on what the drink looks like, The Courier-Mail says.

But really, what a silly idea. The resulting 300 per cent tax increase would see the
cost of a beer jump by 46 cents and bottled wine by 63 cents a glass. And for what reason,
apart from simply satisfying those who like their tax laws neat and tidy?

The argument seems to be that it would be good for the nation's collective well-being.

Similar proposals have been put forward for tobacco, with preventative health taskforce
chairman Rob Moodie calling for a 2.5 cent a cigarette increase in the tobacco tax to
raise $400 million a year for anti-smoking measures.

Others have called for levies on fast food. In other words, there is growing support
for punitive new taxes all in the name of improving the health of those who smoke, drink
or eat too much.

And nothing of course to do with plain old boosting government coffers. Drinkers and
smokers have always been soft targets for federal treasuries. And the way things are going,
fast food munchers might also one day join them.



Plans for a rail link to Melbourne Airport and to extend the city's clearways shows
Melbourne is bursting at the seams, the Herald Sun says.

The rail link proposal, part of the privatised airport's draft master plan, acknowledges
that Tullamarine's infrastructure could soon become inadequate as the population grows.

So far, the government has ruled out an airport rail line, saying it doesn't stack
up financially.

Similar ventures in Sydney and Brisbane have struggled to make money.

But yesterday's announcement the government would extend the operating hours of 150
clearways on arterial roads within 10km of the CBD was a small, but sensible step, the
editorial says.



With interest rates on the rise and pressure from the global credit crunch, the new
Victorian and federal treasurers face tough first budgets, The Age says today.

Victorian Treasurer John lenders delivers his budget on Tuesday, with Mr Swan to follow
a weeks later, the editorial says.

The Reserve Bank board meets on the day of the state budget, and its decision may cast
a shadow over both performances, it said.

Inflation has risen to 4.2 per cent nationally in the year to March, and 4.4 per cent
in Victoria over the same period, the editorial says.

The credit crunch has forced Australian banks to raise interest rates independently
of the Reserve for the first time, despite Australia's limited sub-prime exposure, it
said.

Treasurer Swan has emphasised two elements in the lead-up to the May 13 budget: that
it will be tough and that it will look after `working families', it said.

Labor has guaranteed tax cuts from July but must put the dampeners on spending, it
said. The answer, it said, was infrastructure spending.

Mr Swan's balancing trick will be to help families yet not fuel inflation. A view to
the long-term must be included in the government's economic strategy. Indeed, it should
be the view of all governments, it said.

Infrastructure may not be one of the most beautiful words in the language, and nor
does it have in the short-term much electoral appeal, but it does have the potential to
enrich society if investment is made wisely into its best use for communities.

Hospitals, schools, public transport and water needed greater spending now, the editorial said.

More broadly, in a two-tiered economy the challenge is to expand productivity across
the board. Messrs Swan and Lenders have that task before them, it said.

AAP cmc

KEYWORD: EDITORIALS

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