Australia Day

We are all enjoying a short break from work to celebrate Australia Day. It is a time of immense national pride as we honour those citizens who have lived out what we believe it means to be an Aussie - Australian of the Year, Simon McKeon, Young Australian of the Year, Jessica Watson, Senior Australian of the Year,Professor Ron MacCallum and Local Hero Donald Ritchie all offer inspirational examples to us of what any of us can do to make this country great.

But we all know that around the edges of this celebration there are grumblings. Many in our indigenous community see this day much less positively - as the day that marked the beginning of their dispossession of land they had owned and cared for for over 50,000 years. Then there are those living outside New South Wales who feel that celebrating the foundation of that state's initial settlement has nothing to offer them.

So long as we celebrate our National Day on 26th January the focus will be on the issue of settlement, and with it the dispossession of our first-nations people from their lands. Any attempt to ignore the dispossession would result in simply writing our indigenous brothers and sisters out of the story - and what is there to celebrate in that for them?

I have long maintained that the date upon which we became a nation as January 1, 1901 - the beginning of the federation of our states into the Commonwealth of Australia. If we were to celebrate Australia Day on that date (and there are other countries that celebrate their national day on New Year's Day) the symbolic focus would be on all of us, first nations people and immigrant settlers, coming together as one people, under one flag.

Now that I could celebrate. What do you reckon?

Agricultural Economics

In the wake of the severe flooding on the eastern states, particularly Queensland, there will be an enormous and costly task of cleaning up and making good all that was damaged by the water.

Insurance may pay for the restoration of houses and businesses but who is paying for the cost of cleaning up roadways and restoring power and sewerage systems. Well, in most cases the government will simply pay for it. Money may need to be borrowed to do this, and of course we, the taxpayers, will eventually be the ones who pay for it.


Photo source: Daily Telegraph

The economic irrationalists in Opposition, Federally, are beginning to argue that in order to pay for all this, the Government should cut back on unnecessary expenses - "We just can't afford the National Broadband Network now" says Opposition Leader, Tony Abbott. Well, if I recall it, according to him we couldn't afford it before the floods happened, so the call is a bit hollow.

I would like to suggest that the solution to the current situation is found in the practices of a key constituency of the Opposition, a group of people whom the Opposition believes they alone can represent, and even defend - farmers. When farmers have a bad year they go and visit their bank manager and secure a new loan or an extension of their terms to enable them to manage.

If the farmers of this country adopted the proposed practice of the Opposition in running the country there would be no agricultural industry anywhere. A flood would come and the farmers would pack it in, because if they borrowed money it would so increase their costs that they could no longer be competitive.

The reality is that borrowing money in such circumstances enables everyone to spread the enormous cost of this event to be spread over many years, thereby reducing the cost of it - reducing all your other costs in order to pay for something like this up-front will simply lead to the collapse of a whole lot of infrastructure plus the opportunity cost of lost production.

Government debt in Australia is minuscule and despite Opposition protests is not at all toxic. We all live with debt and so long as the debt ratios are safe, which they are, borrowing is actually the best thing to do.