Saturday, August 15, 2009

Saturday Morning Musings - Rudd reshuffles, tax and road transport, Stern Hu and rust-bucket NSW

Another Saturday, another blank screen. Early Saturday morning is one of the best times of the week because the weekend stretches in front with so much apparent time. There is no pressure. The time vanishes, of course, but it is still nice.

There has been so much that I could have written about this week with a little more time. It's just been very interesting.

During the week Australian Prime Minister Rudd announced a number of changes at senior official level. The changes were well received and I thought deservedly so. When Mr Rudd became PM he left all the previous Howard appointees in place. Now with experience of people and well into his first term he is in a better position to make changes.

Under the Howard Government, there was a degree of politicisation in senior official appointments. Unlike the US system where senior official positions are political appointments, the Australian public service is meant to be a-political. Mr Rudd promised to observe this tradition. I think that he has done so.

During the week there were media reports, I do not have the link, quoting Bruce Baird as suggesting that there would be some shrinkage in Australia's huge international education sector. Mr Baird has been appointed by the Australian Government to review the sector. The terms of reference for his inquiry are here, regular reports on the inquiry will be posted here

I am sure that he is right.

Australian Treasury Secretary Ken Henry's review of the Australian taxation system continues with the release of a paper by  Harry Clarke and Dr. David Prentice on taxation and road transport. Harry is a blogger. His post Taxes & the Australian transport sector contains a link to the full paper.

The paper made headline news because it proposes a radical reshape of taxation related to road transport centred on a variant of the user pays principle. I have yet to read the paper, but given my own biases my instinctive reaction was that the proposed approach was likely to adversely affect lower income people as well as country people. I won't comment further until I have actually read it.

The Stern Hu case continued to attract publicity in Australia during the week. The charges laid against Mr Hu and his fellow co-workers from Rio Tinto's Shanghai office have been softened, but the story still runs and runs at Australian level.

Over time, the Australian Government has tried to press for more information. Trade Minister Crean's view that the case will not hurt Australia-China trade may be correct, but the case has caused shifts in views about China within Australia.

One interesting side-effect of this in combination with the problems faced by Indian students in Australia is an increase in interest in India as compared to China. As a number of visiting senior Indians have reminded Australia, India and Australia share a common base in law. India's profile in Australia has always suffered in comparison to the Australian sometimes love affair with China.

At local level, Australian Government Treasurer's have been meeting about the carve up of GST tax revenues. NSW Treasurer Eric Roozendaal's turn of phrase in borrowing from George Bush and describing WA and Queensland as the axis of evil attracted attention. A member of the axis of evil responded tartly by calling NSW the rust-bucket economy, suggesting that the growth states were now carrying NSW.

All good clean fun. However, it is hard to conceal the fact that the relative decline in NSW's position continues. At the moment, the only growth sector in the NSW economy is coal development in Northern NSW.  

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