We must encourage bold and innovative ideas if we are to rebuild our great Party. Robust and meaningful policy conversations need to be encouraged, not muted, at all levels of the Party if we are to move forward with a vision for NSW and Australia. The big, new and bold articles that follow are designed to stimulate discussion amongst Party members and beyond.
01>> GREEN GRID FOR AUSTRALIA
Brer Adams
Its time to give Australia a green grid argues Brer Adams, adviser to South Australian Labor and now a private sector specialist in renewable energy. When the media starts asking if a carbon price will increase the cost of a birthday cake you know the climate change debate needs reframing. Labor can win this debate by focusing on the electricity sector, which accounts for half of all human caused carbon emissions in Australia. The good news is that while climate change action has been stuck in the Parliament, the cost of large-scale clean energy technology keeps getting cheaper.
In just two years, the price to generate wind energy has fallen from about $140 a megawatt hour to as low as $90 a megawatt hour. While the cost of wind energy has fallen by more than a third and solar generation costs have fallen even faster, the price of coal based generation has gone up by 10 percent and will keep rising with international commodity prices. Australia is on the cusp of generating among the cheapest renewable energy in the world but achieving this will require connection of the most efficient wind and solar resources to the electricity grid. The solar region of Mt Isa in Queensland and the wind regions of the Eyre Peninsula in South Australia and the south-west of Victoria could be the clean energy corridors powering a lower carbon national grid. Locating energy generation where the resource is strongest delivers more electricity for the cost of the investment.
The benefits aren’t only economic. These sparsely populated but job hungry regions are far better locations for large wind-farms than built up coastal communities that happen to be close to the existing grid. This does not require more taxpayer grant programs. What is required is reform of the Australian Energy Market rules that manage the electricity grid system. In the past, coal-fired power plants were located near population centres. In the future, clean energy power plants need to be closest to the resource. For the best solar and wind resources that are often hundreds of kilometres away from our major cities. The grid was built over a century ago to support coal-powered generators. This legacy network has been a taxpayer subsidy to incumbent coal-fired generators. Even today, more and more money is poured into propping up that out dated network. Much of that investment would be better spent connecting wind and solar regions and upgrading interstate connections to create a truly national and competitive system.
The reform that is needed is laboriously technical: new rules that support extensions of the grid to regions of highly efficient renewable energy and gas generation. Connecting these regions does not need to increase overall cost. Instead hard-headed reform can focus grid investment to reduce the overall cost of energy. Investment in a clean energy grid can be offset by cheaper generation costs. Fortunately, when it comes to energy resources ours is a lucky country with the energy resources of the future: natural gas, uranium and limitless solar and wind resources. That we use little of this for our own needs will one day be seen as an historic oddity. Much of the world exploits inferior clean energy resources while Australia has so far failed to play to its natural advantage. Europe is looking to the solar drenched deserts of Africa and the UK is laying underwater cables deep in the Atlantic to connect vast off-shore wind-farms. Starting this transformation is more urgent than ever because the nation faces what Americans might describe as a Sputnik moment: when a nation realises its on the brink of losing a competitive edge to its rivals. Australia’s edge is cheap energy.
Since industrialisation, our economy’s stellar growth has been fuelled by fossil fuel energy generation that was among the cheapest in the world. But what was for so long a potent advantage is fast becoming a dead weight on our economy as the cost of carbon accelerates already rising commodity prices. By changing the grid investment rules, Australia could again boast an energy advantage with the cheapest renewable generation in the world. With this reform, Australia would be on track to meet at least 30 percent of our energy needs from renewable energy by 2030, the minimum needed according to the International Energy Agency.
Removing the transmission barrier will give energy entrepreneurs confidence to invest in Australia’s regions. Local energy companies like Pacific Hydro, which currently invests more in Chile than it does at home, will build the foundations of an efficient new energy base to meet the needs of a growing economy. Federal Labor kick-started energy market reform in the 1990s. By again using market-based reforms, this transformation can be achieved at lowest cost for consumers. A clean energy agenda can be the next chapter in Labor’s proud record of economic reform. Energy reform will upset vested interests, but what will Australia have to show from inaction? Less jobs in high-value manufacturing and rising power bills for a carbon addicted energy base that will eventually be redundant. The do nothing option actually does the most damage. Labor can put a price on carbon, expand renewable energy and build a truly national clean energy transmission grid.
02>> A NEW CITY FOR THE PILBARA
Paul Howes
The resources boom in Australia’s North-West means we need a big new city in the Pilbara argues Paul Howes, National Secretary of the Australian Workers’ Union. Australia needs a vibrant new city in the Pilbara- Kimberley region to provide the workforce and the services for an area which is fast become the powerhouse of our nation’s economy. Already around 8 percent of Australia’s wealth originates in Australia’s North West due largely to the $100 billion worth of minerals and petroleum sales which come out of this region every year. And these figures are set to grow exponentially. If we are going to maximize the value of the boom we should take this as an extraordinary opportunity to create a new environmentally sensitive, living, breathing, community in the region. The region’s reliance on a fly-in fly-out workforce is counter-productive and will give nothing to a region which is so important to Australia. Instead we should be developing a new city, roughly the same size of Cairns or Townsville.
If we are pro-active, and take up this opportunity, it can become the focus of a national policy debate looking seriously at our population. The North-West could become a new test-bed for how we grow new regional urban centres, well away from the capital cities on the south-east corner of this huge continent. A serious and open-minded discussion about population will involve key questions about the environmental, community and economic cases for allowing cities like Sydney and Melbourne and Brisbane to grow unabated. Anyone interested in the current political agenda knows that Australians living in the suburbs of our capital cities are, quite rightly, upset at what they see happening to their communities.
We see the capital cities grow but there is not enough infrastructure development to support this growth. The Australian Workers’ Union has always favoured decentralisation and the growth of regional Australia. It is in our DNA. The Union started off in the bush 125 years ago and even today most of our membership lives and works outside of the big metropolitan centres.
That’s why in recent months the AWU has campaigned hard for massive new infrastructure developments in the regions. Money from a proposed mine tax should be spent on building new, high-quality urban centres with schools, hospitals, affordable housing and other important facilities in our resource regions – on top of roads, rail and ports we need to make sure that we maintain a productive, competitive resource industry. Attractive new urban centres where families can settle knowing they have good secure jobs will ensure the long term commitments to community which we need if we are to decentralise Australia. These new centres should be seeded with quality local tertiary education centres to provide the R&D nuclei supporting the development of new regionally based, environmentally sensitive, export-oriented enterprises. There are models for this type of planned urban decentralisation and development in desert environments in Israel. Just as Israel has used our gum-trees to help the blooming of their deserts so we can learn from them in the development of new enterprise oriented urban centres.
Australia lost a major opportunity to move people out of Sydney and Melbourne when the Fraser government canned the Whitlam-era Albury-Wodonga and Orange-Bathurst regional development centres. Imagine how much better our urban environments would be if Malcolm had not – in a fit of pique in the ugly political environment of the Whitlam sacking – closed down the regional development plans. The lesson of that policy tragedy is that we need to build bipartisan support for a population policy which effectively shifts our urban growth from the south eastern seaboard. We should look to the advantage we currently have – thanks to the boom – in developing a major new urban centre in the Pilbara or the Kimberley region. This new centre should not just service the needs of the big growing resource sector but should also be outward looking. An export oriented centre in the North-West should support the creation of new industries, and quality services, looking to sell into Africa, the Middle East and the growing economies of India and China. This needs planning – and a long-term commitment to provide the infrastructure which will allow a modern environmentally sensitive city to set down roots on the edge of the desert. I do not think this should be the only new regional urban centre that Australia develops but we need to start somewhere. A region which produces so much of the wealth of Australia is a good place to start – a good place to develop over the horizon ideas about how we live in a carbon constrained future.
03>> PRIVATE CAPITAL TO FUND SOCIAL PROGRAMS
Cass Wilkinson
Private capital has flowed into infrastructure but its time to mobilise it for government social programs through social impact bonds argues Cass Wilkinson, an adviser to former Premier Kristina Keneally. Demographic, social and economic pressures are driving up demand for social services. Growth in health and community services has outstripped economic growth and inflation for some time. To address the drivers of growth – the underlying causes of social harm and social need must be addressed through early intervention.
Preventative health, early support for kids at risk, early detection of learning needs and behavioural challenges can all help prevent significant expenditure down the track. For example, if youth detention currently costs $500 per day times say an average of three months it costs $45,000 per child. To prevent this expenditure requires an early investment of between $5,000 and $20,000 per child on rehabilitation. Providing the program works, the government is then better off by $25,000 to $40,000. We know that there are programs that can prevent harm but many are expensive.
For instance, multisystemic therapy is a highly effective program for addressing juvenile offending but costs $15,000 per head. If the private sector meets this cost and the child reduces their offending, then in 12 to 24 months the state achieves significant savings, a portion of which pay back the investor. Using the example above you can see that both tax payers and investors can be significantly better off. But most importantly more kids can be enrolled in rehabilitation. In the UK the model is being trialled on a rehabilitation program at Peterborough Prison where 5,000 prisoners will have post release support for their rehabilitation. If that group of prisoners commit 20 percent less crime than an unsupported control group, the government, society and investors will all come out better off. The Peterborough financiers are a social venture capital firm called Social Finance which stands to make between 7 and 15 percent return providing this 20 percent improvement is delivered. That leaves the substantial value of financial gains with the public. In November 2010 NSW became the first Australian jurisdiction to commit to developing Social Impact Bonds.
The former Premier saw them as a way of bringing the best of all three sectors together to solve urgent social problems. Under her leadership $5 million was allocated within the Department of Aging Disability And Home Care to fund a first bond. Several more were announced as election commitments. Had Labor been re-elected, NSW would have been the second place in the world to introduce the model. Her conviction was confirmed by a Centre for Social Impact report released early this year which confirms strong interest from the community and private sector to trial the model in Australia. I am aware through my own work of several major not for profits and financiers who are now investigating opportunities for bonds.
There are plenty of social services that warrant scaling up to prevent future harm including intensive family support for parents at risk of having their children removed; homes for rough sleepers and community support for people with mental illness. Solving each of these challenges has a clear economic as well as a compelling moral cost benefit.
04>> FREE UP WATER LICENCING FOR ENVIRONMENTAL AND ECONOMIC BENEFIT
Nicholas Car
With skyrocketing international demand for basic food stuffs which Australia can produce efficiently and with less environmental impact than high-value crops, it is time to reconsider water licensing arrangements in Australia argues Nicholas Car, a former CSIRO water research engineer who now works in irrigation consulting. The ‘Arab Spring’ riots were triggered by hunger in Tunisia and China is about to start net food imports which will not stop in our lifetimes. With a rising global population needing to be fed and with other demands on cereal and fibre crops such as biofuel, it is a good time to be producing the basics like rice, wheat and cotton. Australia should reform its water markets to take advantage of global food demand while at the same time yielding a better result for the environment.
For the last 10 years, Australian crop agriculture has been in the doldrums with virtually no rice grown in southern NSW and grapes dying in South Australia. Now that we have water again, farmers are striving for bumper crops to erase debt. This cotton season is the largest, and probably will be the most lucrative, in Australia’s history while grape growers face very poor returns due to oversupply and poor growing conditions. With predictions of increased weather variability for Australia generally accepted by climate scientists at the CSIRO, we can expect this pattern of drought followed by plenty to continue. To do the right thing by our environment, we need to be able to grow crops when it’ is opportune – and hold off when it is not.
This is something that cotton and rice growers known and do well: in years of drought they sit patiently with minimal or no investment in crops waiting for the rains which, when arriving, the farmers can take advantage of by quickly planting large areas. For winegrape and fruit growers on the other hand, variability is a nightmare. You have to keep 10 year old vines alive with water every year even when there is no rain.
When there’s too much rain, fruit doesn’t mature, as is the case this year in South Australia. To choose to grow permanent crops that need water every year, such as grapevine or apple trees, or annual crops, such as rice or cotton, is as much a factor of government policy as it is environment or purchase prices. Indeed, separate water markets (High Security and General Security) exist in NSW to allow farmers with permanent plantings to get water as a priority, regardless of potential sales returns or even environmental outcomes!
The NSW government would do well to merge the two water markets. This would remove an institutional barrier farmers face when making choices about what to grow. In a highly variable environment and with strong international demand, basic food crops are the right ones to be growing in Australia. In 2009/2010, a farmer that I worked with in Griffith NSW, grew both winegrapes and rice. With record high grain prices and record low wine prices, he lost money on the supposedly high-value grapes and made it all back, plus extra, on the rice! This farmer is considering abandoning his grapes altogether – something that the Australian wine industry would welcome due to a massive grape glut – and to just grow rice.
One of the issues holding him back is that he has a High Security water license entitling him to a certain amount of ‘free’ water which has value above and beyond the licence he has for General Security water due to its greater priority in years of drought. A single pool of licenses, of equal allocation priority, would remove this disincentive to move to basic crops.
We should not have a government policy that effectively props up undesirable crops as this distorts the market and, in this case, is environmentally counter-productive. A single license pool would also simplify the water allocation task of state governments by removing a tier from their allocation stack. A single pool would also make inter-basin trading simpler by removing the need for two sets of rules. A move towards high-water using basic crops such as rice can be seen as counter intuitive in the arid Australian context but water scarcity is only sometimes a problem in Australia – just remember the widespread flooding earlier this year! We need to fit our industry into our country’s natural cycles better by using water when it is there and not planting at all when it is not. The recent high prices that basic crops are fetching, which are expected to continue indefinitely and the fact that Australian grapes are in massive oversupply now, shore up the economic arguments for change. When you see a reform that promises both better economic and environmental outcomes, you know it’s the right thing to do. This suggestion to merge the two water markets would be politically acceptable to implement and of great benefit not only to our environment and our economy but also to poor people overseas who cannot eat wine.
05>> TIME FOR A NATIONAL COM PENSATION SCHEME
John Della Bosca
John Della Bosca as former NSW Party Secretary (1990-1999), Minister in the State Labor Government (1999-2010) and a foundation Member of the Centre Unity group says it’s time for a National Compensation Scheme. Good ideas are more valuable to social democrats than good ideologies. Ideas solve problems; ideologies often obscure the solution. More than 30 years ago the Whitlam Government had many good ideas and more than one obscurantist ideologue.
One Whitlamite idea in particular would have solved the key problems for people living with disability in this country. Back then this good idea was called the National Compensation Scheme. Whitlam had given Sir Owen Woodhouse the responsibility of inquiring into the possibility of a social insurance approach to meeting the needs of the sick and disabled. The Woodhouse report recommended establishing a national, no fault, publicly funded compensation and rehabilitation scheme for all categories of injury no matter what the cause. The resulting Bill passed the lower house and was sitting in the Senate when Whitlam was dismissed. The Bill went the way of the Whitlam Government and the chance for reform was lost.
The right of Australians living with disability to the joy of an ordinary life has remained lost for the last 30 years. The sad truth is that people living with disability, their families and carers are amongst the most disadvantaged groups in the nation. People with a disability are less likely to complete their education, less likely be employed and more likely to be poor and dependent on income support. Projections show that over the next 70 years the growth in the group of people with a severe disability will be between two and three times population growth as a whole. At the same time, the number of people willing and able to provide unpaid care is expected to decline markedly.
NSW Labor has laid much of the groundwork for dramatic improvement with the Stronger Together packages dramatically improving disability services over the last six years and the creation of the Life Time Care scheme for the traumatically injured; these are just building blocks for the revolutionary change required. The solution is The National Disability Insurance Scheme (NDIS). It is “the good idea” for this political cycle – the Light on the Hill we need to demonstrate core Labor values are still relevant and very much a part of our identity as a Party. The NDIS was enthusiastically supported and endorsed at the Federal Labor government’s 2020 summit. Following the Summit the government referred the design, funding and implementation of an NDIS to the Productivity Commission.
The Productivity Commission has been conducting an inquiry into how to best support people with a disability and their families. The opening words of their recent interim report released on 28 February are “The disability support system overall is inequitable, fragmented and insufficient and gives people with disability little choice.” The scheme would provide assistance to all people with a disability no matter how their disability is acquired. It should not matter whether you are born with a disability, acquire one through a car accident or develop one through a serious illness. Everyone should be able to get what they need, when they need it, in order to lead a full productive, participatory life where they have the opportunity for the dignity of work taken for granted by most Australians.
The NDIS would provide funding for early intervention, essential care, support, therapy, aids and equipment, home modifications and training for people with a disability that has a significant impact on their daily life. The scheme would be person-centered and individualised – support would be based on the needs and choices of the person with a disability and their family. This is an area in desperate need of reform – too often the needs of people with a disability take a back seat to organisational needs. The system suits itself rather than people with a disability, their families and carers. We have a long way to go in this country before people with a disability are truly a part of the community. The complexity of the issues confronting people living with disability and their families and their long history of exclusion means change cannot be achieved overnight. But the NDIS is the place to start. Recommendations in a report are a long way from real tangible change.
The NDIS will only become a reality if our elected representatives demonstrate leadership and ordinary Australians stand up and say it’s time. It’s time people with a disability and their families got a fair go. To learn more about the NDIS and how you can become a supporter visit the Every Australian Counts campaign website – www.everyaustraliancounts.com.au
06>> ENSHRINE PARRAMATTA AS SYDNEY’S SECOND CBD
Chris Brown
To re-engage the community in its own heartland of Greater Western Sydney, Chris Brown, founder of Infrastructure Partnerships Australia, makes the case for Parramatta as Sydney’s second CBD. Even by conservative estimates, population growth in Sydney will see between 6-7 million residents living in the metropolitan area by 2050. Of this total, over four million people will live west of Homebush by the middle of this century. Unlike most major cities whereby the downtown area is located centrally, the Sydney CBD is near the far eastern edge of the metropolitan area. This downtown zone encompasses the majority of employment opportunity (especially high paying jobs) and a disproportionate share of its educational resources, cultural facilities and civic institutions. It is also serviced by a century-old radial transport network that assumes most trips are from the suburbs to Martin Place and do little to link other major urban centres within the metro area.
This means that Western Sydney residents are forced to travel between 25-70 kilometres (one way) to access many jobs, schools, universities, hospitals, theatres and stadia, which creates significant strain on the environment, budgets, infrastructure, services and families – and will only be exacerbated by population growth. Labor’s Metro Strategy and the Transport Blueprint both recognised the “city of cities” concept, whereby Parramatta, Penrith and Liverpool have a role to play in the development of Sydney, but stopped short of the necessity to formally enshrine Parramatta as a second CBD. This is an essential function to reconfigure Sydney’s transport system, its planning codes, services rollout and governance. It is 200 years since NSW Governor Lachlan Macquarie nominated Western Sydney as the answer to the colony’s growing pains and Parramatta as its civic capital. To mark the anniversary of the great builder of our city and State it would be appropriate to establish a group, in his name, to examine how best the public and private sector can respond to existing and future challenges, opportunities and realities of growth.
A “Macquarie Commission” could advise governments on policy settings to manage, govern and deliver sustainable growth in Greater Western Sydney. It must also review measures to attract private investment to property, infrastructure and employment initiatives. While it should be driven by the NSW government, the Commonwealth should be a major partner in this project. Federal Labor claims that it wants a bigger role in Australian cities, and this is a perfect vehicle by which to manifest this responsibility. Structurally, the Macquarie Commission should comprise five independent Commissioners who represent business, academia and the community, and be resourced by senior Federal, State and Local bureaucrats. The Commission should be given 18 months to review existing plans, consult with leading stakeholders and report back to both governments. Its impact could be significant in terms of long term planning, the prioritisation of economic and social infrastructure, the structure of local governance to encourage scale by way of Council amalgamations, the identification and generation of job opportunities, the reconfiguration of land use and planning regimes, the trial of widespread Transport Orientated Development schemes, and appropriate policy settings to address housing affordability, social equity and local amenity.
This is vital in terms of guiding massive investments in a possible second airport for Sydney, an Eastern Seaboard high speed rail, the appropriate route for the North West Rail line and the fate of the Parramatta-Epping line, the doubling of the University of Western Sydney and the successful and timely development of the North West and South West employment and residential land release. Greater Western Sydney, with Parramatta as its own CBD, is an economic and population powerhouse of Australia, on an inexorable growth path – dwarfing all cities other than Sydney and Melbourne. It demands commensurate attention.