The Murray-Darling:

Geoff Russell writes: Re. “Some things to bear in mind on the Murray-Darling Basin…” (yesterday, item 1). Cotton got four mentions in the Crikey yesterday with Cubbie close behind on three.  The biggest user of Murray Darling Basin water got no mention from Bernard but did get a nice little mention in Tips and Rumours. The Guide to the Basin wants to lower the use of water from 13,700 billion litres back to about 9,700 or so … this is about the level of 1995 extractions.

In the five years after 1995, the extraction climbed 2,700 billion litres … almost exactly the same amount that the Guide now wants to claw back. Who got that water? The dairy industry got 2,500 billion of it, sheep got 500 billion of it and cotton got 700 billion of it. The dairy industry got 1,700 billion, while cotton and rice got 700 and 500 million respectively.

So, after the dairy industry blew the river apart, with a little help from cotton, everybody else is now expected to pay the price. I get sick of seeing pictures of fruit trees in TV stories about water. The fruit industry in the MDB used just 1.5 percent of the water used by the dairy industry at its peak in 2000/1 (67 billion litres compared to 4,200 billion litres for dairy).

Jane Paterson writes: Climate Change is not going to go away nor is the lack of water. We all know that ! As it is a national, even global problem, surely we all have to take responsibility. Therefore, isn’t it time to bring back the much denigrated solution of TAX ?

I suggest a sort of across-the-board-Medicare  tax to tackle the issue. Whatever happens most of us are going to hurt in some way, but it would be better if we can prevent a few big winners taking everything from the many big losers. I can only be a tiny bit hopeful.


Gavin Greenoak writes: Re. “Why Beecher is wrong: Simons on the battle close to home” (Monday, item 18). A protest of the private enterprise (Crikey) finding itself in competition with a public one, knowing how dismissive the ABC would very likely be because it had not occurred to them that they were in breach of a principle which would not have publicly funded bodies in competition with private ones, for the very reason they are publicly funded to serve and not to exploit the private sector.

The principle and distinction is eroded perhaps beyond recovery, with a slow insidious slide of government bodies into corporatism, “cost recovery” and the like, rendering tax more and more like tribute than a transparent contract of services.

Beecher’s protest made me think of the words of Thomas Jefferson:

Mankind soon learn to make interested uses of every right and power which they possess, or may assume. The public money and public liberty … will soon be discovered to be sources of wealth and dominion to those who hold them; distinguished, too, by this tempting circumstance, that they are the instrument, as well as the object of acquisition.

With money we will get men, said Caesar, and with men we will get money. Nor should our assembly be deluded by the integrity of their own purposes, and conclude that these unlimited powers will never be abused, because themselves are not disposed to abuse them.

They should look forward to a time, and that not a distant one, when a corruption in this, as in the country from which we derive our origin, will have seized the heads of government, and be spread by them through the body of the people; when they will purchase the voices of the people, and make them pay the price.

(Notes on Virginia, 1784)

Housing prices:

Mick Peel writes: Re. “Housing shortage? Don’t dwell on it, there isn’t one” (yesterday, item 24). The Housing Industry Association (HIA) — the peak lobby group for residential housing turnover – recently warned that the country’s “housing shortage is set to get worse because not enough homes are being built to match demand.” How convenient for them… but the message is a bit wide of the mark.

They’d like us to believe that astronomically high residential property prices at present are simply a function of too much demand and too little supply. But, in fact, the price bubble in residential property is largely due to systemic factors like tax breaks (particularly negative gearing), which induce investors to buy property despite the prevailing market signals. You cannot have investors increasing their share of the market without squeezing out the first home buyers.

According to Tim Colebatch recently, in the 1980s, 85 per cent of finance to buy existing homes went to owner-occupiers and 15 per cent to investors. In the 2000s, investors’ share averaged 41 per cent. In Victoria, in May and June 2010, investors buying existing homes got 51 per cent of bank finance, and owner-occupiers 49 per cent. Current median prices are around 8-9 times average incomes. The average yield on property is less than 3 per cent (well below the 10 year bond rate and less than annual CPI). Added to this, the net present value (NPV) of costs for buying a property is far greater than the NPV of rental costs.

If there were rational expectations attached to the residential property market at present, there would be a fall in demand for housing tenure (especially investor tenure) and an increase in demand for rental accommodation… but, we are witnessing classic bubble behaviour instead — driven largely by the impact of negative gearing and investors bidding up prices.

AEC and the public service:

Barry Welch writes: Re. “Tips and rumours” (yesterday, item 7). Crikey published:

“During the recent election I worked at the local polling booth as a returning officer, as I have done for years. For the first time I have just received a letter from the AEC thanking me for my work, etc. And would you believe they have included a quote from Crikey, which I thought you might like to hear.”

Bernard Keane shouldn’t get too carried away with the AEC workers. I was an ALP booth captain in Dickson. The day prior to the election I was told that the entrance to the polling booth was via a long ramp (suitable for people with prams, the elderly and those in wheelchairs).

On election day we had outbuntinged the LNP at that entrance.  Minutes before the polls opened , after a discussion with the LNP workers, the AEC officer in charge announced that the entrance was to be a gate halfway along the fence with two steep flights of stairs.  The LNP were already setting up there before we were told of the decision.

When I approached the AEC officers with concerns about the disabled, I was told by the Information Officer after he had checked with his supervisor “This isn’t designated as a disabled booth. They (disabled people) can go elsewhere.” It seems that the AEC is like the curate’s egg-excellent in parts.

Denis Goodwin  writes: In response to the “Thanks polling workers, from Crikey” can I say as a long time public servant that the efficiency of the AEC in the recent election was in no small part due to the lack of out-sourcing and demonstrates the flexibility and accountability of public sector workers.


Robyn Deane writes: As the wife of a Vietnam Veteran, daughter of a World War 2 digger, I totally agree with Ignaz Amrein (yesterday, comments). If politicians sat down and really listened to our returned service personnel, they just might learn what it is really like. Then maybe Mr. Abbott wouldn’t have made such an inane and foolish request, to accompany our troops in a war zone, to gain some sort of point scoring as an action man.

Politicians too readily drape themselves in the flag and attempt to bask in the “glory” of war, however as one rare general, Dwight D Eisenhower who became a politician, said “There is no glory in battle worth the blood it costs.”

Peter Fray

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