The End

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For now, I leave you with a parting gift:

Crikey: Day 9

A special thanks to Spoose for her fine contribution to this article. A stand up gal, and an sensational single parent!

It ran fourth in the daily email kids - which is French for nice one!

4. 'Race to the bottom': why our poorest pay the most tax

Crikey intern Jane Vashti Ryan writes:

Australia’s poorest pay the highest effective marginal tax rates, leading to long-term work disincentives for welfare recipients, according to a brief released by The Australia Institute this week. The document, Removing poverty traps in the tax-transfer system, will be submitted to the federal government in the lead-up to a new tax summit to be held by mid-2011, revisiting the Henry Tax Review. The review highlighted the anomaly, as did the incoming government brief ("red book") handed to finance minister Penny Wong when she assumed the portfolio after the election. According the brief, there’s a whacking great list of benefits that taper simultaneously when someone receiving benefits re-enters the workforce. This can lead to an effective tax rate of up to 100% for some, which translates to absolutely no financial benefit in re-entering the workforce. Welfare Rights Centre director Maree O’Halloran says the system is stacked against low-income families in particular. "In the worst cases, an individual can face five different payments all tapering at once: Family Tax Benefit A, Family Tax Benefit B, Youth Allowance, Child Care Benefit, Public Housing. It’s like a house of cards, with the deck stacked against low-income families, unemployed people and secondary earners, usually women working casually," she told Crikey. A senior policy adviser at the Australian Council of Social Services, Peter Davidson, says if the structure tax system was changed, it would encourage more people on benefits to work: "The structure should be changed and extra work related expenses should be reduced. Income tests for Newstart Allowance should be reduced, and that overlapping of tapers should be removed." Single parent Susan Brown recently re-entered the workforce, and says she could never have afforded to work before her two girls reached school age. "I used to get $630 a fortnight now I get about $300 on top of which I have to pay for child care. If the girls weren’t in school, childcare would cost about $120 a day," she said. One of the most prominent poverty traps shown in the brief is that faced by public housing tenants, whose rent increases incrementally with their income. But O’Halloran says the disincentive to work starts long before welfare recipients actually take up tenancy. "The workforce disincentives embedded in our public housing policies require urgent attention. If you’ve been on a waiting list for public housing for years you become very fearful about jeopardising your place in the long queue," she said. And policy manager at the Community Housing Federation of Australia Eddy Bourke told Crikey the problem is compounded by a chronic shortage of accommodation: "There’s a race to the bottom, when the state is only able to allocate housing to the very most vulnerable people in the community. People just won’t work if they think their chances of getting a place will be affected." Catholic Social Services CEO Frank Quinlan says the problems created by the complicated tax-transfer system are not new, but that the report certainly highlights the stark disparity in effective tax rates faced by people on low incomes. This figure, first published in the Henry Review, shows the level of tax paid by welfare recipients as they enter the workforce. It’s based on the yearly private income of single income couple with two children. Source: Treasury, Australia’s future tax syxtem consultation paper, Chart 4.5, p.94 This graph shows the effective tax rate for a family earning $30,000-$40,000 per year is over 90% when tapering benefits and income tax are accounted for. This compares with the 35% paid by a family earning $70,000 per year. In response to the figures, the brief states: "It is relevant to ask why such an arbitrary pattern of effective marginal tax rates in the welfare system is tolerated when it is surely within the wit of policy makers to design system that claws back welfare entitlements and extracts tax in a smooth and consistent manner." The brief echoes changes to the interaction between the tax system and the welfare system called for by Treasury. Quinlan says while basic human dignity is being called for, there is also an economic imperative at stake. "Purely from an economic point of view it makes sense to improve the standard of living for Australia’s poorest people, and help them into the workforce, rather than deterring them from entering it," he said. But you could have read it first here...

Crikey: Day 7

Jane Vashti Ryan gets a scoop!

4. Our black health gap: less spent on primary aboriginal health

Crikey intern Jane Vashti Ryan writes:

Spending on primary health care for indigenous Australians is significantly less per person than for the rest of the population, despite an 11-year gap in life expectancy. The Australian Medical Association says the new data shows mainstream primary health services are failing indigenous Australians, with services not delivering adequate care or value for money. The Australian Institute of Health and Welfare report, commissioned by the federal government and released last Friday, shows primary health care spending for indigenous Australians is $327 per person in 2006-07 (the latest figures available), compared with $563 for non-indigenous Australians. It also shows spending on hospital care for indigenous Australians being treated for preventable diseases such as kidney and heart disease is as much as seven times higher that of non-indigenous Australians. AMA president Dr Andrew Pesce says the figures don’t come as a surprise. He told Crikey: "You would think there is equal access to these services for everybody and theoretically there is. But because of the lack of early access and health literacy in indigenous communities, you only see intervention when there is a crisis. "There’s a gap in service delivery that needs to be closed in order to close the gap in life expectancy between indigenous and non indigenous people that currently stands at about 11 years." And the problem isn’t specific to remote communities. Dr Steve Hambleton, the AMA's Queensland-based vice president, says 75% of indigenous Australians live in regional and metro areas, yet they are failing to access primary health care services. Recently speaking to an urban GP, Hambleton said the GP super clinic planned for that area should be an Aboriginal medical service. The GP said there are no Aboriginal people there, therefore it would be unnecessary. “There are 4500 indigenous people living in that area, they just don’t go to the doctor," Dr Hambleton said. "For too long this issue has been under the carpet, but it’s out there, it’s obvious and we need to do something about it." A spokesperson for the Department of Health and Ageing says the numbers reflect the policy of the previous government, and that Labor has put in place new policies to target these problems: "New funding arrangements under the Indigenous Chronic Disease Package provides substantial additional funding to the Aboriginal Community Controlled Health and mainstream health sectors." The spokesperson also said non-admitted hospital health care for indigenous Australians was 2.2 times higher than non-indigenous people, suggesting not all primary health care delivery is included in the new numbers (read the complete departmental response to Crikey here). But policy manager at the Aboriginal Medical Service Alliance NT, Chips Mackinolty, says the most worrying figures show the level of spending for end-stage kidney disease. "The most startling figures are on renal disease where it’s absolutely clear that the greatest cost is in end-stage renal dialysis; 45% of total hospital spending for indigenous Australians goes to renal disease each year, usually dialysis," he told Crikey. Mackinolty said kidney disease is one of the most expensive conditions to treat in its end stages: "Dialysis and transplants go off the charts in terms of cost. The most cost-effective thing to do would be to put money in primary health care instead of hospitals." But mainstream primary health care services are failing to deliver the right care, according to Dr Hambleton: "Mainstream general practices are pretty scary places for many Aborigines, but when you see an Aboriginal person at the desk, that discomfort is alleviated. Every GP can improve the way they interact with indigenous clients, but the biggest bang for buck will come from community-controlled organisations." More Aboriginal community-controlled health services are on the agenda for medical groups, but the problem won’t be fixed with health service improvements alone, says Mackinolty. “Improvements in primary health care will only improve these numbers by about 30%. The other 70% comes down to social determinants of health -- things like employment, housing and education,” he said.

Crikey: Day 6

Today sees a new player on the scene of the Murray Darling Basin debate... An irrigation consultant who says half the water used for irrigation in Australia is going down the gurgler...

10. Farmers will survive, with more than a pinch of salt

Crikey intern Jane Vashti Ryan writes:

Could changing irrigation methods in Australia save water, the agricultural sector and ultimately the Murray Darling Basin? “It can go a bloody long way towards it,” irrigation consultant Jeremy Cape told Crikey today. Only 30% of irrigators actually use an objective scheduling method to find out when to apply water. What does that mean? According to Cape, it means that while the debate rages over sustainable cuts to irrigation entitlements for farmers on the Murray Darling Basin, only about half of the irrigated water in Australia is used by Australia’s agricultural plants. The rest is down the gurgler. The alternative on offer is a standardised, water-efficient drip irrigation system, which allows the farmer to measure, within 5%, the amount of water being used. While the loss of water through wastage is contributing to the overall ill-health of the river system, it’s also causing massive hikes in salinity which isn’t just bad for the river system, and has serious repercussions for irrigators and dry-land farmers as well. Wentworth Group environmental engineer Tim Stubbs says water that drains below the root zone and into underground water tables draws the water -- and a lot of salt -- to the surface. "Australia’s landscape has a lot of salt in it. Because of damming and catchments we’re not getting flood planes and carbon moving, and we’re then getting massive build-ups of salt levels which makes the water salty," he explained. “Up in Queensland around the Burdekin catchment they’ve been irrigating for 20 years now, and they’re really starting to see the effects of salinity. Sugar cane production levels are dropping." Cane, who has worked in the irrigation sector for over 20 years, reckons the proposed water entitlement cuts could be easily met by farmers, and salinity levels could be much better managed if more efficient methods of irrigation were supported by the government. “In 1990 we had about 40 people employed in water usage efficiency by the NSW Department Agriculture. Now there are less than five. The support for extension staff who are working to support irrigators has virtually disappeared in the public sector,” he said. “There used to be a rural Water Use Efficiency in Queensland and this program no longer exists. It is possible to change methods of irrigation, meet those targets and maintain the health of the agriculture sector all at the same time.” Sean Hoobin is the fresh water policy manager from the World Wildlife Fund and agrees the cuts proposed must be met if the process is going to carry any real environmental weight. "There’s been a range of cuts recommended, and the ones being looked at by the government aren’t going to do the job. If we're going to do this we may as well do it properly," he said.

Crikey week two:

Bring it on.

That's false bravado by the way, although I do wear a red helmet most places...

Crikey: Day 5 Part II

20. Wine producers rue our dollar, and will students stay away?

Crikey intern Jane Vashti Ryan writes:

As Australian Institute of Export director Peter Mace put it: "It’s not bloody good." The Australian dollar peaked at 99.2 US cents overnight, the highest it has been since the dollar was floated in 1983. And while Australian travellers are cheering, exporters and educators are bracing for significant fallout. Mace says the wine industry, the education sector and the manufacturing sector will all suffer if this hike is here to stay. "The Australian wine industry has little room to move on pricing with competition now coming from South America and South Africa, and manufacturing will suffer too. We’re a high-cost production country." But the real doozie, according to Mace, will be the fallout for the education sector, one of Australia’s biggest export industries: "With the rising dollar, foreign students have to make the call on whether to come to Australia or look else where." International student housing group International House director Elissa Jans is worried about the ramifications. "Last time the dollar peaked, we had feedback from overseas clients saying the rising value of the dollar really was a serious deterrent," she said. "Students are looking for a bargain when they come and study. Normally they look at the UK or the US but they come here because it’s cheap. When the dollar rises this high they might as well stay at home." Chief economist at the Export Finance and Insurance Corporation Roger Donnelly agrees certain industries will be adversely affected, but points out that rising currency value is a response to a potentially overheating economy. "It’s a safety valve for inflation and the RBA would have to be taking sterner action if we had inflation," he said. The dollar has been boosted by strong unemployment figures and a weakening American dollar, but the threat of an international currency war looms large with fears that major economies are engaging in a "race to the bottom" in a bid to boost export growth. But you could have read it here first...

Crikey: Day 5

The Murray Darling Basin Plan will be released today. After covering the issue for yesterday's edition of Crikey, I wrote a post for Crikey environmental blog Rooted, covering the history, background and players involved in the battle for water.

The raging Murray-Darling debate: an overview

Crikey intern Jane Vashti Ryan writes: The debate over how to allocate water from the Murray Darling Basin is raging once again.

The official Murray Darling Basin Plan is due to be released this afternoon and if you sit quietly and listen, you’ll hear environmentalists and farmers battling it out in Canberra, and on the banks of that vital river system.

Details of the plan were leaked yesterday, pointing to a big reduction in water entitlements for farmers, a fact which has drawn the ire of regional Australia in a spectacular fashion.

But what are the facts around these proposals? Is it a case of environmentalists making unrealistic demands at the expense of Australia’s all-important agricultural industry or are farmers just struggling to grasp the realities (and the environmental fall-out) of a century of irrigation?

Before the consultation process begins, here’s a quick overview of the facts, figures and key players in the war being waged for the Murray Darling Basin.

The Background

The Murray Darling Basin sits across four states — Queensland, New South Wales, Victoria and South Australia. It covers 14% of Australia — over a million square kilometres — generates $9 billion per year for the Australian economy and feeds 20 million people.

So that’s the good bit.

But in the last 100 years irrigation of the Murray Darling Basin has increased by 500%, which isn’t proving to be the most sustainable of methods. A combination of agricultural planting and irrigation has led to increased salinity, soil erosion, wide-spread blue-green algae blooms and reduced numbers in native wildlife.

The Players

The government:

When the Water Act 2007 came along, so did the Murray Darling Basin Authority (MDBA), which plays a central role in this story. The MDBA was given:

“…the functions and powers, including enforcement powers, needed to ensure that Basin water resources are managed in an integrated and sustainable way. The MDBA will oversee water planning considering the Basin as a whole, rather than state by state, for the first time.”

The primary task given to the MDBA was to create a Murray Darling Basin Plan, a plan that would unite pragmatism, good sense, scientific nous and a listening ear, in order to work out a solution to the problems facing the Basin and the farmers living off it.

Leaked details of the plan suggest the government will be calling for a reduction in irrigation of up to 37%. And not everyone is happy.

Farmers:

The Australian Farmers Federation (AFF) came out swinging in response to the leaked figures yesterday. CEO Ben Fargher told Crikey:

“We want to make sure that the numbers are a draft and that the consultation process is genuine because there’s absolutely no way these numbers can be final.”

And AFF President David Crombie said in a statement yesterday:

“Neither the MDBA nor the federal government has articulated a clear vision for the Basin – specifically, the social, economic and environmental outcomes the Basin Plan is seeking to achieve.

“For farmers, the Basin Plan isn’t an ‘agriculture versus the environment’ debate. It requires balanced considerations – between farm production, environmental needs and local community impacts.”

Cotton farmer Michael Eagan has also weighed in on the debate. His family has farmed the land around Warren in NSW since the early 1800s and he relies heavily on irrigation to turn a profit.

“It all comes down to stranded assets. If we can’t utilise the land we’ve developed for irrigation we’ll lose out,” he said.

“The direct human cost of reducing irrigation on farms is about one man for every thousand mega liters. Then there’s the multiplied effect of what isn’t produced – work in packing sheds and cotton gins.”

Environmentalists:

The Australian Conservation Foundation’s healthy rivers campaigner Dr Arlene Harriss-Buchan reckons reducing irrigation levels is the best way to restore balance. She told Crikey:

“In less than a century, water extraction from the Basin’s rivers has increased by 500 per cent. This is unsustainable and is driving an ecological crisis.”

The AFC are looking forward to a robust debate and extensive community consultations.

Pollies:

Minister for Water Tony Burke:

“…it is not a final plan, it’s a guide to a draft of the plan…”

Shadow Minister for Water Barnaby Joyce:

“Well, you won’t have an irrigation community if some of these numbers that are being bandied around at the moment go forward.”

Greens spokesperson on the Murray Darling Basin Senator Sarah Hanson-Young

“We’ve known for years that the system has been over-allocated, now it’s time to get the balance right.”

 But you could have read it here first...