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Editorial - Policy on the run?

THE high-profile dumping of the Maud’s Landing proposal near Coral Bay may have been politically expedient but it leaves the Gallop Government looking extremely weak when it comes to policy.

Whether or not you agree that the Save Ningaloo campaign was partially funded by people with their own interests in the region, it was a successful lobbying effort which definitely attracted the attention of the important Perth voters – just notice the car bumper stickers.

But the anti-development win does nothing to solve the huge problems at Coral Bay or the potential problems at other points along the coast.

In addition, it really does jeopardise future development anywhere if investors, foreign or local, can see such a result after more than a decade of procrastination on this issue.

If, as has been suggested by many in the past few weeks, that “saving” Ningaloo is just a sop to the environment lobby so the WA Government can give the go-ahead to the massive expansion of facilities on Barrow Island, then it may well be a good decision for the State.

However, it smacks of policy on the run.

The Gallop Government has been in power for more than two years and the Maud’s Landing concept has been about since the last time Labor was in power.

Just how did Labor get into government this time without a policy on this sensitive and long-running issue?

More importantly, where does the Ningaloo decision fit into Labor’s coastal development plan, and why wasn’t this decision exercised within that framework?

It seems to me that this sort of policy making, designed for TV impact, deals with symptoms rather than causes.

Maud’s Landing was someone’s answer to the pressing issue of infrastructure development at Coral Bay.

It may not have been the right answer but several State governments, both Liberal and Labor, have had plenty of time to come to that conclusion long before now – and come up with something better.

Instead, we now just have a cause – with no answers – unless we look behind the environmental campaign at some of the people who have apparently funded this cause.

Confidence wanes on dollar

DESPITE being governed by a political party that prides itself on economic management, Australia has reached a real economic crossroads.

The big issue is interest rates, something which ostensibly lies with the Reserve Bank of Australia but which is really dictated by domestic policy and global concerns.

The RBA’s problem is which way to drive interest rates after deciding to hold off this month, despite predictions of a cut.

With the Aussie dollar heading north and business confidence slumping under the weight of stagnant international markets, there are plenty in the business sector calling for a rate cut to ease the pressure on the currency and business expenses.

To be fair, the Federal Government has stared down economic disaster before.

Painful restructuring prepared Australia for the Asian meltdown and we sailed through unscathed, perhaps only because we hadn’t had the massive gains to lose.

This time, though, our business sector has nothing more to give. It has trimmed the fat to the bone during the tough times, helpfully insulated in some respects by a low Australian dollar.

Now the dollar is rising without any structural gains or offshore market improvement to trade off against.

Most exporters will tell you that their markets have changed significantly, and mainly to their detriment, since the dollar was last at US70 cents, let alone US80 cents. They fear a rising dollar.

Hence business confidence is waning, according to surveys by the likes of the Australian Chamber of Commerce and Industry. Even BankWest was cautious with the positive results from its WA survey released this week, pointing to concerns about the dollar.

Ironically, one thing that can keep an economy fuelled during tough times is the housing construction sector, and the best way to do that is through a rate cut.

However, much silliness in the property sector has made a rate cut a dreadfully dangerous thing.

Even many in the property industry concede that a rate cut might just be bad for business, as the market deals with the overheated apartment sector  (mainly in the east, where overexcited promoters have anticipated a demographic shift to inner-city living) and a general explosion in property prices across the country (where 9 per cent per annum forecast growth in Melbourne and Adelaide is considered poor).

There are many problems in this field, where the Federal Government’s handout to young voters in the form of a first-home buyers’ grant has helped drive demand across the property spectrum and played its part in driving prices beyond the reach of a new generation of investors.

But touching the property issue is political dynamite, just ask Mark Latham.

So, at a time when lower interest rates would normally solve two big problems, by keeping exporters competitive and the local economy ticking over, they are being kept steady out of fear.

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