Clear Hayman vision for Australia
At the ADC Leadership forum in Hayman Island, Wayne Swan delivered a surprisingly comprehensive vision for the country.
At the 2012 Hayman Retreat, Alan Kohler and I were given vastly different views of the global environment. In some of the areas where I was concerned, such as Europe, I could actually see a way forward. (Alan Kohler will detail the players in a new scenario for Europe in Wednesday’s Eureka Report).
Meanwhile, there arose new threats to Australia that I really didn’t have on the radar. I want you to join me on this journey as we plot a very different course to the one that most people are expecting.
I want to start with our Treasurer, Wayne Swan.
During the last year or two, Wayne Swan has not endeared himself to the business community by defending an indefensible mining tax, claiming vast revenues from his replacement mining tax that were never there and giving mining entrepreneurs a kick.
All of this was good politics but it didn’t enhance his reputation as Treasurer.
But here at Hayman, speaking under Chatham House Rules, he showed a vision for our country. We will be part of the Asian growth story and he had a clear understanding of the various issues, particularly those in Europe, and that was backed up by some excellent submissions by Australian government officials (again under Chatham House rule) who showed that they were on top of the day-to-day events taking place around the world. It gave me confidence that if we have a global crisis, the people in charge of our economy will be able to handle it.
It is clear however, that our currency is being boosted by overseas central bank and sovereign fund buying because we are only one of two or three genuine triple-A rated countries. No one knows how far these funds will push our dollar but the authorities say any action against the buying will have repercussions that are worse than the dollar rise.
On the other side of politics, the coalition chose the Hayman Retreat to give the first detailed look at the sort of proposals they plan at the next election. The man responsible for the policy coordination, Shadow Finance Minister Andrew Robb, released the "Fight Back” plan back in 1993 some 18 months before the election. Paul Keating minced him.
Once again the proposals that will be put before Australian voters will have incredible detail but this time they will not be released until close to the election to avoid the "Fight Back” mistake. With the help of a Robb video interview, I will look tomorrow at the underlying Coalition policies as explained at Hayman. Be ready for some surprises.
And talking of surprises, many of you would have read the commentaries I have made with Alexander Liddington-Cox on the US gas scene. Apart from discussing BHP write downs, US gas is simply not on the Australian radar.
But it was certainly on the radar at Hayman.
It looks as though the United States is planning to export some 90 million tonnes of LNG. Much of it will go to Europe but a lot of it will find its way into Australian markets in Asia. A figure of 90 million tonnes is getting close to twice Australian exports after we’ve completed our Gladstone and North West shelf expansions. While it is early days, it looks like US costs will be much lower than Australian costs.
America believes it has enough gas to foster a resurgence in gas-based manufacturing and, over time, to drive its transport vehicles starting with trucks and buses and then extending to cars to substantially reduce its dependence on Middle Eastern oil. I will talk about the US scene on Wednesday. There are also gas shocks for Australia coming from Russia.
I had the absolute privilege of yarning on video with Russian delegate, Alexey Pushkov.
It is clear the Russians are concerned with Syria, particularly as on the Syrian government side were Russian, China and Iran, while the rebels are supported by the US and Saudi. But it doesn’t look as though anyone is going to win and this is a very nasty civil war with no way out. All the major powers can take some of the blame.
But the Syrian crisis is the backdrop to Iran and there was a message from both Russian and United States delegates in Hayman that there was a clear possibility of an Iran war. If that happens then the long-term repercussions for the globe will be severe and a whole raft of new dangers will emerge.
On the brighter side, the Chinese set out a new vision for China. It is a vision we have seen before but it is important to understand that fundamental changes are being proposed.
Next week I am going to talk about democracy going wrong in the US and present a new global way of looking at how we manage carbon. It’s the reverse of what is proposed by both the government and the coalition but at last somebody is talking sense.