Today’s passage of the stimulus package is Nick Xenophon’s biggest stunt yet.
The reason why he voted against the package yesterday, and voted for it today, lies in state-based environmental politics and his desire to outflank the Greens. And he’s pulled it off.
First the others. The Greens negotiated a pretty useful deal with the Government using $400m saved by shaving the $950 bonus payments by $50. It might have been small beer in the context of the tens of billions being chucked about, but Bob Brown had reason to be pleased with what he’d extracted from Wayne Swan and Julia Gillard. He’d got the Government to reverse the Howard Government’s lowering of the liquid assets test threshold for unemployment benefits, $200m worth of grants to community groups and councils for local employment, which would have picked up some of Steve Fielding’s proposal for a local jobs package, the now-famous bike paths funding, and a number of others. There’s media commentary that the Government doesn’t know how to negotiate with minor parties. Well, both Labor and the Greens did a professional job yesterday.
Steve Fielding supported the package without seeming to have extracted any concessions. He did so reluctantly — quite reluctantly — but on the basis that it was better than blocking it. Fielding attracts plenty of abuse — I should know, having written some of it — but he takes his role seriously, despite lacking the resources to do it properly, and gets stressed because of it. Yesterday he made a sensible call under a lot of pressure.
Xenophon, however, has more important things on his mind than preventing Australia from going into recession. It’s only a few days since Glenn Milne was claiming Xenophon would baulk at the package because he agreed with the Coalition on tax cuts, but Glenn, unusually, seems to have been astray in his analysis, because Xenophon refused his support because of the Murray-Darling Basin.
The Greens have owned the issue of the Murray-Darling for years. Western Australian Senator Rachel Siewert worked assiduously on water issues and the Murray-Darling, until last July, when South Australian Green Sarah Hanson-Young arrived in the Senate. Hanson-Young has championed the fate of the Lower Lakes and Coorong since then, churning out press releases and initiating inquiries. Yesterday, the Greens convinced the Government to provide funding for bioremediation of the Lower Murray, meaning revegetation and mulch are used to prevent soil acidification, rather than the preferred Rann-Wong option of letting in seawater.
Xenophon, who was elected at the same time as Hanson-Young, has also been pushing the Murray-Darling issue. As a State parliamentarian, Xenophon had little to say about the issue, but began pushing it vigorously on his ascension — if it can be called that — to the Senate. Now he seems determined to show that anything the Greens can do, he can do better. Yesterday he wanted to bring forward $7b of the Government’s MDB package. The idea was utterly unworkable. It would have added a further $7b to the 2009-10 deficit, and spending that amount of money would have been impossible in a single year, unless Xenophon also wanted compulsory acquisitions on a truly vast scale. Xenophon’s rationale for not supporting the package — that the MDB was critical to it — was also nonsensical. The entire Australian agriculture sector is worth 2-3% of GDP, meaning the MDB is worth fractions of fractions of GDP.
It would have added a further $7b to the 2009-10 deficit, and spending that amount of money would have been impossible in a single year, unless Xenophon also wanted compulsory acquisitions on a truly vast scale. Xenophon’s rationale for not supporting the package — that the MDB was critical to it — was also nonsensical. The entire Australian agriculture sector is worth 2-3% of GDP, meaning the MDB is worth fractions of fractions of GDP.
But Xenophon’s real agenda is to extract a decent sum of money from the Government, and enjoy the kudos of being the saviour of the Murray-Darling. Xenophon tipped his hand yesterday afternoon when he backed the Government’s motion that the Senate adjourn until 9am this morning, to give him time to see how many zeroes he could get out of the Government for water buybacks and irrigation infrastructure.
He’s ended up with $900m, which is more than twice what the Government was offering him yesterday. He’s now king of the Murray-Darling, the man who wrested nearly a billion dollars from the Government for his state and an ailing river system.
It’s been another Xenophon stunt — on a massive scale. But at least it might put a bomb under Penny Wong, whose reluctance to take vigorous action on the Murray-Darling remains deeply concerning.
And everyone will get their cheques.
I think that you are being very tough on Xenophon. He looked to me like a man under extreme pressure not one enjoying himself. He said at the outset of his Senate term that WATER was his priority and he has stuck to it. Good on him. The poor old Murray would not be in such a parlous state if the the Libs and Labs had not allowed it to be sucked dry.
Tom,
GST Revenue is approximately 40 billion a year….
http://www.budget.gov.au/2007-08/bp3/html/bp3_main-03.htm
For once I’m a bit confused about the criticism of my item. I wasn’t being particularly anti-X, more explaining his behaviour yesterday and today. I said last night in the Comments for one of yesterday’s items that he would work out a deal with the Government and claim credit for the MDB. That’s exactly what he’s done. I’ve also written at length – I’m sure some would say too great a length – on the problems of the MDB and the failure of the Federal and relevant state governments to deal seriously with its problems. The suggestion that somehow I’m dismissive of the crisis going on in the basis is wholly incorrect. However, that is a separate issue from how effective a stimulus package will be, and Xenophon clearly linked the stimulus package and its effectiveness with the need to pump money into the MDB – an unsustainable argument economically.
There also remain interesting issues about the extent to which the “bring-forward” of water buyback money will drive water prices up and mean the Commonwealth pays over the odds just to secure the vote of an independent.
Also, why was Bob Brown wearing a tie this week? Anyone?
“The entire Australian agricultural sector is worth 2-3% of GDP”… I suggest Bernard you try eating the other 97%…..”meaning the MDB is is worth fractions of a fraction of GDP”….yeah what hell, the MDB is only the largest river system on the driest inhabited continent …..maybe its time we had a hard look at how GDP is measured?…. Whatever the impact of the economic stimulus be it good, bad or indifferent at least some good will come out of the package….. Well done Nick Xenophon.
Community debate and discussion about the MDB,climate change and the environment can tend to focus on the abstract concepts without realising there are real people living and working in these regions. While these peoples views may be more conservative than their metropolitan cousins they do have a very high level of awareness and understanding of the issues.
However the one critical difference is their livelihoods are dependent on the ‘normal’ functioning of the MDB.
Without water either due to climatic or political reasons the business of the MDB can not function. Without water this region is having to confront the issue of having to take a massive write down in asset value and the consequeces of having to restructure their businesses,careers and the impact on families there upon..
What Nick is doing is forcing the Governments (State & Federal),Banks and the wider Australian Community to face this issue. It is real,it is painful,it is hard and it will not go away.
It may be unconventional economics but cash in the form of buy outs etc into these communities may be a positive way of confronting the ‘water’ crisis and at the same time the GFC.