Date

June 28, 2013 – 11:39PM

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Kevin Rudd’s return to the Labor leadership has dramatically reversed a poll slide in the party’s heartland seats, suggesting the severe election losses feared under Julia Gillard’s leadership can be avoided.

A new poll reviving Labor hopes came as Mr Rudd stepped up his attack on Opposition Leader Tony Abbott’s “stop the boats” policy, warning it risked sparking conflict with Indonesia.

Mr Rudd also warned that a Coalition government could plunge Australia into recession if it adopted the harsh spending cuts he believes the opposition is planning.

He also signalled significant policy changes, including the possible dumping of the carbon tax in favour of a lower floating carbon price and a two-week extension of the negotiation period of the education funding package, and softened his language on a big Australia in favour of a sustainable Australia.

A Fairfax ReachTEL poll conducted on Thursday found a turnaround of about 10 per cent for Labor in four key seats – Melbourne’s Maribyrnong and Chisholm and Sydney’s McMahon and Blaxland – since Mr Rudd regained the top job.

The poll showed that Workplace Relations Minister Bill Shorten had climbed back to an 8.6per cent two-party preferred lead in his electorate of Maribyrnong in Melbourne’s west. Mr Shorten controversially shifted his support from Ms Gillard to Mr Rudd at the last minute in the leadership showdown.

In Chisholm, Speaker Anna Burke was ahead 55.2 to 44.8.

The poll suggested the leadership change has impressed enough Labor heartland voters in western Sydney to save key Rudd backer and new Treasurer Chris Bowen and rising star Jason Clare, the Home Affairs Minister who holds Paul Keating’s old seat of Blaxland.

The poll of the four seats contains some wider warning signals for Tony Abbott. In each case he trailed Mr Rudd on the question of who would make the better prime minister.

In an interview later with Fairfax Media, Mr Rudd outlined his thinking on the election timing, saying he wanted time to make changes to several key policy areas, including the education package previously known as Gonski, as well as possible changes to the carbon fixed price, the mining tax, and others.

The comments indicated he may be prepared to wait longer than Ms Gillard’s poll date of September 14 before going to voters.

Issuing a clear signal that he has learnt from previous errors when he was criticised as a “control freak”, Mr Rudd stressed that decisions would be made through an orderly and consultative process.

“I want to the see some new policy settings in a number of areas before we face the people and that it’s got to be thoroughly developed, thoroughly costed so that it’s real and notjust a press release,” he said.

On border protection, he accused Mr Abbott of “choosing to be ignorant of the facts, choosing to be ignorant of what the intelligence services are telling us … and instead, simply trying to slide through on the basis of slogans and fear-mongering and a headline”.

But he did acknowledge that the rate of irregular maritime arrivals was straining public patience and hurting the Labor Party.

“Our challenge has been always to keep this at manageable levels,” he said.

“I’m worried that there is more disquiet in the community because of this challenge. It’s important, but I’ll be fighting this election first and foremost on the economy, jobs, standard of living and of course national security is another priority.”

In other comments, Mr Rudd:

•Said he would fight the election on the economy, and job security, and working conditions, challenging Mr Abbott to a National Press Club debate on debt and deficit in the next fortnight.

•Defended his role as “Kevin 747” during his first stint as prime minister but flagged doing less international travel in favour of “video-conferencing” in some instances.

•Softened his previous language on a goal of a “big Australia” in favour of “a sustainable Australia”.

“I believe in a sustainable Australia,” Mr Rudd  said. “If you’ve got the sustainability settings right, on land use, on water useand on infrastructure provision, then of course the country can grow, so I believe in a sustainable Australia.”

By Sam Dupont, Researcher, Ocean Acidification Infrastructure Facility co-ordinator at University of Gothenburg, SwedenAs a scientist working on the impact of climate change on marine ecosystems, one of my duties is to communicate my work. My main goal is to convince students, citizens, economists and politicians that we need to take urgent action to reduce our carbon dioxide emissions. This is not an easy task and I often face very difficult questions. Are we really warming the planet? Is there really a link to our carbon dioxide emissions?

I am not a climate scientist and I do not have the expertise to judge the quality of the science behind global warming. But while I’m not a chemist either, I can understand that if carbon dioxide (CO₂) is dissolved in water (H₂O), it turns into carbonic acid (H₂CO₃). This is such a simple relationship that there is no place for controversy.

 

The amount of carbon dioxide released into the atmosphere by human activities is so large that it is changing the whole ocean. Every year, humans are releasing nine petagrams (10¹⁵⁾ of carbon in the atmosphere and a quarter of these nine billion tons are absorbed by the ocean. This carbon dioxide turns into carbonic acid which makes the ocean more acidic, a phenomenon known as ocean acidification.

Since the beginning of the industrial revolution, the average surface ocean acidity has increased by 30% and it is predicted that acidity may double again by the end of this century.

This is not without consequences for marine species and ecosystems. Many laboratories around the world have demonstrated that if we do not drastically cut carbon dioxide emissions, many species and ecosystems potentially face extinction within decades. For example, the brittlestar Ophiothrix fragilis – a close relative to starfish – is a key species on the west coast of Europe. It is not unusual to find hundreds of individuals per square metre and these beds of brittlestars constitute a habitat for dozens of other species. When we raised Ophiothrix larvae in ocean conditions that could be expected within a few decades, we found they were unable to develop normally and all died within a few days. Perhaps you may not care if this brittlestar goes extinct – but if it does it will have a huge impact on the many species associated with it, including fish.

Ocean acidification is not something that will happen in a distant future. We can monitor chemical changes and the first biological signs are already visible today – some massive oyster declines on the west coast of the USA have been attributed to ocean acidification, as has large-scale bleaching of coral.

Of course many uncertainties remain. More information is needed if we want to fully understand the impact of ocean acidification on the oceans, as advocated in a piece that we published in the scientific journal Nature today. Today, we know that to capture the potential impacts of ocean acidification on marine ecosystems, we need to perform longer term experiments, and expand from studying single species to whole ecosystems to capture the environment’s complexity. Ocean acidification is happening together with other global changes such as warming, deoxygenation and freshning (de-salination from mixing with fresh glacial meltwater). On top of this, you have local pressures on ecosystems, such as pollution or over-fishing.

However, uncertainty is not an excuse for inaction. We do know enough to claim that ocean acidification may lead to major changes in marine ecosystems, including reduction in biodiversity and impacts on seafood and other ecosystem services.

So what can we do? The obvious answer is that we need to reduce our carbon dioxide emissions. There is no other serious alternative at the moment. We know that this may be a long and difficult process, so we need to buy some time.

This can be achieved in various ways. We can reduce other pressures such as pollution or over-fishing on a marine ecosystem suffering acidification so as to improve its ability to help itself, increasing its resilience to other factors. We can also make use of the oceans’ diversity to select some strains of important species, for example those important to food fisheries, that are more tolerant of environmental changes. Some species of oysters, for example, have been shown to be less sensitive to ocean acidification than others .

Ocean acidification is chemistry, not conjecture – it is as real as water making you wet. It is one of the major threats on the marine realm, and it is essential to act now and reduce carbon dioxide emissions if we are to keep a diverse and productive ocean.

Disclosure StatementSam Dupont receives funding from Swedish Research Councils.

The Conversation is funded by the following universities: Aberdeen, Birmingham, Bristol, Cardiff, City, Glasgow Caledonian, Liverpool, Open, Salford, Sheffield, Surrey, UCL and Warwick.It also receives funding from: Hefce, Hefcw, SFC, RCUK, The Nuffield Foundation and The Wellcome TrustSam Dupont, The Conversation, 26 June 2013. Article.

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By business editor Peter Ryan

Audio: Any carbon price change difficult (AM)

Date

June 28, 2013 – 1:18PM

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Australia has been called many things: Oz, the land Down Under, the lucky country. But the equivalent of a collateralised-debt obligation?

Canberra can’t be happy to hear its AAA-rated economy likened to one of the reviled investment vehicles that blew up amid the 2008 global crisis. Yet the comparison is being made by some economists, who see the asset underlying Australia – demand from China – beginning to evaporate.

Australia is a microcosm of what awaits the world. How officials respond will offer clues to policy makers everywhere.

No country is more vulnerable to the much-dreaded slowdown in China than resource-rich Australia. The mining boom that fuelled nearly all of its recent growth is nearing a cliff of economic risk.

“Australia is a leveraged time bomb waiting to blow,” says Albert Edwards, Societe Generale’s London-based global strategist. “It is not just a CDO, but a CDO squared. All we have in Australia is, at its simplest, a credit bubble built upon a commodity boom dependent for its sustenance on an even greater credit bubble in China.”

There’s a bit of hyperbole in this view. But highly-advanced Australia is about to pay the price for growing so addicted to a developing nation. Exporting natural resources led to the neglect and atrophying of other critical sectors.

It’s created a two-speed economy: Commodities-rich Western Australia and Queensland raced ahead on China’s once insatiable demand for metals, while the rest of the country lagged behind. Now, even as mining giants BHP Billiton and Rio Tinto continue to ramp up production, the price for Western Australia’s iron ore has fallen to $US115 per tonne – a far cry from the $US180 paid by Chinese steel mills when the Australian dollar was touching highs of $US1.10.

Petty politics

Now that the easy China-driven growth is drying up, how are officials in Canberra responding? With a maudlin and distracting political soap opera.

On Wednesday, Labor ousted the unpopular Julia Gillard as prime minister in favour of her predecessor Kevin Rudd. Treasurer Wayne Swan, frenemies with Rudd, quit. The ill-timed game of musical chairs has Australians and outside observers wondering what these last three years were about. Rudd’s comeback probably won’t stop opposition leader Tony Abbott from winning an election scheduled for September.

Personalities aren’t Australia’s problem; policies are. Whoever is in power needs to focus intensely on increasing investments in infrastructure, education and training. They need to revamp a high-tax system that encourages all too many of the workforce’s best, brightest and most productive people to seek opportunities abroad.

Officials in Canberra must think creatively about spreading the benefits of the vast wealth being amassed by mining companies. Rudd lost his post three years ago in part because of his proposed “super tax” on their profits; Abbott might well want to revive the idea.

Australia matters because it’s in the vanguard of nations, rich and poor, who are grappling with how to adjust to a slowing China. As Chinese officials act to restrain runaway credit growth and rebalance the economy away from overinvestment and exports, China’s growth is likely to be closer to 5 percent than 10 percent. This year’s 28 percent tumble in iron ore prices since February is a harbinger of pain to come. So is the 11 percent drop in the Australian dollar this quarter alone.

The shockwaves caused by even modest attempts by China’s central bank to clamp down on credit show how profoundly this downshift will affect the globe. It will result in slower growth from Japan to Brazil and slam industries like autos, chemicals, heavy manufacturing, energy and steel. If China needs to dump some of its $US1.3 trillion of US Treasuries to bail out state-owned banks, markets everywhere will quake.

Australia is a microcosm of what awaits the world. How officials respond will offer clues to policy makers everywhere.

Reform path

The key for Australia is to return to the liberalising instincts of the 1980s and 1990s, when there was no behemoth gobbling up resources at record prices.

Opportunities for transitioning back to a non-mining economy abound. Boosting funding for research and development will create high-paying jobs in technology, science and education. Australia boasts great exporting potential in agriculture, medical supplies and high-end machinery.

But progress in any of these sectors will require a level of political will and forward thinking that’s been lacking for nearly 20 years.

“Our worry is that tourism, manufacturing and other trade-exposed sectors haven’t been investing for years now, having been brow-beaten by the unrelenting strength of the currency and the diversion of resources into the mining sector,” says Ray Attrill, a currency strategist at National Australia Bank in Sydney. “So it’s not obvious these sectors are in a position to quickly plug the hole from which the hissing sound of a deflating commodity bubble is emanating.”

There will be a premium on policy flexibility. Nimbleness is everything. That means taking an even bigger step away from the budget surpluses of the last decade and increasing fiscal stimulus. For Reserve Bank governor Glenn Stevens, it means adopting a less-dogmatic attitude toward inflation trends. A Chinese swoon, after all, will be a deflationary event globally.

Australia should indeed sell all the underground treasures it can to fast-growing developing nations. But in the long run, it’s more important for the country to cultivate what’s above ground. Australia’s future lies in ideas, innovation