Friday, November 08, 2002

Big shift in public policy

I have been thinking about the Howard cabinet considering water issues last Monday, and them backing a plan pushed by John Anderson, the Deputy Prime Minister, to pay irrigators compensation for the loss of water when state governments claw back water from farmers to help save our rivers. This plan/proposal, which is structured around water property rights designed to give irrigators security of access to water, is due to go to CoAG (Council of Australian Governments), at the end of November. State governments, especially NSW and Queensland, are not too keen on the idea and have serious reservations about paying compensation from their treasuries.

What is happening here? Simple. water is finally being taken seriously by Australian policy makers. If so what is the politics?

Well, the bloggers fave rave journo has some ideas. Margo Kingston in her webdiary piece, Election Watch, asks the question:

"It's strange that John Howard's federal libs fly high as what some still call leftie causes like environmental protection pack strong electoral punch in state and local elections. Both trends must make sense. What is the sense of them?"

She then bounces of an article in The Australian about water politics on 28 October 2002, called 'Our greenest Drought'. She says:

"According to the article, Howard will, in time, announce a "nation-building agenda" to repair the rivers and make water use more efficient. A Liberal source says the unthinkable: 'This time, the politicians are going to be relying on scientists. The bureaucracy is not qualified to do it.' Nor are talk show hosts, the source adds."

Get it? Howard is preparing to knock Labor over on what Labor once did better than anyone - nation build. The long-term vision thing. And unlike Labor, it is listening to the environmental scientists, and the extraordinary coalition of the National Farmers Federation and the Australian Conservation Foundation which worked for years to produce a farmer/greenie consensus on how to tackle river salinity. It looks like Labor has lost its chance to lead on something to unite and excite the nation - yet again.

The Greens have argued for years that water is the oil of the future while politicians of all persuasions have sold out our children for short-term cash. But now, the vision thing, the long-term planning the Greens are so notorious for, is becoming mainstream. All the work they've done amid all the insults they've endured could, one day, pay off for our nation."

I reckon Margo is right about Howard's nation-building heritage thing and that Howard will be able to use it to cut the green ground from under Labor's feet.
Ecologists vs Economists: A Note
This is a note because I have not read the CSIRO Report, Future Dilemmas for Australia's Population .
The immediate reaction to the initial airing of the CSIRO Report, Future Dilemmas for Australia's Populationon the ABC Four Corners Programme has been largely negative. Though the ABC used their camera work to identify their sympathy with the ecologists, (ie. tacitly supported the ecologist's case), the commentary has been critical. Consider the following.

John Quiggin thought the economists had a better case. See Ecologists vs Economists , where he says that ' three economists, Warwick McKibbin, Chris Murphy (a leading macroeconomic modeller) and Rod Maddock (a policy economist, once leftwing, but now decidedly righwing had decidedly the best of the argument. Although I haven't read the CSIRO report, it seems to be, in essence, an updated version of the (in)famous Club of Rome modelled published as Limits to Growth. The economists pointed out that the Club of Rome model contained no prices and no adaptation to scarcity and was therefore proved woefully wrong on most counts (for example, it predicted that reserves of most minerals would be exhausted before 2000). The response of the ecologists, at least as reported on Four Corners was "we have faster computers than did the Club of Rome", to which the obvious rejoinder is "garbage in, garbage out even faster".

Alan Wood's piece called, Narrow views on broadening population , took a predictable line. CSIRO, he said, is' driven by a deep green envrionmental philosophy that finds the Western growth model repugnant and unsustainable.' CSIRO were unwilling to accept criticism and the economists who reviewed the report, found it to be deeply flawed as prices do not appear in the CSIRO model. Wood says that 'the report is too flawed by green hysteria to be the basis for sensible policy. It raises some basic questions about the impartiality of the CSIR0 on environmental matters. '

A Victor Diskordia from the ACT, in a letter written to The Australian, on 7th November stated without reading the report, that 'environmentalism like socialism is bad economics. Central planning and statist solutions do not work. Prohibiting economic progress can only result in poverty and stagnation'.

The editorial in The Australian was critical and hackneyed. This Editorial: Population debate is about people said:

"Future Dilemmas for Australia's Population said a lot about depleting oil and fish stocks, but a lot less about the influence of human capital and ideas. Even though it was forced to offer countervailing views in its final report, the CSIRO exposed its ideological predilections. The anti-growth green agenda that links economic expansion and more people with environmental degradation pervades the report. This was summed up by caveats such as "technological innovation offers promise but . . .".

And Paul Kelly in his Deep green dilemma commentary rolls out the hackneyed cliches of apocalyptic vision, green-based religion and scientific dogmatism. Kelly said:

"The report's co-author, CSIRO's Barney Foran, confirmed to The Weekend Australian that his preferred population scenario of the three analysed (20 million, 25 million and 32 million by 2050) was the low option. His report links population decline and best environmental outcomes. It finds that the 20 million scenario by mid-century involving "the beginning of population decline allowed a range of environmental quality issues (emissions in the airsheds of capital cities) and resources use issues (housewater use) to stabilise.

Foran is unhappy about the middle path of 25 million, which Ruddock says "is where we will be" by mid-century. For Foran this risks Australia sinking into a "public and policy apathy". His passion is a deep green apocalyptic vision. He told The Weekend Australian: "We have to make big and almost revolutionary changes over the next 10 to 15 years or we will fall behind the problems driven by economic and population growth."

....Foran dismisses this as part of a "Harry Potter world" of "mystique and wands"...Beneath this long-awaited CSIRO report is a fusion of scientific process and green-based religion". This CSIRO project is a model of the physical economy but not the money economy. It involves an energy-based simulator of the economy and a second simulator to capture physical functions (crops, animals, people, cars) to generate alternative scenarios ... The further truth, however, is that scientific dogmatism has undermined this project and the CSIRO's reputation. This is obvious from Ruddock's remarks, as the paying client, made to The Weekend Australian. The report's defect lies in its refusal to incorporate the role of human choice and the reality that people will change their behaviour in response to new situations."

What was of interest in the Ticky Fullerton 4Corners piece, Search for a Supermodel, was that we have the models of the economy on the one side and models of the environment on the other, with little in the way of interaction. These are supposedly bought together by the policy makers----according to Senator Nick Minchin from South Australia.

If we introduce water or drought into this we can see that we need to bring economy and ecology together. I always come back to this end point (see Ken Parish's piece, What does it all mean?), because water makes it easy for us to hang onto to see where we are going, and what we are not doing. Thus, SA could not develop without water. Lack of water, or poor quality water places severe limits on regional development. Drought gives us an idea of what existence would be like without water.

What the 4Corners piece did show is that those who work in Canberra are not building models of sustainability development that combine ecology and economics; and that the politicians are doing a poor job in interlinking the two.

It is not because the politicians don't understand the situation. Senator Minchin, the Federal Finance Minister, is a senator from South Australia and so he knows a thing or two about the serious situation of water. He is even willing to say so BEFORE: Spend it on the rivers AFTER: Spend it on Debt:

"It is ridiculous for the nation to have $30 billlion tied up in shares in a telecommunications company, when frankly, there are much more pressing national needs, like our serious situation with water. At some point it is going to require a national investment to restore the health of Australia's river systems which are in serious trouble. Clearly, you would have a lot more options on the table if you did have the resources available from the sale of Testra."

That was prior to going into the cabinet meeting. Senator Minchin backflipped quickly on Telstra after Howard and Costello had spoken to him at the cabinet meeting. He came out of the cabinet meeting and spoke to the right script, that the proceeds from the full sale of Telstra should primarily used for debt reduction.

Why the failure to model the intertwining of economics and ecology in Canberra? You get some idea from the economists. Despite the acknowledgement that in adressing the effect different migration scenarios will have have on Australia's environment the CSIRO's projections of the physical economy offer a valuable databank, economists like Murphy, from the Econtech group, says that CSIRO's approach is very much in the Club of Rome thinking, and that their model doesn't include prices. It can't show, for instance, how higher prices reduce water usage or greenhouse emissions.

For my scepticism about this position, that higher prices in reducing water usage will lead to sustainability, see my remarks in 'comments' for John Quiggin's post Connections John has yet to answer.My gut reaction to the economist position in this debate is that they have a big faith that the market will do the job to shift our conduct towards a more sustainable way of living.

My gut reaction to policy makers like Senator Minchin is that they read the prepared script and reason thus: economic growth through free trade gives us the money to repair the environmental damage. Without the surplus money we could not pay for the restoration of our landscapes. To which the fool replies: why not avoid the damage to our river systems and landscapes in the first place? Why do we allow economic growth to damage the environment only to turn around and patch things up before the environmental debt gets too great? Is this not a crazy way to run a country?

Thursday, November 07, 2002

The State of South Australia
The SA State Government's Economic Development Board handed down its first report this week into the state of the SA economy. The Economic Development Board was set up by the Rann Government soon after it took office to develop a blueprint, or economic strategy, for the state. It is high profile and closely linked to the state government.

The report, 'The State of the State', by the Economic Development Board does not set out the future economic strategy for SA. That report will be released in March next year, and it will recommend short and long-term actions and performance measures for sustained economic growth in SA. This is a status report on the state of the SA economy, and it provides an assessment of SA's economic performance, competitiveness and future growth prospects in a globalised world. It says that the people in SA must confront both the heavy knocks of a decade ago and the long years when decline was all but accepted; and then find their own way back to confidence.

It's main message is that, if it is to succeed in the global economy, then SA must meet the challenges head on, and carve out its own niche where the State can be competitive. The challenges are: a small domestic market, geographical isolation from substantial trading markets, the driest state in the driest continent, and low population growth. South Australia has lagged behind national trends over the past decade, and if this continues South Australians will face ' a relatively bleak future of declining regional significance and falling living standards.'(p.13).

The argument is a compelling one. Slower growth means fewer job opportunities, higher unemployment, lower wages earned, lower tax revenues and lower standards of living in the future. This means higher tax burdens or reduced public spending and increased reliance on Commonwealth for financial support to maintain public infrastructure and services. Under the 'no change' scenario South Australia faces the prospect of a downward economic and social spiral. The conclusion? South Australia will become a living musem of how things used to be unless it embraces major social and economic change.

The Report says that, in its opinion, this is not a future that South Australians would want. They want a prosperous one without compromising their lifestyle. This can be built by developing new and existing industries. SA does have some competitive advantages: education and skill of its work force; competive elements of its existing industrial base; commitment to environmental sustainability; world class research institutions that generate technologes, which can be used competitively by local business and to generate new businesses; significant agricultural and mineral resources which can be valued added; capacity for adaptation and speed of change that is unique to small economies.

SA must build on these strengths and move forward with a commitment to growth. There has been a history of high level strategic plans in SA, but the state has been rather hit and miss in translating these plans into community-supported actions, and poor in implementing them.

What is needed is for the community to change, to embrace progress and prosperity, become open and innovative and to combine entrepreneurship with community spirit. Ireland did in a decade, so did Victoria. SA needs to do it. The SA community needs to work better to create the conditions for prosperity.

What are we to make of this?
Well, The Advertiser was right behind it. Its headline said Time to Act". Mike Rann the Premier concurrred: ' We cannot afford to muck around---we have to treat this seriously. We don't have any option but to back this board.' Greg Kelton, the State political reporter, said we have to roll up our selves for the state's sake. The Editorial in The Advertisersaid that it was a brave first step to our future and that it is an opportunity that the Rann Government cannot afford to shun. Rob Kerin, the Leader of the Liberal Opposition, welcomed the Report, but said that we could not wait until March for the economic blueprint.

My initial response is one of pesimissim. The talk of economic regeneration and embracing economic change means that all the emphasis is going to be on SA having to become the most efficient state in Australia, if it is to survive in a harsh and competitive global market. What will be conveniently forgotten is SA having to also become an ecologically sustainable state. Oh, there willl be the obligatory mention of the River Murray and water---as there is in the current Report; but this ecology will not be bought into economics. The economy will be treated as a stand alone entity as usual; and the focus will be on bring community values and culture into line with the dynamism of the market. The ecological underpinnings of 'the economy' will drop into the background. There will, in short, be little in the way of innovative thinking here, that takes us beyond market efficiency and knowledge nation.

So I read it as a pessimist document not an optimistic one. It indicates that the March report on economic strategy will not engage with the soon-to-be-released CSIRO report called Future Dilemmas for Australia that was produced by Sustainable Ecosystems division of CSIRO. But I may be proved wrong. The Economic Development Board may show some intellectual leadership by basing their case for economic regeneration on a good understanding of the complex relationships inherent in South Australia's economy and ecology.

Wednesday, November 06, 2002

A Fool Looks at Federal Treasury
I am fascinated by the greening of Federal Treasury. What is happening I wonder? Are they trying to play catchup in offering policy advice? Do they fear being replaced by CSIRO scientists who have the PM's ear. Is anxiety causing the green turn? Do they dread being downsized from the elite policy advice circle?

I could not resist reading the piece on 'Renewable Energy---a clean alternative?', in the Spring 2002 edition of Treasury's Economic Roundup magazine. I rather liked the way the Treasury economists posed the question. The scepticism of putting renewable energy into question was so different to the dogmatism of the past. It showed that some thinking was happening in the citadel of our hard, toughminded social science that once ruled public policy with the iron hand of a Keating.

My interest in renewable energy arises because it seems the way to go on Eyre Peninsula in South Australia. That place should never have been developed. But they did so in true pioneering spirit, and now they have run out of water big time. (A contemporary example is cotton farming in the Great Sandy Desert).The little water that is left in the underground aquifers is salty; as is the Tod River, the only river. Those living on the Eyre Peninsula still want development and they have little truck with a steady state economics proposed by decent liberals. So they have little choice in the long run but to turn to desalinisation powered by renewable energy (there is lots of wind and heaps of sun on the arid region of Eyre Peninsula for those who are unclear where the region is located).

The Rann Labor Government does see the logic of the green argument, albeit dimly. It tentatively dipping its toes into the salt by proposing a teensy weensy pilot project desalinating the brackish water of the Tod River to see how things stack up.

We can't go too high tech too fast in SA. That would show too much get up and go for the "education city".

So I read the Treasury article in the spirit of the policy advice it was offering to decision makers. Of course, Treasury doesn't know anything about the water politics on Eyre Peninsula. It has its finger firmly on the pulse of the World Summit on Sustainable Development in Johannesburg, and an eye on the proposal by the European Union that countries set a target to increase the renewable component of energy production to 15 per cent by 2015.

That sounds just right for the Eyre Peninsula I thought. So what advice is Treassury offering?

Needless to say, Treasury is not so easily convinced by the above. Their first line of argument states that we are not running out of fossil fuels in the medium term. It is only when these fuels become scarce that prices will rise, consumption drop, and a signal is sent to producers that consumers need alternative energy sources. However, the green turn by Treasury means that the economic manadarins are sensitive to the externality of fossil fuels imposing external costs on the community through increasing levels of greenhouse gases and air pollution. They acknowledge that this is a serious policy problem.

Rightly so I thought. Global warming will decrease the amount of rainfall in the southern part of the Murray-Darling Basin, increase the evaporation of water in Lake Alexandrina and the Coorong will cook. The externalities of air pollution make people very sick and can even kill them. Since externality is a big problem lets us roll out the wind and sun-powered desalinisation plants. This would have the bonus of cutting down on the power generated by coal-fired power stations in SA and NSW. That is a reasonable policy position.

Treasury, however remains firmly sceptical. Its second line of argument states that 'increasing the use of renewable energy in order to reduce Australian energy imports would only be a net benefit to the Australian economy, if domestic renewable energy could be produced at a lower or comparable cost to imported energy. If it costs more to produce than imported energy the policies to promote its use [probable on most accounts], this would impact on the competitiveness of Australian business and reduce real household income. Such an outcome is analogous to polices that favour discredited import replacement strategies.

Well I am rather partial to supporting key infant industries myself. It makes sense for the SA government to give Whyalla a hand to shift from the dirty industries of BHP that polluted the town to the clean renewable technologies. Regional renewal and all that. It would give the Upper Spencer Gulf a vibrant future. There is no hope for an education-lead recovery in Whyalla.

Treasury is not convinced by the fool's reasoning. It says that whilst renewable energy sources offer benefits to some aspects of the environment, they may damage others. Renewable energy is not necessarily environmentally benign as this form of energy can impose external costs on the community. Thus wind farms----the large scale use of wind turbines ----are unsightly and noisy, whilst solar power requires considerable tracts of land. These environmental problems/costs need to be factored into the cost and benefits of renewable energy projects.

Fair enough I thought. But really, this is not much of a consideration in the Eyre Peninsula. There is lots of space and few concentrations of people. The local communities having water is the more crucial policy consideration. Treasury does not seem to grasp this ecological issue.

Treasury refuses to budge from its sceptical stance:
'In any case the most appropriate path forward for society is not clear and policy makers should be aware of the risks of prescriptive policy instruments aimed at 'picking winners'. In this situation of uncertainity the best approach is through the use of broad-based market measures.

It is at this point that Treasury comes back to the externality problem of undesirable environmental degradation. Their argument is along the following lines. The solution to the externality problem, it saays, is to ensure that resource users face the full costs and benefits of their actions. Then they will take into account the costs and benefits born by others, in addition to the costs and benefits they accept themselves.

Market measures are non-prescriptive and so they give individuals the flexibility to choose the amount and means of reducing environmental degradation [presumably by coal-fired power stations] depending on their own circumstances. A further advantage of market instruments, Treasury says, ' is that they provide a continuing to find innovative ways to further reduce emissions, such as the development of more advanced clean energy resources. As these instruments do not prescribe certain technologies, they are less likely to lock communities into costly emission reduction strategies. '

So we should let the market sort things out on the Eyre Peninsula. This is good news for the Rann Government, which is trying to portray itself as a responsible manager of the economy that has not been travelling too well. Hence it has been looking for some ideas to get things moving again to avoid SA becoming a basket case. What has been leaked the press has little to ecologcally sustainable development.

Yet Treasury's policy advice is structured around a cost benefit analysis that does not come to grips with the concrete situation of Eyre Peninsula. The regional community has little choice in the long term but to embrace renewable energy and desalinisation plants, and it makes sense in an arid region. The local councils realise this, hence the talk of Whyalla being an eco-city. But they need the support of the state and federal government to help finance the wind and sun-driven desalinisation plants, and to develop the region as a centre for renewable energy through a clustering of new technological industries.

But Treasury lets the cat out of the bag. These may be a good idea but they will cost. It is best to go for the least expensive option. Which is exactly what the Rann Government is doing. Whyalla is going to have to do the eco-city bit on its own.

Monday, November 04, 2002

A Policy Note on Heidegger
John Quiggin says that he finds it hard to make sense of Heidegger on deconstructing a tradition. In having a go he says in a note, 'Heidegger and the Nazis' (Monday November 4, 2002), that:
' A complex philosophical or political proposition can't be assessed in isolation - it's necessary to examine both its underlying assumptions and its implications.'

This is true.(a quibble: I prefer 'argument' to 'proposition'). But in assessing the argument, assumptions, implications (not to mention the historical tradition these belong to ) it is not a case of standing outside in the street examining the scaffolding of a building. We are inside the building. Or inside language.

Consider neo-classical economics. It is a very sophisticated theoretical edifice that has been built up over a long time. It takes a lot of hard intellectual labour to work up an understanding of how markets work in a theoretical sense. We need to understand the language because economists now dominate the policy making table, are reluctant to let others into the policy room----eg. ecologists or CSIRO scientists----and many of them engage in gatekeeping operations. (The ABC Four Corners Program on the CSIRO report forecasting a range of possible outcomes for the year 2050 showed that). It is difficult to assess this tradition as a whole from the outside because those of us in the policy-making world are inside it. We live within its horizons so to speak, and the language of markets is the language of policy makers. We speak it as if it were our own. It is our own.

Yet we need to assess this [scientific] tradition because market instruments are being used as the key governance mechanisms to drive water reform across the Murray-Darling Basin. Big things are claimed for it by economists, and the policy makers go along with them, even accepting the claims as if they are shiny truths.

Many involved in water politics are sceptical. They reckon that the market will lead to the efficient allocation of scarce water resources, but they doubt that this efficiency will lead to effective environmental benefits. However, in assessing the way the processes or logic of a deregulated market shapes the conduct of irrigators, we have to work from within the economic tradition.

Crudely speaking, Heidegger argued that science depended up the metaphysical assumptions of a disengaged modern philosophy with its dualisms of subject/object, mind/body etc. If these are deeply embedded in economics, then they would be very hard to stand outside of. It would take a lot of work to dig our way out.

John Quiggin appears to say that we can stand outside a tradition. He says 'Heidegger's [Stone's] understanding of his own philosophical position led him to derive the implication "I should support the Nazis" [conservatives]. It seems clear that something is badly wrong in Heidegger's [Stone's] thought, but it is not immediately obvious what is wrong. There are two possible responses. If you believe that at least some of Heidegger's [Stone's] work contains valuable insights, you should try and isolate the problem, then salvage those points that are unaffected. If you are doubtful about the value of the entire enterprise, you are justified in concluding that the salvage job is unlikely to be worth the trouble.'

This is too neat and quick. It is looking at the enterprise as if were an object separate from me.

Stone was basically a spokesperson for the Treasury's free market tradition under the Hawke and Keating Labor Government and lead the push for dismantling Fortress Australia. We---another economist----can assess this or that argument of Stone about the value of free markets or globalisation, and acknowledge that his case for globalisation does or does not contain valuable insights that can be salvaged. But what economists don't do is dump their economic tradition as a whole. They work inside their 'home' sifting and building away as they construct and reconstruct their models of the economy. Few indeed are doubtful about the value of the entire enterprise.of economics as a social science. They may be doubtful of different schools and take economics in different directions, eg., Hayek; so we end up with have a family of schools in economics. But how can an economist dump the tradition that makes them an economist and still remain an economist? They don't. They question it from within.

If we are assessing the economic arguments about the value of water trading for shaping the conduct of irrigator's conduct towards a more sustainable way of doing things, then we do not care about the personality of this or that economist ( eg., John Stone or Graeme Samuel), their politics which we may violently disagree with, or their moral failings as human beings. We are interested in the flaws in the argument eg the public benefit test in competition policy. But we are also interested in the tradition (the systematic body of economic thought itself) which stands behind the arguments that are put forward by neo-liberal politicians and economists. We are interested in the tradition because of the possible ecological benefits of governing through the market . And we pose a question: 'how can privatising the commons and introducing water trading produce ecological benefits?

So in John Quiggin's terms we 'play the ball, not the man'. And we can agree with John's following statement that ' the validity or otherwise of a philosophical [economic] argument should not depend in any way on the credibility of the person who makes it. This claim would rule out the argument "Heidegger's [Stone's] theories led him to become a Nazi, [conservative] so they must be wrong". But they would also rule out any sort of argument from authority. That is, except for purposes of academic courtesy it would be wrong to mention the source of particular arguments let alone to make claims of the form "Heidegger (Samuel] put forward this proposition and therefore it deserves to be taken seriously", which in practice are made all the time.'

Am I picking a fight with John in saying this? Is John Quiggin trying to pick a fight with somebody willing to defend Martin Heidegger as Don Arthur suggests in his 'Turtles miss the global economic train - Jacques Derrida lost in Adelaide suburb - the phenomenological John Quiggin', on Monday 3rd November? I'm not sure. (I am not defending the man, his intentions or his politics). We seem to have a consensus.

Let me then push things beyond this consensus. As we know, Heidegger called into question the value of the entire enterprise of modern science and philosophy (including economics) because of the way it enframed reality as a resource to be controlled and manipulated for human use. Policy makers work inside this enframing and they came to think of themselves within this tradition (eg., as human capital), using instrumental reason to conquer inland Australia for economic growth. They think they are the movers and shakers using their machines and technology as tools to build their dams in the Snowy Mountains and turn the Snowy inland to create prosperity. But they end up being shaped, driven and controlled by the growth machine of developmentalism, which thanks to jone Stone & Co is now propelled by competition in the global market. They find themselves propelled along by the forces of the global market place to become ever more efficient, ever more productive, so as to sell ever more exports to create ever more profits. And they know they are ripping the guts out the country. They don't like it.

If we cannot take this developmentalism off like an old suit or some smelly socks, then what can we do? Heidegger suggests that we find those marginal practices and ways of viewing our relationship within nature that are buried within the broad economic tradition; these can open up to different ways of doing things. This is a dwelling on the earth and it is a practice that conserves and saves the earth. Today we call this living sustainably.

I am defending the central deconstructive thrust of Heidegger's philosophy, its return to, and recovery of the everyday world we inhabit as a counter to the abstract, modern scientific tradition (utility machines in a clockwork mechanism) and a concern to live sustainably on the earth. Am I picking a fight with John Quiggin?

More on Water

I have been away for three days trying to work on a manuscript tentatively called Greening The Levers of Power. I have only just got back into town. Since political life gobbles up my time I rarely find the space for an extended period of work on book manuscripts. I can only grab bits of time here and there these days.

What has happened in the meantime is that water has become even more central to current public policy issues. It is no longer an Adelaide obssession. Melbourne is now on water restrictions.This is a negative response by the Brack's Government, and there is little indication that this Labor Government will shift to a positive response of developing long-term policies that would make Melbourne a sustainable city. Adelaide, of course, still refuses to put water restrictions into place. Unlike everyone else in the Murray-Darling Basin, the Rann Labor Government can see little connection between cutting back on water usage in the city and increasing environmental flows to help the poor old Coorong wetlands or keeping the Murray Mouth open. Maybe they will do something next year if their legal entitlement is cut. Since they still have their legal entitlement of 1850 gigialitres across the border this year, so no worries. Adelaide is sitting pretty.

The big water news in Adelaide was that the Murray-Darling Basin Ministerial Council came to town. They are on a promise to increase environmental flows. Well at least some of the Ministerial Council turned up. No one from the Carr Government in NSW put in an appearance, whilst the representation from Queensland and Victoria was light on. They spent the morning visiting the Murray Mouth to see the dredging and take in the sand. John Hill, the SA Minister for River Murray, was the guide. His aim was to shock them. He said: "I wanted to bring them down and make it concrete and physical and get it into their guts so it stays there, so they won't go back home and forget it.' Alas, no decisions could be made because they did not have a quorum.

After the tour they had a bit of a chat, did a workshop or two, came up with a minimal amount of water for the Murray (less than the 250 gigalitres needed to keep the Murray Muuth open) and issued a press release. This basically said that the drought was a major one, that there isn't enough water in the Basin to allocate water for environmental flows, that environmental flows could only be restored when the drought broke, that irrigators should not be the only water users to feel the pain or make the big sacrifices and that urban users have to do likewise. And just to make sure that Adelaide got the message, Warren Truss, the federal Minister for Agriculture, Fisheries and Forestry, reminded South Australia that as 40% of the extra salt load in the River Murray over the next fifty years will come from their own borders (it is dryland salinity caused by extensive landclearing in the Mallee), SA needed to do something.

The Advertiser was outraged. Its Saturday headline screamed 'Left High and High', whilst its subtext, and that of the Rann Government, is that SA is the victim in all of this. Their reasoning goes like this. The right medicine for nursing a sick Murray back to health is lots more water----increased environmental flows. And it is lots more water----around 20% of current usage clawed back if there is to be a minimal ecological benefit. (Preferrably a 40% clawback, as this would give moderate ecological benefits). This water must come from the eastern basin states (NSW and Victoria). That is the message SA wants to continually ram home to the eastern states.

The eastern states and the Commonwealth interpret this message as SA being unwilling to contribute, to do its bit, as a responsible basin state. They quickly see that the SA reasoning is warped. SA does not have to contribute to the health of a working River Murray by finding water within its borders---from its own irrigators. They should be allowed to prosper through water for growth strategies. Nor should SA be expected to ensure that the Murray's tributaries in the Eastern Mt Lofty Ranges have healthy flows to restore the bird life in the Coorong. Nor should the farmers in the Upper South East be prevented from using the Ramsar-listed Coorong as a cheap agricultural drain for their salinised groundwater.

Do the South Australians see that the victim role they continue to play in basin politics does not work? Or is Adelaide too caught up in its own isolation and inferiority to see the neo-liberal reaction in Canberra? SA is requesting more handouts and subsidies. It lacks the necessary get up and go. There is little in the way of self-help or the entrepreneurial drive to make things happen. Adelaide has a dependency culture.

Of course, Minister Truss was playing hard ball politics. In using the drought to stand firm with his irrigators he did not mention that the drought was partly caused by bad government policies (overallocating water), bad farm management (extensive landclearing) and a blindness to the ecological consequences of water-driven development (salinised landscapes, declining biodiversity and choking rivers). He said nothing about tying drought relief to a shift to more sustainable farm practices; or moving from drought assistance to public funding for farmers to provide environmental services. The Murray Mouth may be the bottom end of the sewer but the drought meant that nothing could, or should be, be done.

So what is the consequence of all this inaction? Or, more accurately, of business-as-usual? Well, more top soil in the Murray Mallee will be lost; the Murray Mouth closes up for good; the river water in SA becomes increasingly saltier; Adelaide has to desalinate its water; the wine industry around Langhorne Creek shuts down because of the saltiness of the water in Lake Alexandrina; Lake Alexandrina turns blue-green on a regular basis thereby hitting tourism, recreation, boating and the booming real estate sector hard. So things get worse. And not just in the SA section of the Murray-Darling Basin.