tag:theconversation.com,2011:/uk/topics/bernie-fraser-20175/articlesBernie Fraser – The Conversation2019-07-02T19:49:48Ztag:theconversation.com,2011:article/1197542019-07-02T19:49:48Z2019-07-02T19:49:48ZUltra-low unemployment is in our grasp. How Philip Lowe became the governor who lifted our ambition<p>Rarely does a Reserve Bank governor get to remake Australia.</p>
<p>HC “Nugget” Coombs, the first Reserve Bank governor, did.</p>
<p>As director general of the Department of Post-War Reconstruction from 1943, he was instrumental in creating the <a href="https://openresearch-repository.anu.edu.au/bitstream/1885/47102/3/FromCurtintoKeating2.pdf">White Paper on Full Employment in Australia</a> that was adopted as a guide by prime ministers from Chifley to Menzies to Whitlam. </p>
<p>He ensured the objective of full employment became part of the charter of the Reserve Bank when he became its <a href="https://museum.rba.gov.au/exhibitions/make-your-money-fight/role-of-hc-coombs/">first governor</a> in 1960, moving over from the then government-owned Commonwealth Bank, which had performed the Reserve Bank’s functions up to then.</p>
<p>After once again cutting interest rates to a new record low at a special Reserve Bank board meeting in Darwin on Tuesday, his latest successor Philip Lowe will travel to Yirrkala in Arnhem Land to visit the site where some of the Coombs ashes were buried.</p>
<h2>HC Coombs gave us full employment</h2>
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<span class="caption">HC Coombs, Reserve Bank governor 1960-68.</span>
<span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File:H._C._Coombs.jpg">Wikimedia Commons</a></span>
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<p>On Tuesday night in Darwin, he <a href="https://www.rba.gov.au/speeches/2019/sp-gov-2019-07-02.html">paid tribute</a> to Coombs. He said that in his dual roles as governor of the Reserve Bank and chair of the Council for Aboriginal Affairs, he was a strong advocate for land rights and the preservation of cultural values and traditions.</p>
<p>Another governor who remade Australia was Bernie Fraser, head of the treasury when Prime Minister Paul Keating made him governor of the Reserve Bank in 1989 – shortly before Australia plunged into recession.</p>
<p>He cut rates dramatically from early 1990, as might have been expected in order to bring about a recovery. But then, well before the recovery was complete (and the unemployment rate was still about 10%), he stopped cutting and started pushing rates back up – much to Keating’s displeasure.</p>
<h2>Bernie Fraser gave us low inflation</h2>
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<span class="caption">Bernie Fraser, Reserve Bank governor 1989-96.</span>
<span class="attribution"><span class="source">Lukas Coch/AAP</span></span>
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<p>His rationale appears to have been to salvage something out of the unusual circumstances in which Australia found itself. With inflation on the ropes because of the recession, he decided to keep it there – to squeeze out high inflation forever. With one temporary exception during the introduction of the goods and services tax in 2000 it never again returned to the rates of 5% or more that had been common.</p>
<p>He did it not because of an unusual opportunity, and changed Australia forever.</p>
<p>And so to Philip Lowe, who on Tuesday night in Darwin indicated that he too was taking advantage of an unusual opportunity and would probably change Australia forever.</p>
<p>Until a few years ago, it was thought that Australia’s rate of “full unemployment” – the rate below which unemployment couldn’t stay without stoking inflation – was touch over 5%. As it has fallen to 5% in the past year without stoking either inflation or much-wanted wage growth, the bank has come to revise its view. </p>
<p>It now thinks something has changed and the “full employment” is <a href="https://www.rba.gov.au/speeches/2019/sp-ag-2019-06-12-2.html">probably 4.5% or lower</a>, a low that was reached during the peak of the mining boom but hasn’t been sustained since the early 1970s. Aiming for an unemployment rate of 4.5% instead of 5% would get 69,000 more people into work.</p>
<h2>Lowe wants unemployment lower</h2>
<p>Lowe could have ignored the opportunity to push unemployment down that far, to a low that hasn’t been sustained since the 1970s. Instead, in Darwin on Tuesday night, he embraced the opportunity, saying his board was: </p>
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<p>prepared to adjust interest rates again if needed to get us closer to full employment and achieve the inflation target in a way that supports the collective welfare of all Australians</p>
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<p>Governor Lowe plans to usher in the lowest unemployment target in half a century. He believes the economy can sustain it. He said several times on Tuesday that he would prefer the government to help out <a href="https://www.rba.gov.au/speeches/2019/sp-gov-2019-07-02.html">with infrastructure projects and the like</a>, but if it won’t, he is “prepared to adjust interest rates again if needed to get us closer to full employment”.</p>
<p>He is doing it because the opportunity is there, as did Coombs and Fraser before him. </p>
<p>There’s no telling (yet) how far rates will have to fall to achieve it. Without setting out to, Lowe is remaking Australia.</p>
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Read more:
<a href="https://theconversation.com/buckle-up-2019-20-survey-finds-the-economy-weak-and-heading-down-and-thats-ahead-of-surprises-119455">Buckle up. 2019-20 survey finds the economy weak and heading down, and that's ahead of surprises</a>
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<p class="fine-print"><em><span>Peter Martin does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Philip Lowe is on the cusp of permanently changing Australia. He stands a good chance of being one of the best governors since the first, who ushered in the goal of full employment.Peter Martin, Visiting Fellow, Crawford School of Public Policy, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/498322015-10-29T19:31:17Z2015-10-29T19:31:17ZIs there really a ‘moral case for coal’? The answer is about far more than money<figure><img src="https://images.theconversation.com/files/100122/original/image-20151029-15348-v39mt6.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Bringing coal-fired power to the poor also means bringing pollution.</span> <span class="attribution"><span class="source">Biswarup Ganguly/Wikimedia Commons</span>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>Federal Energy Minister Josh Frydenberg, commenting last week on the recent <a href="https://theconversation.com/greg-hunt-approves-adanis-carmichael-coal-mine-again-experts-respond-49227">environmental re-approval</a> of the Carmichael coalmining project, sought the moral high ground against the government’s critics, <a href="http://www.abc.net.au/news/2015-10-18/no-federal-subsidies-carmichael-mine-strong-moral-case-for-coal/6863702">claiming</a> that there is “a strong moral case” for mining and exporting coal to poor countries.</p>
<p>In return, Bernie Fraser, a former head of the Reserve Bank who last month <a href="https://theconversation.com/bernie-fraser-quits-climate-change-authority-after-difficulties-with-hunt-47228">resigned as chair of the Climate Change Authority</a>, blasted Frydenberg’s argument as <a href="http://www.abc.net.au/news/2015-10-27/bernie-fraser-says-moral-case-for-coal-is-nonsense/68886750">“nonsense” and “obscene”</a>.</p>
<p>So is there a moral case for coal, or not? To answer this question properly we have to take into account all the benefits and harms resulting from the mining and use of coal. But we also need a critical reflection on our values.</p>
<h2>The case for coal</h2>
<p>Coal’s advocates say it lifts poor people out of poverty by supplying them with cheap and reliable energy. This argument is what philosophers call “utilitarian”: the reasoning being that coal boosts enough people’s well-being, by a significant enough amount, to outweigh the harm it does to the environment. </p>
<p>According to utilitarianism, morally “good” actions are those which maximise the overall amount of well-being and minimise harm. So a good utilitarian argument must take into account all harms and benefits – including those affecting future generations.</p>
<p>Coal’s detractors think that a conscientious application of utilitarian reasoning tells against coalmining. Fraser and those who agree with him are concerned about the large contribution that coal makes to global warming, which in turn will disproportionately harm the poor.</p>
<p>Climate campaigner and former US vice-president Al Gore, in <a href="http://www.theguardian.com/commentisfree/2015/apr/16/coal-isnt-solution-to-energy-poverty-solar-energy">his own assessment of the coal question</a>, emphasises the harm to health caused by pollution from power stations, and the destruction of farmland and water supplies caused by coalmining.</p>
<p>Gore, like other opponents of coal, believes that renewable sources of energy will be better at lifting people out of poverty than coal-fired power stations. Whether present solar and wind technologies are capable of giving poor people the standard of living to which they aspire is <a href="http://www.scientificamerican.com/article/coal-trumps-solar-in-india">open to doubt</a>. But even if coal can still provide cheaper, more reliable energy than renewables, it is hard to avoid the conclusion that utilitarian morals do not make a positive case for coal. </p>
<h2>Not just dollars</h2>
<p>Most arguments on both sides of this issue have appealed to the costs and benefits to health and living standards of people across the world. But there is another, largely ignored, set of values that are not easily captured by a calculation of costs and benefits. </p>
<p>One of these values is emphasised in the Pope’s <a href="https://www.catholic.org.au/laudato-si/laudato-si-chapter-1">recent encyclical</a> on the environment. Intervention in the service of business interests and consumerism, he says, is making our planet “less rich and beautiful, ever more limited and gray”.</p>
<p>Pope Francis advocates a profound change in our attitude towards nature. Relieving poverty, he says, requires a commitment to sharing knowledge and resources rather than the pursuit of development that <a href="https://www.catholic.org.au/laudato-si/laudato-si-chapter-5">threatens our future</a>.</p>
<p>The Canadian writer and activist Naomi Klein, in her 2014 book <a href="http://thischangeseverything.org/book/">This Changes Everything</a>, describes the threat posed by big energy companies to our political values. She blames these companies for distorting economies, corrupting politics and using their power to override democratic processes. In her view, finding alternatives to a dependence on fossil fuels is essential to the preservation of democratic values.</p>
<p>These positions are controversial. But they show that a sound moral position on coalmining requires a reflection on what we should value and how we should live.</p>
<h2>Does it matter?</h2>
<p>How much do moral arguments about coalmining matter, anyway? Prime Minister Malcolm Turnbull has admitted that Australian coal will not do much to relieve poverty in India, but also <a href="http://www.theguardian.com/australia-news/2015/oct/27/malcolm-turnbull-coal-export-ban-would-make-no-difference-to-emissions">pointed out</a> that if Australia doesn’t sell coal to India, other countries will. </p>
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<p>I don’t agree with the idea of a moratorium on exporting coal. With great respect to the people who advocated it, it would make not the blindest bit of difference to global emissions.</p>
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<p>Turnbull went on to claim that Australian coal is relatively clean and will cause less pollution. So the moral case for our coal, according to Turnbull’s reasoning, is that it will cause less harm than coal from other exporters.</p>
<p>But he is ignoring an alternative policy <a href="http://www.theguardian.com/environment/2015/oct/27/prominent-australians-ask-world-leaders-to-consider-ban-on-new-coalmines">advocated by 61 prominent Australians</a>: an agreement to ban new coalmines and coalmine extensions the world over, not just in Australia.</p>
<p>Fraser thinks it unlikely that such a moratorium will be on the table at the upcoming <a href="https://theconversation.com/au/topics/paris-2015-climate-summit">United Nations climate summit</a> in Paris in December. But he believes that the idea has a future, saying: “Everything points to the fact that we are burning too much coal.”</p>
<p>International agreements are notoriously difficult to achieve. But the very possibility of an agreed moratorium on coal mining means that moral arguments are not made in vain.</p><img src="https://counter.theconversation.com/content/49832/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Janna Thompson is affiliated with the Green Party. I have sometimes done work for the Green Party but am not a member</span></em></p>Considerations of the moral case for coal must do far more than consider whether cheap fossil energy will lift people out of poverty. It must consider the pollution and harm to nature that come with it.Janna Thompson, Professor of Philosophy, La Trobe UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/473662015-09-11T06:08:27Z2015-09-11T06:08:27ZIgnored by the government, shrunk by resignations – where now for Australia’s Climate Change Authority?<p>Bernie Fraser’s <a href="https://theconversation.com/bernie-fraser-quits-climate-change-authority-after-difficulties-with-hunt-47228">resignation</a> as chairman of Australia’s <a href="http://www.climatechangeauthority.gov.au/">Climate Change Authority</a> has left many wondering what is left of it and what its future might be.</p>
<p>Established three years ago as part of the climate change package negotiated by the previous parliament’s Multi-Party Climate Change Committee, the Authority was formed to serve as the principal source of climate policy advice to the federal government, particularly on the issue of emissions targets. Championed by the then Greens deputy leader Christine Milne, it was modelled closely on Britain’s <a href="https://www.theccc.org.uk/">Committee on Climate Change</a>.</p>
<p>The Authority is legislated to have nine part-time members, including the Chief Scientist <em>ex officio</em>. When the Abbott government was elected two years ago it expressed its intention to abolish the Authority along with the rest of the Labor government’s climate policy architecture. </p>
<p>Unlike the former Climate Commission, which had a public education role (and since losing government backing has morphed into the independent <a href="https://www.climatecouncil.org.au/">Climate Council</a>), the Authority was established by legislation as a statutory authority.</p>
<p>The government could not obtain sufficient support in the Senate to abolish the Authority. In particular, Palmer United Party leader Clive Palmer struck a deal with the government in which he would support the <a href="https://theconversation.com/au/topics/carbon-tax-repeal">carbon tax repeal</a> but <a href="https://theconversation.com/palmer-will-repeal-carbon-tax-but-rejects-other-parts-of-abbotts-package-28457">not the abolition of the Climate Change Authority</a>.</p>
<p>With the Authority saved, Palmer said he wanted the government to instruct it to assess whether Australia should have an emissions trading system at some time in the future, and what conditions should trigger its introduction, taking special note of the policies of Australia’s major trading partners.</p>
<p>The government agreed to Palmer’s request to extend funding for the Authority. Continued funding was essential in order to sustain the Authority’s secretariat, based in Melbourne, which at its peak reached around 35 but now <a href="http://www.climatechangeauthority.gov.au/about-cca/corporate-plans/corporate-plan-2015-16">stands at around 25</a>. On its formation the Authority attracted some of the best and brightest to work for it.</p>
<h2>The job at hand</h2>
<p>As a result of the Palmer deal the Authority is now conducting a <a href="http://www.climatechangeauthority.gov.au/node/293">major review</a> of an emissions trading system (the kind of system that would have entered into force on July 1, 2015 under Labor’s Carbon Price Mechanism), with a draft report due on November 30. The final report is due, after public consultation on the draft, by June 30, 2016.</p>
<p>While this work is important, the Authority’s most significant project was its 2014 <a href="http://www.climatechangeauthority.gov.au/reviews/targets-and-progress-review-3">Targets and Progress Review</a>, which recommended that Australia should set an emissions reduction target of 19% below 2000 levels by 2020, and cut emissions by 40-60% by 2030.</p>
<p>This year the Authority revisited its recommendations after the Abbott government set up a <a href="http://www.dpmc.gov.au/sites/default/files/publications/Issues_Paper_greenhouse_gas_1.pdf">committee within the Prime Minister’s department</a> to advise it on a target for Australia to take to the crucial <a href="https://theconversation.com/au/topics/paris-2015-climate-summit">United Nations Paris climate summit</a> in December. The Authority published a brief report reiterating its earlier recommended targets, adding that Australia should <a href="https://theconversation.com/climate-change-authority-calls-for-30-emissions-cut-by-2025-40554">cut its emissions by 30% by 2025</a>. </p>
<p>The Government subsequently announced it would <a href="https://www.dpmc.gov.au/taskforces/unfccc">pledge to cut Australia’s emissions by 26-28% on 2005 levels by 2030</a>, which for comparison with the Authority’s recommendation is equivalent to 19-22% below 2000 levels.</p>
<h2>Resignations</h2>
<p>Although the government could not act on its wish to abolish the Authority, it made it clear that it would not listen to its advice (although it does seem to have been influenced by its recommendations on vehicle emissions standards and international permits). In this situation, four members of the Authority last year notified environment minister Greg Hunt of their resignations. </p>
<p>The other four appointed members (including myself) took the view that the Authority exists to serve the parliament, as well as the government, and as long as the parliament wants it to continue and the Authority can do useful work, they would carry on in their roles. </p>
<p>They also took the view that the Authority’s reports play an important role in providing independent advice to the public. This has proved true with the Authority’s recommended emission reduction targets being viewed widely as the benchmark against which the government’s targets should be evaluated.</p>
<p>Such a situation of course sets up tensions between the Authority and the government. Fraser’s job, as chairman, of liaising with Hunt became increasingly difficult, an issue perhaps illustrated by the <a href="http://www.pressreader.com/australia/the-daily-telegraph-sydney/20150810/">story in the Daily Telegraph</a> that claimed the Authority’s modelling gave a projected cost of Labor’s carbon policy of A$600 billion – a claim that the Authority <a href="http://www.smh.com.au/federal-politics/political-news/climate-change-authority-head-bernie-fraser-issues-blistering-rebuke-to-abbott-government-20150814-gizh1f.html">rejected</a>.</p>
<p>Bernie Fraser’s extraordinary stature as a public servant (he served with distinction as Treasury Secretary and Governor of the Reserve Bank) lent authority to the work of the Authority in a way few others could. </p>
<p>His resignation is a blow, yet the work of the Authority will continue. </p>
<p>For more than a year the Government has chosen not to replace the four members who resigned soon after it took office. There is a logic to this – after all, it has said it has no confidence in the Authority, so why spend public funds on new appointments? And perhaps the most relevant question is: who would agree to be appointed by the government in such a situation anyway?</p><img src="https://counter.theconversation.com/content/47366/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Clive Hamilton is a Member of the Climate Change Authority. The opinions expressed here are his personal views and should not be taken to be those of the Authority.</span></em></p>The Climate Change Authority, rocked by this week’s resignation of its chairman Bernie Fraser but saved last year by the Senate, will continue reviewing climate policy - even if its advice is ignored.Clive Hamilton, Professor of Public Ethics, Centre For Applied Philosophy & Public Ethics (CAPPE), Charles Sturt UniversityLicensed as Creative Commons – attribution, no derivatives.