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National Development and the Constitution

By Lance Endersbee - posted Thursday, 15 July 1999


The growth is all in financial services (eg. lawyers, bankers and accountants) and welfare.

The growth in output reflects the continuing devaluation of the Australian currency.( $AUD= 398 yen in 1970, and 75 yen today)

The rise in GDP reflects the sale of public assets by privatisations. Asset sales provide a windfall gain to governments, on top of the gain from repayment of debt. This enables substantial extra funds to be allocated to government services. But it is a one-off effect, (The total of all privatisations by Australian governments this decade is the largest in the world, followed by Brazil, Mexico and Argentina. The cash converters are contributing to our higher standard of living! There is panic in state governments if proposed privatisations are blocked by unions or Parliaments)

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Our apparent growth is also funded by steadily increasing national debt

Our population is increasing, which raises the base.

As a consequence of all the above, and several other factors, the assessment of our national economic progress by governments is quite irrational, and serious errors are being made in policy decisions. There is an illusion of prosperity at government levels, federal and state, and despair in farms, mines and factories. At the heart of all this is the fact that the GDP is not anymore an effective measure of economic progress. This is an intellectual matter for the economists.

International Pressures on the Australian Economy

We are now entering turbulent times. The world economy is facing what could be the most dangerous financial emergency in modern history. The driving force behind the crisis is the manipulation of world markets by ‘institutional speculators’, who have created a new form of financial and economic warfare. The speculators have turned the world into a vast casino, according to Maurice Allais,( Nobel Prize for Economics, 1988). These days there is little need for invading armies. The conquest of nations can now proceed through financial manipulation from the other side of the world, and through complex transactions unknown to the nations concerned.

In the past year, the national economies of several Asian countries have been de-stabilised by financial manipulators, the reserves of their central banks pillaged, their industries plunged into a lethal chain of bankruptcies and then ‘rescued’ by foreign investors picking up bargains at a fraction of the previous value.

In these circumstances, in Australia, we are critically dependent on the capacity of the Australian Government to actually understand what is going on in world financial markets, and to have the powers and competence to defend our national economy, and indeed the state economies. The Constitution is an impediment, and as a consequence the Australian Government has insufficient authority to defend us against international financial pressures, which are becoming the commercial equivalent of war.

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Australia has enormous potential. It is inevitable that others will be jealous of what we have. We have to be prepared to defend our nation in the international market-place. But the greatest danger we face may be within our own political and social institutions.

A Way Forward

In this paper I have endeavoured to show that the Australian Constitution was written to serve quite different circumstances to those which prevail today. It is now a national hazard, imposing a massive burden of costs on every person and enterprise in Australia. Despite all the emphasis in recent years on economic rationalism and global competitiveness, the glaring inefficiencies in the management of the nation have not been addressed. Is it because it is too hard for the normal political processes?

It would be possible, if all governments agreed, to appoint a substantial Royal Commission, with possibly up to 7 or 8 Commissioners, and give it the powers and time to thoroughly investigate the structure of government in Australia, and to recommend the desirable changes to the Constitution, and the relative powers and duties of national and state governments.

This would be a very large task, but quite achievable. Such an approach would enable the deliberations to be isolated from day-to-day politics, and would certainly attract thoughtful submissions. The potential benefits of such an enquiry are savings to taxpayers of the order of billions of dollars each year. It deserves our best efforts. This Academy could readily assist with submissions and proposals.

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About the Author

Emeritus Professor Endersbee AO FTSE is a civil engineer of long experience in water resources development. His early professional career included service with the Snowy Mountains Hydro-Electric Authority, the Hydro-Electric Commission of Tasmania and the United Nations in South-East Asia as an expert on dam design and hydro power development. In 1976 he was appointed Dean of the Faculty of Engineering at Monash University. In 1988-89 he was Pro-Vice Chancellor of the University.

His fields of specialisation include the management of planning and design of major economic development projects, water resources, energy engineering and transport engineering. He has been associated with the design and construction of several large dams and underground power station projects and other major works in civil engineering and mining in Australia, Canada, Asia and Africa. He was President of the Institution of Engineers, Australia in 1980-81.

In 2005 he published, A Voyage of Discovery, a history of ideas about the earth, with a new understanding of the global resources of water and petroleum, and the problems of climate change.

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