Recent developments to encourage economic integration via international agreements (these are not free trade deals) often include a clauses allowing for the Investor State Dispute Settlement (ISDS) process to be included.
For full details about ISDS (see here) but in essence it allows companies in one country to litigate against the government in another country if they introduce some legislation or regulation that may negatively impact on their business. These may include things like a:
From that same website a total of 767 legal proceedings, 495 have been concluded, and if you look at the data in the UNCTAD chart, about 50% of the time the company has won or received some form of compensation in regards to a out of court settlement
With budget time fast approaching, the leaks, fears, and work-shopping ideas in the media is in full swing. It has been suggested that Education is again in the cross-hairs. This time instead of making the states pay a greater proportion of the costs of educating school students, the target returns to the University sector.
The most recent data from the ABS, notes that the real expenditure on higher education has basically plateaued since 2010-11. With real costs constant, the proposal is that a 2-3% efficiency measure will be introduced over a number of years. While those with HECS debt will be targeted to replay loans faster.
This current suggestion comes at a time when business tax breaks are under review in a climate where there is a international ratcheting to the bottom. With a proposed absence of revenue from business, which in the absence of any additional revenue raised from the trickle down zombie, means that somethings need to be cut.
Education is one way of tackling inequality but decreasing funding may only increasing the gap between those who have access to good education and those that don't. While the OECD may have pointed out those risks for Australia's primary and secondary education. the arguments concerning subsequent economic harm do not diminish when tertiary education funding is reduced.
In summary, business gain from well educated individuals, as output and productivity increases in relation to education. Subsequently education can be seen as a business subsidy.
So if the government was truly trying to improve economic productivity, perhaps its time to introduce an education levy on businesses.
With the National Water Commission disbanded in 2014, the Productivity Commission has been tasked to:
The issues paper can be found here
Submissions are open and can be provided now and after the draft report due in September 2017.
Importantly is the on-going nature of inquires and the 2018 inquiry will be the one to keep an eye out for. I have just revised a paper on this issue and I plan to get a lot of my DECRA work ready for that inquiry.
A couple of interesting news items have been raised in Queensland. First is that Adani will have the right to remove up to 26ML (a ML is a million litres) of groundwater a day by 2029. So in a year this is up to 9,490 ML of water removed (I note with interest the report suggests ground water extractions may be capped at 4,550 ML (a gigalitre is a billion litres). So the 26 ML/day must be an upper figure, that suggests that the asset is unreliable or that groundwater recharge rates are variable.
The other news story examines the proposal to increase Wivenhoe Dam by up to 900,000 ML for a cost of $881 million. This works out at a cost of $979/ML.
If I remove all concerns about the difference in value of surface water and ground water, then the Queensland Government is forgoing a water asset worth between $4.45 to $9.29 million. It will be interesting to see if Adani is allowed to use this water in any way they see fit: for example, sell the asset on?
Last Friday I was part of a team that provided a submission to the Standing Committee on Agriculture and Water Resources, inquiry into water-use efficiency in Australian agriculture.
The submission goes through the work I have been doing on water-use efficiency and the Murray-Darling Basin Plan since the 'Possible negative feedbacks from 'gold-plating' irrigation infrastructure'.
The key insights in the document are:
The full text of the submission is in the attached file