This concentrated attention can only increase when Swan who is Acting Prime Minister until Julia Gillard returns from leave tomorrow hands down the May 10 federal budget. One doesn’t have to have a crystal ball to predict that the 2011 budget will be one of the toughest in the last decade, as the Gillard Government fights to bring the books back into the black and protect its economic credentials.

When Swan delivers the budget he will finally answer the question as to whether he is up to the job of delivering the necessary fundamentals for Australia’s future.

He has had his fair share of critics over the years but the strong economic position in which Australia finds itself speaks volumes of his time as Treasurer. In reality he has a persistently strong performance that, by some counts, puts him ahead of other treasurers such as John Howard.

Swan’s performance has made him the backbone of the federal Labor Government’s firepower, being reliable, confident and having the strength to tackle the difficult issues such as the mining tax. A lesser treasurer would have walked away from that issue. With the carbon tax and the tax summit on the agenda this year, Prime Minister Gillard is going to need Swan to provide the stability necessary to keep driving the Government’s agenda. The latest Newspoll confirms that Swan’s performance as Treasurer makes him invaluable to Labor’s credibility and long-term re-election strategy. His steady performance is starkly in contrast to that of Gillard, whose current stance on climate change and the carbon tax has just been effectively undermined by previous Labor prime minister, now Foreign Affairs Minister Kevin Rudd. In a similar way, at least in recent months, Swan clearly outperforms shadow treasurer, Joe Hockey, whose policy flip-flops have made him the weak link in the federal Coalition’s top troika, led by Tony Abbott and Julie Bishop both of whom have been performing well.

It is indisputable that the fiscal stimulus strategy that Swan drove helped Australia through the global financial crisis. This not only stimulated the Australia economy exactly when it was needed, but also protected Australian jobs. Indeed the Australian economy continued to grow and is now facing its 21st year of economic growth, a fact that all treasurers over the past 21 years can take credit, including, but in particular, Swan.

Even Swan’s long-term Labor rival, former Queensland Premier Peter Beattie, was so impressed with Swan performance as Treasurer, he recently praised him in the pages of The Australian much to the widespread surprise of their Labor colleagues.

An Australian federal government is difficult to manage at any time, but the current minority Government is almost impossible to handle, especially with the financial and other demands of the Greens and the Independents who are keen to trade votes in exchange for commitments, which have long-term fiscal and economic implications. Too often it is impossible for the Gillard Government not to trade with the Greens and Independents simply to get measures such as the flood levy through Parliament. This makes Swan’s job all the harder, as has the enormous damages bills for Australia’s floods, cyclones and fires, coupled with even more catastrophic disasters overseas.

Thankfully the Chinese economy has continued to consume Australia’s natural resources. This has guaranteed a reliable source of income, thus providing a foundation for the national economy and, unless there are absolutely unforseen contingencies, will continue to do so for years to come. This has enabled Swan to make long-term plans with some degree of certainty and give Australia the certainty it needs.

If Swan can return the Australian budget to surplus by 2012-13 as promised, he will further reinforce his sound reputation as Treasurer and may also put Labor in a tactically more solid position for re-election. It may be the Gillard Government’s best chance for another term.

Ross Fitzgerald is an emeritus professor of history and politics at Griffith University, and the author of 33 books. His co-authored biography Austen Tayshus: Merchant of Menace will be published by Hale & Iremonger in May.

Canberra Times, April 11, 2011

For a start, instead of winding back after the failure of the globalising free marketeers, the stated aim of the G20 group of countries, enthusiastically endorsed by Kevin Rudd, is to extend the unregulated free market worldwide. In a similar manner, and despite the opposition of China, Rudd is pushing for all 21 of the Apec member countries to universally embrace ‘free trade’.

Rudd and other world leaders should look before they leap, because corporate greed and incompetence are endemic and there is actually an urgent need for effective economic and fiscal regulation.

Now more than ever, it is essential that governments intervene to ensure that the cowboys in the market are subject to strict checks and balances. As well as fundamental fiscal and economic reforms on a global scale, we need effective national regulation, which opens the market to transparency and accountability.

As Doug Cameron, Labor senator for New South Wales, rightly argues, ‘Achieving a balance between the market and society in a range of business and financial activities must be the goal of [our] legislators.’

‘Politicians cannot stand by and watch, as financial spivs emerge from the devastation that they have imposed on the world’s financial markets to once again enrich themselves at the expense of workers’ jobs, savings and homes,’ Senator Cameron says. Workers and their communities must be protected, he argues, from ‘the rapacious actions of some of our financial corporate “elite” and the worst excesses of the market’.

Strong regulation, increased transparency and effective penalties against illegal financial activity need to be urgently implemented, along with strengthened government supervision of financial markets. In particular, we need to obliterate the excesses resulting from futures trading. What do derivates and hedge funds actually produce? Nothing at all. And how do they help the real economy? The answer is, they don’t.

Yet the globalised free market reigned unchecked for decades until it collapsed three months ago. And guess what? Not a peep from the free marketeers protesting about what is, in effect, the nationalisation of banking institutions around the world. Nor did many complain about the injection of taxpayer funds into the so-called ‘free’ market.

The seizure of mortgage giants Fannie Mae and Freddie Mac by the US government in September unleashed a flood of government interventions around the world.

In October the British government injected £25 billion into a number of UK financial institutions. UK taxpayers woke to the news that they ‘owned’ about 40 per cent of the Royal Bank of Scotland and about 60 per cent of other institutions, including Lloyds and Barclays. On 4 October, the government of Iceland nationalised Glitnir, Iceland’s third-largest lender.

In all the panic, there was nary a whimper from the free marketeers, normally the loudest critics of government intervention.

Yet they argue that markets and money can almost always manage things better than any government. Their mantra was, as Michael Pusey wrote, ‘Just get out of the way and let prices and market forces deliver their own economically rational solution.’

When the financial meltdown began back in September and as the stock market kept plummeting, the silence of economic rationalist, free marketeers and those hell-bent on selling every government asset, stripping Australia’s manufacturing base by taking business off-shore in pursuit of higher profits through lower wages, and pursuing lopsided ‘free trade’ deals, became deafening.

When it came to the perils of economic rationalist extremism and the unbridled free market, only two Australian parliamentarians had pointed out that the sky was about to fall.

Along with Senator Cameron’s passionate attacks on the free marketeers, the independent member for Kennedy, Bob Katter, chimed in about the high balance of payments, the imbalances in free trade agreements, shipping downstream mineral processing off-shore, the blowout in personal debt and the loss of government assets such as the sale of Telstra.

Hansard is littered with warnings from the former National party maverick from North Queensland, but inside the chamber his ‘thunderings’ were dismissed as little more than the ravings of a ‘Chicken Little’, spoiling the good times generated by the resources boom and easy money. This time Chicken Little was right!

And if Katter and Cameron could see the excesses of free marketeers coming, why didn’t the government of the day?

What is most damning is the realisation that, due to the lack of regulation of key elements of the economy, governments around the world have become quite impotent. The truth is that they lack real clout.

Treasurers and heads of government flying off to ‘meet and greets’ can best be described as window dressing and a pretend show of strength so as not to scare the punters.

While the G20 communiqué issued seven points of agreement, allegedly to prevent another global financial fiasco, little has been said about tracking down the perpetrators of the current crisis and bringing them to justice.

If Mr Rudd is serious about instigating change, he needs to think long and hard about the lack of government involvement in the fiscal and banking sector.

Now is the time for governments to retake responsibility for the nation and the people they purport to represent; to actively re-engage as a regulator with real teeth, but also encourage the delivery of real consumer choice based on service and actual production rather than the pursuit of obscene paper profits.

A new federal bank would be a start. Maybe the late Rex Connor of the Whitlam government was right: now there really is a need to ‘buy back the farm’.

THE SPECTATOR AUSTRALIA , 5 December 2008

But what has largely been ignored is the role of gas-fired energy generation.

The deleterious impact of emissions trading on our economy will be felt most severely in the Latrobe Valley of Victoria where such a scheme will result in significant job losses in a number of brown-coal fired power stations. The same applies to New South Wales, because its power stations are old and predominantly fuelled by black coal.

While the federal Government may consider compensation and adjustment packages, in reality they will be, at best, band-aid solutions to what will become a major economic adjustment for Australia. Queensland, however, is well placed to withstand the economic storm, because the State Labor Government spent the best part of the last decade preparing for the eventuality of emissions trading.

In 2000, the Beattie Government introduced an energy policy — the Cleaner Energy Strategy — which, among other requirements, insisted that, by 2005, at least 13% of electricity would be sourced from gas-fired power generation. As a result, there are four new gas-fired power stations in the Sunshine State, contributing over 1000 megawatts of capacity to the system.

This forward thinking energy policy has been the catalyst for the development of a whole new industry in Queensland — the coal seam gas sector. Billions of dollars have already been invested in this sector and the coal seam gas fields in the Surat and Bowen Basins are now one of Australia’s great energy provinces rivaling the Bowen Basin coalfields and which potentially has greater gas reserves than the North West shelf. As a consequence, major multinational energy companies such as Shell, BP and the BG Group are currently trying to buy into Queensland’s coal seam gas assets.

Gas is the fuel source of the immediate future. If we are to reduce our reliance on coal for power, gas is the most viable option for power generation. New investment in power-generation will occur where there are abundant cheap sources of gas. In terms of east coat Australia, that means southern and central Queensland.

NSW has only limited access to indigenous gas reserves and while Victoria has access to Bass Strait and other sources, there are questions over the amount of available gas for power generation.

Under this scenario, an emissions trading scheme will result in further investment in Queensland at the expense of other eastern States. This will exacerbate the two-paced economy that currently exists in Australia: the crucial divide between the resource-rich, export-focused states of Queensland and Western Australia, and all the other states.

In a macroeconomic environment where the Australian Government is trying to balance excessive demand pressures of the growth States against the subdued performance of the southern States, emissions trading will only make the task harder.

So do we need a national emissions trading regime to achieve the greenhouse gas reduction targets that we expect?

There’s no need to rush in and implement an Emissions Trading Scheme. Australia will meet its Kyoto protocol targets, largely as a result of the Queensland Government’s decision to ban broad-scale tree- clearing. So we have some time to get it right and, more fundamentally, lay the foundations for an energy sector that transitions from its reliance on coal to gas and ultimately renewable energy.

The alternative is for individual States to establish mandatory targets for the production of electricity from gas-fired generation. This doesn’t have to be at the 13% level established by Queensland, but it should be at a level that will result in the development of new gas fired power stations, particularly in NSW and in Victoria where a target can be set so that it doesn’t wipe out the viability of the brown coal fired generators in the Latrobe Valley.

As Queensland has demonstrated, the gas target does not merely result in the development of power stations, but also in the encouragement of new gas resources, which are essential for Australia’s long term economic development.

The gas scheme can co-exist with other programs such as the Mandatory Renewable Energy Target, which can be maintained at modest levels to encourage the development of the renewable energy sector. Once we have established new gas-fired generators in Victoria and NSW and have developed new viable sources of gas supply, it is then that the federal Government should consider implementing emissions trading.

These suggestions may jar with policy makers in Canberra who want a national scheme, not a number of State based schemes. However, before our federal policy makers jump to premature conclusions, they should closely look at Queensland’s energy policy and its impact on reducing greenhouse gas emissions and developing the gas sector.

Ross Fitzgerald is Emeritus Professor of History and Politics at Griffith University. Professor Fitzgerald is the author of 29 books, most recently The Pope’s Battalions: B.A.Santamaria and the Labor Split. He is contributing co-editor of Growing Old (Dis)Gracefully: 35 Australians reflect on life over 50, recently published by ABC Books.