During the past 10 years, Australia’s foreign policy has become dominated by the notion that we benefit from a “rules-based international order”. This has allowed a myth to grow that our relative economic prosperity is thanks to this international order, and the compliance of others to these rules.
But these rules have never helped Australia economically to any large degree. The trade rules in the initial Global Agreement on Tariffs and Trade made no progress on helping Australia’s agricultural exports to access overseas markets.
Our successful trade and economic policies were Made in Australia, not in international agreements made in overseas capitals. As the former chairman of the Productivity Commission, Gary Banks, stated about Australia’s reform experience: “Unlike most other countries, Australia undertook much of this liberalisation of its own accord, outside the formal bargaining processes of the GATT or WTO.”
We removed export bans on iron ore and dismantled single marketing desks for coal and other resources, not because of an international agreement but because they were the right thing to do for Australia at the time.
We reduced tariffs on manufacturing imports by amounts well beyond what we needed to do under international trade obligations. Again, we did that because it was in the best interests of Australia to lower the cost of inputs and free up capital to go into high-growth industries.
The restoration of Barnaby Joyce as Deputy Prime Minister restores a strong advocate for the economically nationalist, Australia-first approach that has always served us well. We are wise to take the same Made in Australia approach as the world’s rules shift again with the rise of an aggressive China. The old rules were honoured more in their breach than their observance. But China is taking liberties with the rules to a degree that is destroying the merit of the whole system.
When it joined the World Trade Organisation in 2001, China was obliged to report all of its subsidies to industry. Twenty years on, it still has not complied.
Now China has used its seemingly infinite subsidisation of industry to produce more than half the world’s steel, copper and aluminium. If the rules-based international order has created a world in which a communist dictatorship has gained control of the commanding heights of industry, we need a new set of rules.
We need to return to the rule that has served us well. The rule that puts Australia first. As China bullies and threatens our nation, we cannot afford to adopt policies, no matter how much other countries want us to, that would make us weaker. A net zero emissions target would not make us stronger.
Those who are pushing for net zero emissions present it as a magic pudding that will pay for itself and create thousands of jobs. If that is the case, why do we need any laws to support changes? If net zero makes people money, businesses will do it without the need for government direction.
If it does not make us money, someone has to pay. Every cow emits about 2300kg of carbon dioxide equivalent gases a year. The CSIRO estimated last year that to reach net zero emissions we would need to start with a carbon price of $30 a tonne now. Even a relatively small cattle producer runs about 1000 head. So they would be up for a $70,000-a-year cost under a net-zero policy.
By 2050, the price would rise to more than $200 a tonne, taking the carbon bill on your steaks to a whopping $400,000 per year, per farm. Who will pay for this? It will be paid by you, at the self-serve checkout, in your local Woolies. You will have to use your PIN every time because it is unlikely any of your shops will be under $100.
These are the costs of net zero emissions. And what are the benefits? Does anyone trust China when it says it will reach net zero even as it installs record amounts of coal-fired power? If we couldn’t trust China to co-operate with the coronavirus health inspectors, how can we trust it to co-operate with the climate cops?
We need to focus on policies that work for Australia. With Barnaby back around the cabinet table, the Australian flag will fly a little higher as we decide how we navigate our dangerous region.
