Month: July 2011

Amid the noise of the euro rescue summit last week, one important announcement received very little attention. This is surprising since it was a strategic message from Europe’s only real tiger economy, which grew by more than 8 per cent last year, and has a population of more than 73 million people. It was an announcement from the Turkish prime minister, Recep Tayyip Erdoğan.

The fight between the lofty ambitions of planners and the cold hard reality of economics still rages. Politicians and planners still believe that they know better. Yet despite all their efforts they regularly fail to suspend the laws of geography and economics.

Open societies need a free exchange of ideas, however unpleasant and offensive they may be to some. Freedom of speech is empty and meaningless if you may only say what other people like to hear.

Population growth has been one of the major political debates during the past two years. However (and despite all the federal noise around population growth) Canberra is not the place where the debate belongs.

Everything that’s wrong with Europe, it was on display in Canberra last week. Economic questions are treated as political ones; high hopes have to pass as strategies; utopias are considered realities. And if you harbour any doubts about whether all of this makes sense you better keep them to yourself. For otherwise you leave the sphere of what is officially sanctioned as respectable and politically correct politics.

When a society can no longer seriously debate political issues, controversial as they may be, it is not just a blow to freedom of speech. It also undermines a nation’s capacity for economic reform. Truths may sometimes be painful and feelings may be hurt, but a society that cannot stand vigorous debate risks becoming stale and stagnant.

For a new report, we recently surveyed all of Australia’s local councils. We wanted to find out how they perceived the financial consequences of catering for more people. We also asked them about their responses, and what they thought of their revenue-raising capabilities.

Domestic debates pale into insignificance in comparison with the financial storm that is brewing on the horizon. Why are we even contemplating new taxes that damage our international competitiveness at a time of the utmost economic uncertainty? Australia may have been an island of tranquillity post Lehman, but for how much longer?