Spring in market's step has fallen flat

This is the week of the Midwinter Ball in Parliament House where the guardians of democracy, not the politicians but the fourth estate, create the appropriate mix of fermented malt beverages and wines to sand down the otherwise august veneers of your elected lower house members and senators.

It is generally a very interesting night and one that many wish later they had gone to bed early rather than having that deep and meaningful about why they have been so hard done-by in their career thus far.

Staffers also have an exemplary record of adding some real colour to the event as they maraud across the parquetry floor to play pretend politician for the night.

Anyhow every office has its party and this is Parliament's big one.

This year, however, there is a real pall that hangs over so many who work in the media as they find, like so many in our economy, the quoted ''spring'' in our economy's step has fallen rather flat.

Thousands of jobs look like they will be lost across our major media outlets, and for some, the Midwinter Ball will be last drinks.

There is of course a general trend here. Where once you needed The Canberra Times or the Trading Post to buy a car or house, now you just click to purchase on your iPad. Classified revenue is not coming back and newspapers must adjust to the new reality.

But notice how we didn't have job losses like this when the small business sector in our economy was strong. When business is confident, people are confident, and when people are confident, they buy things, and when people know others are buying, they advertise.

If there were a lot more spring in the step, there would be greater resilience in advertising revenue, and if there was a lot more advertising revenue it would be easier for newspapers to adjust to a new future and to transition rather than terminate employment.

The world economy has a hangover because for too long, too many households and governments borrowed too much money. A bounce does not look likely soon and more spending and more debt is not a solution, it is an extension of the problem, an exacerbation of the hangover; a cocktail on credit after the Midwinter Ball.

The easy question is this: after the government advertising for the carbon tax, paid for with borrowed money, do you believe that the economy will be in a better or worse position?

We have lived through years of politicians, both Labor and Coalition, telling us that we live in a global economy. There was no use trying to resist. We had to get leaner, meaner and jump higher to stay afloat. We had to get rid of tariffs and subsidies, deregulate markets. Our electricity, gas and water utilities had to operate on a commercial basis.

It is hard to remember now, but that actually reduced electricity prices for a long time. In real terms, business electricity prices fell by 27 per cent, and household prices by 19 per cent, between the early 1990s and the mid 2000s.

In the past five years electricity prices have gone up 66 per cent partially due to the Mandatory Renewable Energy Target, but the carbon tax is set to make a bad situation worse. Five years ago our electricity prices were about the same as those in the United States, now they are 50 per cent higher. Affordable power from our vast reserves of coal and gas should be the stated aim of a prudent government. We deregulated at the expense of so many and now have re-regulated in the loving memory of Bob Brown.

A good example in a crucial industry is as follows. It takes 16 tonnes of carbon dioxide emissions to make one tonne of aluminium. At $23 a tonne of carbon (the highest price in the world) our aluminium producers will be up for an extra $368 a tonne of aluminium cost. The price of aluminium is just $1850 a tonne. It's absurd to suggest that imposing a 20 per cent cost disadvantage on a key industry which employs 17,000 Australians is good economic policy.

And what is all this for? I think when we wake up on Sunday the 1st the temperature will be about the same as where we left it the day before on Saturday the 30th.

Barnaby Joyce is the Nationals' Senate Leader.

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