Plenty to discuss in bushfires inquiry

Over the last 61 years state and federal governments have initiated 57 separate reports on bushfire management, most of which came to similar conclusions and yet the tragedies continue and Scott Morrison is set to unveil the 58th inquiry.

Business would prefer governments to make decisions and act rather than hide behind another royal commission, but the scope of this fire season’s damage demands a national response.

Everyone is keen to ensure lessons are learned and responded to.

Whether there is a need for an inquiry is one question, another is just who will conduct the inquiry given the breadth and technicality of the issues involved.

The individual(s) involved will necessarily need to be free of obvious agendas to help prosecute acceptance of the findings.

The political reality also says that, whether an inquiry is necessary or not, the Prime Minister certainly needs one and, taking a decidedly glass-half-full approach, just maybe a comprehensive inquiry will enable Morrison to unite his own party behind reform.

The issues also cross state borders, which raise federal-state governance problems that a national inquiry may resolve.

Some business leaders contacted by The Australian yesterday noted that if the nation had a hefty carbon tax in place, the fire season would have been no different.

That is the point Morrison has attempted to make, which also highlights the breadth of issues involved and makes no excuses for the chronic lack of preparatory action and leadership shown.

The initial community response has been extraordinarily strong, including from business, which may just quell the anti-big business sentiment evident in recent years.

While highly sceptical of the political motivations for another inquiry, last year’s banking royal commission shows they have a place, particularly if the government is quick to respond and ­actually implement the recommendations.

Something needs to be done and, if we are to have an inquiry, its brief should be all-encompassing, covering land management, the use of Defence personnel, federal-state responsibilities and obviously the role of climate change in the ongoing disaster.

In March last year at the urgings of former Victoria emergency management commissioner Craig Lapsley, this column argued for the creation of a government-backed fire management industry.

Suffice it to say, the same politicians who are expressing grief today have done nothing since, and the need for Australia to ­create a national fire management industry is even more urgent today than it was nine months ago.

The concept of army reserves unilaterally being wheeled into action earlier this month, in the middle of one of the worst fire days this season, said it all and underlined the governance failures behind the disaster.

Lapsley’s dream is to create a national bushfire aircraft industry, which of course is just part of the response and, it should be said, not universally supported.

It should be noted Australia has some 80 small firefighting planes and 140 helicopters.

But the point remains that today another four imported planes are being rolled out in Australia after some catastrophic disasters.

How much better would it have been if the army reserves were helping with land management and the aircraft industry was in place ahead of the events?

Bushfires are going to continue and, sadly, play a big role in the economy for the foreseeable ­future, so it makes sense to at least work on some form of mitigation.

A big firefighting plane costs about $150m to buy, $3m a year to rent and needs at least seven ­support staff both in the air and on the ground.

Another four planes are starting in Australia this week, bringing the fleet to 11 against one full-time plane.

The aircraft is just one leg of the strategy, but undeniably a national plan is necessary beyond simply dictating when and how Defence can be rolled into action.

This is one industry in which a public-private partnership could actually help and mitigate against the inevitable future disasters.

In the months and years to come, when others may have forgotten about the impact of the fires, government support is vital.

The psychological damage wreaked on the affected communities and others is enormous and will require ongoing support.

That support and rebuilding will be necessary long after the ­issues are off the front pages and subject of political focus groups.

Women at work

US figures reported in the Australian last week showed that, for the first time in a decade, women held a majority (50.04 per cent) of the monthly payrolled employees.

Women had a majority in 2009 but have not since or before then, according to the Wall Street Journal report.

ABS figures show that, in November last year, men accounted for 52 per cent of the labour force, but this was down from 56 per cent in 2009. Over the decade, female participation has increased from 44 per cent to 48 per cent, or from 3.8 million positions to 5.9 million in November.

Over the same period, male participation increased from 4.8 million to 6.5 million people.

The trend is clear, which puts in context the present 30 per cent ­female representation on big company boards.

Stocks overheated

After outperforming global markets last week, yesterday’s fall on the local bourse was understandable.

The bushfires will hit the economy and right now the S&P/ASX 200 is trading at a price-earnings ratio premium after starting the day at 17.4 times, or 21 per cent above the 20-year average.

Industrial firms, on Goldman Sachs numbers, are trading at 24.6 times, or 45 per cent above the ­average, while banks are trading at a 44 per cent discount to industrial stocks.

Morgan Stanley’s head of research, Richard Wiles, noted that, while the immediate hit on the banks would be modest, the second-order impact was of more concern, particularly if the RBA responded with another interest rate cut.

Wiles figures that no matter which way you cut it, the big banks will remain in an earnings-per-share downgrade cycle this half.

The latest consensus earnings forecasts have the banks at zero growth after earnings fell 11 per cent last year.

Overall, the S&P/ASX 200 (which is dominated by the big banks) is expected to show 4.3 per cent earnings growth, down from a forecast 4.8 per cent for 2019. Industrial stocks are expected to increase earnings by 4.8 per cent this year, against a 2 per cent fall last year. Resources stocks are tipped to increase earnings by 8.9 per cent, against 19.7 per cent last year.

Little wonder that fund managers are warning of lower returns this year.