Andrew, what is poverty and how do we measure it?

If we surveyed an African living in Byumba, Rwanda, would he be living in poverty if we found out he didn't own a Seiko 'Kinetic' watch, he didn't have a plasma screen in his lounge room nor did he have a brochure featuring the anticipated release in 2006 of the VW Phaeton? Do one or all of these trappings of life in the new millennium mean a person is wealthy?

It wasn't all that long ago when the measure of wealth for a Rwandan was the number of cows he owned. The number of cows owned was also a comment on one's social position.

All our foreign aid has done is create a cargo-cult mentality in some countries.

Andrew, the main costs of agricultural support and trade barriers are borne by the citizens of the EU, the US and Japan. While dismantling of the various support/protection schemes would have great benefits for those in poorer countries, most benefits would accrue to taxpayers and consumers in those rich OECD countries. I don't think that any of those countries have an equivalent of our Industries Assistance Commission and its successors (currently the Productivity Commission) which identify and quantify the cost of protection to the protecting countries (although the OECD secretariat has presumably done some work in this area, as it has done with Airbus subsidies, which also slug EU taxpayers).

I wonder what scope there may be to better inform rich world voters and promote change which is in their own interests and which will, incidentally, benefit those in poorer countries? Although I fear that French intransigence would continue to form a stumbling-block even with a better educated EU electorate. I would suspect that Oxfam in the UK has campaigned on these lines, I'd be interested in your feedback.

Similarly, I suspect that trade barriers in poor countries impose costs on the broader populace while perhaps enriching a few in the privileged classes.

Sage, Don't be stupid, I know you interlect is much higher than the above comment. Try using "Australian Standards" as a guide. What the citizens of this nation expect their national Government to be spending its taxation intake on, i.e. Australians, and improving our lot. Not squirrelling $11.5 billion away in its bank account, but providing updated levels of care for its citizens.

The situation of Health, Education, Housing, and Roads to name just 4, are in an appauling mess, yet the Government is content to sit on this surplus, apperantly until the next election, when it will offer little goodies to all the apathetic voters, like a $3,000 baby bonus, have one for the country, the Treasurer said.

I understand the Government MUST save 2-3 billion for natural disasters, however saving the current amount is inhumane when so many are suffering. In my area alone Townsville North Queensland, we have more than 1,000 families homeless, when I wrote to the State Minister for Housing to ask why, I was informed that a $400 million cut in federal funding was the cause, in other words, no money no housing. Of course I assume the cut would be larger to larger States, all going to make up this federal surplus.

Please educate me as to how not spending taxation reciepts on those who pay tax is right and proper.

If a state government presided over the needless deaths of 87 of my fellow human beings and I witnessed the closure of the emergency section of a major hospital I would expect that government to cast about and look for others to blame concerning funding issues. And don't forget, Red Pete has just raided every hollow log looking for cash for the health system. Did he help himself to $400 earmarked for the homeless? As for the federal government accumulating a very large surplus and failing to apply it where it will do the most good. Well nobody ever said nor were they able to prove that we have anything other than spivs, shysters, mountebanks and T/A abusers in our state and federal parliaments.

Back O/T. I have posted it before but it's worth repeating:

"The total net transfer of capital, private and public, from the West to the Third World between 1950 and 1985 amounted to the staggering sum of over $2 trillion in 1985 prices. Private investment accounted for about 25 percent of this total, but its share has fallen from about 40 percent in the 1950s to only about 16 percent in the 1980s. The $2 trillion . . . was enough to purchase not only all the companies on the New York Stock Exchange but, in addition, the entire American farm system".

That's $2 trillion! It might be time to call in the auditors.

Dont blame the west.

It is as much a problem with developing nations own governments who decide to prostitute their country out, keeping standards and costs down for workers and companies, poor environment management and the like.

Also, much of the trade is Ag based. I put it forward that apart from primary items etc, much of the Ag. goods such as food etc being free traded does not need to be traded.

Want to help solve Brazils problems? Dont buy their cheap oranges from farmers who are clearing Jungle. If there is no demand (and in most cases we should not buy the crap anyway)there is no pressure on the country to produce and keep their people down.

Yes, the alternate for the people is not a good one. But i would rather a couple of years changing direction for the future than my children still being oppressed.

If they want to protect their country in the age of free trade, dont bend over for a deal.

Want things to improve? start by good policies and standards for longevity, rather than a few jobs and a quick buck that sees your country oppressed for the forseeable future. As a person from Microsoft in Malaysia said to me, 'as soon as wages, costs or tax incentives are affected we will shut up shop anyway and find somewhere else'.

There is no loyalty in a price based market. If you want to play in that game with short term benefits in mind, you are locking your country into 'developing status' indefinately.

Just like in all facets of life, responsibility is shared, not exclusive in this instance.

Well Australia, in my uninformed opinion, has been legendary and excellent in being the leader of the third world rather than a part of the first world in trying to reduce subsidies.

Meanwhile the Euronasties, like the Dutch who punch over thier weight with multinationals and the french who over subsidise their farmers look down at us for not matching them in aid per capita.

Poorer nations and richer nations just don't want Australia to be pro active, they just want us to pay up and shut (and sign on the dotted line).

So we should start to subsidise our farmers more. Subsidise everyone we can afford to.

Verdant you commented "So we should start to subsidise our farmers more". I probably agree in principle, however the problem is how these subsidies are distributed. If Australia follows the trends seen in the USA (and sadly we frequently do) then it would further disadvantage the poorer farmers. An example of what I mean is seen in the fact that out of the 140 odd billion paid out in subsidies over the past 10 years in the USA, around 100 billion has been sent to the richest 10% of farmers. Ricelands Foods would probably rank as the biggest rice mill in the world, yet this company has repeatedly received part of this lions share of subsidies. Oh it can be argued that they produce more, employ more etc, but in the meantime a staggering 65% of US farmers get no subsidies!. Ahhhhhh charity does not even begin at home so what hope is there for the poor farmers anywhere else when the US is so influencial within the WTO.

Verdant, Coraliz, one man's subsidy is another man's tax burden. Even worse - subsidies usually go to uncompetitive or unviable firms and put up the costs of viable firms. Marginally viable unsubsidised firms could be pushed over the brink by the taxation necessary to support the subsidised ones. The assistance lowers the overall wealth of the community.

In the late '80s, industry assistance amounted to 22% of Corporation Tax, which at the time was at the rate of 39%. Scrapping all those subsidies (something still under discussion) and cutting the tax rate would have been a great boost to competitiveness and incentives.

The main driver of innovation and entrepreneurship is the opportunity to make and retain wealth. In a subsidy-rich economy, there's a great incentive to milk the system rather than to innovate in ways which increase productivity and competitiveness, in ways which better serve the consumer.