Club Troppo

If Noel Pearson is a man of integrity (and I think he is), he will be appalled by John Howard’s just announced “plan” for Northern Territory indigenous Australians. Certainly, Pearson’s plans also involve breaking the cycle of welfare dependency in Cape York by tying receipt of welfare benefits to children’s school attendance, maintaining their houses and the like. But it does so in the context of a carefully developed, comprehensive plan for basic health care, education, vocational skills training and enterprise development. Contrary to Mark Bahnisch’s view, I think Pearson’s proposals have a great deal of merit.

But there is no sign of any of those careful, considered elements in the “plan” John Howard announced today. Like Howard’s $10 billion water “plan”, it appears to have been hastily cobbled together on the back of an envelope aiming solely at electoral advantage by playing to the “Howard battlers” and wedging the ALP. It appears to be little more than a cynical, desperate, Textor focus group-driven grab for redneck votes, by targetting the poorest , most vulnerable Australians. Sadly it may well work, judging by the supine response of Kevin Rudd and other Labor leaders to date.

What difference to child sexual abuse, availability of drugs, alcohol and pornography will 10 additional AFP officers (or even 10 from each State, assuming all State Premiers agree that the NT’s needs are greater than their own) make across more than 60 remote Aboriginal communities?

How will taking federal control of 40 community town areas for 5 years make any difference at all to housing standards? The Howard government sent military forces into a few Territory indigenous communities during its early years in office, and it made scarcely a dent in the housing backlog. In many remote communities, people live 15 or 20 to each house. The cost of clearing the indigenous housing backlog in the Territory alone is generally estimated at more than one billion dollars. The current Commonwealth-NT Indigenous Housing and Infrastructure Agreement commits a total of well under $100 million per year, scarcely enough to keep pace with existing maintenance and repairs let alone make a hole in the backlog. There is no mention of any additional funding in Howard’s announcement today, without which it’s merely empty tokenism.

What effect will banning alcohol from all remote remote Aboriginal communities have? I can tell you immediately, from 24 years living in the NT. All the drinkers would immediately move into town in Darwin, Alice Springs, Katherine and Tennant Creek, where there is no way they could be stopped from drinking without restriction. The electoral effects of this urban social chaos would certainly be fatal for Dave Tollner, the incumbent CLP federal member for the Darwin-based marginal seat of Solomon. At least some Liberal advisers (notably Territory born and bred senior Howard adviser and policeman’s son Mark Textor) would be well aware of the practical effects of such a policy, which is why you can guarantee it won’t actually be introduced before the election and will be quietly shelved thereafter whoever wins.

What will happen if, as announced, all Aboriginal parents living in remote communities have 50% of their welfare benefits withheld to ensure that their children are fed? Well, apart from the repugnant unfairness of treating all Aboriginal people indiscriminately as irresponsible children when the majority are responsible parents and only a minority of them drink at all (albeit that those who do are disproportionately serious alcoholics), how could any such policy practically be enforced across 70 or more very remote communities, without employing a large army of additional bureaucrats to dispense the withheld proportion and ensure that it is spent on food? And what would happen if they did somehow find an effective way to enforce such a policy? Again, lots of people (especially the drinkers) would simply vote with their feet and move to the major towns, abandoning their children with extended family members. Any such policy would simply worsen existing social dysfunction.

Today is a day of shame in Australian politics. Everyone deplores the appalling incidence of violence and child sexual abuse in indigenous communities. But there simply isn’t any quick, magical solution. The policy Howard has just announced is worse, more racist and more wildly impractical and misconceived than anything Pauline Hanson ever spouted. Kevin Rudd’s meek, kneejerk endorsement of it is almost as disgusting, and marks him unfit to lead Australia. At least Howard has the guts to announce policies of his own, however repugnant and ill-considered.

Further thoughts - I should also comment on Howard’s announced cancellation of the permit system for entry to Aboriginal townships. Not only does this abolish one of the most central attributes of private property (and therefore take a major step towards what one suspects is a covert ideological aim of abolishing land rights), but it has nothing whatever to do with Howard’s professed objective of tackling child sexual abuse in indigenous communities. In fact it is likely to prove counter-productive in that regard. The recent Wild/Anderson report highlighted the incidence of sexual predation on young Aboriginal girls by white miners and others. Removing permit restrictions will create open slather for these predators to enter indigenous communities without restriction, not to mention others trying to peddle alcohol, illicit drugs pornography and so on. Removing the permit system will make it much harder for the handful of additional police Howard is supplying to enforce the new restrictions he professes to wish to impose.

Howard’s plans also involve a proposal to deliver school breakfasts/lunches to Aboriginal children, at parents’ expense. In fact, such schemes already exist in many indigenous schools, but are currelty delivered free of charge. Far from assisting Aboriginal families in need, this proposal is actually reducing existing programs and imposing a “user pays” system on the kids Howard professes to want to help.

His announced taking of control of Aboriginal townships also apparently involves a commitment to charge “market rents” for housing. That too will cause drastic financial hardship among the very people Howard professes to be trying to help. Most indigenous housing associations charge their tenants concessional rents, because not only are many of those tenants unemployed, but the cost of food, transport and just about all other necessities of life is vastly higher than in major towns and cities. While a significant hard core minority certainly squander welfare money on drugs and alcohol, increasing the cost of living indiscriminately to the poorest Australians hardly seems a sensible way to address that problem.

It’s probably not worth responding to Tony Abbott’s ‘column’ in yesterday’s Herald, except to critcise the newspaper itself. Plenty of people have commented on how completely inappropriate it is to publish these thoroughly partisan polemics as opinion. It’s one thing to reproduce a speech, or parts of it, on the news pages, but opinion columns should be reserved for commentators who assert at least some claim to independence against which they can be held accountable. This sort of thing amounts to free advertising.

Abbott ridicules Rudd for getting his analysis of recent productivity developments wrong. The scorn is probably deserved, though I concede I haven’t had time to look into everything Rudd said. The main point is that Rudd hasn’t done himself any service by trying to capitalise on short term productivity changes: it’s as stupid as pointing to one summer’s heat wave as evidence for global warming. Rudd’s basic story, put forward in his budget reply, is sound: long run productivity growth has fallen this century, and more investment in education and training should raise it again. Short run changes in productivity — that is, from one year to the next — are mostly due to cyclical factors. Labour productivity (as distinguished from multi-factor productivity) is, after all, just the ratio of GDP to hours worked. If those two things don’t grow at exactly the same rate, productivity’s growth rate goes up or down.

Rudd should never have talked about short term movements, first because they’re not significant, and second because they’re tricky to analyse, as you will see if you persevere. As he seems to be able to learn lessons, we can hope he’s learnt this one, although I’m afraid he won’t get rid of the team of advisers that keeps getting him into trouble with their bullying ways and cynical attitudes.

Notwithstanding that there’s some truth in Abbott’s accusations, it needs to be pointed out for the record that Abbott doesn’t know what he’s talking about either. To make sense of what follows, refer to the graph over the fold, which shows a stylised business cycle. Note that there is no upward trend in any of the variables, because we are interested purely in the cyclical factors. The basic assumption is that employers adjust their workforce to their production needs with a lag.
(Continued)

Having blogged for a couple of months now, I am conscious of the lure of writing ‘why dont the people in charge do as I say’ pieces. As an antidote I’d like to offer 5 observations which strike a European like myself on why Australia is a great country, some of which are likely to be taken for granted by the people who have lived here all their lives:

1. The social cohesion and harmony within Australia just blows you away. No ghettos worthy of that name. English is the dominant language everywhere. No violent minorities burning cars and looting police stations every other week. No youth subculture of anger directed at public amenities like parks and bus stations. No fear that the next person in the street you dare look into the eyes is going to beat you up. It may be strange to hear, but that cohesion and internal harmony is quite unusual in Europe, and basically unknown in the US.

2. Radical changes are simply proposed and implemented in a very short space of time. Changes politically impossible elsewhere are implemented here without a second thought. One can complain that changes are not thought through and often have to be reversed or amended later on, but this willingness to simply change things is very refreshing after spending 30 years in Europe where people argue about changes, but hardly ever implement any change worthwhile. Good historical examples were of course the reductions in trade tariffs, HECS, the PBS, or the labour market reforms of the late 90s. Only now are these reforms being copied in other countries, at least 10 years after Australia just did them. A good topical example is the quite radical proposal that the Aboriginal leader Noel Pearson announced, effectively making indigenous parents’ welfare payments conditional on the school performance of their children. Economists only dared breath such ideas indoors until last week and were mortally afraid of being called a racist should they publicly propose this kind of thing, and now an Aboriginal leader himself is proposing them! If it happens, it will be once again Australia leading the way.

3. (one that you are very likely never to have thought of) Australia has no large areas of low-lying coastland that would be lost if Greenland melts and the seas rise by 7 meters in the next 1000 years. You may not think that’s such an advantage, but it is when you come from countries that would basically disappear if the seas would rise by 7 meters (such as the Netherlands or Bangladesh). This is one of the many reasons why Australia should not be as afraid of climate change as other countries.

4. All major indicators of well-being look very good for Australia: happiness, life expectancy, school education, literacy levels, quality of education of immigrants, female labour force participation, natural habitat per person, etc., are all at the top of the OECD range. The lucky country indeed.

5. There’s no real danger to Australias stability, wealth, or cohesion anywhere on the horizon: no major ethnic divisions to speak of that should worry us (even most of those calling themselves indigenous share a majority non-indigenous ancestry); no likely foreign aggressor that will bother us; no impending natural disaster for which there are not obvious adjustments at hand (less rain in the South-East is compensated by more in the North-West; desalination plants can make up for less rain near the big cities; world food prices are dropping so we can quite easily import food if soil erosion should temporarily force us to, etc). Barring a serious WW3 (not the minor skirmish we pretend is worthy of the name ‘War on terror’) I cannot realistically see anything to threaten Australia’s well-being in the coming decades.

When I reflect on all the ways this country is blessed and reflect on the poverty and dictatorship that still exists in many other countries, I cannot help feeling that Australia is a lucky country with nothing to seriously worry about. If you compare the dredge and misery that is Zimbabwe or Darfur with ‘merit pay for teachers’ or ‘industrial relations’, doesnt a smile appear on your face too? Happy is a country indeed where we so ferociously debate such relatively insignificant issues and are able to go home at the end of the day to our large houses with healthy and happy children who face such a bright future.
Update: John Cleary in the commentary mentions another clear great thing about Australia that has happened relatively recently, i.e. the almost complete disappearance of religious bigotry.