The Ministry of Truth left the building some decades ago

Posted by Ken Parish on Monday, June 6, 2011

Almost as depressing as the evident plagiarism in HillBillySkeleton’s post-truth politics post is its unremitting, one-eyed left wing bias. The Political Sword is the ideological mirror image of Andrew Bolt’s blog only much less entertaining.  The most recent post there is a lengthy and even more one-eyed diatribe against Tony Abbott by “Ad Astra”.  I seldom visit that blog and only did so as a result of Don Arthur’s exposure of HBS’s liberal unattributed borrowing practices.  I should have known better.

How could anyone with an even marginally discriminating intellect fail to notice that Abbott’s relentless negativism and lack of regard for truth has an equally long pedigree in ALP propaganda?  Labor’s opposition to the GST over a decade or so was hardly noteworthy for its positive approach or regard for truth, given that Paul Keating had lobbied hard for a GST only a few years previously.  Moreover, as we now know, a GST is a perfectly sensible and innocuous tax and part of a balanced tax mix.  One day we’ll all realise the same is true of a carbon tax or emissions trading scheme, although whether Julia Gillard’s prime ministership will survive its implementation remains an open question.  Why is it any more outrageous for Abbott to fear-monger and misrepresent a carbon tax than it was for Beazley et al to do the same over GST?

Then there was Labor’s campaign against WorkChoices, the mother of all fear and smear campaigns and chock-full of untruths and gross exaggerations.  Oh yes, and asylum seeker policy.  As we now know, Labor is entirely prepared to embrace a minor variant of John Howard’s Pacific Solution when the cold hard political reality of the alternatives slams them in the face often enough.  You can bet they would have done the same as Howard in 2001 had they been in government.  Labor led the “tough on asylum seekers” charge throughout its period in government, but at that time its policies had bipartisan support.  Might Labor’s desperate and cynical abandonment of a longstanding tacit bipartisanship on immigration policy be one of the reasons why Abbott can happily ignore their current squeals of outrage about his appalling negativity and “post-truth politics”?

The game of “my your party is more dishonest than your my party” may provide a warm inner glow of self-righteousness to the hard core lefty audience at The Political Sword, but it’s otherwise completely pointless.

Much more interesting would be an exploration of how (if at all) one might go about engineering more informative, honest political debate on all sides.  One way might be to legislate to subject political advertising to the misleading and deceptive conduct provisions of the Australian Consumer Law (there are currently almost no truth constraints at all on political advertising).  Another might be to educate kids more thoroughly in critical thinking and expose them to the existence of cognitive biases like confirmation bias which tend to convince us of the unquestionable correctness of our own opinions and close our minds to evidence suggesting otherwise.

However, even if we do all those things and more, spin and hyperbole will remain staples of the political process.  That’s because we humans will remain contrary, stubborn, prejudiced and “tribal” creatures.  Even worse for the prospects of informative civil discourse is the fact that most of us are almost entirely disinterested and disengaged from political debate, and therefore readily susceptible to capture by glib propaganda lines on the rare occasions when an issue impinges on our consciousness. The best any system can do is to moderate the extremes of such conduct.  And the best we engaged centrist individuals can do is keep away from ideologically extreme blogs like The Bolta or The Political Sword, or maybe better still keep reminding ourselves that they’re just mildly entertaining caricatures.

A graphical challenge

Posted by Richard Tsukamasa Green on Monday, June 6, 2011

When I floated the idea of an infographic wiki the other day I said this.

The problem of course is that infographics are created by graphic designers, who are trained to do what they do. Someone in the policy crowd might want to offer their knowledge on an issue in an infographic but they wouldn’t be able to create one easily. Just a few weeks ago I was trying to give a plain English explanation on why compensation was possible with a carbon price to submit to The Drum. Miraculously as I was struggling with the final draft Jess Irvine did a great job on the same topic, but the ability to do an infographic would have been a blessing.

Which brings me to the placard at right by Martin Jones at the SayYes rally on Sunday. I think is clever, very insightful and full of applied knowledge. I also suspect it’s completely and utterly impenetrable to anyone who doesn’t know the subject matter.

But I have no idea how I’d improve it so it would inform rather than bewilder.

This is important since confusion about compensation is rife, despite the importance of the issue. Take this example in the Australian. I’ll give PvO the benefit of the doubt and assuming he’s merely ignorant rather than actively disingenuous (though this distinction is distressingly difficult to make in the News Ltd press). A sincere commentator would benefit greatly by infographics that provide access to specialist knowledge, and subsequently their non specialist readers who aren’t prone to access the wiki themselves.

Does anyone have any ideas how something that is easy to explain given time – such as the distinction between income and substitution effects – can be expressed concisely and graphically to the majority whom have no sat through Microeconomics lectures? Because the alternative seems to be schoolboy errors echoed and magnified.

(Continued)

Announcing the People’s Northern Territory Constitutional Convention wiki

Posted by Ken Parish on Sunday, June 5, 2011

I have distinctly ambivalent views about Statehood for the Northern Territory, as long-time readers will have noted.  I even mused not so long ago about whether the existing grant of self-government should be revoked and other governance models explored instead.  More recently I recanted from that view, but I still have significant doubts about Statehood (explored over the fold).  This still makes me several degrees keener about Statehood than most Territorians, who as far as I can tell don’t give a rat’s backside (and who can blame them?).

Despite this, Statehood is a dream that NT politicians cannot afford not to profess to support, even though it was rejected by referendum as recently as 1998.  After a long and somnolent period of gestation in the Statehood Steering Committee (SSC), the NT government is apparently about to announce within days that there will be a Constitutional Convention before the end of this year.  Its job will be to produce a draft state constitution in about 7 days flat (with the assistance of a couple of draft documents whipped up by the SSC).  The draft constitution will then be circulated for public consultation over 12 month before the Convention reconvenes to adopt a final constitution which will then be put to the federal government of the day in an endeavour to convince it to enact it under Constitution s 121 (new States).

However, despite deep personal ambivalence, I’ve decided that as an academic constitutional lawyer, I really should take the process rather more seriously, even though I suspect it will fail again as it did in 1998.  There hasn’t been a new State established or admitted to the Australian federation since it began in 1901, so the process itself will be a fascinating one from numerous viewpoints.

Accordingly, and in a bid to open up the constitution-making process beyond the rather stodgy steps recommended by the SSC (and about to be announced),  I’ve set up a People’s Northern Territory Constitutional Convention wiki containing a draft constitution fairly closely based on the Constitution of Queensland 2001 (although with some significant changes). The wiki also contains numerous links to relevant constitutional resources, and a discussion section where I canvas a range of key issues for Statehood.

This post is an effort to stimulate reader interest in participating in the conversation and even the process of creating a draft NT State Constitution.  I’m fairly sure I can ensure that it will at least get tabled at the actual Constitutional Convention (although whether anyone takes it seriously is another question).  Apart from anything else, this is a textbook example of a citizens’ Gov 2.0 initiative, so no doubt Nicholas Gruen will be watching it with interest. Of course, whether it will generate enough interest to create real conversation or a real collaborative constitutional drafting effort is much more questionable. Still it can’t hurt to try.

Anyway, my candid appraisal of the merits and difficulties of the Statehood push are over the fold.

(Continued)

The Missing Link

Posted by Don Arthur on Saturday, June 4, 2011

At the Political Sword, HillbillySkeleton is basking in praise for her recent post ‘Post-Truth Politics.’ "Terrific Hillbilly, just terrific", writes commenter David Horton. Hillbilly’s reply is all modesty:

Thank you so much for your warm compliments. I am truly flattered. I can still see faults with what I have written, but I guess that’s always the case. I’d like to start my paragraphs with better words but just can’t seem to find them.

Some of Hillbilly’s post is very well written. As is this piece by David Roberts at Grist that Lenore Taylor cites in a recent opinion piece.

Good government by necessity

Posted by Richard Tsukamasa Green on Friday, June 3, 2011

Fron Nicholas Eubank via Chris Blattman

For years, studies of state formation in early and medieval Europe have argued that the modern, representative state emerged as the result of negotiations between autocratic governments in need of tax revenues and citizens who were only willing to consent to taxation in exchange for greater government accountability.

This paper presents evidence that similar dynamics shaped the formation of Somaliland’s democratic government. In particular, it shows that government dependency on local tax revenues — which resulted from its ineligibility for foreign assistance — provided those outside the government with the leverage needed to force the development of inclusive, representative and accountable political institutions.

 

For the uninitiated, Somaliland is a de facto country in the North of the legal fiction called Somalia, hence it’s ineligibility for foreign assistance.

The basic mechanics hypothesized, that a government with access to aid could afford to do things that dependence of tax revenue from economic activity could not, is familiar. Early in University I speculated that the success of Japan/South Korea/Taiwan could be attributable to the lack of resource rents to pay for bad governments. Fruitfully this led me to the resource curse literature and thence to other places.

Something I’ve wondered ever since is how Australian history (that is NSW and the colonies that formed directly from it) might have changed if the Blue Mountains had been crossed earlier than they had been. Were rents available from wool earlier on the strangely benevolent character of the earlier colonial government [fn1] may not have been so necessary and the political culture that provided for the defeat of the bunyip aristocracy may never have arisen. Imagine a class of wool barons creating the same stupid culture that the Plantation owners in the Deep South did, reading Walter Scott novels and romanticizing their inequitousness . Still, we still may see Twiggy Forrest swapping his overalls for a kilt.

I also wonder if (and this may not be probable) if the naval character of early government (until Macquarie all governors were navy men) had anything to do with it. Pirate ships are often characterized as having early forms of constitutional government, and in no small part this was simply due to knowledge and experience of mutiny, including ones that led to the pirates taking control of the ship in the first place. The confines of a ship are prone to make a captain aware of their precarious status, and it’s plausible that any competent captain would know it. In a tiny isolated colony things were much the same. Arthur Phillip would know that the marines on Garden Island would step in were the convicts to revolt (even if they refused to do any supervising), but getting to that point would be a failure, especially when you had a background in managing masses of discomforted, confined and sexually frustrated men. There wasn’t any way a more arbitrary or foolish use of power would long survive [fn2].

[fn1] To settlers at least

[fn2] Nor could the unfortunate Bligh

What happened to nuclear power?

Posted by Rafe on Thursday, June 2, 2011

The single thing that could possiby lower emissions in the long term is apparently off the table at present.  Assuming that it really matters to lower emissions. It is possible to be skeptical about that and still be in favour of cleaner energy sources.

One of the opportunity costs of the carbon tax (in addition to the deadweight costs of the bureaucracy and regulation involved) is the crowding out of the nuclear debate.

And not just the  nuclear power debate, but the critical and imaginative thinking that we should be devoting to other really important issues, like the health system and the ongoing debacle of the outback Aboriginal communities. The re-regulation of the labour market, and indeed the general advance of regulation.

Reply to comments on Friday  morning.

On the hazards of thinking aloud. I don’t want to get personally involved in a time-consuming debate on a topic where I have no comparative advantage, and I don’t want to spend all day blogging:)

There are at least three angles on the nuclear power issue and I think there is scope for debate on all of them. However it is impossible to do justice to all the major issues at the same time and that is why I think it is unfortunate that so much political capital is being invested in a policy that will make no measurable difference to the global climate.

The three issues that I have in mind are (1) mining and export of uranium (2) storing nuclear waste from other nations and (3) domestic nuclear power.

In the bigger picture I see nuclear power as the main hope for the many billions of people in the world who presumably would like to enjoy our standard of living.

We can help in that process and also earn magabucks by exporting uranium and storing nuclear waste.

As for nuclear power plants in Australia, I don’t know the economics but I do know that the technology is advancing rapidly, so it will become safer and cheaper.

Given that the world will need hundreds of nuclear power plants, maybe if we get started we could match the Canadians and make some more megabucks by building some of them.

http://en.wikipedia.org/wiki/CANDU

I am out for most of the day so don’t expect a reply to comments before the evening!

For richer or poorer: the delicate art of messing with middle class welfare

Posted by Peter Whiteford on Thursday, June 2, 2011

Originally posted at The Conversation by Gerry Redmond and Peter Whiteford

(Disclosure:  Gerry Redmond and Peter whiteford receive funding from the Australian Research Council for a project on “Supporting Families: Horizontal and Vertical Equity in the Australian Tax and Transfer Systems”.)

One of the most hotly debated features of the 2011 Budget was the freezing of thresholds for some family payments. This has been described positively as a “war on middle class welfare” and negatively as punishing aspirational families.

The Treasurer argued that while the families affected are not wealthy, the government wanted to target families on “modest incomes”, and pausing indexation would make payments more sustainable.

The Opposition Leader signaled he may oppose these cuts, saying they are a form of “class war” that hammers everyday households.

In the Sydney Morning Herald, Gerard Henderson argued that family payments are not “welfare”, but are equivalent to tax relief supporting families in the important role of raising children.

Ross Gittins pointed out the next day that there are more important issues at stake than the immediate impact on families, since this debate goes to the heart of what sort of welfare system Australians want to have.

Taking it out of the tax system

The government has pointed out that Australia spends much more than the OECD average on cash payments for families with children, and is the third highest spender among rich countries.

Australia is a low spender, however, on child care and maternity and parental leave, despite the Baby Bonus and the new parental leave scheme.

Some countries also support families through tax allowances, and even though our payments are called Family Tax Benefits, nearly all spending in Australia is provided through benefits made by Centrelink.

One of the most striking features of changes since the 1970s is that governments moved assistance for families out of the tax system, first abolishing rebates for dependent children in the 1970s and then moving rebates for “dependent spouses” and sole parents into the benefit system in the 1990s.

This was done to target assistance to lower income families who could not benefit equally from tax relief. It also directed assistance to carers with responsibility for children, usually the mothers.

The Howard government partly reversed this, but only a small minority ever took the option of receiving help through the tax system. Because family payments are made by Centrelink they are labelled as “welfare”.

Family assistance

An important feature of our system is how much we target assistance to lower income families.

Families not in paid work  and receiving payments as lone parents or unemployed couples always received higher assistance per child than better-off families.

The Fraser government first introduced income-tested benefits for low-income working families, although the scheme actually didn’t come into effect until after the 1983 election.

These payments were greatly increased by the Hawke government as part of their initiatives to reduce child poverty – which they nearly halved in three years. Just before their child poverty package in 1987, the Labor government also income-tested the previously universal benefit for children, family allowances.

Family payments were increased by the Howard government to compensate for the introduction of the GST, and were extended further up the income scale in 2003 and 2004 to complement income tax cuts and to reduce effective marginal tax rates on working families.

Since 2007, the Rudd and Gillard governments have scaled these payments back, but not significantly. As Ross Gittins pointed out, the families most affected by recent changes may well be “middle class” but they can hardly be described as middle-income – less than 3% of Australian families have a single earner making $150,000 a year or more. This is not so much middle class welfare, as upper income welfare.

How much has “middle class welfare” grown?

These trends should be put in perspective. The much criticized expansion of “middle class welfare” under the Howard Government increased the average real welfare payments for the richest 20% of working age Australians by around $1.60 per week.

Over the same period, the real earnings of this group went up by more than $500 per week. While their real taxes also went up, this was not in proportion to their income.

If the income taxes paid by the richest 20% of working age Australians were the same proportion of income as in 1996 then they would be paying $60 a week more than they currently do.  And this is a conservative estimate, because if the tax sxale had been indexed the extra earnings would be taxed at their marginal rate, and not their average rate.

So the expansion of middle class welfare on average gave the richest 20% less than $2 per week, but changes in tax scales gave them more than 30 times as much.

“High income welfare”

A puzzling aspect of this debate is the fact that Australia actually has the lowest middle or upper class welfare in the OECD. Nearly all other OECD countries either provide tax relief or universal payments for all children.

Only 2.2% of Australian welfare spending goes to the richest 20% of the working age population. This has increased from 1.6% since 1996, but even this higher level is but a small fraction of the extent of upper income welfare that is common in most other rich countries.

In the USA, for example, about 16% of their lower welfare spending goes to the richest 20% of the working age population.

While our current system is expensive, it has important strengths. For families in paid work we have one of the lowest rates of child poverty in the OECD: the family benefit system is an essential way in which we help “make work pay”.

Incentives to work

The main reason why family payments go to middle income and some higher income families is that we have generous base rates of payment for lower income families and we try to not withdraw them at too high a rate in order to avoid disincentives to work.

Correspondingly, if governments wanted to substantially cut “middle class welfare” they would need to either cut benefits for lower income families or increase effective tax rates on middle income families through a tighter income test (or both).

In restraining spending to reduce the deficit, it seems reasonable that the richest 20% of Australians who have enjoyed the largest real income increases should contribute, although this should include those without children as well as those with children.

At the same time, we should be conscious of the fundamental objectives of the system and make sure that we maintain the strengths of our approach.

Northern Territory: “State” of Ambivalence

Posted by Ken Parish on Wednesday, June 1, 2011

This year is the centenary of the handover of control of the Northern Territory to the Commonwealth by South Australia in 1911.  It’s a fascinating but not very well known story with many dimensions.

I was recently asked to deliver a paper to the Northern Territory Historical Society about sundry legal, constitutional and political aspects of the handover and their relevance to subsequent political history and governance.  I took the opportunity of making a multimedia recorded version of the presentation for CDU students.  However I thought I might also share it with any interested Troppo readers.  Apart from being a really interesting story in itself, the presentation will give you some idea of how we go about delivering lecture material to our students at CDU Law School (a topic recently discussed here).

Warning - the presentation lasts a bit over an hour but you can pause it whenever you like and navigate freely to sub-topics that interest you.

Long-time readers may note that the introductory music is from Jen’s and my wedding album and was performed by a Melbourne-based band led by a veteran pseudonymous Troppo commentator who should remain nameless for similar reasons to the Dark Lord of Mordor.

Electorally based policy

Posted by Nicholas Gruen on Wednesday, June 1, 2011

I recall my disappointment at the ALP’s taking the craze for early childhood intervention in the 2007 election and turning it into a generalised promise for earlier and more kindergarten.  Just think of how they could have spent that money on targeted intervention for at risk kids. Anyway I guessed that for all its waste, perhaps such universalism might just be a very expensive way to get to a worthwhile policy. But it ain’t necessarily so.

The Long-Run Impacts of Early Childhood Education: Evidence From a Failed Policy Experiment by Philip DeCicca, Justin D. Smith –  NBER Working Paper 17085 (ED)

We investigate short and long-term effects of early childhood education using variation created by a unique policy experiment in British Columbia, Canada. Our findings imply starting Kindergarten one year late substantially reduces the probability of repeating the third grade, and meaningfully increases in tenth grade math and reading scores. Effects are highest for low income students and males. Estimates suggest that entering kindergarten early may have a detrimental effect on future outcomes.