Artists Resale Royalties: a piece of pie…

The ARR scheme so far has cost taxpayers just over $2.2 million and as of December 2013 has delivered a total of 7,800 royalty payments, to 800 artists (or estates) with a median value of about $105 per payment. The scheme has, in three and a half years, only generated a total of less than $200,000 in management fees. It is unlikely that the scheme will be self-funding any time soon, if ever. And what has this costly public art project delivered? A make-work scheme for arts administrators, a restraint of trade and what is essentially an anti-progressive tax: the more you have, the more you receive. Below is a pie chart of resale royalty distributions by value. Note: the construction of the pie chart needed a few ‘extrapolations’ where information from previous years is used to categorise the latest data. These extrapolations might not be perfect.(see footnote below)

The pie chart makes it clear that royalties on resales of individual artworks for more than $10,000 each, account for 59% of all the money collected, yet these top rank payments – about 550 in total -  only account for just 7% of the total number of individual payments of the scheme. (BTW many thanks to Paul Fritjers for the tasty pie chart.)sales by price

On the other hand the bottom 44% (2,946) of individual payments have only accounted for just 9% of all the money collected. The median value of this bottom bracket of payments is about $55; the average individual transaction cost to CAL, alone, is $30.The only point of these thousands of very small, costly payments is to conceal the real, anti-progressive nature of ARR. Continue reading

Could the press gallery please score Bronwyn Bishop?

Much of the time, the public can make up its own mind on public events once it get a decent helping of facts; the theatre commentary from the parliamentary press gallery – a little of which I used to write – is more entertainment than vital input.

But on the running of the parliament, the press gallery really does have something to offer. The gallery watches parliament day after day. If the speaker is doing a bad job, the gallery is uniquely placed to say so.

So it’s surprising that there’s been so little judgment of Bronwyn Bishop’s performance in the speaker’s role. I would really like to know more about how she’s going. I was somewhat surprised to turn on the TV late one night and see her telling Tanya Plibersek to withdraw the remark “if the number is zero, just say it”. But maybe that was an aberration. I’m not watching all the time. The gallery is. And yet most of the media is avoiding judgment just at the time when judgment is needed. It’s not just me; Barrie Cassidy remarked on Insiders this week (at the 25:47 mark) on the gallery’s unusual coyness.

Slight diversion: I like Bronwyn. She’s charming and razor-sharp, and I always enjoyed talking with her when I was in the parliamentary building. She also occasionally read my stories when I was a gallery member, a tactic which like many journalists I found endearing. It was a story I wrote about then ATO chief Trevor Boucher that she pursued in a somewhat infamous committee hearing flare-up in 1992. (The story wasn’t prompted by any discussion with her; she simply picked up on it.)

But I always thought Bronwyn’s speakership was going to go one of two ways. She would accept that this was her last gig and try to make it her best gig, extending the examples of the three most recent speakers and being a fairly neutral arbiter, but with the trademark Bishop steeliness that would make her an absolute legend. Or she would remain fiercely partisan and fail, as Labor’s “Leaping” Leo McLeay had done before her. (Contrary to Tony Burke’s claims, the Opposition of the day moved a motion of no confidence in Leo, too, back in 1992; it also failed.)

With Bronwyn, it’s usually black or white.

At time of writing, only two senior journalists have committed their judgments of Bronwyn to print. Both think she’s botched the job.

  • Michelle Grattan, The Conversation: “Bishop doesn’t even give the impression of trying to be fair. She hasn’t been able to establish authority in the job – an elusive quality that is bound up not just with fairness but with an ability to know when to be tough and when to be lenient – and when to bring a touch of humour … Bishop is very obvious in favouring the government side and it comes through in her tone – she is often dismissive, sometimes bordering on rude, to Labor MPs, sounding like the cross school mistress.” She would have done better with a ministry.
  • Dennis Atkins, Courier-Mail: “She is the most biased occupant of the chair I’ve seen in 33 years of coming to and living in Canberra …” Atkins specifically rates her as worse than Leaping Leo.

Let me know in the comments if I have missed any other judgments from Gallery members. On this one, it’s worth keeping score.

Update 1: Two other gallery commentaries:

  • Gabrielle Chan, Guardian: “To the most untrained eye, Bishop is clearly batting for the government, often refusing to hear Labor’s points of order, joining in on government jokes at Labor’s expense and taking the mickey out of the opposition herself. Labor, without the numbers, can do nothing but sit on its hands.” (Hat tip to Zacster - interesting blog there)
  • Peter van Onselen, Sunday Mail (Adelaide): The most brutal of them all, and back in November to boot. “Bronwyn Bishop is going to be a hopeless Speaker. Not, of course, if you are a partisan who happens to enjoy the Coalition winning the day in Question Time, for Bishop ensures that happens on an all-too-regular basis. She is hopeless for anyone who thinks a Speaker operating with even just a modicum of independence is good for our parliamentary process … The overtly partisan style she has adopted is unlikely to change. In fact, it will probably harden … I didn’t have much time for the performances of her predecessors Harry Jenkins or Anna Burke during Labor’s time in power but at least they tried to develop non-partisan approaches to rulings … Bishop can’t even keep her snide remarks out of her partisan interventions … a hack who might as well be sitting on the benches behind the Prime Minister.”

Update 2: That link to the motion of no confidence in Leaping Leo back in 1992 has some interesting commentary by then Deputy Opposition Leader Tim Fischer:

McLeay has named eight members who have been suspended.

Let me ask those present in the gallery how fair they might think this is: seven of them were in fact from the coalition and just one was from the Government. That is not a bad ratio. This year we have had another two from our side of the House, so the ratio is nine on this side sent to the sin bin and further and just one on the Government side.

I think there would be an absolute riot at the SCG or the Sydney football ground if there were rulings from a referee in that ratio.

No prediction, sadly, of what would happen at the SCG if there were a 98 to zero record on suspensions.

Update 3:

  • Jack Waterford, Canberra Times: The Canberra veteran argues that fairness is not a speaker’s only virtue. “Bishop is in a class of her own for making no pretence of hiding her bias, and for making herself an active participant, and interjector, in debates. Sometimes, however, it is a little unfair that the referee, already playing for one side, makes so free with her power to throw players on the other side out.” But the core of the job is “ensuring the efficient management of the legislative and talking-shop agenda of parliament through the sausage machine. Bronwyn performs admirably … Her sheer feistiness in prosecuting it makes parliament a far more entertaining institution than it has been when someone boring but scrupulously fair-minded has been in charge of proceedings … I cannot think of a debate this semester which was the worse, or less well-informed, simply because Bishop had remorselessly shot every Opposition soldier who had put their head above the parapet.” (Hat tip: Spanky McPhee)

Drought: the rising dust-cloud of dumb

Is there any area of public policy in Australia that gets weaker treatment than agriculture these days? Whether it’s milk prices or agricultural investment, the normal Australian tough-mindedness about policy gets shunted aside in favour of emotive puffery. Not too many people want to be tough-minded when it comes to our farmers – not nearly as tough-minded, anyway, as they were when they were taking the subsidies away from the TCF industries employing migrant women in Melbourne in the 1980s.

Now I can think of a few reasons for this.

  • Lack of adaptability: People who have lived on a farm all their lives will find it really hard to do anything else. They may be tough but they’re really not that adaptable that they could just move into town and settle down running a milk bar. And no-one wants to shove them off the farm just because they can’t make a go of it.
  • Effort: Farmers are actually working extremely hard, which to most people (me included) makes them more deserving than some.
  • Nostalgia: Clem Smith, Manangatang farmer, has a higher and longer-established place in our national mythos than Vera Dimopoulos, Coburg house cleaner and former seamstress.
  • Distance: Most of us live a long way from farming communities, so we are free to breathe in the myth of farming without observing the less pleasant realities.
  • Our emotional relationship to food: The food issue somehow trigger things in our psyche that make us more amenable to bad policy solutions.

So as we prepare to read the coverage of the latest drought relief announcement, here are a few ideas on drought relief and farm policy that seem in danger of getting lost in the dust:

Continue reading

Predictions versus outcomes in 2013?

In the last 5 years, I have made a point of giving clear predictions on complex socio-economic issues. I give predictions partially to improve my own understanding of humanity: nothing sharpens the thoughts as much as having to actually predict something. Another reason is as a means of helping my countries (Australia/the Netherlands) understand the world: predicting socio-economic events is what social scientists should do, even if they will often be wrong.

Time to have a look at my predictive successes and failures over the last few years, as well as the outstanding predictions yet to be decided. Let us start with what I consider my main failure.

                 Failed predictions

The main area I feel I haven’t read quite right is the conflict in Syria, as part of the general change in the whole Middle East. I am still happy with my long-run predictions for that region, where I have predicted that urbanisation, more education, reduced fertility rates, and a running out of fossil fuels will lead to a normalisation of politics in a few decades time. But at the end of 2012 I was too quick in thinking the Syria conflict was done and dusted. To be fair, I was mainly following the ‘intrade political betting markets’ which was 90% certain Assad would no longer be president by the end of this year, but the prophesised take-over of the country by the Sunni majority has not quite happened. The place has become another Lebanon, with lots of armed groups defending their own turf and making war on the turf of others. The regime no longer controls the whole country, but is still the biggest militia around.

What did I fail to see? I mainly over-estimated the degree to which the West would become involved. Continue reading

The Xmas quiz answers and discussion

Last Monday I posted 4 questions to see who thought like a classic utilitarian and who adhered to a wider notion of ethics, suspecting that in the end we all subscribe to ‘more’ than classical utilitarianism. There are hence no ‘right’ answers, merely classic utilitarian ones and other ones.

The first question was to whom we should allocate a scarce supply of donor organs. Let us first briefly discuss the policy reality and then the classic utilitarian approach.

The policy reality is murky. Australia has guidelines on this that advocate taking various factors into account, including the expected benefit to the organ recipient (relevant to the utilitarian) but also the time spent on the waiting list (not so relevant). Because organs deteriorate quickly once removed, there are furthermore a lot of incidental factors important, such as which potential recipient is answering the phone (relevant to a utilitarian)? In terms of priorities though, the guidelines supposedly take no account of “race, religion, gender, social status, disability or age – unless age is relevant to the organ matching criteria.” To the utilitarian this form of equity is in fact inequity: the utilitarian does not care who receives an extra year of happy life, but by caring about the total number of additional happy years, the utilitarian would use any information that predicts those additional happy years, including race and gender.

In other countries, the practices vary. In some countries the allocation is more or less on the basis of expected benefit and in the other is it all about ‘medical criteria’ which in reality include the possibility that donor organs go to people with a high probability of a successful transplant but a very low number of expected additional years. Some leave the decision entirely up to individual doctors and hospitals, putting huge discretion on the side of an individual doctor, which raises the fear that their allocation is not purely on the grounds of societal gain.

What would the classic utilitarian do? Allocate organs where there is the highest expected number of additional happy lives. This thus involves a judgement on who is going to live long and who is going to live happy. Such things are not knowable with certainty, so a utilitarian would turn to statistical predictors of both, using whatever indicator could be administrated.

As to length of life, we generally know that rich young women have the highest life expectancy. And amongst rich young women in the West, white/Asian rich young women live even longer. According to some studies in the US, the difference with other ethnic groups (Black) can be up to 10 years (see the research links in this wikipedia page on the issue). As to whom is happy, again the general finding is that rich women are amongst the happiest groups. Hence the classic utilitarian would want to allocate the organs to rich white/Asian young women. Continue reading

Estimating Habit Formation in Voting. Thomas Fujiwara, Kyle C. Meng, Tom Vogl

Abstract:

We estimate habit formation in voting–the effect of past on current turnout–by exploiting transitory voting cost shocks. Using county-level data on U.S. presidential elections from 1952-2012, we find that precipitation on current and past election days reduces voter turnout. Our estimates imply that a 1-point decrease in past turnout lowers current turnout by 0.7-0.9 points. Consistent with a dynamic extension of the Downsian framework, current precipitation has stronger effects following previous rainy elections. Further analyses suggest that this habit formation operates by reinforcing the intrinsic satisfaction associated with voting.

Paper available here. Which puts me in mind of the great William James – I guess Hume got this sort of talk going – though that’s a guess: Continue reading

Sovereign Borders, not so Sovereign Nation II: a Nice Little Constitutional Conundrum

In my last post on Troppo I raised this question:

…who’s actually running [Australia’s] foreign policy these days? Is it Julie Bishop, as Minister for Foreign Affairs, is it Scott Morrison as Minister for Immigration or is it some other bugger?

The answer, it turns out, is ‘some other bugger’: specifically Trade Minister, Andrew Robb. While Foreign Affairs Minister Julie Bishop has been given the busy work of dealing with issues that really don’t matter to the Abbott government – such as patching up diplomatic relations with Indonesia and taking on the Herculean task of placating the Chinese while defending Australia’s right to give them the finger, Robb has been dealing with the one issue that does matter – securing trade agreements to open and extend markets for Australia’s primary product exports.

On Tuesday 5 December, the ABC – and other news outlets – reported that Australia has concluded another bi-lateral free trade agreement, this time with South Korea. It was a great photo opportunity for Robb and his Korean counterpart Yoon Sang-jick and great news for Australian producers of beef, sugar, wheat, dairy products and wine.

And with Robb currently busy working towards reaching another free trade deal – the multi-lateral Trans-Pacific Partnership between the US, Australia and a few other nations, there’s more photo opps and good news to come. For primary producers that is. How things will pan out for the rest of us is open to question.

Continue reading

Losing manufacturing is what rich countries do

Now that Holden is to stop making cars in Australia, we’re already hearing about the impending death of Australian manufacturing.

Before you descend into gloom, take a look at this manufacturing data from the World Bank. It sets out how manufacturing value-added has been moving, as a share of GDP, for most of the countries on the planet.

Summary: If present trends continue, eventually the only country making stuff will be South Korea. Plus maybe Bangladesh and Nicaragua.

Slightly smarter summary: The richer you get, the less manufacturing you have.

Australian manufacturing’s share of GDP peaked some time well before 1990, and in the past 20 years or so its manufacturing value-added as a share of GDP has dropped from around 15 per cent to around 9 per cent.

Sounds pretty bad? Maybe not. That decline is of the same order as other developed economies, although it started from a lower base than most. Canada’s manufacturing decline is very similar to ours, right down to the media fretting.

But surely it’s a very different story for places like China? Let’s look at the data. When did Chinese manufacturing peak as a share of GDP? Ooh. 1980. They’ve been going downhill ever since, if you want to see manufacturing as all-important.

How about Germany? Continue reading

‘…all the way up through the chain.’

Scott Morrison was on RN Breakfast on Monday 25 November, hosing down the idea that the diplomatic row with Indonesia over past spying on the Indonesian President and his wife might impede Operation Sovereign Borders. That was the day before we embarked on the  whole ‘Gonski is Goneski’ kerfuffle, created by Christopher Robin-Pyne who’s been clever as clever since he reached the age of six – and has stayed that way ever since.

According to Morrison, although co-operative between Indonesia suspended its co-operation with  Australia on people smuggling, That wasn’t too significant for two reasons:

  • Indonesia has its own laws against people-smuggling and he expects those will still be enforced;
  • The Government’s efforts to combat people smuggling don’t rely on Indonesia alone.

In support of the latter he said:

I’m always expecting people smugglers to try things on Fran, always, every single day and that’s why we’re putting pressure [on] all the way up through the chain.

Later in the interview Morrison added this interesting little snippet:

‘We’re working with Malaysia… [and Australia's] people smuggling ambassador has been in the Middle East talking to source countries there about what we can do.’

Continue reading