Ideas@TheCentre

Ideas@TheCentre brings you ammunition for conversations around the table.  3 short articles from CIS researchers emailed every Friday on the issues of the week.

Howard on Culture, Prosperity, and Civil Society

Jeremy Sammut

13 July 2018 | Ideas@TheCentre

Former Prime Minister John Howard launched The Centre for Independent Studies’ new Culture, Prosperity and Civil Society Program at the CIS’s Sydney office on Tuesday night.

The ‘Conversation About Culture’ event ranged over many of the important topics at the heart of the program, with Mr Howard delivering numerous characteristically penetrating and common sense insights into questions about identity politics, political correctness, civility, religious freedom, and the ‘history wars’.

But it was the long term perspective and experience that Australia’s second longest serving PM brought to the one of the most pressing international issues — the European migration crisis — that deserves special attention.

Asked about his statement in an article written for the American National Review in late 2015 — “We still live in a world of nation-states [and] to pretend otherwise is delusional” — Mr Howard took the opportunity to restate the lessons of how his government handled border protection.

Stopping illegal arrivals boosted public confidence in, and support for, a controlled, large-scale immigration and generous humanitarian refugee program, and set the scene for the record immigration intakes into Australia since the early 2000s, he emphasised.

This is to say, that a borderless world is a trans-national delusion — and that the nation-state remains the ultimate political reality.

In democratic nations, the people will have the final say on immigration. Hence, the job of proponents of immigration is to convince the people that it is in the national interest, and will do no harm to the welfare of the existing citizenry and existing character of society.

As Mr Howard also pointed out, the political correct argument that it’s somehow racist to debate immigration is entirely counter-productive. A full and frank debate about issues such as the size and composition of the immigration program is not just legitimate — it is essential to build public confidence and support.

This lesson was apiece with broader points Mr Howard made about the political crisis gripping many western countries in the age of Trump and Brexit: trust in political institutions will not be restored unless politicians are prepared to speak out — and provide leadership on the contentious social and cultural issues that are of concern to many ordinary voters.

Dr Jeremy Sammut is Director of the Culture, Prosperity and Civil Society Program at the CIS.

School funding review makes the grade

Blaise Joseph

13 July 2018 | Ideas@TheCentre

After the platitude-heavy and detail-light Gonski 2 report, it was refreshing to read the concisely-written methodical analysis of government school funding policy released last Friday by the National Schooling Resource Board, chaired by businessman (and CIS board member) Michael Chaney.

Federal government funding for non-government schools is dependent on an estimate of the school’s socioeconomic status ­­(SES) — non-government schools receive less money if they have a higher deemed SES score, calculated by an area-based aggregate measure.

The Chaney review recommends moving to a direct measure of parental income to determine school SES scores, to replace the current area-based measure. Until recently, a direct measure of income would have required schools to collect tax file numbers, with attendant privacy issues.

The Chaney review vindicates the Catholic school sector’s claim that the area-based model tends to disadvantage Catholic system schools compared to independent schools.

However, modelling suggests the overall effect of moving to a direct measure method will not be particularly dramatic. The majority of non-government schools would have little or no change in SES score. Catholic schools would see a relatively small increase in funding, while independent schools would see a relatively small decrease in funding, on average — but there would still be many schools in both sectors with the opposite impact. The difference is the Catholic sector could smooth out these impacts within their own systems.

It is important to remember this simple fact: federal funding is going up significantly for all school sectors, at rates well above inflation and enrolments. And the Catholic system retains the right to distribute the money to its schools however it wishes.

Enough is enough. The Turnbull government should finally realise that spending more taxpayer money on schools will never silence demands for even larger funding increases. And there is no evidence more money will inevitably improve school results.

This is an edited excerpt from an opinion piece published by The Australian this week.

Landing a fix on airport monopolies

Eugenie Joseph

13 July 2018 | Ideas@TheCentre

Would price controls on airport services be a good idea? This is one of the questions being raised in a new Productivity Commission inquiry into the regulation of airports.

But price controls could do more harm than good, by leading to service shortages, lower quality and under-investment in airports.

As airline passengers, most of us have a stake in this inquiry. Thanks to their monopoly power, airports can charge us very high prices for services — like car parking — and under-deliver on quality.

The charges on airlines to access airport infrastructure and facilities — such as runways and refuelling — are also passed on to passengers.

Not surprisingly, the airlines are critical of airports’ market power. Memorably, the CEO of Qantas, Alan Joyce, compared Canberra airport to a crew of Somali pirates. But what can be done about it?

For years, the Australian Competition and Consumer Commission (ACCC) has monitored prices at airports in Sydney, Brisbane, Melbourne and Perth.

However, price monitoring has limited effects. Airports do not cut their runway charges or landing fees, just because the ACCC publicly names and shames them.

Hence, although the government abolished  airport price controls in 2002, their re-introduction is likely to be canvassed in the inquiry.

But price controls have some major drawbacks. Firstly, they would impose significant costs on both airport operators and government regulators.

Secondly, regulators would need to determine the ‘efficient’ price of a service, factoring in a reasonable return on investment.  If the price cap is too low, this will create supply shortages. For example, you might be able to afford a parking spot at Melbourne airport, but this would have no benefit if the carpark is always full.

Thirdly, price controls could discourage airports from undertaking new investment. If landing charges were capped, for example, an airport may choose not to build a new runway, due to lower returns.

And monopolies are not the only problem. The efficient operation of airports is affected by government policies; like the noise curfew at Sydney airport or the cap on aircraft movements to 80 per hour.

Hopefully, the current inquiry will highlight these issues. But we should be cautious about a return to old-school price controls.