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Friday, 4 December 2009
Friday, 11 December 2009
Friday, 18 December 2009

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Friday, 18 December 2009

Freedom quote of the week:

'Christmas is a time when kids tell Santa what they want and adults pay for it. Deficits are when adults tell the government what they want and their kids pay for it.'

—Richard Lamm

3 images and 1 solution: A modern-day ‘Rabbit-Proof Fence’ Jeremy Sammut
Latest Indigenous health scheme shows policymakers are still in ‘la la land’ Sara Hudson
What if you got pink bats and a school hall for Christmas? Stephen Kirchner

3 images and 1 solution: A modern-day ‘Rabbit-Proof Fence

In a horrible year for child protection, the story of Dean’s sister shows the way to a better system, writes Jeremy Sammut…

In 2009, Dantean images of child abuse and neglect have reminded us that child protection authorities continue to fail vulnerable children.

Recall the seven-year-old autistic girl starved to death by her parents on the mid-north coast of NSW. When her body was discovered in the faeces-ridden bedroom she died a prisoner in, ‘Ebony’ weighed just 9 kg. Black vomit and bull ants ran from her mouth and nose.

Remember two-year-old Dean Shillingsworth, who longed to be nurtured by his violent mother.
When Dean ‘clung’ to the woman who bore him, she responded not with a mother’s love but with murderous rage – she choked him to death, shoved his corpse into a suitcase, and threw it into a lake in southwest Sydney.

Yet amid the darkness appears a sliver of light and hope.

The least horrific image (relatively speaking) is the most important; it reveals the truth of the child protection crisis.

In 2004, Dean’s elder sister was hit and kicked by her mother’s boyfriend. The girl, aged just three, walked more than a kilometre, unaccompanied to the home of a relative.

Dean’s sister knew that her family situation was abnormal, that she was in danger, and that she needed a haven. This elemental tale of human instinct and survival (detailed in the NSW Ombudsman’s report into Dean’s death) is in its own way the modern-day equivalent of the story of the ‘Rabbit-Proof Fence.’ It tells us that even a three-year-old knows that the current approach to child protection in this country is fatally flawed.

In the last 40 years, removal of children has become a last resort. Standard practice in all states and territories is to leave at-risk children with their parents and instead provide dysfunctional families with ‘appropriate’ support services.

Dean and Ebony’s parents had a long history of involvement with the NSW Department of Community Services. Despite numerous reports of risk of harm, DoCS did not adequately investigate, and Ebony and Dean were not even seen to check on their welfare. Therefore, no action was taken to remove either child from obviously unsafe environments. In Dean’s case, a taxpayer-funded charity did all it could to ensure his mother kept custody of the children she was unfit to care for.
Unless child protection authorities and their political masters face up to the harsh realities and responsibilities involved in effective child protection, the deaths of Ebony and Dean will have truly been in vain.

All reports of child abuse and neglect must be fully investigated, and many children need to be removed from their families to keep them safe. Unless we start rescuing more children, this won’t be the last Christmas haunted by memories of unwanted and unloved kids who should have been saved.

Dr Jeremy Sammut is a Research Fellow at the CIS and author of Fatally Flawed: The Child Protection Crisis in Australia (June 2009).

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Latest Indigenous health scheme shows policymakers are still in ‘la la land’

Chronic diseases, in particular cardiovascular disease, are the biggest single killers of Indigenous people. But the government’s plan to tackle chronic diseases amongst the Aboriginal population owes more to wishful thinking than any evidence based policy.

In its latest Portfolio Budget statements, the Commonwealth Department of Health and Ageing provided a graph that estimated Indigenous Chronic Diseases Related Mortality Rates. Despite the number of deaths per 100,000 increasing from around 800 in 1996 to nearly 1,000 in 2009, the government estimates that a sharp break in trend will occur over the next three years. By 2030, the government optimistically predicts that deaths from chronic disease will be as low as 200 per 100,000 Aboriginal and Torres Strait Islanders.

Perhaps, they mistakenly believe that the government’s incentive plan announced last week will bring about this miraculous transformation in death rates. Under the scheme, general practices and Aboriginal health services will receive a one-off payment of $1,000 for signing on to the scheme.
After that, they will receive a $250 payment for each Indigenous patient over 15 with a chronic disease who agrees to sign up to the practice.

As the agreement expires at the end of each calendar year, the practice can earn another $250 per patient by re-signing them.

The practice receives a further $250 annual payment for each of these patients treated in accordance with a target level of care, which is expected to involve the doctor ensuring patients receive effective follow-up treatments.

The scheme is costing $28 million over four years, including $4.7 million this financial year. It comes on the back of last year’s commitment by the Rudd government of $805 million to tackle chronic diseases amongst Aboriginal and Torres Strait Islanders.

Putting aside the obvious concern about paying doctors’ incentives for doing something they should be doing anyway, this scheme is destined to fail.

In areas where Indigenous deaths from chronic diseases are highest, such as remote and very remote locations, there are hardly any doctors. The few doctors employed by Aboriginal medical services in these areas tend to be overseas trained doctors who are not accredited by the Royal Australian College of GPs and, therefore, ineligible for any incentive payments.

Unless the government is planning on shipping in more doctors to remote areas, it is difficult to see how these incentives payments will make any difference to those Aboriginal and Torres Strait Islanders living in squalid settlements in outback Australia.

Sara Hudson is a Policy Analyst with the Indigenous Affairs Research Program at CIS and author of Closing the Accountability Gap: The First Step towards Better Indigenous Health.

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What if you got pink bats and a school hall for Christmas?

Economist Joel Waldfogel has for many years argued in favour less gift giving at Christmas. His latest book (just in time for Christmas!) is Scroogenomics: Why You Shouldn’t Buy Presents for the Holidays. Waldfogel maintains that Christmas is an ‘orgy of wealth destruction,’ which he estimates at US$13 billion a year for the United States and US$25 billion globally. His argument is that we put much less time and effort into buying gifts for others than we do buying things for ourselves. The problem is made worse by the simple fact that our knowledge of what other people want is often too limited to choose the right gift. Waldfogel points to survey evidence suggesting that Christmas gift recipients value their gifts at 20% less than the cost to the giver. This difference in valuation is pure waste, what economists call a ‘deadweight loss.’

An almost perfectly analogous argument can be made against fiscal stimulus of the non-cash variety, except that Waldfogel’s arguments apply with even more force. The government has even less knowledge about your preferences, less of an incentive to satisfy them and, to add insult to injury, sends you the bill for your ‘gift.’ The rush to push stimulus dollars out the door is similar to the mad rush to buy presents before Christmas, resulting in poor quality spending decisions. The political Santa Claus also has a rather more selective view of who has been ‘naughty’ and who has been ‘nice.’

Fiscal stimulus spending is often viewed as valuable in its own right, as if it doesn’t matter what the government spends money on. When asked whether his proposal for less Christmas gift-giving would be bad for the economy, Waldfogel says:
I’m not against spending, I’m just against spending done ignorantly by others … Although George Bush said go out and spend and other folks have exhorted us to spend at times, spending is not really a measure of success or satisfaction … When we say it is good for the economy, we can’t just look at the amount of spending, we want to think about the amount of satisfaction that we’re getting from the spending.

While Waldfogel’s argument is less applicable to so-called ‘cash splashes,’ last year’s cash hand-outs were strategically timed just before Christmas. We will never know just how much of last year’s pre-Christmas cash splash ended up in the great national stockpile of unwearable socks and ties.

Dr Stephen Kirchner is a Research Fellow with the Economics Program at the Centre for Independent Studies.

This concludes Ideas@TheCentre for 2009 – our Christmas gift to you, our supporters and readers. And if you would like to return the favour, why not consider including CIS in your Christmas gift list? Merry Christmas and Happy Holidays.

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Friday, 11 December 2009

Freedom quote of the week:

'Underlying most arguments against the free market is a lack of belief in freedom itself.'

—Milton Friedmann

Charter schools gain traction in 2009 Jennifer Buckingham
Greek tragedy for the world economy Oliver Hartwich
Girlfriends or natural socialists? Luke Malpass

Charter schools gain traction in 2009

This has been the year of the charter school (public schools run by private operators) in education policy in the United States. Federal education secretary Arne Duncan made charter schools one of the centre-pieces of the US$4.35 billion ‘Race to the Top’ economic stimulus package, requiring all states to authorise charter schools to be eligible for funding. And two of the most high profile education chiefs in the country – Joel Klein in New York and Michelle Rhee in Washington, D.C. – have built successful reforms around increasing the number of charter schools in their cities.

The policy focus on charters schools has not emerged in a research and knowledge vacuum. A number of important studies on charter school performance have been published this year. One of the most recent, released by the National Bureau of Economic Research this week, found that student achievement gains were significantly higher in Boston’s charter schools than in traditional public schools and the self-managing ‘pilot’ public schools, for both maths and English in middle school and high school. This closely follows a study of New York schools that found children who attended charter schools from kindergarten strongly outperformed their peers in public schools by the third grade, and that the gap widened as children progressed through the grades. Both these studies controlled for selection bias and student characteristics.

While these studies had large positive results, this is not uniformly true of all charter schools. This year’s meta-studies such as the CREDO and RAND studies demonstrated the variability in results from individual charter schools across the country. Some charter schools do exceptionally well, while others are barely better than their neighbouring public schools, and some worse. Part of this variability is due to the newness of many charter schools, a factor overlooked in much of the commentary about the CREDO study in particular, but some of it is to do with quality.

Fortunately, researchers are also gradually building a picture of which charter schools are effective and why. The characteristics of the best charter schools, which all but eliminate the achievement gap between white and black students, include: high flexibility in staffing and budgeting, allowing schools to lengthen the school day, and intensifying the learning program; explicit teaching; strong discipline; and robust accountability measures for performance. Forward thinkers like Noel Pearson have been looking to these gap-closing schools for inspiration to improve education for Indigenous children in Cape York. Education bureaucrats would be well-advised to do the same.

Jennifer Buckingham is a Research Fellow with the Social Foundations Program at the Centre for Independent Studies.

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Greek tragedy for the world economy

Just when many thought the global financial crisis was over, it re-emerges with a bang. This week, Greece and Spain both had their credit ratings downgraded. Standard & Poor’s changed Spain’s outlook from ‘stable’ to ‘negative.’ For Greece, the news was even worse: Fitch revalued Greece’s creditworthiness to BBB+, just a few steps above junk status.

Dramatic as these developments sound, they are hardly surprising. When Greece was allowed to join Europe’s Monetary Union in 2002, it benefitted enormously from the Eurozone’s lower interest rates. Unfortunately, the Greeks did not use this opportunity to consolidate their finances. Instead, they took it as an invitation to run even higher deficits.

Only in one year, 2006, was Greece able to comply with the EU Growth and Stability Pact, which sets a budget deficit limit of 3% of GDP. Following the financial crisis, this deficit has now ballooned to 12.7%. At 121% of GDP, Greece’s public debt is much larger than its economy, making it the most indebted country in the European Union.

Australians could be forgiven for thinking that Greece’s problems are those of a small, faraway country. But they matter for at least two reasons. First, the GFC has demonstrated how interconnected the world economy has become. There are no faraway places anymore. Second, the Greek troubles could be a harbinger of much worse. It is only a matter of time before one of the world’s other sovereign debt time-bombs detonates.

That even Greece could trigger a financial domino effect is not least due to its membership of the Euro currency. There is no political way the other Euro member states could let the Greeks go under. Having just supported their banks, French and German taxpayers may now have to bail out a whole country. This will have implications for the Euro and economic stability, generally. It could even break the European Union with unforeseeable consequences.

Whether Greece will be the next country to declare bankruptcy is by no means certain. Other hot contenders are the Baltic states, Spain, Dubai, Ireland and, threatening even greater disruption, Japan and Britain. US public finances hardly look reassuring, either.

There is a real possibility that some countries have overstretched themselves so much that they cannot service their debt in the near future. It now looks more like a question of ‘when’ rather than ‘if’ that will happen. We are anxiously awaiting the next act of this Greek tragedy.

Dr Oliver Marc Hartwich is a Research Fellow at the Centre.

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Girlfriends or natural socialists?

Ever heard the tired old cliché about women always wanting a man they can change, and men always wanting a woman who will not?

Clichés are often lame but often carry some truth, which is why they exist.

All you men out there, remember this cliché when you receive Christmas presents from your beloved significant other. Also consider the following: does the Christmas present that your girlfriend got you reflect your tastes and preferences?

The truth is that it may not. It might not reflect the way you behave, the way you project yourself to society, or even the way you feel. But it might reflect how your wife or girlfriend wants you to be viewed or who, in fact, she wants you to be.

Maybe she will give you a hat to replace your old sweaty but personalised one. Perhaps a new wallet to supersede the daggy one that always embarrasses her. Maybe it’s a pair of new, longer shorts to replace your favourite university rugby stubbies.

The message is undeniable: A man is something that can, and should, be improved upon – by a mixture of carrot and stick, if necessary.

This is, coincidentally, the same view the nation’s politicians and bureaucrats seem to hold.

So much for the crooked timber of humanity! Our fairer companions are not always interested in that – some individualism is of course important, but remaking the man means turning him into a finely varnished piece of woodwork.

And that is why girlfriends have socialistic tendencies. It might begin with just a new wallet, a ban on stubbies, a haircut, or strong hints about personal hygiene, beer consumption and stomach size. But it signals a rejection of a man as his own fallen self and an attempt to ‘fix’ him and remake him anew.

Having said all that, you choose a girlfriend, she makes you a better person, and she improves your quality of life. The government does not necessarily do the same. The difference between governments and girlfriends is this: With the latter, it’s voluntary coercion. With the former, it’s just coercion.

Merry Christmas, and enjoy your presents from the fairer sex!

Luke Malpass is a Policy Analyst at The Centre for Independent Studies.

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Friday, 4 December 2009

Freedom quote of the week:

'Freedom is a fragile thing and is never more than one generation away from extinction.'

—Ronald Reagan

Indigenous health suffers from a lack of accountability Sara Hudson
Chinese appeasement irks Indians John Lee
New Zealand 2025 Luke Malpass

Indigenous health suffers from a lack of accountability

Given the abysmal health of Aborigines and Torres Strait Islanders living in Indigenous communities, no one disputes the need for improving health services.

Crowded living conditions contribute to high rates of infectious diseases such as rheumatic fever, nephritis and trachoma, normally found only in Third World countries.

In the last 15 years, Commonwealth funding for Indigenous specific health programs has increased by nearly 400% with no appreciable improvements in health outcomes. But addressing the health problems facing Indigenous communities requires more than just increased funding.

Indigenous people in Australia have a dual health care system – along with mainstream medical services such as GPs and hospitals, there are state and territory run health clinics specifically for Indigenous patients, and Aboriginal Community Controlled Health Services (ACCHS).

Funding is provided through a range of different health programs, which are delivered in so many conflicting ways it is not surprising that there are service gaps in some areas and duplication of services in others.
By neglecting to target resources, consult with communities, or evaluate the various health programs, the government is abdicating its responsibility to provide decent health care to Aboriginal and Torres Strait Islanders.

Commonwealth attempts to improve the service delivery of primary health care to remote communities has focused on strengthening and expanding the number of ACCHS. But this has had a limited effect on Aborigines and Torres Strait Islanders living in remote communities, as most ACCHS are located in cities and towns.

Only half of the 200 or so ACCHS meet their financial reporting requirements to the Office of the Registration of Indigenous Corporations, with few consequences applied for those who don’t. This leniency has resulted in financial mismanagement, insolvency and even fraud.

Managing overall funding and coordinating the delivery of programs could be done by following the National Health and Hospitals Reform Commission’s (NHHRC) recommendation of a National Aboriginal and Torres Strait Islander Health Authority (NATSIHA) to pool disparate funding streams. But greater transparency cannot be achieved without reporting how patient outcomes are related to the cost and quality of services.

Increased and better reporting by ACCHS has been the subject of numerous reports for well over a decade. Organisations failing to adhere to reporting requirements must be held accountable otherwise the status of Aboriginal health will never improve.

Sara Hudson is a Policy Analyst with The Centre for Independent Studies. Her paper Closing the Accountability Gap: The First Step towards Better Indigenous Health was released this week.

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Chinese appeasement irks Indians

President Barack Obama’s choice of Indian Prime Minister Manmohan Singh as his first state visitor last week was meant to be about reassuring New Delhi that Washington intends to build on the strategic partnership between the two countries that blossomed under George W. Bush. But after Obama’s much criticised trip to China, the meeting was largely about repairing the damage and reassuring New Delhi that Obama will be as good a friend to India as under Bush.

Why are the Indians upset? Obama’s supporters admit that the administration appeared ‘conciliatory’ towards the Chinese. His detractors argue that by treating China as an equal partner when it is not yet one, he appeared ‘weak.’

As far as New Delhi is concerned, the joint US-China communiqué strikes at the heart of Indian strategic sensitivities. China seems to have got something it desperately wants – at India’s expense – without offering anything in return.

By prematurely raising China’s profile and offering it a central role in working with Washington to promote peace and stability in South and Central Asia, the United States has added to India’s insecurities. India sees China’s role in these regions as destabilising and insidious. China has been attempting to distract India with land-based disputes by offering diplomatic, military and nuclear support to Pakistan while Beijing extends its influence in South Asia. And it sees US appeasement of China as America’s inadvertent blessing to continue distracting India.

Obama seems to have underestimated the long-standing regional tensions when he casually offered to China ‘the fundamental principle of respect for each other's sovereignty and territorial integrity.’ This seems innocuous except for the fact that China has fundamental disputes with India (as well as with Russia, Japan and Southeast Asian countries) as to what constitutes Beijing’s ‘sovereignty and territorial integrity.’

Words matter. ‘Acknowledging’ China’s territorial claims is one thing. Respecting them is another and should be withheld until the disputing partners resolve the issues.

Taking a page out of the Harvard Negotiation Project’s Getting to Yes manual is not the best way to deal with the Chinese. The US-China relationship might be the most important in the world, but President Obama must learn that America cannot ‘manage’ China without help from friends and allies. 

New Zealand 2025

What will the world look like in 2025? Will it be like The Jetsons with hover cars and spaceships to get around? Or will it be the same as today but with slightly faster Internet connections?

The National led government in New Zealand decided not to have great expectations of the future: they just want Australia’s living standards.

New Zealand’s GDP per capita is about a third less than Australia’s. For an average family of four, that gap is worth about $NZ64,000 a year. This gap has seen a net 260,000 New Zealanders move to Australia permanently in the past decade.

To this end, the government created the 2025 Taskforce, led by former RBNZ Governor and former leader of the opposition Dr Don Brash, to find ways to improve New Zealand’s economic prospects.

In its report released on Monday, the taskforce advocated the sound policies centred around reducing government expenditure, which had increased by a whopping 45% in the past five years, by picking fewer winners and reducing government involvement in individuals’ lives.

This would be achieved by a greater reliance on market mechanisms and funder/provider splits in the provision of health, education, and certain social services. It called for a rethink and minimisation of the role of government, and to drop the top rate of income tax from 38 to 20%.

New Zealanders mostly agree our economic performance has been woeful for a long time. This tide was stemmed somewhat with reforms of in the late 1980s and early 1990s, but the poor performance continues.
Instead of using its popularity to introduce the Taskforce’s tough but much needed practical solutions, the Key government decided to play it safe. In calling the recommendations ‘too radical,’ the government has conceded that it would rather give up on growth than raise living standards.

So while 2025 might bring some Jetsonesque technological advances, it is increasingly unlikely that New Zealanders will be able to afford them. As the world moves forward, Kiwis remain stuck in reverse gear.

Luke Malpass is a Policy Analyst with the Centre’s New Zealand Policy Unit.

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