| |
Click on the date below to see the corresponding issue of ideas@thecentre:
Friday, 5 February, 2010
Friday, 12 February, 2010
Friday, 19 February 2010
Friday, 26 February 2010
To read ideas@thecentre from the month of January 2010 click here
Follow The Centre for Independent Studies on Facebook:
Friday, 26 February, 2010
Freedom quote of the week:
'If it moves, tax it.
If it still moves, regulate it.
If it stops moving, subsidise it.'
-Attributed to former US President Ronald Reagan
The pretence of knowledge Greg Lindsay
Groundhog Day for new housing Sara Hudson
Stimulus begets stimulus Luke Malpass
The pretence of knowledge
The ill-conceived and rushed Commonwealth insulation program adds to a very long list of recent government policy failures. At the federal level, Grocery Watch, Petrol Watch, ‘Green’ loans, and Indigenous public housing all come to mind.
Turning to the states, the piece de résistance is the on and off Sydney Metro and the general dissarry that surrounds transport planning in NSW. I suspect commuters in the northwest of Sydney will be waiting a long time to ‘hop on the underground’ to get from Baulkham Hills to the City.
Overseas, a Blair government program designed to ‘to cut shameful teenage pregnancies’ that cost hundreds of millions of pounds has comprehensively failed. Teen pregnancy rates in the UK are now the highest in Western Europe.
We are never surprised when governments can’t make their grand schemes work. Governments can’t make our fuel cheaper (unless they cut excise tax) and will never do a better job building houses than private individuals who know exactly what is best for them. And anyone who thinks bureaucrats can curb the promiscuity of the welfare state-dependent British underclass is truly deluded!
But what is depressing is that governments increasingly struggle to deliver the basics of good governance, such as roads and trains. The problem is that we have gone beyond the tipping point in the relationship between the citizen and the state. The more governments have tried to do, the more they have overreached their capacity and become distracted from their primary role, which is establishing the institutional framework in which freedom and prosperity can flourish.
Today, nobody seriously doubts the superiority of the private over the public sector as a provider of services to the community. Central planning and democratic accountability is no substitute for competitive market disciplines. But still governments love to fiddle and interfere under the pretext of always wanting to ‘help.’
The motives are usually political. But there is also a fundamental conceit not yet dead in the political class that makes them believe that they are always right and always know best. The current Australian Prime Minister has a confused view of some, if not all, of F.A. Hayek’s ideas. But Hayek put his finger on the point his 1974 Nobel lecture address ‘The Pretence of Knowledge’:
If man is not to do more harm than good in his efforts to improve the social order, he will have to learn that in this, as in all other fields where essential complexity of an organized kind prevails, he cannot acquire the full knowledge which would make mastery of the events possible.
The full text is here. It is basically a warning to politicians to be humble and to realise what they don’t know about what they are about to do before unleashing their plans on civilisation. Hayek called this ‘men's fatal striving to control society,’ a phrase that has an eerie echo in light of the pink batt fiasco.
Greg Lindsay is the Executive Director at the Centre.
Top
Groundhog Day for new housing
Despite extensive consultation with communities in the Northern Territory about what type of new houses they would like as part of the government’s Indigenous housing program, it appears that the government is still following the same old tired designs for the construction of houses.
Two years ago, federal Indigenous Affairs Minister, Jenny Macklin, promised ‘a makeover with a difference’ as part of the government’s $672 million ‘strategic’ Indigenous housing program (SIHIP).
NT Housing Minister Rob Knight said that design teams would look at the territory’s outdoor lifestyle and climate when designing houses.
But as Nigel Scullion, Shadow Minister for Indigenous Affairs, pointed out in a recent media release, the new houses built under SIHIP look surprisingly similar to the old ones.
In the past, houses in remote NT communities were regularly criticised as being designed by white bureaucrats with no understanding of the way in which Aborigines live and no consideration for the 40 plus degree temperatures. ‘They are sweat boxes ... you wouldn’t put your dog in there during the heat of the day,’ said one government official in The Age.
Yet, it seems the two new houses built in Wadeye have not been built according to local residents’ wishes. During the extensive consultation process, residents repeatedly said that they wanted large verandas; outdoor living areas; and toilet access from outside, but these three design features have not been included.
Pictures of one of the new houses taken by Nigel Scullion as part of his press release show an ugly grey rectangular box, with a bright yellow metal awning. These houses look almost identical to the ones they were meant to replace.
Residents of existing homes have also been ignored by the government, with recent refurbishments in Ali Curang falling far short of their expectations. Houses remain filthy and incomplete. New stainless steel benches have been installed but not much else, prompting concerns that the houses would fail to meet the standards of the Residential Tenancies Act.
Macklin has come out in defence of these refurbishments, saying that they were only meant to include new kitchens and bathrooms – in contrast to her promise two years ago for a ‘makeover with a difference.’
It seems Aboriginal people have been duped again.
Rather than continuing to look to the government to meet their housing needs, residents of remote Indigenous communities would be better off copying the residents of the Ilpeye Ilpeye town camp near Alice Springs. There, traditional owners have allowed the Australian government to acquire their land and change the community lease to freehold title. This change will enable residents to become home owners and perhaps finally kiss the government and their broken promises goodbye.
Sara Husdon is a Policy Analyst at the Centre.
Top
Stimulus begets stimulus
When the government’s insulation stimulus package was being rolled out last year, who would have guessed that it would be suddenly canned for contributing to deaths, house fires, and electrified roofs?
Suspending the insulation program has landed the Rudd government with an unpleasant political problem: business closures and layoffs. The government dished out taxpayer money to create artificial demand and ended up creating artificial jobs in very real companies, which now have to lay off very real people.
Never one to admit defeat, on Wednesday, the Prime Minister announced a $41.2 million transitional job support package for those in the industry he and his government have falsely created. ‘If we don't get your businesses up and running again soon, we understand that it flows through to transport, that it flows through to the fast food business,’ he said. According to The Australian, businesses will be offered funding to keep workers on until June when a new package begins.
Let’s get this clear: we have a ‘transitional’ insulation stimulus package to replace the dangerous, scrapped insulation stimulus package until a new insulation stimulus package starts in June. It makes a mockery of the stimulus policy whose core promise was ‘shovel ready jobs.’
Quite why a new insulation policy ‘package’ is needed is a mystery. If it was to stimulate the domestic economy, it comes about a year too late. And even a year ago it was really a counterproductive waste of money – delivering woeful energy efficiency returns for money spent.
Contrary to last year’s gloomy predictions, the Australian economy did not fall off a cliff. Fiscal and monetary policies are now working against each other. With the fiscal stimulus packages, the government has the foot firmly on the accelerator at the same time that the Reserve Bank has strongly signalled it will hit the brakes through higher interest rates.
Stimulus and ‘job schemes’ inevitably create jobs that have little long-term future, and can end up being far more destructive on the very industries and workers they are meant to protect.
Perhaps a new term should enter the Australian political lexicon: progressive interventionism.
Luke Malpass is a Policy Analyst at the Centre.
Top
Friday, 19 February, 2010
Freedom quote of the week:
'Left-wing politicians take away your liberty in the name of children and of fighting poverty, while right wing politicians do it in the name of family values and fighting drugs. Either way, government gets bigger and you become less free.'
Harry Browne
Irrational Medicare system delivers inverse health care Jeremy Sammut
Nuclear's global renaissance Oliver Marc Hartwich
Politicians no friends to home borrowers Stephen Kirchner
Irrational Medicare system delivers inverse health care
This week, two health stories from different states point to some fundamental problems with Medicare.
In Victoria, The Age has reported on a convicted conman investigated twice in recent years for suspected Medicare fraud who continues to bill the system for hundreds of thousands of dollars.
Meanwhile, the Daily Telegraph has alleged that the Federal MP for the NSW Central Coast seat of Robertson, Belinda Neal, offered (though she strongly denies it) to have a local Labor Party branch member moved up the waiting list for hip-replacement surgery in return for supporting Neal in a bitter pre-selection contest.
The extent to which Medicare may be being ripped off is unknown. Incredibly, healthcare providers are not obliged to hand over their billing records to investigators, and one in five who are audited refuse to do so.
The federal government spends about $14 billion a year on bulk-billed general practice and other allied health services, or about half the amount state and federal governments spend on Australia’s 750 public hospitals.
Expenditure on this part of the Medicare program (which all governments treat as a political sacred cow) is uncapped and demand-driven. Unquantifiable amounts of health dollars are being wasted due to not only fraud but also overuse of bulk-billed services consumed without upfront charges and co-payments.
By contrast, public hospital budgets are capped and this part of the system is supply-driven. Budget limits determine services levels, and public hospital care is rationed not only by elective waiting lists but also by emergency patients waiting for hours, sometimes days, before a free hospital bed is found.
Australia’s ‘free and universal’ public health system is therefore well-described as an irrational ‘inverse insurance system.’ The worried well can see the doctor for ‘free’ an unlimited number of times although their health needs are mostly minor, leaving taxpayers to pick up the ever-increasing bill. But when medical problems are most serious, an ‘inverse care law’ applies, and patients are forced to queue to receive hospital treatment.
The diminishing numbers of true believers who think Medicare the unblemished jewel in the crown of Australian social democracy are truly deluded. Medicare is not free, let alone universal, and beyond the cost to taxpayers, the highest price is being paid by the truly sick who are routinely denied timely access to essential hospital care.
Dr Jeremy Sammut is a Research Fellow at the Centre for Independent Studies.
Top
Nuclear's global renaissance
The announcement by US President Barack Obama this week to provide federal loans for new nuclear power stations signals a revival of this technology. This may have implications for Australia, too.
For the United States, the President’s push for a new generation of nuclear power plants did not come a day too early. There are about 100 nuclear plants operating in the United States. Yet, the last one was built more than 30 years ago. Originally constructed for operating periods of just over 40 years, most of the existing plants had already been approved for a total of 60 years. Experts have been discussing a further extension to 80 years.
However, at some stage such lifecycle extensions will reach a limit and, thus, the Americans urgently had to make a decision in principle whether to continue with nuclear power. Nuclear contributes about 19% to US electricity production. It’s a substantial amount of energy, and the Obama administration has apparently concluded that currently there is no viable, let alone a better, alternative than building a new generation of nuclear stations.
Predictably, environmentalists have criticised the Obama’s decision. Yet, it is precisely the green lobby that should welcome the drive towards nuclear power if they are concerned about the use of fossil fuels. Despite all the talk about renewable energies such as solar and wind, it will take decades until these alternatives would be able to provide reliable and affordable base load power. In the meantime, nuclear power can be the bridge towards the age of renewable power.
Of course, environmentalists never tire to warn of the dangers of nuclear power generation. However, the risks are overstated. The two worst accidents in nuclear power’s history happened at Three Mile Island and at Chernobyl. Fortunately, no one was killed at Three Mile Island, whereas at Chernobyl an estimated 56 people died. Tragic as this had been, there are other industries with far worse safety records. Yet nobody would shut down road transport, coal mining, or the chemical industry. In any case, today’s generation of nuclear reactors simply cannot be compared with the shoddy standards used by the then Soviet Union.
More and more countries are re-embracing nuclear power. In China alone, 21 new nuclear plants are being built. Worldwide, the figure of new reactors in the pipeline is 56, so there is a good chance that the nuclear industry will enjoy a global renaissance over the next decades.
With giant uranium reserves under our feet, Australia should seriously consider whether it wants to be part of the new nuclear age or content itself with just providing nuclear fuel to others.
Dr Oliver Marc Hartwich is a Research Fellow at the Centre for Independent Studies.
Top
Politicians no friends to home borrowers
Many analysts were surprised by the Reserve Bank’s decision to keep interest rates steady at its February Board meeting. In fact, the decision was well-flagged in a speech by RBA Deputy Governor Ric Battellino in December last year. The Deputy Governor noted that market-determined interest rates had increased by around one percentage point relative to the official cash rate over the last two years, reducing the need for increases in official interest rates. The RBA calibrates changes in official rates to changes in lending rates to achieve its desired level of credit restrictiveness. He also noted that ‘the margin on variable housing loans is much the same today as it was at the start of the crisis.’ The big increase in lending margins has been in relation to business lending, not mortgages.
This puts the bank-bashing of politicians and others into proper perspective. Politicians have been quick to condemn banks for movements in mortgage interest rates in excess of movements in the Reserve Bank’s official cash rate. Treasurer Wayne Swan continues to maintain that there is ‘no excuse’ for interest rate movements in excess of movements in the official rate. Yet, it is these very movements in bank lending rates that saved borrowers from an increase in official interest rates in February. Bank-bashing is just a political pantomime that has no relevance to the actual cost of borrowing to consumers.
At the same time that politicians have been bashing the banks, they have also been arguing for the tighter regulation of bank capital in international fora such as the G20. RBA Governor Glenn Stevens spelled out the implications of this in a speech last year: ‘on the assumption that most of these regulatory changes go ahead, one effect will presumably be to make the process of financial intermediation more costly.’ It is politicians who are most likely to drive future increases in the cost of borrowing, not the banks.
Dr Stephen Kirchner is a Research Fellow at the Centre for Independent Studies.
Top
Friday, 12 February, 2010
Freedom quote of the week:
‘Society exists for the benefit of its members; not the members for the benefit of society.’
—Herbert Spencer
Indigenous people need less not more discrimination Jeremy Sammut and Sara Hudson
Strange new world Oliver Marc Hartwich
Peak chocolate? Helen Hughes
Indigenous people need less not more discrimination
The shocking state of child protection services in the Northern Territory has been revealed by a leaked 2007 report by Dr Howard Bath which details numerous cases of Indigenous children failed by the system.
The report, which the NT government refuses to release, shows Indigenous children are at particular risk due to the ‘Aboriginal child placement principle.’ Placing at-risk children with family members or other Aboriginal carers to ensure they remain connected to Indigenous culture is standard practice in every state and territory.
The problem is that well-intentioned ‘anti-racist’ policies are discriminating against Indigenous children and resulting in worse outcomes. In the Northern Territory, basic child protection considerations have been set aside. Most ‘kinship’ carers are not even subjected to background checks by the Department of Families and Community Service. As a result, children are often taken out of one dysfunctional home and placed in another abusive situation. What ‘culture’ are children learning in these environments?
Retired children's court magistrate Sue Gordon has called for a national review of the Aboriginal child placement principle. She maintains that child protection services should not hesitate to place removed children in non-Indigenous foster care and should not be intimidated by fear of being labelled racist and creating another stolen generation.
Gordon’s call for child safety to trump ‘politically correct’ considerations comes as Alastair Nicholson, the former Chief Justice of the Family Court of Australia, has indulged in the kind of cheap shot, race-baiting politics that Indigenous policymaking can do without.
Nicholson has branded the Rudd government's plan to extend income management of welfare payments into mainstream Australian as nothing more than a thinly veiled attempt to perpetuate racial discrimination against Indigenous Australians.
This is a bizarre argument – how is it racist to treat Indigenous and non-Indigenous Australians alike? As the NT child protection revelations prove, many vulnerable Indigenous children would benefit greatly from a bit less discrimination and a bit more equality, just as the federal government is proposing in relation to welfare quarantining.
Dr Jeremy Sammut is a Research Fellow at the Centre for Independent Studies. Sara Hudson is a Policy Analyst at the Centre.
Top
Strange new world
The US Super Bowl is not only a great sports event, it’s also the best showcase of the advertising industry’s creativity. To place their 30-second commercials in one of the breaks, companies reportedly fork out between US$2 million and US$3 million.
Given these prices and the huge publicity, we can reasonably assume that a lot of thought goes into every single Super Bowl ad. This makes the choice of German car maker Audi even stranger to introduce us to the strange new world of eco-fascism.
In Audi’s ecological dictatorship, people are arrested for possessing a plastic bag or an incandescent light bulb; the green police will knock on your door if they suspect you set the temperature of your jacuzzi too high. And it’s a world where drivers of gas-guzzling cars get into trouble with the eco cops – unless they drive an allegedly more fuel-efficient Audi.
Mind you, Audi is the same company that gave the world the V12 TDI R8. Its huge 373kW and 1,000 Newtonmeters of torque are just what’s needed to get to your local organic whole foods store in style.
Watching the Audi commercial, it was hard to fathom whether it was all satire or serious. But given the Germans’ obvious lack of humour, perhaps it was the latter.
Whatever it was meant to be, though, it was a chilling vision of our ecologically correct future. Or actually, it was just a small step from the present.
Westfield shopping centres have announced they would reserve special spots for hybrids in their car parks. At some Sydney bookstores, customers still requesting a shopping bag are frowned upon and have to pay extra. Airlines try to hassle their passengers into purchasing carbon certificates to make up for their sinful emissions.
And don’t forget that importing incandescent light bulbs into Australia already constitutes a punishable offence. Which makes you wonder whether sniffer dogs can actually detect the 100-watt bulbs hidden in your suitcase?
What once was a reasonable movement to protect the environment has turned into a misanthropic substitute religion. Ecology has been replaced by ecologism, and our civil liberties are being sacrificed on our behalf by self-appointed high priests of environmental correctness.
If at some stage in the future people should wonder when enviro-fundamentalism became mainstream, it was probably in the commercial break of the 2010 Super Bowl.
Dr Oliver Marc Hartwich is a Research Fellow at the Centre for Independent Studies.
Top
Peak chocolate?
Natural gas discoveries and vast LNG projects are threatening to put strong downward pressure on petroleum prices, making it difficult for alternative energy technologies such as wind, sun and electric cars to develop. This is indeed a cause for concern but masked by these developments, a rapidly developing palm oil shortage is sneaking up on chocolate eaters.
Neither China nor India, with their teeming billions, ate much chocolate in the past. Few people could afford it. In the tropics, and in the hot summers of northern China and India, there was no refrigeration to keep chocolate from melting.
Leading chocolate multinationals are now seizing on these potential markets by introducing small chocolate bars into China and India. They are greatly helped by growing numbers of refrigerators in small shops and cafes. Chinese and Indian masses are taking to chocolate just like Europeans, Americans and Australians have. Sales are through the roof. The producers cannot keep up with the demand. Research on chocolate with a high melting point is in train. Rising living standards are being translated into booming chocolate sales.
The key ingredients of chocolate are sugar, cocoa and fats. Thanks to lunatic sugar subsidies in Europe and the United States, there is no shortage of sugar, but it takes years for cocoa trees to bear, and increases in palm oil supply are seriously threatened. Although palm oil plantations have roughly the same carbon sink properties as forests, and although the trans-fat content of palm oil is far lower than of equivalent ghee, coconut and sesame oil it replaces, a new green ideology is dead set against increases in palm oil production. This is likely to become a critical bottleneck in the production of chocolate.
So enjoy the chocolate Easter egg displays coming into the shops. Prices are going to escalate. Within a few years, a chocolate Easter egg, let alone a box of Lindt Assorted Pralines, is likely to be an unaffordable luxury.
Professor Helen Hughes is a Senior Fellow at the Centre for Independent Studies.
Top
Friday, 5 February, 2010
Freedom quote of the week:
‘The proverb warns that "you should not bite the hand that feeds you."
But perhaps you should, if it prevents you from feeding yourself.'
—Thomas S Szasz
Should governments choose their critics? Andrew Norton
Obama ditches soft approach towards China John Lee
Fat kids, junk food and emotion Luke Malpass
Should governments choose their critics?
Recently, the Supreme Court of the United States struck down a law preventing corporations and unions from directly funding ‘electioneering communications.’ Citizens United v Federal Electoral Commission found that election spending bans breached constitutional free speech protections.
While the US strengthens its free speech laws, our free speech system could soon be undermined. In private talks over recent months, the Coalition and Labor have considered proposals to limit or even ban political donations and expenditure by unions, companies and non-government organisations. Only strong union opposition seems to stand between these proposals and the statute books.
An important point made in the majority Citizens United judgment is that the US Constitution does not permit the US government to ‘impose restrictions on certain disfavoured speakers.’ What these restrictions do is prejudge the issue of whose opinions should be heard in the political process. Donations bans or political expenditure controls help governments to choose their critics.
Nobody believes that all union and corporate political activity is good for the policy process. But no consensus exists on which union or corporate views should be accepted or rejected. We have free speech and democracy to consider the different perspectives on offer and to temporarily resolve contentious issues, always leaving decisions open to criticism and change. The big players prejudging issues by disqualifying rivals in the political race seriously weakens this system.
The Liberals, stung by the scale of WorkChoices opposition, want us to believe that union wealth makes the political race unfair. But should the Coalition be allowed to legally undermine unions and ignore public opinion on industrial relations, and then prohibit a loud and forceful response? Or now that the tables are turned, should employer groups be prevented from campaigning strongly against excessive union power and Fair Work Australia tribunal interference in management decisions?
The US Supreme Court’s answer to these questions is the right one: no.
Andrew Norton is a Research Fellow at The Centre for Independent Studies. His CIS paper Diminishing Democracy: The Threat Posed by Political Expenditure Laws was published in 2009.
Top
Obama ditches soft approach towards China
If 2009 was the year of treating China with kid gloves, 2010 is likely to be much more tumultuous with President Barack Obama gearing up to prove that he has the mettle to defend American interests as well as the charm that swept him into power.
Last year, Obama’s foreign policy advisors conceded that China responded to the President’s softly, softly approach with disrespect and ‘kicked him in the teeth’ over and over again, most notably at the Copenhagen Summit. With poll numbers sagging and no foreign policy achievements to speak of, he is trying to avoid being compared to previous failed Presidents such as the one-term Jimmy Carter – also a Nobel Peace Prize winner – who was seen as cerebral but naïve and weak.
Indeed, it the first month of 2010, Obama has publicly defended Google in the company’s spat with China, approved an arms package for Taiwan that includes a few unexpected military ‘extras,’ and announced his intention to meet the Dalai Lama – something that was postponed in 2009 to appease Chinese sensitivities when the Dalai Lama visited the United States. America has done more in January to stand up to and enrage China than during the whole of 2009.
Ultimately, Washington wants China to be part of the solution rather than problem on global issues: to be a ‘responsible stakeholder.’ When China fails to behave like one – which is often the case – it creates additional headaches for an America burdened by global responsibilities. From Beijing’s point of view, the ‘responsible stakeholder’ approach is cleverly designed to inhibit and restrain China’s rise and to preserve American advantages in the bilateral relationship and within the global order.
The implication: US-China tension is structural. China, and not terrorism, will likely be Washington’s primary concern in 2010.
Dr John Lee is a foreign policy Research Fellow at The Centre for Independent Studies.
Top
Fat kids, junk food and emotion
Every time you open a newspaper or watch the news, you find yourself being bombarded with the news that junk food creates fat kids, and for the crime of unleashing a childhood obesity epidemic on innocent parents and children, the fast food industry should be punished or at least have their commercial activities severely curtailed. Individual or parental responsibility plays no role; it is all the evil ‘fast food industry.’
At least this is what the concerned stakeholders (government funded lobby groups) think. However, in the never-ending competition to see who’s more publicly caring, rational discussion often gets tossed aside.
Takeaways are labelled as ‘bad,’ ipso facto those who sell them are also ‘bad.’ Disagreeing with this lands any dissenter ‘on their side’ and sees them denounced as ‘uncaring’ about poor, innocent fat, diabetic kids.
In Crikey (4 February 2010), Jane Martin from the Obesity Policy Coalition wrote an article bemoaning self regulation in ‘the fast food industry.’ She cites an advertisement for chicken nuggets/soft drink/free toy combo that Hungry Jack’s has been offering as an example of ‘the fox looking after the henhouse.’
The advertised meal may not be the healthy option. But does it make fast food chains somehow predatory and evil? No. Does it mean fast food chains are responsible for childhood obesity rates? No. Does it somehow mean parents hold less responsibility to feed their children a balanced diet? No.
The power of claims about the inherent ‘badness’ of the fast food industry lies not in the assertion but in the appeal to emotion, to good and evil, to right and wrong, of some cosmic battle between money hungry capitalists and fearless defenders of the poor downtrodden, burger-loving proles.
This plays to emotions such as compassion and fear, and it is as professional as it is effective. In both New Zealand and Australia, the heads of major obesity action groups are professionals many of whom formerly led anti-smoking groups: another good versus evil campaign.
With the ‘sin’ of smoking now largely purged from public sight, it makes you wonder which is more important: the cause or the battle against some invented goliath?
Luke Malpass is a Policy Analyst with the Centre’s New Zealand Policy Unit.
Top
|
|