Ideas@TheCentre – The Centre for Independent Studies

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.

Public health preview

Helen Andrews

07 August 2015 | Ideas@TheCentre

ideas-image-150807-1It’s always good to have a look-in when public health groups have big get-togethers, because the policies they float at their conferences have a way of turning up in party platforms later on.

The forum held in Melbourne last week by the Victorian branch of the Public Health Association of Australia attracted heavy hitters from Premier Daniel Andrews’s state government as well as the opposition. Parliamentary Secretary for Health Mary-Anne Thomas was there, as was the Shadow Minister for Health, Mary Wooldridge and Greens health spokesperson Colleen Hartland.

Of the wish-list items discussed, two that were roundly endorsed by the panel were limits on promotion of alcohol in sports and a ban on smoking in all outdoor eating areas. Regarding the latter, the Greens representative said, “It should just happen, I don’t understand why it doesn’t.” The Liberal representative replied, “I completely agree.”

In the case of sports advertising, Wooldridge voiced her support for “sustained investment” to achieve sporting environments free of alcohol promotion. Advocates in the room went further, according to a Crikey reporter who was present. They called for a government “brave enough” to ban such ads outright.

The language of “It should just happen, I don’t understand why it doesn’t” is characteristic of the way many people in public health think. These are the nannies who don’t think voters can be trusted to choose what to have for lunch, much less what their government’s policies should be.

Contrary to what the activists in the room suggested, banning promotion of alcoholic drinks-legal products enjoyed by millions of sports fans-would be a step too far. If this policy finds its way onto the political agenda the way so many of their previous ideas have, then the day may soon be coming when citizens with common sense will need to stand up and say so.

Chinese stock market: To eat or not to eat the cake?

Patrick Carvalho

07 August 2015 | Ideas@TheCentre

ideas-image-150807-2China’s authorities are desperately attempting — and failing — to intervene in its stock market to prevent a much-needed and rational price correction.

The main reason is politics, not economics.

China needs to deepen its market-oriented reforms to maintain a sustainable economic growth path. Yet, easier said than done. Beijing is aware of the need to move from a state-based investment economy — which (over-)invests roughly one in every two dollars produced — towards a more consumption-based economy. The transition is not seamless, and has to go through financial liberalisation (including free floating its national currency).

Nonetheless, wary of past troubled experiences of East European countries and Asian tigers in the 1990s, Chinese leaders are reluctant to move forward, as proven by recent stock market activity.

Despite declining growth rates and ever-increasing international risks, Chinese investors (especially ordinary people without any knowledge of share valuation) jumped into stock markets to capitalise on their savings. The result was an exuberant increase in stock market valuation, more than doubling the Shanghai Composite Index in the last 18 months (see Chart above).

When the recent day of reckoning came, shares fell by a third, wiping out some $3.5 trillion in wealth. This seems a large number, but not when given the previous steep increase in shares and properly put into perspective: less than 15% of household financial assets are allocated in the Chinese stock market, which undermines the contagion to the wider economy.

Instead of letting the much-needed correction to take place, Chinese authorities acted – yet in the wrong way: 90% of all shares listed on Chinese exchanges were suspended or halted; IPOs were prohibited; short-selling outlawed. Also, a share-buying scheme backed by central-bank cash sent the wrong signal for Chinese moms-and-pops that buying shares is a one-way bet.

China needs to deepen economic liberalisation to avoid a sclerotic financial market. For instance, setting free interest rates on bank deposits might be an attractive alternative for ordinary Chinese to park their savings instead of risking on complicated financial waters.

Filling the speaker's chair

Trisha Jha

07 August 2015 | Ideas@TheCentre

ideas-image-150807-3This week we bade farewell to Bronwyn Bishop, who has occupied the Speaker’s chair since the last election.

Speculation is rife about who might replace her as the presiding officer of the House of Representatives. But first it’s worth reflecting on what the speaker does and how the role is best performed.

Characteristic of our ‘Washminster system’, Australia has a hybrid form of speakership. The Speaker does not take an active, partisan role in proceedings – unlike their American counterpart – but nor are they required to be so independent and impartial that they resign from their political party, as they do in the UK. Instead, convention means speakers do not generally attend party room meetings; a convention with which Ms Bishop did not comply.

Speakers are usually drawn from the government party and, perhaps as a result, opposition members are far more likely to be ‘sin binned’ (suspended from the chamber for a period). Whether this practice raises the standard of parliamentary behaviour or merely serves as a bit of sport for an unoccupied opposition backbencher is an open question.

Speakers should take the job seriously, and exercise prudence and impartiality. Names being mentioned as contenders for the chair include Phillip Ruddock, Tony Smith, Ross Vasta, Russell Broadbent and Andrew Southcott and the Deputy Speaker Bruce Scott.

But perhaps more than prudence is needed to keep parliamentary behaviour in order, as even a cursory glance at proceedings will show.  And with WA Liberal senator Linda Reynolds saying it would be nice if a woman three her hat into the ring, I’d like to put forward some alternative candidates.

Dame Edna Everage: Her formidable and steely glare over those rhinestone-encrusted spectacles is bound to keep the possums in line. 

Lee Lin Chin: The veteran newscaster’s skills in memorising bulletins would undoubtedly come in handy for getting across Standing Orders. Plus, she’s no stranger to use of the steely glare when needed.

The entirety of the Matildas: Australia’s world-ranked soccer team is no pushover. And they could probably scissor-kick a ball with guided-missile accuracy right into the unruliest of back benches when needed.

But even these candidates may not be enough to bring gravitas back into the House, and lead to an improvement in parliamentary behaviour. Everybody’s focus is on the Speaker’s chair right now. But our politicians should also take a long, hard look at themselves.