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.

Big data and welfare

Simon Cowan

09 February 2018 | Ideas@TheCentre

The idea of big data in the welfare system has come to be associated with the reconciliation of ATO pay data with social security income, and the resulting teething problems of #notmydebt. However, relatively little consideration has been given to how big data might shape government’s ability to better target the welfare system.

One of the challenges in welfare policy is the fact that every recipient’s circumstances — and consequently, needs — are different. Welfare has always been required to trade-off between simplicity (fewer payments) and better targeting. As the system becomes more streamlined, it becomes easier to administer but increases the risk that certain recipients will be poorly served.

As tempting as it may be for believers in small government to simply dismiss these concerns on the basis that keeping welfare lean and mean is the best approach, this would be a mistake. Simplifying the system by broadening the number of recipients of a payment means that even small increases in the base rate can have serious budgetary impacts.

Complexity may be a second-best option if the alternative is that the size of the welfare state increases.

For example, if the parliament accepts the argument that long term recipients of Newstart are struggling to live on the payment, and decides to increase the rate, would it be better to restrict the payments to those who have been unemployed for more than 12 months or to give it to everyone?

Could we go further and adjust the rate of Newstart on the basis of private savings? Could it reflect cost of living differences in different parts of the country? Could government use skill shortage information to direct training obligations?

Individual case workers could do this for a handful of recipients. However the cost of paying people to manage the caseload created by complexity is prohibitive. Even monitoring current compliance obligations currently is hit and miss.

However, if big data can replicate this role it may fundamentally change how we see the welfare trade-off. As we become more sophisticated in processing large amounts of data, we could learn how to target welfare on almost an individual level at a cost we could afford.

Gonski for Health won’t save public hospitals

Jeremy Sammut

09 February 2018 | Ideas@TheCentre

The debate over the rising cost of private health insurance has dominated the headlines so far this year.

However, the focus this week has also shifted to the public health sector. This follows the leaking of COAG papers that indicate the Turnbull government will play hardball with the states over a new five-year health funding agreement.

The leak of government’s so-called ‘tough line’ suggests the stage is being set for a repeat Gonski-style campaign; this time over funding for public hospitals rather than for public schools.

A ‘Gonski for Health’ — backed by state governments, the AMA, and the powerful nurses and other health sector unions — may well successfully extract a few billion dollars more for state hospital systems that already consume in excess of $40 billion of taxpayer’s money annually.

But regardless of whatever additional federal funding is provided, this will not make public hospital systems sustainable in the long run.

Because — to paraphrase the words of a former state treasurer (uttered privately after he had safely departed politics) – “No government, federal or state, has enough money to fund the projected cost of ‘free’ hospital care in an ageing Australia.”

The scale — and political impossibility — of the funding challenge is suggested by the policy previously proposed to the NSW government: a 50% increase in the rate of the GST from 10% to 15%; which would represent the largest peacetime tax hike in Australian history.

The blame game between the federal and state governments over hospital funding is therefore likely to intensify in coming years, once financial realities bite, and when states are forced to more severely ration access to hospital care — via waiting times — to ease the health cost pressure on their budgets.

There are no easy financial or political solutions to the ‘hospital funding crisis.’

But if policymakers want to truly fix these problems they must exercise some enlightened foresight — and systematically tackle the difficult issues surrounding Medicare and federal financial relations for the reasons that are stated here.

Modest bid for Muslim trade

Peter Kurti

09 February 2018 | Ideas@TheCentre

Officials at DFAT have demonstrated once again that bureaucrats living in the Canberra bubble can sometimes surprise us by being ahead of the views and values of middle Australia.

Someone at DFAT had the idea of sponsoring an exhibition featuring an Australian company manufacturing ‘modest fashions’ for Muslim women. DFAT then took the exhibition to Malaysia.

The demand for Islamic clothing is said to be booming. Aussie designer Aheda Zanetti, who invented the ‘burkini’, has her eye on selling to Muslim women in the lucrative Malaysian market.

DFAT says it expects the Muslim modesty market to increase by more than 7% by 2021 — and is, of course, equally keen to promote a wide range of Australian designs and textiles.

Promoting trade is a key task of DFAT and supporting Australian manufacturers and exporters is vital for the growth of our economy. And it’s great that the work of Aussie designers is also encouraged.

Yet DFAT’s decision to sponsor the fashion exhibition — called Faith, Fusion, Fashion: Muslim Women’s Style in Australia — drew stern feminist rebukes ranging from Caroline Overington to Peta Credlin.

The most notable critic was former PM Tony Abbott. “It’s not our way,” said Abbott. “We want Australians to be free and open.” And so they are. But some Australian Muslim women also prefer to adopt more modest forms of dress in public.

Muslim modesty fashions will never become the style of choice of mainstream Australian women. But some Aussies who happen to be Muslim women do prefer to adopt that fashion style.

And when an Aussie fashion designer shows Muslim women how they can be both contemporary and modest, we should embrace it as part of our open multicultural society — and promote it.

After all, the DFAT exhibition was destined for Kuala Lumpur and not Klosters. Muslim women in Malaysia are going to buy their clothes from somewhere: why not encourage it to be from Australia?