Ideas@TheCentre – The Centre for Independent Studies


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.

Why we should support car workers (find new jobs)

12 July 2013

simon-cowan Unconfirmed rumours persist that Holden is looking for a massive taxpayer bailout of $265 million. This would be on top of the taxpayer bailout they received last year of $275 million. As I've argued before, corporate welfare is a waste of money and should be abolished as soon as possible.

The notional purpose of industry assistance is to protect jobs. While a strong argument can be made that this is not a proper role for government, protecting jobs is politically very popular (see the lift President Obama got from his auto-industry bailout in key battleground states in Ohio).

However, even if you believe in protecting jobs it is abundantly clear that this strategy is not working. We need to convince government to adopt a different strategy.

Protectionism may be economically irrational, but so are people at times. It's hard to point a camera to the benefits of reducing protectionism, but it's easy to generate sympathy with a crying worker outside a closed factory.

And so, while we absolutely should make the economic arguments against protectionism, we must engage with the emotional arguments as well. With thousands of jobs lost across the car manufacturing industry in the last 18 months, when judged against the criteria of 'protecting jobs,' industry assistance is clearly an expensive failure.

If government wants to help workers they should assist them transition to competitive industries. There are several reasons for doing this but I want to explain why it appeals to the pragmatist in me.

Transition planning (like in Newcastle after BHP Steelworks' closure) is as much about transitioning government away from protectionism as it is about transitioning workers to competitive industries.

Transition planning costs millions instead of billions, has a limited time frame, and distorts the market far less than picking winning industries. It can be focused more on the traditional role of government (for example, providing adequate infrastructure) and it also supports jobs directly rather than through foreign multinationals.

Transition planning involves governments focusing on assisting communities and workers by removing impediments to business and labour mobility (such as stamp duty, inadequate infrastructure or restrictive IR laws) that prevent displaced workers from finding new jobs quickly.

It is a politically saleable message that achieves the goal of shrinking government and reducing waste. It's not a panacea for all problems, and it's not ideologically pure, but at least it's a step in the right direction.

Simon Cowan is a Research Fellow at The Centre for Independent Studies.

On the trappings of power

12 July 2013

peter-saunders For the first time in my life, I attended the Wimbledon tennis championships this year. My wife entered the ballot for tickets and she hit the jackpot: Centre Court, three rows from the front. We had a memorable day.

Glancing up at the Royal Box, there was Camilla (Duchess of Cornwall), and Prince Michael of Kent… and sitting just along from them in the front row, deputy leader of Britain's opposition Labour party, Harriet Harman.

I was surprised to see Harriet up there with the royals, peering down at me, for she is a passionate egalitarian, architect of the 2010 Equalities Act. Perhaps, like everyone else, she entered the ballot for tickets last year and ended up winning the chance to buy even better seats than we did – but I doubt it. A seat in the Royal Box at Wimbledon on a day of your choosing is just one of those perks top politicians come to expect, even those who say they hate privilege. I hope she didn't have to queue too long for her strawberries.

A few days later, we spent a weekend in Bruges, the picture postcard medieval town in Belgium. In the Groeningemuseum, we were confronted by Gerard David's gruesome The Flaying of Sisamnes, painted in 1498.

Sisamnes was a judge in Persia in the fifth century BC. When the King discovered he had accepted a bribe, he was punished by being skinned alive. His son was then appointed to the judicial bench in his place, where his chair was covered in his father's skin.

David's painting depicts the judge sprawled naked across a table to which he is bound by his wrists and ankles. Five flayers go about their task methodically with knives and scissors as the King and his court (dressed in fifteenth century Flemish clothing) watch impassively. It is a deeply disturbing painting.

It was commissioned to hang in the Aldermen's chambers in Bruges Town Hall, as a daily reminder to the town's leaders of what happens to those who abuse the privileges of office.

Just for a moment, gazing at that picture, I fantasised that we too might commission such works to hang, say, in the Palace of Westminster where they might prompt our politicians next time they are filling in their expenses claims, or voting to award themselves another pay rise.

Or perhaps, like the Romans, we could employ someone of the lowest rank to stand behind our leaders, whispering into their ear at their moments of greatest triumph: 'You are not a god, just a mortal human being'.

These whisperers could accompany our political leaders when they go on jaunts to places like Wimbledon. They could sit in the row behind them in the Royal Box whispering into their ear: 'Remember everyone else paid for their tickets.' Or: 'Remember you imposed the Equalities Act on all those people down there.' Or even: 'I think I hear the flaying team sharpening their scissors.'

Peter Saunders is a Senior Fellow at The Centre for Independent Studies. This article originally appeared in Civitas.

From parenting payment to prostitution?

12 July 2013

andrew-baker News stories are emerging that the government's reforms to parenting payments have seen single mothers turn to sex work to help make ends meet.

The reforms saw around 80,000 single parents (mostly women) of school aged children being moved off the $341 per week Parenting Payment and onto the $268 per week unemployment benefit Newstart Allowance (before taking into account Family Tax Benefits, the schoolkids bonus, child care benefit and other payments). This measure will save taxpayers more than $700 million over four years.

Generally, people on unemployment benefits like Newstart Allowance are required to accept any job offer they receive – for example, if they are offered a regular administration job in an office close to home they have to accept that job. If they refuse to accept suitable job offers they will have their welfare payments suspended. However, there are a number of sensible exemptions from this requirement.

Unemployed people are not required to enlist in the military or engage in criminal activity, nor are they required to accept work that is 'unsuitable on moral, cultural or religious grounds', that involves an unreasonable commute or… accept offers to work in the sex industry.

While people on welfare may be choosing to look for work in the sex industry, they are neither required to look for work in the sex industry nor required to accept a job in the sex industry if they are offered one as a condition of receiving welfare payments.

Society does not expect nor require people on welfare to engage in sex work – it is their choice and their choice alone. Claims that people on welfare are being 'forced' into stripping and prostitution because of cuts to welfare payments should be treated with scepticism.

Andrew Baker is a Research Fellow at The Centre for Independent Studies.