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.

You get the politicians you vote for

06 September 2013

simon-cowan 'If you don't understand … don't vote for him.' With those words Kevin Rudd tried to channel Paul Keating, whose cynical assassination of John Hewson in the "unlosable election" is frequently cited as the genesis of the current obsession with small target politics.

But Fightback! is not the only example of political vision being smacked down by the electorate.

In 1998, a first term Howard Government was almost toppled because it took a substantive tax reform agenda to the election. In 2007, Howard lost not only the election but his own seat due, in part, to Workchoices.

In 2010, Julia Gillard pledged she wouldn't implement a climate change package including a carbon tax – breaking this promise significantly contributed to her losing the Labor leadership. Pledging action on his climate change vision caused Malcolm Turnbull to lose the Liberal leadership in 2009.

Contrast the failure of vision-based campaigns with the most successful election campaigns of the last two decades – Howard's 1996 small target campaign that relied on the fatigue from a long-lived Labor government; a theme which also featured strongly in Kevin Rudd's win in 2007.

Yet time and again we hear the lament that there are no politicians with vision. Does no-one else remember the story about Pavlov's dogs?

The 2013 election campaign has largely been devoid of serious policy discussion (like our looming fiscal crisis or how our health system is collapsing) and has instead focused heavily on personalities and banalities. Both parties are trying to reassure the public that nothing will happen to their entitlements, that they won't have to pay more tax and can have everything they want.

How about this for a snappy slogan? 'No vision, just more entitlements.' The best thing is that it works for every political party. It was also the right answer to a slew of questions posed to Kevin Rudd on Monday's Q&A.

Voters have the power to change the political environment. We can demand better from politicians because they need our votes. It is not the media alone who should be expected to hold the blow torch to politicians; it is the job of voters to demand accountability of politicians.

You cannot complain about politics being empty rhetoric devoid of vision if you do not use your vote to punish politicians who mislead voters, misuse legislative power or misappropriate taxpayer money.

If you give a particular party your vote no matter what they do, then you can expect them to do whatever they want. If you are not engaged in policy debate (supporting the CIS is a great start!) then don't whinge when politicians treat voters with contempt by indulging in empty sloganeering.

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

Crushing red tape for charities

06 September 2013

rittelmeyer-helen The number of not-for-profit (NFP) sector workers reporting a negative view of the Australian Charities and Not-for-Profits Commission (ACNC) tripled in 2012, as more details of its precise nature became clear.

The difference between the two parties on this new NFP regulator is simple: Labor wants to keep the ACNC, which it created last year, and the Coalition wants to abolish it.

Both major parties claim that their top priority for the NFP sector is reducing red tape.

So why the black-and-white difference in platform?

It's a matter of faith versus evidence. Labor puts its trust in the ACNC's statements, which are full of promises of reducing bureaucratic meddling. The Coalition looks to its actions, which thus far have confirmed the sensibly skeptical view that the best way to reduce regulation is not to create a new $15 million regulator.

A major blow to the ACNC's credibility came just last week when the massive charitable organisation UnitingCare Australia released a report saying that if the ACNC were up for review right now, they would, based on their experience so far, lean toward recommending it be abolished.

UnitingCare's main complaint was that in its first six months the ACNC has saddled their branches with more paperwork, not less.

Referring to the new Annual Information Statement (AIS) that the ACNC has made mandatory for Australian charities – some of which have never been required to submit such detailed information to a regulator – UnitingCare explained that 'much of the information required in the AIS has already been provided to government, often several times in different formats.'

'A significant opportunity for the ACNC to reduce red tape from the beginning of its operations has been missed.'

The ACNC had a chance to demonstrate its seriousness about streamlining the charity bureaucracy, and it did not take it.

The hostile UnitingCare report was followed a few days later by a statement from another large NFP, Catholic Education Melbourne. In it, executive director Stephen Elder criticised the ACNC for 'providing no additional transparency to the way Catholic education reports to government, only duplication of existing regulation.'

Elder estimated that new reporting requirements could take Victoria's Catholic schools 45 working days of 'unnecessary pen pushing' to fulfill.

Tony Abbott says his government would replace the ACNC with a slimmed-down version that, instead of regulation, focuses on providing support, information, and consultative services. The NFP sector itself has expressed a strong desire for better coordination of professional expertise and best practices.

A national body like the one the Coalition has proposed would meet the needs of NFPs and charities. The ACNC, if kept, looks poised to serve the needs only of federal bureaucrats.

Helen Rittelmeyer is an intern at The Centre for Independent Studies.

An economic rationalist's guide to the election

06 September 2013

robert-carling Just as the truth is the first casualty of war, principled policy is the first casualty of election campaigns. Even in Australia's era of 'economic rationalism' that ended a long time ago, the economic dries took a back seat role during election campaigns (the Hewson-led Liberal campaign of 1993 being the exception). In the 2013 campaign, however, the dries are not just in the back seat but locked away in the boot, and it is not at all clear that they will be allowed out after the election regardless of who wins.

Economic rationalism cannot be tightly defined, but broadly speaking it is a set of beliefs in free markets and the price mechanism; a minimum of regulation; openness to trade and investment; raising government revenue through broad-based and neutral taxation; subjecting public investment proposals to rigorous cost-benefit analysis; and wrapping all of this in fiscal discipline.

Working from this definition, it is easy to demonstrate with examples that economic populism, not rationalism, has dominated the 2013 campaign.

In industry policy, while Labor upped the ante on subsidies to vehicle manufacturing and then pledged $25 million for the SPC fruit canning operation in Victoria, the Coalition came out with its own plan to 'co-invest' $16 million of taxpayers' money in an expansion of the Cadbury factory near Hobart. These are egregious departures from liberal economic principles.

Next we have both sides promising a plethora of small, local grants for things like sports fields and facilities, surf clubs and security cameras. These grants will not bust the budget, but they have nothing to do with the national government. The principle being violated here is that we have three tiers of government for a reason, and federalism works best if each tier sticks to its knitting.

'Think Big' projects have been constrained by fiscal realities in this campaign, but that has not stopped Prime Minister Kevin Rudd from offering up distant visions of northern development, super-fast trains and a brand spanking new navy base somewhere north of Tweed Heads. The problem is that none of it is supported by rigorous analysis that says it would be a wise use of resources (which the government doesn't have anyway).

Both sides have dipped their toes in the waters of foreign investment xenophobia, particularly when it involves agricultural land.

Taxation is always a fertile field for populism, and taxing 'big business' is an old favourite. Tony Abbott's scheme for funding his pet parental leave scheme springs to mind – a 'levy' (aka increase in company income tax) on big business.

Not only does this attempt to side-step the reality that businesses one way or another pass taxes on to people, it also creates a messy two-tier company income tax system – something that was done away with decades ago. Into the bargain, double taxation of dividends makes a reappearance via the non-franking of 'levy' payments. This is nothing but opportunistic revenue-raising.

Many more examples of economic populism have come from the lips of the Queensland populists, Bob Katter and Clive Palmer, but at least they won't be sitting in the Cabinet room.

If the economic dries are allowed out of the boot, they had better hope that whoever wins the election didn't really mean a lot of what they said to win.

Robert Carling is a Senior Fellow at The Centre for Independent Studies.