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.

The emperor’s new clothes

16 November 2012

Indigenous leaders are seeing through the empty rhetoric (the emperor’s new clothes) of current Indigenous policy. Not content with being mere subjects of Indigenous policies, Aboriginal people want to be the agents of change. Ironically, it is the more conservative parties that are embracing this change than the supposedly ‘progressive’ Australian Labor Party (ALP).

Warren Mundine’s decision not to renew his ALP membership followed the election of four Aboriginal people to the NT parliament under the conservative banner of the Country Liberals. Mundine’s disillusionment with the ALP stemmed from the party’s failure to put a single Aboriginal representative into federal parliament, while the Liberal Party has managed to get two Aboriginal representatives elected at the federal level – one in the House and one in the Senate.

Arguably, the Liberal Party has moved away from a ‘we know what is best for you’ type approach to one that recognises the importance of Indigenous representation. Liberal leader Tony Abbott’s attempt to lure Alison Anderson from the Country Liberals might have been misguided – but he had the right idea. Government needs people like Anderson in power.

Early on, CIS recognised Anderson as a powerful voice in Indigenous affairs and invited her to give a talk. Her words: ‘There is not a black way of educating a child or a white way of educating a child but a right way’ conveyed the same message as her speech to the NT Assembly where she said: ‘We need to show our fellow Australians we want to be normal. We want the right to be just like them and keep our identity, but to live fully in the 21st century.’

Yet politicians and bureaucrats are still failing to heed this message and continue to frame policies around the notion of the ‘exceptional Indigene’ where Indigenous difference is seen as more important than the things we share.

The ALP might have been responsible for abolishing discriminatory laws, but it replaced them with equally damaging ‘positive discrimination’ measures. Of course Aboriginal people should be entitled to their own distinct identity, but the maintenance of a cultural identity should not be the role of the state.

The cultural relativist approach dominating Indigenous affairs for so long has negated the need for change, but many Aboriginal people can and want to adapt.

Australia needs an alternative vision to the picture government paints with its motherhood statements about Indigenous disadvantage and view of Indigenous people as perpetual victims.

As Mundine wrote in the Australian Financial Review this week, we need to stop treating Indigenous problems as different from other problems and start treating Indigenous disadvantage as a problem that can be solved.

Sara Hudson is a Research Fellow at The Centre for Independent Studies.

Breaking the IR code

16 November 2012

In the IR debate, productivity is that magical word. Politicians, academics, journalists and leaders of business groups speak of Australia’s ‘productivity imperative’. But terms such as productivity, flexibility and competitiveness mean different things to different groups.

Flexibility could mean altering regular working hours, or ease of hiring and firing. Productivity could mean removing restrictive working practices, cutting out the union, or implementing measures for performance pay. Increasing the firm’s competitiveness could mean reducing wage costs or substituting labour with capital.

Rio Tinto's Australian managing director, David Peever, has pinpointed the rising influence of unions as ‘the elephant in the room’ in the debate on productivity.

‘Direct engagement between companies and employees, flexibility and the need for improved productivity has to be at the heart of the system. Only then can productivity and innovation be liberated from the shop floor up, and without the competing agenda of a third party constantly seeking to extend its reach into areas best left to management.’

Peever is talking about the ability to have a non-union shop or quarantine from union negotiations certain managerial decisions such as redundancy or the use of external labour. These concerns go to the heart of managerial control over both wage and non-wage matters. Many employers are also worried that increased union presence will create an ‘us versus them’ working culture.

Unions have been able to increase their influence in several ways as a result of the Fair Work Act. First, statutory individual contracts (Howard’s AWAs), which allowed one-on-one negotiations between employer and employee and offered protection from industrial action, were abolished.

Unions also have a guaranteed spot at the bargaining table for new projects. Since the Fair Work Act abolished Employer Greenfields agreements, any company looking to set up an enterprise agreement for a new project needs to bargain with the default union, even if no workers have yet been hired for that job.

When employers complain about the effects of unions on flexibility, competitiveness and productivity, it is often these elements of the Fair Work Act they speak of.

Alexander Philipatos is a Policy Analyst at The Centre for Independent Studies.

NDIS: The New Leviathan

16 November 2012

In August, The Centre for Independent Studies broke the story that the National Disability Insurance Scheme would cost a lot more than what politicians and the media were saying it would.

Time and time again we heard (and are still hearing) that the NDIS would provide disability care and support to 411,000 people at an annual cost of $15 billion when it is fully operational in 2018–19.

These figures came from a comprehensive feasibility study by the Productivity Commission. However, there was a significant problem with the commission’s numbers that was not reflected in the public debate – they were 2009–10 figures and did not take into account nine years of price inflation, wage increases, and population growth to 2018–19.

The CIS requested under Freedom of Information laws a review of the commission’s NDIS costings conducted by the Australian Government Actuary that said the NDIS would not cover 411,000 people at a cost of $15 billion a year in 2018–19, but would in fact cover 441,000 people at a cost of about $22 billion a year when the scheme was fully operational in 2018–19.

However, those figures are for the first year alone. My report, released on 15 November 2012, shows that the NDIS will start big and get bigger rapidly, and grow to become the new leviathan of the Australian welfare state. In a nutshell, the NDIS is another Medicare.

A number of structural factors relating to increases in the pension age will drive growth in the NDIS-eligible population, and therefore NDIS expenditure, in the years after full implementation in 2018–19.

Combined with political pressure to expand NDIS eligibility to the 600,000 people aged 65 and older with a severe or profound disability and the 500,000 disability support pensioners who will not be eligible for NDIS-funded supports, there is serious potential for the size and scope of NDIS to grow beyond the government’s official estimates.

Looking at similar schemes in Australia and overseas, it is clear that once the NDIS is fully operational, government expenditure on the NDIS will grow rapidly at a rate of around 6% every year. By 2023–24, the NDIS eligible population will likely grow to about 500,000, and cost nearly $30 billion a year. The NDIS will need more than 8,000 public servants to administer the scheme.

Despite the size and cost of the NDIS, it is a worthwhile scheme that will improve the lives of hundreds of thousands of Australians with disability, their families and carers. However, given the bipartisan support for the NDIS, the government will need to make some tough decisions about how to pay for it.

Andrew Baker is a Policy Analyst at The Centre for Independent Studies and author of The New Leviathan: A National Disability Insurance Scheme, which was released on 15 November 2012.