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.

We should avoid an unwarranted Asian Century cultural cringe

22 February 2013

benjamin-herscovitchThe underlying fixation on cultural politics is a peculiar feature of the debate about Australia’s economic prospects in a global economy centred on Asia.

Academics, business leaders, and politicians all agree that prosperity in the Asian Century requires a serious cultural re-education.

Australians apparently lack the sensitivity and understanding to effectively compete in Asian markets and forge ever-closer ties with our northern neighbours.

These calls for deeper Asia awareness are reminiscent of the cultural cringe of a bygone era and undersell Australia’s natural strengths.

The idea that we are dangerously ignorant of the languages, cultures and mores of Asia is a step back towards a time when it was fashionable to deride Australia for being crude compared to European standards of sophistication.

It suggests Australians are embarrassingly Asia-illiterate and not quite ready to move beyond their parochial shores.

This view could be the result of the sneaking suspicion that the society that brought us the White Australia policy could not possibly be successful in the Asian Century.

Or maybe it is related to a generational lag of sorts. Many of the academics, business leaders and politicians calling for re-education grew up when Australia was probably not ready to effectively engage with Asia on many levels.

Although the origin of the Asian Century cultural cringe is unclear, it is obvious that it is out of touch with the reality of modern multicultural Australia.

As my latest research report shows, there are growing numbers of Australians with the Asia-relevant capabilities it is claimed we are yet to develop.

As well as making up seven of the top 10 source countries in the overall migration program, Asian nations dominate the skilled stream.

In 2010–11, six of the top eight source countries for skilled visa grants were from Asia, accounting for the arrival of more than 50,000 Asian migrants with business acumen, technical expertise and workplace experience.

This steady stream of new Asia expertise adds to Australia’s already large pool of readymade Asia literacy. Approximately 2.2 million people speak Asian languages at home, which equates to one in 10 Australians.

As a naturally Asia-savvy nation, Australia’s supposed unpreparedness to engage with Asia is just a phantom menace.

Benjamin Herscovitch is a Policy Analyst at The Centre for Independent Studies, and author of Australia and the Asian Ascendancy: Why Upskilling is Not Necessary to Reap the Rewards, released on 19 February 2013.

The protectionist field of dreams

22 February 2013

simon-cowanThe Gillard Government recently announced a $1 billion plan to create more jobs and foster innovation in Australian companies. To pay for the plan, however, the government pruned back an R&D tax concession for larger companies (also designed to create jobs and foster innovation).

It’s hard to say if this will result in more innovation overall but it’s telling that large companies are more than twice as likely as small companies to be undertaking what the ABS calls ‘innovative activity.’ To borrow from my CIS colleague, Professor Peter Saunders, sometimes: ‘the government giveth and the government taketh away.’

The government also recently announced funding for 10 ‘industry innovation precincts.’ It’s also hard to tell if these will be successful because no-one (least of all the government) knows why some hubs succeed and others fail.

In fact, politicians don’t seem to know a lot about what businesses need to succeed at all. Governments tend to locate hubs for political (not business) reasons, frequently on the outskirts of cities where land is cheap (but it’s harder to retain staff).

This failure to understand business brings us to a more concerning element of the Gillard Government’s plan – the additional red tape being put on businesses seeking to bid for public contracts in the form of compulsory Australian Industry Participation (AIP) agreements.

These arrangements might be familiar to those in the defence industry because AIPs seem based on Defence Australian Industry Capability (AIC) plans.

The good news is that AICs and AIPs still require work to be won on a ‘commercial basis,’ however sceptics might wonder; if Australian companies were cost competitive, why should businesses need extra incentives to use them?

The more protectionist aspect of AIPs will come (as they have in Defence) from the subtle inference that having a robust AIP plan will count in your favour when contracts are decided. It is covert, not overt, industry assistance.

Pressure will be applied as well to the government to: lower the threshold for requiring AIPs; make AIPs public; exclude companies from bidding for further work if they have AIP disputes in previous contracts; and to try and shame or force bidders to stick with companies listed in their AIPs regardless of changes in circumstances (all of which has already happened in the Defence AIC space).

Perhaps, similar to the new government automotive industry spruiker, these attempts to create artificial demand by forcing people to buy from Australian companies are just a natural outcome of Keynesian ‘demand-side’ government. If so, economic history has already given us the answer; focus more on the ‘supply-side’ and do things to make Australian companies more competitive.

Fewer regulations and less taxpayer money wasted on empty business parks would be a good start.

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

Pope Benedict’s legacy

22 February 2013

peter-kurti‘What do they call a former pope?’ I was asked when the news broke that Pope Benedict XVI was resigning. I replied, truthfully, that I didn’t know.

Popes normally hold office until they die. Although Canon Law does provide for it, a pope hasn’t resigned since Gregory XII stepped down in 1415.

Now it seems Benedict might be given the title Bishop Emeritus of Rome.

Like a monarch, the fact of reigning has been what mattered. But in the 21st century, the leadership of a worldwide church appears to demand more than simply occupying St Peter’s Chair.

A pope requires intellectual, spiritual and physical vigour if he is to lead the world’s 1.2 billion Catholics effectively.

Benedict believes that two out of those three powers are waning in him, and he may have worried that these deficiencies would, in time, diminish his papacy.

Critics will rake the coals of his eight-year pontificate to identify what he should have done, what he shouldn’t have done, and what he actually did do.

Benedict would have known how hard it would be to fill the shoes of his charismatic predecessor when he was elected by the Conclave in 2005. As it is, his legacy will be marked by intellectual acuity and moral courage, for he held that the human person is distinguished by the capacity for reason.

When religion promotes faith but ignores reason, it transmutes into an uninformed fundamentalism and this, in turn, fosters ignorance and intolerance.

With his persistent emphasis on reason, Benedict has articulated a cogent philosophical basis for faith. But he has also insisted that human beings are distinguished by morality, and he fought hard to confront the scandals of abuse within the Church.

Reason and morality are the twin foundations of the human freedom to which Benedict has been committed. It’s a freedom that always places the state in a role subservient to the individual.

As the Institute of Economic Affairs’ Philip Booth observed recently, ‘though the Church often makes strong statements criticizing people’s actions within a market economy, the foundational principles of its social teachings are strongly welcoming of free and virtuous economy, and very suspicious of the centralization of power.’

Pope Benedict XVI’s legacy will be characterised by his focus on the intellectual underpinnings of faith and for his consistent and determined commitment to freedom as the essence of human being.

Peter Kurti is a Research Fellow at The Centre for Independent Studies.