Waltzing Matilda

I’m off to see Australia play Iraq in a World Cup qualifying game tomorrow. So I thought it only appropriate to bone up on Australia’s unofficial national anthem, Waltzing Matilda. Written by Banjo Paterson in the 19th Century the original words go:

"Oh there once was a swagman camped in the billabong,
Under the shade of a Coolibah tree,
And he sang as he looked at the old billy boiling,
Who'll come a waltzing Matilda with me?

Who'll come a waltzin' Matilda my darling,
Who'll come a waltzin' Matilda with me?
Waltzing Matilda and leading a water bag,
Who'll come a waltzing Matilda with me?

Down came a jumbuck to drink at the water hole,
Up jumped the swagman + grabbed him in glee,
And he sang as he put him away in the tucker bag,
You'll come a waltzin' Matilda with me."

The main distinguishing feature of this song seems to be that it makes no sense whatsoever, even once it is deciphered. A billabong is a waterhole; a swagman a migrant worker. So a question that immediately arises is why on earth the swagman decided to camp in it. Personally, I’d have opted for somewhere nearby. Delving further, a billy is a boiling can, and the Matilda derives from a German word for swag, or rolled blanket. Clearly, something must have been amiss with Paterson when he penned this: we’ve now got a homeless man dancing with his bed linen inside a waterhole while he waits for his billy to boil.

But it gets worse. In the second verse we are introduced to the jumbuck, a word to describe a sheep that is not tame and extremely difficult to shear. It’s at this point that proceedings become increasing depraved: the swagman has stopped dancing with his bed linen in his glee at grabbing the feral sheep and ‘waltzing’ the night away with that.

The story concludes with the swagman getting caught in the act (of stealing the sheep) by three troopers and deciding to take his life jumping in the Billabong (but wasn’t he already in it?) rather than give himself in. I guess the popularity of the song with Australians is due to its themes of exploration and the outback, and independence from authorities. But I wonder whether more scrutiny should be paid to its precise words before being regularly belted out on mass.

The ‘big government’ budget

The Rudd Government had its first budget a few weeks ago. It was heavy on the progressive rhetoric and included a few interesting policies on education, infrastructure and housing: http://budget.australia.gov.au/

What struck me more than the announcements themselves though was the quite hostile reaction to what represented only a very marginally increased role for government. Overall, the budget increased planned Government expenditure by around one-tenth of one percent as a proportion of the total economy between now and 2010/11. Yet it was widely lambasted as a socialist budget paving the way for an era of big and bloated government. Of course, you might say that any increase in the size of government is necessarily a bad thing. But contrast the scale of reaction here to that of the UK where the Labour administration increased the relative size of government by over five percentage points in the early part of the decade (or in other words, fifty time Australia’s planned increase) without massive outcry.

Tax:GDP in the UK (1981-2011)











Tax:GDP in Australia (1981-2011)










Indeed, looking back over the two countries’ recent economic history one can observe two things. First, the size of government is much reduced in Australia relative to the UK, at about one-quarter of the overall economy compared to two-fifths in the UK. Second, the role for government in both has been relatively ‘sticky’ over a long period of time, fluctuating by only a few percentage points around their long-term average.

What could explain both the difference and stickiness? The first, and perhaps most common explanation, is that Australia’s much smaller government is a function of their electorate’s preference for greater reliance on free markets to deliver services and a reduced concern for the equity of social outcomes. I’m sure this is part of the answer, but I’m left thinking it can’t be a complete explanation – after all are Brits really so much more in love with big government that they’ll pay over half as much again as your average Ozzie? I doubt it. So, the second, and I think more interesting explanation is that public debate often revolves around starting-points or reference-points, rather than any more rigorous or fundamental assessment.

So the observed 'stickiness' is then a product of the countervailing forces of the left and right neutralizing each other about the principle of whether governments should or shouldn’t have a big role, and not the actually more bottom up assessment of what the appropriate role for government is at any given time, irrespective of whether that represents 25%, 28%, 33% or any other proportion of the economy.

This implies that public policy is often locked into particular, and perhaps random, equilibrium paths than require massive (and rare) political forces to shift. That would represent a positive result for people who believe in conservatism of social change, but bound to lead to disappointment from those who believe in a progressive role of government that has to adapt and shift as the world around changes. Unfortunately, I think the Rudd Government may prove a case in point. Really, it’s hard to see how they can deliver on the ambitious scale of change they have set themselves without winning the public case for a more active and increased role for government. Something I'll try to write more about another time...

The blame game

An interesting feature of Australia is its constitutional and political federalism. The Commonwealth Government, based in Canberra, receives the lion’s share of tax receipts, coordinating the spending of this as well as financial allocations to States. Meanwhile, State governments, such as Queensland’s, lever some resource through local sales tax, though an insufficient amount to fully deliver on the responsibilities to which they are locally accountable, not least of which is health care. This, of course, results in an elaborate and fragile structure of negotiations between state and federal agencies about exactly how public services will be funded and delivered.

The key, and evident, problems with this are:

• Perverse incentives in arrangements to shift costs onto the other side, particularly in health and social security;


• A lack of delivery clarity among businesses and the community about who actually has responsibility for what;


• Weak accountability between Commonwealth and State governments with opportunities for one to blame the other whenever things go wrong; and


• Distortions, duplications, and double-running costs in the administering of public policy.

An unfortunate manifestation of this is something called Specific Purpose Payments (SPPs) whereby the Commonwealth bypasses the States with ring-fenced conditionality in the pursuit of particular policy objectives. Effectively, States are required to fulfill specific conditions in order to receive these SPPs. Since the 1960s these have represented a major source of State funding, to the extent that they now total around two-fifths of all payments from the Australian Government to States.

What to be done?
The incoming Rudd Government identified the situation as a priority for reform, and it’s a central issue coming up in the range of policy overhauls underway. Clearly, reform needs to be guided by some set of subsidiarity principles about which government functions to, and which not to, aggregate up. These principles should include:

• Where there are spillovers or economies of scale in more centrally delivering something;
  Where there are significant concerns about the equity of outcomes within or between regions;


• Where there are coordinating or complementarity efficiencies in policy – such as education and training policy;


• Where there is a compelling need for uniformity in the given service, or where diversity of rules would create inefficiency; and


• Where the funding, delivery or monitoring of the service is aligned at a similar level.

For example, there is a strong a priori case for aggregating functions like defence, international development, trade, and most aspects of law to a national, or even supranational level (e.g. to the EU in the case of the UK). On the other hand there’s probably little sense in aggregating services like the delivery of community services for the elderly to a higher level merely for the sake of doing so. Indeed, one of positive features of current arrangements is that State governments are much closer and more locally responsive to the needs of their citizens than the equivalent in the UK.

So… where next?
It seems there may be a number of potential options for reform, several of which are within the boundaries of achievability. These include:

• A process of horse trading whereby the different governments swap areas of shared responsibility so only one government retains responsibility for a given service;


• A clearer split between funder and provider to separate responsibilities between Commonwealth and State, so that Commonwealth government either becomes the sole funder of a service, or a purchaser of discrete components from the State;


• A new performance management role for the Commonwealth, where it monitors States performance on functions of national priority with the right to intervene as a measure of last resort; or


• A competitive bid process, whereby States bid for Commonwealth funding for the delivery of certain functions, with performance criteria negotiated as part of the partnership.

Practically, some mix of these different approaches could suit different service areas – for example the alignment of responsibility for provision of roads is likely to be more amenable to the horse trading model than the performance management approach (and equally vice versa for health). And, indeed, the relative attractiveness of these different approaches to constitutional reform depends on the extent to which the Rudd Government is prepared to expend hard earned political capital in the pursuit of any gains from a more enlarged and empowered federal administration.

Greek festival

I spent Sunday at Brisbane’s annual Greek festival. It was an interesting mix of all things Hellenic with plenty of Baklava, Halloumi, and grape crushing along with a healthy lashing of Queensland on the side in the form of Castlemaine XXXX beer tents. The fact that there are enough Greeks in Brisbane not just to run an annual festival but also maintain a large social club on the grounds is all down to Australia’s post-war ‘Populate or Perish!’ campaign. It’s difficult to fully consider the position Australia was in by the late 1940s, but being extremely under populated and having come six months or so (and a MacArthur) spare of being invaded by the Japanese the Australians opted for an active policy of encouraging (white) emigration of Greeks, Italians, Slavs, Serbs, Croats, Dutch, Poles, Turks, Lebanese, and of course the odd Brit. In the space of three years alone, around one quarter of a million people migrated into Australia. So, more than sixty years later that results in a very fine annual festival on south bank of Brisbane.

Around Brisbane...

I’ve spent the last couple of days exploring Brisbane, not least in the hunt for a place to live. During which I’ve been struck by two things. First, that this place is, in many respects, perfectly familiar to someone coming from Britain. Not only do we share the same language, but apparently also many of the customs, attitudes and ways of going about our daily lives. But second, in many other respects, this place could hardly be more alien to one from Britain.

There are at least three things that make me think this. First, the sheer size and scale of even the Queensland region (let alone the rest of Australia) is hard to reconcile with the experience of Europe. After all, the next decent sized place up the coast – Cairns – is well over one thousand miles away. That’s over half the distance from London to Moscow, by which time you’d have passed at least several hundred million people compared to several thousand or so you’d see on your way up the Queensland coast.

Second, even the most urban of areas are inextricably linked with the environment in a way very different to home.

I kid you not: the park in the central business district of Brisbane actually has a sizable Mangrove swamp in the middle of it (see left).

Only yesterday, as I peacefully strolled down one of Brisbane’s riverside boardwalks I was confronted by a giant lizard, the likes of which I thought native only to places like the Galapagos.

Third, this place is all just so new. To give some reference points, by 1825, when Britain was well in the middle of the industrial revolution, the official population of Brisbane was just 45 males and 2 females. (It must have been a tough existence, at least from the male perspective). The house I previously lived in London was as at old as that. Even by 1980s the population was in the low hundreds of thousands; it’s now a little fewer than two million. But with this come many great things: a capacity to build into the urban design a high quality of life; an infusion of youth, creativity and energy; an ability to make freer and easier choices and how and where you live (in very stark contrast to London); and (I trust) a greater appreciation of the beauty of, and our symbiosis with, nature and the environment.

Arrival...

So at last I have arrived in sunny Brisbane. And very sunny it is too. (If this is supposed to be late autumn then I have no idea how I’ll cope come spring and summer.)

Anyhow, being now over the worst parts of the jet lag I thought I’d pen some initial impressions. I’ve been reading a fair bit about Australia over the last couple of months but it wasn’t until the early morning flight coming across Western Australia that the size, scale and remoteness of the place really hit home.

Facts don’t always do these things justice but here’s a go: Australia is the sixth largest country, is the only island that is also a continent, and the only continent that is also an island. But not only is the place huge – about two and a half times the size of Western Europe – it is also incredibly remote. Eighty per cent of people live in urban areas, and these urban areas are almost exclusively spread around the outer rims of the country.

This all resulted in a quite wonderful experience of watching for the occasional light every 300 odd miles or so as we passed over the outback. As the plane flew on I pondered quite what existence must be like down in some of these isolated outposts. As an illustration, the Bill Bryson book I’ve been reading tells me that it was in Australia that (in all likelihood) the first terrorist nuclear test occurred in 1993, after the Aum Shinrikyo group (of the ’95 Tokyo subway fame) detonated a bomb in Western Australia. Not only had their purchase of large amounts of land containing Uranium as well hiring of a team of Russian scientists gone unnoticed, the actual explosion itself was filed away as a curiosity despite sending seismographs all over the Pacific crazy. Clearly it must be pretty remote down there. Contemplated from London the idea that such a thing could happen seemed utterly absurd; having now seen this expanse in my own eyes, skeptic no longer am I.