Reflections on Australian politics and policy

I came not knowing much about Australian policy or its political system. That’s partly because it was never really on my radar, but also because it – unduly in my view – seems to receive scant reporting overseas. To be fair I probably still don’t, but it’s been a fairly intensive time here and I’ve been fortunate to meet with politicians past and present as well as senior officials from six of the nine governments here. So, for what they are worth, here are some personal reflections on policy and politics down under…

First, it’s very clearly a new era. Like when you look back at an old photo and suddenly realise your hair cut was out of date even for then, Howard represented a bygone period, and the legacy of his time in office was as much a lack of action as taking the country in some unpleasant directions (like the migrant detention camp in Nauru).There’s now a lot of goodwill and optimism for the future, and strong economic foundations on which to realise progressive goals on health, education, the environment and fairness. On the downside too many issues were pushed into the “too difficult” box for too long and are now long overdue for attention – in particular national infrastructure, social equity, and the natural environment.

Second, the new Prime Minister Kevin Rudd is an interesting and rather unusual leader but ultimately underwhelming. A former public servant, he came into power on the wave of a public desperate to come up for air and look to the future. He has made some good steps forward – on reconciliation with Indigenous Australians, on international engagement, on climate change, on investment in skills and infrastructure. Yet he’s beginning to slip into the territory of endless reviews and initiatives with no clear sense of how they will all land or fit together. Of course this view may be a little premature – he is only one year in – but with a reputation built on technocratic expertise you have to deliver or you’ll fall; and when you do it’ll be fast. Most critically, he lacks a capacity to compelling describe a vision or excite people around that. Change not from, but to.

Third, policy making and public services here are going through a real culture shock after years of relative ease and inaction. There’s much to improve on: a lack of statistics and robust evidence base; weak think-tank and research groups; sloppy policy making processes; an absence of real scrutiny and rigour. In so far as there are articulated ends for public investment there’s still an insufficient account of the means to get there. Blair may have found them late, but the ideas behind market design and user empowerment were fundamentally right. One of the biggest challenges for Rudd will be creating this ‘enabling’ policy infrastructure and capability to drive the outcomes he’s after – and it won’t come quickly or without some heavy lifting.

Fourth, all countries have imperfect governance arrangements and Australia’s is its nine-government federalism. You can obfuscate into the language of vertical fiscal imbalance, or decree that it’s always been that way, but it is broken, doesn’t work for the challenges that Australia faces, and needs to be fixed. The proposed National Partnership Payments won’t solve it, are disingenuous, and will leave the problem to fester for another political generation. I don’t have a perfect solution by any means but a better start would be an honest and principled discussion of where roles and responsibilities should sit and how they might be exchanged.

Fifth, a very positive feature here, and also a good thing about having states, is that policy is made much closer to the community. They are more involved in decisions; policy makers have more regard for the genuine outcomes of policy and not just whether it is theoretically pure and tractable; and politicians devote their time and effort to understanding individual stories and experiences. Just to take one example: there’s much the UK could learn for its next spending review from Queensland’s Toward Q2 work on how to engage, involve and communicate priorities to the public.

Sixth, the policy challenges are unsurprisingly very similar to the UK. Both countries struggle with how to ensure all regions and citizens benefit from a more globalised and knowledge based economy. Both look to prevention, early intervention and personal responsibility to address rising expectations and demands on public services. Both are committed to addressing climate change, and weigh up difficult tradeoffs in how best to transition to a low carbon world. And both the British and Australian public cite quality of life, family and community as the most important things in life yet their politicians jostle to find the appropriate narrative and tools to reach them.

Yet there are also some subtle differences. The most pressing social challenges are here found in extremely remote areas, and this brings with it distinct service delivery challenges not found in the UK. Moreover, Australia’s economy and population are growing much faster than the UK, with consequential upsides and a need to manage changing hotspots like on congestion and infrastructure. Finally, a more balanced and diversified economy than Britain’s, policy makers down under ponder about Australia’s economic future and what balance for risk and reward to target.

But overall I’m left with an impression of optimism and of a country and policy environment that isn’t hostage to a past and has great opportunities to forge new directions. All of which means there’s much to watch in the future…

Territories and democracy inaction

I’ve always been a little confused about the difference between a state and territory (or provinces and territories in Canada). I guess they are mostly quirks of history: with the more powerful regions of countries getting the more autonomous state and province title at point of federation, and the weaker or newly emerging ones being left with some inferior 'territory' status.

For the most part it seems to make little difference. For example, the Northern Territory here in Australia have their own legislative assembly under delegated powers from the Commonwealth. And, although they only get to send two senators to the Commonwealth Parliament (unlike the founding States which get to send twelve each) this is pretty fair in terms of per capita share. They did also get a chance to become a state in 1998 but turned it down (mostly because they didn’t want to give the then Chief Minister more power and platform, but also because existing states determine the conditions you join on and it was perceived they weren’t getting a fair offer).

But in other ways it does create two quite distinct classes of citizen. One notable example is the Northern Territory intervention, where the Federal Government used its legislative powers to bring radical change in welfare, law enforcement and land tenure rights that it couldn’t do in the States.

A second example I discovered today is a peculiar discrimination in voting rights. Australia has a constitution, and it can only be changed by referendum. Since 1977 Northern Territorians (as well as people from the Australian Capital Territory) have been allowed to vote in referendums. But for a bill to pass it must achieve what’s called a ‘double majority’: in other words get a majority of both the national vote, and a majority of the States. (There’s actually a more bizarre ‘triple majority’ rule that can apply, where anything that affects a particular state has to receive a majority in that state).

Because they aren’t states, votes in the two territories only count for the national vote. So if say three states plus the two territories formed a majority to pass a bill, and it won the national vote, it would still fail because it needs four states to say yes. A version of this last happened in a 1984 referendum on terms for senators: it had the popular majority of Australians, plus two states and two territories but was blocked by the other (smaller) states. Indeed, this double majority rule is one reason why only 8 out of 44 referendums have ever been passed along with Australian’s relative conservative tendency to limit the role of government. More to the point it’s a very disingenuous way to have been given voting rights back in ’77 and, if perhaps not a daily bind for residents of the territories, does maintain a unjust second-class of citizenship.

Water markets in the Murray-Darling Basin

The best bit of Per Capita’s ‘market design’ conference proved to be the case studies of public markets in Australia, rather than any gems about market design per se. One of those related to water markets operating in the largest surface water system in Australia, the Murray-Darling Basin. Straddling five jurisdictions, the basin carries water from the Murray and Darling rivers over an area equivalent to the combined size of France, Germany and the UK. Water shortages here are not a new problem by any means but have got much more extreme in recent years with:

• Reduced rainfall: rainfall in the last five years has been around 10% of the historical average;
  


• Changed rainfall patterns: with rain falling in different seasons the traditional autumn rainfall over the Murray-Darling Basin has disproportionably fallen;
  


• Over allocation of water rights: which were based on assumptions of higher trend rainfall and lower levels of land utilisation; and
  


• Higher temperatures: with three of the last five years having broken temperature records there has been increased evaporation.
  

How does the market work?

• A new inter-governmental organisation called the Murray Darling Basin Commission has been established to oversee water use: this brings together six governments (the Commonwealth plus Queensland, New South Wales, Victoria, South Australia and the Australian Capital Territory). Beneath this is a highly complex governance arrangement – each can send three Ministers to the MDBC’s Ministerial Council and a further two as MDBC Commissioners.
  
  
• State-level caps on diversions: which prevent upstream States unfairly diverting water, or building dams to reduce flow. (These first came into existence in the mid 1990s.)
  
  
• Inter-state water trades: the six governments are able to trade water rights using fixed exchange rates determined by the MDBC (or by individual states if transparently reported to the Commission).
  

Where’s it all at?

The market is still in very early development and the region remains in a semi-crisis state. Nonetheless it already appears to be triggering some of the innovation and efficiency adjustments you’d expect. For example, there’s been a recent shift in economic composition in the basin, with an increased value of wine production (a falling quantity effect being more than offset by rising quality). There’s also been a shift in use of water as a factor of production with dairy farmers trading their water rights and importing animal feed rather than growing within the basin region.

Where could the market go next?

As the market evolves it could employ a few further features:

• Leasebacks: where one entity buys the rights and then leases back some of the allocation to the user. This would be a good way to spread risk and reduce transactional economies of scale.


• Covenants: this would permanently transfer the environmental rights. Indeed this is happening in part through a Federal buyback scheme worth $10bn.


• Future and options exchange: this would allow for trade of water (and future water rights) in the same way in which that oil exchanges work. So instead of an ‘exchange rate’ you’d get spot prices. For this to work you’d need a fair degree of depth in the market – both buyers and sellers.

I don’t know enough about environmental economics to fully appraise the emerging market here, nor know if there are better examples elsewhere, but it strikes me as a potential good case study for water rights issues occurring in much more extreme environmental and governance circumstances such as the Nile Delta region.

Income inequality

Interesting paper on income inequality out this week from the boffins at OECD. Particularly worth playing with the data in the graphical package Gapminder.

The main findings include:

• Income inequality rising since the 1980s in all countries along with increased social spending to offset it. This suggests if governments start to ‘let loose’, or fail to target poverty-reducing spending, income inequality will accelerate further.
  
  
• Income inequality rising since 2000 in countries like the US and Germany but falling in the UK and Australia. I tested this out on the historical data plotting poverty against social spending since the 1980s. Each bubble represents a year; I’ve added the green lines to highlight the change in most recent years. Of the four, the US has the highest rates of poverty, then Australia, Germany and the UK. Germany and the UK have traded places with a radical drop in poverty in the UK in recent years and coinciding rise in Germany. The UK’s cut appears to have cost an additional 3 percentage points of GDP on social spending; Germany’s rise has been while social spending has been pretty constant (presumably feedback from the structural and higher unemployment they’ve suffered in recent years).
  
  


• Getting more people in work is – unsurprisingly – found to be one of the major ways to reduce poverty, although capital inequality is now more significant in the past. This must be particularly so for those house buying, share-owning Anglo-Saxon economies.
  
  
• Growth and poverty is a more mixed story. The US and Australia have been growing but with rising inequality in recent years (albeit Australia from a much lower base). The UK has been growing but with sharply falling rates of inequality (albeit still higher than Australia).

Focusing solely on the Australian and UK trends for a second this does go some way to explaining in general terms where the two currently differ in political trends. The UK has cut poverty and inequality but the rising social spending this has cost is probably coming to an end and seems to have - for the present at least - maxed out taxpayers' willingness to spend. Meanwhile, Australia has had a long period of rapid growth, though the public now appear more willing to countenance higher spending on social security and public services to improve equity and fairness. I guess we'll find out what the US electorate think very soon...

End of the week...

Sorry for the gap in blogging this week – product of a mostly wasted week that culminated in a lesson why never to try doing a job interview by teleconference (or equally when in a different time zone).

So finishing up the week here’s a pick and mix of recent themes of the blog:

• Public administration: my work on public service reform and helping set up a new Public Service Commission has come to end. Last task was writing a speech for the new Chair on priorities for the Queensland Public Service. Set in the context of the Premier’s new Q2 targets, it argues the Government will need to build higher performing organisations, get serious about leadership and skills, work more effectively across agencies and continue to build on some good public engagement work. Accompanying slides with my favourite age-grade chart here, and further comment on this in a previous blog.
  
  
• Welfare reform: looks like a big plank of the welfare reform pilots could be in doubt with legal questions being raised whether income management is in breach of the Racial Discrimination Act. While specifically about the ‘intervention’ in the Northern Territories this would no doubt have implications for the welfare reform pilots about to start in northern Queensland (although the Government don’t seem ready to concede as yet).
  
  
• Crocodiles: the croc believed responsible for killing Scot Arthur Booker is off for a breeding programme because it exceeds – by 30cm – the cut off for ‘iconic crocodile’ status. It’s one thing to keep it, but you’d think they could quietly shunt it off to a retirement facility rather than an active breeding programme.
  
  
• Bad policy: legislation in New South Wales ‘accidentally’ allows tobacco sponsorship of racing events following a supposed drafting error. Clearly no accident and a disappointingly mild reaction from Action on Smoking Health (Clive: a cousin of the British group?) who are said to be ‘disturbed’. This comes at the same time as revelations in the UK about Blair’s involvement in the F1 exemption debacle a decade ago.
  
  
• Crap politicians: more evidence of the low bar for Australian politicians – a probe into Andrew Stoner’s comments that Federal MP Alby Schultz’s should be ‘blindfolded and shot at dawn’, and a new Committee being set up to find ways to punish bad behaviour in Parliament. Ultimately, the Australian public don’t seem to sanction such raucous characters at the ballot box which would be the best quality-control measure. Meanwhile in Queensland revelations about Ministerial interests still developing – a not unusual story but surprising no code of conduct exist here to prevent such holdings or set down clear standards about disinvestment procedures.

Aurukun

Despite the Coen Negotiation Table being called off, the opportunity to see first hand an Indigenous community was too much to pass up and I managed to catch a flight to the Aurukun community instead. This is remote Australia with a capital R: high up on the Gulf of Carpentaria it’s a land of airstrips built by the US Army in the Second World War, hundreds of miles of nothing but red dust, and multi-day drives to the nearby towns.

Aurukun is one of the most extremely disadvantaged communities in Queensland. It became well known for bad reasons last year after nine residents were given suspended sentences for the rape of a ten year old girl because the judge thought she “probably agreed to have sex with all of you". There are a little over one thousand people in Aurukun: one hundred of which are (mostly white) government officials, health workers and teachers, and the remainder of which are the local Wik people. The Wik people live inside the town, the officials in mobile homes around the perimeter.

On landing, a police check inspects baggage for illicit alcohol or other drugs. Aurukun is part of the intervention policy that has strict controls on the sale of ‘grog’; the town’s tavern is to shut next month. Sadly there were few positive signs about the community. There are no jobs – the only businesses are the shop and tavern and these are both run by the government. There is employment in these - and in the government office - for locals under a work for welfare scheme known as the CDEP. But it’s a depressing form of employment and seems to often be nothing more than an excuse for both sides (e.g. a woman employed under CDEP in the government office apparently rarely shows up for work and when she did for a couple of hours while I was there she was just put in the corner to play computer solitaire).

There are some jobs in the regional mining companies, but these are a long drive away and mean leaving the town or returning irregularly. Those who do find such work are well paid, but theft of food and petty crime against them and their families is pretty rife.

There’s a palpable sense of aggression in the community. In the 24 hours while I was there one person went on a rampage with a spear and shovel through the town, another threw a strop around the government offices because her welfare payment hadn’t gone into her account. There are regular riots here, with two expected crunch points ahead: in the next month with the welfare reform pilots kicking in and again later in the year when some of the residents now working in the mine receive their first tax bill.

The idea of the welfare reform is to:

• First, to ‘rebuild norms’. A Family Responsibilities Commission has been set up to promote child wellbeing with sanctions to place people under ‘income management’ (i.e. to take control of people’s welfare payments) for breaches in regard to child welfare, school attendance and lawful behaviour.
  
  
• Second, ‘reform incentives’. This is seeking to transfer people off welfare into jobs and provide skills and training. In the future it will be much harder to get onto CDEP, and payments will be reduced in size.
  
  
• Third, ‘normalise housing’. On top of welfare payments, most housing is rented out at low or no cost. In the future the idea is to promote home ownership and increase rental levels to market rates (though I’m not clear what ‘market rates’ means here as there is no market, nor equivalent to base rents from).
  
  
• Fourth, reduce the scope of government. In Aurukun the government sector completely crowds out any potential for private or not-for-profit sector jobs. It makes no sense for the government to own and run all towns like Aurukun and only increases the dependency culture. So the idea is to slowly transition some of these jobs out of government and develop more new ones.
  

At this stage the pilots are only beginning to roll out after a lengthy effort to get the details right with the community. It will be interesting to see how successful they are. To be honest my visit didn’t leave me with much optimism. Aurukun feels completely artificial: aside from the mines there’s no sustainable economy here and it’s difficult to see how it could be stimulated. If Aurukun wasn’t already here, people clearly wouldn’t move here.

Welfare reform will only work if people have a sustainable economy to transition into, or if such an economy can be envisaged and developed, and, sadly, I didn't get the sense that's the case.

Some photos I took below...

More Aurukun photos...

Australia's $10.6bn rescue package

Kevin Rudd this evening addressed the nation to give details of his $10.6bn ‘rescue package’. It is basically a massive fiscal stimulus package:

• $4.8 billion for an immediate down payment on long term pension reform;
  
• $3.9 billion in support payments for low and middle income families;
  
• $1.5 billion investment to help first home buyers buy a home;
  
• $187 million to create 56,000 new training places in 2008-09 (comment: small beer relative to the other items); and
  
• Acceleration of the implementation of the government's three nation building funds (education, health, infrastructure).
  

Benefits will start coming on line from early December with single pensioners receiving a lump sum payment of $1,400, pensioner couples receiving $2,100, and people receiving the carers allowance $1,000 for each eligible person in their care.

The rescue package comes on top of the guarantee over the weekend for 100% of bank deposits and is sourced from the c.$20bn surplus in the recent budget.

A good way to blow $10bn?

If a surplus ever was going to be drawn down now is probably the right time. What’s currently a credit crisis is soon going to become a nasty and lingering business recession here and elsewhere so an early inoculation against the downturn may be a good idea. IMF forecasts for Australia are for an economic slowing, although notably not the zero per cent growth facing many other OECD countries. Australia's well regulated banks also are generally in good shape so the landing is going to softer here than at home and this package may help ensure that's even softer and for worse off groups. $10bn is also not a huge amount of money in the scheme of things (c.1% of GDP) so it could be seen as a sort of insurance policy in uncertain times.

On the other hand there should be a few questions asked:

• Is it the right time to try and target a fiscal package? We’re in the eye of the storm of a credit crunch at the moment. Sure, the ‘real’ effects will land in due course in a business recession but what would be the cost of waiting another week or so to have a better idea of where markets are heading? The key to fiscal packages is ensuring they land at the right time and we'd have a better idea of when that might be in even a few days' time. Of course the timing is more about the politics but they'd be other ways to manage this (e.g. signal the size of the package but announce the timing in the next few weeks).
  
  
• Has there been sufficient time to fully think through? Perhaps they’ve been thinking about this for a long while and there's been some rigorous analysis. But I suspect not: and spending $10bn warrants serious examination to get it right.
  
  
• Is it appropriate targeted? The package is partially targeted but not completely – for example to all pensioners. If Australia’s income distribution is anything like the UK’s this is not a good way to tackle the potential poverty effects that Rudd says it is designed to – pensioners have the highest levels of income variance of any group.
  
  
• Some bad spending items in there. $1.5bn for first time buyers is more good money after bad.

Meanwhile, over in Blighty, Gordon seems to be getting some good headlines e.g. 'Gordon Brown has saved the world's financial system, says economics Nobel Prize winner' from today's Daily Mail as both Europeans and Americans copy elements of the British plan.

Death

I was due to visit a welfare reform project up in the Cape York region this week. It would have been an interesting trip on several counts. The project operates in a (mostly) indigenous town called Coen in the northern tip of Queensland, which being over 2,500km from Brisbane is somewhat off the beaten track (see below).

The so called Welfare Reform Trials have had a lot of attention because they set out strong conditionalities in return for welfare payments (e.g. sending children to school and meeting certain tenancy conditions) and an emphasis on family responsibilities. What I was going along to was the ‘Negotiation Table’ which brings together commonwealth, state and local government officials with local leaders and community organisations to discuss issues facing the indigenous community and specifically this time how the welfare reforms were working.

Unfortunately however one of the elders died this weekend and so the whole thing has been called off. I don’t know much about the community in question nor exactly what the meetings would have been like (and unfortunately now won’t) but it did surprise me a little that it’s been called off - and called off indefinitely as the community is entering a mourning period of up to a month. It’s a clear example of cultural differences – in the UK we’d likely go ahead, perhaps doing a minute’s silence or something similar to mark the passing. But we’d go ahead because we’d weigh it up against the now unavoidable costs of chartered flights for officials from Canberra and Brisbane, months of pre-conference work, and potential risk of disruption to the project. I’m not saying one decision is better than the other, but we’d say that the person would have wanted it that way because they loved the community and wanted to see it continue to strive or something similar.

So I decided to find out a little more about what death means in Aboriginal society. For Aborigines, death represents a return of the spirit to the Dreaming and the eternal life-stream. Upon death the spirit returns to its source to await reincarnation. Death rituals vary between Aboriginal groups but I was struck by a few points, some which I’ve seen in other societies and others not:

• It is forbidden in Aboriginal culture to refer in any way to the deceased. Instead the news is passed on indirectly in forms like “X has become one” (where X is the wife/husband). This was evident in e-mails and phone calls earlier where it was unclear who exactly had died.
  
  
• Ritual mourning and burying rituals have to be fully carried out to assist the spirit into the afterlife; without this the spirit will be caught between death and future life. Again this helps explain why it’s unclear if/ when the conference will now happen – with up to one month of mourning being planned everything else is disrupted.
  
  
• The mourning is supposed to be accompanied by high levels of agitation and (sometimes) self-harm like burning oneself with coals or gashing of the forehead. I’ve see a bit of this Hindu society in Nepal, though it was more agitation through intense wailing than active self harm.
  
  
• Relatives, and particularly widows, have to experience food taboos and isolation from the community for up to one year. This seems a particularly harsh feature, although may not be as customary these days.
  
  
• There are a range of burial approaches from burying under rocks to cremation. I presume these days everybody has to be cremated or buried in an official spot though perhaps not in these more remote areas.
  

Clearly then death in Aboriginal society is an intensely mystical, complex and tabooed ritual. Apparently Aborigines also don’t particularly fear for death which if right is a very positive feature of their culture - compared for example with the Catholic faith with its both rather elaborate rituals and instillation of life-long dread and apprehension of death. The psychology (and sociology) of grief and mouring is an interesting topic. From a purest perspective many of the Aboriginal customs wouldn't seem to help the emotional process of grieving and moving on from the death of a loved one - take for instance not being able to name the dead person or having to live in isolation to mourn. Perhaps though when rituals get deeply rooted in culture then the process of following the rules whether or not they 'make sense' itself helps one to move on because you are just doing what everyone else does.

Implementing Government Priorities

I’m doing a talk today on ‘Implementing Government Priorities’ at Griffith University.

The context is the recent launch of Queensland’s targets and policy ambitions for the future – called 'Toward Q2: Tomorrow’s Queensland'. It’s essentially a set of targets that will go alongside a new performance management approach to drive public services here. It is in many ways quite similar to the UK’s ‘Public Service Agreements’.

I’ve been fairly involved in producing this, and am generally supportive despite having a few quibbles. Anyhow my argumentation today is that:

• Priority setting and performance management can be an effective model to drive public services – both politically and pragmatically
  
  
• But there have been a number of drawbacks with over reliance on the model – e.g. too one size fits all, risks disenfranchising front-line professionals
  
  
• Therefore need to refine how we use it – more devolution, proportionate intervention models, more engagement with citizens in its design and delivery
  
  
• But also we need to drive public services through other approaches – including use of public service information and transparency; user choice and voice; service devolution and autonomy; customer transformation; markets and contestability; and the public value and co-production model. Critically drawing on the most effective lever for each area.
  

This isn’t new stuff as such in the UK but certainly something not on the agenda here as yet.

Final Garnaut Climate Change Review

Final report of the Garnaut Review of Climate Change released today. Warning: it’s well over 600 pages in length but if you want to take it on the content page is here or the introductory chapter here.

Much better is a good one-page summary from crikey here.

I think there's much to be welcomed in the report. Clive Hamilton (author of Affluenza and sustainability activist) has done an excellent analysis of some of contradictions in the report so I won’t do an inferior duplication save to note a couple of the key points of debate.

• Garnaut recommends Australia aim for a 10% reduction on route to a 550ppm trajectory but go into next year’s Copenhagen conference pushing for 450ppm. Hamilton notes this odd - not only to pre-signal your negotiating position but also to expect others to sign up to deeper cuts than you yourself have committed to. In Hamilton’s words, lowering expectations is likely to become self-fulfilling.

• Garnaut argues the 550ppm is the most prudent economic approach for Australia, yet Hamilton notes the modelling itself finds little difference in the long-run between the different targets. For example, the 0.1% in GDP growth between the 450ppm and 550ppm trajectory would result in only having to wait another two years to double GDP (2042 to 2040). Essentially, Hamilton argues that the politics (and business lobbies) got in the way of the science. Always a difficult tradeoff in 'independent reviews'.

Paid family leave

On the back of a report from Australia’s Productivity Commission it looks like paid maternity leave may soon be on its way down under. If that sounds odd, it’s because it is – Australia and the United States are the only two OECD countries who don’t have state funded maternity leave (see chart below). So although some people are covered through their workplace, a sizable 51 per cent of employers don’t have any provisions for their employees. (One might note this isn't an entirely fair comparison though, for Australia have been paying a baby bonus of $5,000 for several years).

The PM today said he was prepared to ‘bite the bullet’ and accept the principle of maternity leave (though fudging the precise parameters).

What does the report actually say?

• It recommends paid 'parental leave' of 18 weeks, shared by either parent who is deemed the primary carer. This would be quite a progressive and welcome measure, for most countries provide maternity leave which clearly reinforces a gender bias and takes no account of modern family dynamics. However, either the media have failed to read the actual report (perhaps understandably given it's another gruellingly long 300+ pager) – or have failed to pick up the difference in what the PM is saying – for he has cannily and subtly said he’ll accept the report but switches into the language of ‘maternity’ rather than ‘parental’ leave.
  


• It recommends making all family types eligible, including same sex couples. Again to be welcomed, although may well get challenged by a number of the Opposition and fringes of the Labor party in the legislative phase.
  


• Suggests paying a rate equal to the minimum wage of $540 per week. This seems rather stingy compared to most European countries (who pay a rate based on a proportion of pre-birth income), but there are some decent arguments advanced for the flat rate e.g. that it’s more equitable, and many higher income families will have privately negotiated family leave benefits. It also means the scheme can be introduced at a relatively low cost to the taxpayer – establishing the principle which could be scaled in future.
  


• Estimates it’ll cost $530m per year – $450m picked up by the taxpayer and $75m by employers. Indeed, all that employers are being asked to pick up are employees' superannuation (pensions contribution), though business groups are still calling it an ‘excessive and unnecessary burden’.
  

Buried on page 248, the Commission rejected an interesting rival proposal from economist Joshua Gans for a 'return to work' credit – providing tax benefits to employers tied to family leave schemes. This would theoretically be more attractive because it incentivises effective return to work and also because the more income-based reward would encourage more men to take parental leave – but was ultimately rejected because of potential deadweight costs and uncapped cost exposure. A shame because they'll no doubt be a lot of deadweight in the preferred version and it's not as though costs would be that exposed. After the birth rate is pretty predictable and it's unlikely that many would go to the lengths of having a baby and manipulating income records solely to extract a few extra hundred dollars from the Government...

Kevin 747

During the election campaign Kevin Rudd was labelled ‘Kevin 24/7’ for his prodigious work rate and seeming lack of fatigue. Amusingly, he’s now been dubbed ‘Kevin 747’ for his supposed too frequent overseas trips. According to one Liberal frontbencher "he’s the Prime Minister of Australia, not the emperor”, which perhaps speaks more of his personality than propensity to jet off. However, it’s a bit reminiscent of criticisms of Blair in the early days, and there's growing rumbling about the trips, so is there anything in it?

• Too many? This was the PM’s eighth overseas trip this year (and 43rd day out of Australia). That doesn’t seem too many to me – you’d expect to have to do one or two more in your first year in office to establish yourself and there have been a number of extra things in the diary in 2008 (like the Olympics, G8 which Australia were invited to as a non-core participant, and the conference of the South Pacific leaders).
  


• Too costly? I’m sure they’ll be some ‘scandal’ in due course when a journalist FOIs and reports the combined cost of the trips. But in reality it’s likely to be a pretty insignificant amount in the scheme of things.
  


• Use the telephone? No doubt he does this too on a regular basis, but establishing the personal connections is pretty vital especially when new in office.
  


• Ignoring domestic priorities? The PM has a cabinet team of 18 ministers focusing on the domestic side, so Australia’s not going to fall apart because he’s out of the country for a few days. No doubt he’ll also be taking a whole host of domestic briefs with him, and his officials will have been tasked up with things to have ready for his return. In any case, the pretext to the current trip to the US – on the financial crisis – is a good example of where foreign and domestic issues overlap.
  


• Not the role of the PM? Unfortunately there aren’t many elected emperors to compare with whether or not foreign trips are what PMs should be doing. But try the opposite – would you want a PM just sitting brooding in Canberra rather than getting out and about and bringing new ideas back to the country?

Compulsory voting

I discovered today that Australia’s well-known compulsory voting first began here in Queensland (in 1915) before being enacted nationally after the First World War. Australia is actually one of the few countries that not only makes it compulsory to vote but also enforces it, although the fines look pretty small at $20 a pop.

The arguments for compulsory voting seem to be that you get a better representation of the public (and hence presumably policies are more reflective of society), and that it ensures everyone is doing their ‘duty’.

I’m not convinced though for a few reasons:

• First, voting is a right not a duty. People might have died in defence of democracy, but that doesn’t mean you should be forced to participate in it against your will. In a liberal society you should have the freedom to opt out of decision making. Indeed, by not voting it could be interpreted as you implicitly saying you are broadly satisfied with how things are – with your right to vote a future safety valve if and when things get too bad.



• Second, if one is worried about representation there are probably better ways to increase turnout that avoid the costs of compulsory voting. Like postal ballots, e-voting, more conveniently located ballot boxes, lengthened voting periods, targeted campaigns on underrepresented groups, lottery rewards and so on.



• Third, forcing everyone to vote means the median voter will be significantly less well informed than in non-compulsory systems and may skew the sophistication of debate downwards. Imagine you lined up a randomly selected group of 100 people by order of how interested and knowledgeable they were about politics. In a compulsory voting system the median voter, and hence the level at which the terms of debate would likely revolve, would be the 50th in line. I’d imagine by the time you’re getting this far down they would be unlikely to have clue about what the parties actually stand for, the virtues of different policy approaches or perhaps even able to name any political leaders. For example, a few years ago a survey found 42% of British people were unable to name a single member of the Cabinet. Clearly, a lot of people just don’t give a damn. In non-compulsory systems we seem to be converging on around 60% of the electorate voting in a post-cleavage society. So the median voter is then the 30th in line – which is probably getting a bit closer to people who have a reasonable knowledge of what they are actually doing in the ballot box.



• Fourth, compulsory voting increases the likelihood of the ‘donkey vote’. This is where people vote solely on things like the order the candidates are listed in. A good example of this was the Werriwa by-election near Sydney in 2005. In this example, the ‘Australian’s Against Further Immigration’ Party managed to come fourth out of sixteen parties, polling a surprising 4.7% of the vote after they started top on the alphabetically-sorted ballot paper.

American Journeys

I went along to the Brisbane Writers Festival today, a small but growing annual event. (Rather ironic for a collection of esteemed wordsmiths that the title glaringly omits the plural possessive apostrophe but never mind).

Most interesting was a talk by Don Watson, the speechwriter to former Prime Minister Paul Keating, author of a bestselling book on this period, and one of Australia’s rare genuine public intellectuals. His latest book, American Journeys, offers his poetic reflections travelling the US by rail.

There are a lot of obvious things to say about America but Don Watson says them with particular wit, power and charming anecdote. The main themes are America’s religiosity, boundless optimism, pragmatism and heterogeneity around a small number of very strong common values and symbols (like freedom, the flag, respect in the Office of the President).

With the exception of religiosity his talk stuck many a chord with my own reflections of Australia. Like America, there’s a palpable frontier spirit Down Under, people are judged more on what they do than what they think, the underdog is championed while success unabashedly celebrated, there are high levels of national pride, and material values and popular culture prevail.

Yet… there’s a much stronger emphasis on social welfare here, and money isn’t seen as everything, so perhaps Australia’s something more of a half way house between Britain the US. Anyhow, another good read from a smart man.

Australian innovations in education and welfare policy

Two novel additions to the policy debate today.


In Canberra, National Party member John Williams reveals his thinking on how to more actively incentivise return to work. According to the senator the unemployed need only be given a "sharp poking with a cattle prod" to get them back to work. In justifying what some of those damn wooly liberals might consider a little too harsh a treatment Williams argues "the family farm cannot afford to pay wages when the person never shows up for work." Quod erat demonstrandum.


More details to be found here.



Meanwhile, Queensland parliamentarian Rosa Lee Long has today put the case for reintroducing corporal punishment in schools. According to Rosa, while the current "go soft" approach has failed, a "short, sharp caning" would be much more effective. Apparently, it's a "great deterrent". More details on her proposals here.

Rapid demise of the NSW Strategy Unit

More positive feedback following my visit to the now collapsed NSW Government in the papers (see post on strategy and subsequent collapse) :


"Several sources have told The Daily Telegraph that in the government's dying days Mr Walters spent more time in Ms Meagher's office than he did at his office in Mr Iemma's newly created "Strategy Unit".

The outfit, whose four weeks of operation still sends even the most hardened political insiders into hysterics, was immediately abolished by the new Government."

Another success in spreading the brand...

A Flawed Federation

Various folk from across Australia's political and policy world met last week at a grandly titled ‘Making Federalism Work’ conference organised by ANZOG (the Australian and New Zealand School of Government).

This was one of the most high profile of a raft of constitutional debates going on at the moment, all of which have been highly amusing to watch as an outsider. Everyone pretty much acknowledges there’s a major problem, but tred softly in suggesting how to solve it. What’s making it increasingly unsustainable though is having an active and progressive Labor administration in the form of Kevin Rudd in Canberra, where the previous Howard government stumbled through with the status quo because they had few ambitions.

What exactly is the problem?

• Vast duplication of roles: there are nine parliaments in Australia, each with their own entire government bureaucracy. (Note: under which there a further 673 local governments). So that’s nine police ministers and nine separate departments filled with bureaucrats each working on their own policing policy. In a country of 21 million people there just isn’t the talent to spread around either the political or bureaucratic arms – which is why you end up with dodgy politicians and poor performing public servants.
  


• Lack of policy coordination: different states often create radically different policy frameworks. That does give rise to some innovation, but is a major drag on productivity. For example, many states pursue highly protectionist policy – so qualifying in a trade in Victoria doesn’t necessarily mean you can practice that trade in New South Wales, which will have different qualification levels, professional associations and accrediting bodies. One estimate has put the various costs to the economy at $9bn a year.
  


• A political ‘weakest link’ game: even where is genuine desire to coordinate policy, in practice it requires the will of all the nine political governments to implement. This is a major barrier to progress, for it only requires one government to veto a policy for it to be held up (which happens all too often with governments of different political stripes).
  


• Funding not aligned with accountability: this is unnecessarily jargonised as ‘vertical fiscal imbalance’ but basically means the Commonwealth government control a lot of the funding but the States do most of the delivery of public services. So in the end neither level of government is properly accountability to the electorate – with an inevitably resulting political ‘blame game’ between the two.

The defenders of the Federation

A number of mostly bizarre arguments are made in the defence of the status quo. Though dressed up in different forms the basic argumentation goes:

• “Australia is such a varied and geographically huge country you need different governments to address the different needs.” This is odd, because the main point should not be size but rather diversity. In fact variations in service delivery challenges in Australia seem to me to be predominately within rather than between states. So Sydney (in New South Wales) and Brisbane (in Queensland) have much more common than the very rural and remote towns in each of their respective states. Australian states are much more homogenous than many regions of other countries.
  
  
• “It’s not inefficient as stands because we spend less of our national income on government services than other countries.” This is even odder, for efficiency is not generally about how much you spend but how good you are at spending it. Australia does spend less per head on public services than say France with its unitary government, but that’s mostly a function of the social preferences for a greater role of government than efficiency per se.
  


• “If we raise more money locally we can solve the accountability problem”. Sounds simple but raises another problem which is that tax and revenue transfers at the Commonwealth level help address some of the different rates of disadvantage and poverty between regions. Or horizontal fiscal imbalance if you will.
  
  
• “Can’t we just devolve everything?” This is known as subsidiarity, and is an argument commonly employed by the States. It’s a slightly odd argument to use for two reasons. First, in its derivation from the EU Maastricht Treaty it should properly be discussed as the subsidiarity principle. It’s a principle because one is supposed to apply some tests to when and where it should be applied. Applying them correctly won’t always lead one to conclude everything should be devolved. Second, the States seem to forget there are 673 local governments beneath them – if it’s so great to devolve power down then why stop at state level?

Garnaut Report on Climate Change

The long-awaited Garnaut report on targets and trajectories on climate change was released this week. Its central recommendations are:

• Support for a target of 550 parts per million of concentration of greenhouse gases in the atmosphere.


• Australia to cut greenhouse emissions 10% by 2020, and 80% by 2050, in order to curb the effects of climate change.
  
• A fixed carbon price of $20 per tonne between 2010 and 2012, settling at $23 after 2013 and rising 4% annually (plus the percentage increase of the consumer price index).

Bizarre comment of the day from Australian Industry Group chief executive Heather Ridout:

“…cost rises in this range would test the viability of many businesses and would give rise to significant restructuring.” Errr, yes restructuring of the economy is the whole point.

Two charts caught my eye. The first shows the per capita convergence different countries would need to make in order to reach the 550ppm scenario. I hadn’t realised Australia was the highest per capita emitter at two-and-a-half times average EU levels. So adjustment here will clearly be very painful.

Second, the chart that points to that very tellingly, is a costs and benefits model to GDP growth of mitigation to 550ppm. It’s all costs well into the 2060s before benefits start to come on line. Like the Stern Report, it then uses two dodgily low social discount rates of 1.4% and 2.7% to determine the cost-benefit of mitigation finding a net cost of around 1% of the economy over the 21st century.

Garnaut asks: “Is this worth paying… for the benefits, insurance value and the enhanced value beyond the 21st century?”. I know we always accuse people of being myopic but really expecting the case to be sold on net benefits accrued to four or more generations in the future is quite an ask.

So with the economics ambiguous at best Garnaut pulls some heart strings, suggesting even some of the mitigation scenarios would be expected to lead to the destruction of the Great Barrier Reef and other coral reefs and lead to (more) species extinction. Very disturbing of course but I thought that it a little odd to appear the next page after the not so great findings from the macro model.

Over to Lord Giddens at the LSE and Policy Network next on the ‘Politics of Climate Change’ who among other things are looking at the implications for social justice.

Australian Politicians

More dismal evidence of the low bar for antipodean political office today…

The Police Minister in the already embattled New South Wales Government (see previous post) has been forced to resign. According to news accounts from witnesses, Minister Matt Brown:

“Stripped to his ‘very brief’ underpants” and then “mounted the chest” of fellow Labor MP Noreen Hay. He then simulated a sex act on Ms Hay, shouting to her adult daughter “"Look at this, I'm tittie-f****** your mother!”. Really quite shocking.

The Minister had been given an initial warning from the Premier, but has today been forced to resign. (Incidentally he denies the exact quote but admits the sex act).

A few other examples:

• The chair-sniffing tendencies of the former WA Leader of the Opposition, Troy Buswell
  
  
• A NSW Parliamentary punch-up in 2005 where one MP had to be dragged out of the building by the serjeant-at-arms
  
  
• The Aboringal Affairs Minister in NSW now serving a 13-year sentence for drug and child-sex offences.
  
  
• Widespread fraud and sleaze like the bungs and backhanders that led to the 2006 resignation of the Tasmanian Deputy Premier.