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Dec 20, 2011

The 2011 Crikeys: the government policy hits and misses

2011 was the biggest year in economic policy for a long time - which isn't saying much. What was best and worst?

After years of reform drought, 2011 turned out to be one of the more productive years for economic reform. But only up to a point: each of the big set-piece reforms put in place by the government were flawed and undermined by politics and successful fightbacks by rentseekers and special interests — the states, the mining industry, big carbon emitters. This would have counted as an average year for reform in the 1980s and 1990s.

Still, there’s a context for everything: when the rest of the developed world is seemingly incapable of balancing their own budgets, a government committed even to the bare bones of continuing reform looks good by comparison. Indeed, some of the strongest criticism of the government from non-political sources this year was for its insistence on returning the budget to surplus next year. Strange times we live in when the business sector whinges about a Labor government’s fiscal rigour.

And after 2010, in which the quality of economic debate went significantly backwards (Andrew Robb’s infrastructure bonds proposal honourably excepted), we’ll take what we can get. So who did best, worst and why?

Best policy achievement

The best policy package put together this year is Bill Shorten’s Future of Financial Advice reforms (which Chris Bowen initiated), designed amongst other things to end the long-running rort of commissions for financial advice on superannuation and the conflict of interest of financial planners spruiking in-house products to clients. If implemented, the package will be good for the retirement savings of millions of Australians and good for future budgets. But it remains unpassed, and the gullibility of the independents, who appear to have been swayed by a self-interested campaign by financial planners, and the cynicism of the opposition, which allows financial planners to dictate its position, may yet cruel the hopes of Australians for a better super and wealth management system.

The carbon pricing package therefore gets the gong, despite being deeply flawed. The deep irony of the package is that after as varied a line-up as John Howard, Kevin Rudd, Malcolm Turnbull and Tony Abbott all supported or promised a carbon price, it was Julia Gillard — who explicitly ruled one out — who delivered it, albeit in a form in which much of the heavy lifting of the long-delayed decarbonisation of the Australian economy will be done by less-efficient direct action measures favoured by the Greens and the opposition. Nonetheless, for a painfully carbon-addicted economy like Australia’s, it is way past time that a structural mechanism for curbing the addiction was put in place. That’s now been done, in however flawed a fashion.

Worst policy failure

No contest: asylum seekers. This was a huge failure politically for Gillard (and Bowen), but more importantly a failure of moral courage by the entire parliament. We’re fortunate in Australia: rare is a public issue in this country for which the cost can be counted in lives. A successful economy is critical; our health system crucial to our quality of life, our education system a vital aspect of civil society and the economy, but our asylum seeker policy –such as it currently is — is prompting people to place their lives at risk to come here, and many are dying. It is in our hands to reduce, if not eliminate, that tragedy, but our parliament does nothing.

Biggest legislative win

One of the few unalloyed successes of this government has been its record of getting legislation through parliament. Its Migration Act changes were atypical: this is a government adept at securing support for its bills. It saved the best until last, securing the passage of its mining tax (profoundly flawed, but anyway) through the House of Representatives with some minor tweaks and some money for the independents. It was a classic piece of legislative horsetrading to give Gillard her “year of decision and delivery”. For all the predictions about instability and uncertainty, this minority government has a legislative record not much shy of standard-issue governments without a Senate majority.

Best public policy report

It’s a rare thing that can achieve bipartisanship these days, but that’s what the Productivity Commission managed with its report on a national disability insurance scheme. Typically hard-headed, the PC nailed the deep flaws of the current hotchpotch of support systems: “The current disability support system is underfunded, unfair, fragmented, and inefficient, and gives people with a disability little choice and no certainty of access to appropriate supports.” It did exactly what the PC and its predecessor bodies are best at: framing the debate and laying the groundwork for major reform by demonstrating the costs of current arrangements and proposing a solution, which will form the basis of the government’s reform efforts on this front in coming years and which will hopefully be picked up by an incoming Coalition government.

Most influential think tank

Public policy is now contested more than ever. No economic issue can creep onto the agenda without special interests commissioning the same handful of economic consultancies — you know who they are — to churn out rubbish modelling designed to suit the interests of those commissioning it. Think tanks have proliferated, first on the Right and then the Left, feeding the media cycle with reports and op-eds. The economic forecasts of private sector firms are treated as Holy Writ by the media. But amongst it all, the Productivity Commission remains one of the most important players in Australian public policy: independent even of government, forthright, and accused of bias only in relation to the vigour of its economic rationalism.

You only have to look at who hates the PC to know it’s on the side of the angels: crass populist and economic xenophobe Barnaby Joyce insists he likes to use its reports as toilet paper. Except, of course, for when he agrees with them. The PC — a creation of the Howard government when it brought togther the Industry Commission, the Bureau of Industry Economics and Economic Planning Advisory Commission — is an ornament to public life in Australia.

Stupidest report

As economic consultants proliferate and their confected numbers about job losses, economic impacts and squandered GDP are sprinkled around like confetti, it’s difficult to single out a single report that more than any other laid on the stupid.

But there is one — from one of the biggest sources of garbage “independent” reports, the copyright industry. Time and again this industry — one of the world’s most powerful cartels, who still make billions from gouging Australians — has vomited into the media cycle absurd claims about the impact of filesharing. In March, the Australian Content Industry Group produced a doozy: a report on filesharing that claimed it cost the Australian economy $900 million a year.

ACIG released excerpts of the report, but not the report itself, to Fairfax for a Sunday paper splash and then sat on the report for over a week. When it was finally released, the reason for ACIG’s reluctance became clear: the report did no work on filesharing levels in Australia but simply applied the conclusions of a wholly discredited European report to our own market. Even by the standards of Big Content, it was a howler.

*Later this week: the Crikeys award the best (and worst) in media, business and culture

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46 thoughts on “The 2011 Crikeys: the government policy hits and misses

  1. Modus Ponens

    The food and grocery council’s ‘report’ on the impacts of the carbon price on food is also a contender for the stupidist report.

    They refused to release their assumptions behind their claims that costs would skyrocket and Media watch gave them a great serve – but all too late. Shock-jocks had used their report to push misinformation into the community….

  2. Wallace Scott

    Yeah, I think on asylum seekers policy the government is held hostage by the ideological left Greens as well as the politicking of the ideological right. It fails to achieve its goal and keep kicking the can down the road instead of showing strong determination to produce effective policy and give the public a clear message.

    The Refugee Convention only requires us to grant refuge or resettle asylum seekers who come here directly from territory where their lives were under threat. Therefore, we have no obligation to process applications of those who did not come here directly from the place of danger. The law is that way so that responsibility can be spread around amongst nations and no nation has to bear the overwhelming burden if everyone decides to go to that particular country to claim asylum, meanwhile it still remains its role of ensuring safety for those who are fleeing present danger and avoid things like what happened to the Jews when they were fleeing during WWII. This does not mean only people from our neighbouring countries are able to get here should they be underthreat, we do grant refuge for people who flew in from far away countries as well as picking up refugees around the world. It is legitimate for us to either make indirect comers who came here via a safe place wait longer or send them overseas as a deterrent measure as long as the living condition is adequately humane. That’s my interpretation of the law anyway, then again I was in different field of legal studies when I attended university.

    Turning the boat around is illegal, it also totally contradicts and destroys the credibility of the argument that we employ such policy because we care about their safety and don’t want them to drown since the boat can become leaky or the weather can be too dangerous at sea. We have to let them in in order to find out where they have come from first to be able to determine whether they are eligible or not. If they are found to be ineligible then we are allowed to transport them safely overseas where conditions are adequate. Swapping with Malaysia with such ratio is increasing intake and responsibility in the region giving more lives a better future although superficially it looks badly opportunistic; it is Nauru which is a bankrupt opportunistic country who provided very poor condition to the refugees while taking a lot of money from us. Waiting time is the real deterrence since people get on the boat to get here in order to speed up the process so they don’t have to wait or keep waiting to be resettled, and this is the major reason why Nauru worked in deterring people. Nevertheless, the refugees sent to Nauru ended up in Australia and NZ anyway because other countries have their own refugee intake programs and they were not interested in our problem, while some Australian church also documented about 11 Afghans got sent home and were killed by the Taliban. These days asylum boats travel as far as Canada, it isn’t hard for them to navigate to Nauru or to enter Australian water so just to be transferred to Nauru by the Australian navy. The increase in the distance only increase the risk of drowning incidents.

    I don’t think people should be so an*l about Malaysia. Many people like travelling to Malaysia, it is a great place, my friends are proud Malaysian nationals eventhough they are not of Malay stock. Certainly the concern about conditions and rights for refugees in Malaysia is needed but the government has already negotiated conditions for the asylum seekers, then the critics say that it cannot be guaranteed. Can our government guarantee that there will be no more death in custody in Australia, or Aborigines’ conditions will be better, or no more Indian students be bashed or killed? No need for pontification. It is possible for the government to fool proof the deal with Malaysia by requiring the housing location be within adequate services, and possible amendment of the law if necessary to make it legal. If people insist on the country be a signatory to the Human Rights Convention then there is PNG, the unaccompanied minors can be sent there and be under the care of Australian & PNG staff and provided education. PNG is required if overseas housing is the preferred measure because 800 is a small number for the boat organisers to push and break so there will likely be excess of this number. Nevertheless we need to question whether the government will work with PNG to ensure proper living condition for asylum seekers.

    Deterrence is necessary to reduce the risk of people drowning and also to establish a more equitable system unlike the current system where the people with money can take advantage of the loop hole and pay a lot of money to get here on boat while the poorer have to languish in the camps for much longer. It is understandable that desperate people have to do whatever it takes to reach for a better life which we should not judge or demonise them, hell everyone wants to get ahead it is only natural. Most of us would take advantage of a tax loop hole to minimise our tax to benefit ourselves, and sometimes if not often the rich pays less share than the poor. Asylum seekers should not be attacked as non-genuine refugees just because they have money. It is normal for people to carry family heirlooms, gold, jewlery while fleeing persecution and trade them for money when they need it to survive; furthermore with modern finacial system it is very easy for relatives somewhere else in the world to help pay for something or send money. Asylum seekers should also not be blanketly attacked for not having papers, there are people who genuinely don’t have papers as well as those who conveniently don’t have paper; it all depends on each specific case. I didn’t have papers until I travelled overseas and there were times when I have misplaced them and could not find them for many moons, I also have lost my wallet quite a few times so it is not surprising if people don’t have papers when they are fleeing in a hurry and have little or no time to pack especially if they are from a village.

    The majority of Australians already understand the complexity of the situation and want a workable humane and just solution. The government needs to be strong and straight forward, be loud and clear about the reality of the situation to set the agenda to address and improve the situation. But the government must not beat it up as a crisis nor should they link this with border protection. If this is about border protection then our border is and has been majorly violated by those who come through our airports (illegal immigrants, illegal stayers as well as asylum seekers) regardless of whichever party is in government. It’s about time the politicians look at it and tell the situation as it is so everyone can move on otherwise we will be sick to death from the fear propaganda machines.

    Racist people would say they don’t want asylum seekers here because refugees depend on welfare, but the racists still will not be happy even if we allow asylum seekers in on self-dependent ground without providing them welfare. Asylum seekers are often attacked as mere economic opportunists which is unfair. Many people come to Australia for economic opportunities. Many foreigners like the Irish at the moment for example have left their homeland to come to Australia to get work and stay permanently if they could, they get their visa renewed quite easily though. Moreover the work visa and also the skilled visa which many employers want are not all about skills but quite often it is to do with cheaper labour.

    We’ve already granted many foreigners these working visas. It would be better if we reduce these numbers and award them to genuine refugees who’ve been waiting overseas for more than 1 year instead . We could let various employers sponsor them guaranteeing work, allow them to work then possibly after 4 years if feasible the government can grant them permanent residency. These refugees need it more than the better off people from safe countries, and it will relief the bottlenecked refugee situation. We went through the post war influx after WWII and it was good for the nation. It is strange now that on the one hand the government wants population growth and hands out baby bonus, and employers want to import workers but Australian attitude seems to be shunning from taking in people who are refugees on working ground to be part of the immigration, labour and economic policy.

    It is increasing the number of intake that will help to make more lives better, it’s not the preference that all of those who arrive here should be resttled quickly while the intake number does not increase and additionally enticing people to to make the dangerous journey. This is only shifting the number around, while one get speed up another is punished and have to wait longer overseas. If a couple of people in need of help knock on our door, one of them we’ve made previous pledge to help and the other we didn’t. We would help the one we had a pledge to help first and should be able to tell the other to have a seat and wait, you are safe now and it is not as urgent because we have many people overseas in desperate situation for years who have asked us for help and we’ve planned to help them before you’ve turned up here.

    That’s my tuppence worth, going to the country away from the same old political noise, hope them pollies won’t give us the same boring stuff next year. Auld lang syne.

  3. GeeWizz

    [“It was a classic piece of legislative horsetrading to give Gillard her “year of decision and delivery”. For all the predictions about instability and uncertainty, this minority government has a legislative record not much shy of standard-issue governments without a Senate majority.”]

    Yes Bernard, but I wouldn’t say Gillard is a great negotiator, rather a great capitulator.

    She has backflipped on everything Labor stands for to keep the Greens in check. No Carbon Tax under the government I lead, then introducing a Carbon Tax. We’ll only send boaties to a UN Refugee Signatory Country, then she tries sending them off to be caned in Malaysia a non-signatory.

    Labor doesn’t stand for anything anymore, all they stand for is themselves and keeping themselves in power for as long as possible… and the punters know it.

  4. Edward James

    Australian taxpayers who paid to put our constantly failing medical infrastructure in place, also put their lives at risk attending these run down and understaffed hospitals. That growing problem is an on going policy failure which is owned by both sides of successive governments, a problem for so long it is becoming generational. Edward James

  5. GocomSys

    Just couldn’t care less what Keane has to say! Time to commence his job with Limited News!

  6. Schnappi

    Shadow Ministers are paid heaps,but seems all they do is parrot abbotts NO,with no input from their own portfolios,abbott could reduce the shadow ministries and stop the waste.
    The reason abbott will not reshuffle or reduce ministries is he would be finished now ,instead of later,at least the PM had the guts to reshuffle,abbott has no guts at all,just a wimpy opportunist.

  7. shepherdmarilyn

    Why do you call them boaties? They only take the boat because they have no choice other than stay in jail in INdonesia or get home.

    They are asylum seekers, people who are looking for and not getting international protection under the refugee convention.

  8. GeeWizz

    [“Why do you call them boaties? They only take the boat because they have no choice other than stay in jail in INdonesia or get home.”]

    How did they get to Indonesia Marilyn?

    Come on… give us some facts girlie

  9. Thorn

    Boaties or whatever you want to call them are asylum seekers. They have a pefect legal right to arrive in this country by any means they can and ask the Australian Government for asylum.

    This constant referral of them as illegal by Abbott and the right wing media is a further attempt to vilify these people, just as Howard did in the Tampa days.

    Australia does not have the right to turn these people away, it has a duty to care for them until their status is determined, and to resttle as many as it can once they are determined to be refugees.

    I agree that their getting on boats and sailing here is dangerous and should be discouraged, but there is no way that Nauru will ever be more than a Pacific Island stopover on the way to Australia in the future, and Malaysia (althoug it would be a genuine deterrent) does seem to need a bit more work before it is a reasonable solution.

    In the meantime, why can’t we just look after these people?

  10. Thorn

    Oh and Politics is the art of the possible, and under the particular circumstances that Gillard has faced as PM she has done a remarkable job. Minority Government is about compromise, without doing this she would have not been able to impliment many, if any, of the policies mentioned above.

    Credit where it is due please.

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