Thursday, March 24, 2005

Reform?  Just go back to basics

The 300th anniversary of the death of the English philosopher John Locke last year passed in Australia without much comment.  Few would have noticed the one or two academic symposiums that were held to commemorate the work of the single most important theorist of liberalism.

The 150th anniversary of the Eureka Stockade also occurred last year.  The fact that the actions of a few inebriated miners who burned down a hotel and then barricaded themselves in a stockade to avoid being arrested were celebrated with an extravaganza of government-funded parades and public lectures says much about the nation.

Over the last few months many federal coalition MPs have been privately (and publicly) pondering reform to a number of policy areas, including tax and industrial relations.  In the coming days they will also be thinking about what book to read over their Easter holidays.  Hopefully, in addition to packing away their obligatory copy of The Da Vinci Code, at the same time some MPs will put into their suitcase Locke's Second Treatise of Government.  Written in the 1680s, Locke's classic work remains absolutely relevant and it sets out a number of the key principles that should guide the government's reform program during its fourth term.

In his First Treatise of Government Locke demolished the notion that rulers had a God-given divine right to do as they wished, and in the Second Treatise he established a framework for a government that would operate with the consent of the people.

According to Locke, few people would willingly consent to a law that applied differently according to an individual's status, and therefore there should be one rule for the "rich and poor, for the favourite at court, and the countryman at plough".  Similarly, citizens could hardly be expected to consent to laws that they couldn't easily understand.  He remarked that simple laws not only encouraged greater compliance, they also allowed citizens a greater oversight of government activities.  The knowledge that the people were watching them ensured that rulers were not tempted "by the power they have in their hands".

On almost any measure Australia's current tax system (and our superannuation system) fail John Locke's test of good law.  As commentator Geoffrey de Q. Walker has identified, in the 1940s Australia's federal income tax legislation was 81 pages.  Today it numbers 13,500 pages.  It is beyond the capacity of any taxpayer to comprehend the laws which by which they are expected to be bound.

Simplifying the administration of our tax and superannuation systems must be a priority of the coalition.  At least some of the motivation for the push to reduce personal income tax arises from the frustration that there hasn't been a serious attempt to improve the intelligibility of the existing system.  Paradoxically, it appears that it is easier to cut taxes than it is to cut the regulations governing their collection.

A central concern of Locke was to explain why private property should be protected.  What was revolutionary about Locke's position was his claim that "every man has a property in his own person".  Individuals had the right to the product of their own labour and had the right to dispose of their own labour as they saw fit.  The alternative to this, as Locke didn't hesitate to point out, was slavery.  These are principles we've managed to lose sight of.  Part of the reason that industrial relations legislation has become so complicated is because for nearly a decade successive coalition ministers have tried to amend a century-old system that was not based on protecting the rights of individual workers (and those wanting to work), but that instead was created to ensure the convenience and privilege of union and employer collectives.  The best way of ensuring that workers have property in their own labour is by allowing them to determine the conditions under which they sell their own labour.  And the way to implement this is through a common-law contract of employment that embodies the agreement of two parties free from the interference of others.

If over Easter this year a few coalition MPs were to read the Second Treatise, and if in the coming years some of the ideas it contained were put into practice, then in 27 years' time we could all properly celebrate the 400th anniversary of John Locke's birth.


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