Mining pays its way

To blame Martin Ferguson for all the ills of the Rudd-Gillard government as Richard Denniss has done highlights exactly the credibility problem the government faces.  The government simply doesn't understand why business mistrusts it so much.

Rather than denigrate the contribution that mining has made to the Australian economy we should encourage an industry that is growing and providing employment opportunities in an otherwise somewhat stagnant economy.

There a view that mining doesn't pay enough tax — yet that view is simply wrong.

The mining industry pays substantial tax.  According to the latest (2009-10) ATO data, the mining industry with a taxable income of $23.8 billion, paid $6.8 billion in net corporate income tax (excluding royalties) at an average effective tax rate of 28.5 per cent.  Mining was the second largest contributor to corporate income tax revenue after Financial and Insurance Services that paid $15.9 billion out of taxable income of $72.3 billion with an average effective tax rate of 21.8 per cent.

It is simply not true that miners have shirked their responsibility to pay taxes.  Indeed they pay taxes on top of state royalties.

So the notion that Ferguson's legacy is a budget shortfall during a mining boom is somewhat misleading.  True, he was a cabinet minister at a time when the government proved incapable of balancing its budget but the blame must be shared around.

The expansion of the mining industry and the resources that are being attracted to the industry are a capitalist economy at work.  We are seeing exactly what should happen under specialisation and the division of labour.  Those industries where Australia has less of a comparative advantage are shedding resources to the mining industry.  This works through increased prices and wages.  It is remarkable that Denniss is able to portray this process as being some sort of anomaly or mistake.

The most frightening aspect of Denniss' anti-mining screed is his view that a ''monopolist'' would manage the Australian mining sector differently to how it is currently managed, as if that were a good thing.  Denniss suggests that the resources minister should act as that monopolist would.  Here Denniss is criticising Ferguson for not being a communist!

Just as public ownership of the commanding heights is a failed experiment, so managing private assets for the public good is an economic experiment that has been tried and failed.  Adam Smith famously said that he has never seen any good come from those who profess to act for the public good.  Little has changed in the subsequent 240 years.

Australia is highly reliant on foreign capital and foreign investment.  It is an unaffordable luxury to indulge in the kind of xenophobic characterisations whereby it becomes acceptable to demonise mining because it is largely foreign owned.

Rather than bemoan the fact that a minister had a deep understanding of his portfolio area and the economy, it would be an improvement if more ministers had those same characteristics.

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Anything you don't say may be used against you

The first sentence of the press release announcing the New South Wales Government's changes to the right to silence read:  ''The scales of justice will be tilted towards common sense.''

Yes, ''common sense''.

We should be terrified when professional politicians start talking about common sense.  Rights are always undermined by euphemism.

The O'Farrell Government's right to silence changes passed the NSW Parliament last Thursday.  From now on, NSW Police will qualify their standard police caution ''you are not obliged to say or do anything unless you wish to do so'' with this sentence:  ''But it may harm your defence if you do not mention when questioned something you later rely on in court.''

In other words, you're welcome to stay silent, but you might regret it.

Juries will be allowed to ''draw an unfavourable inference'' from the fact that somebody decided to remain silent before a case got to court.

Courts have identified two parts of the right to silence.  The first is your right to say nothing when being questioned by the police.  The NSW reforms do not directly remove the right in this first sense.

The second part is the right not to have that silence used against you at trial.  And it is this right that has been comprehensively trounced by the changes.

What good is a right if you are told you could well be punished for using it?  The second part of the right to silence gives substance to the first part.  It is disingenuous to suggest otherwise.

Most serious analyses of the right to silence are done by legal academics.  Understandably, they focus on how judges and courts understand the right.  So we get a lot of discussion about famous cases and High Court appeals and jury instructions.

But much of this misses the point.  The Government has been transparent about what it believes the purpose of its reforms are — not to alter the way courts think about the right to silence, but how accused people think about it.

A police interrogation is presumably an uncomfortable occasion, whether you are guilty or innocent.  When the facts of a case are unclear, the accusation is unclear, the accused may be confused, intimidated, and off-balance, the new standard police caution becomes little more than bullying.  How are they supposed to know what they will later rely on in court?  How specific will they have to be?

What was originally an unambiguous protection for people accused of a crime — if you are unsure of yourself or out of your depth, stay silent until you can fully consider your legal position — is now vague and imprecise and threatening.  The fact that a lawyer must be present is no comfort.

This piece in the Conversation on Friday makes it clear how devilishly complex removing the right to silence can be.  The NSW changes are based on a similar reform in the United Kingdom back in 1994.  The new doctrine has become a ''notorious minefield'', yet has had no effect on conviction rates.

The right to silence is one of the more unloved rights.  It is being slowly written out of the legal canon.

The police don't like it.  One paper published in 2000 in the Australian Federal Police magazine argues that the development of the right to silence was simply ''an over-reaction to tyranny''.  That tyranny was the early modern English star chamber, which used torture to coerce suspects to talk.

But then again, there's probably loads of evidentiary rules and accountability requirements that some police think get in the way of speedy convictions.  That a legal protection is often used is no reason to get rid of it.

And politicians don't like it.  Obviously, elected officials adore a good law and order crackdown.  The upside gains are huge.  Nobody likes crime.  The downside risks are tiny.  Civil libertarianism doesn't swing elections.  Even federal politicians are desperate to get in on the action.  Julia Gillard told Western Sydney she wants to fight gangs.  Tony Abbott wants to roll out CCTV surveillance.

The push against the right to silence isn't limited to criminal procedure.  There were no less than eight pieces of legislation passed in the Commonwealth Parliament last year that limited this crucial right.  (I wrote about one of those — an anti-illegal immigrant bill — on the Drum in September.)

Earlier this month, the NSW Attorney-General Greg Smith said that the changes would make trials ''more efficient''.

What a horrible thought.  The entire English criminal system is designed to make it hard to convict someone.  What Greg Smith calls inefficiency is better called protection of the innocent.

Beware elite technocrats and their open disdain for democracy

The draft of the proposed European Union constitution in 2003 included this quote, from ancient Greek historian Thucydides:  ''Our constitution ... is called a democracy because power is in the hands not of a minority but of the greatest number.''

That quote didn't make the final version of the constitution (which was rejected in 2005).  A good thing too.  It would have been cruelly ironic.  The European Union is the exact opposite of Thucydides' ideal.

Modern Europe shows just what happens when societies grant extraordinary power to elites and technocratic experts.  Europe's slow-burn sovereign debt crisis is exposing a massive chasm between the elite who run the European Union's political and economic institutions, and the European citizens who have to live with their decisions.

Last weekend, citizens of Cyprus learnt all their bank accounts were going to be subject to a one-time tax of at least 6.7 per cent in return for an economic bailout.

The deal was presented as a fait accompli, negotiated between a new Cyprus president (he'd only been in the job a few weeks) and a bevy of banking officials and European bureaucrats.  Approval by the Cypriot Parliament was to be a mere formality.  It had all been decided.

But the bailout deal fell apart last week in the face of a massive popular backlash.  People in Cyprus are like people all over the world.  They don't like it when the government steals their money without warning.  One of the chants heard outside the Parliament was:  ''They're drinking our blood.''

It has long been understood that the European Union has a democratic deficit.  But that deficit is cripplingly obvious now that the continent is deep in economic crisis.

Indeed, much of the original idea for the European Union itself was fundamentally anti-democratic.  After World War II, European statesmen worried that voters were too easily manipulated.  This was a reasonable feeling at the time; Adolf Hitler did very well at the ballot box.

So the structure of European governance was explicitly designed to be full of unelected positions, as far removed from actual voters as possible.  But operating out of sterile tower blocks in Brussels, Eurocrats have developed an active disdain for democracy.

As the president of the European Commission, Jose Manuel Barroso, has said:  ''Decisions taken by the most democratic institutions in the world are very often wrong.''

Of course, nobody has suggested otherwise — but so what?  The choice isn't between making the right decisions or wrong decisions.  It's whether the citizens run the government or a cadre of elites do.

Anyway, the most tragic mistake made by Europe in recent decades wasn't a national one.  It was the euro currency — narrowly pushed through a series of referendums in 1992.

The euro has trapped 17 countries together in a spiral of doom.  Some will survive the landing.  Rich and prosperous states such as Germany will be fine.  Others, such as Cyprus, Italy and Greece, have learnt that by joining the eurozone they've handed over their sovereignty to Brussels and their economic policy to Frankfurt.

And when the global financial crisis hit, these latter countries discovered that European authorities held extraordinary power over them.

In 2011, Greek prime minister George Papandreou proposed a referendum on a bailout package his country had been offered.  He was quickly forced to step down and replaced by a former president of the European Central Bank; in other words, a European bureaucrat from central casting.  According to British politician Daniel Hannan, this was nothing less than a coup d'etat.  Recall that Greece is the cradle of democracy.

Of course, it was always obviously absurd that such economically disparate countries would be able to share a currency.  The euro was condemned from left to right.  Both Milton Friedman and Paul Krugman were vehemently opposed.  But whether it would work wasn't the point.  There has always been a belief in Brussels that European integration is the most important political goal imaginable.  European integration is an ideological project pretending to be an inevitability.  Few can be more ideological than technocrats.

You can understand why people think handing power over to experts and political elites sounds appealing.  We tend to talk about public policy as if it is merely a question of matching a problem to its best solution — the only challenge is finding that solution.

You hear such sentiments in the business community all the time.  If only we could get politicians out of the way and just get things done.

That's the theory behind all these supposedly independent government agencies we have in Australia.

But if you want to see what happens when you hand too much political power to experts, have a look at Europe.  It's not pretty.

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Gillard's legacy: what not to do

Isaac Newton's Third Law of Motion doesn't apply to Australian politics — ''For every action, there is an equal and opposite reaction''.  But Julia Gillard might have changed that.

There's a good chance Gillard's legacy will not be what she did, or what she attempted to do as PM.  Instead her legacy will be what she prompted an Abbott government to do.

In Australian politics, once something is decided, it tends to stay that way.  The massive increase in the size of government under Gough Whitlam wasn't reversed by Malcolm Fraser.  The economic liberalisation of the 1980s of Bob Hawke and Paul Keating certainly wasn't going to be reversed by the Coalition, and even Wayne Swan, try as he might, can't unfloat the dollar.  The GST reform of John Howard and Peter Costello hasn't been touched by Labor.

But when it comes to the Gillard government, the situation is very different.  So many of its policies have been so bad or so deeply unpopular, there's simply no way they will be perpetuated by an Abbott government.  For example, no major political party will enter into an alliance with the Greens any time in the foreseeable future.

Kevin Rudd and then Gillard destroyed (fortunately) any chance for Australia to have an emissions trading scheme or a carbon tax that will last beyond the life of this government.  If Tony Abbott's promise to repeal the carbon tax can't be carried through the Senate if the Coalition wins the election, he'll have to risk his government in a double dissolution.

How climate change policy could have come to this, given that a few years ago emissions trading was bipartisan policy, is a question analysts will be asking for years.

On industrial relations there will be no return to Work Choices, or even pre-Work Choices from the Coalition (unfortunately).

Instead, the focus will be redirected to the operations of trade unions themselves.  Every aspect of trade union administration and governance will be scrutinised and legislated like never before.  The sort of regulations the Labor Party has imposed on company directors will be visited by the Coalition upon trade union bosses.  If any trade union leader wants to know what life will be like, they only need to ask directors of public companies how much of their time is devoted to compliance and reporting and box-ticking.

And trade union leaders can contemplate facing the sort of personal liability company directors must deal with.

Under an Abbott government, there will be some form of National Disability Insurance Scheme — but it will be radically different from what Gillard contemplated.  It will be smaller, for the simple reason that an Abbott government won't have the money to fulfil Labor's promises.  A future NDIS is also likely to be run by the states, not Canberra, so the structure of the scheme will be developed incrementally.

Under a Coalition government, the Gonski committee's ''reforms'' to school education will be dumped (fortunately).  The setting up of the Gonski inquiry was a favour to teachers' unions from the Labor government.  The committee's report was also a gift to these unions — the extra money the committee wants to spend on schools will go to hiring more teachers, not paying the best teachers more.

There's something else Gillard has provoked in the Coalition.  She's succeeded in stirring up an appreciation that there's popular support to be gained for a political party that defends basic freedoms, like freedom of speech.  MPs on both sides of politics were genuinely surprised by the reaction of the public to the government's Human Rights and Anti-Discrimination Bill.  The bill would have been made it unlawful to express a political opinion that offended someone.

Public outrage caused Attorney-General Mark Dreyfus to abandon the bill on Wednesday.  Then, on Thursday, Stephen Conroy renounced his plans to impose new government regulation on the media.  The Coalition's George Brandis and Malcolm Turnbull mounted fierce opposition to both.

If Gillard ends up prompting from Tony Abbott an equal and opposite reaction to what she's done as Prime Minister, her legacy might not be entirely negative.

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Our freedoms safe — for now

The Gillard government's backdown on its outrageous media regulation and anti-free-speech discrimination laws is welcome.  But it's terrible that in 2013, in a liberal democracy like Australia, we even had to have the debate.

Australians should never have to worry about losing their right to free speech.  But the sad truth is that the Left has abandoned freedom of speech.  It's only because of a significant public backlash against these laws that the government has shelved its attempt for now.  This saga is a warning for all parties.  The Australian people are fed up with governments trampling on their rights.

Yesterday, Communications Minister Stephen Conroy was forced to admit the government did not have the support in the parliament to pass its media regulation package.

The laws would have introduced a government-appointed Public Interest Media Advocate to police the media.  The government even threatened to strip away the protections journalists need to do their jobs.  The change would effectively have introduced press licensing into Australia for the first time.

On Wednesday, Attorney-General Mark Dreyfus announced that the government would not proceed with the draft Human Rights and Anti-Discrimination Bill 2012, pushed by his predecessor, Nicola Roxon.

This outrageous draft bill would have made it unlawful to offend or insult a person at work because of attributes such as their political opinion, social origin or religious belief.

This aspect of the proposal represented a dangerous threat to free speech.

In a breathtaking attack on fundamental legal rights, the draft bill also reversed the burden of proof.  Those accused of discrimination would have been forced to prove they were innocent, as opposed to normal legal practice where the complainant must make out all the elements of their case.  By reversing the onus of proof, the draft bill turned on its head the presumption that a person is innocent until proven guilty.  The draft bill also proposed to force defendants to pay their own legal costs even where they won against a vexatious litigant.

Worryingly, the loudest voices in favour of these restrictions on freedom of speech came from taxpayer-funded bodies, such as the Australian Human Rights Commission.  It is a damning indictment on these organisations that they failed to stand up for freedom of speech when it was under a very real threat.

Doubly so because they were shown up by ordinary members of the Australian community whose taxpayer dollars they use to fund their incessant lobbying.

Free speech and a free press are essential to effective democracy.  It is alarming that one of Australia's two major political parties was willing to undermine such fundamental rights in a petty vendetta against media outlets fulfilling their role of scrutinising government policies.

Sale means cash for state and better power for people

Privatisation has never been popular electorally.

There is a range of reasons for this.

Many people believe a business that is under political control can be forced to provide services below cost, some feel a sense of satisfaction in shared ownership, and others consider private ownership may unduly cut costs.

In a recent survey published by Essential Media, 58 per cent of Australians disapproved of privatisation.

While ALP and Greens voters were more opposed than average, this view was also shared by 54 per cent of Liberal or National voters.

The survey indicated that Queenslanders were even more antagonistic to privatisation than others.

Similar views are seen in opinion polls across the world.

But, although such polls intimidate governments, there is no case of privatisation policy contributing significantly to an election loss and no case where privatisation has been reversed when a government lost office.

Across all countries — even communist ones such as China — governments have divested businesses they once owned.

In some cases, as with Labor's privatisation of the Commonwealth Bank in 1991, government ownership is recognised as serving no purpose and, instead, hamstringing management.

With the Commonwealth Bank, the Hawke-Keating government needed the money.

Queensland is relatively more debt-ridden after years of unrestrained government spending, a situation similar to Victoria in the 1990s.

Under Jeff Kennett, the Victorian government raised $30 billion from asset sales ($60 billion in today's money).

Electricity accounted for the bulk of this, though it also included gas, ports, trains and forests.

But in all cases, government- sponsored privatisations also recognise the greater efficiency of shareholder-owned businesses.

Government ownership brings with it poor value due to unprofitably low prices to certain customers and featherbedding with unproductive jobs.

Unions support such over-employment in heavily unionised workforces and the Electrical Trade Union has been a major campaigner against privatisation in Queensland, as it was in the southern states.

Queensland's electricity transmission and distribution providers — which own the ''poles and wires'' that deliver the product to homes, shops and factories — are among the few Australian commercial activities remaining in government hands.

A number of reviews all point to Queensland's existing monopoly businesses — Powerlink, Energex and Ergon — incurring higher costs than their counterparts in other states, especially the privatised businesses in Victoria and South Australia.

The Productivity Commission is due to issue a final report on electricity networks next month.

Its draft report estimated the government-owned networks are 80 per cent more costly in terms of dollars per kilometre of line.

The Energy Supply Association of Australia puts the networks in Victoria and South Australia well ahead of Queensland in terms of system reliability.

Examining the Queensland network businesses against suppliers in southern states, the Australian Energy Regulator points out that the Queensland operations seem to require more capital than should be necessary and persistently exceed the spending limits set for them.

Queensland consumers and businesses pay the cost of these deficiencies in higher electricity prices.

But privatisation will also allow a paying down of the debt accumulated through the excessive spending of the Beattie and Bligh Labor governments.

The audit conducted by Peter Costello estimates the sale of the electricity networks would bring in $25-30 billion.

This would eclipse the $806 million the State Government got for selling half its stake in rail transporter Aurizon Holdings and be sufficient to clear enough of the state's debt to restore a AAA credit rating and bring lower borrowing costs, as well as reducing pressures on state taxes.

Premier Campbell Newman considers he has a commitment not to privatise the electricity assets until after another election.

But every delay in this inevitable measure costs the taxpayer and postpones the improved supply that would be delivered to customers.

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Tough task to rein in spending and regulation

Tony Abbott is fleshing out his policies for government.  Hard on the heels of repealing the carbon tax and mining taxes, he has nominated spending cuts and reductions in regulation as priorities.

Australia is over-regulated and over-taxed.  And once regulations and spending programs are established they are difficult to cut.  That's because once in place they spawn interest groups that benefit from them.

Although lower taxes and deregulation mean community-wide net benefits with lower prices and more jobs, each individual measure tends to bring small gains for the average person.  By contrast each item of spending or regulation will often create beneficiaries with much to lose.  Unscrupulous politicians will pander to their interests.

This makes it excruciatingly difficult for sensible governments to reduce their share of the national cake and wind back regulation.

Last week, my report identified 23,500 underemployed public servants and savings of $25 billion a year in Commonwealth spending.  This excluded possible savings in the sensitive areas of health, education and welfare that compromises the bulk of spending.

Finance Minister Penny Wong (supposedly the minister responsible for deregulation and spending restraint) lashed out at the proposals, calling them, ''just an insight into the sorts of drastic cuts Tony Abbott and the Liberals would make''.

Treasurer Wayne Swan, a serial offender in failing to meet even his own loose budget targets, ludicrously said the proposals would reduce employment.

Over the past 40 years Commonwealth government spending has grown from 18 per cent to 25 per cent of national income -bouts of restraint by Howard and Costello have been insufficient to offset Labor treasurers' profligacy.

The growth of regulations tells a similar story.  Fifty years ago, the Commonwealth was issuing 700 pages of new regulations a year.  By 2002 this had grown to 4200 pages and last year it was a whopping 8150 pages.

Each year's regulations mostly augment the rules already in place.

In addition, there are state regulations.  New Victorian government regulations were running at 600 pages a year 50 years ago.  They reached 8,600 pages in the last year of the Brumby Government before falling back to a still-excessive 3,500 • pages last year.

Among the most onerous regulations are those involving employment conditions.

Many small businesses have experienced the difficulties involved in getting rid of a disgruntled employee.

Regulations can mean considerable costs and tie a business owner up in days of arbitration, conciliation and disruption.  This will not improve as Fair Work Australia now steps in, using our taxes to pay the employee's costs.  In a case involving Roy Morgan Research, an employee on $180,000 a year even had her costs picked up by FWA.

This week we also saw FWA, the powers of which Labor wants to increase, confirm the requirement of penalty rates at up to 100 per cent of regular rates.

These provisions were originally there to deter work outside of ''family time'' but are now simply there to boost wages.  Their presence means higher costs for consumers across the board and reduced levels of service in shops and cafes caused by employment becoming unaffordable.

Julia Gillard as the likely ALP leader at the next election means Tony Abbott will probably win.  But he will have a tough job in combatting excessive spending and overregulation.

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Plenty of fat to trim if leaders get real

Over the past 60 years, Australia, like most Western countries, has seen a very rapid growth in the size of government.  Whereas 60 years ago federal and state government accounted for about 25 per cent of the national cake, today it is 35 per cent.

In an attempt to emulate the cost savings that market forces impose on private-sector activities, governments place ''efficiency dividend'' requirements on the public sector.  Traditionally a 1.5 per cent reduction in spending each year, this was raised to 4 per cent for the current year and was expected to result in 4200 jobs being shed and a saving of $500 million.

The problem is that activist governments dream up new functions, taskforces and commissions faster than they downsize existing departmental programs.

Finance Minister Penny Wong makes tough-sounding noises about belt tightening but nothing ever seems to come of it.  And with vastly expanded education spending foreshadowed following the Gonski report and the National Disability Insurance Scheme already ''committed'', the outlook for expenditure looks to have been raised another notch or two.

The real issue with government spending is that the vast majority of it redistributes income from those the government considers are able to pay to those who are most worthy of support.  But redistribution raises costs and reduces returns, thereby dampening producers' incentives to supply.  At the same time it encourages more people to place themselves in the recipient category.

The net effect is lower growth and, as observed in those European countries with even more profligate government spending than Australia, this can deteriorate into economic decline.  Unlike the private sector, the public sector will rarely find that a program's worth is so reduced from its original rationale that it is closed down.

Accordingly, I am proposing a root-and-branch assessment of the need for existing functions.  This targets the many functions undertaken by the federal public service that offer little and sometimes negative value.

Except where duplication with state spending is concerned and where funds are spent on social research, the savings identified exclude the major health, education and welfare programs which account for some 60 per cent of government spending.

Such expenditures require political judgments and evaluations of one against another.  The best approach would be to specify an aggregate fixed proportion of gross domestic product to the funding of these worthy expenditures.

Some $22.5 billion in program savings are identified below in addition to which are $2.4 billion savings in staffing costs.  These entail 23,500 positions.  Coincidentally, shedding that many people would return the public sector to its size, relative to the aggregate workforce, in 2001.

Some of the major items include:

• More than $5 billion in foreign aid in the form of development assistance; this has never been instrumental in helping poor countries achieve economic relief and has a negative effect by focusing their administrative resources on obtaining assistance rather than transforming their economies into free-market productive entities.
• $9 billion in Commonwealth duplication in housing, environmental and community amenities:  these are state functions and the Commonwealth should leave them to that level of government.
• Privatise the ABC and SBS, saving $1.2 billion; other media outlets raise their own revenues and so should the national broadcasters.
• $2 billion in agriculture forestry and fishing; much of this deals with environmental barriers and industry-specific research activities, none of which have ever produced benefits significant enough to warrant their continuing funding.
• $1.6 billion in general research grants; while much of the basic research of the CSIRO serves genuine collective needs, increasingly research in CSIRO, the Met Office and especially in the Australian Research Council has become politically oriented around climate change and social agitation.

Many functions should be cut entirely — the Climate Change Department being an obvious candidate.

In addition, most of Sustainability and Water, parts of Education, Health and Ageing, and Transport departments simply duplicate state functions and in some cases erect additional barriers to investment activity.

An incorruptible and politically neutral public service is a vital element in creating the conditions under which national prosperity can flourish.

Unfortunately many activities have massively outgrown any original rationale they might have had while others have become politicised or focused on their own empire building.

Placing downward pressure on expenditures remains a priority and yesterday's ALP leadership vote changes nothing.

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Media reform and a missed opportunity

Has Stephen Conroy forgotten why he began this media debate?

It wasn't because of the phone hacking scandal in the United Kingdom.  Nor was it Bob Brown describing News Limited papers as the ''hate media''.

And it certainly wasn't any discernible community unhappiness about the Australian Press Council.  (Media Watch might be obsessed with newspaper codes of ethics but please try to remember that Media Watch is not a representative sample of the population.)

No, none of that.  In 2010, Conroy launched an inquiry that the communications and media sector had long been desperate for — the Convergence Review.

This review was meant to take a holistic look at the way the technological change was undermining the regulations that govern media, telecommunications, and broadcasting.  It was quite an undertaking.  We've more than a century of built-up regulatory frameworks which limit what media we can enjoy and the circumstances in which we can enjoy it.  It is universally agreed these frameworks are out of date and counter-productive.  I covered some of the issues in the Drum in 2011.

Indeed, the Convergence Review was everything the Howard government's 2006 media reform changes should have been.  It was forward-thinking and technologically aware — rare qualities for government inquiries.  Politicians like to talk about future-proofing but they're always focused on the politics of the day.

(There was a smaller, now-forgotten review into converging media back in the days of Richard Alston.  Nothing came of it.  The government was mired in the grubby politics of the switch to digital television broadcasting.)

Sixty-nine separate organisations, from Skype to Blind Citizens Australia, gave submissions on the Convergence Review's draft terms of reference alone.

The review released five comprehensive discussion papers and one interim report.  There were hundreds of submissions along the way.  There were public hearings in eight cities.  The final report, published in March 2012, was 200 pages long.

I don't want to be too complimentary.  That final report had many problems.  It had been given an impossible task.  The Convergence Review had to a) radically overhaul the current regulatory framework to meet future challenges, and b) please all beneficiaries of the existing system.  These two demands conflict.  And then it tried to shoehorn itself into the debate about newspaper standards, exceeding its mandate and undermining its broader purpose.

Nevertheless, from a purely public policy perspective, dealing with the winds of change brought about by technological innovation was the main game.  It still is.

We have to be much less generous about the Independent Inquiry into Media and Media Regulation, known as the Finkelstein Review.  The end result — a 400-page report that traversed history, sociology, political science, psychology and media studies at a barely-undergraduate level — was in equal parts patronising and authoritarian.  It recommended extraordinary government regulation of the free press.

Still, very little of all that effort comes out in the final media reform proposals.  Last Tuesday Stephen Conroy supposedly announced his response to the Convergence Review and the Finkelstein review.

The Government wants a new Public Interest Media Advocate to regulate newspaper standards bodies (like the Australian Press Council) and to impose a public interest test on media mergers.  He also wants to legislate a permanent cut in broadcasting licences, marginally increase Australian content requirements, and to tinker with the ABC's charter.

Conroy says we've spent the last few years debating media regulation but these proposals are entirely new.

There's no ''Public Interest Media Advocate'' in either the Convergence or Finkelstein review.

Admittedly, the idea of a ''public interest test'' did appear in the Convergence Review.  But it was a tiny sliver of a much broader proposal to rationalise media regulation across all platforms.  To rip three words out of the Convergence Review is to miss the point entirely.  The purpose of the public interest test, as conceived in Convergence Review, is to completely remove ''the old platform-specific media ownership rules''.  Conroy doesn't plan to do anything of the sort.

The Government has offered nothing — absolutely nothing — to deal with the issues raised by technological change.

For its part, the Finkelstein report inadvertently showed how far the media policy debate had moved from media reality.

The final Finkelstein report was released in March 2012.  It had two jobs.  The first was to investigate standards and media codes of practice.  This received all the attention.  But its second job was to look at technological change and how that affects media business models.  Here's an exact quote from the final report:

major newspaper publishers confidently presented a positive assessment of their future prospects.

Of course, just over three months later Fairfax media announced one of the single biggest restructurings in Australian media history, shedding nearly 2,000 staff.  News Limited cut staff as well.  Finkelstein was released in March.  By June it was an anachronism.

And now we're here.  Conroy's proposed Public Interest Media Advocate has serious freedom of the press problems.  Those have been well-canvassed over the last week.

But of greater long-term importance is how a much-needed investigation into regulation and technological change turned into little more than a platform for politicians to express their feelings about Rupert Murdoch.

And what on earth is the use of that?  All this sound and fury could achieve is just an extended exercise in political gamesmanship.

Another wildly missed opportunity.  Another government distracted from necessary reform in the pursuit of its political agenda.

Selling out press for a bit of pork

The spotlight is on Bob Katter, Tony Windsor and Rob Oakeshott to see whether they'll sell out our universal human right to free speech for some off-cuts of regulatory pork.

Julia Gillard and Communications Minister Stephen Conroy appear to be stitching up a political deal to ram their restrictions against a free media through the House of Representatives on a shotgun wedding timeline.

On the same day Conroy announced his plans, Environment Minister Tony Burke announced new coal-seam gas restrictions that enjoy the strong support of the same three independent MPs the government needs to pass its media laws.

Conveniently a new mandatory code on supermarkets to reduce their negotiating power for cheaper prices is set to be announced; it is also supported by the same three men.

From a self-interested electoral perspective, they may think it is in their interests to agree to the grand bargain, but it's a bitter pill to swallow.

All three MPs represent traditionally conservative electorates that value the basic right of free speech.

An IPA-commissioned 2011 Galaxy poll found 85 per cent of Australians outside capital cities thought the right to free speech was more important than being protected against offence.

Restricting free speech doesn't enjoy support outside inner-city cafes and academics where they are considered arcane concepts in comparison to progressive post-modern notions of fair speech and a fair media.

Trading off free speech to appease vested interests against the supermarket sector also comes with a poisonous electoral price tag.  In an interview earlier this week, ACCC chairman Rod Sims conceded supermarket prices we all pay might rise from more regulation.

In expediting the laws, the independents shouldn't fall for the government's dishonest claims.

Conroy has argued for their quick passage because ''the issues are known, people have been part of all of these processes, they've had a chance to make submissions''.

It is the sort of deeply misleading and dishonest statement Conroy would want his new regulator to investigate.

There have been no submissions.  Like the government's response to the Henry tax and Gonski education reviews, Conroy's proposal is not what the Finkelstein or Convergence reviews recommended.

Conroy is avoiding scrutiny about how draconian these regulations are.

To enjoy free media privileges, media outlets will be required to join a Press Council overseen by the statutory public interest media advocate headed up by a government-appointed tsar.

The PIMA will then have the power to approve or reject rules of the Press Council.  If the rules are rejected, the Press Council will have to amend them until the PIMA approves them.

Once media outlets are captured, the PIMA can then incrementally tighten the rules allowing for the slow corrosion of free speech and the capacity to broadcast dissent of government policy.

Katter already appears to have signed up, saying he'll support the media laws, Windsor is being coy and Oakeshott appears to be superficially rejecting the package because of how it will be considered, not from principle.

It won't take much to get him over the line.

Australians aren't fools.  Some may dislike CSG and supermarkets, but they won't easily forget MPs that trade away their human rights for their own short-term political agendas.

Conroy's media regulation proposals fail the public interest test

All politicians are self-interested.  But few are as shameless as Communications Minister Stephen Conroy.

His proposed ''media reforms'' may be a thinly veiled response to a technologically driven changing media landscape, but we all know their real purpose:  to punish and rein in the federal government's critics in the media.

They amount to a massive expansion of government control over the media, and they have no place in a free society.

Conroy has been egged on by Labor backbenchers and the Greens for months about the evils of media companies such as News Limited, publisher of The Australian.  Former Greens leader Bob Brown famously dubbed News as part of the ''hate media'' and called for licensing for newspaper proprietors.  Current Greens leader Christine Milne called for a ''fit and proper test'' so the government could control who invested in the media.

In November 2011 Labor senator Doug Cameron said reporting in News Limited paper The Daily Telegraph that Kevin Rudd might challenge for leadership of the ALP amounted to a ''threat to democracy''.  Of course, when Rudd did challenge less than six months later, Cameron was among his number-crunchers.

Steve Gibbons, another Labor backbencher, even called for individual journalists to receive fines to improve the ''fairness of our media''.

Conroy has finally delivered in spades for the most deranged critics of the media.  Almost one year since it received the reports from the Convergence Review and Finkelstein inquiry, the government will now attempt to rush through its radical package before the federal election.

The changes include an attempt by the government to control currently independent bodies such as the Australian Press Council.  A new public interest media advocate will oversee the press council's activities.

This will mark the end of self-regulation in Australia.  The new regulator will also apply an extremely vague ''public interest'' test to any changes in media ownership.

Placing this power in the hands of a government regulator inevitably will insert political considerations into what should purely be a commercial decision-making process.  This delivers on the Greens' hopes that some individuals could be prevented from owning a media outlet.

Australia now also effectively will have a press licensing system.  Any media outlet not signed up to a government-endorsed media regulator will lose journalistic privileges such as exemptions from privacy laws.

This will force media groups that are not presently members of bodies such as the press council to join, and is a powerful threat to existing members that they must not leave.  It will be virtually impossible to run a media outlet in Australia without being under the supervision of government-appointed bureaucrats.

The last time that media outlets were subject to press licensing in the English-speaking world was 1693.  What was too tyrannical for the English in the time of William and Mary is apparently acceptable in 21st-century Australia.

A free press is an essential feature of a healthy liberal democracy.  Media outlets should always feel free to criticise politicians and others in power without any fear of retribution.  And that freedom does not just belong to the media.  Its right to report freely is also essential for our right to hear freely.  When the government limits the free speech of the media, it is also an attack on individuals' access to the free flow of information and the right to be an informed citizen.

Conroy's attack on the media is just the latest example of the Gillard government's complete disregard for freedom of speech.  The Liberal Party has already announced its opposition to Conroy's proposals.  It now falls to independent MPs to defend freedom of speech and block the government's blatantly self-interested attempt to ram these laws through parliament before September.

Indifference to regulatory price rises a problem

To protect consumers the government should probe the ACCC's approach to competition before it starts regulating.

In Monday's Australian Financial Review Rod Sims argued:  ''The way I always approach issues is in two stages.  Stage one is, do I think there's economic harm?  Either to the competitive process or to consumers if we're talking about consumer issues.  Has there been any detriment?  And then step two is do we think we can succeed in court?''

It's an odd way to approach competition.  Both steps assume a centralised regulator knows when a market is perfectly competitive, and what drives the consumption behaviour of 22-odd million consumers.

In a free and open economy, excessive market concentration is undesirable, but not all market concentration is the same.

On one hand regulated public or private concentration is dangerous because established interests are protected from competitive pressure, allowing industry to be fat and lazy while extracting unjust profits from consumers.

On the other hand, open markets allow players to achieve a strong position only by responding to consumer demand, and as soon as they stop, or a new market emerges, they lose their competitive position.

As economist Joseph Schumpeter argued, ''The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers, goods, the new methods of production or transportation, the new markets, the new forms of industrial organisation that capitalist enterprise creates''.

The first example is the national broadband network monopoly whose interests are so heavily backed by government it barely needs to secure customers.

The second example is Australia's retail supermarket sector, where multiple players succeed through aggressive competition.  They can achieve increased efficiency and competitiveness from size, but that doesn't inhibit other market players from competing on grounds other than price.

There's no argument that, combined, Coles and Woolies have significant market share.  Their 55 to 60 per cent combined market share is mostly in pre-packaged groceries and quickly drops on fresh fruit and vegetables, meats and breads and cakes, where they compete against other supermarkets and local and franchise retailers.

Supermarkets don't compete just on price, but it is clearly the one that matters most to consumers.

In response, ALDI now has 300 stores and competes heavily on price, leveraging private labeling, its supply chains and purchasing power by having 7000 stores globally.  Costco has also stepped into the market.

Meanwhile, consumers seeking quality visit stores like IGA Marketplace and Woolies' Thomas Dux, as well as a highly competitive convenience market.

In short, the market is meeting different market segments, and if people don't like what they are being offered they can switch.

The data suggests we do.  Industry analysis shows Australians are some of the least loyal supermarket customers in the world.  That's why the chains are using heavy discounting, rewards and discounts to keep customers loyal.

The important component of ensuring a competitive supermarket sector is making sure there are not barriers to entry for new market entrants.  The stunning growth of ALDI in a little over a decade would suggest not.

The same cannot be said with broadband.

Of course the NBN also competes against other suppliers of internet services using existing infrastructure.

But by being regulated as a monopoly means it has no competition in the same service class, ensuring it can achieve the benefits of volume as well as extracting retail premiums.

How the ACCC can see supermarkets as a problem and not the NBN is staggering if Sims wants to avoid ''economic harm ... to the competitive process or consumers''.

Both political parties should take note.

Sims's relative indifference to potential price rises resulting from regulatory action is emblematic of an attitudinal divide across the country, with serious political consequences.

Inner suburbs of major capital cities are dominated by well-paid professionals who earn significant and enlargeable incomes, and can afford to pay a premium for boutique quality and convenience.

Many also don't have kids, or they have left home.

Much of the rest of the community struggles on fixed incomes to meet the competing demands of their home and car mortgage, the expenses of having kids, including school fees, and the high cost of feeding a family.

Cheap milk is a godsend for a family that can go through one or two litres a day, and which aggressively packages its consumption behaviour to take advantage of loyalty discounts and rewards.

Similarly, if a monopoly NBN makes it unviable for competition it could also increase internet prices for the same families.

Sims may not experience this reality while he uses his taxpayer-funded internet or wanders the aisles of the David Jones food hall, but it will be electoral poison for current and future governments.

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Tea Party Paul's stand for civil liberties

Rand Paul's epic filibuster in the United States Senate last week wasn't just an important moment in the debate over executive power and drone warfare.  It's an important moment in the history of the Tea Party, even the conservative movement.

Paul's Tea Party credentials are impeccable.  He wrote a book in 2011, The Tea Party Goes to Washington.  The 54-member Tea Party Caucus — a congressional organisation for like-minded Tea-partiers — was apparently his idea.  He gave the Tea Party's response to Barack Obama's latest State of the Union.

Our ideas of the Tea Party are pretty entrenched.  Either you think that the Tea Party is a white, racist, gun-toting, revolt of the middle class, or ... well ... in Australia it's not clear there is an alternative view.

The international press has been hopeless on the significance of the Tea Party.  The same media outlets that romanticised the Occupy movement stereotyped and dismissed the Tea Party as some arch-conservative uprising.

So it's a big deal that Tea Party Paul made international headlines by standing up to the Obama administration on a distinctly civil liberties issue.

Paul used the confirmation of John Brennan for Central Intelligence Agency director to demand a full explanation of the legal basis for using drones to kill citizens and non-combatants.

The complete transcript is here, if you feel like reading a lazy 68,000 words, but this Guardian piece has some of the highlights.

The most memorable hypothetical in his 13-hour filibuster was this:  under the administration's drone policy, Barack Obama could order that American citizens ''be killed in a café in San Francisco or in a restaurant in Houston or at their home in Bowling Green, Kentucky.''

Supporters of Obama have been quick to say this is an absurd scenario — there's no way the president would do anything of the sort.

But Paul's point was not that the hypothetical was likely, but that the administration does not appear to believe there is any legal impediment to sending a Hellfire missile into a San Francisco café.

Constitutional government should have strict limits on what it can and cannot do.  Citizens shouldn't have to count on their president being a good guy.

To see just how many people have wilfully missed Paul's point, check out this self-satisfied ''fact-check'', which has determined that the hypothetical is ''False'' but admits the White House hasn't strictly ruled out that it has such power.

And the only reason this debate has been rekindled is because a Tea Party senator made a symbolic 13-hour stand.

The next day the Attorney General Eric Holder sent this sharp letter to Paul, saying the president does not have the authority to kill an American not engaged in combat on American soil.  Paul quickly claimed victory.  But Holder's reply is more ambiguous than it first appears.  And it doesn't tackle the broader issue:  there are few statutory checks on the drone program.  Drones are the iconic example of the growth of executive power in the Obama age.

At the Atlantic, Conor Friedersdorf has an interesting piece about how the mainstream press got Rand Paul wrong from the start.  They obsessed about his views on the 50-year-old Civil Rights Act while ignoring his civil libertarianism and foreign policy.

Compare Paul to the so-called ''moderate'' Republicans — those who stand against the wild-eyed Tea Party radicals holding the nation to ransom.

The doyen of moderation, John McCain, said Paul's filibuster was merely a ''stunt''.  Lindsey Graham, another storied moderate in the Senate, addressed his colleagues mournfully:  ''to my party, I'm a bit disappointed that you no longer apparently think we're at war.''

Graham later said Rand's filibuster had persuaded him to support Brennan, as it had ''become a referendum on the drone program''.

Yes, those moderates who are so admired in the Australian press used dissent against Obama's war powers as a reason to support them.  Just as a few years ago those moderates supported George W Bush's extraordinary spending spree, foreign policy adventurism, and trouncing of civil liberties.

Yet we're told it is the Tea Party which is dangerous.

Paul is not a prince of libertarian purity, by any means.  He's both more conservative and more mainstream than his father, Ron Paul.  Nor is the Tea Party ideologically pure — it is part conservative and part libertarian.

Still, the rush of support from other congressional Republicans for Paul's unambiguous stand on civil liberties is significant.  He was even praised by the usually pro-war Rush Limbaugh for defending ''the freedom and liberty of the people of the United States''.  Limbaugh went on to mock John McCain.

Like everything that happens in politics we could dismiss this as partisan opportunism.

But since the Tea Party burst onto the scene to reject the bank bailouts, it has threatened a more general outbreak of libertarianism within the GOP.

Every Republican now believes Federal spending needs to be cut.  Big government conservatism is completely discredited.  That is in no small part because of the Tea Party.  It's easy to forget that more government spending at home was as much a part of the neo-conservative agenda as foreign interventionism was.  Remember ''compassionate conservatism''?

We know there is a Republican constituency for civil liberties and limiting executive power, even after a decade of anti-terror abuses.  There were some promising hints of foreign policy modesty during the last Republican primary campaign.  Rand Paul's filibuster is an important moment.  Let's hope it is also a turning point too.

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Big debt means staying on same path too risky

Now that the State election is out of the way, the returning Barnett Government should consider a new fiscal strategy to contain WA's runaway debt.

To understand why economists, financial commentators and credit ratings agencies have expressed growing concerns about the State debt, consider the trends since the GST reforms came into place in mid-2000.

Taking the general government sector — consisting of agencies mainly funded by taxes — as the starting point, gross debt fell from about $3 billion in financial year 2001 to about $2 billion in 2007 but has risen dramatically since, to about $10 billion last year.

The midyear financial projections released by the Government in December suggest that general government gross debt will keep increasing to about $18 billion by 2016.

Expressing these figures in terms of total output by the State economy, gross debt fell from about 4 per cent of gross State product in 2001 to about one per cent in 2007 but grew back to about 4 per cent last year.

By 2016 it is estimated that general government gross debt will absorb about 6 per cent of the State's total output.

But these figures exclude the borrowings by other government bodies, such as State-owned electricity generators, ports and water authorities.

When these entities are included the gross debt to GSP ratio jumps to about 12 per cent last year, with expectations it will increase to about 14 per cent by the end of the forward estimates.

These figures do not include the State's unfunded superannuation liabilities or council and shire debts, which, as a share of GSP, conceivably add up to another 5 per cent to the total.

The estimates presented here also exclude State Treasury's recent advice that election campaign promises may further increase debt, even setting aside Barnett Government hopes for Federal funding on transport projects.

In simple terms, public sector debt in WA has moved in one, unflattering direction:  up.

In fairness, the Barnett Government has insisted its borrowing program, fuelling the growing State debt, is financing major infrastructure in a fast-growing jurisdiction.

It also seems the Government is more eager to borrow, than would otherwise be the case, to help protect its Budget surplus.

Although most economists agree that borrowing for long-lived capital is not unreasonable, they likewise suggest that infrastructure must clearly generate economic value, ensuring a more productive State addresses its financial commitments more easily.

On this score, it was troubling that both major parties during the election campaign did not provide sufficient detail as to how their pet capital projects stacked up in cost-benefit terms.

Taxpayers should also be reminded that, though some of the projects will become a reality only in the longer term, a growing interest bill is already gnawing away at other spending priorities in the State Budget.

Concerns about growing public sector debts also centre upon capacities to bear the load of future taxes.

WA's commodities bounty provides the Government with lucrative sources of royalty revenue, although recent reductions in commodity prices have magnified concerns about the State's reliance on volatile revenue sources to repay burgeoning debts.

The States and Territories remain hampered by an upside-down Australian fiscal federalism model in which all the key revenue sources, such as income tax, are needlessly monopolised by big-spending Canberra.

The tax instruments that remain in the hands of the States tend to be inefficient taxes, which generally do not deliver spectacular revenue yields and can hamper market activities, such as jobs creation or labour mobility, that grow an economy and cultivate a more sustainable revenue base.

The State Government is walking a somewhat fine line when it comes to its overall budgetary stance, and if commodity prices soften or domestic economic activity weakens there will be a need for an explicit strategy to deal with the debt overhang.

The best strategies to reduce debt would be to privatise government assets, and direct the sale proceeds towards that and direct the sale proceeds towards that purpose, and reduce recurrent spending providing more Budget room so that a greater share of revenues can be used for debt reduction.

Another strategy for government to ease the burden of public debt is to encourage growth of the private sector, generating more revenue in the process.

To this end, a program of deregulation would be highly desirable for a State with a reputation for extensive red tape restrictions on business.

In recent years, WA has made its own eager contribution to the global public sector debt ocean of more than $50 trillion and counting.

But with the rough weather of economic uncertainty lingering, there seems no better time than the present for the Barnett Government to start swimming against the debt tide.

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The left is misguided when it uses a bill of rights to distribute wealth

How protected are our rights to free speech?  Two rulings of the High Court last week have brought the question into focus.

The court upheld an Adelaide bylaw that bans preaching on a city street and a federal law that forbids offensive material being sent through the post.  These rulings can be added to the Gillard government's anti-discrimination bill (which would make it unlawful to offend someone's political opinions at work) and the proposed regulation of newspapers and blogs.

All of these laws, existing and proposed, would be quickly slapped down in US courts as laughably unconstitutional.  The American bill of rights is very powerful.  The First Amendment unambiguously protects free speech, free press and religion.

Yet in Australia, bills of rights haven't had much support by liberals and conservatives.  The reason is simple.  The First Amendment was written more than two centuries ago.  Modern bills of rights tend to increase government power, rather than limit it.  This is because our human rights advocates believe that to protect human rights we simply have to transpose United Nations treaties onto Australian law.

In recent inquiries, those advocates have called for a rights act to guarantee everything from free university to welfare — all because they're in UN documents.  The UN even thinks we have a human right to high speed internet.

Instead of protecting people from the government, these ''rights'' are all about obligations — obliging taxpayers to give more money to the government so it can fund more stuff.

The distinction is important.  America's Bill of Rights starts bluntly:  ''Congress shall make no law'' restraining speech or religion.  It's all about protecting people from their government.  By contrast, the UN International Covenant on Economic, Social and Cultural Rights says governments must guarantee food, clothing, and housing;  that governments have a responsibility ''to improve methods of production, conservation and distribution of food'';  that governments must ensure an ''equitable distribution of world food supplies''.

In other words, governments should control more things, tax more things, redistribute more things.

If the left want to understand the reason their opponents are sceptical about modern human rights, well, there you have it.

What would a conservative or liberal bill of rights look like?  It would have to be entrenched within the constitution.  It would have to mean something.

Courts would be able to enforce it.  Labor attorney-general Rob Hulls was very proud of introducing Victoria's Charter of Rights in 2006 but the government can — and his government did — ignore that charter whenever convenient with no consequence.  Why fill the statute books with motherhood statements?  A bill of rights is a radical measure, not a tool for political self-congratulation.

Yet politicians don't like the idea of a constitutionally entrenched bill of rights.  It might prevent them from doing whatever they want.  The Rudd government forbade the National Human Rights Consultation report (which received 35,000 submissions) from considering anything that would reduce Parliament's ''sovereignty''.  But that's the point — to stop Parliament from trampling our liberties.  Anything less is a waste of time.

In Britain, Tories opposed to Tony Blair's labyrinth Human Rights Act want to replace it with a minimalist British Bill of Rights.  Their proposal would protect ''headline'' liberties rather than a mishmash of economic and cultural aspirations.  We could introduce something similar.

Such a bill would guarantee freedom of religion and association and protect people against incarceration without trial and all that good stuff.  It could also have rigorous protection for property rights, for instance, and it would not dilute its right to free speech with a right not to be offended.

Yes:  a bill of rights need not just be a wish list of the left.  Let's haggle.

Many conservatives object that a bill of rights would give unelected and unaccountable judges the ability to dictate public policy.  Fair point.  But that ship sailed a long time ago.

A century of High Court cases has taken our constitution in directions that would shock the founders.  We no longer have any meaningful division of power between state and federal governments.  The court has ''discovered'' rights in the constitution that are ''implied'' but not written down.  Any conservative who believes we can restore a strict interpretation of the constitution is bizarrely optimistic.

So instituting a bill of rights wouldn't be handing power to judges.  They already have it.  A bill of rights could take it back — allowing the Australian public to have a say on the fundamental rights with which Parliament may not tamper.

Home truths for Gillard

If Julia Gillard had her way, what Marissa Mayer has just done at Yahoo! in California will soon be against the law in Australia.

Mayer is the 37-year-old CEO of Yahoo!, the ailing Fortune 500 internet company.  She's ranked by Forbes as the 21st most powerful woman in the world.  A fortnight ago she instructed those employees who had previously worked from home that they were required to work from the company's office instead.  The change is estimated to affect a few hundred of the company's approximately 10,000 employees.

The decision has divided business people.

Richard Branson called it ''a backwards step''.  However, the mayor of New York, Michael Bloomberg, noted:  ''I've always said telecommuting is one of the dumber ideas I've ever heard.  Yes, there are some things you can do at home.  But having a chat line is not the same thing as standing at the water cooler.  And standing at the water cooler is where you get a lot of ideas and information and it's a euphemism for a lot of interpersonal dialogue.''

That's something unusually sensible coming from Bloomberg.  Last year, as mayor, he banned the sale of two-litre soft drink bottles in New York to fight obesity.  He also argued recently that the United States could have an ''infinite'' debt because there would always be lenders willing to let the US borrow more money.

Just a few weeks before Yahoo! called everyone back to the office, Prime Minister Gillard announced plans to expand the category of employees who had the right to request ''flexible working arrangements'' from their employer.  The PM said she would try to amend the Fair Work Act before the September federal election so that employees such as those over the age of 55 and those with caring responsibilities would have the right to request to work from home, for example.

If the PM succeeds in changing the law then it's likely employers will only be able to refuse employees' requests for flexible arrangements on ''reasonable business grounds''.

The Fair Work Act doesn't actually define what ''reasonable business grounds'' are.

If employers say no to a request, they must provide a written explanation to the employee within 21 days of the employee's request.  If employers don't respond within the time period, or they don't respond in writing, or they don't give reasons for their refusal, then the employer will have broken the law.

If an employee disputes a decision, they can go to the Fair Work Commission.  In addition, if the employee believes they've been discriminated against, they may be able to sue their employee under anti-discrimination legislation.

Yahoo's outright ban on working from home would fall foul of the Fair Work Act because, in Australia, each employee's request to work from home would have to be considered individually.

Mayer made exactly the same sort of calculation that every employer makes every day.

If she thought her company would be more successful if its employees worked from home, then obviously she would have let them work from home.

If flexible working arrangements for employees are good for a business, then of course employers will do what they can to accommodate employees.

This is a point Gillard seems unable to understand.

It's not the role of government to second-guess employers' decisions.  Running a business in the current economic climate is tough enough as it is without the Gillard government imposing yet another regulatory burden on employers.

If an employee asks an employer for flexible working arrangements and the employer says no, that should be the end of the matter.  There shouldn't be a law requiring the employer to justify themselves to the employee, the government, or to anyone else.

When she announced her flexible work proposals the PM made a very revealing comment.  She said that ''what we wanted to do with the right to request was to change behaviour''.  These proposals have nothing to with productivity or profitability — they are about having businesses conform to a standard of behaviour Gillard thinks business should follow.

Gillard is ranked by Forbes as the 27th most powerful woman in the world.

Mayer and Gillard may not be too far apart when it comes to their supposed global influence, but they are on different planets when it comes to their knowledge of business and what it takes to run a business.

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The Biggest Vested Interest of All: How Government Lobbies to Restrict Individual Rights and Freedom

EXECUTIVE SUMMARY

The Federal Treasurer Wayne Swan wrote in The Monthly in March 2012 that:

Australia's fair go is today under threat from a new source.  To be blunt, the rising power of vested interests is undermining our equality and threatening our democracy. ⁽¹⁾

But not all vested interests are private corporations.

This paper draws attention to two statutory agencies of the Commonwealth Government that have an explicit, legislatively-defined functions to lobby and advocate for public policy change — the Australian National Preventive Health Agency and the Australian Human Rights Commission.

These two agencies are effectively taxpayer funded lobbyists, embedded in the public policy process, enjoying privileged access to the institutions of government.

The Australian National Preventative Health Agency (ANPHA) received $57,718,000 in the 2012-13 Federal Budget to "driv[e] the national capacity for change and innovation around preventive health policies and programs." ⁽²⁾

ANPHA publically advocates and privately lobbies for a wide range of Nanny State restrictions on alcohol, tobacco, and unhealthy food.

The Australian Human Rights Commission (AHRC) received $23,133,000 in the 2012-13 Federal Budget.  One of its primary tasks is to "promote an understanding and acceptance ... of human rights in Australia ... undertake research and educational programs" and "develop laws, policies and programs" ⁽³⁾ for parliament to enact.  (Unfortunately, the AHRC does not disclose how much it of its budget it directs towards this task.)

However the human rights that the AHRC chooses to promote and advocate are highly selective, favouring certain rights above others.

As well as being policy lobbyists in their own right, AHRC and ANPHA are central to a pattern of relationships between the government and non-government sectors.  Taxpayer money is being used to lobby for the allocation of more taxpayer money.

One-third of the submissions to the Preventative Health Taskforce — which established the Australian National Preventive Health Agency — were from bodies which received large amounts of taxpayer funding.

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1.0 INTRODUCTION

On 1 November 2012, the Australian National Preventive Health Agency (ANPHA) released a draft report Exploring the Public Interest Case for a Minimum (Floor) Price For Alcohol. ⁽⁴⁾  The report called for an increase in taxation on wine, which is taxed according to its price rather than its alcohol content.  The effect of such a proposal would be a substantial increase in the tax on cheaply priced cask wine, raising a $15 four-litre cask up to $40.

The proposal received national attention.  ANPHA is, after all, a statutory agency of the Commonwealth government, and this was a major proposal:  alcohol pricing, particularly as it relates to the wine industry, is a controversial area.

It was, however, not Commonwealth policy to increase wine taxation when the report was published.  The purpose of ANPHA's paper, and the media blitz which accompanied it, was to push for this taxation change within the government and advocate it in the public sphere, not to implement it.

ANPHA is a statutory agency with a very specific brief:  to research, propose, and promote policies which it believes will increase the health of Australians.

To do so, it writes reports, runs seminars, and — most crucially and most jarringly — lobbies the government to implement its preferred policy ideas.  That is, ANPHA is a government-funded agency with a specific brief to lobby the government for legislative change.

ANPHA is not the only such institution at the Commonwealth level.  The Australian Human Rights Commission was founded in 1986 with a similar function:  to research and advocate the introduction of United Nations human rights treaties into Australian law.

Australians are concerned about the influence of private sector lobbyists on the political process.  But the discussion about lobbying and politics has, to date, ignored one of the most significant sources of influence upon the policy process;  that of bureaucracies, regulators, and government-funded institutions.  Government departments can pursue selfish or ideological agendas as much as any private sector lobbying firm.  The difference between private and public lobbyists is that

1. they are funded wholly or largely by taxpayers and;
2. they are embedded within the formal institutions of government, guaranteeing access and influence.

This paper provides an introduction to the political context about the rise of these hybrid institutions.  After the economic reforms of the 1980s, governments have been experimenting with alternative models of policy change.  Such institutions are likely to become more common in the future.

The paper then explores the public choice theory that explains their perverse consequences.  Government funded lobbyists link two major strands of public choice thought:  that of rent-seeking by private agents, and that of bureaucratic incentives.

Then the paper profiles the two major government lobbyists:  the Australian National Preventive Health Agency (founded in 2010) and the Australian Human Rights Commission (founded in 1986).

These are by no means the only government-funded organisations that put pressure on parliaments for legislative change.  To a large degree, all bureaucracies push an agenda.

Furthermore, there are many Commonwealth research bodies with superficial similarities to ANPHA and AHRC.  The Australian Research Council hands out grants for research projects.  The National Health and Medical Research Council has a similar role, as well as collating medical research data.  Then there are institutions specifically instituted to make policy recommendations.  For instance, the Productivity Commission and the Australian Law Reform Commission are policy research bodies.  Other regulators have research wings;  for example, the Australian Communications and Media Authority.

But while all these bodies do research, none of these aforementioned bodies have an active advocacy role.

The Australian National Preventive Health Agency and the Australian Human Rights Commission have statutory obligations to promote and advocate legislative change.

Even if we agree with the messages broadcast by these agencies, or the legislative proposals they present, it should be of serious concern that there exists taxpayer funded organisations specifically to push policy change from within government.

This paper has been inspired by an Institute of Economic Affairs Discussion paper, "Sock Puppets:  How the government lobbies itself and why", by Christopher Snowdon, released in June 2012. ⁽⁵⁾

Much of the phenomena that Snowdon identifies in the United Kingdom are easily identifiable in Australia — charitable interest groups that have subsumed into the state through bureaucratic outsourcing continue to pursue ideological or even partisan agendas.  My research has repeatedly identified this phenomenon in environmental and charitable bodies. ⁽⁶⁾

Here we look at one way it manifests itself:  through statutory bodies and a cycle of grants where taxpayer funded non-government organisations use taxpayer money to advocate greater expenditure on programs that it may benefit from.

Obviously the final say of the legislative agenda rests with parliament.  Nonetheless, we need to recognise and come to terms with the fact that parliament is being influenced by lobbyists from within government itself.

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2.0 SPECIAL INTERESTS INFLUENCE PUBLIC POLICY

In Western liberal democracies over the last two decades the boundaries between government and non-government sectors have become increasingly vague.  That blurring boundary has many implications for public policy which have not been fully realised.

During the twentieth century, government was characterised by executive departments and public ownership of infrastructure and utilities.  The economic reform movements of the 1980s and 1990s undermined that unitary model of government.

The model that has replaced it is more complex and fragmented.

Public utilities were privatised and their regulation vested in new government agencies.  Bodies which retained state ownership were "corporatised" to inject some of the managerial discipline of the private sector.  Social welfare services have been farmed out to non-government bodies.  Infrastructure is increasingly built by public private partnerships.

Even policy development is no longer the sole purview of the traditional public service:  much policy development has been handed over to private contractors.

We call this new model the "regulatory state", in honour of its two central features (independent regulatory agencies and regulatory growth) but it describes a broader phenomenon than regulation.  There has been a fundamental transformation in the structure of government.  What was central government has been decentralised.

The fragmentation of institutions and bureaucracies makes contemporary government less a "great public utility" — as WK Hancock famously described Australian government in the 1930s — and more a network of interests, competing for funds, public attention, and the policy priorities of the legislature.  These institutions tug back-and-forth on the levers of government.

There are many democratic and policy consequences of this new model of government. ⁽⁷⁾  Independent regulatory agencies have been delegated powers by the executive but have little formal accountability.  With their broad powers of discretion and a regulatory ideology that emphasises cooperative regulation rather than black-letter law, these independent bodies are uniquely vulnerable to principle-agent problems.  They can pursue policy goals not intended by parliament.

We should not conclude from these changes that the state has shrunk.  Far from it:  the dispersal of policy control and formulation has given government as a whole a firmer base on which to regulate and intervene.  The state, argue the Australian political scientists Stephen Bell and Andrew Hindmoor, has not been rolled back. ⁽⁸⁾  The size of government — measured traditionally by tax receipts and expenditure — through the "neo-liberal" reform period remained steady or increased.

I have demonstrated that the legislative activity of Australian governments has at all levels increased substantially.  In 1970, at the start of the reform period, the Commonwealth parliament passed 700 pages of legislation per year.  In 2011 that figure was above 7,000 pages.  Similar growth is seen in state parliaments as well. ⁽⁹⁾

There are now 97 separate regulatory agencies, departments, and associated institutions in the Commonwealth government. ⁽¹⁰⁾  The Productivity Commission has estimated that there are more than 600 regulatory agencies — only a subset of the total number of bureaucratic entities — across Australia.

While it is outside the scope of this investigation, it is important to mention that institution-building has occurred outside the national sphere as well.  Bodies such as the Organisation for Economic Co-operation and Development and the International Monetary Fund are transnational policymakers and advocates, and can assert substantial influence over domestic policy.

While regulatory agencies are supposed to be purely technocratic bodies, carefully and pragmatically weighing policy evidence outside the corrupting influence of democratic politics, they have substantial political leeway to pursue their own agendas.

In the early 2000s, the Australian Competition and Consumer Commission was widely regarded as aggressively publicity-hungry, to the degree that it was making substantial decisions of policy through its attempts to undermine the reputation of firms it was investigating.  This culminated in the 2003 Dawson Inquiry, which recommended that the regulator be forced to adopt its own Code of Conduct to govern its use of the media.  The ACCC's media activity quickly dropped after the Dawson Inquiry but has crept up again. ⁽¹¹⁾

Of particular importance is the observation that government has grown as much in qualitative as in quantitative terms.  In recent decades government has expanded its interests.  One clear illustration of this expansion is that much of the regulatory growth has been in areas previously left unregulated — for instance, environmental or health and safety law.  Another obvious example is the evolution of "public health" regulation from non-coercive information dissemination about the dangers of smoking to proposed plain packaging for alcohol containers.

While the ambitions of governments have increased, they are increasingly constrained.  The new policy emphasis on regulation instead of spending is largely a consequence of the public's hostility to substantial tax increases.  Governments have had to be more innovative to develop interventionist policy.  Once governments would nationalise industries that they wanted policy control over.  Now bringing policy areas into the states aegis involves "industry partnerships", grant and subsidy programs, national frameworks and plans, quasi-governmental industry boards, and state-sponsored codes of conduct.

Such policy innovation has had the consequence of breaking down the barrier between state and non-state institutions.

Organisations that may be "private" can nonetheless draw substantial amounts of their income from the public purse.  It is no longer clear whether many such bodies ought to be described as government or non-government organisations.  Social bodies — community organisations, religious groups — are increasingly involved in delivering state services, and, through those services, are becoming de facto arms of the state.

One clear illustration of this phenomenon is the evolution of the community-based multicultural organisations that sprouted up in the 1970s.  The lure of government funding has meant that in recent decades those organisations have morphed from community groups to state service deliverers.  Public funding has diverted the business of representing their communities into competing for tenders.

In 2010 the Productivity Commission found that direct funding of non-profit organisations was around $25.5 billion every year. ⁽¹²⁾

Government funding is not limited to service delivery.  Many bodies receive large amounts of taxpayer funding through research grants.  Research grants can be a powerful tool to pursue already identified public policy goals.

Bodies that receive government funding are less willing to criticise government policy.  In some cases, they are prevented from doing so by the terms of their grants.

In 2012, the Queensland Health Department mandated that any organisation receiving more than 50 per cent funding from the department must not advocate legislative or policy change, going so far as to ban them from publishing links on their website to other organisations that do.  This new rule has been condemned by public health activists as a restriction on freedom of speech.  Mike Daube, a Professor of Public Health at Curtin University, described the Queensland government's actions as a "descent into the dark ages".  But the lesson should be obvious:  organisations that are supported by government funding also become integrated into the political and policy structure of government.  That politicians do not like it when organisations they fund attack them should be no surprise.

This minor Queensland Health episode illustrates the uncomfortable relationship between the regulatory state and civil society it seeks to co-opt.  Government is a political beast, and the encroachment of government funding and service provision into non-government organisations politicises those bodies.

The many diverse government and semi-government bodies of the regulatory state pursue their own goals.  Each have their own interests.

Those interests may not align with the interests of the elected representatives who give the government their legitimacy, or, indeed, the interests of the public that the government is there to serve.

The idea of special interests has a prominent place in our modern democratic consciousness.  Many people believe that corporate interests lobby governments to systematically skew public policy in their favour, and that political parties and politicians are beholden to those interests — acting not for the public they are supposed to represent, but for the corporations who donate to their campaign.  This belief has led to much policy change in recent decades.  The Commonwealth government's lobbyist register is an attempt to expose potential conflicts of interests.  The New South Wales government's changes to electoral funding are another attempt to remove special interests from the operation of democracy.

The vast majority of discussion about special interests in politics concerns corporate interests.  That, indeed, is the focus of the federal lobbyists register.  But there are many other special interests trying to influence the direction of public policy for private ends.  Unions and non-government organisations can be just as involved in lobbying and favour-seeking practices as the business sector.  And, just as critically, not all interest groups are external to government.

There are many influences on public policy formation that exist within government itself;  many bodies funded by taxpayers push policy goals within and without the formal structures of government.

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3.0 STATUTORY AGENCIES ARE SPECIAL INTEREST GROUPS

The fragmentation in government structure in the last few decades has also seen a fragmentation in policy-making.  In a traditional, hierarchical model of policy development, policy flows directly from the bureaucracy to the relevant minister, and thereafter to the parliament.  Departments develop and assess competing policy options, and present those policies to a minister for their approval or dismissal according to the government's political goals.  Ultimately, it is the minister — an elected representative — who makes the final decision about what will be presented to parliament.

This is an ideal model and, even when governments were structured in clear hierarchical lines, this model was unlikely to represent reality.  A democracy is a clash of interests.  Throughout the twentieth century policy formation reflected both the desires of the bureaucracy and the desires of the interest groups that parliamentary representatives drew political support from.

Bureaucracies are as much political tools as dispassionate policy advisors.  One minor but particularly revealing illustration of this was the episode in early November 2012, when the Commonwealth Treasury leaked purported impact of opposition policies on business to the Fairfax press.  The Labor government asked the Treasury to analyse what it assumed were the opposition's election promises. ⁽¹³⁾  The result was highly misleading.  It only accounted for taxation increases, and completely excluded the two major policies (the repeal of the mining and carbon taxes) which would have lowered business costs.  Such political use of the bureaucracy is hardly unprecedented — it is a recurring feature when either side of politics is in power — but it demonstrates the incentives that bureaucracies have to chase the preferences of their political masters.

But bureaucracies are not mere agents of the executive.  Bureaucracies do not always dispassionately assess policy options in a neutral, technocratic manner according to the requests of their elected superiors.  Bureaucracies have their own policy preferences, and can drive elected representatives in certain directions.  The classic fictional portrayal of the clash between bureaucratic interests and political interests is the Yes, Minister television series.  Yes, Minister drew heavily on the insights of the public choice school of political economy.

It is worth briefly outlining the classical public choice perspective on bureaucratic behaviour before applying that model to the fragmented regulatory state.

Public choice theory makes one simple claim:  individuals who work in the public sector are as driven by self-interest as those who work in the private sector.  The basic assumptions of economics — incentives matter, and individuals seek to maximise their own happiness, or wealth, or leisure — apply to actors working in non-market environments too.

Public choice is a corrective to the implied model of bureaucracy that still dominates popular understanding;  that is, bureaucracies act solely in the "public interest", and public servants are servants of the public.  But there is no reason to believe than an individual, moving from the private sector to the public sector, abandons their own desires, can act against their own incentives, and stops being driven by self-interest.  Public choice is a way of studying government without the romance.  If the market is dysfunctional — if it is flawed because of information asymmetries, externalities, or irrational actors — then the public sector is just as deeply, if not more deeply, flawed.

The political economist William Niskanen described bureaus as "nonprofit organizations that are financed primarily by a periodic appropriation or grant". ⁽¹⁴⁾  Bureaucracies are not passive actors in the process of government.  Niskanen argued that bureaucracies try to maximise three things:  pay, power, and prestige.  A successful bureaucracy is one that increases its discretionary budget, increases its powers, and increases its prominence.  The central recognition is that principle-agent problems are rife in the public service.  It is (often) in the interests of parliament that appropriations are minimised, but it is in the interests of the bureaucracy that appropriations are maximised.

For our purposes, the bureaucracy acts as a special interest embedded within the structure of government.  Bureaucracies compete against each other for an increased share of the total bureaucratic budget.  But that total budget is not fixed, so bureaucracies can cooperate to influence the total size:  as a unified entity they act as a special interest pressuring legislators to raise taxes or reprioritise total government spending.

Dieter Bös offers a compelling model of bureaucratic lobbying that posits antagonistic competition between individual bureaucrats for a share of the budget, but cooperation to grow the pool. ⁽¹⁵⁾  Bös makes a further important point for our purposes here.  The currency of bureaucratic lobbyists is time, not money.  Most discussion of lobbying concerns issues like campaign contributions, as there is a popular perception of private sector actors as dominating lobbying.  The calculation of a car company lobbying for subsidies — where it could justifiably spend on lobbying up to the benefit of the subsidy less a reasonable rate of return — does not hold for public sector agents.  Bureaucracies have no other means by which to "profit" other than lobbying.  Public sector lobbying has one significant advantage over private sector lobbying:  access.  Corporations donate to campaigns in order to gain access.  Bureaucracies, institutionally embedded in the political system, already have that access.

The classical public choice model of bureaucracy was developed in the 1970s;  that is, before the fragmentation of the regulatory state.

Some reform to the public service was specifically designed to counter some public choice problems.  For example, the corporatisation of government enterprises was intended to introduce market discipline into formerly non-market service provision.  The contracting out of government services was supposed to deal with similar problems:  a more efficient private sector would be able to perform functions cheaper and more effectively than a politicised public sector.  But these reforms have also exacerbated some more challenging and pervasive problems.

Bureaus increasingly act as discrete special interests acting within the formal structure of government.  Independent regulatory agencies lobby legislators as much as traditional bureaucracies for more power, money or prominence.  But as they are independent entities — disconnected, intentionally, from the political chain of delegation and accountability — their requirements are more opaque.  Individual ministers are less likely to personally gain from the prestige of larger regulatory agencies under their portfolios as they might with a department.  But on the other side they are less able to judge the necessity of increased power or budgets.

Politicians typically treat the lobbying of an internal body and the lobbying of an external private actor differently.  Obviously, they are not treated as "lobbyists" in the common sense of the term:  government departments do not appear as clients on the lobbyist register.  (The only exception to this is the Victorian Department of Industry, which appears as a client of Executive Counsel Australia.) ⁽¹⁶⁾  When formal inquiries are being held into new legislation, they typically appear as the final witnesses, long after representatives of civil society have had their say.  Even then, policy proposals are formulated in consultation with these independent but internal bodies.

The 2012 parliamentary inquiry into national security reform offers a particularly strong illustration of the role of internal lobbying on the political process.

In July 2012, the Parliamentary Joint Committee on Intelligence and Security was presented with a discussion paper from the Attorney General's Department, containing dozens of proposals to reform the Commonwealth's surveillance and national security powers.  The paper was vague and lacked little supporting detail for its proposals, particularly for its most controversial one:  to require internet service providers to store internet usage data for up to two years.

Submissions were called for, received, then closed.  Civil society organisations were the first to give evidence on the proposals.  It was however only until those third parties were finished and the committee began to hear the evidence of a range of government bureaucracies that the detail about the proposals began to emerge.

It soon transpired that it was not "national security" that data retention was primarily aimed at;  it was all regulatory power.  It emerged that corporate and competition regulators, the taxation office as well as ASIO and the federal and state police departments had been lobbying the Attorney General's Department to increase their power.  In committee, it was discovered that the Australian Securities and Investments Commission and the Australian Taxation Office had been pushing for significantly greater powers.  The Australian Competition and Consumer Commission wanted to use data retention — presented to the public as a matter of anti-terrorism and child pornography — to pursue far less serious offense like petrol price collusion.

The virtues of data retention are outside the scope of our investigation.  But this episode accidentally revealed the extent to which government policy proposals are shaped as a result of lobbying from within government.  The ACCC and ASIC are independent regulators, formally separate from the lines of accountability.  But as they have close relationships within the government, they are in a position to formulate policy at an early stage — indeed, at a far earlier stage than the high-profile external lobbyists and advocacy groups that receive the lionshare of negative popular sentiment.

Not all inter-bureaucratic lobbying is targeted at the outcomes we have identified — prestige, discretionary budgets and labour force size.  Culture matters as well.  Just as private sector actors are not rationally-maximising automatons, public sector actors can be driven by a whole range of motives.  Many — even most — public servants are inspired by a sense of public duty, for instance.  We should not imagine the public choice model predicts a bureaucratic war of all-against-all.

Elected governments come and go, but bureaucracies are constant.  Most public servants spend the majority of their careers in a single agency.  The consequences of this constancy and length of employment is that bureaucracies develop their own cultures and policy preferences which they advocate to governments of all stripes.

Obviously agencies have an incentive to defend and expand existing programs.  But further than that, agencies tend to have a "departmental view" on certain policy positions. ⁽¹⁷⁾  As we have seen in the case of data retention, we would expect those preferences to broadly align with policies which expand the power, prestige, or maximise the discretionary budget of bureaucracies.  Public servants would systematically favour policies which increase state power.

It is only human that public servants are more likely to see government as the solution to social problems.  Individuals who are reliant on taxpayer funding are likely to favour increased expenditure, even in circumstances where they may not directly benefit:  it is a rare bureaucrat that wishes to reduce the size of government.  We can see this systemic bias in voting patterns in the Australian Capital Territory, which disproportionately favours the Australian Labor Party and the Australian Greens.  Peter Saunders has shown that public servants "are less likely to see tax as an important election issue, are less likely to agree that high taxes destroy work incentives, and are less likely to think that taxes could be reduced by cutting wasteful expenditure." ⁽¹⁸⁾

Even within highly hierarchical bureaucratic structures, public servants have a substantial capacity to direct policy towards their own preferences.  Ministers tend not to direct the bureaucracy clearly;  favouring vague instructions to fully enunciated ones. ⁽¹⁹⁾  The lack of clarity enables bureaucrats to nudge policy in their own direction.

3.1 STATUTORY AGENCIES LOBBYING FOR LEGISLATIVE CHANGE

Historical experience has demonstrated that the policy lobbying of bureaucracies and independent regulatory agencies is highly effective and influential.  Some scholars see independent regulatory agencies as the driving force behind deregulatory movements in the 1980s, particularly in newly privatised industries such as telecommunications, energy and water.  One writer argues that "a mode of regulation emphasizing independence and expertise" is able to "push through deregulation when economic and technological change make public oversight no longer necessary". ⁽²⁰⁾

At first blush, it makes sense for specialist regulators to be at the forefront of legislative change.  The expertise of an independent regulator lends authority to its policy recommendations.  But like traditional bureaucracies these bodies too have their own policy preferences.  Their incentives are not to favour the public interest but their own interests:  that is, more funding, more statutory powers, more independence, and more prominence in the public eye.

Nevertheless, independent regulatory agencies are concerned with the administration of existing public policy;  advocacy for policy change is not their primary focus.  The Australian government is increasingly establishing institutions that are specifically designed as policy advocates.

In the next section we shall look at two of these bodies — the Australian National Preventative Health Agency and the Australian Human Rights Commission — that are concerned with policy research, development and, most importantly, policy advocacy as part of their statutory role.  Unlike regulatory agencies, the bureaucratic biases behind these forms of institutions are transparent:  in both cases they were formed with a specific policy direction in mind, and their role is to pursue that.  The Australian National Preventive Health Agency was established to encourage government to intervene in public and preventative health matters, including advocacy of tax increases and regulations.  The Australian Human Rights Commission was established to manage discrimination and human rights complaints and encourage parliament to implement more human rights legislation.

While both these bodies have the usual incentives to gather extra responsibility and funding, they are driven significantly by their ideological perspectives.  When we study the actions and advocacy of ANPHA and AHRC, we see them urge for all three.

One final model of taxpayer funded lobbying is that conducted by organisations which receive large amounts of government funding.  As governments increasingly favour outsourced service delivery to non-governmental organisations, groups which were established as policy lobby groups are now recipients of significant taxpayer money.  Despite receiving public funds, many of these bodies have continued to push for legislative change according to their original goals — in other words, the government is sponsoring bodies to lobby it.

Of particular interest here is the self-replicating nature of these taxpayer funded organisations:  much of what they lobby for is increased government expenditure, which can often benefit those organisations.  This cycle of grants is pervasive in Australian public policy, as we shall see in Section 6.0.

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4.0 AUSTRALIAN NATIONAL PREVENTIVE HEALTH AGENCY

4.1 ORIGINS AND PURPOSE

In her Second Reading speech for the Australian National Preventive Health Agency Bill 2010, the then-Minister for Health and Aging Nicola Roxon said it would establish "national infrastructure to help drive major change in the way we behave and how we look after (or don't look after) our own health."  The new agency would "embed preventive health thinking and action, permanently, into the future as an enduring institution."

The Australian National Preventive Health Agency grew out of the Preventative Health Taskforce.

This Taskforce was a promise of the 2007 election.  Announced in June that year, it was part of a broader healthcare package to "shift Australia's health focus to preventing lifestyle diseases and illnesses", and included a commitment to commission a study on the economic costs of chronic diseases from Treasury.  The Taskforce would include focus on incentives for general practitioners to practice preventative healthcare. ⁽²¹⁾

Chronic disease incentives are a serious issue.  Medicare struggles to deal with chronic diseases;  its single payment model means there is a disincentive for general practitioners to perform the long-term care which is necessary for chronic disease management. ⁽²²⁾  As a workaround for these issues, Medicare has been augmented with a range of complex incentive schemes.

This proposal was closely tied into the opposition's proposal for general practitioner health reform across the board.  Just as GP Super Clinics would reduce the administrative burden on GPs and allied health services, a renewed focus on preventative health would reduce the need for those services.

However, after the 2007 election, the focus of the Preventative Health Taskforce shifted from an integrated part of the now-Rudd government's hospital and general practice policy, to an entirely different beast.

While the Taskforce's focus was always initially going to be on chronic diseases relating to alcohol, tobacco and obesity, only one of the nine members of the taskforce was a general practitioner, Dr Christine Connors, and even then her professional focus was indigenous health.  There was only one representative of industry — Kate Carnell, of the Australian Food and Grocery Council — and no representatives of the tobacco or alcohol industries.  Both the Taskforce Chair (Professor Rob Moodie of the University of Melbourne) and Deputy Chair (Professor Mike Daube of Curtin University of Technology) are leading lights in the euphemistically named "tobacco control" movement.

The Taskforce was formally constituted in April 2008.  Its Discussion Paper, "Australia:  the Healthiest Country by 2020" was released in 2008.  Submissions were called for, three "technical" papers were released (dividing the task into tobacco, alcohol, and obesity), and the final report was published in September 2009.

With such an enormous scope, there was a significant response to the discussion paper.  There were 376 separate submissions.  They were drawn from private firms, medical bodies, public health lobby groups, and peak bodies.

Submissions and public inquiries are formal mechanisms whereby interest groups and affected parties can comment on policy proposals.  Policy makers use them to increase their knowledge of the issues, and the stakeholders use them to direct policy makers in their preferred direction.

Nearly one-third of the submissions to the Taskforce inquiry were produced by organisations that received all or a substantial amount of their funding from government — a total of 103 separate submissions.

Figure 1:  Submissions by government funding

Source:  Preventative Health taskforce

Many government departments placed submissions into the taskforce's inquiry.  The Queensland Department of Health argued for the restrictions of junk food advertising.

The Victorian Health Promotion Foundation (better known as VicHealth) receives the vast majority of its income from the Victorian government.  VicHealth called for "comprehensive legislation to prohibit all forms of marketing and advertising of foods or beverages, other than healthy foods or beverages, directed to children", traffic light style food labelling, junk food taxes, plain packaging for cigarettes, and a whole host of other interventions. ⁽²³⁾

A large number of organisations funded by government put in submissions.  To take a sample:

• Aquatics and Recreation Victoria, an organisation funded in part with a grant from the Victorian government to run VICSWIM, recommended that the Taskforce increase funding for Aquatics and Recreation Victoria. ⁽²⁴⁾
• Dairy Australia, an industry body funded by a compulsory levy on dairy producers and matching government research grants, called for extra collaborative work with organisations like Dairy Australia. ⁽²⁵⁾
• Quit Victoria, funded in large part by the Victorian Department of Health, called for an extensive range of anti-tobacco policies, including plain packaging. ⁽²⁶⁾  Quit Victoria supported the establishment of a Preventative Health Agency and suggested that the agency could "work together" with Quit Victoria, as well as put the Victorian organisation in charge of a national Quitline. ⁽²⁷⁾
• The Australian Association for Exercise and Sports Science represents sports and exercise scientists and psychologists.  It receives grants from the Commonwealth Department of Health and Ageing. ⁽²⁸⁾  In its submission, the association asked the Taskforce to recommend the mass part time employment of its members across government agencies to provide strategic advice. ⁽²⁹⁾

One recurrent theme throughout the submissions is the call on extra government funding — particularly from organisations that already received government funding.  Often those calls would be directed towards the submitting organisations themselves.  In this way government support for lobby groups is self-reinforcing.  Government funding is used to lobby for more government funding.

Nevertheless, after this extensive submission process, more than 23 days of consultations across the country from Dubbo to Mt Gambier, the final document largely affirmed the policy recommendations of the Discussion Paper.

The Preventative Health Taskforce report was released in September 2009 and offered 122 policy recommendations.  Some of these policies included:

• Making smoking a "classifiable element" in movies and video games, similar to the way the classification scheme treats sex and violence.
• Plain packaging for cigarette packets
• "Nationally consistent" laws for late night liquor outlets, outlet density and responsible serving of alcohol laws
• A "Healthy Food Compact" between governments, industry and non-government organisations to "drive change within the food supply"
• Increased and simplified food labelling
• Phase out junk food advertising on television before 9pm either voluntarily or by regulation.

A very large number of the recommendations were calls on the public purse.  The Taskforce wanted more taxpayers' money to go towards:  monitoring liquor laws, monitoring drink driving, increasing the resources of Quitline, health care for alcohol problems, campaigns to build a national consensus on alcohol consultation, to "de-normalise" intoxication, and so on.

Then there were a very substantial number of calls for more research, campaigns and advocacy programs.

But the key policy was the establishment of "critical infrastructure" to pursue public health policy.  The Taskforce proposed a statutory body which would "be independent", but work closely with government and report to parliament through the Minister for Health. ⁽³⁰⁾

The government's response stated that "The lack of national and local infrastructure working cohesively on preventative health has hindered effective action on key chronic diseases and their associated risk factors."  The Preventive Health Agency (the spelling has curiously changed from "preventative" to "preventive") "will work across jurisdictions and portfolios to drive the changes required to turn the tide on the escalating burden from these conditions." ⁽³¹⁾

Of the 122 proposals of the Preventative Health Taskforce, the only major ones to have been implemented are the establishment of the Australian National Preventive Health Agency, and the introduction of plain packaging for cigarettes.

4.2 CAMPAIGNING FOR LEGISLATIVE CHANGE

The Australian National Preventive Health Agency Act 2010 established the new institution, a statutory authority which reports to the Minister for Health.

The Australian National Preventative Health Agency calls itself "Promoting a Healthy Australia".  It has a policy jurisdiction over healthy lifestyle promotion, "reducing tobacco use", "minimising the harmful drinking of alcohol", "discouraging substance abuse", and "reducing the incidence of obesity".

ANPHA is likely to be a permanent fixture of the Australian policy landscape.  The Coalition supported the bill in 2010 and there appears to be no political desire on either side of politics to close this new body.

This new agency is a statutory agency of the Commonwealth government, with all the funding, institutional support and capacity that implies.  In the 2012-13 Federal Budget, ANPHA received $57,718,000.  The chief executive of the agency is appointed by the Minister for Health, and the staff of the agency is public servants employed according to the Public Service Act.  It is responsible to parliament through the Minister for Health.

Yet at the same time the government has repeatedly affirmed the desire of the taskforce that the ANPHA should be "independent".  ANPHA's explicit purpose is to "drive major change" in public health policy.  On its own initiative and on instructions from the health minister, it advises and recommends policy for local, state, territory and federal governments.  It collects statistics and other information on preventative health.  It has a generous grant budget to hand out for preventative health research.  It conducts "educational, promotional and community awareness" campaigns.  It develops national standards and codes of practice.

It also acts to disperse government money to researchers and public health organisations.  While there has only been one funding round of the Preventive Health Research Grants Program, their dispersal suggests the direction that future rounds may take.

The Preventive Health Agency has a research committee and four internal committees on alcohol, tobacco, obesity and national evaluation.  One of the most generous grants has been given to a member of the agency's committees.  Professor Tanya Chikritzhs, from Curtin University is a member of the Expert Committee on Alcohol specialising in "alcohol research". ⁽³²⁾  In March 2012 she received a grant of $224,792 to investigate "the public health impacts of liquor outlets in Queensland communities". ⁽³³⁾

Other grants have gone to external organisations that conduct significant government lobbying.  The Cancer Council Victoria and the Cancer Institute NSW has been given $348,093 to research and develop advertisements promoting health weight.  The Cancer Council Victoria (in a partnership with the University of Melbourne) has also received $389,640 to investigate international trade laws and regulations that "have the potential to undermine public health initiatives" — a clear reference to the legal challenges to tobacco plain packaging in Australian courts and international bodies.

With both these latter grants, the advocacy role of the Preventive Health Agency is clear.  The agency is not primarily a health research body.  Australia has had the National Health and Medical Research Council since 1937.  While the agency does research, it is research directed towards public policy rather than medical research.  Rather than assessing the need for policy intervention, it takes that need as granted and seeks to design policies to suit.

ANPHA also has a marketing purpose as well.  It runs campaigns — The National Tobacco Campaign, which released an iPhone application, MyQuitBuddy;  Swap It Don't Stop It, an anti-junk food campaign with extensive print and broadcast advertising;  and the National Binge Drinking Strategy, which has a substantial marketing wing.

But first and foremost the Preventative Health Agency is a lobbyist for whom the government is both client and target.  Goal 1 of the agency is to "promote and guide the development, application, integration and review of public, organisation and community-based prevention and health promotion policies".  According to the 2011-12 Annual Report, not only did the agency meet with all state and territory health ministers, but has had 110 separate "consultations" with government officials to push its agenda.  This is an extraordinary large number, and suggests that the impact of the agency will not be its research grants, or its social marketing campaigns, but its internal lobbying.

On top of that internal work, the agency also reports that it has had over 200 meetings with non-government organisations and industry bodies.

As if to demonstrate how circular the cycle of funding, lobbying and institution building has become, the Annual Report lists as one of its major achievements in 2011-12 that it provided expert advice by writing a submission to the House of Representatives Standing Committee on Health and Ageing inquiry into plain packaging.  Plain packaging was one of the major recommendations of the taskforce that also recommended the agency.

In other words, the Preventative Health Taskforce recommended both a major public policy and the formation of an institution to advocate that public policy.

The agency is certain to apply a deeply ideological approach to health policy.  Preventative health is, itself, a controversial field.  The Preventative Health Taskforce recommendations were uniformly characterised by an interventionist approach — the 122 recommendations included substantial tax increases, substantial public expenditure, a large number of new regulations and public campaigns.

As I argued in my submission, the taskforce:

1. downplays the positive role individual choices can play in the health sphere,
2. pays little attention to the rights of individuals to consume legal products of their choosing, and for commercial vendors to provide consumers with those legal products,
3. fails to interrogate the extent to which the management of individual risk should be appropriated by the state,
4. neglects to properly assess the evidence base of its policy prescriptions, and
5. presents policies that fail to live up to the framework of evidence‐based public policy. ⁽³⁴⁾

The agency was only established in 2010.  It has already pushed itself to the forefront of the debate over wine taxation.  Any push for future Nanny State regulation will be aided by the substantial resources the agency has at its command.  Given the dispersal of research funding in its first year — directed largely at the obstacles to implementing increased restrictions on what we drink, eat and consume — it is likely that the establishment of the agency will be a watershed moment.

The Preventive Health Agency is a classic illustration of the importance of institutions within government.  It is a taxpayer funded special interest with privileged access to all levels of government.

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5.0 AUSTRALIAN HUMAN RIGHTS COMMISSION

5.1 ORIGINS AND PURPOSE

The Australian Human Rights Commission, established in 1986, is a Commonwealth statutory agency with responsibilities under federal human rights and anti-discrimination legislation:  the Racial Discrimination Act 1975, the Sex Discrimination Act 1984, the Disability Discrimination Act 1992 and Age Discrimination Act 2004.  It also has roles under the Fair Work Act 1996 and the Native Title Act 1993.  A predecessor organisation (titled simply the Human Rights Commission) was established 1981.

Unlike the Australian National Preventive Health Agency, the commission has a wide set of functions — it is not merely a statutory lobbyist.  It has two primary roles:  to handle individual complaints about human rights breaches and to ensure Australians "benefit from human rights education, promotion and monitoring and compliance activities".

To fulfil its first role, the Australian Human Rights Commission has a quasi-judicial function — it runs conciliations to resolve complaints about discrimination, harassment or bullying, on the grounds of age, disability, sex, race, as determined in anti-discrimination law.  In this manner, the commission is of the same category as many other state and federal quasi-judicial agencies, for instance, the Refugee Review Tribunal, or the Administrative Appeals Tribunal.

Yet it is in its second role that the commission is more unusual:  to educate and promote human rights in Australia.  These rights are defined by the international human rights legislation which Australia is a party to, including the International Covenant on Civil and Political Rights and the International Convention on the Elimination of All Forms of Racial Discrimination.

The commission's promotional material declares that it is interested in "setting and advancing national agendas".

We have a track record of drawing national attention to pressing human rights issues, raising community awareness and encouraging positive action by governments, service providers and others. ⁽³⁵⁾

To do this, the commission has an extensive education and advocacy focus.  It lobbies for legislative change.  It produces "independent" research pushing its own agenda.  It runs education campaigns to promote its preferred model of human rights thought.

In the 2012-13 Federal Budget, the AHRC was provided with $23,133,000.  Unfortunately the AHRC does not break down the expenditure between its compliance and advocacy functions.

5.2 CAMPAIGNING FOR LEGISLATIVE CHANGE

One clear illustration of the power of a taxpayer-funded statutory agency promoting its own legislative agenda is the long campaign to introduce Commonwealth limitations on freedom of speech along racial and religious lines.

The commission and its 1981 predecessor led the advocacy for the introduction of hate speech laws in the Racial Discrimination Act.

It published a report in November 1983, Proposal for Amendments to the Racial Discrimination Act to cover Incitement to Racial Hatred and Racial Defamation. ⁽³⁶⁾  In that report, the commission urged parliament to make "incitement to racial hatred" a crime, and expand defamation to include group defamation according to race, colour, descent or national or ethnic origin.

The commission repeated this call in its major 1991 report Racist Violence:  Report of the National Inquiry into Racist Violence in Australia, arguing that the government should fully accede to the Committee on the Elimination of Racial Discrimination and remove its reservations that limiting discriminatory speech would be a limitation on freedom of speech. ⁽³⁷⁾  By doing so, the commission exceeded even its own self-written Terms of Reference, which was directed at "acts of violence or intimidation based on racism".  Group defamation surely exceeds those limitations.

The commission was a major participant in the inquiry into the Racial Hatred Act 1995, which amended the Racial Discrimination Act to add provisions that made unlawful acts which "offend, insult, humiliate and intimidate" on racial or ethnic grounds.  When that legislation was passed, it was also accompanied by a significant funding increase for the commission itself, to promote awareness of the new law and campaign for its acceptance.

This is one of the most prominent examples of the commission campaigning, but it is hardly the only one.

In June 2012, the Aboriginal and Torres Strait Islander Social Justice Commissioner Mick Gooda backed a Greens bill to amend Native Title legislation. ⁽³⁸⁾  In 2010 he called for constitutional reform. ⁽³⁹⁾  The Age Discrimination Commissioner, Dr Susan Ryan, argued in May 2012 for substantial age discrimination reform. ⁽⁴⁰⁾  The commission has been a long-time advocate of increased Commonwealth human rights legislation. ⁽⁴¹⁾  It protested the abolition by the Howard government of the Aboriginal and Torres Strait Islander Commission after the organisation was mired in corruption allegations. ⁽⁴²⁾

In 2010, it contributed 15 submissions to parliamentary and independent inquiries.  In 2011 it contributed 18, and in 2012 contributed 30.  These covered everything from insisting human rights be recognised as a core value of the Australian Public Service, to arguing that the National Curriculum's Geography subject "investigate geographical events using an ethical lens." ⁽⁴³⁾  In a submission to a parliamentary inquiry into cyber-safety, the commission even argued that in order to teach the elderly about online safety, it would be necessary to take out print advertisements — elderly people did not use the internet.

The commission has been explicit about its policy advocacy role and its opposition to government policy.  In 1996, Sir Ronald Wilson, then President of the Human Rights and Equal Opportunity Commission, told a parliamentary committee how his body would respond to the Bringing Them Home (stolen children) Report:  "it is important within the Human Rights Commission to pursue the selling of the recommendations, the monitoring of their implementation, consultation with government and other participants in the political process." ⁽⁴⁴⁾  As Gary Johns wrote in response:  "an appointed official is suggesting that he will sell the recommendations of the commission, apparently regardless of the views of the Government [and] will consult only with the Government as if it is somehow above government and will work with other participants in the political process." ⁽⁴⁵⁾

In its 26 years of activity, the Australian Human Rights Commission has done an extremely wide range of marketing and promotion.  It holds events.  It gives out awards to individuals, young people, legal organisations, businesses, community groups, authors and broadcasters.  It sets up committees and "ambassadors", such as the Male Champions of Change group.  It runs education campaigns and awareness campaigns.

Like all bureaucracies, one major theme of its policy advocacy is to attract more prestige, funding, influence and power.

This was no clearer than in the AHRC's submission to the Rudd government's 2009 National Human Rights Consultation. ⁽⁴⁶⁾  Apart from a strong advocacy for an extensive set of new legislatively enshrined rights, the AHRC strongly urged the government to increase its financial support of the AHRC, along with new powers and an increased prominence in the legislative system.

Regardless of whether the Commonwealth decided to pass a Human Rights Act, the AHRC wanted to be empowered to consider a wider array of "rights", be given guarantees that parliament would respond to its reports, increased power to intervene in court cases, extended jurisdiction over private employers, state laws and any other bodies it deemed fit, and be empowered with a formal inquiry function, as well as enforceable remedies.

5.3 AN IDEOLOGICALLY BIASED MODEL OF "HUMAN RIGHTS"

The AHRC is highly selective about what human rights issues it pursues.

One current awareness campaign, Something in Common, encourages visitors to its website to share human rights related stories.  On the site, human rights issues are grouped into themes — Freedom, Respect, Equality, and Belonging.  The distinctions made betray a particular ideological approach by the sites founders.  The Freedom theme describes itself like so:

We all want to freedom and to be safe from harm. [sic] This means being able to live our lives without fear.

As of November 2012, the four "issues to read and discuss" of the Freedom theme are activism against gender violence, bullying and harassment, seeking asylum, and violence against women.

These are legitimate issues.  However, it is not clear that they are the sum total of, or even representative of, the challenges to freedom on Australia in the twenty first century.  Where is, for instance, freedom of speech, freedom to own property, to participate in the political process, or freedom to observe a religion?  With the exception of the asylum seeker discussion point, the site authors appear to have reframed "freedom" as a feeling of security.  This however makes it hard to distinguish from equity, respect, and belonging.

An online poll published in February 2013 on the Something in Common website demonstrates clearly the absence of these basic human rights in the ideological mindset of the AHRC.  The poll asked site visitors "What is THE most important human rights issue for the 2013 federal election?"

The possible answers included "Treatment of asylum seekers", National Disability Insurance Scheme", "Closing the Gap", "Equal Marriage", or "Other".

The sole reference on the Something in Common website to one of the oldest and most fundamental rights, freedom of speech, is only mentioned to justify limits on that freedom.  In a discussion about the feminist campaign Destroy the Joint, the site explains:

Freedom of speech is a fundamental human right.  However, internationally and under Australian laws there are limits to that right — for example, to protect against defamation and vilification.  Why are these laws limiting free speech important?  Why does harassment matter?  Because sometimes abuse isn't just hurtful, it's harmful to your health.

Such reluctance to defend freedom of speech is found throughout the Australian Human Rights Commission's output.  A Google search for "freedom of speech" on the humanrights.gov.au site returns 413 hits.  A search for "vilification" returns nearly twice that:  1,130.  Of those mentions of freedom of speech, the discussion is always about how that liberty should be limited ("Freedom of speech should not trump the right to safety", "The Racial Hatred Act ... Free speech comes at a price", "Extremist Ideology is Not Freedom of Speech", "Freedom of speech and race hate speech in Australia", "Exercising permissible limits on free speech".)

In its Intervention in the Federal Court case Clarke v Nationwide News Pty Ltd, which concerned the application of Section 18C of the Racial Discrimination Act to a series of user comments on a newspaper website, the AHRC explicitly argued for the court to favour anti-discrimination over freedom of speech in its interpretation of the law.  The exemptions in the Racial Discrimination Act that protect freedom of speech should be "construed narrowly ... because anti-discrimination legislation, as beneficial and remedial legislation, should be given a liberal construction" ⁽⁴⁷⁾

A further suggestion of the peculiarly political perspective on human rights held by at least some at the AHRC appears in a 2009 paper "Freedom of Religion and Belief in a Multicultural Democracy:  an inherent contradiction or an achievable human right?" co-authored by the then Aboriginal and Torres Strait Islander Social Justice Commissioner Tom Calma. ⁽⁴⁸⁾  (The paper offers a standard rider that the views may not represent those of the commission's but given that it was written by a commissioner and published on its website, it is a good indication of the philosophical perspective that characterises the commissions' view on human rights.)

In this paper, Calma and his co-author, mount a case for government intervention in private religious matters, proposing a role for the state in "moderation of the public sphere".  In religious matters, "the hand of government, even if gentle and gloved, may be required to ensure the public good".

Freedom of religion — that is, freedom of conscience and the liberty to express that conscience — was the first liberty fought for in the modern era. ⁽⁴⁹⁾  Religious liberty is the quintessential "negative" liberty, in Isaiah Berlin's famous model:  it requires nothing but the government get out of the way.  However, the Calma paper suggests that its model of religious liberty is centred on state action.  It even goes so far as decrying the "persistence" of religious belief in the modern world.

The Australian Human Rights Commission has a very particular philosophical and ideological perspective — one that sees human rights as a matter for government action, not government restraint.  It speaks more about the progressive concept of "social justice" (8,130 Google hits on its website) than it does the liberal and conservative concept of "liberty" (1,260 hits).

Ideological preferences are fine, of course, but the commission is a heavily resourced government agency.

One influence on the unbalanced approach is the structure of the agency itself.  The AHRC is divided into six commissioners who direct the policy work of the agency.  They are the Aboriginal and Torres Strait Islander Social Justice Commissioner, the Age Discrimination Commissioner, the Disability Discrimination Commissioner, the National Children's Commissioner, the Race Discrimination Commissioner and the Sex Discrimination Commissioner.

This is a remarkably unrepresentative of the human rights issues the agency is supposed to promote.  There is no Freedom of Speech Commissioner, Freedom of Religion Commissioner, Property Rights Commissioner, or Freedom of Association Commissioner, all of which are recognised in international human rights law.

One particularly clear illustration of how one-sided AHRC campaigns are occurred during the debate over Gillard government's 2012 draft exposure of the Human Rights and Anti-Discrimination Act.

Released in late November 2012, the draft bill was purportedly a simple consolidation of Australian discrimination law, but went much further:  making it unlawful to "offend [or] insult" on the basis of their "political opinion" in any "work-related" environment.  The limitations that such a law would place on the expression of opinion and freedom of speech are obvious, as I pointed out the day after the draft bill was published. ⁽⁵⁰⁾

However, in its submission to the Senate Legal and Constitutional Affairs Committee that was inquiring about the draft bill, the AHRC urged the government to go much further.  It called for political offense to be made unlawful in all areas of public life, and did not raise any issues that the draft bill might have had concerning freedom of speech. ⁽⁵¹⁾

There is some indication that the attitude of the AHRC has changed in response to the vast public outcry around the draft bill.  In an opinion column in January, the AHRC president Gillian Triggs suggested that "it might be wise to amend the bill, so far as it applies to acts that offend or insult". ⁽⁵²⁾

While this is a welcome change, it is a disturbing reflection on the values of the AHRC that this clear infringement on freedom of speech is only objectionable to the commission if, for political reasons, it ends up scuttling the draft bill as a whole.

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6.0 TAXPAYER FUNDED NON-GOVERNMENT LOBBYING

As we have seen, the two statutory agencies discussed in this paper, the Australian National Preventive Health Agency and the Australian Human Rights Commission, are also key agencies in the relationship between governments and the taxpayer funded non-government sector.

There exists a large network of publicly funded organisations, researchers and activists who draw substantial amounts of money from government in the form of grants.  They then use that money to advocate their policy preferences, and, just as much, propose increased grant programs for them to take advantage of.

In their 1985 book, Destroying Democracy:  How Government Funds Partisan Politics, James T Bennett and Thomas J DiLorenzo describe this process as follows:

1. Politicians allocate taxpayer funds for programs under the guise of alleviating the plight of the poor, the sick, the elderly, the unemployed ... and serving the "public interest";
2. The bureaucrats who administer the programs provide taxpayer funds to political advocacy groups through grants and contracts ostensibly intended to carry out program objectives;
3. However, much of the money received by political activists is used to lobby, campaign, and organize support for new programs for the bureaucracy to manage, additional funding for existing programs, and the (re)election of politicians who favor the appropriations which fund the political advocacy.
4. The political advocacy groups proselytize for their programs to persuade the public through the media that greater spending is essential to deal with a pressing social problem;  sympathetic politicians receive campaign contributions and assistance in their re-election efforts;  these politicians appropriate more funds for existing programs and initiate new programs;  the bureaucracy awards more taxpayers' funds to the advocacy groups, and the process recycles from step 1. ⁽⁵³⁾

Figure 3:  The Grant cycle shows this graphically:  the cycle of outsourcing, funding, advocacy and further funding which drives grant programs.

We can see this phenomenon most vividly in the submissions to the Preventative Health Taskforce, where a large number of bodies which already receive government funding used the process to advocate more government funding — funding which, no doubt, they would like to be directed at them.

The Australian government runs a wide range of grant programs.  Many of these grants are used to outsource service delivery, as discussed above.  There has been long running criticism that organisations that receive government funding for service delivery use that funding to advocate policy change, often contrary to the views of the government of the day.

The extent of such grant programs should not be underestimated.  A NSW government audit of government grants identified at least 164 grant programs in that state alone.  They found that approximately 70 per cent of state grant funding was deployed for service delivery. ⁽⁵⁴⁾

Another major stream of government grants subsidise research.  Higher education providers can receive research block grants.  Individual academic researchers can apply for competitive grants through the Australian Research Council.  In the health sphere, the National Health and Medical Research Council offers a large number of grants to health researchers.

More common are individual project grants, administered by a wide array of agencies in order to achieve agency goals.  We have seen how the Australian National Preventive Health Agency has a research grant program focused on behavioural change.

But many other agencies and departments offer grants.  For instance, the Department of Immigration offers Living in Harmony project grants to non-government organisations of between $5,000 and $50,000 to "promote Australian values".  The Department of Families, Community Services and Indigenous Affairs' Sporting Heroes project distributes $1 million to high-profile athletes to deliver positive messages — including those relating to "healthy lifestyle choices".

6.1 INTERNATIONAL EXAMPLES

Few transformations in governance and political economy have happened in Australia alone.  The reforms of the 1980s were experienced, to a greater or lesser degree, almost simultaneously in the Western English-speaking democracies.  New Zealand, the United Kingdom, and the United States all went through a period of reform that saw not only the headline privatisations and tariff reductions, but also the expansion of regulatory institutions and public sector reform.

Accordingly, the problems identified in this report — of government bodies and publicly funded non-profit organisations pushing policy agendas at taxpayer expense — are present around the world.  To understand the challenges Australia faces it will be useful to survey how these problems have manifested in similar countries.  Here we briefly survey the experience of the United Kingdom and New Zealand.

6.1.1 The United Kingdom

The contracting out of public services to non-government organisations has been particularly significant in the United Kingdom. ⁽⁵⁵⁾  British charities are now predominantly funded by government grants.  A 2006 study by the Centre for Policy Studies analysed a three year period between the financial year 2000-01 and 2003-04 and discovered a massive increase in government reliance.  In that period, Britain's large charities increased their fundraising and marketing expenditure by 76 per cent.  In that time, donations from the general public only increased 7 per cent, but grant money increased 38 per cent. ⁽⁵⁶⁾

There are now 27,000 charities which are dependent on government funding for more than 75 per cent of their income.  As the British National Council of Voluntary Organisations has argued, there is a very real risk "the voluntary sector may be perceived as little more than an agent of the state".

Many charities that were founded, and still primarily function, as lobby groups have been caught up in this massive wave of government largess.  Christopher Snowdon identifies the Pedestrians Association (now called Living Streets) as one clear example of an independent lobbyist group that now receives more than fifty per cent of its income from government, supported by grants from the Department of Health, the Department of Transport, the Scottish government and the National Lottery.  However, even with this significant increase in government support, Living Streets has maintained its ideological and policy preferences;  calling for reduced speed limits, year-round British Summer Time (which is supposed to lower accident rates by making peak hour travel in lighter periods) and even planning restrictions for high street shops. ⁽⁵⁷⁾

One particularly interesting governance structure in the British context is charities which are set up by the government, and funded entirely with taxpayers' money.  For instance, the School Food Trust was founded by the Department of Education in response to the Jamie Oliver campaign about school food quality;  as Snowdon writes, bodies such as this act as "special advisors to the government and are essentially part of the bureaucracy". ⁽⁵⁸⁾  The similarities with the Australian National Preventive Health Agency are obvious.  Australia's innovation is to have made these bodies into such large, prominent and broad-based institutions with full statutory authority.

6.1.2 New Zealand

New Zealand too has a substantial government funded non-profit sector.  For example, the Ministry of Health and District Health Boards allocates between NZ$2 and $4 billion a year to the non-government sector for service delivery.

In 2003 it was revealed that a number of the government contracts with health-related non-government organisations specifically identified "advocacy" as an output to receive taxpayer funding.  A wide range of groups, including Action Smoking and Health, Aparangi Tautoko Auahi Kore, Smokefree Coalition, Alcohol Healthwatch, Manakau City Council, & the Obesity Action Coalition had activities such as "visit key portfolio MPs and Maori MPs" and "make formal submissions and presentations to the select committee considering legislative changes" in their government contracts.  As Rodney Hide argued, this was an explicit use of government funds to lobby for legislative change. ⁽⁵⁹⁾

A Ministry of Health review into these contracts found that they violated the NZ civil service principle of "political neutrality", and NZ Treasury's contract guidelines line include that principle.

Nonetheless, as David Farrar has pointed out, despite this apparent policy change advocacy organisations that receive significant amounts of government funds still appear to deploy this money to agitate for policy change. ⁽⁶⁰⁾  Action on Smoking and Health New Zealand receives NZ$578,000 per year from the NZ government — 89 per cent of its funding — and runs campaigns for policy changes such as plain packaging of cigarettes and tobacco tax increases.  This even includes an online petition to send mass emails to politicians.  The Public Health Association received $311,967, a large percentage of which appears to be deployed for "Advocacy/Healthy Public Policy".  The Smoke-Free Coalition also receives substantial government funding — $167,213 — 98 per cent of its total budget.

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7.0 CONCLUSION:  LOBBYING AND THE CLASH OF IDEAS

Democracy is a clash of interests and ideas.  Non-government bodies are an important input into public policy:  democracy does not merely constitute elections but it should encourage continuous public debate over government action.

However that clash can be diverted and distorted if government embeds special interests within the public policy framework.

As my research has demonstrated in the past, there is nothing necessarily representative about non-government bodies — they are of civil society but do not represent it. ⁽⁶¹⁾

If taxpayer-funded non-government organisations divert the public policy process, then statutory agencies undermine it.

The Australian National Preventive Health Agency and the Australian Human Rights Commission are institutionalised lobbyists, embedded within the structure of government, and designed to pursue a particular, highly-ideological agenda.

The ultimate decision-making power for legislation rests with parliament, and these bodies do nothing to alter that.

However, if we are sensitive to the power of private sector lobbyists, we should be even more sensitive to the power of publicly funded lobbyists that work within the structures of power rather than try to influence it from outside.

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BIBLIOGRAPHY

Bell, Stephen, and Andrew Hindmoor. Rethinking Governance: The Centrality of the State in Modern Society. New York: Cambridge, 2009.

Bennett, James T., and Thomas J. DiLorenzo. Destroying Democracy: How Government Funds Partisan Politics. Washington, D.C.: Cato Institute, 1985.

Wood, Richard J., The Growth of Australia's Regulatory State. Australia, 2008.

———. "Submission to the Preventative Health Taskforce's Discussion Paper 'Australia: The Healthiest Country by 2020'." 2009.

Bös, Dieter. "Contests among Bureaucrats." Public Choice 119 (2004).

Commission, Productivity. Contribution of the Not-for-Profit Sector. Canberra: Productivity Commission, 2010.

Foundation, Victorian Health Promotion. The Story of Vichealth: A World-First in Health Promotion. 2006.

Majone, Giandomenico. Regulating Europe. European Public Policy Series. London; New York: Routledge, 1996.

Niskanen, William A. Reflections of a Political Economist: Selected Articles on Government Policies and Political Processes. Washington, D.C.: Cato Institute, 2008.

Novak, Julie, Chris Berg, and Tim Wilson. "The Impact and Cost of Health Sector Regulation." Australian Centre for Health Research, 2010.

Page, Edward, and W. I. Jenkins. Policy Bureaucracy: Government with a Cast of Thousands. New York: Oxford University Press, 2005.

Peters, B. Guy. The Politics of Bureaucracy. 5th ed. London; New York: Routledge, 2001.

Saunders, Peter. "The Rise of the Opinionators." Policy 22, no. 2 (2006).

Smith, Richard, and Philip Whittington. Charity: The Spectre of over-Regulation and State Dependency. London: Centre for Policy Studies, 2006.

Snowdon, Christopher. "Sock Puppets: How the Government Lobbies Itself and Why." In IEA Discussion Paper: Institute of Economic Affairs, 2012.

Tullock, Gordon, and Charles Kershaw Rowley. The Rent-Seeking Society. The Selected Works of Gordon Tullock. Indianapolis: Liberty Fund, 2005.

Zagorin, Perez. How the Idea of Religious Toleration Came to the West. Princeton, N.J.: Princeton University Press, 2003.

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ENDNOTES

1. Wayne Swan, "The 0.01 Per Cent: The Rising Influence of Vested Interests in Australia" The Monthly, March 2012

2. Australian National Preventive Health Agency, "Promoting a Healthy Australia"

3. Australian Human Rights Commission Act 1986, Sect 11, Australian Human Rights Commission, "About the Commission"

4. Exploring the Public Interest Case for a Minimum (Floor) Price For Alcohol, Draft Report, Australian National Preventive Health Agency, November 2012

5. Christopher Snowdon, "Sock Puppets: How the Government Lobbies Itself and Why," in IEA Discussion Paper (Institute of Economic Affairs, 2012).

6. See, for instance, Richard J. Wood, "Green groups and the government: A dangerous duopoly", Occasional Paper, April 2011

7. Richard J. Wood, The Growth of Australia's Regulatory State (Australia: 2008).

8. Stephen Bell and Andrew Hindmoor, Rethinking Governance: The Centrality of the State in Modern Society (New York: Cambridge, 2009).

9. Wood, The Growth of Australia's Regulatory State.

10. Ibid.

11. Ibid.

12. Productivity Commission, Contribution of the Not-for-Profit Sector, (Canberra: Productivity Commission, 2010).

13. Ben Packham & Lanai Vasek, "Wayne Swan admits telling Treasury to cost Coalition policies", The Australian, 7 November 2012

14. William A. Niskanen, Reflections of a Political Economist: Selected Articles on Government Policies and Political Processes (Washington, D.C.: Cato Institute, 2008).

15. Dieter Bös, "Contests among Bureaucrats," Public Choice 119(2004).

16. Register of Lobbyists

17. B. Guy Peters, The Politics of Bureaucracy, 5th ed. (London; New York: Routledge, 2001).

18. Peter Saunders, "The Rise of the Opinionators," Policy 22, no. 2 (2006).

19. Edward Page and W. I. Jenkins, Policy Bureaucracy: Government with a Cast of Thousands (New York: Oxford University Press, 2005).

20. Giandomenico Majone, Regulating Europe, European Public Policy Series (London; New York: Routledge, 1996). p23

21. "$1.8bn boost to carers of disabled", The Australian, 28 June 2007

22. Julie Novak, Chris Berg, and Tim Wilson, "The Impact and Cost of Health Sector Regulation," (Australian Centre for Health Research, 2010). p25

23. VicHealth, Submission to the National Preventative Health Taskforce

24. Aquatics and Recreation Victoria, Submission to the National Preventative Health Taskforce; Aquatics and Recreation Victoria, Annual Report 2011-2012

25. Dairy Australia, Submission to the National Preventative Health Taskforce

26. Quit Victoria, "About"

27. Quit Victoria and VicHealth Centre for Tobacco Control, Submission to the National Preventative Health Taskforce

28. Exercise & Sports Science Australia, Annual Report 2011

29. Australian Association for Exercise and Sports Science, Submission to the National Preventative Health Taskforce

30. Preventative Health Taskforce, National Preventative Health Strategy — The roadmap for action 30 June 2009 p69-70

31. Australian Government, Taking Preventative Health Action: A Response to the report of the National Preventative Health Taskforce, p7-8

32. An archive of the ANHPA website confirms that Professor Chikrizhs has been a member of the Expert Committee on Alcohol since October 2011

33. Preventive Health Research Grant Program 2011-12 Grant Recipients

34. Richard J. Wood, "Submission to the Preventative Health Taskforce's Discussion Paper 'Australia: The Healthiest Country by 2020'," (2009).

35. Australian Human Rights Commission, About Us: Know Your Rights

36. Human Rights Commission, Proposal for Amendments to the Racial Discrimination Act, Report No. 7, 1984

37. Human Rights and Equal Opportunity Commission, Racist violence: report of the national inquiry into racist violence in Australia, 27 March 1991

38. Mick Gooda, "Native title reform could go closer to fulfilling Mabo's legacy", Sydney Morning Herald, 4 June 2012

39. Mick Gooda, "Indigenous inclusion is good for our constitution", Sydney Morning Herald, 9 July 2010

40. Susan Ryan, "Removing the grey areas of age discrimination" ABC The Drum, 7 May 2012

41. See, for instance, Catherine Branson, "Take judges out of human rights process", The Australian, 8 May 2009 and John von Doussa, "Bill of rights is essential to best serve human rights", Sydney Morning Herald, 9 October 2008.

42. William Jonas, Statement on ATSIC, 16 April 2004

43. Australian Human Rights Commission, Refining the Australian Public Service Values: Submission to the Australian Public Service Commission, 2 August 2010; Australian Human Rights Commission, Strengthening human rights education in the geography: Recommendations on Shape of the Australian Curriculum: Geography curriculum, 7 July 2011

44. Ronald Wilson, Human Rights Subcommittee of the Joint Standing Committee on Foreign Affairs, Defence and Trade, 20 September 1996

45. Gary Johns, "Who's watching the watchdog?" The Australian, 31 July 1997

46. Australian Human Rights Commission, Submission to the National Human Rights Consultation, June 2009

47. Australia Human Rights Commission, 'Intervener's outline of submissions', Submission in Natalie Clarke v Nationwide News Pty Ltd T/A The Sunday Times, WAD 195/2012, 10 August 2011.

48. Tom Calma and Conrad Gershevitch, Freedom of Religion and Belief in a Multicultural Democracy: an inherent contradiction or an achievable human right?, AHRC Paper, August 2009

49. See, generally, Perez Zagorin, How the Idea of Religious Toleration Came to the West (Princeton, N.J.: Princeton University Press, 2003).

50. Richard J. Wood, "Andrew Bolt law to be supercharged by Gillard government's anti-discrimination changes", 21 November 2012

51. For more, see Richard J. Wood, Submission to Senate Legal and Constitutional Affairs Legislation Committee on Exposure Draft of Human Rights and Anti-Discrimination Bill 2012, December 2012.

52. Gillian Triggs, "Tweaking the draft bill could preserve core reforms", The Australian, 22 January 2013

53. James T. Bennett and Thomas J. DiLorenzo, Destroying Democracy: How Government Funds Partisan Politics (Washington, D.C.: Cato Institute, 1985).

54. Auditor-General New South Wales, Grants Administration, Auditor-General's Report Performance Audit, May 2009

55. Much of this section is drawn from Snowdon, "Sock Puppets: How the Government Lobbies Itself and Why."

56. Richard Smith and Philip Whittington, Charity: The Spectre of over-Regulation and State Dependency (London: Centre for Policy Studies, 2006).

57. Snowdon, "Sock Puppets: How the Government Lobbies Itself and Why."

58. Ibid.

59. New Zealand House of Representatives, Hansard, Volume 612, 8 October 2003, Page 8958

60. David Farrar, "Taxpayer Funded Lobbying", Kiwiblog, 14 March 2012

61. See, for instance, Richard J. Wood, Participatory Democracy: Cracks in the Façade, Backgrounder, July 2005