Constitutional confusion and the movement for Indigenous recognition

Constitutional recognition of Australia's Indigenous people is a conceptual, legal, and political mess.  The release of the cross-party parliamentary report last week demonstrates this beyond a doubt.

It's been nearly a decade since Kevin Rudd's 2020 Summit, from which the modern move towards recognition stems.

Now, in 2015, there are multiple, contradictory proposals on the table.  The purpose of recognition is, if anything, getting less clear.  The whole cause is, almost certainly, looking more hopeless.

It's true that political momentum appears to be building.  But momentum for what?  For what specific change?

The most obvious amendments to the constitution would be the elimination of two clauses that clearly reflect the values of a previous time.

The first is section 25.  This section penalises states if they remove the vote from Indigenous people by reducing those states' population numbers for House of Representatives seats.  The concern is that this section implies the states might do such an abhorrent act.  But the section is basically a dead letter, just sitting there reminding us of the past.  There is near universal agreement that this section should go.

The second is section 51(xxvi).  This allows the Commonwealth to make laws with respect to "The people of any race for whom it is deemed necessary to make special laws".  Now section 51(xxvi) is clearly illiberal, allowing Parliament to treat people differently according to their ethnicity or origins.  The section is colloquially known as the "race power".  There is also near universal agreement that it should go.

But section 51(xxvi) also happens to be the power which the Government has used to get through policies seen as beneficial to Indigenous people.  To get rid of this section might undermine the constitutional foundation of, say, native title.

So the proposal is to replace 51(xxvi) with something that allows Parliament to make laws for the Aboriginal and Torres Strait Island people — perhaps specifying those laws must be for their "advancement".

In other words, the idea is to replace one race power with another race power.

The best one could say about the proposal is that it is cosmetic.  A more honest observer would have to say the race power switch is disingenuous.

Removing discriminatory language from the constitution is one of the most fundamental elements of the recognition project.  But it can't be done without risking things like native title.  If constitutional recognition progresses any further, watch its advocates dance around that basic conceptual problem.

But of course a desire to slightly modify the language of the race power isn't what's driving the Recognise movement.

Hence the other proposals that have been lumped under the Recognise banner.  For instance, a prohibition on racial discrimination by state and federal governments.  The possible contradiction with a new race power would be resolved by a caveat that laws could be imposed to help overcome disadvantage, remedy past discrimination, protect Aboriginal culture so forth.

No future Parliament is going to believe it is imposing laws on Indigenous people against their best interests.  Thus, the upshot of such an amendment would be to handball to the High Court the responsibility not only of deciding if law is simply constitutional, but if it is good.  Tony Abbott calls this a "one clause Bill of rights", to which he is opposed.

There are other options.  All have problems.  Many Indigenous leaders reject a mention of Indigenous people in the preamble as mere symbolism.  Anyway, John Howard's preamble in 1999 — which would have mentioned Indigenous people — failed to get up.  Noel Pearson wants an advisory Indigenous council written into the constitution itself.  Pearson's seems like an ambit claim.

What is the goal of the recognition movement?  Its advocates are clear:  they don't want symbolic change, but constitutional change that would lead to material advancement.  This was the firm conclusion of last week's parliamentary report.

Yet that dismissal of symbolism sits uneasily with the claims that the constitution is our great national document which should reflect the principles of Australian society — an assertion that is, fundamentally, about its symbolic role.

Far too much hope for material well-being has been tied up on this referendum.  It is not obvious that constitutional change is the low-hanging fruit of Indigenous advancement.

The whole debate is being conducted in the shadow of the 1967 referendum, which removed two discriminatory provisions from the Australian constitution.  It was the most successful referendum in Australian history.  But the debate which underpinned that referendum was characterised by overstatement and confusion.

In 1967, the Yes advocates pitched the referendum as offering Indigenous people citizenship, even though the actual proposals on the table did no such thing.  The long confused legacy of 1967 is so great that, in their book on constitutional recognition, Megan Davis and George Williams write that to get a Yes vote in 2015 or 2016, advocates will first have to clarify in the public mind what was agreed to five decades ago.

There is much racial goodwill here.  But racial goodwill does not rewrite constitutions.

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When tax reform turns to tax grab

Not all taxes are created equal, but it is imprudent for governments in Canberra and the rest of the country to escalate the land tax burden.

The Barr government is implementing a textbook model of taxation reform in the Australian Capital Territory, and policymakers around the country are watching reform progress with a keen eye.  Announced in 2012 in response to a territory tax review, key elements of the ACT reform plan involve phasing out conveyance duty and abolishing commercial land tax, and replacing it with new and increased taxes elsewhere.

These include revenue replacement through general rates on both commercial and residential properties, and making general rates and residential land taxes more progressive.

As reports in this paper have indicated in recent weeks, the sweeping package of property tax reform is not without distributional consequences as rising taxes and charges eat into the disposable incomes of home owners.  Over the past four years the average residential rates bill has increased by 42 per cent, or $540, across Canberra, from $1280 to $1820, with residents in suburbs with more strongly rising land values (averaged over three years) facing larger rate increases.

For example, residents in Aranda, Campbell, Red Hill and Yarralumla have already borne average rate bill increases in excess of 60 per cent over the period, which are well in excess of general price inflation.  And spare a thought for homeowners, especially those who have purchased a new residence in recent years, having already paid their conveyancing duty but now incurring rate increases.

Businesses across the territory are also reporting significant increases in general rates on commercial properties, exceeding the staged reductions in duties, and this is exacerbating the tax differential between Canberra and other jurisdictions.

The recent ACT Budget implies even more property tax increases are on the way, with rising commercial and residential real estate values meeting more steeply progressive tax rate structures to yield expected increasing revenues.

According to the Budget papers, the government is banking on revenue from general rates and land tax in the order of $670 million in 2018-19, which is more than double the level of revenue raised from those imposts in 2011-12.  The ACT Treasury is even modelling an increase in conveyancing duty revenue collections over the forward estimates, in spite of the government's program of tax cuts.

To some degree this is because duty threshold and rate reductions tend to encourage even greater market turnover of properties, thus enabling the government to collect revenue windfalls along the way.

Such an outcome has been explicitly engineered by the government, with the extremely long transition toward eventual duty abolition testament to the political inclination to keep raking in revenue from this antiquated and inefficient transaction-based tax.

But the long transition toward abolishing conveyancing duty comes with an added political risk, because government in the future could be tempted to renege on the timing of its previously announced duty cuts.

That such a prospect could unleash greater uncertainty within the Canberra property sector has been raised in recent weeks, courtesy of some loose language about the exact timing of conveyance duty cuts by the Chief Minister during an estimates committee hearing.

But whichever way the property tax reform wind blows, constrictive planning regulations will help ensure artificially inflated values for commercial or residential land developments, underpinning ample revenue collections for the Territory government.

The fervour to increase taxation burdens upon land and property has been informed by orthodox tax policy advice, suggesting more efficient taxes minimise individual and corporate taxpayers altering their economic decisions in response to a tax imposition.

A tax review commissioned by the South Australian government referred to developments in the ACT when providing an efficiency justification for a broad-based property tax.  The SA review stated "replacing conveyance duty with a broad-based property tax will mean that people will no longer pay a large tax amount when they purchase a new property;  instead, all people, including those that have not moved for some time, will be required to pay an annual tax".

Efficiency in tax design is construed to be synonymous with the inescapability of a taxpayer meeting their payment obligation, but this would merely give rise to the "fiscal trap" of gradually increasing liabilities especially if a broad-based land tax is not indexed for asset price inflation.

There is also the threat that imposing higher rates of effective tax on land, and applied to a broad base, will simply reduce the relative attractiveness of investment in land in Canberra, compared with other asset classes.

Alternatively, investors would be encouraged to invest more across the border, in Queanbeyan or greenfield sites such as Tralee, in the face of uncompetitive ACT tax levels in the longer term.

Aside from an unenvied prospect of crippling land tax burdens in the ACT, another problem is that the Territory government is seeking to inappropriately smuggle equity objectives into tax design.  This is reflected in the policy to embed more progressive rate structures within the revamped property tax regime, bearing in mind the concessional schemes and phased implementation of reform.

But as taxation reviews commissioned by other states in the past have reported, there are a wide variety of land ownership methods, in practice, and it is not necessarily so that owners of the most valuable land always have the greater capacity to pay tax.  For example, commercial properties may be owned by trusts and superannuation funds on behalf of small investors and fund members, the latter not necessarily wealthy themselves.

The latest federal tax discussion paper noted levying land tax at progressive rates on total landholdings "introduces a bias against large investments in residential property and discourages institutional investors from investing in private rental housing", with consequently adverse effects for those on lower incomes.

Given landholding is not an accurate reflection of the ability to pay, moving toward a proportional rate tax structure instead would represent a much better outcome on both efficiency and simplicity grounds.

With the ACT leading the charge, other governments around the country are now shaping up to increase taxes.  Western Australia have invoked another round of land tax increases, whilst the federal and Victorian governments announced new, discriminatory taxes on foreign investors in property.

The sober reality is that tax reform in Canberra and elsewhere will turn out to be more like an unmitigated tax grab in coming years, with homeowners and commercial property holders paying a heavy price.

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Magna Carta was a revolt against heavy taxation

It's pleasing that the 800th anniversary of the Magna Carta is getting the publicity it deserves.  The teaching of British history might have all but disappeared from our schools, but on all the evidence the Australian public's interest in the story of the country that gave us parliamentary democracy, the rule of law, and freedom of speech is undiminished.  Australian bookshops stock half-a-dozen new and significant books on King John and the Magna Carta.

It might be that it's precisely because Australians learn so little British and European history now that the subject is so popular.  A similar phenomenon can be seen with the commemoration of Anzac Day.  In the 1970s and 1980s it was close to becoming merely a public holiday, as commentators and historians mocked as war-mongering the remembrance of what happened a century ago.  Yet the public resisted and Anzac Day has a status now that 20 years ago would have been almost inconceivable.  Les Carlyon's 600-page tome Gallipoli has sold more than 160,000 copies.  Anzac Day has become this country's authentic "national day".

Of the many reasons the Magna Carta is significant, three stand out.

First, it established the "rule of law", which basically means that the king — and later what we came to call "the government" — must obey the law.  There was much debate about what was the content of "the law", but nonetheless the recognition of the principle that the king must obey the law, just as his subjects must, was hugely important.

Second, the Magna Carta made it clear that individuals could not be punished at the whim of the king.  If a punishment was to be imposed, it could be done only according to the law.

These two principles didn't guarantee England would never again have a bad king but they did ensure that England didn't suffer from the sort of autocratic despotism that existed for centuries in continental Europe.

DEGREE OF CONSENT

Third, the Magna Carta confirmed that before the king could levy tax, he must have a degree of consent from those who were going to pay the tax.

What's often not appreciated about the Magna Carta is that it was the product of a tax revolt.  King John doubled and tripled the rates of some of the taxes he imposed on England's population.  And nearly as bad as John's extortionate taxes was the fact that the money he raised he wasted on wars in France that he kept losing.  Most of the 63 chapters of the Magna Carta are about tax.  The most famous, chapter 39, which provides that "No free man" will be punished "save by the lawful judgment of his peers and by the law of the land" had its origins in the barons attempting to protect themselves from King John's arbitrary fines and penalties.

In 2011 protesters claimed that the rights enshrined in the Magna Carta prevented them from being evicted from a camp they had established in the yard of London's St Paul's Cathedral.  The protesters were from the so-called Occupy movement.  The protesters lost their court case and they were evicted.  One of the things they were complaining about was the capitalist system — and of course the basis of capitalism is the concept of the private ownership of property.  There is a rich irony in Occupy protesters relying on the Magna Carta to secure their right to complain about the existence of private property, given the reason the Magna Carta exists in the first place is because the barons were attempting to protect their private property from the king's excessive taxes.

As we debate the condition of the human rights derived from what happened at Runnymede in June 1215 we shouldn't forget the Magna Carta was a product of the desire of the barons to protect one of the most basic of human rights — the right to own private property.  The Magna Carta recognises that when private property is threatened by oppressive taxation the right to private property comes close to ceasing to exist.

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The weight of history bears down on Shorten

Bill Shorten is a classic tragic figure of Australian politics.

To be fair, it's not all his fault.  Even if Shorten was a political mastermind, his performance as leader flawless, and the incumbent Government universally despised, one-term governments at the federal level are exceedingly rare.

It is unlikely that the first leader after an election loss will take their party to a victory.  Many opposition leaders don't even last long enough to lose an election.  The Coalition cycled through Brendan Nelson and Malcolm Turnbull before they alighted on Tony Abbott.

So Shorten's first tragic error was to seek the leadership in the first place.

Why do politicians do this, knowing the probabilities are so stacked against them?  Yes, their best case scenario is leading their party to a stunning victory, transforming themselves into a party legend.  But the most likely case is they are rolled or defeated at an election and go down in history as a disappointment, and a historically marginal figure.

You need boundless self-confidence to seek a career in politics.  Often that same self-confidence is the cause of a political downfall.

Now, some observers are starting to think that after the fall of the Baillieu/Napthine and Newman state governments we're entering a new era of one-term rule.

This very well might be the case.  But it's not obvious we can extrapolate political lessons from one level of government to another.  The voter-government relationship is very different at the federal level than it is at the state level.  The issues are different, the media attention is different, and voter awareness is different.

Virtual unknowns can become premiers.  The same is not true for prime ministers.  There's just so much more scrutiny in Canberra.

There's another reason for the unhappy lot of a first-run opposition leader.  Every government ends its life with wounds and regrets and embarrassments.  The ABC is going to air another round of those wounds, regrets and embarrassments at 8.30pm tonight.  By necessity leaders are chosen from the second tier of the former government.  They almost always own the failures of their predecessors.

So the odds are stacked against Shorten before we consider his flaws as a political leader, his complicated political past, or his weak electoral strategy.  And there is much to consider.

If Julia Gillard's fatal flaw was her inability to explain why Kevin Rudd was dumped as leader in 2010, as Annabel Crabb convincingly argued, then it is striking that Shorten has not even begun to explain his role in the events of June 2010 and their sequel in June 2013.  Nor has he apparently felt any need to.

From the get-go this has given Shorten his public impression as a backroom heavy — looking scarcely better than those semi-anonymous backbench Labor senators in The Killing Season with their plots to roll prime ministers.

Shorten was widely acknowledged as the kingmaker of the last Labor government.  Kingmaking is an earthy, political, even dirty profession, but kings are supposed to be divine — they're supposed to be above the betrayals and treachery that got them into power.

Just look at how desperate Gillard has been to separate herself from the plotting that got her into the Lodge.

Then there is Shorten's union problem, which exploded onto the political scene this week.

Whether Shorten did dodgy backroom deals and sought employer side-payments in the interests of his union rather than his union members is still unclear.  But traditionally, a Royal Commission appearance is not a stepping stone to the prime ministership.

And it is illustrative of the same problem that characterises his past as a factional kingmaker:  the political dealings that made him an effective union operator now cast a shadow over his leadership.

Institutionally, Labor is a party of the unions, but only 18 per cent of Australian workers are union members.  A past life as a union boss is unlikely to be any great political asset.

Even so, could Shorten have done better once he gained the leadership?  Could he still?

More than two decades after Fightback! it's a bit pointless to complain about an opposition adopting a small target strategy.  But the Abbott Government has managed to turn that strategy into a serious problem for Shorten.  The problem with a strategy to shadow the government is that the government will shift its strategy to suit.

This is what we're seeing in the national security debate.  The Government is keeping the focus on an issue where the Labor Party is desperate to remain bipartisan.  Abbott is constantly daring Shorten to split away, and exploiting every tiny division between the two parties.

In the face of this onslaught, Shorten looks like a weak political punching bag.  He is unable or unwilling to abandon his strategy, even as it drags his authority — and his leadership — down.

All up, a typical political career, really.

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Increasing coal export to energy-hungry India a worthy cause

As most of Australia shivers through the first weeks of a chilly winter, it is hard to fathom coming home at the end of the day to cook a meal in an open stove powered by plants or dung collected from outside, with no household heating or clean drinking water.

According to the World Health Organisation, more than three billion people still cook and heat their homes with materials such as these and more than four million people per year die from resulting illnesses.

In India alone at least 300 million people have no access to electricity and some 815 million people still rely on wood, dung and crop waste for cooking.

It is for these reasons that we should look critically at the Greens and their fellow travellers, who are attempting to impose their selfish world view on the rest of us through the current divestment campaign and their vendetta against coal mining and coal-fired power stations.

New research released today demonstrates how increasing Australian coal exports from the Galilee Basin by up to 120 million tonnes annually could allow at least 82 million Indian people to access a regular and reliable source of electricity each year.  Coal is the world's cheapest and most reliable source of electricity.  It powered the Industrial Revolution and, together with oil and gas, has allowed billions of people throughout the world to achieve a better quality of life over the past 200 years.

Affordable electricity has powered the increased production and safe storage of food, clean drinking water, the mass manufacture of clothing, the ability to heat and cool our homes, better housing, access to and safe storage of medicine, and a choice of transport options.  About 830 million people around the world gained access to electricity for the first time between 1990 and 2012 because of coal.

As more people in the developing world demand access to cheap and reliable electricity, and with the UN predicting last year that the world's urban population will increase from 3.9 billion people to 6.4 billion people by 2050, coal-fired power stations are not going to disappear any time soon.

India alone is expected to have an extra 404 million city dwellers in 2050, which is equivalent to 11.2 million people per year, or 30,745 people per day.  India has historically been plagued by insufficient electricity capacity, poor infrastructure planning and delivery and significant transmission losses, which has led to limited or zero electricity and regular blackouts.

Just last month a serious heatwave caused more than 2000 deaths, and electricity shortages in some places due to extra load on the power system.

New Indian Prime Minister Narendra Modi set out a vision last year to connect all Indian villages to the electricity grid and the International Energy Agency has predicted that India will add another 342 gigawatts of coal-fired generation capacity before 2040.

It is clearly just as important to people in India and the developing world as it is to people in Australia that their electricity system is reliable and affordable.  Yet while the Indian government is pursuing policies to provide a higher standard of living for its people, Australian coal activists want to deny them that choice.

The morality of seeking to deny people in other countries the privileges that we enjoy here, when we have to ability to help out, is deeply suspect.

While solar and wind power may very well have a place in future world energy supply, not even the most earnest activist can change the laws of physics and force solar power to work at night or in cloudy weather, wind power to work in calm conditions, or hydro-electric power to work in times of drought or in areas without large rivers or mountains.

Increasing the supply of Australian coal to India would permanently improve the lives of millions of people — a goal worthy of strong public and policymaker support.

Unelected officials are stifling our democratic freedoms

Finally there's a serious conversation happening about the Australian Parliament's scorn for democratic accountability and the rule of law.

It was always going to be a bit controversial to propose absolute ministerial discretion to strip citizenship from dual nationals on the 800th anniversary of Magna Carta, that great symbol against arbitrary power.

But we've had a rule of law problem for a very long time in Australia.  Long before the Islamic State.  Long before al-Qaeda.  And that problem has gone largely unnoticed — whether due to a lack of awareness or a lack of interest — by those groups now furious about the Abbott government's national security policies.

Let's start with the most basic rule of law principle:  that we all deserve legal protections when accused of an offence, whether that offence is terrorism or traffic violation.

Last year I conducted an audit of all Commonwealth legislation and found 262 provisions of federal law that violated fundamental legal rights.  These either removed the right to silence, removed the privilege against self-incrimination, reversed the burden of proof, or did away with "natural justice" — the suite of rights like the right to a trial, to appeal judgments or to know what we are charged with.

These violations aren't just found in the sorts of laws that the human rights community was talking about this week — anti-terror and immigration laws.  They're found in economic laws like the Australian Competition and Consumer Act 2010 (that regulates mergers and consumer protection) or the Navigation Act 2012 (which regulates shipping) or the Broadcasting Services Act 1992 (which regulates broadcast media).  The Fair Work Act violates all four legal rights.

In other words, they're targeted at people in business, not just people in terrorist organisations.  The Tax Administration Act has nearly as many violations of the right to natural justice as the Migration Act does.

Shortly after the 2013 election, the new attorney-general George Brandis directed the Australian Law Reform Commission to look at laws which limit traditional rights and liberties with a particular focus on workplace, commercial and environmental law.

You'd have thought such an investigation would have been well covered already by the Australian Human Rights Commission.  But the commission, along with Australia's human rights community more generally, have utterly neglected limits on personal freedom when they are bundled up with limits on our freedom to trade, truck and barter.

In a recent speech, the commission's head Gillian Triggs pointed to all the post-September 11 laws which limit rights in the name of anti-terrorism.  What about those which limit rights in the name of market failure?

It's only economists and the occasional corporate lawyer that have been talking about, for instance, the draconian powers of the Australian Securities and Investments Commission.

Of course, rule of law is about more than personal legal protections.  It describes the principle that administrative decisions should be made by elected officials and according to due process.

Parliament should write the laws and control the purse strings.  Many of these principles can be traced back to Magna Carta.  These principles have come under sustained assault in recent decades.

The prospect of ministerial discretion to strip citizenship without judicial review is just a tiny window into a much deeper problem.

For instance, Australian governments have vested more and more decision-making power outside Parliament and into "independent" bureaucratic agencies.  These undemocratic, unelected officials have enough discretionary power to effectively make government policy.

Just last month the Tax Commissioner was granted the power to change tax law if he felt doing so would be in the interest of taxpayers.  But it is Parliament's job to make and amend the law of the land, not the bureaucracy's.  Other regulatory agencies have similar powers.

In many ways Australia is not a liberal democratic state, but a democratic-administrative state, where power is shared between elected representatives and a permanent network of independent bureaucracies who are only loosely answerable to Parliament, let alone voters.  Some of the basic institutions of our government are undemocratic.

Gillian Triggs was right to say our democratic freedoms are under threat.  Still, did she see any irony in the fact that the democratically elected Abbott government obviously wants to fire her but — since she commands an independent statutory agency — it cannot?

In 2012 Parliament passed a bill giving the government blanket authorisation to spend money on basically anything it wanted without having to ask Parliament's permission first.  The bill was rushed through with bipartisan support following the school chaplains case in the High Court.  It was barely noticed by the press.  Yet it was one of the most complete surrenders of parliamentary responsibility in the last half century.

There are serious problems with the Abbott government's citizenship-stripping proposal.  Coalition members might be happy with Peter Dutton holding such power.  But all governments are temporary.  Will they be just as happy when the next Labor immigration minister is able to wield the same powers?

This is the thing about the rule of law.  Just as it protects good people and bad ones, it constrains good governments and bad governments alike.  To abandon the rule of law is not just to abandon those protections, but to erode democracy itself.

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The TPP isn't the bogey-treaty that we think it is

The debate about the Trans-Pacific Partnership (TPP) has gotten far, far ahead of itself.

On Friday morning, the US House of Representatives voted down the Trade Promotion Authority (TPA), a legislative agreement between Congress and the president that would effectively delegate trade negotiation authority to the latter.

The idea was to help "fast track" the TPP negotiation.  The president's authority could quickly be yanked back if Congress decided he was exceeding his mandate.  Either way, the whole agreement or each individual parts would have to be voted on by Congress after the diplomacy was over.

In trade policy, acronyms build up very quickly.  The TPA isn't the TPP.  But everyone knows without the TPA an American president is unlikely to get any final TPP through Congress.  So it's been used by American opponents as a proxy for the broader agreement.

The US union movement thinks "fast track trade deals" lead to "fewer jobs, lower wages, and declining middle class".  In Australia, GetUp! describes the TPP as "the dirtiest deal you've never heard of".

This sort of hyperbole is likely to derail the TPP (if it hasn't already been derailed by the US Congress) with very real and damaging consequences for the global economy and anti-poverty efforts in the developing world.

Because the potential benefits from a regional free trade deal are enormous.  Analysis by the US-based Peterson Institute for International Economics finds that there are potential economic gains from the TPP in the order of US$1.9 trillion.  A further analysis argues that by far the biggest winner out of the TPP would be Vietnam — that is, a poor, developing economy.

Now, there's a standard caveat when we talk about bilateral or multilateral trade agreements.  The benefits of free trade accrue to countries that liberalise their own trade barriers.  This means unilateral liberalisation is best.  But as I argued in The Drum last November, there are strong political reasons to welcome multi-country agreements, insofar as they create the political conditions often necessary for domestic reform.

There's another caveat specific to the TPP.  Right now, the TPP is highly secretive.  A lot of the detail that we know about the TPP we know through WikiLeaks.  Legislators who want to take a look at the negotiating text have to sign a rather absurd confidentiality agreement.

This secrecy is excessive and is damaging the free trade cause.

But trade negotiations are usually held privately between the upper levels of foreign governments.  Diplomacy is about compromise, and the process of compromise is easier when kept off newspaper front pages.

The TPP negotiations are not much more secret than any other legislative agenda prepared by a bureaucratic department "secretly" before being introduced into the legislature.

The second stickler with the TPP is intellectual property.  I find it hard to get agitated about what might possibly be in the final version of the TPP regarding intellectual property, given what the Australian Government is proposing to do in the copyright space right now.

With or without a TPP, advocates of increased patent terms or copyright penalties need to demonstrate these measures would inspire new innovations or creative works.

Still, it would be lot better — and the negotiation process a lot smoother — if intellectual property was not in the TPP.  Copyright harmonisation is not going to boost economic growth.  Copyright harmonisation is not going to do anything for poor people in Vietnam.

The devil of these multilateral trade agreements is that they rest on dozens of quid pro quos.

So the questions we may have to face if the TPP is finally concluded are not easy ones to answer.  For instance, would we accept longer copyright terms in Australia if it meant other countries lower tariffs, which, in turn, would boost the incomes of poor Vietnamese clothing manufacturers?  Maybe.  Maybe not.

Figuring out whether the trade-offs in a huge deal like the TPP are worth it is only possible once the negotiations are finished and the document as a whole is up for public scrutiny.

If the US Congress has already killed the TPP by voting down the TPA, that chance may never come.  The TPP will remain a secret bogey-treaty, on which special interests can project their deepest, wildest fears.

But if agreement can be found, there's a lesson there too.  The Australian public should not accept the argument made after the Australia-United States free trade agreement was signed a decade ago — that the enabling domestic legislation had to be passed because its terms had already been agreed to at the international level.

Because, ultimately, it is Parliament that decides what is in the best interest of the people of Australia, not our trade negotiators.

Shaping up for the sharing economy

Australia's economy is at a turning point, and the Abbott government is looking for an economic reform agenda.  If it wants to truly set the economy up for the next few decades it will look seriously at how the so-called "sharing economy" is going to change the way we live, work, consume — and the laws that govern us.

Now, for many people the idea of a "sharing economy" sounds insufferably communal (shared accommodation, ride-sharing), while others valorise it as righteously communitarian (shared common resources, job sharing, free-cycling, collaborative consumption, open-source-this and wiki-that).  Other parts look a touch scofflaw.

And it is true that taken individually, each element of the sharing economy can seem not much more than an app on a smartphone.  So it's not obvious that a great surge of economic growth and a vast wave of liberalising microeconomic reform reside amongst that lot.

The sharing economy is really the platform economy.  A platform is a firm that provides an internet-based marketplace to bring together distributed networks of individuals to exchange, purchase, swap, or indeed share under-utilised assets.  A platform enables a peer-to-peer (P2P) household economy to emerge on top of a market economy.

The source of this next economic revolution consists in releasing the economic potential locked-up in underutilised household assets (cars, tools, bikes, rooms, surplus time or food).

For instance, Uber is not a taxi service:  it is an information platform about who has a car not being used and some time to drive it.

Airbnb is not a hotel company:  it is an information platform to match people with surplus rooms, or temporarily empty apartments with people looking for same.  Freelancer is not an HR company:  it is an information platform to match those with underutilised time and skills with those seeking tasks done.

Pozible is not a finance company;  99designs is not a design company;  Etsy is not a craft shop;  Couchsurfing is not a travel company;  Tinder is not a brothel.

They are all platforms that are in the business of furnishing information to enable people who don't necessarily know each other to coordinate their distributed actions to make better use of all their physical and personal assets.

Like the market economy, the platform economy is about extending the range of human cooperation to a much larger circle of trust.  And while the technical infrastructure of the sharing economy is the internet and smartphones, the real breakthrough has come from clever use of reputational mechanisms such as private ratings, connection to social media identification, and inbuilt escrow and payment services.

The sharing economy is growing very rapidly, from almost nothing a decade ago to around $US15 billion today, with expected growth to over $300 billion within another decade, according to a recent report by PwC, an accounting firm.

There are many good economic reasons to welcome this arrival.  Recent work by Adam Thierer and others at the Mercatus Centre at George Mason University in the US has elaborated the ways the sharing economy creates value for both consumers and producers.

By connecting multiple buyers and sellers, markets themselves become more efficient, engendering greater specialisation.  And by lowering the costs of search, negotiation, and monitoring performance, they expand the range of choice and the scope of trade.

Furthermore, as information platforms, the reputations of buyers and sellers become public and can move from one platform to another, making the consequences of bad behaviour all the more costly, and rewarding good behaviour.  Interestingly, this means there is a lot less role for public regulation in these markets.

The sharing economy is also a fresh boost to entrepreneurship.  By offering an end run around regulators who are captured by existing producers with entrenched business models that don't necessarily map to what customers actually want, it allows suppliers to create value for customers long underserved by those incumbents that hide poor or expensive service behind regulatory protections.

But there has been a great deal of pushback from those who already compete in these markets, selling taxi services, hotel rooms, and so forth.  The solution is not to regulate the sharing economy, but to deregulate old markets and allow them to compete.

The US Federal Trade Commission earlier last week held a workshop in Washington DC on "The Sharing Economy" to discuss the issues facing platforms, participants, and regulators that underscored the scale of the economic benefits that can potentially be realised through effective regulatory reform.

The Abbott government's economists, along with the ACCC, should ask themselves the same:  how can we benefit from this coming revolution?

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Why Australia's economic growth matters for all Australians

For governments to meet their ambitious budget deficit-reduction forecasts, they must embrace a more ambitious agenda for growth.

In an event almost as rare as a full lunar eclipse, the recent national accounts figures released by the Australian Bureau of Statistics have sparked a debate, and a welcome one at that, about the appropriateness of national economic growth rates.  The ABS data showed real gross domestic product in seasonally adjusted terms rose by 0.9 per cent during the March quarter of this year, and by 0.6 per cent in trend terms.

The key contributor to this outcome was our export performance, with the seasonally adjusted value of goods and services exports rising 5 per cent during the quarter, representing the best quarterly export growth in about 16 years.

It is certainly true that the overall GDP quarterly result surprised many economic analysts and business commentators, with some pre-emptively suggesting in media circles that a recession is on the cards.

The stronger than expected economic performance led Treasurer Joe Hockey to refer to the latest statistics as a "terrific set of numbers", derisively referring to the doomsayers as "clowns" who have "been proven to be looking foolish".

It might be difficult for the general public to become too animated about economic growth trends, and movements in quarterly figures are subject to high variability in any case, but thinking and talking about growth is much more than a wonkish debate between economists and politicians.

Indeed, every Australian regardless of their background, occupation, or political affiliation, has a deep stake in economic growth and we should all desire stronger growth rates in our economy, especially in the areas of private investment and international trade.

We all should desire stronger growth because that translates into better living standards over time, meaning more abundant food, clothing, shelter, transportation, entertainment, and other goods and services helping to improve our quality of life.

We should desire stronger growth because we care about the poor and their desire for enrichment, and this necessitates a growing economy with more ample and cheaper supplies to live comfortably as well as better opportunities to access meaningful, highly-paying work.

Stronger growth means we don't fray the fabric of our democratic political system and robust civil society by getting caught up in zero-sum distributional fights with each other, since there would be more income and wealth to share around for all those who want them.

We also want stronger growth because we want a greater abundance of resources to help protect the environment, including the economic means to generate more scientific knowledge and innovation addressing the great ecological problems of our time.

Although fiscal and regulatory interventions by the public sector invariably do more harm to growth than good, even governments want stronger growth, not least because their electoral credibility depends on their meeting budget targets reliant upon a faster rate of GDP growth.

Eyebrows were certainly raised last month when the federal government outlined a fast track for deficit reduction by assuming not a can opener, as economists are wont to do when they want a feel-good message, but stronger real growth from 2.5 per cent last financial year up to 3.25 per cent during 2016-17.

For its part the ACT government is also forecasting the Territory budget deficit will decline, and in fact even return to surplus by the end of the forward estimates, on the back of an "achieve budget repair by assuming growth" trick.

Politicians might look upon those who prognosticate about economic doom and gloom with contempt and disdain, but the fact is that the Australian economy, as reflected in our underwhelming economic growth rate, has been underperforming for far too long.

Over the past 50 years, real GDP in Australia has grown at a rate of about 3.5 per cent a year, and so this provides something of a threshold rate of growth which should ideally be attained if Australians are to enjoy prosperous circumstances on a sustained basis.

Using the well-known "rule of 70" in economics, which indicates how long it would take for an economy to double its size, if we were to sustain a 3.5 per cent real growth rate into the future it would take about 20 years for the Australian economy to double in size.

Right now the annual GDP growth rate is about 2.3 per cent, and this implies it would take the Australian economy roughly 30 years to double in size, in other words adding another whole decade for that compounded outcome to be achieved.

Growth rates in an economy will be affected by a wide range of factors, including external developments such as the shifting patterns of production and consumption in our export markets, many of which cannot be influenced by governments.

But if there are domestic policies inhibiting GDP growth it is not reasonable to maintain them, especially on account of sectional political interests, if it means Australians are deprived of even better living standards for longer.

Other statistics released by the ABS showing flagging labour productivity growth, and a national income crunch as commodity prices recede, giving further credence to the notion that Australia is vastly underperforming its economic potential.

So, what the economic statistics illustrate quite clearly is that we need to "go for growth", and we cannot rely exclusively upon China and the rest of the world for growth to be bolstered.

The economic freedom empirical literature compellingly illustrates that policies oriented toward relaxing constraints upon market activities, such as a lighter tax load, and labour and product market deregulatory measures, are a sound way to bring about a return to growth.

A return to growth will also be shaped by what policymakers do not do.

There are certainly numerous Australian policy pundits calling for redistribution policies to suppress inequalities, but these ideas should be looked upon most sceptically.

This is because various proposals to redistribute income, such as steeply progressive taxes, will harm growth by sapping economic incentives to better serve customers, here and abroad, and not to mention inhibiting upward mobility by the poor.

But with the lingering effects of the global financial crisis still with us almost a decade on, remaining in our reform slumber simply cannot be a viable option for economic improvement.

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Death by a thousand cuts for our liberties

Next Monday, June 15, marks the 800th anniversary of King John's signing of the Magna Carta in 1215.  As we near this milestone it is a good time to reflect on one of the ideas this foundational document engendered — the rule of law.

It's often a concept taken for granted in liberal democracies.  But an honest appraisal of the contemporary political and legal landscape in Australia demonstrates that we have strayed far from the principles that have evolved over the course of 800 years of English common law.

Just last week, the Australian Securities & Investments Commission chief told a Senate committee he wanted to ­investigate and prosecute companies for having "poor corporate culture".

Such a proposal is a parliamentary counsel's nightmare.  Drafting a law that captures the complexity of workplace ­culture and turns it into a clear legal obligation is an impossible task.

The more likely outcome is a series of ambiguous words with vague definitions that give rise to discretionary power over ­company directors and senior managers.  And wherever there is discretion in the law it becomes impossible to understand one's legal obligations.

Anyone should be able to go to the statute books, or read through legal decisions, and understand what is required of them under the law.

Arbitrary power is the enemy of the rule of law.  But successive governments are falling over themselves to inject more uncertainty into our legal system, and to do away with bedrock principles of liberal democracy.

One of the most important reforms that came from the signing of the Magna Carta was the creation of the "common counsel", which decided whether taxes could be imposed.  It would later lead to the principle that parliament has the power of the purse.

The former Gillard government turned this idea on its head when it shepherded through the parliament the Financial Framework Legislation Amendment Bill (No 3) 2012.  This law handed to the executive the power to make grants in more than 400 areas of public policy.  At the time it was ­described by University of Sydney law ­professor Anne Twomey as an "act of hara kiri".

In December last year, I released a report into the state of fundamental legal rights in Australia.  That report revealed that 262 provisions in current commonwealth acts of parliament breached one of four legal rights:  the presumption of innocence, the right to silence, the privilege against self-incrimination or the principles of natural justice.

This disregard for the rule of law is not an exclusive problem of the commonwealth.  Recent decisions of various state governments have also sounded the alarm on the state of the rule of law in ­Australia.

In April this year, the High Court ruled that the NSW Independent Commission Against Corruption had acted outside its powers in the investigation of a case that properly fell outside its jurisdiction.

The response of the NSW government has been to enact a law that retrospectively grants ICAC more power to effectively annul the decision of the judiciary.

Time will tell whether such a clear breach of the rule of law will hold up against legal challenge.

The Victorian government also considered passing special legislation to avoid paying compensation due to the East West Link consortia.

Meanwhile, the Western Australian government has passed a piece of legislation that ends litigation still before the courts, strips the right to appeal, and ­ensures a financial windfall to the government.

It is clear that our liberties won't disappear overnight.  But recent decisions of government at the state and federal level show that it's a death by a thousand cuts we need to be vigilant about avoiding.  This protracted and constant erosion of our rights must end.

And with the celebration of the 800th anniversary of one of the greatest symbols of freedom from oppression, what better time to start than right now.

Time to take a stand at AAMI Park

The introduction of safe-standing at Melbourne's AAMI Park is a convenient, cheap and safe way to expand the ground's capacity that would enable the stadium to achieve its full potential by accommodating the individual choices of fans.

No one who was at last month's A-League grand final will ever forget it.

It is not an exaggeration to say that while the standard of football in Australia's national league places it firmly in the second tier of competitions globally, the atmosphere generated at the grand final would rival anywhere in the world.

The only negative was that only 29,843 fans were able to attend.  The ground's intimacy provides an incomparable atmosphere, but a limited capacity.  As a result, a grand final may never be staged at AAMI again — a fear expressed repeatedly on Melbourne Victory's internet fan forums since the match.

Safe standing offers a solution to this problem.  Developed in Germany, safe standing consists of new technology involving additional railings and monitoring systems that enables football supporters to stand while watching the game, without the safety risks of the open, crumbling football terraces of yesteryear.

It is a classic example of a simple technological innovation enabling us to undertake activities previously thought unsafe.  Indeed, moves to install safe standing are already underway at Western Sydney's Pirtek Stadium.

A safe standing area almost doubles the capacity of a previously seated area.  If the sections behind each goal at AAMI Park were converted to safe standing an extra 10,000 could conceivably be added to the venue's 30,050 capacity.

This is primarily a matter of individual fan choice.  The fact is, many fans prefer standing.  Melbourne Victory has reached the bizarre situation where the memberships they sell to these parts of the ground have instructions printed on the tickets informing fans they are standing only areas, despite seats being present.

Thousands of fans standing in areas designed for seating is also a minor safety hazard.  The row of seats in front of fans standing act as a dicey 30cm high trip wire, particularly during goal celebrations at the more raucous end of the spectrum.  If these were converted to areas purpose-built for standing they would clearly be safer.

By recognising the individual choice of many fans to stand, AAMI Park would also be assisting those fans who wish to sit.  Currently, many of this group are forced to stand as patrons in front of them stand up and block their view if they remain seated.  This wouldn't be a problem if there were designated standing areas.

Safe standing is also the cheapest way to expand the capacity of AAMI Park.  Australia spends an immoral amount of taxpayer money building and expanding sporting stadia.  Converting seating areas to safe-standing comes at a fraction of the cost of fully-fledged redevelopment.

Indeed, safe standing is really the only option to increase the capacity of AAMI Park.  Unfortunately, the uniquely designed roof of the stadium means that it is cheaper to demolish the whole stadium and start again rather than expand on what is already there.  Victorian taxpayers will at some stage in the coming decades be faced with an exorbitant bill as the popularity of football and rugby grows steadily, unless something like safe standing is introduced.

And safe standing areas can be built to incorporate rail seats, meaning they can be turned back into seating areas at the turn of a key for events where fans prefer to sit.

A debate is currently underway in the UK about the merits of safe standing.  Standing at top-flight football in England has been banned since the Hillsborough Disaster in 1989, where 96 Liverpool fans were crushed to death on an overcrowded terrace.  Opponents of safe standing believe it could cause another tragedy in the future.

This is an emotional argument.  Safe standing in no way resembles the 10-foot high fencing, tinder-box wooden stands, crumbling walls, death-trap staircases, not to mention wild west policing and hooliganism, that caused so many deaths at British and European football matches in the past.

And, like in Australia, many British football fans simply stand in front of their seats anyway.

There is no reason why safe standing couldn't be utilised in other grounds in the A-League which are fan favourites but possibly too small to hold the very largest of games.  Adelaide's Coopers Stadium and Sydney's Allianz Stadium come to mind.

The A-League doesn't have to choose between small, atmospheric venues and deathly silent multi-purpose stadiums that are inappropriate for football, such as Etihad Stadium.  They can have their cake and eat it too by honouring fan choice and technological innovation.

AAMI Park is the perfect venue to introduce safe standing so that the extraordinary atmosphere of last month's grand final isn't a once-off.

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Why is the Magna Carta glossed over in our schools?

Oliver Cromwell was, apparently, not a fan of Magna Carta.  In 1654, London merchant George Cony was imprisoned for refusing to pay customs duties imposed by Cromwell.  When Cony's lawyer argued that the duties breached Magna Carta, Cromwell supposedly said either that "they must put on a helmet and troop for it" or "magna farta should not control his actions".

There may be a fair few people around now who would agree with the Lord Protector, at least in the sense that they would think Magna Carta is a bit overrated.  Magna Carta is, from time to time, derided as a "myth" and "historical nonsense".  And in history classes in our schools and universities, Magna Carta seldom gets a look-in these days.

It is very rare indeed to find a subject in an Australian university that includes substantial content on Magna Carta.  British history in general is scarce enough, and subjects on the history of medieval England are practically non-existent.  Medieval history subjects tend to focus instead on European-wide socio-cultural issues — gender roles, cultural transmission, perceptions of life and death, and other things that apparently take priority over the history of our own society.

The same is true in our schools.  It would be wrong to claim that Magna Carta does not get a mention in Australia's national history curriculum for primary and secondary schools.  There are, in fact, two brief mentions slotted into optional "content elaborations" in the Year 6 curriculum — in "History" and in "Civics and Citizenship".  Yet neither is anything more than a passing mention.

The curriculum is silent on Magna Carta in Year 8, which tackles medieval history and where it would be most appropriate.  And though the curriculum outlines optional units on topics as wide-ranging as "the Khmer Empire", "Polynesian expansion across the Pacific", and "the Environment Movement", it skips over the seventeenth century altogether — the century in which Magna Carta was revived as a defence against arbitrary rule and England became a constitutional monarchy.

While textbooks written for the national curriculum usually do include a page (or half) on Magna Carta, many of their accounts are extremely summary, contain significant errors, and fail to explain why Magna Carta is important and what it means.

The problem is not merely that Magna Carta itself is omitted.  Magna Carta was effectively a list of concessions forced on an unpopular medieval king by a group of self-interested feudal barons.  It is ultimately a thirteenth century document, and it addresses thirteenth century feudal concerns.

But the legacy of Magna Carta is profound.  In the first place, it firmly established the tradition that taxes must be raised only with the "counsel" of the taxpayers.  In order to tax his barons, therefore, the king had to consult with them first.  In a matter of decades, this principle fuelled the rise of Parliament as a body with discretion over taxes, independent from the monarch.  Many centuries later, the same principle made possible the rise of liberal democracy.

Magna Carta also inspired concepts such as the "due process of law" — the idea that everyone is to be trialled according to a just legal process — and habeas corpus — the idea that there must be a lawful reason to detain someone.  To seventeenth century legal theorists like Edward Coke, Magna Carta was an embodiment of the "ancient constitution" — a political tradition in which the sovereignty of the law and Parliament were paramount.

To fail to teach the Magna Carta is, in a very real way, to fail to teach the history of liberal democracy itself.

Why, then, is there this relative silence over Magna Carta in our history courses, both at school and university level?  It probably has nothing to do with the ambiguous motives of the barons.  More likely, it is the result of a broader rejection of Australia's political heritage and the origins of our society.

About this, we should be very concerned.

Submission to Treasury consultation into exposure draft of Tax Laws Amendment

The Tax Laws Amendment (Tax Integrity Multinational Anti-avoidance Law) Bill 2015 exposure draft represents an important and concerning watershed in the practice of Australian corporate tax governance.

The draft bill would base the assessment of Australian tax liabilities on an assessment of tax rules in other countries.  It undermines global tax agreements to which Australia is a part that have developed to prevent double taxation, risking the phenomenon that those agreements were designed to avoid.  It offers a disincentive for the world's biggest firms from establishing operations in Australia.  It mischaracterises readily understandable business decisions as tax avoidance and penalises firms for normal corporate structural practices.

The scope of this legislation amounts to a substantial, yet entirely unpredictable, increase in corporate tax, and an attendant increase in the regulatory burden faced by large firms operating in Australia.  I dispute the claim that this is a "tax integrity" measure.  It is very much a tax increase.

Put basic literacy before compulsory science

New Zealand is these days the place Australians should go to get lessons on policy making.  Next year it will have a budget surplus, its top rate of personal income tax is 33 per cent, and it doesn't have capital gains tax.

Before any Australian politician decides to make science and mathematics education compulsory they should read a report released last week from that country's pre-eminent policy think tank, the New Zealand Initiative.  UN(AC)COUNTABLE:  Why Millions On Maths Returned Little, examines the failures of maths teaching in New Zealand.  Whereas once children were taught "instrumental" skills like times tables that were memorised and which gave them tools to solve maths problems, they are now educated in "relational" maths that emphasises the use of analysis and language.  The result is that while children might be using their imagination to solve problems, they're not learning maths.

Almost half of New Zealand's year 5 students cannot add 218 and 191.  And the problem flows up the system.  Thirty eight per cent of qualified primary school teachers could not give the correct answer to 7/18 plus 1/9.  The results for Australia wouldn't be very different, and in fact New Zealand's maths curriculum is copied from New South Wales.

Julia Gillard set the goal of Australia being ranked a top-five country in reading, mathematics and science by 2025.  The Leader of the Opposition Bill Shorten wants all Australian students to be taught computer coding as a core skill.  And federal Education Minister Christopher Pyne wants maths and science to be compulsory in year 12.  These aims are all laudable, but they're all based on largely unquestioned assumptions about the value of so-called "STEM" subjects — science, technology, engineering and mathematics.

READING AND WRITING

Having more students proficient in maths would be a good thing, but reading and writing must come first.  Australian students in year 4 are significantly outperformed in reading by students in 21 other countries.  And as the New Zealand initiative report demonstrates teaching more maths using the current methods is unlikely to lead to any significant improvement in outcomes.  Furthermore, it's unlikely that the current cohort of teachers have the required aptitude in maths and science.  Only around half of year 4 students in Australia are taught science by teachers who feel "well-prepared" to teach the subject — meaning half are not "well-prepared".

Even if we could find enough teachers to teach maths and science, making those subjects compulsory could do more harm than good.  It will do nothing to engender in students a love, passion or interest for these subjects.  According to two leading educational psychologists, Edward Deci and Richard Ryan when students are motivated to do something rather than forced to do it they'll get better results.  In their book Intrinsic Motivation and Self-Determination of Human Behaviour they explain that in the absence of motivation student achievement declines and teachers are faced managing disruptive classes full of disengaged students.

Last Friday, Victorians celebrated the state funeral of the state's first and only female premier, Joan Kirner.  She was a good person and a fine Victorian but unfortunately some of the decisions she made were not necessarily in the best long-term interests of the state.  As education minister, Kirner led the charge to shut down Victoria's renowned system of technical schools.  The merging of technical schools with academic high schools into comprehensive "colleges" was a disastrous mistake.  The "one size fits all" model of the original college curriculum was guaranteed to turn students away from maths and science.  For some students the subjects were too hard and for some too easy.  It's ironic that a central plank of the Victorian Labor Party's education policy at the 2014 state election was the re-establishment of technical schools.

The reality is that only a very small percentage of students are actually able to study higher levels of maths and science successfully.  Not every job in the future will require a tertiary qualification in STEM.  More students studying maths and science is no more the answer to Australia's economic challenges than is more students studying an Asian language.  And not every job in the future will require maths and science.  It's debatable whether early childhood workers and aged-care workers will really need to have studied year 12 physics and chemistry.

Magna Carta: archaic tax document and icon of liberty

The Magna Carta turns 800 years old next week.

The document has become an icon of liberty, variously credited with establishing everything from parliament to the rule of law.  It is such a fixture of popular political thought that it is still rhetorically powerful eight centuries later.  The Abbott Government's proposed citizenship law changes have been widely condemned as a violation of its principles.

This is strange for something so archaic.  The Magna Carta consists of about 3000 words of 13th century legalese about inheritance, feudal payments, land tenure and customary rights, in Latin, reflecting the economic and political concerns of a world distant from our own.

There's one simple reason that the Magna Carta became the document of individual rights and a check against power that it is today.

If you want to understand the Magna Carta, you need to understand that it is about tax.

Most commentary on the document is written by lawyers looking for the origins of the English common law and rights like habeas corpus.  This means delving through the complexities of medieval land law and legal systems.

Yet the vast majority of the provisions of the Magna Carta are specifically designed to limit how much tax the king can take from his subjects.  As the historian David Carpenter writes, the document was "above all about money."

If our liberties can be traced back to the Magna Carta, then it is in resistance to tax that they were forged.

By 1215, King John had spent 10 years soaking England for as much revenue as he could in order to reclaim his family's European possessions.

John's royal family had presided over an empire that stretched from Ireland to the French-Spanish border.  But John had lost much of the continental empire shortly after taking the throne in 1199.  John needed money to build an army to recapture his patrimony.

He levied feudal dues far beyond what Englanders were used to, ramped up customary legal charges, sold privileges and otherwise grabbed opportunistically at the wealth of the kingdom.  Some historians have described John's fiscal approach as "asset stripping" England.

John eventually invaded Europe in 1214.  But he lost.  This defeat sparked a civil war in England.  The barons, a tiny, extremely rich sliver of the population, were sick of paying for John's futile foreign adventurism.

The Magna Carta was supposed to be a peace treaty between the king and the barons.  Hence, the shopping list of provisions that constrained the king's revenue collection.

But it is one thing to write rules about what government may lawfully do;  it is quite another to enforce them.

The Magna Carta did not invent parliament.  Parliament-like bodies appeared in England several centuries earlier.  But the Magna Carta gave parliament its purpose — and its leverage over the monarchy.  One provision stated that feudal charges could only be imposed "except by the common counsel of our realm".  This rapidly became a political norm whereby the parliament had to approve any requests for new tax.

For centuries the English parliament used the threat — sometimes implicit, sometimes explicit — of withholding funds to carve out more power against the monarch.

Over time this evolved into a basic assertion of political equality.  The cry of "no taxation without representation" was used by the American revolutionaries and the 20th century suffragettes alike.

Now, the tax revolt that led to the Magna Carta was a revolt of elites, not the general population.  And in many ways what the barons won in 1215 enhanced their position in comparison to everybody else.

Obviously, the mere existence of parliament is no guarantee of liberty.  A rebellion in 1381, the Peasant's Revolt, was sparked by parliament's predatory introduction of a poll tax.  The elites that controlled parliament were happy to impose repressive taxes on those below them.

There was no Magna Carta after the Peasant's Revolt.  The rebels were massacred.  Yet it wasn't until 1989 that an English government attempted to introduce a poll tax again, and that time it led directly to Margaret Thatcher's downfall.

There's a tradition of history, derided as "Whig history", in which the past is studied firmly with an eye on the present.  In this tradition, the practice of history consists primarily of identifying the origins of contemporary practices and institutions, skipping over what makes the past alien and different — the historical dead ends and forgotten beliefs.

The Magna Carta holds a preeminent place in Whig histories as the source of English freedom.  And not wrongly, either.  Because those obscure Latin clauses became, in the hands of propagandists and revolutionaries decades and centuries after June 1215, a document symbolising general limits on royal power.

Anachronistic misunderstandings of the Magna Carta were themselves a force for liberal progress.

So to celebrate the Magna Carta is to celebrate 800 years of its history, not the specific rules it imposed about, for instance, the receipts of an estate's earnings while it was held in wardship.

It is to celebrate how this strange, failed peace treaty established a permanent relationship between tax resistance and political freedom in the English-speaking world.

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ASIC's sad plans to investigate companies for ''bad culture''

At a time when Australia is in desperate need of investment, Australia's corporate regulator is demonstrating contempt for the rule of law.

On Wednesday, Greg Medcraft, chairman of the Australian Securities and Investments Commission, told a Senate Estimates Committee that ASIC is considering prosecuting companies for poor corporate culture.

This is the latest example of fuzzy law that gives enormous power to regulators and leaves individuals in a position where they don't know whether they are legally compliant.

Paragraph 12.3(2)(d) of the Commonwealth Criminal Code allows a judge to consider whether corporate culture contributed to the "authorisation or permission" of the commission of a criminal act.

This provision violates a basic tenet of the rule of law and ought to be repealed.  No definition of bad corporate culture can effectively capture the concept because it's a subjective idea.  The vagueness in the law allows ASIC to wield considerable power over Australian corporations.  And the appointment of the executive director of the St James Ethics Centre will do nothing to allay fears about ASIC embracing an incoherent approach to corporate governance.

Ambiguity is anathema to black-letter law.  Shunning clear legal obligations for aspirational cultural objectives is not the hallmark of a system based on the rule of law.

Prosecutions for "bad" corporate culture also raise concerning liability issues.

One of the stranger analogies heard in Senate Estimates this week was this one from Medcraft:  "When an employee breaches the law ... and culture is responsible, then not just the employee, not just the fruit, but also the tree, which is the officers and the company, should also be responsible."

It's a troublingly anti-individualist sentiment.  You would be forgiven for thinking that Medcraft is suggesting that parents who raise their children in less than ideal settings should be held liable for the criminal behaviour of those children.  After all, that seems to be a far more appropriate application for the fruit and tree analogy.

But even in the corporate world such a concept makes no sense.  A criminal justice system must be based on the idea that individuals make choices about their own behaviour.  That's not to say that individuals can't work together to achieve goals — both productive and destructive.  But our legal system relies on the reasonable assumption that human beings have free will and are held to account for their actions.  If a company employee commits a crime, that individual is responsible, not his manager or some distant company director.

There is sound logic to such an approach.  But Medcraft's proposal to prosecute companies for "bad" culture is not just a misapplication of basic concepts of valid reasoning, it also runs completely counter to the rule of law.

If ASIC is genuinely interested in rooting out bad corporate culture it should first get its own house in order.  For too long the corporate regulator has ignored the rule of law and argued for increased power over the productive elements of the Australian economy.

One of the most essential features of an economy that attracts investment is a legal and political structure based firmly on the rule of law.  A significant contributing factor to the future growth of Australia's economy will be the reliability of our laws and the consistency with which government agencies apply them.  In this regard, ASIC is doing us all a significant disservice.

Things get messy when popularity trumps policy

Hard to believe it, but the 2015 budget was delivered just three weeks ago.

Already the Abbott Government seems eager to move on.

Last week Tony Abbott announced the creation of a terror tsar, a new minister for counterterrorism, and a policy to strip Australian citizenship from dual nationals suspected of terrorist activities.

National security is important.  And the Government has been telegraphing the citizenship changes for months.  But the question is:  why now?  Why so soon?

The budget was delivered on Tuesday, May 12.  National security week was launched on Monday, May 25.  That's 13 days.  Really just 12, if you factor in the budget lockup and newspaper print deadlines.

This quick hop from economics to security is indicative of a broader problem with the Abbott Government's populist push.  It knows it doesn't want to be unpopular.  But it's not sure what it wants to be popular about.

The 2015 budget is nothing like the political catastrophe that the 2014 budget was.  If anything it has been well received.  Everybody likes the accelerated depreciation changes for small business.  The fiscal reckoning has been postponed, and nobody but sticklers, obsessives and economists could object to that.

So Labor has struggled to gain traction against the budget.  That "fairness" thing, so potent last year, looks a bit sad when thrown at a budget specifically designed to avoid such attacks.  It's been widely observed that Abbott is doing better in part because Shorten looks played out.

National security week didn't last long.  The process was derailed by Joe Hockey's Monday night Q&A blurt that he was open to exempting tampons from the GST, Bill Shorten's announcement that he was going to introduce a gay marriage bill on Tuesday night, then the publication of incredibly detailed leaks out of cabinet about the citizenship stripping proposal.

Whatever momentum national security was to provide the Government was well and truly stalled by mid-week.

The Government has haplessly tried to put the gay marriage issue back in the box by saying that it is focused on getting the budget through Parliament.  Marriage can wait.  There are small business tax concessions to be passed.  Yet this argument would be more convincing if the Government hadn't already moved its attention from the budget to national security.

It's very messy.

One of the conceits that the political class have is that they can host "public conversations" about the issues that matter to them;  that the tone and topic of debate in the public sphere can be directed by the Prime Minister's Office.

Sometimes this does work, admittedly.  Hockey did manage to genuinely spark a discussion about tax earlier this year with the release of the tax discussion paper.  The discussion took a turn the Government was not necessarily pleased about.  Every special interest group used the space to air their proposals for new taxes.  Still, at least everybody was on-topic.  More often the public isn't interested in talking about what PMO is.

Very quickly the national security issue became less about the threat of terror and more about divisions within cabinet and shadows of the leadership question.  The imminent legalisation of gay marriage had more public "cut through" than the creation of a terror tsar.  Perhaps even more than it would have, had the Government been less reluctant to talk about Shorten's proposal.  Nothing is more interesting than division in the ranks.

Now the Government wants to have a "national conversation" about the meaning of citizenship in an age of terror.  This does not promise to be a particularly enlightening conversation.  Nor a fruitful one, as it looks to simply expose the wavering support within the Government and its backbench for the rule of law.

Last week wasn't just a case study in how policy debate can go off the rails, but a more significant indication of the long term importance of the 2015 budget.

Budgets usually loom large in the Australian political calendar, but the 2014 budget was a vortex sucking in everything around it.  This year's budget is a bit of a return to form.  Parliament and the public are much calmer.

Yet a forgettable budget is hardly what the times demand.

The Australian Bureau of Statistics reported that capital investment in Australia fell in the March quarter by the largest amount since the Global Financial Crisis.

If this is a harbinger of things to come, Tony's Tradies are going to need more than accelerated depreciation to ride out the storm.

Political historians will remember the 2014 budget for the heartache it gave the Government.  But economic historians will remember this year's budget for having reconciled the country to decades of debt and deficit.

Abbott's eagerness to move on from economics to security is unfortunately more revealing about the future direction of this Government than anything his Treasurer released last month.

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