If the government's broken, dump it: votes of a disposable society

Whether Gerry Harvey likes it or not, we live in a society that runs on the back of consumer power.

The internet and trade liberalisation have granted Australian consumers access to inexpensive and plentiful goods and services.

As a result, most of the objects we purchase in day-to-day life are relatively cheap and easy to obtain, and hence they are also easy to replace.  Our parents like to remind us that in their day, a television was terribly expensive and if it broke, it was repaired.  For today's consumers, if the TV breaks it's relatively cheap to throw it out and buy a new one.

As Australians are becoming accustomed to their power as consumers, they are tending to apply aspects of consumer behaviour to other areas.  Politics is one such area.

Today, Australians are consumer-voters living in a disposable society.  And there appears to be a greater willingness on behalf of the electorate to dispose of governments that aren't conforming to expectations.

Take the 2010 federal election as an example.  Conventional wisdom is that first-term governments tend to get a bit of a free pass.  In fact, the last government to be voted out in its first term was the Scullin government in 1931, in the midst of the Great Depression.  Our parents and the generation before them were hoarders, stubbornly holding on to the old broken television they'd worked so hard to buy.  As voters they were invested in their first-term governments, persisting in the belief that the government might come good.

Despite the conventional wisdom about first-term governments, the Gillard-Rudd Government had a near-death experience.  Voters judged the Rudd-Gillard Government's infighting and non-performance during Rudd's leadership harshly.

A similar situation occurred in Victoria later that year.  The Brumby government, though hampered by a slight ''it's time'' factor, was expected to hold on for another term, but Victorian voters indicated their exasperation with Victorian Labor's inability to deliver infrastructure projects, such as the desalination plant and the myki rollout, on time and on budget.

There is an element of frustration with a lack of competent service delivery behind the ALP's losses in New South Wales last year, and Queensland last weekend.  The former Labor governments had been in place a long time, and thus were likely to suffer from a sort of natural attrition, but the overwhelming narrative in these contests was built around questions of competency, and failure to deliver observable, tangible outcomes to voters.

Somewhat distressingly though, Australian politicians don't appear to have noticed that competency and performance are big issues for an electorate that sees governments as just another consumer good that can be replaced at will.

In Queensland, the ALP is currently debating its next move.  Some senior figures suggest that in order to make Labor electorally palatable again, they should be allowing party members to elect the ALP leader.  Others suggest that a return to ''Labor values'' is needed.  Both of these approaches miss the point.  Introspective navel-gazing about the culture and character of the Queensland ALP has its place, but more than anything else, what voters want from their governments is competency.

As Queensland LNP campaign director James McGrath and Liberal Party strategist Mark Textor have stated, the Bligh government's problems centred around the acute mismanagement of health policy, of water policy and so on.  Until the Queensland ALP have addressed the public's perception of them as incompetent, it won't matter who selects the ALP leader, because they won't be Queensland premier any time soon.

The failure to recognise the importance of competency for a new breed of consumer-voters is not confined to the Queensland ALP.  Having been elected against the odds in 2010, the Baillieu government is now suffering a decline in its popularity and poll numbers, as Victorian voters scratch their heads in an attempt to figure out exactly what the Government is doing, given that it isn't delivering any political or legislative reform or building any new infrastructure.  The O'Farrell Government, which is currently experiencing high levels of support, needs to be careful that it does not fall into the same policy inertia.

And the Gillard Government, despite the passage of key pieces of its legislative agenda, such as the MRRT and the carbon tax, continues to be unpopular with voters as it lurches from one mismanaged implementation to the next, while its senior figures continue to bicker amongst themselves.  It is still perceived as an incompetent government, and despite the fact the electorate doesn't seem particularly keen on the idea of prime minister Tony Abbott, at this stage it seems likely that a majority of Australians will vote Liberal in 2013.

It is also important for governments not to confuse policy with populism.  Collectively, voters are smart, and they know when their vote is being bought.  Populism is the mark of an incompetent government that has no legislative aims and mistakes handouts for policy, and voters are intelligent enough to recognise this.

The challenge for governments is to conform to voter expectations of competency.  They need to move away from the ''having a policy to set up a working committee to think about policy'' that characterised the Rudd approach to governance, instead actually articulating a defined set of legislative aims, and then enacting those aims with a minimum amount of fuss and blood loss.  Because the electorate is now characterised by a consumerist approach to politics, and if they perceive a government as broken, just like a malfunctioning TV, they will throw it out.

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Tap our rich CSG reserves

Coal-seam gas is developing as a bonanza for Australia and specifically for Queensland.  Notwithstanding considerable pressure from anti-development forces, the Queensland election campaign saw both main parties remain committed to its ongoing development.

In global terms, shale and coal-seam gas, both of which Australia has in abundance, are set to repeat the Houdini escape trick like coal and oil, which emerged to leapfrog dwindling energy sources of wood and whale oil.  Conventional sources of gas, which supplies one-quarter of the world's energy, had been getting scarcer.  Prices had risen from the $2 a gigajoule common in Australia to $10 in international markets.  But new fracking technology has come to the rescue supplementing conventional deposits with shale gas and CSG and bringing global prices back down to $2 a gigajoule.

Natural gas from conventional wells, especially off the North West Shelf, has become one of the mainstays of Australia's mineral wealth.  But our CSG and shale gas reserves are actually greater than those of conventional natural gas.

CSG reserves are located in Queensland and NSW, and in Queensland this source now dominates the state's gas supply.  Output has grown from virtually nothing 10 years ago to a level comparable to the Bass Strait's gas production.

Anna Bligh and Campbell Newman have both been supportive of the industry.  By contrast, the NSW government has allowed exploration and production to be tied down by the environmental and NIMBY oppositions that seem to be endemic with any new form of wealth, and current production is minuscule.  Local opposition groups portray CSG as posing risks to farmland and water supplies.  The proximity of the gas supplies to hobby farms and the absence of landowners' rights to sub-service minerals have fuelled these pressures.  NSW is only now making cautious moves, prodded by Martin Ferguson in Canberra, to allow its own immense deposits to be brought onstream.

In Queensland the Greens and Bob Katter's Australian Party have sought to foment hostility to CSG development.  CSG development, alongside hostility to supermarkets and free trade, differentiate Katter's rural socialism from the Liberal National Party.  Aware of their vulnerability to splinter groups promoting populist causes, the Nationals in Canberra tried to neutralise Katter's appeal by calling for a new regulatory framework and for landowners to get a share of the royalties.  Katter's Australian Party's 12 per cent of Saturday's vote indicates this was not a total success.

The overwhelming majority Newman gained may provide a four-year window within which the industry can demonstrate its claims to be safe, unintrusive and non-polluting.  But massive majorities can make it difficult for leaders to maintain cohesion.  And it would be regrettable if a depleted Labor rejected its former support for CSG and combined with Katter's Australian Party and the Greens to oppose developments.

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Queensland election result and fiscal policy

The post-mortem of the state election result has begun in earnest, with many issues already bandied about as factors explaining Queensland Labor's seismic defeat.

Some of the major issues identified in exit polling include the mismanagement of key areas of current state government responsibility, including in health and transport, and strong increases in the cost of living of recent years.

But it should be said that any of these issues could have been diluted, perhaps even substantially, if a general impression of basic incompetence by the previous government was not in existence.

The fact of the matter is that the words ''competence'' and ''Bligh government'' could no longer be strung together, and there was no more fundamental measure of incompetence than the state of the government's own financial books.

The problems of Queensland's public finances were well canvassed during the election campaign — a state budget in the red, a government saddled with over $85 billion in debt and counting, and a Queensland that lost its historical low-taxing position.

In many senses the parlous state of the budgetary books fed into some of the issues seen as decisive during the election campaign.

Rising taxation liabilities over time feed into the cost of living and associated issues, such as housing affordability, while much greater government spending often comes with greater laxity in cost control and an increasing risk of resource misallocation within the public sector.

The sharp deterioration in the Queensland budget from being the best in Australia to the worst was, in large part, the product of deliberate policy strategies pursued by Labor over the best part of twenty years that would have made Fabius Maximus proud.

Beginning with Wayne Goss in his second term, and later taken on by Premiers Beattie and Bligh with some gusto, Labor increased the scale of state government expenditure which eventually exceeded the average levels of provision found in other states.

Accusing previous conservative governments of spending ''neglect'', they repudiated the Bjelke-Petersen legacy of low taxes and extensive private sector services provision that kept the state budget balanced and the economy growing strongly during the 1970s and 1980s.

The magnitude of the spending under Labor was so relentless that, as revenue growth began to wane after Mining Boom Mark I, the previous government lacked the political will, or simply didn't know how, to apply the speed brakes.

During Bligh's brief tenure as state treasurer general government expenditure increased by a staggering 14 per cent in 2006-07, more than double the revenue growth in that year.

The global financial crisis came along shortly thereafter and spending was still growing at about 12 per cent per annum, but revenues just kept ebbing away and a healthy budget surplus turned into the worst budget deficit outcome of all states and territories.

The Bligh government quadrupled the level of public debt over a few short years in order to keep up the expenditure effort, leaving future generations to pick up the tab in an atrophied economy outside of the resources sector.

The greatest challenge for the Newman Liberal National government will be to reverse the fiscal damage wrought by its predecessor.

The announcement of a comprehensive audit of the state's public finances is an eminently sensible one, as it will provide a fresh opportunity to apply a fine toothcomb across the field of expenditure commitments and identify opportunities for real fiscal savings.

The audit committee would do well to revisit the numerous issues left untouched from the 1996 FitzGerald audit, such as the comprehensive application of purchaser-provider arrangements within government.

This would entail the private sector playing a much greater role in providing logistic support to government operations and delivering frontline services to the public, something that could help lift the fiscal burden off taxpayers already struggling with their own everyday bills.

Another report on the state of the Queensland economy and its finances, undertaken by Commerce Queensland in 2006 and which I was fortunate to organise, could also serve as a guide for the new government in its quest to get the budget back on track.

The Commerce Queensland report, among other things, canvassed the widespread privatisation of state assets.

While privatisation would deliver private sector efficiencies and revenues from asset sales could be used to repay public debt, this option is regrettably off the table for now given the former Bligh government's cynical mishandling of this issue during the GFC.

The energy with which the Premier Newman is already applying to his role is admirable, and he will need to muster all of his famed ''Can Do'' spirit to reverse nearly twenty years of fiscal profligacy in Queensland.

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Price Labor will pay for pricing carbon keeps rising

Legislating the carbon tax only exacerbates Labor's existing crisis of relevance.  And it's not because of a lack of trust over a broken promise.

Being in opposition is demoralising for a major political party.  But it can be fatal if it occurs during a great political paradigm shift against its favour.

Twentieth century politics in the Western world was dominated by the tension between capitalist economic progress and socialist aspirations for equality.  Free market capitalism proved best at addressing both, creating prosperity that tackled the anchor of inequality -- poverty.

The paradigm of the 21st century in the developed world is quickly evolving into a new competitive tension between the environment and economic progress.

And history is already repeating itself.  Though Bob Brown would dispute it, capitalism is proving itself best able to sustainably manage the world's resources by increasing wealth that enables us to demand and afford a better environment.

In the 20th century, the labour movement had relevance.  Today it is not so clear.  Among Labor's core constituencies of workers there are two broad groups.  And the gulf between them is growing.

Recently, Mark Latham called the first group the ''inside the cycleway'' progressives.  They're comparatively wealthy, live close to their work, travel regularly and think economic growth is a cruel process that exploits our environment instead of preserving it.

Beyond the cycleways, where some of the biggest swings in NSW and Queensland state elections were recorded, middle-class suburban attitudes are very different.  These are households where the primary income earner budgets on an average income while trying to pay off a mortgage for both cars and the house.  They don't live close to their work.

They're sick of opening their quarterly electricity bill, seeing it rise again and having to whack it on the credit card that they just thought they had got on top of.  And economic growth is the difference between whether their kids can go to a low-fee independent school and have a five-day package Gold Coast holiday.

Both are generalisations.  But the concept is real.  A Labor Party allied to cycleway insiders cannot appease both.  There's no more emblematic wedge to drive between them than the carbon tax, and the divide will get bigger every year.

The point of a carbon tax is to build a low-carbon economy on the expensive foundations of perpetually more expensive hot gas, with the cost sheeted home to consumers.  Labor's carbon tax creates a class of green workers that needs the extreme climate change policies of the Greens to be implemented if their professional interests are to be advanced.  And for the carbon price to be effective requires its rate to rise and regulation to tighten, adding more costs that harm households.

In this context, the Liberal-National Coalition has a constituency against higher taxes and more regulation.  The Greens have a constituency to increase taxes and extensive regulation.

Labor sits between the two without a clear constituency.  By supporting a carbon price, Labor has committed electoral suicide by literally gifting the paradigm of economic debates to the Liberal-National Coalition and the Greens.  At the moment, Labor sits in the middle, sending a confusing message by perpetuating our carbon-intensive export industries while concurrently seeking to tax the economy into a low-carbon prosperity.  Doing so is neither politically coherent, intellectually consistent or practically achievable.

At the next federal election, the Liberal-National Coalition will almost certainly run television advertisements of Julia Gillard repeating her pre-2011 federal election campaign commitment that ''there will be no carbon tax under a government I lead''.  If the Greens were smart they'd do the same, and highlight it was their leverage that dragged Labor to introduce a carbon tax.

Elections are won in the centre ground.  But parties don't start in the centre.  They appeal to their off-centre base and reach inward.

Without their base and their values, Labor will get smashed between parties who offer clearer choices.  And it will be repeated if the electorate votes for the anti-carbon tax Coalition and Labor is foolish enough to oppose its repeal.  There's no doubt Labor would suffer a huge credibility blow if it unwound its carbon tax.  But it might be the only way to save the party's relevance.

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Tasers: the non-lethal force that kills

It's time to stop describing Tasers as ''non-lethal'' weapons.  They are quasi-lethal.  At best.

That much should be clear from the death of 21-year-old Roberto Laudisio Curti in New South Wales last week.

The widely broadcast security camera footage shows Curti running away.  One police officer in pursuit appears to pause, raise, and fire his Taser's barbed projectiles at the Brazilian student.  Curti stopped breathing shortly after.

If accurate, this incident would clearly be what the NSW Ombudsman warned about in a major report four years ago:  Taser use is highly susceptible to mission creep.  Nothing in the security footage suggests Curti presented an ''extremely high risk'' to officers or the public — the grounds for Taser use.  From what we can tell, there was no threat or aggression.

But let's put the specifics of this case aside.  There are inquiries by the New South Wales Coroner and NSW Ombudsman which will be looking closely at those.

There is a more basic problem with the use of Tasers.

In the United States, 12,000 law enforcement agencies now carry the weapon.  Assessing the evidence collected in that country, the National Institute for Justice (the research wing of the Department of Justice) found in 2011 there is ''no conclusive medical evidence'' indicating ''a high risk of serious injury or death'' from Tasers.

That sounds all well and good until you read the NIJ's caveat:  ''... in healthy, normal, non-stressed, non-intoxicated persons.''

This is a particularly crucial caveat, as it is dealing with unhealthy, abnormal, highly stressed and blindingly intoxicated persons where Tasers are most useful.

One anonymous police officer wrote in the Punch after last week's fatality he had ''wrestled a lot of drug-affected people and they don't give up easily.  Often a lot of force needs to be used in order to bring them under control.''

More than half of those tasered in NSW between 2002 and 2007 were identified as having drug or alcohol problems, or having been intoxicated at the time of the incident.

A Taser is effective in such situations because it does not rely on pain, or the threat of pain, to compel compliance.  The shock delivered through the darts completely incapacitates its target — the electric current overrides the brain's control of the body and causes the muscles to spasm involuntarily.

So as a policing tool, it is most useful against drug-affected people who display ''superhuman'' strength.

And that is also exactly the circumstances where the research suggests Tasers are going to be at their most lethal.

This analytical disconnect allows supporters to claim Tasers are much safer than they actually are in practice.

Yet announcing the rollout of Tasers to general duties police in 2008, the Police Commissioner Andrew Scipione said ''if this is but one option that gives the police officers in the streets of NSW some alternative rather than to use deadly force, rather than to shoot somebody and killing them, then this is a good option.''

Even our limited experience in Australia shows Tasers don't replace firearms.  The Western Australian Corruption and Crime Commission found they are a substitute for other tools like pepper spray.

Taser use has increased substantially over the last few years in WA, but firearm use has increased as well.  This is a phenomenon overseas jurisdictions have discovered too, and it makes some sense.  Depending on the environment and the officers' training, attempts at tasering someone fail 10-20 per cent of the time.  If a situation is truly dangerous, police officers use much more reliable guns.

It has been suggested the use of a Taser could have saved the life of the carjacker who was shot in a Parramatta shopping complex on Sunday.

Perhaps.  But if the officers in question believed anybody was seriously at risk, a Taser would not have been their response.  There is a reason officers still carry firearms.

Tasers don't always attach to their target properly.  The model in use in NSW can only fire once — if the darts miss, the officer has to reload.  And in only 35 of 48 incidents studied by the NSW Ombudsman in 2008 were Tasers described as ''effective''.

So yes:  Tasers are less lethal than firearms, and in some circumstances would be preferable.  But that is not how they are actually used.  They are now, according to the WA CCC, the ''force option of 'choice'''.  And, given the usual profile of individuals which they are used against, Tasers are a more potentially lethal replacement for other non-lethal methods.

Some reports have said Roberto Laudisio Curti was on drugs when he died.

The problem for Taser advocates is to devise a standard of use which recognises first, that Tasers are most useful when for dealing with highly intoxicated individuals and second, they are at their most deadly when doing so.

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Life experience key among advisers

David Gonski.  Glen Boreham.  Ray Finkelstein.  Ken Henry.  They have each headed up one of the Gillard government's recent big inquiries.  Gonski on education funding, Boreham on media regulation, Finkelstein on press censorship, and Henry on foreign policy.

The Gonski inquiry recommended $5 billion more spending on education.  The Finkelstein inquiry wants more controls over the press.  The Boreham and Henry inquiries are due in the next few months.  We don't know what they contain but we have clues.

Boreham's initial discussion paper flagged more government regulation of media companies.  And Henry has form.  He famously gave us the mining tax out of his tax review, and he helped Kevin Rudd lose his job.

When you look at these four people as a group, a few things stand out.  They're all male.  They're all about 50 years of age or older.  They all come from Sydney, Melbourne, or Canberra.  And they're all bureaucrats of one sort or another.  The government says it's big on diversity.  These four people are about as diverse as Julia Gillard's cabinet.

Without doubt all of them are experienced and knowledgeable.  The problem is they've all had pretty much the same sort of experiences and they all know the same sort of things.

Boreham worked at IBM for 25 years.  Henry worked at the Treasury Department for 25 years.  Gonski was a lawyer before becoming a company director.  Finkelstein was a lawyer before becoming a judge.

Gonski is a business bureaucrat, Boreham was a business bureaucrat, Finkelstein was a legal bureaucrat, and Henry was a real bureaucrat.

Given the rich and varied backgrounds of the people who advise the federal government, it's no surprise that no new thinking comes out of Canberra.  The only thinking that comes out of Canberra is about what bureaucrats know best:  new regulations and new ways of spending taxpayers' money.  It's difficult to remember when a Labor or Liberal government had an inquiry run by someone who actually created some economic value.

There are plenty of government reports written by people who know how to tax and how to spend that economic value.  There are far fewer reports from people who've created that value in the first place.

People who create economic value are called entrepreneurs.  Somehow, we've got to the stage where it's almost insulting to be called an entrepreneur.  Entrepreneurs risk their own money.  Bureaucrats risk other people's money.  At the moment, one group is in favour and the other is not.

Not only do entrepreneurs not get a look in to the policy process, when they do give an opinion on a policy they get singled out by name and are vilified.  The federal government's handling of the mining tax, which was passed by Parliament this week, is a classic demonstration of this.

Treasurer Wayne Swan negotiated in private, and made a secret deal on the mining tax with the business bureaucrats of BHP, Rio Tinto and Xstrata.  Under the tax, these big multi-national mining companies are hugely advantaged over smaller, local owner-operated resources companies.  When this is pointed out to the government, the owner-operators are told they are being selfish and shouldn't complain.

Meanwhile, most of the business media spends its time covering a private family dispute that has no impact whatsoever on the wider community, rather than investigating the secret deal between the Treasurer and the big three mining companies that potentially has consequences worth billions of dollars to taxpayers.

Rupert Murdoch is one of the few Australians in the past 100 years who has had anything remotely approaching a global impact.  His vision for the media was no less revolutionary than Bill Gates's for personal computers or Mark Zuckerman's for social networking.

Murdoch has more knowledge of the media and more insight into its future in the fingernail of his little finger on his left hand than has the entire staff of 692 people who work at the Department of Broadband, Communications and the Digital Economy.  But what are the chances of the government listening to anything Murdoch says about the media?  Zero.

Compare how the federal government treats people like Gonski, Boreham, Finkelstein, and Henry to how it treats Gina Rinehart, Andrew Forrest, Clive Palmer, and Murdoch.  It speaks volumes about this government's attitude to wealth creation.

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No granny chic in nanny state shtick

Risk-averse paternalism makes for a perverse reversal of freedoms.

The nanny state isn't a cheap Tory slogan.  It is a threat to our free, open, pluralist society.  Chris Middendorp wrote on these pages last week, in justifying why governments should increase regulation over individual choice, that opposing the nanny state was ''glib'' and a ''distraction''.

His comments echo New South Wales Greens senator Lee Rhiannon, who argued on the ABC's Q&A last June that she ''often find[s] that this notion of the nanny state, it's trotted out when people are a bit hard-up for an argument''.

Both are poor analyses.

The first modern use of the phrase was not, as Middendorp argues, by British Conservative MP Iain Macleod in 1965.  Nor is it particularly connected to free-market thinking.  It originated from Dorothy Thompson writing in the June 6, 1952, edition of the Pittsburgh Post-Gazette.  In dismissing aspects of English colonialism, Thompson wrote that ''Britons are turning Britain itself into a Nanny-state''.

The phrase was an evolution from its 1800s predecessor ''grandmotherly government'', used to dismiss laws that coddle workers from the realities of the world.  It's a sign of how far the former champions of working people have drifted from their roots that they are now nanny's greatest advocates.

Paternalism places the imperfect knowledge of one-size-fits-all government policy against the diffused knowledge and judgment of individual action and the market.

Middendorp may describe the market as ''brutal, amoral places'', but it is not a place.  The market is the decisions of 22 million Australians, each motivated to act in their own self-interest — a process distant government cannot understand.  And when it has tried to do so in the past, it has failed with horrible consequences.

Do the people have a government to preserve our freedom?  Is any measure justified in protecting us?  Nanny sympathies favour the latter.

These questions are central to the preservation of our liberal democratic principles of the primacy of the individual to choose their own life, faith, opinions and how they use their property.  Almost all laws that exist stem from these basic principles.

Road laws are often cited as an example of supporters of the positive role of government to act as nanny.  They're not.  Road laws are necessary because when cars collide at high speeds, innocent people can be robbed of their lives.  We have road laws to mitigate that risk.  But we also recognise there's a point where road laws offend the founding principles of a free society, so we don't ban cars or people driving them.

But there are exceptions.  Laws specifically targeted to children escape the ''nanny'' tag because we recognise the unique vulnerability caused by children's immaturity.  Suggesting otherwise, as many nanny advocates do, is, well, childish.

Advocacy for government encroachment is often justified to protect us from ourselves.  No one disputes that free people can make bad decisions.  Without our mistakes we cannot learn.  It's immoral to create a risk-free society that infantilises people.

We also need to recognise that one person's mistake is another's deliberate decision.  Nanny's supporters too often confuse their own subjective views with what is objectively right.

Most of us cannot understand why others trade quantity of life for their preferred quality of life by engaging in behaviours that are unambiguously linked to early death, such as smoking.  But most of us rationalise away the dangers when we drink alcohol or eat certain foods that have equally undesirable affects.

Nanny's advocates use an incremental strategy to advance paternalism, starting with measures that are small and seemingly justifiable.

If one nanny measure works, advocates argue the government should do more.  If it doesn't, then it's because the government didn't do enough.  It then becomes a vicious cycle of self-justified laws that defer choice and responsibility from individuals towards government.

No one seems to mind when the product or behaviour targeted is something they don't like.  But once a precedent is established it is quickly replicated elsewhere.

Take plain packaging — for videos.  In 2009, the South Australian Parliament legislated for plain packaging of R18+ films unless they were separated from other video stock.  The justification for this measure was public morality.

It's the same argument used to justify federal Communications Minister Stephen Conroy's incubated internet filter.  Similarly, for some it justifies why same-sex couples shouldn't be allowed to marry.

Contemporary paternalism now also takes the form of anti-social capital local government regulations that make it nearly impossible to hold street parties without fear of a clipboard-holding local government bureaucrat questioning you.

Similarly, my late grandmother wouldn't be allowed to offer firefighters her volunteer-made cut sandwiches because of strict food handling and labelling laws.

Excessive government corrodes civic virtue.

If someone chooses to engage in a risky but legal activity, they are not a victim.  Reward requires risk and responsibility.  Even if we could abolish risk, it's not a price worth paying — our freedom.

Financial market implications from the carbon tax

There are three main issues related to measures involving taxing emissions of carbon dioxide and other greenhouse gases.  First, there is the science of global warming — how much if any warming is likely to occur as a result of human economic activity?  Second, there is the economics of this how much damage might the warming cause, how much would it cost to prevent it?  Third, there is politics — in a world of independent sovereign states all with different levels of emissions and different ways of abating those emissions costs, how is it possible to arrange for collective action to abate them?

The conventional view on the science of warming is that increased atmospheric concentrations of carbon dioxide and other greenhouse gases will bring an increase in average global temperatures of between two and five degrees celsius.  The higher end of this temperature range is generally above the levels seen over mankind's 200,000-year existence, although not especially high in the context of geological time.  Higher temperatures along the lines forecast are estimated to bring net, though not disastrous, costs.

Many scientific authorities cast doubt on likely levels of warming, and point out that, contrary to forecasts, global temperatures have been stable since the late 1990s.  The Massachusetts Institute of Technology atmospheric physicist Professor Richard Lindzen estimates the maximum temperature increase due to human emissions is around 1.2 degrees celsius, most of which has already occurred.

Australia in a global context

Emissions are closely associated with income levels.  In per capita terms Australia has higher emissions than most other countries largely because unlike most other developed countries Australia is a net exporter of products such as aluminium and steel that incorporate greenhouse gases.  Australia's consumption of greenhouse gas emissions is about average among the developed countries.  The table below illustrates this for carbon dioxide.

Forms and incidences of carbon taxation

Australia already has the following emission restraining measures:

• The Renewable Energy Target (RET) which requires renewables like wind and solar will supply 20% of electricity by 2020.
• Regulations on energy use related to housing construction and domestic appliances.
• Budget subsidies and grants for selected projects and technologies.

The Productivity Commission (PC) estimated the effect of Australia's RET and similar measures as at 2010 was equivalent to a tax of between $44 and $99 per tonne of carbon dioxide.  The RET was then less than half way to its 20% target and cost $473 million to $694 million in 2009-10.  A further $1 billion has been spent by Commonwealth departments on climate change measures, which are budgeted to expand considerably as a part of carbon tax laws.

There are also regulatory standards on top of these effects.  In the case of housing, regulations in the form of five or six star energy ratings impose a cost estimated by the PC at over $3 billion per annum.

The carbon tax

Central to the Federal government's Climate Change Plan is a carbon dioxide tax, starting at $23 per tonne in 2012 and eventually rising to $131 a tonne.  A $23 tax increases the wholesale price of electricity by more than 50%.

Australia's carbon dioxide emissions were 578 million tonnes in 2010 and with the measures in place are expected to be 621 million tonnes in 2020.  Even in 2050, with optimistic assumptions about new technologies, industry restructuring and a carbon tax of $131, Australian emissions are forecast to be 545 million tonnes and half Australia's emission reductions will be purchased from overseas.  This involves Australia paying countries to abate their own emissions at costs estimated to be $57 billion in 2050.  This exceeds the value of our current exports from coal and is more than twice the value of all our current agricultural exports.

Concluding comments

Present-day energy consumption is highly reliant on carboniferous fuels.  Energy itself is, second to food, the basic building block of all human activities.

Unlike the case with oil, which experienced a form of new tax in the OPEC supply restraint in the 1970s, substitutes do not exist.  Modelling the effects is therefore precarious.

Australian Treasury 2011 estimates show the carbon tax will bring a loss of average income per person of $2700 per annum (in 2010 dollars) by 2050.  This amounts to 5% of income in that year, with a cumulative loss by 2050 of $40,000 per person.  This relies on a global agreement being negotiated, which appears to be increasingly unlikely.  The forecasts also assume:

• A very rapid technological development of carbon capture and storage and renewables.
• A continued expansion of coal and other energy exports despite carbon restraining measures overseas.
• That Australian labour productivity growth will continue (in fact increase) from 1.4% a year between 2000 and 2010 to 1.6% thereafter.

This final assumption means the key input to future income levels is made notwithstanding policy decisions that close down the industries that enjoy the highest levels of productivity.  These include the 80% of electricity that is coal-based, as well as smelting, iron and steel.  And the policy is to replace these high productivity industries with low productivity industries like wind and solar.

These matters are of crucial concern to the financial services sector.  Australia's decision to impose a carbon tax will mean where energy costs loom large, in some cases this could threaten the viability of firms.  In addition, firms whose activities involve direct production of emissions will need to account for these and, in many cases, arrange for offsetting purchases of carbon credits from low carbon dioxide emitting suppliers.  Financial service providers will need to understand details of the obligations (and opportunities) of new carbon tax laws.

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Newspapers tangled in politics ... that's yesterday's news

Every generation thinks the world they are presented with is unique.

Reflecting on the 1819 parliamentary session, the British conservative Henry Bankes regretted that the government had not done more to ''restrain and correct the licentiousness and abuse of the press''.  Newspapers are ''a tremendous engine in the hands of mischievous men,'' Bankes wrote.

Bankes' complaint was old hat even then.  There's not much new in media criticism.  When Ray Finkelstein argued the press fosters ''inequality, abuse of power, intellectual squalor, avid interest in scandal, an insatiable appetite for entertainment and other debasements and distortions'', he may not have realised how tired a note he was striking.

The great champion of press freedom, Thomas Jefferson, lamented that nothing in a newspaper could be believed.  With obvious disappointment, Jefferson wrote ''the man who never looks into a newspaper is better informed than he who reads them''.  Journalists had welcomed ''prostitution to falsehood''.

John Stuart Mill described the London press as ''the vilest and most degrading of all trades''.  Edmund Burke considered newspapers as a ''grand instrument of the subversion of order, of morals, of religion and ... of human society itself''.

We could go on.  For as long as there has been media there have been complaints that it is biased, unbalanced, unfair, immoral, reckless, unethical, excessively powerful, and untrustworthy.  An unhappy Samuel Johnson said too many journalists of his day were political partisans ''without a wish for truth or thought of decency''.

So — for instance — it is hard to understand Robert Manne's claim that in recent years The Australian has ''transcended the traditional newspaper role'' and become an ''active player in both federal and state politics''.  Newspapers have always been tangled up in politics.  There is no traditional, non-political role for them to transcend.

Manne wrote in his Quarterly Essay that The Australian is a ''remorselessly campaigning paper''.  Is this description supposed to be damning?

One of the world's greatest media moguls, William Randolph Hearst, claimed his newspapers ''control the nation''.  His New York Journal didn't just report, it participated.  It distributed welfare and disaster relief.  It launched public interest lawsuits.  It even broke someone out of a Cuban prison — ''the greatest journalistic coup of this age,'' according to the Journal.

Popular mythology reflects Hearst's self-aggrandisement by crediting his papers with amazing political power as well.  But the reality does not reflect the legend.  It suits everyone to talk up the power of the media.  Proprietors trade on the illusion of clout, and politicians want excuses for their own impotence.  Hearst later made a series of failed political runs.  Clearly he thought public office a desirable promotion.

Across the Atlantic, the mid-century press baron Lord Beaverbrook famously said he ran the Daily Express ''merely for the purposes of making propaganda and with no other motive''.

Beaverbrook was being playful.  The occasion for those words was his interrogation by the 1947 Royal Commission on the Press.  That Commission had an eerily similar origin to our recent Independent Inquiry.  The post-war Labour party was frustrated with press hostility.  Labour had won the 1945 election by a landslide.  But most papers in that election had editorialised in favour of the Tories.  For Labour politicians egged on by the journalists' union, this was proof the papers and their owners were dangerously out of touch.

Any semblance of historical awareness should lead us to focus our attention not on the repetitive, unchanging complaints about how venal the press is, but on what is genuinely new.

And that is the extraordinary wealth of new information, new sources, and new outlets available to media consumers in 2012;  our access to the global press online, social media and ''citizen'' journalism, the opening up of the journalistic processes, and, even, the democratisation of media criticism.

While the complaints about journalism made today are virtually indistinguishable from those made by Henry Bankes in 1819, the environment in which the media operates is totally different.

The Finkelstein Inquiry was given two tasks.  The first was to look how the internet challenges newspaper business models.  The second was to look at press standards and quality.  One of Finkelstein's biggest failures was not coherently joining the two tasks together — what the second task meant in light of the first.

Finkelstein's proposed News Media Council is strikingly similar to the 1947 Royal Commission's recommendation that British newspapers be governed by a General Council of the Press.  (The Royal Commission's threat of statutory regulation led the industry to form the UK Press Council.)

It's as if nothing has changed in the meantime.

The Duke of Wellington defeated Napoleon and made it to the office of prime minister — few were more respected and influential than Wellington — but he privately complained to his family that Britain's real rulers were ''the Gentlemen of the Press''.

It is a professional pastime of politicians to complain about newspaper influence and the grubbiness of journalism.  We do not have to treat their whining as novel.  And we must not believe it is anything more than the traditional antagonism between government and press.

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Work Choices Changes

INTRODUCTION

Work Choices was a controversial workplace relations reform package.

Today almost any workplace relations reform proposed by the Coalition, employers and their representative associations is labelled by unions and the ALP as a return to Work Choices.  Some of this labelling is correct;  much of it is wrong.

Some Work Choices changes were considered excessive.  Other Work Choices changes were considered incremental and justified as improving the management of workplace relations.  A number were retained in the Fair Work package.

The initial Work Choices package was modified.  The most notable change was the introduction of a fairness test to ensure an employee was fairly compensated if an agreement modified or removed a protected award condition.

This paper sets out the key features of Work Choices.  It also identifies aspects of Work Choices retained by the Fair Work system, see Attachment C.

I will also keep a scorecard of the number of times reform proposals are incorrectly labelled as a return to Work Choices.

WORK CHOICES CHANGES

Constitutional Underpinning

1. The corporations power in the constitution was used to an extent not previously seen in Australian workplace relations.  The High Court upheld the reliance on the corporations power finding that the power ‘extends to laws prescribing the industrial rights and obligations of corporations and their employees and the means by which they are to conduct their industrial relations’.

2. Work Choices represented a substantial advance towards a national workplace relations system.  The jurisdiction of state workplace relations systems was significantly reduced.

Australian Fair Pay and Conditions Standard

3. The Australian Fair Pay and Conditions Standard (AFPCS) applied to all employees in the federal system.  Standard entitlements were set in five areas:
   • minimum wages;
   • annual leave;
   • personal leave;
   • maximum ordinary hours of work; and
   • parental leave.

4. The AFPCS operated in conjunction with the award safety net.

Awards

5. Awards were simplified and reduced in number.

6. The list of allowable award matters was reduced to 15 categories.  Matters removed from the list were:
   • long service leave;
   • notice of termination;
   • jury service;  and
   • superannuation.

7. A list of matters not to be included in awards was established.  The list is at Attachment A.

8. A list of seven preserved award terms was established.  An employee who had an entitlement to a preserved award term that was more generous than the AFPCS or other legislative minima was entitled to the benefit of the preserved award term.  The preserved award matters are set out in Attachment A.

9. Protected award conditions were established.  These protected award conditions were taken to be included in a workplace agreement.  They also applied, in conjunction with the AFPCS, when a workplace agreement was terminated.  The list of protected award conditions is at Attachment A.

Agreements

10. Employer greenfields agreements were available.

11. Workplace agreements were not required to meet the no disadvantage test against the relevant award.

12. A workplace agreement displaced an award.  Protected award conditions were taken to be included unless expressly modified by the workplace agreement.

13. Workplace agreements were subject to the AFPCS.

14. The duration of workplace agreements, except for an employer greenfields agreement, was up to five years.  Employer greenfields agreement duration was up to 12 months.

15. Collective agreement clauses banning the use of AWAs were void.

16. Content considered prohibited content could not be included in a workplace agreement.  The prohibited content list is set out in Attachment B.

17. If a workplace agreement was terminated, the AFPCS applied together with protected award conditions.

18. Employers were to provide an information statement to employees at least seven days before a workplace agreement was approved.

19. Employers were to lodge a workplace agreement — accompanied by a declaration that it complied with the law — with the Office of the Employment Advocate.  The OEA was not required to scrutinise the workplace agreement.

20. An expired workplace agreement could be terminated on 90 days written notice.

21. Workplace agreements had to include a dispute settlement procedure.

Bargaining

22. Industrial action taken in support of a prohibited matter was unprotected action.

23. Industrial action taken in support of pattern bargaining was grounds for the suspension or termination of a bargaining period.

24. Industrial action threatening to cause significant damage to a person who was not a negotiating party was grounds for the suspension of a bargaining period.

25. A bargaining party could apply to the Australian Industrial Relations Commission (AIRC) for a suspension of the bargaining period to allow a “cooling off”.

26. The Minister could declare the termination of a bargaining period where protected action threatened the life, safety, health or welfare of the population or was likely to cause significant damage to the Australian economy.

27. After the termination of a bargaining period, the parties were given a further 21 day negotiating period which could be extended on application.  At the conclusion of the further negotiating period, if the dispute was not settled, the Full Bench of the AIRC must make a workplace determination.

28. A secret ballot of employees was required before protected industrial action could be taken.

Responses to Industrial Action

29. The AIRC had to hear an application for an order to stop industrial action within 48 hours.  If unable to determine an application within 48 hours, the AIRC had to issue an interim order to stop the industrial action.

30. If a negotiating party failed to comply with an order to stop industrial action, then the AIRC had to suspend or terminate the bargaining period.

Right of Entry

31. The federal Act’s right of entry provisions applied to the exclusion of state and territory right of entry regimes.  An exception was a right of entry for OHS purposes.

32. The requirements for granting a permit tightened including a “fit and proper person” test.

33. Permits had to be revoked where an official had:
    • been ordered to pay a penalty under the Act;
    • misrepresented the right of entry powers;  or
    • misused entry powers under OHS laws.

34. The AIRC could make orders to restrict the rights of a union or its officials if satisfied there had been an abuse of the right of entry regime.

35. The right to inspect records was limited to records of members of the union.  An AIRC order was required to inspect and copy records of non-members.

36. Notice of entry was to be given to the employer at least 24 hours before the entry.

37. The entry notice had to specify the particulars of the suspected breach.

38. Employers could make reasonable requests for the official to conduct interviews in a particular room and to follow a particular route to reach the room.

39. Officials could not enter premises for the purposes of holding discussions if all employees were covered by AWAs.

Termination of Employment

40. An unfair dismissal claim could not be brought by an employee of an employer who employed 100 or fewer workers.

41. An unfair dismissal claim could not be brought by an employee dismissed for ‘genuine operational reasons’.  Operational reasons were reasons of an economic, technological, structural or similar nature related to the employer’s business.

42. An unfair dismissal claim could not be brought by an employee engaged on a seasonal basis.

43. An employee had to be employed for six months before being eligible to make an unfair dismissal claim.

44. The AIRC was able to deal with certain matters, such as frivolous claims and jurisdictional objections on the papers.

45. The AIRC, when ordering reinstatement, had to consider income earned between the termination and the reinstatement.  This was relevant to an order to pay for income lost.

46. The AIRC had to reduce compensation if the employee’s misconduct contributed to the dismissal.

47. The AIRC could not award compensation for shock, distress, humiliation or similar hurt caused to the employee by the manner of the termination.

---

ATTACHMENTS

Attachment A

Matters Not To Be Included In Awards

1. Representation of an employer or employee in dispute resolution by an employer association or union.

2. Conversion from casual employment to another employment type.

3. Restrictions on the number or proportion of employees in a particular employment type.

4. Restrictions on an employer employing workers in a particular employment type.

5. Maximum or minimum hours for regular part time work.

6. Restrictions on the range or duration of training arrangements.

7. Restrictions on the engagement of independent contractors and labour hire workers.

8. Union picnic days.

9. Meat industry tallies.

10. Trade union training leave.

11. Right of entry provisions.

Preserved Award Terms

1. Annual leave.

2. Personal/carers leave.

3. Parental leave.

4. Long service leave.

5. Notice of termination.

6. Jury service.

7. Superannuation.

Protected Award Conditions

1. Rest breaks.

2. Incentive payments and bonuses.

3. Annual leave loadings.

4. Public holidays.

5. Allowances for expenses, skills and work conditions.

6. Overtime and shift work loadings.

7. Penalty rates.

8. Outworker conditions.

Attachment B

Workplace Agreements — Prohibited Content

1. Deductions from wages for trade union subscriptions.

2. Leave to attend training provided by a union.

3. Paid leave to attend trade union meetings.

4. The renegotiation of a workplace agreement.

5. Union rights to represent employees as part of dispute settling, unless chosen by the employee.

6. Right of entry.

7. Restrictions on the engagement of independent contractors and labour hire workers.

8. Annual leave arrangements departing from the Act.

9. Providing information about employees to a union.

10. Encouraging or discouraging union membership.

11. Allowing industrial action.

12. Disclosure of the details of a workplace agreement.

13. Remedies for unfair dismissal.

14. Restrictions on the ability of a person to enter into an AWA.

15. Discriminatory provisions.

16. Terms that do not pertain to the employment relationship.

Attachment C

Work Choices Reforms Retained in Fair Work

1. Reliance on the corporations head of power for much of the legislation.

2. The substantial creation of a national system.

Bargaining

3. The suspension of a bargaining period due to significant damage to a third party.

4. The suspension of a bargaining period to allow for a cooling off period.

5. The Minister may declare the termination of a bargaining period where protected action threatens the life, safety, health or welfare of the population or is likely to cause significant damage to the Australian economy.

6. After the termination of a bargaining period, the parties are given a further 21 day negotiating period which may be extended on application.  At the conclusion of the further negotiating period if the dispute is not settled, the Full Bench of the AIRC must make a workplace determination.

7. A secret ballot of employees is required before protected industrial action can be taken.

Unfair Dismissal

8. An employee must be employed for six months before being eligible to make an unfair dismissal claim.

9. The AIRC, when ordering reinstatement, must consider income earned between the termination and the reinstatement.  This is relevant to an order to pay for income lost.

10. The AIRC must not award compensation for shock, distress, humiliation or similar hurt caused to the employee by the manner of the termination.

Right of Entry

11. Notice of entry to be given to the employer at least 24 hours before the entry.

12. Entry notice to specify the particulars of the suspected breach.

Taxed to the max on emissions

Excluding and misrepresenting unfavourable data does not provide a credible analysis into Australia's extremely expensive carbon tax.

Yesterday the Climate Institute released its Global Climate Leadership Review that significantly bucked other analyses and concluded Australia's carbon tax of $23 a tonne of greenhouse gases was modest.  The report says Sweden has a $130 equivalent carbon price.  Switzerland is up to $60.

In response the report suggests, as many of the institute's reports do, that Australia is once again lagging behind the rest of the world in combating climate change.

The problem with Australia's $23 carbon tax isn't just that it is internationally high, it is also applied broadly.

That isn't what is happening in other countries.

As the Climate Institute's report notes in small print, the Swedish carbon price is ''levied primarily on oil, coal, natural gas and petrol''.

Switzerland ''covers coal, oil and natural gas''.  The report is littered with similar caveats for other countries.

That's why the Productivity Commission highlighted in its Carbon Emission Policies in Key Economies report last May that ''most countries have adopted sector-specific policies''.

And ''no country currently imposes an economy-wide tax on greenhouse gas emissions or has in place an economy-wide ETS''.

We know from the government's national greenhouse and energy reporting scheme data that lists our highest emitting companies that the tax will include energy companies.

But it will also include food and grocery manufacturers, alcohol companies and healthcare providers, to name a few.

The Gillard government's decision to exclude firms that significantly contribute to the production of petrol ensures Australia's scheme falls short of being completely economy-wide.

But it's certainly the closest national scheme to being so.

Similarly, the report doesn't include data from other large emitters.  Carbon price data from key competitor countries such as Chile and China are excluded.  So is the carbon price from the carbon-backsliding Canadians.

And the carbon price for the US is misrepresented by data from California alone.

In making the claim that Australia is ''beginning a phase of catch-up'' through its carbon tax the Climate Institute is comparing apples with bananas, oranges, cucumbers and pumpkins.

And it's not the first time.

In August last year documents released under Freedom of Information showed a government-funded, Climate Institute-commissioned report used non-comparable methodology.  As a result, China's carbon price was reported to be $8.08 a tonne to Australia's $2.34.

Yet the documents showed the Climate Change Department questioned the methodology and concluded if it were consistent that China's carbon price would be only $1.78 a tonne.

Because cutting greenhouse gases is a global challenge, what is happening internationally matters.  The Climate Institute's report also provides a rosy analysis that ''the outcomes of the Durban climate change meeting at the end of 2011 represented real progress''.

It's true a timetable for the conclusion of negotiations of a new agreement that includes all major emitters was set for 2015 for an operational agreement by 2020.

But most of the detail that led to the spectacular implosion for the Copenhagen deadline remains unresolved.  Whether these talks succeed or fail will ultimately decide whether the global economy is carbon-constrained.  Without constraint the incentive to cut emissions won't exist.

Accepting constraint as an article of faith may help advocates argue Australia isn't prepared and is undermining its future prosperity, but it misrepresents the nature of the challenge.

There's no dispute in a carbon-constrained global economy it would be extremely expensive to cut emissions in Australia.

We are an economy built off the back of cheap fossil fuels.  And fossil fuels dominate Australia's emissions profile.  That makes the cost of switching to renewable energy substantially greater than in many other countries.

As the Productivity Commission's report found, we already have substantial subsidies for renewable electricity and it isn't economically viable.

The carbon tax necessary to shift from coal to solar power would be about $250 a tonne.  And it wouldn't even be baseload.

It's precisely for that reason that the Gillard government is right to allow for up to half of all emissions reduction permits to be purchased overseas into its trading scheme beginning in 2015.  Arguably, they should allow all to be purchased abroad.  With comprehensive international emissions trading, emissions reduction would almost always take place in Australia last.  This is why, even with an honest and comparable carbon price analysis, Australia imposing one of the world's highest and broadest carbon taxes will be so economically damaging.

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We're bombarded with swearing but who #*@%*! cares?

''I like swearing;  I think it's very healthy,'' Ewan McGregor told a celebrity gossip magazine last week.  Good for Ewan.  He could have added:  swearing is so common it's mundane.  It can make you more persuasive.  And it's less offensive now than ever.

No one apparently cared when actor Jean Dujardin yelled ''putain!'' in his 2012 Oscar acceptance speech.  ''Putain'' literally translates as ''whore'' but means ''f--- yeah!''.  And remember when the Gillard camp released that video of Kevin Rudd swearing before the federal leadership spill?  Nobody could even pretend to be offended.  How refreshing.  How honest.  But really, any other stance would have been rank hypocrisy.

The leading scholarly authority on swearing, US psychologist Timothy Jay, estimated in a 2009 paper ''The Utility and Ubiquity of Taboo Words'' that the average speaker of English utters around 80 to 90 swear words every day.  That's only about half as frequent as we use first person plural pronouns such as ''we'' and ''us''.

Certainly, the offensiveness of swear words varies.  Jay found 10 words dominate.  Some of them are gentle:  ''goddamn'' and ''sucks''.  But the F-word is both the most common and the most extreme in the top 10.  So it's entirely possible the former foreign affairs minister swears less than most people do.

Yet we seem to think people are swearing more often, and more harshly.  It isn't true.  There's no statistical evidence to suggest swearing has increased over the past few decades.  Studies of recorded speech demonstrate swearing has remained steady and we're using the same words we did 30 years ago.

But swearing is more public, more frequent in film, television, on radio and in print.  It's been normalised.  The prevalence of swearing hasn't changed, but its cultural status has.

The result, as a New South Wales magistrate noted in a ruling in 2002, is that the F-word ''has lost much of its punch''.

We don't blink at French Connection UK's acronym ''FCUK''.  The name of the new snack ''Nuckin Futs'', approved by Australia's trademarks examiner in January, is playful rather than obscene.  If profanity can sell nibbles and knitwear, can it be considered profane at all?

This is all surely a good thing.  More swearing doesn't mean society is becoming less polite.

One can be deeply racist or sexist or homophobic without swearing.  On the other hand, we have all met friendly and well-intentioned people who pepper their speech with profanity.  The former (racism, sexism) has become rightly unacceptable, and the latter is becoming innocuous.  This is great.  Any moral compass that treats mere words on par with malicious intentions is a badly calibrated one.  That's why the N-word is now much more offensive than the F-word — it indicates racist intentions.

Traditionally, swearing has also been governed by a double standard:  men would curse freely among other men but bite their tongue around women out of patronising respect.  Gender equality has eroded that anachronism.

Nor does the ''think of the children'' mindset offer any clear restraint on profanity.

As Ewan McGregor said:  ''I like hearing my kids swear, and I'll pretend they're not allowed to ... but actually I think it's quite funny.''

McGregor shouldn't bother pretending.  Jay points to findings that parental sanctions have no effect on how much a child swears when they reach adulthood.  The scholarly evidence tells us children learn rude words from kids, not adults.

Last year, research psychologists established that swearing can help with pain relief.  A 2006 study published in the journal Social Influence even found swearing ''significantly increased'' the persuasiveness of an argument.  As the authors wrote, ''the use of obscenity could make a credible speaker appear more human''.

When the Baillieu government introduced on-the-spot fines for swearing in June last year, there was an understandable outcry.  Almost everybody swears, and swears a lot.  Punishing extremely common language is obviously a bad idea.  Something so banal should not be a police matter.  Even prime ministers do it, after all.

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Government must live within its means

The Latin phrase quis custodiet ipsos custodes used to be the most important idea in our democracy.

Regrettably those days are long gone.  These days it is merda taurorum animas conturbit.  Nowhere is this principle more apt than in the area of taxation.

Government in a modern democracy is quite large.  By that I mean government spends a substantial amount of the income of working Australians.  Where it can't or won't spend government regulates — forcing people to spend their own money on government preferences.

This financial year the Government plans to spend $370 thousand-million.  Of that amount it expects to raise $336 thousand-million, the rest will have to borrowed and paid back out of future tax receipts.

Somebody, somewhere, at some time, has had to work to earn each and every single one of those dollars.  They then give up those dollars to the Government.  It is generally the case that every dollar anyone receives from the Government has been earned by somebody else, and taken from that person.  Of course, with churning it is the case that often that ''someone else'' is a former, or future, version of themself.

So the first point to understand about taxation is that the Government has taken money away from somebody.

Now there might be good reason why taxation is a good idea.  After all, civilisation doesn't come cheap — nor should it.  Somebody has to pay the salaries of the soldiers who defend our borders and the police who protect our lives and limbs.  The prisons that house criminals are a legitimate government expense too.

All reasonable people would agree that some government expenditure is legitimate and should be financed by taxation.

At this point, however, public debate degenerates.  Government very often expands well beyond prudent levels.  It often engages in expenditure best left to individuals and voluntary associations.

One way government expands is by masking the true costs of government.  For example, we might hear that Australia is a low-tax economy.  On average that might even be true — but Australia operates a highly progressive tax system.  A hypothetical average doesn't capture the actual tax burden that taxpayers endure.

So government engages in an activity known as fiscal illusion — where the costs of taxation are obscured and the benefits of government spending over-sold.  All this allows the Government to expand beyond its optimal size and raise more taxation than is actually necessary.

One particularly seductive mechanism is the perversion of language.  The Government describes an increase in taxation as a ''saving''.  Tax cuts are described as ''spending''.  Failure to introduce a tax is described as ''tax cuts''.  Not introducing a tax might also be described as a ''subsidy''.  Here we have the case of merda taurorum animas conturbit.

This terminology is very misleading and is, basically, dishonest.  Yet there are very few individuals who will call out those politicians who engage in this behaviour.

I'm not actually having a go at Wayne Swan — he'll keep for later.  I'm having a go at Malcolm Turnbull.  In a piece published in the Business Spectator this week he made the argument for a sovereign wealth fund.  He set up the hypothetical situation of a future government confronted by a budget surplus.  What to do with the money?  (Answer:  Cut taxes).

Turnbull suggests, quite correctly, that the Government would likely fritter the money away.  His solution is to establish a sovereign wealth fund providing ministers with a savings objective.  I have argued against this idea before;  quite frankly if Turnbull and his fellow ministers don't trust themselves to deal with a budget surplus why do they trust a future government (presumably of the other party) to be any better?  This is the classic quis custodiet ipsos custodes problem.

So far, so good.  But Turnbull went beyond arguing for a sovereign wealth fund.  He suggested that tax cuts were government spending and without a fund ''the arguments for 'giving us our money back' are pretty compelling in a political sense''.

The argument for ''giving us our money back'' must always be pretty compelling.

The counter-argument, however, is that some tax cuts are ''unsustainable''.  This means that government is not raising enough money to pay for required government spending.  That is a theoretical proposition.  It also begs the question of ''required government spending''.  But it has a good pedigree.  Peter Costello used that logic in 2007.

''Our tax system exists to fund the decent services in health, education, aged care, and other services that Australians legitimately expect and are entitled to receive.  If after we provide for those services, invest for the future, and balance our budget, we can reduce the tax burden, we should do so.''

In other words cutting taxes was a fourth-order objective after the Howard government had run out of ideas and things to spend money on.  It wasn't good enough then, and it's not good enough now.

What happens in the presence of a soft budget constraint is that government finds ways of increasing expenditure.  To be fair there are always good causes that tug at our heart strings.  As Malcolm Turnbull indicates there are bad causes too.  On that we are entirely in agreement.

Cutting taxes, cutting spending, reducing regulation;  frankly getting out of the way and letting the private sector generate wealth and opportunity must be a first order objective of any government.  Government must live within its means.  That implies that it should tailor expenditure to revenues and not vice versa.  There cannot be unsustainable tax cuts, only unsustainable spending.

A government that lives with that philosophy is likely to spend our money wisely.

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Foreign investment and the whims of politicians

In September 2009, economics officials from the US embassy sat down with the then-head of Australia's Foreign Investment Review Board (FIRB), Patrick Colmer.

The record of this meeting is one of the gems in the WikiLeaks diplomatic cables.  Colmer confirmed to the embassy that the Government had changed the foreign investment guidelines in order to address ''growing concerns'' about Chinese investment in Australia.

New guidelines introduced in the second half of 2009 relaxed the mandatory review threshold to make small private investments easier.  But, the US embassy reported back to the State Department, by excluding state-owned businesses from the relaxation, the policy was specifically designed to ''pose new disincentives for larger-scale Chinese Investments''.

This, of course, was contrary to everything the Government was saying at the time.

The Trade Minister, Treasurer, and Foreign Minister had lined up to claim the changes had nothing to do with China (perhaps they could have let the FIRB know).

So we shouldn't take on face value the comments made by Craig Emerson in The Australian on Monday, arguing that his Government is eager to attract more Chinese investment.

After the post-Rudd reshuffle, Emerson is now Minister for Trade and Competitiveness.  But the FIRB reports to the Treasurer, not the Competitiveness Minister (whatever the hell that is).  Furthermore, the Treasurer has a veto over the FIRB's decisions:  he can, and does, ban investments even when the FIRB has recommended they be approved.

In other words, if Emerson wants to open Australia up to Chinese investment he won't have to convince readers of The Australian, but Wayne Swan, who sets the rules.

Well, ''rules'' is a generous word.  The foreign investment guidelines are infamously inscrutable:  Stephen Kirchner of the Centre for Independent Studies had to submit an FOI just to obtain a copy of a speech that merely suggested how the FIRB would treat investments.  As Kirchner wrote in February 2010, ''Foreign investors cannot be expected to understand a policy that the government itself cannot properly articulate.''

The foreign investment mess is a deliberate creation of government.  If Emerson is able to elbow his way into the FIRB, convince his colleagues that investment — from China or anywhere else — is to be greeted not resisted, and then clean up the mess, that would be a great thing.

But don't hold your breath.  Emerson told ABC radio on Monday he was ''not so much in the camp of easing'' foreign investment regulations.

So while talking about how you want foreigners to put their money in Australia is lovely, allowing them to do so would be better.

There is no reason to believe that foreign investment is a threat to Australia's food or resource security, our sovereignty, or contrary to our national interest.  Even when that investment is made by firms which are state owned.

Investors in Australia have to obey Australian law.  And we have a great deal of law, covering everything from competition to environmental standards, all which treats investors equally, regardless of their nationality.  That really should be all there is to it.

Every other part of this debate quickly descends into absurd hypotheticals about World War III, outright xenophobia, or trite meaninglessness.  People who talk about ''protecting food security'' should be forced to explain how limiting access to foreign capital would do anything but harm the agriculture sector.

Yes, foreigners may not prioritise Australia's ''national interest'' when making business decisions.  But so what?  Neither will Australians.  The great thing about market capitalism is that they don't have to.  As Adam Smith said, ''It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest''.  The pressures of competition will make sure resources are put to their most productive use.

And (it seems strange to have to write this) limiting foreign investment means the Australian economy gets less money.  Australian businesses that have to sell up will have fewer potential buyers, lowering the final sale price.

But to be fair, the Government's doublethink on foreign investment is miles better than the outright hostility of the Coalition.

The Opposition wants agriculture to be considered as ''sensitive'' a sector as defence and the media — and face even greater investment restrictions as a result.  This has been an over-riding obsession of the Nationals, and they seem to have been given carte blanche to write the Coalition's agricultural policy.

For all the contradictions of the Government on foreign investment, the Opposition's policy would be far, far worse — seriously shutting Australian agriculture off from Asian capital.

Few other areas of public policy are as governed by the whims of politicians as foreign investment approvals.  If Craig Emerson would personally like to liberalise it:  brilliant.  But he'll have to look at the obstacles within his own Government to do so.

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Score one for retail super

Even a casual observer of the superannuation sector would notice huge tension and jockeying for position between the industry and retail funds.  That tension has now stepped up a very big notch.

Industry funds are primarily run by unions and hold around $240 billion of workers' money.  They consistently claim they operate with lower fees, offering higher returns than the retail funds.  The retail funds have about $350 billion under management.

With the claim and counter claim around comparative performance the issue that's always struck me is the near zero transparency offered by the funds.  I've been a consistent critic of both the government and the funds on this issue.

That criticism is heavily based on evidence from my 2010 report.  It's an eye opener and worth a read.  For example, the alleged comparative performance of the funds is based on tables produced by the Australian Prudential Regulation Authority.  But it transpires that APRA only reports what the funds report to APRA.  No verification of performance claims is done by APRA.

My report demonstrates that there's near no capacity to investigate and verify performance because transparency and disclosure is so poor.  I rate transparency between funds, with industry funds performing much worse on average than retail funds.

The problem of performance truth is demonstrated in a simple example.  A young fellow currently working overseas showed me his industry fund statement for the last six months.  As he's not having compulsory contributions to his account made, its true performance is apparent.  With an opening balance of $2,775, he's investment earned $22.53 but $81 in fees came out.

This 23-year-old says the negative trend has been consistent.  It's no wonder he thinks the entire superannuation scheme is a con.  In some respects it could almost appear like a giant Ponzi scheme.  It only looks financially viable while workers are forced to make contributions.  But who knows the truth?  The facts are hidden by limited disclosure!

The poor transparency was examined in Cooper Review into superannuation.  The 2010 report recommended major disclosure requirements be imposed on the funds.  This should have been easy to implement through legislative disclosure requirements.

But the Gillard government, under then Assistant Treasurer Bill Shorten, responded with ''supports improved disclosure requirements but will consult with relevant stakeholders on design and implementation issues''.  Now approaching two years on, nothing has been done on the government's side but talk.  Meanwhile transparency and disclosure remain appallingly low.

On this, the Gillard government is exposed to accusations that it's compromised by its close association with unions that have vested interests in and control of industry funds.  In many respects the broad Labor machine looks like it has become a powerful new establishment network in Australia.  It's an integrated grouping involving political, industrial (union), legal and now (most importantly) financial power through the industry funds.

This has been partly exposed in Senate hearings detailing (now withdrawn) court proceedings against ex-Electrical Trades Union boss, Bernie Riordon.  According to the hearings Riordon, who's recently been appointed as a Commissioner of Fair Work Australia, received in excess of $1 million from multiply directorships of superannuation and related funds.

This dovetails perhaps with the long-running concerns over the management and performance of MTAA Super, now chaired by ex-Victorian Labor Premier John Brumby.  Brumby was brought in, it seems, to tighten up MTAA.

What's observable is an intricate Labor web around industry superannuation funds.  Refer again to my report for more detail.

This is where the retail superannuation funds are in such an interesting spot.  The retail funds threaten the financial muscle of this Labor establishment.  If workers shift their money from industry funds to retail funds the Labor establishment's financial power diminishes.  Hence industry funds need to maintain the impression that they offer lower fees and higher returns even if the experiences of our 23-year-old, for example, could call this into question.

But the retail funds have taken a sudden, unexpected and bold move.  They're not waiting for the Gillard government to require disclosure.  Through their association, the Financial Services Council, they've announced that they will impose on themselves new high disclosure requirements approaching that required of publicly listed companies.

It's welcome news.  This includes disclosure of directors and senior management salaries, independent chairs and prevention of holding multiple directorships across different funds.  It's not clear if the retails funds are implementing all of the Cooper disclosure requirements but it's a big step.

What the retail funds may perhaps now be able to argue is that they offer a ''safer' investment environment than industry funds.  If the retail funds go as far as fully implementing Cooper's disclosure recommendations they'd be able to argue that their claims of returns on investment are fully open to public scrutiny.  This is something the industry funds would have difficulty matching.

The retails funds initiative creates a dilemma for the Gillard government.  If there was any thought of creating the appearance of superannuation disclosure, without substance, this is now difficult.

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Finding a focus for disability policy reform efforts

Over the past 12 months the Gillard government has attempted to improve its opinion poll ratings, in part by advocating policies to appeal to core Labor values.  The proposal to establish a National Disability Insurance Scheme is a case in point.

The government is not only hoping that the NDIS would satisfy Labor's true believers by selling it, as Prime Minister Julia Gillard has, as ''a great Labor reform in the tradition of Medicare''.  The NDIS might also prove attractive to people not firmly wedded to any political party, but whose votes could be won by promises of future benefits for themselves, their relatives or somebody else they know with a disability.

The Gillard government is also running hard on the NDIS to pressure the Coalition into a political position of agreement on the need to extend federal involvement in disability support.

The NDIS would subsidise packages of care, including aids and appliances, personal care and community access support, needed by those people with a significant disability to enhance their social and economic participation and, through it, their sense of self-worth and dignity.

The proposed system either pays for care packages from approved providers selected on behalf of disabled people, or directly provides funds for those willing and able to choose their own care.  The idea is to empower people with disabilities with an increasing choice of service providers, and harnessing such choices by allowing funding entitlements to follow the person.

I advocated this disabilities voucher model in 2006, and is in line with similar proposals in other policy areas such as education, health care and welfare services.

Critics of the NDIS have focused attention on the significant price tag, of up to $14 billion in gross terms by 2018-19, including for the establishment of a government agency to administer the scheme.  This funding ask is more than double the amount currently allocated by commonwealth and state governments towards specialist support services.

Coughing up the funds to implement the NDIS proposal is problematic in an Australian welfare state that already over-reaches in its attempts to increasingly cater to the whims of middle and upper-income earners from cradle to grave.  In its July 2011 report advocating the NDIS the Productivity Commission suggested one way to fix the affordability problem is for the Commonwealth to fund the scheme and the states reduce their taxes to the amount of disability funding they surrender to the Commonwealth.  With the states having already resisted this idea, expect the Commonwealth to make a future play at clawing back some of the states' GST revenues to fund the disability scheme.

In making the case for a Commonwealth-managed NDIS, the commission has advocated a centralist solution that could be disadvantageous to the ultimate interests of people with disabilities.  And this is not only due to the less than flattering record of successive Commonwealth governments in managing big bang reforms in service delivery, an area in which they lack expertise compared with the states.

While the commission joined with disability advocates in deriding interstate policy differences as a form of ''fragmentation'', disability support reforms enacted by individual states are already providing important lessons in policy experimentation for other jurisdictions to observe and act upon.

By most accounts Western Australia and Victoria are the most advanced on the path to self-directed funding, whereby people with disabilities are allocated a budget to then expend on care packages relevant to their needs.

Although progress by other states in promoting greater consumer autonomy over the use of public funds has varied, the NSW government has responded to longstanding criticisms of bureaucratically-driven block funding in that state by promising individualised funding packages for people with disabilities.

Competitive federalism is doing its work in spreading the benefits of good policies across the country, and confining the consequences of bad policies in fewer jurisdictions over time, without recourse to a national NDIS.  This is not to say that existing state-based systems are perfect;  far from it.  One criticism which drenched the pages of the commission's NDIS report concerned unmet demands, and the insidious effects of politicised resource allocation, leaving the disabled on supported accommodation and other waiting lists.

Apart from urging state government stragglers to voucherise their own funding arrangements, in effect creating state versions of the NDIS, a policy conversation needs to be had about even greater non-government sector involvement, including by the private sector, in service delivery.

More non-governmental involvement will be important in the future, as it can help transcend the states' budget limitations and provide a far more responsive system meeting unfulfilled needs.

The participation of more private and-not-for-profit service deliverers can best be facilitated through a process of crowding in, including through a substantial downsizing of regulatory obligations imposed on providers.  A smaller, better-focused welfare state will also assist by providing room for non-government providers to provide extra disability support services, and encourage more philanthropic contributions to the sector.  It is the twin pillars of state funding reform and additional non-government service provision that should be the focus of disability policy reform efforts, rather than the unquestioning acceptance of a social policy power grab by the federal government in the name of some of our most vulnerable community members.

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Should packaged alcohol display health warnings?

Mandated alcohol warning labels don't work and perpetuate the government-sponsored drift away from individual choice and responsibility that fuels alcohol abuse.

Our society is built on principles protecting our rights to choose our own life.  That requires us to accept responsibility for our actions.  Every time the government steps in we promote a nanny state that infantilises individuals.

Compromise on these principles requires evidence that good intentions will work.  Alcohol warning labels don't fit the bill.

We all know there are health consequences from heavy drinking.

People choose to drink alcohol;  and sometimes it is to the point of abuse to get drunk.

If that is someone's objective, they won't slow down from a warning label.

The objective of such regulations is to de-normalise consumption, placing government preference above individual choice.

It is straight out of the regulatory playbook targeted at another product disliked by public health campaigners.

Publicly released sample alcohol warning labels include:  ''drinking alcohol increases your risk of developing cancer'' and ''drinking alcohol damages the young developing brain''.

The parallels are clear, despite contrary protests of campaigners.

On ABC1's Lateline, a public health campaigner, Michael Daube, claimed his push for text-based alcohol warning labels was ''a mile away from the kind of grisly warnings that go with cigarette packs''.  He continued:  'These are informative warnings, but they're not designed to put people off drinking completely.''

These statements are misleading and, as president of the Australian Council on Smoking and Health, Daube knows it.

As the shock value of text-based labels reduced, their graphic nature increased, coupled with other tight regulations.  We can expect the same for alcohol.

Warning labels are only one more step down the nanny state path of government directing behaviour.

No one disputes that alcohol consumption has consequences.  We've known that for at least 2000 years.  Anyone who has had a few glasses of wine within an hour has figured that out.

The right direction is to create a culture of responsibility where people are free to choose, make mistakes and learn from them — not look to government for permission when it fosters a culture of us not taking responsibility.

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A failure to defend liberty

Last Friday one of the most able and intelligent people in the federal Parliament faced a test of his policy and political judgment.  He failed.  This time last week the Gillard government released the report of the Independent Inquiry into Media and Media Regulation.

The inquiry was demanded by Bob Brown and the Greens as part of their campaign against News Ltd.  It was chaired by retired judge Ray Finkelstein.

To make the media more ''accountable'' and impose ''professional standards'', Finkelstein recommended a News Media Council to license the press and censor news reporting and political commentary.  The council would have a judge or lawyer as its chairman and would comprise 20 members, half from the public and half nominated by media companies and the journalists' union.

The council could order offending articles to be altered or permanently censored.  There would be no appeal.  Disobeying the council could result in a fine or imprisonment.

The jurisdiction of the News Media Council would extend to practically any opinion on current affairs expressed in print or online.  A blog site visited by literally one or two people a day would fall within the ambit of the council.

Finkelstein's recommendations are profoundly illiberal and undemocratic.

They are the most serious assault on the liberties of Australians since Robert Menzies tried to ban the Communist Party in 1949.  It is almost incredible that Finkelstein, who as a Federal Court judge once adjudicated on the lives of citizens according to the laws of a liberal democracy, could conceive of such a regime to control freedom of speech.

Finkelstein's ideological position is not hard to find.  It's in paragraph 4.10 of his report.  He thinks a council should control speech in Australia because most people are too dumb or ignorant to decide for themselves about what they see and hear and read in the media.

In response to the claim from News Ltd's John Hartigan that ultimately readers ''were capable of making up their own minds'' about bias in the media, Finkelstein writes, ''often, however, readers are not in a position to make an appropriately informed judgment''.

This is intellectual arrogance at its most breathtaking.  And it's a great argument against democracy.  If, as Finkelstein claims, people aren't smart enough to decide for themselves the merits of what they see in the media then they're certainly not smart enough to decide who to vote for.

This is the totalitarian fallacy:  don't let the people decide (because the people are too stupid), let judges and academics decide for them.

The Finkelstein report overturns two centuries of Western political philosophy.  Since the French Revolution, the left have fought for the right of every adult regardless of class, education, or background to participate in politics and political debate.  In Australia in 2012, Finkelstein and the Greens believe access to the media should be restricted to those who are ''balanced and responsible''.

The left no longer demands ''free'' speech — it wants ''balanced and responsible'' speech.  And that's how we get to Malcolm Turnbull.  Labor's media minister, Stephen Conroy, had the decency not to comment on the report.

Meanwhile Turnbull issued a meandering and mealy-mouthed statement that left open the possibility of the Coalition supporting some or all of Finkelstein's recommendations.

Turnbull said the report ''deserves careful study and community discussion''.  No it does not.

The report is bad from beginning to end and should be completely and unambiguously rejected by the Coalition.

If you expected anyone to stand up for free speech and against censorship it would be Malcolm Turnbull.  After all, he made his name fighting the British government's censorship of the book Spycatcher, and he loudly defended the ''artistic freedom'' of Bill Henson.

Turnbull baulked at upholding a core liberal (and Liberal Party) value.  While on the one hand he acknowledged the importance of free speech, he also said, ''There is also a vital right, or interest, of the public to timely, accurate information on matters of public interest.  It has to be said that the legal arrangements at present do not adequately advance that interest.''

It looks suspiciously like Turnbull is happy to contemplate the possibility of a News Media Council deciding what is ''timely'', what is ''accurate'', and what is in the ''public interest''.

Turnbull's equivocation on freedom of speech is not good enough.  Why he is equivocating is a mystery.  Freedom of speech is not something on which Turnbull and the Coalition can have a bob each way.

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