Keep our liberty to defeat terrorism

In the wake of recent terrorism atrocities around the world, we should resist the temptation to dilute our liberties for the sake of all-out security.

The terror attacks in France and other locations, such as Lebanon and Mali, serve as a shockingly brutal reminder that even if the incidence of violence is generally in long-term decline, it is not yet vanquished.

Psychologist Steven Pinker established in his compelling book, The Better Angels of Our Nature, a reduction in interstate conflicts and homicide, accompanied by a more humane treatment of wrongdoers in the form of declining capital punishment and torture.

We are also often reminded that the probability of death as a result of a terrorist act remains small, far outweighed by more common causes of fatalities such as motor vehicle accidents, diseases, and other factors.

It is the observed historical trend towards pacifism itself which partly explains why contraindicating acts of terror, aside from their sheer mindlessness and scale of destruction, create such an affront to the senses of all decent-minded and respectful peoples.

Of course, the point here is not to diminish the idea that terrorism is a problem, and equally we shouldn't ignore the pain and suffering of those mourning for their perished relatives, friends, and acquaintances, wherever they may have been, in recent times.

The critical matter is how to address this issue in ways which embody a sense of proportionality in response, preventing those who seek to maim and kill innocents while not extinguishing fundamental liberties and rights which are conducive to happy, prosperous, and flourishing lives.

After all, during these times that clarion calls for greater security are magnified but which, if fulfilled, could risk liberties and in the process validate the terrorist's warped mindset that the building blocks of modernity are somehow disposable.

In response to the Paris attacks the Hollande government declared a state of emergency within France for the first time since World War II, and swiftly intensified its rounds of air strikes against Islamic State targets in Syria, but this is by no means the limits of what governments have done in response to terrorist threats.

A massive national security state has emerged in Australia, Europe, the United States and elsewhere since the September 11, 2001, attacks, and is characterised by extensive physical and online surveillance of practically everyone's daily movements, and the dilution of time-tested criminal and judicial standards consistent with the rule of law.

Significant amounts of blood and treasure have been lost in war campaigns in Afghanistan and Iraq with poorly defined policy objectives, and there is now some talk of Western troops making similar incursions into Syrian territory to fight a hardened, but nonetheless likely elusive, adversary.

It does remain an open question to what extent this breathtaking government expansion has suppressed potentially additional terrorist acts, but we shouldn't pretend that the measures described here have made us anything but less free.

A central issue in the policy debate about addressing terrorism, as in all other debates for that matter, is that coercive powers exercised by government should be proportionate to the extent of the problem being addressed and the policy objectives attempted to be achieved.

It is arguable if much stricter controls over movement, either internally or with respect to migration, or the mass monitoring of communications by all and sundry are the most efficient regulatory responses guaranteeing liberty for the vast bulk of us who have no interest but to go about our daily, law-abiding business.

Even during periods when perceptions of physical threats appear amplified, it remains essential to carefully scrutinise any policy proposal which empower some group of people, such as intelligence agents and law enforcement officials, to use force or exude controls over all others.

There is, thankfully, a certain civil libertarian strain of scepticism within the Australian community when it comes to the effectiveness of more stringent national security policies to repel terrorist threats, but scepticism could healthily extend towards other policy areas caught in the anti-terror dragnet.

Important aspects of economic freedom have come under threat over the past decade or so, with capital flows being impeded on grounds of countering money laundering and terrorism financing, while other activities such as aviation travel and merchandise trade are getting bogged down by repeated security checks.

We should guard carefully against restrictions upon economic activities in the Western world which impede opportunities for people, including migrants, to improve their own lives, and that of their loved ones, through upward income mobility.

And although it would be depressingly obvious that war-torn countries suffer from relatively small degrees of economic freedom, what is probably less understood in advanced countries is that the various nuances of Arabic socialism in the Middle East greatly depress economic opportunities by entrenching political patronage.

All this risks ever doing, sadly, is inflame tensions in what is already a volatile region.

Terrorist activity that aims to maim and kill innocent people eating at a restaurant, enjoying live music, staying in paid accommodation, or flying on an aircraft is an outrageous affront against the inherent rights of the individual to act, to choose, and to be themselves.

Within this, terrorism tries to stymie the fundamental liberal ethics that everybody should be free to do what they think is right for them, as long as this doesn't interfere with the equal rights of others.

Scholars such as Pinker illustrate that the historical, though uneven, retreat in violence is powerfully attributed to the growing toleration associated with the "emancipation sequence" of extending individual liberties and rights to ever more people.

It is a mistake to think the emancipation sequence is limited to Western societies, since the desire for economic and social liberalisation, in opposition to guises of authority sacred and profane, are demonstrably universal values shared by all people regardless of their background.

A determination to live the ideals of liberty each and every day is, ultimately, the best counter against the malcontents who want their own beliefs and values, by dint of violence, to hierarchically trump those held by other people.

In that spirit we should fearlessly speak our minds, walk and travel wherever we want to, indulge in our entertainments, love who we wish to love, and trade with whomever we wish to make a deal.

To put it in another way, the key to vanquishing terrorism and other forms of violence over the long haul will be through liberty itself, in all its glorious manifestations great and small.

Tony Abbott talks a good game ... when he's not in power

Now that he's a backbencher, Tony Abbott is making some good points about how to defeat Islamist terrorism.  When he delivered the annual Margaret Thatcher Lecture in London last month, he said two things were required to defeat terrorism.

The first was effective military action against its perpetrators.  The second was a renewed cultural self-confidence "to stand up for ourselves and for the universal decencies of mankind".

Unfortunately as prime minister, Abbott only ever acted on the first of those two things.  He enthusiastically deployed Australian military forces overseas while at the same time creating the apparatus of unprecedented government surveillance of the country's citizens.

But when it came to the battle of ideas, he vacated the field.  Freedom of speech is a fundamental tenet of liberal democracy.  It is what Islamists abhor.  Yet Abbott could never bring himself to fight to implement his election promise to repeal the legislation that makes it unlawful to insult or offend someone on the basis of their race.

Abbott's failure is also the Liberal Party's failure.  His approach is not unrepresentative of the vast bulk of Liberal MPs.  In August, when Abbott was still PM, Coalition MPs debated gay marriage for 5½ hours.  That's fine — to many people it is an important issue.

The absence of any similar sort of debate on freedom of speech reveals a great deal about the priorities of the current crop of Coalition parliamentarians.

The British author, former member of Hizb ut-Tahrir, and candidate for the Liberal Democrats at the last British election, Maajid Nawaz, puts it as, "... if liberty means anything at all, it is the right to express oneself without being killed for it.  It follows, therefore, that any liberal naturally concerned with a fair society must be the first to openly defend against the erosion of free speech, especially when deceptively done in the name of minority groups".

Over their party's history, many Liberals have been more comfortable advocating the resort to force in foreign lands in place of using the power of argument at home.

At the press conference to repudiate his election promise Abbott said his attempted reform was a "needless complication" in the government's relationship with the Muslim community.  Sadly, freedom of speech is not a "needless complication" for the Palestinian artist Ashraf Fayadh who last week was sentenced to death in Saudi Arabia for apostasy.

By privileging the views of Muslims the way he did, Abbott acknowledged they deserve to be treated differently from other Australians and thus abandoning the idea that all citizens should be equal under the law.

BATTLE OF IDEAS

Abbott's position was actually out of step with community attitudes.  A recent survey from the Pew Research Centre revealed 56 per cent of Australians believe people should be free to express an opinion, even if it's offensive to minority groups.

The current Prime Minister has "no plans ... at all" to make good on Abbott's broken election promise.

It's not just on freedom of speech that the Coalition is refusing to engage in the battle of ideas.  All federal and state Coalition education ministers support the content of the national curriculum.

Built as it is on the premise that all cultures are equal, the national curriculum is unlikely to convince marginalised youths from particular ethnic and religious communities that liberal democracy is better than the alternatives.

It's no surprise that a 2014 a poll by the Lowy Institute found only 42 per cent of Australians between 18 and 29 years of age believed "democracy is preferable to any other kind of government".

Over recent years, the political left in Australia has successfully intimidated the Liberal Party into not fighting "the culture wars".  Too many Liberal MPs have convinced themselves "the culture wars" are a sideshow of interest only to ideological zealots.

However, that's not what the left thinks.  Which is why the left puts so much effort into winning the culture wars.  In the end, culture is everything, and in any case "the culture wars" is simply another term for "the battle of ideas".

In the light of what is happening around the world, it's relevant to ask who in today's Liberal Party is committed to winning that battle.

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Why politicians ride the wave of anti-bank populism

Australia's banks are launching a new campaign to educate policymakers and regulators about the ins and outs of their business, the Australian Financial Review reported on Monday.

The banks feel defensive since the debate over the Future of Financial Advice (FOFA) reforms, in which they were depicted as semi-corrupt fraudsters preying on the elderly and uninformed, and the recent outrage over mortgage interest rate rises.

Good luck to them.  This seems a more productive use of their public relations dollar than campaigns on climate change.

But if this campaign breaks the deep connection between Australian politics and anti-bank populism, it will be the first to do so in 12 decades.

The banking crisis of 1893 set in train more than a century of populist political demagoguery about banking.

Our modern Labor mythologists sometimes skip over the comically propagandistic "money power" doctrine that formed such a large part of Labor politics in the first half of the 20th century.  According to money power ideologists, a cabal of bankers — British bankers, Jewish bankers — owned every major industry and asset and controlled Australian politics.

The money power doctrine was not an obscure theory held only at the margins of Australian politics.

Jack Lang, the former NSW premier and Paul Keating's mentor, was a money power conspiracy theorist.

John Curtin's mentor, the Scullin government minister Frank Anstey, was the author of an anti-banking, anti-Semitic book called the Kingdom of Shylock (have a look at the digitised version, if you want to be stunned at how overtly racist Australian labour thought it could be).

Driven by this sort of thinking, in 1945 Curtin government introduced burdensome and harmful regulatory controls on Australian banking that slowed economic development and pushed ordinary borrowers into the shadow banking sector for decades.

While it is true that some economists excited by the possibilities of the new Keynesian economic thinking had urged Labor to introduce banking restrictions, it was the crude money power populism that led to the most harmful of those controls:  caps on interest rates and an outright ban on foreign banks in Australia.

Anti-bank hostility even played a role in the deregulation of banking four decades later.  When Keating ended the ban on foreign banks in 1985, he did so because he believed it would undercut the "drones" of the Australian banking industry.  The banks had been made lazy and powerful because of the protection his Labor predecessors had granted to them.

When the Reserve Bank decided to break the back of inflation in the early 1990s, exacerbating on one of the worst economic downturns in Australian history, Keating directed popular anger towards the banks.

A 1991 inquiry into banks — A Pocket Full of Change — encouraged people to send in their complaints with bank services, interest rates, customer relations.  Anything they could think of.  Nearly a 1000 submissions and complaints were sent in.  This distracted attention from the government decisions that caused the crisis in the first place.

A Pocket Full of Change is largely forgotten now.  But in retrospect it was very significant.

Our semi-regular freak-out about whether banks are adequately passing on Reserve Bank interest rate cuts can be traced back to Keating's decision to recast old money power rhetoric in a new guise:  to present banks and bankers as uniquely profit hungry and exploitative, and to do so as cover for government policy.

Hence the recent kerfuffle about the major banks' decision to increase mortgage rates independent of the Reserve Bank.

The Reserve Bank's cash rate has been held steady at 2 per cent since May 2015.  But in October the big four banks decided to increase the interest rates they charged on variable mortgages.  Westpac went first, and the rest followed.  Bill Shorten thinks that this increase was "just corporate greed".

But the rate increases are explicitly in response to a policy decision by the Australian Prudential Regulatory Authority that the banks should hold more capital against mortgages.  Of course the banks were going to pass the cost of that regulatory requirement onto consumers.

Have the banks raised rates more than they need to, as Scott Morrison tried to argue?  Given the likelihood of even more stringent capital requirements in the near future, it's hard to blame the banks for being cautious.

In the debate over the FOFA reforms much was made of the need to protect uninformed investors from predatory financial advisors.  It's true that many people don't understand the world of finance and banking.

But this doesn't just make them vulnerable to unscrupulous financiers.  It also makes them vulnerable to unscrupulous politicians who want to obscure the consequences of their own policy decisions.

If the banks want to change that dynamic, they're going to have to shift the weight of a century of Australian history.

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Same-sex marriage: When did dissent become discrimination?

The politics of gay marriage have shifted radically in a very short space of time.  Until 2011, the Labor Party was firmly opposed to gay marriage.  The Coalition was firmly opposed just four months ago.

So it's remarkable that a Catholic archbishop in Tasmania is being dragged to a government anti-discrimination authority for opposing same-sex marriage — the position that was until very recently, shared by both parties.

Last September, Martine Delaney, the Greens candidate for the federal seat of Franklin, took a complaint to the Tasmanian Anti-Discrimination Commissioner that the Catholic Church had produced and distributed a booklet which "does immeasurable harm to the wellbeing of same-sex couples and their families across Tasmania".

This Tasmanian case has Australia-wide significance.  We've just had a sustained national debate about free speech, and are about to go into a national debate about gay marriage.

Polls show that about 70 per cent of Australians support gay marriage, so you might think the plebiscite is an assured success.  Indeed, Tasmania's Liberal-led lower house last week became the third state to agree to a motion supporting legislation of same-sex marriage.  But that success is not at all certain if gay marriage is perceived as the thin end of the wedge for a more general attack on the liberties of religious communities and freedom of conscience.

The booklet in question, Don't Mess With Marriage, offers the basic Christian case against gay marriage:  families are the founding blocks of society and children need a mother and father.

It's hard to overstate how moderate this booklet is.  It offers no fire or brimstone.  It's gentle and Christian, of the suburban pastoral variety.  There's much expression of sympathy for same-sex attracted people who also want to follow religious teachings that preclude their sexuality.  It is a calm explanation of a major position on a prominent political policy issue.

To be offended by the booklet is to be offended by what was, until very recently, the mainstream view on gay marriage, and one still shared by a large minority of the population.

For this reason if nothing else, the complaint ought to have been dismissed as laughably frivolous.  But this month the commission decided that the Catholic Church has a case to answer under Tasmania's Anti-Discrimination Act.

The Tasmanian law almost exactly parallels the controversial section 18C of the Racial Discrimination Act that the conservative commentator Andrew Bolt was found to have breached in 2011, and which Tony Abbott (in opposition) promised to repeal.

There are, however, two revealing differences between the Tasmanian and the federal legislation.

The first is that the Tasmanian law prohibits offensive and insulting speech not only on race and ethnicity, but on 20 different areas from sexuality to religious belief to political affiliation.

In this sense the Tasmanian act resembles the Human Rights and Anti-Discrimination Bill which the Gillard government failed to push through parliament in 2012, which would have made it unlawful to offend someone on virtually everything (including their political opinion!) in the workplace.

It is symptomatic of the spread of no-go areas in Australian public discourse.  Governments increasingly believe that protecting us from being offended — on whatever spurious grounds — is more important than allowing us to speak our mind.

The second difference is that there is no caveat in the Tasmanian act that even purports to protect free expression.  Defenders of the federal Racial Discrimination Act often point out that section 18C is followed by section 18D which provides protection for speech made in good faith on matters of public interest.  This protection is weak.  The court decided in the Bolt case that something could not be considered in good faith if, in the view of a judge, it was too sarcastic and had errors.

However, the Tasmanian legislation doesn't even offer that token concession to basic liberties.  In a parliamentary debate in 2013, the Attorney-General dismissed concerns by insisting the bill "does not impinge on free speech;  it provides protection from bullying".  All words are cheap.  The words of politicians — even when they're interpreting their own legislation — are junk.

Both supporters and opponents of gay marriage should be very unhappy with the Tasmanian case.  Even if the Catholic Church successfully defends against the anti-discrimination complaint, damage has been done.  Free-speech theorists talk about the "chilling effect" when the cost of defending oneself against baseless claims hampers the open expression of views.

And in the event that the plebiscite fails, it will be because voters feel that expanding marriage freedom to one group means limiting the freedom of another.  The date of the vote hasn't even been set, but the debate about gay marriage has already moved from the realm of public discourse to legal sanction.

The Tasmanian legislation also tells us something about the ongoing political contest over free speech in Australia.

All those human rights bodies — such as the government's Australian Human Rights Commission — that flaunt the vital protections of section 18D did not lift a finger to protest the lack of such protections in the Tasmanian legislation.  Just as they fully supported the Gillard government's 2012 bill until its absurdities became politically controversial.

When the Abbott government broke its promise to repeal section 18C in August 2014, many commentators believed a line had been drawn under the arguments over free speech and offensive speech.  Not at all.  Watch Tasmania.  This is the debate we are all about to have.

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When ''safe spaces'' become an attack on ideas

There is something deeply reactionary brewing in American higher education.

The events at Yale and the University of Missouri over the last few weeks make plain that the movement for trigger warnings in university classrooms and safe spaces on campus has turned into a dogmatic moral illiberalism.

We should pay attention to what's happening.  With a few years lag, Australia tends to enthusiastically adopt American intellectual fashions.

At the University of Missouri, anti-racism activists announced that their protest encampment on public property was a "safe space".  A student journalist, Tim Tai, tried to report on the protest.  You can watch what happened.  In the first half of the video, you'll see the activists surround and attempt to intimidate Tai.  In the last 10 seconds you'll see no less than an assistant professor of mass media shout for "muscle" to remove another journalist for simply filming a public protest.

The Yale incident appears more trivial, but is more telling.

Just before Halloween, Yale's Intercultural Affairs Committee emailed students asking them to ensure their Halloween costumes did not involve offensive "cultural appropriation and/or misrepresentation".  In response, one Yale lecturer and associate master at Yale's Silliman College, Erika Christakis, objected that the idea that cultural appropriation was inherently wrong could stifle free speech and open debate.

Christakis' email was apparently beyond the pale.  Outrage spread across Silliman College.  An opinion piece in the Yale Herald responded that "I don't want to debate.  I want to talk about my pain."  (The piece was taken down but you can read an archived version.)  The New Yorker complains Christakis was "privileging abstract free-speech rights over the immediate emotional experiences of those who are likely to experience discrimination at the university."

In these two events, we've dramatically seen how the apparently benign movement for trigger warnings in university classes and safe spaces for students has metastasised into a more general assault on the contest of controversial ideas in higher education.

The original idea behind trigger warnings was to advise students who had experienced serious and severe trauma, such as sexual assault, that they were about to hear some disturbing content.  You can understand the reasoning behind the warnings, as a reasonable concession to the fact that some material, particularly in humanities subjects, can be highly confronting.  Likewise the safe space — say a women's room — might be seen as a benevolent amenity.

But trigger warnings have become absurd.  Some students are requesting classic literature come with warnings.  And safe spaces are morphing into places where infantilised students hide from ideas.

Now this movement has turned into a generalised attack on open discussion.  The entire higher education experience is being reconceptualised as a zone of post-trauma, in which students demand faculty protect them from the expression and thoughts of others.

Using the language of psychological harm, ideas are condemned, rather than rebutted.  Students can receive "pain" from the decision of another person to write an email.  It is wrong to "privilege" free speech, a mere "abstract right", over personal emotional experience.

It's hard to think of anything more contrary to the purpose of education — which is, in the broadest sense, the systematic exposure to ideas outside personal experience — than that.

One of the arguments in Christakis's email is worth dwelling on.  Not her main points about the benefits of provocation, or the challenge of defining what costumes are offensive, but her point that, from a childhood developmental perspective, students need to learn how to reject ideas that trouble them, rather than running immediately to ban and punish.

This accords with the most well-known argument for freedom of speech — that made by John Stuart Mill in his book On Liberty.  Mill argues that by hearing contrary ideas, if only to consider and discard them, we grow intellectually.

In this way, free speech and education are tightly intertwined.  Limit the former and you hinder the latter.  An education system where the students are excessively cushioned from the provocation of others will stifle that development.  One would hope you could graduate from Yale being able to articulate why some ideas are wrong.

But what about students who have experienced genuine trauma?  Even then, it's not clear that preventing "triggering" is the best response, as Jonathan Chait noted earlier last year.  Students who are genuinely unable to cope with incidental references to that trauma might not be ready for the window into the breadth of human experience that education is supposed to provide.  If you are triggered by the racist language in Huckleberry Finn, you are not ready to study 19th century literature.

For those who are ready, hiding from every reminder of trauma can be counterproductive.  There's a growing area of research into what's known as "post-traumatic growth", the idea that some people who experience trauma can become stronger for the experience, rather than made permanently fragile.

This isn't for everyone, of course.  Talk to your doctor.  But education is supposed to foster intellectual development.  It is not supposed to be a safe zone of comfort and emotional protection.  Campus radicals used to brag about how transgressive and provocative they were.  Now, it seems, they're more interested in policing the transgressions and provocations of others.

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Loosening China's infamous one-child policy unlikely to fix gender imbalance

China's decision to relax its infamous one-child policy is unlikely to reverse its looming demographic problems, with major consequences for our region as a whole.

Recently the Central Committee of the Communist Party of China announced the end of the country's one-child policy, which has been mandatory (though with some exceptions for minority groups) since 1980.

The statement issued by official press agency Xinhua read, "China will allow all couples to have two children ... the change of policy is intended to balance population development and address the challenge of an ageing population".

Although this decision was widely praised in Western media it should not be construed, in any way, as a concession by the Communist Party in the virtues of personal liberalism, in this case the fundamental and intimate right of individuals to start and grow their own family ties.

Rather, the slight easing of this pernicious restraint over the reproductive lives of Chinese people is based on a cold, calculating assessment of the economic and social consequences of one of the most venal expressions of state control in living memory.

Partly as a consequence of the one-child policy it is widely anticipated that China will experience accelerating population ageing, with some demographers quipping that the country, presently home to about 1.4 billion people, will grow old before it gets rich (in per capita terms).

During the "Great Leap Forward" of forced agricultural collectivisation and industrialisation, from the late 1950s to early 1960s, the Chinese total fertility rate stood at around 5.7 births each woman, and reached subsequent highs of about 6.2 during the mid-1960s.

By the time the one-child policy was being enforced by Deng Xiaoping, estimates of the total fertility rate in China had fallen to about 2.8 births each woman, which were consistent with regional and global trends.

With the one-child policy motivated by the spurious fear that population growth will overwhelm available resources, Chinese fertility rates have been driven down even further to now range between 1.2 and 1.6 births each woman, depending on which source is relied upon.

The effects of such change are long lasting and transformative in a demographic sense with estimates suggesting the policy, brutally enforced by coerced sterilisations and forced abortions, tragically prevented between 200 and 400 million unique individuals being born.

It is often said that "demography is destiny" and the anti-natalist stance of the Chinese government has precipitated the almost sure-fire result of a rapidly ageing population stock which cannot be economically or fiscally sustained by a declining working-age populace.

By 2020 it has been estimated that the numbers of the elderly in China will increase by 60 per cent whereas the working-age population will fall by about 35 per cent.

Looking a little farther out into the future, the United Nations has previously forecast that by 2050 one-third of the Chinese population will be over 60 years of age, with a little more than half of the population of working age.

For comparison, the latest Intergenerational Report forecasts about 23 per cent of the Australian population will be over 65 years of age about mid-century, whereas 60 per cent of our total population will be aged between 15 and 64 years.

The exercise in demographic misanthropy over a 35-year period is also contributing to a disfigurement of China's population composition, of a character unlike that seen anywhere else in the world.

Even though advanced economies with a greater preserve for civic and personal freedoms are also experiencing declining fertility rates below the replacement threshold level of 2.1 births each woman, they are unlikely to see a generational population distribution as skewed as that emerging in China.

In particular there is growing reference to the "4-2-1"phenomenon of a typical extended family consisting of four grandparents, two parents, and the one child who is pampered, as if a "Little Emperor/Empress", but equally pressured to perform well in school and attain a high-paying job to support ageing relatives.

The one-child policy combined with deeply ingrained patriarchal norms contributed to horrifying femicides of untold numbers of very young girls, leading in turn to a peculiarly skewed gender imbalance in Chinese society.

Although estimates of the skewness in gender do vary, it is generally accepted that there are about 117 males for every 100 females in China with worries that up to 30 million men will never find a female partner to marry, should they be thus inclined.

Arguably the most ironic element of this draconian population policy which, incidentally, still remains largely in place given the reluctance of the Chinese government to allow its own people to freely reproduce, is that fertility rate reductions would likely to have come anyhow.

The experience of a falling fertility rate within its freer domicile, Hong Kong, aptly shows that educational attainment and income growth leads many families to want to have fewer children of their own accord but, then, invest more resources into each child than ever before.

Over the last few years Australian governments have placed very great stock on the realisation of a so-called "Asian Century", arguing we should reorient the weight of our economic ties with East Asia in particular.

But China's ageing population is likely to contribute to more subdued output growth and cost competitiveness pressures, including as the smaller pool of working-age people seek out wage premiums, so Chinese prosperity will not necessarily be limitless.

In fact, the future growth of the Chinese economy will be very heavily constrained by the heavy-handedness of its demographic central planners.

Perhaps the Communist Party may have sealed its own fate in this case, since it will find itself unable to maintain the economic growth rates and, incidentally, the revenue base to fund the state-sector patronages necessary for ongoing political support as the population ages.

However, as the historical record and contemporary experience abundantly illustrates, there is no better promoter of prosperity, and not to mention stabilising population growth, than greater economic freedom itself.

It is in this regard that China could avert the dire economic consequences of its self-induced demographic crunch as best it can, with an encouragement of much greater foreign investment and migration key among the policy changes it should make.

If the East Asian giant could further liberalise its economy to inject new capital and alleviate labour shortages into the future, then both the peoples of China and Australia would stand to benefit immensely.

Reform debate: put low taxation on the table too

The pity is that as John Hewson has got more left-wing over the years he's forgotten how good he once was and he's mis-remembered what he tried to do.

On these pages last week Hewson wrote how "Turnbull can succeed where I failed" (AFR, November 5).  But what Hewson tried to do, and what Malcolm Turnbull and Scott Morrison will likely do, are two entirely different things.  Hewson tried to cut tax and the size of government.  That's not what Turnbull and Morrison have they said they want to do.

On the first page of his economic policy package Fightback! dated November 21, 1991, Hewson's goal was clear:  "It is vital to reduce tax and simplify the tax system if the energies, talent and initiative of the Australian people are to be encouraged and fulfilled."  On the second page it says, "The size and cost of government in Australia are excessive.  Under a Coalition government both will be reduced."  And so it goes on — for another 343 pages.

Twenty-four years later Hewson has repudiated most of what he once stood for, which is a shame because Australia needs the 1990s version of John Hewson more than ever.  Measured by the tax it collects, the federal government is now 10 per cent bigger than it was at the time of Fightback!  Sadly, now Hewson talks of things like increasing taxes on superannuation and raising the GST.

It's not just John Hewson who's changed.

In recent weeks the Prime Minister and the Treasurer have made a number of substantial speeches on tax reform.  Not once did either mention the need to reduce the overall tax burden.

'DEFEAT FOR THE RIGHT'

Worried Liberal MPs aren't the only ones noticing what's happening.  Some are delighted by the turn of events.  Ben Oquist, former chief of staff to Greens leaders Bob Brown, now executive director of the centre-left Australia Institute, said something perceptive a few days ago.

"Swapping a progressive tax on income for regressive tax on consumption would itself lead to unfairness — unless the overall compensation package and, more importantly, an increased spending package joined it.

"Importantly though, the new PM is not arguing for the traditional conservative position for a decrease in the overall tax take.  In fact, no one is.  This is a significant defeat for the right in Australia.  Sure, there is pressure from many not to increase overall taxes but no one is credibly arguing for a decrease.  That debate has been won."

Oquist is half right.  Yes, the voices wanting higher taxes and bigger government are winning.  But they haven't won yet.  And anyway, not many debates are ever permanently won or permanently lost.

A few people are in fact arguing for tax cuts — but they can be counted on the fingers of one hand.  I have explained in detail how to reduce taxes, cut the size of government and promote economic growth.

It's fallen to free market think tanks and a handful of independent economists and commentators to argue for lower taxes.  That's partly because they're not in thrall to government or government funding.  Practically every other voice in the public debate is.  Those who once would have brought a degree of disinterested analytical rigour to such a debate have become barrackers for bigger government.  Until John Fraser arrived as its new boss, the Treasury Department was among the loudest spruikers for higher taxes.

The discussion paper Treasury issued in March started this tax debate on entirely the wrong basis, which perhaps explains why it is going so wrong.  The paper claimed "Australia's overall tax burden is relatively low compared to other developed countries."  That is precisely what everyone who wants higher taxes would have the public believe.

Maybe the junior Treasury bureaucrat who wrote that line was engaging in wishful thinking.  The trouble is the line is wrong.  As the Productivity Commission has acknowledged, on a like-for-like basis Australia's tax burden is actually now higher than the average of other developed countries.  Once, John Hewson and the Coalition thought prosperity was achieved by reducing taxes and letting people keep more of their own money.  Hewson doesn't believe that now.  What the Coalition believes, we'll discover in the months ahead.

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Turnbull's weak media reform plans aren't fit for the modern age

One of the pleasant things about being prime minister, I suppose, would be pursuing your own little hobby horses.  Especially when those hobby horses had been cruelly stymied by your predecessor.

And so the Turnbull Government looks to be pushing ahead with the reforms to media ownership and control that had been quashed — or at least shelved — by Tony Abbott when Malcolm Turnbull was communications minister.

Now the communications minister is Mitch Fifield and the Government is talking about a media reform package being announced this month.  Perhaps even this week.

Yet it is striking how limited the reforms being publicly discussed actually are.

The Government has floated eliminating the reach rule (which prevents firms from owning commercial television licenses that cover more than 75 per cent of the population), eliminating the two-out-of-three rule (which prevents a firm from owning more than two of a commercial television licence, a radio licence and a newspaper in the same area) and abolishing television broadcast licence fees.

Each of these reforms could have been done by any government in the last 20 or 30 years.

In his recently published diaries, Peter Reith records a Howard cabinet debate about eliminating cross-media ownership rules all the way back in April 1997.  (An unhappy Reith, who wanted more comprehensive liberalisation, complains "we are busily contemplating a highly interventionist approach".)

The media landscape is completely different in 2015.  Here's what the ABC's page looked like then.  Just 13 per cent of Australian households had home internet access in 1998.

Anyway, we all know how much technology has changed over the last decade.  But even in a much shorter time-span the media environment has changed dramatically.

The last time I wrote about the prospects for media ownership reform was in March 2014, when Turnbull first floated the idea of regulatory reform.  Since then our viewing choices have expanded to the streaming services Stan, Netflix and Presto.  We've seen the launch of Buzzfeed Australia, Daily Mail Online Australia, and Huffington Post Australia.

Even the way we conceptualise media has shifted.  A larger and larger number of media consumers use Facebook as their primary news source.  Wikipedia's page on "binge watching" was only created in September 2013.

All those technological and social changes materially affect the old arguments for media regulation.  Populist fearmongering about press barons and broadcast moguls might have been effective in the 20th century, but only fantasists claim the media is monopolised today.

Nothing prevents media consumers voting with their feet.  Nothing prevents consumers migrating rapidly onto new services and shifting their allegiance to more interesting news organisations.  Consumers do not lack for choice.

These transformative changes make the Turnbull Government's proposed reforms look embarrassingly modest.  Even the Greens support the elimination of the reach rule.  The two-out-of-three rule is absurdly anachronistic.  There's something comic about a regulation in 2015 that conceives of the media as divided between print, radio and television.

As to the elimination of television licence fees, this is more fraught.  The Government apparently believes broadcast licences are effectively worth zero, and that charging for the use of a valueless asset is unfair.

It's certainly true that electromagnetic spectrum rights are worth less than they were.  But they're not worth nothing.  It's a big leap from "traditional broadcasting is no longer special" to "traditional broadcasting is worthless".

Anyway, if the Government really believes that, then where's the proposal for a fourth free-to-air commercial television network?  Or a fifth?  The incumbent broadcasters, no longer benefiting from the valuably scarce spectrum, would have no cause to complain.

One "high level spokesman" was quoted in The Australian yesterday saying that "if the Government believes one law needs to go, then they all need to go".  Indeed.  The technological changes that make some media reform possible also allow for more dramatic media reform.

For instance, anti-siphoning laws, which regulate the broadcast of sporting events, should be eliminated.  The spectrum should be privatised, not licensed at no charge.  Local content requirements — those archaic remnants of cultural protectionism — should be removed.

Each of these existing regulatory constructs assume a media world where content is scarce, where production and distribution is expensive, and where consumers are locked into free-to-air broadcasting.

Not a world where we browse Twitter on our iPads while Netflix plays on that screen in our lounge room that we still call a television but is really a computer monitor.

Parliament always lags behind technological and social change.  But the Turnbull Government wants to be all about innovation.  Boldness, not timidity, in media reform would be a good place to start.

Church Social Justice mired in strange agendas

The fact that Australia's mainline Protestant Churches are near collapse doesn't seem to have deterred them from aggressively pursuing a number of dubious social justice agendas.

Recently, Anglicans have been busy loudly condemning coal as the new evil, questioning the conduct of Australian border security and encouraging local parishes to use dolphin-friendly tuna and vegetarian options at all church gatherings.

This begs the question, what should Australia's churches actually be advocating as social benefits for our community, particularly from denominations that are numerically, financially and spiritually disconnected from mainstream Australian life.

Pope John Paul II has given a powerful focus to the central issue that is confronting Australian society in the 21st Century in his encyclical Laborem exercens (English:  On Human Work), highlighting the dignity and value of human work.  Australia has not been immune from recession, the restructuring of manufacturing and the constant need to compete and adapt to global markets.

The Australian government is sharply focused on a free trade agenda that will go a long way to ensuring our continued prosperity, particularly in our trading relationship with Asian neighbours.  This is a good policy.  Nevertheless, there are Australian workers, urban and rural, whose employment has been affected or eroded by international competition.  In many cases there are limited opportunities for alternative employment.

Whilst churches also talk a great deal about poverty reduction, they are usually silent and blind to the obvious;  gaining employment and holding it is the key platform for human fulfilment.  Employment is the foundation of the whole social justice agenda.  It is the means to provide for marriage and family, the ownership of a home and the resources to raise and educate children.  It also allows for all of us to contribute to the welfare of our nation beyond our family and friends.

But the demands of the modern economy must not destroy employment or the dignity of the worker.  As John Paul II noted, Jesus spent most of his life working, hence, the Pope's call for worker support whenever employment is threatened or lost, care for their families and a strong emphasis on new employment as central to our community life.  (Laborem exercens, No 8)

The world of work changes;  that is the one constant reality of work.  Nothing stays the same and adaptation is the key.  All businesses must be focused on continued improvement and all workers on the need for adapting and developing skills.

In Australia, employment issues are directly related to the health of all Australian States.  It is not just South Australia or Tasmania in which this is keenly felt.  States unable to support their population with long-term employment which encourages individuals to build lives over a sustained period, will simply lose population to states which can.

Some churches also need more honesty surrounding the benefits that flow from free-enterprise.  The generally socialist ethos of church pronouncements is often restricted to the idea that business is motivated by profit alone.  Broader notions of wealth which include physical, psychological, moral and spiritual benefits almost always stem from the world of work.

Australian business has overwhelmingly allowed Australians to participate in the benefits and goods that define our humanity and has made an irreplaceable contribution to our society.  The Business Council is making a powerful call to lower company tax and personal income tax.  Currently, Australia is at severe competitive disadvantage against our Asian neighbours, whose average corporate tax rate is around 22% compared to our 30% rate.

However, let's not expect our churches to get on board with this soon.  The real challenge facing young employed Australians is the need for more political engagement and greater social justice.  I know, lets hold a sustainable, multi-cultural rally in aid of Animal Welfare!

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Australia wins at the global creative game

I like a good index, and the University of Toronto-based American economic geographer Richard Florida has been my main supplier for a few years now.

His super-popular Creative Class products are all made of the same three progressive ingredients:  Technology, Talent and Tolerance.

The label on the bottle tells an uplifting story of how great American cities are not made of steel mills anymore, but of gay-friendly citizens, great universities, and bicycle paths.  Like Helen of Troy, his ideas were of such inestimable beauty that some 1,000 city government plans were launched to create, at very least, some of these university-flavoured bicycle paths.

Dr Florida's idea is that you take these policy prescriptions, then you wait (it was never actually specified how long — some say 10-15 years) for the effects to kick in.  What will happen is that first you will start to feel creative, and then later prosperous.

So I always look forward to my latest delivery of creativity index.  This year's product (from his fine research group) does not disappoint — being a Global Creativity Index no less!

We're #1!

And guess what?  Australia is number one!  We win at the global creative game!  Ozzy, Ozzy, Ozzy!

NZ is number three — suck that NZ and your stupid Rugby World Cup — and the USA is rather pathetically only number 2.

(An entirely predictable list of Canada, some bicycle path-ridden Nordic countries, Singapore, and some other overeducated quasi-Nordic countries make up the rest of the top ten.  The 11-20 spots are mostly occupied by the good coffee precincts in the Eurozone.)

Australia wins because of its consistent performance over all of the measures.  Most countries fall down on at least one.

Australia is 7/112 on the Technology index component.  (South Korea, Japan and Israel make up the top 3.)

Australia is 4/136 on the global tolerance index, a mix of attitudes to gays and lesbians and racial and ethnic minorities, only just behind the world-class tolerance of the Canadians.  But they also gave the world Justin Beiber, so should probably lose some points for that.

And get this:  Australia is 1/134 on the global talent index.  (This is a mixture of creative class density, and educational attainment.) That's amazing — we win over education powerhouses of Finland, Singapore, Denmark and the US because of our proportionally higher ranking in the creative class measure, which in many ways is a reflection of the high past quality of Australia's education.

Yay!  Now what?

So, what would be an appropriate way to celebrate this great and deserved win?  Let me suggest with a few hearty rounds of deregulation.

If these index findings are indeed true — and I have no reason to doubt them:  the list of ingredients is clearly labelled on the bottle — then our economic and cultural performance, our overall prosperity, should be better than it is.

Some ingredient is missing.  Australia is a world-beater at the creative game.  But we don't seem to be as good at translating that sort of winning creative on-field performance over inputs (our tolerance, our talent, our technology) to the off-field realm of deliverables, our "merchandising" if you will.

What's missing from our great potential in innovation is entrepreneurship.  Being creative is not enough.  We also need to improve our entrepreneurial game.  (This same point was also made, in specific reference to Australia, by the US think-tank the Kauffman Foundation.)

I produced a report last year entitled Where have all the entrepreneurs gone?.  It showed how the number of new firms created has fallen by almost 50% since 2002.  A major reason for this is the high and growing regulatory burden in Australia, which raises the costs of entrepreneurship, inhibiting entry.  This is bridling our great creative potential.

Maybe the Assistant Minister for Innovation Wyatt Roy will lead us though this with the tech-community's favourite answer:  start-up incubators and accelerators.

But a better strategy to work on our translation game is simply to increase the size of the team on the field.  This doesn't require redirecting resources, or increasing taxes, but simply giving our highly creative world-class players a bigger, freer space to run.

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Malcolm Turnbull should avoid the seductive trap of an early election

Early elections are not a good idea.

Yes, they look very democratic.  Who could object to a government seeking the approval of the voters, even if not strictly necessary?  But if there's one lesson we've learned in the last few years, it's that early elections are a seductive trap.

Julia Gillard held an early election in 2010.  She wanted voter approval for Labor's leadership change.  But by doing so she squandered any hope of exploiting her status as the incumbent prime minister, and nearly lost her first term government.

Kevin Rudd called an election well before he had to in 2013, well before he had re-established himself as the rightful leader, and well before he had rebuilt any semblance of Labor's economic credentials.  Needless to say, Rudd lost.

So one wonders why on earth people are recommending the Turnbull Government go to an election sooner rather than later.  In Monday's Australian, Phillip Hudson had an extended piece saying that Turnbull was being urged to call a poll for Valentine's Day 2016.

It's true that with an early election Turnbull could take advantage of his current popularity.  Just like Gillard and Rudd took advantage of theirs.

Over the weekend, News Limited papers revealed Treasury is actively considering a 15 per cent GST in return for significant income tax cuts.

It is widely believed that any major tax changes would have to be taken to an election first.  It's not clear to me why that is.  It seems to assume that governments these days are incapable of explaining why what they want to do needs to be done.

In fact, the so-called reform "mandate" provided by an election is ambiguous.  We cannot know why elections are won or lost.  Perhaps an election win means the public loves the policies of the winning party, or perhaps it just dislikes the leader of the losers.

Nevertheless, the idea that reform has to be taken to an election first is the received wisdom, and governments are governed by nothing but received wisdom.

This speculation of an early election illustrates one of the Turnbull Government's biggest challenges.  In the next 12 to 18 months, Malcolm Turnbull is going to have to navigate the politics of a budget, a general election, a plebiscite (same-sex marriage), and possibly a constitutional referendum (Indigenous recognition).  In each, Turnbull will be fighting the shadows of decisions left to him by Tony Abbott.

Indeed, of all these, an election is probably the easiest to navigate, given Bill Shorten's lacklustre poll performance.  As things look now, a second term for the Coalition is almost certain.

Turnbull didn't want a plebiscite on same-sex marriage.  But he has some interesting options here.  Turnbull could bring the plebiscite forward and hold it before the next election.  Surely doing so would not be breaching faith with voters who voted the Coalition into government in 2013.  After all, Turnbull would be asking for permission from those voters for the change in policy.  That's the beauty of a plebiscite.  It's hard to argue against on democratic grounds.

Tony Abbott thought he was being clever when he called for a gay marriage plebiscite.  In fact, when he did so he threw away the conservatives' strongest card:  with the current make-up of the Parliament, a conscience vote might well have been unsuccessful.  A lost parliamentary vote would have delayed the issue for at least a few more years.

Opinion polls show consistently high support for same-sex marriage.  When the plebiscite date is announced, gay and lesbian couples might as well book their wedding venues.

The Indigenous recognition referendum is much more complicated.  Turnbull is sending it off to yet another committee.

Phillip Hudson raised the possibility of a poll combining the gay marriage plebiscite, Indigenous recognition, and a half-Senate election, to be held perhaps in the second half of next year or early 2017.

But such an omnibus poll plan assumes this new committee will decide on a recognition question that is so uncontroversial it is guaranteed to be successful.  Holding a controversial recognition question at the same time as the gay marriage plebiscite will risk both failing.  Turnbull surely knows this.  So far there is no sign of a consensus question.  Don't count on there ever being one.

The final electoral complexity is the May 2016 budget.  It will be the first major test of Scott Morrison's economic skills.  It needs to symbolise a new approach to getting the budget back to surplus, while at the same time maintaining the Coalition's mantra of "lower, simpler, fairer taxes".  It needs to bear the load of the Turnbull Government's economic reform agenda.  It can't be the public relations disaster that was 2014.

With all this pressure, you can see why some in the Government would be eager to get an election out of the way before the budget was handed down.  Budgets have winners and losers.  But doing so would be a mistake.  Governments are elected to govern.  As the experiences of Kevin Rudd and Julia Gillard demonstrated, voters punish election timing cynicism.

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