Friday, August 26, 2016

The Turnbull Government's Disgraceful Free Speech Fail

In the evening of September 15, 2015, he laid down the measure against which his time as PM should be judged.  Turnbull said, "This will be a thoroughly Liberal Government.  It will be a thoroughly Liberal Government committed to freedom, the individual and the market."

Last week the prime minister ruled out attempting to change the law that makes it unlawful to offend or insult someone on the basis of their race or ethnic origin.  The law has resulted in three students at the Queensland University of Technology being embroiled in more than three years of legal proceedings.  The entire process started after one of the students wrote on a Facebook page the words — "Just got kicked out of the unsigned indigenous computer room.  QUT stopping segregation with segregation."

Legislation aimed at stopping racist violence is now being used against a 20-year-old who remarked that a university should not be segregating students according to their skin colour.

Instead of the PM deploring a law that is thoroughly illiberal in its principle and application, he said that changing it was not a priority for his government.  "With all due respect to the very worthy arguments surrounding it, it is not going to create an extra job ... It's not going to build an extra road."


Indemnify costs

However, if a country is to be judged simply by the quality of its roads then there's nothing to separate Australia from North Korea.  A government might make the trains run on time but that wouldn't necessarily qualify it is a liberal government.

Maybe the prime minister misspoke.  It is to be hoped that he did.  It is to be hoped, too, that in the very near future he rediscovers the commitment to freedom of speech that he put on display before he became PM.  Even if Malcolm Turnbull is too timid to stand up for freedom of speech himself there are two things he can do immediately.  The first is to have the government indemnify the costs of the three QUT students, which can be easily done at the direction of George Brandis, the Attorney-General.

The second thing the prime minister can do is allow all Coalition MPs to vote for the bill currently in the parliament that will remove from the law its most egregious elements.  As things stand, Mr Turnbull has banned frontbenchers from voting to support freedom of speech.  It will be an indelible stain on the history of the Turnbull government if that remains the case.

The way in which the Liberal Party has changed in recent years can be measured by its attitude to freedom of speech.  When in 1995 — in the last days of the Keating government — the Labor Party introduced the law now being used against the three QUT students, the Liberal Party voted against the legislation.


More eloquent

In the Senate on August 24, 1995, Nick Minchin summed up the Liberals' position.  "Freedom of speech is a fundamental tenet of the philosophy of my party;  that is, liberalism.  I believe it is a fundamental tenet of democracy itself.  In my view — and in the view of my colleagues on this side of the House and of many Australians — this bill is an insidious example of the growing restrictions on freedom of speech, which we are encountering in the name of an insidious philosophy that ... says, 'We shall control what you say and to whom you may say it'."

Two decades after Minchin said this the Liberal Party transitioned into having one leader (Tony Abbott) who said he didn't want to change the laws restricting freedom of speech because it would complicate the government's relations with ethnic and religious minorities, and another (Malcolm Turnbull) who thinks freedom of speech is not as important as building roads.

The idea that something Phillip Adams wrote in 1995 can be a more eloquent defence of freedom of speech than anything any minister in the Turnbull government can utter demonstrates just how much the Liberal Party has changed:  "Around the world, people are dying to get it.  And we're giving it away."

Monday, August 22, 2016

Still A Strong Case For Keeping Privatisation In The Reform Tool Kit

Even though it has been firmly established as a modern economic reform mainstay, the notion of privatisation remains a controversial one among the public at large.

There are vested interests that will disparate privatisation as a matter of course, regardless of its successes, but when a longstanding, self-avowed proponent of privatisation starts raising doubts it makes sense to take notice.

Speaking at an economics forum in Melbourne a few weeks ago Rod Sims, former Hawke government adviser and reappointed head of the Australian Competition and Consumer Commission, said, "I'm now almost at the point of opposing privatisation".

The reasons for Sims' growing scepticism about privatisation policy are two-fold.

The first concern is that governments transferring ownership of assets to the private sector seem to be doing so with revenue-raising as a primary objective, and this becomes more apparent when governments are gripped by a budgetary crisis.

Referring to the case of recent sales of port infrastructure by the NSW state government, Sims remarked:  "I just think governments are more explicitly now privatising to maximise the proceeds."

In the past federal and state governments have used the sales proceeds from privatisation to reduce public sector debt, and more recently have tried to make privatisation politically appealing by promising to spend funds from asset sales for recurrent or capital purposes.

Paying off debt is better than frittering funds on potentially low-value spending but the bottom line, from a classical liberal perspective, is that the bounty of sales revenues a government collects from privatisation ought to be a secondary concern.

The application of sales proceeds by federal and state governments during the 1990s and early 2000s to reduce the burden of public sector debt was welcome at the time.  But the broader "political economy" problem of governmental overspending was unaddressed.

If politicians lack the discipline to control spending, as budgetary developments in recent years attest, then the sale of public sector assets today could perversely help to financially validate the excessive expenditures of the past.

Putting these considerations together, the promise of privatisation revenue is no substitute for sound public sector financial management practices.

There are far more compelling reasons to privatise than fundraising, so in relation to the revenue question there is merit in the argument posed by the national competition policy regulator.

The second major issue that Sims raised in his Melbourne talk related to the implications of privatisation for competition, not only from the perspective of rivals competing with the owners of the privatised asset but for downstream industries and final consumers.

Ever since privatisation became a part of the policy reformer's toolkit, it has been stressed that a privatised entity as part of a highly competitive environment, with numerous sellers already in place, is preferable.

At the very least there should be contestability pressures, or a credible threat of competitive entry into the industry by potential rivals, if a situation of converting a public monopoly into a private one is to be avoided.

In addition, a government preferably should not pursue any contractual arrangement that crimps competition, such as giving the buyer of privatised infrastructure a right of first refusal over future facilities located nearby, even if that potentially loses some privatisation sales revenue.

If a competitive environment cannot be ensured prior to privatisation, including through the structural separation of the privatised entity into its contestable versus monopolistic activities, it is recommended some form of regulated price oversight is needed to ameliorate the risk of monopolistic pricing.

Where privatised entities exist in sufficiently competitive markets governments have tended to relax price controls, whereas for private monopolies a regime of price monitoring, or even determinations of allowable price increases, have been implemented across Australia.

There is often a regulatory clamour for more prescriptive controls on prices charged by privatised entities and this can be fuelled by mischievous claims that privatisation, as opposed to government policies or changing market conditions, is responsible for price increases.

But there are risks surrounding more prescriptive price controls upon privatised entities, given the potential for regulatory action to deter new investment.

There seems little doubt that economic regulators would see additional pricing powers over privatised entities as highly desirable, but any potential changes must be scrutinised, with relative costs and benefits weighed judiciously.

The contrarian attitude assumed by Sims aside, it is helpful to reacquaint ourselves with the reasons why privatisation has become commonplace in Australia, Western Europe, North America and even in former and current communist countries.

Government-owned entities are forced to adhere to political imperatives, such as providing sub-cost services to favoured constituencies, while being insulated from the direct effects of competition and the threat of bankruptcy or takeover.

Such circumstances are prone to lead to wastage as government entities generally operate less productively than their private sector peers.

Although cases surrounding post-privatisation performance will vary several academic surveys, such as those undertaken by Bill Megginson, show an improved performance of privatised entities by way of efficiency gains and service reliability.

Sims has opened up a good debate about ensuring the political motives underpinning privatisation are sound, but his statements don't contravene the reality that governments tend to be poor allocators of capital.

There are still plenty of Australian government assets, in communications, human services, infrastructure, property and utility sectors, whose ownership could be divested.

Governments should investigate alternative ways to truly give assets back to the people where circumstances permit, such as transferring assets to community groups or gifting shares to Australians.

In an economic climate where we should want to operate assets and resources less wastefully, privatisation should definitely be seen as a plus.

Friday, August 19, 2016

Annastacia Palaszczuk And The Latest City-Country Divide

The Palaszczuk government's now failed changes to native vegetation law is a perfect example of how out-of-control environmentalism can hold back Australia's agriculture and, indeed, our economic development.

The laws, which failed a vote in the Queensland Parliament last night, proposed to reverse the Newman government's policy that allowed farmers to clear high value agricultural land.

These laws were designed to allow farmers to self assess to minimise any environmental damage and become the great conservationists we know they are.

The Newman laws are not a laissez faire approach to native vegetation as some green groups might have you believe.  Under the LNP's framework, land must be proved to be economically viable and the environmental effects minimised before clearing.

The Newman Government laws found the sensible middle ground between economic development in agriculture and environmental conservation.

Labor's reforms would have completely destroyed this sensible compromise, locking up the most productive land for only marginal environmental gain.

Since 2013, when the Newman government relaxed the laws, around 112,400 hectares of high value agricultural land has been cleared.  This represents a 0.6 per cent increase in land clearing, a miniscule amount given the conjecture.

Have we really reached a point in this divisive debate where vegetation is more valuable to the Government than productive economic activity and the viability of Queensland farms?

Apparently we have.  Last week Andrew Piccone from the Australian Conservation Foundation blew the whistle on the environmentalist's agenda.  He claimed that "To improve economic opportunity in remote Australia we have to start thinking outside the marginal and unimaginative industries of last century — big cattle, big agriculture and big mining — which are in fact the greatest threat to the area's prosperity."

That deep hostility to Australia's primary industries from Australia's flagship environmental lobby says a lot about the ideological politics going on in these debates.

And they help explain why the now failed legislation doesn't just prohibit farming, it punishes it.

For example, the Palaszczuk government's Vegetation Management Act amendments represented a reversal of the burden of proof so that a farmer had to prove they were complying with the laws, rather than the government.  These changes assumed farmers are environmental vandals.

This is an astounding breach of the rule of law.  It is no surprise that the Queensland Law Society described the changes as a step backwards for justice.

Agriculture is a $53 billion industry that employs more than 350,000 people across Australia.  It puts the food on our tables, and provides a livelihood for thousands of regional communities.

The recent Productivity Commission draft report into regulation of agriculture highlighted the breathtaking array of complex red tape our farmers are burdened with every day.  Much of this red tape is pushed by these exact green groups not with the intention of protecting the environment, but to shut down productive industries.

I have estimated that red tape costs the Australian economy $176 bn a year in forgone economic output — equivalent to 11 per cent of GDP.

For decades' groups like the Australian Conservation Foundation have demonised the minerals industry, pushing for more and more red tape that has hampered growth.

They won't stop with this defeat.  Past behaviour is the best predictor of future behaviour in this case.  Earlier this month a uranium mine in Western Australia that would have yielded hundreds of jobs, was blocked by the State's Environmental Protection Authority after a submission by WA Greens Senator Scott Ludlam pointed out the effect it could have on a blind, microscopic desert prawn measuring just 0.3mm in length.

Endless objections from green groups have meant that it has taken more than six years and a billion dollars of investment from Adani to get approval for its job creating central Queensland coal mine.

Now the red tape state is coming for agriculture.

It is refreshing to see farming groups like AgForce taking a stand against the creeping red tape activism into agriculture by taking to the streets to protest their property rights being stripped away.

The Palaszczuk minority Government rightly faced defeat on this crucial issue.

Time To Act:  Curbs On Free Speech Must Go

Three key events are shaping the debate on freedom of speech, and in particular, the infamous section 18C of the Racial Discrimination Act 1975.  This insidious provision infantilises Australians by presuming we are all so mentally feeble that the law ought to be used to protect us against being offended or insulted.

Section 18C makes it unlawful to offend, insult, humiliate or intimidate a person on the basis of race, colour or national or ethnic origin.  This law has been the subject of sustained criticism for its clear restriction on freedom of speech.

The first of the three events that are leading to a growing understanding of the dangers of section 18C has its origins back on May 27, 2013.  Alex Wood, then a 20-year-old engineering student at the Queensland University of Technology, was looking for a computer on campus on which to do some study.  He found a computer lab and sat down to complete his homework at one of the free terminals.

A short time later, Alex was approached by a university administrator named Cindy Prior, who asked Alex whether he was indigenous.  He replied that he wasn't, and the administrator told him that the computer lab was reserved for indigenous students at the university and asked him to leave.  Alex obliged, and went looking for another computer lab in which to complete his work.  Once he had found another computer, he logged on to Facebook, and posted about his experience at the indigenous computer lab.

His post on the "QUT Stalkerspace" page read:  "Just got kicked out of the unsigned indigenous computer room.  QUT stopping segregation with segregation."

Several other students replied to Alex's post.  Prior, upon becoming aware of the post, had the comments scanned and sent them to an equity officer at QUT and asked that action be taken against the students.  The officer contacted Alex and asked him to delete the post, to which Alex agreed.  When he went back to the page, it had already been removed.

This sequence of events has snowballed into what has become a three-year legal saga.  Prior first made a formal complaint to the university, but was not satisfied with the result of that process after a year of negotiating with QUT.

She then made a complaint under section 18C to the Australian Human Rights Commission.  The AHRC investigated the matter without notifying the students that a complaint had been made against them.  And finally, after the AHRC could not resolve the dispute, Prior lodged an application to the Federal Court of Australia.  The case is ongoing and a decision is expected soon on whether it will proceed to trial.

This is not the sign of a healthy, thriving democracy.  Students at university should be free to write on Facebook pages without racking up hundreds of thousands of dollars in legal fees, and risking official sanction.  This is not acceptable in a liberal democracy based on the rule of law.

But the troubling conduct of the AHRC extends beyond conducting secret trials of university students for making remarks online.  Just last week, race commissioner Tim Soutphommasane pleaded with the public to make 18C complaints to the AHRC about a cartoon in this newspaper.

The cartoon, by Bill Leak, depicted an indigenous man who appeared not to know the identity of his own son.  There's no doubt the cartoon was provocative — that's the role of a cartoonist.  They poke and prod accepted wisdom and social conventions in ways that people can find uncomfortable.

But a government bureaucrat using his position to make public pronouncements about what is acceptable to print in newspapers is intensely, classically undemocratic.  And Australians are sick of it.  One of those Australians is NSW Liberal Democratic senator David Leyonhjelm, who has shown his disdain for 18C by lodging a complaint under the provision he wants to repeal.

Leyonhjelm ignored Soutphommasane's instructions and instead complained about an article by Fairfax's Mark Kenny, in which Kenny described Leyonhjelm as an "angry white male".

Leyonhjelm has been open about the fact that he is not offended by the description but that others may be.  While there is obviously an element of mockery behind the complaint, the case will be a fascinating glimpse into the thinking of the AHRC, and whether there exist double standards depending on the ethnic group to which potentially 18C-breaching conduct is directed.

The tide is going out on 18C.  "Offend" and "insult" must go.  Watch this space.

WARNING:  This Article Contains Ideas That Offend

Following the concerning American trend, trigger warnings have quietly crept into Australian universities in recent years.  They have become replete across student publications and organisations, and at the discretion of academics, in lectures.  However, for the militant left, their optional adoption is not enough.  Trigger warnings will shortly become formalised at one of Australia's top universities.

According to university committee documents, Monash University will become the first higher education institution in Australia to introduce a formal trigger warnings policy.  This comes despite apparent resistance from academics and concerns over censorship.  Monash has decreed that, from Semester 1, 2017, unit course guides will include a section on trigger warnings for academics to fill out.

This move comes after extensive lobbying by Monash students, including from the National Union of Students president and Monash Student Association immediate past president, Sinead Colee.  (Colee stunningly ignored a formal National Union of Students motion against trigger warnings in late 2015, and has continued advocating for their adoption.)

How has a concept that did not exist in the lexicon, let alone on campus, five years ago swiftly achieve formal institutional implementation?

Trigger warnings first appeared in the depths of the internet, on select feminist message boards.  They were initially used sparingly, largely to forewarn of graphic descriptions of sexual assault and rape.

However, their recent adoption at universities across the Western world is far more expansive and sinister.  They are being used for issues such as racism, homophobia, disability, colonialism, torture, and, at Melbourne's La Trobe University Student Union, body image, eye contact, food, and insects.

Students have called for trigger warnings on F. Scott Fitzgerald's The Great Gatsby due to its "gory, abusive and misogynistic violence", Virginia Woolf's Mrs Dalloway because of "suicidal inclinations", and Ovid's Metamorphoses because of "sexual assault".

Not only are these type of warnings nonsensical — the very purpose of this material is to elicit an emotional response — they are dangerous to the intellectual climate on campus.

If students continue to engage, the warning changes the understanding of the content.  Trigger warnings skew perceptions by highlighting certain elements.  In effect, the warnings tell students what and how to think about a piece of content, rather than allowing them to reach their own conclusions.

If students do not read the material or leave a class because of a trigger they will never be exposed to the ideas.  This defeats the entire educational purpose of higher education:  to expose young people to a variety of thinking, especially ones they find challenging.

Universities, by encouraging the avoidance of challenging content, are failing to prepare students for life outside of campus.  In the real world there are no trigger warnings.  We are not told before something offensive is voiced and coddled from emotionally challenging ideas.

There are also serious mental health concerns surrounding use of trigger warnings.

For students who do not have pre-existing experiences, trigger warnings themselves encourage the establishment of fears students would otherwise not have.  If you tell a student they might feel a strong negative emotional response to a piece of material it is far more likely that they will.

For students who have existing issues, the notion of trigger warnings, which encourage them to totally disengage from the material, could in fact make their fear worse.  This is why psychologists use exposure therapy — that is, facing your anxieties, not avoiding them.

In practice these warnings make it far more difficult to discuss sensitive content.  Academics have begun self-censoring, avoiding teaching material that could cause discomfort for fear of receiving complaints or negative responses on student feedback.  Two professors at the University of Northern Colorado were recently investigated for simply proscribing readings with multiple views on issues such as abortion, same-sex marriage, climate change, and transgenderism.  The academics were reprimanded by students not for expressing a contrary position, but simply for teaching that there is one.

One American university, Oberlin College, explicitly recommends that academics "remove triggering material when it does not contribute directly to the course learning goals".  In this culture, where academics have to forewarn about challenging ideas and face student backlash, it is much easier to simply not teach them in the first place.

University of Melbourne senior lecturer Lauren Rosewarne is a user and proponent of trigger warnings.  Nevertheless, she warns students have begun to "police" her language, and arrive in class with their views fully formed, refusing to read, or engage in discussion about, opposing material.

My Free Speech on Campus Audit 2016 found that eight-in-ten Australian universities have policies or have taken action that unambiguously threatens free speech.  Just one university has no threats.

Trigger warnings form a key part of the growing anti-intellectual culture in our classrooms.  They encourage further disengagement, and academic self-censorship.  Students often advocate for trigger warnings merely for content they find disagreeable or offensive, seeking to shut down discussion of opposing ideas.

Universities that succumb to the concept of trigger warnings and not teaching certain materials are failing in their core mission.  Education is not about opting in or out of content we disagree with or find discomforting.  Universities should be a place where students are challenged by their academics, different viewpoints are encouraged, and intellectual combat is the norm.

Energy Ministers Need To Facilitate, Not Limit, Consumer Choices

Imagine if the winner of a tender to build a 20-kilometre road took the cash, laid only 5 kilometres, and said it was all they could manage, with the rest someone else's problem.

Then the unsuccessful tenderers are expected to finish the job, while protesters attack them for still being in business and complain about them charging to fix the mess they never created in the first place.

Swap "roads" for "electricity capacity" and that's how federal and state policymakers have been running Australia's national electricity market.


"Feel-good" targets

For two decades now, governments in Australia and indeed throughout the western world have prioritised feel-good renewable targets ahead of the ability of the system to generate reliable and affordable electricity.

A standard 1500-megawatt coal-fired power station can churn out 1500 megawatts of electricity 24 hours a day, seven days a week for maybe 50 years.  Because it never stops earning a return on investment, the cost of the energy it produces is low, and it doesn't need subsidies.

No worrying about the weather, paying for standby generators, building interconnectors to bring in electricity from hundreds of kilometres away, reinforcing the grid to deal with sudden surges or drops in output, or praying for advances in technology or battery development.

Yet it is the standard 300-megawatt wind farm, which may only generate 33 per cent of its electricity potential over the course of a year, which benefits from state and local government purchasing contracts, renewables targets and capacity auctions, and an act of the federal Parliament compelling retailers to buy its product, despite delivering 8 per cent of equivalent output.

Modern, efficient fossil-fuel electricity generating assets are either sitting idle or being pushed out of the market by policies that don't take account of the costs of generating that other 92 per cent or the effect on transmission and distribution networks, private companies and supply security.


International renewables fails

In April, Manhattan Institute Senior Fellow Robert Bryce found that residential electricity prices in renewables-preferred Germany, Spain, and Britain, had increased between 2005 and 2014 by 78 per cent, 111 per cent and 133 per cent respectively.

Yet in Germany, government taxes and charges now make up around half of household electricity bills, many major energy companies are haemorrhaging cash, and CO2 emissions actually rose in 2015 due to increased demand for heating oil, diesel and brown coal.

After Spain started reducing energy subsidies said to be worth over €200 billion, new wind-farm development has stalled, and leading solar company Abengoa, which invested heavily in government lobbying, has been battling bankruptcy.

Britain, where the government has also started reducing subsidies prompting claims that the industry will "fall off a cliff", has witnessed the birth of diesel farms, including on wind and solar sites, to meet peak demand and the conversion of coal plants to burn wood.

Yet here, the federal government clings to its Renewable Energy Target while the states compete to set ever-higher targets in shorter time frames claiming there will be little effect on prices.

The June decisions by Origin and AGL to increase South Australian electricity prices by 6.5 and 10 per cent respectively from 1 July, or up to seven times the rate of inflation, are a leading indicator that platitudes from politicians are no substitute for the forces of demand and supply.


SA should be thankful for gas

What has escaped most commentators is that South Australia and Tasmania were actually lucky that legacy gas plants at Pelican Point and Tamar Valley were still available for emergency power.  A bigger shock will come when these generators permanently leave the market.

Electricity systems exist to provide, safe, reliable and affordable power to consumers and to business.  They don't exist to deliver carbon dioxide reductions, or tax credits for crony capitalism.

Governments' dominant presence in energy markets distorts investment behaviour and encourages businesses to line up for taxpayer funds rather than compete to develop a commercial product.

The role of government should be to ensure a level playing field for various energy companies and technologies to compete, with consumers deciding both the winners and the prices they are prepared to pay.

If policymakers want to look overseas for relevant examples they could look no further than India, Japan, Thailand, and the Philippines who are commissioning new generation power plants that burn coal at a higher temperature and under higher pressure, improving the productivity and capacity of their electricity networks, guaranteeing supply security and even emitting less carbon dioxide.

While it is less than two years since the chief executive of Hydro Tasmania claimed that it could help to power Victoria, and reportedly mocked the long-term viability of coal, Hydro Tasmania's peculiar strategic approach shows how politics clearly perverts sensible outcomes.

Electricity must first be created, before it can be transported, stored or consumed.  Batteries and interconnectors can only do so much.

Prussian statesman Otto von Bismarck was reported to have once said "only a fool learns from his own mistakes — the wise man learns from the mistakes of others".

In the end, demand will drive the supply of reliable and affordable electricity.  Unless wealth destruction is now the deliberate intent of government policy rather than a terrible side effect, our energy ministers would be wise to heed the chancellor's advice and facilitate rather than limit consumer choices.

Thursday, August 18, 2016

Brian Cox Confused On More Than Global Temperatures

Celebrity physicist Brian Cox misled the ABC TV Q&A audience on at least 3 points-of-fact on Monday night.  This is typical of the direction that much of science is taking.  Richard Horton, the current editor of the medical journal, The Lancet, recently stated that, "The case against science is straightforward:  much of the scientific literature, perhaps half, may simply be untrue."

Firstly, Cox displayed an out-of-date NASA chart of remodelled global temperatures as proof that we have catastrophic climate change caused by industrial pollution.  Another panellist on the program, One Nation Senator Malcolm Roberts, tried to raise the issue of cause and effect:  querying whether there really was a link between rising temperature and carbon dioxide.  This is generally accepted without question.  But interestingly — beyond experiments undertaken by a chemist over 100 years ago — there is no real proof beyond unreliable computer simulation models.

Indeed, in 2006, John Nicol (a former Dean of Science at James Cook University) wrote to Penny Whetton (then meteorologist-in-charge of the climate science stream at CSIRO) asking if she could provide him with copies notes, internal reports, references ("peer reviewed" of course) which would provide details of the physics behind the hypothesis of global warming.  She wrote back immediately promising to find some — which he thought was odd since he had assumed her office was stacked-to-the-ceiling with such literature.

Whetton even went to the trouble of contacting other colleagues — one of whom sent Nicol an inconsequential article in a Polish journal.  After eighteen months of their exchanging letters and all of her promises to be helpful, all she could finally offer was the "scientific" section of "Climate Change in Australia 2007".  There, to Nicol's amazement he found nothing apart from the oft quoted:  "We believe that most of the increase in global temperatures during the second half of the 20th century was very likely due to increases in the concentration of atmospheric carbon dioxide".

"Believe", "most", and "very likely" are jargon, perhaps meaning "we don't have a clue".

The chart Cox held up on Monday night — now all-over-the-internet as proof of global warming — essentially represents a remodelling of observed temperature measurements to confirm a belief, that we most likely have catastrophic global warming.

The accurate UAH satellite record shows a spike in temperatures in 1997-1998 associated with the El Nino back then, followed by a long pause of about 17 years, before the recent spike at the end of 2015-beginning of 2016.  The recent spike was also caused by an El Nino event.  Global-temperatures have been plummeting since March, and are now almost back to pause-levels.  Indeed, Roberts was more correct than Cox, when he claimed there had been no warming for about 21 years — despite the rise in atmospheric levels of carbon dioxide.

The second misleading statement from Cox on Monday night concerned the nature of the modern sceptic — often harshly labelled a denier.  Cox suggested that sceptics were the type of people that would even deny the moon-landing.  In making this claim he was no doubt alluding to research, since discredited, funded by the Australian Research Council, that attempted to draw a link between scepticism of anthropogenic global warming and believing in conspiracies.

In fact, astronaut Harrison Schmitt — who actually stood on the moon, drilled holes, collected moon rocks, and has since returned to Earth — is a well-known sceptic of anthropogenic global warming.  In short, Astronaut Harrison knows the moon-landing was real, but does not believe carbon dioxide plays a significant role in causing weather and climate change.  In fact, Schmitt has expressed the view — a very similar view to Roberts — that the risks posed by climate change are overrated.  Harrison has even suggested that climate change is a tool for people who are trying to increase the size of government — though he does not deny that he has been to the moon and back.

Thirdly, Cox has qualifications in particle physics, yet he incorrectly stated that Albert Einstein devised the four-dimensional-space-time continuum.  Those with a particular interest in the history of relativity theory know that while Einstein reproduced the Lorenz equations using a different philosophical interpretation, he was not the first to put these equations into the context of the 4-dimensional continuum — that was done by Hermann Minkowski.  Minkowski reformulated in four dimensions the then-recent theory of special relativity concluding that time and space should be treated equally.  This subsequently gave rise to the concept of events taking place in a unified four-dimensional space-time continuum.

Then again, Cox may not care too much for facts.  He is not only a celebrity scientist, but also a rock star.  Just the other day I was watching a YouTube video of him playing keyboard as the lead-singer of the band screamed, "We don't need a reason".

There was once a clear distinction between science — that was about reason and evidence — and art that could venture into the make-believe including through the re-interpretation of facts.  This line is increasingly blurred in climate science where data is now routinely remodeled to make it more consistent with global warming theory.

For example, I'm currently working on a 61-page expose of the situation at Rutherglen.  Since November 1912, air temperatures have been measured at an agricultural research station near Rutherglen in northern Victoria, Australia.  The data is of high quality, therefore, there is no scientific reason to apply adjustments in order to calculate temperature trends and extremes.  Mean annual temperatures oscillate between 15.8°C and 13.4°C.  The hottest years are 1914 and 2007;  there is no overall warming-trend.  The hottest summer was in 1938-1939 when Victoria experienced the Black Friday bushfire disaster.  This 1938-39 summer was 3°C hotter than the average-maximum summer temperature at Rutherglen for the entire period:  December 1912 to February 2016.  Minimum annual temperatures also show significant inter-annual variability.

In short, this temperature data, like most of the temperature series from the 112 sites used to concoct the historical temperature record by the Australian Bureau of Meteorology does not accord with global warming theory.

So, adjustments are made by the Australian Bureau of Meteorology to these temperature series before they are incorporated into the Australian Climate Observations Reference Network — Surface Air Temperature (ACORN-SAT);  and also the UK Met Office's HadCRUT dataset, which informs IPCC deliberations.

The temperature spike in 1938-1939 is erroneously identified as a statistical error, and all temperatures before 1938 adjusted down by 0.62°C.  The most significant change is to the temperature minima with all temperatures before 1974, and 1966, adjusted-down by 0.61°C and 0.72°C, respectively.  For the year 1913, there is a 1.3°C difference between the annual raw minimum value as measured at Rutherglen and the remodelled value.

The net effect of the remodelling is to create statistically significant warming of 0.7°C in the ACORN-SAT mean temperature series for Rutherglen, in general agreement with anthropogenic global warming theory.

NASA applies a very similar technique to the thousands of stations used to reproduce the chart that Cox held-up on Monday night during the Q&A program.  Gavin Schmidt, who oversees the production of these charts at NASA, discussed these change back in 2014.  I was specifically complaining about how they remodel the data for Amberley, a military base near where I live in Queensland.

Back in 2014, the un-adjusted mean annual maximum temperatures for Amberley — since recordings were first made in 1941 — show temperatures trending up from a low of about 25.5°C in 1950 to a peak of almost 28.5°C in 2002.  The minimum temperature series for Amberley showed cooling from about 1970.  Of course this does not accord with anthropogenic global warming theory.  To quote Karl Braganza from the Bureau as published by online magazine The Conversation, "Patterns of temperature change that are uniquely associated with the enhanced greenhouse effect, and which have been observed in the real world include ... Greater warming in winter compared with summer ... Greater warming of night time temperatures than daytime temperatures".

The Bureau has "corrected" this inconvenient truth at Amberley by jumping-up the minimum temperatures twice through the homogenization process:  once around 1980 and then around 1996 to achieve a combined temperature increase of over 1.5°C.

This is obviously a very large step-change, remembering that the entire temperature increase associated with global warming over the 20th century is generally considered to be in the order of 0.9°C.

According to various peer-reviewed papers, and technical reports, homogenization as practiced in climate science is a technique that enables non-climatic factors to be eliminated from temperature series — by making various adjustments.

It is often done when there is a site change (for example from a post office to an airport), or equipment change (from a Glaisher Stand to a Stevenson screen).  But at Amberley neither of these criteria can be applied.  The temperatures have been recorded at the same well-maintained site within the perimeter of the air force base since 1941.  Through the homogenization process the Bureau have changed what was a cooling trend in the minimum temperature of 1.0°C per century, into a warming trend of 2.5°C per century.

Homogenization — the temperature adjusting done by the Bureau — has not resulted in some small change to the temperatures as measured at Amberley, but rather a change in the temperature trend from one of cooling to dramatic warming as was done to the series for Rutherglen.

NASA's Goddard Institute for Space Studies (GISS) based in New York also applies a jump-up to the Amberley series in 1980, and makes other changes, so that the annual average temperature for Amberley increases from 1941 to 2012 by about 2°C.

The new Director of GISS, Gavin Schmidt, explained to me on Twitter back in 2014 that:  "There is an inhomogenity detected (~1980) and based on continuity w/nearby stations it is corrected.  #NotRocketScience".

When I sought clarification regarding what was meant by "nearby" stations I was provided with a link to a list of 310 localities used by climate scientists at Berkeley when homogenizing the Amberley data.

The inclusion of Berkeley scientists was perhaps to make the point that all the key institutions working on temperature series (the Australian Bureau, NASA, and also scientists at Berkeley) appreciated the need to adjust-up the temperatures at Amberley.  So, rock star scientists can claim an absolute consensus?

But these 310 "nearby" stations, they stretch to a radius of 974 kilometres and include Frederick Reef in the Coral Sea, Quilpie post office and even Bourke post office.  Considering the un-adjusted data for the six nearest stations with long and continuous records (old Brisbane aero, Cape Moreton Lighthouse, Gayndah post office, Bundaberg post office, Miles post office and Yamba pilot station) the Bureau's jump-up for Amberley creates an increase for the official temperature trend of 0.75°C per century.

Temperatures at old Brisbane aero, the closest of these station, also shows a long-term cooling trend.  Indeed perhaps the cooling at Amberley is real.  Why not consider this, particularly in the absence of real physical evidence to the contrary?  In the Twitter conversation with Schmidt I suggested it was nonsense to use temperature data from radically different climatic zones to homogenize Amberley, and repeated my original question asking why it was necessary to change the original temperature record in the first place.  Schmidt replied, "Your question is ill-posed.  No-one changed the trend directly.  Instead procedures correct for a detected jump around ~1980."

If Twitter was around at the time George Orwell was writing the dystopian fiction Nineteen Eighty-Four, I wonder whether he might have borrowed some text from Schmidt's tweets, particularly when words like, "procedures correct" refer to mathematical algorithms reaching out to "nearby" locations that are across the Coral Sea and beyond the Great Dividing Range to change what was a mild cooling-trend, into dramatic warming, for an otherwise perfectly politically-incorrect temperature series.

Horton, the somewhat disillusioned editor of The Lancet, also stated recently that science is, "Afflicted by studies with small sample sizes, tiny effects, invalid exploratory analyses, and flagrant conflicts of interest, together with an obsession for pursuing fashionable trends of dubious importance, science has taken a turn towards darkness."  I would not go that far!  I am not sure it has taken a turn for darkness — perhaps just a turn towards the make-believe.  Much of climate science, in particular, is now underpinned with a postmodernist epistemology — it is simply suspicious of reason and has an acute sensitivity to the role of ideology in asserting and maintaining particular power-structures including through the homogenisation of historical temperature data.

Monday, August 15, 2016

Red Tape Is Strangling Australia's Primary Resources Industries

Changes to native vegetation laws introduced by the Newman government in 2013 encouraged agricultural production by allowing land clearing on private property according to requirements outlined in self assessable codes.  These codes specify in great detail how land clearing is to be managed to minimise negative environmental effects.

Lyndon Schneiders, the Wilderness Society national campaign director, claims these changes led to the decimation of Queensland's biodiversity.  This claim is wrong and lacks context.

Firstly, there are still rules governing native vegetation clearing.  About 15 codes of conduct specify precisely what can be ­undertaken during land clearing.  While these codes are self-­assessed, they carry significant bite:  failure to comply could put a farmer in jail for up to five years.

Secondly, the clearing done so far has barely affected endangered or threatened species.  That land has much higher social value when used for production.

Thirdly, land clearing has been anything but a free-for-all.  Even Schneiders' own estimate of one million hectares of clearing represents only a tiny proportion of the total agricultural land in the state.  In fact, this equates to just a 0.6 per cent increase in agricultural use because of land clearing.  And even this is an overstatement:  a share of that clearing would have taken place under previous laws.

Fourthly, in 2013 the Queensland government set a target of doubling agricultural production by 2040.  It is inconceivable that this would be achieved through productivity improvements alone.  More land needs to be developed if the Palaszczuk government is to meet this target.

Finally, not once does Schneiders reference agribusinesses, jobs or communities.  The agriculture sector in Queensland employs 65,500 people in 30,500 busi­nesses, contributing more than $10 billion to the state economy each year.  What will happen to these workers and businesses under the Palaszczuk changes?  Schneiders doesn't say.  Perhaps they don't count.

And it gets even worse.  Under the proposed laws, if a farmer follows government advice and clears land, but the advice is later found to be wrong, the farmer could be held liable.  This is not a remote risk.  The Queensland Dairyfarmers' Organ­isation noted that information provided by ­departmental officers has often been found to be incorrect.

Additionally, the onus of proof would be reversed.  Landowners would not be entitled to compensation should their land value plummet.  And the changes will be retrospective.

Unfortunately, landholders all across the country are similarly ­affected by bad red tape.  The draft Productivity Commission report into regulation of agriculture, ­released on July 29, made this clear by highlighting the array of complex, duplicative and inconsistent red tape requirements on the sector.

Nor is agriculture the only sector struggling with the red tape burden.  Australian prosperity is built on primary industries but state and federal governments are loading them up with excessive, unnecessary and often counter-productive rules and regulations.

Just last week one of Australia's largest potential uranium mines, the Yeelirrie mine located in Western Australia, was blocked because of the effect it could have on blind, microscopic desert prawns that are just 0.3mm in size.

Constructing the Roy Hill iron ore mine required 4147 licences, permits and approvals from federal, state and local governments.

And it has taken more than six years and a billion dollars for Adani to get approval for its central Queensland coalmine — and that development still might not even go ahead.

I have calculated that red tape costs the Australian economy $176bn a year in forgone economic output — equivalent to 11 per cent of GDP.

Reducing this imposition must be central to any plan to spur growth and restore our nation's ­finances.

By now, the only realistic ­option to repair the federal budget is to boost the economy with a comprehensive and revitalised red tape reduction program.

Cutting spending is effectively off the table.  And raising taxes would further hamper growth and job creation.

There are no silver bullets in economic reform.  But there are certainties.  Cutting red tape to allow businesses to develop our natural resources and create jobs will stimulate growth, which is the only way we will ever repair the budget.

Friday, August 12, 2016

ABS Census Farce Reminds Us Statistics Are The ''Eyes Of The Bureaucrat''

In 1961, Murray Rothbard, the most important libertarian economist of the 20th century, wrote about the evils of government statistics.

"Statistics are the eyes and ears of the bureaucrat, the politician, the socialistic reformer.  Only by statistics can they know, or at least have any idea about, what is going on in the economy ... How could the government impose price controls if it didn't even know what goods have been sold on the market, and what prices were prevailing? ... Cut off those eyes and ears, destroy those crucial guidelines to knowledge, and the whole threat of government intervention is almost completely eliminated ... It is difficult to see what, for example, the central planners at the Kremlin could do to plan the lives of Soviet citizens if the planners were deprived of all information, of all statistical data, about these citizens.  The government would not even know to whom to give orders, much less how to plan an intricate economy."

For Rothbard, the easiest way to cut the size of government is to abolish government statistics.  "Statistics, so vital to statism, its namesake, is also the state's Achilles heel."

When Nick Xenophon and the Greens advocated boycotting parts of Tuesday night's census, they probably didn't realise how far they were advancing the cause of anarcho-capitalism in Australia.  They also might not have realised how their stance on the census was so completely at odds with the other things they say.

So for example, Xenophon enthusiastically supports the federal government-owned Australian Submarine Corporation helping build $50 billion worth of submarines — yet the $470 million census run by the Australian Bureau of Statistics, a federal government agency, is "a monumental failure of a government program of the first order".

Meanwhile the Greens are eager for the government to take ever-increasing amounts of people's income through higher taxes, yet they're not happy when the government wants to keep people's personal details on a database for four years.

Still, one doesn't have to be a full-blown Rothbardian to have grave concerns about the census.  And no matter how muddle-headed Xenophon and the Greens might be sometimes, their call for a boycott of elements of the census was absolutely right and appropriate.  It was only after they were willing to take the extreme step of a boycott that the government and the mainstream media finally paid attention to the grave privacy risks of the census.  This was despite the fact that many (including myself) had for months been talking about the unprecedented invasion of privacy posed by the census.

Until now the failure of the census has been portrayed as a technology stuff-up.  But it's also a story of the unrestrained arrogance of government bureaucrats and the reluctance of ministers to challenge those bureaucrats.

It's unacceptable for the Bureau of Statistics to want to hold in perpetuity the personal details of individuals as revealed in the census.  Yet it appears no minister has thought to challenge the bureau's demands.  The supposed justification for the ABS keeping personal data is that it will provide for a "richer and dynamic statistical picture of Australia".  Again, until Nick Xenophon and the Greens started speaking out about the census, no one had bothered to ask the ABS what such gobbledygook means.

No one has asked questions even more basic — such as why the government should know what a person's religion is.  Sure, it's interesting to know the percentage of the population practising Zoroastrianism, but just because something is interesting to social science researchers doesn't mean citizens should be coerced into handing over such information to the government on pain of a fine for non-compliance.

If we are to have a census, it should be voluntary.  (For that matter, voting should be voluntary too.)

Even better than making the census voluntary would be to abolish it all together.  Which is what a number of other countries, including Britain, have done.  In 2010 then Canadian prime minister Stephen Harper, in an effort to strengthen people's privacy, abolished his country's compulsory census.

At least something good has come out of the census debacle.  Australians now have a much better understanding of the limits of technology — and of the limits of government.

Wednesday, August 10, 2016

As A Rule, Bureaucracy Is Smothering Agriculture

The recently released draft report highlighted the breathtaking array of complex, duplicative and often inconsistent red-tape requirements that hold our agricultural sector back.

Farmers are best suited to farming;  not filling out forms, complying with archaic rules and battling distant regulators.

The Federal Government should heed the commission's calls and cut back on reams of stifling red tape.

The quicker the change, the quicker the benefits will accrue.

In particular, the privatisation of major ports and foreign-flagged vessels will improve efficiency and get transport costs down.

Removing bans on genetically modified crops will give consumers more choice and allow innovation.

Repealing the re-regulation of international sugar marketing will encourage investment in sugar mills and improve competition.

The sheer volume and growth of red tape is out of control.  Unfortunately, tinkering around the edges is no longer enough.  Bold reform is needed to permanently eradicate red-tape.

To do this, the commission should consider how political institutions could be reformed.

The best place to start is with our three-tiered red-tape system.  Many activities across the economy are regulated by local and state governments as well as at the federal level.

This extra regulation provides no extra benefits to the environment or public safety.  It just adds costs.

A basic principle of effective regulation is that it should be developed and implemented by those nearest to the regulated community.  This is where the local knowledge is.

A good example is environmental regulation.  The Commonwealth has responsibility for regulating matters under the Environmental Protection and Biodiversity Conservation Act.

But many requirements under this Act — such as the need for businesses to prepare environmental impact assessments — are also required at the state level.

Friday, August 05, 2016

Latest PBO costings won't hold any parties to account

While the Parliamentary Budget Office's (PBO) 2016 post-election report represents a massive undertaking in time and effort, it won't hold any political party to account, nor provide any additional transparency to the electoral process.

In 2013, then treasurer Wayne Swan announced that the PBO would provide full costings for all election promises made by political parties within 30 days of an election being held.

"Transparency would be further enhanced if the PBO were to prepare a post-election audit of all political parties, publishing full costings of their election commitments and their budget bottom line 30 days after an election.  This will remove the capacity of any political party to try to mislead the Australian people and punish those that do."

Who could possibly be against more transparency?  Or opposed to holding political parties to account?  No doubt Swan thought he was being clever.

Certainly he was hoping to cast the then opposition as being fiscally irresponsible.  Swan would soon lose his position as treasurer, but the post-election audit lives on.

In one sense the fact that budgets and budgeting make up a large proportion of political debate is a good thing.  Australians intuitively understand that underpinning a flourishing civil society is a sound economy.

To the extent that Australians are not as "relaxed and comfortable" as they were under John Howard, this is due to angst over the economy.  The downside of the obsession with budgets and budgeting is that many Australians don't have the time or inclination to explore the numbers in any detail.

The first problem with the PBO's latest release is that the material is published after the election.  By the 2019 election few voters will be interested in the PBO costings of the last election.

Policy tragics may well want to point to past mistakes, but overwhelmingly voters are forward-looking.  After all, Labor was able to win the 2007 election after its 2004 costing disaster.  The Coalition won in 2013 after its 2010 difficulties.

To avoid misleading the voters, this information needs to be available before the election.  That, of course, is not practicable.

The second problem with the numbers is that they lack context and proportion.  For example, we now "know" that the Greens policies would improve the budget bottom line by $8.2 billion over the forward estimates.

The Coalition's policies improved the bottom line by a mere $1.1 billion, while Labor's policies would have resulted in a $16.6 billion deterioration.  We're invited to believe that anyone concerned about debt and deficit should vote for the Greens.  Well, maybe not.

The Greens proposed tax increases of some $104.9 billion and increased spending of a mere $96.4 billion.  There are several problems here.  First, it beggars belief that an additional $100 billion of tax revenue could be extracted from the economy with no adverse effects.

For example, the Greens would abolish accelerated depreciation for aircraft, the oil and gas industry and motor vehicles.  The costing assumes "there is no change to the overall level or timing of investment as a result of this proposal".  But how plausible is that assumption?  This is a general problem with all political budgeting in Australia — the costings simply determine if the numbers are correctly calculated, not whether the policy is plausible or even sensible.

Costing methodology does not investigate the broader macroeconomic consequences of policy proposals.  To be sure, there are good reasons for this oversight, but it is a serious limitation of the usefulness of these costing exercises.

Then there is an implementation problem.  Pre-election policies are simply a wish-list.  There is no point in holding parties to account for pre-election wish-lists when actual policy outcomes are determined by the election itself.

In 2010, Julia Gillard had to promise there would be no carbon tax under her government.  Yet after the election, in order to actually form government, she had to break that promise.

Similarly, who would have expected four One Nation senators after the recent election?  The costs of any policy will be determined by the horse-trading necessary to pass legislation through the parliament.

To be clear, the ability to undertake plausible and sensible policy costings and prepare coherent budgets is an important part of winning office.  Yet those numbers need to be placed in a broader framework and narrative, which is lacking in the PBO report.

Thursday, August 04, 2016

Look to New Zealand to help people on long-term welfare

Several aspects of the New Zealand welfare model are likely to deliver significant benefits for Australians trapped in long-term welfare dependency.

In recent weeks a flurry of political announcements has been made to the effect the federal government intends to reshape the welfare system as we know it.

The Social Services Minister Christian Porter indicated the Turnbull government endorses a so-called "investment approach" in which more intensive assistance packages are tailored for people at risk of long-term welfare dependency.  And in the very near future, the government expects to obtain results from a study using extensive longitudinal data analysis of DSS clients gathered over the past 15 years.

This information should reveal client groups with similar characteristics transitioning in and out of receiving certain working-age welfare payments, and the length of time that groups of people are getting welfare.

The reform agenda is expected to go beyond the more intensive use of welfare administrative data, since the government also intends to commission the non-government sector to establish plans assisting vulnerable people off the welfare rolls.

Encouraging tailored services for targeted groups, and even "social impact bonds" rewarding social entrepreneurs with public funding only when they achieve adequate outcomes, a potential exists for economic and social participation to be enhanced greatly.

The inspiration for these suggested changes happen to come from our near neighbour, New Zealand, whose centre-right government has pioneered better evaluation of welfare costs and is experimenting with alternative, non-governmental modes of assistance.

After finding that an insufficient focus on paid employment in the New Zealand welfare system created high levels of avoidable long-term benefit receipt, the Key government announced its investment approach to welfare in 2011.

The epicentre of this approach is an actuarial model projecting the future fiscal liabilities associated with long-term welfare receipt, and using projections to better target assistance measures based on the likelihood and extent to which future dependency could be reduced.

If providing more upfront assistance to somebody on welfare today would reduce their probability of remaining on welfare long-term, implying a reduced forward liability, then such a strategy could conceivably be endorsed under the investment approach.

As New Zealand's Minister for Finance Bill English said during a recent visit to Australia, "reducing misery, rather than servicing it, requires us to organise responses around these individuals, with them at the centre of public spending".

English added, "we are prepared to spend money now to secure better long-term results for the most vulnerable … and lower costs to the government in the future".

The Key government has claimed improvements in welfare outcomes and budgetary cost projections in the longer term, although some of these outcomes may also be influenced by improved economic conditions and refined actuarial welfare liability estimation methodologies.

Even so, the assessment that the investment approach contributed to 40,000 fewer Kiwi children living in a benefit-dependent household is noteworthy for Australia with a similar problem of intergenerational welfare dependence.

In fairness to the other side of the argument, however, the reforms have been contentious and numerous defenders of the welfare status quo, both here and across the Tasman, have argued the investment approach harms people more than it helps.

Some New Zealand critics argue for a broader balancing of economic benefit and cost considerations, rather than a liability calculation, when evaluating welfare policy changes, while others worry that reform is merely code for cutting people off welfare at any cost.

Economists have good reasons to advance the cause for comprehensive cost-benefit appraisals to assess the social, economic and fiscal performance of the welfare state, and it is possible future welfare policy would be framed using this broader methodological approach.

But the quantification of the full gamut of benefits and costs is difficult and prone to misapplication, not to mention political controversial every step of the way, so social policymakers maybe are some distance away from practical and feasible cost-benefit at this stage.

The advocates for change have been at pains to indicate their investment approach to welfare isn't a fiscal cut model in disguise, given that actuarial analysis may reveal additional and upfront supports are needed to build up economic resiliency for certain welfare client groups.

Certainly the New Zealand Productivity Commission, in a recent social services reform inquiry, "received no evidence that a simplistic interpretation of the [investment approach] is encouraging staff to, for example, push people off benefits they are entitled to or into unsuitable jobs".

Anyhow, a reduction in long-term fiscal liability imposed by the welfare state shouldn't necessarily be interpreted as problematic, because of the correlation between lessening welfare dependency and improved economic and social participation.

As many welfare experts rightly indicate, a sustained transition from fiscal dependency to satisfying and meaningful employment may contribute mental and other health improvements, better social connectivity, self-reported enhancements to well-being and other benefits.

Several commentators who criticise the investment approach to welfare reform decry the lack of satisfying employment opportunities available for those transitioning off welfare.

Accepting the argument that the availability of high-paying and interesting work, or lack thereof, is a legitimate concern, then it would be best to reform policies in an effort to ramp up economic growth and cut living costs.

The point being made here is that initiatives such as deregulating labour markets, eliminating occupational licensing restrictions, cutting red tape and taxes on childcare and other important services are necessary to make measures for a more sustainable welfare system a resounding success.

A dimension to this debate that seems to be somewhat downplayed is the potential of the investment approach to transform bureaucratic incentives, traditionally oriented toward maximising welfare budgets with seemingly less of a concern about affordability and maintaining a genuine safety net.

In this context, Jenesa Jeram of the New Zealand Initiative has poignantly asked, "why should taxpayers entrust government with even a cent more of their money, when it is unclear whether the current spending is effective and reaching the right people?"

The investment approach is unlikely to serve as the final destination for welfare reform, but nonetheless would appear to be an improvement upon the status quo.

If the model could be more ambitiously used as a basis for comparing and rewarding the efficacy of alternative publicly funded welfare interventions, delivered either by government or NGOs, then all for the better.

It would be a shame for Australia to forgo welfare reform, akin to the investment approach or even something else, for fear that it might actually reduce long-term dependency upon the state.

Wednesday, August 03, 2016

Cutting Red Tape That Binds Mining

To secure Queensland's mining future, cutting onerous red tape must be a key reform priority.

Given the outlook for economic development in China, India and other developing countries, mining is likely to remain a Queensland mainstay in the years and decades to come.

Although renewable energies have a place in future world energy supply, the fact is millions in the world rightly want reliable and affordable power to improve their lives.

So even if mining booms one and two of the previous decade have passed, reports of the death of the state mining sector are premature.

Considering the direct and indirect effects of mining, recent figures show it contributes 22 per cent to Queensland's gross output, provides $22 billion in wages and salaries and supports up to 366,000 jobs in the state.

These big numbers are difficult to ignore and the secret to building on these positive impacts is to ensure government policies are as unobtrusive as possible to mining sector growth.

And a central focus of unobtrusive policy, going forward, is that unnecessary and expensive red tape on exploration and production is reduced, and regulatory standards are improved to reflect world best practices.

I estimate the cost of regulation stands at a massive $176 billion a year, with the mining sector especially burdened.

Excessive regulations are reflected in the delays associated with opening a mine, with one Minerals Council study finding that Australian thermal coal projects suffered 1.3 years additional delay relative to competitor countries.

But delays can tie up mining ventures for much longer.  The $22 billion Carmichael mine project took more than six years to gain approval.  Even then, delays persist with environmental and other activist groups eager to tie up the project approval process in the courts.

Mining companies and industry associations argue the sheer mountain of licences and permits required generates extensive compliance costs via paperwork, specialist adviser fees, and so on.

There is little question the costs from regulatory impositions hamper investor sentiment, with a Queensland Resources Council study showing "poor and uncertain regulation" is a great concern.  Seventy per cent of CEOs surveyed said that environmental policy and regulatory reforms were the issues most pressing for them when operating in Queensland.

By no means does all this suggest the best response is to eliminate all regulatory approvals, licences and permits.  Rather, the issue is to find the sweet spot that achieves public policy objectives at minimal costs.

Eliminating unwarranted red tape and getting better regulatory standards, will ensure we don't miss out on future waves of mining sector growth.  For the sake of Queensland mining's prosperous future, we must fix mining overregulation.

Tuesday, August 02, 2016

Local Farmers, Not Distant Regulators, Are Best Placed To Protect Our Environment

Toobeah farmer John Norman's nightmare experience with red tape and excessive bureaucracy illustrates an issue many farmers face.

It shouldn't have taken Mr Norman long to prolong a natural event that occurred on his property following a flood event.  Water just needed to be added to the natural flow from his farm.  But Mr Norman ended up spending six weeks negotiating the red tape maze setup by multiple government agencies at considerable personal expense.  This not only cost time, money and resources.  It also jeopardised environmental outcomes.

Unfortunately, this is not an isolated incident.  Recent research highlights the extent of the problem:  Each and every year red tape is costing our economy more than $176b.  And our red tape state is now comprised of some 1,181 entities, bodies and administrative relationships.  Mr Norman was just the latest farmer to get caught in this web of excessive bureaucracy.  Indeed, the recent Productivity Commission report highlighted a litany of duplicative, unnecessary and costly regulations across the entire agricultural sector.

The report found how coastal shipping and heavy vehicle regulation increases transport costs, how native vegetation laws can make basic land-clearing nearly impossible and how restrictions on foreign investment reduce farm productivity and land value.  These red tape costs can be the difference between success and failure.  The key lesson to learn from Mr Norman's experience is farmers and land-owners are best suited to manage their own land.  When they are empowered to do this they not only do the right thing by their business and community.  They also do the right thing by the environment.

Monday, August 01, 2016

We Need To Raise The Bar Of Our Criminal Justice System

The recent Four Corners exposé of mistreatment of young people in juvenile detention in the Northern Territory shocked all Australians.  The Prime Minister has correctly called a Royal Commission into the abuse.

Although the terms of reference for the review are quite narrow, Australia should take this incident as an opportunity to reconsider our approach to criminal justice more generally.  Because the kids who suffer in abusive detention centres will have a tough time staying off the path to a life of crime, where they will join a growing number of their countrymen, and from which there is currently little chance of escaping given the way our criminal justice system operates.

We have a rapidly growing prison population.  There are now more than 36,000 people in Australian prisons, up from less than 9,000 just 40 years ago.  At 196 per 100,000 adults, Australia's incarceration rate is at its highest level since just after Federation.  So while Gillian Triggs is exaggerating when she says Australia has a "culture of detention", there is a kernel of truth to her claim.  We are using incarceration more and more.

And this approach does not come cheap.  On average, an adult prisoner costs taxpayers $100,000 per year.  Total nationwide expenditure on corrective services is now more than $2.6 billion annually.

Perhaps this expenditure could be justified if our criminal justice system was getting outstanding results.  Unfortunately though, there is reason to believe that the growing use of incarceration is not preventing crime from rising.  It is also not stopping people from becoming career criminals.  59 percent of adult prisoners have been incarcerated before.  So not only is incarceration expensive, we are losing even more money in the long run by creating conditions that increase the chances of recidivism.

Public safety is the first and last goal of criminal justice.  However, as the Four Corners report reveals, being a hawk on public safety should mean taking criminal justice reform seriously.  Does anyone seriously think that these kids are more likely to become productive members of society after suffering this kind of abuse?  As long as we intend to release those we place in prison or detention back into society, we need to care about what condition they will be in when they get out.

So we should consider whether everyone who is being locked up actually needs to be, and also what happens to offenders once they leave prison.

In 2013, the Senate held an inquiry into the value of Australia adopting a justice reinvestment model.  Justice reinvestment is the idea that imprisoning fewer people saves money, which can be redirected to other programs aimed at reducing crime.

The inquiry went nowhere, largely because the scope of the proposed reinvestment was too wide.  Many people seem to think that justice reinvestment should mean investing in community programs with only a tangential link to criminal justice, on the premise that crime is a result of social conditions rather than individual choice.  This ideological understanding of crime will never form the basis of sound, much less popular, criminal justice reform.

Instead, justice reinvestment should mean strengthening probation, parole, and re-entry services, and the police.  It should mean improving criminal justice, not abolishing it.  The premise must be that individuals are responsible for their own choices, and the goal should be to facilitate and incentivise gainful employment.  This how we limit recidivism and protect our communities.

Even though Aboriginal Australians are over-represented at all levels of the criminal justice system, it would be a mistake to focus reform efforts solely on this fact.  Reforms should concentrate on the incarceration of nonviolent offenders — those guilty of property offences, drug offences, and regulatory offences.  This focus is consistent with community safety and equality before the law, and will also benefit many Aboriginal Australians.

It is worth noting too that a justice reinvestment approach that strengthens the frontline of the criminal justice system is the model that best applies to the small, regional communities in which many Aboriginal Australians live.

The social and economic costs of Australia's approach to incarceration are growing, and yet crime and recidivism are not dropping.  There is therefore a prima facie case for reform that demands investigation.  Put bluntly, the status quo is making us less safe, wasting our money, and destroying lives.  This is a nationwide issue, calling for leadership at all levels of government.  Criminal justice reform is a real opportunity to do some good for any politician with the courage to take it on.