Indigenous Treaty Would Divide Australia Into Two Nations According To Race

All Australians are equal.  This principle is the basis of our freedoms and a cornerstone of the Australian constitution.

Our nation's founding document should unify us — not divide us.

Any proposal that seeks to enshrine division between Australians on the basis of race should therefore be rejected.  And it is why any suggestion of a treaty between Indigenous and non-Indigenous Australians should also be rejected.

Rarely has such a powerful defence of equality and the value of the individual been expressed as on a hot afternoon in Washington DC on 28 August 1963.

At 3pm that afternoon in front of the Lincoln Memorial, Martin Luther King jnr created history when he uttered the words:  "I have a dream that my four little children will one day live in a nation where they will not be judged by the colour of their skin, but by the content of their character."

These words are as real and as relevant in 2017 as they were 53 years ago.

It is this sentiment of equality that Australians should bear in mind when considering proposals to change the Australian constitution.

The most recent proposal for constitutional change is contained in the Uluru Statement, released last week.

The Uluru Statement is the culmination of three days of discussions amongst Indigenous leaders at Uluru last week.  The meeting in Uluru follows six months of community consultations with Indigenous leaders held by the government-appointed Referendum Council.

The Uluru Statement is a response to the key issue these deliberations were established to address:  whether Indigenous leaders support the proposal to "recognise" Aboriginal and Torres Strait Islanders in the Australian constitution, and if so what form the change should take.

The Statement calls for a treaty between Indigenous and non-Indigenous Australians, and also proposes the establishment of a new constitutional body to represent Indigenous Australians:  "We call for the establishment of a First Nations Voice enshrined in the constitution."

These are radical proposals that will divide Australians on the grounds of their racial identity.  These proposals are the manifestation of radical identity politics.

Formally dividing Australians by law is a dangerous idea, doubly so when that division is done on the basis of race, skin colour, ethnicity or indigeneity.

The Commonwealth parliament represents all Australians.  This is why an advisory body for Aboriginal and Torres Strait Islander Peoples enshrined in the constitution cannot be accepted.

A separate body, whether it is called an Aboriginal and Torres Strait Islander peoples advisory body, a new chamber of the Commonwealth parliament, an Indigenous parliament, or a First Nations Voice undermines the idea that all Australians are equal under our democratic system.  All policy decisions are Indigenous policy decisions, because Indigenous Australians are Australians.

Treaty, which is sometimes referred to by the Yolgnu word for treaty, "Makarrata", would divide Australia into separate nations.  Aboriginal and Torres Strait Islander peoples are Australian.  The idea that they are separate from Australia is dangerous, and a treaty between Indigenous and non-Indigenous would divide Australians according to race.

Australia is one of the oldest and most successful democracies because our constitution is based on the idea of the equality of all Australians.

If any constitutional changes are to be contemplated they should make the constitution truly colour-blind and remove all references to race in the document.

There are two current sections in the Australian constitution that refer to race — sections 25 and 51 (xxvi).  Section 25 was intended to prevent state governments from restricting the right to vote according to a person's race.  Section 51(26) gives the Commonwealth government the power to pass race-based laws.

Section 25 is unnecessary because equal voting rights are already guaranteed under the constitution.  Section 51(xxvi) is discriminatory and illiberal.  Race-based laws are incompatible with the equality of all people.

Taking out these sections removes the Commonwealth government's constitutional power to divide Australians.

If these two sections are removed, no new references to race, or skin colour, or ethnicity, or indigeneity should be added.

I believe there should be no references to race in the constitution.  The constitution should not divide Australians according to race.

Australia's success as a free and prosperous country is founded on the idea that all humans are of equal worth.  Regardless of race or ethnic background, all Australians must be treated equally by the government and by the law.

In the constitution, all Australians should have the same rights and should share the same responsibilities.

Race has no place in the Australian constitution.

Fairfax Media And Liberal Party Face Same Survival Dilemma In A Changing World

Two great and venerable Australian institutions are facing profound challenges.

Each is suffering from a combination of circumstances beyond their control as well as from their own mistakes.

Each is confronted by a range of competitors eager to erode their once-assured market dominance.  Each has a long and proud history embellished with significant achievement.  Yet each has lived for too long off its past glories.

Finally, each will eventually have to answer a fundamental question about its future.  Whether the interests of their shareholders in one case, and members in the other are best served by them continuing to exist as the single entities or whether they should be broken up.

Those two institutions are of course Fairfax Media Limited and the Liberal Party of Australia.

The internet has decimated print journalism, but for decades Fairfax directors have acted as if there's nothing they can do about it, and their only role is to manage the graceful decline and fall of the company.

Similar thinking prevails in the Liberal Party.  Malcolm Turnbull and Scott Morrison claim that their high-spending, high-taxing budget of a fortnight ago is their second best option and they're powerless to act any other way in the face of a hostile senate and an electorate that seemingly wants ever-bigger government.  But the make-up of the senate is the result of the Liberals' own decision to call a double dissolution election.

In any case, the Liberals spend little time these days trying to change or lead public opinion.  After all, the Liberals have held the federal government treasury benches for 14 of the past 20 years.  The only people to blame for the Liberal Party coming to more and more resemble the Labor Party are the Liberals themselves.

POOR DECISIONS

The predicament of Fairfax and the Liberal Party has been made worse by some poor management decisions made over the years.

Fred Hilmer, the Fairfax CEO from 1998 to 2005 ran the company precisely the way you'd expect from a management consultant.  In his book The Fairfax Experience — which contains four pages of the organisation charts — he revealed his frustration at not being able to accurately calculate the minimum production cost of each story in a newspaper.  It's easy to understand why so many observers believed Hilmer's commitment to quality journalism was limited.

Scott Morrison is acting as treasurer in the manner expected of a former immigration minister.  Given his claim that freedom of speech is unimportant, and his aggressive campaigns for retrospective superannuation laws, higher income taxes, and a "levy" — read tax — on banks paid for the banks' customers and shareholders, it's easy to understand why it could be argued Morrison's affinity with the principles of liberalism is limited.

Fairfax believed its print classified advertising, the "rivers of gold", would last forever.  The Liberal Party leadership acts as if it believes the party's "base" can be treated with contempt, but somehow that same "base" will continue indefinitely to donate to the party and vote Liberal.  In the years to come we'll see whether the Australian Conservatives Party, the Liberal Democratic Party, and even One Nation are to the Liberals, what REA Group, Carsales.com, and Seek have been to Fairfax.

In this regard the Liberals do have one advantage over Fairfax.  The government forces people to vote.  As yet the government doesn't force anyone to buy a newspaper.  (Although, of course, the government does force people to pay taxes to fund the ABC.)

It's as hopeless for Fairfax to wish for the rivers of gold to return as it is for the Liberals to yearn for John Howard to come back.  The truth is that Fairfax and the Liberals have to face the future on their own.

The future is for both organisations is uncertain.

Regardless of whether the current takeover proposals for Fairfax succeed, hopefully the company's major mastheads — in whatever form they continue — will be more than merely a placard for real estate advertising.  Some of the best bits of Fairfax, such as this newspaper, might have a more secure future as a standalone entity owned by a proprietor committed to the crafts of reporting, analysis and explanation.

For the Liberal Party the question is whether its progressive liberal, conservative, and libertarian wings have anything in common with each other anymore.

You Don't Argue With Ms 61 Per Cent

Malcolm Turnbull must be staring at UK Prime Minister Theresa May's poll numbers with vaulting envy.  The Britain Elects polling average puts the Conservatives at 47 per cent primary vote at the time of writing, giving her a potential majority of up to 130 seats — up from David Cameron's working majority of just 12.  In stark contrast, Turnbull's latest Newspoll places the Coalition at an election-losing 36 per cent primary vote.

It is easy to attribute this to circumstance.  May is the preferred Prime Minister by 61 per cent of voters;  just 23 per cent want UK Labour leader Jeremy Corbyn, the incompetent babbling unreconstructed Marxist.

May's success, however, is not pure luck or inevitable.  She came to power facing extraordinarily challenging times — a deeply divided party and country over the Brexit vote, (false) predictions of an immediate economic downturn and needed to define her leadership and manage leaving the European Union.  She has proven an adept, steadfast political operator.  But more than anything else, May understands that, now more than ever, values matter in politics.

May's first speech as Prime Minister made clear who she represents:  the "just about managing", known as the JAMs.  These are her Howard's Battlers or Menzies' Forgotten People.  Not the top, able to guide their own way, or the bottom, supported by a generous welfare state, but the in between.  May's approach revolves around connecting to this group, the hardworking, dedicated, and traditional, too often ignored by London-elites.

She talks about values.  As a Christian, and daughter of a vicar, she expressed her opposition to Cadbury removing the word Easter from their annual egg hunt events.  As a supporter of the "fundamental British value" of freedom of speech, she has deplored university "safe spaces" and shutting off debate.  As someone from a modest background who went to a grammar school — a selective school for the educationally gifted — she supports their expansion against strong opposition.

May's values are striking in her most difficult task:  defining and negotiating Brexit.  She has notably declared "I want us to be a truly Global Britain".  This sentiment shows comparisons between Brexit and the nativist rhetoric of Trump in the United States, or Le Pen in France, are misleading.  May has committed Britain to free trade with the EU and new deals with the rest of the world including Australia.  Importantly, she has rejected calls for Britain to stay in the EU common market, which would have made a mockery of the Brexit decision to "take back control" by leaving rules, regulations, and immigration in the EU's hands.

May is returning Britain to its position of global leadership on trade.  These are the same liberal principles that, after the abolition of the Corn Laws in 1846, led to Britain's immense prosperity and global success in the second half of the nineteenth century.  Britain's leadership is good news for Australia, which stands to benefit in the shorter term from a trade agreement, as well as in the longer term from a new independent free trading voice at the World Trade Organisation.

Her steadfast leadership on Brexit has transformed the country from deeply divided — 52 per cent in favour, 48 per cent against — to form a new general consensus that accepts the referendum result.  A recent poll from YouGov found that 68 per cent want Britain to just get on with leaving the European Union — 45 per cent "Hard Leavers" who originally supported Brexit and 23 per cent who supported Remain but accept the national vote.  Just 22 per cent of Britons are "Hard Remainers", who believe the government should ignore the referendum result.

Sadly, on domestic economic policy, her liberal instincts are dramatically lacking.  She is no Margaret Thatcher.  Last year at party conference May declared that the government "should be prepared to intervene", supposedly in the name of the JAMs.  The Conservatives' election manifesto includes capping energy prices, increasing the minimum wage, abandoning Cameron's pledge to not increase income tax, and requiring workers representation on boards.  This agenda will not only face internal opposition after the election, it will make Britain poorer.

The act of Brexit itself has distracted from other important tasks.  The government cited Brexit to justify abandoning plans for a budget surplus by 2020 — now stretched out to 2025.  May has not expressed any interest in reducing the size or scope of Britain's bloated government (42 per cent of GDP, we're at 36 per cent in Australia).  In addition, there is a lack of commitment to dismantle burdensome EU regulations, which are to be transferred into domestic law for continuity.

May's leadership style is boring and unflashy.  She exudes stability in uncertain times, presenting a timid yet firm projection of strength.  May has, for example, refused to do live televised election debates, a relatively new feature of British politics that began in just 2010.  The display of macho is not for her — and would likely elevate Corbyn.

Notably, May also understands the importance of listening to the backbench and base of her party.  Despite supporting Remain in the Brexit vote, she appointed of prominent Leave supporters to Cabinet, including Boris Johnson to the foreign ministry.  She has been responsive to the base's concerns.  Earlier this year the exchequer announced an increase in income tax on the self-employed, in clear contradiction to 2015 election commitments.  The announcement faced immediate backbench and public backlash and was dropped within a week.  This contrasts starkly with Turnbull's broken promise on superannuation changes last year — which were damagingly left on the table because the base was assumed to not matter.

May's plentiful success should be closely watched by the right side of politics in Australia.  Although imperfect, she has charted a values-driven course, responds to her public's concerns and successfully united a divided party and country.  There is much more work to be done but, politically, it's difficult to argue against Ms 61 per cent.

At Least The British Have A Choice

There has already been much debate about British Labour's election manifesto commitment to re-nationalise the UK's energy, rail, water and postage networks as well as Conservative promises to increase the minimum wage, introduce new protections for workers in the "gig economy" and support the domestic shale gas industry.

Are Labor's plans a retreat to the 1970's or a preview of the developed world's future?  Is Theresa May a "Red Tory" excising Thatcherism or a politician determined to claim the sensible centre?  Is there a role for the state in setting wages or running trains, and should the voting age stay at 18 or be cut to 16?

While opinions on the left and right differ about the merit of different proposals, Brexit means that decisions on the big issues around the economy, energy, transport and employment will continue to be made by British citizens and that the considered policy positions put by parties in their manifestos have real consequences.

British taxpayers will no longer need to worry about the Franco-German axis or the north-south divide.  Or having to comply with the edicts of the European Commission, the EU Charter of Fundamental Rights or the decisions of the token European Parliament.

Laws passed at Westminster will apply to the whole land, and if people don't like them they can lobby their government to change them.  If they won't change them then they can change the government.

This deepening of distinctions between the two major UK political parties in part reflects the repatriation of political powers back home post-Brexit.  It is a hallmark of accountability and responsible government and the sign of a healthy democracy.

The contrast with Australia, where centralisation and accountability are headed in the opposite direction, is particularly acute.

The ability of a duly-elected Australian Government to implement its election promises and be judged at the following election is increasingly being thwarted by vested interest in the Senate, from the Opposition, to the Greens and populist independents.

The ability of state governments to run their own economies, education, health, and transport systems is compromised by the over $100 billion a year of tied and untied federal grants, competing federal ministries and bureaucracies and the politically distorted repatriation of GST revenue.

However, it is the lack of real difference between the Coalition and ALP on economic and social policy and the role of government, that is most responsible for increasing disillusionment in domestic politics.

In 2010 the Labor Government attempted to plug a hole in the budget deficit by singling out a small number of companies in one industry to pay a newly invented tax.  In 2017, the Coalition is trying to plug a hole in the budget deficit by singling out a small number of companies in one industry to pay a newly invented tax.

Both parties appear committed to the Human Rights Commission, Fair Work Act, National Broadband Network, and increasing federal involvement in health, education, transport, energy, planning and the environment.

The Rudd Labor Government's main foreign policy priority was to pursue a temporary seat on the UN Security Council.  Even though that target was achieved and the two year term successfully completed, the Turnbull Government's main foreign policy priority is to again pursue a temporary seat on the UN Security Council.

Even Labor's 2015 commitment to use the superannuation system to raise billions in extra revenue was matched and exceeded by the Coalition in its 2016 budget.

That the difference between the two parties on education is Gonski I vs Gonski II, on banking governance a royal commission vs a tribunal, and on energy policy a 23 per cent vs 50 per cent renewables target is just not good enough.  Only on immigration are the Coalition and ALP poles apart.

Whether or not on 8 June British Labour is given the opportunity to transform people's lives or the Tories are chosen to provide what they describe as true conservatism, Brexit ensures that the British people will own their decision and hold their politicians accountable for their policies.

Given that the growth of bureaucracy and lack of political accountability go hand in hand, the Turnbull Government should pursue its own form of Brexit, Bexit, in the form of a "bureaucracy exit".

Acknowledging that it is OK, even desirable, for the major parties to differ on policy would be a good start.

But setting a limit to the size of government, clearly defining stand-alone federal, state and local responsibilities, and leaving the rest to the private sector would do so much more.

No Commonwealth Grants Commission, no handballing between different levels of government, and accepting that it isn't the role of Canberra to impose social and economic uniformity on different individuals, businesses and communities would be an Australian Bexit well worth voting for.

Drone Regulations Stifle Business And Innovation With New Technology

The Senate committee examining Australian drone regulations has had just one public hearing and is months away from its December reporting date.

Nevertheless, last week they wrote to the Minister for Infrastructure and Transport, Darren Chester, strongly encouraging immediate action and "strengthened regulation" for drone technology.

Calls for more red tape and restrictions on drones is not only premature, but represents a disturbing precautionary shift in Australia's drone debate.

The $100 billion global drone market holds remarkable opportunity to boost productivity for our key primary industries.  Farmers can better manage their land in difficult or cumbersome roles by collecting data to improve yields.  Miners use drones for exploration and to assist with environmental management over long distances.

But Australia risks passing up these opportunities if we over-regulate today.

Regulatory tensions for drones have existed in Australia for more than a decade.  But in September last year, the Civil Aviation Safety Authority updated the rules to reflect the growth of the industry.

The most contentious change was the scrapping of licences and expensive training for flying low-risk drones under 2kg.  Farmers working on their own private land were also given more freedom to use drones under 25kg.

Despite the disastrous picture being painted, these new regulations won't realise the dystopian images of blackened out skies.

Hobbyists and small commercial operations still face strict rules.  There are prohibitions on flight within 5km of airports, higher than 120m in controlled airspace, and within 30m of people.  Breaching these rules incurs fines of $9000.

CASA clearly recognises the trade-off between safety and flexibility.  It also understands that regulation should be risk-based, and that it's simply unviable to heavily regulate all uses.

Encouraging drone deregulation is particularly important because businesses looking to adopt drones are keenly observing the regulatory environment globally.  For instance, when Domino's chose to fly its first pizza last year in New Zealand, it said the country had "the most forward-thinking aviation regulations".

Good drone regulations give freedom to entrepreneurs to experiment and test.

Poor policy, in contrast, emerges when safety is considered inherently more important than growth.  This is known as the precautionary principle:  where regulations underweigh the potential benefits to human lives that new technology brings.

The precautionary principle has existed for centuries.  The 19th century "red flag laws" for cars in Britain are a prime example.  The laws instituted a speed limit of 2mph in the city, and required a person to walk in front of all self-propelled vehicles waving flags.  Of course this meant pedestrians were safe, but the enormous potential of cars was clearly delayed.

There's a threat that Australia is heading down this same precautionary path for drones.

On Page 9 of the only public hearing in Brisbane, a temporary ban on the sale of drones is discussed.  Such an extreme outcome is unlikely.

But we are seeing the precautionary principle in action:  regulation based on potential harm, not demonstrated harm.  It is telling that the committee has called for immediate action because of "mounting fears of the real prospect of a serious accident".

According to the Australian Transport Safety Bureau there have been no collisions between drones and manned aircraft.

Drone incidents are inevitable, as is inherent in all transport options.  But policymakers must weigh up trying to prevent these accidents with leaving room for entrepreneurs and hobbyists to realise opportunities.

Viewing the regulation debate from this optimistic perspective suggests regulators should consider further deregulation.

Maybe we should allow entrepreneurs to fly more than one drone at a time.

What about autonomous flight?  Or even the prospect of enabling drones to be flown beyond visual line of sight.  Companies such as Australia Post and Telstra have sought exclusions from regulations so they can test and trial new uses drones.

Regulatory challenges for drones will keep arising, but where possible the private sector should take a lead role.

The deregulation of the drone industry should not just be defended, but encouraged.  Further, relaxed rules certainly shouldn't be reversed based solely on hypothetical fears and prospects.

Integration, Not Segregation Is Best. There's No Need For Privacy Curtains

THE decision by Auburn Council in NSW to install "privacy" curtains at a new public swimming pool in Auburn is a disgrace and completely at odds with Australian values.

Belgravia Leisure, which operates the Council run Auburn Ruth Everuss Aquatic Centre, has said that it decided to erect the curtain to "overcome cultural barriers and encourage Muslim women to use the pool".

After decades of struggle to achieve gender-equality between men and women, the Auburn Council's decision to divide the sexes in the pool with a giant curtain is an immensely backward move.  It is a giant step in the wrong direction.

By installing the curtain in the aquatic centre, Auburn Council is basically introducing gender apartheid in NSW at the expense of unwitting rate payers.

The segregation of men and women in public spaces is totally unacceptable.  One hundred years ago Governments in this country would require men and women to bathe at separate times or compel women to use bathing machines at the beach.

We should have now moved on.

It is the local rate payers of Auburn who have been effectively compelled to subsidise an initiative that segregates people and divides the community.

In 2011, Monash City Council in Victoria extricated $45,000 from local rate payers in order to build a screen at the Clayton public pool so that Muslim women could have female only swim sessions.

Multiculturalism is about integration not segregation.  Segregation is not only offensive but it promotes unnecessary divisions among the community and can hold some citizens back.

Auburn Council's actions are contrary to the very views that the Australian Government is seeking to promote and instil in our citizens, particularly through the Turnbull Government's revamped citizenship test which poses questions about expected norms of behaviour between men and women in Australia.

A curtain does not just divide men and women in a public pool, it divides communities and it divides Australia.  Men and women are equal and segregation is wrong.  These are not controversial ideas.  Public spaces should be free from discrimination and this includes public swimming pools paid for by local ratepayers.

As Australians, we want to encourage people to come to this country to enjoy the freedoms which have been hard fought and won.  People come to Australia because they know that it's a free country.  This type of regressive scheme undermines the fabric of our society.

Why Canberra Will Ignore Trump's Gaffes

It's every intelligence chief's nightmare — a phone call announcing the unexpected disclosure of highly sensitive secrets.

The stakes are high:  intelligence methods potentially compromised;  future access to vital intelligence on terrorist plots and other threats jeopardised;  diplomatic relations with allies and partners strained;  and, in some cases, the lives of agents put at risk.

Alarm bells clearly rang at the highest levels of the US national security apparatus following President Donald Trump's ill-advised Oval Office meeting with the Russian foreign minister, Sergei Lavrov.  Based initially on well sourced leaks and then confirmed in his own tweets, the President told Lavrov the United States had highly sensitive intelligence about a terrorist plot to attack airliners using explosives concealed in laptop computers (which in March led the US and Britain to ban laptops from carry-on luggage on certain routes from the Middle East).

According to media reports, senior White House officials contacted the CIA and the National Security Agency, the US eavesdropping organisation, after the meeting.  They must have been difficult conversations, particularly given the highly charged relationship between the Trump White House and the American intelligence community.

Of course intelligence disclosures, while damaging and unfortunate, are a fact of life.  After this one occurred the relevant US agencies would have swung immediately into damage control.  They would have conducted a rapid assessment of the harm done, including to the intelligence-sharing relationship with the country that provided the material — in this case reportedly Israel.

The Israeli government is relieved to see the back of the Obama administration, which it saw as hopelessly naive about the threat posed by Iran;  but presumably this incident will create at least a little awkwardness during Trump's visit next week.

Losing access to further information on a major terrorist threat such as this one could obviously be immensely costly, but national security adviser HR McMaster — widely regarded as a man of integrity — has said no details of intelligence sources or methods were disclosed.

US agency chiefs would also have had the unwelcome task of telling their Israeli counterparts what had happened and reassuring them that the United States can still be trusted to protect their secrets.

President Trump is correct when he says that he has the authority to share intelligence with other leaders.  But this episode is disturbing, for three reasons.

The first is that Trump seems to have disclosed the intelligence not as part of a deliberate decision-making process after consultation with his senior officials but impulsively on the spur of the moment — reportedly as a boast about US capabilities.  That can only feed concerns about his judgment, temperament, and fitness to be commander-in-chief.

The second reason is that it is pretty clear the President passed on the intelligence without first consulting the government that provided it.  This is a grave breach of intelligence-sharing practice.  If it is repeated and becomes a pattern, it will make other partners, including the other "Five Eyes" countries, nervous about sharing their secrets.  Ultimately it can only undermine the mutual trust that lies at the heart of effective intelligence co-operation.  The consequences for efforts to combat global terrorism and other threats such as North Korea would be severe.

The third reason to be disturbed is that Trump shared the intelligence with Russia, of all countries.  At a minimum the fact he did so the day after he fired the director of the FBI and himself linked that decision to his unhappiness with the Bureau's investigation into his administration's Russia links demonstrates poor political judgment.  But the more fundamental concern is Trump's failure to appreciate that, far from being a dependable partner, Russia is working aggressively to undermine American interests and the liberal international order more broadly, whether in Europe or the Middle East or by interfering in the US election.

For all this, however, the responses of Australia and other key US intelligence partners will be measured.

Our intelligence relationship with the United States is simply too important to be put at risk.  Australia's intelligence agencies are highly regarded and we make a valuable contribution.  But we get far more out of the intelligence partnership than we put in, including information affecting Australian interests from all around the world and access to sophisticated US collection systems we could never afford to replicate on our own.

Australian law enforcement and security services depend on intelligence from the United States and other partners to disrupt terrorist attacks here and abroad.  Intelligence informs our diplomacy.  The Australian Defence Force simply could not operate the way it does in the era of networked warfare without our deep and longstanding intelligence links with the US.

More than 70 years ago Australians and Americans worked together to crack Japan's codes and helped win the Pacific War.  In a world facing so many new threats those ties are as important as ever.

Changes Could Reduce Reoffending For Low-Risk Criminals

The NSW government continues to lead the way on innovative criminal justice policy.  Having last year committed $3.8 billion to new and improved prisons, the government is now pivoting to reforms designed to reduce the need for further prison spending over the longer-term, by lowering reoffending and improving community safety.

The government last week announced a package of reforms, including the abolition of suspended sentences and a new procedure for managing offenders released on parole.  While prison is absolutely necessary for violent criminals, these reforms acknowledge that for those criminals we do release into the community, we need more options for managing their behaviour.

These reforms correctly identify reducing reoffending as a top priority.  Fifty-two per cent of NSW prisoners have been imprisoned before.  Twenty-nine per cent of convicted adults commit another crime within two years of their conviction.  More effectively correcting offenders' behaviour will make a significant dent in the crime rate.

The parole changes are a clever way of addressing this problem.  Under the current system, parole breaches are reviewed by the State Parole Authority, a time-consuming process.  The reformed system will empower Community Corrections Officers to punish minor parole breaches quickly by imposing new conditions or taking away privileges.  A series of breaches will lead to escalating punishments.

This change is informed by evidence from overseas.  In the US, many states have adopted "swift, certain, and fair" punishments for parole and probation breaches.  The idea is a response to the reluctance of some case officers to punish breaches if the only available punishment is imprisonment.  Many case officers were looking the other way at minor breaches, like missed appointments, rather than sending offenders to prison.  Without consequences, or with only the vague threat of revocation hanging over them, offenders had no incentive to change their behaviour.

The main benefit of this change is that it increases the certainty of punishment for parole breaches.  By drawing a clear connection between the breach and the punishment, Community Corrections Officers will be able to better correct the behaviour of parolees.

This program has achieved significant results in Hawaii, especially with reducing drug use among program participants.  Missed and positive tests fell 80 per cent in the first five years of the program.  This in turn reduced participants' likelihood of reoffending.  Other states have copied the idea and have also seen some positive results.  In Texas, for example, program participants were up to 50 per cent less likely to be convicted of new crimes.

However, the program cannot guarantee success.  A 2016 study of four jurisdictions found mixed results, especially for higher-risk offenders.  What this suggests is that habitual offenders and those convicted of serious crimes should not be on parole in the first place.  The NSW government has acknowledged this in its reforms by making community safety the foremost consideration in the decision to grant parole and by making supervision mandatory for all parolees.

Overall, managed properly, this system can reduce reoffending for lower-risk parolees.  The increased level of supervision required is paid for by reducing reoffending, slowing the growth of incarceration and by handling of parole breaches more efficiently.

These parole reforms are part of a broader rationalisation of the corrections system towards community safety.  This agenda can also be seen in the decision to replace suspended sentences with the expanded use of community-based corrections.  Currently, convicted criminals are either imprisoned or released into the community.  This change will give judges more options for punishing nonviolent, low-risk criminals, who may now be subject to home detention, curfews, and movement restrictions.  These punishments are associated with better results in terms of reoffending.  Breaches of corrections orders will also be subject to swift and escalating punishments.  Again, the focus is on managing the transition of offenders back into society by filling in the spectrum of available punishments.

Crucially, the government is not reinventing the wheel.  Its actions are consistent with community expectations of personal responsibility and fair punishment.  This is good policy and good politics.  The state government is showing that it is possible to both be tough on violent criminals and to pursue targeted, safety-driven punishment reform for nonviolent offenders.

Budget 2017: Energy Policy's Gushing Wounds Won't Be Fixed With A Mop And Bucket

If you had a wound that was gushing blood onto the floor and your doctor prescribed a mop and bucket, you'd ask where he got his practicing certificate and why he wasn't fixing the actual problem.

Yet this approach is exactly how most western governments are tackling the question of skyrocketing electricity bills.

In Australia, household electricity costs have increased by over 100 per cent in the last decade, or over five times the rate of inflation.

Worse is yet to come with wholesale and futures electricity prices on the east coast now regularly over $100 per megawatt hour compared to the historic benchmark of $50 and widespread acknowledgement that the investment climate for energy is effectively broken.

But after commissioning countless reviews into the operation of the energy market, re-stating support for the Renewable Energy Target, seeking to squeeze the Snowy Mountain Scheme for more power and imposing export restrictions on gas companies, the Turnbull Government announced in Tuesday's Budget a one-off $75 payment to pensioners to compensate for increased household energy bills.

This story is the same throughout the western world, including in the United Kingdom, where despite household electricity prices increasing by 133 per cent in the decade to 2014 on the back of a commitment to reduce carbon emissions, favour renewables and dismantle coal power stations, the Conservative Government has just announced that if re-elected on 8 June it will put a "cap" on electricity bills.

The problem in both countries, as well as in Germany, which has amongst the highest electricity prices in Europe, where over 50 per cent of household power bills are government charges, and around 330,000 households have their electricity cut off every year, is that governments are trying to bend the rules of physics, engineering, markets and nature, to fit in with a flawed political ideology.

Electricity machines that can operate 24 hours a day seven days a week fuelled by the natural energy stored in coal, gas and uranium will always be more efficient than machines dependent on the vagaries of Mother Nature, whether solar, wind or hydro-electric.

Real markets where private sector suppliers are given the freedom and the ability to develop new products to meet the demand of consumers will always work better than fake markets created by government bureaucracies to find solutions to problems that they themselves create.

Fiddling with markets also leads to unintended consequences.

The Blair Government pushed more diesel cars onto the British market because they emit less CO2 than conventional petrol.  Ten million cars later, London is now reportedly choking on nitrogen oxide (a diesel by-product) and governments are looking at new ways to force diesel cars off British roads.

Northern Ireland's "Cash for Ash" scandal where businesses were paid GBP1.60 for every GBP1 they spent on "green energy" made it profitable to burn good trees to heat unoccupied rooms and may cost taxpayers nearly GBP 500 million.

In Germany, despite renewables achieving what most would consider to be a critical mass, the Renewable Energy Levy has increased from 0.2 cents per kilowatt hour in to 6.88 cents in 2017 and funds new renewables as well as compensates existing renewables for the fall in the wholesale price caused by these extra renewables.

Fiddling is also expensive.  Last year it was estimated that compliance with the UK's Climate Change Act would cost consumers and businesses over GBP 300 billion by 2030 and Germany's "Energiewende" 520 billion Euros by 2025.

It is only in the USA, which has embraced unconventional gas exploration and development to the chagrin of environmentalists, where the price of energy is falling.  It is ironic that while in the laissez faire US CO2 emissions have fallen, in meddling Europe emissions reduction has now stalled.

Renewables are only viable if they are built or funded by government or if government uses taxes or red tape to "nudge" the market and ensure that the cost of alternatives are increased to match the cost of renewables.

It is like an athlete that wants to win Olympic gold but is only the tenth fastest runner so they spend their days lobbying to get the other nine disqualified or hobbled, rather than just training harder or looking for another career

To this end, it is instructive that on Monday renewables advocates used their PR channel (a.k.a. Four Corners) to re-argue the circular logic that the best way to prevent a significant increase in electricity bills is to introduce an emissions intensity scheme to penalize fossil fuel generators, forcing them to increase their prices to match renewables.

If western governments were serious about tackling energy bills, they would put energy affordability and security ahead of CO2 reduction as the goal of the electricity system.

In Australia, the Turnbull Government should abolish or at the very least close the Renewable Energy Certificate scheme to new generators.  If it won't abolish or privatise the Clean Energy Finance Corporation (CEFC) then it should at least ensure that the CEFC is allowed to fund lower emissions coal, gas and nuclear power generators.

Governments should also ensure that renewable operators are required to account for those periods of low or no power generation, either through batteries or by paying for reliable back-up generation.  This would allow more accurate comparisons between the costs of different technologies.

While using taxpayer money to fund new or upgraded electricity generators is not ideal, Australians already pay over $2 billion every year in renewable subsidies.  This money would be better used to just build new, multi-decade fossil fuel or nuclear power generators for use until technologies improve.

With 100 years' worth of black coal, 1,000 years of brown coal, hundreds of years of gas and 30 per cent of the world's uranium, Australia should have the lowest electricity bills in the world.

Reducing costs would be a far better long term solution than the quick fixes of seeking to control private electricity demand or offering temporary bill relief.

No Contest Of Ideas Just A Grubby Fight For Votes

For years, legitimate questions have been raised over what the modern Labor Party stands for.  Following the 2017 budget, those same questions now hang over the Liberal Party.

In the House of Representatives on March 11, 1999, Peter Costello, then treasurer, accused the ALP of lacking discernible values:  "The Labor Party stands for nothing but populist oppositionism."

The Liberal Party has been in power for almost four years.  With the support of its Coalition partner, it has won the past two federal elections.  Yet many of the policies promoted and implemented during this period of Coalition government seem at best discon­nected from the philosophical platform on which the Liberal Party was established by Robert Menzies in 1944, and at worst a repudiation of those ideals.  Does the Liberal Party now stand for nothing but populist government?

When Kevin Rudd declared less than two weeks out from the 2007 federal election "I am an economic conservative", it was more than merely a tactical ploy to unseat John Howard and Costello as celebrated responsible economic managers.  It was a challenge to the identity of the Labor Party.

That statement demonstrated the respect that even Labor had for a conservative economic agenda in government, even if only because such a message was popular.  It was a powerful signal about confidence on the centre-right that liberal values were being adopted by the major party of the left.

The 2017 budget — with a permanent new tax on Australia's most successful financial institutions, and government expenditure continuing to increase for the foreseeable future — shows the opposite is true today:  the left is so brimming with confidence that the major party of the centre-right is implementing its ideas.

In 2007 it was no surprise Rudd felt the need to say he was a fiscal conservative.  The record of the Howard-Costello years is remarkably impressive.

Before Howard came to power in 1996, net debt as a percentage of gross domestic product had reached 18.1 per cent.  By the end of the Howard government it was minus 3.8 per cent.  In the 1995-96 budget government spending had reached 25.6 per cent of GDP.  Howard and Costello brought that down to 23.1 per cent in their last budget in 2007-08.

As we know, Labor in government departed significantly from the economic narrative Rudd had promised before the election.  Prime minister Rudd embraced profligacy for the same reason that opposition leader Rudd had paid lip service to frugality:  political expediency.

In many ways Rudd was the perfect embodiment of the modern Labor Party:  an ideological chameleon willing to do whatever it took to retain power.  Though some have painted Rudd as a political outsider, he is in fact a product of the party he joined at age 15.  And his lack of conviction is no doubt connected to the structural problems within Labor today.

Trade union representatives continue to make up half of delegates at ALP state and national conferences.  Such a structure made sense when union membership rates were relatively high.  In 1990, 40 per cent of full-time workers were members of a trade union.  When the Rudd government took power in 2007 that had fallen to 18.9 per cent.

And while union membership rates remain high in the public service (they were still as high as 39.5 per cent in 2015), they have declined rapidly in the working-class industries where the ALP has traditionally found support (12.36 per cent in manufacturing;  11.37 per cent in construction).

These changes in the makeup of the single largest stakeholder in the Labor Party are turning the political wing of the working class into a party of the cultural elite.  Radical climate change policies such as the carbon tax may make wealthy inner-city dwellers feel good about themselves but they sharply increase the cost of living and smash blue-collar workers.  Caught between old Labor and new Labor, the ALP is stuck in an ideological vacuum.

Perhaps because of this shift towards populism, the Liberal Party no longer appears to be anchored in principle either.  In the years following the Howard government the Liberal Party has struggled to prosecute its philosophical agenda.  The current budget abandons any pretence that government should be smaller.  It accepts growing levels of government spending as the new normal, leaving less room for individuals to pursue their own opportunities.

This malaise goes back at least as far as the previous government.  While the current budget taxes banks to pay for Gonski 2.0, the Abbott government proposed to tax Australia's largest corporations to pay for an absurdly expensive paid parental leave scheme.

The 2017 budget shows the Liberals are just as guilty as Labor in losing touch with core beliefs.  Both major parties have all but conceded they exist not to participate in a battle of ideas but merely to win the next election.

This Budget Ends The Liberal Age

Maybe it's time to acknowledge what in recent years has become obvious, and what was confirmed on budget night.

A unique period in Australia's modern history is drawing to a close.  For three decades both of the country's major political parties held a commitment to policy reform based on the principles of economic liberalism.

It might be that in the future we'll look back on these 30 years as an aberration of our political and economic history.  Two-hundred years ago Australia was settled by Europeans as an inward-looking, statist colony.  There's every indication that's a condition to which we'll return.

Tony Abbott's former chief of staff Peta Credlin said of the budget:  "When they come to write the history of conservative governments in this country, the 2017-18 budget will be a defining moment.  Last night, the Howard-Costello era ended.

"In its place, Malcolm Turnbull and Scott Morrison delivered a budget that owes more to the ghost of Labor leaders past than it does to Liberal fundamentals of debt reduction, prudent spending, lower taxes and smaller government."

If in 2014 Tony Abbott had delivered a high-taxing, high-spending budget as the Coalition did this week, maybe he'd still be prime minister.

Credlin's assessment as it applies to the Liberals is correct, but her point can be drawn even more broadly.  On budget night it wasn't just the Howard-Costello era that ended.  The Hawke-Keating era ended too.  Within minutes of Morrison revealing a new and arbitrary tax on the banks, the shadow treasurer Chris Bowen announced his support for it.

In truth, the burial rights for the heritage of Hawke and Keating were uttered by Kevin Rudd following the global financial crisis.  In February 2009, in an essay in The Monthly, he repudiated "the triumph of neo-liberalism" and "free-market fundamentalism".  The ALP has been living in the shadow of Rudd's pronouncement ever since.

Rudd was typically overblown, but he wasn't wrong.  "From time to time in human history there occur events of a truly seismic significance, events that mark a turning point between one epoch and the next, when one orthodoxy is overthrown and another takes its place."

The philosophical confusion of the Liberal Party was encapsulated by Morrison on Tuesday evening.  He had said the budget wouldn't "tickle the ears of the ideologues".  But the ideologues of the left would have been delighted at the Liberals' super profits tax on the banks.  Until this week, the only people talking about such a tax were the Greens.

Also on budget night the Liberals' double standards were made apparent.

In February, when explaining why the Turnbull government could not abolish the Renewable Energy Target, the Treasurer said:  "When you put in laws ... if you put them in one day, and you change them the next day, what do you think people investing are going to do and thinking about the stability of government policy?  That's called sovereign risk."

So if you're running a wind farm, the Turnbull government won't dare touch you.  But if you're running a bank, the Liberals will happily throw a metaphorical brick at you.  If you're a Liberal-voting retiree trying to live off your superannuation savings, the government will throw two bricks at you.

The claim that the 2017-18 budget is the way it is because of a recalcitrant Senate is a fig-leaf excuse hiding much bigger problems.  And it is not just on government spending that the Liberal Party is abandoning its principles.  The Turnbull government took a fortnight to decide its position on changes to penalty rates — and what that position is remains unclear.  And both the Abbott and Turnbull governments took years to decide what they thought about freedom of speech.

For the Liberals, the end of the heritage of Howard and Costello is more recent than what happened to Labor — but more dramatic.  The ALP wasn't founded, for example, to defend the cause of free enterprise against big government — the Liberal Party was.

A typical member of the Labor Party doesn't believe taxes should be as low as possible so individuals can be free to choose to spend their own money as they wish — the typical member of the Liberal Party does.  Once upon a time a typical Liberal MP believed that too.

Best Way To Make Markets More Competitive Lies In Legislating To Cut Red Tape

Competition is a natural feature of a free market.  The idea that the way to increase competition is to strengthen competition laws is naive and misguided.

The debate over strengthening section 46 of the Competition and Consumer Act is about to heat up again.

The government — along with the Greens and Nick Xenophon — wants to introduce an "effects test" into the legislation.  The Labor Party is opposed.

The relevant provision, entitled "misuse of market power", prohibits a corporation with a "substantial degree of power in the market" from taking "advantage of that power in that or any other market" to eliminate or "substantially damage" a competitor, prevent entry into the market, or deter or prevent a person from engaging in "competitive conduct".

The proposed change would remove the second and third parts of the test, and leave in place the substantial market power element.  The current list of proscribed purposes would then be replaced by a more general prohibition on conduct that has the purpose or likely effect of substantially lessening competition.

This proposal grew out of Ian Harper's Competition Policy Review.  The final report of that review, released on March 31, 2015, recommended a strengthening of the misuse of market power provision by including an effects test.

Then Small Business Minister Bruce Billson was one of the strongest proponents of the change.

Prime Minister Malcolm Turnbull, in announcing the government's intention to legislate on March 16 last year, said that the effects test would "ensure that our competition law works better to enable competition, to enable smaller businesses, emerging businesses, to be better able to compete because we know that while larger firms are often very innovative and very often very competitive, they are more innovative if the hot breath of competition is coming down their neck.  So we want to have a competitive Australia."

The shadow assistant treasurer disagrees.  ALP MP Andrew Leigh made the reasonable point that "actions like cross-subsidising cheaper milk, which are not done with the purpose of lessening competition, could have the effect of lessening competition".

This is a point that has been raised by Coles chief executive John Durkan.  Durkan argued in March last year during a speech to the American Chamber of Commerce in Australia that he was "concerned that under an effects test regime, companies like Coles will be less able to bring about cost decreases and therefore lower ­prices".  And that "another less efficient business may seek to argue that their inability to offer similar prices is somehow unfair".

These ongoing debates uncover a deeper issue with competition law.  At the heart of this area of law is the idea that competition in the market can be promoted through legislation.  And the rationale for the promotion of competition is that it is of benefit to the consumer.

Certainly, that's the stated justification for the misuse of market power provision.  But there's a legitimate question about whether state intervention in fact promotes competition, or ever could.

The first High Court case that contemplated section 46 was Queensland Wire Industries v BHP almost 30 years ago.  In the judgment, Chief Justice Anthony Mason and Justice Ronald Wilson made the astute observation that "competition by its very nature is deliberate and ruthless".

"Competitors jockey for sales, the more effective competitors injuring the less effective by taking sales away.  Competitors almost always try to 'injure' each other in this way," the judgment says.

Although these words were uttered in the context of general support for the existence of section 46, they offer an insightful critique of competition laws on the whole.

What is the relevant difference between conduct that prevents a firm from entering the market, and being so successful that you push an existing firm out of the market?  After all, a legitimate effect of competition can be the closure of competing firms.

The current test, which requires a court to consider "purpose" at least approximates a distinction between intended and unintended conduct.

The problem with the new effects test is that conduct which appears to be anti-competitive may in fact have a legitimate pro-competitive purpose.  But without the requirement of purpose, evidence of a pro-competitive intention will be irrelevant.

At the end of the day, the effects test runs into the same issues that all competition law faces.  It's almost impossible to administer because it fails as a concept.

Firms are constantly battling it out for market dominance.  It's the nature of free enterprise.  That's not to say that anti-competitive practices will occur from time to time but the answer is not to tie up millions of taxpayer dollars in unsuccessful litigation.

The answer is to create an environment that makes it easier for competition to occur.  Wherever it appears there is a lack of competition look first at whether there are artificial barriers to entry that governments can eliminate.

The current push to strengthen competition law should be abandoned in favour of a renewed effort to substantially cut red tape.  This is the only competition policy the government needs to make it easier for new firms to enter existing markets, to allow current firms to compete, and to provide better outcomes for consumers.

Turnbull And Trump Showed We Were Allies, Now To Work Together On China

Relief may be Malcolm Turnbull's overwhelming emotion as he settles back for the long flight home from New York before a crucial budget.

Returning to his home town and the inevitable protests for the first time since the inauguration, President Trump may have kept the PM waiting for a few hours.  But it was worth it.

Trump was welcoming, warm and — dare one say it — presidential, putting the two leaders' testy February phone call behind them and declaring his love for Australia.

For a leader who is often criticised for lacking discipline and disrespecting history, he stuck to the script throughout a thoughtful and often passionate speech about the the two countries' shared military history and sacrifices.  His remarks were made poignant by the presence of surviving Australian and US servicemen at a gala event commemorating the 75th anniversary of the crucial Battle of the Coral Sea.

MEETING THE PRESIDENT MATTERS

It is always a big deal when Australia's Prime Minister meets the US President.  Irrespective of party politics, the vast majority of Australians recognise that the US alliance is important to Australia's security, and the voting public expect the prime minister of the day to manage the alliance effectively.

Gough Whitlam's clash with President Richard Nixon strained the alliance and contributed to public anxiety about his leadership;  Mark Latham's petulance towards the George W Bush administration fed into a narrative that he was too erratic to be allowed to remain Labor opposition leader, contributing to his political downfall.

The stakes were higher than usual this time following the phone call — demonstrated by the fact that Turnbull took the time to make the trip the week before the budget.  Australian diplomats worked every avenue to get the President to attend the commemorative event.

The setting provided a good opportunity.  The commemorative event on the USS Intrepid — herself a veteran of the Pacific campaign — was the perfect setting to underline the long history of shared interests, values and sacrifice that underpin today's Australia-US alliance.  It was an ideal opportunity for the two leaders to patch up their differences and get their relationship off to a fresh start.

A REMINDER OF SERVICE

It served as a timely reminder of the vital contribution US maritime power and alliances have made to both countries' security and prosperity — and to the wider Indo-Pacific region — since the Second World War.

It also highlighted the daunting array of threats and challenges facing the United States, Australia and their allies today — whether from a nuclear-armed North Korea, Islamic State and other Islamist terror networks, a revanchist Russia, an increasingly bullying China, or the domestic forces of populism and protectionism.

Hopefully Turnbull reinforced the efforts of his Japanese counterpart Shinzo Abe to convince the President and author of The Art of the Deal that for the United States strong alliances and partnerships mean significantly more negotiating leverage rather than unnecessary cost.  Over the long term they bring the United States benefits that a transactional approach can never equal.

The same can be said for open regional economic arrangements such as the now defunct Trans Pacific Partnership.

TRUMP IS CHANGING ON FOREIGN POLICY

Many of the serious figures around the President such as Secretary of Defense Jim Mattis, National Security Advisor HR McMaster and Secretary of State Rex Tillerson know this, and Trump has changed course on a number of important foreign policy issues, including the role of NATO, US alliances with Japan and South Korea, and — seemingly — initiating a trade war with China.

Nonetheless, there is still work for Australia and other US allies to do to convince a sceptical President that alliances and free trade serve American interests.

The New York summit provided a forum for the two leaders to compare notes on how to tighten the screws on North Korea, including by inducing China to take real action to rein in its belligerent ally (rather than continuing to go through the motions).

With US, Australian and other coalition forces making ground against IS in Syria and in Mosul, its capital in Iraq, Turnbull will have been able to remind the President of Australia's significant military commitment and to discuss strategy in that campaign, as well as in Afghanistan and the Middle East more broadly.

It is also an important time for US and Australian political leaders to compare notes on the Indo-Pacific region, including with an eye to the forthcoming APEC leaders' meeting and East Asia Summit.

AUSTRALIAN LEADERS ARE LISTENED TO

Going right back to prime minister Robert Menzies and his peerless foreign minister Percy Spender, US presidents listen when Australian leaders articulate a thoughtful, coherent agenda for how the two countries can work together, and with other allies and partners, to reinforce security and promote prosperity in the region — particularly when allies step up and show a preparedness to accept the inherent risks and costs.

North Korea and Islamic State are serious threats (in different ways).  But the strategic trajectory China seems embarked on will be of greater long-term consequence for the United States, Australia and the rest of the world.

China is adept at leveraging its cooperation on the issue of the day to obtain time and space to pursue its salami-slicing coercive strategy to erode US influence, weaken alliances and extend its own influence in the Western Pacific.  Beijing repeatedly used non-binding promises on climate change as a bait-and-switch gambit with the Obama administration, and it has gamed the last few administrations on North Korea.  Getting Australia, other key allies and the Trump administration on the same page will be vital to avoid the same trap this time round.

Ultimately both sides shared a modest goal for the New York encounter:  smiling media images to show they have put the phone call behind them.  To that extent, they will be satisfied.  But Australians — and Americans — have the right to expect their leaders to aim higher, and to show that they have agreed a solid plan on how their countries will work together to deal with current and future challenges and to shape a secure and prosperous future for their peoples.

Let's Put People In Charge Of Their Own Super

Imagine if your boss called you into their office to tell you they had decided who you could bank with.  Or your private telephone or electricity provider.  Or whether you had to invest in shares or even the make of private car you could drive.

While most Australians would consider employer involvement in these private financial matters to be antiquated, absurd, patriarchal, or even downright suspicious, the law currently allows considerable third party involvement in your superannuation.

Some 25 years after the beginning of compulsory superannuation, the industry's value has grown to $2 trillion, an amount expected to reach $9 trillion by 2040.

Yet perhaps unsurprisingly given its origins as an instrument of the workplace relations system, employers, unions, employer associations, the Fair Work Commission, and lobby groups for both industry and retail super funds retain considerable influence over how these funds are invested.

Around 20 per cent of Australians or 2 million people have little or no choice where their superannuation money is invested, up to 40 per cent have more than one superannuation account and potentially 60 per cent accept the "default fund" offered by their employer.

The Heydon Trade Union Royal Commission highlighted the problematic relationships between some employers, unions and super funds, with its Final Report noting:

The potential for coercive conduct and conflicts of interest in enterprise bargaining identified in respect of employee benefit funds also exists in respect of superannuation funds.

With the default fund market alone worth $475 billion, the question of who picks a default fund, why that particular fund is selected, and if an alternative system could be more transparent, encourage stronger competition and empower consumers, is particularly important.

The Productivity Commission is currently looking at this issue, and its Draft Report, published on 29 March, had some good suggestions, including to only allocate a default product when an employee first joins the workforce, and the possibility of an NZ-style centralised clearing house for super payments, to reduce the impost on employers.

The Commission also showed that it understood the extent to which the system is influenced by vested interests.

It noted that only 3 of the 52 Inquiry submissions supported some sort of objective tender mechanism to select default funds and that:

There was near universal agreement amongst participants across all parts of the industry — industry and retail funds included — that it would not be desirable for the Commission to contemplate a tender or auction model.

Tellingly, it found:

The ability of this issue to unite an otherwise disparate set of industry voices against the introduction of an auction or tender model may, itself, be instructive [and that] the Inquiry has managed to unite the superannuation industry against the Inquiry's potential contemplation of more than incremental reform.  A healthy dose of scepticism would suggest that there must be rents to be recovered for the benefit of members for such unanimity to be valid.

This proprietorial approach is also apparent in the reactions industry stakeholders have had to the suggestion that the Turnbull Government is considering allowing first home buyers in its May 9 Budget to access their own superannuation to help fund a first home deposit.

As anyone who has ever tried to withdraw money from their own superannuation account can tell you, the industry clearly considers the funds it manages, to be its very own.

So, what should be done?

The simplest approach would be to abolish compulsory superannuation.  Turning off the automatic rivers of gold would remove the need for any default fund and likely foster the immediate consolidation of underperforming funds and reduction of fees, as providers clamour to retain market share.

However, given that this is not likely to be on the cards, the Turnbull Government should at least seize the initiative and use next week's Budget to announce a reform plan to put employees firmly in control of how their superannuation is invested.

Firstly, the Government should re-introduce its lapsed Superannuation (Choice of Fund) Bill, to extend choice of fund to all employees under workplace determinations or enterprise agreements.  Personal superannuation accounts should not be a plaything for members of the industrial relations club.

Secondly, the Government should allow first home buyers to access their own superannuation money for a first-home deposit.  This would immediately ignite the interest of under-25s in what would likely become their second most important financial asset.

Thirdly, the Government should declare that employers have no role in selecting default superannuation products for their employees and announce a tender process to select up to five private sector superannuation funds to be given the right to act as defaults for a set period.  The tender should be open to existing retail and industry funds, as well as to new, approved, competitors, including from overseas.

It is instructive that the ACTU and superannuation industry representatives have already made supplementary submissions to the Commission arguing to leave the default system alone, because any default selection panel may be "political" or "comprised of ex-bankers".

With money locked up for up to 40 years, hundreds of separate funds, some of the world's highest administrative fees, opaque commercial relationships and limited personal choice it is little wonder that people are disengaged from the superannuation system.

A reform package that improves choice and competition, removes vested interests, involves the private sector and empowers people to take greater responsibility for their own financial future is one that should comfortably be put forward in the Liberal name.

Reducing Red Tape In Australia: ''One In, Two Out'' Rule

Red tape costs the Australian economy $176 billion, 11 per cent of GDP, each year in foregone economic output.  Similarly, in the US red tape is estimated to cost $2 trillion annually, or 12 per cent of GDP.

On 30 January 2017, the Trump Administration released the Presidential Executive Order on Reducing Regulation and Controlling Regulatory Costs.  The Order announced a "one-in-two out" approach to regulation, which it described as "for every one new regulation issued, at least two prior regulations be identified for elimination".

This report outlines the effect of implementing a similar one-in-two-out rule on Australian regulation.

Reality Is ''The Rich'' Do Pay Their Fair Share

It is pre-budget silly season again.  You know, the time of year when we get to hear all of the good reasons why government should spend more money.

It is also when we get to hear why government should tax more.  To hear some people tell it, the power of taxation is quite astonishing — it can solve any and every social ill.

If only negative gearing were abolished or the capital gains discount removed housing affordability would improve.  If only the government introduced a new tax on internet sales, Australian retailers would face an even-playing field.  If only big business would pay more tax, life would be fairer for the rest of us.  Not to mention "the rich" who seem to hardly pay tax at all.  If only life were so simple.  There is a lot of nonsense that gets sprouted about taxation.  But every year there is a reality check in the form of the Australian Taxation Office's annual Taxation Statistics.

Recently the ATO released the data for the 2014-15 financial year.  As always it makes for interesting analysis.  Did you know that "the 1 per cent" paid more in personal net income tax than the bottom 50 per cent of personal income tax payers?  The top 5 per cent of net personal income tax payers (earning above $167,348) paid over 33 per cent of net personal income tax while only earning 21 per cent of taxable income.

If people are worried about inequality, they should look no further than our personal tax system.

The company tax system is little different.  In 2014-15 just over half of 1 per cent of all companies had a net taxable income of over $1 million.  That small number of companies paid 74.78 per cent of the $68.4 billion in net company tax collected that year.  When we look at the actual tax distribution for Australia — official data from the ATO — it becomes very clear that the Australian government, with all its spending, is very highly reliant on the hard work and efforts of a small number of taxpayers.

It gets worse.  When you drill down into the company tax data, it quickly becomes apparent that two industries prop up the revenue:  financial and insurance services, and mining.  The two industries many Australians love to hate.

The mining industry in particular punches well above its weight.  Mining companies make up less than 1 per cent of the total number of companies in Australia, yet they pay over 14 per cent of the net company tax with an effective tax rate of 26 per cent.  That figure excludes any royalties paid to the state governments — strictly speaking royalties are not taxes, but they still contribute to the public purse.  Financial services and insurance pay nearly 36 per cent of net company tax with an effective tax rate of 21.4 per cent.

Notions that "the rich" or "the big end of town" aren't paying their fair share are simply not supported by data from the ATO.

On budget night, rather than talking about toughening up, or improved integrity measures, or new tax increases, it would be nice if Treasurer Scott Morrison thanked the hardworking taxpayers of Australia and congratulated them for their excellent performance.

What Part Of Free Speech Doesn't Liberty Victoria Understand?

Liberty Victoria's decision to reward Gillian Triggs with its annual Voltaire Award is a perfect example of the left's perverse interpretation of freedom of speech.

Today, the Victorian "civil liberties" advocacy organisation had this to say about Gillian Triggs, who as President of the Australian Human Rights Commission since 2012 has overseen some of the worst known abuses of section 18C:

This year's Voltaire salutes Professor Triggs for her courageous stand on people's rights, especially free speech.  As she said recently, "It is important that we teach our children to be strong and to speak out for the values that are important to them.  At the same time, it is important that we have legal protections in place where people are silenced by hate speech or don't have the power to speak back."

If you think that doesn't quite line up with what Voltaire said, you would be right.  Voltaire was a French enlightenment philosopher who was famously credited as saying "I do not agree with what you have to say, but I'll defend to the death your right to say it."  His target was the establishment of the day, which in France was the powerful Catholic Church.

In contrast, Triggs is a member of the modern bureaucratic establishment who explicitly rejected Voltaire in The Australian in 2013, saying that "Freedom of speech is alive and well in Australia but, with respect to Voltaire, we will not defend to the death those who abuse this right by vilifying others on the ground of race."  In recent years, Triggs' presidency at the Commission has seen the brutally mismanaged 18C case against the Queensland University of Technology students, and the obviously frivolous complaint against the late Bill Leak.

Liberty Victoria is ostensibly a civil libertarian organisation, but for the most part promotes a predictable left wing line about human rights.  It is this left wing interpretation of human rights that would lead it — and other organisation like it — to find no inconsistency with awarding a free speech award to a person who readily administers laws designed to chill freedom of speech.

As the quotes above show, the left sees freedom of speech as something to be managed by the state.  Within that worldview, you have powerful people who have excessive free speech, and who "abuse" their free speech by being hateful.  At the other end of the ledger, there are people who are in some way silenced by the excessive free speech of the powerful.

The logical end point of this illogical premise is to establish even more powerful authorities and bureaucracies to police this abuse and redistribute freedom under the law.  As New York University professor Ulrich Baer recently argued in the New York Times in a piece regarding the violent protests at American universities against the presence of conservative speakers:

The idea of freedom of speech does not mean a blanket permission to say anything anybody thinks.  It means balancing the inherent value of a given view with the obligation to ensure that other members of a given community can participate in discourse as fully recognized members of that community.  Free-speech protections — not only but especially in universities, which aim to educate students in how to belong to various communities — should not mean that someone's humanity, or their right to participate in political speech as political agents, can be freely attacked, demeaned or questioned.

To Baer, the radical campus activists have their hearts in the right place because by physically stopping voices from being heard they are ensuring "that other members of a given community can participate in discourse as fully recognised members of that community."

To the left, Triggs truly is a free speech hero because she is in a position to punish those people exercising free speech in the "wrong" way.

This is in contrast to the classical liberal tradition which explains that human dignity comes from equality under the law.  When society respects individual autonomy and operates under universal principles such as freedom of speech, there is no imbalance that needs to be addressed.

Triggs and her allies only believe in the freedom of speech they agree with.  By awarding a free speech prize to Triggs, Liberty Victoria not only makes a mockery of Voltaire, but also of themselves.

Why Should Everyone Else Pay For Your Expensive University Degree?

Australian students have the immense privilege of being able to attend a world-class university regardless of their bank balance, or family background.

And that will continue under the government's recently announced plans to make students foot more of the bill for their degree, and to start paying it back sooner.

The beauty of Australia's higher education contribution scheme, or "HECS" as it's widely known, is that students are only expected to repay less than half the full cost of their studies after they land a job that earns them a comfortable living.  By the time former students are earning the government's newly revised threshold of $42,000 a year for compulsory HECS repayments, they will be taking home a healthy $700 a week after tax and super contributions.

That is a far cry from packaged noodles, tinned spaghetti and instant coffee.

And once students do start work, the dividends are enormous.  University graduates can expect to earn well over $1 million more throughout their working life than those without a degree.  They also enjoy around half the average unemployment rate, as well as having the opportunity to spend valuable years plying their trade in their chosen field.

That kind of pay-off makes the government's proposed fee increase of no more than $3600 a year look like chump change.  Anyone who claims an increase of this order will stop school leavers from pursuing their dream career can join me for a bicycle ride to the moon.  Indeed, whatever way you slice it, taking out a HECS loan to attend university stands to be the best investment you're ever likely to make.

It's fashionable to romanticise the Whitlam government's introduction of free tertiary education as a shining example of the truly egalitarian society Australia ought to be.

But where is the fairness in asking the majority of Australians — three quarters of whom don't have a university qualification — to subsidise the debt of tomorrow's professional class who are likely to earn more over their lives than they will?

With an eye-watering national debt of $550 billion and an annual deficit of $37 billion, there is no painless or politically simple way of bringing our country's finances back to a sustainable footing.  Faced with the challenges of an ageing population, chronic infrastructure backlog and inexorably rising health costs to name a bare few, hard-headed choices in our national interest are sorely needed.

If we want to take care of those who are sick, without work or who can't otherwise go it alone, it makes sense to share the burden with those who can.  By that standard, paring back the funds used to pave the way for doctors, lawyers, scientists and engineers without raising the entry barriers for future students is a perfectly equitable place to start.

None of this is to say there aren't scores of students buckling under the cost of living independently while studying 40 hours a week.  But if we actually want to help students doing it tough, there are far better things we could do than paying off a debt they will only encounter once they're taking home an easily liveable wage.

But as famously said by Paul Keating, the Treasurer who abolished free university and introduced the HECS system, "a free higher education system is one paid for by the taxes of all, the majority of whom haven't had the privilege of a university education.  Ask yourself if you think that is a fair thing."

On that score, Education Minister Simon Birmingham's announced shake up of university funding is exactly the kind of fair and forward-thinking policy the Coalition government should be championing.

Section 18C Letter To The Editor Of The Law Society Journal

Race Discrimination Commissioner Tim Soutphommasane's essay "Setting the Record Straight" about Section 18C of the Racial Discrimination Act (LSJ February) perpetuates more misconceptions than it dispels.

It is true that the Racial Hatred Act 1995 was introduced following the tabling of three government reports in the early 1990s, but it is not accurate to say section 18C reflects the recommendations put forward in those reports.  Not one of those reports recommended for a civil prohibition on offensive or insulting language.

Nor is it appropriate to refer to the current interpretation of 18C as "settled law".  As readers will be aware, the Full Court of the Federal Court or the High Court is not bound by the interpretation of equal or lower courts.  Nor is the present interpretation clear.

That 18C applies to "profound and serious effects, not to be likened to mere slights" is no less vague than "offend" and "insult", and doesn't make any clearer what conduct amounts to "mere slights", "profound and serious effects" and what falls in the chasm between them.

Another level of confusion in the law is the so-called objective test for whether there has been a breach of section 18C, which uses "the reasonable person of the target ethnic or racial group".

Justice Ronald Sackville recently noted in reference to a case which used the subgroup of "young, impressionable, Jewish people faced with Holocaust denial" that "once you get to that kind of level, I think in fact, you are dealing with concepts that are extraordinarily difficult to apply and will not work."

Section 18D is not a reliable defence for freedom of speech.  In 20 years and close to 80 cases being heard in the Federal Courts, the 18D defence has only be accepted three times, and two of those were from the Bropho series of cases.

The chilling effect of section 18C arises not from the outcome of court proceedings, but from the process before a complaint reaches court.  This was most glaringly demonstrated in the case against several students at Queensland University of Technology.

The complaint was launched after 20-year-old student Alex Wood commented on an unofficial student Facebook page:  "Just got kicked out of the unsigned indigenous computer room.  QUT stopping segregation with segregation ...?"

For this comment made in May 2013, Wood was subjected to three-and-a-half years of legal drama before the matter was dismissed in the Federal Circuit Court in November 2016.

This is an indefensible example of section 18C, which makes its omission from Dr Soutphommasane's article unsurprising.

To the question "What is it that people want to say, which they can't already say?" the answer is that Alex Wood should be able to write Facebook comments critical of his university.

Likewise, a cartoonist should be able to draw satirical political cartoons and a Church should be able to erect a statue commemorating WWII sex slaves without the threat of legal sanction, as happened to Bill Leak and the Ashfield Uniting Church in the past 12 months alone under section 18C.

Dr Southphommasane's intent was to address the lack of "clear public understanding of how the Act and the AHRC in fact operate".

In fact, opponents of section 18C have witnessed how the law operates in a very clear way, and recognise it has no place in a liberal democratic society.