The Higher Pay Paradox

In Australia, nothing is certain except death, taxes and increases to the minimum wage.  And while understandably welcome news for workers, each wage hike tightens the noose around the necks of small business and millions of Australian job-seekers.

Minimum wage cases have become a Groundhog Day-like ritual.  Every year, the Australian Council of Trade Unions demands an unreasonably high increase, employer groups like the Australian Chamber of Commerce and Industry lob in a low-ball offer, and the Fair Work Commission orders an increase somewhere around the middle.

So it was this year, where the ACTU asked for a six per cent increase, ACCI countered with 1.8 per cent, and the FWC settled on three per cent rise, taking the minimum wage to $740.80 per week.

This represents an increase on what is already the second-highest hourly minimum wage in the developed world, second only to France.  Bear in mind also that for most workers, the statutory minimum is much higher, because of Australia's unique system of 122 industrial awards covering various occupations.  These awards cover around 2.3 million Australian workers, 92 per cent of whom receive pay in excess of the statutory minimum.

Now, the Sally McManus's of the world will tell you that this is a good thing and, if anything, Australia's wages aren't high enough.

But the reality is that Australia's industrial relations system is, for one thing, a massive handbrake on the economy.  In fact, "restrictive labour regulations" has ranked as the number one most problematic factor in doing business in Australia almost every year over the past decade or so, according to the World Economic Forum.

Small businesses are hit particularly hard.  Because they can't afford the lawyers and consultants needed to do "sweetheart deals" with unions, they don't have the ability to "bargain out" of various wage premiums.  That's why, for example, a big chain like KFC pays a relatively low rate to its staff on Sundays, while the charcoal chicken place down the road is forced to pay the full penalty rate.

Bigger businesses also have greater ability to automate.  Coles and Woolworths, for example, can simply sack workers and replace them with checkout machines.  The local grocery store does not.

And that brings us to another group hit hard by Australia's annual wage spectacle — the low-paid and unskilled, the very people who our industrial relations system is designed to protect.

The experience in the US — where various states and cities have been experimenting with steeper minimum wages for years — suggests that the costs actually outweigh the benefits.  One study estimates that thanks to wage hikes in Seattle, the average low-wage worker lost US$125 a month as businesses have cut their payrolls, put off new hiring, reduced hours and let workers go.

Elsewhere in California, there have been reports that municipalities which have recently raised their minimum wage have seen almost one in 10 restaurants shut their doors.  Obviously, that is bad news for both business owners and workers.

But the biggest losers of our industrial relations system are Australia's most disadvantaged:  The over 700,000 unemployed looking for work, the around 1.1 million underemployed looking for more work, and the countless others who do not even show up on unemployment statistics because they have simply given up looking.

For these vulnerable Australians, each minimum wage hike is a slap in the face that puts gainful employment further out of reach.  It is a devastating barrier to work that entrenches poverty.

Think of it this way:  The Newstart Allowance — the income source of many jobless Australians — currently works out to around seven dollars an hour, averaged across the Australian working week.  As of 1 July, the hourly minimum wage will be $19.40.

This means that an unemployed person cannot get a job unless they find an employer able to afford the statutory minimum.  They cannot, as a matter of law, accept a job that pays, say, $13 or $14 or $15 an hour — lower than the minimum wage but higher than the dole.

This costs unemployed Australians more than just much-needed income.  For many, it means missing out on that "foot in the door" job-wise that is often so critical.  It means going without the non-economic benefits of work that so many of us take for granted:  Creating value, building skills, enjoying earned success.

The Fair Work Commission should keep that in mind the next time it contemplates yet another wage hike, depriving millions of Australians of the dignity of work.

Living Wage, Universal Basic Income, And The Dignity Of Work

Address to the 2019 Friedman Conference

Sydney, Australia, 25 May 2019

Although the push to introduce a living wage in Australia may have experienced a recent setback, the concept has become a standard part of policy prescriptions on the left, along with the related idea of a universal basic income.  This is illustrated in the platforms of the Democratic presidential candidates in the U.S.

In Australia we've had calls from the ACTU to institute a living wage so that "no full-time Australian worker lives below the poverty line".  And the Shorten led Labor party promised to turn the minimum wage into a living wage ahead of the recent election.

The idea of a "living wage" is to increase the minimum wage to a level capable of providing the wage earner with some predetermined acceptable standard of living.  Every job in the economy would be required to meet this standard.

Proposals for a universal basic income have taken various forms, but the general idea is that everyone would be provided with an income stream direct from the government to provide for basic needs.

I want to begin by talking about how these two policies are often built on the same philosophical foundations, and why it is important to understand and oppose the ideals behind the policies, and not just argue about their economic impracticality.

I'm reminded of an excerpt from Ayn Rand's "We the Living", where a Communist party member says to the protagonist Kira, "I know what you're going to say.  You're going to say, as so many of our enemies do, that you admire our ideals, but loathe our methods."  To which Kira responds, "I loathe your ideals."

It is not just the policy methods that we oppose, we should also recognise and oppose the faulty utopian ideals being aimed at and argue for our own ideals in their place.

There are a number of related philosophical commitments that underpin the current support on the left of a mandated "living wage" and a Universal Basic Income.

The first commitment is to an expanding view of positive rights.  There are probably a number of different conceptions of rights in this room, but I think we can agree that there are real dangers in redefining human needs or goods as "human rights".  When housing, food, utilities, healthcare services, education are included as "human rights" the political and economic implications are radical.

The core problem with the conception of positive rights is that they necessitate violating actual rights and freedoms of property and association.  A positive right gives someone the right to be provided something by someone else.  If I have an absolute right to household utilities I must be entitled to force someone to install my Internet and unblock my plumbing.

This conception of rights underpins the argument for a living wage.  "A worker is entitled to be given a wage capable of providing for a certain standard of living," we are told.  In other words, businesses should be forced to pay a certain wage, and the worker has a right to this wage.

Many arguments for a universal basic income are built on the same assumptions.  While there is a pragmatic libertarian case for a UBI (not one I agree with), many proponents appeal to a universal right for basic goods and services.  And of course a universal basic income must be enacted.  If you have a right to a certain standard of living, surely this right doesn't only apply if you have a job.  A universal basic income ensures that everybody can obtain what they "deserve" by virtue of being human, even including those who are unwilling to work.

The use of the concept of rights in this way allows people to take the moral high ground when arguing for these policies.  Forcing business to pay wages and in practice preventing them from employing labour, and hiking taxes to pay for an explosion in the welfare state are excused for the redefined greater good.

As Murray Rothbard notes, "if one side is granted ethics and the 'ideal' from the start, then that side will be able to effect gradual but sure changes in its own direction;  and as these changes accumulate, the stigma of 'impracticality' becomes less and less directly relevant."

The second principle is the related idea of inequality as a moral evil.  As free markets have proven to be an unprecedented engine of poverty relief and increased human prosperity throughout the world over the last couple of hundred years, the attacks on markets have shifted to inequality.

We have even seen a widely accepted redefining of "poverty" to be a technical measure of inequality within a country.  The official "poverty line" has been brought up in Australia in the context of arguing for a living wage and increasing welfare.

We hear lines such as:  "No one should be paid a wage that keeps them in poverty" or "welfare needs to be increased so that recipients are not below the poverty line".  This may sound plausible to many until you look at how "poverty" is defined and see the level of deception.  Earning below half or sometimes 60% the median income is defined as poverty.

Without bothering with an actual argument, the language implies that it is somehow unethical for anyone to receive a wage or welfare payment below half the median income of the country he or she lives in regardless of job status or hours worked.

This doesn't pass a basic test of common sense, it is based on a radical ideal of absolute undifferentiated equality, an ideal that leads logically, not to minor industrial and welfare reforms, but to full-fledged socialism.

Inequality is not an evil that must be eradicated, it is a simple reality of the natural order.  Moreover, it is essential to any political economic system based on freedom.  While there can be unjust inequality caused by state interventions, inequality in general is not a bug of capitalism, but a feature.  The reason a market system works, is because of the decentralised role of the entrepreneur.  The market system possesses the right incentives, and diverts resources to those who have proven proficient at creating value.  The profit and loss system that generates inequality is the reason we live in unprecedented prosperity.

Third, a closely related idea to the evils of inequality, that too often goes unchallenged, is the view that there is an unjust distribution of income.  On the topic of social justice, F.A. Hayek stated the following in a lecture given in Sydney in 1976

There can be no distributive justice where no one distributes.  Justice has meaning only as a rule of human conduct, and no conceivable rules for the conduct of individual persons supplying each other with goods and services in a market order would produce a distribution which could be meaningfully described as just or unjust.  Individuals might conduct themselves as justly as possible, but as the results for separate persons would be neither intended nor foreseeable by others, the resulting state of affairs could neither be called just nor unjust.

When a business hirers an individual, the two come together and agree on an employment arrangement.  Both parties benefit from the exchange.  The business acts ethically in the agreement without calculating the subjective needs of the employee or where the agreed wages place the employee in the statistical distribution of income in the area.

Now, it is also important to consider these policies economically and practically.

To quote Rothbard again, "If an ethical ideal is inherently 'impractical', that is, if it cannot work in practice, then it is a poor ideal and should be discarded."

A living wage cannot possibly work for all the reasons that all price controls don't work.  Creating a price floor above the market price for a good will result in excess supply.  In the labour market, we call this unemployment.  If businesses are forced to pay a worker more than the value he contributes, businesses will be forced to lay the worker off or reduce hours.  No amount of econometric fiddling with marginal changes in noisy natural experiments can attack this truth.

There is also the serious problem of determining the amount of a living wage.  Who decides what this basic standard of living is?  And how do you standardise this with a single wage rate across the country?  The needs of a single income earner with a dependent spouse and children with a mortgage in an expensive area of the country, are not comparable to a dual income household with no children living in an affordable area.

Wages reflect economic realities.  You cannot legislate controls for inequality in income distribution.  The only way to increase wages is to increase productivity.  This can is achieved through investment and capital accumulation, not by declarations from bureaucrats in Canberra.

Now let's look at the case for a UBI.  Of course not all arguments for a UBI are based on positive rights and inequality, a number of libertarians have made a pragmatic case for the UBI as a means of replacing exiting welfare and reducing bureaucratic waste.

But when you look at the numbers they simply don't add up.  If you were to give 20.5 million adult Australians no strings attached payments of $40,000 a year in lieu of the current welfare system it would cost $820 billion.  This is compared to total current federal government spending of $500 billion.

If you halved the amount to $20,000 a year, the $410 billion spend would still be $230 billion more than the current welfare spend of $180 billion.

Even if you lowered the UBI to $12,000 a year, the $250 billion spend would still be more than our current spending on welfare, education, and health combined.  And it would be a decrease on the current Newstart allowance.

The only way you can have a universal basic income is if you committed to a massive expansion of government and tax hikes.  If implemented, there will be no end to the calls to equalisation through welfare increases.

There are also further negative social impacts.  The expansion of welfare with no strings attached plays into the idea that people have a right to this money, and that it is in no way connected to charity.  It normalises welfare dependence and diminishes the incentive for individuals to be involved in work that creates value for others in the market.

I started by going through some of the principles that underlie the arguments for these policies relating to work.  It is important that we present our own principles in opposition.

We need to argue for better ideals to guide policy.

Personal responsibility needs to be defended as a value of a free society.  Yes, this means that there will a disparity of outcomes in society.  But this is a by-product of being free to pursue our own ends, and taking responsibility for our own lives.

Voluntary charitable giving through civil society needs to be defended as virtuous.  Government crowds out civil society, and reduces private charity.  We need to argue for the importance of society outside government in families, churches, clubs and societies, and make the moral case for helping the poor and unfortunate through private enterprise.

And the best way to help these people is by giving them a job.  A job cannot be reduced to its monetary benefits.  When you work you are contributing to society by creating value for others.  You are earning your money honestly, and fulfilling a central part of what it is to be human.  Working reinforces personal responsibility that makes up the fabric of our society and allows people to build better lives.  This simply cannot be replaced by a direct cash payment from the government.

These are principles that should underpin our approach to labour market policies, so that we can ensure that everyone can experience the dignity of work.

The Minors Are Now Major Parties, Despite Old Player And Media Whinges

Is there really a continuing drift away from the major parties in Australian parties?  Like many I have in recent years bought into the narrative that we live in an age of political disruption — one reflecting a more general diminishment in the sense of affiliation people have to historic institutions — and that this had led to a flight from the major parties.

Given the many surprises embedded in the re-election of the Morrison Government, my interest was piqued by an article on The Conversation, which repeated above aged narrative about disruption without any modification.  It described, "another non-major party vote of close to 25 per cent ... continuing a trend of waning faith in the parties of the political 'establishment'."  As I said yesterday, that conclusion just didn't seem right to me, and with a little more analysis I'm even surer it's wrong.

Firstly, we only get to "25 per cent" by excluding The Greens.  The Greens have been a pretty stable feature of Australian political life for three decades, with votes usually around 10 per cent (as in 2019) and sometimes a bit higher.  In what sense are they not a "major party"?  On AEC figures they received twice as many votes as The Nationals, who have been around for a hundred years, and the only reason we don't systematically exclude The Nationals is that they tend to govern in Coalition with the Liberals (and/or are formally merged as in Queensland and the NT).  The Greens have been in formal agreements with the ALP to enable the latter to govern in both Tasmania and in Canberra, and they have a preference flow back to the ALP, which is very high and very consistent.

Ultimately, the simple share of primary vote is not particularly useful as a guide to defining what is a major party if the discussion is about disruption and alienation from politics.  When we consider the level of institutionalisation of Australian politics, which is concerned with recurring patterns of organisation and values, then longevity and consistency are much more relevant.  So as a first step, let's add back The Greens.  Suddenly we see that 85 per cent of the primary (not 75 per cent) votes went to major parties.

Secondly, Pauline Hanson has also been around a long time.  Her One Nation party, in its various guises, has had many ups and downs.  Stints in jail and other difficulties have been barriers to the institutionalisation of One Nation as a party on the right which could serve a similar function to that of The Greens on the left, i.e. delivering the occasional parliamentarian but mainly being a reliable source of preferences to the Coalition.  The Coalition must also believe this, as during the campaign it stared down calls (particularly from the ABC) to rule out preference deals with One Nation, and it certainly benefitted from the arrangements in obtaining its lower house majority.  The impact was very important in critical Queensland seats and perhaps also Western Australia (where the party remains comparatively strong).

The point being, if we consider One Nation a major party not because of its raw numbers (as of today 370,938 votes or 2.99 per cent), but because it is an institutionalised part of Australia's political spectrum (25 years more or less), then our cumulative tally rises to 88 per cent of valid votes cast for the major parties.

This is a long way from a narrative in which one-quarter of Australian voters are disaffected and stampeding away from the major parties.  A narrative which — perhaps not coincidentally — obscures the size of the Coalition's achievement in securing its come from behind victory.

Then there is Clive Palmer's UAP.  Half a million primary votes is nothing to be sneezed at.  Personally I do not understand it, but it happened.  I will not consider the UAP an institutionalised part of the Australian political landscape (will Clive really come up $50 million every three years?), and so will resist the temptation to include its 3.37 per cent to push my "major party" share of the vote over 90 per cent.  But ask me again in three year's time (and if the UAP is not around, would not those voters drift to One Nation?).

The Australian political system — which includes both preferential voting and public funding — actually encourages the proliferation of a long tail of minor parties (hence the size of the Senate voting paper).  In that context, one could argue that the share of the vote achieved by the major parties — as I have defined them — is remarkably high and shows how involved Australian voters are in their democracy and its institutions.

Finally, I note that for a time the voting rules in the Senate threw up candidates with ridiculously small percentages of the vote, and this fed the narrative of political disruption and disconnection from the major parties.  But those rules have since been changed and the final list of senators elected in 2019 will overwhelmingly be drawn from the major parties.  For commentators it's time to throw out the tired old tropes and return the focus to the major parties and what they actually have in mind for our great nation.  Clearly voters have already done that.

Five ways Morrison can put ''aspiration'' into practice

The federal Liberal Party has now won seven of the past 10 federal elections.  Yet sometimes you wouldn't know it.  Saturday's election victory proved that — at least in Canberra — the Liberals are good at politics.

What the Liberals are not so good at is policy.

What Labor understands, in a way that the Liberals don't, is that long-term change to a country is accomplished through policy, not politics.  Australia's civic, corporate and cultural institutions are all drifting to the left, and the Liberals in the Lodge have been largely powerless to stop it.

If the Liberals remain in power until the end of the new parliamentary term in 2022, they will have been in government for 20 out of 26 years.

If they're not careful all they'll have to show for these two decades are things like a level of government taxation in Australia higher than the OECD average, the world's most expensive electricity, an industrial relations regime stuck in the 1980s, and a financial system dominated by the trade union movement via industry superannuation funds.

Scott Morrison has to make his victory count.  The last term of Liberal government has been almost Fraser-like (if not McMahon-like) in its indolence.

Morrison's brilliant, albeit narrow election victory is an opportunity to change the trajectory of the country.

If the Prime Minister spends the next three years merely implementing and paying for the social programs inherited from the Rudd and Gillard years his success on the weekend will be electoral folklore but little else.

Morrison has political skills and an antennae for public sentiment not seen in politics since John Howard.  What he must do is use those skills to improve Australia.

TURNING VALUES INTO POLICY

Morrison's critics have claimed his campaign was almost policy-free.  They're right.  Beyond promises of tax cuts two elections into the distance and a half-baked scheme of government guarantees of people's home mortgages there wasn't much by way of policy from the Liberals.  In terms of naked politics Morrison put into practice the adage of Napoleon's "Never interrupt your enemy when he is making a mistake".

Any policy that Morrison would have put up would have diverted attention from what Labor was proposing.

Morrison's great insight, though, was that to win the election he didn't need policies because he offered something better than policies.  He offered values.

It is ironic that Morrison, who presents himself as a "pragmatic centrist" who eschews philosophy, ran a campaign that was in fact deeply-rooted in ideology and principle.  All politicians are rhetorical, but the difference with Morrison is that the Australian people believed that Morrison believed sincerely in what he said.

When Morrison said his job as Prime Minister was to help "mums and dads who are trying their hardest to do what's best for their children", he clearly struck a chord with the public.  He captured the ideals of aspiration, the importance of the family, and the hope parents have, which is that their children will be better off than they were.  Against this Labor offered higher taxes and policies to fight climate change.  Put this way, maybe the Liberals could even have won by more.

The challenge for Morrison is to translate his values into policy.  Here's five ways he can do so.

• First, he makes it an objective of his government to increase the rate of home ownership.
• Second, he frames industrial relations reform not only as a way to improve national productivity but also as a means to reduce joblessness.
• Thirds, he starts a red tape reduction program that is initially focused on lifting the burden of regulation on small business.
• Fourth, he begins a discussion about tax reform with the explicit objective of reducing the overall tax burden.
• Finally, if the Liberals don't yet have the courage to abolish compulsory superannuation, Morrison implements reforms to encourage as many Australians as possible to manage their own super.

These measures are just the beginning of what economic reform agenda of the Morrison government could look like.

When they're in power Liberals usually just try to be competent economic managers — which is why under Liberal governments nothing much ever changes.

Morrison can be different.  He can try to put his values into practice.

The Sun Is Setting On Three Decades Of Free Market Economics

How much Australia has changed over the past decade can be seen from the difference between what Kevin Rudd as Labor opposition leader said to get elected in 2007 and what Bill Shorten is saying today in 2019.

You can also notice the change by comparing Labor's and the Coalition's election policies from this campaign.  In 2019 while there's certainly differences between the two, most notably on tax, the difference between the parties policies is nowhere near as big as it should be.

In essence, Labor and the Coalition accept an ever-increasing role for the government in the economy and in people's lives.  While Labor is proposing the part-nationalisation of the salaries of childcare workers, the Coalition wants to part-nationalise lending for residential property.

Significantly, at this election neither Labor or the Coalition are suggesting there's any area of public or private activity in which there should be less government intervention.  Similarly, the idea the role and responsibililities of federal, state and local government should be clearly delineated has gone out the window.  All politics might be local, but when federal politicians start promising the replacement of cricket pitches on local council sports grounds its time to ask whether the concept of federalism needs to be reconceived.

As has been proved since 2013, the Coalition is not against raising taxes, after all it's increased lots of taxes of its own.

The zeitgeist of 2019 is in sharp contrast to that of 2007.

To get elected politicians say what they think people want to hear.  In 2007 Rudd believed he should present himself as a fiscal conservative.  Talking about the Coalition he famously said, "this sort of reckless spending must stop".  In Rudd's first cabinet Lindsay Tanner's official ministerial title was even "minister for finance and deregulation".  Today "deregulation" is a word no politician would dare utter.

Of course as things out turned Rudd was more Whitlam than Howard.  Whether Rudd actually believed anything he said is debatable given that at the first opportunity he used the excuse of the global financial crisis to massively increase the size of government and the level of government debt.  But the fact remains that in 2007, Rudd, at least initially, obviously thought that presenting himself as an economic liberal was politically advantageous.

Today, Labor's campaign rhetoric couldn't be more different.  Bill Shorten is unapologetic about its plans for higher taxes, more government spending and the re-regulation of the labour market.  Labor has also enthusiastically stoked the theme that the economic interests of the younger generation are fundamentally in conflict with those of their parents.

It could be argued the genesis of this language came from the Coalition when it increased taxes on superannuation.

The increase to the top marginal rate of personal income tax that Labor want to make permanent was introduced as a temporary measure by the Coalition.

Just like Tony Abbott and Malcolm Turnbull before him, Scott Morrison hasn't challenged the size and scope of the big-spending social welfare programs established by Labor.  Morrison has framed the debate about economic management as a choice between which side of politics can best pay for these programs — not whether they should exist in the first place.

Across a range of policy areas the differences between the parties are more apparent than real.  For example, on climate change the Coalition is already committed under the Paris accord to cutting Australia's per capita emissions by more than any other developed country.  And when it comes to the regulations imposed on business more broadly, while the Coalition has argued against things like a federal Environment Protection Agency, in office the Coalition has made little effort to cut red tape.

In years to come historians might classify the 2007 federal election as the last of that golden era of economic reform in Australia.

The 2019 federal election, on the other hand, might end up categorised as the election that signalled the end of Australia's three-decades-long experiment with free market economics and the beginning of the acceptance by both major political parties that Australia's economic and policy path was to be less like the that of United States and more like Europe.

Latest First Home Buyers Policy Is Shortsighted And Likely To Create A Bubble

The now-bipartisan bank deposit subsidy scheme is a shortsighted policy which, far from solving the problem of housing affordability, is likely to push up house prices and make housing less accessible for first time buyers.

Under the proposed scheme, first proposed by the government, a limited number of eligible households earning up to $200,000 would require just a 5 per cent house deposit instead of the usual 20 per cent.

The remaining 15 per cent would be underwritten by the government-run National Housing and Finance Investment Commission.

The apparent objective is to encourage more lending, which is the exact opposite to what the government has been promoting for the past three years.

The banking royal commission, the $6 billion bank tax, and the Banking Executive and Accountability Regime have combined to cause a nationwide credit crunch.  Interest-only lending, for example, has dropped from 30 per cent of all new owner-occupier home loans five years ago to just 7 per cent today.

Apparently unhappy with the results of its own regulation, both major parties seem to now want taxpayers to underwrite the provision of home loans to the riskiest of potential borrowers — those who cannot save more than 5 per cent of their wanted property value.

The moral hazard problem is ­obvious.

Usually when banks provide a loan to those with less than a 20 per cent deposit, they require the borrower to purchase lenders mortgage insurance, or LMI.

This protects the bank in the event the borrower misses mortgage repayments, which internalises the risk to the borrower and the lender.

Now banks will be able to do away with this responsible lending practice knowing full well that taxpayers will meet the costs of unmet mortgage payments.

This is precisely the financial logic that led to the growth of subprime mortgage lending in the United States in the lead up to the Global Financial Crisis.  Indeed, the government appears to be setting up Australia's very own version of Fannie Mae and Freddie Mac.

The home loan subsidy scheme likewise will also not necessarily encourage its own objective, though whether the size of the program is big enough to make major difference to prices remains to be seen.

In announcing the scheme, Prime Minister Scott Morrison said the policy will allow more young Australians to buy their first home.  However, the effect is likely to be the opposite.

Government subsidies increase demand which in turn causes prices to rise, not fall.

Scott Morrison recognised this fact this when he criticised Labor's child care policy to expand subsidies to parents on the same grounds.

But here's the thing:  If it really wanted to improve housing affordability, the government would address structural supply and demand issues in the market.

On the supply of housing, developers are hamstrung by red tape and over-regulation.

A 2018 report by the Reserve Bank of Australia, for example, found that restrictive zoning rules add $489,000 to the cost of the average Sydney home, compared with $324,000 in Melbourne.

Meanwhile, on the demand side, two decades of rapid population growth underpinned by mass migration have pushed many Australians out of the housing market, or to the outer suburbs, or into tiny apartments.

By ignoring these issues both Labor and the Coalition have decided that propping up house prices for existing homeowners is a better strategy than expanding that base through greater home ownership.

This is the opposite direction to that taken by the founder of the Liberal Party, and Australia's longest-serving prime minister, Sir Robert Menzies.

Menzies understood that home ownership was a key conduit that connected the past, the present and the future.  Homeowners are conservative by disposition.  They oppose radical change, have an interest in preserving the amenity of their local area, and have a stake in the nation's future.

Australians will not support capitalism if they are not capitalists themselves, and they will not support a society based on the sanctity of ­private property if they do not own property.

The government can cry that Labor is "socialist" all they want, but in a decade's time the Liberals may realise that they have helped create the conditions in which socialism can flourish.

Labor's Push For A National Gender Centre Is Informed By Radical Academic Philosophies And Not Facts

Should it be elected on the weekend of May 18, the Labor Party has promised to offer free sex change procedures, set up a tax payer-funded National Gender Centre, and appoint a new Commissioner for Sexual Orientation, Gender Identity and Intersex Status Issues.  This is completely in keeping with the party's fixation with social justice.

To be clear, when the Labor Party talks about social justice, it doesn't mean things like equality before the law, the equal claim to rights as citizenship, or free speech, which it clearly considers to be outdated and antiquated ideas which should be consigned to the dustbin of history.

No, when the Labor Party talks about social justice, it means the complete rearrangement of society, so that there is no privilege, no ­hierarchy and no difference.  This has everything to do with engineering, and very little to do with justice.  One of the ways it proposes to fulfil the party's self-proclaimed mission to reshape Australian ­society in its own progressive image, is to get society to a point in which we are a genderless, ­androgynous mass.

It genuinely believes that a genderless world in which there are neither men nor women, boys nor girls will be better, because if there are no men, women, boys or girls, there can be no difference between us.  And if there is no difference, there can be neither oppressor or oppressed.  Hey presto, you have a world of perfect equality.

A reading of the party's 320-page manifesto entitled "A Fair go for Australia" reveals Labor's preoccupation with all things gender.  For example, the word "gender" is mentioned 148 times, "intersex" 55 times and "transgender" a total of 35 times.  Compare this to "homelessness" (45), "immigration" (24) and "red tape" (3).  We can see where Labor's pri­orities lie.  The manifesto's authors have ­clearly cast themselves in the role of ­social justice warriors.

Many of would have undoubtedly been through the university system, where they have absorbed the postmodern radical gender theory has been peddled in the humanities as unquestionable orthodoxy since the 1960s.  It is evident from the manifesto, that its authors have clearly been worshipping at the altar of the high priestess of gender theory, French feminist and social theorist Simone de Beauvoir.  Back in 1949, she concluded that "one is not born but becomes a woman".  She argued that while there is a distinction between sex and gender, where sex is the biological framework of male and female, gender is the social construct of experience and of masculinity.

There is no doubt that they will also be acolytes of Judith Butler, who ­decided in 1990 that the perception of gender had become outdated, posing instead that gender is nothing but a ­performance.

Take the University of Sydney's Gender Studies blurb.  "The Gender Studies major", it claims, "encourages you to think beyond commonsense ideas about what it means to be male or female, and to recognise instead the many different ways that people ­embody and experience gender ...".

Meanwhile, over in the Women and Gender Studies Department (WGS) at the University of New South Wales, the department boasts that its "scholars are outward-looking, politically engaged and theoretically innovative:  we aim to make WGS an area of study that has the capacity to explain the world and perhaps even change it".

And by Jove, they are doing their level best to change it.

By way of example, last year the Herald Sun reported that in Victoria the Manningham and Melbourne City Councils were going to remove all books and toys deemed to enforce gender stereotype from their kindergartens, schools and libraries.  Noddy, Winnie the Pooh, Thomas the Tank Engine and Barbie were all going to be discarded on the grounds that they were not "gender neutral" enough.

Unsurprisingly, the source of this madness was the Australian National University, which at the councils' ­request wrote a report called "Building Children's Resilience through Respectful and Gender Equitable Relationships Pilot Project".

The upshot of the document was that it claimed that children as young as two were not only guilty of stereotyping but that they were also developing signs of gender bias:  "Although it is often thought that children are relatively free of the social biases and stereotypes that adults exhibit", the authors lamented that, "the evidence suggests that the foundations for these stereotypes are actually set very young".

But wait, there's more:  "Research also suggests that stereotyping and prejudice along race and gender lines can be observed in children as young as 3-4 years of age".  According to the ­report, toddlers who are barely out of nappies and who are just coming to grips with their existence, are ­apparently guilty of stereotyping and gender bias.

Thankfully, the reports' recom­mendations were not taken up by the councils.

In Tasmania, the Greens and the Labor Party have already passed a bill to remove gender from birth certificates, because they believe it to be a form of discrimination.

In South Australia, the birth certificate options are "non-binary" and "intermediate/intersex/unspecified".

The visionaries at the Australian ­Bureau of Statistics have decided that in the 2021 census, Australians will be asked about "non-binary sex and/or gender identity;  sexuality orientation".

These are examples of just how wide the divide is between mainstream Australians and the political elite.  It is clear that the latter believes that one of the most pressing needs for mainstream Australians in 2019 is to establish a ­National Gender Centre.

What is of great concern as the election looms, and Australians should be rightfully concerned, is that the Labor Party, if elected, will impose this radical gender theory to society, whether society wants it or not, and at society's expense.

We Must Keep Law-Breaking CFMEU On A Short Leash

The survival of the Australian Building and Construction Commission has become a customary element of federal election campaigns.  The ABCC was established in 2005, abolished in 2012, became the trigger for the 2016 double-dissolution election and was re-established that year.  The ALP plans to abolish it if it wins the May 18 election.

Perhaps many are ambivalent about the role of the ABCC.  The proposition that the building and construction industry is riddled with lawlessness and beyond control is tolerated.  Perhaps too few appreciate how damaging the abolition of the ABCC would be.

The Coalition believes the industry's defiance of the law is exceptional and a tough regulator is required.  The ALP believes the building unions' conduct is unexceptional and general workplace relations laws will secure lawful conduct.

In any discussion of the building and construction industry several salient facts apply.  Industry participants, particularly the unions, are singular in their disregard for lawful conduct.  Commercial interests owning and financing projects take a short-term view and are inclined to ignore the industrial turmoil.  Subcontractors have limited cap­acity to resist coercion and extortion.  The Construction Forestry Maritime Mining and Energy Union is dominant and seeks to control the industry's labour supply.  Exposure to penalties and costs to achieve one's aims is an accepted business strategy.  Court decisions are increasingly critical of the union's repeat offending.  The penalties imposed are travelling closer to legislated maximums.

In the absence of the ABCC the worst of unlawful standover tactics would characterise the industry.  An examination of cases brought before the courts since 2005 is illuminating.  The ABCC has been highly successful in holding unions and others to account.  It has won most of its cases.  Its 2017-18 annual report records that the courts awarded penalties of almost $6 million that year.  The majority, $5.6m, was levied against the CFMEU.  Since 2005 penalties against the CFMEU top $17m.

The contraventions penalised in the early ABCC cases continue to feature today.  Also, several officials penalised in earlier cases continue to be respondents to contemporary cases.  The early cases involved coercion to employ a person, coercion to have a union agreement, coercion not to engage a contractor, right-of-entry breaches, and unlawful industrial action.  The same contraventions are found in recent cases.  The cases today involve the levying of substantial penalties:  $74,000 for right-of-entry breaches on a Flinders Medical project;  $668,000 for a campaign of unlawful industrial action on several Queensland projects.  The Barangaroo project in Sydney saw record penalties of $1.706m for coercion, unlawful industrial action and failing to comply with an agreement.

The ABCC has had many legal wins.  In addition, its site presence and educa­tion of industry participants empower many contractors to repudi­ate union threats and intimidation.  Even so, unlawful conduct persists.  The ABCC has more than 30 cases before the courts.  The battle to move to a law-abiding industry continues and the CFMEU's aggression has hardly abated.

The ABCC issue is more than a matter played out by political heavies.  It affects an industry crucial to our economy.  Pervasive indust­rial lawlessness has substantial productivity and cost impacts.

The CFMEU conduct can be reined in only by a powerful and determined regulator.  The union does not listen to reasonable or fair-minded pleadings.  The abolition of the ABCC combined with a proposed 66 per cent reduction in maximum penalties will have an obvious result.  It will be a green light for more coercion and intimidation of honest subcontractors and their hardworking employees.  Unlawful strikes and bans will intensify.  The costs of public and private projects will rise.  No winners, except for those engaging in thuggish behaviour, will emerge.  This is an incomprehensible outcome that has serious and destructive elements and should not be tolerated.

The CFMEU presents a lurking danger for the ALP.  It is the major contributor to the ALP and supports many candidates.  It seeks and uses power ruthlessly.  It must be a genuine concern as to whether the embrace of the CFMEU will ultimately compromise or tarnish the functioning of the ALP.  Time will tell.

In recent years CFMEU officials and branches have pledged support to the besieged government of Venezuela and its autocratic President.  The Australian government was urged by a senior CFMEU official to recognise the last Venezuelan election and congratulate President Nicolas Maduro.  We should be concerned that a building and construction industry let off the leash may embark on a Venezuelan journey of corruption, misery and a callous disregard for the rights of honest individuals.  A strong regulator is needed now more than ever.

Some Coral Just Isn't Sexy Enough For James Cook Uni And The Climate Inquisition

The First Finding handed down by Judge Salvador Vasta in the Peter Ridd court case concerned Bramston reef off Bowen and a photograph taken in 1994 that Terry Hughes from James Cook University has been claiming proves Acropora corals that were alive in 1890 are now all dead — the fringing reef reduced to mudflat.

Meanwhile, Peter Ridd from the same university, had photographs taken in 2015 showing live Acropora and the need for quality assurance of Hughes' claims.

Both sides were preparing evidence for over a year — with the lawyers apparently pocketing in excess of one million dollars — yet there was no interest in an independent assessment of the state of Bramston reef.

It more than once crossed my mind, that with all the money floating around for reef research and lawyers ... there could perhaps be some mapping, or just one transect, at this most contentious of locations supposedly indicative of the state of the Great Barrier Reef more generally.

In his judgment Judge Salvadore Vasta was left to simply conclude that it was unclear whether there was now mudflat or coral reef where an extensive area of Acropora coral had been photographed back in 1890, but that Peter Ridd nevertheless had the right to ask the question.

Indeed, the court case and the appeal which must be lodged by tomorrow (Tuesday 7th May), is apparently all about "academic freedom" and "employment law", while the average Australian would perhaps be more likely to care if they got to see some coral and some fish — dead or alive.

I visited Bramston Reef over Easter because I couldn't wait any longer to know if the corals in Peter Ridd's 2015 photographs had been smashed by Cyclone Debbie that hovered over Bowen two years later, in April 2017.

As I drove into Bowen, I took a detour towards Edgecombe Bay, but I didn't stop and explore — because I saw the signage warning of crocodiles.

Peter Ridd had told me that his technicians had approached from the south south-east in a rubber dinghy to get their photographs.  The day I arrived (April 18, 2019), and the next, there was a strong south south-easterly wind blowing, and no-one prepared to launch a boat to take me out.

On the afternoon of Easter Friday — ignoring the signage warning of crocodiles — I walked through the mangroves to the water's edge.  I found the mudflat which Terry Hughes had claimed now covers once healthy Acropora coral and walked across it.  The other side of the mudflat there was reef flat with beds of healthy Halimeda.  This area of reef flat over sand extended for nearly one kilometre — before it gave way to hectares of Acropora coral.

Professor Hughes had just not walked far enough.

When, with much excitement, I showed my photographs of all the Acropora to a Bowen local.  He described them as, "rubbish corals".  He seemed ashamed that the corals I had photographed at Bramston reef were not colourful.

For a coral to make the front cover of National Geographic it does need to be exceptionally colourful.  Indeed, for a woman model to make the cover of Vogue magazine she needs to be exceptionally thin.  But neither thin, nor colourful, is necessarily healthy.  Indeed, Acropora corals are generally tan or brown in colour when they have masses of zooxanthellae and are thus growing quickly — and are healthy.

White corals have no zooxanthellae and are often dead, because they have been exposed to temperatures that are too high.  Colourful corals, like thin women, are more nutrient starved and often exist in environments of intense illumination — existing near the limits of what might be considered healthy.

Such basic facts are not well understood.  Instead there is an obsession with saving the Great Barrier Reef from imminent catastrophe while we are either shown pictures of bleached white dead coral, or spectacularly colourful corals from outer reefs in nutrient-starved waters ... while thousands of square kilometres of healthy brown coral is ignored.

Peter Ridd did win his high-profile court case for the right to suggest there is a need for some quality assurance of the research — but I can't see anyone getting on with this.  The Science Show on our National Broadcaster, hosted by a most acclaimed scientist journalist, has reported on the case just this last weekend.  Rather than launching a dinghy and having a look at Bramston Reef, Robyn Williams has replayed part of a 2008 interview with Peter Ridd, and let it be concluded that because Peter Ridd holds a minority view he is likely wrong.

Understanding the real state of the Great Barrier Reef is not a trivial question:  it has implications for tourism, and the allocation of billions of dollars of public monies ... with most currently allocated to those properly networked — but not necessarily knowledgeable or prepared to walk beyond a mudflat to find the corals.

Six Seats Are Wagging The Coalition Dog

The idea that Scott Morrison's election policies should be decided according to what he thinks is popular in electorates such as Wentworth in Sydney and Kooyong in Melbourne is like Donald Trump running for president by appealing to voters in Manhattan and San Francisco.

Yet when it comes to the Coalition's climate change policies that's what is happening.  It's not quite as bad as Labor's position on the Adani coal mine because while the Coalition only has one message on climate change, Bill Shorten has two equal and opposite messages on Adani according to who he's talking to at the time.

As a result of byelections and redistributions the Coalition holds 73 out of the 151 seats in the House of Representatives.  Labor notionally has 72 seats.  The Coalition's problem at the election in a fortnight's time is it needs not just to hold seats, but win seats to get to a majority of 76.

Obviously every seat counts.  But to watch Scott Morrison talk about climate change is to get the impression that some seats count more than others.

The Coalition's climate change policies and the way it talks about the issue are determined by the belief that voters in six Liberal heartland seats across the country, want "real action" on climate change.

These six seats — Warringah and Wentworth in New South Wales, Goldstein and Higgins and Kooyong in Victoria, and Curtin in Western Australia — are the tail wagging the Coalition's climate change dog.

When it comes to climate change it's as if the concerns about ever-higher electricity prices from voters living in the nation's other 145 federal seats don't count.

The point has often been made about the disproportionate influence on politics that 520,000 Tasmanians have with their 12 senators compared to New South Wales, with a population of 7.9 million people, that also has 12 senators.  But that doesn't compare with the power wielded by a single swinging voter in Wentworth who goes on the nightly ABC News and announces climate change will decide her vote.

A preoccupation with these six seats means that for example the Coalition can't even discuss the benefits of Australia withdrawing from the Paris Climate Agreement, or the advantages of adopting nuclear power, let alone have any Coalition MP repeat what the country's chief scientist has admitted, which is that nothing Australia does to reduce its emissions of carbon dioxide will have any noticeable impact on the planet's climate.

IMPORTANCE OF CLIMATE CHANGE

There's good evidence that nationwide climate change is nowhere near as big an issue as it might, or it is pretended to be in those six seats.  A few days ago an Essential Research poll revealed that when voters were asked about the importance of specific campaign issues on how they would vote, climate change ranked behind, in order, healthcare, national security and terrorism, management of the economy, jobs, education, and tax.  Further, climate change only narrowly beat immigration and then housing as issues of importance.  Fifty per cent of Greens voters said climate change was an important issue to them, for Labor voters that figure was 31 per cent, and for Coalition voters 16 per cent.

Despite results like this, somehow the effect of climate change policy on the Coalition is that it continues to make and unmake Liberal leaders.

Amid all the talk of the need for "real action" it's forgotten that the Paris Climate Agreement to which Tony Abbott committed Australia to when he was PM, and which was implemented by Malcolm Turnbull as PM requires Australia on a per capita basis to reduce its emissions more deeply than the United States, Japan, the European Union, or China.  As Abbott announced in a press release at the time of Australia's commitment to Paris in August 2015, "Our [Australia's] emissions intensity and emissions per person will fall further than other developed economies."

Clearly to voters in some of the country's most affluent electorates, Australia making the heaviest reductions to its carbon dioxide emission in the developed world doesn't qualify as "real action" on climate change.

Eventually it might dawn upon the Coalition that when it comes to satisfying rich voters in wealthy electorates who say they want "real action" on climate change, more action will never be enough.

Union's War On The West

How threatening to some academics is the idea of a program in Western civilisation being taught on their campuses?  Enough that it's worth going to court over.

That's right:  the National Tertiary Education Union, along with a staff member from the University of Wollongong, have resorted to going to the NSW ­Supreme Court to fight the university's decision to offer a Bachelor of Arts in Western Civil­isation through the Ramsay Centre for Western Civilisation.

To date, the plan is that in 2020, the University of Wollongong's newly created School of Liberal Arts will open its doors to a cohort of 30 students, each of whom will be given a stipend of around $30,000 towards living expenses, and who will graduate in 2023 after having spent three years immersed in the canon of Western civilisation.

In the Ramsay's indicative curriculum, students will read Chaucer, Aristotle, Plato and Foucault.  They will look at paintings by Picasso and Raphael, and they will listen to Chopin and Stravinsky.

According to the Ramsay Centre website, it sees this ­experience as one that will allow students to "gain an awareness and appreciation of the distinctive but many-sided civilisation which informs so much of what we think and do".

Unfortunately, the NTEU sees this experience altogether differently.

It genuinely appears to believe that the sole purpose of the ­Ramsay Centre is to insert itself into a university campus, inveigle 30 perfectly reasonable individuals to undertake its BA and then spend the next three years turning them into rabid racists.

The NTEU is also putting ­pressure on the University of Queensland to reject the BA in Western Civilisation.

In the latest edition of its quarterly magazine "Advocate", a title which sounds much more concerned with activism than it does with education, the general secretary of the NTEU, Matthew McGowan, states that the main reason for going to court is because the BA would pose a serious threat to academic freedom and integrity.

This, quite frankly, is not the case.  The real reason behind the NTEU's recourse to the law is because many of its members who are employed as academics, mostly in the humanities departments, harbour a deep and pathological hatred of Western civilisation which they believe to be fundamentally racist.

In his statement, McGowan claims that the Ramsay Centre "has a specific political agenda based on promoting the superiority or at least centrality, of 'Western civilisation' as the true means of enlightening students".

He continues, stating that "some academics have suggested that the whole project is built on implicit racism".  In 2017, the then head of ­humanities and social sciences at the University of Newcastle wrote an ­article commenting that Western civilisation is past its use-by date because it's too white and not ­diverse enough.

She, like so many others, subscribe to the notion that our established values, customs and history don't represent the diverse racial, cultural, and gender identities of Australians and so they need to be demolished.

The idea that Western civilisation is racist was recently articulated by Nick Riemer, a lecturer in English at the University of Sydney by directly connecting the Christchurch massacre with the teaching of Plato, Shakespeare and Virgil.

Having rejected Western civilisation, Riemer and his colleagues have instead embraced the radical theory of identity politics.

In the humanities, whether it be History, English, Anthropology or Social Sciences, everything is now geared towards the intellectual equivalent of a totalitarian state which is governed by one particular orthodoxy:  class, race and gender.

In my 2017 report "The Rise of Identity Politics:  History in Australian Universities", I found that the most frequently employed words in the subject descriptions of all 746 history undergraduate subjects taught at 35 Australian universities were "race", "gender", "identity" and "sexuality".

Similarly, in my 2018 report "Australian History's Last Stand;  An audit of Australian History Teaching at Universities", it turns out that nearly three-quarters of all Australian history subjects, that is 102 out of 147, were taught through the lens of identity politics.

The plain and simple truth of the matter is that the folk at the University of Wollongong, or indeed any university for that matter, simply can't afford to have a BA in Western Civilisation running on their campus.

This is because it would reveal the extent to which they are failing their undergraduates by filling their heads with nothing but class, race and ­gender:  It would reveal just how ­educationally malnourished today's undergraduates really are.

The chance to learn something different by returning to the great literature, art and music of Western civilisation would be like offering them a choice between a sumptuous buffet or a bowl of gruel.

The opportunity would be too tempting, the contrast too great.

Students who are already deserting the humanities in their droves, will ­ultimately pick the buffet over the gruel.

Labor's Childcare Splash: For Our Kids — Or Their Union Mates?

Last weekend Labor announced a $4 billion funding increase to childcare subsidies.  More worryingly, Labor would also intervene to raise the wages of early childhood educators by 20 per cent over the next eight years.

Government entering the private sector to top up wages is, as former Labor powerbroker Graham Richardson described it, a lousy precedent.

Labor tried this under the previous Rudd/Gillard Government;  the Abbott government abolished it.

Funded to the tune of $300 million and dubbed the Early Years Quality Fund, its purpose was to deliver pay rises to 30 per cent of childcare workers.

The Auditor General found that the funding cap was reached within the first 13 hours of operation of the policy and it was, in many cases, being used to get more workers to join the union.

Auditor-General Ian McPhee said of the fund "It was obvious the money was going to run out quickly, and it did, and it was on a first come, first serve basis.  "I think it is quite an unusual set of circumstances".

The vast majority of the sector missed out on the funding because unionised facilities were given priority.  Interestingly that in the same year that Labor introduced the scheme, the union, United Voice, tripled its donation to the Labor Party to $1.5 million.

Labor have not released details on how this new scheme will be administered.  Will it be used as a tool to drive union membership?  Will it again be granted only to unionised childcare centres?  These are the kinds of questions we need answers to prior to the election.

In 2012, United Voice successfully lobbied the federal government to introduce a burdensome requirement that childcare centres be staffed by "qualified early childhood educators".  Now, unions like United Voice demand pay rises on the basis that childcare workers are "qualified early childhood educators".  Funny that.

Union demands for accreditation after accreditation for childcare workers have added additional complexity and red tape to the system, this is the key reason why childcare is so unaffordable and out of reach for many families.

In 2013, the Fair Work Commission dismissed the unions' application for a 35 per cent pay increase, after more than 70 submissions and several hearings;  because they failed to show early childhood educators were paid differently to men performing work of comparable value.

The unions' attempted to argue for a pay rise on the basis that the sector was 97 per cent women and qualified early childhood educators earned as little as the half the average wage at $21 an hour.

The FWC argued that the union could have pursued their claim as a more conventional work value case.  But no, they decided to point to manufacturing workers to prove men were paid more than women for doing comparable work.

This argument has been a pushed along campaign by Labor and the unions since then.  In September 2018, when arguing in favour of more pay for childcare workers.  Labor Shadow Minister for Education, Tanya Plibersek said, "A person with a Certificate 3 in Early Childhood Education (where about 98 per cent of workers are women) earns around $20/hour when someone with a Certificate 3 in Metal Work earns around $40/hour.  That is gender-based discrimination".

This is plainly wrong and a worrying statement for someone who aspires to be the deputy prime minister of Australia.  A man working in childcare would also earn $20/hour, as a female working with Metal Work would earn $40/hour.

It is not gender-based discrimination when the pathways for education and the career are available to both men and women.

In addition, they are completely different jobs, metal work requires specialised skills, and is at times a hazardous and sweltering job.  This is not downplaying the role of childcare workers and the great job they do.  However, to compare both as equal work because they both require a Certificate 3 qualification is garbage economics.

However ridiculous the argument used by Plibersek, this is the logic used by Labor to promote their new childcare policy.

The cost of childcare has risen by over 300 per cent in the past 20 years — 3.5 times the rate of growth of average wages — this is largely due to red tape.

Throwing an endless amount of money at the sector will do nothing to improve quality or cost in the childcare sector.  Cutting the red tape that has pushed up costs will go a long way to providing hard working parents with affordable childcare.