We Deserve The Chance To Save Our Own Lives

This week marks the end of a turbulent time of my life.  For the past three years I've been travelling to the other side of the world for lifesaving treatment at a huge personal cost.  This week, I will walk into the Peter MaCallum Hospital in Melbourne to collect my lifesaving drugs from the pharmacy.

In 2015 I was set to die.  I had an incurable form of Chronic Lymphocytic Leukaemia from which I'd relapsed after chemotherapy failed.  But for a 46-year-old with three children, death was not an option.

Following online research I discovered there were novel drugs in development that might just save my life.

The problem was I couldn't access them in Australia.  Only 3 per cent of terminally ill patients can get onto trials of such drugs.

After a trip to the US, and a lucky meeting with a British doctor, I moved to London to join a clinical trial of an experimental drug at Bart's Hospital.

Ironically my wonder drug, venetoclax, was invented in Australia but I had to travel to London to take it.

I was lucky enough to become patient 49 on a "phase 1" trial.  This combination therapy followed a first in human safety trial of 80 brave patients, but came before the drug was listed by the Food and Drug Administration in the US.

I was one of just 75 people worldwide who received the treatment.  Within three months I was in complete remission and within seven months I had no detectable cancer — it just melted away.

I had to fly to London for monthly appointments for a year, then three monthly appointments up until now.  I have had no traceable disease for 29 months and take my drug daily with no side effects.

I work full-time and my children have their father.  But I am one of the very few lucky ones.  Red tape is preventing dying patients from accessing lifesaving drugs.

I am now campaigning for all terminally ill patients to have access to the latest drugs.

Right to Try, letting patients legally access these, is an important part of that.  As it stands, dying patients have to wait for phase 1, 2 and 3 clinical trials to be completed before drugs are made available.

My CLL drug has taken 30 years to reach that stage.

It has since received Therapeutic Goods Administration approval for use in Australia — but is still not available on pharmacy shelves.

Right to Try laws in the US were created to enable terminally ill patients — with advice from their treating doctors — to try experimental therapies which have completed phase 1 testing but have not yet been approved for use by the FDA.

The legislation has its roots in the HIV epidemic.  The Dallas Buyers Club movie shows how people with HIV sought access to experimental drugs through illicit means.

Legislation in the US began in 2014, thanks to the work of the Goldwater Institute, a libertarian think tank objecting to government interference between patients, doctors and pharmaceutical companies.

"This is really a law for people who are very sick, who have exhausted all treatment options and who cannot enrol in a clinical trial," Goldwater's Starlee Coleman explains.

If a doctor believes an investigational drug is your best hope, they can initiate contact with that drug manufacturer's compassionate use program to discuss options for access.

"It's only for people who say, "I understand the risk.  I know this drug is not fully approved," Coleman says.

The TGA's Special Access Scheme allows doctors to prescribe a drug listed anywhere in the world to dying patients.

Australia should extend this to the US model of allowing access to all drugs which have passed phase 1 testing.

Doctors knew my drug was working years ago.  Signing the consent form to take part in the clinical trial was terrifying but it was more terrifying knowing the alternative.  All patients, with informed consent, should have the opportunity to save their own lives.

Everyone Would Have Paid Cost

South Australians can breathe a sigh of relief today after the State Government declared its bank tax "dead".  If any state economy needs lower taxes, less red tape and a more competitive free enterprise environment, it's South Australia.

Well done to the Liberal Party, Australian Conservatives and Advance SA MPs for standing up for SA at a time when this state desperately needs champions.

The government's new tax was a tax on every South Australian, not just the banks.

If you have a home loan, this tax would have affected you.

If you own a business, this tax would have affected you.

That's because governments can't impose taxes for free.  Labor said the bank tax would raise $370 million.  And that money has to come from somewhere.  There's no such thing as a business "absorbing" costs.  Someone always pays.  Most likely the costs would have been passed onto consumers.  If you're a bank customer that means you.

But even if the banks chose not to increase fees someone else has to pay.  The banks could have cut wages for their employees instead.  But that's difficult too.

Banks operate in a competitive labour market, and they're constantly trying to attract talent from elsewhere in Australia and overseas.

The only other option they have is to reduce dividends to shareholders.  And guess what?  Because of compulsory superannuation it's likely you own Australian bank shares via your super fund.

This is why the best way for governments to raise revenue is to grow the economy.  A growing economy means more jobs, higher incomes, and more money in the government's coffers.  When it comes to taxes, there ain't no such thing as a free lunch.

Instead of raising taxes, the government should be doing everything it can to cut taxes and cut red tape.

State Government Bank Levy Makes South Australia Riskiest Place For Investment In Australia

Imagine being an international investor looking at Treasurer Tom Koutsantonis's Budget.  You wouldn't be interested in his infrastructure spend and "future jobs fund".

You'd immediately hone in on the fact that the South Australian government has doubled down on the Federal Coalition's bank levy by introducing its own state bank levy.

And you'd immediately understand that this makes SA the riskiest state to invest in, in a country that is looking like an increasingly risky place to invest.

South Australia has the highest unemployment rate in the nation.  It needs firms to put their money into the state and create productive private sector jobs.  No government spending can substitute for an attractive economic investment climate.

In this, the state's bank levy is almost comically bad.  The federal bank levy is arbitrary, punitive and unjustifiable.  Treasurer Scott Morrison groped around for a rationale for taxing the big banks, finally landing on:  people "don't like you".

Koutsantonis's tax is even more arbitrary and its rationale even more slight.  In his Budget speech, he said that the "banking sector is very profitable" and that given, in his view, the GST should be applied to financial services, SA should expropriate some of the big banks' money.

But this is nothing more than a rhetorical shell game.  The SA bank levy looks nothing like the GST, developed and refined over nearly two decades to be as efficient as possible.  The GST is a consumption tax specifically designed to be paid by consumers.

Koutsantonis says he will ban the banks from passing his tax onto consumers.  (This is astonishing by itself — the SA government is going to start regulating banks?  We ended state-based financial services regulation 20 years ago.)

Finally, the GST was specifically devised in order to get rid of state-based taxes on financial products.  These taxes — the bank account debits (BAD) tax and financial institutions duty (FID) — were uniformly agreed to be inefficient, to disproportionately harm the poor, and to harm Australia's international competitiveness.

Getting rid of the FID and BAD tax was a key part of the GST deal.  Is SA going back on that deal?  Is it dipping out of the GST compact?  How do Koutsantonis and Premier Jay Weatherill think the other states and Commonwealth, should respond?

With the imminent closure of Holden, SA needs to be looking to grow its economy and attract investors.  But if there's one thing investors hate, it is policy uncertainty.

Policy uncertainty is exactly what Koutsantonis has delivered.

South Australia's new home detention laws should not be about coddling criminals

Lindsay Bassani, a former Education Department bureaucrat and football coach, was sentenced to home detention after stealing almost $10,000 from the South Australian Aboriginal Sports Training Academy.  Despite being allowed to avoid prison, he is now complaining about his electronic tracking bracelet because of the stigma of being seen with it.

The fact that Mr Bassani is complaining is a good thing.  It means he feels like he is being punished, which is precisely the point of his sentence.

As reported in The Advertiser, Bassani is one of the first beneficiaries of sentencing changes introduced by the Weatherill Government in May.  These reforms gave judges more discretion in allowing certain nonviolent, low-risk offenders to serve their sentences in home detention, and they were introduced for very sound reasons.

The prison population in South Australia has grown by 75 percent in the last 10 years.  There is evidence to suggest that not all of this growth was necessary or desirable.

For example, the most serious offence of almost half of these prisoners was a nonviolent offence.  In many cases, locking them up is doing very little for community safety.  And it is known that prisons often fail to prevent criminals from reoffending.  Nationwide, 59 percent of prisoners have been imprisoned before.

South Australian taxpayers spend about $96,000 for each person in prison each year.  With prisons already at capacity, if this trend were to continue, taxpayers would soon need to pay for a new prison.

Instead of continuing to spend more and more money on locking up people who pose little threat to the community and for whom incarceration is unlikely to be rehabilitative, South Australia has rightly decided to try something different.

Bassani committed a nonviolent, relatively minor property crime, and has a stable job and home.  He is the sort of offender for whom laws like this are designed.

But even though this kind of reform has merit, policymakers and judges must not lose sight of the fundamental purpose of the criminal justice system:  the punishment of individuals who harm others or the community.

It is vital to the operation of the criminal justice system that criminals feel they are being punished for their actions.  And for victims, seeing a punishment imposed is essential to their sense of closure.

This means that offenders like Bassani should not be coddled.  Restrictions like not being able to consume alcohol, a curfew, and being confined to certain locations, are not only entirely reasonable but necessary to give weight to his punishment.  Incredibly, Bassani is suffering none of these hardships.  It is positive that he is employed but being allowed to travel to his workplace should be the limit of his mobility.  He shouldn't be playing footy, let alone worrying about how he looks on the field.

What this case illustrates is that the goal of punishment reform should not be to give criminals an easier time.  Instead, the goal must be to impose punishment more effectively, to reduce crime and recidivism, and more efficiently, to reduce government waste.

There is a common view in criminology that crime is a result of social dysfunction.  Rather than the traditional understanding of crime being a choice made by individuals, on this view crime is a pathology caused by social and economic disadvantage and so criminals are not really responsible for their actions.

In a perverse way, criminologists consider criminals to be victims.  And so they support reforms such as these because they do not believe in punishment at all.

This nonsense should not be allowed to discredit or discourage good faith attempts to rationalise criminal punishment consistent with a traditional emphasis on retribution.  The criminal justice system is not a tool with which to reengineer society or to redress social grievances.  It is the means by which our communities are kept safe and peaceful, and it achieves this end by ensuring that criminals suffer negative consequences for their wrongful acts.

It is possible to get the benefits of punishment reform — lower crime and recidivism, with less spending on prisons — without, in effect, letting criminals like Bassani off lightly.

But this requires policymakers and judges to insist on the need for criminals to experience their sentences as punishments.

Savings from cutting prison population could put more police on the street

The number of people in Australian prisons has increased 40 per cent over the past 10 years.  In South Australia the prison population has increased by nearly 75 per cent over the same period.

Certainly a great many of these people deserve to be in prison.  But almost half the people serving prison sentences in SA were convicted of nonviolent offences.

Jailing nonviolent offenders is a waste of taxpayer funds, and can create serious unintended consequences that make the community less safe.

This is why there are good reasons to support the Weatherill Government's recently passed sentencing reforms, which allow courts the power to permit some nonviolent offenders to serve their sentences in home detention.

Under these measures, people can serve their sentences at home with a combination of supervision and satellite monitoring if the court is satisfied that they pose a low risk to the community.

The main purposes of criminal justice are to protect the community from offenders, to deter others who might be considering offending, to aid offenders' rehabilitation, and to give victims and the public a sense of retribution.

The first of these is non-negotiable:  where the safety of the community cannot be assured, prison for offenders must be the result.  It is not only proper but necessary to imprison those individuals who have demonstrated a propensity for criminal violence or a habit of criminality.

But prison is terrible at rehabilitation.  If the success of rehabilitation is measured by the frequency with which prisoners reoffend upon release, then the recent data shows that imprisonment is neither particularly effective nor becoming more effective.  The nationwide proportion of prisoners who have been imprisoned before has stayed steady at about 60 per cent for a decade.

If imprisonment is failing to fulfil its deterrent and rehabilitation functions, is it sufficient to say that jail is necessitated by outraged public sentiment and that, to mean anything, criminal punishment must include a custodial sentence?

To answer this, consider the circumstances of offenders in home detention.  They lose much of their liberty, must sustain themselves despite likely having lost their employment, and accrue the lifelong stigma of a conviction.

In many cases, they will have had to pay large fines and make restitution to their victims.  And rather than being a drain on the budget, their fines contribute towards reducing the cost of criminal justice.

Every prisoner costs the taxpayer almost $100,000 per year.  And with SA's prisons already at capacity, increasing the size of the prison population further would require building a new prison.  Even if alternative punishment is only equally effective to prison in deterring crime, it would constitute a large saving to the public purse.

Indeed, the only people who really stand to gain materially from an ever-burgeoning prison population are the people who run and staff prisons.  Unsurprisingly the Public Service Association is opposed to these reforms.  But we shouldn't allow union self-interest to prevent the realisation of better outcomes.

The savings from reducing the prison population could be redirected to putting more police on the street, targeting the worst offenders and known centres of crime.

Studies show that criminals respond more to the chance that they will be caught than to harsher consequences for being caught.

Rack, pack and stack doesn't work.  With an appropriate emphasis on safety, there is good reason to believe that alternatives to prison for nonviolent offenders can be just as effective in achieving the ends of criminal justice.

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The state and its leading politicians are in something of an economic policy rut along with the rest of country

This year has represented something of an economic ''annus horribilis'' for South Australia.

In August BHP Billiton spectacularly shelved its $30 billion Olympic Dam copper-gold-uranium mine expansion plan, the subject of sensitive development approval negotiations over many years.

For the domestic audience BHP Billiton CEO Marius Kloppers cited factors such as falling commodity prices and a high Australian dollar as reasons for the mine project cancellation.  However, there is little doubt that other factors were pivotal in the decision.

In particular, the carbon tax, rising labour costs attributable to the industrial relations system and drawn-out regulatory approval processes also conspired to make Olympic Dam an economically-unviable proposition.

The state's unemployment rate, in trend terms, has been on the upward march all year, with 47,400 people languishing on the dole queue in November 2012 alone.

Then, in mid-September, the bad news continued with credit ratings agency Moody's downgrading South Australia's credit rating.

Citing a combination of elevated government spending and less robust revenue growth, Moody's castigated the state's loose fiscal policies, which are likely to see Budget deficits and rising debts dragged out further into the future.

And now state Treasurer Jack Snelling has released the government's mid-year Budget review, unveiling an updated Budget deficit figure of about $1.2 billion for this financial year.

The Treasurer has been quick to cry foul over revenues growing less than previous projections, and hopes that the new parking tax hit will be part of the Budget repair solution, but he should cast his glance away from his State Revenue Office and towards the line departments.

This is because the horror mid-year Budget result is, in fact, testimony to many years of state overspending under the watch of line agency ministers, and the government's general inability to rein in spending to accommodate slowing revenue growth.

If the credit agencies again downgrade the South Australian credit rating in light of this latest reporting on the state of the Budget, it means the government will face even higher costs associated with its already heavy borrowings.

So it seems the state and its leading politicians are in something of an economic policy rut, with the rest of the country — admittedly with their own economic problems — viewing SA with either pity or bemusement.

But rather than dwell on the negatives, as serious as they may be, South Australians should grasp the opportunity to seriously think about the future of their state and recalibrate public policies accordingly.

As the weight of history in Australia and internationally illustrates, economies grow most strongly when the private sector is accorded with greater freedoms to produce goods and services for the benefit of their customers.

In a world of capital and skilled labour mobility, what this means is that the costly and often economically ruinous interventions by government should be reduced, ensuring that market participants receive greater returns from their economic ventures.

So what priorities could South Australians consider to get their economy back on track and their government right-sized in the interests of making the state the best place to live, work and invest?

Could SA take a leaf out of the tax-cutting experience of Queensland during the Bjelke-Petersen years, with the aim of making the state the lowest taxing state in Australia?

Should the creeping regulations of the regulatory state, which imposes substantial financial costs and delays upon investment projects, be substantially cut back to encourage business development?

What about the role of state and local governments when it comes to spending?

Are there reform opportunities available to privatise government assets to allow the private sector a greater role in capital works development and maintenance, saving taxpayers money in the process?  When seeking to answer such questions, South Australians could benefit from considering regional economic success stories from around the world.

For example, Texas continues to buck the trend of tepid economic growth and out-migration along America's east and west coasts by offering low taxes and an efficient regulatory climate to encourage new investments and job opportunities in the Lone Star state.

In Canada the provinces of Alberta and, more recently, Saskatchewan have undergone a process of economic reform focused on repairing their government budgets and reducing relative government size, providing renewed confidence for its burgeoning local oil and gas sectors.

South Australia has a proud history of economic performance, being the traditional home to the likes of iconic company News Limited and a world-class wine industry today, and with some potentially solid advantages such as a minerals bounty in its favour.

While the existing challenges facing the state economy are significant, genteel decline is by no means desirable or inevitable.

Indeed, there is no better time to leave 2012 behind and put in place the building blocks for South Australian economic reform and renewal than the 2013 new year.

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Corporate welfare looms as major hurdle

The idea the Australian automotive industry can remain competitive on the global stage, while being propped up by trade barriers and subsidies, cannot be sustained.

Until the 1980s, the evolution of the industry effectively was governed by a compact among domestic manufacturers, trade unions and government.  The consumer was excluded.

Manufacturers of vehicles and parts wanted to establish and maintain a production presence in Australia, but a highly regulated labour market meant their production costs were high.

The unions wanted an automotive industry to boost their membership rates, but didn't want to forgo labour regulations that incidentally made local car making uncompetitive against cheaper imports.

Successive federal governments smoothed over the deal for a local industry through an elaborate regimen of trade barriers, including import quotas, tariffs on imported vehicles and explicit local content requirements.

State governments from Thomas Playford onwards played their part in the corporatist deal by providing cheap land and tax incentives.  What emerged was an uncompetitive Australian automotive industry weighed down by high production costs.  Consumers made their preferences felt as the share of sales of imported vehicles steadily increased, despite the deliberate price penalty of a tariff rate on imports that peaked at 54 per cent in the early 1980s.

Ironically, it took a Labor government federally to recognise the car-making compact needed to be shredded.

Import quotas for the industry were abolished by 1988 and tariff rates were reduced by 2.5 percentage points each year from 1990 to 15 per cent in 2000, with further reductions to 5 per cent today.

The economic proposition that the elimination, or thereabouts, of trade barriers would lead to a smaller manufacturing base more responsive to market conditions largely has been borne out by the evidence.  The number of manufacturers narrowed to GM Holden, Toyota and Ford, while employment in vehicle and parts manufacturing fell by 38 per cent from 1990 to 2000, with more cuts in recent years.

What we also have seen is an Australian automotive industry increasingly export-oriented, with substantial markets in the Middle East and elsewhere.

Its remaining labour force has become more productive over time.  Having largely conceded on the tariff debate, manufacturers, unions and the Government now see heavy subsidies as the best way to achieve the political ambition of a country that makes things.

The Productivity Commission says vehicle and parts manufacturers received about $721 million in outlays and tax concessions in 2009-10 -- an implicit transfer from poor taxpayers to rich company owners equivalent to more than $12,000 a job.

The Australian automotive industry has progressed on the road to improved competitiveness, but can realise full potential only once all remaining obstacles of corporate welfare are removed.

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The maintenance of a corporate welfare state comes at a hefty long-term price

The latest edition of my state business tax study, showing South Australia as the highest taxing state for this year, highlights the limitations of the State Government's activist approach to economic development.

A defining feature of South Australian economic policy has been the extent to which successive state governments have doled out subsidies and other incentives in an attempt to encourage firms to either expand in, or relocate to, the state.

In 2005 a state parliamentary committee found total state government assistance to industry totalled $661 million over the 10 years to 1998-99.

Since that period, the government has expended at least $496 million on industry and regional development programs.

The State Government has expressed every intention of continuing with this approach, with Treasurer Kevin Foley recently nominating defence, mining and renewable energy as industries to be targeted for future development.

While the "picking winners" approach to economic development might satisfy the political appetite for press and photo opportunities, the maintenance of a corporate welfare state comes at a hefty long-term price for the broader South Australian economy.

For a start, the state's industry policy experience has been littered with numerous, high-profile failures that distort resource allocation and cost taxpayers.

The notorious Multi-Function Polis project failed to get off the ground despite a decade of effort and $100 million of taxpayer funding.  The government also provided support to establish an SA base for the Collins Class submarine fleet, which has been plagued by mechanical problems representing a drain on public finances.

Mitsubishi announced the closure of loss-making motor vehicle manufacturing plants in Adelaide despite years of money funnelled from taxpayers.

In the ultimate case of policy lessons not being learnt about the futility of selective industry policy, the state and federal governments responded by announcing a $30 million South Australia Innovation and Investment Fund.

The subsidisation of perceived winners also costs non-beneficiary businesses as state taxes would tend to be higher than they need otherwise be as a consequence of picking industry winners.

The State Business Tax Calculator estimates taxes paid by a business if it were to operate in any of the six states.

Using a method employed by the World Bank, the report shows an SA business would pay $247,437 in payroll tax, property taxes and stamp duties in 2009.

According to my analysis, SA is the highest taxing state with the tax level about 5 per cent above the states' average.  Even more disconcerting is that business taxes are about 11 per cent above that of the lowest taxing jurisdiction of WA.

The key contributors to SA's unenvied result are above-average property taxes, high insurance duties and hefty motor vehicle registration fees.

Indeed, SA imposes the highest land tax and insurance duty impost of the six states.

Given the narrowness and inefficiency of existing state tax bases, the high-taxing approach pursued by the Rann Government represents a significant impediment for the ability of existing businesses in SA to compete on the national and world stage.

The confirmation of SA's status as the highest taxing state in Australia clearly demonstrates the cargo-cult mentality to economic development does not work.

The better approach to build a state economy would be to cut taxes, a low-cost strategy to attract investment and cultivate a long-term productive industry base without the price tags of big government spending and inefficient market distortions.

With a critical state election looming, how the major parties respond to my findings will go a long way toward establishing their credentials on state taxation.

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Big business should be allowed to fail

Across the developed world we are witnessing an outbreak of bailout mania by governments.

In the U.S. and Europe, governments have injected tax-financed life support to financial institutions.

This includes the mother of all bailout packages, the $US700 billion plan by the Bush administration.

Citibank is a recent beneficiary of a government bailout, and the US and Europe has been discussing similar bailouts for car manufacturers.

Closer to home the Federal government is bailing out car manufacturers and childcare centres.  The government has also introduced a deposit guarantee for banks.

These interventions aim to preserve existing economic activities and jobs.

The problem is that governments may not know when to stop.  The Commonwealth has recently announced a $2 billion debt guarantee to car dealers across Australia.

To understand why government bailouts are undesirable, we need to appreciate how markets work.  Businesses compete for the dollar votes of customers.

If a business satisfies its customers by producing high quality outputs at lower prices, it can cover its costs and gain reward of profits.  If not, it could incur losses and perhaps become insolvent if the business doesn't change its practices to suit consumer preferences.

Profitable businesses promote consumer welfare and, through it, the broader wealth of nations.

Business failures are painful for those immediately concerned, but they tend to carry broader benefits.  The resources tied up in failed businesses are re-allocated towards higher valued uses.

This cleanses the economy, paving the way for renewed growth.  Business failures also teach aspiring entrepreneurs what not to do when entering the marketplace.

The ubiquity of business failures is outlined in a 2006 book by Paul Ormerod, Why Most Things Fail.  About 48 of the world's top 100 companies in 1912 no longer existed by 1995.  Only 19 of the top 100 companies in 1912 remained so in 1995.

This corporate adjustment did not prevent the global economy growing by a factor of 12 over that period.

Only 39 of the top 100 Australian companies from 1990 survived to 2002.

Some argue that government bailouts should assist firms that are too big to fail.  The reality is that the bigger the unproductive firm that wastefully consumes an economy's scarce resources, the sooner it should be allowed to fail.  That way, labour and capital can be gainfully utilised by more viable businesses sooner.

The risk is that businesses may come to perceive recent government rescue packages as a fixture of corporate practices.

This raises a moral hazard effect, where the expectation of a bailout will do nothing but encourage inefficient or risky business practices.

Some targets for the bailout mania are industries whose investments have been supported by government subsidy, or have been fuelled in recent years by the aggressive credit expansion of central banks.

However, bailouts in these cases are just as improper as for other industries, if not more so given the great economic costs of the initial government interventions.

When it comes to market capitalism, it is true when they say there is a silver lining to every cloud.  This is on the proviso that we let markets do their adjustment work.

The sooner governments abstain from bailing out firms, the sooner we can all get on with the next phase of growth and prosperity.

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Billions lost as SA finances melt away

In the modern economy, everything is interconnected.  Poor financial regulation in the U.S. leads to a meltdown in their housing market;  banks around the world start building up bad debts as international credit flows tighten.  A financial sneeze halfway around the world leads to the cold of an economic downturn in Australia.  Nobody is immune from the market adjustment.

South Australia's production is growing more slowly than the rest of the country.  House prices in Adelaide have fallen by 2 per cent over the September quarter, while manufacturing jobs have been lost over the past year.

The State Government Budget has also been affected by global financial market frictions.

Treasurer Kevin Foley made a statement to the Parliament in mid-October which makes for sobering reading for SA taxpayers.

The Government's superannuation investment arm, Funds SA, recorded a loss on its investments from July to September of $627 million.  This was on top of losses of close to $1.5 billion for 2007-08.

Unfunded superannuation liabilities are expected to increase by an additional $150 million.

Overall taxation revenue is expected to fall by about $100 million in 2008-09, mainly due to declining housing finance commitments impacting on the expected duty revenue take.

Declining consumer confidence is likely to reduce the flow of GST revenue by a further $30 million.

The extent to which the state's finances have melted away has been sudden as well as substantial, and looks likely to wipe out the $160 million Budget surplus estimated for 2008-09.

The Treasurer has not ruled out spending cuts or the deferral of capital projects.

However, the reforms needed to scale back the public sector are going to be much more painful than should otherwise be the case.

This is because the Rann Government coasted along during the good times, spending as much money as it could get.

From 2002-03 to 2006-07, the general government sector raised $2.4 billion in revenue and spent $2.6 billion.  This led to deterioration in the Budget surplus over those years.  In other words, less money was set aside for the "rainy day" of the current global financial crisis.  In its latest annual report, the Auditor-General also revealed a range of cost blowouts and poor management practices within government.  As government inefficiencies have grown, key ministers seem to have turned the other cheek.

The years of "maximum spending" and waste have come to haunt the Government as it undertakes the necessary task of putting the State Budget on a more sustainable footing.  The time for action is now.  Yet, Mr Foley has indicated that an economic statement informing people of the fiscal implications of the financial crisis will be deferred.

By contrast, other states such as Tasmania are bringing forward their midyear statements to bring business and the broader community into a discussion of the reforms that need to take place.

Now is not the time for the Treasurer to act like a rabbit in the headlights.

The State Government has no option but to cut the excess spending built up over the good times, and to do it quickly.

BLOATED GOVERNMENT

• Additional spending from 2002-03 to 2006-07 helped subsidise the employment of an extra 13,800 bureaucrats across the SA public sector.
• In 2006-07, about 14 per cent of people working in SA were employed by the Government, the second highest state proportion after Tasmania.
• The wages bill to support the extra state public servants has also increased over the life of the Rann Government.  Bureaucrat salaries now account for about 48 per cent of the general government Budget.
• With teacher unions taking industrial action seeking more pay, the challenge is on for the Government to quell further increases in public sector wages in the interest of taxpayers.

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Top response, but tsunami fund appeals must stop

The Australian public has been extremely generous in its response to the Boxing Day Tsunami appeals conducted by foreign aid non-government organisations (NGOs) but the time has come for the question to be asked -- how much is enough?

On the 26th Fenruary in England, British aid agencies will end their tsunami appeal having, like their Australian counterparts, broken all previous fundraising records.

Prior to this, a number of groups ceased taking money, most notably Medecins Sans Frontieres.  Having achieved its stated target it stopped taking funds.  However few others aid NGOs followed its lead.

Some aid NGOs in Australia have indicated that they are winding down their appeals or have ceased them.  However, they have not made this clear at all.  There is still some confusion within the public as fundraising events and advertising continue seemingly unabated.  For example, next week there will be yet another tsunami benefit concert and a number of sporting-related fundraising activities

While this desire to continue to help is laudable, the danger is that all of this activity will cut fundraising for a host of local not-for-profit organisations such charities, schools and churches which also rely upon peoples' generosity.

The reality is that the charity dollar is finite and while there is a lack of hard data, anecdotal evidence in Australia indicates that many not-for-profit organisations are already finding it tough going.

The Adelaide Advertiser ("Disasters put charities on a tight rein" 15/2/05) has already reported that several local charities in South Australia are starting to feel the effects of the foreign aid fundraising frenzy triggered by the tsunami.  Some charities have admitted that regrettably their own fundraising efforts have suffered due to the public's quite natural desire to help victims of the tsunami.

A similar picture is emerging in countries like the United States, England and Canada.

While foreign aid NGOs do have a responsibility to raise funds for people overseas, they also have broader social obligations, than just their own narrow institutional interests.  This is certainly what they have pushed on government and business over the years, so it is not unreasonable for them to practice a little of what they preach.

By any measure, the international response to the tsunami disaster is extremely well-funded.

While it is difficult to keep track of the numbers, it is estimated that amount of money pledged globally is around US$10 billion ($13 billion) from all government, private and corporate sources.  The English translation of the Japanese word tsunami may mean "harbour wave", but in the fundraising world of the aid industry the word means "money" and lots of it.

The international director of the British Red Cross Matthias Schmale has noted that aid agencies typically US$50 per affected person, whereas the tsunami appeal generated a staggering US$1000 per affected person.

The Times of London has reported that privately a number of aid NGOs have said that they will be struggling to efficiently allocate the large amounts of money that they have collected.

The Australian public's response to Asian tsunami disaster has been fantastic, but the time has come for all the foreign aid NGOs to close the tsunami fundraising appeals and get down to the business of assisting the tsunami victims get their lives back on track and leave as soon as possible.

If they do not, they do run the risk of their fundraising efforts been seen as less about the needy and more about the greedy.

Who are Charity Donations Really Helping?

At a recent lunch held by Anglicare, Treasurer Peter Costello delivered a sobering message to churches and charities.  That they had to lift their game if they were to retain the public's trust.

The Treasurer's remarks about the churches centered on their shameful handling of sexual abuse issues.  Costello's comments on charities were a reference to the controversy surrounding the venerable Red Cross and the millions it raised for the victims of the terrorist bombing in Bali.

The reasons for this are understandable.  When the story broke in the media, some $6.6 million or 46% of the funds raised were either being spent on projects not related to the victims or held back with the potential to be spent on other projects.  At that time only 54% or $7.7 million had gone directly to the victims of the Bali bombing.

In Red Cross' defence it has to be said that most of the money diverted to "other" projects was spent on worthy projects -- such as research for "spray on skin" for burn victims.  The funds were definitely not squandered on junkets, political activism, talk-fests, or excessive fundraising which is so prevalent in the foreign aid industry.

Nevertheless, the reaction of donors, the media, the public and politicians was savage.  There was a widespread belief that more should have gone directly to the victims.  This was predictable.  The tragedy struck home personally to many Australians.  The Red Cross' Bali Appeal offered a means of combating the sense of powerlessness that many Australians felt after the appeal.

The Red Cross's woes were increased tenfold by way it handled the scrutiny;  namely a lack of candour and openness.

What went wrong?  In short, the lack of transparency that masks the entire charity sector finally caught-up with the Red Cross.

When foreign aid NGOs, like the Red Cross, see a crisis or humanitarian disaster overseas and use the imagery as packaging for a fundraising appeal.

The Bali Appeal differed crucially from appeals in Afghanistan, Iraq, Ethiopia and countless others mounted by aid NGOs.  This time, the victims and beneficiaries were not people in a far off developing world nation;  they were Australians who were aware of how much had been raised and how much they were getting and most importantly, had access to the media.

The point has to be made that if the Red Cross has problems, which is by all measures, one of the most open and best governed charities in this country, the situation elsewhere in the industry is surely grim.

What was the most striking part of the controversy was the absence of groups like Caritas, Care, Plan, Save the Children, World Vision and Oxfam Community Aid Abroad from the debate.  None of these organisations, or the prominent public figures associated with them neither defended nor criticised the Red Cross' handling of the matter.

Disclosure standards in the non-profit sector are poor particularly relative to those applied to business and government.  If for example, business raise funds from the public, they must provide a prospectus detailing purpose, performance targets and proposed allocation of funds.  Failure to comply with this prospectus will usually mean prosecution by regulators.

They also must report to investors on regular basis against the prospectus.  Non-profits almost never do so;  indeed the Red Cross has provided more detail on their Bali Appeal, albeit belatedly, than any recent fundraising drive.  And the salient information only started appearing on the web site after the media started asking questions.  Most charities provide detail in advance and no follow-up detail on their fundraising activities.  In fact, most charities only provide promotional material about themselves none of which is objective or detailed.

Many charities do not even provide the basic data for the public to make informed decisions about charitable giving.  For example, it was recently reported a survey of 112 Victorian charities found that 57 per cent did not disclose the cost of fund-raising including administration and marketing costs.

The controversy over the Bali Appeal has for once asked people to question where the money goes when they give to good causes?  It is a question that people should be asking more often.

Boys Set Up to Fail in New System

IS there a crisis in boys' education?  Judged by the recently released parliamentary report, Boys:  Getting it right, the answer is yes.

To quote from the report:

NATIONALLY, girls' results in Year 3 and Year 5 Literacy Benchmark tests are up to five percentage points higher than boys.

THE Year 12 retention rate for girls is between 11 and 12 percentage points higher than it is for boys.

GIRLS' average levels of achievement in a majority of subjects assessed at senior secondary level are higher and the gap in the total has been widening.

MORE than 56 per cent of students in higher education are women.

Why are boys disadvantaged?  The first thing to note, as highlighted in the report, is that the way literacy is taught guarantees failure for many boys.

Until the advent of "whole language" (where children are taught to "look and guess"), literacy was taught in a more structured way associated with a phonics approach.

Whole language is based on the mistaken belief that learning to read and write is as natural as learning to speak and all teachers need to do is to "immerse" children in a rich language environment.  Forgotten is that writing is unnatural and boys, in particular, need to be taught in a methodical way.  A second reason why boys are disadvantaged is the "feminisation" of the curriculum.  During the '80s and '90s, the status quo in schools was attacked by feminists, left-wing academics and teacher unions as "ethnocentric, patriarchal and bourgeois".

Even the way teachers taught changed to favour girls and to disadvantage boys.  Teachers no longer stood at the front of the class and taught, preferring instead to have students work in groups on open-ended tasks.  Competitive assessment disappeared.  Learning relied more and more on strong verbal skills and self-directed learning.

As noted in the report, while there may have been some justification for the above changes, an unintended consequence is that boys come out second best.

This is primarily because boys tend to respond better to structured activity, clearly defined objectives and instructions, short-term challenging tasks and visual, logical and analytical approaches to learning.  They tend not to respond as well as girls to verbal, linguistic approaches.

While not directly related to schools, a third reason why boys are at risk educationally is because of their low self-esteem and often negative self-image.

Greens' Policy Lacking Proper Scrutiny

Of course, the concerns people have about environmental degradation are both understandable and justified.  Many of our most difficult problems emanate from our misuse of the natural environment and, as we become wealthier, we value the environment and its attributes highly.  The problem lies not with concerns about the environment, but with the downright silly policies that groups like the Greens put forward to deal with it.

For example, according to their website (www.green.org.au), the leading economic policy of the Greens in the last election was "the abandonment of economic growth (as conventionally measured)".

Of course, most people who voted for the Greens did not read the policy documents.

Moreover, they voted Green with the knowledge that the Greens would not win government.  They probably assumed, too, that a successful Greens party would, as leader Bob Brown recently admitted, be more "realistic" than promised.

The confidence in the impotence of the Greens is, however, misplaced.

The Greens mean what they say.  Their policies are being implemented, if not by them, then by erstwhile more sensible governments seeking the green vote.  And the damage they are doing is large and highly visible.

Young people are fleeing Tasmania -- the home base of the Greens -- for a reason.

After 15 years of Green NIMBYism, the competitive base of the state is in tatters.  Not satisfied, the Greens are now working to stop Basslink -- the $200 million investment that will connect Tasmania to the national electricity grid.

They are also campaigning to shut down Gunns -- the timber and plantation firm -- which is the State's largest private employer.

The forest fires which recently encircled Sydney are also, in part, the handywork of the Greens.  The Greens have induced successive governments to limit controlled burning, curtail logging and prevent the management of private forests.

This has turned woodlands into woodpiles ready to be ignited by arsonists, lightning strikes and other unavoidable causes.  The kangaroo plague that is currently destroying vast tracts of farmland is also the product of our green crusaders.  Thanks to the Greens, the States make ownership claims to kangaroo populations, but exercise little responsibility over them.

This has led to unchecked growth, mass starvation and the destruction of the environment and the livelihood of farmers.

It is within the informal political processes of civil society that the problem is most severe.  People seem too ready to accept the simplest pronouncements of activists claiming to represent consumers, the poor or the environment.  They do not question their bona fides, values or actions.  They seem willing to allow these self-appointed guardians of virtue a greater role in collective action than they merit.  Faced with competition and pressure from unelected activists, our elected political agents and their public servants are increasingly embracing them and their approach.

Witness the recent proposal to appoint Louise Sylvan of the Australia Consumers Association to the ACCC.

The solution lies with holding political activism in so-called civil society to the same standards of transparency, scrutiny and robust debate that takes place within our formal institutions.

Give Telstra Back to Us

also published in Courier Mail and The Advertiser on 6 August 1998

How do we free Telstra from being a politicians' plaything whilst retaining control?

Simple!  Follow the lead of the AMP and give it back directly to its owners -- us.

This would be the fair and democratic thing to do.  It would also allow Telstra to get on with the essential business of helping build the information super-highway.

The fact is that the original rationale for government stewardship of Telstra -- the need to counter monopoly power -- has evaporated.  The telecommunication industry is now a competitive, international business with literally hundreds of players.  Although Telstra still dominates locally, its monopoly position is gone for good.

More importantly, governments make lousy owners.  They just don't respond well to the need to keep costs down or to create wealth.  Nor do they face, a strong incentive to seek out new consumers and services, to take risks and innovate.  Moreover, being political beasts, they inevitably succumb to the lure of the marginal voter and the pork barrel.

If government ownership days are past, why then the persistent chorus to keep Telstra under government ownership?

For many its the desire to "keep with tradition" and for others it's an ideological thing.

Still for others it is an concern about more unemployment -- though, given the rapid growth in jobs in the telecommunications industry, this fear is misplaced.

More validly, people are concerned about loss of ownership and the threat of being left behind.  Telstra is a big deal -- indeed it now easily the single largest business in Australia.  People quite rightly do not want to lose their legitimate stake in the biggest show in town.

The best way to allay concerns about ownership and control is not with continued government stewardship but rather by returning the asset back to us -- by issuing every citizen on the electoral roll with an equal share of Telstra.

Once it is returned to the people, they can decide to keep, sell or buy according to our own preferences.  If an individual wants to retain ownership she can.  If a person would rather take the money, he can.  If a person wants to keep Telstra Australian-owned, she can by retaining ownership and vote accordingly at shareholders meeting.

Understandably many pollies and interest groups will not like the idea.  Once Telstra is given back to it owners, they will not be able to use Telstra for their own pet projects and interest groups.  But is it not more democratic to allow the people as individuals to make these decisions for themselves?

Access to the best telecommunication facilities is also a big deal.  The future will largely be played out along the information superhighway.

The question is how is the issue of access best addressed?  By government ownership?  If this were the case, people in the bush would not now be complaining about poor service and high prices.

The fact is the only way to overcome the tyranny of distance in the end is by having a competitive and innovative industry -- something which is hindered rather than helped by government ownership.

There is a role for governments to help people with access to the communications services.  However, governments have many options other than ownership.  They can regulate -- as they now do with local calls -- requiring firms to provide certain services at certain prices.  They can pay firms to proved service at subsidised prices -- as is now does with most assistance to industry.

If more funding is required, then the government can sell a bit of Telstra.  For example, the 16% of Telstra the Howard Government now plans to sell is expected to raise around $12 billion, which enough to fund a six-fold increase in current level of telecommunications assistance to the bush for forever and a day.

Although de-nationalising Telstra would not please all, it is like to please most where it counts most.  For example if 50% of Telstra were divided evenly amongst all Australian families, the average household kitty would receive a growing asset worth at current market prices about $6,500.