Voucher system would be a real education revolution

There has been so much talk about an education revolution from the federal government, one could be forgiven for thinking that we are back to the heady days of a crumbling Berlin Wall.

The big education talk started before the 2007 federal election.

The opposition, led by Kevin Rudd, said in a discussion paper:  "Australia needs nothing less than a revolution in education".  This required "a substantial and sustained increase in the quantity of our investment, and the quality of our education".

There is no doubt that since its election in November 2007 the Rudd government has thrown more taxpayer resources into school education.  Some of the big-ticket items have included student laptops, school trade-training centres, teacher quality and a national curriculum.  Last year the government costed these measures at more than $6.5 billion.

Far from being a revolution, however, these measures basically amount to a continuation of policies pursued by previous federal and state governments.  This year a $14.7bn Building the Education Revolution scheme was tacked on to the government's main education plans.

Under the program, any of Australia's 9540 schools are eligible for funds to build infrastructure on campus.  Building plaqued school monuments such as new halls, gyms and libraries may make for good politics.  The government is undoubtedly hoping for a big tick from school sector representative organisations, principals, teachers and parents for the many construction sites laid open with federally borrowed money.

Instead, what we are seeing is a litany of problems caused by the government's eagerness to shower money on government and non-government schools.  As has been reported during the past month, there are instances of duplicated infrastructure under a "use it or lose it" funding approach.

Some of this infrastructure is being developed for schools earmarked for closure or for remote schools already struggling to fill capacity.

Unsurprisingly, building costs are being inflated by a combination of state government project management protocols, a lack of competition for alternative building contractors and a price premium on account of urgently needed works.

With reports of governments paying double the industry rate for school halls, the school stimulus fiasco seems to confirm American economist Gordon Tullock's hypothesis that the private sector on average pays half the cost of providing comparable government services.

The underlying problem is that the Rudd education revolution rests on continuing the already heavy degree of centralised government control over education.

While the additional spending may give the appearance that the government is doing something on education, it comes at the greater risk of waste, inefficiency and perverse incentives often associated with micromanaged government funding.

There is a need to break down the walls of central controls if school education is to be systemically improved.  Parents need to be empowered in their choice of schools, and schools and teachers need greater incentives to become more responsive to the educational needs of students.

For a real education revolution, governments can look no further than voucher funding that seamlessly follows the student to a government or non-government school of choice.

With students receiving sufficient funds to cover their education costs, a voucher removes in one fell swoop the grab-bag of archaic and often discriminatory existing school funding programs.

One of the other aspects of vouchers that are increasingly hard to ignore is that it can be a most powerful tool to overcome educational disadvantage.

If a voucher system is weighted with more funds for students from low-income families, indigenous students or students with disabilities, then parents of children from these groups can take their children out of failing schools and place them in high-achievement schools.

Far from being in the realm of theoretical fantasy, vouchers are mainstream policy in more than 30 countries.  There is also sufficient evidence from these countries that voucher schemes work.

Vouchers, together with supply-side reforms, have greatly expanded choices for students in a wide variety of places such as Sweden and the American cities of Cleveland, Milwaukee and Washington, DC.

Developing countries such as Bangladesh, Cote d'Ivoire, Colombia and Guatemala are also using vouchers in an effort to improve educational outcomes for the disadvantaged.

They also have been shown to improve the academic performance of students.  Students receiving a voucher have recorded improvements in literacy, numeracy and science test scores in the US.

Importantly, students who remain in their original schools also have registered test score gains.  This is because all schools have a greater incentive to improve their educational packages to maintain their enrolments.  In the words of American education researcher Caroline Minter Hoxby, vouchers are like a beneficial tide lifting all boats.

Studies have shown that vouchers effectively have serviced disproportionate numbers of disadvantaged students in the US.  These have included children from African-American and Latin-American backgrounds, and from low-income and single-parent families.

With students observed to register academic improvements in a voucherised environment, this funding reform promises to redress educational disadvantage in ways that previous efforts have failed to do.

There is also little doubt that vouchers come with a big tick of approval from parents, as evidenced by surveys in several countries.

Accepting that vouchers can make a difference, the next question to ask is how much would it cost?  I estimate that a national school voucher could initially cost at least $700 million a year, depending on voucher design.

For example, an effective approach that groups targeted vouchers for indigenous students and students with disabilities together could cost governments an initial $2bn.

This funding commitment is based on present enrolments and the removal of the funding discrimination between government and non-government schools.

However, vouchers have the prospect of delivering cost savings in the long run as schools discover new ways to deliver education more efficiently.

So, for less than the Rudd government's education revolution, a voucher could be introduced to spur excellence in schooling.

To improve our education system even further, governments need to think outside the existing funding paradigms.  For Australia to introduce a school voucher would represent nothing short of a revolution in how we fund students.

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Let's bin the overcooked moralising

When MasterChef announces its winner tonight, it will have done more than inspire a few home chefs to cook half a pig's head, as third-place winner Chris famously did.

MasterChef takes an overwhelmingly positive perspective on modern food and home cooking.  This is actually pretty rare.  A lot of the discussion about modern food is highly political and deeply pessimistic.  Even popular shows that try to celebrate food can't quite welcome the base pleasure of good cooking.  Gordon Ramsay won't stop mumbling about "local produce" and the evils of imported ingredients, and Jamie Oliver seems just as desperate that we grow our own vegies for the good of the planet as he is that we make our own pasta sauce from scratch.

Cultural critics have spent the past decade trying to convert our dinner into an ideological statement.  We're told we face a future torn between a diet of instantaneously prepared frankenfood made primarily of transfats, or a diet that is richer in politics than flavour -- with a functional, expensive and bland mixture of local, organic, slow, GM-free and fair-trade food.

So it's refreshing to watch a food show that doesn't even pay lip service to all the over-cooked moralising about the "ethics" of food.  You get the impression that even if a MasterChef contestant used ingredients that were artificially grown in a chemical factory by robot arms, the only thing the judges would be interested in would be taste, texture and presentation.  You know, the reasons why we enjoy eating.

And MasterChef recipes almost always involve some nutritionally mischievous ingredients -- sugar, butter and the ubiquitous salt.  This, too, has upset some people.  One nutritionist, Catherine Saxelby, was particularly concerned that the show has "no regard for health or nutrition", arguing that MasterChef makes "the basic chop, potato and two veg look boring when there's actually nothing wrong with it from a nutrition point of view".

That makes sense:  a dish consisting of a chop, a potato and two vegies is extremely boring.  If nothing else, MasterChef will have encouraged a few more people to think carefully about food preparation and variety.  After all, it is often out of boredom with home-cooking that we go for takeaway alternatives or just defrost frozen food.

The variety of food cooked by the MasterChef contestants -- and the high standards they are able to achieve with easily sourced ingredients -- also reflects the powerful consumer revolution in food that is changing what and how we eat.  It's no secret that the food we eat is different from the food our parents and grandparents ate.  Sushi and home-cooked burritos would have been completely alien to most Australians just a few decades ago.  The way foods have migrated because of globalisation is a story of long-term developments in food culture.  But it's not hard to find examples of how our tastes are rapidly expanding right now.

In my local Brunswick supermarket in the past month, the chorizo sausage has gone from being a niche delicacy, offered only as single, vacuum-packed sausages tucked away near the freezers, to being offered in large, fresh multipacks proudly displayed with the other meat.  They're now just opposite the mince.  And you can't get more mainstream than mince.

Incidentally, this new location also puts the chorizo within a sausage-throw of the okra -- a weird, slimy fruit used primarily for gumbo, a Cajun and Creole stew.  Many Australian-born generations before us would have had no idea of what okra was, let alone what to do with it.  Yet it sits comfortably in suburban supermarkets, where space is at a premium.

Seemingly inconsequential technological developments are providing us with fresher produce at the humble supermarket.  Lettuce and baby spinach is now most commonly available in pre-packaged, sealed plastic bags, rather than exposed for consumers to grab at.  This began in Europe in the 1980s but has only recently had a big impact here.  A seemingly minor change, sure, but it's the little things that count.  According to Packaging magazine Australia (it's "Australia's premier packaging news"!), most of the innovation in packaging is developed for the food industry -- like "oxygen scavengers", those weird little sachets that come with pre-made tortillas.

These changes in technology and taste have made it possible to narrow the distance between elite restaurants and home cooking, changes without which MasterChef would not be as engaging and relevant to the nearly 2.5 million Australians who watched the show's final week.  We are served a lot of ideological pessimism about contemporary home cooking.  But MasterChef shows that the proof is in the eating.

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Innovation the loser from book "expropriation"

The Productivity Commission has recommended terminating restrictions on the parallel imports of books.  Such restrictions require the permission of the author's agent, usually the publisher, for the import of the author's books.  This allows different prices to be charged in different markets, bringing authors increased remuneration.  Higher returns for authors mean more incentive to innovate (the reason for granting patents and copyrights in the first instance).

Copyright is a form of property right and, like all such forms, allows its owner to obtain benefits from its exclusive use.

An owner's entitlement to sell or otherwise dispose of a product as he/she sees fit is fundamental to economic efficiency.  This entails charging what the market will bear and, to the extent that it is possible, selling into different markets at different prices.

In an Orwellian interpretation of "liberalisation", trashing copyright to bring about lower prices has already been used to justify withdrawing parallel import restraints for compact discs.

The Productivity Commission recommends a similar approach to authors' property rights.  While this is closer to expropriation than liberalisation, it is plagued with practical considerations.

Arranging and sustaining price differentiation is seldom straightforward.  Even though buyers place different values on a product, price uniformity is likely where markets are linked.

Enforcement practicalities often undermine discriminatory price attempts.  Price differentiation is easier to arrange with goods that cross political frontiers, since the additional layer of government enables contract enforcement, a basic government function.

However, many governments are reluctant to co-operate when it means higher domestic prices.

Moreover, of particular importance to book importing, the blurring of geographic boundaries, particularly with the growing use of Amazon and eBay, is making it harder to enforce contracts that entail price discrimination.

A reconsideration of the marketing approach for, books is perhaps inevitable as it becomes increasingly difficult to prevent arbitrage across borders.

This hardly means the removal of parallel importing restrictions on books should be cause for celebration.  In reducing writers' ability to price-discriminate, it may lower prices.  But reduced returns to authors will discourage, provision of new material.

An unwillingness or inability of governments to assist enforcement of contracts that allow price discrimination between markets has considerable implications for the pharmaceutical industry.

International price differentials are vital to the present arrangements in profitably developing new drugs.

Pharmaceutical firms have historically earned high prices in the unregulated US market but are often forced to accept lower prices where buyer monopolies are in place, as in Australia arid Canada.  And the firms themselves, for humanitarian reasons or simply to maximise profits, will often sell patented products at cheaper prices to Third World countries.

Increasingly, price, convergence undermines this.  Once the products can be imported (or, as is often the case, re-imported) into the US, multiple prices are replaced by a single-price structure.  Where this results in the US price becoming the sole price, customers outside the US will pay more and the supplier will see reduced sales.  If prices shift towards those in the lower-priced markets, volumes will rise, though at the expense of profits.

Copyright owners of books and CDs may well have to acquiesce in the erosion of parallel importing protections and the reduced innovation incentive this entails.

For pharmaceutical firms, market segmentation and price discrimination is even more important.  The end of price discrimination would require revolutionary changes in their approach to research and development.

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Death of author unlikely

The biggest barrier to the Australian book industry's success won't be the demise of parallel import restrictions;  it'll be the cultural cringe spruiked by authors and the publishing industry that stops it being globally competitive.

Yesterday the Productivity Commission released its final report recommending the scrapping of import restrictions for books.  The final report's recommendations went well beyond the draft report's recommendations and proposed the abolition of import restrictions after three years.

In response to the inquiry, book publishers and printers whipped authors into a tizz.  And authors have been used to oppose liberalisation by pulling at the heartstrings of consumers and their sympathy for Australiana.

For example, after Tim Winton recently received his fourth Miles Franklin Award for his book Breath, he used the platform to claim that import restrictions helped foster local authors and end the cultural cringe that pervaded Australian books pre-1980.

But the claims are baseless.

In its review the Productivity Commission asked for evidence since the removal of parallel import restrictions on sound recordings in Australia and most copyrighted works, including books, in New Zealand.

Both occurred in 1998 and the evidence is overwhelming.

Data from the Australian Performing Rights Association shows that since the liberalisation of sound recordings the total royalties paid have more than doubled and the number of artists paid increased by more than 50,000.  Meanwhile the average price of CDs has collapsed by 32 per cent, while total sales have remained relatively stagnant.

Book prices may not collapse as much, but the data from the CDs shows that Australia's cultural industries can still thrive without protectionism.  Evidence from a NZ government-commissioned report found there was no appreciable decline in the publication of local works after the country scrapped import restrictions.  And in 2004 an industry spokesperson conceded that since liberalisation there was an increase in the number of NZ books published.

The case is so clear that Melbourne University Publishing chief executive Louise Adler walked out of a radio debate against Dymocks board member Bob Carr, who simply repeated these facts against the publishers' and authors' claims.

Opponents of decreased liberalisation also argue that without protection the printing industry won't have the economic certainty necessary to invest in the technology that will make the industry more competitive.  But post-liberalisation the NZ printing industry has continued with comparable investment as the manufacturing sector overall.

Arguments that printing industry jobs will be protected also have beenshown up.  An analysis of printing jobs in Australia and NZ shows both are in decline;  the only difference is that Australia's have declined faster, and we are the ones with import restrictions.

The other claim from industry interests and authors is that removing import restrictions will undermine territorial copyright.

But even if import restrictions are in the Copyright Act, they are not necessary to protect copyright.

In every book there are two property rights.  The first is the physical book:  the cover, pages, binding and ink.  The second is the copyright, which is the order of the text on the pages.  So long as a book is printed in a country that is a party to international copyright treaties, import restrictions don't do anything for copyright;  they only protect the publishing and printing industries and unnecessarily hike the price of books.

But the real problem for the industry is that by opposing book imports it is sticking its head in the sand.  We all know the direction of retail book sales isn't just through the local bookstore.  The real growth of sales is through the internet.  Pending foreign exchange fluctuations, books are regularly cheaper to buy on Amazon and import into Australia, even with postage costs.

The recommendations from the Productivity Commission review should have been a wake-up call to industry that government-sponsored protection in a global economy won't last forever.  Instead of trying to perpetuate protection, the industry should be using the remaining three years of protection to make structural adjustments and become globally competitive.  And the best way to do that is to find ways to reduce costs and pass on the benefits to consumers.

The book industry may fear the removal of import restrictions, but consumers won't want imported books if those produced in Australia are the same price or cheaper anyway.

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Fighting Climate Change with Patents

World leaders are talking a lot about climate change, not least in their flashy statement on controlling global temperatures at the recent Group of Eight summit in Italy.  One of the smarter ways they can put this determination into effect will be to protect the intellectual property of green innovators from a growing onslaught by developing-world politicians and mistaken activists.

Intellectual property rights are the underappreciated link in the environmentalist chain.  By rewarding inventors and entrepreneurs, well-enforced patents provide the right incentives for the innovation that will produce technologies necessary to manage climate change.  Yet this fact is getting lost.  Access to low carbon technologies has become a central issue in international climate change negotiations as rich countries put more pressure on the poor to cut their emissions.  Understandably the poor aren't prepared to do so unless they are given cheap access to technologies.  Patents are increasingly viewed as the main obstacle to cheap technology transfer.

So a representative of the Brazilian government, Haroldo Machado Filho, this week told a World Intellectual Property Organisation conference in Geneva that leaders should consider the possibility of allowing "compulsory licensing" for green technologies.  This would be a new loophole in international intellectual property rules that would allow developing-country governments to break patents "for the public good";  such a loophole already exists for pharmaceuticals.  In a similar vein, Indian Climate Change Minister Shri Ramesh asserted late last month that access to intellectual property for low-carbon technology is a "global public good".  This kind of thinking lays the intellectual groundwork for patent violations down the road.

Most worrying, opponents of patents have succeeded in having included in the current negotiating text for a post-Kyoto agreement paragraphs to undermine patents.  The final text won't be finalised until at least the December U.N. Copenhagen meeting, but current proposals range from "compulsory licensing" to the "creation of a global technology pool for climate change" that would socialise intellectual property.

These proposals fundamentally misunderstand why low-carbon technology is expensive.  A January report by Copenhagen Economics, a consulting firm, found that the high prices are most likely a result of the immaturity of technologies, not patents.  New technologies are generally more expensive when there are fewer products competing in the market.  As more technologies are innovated the price is likely to drop.  Most promising green technologies are so new they simply haven't had time to decline in price yet.

The Copenhagen Economics report also notes that weakening intellectual property for green technologies would be bad for the developing world countries whose governments advocate such measures.  A growing number of patents on these technologies are held by developing-country innovators.  China is one of the largest owners of solar and fuel-cell technology patents.  The balance is still in favour of developed-world innovators, but the gap is narrowing fast.  Allowing entrepreneurs in poorer countries to profit from their discoveries will be good both for the environment and for developing-country economies.

Undermining patents won't help access to technologies, but it will stop the next generation of technologies being invented, and with it a long-term solution to achieving the twin goals of developing countries to reduce emissions and alleviate poverty.  Rather than breaking patents, policy makers could re-evaluate tariff regimes and other barriers that can add up to 165% to the cost of some imported green technologies, according to a 2007 World Bank study.  The best path to a green future is not to break free-market principles, but to return to them.

Time to cut cost of running government

Tasmania's demographic time bomb is ticking.  The Tasmanian Chamber of Commerce and Industry's analysis of Tasmania's demographic time bomb clearly illustrates that the State Government will need to tighten its belt.

The time bomb will hit the Government on two broad fronts.

First, the population of the island state is projected to age significantly over the next four decades.  This is expected to lead to increasing demand for age-related services such as health care.

The second component of the time bomb is the impact of declining labour market participation on government revenues.  To put it simply, if there are fewer people of working age, then per-head fiscal burdens will skyrocket.

According to the TCCI analysis, if current policies are left unchanged then the cost of running the government would exceed the size of the entire Tasmanian economy by about 2050.

To avoid this time bomb, the productive capacity of the economy will need to expand significantly over time.  This requires nothing less than a state government dedicated to cutting red tape and easing business costs whenever and wherever possible.

This productivity enhancement agenda would need to be complemented by reforms that cut government costs.

I stated in a report prepared for the TCCI last year that more efficient government services can deliver long-term cost reductions.  But to increase efficiency, the government has to allow private sector providers to compete for the delivery of services.  One way to do this is to allocate government funds, say in education and health, on the basis of a level playing field.  When funding follows the student, or the patient, then the efficient private sector can deliver more services.  This would deliver consequent savings to Tasmanian taxpayers.

The greater competition in government services will also pressure public providers to become more responsive to the needs of people throughout the state.

The need to cut costs through greater efficiency extends right through to government business enterprises and state-owned corporations.  The TCCI study found that only four of 16 entities achieved returns exceeding the cost of capital.

Appointing administrators who can recommend ways for government business enterprises and state-owned companies to deliver better value for taxpayers could be the first step to achieve systemic cost reductions.

Ensuring that government finances remain in a sustainable position into the future will play a key role in avoiding the demographic time bomb.  An annual balanced budget rule, combined with a requirement that government revenues not exceed state economic growth, will be vital in keeping the government on a fiscal leash.

The time bomb is starting to tick and there are many questions that need to be answered if the state is to avoid the economic double-whammy of population ageing and falling workforce participation.

Do people want a strong, growing economy with a diverse private sector that invests and creates attractive jobs?  Should the government leverage the expertise and efficiency of business in delivering the services that Tasmanians want?  Is it worthwhile to keep government budgets honest in the difficult circumstances ahead?  How Tasmanians respond will determine whether or not the state can defuse the time bomb.

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Is Palin manoeuvring to make a run for the White House?

The "Hockey Mom" Governor of Alaska's decision to quit office has raised more questions than it answers.

Sarah Palin's decision earlier this month to resign as Governor of the US state of Alaska remains a mystery.

Is the Republican vice-presidential candidate in 2008 setting the scene for a tilt at the White House in 2012?

Or is the 45-year-old mother of five bowing out of politics altogether, devoting her life to family, some book writing and even hosting her own reality television show?

Who knows?  But two things seem clear:  Palin's premature resignation shows she is not ready for the more demanding rigours and scrutiny as president.  Nor does her decision to quit politics reflect the conventional path to the White House.

First, some history.  Since at least World War II, all but three presidents have hailed directly from elected office, and those who did not had far more impressive CVs than the two-and-a-half year Alaska governor.

Ronald Reagan was a successful two-term governor of California (1966-74) who spent the next six years as the patron saint of conservatives before his 1980 landslide election.  Richard Nixon was a congressman, senator, two-term vice-president who became a Republican Party elder statesman for eight years in the political wilderness before his 1968 triumph.  And Dwight Eisenhower was a 5-star US general who rescued Western Europe from Nazism before winning the White House in 1952.

Palin's record -- small-town mayor, governor of a remote and lowly populated state, failed campaign for vice-president, quit job with nearly 18 months remaining in her first term as governor -- is hardly in the same league as all of the above.

But if she runs for the White House in 2012, her decision to quit politics will merely reinforce doubts about her ability to handle what the Americans call prime time.

In last year's election campaign, the firebrand failed numerous economic and foreign policy tests, and her responses to several all-important issues sounded more like mealy-mouthed spin than sound judgment.

Charismatic and impressive though she was at first glance, as the campaign gathered steam more and more voters became uneasy about the prospect of Palin being a heartbeat away from the presidency -- a concern that took on extra meaning when John McCain would have been the oldest man ever elected to the White House.  True, her anti-abortion, pro-gun and anti-tax views, together with her folksy, gut-level appeal to lower middle-class Americans ("Reagan Democrats", or in Australian parlance "Howard Battlers"), provided ideological red meat for the Republican Party's social conservative base that had grave misgivings about her running mate.

It is also true none of her weaknesses as a candidate has justified the Left's irrational hatred of the glamorous governor.

It is bizarre, indeed disturbing, how Palin -- a working mum who was only the second female vice-presidential candidate in US history -- has driven feminists and so-called progressives into fits of condescension and contempt.  Still, Palin's decision to resign has reiterated widespread concerns about her policy depth and personal judgment.

The consensus among even Republicans now is that she is unfit for office.  So much so that the leading conservative columnist David Brooks has argued the anti-intellectual populist is "a fatal cancer to the Republican party" because her inclination "is not only to scorn (left) liberal ideas but to scorn ideas entirely".

With Sarah Palin not up to the task and seemingly out of contention for the Republican presidential nomination, the onus is now on other conservative politicians to do the hard policy work and sound philosophical thinking to present a credible alternative to Barack Obama in 2012.  The signs are not looking good.

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Public sector spending binge costs us dearly

It is the private sector that brings economic growth and high living standards.  Government is required to keep the peace and ensure the law is upheld.

Other valued government functions involve spending on common facilities such as roads and on basic health and education.

But for the most part, government spending and its close relative, business regulation, detract from economic growth and wealth.

Quantifying the adverse effects of business regulation is notoriously difficult.

But governments have set up deregulation units to help reduce costs and the enterprise-smothering effects that their regulations cause.

In claiming successes in federal deregulation, minister Lindsay Tanner could identify only 30 redundant regulations that he had managed to put to the sword.  Unwittingly he illustrated that there was little substance in the supposed achievements.

Eradicating redundant regulations is almost pointless since the regulations themselves are rarely enforced.

Genuine deregulation requires the elimination of government measures that distort business decisions.

The confusion that Mr Tanner and his colleagues share regarding the need for less regulation is demonstrated in wages policy.

Last week, the Fair Pay Commission ruled against a mandatory wage increase.  That decision recognised the fragility of the economy and the risks to jobs from a mandatory wage increase.

Julia Gillard's "Fair Work" Bill already requires employers to increase wages in vulnerable areas such as retailing.

Unsurprisingly, she regretted the Fair Pay Commission's decision against an automatic pay rise, demonstrating a distressing preference for higher wages rather than keeping people in jobs.

Excessive spending is the other government activity likely to impair incomes.

Recognising this, over the past 20 years governments of many big-spending countries, such as Canada and Sweden, have considerably pruned their budgets.

Unfortunately that has not happened in Australia.

Government spending across all jurisdictions has rocketed and little of the increase has been on productivity enhancing infrastructure.

Recently, Australian government spending has been boosted, especially as a result of Kevin Rudd's spendthrift policies.  State governments have also been no slouches in profligate spending.

The Brumby Government's expenditure this year will be 15 per cent of state product, up from the 12 per cent level it inherited from the Kennett days.

In relative terms that's a massive 20 per cent increase in the size of government and takes the state once more down the path that made us a laughing stock of bad government under Joan Kirner.

Australia and Victoria can and should get by with far less government spending.

Greater spending discipline is needed in Australia if the economy is to remain resilient.

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Farewell To A Conservative Warrior

A giant of journalism has left us, and the nation is a poorer place.

Paul Keating called him "an old fart", but John Howard considered him a "friend" who was a "superb writer" and "elegant and whimsical wordsmith".  He was "one of my mistakes," said Rupert Murdoch, "but I love him."  "He was a fine writer, widely read and a major editor," Archbishop Cardinal George Pell told me this week from Rome.  "He was a man who helped keep Australian society decent and make it prosper."

As these observations demonstrate, Frank Devine, who died last Friday, was one of Australia's leading newspaper journalists and all-round decent guys.  His many attributes have been acknowledged by others:  his editorship of The Australian, Reader's Digest, the Chicago Sun-Times and the New York Post;  his various roles as foreign correspondent;  his appetite for long lunches and thirst for beer;  his passion for cricket;  his devout Catholic faith;  his deep love for his family;  his appreciation for stories that made him throw back his head and laugh in a riproaring and infectious manner;  and his 67 excellent and timeless Quadrant essays, half of which are about to appear in Keith Windschuttle's Quadrant Books compilation under the title Older and Wiser:  Essays 2002-2009.

But what I recall most is the courage Devine showed in pursuing his conservative convictions.  Above all, he had the nerve to resist intellectual fads.  Indeed, what leading English liberal writer William Shawcross once described as a "cheerful right-winger" was a rare breed in Australian public life.

Until the Howard years, a conservative journalist was an oxymoron.  In the newsrooms and editorial offices across the nation, someone slightly right on the ideological spectrum would virtually be isolated, condemned for not conforming to the smelly orthodoxies of political correctness and regarded as something of an oddity.

To be a conservative in journalism was a bit like poor old Godwin Grech at the Treasury happy hour drinks after his infamous Senate committee testimony.  Or, as Presidential hopeful Mitt Romney said of being a conservative Republican in the liberal Democratic state of Massachusetts:  like a cattle-rancher at a vegetarian convention.

Your conservative political insights would be treated not merely as a provocative contribution to the editorial conference, but as a flat-earther's fit of extremism.  Notwithstanding The Australian's editor-in-chief Chris Mitchell and like minds, that condescending mindset prevails in the newsrooms across the nation.

Thus, on border protection, if you think a tough posture towards illegal immigrants helps boost public confidence in a large-scale, non-discriminatory immigration policy, you're a "racist".  On climate change, if you point out the earth's surface temperature has virtually flatlined over the past decade, you're a "denier".  On the economic stimulus, if you believe marginal rate tax cuts on income and investment are the sort of fiscal policy that actually changes incentives to work and invest, you're a "neo-liberal ideologue".  And on it goes.

On these and other hot button issues, Devine bucked the conventional wisdom and argued his case coherently, compellingly and in a quintessentially witty manner.  He was also a big believer in the liberal anti-communist Sidney Hook's wise rule for polemicists:  before you impugn someone's motives, first answer his arguments.

Daniel Patrick Moynihan once noted that, some time in the second half of the 20th century, conservatives became the dominant intellectual force in American public life.  From the birth of William F. Buckley's National Review in the mid-1950s to the ascent of Reaganism in the late 1970s and through to the past decade, that assessment is undeniably true.  The movement was propelled by intellectuals such as Russell Kirk and Irving Kristol, journalists such as George Will and Robert Bartley and publications such as The Public Interest and the Wall Street Journal editorial page.

In Australia until relatively recently, however, none of the serious publications, with the exception of Quadrant, had the conservative philosophical heft of the American or British kind.  Most of the newspapers reflected a leftist, we're-ashamed-to-be-Australian orthodoxy.

During the Keating years, this groupthink reached its apogee.  On all the big political issues -- land rights, reconciliation, the republic, multiculturalism -- the big three "quality" newspapers (The Age, The Sydney Morning Herald and The Australian), not to mention the arts, public broadcaster, and universities, had virtually marched in lockstep in favour of progressive causes.

On the day after the May 2000 march for Aboriginal reconciliation across the Sydney Harbour Bridge, only one columnist dissented (Frank Devine).  Never mind that a majority of Australians, including the then prime minister, opposed an apology, arguing it was likely to encourage a sense of victimhood among indigenous Australians and unlikely to reverse shockingly high levels of deprivation and alienation in remote communities.

When Howard lost the Liberal party leadership 20 years ago, and with his political career seemingly over, Devine, as editor of The Australian, offered him a weekly column.  The future PM found the experience "fruitful and stimulating" because it gave him clear air to "crystallise his philosophical ideas", which remain at the heart of the political struggle.  But as Janet Albrechtsen revealed this week, Howard had a deal with Devine:  if he'd return to the front bench, he'd have to stop writing his column.  When that eventually came to pass, Devine called the new shadow minister to say:  "Congratulations!  You're fired!"

It is no coincidence that conservatives play a more prominent role in public debate than they did two decades ago.  Much to the ire of the metropolitan sophisticates, Andrew Bolt, Tim Blair, Frank's daughter Miranda Devine, and Albrechtsen herself (whom was hired to write a replacement for Devine's weekly opinion page column in the summer of 2001-2002) are some of the most widely read and influential columnists in the nation.  True, The Age has not published a weekly conservative columnist since they unwisely sacked Gerard Henderson (who retains prime real estate at the Herald and The West Australian).  But the joke is on what is widely regarded as "The Guardian of the Yarra":  The Age's opinion pages are so dripping wet one can't even turn them.

Still, opinion debates in Australia are more pluralistic and lively today -- and that is due in no small part to the work of the man Peter Coleman calls "the laughing cavalier of Australian journalism".  Indeed, what was once said of his late friend, fellow columnist and long-time drinking comrade Paddy McGuinness could easily be said of Frank Devine:  his greatest achievement is that, through the power of his writing and intelligence, he helped change the culture of Australian journalism -- for the better.

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Beware sorry fate of fads

Beware of fads.  Two of the biggest fads going around at the moment are "green jobs" and the national broadband network.

We're warne­­d that unless we embrace clean technology and fund it with taxpayer subsidies all our environmentally friendly jobs will go offshore and we'll miss "the wave of the future".  Likewise with the national broadband network.  We're assured that if the government spends $43 billion we'll be able to download new-release movies faster and our international competitiveness will be assured.

Before we start believing this sort of stuff we should remember we've heard it all before.  Today it's green jobs and the internet.  A few years ago it was Knowledge Nation and Australia as the centre of a regional computer industry.  In a few years it will be something else again.  All these things have one thing in common -- the requirement that government give industry billions of dollars in subsidies and tax breaks.

A decade ago we were told we should be more like the "Celtic Tiger" -- Ireland.  In the heady days of the late 1990s the Irish economy was growing at 10 per cent a year.  Kim Beazley's Knowledge Nation recommended Australia follow Ireland and subsidise a domestic computer manufacturing industry.  Fortunately, this didn't happen.  As recently as 2005 Austrade was sending trade missions to Ireland in the hope of learning how government could foster a technology industry.  The following year Austrade was telling us that "after many years of suffering, including being the butt of 'Irish jokes', the Irish with their strong and consistent economic performance are having the last laugh".

Well, it seems that the Irish might have started laughing a little early.  The Celtic Tiger is now pretty much extinct Ireland's economy is predicted to shrink this year by at least 9 per cent.  Unemployment is estimated to reach 15 per cent.  Meanwhile Ireland's budget deficit is double the average size of those of developed countries.

It's so bad in Ireland that even the politicians have taken a pay cut.  All ministers and public service department heads have had their salaries reduced by 10 per cent.  And for good measure the Finance Minister suggested that every member of parliament should voluntarily cut their pay.  Not surprisingly the suggestion wasn't greeted with enthusiasm.  Only around a dozen of the more than 200 Irish parliamentarians took up the offer.  Two MPs who initially did give up some of their salary later asked for their money back.  When the Education Minister suggested university staff take a pay cut, too, the academic union replied with an outright "no".

Having a computer manufacturing industry didn't save Ireland.  In 2003 the computer company Dell was Ireland's largest exporter.  Together Dell and Microsoft made up 10 per cent of the country's total economy.

However, the reality of the Irish technology industry was that little of its manufacturing was high value-added activity.  Companies were taking advantage of government subsidies, Ireland's relatively low wages and corporate tax rate, and its skilled workforce.  But when the subsidies ran out and wages caught up with the rest of Europe the inevitable happened.  Earlier this year Dell announced it was shutting some of its production facilities in Ireland and relocating them to Poland.

Ireland's woes have been exacerbated by a housing bubble and the practice of successive governments spending the revenue from the boom years on massive growth in public sector salaries.  Australia is not in anywhere as bad a condition as Ireland, but there are more than a few similarities between the countries.

According to Dan Breznitz, the American academic who's made the best study of Ireland's computer industry, in the mid 1990s the Irish government had no qualms about making "veiled threats" to persuade pension funds to invest in technology start-up companies.  Those sorts of veiled threats haven't been made in Australia -- as yet.

However, Infrastructure Minister Anthony Albanese has already announced he's started negotiations with the superannuation industry on how to "unlock" billions of dollars to fund projects like the broadband network.  Retirees might consider the Irish experience before they hand over their savings to their fund manager.

If Australia could have a computer manufacturing industry, "green jobs" and a national internet network without government hand-outs, then well and good.  But until they can survive without taxpayers footing the bill they should be treated as nothing more than the political fads that they are.

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Pay freeze reward is more jobs

The Fair Pay Commission made the right decision.

The Australian Fair Pay Commission's decision to freeze the minimum wage was the finest moment of its short life.

From October, the federal minimum wage will remain at $543.78 a week, or $14.31 an hour.  Statutory pay scales mandated by awards will also stay unchanged.

Unlike many other government regulators that tend to announce decisions without transparent explanation, the commission released a comprehensive dossier explaining its case for a wages halt.

Put simply, the dossier shows that the case for a regulated minimum wage rise cannot be sustained in the present economic climate.

With the national economy stuck in a low-growth dynamic, there has been an unfortunate rise in the proportion of people out of work.

The seasonally adjusted unemployment rate was 3.9 per cent at the start of last year, growing to 5.8 per cent last month.

In Victoria, the unemployment rate is higher as key industries such as manufacturing and financial services bear the brunt of the slowdown.

It is in this climate, the commission finds "the ability of employers to offer sufficient work has been curtailed and there is a heightened risk that an increase in regulated minimum wages would reduce employment and working hours".

Some of the criticisms of the wages decision were as vociferous as they were predictable.

ACTU president Sharan Burrow described the wage freeze as appalling and her secretary, Jeff Lawrence, labelled it as "another kick in the guts for working Australians".

This criticism overlooks the fact that the unions' claim for a wage rise would have destroyed jobs.

According to the commission's modelling, a minimum wage rise similar to that of the past three years would have translated into a 0.12 percentage point increase in the unemployment rate.  This would be equivalent to about 12,000 jobs lost nationally.

With the prospect of a jobless recovery looming, a mandated wages rise today would spell disaster for the livelihoods of too many people.

Perhaps the most surprising criticism of the wage decision came from Federal Workplace Relations Minister Julia Gillard.

She claimed the commission failed to strike the right balance, even though the Federal Government chose not to nominate its preferred wages growth target in its submission.

Gillard said "zero movement in minimum wages does equal a real wage reduction for these workers".

The latest TD Securities/Melbourne Institute survey suggests that inflation has now hit a seven-year low.

Therefore, this is as good a period as any to have a pause in wage increases set by regulation.

Gillard fails to recognise that hiring labour represents a cost to the employer.

Even a slight real wage reduction will encourage businesses to retain or hire more workers than would otherwise be the case.

Such effects have been confirmed by studies here and overseas.

With Australia having one of the highest statutory wage floors of any advanced economy, any action that reduces the real cost of labour is desirable in the current climate.

It has been the actions of the Rudd Government that has belied its publicly stated concerns about the plight of the working poor and jobless.

Since coming to office, it has embarked on an extensive reregulation of the labour market that will effectively increase the cost of employment.

Although the Government has made concessions for the restaurant industry, its "fair work" legislation encompassing pattern bargaining and award adjustments still risks increasing wages, penalty rates and loadings for labour-intensive, yet cost-sensitive sectors such as retailing and hospitality.

The union movement has also signalled that it now wants to move its across-the-board wages campaign to the seemingly more union-friendly Fair Work Australia bureaucracy.

By no means is our economy out of the jobless woods.

However, the commission's decision ensures that more people than otherwise could will beat back the unemployment scourge.

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G8: up in smoke

There was a large dose of whimsy in the G8 leaders getting together in Berlusconi's Italy last week.  Not only did it place the host's colourful private life at the centre of the world's stage but it was further enlivened by the world leaders' decision to adopt targets for emission levels 40 years into the future.

As a target date 2050 is ludicrously beyond the life expectancies of all the leaders adopting it, none would be held responsible for its failure.

This aside, the specific numbers adopted make no sense.

What was signed on to at L'Aquila is that the developed countries would reduce their emissions in 2050 by 80 per cent and the developing countries by 50 per cent.  Present per capita emission levels of carbon dioxide are 11.5 and 2.4 tonnes for the developed world and the developing world respectively.  The former Soviet block stands at 7.9 tonnes.

Using simple arithmetic, by 2050 the 80 per cent cut would leave the developed world with 2.9 tonnes of carbon dioxide per capita and the developing world with less than half of this at 1.2 tonnes per capita.  And this is based on the unlikely event of population growth in the developing countries slowing to the level of that in the developed world.

On top of their ethereal time frame, the targets are therefore internally inconsistent.  The rich countries are plucking out of the air goals that they know they will never be able to reach and cannot be made accountable for.  And in the process they are consigning the developed world to second class status with less than half the per capita emissions they are solemnly pledging to foist on their own constituents.

It is little wonder that China and India rejected the agreement before the ink had dried, as did Russia.

The Asian emerging superpowers are increasingly supplying the goods to the debt-ridden and ever more sclerotic western developed economies.  Far from being willing to accept a lower level of emissions than the developed economies, these and other rapidly developing countries are clamouring for additional emission credits to take into consideration previous emissions.

The way they see it, for the best part of a century it is the developed countries that have been emitting gases into the atmosphere that they claim is leading to harmful global warming.  Any paring back of such emissions should recognise the "sacrifice" the poorer countries' low income levels have made in the cumulative emission totals.

On top of this the poorer countries, including India and China, want to see one per cent of rich countries' annual GDP transferred to them.

Beleaguered British Prime Minister Gordon Brown has suggested a transfer of $US122 billion a year.  Brown indicated this has the backing of Kevin Rudd who, he buttered up as "a pioneer of both changing policies and changing attitudes on climate change".

Even though $US122 billion a year is only about a quarter of the sum claimed by the developing countries, such a magnitude of wealth transfers will never take place.  That number and those on emission reductions was put in place simply to allow the leaders to declare victory and allow a platform for next great leadership jamboree in Copenhagen.

But the lack of attention to ensuring some form of internal consistency in the numbers shows that in Italy the eyes of the world's political leaders were focussed on the host's real life soap opera and not on the great events they met to address.

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Stronger budget rules are needed

As the state of the federal budget makes clear, politics and finance often do not make comfortable bedfellows.

The last Howard-Costello budget, in 2007-08, was founded on a medium-term strategy to keep the budget balanced, on average, over the course of the economic cycle.  It is clear that the previous government did more than enough to keep the budget in balance.  The underlying cash balance from 1996-97 to 2007-08 averaged about 0.9 per cent.

As lengthy as it was, the Coalition's period in office did not coincide with the full length of the previous economic cycle.  Taking that cycle to be from trough in 1990-01 to peak in 2007-08, the underlying cash balance was actually in deficit, on average, to the tune of 0.3 per cent.

The failure of the budget-balance-over-the-cycle rule was because the over-taxation of the Howard years was insufficient to cover the overspending during the economic downturn of the Hawke-Keating era.

The fine print of the 2009-10 budget states that the Rudd Government, too, subscribes to the policy of balancing the budget over the course of the economic cycle.  However, at the first whiff of an economic slowdown, the Government has returned to the Keynesian course of spending big.

Since October the Government has spent more than $80 billion on $900 cash splashes, increases in welfare handouts, subsidies for insulation batts in houses, and payments to local governments to build ipod docking stations, sheds and eucalypt museums.

The immediate fiscal impact of such spending has been obvious, with an expected deficit this financial year of about $57 billion.  The greater concern is that budget deficits are now locked in as far as the eye can see, with the next surplus expected in 2015-16.  As the Bank for International Settlements noted in its latest annual report, fiscal policy is at serious risk of overshooting even in economies with the most room for debt expansion.

Even if one takes at face value the optimistic Treasury estimates of a strong rebound in economic growth, it is unlikely that the Government will achieve its stated objective of a balanced budget over the next cycle.  There are two key reasons why this medium-term fiscal principle has failed to hit the mark.  As economists James Buchanan and Richard Wagner stated in the late 1970s, balancing a budget over the cycle would be most effective when there is a predictable pattern of regular oscillations of economic activity.

If economic cycles are irregular and unpredictable, it is more likely that a government budget will be out of kilter.  More fundamentally, the public choice theory of Buchanan and Wagner showed that there are inherent incentives in democracies that propel governments to favour budget deficits over surpluses.

According to the theory, more spending is likely to draw in electoral support for a government as it buys new constituencies with taxpayer dollars.  On the other hand, increasing taxes or spending reductions to close the budget gap is far less likely to attract voters.  Therefore the political process has an inbuilt bias towards deficits.

Notwithstanding the substantial run of surpluses under Howard, the record of Australian governments after the 1960s appears to confirm this hypothesis.

The Keynesian idea that budgets should be about balancing the economy, and not the budget itself, merely provides an intellectual alibi for governments to live beyond their means.  It also risks damaging the economy in the process, because fiscal stimulus distorts the allocation of scarce resources.  There is a clear need for the Federal Government to institute stronger fiscal rules.  It should implement an annual balanced budget requirement, eschewing the misperception that fiscal activism can restore an economy to health.

The Rudd government intends to restrain real spending to 2 per cent each year, but this is conditional on the economy picking up.

Because the proclivity to spend is dependent on the ability to tax, an even better approach would limit tax growth to economic growth or inflation, as a matter of course, returning excess proceeds to the taxpayer.

The Charter of Budget Honesty Act should be beefed up to incorporate these explicit rules.  This would put the legislative onus on any future government aiming to weaken the fiscal conditions to fully explain its case.  Strong federal fiscal rules would encourage governments to hold up their end of the bargain on taxing and spending in a sustainable manner.  This ultimately means a better match between politics and finance.

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Silly recommendations are very bad for our health

Should the Government give tax breaks for gym memberships?  Sponsor therapy sessions for smokers?  Limit the number of bottleshops in each suburb?

The Federal Government's Preventative Health Taskforce has spent the past year coming up with creative little ideas to help Australians kick their alcohol, tobacco and fatty food habits.  On Tuesday, the taskforce delivered its recommendations to Canberra.  But they've been dripping out their proposals to the media for a few weeks.

Indeed, the taskforce seems to have adopted a tactic new to policy debate:  if you propose enough bad ideas in a short enough space of time, it's impossible to rebut them all.

One of the least convincing ideas is the one that has got the most attention:  subsidised gym membership and fitness equipment to tackle obesity.

Yes, gyms can be expensive.  But come the raw prawn, National Preventative Health Taskforce.  Gwyneth Paltrow may spend $900 a month to go to a "workout studio", according to the British Telegraph, but most gym memberships are the cost of an average mobile phone plan.

Maybe we are all craven, stingy fatties, but if we are, then it'd be a good bet that we're lazy too.  A few small tax breaks or a small government-sponsored reduction in the price of a gym membership is not exactly a compelling motivator to cast aside the pizza boxes and pump weights.

One of the more prominent anti-smoking proposals of the taskforce is to scrub cigarette packs of all brand identification -- logos, colours, everything -- as if stencilled gold foil pasted onto a cardboard box is all it takes to eliminate an individual's willpower.  Are there really that many people who want to quit smoking, but keep being drawn back by the shiny wrapping, like a nicotine-addled magpie?

No doubt the taskforce hopes to replace the labels with "YOU MIGHT AS WELL BE DEAD ALREADY" in a nice bold typeface on one side of the pack, and on the other side a picture of a confused and sad Bruce Willis.  And you get a mandatory slap on the face with each packet purchased.

We're a lot further down the nanny state's slippery slope than anybody could have predicted a few decades ago.  When restrictions on tobacco were first seriously implemented, those who opposed the measures asked whether fatty food could be the next target.  That concern was, of course, dismissed as silly and a little bit shrill.  Well, it's government policy now.

There's a big chasm between the medical world and the world of public policy.

Public health activists demonstrate their odd detachment from the mainstream world of politics when they start talking about our "obesogenic" environment -- a term used by reputable groups such as VicHealth and the Australian Heart Foundation to describe a society which apparently makes obesity nearly inevitable.

Like those post-Marxist philosophers who study the "essential violence" of peaceful capitalism, these public health academics now seek to expose the essential fatness of 21st century Australia.  Indeed, many health scholars have moved so far out of the realm of medicine that they seem to be developing a branch of sociology based solely on trans fats.

They may have good intentions.  Nobody wants Australia to be needlessly unhealthy.  But these medicos with ambitious regulatory proposals rarely consider some critical questions.  Will there be unintended consequences?  (Such as drinkers changing from alcopops to hard spirits since the tax was increased.)  And where is the evidence that it'll even work -- will the specific policy being recommended actually fix the problem?

There is an almost unanimous agreement among public health lobbyists and the commentariat that the Government should ban junk food advertising to children.  But the Royal Journal of Medicine argues there is "no good evidence that advertising has a substantial influence on children's food consumption".

Our peak communications regulator, the Australian Communications and Media Authority, which has repeatedly looked at the issue over the past decade, agrees.  Nevertheless, we still get vacuous claims about "pester-power" -- claims which seem to be driven by the belief that only the government can stop kids nagging their parents.

Mark Twain was concerned that giving the government the power to "meddle with the private affairs of cities or citizens" risked people losing their "independence of thought and action".  Today, it seems that for many in the public health establishment, this loss of independent thought and action is not so much a warning as an assumption.

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Scientific sceptics are turning up the heat

Conventional wisdom says Malcolm Turnbull won't allow Labor's emissions trading bill to provide a trigger for an early election.  This week, the Liberal leader hinted he would try to get acceptable amendments next month when the bill is debated in the senate.  But why should the party of small government support a scheme that has the hallmarks of creeping socialism, when all the available evidence indicates a changing political and intellectual climate, here and abroad?

At the heart of matter is whether Australia should take a legislated position on cap and trade to the UN post-Kyoto conference in December.  You only have to look at Washington's and Beijing's proposals on global warming to see why Copenhagen will turn into a circus.

In exchange for its own carbon cuts, the Chinese government expects the US and other developed nations to cut their emissions by at least 40 per cent from 1990 levels by 2020.  Yet the US legislation that only marginally passed the House of Representatives to cap greenhouse gases (with loads of compensation and loopholes for big polluters) translates to about a 4 per cent reduction from 1990 levels -- that is, one tenth of what Beijing demands.

China's leaders also call on the US and other advanced nations to cough up between 0.5 and 1 per cent of their annual GNP to help poorer nations cope with climate change.  Yet the entire US foreign aid budget currently amounts to about only 0.17 per cent of GNP.

No wonder the left-liberal, pro-green Los Angeles Times editorialises:  "Poor countries are placing such extravagant demands on wealthy ones that no American president, even a strong environmentalist like Barack Obama, could possibly accede."

So, if the Americans won't match the Chinese demands, it is a fair bet that the People's Republic won't be part of any global deal that obliges it to cut emissions.  The governments of Canada and New Zealand, moreover, are delaying the implementation of emissions trading pending the outcome of the Copenhagen talks.

In this environment, "going alone is suicide", as Family First senator Steve Fielding insists.  We'd inflict collateral damage on our economy in terms of lower growth, higher prices all along the energy chain and exporting a lot of our energy-intensive industries and jobs to those big polluting countries like China and India.  Which is why anything less than a universal consensus on drastic, mandatory and enforceable cutbacks in greenhouse gas emissions at Copenhagen is futile.

This is not a controversial point;  it's a self-evident truth that even Al Gore and Ross Garnaut concede.  When the US senate refused to ratify the Kyoto protocol before George W. Bush flashed his Texan cowboy boots on the global stage, the then-VP said Washington would only ratify the agreement if "key developing nations participate".  And a year ago, Professor Garnaut acknowledged:  "Even the whole of the developed world getting its act together and reducing emissions won't solve the problem."

The point here is that even in an age of globalisation, nation states do not act on the basis of what they perceive to be goodwill, good intentions or moral purity of other nations.  They act on the basis of defending and promoting the national interest.  What may make sense for a developed country in Europe does not work for a developing one in Asia eager to expand its economy and lift its people out of poverty.  One of the consequences of living in a multi-polar world, moreover, is that more groups have effective veto power over collective action.  This new pluralistic world has given rise to what New York Times columnist David Brooks has called globo-sclerosis -- an inability to solve problem after problem.

Meanwhile, more and more people are raising doubts about the science of man-made global warming.  Much media attention has focused on Senator Fielding's recent attendance at the Heartland Institute's annual conference for climate sceptics.  But he is far from alone in raising the temperature.

You know the climate is changing when even ABC journalists start defending the right of climate sceptics to speak out.  In a new essay On Doubt (Melbourne University Press), Lateline co-host Leigh Sales says:  "Climate change is an area in which we should allow room for doubt.  When there is such universal agreement [on the science], doubters have an important role to play, both in terms of the science and the policy responses."

There is a lot to be said for her argument.  Science is by nature a calling for sceptics.  It progresses by testing hypotheses.  Allowing one view to carry the day with no dissent sets a precedent that will stifle honest scientific debate and innovative thinking.  So it is heartening that experts are publicly voicing their concerns at how politics has overtaken facts on the subject.

Professor Ian Plimer's sceptical book Heaven and Earth is now in its fifth printing.  Writing in The Australian last month, geologist Bob Carter, carbon modeller David Evans, hydrologist-climatologist Stewart Franks and meteorologist-climatologist Bill Kininmonth all came out in unison to criticise climate change minister Penny Wong and her advisers for failing to answer, much less take seriously, Senator Fielding's reasonable questions on the real link between human carbon dioxide emissions and dangerous global warming.

Last week, Fielding earned high praise from the influential US web site RealClearPolitics as well as the Wall Street Journal.  And as the WSJ's Washington-based columnist Kimberley Strassel argued, the number of other sceptics is swelling everywhere.  The Polish Academy of Sciences recently published a document challenging the science.  In the Czech Republic, only 11 per cent of the population believes humans play a role.  In the US, where polls show record levels of scepticism, more than 700 scientists disagree with the UN -- 13 times the number who authored the UN climate summary for policymakers.  Peer-reviewed academic research has debunked doomsday scenarios about hurricanes, rising oceans and polar ice caps.  And so on.

None of this means the sceptics are necessarily right.  It's just that, as the English philosopher Francis Bacon put it in The Advancement of Learning in 1605, "If a man will begin with certainties, he shall end in doubts;  but if he will be content to begin with doubts, he shall end in certainties."

And there is no doubt that the uncertainties in climate forecasting remain huge.  In the 1970s, prominent environmentalists were issuing dire warnings about overpopulation, mass starvation and global cooling.  Yet population growth estimates have declined.  Biotechnology advances have found ways to feed more poor people than the Cassandras predicted.  And global cooling has become global warming.

Remember the costly and fraudulent scares we have recently lived through, from mad cow disease to genetically modified foods.  Remember, too, that the global surface temperature has remained virtually flat in the past decade.  Bear all this in mind when you see the End Is Nigh crowd try to rush through the senate a contentious bill that could have a substantial and detrimental impact on the lives and opportunities of the Australian people.

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Blocking school results a pointless exercise

Last week the Government introduced an education amendment bill ensuring that NSW was in line with other states when it comes to reporting school academic performance.

All parties were in furious agreement that the publication of league tables ranking schools from top to bottom using raw test results could not be supported.

This position was consistent with a national protocol signed by the federal and state governments allowing each school to be compared with "like" schools with similar student characteristics.

Despite this, the Greens forced a law that fines individuals and media outlets from publishing school rankings in the print media.  The Greens upper house member John Kaye said "this amendment calls the bluff of state and federal education ministers".

It is most ironic that the Greens would force such a league table ban on the very same day that federal Finance Minister Lindsay Tanner introduced an online plan for more open government.

A Federal Government taskforce has been established to find ways to turn the internet from a broadcast medium to a platform for collaboration.  According to Mr Tanner, governments "have to accept that in this new world, we won't always know how information will be used.  Citizens will assemble and combine it, or mash it, in ways that we can't fully appreciate".

Indeed, it is highly doubtful if the Greens' amendment will prevent people with an interest in school performance from taking the officially published data and creating their own school rankings.

Individuals and media outlets in other states could create their own school league tables, and there would be nothing stopping them from doing so.  The internet respects no borders, so parents in NSW can simply read school rankings published online by bodies outside of the state.

As the Labor member Penny Sharpe said during the parliamentary debate, the "amendment is well intentioned and utterly futile".

The legislative stunt by the Greens would have gotten nowhere had it not been for the Coalition supporting them.

This is arguably the most curious facet of this whole affair, as the Coalition when in government elsewhere has had a proud record of promoting an informed choice on schooling for parents.

In particular, the former Howard Coalition government published outcomes of national literacy and numeracy tests for government and non-government schools in aggregate.

This was a significant move compared to the "information darkness" that existed previously, giving parents, schools and policymakers a guide as to where improvements could be made in education.

Even some state Labor governments have moved to fill the gap in public performance information on schools.  For example, Queensland and Tasmania publish student literacy and numeracy test score results for individual schools.

While media outlets have used these to rank schools, it is an insult to the intelligence of parents to suggest that they cannot make their own judgements about published school results.  After all, most parents are acutely aware that students come from various socioeconomic backgrounds, and come to school with a varied aptitude and ability mix.

Recent events in the NSW parliament show that some politicians still think that controlling the kinds of information that the taxpaying community should get, about the services they fund, is a worthy objective.

However, this ignores the fact that in a modern, information-rich world it is becoming increasingly pointless, and even counterproductive, to try.

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Coal's detractors ignore hard facts

Even though the US House of Representatives passed the Waxman-Markey cap-and-trade emission restraint bill last week, it has to pass the more formidable hurdle of the Senate before it can become law.  The bill requires a 20 per cent reduction in US emissions by 2020 and an 83 per cent reduction by 2050.

Such a level of reduction would bring US emissions to the present world average and is consistent with stabilising global CO₂ equivalent emissions somewhere between the present 450 parts per million and the projected 550 parts per million.

As the Copenhagen conference in December approaches, it becomes increasingly clear that it will end in an absence of meaningful pledges to reduce CO₂ emissions.  The executive secretary of the United Nations Framework Convention on Climate Change, Yvo de Boer, gave his best spin, saying it would be, "physically impossible to finalise every last detail".

Emission-reduction commitments are being diluted.  A watering down of the European Union's proposed targets is certain to be intensified after the recent election results.  Faced with a 35 per cent increase in emissions, a newly elected Canadian government abandoned its 6 per cent Kyoto emission-reduction objectives two years ago.  Japan is proposing to do little more than hold its existing emission levels.

Meanwhile, the developing world, which now has similar emissions to those of the developed world, is playing hardball.  China, in return for some aspirational reductions down the road, is demanding the US reduce emissions by 40 per cent by 2020 and, in addition, provide 1 per cent of its gross domestic product a year in assistance to poorer countries, including itself.  Comparable demands would apply to similarly placed countries, such as Australia.

The Greens aside, even Australia's most carbonophobic legislators cannot credibly proffer a 40 per cent reduction in emissions by 2020.  And for Australia, a 1 per cent a year outflow for assistance comes to $10 billion a year -- half our defence spending.

Coal is one certain casualty of any carbon tax or cap-and-trade system that stabilises CO₂.  Because of its carbon content, coal cannot continue to be burned if carbon emissions are to be reduced to the extent intended.  Technologies such as carbon capture and storage offer no life support for coal;  even on the most favourable assumptions, they would produce coal-derived energy at more than twice present costs.

We can only speculate about what future technologies might be low-cost alternatives to coal, oil and gas, though there is little possibility that wind and other exotic renewables could do the job.  They could never become sufficiently reliable, let alone achieve the threefold lowering of costs needed to enable them to match fossil-fuel prices.

The only currently feasible means of achieving a drastic reduction in emission levels is a conversion of electricity generation to nuclear.  For Australia, this would be a trillion-dollar program and leave us with higher electricity costs.  To allow the targeted reduction in emissions, it would also entail some means of ensuring vehicles ran on nuclear-generated electricity.  It would also mean considerably less air travel, unless new means of aircraft propulsion are invented.

The loss to Australia from coal's obsolescence would be considerable.  Comprising a quarter of our exports, coal is the basis of the low-cost energy that has been our industrial backbone.  Spin-offs for other industries aside, the wealth stored in our 76 billion tonnes of coal deposits would be lost.  Even with an intrinsic value as low as $10 a tonne, this amounts to $760 billion, which is close to this year's gross national product.

Ironically, those most vocal in opposing coal as a power source are also the most hostile to nuclear power.  Some just want a different sort of economy -- one less attuned to the materialism they despise.  Others have become attached to economic models that indicate closing down energy-intensive industries would mean their swift replacement by new businesses.  They naively envisage new activities that will allow miners to become bookies' clerks, and iron workers to retrain as shop assistants.

Many of those welcoming an enforced ending of the fossil-fuels era parrot the cliche, "The Stone Age did not end because we ran out of stones".  But steel survived the end of the Iron Age and copper the end of the Bronze Age, and we have not stopped using stone.  Nor were these eras ended by targeted taxation measures.

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Readers pay a price for authors' greed

The campaign by wealthy Australian authors such as Tim Winton and Bryce Courtenay against reforms that would enable Australians to buy cheaper books is all about feathering their nests and has nothing to do with protecting Australian culture.

Yesterday the Productivity Commission handed to the federal government its final report on whether restrictions on importing copyrighted books, or parallel import restrictions, should be eased.  These restrictions inflate the price of books by limiting competitive imports, and the beneficiaries are the local printing and publishing executives, at the expense of consumers.

The industry operates under the 30-day rule, which allows import restrictions for the life of the copyright -- which means the life of the author, plus 70 years -- so long as the book is made available in Australia within 30 days of being published overseas.

Exemptions are provided for booksellers filling a single order and for consumers buying books directly from online retailers.

It must be hoped that the commission recommends scrapping the restrictions altogether.  Its draft report recommended only paring back the restrictions from the life of copyright to a single year.

But, in response, publishing industry executives such as Louise Adler have worked local authors up into a frenzied opposition to these modest reforms.

Author Peter Carey described the proposed measures as "cultural self-suicide", and others have argued they will cost jobs and reduce authors' income as well as the number of local authors published.

Their claims are baseless.  When the Howard government removed import restrictions on compact discs in 1998, it was accused of gutting the music industry and jeopardising the income of musicians.  But industry data shows royalties increased from $81.8 million in 2003 to $108 million in 2007, and the number of performers receiving royalties also increased.  Meanwhile, the average price of a CD album has fallen by 32 per cent.

Similarly, New Zealand's removal of parallel import restrictions on copyrighted works in the same year also points to benefits.  Jobs in the publishing industry have been lost on both sides of the Tasman, but the NZ industry has not lost nearly as many.

Part of the reason for slower job losses in NZ is that, without protection, publishers focused on being internationally competitive and increased their exports.  It is similar to the experience of Australian industries following the liberalisation of tariff barriers in the 1980s and 90s.

But the most absurd claim is that easing import restrictions would water down the exclusive rights copyright confers.  In a book there are two property rights:  one relates to the physical book and the other to the copyright text.  Import restrictions are designed to protect the former and don't affect the latter.

Although parallel import restrictions exist for the three main branches of intellectual property -- copyright, patents and trademarks -- they are inconsistent and unnecessary for copyrighted works.  Patents and trademarks need parallel import restrictions because the property rights afforded are not automatic.  They need to be registered with a government agency country by country.  But they rarely are because of the cost involved, and as a result there is no guarantee that royalty payments will be made to the right holder on an import.

Copyright, on the other hand, is automatically conferred to the right holder and it is protected in all countries that are signatories to the Berne Convention for the Protection of Literary and Artistic works.  Royalties are paid to copyright holders when their works are published in those countries, based on the laws of each country.  The only justification for import restrictions for copyright is to guard against counterfeit products.

Australia's parallel import restrictions may be included in the Copyright Act, but they are not a part of IP protection.  They are a trade barrier disguised as IP protection.

The costs of these restrictions are borne by the least affluent Australians, who are paying higher prices for books than necessary.  And that is harming education opportunities for Australia's poorest.

Rather than seeking industry protection, Australia's book industry should be focusing on how to expand the market for books by making them cheaper.  It's the only sustainable way of guaranteeing their income.  And consumers win, too.

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Crisis? What crisis?

By now, we've all read the story, dozens of times.  It goes like this:  the financial crisis has brought down the Potemkin village of consumerism.  The recession has exposed the internal contradictions and long-term impossibility of the neo-liberal order.

In a thousand community centres across Australia, in homes and kitchens and op shops, people are changing how they live their lives.  People are cooking at home instead of eating out.  Restaurants are responding by replacing gourmet with "home-inspired" meals.  Friends are sharing clothes.  Op shops are in fashion, a claim shown by talking to the fashion designer who picked up a pair of leather pants for (just!) $120 from the Salvos.  Indeed, the Salvos have rebranded their stores as "Fashion with a Conscience", making the leap from evangelical Christians with a focus on charity, to "urban recyclers" with celebrity endorsements describing the shops as a "new shopping hot spot".

Sewing is back -- here two youngish mothers are sewing pants for their children and have started a home-made homewares club that plans to meet every fortnight in a Brunswick community hall.  Fashionistas are now recessionistas;  "recession chic" has replaced all-my-pants-are made-out-of-Peruvian-diamonds chic.  You get the idea.

But is consumerism really on its deathbed?  I mean, we're not even technically in a recession yet.

This narrative about the consequences of the economic crisis is just a little too cute to be true -- it's like prudence and thrift as seen through the glossy eyes of an upmarket women's magazine.  These are the kind of savings found by people whose share portfolio has dipped, not the financial savings that people who have been suddenly kicked out of work have to find.

If conspicuous consumption has really gone, perhaps we've replaced it with conspicuous frugality.  It's sometimes hard to tell the difference.  Are expensive ripped jeans, popular long before credit began to crunch, meant to symbolise poverty or wealth?  The developed world's press -- tabloids and broadsheets alike -- have managed an apparently seamless transition from stories about "why the economy is growing but we're all really sad" to stories about "starving in style".

An unemployment rate of 4 per cent apparently makes us concerned about working too hard, and economic growth makes us depressed.  But an unemployment rate just over 5 per cent evidently encourages people to discover their inner artisan and make their own hats out of felt.

Certainly, the retail sector has sputtered in the past few months.  In February, retail sales fell 2 per cent.  In March, sales increased more than 2 per cent, and April's figures show a barely discernible increase of just 0.3 per cent.  But, despite the ups and downs of the retail sector since the downturn began, I found in my study released this month, that retail sales figures were sticking closely to their long-term trend -- and that trend is, even in these dark economic times, moving inexorably upwards.

Sure, this could be due to the $900 gifts that most people received a month or two back, although the economists pointed out that a mostly steady trend suggests this is unlikely.  Nonetheless, if consumerism is really sinking, then the seawater hasn't shown up in the retail sector quite yet.

Obviously, rejecting consumer capitalism for political reasons isn't a new phenomenon.  Back in 2006 The Australia Institute, a left-wing think tank, claimed that dumpster-diving was gaining in popularity.  Skip-dippers are conscientious objectors to consumerism who aren't forced by adverse circumstances to dig through other people's rubbish, but do so as a political statement about sustainability and capitalism.  And, according to the Australia Institute, skip-dippers aren't just people who enjoy reupholstering furniture, but more affluent hobbyists shoving their hands in supermarket dumpsters until they touch the coagulating bin-juice at the bottom.

And people were sewing clothes as a hobby well before Lehman Brothers went bankrupt.  Indeed, in 2001, the satirists at The Onion wrote a piece titled "Gruelling Household Tasks of 19th Century Enjoyed By Suburban Woman", pointing out that churning butter and making candles by hand are very strange ways to spend your free time.

Nevertheless, one somewhat more serious article in the British industry magazine Marketing Week claimed that the financial crisis comes at a moment in history when we are shifting away from consumerism anyway -- the magazine described the future as a "premodern age".  According to this view, we're seeing a new emphasis on social, rather than individual, production and we're buying things less for instant gratification, and with social goals in mind.  We're thinking of the environmental impact of our purchases and the ethical questions they raise, and so on.

There is something to this.  In 2009, there's scarcely a product imported from the Third World that doesn't have a fair trade equivalent.  And environmental sustainability is now held as a goal not just for committed greenies, but for otherwise non-political types.  After all, skip-dipping student communes can't afford to install solar panels on their sharehouses, these basic but expensive home improvements are being taken up by largely middle-class buyers.

Rightly so.  Psychologists and economists refer to a "hierarchy of needs" -- once individuals have sorted out basic things like food and shelter, safety, and love, they start concerning themselves with ethical or moral questions.  If you're rich enough to afford imported cheese, you've also got more energy to think about where your food comes from, or what impact you might be making on the wider world.

But how seriously should we take the idea that the financial crisis is the final straw that will suddenly push us into glorious premodernity?  Marketing Week pointed to the popularity of Lily Allen, whose pop music has an anti-consumerist tinge.  Indeed, in the lead single of Allen's latest album she mockingly sings:  "I am a weapon of massive consumption, and it's not my fault, it's how I'm programmed to function."  Do you like her message?  Have you already bought her CD?  You might also want to buy the video from iTunes for $3.39.  And ringtones of her songs are available from the Lily Allen Mobile Store, ensuring you can continue to collect Lily Allen memorabilia on the go.  She does appreciate your support -- The New York Times reported that Allen spent $143,000 on clothes and jewellery just last year.  Hey, there's nothing wrong with any of that.  It would be a stupid pop singer who didn't offer her fans every kind of merchandising possible.  And for a musician, multiple revenue streams are essential in an age of widespread music piracy.

But a celebrity's failure to practise the ascetic lifestyle they preach does nothing to assuage that nagging suspicion that political views about conspicuous consumption can be as much a fashion as any brand-name T-shirt.

Even the popular anti-advertising culture-jamming outfit Adbusters puts out an overproduced magazine designed more for the coffee table than the barricades.  Yet, the publisher of Adbusters decries our lazy consumerism:  "We watch nature shows instead of venturing into nature.  We laugh at sitcom jokes but not at our spouse's.  We spend more evenings enjoying video sex than making love ourselves."

Does that description hold true for anyone you know personally?  We speak of other people seeking out "status goods" -- things purchased primarily to signal to others that they could afford them -- and "conspicuous consumption", but we are apparently never guilty of such irrationality ourselves.  Soulless consumerism is easy to identify in others, not so easy to identify at home.

Just a few years ago, social critics were claiming that people bought iPods in part to show off their distinctive white earbuds.  But as Apple reduced its prices and introduced new, cheaper models, it undermined the "status" value of its products by making them available to even more people.  The presumed exclusivity of the iPod range was totally shattered.  Yet since then, sales of iPods have increased exponentially.

I don't know about you, but I buy things because I think they might make my life better in some way.  Sometimes we all get it wrong -- a book isn't as good as we hoped, a piece of technology doesn't integrate into our lives as smoothly as we would like, or we bought too many mushrooms to put in the risotto.  Most of the time, we get it right.

So what is so "consumerist" about that?  Is it really conspicuous consumption if the enjoyment we derive from stuff comes from when we use them, not just simply from purchasing them?  And if it is, then what's the problem?  I suspect that the vast literature on consumerism and consumption can be reduced to one banal observation:  life is getting better.  We have more ways to raise our living standards, and some of those ways involve buying stuff.

There's a funny thing about recessions:  if -- a pretty important "if" -- you don't lose your job, recessions aren't really that bad a time to be alive.  Interest rates tend to go down and panicky retailers aggressively discount their goods to try to draw customers back and clear stock.  If you like your designer fashion or just no-brand accessories, they will be going on sale earlier and at prices lower than when the economy was booming.  So, except for shrinking superannuation savings, there really isn't too much to panic about.  For better or worse, a recession needn't precipitate any major changes to the way we live our lives.  If you haven't done anything stupid, like max out your credit card, or taken out a mortgage you couldn't even pay off in a booming economy, then everything should be fine.

Of course, for the minority that lose their jobs, recessions can be very traumatic.  Sure, the unemployed may be spared the consequences of "affluenza" -- the crippling emotional emptiness of consumerism -- but losing a job is widely considered a big risk factor for mental illness, poorer physical health and relationship problems.

As always, our historical linchpin for economic downturns is the Great Depression.  We all know of parents or grandparents who acquired a distinct frugality during the 1930s.  But it's not like consumerism took a holiday during the Great Depression.  The 1930s was a formative period in the development of the advertising industry, when marketers started to focus on marketing directly to the vanity of individuals.

Beauty products are famously counter-cyclical -- that is, as the economy goes down, sales of lipstick and foundation go up -- as people spend money on cheaper forms of self-improvement and satisfaction.  This held just as true for the 1930s as it has for the recessions that followed.  Yet this focus on the individual during an economic downturn doesn't quite fit our idea of the communal, co-operative and fundamentally anti-consumerist culture in the period.

And, of course, we have to remember that, whatever cultural changes did occur during the Depression, that period was followed by a long postwar boom.  The golden age of advertising built on the foundations developed during the 1930s and 1940s -- two decades of apparent selflessness.

Economic downturns always end.  Broad shifts in culture aren't just brought about from an economic crisis.  They take time.  Maybe there are big changes afoot in society.  But the activists and trend-spotters who treat the financial crisis as the harbinger of a global anti-consumer sustainability revolution are reading just a little too much into a few anecdotes about sewing and vegie patches.

Anyway, a green economy will require a little more than "reduce, reuse and recycle" -- going green takes greenbacks.  Energy produced by wind power costs much more than energy produced by brown coal;  the cheapest electric car is far more expensive than the cheapest gas-guzzler.  Whatever consumer preferences are shifting towards green products is only possible because of our historically unprecedented wealth.  We'll all need to buy our way into a cleaner future -- energy-saving devices don't buy themselves.  The same is true for almost all other social and ethical causes.  Concerned about global poverty?  Producers in the Third World would appreciate our continued demand for their goods.

If before the crisis hit you were a reckless spender and debt-accumulator, then I'm glad a recession could come along to shock you out of your idiotic ways.  And if you refused to share your clothes with your friends, but now that your investments have tanked you've been able to find just that little bit of residual neighbourliness deep within you, then that's marvellous.

Nevertheless, for the vast majority of Australians, life will continue as before, largely unaffected by the economic downturn.  The global financial crisis is a big deal.  But it's not that big a deal.

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