We emit less CO2 than Combet gives us credit for

On April 13, Climate Change Minister Greg Combet's spin for a carbon tax pushed new frontiers in the art of being economical with the truth.

He said:  ''Australia release[s] more pollution per person than any other country in the developed world, more than the US.''

In a chapter of a recently published anthology, Energy, Sustainability and the Environment, edited by F.P. Sioshansi, I observed:

''International trade means countries that export energy-intensive products incur emissions on behalf of other countries.  This tends to reduce the national emission levels of many developed countries, while exaggerating those of some developing countries and resource rich countries like Australia.''

Recently released UN data confirms and quantifies this.  It shows that about 11 per cent of the US's carbon dioxide emissions are outsourced; that is, they are incorporated within imports.  In Japan it is 18 per cent and for Switzerland more than 50 per cent.

By the same token, Australia's emission levels are overstated because we are a net exporter of goods that incorporate carbon dioxide.  While on the basis of production our carbon dioxide emission levels are 16 tonnes per capita, on the basis of consumption they are only 13.5 tonnes.  This means Australia's per capita emissions are lower than those in nine of the 35 developed countries.

The vastness of Australia is one reason we use more energy and hence have higher carbon dioxide emissions than many other countries.  But Australia's sheer size also means the continent is a significant natural sink for carbon dioxide emissions.

If Australia is credited with these natural sequestrations, this markedly changes the comparison with other countries.

Australia's land mass naturally absorbs about 137 million tonnes of carbon dioxide a year.  If this is subtracted from the 550 million tonnes of carbon dioxide (or its equivalent) that is actually emitted, Australia would be average among the developed countries.

There are further reasons Australia's emission levels are swollen relative to those of other countries.  Among these is the relative saturation of hydro power availability (although additional capacity would be available in Tasmania if the ALP-Greens alliance lifted its veto).  Similarly, we have no nuclear power, again in part because of politics.

These two emission-free power sources account for nearly 20 per cent of the electricity generated by developed countries but less than 5 per cent for Australia.

In reality, all these numbers are simply propaganda tools.  Every country emits carbon dioxide levels consistent with its stage of development, costs of different energy and raw material sources and economic structures.  And although some countries have introduced regulations that force reductions in carbon dioxide emissions more aggressively, aside from the European Union, Australia appears to have been as willing as any other country to impose the costs these entail.

Contrary to this view, Combet suggests we are not pulling our weight.  To craft evidence for this, he decided to prejudge the Productivity Commission report his government commissioned to obtain information on different countries' effective carbon tax rates.  Instead he drew from material assembled by London-based Vivid Economics that his department commissioned.

As Gary Johns showed in The Australian on April 28 (''Dodgy figures and wrong questions plague the carbon debate''), the material contains some howlers.  Among these is a claim that China has a carbon price of $8 a tonne.  This was arrived at by assigning, as a carbon tax, China's policy of ceasing to favour small (and carbon-intensive) electricity producers.  Australia implemented that measure with the electricity market reform introduced by the Kennett government in Victoria and supported by the Keating federal government's competition policy reforms.  Needless to say, nobody here claims this to be a form of carbon tax.

Combet also used the Vivid Economics report to claim falsely that the US and India were acting to introduce such taxes and that, based on the report, we were delinquent in our own levels of carbon tax.  But for Australia the Vivid Economics material failed to acknowledge the commonwealth's requirement that 20 per cent of electricity by 2020 must be sourced from exotic forms of renewable energy.

This scheme is L.A.W. law.  It imposes high-cost wind and solar on the consumer and has a carbon price effect that grows year by year, reaching $13 a tonne by 2020.  The commonwealth's proposed carbon tax at $20-$30 a tonne would be on top of this.

Laughably, Combet added that acting to introduce a tax was also in our national interest.

What we are in fact finding is that some businesses think it is in their interest to introduce a ''carbon price'', with all the potential this offers them for creating new trading markets.  Some other businesses, now joined by BHP Billiton, think it is a good idea as long as they are immune.  Others realise there can be no winners and courageously say so despite government pressures on them.

More significantly, opinion polls show a rising majority of people do not think it is in our national interest to introduce a carbon tax.

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US follows treaties only when it suits

The US Navy Seal raid into Pakistan that killed Osama bin Laden has triggered a predictable chorus of complaints.

High-profile human rights lawyer Geoffrey Robertson described the death of the al-Qaeda leader as a ''perversion of natural justice''.

Former human rights commissioner Moira Rayner complained that bin Laden's ''execution by agents of the sovereign people of the United States was a fundamental breach of article 10 of the universal declaration of human rights''.

But such pronouncements ignore the fact that the US does not regard itself as bound by international law.  It is a long-standing US constitutional doctrine that a ratified international treaty shares equality of status with congressional statutes.  And like any other law on the federal books, a treaty obligation can be modified or repealed through subsequent action by Congress.

With a laundry list of Supreme Court decisions to that effect, there is nothing even vaguely controversial about this principle within US jurisprudence.  The 1957 ruling in the case of Reid v Covert declared:  ''this court has regularly and uniformly recognised the supremacy of the constitution over a treaty''.

In essence, Washington's adherence to international law is entirely voluntary.  So the furious debate as to whether the 2003 invasion of Iraq was sanctioned by the UN is rendered irrelevant.  American military action was duly authorised by a congressional Iraq War resolution of October 2002 that made the overthrow of Saddam Hussein legal under US law.

The same principle holds true for the raid on bin Laden.  One week after the 9/11 attacks, Congress passed what became US Public Law 10740:  the authorisation for the use of military force (AUMF).  It empowered the US president to ''use all necessary and appropriate force against those nations, organisations, or persons he determines planned, authorised, committed, or aided the terrorist attacks that occurred on September 11, 2001''.  If that category didn't include bin Laden, then the English language has lost all meaning.

The AUMF nullified contrary obligations the US might have previously incurred under international treaties, including the universal declaration of human rights.  In American eyes, Osama bin Laden was a wartime enemy combatant who was treated as such.

The superiority of the US constitution over international law has an added dimension.  The authority to pass legal judgment on American government action is restricted to constitutional officers of the United States.

All those cavils from the human rights lobby about bin Laden's death are much ado about nothing.

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Charade must end, and both sides of politics know it

PERHAPS now Labor and the Coalition could come clean with voters.  Both sides of politics intend to grow Australia with immigration -- to continue the 200-year project of population expansion.  This project is as important today as it was during the Victorian gold rush.  They just don't want to admit it.

Treasurer Wayne Swan announced in last week's budget an increase in immigration of 16,000 people; three-quarters of those will be skilled migrants sent to regional areas.

That's on top of the government's new Enterprise Migration Agreements.  The agreements allow large mining and infrastructure firms to negotiate tailored guest worker schemes for foreign labour, as long as they implement training programs for local workers too.

Sure, in the scheme of things, these changes will only modestly increase immigration levels.

But they've been announced by a government that spent the 2010 election talking about how they planned to slow population growth, blamed skilled migrants for undercutting wages, and promised to ''take a breather'' on immigration.

The increases have been embraced by an opposition that ran even harder against population during the campaign.  Supporting the government's migration increase last week, shadow treasurer Joe Hockey said it was necessary if we were to avoid inflation.

Last year Julia Gillard and Tony Abbott fell over each other trying to appeal to voters convinced that traffic jams and refugee boats were two sides of the same problem.

Labor announced an inquiry into sustainable population, plainly hoping it would calm those who hated Kevin Rudd's ''Big Australia''.

The ''stable population'' types welcomed the opportunity to present their misanthropic views on closed borders and reduced birth rates.  Green groups proposed population limits too, prioritising the Australian environment above the well-being of potential migrants.

But the government must have known that business lobbyists would call for higher migration during the inquiry.  The likely final result would be an expansion, not a reduction, of foreign skilled migration.

The government released the inquiry's report on Friday.  It simply says that skilled migrants should be sent to targeted industries and regions, and that governments should plan better.

The ''small Australia'' rhetoric of the 2010 election was just for show.  So let's give up the charade.  Australia needs more migrants; our economy is begging for them.

The enormous mineral projects in Western Australia and the North need mass labour if we're going to continue to rely on the resources boom to underpin growth.  The Chinese demand, which Treasury hopes will save the federal budget, will only be met with new workers.

The National Farmers Federation reckons agriculture needs at least 100,000 more workers now that the drought has lifted.

Booming global demand for resources, and booming global demand for food -- a government that did not make policy changes to meet those demands would be negligent.

Could we try to fill all these positions with existing Australian residents?  Well, the unemployment rate is in the fours.  There aren't many Australians available.

But the more troubling answer to that question comes from another proposal in this budget -- the $1700 bonus for apprentices if they complete their training.  That seems perverse.  Do we really have to bribe people to qualify for jobs that offer high wages?

There is, of course, a powerful moral argument for accepting more immigrants.  Migrants do more than just help our economy.  They travel here for work to support themselves and their families.  That's the moral dimension -- people should be free to build a better life, as long as they don't harm others in the process.

Migrants do not steal jobs from locals who want to work.  The economic literature on that question is unambiguous.

Nor is infrastructure the problem immigration sceptics claim.  Migrants pay taxes.  Competent governments should be able to deploy those taxes for transport and services.  When incompetent ones -- read New South Wales -- do not, that's not immigrants' fault.

All these points are as true for unskilled migrants as much as skilled ones.  A far-sighted government would look at expand-ing the unskilled cohort.  The economy could easily use them.

Immigration is overwhelmingly more effective than foreign aid at boosting development in the Third World.  Migrants send money back home.  Globally, the amount of cash remitted to the developing countries is more than total global spending on foreign aid.  And it goes directly to those who need it.

So for Bob Brown to describe economic migrants this week as ''queue jumpers'' is obscene.  The Greens' support for humanitarian programs is laudable; their opposition to immigration in general is not.

Throughout Australian history, the ''population problem'' has been about how we will people the continent, not whether we should.  And despite the aberration that was the 2010 election, it still is.

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Power rules steal from state

SENSIBLY, the Australian Industry Group has recommended the Queensland Government privatise its $2 billion electricity transmission business, Powerlink.

The proposal should also extend to the state's electricity distribution businesses, Energex and Ergon.

Like Powerlink, these are regulated monopolies and may be worth $20 billion to private bidders.

Work by Carbon Market Economics director Bruce Mountain and Stephen Littlechild, England's former chief electricity price regulator, indicates electricity distribution costs in Queensland are excessive.

Private ownership of the regulated ''poles and wires'' monopoly assets in Victoria and South Australia has brought greater cost disciplines and the southern states' prices have risen more slowly than in Queensland.

Privatisation of Queensland's electricity distributors and Powerlink would restore the state's credit rating and provide Budget relief, while also restraining soaring electricity bills.

AIG also recommended the Government sell its electricity generation assets, Stanwell-Tarong and CS Energy.  These coal-based generation assets have a book value of more than $6 billion but their market value is difficult to quantify.

Fears of a carbon tax and other federal and state measures that discriminate against coal-generated electricity have brought precipitous falls in the value of these power stations.

Among the federal measures is the requirement for high-cost renewables to comprise 20 per cent of electricity supply by 2020.  This will boost direct costs to the consumer by $130 a year as well as increasing costs of everything that incorporates electricity.

In addition, Queenslanders have over-generous feed-in tariffs for roof-top solar panels and an obligation to use high-cost gas, measures that visit additional charges on the average consumer.

The carbon tax would come on top of this.  According to Treasury this will cost Queenslanders $863 a year.

For the state-owned, coal-based generators, these imposts undermine value by restraining their earnings and adding a massive investment risk.  Queenslanders, as owners of the state's coal-fired stations, incur these losses.

Without the regulations requiring high-cost power sources and the carbon tax threat for electricity, Queensland's state-owned generators would be worth more than $10 billion.

But, as a result of the prospective carbon tax, those generators today may be worth only $5 billion -- a loss of between $5 billion and $6 billion, or more than $2000 for every household.

The impending carbon tax has already had a heavy impact on the worth of NSW's generators -- halving their value.  In South Carolina, US, a form of carbon tax resulted in the state government selling two new coal-based power stations for scrap value.

Queensland, with the world's lowest-cost large-scale coal deposits, should be a magnet for energy-intensive industries and for businesses seeking to generate cheap power for households and industry.

Federal and state government action is preventing such investment and reducing the value of the existing power stations that Queenslanders own.

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What happened to the meat axe?

THERE'S nothing for it.  Send out a search and rescue team for Kevin07's meat axe.

Treasurer Wayne Swan talked for the fourth year in a row about a tough budget, but despite the ballooning deficit, the Australian Public Service, which Kevin Rudd described in 2007 as bloated, continues to grow.

Hidden deep within Statement 6 of 2011-12 Budget Paper No 1 is data on average staffing levels in the public service, including all defence force personnel and people employed by commonwealth statutory authorities.

During the last year of the Howard government there were 248,217 full-time equivalent federal public servants across the country.  In 2008-09, the first full year of the Labor government, this level increased to 250,566 public servants.  A year later public service numbers increased to 258,321 and again in 2010-11 to 261,891 people.  That's an extra 11,300 people in the life of the Rudd and Gillard governments so far.

The latest budget reveals that in 2011-12, when the government hopes its budget deficit will be sliced in half, the number of public servants on its payroll will grow by a further 1100 people to a grand total of 262,995 staff.  It's as if the government thinks that, by some natural law, every year the size of the government has to get bigger.

The budget paper also provides a breakdown of anticipated staffing by agency, giving a crucial insight into the policy priorities of the government in the short term.  While reallocations of staff across agencies affect the results, most public servants will feel nothing in net terms of the government's deficit reduction crusade.

The civilian Defence Department, including the Defence Materiel Organisation, is set for nearly 1000 new staff in 2011-12 compared with the previous year.

This may surprise many who observed the government laying the groundwork for cuts to this area.  However, as revealed in The Australian last week, the announcement of 1000 jobs lost from Defence in the next four years are for intended, but yet to be filled, vacancies.  The centralising of power in the hands of the Prime Minister is set to continue with more than 310 new employees in the Department of the Prime Minister and Cabinet.

The Immigration Department, which has distinguished itself recently by failing to advise its minister of a bomb in a detention centre, is expected to gain a further 285 employees.  Staff lost from the Education Department will be partially offset by a new Vocational Education Regulator, with 155 new people on board.

And to tally all of this, and everything else, the Australian Bureau of Statistics will be rewarded for enduring nominal budget cuts in previous years with 200 extra staff.

The budget paper highlights some employment losses from some agencies, but these cuts are mostly more apparent than real, with staff being reclassified from one agency to another in what is the big APS merry-go-round.

This public sector growth is the smoking-gun admission of the government that all its tough talk about savage spending cuts has come to nought.  The meagre sacrifices of expenditure rationalisation offered will largely be offset by spending hikes elsewhere.

What has been missed in recent weeks is that the government had no intention of endangering the new protected species of public servants working for it.  In an interview on the Ten Network's Meet the Press this month, Wayne Swan said:  ''We do not necessarily expect any forced job losses in the public sector.''

So why does the government promise so much on public service rationalisation yet deliver so little?

From a political economy perspective, the answer is straightforward.  A political party wishing to gain power, or hold government, will never offend its core political constituency for fear of losing its voter base.  With trade union representation in the private sector leaching away because of global competition affecting trade-exposed industries such as manufacturing, public servants represent the dominant force in the union movement.  It is the interests of this constituency that Labor, a creature of the unions, must serve.  Being in a minority government alliance with the Greens, who are increasingly vying with Labor for votes from public sector workers, doesn't help the cause of right-sizing the government either.

Each year leading up to the federal budget the Community and Public Sector Union has warned the government against making cuts to the public service.  Indeed, before the 2007 election campaign the national secretary of the CPSU rebuked Rudd for his ''intemperate language'' about cutting back the public service.

So, if a search party is called out for the missing meat axe, the likeliest place to find it would be in a locked vault in the inner sanctum of the public sector union.

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The meme of the ''disaffected Jew'' has been greatly exaggerated

Like Mark Twain's famous quip about reports of his death being ''greatly exaggerated'', assertions of a weakening in Jewish affection for Israel are grossly overstated.  In fact, they're patently false.

But that hasn't stopped American Jewish writer Peter Beinart from making a minor career out of advancing that thesis.

A year ago he generated worldwide headlines with an essay in the New York Review of Books entitled ''The Failure of the American Jewish Establishment''.  And since then Beinart has trotted the globe, peddling his argument at such venues as the Melbourne Writers Festival.

Beinart believes that traditional Zionism is in a moral ''downward spiral'' that alienates Israel from liberal-minded American Jews.  And he claims this phenomenon is particularly acute amongst the young, who increasingly see Israel as victimiser rather than victim.

The ''disaffected Jew'' meme also popped up last year in the pages of the Leftwing NewMatilda magazine.  ''The Jewish Disaspora is Turning on Israel'', proclaimed the headline of an article by Antony Loewenstein, John Docker and Ned Curthoys.

But the recent publication of two academic research surveys has cast the theory of Jewish detachment from Israel into serious intellectual disrepute.  The American Jewish Committee's (AJC) 2010 Annual Survey of Jewish Opinion found that 74 per cent of American Jews felt ''fairly close'' or ''very close'' to Israel.  This figure is entirely consistent with the findings of previous surveys done over the past decade.

The AJC survey also found that a whopping 94 per cent thought that any formal peace treaty with the Palestinians must include formal recognition of Israel's Jewish character.  A solid majority of 62 per cent also expressed support for the idea of Israeli military action to prevent Iran from obtaining nuclear weapons.

These results were largely reaffirmed by an August 2010 Brandeis University survey entitled Still Connected:  American Jewish Attitudes Towards Israel.  The study found that 75 per cent of those polled felt affection for Israel is an important part of their Jewish identity.

Brandeis pollsters also focused in the May-June 2010 Gaza flotilla incident as microcosm of larger Jewish patterns of sentiment and affiliation.  They found 70 per cent of Jews endorsed Israeli's actions during last year's Gaza flotilla incident, versus only 9 per cent who supported the pro-Palestinian cause.

Even more surprising was the finding that younger American Jews were more hawkish in their support for Israel than their older ethnic kin.  Fully 58 per cent of the 18-to-29 age bracket opposed Israeli territorial concessions in Jerusalem, compared to only 43 per cent of 45 to 59 year-old Jews.

More remarkable still was the lack of impact political ideology had on affinity for Zionism.  Fully 82 per cent of Left-leaning American Jews thought that current levels of US support for Israel should be maintained or increased, with a mere 18 per cent wanting them cut.

And it's not just Jews in the United States.  In their 2004 study of Australian Jewish political sentiment, Professors Geoffrey Brahm Levey and Phillip Mendes found extremely high levels of affection for Israel.  They wrote:  ''on almost every available measure -- visitation, resident relatives, emotional attachment and philanthropy -- Israel figures centrally in Australian Jewish identity.''

The more extreme version of the Jewish disaffection thesis peddled by Loewenstein, Docker and Curthoys is relatively easy to dismiss.  After all, these are self-avowed enemies of Zionism who oppose a Jewish state both in concept and reality.  And as we have observed, their argument flies in the face of objective polling reality.

But Peter Beinart comes at this issue from a much more nuanced direction.  Far from being a foe of Israel, he claims to be its truest friend.  In the political equivalent of an addiction intervention, Beinart wants to save ''liberal Zionism in Israel''.  This, he declares, ''is the great American Jewish challenge of our age''.

Never mind that even dovish-minded Israelis tend to be annoyed by such cloyingly sententious pronouncements from afar.  After all, if the world according to Beinart doesn't work out as expected, he'll be watching events from his New York living room on his flat screen TV.  He won't be the one putting on his uniform and reporting for army reserve duty.

Beinart's self-appointed mission to civilise Zionism is just a modern manifestation of the Left man's burden.  In a Kipling-esque exercise of patronising paternalism, he's saying that he knows better than the Israelis what's good for Israel.  If the ultimate object of Beinart's exercise is to influence Israeli policy, he won't get there by alienating his potential allies through such remote-control pontification.

Since the 1967 war, it is undeniable that Left-of-centre opinion has moved away from support for Israel towards empathy with mortal enemies of the Jewish state.  This is most pronounced amongst radical academics and rent-a-mob protestors who march arm and arm with Hezbollah supporters in street demonstrations.

But these currents have also taken their toll within the more moderate currents of the centre-Left.  And as a result, support for Israel is far less pronounced these days amongst progressives than it is amongst conservatives.

Beinart attributes that erosion to Israel's abandonment of its original sublime ideals.  He claims that it isn't he who left Zionism, but that Zionism left him.

But the true act of defection has been on the part of Western progressives who have cast by the wayside the only full-fledged democracy in the otherwise benighted Middle East.

The tragedy of Jewish progressives like Peter Beinart is that their people and their principles have never truly been in conflict.  The only real contradiction is between Zionism and a Left-wing worldview gone mad, and on that question Beinart chose wrongly.

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War enemies, not criminals

It didn't take long for the hand wringing to begin.  Within hours of President Obama's announcement that the United States had eliminated the world's most wanted man, the usual suspects began to line up to carp about process, cast aspersions on the US government, embrace conspiracy theories and muse about the morality of eliminating a terrorist leader.

They took to Twitter, Crikey, and -- dare I say it -- ABC's The Drum to laud their moral superiority.

In doing so, they lined up alongside some of the most distasteful regimes, organisations and individuals in the world.

Take, for instance, ''ethicist'', Leslie Cannold.

Cannold conveyed her displeasure at the spontaneous acts of celebration seen in front of the White House and beside Ground Zero in New York, suggesting it was little different to the ''repellent'' celebrations in the Arab street following the 9/11 terrorist attacks.

She wasn't alone.  Fairfax journalist Sarah-Jane Collins tweeted that she thought celebrating Osama's death ''diminished all of us.''

Blogger and barrister Jeremy Sear agreed, saying in a presumably sarcastic tweet, ''That mob outside the White House in no way resembles mobs in the Middle East celebrating the deaths of their hated figures.''

Actor Rhys Muldoon complained that ''This dancing around'' Osama's corpse wasn't ''the best advert for democracy.''

The professional Israel-hater Antony Lowenstein, said on The Drum that the celebrations were evidence of America's ''infantile and violence-obsessed culture.''

On the same site, Lehan Ramsey expressed her disapproval at those who thought Osama's death was ''something to dance in the streets about.''

Lawyer Kellie Tranter, also on The Drum, said she couldn't ''Pick the difference'' between American celebrations and those that occurred on the West Bank following 9/11.

Kellie, please allow me to assist.

Those who celebrated the terrorist attacks against America on 9/11 were cheering the deaths of thousands of innocent civilians, who, for the crime of simply turning up to work that day, were never to return to their families again.

This week, Americans celebrated the death of a terrorist responsible for the deaths of thousands of wholly innocent Americans, Iraqis, Afghanis, Christians and Muslims.  They celebrated the arrival of long-delayed justice to a man who appeared in grainy videos taunting the families of his victims.  They celebrated the demise of a man who believed that Americans, simply because of their place of birth, deserved to die.

And let's not forget, he believed this well before America invaded Iraq or waged war on the Taliban in Afghanistan.

To equate the expression of relief at the death of one mass murderer and the celebration of the killing of scores of innocent civilians, as Cannold and others did, is an extraordinary feat of moral relativism.

And it doesn't end there.  Cannold also suggested that in placing a bounty of US$25 million on Osama bin Laden's head, the US Government had in effect offered an ''inducement to extra-judicial killing.''

Overland editor Jeff Sparrow agreed, lamenting Osama's ''extrajudicial killing by a black ops team'', in an article for The Drum, and suggesting a civilian jury trial would have been more appropriate.

Former Equal Opportunity Commissioner Moira Rayner expressed the same sentiment, labelling the US operation an act of ''murder''.

Crikey's lead article the day after Osama's death, appeared to suggest that US Secretary of State Hillary Clinton and Australian Foreign Minister Kevin Rudd, ''two life-long opponents of the death penalty'', were somehow inconsistent in praising the ''extra-judicial killing of an unarmed man.''

Yet only last week, Crikey's own Bernard Keane was writing that the United States' failure to capture or kill Osama bin Laden was evidence of their ''breathtaking incompetence.''

These detractors were joined in their concerns by the worst elements of the international community, such as the radical Muslim Brotherhood.  Condemning the ''assassination'' of Osama bin Laden by the US, they noted that they were ''in favour of trials''.  The Council on Foreign Relations has documented the group's links with terrorism.

Hamas too was outraged at the successful American mission against bin Laden, describing him as a ''holy warrior''.  Antony Lowenstein has previously called for ''immediate engagement with Hamas'' as part of the Israeli-Palestinian peace process.

Clearly, these critics fail to see our conflict with Al Qaeda and its associates for what it is:  a war.  They cringe at the thought of treating Osama and his ilk as an enemy combatant -- where their dreams of ''due process'' would not apply -- and instead simply think of them as criminals that deserve a jury trial and the presumption of innocence.  Osama bin Laden is no more entitled to a court-appointed lawyer than the Taliban fighters who engage Australian, NATO and US troops in gunfights in Afghanistan and die in the process.  While the modern battlefield may not fit their academic preconception of soldiers in uniforms, that doesn't mean that we aren't at war.

Bob Ellis, who probably would have been well advised to cease writing for public consumption years ago, wrote a piece for The Drum laced with conspiracy theories that harked back to JFK's assassination.

Former Guantanamo Bay detainee Mahmdo Habib is on a unity ticket with Ellis, telling Sky News that he didn't believe Osama was dead.  He also said there was ''no evidence he was a terrorist''.

Their concerns are also shared by the Iranian regime, who have serious doubts about whether or not Osama is really dead.

Others, like journalist Robert Fisk, a staunch opponent of the wars in Iraq and Afghanistan, leapt into the debate to assure us that Osama's death was ''pretty irrelevant''.

Not so, according to Greens leader Bob Brown, who said Osama's killing ''strengthens'' his view that Australian troops should be withdrawn from Afghanistan.

Given Brown and the Greens supported withdrawing troops from Afghanistan last week, last month and last year, one could be forgiven for being cynical at their claim that this event is somehow a game changer that requires a new policy from the Australian Government.  Perhaps -- just perhaps -- this was instead a case of Brown and the Greens attempting to find justification for their beliefs in a recent event, and even piggyback off its associated media coverage.

In an eerie coincidence, Iran -- also not know for their support for the liberation of Afghanistan -- agreed with the view of Senator Brown and the Australian Greens, also seeing this as a great time for coalition troops to withdraw from the Middle East (as did the Muslim Brotherhood).

What these critics appear to share in common is an abiding anti-Americanism.  In their eyes, America can do little right, and its every move should be treated with suspicion.  Perhaps it explains their willingness to embrace the maddest conspiracy theories, and their ability to on the one hand believe America is incompetent for failing to capture or kill bin Laden, and immoral for doing so and being pleased about it.

The world is a better place without Osama bin Laden, thanks to America.  Many can't help but find fault in President Obama's actions, but I for one am grateful.

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That's not a tough budget -- this is a tough budget

You might have picked up a theme in Wayne Swan's fourth budget.  It was tough.  How do we know this?  Because the government told us so.

In a major pre-budget speech, Treasurer Wayne Swan said ''tough decisions are required'' and ''this will be a tough Budget''.  Finance Minister Penny Wong, in an interview in the lead up to the budget, used the word ''tough'' more than ten times, including four times in one answer.

But did the reality match the rhetoric?  In his budget speech, Swan announced $22 billion in ''savings'' over the next four years.  Yet much of those so-called savings are actually tax increases like the flood levy, and regardless, they have been almost completely offset by increased spending in other areas.  They've been roundly criticised already for failing to deliver a tough budget.

So what would a really tough budget actually look like?

Here are eight government programs that could have been easily cut and helped return the federal government to surplus earlier:

1. Set top boxes for pensioners:  As David Penberthy wrote yesterday, this one is a no-brainer.  If times are as tough and resources as limited as the government argues, can we really spare well over $300 million on retro-fitting old TVs for pensioners?  Many, if not all, would have bought set top boxes of their own -- for as little as $50 -- or new digital-compatible TVs before the analogue switch off in 2014 in capital cities.

   Savings:  more than $300 million over four years.

2. The Automotive Transformation Scheme:  Governments of all political stripes are guilty of subsidising domestic industries for political reasons and this government is no exception.  For years, the Australian car industry has soaked up literally billions of dollars of taxpayers' money because it often can't compete with international competitors.  But we learnt decades ago that protectionism does not pay in the long run, and these subsidies are an unnecessary cost to the budget.

   Savings:  approximately $650 million over four years.

3. Buy Australian Campaign:  Like the Automotive Transformation Scheme, this is another brainwave from the Innovation, Industry, Science and Research Department.  This multi-million dollar program encourages Australian businesses to buy other Australian businesses products and helps them work out how to sell their products.  If you need a federal government program to work out how to sell your products, perhaps you shouldn't be in business.

   Savings:  approximately $35 million over four years.

4. Harmony Day:  You can thank the former Howard Government for this Orwellian-sounding program which splashes around taxpayers' cash in the aim of creating community harmony.  Sure, community harmony sounds like a nice thing to have, but do we really think it will be delivered via federal grants?  Some of the projects which have received cash in the past sound like jokes from a late night TV show -- such as the $50,000 grant given to the Australian Wrestling Federation to encourage wrestlers not to sledge each other.

   Savings:  Harmony Day is just one of the Immigration and Citizenship Department's ''diversity and social cohesion'' programs.  Cutting all of them could save up to $300 million over four years.

5. Public servant hiring freeze:  In 2010 the Coalition estimated that a freeze on public service hiring, without sacking existing workers, could save the budget billions.  Given the massive expansion of the public service in recent years, it seems reasonable to assume the wheels of government would keep turning without hiring new employees.

   Savings:  up to $3.8 billion over four years.

6. Community Cabinets:  Did you know that this government road show receives $10 million in funding each year?  Pioneered by Kevin Rudd, these Cabinets have clearly been used for political purposes and have no business being funded from our taxes.

   Savings:  $40 million over four years.

7. Youth engagement:  As a young person, you may be surprised to hear my life did not change when the Office for Youth was established in 2008.  Nor is it enhanced today by the Australian Government's Youth Engagement program.  I think most young people will find a way to survive without it.

   Savings:  at least $30 million dollars over four years.

8. International climate change negotiations:  If you thought that international climate change negotiations were a fruitful exercise, hopefully the debacle at Copenhagen disabused you of that notion.  Yet the government is still planning to spend millions of dollars in the vain hope that a massive team of Australian bureaucrats attending these international conferences will affect the outcome.  Instead, Australia could send a skeleton team to future negotiations.

   Savings:  approximately $60 million over four years.

These proposals, totalling more than $5 billion over the next four years, merely scratch the surface of wasteful government spending.  Importantly, none of these are radical measures.  No departments would be closed, and health, defence and education spending would be preserved.  But the federal government's bottom line would be much healthier.

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Ignoring the deficit: disappointingly predictable

Is there any less edifying event in Australian politics than The Budget?

Each year the Treasurer offers a seemingly arbitrary smattering of policy adjustments and spending programs.

This year the Family Tax Benefit A has been extended.  Small businesses will be able to write-off $5,000 of new car costs.  Free set top boxes for pensioners.  Trades apprentices get a $1,700 bonus on completion.  Former prisoners of war get another $500 a fortnight.

Check them off:  families, small businesses, pensioners, apprentices, Our Boys.

Some of these have obvious merit, some obviously not.

In his mind, Wayne Swan is the government's hard man.  But giveaways do not bring to mind the toughness he wants to project.

In 2010, a tough and ''no frills'' budget included a 50 per cent tax discount for the first $1,000 of interest earned on savings.  The low income tax offset was increased to $1,500.  Government superannuation top ups for people earning $37,000 or less.  Small business write-offs for assets worth less than $5,000.  More money for veterans.  More money for renewable energy, skills, and rail.  More money for elite sport.

No frills there.

In 2009, another ''tough budget'':  Tax concessions on super contribution reduced from $50,000 to $25,000 a year.  The small business tax break on assets increased 50 per cent.  First home grants boosted for another six months.  Pension payment increases.  Supplements for carer payment recipients.  More money for pretty much everything.

In 2008, a ''tough but fair budget''... anyway, you get it.

It's a bit rich to describe a budget as tough if it includes free electronics.

Nevertheless, the budget process itself encourages uncoordinated and haphazard policymaking.

After all, the budget is not just an annual restatement of the government's financial health.  It is the centre of the policy process.  It is clearly unsuited for this role.  The budget is not a great frame in which to develop public policy.

Government departments submit ambit claims, ministers push hard for programs which could demonstrate they've achieved something, and everything gets filtered through a political mesh, packaged into ''deliverables'' and rolled out in leaks.

Then the Treasurer tries to teeter between generosity and hardheadedness, prepare a speech, and try to place himself at the symbolic heart of the government.

Any substantial policy reform gets quickly subsumed into the budget spectacle -- one thing must be offset by another, and spending reductions become only justifications for further spending in other areas.  The only purpose of savings is for more spending.

Take the government's dignity-of-work welfare changes, which are as much about savings as they are about reform.

As Alan Kohler pointed out on Tuesday night, $21.7 billion worth of savings in this budget was matched with $18.9 billion in new spending.  Cuts made while spending added; programs expanded while other programs reduced.  That's policy churn -- the sort of fiddling which makes the tax code blossom and keeps accountants in business.

At its best the budget process results in incremental approaches to policy issues.  At its worst, a ballooning of under-resourced and utterly ineffective programs.  $34 million dollars to help manufacturers supply resource projects?  This is surely too low a figure to achieve its ambitious goal, yet too high to be dismissed as trivial.

No wonder budgets marketed as tough come off as indecisive.

The pressures of budget time are not conducive to coherent policy.  But on the other side, the budget spectacle -- the May policy dump -- has made it hard to strongly confront fiscal problems when they arise.

2011-12 is yet another budget in the expanding shadow of the global financial crisis.  The decisions made by Kevin Rudd, Wayne Swan, Lindsay Tanner, and Ken Henry in a few critical months still dominate the fiscal landscape.  (Julia Gillard may have been in the famous ''kitchen cabinet'', but according to Lenore Taylor and David Uren in Shitstorm, she was in the outer kitchen cabinet.)

Three out of those four -- Rudd, Henry, and Tanner -- have now left the economic policy stage.  Swan is now the sole custodian of the government's crisis legacy, and the man who has to live with its consequences.

The Treasurer has not seriously attempted to tackle the stubbornly growing budget imbalance which resulted from his decisions nearly three years ago.  Instead, he's relied on Treasury forecasts about a possible revenue surge in the future.  That surge keeps being postponed while the target to return to surplus gets closer and closer.

The government is playing chicken with the economy, hoping revenue will catch spending before the self-imposed 2013 wall.

It may -- perhaps Treasury's projections are right this time -- but would you really want to bet on it?

Our economy faces the world.  What happens in China, or the United States, or Europe, makes a big difference to our terms of trade, our dollar, and ultimately the government's revenue.  And the last few years have been some of the most volatile in the global economy in the last few decades.

In this environment, Wayne Swan cannot be comfortable gambling his reputation on the reliability of Treasury projections.

We could shout ourselves hoarse asking Swan to put those projections aside and to take positive measures to reduce the deficit.  The Treasurer might, if he wanted to, cut spending deep and hard -- a good idea whether the budget is in the red or the black.  But there's no real demand for an Australian age of bureaucratic austerity.

So the government's reluctance to face its deficit is predictable, if disappointing.

Without the support of his crisis co-conspirators, Swan appears to be hoping the budget will just fix itself.

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The trouble with ''taxeaters'' (aka middle-class welfare recipients)

Thinking about tax policy gives individuals the opportunity to devise their own ''great society''.  As economics laureate James Buchanan explains ''Many economists, along with other social scientists and social philosophers, enjoy playing God, by which I mean laying out in detail their own private versions of the ''good society'' without being required to suggest ways and means of implementing their precepts or even to defend the consistency of these precepts with democratic political processes.''

UCLA economist Harold Demsetz warns of nirvana policy mistakes when playing God.  People engaging in nirvana policies make three mistakes.

First is the belief the grass will be greener on the other side, second a belief in free lunches and third, people could be different.  Anyone proposing policy that relies on any of these nirvana views will be disappointed.

Tax debates often revolve around people being different.  Can people be different?  Probably not.

In tax debates there are all sorts of conflicting visions of humanity.  Those who prefer lower levels of taxation are pilloried as being selfish, anti-social, greedy, and the like.  While the beneficiaries of taxation are described as the poor, the disadvantaged, the disabled, and so on.

Libertarians have a wonderful term ''taxeater'' to describe the beneficiaries of taxation.

There is a lot of angst and discussion about the need to cut ''middle-class welfare'' and the failure of government (any government) to do so.  Deirdre McCloskey explains why this is so;  the median voter has become a taxeater.

That isn't what we normally imagine.  Most people think that government exists to provide public goods and welfare to the poor and needy.  Most government programs are designed to benefit the middle class;  economists have formalised this idea as ''Director's law''.

McCloskey demonstrates this with a very simple example.  She asks if one-quarter of the US government tax take went to poor Americans how much money would they receive.  Some back of the envelope calculations show that each poor American would receive US$30,000 -- for a family of four that would be $120,000.

In other words, there would be no poor people if government was really redistributing income to the poor.

Is there an equivalent Australian number?  This coming financial year the federal government plans to raise $342 billion and spend $362 billion.  Assuming the Smith Family are correct and about 13 percent of Australians live in poverty, the McCloskey calculation for Australia is about $28,500 per person.

Putting that number into context, the federal government spends more than 25% of its budget on welfare.

The biggest beneficiary of taxation is government employees and the middle class -- home of the median voter (and, dare I say it, university professors).

The tax churn that Peter Saunders, of the Centre for Independent Studies, so eloquently warned us about is no longer a bug in the tax system;  it is a feature of our democracy.

Many voters believe they are getting a bargain from the government (and given the distortions in the tax system, they very often are getting a bargain).

Voters are victims of fiscal illusion -- a set of strategies that the state adopts in the hope of altering voters' fiscal consciousness.

In particular the state hopes to convince voters that the tax burden isn't nearly as onerous as it is, while the benefits of public spending are greater than they are.

Those who complain about excessive middle-class welfare and the need to cut it out are quite right;  it is wasteful and unnecessary.

But they seldom offer coherent strategies, beyond vague references to ''leadership'' and ''the need for tough decisions'', to convince the middle class, and the median voter, that they need to pay more tax or use fewer government services.

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For budgets only smaller is tougher

Prime Minister Julia Gillard and senior Ministers such as Treasurer Wayne Swan and Finance Minister Penny Wong have warned Australians of a ''horror'' 2011-12 Budget.

To prove their point the federal government has trialled selective spending reduction options in the court of wider public opinion over the past few weeks.

Last month media reports suggested that the government would reduce the level of funding to the National Health and Medical Research Council, which provides research and development grants for cancer prevention, cardiovascular problems and public health, by $400 million.

The Health Minister Nicola Roxon has not exactly doused such speculation on the basis that ''every single dollar that we put into the health system has to be constantly assessed to see if it's being spent in the most efficient and effective way.''

Next on the announced list of unpleasant budget ''medicine'' were reports that the government would impose additional measures to reduce access to the Disability Support Pension, whose number of beneficiaries has exploded from 577,700 people to 757,100 over the last ten years.

In another missive to break the back of welfare dependency, the Gillard government has recently announced that up to 11,000 teenage parents on welfare will be forced to attend education and training as a means of securing future employment.

Unsurprisingly, the interests directly affected by these expenditure rationalisation proposals have fiercely castigated the suggestion that even a single dollar should be removed from their favoured budget allocations.

Medical researchers have already engaged in public protests in capital cities to boost public sympathy for the expenditure status quo, while the welfare lobby has publicly labelled the measures as ''punitive'' infringements against the rights of welfare recipients.

When it comes to medical research funding, it is difficult to accept the argument that a dollar of taxpayer funded research expenditure on every occasion yields economic benefits of many multiples in excess of the original investment.

Within this there are legitimate questions to be asked concerning the relative efficiencies of private and government investment in medical R&D.

It should also be evident that singling out medical research cuts, which constitute only 0.08 per cent of total commonwealth general government spending, is little more than a diversionary exercise when there are much larger sources of expenditure to also prune back.

More promisingly the government is correct to identify the need to reduce welfare rolls that would foster labour force participation and, as a consequence, economic growth in the longer term.  There is also growing community recognition that welfare passivity is correlated with a range of economic and social pathologies, and thus needs to be urgently addressed.

However there is the prospect, at least in the short term, that the government may end up expending additional funds either upon potentially ineffectual education and training programs for welfare dependents or, worse still, on additional bureaucrats to oversee the changes.

The far greater question that can only be answered in this week's Budget is whether Prime Minister Gillard and Treasurer Swan are prepared to go much further and instigate meaningful expenditure reductions to ratchet down the size of the commonwealth government.

I suspect that, on this score, we may be heading for disappointment.

When it comes to some of the expenditure cuts already identified, or speculated upon, it is possible that the government is gearing up to play the old political trick of announcing less severe cuts, or none at all, on Budget night, in an effort to boost its flagging electoral popularity.

One can also expect the Budget to contain its fair share of fiscal gimmickry, including the conflation of revenue increases, such as the flood levy piggybacking the personal income tax structure, as budget ''savings''.

Similarly, the Budget papers might also include ''phantom'' expenditure reductions such as the recent announcement that the Defence Department will be required to cut 1,000 intended, but yet to be filled, vacancies over the next three years.

Even before the Treasurer rises to his feet on Budget night, the government's self portrait as a tough budget taskmaster will also be cruelled by a cash splash of election promises expected to total more than $540 million over four years.

More fundamentally, it is doubtful that this government has the political constitution to cut back the size of the public sector to any great extent when that could incur the wrath of its public sector union voter base and reverse its own legacy of big spending.

During 2008-09 the Rudd government spent an unprecedented $80 billion over the forward estimates in an effort to avert an Australian recession during the global financial crisis (GFC).

In that year federal government payments blew out to $316 billion, an increase of $44.2 billion on the previous year.  This included the extra public servants to oversee the GFC fiscal stimulus, as well as the fulfilment of 2007 election promises.

Adjusted for inflation this spending outcome was equivalent to a staggering 13 per cent increase, which has only been exceeded by Whitlam's 1974-75 budget which increased its expenditure levels by 20 per cent compounding the bitter effects of stagflation.

Any allusions that the government would maintain a fiscally conservative stance, as promised by former Prime Minister Kevin Rudd during the 2007 election, were greatly diminished as a result of its big spending venture.

In any case it is unclear that the government's appetite for additional expenditure, largely financed by public borrowing, to stimulate private demand was an appropriate response to what were a series of economic dislocations engendered by distortionary regulation overseas.

As chronicled in the recent book Robust Political Economy by Mark Pennington, the GFC followed from government interventions that exacerbated the potential for systemic failure in financial markets.

These included the maintenance of interest rates below their natural rate by central banks, regulations which relaxed home purchase lending requirements for low income earners, capital regulations that encouraged banks to securitise risky mortgages, and the creation of legally protected monopolies in the credit rating business.

After having engaged in wasteful expenditure adventurism, including $900 stimulus cheques, the costly school halls program, the tragic home insulation subsidy, and questionable community grants to local governments, the government is looking to forge a new reputation as ''symmetrical'' Keynesians who can now deliver a budget surplus as the economy grows as astutely as they deliver a deficit as the economy slows.

However, it is abundantly clear that the government has not achieved this outcome even on their own terms.

In 2008-09 the commonwealth Budget transitioned into a $27.1 billion deficit, compared to a $19.7 billion surplus the year before under John Howard and Peter Costello, in response to what turned out to be only one quarter of (seasonally adjusted) negative GDP growth in 2008.

The Australian economy has grown ever since, admittedly at less than potential partly due to the adverse consequences of fiscal stimulus upon the structure of production, and the Budget papers will also certainly estimate that growth will continue over the forward estimates.

By the time that the government delivers its projected surplus by 2012-13, the Budget will have been dragged through four consecutive fiscal years of deficit not to mention an upsurge in net debt.

To put it simply, four years of deficit and debt in response to one quarter of negative GDP growth is inconsistent with achieving fiscal symmetry over the business cycle.

What the government does not appear to sufficiently recognise that its ''sticky'' budget deficit is compounding economic difficulties presently being felt by industries and households alike.

For a start a growing budget deficit, all other things being equal, places upwards pressure on interest rates, which most economic commentators now suggest is the most likely direction for monetary policy.

In a global economy with open capital markets an increase in domestic interest rates induces capital inflow which in turn leads to an exchange rate appreciation.  This trend dampens the international competitiveness of Australian tradeable sectors, such as tourism and the like.

There is also the risk that excessive public expenditure leads to inflationary pressures throughout the economy as government purchases of additional labour and other inputs compete with private sector requirements.

The ultimate test for the Budget is the extent to which it reduces major government programs, particularly public consumption expenditure and welfare transfers, rather than implementing sham cost savings at the margin that do practically little, if anything, to trim a budget locked in structural deficit.

Based on a reading of the domestic and international evidence, it would be a misnomer to suggest, as the defenders of the big-spending status quo often do, that a permanent reduction in the government expenditure to GDP ratio would have disastrous consequences for economic performance.

Recent comparisons of historical fiscal consolidation efforts by economist Alberto Alesina found that budget deficit reductions centred on spending cuts tended to avoided economic downturns as opposed to deficit reductions based upon tax hikes.

The relatively benign, if mildly expansionary, effect of expenditure reductions comes about in these scenarios because of the abolition of government programs and initiatives that fail to add value to economic productive capacity.

It is also naïve to suggest that governments that cut deeply into spending will lose electoral support.

The Coalition government led by John Howard won the 1998 election after a first term punctuated by significant reductions in expenditure and the size of the public service, with the GST often blamed for Howard's narrow win.  Transitioning the commonwealth Budget back to surplus didn't seem to pose as an electoral liability for the Hawke government, either.

And didn't Kevin Rudd seek to neutralise the traditional perception of Labor as a poor fiscal manager by stating clearly during the 2007 election campaign that reckless spending needs to stop?

If the Gillard government is lacking fertile ideas for reducing government spending back to Howard era levels, or more desirably to pre-Whitlam levels, it need only pay closer attention to the array of expenditure functions that:

(a) do not meet the standard economic definition of a public good, implying that the private sector can play a relatively greater role in profitably delivering services;

(b) is not contained as a head of power under Section 51 of the Constitution;

(c) in the case of social security, where cuts will foster greater individual responsibility, self-reliance and the redevelopment of a strong non-governmental charitable and benevolent services sector;  and

(d) in the case of other core commonwealth functions, such as defence, where greater spending efficiencies are not only identified but implemented at the earliest possible opportunity.

The application of these principles, some of which were contained in the 1996 National Commission of Audit report, should not only restore sustainable Australian public finances but deliver wider benefits such as fostering the growth of efficient markets and the revival of a strong civil society.

As an added benefit the government would not have to resort to punitive new taxes on carbon dioxide or mining activities to plug the existing fiscal gap but at the expense of our international competitiveness.

Only time will tell if the 2011-12 Budget contains such a plan to turn the crisis of a self-induced multi-year deficit into an opportunity for a significantly smaller public sector in the public interest.

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An illiberal cause

The O'Farrell government should repeal Labor's undemocratic campaign finance laws.

Among the final and most cynical acts of the Labor government of NSW was a bill to rig the campaign finance system in its favour.

In November last year, with the help of the Greens on the Legislative Council, NSW Labor passed sweeping reforms which restricted electoral donations and spending, as well as campaigning by independent political and community organisations.

Reforms included spending caps for political parties in each seat and caps on donations by individuals and companies.  The legislation also limited statewide spending by third parties, including unions.  While union affiliation fees to the Labor party remained, the ALP assured us none would be spent on campaign activities, just ''party administration''.  Any shortfall in party funding was to be made up with massively increased public subsidies.

Inexplicably, particular industries were singled out for bans, including tobacco, alcohol and gaming.  This is in addition to bans on property developers.  The list appears to have been drawn up to target businesses the Greens hate the most, so no one should be surprised if logging companies, miners and anyone selling fatty fast foods are added to the list in the future.  You never know, even companies that do business with Israel could be added next!  Obviously, wholesome industries like the renewable energy sector remain free to donate, though given their profitability is almost entirely reliant on favourable government regulation and subsidies, it's nothing short of hypocrisy they were left out.

As a result of the reforms, NSW is left with a hideously complex set of regulations which are a compliance nightmare and substantially tilt the playing field in favour of parties of the Left.  For example, the $1 million cap on political spending by third parties theoretically allowed each of NSW's 22 unions to spend a total of $22 million campaigning for the ALP, while at the same time reducing the amount the NSW Liberal party could spend on its own candidates.

Campaign finance reform is currently a fashionable political cause in Australia.  Academics, broadsheet newspapers and many politicians advocate drastic changes to the way our election campaigns are financed.  It's puzzling that numerous Liberal MPs are among these advocates, given the tendency of these reforms to disadvantage the Liberal party and the philosophically illiberal nature of the extensive regulation that accompanies them.

Among their number has been NSW Premier Barry O'Farrell, who is a longstanding supporter of campaign finance reform and has publicly advocated outright bans on donations from companies and unions.

While it is clear former Premier Kristina Keneally and the Greens delivered a bastardised version of O'Farrell's plans, it remains true that the political climate was made favourable towards radical reform in part because of urgings by Liberals.  This bitter experience should serve as a warning for other Liberals about the perils of supporting campaign finance regulation.

Many Liberal MPs, understandably, do not enjoy raising money.  Some genuinely think reform would make our political system healthier.  Others hope it will curtail the outsized influence unions have on the political process.

This is fundamentally misguided.  For a start, unions derive only some of their influence from their financial might.  At least as much, if not more, comes from their historical and cultural links to the ALP, their positions of power on its executive and their control over preselection.  Removing union donations will not end union influence.

It might, however, reduce business influence in politics.  Many companies buy a seat at the table of both major political parties through their donations.  It doesn't guarantee them a favourable decision, but it does help them to be heard.  Ending donations from both businesses and unions could end one source of often sensible influence on political parties in the name of economic reform.

But this is just one of the reasons Liberal support for campaign finance regulation is misguided.  Another is its utter incompatibility with liberal philosophy.  For example, with what do reformers propose to fill the gaps left by reduced private fundraising?  Your taxes, of course.  Aside from the fact that there is a long list of better ways to spend this money -- returning it to taxpayers through tax cuts being just one -- political parties should realise that increased public funding is a double-edged sword, at best.

Political parties already test the patience and goodwill of voters at election time by clogging their letterboxes with campaign literature and bombarding them with television and radio advertisements.  Imagine how tolerant voters would be if they knew they were paying for almost all of it.

And if political parties rely on a substantial proportion -- perhaps even a majority -- of their funding coming from the public purse, they will struggle to resist calls for greater government interference in the running of their internal party operations.  Don't be surprised when activists start calling for affirmative action in Liberal preselections, or secret-ballot elections conducted by the AEC for internal ALP elections.  If political parties are funded like public service departments, they can expect to be treated like them.

The US's experience of campaign finance reform demonstrates the most fundamental reason why Australian policymakers should reject the regulatory approach:  it doesn't work.  Attempts to restrict donations from companies and to place strict limits on the donations of individuals have dismally failed.

Today in the US, instead of companies donating to candidates, all their top executives do.  Unions and companies also donate to, or even set up, special advocacy organisations which can receive almost limitless donations which are then used for political campaigns.

Attempts to restrict their activity have meant they've simply changed the style and language of their commercials.  For example, instead of advocating a vote in favour of or against a sitting congressman, these lobby groups will run ''issue advocacy'' campaigns that highlight all the tax increases the congressman voted for or funding for education they voted against.

What all attempts to regulate campaign finance, both here and overseas, appear to overlook is that individuals, companies and unions will always seek to influence a government that intervenes in society and the economy.

While governments hand out subsidies and regulate industries to the benefit of some and the cost of others, people will always seek to influence them for their own benefit.  For many companies, favourable government decisions are the difference between profit and loss.  Securing government contracts, favourable regulation and financial assistance is as important in some industries as a good marketing or efficient HR.

Regulating the ways in which individuals and others can donate to parties will not make donations go away.  If reformers really want money out of politics, their best course of action would be to pursue a smaller government that treads more lightly regarding society and the economy.  Big government will always attract influence-peddlers.

Campaign finance regulation hurts the Liberal party, is inconsistent with liberal philosophy and does not even achieve its goals.  Sadly, the early indications from the new NSW government is that it favours an even more regulatory approach, by banning all party donations from third party groups such as unions.  They would be better advised to opt for a neutral donations system with minimal regulation.

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Paternalism enshrined

One central point is missing from the discussion about the federal government's proposed changes to the regulation of financial advisers.  The best judges of the clients' best interests are the clients themselves.  It's the clients' money -- not the government's.  It's none of the government's business what arrangements clients and their advisers freely agree to.  There's no problem with the government regulating to ensure transparency, but that's an entirely different matter from dictating what sort of financial advice clients are allowed to buy from their adviser and how they are to pay for that advice.

If a client wants to pay for their financial advice through instalments deducted annually from their superannuation account, the government has no role telling them they shouldn't be able to do so.  Yet this is exactly what the government wants to do under the guise of its Future of Financial Advice reforms.  Advisers will be forced to offer their services for upfront, lump-sum fees.  All this will do is discourage people from going to see a financial adviser.  Only 20 per cent of Australians use a financial planner, and this figure will now probably fall.

The suggestion that clients be forced to ''opt-in'' every two years to the advice they receive from their adviser is a classic example of nanny state paternalism.  A basic practical problem is that of the paperwork burden and compliance costs of such a requirement.  People should be free to opt in to advice for as long (or as short) as they like.

The supposed justification for these changes is that they are necessary to restore trust in the way financial advice is provided after the well-publicised failure of companies such as Westpoint, and Storm Financial.  This is a furphy.  The collapse of these companies were isolated instances and existing laws are more than adequate to deal with the consequences of their failures.

An unkind interpretation of the government's motivation for the introduction of these changes is that it's part of a broader agenda to advantage industry superannuation funds over the ranks of retail funds and self-employed financial planners.

Industry funds don't rely on commissions to the same extent as retail funds.  Industry funds have their privileges enshrined in the industrial relations system, whereby if an employee doesn't nominate a preferred superannuation scheme the industry fund is the default option under industrial awards.

This admittedly cynical interpretation could have been allayed if, at the same time as the government had announced its review of financial advisers, it had announced a similar review of what retail and industry superannuation funds do.  But it didn't.  As was revealed last year in the research paper Keeping Super Safe, ''opaque'' is perhaps the best description for the level of disclosure from many superannuation funds.  In a number of cases it is practically impossible to gain access to information about matters such as management fees and remuneration levels.  And as yet no one has challenged government and superannuation funds on whether it is appropriate for funds to be investing in infrastructure projects, for example, at the behest of the government of the day.

It's not only the Gillard government that believes people can't be trusted with their own superannuation.  Regulators have the same mindset.  Last year Jeremy Cooper, who headed the inquiry into the superannuation industry, said he'd be worried if there were too many self-managed superannuation funds because as more people managed their own money there would be more people who didn't know what they were doing.  If you thought it was a general objective of government and regulators to empower as many people as possible to manage and take responsibility for their own money, you'd be wrong.  Cooper said:  ''If you continue to increase the population [of trustees] so that it is more reflective of the population in general, I can see the model no longer working.''  The logical conclusion of that argument is truly frightening.  If regulators are so worried about people not being equipped to make the right financial decisions about their future, then there's no logical reason to stop at super.

The decision of an individual to buy a house, for example, is potentially no less financially significant for them than how they manage their superannuation.  On Cooper's reasoning we'd be banning those deemed ''financially illiterate'' from purchasing real estate or investing in shares or even running their own business.

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It's Friday. Are you even aware of what else today is?

Most of us should be pretty happy it's Friday -- even if it means the end of Tourette Syndrome Awareness Week.

(Tourette Syndrome is never, ever funny.  Not even in this clip.)

If you didn't know, it's actually an inherited disorder involving ''tics'' but for most sufferers it doesn't involve involuntarily saying four letter words that begin with ''s'', ''f'' and occasionally ''c''.  Nor is it probably how namesake George Gilles de la Tourette probably expected to be remembered in history.

But what purpose does Tourette Syndrome Awareness Week actually serve?  More to the point what do Awareness Days, Weeks and Years provide, period?

Awareness Days/Week/Years no doubt started out as a celebration of things that matter.

In 1959/60 the United Nations established the World Refugee Year in the wake of nearly a quarter of a century of war-related migration.

And 1978 celebrated International Anti-Apartheid Year, which sent a pretty clear message to the government of South Africa.

But by 1992 the UN was already clutching at straws by endorsing International Space Year.

And by 2008 they'd tired of space and decided it was the Year for Planet Earth, along with the Year for everything else including Sanitation, Languages and the Potato.

I understand the big pumpkin lobby was pretty pissed about the last one.

And it goes well beyond the UN with Google supporting 2007's Geography Awareness Week which, call me cynical, probably coincided about the same time they were setting up Google Maps.

And then there's Wound Awareness Week to draw attention to the issues facing people with, well, wounds.

Despite my best Googling skills I haven't found much evidence that naming days, weeks or years achieves very much.

After all, while Tourette Syndrome Awareness Week sunsets today, according to the Department of Health, so do National Mothering Week and Motor Neurone Disease Week.

And by Monday we're already in World Homeopathy Awareness Week, Diversional Therapy Awareness Week and Allergy and Chemical Sensitivity Week all enveloped in Neurofibromatosis Awareness Month during the International Year of Forests. 

What they do is provide a focus for awareness activity like tomorrow's conference under the witty banner ''X Don't get cross ... Because I tic!'' which, for a $55 registration fee ($45 for members), you get some lectures and a DVD and brochure ''What is Tourette Syndrome?''.

By comparison, events supporting World Hug Day (21 January) are pretty self explanatory.

No doubt branding plays a big part in their success.  For example, EB Awareness Week uses in its advertising images of a teddy bear with a face made out of a cactus -- apparently that's what a teddy bear feels like for a kid with the rare skin disease Epidermolysis Bullosa.

I suspect it's far more effective branding than the Australian Division of World Action on Salt and Health, or AWASH, and their celebration of Salt Awareness Week with its insightful branding ''Danger, Watch out for SALT''.

All jokes aside, these Days/Weeks/Years clearly matter to the people involved.

As someone who works in intellectual property policy I celebrated World IP Day yesterday.

Unsurprisingly I doubt many others were as excited as me and opened a few geographical indication-protected champagne bottles in celebration.

Well actually it was more like trademarked Coke Zero cans.  But you get the gist. 

Because while some days are there for celebration, many are about serious diseases that one day might affect you, which is why we should probably all celebrate July's Continence Awareness Week.

Be afraid: criminal counterfeiting is on the rise

In between the death of one of the world's best known unregistered trademarks being assassinated by the US and the copyright commons text of the forthcoming Federal budget released next week I know you're all celebrating World Intellectual Property Day today.

But the annual celebration of events run by one of the few government agencies making a profit, IP Australia, does justify pause of the importance of IP as an economic driver.  Or as the case may be -- how it can not.

Over the past few years our government has managed to do something right and act to stop the international trade of counterfeit and pirated that undermines artists, innovators, and, let's face it, legitimate big corporations of their money by negotiating a new treaty.

And under the negotiating skills of Trade Minister, Craig Emerson, and his team the Anti-Counterfeiting Trade Agreement that focusing on enforcement against the illegal commercial IP trade, is coming up for the final all clear by the government.

Such a treaty might seem trivial, but the economic value of IP protected goods that are stolen adds up quickly.

Australian government commissioned reports have compiled data equating the trade to at least $1.8 billion in lost economic activity annually.

But as something that goes on in the black market it's likely to be a lot higher.

Internationally a 2009 OECD study totalled the global trade of counterfeit and pirated good up to USD$250 billion, and that's without goods bought and sold within countries and stolen stuff over the internet.

So you know those really cheap DVDs of movies that haven't been at the cinema yet that you bring back from boozy beach holidays in Bali or Phuket?  They're someone's copyright nicked.

That ''Rolex'' watch your dad bought back from his recent trip across the border into mainland China from Hong Kong only carries one trademark -- dodgy.  But take a deep breath.  They're not the focus of the treaty.

Instead it focuses on the guys who sell them to you and take your dollars from the real economy into the black market costing jobs and improvements in international economic and social welfare.

Worse, instead of 20th Century Fox and Rolex paying more tax, the money goes to guys who know the best form of tax minimisation is never to declare an income in the first place.

That means everyone actually working for a living pays a higher tax share instead.  And the people profiteering aren't your old school mates who burn dodgy discs from their wonderful unlabelled music and movie collection.

Increasingly the profiteers are criminal gangs who use it as a good source to collect cash to fund their other undesirable activities.  These may appear to be absurd claims by the OECD, but when you think about it if you've had all your bank accounts frozen by foreign governments you're likely to turn to the cash economy producing products where replication costs are disproportionately low to the final sale price.

And the trade is on its way up.  The latest Customs Annual report highlights that there's been a 40 per cent increase in notices against illegal trade in the past few years.

These groups also aren't limiting themselves to music and movies, and instead focusing on things that affect your health including producing fake patented and generic medicines that don't always include the ingredients you need, but are mislabelled under a trademark name you trust. It's the same problem with the staggering 68 million counterfeit cigarettes seized last financial year by Customs.

Then there are the really important things.

Customs recently reported there's been ''a noticeable trend ... [in] the significant amount of counterfeit beer detected''.  It's unlikely they meant Heineken you thought was brewed in the Netherlands but actually only came from Sydney under a licensing agreement.

Fortunately the final text of the treaty doesn't require Australia to change any laws and just helps improve Australian IP owner's protection in other countries, as well as encouraging greater international cooperation between enforcement agencies.

So as long as the treaty focuses on making sure that stubby you open includes the correct ratio of hops and barley most Australians should probably toast their support on World IP Day.

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The nanny state is coming ... for your democratic soul

Is saying ''nanny state'' just a cheap slur?

The term was coined in The Spectator in 1965 and clearly bears the marks of that publication and that era.

I have in my collection half a dozen academic papers published in public health journals decrying its use:  ''The nanny state fallacy'';  ''No need for nanny'';  ''Nanny or Steward?'';  ''Medical police and the nanny state:  Public health or private autonomy?'';  and so on.

One, co-written by a prominent member of the Rudd government's Preventative Health Taskforce, Mike Daube, compares ''nanny state'' to the phrase ''health Nazi''.  Daube and his colleagues argue the latter is needlessly offensive and the former is ''an easy phrase in the same tradition''.

Daube's artless comparison reminds us that one can protest too much.  The problem some in the public health community have with the nanny state appellation isn't that it's unfair.  It's that it resonates with the public.

And we rely on ''nanny state'' because it describes something very specific -- an observable and concrete change in the way government relates to individuals.  It has no obvious or elegant alternative.

Where more ''traditional'' regulatory interventions try to protect individuals against the adverse consequences of the decisions of others, the nanny state primarily seeks to protect individuals from themselves.  As with all public policy, supporters deploy a wide variety of justifications, but this is what makes nanny unique.

And the attitude which underpins such paternalistic policy has implications far beyond alcohol and fast food.  It is, in a very real way, profoundly undemocratic.

If we can't trust people to choose their poison, then how can we trust them with a vote?

That question may sound glib.  But democratic legitimacy rests on a positive belief that while not all citizens may be equally intelligent or informed, they are equally sovereign, and as a consequence have the right to have a say about the country's future.  In their own small way.

The systematic chipping away by nanny state activists of these assumptions -- that people should be assumed to be competent to make such portentous choices themselves -- presents more of a challenge to democratic legitimacy than the public health community may recognise.

Nobody is suggesting a cadre of experts should guide citizens to make the correct political choices.  They never will.  (The public health community would no doubt be horrified at the thought.)  But it is just as hard to see not, given this paternalist philosophical stance.

After all, we have undermined the notion of individual responsibility to such a degree that some government advisors no longer even trust people to, say, manage their own food serving size (the Preventative Health Taskforce suggested regulators standardise portions in restaurants).

Basic notions of political equality should compel us to leave those food portion decisions in the hands of individuals, not state-appointed experts.  We cannot pretend to have a legitimate democracy if the government operates under a presumption that voters are idiots.

So dismissing individual responsibility has consequences.  Once you've accepted that the government should not treat people as autonomous, all sorts of authoritarian policy results.

The increasing centrality of income management for welfare recipients is driven by the same philosophy.  To support nanny regulations yet oppose income management is incoherent.

That's a hypocrisy found on the left.  On the right, drug-warriors against the nanny state are just as contradictory.

This is why the strongest objections to nanny interventions have always been philosophical, not practical or economic.  The nanny state is a radical reworking of the relationship between individual and state.

Certainly, some nanny interventions have been going on for a long time, and, in retrospect, few find them are objectionable.  Seatbelt laws protect people from the consequences of their own decisions and potentially the behaviour of others.

The difference is of degree, not kind.  But there is a difference nonetheless.

Where we can isolate one or two regulations of the past with similar purpose, the nanny state of the 21st century is expansive and insatiable.  It's a volume thing.

The Preventative Health Taskforce proposed 122 separate recommendations to clamp down on alcohol, tobacco, and weight-gain.  It recommended seven entirely new bureaucracies be set up.  It suggested twenty-six new laws and regulations.

Some critics have begun to describe paternalist interventions as indicative of a ''bully state'' mentality;  a graduation from nudging to shoving.  While this is true for some new and proposed regulations, it's not clear that, say, imposing new, simplified food labeling laws is really bullying.

The Nobel-winning economist James Buchanan tried to rename the nanny state ''parental socialism''.  Buchanan's alternative has an appeal, but its second word is louder than the first.  And nanny is the better metaphor.  In a democratic system, government is the hired help who we delegate to perform collective tasks -- not actually our progenitors or superiors.

We could invent other phrases.

Public health activists are clearly frustrated by the nanny state critique.  So they should be.  They do not understand how substantial a challenge their ideas are to the philosophical assumptions which underpin liberal democracy.

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Government subsidies to green groups must end

The Victorian, New South Wales and Federal Governments' have been using taxpayer funds to support advocacy organisations which encourage radical behavioural change in the community.

According to the Green Groups and the Government Report, activist organisations have been given over $10 million of taxpayer funds since 2004.

Funding to these organisations has been distributed through a series of grants and programme funding rounds overseen by each government.  In some cases, the funds have been specifically provided ''to assist with salaries and salary on-costs for executive and administrative staff;  office accommodation rental;  electricity, gas, phone and other similar charges;  essential office supplies and equipment;  staff and volunteer training;  photocopying and printing costs;  and travel costs incurred on behalf of the organisation.''

Upon receiving support, these organisations have used public funds to promote their radical economic and cultural agendas to the wider community, including impressionable school children.

Often operating under the guise of environmental altruism, these organisations have campaigned against the coal and logging sectors, residential land release, carbon tax compensation, lower taxes and road, power station and dam construction.

While the official objectives and emphasis of each organisation varies, their overriding philosophical motivations are the same -- to fundamentally change the way Australians, consume, behave and act.

The idea that an Australian government would actively seek to reduce the living standards of the general public is an anathema to ordinary Australians.  Yet this is precisely what these Governments' did during their multi-term reign.

There are two key recipient organisations which warrant specific mention, Environment Victoria and the Wilderness Society.

In the case of Environment Victoria, this is an organisation which is committed to putting thousands of Victorian coal industry workers in the La Trobe Valley out of work.  For many Victorian taxpayers, it will no doubt be strange to learn that despite their elected Governments' claiming to support the local coal sector, they were also funnelling $4 million into an organisation seeking its total destruction.

A prime example of the same thing taking place in NSW occurred with the financial support provided to environmental activist group, the Wilderness Society.  The Wilderness Society regularly campaigns against major project developments throughout NSW.  They do so because they have an ideological objection to large scale development.  In their words, the Wilderness Society believes that...

... ''if it can't be proven beyond doubt that a development will not impact on the environment, a community, or existing industries, it should not go ahead.  It's as simple as that''.

By holding such an uncompromising position, it seems impossible for any government intent upon improving living standards to find common ground with such an organisation.  Yet despite this, the NSW Government provided them with substantial sums of public funds.

Sadly, examples of contradictory policy settings within government are not particularly hard to find.  In fact, the two-faced nature of government policy priorities in this space is honeycombed throughout every single environment related portfolio.

What is evident from the Report is that the former Victorian and NSW Governments, and the current Federal Government, have each failed to enforce suitable checks and balances over the allocations of government funds to third party groups.

In each case, third party funding arrangements have been exposed as being poorly targeted, politically biased, weakly monitored and operationally irrelevant in terms of serving a credible function of government.

Additionally, the growth of these funding abuses represents a worrying trend in the expansion of a dangerous duopoly between green groups and government.

In order to remedy the situation, the current Victorian, NSW and Federal Governments' should each commence an extensive review of their third party funding practices.  The goal of this effort should be to restore the community's faith, stop the reckless waste, and put to an end the abuse of public funds.

Australian taxpayers, overtaxed as they already are, deserve and expect nothing less.

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