Terminate the renewable scheme now

The sun is setting on the carbon tax.  At its current rate, $24 per tonne of CO2, the tax increases the wholesale electricity price by 55 per cent and a Treasury endorsed OECD paper estimates Australia needs a tax of $78 per tonne to meet its emission restraint goals.

Other countries are not following Australia's lead in imposing a cripplingly high carbon tax — they are not even taxing emissions at the European Union's $6 per tonne.  The IPCC's recent grudging acknowledgement that its forecasts of soaring global temperatures have failed to materialise over the past 17 years can only reinforce governments' resistance to penalise their economies in this way.

The carbon tax is not the only such burden carried by Australia's producers and consumers.  Other measures including subsidies from general taxation and renewable energy requirements the cost of which have led to reduced industrial and household demand.

With the discontinuation of the carbon tax, alongside the $2 billion a year in subsidies from the "Clean Energy Finance Corporation", these other measures' effects become more prominent.

Labor's budgetary expenditure on emission restraints was about $4 billion a year.  The Coalition's average annual spending, including $800 million on Direct Action, looks to be under $2 billion.  Doubtless this will be further pared.

Renewable Energy requirements for electricity supply have been around since 2001.  Over the years the mandatory share has been expanded and is scheduled to ramp up to constitute a notional 20 per cent of supply by 2020.  Aside from around 15,000 GWh of (commercial) hydro, this has been defined as a 2020 target of 45,000 GWh of subsidy-reliant electricity.  The target comprises 4,000 GWh for small scale, roof-top solar facilities and 41,000 for larger facilities, overwhelmingly comprising wind farms.

Overall, renewable requirements add about 40 per cent to the wholesale electricity cost.

Wind generation costs are at least $100 per GWh, compared with less than $40 for coal, the predominant electricity supply source.  Wind also involves some increased network and back-up costs.

Roof top solar facilities have fallen in price and now receive less favourable regulatory treatment than previously.  Nonetheless, their electricity generating costs and grid connections that are subsidised by commercially supplied electricity makes roof top solar at least five times more expensive than coal.

Progression to the 45,000 GWh annual target would involve a cost and consumer subsidy to renewables rising year-by-year to $5 billion a year by 2020.  By then the renewable program would have imposed a total cost amounting to some $23 billion.  And, because the subsidy extends for the 15 year life of each facility, (solar roof top installations receive this subsidy up-front) the annual cost will continue to increase after 2020 before gradually tapering off and exhausting itself by 2035.

Changes to the program ostensibly follow advice from the Climate Change Authority (CCA).  Appointed by the Rudd Government and chaired by Bernie Fraser, the authority's legislation was intended to lock-in the program, preventing a future Coalition government from dismantling it.  This built-in restraint could be overcome.

Options for modifying the scheme include:

• The "Origin Energy" proposal, which reduces the renewables total to a genuine 20 per cent by 2020 as initially intended.  This would imply a maximum of 33,000 GWh of subsidised renewables, reducing the 2020 annual cost to $3.7 billion.
• A variation of this would allow only the existing and committed projects to proceed as subsidised.  This would mean about 15,000 GWh and an annual cost rising to $1.7 billion by 2020.
• The full costs could be saved if the program were to be totally abandoned, forcing renewables to immediately compete without subsidy, as their adherents always claimed they would eventually be able to do.

Beneficiaries would argue that terminating the renewable subsidies would constitute "sovereign risk" and adversely affect investment generally.  But we are already seeing previously guaranteed income streams from overseas renewable schemes facing early termination.  No investor can reasonably expect a subsidy to prevail for 15 years and there would be few precedents for a government committing its successors to 24 years of worthless expenditure.

The case for an immediate termination is strengthened by the fact that the original rationalisations for the subsidy program have been undermined.  No longer is it seriously maintained that in a few years' time renewables will, with modest initial support, become competitive with conventional supplies.  And it has also become clear that the world will not undertake carbon dioxide abatement measures comparable to those of Australia hence any domestic measures have a trivial effect.

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James Packer pays $60 million in voluntary taxes

So two things happened.  First, Crown Resorts Limited — whose Executive Chairman is James Packer — was awarded an exclusive license by NSW State Premier Barry O'Farrell to operate the A$1.5 billion Barangaroo Point Casino complex in Sydney.  That's a clear win for Crown, and probably for Sydney too.  Second, a few days later, James Packer — the billionaire private citizen, not the Crown Resorts company in which he is a shareholder and Chair of the Board — made a A$30 million donation to the Western Sydney Arts Fund.  Crown Resorts kicked in another A$30 million through its corporate social responsibility fund.

Mr Packer is reported as saying that the Western Sydney contribution was motivated by a campaign by the Telegraph that found that only 1% of NSW's art budget found its way to Western Sydney, which has almost a quarter of the state's population.  He also suggested that his sister Gretel Packer — "a long time supporter of the arts" — put him up to it.  Nice one, Gretel.

Now dark rumblings have erupted through the social media-verse, hinting at the grubbiness of it all.  Many concerned citizens, it would seem, see these two events as obviously related, with a strong whiff of shadiness.  There are circulating calls for Sydney arts organisations to reject the tainted "blood money".

These reactions are naïve.  First, Mr Packer's donation is to independent organisations — such as the Art Gallery of NSW — that can then spend the money in the way they choose.  Second, direct funding from the government is no less troubling, in that this funding is normally paid for through taxes.  Taxes are coerced extractions of wealth from citizens.  Unlike Mr Packer's contribution, the taxes that fund the arts organisations are not voluntary.  If you don't like them, or what they're spent on, you still have to pay them, and if you don't you go to jail.

Consider how different it would be if we instead passed a new law called the "James Packer has to pay A$30 million in extra taxes law".  And let's make this a hypothecated tax, directing the revenue to Sydney arts.  The outcome would have been the same, once it had been washed through the tax system and cleaned as government funding.  Ignore the economic distortions this would create, and the dissipation to overhead costs, or even the inequity.  The only difference is that we would now have an entirely coercive system.  From an ethical standpoint, that is a worse outcome.

Voluntary funding of public goods — whether arts institutions, hospitals or schools — is something we should aspire to, not cringe from.  It is a noble form of citizenship, and if it helps, just think of it as voluntary taxes.

This is of particular value in the field of arts and culture.  Indeed, it can be a much-preferred form of funding for an organisation, which can then choose whether to direct this revenue to line operations, or use the support to take greater risks, or engage in more visionary projects that might otherwise run into the kind of conservatism that the economics of median voter theory predicts.

The A$30 million donation by Crown Resorts is another matter, but that is something between Crown's shareholders and the Board that authorised the payment.  Maybe that was part of the license negotiation, or maybe not.  That's a matter between Premier O'Farrell and his voters.

But it should be perfectly clear that Mr Packer — private citizen — has done a good and generous thing for Sydney arts.  If we will recognise that, we further encourage other good citizens also to consider what voluntary taxes they might also pay.

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Freedom: the forgotten human right

George Brandis is right.  Sure, the phrase 'the freedom agenda' sounds a bit naff.  But a reorientation of public policy towards fundamental civil liberties is long overdue.

Australia's well-funded human rights establishment has completely vacated the field on basic rights like freedom of speech, freedom of conscience, and freedom of association.

Brandis' freedom agenda consists of two major proposals.

First, he wants to reform the Australian Human Rights Commission to include at least one freedom commissioner along with the six — yes, count them, six — commissioners dedicated to anti-discrimination and social justice.

Second, he wants to repeal section 18C of the Racial Discrimination Act, the provision which Andrew Bolt was famously found to have breached in 2011.

More on 18C in a moment.  The first idea is the most important one.  Institutions are more powerful than laws.

It is utterly indefensible that a body charged with protecting the great pantheon of human rights — according to its enabling legislation, those listed in the United Nations' International Covenant on Civil and Political Rights — should be so myopically focused on anti-discrimination.

That Brandis' plan to add a freedom commissioner — maybe just one, against six — is even in the slightest bit controversial demonstrates how skewed this body has become.

Here's an exercise.  Let's grant the commission the benefit of the doubt and accept it is statutorily obliged to weigh the right to protection against discrimination against the right to free speech.  (Somehow anti-discrimination always seems a bit weightier, but no matter.)  Yet even when such a balance does not need to be struck, the commission does not bother itself too much with free speech.

Take one of the most serious threats to free expression of the last decade:  Stephen Conroy's internet filter.

The Australian community has been debating this for the better part of a decade.  But the first mention the commission made of internet filtering was in September this year — that is, long after it was dumped, and after the government that proposed it was dumped.

Nor has the commission stepped up to the plate on the censorious nature of Australia's film and literature classification scheme.  In fact, the few times it has mentioned classification, the commission has proposed expanding classification to include racism (see, for instance, here).

The commission harbours a systemic, consistent, and unforgivable bias against some of the key rights it is supposed to protect.

Brandis' problem is that the human rights commission is probably unreformable.  But that's OK.  It's almost certainly unnecessary.

The commission's silence on key liberty questions demonstrates that.  Civil society organisations exposed the internet filter's threat to our rights, not the government's official human rights watchdog.

So if the human rights community seriously can't abide a freedom commissioner, then the commission ought be put out of its misery and abolished.

(At Crikey, Bernard Keane has argued we still need the commission's tribunal functions to adjudicate discrimination claims.  Perhaps.  But if so, let's spin off an anti-discrimination tribunal, and stop pretending it is anything but a minor specialist wing of the judiciary.)

Over the next few months we'll be able to watch the commission make the political case for its own abolition better than any outsider could.

Section 18C of the Racial Discrimination Act is one of the commission's darlings.  They are going to oppose its repeal vehemently.  See this piece in Fairfax papers over the weekend by the new race discrimination commissioner, Tim Soutphommasane.

The Coalition has promised to repeal section 18c "in its present form".  The present form makes it unlawful to offend, insult, humiliate and intimidate a person or group on racial or ethnic grounds.

There's an open question as to whether the Abbott Government will just delete the first two words — offend and insult — or all eliminate the whole section entirely.

It's not clear what the former approach would achieve.  Judges have unhelpfully preferred to read all four words together, rather than distinguishing each word individually.

Nevertheless, the most egregious sort of acts which could be considered to be humiliation and intimidation under section 18C are also covered by other state and federal statutes.  There are many laws against intimidation, disorder, stalking, and offensive conduct — to say nothing of state racial and religious vilification laws.

Soutphommasane rightly says section 18C has been used against people who aren't conservative columnists.  But those other uses do it no credit.

I wrote about one section 18C case in the Drum, which targeted a news website for anonymous comments.

In September, another case in the Federal Court fined a lawyer $12,500 for calling a security guard a "Singaporean prick" four years ago, and telling them to go back to Singapore.  Foul and offensive, yes.  But a society that relies on years of litigation to patrol the boundaries of civility is not a healthy society.

Now there's a looming case against the anti-Israel Boycotts, Divestments and Sanctions campaign.  A judge will decide if BDS is anti-Semitic too.  Then it will be "official".

In such a way, we substitute political and moral argument for lawyers and legal acrobatics.

Of course, any freedom commissioner worth their salt would be highly critical of conservative governments.  They would oppose the Queensland Government's bikie laws, the New South Wales government's restrictions on union campaign spending, and the national security state's proposed mandatory internet data retention scheme.

Then they would target our out-of-control defamation laws.

But these are contentious things.  Perhaps it's safest just to eliminate the Australian Human Rights Commission altogether.

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Authority's new emissions target unrealistic and irresponsible

The Climate Change Authority's recommendation to increase Australia's emissions target is as unsupportable as the policy it was designed to influence.

The authority, established by the Gillard Labor government, recently released its draft report recommending Australia's trajectory for cutting emissions.

Despite Abbott government plans to junk the tax, the emissions trading scheme and the authority, the draft report recommended increasing Australia's targets from a cut of 5 per cent of 2000 emission levels to 15 per cent or 25 per cent by 2020.

The 5 per cent target does sound modest, until it is properly analysed.

According to the authority's report, a seemingly modest 5 per cent amounts to a 23 per cent reduction off business-as-usual emission levels in 2020.

Even that is modest compared with other BAU projections.

One UN dataset suggests that to meet a 5 per cent cut may require Australia to nearly halve its emissions off 2020 BAU levels.

The authority also modelled a more ambitious 15 per cent cut off 2000 levels, equivalent to a 32 per cent reduction off 2020 BAU levels;  and a 25 per cent cut, equivalent to a 42 per cent cut.

Lobbyists and non-government organisations regularly make calls for such deep cuts, but they do so without responsibility.  That doesn't hold true with the authority.  It was designed to be the de facto setter of Australia's emissions targets.

Politicians were expected to accept the authority's recommendations that could potentially come into force if there was no political agreement to reject them.

Having so much confidence in a so-called independent body requires a misplaced confidence in its analysis.

The authority's recommendation to cut emissions by between 30 per cent and 40 per cent off BAU levels wrongly assumes the extent to which other countries are cutting emissions.

At the end of last year the Kyoto Protocol expired, and with it went the only operational, comprehensive agreement binding developed countries to cut emissions.  Before it expired, a skeleton commitment crew of Australia and European countries agreed to give it a last breath of life until 2020.  Previous ratifying countries, including Canada, Japan, New Zealand and Russia, walked away.  The US continued to stay away.  Negotiations are now being held to conclude a successor treaty by the end of 2015 to be operational for 2020.

The Climate Change Authority assumes the pledges countries are making in these negotiations will be met.

Yet negotiation for a comprehensive international agreement among major emitters to cut emissions has not emerged in more than a decade.  Instead, contrary evidence is starting to appear.

Last week there was a report that the Japanese government is considering weakening its emissions reduction target from 25 per cent off 1990 emissions levels to an increase of 3 per cent on 1990 levels.

It's not the first time Yes Minister-style "courageous" assumptions have been made by government agencies to justify significant climate policies.

Similar assumptions were included in the federal Treasury's 2011 Strong Growth, Low Pollution modelling supporting the introduction of the carbon tax.  To prove Australia would not be economically harmed by the tax, Treasury assumed by 2016 developed countries would take on equivalent costs to cut emissions, and that many developing countries would follow by 2021.

There was little evidence then;  it looks even less likely now.

The modelling also assumed 61 per cent of emissions cuts would be purchased cheaply offshore, despite the government then capping offshore permits at 50 per cent.

The assumed extent to which other countries are cutting emissions clouds the judgment of those defending the former government's policies.  There's also a dismissiveness of the structural flaws of these policies.  A government-mandated emissions trading scheme will never give the marketplace the certainty it requires.

To its credit, the authority correctly noted "longer-term guidance on emissions reduction goals is a critical factor for many investment decisions, particularly in long-lived capital items", such as energy investments, that would drive emissions cuts.

But as long as politicians decide the supply of permits, and decide demand by setting who is required to buy the permits, political considerations will influence their decisions and hence the rate of carbon-based taxation.

It's a particular problem when different studies have concluded Australia needs a permit price as high as $51 a tonne to achieve the 5 per cent target that has bipartisan support.

In response to this criticism, government-sponsored bodies argue for complementary mechanisms, such as long-term purchasing contracts for expensive renewable energy and "gateway mechanisms" that set upper and lower long-term emissions caps.

But such measures are tantamount to price-fixing in a marketplace, demonstrating the market is primarily for show and not setting prices.

Such behaviour is consistent with the authority's recommended ambition — by suspending reality.

Legal rights eroded without a whimper

The right to silence is under constant threat from the many new laws passed at state and federal level.  This legal right forms one of the core aspects of our criminal justice system:  that no one should be compelled to incriminate him or herself.

Such a crucial protection against injustice should not be eroded by dictatorial legislation that demands a rubber stamp from a reluctant judiciary.

Our common law has long held that to force people to condemn themselves is oppressive and contrary to justice.

Yet for years state and federal governments have passed laws that have undermined or directly removed this legal right.  Governments, concerned that they do not appear ''tough on crime'', get frustrated when due process in the criminal courts gets in the way of increasing the conviction rate.

A recent decision by the High Court clearly shows the long and sorry history of contempt that our Parliament has for the right to silence.  Lee v NSW Crime Commission concerns the NSW Criminal Assets Recovery Act 1990.

This law allows the police to force people to incriminate themselves, even if they have a criminal trial approaching.  Unfortunately, the court upheld this law and now the accused will have to produce damning information ... against himself.  This means he is helping the prosecutors better fulfil their job, completely ignoring his own right to not make things worse for himself.  Why would the High Court support such a law?

The judgment shows us how the right to silence has been whittled away for decades.  Over the years, legislation that has undermined this legal right has been confirmed in case law and those same decisions have paved the way to trump centuries of legal protection.

As far back as 1909, Huddart, Parker & Co v Moorhead brazenly noted how Parliament has the power to change ''any principle of British criminal law, no matter how fundamental''.  Half a century later, another High Court decision, Lockwood v Commonwealth, noted ''no court'' could declare illegal any law that was clearly stipulated in legislation.  Ultimately, they argued that ''it is a rule of the common law that the common law itself gives way to statute law''.

In other words, a citizen could not possibly refuse to make incriminating statements to authorities when faced with legislation that expressly tells them they have to answer.  Because of the nature of our parliamentary system, the judiciary cannot overrule legislation that comes from our democratically elected Parliament.  The court's role is to apply the law:  no more, no less.  What we need is for governments to stop undermining embedded common-law principles to achieve political ends.

Lee emphatically illustrates that the government is entitled to remove fundamental rights, as long as the legislation they write specifically gives them that power.  So the government can grant themselves the power to remove one of the key protections we have against an overreaching authority.

Lee shows that over the past century, governments have been and are still abusing this power, playing with the fabric of our legal system.

Time and again, arguments of ''the greater good'' have been used to curtail our legal freedoms.  There is always a new enemy that can only be beaten if we just give up another right, another freedom or privilege.

The right to silence is losing the battle being waged by our politicians.  It's time our elected leaders back off the principles that have built the great democracy and justice system that we have today.

Innocent on defence with Bill

The Tasmanian Government should abandon the Bill to introduce unexplained wealth laws.

The new law will not catch the crooks, but has a strong chance of trapping innocent people.

It was once famously noted the "one golden thread" throughout the centuries of common law is the onus of proof lies with the accusers.

As early as 1471 jurists noted the law would "prefer 20 guilty men to escape through mercy, than one innocent to be condemned unjustly".

The burden of proof and the right to silence helped to ensure the innocent were protected.

The Crime (Confiscation of Profits) Amendment (Unexplained Wealth) Bill 2013 will bring in sweeping new laws that would allow the state to confiscate private property.

The legislation plans to fight organised crime, hitting them where it hurts:  their wallet.

If you cannot explain your "wealth", the state will forcibly take your assets.

These powers come at a cost though:  Tasmanians' legal rights.  The rule of law has been shoved aside to chase those who move in the underworld.

The power will give the police a wide net which could all too easily punish those who are simply in the wrong place at the wrong time.

You will be forced to prove your property was legally acquired.

This is clearly reversing the onus of proof.

This puts the defendant in an impossible situation.

The police do not have to do the leg work of proving alleged criminal activity;  instead you have the hard task of producing statements, deeds or any other potentially damning document.

The accused is already on the back foot, working up from the assumption they are guilty until proven innocent.

Too bad if you are a small business owner without the paperwork and lawyers ready at hand;  the police will seize first and ask questions later.

Then there is the removal of the right to silence.

Not only are the authorities assuming your guilt, you are not even allowed to keep quiet until you have a chance to figure out what is going on or until you have managed to find a lawyer.

Any "evidence" that the police or courts demand have to be presented:  they could be papers, receipts or even clothing.

You have to hand it over;  even if there is a chance it may incriminate you.

Apart from Tasmanians' fundamental legal rights being attacked, the financial and emotional cost to individuals is huge.

All of your worldly possessions are up for grabs — your home, your savings, even your business.

All may be confiscated if you cannot prove that they were legally obtained.

Fair enough, you may be thinking:  criminals do not deserve to profit from their crimes.

However, the reversal of the onus of proof means that anyone could be forced to explain their private affairs, and the only evidence needed to remove your property is the police's suspicion.

Your house or business could be taken away just because someone had a hunch.

And not all property is owned outright, and this poses further problems.

Section 153 of the Bill spells out that if you are unfortunate enough to own property with someone who gets their assets confiscated, your share of the property is taken, too.

Your only hope is that you can stump up the cash quickly enough so you can buy out the accused's share, or that the property is readily "divisible".

Otherwise your hard earned is taken away and there is very little you can do about it.

Organised crime is an awful stain on our community.

The violence and destruction it brings must be combated, but unexplained wealth laws are not the answer.  They simply do not work.

They have been largely unsuccessful in catching major criminals in other states, yet it gives the Government sweeping powers to further intrude in our lives.

Yet now the Tasmanian Parliament wants to remove centuries of legal protections.

Your most valuable possessions are at risk — your house, business and assets.

The stakes are too high:  these laws could leave you homeless, unemployed and without a cent to your name, and all because of a mere suspicion.

The Government should abandon this legislation before it is too late.

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Never trust the 'diary' of a political spinner

Diaries claim to reveal more about their author than a traditional memoir.  They usually reveal much less.

Hopefully Bruce Hawker's diary, published this week as The Rudd Rebellion:  The Campaign to Save Labor, is not, in fact, an accurate account of the thoughts of Kevin Rudd's chief strategist during the 2013 campaign.

If it is, then Hawker has a crippling lack of self-awareness.

Take just one example.  Hawker does not explain one of the most bizarre and ludicrous decisions Labor made throughout the first few weeks — to run a scare campaign on the GST.  The only justification for this scare was the Coalition was going to conduct a broad tax review.

On this thin hook Rudd hung almost his entire economic message.  Don't vote for Abbott:  he'll increase the GST.  Don't vote for Abbott:  he'll increase the GST.  It was unrelenting and desperate and obviously false.  The word "vegemite" does not appear anywhere in Hawker's diary.

So let's be charitable and say there was a lot more to the Labor campaign than Hawker suggests.

The political diary is the falsest, most self-serving form of confession.  No wonder it's grown to be a favourite genre for political warriors.

For a long time it was a tradition that Australian politicians wrote themselves out of their own memoirs.  The political historian Sean Scalmer points out that Australia's insider accounts tended to be an account of political history where the protagonist was strangely missing.

Alfred Deakin's story of federation included this disclaimer:  "Those who desire to know the part the writer himself played in the public debates or campaigns must turn to the Reports published officially or by the press."  What a tease.

Over time such nineteenth century modesty was abandoned.  The audience came to expect more reflection and more personality in political memoirs.

Memoirs are usually written years after the events they depict.  They have a certain distance.  Diaries promise something else entirely — a sense of intimacy with the author.

In theory, political diaries can take readers inside the tent.  More than memoirs, they can convey some of the pace and excitement of politics, the sort of energy and uncertainty that is hard to reproduce in retrospect.  And — most of all — they do so in an unedited, raw and highly subjective fashion.

After all, diaries are where we keep secrets.  That's their appeal.  To read a genuinely private diary — even of someone long dead — feels like crossing an ethical boundary.

The modern political diary is the exact opposite of this.  They are deeply self-conscious.  They are public statements only pretending to be private.

Of course, every political diarist promises their book has been published with minimal edits.  But there is no reason to believe, and every reason to doubt, these books are faithful records of the private inner thoughts of their subject.  These diaries are written to be read.  Hawker is a spinner.  That's his job.

Samuel Pepys — the diarist by which all others are measured — wrote his diary in code and it was not published for 150 years.  Bruce Hawker's diary was published in 50 days.

Why does this matter?  Because it's deceitful.  The modern political diary is narrative construction and score settling and blame shifting masquerading as honesty.

When Hawker skips happily over the most bizarre decisions he and Kevin Rudd made, it's obvious readers are being played.

The interest in political diaries does not come from the revelations about how the author felt in key campaign moments, but what they want the reader to believe they felt.

And it seems, as Katherine Murphy points out in the Guardian, that Hawker wants to be seen as a nihilist.

I don't mean to pick on Hawker specifically.  Few political diaries show the author in a positive light.

The 2010 equivalent of Hawker's 2013 diary was Paul Howes' Confessions of a Faceless Man.  It was as much a confession as the author was faceless.  Howes' diary was obviously supposed to be an apologia for his highly public role in the spill that replaced Kevin Rudd with Julia Gillard.

But as the blogger Piping Shrike has argued, the only impression Howes' diary gives is that high politics is utterly inconsequential.  Howes surely doesn't believe that nicknames and YouTube videos win elections, but — if one were to trust his diary — they seem to have been his primary focus during the campaign.

When Mark Latham released his diary in 2005 it was impressive how unguarded it was.  It was packed with devastating character assessments.  Its depictions of internal Labor politics were so sharply negative they could have been satire.

But since then we've come to realise that bile and insult is actually Latham's usual writing style.  His diaries weren't an expose.  They were an audition.

There was nothing revealed in Latham's diary of his character that he hasn't revealed over and over in the years since it was published.

Just as there is nothing in Bruce Hawker's diary that he didn't want thousands of people to read.

The political class has co-opted the private intimacy of the diary to deliver nothing more intimate than snarky interpersonal rivalries and ham-fisted narrative-shaping.

But that's politics, I guess.

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You've got $7 billion — so how will you fund the arts?

Last year the Australian Bureau of Statistics did the maths — government spends about A$7 billion annually in Australia on arts and culture.  The exact dollar figure varies depending on what we count, but it includes heritage, broadcasting and botanical gardens, along with all the usual suspects:  performing arts, literature, film, visual arts, and so on.

For the sake of argument, let's assume A$7 billion is exactly the right amount of public funding for the arts.

To make this exercise fun, let's suppose that no political horse-trading was involved in reaching this figure.  Let's assume this figure is the result of disinterested economic calculation of the size of the positive externality in the production of a public good, all wrapped in willingness-to-pay studies, and tied with a big bright cost-benefit ribbon.

So what's next?

Do we put away our box of shiny economic tools and turn to grubby political compromise to allocate the exact market-failure correcting amount of public funding?

In Australia, as in Europe, this is more or less what we do.  Economics to justify an economically efficient level of spending — and politics to implement it.

Estimate market failure, then politically intervene in direct proportion.  This is the standard 20th-century model of applied public goods.

Observe this in action in science (CSIRO), academic research (Australian Research Council), and sports (Australian Institute of Sport), among others.

Yet modern economics suggests that it would be better if we turned the process upside down.  Let politicians determine the level of funding in a given area — and let economists determine the allocation.

Why?  The political model of funding allocation is very bad at creating — or even recognising — new knowledge.  In fact, political allocation mechanisms cause incentives that reward lobbying and punish experimental or innovative thinking.

Only by weakening those incentives can arts and cultural funding seek to be more than a rearguard preservation exercise or sinecure for vested interests.

There are four principles we should consider:

One:  favour indirect over direct funding

Direct funding takes small amounts from many taxpayers and pools it in a few large granting bodies for dispersal to many recipients.  The indirect funding model eliminates those big pools — incidentally the places where all the layers of necessary accountability, governance, expert-committees, lobbying and rent-seeking accumulate.

The indirect model offers tax credits to anyone — private citizen, corporation, foundation or NGO alike — for spending on arts and culture.  This approach has at least three great strengths:

1) It does not require government approval of arts and cultural activities.  Philanthropists can be great patrons.  They can be far more edgy and engaging than government — just look at David Walsh's Museum Of Old and New Art in Hobart and the art collections of advertising tycoon Charles Saatchi.  Tax breaks allow for public support of the arts — without the public judgment of funding criteria (which eventually, inevitably collapses into the politicisation of art and culture).

2) Indirect funding sets up a diversity of funding options:  private and public, philanthropic and corporate, big and small.  This is messy, and it certainly makes arts management more difficult — but such diversity promotes the spread of ideas.  It also serves to protect the quirky idea from being catastrophically overlooked by one dominant funding source.  A diverse funding mix will be a more robust and resilient funding ecology that is actually more likely to find the crazy genius.

3) Indirect funding weakens incentives to capture by lobbyists and bureaucrats.  In other words, less time and resources need be devoted to political organisation and lobbying.  This mitigates the arts and cultural grants "support industry".  The cost of this support industry, as Nicholas Rothwell reported recently, can be observed in Australia's Indigenous arts sector.

Two:  fund outputs, not inputs

We tend to fund inputs for political reasons, specifically as ways of tying funding to particular jobs, groups or regions.  The political reasons may be good — but they always add up to bad economic reasons, otherwise known as deadweight losses.

A practical example of the difference is to fund prizes — which are awarded for achieving some specified output — rather than grants.  Grants often promise some output but they only contractually fund the input.

Prizes have long been part of art and culture, just as they have in sports, science, innovation, and other fields of human endeavour.  The enormous popularity of the various "So you think you can dance/sing/debate ..." franchises illustrates the creative energy and diversity that such prizes stimulate.  We should probably make more use of prizes in public arts and cultural funding than we do.

Funding outputs can also depoliticise arts funding by focusing attention on what we actually want to achieve rather than how we want to achieve it.  Applicants are evaluated purely on their ability to be the best at what has been sought.  There tends to be a lower bullshit component to prizes than to grants.

Three:  fund demand, not supply

Demand-side funding is often superior to supply-side funding because it better aligns producer incentives and it more effectively aggregates consumer preferences.  In both cases you're seeking to fund those who receive the output — in this case, audiences — who therefore are in the best position to evaluate and monitor quality.

Supply-side funding involves a lot of trust and often expensive monitoring.  This is why economists tend to favour demand side funding:  it economises on information and the need for human perfection.  Again, it's a more robust institutional solution.

A useful example is to compare vouchers, where the funding amount is gifted to the consumer, to grants, where the funding amount goes to the producer.  Vouchers are used to allocate money to schools, business innovation, and numerous other public services;  this is a model that could be adapted to arts and culture.

Four:  be more like venture capital

Some of the lessons of venture capital — which is also in the creativity business — have not been learned by public sector arts and cultural bureaucrats.  (I'm not being ironic:  really — there are actual lessons to learn.)

What does this mean in practice?

Adopt a portfolio approach which explicity recognises probabilities of success and failure.  This will inform a funding model that incorporates variance endogenously, rather than getting all upset when things don't work out.

This will often mean aggressively pursing difference — and supporting it not as a sop to the weird, but as a rational risk-management strategy.

Crowdfunding arts and cultural public goods should be considered.

Rather than gift, or what is these days mostly debt funding, take equity stakes in artists to fund training and development.  If we must persist with direct/input/supply funding, this will enable us to at least create a more liquid public asset.

Fund experiments and demand discovery.  Experiments are a public good because they provide new information to others.

Seek voluntary funding models such as lotteries.  Lotteries may even be effective for allocation of funds as well as for raising them — and this would also limit the conformity and conservatism that expert panels tend to exhibit.

Let's encourage unintended consequences

Arts and cultural funding could be improved if we could just agree on a level of funding — and then use economic analysis to design the models of funding delivery.  In short, give the tax system a bigger role — and the expert panels a smaller one.  Make differences at the margins by funding skewed toward outputs and the demand side.

Public funding of arts and culture should concern itself with producing unintended consequences.  The problem with the existing direct, input focused model is that it at best only produces intended consequences, and at worst collapses to a kind of welfare.

We really should be more ambitious than this.

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The age of entitlement really is over

The hardest task in life is to say no to someone you care about.  A weak government tends to give its citizens everything they wish for.  A strong government has the will to say "NO!''

That's from Joe Hockey's The End of the Age of Entitlement speech at the Institute of Economic Affairs in London in April last year.  The NO in capital letters is exactly as in Hockey's original.

It's an important speech and a good one.

However, it's one thing to say it to a free market think tank in another country while you're in opposition.  Now that Hockey is Treasurer he must say it to his ministerial colleagues while they're sitting at the cabinet table four feet away from him.  Hockey must put his words into action.  He must say NO to Holden's demands for more taxpayers' dollars.  And then he should say NO to calls for taxpayer bailouts of food companies.

Hockey is right.  The age of entitlement is over.  In his speech he talked about the welfare entitlements of individuals.  Everything he said about individuals applies to corporations as well.

"As the electoral pendulum has swung between socialist and conservative sides of politics, the socialist governments — often winning electoral success thanks to the funding from unions — have created a huge array of entitlements for selected classes of individuals."

After "individuals" Hockey should have added "and industries".  It's reassuring that earlier this week he said:  "We are not running down the street, chasing an individual car maker with a blank cheque."

The trouble is it looks like that's exactly what the Coalition is doing.  Which is not anything different from what Labor did.

TRIMMING THE EDGES ISN'T ENOUGH

Hockey's assessment of what "economic liberals" usually do is spot on:  "When the electoral pendulum swings, conservative governments have come in promising to fix the problem, but in most instances have just trimmed around the edges without addressing the real problem of the growing entitlement burden."

Yet another inquiry on the car industry, this time by the Productivity Commission, can only be described as a cop-out.  There's nothing about Australia's feather-bedded, inefficient, indulgent-of-the-unions automotive sector that hasn't been known for decades.  It's a cop-out with consequences though.  Every week a decision is delayed is a week closer to the next federal election.  If ever there was a time to say "NO more money" it's immediately after a resounding election victory.  Hockey identified the two reasons why the age of entitlement cannot continue.  The first is simply that the current welfare system is financially unsustainable.  The second is that the system is unfair.  The Treasurer talked about the unfairness of the current generation borrowing from future generations to pay for a lifestyle that future generations will themselves never be able to afford.

What Hockey could have pointed out, but didn't, was the double standard of much of the political left.  On the one hand, for "the sake of the children" the Left urges a reduction in the standard of living of the present generation by cutting carbon dioxide emissions, yet at the same time the Left supports a burgeoning welfare state paid for by those future generations the Left says it cares so much about.

As Niall Ferguson wrote last year, a few weeks after Hockey's speech, the public debt of governments around the world "allows the current generation of voters to live at the expense of those as yet too young to vote or as yet unborn".  Young people should welcome austerity and "if young Americans knew what was good for them, they would all be in the Tea Party".

There's another point about fairness when it comes to industry assistance.  It's unfair to protect some industries and not others.  Which is precisely the point made by National senator Bridget McKenzie when she called for government money for struggling food producers.  "Governments have supported car manufacturing to the tune of about $10 billion over seven years, while agriculture subsidies remain very low compared to international standards."

That's a fair point.  But the answer is not taxpayers' dollars to food companies.  That's a guarantee our food industry will eventually end up like the car makers.

The answer is NO taxpayers' dollars to either industry.

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It's in Victoria's interest to get fracking at once

Energy is a hot-button issue this month.

There's the gallows humour from the Gillard appointed Climate Change Authority (CCA), which the Abbott Government is to abolish.  CCA argues that the 5 per cent carbon emission reduction policy shared by the ALP and the Liberals brings insufficient damage and should become 15 per cent.

And in Victoria, former Commonwealth minister Peter Reith's report on gas, features "unconventional" coal seam and shale gas mining policy development, which the government has banned.  In a separate article, Reith together with Paul Howes and Innes Willox discuss the need for early action to remove the ban.

Unconventional gas is identical to conventional natural gas, and is released by "Fracking" — that is, hydraulically fracturing gas pockets.  Predictably, green groups have led the opposition to fracking technology on environmental grounds.  Interestingly, though, that opposition has not extended to fracking used to produce their poster-child energy from hot rocks.

Fracking has been claimed to adversely impact water supplies, cause earthquakes, bring combustible gas through domestic plumbing systems and soon.

Like others before it, the Reith report shows that these claims of environmental distress are baseless.  In the US, the green-infused Environment Protection Agency has conducted many inquiries into such allegations but, even though at least 30,000 wells are in production, it has found no damage.

In NSW, farmers have claimed that Fracking conflicts with the use of agricultural land.  But this is also nonsense — wheat grows and cattle graze oblivious to the gas beneath them being siphoned for use in homes and businesses.

Landowners would clearly like a share of any valuable gas resources under their soils but the fact is that, in Australia, as in England and Canada, landowners do not have rights to subsurface minerals.

For better or for worse, politician that he is, Peter Reith is recommending a share of the gas revenues go to landowners and to regions in order to placate local opposition to exploration.  Generously compensating landowners for damage and inconvenience is one thing but providing them such rights means they obtain windfall gains.

Unfortunately, this means revenues being taken from explorer/developers who take risks and incur expenses in research and exploration.  This will diminish their incentives to seek out hidden mineral wealth, the success of which benefits all in the community.

In the US, unconventional gas production has grown to a level similar to that from conventional wells.  In the process, the country has seen its natural gas prices fall by four-fifths and the nation has been transformed from a net importer to an exporter.

Australia is thought to have comparable unconventional gas resources to the US, meaning long-term prices similar to the current level are possible.  But the Victorian Government is placing the achievement of this in doubt by locking up the gas fearful of political damage from noisy activists opposing any development, perhaps joined by landowners.

Apparently ample Bass Strait gas reserves have reinforced the Government's political timidity in applying a moratorium on drilling.  But with longstanding gas contracts expiring and interstate export facilities coming on stream, Victoria's short-term and possibly long-term prices will rise, hitting consumers and business alike and showing government complacency to have been misplaced.

Voting is futile but that doesn't mean elections are

The most interesting thing about Jeremy Paxman's interview with Russell Brand isn't what the comedian says.

No, it's Paxman's horrified reaction.  Just watch it.  Brand is a twit.  But Paxman is glorious.  He's just so ... shocked.  Uncomfortable.  Confused.

Paxman is supposed to be one of Britain's leading political interviewers.  He's questioned top politicians and royalty.

Yet he is apparently flummoxed by this simple idea:  voting and political engagement are not the same thing.  The first does not equal the second.  The second is not dependent on the first.

Fluffy movie-star Marxism aside, Russell Brand is right.  Voting is one of the most futile ways to engage in politics.

Your vote — my vote, Brand's vote, Paxman's vote — doesn't count.  Not individually.  Not to an election.

This is intuitively true, easy to demonstrate, but strangely controversial.

The New Zealand economist Eric Crampton offers a survey of the academic evidence about the notion that an individual vote can change an election here.

The best data is from the United States.  A massive survey of 56,613 Congressional and state legislature elections could find only 10 elections where the result had come down to one vote — that is, where the result was a tie or the count revealed just one vote between the candidates.

Even that depressing result overstates the likelihood of a single vote deciding an outcome.  Counting is not an exact science.  Mistakes can be made (just ask the AEC).  Five of those 10 elections were either recounted to reveal much larger margins, or just re-run.

The chance your vote will make a difference is infinitesimally small.  So small, in fact, it's not worth voting.

Not worth it, that is, if the reason you want to vote is to make a difference.  There are other reasons one might vote apart from affecting an election outcome.

Many people follow politics like they follow sports teams.  If they draw joy from voting, who are we to judge?  Others vote because it is part of a ritual that underpins community and nation.  That's nothing to be scoffed at.  Purely instrumental claims that voting is "irrational" simply because an individual cannot change the outcome miss the point.  There's nothing irrational about doing something you enjoy.

For some, voting is expressive.  How they vote is part of who they are.  A "Labor man" is a man who votes Labor.  Humans build their identities out of their opinions and values — voting can help reinforce those identities.

And if voting is, legitimately and profoundly, a vehicle for personal expression, then so, surely, is the decision not to vote.

Brand explained his views in the New Statesman the next day:  "I don't vote because to me it seems like a tacit act of compliance."

Many people claim that treating the decision to vote as a personal choice is somehow undemocratic, or a rejection of hard-won liberties.

These arguments should be seen for the nonsense that they are.

There's a big difference between a right to vote and a positive duty — whether enforced by legal requirement or moral obligation — to do so.

The great battles for freedom and democracy of the past were not fought so that the state could coerce people into political participation.  In Australia, we have turned democratic rights into legal requirements.  (Yes, voting is compulsory.)  Breaches of the law are punishable by the courts.  This is a sickly ironic revision of the liberal cause so many died for.

Choosing not to exercise the right to vote is a very democratic choice.

There are far more effective ways to engage with the political system than voting.  After all, politics is an ephemeral business.

Paul Samuelson, who wrote the textbook Economics that monopolised post-war university education in the United States, once said "let those who will write the nation's laws if I can write its textbooks".

It's easy to overstate the differences between major parties, when, in fact, partisan differences don't account very well for changes in public policy over time.

In the 1930s and 40s governments around the world, of left and right persuasion, increased control over their economies.  In the 50s and 60s they built welfare states.  In the 80s and 90s they privatised and deregulated.

Elections didn't drive these epoch-defining changes.  Voting certainly didn't.  Ideas did.  The sort of ideas developed in textbooks and magazines.

But that's where Russell Brand goes off the rails.

There's a lot not to like about government of the twenty-first century — the institutionalised rent seeking, the expanding web of regulatory control, the lack of accountability, the national security excesses.

Yet it remains the case that elections are the most equitable, peaceful and legitimate mechanism to fix those problems.

Calling for "revolution", as Brand does, is childish and naïve.  At best such calls result in the kind of nihilistic destruction we saw in the London riots.  At worst, well, I'm sure you know your history.

Democratic institutions ensure that if you want to alter policy, you have to convince your fellow citizens that change is desirable.

And, because any single vote will not change an election outcome, you have to convince a very large number that your cause is so important they should make an expressive, personal, "irrational" stand at the ballot box.

The futility of voting means that democracy resists sudden radical change.  This is a good thing.

So many people who complain that the "system" is rigged are in truth complaining that most other citizens don't agree with them.

But Russell Brand's instincts on voting are correct.  There is no civic duty to vote.  His personal vote will not make a difference.

Abstaining is as powerful a democratic statement as any vote could be.

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Let MPs claim expenses as we do

You don't have to be a crook to be a rorter.  The current parliamentary expenses scandal isn't a story about bad people and corruption;  it's a story about poor incentives and bad rules.

The source of the expenses scandal is the vague governance system that rules expenditure.  When rules are vague, people interpret them to maximise the advantage to themselves.  This isn't surprising — that's just human nature;  that is also why rules should be clear and explicit.

Being an MP is a tough job.  MPs are on call 24/7 and must be on their best behaviour at all times.  They also have poor working conditions, with long hours and being away from home for long periods of time.

But here is the thing:  they get paid.  It is a well-paid job and people compete vigorously to get the job.  The base salary for an MP is $195,130, plus an electorate allowance of at least $32,000, and a payout if they lose their seat.

Then there are the entitlements well beyond the standard items such as salary and various forms of leave.  It is these that, even if not actually rorted, raise the ire of taxpayers.

We should have the best democracy we can afford.  So let nobody begrudge politicians their pay.  But let's also have transparency and consistency in their pay and conditions.

Most proposed solutions to entitlement abuse involve more disclosure and additional bureaucracy.  There is a simpler solution.  No entitlements.  Pay politicians entirely in salary (and leave).  Make it all taxable income, like most other employees.

Managing a constituency is the business of an elected representative.  That is what politicians get paid to do — any expenditure incurred in electorate business should then be treated as a work-related deduction on their income tax.  The Australian Taxation Office could work out what should be deducted, and what shouldn't, under the existing standard rules.

To be clear, this proposal relates to the remuneration of being an elected representative, and not to the business of government.  Expenditure necessary for the function of government should be paid by the government.  No doubt politicians will claim no clear distinction can be drawn between the business of politics and the business of government, but that is just cant.

Every other organisation in the country manages to resolve the difference between legitimate business expenditure and employee remuneration.

The downside of this proposal is that we may have to pay our politicians even more than at present.  That is the price of transparency.  Good government is not cheap.  But it may encourage our politicians to be more frugal with their own money as opposed to being spendthrift with our money.  Our politicians have exempted themselves from the accountability that every other organisation in Australia bears in this regard.  That has to change.

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The 3am curfew plan simply won't work

The proposed state-wide 3am curfew on Queensland's licensed venues won't prevent alcohol-fuelled violence.  In fact it will probably increase it, at the expense of our choice to go out when, and where, we want.

Queensland — take heed from Melbourne's own unmitigated failure.  The 2am lockout Premier John Brumby experimented with in 2008 was a disaster, with mayhem throughout the CBD's popular nightspots.

Queensland's 3am curfew is more extreme than Melbourne's own failed scheme.

Attorney-General Jarrod Bleijie commissioned a panel in September 2012 to look into the regulation of liquor licensing across the state.  These so-called experts are now calling for the state-wide closure of clubs and pubs at 3am in order to try and prevent the drunken violence.  This plan simply won't work.

Queensland already has a Drinksafe program that imposes a liquor venue lockout at 3am and a curfew at 5am.  Lockouts ban pass outs and you cannot enter a new club or pub after the set time.  But you are free to stay on in the same venue.

The next restrictive step is a curfew which forces closure of all venues.

Queensland's Auditor-General produced a scathing report of Drinksafe, stating that it had been a costly failure, with a bill of $10 million.

Any small headway made by the program was from the presence of extra police officers on the street, not the actual lockout and curfew.  Dr Anthony Lyneham, a maxillo-facial surgeon who sees firsthand the bloody mess created by street violence, argued that what made the Drinksafe precincts work "was the men and women in blue."  Dr Lyneham believes that "the number of assaults that police actually prevent is incredible."

Despite the failure of the pilot program, Queensland seems determined to introduce a new, earlier curfew.  This new plan is more extreme than what Drinksafe imposed and will be even more ineffectual and restrictive.

The curfew only applies to smaller venues.  Casinos with their 24-hour licences are exempt, so patrons can simply kick on from the compulsorily closed club to The Treasury.  Protectionism creates a privileged, state-backed entity to the detriment of other businesses.  Government shouldn't be artificially altering the market to favour any one business.

As the casinos will still be allowed to trade, it will simply transfer the problem to a different location.  You will simply see a mass exodus of drunken patrons having to cross town to the new venue.  Instead of being dispersed across many different venues and locations, people will be funnelled into the one casino in town.  This simply concentrates the revellers and will increase the likelihood of brawls breaking out during their journey or at the casino itself.

Why would you want to kick out all patrons state-wide at exactly the same time?  Without a curfew, partygoers will naturally leave or change venues at their own pace.  An arbitrary closing time of 3am will likely see a huge spike of orders at 2.45am, with patrons quickly sculling drinks before they have to leave.  The six o'clock swill didn't work the first time and I have a feeling the negative effects will only be compounded if it is reinstated at 3am.

There are logistics to consider too.  Transport is already limited after midnight and an artificial 3am rush will compound the problem.  Instead of people leaving in small groups, hundreds of people will need a taxi at the same time.  Taxis and public transport will be unable to cope with such a spike in demand.  And there are only so many police officers who will be able to patrol.  Not all will be available at 3am.  The same goes for ambulances and emergency rooms — resources are already stretched to breaking point.  This curfew is likely to prove to be the proverbial straw.

The proposed curfew will result in thousands of people on a Saturday night being forced from venues by bouncers fearing that they will be slugged with a fine if the doors are still open at 3.01am.  The buses will have stopped and there is likely to be too few taxis.  Bored patrons who have just downed their drinks will be left milling around trying to figure out how to get home.  The revellers who have spilled on to the street are likely to pick a fight.  This is the perfect recipe for mayhem and exactly what the designers of the curfew want to prevent.

Increased police presence is the only way we can hope to reduce fighting on our streets.  The proposed curfew is just a nanny-state, knee-jerk response that has no hope of stemming the violence.

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It's high time to abolish the ACCC

In the Federal Court last Friday Justice John Middleton ruled AGL and its agent had broken the law against unsolicited selling when one of their door-to-door salespeople in South Australia ignored a "Do Not Knock" sign on the front door of a house.

The case is ridiculous.  And it demonstrates all that's wrong with how business is regulated in this country and all that's wrong with the Australian Competition and Consumer Commission.

AGL can be fined up to $50,000.  If the company had asked the salesperson to spray graffiti on the home rather than sell electricity, its fine would have been smaller.

The fact it required a Federal Court judge to decide the meaning of a sign saying "Do Not Knock, Unsolicited door-to-door selling not welcome here" demonstrates the capacity of lawyers to argue over something that to any normal person is perfectly obvious.

But the piece de resistance of the case is the attitude of the ACCC.  Rather than simply getting AGL to apologise, the Commission promised to pursue penalties against them as part of its campaign against illegal door-to-door marketing.  (The ACCC spends part of its $150 million budget producing "Do Not Knock" stickers.  The stickers feature the Australian coat of arms and the ACCC logo.)

Tony Abbott has proclaimed Australia is now "open for business".  He can prove it by abolishing the ACCC.  In fact I recommended exactly such action last year in my 75 radical ideas to transform Australia.  Getting rid of the ACCC came in at No 9, between abolishing the Commonwealth Grants Commission at eight, and Australia withdrawing from the Kyoto Protocol at 10.  (No 1 was repealing carbon tax.)

There's two main duties the ACCC undertakes:  things the government has no role in whatsoever and things that can be left to state governments.  On the very rare occasions when there is a genuine issue of competition policy, the matter can be decided by the Treasury department or directly by parliament.

Revealing snapshot

A quick look at the 10 most recent press releases from the ACCC is a revealing snapshot of how it's turned into a make-work organisation for bureaucrats, which is hardly surprising.  Its chairman, two deputy chairs and three commissioners all have backgrounds as public servants, lawyers, and academics.

Between them they have as much experience in the private sector as the Labor Party's frontbench.

One of the 10 press releases was about the AGL case and another covered a speech given by the chairman.  Other press releases dealt with credit card companies coordinating new authentication procedures;  with music licensing;  and with regulating the prices charged by the national broadband network.

The ACCC should have nothing to do with the national broadband network.  As soon as the monopoly regime of the national broadband network was revealed, the entire senior staff of the ACCC — if they'd really had any commitment to competition — should have all resigned.

The ACCC also announced it had allowed the Queensland government to control the sale alcohol as part of a liquor control program, and it had permitted councils in New South Wales to coordinate rubbish collection.  A further press release disclosed the ACCC had approved the Homeworkers Code of Practice.  In simple terms the Code regulates the use of outworkers in the textile, clothing, and footwear industry.  The Code entrenches the right of the relevant trade union to interfere in every stage of the manufacturing and management process in the industry.  The Code mandates exactly the sort of behaviour the ACCC should be eliminating.  Instead the Commission gives the code its blessing.  Finally there's press releases about the dangers of trampolines, and warning parents not to allow babies to swallow small objects.  Helpfully the Commission advises parents to supervise children on trampolines at all times.  Exactly why the ACCC is telling parents how to raise their children is unclear.  At least the Commission hasn't — yet — gone as far as Scottish government which recently proposed every child in the country have their own government official to oversee the child's upbringing.

The ACCC has outlived any purpose it may once have had.  Someone else can make the "Do Not Knock" stickers.

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Roadblock on path to hard-won rights

According to those who argue for increasing anti-bikie laws, particularly police, eroding fundamental individual rights is fine if you've got nothing to hide.

The Queensland police and government have adopted exactly that argument in defending the harsh consequences of laws against unsuspecting motorbike enthusiasts who have never gone near a bikie.

Queensland's Police Commissioner, Ian Stewart, put it simply when he stated:  "We make no excuses and I'm sorry for any inconvenience to the general public but if they've done nothing wrong they've got nothing to fear from our people."

The raft of new laws targeting bikies across Australia represents an unacceptable assault on individual rights.  The big states have introduced laws that together represent a nationwide attack on the rights of law-abiding bikies.

Under existing state laws in Western Australia, Queensland, NSW and Victoria, bikies are the direct targets of government attacks on their fundamental rights to property, freedom of association, privacy and free speech.

Proposed amendments look set to further erode the rights of anyone associated with a bikie, let alone individuals who own a bike.

Queensland is set to make it illegal for bikies to ride in groups larger than three;  Victoria has banned fortified walls at club-houses;  WA allows for property seizure;  and NSW is soon to follow suit.

It is easy for politicians and police to target these individuals because of this perception of all bikies as automatically criminal, gang-affiliated or interested only in organised crime.

But what's absolutely crucial is the protection of these key rights for every member of society, no matter what group you associate with or the hobbies in which you choose to indulge.

Queensland Attorney-General Jarrod Bleijie admits "there will be some disruption to law-abiding motorbike riders".

But the Queensland laws will be more than a mere disruption.  Innocent bike riders will have their right to freedom of association eroded through penalties for simply riding next to two other bike enthusiasts.  The laws would also restrict freedom of speech and individual privacy, with police able to stop, search and photograph anyone in club colours.

It has never been acceptable to monitor and record someone because of what colour they are wearing.  Apparently it's now justifiable because it's targeted at those pesky bikers.  Don't worry about freedom of association, individual privacy or freedom of speech because individuals who like motorbikes don't deserve these rights.

In WA, the Supreme Court has the power to seize property, including cash from bank accounts, if the asset has had "criminal use".  These property confiscation laws were used in a 2011 case against biker Gary White, leading to WA's Director of Public Prosecutions seizing $135,000 from White's bank account.

Substitution laws allow authorities to seize any of an offender's property as substitution for other property used as part of the crime, but owned by someone other than the offender.

White's $135,000 was unrelated to the crime, but due to this substitution law its seizure was upheld by the High Court as valid.  The law provides for an extremely broad interpretation of criminal use of property subject to seizure, allowing the state to seize the private property of individuals who have been involved in the commission of an offence.

Such laws have no regard for the basic human right to own and use property without interference.

Victorian anti-fortification laws came into force last week, significantly eroding centuries-old property rights.  The laws ban any fortified walls or barricades, allowing police to obtain court orders to destroy any fences or walls at bikie club rooms.  These walls are often there to protect the hundreds of thousands of dollars worth of valuable bikes within the club.

The laws also undermine the rights of private property owners.  Victoria police state they will not publicly say when they make anti-fortification applications to the court, adding a veil of secrecy to the already authoritarian laws.

To escalate the attack even more, Queensland parliament will next week pass new laws granting its Crime and Misconduct Commission new powers compelling bikies to appear before its star chamber.

Under star chamber rules, individuals can be sentenced to mandatory jail terms for refusing to answer questions.

The forced appearances for bikies destroys these individuals' right to silence and provides a clear example of government use of all possible avenues of power to target individual rights.

This range of targeted laws throughout Australian states demonstrates a concerted effort to erode the fundamental rights of anyone who enjoys riding a motorbike.  If an individual breaks the law, they should be liable for it.

There is no suggestion bikies should be allowed to engage in criminal behaviour.  Equally, however, every individual must have their rights to property, of association, to silence and privacy upheld and not be subject to laws attacking these basic human rights.  The laws blatantly undermine the fundamental legal principle of "innocent before proven guilty" and represent an indiscriminate attack on law-abiding individuals purely due to association.

Given the current trend, the erosion of rights is on track to get even worse.

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It's about muckraking, not kingmaking

The Abbott Government's expenses scandal has been a wonderful natural experiment.

Most political scandals are three-pronged contests, pitting opposition against government against media.  Each vie against the others to pursue their goals:  winning office, keeping office, selling eyeballs to advertisers.

So usually it's hard to tell which faction is the driving force behind the controversy — political party dirt units, muck-raking journalists, or partisan commentators.

But not this time.  The Labor party has dealt itself out of the expenses debate.  (Fair enough, too.  They've been busy with a leadership ballot.  Nor has Labor wanted to expose itself to charges of hypocrisy.  See, as an amusing exception to this discretion, Mark Dreyfus.)

Labor's absence has left the whole expenses scandal as a simple, clean contest between media and the government.

That seems to have made it more frustrating for the Coalition, rather than less.  There has been no way to dismiss the allegations as the product of Labor dirt.  But more importantly, this natural experiment reveals just how indulgent the debate over the influence of the media was during the Rudd and Gillard years.

Left intellectuals have spent the past six years obsessing over the wickedness of Australia's press corps.  First we were told the press didn't care about policy, then that the press was speculating about leadership tensions that didn't exist, then how it was trying to secure government for Tony Abbott.

At its most lucid, the obsession with the media was displaced frustration with Labor's hapless performance turned into anger about Rupert Murdoch.  At its worst, it produced the sort of mad conspiracy of the #ashbygate crowd.

The expenses scandal demonstrates how off-target all that outrage about the media really was.  It turns out the press is more interested in muckraking than kingmaking.

Those Labor supporters who imagined Abbott to be the media's darling must be very confused.

Remember being told that Abbott was a former journo himself, he provided great copy, and therefore journalists in the press gallery had taken a personal liking to him?

Contrast that with the obvious frustration the new prime minister has had trying to deal with the expenses story in the middle of the APEC summit in Bali.

It's not like the expenses affair is a particularly scandalous scandal.  Parliamentary expenses are one of those stories that journalists can pull out of their pocket on a rainy day.

Questionable expenses claims are regularly reported.  They will be with us forever.  And compared to the British expenses scandal a few years ago, it's all a bit pathetic.  No Australian politician has billed taxpayers for cleaning their moat.

If the Coalition thought the press was on their side before the election, they no longer do now.

Hopefully there's another lesson the Coalition will learn from this episode — there's no such thing as media management.

It seems like yesterday that commentators were telling us just how calmly and quietly the Abbott Government was going about its business.  This was apparently a revolutionary change from the media hungry style of Kevin Rudd.

One week after the election, Laurie Oakes wrote that Abbott had shunned the demands of the 24 hour news cycle and gotten on with "working rather than talking".

They say a week is a long time in politics, but, really, it's not that long.  When all this was being said, the government hadn't even properly formed.  Technically Kevin Rudd was still prime minister.

And, in retrospect, the argument that the Coalition had invented a brilliant new style of media management is pretty funny.  The government has wasted two entire weeks trying to bat away the expenses affair.

Politics cannot be willed off the front pages.  The media cannot be managed.  It can only be defended against.

Kevin Rudd's infamous one-announcement-per-day strategy was less about controlling the news cycle and more an attempt to out-run negative publicity.  But the negativity caught up.

And a good thing too.

Most people say the media should aim to rigorously scrutinise government actions.  But it should do more than that:  the media should be openly hostile to the government.  It ought to be fickle.  Sometimes even unfair.

After all, the government is the single most powerful institution in society.  Australian governments consume or redistribute over a third of the total resources of the nation.

With such power concentrated in one institution, the real risk to liberal democracy isn't that the press is unfair to the government, but that it is too indulgent.

During the Labor years, nobody could accuse the press of that sin.  And, if the last fortnight is any indication, this term of government will be the same.

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Challenge to ACT's laws on gay marriage will show state of play

A challenge to the ACT's proposed laws to introduce same-sex marriage on constitutional grounds provides the certainty needed on an emotive issue and the guidance required for potential state-based schemes.

On Thursday, newly commissioned Attorney-General George Brandis QC announced the federal government would challenge the ACT's Marriage Equality Bill 2013.  The challenge reportedly follows advice he received last week from the commonwealth Solicitor-General that the proposal was unconstitutional.

The bill's explanatory memorandum outlines that it is designed to "allow couples who cannot marry under the Commonwealth Marriage Act 1961 because of the way marriage is defined under the act to enter into a marriage regardless of sex".

In practice, the bill is a mix of show-ponying by sections of the Labor Party to try to claim ownership of this social change while knowing it likely exceeds their power, as well as putting pressure on the commonwealth to follow and allow same-sex couples to marry.

Opponents of the law argue the commonwealth should seek to overturn the soon-to-be law.

Any effort to overturn the law will quickly become a de facto debate on the present federal Marriage Act and it is doubtful such a law would be passed under present Senate arrangements.

There is a certain irony to any commonwealth challenge.

Under section 51 (xxi) of the Constitution, the federal government has the "power to make laws for the peace, order and good government of the commonwealth with respect to marriage".

The federal government has legislated that a marriage is a "union of a man and a woman to the exclusion of all others, voluntarily entered into for life".

The ACT will likely argue that the unions they are forming don't fit within this category, are therefore not marriages, and don't conflict with the federal power.

Therefore the federal government will have to argue that a union between two people of the same sex is equivalent to a marriage, even though it has explicitly legislated otherwise.

But so long as the ACT seeks to define these relationships as a marriage it seems unlikely the territory will win.

The ACT may be the first cab off the rank but it is not alone.  The Tasmanian parliament is set to re-debate an earlier failed move to introduce state-based marriage for same-sex couples.

The NSW parliament has also had an inquiry into whether it should legislate for a state-based scheme.  A bill will be introduced and debated soon.

The NSW inquiry concluded states had "the power to legislate on the topic of marriage, including same-sex marriage", before raising the caveat that the result of a High Court challenge was uncertain.

In any decision from the High Court, the government should also seek clarity about how the court may respond to the states taking equivalent action.

Some constitutional lawyers argue the states can establish marriages, but their interpretations appear to be based on the hope that the High Court will support the social change and ignore the jurisdictional nature of the dispute.

It is not an accident of history that Australia has uniform national marriage laws.  The drafters of our Constitution learned from the US experience of leaving the definition of marriages to the states.

Despite the merits of competitive federalism, Australia's founders made an informed decision that nationally consistent laws were desirable.

The Abbott government is seeking an expedited hearing from the court, which hopefully should avoid a repeat of the dilemma faced by California.

California issued marriages to same-sex couples following a state Supreme Court ruling in June 2008 that declared the existing ban on marriage for same-sex couples unconstitutional, and the subsequent November 2008 passage of a referendum, Proposition 8, that reinstituted the ban.  Since then, legal challenges have resulted in overturning of the Californian ban.  But in the six months to November 2008 more than 18,000 marriages for same-sex couples were registered.

Following the passage of Proposition 8 the legal status of those relationships sat in legal limbo.  It wasn't resolved until a 2009 California Supreme Court ruling upheld the legality of the unions of those already married.  But the same rule concurrently denied other same-sex couples access to marriage, effectively creating two classes of citizens.

If the ACT or NSW issues a single marriage certificate to a same-sex couple, and a subsequent constitutional challenge is successful, the cruel process of removing the legitimacy of a couple's relationship in the eyes of the law will be a reward for only the most heartless opponents of change.

These sentiments were echoed in the Attorney-General's statement:  "It would be very distressing to individuals who may enter into a ceremony of marriage under the new ACT law, and to their families, to find that their marriages were invalid."

A commonwealth challenge to the ACT plan won't satisfy those who want to use the debate solely for political grandstanding, but it will provide the clearest and fairest pathway for supporters and opponents alike.

Even if the commonwealth does not challenge the ACT's plans, opponents will.  A commonwealth challenge gives it the best chance to be debated on constitutional grounds, without prejudice on the preference for an outcome in favour or against, but merely in favour of clarity.

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It's not just about trade deals but also reforms at home

Tony Abbott is broadly on the right trade track, but may find more success in unilateral liberalisation than waiting for other countries to step up to the plate.

Abbott has already achieved a trade policy win by appointing highly competent Liberal MP Andrew Robb into the trade and investment portfolio.

Robb's record as a dogged free trade advocate during his 1980s' leadership role of the National Farmers' Federation puts him in good stead to manage domestic interests in sensitive sectors.

Robb's challenge is to drive Australia's free trade agenda, even while the same roadblocks that stopped the former minister, Craig Emerson, from achieving much, remain.

In addition to locking down trade deals, there are still reforms to be taken at home.

INCREASE FOREIGN INVESTMENT THRESHOLD LEVELS

On a practical level, the government could increase foreign investment threshold levels that prompt Foreign Investment Review Board reviews.

Because of bilateral deals, New Zealand and American investors enjoy threshold levels up to five times higher than other investors.  The standard could easily be extended universally.

Robb should also scrap parallel import restrictions on books that protect the interests of multinational publishers, can increase prices by up to a third, and do nothing for our local writers.  Proposals to broaden and strengthen Australia's anti-dumping regime should also be scrapped.

There are also under-utilised provisions by professional bodies in existing FTAs to promote qualification recognition that could increase services trade.

Robb also needs to rebuild Australia's free trade consensus.  We no longer have a free trade consensus;  we have a no-tariff consensus.

Since 2007 all sides of politics have toyed with non-tariff barriers that would restrict trade under the disguise of environmental concerns.  Equally, all sides appear committed to extending the ongoing, outrageous taxpayer-funded subsidies to the car industry.

CUTTING REMAINING TARIFF RATES

Robb should focus his energy on ensuring the schedule for cutting remaining tariff rates is met without the reciprocal increase of subsidies, as the car industry has enjoyed.

Internationally the challenges are starker.  Negotiations for an FTA with China have dragged on since 2005 because of disappointing offers for market access for Australian agriculture exports.  Investment regulations are also hampering negotiations.  Unless the Chinese government puts better offers on the table it will be difficult for Australia to secure a comprehensive deal worth signing.

The temptation for the government will be to conclude negotiations even if it means securing a weaker deal.  But we shouldn't trade our national interest for a headline.

Similarly, we should not be starry-eyed about the progress of broader agreements, such as the Trans-Pacific Partnership.

The TPP started with Brunei, Chile, New Zealand and Singapore, but negotiations have expanded since 2010 to include eight other countries in the Pacific Rim, including Australia and the US.

A comprehensive deal was more likely to be struck amongst a smaller number of countries with few politically and economically sensitive industries.

Countries should then have been welcomed to join a comprehensive deal with phase-in timelines to allow domestic industry to structurally adjust.

A SMALLER NEGOTIATING WINDOW

Instead many countries joined negotiations early as the TPP appeared to be providing the framework for an Asia Pacific-wide regional FTA.  But with every additional country the negotiating window for a comprehensive deal becomes smaller.

With a Democratic President in the White House, the injection of environment and labour standards could sink any deal with poorer developing countries.

It will be difficult for the TPP to be concluded by the optimistic deadline of the end of this year.

Similar problems are dogging global trade talks due to ongoing disputes about developed-country agriculture subsidies and developing-country tariff protection of industrial products.

After so many years of failure, it is doubtful a global deal can be done.  The round started on the wrong foot by prioritising development as a central pillar of any deal, not just free trade.

Development follows from free trade through Adam Smith's invisible hand of greater efficiency, trade and growth in the global marketplace.

Promoting development as a priority assumes that the visible hands of governments actually know what trade and investment flows will lead to growth.

Injecting "development" compromises the unifying principle that trade deals should remove barriers.

The gap of expectations is a systemic problem in international forums.  Throughout the 20th century the rich world got to write the rules, on the proviso that there were expectations on developing countries.

Today, developing countries are asserting their negotiating muscle, but there's less unanimity about what the rules should say.

The WTO is not alone.  The UN's health, intellectual property and climate change bodies are all struggling to secure treaties, most notably failing to secure a post-Kyoto Protocol.

These challenges should not dissuade Abbott and Robb from being ambitious on trade, but equally they should not ignore securing vital, achievable liberalisation gains at home.

Lego PMs must be diligent in making choices

A perennial feature of Australian political affairs is the desire of prime ministers to be remembered for their ''nation-building'' legacies.

So it was true to form that, during the election campaign, Tony Abbott said he wished to be remembered as an ''infrastructure prime minister''.

However, the ability of Abbott's new government to substantially increase capital spending is thwarted, by no small degree, by the parlous budgetary conditions bequeathed to it.

The undesired budgetary starting point, in turn, was the product of past policy decisions to rapidly increase the Commonwealth's public debt, covering for less-than-expected general revenue growth, which primarily funds recurrent expenditures.

As the late Nobel-prize-winning economist James Buchanan noted, the application of borrowed funds for current consumption, as transpired under the Rudd-Gillard governments, erodes the productive capital stock required to grow an economy in the longer term.

Even in the perilous fiscal circumstances which Australia faces, it has been widely reported that the Abbott government is preparing to accommodate further increases in public debt.

On this occasion, however, the government hopes to dedicate the borrowed funds to infrastructure projects, which would supposedly offset any diminution of private sector investment growth in the mining sector.

There is speculation the government is considering the sale of dedicated ''infrastructure bonds'', a scheme previously abandoned by the Howard government on the basis of their financial misuse.

Prominent unionists, business representatives, and academic economists like to remind us that the case for debt financing of public sector infrastructure rests upon securing an intertemporal apportionment of benefits and costs, associated with such activities.

Specifically, it is deemed inappropriate that current generations defray the full cost of financing long-lived assets, primarily through taxation, since the assets would conceivably generate a stream of economic returns enjoyed by future, presumably wealthier, generations.

These widely accepted constructs seem reasonable in theory.  However, it is false to presume that highly imperfect political processes would necessarily deliver those infrastructure projects most needed to expand Australia's productive capacities.

As election campaigns readily demonstrate, political processes are predominated by an intense rivalry between parties to promise awe-inspiring, monumental infrastructure projects that will win sufficient votes, particularly in marginal seats.

That is, the spatial allocation of capital spending is greatly influenced by non-economic considerations, potentially compromising the economic effectiveness of ensuing infrastructure developments.

Assurances government infrastructure would deliver value for money to taxpayers can also be compromised by on-site labour arrangements, such as bans on non-union subcontracting work, which unduly inflate project costs.  Conflicting underlying objectives, concerning the purposes of spending, could further compromise the economic efficacy of government infrastructure programs.

As the recent expenditure during the 2008-09 global financial crisis had shown, a desire to lay down infrastructure to create jobs, rather than long-term economic value, can lead to a political laxity in economic and fiscal disciplines when selecting which kinds of projects to undertake.

Another complicating factor is the modern political tendency to confound recurrent and capital spending, with numerous recurrent forms of expenditure, such as disability services and industry corporate welfare payments, erroneously labelled as ''investment''.

The risk is that, in the absence of careful vetting disciplines by government, future generations would continue to be effectively forced to repay borrowings for consumption spending enjoyed by those living today.  It is the risks arising from the politicisation of infrastructure development which lumber taxpayers and market participants alike with typically gold-plated capital boondoggles.

Examples of these can be found across the landscape, and include overpriced school halls, desalination plants, regional rail projects, and sports stadiums, or an incomplete and under-subscribed National Broadband Network.

These cautionary words are not to suggest that infrastructure investments should not occur.

Rather, government infrastructure should be developed with the greatest of economic and fiscal care, paying genuine regard to project costs and benefits, and with consideration given to cost-effective and efficient private sector involvement in construction and maintenance.

Given the aggressiveness with which governments of recent past have borrowed, the question should also be asked:  which recurrent spending programs should be pared back to accommodate proposed new capital works in the budget?

The Australian problem is not our sensible aversion to public debt, but our irrational aversion towards eliminating non-essential, and low-value, recurrent public sector activities, that could otherwise make budgetary room for potentially productive infrastructures.

The desire of Abbott to build an infrastructure legacy is politically understandable but, to achieve this, he must avoid the ill-disciplines of borrowing and poor spending decisions which bedevilled the previous administration.