Fairness, Opportunity and Security.
Policy series edited by Michael Keating and John Menadue.

According to the Treasurer, Joe Hockey, the ‘timetable back to a budget surplus is unchanged from last year’. Furthermore, the Government is asking us to believe that unlike the savage and unfair spending cuts in last year’s budget, now it can all be done with no pain. Indeed restraint has been thrown away, and in pursuit of popularity the Government’s policy decisions since the previous 2014-15 budget have actually added as much as $13.4 billion to the cash deficits for the four years 2014-15 to 2017-18[1].

But if it was all so easy to restore fiscal sustainability surely the public is entitled to ask why did the Government break so many promises and insist that the unfair cuts in last year’s budget were absolutely necessary and any opposition was irresponsible. Or alternatively is the Government’s new narrative that this latest Budget will get us back to a surplus in 2020 not really credible.

In this article I will first discuss why a return to a balanced budget or even a modest surplus is desirable, although the rate of progress towards that target should make some allowance for the present soft economy operating at less than full capacity. Second, I will then explore the reasons why the claimed fiscal surplus in 2020 might be doubted, and the unfortunate implications of achieving a surplus in the way the Government plans and which they are not really transparent about. In two subsequent articles I will address an alternative approach to restore fiscal balance on a more sustained basis, and which I will argue would also be more cost effective and acceptable.

Overall fiscal strategy

While much, even most, of the Government’s previous rhetoric was over-blown, there are good reasons for getting the Budget back into surplus over the next few years. The policy debate has never been about this objective but about the means chosen in the last 2014-15 Budget, which were demonstrably unfair.

Nevertheless, despite our strong starting point with relatively low public debt, continually adding to it, fair weather or foul, over the years ahead really is not, or should not be an option.

Australia is a large commodity trading nation, heavily dependent on foreign capital inflows, and is exceptionally exposed to external shocks which must be expected in the years ahead. Prudent economic management therefore demands that Australia make steady progress within a reasonable time frame to restoring the fiscal position to a modest surplus. That would ensure adequate scope for future counter-cyclical policy, and mean less reliance on foreign capital inflows which can be uncertain in difficult times.

Furthermore a credible strategy for getting the Budget back into balance, and a modest surplus in the good years would have a significant impact on confidence, sufficient to lower the risk premium on long-term interest rates, perhaps by around 1 per cent. The alternative of continuing fiscal deficits would risk less confidence and less capacity to deal with shocks. While the increased reliance on foreign capital would on average result in higher interest rates and a higher real exchange rate over the long term, leading to some structural adjustment, and disadvantaging that part of the economy exposed to international competition.

So given the agreement with the Government’s intent to restore the budget balance over the next few years, I now want to consider their latest approach to this task and whether it really represents a credible strategy. 

Revenue projections

In the forthcoming financial year 2015-16, total Australian government revenue is forecast to be equivalent to 24.0 per cent of GDP, compared to 22.8 per cent in 2013-14 when this government first took office. And by 2018-19 government revenue will amount to as much as 25.2 per cent of GDP. In effect the Government is projecting that revenue will rise by 2.4 percentage points relative to GDP in five years, while the fiscal deficit is projected to fall by 2.7 percentage points relative to GDP over the same five year period. Clearly these figures show that revenues are doing almost all the work to reduce the budget deficit, with government payments falling relative to GDP by only 0.2 percentage points over these five years.

Now perhaps this reliance on increasing revenues would be the best available option if it represented a considered choice and was achieved through tax reforms to improve the effectiveness and equity of the tax system. But that is not the case. Instead the bulk of the increasing reliance on revenue to restore the budget reflects the impact of bracket creep as people move into higher tax brackets as their incomes increase over time.

Thus personal income tax receipts are projected to increase from 10.4 per cent of GDP in 2013-14 to 12.1 per cent in 2018-19, and this increase of 1.7 percentage points is a good measure of the impact of bracket creep on the budget bottom line. So according to this measure bracket creep on its own will account for 63 per cent of the projected improvement in the Budget deficit over the five years to 2018-19.

But is this projection really sustainable or will tax changes have to be made which will negate it? Already this projection implies that someone on average weekly earnings can expect to move into the second highest tax bracket in 2015-16. More generally average tax rates will move up, especially for those moving into another tax bracket, with someone on average weekly earnings moving from an average tax rate of 21.7 per cent to 27.4 per cent over the next decade. Realistically it is only reasonable to assume that the pressures for tax relief will lead to tax reductions for many people if not all, and thus negate the basis of the government’s projected return to surplus.

Indeed the Government itself seems to acknowledge that something will have to be done to offset the impact of bracket creep on average tax rates. However, according to the Government this is a problem to be addressed after its projected return to Budget surplus in 2019-20. But can the Government afford to wait until then and even worse what if as is likely the return to surplus is even further delayed?

In effect if the Government wants to rely on tax increases to achieve a return to an enduring budget surplus then it will need to persuade people of the need to deliberately change the tax scales. It is not, however, realistic to assume that average taxes can continue to increase by stealth as it were. Instead people will need to agree that this deliberate increase in taxation is part of the best package for achieving fiscal sustainability in the long run. At present the Abbott Government is a long way from achieving that outcome.

Expenditure projections

As numerous commentators have picked up, the projected return to a Budget surplus assumes that the savings measures in the previous Budget which are still being opposed will in fact be implemented. Some of these in fact require legislation and in the case of the reduction in payments to the States for hospitals and schools, the Prime Minister has agreed to talk to the States, presumably about what might be done to ameliorate the impact of the cuts. So again whether all these savings will in fact be realised is questionable.

An indication of the magnitude of these questionable reductions projected in government payments can be obtained from the recent Intergenerational Report (IGR). In that report the scenario described as the ‘currently legislated’ scenario uses all the savings measures that had actually passed the Parliament by last March, and while it projects that the budget will almost return to surplus in 2020, it projects that after that the budget balance will deteriorate continuously until it amounts to as much as 6 per cent of GDP by 2055. As the IGR made clear at the time continuing budget deficits of that magnitude are not considered to represent a sustainable fiscal outcome.

But since the publication of the IGR there have not been any new savings measures legislated. Indeed the Government has now given up on some of those measures which were then in contention, and not all of these abandoned measures have been offset with new savings.

So unless the Government can get agreement to the remaining disputed measures in the previous budget plus some more, the only reasonable assumption is that this 2015-16 Budget will at best lead to something close to budget balance in 2020, but after that the Budget will slip back into deficit. And the best indication of the size of that deficit is something approaching the 6 per cent of GDP projected in the most relevant scenario in the IGR only two months ago.

In short this Budget does not represent a credible plan to restore the long run sustainability of the Budget, as shown by the Government’s own documents.

Conclusion

Last week’s Budget fails in its main economic purpose to repair the Budget. It may succeed in achieving its political purpose in restoring support for the Government – time alone will tell. But to ensure long-run fiscal sustainability we need to develop an alternative strategy. That will be the topic of the next two postings, tomorrow and the next day.

Dr Michael Keating AC was formerly Secretary of the Department of Finance, and Secretary of the Department of Prime Minister & Cabinet.

 

[1] The media have widely reported the Government’s contention that since the Mid-Year Financial and Economic Outlook (MYEFO) published last December the net impact of the Government’s policy decisions has resulted in total net savings of $1.6 billion over the five years ending 2018-19. This statement is, however, misleading as it doesn’t allow for the net addition to the deficit of $4.1 billion after the 2014-15 Budget and before the MYEFO. In addition, the Government’s figure of $1.6 billion incorporates alleged savings accumulating to $10.4 billion as a result of the decision to abandon the previously promised Paid Parental Leave Scheme, the Levy and the Company Tax Cut. But as the Budget documentation shows, no provision for these policies was ever made in the Government’s forward budgeting, so they cannot legitimately be counted as savings now.

Current Affairs. UK election

On Thursday, May 7 2015, the Conservative Party won the national election in the United Kingdom – despite the fact that nearly two-thirds of ballots were cast for other candidates. With only 36.9% of the vote – some 3% more than opinion polls predicted – the Conservative Party won a 50.9% absolute majority of seats, 331 out of 650, in the House of Commons.

The 61.1% of voters who supported other candidates will thus be represented by a minority in the Commons. There have been public protests at an outcome that some feel was not a democratic expression of voters’ will.

Labor made bigger vote gains, but lost seats

Here are a few facts about the election results that may surprise readers:

• The Conservative Party increased its vote by 0.8%, but increased its number of seats by 28 seats.
• The Labour Party increased its vote by a greater percentage than the Conservatives did, 1.5%, but its number of seats decreased by 24.
• Most voters cast their votes for defeated candidates, so most are “represented” by an MP they did not support.
• Some parties are over-represented in the House of Commons relative to their support among voters. So the governing Conservatives, with 36.9% support, have 50.9% of the seats, and the Scottish Nationalists, with 4.7% support, have 8.6% of the seats.
• Other parties are grossly under-represented, most notably the United Kingdom Independence Party (UKIP) with just one seat, yet 12.6% support.
• The percentage swing to UKIP was the biggest for any party in the UK for at least a generation, but the 3,881,129 people who voted for them – the third-biggest vote after the Conservative and Labour parties – are almost all unrepresented in the House of Commons now.
• Both the Labour and UKIP leaders resigned following their parties’ disappointing number of seats won, even though the votes for their parties significantly increased.

‘First past the post’ distorts multi-party contests

Why is this so? The problem with UK elections, highlighted previously in The Conversation, is that single-member electoral districts, combined with the lack of preferential voting, means that election results usually strongly distort the voters’ wishes.

Here’s how it happens.

Consider the county of Cornwall. With six electoral constituencies, the overall vote was as follows:

43.1% Conservative

22.4% Liberal Democrat

13.8% UKIP

12.3% Labour

5.8% Green

2.5% Others

Although 57% of voters in Cornwall voted for parties other than the Conservatives, the Conservatives won every seat. This is because, under the first-past-the-post system, each winner needs to be just a nose in front of each of the other candidates, even if most of the voters didn’t vote for him or her. In fact, only one Conservative candidate exceeded 50% support in Cornwall.

The full details of what happened are given in the table below:

Breakdown of voting in six seats of Cornwall

Click to enlarge

The only voters whose ballots count for the election of an MP are those who support the candidate who gets the biggest share. This biggest share is usually well under 50%, because there are five or sometimes six parties getting significant support in the UK. There is no preference voting, so if – for example – you vote for a Greens candidate, as 3.8% of voters across the UK did, your vote is effectively discarded (in all but one seat) because at least one other candidate gets more votes.

The Conservatives were able to win a clear majority of seats because their candidates got ahead of others in more than half of the 650 seats, even though they received several million votes short of a majority of votes. Across the south-east and west of England the same picture we see in Cornwall was repeated in many places – with overall votes of less than 50% the Conservatives won all, or almost all, the seats.

But in the rest of the UK the story is different. In the north-east of England, for example, around Durham and Newcastle, out of 28 seats, Labour won 25 and the Conservatives only 3. But, again, Labour’s vote was well under a majority, being just 45.1% of the vote.

What happened in Scotland? Well, the Scottish Nationalists (SNP) are celebrating a huge win, but actually a majority of voters, albeit a very slim majority, voted for other candidates. Final figures show that the Scottish Nationalists won 49.97% of the vote, but 94.9% of the 59 seats in Scotland (56 seats).

Some have said this result in Scotland presages a vote for independence in any future referendum, but the SNP did not win a majority of votes in Scotland last week, nor a majority in the 2014 referendum. A win in any further referendum doesn’t seem likely soon.

So this is why many people in the UK are upset by the election result. Most voters didn’t vote for the outcome they got, and most voters are not represented in the House of Commons – which is the only elected House – by the candidate they voted for.

Is this distortion really the best that democracy can offer? I would say a definite no.

 

Stephen Morey is Australian Research Council Future Fellow, Linguistics at Latrobe University. This article first appeared in The Conversation on 11 May 2015.

Fairness, Opportunity and Security
Policy series edited by Michael Keating and John Menadue.

Australia to the 1980s – Government at the commanding heights

For almost 200 years, from 1788 to the early 1980s, governments held the commanding heights of the Australian landscape.

The Australia in which I came of age, the Australia of the 1950s and 1960s, would now be described as a “command economy”, notwithstanding the anti-communist rhetoric of the postwar era, championing the liberties of the “free world”.

The journalist Paul Kelly commented that while we didn’t live under totalitarian rule, we did live under a condition of state paternalism. Governments, state or federal, Labor or Coalition, determined what we could read (remember the fuss over Lady Chatterly’s Lover), whom we could have sex with, and what time the shops should close.

In the economic sphere government was even more dominant. With all the authority of Soviet central planning, governments determined the shape of the Australian economy, through tariff and quota protection, partial or full ownership in key industries (banking, airlines, railroads, aircraft manufacture, pharmaceuticals, telecommunications), and sanctioning internal restraints on trade. In disregard of Section 92 of the Constitution (the free internal trade bit), for example, local brewing monopolies were protected by prohibitions on trading beer across state borders.

This economic system must be seen in its historical context, namely the decision, at the time of federation, that Australia would not go down the path of “plantation economies”, such as Argentina, characterised by wide disparities in income and opportunity. Rather, Australia would go down a path of industrialisation as a means of spreading income and opportunity – a process well-described in Ian McLean’s 2012 work Why Australia Prospered. Even the White Australia Policy, although strongly based on racism, had its liberal supporters who saw it as a means of stopping Australia from becoming a society of white masters and colored coolies.

Also there were the demands of industrial mobilisation during the Pacific War and of national development after the war. There were no private investors waiting to invest in rail gage standardisation, in an international airline, or in a hydro-electric/irrigation/conservation scheme in the Snowy Mountains. (To put the Snowy Mountains Scheme into perspective, its total project cost was about 6 percent of one year’s GDP, which would come to about $100 billion in today’s terms – enough to fund an east coast high speed rail and a proper national broadband system, with change left over to fix up the Pacific Highway.)

The withdrawal of state paternalism

The Dunstan Government in Adelaide – “the city of churches” – was the first to push socially progressive legislation on censorship, anti-discrimination, consumer protection and decriminalization of homosexuality, while encouraging multiculturalism and engagement with Asia. Nationally the Whitlam Government was to follow a similar reforming zeal. In social policy state paternalism was on the way out, and Labor was leading the change.

In the economic sphere it was the Hawke-Keating Government that made the greatest progress in withdrawing state paternalism and giving freer rein to market forces – implementing tariff reform, significant deregulation of the finance sector, a float of the exchange rate, and effective competition policy.

An enduring myth of Australian politics is that Labor has been the party of “big government”, but in reality Labor has been the party of liberal reform. The myth, which has so well-suited conservative politicians, lies in selective interpretation of what is meant by “big government”, and, more basically, the assumed role government is to take in our lives.

We often look for quantification of terms such as “big” and “small”, and one that stands out is the size of government spending in relation to GDP – a metric with huge variation even among the 34 member countries of the OECD (from 23 percent in Mexico up to 58 percent in Denmark, with Australian near the lower end at 35 percent).

But in itself such a metric carries little meaning. A government can be “small” by this measure, while imposing a heavy burden of oppression on its citizens, as was the case with many South American countries in the 1980s. It doesn’t take much expenditure to run a surveillance and police apparatus. Government can be so small as to be absent, leaving citizens to the ravages of gangs and warlords, as in failed or failing states. At the other end of the spectrum are countries with “big” government expenditures, such as Sweden and other Nordic countries, which guarantee civil liberties and offer an attractive environment for business investment.

In most democracies, including Australia, government expenditure has grown because the legitimate demands citizens have placed on government have grown.

But what are those demands and what makes them legitimate?

The wisdom of a US Republican

Abraham Lincoln stated the role of government:

“The legitimate object of government is to do for a community of people whatever they need to have done, but can not do at all, or can not so well do, for themselves–in their separate, and individual capacities.” 

That statement was made 160 years ago in a different political context but it encapsulates what most independent economists and political scientists still see as the legitimate role of government.

It has two important parts.

The first is about what people cannot do at all (in their separate and individual capacities). That’s uncontentious: even those on the hard right accept that governments must guarantee the integrity of the currency, provide national defence, and maintain internal security – in fact on these last two functions they tend to go to extremes.

The other is about what people cannot do so well, and this has become contested territory, particularly in the last 35 years since the rise of the Thatcher Government in the UK and the Reagan Government in the USA. If one believes that the private sector always does better than government, then logically the government should not be involved in anything the private sector can conceivably do. It should vacate education, health care, research, environmental protection and so on – all areas where there is some possibility of private sector provision.

The Howard Government, for example, adopted what Minister for Administrative Services David Jull called a “Yellow Pages” test for what should be in and out of government: if an activity appeared in the Yellow Pages directory it should be left to the private sector.

It’s an idea of government, when taken to an extreme, would see a very diminished state. Of course any government pursuing such an agenda confronts electoral opposition, which means that governments of the right concerned with political survival aren’t don’t go the whole hog of privatisation, but the vision remains as an aspiration.

Opposition to the “small government” aspiration is construed as a reaction of a people who have become too accepting of the “nanny state” and too recalcitrant to accept the need for change. Christopher Pyne’s reaction to the Senate’s blocking of his higher-education “reforms” is a textbook illustration of this attitude – we just don’t know what’s good for us.

Those on the right fail to notice the irony of this form of paternalism. And the idea that there is validity in the idea that governments can do some things better than the market doesn’t enter their ideologically-primed minds.

There is a mountain of evidence, however, of the economic benefits of publicly-funded education, health insurance, transport infrastructure and other services where governments do a much better job than the private sector. There is similar evidence that only governments can efficiently mobilise resources for projects with long-term benefits, such as transport systems and broadband networks. There is a whole established economic literature on the limits of markets – the textbook and real-world theory of “market failure” – but politicians who are confident in the intrinsic competence of the private sector can safely ignore evidence and argument, particularly when they have an unshakeable belief in their own economic competence.

The most extreme version of this belief is not just that the private sector is better, but that the public sector is entirely worthless, as captured in the explicit “beliefs” of the Liberal Party, where it is stated that: “businesses and individuals – not government –  are the true creators of wealth and employment”, implying that the efforts of police, teachers, nurses and others on the public payroll are worthless, as are public assets such as highways and art collections.

Even those few on the right who do accept that markets fail tend to respond with the claim that government failure is always worse: it’s better to put up with the lesser evil of monopolisation, injustices of asymmetric market power, administrative duplication in the private sector, the short-term focus of corporations and so on, than the greater evil of government incompetence and waste.

Public choice theory

The idea that incompetence and waste are inevitable in government undertakings is given a fig leaf of academic respectability in a theory known as “public choice”, which has been popular in some Australian universities (the nurseries for treasury officials and most politicians).

The nub of the theory is that governments face inexorable pressure to grow. Public servants and ministers, whatever their left/right labels, always enjoy the benefits of bureaucratic expansion, just as (it is supposed) business executives enjoy managing a big company rather than a small one, and voters’ demand for more services is insatiable. President Reagan summarized public choice theory even more succinctly when he said “Government is like a baby. An alimentary canal with a big appetite at one end and no sense of responsibility at the other”.

While the expansionary aspirations of business executives are kept in check by shareholders (a naive assumption), governments have the power to tax – or, better still, to incur debt and to push the pain of repayment on to future voters (an argument that ignores the power of oversold IPOs and share issues to lure mug shareholders in the private sector).

A related aspect of the theory is that governments offer too many openings for rent-seekers – those who can use political clout to secure privilege such as a protected monopoly or a favourable re-zoning of land. It’s best not to have the agencies which have the discretion to offer such privilege.  (There is no acknowledgement that good government is about upholding community interests, and that in an unregulated laissez faire situation monopoly and collusion will prevail.)

The net conclusion from public choice theory is that good government is about applying countervailing pressure to these drivers of growth.

The ultimate model of government to emerge from public choice theory is that government is just another “interest group”, like the trade union movement or the mining lobby – admittedly with some differences, but still with the motivation of self-interest – rather than any notion of the public interest or public service. It may hold certain assets, but only as a reluctant owner, rather than as a custodian of the common wealth. (Listen to the language – it’s not about “our” government or “your” government, but rather “the” government.)

The weakness of public choice theory is that it rests on weak or false assumptions: an infantilized view of the electorate (as if people are too stupid to see the connection between taxes and services); an expansionist assumption about the motivations of public servants; and  a complete dismissal of any motivational idea other than self-interest.

It also misinterprets the relationship between people and the governments they elect, a misunderstanding illustrated in the heated debates over privatisation.  Governments pushing privatisation behave in the same way as investment bankers may – “sell BHP, buy RIO”, “sell the electricity grid, buy tollways”. That detached role is not the way the public see it.  It’s their government, with a custodial responsibility for their assets.

The outcome of these ideas – weakened and distanced government

This faith in the intrinsic virtue of “small government” may arise from genuine belief or it may be a rationalization to give respectability to ideas serving the interests of those who can profit (in the short run at least) from a weakened state – crony capitalism in other words.

The vision of the public purpose is that it is best served by the government retreating as far as possible.  (An extreme manifestation is to dismiss the very idea of public purpose. If, as British Prime Minister Margaret Thatcher said there is “no such thing as society”, logically there can be no “public purpose”.)

Governments infused with these ideas grudgingly go on providing public services, only because it would be costly to their survival if they did not, and a less fiscally responsible government may take their place. That probably explains the Federal Liberal Party’s “beliefs” and electoral strategies, which are focussed almost exclusively on keeping Labor out of office, rather than articulating any agenda – it’s not “negative politics”, just a frank description of the political scene through the eyes of a Party member. It’s a paternalistic guardian, rather than a party of competing ideas. That’s why it’s so devoid of inspiration: it’s hard to inspire political enthusiasm when your political aspiration is to close the show down.

A related idea is that if it’s hard to wean an electorate off public spending, then its best to do so by diverting the composition of government outlays away from spending on services and on to spending on cash transfers. Rather than providing schools, clinics, roads and so on, public spending is best directed at cash handouts (such as family benefits) or tax concessions (such as those applying to superannuants). That way some of the evil of public spending can be ameliorated, because the final spending decisions are in the hands of individuals rather than public servants. Choice is left to the individual. (In reality choice is left to those who , through advertising and other market manipulations to shape people’s consumption.) 

The Howard Government’s generosity with the proceeds of the mining boom, which went to cash transfers for “middle class welfare” while spending on education and infrastructure was squeezed, is illustrative of this philosophy. When we look at the growth of government expenditure over the last 50 years, we see that spending on government services has risen modestly, from 15 percent to 18 percent of GDP, while the growth in personal transfers has doubled from 4 percent to 8 percent of GDP. At the Commonwealth level the trend is even more marked.

It would be wrong to attribute these attitudes entirely to any one party. They may be most clearly manifest in the Liberal Party, but they have infected Australia’s public discourse to the extent that it is now accepted almost without question that the only way to achieve a fiscal balance (in itself an over-simplified goal) is through cutting expenditure rather than raising revenue.  (When did you last hear an ABC journalist, quizzing a minister about a budget cut, ask “Yes Minister, but have you looked at the possibility of raising revenue – after all Australia is getting by with very low taxes?”)

It was a Labor Government in the 1980s that instituted a set of “reforms” which ultimately saw fiscal management take over from economic management – to the extent that documents such as those comprising the Charter of Budget Honesty and the Intergenerational Report effectively posit fiscal management (in reality fiscal stringency) as the sole aim of economic policy. Economic policy should be about the whole community’s interests, while fiscal policy is simply about public expenditure and revenue.

“Reforms” under the rubric “new public management” transformed the public servant from a servant of the public to a servant of the minister, with responsibility not for the public interest, but for controlling expenditure within his or her own agency’s appropriation. If budgetary savings can be made by denying services or by shifting costs “off budget” (for example from education departments to parents, from health departments to private insurers), that’s good management, even if there is a net economic cost to the community.

Gone are the ideas of benefit-cost-analysis, which consider the community’s costs (e.g. travel time in location of schools and libraries).  At best benefit-cost-analysis is used only as a tool for dealing with limited funds for capital spending, to get the best out of miserly allocations.

And gone is the idea of the common wealth.  Even the name of our nation – The Commonwealth of Australia – looks like an anachronism in this brave new world of “small government”.

Restoring the common wealth

There’s no need to go looking for some new role of government – Lincoln laid it out.

Of course there are changes in how this role is realised. Demographics change, which means there is more need for spending on age pensions. Technologies change, which means that more options for health care become available, while some functions once reasonably reserved for government, such as telecommunications, can have more private sector involvement. And relative prices change, which means that while many items of private consumption (cars, travel, entertainment) have become cheaper, some services provided by government, including education, health care and policing, necessarily remain labour-intensive and therefore expensive: it is quite reasonable that relative expenditure on these public services should go on growing for some time (a consideration entirely overlooked in banal fiscal documents such as the Intergenerational Report.)

A restoration of Lincoln’s common-sense understanding of the role of government or the value of the common wealth isn’t going to arise from a simple change in political actors. There is no messianic political “leader” who will take us out of this neoliberal darkness. Public ideas develop over time, through the contributions of many. The task is up to all of us, and let me conclude with some advice to those who have voice in the community.

Politicians (established and wannabe) – question the assumptions of your platforms and of the strategists in your party. Take it on yourselves to learn about the workings of the “mixed economy”, that has contributed so much to Australia’s prosperity in the past. Learn a little basic economics about how and why markets sometimes work well and sometimes fail. 

Journalists – put at least as much effort into reporting on public policy as you do on politics, and remember that fiscal management is only one small aspect of economic management. Remind Australians of some hard facts, such as our low tax base.  And don’t let a concern for “balance” displace your concern for seeking the truth. Don’t be afraid to expose lies and hypocrisy.

Public sector unionists – don’t campaign about your jobs. Every time you complain that some privatisation or cutback will cost your members’ jobs, the public interpretation is that the activity in question is overstaffed, playing straight into the hands of your detractors. Campaign about public services – and then your jobs will be secure.

Business lobbies – it may be clever in the short term to campaign for lower taxes or cuts in public spending. Such measures will naturally help your immediate profitability to the pleasure of your shareholders and managers. But remember that the success of capitalist economies rests on a wise mix of public and private goods, and on public policies that link contribution to reward and protect the vulnerable. It has taken strong governments to protect capitalism from its own self-destructive tendencies.

“Social progressives”, “greens”, “the left” – engage with economics.  It’s not difficult. If you don’t, others will, perpetrating the absurd but glibly appealing ideas that there are conflicts between economic and social objectives and between economics and environmental objectives. If you don’t state your case, these false ideas will dominate.

Australia and similar democracies have done well because economic progress  has been a shared venture between the public and private sectors. Our prosperity is built on that shared venture, including the accumulated contribution of governments in education, health care, physical infrastructure and a host of other services that we’re too inclined to take for granted.

As Aristotle warned “That which is common to the greatest number has the least care bestowed upon it”. We need care for our common wealth.

Ian McAuley is Adjunct Lecturer, Canberra University.

The ideas in this paper are expanded in a book ‘Governomics: Can we afford small government?’ written by Ian McAuley and Miriam Lyons, which was published on 1 May 2015 by Melbourne University Press.

Fairness, Opportunity and Security
Policy series edited by Michael Keating and John Menadue.

Different possible conceptions of the responsibilities and roles of government are an important backdrop to the policies that will be examined later in this series of articles. The purpose of the present article is to show that despite the ideological debate between the extremes on the Right and the Left of the political spectrum, in practice:

• The responsibilities of governments have changed little in the last thirty years
• The roles have changed, but changes in regulatory regimes and the ‘marketisation’ of some services has enabled governments to better fulfil their continuing responsibilities. 

Government responsibilities

At the end of World War II governments for the first time took responsibility for delivering full-employment and introduced a much more comprehensive system of social welfare. In addition, the government commitment to national development was continued and enhanced through an expanded migration program and the encouragement of new industries, such as automobile production.

This enhancement of government responsibilities was widely supported, including by all sides of politics, and for a long time there was no significant challenge to this broad scope of government responsibilities. Indeed probably the most divisive issue affecting government responsibilities in the last seventy years was State aid for non-government schools, and even that issue was resolved more than forty years ago.

In more recent years, however, the extent of government responsibilities has been questioned by some people, mostly on the Right of the political spectrum. The Treasurer Joe Hockey, for example, has mused about whether Australia should continue to support what he terms ‘an age of entitlement’.

This criticism is, however, essentially based on a narrow conception of government responsibilities promulgated by some neo-liberals. In their view, as far as possible individuals able should be free to pursue their own private interests and the State’s responsibilities should be limited to the provision of a narrow class of goods that the market cannot provide, such as defence and law and order.

The alternative mainstream view is that as citizens we are interdependent and have a mutual obligation to other members of our society. In this interdependent society there are some social goods and services that should be available to all.

The reality is that the vast majority of Australians seem to endorse this broader conception of our interdependent society. Accordingly, and notwithstanding criticism of the ‘age of entitlement’ and the scope of the welfare state, most Australians want to maintain present government responsibilities, and have even supported some further expansion in recent years.

For example, very recently there has been widespread agreement that assistance to disabled people and for child care should be extended. In addition, over time technological progress and increasing international economic integration (globalisation) have inevitably led to structural adjustment in some industries, but governments continue to be held responsible for national development and economic growth, even if they have felt that they needed to change the means. As a result government regulation and the ratio of government expenditure to GDP have increased under both the major political parties.

Indeed insofar as there is a difference between the two major parties, what stands out is that Labor has more tightly targeted welfare, while the Coalition has sometimes eased means testing and extended government subsidies to essentially private activities such as health insurance. So although this may well be an ‘age of entitlement’, that ‘entitlement’ seems to be deeply entrenched historically and is what we Australians continue to expect.

It would be prudent therefore for strategic policy development to be based on the premise that there will be no major reduction in government responsibilities. On the other hand, it can equally be expected that the public will continue to demand improvements in the performance of those responsibilities, and this may well lead to further changes in the role for governments. 

The changing role of governments

Since the economic reforms, which started in the mid-1980s, there has been a major change in the role of governments. These reforms are sometimes described as neo-liberalism or economic rationalism, probably because they have been distinguished by governments now making greater use of markets and/or market mechanisms to achieve their policy objectives.

Some people on the Left, however, are critical of this marketisation of service delivery and the associated change in regulations. They argue that these reforms have changed the role of government in a way that is inconsistent with the underlying purpose of government. Instead the critics on the Left argue that in a mutually interdependent society, the role of government is not only to ensure the provision of social goods and services. In addition, government should be the sole provider, so that services are common to all, freely or almost freely available, and used collectively.

Accordingly these critics from the Left are concerned about the changing role of government as other non-government and/or private groups have been allowed to provide social services on behalf of the government, user charging has been introduced, and clients are allowed to choose their service provider. These critics sometimes also question regulatory changes that provide less direct government control and rely more on creating incentives and disincentives.

The alternative view taken here is that while the means employed by government have changed, government responsibilities and their values, fundamental goals and objectives have not changed significantly. In short, this has meant a shift in the role of governments in favour of governments ‘steering not rowing’.

Furthermore, these reforms in favour of a greater role for markets were essentially driven by the need to respond to changes in our economic environment and changes in our society.

First, the experience of stagflation in the 1970s and beyond showed that macro-economic management could no longer guarantee full employment unless our markets became much more competitive and flexible. Hence the importance of tariff reductions, competition policy and the shift to enterprise bargaining to determine wages and employment conditions. And while much has been achieved, more still remains to be done before the full competition policy agenda is complete, especially in the area of infrastructure pricing.

Second, there have been major changes in the delivery of public services in response to changes in the character of our society. In particular, we have become a much better educated and more individualistic society. People are now more likely to question authority and to express their dissatisfaction with long-running programs which don’t seem to be making adequate progress towards achieving their objectives. Often the coordination of programs is at fault and people are sick of being shuffled from one government agency to another.

Another major concern is whether the traditional program approach of one size fits all continues to be appropriate, if it ever was. There is now an expectation that, within reason, services will be tailored to meet the needs of each specific individual, and that often the individual is the best judge of their own needs.

In effect, equity has been re-defined. Uniform provision of public services directly by the State, and based on the same treatment for all, is no longer always seen as equitable. Today the objective of many public services is to achieve equality of opportunities, or even more difficult, to achieve equality of outcomes. But in that case uniform service provision is likely to be insufficiently responsive to individual client needs to meet these new and different objectives. Instead individual clients need to be able to choose the combination of services that best meet their personal needs, and that usually also requires a choice of the service provider.

For these various reasons governments have been seeking to provide more client choice by making greater use of markets for the delivery of human services. It would be a mistake, however, to assume that government has lost its responsibility and power to ensure the provision of these services. Governments still provide much of the funding, and so governments can largely control access to the market by both clients and providers for these public services. Governments can also largely set the quality standards by a combination of regulation and their purchasing power, and frequently governments influence the pricing structures.

In short markets can be managed by governments to induce willing changes in behaviour, consistent with government objectives. This new means of retaining government control is a considerable achievement in an age where:

• More critical citizens need to be persuaded and command and control regulation is much more difficult to sustain; and
• These critical citizens have ready access to legal redress to contest government decisions where they disagree.

As will be discussed in subsequent articles in this series, much still remains to be done in improving government services. Better coordination of health services for people with chronic conditions and education and training and other support services for the most disadvantaged people is especially important. Better provision of services in both these areas may well involve appointing a budget holder who would coordinate the provision of multiple services for each client using a market-based approach to achieve best value for money.

Conclusion

The change in the role of governments in favour of making greater use of markets essentially represents a change in means, often in an attempt to enhance or restore the power of government to achieve their traditional responsibilities and objectives.

The attractiveness of this shift in favour of markets is that market-based instruments can be structured to create desirable incentives for individual actors to pursue the government’s policy objectives. Even globalisation, while it releases very powerful forces, can usually be managed now that the government has floated the exchange rate and the economy is sufficiently flexible to achieve the necessary real price adjustment to external shocks.

In effect governments can aim to construct and manage markets so as to create a synergy between the objectives of the individual, or individual interest groups, and the broader objectives of society. In that way the apparently independent activities of free agents become the instruments of government, and these instruments are politically attractive because they are the least coercive and most effective possible. To paraphrase Adam Smith, the government can guide the “invisible hand” of markets so as to ensure that individuals pursuing their own self interest are also acting in the public interest.

Mike Keating AC was formerly Secretary of Finance and Secretary. Prime Minister and Cabinet.

Fairness, Opportunity and Security
Policy series edited by Michael Keating and John Menadue.

Good government must be based on some broadly shared values that inspire and enthuse us.

We can accept that our leaders must make some compromises from time to time, but we need to know ‘what they stand for’. We look for leaders who have conviction.

For example, we need to discuss tax reform but so often it becomes a technical discussion when what is really at stake is the sort of society we want and how tax can help us in the goals we seek. Tax is a means to an end. It is not an end in itself. Oliver Wendell Holmes put it succinctly that taxes are what we pay for a civilised society. That is where the discussion about tax should start.

We also need good managers but management also is a secondary issue. The important issues are the values and principles that should guide policy and programs which in turn must be managed well.

Unfortunately values, principles and ideas have given way to ‘small target’ electioneering and the marketing of products. Money has replaced membership as the driving force of election campaigns.

Principles as the basis for policy.

We need leaders and political parties to express themselves in a clear set of principles which accord with the best of Australians’ values. Otherwise the political contest is reduced to satisfying short-term materialist ‘aspirations’, appeasing vested interests and managing the media cycle.

From community values a set of principles of public policy can be developed. Those principles can underpin a coherent set of policies and programs which implement those policies.

Values > principles > policies > programs.

Compromising on issues such as refugee policy simply legitimises those who exploit people’s fear and is likely to drive out sensible and reasonable political debate and confuse supporters.

Many of us take an optimistic view of human nature and recognition of the importance of the public sphere where people realise their full capabilities. These ideas can be expressed in consistent and coherent principles such as fairness, opportunity, stewardship, the common wealth, including enhancement of social environmental and institutional capital and protection of natural resources.

Today, Australia faces great challenges – climate change, population ageing, commodity based exports, deficits in human capital and a weak base for public revenue. The politics of ‘what’s in it for me’ discourages us from facing these challenges, for there will have to be trade-offs. Some will have to pay more than others and some will have to forego benefits now for the sake of longer term benefits. Such transitions can be painful, but are more likely to gain support when people understand the principles underpinning public policy.

When a political party is unified around a set of principles it can still have a robust debate about how to give effect to those principles. But it would be in control of its message because its parliamentary representatives can engage with the electorate in a consistent and sincere voice, with less reliance on ‘talking points’ and spin and with less concern with the immediate reaction of focus groups. Party supporters would be much more prepared to accept political compromise if they know that there is strong leadership and there is broad agreement on key values and principles. Leadership has to be patient and consistent around these values and principles – and never go backwards. Authenticity and sincerity are then easily recognised. 

From values to principles

Values such as fairness, freedom, citizenship, stewardship and ethical responsibility, would be generally accepted by most people. As the values are translated into practise they can be further defined as principles that then lead to policies, e.g. the value of fairness can be expressed in the principle of a stronger link between contribution and reward- a link which has become severed by hugely disproportionate executive pay, high returns to rent seekers and financial speculators and the long head-start of inherited wealth.

The following is indicative of a set of values and their expressions in principles.

Fairness/equity

A ‘fair go’ is primarily about economic opportunity.

People should be provided with a good education and those who put it to socially useful ends should be rewarded. Governor Lachlan Macquarie was no socialist but his ‘tickets of leave’ gave the outcasts and underprivileged of this country another chance. We built a nation this way. We must give a chance for newcomers and all people to have another opportunity.

Fairness promotes social mobility and limits division and resentment.

Fairness should not be restricted to education.

The path to prosperity with fairness is through productivity and well-paid employment rather than government handouts. The Nordics have demonstrated that education and incentives for participation do produce fairness and economic prosperity.

Fairness implies that we are tough towards ‘bludgers’, whether they be tax-dodgers, the vulgarity and indulgence of  those with inherited wealth, protection from competition, government hand-outs and favouritism or cheating on social services.

Fairness implies full employment as a macro-economic goal to ensure human capabilities are not wasted.

Areas where we fall short in fairness include

• Unfairness in taxation,
• Neglect of early childhood education,
• Treatment of the needs of indigenous people and refugees,
• Diversion of education funding to wealthy schools,
• Inadequate ODA.

Freedom

We all have rights to the extent that they do not lessen the rights of others.

Except where the rights of the vulnerable are at stake, the government should not intrude into the private realm.

Denial of freedom does not happen overnight; it is eroded step by step.

We must be vigorous in promoting our freedoms – freedom of speech, freedom of religion, the rule of law and free and fair elections.

The potential abuse of power should be minimised by the separation of powers and the separation of church and state.

Areas where we fall short in freedom include

• The growing power of cabinet and executive which is not adequately balanced by parliament.
• We have no Human Rights Act.
• We have reduced freedom as a result of counter-terrorism legislation.
• The media increasingly fails to protect our freedoms and often facilitates abuse of power by lobbyists.

Citizenship

We are more than individuals linked by market transactions.

Our life in the public sphere is no less necessary than our private lives. As citizens we enjoy and contribute to the public good. It is where we show and learn respect for others, particularly people who are different. It is where we abide by shared rules of civic conduct. It is where we build social capital – networks of trust. We need to behave in ways that make each of us trusted members of the community. ‘Do no harm’ is not sufficient.

Citizenship brings responsibilities – political participation, vigilance against abuse of power and paying taxes.

Areas where we fall short in citizenship include

• Our withdrawal into the private realm; there are growing gated communities, private entertainment,
• Private rather than public transport and resulting reluctance of influential people to support investment in public transport.
• Disregard of neighbours.
• Government subsidies, private health insurance and private schools that discourage the coalescence of socially mixed communities around shared public schools and public hospitals
• NGOs have increasingly become part of government.
• Tax avoidance by large corporations. 

Stewardship

We have inherited a stock of assets or capital; environmental (forests/water), public and private physical capital (roads/ports), human capital (education), family capital (family and friendship bonds), social capital (trust), cultural capital and institutional capital (government and non-government institutions). That stock of assets must be retained and where possible enhanced.

We must use our resources as efficiently and productively as possible.

Areas where we fall short in stewardship include

• We are amongst the highest per capital carbon polluters in the world.
• We are placing a heavy strain on the planet which prejudices our grand children’s future.
• We waste water and degrade the land.
• We continue to log old growth forests.
• We are degrading the Great Barrier Reef.

Ethical responsibility

Those in prominent office should promote those qualities which draw on the best of our traditions and the noblest of our instincts.

The duty of those with public influence is to encourage hope and redemption rather than despair and condemnation, confidence rather than fear. It is to promote the common good – to encourage us to use our talents. It is to respect truth and strengthen learning to withstand the powers of populism and vested or sectional interests. This would set a tone of public discourse which nurtures public institutions

Areas where we fall short in ethical responsibility include

• Leaders, who appeal to our worst instincts, e.g. dog whistling on refugees.
• Executive salaries,
• Undue influence of vested interests and corporate lobbyists.
• Those in public office should help the community to deal with difficult problems which may require painful adaptive change, such as climate change, rather than provide the false comfort of ignoring or downplaying them.
• Tax avoidance by large companies.

We need leaders and institutions that make clear what they stand for on key values and principles which are then translated into policies and programs.

Fairness, Opportunity and Security
Policy series edited by Michael Keating and John Menadue

We speak often about the need for new ideas and policies to fill the void in the public debate.

We will be examining these issues in this series Fairness, Opportunity and Security.

But I think there is a prior problem.  We need political reform to restore trust in our political system and our polity.

In the community there is a pervasive sense of powerlessness and disillusionment with governments, parliament and political parties.  We are tired of one liners, zingers and endless rhetoric. We want to be treated as adults in a serious discussion, on issues like climate change, fairness and our colonial type dependence on the US.

That disillusionment goes much wider to many other institutions-e the churches, the media and corporations. In late April this year the Governor of the Reserve Bank Glenn Stevens criticised Australia’s major financial institutions for treating their customers poorly and forgetting that the financial system relies on trust. He spoke of ‘the erosion of a culture that placed great store in acting in a transparent way’ He added ‘where trust has been damaged, repair has to be made’ In early May this year the former Secretary of Treasury Martin Parkinson told the Australian Financial Review ‘I think our institutions are being eroded in their capabilities and eroded in public trust’

But my focus here will not be on corporations or government departments. It will be chiefly on our ‘political’ institutions.

In examining our institutions, I make two important assumptions.  The first is that we need institutions for stability, cohesion and progress.  The second is that over time power exercised through institutions is always abused, even by the best of our fellow citizens. Reform and renewal must be an ongoing process.

In January this year Essential Research outlined our alarming lack of trust in institutions. Asked how much trust they had in institutions and organizations the interviewees responded as follows.

ABC	53%
High Court	53%
Reserve Bank	48%
Charitable organizations	44%
Environment groups	33%
Local Councils	32 %
Commonwealth public service	32%
Newspapers	30%
Online News Media	27%
Federal Parliament	25%
The News media	25%
State Parliament	24%
Trade unions	23%
Business groups	23%
Religious organizations	22%
Political parties	14%

 

It is disturbing reading.  Other surveys tell the same story. Perhaps it is noteworthy that the three most trusted institutions are public institutions, the ABC, the High Court and the Reserve Bank.

The Nordics are probably the most successful societies and economies in the world. As I have argued the key to their success in my view is trust- trust of the government by the governed and vice versa. There is preparedness to pay quite high taxes based on a confidence that the government will spend money wisely. If only!

Major political parties in Australia are losing support.  In the 1970s over 90 % of people were basically committed to a major party. At the 2013 federal election it fell to less than 80%. According to an ANU Social Research study 43% of Australians at the last election believed it did not matter who was in power. In particular young people are opting out. About 25% of eligible people did not enrol at the last federal election, did not vote or voted informal. According to a recent Lowy Poll 40% of Australians did not believe that democracy was the best form of government.

Membership of the ALP and the Liberal party has declined from about 300,000 after WWII to about 50,000 today.  No one will admit how bad the numbers are. Money, not party membership has replaced membership as the driving force of political campaigns.  It is called ‘donocracy’ in the US.

In 1950, 44% of Australians claimed to attend church at least monthly. It is now about 20% and falling.   Almost all the churches have been damaged by the cover up of sexual abuse.

Union membership is now down from over 50% in the 1950s to about 20% of the workforce today. In terms of trust unions are on a par with organizations like the Business Council of Australia.

This breakdown in confidence and trust in institutions is not because we don’t want to participate in institutions in our community.  The republic referendum some years ago was lost because of the quite strong view by many Australians that they wanted to be directly involved in choosing our future president.

I don’t think the alienation has occurred so much because institutions have changed.  The problem is that they haven’t changed enough. The ground has moved beneath them and they have not responded. The information and education revolution has made us much better informed and much better equipped to participate in institutions, but we are often denied the opportunity.  Women particularly have more time to be involved in institutions outside the family, but they are often excluded.

The media and particularly TV have contributed to the alienation.  Public figures are trivialised and their personal foibles take pre-eminence over temperate and informed policy debate.  At election times, what matters is the swinging voter in the swinging electorate, rather than the important issues of concern to the wider community.

We are clearly not the innovators we were a hundred years ago in institution building.  In 1856 Victoria led the world when it introduced the secret ballot for parliamentary elections.  It was known internationally as the ‘Australian ballot’.  In 1859 all male British subjects in the eastern states and South Australia had the vote.  In 1894 South Australia was an international pacesetter in votes for women.  The first democratically elected Labor government in the world was in Queensland in 1899. In 1901 six disparate states joined together in our federation.

How then can we renovate at least some of our public institutions?

Politics is about how power is exercised and for whose benefit.  It is a noble calling and disparaged too much, particularly by those who want untrammelled private power for themselves.  But to change the way our institutions operate, faces one major obstacle – the power of those who benefit from the present system.  Insiders want to hang on to power.

In many pre-selection ballots for either the ALP or the Liberal Party, a hundred or so members select the party candidate, yet in the wider electorate there are probably 40,000 to 50,000 supporters.  As a result of declining memberships and tight control, successful candidates are, not surprisingly, insiders – staffers of politicians, friends or relatives of faction leaders. Many of these new ‘white bread politicians’ have limited life experience.

There are possible options to address some of the clear democratic deficiencies in our major parties.  We need to debate them.  Party members in federal electorates could directly choose delegates to federal conferences and break the power of state officials.

Whilst guarding against abuses the community as well as party members should be able to vote in party pre-selections for parliament.

Unless the political parties broadly represent their voter constituencies, we will continue to tread the slippery road of personalities and political spin, rather than addressing the real issues and concerns of the community.  While the major parties refuse to treat the community seriously and run away from public discussion, their natural constituencies are disenfranchised.  Those that are really enfranchised are a small group of party power brokers and aspirational swinging voters in swinging electorates.  Because the major parties are out of touch with their constituencies, the debate on the big-ticket items runs into the sand – reconciliation, the republic, relations with Asia and climate change.

Parliaments are in need of renovation.  The cabinet and party machines dominate parliament.  The executive has become arrogant ‘Question time’ is ‘spin time’.  I am sure the community would welcome parliamentary renovation which should be guided by the principle that the separation of powers must be enhanced whether it is to discourage a Prime Minister dragooning parliament or a minister intimidating the judiciary.  Particular reforms could include: four year fixed term federal parliaments to discourage excessive and almost continual electioneering; an independent speaker to encourage a more inclusive, open and less adversarial parliaments; regular audits not only of the entitlements of MPs but also their performance; more conscience votes by MPs with less party discipline on ‘non-core’ issues.

To assist members of parliament to counter the power of the cabinet and the public service the last parliament established a Parliamentary Budget Office. It provides independent and nonpartisan analysis of the budget cycle. It was a good start. But its work is restricted to budgets. Similar offices should be established in such areas as health, defence and foreign affairs. The research resources of the Parliamentary Library should also be enhanced. In the development of Gough Whitlam’s policy program the Parliamentary Library was a critical enabler.

We need an improved parliamentary committee system where hopefully we can begin to see again the art of negation and compromise. The Senate has shown that improvements are possible.  A good start in our next parliament would be an all-party committee to consider ways in which the performance of the parliament could be improved and the power of the executive contained.

We need a broad agenda for parliamentary reform.  The major party that is credible on parliamentary reform will reap a large electoral dividend. The best way for Tony Abbott and Bill Shorten to prove their bona fides as parliamentarians is to demonstrate by actions how they value the Parliament and use it as their forum and not television grabs, and talk back radio. What a pleasure it would be to see the parliament as a lively forum for debating policy and asking genuine questions to elicit information rather than a means to score politicall points. If only our politicians would seriously endeavour to find common ground by starting on such issues as senate electoral reform, political donations and ending the abuse of power by lobbyists. Leadership by Tony Abbott and Bill Shorten in these areas is the best way to restore confidence in parliament and politics. Don’t talk about it. Do it.

At the political level the Hawke Government provides us with an example of the way we need to proceed. It was about building consensus- within his government, within his party, with the opposition and with the community which responded to this consensual style of leadership by being prepared to consider the need for reform. Consensus building was politically appealing and effective in policy outcomes. We are a long way from this style of politics today.

Institutions, like people, are all prone to error and abuse of power.  Robust democratic institutions and democratic debate are critical. Too often we avoid addressing institutional failure by suggesting that they are all leadership problems.  ‘If only we had a better Prime Minister, or a better Chairman, all would be well’.  But all leaders inevitably disappoint us.  We need institutions and a public culture which are in good order.

In addition to renewal of our democratic institutions, I suggest there is something even more essential – the values and conventions that we need to hold in common. Decades of failure to keep promises have taken an inevitable and heavy toll. Fairness, respect for others, openness, integrity and trust, are the glue that hold us together.    A democratic and free society will remain free only if the virtues necessary for freedom are alive in our community.  Democracy cannot be separated from public morality. The democratic project and institutions within it must be informed by what is right and true. Every society needs a moral compass.

We speak about the failures of our political leaders to outline policies. That is valid criticism. But behind that failure is an even more important issue, the failure of our institutions and the institutional processes necessary to assert the public interest in the face of very powerful vested interests.

Like individuals, institutions also depend on trust. That trust must be shared and reciprocated.

Moral behaviour is in the end about how our words and actions enhance human dignity and human flourishing.  Robust and well functioning institutions are an important means to that end.

We have a lot of work to do.

Fairness, Opportunity, Security.
Policy series edited by Michael Keating and John Menadue.

In Part 1, I pointed out that the Westminster style two-party system is in trouble.

Part 2. Implications for Policy Making Practice.

At least four implications would seem to follow from the above analysis.

The first concerns the need to create systemic capacities to address single issues. As Bernard Crick observed many years ago, the present forms and processes of parliament under the Westminster system are tantamount to a continuing election campaign. This suits majoritarian or winner-takes-all government. This mise-en-scene was designed for an era in which the major parties championed different ideologies and different medium-term agendas. It assumed that these parties enjoyed support from more or less half the community. It also assumed that their approach to particular domestic issues as they arose could be derived from their distinctive overarching programmes.

Neither of these conditions now holds. There is no party platform or canonical document from which to infer attitudes to gay marriage, euthanasia, the financial crisis, live cattle exports, refugees or Gonski: to nominate just a few recent matters. Each of these issues is associated with distinctive alignments, distinctive agendas, distinctive coalitions and distinctive narratives. Thus there is no longer any natural nor enduring majority on many if not most of the issues that are on the current political agenda.

Furthermore, the present system has almost no capacity to create a political conversation around single issues that is at least partially separate from the struggle for office between the major parties. It lacks any capacity for what might be termed a ‘contemplative’ phase in the unfolding of contested policy issues.

Second (really a corollary of the preceding point), coalition-building needs to be made routine within the structure of the policy making system. As a large literature attests, where the community is fragmented and pluralised, a coalition symbolises wide support. Coalitions add important public cues to the political equation – cues that, in the majoritarian era, were largely delivered by major party brands.

Third, to the extent possible, bi(multi)partisanship opportunities need to be explored. As noted above, on many issues there is now substantial overlap between one or other of the parties. Yet you would never know from the present political conversation. A critical moment in the public policy process occurs at the point of time at which an issue first enters the political agenda. For recent examples, think of McClure, Gonski, Higher Education funding, the debate over the deficit. If the agenda entry phase in the policy process could be made more transparent, the opportunity to explore the scope for at least partial cross-party alliances would be greatly extended.

In a strategic phase, the political conversation might focus on: Why is this issue significant? What establishes its claim to a place in the national conversation? What are some of the options for dealing with it? If the scope for agreement around such matters could be made at least partially transparent, the public conversation might thereafter better focus on real areas of contention. This would need to occur before the executive makes more immediate policy choices.

And finally, opportunities for ad hoc public engagement need to be considerably extended. Digital media provide a variety of opportunities for ad hoc groups of citizens to come together around particular issues and to advance policy proposals. There are already examples of this occurring beyond the formal system. But the latter has no or very limited capacities to connect to this activity.

Recall the way citizens proposed a motion at a local branch and then followed its advance to regional and later national party conferences. This suggests how such processes now need to be orchestrated around single issues. Engagement needs to be serial and reciprocal, not sporadic or one-off. If groups of citizens propose something and it is rejected, the reasons need to be stated. More importantly, the proponents need the chance to return to their cause by augmenting their argument and by meeting a higher support hurdle. How these matters might be operationalised needs much more thought. But the principle that engagement should be serial and reciprocal is fundamental.

In sum, in a different era the major party organisations provided much of the tissue that connected the formal system to its publics. They still have important roles. But they can no longer deliver the necessary linkages. So how can connections be rebuilt?

System Adaptation.

There are many proposals for system development. Deliberative democrats propose much wider use of citizen juries and similar choice mechanism. Others see a redefined role for major parties, with requirements for community engagement and policy activism expanded (e.g. Latham, Reith, Faulkner). Voting reform is another possibility although there has hitherto been no mobilisation around this issue, as for example occurred in New Zealand. Social media is just emerging – but it has no connection to the formal system. Indeed to be effective all these initiatives need to be anchored in a formal structure within the representational system. Access and engagement, which is broadened and deepened and sited at the epicentre of the representational system, is fundamental.

It is hard to see any alternative to a much expanded and deepened role for the parliamentary committee system. Furthermore, Australia’s political system is almost purpose-built for such an outcome. The Senate was modelled on its US counterpart. In fact, the procedures that would be associated with a democratic transformation are evident in our own historic experience. Between 1901 and 1909, the electorate returned three parties – the Free Traders, Protectionists and Labor.

Governing required at least two of these parties to reach an accommodation with each other on particular measures. Deakin, the leading political architect of the period, led minority governments. To create sufficient parliamentary support to enact contested measures, he needed to initiate a parliamentary (and hence public conversation) at the strategic end of the parliamentary issue cycle, but before the government’s own approach was determined.

To achieve this outcome, he turned to the tried and tested vehicle, committees of the legislature. Indeed the Australian constitution provided him with an ideal structure. The Senate had been conceived as an independent House on the American model. In its initial years most members acted in this spirit.

More recently, the (late) Liberal Senator, David Hamer, recommended converting the Senate to a Committee House. Ministers would cease to be drawn from this Chamber. Committee chairs would enjoy extended standing (as is occurring now in the UK). Senate committees could then become important agenda entry points for new and emerging issues. The adversarial culture, which is now often breached in committee enquiries, could be equally qualified in broader Senate proceedings.

With an especial focus on emerging and strategic issues, committees could be agents of the legislature rather than the executive. They could recommend action – and the legislature would debate their recommendations. Ideally this would be free of the whips. But even with whipped or partially whipped votes, majority, cross-party support in the Senate would provide important guidance for the executive. A more diverse expression of views in the legislature prior to the executive determining a course of action would give the executive more flexibility in response. Following this debate, it would be up to the government to decide what to do. But such a change in the policy determining sequence would also represent a major change in the structure of political power.

Conclusion

The present adversarial system was born in 1909. It was based on two powerful party organisations that each appealed to roughly half of the Australian community. These days are long gone. The challenge in the twenty-first century is to develop a political system more aligned to Australia’s pluralised society.

Thus, while most of the contributions to this series of policy discussion papers focus on the nature and content of future policy choices, it is argued here that actually achieving future policy reform may well depend equally on reforms to our political system and decision making processes. Furthermore, it might be noted that this is not entirely a new situation. In the 1970s and early 1980s, the outstanding economic problem of the day was ‘stagflation’, and a significant factor in the election of the Hawke Government in 1983 was its promise to seek a new approach to dealing with this problem built around a search for consensus, based on equality of sacrifice. Indeed it is arguable that at the time of the election the incoming Labor Government was more strongly identified in the public mind with its promise of “consensus” than with the actual content of its policies. Whatever the case, however, it is indisputable that that Government was able to achieve a great deal of policy reform that set Australia up to meet the challenge of globalisation.

Now we are facing similar challenges of political and policy failure, and again we need to address the political challenge of the how to reform the decision-making system as well as the policy content. Essentially this political challenge is to change the system so that it is more conducive to producing a majority in favour of sensible reforms.

But unfortunately to date, the potential of the parliamentary committee system to meet this need is hardly recognised. The procedural and other changes that would be required to enhance its standing and influence in the broader political and policy making system would be tantamount to a democratic transformation. Such institutional developments would align the formal system much more constructively with its publics.

The incentive structure in parliament which presently favours an adversarial approach is a fundamental issue. Present parliamentary incentives dictate that what one declares black the other must almost invariably proclaim to be white. Until we face up to the mismatch between the formal structure of Australian politics and the society which it nominally serves, dysfunction and gridlock must be expected to continue.

Can any of the major parties (or any of the minority blocs in the Senate) summon the resolve, the tactical guile and the political imagination that is necessary to transit to a post-majoritarian political order?

Ian Marsh is a Visiting professor at the UTS Management School. His study Democratic Decline and Democratic Renewal: Political Change in Britain, Australia and New Zealand (with Raymond Miller) was published in 2012 by Cambridge University Press.

 

Fairness, Opportunity and Security
Policy series edited by Michael Keating and John Menadue.

Whoever wins the next election, the challenge of dealing with a hung Senate will almost certainly loom large. Perhaps also a hung House of Representatives. Malcolm Turnbull tells us that the appropriate response is a compelling narrative delivered with conviction and resolve by a sufficiently competent leader.

Is this enough? In this short note I will argue that the problems in present political arrangements are much deeper – they are systemic and structural. The present political and policy system is largely gridlocked. This is the result not of incompetent leaders or deficient narratives, important though both certainly are, but rather of a slow-burn legitimacy crisis that has been many years in gestation.

Put another way – recent decades have witnessed not one but two seismic shifts: economic globalisation and social pluralisation. The former has been more or less addressed by the major parties. The latter has yet to be assimilated.

Evidence of social pluralisation and the consequent political gridlock is clear in the recent political record. John Howard passed the GST but at the following election lost the popular vote. Hardly auspicious. After much delay and much cash, he also privatised Telstra. Otherwise, despite ten years of office, tough reforms were conspicuous by their absence. Moreover, he governed with a windfall revenue gain of $283 billion. Despite this, in the ten months prior to defeat, the Howard government u-turned on not one or two but seven measures. These were not minor matters: they were issues at the heart of its programme – Work Choices, climate change, broadband, the Murray-Darling, education funding and so forth.

Things hardly improved thereafter. The only significant policy matters to survive the Rudd and Gillard governments were based on bipartisanship – plain cigarette packaging, the NDIS and perhaps the Abbott-Morrison-led race to the gutter on refugees. Climate change is on-going.

Short of bipartisanship, we have no recent examples of successful policy change on a major contested issue. Not one.

If further confirmation is needed, look no further than the rise and decline of Tony Abbott. As an uncompromising and negative Opposition leader, he was lauded by some for his ruthless pursuit of office, reflected in wholly populist negative campaigns. But in government he faced the reality of office. Nemesis intervened. His slogans created expectations that even his most ardent supporters must now recognise to be contrary to Australia’s national interests. At one level, his fate is testament to combative hubris. At another, to a dysfunctional political incentive structure.

Underlying political gridlock is a crisis of democratic legitimacy. This will afflict any government. It derives from a disconnect between the formal political and policy making system and its publics. This is a fundamental systemic problem. It has not sprung up overnight or over one government. It has been driven by a variety of structural changes. The following sections explore first, the nature of these structural shifts; second, the requirements for renewing citizen engagement; and third, the systemic changes that might be required to make this wider engagement a reality.

Three Structural Changes

Why has democratic legitimacy so eroded? This outcome has been driven by three structural changes: first, the decline of major party organisations; second, a convergence of major party (particularly economic) agendas; and third, and most importantly, a pluralisation and differentiation of citizen identities. Let’s look briefly at each.

First, the story of major party organisational decline is well known. From a membership of some 8% of the entire adult voting population in 1966, the major parties now attract only some 0.8%. Moreover, whereas only 2% of citizens did not identify with either major party in 1967 the number rose to 28% in the early 2000s and has since hovered around this level. Hence, around 50% of the electorate now have weak or no identification with either major party. Further, about 20% of us vote for minor parties and independents and about another 20% of those eligible do not vote or do not enrol or vote informal. An astonishing number!

But decline extends well beyond public support. Party organisations used to be important sites engaging activists and aggregating interests. Party branches were widespread and embedded in local communities. Party conferences were important policy making forums. Citizens could advance motions at local and regional party meetings and thus experience political efficacy. These capacities are long gone. Conferences now only occur infrequently and are largely stage managed. A small coterie of parliamentary elites substantially influence manifesto design. Member influence is marginal. The dense tissue that once connected the major parties to their publics has gone.

A second reason for citizen disaffection arises from convergence of major party agendas. The days when they stood for significantly different directions for national social and/or economic development have long gone. The Hawke-Keating government led a national response to economic globalisation. The illusion of effective government continues to be sustained by memory of this era. But crisis-induced bipartisanship was its essential condition. The end of a shared sense of economic crisis around 1996, or even earlier, was also the end of that era.

Remember the political incentive structure rewards differentiation. Hence the amount of illusion and make-believe in the political world that we now experience. This is reflected in the short termism, populism and often opportunistic, fabricated or manufactured difference which characterises contemporary politics Moreover, responses are framed with an eye to media impact rather than any underlying values or ideology. Leaders who do not play these games have been given short shrift by their supporters.

These changes in the formal political system have marched in step with another more fundamental change. This is the transformation of Australian society. The social movements of the 1970s were the proximate cause. Think of the women’s, gay, environment, Indigenous rights, multicultural, animal rights, consumer etc movements, and the more conservative counter-mobilisations that they stimulated. These attitudinal changes have effected a fundamental transformation in the political orientations of Australians. The days when you could think about politics exclusively in binary or class terms are long gone

This change in Australian political identities is absolutely fundamental. The Australian community is now pluralised and differentiated and, in some contexts, increasingly regionalised. The best image is a kaleidoscope. This reflects not only the diverse values that are held by Australians, but also the challenge in framing persuasive political narratives. The assumption that basic partisan values are widely shared no longer holds. Rather leaders need to craft appeals that can reach out to majority coalitions.

In sum, the slow-burn crisis of legitimacy, which the three foregoing structural changes have occasioned, is perhaps only now fully apparent.

In Part 2 I will be examining the implications for policy-making practice.

Ian Marsh is a Visiting professor at the UTS Management School. His study Democratic Decline and Democratic Renewal: Political Change in Britain, Australia and New Zealand (with Raymond Miller) was published in 2012 by Cambridge University Press.

The policy series ‘Fairness, opportunity and security’ begins on Monday May 11.

‘I can’t recall a poorer quality public debate, on almost any issue, than what we have had in Australia in recent times.’  Ken Henry

In December 1983 the $A was floated and restrictions on the free international movement of capital were abolished. On 1 July 2000 a broad-based goods and services tax replaced a plethora of highly inefficient, inequitable and unintelligible indirect taxes. These events ‘bookended’ an extraordinary period of policy reform that ‘opened up’ the Australian economy, transforming just about every aspect of microeconomic and macroeconomic policy and institutions.

It is sobering to wonder how much of what was achieved then could be achieved today. The Australia that was capable of delivering that policy transformation seems like a very different place.

In the early 1980s, Australian policy makers, haunted by another deep recession attributable to policy failure over many decades, found themselves on a burning platform. With high inflation and high unemployment, and another negative terms of trade shock that threatened a further hit to living standards, the imperative for action was broadly understood and accepted.

Today, Australians find themselves in an economy that has avoided three serious recessions affecting many other countries: one associated with the Asian Financial Crisis of the late 1990s; another associated with the ‘tech wreck’ stock market crash and subsequent developed world recession a few years later; and a third, more recently, as the so-called Global Financial Crisis paralysed the rest of the developed world.

Unlike most of the rest of the developed world, the Australian economy has continued to experience low inflation, relatively low unemployment, and rising average living standards.

It must be tempting to conclude, as many people have, that because of our strong economic performance, Australians have simply become complacent. And that complacency could provide a reason for Australians being so disinterested in further economic reform; and so disinterested, too, in addressing the wider set of challenges and opportunities associated, especially, with unsustainable environmental practices and the economic, social and security dimensions of the emergence of Asian powerhouses in China and India.

But Australians might not be complacent. It is just as likely that they don’t understand what is going on. Indeed, given the quality of contemporary public policy debate, I wonder that any significant proportion of the population could have a coherent view of national challenges and opportunities. The confusion in public debate seems to me to be a lot worse than at any other time over the past 25 years or so. Indeed, I can’t recall a poorer quality public debate, on almost any issue, than what we have had in Australia in recent times. Today, it is almost certain that, in almost any area, what people generally understand to be the case is, in fact, a myth.

For example, one could conclude from commentary on the challenges facing trade-exposed Australian businesses that our future in the Asian century rests on winning a race to the bottom on wages, taxes, social protections, environmental standards and animal welfare. The truth is very different. An Australia that has made a success of the Asian century will feature Australian businesses deeply integrated into the economies of Asia, through trade and investment linkages and in partnership with regional businesses, employing people in Australia and from across the region, supplying global markets. It will feature a highly skilled and educated, dynamic and optimistic Australian community that understands the region’s diversity and builds enduring relationships with its people through tourism, education, science and research collaboration and cultural exchange. And it will feature Australian governments, at all levels and in all parts of the country, enjoying productive relationships in the region, based on consultation, collaboration and mutual respect.

The challenges posed by the Asian century should energise a focus on the quality of Australia’s national endowments, both natural and created. But Australia’s success in the Asian century will rest on more than this, demanding the development of collaborative business relationships with Asian partners, a strong contribution to sustainable security in the region, and deep and enduring people-to-people links across a broad sweep of human activity: commercial, social, cultural and political.

Among the many public policy requirements of this time, I would draw attention, especially, to these: the more effective protection of vulnerable species and eco-systems; the need for high yielding investments in human capability and physical capital, including both economic and social infrastructure; the development of effective commercial, cultural and security relationships in the Asian region; and insisting that national benefits are shared widely so that all Australians, especially those suffering entrenched disadvantage, have the opportunity to choose a better life.

It is my hope that the writings you will find here will play a substantial role in improving the quality of public policy discourse, in these and many other areas. You will read contributions from people who know what they are talking about, and who care about the impact of their ideas. Many of the writers have been here before; taking responsibility for the quality of public policy debate, playing key roles in the development of better policy outcomes.

Dr Ken Henry AC was Secretary of the Department of the Treasury from 2001 to 2011.

 

 

The Observer newspaper in the UK has an interesting background piece on the issues facing people in the UK. It raises many of the questions that concern Australians about the disfunction and the loss of trust in our political institutions. See link to article below.  John Menadue

http://gu.com/p/48435/sbl

Fairness, Opportunity and Security
A Policy Series to fill the policy vacuum.
Edited by Michael Keating and John Menadue.

On May 11 in this blog- Pearls and Irritations– we will begin a series of articles on important policy issues. There will be over forty articles on sixteen policy areas from over thirty contributors. The series will run for four to five weeks.

Each of the policy articles will be about 2000 words. They will be realistic, given our political and financial constraints.

Ken Henry will be introducing the series.  

In the week commencing 11 May we will post articles on

Democratic Renewal (John Menadue and Ian Marsh)
The role of government (Michael Keating, Ian McAuley and John Menadue)
Foreign Policy (Stephen Fitzgerald, Cavan Hogue, Richard Butler, Stuart Harris and John McCarthy)

In the week commencing 18 May we will post articles on

Fixing the budget (Michael Keating)
Taxation Reform (Michael Keating)
Federalism (Michael Keating and John Menadue)
Job Creation (Michael Keating)
Productivity (Michael Keating)
Transport and Infrastructure (Michael Keating)
Welfare priorities (Andrew Podger and Peter Whiteford)

Then will follow

Health (John Menadue, Jim McGinty {workforce})
Development of our human capital in the fields of education, science, innovation, research and development (Glenn Withers, Chris Bonnor {schools}, Glenn Withers {Universities})
Population/migration/refugees (John Menadue, Peter Hughes, Arja Keski-Nummi)
Retirement incomes (Michael Keating, Andrew Podger)
Indigenous affairs (Fred Chaney, Michael Gracey)
Communications and the Arts (Kim Williams {Arts}, Terry Flew {media regulation in internet world}, Julianne Shultz {cultural identity}, Rob Nicholls {NBN})
Environment and climate change (Ross Garnaut, Peter Cosier, Brendan Mackay)
Inequality (Peter Whiteford, Michael Keating, Ian McAuley)
Security, both military and soft power (Michael Wesley)
Internal security and freedom (Spencer Zifcak {Human Rights Act/Charter})

Media enquiries. Please contact johnmenadue@staging-johnmenadue.kinsta.cloud.

 

 

Australian civil society is again facing attacks from government and conservative think tanks seeking to silence and weaken community voices.   The Labor years of 2007-2013 saw a break from the attempted silencing of the Howard decade, but there is now a new push, that aims to detract from the legitimacy of NGOs and to deny the valuable role their advocacy plays in our democracy. The detail of the new push has been documented recently. It is not a coincidence that at the same time there are new younger voices in an energised environment movement. Many new groups of younger activists are fighting for their future by challenging coal and gas corporations as climate change looms.

Government actions that are concerning and distracting civil society at present include:

• Almost 600 environmental groups that hold tax-deductibility status in Australia are being scrutinised by a House of Representatives Inquiry. Government MPs have apparently identified up to 150 groups they wish to strike off the list. Other community groups having the same tax deductibility have not been included. There have been suggestions that those most directly challenging the fossil fuel industry are being targeted by this Inquiry.
• The federal government White Paper on tax called, Re:Think, has a chapter on the NGO sector. It poses questions for discussion that ignore the advocacy role of developing good policy from community input. Instead, it posits NGOs as competing with the for-profit sector and asks if they have a ‘competitive advantage’.
• Various state governments have proposed, or are proposing, legislation that would restrict the ability of groups to use public forms of non-violent protest.

These attacks have been documented a number of times and in fact have been written about extensively. However, it is worth pausing and setting out the importance of this public advocacy to our society.

The value of NGOs to our public sphere is multi-faceted.

• NGOs respond to policy and they develop alternative proposals. This input is vital to good policy-making by both government and business.  Community people on the ground can see and predict the effect of policies in a practical and effective way, making improved outcomes possible for all.
• NGOs are uniquely placed to support policy that looks to long term goals or that affects the future.  In contrast, governments react to the short electoral cycle, asking ‘how will it affect our chance of re-election?’, and businesses have a legal responsibility to ask ‘how will it affect our bottom line’?, but it is a special quality of the NGO sector that it has the flexibility to include the long-term in its policy interests and in its desired outcomes. Responding to the crisis of climate change is the most obvious example where a response relevant to the future is competing with party electoral aims and the business bottom line of fossil fuel companies.
• Another most important role is to provide a balance to the views of powerful, organised, economic interests.  There is a large imbalance between the power of vested interests and that of the community.  On the occasions when government and business work together, the power imbalance is even greater, and NGOs are vital.
• NGOs have an accountability function. They inform the community on the behaviour of governments and businesses and call them to account. NGOs can claim legitimacy for this role if their roots are in the community and they are informed by the practical impact of policy on themselves or their members. When this is the case, NGOs are uniquely placed to respond to (a) the impact of government and business policies, (b) the impact of lack of policy, (c) failure to implement promises, (d) the unintended consequences of policy and (e) the existence of unethical or corrupt behaviour.
• NGOs can show the amount of public support or opposition there is for any policy. It is a creative challenge for NGOs to find new ways to demonstrate this. Rallies, public meetings, letterwriting, petitions etc. are traditional means and the internet has thrown up many new methods.
• NGOs are better than individuals trying to act on issues alone, because by pooling financial and intellectual resources they improve the quality of their contribution to public debate.  ‘Two heads are better than one’ and ‘many hands make light work’.
• NGOs can improve equity in our society by providing a ‘voice’ for marginalised and disadvantaged individuals and groups.
• Regional and country NGOs are important for providing information to make policy specifically relevant to different geographical areas.  The same is true for special interest groups, such as the disabled, women, etc. Policy affecting any regional or special interest group is improved with their input, making it better policy for all.
• Unlike the public service or government or large businesses, the flexibility of the NGO sector means it can respond quickly to new political situations.  New organisations frequently spring up in response to need or policy proposals. NGO flexibility can be seen as part of the variety, dynamism and vitality of the community from which NGOs come. The flexibility can also reflect different political and cultural ways of talking about the same issue and can tap into different parts of society.

Conclusion

It is exactly 20 years since John Howard first spoke of NGOs as part of the economic market, rather than as part of our democratic structure and our public sphere. The Howard years were a confusing period for NGOs. Practical actions of feeding the homeless or planting trees were commended in the name of smaller government, but advocacy on behalf of the homeless or the environment were discouraged by a number of means. Now neoliberal warriors in the Abbott government are opening up new fronts.

The Australian community has heard two decades of economic language measuring the worth of NGOs as economic entities. This has resulted in a devaluing of NGO contributions and the devaluing of a healthy contest of ideas. It is time to reassert the positives of an engagement with the community.

 COMING SOON.   11 May 2015

Fairness, Opportunity, Security.

A Policy Series to fill the policy vacuum.
Edited by Michael Keating and John Menadue

There is growing public disquiet. The government and the opposition keep playing the political and personal game at the expense of informed public discussion of important policy issues.

As a community we have become concerned about the trustworthiness of our political, business and media institutions. Insiders and vested interests are undermining the public interest. Money is unduly influencing political decisions. There is gridlock on important issues like climate change and taxation. We are not satisfied with ‘small target ‘politics.

After a near death experience Tony Abbott says he is open to new thinking and ways of governing. Time will tell. Bill Shorten says 2015 will be the year of ideas. Let’s see.

On May 11 in this blog- Pearls and Irritations– we will begin a series of articles on important policy issues. There will be over forty articles on sixteen policy areas from over thirty contributors. The series will run for four to five weeks.

Each of the policy articles will be about 2000 words. They will be realistic, given our political and financial constraints.

Ken Henry will be introducing the series.

ATF Press plan to publish these policy articles in book form later this year  

Policy Series.  Areas to be canvassed

Economic policy
Fixing the budget  (Michael Keating)
Federalism (Michael Keating, John Menadue)
Productivity (Michael Keating)
Job creating and participation (Michael Keating)
Foreign policy  (Stephen Fitzgerald, Richard Butler, Cavan Hogue, Stuart Harris, John McCarthy)
Security, both military and soft power  (Michael Wesley)
Health  (John Menadue, Jennifer Doggett {co-payments}, James McGinty {workforce})
Development of our human capital in the fields of education, science, innovation, research and development (Glenn Withers, Chris Bonnor {schools}, Glenn Withers {Universities})
Transport and infrastructure (Michael Keating)
Population/migration/refugees (John Menadue, Peter Hughes, Arja Keski-Nummi)
Welfare priorities (Andrew Podger, Peter Whiteford)
Retirement incomes (Michael Keating, Andrew Podger)
Indigenous affairs (Fred Chaney , Michael Gracey)
Communications and the Arts (Kim Williams {Arts}, Terry Flew {media regulation in internet world}, Julianne Shultz {cultural identity}, Rob Nicholls {NBN})
Environment and climate change (Ross Garnaut, Lesley Hughes, Brendan Mackay)
Inequality (Peter Whiteford, Michael Keating, Ian McAuley)
The role of government (Michael Keating, John Menadue, Ian McAuley)
Democratic renewal – the lack of trust in government and the hollowing out of our  political parties (Ian Marsh, John Menadue, Barry Jones)
Internal security and freedom (Stephen Zifcak {Human Rights Act/Charter}, Peter Timmins)

 

Media enquiries. Please contact johnmenadue@staging-johnmenadue.kinsta.cloud.