The Nanny State: A failure of regulation

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On 11 September, I testified on the lack of evidence in favour of regulation at a public hearing of the Senate’s “Nanny State” Inquiry at Parliament House in Canberra. As the Hansard transcript reveals, that led to a lively and good-natured exchange on the nature of regulation with the Chair, Senator Dastyari.

My testimony was based on my submission to the Inquiry (number 237) titled, “Regulating choice: The need for evidence“. I concluded from reviews of the experimental evidence on the effects of regulation, that the Iron Law of Regulation applies.

The Iron Law has been stated as;

There is no form of market failure, however egregious, which is not eventually made worse by the political interventions intended to fix it.

An honest belief in the value of regulation is presumably grounded in a faith that a wise and well-intentioned regulator could in practice increase total net welfare.

That belief is not obviously plausible, as it depends on a sequence of assumptions or conditions that are highly unlikely to apply in practice. Can you think of any regulation where the regulator has met all of the ten necessary conditions for successful regulation described on page 3 of my paper with Scott Armstrong?

Our research has investigated the effects of government regulation of speech (by way of mandatory disclaimers in advertising), corporate social responsibility and of the environment. We could find no evidence that regulation increased welfare – in most cases it caused harm. We have not found a regulation that would meet even one of the ten necessary conditions for successful regulation.

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Unions campaign to retain power over industry super

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The Australian Financial Review is reporting that the Australian Council of Trade Unions has launched a political campaign against the federal government’s proposed changes to industry superannuation.

Currently, under a sweetheart deal that typifies Australia’s incestuous workplace relations system, half of the directors of the five million member strong industry superannuation funds represent employer organisations and the other half represent unions. The selection of the default fund for many workers belongs with the Fair Work Commission.

The government recently asked the Productivity Commission to develop a better way to allocate default superannuation fund members to products and restated its earlier commitment to require at least one third of superannuation fund board members to be ‘independent’.

Superannuation in Australia is a two trillion dollar business and many workers get no say in where their money goes. The issue has even been examined in the Trade Union Royal Commission which looked at the leaking of CBUS member details to the CFMEU and how ‘choice of fund’ operates in the Transport Workers Union.

The people who manage these funds should be on those boards because of their financial expertise, not because they are in the right union or employer body. This process may mean such representatives are more susceptible to political divestment campaigns.

Make no mistake – the ACTU’s campaign is about protecting union power, not member interests.

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Senate committee backs push to remove special privileges for environmentalists

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This is from the Senate Environment and Communications Legislation Committee’s report of the inquiry into amendments which would remove the special privilege available to environmentalists to conduct activist litigation:

The committee also notes the arguments put forward by those supporting the repeal of section 487, such as the costs to proponents and consequences for economic activity when major development projects are delayed by judicial review sought by groups granted standing by section 487. The committee also acknowledges the significant cost of these challenges to the Commonwealth. The Department of the Environment indicated that it had not recovered costs in the majority of cases where the Commonwealth had been successful in defending the validity of a decision.

The committee considers that the repeal of section 487 will not diminish the protection of Australia’s environment and the conservation of biodiversity and heritage provided by the [Environment Protection and Biodiversity Conservation Act 1999]. … The committee recommends that the Environment Protection and Biodiversity Conservation Amendment (Standing) Bill 2015 be passed.

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Is there a grief emoji for the death of the English language?

There are no words.

That is at least according to the Oxford Dictionaries, which this year decided that rather than one of the more than one million words in the English language, an emoji deserved to be named the 2015 Word of the Year. To be precise, the ‘Face with Tears of Joy’.

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Other options included the ‘sharing economy‘ and ‘Brexit‘, both of which would have been more appropriate and sensible, particularly given they are actually words.

Despite priding themselves as “the definitive source on language and the first point of reference”, Oxford Dictionaries, owned by Oxford University Press and responsible for publishing the Oxford English Dictionary, has effectively abandoned its post as the protector and defender of the English language.

Ironically, the motto of Oxford Dictionaries is “language matters”. Yes, it does.

Language provides us with the means to communicate, share our ideas and thoughts, and a way to connect with others or express our emotions. The English language has transformed the world over hundreds of years, spreading ideas, creating realms of imagination and new words through classical literature, and helping to fashion a modern world built on interconnection and interdependence.

Today, the English language is considered the universal language, or lingua franca, for business and communications. In a world where division is often highlighted, the English language stands today as a hallmark of Western Civilisation and a bridge between peoples.

The Oxford Dictionaries, however, seem more pre-occupied with being progressive or avant-garde than celebrating the complex, exciting and dynamic nature of the English language.

Giants of the literary world and Oxford University alumni TS Eliot, CS Lewis, JRR Tolkien and Oscar Wilde would be rolling in their graves.

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The failure of wind power on windless days

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The always sensible Matt Ridley has written about the UK’s recent windless afternoon, which forced the National Grid to use “emergency measures” to keep the lights on, in a piece for The Times (reproduced on his own blog) saying:

  • The National Grid offered reserve generators up to 40 times the going rate to patch the electricity shortfall;
  • Britain’s low wind conditions tend to be replicated across Europe which means imported wind power can’t be relied upon (South Australia take note if you intend to rely on Victorian wind);
  • While happily pursuing renewable energy policies the UK has failed to invest in its existing or new coal, gas and nuclear power stations meaning that many now can’t be relied upon to plug gaps; and
  • Given that Britain (also like South Australia) has failed to invest in coal-fired power stations, diesel generators are now crawling out from under the carpet offering to be on standby for future power shortages.

A writer for The Guardian attempted to “debunk” Viscount Ridley’s piece by blaming… wait for it… coal!

It is fascinating that the core argument used in The Guardian is almost identical to that used in Australia following the recent South Australian blackout – that it isn’t the fault of the non-performing wind farms, but of the badly maintained back-up.

Blaming the guy forced to sit on the bench rather than the highly paid forward asleep by the goal is hardly quality advocacy.

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Self-managing, anti-bureaucratic, minimal government: Cycling fits well with the liberal philosophy

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IPA member Nigel Withers had this interesting response to Karalee Katsambanis’ (another IPA member) piece about cyclists in WA Today a couple of weeks ago, featured here in Hey… What did I miss?:

Cyclists on the whole don’t ask for much – apart from a bit of bike infrastructure in places where they’re likely to be killed or injured if they ride on the road. As a transport option, cycling is the spiritual home of liberty, low taxation, minimal regulation and small government. It is a sanctuary from the intrusions of the Nanny State.

We don’t need a multitude of bureaucrats to create and update bus, train and ferry timetables – we ride where and when we like. We don’t cause grief when timetable updates are published or when underused, uneconomic services are abolished.

We don’t need an army of well-paid, unionised workers to cart us around on trains, buses and ferries – we move ourselves at our own expense.

It doesn’t cost the taxpayer $9.45 every time we hop on a train (that’s from the NSW State Infrastructure Strategy). Instead, we spend thousands of dollars of our own money on supplying ourselves with a private transport option.

We don’t threaten to strike every time we don’t get what we want.

We don’t have government departments creating standards and regulations governing bicycle design (such as vehicle regulations which govern how high above the road headlights must be positioned).

Hordes of Police are not required to ensure we are abiding by an ever increasing set of laws. Traffic control centres aren’t required to manage our movement. CCTV cameras are not installed all over the place to watch over us as ride from A to B.

Apart from mandatory helmet laws, the Nanny State has largely ignored cycling – and even then, the laws are applied in an infrequent and unenthusiastic manner by the Police. Riding a bicycle is so simple, we don’t need a government agency to ensure we do 120 hours of mandatory training and pass numerous tests before we can go for a ride. I can sell my bike without paying stamp duty on the transaction, and informing a government body that I am no longer the owner.

I can ride to work all year without the taxman putting his hand in my wallet to extract fuel excises that are then wasted on useless pet projects. My bike is not subject to government mandated annual safety inspections.

We spontaneously come together in groups when we want to ride – we can manage ourselves without the government requiring a grant to create a “community group” that is of no use to anyone.

Liberty. Individualism. Self-managing. Anti-bureaucratic. Minimal government. Low taxation. Antipathy to the Nanny State. Cycling is actually a much better fit with a Liberal philosophy than a Green one.

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The GST inflates the state

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The current tax debate has been dominated by calls to increase the GST burden, either by raising its rate (say, to 15 per cent) or extending its base (say, to fresh food, education, or health).

Slugging Australian consumers with additional indirect taxes has enjoyed serious momentum in the mainstream media, but thankfully there are now voices raising doubts about the merits of this tax reform exercise.

Writing in the Australian Financial Review today, former Treasury Secretary John Stone argues the contemporary GST reform argument merely represents a tax increase by stealth:

[Raising] the GST solely to reduce taxes commensurately on personal and/or corporate income would produce net benefits to productivity and growth. But the proceeds should definitely not facilitate more spending by either federal or state governments. At the political level, however, no “reform” proponent has suggested such a clean swap. Everyone stressed the need to ensure “no disadvantage to the most vulnerable Australians.”

With that “wedge” accepted, … any GST rise must result in a rise in total government spending ‑ and, hence, ultimately, a rise in total taxation. That was what happened when the Howard/Costello government introduced the GST.

The Turnbull government has, so far, appeared happy to entertain the prospect of taking Australia down the GST/VAT‑hike path, and current polls suggest the GST talk hasn’t dented the Prime Minister’s popularity.

But the crucial point here is that we’re presently not in an election campaign. If anti‑GST sentiment builds up, as it did during the 1998 election to almost fatally wound the Howard government politically, the proposed tax hike could easily be shelved.

To put this another way, it is not a foregone political conclusion at this stage that Australia will be burdened by a bigger GST.

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From political correctness to “now mobilising the machinery of big government to silence those with different views”

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NSW Finance Minister Dominic Perrottet gave an excellent speech in the Legislative Assembly yesterday on freedom of speech and the Archbishop Porteous case in Tasmania. You can find the must-read speech here, but here’s a snippet:

This issue is not about religious freedom. It’s about freedom itself.

All parties in a debate – whether politicians, think tanks, religious institutions, lobby groups or anyone else – should be able to express their views freely without censure. The state licensing freedom to a particular group is no freedom at all.

Whatever your views on the definition of marriage, we should all be uncomfortable the government now has the power to intimidate, investigate and prosecute you if it finds your views somehow inappropriate.

Yesterday, The Australian reports that the case is set to go to conciliation, following a response from the Archbishop expressing regret that he had caused offence. Perrottet states who should really be apologising:

Madam Speaker, either we are free or we are not.

All of us – by virtue of our intrinsic value as human beings – have the fundamental right to speak our views, without the government in its infinite wisdom trying to regulate our private beliefs.

I have read several statements from Bishop Julian Porteous regretting any offence.

He should stop apologising. This is his point of view and no one else has to agree with him. He should not regret saying it just because some people have chosen to take offence. If they disagree, they should engage in debate. That is how free societies work.

Mr Speaker, this case should be dismissed immediately and the Tasmanian Anti Discrimination Commissioner should issue an apology to the community – followed by her immediate resignation for this grave error of judgement.

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Education cannot be a safe space

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In The Drum this week I looked at the movement in American higher education towards trigger warnings and safe spaces – apparently benign initiatives that are starting to morph into a distinctly illiberal and counterproductive ideology:

The entire higher education experience is being reconceptualised as a zone of post-trauma, in which students demand faculty protect them from the expression and thoughts of others.

Using the language of psychological harm, ideas are condemned, rather than rebutted. Students can receive “pain” from the decision of another person to write an email. It is wrong to “privilege” free speech, a mere “abstract right”, over personal emotional experience.

It’s hard to think of anything more contrary to the purpose of education – which is, in the broadest sense, the systematic exposure to ideas outside personal experience – than that.

Continue reading here.

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India seeks $100b per year renewable energy fund ahead of Paris climate talks

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With COP21 fast approaching, Indian Prime Minister Narendra Modi has asked G20 countries to hurry up and allocate money to the UN’s Green Climate Fund so that the Fund can start spending $100 billion per year on the deployment of renewable energy in developing countries.

Yes, you read that right – the $100 billion Green Climate Fund is actually expected to allocate $100 billion per year, which logically means that the Fund will need over $1 trillion in the kitty.

In fact, the Indian government’s submitted proposal to COP21 notes that:

While this would evolve over time, a preliminary estimate suggests that at least USD 2.5 trillion (at 2014-15 prices) will be required for meeting India’s climate change actions between now and 2030.

Yikes!

Of course while accepting money for renewables with one hand, India will still be increasing COemissions by 90 per cent over the next 15 years, with China’s CO2 emissions to rise by 150 per cent over the same period.

But you are unlikely to hear about this from the environmental movement or mainstream media. Western nations like Australia, who actually pledge to cut carbon dioxide emissions, are criticised for not doing enough, while developing countries who intend to increase emissions are praised for “cutting emissions intensity.” The two measurements are completely different.

Take a look at how the The Guardian and the ABC covered China and India’s COP21 submissions (emissions intensity) versus how Australia’s target (actual emissions) was described on the ABC and in The Conversation.

Given that the Australian government announced last December that it would donate $200 million to the Fund (not enough for the Greens), will co-chair the Fund in 2016, and is still to figure out how to actually achieve and pay for its 26-28 per cent reductions, it appears that Australian taxpayers will be paying for this hypocrisy many times over.

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