Federal government urged to push ahead with federation reforms


Positive news in The Australian this morning, with premiers and chief ministers from South Australia, Western Australia, Victoria, the ACT and the Northern Territory urging the Commonwealth government to seize a “rare consensus” and push ahead with federation reform.

Malcolm Turnbull is being urged to seize a “rare consensus” among states to speed up reform of the federation, as a panel ­cautions against a loss of momentum under the new Prime Minister.

… The states and territories are working on areas including health, education, housing and ­finance to develop a green paper on federation reform, which will then inform the government’s white paper.

The process is aimed at addressing the level of overlap and duplication in the federation, which is seen as excessive.

One of the advisers on the white paper review panel, former South Australian premier John Bannon, said he believed the process had been one of Mr Abbott’s “most successful endeavours”, and urged momentum continue.

A note of caution: politicians often cure “overlap and duplication” by giving the Commonwealth greater control and management of issues which should be managed at a state and local level. So while the Commonwealth should definitely pursue reforms, it should resist any temptation to make the federal-state imbalance, and Australian governance, even worse.


Just how successful is the divestment movement?


News outlets last week excitedly reported on the escalating success of the divestment movement, with some claiming that its campaign has already forced the dumping of $2.6 trillion worth of fossil fuel assets (here and here for example) throughout the world.

A closer look at the figures and the report reveals that there is less to this than meets the eye.

Firstly, the actual research report indicates that the $2.6 trillion represents the total value of the assets held by people and institutions that have committed to divest. This is not the value of their existing fossil fuel assets.

Either way, it is still a lot of money, so it is worth taking a quick look at how broad the movement’s success is.

The primary source for these figures is the divestment movement’s own Go Fossil Free website. Go Fossil Free is a project of 350.org which was founded by prominent environmentalist Bill McKibben, whose July 2012 article in Rolling Stone magazine is often held out as the piece that set the divestment ball rolling.

According to Go Fossil Free on 28 September 2015, the 442 organisations around the world that have pledged to divest include:

  • Faith-based organisations (28%);
  • Foundations (26%);
  • Pension funds (14%);
  • Government organisations (12%);
  • Colleges/unis (9%);
  • NGOs (7%); and only
  • 2% private corporations.

Of the $2.6 trillion figure, Norway’s Sovereign Wealth Fund (which made its money through oil) represents $873 billion, the Rockefeller Brothers Fund (the Rockefeller Family also made its money through oil) another $857 billion and the California Pension Funds $483 billion – just these three add up to approximately $2.2 trillion, without counting the commitments of churches, other pension funds, universities and government authorities.

Numerically, of these 442 organisations, only ten are for-profit private sector corporations. Two of these ten listed companies are the Adelaide Bank and the Bendigo Bank – even though these companies merged eight years ago. It is an open question whether the bank currently does any business with fossil fuel companies.

Only 2,040 individuals have pledged to divest. In a world of seven billion people, that is not very many. More people visit North Korea each year than have divested from the fossil fuels.

While the divestment movement has definitely chalked up some wins, it would be a mistake to believe that it is as influential and successful as it has led the media to believe.


Laws to tackle activist litigants will go ahead


FreedomWatch readers may recall how I welcomed news that the federal government was set to amend federal environmental law to remove special legal privileges for environmentalists to conduct frivolous legal challenges to major projects.

Currently, section 487 of the Environment Protection and Biodiversity Conservation Act 1999 (the EPBC Act) allows for a widely defined “aggrieved person” to challenge ministerial decisions made under the EPBC Act. Rather than an expanded right open to anyone, section 487 grants the privilege only to those individuals and groups who ‘engaged in a series of activities… for protection or conservation of, or research into, the environment.’

Previously the Coalition government proposed amendments to alter this definition which would have brought consistency to the law, and restored the common law position of who was entitled to participate in litigation – namely, that a person was to have a sufficient and not-distant interest in a matter.

For this reason, it was pleasing to read in the Herald Sun this morning:

The Turnbull Government is proceeding with controversial laws that will prevent environmental bystanders from launching legal challenges.

Attorney-General George Brandis said the legacy legislation from the Abbott Government — sparked after the Mackay Conservation Group helped delay Queensland’s $16 billion Adani coal mine — would correct a legal anomaly.

… “Section 487… is a very unusual, indeed unique, provision. And all the Bill does is seeks to restore the ordinary common law position.”

It’s great to see the Coalition is still committed to restoring sense and legal certainty in a sector which sorely needs it.


Who owns the word ‘skeptic’?


USA-based not-for-profit news gathering service Associated Press announced last Tuesday a change to its AP Stylebook (held out to be a ‘writing style guide for journalists’):

Our guidance is to use climate change doubters or those who reject mainstream climate science and to avoid the use of skeptics or deniers.

It is fascinating to read the differing perspectives that people have offered on this decision.

Apparently in late 2014 the group Committee for Skeptical Inquiry lobbied AP, claiming that ownership of the phrase ‘skeptics’ had been taken by non-scientists. The group’s suggested solution was to describe non-scientists who don’t support the idea of human-induced climate change as ‘climate change deniers.’

AP appears to have steered a middle path with its revised guidance, accepting the argument on ‘skeptic’ but refusing the argument on ‘deniers’ noting the obvious Holocaust connotations.

Objective website Watts Up with That said that the AP decision was a positive development because the term ‘climate denier’ had been dropped.

Writers with human-induced climate change sympathies such as in Patheos or  Huffington Post or the Guardian were a little grumpy at the change with an interesting background from another blog here.

However the response that takes the cake comes from the University of Queensland’s John Cook, who was quoted in the above Guardian article, suggesting that people who don’t believe must have physiological problems:

There is a growing body of scientific research into the phenomenon of science denial, whether it be denial of evolution, climate change, vaccination or so on. We can’t counter the corrosive influence of denial unless we heed the psychological research into what drives people to reject scientific evidence, as well as the techniques and strategies employed to misinform the public. It’s essential that we take an evidence-based approach to our response to science denial. So running away from the issue of denial is counter-productive and unscientific. Scolding people for using the accurate and informative term ‘denial’ is tantamount to scientific censorship.

In just this short quote, note the pejoratives that Cook uses to make his opponents look wrong:

  1. denial is a ‘phenomenon’ and an ‘issue’ that has a ‘corrosive influence’ that ‘drives people to reject scientific evidence’;
  2. people who deny employ ‘techniques and strategies’ to  ‘misinform the public’ whereas scientists like him take an ‘evidence-based approach’; and
  3. not agreeing with Cook’s views on denial are ‘counter-productive and unscientific’ and are ‘tantamount to scientific censorship.’

The article has a link to an unintentionally hilarious video that was put together by Mr Cook and others and which purports to tackle the issue of skepticism vs denial, but is in reality is a little more one-sided.

Control of words indeed.


An essential distinction between ‘good’ and ‘bad’ innovation policy


Entrepreneurship and innovation have reclaimed their rightful place at the centre of political debate.

But while Turnbull is being praised as the ‘innovation PM’ we must be especially cautious of unaccountable and wasteful public spending cloaked under the banner of ‘innovation’ (after all, it seems especially difficult to fight against innovation.).

There is a fundamental distinction between ‘good’ and ‘bad’ innovation policy. On one hand, good policy is governments being adaptable and flexible to innovation and understanding that ‘disruption is our friend‘. This rhetoric is important – it is the reason Turnbull is sitting favourably with the tech crowd.

On the other hand, bad policy is where governments use terms such as ‘innovation’, ‘start-ups’ and ‘tech entrepreneurs’ as a political shield for spending money on their favourite things. The tendency to spend lies at the heart of Labor’s most recent plans in this area:

Mr Shorten said that 2000 university graduates would be given an “honours year” at university accelerator hubs to develop their business ideas, supported by income-contingent loans as well as business training and mentorships.

As well, 2000 overseas students would receive one-year graduate entrepreneur visas enabling them to extend their stay in Australia. “Having gone to the effort of helping educate these bright people, we want to encourage some of them to stay in Australia and back in their idea.”

This policy is tantamount to arguing the government should get into the venture capital business – a ludicrous suggestion. If the government has any place in innovation policy it is in setting a favourable institutional environment. The task of the onlooking policy analyst is in separating out these two vastly different types of policy (all of which look good on the surface).

The IPA’s Chris Berg recently described the tendency for innovation policy boondoggles on The Drum:

Innovation policy can easily become as much a boondoggle as any Alice to Darwin railway. State governments have been burning money on wasteful “innovation” policies for decades. Every new premier wants their capital to become Silicon Valley. But who now remembers ComTechPort?

We actually know very little about why economies innovate, let alone how we might encourage them to innovate more.

Berg is entirely correct – it is precisely because we don’t know where innovation comes from that the job of the government is to get out of the way. I touched on this counterproductive government interference late last week on my blog:

Innovation policy is too often captivated by doing things, rather than not doing things. We can only hope that Turnbull does not create an innovation policy full of subsidies (like most before him have.).

The role of the state in is setting a stable, broad, and consistent set of underlying laws.

Real innovation policy is about limited government and economic freedom: property rights, lower taxes, and a strong rule of law.

As the IPA’s Mikayla Novak wrote last week, Australia has dropped in the Fraser Institute Economic Freedom of the World Index. If both the government and opposition turn attention to lifting our economic freedom innovation will flow naturally from its source: the entrepreneur.


Do union officials live in the real world?


Sometimes you have to wonder what planet union officials are living on.

Yesterday’s papers had details of a strike by workers at Melbourne’s Carlton and United Breweries site (brewers of Victoria Bitter and formerly part of the Fosters Group which was bought by South Africa’s SAB Miller in 2011) during Grand Final Week.

The coming week will be pretty quiet in Melbourne – a beer strike on Tuesday, another train strike on Thursday, an unpopular public holiday on Friday and train staff refusing to check tickets on Grand Final Day.

The brewery strike is a perfect example of the union movement’s blinkered outlook, with an official quoted in Friday’s Herald Sun saying that workers wanted  “to protect the good working conditions they’ve won over the last 130 years at the Abbotsford brewery.”

However while it is the job of unions to protect the conditions of its workers at a given point in time, it is also the role of a union to be aware of wider industry trends, and the real world.

FreedomWatch readers may recall in 2103 when Toyota was doing it best to stay in Australia the union movement took them to court to prevent them from asking workers to alter working conditions in an effort to make the business in Australia viable. The move was widely regarded at the time as the last straw that caused Toyota’s final Australian closure.

Similarly, just last week Belgium’s Anheuser-Busch InBev (the world’s number 1 brewer) announced a potential takeover of SAB Miller (the world’s number 2). Analysts have said that the global beer industry is under growing pressure due to consumers swapping to wine, spirits and importantly craft beers, and that it looks like takeovers are the only way for major companies to reliably increase revenue.

According to the Australian Bureau of Statistics, beer consumption in Australia is shrinking, and the effect on the major Australian brewers is probably much worse given the increase in the number of craft breweries throughout Australia as customers move with their feet in response to increased innovation and variety. In the US, craft brewery sales have already rocketed to 10% of the beer market.

The conditions in a particular factory built up over a 130 year period are just not relevant any more.

But it is probably naïve to expect the unions to be ahead of the game. This week the Trade Union Royal Commission heard that the CFMEU shredded several tonnes of documents last year after receiving a TURC subpoena, that these documents were shredded by two primary-school aged children (occupational health and safety anyone?) and that CCTV cameras were purposely covered up before the shredding took place.

It is interesting to read the union spin today – that it was an ordinary clean-up. I’m unsure how many people put shirts over cameras when they are doing a spring clean after receiving a summons to produce documents for a royal commission.

Apparently unfriending a work colleague on Facebook and not saying hello in the morning is now bullying according to the serially out-of-touch Fair Work Commission.

Treasury Secretary John Fraser, a rare bureaucrat who actually spent 20 years in the private sector, was quoted in Friday’s Australian Financial Review bemoaning the complacency of many Australians who think that everything is OK despite declining national income and competitiveness.

The Toyota experience shows that when economic circumstances turn, they turn quickly and that employee wages are only one of the challenges a business owner needs to balance when running a business, along with sourcing product, securing and holding market share, complying with government regulations, paying utility bills, currency movements and changing consumer preferences.

We all need to wake up, realize that nobody owes anyone else a living, and that Australia needs a long and honest period of economic reform. Either we do it now while we do it on our own terms, or circumstances will force reform upon us.


Measuring the success of the Rudd government’s Digital Education Revolution


Here’s an interesting finding: the more frequently computers are used in the classroom, the worse the results of the students.

That’s according to the Organisation for Economic Cooperation and Development in a new publication entitled Students, Computers and Learning: Making Connections. The first report of its kind into the digital skills of students, it found that there was ‘no appreciable improvements in student achievement in reading, mathematics or science in the countries that had invested heavily in ICT for education’.

Rewind to 2007. Remember Australia’s Digital Education Revolution? This $24.2 billion program was launched by the Rudd government to ensure that ‘that one million Australian secondary school students get an education with the latest technology, to prepare them for the jobs of the future’. According to Labor’s pre-election policy document:

Computers will enhance the learning experience of every high school student in the country, giving them the tools they need to engage more effectively in the classroom and with the world.

The evidence is in, and according to the OECD, this huge public spending hasn’t worked. These are some of the facts:

  • Australian classrooms have the highest proportion of students using computers at school
  • Australian students spend nearly an hour on the internet when they are at school, more than twice the OECD average
  • Australia’s performance in the Programme for International Student Assessment has dropped in all areas since only 2009 – from 9th to 14th in reading, 10th to 16th in science and 15th to 19th in mathematics.

Computers aren’t the ‘toolbox of the 21st century’, as claimed by the ALP. Literacy is. Numeracy is. These unfashionable disciplines are the real solution to increasing student outcomes and decreasing the effects of disadvantage:

Put simply, ensuring that every child attains a baseline level of proficiency in reading and mathematics seems to do more to create equal opportunities in a digital world than can be achieved by expanding or subsidising access to high-tech devices and services

It’s time we stopped talking about technology in the classroom and increasing public expenditure on education as being the solution to Australia’s falling student outcomes. More laptops and more iPads are a waste of money – it’s what you do with them that counts. After all, ‘great technology cannot replace poor teaching‘.


What motivates the divestment brigade?


While the stated aims of the fossil fuel divestment movement are clear (and many would say the political aims are clearer still) the motivation of ordinary men and women to sign up, can be a bit of a puzzle.

Why do people join a public campaign to selectively vilify only gas, oil and coal companies, when it would be more logical for those who genuinely “believe” to divest from any product or company that benefits from coal, oil or gas – that is, any company that uses fuel, plastic, steel or any product made from or powered by fossil fuels.

Earlier this week, the University of Maine’s Mark Anderson wrote a blog piece which may have the answer.

Anderson, who incidentally believes in human-induced climate change, refers to this behaviour as moral licensing, where people perform one “good” task so that they can give themselves permission to do something “bad”.

So, rather like someone who goes to McDonalds and orders a Diet Coke then a burger and large fries, you can attend a divestment protest rally, then happily call a friend with your mining-derived mobile phone, or drive away in your coal-built and oil-powered car and not feel guilty about hypocrisy.

It is also the same attitude that allowed former US Vice President Al Gore to lecture the world in 2007 about climate change while consuming more than his fair share of electricity and selling his US television network to Qatari channel Al Jazeera in 2013 for $100 million.

Similarly, British Conservative MEP Daniel Hannan in 2012 wrote about the elevation in public debate of the “moralistic” (holding the right opinions) over the “moral” (doing the right thing) and its relationship to narcissism. In this same piece Hannan recites a European Parliament anecdote following the Indian Ocean tsunami where a number of MEPs spoke in favour of giving (taxpayer-funded) aid but when one also proposed that they donate one day’s sitting allowance as a personal gesture, the suggestion was dismissed out of hand.

It is certainly a lot easier to “voice concern” than it is to tread a principled path.


Longer terms don’t mean better governments

Andrew Forrest, Chairman, Fortescue Metals

Andrew Forrest, chairman, Fortescue Metals

In the past couple of weeks, the perennially flawed arguments for longer parliamentary terms have been rolling out again.

First, Queensland Premier Annastacia Palaszczuk announced her support for moving from three to four year terms in her jurisdiction. As Queensland is the one remaining state with three year terms, it is perhaps not surprising that its politicians are keen to get job security to match their interstate counterparts. The opposition was quick to say it had always supported the idea. The local Chamber of Commerce and Industry spokesperson offered support for the move claiming that “a three-year term is not a sufficient term to allow the government to facilitate good economic planning for private and public sectors”.

Then there was business leader Andrew ‘Twiggy’ Forrest who suggested that Australia should adopt five year fixed terms for the federal parliament. His argument was that short terms were one of the reasons why Australian politics has been dysfunctional in recent years. (FreedomWatch readers in the UK can watch Forrest’s full interview here.)

However, you do not have to go back too far in Australian political history to see that length of political term has little to do with whether a government governs well or not. When Hawke and Keating were reforming the Australian economy in the 1980s they not only had three year terms, but Hawke kept dashing off to early elections. Conversely, it is hard to see what benefit accrued to anyone in Victoria in 1991-92, or New South Wales in 2010-11, by getting the fourth years of long-discredited and dysfunctional state Labor governments.

In 1998, John Howard went to an early poll to secure a mandate for major tax reform. Under Forrest’s five year fixed term idea, Howard would have had to wait another three years before he could secure such a mandate, which he clearly needed as it was reversing his previous position.

People arguing for longer terms always seem to suffer from a surfeit of optimism. They imagine four or five years of a good government using all that time implementing the sort of reforms which particularly appeal to them. However, the rules around governance should not be developed with the best case scenario in mind. What is much more important is having in place a system where citizens can remove a bad government when the need arises.

Forrest’s address, where he raised the idea of five year terms was delivered in Britain, and cited its fixed five year terms as an example for Australia to follow. This seems slightly ironic, given that one major party in Britain has just elected the hard leftist Jeremy Corbyn as its leader. While the conventional wisdom is that Corbyn is unlikely ever to become prime minister, even the remote possibility that he might does serve to illustrate the point that business people such as the Queensland Chamber of Commerce and ‘Twiggy’ Forrest need to be careful what they wish for.

When designing political systems, it is always best to imagine your political opponents in power rather than your allies.


Survey shows Uber offers better service than taxis

choiceConsumer advocate group Choice has published findings of an investigation comparing taxis and ride-sharing services in Australia. As reported in The Guardian today:

Choice found little evidence to support the claim by the New South Wales Taxi Council – printed on billboards around Sydney – that ride-sharing services such as UberX were “no safer than hitchhiking”.

The UberX feature, which connects passengers with registered private vehicles, has triggered protests around the world by the taxi industry, including earlier this month in Melbourne, Sydney and Canberra.

But ride-sharing has taken off in Australia, and was used more than 1m times in the year to May, Uber says.

Investigators from Choice compared 28 taxi rides to the same number of trips using UberX. They found that taxis were more expensive nine times out of 10, and by an average of 40%.

Only with surge pricing – which boosts the cost of a UberX trip when demand is high – did taxis become cheaper, by about 6% in most instances.

Twice, the booked taxis failed to show up, which Choice’s spokesman, Tom Godfrey, put down to drivers finding longer, more expensive fares.

“Part of the problem may be that taxi drivers are told the passenger’s destination, which may make short trips less attractive. Uber drivers, on the other hand, aren’t given your destination until they turn up,” Godfrey said.

In about 62% of cases, a car booked through UberX arrived more quickly than a taxi.

Choice’s full findings can be found here.