Is a sugar tax such a bad idea?


Nick Cater takes down the ‘sucrophobes’ in his column ($) in The Australian today:

The first thing that should trouble us about the sucrophobes is the simplicity of their proposal. The social, psychological and physical causes of obesity are complex. Unwanted kilos of body mass do not succumb to miracle cures, raising the price of sugar ­included.

Equally revealing is the fact its advocates seldom talk about revenue. It suggests their proposal is not principally about collecting money but has a far more lofty purpose.

Rest assured, the Obesity Policy Coalition tells us in its submission to the government’s tax review, a sugar-sweetened beverage tax would raise “considerable revenue” while increasing demand for water and low-fat milk. Yet neither proposition is backed by evidence; we are expected to take them on trust.

Fat tax proposals, like so many public policy blunders, are driven by the imperative to do something in the face of an imagined crisis. We have been struck by an “obesity pandemic”, we are told. Health costs are not just rising, they are “spiralling out of control”.

The sucrophobes back their arguments with scareynomics — the use of terrifyingly big numbers in an attempt to persuade us that their absurd proposal makes ­perfect economic sense.

If we are to believe a recent report from Obesity Australia, for example, obesity costs Australia $58 billion, a figure equivalent to 40 per cent of the health budget.


Victorian taxi industry waves the white flag


After a year-long campaign of misinformation, the Victorian Taxi Association (VTA) has finally raised the white flag. The Guardian reports:

Victoria’s Taxi Association has abandoned industrial action and campaigning as a response to Uber, admitting the industry has not responded well to customer criticism.

On Monday the association’s chief executive, David Samuel, announced an initiative calling for honest feedback from taxi customers so that the industry could adapt and respond.

To say they haven’t responded well to customer criticism is putting it mildly. As customers unhappy with the level service, availability, and convenience of traditional taxis have gradually abandoned them for new competitors like Uber, the VTA has responded with fear-mongering and calls for government crackdowns.

Their favourite claim was that Uber is unregulated, and therefore unsafe.

On the first point, Uber drivers is not “unregulated”. They are regulated by the same road rules and laws that cover all drivers. They are also subject to a variety of safety measures, which include third party criminal background checks.

Perhaps most importantly, there are quality control and feedback measures embedded in the Uber app, which are intrinsic to their business model. As I argued in the Herald Sun in May, this not only makes Uber (and competitors like Lyft) more convenient than traditional taxis, it also makes them safer.

At the very least, the Victorian Taxi Association seems to have finally realized that this strategy will not work.

The industry’s only chance of survival is to adapt, innovate, and compete with Uber — and future competitors — in the marketplace. Something which, so far, they have failed to do.

But to be fair, this isn’t entirely the taxi industry’s fault. Decades of government protection insulated the industry from competition, lowering the quality of service, and making them less responsive to customer demands. The industry benefited from this protection for decades, time will tell if it will be the cause of their downfall.

The Victorian Taxi Association’s olive branch is a step towards positive legislative reform. Perhaps if they had spent less time attacking their critics — like yours truly — we might have got to this point sooner.

For more on the sharing economy, check out the IPA’s paper by Chris Berg and Darcy Allen: The sharing economy: How over-regulation could destroy an economic revolution.


Another lazy tax grab

A9X9B5 Tax Rate button on calculator

Latika Bourke at the Sydney Morning Herald reports on a Labor commitment to increase the tobacco excise if elected:

Labor is planning to raise taxes on cigarettes if elected to pay for the so-called Gonski education reforms, potentially pitting a slug on smokers against any Coalition plan to increase the GST rate or impose it on fresh food.

Sources have told Fairfax Media that the federal opposition is considering another round of three 12.5 per cent increases, which sources said would net $40 billion over 10 years.

The increase would push up the cost of cigarettes in Australia to well beyond $1 per stick, making Australia’s tobacco among the most expensive in the world.

This is mindless policy from an opposition that has offered very little by way of substantive ideas for reform. Instead of engaging in a thorough discussion about taxes, revenue, spending, and the size of government Labor has opted for rank intellectual laziness in the form of yet another attack on smokers.

On the plus side, Labor has handed the Liberal Party a great opportunity to stand up for its values.


New challenge to Adani Mine


The Australian Conservation Foundation (ACF) has announced today that it will be challenging the federal government’s approval of Adani’s Carmichael coal mine in remote western Queensland.

Quelle surprise!

The ACF is alleging that the minister may not have considered the effect of the mine’s carbon dioxide emissions on the Great Barrier Reef – or the mine’s potential impact on the Black Throated Finch.

If the mine does manage to get up, it will provide thousands of jobs, billions in taxation and export income over its predicted 60 year life, and provide the means to open up that part of Queensland to significant long-term economic development.

FreedomWatch warned last month that environmentalists had emailed supporters to say that they were going to run another case – as soon as they figured out who would do it and “who will play which roles”.

This is vexatious litigation pure and simple. The so-called right to object is being twisted into a self-declared right to obstruct.

The federal governments proposed amendments to federal environmental laws to only allow genuinely aggrieved people to appeal approvals must be revisited and passed as soon as possible.


Reach rule set to go


An exciting development:

Media reform will be discussed by cabinet this month, with Malcolm Turnbull poised to abolish the population reach rule and television licence fees in the current parliamentary term.

Despite strong opposition from some players that led to the plan being ditched earlier this year, a recommendation to cabinet and a public policy announcement could be made by Comm­unications Minister Mitch Fifield as soon as this week, sources say.

A decision in the sitting week of November 23 is most likely, ­because speculation suggests draft legislation is yet to be framed, ­limiting the ability for quick ­mergers and acquisitions, as happened within days of the 2007 cross-media ownership changes when Nine and Seven both sold to private equity partners.

More at The Australian ($).

This reform is well overdue. It’s been in Turnbull’s sights for some time and the new communications minister, Senator Mitch Fifield, has also put it at the top of his agenda.


Email: Senator Eric Abetz the 14th senator to support freedom of speech

Parliamentary support for free speech continues to grow.

Liberal senator Eric Abetz (Tasmania) has encouraged his party to throw their support behind amendments to remove the words “offend” and “insult” from section 18C of the Racial Discrimination Act 1975.

See the full list of current senators who are on the record in support of changes to section 18C here.

The damage to science from global warming


On Thursday, an important essay by Matt Ridley was published by the Global Warming Policy Foundation, categorically detailing the distortion of scientific debate, and the damage to science itself, brought about by global warming alarmists.

He says:

At the heart of the debate about climate change is a simple scientific question: can a doubling of the concentration of a normally harmless, indeed moderately beneficial, gas, from 0.03% of the atmosphere to 0.06% of the atmosphere over the course of a century change the global climate sufficiently to require drastic and painful political action today? In the end, that’s what this is all about. Most scientists close enough to the topic say: possibly. Some say: definitely. Some say: highly unlikely. The ‘consensus’ answer is that the warming could be anything from mildly beneficial to dangerously harmful: that’s what the IPCC means when it quotes a range of plausible outcomes from 1.5 to 4 degrees of warming.

On the basis of this unsettled scientific question, politicians and most of the pressure groups that surround them are furiously insistent that any answer to the question other than ‘definitely’ is vile heresy motivated by self-interest, and is so disgraceful as to require stamping out, prosecution as a crime against humanity, investigation under laws designed to catch racketeering by organized crime syndicates, or possibly the suspension of democracy.

You can find this must-read essay here. Matt Ridley also delivered the 2013 CD Kemp Lecture for the IPA, ‘Freedom and Optimism: Humanity’s Triumph.’ You can watch the video of the lecture here and his Q&A session with Bjørn Lomborg here.

Continue Reading →


Remembering Menzies’ wise words on religious liberty


The Victorian government’s relentless push to broaden anti-discrimination laws continue, no matter what stands in the way.

In September, I noted how the Labor party’s view of “equality” was concerned more with special privileges for some, and diminished liberties for others. The most recent effort concerns ruling out a proposed exemption for religious organisations in legislation that would permit same-sex adoptions.

A faith-based adoption organisation is fundamentally concerned with where a child is placed, and the nature of the family involved. The proposed changes to anti-discrimination laws run directly counter to these organisations ability to conscientiously carry out a worthwhile service. This is problematic to say the least.

This week, Attorney-General George Brandis opened a roundtable on freedom of religion, where he quoted Robert Menzies from one of his Forgotten People broadcasts in 1942. The transcript in full is worth reading, but one quote in particular struck me as especially timely:

… religious freedom for which the Scottish Covenanters fought was freedom for all, Catholic or Protestant, Jew or Gentile, and that to deny it was to go back to the dark ages of man. Religious persecution was the denial of freedom. Freedom of worship is the victorious enemy of persecution.

And so I revert to the theme of my broadcast on the first freedom – that freedom, if it is to mean anything, must mean freedom for my neighbour as well as for myself. There is nothing defiant or sectional about a demand for genuine freedom of worship, which is freedom for all.

The Victorian government’s view of equality undermines religious freedom, and is fundamentally anti-liberty. Menzies’ wise words are worth remembering.


ASIC’s plan to put warning labels on financial products


It has recently been reported that financial regulator the Australian Securities and Investments Commission (ASIC) wishes to apply warning labels, not unlike those seen on cigarette packets, to various financial products.

Investor warnings could be slapped on a host of complex and risky financial products in the same way as the graphic warnings on cigarette packets, under new safeguards being considered by the corporate regulator. … ASIC could use the power to impose conditions on risky investment products such as restricting access for self-managed super funds, requiring retail investors to obtain financial advice before they could invest or slapping warnings on product disclosure statements and prospectuses for example telling investors, “Your capital is at risk”.

This kind of proposal, when bureaucrats elect to involve themselves in consumer calculations about the balance between risk and return, is plainly inconsistent with a liberal society in which we are meant to lean toward dignifying people with the capacity to make their own financial choices.

In this case, ASIC would privilege themselves with standing in for consumers when making decisions balancing the costs and benefits (as filtered by risk-return considerations) when purchasing certain financial products. This substitution of political for individual decision making is, if nothing else, particularly elitist in its character.

Another concern would be that consumers might well elect to take government recommendations about risk assessments at face value, depriving themselves of learning opportunities about what financial product configurations best suit their needs.

As Chris Berg noted in his book, The Growth of Australia’s Regulatory Statethe trouble with mega-regulators such as ASIC is that they see very few limits to their regulatory domain and this leads to undue costs imposed upon the productive economy.

When ‘everything is on the table’ in policy terms is the time many illiberal ideas come out into the open. Let’s hope Treasurer Scott Morrison has the energy and foresight to prevent ASIC indulging any further with this particularly illiberal idea.


Matt Ridley on climate wars damage to science

Viscount_RidleyMatt Ridley’s June essay for Quadrant on the damage that the climate debate is doing to science has been re-published by the Global Warming Policy Foundation with a new introduction, and is well worth a read.

Ridley, who describes himself as a “lukewarmer” (someone who believes that that the climate may be changing but that the effects are nothing to worry about), details how many of the climate change claims made by scientists over the years have not held up to independent scrutiny and how the reasonable middle ground in the debate has been cleared away.

He finishes with the sentence “Yet they are not prepared to debate the science behind their concern. That seems wrong to me.”

Read the whole essay here.


Top 3 articles from this week you must read


Arthur C. Brooks

1. Matt Ridley’s terrific essay on the damage global warming alarmists are doing to science is a must read

2. In the New York Times on Saturday, Arthur C. Brooks slammed academia for promoting diversity, without actually practicing it

3. From the “population bomb” to catastrophic climate change, it seems progressives always champion doomsday ideologies. See Bret Stephens excellent article In The Australian yesterday here ($)