Bet on stupid ideas in Gambling Awareness Week

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Poker machine participation rates in Victoria have declined by 50 per cent since 1999.

That is one of the interesting facts which can be found on the website of the Victorian Responsible Gambling Foundation (VRGF), a statutory body set up by the Victorian government “to foster responsible gambling”.

Much of the material produced by the VRGF contains sensible advice on how to avoid becoming a problem gambler. However, this week the VRGF is running Responsible Gambling Awareness Week, and the special week has prompted a spate of public reports and commentary.

Given the decline in poker machine participation rates, it is perhaps unsurprising that the VRGF’s main focus has been on gambling’s big growth area, sports betting. Equally predictable is the fact that much of the commentary has been predicated on the assumption that sports betting is a social evil which should be subject to ever tighter regulation.

A report on “The Marketing of Wagering on Social Media” has allegedly found that wagering companies are using cartoon characters to make impressionable kids grow up thinking gambling is “cool and fun“. Victorian gambling minister, Jane Garrett has weighed in with her concern about sports betting ads contributing to “the normalisation of gambling as part of sport“.

Sports betting’s status as the main source of gambling concern has been caused not just by its growth, but because, unlike the pokies or the races, it intrudes much more into the world of non-gamblers who, like Minister Garrett, see ads for it while watching televised sport.

These ads may sometimes be irritating, but that does not mean that there is anything abnormal about betting on sport.

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Mandatory helmet laws no help on Ride2Work Day

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Today is the national Ride2Work Day, where commuters are encouraged to ditch cars and public transport in favour of their bikes. However, it’s an uphill battle, as irrational mandatory helmet laws are still discouraging people from cycling in the first place.

Indeed, statistics on cycling in Melbourne was cited in an article at the Wall Street Journal this week. From the article:

Some Australians have pushed back against that nation’s decades-old, all-ages bike-helmet laws, arguing that they’re hurting a nation with rapidly growing obesity levels. Observers in Melbourne stationed at the same 64 locations and observation times before and after the 1990 enactment of a state law found a higher rate of helmet use—but also 29% fewer adults and 42% fewer children bicycling at all.

The whole article is a broad collection of the arguments against (and outcomes of) mandatory helmet laws in Australia and the United States, and well worth reading. Check it out here.

MHL’s are a clear infringement of individual liberty, and fail in their primary public policy goal – to save lives – while undermining other public health goals by keeping people off bikes altogether. For more, read this 2012 IPA Review article.

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Victorian public sector union wants “serious love”

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Another day, another week, and another Victorian public sector union trying to take advantage of a Victorian Labor government.

Reports in yesterday’s papers (here and here) suggest that the CPSU is after a 20% pay rise over four years (inflation is currently under 2%), five weeks’ annual leave and automatic salary progression.

According to The Age the CPSU is also after “a new team reward bonus paid to workers whose bosses perform strongly” and “less monitoring of emails”. The head of the union was also quoted saying that state public servants needed “a dose of serious love”

The Herald Sun reveals that public servants want more holidays to match the 12 weeks of school holidays.

This ridiculous log of claims is on top of the ambulance workers dispute which the premier settled on coming to government, and the railways and tram strikes which have been the subject of a previous FreedomWatch column. There is no mention of the productivity improvements that the CPSU has offered in exchange, and this claim is separate from new industrial agreements still to be negotiated with health workers and police.

Victoria’s public servants clearly feel hard done by at the moment. In June of this year they organized their own Public Sector Week to recognize and celebrate their own achievements. However, the CPSU needs to get into the real world: working in the public sector is a privilege, with job security the traditional trade-off for lower-than-private-sector wages. However it appears that nowadays the union wants more workers at higher pay.  The IPA’s Mikayla Novak has previously published research that found that in 2014 the number of Victorian public servants exceeded the notorious Cain-Kirner era.

Public sector wage rises exclusive of productivity at double the rate of inflation are just not on and should be rejected by the Victorian Government.

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Mandatory internet data retention comes into operation today

Simon Breheny and I have been arguing the case against data retention since it was first mooted by the Gillard government – it violates the privacy of every Australian just in case they are later accused of criminality, it will be used for more than just anti-terror policies, and there are alternative policies and approaches which better respect individual liberty. You can read the IPA’s submission to the parliament’s data retention inquiry here.

But all the critiques aside, data retention is shaping up to be a case study in poor policy implementation.

Internet service providers have long argued that retaining that amount of data would be prohibitively complex. In fact, one of the most striking things about the whole debate has been the gap between how easily government has suggested implementing data retention would be and how ISPs have said it would be.

No surprise then that Fairfax is reporting that 80 per cent of ISPs are not actually going ‘live’ with data retention compliance today, but have applied for extensions of 18 months. There is widespread confusion about how much data is to be retained, and no transparency on how the ISPs will be compensated for storing masses of information on their customers’ activity.

Implementation was going to always be a problem with data retention. But it is hard not to conclude that the implementation problems ISPs are now experiencing are the direct result of the government’s lack of conceptual and technical clarity about how data retention relates to current ISP practices.

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Climate change: Cruz 1, Sierra Club 0

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The United States Senate’s Judiciary Committee is currently investigating ‘How Over-Regulation Harms Minorities’ and a nine minute exchange last week between Subcommittee Chairman and Texas Senator Ted Cruz and Sierra Club President Aaron Mair is well worth a look.

The Sierra Club is a prominent and active proponent of human-induced climate change and made a submission to the inquiry arguing the disproportionate effect of air and water pollution on “low income families, communities of color and other historically marginalized and oppressed populations.”

While the video speaks for itself, in a nutshell Senator Cruz asked how the Sierra Club dealt with the fact that satellite data shows no demonstrable increase in global temperatures over the last 18 years. The Sierra Club chairman’s response was a classic (but it has to be said not particularly effective) example of obfuscation and deflection with Mr Mair repeating the statistic that 97% of scientists agree with human-caused global warming.

Continue Reading →

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Meet Angus Deaton: the latest recipient of the Nobel Prize in Economics

Angus Deaton, Dwight D. Eisenhower Professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs and the Economics Department at Princeton University

Angus Deaton, Dwight D. Eisenhower Professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs and the Economics Department at Princeton University

Overnight it had been announced that Angus Deaton of Princeton University is the latest recipient of The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel ‘for his analysis of consumption, poverty, and welfare.’

In selecting Deaton to win what is commonly referred to as the Nobel Prize in Economics the committee adjudicating this award aptly selected an economic optimist, which is refreshing given the way in which recent debates are filled with worries about inequality, environmental degradation, the ‘new normal’ of low growth, and so on.

Born in 1945 in Edinburgh, Scotland, and having commenced his economic studies in the late 1960s, there is a lot of intellectual ground that Deaton has covered over these last few decades. Those interested in summarising commentaries about his key works can read through the Nobel Prize announcement website here.

If there is one major highlight, though, it would be his magisterial book The Great Escape: Health, Wealth, and The Origins of Inequality, which highlights in no uncertain terms how humanity as a whole has progressed by living wealthier and healthier lives than ever before:

The greatest escape in human history is the escape from poverty and death. For thousands of years, those who were lucky enough to escape death in childhood faced years of grinding poverty. Building on the Enlightenment, the Industrial Revolution, and the germ theory of disease, living standards have increased by many times, life spans have more than doubled, and people live fuller and better lives than ever before.

Deaton doesn’t flinch from explaining that problems still exist throughout the world, and he cites the likes of inequality in advanced countries and health problems in the developing world as examples, but these do not overshadow the fact that things are getting better for the masses over time.

The reaction to Deaton winning the Nobel Prize by the economics profession has generally been positive, with many noting the originality of his work using, for example, consumption data as a measure of economic progress.

For further reflections about the work of Angus Deaton, read the comments of Tyler Cowen, Lynne Kiesling, Alex Tabarrok, and Ian Vásquez.

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Section 18C amendments to be debated on Thursday

Senator Matthew Canavan joins the list of senators who will support amendments to section 18C

It’s been less than a week since the IPA’s James Paterson gave this advice to Malcolm Turnbull, and the prime minister now has a terrific opportunity to support free speech in Australia. As reported by Latika Bourke in the Sydney Morning Herald today:

The [Racial Discrimination Amendment Bill 2014], put forward by Family First senator Bob Day, is listed for debate on Thursday morning. It is co-sponsored by Liberal senators Dean Smith and Cory Bernardi and Liberal Democratic Party senator David Leyonhjelm.

The Day amendment would remove the words ‘insult’ and ‘offend’ from section 18C of the Racial Discrimination Act 1975. In May, the prime minister indicated his support of such changes, saying on the The Bolt Report that the idea of removing those words “would not have any negative impact.

A move to restore the Coalition’s 2013 election promise to repeal section 18C would always be preferred. However, this modest and uncontroversial compromise would be smart step in the right direction, and remove the worst elements of section 18C.


See the factsheet the IPA put together on Senator Day’s Racial Discrimination Amendment Act 2014 here.

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New study shows high taxes affect choices about where to live and work

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An interesting new study illustrates what many economists have long recognised, and that is that choices about where we live and work may be influenced by tax rates imposed by various governments.

The paper, co‑authored by the Canadian Taxpayers Federation and Americans for Tax Reform, investigated which factors influenced major ice hockey players to play for certain teams:

Players want to play for certain teams for a lot of reasons; the weather, the coach, the other players on the team … but they also consider the taxes they will have to pay. Like everyone else, NHL players don’t just care about how much they get paid, but how much they get to keep. High taxes might prevent your team from getting that key player it needs, but they also stop other high income earners from moving to your city.

An interesting feature of the study is its reference to the effects of National Hockey League (NHL) rules capping player salaries upon the ability of teams in high‑tax jurisdictions to attract new, quality players. As they put it:

The salary cap limits the ability of a wealthy team in a high-tax jurisdiction to attract top players by paying them more. The advantage of attracting players with higher pay shifts from wealthy teams to teams in low-tax jurisdictions.

There are now a few studies which look into the behavioural responses of sports players to differences in tax, both within a country and across countries, including this study of football players in the European market, and this study that looked at the responses of baseball players to different tax settings in the United States.

What they do show, all in all, is that people with incredible sporting abilities are fairly much like the rest of us in most other respects: they want due reward for their efforts, and they don’t want those rewards dissipated by excessive tax burdens.

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Economic growth more important than tax reform

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Chris Berg in The Sunday Age argues that the key economic debate is on growth:

The new Turnbull government should stop talking about tax reform.

Tax reform is a poor use of its political capital. It is a waste of the goodwill Malcolm Turnbull brings to the prime ministership. The challenge Turnbull faces is not to make our tax system slightly more efficient. The challenge he faces is how to make the economy grow.

When he became Treasurer, Scott Morrison stated that the Commonwealth has a spending problem, not a revenue problem. That is, the government wants to focus on spending cuts rather than tax increases.

This is excellent, as far as it goes. But in truth our real problem is growth.

The International Monetary Fund estimates that the Australian economy is going to grow just 2.5 per cent this year. Back in the Howard years, growth averaged 3.7 per cent a year. The Reserve Bank governor has publicly speculated that our lower growth might be the new normal.

If you want to blame the stubborn budget deficit on anything, blame it on this. John Howard, Kevin Rudd, Julia Gillard, Tony Abbott, Malcolm Turnbull: they’ve all been riding the waves of our growth figures.

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