Australia’s deteriorating fiscal position

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From the Australian Financial Review, on Australia’s deteriorating fiscal position:

The Parliamentary Budget Office has issued a fresh reminder of how Australia’s political system is struggling to grapple with one of its most basic tasks – keeping the budget in balance.

In a series of graphs, the independent body shows that failure to curb spending and manage faltering tax revenues has left the budget in an ever-deteriorating mess, despite years of positive economic growth.

… Most damning – and the primary reason Australia’s AAA credit rating is facing the very real prospect of being cut for the first time in three decades – is the never-ending rise in national debt, which is growing faster than almost every other highly-rated nation.

The budget office estimates that net debt will surge to $428.5 billion – or 22.6 per cent of gross domestic product – by 2018-19. That’s $30.9 billion more than was forecast at the mid-year budget update in late 2015.

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Albrechtsen on the “cult of taking offence”

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Janet Albrechtsen

Janet Albrechtsen had an excellent article in The Australian today on the dangerous “cult of taking offence” ($) stifling free expression in the West:

To be sure, America is the home of the modern-day propensity to find offence. If this was a cult called Scientology, progressives would be carefully deconstructing its concerning presence in modernity. But the cult of taking offence is a slyer virus because it is largely unchecked. And it’s running rife on university campuses, where it threatens to do the most damage.

… The cult of taking offence has become a determined game of what Jonathan Rauch has called the “offendedness sweepstakes”, and it keeps lowering the bar on what words, ideas and freethinking analysis are to be mowed down to protect the hold identity politics has over academe. Political correctness, the soul brother of identity politics, may have started out briefly in some quarters as a sweet-sounding search for a very civil utopia imbued with respect for minorities. Now it is the weapon of choice in the pursuit of power and control over ideas, words, books, teaching and much more.

Students seek “safe spaces” to avoid ideas they don’t like and even comedians are not welcome: Chris Rock no longer appears on campus because students are more interested in not offending anyone than sharp humour that may offend. Jerry Seinfeld has said he has been warned to stay off campuses too because they’re too PC.

And the result, best described by Greg Lukianoff and Jonathan Haidt, has been the coddling of the American mind where emotional reasoning now determines the limits of university debates. “A claim that someone’s words are ‘offensive’ is not just an expression of one’s own subjective feeling of offendedness,” they write. “It is, rather, a public charge that the speaker has done something objectively wrong” and must apologise or be punished for committing the offence.

This made-in-America phen­om­e­non is no longer an only-in-America one. Students studying archeology at University College London were recently given permission to leave class if they encounter “historical events that may be disturbing, even traumatising” — in other words, if they are freaked out by bones.

The coddling of the Australian student mind is under way too. Last week at the University of NSW a well-meaning lecturer teaching a class on 20th-century European history told his students he felt obliged to issue a trigger warning about material they would cover. At the same university last year, a lecturer teaching a course on terrorism and religion issued a trigger warning too. Isn’t the trigger in the title? Isn’t history replete with traumatic events?

The Australian asked UNSW, the University of Sydney, Melbourne University, Monash University, Queensland University, Queensland University of Technology and the Australian National University in Canberra about their policies, formal or informal, about trigger warnings. Those that responded issued bland comments about having no formal policy, with some offering statements such as this one from Melbourne University: “We encourage academics to be sensitive to student needs and some may choose to give warnings about confronting content.” Or this from Merlin Crossley, UNSW’s deputy vice-chancellor education: “Some of our academics and teaching teams may choose to provide trigger or content warnings depending on course materials and in some cases possible confidential sensitivities of their students.”

In 2017 Monash University will introduce what it calls “a radical and far-reaching reform of our education and pedagogy” involving an “optional inclusion of content warnings where appropriate”.

… Indeed, there are few signs of Australian academics trying to ward off the American-born disease taking hold on our campuses. Quite the contrary. QUT vice-chancellor Peter Coaldrake told this newspaper last month that the university did not choose to be associated with the current public debate about section 18C of the Racial Discrimination Act. That’s unfortunate because section 18C, which makes it unlawful for someone to act in a manner that is reasonably likely to “offend, insult, humiliate or intimidate” someone because of their race or ethnicity, is the legislative extension of trigger warnings that stifle open debate and infantilise students.

… Where does it end? That depends on where we start when it comes to freedom of expression, and currently too many self-indulgent Westerners are starting in entirely the wrong place.

Read the full article here.

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IPA report on the $1.2bn economic cost of green lawfare

The IPA’s recent report on how section 487 of the Environmental Protection and Biodiversity Conservation Act 1999 enables environmental activists to hurt development and job creation, was featured on the front page of The Australian today: 

Environmental groups’ legal challenges to development projects ranging from dams and roads to coalmines are estimated to have cost the economy up to $1.2 billion — an amount that is rising as more “vexatious and frivolous” claims are made.

The 32 legal challenges under the environment laws that went to court meant developers spent a cumulative 7500 days — or 20 years — in court even though 28 of the environmental cases were defeated and three required only minor technical changes to go ahead.

The Institute of Public Affairs estimates that the delays to the projects “cost the Australian economy as much as $1.2bn”.

The conservative think tank’s investigation into challenges to projects under section 487 of the Environment Act, which allows anyone with a “special interest in the environment” the right to challenge, found that environmental groups carried out “an ideological anti-coal, anti-economic development agenda” aimed at holding up projects to reduce profitability and investment.

“Given the high failure rate and frivolous nature of many of the legal challenges, it is clear it hasn’t been applied in the way ­initially intended and rather has been persistently abused by green groups whose primary motivation is an anti-coal agenda,” the IPA report says.

Drawing on Productivity Commission calculations, the IPA finds the use of section 487, which was introduced by the Howard government in 2000, “is estim­ated to have cost the economy ­between $534 million and $1.2bn”.

“This estimate is likely to underestimate the total cost to Australia, as it doesn’t capture all flow-on effects to employment, investment and higher capital costs,” the report says.

“Some projects never go ahead due to heightened risk of legal challenges and consequent higher capital costs.”

Continue reading the front page report here ($). You can read the full report, Section 487: How activists use red tape to stop development and jobs, here.

 

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Ministerial confusion a symptom of big government

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Ministers Marise Payne, Christopher Pyne and Dan Tehan

Today’s revelation by the ABC that 100 days after the federal election, Australia’s three defence ministers still don’t actually know what their responsibilities are, is a classic example of what happens when government is too big.

A fortnight after the July election, FreedomWatch highlighted the Turnbull Government’s 42 executive officeholders and 53 portfolios, and how this compared unfavourably with the first Barton ministry and the first post-war Menzies ministry.

According to the ABC, a ministerial turf war over who controls what, is responsible for this extraordinary delay. Taxpayers may well ask if they still don’t actually have a job description after three months can we please have a refund of their ministerial salaries!

In the real world the job comes before the person – i.e. something needs to be done so you find someone to do it, and if you can’t afford it, you either prioritise, work longer hours or just forget about it. But in the world of government they give as many people as many jobs and titles as they can, paid for by the long-suffering taxpayer, and worry about what they actually have to do later.

Labor is no better, and now has a whopping 48 shadow ministers. There are so many people on the gravy train that one of Labor’s few non-ex-union-official MPs, former economist Andrew Leigh, had to take a pay cut to stay on board.

With federal government spending forecast to pass $500 billion per year in 2019-20 and gross federal debt to pass $500 billion in the next twelve months, it is clear that the size of government and the red tape it creates and administers is out of control.

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UK Nanny State bullies family restaurants

The UK government’s nanny statist food ingredients and portion size policies are now being expanded to restaurants, cafés and pubs of all sizes.

The government plans to set sugar reduction targets, calorie caps for particular products such as chocolate bars and muffins, and push for smaller portion sizes.

If foot outlets, of any size, don’t follow the punitive guidelines they will be named and shamed – possibly on an offical government website. This comes on top of a plan announced in this year’s UK budget to introduce a “sugar tax” on soft drinks. (I have previously written for The Spectator Australia that such taxes are illiberal, ineffective and regressive.)

UK Health Secretary Jeremy Hunt is reported to have told a private meeting of over 100 food companies that he wanted to “shine a light” on non-complying companies, The Times reported in a front page story on Friday:

“We can’t ignore the changing habits of consumers. This means we expect the whole of the out-of-home sector — coffee shops, pubs and family restaurants, quick service restaurants, takeaways, cafés, contract caterers and mass catering suppliers — to step up and deliver on sugar reduction.”

Tim Wilson first wrote on FreedomWatch about Britain’s the impending portion size regulation back in 2013. At the time these were particularly targeted at larger food manufactures. The IPA’s Chris Berg has also warned in 2012 that draconian portion size regulation was recommended by the Rudd/Gillard government’s now-abolished Preventative Health Taskforce.

The basic idea that individuals should be able to choose what they consume, and restaurants allowed to decide their own ingredients and portion sizes, appears to have been lost. Instead the UK government intends to go after family restaurants that don’t comply with their arbitrary standards.

It is apparently now the role of government to decide what we are allowed to eat, and circumstances in which we can eat it.

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How much does it cost to tell a joke in the UK?

It’ll be £2,000 ($3450)!

That’s what former England footballer Paul Gascoigne found out after he made a tasteless joke about a personal security guard at a show earlier this year.

Gascoigne has pleaded guilty to racially aggravated abuse in a British court, and will be forced to pay a fine for his misdeeds.

The BBC reports that the anti-joke judge expressed his approval that Gascoigne was prosecuted in the case.

Gascoigne has denied that he is racist, and apologised stating that he did not intend to cause offence.

However, under UK law that’s apparently not enough. This case sets an extraordinary precedent, dragging people through courts for making a joke!

It’s no longer clear what jokes are and are not acceptable. A judge can now arbitrarily declare what types of humour is acceptable.

As Brendan O’Neill explains in The Spectator:

[The judge] went on to tell Gazza: ‘We live in the 21st century — grow up with it or keep your mouth closed.’ This captures the tyrannical essence of the state’s clampdown on hate speech. What is being said here is that if you have not fully imbibed today’s mainstream moral outlook — in this case that it’s bad to tell racial jokes, in other cases that you shouldn’t mock Islam, make offensive gags on Twitter, or even engage in ‘uninvited verbal contact with a woman — then you should not speak publicly. You should STFU, keep your warped ideas and humour and morality to yourself, thanks. And if you don’t, then expect a knock on the door from the cops, a fine, and maybe jail. This is profoundly illiberal. Under the cover of tackling ‘hate speech’, everything from people’s humour to their moral attitudes to our everyday conversation is being intensively policed and sometimes punished. The seemingly PC war on racist, sexist and Islamophobic language has opened the door to state monitoring of thought, speech and behaviour.

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IPA report: Superannuation cuts “will leave people poorer”

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Coverage of the IPA’s recently released report, “Strangling the goose with the golden egg” by Rebecca Weisser and Henry Ergas appeared in The Australian today. The report outlines that the purpose of a retirement income system should be to enable people to maintain their living standards after leaving the workforce, but that middle-income Australians are poorly served by this system. From The Australian:

Both major parties are condemning middle-income Australians to a dependency on the Aged Pension by targeting superannuation for budget repair, a report from the Institute of Public Affairs says.

As the government prepares to tweak its election commitment to rein in superannuation concessions, the free-market think tank says the government’s “desper­ation” for new revenue sources, as outlined in its $6 billion superannuation tax package, will undermine future retirement incomes.

The release of the report comes as Scott Morrison seeks to reach a consensus with Coalition backbenchers on the shape of the government’s super reforms, with MPs arguing for the Treasurer to lift the cap on non-concessional contributions from the proposed $500,000 to $1 million.

… Institute director of policy Simon Breheny said instead of targeting retirement income to fund spending commitments, the government should cut superannuation taxes of middle Australians to encourage savings.

Mr Breheny said middle-­income earners could expect to have a retirement income equal to 58 per cent of their pre-retirement earnings, compared with nearly 90 per cent for low-income earners.

“The poor have the pension, the rich have alternative investments and the middle class will miss out again. The objective of the superannuation system should be for people to maintain their living standards in retirement, not imply that they should be grateful to be tied to the Age Pension,” Mr ­Breheny said.

… “Unfortunately, proposed changes to superannuation from both the government and the ­opposition worsen, rather than fix the system’s myriad weaknesses,” the report says. “Superannuation reforms should be judged by the effect that they have on helping each individual to accumulate sufficient funds to maintain their living standards in retirement.”The report also concludes that the government’s proposal to introduce a cap on non-concessional contributions and lower the concessional contribution cap will “make a bad situation worse”.

“What is clear is that governments should not tax retirement savings at rates that make it difficult or impossible for savers to ­secure reasonable living standards in retirement based on the living standards they achieved during their working life. Nor should government taxes on retirement savings distort consumption decis­ions, undermining the quality of life in old age and ­reducing overall economic ­efficiency.”

Read the article here ($). Read the IPA’s report, “Strangling the goose with the golden egg” here.

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NT takes the democracy out of the democracy sausage

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Amongst all of the analysis that will undoubtedly follow the weekend’s Northern Territory election, one important issue has almost slipped past without mention. In the days leading up to the election the Northern Territory Electoral Commission launched a quiet attack on a great Australian tradition.

Earlier this year the NT Government amended the Electoral Act to prohibit canvassing for votes (and similar conduct) within 100 metres of a polling place. These amendments extended the previous exclusion zone from 10 metres to 100 metres. The amendments were intended to make the area surrounding a polling place apolitical. In the lead-up to the election, however, it became clear that the new laws would have an unintended consequence for that great Australian Election Day tradition – the democracy sausage.

The Northern Territory Electoral Commission sent out a newsletter to schools before the election warning them that sausage sizzles on Election Day were caught by the new laws. While sausage sizzles could occur within the 100 metre boundary, they had to be conducted apolitically. This meant that staff working at the BBQs “ must refrain from discussing political matters” and that the BBQs could not be manned by a party or candidate worker or even by a former politician.

The implied right to freedom of political communication that was discovered in the Constitution by the High Court of Australia over twenty years ago requires that any law burdening political communication must be reasonably appropriate and adapted to advancing a legitimate object. A law that bans anybody behind a polling booth BBQ from exchanging politically flavoured niceties with punters who are waiting for their sausage to cook, and that bans certain people from reaching for their BBQ tongs entirely is overkill, and constitutionally suspect.

Taking the democracy out of the democracy sausage in the Northern Territory is most likely unconstitutional but, more importantly, it is most definitely un-Australian.

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Public sector wage growth comes at the expense of taxpayers

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Analysis by The Weekend Australian reveals that while private sector wage growth has stalled, there has been rapid growth in public sector jobs and wages, which is making the national debt and deficit situation much worse ($):

An analysis of jobs data by The Weekend Australian shows that the rapid expansion in public-­sector employment and wages comes as workers in the private sector face increased job insecurity and record-low salary rises.

… Australian Bureau of Statistics wages data for the June quarter show the public sector is out-­competing the private sector for jobs. While the overall wages growth was the lowest on record, at just 2.1 per cent for the year, public-sector wages grew by 2.4 per cent.

Wages in the retail sector, Australia’s biggest employer, rose by just 0.1 per cent in the quarter compared with 0.6 per cent in the public sector. As secure work in the public sector expands, workers in retail and hospitality face demands by employers to cut ­penalty rates and hire more casual and junior workers.

Private-sector wage growth has stalled amid warnings that Australia’s debt could blow out by more than $100 billion if the budget is wrong in its prediction that the economy will return to pre-crisis growth and if the Turnbull government is unable to win ­Senate support for all of its outstanding savings measures.

Deloitte Access Economics ­director Chris Richardson said part of the windfall gains from the China boom had been spent on more public-sector employees last decade, but these elevated numbers had been maintained after the boom ended.

Prior to 2002, the share of the labour force attributable to core public-administration jobs was about 5.8 per cent. After 2002, when revenue from the China boom began to feed into the budget, it moved to more than 6 per cent of the economy, “and has been on a mild up trend for the last decade and a half”.

Mr Shepherd, a former Bus­iness Council of Australia president, said there was a “risk of squeezing out” the private ­sector because the public sector could offer well-paid and more ­secure employment. “This does not add much to our national prosperity,” he said.

ABS figures show that hours worked in the non-market economy have grown 1.9 per cent in the year to June, outstripping those in the market economy, which grew by 0.1 per cent. Since March 2008, before the global financial crisis, hours worked in non-market ­industries have grown by 24 per cent, ­compared with 4 per cent for the market sector. Excluding ­educa­tion and training, non-market hours worked grew by 29 per cent over the same period.

The ABS defines the non-­market economy as comprising education and training, public ­administration and safety, and healthcare and social assistance.

The growth in non-market hours worked comes as public-sector salary costs for health and education are rising sharply. Salar­ies paid to public-sector workers in education and training rose 43 per cent to $38bn over the same period, while salaries for health workers rose at the same rate to $35bn.

Wages paid to public-sector employees working in public ­administration and safety rose by 30 per cent to $45bn in the seven years to June 2015, even though the number of workers in this category was unchanged at 580,000.

The strongest growth in job numbers and wage bills has been in state government jobs. The number of state government ­employees grew by 10 per cent to 1.476 million in the seven years to June 2015, while federal public servant numbers were virtually unchanged.

Queensland’s Labor government came into office with a promise to increase public-service job numbers, which have grown by 4000 in the year to March. In Victoria, the Labor government has budgeted for a $3.5bn ­increase in public-sector wage costs over the next four years. The Coalition government in NSW has also ­expanded its ­numbers, by 15,000, to 464,000 in the four years to June 2015. ABS data shows that almost one in three Australian workers is now employed part-time or as a casual, up from 21 per cent in the late 1980s.

Read the whole article here ($)

 

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