Archive for March, 2013

Another encouraging graph

March 30th, 2013 90 comments

Wandering around the web, I found this OECD graph on per-capita oil use in residential/commercial/agricultural uses reproduced here


It raises some interesting points
Read more…

Categories: Economics - General, Environment Tags:

Saving the Senate

March 25th, 2013 172 comments

Discussion over the Labor leadership, and the government in general, is now academic, in the pejorative sense of the term. Barring a shock on a larger scale than that of 2001, Abbott is going to win the election, whenever it is held, and win it easily. Nothing Labor does or doesn’t do can make any real difference now.

At this point, the only issue to be considered is whether he can be stopped from gaining control of the Senate. Labor and the Greens have 21 seats from 2010, and Labor can be assured of 1 each in the territories (there’s a perennial hope that a Green or independent will win the second ACT seat, but I’m not counting on it. That means they need to win a combined 3 seats in every state for a majority, and can block legislation if they win 3 in at least five states.

Appalling as Labor’s situation is, they should still muster enough support for two senators in each state, but have (AFAICT) no realistic chance of getting three anywhere. So, what’s needed is to elect a Green in every state.

What can be done to achieve this? The first requirement is that the geniuses who run Labor’s preference strategies should not pull the stunts they have in the past, cutting deals with rightwing independents in the futile hope of adding one to their numbers. If anyone reading this has any influence in this respect, they should exercise it now.

The second is to make a positive case for the Greens that will appeal to people who don’t like Abbott, but can no longer justify a vote for Labor. In my view, the Greens are now the real inheritors of the best traditions of Labor, as opposed to the kind of hardhat/HiVizVest posturing that passes for “Labor values” in the ALP. But that case needs to be spelt out for voters who are understandably turned off by the entire political scene.

Suggestions welcome

Categories: Oz Politics Tags:

Monday Message Board

March 25th, 2013 107 comments

Another Monday Message Board. Post comments on any topic. As usual, civilised discussion and no coarse language. Lengthy side discussions to the sandpits, please.

Categories: Regular Features Tags:

Learning from my mistakes

March 23rd, 2013 92 comments

If you engage in commentary for an extended time on any issue, but particularly on politics, you’re bound to get things wrong. In such cases, there are a few options. The most common is to double down, grasping at any straw that will justify your original claim. Another is to wait; the world is so changeable that a prediction that seemed laughably wrong at one time may turn out correct after all. But, mostly the best thing is to learn from your mistakes.

I’ve made a few mistakes, but the one that I’ve been picked up on most is my prediction, in 2007, that

The Liberal Party will never again win a federal election.”

Of course, this wasn’t meant to be taken at face value. I went on immediately to say that

This isn’t a prediction of unending Labor rule, rather an observation that the Liberal and National parties are in such dire straits that they can’t continue as they are. They haven’t got enough support, parliamentary representation or ideas for one party, let alone two.

I thought the obvious solution was a merger, as in fact happened in Queensland not long afterwards. But my many friends in the Murdoch Press and the rightwing blogosphere have taken great delight in quoting the first sentence out of context. Given that the Liberals have yet to win their election, I followed the waiting strategy, waiting to see whether the turn of events (and the fact that my characterization of the Libs and Nats remains entirely accurate) might validate the prediction after all. But, after the events of the last week, I think it’s time to admit error.

What lessons should I learn from this?

First, never try to be cute on the Internetz, unless you’re a cat. I could have written a straight post suggesting a merger and it would long since have been forgotten. I knew perfectly well that Newscorp and its allies are shameless liars, and that their readers are utterly gullible (provided that what they are reading confirms their prejudices) and I handed them a stick to beat me with. I’ll avoid paradox in future.

Second, never underestimate the capacity of the Labor Party for suicidal stupidity. At the time I wrote the post, Labor seemed safe for two or more terms everywhere but NSW. Instead we saw
* WA Premier Carpenter revoke the ban on dealings with Brian Burke, leading to immediate disaster
* Privatisation campaigns in both NSW and Queensland
* The dumping of Nathan Rees (NSW Labor’s last hope) in favor of Tripodi-Obeid puppet Kristina Keneally
and, most disastrously of all,
* The coup against Kevin Rudd. The march of folly has continued to the very end, with a majority of the Parliamentary Party confirming, for the second time, that they would rather give Tony Abbott control of both houses of Parliament, and, in many cases, lose their own seats, than break with the failed leadership of Julia Gillard. The many (now former) Labor MPs in Queensland who marched straight over the electoral cliff with Anna Bligh and Andrew Fraser seem to have set the pattern here

Categories: Metablogging, Oz Politics Tags:

Auditors, unaudited

March 23rd, 2013 7 comments

The Crime and Misconduct Commission has announced that it does not have jurisdiction to investigate allegations of an undeclared conflict of interest against Peter Costello in relation to the Queensland Commission of Audit. This is an unsatisfactory outcome: the allegations remain neither proven nor refuted, adding to the general miasma of nepotism and jobbery that surrounds the Newman government, and leaving Costello without an opportunity to defend himself against what remain merely anonymous leaks. If the CMC has no jurisdiction on allegations that policy recommendations involving state assets worth billions of dollars are being made by someone with a vested interest, something is seriously wrong. The fact that the Newman government has attacked the CMC (set up because of pervasive corruption under an earlier LNP government) from day one makes this seem even worse.

The Newman’s government’s response to the Audit Commission’s Final report has been similarly inappropriate. It’s not uncommon for a government to sit on a report while it makes up its mind how to deal with the recommendations. I can’t recall, though, a case when the recommendations have been made public, but the report itself remains secret. That suggests a lack of confidence in the quality of the analysis. Given the weakness of the Commission’s Interim Report, and the Commission’s inability to respond effectively to criticism (as an example, my lengthy critique received a one-sentence reply), this lack of confidence is probably wise.

Categories: Economic policy Tags:

Sceptics and suckers: A look back at Iraq

March 21st, 2013 95 comments

Ten years after the invasion of Iraq, the disastrous failure of Bush’s war is evident to just about everyone. Here’s the news from the day before the anniversary.

Debates over the case for war in Iraq coincided with the emergence of the political blogosphere and created divisions that have been pretty much set in stone ever since. Those who, for one reason or another, swallowed and repeated the lies used to push the war dug themselves further and further in over subsequent years. Those of us who were sceptical[1] of the claims made by Bush and Blair, and proven right by events, came to realise that the other side inhabited a parallel universe, in which the possibility that prior beliefs might be changed by factual evidence was largely absent.

I want to restate a point that seems to be forgotten a lot, especially by those who went along with the Bush-Blair claims about WMDs. Until December 2002, there was plenty of behavioral evidence to suggest that Saddam had WMDs, namely the fact that he had expelled (or, more precisely, refused to co-operate with) the UN weapons inspection program. Given the benefits from being declared WMD-free, this made little sense unless he had weapons. Equally, Bush and Blair were making statements that they knew what WMDs Saddam had and fairly accurate knowledge of their location. Again, this seemed (to me, at any rate) to make no sense if they were relying on a bluff that Saddam could easily call.

All of that changed, in December 2002, when Saddam readmitted the inspectors and declared that he had no WMDs. At that point, it suddenly became obvious (again, to me, at any rate) that Bush and Blair had been making it up. I naively supposed that it would be equally obvious to everyone else, and that, as a result it would be impossible to mobilise support for war. That was wrong, of course. I was particularly struck by the unanimity with which the pro-war bloggers reproduced the ever-changing propaganda lines of the Administration. No one would be surprised now, but back then, the assumption was that disputes with rightwingers were a matter of honest disagreement.

fn1. It’s striking, in view of the extreme gullibility shown by such people that the overlap with those who call themselves climate “sceptics” is very high.

Categories: World Events Tags:

Weekend reflections

March 17th, 2013 89 comments

It’s time for another weekend reflections, which makes space for longer than usual comments on any topic. Side discussions to sandpits, please.

Categories: Regular Features Tags:


March 17th, 2013 104 comments

I closed the last sandpit because it had collapsed into a string of personal attacks – if I get time I’ll go through and delete them. I’m opening a new one, but restating the need for civil discussion, which includes a requirement for no personal attacks on other posters. I’m going to be enforcing this more stringently from now on.

Categories: Regular Features Tags:

Peace breaks out in Ozblogistan

March 17th, 2013 13 comments

Following our recent blowup, I’ve had a discussion with Sinclair Davidson at Catallaxy and we’ve agreed not to engage in personal attacks on each other[1]. I’m going to apply this to Catallaxy in general and the agreement includes comments as well as posts. I’ll leave Sinclair to implement this policy at Catallaxy, and I’m doing so here

The rules are
(1) No personal references to Catallaxy bloggers, except identifying them as the author of some piece I (or commenters) might want to respond to
(2) No general statements about Catallaxy as a blog.

I’d be willing to extend a similar non-aggression pact to Andrew Bolt and the anonymous producer of Cut-and-Paste, but without personal attacks, these blogs would have very little to publish.

I’m leaving comments open, but please remember that the policy applies as of now, so I’ll delete any discussion of Catallaxy.

fn1. I’d be willing to extend a similar agreement to Andrew Bolt but, without personal attacks, he would pretty much have to close his blog, so I can’t see that happening.

Categories: Metablogging Tags:

Envisioning Real Utopias

March 17th, 2013 39 comments

Over at Crooked Timber, we are running a seminar on Erik Olin Wright’s Envisioning Real Utopias. Here’s my first contribution. Feel free to discuss here or go over to CT.

The first question to be asked about Erik Olin Wright’s Envisioning Real Utopias is whether it makes any sense to pursue, or even talk about, utopian projects.

Read more…

Categories: Books and culture Tags:


March 15th, 2013 50 comments

A new sandpit for long side discussions, idees fixes and so on.

Categories: Regular Features Tags:

The good news

March 14th, 2013 58 comments

Discussions about reducing CO2 emissions often have a dismal tone, saying that we can’t reduce emissions without a drastic reduction in living standards. Sometimes the inference is that we should do nothing, other times that we should embrace drastically lower living standards (but probably won’t). Most people share this intuition to some extent, particularly as regards activities like driving, that seem central to a modern lifestyle. So, it’s striking to see what’s been happening to per capita gasoline consumption in the US


There’s a lot going on here: prices, fuel economy regulations, ethanol and general cultural shifts which have reduced distances driven. But the big point is that this drastic decline has happened with only modest policy measures, and without any obvious impact on living standards (US living standards haven’t done well in the 2000s, but for entirely different reasons). Looking ahead, Obama’s fuel economy regulations and sustained high prices should drive US gasoline consumption much lower.

Categories: Economics - General, Environment Tags:

Starting as I mean to go on (updated)

March 13th, 2013 125 comments

As I said in my last post, I’m giving as good as I get from now on, and today I seem to be getting plenty

Over at Catallaxy (Google it if you want), Sinclair Davidson is complaining about my Australian Laureate Fellowship (total budget, including lots of postdocs, PhD students etc, $2 million over 5 years) as an imposition on the taxpayer. Sinclair also receives a taxpayer funded salary of at least $150K. The standard assumption is that 30 per cent of a professorial salary is for research, the rest for teaching, administration, community service and so on. By contrast, I’m funded 100 per cent for research, my own and that of my students and collaborators. So, let’s see who is goofing off on the taxpayer dollar.

Here’s Sinclair: two journal articles\, and zero working papers in the last five years. On my arithmetic, allowing 30 per cent of salary for research, that’s a rate of over $100k per publication.
Here’s me 29 journal articles and 36 working papers in the same period. That’s about $30k per publication, without allowing for material produced by the postdocs and PhD students funded by my grant.

Those aren’t exhaustive lists of publications by any means, but I doubt that the relativities would change if we had a more complete list, including books, reports and so on. Adjusting for journal quality, as perceived by the profession, would make the difference even sharper.

Updated With their usual affinity for conspiracy theories, commenters here at and Catallaxy are suggesting that my current Fellowship is a favor from my Labor mates (readers here will be aware of my slavish devotion to our PM, which has, it seems, finally paid off). Of course, the great thing with conspiracy theories is that, the longer you look, the more conspirators you find. I’m sure the Catallaxians will be unsurprised to discover that this is, in fact, my fifth fellowship of this kind (the publication count above refers to my previous one), and that the previous four were all awarded by the Howard government.

Further update Sinclair Davidson has responded with a more complete list of his publications, including quite a few that appear neither on the IDEAS database (because it doesn’t include low-grade journals like Agenda and Policy nor on his personal webpage at RMIT. As I said above, it doesn’t change the relativities.

Yet further update Davidson has managed to convince the ever-gullible Andrew Bolt that pieces in Policy (not even ranked as a peer-reviewed journal by the ARC ranked C by the ARC), Agenda (ranked B) and a bunch of CIS/IPA publications constitute a stellar publication record. There’s nothing wrong with publishing in magazines like these (I do plenty of it), but it’s supposed to be a by-product of academic research, not a substitute for it. Bolt (innumerate, and out by two orders of magnitude on the impact of emissions policy), also repeats his claim that I’m the math-challenged one.

Motes and beams

March 13th, 2013 41 comments

The Oz and Andrew Bolt have a tag team attack on me today (Google it if you want). Most of it consists of quotations, with lots of ellipses, that are meant to show me as a dangerous radical. I can’t say I’m too upset by that – from their perspective, it’s a fair assessment. But Bolt also repeats his claim that I made a factor-of-5 error in my estimate of the impact of Australia’s current 2020 target on global temperatures.

This is a striking piece of chutzpah, given that this estimate was made in the process of correcting a calculation by Bolt, which was out by two orders of magnitude. But it has finally provoked me to clear up some of the confusion on this. The starting point was this post by Bolt who used a calculation by Damon Matthews that each tonne of CO2 emitted into the atmosphere changes the equilibrium temperature by 0.000 000 000 0015 degrees, that is 1.5*10^-12 in scientific notation. Noting that the carbon price is expected to reduce emissions by 160 million tonnes per year by 2020, Bolt made the calculation that the emissions avoided in the year 2020 will reduce equilibrium temperature by 2.4*10^-4 or 0.00024 degrees, and treats this as an estimate of the impact of the policy.

This is an amazing howler on Bolt’s part. He’s only counted one year of emissions reductions for a policy that is supposed to permanently reduce emissions. I made the very quick calculation that, if the policy stays in place until 2100 and that the 2020 reduction in emissions was maintained over this period, the number used by Bolt would imply a reduction of 0.02 degrees. I did another rough calculation that came out the same way.

Bolt came back with a lower estimate by Roger Jones, who suggest that the policy would reduce temperature by only 0.004 degrees, lower by a factor of 5 than my estimate, but higher by a factor of 20 than Bolt’s silly calculation.

At this point I slipped up. As a result of a misunderstood conversation with Roger, I gave an incorrect explanation for the discrepancy. Roger subsequently advised that he had made his calculation using a standard modelling tool called MAGICC. I finally got around to downloading MAGICC, and trying it out, so I can now give an explanation for why our estimates differ. There are three main points

(1) The most important factor is that we are estimating two different things. MAGICC produces estimates of the temperature change by 2100, but the atmosphere takes a long time to reach equilibrium. For reductions in CO2 emissions spread out over the rest of this century, the change by 2100 is only about half the long run equilibrium change.

(2) Estimates of the sensitivity of the global climate to changes in CO2 concentrations vary. The most common measure is the equilibrium temperature change for a doubling in atmospheric CO2. Until recently MAGICC used 2.6 degrees as the default, on the low side of most estimates. I used 3.5, which gives a value around 30 per cent higher

(3) Finally, while it’s obviously silly to assume, like Bolt, that the policy is in effect for only one year, it’s not entirely clear how we should project its impact into the future. That depends on baseline projections of emissions from which to calculate percentage reductions. My simple estimate takes a constant reduction over 80 years, which is probably a bit on the high side. If you assumed that emissions were going to decline anyway over the second half of this century, the effect of the policy would be reduced, perhaps by half.

Those three factors, taken together, would account for the discrepancy in the two estimates. I don’t claim that I’ve got them exactly right and there may be points I’ve missed. But for someone like Bolt to pontificate on a subject like this, when he is incapable of avoiding or correcting even the most absurd errors, brings to mind Matthew 7:3-5.

Read more…

Categories: Boneheaded stupidity, Environment Tags:

I may be some little time …

March 12th, 2013 119 comments

Paul Norton has a post at LP, summed up by the teaser

current poll support for the election of an Abbott-led Coalition government is soft and brittle. Yet it exists, and persists. And voter opinion of what the Federal Labor government has actually done is not all that unfavourable. Yet people don’t think the government deserves to be reelected. What are we to make of this?

I don’t think it takes a genius to work out that a sufficient explanation for this paradox is the personal unpopularity (among a large group of voters, detestation) of Julia Gillard. Other factors may be relevant, but most of them are exacerbated by the leadership problem. In particular, the Obeid scandal is made worse for Federal Labor by the perception that Gillard is beholden to the same machine operators (Arbib, Bitar, Conroy and ultimately Graeme Richardson) who put Obeid in a position to corrupt the entire NSW Party.

For the sake of argument, let’s grant that this is all the result of misperceptions and bad press and that Gillard is both likeable at a personal level and someone with a “steely determination” to get the job done for Labor. It’s obvious, by now (and regardless of marginal fluctuations in polls) that this perception is not going away within six months. In these circumstances, wouldn’t a leader who cared about her colleagues, or one who was determined to do the best thing for the country, decide that this was the time to talk a walk into the snow, and give the rest of the party a shot at survival?

Categories: Oz Politics Tags:

LP is back

March 12th, 2013 7 comments

Ozblogistan has been up and down lately[1], which has distracted me from mentioning the return, for this election only, of the deservedly popular Larvatus Prodeo group blog.

fn1. Blogs are doing the same things now they did ten years ago, and have lost a fair bit of their traffic to FB and Twitter but despite spectacular reductions in storage and communications costs they seem less reliable now than then. How can this be?

Categories: Metablogging Tags:

Art and life

March 12th, 2013 8 comments

I’ve been a big fan of Frank Moorhouse’s Edith trilogy since I first encountered it nearly a decade ago. The first two volumes, Grand Days and Dark Palace dealt with the heroine’s adventures (political and sexual) as a young and optimistic staff member with the doomed League of Nations. That was a fascinating glimpse of a world that had vanished well before I was born, and showed up Moorhouse’s capacity for imaginative recreation of that world, as well as the marvellous character of Edith Campbell Berry.

In the third volume, Cold Light, Edith turns up in early postwar Canberra, and there’s a sudden shift of view for me (and I guess, also for Moorhouse). The story runs into the early 1970s, when I was growing up and going to uni in Canberra. Edith is an observer and occasional participant in events ranging from the creation of Lake Burley Griffin to Menzies’ attempt to ban the Communist Party. Not only that, but most of the characters, with the exception of Edith and those in her immediate circle, are real people. Notable examples include Latham, Menzies and Whitlam, but also some academics from the early days of the ANU. I knew quite a few of them, and some of them even knew me: Heinz Arndt, for example, paid me the backhanded compliment of describing me as “a very dangerous young man” [1].

Reading and visualising a book so close to your own life is an odd experience – I was starting to wonder if I would appear in a crowd scene, perhaps outside Parliament House after Whitlam’s dismissal. For younger readers, of course, the early days of Canberra belong to the same dim past as the Kellogg-Briand Pact. They will, I think, find the book just as rewarding as I did, though in a very different way.

fn1. Arndt had been a leftwing social democrat in his early years in Australia, but moved sharply to the right later. In mischievous moods, I sometimes cited, with approval and without mention of his subsequent evolution, his early work advocating bank nationalization.

Categories: Books and culture Tags:

GBS pwns IPA

March 11th, 2013 35 comments

Anyone who has been around the left of Australian (or UK) politics long enough will be aware of the Fabian Society. It’s a group that’s earnest in the way only an organization founded in the late 19th century can be. It produces carefully researched papers on topics like education funding and housing policy, invariably worthwhile, but rarely fiery.

The Society takes its name from a Roman general who achieved victory over the seemingly invincible Hannibal, by avoiding pitched battle and wearing his opponent down: the idea was that socialism should be achieved by gradual reform through democratic processes, rather than through the revolutionary approach advocated by Marxism. This gradual approach was symbolised by the adoption, as a logo, of a tortoise (or maybe turtle), drawn by Walter Crane, the leading illustrator of children’s books in the late 19th century, and a society member. And, after 100+ years, even the most optimistic Fabians would concede that, if anything, the tortoise exaggerates the pace of movement towards socialism.

In spite of, or perhaps because of, this resolutely gradualist approach, the Fabian Society has always loomed large in the demonology of the nuttier sections of the political right, appearing as some sort of cross between the Illuminati and the United Nations. Here for example is Rose Martin of the Mises Society, warning that the tortoise is now going at the pace of a freeway.

The Institute of Public Affairs is the leading Australian representative of this kind of wingnuttery[1] (although it manages to get taken seriously by surprisingly many) so it’s unsurprising to see the IPA’s Julie Novak muttering darkly at Catallaxy[2] about this “shadowy group” (she’s a bit puzzled that Julia Gillard openly declares her membership). What’s interesting is her claim, with illustration that “The logo of the Society, of a wolf dressed up in sheep’s clothing, is all you need to know about how these people seek to achieve their objectives”

Huh? What happened to the tortoise? The answer it turns out, goes back to a joke played by George Bernard Shaw early in the 20th century

Read more…

Monday Message Board

March 11th, 2013 20 comments

Another Monday Message Board. Post comments on any topic. As usual, civilised discussion and no coarse language. Lengthy side discussions to the sandpits, please.

Categories: Economics - General Tags:

Electricity privatisation in Queensland

March 6th, 2013 55 comments

I’ve just released a report I prepared on electricity privatisation in Queensland[1] This was a bit difficult given that the Costello Commission’s proposals have been announced with great fanfare, but the supporting analysis is so secret that even Campbell Newman claims not to have seen a copy. This Courier-Mail story by Paul Syvret gives the basic points

The report is online here.

fn1. It’s partly a followup from my previous response to Costello’s Interim Report. As in that case, I’m not getting paid for this, and it’s entirely my own work. So, it’s not as polished as the Costello report will doubtless be when it comes out, but I can confidently say it’s better value for money for the Queensland public.

Categories: Economic policy Tags:

For the record

March 5th, 2013 44 comments

Another quick post on nuclear power, probably the last for a while. Most of my discussion about nuclear power has been on the question of whether expansion of nuclear power is, or is likely to be, a cost-effective way of reducing CO2 emissions. The answer, as revealed by the failure of the heavily subsidised “nuclear renaissance” in the US, is “no”. But, for the existing (mostly Generation II, see over fold) plants, there’s a separate question – does it make sense to close them down early, or, alternatively to seek to extend their lives.

Since this issue comes up a lot, I thought I would state my position clearly. Nuclear power is an almost exact substitute for coal, has no CO2 emissions and (except where particular vulnerabilities have been demonstrated) comparable or lower health and safety risks (these numbers can be played with in various ways). The marginal cost of generating power from existing plants is low. Problems like waste disposal will have to be addressed anyway, and a few more reactor-years worth won’t make much difference.

So, except where there are particular vulnerabilities that are too costly to repair, I favor keeping existing plants open as long as they can be kept in good repair.

Read more…

Categories: Environment Tags:

Commissions of Audit, then and now

March 4th, 2013 17 comments

I’ve been thinking quite a bit about Commissions of Audit lately[1]. Although the Costello report has not yet been released, I happened to find, on my bookshelf, a document entitled “Report of Queensland Commission of Audit”. It’s not a back-of-the-truck pre-release copy, but the report of the 1996 Commission of Audit, commission by the newly-elected Borbidge (Nat-Lib coalition) government[2], and led by Vince Fitzgerald (a credible, though conservative economist).

The Report makes interesting reading. Its key conclusions are

(a) Queensland’s balance sheet is strong. The state’s net worth is $51 billion
(b) There is an inbuilt negative trend in the state’s operating position, which if unchecked will reach a deficit of $2.7 billion in 10 years

Point (a) sounds pretty positive given that both the Newman government and the interim Costello report paint a picture of a state on the verge of bankruptcy. So, what’s happened to our net worth over the 16 years from Fitzgeral to (interim) Costello. Readers might expect that it’s fallen a lot, or even become negative. In reality, it’s more than tripled, to $171 billion.

Of course, the Costello report has switched attention from net worth to gross debt. While this makes little economic sense in ordinary terms (if you were buying a company, would you care more about its net value, or its debt level), it might be important if the ratio of debt to net worth had risen a lot. Actually, gross debt was $24 billion in 1996, and is $64 billion now. The ratio of gross debt to net worth has actually fallen.

To sum up, the big difference between Fitzgerald and Costello is that Fitzgerald is a serious look at the state’s finances, while Costello (in common with the majority of Commission of Audit reports) is a propaganda stunt. The state’s underlying position is strong, just as it was in the 1990s.

The second point reported by Fitzgerald is also interesting. Borbidge only had one term and didn’t do much, so the problem of dealing with the adverse trend identified in the report fell to the Beattie Labor government. Beattie kept the budget in surplus, and it remained in good shape until we were hit by the GFC and climate disasters of the last few years.

fn1. Of course, we’ve been treated to a peek at the conclusions. This is not calculated to inspire confidence in the analysis, but it certainly makes criticism more difficult.
fn2. Although the Costello Commission is often presented as if it’s something new, appointing a Commission of Audit has been routine piece of political theatre for incoming conservative governments since the early 1990s. The recommendations almost invariably involve spending cuts, and usually asset sales.

Categories: Economic policy Tags:


March 4th, 2013 43 comments

A new sandpit for long side discussions, idees fixes and so on.

Categories: Regular Features Tags:

Monday Message Board

March 4th, 2013 12 comments

Another Monday Message Board. Post comments on any topic. As usual, civilised discussion and no coarse language. Lengthy side discussions to the sandpits, please.

Categories: Regular Features Tags:

Bait and switch

March 2nd, 2013 101 comments

In the course of raillery with the famously scabrous Thames watermen, Boswell reports that Dr Samuel Johnson triumphed with the line “Sir, your wife, under pretence of keeping a bawdy-house, is a receiver of stolen goods”‘

That insult is applicable, with minimal modification to the Institute of Public Affairs. The IPA advocacy of dams in Northern Australia, long notorious among economists as the worst kind of boondoggle is the kind of scandalous behavior analogous to running a house of pleasure. But, as various interactions on Twitter and elsewhere have made clear, the IPA isn’t really keen on dams – that’s just bait to bring in the nostalgic believers in what Bruce Davidson famously called “The Northern Myth”

The real agenda is the creation of a special economic zone in Northern Australia, with lower taxes and less regulation, but apparently still receiving the same flow of public funds from the national government as at present[1]

Proposals for dams are mostly harmless since so few of them are likely to stack up, even with subsidies. But the suggestion of special tax treatment for businesses located in one part of the country rather than another is the worst kind of distortion[2], the public policy equivalent of receiving stolen goods.

And we don’t have to look further than the front page of the IPA website to see the promoter and biggest single beneficiary of this proposed ripoff – none other than Gina Rinehart, Australia’s richest woman and one who has done nothing to earn her wealth except to be very successful in Family Court.[3]

It’s a tough call whether the IPA has reached its lowest possible point in proposing that ordinary Australians should pay more taxes and get less services, in order to provide a targeted tax handout to Rinehart. That’s low, but arguably not as bad as lying in the service of the tobacco industry.

fn1. The NT government is easily the biggest per capita mendicant in the country, as can be seen from its massively oversized Parliament, more suitable to a medium-sized country than a population of 200 000.

fn2. Individual taxpayers already get a concessional “zone allowance”, but it’s small enough not to constitute a serious distortion. By contrast, the corporate handouts being pushed by the IPA could be huge.

fn3 As pointed out in comments, it was actually in the Supreme Court which deals with inheritance disputes, such as those between Rinehart, her stepmother and her children. The Family Court is only for divorces.

Categories: Economic policy Tags: