Home > Economic policy, Oz Politics > I’m underwhelmed …

I’m underwhelmed …

August 15th, 2013

… to put it mildly, by Kevin Rudd’s endorsement of the Coalition/IPA proposals for a variety of tax and policy distortions to subsidise economic activity in Northern Australia.

I get that a certain amount of this kind of thing is to be expected in an election campaign, but I hope we don’t see too much more of it.

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  1. Garry Claridge
    August 15th, 2013 at 17:16 | #1

    In Queensland, the mining industry is already subsidised by about $930 per household per year 🙁

    How about Small Business!

  2. Newtownian
    August 15th, 2013 at 18:04 | #2

    @Garry Claridge
    You might want to add into this subsidy complex the moneys being paid to Queenslanders by the rest of the country directly through the flood levies and indirectly through those huge hikes in household insurance premiums.

    I’d be interested to know what JQ and others think of what are in effect subsidies in dodgy development in flood plains as a case study using Queensland. Brisbane is a useful case study for focusing the philosophical thoughts on this matter of the difference between good and bad subsidies in the broad sense as it was so big and so recent.

    Just to balance things and show I’m not simply Queensland bashing its necessary to also realise Western Sydney and Newcastle are in exactly the same situation floodwise through historical planning decisions based on fudging the magic 100 year flood recurrence line and could well be next. Or if we want to go overseas there is New York recently and the city of London where our superannuation is in part dubiously invested again in flood plains.

  3. TerjeP
    August 15th, 2013 at 18:49 | #3

    I thought this would get a reaction from JQ. Bingo.

  4. August 15th, 2013 at 19:18 | #4

    … tax and policy distortions [emphasis added] to subsidise economic activity in Northern Australia.

    Now hang on, isn’t that begging the question, i.e. building in the conclusion? Although tax and/or policy measures can be distortions, it ain’t necessarily so. They can be counter-measures to separately existing distortions, for which the important follow up questions are whether there are indeed such distortions, whether the measures do indeed counter them, whether the measures’ funding costs etc. throw (net) larger or smaller distortions elsewhere, and so on.

    So, are there rationales like that? Prima facie, it seems arguable, since many of the proposals relate to transport infrastructure and things like that have been known to have positive network externalities. (I would also throw in defence related measures for distinct handling, since there the questions should be like “is it worth it at that price?”, not “does that cost us or help us?” – that sort of thing is supposed to be something we’re buying, not something that makes the machine run better.)

  5. Kevin
    August 15th, 2013 at 20:54 | #5

    I agree with John on the NT policy. It’s not as bad as Abbott’s original idea to do that and also to lure half the public service up north though.

    But what I’m really underwhelmed by is Rudd’s campaign. He’s not defending his very strong economic record, he’s not attacking Abbott and calling out his nonsense. What we need is not grating and cringe-worthy ads with mums telling the camera how much she can’t trust Abbott while cooking. What we need is direct, fact-based attacks and defense, like the stuff Labor’s “Reality Check” twitter and website, puts out, which apart from the occasional rhetoric, is mostly very good. That’s the sort of thing Rudd should be saying in front of a camera and be put in the ads. Watching this election slip away as very very depressing.

  6. Fran Barlow
    August 15th, 2013 at 22:19 | #6

    So far, I’m feeling pretty comfortable with my view that a change to R**d would make no positive difference to any matter of substance, and that even if a worse loss was avoided than that mooted under Gillard, the cost of that avoidance would be higher than the value of “furniture saved”.

  7. August 15th, 2013 at 23:38 | #7

    It seems to be the weakest version of the IPA proscription possible, though. How many new businesses will qualify? The only people this could seriously benefit are the Darwin based bookies. And our Chinese friends with that fat lease on the Ord.

  8. crocodile
    August 15th, 2013 at 23:57 | #8

    m0nty :It seems to be the weakest version of the IPA proscription possible, though. How many new businesses will qualify? The only people this could seriously benefit are the Darwin based bookies. And our Chinese friends with that fat lease on the Ord.

    Or those who relocate head office.

  9. Paul Norton
    August 16th, 2013 at 06:21 | #9

    The magpie geese will be pleased at the prospect of yet another free feed courtesy of southern taxpayers.

  10. TerjeP
    August 16th, 2013 at 06:25 | #10

    The ALP seems likely to lose. If so then who would become ALP leader? Surely the animosity and failure will preclude Rudd from staying in the job.

  11. crocodile
    August 16th, 2013 at 07:00 | #11

    TerjeP :The ALP seems likely to lose. If so then who would become ALP leader? Surely the animosity and failure will preclude Rudd from staying in the job.

    I made that point to our very good friends at another blog and was hounded as a troll laden with bad names and expletives. It’s a fair observation. Nobody really stands out.

  12. Ikonoclast
    August 16th, 2013 at 07:49 | #12

    I always regarded Tony Abbott as a joke who could never become Primer Minister. He’s still a joke but looks likely to become PM. Outer space help us.* I guess if the economy turns really bad under Abbott (and there is every chance) one will be able to derive a little Schadenfreude from his political ruination.

    Rudd isn’t much better. He is folksy and false in a totally cringe-worthy way. I don’t pine for Gillard. She was a betrayer and back-stabber who believed in nothing but her own advancement.

    One begins to wonder. Are there any statespersons now? No! Where there really any statesmen in the (sexist) past? I tend to believe not. It must be all myth. I doubt there was ever a statesman, just some who got lucky and got mythologised. Politicians seem to be all of one tawdry cloth.

    * Note: Since we now know that where the ancients envisioned heaven there is just the near vacuum of outer space, it seems sensible to update the saying. Calling on an inanimate, almost-nothing to help us seems to sum up our chances of either outside intervention or sensible action from within our political-economic setup.

  13. pablo
    August 16th, 2013 at 09:27 | #13

    Now that Abbott has determined that some 30 000 asylum seekers will only get bridging visas or TPV’s, he has a ready made ‘green army’ or perhaps grey army to offer enterprising employers who may want to combine his northern development plans in an economic zone.
    After all, if these ‘stateless’ predominantly male arrivals can’t go anywhere, they constitute a potential labour force for ‘nation building’ projects. Now even Rudd is thinking lower company tax rates and his PNG applicants will have plenty of tropical acclimatisation in the bag.
    You can almost visualise the accommodation dongas going down on the Ord for starters with an LNP win

  14. Ikonoclast
    August 16th, 2013 at 10:44 | #14

    @pablo

    Problem is our current economic policies are so wrong we can’t even employ 700,000 plus Australians currently and another 700,000 are under-employed or have exited the labour market in despair. Our current system is a mess and a failure. The first task of any government is to ensure full employment. Any government which cannot ensure full employment without excess inflation does not understand basic macroeconomics (where the nation has adequate physical resources).

  15. Ikonoclast
    August 16th, 2013 at 10:56 | #15

    To expand on my above comment, political discourse is now constructed so that certain workable solutions to our economic problems are ruled “out of court”, “beyond the pale” and “unthinkable” when indeed they do work and the empirical data supports them.

    Why is this so? The rich (capitalists) prefer to mantain a reserve army of the unemployed to discipline workers and keep an inequitable system running. The very rich can become richer (both relatively and absolutely) under this system whereas an alternative equitable system would create more wealth in total but less for the super rich. This is why the discourse is so biased to the current system. Those with the money dominate advertising, propaganda, messages and discourse just as Ernestine Gross pointed out.

    The first policy objective must be full employment and full capacity utilisation within a sustainable framework. This is still possible for Australia with the correct policies. It is no longer possible for nations like Egypt which are in overshoot and in collapse commencement right now.

  16. pablo
    August 16th, 2013 at 11:50 | #16

    Icon @ 14. My comments were largely ‘tongue in cheek’ but in keeping with your ‘reserve army of unemployed’ and what seem malevolent policies in an overheated asylum issue in the midst of an election campaign ie race to the bottom…is it unthinkable that a stateless labour force could not be coerced into some hair-brained northern development scheme? After all we are witness to ‘work for the dole’ schemes and other, worse, labour exploitations such as no pay interns/work experience and the misuse of ‘volunteers’. Mutual obligation could be the soft sell in compliance …do your time on the Ord and maybe that TPV can be re-visited.

  17. Jim
    August 16th, 2013 at 11:56 | #17

    Plainly dumb economics from Mr Rudd. Of course it has been known as dumb economics since Bruce Davidson wrote The Northern Myth in the mid 1960s. “A New Way” with pre 1965 thinking.

  18. crocodile
    August 16th, 2013 at 12:02 | #18

    Ikono @ 15. Under your full employment, full capacity utopia may I inquire what mechanisms you would employ to counter wage inflation.

  19. August 16th, 2013 at 12:12 | #19

    WRT full employment, I have a friend who works as a programmer for a major IT company. He says that he hasn’t had a pay rise in several years, and that his company is employing many Indians under 457 visas despite there being locally trained programmers looking for work.

    As for differences between ALP and coalition policy, I was amazed to see someone say that their “border protection” policies were substantially the same. The difference which seemed to escape this person were that the ALP is offering 3000 more humanitarian immigration places per year. Or does that not count because its got nothing to do with “stopping the boats”.

  20. Fran Barlow
    August 16th, 2013 at 12:45 | #20

    @John Brookes

    I was amazed to see someone say that their “border protection” policies were substantially the same. The difference which seemed to escape this person were that the ALP is offering 3000 more humanitarian immigration places per year.

    They are paradigmatically the same whatver the precise numbers in each plan. Both of them cast IMAs as a threat — hence the term “border protection” — and employ discourses starting from violation of “our sovereignty” and “our right to make our own immigration policy”. It’s almost as if Australia is being [email protected] by “a flood of boat people” who must therefore be turned away by the most coercive measures necessary.

    The latest Coalition response to the ALP’s Persona Non Grata ‘solution’ involves taking people who are on bridging visas (presumably including children taken out of detention), and sticking them back into detention. Again there’s now a squeak of difference, but the policy framework is identical. Which kinds of bruality will suffice to abate the threat from IMAs that we must affirm to secure the support of xenophobes?

    So yes, it’s all of a piece. I wish I could say that I was scandalised, but that would be wrong because I’ve been scandalised since at least Tampa. The two co-dependent parties are absolute filth on this matter, and have been since 2001.

  21. Jim Rose
    August 16th, 2013 at 15:08 | #21

    Is the northern territory the same place that would have been a big payer of the resource rent tax?

  22. Fran Barlow
    August 16th, 2013 at 16:33 | #22

    @Jim Rose

    Is the northern territory the same place that would have been a big payer of the resource rent tax?

    No. It would have been the mining companies in the NT. Nice try though …

  23. billie
    August 16th, 2013 at 17:11 | #23

    Rudd’s plan for northern Australia demonstrates that he hasn’t been a member of the Gillard government which rubbished Abbott’s plan in February. If a company operating in the Northern Territory will only pay 20% tax then I can see a great demand for post office boxes in Darwin.

    Oh well no need to worry about whether I should support Labor after the party dumped a very effective Prime Minister. I am quite happy to let my vote tell this gimp what I think of his race to the bottom.

  24. billie
    August 16th, 2013 at 17:14 | #24

    If I was in charge there would be an MMRT, no diesel fuel subsidy, effective carbon reduction and investment in renewable energy. I would save the car industry because it fosters technical jobs through the economy and I would tighten up on 457 visas – jobs for Australian IT graduates not Indian programmers

  25. TerjeP
    August 16th, 2013 at 17:54 | #25

    I’d be opening up immigration via more free immigration agreements along the lines of what we have with NZ. And a general tariff (flat fee) on immigrants from elsewhere, probably on the order of $20k to $40k. But I’d also limit welfare to citizens and make the qualifying period for citizenship something north of 15 years. So no voting, no welfare, and a fee to get in but otherwise knock your socks off.

  26. TerjeP
    August 16th, 2013 at 17:55 | #26

    p.s. I love the PM’s NT plan. But he forgot a bit of Australia.

  27. August 16th, 2013 at 18:18 | #27

    Parliament has declared its policy, and reinforced – if I may use the expression – the right of every civilized country to control the terms upon which foreigners shall enter it. We have, as an independent country, a perfect right to indicate whether an alien shall or shall not be admitted within these shores. …

    Attorney General, Robert Menzies – 14 November 1934.

    The Government, and especially the Attorney-General, have bungled the matter inexcusably, the Attorney-General sacrificing accuracy and a sense of responsibility to his insatiable hunger for notoriety and the applause of his press claqueurs.

    From the same debate, Frank Brennan.

  28. Tim Macknay
    August 16th, 2013 at 18:20 | #28

    @Jim Rose

    Is the northern territory the same place that would have been a big payer of the resource rent tax?

    No, since there’s bugger all iron ore and coal mining in the Northern Territory. Most of that tax is/will be coming out of WA (iron ore), Queensland and NSW (coal).

  29. Jim Rose
    August 17th, 2013 at 09:29 | #29

    Whatever happened to Rudd the great election campaigner? At the moment, he is a succession of thought bubbles. He needs notes to get through a debate.

    The proposed tax preferences for the NT has made Labor more unpopular in the now feeling rather left out WA were the WA Nats could win the 4th senate seat.

    Great campaigners stand for something and project vision and unity, not thought bubbles and a lack of depth and preparation.

  30. may
    August 17th, 2013 at 14:45 | #30

    phrase of the week?

    “thought bubble”

  31. rog
    August 17th, 2013 at 16:23 | #31

    @may It’s original.

    Rudd is disappointing in the way he is absorbing nutty LNP policy, possibly to take the wind out of their sails. In this LNP have form, they only recently promised to destroy the NBN, now they are claiming to make it cheaper and just as fast. And as for climate change, Malcolm has totally flipped on that one.

    So when it comes to vision LNP ‘thought bubbles’ are of the silent but deadly type.

  32. Hermit
    August 18th, 2013 at 13:59 | #32

    PM-in-waiting Abbott is apparently onto a winner with the 26 week paid parental leave scheme despite axing the schoolkids bonus. Not only can redundant climate scientists retrain as nannies but any levy to pay for the scheme can seamlessly replace the crippling carbon tax.

    Note both Abbott and Rudd are ‘Big Australia’ enthusiasts. I distinctly recall around the time of the first coup that Gillard was not. Perhaps the 0.7m unemployed Australians will find work as mentors for the increased population. It’s yet another reason to doubt that we will be burning less coal.

  33. Fran Barlow
    August 18th, 2013 at 19:24 | #33

    P M Lawrence, from last now closed thread:

    It seems to me that your objection — that my policy ‘institutionalizes’ parties — is specious. The parties are already institutionalized — for reasons that go way beyond the voting system. What we need first of all is to ensure that nobody/as few as possible are effectively disenfranchised. My system means that there are neither coerced nor wasted votes. Even someone wanting to vote for a far left or far right party or some independent gets a chance to be counted alongside all the other votes and hope for that candidate or party to win.

    That’s far better than we have now. Any well supported Indy has a show in my system as does any group of candidates that can threaten the 3% threshold nationally.

  34. August 18th, 2013 at 20:03 | #34

    Fran Barlow :
    P M Lawrence, from last now closed thread:
    It seems to me that your objection — that my policy ‘institutionalizes’ parties — is specious. The parties are already institutionalized — for reasons that go way beyond the voting system.

    That reading surprised me so much that I went and checked what I had written.

    You are switching from what I was trying to convey, which I think was fairly clear from the rest that followed, to the parties. Yes, the parties are institutionalised; that is, Labor, Liberal, Nationals, Greens, Democrats, and so on down even to One Nation and so forth.

    But that is not what the problem is. The problem isn’t that there are the institutionalised parties, those particular ones as such, but rather that the institutional structure effectively only allows approved forms of participation, so that only parties have salience (no “the”, i.e. generic). That institutionalises the party approach, which showed up in the very creation of One Nation. Had it not been for that institutionalising, there would probably have been Pauline Hanson running as an independent – and she wouldn’t have been saddled with all sorts of baggage brought in by entryists.

    The fact that those particular institutionalised parties already exist is not relevant, the fact that there is a sort of oligopoly by parties in general is – it’s a barrier to entry. And the wider system has institutionalised that; no “Mr. Smith goes to Washington” here.

    What we need first of all is to ensure that nobody/as few as possible are effectively disenfranchised. My system means that there are neither coerced nor wasted votes.

    Not unless you also get rid of compulsory voting and find a way for votes for an independent – just one candidate – to assist that one candidate. Not “wasting” a vote for A by switching it to helping B somewhere else, well, that is wasting it – by forcing voting into that sort of stylised channelling.

    Even someone wanting to vote for a far left or far right party or some independent gets a chance to be counted alongside all the other votes and hope for that candidate or party to win.
    That’s far better than we have now. Any well supported Indy has a show in my system as does any group of candidates that can threaten the 3% threshold nationally.

    No. For that, you would have to add further complications, effectively turning it into a list election at large. There is no realistic way to reconcile getting in independents with geographically spread support and also getting in candidates with concentrated local support. (And systems like yours often have anomalies that lead to lower representation when candidates’ support goes up, as the percentage changes can operate to change pole position for yet others, as it were – a bit like how poverty traps work.)

  35. August 18th, 2013 at 20:06 | #35

    Yet more moderation is delaying my reply to FB.

  36. Fran Barlow
    August 18th, 2013 at 23:04 | #36

    @P.M.Lawrence

    the institutional structure effectively only allows approved forms of participation, so that only parties have salience (no “the”, i.e. generic). That institutionalises the party approach, which showed up in the very creation of One Nation.

    Given that public policy generally has to have a degree of universality about it, having parties makes sense. Elsewhere, I’ve suggested a more radical solution (a hybrid between sortition for candidate selection and election and deliberative voting) plus direct democracy for setting overall goals. That would reduce the parties to thinbk tanks lobbying from the sidelines and ensure that proetty much everyone was not a career politician or party hack. doubt that the career politicians and party hacks would permit it.

    Back in the world we live in though, I said that what we needed first of all was to ensure that nobody/as few as possible are effectively disenfranchised and that my system meant that there were neither coerced nor wasted votes. You responded:

    Not unless you also get rid of compulsory voting and find a way for votes for an independent – just one candidate – to assist that one candidate. Not “wasting” a vote for A by switching it to helping B somewhere else, well, that is wasting it – by forcing voting into that sort of stylised channelling.

    I would get rid of coerced preferencing, certainly, but as noted in addition to people being able to send to parliament someone that shares their values, if not in their electorate, then another, they can also help elect their own member, if that electorate is not allocated. A strong Indy can win on primaries + preferences. We are used to the idea of parties and there is a value to having them — just not as much as their weight in parliament suggests. A great many people identify with the major parties, even if I don’t. A changed system might over time, change their view on this.

    There is no realistic way to reconcile getting in independents with geographically spread support and also getting in candidates with concentrated local support.

    Of course there is. There will, inevitably, be quite a few unallocated seats and the Indies can win them in the traditional way. Windsor, Oakeshott, Katter, and Wilkie would all have won in this system.

    There’s always the possibility of like-minded Indies forming their own party in any event.

  37. Jim Rose
    August 19th, 2013 at 18:17 | #37

    The parlmer party and the greens are swapping preferences! No principles.

    Then again killean won oh communist preferences in 1961

  38. Fran Barlow
    August 20th, 2013 at 16:42 | #38

    @Jim Rose

    The parlmer party (sic) and the greens are swapping preferences! No principles.

    {sigh} I troubled to check the preference ranking in QLD …

    Greens; Democrats; Sex Party; Labor; Palmer United Party; DLP; Family First; Katter’s Australian Party; LNP; One Nation; Australian Christians; Shooters & Fishers
    All Labor candidates will finish above the PUP. Green preferences will exhaust at that point. All the official rightwing parties follow after the ALP. Some LNP candidates will finish above some ALP candidates and they will get ALP and (most egregiously) Green preferences and of course all the rightwing preferences.

    I believe that preferences should be optional. If they were then I suspect The Greens would not direct them at all.

  39. Jim Rose
    August 20th, 2013 at 17:41 | #39

    @Fran Barlow do the greens direct preferences in nsw? There is optional preferential there

  40. Jim Rose
    August 21st, 2013 at 17:23 | #40

    Fran, The greens did not direct preferences in NSW, which under optional preferential voting delivered control of the upper house to the shooters and fishers and the christian democrats, apparently

  41. Fran Barlow
    August 21st, 2013 at 22:56 | #41

    @Jim Rose

    The greens did not direct preferences in NSW, which under optional preferential voting delivered control of the upper house to the shooters and fishers and the christian democrats, apparently

    What’s your point, if any?

  42. August 22nd, 2013 at 01:39 | #42

    @Jim Rose

    Proceeding on the assumption that you don’t already know how this works, I suggest you look into “Glenn Druery” – he was the champion who delivered the Shooters the NSW Upper House and was also working hand in glove with (supposedly ex-LNP) Greg Barns to lately destroy the Wikileaks Party by preferencing the ultra right above the Greens in an attempt – hopefully futile, but possibly yet successful – to deliver control of the Senate to the LNP via the election in WA of a Nationals at the expense of a Greens (Scott Ludlam).

    The Greens are not responsible for that.

  43. August 22nd, 2013 at 11:11 | #43

    Fran Barlow :
    @P.M.Lawrence

    the institutional structure effectively only allows approved forms of participation, so that only parties have salience (no “the”, i.e. generic). That institutionalises the party approach, which showed up in the very creation of One Nation.

    Given that public policy generally has to have a degree of universality about it, having parties makes sense.

    I think you’re missing my point. I have no objection to having parties; my objection is to requiring parties as the only effective means for people to express themselves. As, when, and if it made sense for people to set up parties, they should do so – but that would be emergent rather than an institutional requirement, and it would not obstruct people from expressing themselves in government in other ways as, when, and if that made sense. It’s Procrustean to lop off or stretch everything that isn’t a party, even if on occasion someone just happens to fit and isn’t hurt by it.

    Elsewhere, I’ve suggested a more radical solution (a hybrid between sortition for candidate selection and election and deliberative voting) plus direct democracy for setting overall goals. That would reduce the parties to thinbk tanks lobbying from the sidelines and ensure that proetty much everyone was not a career politician or party hack. doubt that the career politicians and party hacks would permit it.
    Back in the world we live in though, I said that what we needed first of all was to ensure that nobody/as few as possible are effectively disenfranchised and that my system meant that there were neither coerced nor wasted votes. You responded:

    Not unless you also get rid of compulsory voting and find a way for votes for an independent – just one candidate – to assist that one candidate. Not “wasting” a vote for A by switching it to helping B somewhere else, well, that is wasting it – by forcing voting into that sort of stylised channelling.

    I would get rid of coerced preferencing, certainly, but as noted in addition to people being able to send to parliament someone that shares their values, if not in their electorate, then another, they can also help elect their own member, if that electorate is not allocated. A strong Indy can win on primaries + preferences.

    Oh? And isn’t that a tautology of a no true Scotsman sort, that when the institutional structure bars entry it must be “showing” that there wasn’t any strong support? It is better to have a system that lets people through when they are supported than one that defines that they are supported only when they have a machine that puts together support from all over – which is pretty much what a party is.

    We are used to the idea of parties and there is a value to having them — just not as much as their weight in parliament suggests. A great many people identify with the major parties, even if I don’t. A changed system might over time, change their view on this.

    There is no realistic way to reconcile getting in independents with geographically spread support and also getting in candidates with concentrated local support.

    Of course there is. There will, inevitably, be quite a few unallocated seats and the Indies can win them in the traditional way. Windsor, Oakeshott, Katter, and Wilkie would all have won in this system.

    But the traditional way is just precisely working in, through or with party machines! I’m talking about independents et al getting in as, well, independents.

    There’s always the possibility of like-minded Indies forming their own party in any event.

    Yes! Yes! Yes! That’s what I’ve been bloody telling you! That perpetuates the problem! If they can get in by institutionalising themselves and they do so because that’s their only way rather than as an emergent response to a need that was not manufactured like that, they become other than what people can do without parties – and it takes away from non-instutionalised, disintermediated practical options. There shall be no religion without a priesthood, in this secular political worship.

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