You read it here first

Bob Carr has proposed

a new deal on federalism in the wake of the Howard Government’s big election win, offering to hand over responsibility for the health system to the Commonwealth.

In return, Bob Carr says, the Federal Government would give the states total control over schools and TAFE.

This is pretty close to what I’ve been arguing (along with Chris Sheil) for some time) though I tentatively suggested giving TAFE to the Feds.

I don’t suppose Carr gets his policy ideas from blogs, but perhaps there’s some indirect influence somewhere.

29 thoughts on “You read it here first

  1. I thought Tony Abbott thought of it first, the health part of it in any case.

    Anyway, I’m sure Carr would be delighted to hand over the health system to the Feds. Let them cop the blame for hospital waiting lists and patient deaths. Let them deal with the escalating cost of medical technology.

    Why wouldn’t Carr want to hand it over?

  2. John,
    You forgot to include this one in your boast. But as I complained then, (and Harry later):

    What is lacking in this piece… is any systematic discussion of the appropriate responsibilities of state and federal governments. Setting aside the constitution and historical revenue arrangements, what responsibilities should states have? If not health, then why school education or criminial

    The buck passing must stop, but the question is how to assign the repsonsibilities. Centralism creates bureaucracy and disempowers the people at the coal face. But it also saves on duplication, and promotes common standards. So we need to weigh the benefits and costs. On what basis do you stress the benefits in the case of health and the costs in the case of education?

    Of course there’s been plenty written about this sort of thing, by Cliff Walsh in particular, but I haven’t studied it.

  3. Ok… but does Bob Carr think there’s actually any chance it will happen? I doubt it.

    Maybe this is just a debating move. He’s saying that the Commonwealth should:

    1. Stop blaming the states for problems in the health system; or
    2. Use it’s dominance of both houses to fix the problem.

    Since 2 isn’t going to happen, all he’s really saying is “put up or shut up.”

  4. John,
    I gave you credit for this idea when it was raised yesterday.

    As a radio journalist put it this morning – why wouldn’t Carr want to hand over the yucky bit – especially since the cost shifting has been enormous via reduced levels of medicare whilst being able to retain the feel good items of helping the kiddies.

    Hard to see John Howard taking it over just the same – who wants to have responsibility?

  5. Bob Carr was on AM this morning too, but being a little more pragmatic:

    …I think we’ve got to live realistically with an overlap of responsibilities, with an untidy sharing of responsibilities, but the challenge is to fix up the system.

    But Carr’s first proposal, “you take health, and I’ll take schools” was a great opening gambit. It reminds me of the old joke, “Let’s share the banana. You have the outside, and I’ll have the inside.”

  6. Well it would appear that some really big picture stuff is on the policy table now. Carr is really throwing the rising cost of medicine in the too hard basket. There is no way Howard(or any other PM) will pick up this poisoned chalice without some serious horse trading with the states. One thing we do know from Carr’s stance is, he as a Labor man, must trust Howard not to dismantle Medicare, or else why would he offer him health on a platter? We can now put that lie to bed.

    Some recent big cost blowouts in health have been the PBS and radiology and pathology. These will have to be continually addressed, as will the crisis in medico and nurse supply. The big question on health will be -where’s the money coming from? I fully expect to see a massive shift of resources out of tertiary education(barring medicine) in response to this. The squeeze is about to begin for the professors of basket-weaving. As well we are going to have to address any non-essential(read life threatening) medical procedures such as IVF and the like. Also, with a declining unemployment rate, due to an aging population, we will now have to get tough on eligibility for disability and supporting parents pensions. We are going to need an all hands on deck approach to meet this challenge.

  7. The idea of making all of health the responsibility of one level of government has been around since John was a boy. Wooldridge tried to hand ageing to the States, but that failed apparently because Treasury/Finance were not prepared to fund it properly. Whitlam was very keen to take over the hospitals, but was talked out of it.
    Observa’s misguided but common question ‘where’s the money coming from’ is easily answered. We know that expenditure on entertainment will increase a large amount in the future, and we know where the money will come from – from our increased income. Health services are positive goods ie a higher proportion of income is allocated to them as income increases.
    And health expenditure hasn’t increased all that much anyway. From 8.2% of GDP 10 years ago to 9.5% in 2002-03. This is an increase of just 15% in the ratio.

  8. One problem with John’s proposal is that the feds don’t want TAFE.

    The states have screwed that educational sector up with their business model of education.

    TAFE has become a disaster zone.

    So the feds are going to fund a number of technical colleges directly, and keep the states out.

  9. John, I agree with James Farrell that there seems no logic in your proposal other than the desire (that Carr too has recognised) to avoid buck-passing. Why education in State hands and health in Commonwealth hands? What’s the reason?

    Competition between school systems in different states creates more benefits than competition between hospitals? Easier to manage a set of hospitals across the nation than a set of schools? Its not clear to me where the transaction cost benefits of centralisation versus decentralisation lie — a good question in agency theory.

    On another political judgement you keep repeating (again in this morning’s AFR) why is a complete sale of Telstra better than half in public hands? Again its a type of agency/control issue. Is it better for the government to retain half-ownership and introduce a social agenda into Telstra’s agenda or to privatise the whole thing and then regulate it on the basis of its social agenda? Doesn’t some element of residual control disappear with the regulation option.

    Oh, I know about the renationalisation option. And floating Telstra at a high enough price so that the public will tautologically benefit — but lets get serious, markets determine equity prices not governments. Why is the 100% float, to create a bigger gorilla, better than the 51% part-ownership approach?

  10. I’ve answered James’ and Harry’s question several times already I think. I start with the presumptions that
    (i) other things equal, decentralisation (which in Australia effectively means state-level provision) is best.
    (ii) each task should be handled by only one level of government

    In the case of health, the central role of Medicare and the PBS, which, I think, are inherently national, mean that this should be a Commonwealth responsibility. There is no corresponding argument in the case of schools.

    I’ll post on partial privatisation RSN

  11. JQ,

    I agree with your second presumption – duplication of tasks adds to inefficiency. But why is decentralisation necessarily a good thing?
    Why does Australia have different health, education, policing, transport (etc) systems in different states? How inefficient is that!
    Decentralisation is good when it comes to local issues (garbage collection, parks and gardens maintenance, ect) – which is why we have local councils.
    It’s never going to happen – but perhaps the best thing would be if we get rid of state governments altogether. We should assign the big tasks (policing, health, education etc) back to the Feds and pass on the local tasks back to better resourced local councils.

  12. In response to Howard’s revival of the Whitlamite idea of regional governments here that “If we started completely from scratch, we might have some different state boundaries, or perhaps an extra state in North Queensland, but with these modest qualifications, the Australian states are natural political units. I’ll try and do a longer post on this.”

    but I have yet to do the promised longer post. Where are time management tips when you need them ?

  13. Bob Carr should propose that both health and education are handed over to the federal system and in the meantime he should move there himself. He’s the only decent Labor politician in the country and he’s needed in Canberra to fix the debacle that is the current state of the opposition. A decent opposition is crucial, and clearly most of those who fought the last election aren’t up for the challenge.

    It would have been interesting to see the in-fighting and general chaos that would have occurred in forming government had the Labor party actually won, especially given that many of the loony left had defected to the scary Greens and of course they would have demanded their place at the teat ex-post!

    Of course, regarding education, the Left would never want to give up any of the stranglehold control they have over education, particularly high schools, as this is their best ground for their left-wing indoctrination. We see literacy and numeracy rates stagnating (probably going backwards actually) and the kids being pumped full of left-wing ideology on just about every issue instead of being pumped with the 3 Rs!

  14. Oddbod lives up to his name, and he needs to go back to school to get better informed.
    Bob Carr is a consummate politician, but as a Labor leader he has been a disaster. He talks one thing and does another (e.g. environment).
    Forget the talk and look at the results.
    His approach to the NSW bush, for example, has been ultra cynical, and probably cost seats for federal Labor.
    Carr’s reputation needs more critical attention.
    As for public schools, oddbod appears to have picked up the manufactured rightwing line from the ether about indocrination in public schools and neglect of the three Rs.
    The disdain for secondary teachers, who are generally committed professionals doing a demanding job and working under trying conditions, is a national disgrace.

  15. John, Bob Carr put me onto your internet blogosheric news site. It is really impressive and I must say I am excited by the internet and the opportunities it provides for all Australians.

    Bob said you had been able to help him with some problems and I wonder if you might consider some issues currently confronting the office of the Prime Minister. In the recent election I made a number of expensive promises. Well, perhaps not expensive. Perhaps rash is how we should describe them. I and my team are currently looking for advice on this matter.

    Any assistance you could provide would be highly valued.

    Via Tony Healy

  16. Maybe Evan Jones should ask his first year econ students what they were actually taught at high school. When I ask my students about their high school economics curriculum they tell me it was all about trade unions, anti-globalisation and 1950s style fiscal policy issues. So it takes a year to retrain them and then they can start some sensible economic analysis in 2nd year. And let’s face it, a major study by the economic society last year suggests that standards are going backwards and much of this stems from the input to the tertiary system as well as the drains on that system itself. Have you set your students essays recently Evan? Or empirical work? Have you taught overseas and seen the difference in standards?

    And Yes, teachers have a harder and harder task in front of them especially since they are now pseudo-social workers as well as educators, and of course they operate with continually diminished resources. They also have to fight against the general anti-academic attitudes still pervasive in this country (and the rampant anit-intellectualism pervasive in the public service). I don’t see how that excuses the lack of a balanced training that focuses on fundamentals.

  17. Oddbod, while on the subject of “empirical work”, what is the evidence supporting your claim of “literacy and numeracy rates stagnating (probably going backwards actually)”?

  18. Uncle Milton :

    Statistics Canada and the OECD were producing the Adult Literacy Survey and that included Australia over several sample periods. (Try and type in ‘Adult Literacy Survey’ into the search engine). Some of the summary reports may have come out through the OECD though. I believe the most recent numbers were something like 27% of Australians were functionally illiterate on the Prose, Document and Quantitative skills levels, or that came down to around 17% if one took a more conservative view i.e.only included their level 1 rating instead of both level 1 and level 2 rating (out of 5) as they suggest. From memory these numbers hadn’t changed much over the previous couple of surveys.

  19. So Oddbod is a tertiary economics teacher! And he talks about standards? Heaven help us (we all have to defer to the God Squad these days).
    If you tried to translate tertiary academic economics for the secondary syllabus you would have zero people signing up. and that would probably be a very good thing.
    Academic economics is the great intellectual scandal of the twentieth century. The disdain for the most basic principles of intellectual integrity is pervasive. Ruthless a priorism plus base empiricism makes for a garbled mess. A vacuum into which crass ideology readily flows. WHich is why we have central bureaucratic agencies their associated think tanks full of dogmatic dundheads.
    What we need in the universities is an application of the principles outlined in Mancur Olson’s (much revered) The Rise and Decline of Nations.
    Apply the scorched earth torch to the lot and start again from scratch. Just like all the social engineering of the right going on at the moment under the rubric of ‘national competition policy’, etc. etc.
    As I said Oddbod, back to school for you.

  20. Trying to burn the house down from within eh Evan?

    You sound like a sad radical who can only hark back to ‘better days’ and feels that, if only they were put in charge of things then everything would be fine because they are smarter than everyone else, an all-knowing being who, without doing any internally and externally consistent analysis, i.e. the hard yards, just knows what’s right and how things should work.

    Sounds to me like you don’t understand modern economics and are afraid of it. The disdain isn’t for intellectual integrity mate, it’s for moralising interventionists who do so based on ad hocery and a sense of superiority.

    Maybe it’s back to school for me (at least a sabbatical at one of the very good universities I was trained at overseas, to do a bit of wider reading and write a few more journal articles), but I think it’s time you retired Evan Jones.

  21. It’s a good story that we spend more on gambling than food.

    But it’s not true.

    We spend about $50 billion per year on food, and about $15 billion per year on gambling.

  22. Milton, can you by any chance tell me whether ‘spending on gambling’ refers to total bets or to net losses? The latter, presumably, would be a better measure if we are comparing with other forms of consumption.

  23. John: While I think of it, could you please revert to the practice of giving your posts titles that refer to their contents. The ‘recently commented’ links are useless if are all ‘You read it here first’ I, II, III, ‘Read the whole thing’ I, II, III’ etc.

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