I have a piece up at the Drum, looking at how the three-word slogan approach of the Abbott government helps to explain their budget problems. Text is over the fold
Category: Oz Politics
Big Tobacco: A threat to Australian democracy
The news that the tobacco industry is seeking to abuse Freedom of Information legislation to gain access to surveys of Australian teenage attitudes to smoking confirms what has been obvious for a long time. The tobacco industry is a threat to democracy. Among its many hostile actions
* Misusing ISDS and other provisions of trade treaties to undermine domestic health policy
* Debasing public debate through the use of scientists for hire, fraudulent lobby groups and thinktanks, vexatious litigation and other tactics. In the use, these actions have led to criminal racketeering. The denialist apparatus set up by the tobacco industry was taken over by the fossil fuel lobby to promote global warming denialism
* Large scale purchasing of politicians and political parties
The big question is, what should be done about this? We need to consider a comprehensive approach to drug policy, which would also take account of the failure of the War on Drugs, and provide a model for legalisation of currently illegal drugs. That rules out prohibition of tobacco, but would leave no role for corporate pushers.
Even if we don’t get there immediately, it’s highly desirable to start the discussion. Big Tobacco and its friends should be warned there is something to lose from attacking democratic government.
Polls and punters, yet again
I just read this piece on The Drum, taking the line that it’s better to rely on the betting markets, which have Labor and the government level-pegging, than on the polls, which have had Labor well ahead for a long time. Elections are only held every few years, so they don’t provide much data on which to test the relative performance of the two. But, if markets give better estimates than polls, we should expect to see movements in the poll results follow those in the market rather than vice versa (in econometrics, this is called Granger causality). Digging around, I located a study finding that, if anything, movements in polls Granger cause movements in betting markets.
Since a compelling observation beats an econometric analysis for most people, let’s look at the 18 months or so since I last posted on this topic. Labor started out with a small lead in the polls and stayed consistently in front, with the lead varying over time. Meanwhile, the betting markets favored the government until very recently, before moving to even money. It seems clear in this case, that the markets are following the polls and not vice versa.
How our Senate (and not the US Senate) blocked the TPP
Following the breakdown of talks on the Trans Pacific Partnership last week, I did a quick reaction piece for Inside Story, making the point that our much-maligned Senate was the most important source of resistance to the demands for yet more protection for US pharmaceuticals, demands that make a mockery of both the claim that the TPP is a “free trade agreement” and the “diffusion of knowledge” rationale for the patent system.
The socialist objective
There’s a push within the ALP to remove the party’s long-standing socialist objective, which states
The Australian Labor Party is a democratic socialist party and has the objective of the democratic socialisation of industry, production, distribution and exchange, to the extent necessary to eliminate exploitation and other anti-social features in these fields.
Then follows a long list of commitments, notably including
(i) the restoration and maintenance of full employment;
(j) the abolition of poverty, and the achievement of greater equality in the distribution of income, wealth and opportunity; and
(k) social justice and equality for individuals, the family and all social units, and the elimination of exploitation in the home
I’m ambivalent about this, both as as regards substance and timing. When I started this blog, I made the decision to describe myself as a social democrat rather than a democratic socialist. In 2006, I gave the following explanation, in a comment
I prefer “social democratic” because it clearly refers to the set of policies implemented and advocated by social democrats in the second half of the 20th century, including a mixed economy, an active welfare state, government responsibility for full employment and so on.
By contrast, socialism is less well defined. It can mean comprehensive public ownership, which I don’t support, or it can be just a general statement of values and aspirations, consistent with social democracy.
So, if the change was simply to replace “democratic socialist” with “social democratic”, and to give a description of goals consistent with that, I’d have no problem. But let’s look at the text proposed by NSW Labor Leader Luke Foley[1]
The Australian Labor Party has as its objective the achievement of a just and equitable society where every person has the opportunity to realise their potential.
“We believe in an active role for government, and the operation of competitive markets, in order to create opportunities for all Australians, so that every person will have the freedom to pursue their wellbeing, in co-operation with their fellow citizens, free from exploitation and discrimination”.
Foley’s further comments make no reference to full employment, equality, poverty or any other social democratic concerns. He goes on to say
We understand that competitive markets are best placed to deliver the economic growth that the people we represent rely on.
We also know that regulation and redistribution are necessary to correct market failures, to ensure dignity and opportunity for all Australians.
Is there anything here that Tony Abbott, or even Joe Hockey, could disagree with?
Sea change
Maybe it’s my chronic over-optimism, but it seems to me as if there has been a sudden change in the long-sputtering debate about taxation in Australia. Until a few weeks ago, “tax reform” was, as it had long been, code a “tax mix switch” which in turn was code for “tax food and use the proceeds to cut the company tax rate or the top marginal rate of taxation”. Joe Hockey was still pushing the second part of this package only a week ago.
But the reports coming out of the recent COAG summit seemed to convey a general acceptance that more tax revenue is needed to fund health expenditure in particular. The two top options were an increase in the rate of GST or an increase in the Medicare levy, with little mention of “base broadening” (more code for taxing food).
Meanwhile, Labor has been talking about a Buffett tax, that is, a minimum rate of tax levied on gross incomes, regardless of deductions. And, while the LNP still assumes that it can win by running against a “carbon tax”, that belief seems to have come unmoored from any general theoretical viewpoint. How can Abbott run against a “great big new tax on everything”, if he is happy to discuss a 50 per cent increase in our existing “great big tax on everything”, the GST?
I’m not clear what has happened to bring this about, or whether I’m misreading the signals. But it certainly looks to me as if the great political taboo against even mentioning higher taxes has been broken.
Nuclear power in Australia
I’ve decided to make a submission to the South Australian Royal Commission into the nuclear fuel cycle. I can’t actually submit until I find a JP or similar to witness it. This is a minor inconvenience for me, but may be a big problem for plenty of interested groups (for example, indigenous people). On the upside, I have time to ask for comments, and maybe make changes in response. This thread will be open to discussion of any issues related to nuclear power. However, in the event of lengthy two-person debates emerging, I’d ask the parties to move to the sandpits and leave room for everyone else.
Profit and public health
Amid the abandonment of tariff protection and the continued assaults on trade unionism, one union/lobby group has been consistently victorious. The Pharmacy Guild has managed to restrict competition so successfully that it’s impossible to open a pharmacy if it might hurt the profitability of an existing business, even if that business is failing to serve a significant group of customers. I ran into an example when I was at James Cook University in Townsville. A request for an on-campus pharmacy was rejected because it was within the market area claimed by a suburban pharmacy, more than a kilometre away and inaccessible by public transport.
Far more important to the Guild is the imperative of keeping supermarkets out of the pharmacy business. The key argument is that supermarkets are just businesses, happy to sell anything to make a buck, whether it’s cigarettes or cancer medications.
So, I was interested to read the Guild’s reaction to a proposal that medical professionals should stop prescribing homeopathic products. Whatever you might think about alternative/complementary medicines in general, homoepathy is plain quackery, combining a magical theory of medicine with the preposterous physics of water memory. Unsurprisingly, research has proved beyond any doubt that it’s no better than a placebo. So, the Royal Australian College of General Practitioners (RACGP) has formally recommended GPs stop prescribing homeopathic remedies and says pharmacists must also stop stocking such products.
The Guild’s reaction:
it is not a regulatory authority, and as such there will be no recommendation backing RACGP’s call for homeopathic products to be taken off the market.
In other words, selling medicine in the same shop as alcohol is unthinkable, but it’s entirely OK for a health professional to promote and sell water as a treatment for serious illness.
This episode demonstrates, to anyone who cares to look, that the Pharmacy Guild is (and in fact claims to be) nothing more than a rent-seeking lobby group, whose sole concern is the profitability of its members. As the Tobacco Institute of Australia would be quick to point out (if it were still around), there’s nothing illegal about that. But when profits and public health come into conflict, the Guild and the Institute are on the same side.
Going early ?
According to the usually well-informed Laurie Oakes, the Abbott government is seriously considering the prospect of a double dissolution election, following the impending Budget. This makes no sense to me, not that this should mean it is unlikely to happen.
To recap, talk of a double dissolution emerged last year, in the wake of the Senate’s blocking of unpopular Budget measures. Facing bad polls, the government abandoned the double dissolution idea, then dumped most of the measures. The new budget is supposed to be pain-free and popular. But, if so, what is the need for a double dissolution to get it through
The obvious inference is that, once returned with a more compliant Senate, the government will return to its true agenda. How can this argument be refuted, given that the same agenda was explicitly repudiated before the 2013 election, only to emerge immediately thereafter?
Then there’s the question of a trigger/pretext. The only current trigger, I believe, is the bill to abolish the Clean Energy Finance Corporation. This is hardly a popular cause on which to fight an election, but more so than university deregulation, mentioned by Oakes as a possible second trigger.
Insiders generally assume that the trigger is a mere formality, of no electoral significance. But these are the same insiders who assured us back in 2010 that the Prime Ministership is in the gift of the relevant Parliamentary Party and that voters should not presume to be upset by an unexpected change. Given that it is nearly 30 years since the last double dissolution, I imagine many voters will want to know what is going on, and may have the temerity to take the constitution seriously.
Insiders are also easily impressed by a well-timed early election. Experience suggests that voters are not so impressed, and are likely to punish a government that goes early for no good reason. The most recent example was Campbell Newman in Queensland. He might perhaps have lost anyway, but he certainly didn’t benefit from running a campaign during the school holidays, despite his much-touted cleverness in “catching Labor by surprise”. Similarly, Kevin Rudd went early, when he would have done better (IMO) to take some time pointing out the weakness of Abbott’s position. And back in 1984, Bob Hawke went early to take advantage of his massive popularity, but still ended up with an adverse swing.
That’s my take, but perhaps the insiders know better.
Goodbye to CPD
Like Mark Bahnisch, Eva Cox and a number of others, I’ve resigned as a Fellow of the Centre for Policy Development. It’s a sad day, since CPD has done a lot of great work, and I’ve enjoyed being involved in it. But the leadership of the Centre has taken a decision to move to the right in the hope of being more relevant to the policy process. The most recent outcome has been a paper on tax policy that broadly accepts the Treasury view of the issue, and pushes for a broadening of the GST base, which means taxation of fresh food. This isn’t a new or innovative idea. Rather, it has been part of rightwing orthodoxy for decades. CPDs endorsement allows its advocates to claim some “left” support. That claim obviously gained credibility from having Fellows like Mark, Eva and me. So, we had no alternative but to resign.
I should clarify that, apart from a nice title and a publishing outlet, I wasn’t getting any direct benefit from being part of CPD. So, I’m making a statement rather than a sacrifice.
John Quiggin 