How about good public policy?
Politics must have returned after the holiday slumber, because Crikey’s back. 2005 was of course the year that Howard achieved some long sought after goals. Or so goes the consensus of the commentariat, right and left(ish). Is this, as the commentariat again claimed in unison (could some of these pundits get their line from government spin perhaps? Perish the thought!), the year of consolidation and “bedding down” unpopular measures? Or is there a brave new world of stirring public policy waiting to greet us over the course of the new year?
Crikey observes that Costello’s recent comments on tax are probably driven more by political considerations (and in particular maintaining his position as against Malcolm Turnbull) than good policy. The last thing we need is more complexity in the tax system, driven by a desire to give something to middle-income families without cutting income tax generally so as to benefit the top brackets as well. Despite claims that the Income Tax Act will be simplified, the dogs breakfast of policy would become more of a long doggy lunch if further complexity were to be introduced via the tax or welfare systems. The motivations of the BCA in calling for a simplification of regulation might be related to costs to business, but it’s well worth calling for it from the perspective of good social policy as well. Another example of the perversity of the current arrangements with tax and welfare is the enormous traps faced by those seeking to move off welfare in effective marginal rates. As usual with the Liberals, contradictory policies are never reconciled (in this case punitive welfare sticks and the desire to encourage work, cut across by the balls up that is the income tax scales) as different Ministers maneouvre for headlines and political advantage and bureaucrats and agencies are left to make the best of bad legislation and regulation. The ostensible liberals of this country, as I remarked in an earlier post, never seem to have met a regulatory proposal they didn’t instantly fall in love with, and what’s worse is the lack of any sensible appreciation of the cross cutting impacts of their big-government conservatism.
There’s an interesting debate going on an open thread at John Quiggin’s place about welfare. Thinking of this, I was struck by the Crikey piece by Henry Thornton, who fleshes his argument out with some numbers here.
“Australia’s labour market outcomes have improved in recent years but much more might be achieved.” This is the summary judgment of one of Australia’s best economists, Director of the Melbourne Institute, Professor John Freebairn.Freebairn continues: “Over the past decade, employment rose and unemployment fell, and both labour productivity and real wages increased. Also, the labour market has arguably become more flexible and capable of responding to change. Yet labour-force participation is low by international comparison, the headline unemployment rate misses the underemployed and disguised unemployed, and Australian labour productivity and real wages remain some distance below world best practice.”
This article appeared in the Weekend AFR. It is a good summary of a lot of accumulated research and good judgment. Freebairn has told Henry that he believes the real rate of unemployment – allowing for early unwelcome retirement, people on disability pensions who could work, people working less than they’d like – is nearer 15% of the potential workforce rather than the 5% officially recognised.
Serious reform to Australia’s tax and welfare system is the area where “much more might be achieved.” Anyone for a powerful new year’s resolution?
Let’s hope that the Liberals are reading, and that good policy on an issue where almost everyone is agreed might be something to take away from the 2006 political year, instead of electorally driven policy increasingly complicated by maneouvring for post-Howard political advantage. It’s always good to start off the new year in an optimistic frame of mind.
There’s going to be no such thing as post-Howard political advantage in the near future. Costello’s going to have to dynamite the little fucker out of there.
Mark - Though wouldn’t you prefer the current shambles to a coherent, consistent ‘neo-liberal’ agenda? As you suggest, the Howard government is leaving the infrastructure of big government enhanced, which will suit an incoming social democratic government.
I don’t Andrew.
After Keating ,
Howard had the perfect opportunity to prove those of us who held him in low esteem philosophically wrong.
Unfortunately he proved us correct.
John Stone will never write about this but he said the very thing at the press club when in fine drinking form as Treasury Secretary.
Even more significant, I think, is that Howard has explicity accepted the demand for publicly funded services. As Naomi says, the problems with the specific implementation, such as the propping up of private health insurance provide room for cuts to fund new stuff.
Yes, I remain convinced that the private health subsidy is one of the worst, most inefficient and wasteful pieces of social policy ever witnessed in the country. The subsidy was just one big excuse to bump up premiums: you can almost hear the tax dollars gurgling pointlessly down the toilet.
I noted with glee the the UK Tories have compeltely dumped the same idea as a proposal, citing its certain deleteroius effect on the National Health Service.
both comments merely strengthens Andrew’s comments.
social Democrats should be running around in glee because of Howard.
They have won and the small government lobby have lost spectacularly!
Andrew, I’m probably one of the more small government social democrats! But I generally agree with what Naomi and John have said. Labor can still reduce the size of government and be more fiscally responsible than the Libs, and the Libs will find it hard to run their “big spender/where’s the money coming from?” line. In addition, it would be possible to placate groups to whom specific benefits or tax rebates are targetted by demonstrating that simplifying both tax and welfare and universalising social provision benefit everyone at a lower cost. At least I hope so!