There’s been a bit of press coverage this morning, and no doubt it’s a worthy thing to stimulate debate by proposing substantive policy measures rather than just advancing critique. It may be an even worthier thing to shift the terms of the debate, regardless of the merits of the proposed policy directions. We don’t see enough of this sort of initiative.

But I do wonder if the economists stop and think about the political feasibibility of their proposals.

The Rudd government does appear to have developed more backbone in holding or advancing a policy line in the face of attack. One good example was the risible attempt to talk a “Khevlani affair” out of nowhere, which probably got lost in the Julie Bishop noise (her one original contribution apparently being to think it very clever to argue that there’s a “whiff of Whitlam” about the Rudd government.) Trying to articulate together a bit of dog-whistling about the Middle East and memories of State Banks and the Whitlam era with the deficit/debt line was always a complex message and rather dumb politically at that, and I suspect that the Liberals are trying to persuade themselves of the Whitlam comparison in the hope that the Rudd government will be short lived (apparently forgetting Gough was re-elected to a second term.) What was really at issue was a technical (and rather neat) solution to a problem state governments have with bonds in accessing debt. Wayne Swan may have been reading the Fin Review last weekend and noticed unnamed bankers and execs bemoaning the fact that he worried about what Malcolm Turnbull said at all, as “no one else did”, but in any case, he made it clear that if he decided an infrastructure bank was a good idea, he wouldn’t be deterred by the opposition’s politicking.

Now, no doubt one could have all sorts of fun thinking up possible opposition attacks on the proposals of the eight economists, but that’s not the only political point here. They also have to pass muster through the gate of the government’s own political imperatives. While super is in the policy review mix, it would be a difficult sell to cut super – even temporarily and with the promise of more cash in hand from wages. Super, after all, is one of the pressure points – along with household wealth – where the global financial crisis really does have an immediate impact on voters’ psyches. And the temporary nature of the proposal is also problematic – I can hear employer associations screaming already that they’d have to maintain wages at the higher level employees had enjoyed and pay more in super when contributions rose. “Here, have some more money to spend for a while, but then we’ll force you back into saving it” – not the easiest of inducements, I’d have thought.

I’m refraining from comment on the merits of the proposals themselves – except to observe that I think some sort of independent fiscal policy is a fundamentally anti-democratic idea. And I’d also suggest that technocratic worthies have hardly distinguished themselves over the last little while – whether here, in America or elsewhere. But, again, this is just not the sort of thing any government is going to do.

It may well be that the economists in question think it’s better to advance such ideas in their policy purity before the game of sifting and compromise starts being played, but conversely, whether or not that game even begins is surely dependent on the initial political appeal and defensibility of such ideas.

Elsewhere: Joshua Gans and Catallaxy.

The discussion paper emphasises the fact that 77% of Australians over 65 rely to greater or lesser degree on income support. It also highlights the fact that on current projections, the percentage of the population over 65 will rise from 13% now to 25% by 2047. Few aged pensioners currently supplement their income with paid work, but that can be expected to increase, and there may also be debates about the age cut-in as the labour supply situation alters and health outcomes improve. Because the income support system costs 6.8% of GDP, its sustainability is very relevant, and increases are also very expensive because of the very large number of recipients. The paper also considers those on Disability Support and Carer pensions, where the issues are different for many – with fewer having substantial assets and more receiving some income from paid work.

While the Labor Party has indicated – both in policy and in post-election statements – that increases to pension levels are planned, and it’s an objective I support, I don’t think a particularly responsible attitude towards policy reviews is to effectively ignore them and call for immediate action without actually identifying either where the money comes from or responsing to the policy issues raised is awfully helpful to anyone. For a start, it won’t happen, so it’s effectively political posturing. Secondly, the government faces some degree of political risk any time it does start a relatively open ended policy process. It’s designed to deliver better outcomes, but I’m sure that it’s not universally popular within the Labor Party precisely because it seems – on the evidence so far – to lead more to political flak than to genuine consultation. Enjoy it while it lasts, would be my advice.