Month: February 2008

Anybody who remembers that photograph of Peter Costello gleefully surrounded by newborn infants knows one thing: it isn’t only aspiring parents who can go a bit baby crazy. Few areas are as familiar with poorly designed government policy as childhood and parenthood.

So when the Federal Government this week announced an inquiry into the possibility of paid parental leave, it was tough to remain optimistic. You need only to look at the baby bonus to see that the black hole of bad policy is deep. Costly, blunt and poorly designed policy instruments have just as many unintended negative consequences as benefits.

The exact details of Labor’s parental leave scheme won’t be known until after the inquiry reports back next year, but most proposals for paid parental leave would require the Government to pay a nominated parent roughly the minimum wage for a dozen or so weeks.

Certainly, this is far better than simply requiring businesses to pay the cost of the leave out of their own pockets. The biggest risk that government-mandated workplace entitlements pose is that they make it more costly to hire workers – and the unintended consequence is that employers are reluctant to hire in the first place.

Nevertheless, for a government that proclaims itself eager to cut spending, the addition of what will probably be at least a half-billion dollar expenditure into the federal budget is not going to help the Labor Party nurture a small government image.

Paid parental leave could also break a fundamental principle of good welfare policy – the most effective policies are means-tested policies. There is no good reason for taxpayers to give the $5000 baby bonus to a family that is already comfortable enough to look after its newborn. At least the issue of parental leave has been referred to the Productivity Commission – the government’s independent research department that can claim much of the credit for advancing the cause of economic reform since its inception. This contrasts with the worrying reluctance of Labor to trust the commission with anything else important.

Inquiries into climate change, car manufacturing and international trade have all been established separately – Kevin Rudd may not trust the government’s experts to give him the answers he wants.

But the biggest problem with a paid parental leave scheme is how it encourages the redefinition of our relationship with government. The baby bonus has already established in the mind of Australians that having children is more than just a personal decision – it is part of a long-running negotiation between parents, the Federal Government and the tax office. The former Liberal government shamelessly encouraged this idea, but if what appears to be the instinct of Kevin Rudd and Julia Gillard is followed through, soon no one will start a family without lengthy consultations with the Australian Taxation Office and Prime Minister’s Department.

Of course, from the Government’s perspective, this is a perfectly rational approach. All those newborns that surrounded Peter Costello are future taxpayers. And business lobbyists keep urging the government to do something about the skills shortage and ageing workforce. So the government wants us to breed.

But the people whose decision could be influenced if they are given a few grand by the government may not actually be the best parents.

And the problems of ageing populations and skills shortages don’t have to be resolved by funnelling subsidies to young families. It would instead be better for children if individuals were allowed to come to their own decisions about parenthood uninfluenced by politicians desperate to pay their way out of the latest political crisis.

Perhaps if the government really thinks that we have a population problem, it could be looking carefully at increasing immigration – skilled and non-skilled – and relaxing the high costs of work visas.

Nevertheless, introducing subsidies to new parents conveniently supports Rudd’s working families narrative. It’s politically savvy to pay off your supporters.

The fundamental question that the Labor Government’s proposal for parental leave raises is whether parents should have children for themselves, or for society. But that answer is fairly clear. After all, what parent spends time thinking about how starting a family could help Australia’s OECD rankings? Hopefully none.

There is a strange fantasy held by many serious people in politics that if you get enough experts in a room, some sort of magical consensus will emerge and everything will be wonderful.

But suppose we could get a consensus about the future of this country. Would that even be good?

This fantasy appears to be the idea behind the 2020 summit that Kevin Rudd announced last week. For two days, 1000 of Australia’s best, and best-connected, individuals will convene in Canberra to nut out some solutions to our social and economic problems.

Given that it is unlikely the Rudd Government will adopt any of the summit’s proposals – at least, none they weren’t already familiar with – the 2020 talkfest is unlikely to do too much harm.

No doubt the proposals from 2020 will be as pedestrian as those produced by the half-dozen “future-oriented” conferences around the country each year. That is, we should do more on climate change, spend more on education, infrastructure and innovation, engage more with Asia, the republic is the most important issue facing Australia today, children are our future, and on and on and on.

The Government will surely be familiar with these ideas – many of them formed Labor’s campaign platform. So if the only big idea behind Rudd’s education revolution was to set up an education committee at a gigantic conference, it’s hard to avoid wondering why we bother having revolutions at all.

After all, what great idea ever came from a committee? Committees usually end up choosing the worst idea that at least two people agree on. It was a committee that chose the hideous London Olympics logo, which looks like Lisa Simpson doing something she shouldn’t.

The old adage that “a camel is a horse designed by committee” will be doubly true for public policy designed by a committee that consists of 1000 “leaders” – hardly the sort of people who are known as team players.

Nevertheless, at the end of two days, the 2020 summit will have bought off Australia’s public intellectual class. There is nothing more flattering for a self-styled opinion maker than to be approached by the federal government for ideas. With an invite list of 1000, this summit is flattery on an industrial scale.

There is a serious point to be made about the 2020 summit, and it doesn’t bode well for future policy. The summit appears to make good on one of Labor’s key election promises: a new style of consensus-based politics. Under Kevin Rudd, the party said, the states and the Commonwealth would work together and businesses and governments would work together. Even Labor’s factions might tone down their mutual hatred and start going to the same parties.

It would be easy to run a country on consensus if everybody shared the same views. But not only do people disagree on means, they also disagree on ends. For some, the aim of public policy should be liberty and the maximisation of personal choice; for others, economic and social equality. With such disparate and often strongly held views, the idea that we can all eventually agree is a fiction. But the problem with the 2020 summit is more than the impossibility of getting everybody into a group hug. The dirty secret of Australian politics is that conflict makes good government.

For instance, state and federal governments aren’t supposed to co-operate. The idea behind Federation was that the states would compete to develop the best public policy and that the Commonwealth would do the things that the states didn’t. If they start working closely together, as Rudd has assured us will now happen, it will only further erode our critically weakened federal system. We may not actually want to “end the blame game”.

Similarly, trying to get business and government working together is fraught with difficulty. Usually, the only things business want from government are money or protection from competitors. The only thing governments want from business is help achieving political goals.

And when the government works with the “community”, it inevitably ends up consulting special-interest groups who harbour ideological views not shared by the community as a whole. It is us, as citizens and consumers, who get the raw deal.

The 2020 summit is more than just a happy-clappy approach to governing. Rudd has to be careful that his eagerness to build “consensus” doesn’t leave the Government open to interest groups and poor policy.