Articles – Page 28

The GFC Debate We Never Had

Almost as soon as the initial trauma was over, the Australian political class repressed its memories of the Global Financial Crisis.

It has been four and a half years since the Rudd government announced its flagship $42 billion Nation Building and Jobs Plan, in February 2009.

This was a big deal at the time. Kevin Rudd declared neoliberalism over. Keynesian stimulus spending was back.

But within 18 months, the two men that had fought the political contest over this extraordinary stimulus package, Kevin Rudd and Malcolm Turnbull, had been dumped by their respective parties.

Others followed. Lindsay Tanner, easily the most economically credible leader in the Labor government, left politics. Another key figure, Treasury secretary Ken Henry, retired the following March.

The survivors of Labor’s kitchen cabinet, Wayne Swan and Julia Gillard, stopped talking about the crisis. They made a few vague and defensive claims about having saved the country, but the Rudd years were apparently too painful to go into detail. Tony Abbott did not ask them to elaborate.

So little is remembered about the Australian response to the GFC other than a couple of iconic phrases. Pink Batts. School halls. Labor debt.

Flicking through the best book published on the episode – Shitstorm, by Lenore Taylor and David Uren – is like entering a lost world. Who now recalls the panicked ban on short selling, imposed just a few days after the collapse of Lehman Brothers? Or the sudden prominence of a usually obscure regulator, the Australian Prudential Regulatory Authority? Or Australia’s attempt to make the G20 the centre of international economic diplomacy?

The return of Kevin Rudd is the return of the spectre of the Global Financial Crisis.

In his first press conference on Friday, Rudd recounted the moment in September 2008 when it looked as if the American Insurance Group was about to collapse. He called George Bush to lobby for the firm to be bailed out.

It was conspicuous anecdote, and a deliberate one.

Then Rudd challenged Abbott to a debate on debt and deficits. That is, the debt and deficits incurred because of his government’s massive stimulus spend nearly five years ago.

His new team has suggested the election is likely to be delayed until after the G20 meeting Russia in early September. Not only is this very same G20 that Rudd extolled in 2008, but he cheekily asked Abbott to accompany him to Saint Petersburg.

On Thursday in Parliament, Pink Batts and school halls were the Coalition’s first lines of attack against the reinstalled prime minister. They were used as they have been over the last few years: placeholders for the ideas of waste and incompetence. But Pink Batts may not be as compelling in Saint Petersburg as they have been on Sunrise.

During the Gillard years, conservatives and free marketeers were lulled into a belief they won the debate over Keynesian stimulus. The insulation program was a small part of the total package, but, since it was implicated in the deaths of four people, has come to define it. And Swan’s inability to get the budget out of deficit has been a massive political liability.

Yet two facts remain. First, the government said it was spending a lot of money to stop the economy going into recession. Second, the economy didn’t go into recession.

Whether one led to the other is moot. Most people believe they did.

In late 2011 an Essential Poll asked who should lead Australia if there was another global financial crisis. Kevin Rudd topped the list at 24 per cent.

Another poll suggested half of respondents believed the way to protect jobs in a crisis was increased government spending. (Nearly a third said they didn’t know. This is definitely the most honest answer.)

For all their complaints of waste and incompetence, the Coalition never seriously challenged the wisdom of activist fiscal policy.

Malcolm Turnbull supported the initial stimulus packages. He only baulked at how much was eventually spent.

And last week, shadow treasurer Joe Hockey said he would take “well-considered government action” in an economic downturn if monetary policy and automatic fiscal stabilisers were ineffective. But he wouldn’t be “sending $900 cheques to dead people” or buying “overpriced school halls”.

It’s a standard opposition ploy. You agree with a substance of a government policy but claim only your team can implement it competently. Garbage, sure, but effective politics.

The ploy worked fine. By the end of 2009 the Kevin Rudd caravan had moved onto Copenhagen and Malcolm Turnbull had been ousted.

The rest of the world has been engaged in a grand debate about Keynesian stimulus, deficit spending, and monetary policy. Australia has not had this debate. The Coalition has not had this debate.

Thanks to our China-led resilience and the purge of our political leadership, Australia has largely forgotten about the whole financial meltdown and economic panic.

Kevin Rudd wants to bring the crisis up again. It’s not clear the Opposition is ready.

Melburnians Are Streets Behind On Pavement Food

For a city that boasts about its culture and cuisine, Melbourne has a serious deficiency: street food.

Australians mostly think of street food as a feature of the developing world – the slightly risky snacks available on the side of the road in Marrakesh or Hanoi.

But street food is everywhere. Food stands in Belgium and Holland sell chips with mayonnaise. Street vendors in Italy sell croquettes and arancini. Germans can pick up kebabs and bratwursts everywhere.

American cities have always had hot dog stands. Now, they are experiencing a food truck revolution – an explosion in mobile food vendors offering everything from Korean tacos to dumplings. Some of the best dining in the US is on the footpaths of the drabbest business districts.

Street food is varied and cheap.

At its best it is interesting and experimental. The trucks can quickly respond to consumer preferences and park where demand is highest. The communal nature of food-truck dining helps build social capital. Eating is about more than just sustenance.

But Melbourne is missing this revolution. Our food trucks are few; street stalls non-existent.

Melbourne’s street food is rubbish because Melbourne’s brick-and-mortar restaurants prefer it that way.

Businesses don’t like competition. Competition pushes down prices and forces innovation. Entrepreneurs are always trying to entice customers away.

And like any other industry, restaurants know the surest way to reduce competition is to have the government regulate your competitors. Every day, the City of Melbourne hosts about 800,000 people. Yet for those 800,000 people, the city council has approved space for just nine food trucks.

Also, these food trucks have to stay at specific locations. Not one of these locations is in the city centre itself, where you would think demand for food is highest. All but two are hidden in the parklands around the Royal Botanic Gardens.

So, perhaps the council is being ironic when it says food trucks ”are an important part of city life”. They are not even allowed in the city proper. Even more brazenly, the council claims its food-truck policy is all about ”responding to market demand”. It is a market the council is deliberately suppressing.

Still, at least the council pretends it is concerned about what consumers want. The neighbouring City of Yarra does not even bother with such niceties.

Yarra’s mobile food vehicle guidelines state the council’s first priority is to support existing traders in commercial premises. By ”support”, it means ”protect from competition”. Yarra includes some of the best shopping and cultural precincts in Australia. But until last year, food trucks were banned entirely.

Now food trucks are legal – with a permit, of course – but only if they stay at least 100 metres away from any existing takeaway business. Yarra Council can insist the trucks only operate when other restaurants are closed. It can even decide what sort of food is offered for sale.

These restrictions are nothing more than naked, anti-competitive protectionism. They reduce consumer choice. And they stifle Melbourne’s culinary identity.

Seemingly minor rules and regulations can shape a city’s culture in unexpected ways.

Much of what we imagine to be distinctive about global cities is the result of obscure local laws rather than any inherent national character. For instance, Amsterdam’s narrow buildings look that way simply because a tax in the 17th century was levied on the width of buildings. New York’s Times Square is dominated by advertising billboards not because Yankee capitalism is out of control but because the zoning code requires office towers in the square to display illuminated signs.
In Australia, the most obvious example of how regulations transform culture is liquor licensing.

Melbourne and Sydney offer a natural experiment. The people are the same; the laws are different. Until recently, Sydney had extremely expensive liquor licences.

High-priced licences encourage beer barns – licensees need the patronage to recoup the high costs. Melbourne’s much cheaper licences have allowed smaller, more distinctive venues to flourish. The laneway bars that feature in Melbourne’s tourism campaigns only exist because of our distinctive liquor regulations.

In 2008, the NSW government began to offer small-bar licences. But policymakers can’t decide whether to oppose more drinking venues (more places to get drunk) or support them (nicer places to socialise). As a result, Sydney’s small-bar revolution has been less than revolutionary.

In the same way, local councils love the cool vibe of food trucks but they also want to protect restaurants from competition. So they play both sides. The councils brag about their embryonic food-truck culture, while making it as hard as possible for the trucks to actually operate.

This political compromise works well for established restaurants and local government politicians. But it works terribly for us.

In Defence Of Polling

During the 2012 presidential election, Republicans had to torture opinion poll data to suggest Mitt Romney had a chance. Australians have had their own versions of opinion poll trutherism ever since Kevin Rudd was rolled.

But in recent weeks, the standard anti-poll sentiment has taken a more desperate air. On the weekend, Wayne Swan protested that leadership polls are “disrespectful to voters”.

First, let’s accept all the criticisms. Opinion polls are imperfect. Their regular ups and downs are often within a margin of error. Respondents can only answer the questions put to them, and only in the form those questions are asked. They do not usually show how much voters care about specific issues. That level of meaning has to be teased out with other, more qualitative methods.

And polls certainly cannot predict the future. Opinions can change. So the more hypothetical a question, the more uncertain the answer is likely to be.

But even with all these problems, polls are still the only actual empirical evidence we have about what citizens think about their government in between elections.

You’d have to be pretty arrogant to dismiss that.

For all the conspiracy theories about Newspoll, for all the embarrassed self-reflection from journalists, for all the blithe dismissals of polls by Labor partisans, surely it’s good to know what the public thinks.

A bit democratic, even.

The first regular political opinion poll in Australia was held in October 1941. It was a Gallup poll, run by what is now Roy Morgan Research. (There had been another poll a year earlier, commissioned by the Department of Information, but that was done for the government’s benefit.)

The result was conclusive, and important. Fifty-nine per cent of Australians supported equal pay for men and women doing the same work.

This was exciting. Before opinion polls, the only systematic accounting of public attitudes was an election every few years. An election is a very blunt instrument. Now the mind of the public was suddenly revealed to those whose jobs depended on it.

Over the next few years, questions poured out. How did Australians rate the government’s wartime performance? How were they enjoying price controls? Should horse racing be restricted during the war? Was it time to revisit the prohibition question? Should Sunday shopping be available for servicemen?

Yet the new science of public opinion was not universally embraced.

In July 1942, the Labor premier of Tasmania, Robert Cosgrove, demanded the Commonwealth government “take steps” to control the publication of Gallup polls. He reported that the Hobart Trades Hall Council didn’t know anybody who had actually been interviewed, and were therefore convinced the public was being misled.

You often hear that we’re living in a great age of polling. In his 2010 Quarterly Essay, Trivial Pursuit, George Megalogenis said that Australian politics changed for the worse when Newspoll switched from monthly to fortnightly in 1992.

But if there was a real breakthrough moment for polls in Australia, it wasn’t Newspoll in 1992. It was the battle against Ben Chifley’s attempted nationalisation of the banks at the end of the 1940s – the first true public opinion campaign in Australian history, and one which relied heavily on polling.

The political class has had more than 70 years to get used to regular opinion polls. Australia’s poll sceptics need to admit their problem is not with polls. It’s with politicians.

Let’s not blame Parliament’s leadership soap opera on the fact that politicians now have more information about what the public thinks of them.

After all, it is pretty well established by now that Kevin Rudd wasn’t dumped in 2010 because he was doing poorly in the polls but because his most senior colleagues didn’t like him. That is, Kevin Rudd was the victim of crude factional politics. His modest Newspoll decline was just the excuse.

In the Wall Street Journal the day before the 2012 presidential election, Peggy Noonan wrote that, “Nobody knows anything. Everyone’s guessing … Who knows what to make of the weighting of the polls and the assumptions as to who will vote? Who knows the depth and breadth of each party’s turnout efforts?”

Her scepticism was in contrast to Nate Silver’s New York Times prediction that Barack Obama had a 90.9 per cent chance at victory. In retrospect, Noonan looks like a fantastist – someone who holds onto an outlandish view and dismisses all contrary evidence.

Polls are the best information we have about what people think about their government and public policy questions.

Politicians like to say they don’t pay any attention to polls. How terrible if that were true.

US Surveillance Scandal Just The Tip Of The Iceberg

More than a decade after the September 11 attacks, the US is having a debate about its monstrous national security apparatus. Finally.

In that time, Congress has granted every wish of every security agency. The only condition was those wishes had to be connected, however vaguely, to the war on terror.

Last week, Americans learned the result. They now live in a vast surveillance state run by secretive intelligence bureaucracies and bloated private contractors.

We should care about this, too. Australia’s national security agencies are pushing our Parliament down the same path.

Here is what we know so far about the American scandal. For the past seven years, the US government has been secretly hoovering up records of millions of phone calls. It has been able to gain access to enormous amounts of data from companies such as Google, Facebook and Yahoo on their users. For its legal authority, it relies on the rubber stamp of a secret court.

Those companies targeted are forbidden from discussing what is going on. In March, Director of National Intelligence James Clapper explicitly denied to Congress that the program even existed.
As one Democrat who received a classified briefing this week said, the public has only seen the ”tip of the iceberg”.

Australia has not gotten quite that bad. But every policy change goes one way – towards more state power.

The Attorney-General’s Department wants Parliament to approve a suite of new security powers. This would include a massive data retention scheme, where records of all our internet usage would be kept by internet providers just in case we are later suspected of committing a crime.

The government is not transparent about what exactly these new powers would entail, or what they are supposed to solve. We have to piece together disparate pieces of information to figure out what our own government is doing.

For instance, we learned in February our foreign spy agency ASIS has been lobbying politicians for permission to collect intelligence on Australian citizens. But that is already the job of the domestic agency, ASIO. Why does ASIS want this power? It is not clear.

Earlier this year, we learned Australian bureaucracies are accessing phone and internet records nearly 1000 times a week without a warrant. Even the RSPCA can get access to these records. Yes, that RSPCA, the animal group.

And it is almost certain the American program has been been collecting data on Australians. Parts of the program give moderate privacy protections to American citizens but nothing to people ”reasonably believed to be outside the United States”. It is unclear how involved Australian agencies are. We know British agencies have been, but Canberra won’t disclose anything.

This madness has to stop. The national security state has grown too big. It is too unaccountable. It is fundamentally undemocratic.

When the Attorney-General’s office was questioned about its surveillance activities, a spokesman replied it was the “long-standing practice of successive Australian governments not to comment on national security and intelligence capabilities”.

Such blithe dismissals might have worked in the past. But after what we have seen in the US, there is no longer a reason to give government any benefit of the doubt.

Nobody denies that law enforcement must keep up with the times. Nobody denies terrorism is a real and ongoing concern. But the past decade has seen security agencies use these two facts as leverage for unprecedented funding and power – far out of proportion to the technological problems they are worried about.

Security agencies have an advantage in the political game. They are a black box – opaque and secretive. It is easy to convince politicians they would be endangering lives if Parliament did not grant some new power, or if checks and balances were not relaxed a little bit more.

The agencies are helped by national security apologists, who seem more worried about loyalty to the state than any democratic accountability.

The first reaction of the conservative columnist David Brooks to the US scandal was to surmise that the person who exposed it – 29-year-old security contractor Edward Snowden – was just the product of an overly individualistic society. OK, one of the biggest surveillance programs in history is revealed, and Brooks concludes the real issue is young people?

Columnists say the darndest things. But Brooks’ is not a lone voice. There is an active discussion in the US about Snowden’s motives, his girlfriend and whether he has committed “treason”.

Some perspective, please. Snowden’s character is irrelevant to the question of how powerful security agencies should be in a free country. Those who try to play down, dismiss or deflect this scandal are simply the willing tools of state power.

Just as despicable is the claim (heard occasionally from the left) that citizens have abandoned their right to privacy by handing personal information to companies. Talk about blaming the victim. We share stuff on Facebook, so it’s our fault the government is out of control?

The surveillance scandal is an important moment. Even the most gung-ho conservatives in the US are having second thoughts about the national security state.

Let’s hope that scepticism trickles down to Australia.

Labor’s End: Out With The Old, In With The Renewed

Let’s say Rudd returns to the prime ministership – which seems possible – and then goes on to win the next election – a big ask, but not entirely far-fetched.

What would a reconstituted and re-elected Rudd Labor government look like?

Once the horserace is over there will need to be a government, and it will need to have some policies. Better: an agenda. Even better: values.

Labor won’t be able to run on its record. Leadership changes have a funny way of repudiating all that came before.

Yet this government seems to be coming to a natural end. All the big ticket items over the past few years have been implemented (in some fashion) or abandoned.

It’s instructive to revisit Rudd’s 2007 policy speech, delivered 10 days before the election. This was the last time Labor was thinking coherently about the story it wanted to tell; the agenda it wanted to describe and the values it wanted to project.

That speech pivoted on three things. Rudd was going to repeal WorkChoices. This was done quite quickly. Labor’s campaign managers would love Tony Abbott to dash head first back into the workplace relations quicksand, but that’s not going to happen.

Rudd was going to govern the economy as an “economic conservative”, and would end John Howard’s reckless spending. This went out the window when the Global Financial Crisis hit.
Then he was going to tackle the skills shortage through education reform.

Remember the skills shortage? 2007 was so long ago. Still, an education package is being bedded down. The Gillard Government in its usual hapless way has neutered any political benefit it might get from the issue. Rather than explaining and defending their education policy, the Government seems to assume everybody knows what “a Gonski” is and why we ought to give one.

Other flagship policies of the 2007 election are old news. The carbon tax is up and running. We’ve heard enough about that to last a lifetime. The National Broadband Network is plodding along. It’s way behind schedule, of course, but who’s counting? Now that the Coalition has its own costly broadband scheme, the edge has gone off that debate.

Finally, one of Rudd’s great themes of 2007 was Australia would be a country that “makes things”. Given that he specifically meant those “things” to be “cars”, that theme is unlikely to be revisited.

So what now? It’s an item of faith among Labor partisans that Tony Abbott hasn’t released any policies. But in truth we know much more about the Coalition’s plans for the next term than Labor’s.

Last year I argued it’s more important to hear what Tony Abbott would do on his second day than what he plans to do on his first. A shopping list of policies does not make an agenda.
If Rudd returns to the leadership, this is exactly the challenge he will face too.

Dennis Glover argued in a very good essay published by the Chifley Research Centre last month that Labor has gotten its policy-making process backwards.

Rather than starting with philosophy and deriving policy detail from that philosophy, Glover says Labor has been devising policies on technocratic and managerial grounds, and then using philosophy to provide their post-hoc justification.

There’s a lot to this. Too many politicians think of political philosophy – or its marketing friendly cousin, “values” – as mere adornments on their otherwise technocratic agenda.

Kevin Rudd was a notable offender. Rudd lurched from being an economic conservative in November 2007 to the scourge of neo-liberalism in February 2009.

How could the Labor Party harbour both philosophies under the same roof, let alone in the same Prime Minister? Of course he never really believed either one. Rudd was an ideological chameleon – a technocrat who professed different philosophies as expediency demanded.

First, Rudd wanted to talk about interest rates and inflation and Howard-era fiscal recklessness, so he said he was a conservative. Then he wanted to spend money to avoid a recession, so he said he was a Keynesian warrior.

He only increased the confusion when, having slayed the dragon of neoliberalism, he passionately advocated a “market mechanism” to resolve climate change.

This chameleon approach left him weak when things stopped going his way, after the collapse of the Copenhagen climate change talks. After all, what did Kevin Rudd stand for without his overly energetic policy announcements and his air of invincibility?

Rudd’s supporters say he’s learned a lot about management style and handling his colleagues in his years in the wilderness.

That’s lovely. But at the next election, we’re not voting for who works best with others. We’re voting for a government. Once all the leadership argy-bargy is over, we’ll need to know what a second Rudd government might be like.

At Risk Of An Asylum Seeker Underclass

A reductio ad absurdum is an argumentative ploy to show a proposition is wrong by taking it to its most absurd extreme.

Australia’s asylum seeker debate is one great big reductio ad absurdum.

Take, for instance, the fact that Australia has excised itself from its own migration zone. Or that Australia now has a policy of indefinite imprisonment solely because legislators can’t close a bureaucratic loophole.

Here’s the latest madness.

The Government has released 16,000 asylum seekers into the community as they wait for their refugee claims to be processed. The asylum seekers receive around $220 a week from Centrelink. Most of this goes towards rent. But they’re on bridging visas which stipulate that they’re not allowed to get jobs.

And nearly half of those asylum seekers are subject to the Gillard Government’s “no advantage” rule, which means they could be in limbo like this for a very long time. They will have to wait as long as they would have if they’d remained in a refugee camp. That could be many years.

It’s all a bit of a problem.

On Sunday Opposition spokesman for immigration Scott Morrison suggested on Channel Seven that, since these asylum seekers are hanging around not doing much, why not have them work for the dole?

Under his plan, if asylum seekers in the community want food and accommodation, they’ll have to work on “community projects”. And they’ll be paid in vouchers, not cash.

Morrison’s proposal cobbles together two existing programs with vastly different purposes.

The vouchers part of the policy superficially resembles the income management program imposed on some welfare recipients, most famously as part of the Northern Territory intervention.

But income management is for people who – the Government believes – are unable to manage their finances. Its purpose is to “encourage participation and to increase … financial literacy”.

Income management is infantilising. This proposal is worse. If asylum seekers on bridging visas are capable of working, it ought to be assumed they’re capable of household budgeting too.
Similarly, work for the dole is supposed to encourage welfare recipients to join the workforce.

Yet they want to enter the workforce. It’s just their visa conditions make work illegal.

Without the traditional justifications for income management and work for the dole, all that is left is a proposal to force a class of foreigners to clean gutters and tidy parks for food.
Would this be like prison work? Or is more like indentured servitude? Forced labour? The Channel Seven report speculates they might live in “group accommodation, possibly work camps”.

Just as damning was the quick approval of the proposal by the Immigration Minister Brendan O’Connor: “I’d like to see [asylum seekers] participate and contribute and I think it’s therefore worth considering”.

Recall that Brendan O’Connor has spent the last few months declaring how concerned he is about hypothetical cases of people who hold 457 visas being exploited. Apparently O’Connor thinks it’s ok if the Government exploits people who are holding bridging visas.

Anyway, enough about political hypocrisy.

A few years ago I argued in the Drum that most of Australia’s asylum seeker problems are the fault of the United Nations 1951 refugee convention.

The convention divides migrant populations into two groups. There are those who are moving across borders for economic reasons. Then there are those who are moving across borders because they have “a well-founded fear of being persecuted” – and are therefore eligible for refugee status if they seek asylum in a signatory country.

The former group is assumed to be independent and responsible for their own upkeep. They are supposed to get jobs to get by. For this group, migration is seen as the result of individual choice.

The latter group is assumed to need protection. They become wards of the state, given accommodation, welfare, and social services. Here, migration as sort of global safety net.

But the division is false and misleading. If you browse the Refugee Review Tribunal decisions you’ll see how it collapses when it meets real life.

The problems with the division are magnified when countries deal with those who are seeking asylum – in other words, those who have not been yet granted official refugee status.

The convention gives refugees the same “right to engage in wage-earning employment” as any other citizen.

But we haven’t granted asylum seekers their refugee status yet. And – because they say they came to our shores for protection, not jobs – the Government has decided they should be prohibited from working while they wait.

Add to all that the punishing indeterminacy of “no advantage”, and this is Catch 22 stuff.

The Coalition’s proposal would make the asylum seekers’ legal limbo even worse.

Freezing foreign migrants out of the normal workforce creates exactly the sort of resentful underclass that conservative sceptics of immigration worry about. Immigration policy design can have severe social consequences down the track. Just ask Germany.

We’re living through a great age of migration. We’re going to have to start thinking seriously about what that means.

Should You Foot The Bill For Execrable Waste Of Human Resources?

Trolls like to say that trolling is an art form. To troll is to be inflammatory on the internet for the sole purpose of disrupting and offending others. It’s more nuanced than it sounds. A troll must be plausible enough to be taken seriously – don’t want to give the game away – but outlandish enough to generate the desired outrage.

Trolling is not always successful.

On a Friday night less than a fortnight ago, six dancers from a company called BalletLab performed an artistic work at the Australian Centre for Contemporary Art at Southbank. This involved them sitting on toilets and taking a dump.

The defecation was done in a most tasteful manner, obviously. The dancers were masked and cloaked in sheer golden garments. The toilets were transparent. Those involved emphasised how brilliant the performance was. The artist proclaimed that bowel movements were ”humanity’s most democratic act”. The centre’s director said it was bold and challenging: “It’s wonderful, powerful work.”

Nonsense. The performance, titled Goldene Bend’er, is a badly executed troll. Nothing more, nothing less.

There’s no longer anything original or particularly provocative about bowel movements presented as art. It has been 52 years since the Italian artist Piero Manzoni canned his own “Artist’s shit” – long enough for it to be considered a classic piece. And toilets featured in art earlier than that. Marcel Duchamp’s urinal is four years shy of its 100th birthday.

These were genuinely important works. Artists have offered up many excrement-related performances, paintings and sculptures since. Remember that infamous painting of the Virgin Mary covered in elephant dung? It’s nearly 20 years old. Poo is a well-covered topic. It’s almost a cliche.

Goldene Bend’er is indulgent and mundane. It reveals that the art world is much more pious and insular than the society it is trying to “challenge”.

Decades ago this sort of stunt would have earned front pages across the country. Politicians would have condemned it. Conservatives would have thundered. Recall how angry people were when the National Gallery bought Jackson Pollock’s Blue Poles in 1973. Recall the fury over Piss Christ in Melbourne in 1997.

But that was long ago. Think about it: six dancers did a poo in front of an audience and the only audible noise was self-congratulation. No outrage. No protests. No one cares. What is the point of shock art if it no longer shocks?

There’s nothing wrong with shock art per se. Ugliness and revulsion has always been a feature of art. Christian painters dwelt on the wounds suffered by Christ on the cross. Death was depicted as twisted skeletons. Grotesque demons and terrifying monsters populated the landscapes of hell. There’s nothing that says art has to be – or has ever been – pleasant.

The 20th century has demonstrated art can be ugly, foul, empty, disgusting, accidental, amateurish, untrained and offensive, and still be art. But surely it at least has to be creative. The only thing worse than being obscene is being boring.

The only reason such faux-radicalism survives is because we are forced to pay for it.

The dance company that performs Goldene Bend’er, BalletLab, is financially supported by the Victorian and Commonwealth governments. The Australian Centre for Contemporary Art gets its money from Victoria and the Commonwealth, too. It also receives another chunk of money from the City of Melbourne.

In its submission to Kevin Rudd’s National Cultural Policy inquiry, the centre wrote that the arts were crying out for “proper investment” – read, much more government funding.

Nonsense. Taxpayer funding protects artists from their audience. That it tends to produce more rubbish than genius is a feature, not a bug. The system is designed to favour indulgent, unpopular work over appealing work.

The first arts grant in Australia was given to a poet, Michael Massey Robinson. In 1818, he was given two cows “for his services as Poet Laureate”.

Robinson knew his market. He would write birthday odes to the King and Queen for Governor Macquarie every year.

Not much has changed. Rather than persuading consumers to pay for their work, artists only have to persuade government bureaucrats to give them a share of tax revenue.

These attempts to shock help drive the public from contemporary art – not because the art is offensive, but because it is trite. It treats the audience as the enemy.

In other words, every taxpayer-funded crap a ballet dancer takes on stage is another blow to the commercial viability of all art.

One of the maxims of the online world is don’t feed the trolls. Let’s not subsidise them either.

Insane Obsession: Australia’s Auto Industry Waste

In his foreword to the 2008 A New Car Plan for a Greener Future, Kevin Rudd observed that half a century had lapsed between the first demonstration of a horseless carriage in South Australia and the debut of the Holden FX in 1948 – the first truly Australian car.

Rudd was trying to say that the car industry is worth saving.

But anybody familiar with Australian protectionism in the 20th century would have recognised in Rudd’s observation less a story of triumph and more a long story of failure.

Ford is leaving Australian shores in 2016. It’s time to write the car industry’s obituary.

When we first started protecting the automotive industry against foreign competition, cars were a luxury item.

In August 1917, prime minister Billy Hughes announced an absolute prohibition on selected luxury imports. Car bodies were on the list, beside fur apparel, jewellery and (strangely enough) biscuits.

In part the government said this prohibition would keep currency from being sent overseas during the war, and would free up space on cargo ships that was being wasted on bulky and unnecessary imports.

But most of all Hughes wanted to encourage Australia’s existing horse-drawn carriage manufacturers (and their 7,000 or so employees) to make car bodies instead.

Cars were a luxury, but they were a high-tech sort of luxury. Founding a car industry in Australia was to politicians of the early 20th century as founding a “Silicon Valley” is to politicians of the 21st.

The Hughes prohibition on car body imports was immediately controversial. Now Australians wanting a car would have to order a chassis from overseas, and then, once it arrived, wait a few months for the body to be built domestically.

Industrial delegations filed into the office of the Minister for Trade and Customs. The importers and traders protested that cars would be more expensive. Furthermore, there was no way the domestic industry could fill orders already on the way. Their delegation was closely followed by an alliance of leatherworkers, sheet metal workers, glass bevellers, and parts makers who urged the government to stick to the embargo.

The importers and traders lost. After the war, the ban on car body imports was converted into a very high tariff.

For the next century, the car industry would be governed by ministers rather than markets. Even deep in the era of protection-all-round, cars were a special case. Both Labor and non-Labor parties fell over each other to support the car industry.

Protectionism distorted our automotive sector in all sorts of perverse ways.

The modern American car industry was really born in the 1930s. It abandoned its cottage manufacturing roots and became the large-scale, industrial enterprise that it is today.

But as the United States was taking advantage of economies of scale brought about by industry consolidations, the tariff kept Australian car companies sheltered and small. In the late 1930s, the average automotive parts company employed just 11 people.

And the tariff slowed the introduction of new technology. Closed-body and all-steel body cars were only available in Australia a decade after they were available in the United States.

In 1938 the Tariff Board – hardly a bastion of free market thought – concluded it was “unwise” to encourage Australian manufacturers to produce an all-Australian car.

This advice didn’t bother Ben Chifley. Chifley wanted a native Australian car to be the lynchpin of Australian manufacturing after World War II.

That car ended up being the Holden FX, launched in 1948. Henry Holden was one of those horse-drawn carriage makers who’d taken advantage of Billy Hughes’ ban on car body imports.

Australians tend to be pretty nostalgic about the early Holdens. But they couldn’t have been built without government assistance. They were never competitive in their own right. Holden still receives government subsidies. It wants even more.

We’ve been trying to spark a self-sustaining car industry for a century now. Every side of politics has tried their little hearts out. Low tariffs with high subsidies. High tariffs with low subsidies. Every side has failed. Every side tries again.

On Sunday the Coalition’s industry spokesperson, Sophie Mirabella, was talking up “strategic investments” on the Bolt Report, and calling for the Productivity Commission to provide a “clear path for a viable industry going forward”.

The next time you hear that it is markets which are irrational, recall the definition of insanity: doing the same thing over and over again and expecting a different result.

Not even Ford – the world’s most historically prestigious car company – closing down its Australian operation can apparently break this insane obsession.

But then again, Ford had to be enticed to come to Australia in the first place. Only after government negotiators promised the company assistance did Ford set up shop in Geelong in 1925. Since then it has been protected by a tariff that has gone as high as 57.5 per cent. Australian consumers have paid for that tariff in higher car prices. And the company has received around $1 billion in direct taxpayer subsidies over the last decade.

Yet after all that, the supposed party of free markets still can’t recognise automotive protectionism for the waste of money that it is.

When Does Mission Creep Become Censorship?

The Australian Securities and Investments Commission is completely out of control.

The corporate regulator is an independent government agency. It is not directly accountable to a minister. It is only partially accountable to parliament.

And over the past nine months ASIC has been ordering internet service providers to censor websites it suspected of hosting fraudulent investment material.

To do this, ASIC has been utilising an obscure section of the Telecommunications Act usually used to prohibit extreme cases of child pornography.

The outrage only came to light because 1,200 other websites were accidentally censored as well.

Renai LeMay at the technology website Delimiter has the full story. In the Drum last week,the convenors of Melbourne Free University – one of those innocent websites taken down by ASIC’s actions – explained what happened when
they were blocked.

It’s an almost perfect illustration of regulatory mission creep.

Legislative provisions designed to only deal with the most extreme crimes are eventually used to pursue lesser offences. Given that this involved full-blown censorship – and censorship without oversight or appeal – ASIC’s actions are incredibly reckless.

Censoring the internet is a gross abuse of its status as an independent regulator.

Perhaps we could forgive an abuse of power if it was a one-time thing. But it’s part of a pattern.

In September and October last year the federal government was pushing hard for a data retention scheme to govern the internet. Such a law would have compelled internet service providers to retain the browsing habits of their customers for two years, on the off-chance law enforcement agencies wanted to have a look at them later.

The data retention proposal was both vague and authoritarian. Senior ministers claimed the policy was to protect us against the worst of the worst: terrorists, paedophiles, the most terrifying cyber-criminals.

When an IPA colleague and I appeared in front of the Parliamentary Joint Committee on Intelligence and Security to oppose data retention, we were informed by one Labor backbencher, Michael Danby, that “extreme civil liberties” placed Australia at risk of another terror attack.

But as the hearings progressed it was revealed that one of the biggest advocates within Canberra for data retention wasn’t the security agencies or the Federal Police, but ASIC.

And not only did ASIC want the internet metadata to be retained – information like date and timestamps – but the corporate regulator even wanted our content to be retained too. That is, it wanted internet providers to store every single word in our emails, and every website we’ve ever visited.

Such an extreme breach of our privacy was not to protect us against terrorists, but insider trading. (The details, such as they are, are on pages 26 and 27 here.)

It’s not like ASIC doesn’t have any draconian powers already.

Judges have repeatedly slapped ASIC down for its approach to regulatory enforcement. In one case ASIC was condemned for being oppressive, for abusing process, and bringing the administration of justice into disrepute.

In another, the judge admonished ASIC’s lawyers for alleging dishonesty without any basis in evidence.

Judges often question ASIC’s motives.

One of the key insights of the public choice school of economics is that bureaucracies often act in their own interest. They want a bigger share of the government budget, more public profile, and greater powers.

ASIC is hardly the only example of a rogue agency. Under Allan Fels, the Australian Competition and Consumer Commission was similarly unchecked.

At Catallaxy Files, Sinclair Davidson has pointed out that ultimately the federal parliament is responsible for ASIC’s actions. Politicians write the laws under which the regulator operates. Politicians grant them their powers. But by deliberately setting them outside the political process – by giving them statutory independence – they’ve made them unaccountable, and allowed them to get out of control.

So politicians have to reign ASIC in. But there’s a more fundamental problem. The sort of abuse of power we are seeing out of ASIC is endemic to the regulatory state.

The logic is as follows.

The relationship between a regulator and a regulated organisation (let’s say a company operating in a marketplace) is like a continuous game of cat and mouse. A regulator makes a rule. A company changes its behaviour to comply with the rule. But, assuming the rule imposes some sort of cost on the company, the company will look for loop-holes to minimise the cost.

The frustrated regulator will write another rule to close off the loop-hole. The cycle continues.

The economist Edward Kane calls this relationship the regulatory dialectic. ASIC is a perfect case study.

Caught up in its never-ending battle with the companies it regulates, it has been lobbying for powers which no free society ought to grant even to its national security services. It has been trying its hand at censorship. And it’s launched legal crusades to raise its profile and its political and financial support.

Lawyers and economists like to talk about the content of regulation. What does a regulation permit? What does it prohibit? Nobody wants to legalise fraud or theft.

But ASIC’s extraordinary abuses of power reveal how regulation plays out in the real world – not on the clean page of legislation, or the tight confines of an economists’ model, but when self-interested bureaucrats are asked to enforce uncertain laws against an unwilling private sector.

If By A Miracle Labor Wins The Poll, It Must Deal With The Treasurer

The Age 19th May, 2013

They say every political career ends in failure. But some more than others. All the evidence suggests Wayne Swan’s sixth budget, released last Tuesday, will be his last.

In recent years the Treasurer has been confidently promising he would bring the budget back into surplus. This promise was central to the government’s economic story.

And for good reason, too. The promise implied that the budget’s drop into deficit was a co-ordinated dive, rather than an irresponsible free-fall. It implied Swan was in control all along. When he broke the surplus promise it completely shattered that illusion. Indeed, almost every major problem of the Gillard government can be traced back to the Treasury and its Treasurer.

Take the mining tax – one of the few proposals in the thousand-page Henry Review of taxation Labor bothered pursuing. The mining tax was Swan’s tax. It was his job to explain it, campaign for it, and push it through. But in the end Swan’s campaign for the mining tax resulted in Kevin Rudd losing the Labor leadership.

We often forget that the biggest mistake this government ever made – the spill in 2010 – was a direct result of the mining tax debacle.

The role of the Treasurer has an oversized place in Australia’s political culture. Australia is obsessed with its economy. In no other country do minor shifts in interest rates dominate the political conversation as they do here. For the past few decades budget surpluses and deficits have been the measure by which we judge our governments.

Perhaps we’re too obsessed with the economy. But the obsession serves us well. If you want to see what a lack of interest in public finance fundamentals leads to, then have a look at the United States … or Greece.

So no surprise the roll-call of prime ministers is filled with former treasurers. John Howard, Paul Keating, Billy McMahon, Harold Holt, Ben Chifley and Joseph Lyons have all occupied the post. Other long-serving treasurers (read Peter Costello) have been prime contenders for leadership.

Then there’s Swan. Among all Labor’s leadership buffoonery, Swan’s name has been missing. He is not just Treasurer but Deputy Prime Minister. He ought to be at the front of the queue. Wayne Swan is the only long-serving Treasurer in living memory who has been diminished, rather than enhanced, by his job.

As usual, it all started with the global financial crisis.

Labor apologists say the government’s hasty actions between October 2008 and May 2009 kept Australia from recession. Let’s call this the hero story of the Swan years. It’s pretty simple. The kitchen cabinet of Rudd, Swan, Julia Gillard and then-finance minister Lindsay Tanner pumped an unprecedented amount of money into the economy in the form of $900 cheques, school halls, and pink batts. Then: boom! Recovery was had.

That’s about as concrete as this argument gets. The government spent lots of money on stuff, therefore the economy survived.

But just because one thing comes after another thing doesn’t mean it was caused by it. It’s nice to imagine recessions can be avoided simply by pushing down on the spending throttle. But the world is more complicated than that.

Many countries spent more than Australia, yet their economies did worse. Many countries spent less and recovered quicker. As the blogger Ricardian Ambivalence has demonstrated, a statistical test devised by the Treasury shows there is no relationship between a country’s stimulus spending and its performance in the recent crisis.

If Wayne Swan has any evidence that he saved all our jobs, he hasn’t shared it. And without his crutch – his bold and exciting hero story – the Swan legacy is much less impressive, characterised solely by a rolling series of deficits and a futile optimism that the economy will just grow the debt away. That’s the real story of this year’s budget. It’s a final demonstration that the government’s grand plan didn’t work.

Yes, we have low unemployment, at least by global standards. Yes, international credit ratings agencies don’t think the Commonwealth government is going to default on its debt any time soon. Yet Swan’s entire economic strategy has been predicated on the idea that we would enjoy a sharp burst of growth after the lows of 2008 and 2009.

Instead, our economic growth has been sluggish. The flood of tax revenue Treasury was hoping would pay for those school halls and insulation hasn’t arrived.

Rudd declared in 2007 that Howard’s reckless spending must stop. But it has taken Labor half a decade to axe the baby bonus – the classic example of Howard-era waste. In the meantime Swan has busily increased taxes. We’ve had a mining tax, a carbon tax, an alcopops tax and a flood levy. Now we’re getting a tax for the national disability insurance scheme.

Perhaps Julia Gillard’s government will win the next election. There’s a chance Labor could survive, even if that chance is extremely remote. But if Labor does win, its first priority must be to deal with the problem of the Treasurer.