Articles – Page 37

Gillard Plays The Unedifying ‘Small Australia’ Card

It’s obvious what Julia Gillard was doing when she claimed Enterprise Migration Agreements for mining projects would not favour foreign workers.

Talking to the press on Saturday, the Prime Minister said, “I can assure everyone that we will be putting the interests of Australians at the front of the queue and we will be putting Australians looking for work at the front of the queue.”

Ah, yes. Our old friend The Queue.

There’s not much more evocative in Australian politics than The Queue. For more than a decade it’s neatly divided asylum seekers into moral categories. The virtuous wait in refugee camps; cheaters hop on boats.

Even more than most politicians, Gillard thinks carefully about what she says. Her advisors are smart. When she brings up The Queue in the context of immigration, it’s not likely to be a slip of the tongue. Language matters. This language is about those who are deserving and those who aren’t.

Especially considering that just like the Refugee Queue, the Mining Jobs Queue is fictional. It doesn’t exist. As Peter Martin pointed out in Fairfax papers on Monday, Enterprise Migration Agreements are used for work Australians simply don’t want. There can be no queue if nobody is standing in it.

Most press about this furious little debate has focused on how it makes Julia Gillard look weak, and her hold on the Lodge look weaker. But the debate reveals something more important than the leadership soap opera.

Think back to the 2010 federal election. Few things in that campaign were more dispiriting than the “small Australia” doctrine.

Both the Coalition and the ALP tried to link resentment about asylum seekers to resentment about traffic congestion. The whole thing was farcical. Gillard took Western Sydney MP David Bradbury to Darwin to hunt for refugee boats. And the opposition, trying to demonstrate just how serious they were about slowing immigration, proposed to rename the Productivity Commission the “Productivity and Sustainability Commission”.

The last few days have made it clear the small Australia doctrine was not a temporary anomaly, confined to a weird election held under weird circumstances. It’s no longer just asylum seekers that are controversial. Bipartisan immigration scepticism now looks like it could be an enduring feature of the Australian political landscape.

The Enterprise Migration Agreement is going ahead. But the announcement sent the Government into a tailspin. In Parliament on Monday, Gillard didn’t want to say whether she supported the agreement. How extraordinary: it’s her own Government’s policy.

The unions are opposed to the migration agreements, and Gillard owes her position to them. But unions make all sorts of ambit claims which the Labor government pay no attention to. This one was apparently too big a deal to dismiss.

So the worst part is that instead of ignoring the unions’ shrill protest, the Prime Minister has all but apologised for thinking about foreign workers.

From Gillard’s press conference on Saturday:

My concern here, and the concern of the Labor Government, is always to put Australian jobs first … we put Australian jobs first and now we are putting Aussie jobs first too … we’re working to make sure Aussies get jobs first … we are skilling Australians first and getting them the jobs first … Australians will always come first in getting these job opportunities.

And with the hastily announced Jobs Board (a mining jobs website with the purpose of favouring domestic workers over foreign ones) the Government is ratifying the union movement’s claim that immigration crowds Australians out of work. This is a staple argument made by opponents of immigration, and it is completely wrong. No Australian Prime Minister should indulge it.
Yet this time last year it seemed we’d gotten over small Australia.

The May 2011 budget was a repudiation of the previous year’s excesses. It was then that the Government introduced the Enterprise Migration Agreements policy in the first place. Wayne Swan also announced another 16,000 immigration positions, the majority of which were skilled migrants sent to rural areas.

Australia’s great project has always been to attract more workers and a bigger population. The 2011 budget resumed that course.

But at that stage the next election was far in the distance. Now one is closer – with or without the Thomson and Slipper scandals – and the Labor government is much more frail. Gillard knows if she doesn’t play the Aussie-jobs-for-Aussie-workers card in the future campaign, then the Coalition certainly will. If the past is any guide, they probably will anyway.

The good money says the next election will be played out on the depressing terms of the election of 2010 – a populist, unedifying backlash against population growth and immigration. Australia will not be better off for it.

Obama Beats Bush In Assault On Civil Rights

It’s been fun for the left in Australia to fixate on the Republican candidates for the American presidency. It’s been fun to joke about their policy quirks and eccentricities. Fun to pronounce that nothing is scarier than the prospect of a Santorum or Romney administration. Yes, the Republican race has been a convenient distraction.

Because it would not do to dwell on an uncomfortable, undeniable reality – Barack Obama, the left’s man in the White House, who was supposed to restore America’s standing in the world and end George Bush’s assault on civil liberties, has been much worse than his Republican predecessor.

Obama has undermined more individual rights, and hoarded more presidential power, than Bush ever did. It’s not that he has simply failed to roll back Bush’s anti-terror excesses. Although that is true, as well. It’s that Obama has trumped them. More than 10 years after the September 11 attacks, the White House is still amassing extra security powers. On December 31, Obama signed the National Defence Authorisation Act.

This act allows the military, without judicial authorisation, to arrest and indefinitely detain anybody within American borders.

This power is quite an increase. Under the Bush administration, the military could legally arrest and detain people only in other countries.

American citizens were protected by an 1878 act banning domestic military deployment. Obama no longer observes this legal nicety.

And Obama has claimed the right to assassinate any American citizen he deems a terrorist threat, at any time, according to nothing but his judgment, anywhere in the world. As a former CIA chief recently pointed out, while the President needs a court order to eavesdrop on Americans abroad, he does not need a court order to kill them.

There’s more. George Bush’s once-controversial covert surveillance program has dramatically expanded under Obama. The President’s emergency powers have been boosted. An executive order Obama signed in March (number 13603) grants more to the president in an emergency than any order yet, allowing the government to take over all food, transport, water, energy and health resources and, if the President wants it, to reintroduce conscription.

Executive orders are used to bypass the usual checks and balances in Congress and the courts. As the Cato Institute’s Jim Powell pointed out last month, there is nothing in order 13603 about protecting constitutional rights.

No wonder the director of the American Civil Liberties Union is “disgusted” by the Obama administration’s record. Sure, Obama has withdrawn troops from Iraq. Mission accomplished, as they say. But, on the other hand, he has also personally pioneered an entirely new, more enduring form of global warfare. Drone attacks will remain long after the wars in Iraq and Afghanistan have faded into historical memory.

Because drone war is permanent war. It is limited by nothing more than the whims of the president. It is the first war run entirely by the CIA. It is conducted on the territory of countries to which America is not formally hostile. And it took until February for the administration to even admit the drone war existed.

George Bush’s wars of liberation, right or wrong, had their precedents. Barack Obama’s never-ending global bombing campaign by remote control is his innovation.

It’s a fair bet that no administration will ever shut down the drone program. A competent intelligence agency can always find new threats for a bombing into the Stone Age. So if we simply apply the criteria the left used to condemn Bush as one of the worst presidents in history, there is no ambiguity. Obama is far worse again. Not that you would know about it.

Partisanship has a habit of excusing anything, with 77 per cent of those who describe themselves as left-wing Democrats wholeheartedly approving of Obama’s drone program. Imagine if a Republican did the same thing. There would be anti-drone marches in Washington and candlelight vigils in Paris and Berlin. Now the left is more interested in complaining that Republicans are sceptical about climate change. They ignore, excuse, even – according to the polls – defend their President’s abominable record on war and individual rights. Because he isn’t a Republican.

Locking People Away Forever Because ASIO Reckons

It’s a scandal that administrative decisions which result in indefinite detention are made outside judicial scrutiny.

In his 1885 book An Introduction to the Study of the Law of the Constitution, the great English jurist AV Dicey said, “No man is punishable or can be lawfully made to suffer in body or goods except for a distinct breach of law established in the ordinary Courts of the land.”

This, he argued, was the first principle of the rule of law. With his book, Dicey shaped the English-speaking world’s legal philosophy. He formalised the ideals suggested in documents like the Magna Carta, but which can be traced back to Aristotle.

So compare Dicey’s high principles to a statement made by the head of ASIO, David Irvine, to a parliamentary committee in November last year.

Explaining why he wouldn’t even tell Parliament the grounds on which his organisation makes security assessments for refugees, the ASIO boss said, “Once the criteria for making assessments are known, then you will find very quickly that all the applicants will have methods of evading or avoiding demonstrating those characteristics.”

The Department of Immigration only refers asylum seekers to ASIO for security checks after it’s been determined they qualify for refugee status. It’s one of the last steps. By the time ASIO looks at them, the Australian Government already believes they have a well-founded fear of being persecuted.

So when a refugee receives an adverse security assessment, they’re thrown into administrative limbo. They are unable to return home (too dangerous for them) and they are unable to enter Australia (too dangerous for us). The result is indefinite detention. It’s a classically bureaucratic non-solution. Just lock them up forever and hope the problem goes away.

This is pretty bad, but no-one said national security wasn’t about tough choices.

What makes the situation fundamentally and egregiously illiberal is the fact that these refugees have no idea why they have been detained.

The refugees are not told why ASIO believes they are a security threat. They are not told what evidence the belief is based on. And they have no opportunity to challenge the assessment. There is no review process where the merits of their case can be scrutinised.

In the interminable debate about asylum seeker policy, much has been made of the distinction between incarceration – which happens to criminals – and immigration detention – an administrative process which all asylum seekers undergo. Temporary administrative detention is not punishment.

But when a person is detained indefinitely because the government believes they are a security threat, that distinction is nowhere near as clear. We should never be asked to take a government department on its word that someone must be locked up.

This makes the claims that there are heavy national security issues at stake quite hollow.

No doubt there are circumstances where security demands that some people not be let into the country. David Irvine assured the parliamentary committee that ASIO makes negative findings sparingly and hesitantly. In his words, “We do not take a decision to issue an adverse security assessment lightly and nor are we contemptuous of or blasé about the human rights of the individuals involved.”

That may be true. ASIO could be bureaucratic paragons. But with no checks, we cannot have any confidence they are. Ronald Reagan was fond of the phrase “trust, but verify”. It applies here. A liberal society trusts its bureaucratic and judicial administration because of safeguards built into that system – not because of the inherent honesty and virtue of the public service.

So the issue here is not simply about justice for the 50-odd refugees stuck in this administrative black hole. Without institutional safeguards, the Australian public should have no confidence in ASIO’s decisions. The ASIO chief may have meant his assurances to be comforting, but they only remind us that his assurances are all we’ve got.

In a story on Monday night, the ABC’s 7.30 spent time discussing the adverse assessments made about refugees with links to the Tamil Tigers. The program offered up academics with different views about the security risks they presented, and an interview with a former member now living in Australia.

All very interesting. But this debate is in many ways premature. It grants the system an institutional legitimacy which it does not have.

By not implementing a right for refugees (or their security-cleared advocates, or a tribunal) to question the merits of individual cases, we have, by accident, established a system where we literally lock people away forever just because somebody at ASIO “reckons”.

It’s hard to imagine anything more illiberal, anything more contrary to Dicey’s great principles, than that.

The Unhappy Compromise Of European ‘Austerity’

Has austerity worked in Europe? Well, if “austerity” means savage cuts to government spending, then there has been no austerity.

Figuring out whether a particular policy approach to a given problem has been successful is complicated, and the answer is rarely clear-cut. This gets a lot harder when it’s not obvious that policy approach has even been taken.

The French election earlier this month was a referendum on Nicolas Sarkozy’s apparent austerity approach. But between 2007 and 2011 – that is, since the financial crisis began – France actually increased the size of government as a percentage of GDP from 52.6 to 55.9.

It’s the same in virtually every other major European economy. Italian government spending has gone from 47.6 per cent of GDP in 2007 to 49.9 per cent in 2011. Greece went from 47.6 to 50.1. The United Kingdom jumped from 43.9 to 49.0. Spain was at 39.2 in 2007, and is now at 43.6.

These figures come from the European Union’s statistics agency, Eurostat. There are other sources, and other ways you can slice and dice the numbers. The economist Veronique de Rugy looked at the raw and inflation-adjusted expenditure figures published by the OECD. She found the same thing.

Each approach tells a variation of the same story. All of the major European economies are spending more now on government than they did before the global financial crisis began.
That’s not to say there hasn’t been some cutting. In Greece, Spain, and Italy, spending peaked in 2009. A large part of the expenditure growth has been due to unemployment payments. But, as the free market economist Russ Roberts recently pointed out, the makeup of government spending shouldn’t matter – according to the Keynesian model, all government expenditure should boost demand.

There is no avoiding it: European spending is much higher now.

This simple fact ought to put a big question mark on claims of cruel austerity. After the French and Greek elections, Paul Krugman wrote in the New York Times that a “Franco-German axis … has enforced the austerity regime” on Europe. But European governments haven’t turned off the tap. They haven’t even decreased the water pressure. At most, they’ve slowed the pace of growth.
So why is there an electoral backlash against a policy that doesn’t exist? There are two things going on.

First: voters don’t like cuts. As a general rule, the public isn’t happy when governments announce they are going to spend less. The size of those cuts is a mere detail – after all, voters don’t respond to Eurostat data, they respond to impressions.

Political leaders have been stuck between two rigid forces. On one side, there is the economic need to demonstrate, loudly and confidently, to financial markets that they can keep their budgets under control. But on the other side, there is a political need to keep the faucet of government benefits flowing to voters and special interests.

The inevitable compromise satisfies nobody. There’s neither enough restraint to make serious headway into restoring fiscal credibility, but more than enough to upset groups that rely on taxpayers’ largesse.

This is doubly a problem because the usual benefit of cutting spending – cutting taxes – can’t be delivered. In many cases taxes have gone up substantially as governments try desperately to bridge the gap between revenue and expenditure. Raising taxes without corresponding increases in services is not the best way to buy popularity.

The second reason is more politically fatalistic. Voters punish governments when things are going badly. It doesn’t matter whether it’s those governments’ fault or not.

The Australian academic-turned-parliamentarian Andrew Leigh found in a 2009 paper that voters respond more to a government’s luck than its competence. If the global economy does well, incumbents benefit. If it does poorly, oppositions benefit – no matter who is responsible.

This effect might seem unfair, but it is remarkably persistent. Another paper, also published in 2009, built on Andrew Leigh’s work by looking at disaster relief in India. It found many voters even punish incumbent governments for bad weather.

So the foul economy was always going to make European voters hostile to incumbents.

Yet none of this explains why claims of European austerity are so overhyped outside of Europe – why our economic commentary is littered with moral lessons supposedly drawn from their mistakes.
Yes, advocates of aggressive fiscal stimulus would be no more pleased by the European experience than anyone else. There hasn’t been any austerity, but there certainly hasn’t been any ambitious increase in government spending either. After initial stimulus programs at the start of the crisis, governments pulled their horses back.

But those governments’ reluctance to toss budgets further into deficit on another round of stimulus has, somehow, been recast by Keynesians as a test of high-brow economic philosophy, rather than a test of policy compromise and half-heartedness.

So, despite a demonstrable lack of austerity, the “age of austerity” has become a legend – as if it is a natural experiment in free market economics, proving once and for all the efficacy of a small-government approach to dealing with recessions.

If only. Surely both Keynesians and free marketeers should be able to recognise the European approach for what it is: an unhappy compromise that satisfies nobody.

The Politics Of Projection: There’s A Reason We Can’t All Just Get Along

Politics is almost entirely in the eye of the beholder. Obviously conservatives, libertarians, progressives and environmentalists have different ideas about government. But their clash goes much deeper. Political disagreement isn’t really about politics. It is about competing worldviews; different conceptions of ethics, morality, relationships and communities.

With that in mind: how polarised do you think Australian politics has become? Have Australians really bunkered down into bitter, warring camps on issues such as climate change and refugees?

How you answer says a lot more about you than anything else. According to a fascinating paper just published in the Journal of Personality and Social Psychology, the more radical your politics are, the more radical you imagine everybody else’s politics to be. As the authors find, “people project their own polarisation onto others”.

Projection is a basic human trait. We believe others share more of our attitudes than they do. If we like dark chocolate, we assume others like dark chocolate. If we like walks in the park, we assume others like walks in the park. Humans are social animals: it’s important that others validate our preferences.

In politics, this doesn’t necessarily mean we think everybody agrees. (Although psychologists have found we imagine a false consensus about everything from animal rights to nuclear energy.) But it does mean we assume everybody is as passionate as we are. So when radical partisans encounter disagreement, they see aggressive conflict and polarisation.

Projection confuses virtually every aspect of politics. It makes us assume a greater degree of consensus on the big moral questions than there really is. When that consensus is shown to be an illusion, it breeds hostility.

In a book released in March, The Righteous Mind: Why Good People are Divided by Politics and Religion, the American academic Jonathan Haidt explains the psychological basis of our political divide. Using thousands of interviews, Haidt discovered that progressives had three moral foundations for their political views. But conservatives had twice as many.

Progressives are driven by compassion, fairness, and liberty. Conservatives share those ideals, but they add group loyalty, respect for authority, and “sanctity” – that is, a sense that some things, like marriage or the flag, should be sacred and untouchable. Both sides have to manage trade-offs between their ideals, but conservatives have more ideals, and have to manage more trade-offs. This explains a lot about why left and right are at loggerheads.

Haidt argues that conservatives cope best: when they project their own moral beliefs onto progressives, they recognise compassion, fairness and liberty, and identify that loyalty, sanctity and authority are missing.

But when progressives look at conservatives, they get bewildered. Projecting their moral framework onto conservatives doesn’t seem to explain much. So the progressives offer different explanations: conservatives must be selfish, heartless.

Kevin Rudd famously wrote that free market conservatives dressed greed up as economic philosophy. He might just as well have said he was completely mystified that anybody could disagree with him. Rudd could not reconcile his moral philosophy with the beliefs of others. His projection failed. And people attack what they cannot understand.

Rudd’s successors are no better. Julia Gillard and Wayne Swan claim they represent the ”fair go”. Perhaps this excites Labor’s base, who can smugly fantasise that if the left like fairness, the right must like unfairness. But conservatives like fairness too. For them, fairness manifests as an interest in working hard and not relying on charity – or welfare.

When progressives look at their opponents, they don’t realise the right has a different and legitimate moral framework. And when radical partisans of all stripes confront their opponents, they imagine a great political divide, and become more radical in response.

When we believe our values are the only possible ones, we make politics more hostile than it need be. We’re angry not because we think we’re all different, but because we think we’re all alike.

We Can’t Stop Climate Change – It’s Time To Adapt

The release of the Productivity Commission’s draft report into climate adaptation at the end of last month could have been a spark that changed the debate in Australia.

That’s because it implicitly suggested that adapting to climate change – regardless of whether its origin is anthropogenic, ‘natural’, or whatever – is now the main game.

And the PC is not alone. In the 2007 report of the Intergovernmental Panel on Climate Change, there was just one chapter on adaptation. The previous report in 2001 was the same: one chapter. Now, according to the outline of the 2013 report, the adaptation section will blow out to four chapters.

This new attention on adaptation makes sense. Nobody believes global emissions will be reduced to the extent the IPCC claims is urgent and necessary. Supposed deadlines for action have come and gone, over and over. By 2012, sceptics, alarmists, realists, and optimists should all agree that seriously mitigating climate change is a pipe dream.

So, given this, it was very disappointing the Productivity Commission’s draft report entered the public sphere with such a quiet thud last fortnight.

The mainstream press had a few short, passionless bites. The online specialty service Climate Spectator, which usually scrutinises every aspect of climate economics and politics, simply reposted a newswire report announcing the release. No further analysis apparently needed.

The final product will be released at the end of this year. But even in draft form, it starkly illustrates how much of a philosophical shake-up moving from a mitigation focus to an adaptation focus will be.

The PC’s report discusses worthy things like emergency management and information gathering. But its bulk argues this: in order to boost the resilience of Australian society, a rigorous program of deregulation, tax reform, and liberalisation is needed.

According to the PC, Australia needs economic growth and regulatory reform to deal with climate change. Yes, it is very disappointing this report didn’t get the attention it deserves.

As the PC says, regulations can make the economy inflexible. They make it harder for us to adapt to change. After all, individual regulations are written with certain circumstances in mind. When those circumstances change (as they would in a world with a shifting climate) the existing stock of regulations can add friction to adaptive action.

Other regulations increase costs and thereby reduce adaptation incentives – like those which meddle with insurance markets.

It’s the same with many taxes. The PC rightly says “taxes that influence the way resources are used … could inhibit the mobility of labour, capital, or both”. For example, property taxes make it more expensive to move out of low-lying areas at risk from sea level rises.

Government programs can also impede flexibility. Drought assistance creates an incentive for farmers to stay on marginal land, rather than relocating.

These are the practical issues. But an adaptation program is more than just a collection of policy recommendations. It is a different philosophy.

Rather than focusing on a single, over-arching, world-historical goal (achieved through unprecedented consensus and political action at the national and international level), adaptation focuses on process, institutions, and diversity. It asks: what makes communities most flexible, resilient, and responsive to environmental change? It’s about developing strategies to deal with uncertainty, not politics to achieve global reform.

In a 2009 paper published in the journal Atmospheric Sciences, Robert L Wilby and Suraje Dessai characterise this as the difference between top-down and bottom-up approaches.

The IPCC looks top-down. This view is purpose-built for mitigation, but no good for adaptation. The IPCC struggles to assess climate change risks on a continental scale, let alone regional scale.

As Wilby and Dessai point out, the IPCC records a low level of scientific agreement even about the direction of rainfall change in much of Asia, Africa, and South America. That degree of uncertainty offers no guide for practical action.

By contrast, a bottom-up approach focuses on how communities adapt to local pressures, not global ones. After all, it isn’t the United Nations that will adapt to climate change. It is individuals. This approach is less flashy, but then, why should climate policy be flashy?

And emphasising adaptive capacity and resilience is a good thing, regardless of whether climate change is a naturally occurring phenomenon or the result of human recklessness. Wilby and Dessai call adaptation measures “no-regret” or “low-regret”. The PC calls them “win-win”.

In his 1992 book Earth in the Balance, then senator Al Gore wrote that adaptation was a “kind of laziness, an arrogant faith in our ability to react in time to save our skins”.

Gore was writing when the IPCC was in its formative stages. This sort of thinking led to an explicit decision to focus on global emissions reduction. That decision has shaped the last two decades of climate debate. (Even including one chapter on adaptation in the 2001 report was seen as somewhat revolutionary.) But the decision built an analytical framework which no longer makes sense.

As a paper published in the journal Regional Environmental Change last year put it, under an adaptation-focused framework, “Science would thus place itself in the role of being a tool for policy action rather than a tool for political advocacy”.

Because the arrogance now rests with those who still believe they can coordinate massive, immediate global political action towards a single goal.

It is, surely, time to face up to the demands of adaptation.

Convergence Review Is Clever, Subtle … And Worrying

One pregnant sentence in the Convergence Review says, “It is important to note that the current Australian Press Council regime where members can opt out or reduce funding is not an acceptable situation.”

When the review’s draft terms of reference were released in 2010, nobody expected proposals to regulate ‘fairness’ in newspapers would form a core part of the review’s final report.

And that sentence’s claim – that voluntary press regulation is unacceptable, and regulation is necessary – undercuts the review’s repeated assertions that its “underlying approach [is] in favour of deregulation”.

The Convergence Review’s final report was released on Monday. Its task was to develop a framework whereby all media communications is regulated equally, regardless of whether it is distributed by radio, television, or the internet.

So it’s disappointing that the review got caught up in the swirling currents of vitriol between Rupert Murdoch’s newspapers and the Gillard Government.

The Convergence Review has proposed a new, mandatory agency to regulate “standards” in news journalism and commentary. In this, it offers a watered-down version of the proposals made by Ray Finkelstein in the Independent Media Inquiry earlier this year.

But Finkelstein Lite is also Finkelstein Possible.

Unlike Finkelstein’s proposal, this new body would not be a statutory authority, but “industry-led”. It would be funded by a mixture of private and government money. It would be analogous to the Australian Press Council, but no newspaper or broadcaster would be able to quit the new agency if they didn’t like the way they were being regulated – by law, membership would be compulsory.

And unlike the Finkelstein report’s proposal, it wouldn’t have an absurdly large jurisdiction. It wouldn’t catch those websites that had just 41 hits a day, or those tiny street magazines, or those email newsletters. Just the really big guys – Fairfax, News Limited, Ten, Foxtel, etc.

Indeed, the Convergence Review is a very clever document.

It avoids being too clear about what “sanctions” the industry-led regulator would have in its tool kit. And it is ambiguous as to how the regulator would enforce its sanctions. A short sentence buried in the report’s appendix suggests that enforcement would be “contractual” rather than legislative. This odd distinction raises many more questions than it answers.

But nowhere is the cleverness of the Convergence Review clearer than in a diagram which visually represents the media outlets that would fall under the jurisdiction of another new regulator – the “super-regulator” – which is to replace the Australian Communications and Media Authority. (The diagram is on page 12, for those playing along.)

Media organisations will have to meet certain revenue and audience thresholds to qualify. Those thresholds just happen to include all major newspapers and broadcasters, and they just happen to exclude all online media.

The thresholds have been drawn to make sure that Telstra, Apple and Google just fall just below them, and smaller broadcasters like Macquarie Radio Network and Grant Broadcasters pop just above. How convenient.

To be fair, this is thankfully a long way from the expansive plans of an interim convergence report released in December, which would have included everything except “emerging services, start-up businesses and individuals”.

But it’s pretty clear why the thresholds have been drawn so precisely. First: nobody wants to wake up to the headline “Gillard government’s plan to regulate the internet”. Second, and more critically: the Convergence Review doesn’t seem to have quite figured how converged regulation could actually work.

By deliberately excluding even the biggest websites, all the Convergence Review does is kick the ball down the court, and hope the super-regulator will take responsibility later.

It’s a neat way to avoid seriously rethinking the justification for old, legacy media regulations. And, given the Convergence Review’s focus on political feasibility above all else, it helpfully avoids upsetting the status quo too much.

Take for instance the Australian content requirements currently imposed on broadcasters. Sure, it would be tough to ween the culture industry off those long-standing subsidies. But it will be even tougher to shoehorn those requirements into the online world.

The best the Convergence Review can do is offer future online media outlets that provide “professional television-like drama, documentary or children’s content” an option to be taxed to support a “converged content production fund”.

Right now this is all hypothetical, because the Convergence Review draws its thresholds just above Telstra, Apple, and Google. Good decision. Another unhappy headline would be “Gillard Government to introduce internet tax”. But that is the practical upshot of its proposals … just not yet.

For the Government, the Convergence Review has the advantage of being possible to implement. It’s Conroy-ready.

But like Finkelstein’s proposal, the Convergence Review recommends a substantial intrusion into the free press.

Yes, not every little blog will be wrapped up in its regulatory arms. But it would still impose a regulatory body on newspapers, with some unspecified coercive powers, overseeing what is printed.

Don’t be deceived by the claim that the standards body would “industry-led”: it would be a compulsory regulator administering compulsory regulation. There is a world of difference between that and the currently voluntary Australian Press Council.

The authors of the Convergence Review have gone to a lot of effort to make their report subtle, not-too-obvious, politically feasible, and to avoid obviously upsetting the status quo.
But that shouldn’t be any comfort for those of us who still value freedom of the press.

Manufactured Crisis

Ford has announced a week-long production halt in Australia. Toyota is mired in a labour dispute. But is Australian manufacturing in trouble? No. In fact, it’s thriving. Not that you’d know that from most commentary or political debate, which suggests that manufacturing is falling off a steep cliff. No matter how much taxpayer money we hand to the car industry, it is always flirting with collapse. For decades, the nightly news has told ominous tales of factory closures.

These stories mislead. Australia is by far a more successful, efficient, profitable manufacturing nation now than it was in the 20th century. When Kevin Rudd famously said in the 2007 election that he wanted to be prime minister of a country that “made things”, Australian manufacturing was already making more things than it ever had.

Over the past 60 years, the output (that is, the making of things) of manufacturing has increased fourfold, according to the Productivity Commission. Sure, that output has dipped about half a per cent since 2008. But blame the (temporary) global recession.

So why the big fuss? Well, the debate over manufacturing has never really been about manufacturing. It’s never been about economics or prosperity or even employment. The manufacturing fetish is nothing more than a marriage of nostalgia and special interests.

Manufacturing may be doing well but it holds a declining share of the total economy. Service industries are growing quicker and assuming the pre-eminent place.

People find this change hard to grapple with. Perhaps understandably. Factories are as much cultural icons as they are venues for production. For two centuries, the factory was an emblem of Western prosperity. Factory jobs were stable, well-paid, and open to all.

Our culture and politics reflected this. It was the factory wage for a married family man that underpinned our protectionist industrial relations system. Pre-war consumer advertisements tended to feature factories more prominently than the products.

By contrast, modern service industries are more diverse and less tangible. But productive work is productive work. What should it matter if we make a dollar’s worth of tractors or code a dollar’s worth of websites?

Preconceived ideas of what constitutes a healthy economy don’t disappear overnight. Especially when they’re promoted by union-tied politicians and lobbyists.

Announcing the federal government’s manufacturing taskforce last year, the then innovation minister Kim Carr said the government needed to “ensure manufacturing remains a key part of our economy for generations to come”.

That might be Labor’s priority, but it shouldn’t be ours.

The number of people working in manufacturing is a declining share of the total labour force. That’s a big political problem for the ALP. Many Labor politicians draw their support from the old industrial unions.

These unions are now less the vanguard of the proletariat, and more ageing, derelict fiefdoms. They are still able to depose prime ministers, sure, but that’s about it. The dysfunctional union-Labor relationship creates the perfect environment for dirty deals to flourish; hence the steady stream of cash the government sends the car industry’s way.

Immediately after Prime Minister Julia Gillard fended off Kevin Rudd this year, the unions were calling on her to keep manufacturing jobs from going overseas. They want some reward for their support.

But the unions are wrong. Jobs aren’t going overseas. Larry Summers, former economic adviser to US President Barack Obama and no free-trade ideologue, has pointed out that even in China manufacturing jobs are in long-term decline. It isn’t foreign competition, offshoring or the high dollar shrinking the relative importance of manufacturing. It’s technology.

This is great. Not all factory jobs are good jobs. Why have 10 people do a mind-numbing repetitive task that could be done by one machine?

In the future Australia may no longer assemble cars. Robots will. But we will design the cars. We will design, program and build the robots. We will construct the most intricate, high-value components that require the best technicians to produce. We’ll then ship everything off for final assembly in a lower-skilled country.

The industrial revolution was propelled by technological change. “De-industrialisation” is propelled by the same.

Even in some shrinking sectors of manufacturing there are niche Australian successes – particularly those areas that require high skills and high precision. But nimble niche industries won’t furnish the unions with a secure power base.

What to make of the claims that we need domestic manufacturing for national security?

Put aside that we have a vibrant manufacturing sector already. If a war came that forced us to make all our tanks – that is, if the global arms market was suddenly closed to America’s closest friend – the state of our car industry would be neither here nor there. We’re going to lose that war.

That this apocalyptic scenario is a foundation of the case for manufacturing subsidies just shows how desperate the industrial unions and the ALP are.

Manufacturing will never be the linchpin of the Australian economy. Nor should it. The sooner we get over our manufacturing obsession, the sooner we’ll be able to embrace a richer, more modern Australia.

Reward Welfare A Recipe For Entitlement Culture

Joe Hockey has been badly verballed. His widely reported speech about Western entitlement culture, delivered in London last week, contains virtually none of the claims attributed to it.

Hockey’s speech is another contribution to that small, odd genre of speeches where Australian politicians travel to Europe to inform Europeans how stuffed their economies are.

The victims in his tale were American, British, and European taxpayers – not Australian ones.

There’s nothing in the speech to suggest he wants to eliminate the welfare system in Australia, as some have claimed, or reduce spending on health or education.

Indeed, Hockey thinks Australia is nearly a paragon of virtue. Sure, we have “not completely avoided” excessively high spending, says the shadow treasurer, but we have reduced spending “to manageable levels”.

In a combative interview on Lateline afterwards, he told Tony Jones:

We need to compare ourselves with our Asian neighbours where the entitlements programs of the state are far less than they are in Australia.

Well, of course we do. Small government means low taxes. Businesses find low taxes attractive. If we, as a nation, are to “compete” with our neighbours, we’d better be offering something more than a profligate welfare system. Restraining company and income taxes has to be a key part of that.

Hockey said Hong Kong’s “highly constrained public safety net may, at times, seem brutal” – this is not high praise, and certainly not a recommendation we imitate it.
So why did the speech spark such fury?

Yes, Hockey gave it a grandiose title – ‘The End of the Age of Entitlement’ – virtually begging to be over-analysed. Tony Jones doggedly tried to pin Hockey down on how Australia would look in a post-entitlement age. But at most Hockey volunteered that “we need to be ever vigilant”.

This isn’t much to base a controversy on. Surely, after the past few years, a more vigilant government isn’t a bad idea.

So lots of smoke, but no fire.

At least, no fire where everybody was looking. Hockey’s speech was not without a domestic purpose. It seems clear he did not intend to propose changes to Australia’s existing policy settings, but to stem future ones.

The ‘age of entitlement’ thesis is a none-too-subtle contribution to the simmering debate within the Coalition about what philosophy will drive a future Abbott government.

The Institute of Economic Affairs, where he gave the address, isn’t your run-of-the-mill free market think tank. It is one of the most influential and iconic in the world, borne out of a conversation between its founder, Antony Fisher, and the great economist Friedrich Hayek. It’s the perfect place to stake a claim as a free marketeer.

And no Howard-era policy is more regretted by the free marketeers within the parliamentary Liberal Party than the former prime minister’s embrace of middle-class welfare.

Yes, by international standards, Australian middle-class welfare is low – the lowest, in fact, in the OECD. But that’s not the point. It is a symbol of the two different visions of Australia’s future on the centre-right.

The contest between free marketeers and big government conservatives rages across lots of policy areas – from free trade to cheap milk to labour market reform – but, overwhelmingly, it is in middle-class welfare that it is most sensitive.

Hockey’s boss Tony Abbott is a big fan of the Howard social spending program. Abbott’s manifesto, the 2009 book Battlelines, goes into great detail defending universal family payments.
In the Opposition Leader’s view, “supporting women who have children should be one of the important duties of governments”.

Abbott frames the debate as between those who see having children as a personal choice and those who see it as a social good.

I argued in the Drum last year that when the Labor Party inherited Howard’s social policies after the 2007 election, they changed their justification.

Where the Coalition had spoken of middle-class welfare as a tool to shape society according to conservative values, Labor simply presented things like the baby bonus as a reward for families working hard.

The importance of Hockey’s London speech becomes apparent when we identify a subtle shift in Coalition and government rhetoric on this subject over the twelve months.

Labor’s policy agenda is increasingly focused on means testing. Abbott is starting to adopt some of the “reward” language in response. He has said means testing the baby bonus is an “attack on middle Australia”.

Such an argument – and it’s really a moral argument – contrasts sharply with the more practical, policy-oriented claims he made in Battlelines.

In this context, Hockey’s thesis about the end of an age entitlement has resonance.

Of course, there’s a big difference between professing a philosophy in opposition and pursuing it in government. Especially when your leader has other ideas.

But Hockey’s right. If governments hand out money simply for working hard – or if oppositions suggest that taking such handouts away is a personal affront to families – Australia will very quickly grow an entitlement culture to rival that of Europe’s most moribund economies.

Sport As Propaganda: Bahrain’s Vile Grand Prix

The relationship between international sporting events and repressive governments can be truly vile. The latest reminder of this is the decision by Formula One to hold the Bahrain Grand Prix for 2012 this weekend.

The race will be held smack in the middle of daily protests against the Bahrain regime – a regime which is trying to avoid being washed away by the same pro-democracy tide that has seen the end of many of its autocratic neighbours.

Formula One cancelled the event in 2011 because the Bahraini government was violently cracking down on pro-democracy demonstrations. Since then, the regime has tried to rehabilitate itself.
Bahrain wants to stay one step ahead of the Arab Spring. It commissioned an independent inquiry into allegations of torture and violence during the crackdown. The inquiry reported in November last year, and recommended a range of modest judicial and policing reforms.

But Bahrain shouldn’t get off that easily. There are still 14 opposition leaders and hundreds of others in prison for participating in last year’s protests. There are still daily clashes between protesters and police. There are still continuing human rights abuses. Foreign reporters still have their entry into the country strictly limited.

The Bahrain Centre for Human Rights says there have been 31 deaths – including three from torture – since the independent inquiry released its recommendations.

Yet Formula One head Bernie Ecclestone claimed last week: “There’s nothing happening. I know people who live there and it’s all very quiet and peaceful.”

Bahrain’s rulers are using the Formula One race to rebuild their reputation. The race is part of a “normalisation” campaign. It provides the cover by which Bahrain can present a stable front to the world – and avoid serious reforms.

Yet the relationship between Bahrain and Formula One is hardly unusual. Repressive states have long recognised that international sport is a potent propaganda tool.

The granddaddy of international sporting contests, the modern Olympics, has long been a friend of tyranny. Virtually from birth, the Olympics was studiously, and shamefully, neutral about the political environment in its host countries.

During the Berlin Games of 1936, the Olympics’ founder, Pierre de Coubertin, described the “Hitlerian” elements of that event as a merely the happy by-product of Germany celebrating “in accordance with its own creative powers and by its own means”.

Supporters of the Olympics’ bizarre ideology say its political know-nothingism would be better described as “universality” – a belief that all people of the world are entitled to participate in the Olympics, no matter what political system they have chosen.

But as one historian has written: “What this has meant in practice is that the [International Olympic Committee] has turned a blind eye to any sort of political crime committed by a member of the Olympic movement.”

Jean Todt, the president of the Fédération Internationale de l’Automobile, said this week that he and Formula One were “only interested in sport, not politics”.

He might be, but his hosts are not. For repressive governments, the purpose of holding an international sporting event is simple: it confers political legitimacy and the approval of the foreign press.

Todt may imagine otherwise, but for host governments, international sport is entirely about politics.

When Moscow hosted the Olympics in 1980, it was an occasion to impress the world with Soviet superiority; when Beijing did the same in 2008, the Chinese regime used the Games to show off its “socialist modernisation” project.

One infamous example of this phenomenon is how the brutal Argentinian military junta used the 1978 World Cup to solidify its domestic and international position.

The junta had seized control of the country just two years earlier. It immediately directed its propaganda efforts to the Cup, as well as 10 per cent of the national budget. Indicatively, one of the new regime’s first priorities was to improve the foreign journalists’ accommodation for the upcoming event.

The glamorous World Cup was held in the middle of Argentina’s Dirty War, where tens of thousands of people were being murdered by the state.

The protestations that international sport is above tedious national politics are doubly false when we consider the money those governments pay to host major sporting events. States are willing to spend big on premium carnivals. And a cosy relationship with host governments is a key part of international sport’s business model.

When it comes to human rights violations in Bahrain, Formula One cannot pretend to be neutral.

Amnesty International says “the human rights crisis in Bahrain is not over”. The International Crisis Group says Bahrain is “sliding toward another dangerous eruption of violence”.

And it’s hard to disagree with Human Rights Watch when it says the Formula One race gives Bahrain’s rulers “the opportunity they are seeking to obscure the seriousness of the country’s human rights situation”.

If so, Formula One has to take some responsibility.