The Abbott Government’s Real Problem Is That It’s Not Ideological Enough

The Abbott Government is getting bad reviews. This week’s two year anniversary offers a neat little hook for members of the press gallery to take stock of the Government’s performance.

Among the unforced errors and stumbles, we read that the Abbott Government is far too “ideological”. In an encyclopaedic piece, the Guardian’s Lenore Taylor bemoans their “ideological overreach”. This is indeed an old complaint. This time last year Liberal Party strategists were counselling the government “no more ideology”.

But if the Abbott Government is too ideological, then its ideology is of a new species hitherto unknown to political taxonomists.

It’s an ideology that prioritises convenience over consistency, and refuses to spell out the principles which guide its decision-making. That is, the Abbott Government appears to have no distinct “ideology” at all.

One should not be too critical of a government for failing to hem to abstract doctrine – democratic government functions through compromise and conciliation. Political philosophy has to give way to practicality.

Yet even on these forgiving standards, it’s hard to see what picture of the world – or vision of the future – animates the Coalition.

The Government’s apparent “war” on the ABC is often used as Exhibit A for its ideological fervour. This began very early in their term. It seems to have reached its zenith with the prolonged Zaky Mallah affair.

Yet consider the absence of any consideration in this “war” of the role of public broadcasting in an age of media diversity, any critique of the media as a public good, or even a simple comment on the trade-off between ABC funding and lower taxes.

Rather, the Government’s critique of the ABC seems to be nothing more complex than that the public broadcaster has too many left-wing journalists and is insufficiently pro-Australia. Perhaps fair enough. But if this counts as “ideology”, then it is a superficial and empty ideology.

The irony of the Zaky Mallah affair was that it trivialised the substance and intractability of the modern terror threat by making it about the internal organisational structure of the ABC.

A keener focus on the principles at stake – that is, a more ideological approach – might have left the Abbott Government looking less like it was defeated by a chat show.

Taking a more ideological approach in each of these cases would have made the Government seem less obviously self-interested.

Nor has the criticism of the Human Rights Commission chief Gillian Triggs been obviously connected to any ideological perspective on human rights or the Human Rights Commission. The early promise of a debate from the top about the nature of human rights that was the appointment of Tim Wilson to the commission and the establishment of the Law Reform Commission’s inquiry into “traditional rights and freedoms” has gone unfulfilled.

Likewise, any pretence of a serious industrial relations agenda has been abandoned to focus on the Trade Union Royal Commission. The royal commission has revealed some serious wrong-doing in the union movement, and continues to highlight the Labor Party’s relationship with unions. But it is hardly a substitute for a debate about how much the state should be involved in workplace contracts.

Taking a more ideological approach in each of these cases would have made the Government seem less obviously self-interested.

Exhibit B for too-much-ideology is the 2014 budget. Here we have to distinguish between the Commission of Audit – which reported just before the budget was released – and the budget itself.

At the time, the two blurred into one. And it is certainly the case that the Commission of Audit was deeply ideological, in the sense that it applied philosophical principles to policy questions, and did so in a way hopeless ideologues like myself could admire.

But there was little trace of that ideology in the budget.

If Christopher Pyne’s legislative agenda is too ideological for the Australian public to forgive, then the scope of future reform is truly limited.

The two standouts in the budget were the $7 co-payment and the higher education reforms. Only the latter was really ambitious. The Government made the former seem more ideological than it was. For all their banging on about a “price signal”, the co-payment revenue was to be funnelled into a research fund. This hardly counts as devolving health provision to the market mechanism. Neoliberal Friedmanism it ain’t.

Credit where credit is due for higher education. This was – or still is to be – a significant change to the way higher education is funded.

Yet it’s hard to see how the reforms being proposed are really of an order of magnitude greater than previous market-based reforms to tertiary education under past Coalition and Labor governments.

If Christopher Pyne’s legislative agenda is too ideological for the Australian public to forgive, then the scope of future reform – from any side of politics, on any philosophical grounds – is truly limited.

Ideology is of course endemic to all human thought. We all have our frames through which we understand the world. A non-ideological person is a conceptual impossibility.

Yet it is not ideological overreach which plagues the Abbott Government. The Coalition lacks exactly what a clearly ideological approach would give them: not just consistency or narrative, but purpose.

I know nobody who manned polling booths for the Coalition in 2013 in order for Joe Hockey to introduce first a deficit levy, then (as is now being seriously proposed) swap a higher GST for lower income taxes.

Two years into their three-year term, voters must be scratching their heads wondering what this Government is for. That is not a sign of too much ideology. It’s a sign of too little.

Free speech lost in translation

Ten years ago in September 2005, the Danish newspaper Jyllands-Posten published twelve cartoons and sparked what the Danish prime minister described as the worst crisis in Danish foreign policy since the Second World War.

In his book, The Tyranny of Silence: How One Cartoon Ignited A Global Debate on the Future of Free Speech, Danish journalist Flemming Rose compellingly outlines what happened, and what the events meant for the fight for liberty in free and unfree countries.

In 2005 Rose was the culture editor of Jyllands-Posten. He commissioned and published the cartoons in his section of the paper. And it was Rose who, more than anyone else, bore the brunt of the backlash — as well as being the most prominent defender of the decision to publish. First published in Denmark in 2010, his book was written at first to justify his actions and respond to critics. It has just been republished by the American free market think tank the Cato Institute, but developed into a longer discourse about free speech and censorship.

The purpose of the cartoons was to take a position in favour of free expression, and to editorialise against self-censorship in Denmark. The Jyllands-Posten editorial team were interested in the fact that a Danish children’s author, Kåre Bluitgen, had only been able to get an illustrator for his book on the life of Muhammad if the illustrations were done anonymously. In the middle of a Danish debate on self-censorship, this was an opportunity for the paper to take a stand: not a stunt, or an experiment, but a statement of principles.

Most strands of Islam are aniconic: that is, they oppose the depiction of images of their god and their Prophet Muhammad. Yet the question facing Jyllands-Posten was not whether Islam, as practiced in by Europe’s muslim migrant communities or the Islamic world, was aniconic. Rather it was whether the prohibition on depicting Muhammad was to be applied to non-Muslims in a non-Muslim country. Some potential illustrators for Bluitgen’s book had contacted Islamic religious and academic authorities in Denmark, who had given the project an all clear (at least one of those authorities, Rose notes, took a lead in the anti-cartoon reaction).

The twelve cartoons were published on 30 September 2005. Not all of them depicted Muhammad. At least two caricatured Kåre Bluitgen, suggesting the whole affair was a publicity stunt. Another was of a school child going by the name of ‘Mohammed’ — implicitly mocking Jyllands-Posten. But the most provocative cartoons directly connected Muhammad with terrorism. One — possibly the most iconic — was a picture of Muhammad’s face with a lit bomb in his turban. On the bomb was the Islamic creed ‘shahadah’. Others cartoonists offered more neutral portraits. One showed a cartoonist looking over his shoulder as he nervously drew the Prophet — also a comment on the Jyllands-Posten commission about free speech. All the cartoons were printed around a comment piece by Rose discussing the cartoons’ publication as a statement against self-censorship and in defence of freedom of speech.

In 2015 political backlashes are almost instantaneous. The cycle of outrage, counter-outrage and resolution can be completed within 24 hours. Ten years ago — that is, before social media drowned out the public sphere — political outrage took more time to build up.

Some newspaper sellers declined to sell the issue of Jyllands-Posten on the day. A few days after the publication, a group of Muslim leaders and activists agreed to take political and legal action against the paper. Two weeks later 3,500 Danish Muslims peacefully protested the cartoons’ publication. And there the reaction stalled. As the Danish scholar Jytte Klausen writes, ‘there was no groundswell of support for the mosque activists and imams who led the charge against the newspaper and the government in Denmark.’

It was the international events that brought the crisis to a head. As part of their political campaign against the paper, the Danish imams had petitioned the ambassadors of Muslim countries in Denmark to raise the cartoons as a diplomatic issue with the Danish government. In October 2005, a diplomatic protest was lodged by the ambassadors of eleven countries, including Turkey, Saudi Arabia, Iran and Indonesia. Their protest was acknowledged by the Danish government. But the Prime Minister Anders Fogh Rasmussen, head of a centre-right coalition, affirmed the paper’s right to free expression.

Feeling themselves unsupported, the imams decided to directly appeal to Middle Eastern governments. In December 2005, they travelled to Cairo armed with a dossier that included the cartoons.

The imam’s dossier — all 43 pages of it — was probably the most inflammatory part of the entire affair. It included not just the cartoons and translations of Jyllands-Posten’s editorials on Islam and self-censorship, but other material as well. There were abusive letters which the imams said had been sent to Muslims in Denmark. There were clippings from other papers, images completely unrelated to Denmark and Jyllands-Posten, unsubstantiated and inaccurate claims about the relationship between Denmark and its Muslim community, and a host of other material designed specifically to rile up Muslim readers. According to the secretly recorded statement of one of the Danish clerics, the dossier was intended to ‘create a climate of hate against the newspaper, God willing’.

In this, the dossier was a great success. The result of the fundamentally political decision to create a dossier that exaggerated and distorted the actions of Jyllands-Posten was devastating. Throughout February 2006 — more than four months after the publication of the cartoons — protests and riots erupted throughout the Muslim world. The targets of ire were not just symbols of Denmark but other countries whose newspapers either reprinted the cartoons or were generally presumed to be in league with the anti-Muslim sentiment contained within. The Danish embassy in Damascus was stormed. The European Union offices in Gaza were stormed. Riots occurred in Iraq, Afghanistan, and Pakistan. In Nigeria, protestors attacked and burned down local Christian churches. Some estimates suggest that globally 200 people lost their lives in the aftermath of the cartoons’ publication.

In Denmark, Rose and the cartoonist Kurt Westergaard were the subject of numerous death threats and assassination plots. One particularly close call occurred when a Somali man invaded Westergaard’s home with an axe and a knife. Westergaard hid in a panic room until Danish police shot and wounded the man, who was linked to a radical Islamist group. Other plots disrupted include attempts to attack the offices of Jyllands-Posten — a disturbing foreshadowing of the devastating Charlie Hebdo attack earlier this year.

The Danish cartoons crisis has, in light of subsequent events, taken on a deeper meaning. But in 2005 the political undercurrents of clerical aniconism seemed to be at the forefront. The Danish imams were playing Danish politics when they compiled their dossier of grievances. One cleric had been particularly incensed with Jyllands-Posten for publishing details of a sermon he had given in which he described women as the devil’s work. He saw the cartoons as an opportunity for some payback.

Likewise, the governments of Saudi Arabia and Iran had their domestic audience in mind when they lodged their Danish protests. The violence emanated primarily from within Muslim countries and not from Muslim migrants in Denmark. Local riots always have local causes. Attacks on Christians in Muslim-majority countries were as much driven by local prejudices as anything else.

In some countries — such as India and Pakistan — extremists used the existence of the cartoons as a way to destabilise domestic regimes. Other protests were sponsored by the governments of Iran and Syria to underline their own regimes’ religious piety.

One notable aspect of the Danish crisis is the relationship between Jyllands-Posten’s decision to publish the cartoons and the blame laid by critics on the Danish government. How does a feature in an independent newspaper so quickly become a question of diplomacy between national governments? We are used to political leaders sharing their views on the non-political scandals of the hour, but the Danish imams and the eleven Muslim governments were after more than just a side-comment by Prime Minister Rasmussen. They wanted a legal and political response.

The principle of a free press not subject to direct controls by the government of the day is a liberal one. Yet this liberal idea is not internationally unanimous. The countries that protested so vigorously against the cartoons do not share the ethos of the free press. Saudi Arabia, Egypt, Pakistan, Iran impose the death penalty for blasphemy. Turkey, Indonesia, Libya and Morocco also impose judicial punishment for blasphemy. Perhaps what the world saw in 2005 and 2006 was an international clash between two societies. The virtues of free expression were lost in translation.

And yet this explanation is too simple. Freedom of speech is hardly an overriding concern in the West either. One need only look at the repeated legal actions taken against Charlie Hebdo to see that. Or indeed, against Jyllands-Posten. Denmark has a blasphemy law which prohibits the public ridicule of a religious community. Denmark’s blasphemy law is a criminal law, rather than a civil one. The committee of imams complained to the police that such a violation had occurred, but the outcome of the police investigation was that the cartoon publication would be protected by exceptions covering matters of public interest.

What messages do such laws send? They suggest that religious insult is a matter for state supervision. Moreover, they imply that the bounds of public discourse should be determined by legislation, and that the proper response to offensive newspaper publications is to approach the police. No wonder the immediate appeal of the imams — and the foreign governments — was directed to the Danish government.

Hate speech and blasphemy laws undermine the liberal firewall that exists between individual expression and the views of society as a whole. Once we have established the principle that the nation can prevent offensive speech, it is unsurprising that people blame the nation for having failed to prevent offence. Rasmussen’s response to the diplomatic protest stated that: The freedom of expression has a wide scope and the Danish government has no means of influencing the press. However, Danish legislation prohibits acts or expressions of blasphemous or discriminatory nature. The offended party may bring such acts or expressions to court, and it is for the courts to decide in individual cases.

Pleading the fundamental right to freedom of expression simply looks false when blasphemy and hate speech laws are sitting on the statute books, waiting to be used. In the wake of the Charlie Hebdo massacre in January 2015, world leaders, foreign ministers, ambassadors and other dignitaries gathered in Paris to take a stand against Islamist violence. Linking arms they walked solemnly down a Parisian boulevard, looking as if they were leading the protest marches that had brought more than a million people onto the streets in Paris that day.

In fact, this was an illusion: the famed photo-op was conducted in an otherwise empty and secure side-street, far away from the crowds. More egregious, and more suggestive, was the fact that many of the leaders who attended the protest apparently in defence of freedom of expression were in charge of countries that aggressively stifled expression at home. Take, for instance, Sameh Shoukry, the foreign minister of Egypt, marching at the very time that Al Jazeera journalists, including the Australian Peter Greste, were locked up in a Cairo prison. So too was the Russian foreign minister — envoy to a country that targets journalists and whistle blowers for criticising the government.

Even Western, liberal leaders like David Cameron and Angela Merkel preside over laws that prohibit and punish hate speech. And Australia, of course, has section 18C of the Racial Discrimination Act. After the Charlie Hebdo killings Tony Abbott argued rightly that ‘from time to time people will be upset, offended, insulted, humiliated … but it is all part of a free society.’ Yet our legal system does not reflect this basic liberal principle.

Speech laws, we have been told time and time again, play as much a symbolic role as a practical one; showing who we are as a nation, the language and sentiments we will not tolerate.

Rose’s Tyranny of Silence is especially good when it contextualises the cartoon crisis in the long historical contest over individual liberty and dissent. As a journalist, he spent a great deal of time talking to Soviet dissidents who wanted the same sort of liberal freedoms enjoyed in the West. Many Muslims now want the same freedoms but are prevented from expressing their desire by a stultifying public sphere in Islamic countries and the aggressive political dominance of radical Muslim ‘spokesmen’ in the West.

As Rose points out, Western liberalism’s weak and hesitating defence of free speech is not only a poor defence of its own values, but it abandons liberals in the Muslim world who are looking for alternative political paths. There are many human rights activists in the Muslim world crying out for the liberties which we now bargain away in the mistaken name of ‘toleration’.

Defending freedom of expression is not some academic preoccupation. It is fundamental to our idea of ourselves — to our liberties, and ultimately, to our civilisation.

The end of history in Australian universities

Every country has national myths and legends — vague memories of the past that add up to a sense of national identity. For Australia, think Gallipoli, the union strikes of the 1890s, the austerity of the Great Depression, and soon.

This populist historical awareness has practical consequences. How Australians understand, for instance, the causes and significance of the Great Depression has shaped how they understand the modern economy. There is a good case that Kevin Rudd and Wayne Swan were driven in 2008 by a fear of becoming James Scullin, the Depression-era Labor prime minister whose economic failings made his a one-term government.

Likewise, the place of Gallipoli in the national mindset is an ongoing contest that implicitly relates to our modern debates about foreign policy, our alliances, and military commitments.

History matters, not just for its own sake but for the way it reflects back to the present. We are constantly looking for our origins, in the hope they will somewhat hint at our future.

In July 2015, the IPA released a major report, The End of History … in Australian Universities. The goal was to understand how history is understood by looking at what academic historians pass on to the next generation. Few undergraduate history students go on to be academic historians, of course. But many become secondary school history teachers, and the rest constitute a cohort of formally trained historians, regardless of whether they practice the profession of history writing and research after graduation.

Underpinning this report was our creation of the first complete database of history subjects taught at the undergraduate level in Australian colleges and universities in 2014 — all 739 subjects, taught at 34 separate institutions. We categorised the subjects according to their geographic focus, the historical period they looked at, and their ‘theme’.

Indeed, this is something that the historical profession itself should be, and has been, interested in. Our research was based substantially on the work of a report last published in 2004 by the Australian Historical Association (AHA). The categories were largely theirs, and the notion of a traditional canon was likewise derived from the AHA. Thus we could make some useful comparisons not just about the state of undergraduate history today, but how it has changed.

Our most dramatic finding was that out of 739 undergraduate history subjects, there were just fifteen that specifically focused on British history. Those fifteen subjects were spread between just ten different institutions. In other words, there are 24 history faculties in Australia that do not offer any British history to undergraduates. This is quite striking. It is not an exaggeration to say that the institutions that make Australia what it is today were imported wholesale from Britain. We inherited our liberal democracy, our market economy, our emphasis on individual rights, the common law, and our public ethic of toleration from Britain.

What institutions we did not directly get from Britain we adopted from other British colonies — for instance, Australian federalism was modelled on the American and Canadian examples. Yet British history is in precipitous decline in Australian undergraduate history faculties.

So what has replaced it? For a long time undergraduate history subjects have tended towards specialisation. Rather than broad, ‘survey’ overviews of historical periods of nations and civilisations, even many first year subjects direct their focus to narrow, thematic topics. For instance, it is common to find the history of human rights, or environmental history, or genocide. To be certain, many survey subjects remain. But the era of systematic historical undergraduate knowledge is largely over. More universities teach popular culture than intellectual history. Film history is offered at more universities than British history.

Specialist subjects are necessary and valuable. Indigenous history is important. The history of gender and sexuality matters. The history of film is fascinating. But is it proportionately more important than Australia’s institutional history?

British history is worth dwelling on for no other reason than its role in the establishment of Australian institutions. Its absence says perhaps less about the interests of students and teachers at universities than about the way we understand the role of the history and our relationship to the past.

Some clue to this is found in the fact that history courses were overwhelmingly dominated by subjects on twentieth century history. Of 739 subjects, 308 focused on the twentieth century. Just 189 covered the later modern period, which we define as 1788 to 1900. Indeed, if we exclude ancient history subjects, which in many institutions are offered in separate courses, then there are more discernibly twentieth century subjects than the rest of the historical periods combined.

One of the most influential books in the study of history was published by the University of Cambridge historian Herbert Butterfield: The Whig Interpretation of History, published in 1931. Butterfield’s book — more of an essay — is often cited but rarely read. Butterfield criticised what he called ‘Whig history’, which, as it has come to be popularly understood, implicitly depicted history as a series of progressive advances giving us the world we are today.

The Whig Interpretation of History is stirring polemic but it sparked a small cottage industry of work which has been trying to determine the specific nature of this Whig history that Butterfield wished to avoid. For instance, the only ‘Whig’ historian he mentioned was the conservative Lord Acton.

In fact, Butterfield’s argument was much bolder. He is critical of all history that interprets the past in the light of the present. He is critical of abridgement and short-cuts in historical narrative — indeed, in Butterfield’s opinion the more history is condensed for the reader’s benefit, the more Whiggish it inevitably becomes.

It is hard to disagree with the claim that historical events should be understood in their own context, as they were understood at the time and, at least ideally, without importing anachronistic frames of reference from our own age. Yet Butterfield flirts with the notion of history as being almost entirely disconnected from contemporary concerns. The historian should look for discontinuities. The study of history is the practice of alienating oneself from the present, searching for distances, not closing gaps.

In many ways, as the historian Marshall Poe writes, Butterfield’s argument is a neat polemical summary of the almost always unstated philosophy that underpins modern historical practice: ‘It can easily be demonstrated that these traits — what we will call discontinuity, empiricism, and neutrality — are indeed not specific to Butterfield’s thought, but are in fact the most basic ontological, epistemic, and ethical standards of modern historical writing.’

By empiricism, Poe means the commitment to sources and evidence on which historians rest their judgment. Neutrality refers to research objectivity — in practice, an ethical ideal to strive for. Of the three, discontinuity has the most significance. The lesson here is that there are so many differences between our time and the past, that to compare the present to the past is to mislead. For instance, in our book Magna Carta: the Tax Revolt that Gave us Liberty, we describe the complex mixture of thirteenth century fees and charges and financial payments between vassals and lords and barons and kings, as taxes. It might be said, as indeed some historians have said, that such a description is anachronistic. To call these payments ‘taxes’ is to apply modern ideas about citizen-government fiscal relations in an era where they not apply. In thirteenth century England, the state did not levy taxes for public goods.

Yet acknowledging the conceptual distinctions between tax in our time and the network of levies and charges of eight hundred years ago does not preclude us from identifying relationships between our system and the past, and between medieval England and other medieval societies.

A more radical position which can be drawn out from Butterfield’s anti-Whig philosophy is a rejection of the notion of ‘origin’ stories in history. When discussing the Magna Carta, perhaps more consequential generalisation concerns the origins of parliament. One Chapter in the Magna Carta prohibited the king from imposing ‘scutages’ and ‘aids’ without the common counsel of the kingdom. Over time, this evolved into parliamentary control over taxation.

But in its specific, discontinuous context it does not. Is it right to say that this was the origin of parliament as we know it today? There were so many specific and diverse inputs into the evolution of parliament that perhaps to do so is an anachronistic and ahistorical confusion, imposing categorisations where none can apply.

Butterfield clearly did not hold fully to the philosophy expressed in his most famous book. One of his other books was titled The Origins of Modern Science. But the approach he counselled — to seek alienation to understand the past — has, it seems, left its mark.

While it is true that much university history teaching is about the acquisition of profession skills — assessment of evidence, scholarly writing and so forth — the bulk is about passing on knowledge of history. And while professional historical practice does require the historian to try to place themselves in a world different to their own, the task of teaching history is different from ‘doing’ history, just as expression is different to thought.

We do not make the world anew every generation. Our institutions, our ideas, our attitudes, our culture, are all historical, in that they are derived from the past, but are not of the past. If every past culture is alien — if the discontinuities of the past outshine all else — it might seem of no consequence whether British history is taught or not. But the historian lives in the present. History students live in the present. We are interested in history because of the present. Origins matter.

The anniversary of the First World War has sparked a broad cultural conversation in Australia about the meaning of Australia’s participation in that conflict, the Anzac legend, and the nature and symbolic representation of Gallipoli. That conversation is happening in public. When young people flock to the Dawn Service or travel to that famous Turkish peninsula, they are participating in a debate about the meaning of Australia’s past.

And when 49 per cent of Australians between 18 and 29, when asked by the 2015 Lowy Institute poll, cannot agree that democracy is preferable to any other form of government, they are implicitly engaged in a dialogue with Australia’s liberal democratic past, where those liberal democratic institutions came from, and the value we put on them.

There are reasons to be optimistic. The popularity of history in our bookshops, the engagement with the Anzac tradition, and the increasing localised historical awareness (symbolised by the explosion in family histories) shows an Australian public desperate to understand their roots. The history profession is keenly aware of this popular demand. Yet that demand is about origins, not discontinuities.

As Edmund Burke wrote, ‘People will not look forward to posterity who never look backward to their ancestors.’ But then again Burke was, as A.J.P. Taylor put it, a corrupt ‘Whig hack’.

ChAFTA: Union Campaign Misses The Point

The union campaign against the China-Australia Free Trade Agreement (ChAFTA) is a mixture of misinformation, confusion and xenophobia.

But it does hide an uncomfortable truth. Labour market protectionism encourages the exploitation of foreign workers. We’ll come to that shortly.

The ACTU argues that ChAFTA will “shut out locals from jobs”. They point to three controversial provisions.

The first is the elimination of labour market testing for Chinese workers in the 457 visa program. Labour market testing requires employers to advertise locally before they employ foreigners on in 457 visas. But the requirement has always been a tick-the-box waste of time. An independentreview last year found it was pointless and cumbersome. There’s no evidence that unemployed Australians in any way benefit from this regulatory hurdle.

Another controversy relates to skills requirements. The unions say ChAFTA means foreign tradies could come to Australia who do not meet Australian standards. But the skills requirements under ChAFTA are exactly the same as for most other countries we accept skilled workers from. ChAFTA just removes a discriminatory higher bar for Chinese workers. (The higher bar still applies to a small number of other developing countries)

The final controversy concerns major projects. A side memorandum to ChAFTA establishes a new type of labour agreement – “investor facilitation agreements” – that allow major infrastructure projects to bring in foreign workers.

But we already have similar labour agreements. The essentials of the law haven’t changed, as the Migration Council’s Henry Sherrell notes. All agreements have to be approved by the immigration minister. And major projects have to pay foreign workers Australian market rates. Claims that ChAFTA changes existing major project wage requirements are simply wrong.

The unions can get away with these fudges because migration law is extraordinarily complicated – a byzantine regulatory environment of quotas and controls. The Immigration Department offers dozens of different types of visas for different types of people. Each have their own criteria and conditions. The Migration Act is a behemoth: currently 1048 pages, not including supporting regulations.

There are lots of reasons for this complexity. But one big one comes from the unions, who want migration to be heavily controlled to protect Australian jobs. If we were more open to migration – if there was wider acceptance of the evidence that immigrants do not steal jobs – then these rigid and regulated visa schemes would not have to exist.

This is the political economy behind union stories of foreign workers being exploited in Australia.

To the extent that there is exploitation in Australian immigration, it is because employers are able to use restrictive visa conditions – demanded by unions to protect Australian workers – as a stick to wield against foreign visa holders.

For instance, on the weekend Fairfax papers and Four Corners uncovered what they say is widespread exploitation of 7/11 workers. No doubt the story has a way to run before we learn all the facts. But notice how many allegedly exploited 7/11 employees are working on student visas.

The visa conditions on one student “gave the franchisees leverage to threaten to go to the authorities to have his visa cancelled if he complained about his salary or working conditions.”

At least student visa holders might be able to find other work. Workers on 457 visas have just a single sponsor, with correspondingly greater leverage.

It is possible to be opposed to foreign workers from China and not be xenophobic. But you’d have to be blind to miss the undercurrent of xenophobia in the anti-ChAFTA campaign. Just as the union campaign against poles and wires privatisation in March this year leant heavily on anti-Chinese sentiment, so too does this month’s spectre of Chinese workers.

Our highly regulated migration system is better than none at all. Immigration is the most powerful anti-poverty tool we have. People who migrate from poor countries to rich countries dramatically improve their wellbeing and those of their families.

We ought to be accepting more foreign workers. And we ought to be reducing the visa restrictions that make them vulnerable to exploitation.

Because when we talk about immigration policy we need to keep the focus on the immigrants themselves – and why they would want to come to Australian in the first place.

When unions campaign for Aussie jobs – when they campaign for crackdowns on visa categories, for more rules on who cannot work in Australia, for limiting foreign workers on projects – they are campaigning not against business or “capital” but against people who are less well-off than they and who were born in countries poor than ours.

International solidarity, it seems, only goes so far.

Forcing GST On Imports Doesn’t Stack Up

In opposition the Coalition promised no new taxes or tax increases. On Friday Joe Hockey announced the Coalition’s latest tax increase: eliminating the GST low value threshold on imported goods.

Currently GST is not imposed on imports worth less than the low value threshold of $1000. When you buy books from Amazon or clothes from ASOS, you don’t pay GST. As of July 2017, you will.

Well, you probably will. This is going to be very hard for the Government to implement.

The GST collection won’t be levied when goods are imported. Inspecting packages at the border costs more money than it raises, as the Productivity Commission conclusively found in 2011. (The Assistant Treasurer, Josh Frydenberg, has been saying that “real improvements in technology” make that finding no longer true, but the inspection problem isn’t really a technological one, it is a time and warehousing costs one.)

Instead, Australian Taxation Office officials are going to fly around the world to ask “hundreds” of foreign companies exporting more than $75,000 worth of goods to Australia to levy the GST at their end. Nice work if you can get it.

The politics here is obvious and unflattering.

Friday’s announcement satisfies the retailers who have been lobbying for years to reduce the threshold, claiming it makes domestic goods uncompetitive.

Of course, the GST threshold is a convenient scapegoat for much deeper issues in the Australian retail sector. Even if GST were imposed on all goods, many representative products would still be more expensive sold from Australian shops than foreign ones, as my colleague Mikayla Novak has shown. And international shipping isn’t free.

Friday’s announcement also satisfies Treasury and the state governments who are clamouring for more revenue. Like everything else Hockey has dressed up as a “tax integrity measure”, the elimination of the GST threshold is nothing more than a tax grab.

But, politics aside, let’s look at the low value threshold on its own merits.

Almost nobody in the debate has acknowledged that the threshold has been slowly lowering ever since the introduction of the GST. This is because the $1000 threshold is fixed – it is not indexed to inflation. And a grand isn’t worth as much as it used to.

This is the point the Treasury’s own Tax Board made in 2010, writing that inflation will “reduce over time any potential bias in favour of imported goods over local goods of the same quality and value”.

So Australian retailers have been complaining about a tax distinction that has been constantly and automatically eroding in their favour for the last decade and a half.

And that’s before we consider the fact that the dramatic reversal of the dollar has made domestic retailers much more competitive than foreign ones in the last few years.

The GST is usually described as a consumption tax. It is not a consumption tax because the GST is not levied on consumption. It is levied on sales by firms operating in Australia. In the real world, the GST is a sales tax with an input credit.

That observation might sound pedantic but it has big implications for the import threshold debate. If the GST is in fact an Australian sales tax, then trying to impose it on sales by foreign companies in foreign countries is not a tax integrity measure at all. It is a tax on imports. It is, in other words, a tariff.

Foreign companies do not, and should not, pay Australian taxes – just as companies in foreign countries do not operate under Australia’s regulatory framework or our political institutions.

As the Howard government said when it introduced the GST in 2000, “the government wants to ensure it does not unnecessarily draw non-residents into the GST system”.

And the idea that we need to raise taxes at our border in order to ensure “competitive neutrality” or to “level the playing field” is mercantilist nonsense. In fact, it’s not clear why GST should be levied on any foreign imports at all, apart from a pure protectionism.

In practice, the GST is only going to be levied on foreign companies that a) provide more than $75,000 goods into Australia and b) don’t slam their door in the face of Australian tax officials when they come knocking.

So there’s a non-trivial chance Hockey’s GST move will just encourage Australian consumers to move from bigger websites to smaller websites, trying to avoid the 10 per cent tariff.

On Friday Hockey said he has many “levers” at his disposal to “pressure” companies overseas to collect Australian taxes.

Maybe he does. But if so, that should be recognised for what it is: trying to squeeze money from foreign companies for no other reason than to satisfy retail lobbyists and feed the Government’s apparently unrestrainable spending habit.

Why Multinationals Are Not Avoiding Australian Tax

with Sinclair Davidson

The title of the interim report of the Senate economics committee inquiry into corporate tax avoidance, released this week, is “You cannot tax what you cannot see”.

This is a rather embarrassing admission that the evidence for widespread corporate tax avoidance – the avoidance which has filled so many newspaper columns, so many hyperbolic speeches in parliament – just doesn’t exist.

Imagine being pulled over by the police and told that even though you’ve been observed driving below the speed limit, stopping at stop signs, giving way at give way signs, indicating correctly, wearing your seatbelt, and maintaining a respectable distance from the car in front, the police have a hunch you’re somehow violating community expectations.

While the Senate committee feels sure there are questionable corporate tax practices going on, it doesn’t actually find any.

Rather, it relies very heavily on the political rhetoric of a now-discredited 2014 report by the Tax Justice Network, which claimed that firms were denying the government vast sums of revenue through opaque and confusing tax arrangements.

In fact, what the committee’s interim report shows is that the tax practices of the big tech firms are quite explicable.

For instance, Microsoft and Google have their regional headquarters in Singapore. As the committee admits, these headquarters are not shells, existing solely to avoid giving Joe Hockey money. They’re real. They have real offices, real assets, and real staff doing real work. In Singapore. Not Australia. Just because those Singapore headquarters digitally export some products and services to Australia does not mean they should pay Australian corporate tax on the profits.

Even more explicable is large firms with large research and development costs deducting those costs from their taxable profits. The R&D corporate tax deduction is bipartisan government policy. It seems a bit much for governments to introduce a tax incentive then get angry with firms for using it.

The lack of evidence of tax avoidance makes the committee’s belief that the Australian government should name and shame corporate tax avoiders vaguely comic.

Certainly, the Australian Tax Office should be vigilant ensuring firms are paying what they owe. Firms that fail to do so should face the full consequences of the law. But that already happens. Australia has some of the strongest anti-avoidance laws on the planet. The government has the tools, right now, to deal with illegal tax evasion.

Underpinning this whole debate is the fact that Australia’s corporate tax rate is very high. At 30 per cent, it is substantially above the OECD average of 25.3 per cent. And Australia is one of the most heavily reliant countries on corporate tax revenue in the OECD. The Senate committee admits that this heavy burden puts Australia at a “comparative disadvantage”.

With such a disadvantage, it is no surprise that multinational companies are not lining up to establish their regional headquarters here.

But a failure to establish regional headquarters in Australia – “avoiding permanent establishment” in the lingo of the committee – does not constitute tax avoidance. Australia’s tax and regulatory environment is not competitive. Singapore’s is competitive. This ought to cause some soul-searching by the Parliament. Handwringing about phantom corporate tax avoidance just postpones consideration of the real problem.

Perhaps we might expect the sort of anti-corporate nonsense espoused at the inquiry from Labor and the Greens. What’s really disappointing is the full-throated support of the corporate tax panic from the Coalition.

Government senators on the committee wrote a dissenting minority report. Yet their complaint was that the committee did not fully acknowledge all the exciting work the Abbott government was doing to clamp down on multinationals.

Earlier this year the government released its own proposed legislation to deal with corporate tax avoidance. In effect that legislation would empower the ATO to second-guess where it feels profits should be booked for tax purposes.

The consequences of such an approach would be dire. It would expose multinational firms to double taxation. It would be a huge incentive for those firms to leave Australia all together, taking jobs and economic activity with them.

All this fretting about tax avoidance makes good demagoguery. But it might seriously harm Australia’s economy.

There’s Nothing Conservative About Using The Constitution As A Political Trick

The Australian constitution has one great feature. It is incredibly hard to change.

This, obviously, is what Scott Morrison was thinking about when he proposed last week that Australia hold a constitutional referendum to deal with same-sex marriage.

A plebiscite would simply determine the public’s view on changing the Marriage Act via Parliament, but a constitutional referendum would propose adding the words “opposite and same-sex” before the word “marriage” in section 51(xxi) of the Constitution.

A plebiscite would have to simply receive a national majority to be considered decisive. But a constitutional referendum would have a much higher bar: both a national majority and majorities in at least four states.

Australia’s constitutional amendment system is often described as “notoriously difficult”. We are a “frozen continent”, constitutionally speaking.

Only eight out of 44 referendums have succeeded. This often cited figure understates the failure rate. Other possible referendums have been abandoned before coming to a vote. Kevin Rudd dropped Julia Gillard’s local government referendum when it became clear the Coalition’s enthusiasm for change was waning.

The Australian founders may not have intended it to be this hard to change the constitution. But there are good reasons for constitutional change to be difficult.

Constitutions exist in order to provide fixed rules about what governments can and cannot do. The strength of a constitution derives from the certainty it provides. A constitution that can be easily changed is not a constitution at all, in that it does not offer the stability necessary for long term economic and political management. In the pre-constitutional era, governments did not feel bound by rules. Now they do. That’s a very good thing.

This does not mean constitutions should be impossible to alter. But the danger to the constitution comes from reckless change, not stubborn adherence to the status quo. As Geoffrey Brennan and Hartmut Kliemt have written:

The slowness of the procedure will give us pause and help us steer a steadier constitutional and political course than we would do otherwise.

It’s important to note that the desirability of constitutional rigidity holds true even if we think the constitution is weak, or flawed, or could be amended in an obvious way.

Yes, we all have our own ideas of how statutes and constitution might be rewritten that would make this country more perfect. But just have a brief scan of the previous 44 referendums (Wikipedia has a nice list, with links to the questions themselves). It is pretty clear that Australia is better off, on balance, for having rejected most of them. Almost all were outright and explicit power grabs by the Commonwealth.

With all this in mind, the requirement that a constitutional referendum achieve a double majority – majority of the population and majority in the majority of states – is in fact a relatively low bar for a change to the rules that govern the structure of the government.

After all, what is the alternative? Simple majority voting? Majority voting is not inherently more democratic.

We are more likely to make democratic decisions – that is, decisions that more represent the will of the people – with a higher threshold. When 51 per cent of the population impose their views on 49 per cent of the population, it’s hard to say that imposition has much moral authority.

This is the basic case for constitutional conservatism (couched admittedly in economic terms rather than the usual legal ones). Continuity should be preferred. Change should be resisted.

The Liberal Party used to be the party of constitutional conservatism. Labor has always wanted constitutional reform. The Coalition’s historical role is to hold the line, to espouse modesty and stability; the sort of virtues represented by the Samuel Griffith Society and a long line of conservative judges and political leaders.

Yet under Tony Abbott, the Coalition appears to have abandoned that storied and entirely necessary tradition.

In opposition, Abbott had signed up to Gillard’s local government referendum. He had to be pulled back into line by state Liberal party divisions.

Abbott wants to amend the constitution to recognise Indigenous Australians. You only need observe how the recognition debate has spiralled out of the Government’s control to see how antithetical it is to the conservative mindset.

Now senior ministers of the government are seriously proposing a constitutional amendment for no other reason than to stack the deck against a policy they oppose. And that policy is, we are repeatedly told, a second-order issue.

There’s no reason for a constitutional referendum on same-sex marriage. The High Court has said the Commonwealth Parliament has the power to legislate in this area. The constitutional approach is only being floated because Morrison and others want the measure to fail.

Constitutional conservatism was once a matter of deep Liberal identity. Now it’s just another political trick for short-term gain.

Let’s Be Honest, Question Time Makes Everyone Look Stupid

The importance of the speaker in Australian Parliament is wildly overstated, because the stakes of parliamentary Question Time are wildly overstated.

It is a sign of how far the Abbott Government has lost control of the agenda that the appointment of what is normally a minor administrative position became the centre of Canberra politics.

By now the entitlement saga has spiralled out of control, enveloping every side of politics.

But recall that Labor was delighted when the Bishop helicopter photos emerged. It seemed like a perfect encapsulation of the charge they’d levied at Bishop ever since her appointment. Bishop was hopelessly partisan. Indulgent. Shameless. Here was Bishop’s performance as speaker converted into metaphor and given corporeal form.

That delight was really because Labor’s constant complaints about her speakership weren’t exactly resonating with the public. There’s nothing more inside beltway than complaining about how many people Bishop threw out of the chamber during Question Time.

Of course, you can understand why parliamentarians think the conduct of Question Time is important.

It’s a big part of their parliamentary week. For many of them, Question Time is a theatre where they can try to rise above the undifferentiated mass of other representatives. The person who held the record for being thrown out under Bronwyn Bishop was Nick Champion. Champion is the member for Wakefield and shadow parliamentary secretary for health, hardly a high-profile day job.

Labor types have been tweeting all weekend about the need for a new speaker to uphold standards and restore respect to Parliament. But never mind whether the speaker is biased. What are all these parliamentarians doing yelling and heckling from the back seats, and then blaming the speaker for Parliament’s low reputation? It’s like criminals blaming the police for failing to prevent their crimes.

Back in 2011, Katharine Murphy described the Gillard-era Question Time as the worst “grinding and time-wasting ritual” in federal politics. Murphy wrote that we should “make it matter once again”.

If anything this is too optimistic. Commentators often lament the lack of presence in the current Parliament. They are nostalgic for the great performers of previous generations. We used to have politicians who looked like they owned the room, and by extension, commanded the country. Question Time favours the fast-witted, the biting, and the aggressive. Peter Costello is acknowledged as a great Question Time performer. Paul Keating is known as the master.

But to what end? YouTube helpfully has Keating’s most famous performance: the “I want to do you slowly” response to John Hewson’s question about an early election. It’s great fun, sure. On the other hand, strip it back and Keating was just hurling a barrage of insults. Nothing wrong with that, but we shouldn’t pretend that it was a great democratic contribution.

Even at its most legendary – even in its most memorable, brightest moment – Question Time was just entertainment. Entertainment for an infinitesimally small portion of the population.

More commonly, Question Time is just the forgettable recitations of the lines of the day – short term Capital Circle obsessions intoned as if they were matters of great Shakespearian substance.

It’s true that there was a previous era in which Question Time was not the farce it is today. As this guide to parliamentary practice notes, Question Time evolved out of the ad hoc custom of asking ministers questions without notice. The earliest Commonwealth parliaments would only feature a few such impromptu questions. Questions would be asked when there were questions to be asked.

Have a look at this “question time” from July 1915. The questions were simple and unadorned. The answers were direct (“I shall make inquiries into the matter” was the sum total of one response by the Assistant Minister of Defence.) There’s little of the modern preening and bluster.

The standing orders that govern questions without notice have changed many times in the last century. Many proposals to reform Question Time focus on these standing orders. But the problem isn’t with the rules. Nor is it with the speaker. No doubt Tony Smith will be a great improvement on his predecessor. But Bronwyn Bishop didn’t wreck Question Time.

Question Time is farcical because it is an empty ritual. It adds nothing. It distracts the press gallery. It distracts our politicians. It undermines the more serious work that goes on in Parliament. It is divorced from the actual business of government, the actual business of legislation, and the practical needs of democratic accountability.

Let’s be honest, Question Time makes everyone involved look stupid.

Bronwyn Bishop’s accidental contribution has been to illustrate just how ridiculous this feature of Australian politics truly is.

Entitlements Review: This Is A Problem Of Definitions

To be a parliamentarian is to have a strange job. To be speaker of the house in federal Parliament is to have an even stranger one.

Recall that Bronwyn Bishop’s first line of defence was to say that she flew to the Liberal fundraiser in Geelong to talk about the role of Parliament. Is that really what she is employed to do? Does that count as party business or political business or parliamentary business? Should we be paying for it?

It’s easy to say we want to reform the entitlements system. But it’s much harder to decide what constitutes “official” business that taxpayers should support, and “political” business that taxpayers should not. There’s not always a bright line separating the two.

Yes, a helicopter to Geelong, or charging taxpayers for attending a wedding, clearly crosses the unacceptable line. But what about arranging meetings in Melbourne to justify attending a party function the night before, as Tony Abbott did in August last year? I challenge you to write a rule that prevents tricksy scheduling.

Unsurprisingly, a 2010 review into parliamentary entitlements concluded that there were “unclear and sometimes inconsistent definitions” of what constitutes parliamentary, party, electorate business.

So let’s start with first principles. In the business world, employees’ expenses are covered on work trips. The job of employers, or their human resources staff, is to monitor employees to ensure that the firm and its shareholders aren’t being ripped off through extravagance. Our parliamentary entitlement regime tries to ape this private sector practice.

But parliamentarians aren’t employees. They have no boss. Yes, when they’re ministers or parliamentary secretaries they report to the prime minister. But as representatives, they answer only to voters, and they only answer every few years.

In fact, parliamentarians are much more like sole traders, who, through an election, win contracts to represent us – to act as our agent in the legislature.

This is a distinctly unromantic vision of the work of a politician. But if we’re trying to figure out what politicians are “entitled” to we should first figure out what their job is.

This subtly amusing parliamentary fact sheet tries to derive the “job description” of a parliamentarian by observing how parliamentarians exercise their time. They do parliamentary work (voting, committee hearings), constituent work (pressing flesh, going to fetes) and political work (party conferences, branch meetings, scheming).

But just because politicians do a lot of things doesn’t mean we should pay for those things. We elect them to represent us in federal parliament, not to visit fetes. They might enjoy being local celebrities but why should we pay for them to campaign?

A few years ago my IPA colleague Sinclair Davidson spelled out in The Australian an alternative model for dealing with expenses. Politicians should be well paid – probably a lot better than they are now. But once they’ve received that lump sum, they should pay their expenses themselves, just like any independent contractor would.

Those expenses – not “entitlements”, expenses – would then be treated as work-related deductions. Under that model, if Bronwyn Bishop wanted a helicopter ride she would have declared it not to parliament but to the Australian Taxation Office in her 2014-15 return.

(Ministers’ expenses – who actually are employees of the government – would be strictly controlled but covered in the same way employees have their expenses covered.)

This model has many advantages over the present system.

First, it would keep expenses in check. It’s easy to be loose with taxpayers’ money. It’s harder to be loose with your own.

Second, it avoids the interminable debate about what counts as parliamentary or political expenses. Either way, it all constitutes work-related expenses for tax purposes.

Third, it leaves subjective questions of whether spending is extravagant to the politicians themselves. Bishop wants a helicopter? Up to her.

Fourth, it leaves the question of what constitutes work-related to the tax office. I said politics is a weird job but it is not so weird that the ATO wouldn’t be able to handle these questions. They have a lot of experience here. Anyway, we’re at the mercy of the tax office. Our representatives should be too.

And fifth, it would be a hell of a lot less complicated than what we have now. The Finance Department says there are 300 separate entitlement codes in the existing entitlement management system, belying the complexity and confusion that surrounds political compensation.

There’s a deeper problem revealed by the Bishop affair.

Tony Abbott has been eager to blame the vagueness of the rules about entitlement use for the scandal. But all that means is the current system rests largely on individual judgment.

And if our parliamentarians are unable to exercise their individual judgment in a way that accords with the expectations of voters, then we have a serious problem.

Politicians are expected to make some of the biggest decisions affecting our lives. We place them in positions of great trust to act on our behalf.

What does it say about representative democracy if our politicians don’t even have enough judgment to prudently and responsibly arrange their own travel? Nothing good.

Please, Just Give Us A Real Growth Strategy

Every once in a while something brings the nonsense of daily politics back down to earth.

Last week Reserve Bank governor Glenn Stevens suggested that the slow growth we have seen over the last few years might not be a temporary post-Global Financial Crisis aberration. It might, actually, be the new normal.

Rather than the three or so per cent growth each year we’ve come to expect, we might have to get used to 2 per cent GDP growth.

For Stevens, this lower growth is a hypothesis, not a prediction. But even so it’s a big worry. In the long term, lower GDP growth means lower living standards for everyone. There is nothing more responsible for our historically unprecedented prosperity than our relentlessly growing economy. Growth is critical. Growth is fundamental. A richer society is a happier, healthier society.

Even if your taste in economic philosophy is less free market than mine, growth is the foundation on which government social services are built. Growth pays for the National Disability Insurance Scheme and helicopter flights to Geelong alike.

We can debate how much tax the government should impose. But you can’t tax income that doesn’t exist.

Yet neither party has any idea – let along any proposal, plan or program – for how to boost Australian growth back up to three, let alone four per cent per year. They’re not even talking about it.

Given that the most effective way to bring the Commonwealth budget back to balance is to increase growth (and therefore tax receipts) this silence is all the more stark.

A quick survey of the economic proposals on the political table is disheartening. Labor wants to boost taxes on savings (cracking down on so-called superannuation “concessions”). The Coalition wants to boost taxes on consumption, by raising the GST and imposing it on online and digital transactions. Labor wants to tax greenhouse gas emissions again. New taxes are not pro-growth.

Tony Abbott was widely ridiculed a few weeks ago when he responded to a question on the Greek turmoil by referring to the Government’s grocery code of conduct. This was all very funny but Abbott’s tone-deaf response hinted at the much deeper issue facing the Government: it has no central economic agenda.

That the Government can propose higher taxes and proclaim its desire for lower taxes in the same breath isn’t a failure of messaging, it reveals an absence of purpose.

The deregulatory drive of the Coalition’s first year, as inadequate and insubstantial as it was, is now a memory.

And abolishing the carbon and mining taxes was good. But somebody is going to have to pull the Abbott Government aside and quietly tell them economic management is about more than righting the wrongs of the Rudd and Gillard governments.

What would a pro-growth strategy look like? It’s not like there isn’t any low-hanging fruit for governments to grasp.

Our absurd and anachronistic restrictions on foreign investment should be eliminated. Competition law should be liberalised and reformed to allow firms to take advantage of economies of scale. The four pillars policy – which prevents mergers between the big four banks – is unjustifiable on any grounds apart from populist anti-bank sentiment.

Business formation is a proxy for economic dynamism. We need regulatory and workplace law to encourage business start-ups, rather than hinder them.

Some of our largest and most potentially-innovative sectors are held back by bureaucracy and regulation. A pro-growth political platform would have healthcare reform at the centre. Innovation policy needs serious change so innovators can bring ideas to market sooner.

And given the importance of education to growth it is embarrassing that the debate over education policy has devolved into a squabble over a shrinking pool of government money. The last big idea implemented in education was the introduction of HECS in 1989.

A pro-growth platform would liberalise Australian trade barriers without waiting for multilateral or bilateral trade deals to endorse them.

And a pro-growth platform would look at the teeming mass of skilled and unskilled labour around the world and see opportunity, rather than threat. Economic powerhouses have been built on immigration. Australia, with our abundant space and stable institutions, is uniquely placed to attract their entrepreneurial energy.

The economist Mancur Olson once described the progress of human society as an accumulation of special interests who defend the status quo. A country slides into stagnation as more and more groups grab privileges that hold back necessary structural change.

Olson’s is a pessimistic story. Let me amplify that pessimism. Australian policy debate is constrained most by the tyranny of the status quo – a refusal by the political class to consider anything but the most moderate, marginal adjustments to existing policy settings.

It’s obvious that Canberra still believes it has the broad strokes right. After all, they think a grocery code of conduct counts as reform.

Perhaps in the parliamentary triangle it looks that way. Right now, all special interests are being nicely catered for. Rents are sought in an orderly fashion.

But, from outside Canberra, it looks like the economy is slowly grinding into stagnation, and our political class is apparently powerless to do anything about it.