Tag: ABC The Drum

The Farce That Is The Leveson Inquiry

On October 7, 2009, News International chief Rebekah Brooks sent opposition leader David Cameron a text message:

I am so rooting for you tomorrow not just as a proud friend but because professionally we’re definitely in this together!

The “tomorrow” in question was the final day of that year’s Conservative Party conference. Cameron would not have been surprised by Brooks’s words. James Murdoch had told him the Sun newspaper would abandon Labour because the Conservatives would be better economic managers. During the Labour conference a week earlier the paper declared “Labour’s lost it”. So while Brooks put it in an unsophisticated way, she was right: professionally they were now “in this together”.

The uncovering of this bare little text message was the fruit of Cameron’s five hours of testimony to the Leveson inquiry into the phone-hacking scandal last week.

The message has been reported in headlines around the world, from the Huffington Post to the Calcutta Telegraph. It is, according to the Daily Mail, “explosive”, “cringe worthy”, “astonishing” and “incredibly embarrassing”.

But embarrassing for who, exactly? Cameron was the one giving testimony, not Brooks. It’s hard to see why an opposition leader securing the support of a media proprietor for an upcoming election should be cringe worthy. That is his job – to gather support where he can.

The Leveson inquiry started in November with Hugh Grant and the parents of the murdered school girl Milly Dowler. Back then, its themes were criminality and police corruption. It was surrounded by arrests and resignations and Scotland Yard. All serious stuff.

But six months later, what was a serious inquiry has devolved into a strange sort of puritanism. Participants are being judged against ethical rules unheard of before Leveson convened. For a newspaper to back a political party is apparently a breach of these novel rules. And friendship between politician and proprietor is outrageous.

The phone-hacking affair no longer has anything to do with phone-hacking. It’s trying to make scandals out of the basic practices of representative democracy.

Politicians cultivate relationships with journalists. They have to, if they want to achieve their political and policy goals. That might seem distasteful. We all share a romantic ideal about the fourth estate being implacably at odds with the first estate. But let’s not be too delicate. Democracy is about coalition-building. Journalists and editors are stakeholders. A politician that does not make friends in the media will not be a very successful politician.

But we also shouldn’t pretend Cameron’s fortunes were solely in the capricious hands of media moguls. Yes, only Brooks’s side of the SMS conversation has been released. But its clear impression is of a proprietor sucking up to an opposition leader – not, as those who imagine Rupert Murdoch has an iron-grip on politics expect, an opposition leader coming cap in hand to a proprietor.

So an ambitious Cameron convinced the Sun to editorialise in favour of his party in 2009. It’s questionable how big a coup this really was. Does anyone genuinely think Gordon Brown could have held on if he’d only had the Sun’s support? Labour had been in power for 12 years. Brown was astonishingly unpopular. And the British economy had collapsed. Tabloids have always chased popular sentiment more than they’ve led it.

In Australia, the Finkelstein Inquiry into media regulation flirted with deeper questions about the functioning of democracy. But, ultimately, Ray Finkelstein had a limited brief. His final report charged towards a single, digestible proposal for a new regulatory body. He steered clear of uncomfortable philosophical questions.

By contrast, the Leveson Inquiry lacks Finkelstein’s modesty. Lord Justice Leveson’s team has now grilled four Prime Ministers and nearly 20 cabinet ministers. They’ve interrogated them about press strategy and public relations, the use of anonymity and favouritism, leaks and friendships.

It’s Cameron’s fault. The phone-hacking was the scandal. But Cameron was embarrassed by having hired Andy Coulson, a former News of the World editor. So he gave Leveson virtually unlimited terms of reference. One of his tasks is to make recommendations concerning “the future conduct of relations between politicians and the press”, which would seem to encompass every aspect of political and government communication.

Future historians will no doubt appreciate Leveson’s forensic accounting of who had lunch with who. But it seems more designed to appeal to the coterie of media critics sure that democracy is on the slide.

There’s an absurdity that the Finkelstein and Leveson inquiries share. They both held court on the nature of democratic politics, and they were both conducted by a senior judge whose touted virtue is that they are independent and unaccountable – that is, completely undemocratic.

That Brooks’s artless text message is now seen as a scandal illustrates how farcical the Leveson circus has become.

Happy Birthday To Free Market Liberalism

This year what we think of as modern free market liberalism turns 50.

We can thank the 1962 book by the American economists James Buchanan and Gordon Tullock, The Calculus of Consent, for laying the intellectual foundation of the philosophy of limited government.

Call it economic rationalism or “neoliberalism” if you like.

This is not to suggest that all free marketeers have read deeply in the academic field – public choice – that this book spawned. Or that the philosophy of freedom isn’t a lot older. Supporters and opponents are more likely to focus on the more famous names of Adam Smith and Friedrich Hayek. No surprise there. Calculus of Consent is dense and mathematical.

Smith and Hayek studied the market. They were looking at the way human society was spontaneously and efficiently ordered by price system. Buchanan and Tullock shifted the focus; grounding free market thought not in how markets work, but how politics doesn’t.

Half a century later, that is still where the debate is.

Buchanan and Tullock start with a simple, seemingly obvious assumption: people are people. Whether they work in the private sector or in public service, all people respond to incentives. Everybody pursues their own goals and interests. Everybody has their own preferences about what they would like to do. Economists sometimes describe people as “profit-maximising” but this isn’t quite right. People can be salary-maximising, or enjoyment-maximising, or compassion-maximising, or leisure-maximising. Anyway, we’re all trying to maximise something.

The first half of the 20th century saw economists explore the implications of self-interest as it existed in the marketplace. They derived theories of monopoly, public goods, information problems, externalities, and predatory pricing. And they argued that when markets break, government must clean up.

Buchanan and Tullock just extended those theories to government itself. They argued that the public policy question isn’t whether markets have flaws. It is what happens when you try to resolve those flaws through collective action. The Calculus of Consent applied economic analysis to non-market decision making. The book explores the incentives faced by individuals acting in a political environment. After all, people don’t stop being people when they enter a voting booth or sit down at their computer in the Department of Agriculture. Everybody is still motivated by their own personal goals.

This was a necessary corrective to political economy, and a radical one. It is easy to imagine solutions to social and economic problems – the optimal solution is simple to design on paper. But designing and implementing those solutions in the real world is not a trivial matter. Getting self-interested individuals to work towards collective goals is hard. Special interests seek advantage. People use the public apparatus for private gain. Politicians drop good policy and embrace good politics. In a democracy the majority tend to support what is good for the majority, not what is theoretically ideal. What was optimal easily becomes corrupted.

The public choice school is relentlessly realist. It offers a vision of politics without the romance. Public choice counsels caution – if not outright scepticism – about government activity. It underpins the popular claims like Ronald Reagan’s “government is the problem”.

In his 1963 review of the Calculus of Consent, the British economist James Meade criticised his colleagues for being “much too ready to call in the State as a deus ex machina to remove the imperfections of the laissez-faire market”. It was an uncomfortable critique. Meade was a former Labour Party advisor and a firm advocate of government intervention.

The lesson Buchanan and Tullock drew from their research was that rules matter. Buchanan spent his career looking at the structures which could constrain government action and therefore keep the actions of the public service as close to the desires of the public as possible. He won an economics Nobel Prize in 1986 for this work.

So far, so good. A full recognition of the problems of collective action in government should lead to a general reluctance to trust government to act on our behalf. Not to no government, but to modest government, constitutionally restrained. The British political philosopher Mark Pennington says the goal is a “robust” political order. That is, one which is designed to face political as well as market failures – and to limit the damage caused by either.

Certainly, public choice hasn’t penetrated mainstream policy thinking. Conservative politicians (at least those of the free market variety) should be sympathetic but are as embedded in the system as anybody else. The public may be sceptical about bureaucrats and politics but they still, instinctively, want government to fix things. There always ought to be a law. And clever people pushing policy ideas tend to assume their ideas will be implemented wholesale and uncorrupted.

But we shouldn’t underestimate how much Buchanan and Tullock’s book influenced the political contest.

Even the most populist supporter of small government uses language and insights gained from public choice – the understanding, implicit or explicit, that the question isn’t whether society has problems, but whether we can really rely on the strange institution of government to solve them.

Remittances Dominate Aid Yet Remain Unspoken

The underappreciated thread that ties the global economy together is remittances – the money sent by migrants back to their home countries.

Remittances are the silent player in the immigration debate. They’re almost never referred to in our domestic politics or press.

The news monitoring site Factiva records just two mentions of remittances in Australian newspapers over the past two years.

Compare that to the reams of copy filed about foreign aid – 706 newspaper articles in the same period. Then add all the vox pops, chat shows, and talkback calls. Recall the hand-wringing which greeted Wayne Swan’s announcement that foreign aid growth would be modest in this budget. Yes, both left and right positively obsess about the cash the government gives to the third world.
But, even though we’re also constantly yabbering about immigrants, the vast sums of money foreign workers privately send home themselves goes entirely unnoticed.

So a new World Bank report, Migration and Remittances during the Global Financial Crisis and Beyond, released last week is all but guaranteed to be ignored. This is a shame.

The report underlines that the amount of money migrants send home far, far exceeds the amount of money the West spends on foreign aid. Remittances are a big deal.

And they’re an increasingly big deal. Total remittances used to be double the total amount of aid, which was impressive enough. But now, after the financial crisis, they are more than triple.
This is not because foreign aid has declined – official development assistance has continued to grow during the economic downturn. It’s because remittances have shot up further. While the developed world spends roughly $US100 billion on aid every year, migrants now send more than $300 billion home. And as remittances are extremely hard to measure (not all of it is sent through formal channels) it is likely to be much more.

This is a good thing. The financial crisis demonstrated that remittance income is stable income. Foreign direct investment in the developing world has wildly fluctuated since 2008 and has not yet returned to pre-crisis levels. By contrast, remittance flows have remained relatively steady. They dipped slightly in 2009 but quickly popped up again; in two years, the World Bank believes global remittances will be close to $600 billion a year.

We’re all familiar with the long-running “trade versus aid” debate. Which is the most effective development policy? There’s an increasing consensus that the actual winner is remittances.
So the significance of the global remittance economy ought to dominate the immigration debate.

But it doesn’t. Understandably, Australians look at immigration through Australian eyes. The emphasis is on us: how will migration programs affect domestic employment? How will migrants culturally integrate?

Barely do the fortunes of the migrants themselves figure. Working in the rich world, whether temporarily or permanently, is extraordinarily beneficial for people born in poor countries. The opportunities are much greater, and the prevailing salary for equivalent work much higher.

This simple and obvious fact is virtually absent from discussions about immigration. Perhaps it is an unstated assumption shared by all participants. But as the development economist Michael Clemens has pointed out, the benefits which are conferred on the migrants and their countries of origin are almost uniformly neglected by all sides of the debate.

No more so than with remittances. The flow of money from migrants helps fund investment and grow capital in the world’s poorest countries. It keeps families above the poverty line. It goes directly to households.

And as a form of third world development, remittances put no pressure on taxpayers in the first world. They are not planned by clever development economists or policymakers. They have not been coordinated by an international bureaucracy. Indeed, remittances are nothing but the result of the hard work of migrants.

That might sound hard-hearted but it helps keep the flow of money stable and targeted – certainly more stable and targeted than foreign aid, which is highly influenced by political decisions, and subject to the budget planning of treasurers for whom third world development is not an urgent priority.

But there’s also a political reason that remittances don’t get talked about. It’s in nobody’s interest to do so.

They don’t fit the left’s vision of economic development. Foreign aid is grand and interventionist and state-driven. Remittances are earned by individuals and spent in ways the migrants and their families choose. One small, pathetic, but indicative criticism of remittances from the left says they encourage “conspicuous consumption” in the developing world. It’s a common complaint and a bizarre one. Is the third world’s problem really not poverty but consumerism?

And it’s clear that many calls for foreign aid are driven by a belief in distributive justice – that foreign aid should be a penance for first world wealth. Certainly this is the message broadcast by the fashionable anti-poverty causes marketed to young people.

Nor do remittances appeal to conservative populists. Remittances offer one of the most compelling utilitarian arguments for importing foreign workers from the developing world – not only is immigration good for our economy and the migrants themselves, it’s also good for the countries the migrants come from. This is not a story that those sceptical of immigration want to tell.

But it is one we’ll have to start recognising if we want to understand our place in the global age of migration.

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.

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.

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.

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.