The ABC generates $1 billion in value

Michelle Guthrie hit back – strongly according to some media sources – against ABC critics in a speech today.

For those who prefer an abacus-type approach to this debate, I have some fresh information. How do you put a price on the value of the ABC? In pursuit of that answer, the ABC has commissioned Deloitte Access Economics to do some research. Their report is still being compiled and will be released next month. The early findings are interesting. They show that the ABC contributed more than $1 billion to the Australian economy in the last financial year – on a par with the public investment in the organisation.  Far from being a drain on the public purse, the audience, community and economic value stemming from ABC activity is a real and tangible benefit.

The takeaway message?

… the ABC contributed more than $1 billion to the Australian economy in the last financial year …

Sounds good, except … as Michelle Guthrie acknowledges that’s just about how much the ABC receives from taxpayers.

Then there are deadweight losses of taxation – if the ABC gets $1 billion to spend and generates $1 billion of economic activity then the ABC is losing the value of the deadweight losses.

Ouch.

I suspect Ms Guthrie thought this information would bolster her case. But no. That is even before we consider any crowding out effects.

Then she cited some statistics.

And the facts show Australians overwhelmingly value the outcome of this foresight: 82% of Australians look to the ABC as their trusted source of information; 78% cite the ABC as an important contributor to our national identity; and critically, 77% of Australians think a healthy ABC is essential for Australia’s future.

That regard is a precious commodity at a time when trust in our institutions is so rare.

Chris Berg and I collected some statistics from various issues of the ABC annual report.

This is how Chris and I interpret that table:

The ABC’s satisfaction indicators are very impressive. A selection of those indicators are shown in table 1. Eighty-six per cent of Australians value the ABC. Seventy-seven per cent think it is balanced and even handed. Seventy-eight per cent think ABC television provides quality programming.

This rosy picture is complicated by the fact that the ABC television only had a 17.6 per cent share of the primetime 5-city metro market in 2015-16. Indeed, there is a huge gap between the number of people who claim to value the ABC, and those people who actually consume its services. It is also noteworthy that more people in the metro areas consume ABC radio than primetime television and the percentage of people who believe that the ABC provides quality radio programming is much lower (63 per cent) than those who believe the ABC provides quality television programming (78 per cent). It appears that the more people know about the ABC the less they value it.

This kind of result is not necessarily surprising – it is very likely that Australians have been socialised into believing that the ABC provides a quality service as opposed to having actually experienced that quality through their own viewing or listening.

It is true that the ABC has higher market share in regional areas than it does in metropolitan areas – yet even there the gap between what people say about the ABC and their actual consumption of ABC services is large. Unfortunately the ABC do not appear to publish market share data for their regional radio services. It is one thing to be assured by politicians that the ABC provides valuable services to the community but it would be even more reassuring to see the actual data supporting that claim.

Michelle Guthrie very kindly referred to Chris and me in her speech – and our book.  So if you haven’t already done so, please order your copy – it has caused a lot of trouble for the ABC.

Update: Almost forgot this statistic:

Deloitte calculates that the ABC is helping to sustain more than 6000 full-time equivalent jobs across the economy. 

So that is ($1,000,000,000/6000) $166,666.67 per job.

Posted in Media | 39 Comments

Said it before. Will say it again.

Spartacus has said it before and Spartacus will say it again.  Kevin Williamson is a fantastic writer and analyst.

For those unfamiliar with his recent history, Williamson was a long time writer for National Review and was poached by The Atlantic Magazine.  After 1 article for the Atlantic Magazine and a lefty revolt and hissy fit that would put ANU students and academics to shame, Williamson was fired.  And for what?  Officially because of something he said in jest in a podcast some 6-12 months earlier.  Unofficially, because the lefty media likes every kind of diversity except view point diversity.

Williamson has now returned to write for the National Review, although sadly less frequently, and his latest contribution is called Asymmetrical Capitalism.  Please, please read it.  In it, Williamson writes about an issue dear to Spartacus’ heart; that the debate should not be about (re)regulation or deregulation, but right-regulation:

Consumer regulation based on the power of exit rather than on the power of mandate will tend to help markets function rather than push private-sector service providers gradually in the direction of regulated quasi-public utilities — and nobody much loves their utility company, either.

Just read it.

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Posted in Uncategorized | 5 Comments

Green side up

Ontario was once the wealthiest province in Canada, back when I used to live there, but no more. It is in the process of proving that while there may be much ruin in a great nation, eventually you really can ruin the place if you work at it long enough and hard enough. Australia is apparently going to go down that same path: Dual threat to energy guarantee from ALP and conservatives. Here then is a cautionary tale proving there are some people for whom no level of ruin is ever enough: $312 Billion: Green Energy Makes Ontario the Most Debt-Ridden Province on Earth. Not long, worth your time, and here is something to get you started.

A major issue has been crippling energy and environmental policies. It began when, in 1992, then-premier Bob Rae appointed businessman and former UN Under-Secretary-General Maurice Strong to be chairman of Ontario Hydro. At the time, Ontario was a prosperous, economically sound province. Strong changed that when he applied the energy and environmental policies he proposed for the entire world. In 1992, he introduced them through his creation of the United Nations Environmental Program (UNEP) and the conference he chaired in Rio de Janeiro.

At the conference, Strong introduced his creation of Agenda 21, a global energy and environment policy of world-shattering implications, and got it ratified. It was at the same conference that world leaders signed the United Nations Framework Convention on Climate Change (UNFCCC). The UNFCCC set the ground rules for the UN’s climate science body, the Intergovernmental Panel on Climate Change (IPCC). In Article 1 of the UNFCCC treaty, it specified:

“Climate change” means a change of climate which is attributed directly or indirectly to human activity that alters the composition of the global atmosphere and which is in addition to natural climate variability observed over considerable time periods.

It is a definition that predetermines the outcome of the IPCC’s work. You cannot isolate human causes of climate change without knowledge and understanding of natural changes and mechanisms. The fact that we cannot forecast the weather beyond 72 hours demonstrates how little we understand about natural climate change and its causes. Accurate forecasts require accurate science, and yet the science is still highly immature.

To further his anti-development agenda, Strong needed “science” to isolate and prove that increasing carbon dioxide emissions from industrial activity, a natural outcome of increasing production, would cause runaway global warming. Once the science was determined, the bureaucracies of national weather offices such as Environment Canada (EC) could push policies to cripple energy production, industry, and development. It is not coincidental that Gordon McBean, later assistant deputy minister of EC, chaired the founding meeting of the IPCC in 1985. Other countries and regions were slow to adopt these principles, but in Ontario, Strong was able to use his position at Ontario Hydro to implement with impunity the crippling policies he orchestrated in Rio.

You’ll never guess what happened next.

Might mention that the title is from a Canadian joke about the instructions you have to give to environmentalists who are laying sod for a new lawn.

Posted in Global warming and climate change policy | 28 Comments

Which Kerry Schott quote would you prefer?

Kerry Schott is the chair of the Energy Security Board, yet another bureaucratic entity governing the National Electricity Market (sic).

She is the one who has come up with the details of the deeply misconceived National Energy Guarantee that just provides an ongoing free kick to the renewable energy sector.

But she clearly needs to pretend to change her tune when it suits.  Just pick your preferred quote.

I can assure you that, unless there’s a change of technology, there would be absolutely no way that anybody would be financing a new coal-fired generation plant.  So, people might want to see them go faster, but they’re going anyway.

or

All the guarantee does is ensure that there is sufficient power for all customers when and where they need it. The NEG is the best chance in over a decade of climate policy instability to provide a reliable and lower cost energy system. Surely we have all had enough of escalating prices and low investment in reliable dispatchable power?

Let’s get real here: there won’t be any investment in reliable dispatchable power under the NEG – maybe a bit of expensive gas peaking, but that’s it.

And what’s this about climate policy instability?  We have had the RET (since 2001), so what’s she on about?  It has achieved precisely what was intended – an avalanche of investment in unreliable renewable energy, driven out coal fired power and prices have massively escalated.  What’s not to love, Kerry – you want more of it.

For the government – it is a clear case of WRONG WAY, GO BACK.

Posted in Uncategorized | 30 Comments

Catallaxy Exclusive – Australian Broadcasting Corporation has not paid tax for at least 20 years

In an investigative exclusive, it can be reported that the Australian Broadcasting Corporation (ABC) has not paid any company tax for at least 20 years.

A deep analysis of the ABC’s 2016-17 audited financial accounts has shown that, despite revenues of over $1.1 billion (Government and own source), not a single cent of tax was paid.  But according to the ABC’s Chief Economics Correspondent, Emma Alberici:

And while the Treasurer and Finance Minister warn that Australia’s relatively high headline corporate tax rate means Australia remains uncompetitive and companies will choose to invest in lower taxing countries, the facts don’t bear that out.

Although previous ABC research has shown that Qantas has not paid company tax for 10 years, the ABC has not paid tax for longer than that.  Alberici further noted:

A zero corporate tax bill at Qantas has certainly seen one significant wage rise at the company — the chief executive’s. The benefit to workers has been less pronounced.

This is a similar phenomenon at the ABC with it’s chief executive’s salary being at least $0.9 million per annum and its top presenter’s salary being $0.5 million per annum.

When contacted, the Australian Tax Office (ATO) refused to comment on whether there was any investigation of the ABC’s tax payments being undertaken.  ATO spokesperson Bob D’Builder said:

The ATO does not comment on such company specific matters.  But as a citizen, I enjoy watching ABC shows, especially Peppa Pig.  #justsaying.

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Posted in Uncategorized | 17 Comments

Q&A Forum: June 18, 2018

Posted in Open Forum | 118 Comments

What do you call a crooked union official in jail

What do you call a crooked union official in jail?  A good start?  Not enough?  Desirée?  All of the above?

As reported in the AFR:

Derrick Belan, the former head of the National Union of Workers NSW, has been sentenced to four years in jail after being found guilty of defrauding his union more than $650,000 and spending the money for his own personal benefit, including botox injections, a tattoo, cruises and a Harley Davidson.

Good thing there is no Prime Ministerial Pardon power in Australia.

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Posted in Uncategorized | 32 Comments

A new society shattering statistic

In 2004 I introduced a new statistic to the Australian policy debate:

In 1996/97, the top 25% of income earners paid 61% of total net tax; by 2000/01 they were paying 64% of it.

At the time this caused a huge kerfuffle. It just wasn’t true, Davidson is making up statistics on the spot, the tax burden is proportional, etc. etc. etc.

Yesterday I did it again. Well to be fair, Chris Berg and I did it in our new book Against Public Broadcasting: Why and how we should privatise the ABC.  Yesterday the Outsiders on SkyNews tweeted a very specific claim we make in the book and in our The Spectator piece published last Thursday.

A 2013 survey revealed that ABC journalists are almost 5 times more likely to be Greens voters than the average voter and twice more likely to vote Greens than the average journalist.

Twitter has gone mad. “Gone mad” you say? Yes.  It’s just not true, Davidson has made it up, why does my employer employ me, etc. etc. etc.

So here is the link to the peer reviewed research: Hanusch, F. 2013. Journalists in times of change: evidence from a new survey of Australia’s journalistic workforce. Australian Journalism Review, 35(1): 29 – 42.

Here is the plain language explanation of the peer reviewed research.

However, 41.2% of the 34 ABC journalists who declared a voting intention said they would vote for the Greens, followed by 32.4% for Labor and 14.7% for the Coalition.

In contrast, 46.5% of 86 News Limited journalists who answered this question said they would vote for Labor, 26.7% for the Coalition, and only 19.8% for the Greens. As well as The Australian, the News stable includes some of the country’s best-selling tabloids such as the Herald Sun, Daily Telegraph, Courier-Mail, Northern Territory News and the Adelaide Advertiser, and some suburban newspapers.

Among the 86 Fairfax Media journalists who responded, Labor was by far the most popular party at 54.7% support, followed by the Coalition and the Greens, both on 19.8%. The Fairfax journalists came from outlets including the Sydney Morning Herald, The Age, The Canberra Times, a range of regional and suburban newspapers, and metropolitan radio stations.

If we disregard the 42.8% of journalists who are undecided, refused to answer or would vote for a party or candidate other than the major three, this is a statistically significant result.

It means that even though only a smaller number of journalists answered the voting intentions, which does increase the margin of error, it is still reasonable to conclude that there is a marked difference between the voting intentions of journalists at the three major media organisations.

What Chris and I did was match that peer reviewed research with data from the Australian Electoral Commission results for the 2013 election and then report that ABC journalists were almost 5 times more likely to vote Greens than the general population.

Posted in Books and writing, Media | 28 Comments

Where every failure is punished with more money and power

The United States has the largest number of people in jail. And not per capita but in absolute terms. Yes, despite a population of around 1/4 of China (325 m vs 1.4 billion), there are more people in US jails than in Chinese jails. And of the perhaps 2.5 million in US jails, see the lovely diagram following, perhaps 1/7th are incarcerated in California.

Why are these numbers so and what happened around 1980 that kicked up a previously continuous 60 year trend? Well, consideration might be given to increased focus on crime or perhaps the notion of privatised prisons. But greater weight should be given to the role of prison guard unions.

In 2016-17 in California, it cost around US$71K per annum to house to incarcerate an inmate:

Since 2010-11, the average annual cost has increased by about $22,000 or about 45 percent. This includes an increase of $7,900 for security and $7,200 for inmate health care. This increase has been driven by various factors, including (1) employee compensation, (2) increased inmate health care costs, and (3) operational costs related to additional prison capacity to reduce prison overcrowding.

And not only did the numbers of inmates increase and the quality of prisons decrease but:

The growth of California’s incarceration system, and the decline of its quality, tracks the accession to power of the state’s prison guards union, the California Correctional Peace Officers Association (“CCPOA”). The CCPOA has played a significant role in advocating pro-incarceration policies and opposing pro-rehabilitative policies in California. In 1980, CCPOA’s 5,600 members earned about $21,000 a year and paid dues of about $35 a month. After the rapid expansion of the prison population beginning in the 1980s, CCPOA’s 33,000 members today earn approximately $73,000 and pay monthly dues of about $80. These dues raise approximately $23 million each year, of which the CCPOA allocates approximately $8 million to lobbying.

The US 3 strikes laws; where did they come from, where did they start and who where biggest advocates? Would you be surprised to learn that is was the Californian prison union.

The formula is simple: more prisoners lead to more prisons; more prisons require more guards; more guards means more dues-paying members and fund-raising capability; and fund-raising, of course, translates into political influence.

And you may ask, why is Spartacus writing on this site about US prisons? To provide another example of public servants and their unions perverting public policy to benefit public servants and their unions.

Which brings Spartacus to the horrible, horrible incidents recently reported from the Northern Territory. It is saddening and sickening to hear about it. But from a public policy and public resource allocation perspective, it appears a similar phenomena occurring to that described above.

Now this post is not what Spartacus really wanted to write, but as Spartacus discussed earlier, this is the compromise that had to be made to manage the risk of Section 18C of the Race Discrimination Act.  So …

Spartacus was recently listening to an interview on SkyNews on the subject. Unlike the ABC, SkyNews tries at least to present views from both political sides. On this panel, the person “of the left” kept advocating for more tax dollars and more resources and more regulation and more legislation to prevent such incidents happenings. More, more, more. That’s correct. Rewarding failure with more powers and resources.

thus far. has anyone lost a job?  Has there been a single system wide inquiry announced or conducted?  Has there been a single change to the management and oversight of such issues?  NO!  Has anything changed on the ground since before or after the 2007 Intervention set up by the Howard Government to:

to address allegations of rampant child sexual abuse and neglect in Northern Territory Aboriginal communities.

You know the intervention in response to the Little Children are Sacred report.  The report issued in June 2005; 13 fricken years ago!

But you may also ask, are there not there already lots of powers and resources allocated to improve the welfare of Indigenous Expenditures? Well. The Productivity Commission prepares a report every couple of years on Indigenous Expenditures. This report looks at government spending across the 3 levels of government in Australia (Federal, State and Territory and Local). The most recent report was the Indigenous Expenditure Report 2017. According to this report:

  • In 2015-16, total direct government expenditure on Aboriginal and Torres Strait Islander Australians was estimated to be $33.4 billion, a real increase from $27.0 billion in 2008-09.
  • In 2015-16, the estimated direct expenditure per person was $44 886 for Aboriginal and Torres Strait Islander Australians, around twice the rate for non-Indigenous Australians ($22 356)

Yes. You read that correctly.  $33.4 billion per annum and growing.  But what is needed is more resources.

A valid question to ask is whether the lot of indigenous Australians has improved or is on an upward trajectory? Then have a look at the Closing the Gap report and draw your own conclusions. Oh and have a look at the news from the Northern Territory also.

Another valid question to ask is whether tax payers are getting value for money? Are the outcomes, as they may be, being delivered in the best way?  Well have a look again at the Closing the Gap report and draw your own conclusions

What is likely the case here is that there are too many vested interests making very good returns from keeping things as they are and in perpetuating the current model. Don’t worry about indigenous Australians or their children; the well meaning bureaucrats and others living off the current $30 billion plus tax payer dollars spent have mortgages to pay and families to feed. After all, according to the Corporate Plan of the Department of Prime Minister and Cabinet:

In 2017-18, we will work with Indigenous leaders, communities, other Commonwealth government departments, and state and territory governments to refresh the Closing the Gap targets.

Yes. Let’s refresh the Closing the Gap targets. Being accountable for meeting the targets, that’s clearly for others.  There is no accountability just accounting; $33 billion and counting.

Spartacus does not know what the answer is, but it seems doubtful that more of the same with an increased price tag is not it.

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Posted in Uncategorized | 23 Comments

Monday Forum: June 18,2018

Posted in Open Forum | 1,035 Comments