Open Forum: November 29, 2014

Posted in Open Forum | 105 Comments

What Abbott said and the media heard

Having actually listened to the same speech that is being reported in the paper today, I am not entirely sure those who are doing the reporting quite cottoned on to what the Prime Minister was getting at. The AFR, for example, starts its story on Tony’s speech thus:

Business leaders have told Tony Abbott to sell his own budget, spurning the Prime Minister’s invitation to be more vocal in backing the government’s agenda.

A business association will never back a political party, or will do so only at great risk to its own future. The ALP is little more than the union agenda in a Parliamentary setting, but business and business associations have to work with everyone and in doing so stay politically neutral. Even I, in my occasional days in the media representing business, could criticise Paul Keating and live to tell the tale because, but only because, I never strayed outside our own council-determined policy position.

If I may therefore interpolate, what the PM was saying was that if business wanted to see some of those things that business would like to see – a smaller deficit, lower taxes, a more open industrial relations environment, improved trade relations, or anything else where its own agenda happens to coincide with the Government’s – then it should start pushing these issues harder. The point is not to back the government’s agenda but to back its own, and make it known that there are certain things that business wants the Senate to pass because it will make Australia a better place.

And as just one place where business might find itself assisted by the Government’s agenda, there was another story in the AFR today, No pay rises without efficiency talks, under planned law, which in the paper was titled, “Coalition moves to keep lid on strikes”. It begins:

Ways to make workplaces more efficient would have to be discussed as part of every wage negotiation under a law proposed by the Abbott government.

I promise you this. No other conceivable government in this country will be trying to get such a change made. If business doesn’t back a government which will make such changes they may find themselves dealing with a government that under no circumstances ever will. They need only support the policy but they can do it by whispering it to each other where no one can hear or can say so in public where their support might count.

Posted in Federal Politics | 16 Comments

Plain packaging debate is back

Last Thursday the peer-reviewed policy journal Agenda: A journal of policy analysis and reform published my joint paper with RMIT colleague Ashton de Silva on tobacco plain packaging.

From December 2012 standardised packaging for tobacco products – known as ‘plain packaging’ – has been mandatory in Australia. This paper evaluates the preliminary evidence – in the form of ABS household expenditure on tobacco data – to establish whether the policy has been successful. Despite our econometric efforts, the data refused to yield any indication this policy has been successful; there is no empirical evidence to support the notion that the plain packaging policy has resulted in lower household expenditure on tobacco than there otherwise would have been. There is some faint evidence to suggest, ceteris paribus, household expenditure on tobacco increased.

That’s the abstract.

So I was very excited yesterday when I got a call from the AFR telling me that EY had done an analysis of the plain packaging policy and “found no evidence that plain packaging in Australia has reduced total consumption to date.” What is particularly nice is that they had access to better data than Ash and I had access to. So with better data EY finds the same result we find – even down to reporting a statistically significantly positive (albeit small) coefficient on the plain packaging dummy. If the plain packaging policy had worked as advertised by the public health lobby that coefficient should be negative and statistically significantly different from zero. As Ash and I conclude:

Ronald Coase famously argued that if you tortured the data long enough they would confess. In this paper we have tortured the data, but there has been no confession. At best, we can determine the plain packaging policy introduced in December 2012 has not reduced household expenditure of tobacco once we control for price effects, or the long-term decline of tobacco expenditure, or even the latent attributes of the data.

To the contrary, we are able to find a suggestion that household expenditure of tobacco has, ceteris paribus, increased. In our forecasting exercise the actual data come close to breaking through the 80 per cent confidence interval. While we do not want to over-emphasise these results, we do conclude that any evidence to suggest that the plain packaging policy has reduced household expenditure on tobacco is simply lacking.

Where does this leave the public health lobby? Well the AFR spoke to them too.

However, the University of Sydney’s professor of public health, Simon ­Chapman, vehemently disagreed.

“They are trying to use a whole lot of algebraic alchemy in a non-peer reviewed journal and what they didn’t tell us is that Australian smoking rates are the lowest in the world,” he said.

Professor Chapman was also ­suspicious of the timing of the reports as they coincide with his Thursday launch of Removing the Emperors Clothes, a book about myths and misinformation around plain packaging.

So Simon Chapman AO – professor of public health at Sydney University – has no substantial comment to make and so he simply lies, makes up on the spot an ad hom attack. Apparently the journal is non-peer reviewed. I suppose I shouldn’t be surprised, but the brazen disregard for facts suggests that he simply does not expect anyone to ever challenge his statements.

In the meantime, combined with evidence that the plain packaging policy is not working as advertised, it is working to increase the black market in tobacco.

illicit tobacco

The Gillard government had three big policies; the mining tax, the carbon tax, and plain packaging. All three were bad policies and two of the three have been repealed. It is time the repeal the third.

Posted in Take Nanny down | 51 Comments

Barnacle Bill

Tony Abbott has asked nervous government MPs to maintain internal discipline in the face of the ABC funding controversy and bad polling, reassuring them he will knock “one or two barnacles off the ship” before Christmas.

Other than with the title, I’m not sure there is much of a lesson for us moderns other than that sensibilities do indeed change. This is from 1935. Anything similar is unimaginable today although I was shocked to see Olive Oyl playing the field as she does. But for all that, thinking of our leader of the opposition as Barnacle Bill does have an appeal specially when presented as a menace as he is here.

Should also mention how well the PM’s speech was yesterday. In fact, I was sitting next to a minister assisting the minister and was saying just that to him when he said why don’t you say it to Tony. And there he was passing by as he was leaving, so I said it again to him. The speech was reported in this morning’s AFR with the headline, “Abbott puts the onus on business”.

Tony Abbott on Wednesday night appealed to the business community to help the government sell its economic agenda foll­owing a decision to dump or water down key budget measures and new evidence the budget is far more vulnerable than previously thought.

The Prime Minister told the Australian Chamber of Commerce and Industry’s Australian Business Leaders’ dinner last night that the success of his government depended partially on strong business backing.

“My hope is that you won’t just be interested but engaged in 2015. You matter and your voice is heard,” he said in a similar plea issued recently to the Business Council of Australia. “Reform or stagnation, budget repair or endless deficits. More tax or less. Your choices and your statements count.”

Prosperity travels through business; there is no other way. Crony capitalism is not the free market; it is a reversion to the mercantilism Adam Smith is supposed to have seen off the lot. Barnacle Bill is playing with fire. They created the mess that will sink our living standards while they pretend it has been those who are trying to repair the damage at fault.

UPDATE: The imagery is complete. Viva [many, many thanks] in the comments noted that Abbott is being portrayed as Popeye by Moir in his cartoons!

abbott as popeye

Posted in Federal Politics | 33 Comments

David Leyonhjelm on cutting spending

Posted in Budget | 35 Comments

Please stop recycling

A lurker sent me this message:

I assumed when my recycling bin was not picked up that I had put it out the wrong week (it is collected fortnightly), but then I got the letter.

recycling letter

Notice the ‘contaminated waste’ headline and the use of the term ‘prohibited waste’ in reference to… milk bottle lids.

No doubt if it was asbestos sheeting or car batteries in the bottom of the bin they wouldn’t have noticed :)

It goes without saying that the instructions on the bin lid referred to in the letter say nothing about removing the container lids, and this is the first I had heard of it. I do wonder what local councils do now that they don’t collect rubbish?

Yep – milk bottle lids are now ‘contaminated waste’.

Posted in Uncategorized | 70 Comments

Sydney Rally: Privatise their ABC!

WHEN: Saturday 29 November 1:30PM

WHERE: We’ll start at Railway Square as a meeting point at 1:30 until 2:00-2:15 before marching down to the Ultimo ABC Studio and stay around there for 15-30 minutes.(This may be longer on the day depending on reception.)

Australia & New Zealand Students for Liberty, in conjunction with the Australian Taxpayers’ Alliance and the Australian Libertarian Society is organising a rally this Saturday outside the Sydney ABC studios calling for the ABC to be privatised.

We are living in a world of unparalleled media diversity thanks to the internet, and there is no reason for taxpayers to be funding a media empire when there is easy access to content with the advent of the Internet, and as content becomes easier and cheaper to produce.

This is a protest against government owned media, and for removal of tax payer funds that are wasted on something that can be provided by the free market, and government crowding out other media sources. We need to show that the government hasn’t gone far enough. Show that the silent majority is sick of the vocal minority running politics and show the government that there is support for the ABC to be fully privatised.

You can join the Facebook group HERE.

Posted in Gratuitous Advertising | 17 Comments

How much tax does Tony Jones pay?

Here is a fascinating exchange on Q&A:

WALEED ALY: Okay. One element we haven’t really discussed is the role of employers in corporations in this. If we’re talking about youth unemployment, what’s actually interesting is there is quite a bit of money sloshing around multi-national corporations for hiring people.

TONY JONES: That’s because they don’t pay any tax.

WALEED ALY: Well, partly, yeah. Partly that’s true. But they don’t seem to be that eager to spend that money on a young talent and what I think has partly happened is that there is kind of the middle tier of jobs where young, educated people might slot in because they don’t have the experience to go to the top tier but they’re too educated to take sort of the more entry level jobs. That’s sort of where they’re not hiring these young people and so there’s a – I don’t know how you fix that. I don’t know if you do that with some kind of incentive thing to do with taxation or you regulate or I really have no idea how you fix it but that seems part of the problem and they’re the people actually doing the employing that we haven’t spoken about in this conversation, which I find very strange.

TONY JONES: And when I say they don’t pay any tax, I mean they pay a very small proportion of tax.

WALEED ALY: Yeah, that’s right.

TONY JONES: Now, we’ve got to move on.

WALEED ALY: I think less than you pay roughly.

TONY JONES: Much less.

This must be news to the ATO.

In 2013, there were over 6,300 businesses reporting international related-party dealings and they collectively paid $40 billion in company income tax. Our focus is to ensure this represents a fair share of tax under current international tax rules.

To be fair, I imagine that Tony Jones would like to be in a position to be paying over $40 billion in tax – who wouldn’t? But clearly he has absolutely no idea about corporate taxation at all, or the role of multinationals in paying tax, yet felt fully qualified to report that:

  1. Multinationals don’t pay tax.
  2. Then that multinationals don’t pay much in tax.
  3. He pays more tax than multinationals do.

Each and every one of those claims is false.

Posted in Media, Taxation | 51 Comments

The positive contribution coal makes to Australia

Posted in Mining | 19 Comments

Why pay for malcontents?

Andrew Bolt makes a very good point about the Human Rights Commission:

So taxpayers today pay HRC commissioners more than $300,000 each to do the nagging that thousands of other activists already do [for] free.

Well – not quite for free of course. To the extent those activists are on welfare the taxpayer is paying for them too. Yet the point is well made. There is no obvious market failure that justifies the existence of the Human Rights Commission and as such they could and should be shut down.

Reading between the lines it looks like the government is working to engineer the resignation of Gillian Triggs – that would clear the path for our good friend Tim Wilson to head up the HRC. While he would be a better appointment to the position than anyone else I could think of, the HRC would remain surplus to requirements and should still constitute a budget saving.

Posted in Budget, Take Nanny down | 19 Comments