Once upon a time governments were proud of their efforts and would defend critiques in the media.
There have been 20 devastating indictments of this miserable government in the pages of The Australian over the past week - with ne'er an excuse in sight.
Henry Ergas' article on Monday is simply brilliantly incisive: plainly unanswerable as usual.
Ross Fitzgerald's item is of similar quality. [Saturday Inquirer 8 /9/12
We are living in interesting times: I am moved to make a tasteless comment.
It is without foundation and in very poor taste.
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Julia Gillard's desperate announcements are in aid of her own survival, not her party's
ROSS FITZGERALD
From:The Australian
September 08, 2012 12:00AM
IN a desperate effort to hold off a leadership challenge from Kevin Rudd, Julia Gillard has combined her ruthless disregard for the long-term future of the Labor Party with her ferocious desire for self-preservation, the now familiar hallmarks of her leadership.
The Prime Minister has demonstrated that she is prepared to break solemn promises, walk away from long-held principles and policies, do "whatever it takes" to cling to her job and thereby prevent a Rudd return.
There have been rumours for months that Rudd and his supporters have been making the case for his return some time this month or next. That included floating the policy changes he would make to win the public approval denied Gillard since her now notorious broken promise not to introduce a carbon tax.
Rudd is said to have promised changes to the carbon tax should he be returned to the leadership, including scrapping the floor price for the carbon tax that was to take effect in 2015.
Significantly, the Prime Minister suddenly dispatched Climate Change Minister Greg Combet to make an embarrassing policy backflip and announce the scrapping of the carbon floor price of $15 a tonne.
Combet's announcement came just weeks after the introduction of the carbon tax and after months of forceful arguments as to why a floor price was critical. As the floor price was not due to come into effect for another three years, the only logical explanation for the rushed announcement is that Gillard believed Rudd was gaining support for his policy idea and that she was increasingly vulnerable to a challenge.
The government's "power sharing" partners, the Greens, showed their true colours when leader Christine Milne embraced this policy change even though it could lead to a collapse in the carbon price.
Milne and her party have long argued for a carbon price exponentially higher than the present level to make renewable energy price competitive with coal, yet she raised no concerns about scrapping the floor price. Combet and Milne both argued that they expected the EU price to be much higher in 2015 than the floor price of $15 a tonne. That prompts the question of why scrap the floor price, if that is in fact their belief?
The obvious truth is that the government and the Greens expect the EU price to remain low but do not want to be accused of imposing a carbon tax that is so obviously out of step with the small-scale carbon price schemes operating in Europe.
The Australian business community has been quick to demand an immediate cut to the present tax of $23 a tonne to bring it closer to parity with Europe, where trading has been at less than $10 a tonne. As Europe is in the throes of a financial crisis, there are serious doubts about any significant recovery in the price of carbon.
This scenario has serious implications for the federal budget, as modelling has been predicated on a price higher than $15 a tonne. If the cost of the compensation outstrips revenue from the carbon tax a yawning budget black hole will appear.
While the Greens generally show scant regard for potential budget blowouts, there can be no policy justification for this decision as it is likely to lead to a lower price on carbon.
Perhaps the solution to that minor piece of hypocrisy was revealed the next day when Health Minister Tanya Plibersek announced a $4 billion dental health program, with Greens senator Richard Di Natale standing at her shoulder for the announcement. It seems that to head Rudd off at the pass, the government needed the Greens on side. The Greens extracted their price in the form of the dental program.
In their haste to make the announcement, the basic details were not worked out and confusion followed over whether any funding had been identified. Plibersek claimed "there is not billions of dollars in the budget for this" and "we need to find a new $4bn".
Gillard claimed there would be "a large saving" to come from ending a current program that targeted chronic dental health problems. The Health Minister's office then confirmed no funding had been allocated in the budget forward estimates for the axed dental health program and it was therefore not possible to count its closure as savings.
Given that this presently unfunded dental health program will not begin until 2014, well after the next federal election, the timing of the announcement adds to the air of desperation surrounding Labor. Surely it would have made more sense for the government to hold back until the election campaign.
The rash of announcements has caused some Coalition strategists to speculate that Rudd's support is at a sufficiently high level for Gillard to be considering an early election.
The government's response to the Gonski review into school funding has added to the speculation of an early election.
Schools Minister Peter Garrett declared last weekend that "this is a once-in-a-generation opportunity for us to support the needs of every kid in every classroom in Australia" - words eerily reminiscent of Rudd, who, as prime minister, often overreached in policy pronouncements.
Such grandiose claims came back to haunt Rudd, as they will Gillard.
The response to the Gonski review will not be fully implemented until after another three elections and seven budgets, and Gillard knows there is little likelihood of these reforms surviving beyond the next election.
It is clear Gillard's overriding priority is her short-term survival as Prime Minister, rather than the long-term survival of the government. While any modest rise in the opinion polls may give the Gillard camp renewed hope that she can cling to the leadership, they may need to reconsider their plan.
Small improvements in the opinion polls could play into Rudd's hands. Rudd supporters argue his return to the leadership would give the party a boost of at least 5 per cent in the primary vote.
When Labor's primary was hovering at 26 per cent, a Rudd boost to 31 per cent was a moot point. If Rudd as leader were able to provide a lift closer to 40 per cent, that would make Labor competitive. It would be hard for backbenchers to reject such an opportunity.
Meanwhile, MPs are watching Gillard closely as these big-ticket announcements keep rolling out to shore up her leadership. Come the election, the policy cupboard may well be empty.
Emeritus professor of history and politics at Griffith University, Ross Fitzgerald is the author of 35 books
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The government subverts the cost benefit analysis of its legislation
BAD government is no excuse for bad governance. Yet an interim report just released by the Productivity Commission highlights the damage this government has done to a key element in the integrity of public decision-making: the process of scrutinising proposed regulations.
In fact, so dire is the situation that in what must be a first the government is on the record as refusing to answer questions put to it by the commission in the course of an inquiry. That inquiry examines how effectively the commonwealth, states and territories analyse the costs and benefits of proposed regulations.
As part of its inquiry, the commission surveyed jurisdictions about the procedures by which those analyses (known as Regulation Impact Statements) are prepared and reviewed. Alone among the jurisdictions surveyed, the commonwealth refused to answer a host of questions related to the RIS process.
That those questions would embarrass the government is hardly puzzling. For, since coming to office, Labor has done whatever it can to undermine regulation review. This is not to suggest the system Labor inherited was perfect - far from it. Yes, an appraisal of that system undertaken by the OECD on the basis of the Howard government's RIS guidelines gave it high marks. In reality, however, there was plenty of room for improvement, as the Banks review of regulation in 2006 showed.
But, rather than improvements, Labor changed the system for the worse. The Office of Best Practice Regulation, responsible for designing and enforcing the regulation review guidelines, was transferred from the Productivity Commission to the Department of Finance. That done, Labor took the guidelines the OECD had endorsed and trashed them.
In a move the PC describes as "at odds with the Regulatory Impact Assessment framework", ministers were allowed to select the alternative options considered in a RIS and to retrospectively modify a RIS after a decision had been taken. Nor was there any obligation to disclose that had been done. And, to make matters worse, the
government dropped the requirement that of the options considered in a RIS the option with the highest net benefits to the community be the one recommended.
But it did not end there. Rather, an unprecedented number of important new regulations were exempted from the requirement for a RIS. And, though more than 70 exempted regulations should have been subjected to post-implementation reviews, only nine such reviews have been completed.
The unsurprising result is that the quality of Regulation Impact Statements has reached an all-time low. Exemplary of the problems is the Illegal Logging Prohibition Bill, which has just cleared the House of Representatives.
The legislation itself is nothing to be proud of. It imposes on businesses that import timber or timber products an obligation to verify that the timber has been legally logged, with up to five years' imprisonment for failing to do so. Although no more than 10 per cent of Australia's timber imports are at risk of being illegally logged, the legislation will increase prices for all timber products by 3 per cent or more. That slug on consumers is championed by the Greens, who having done their best to destroy the Australian timber industry are now determined to cripple imports. And the promise of import restrictions has won the Greens the support of beleaguered domestic producers and of the unions, resulting in an unholy coalition of victims and tormentors.
So as to help prepare the RIS for this depressing venture, the department responsible for the legislation commissioned modelling from the Centre for International Economics.
To its credit, the CIE concluded the costs of the government's policy were up to 10 times greater than the benefits. Far from preventing illegal logging, the legislation would simply divert illegal timber to other markets while harming Australian consumers. Domestic producers would be better off, but few environmental gains, if any, would be achieved.
The department, however, was not so easily discouraged. Instead, it commissioned a new round of modelling from within government, and in its modelling instructions slashed the CIE's estimates of compliance costs. Indeed, doubtless by coincidence, its adjustments to the CIE's methodology proved exactly sufficient to bring the estimated benefits of the government's preferred option into line with the costs. To get the proposal over the line, the department pointed to additional "intangible" benefits that it had never clearly specified, much less quantified - ignoring the CIE's finding that there was "no reason to believe" inclusion of intangibles "will change the conclusion that the benefit to cost ratio is very low".
The outcome is a RIS that heartily endorses the government's position. Even the most superficial reading of that RIS suggests it is half-baked; it takes only a moment's closer examination to reveal it has never been put in the oven. But the mere fact that the ratio of benefits to costs had been increased tenfold plainly did not arouse suspicion in the Department of Finance. Rather, the RIS received the good housekeeping seal as fully compliant with RIS quality requirements.
Unfortunately, the Climate Change Department's RIS supporting the recent backflip on the floor price for the emissions trading scheme shows that is no isolated incident. This RIS must have involved considerable difficulty, as only months earlier the same department concluded that, on balance, a floor price was desirable. But displaying the agility usually reserved for eels slithering into the mud, the new RIS asserts both that future carbon prices would be "significantly higher" without the legislative amendments than with them, and that future carbon prices (and notably those in the budget) would not be changed by the legislative amendments.
One might have expected seeing assertions thus locked in mortal combat to trouble the Department of Finance; instead, yet another questionable RIS obtained its tick of approval.
Little wonder the Commission concludes that "a degree of cynicism is pervading the regulatory landscape in response to the perceived lack of integrity in regulation decision-making". And little wonder we are drowning in ill-conceived regulation, with all the harm it does to productivity.
That is not to claim the RIS process could ever suffice to prevent regulatory creep. The reality is that from time to time governments will take poor decisions.
But while poor decisions are inevitable, poor processes are not. And by undermining transparency and accountability, poor processes make poor decisions more likely and more durable.
Labor therefore knew what it was doing when it neutered the regulation review process: it was allowing truly shocking measures, such as the illegal logging bill, to get a free kick. It is now up to the Coalition to show it is serious about doing better.
Additional material at http://blogs.theaustralian.news.com.au/henryergas/
