Pearls and Irritations

Professor Ross Garnaut has spoken many times about our great complacency and our unwillingness to undertake the types of economic and social reform that we saw in the Hawke/Keating periods and in the early days of the Howard Government – think, GST.

Have the golden days of reform gone forever?

The former head of Treasury Ken Henry said that he has never known a period in which the standard of public debate on important issues is as bad as it is today. Ross Garnaut has spoken with obvious frustration about the ‘diabolical problem’ of sensible policies on climate change.

In April 2012 Greg Dodds and I posted an article on this blog ’The Asian Century and the Australian smoko’. We argued that whilst we responded well to the opportunities in Asia for over a decade we went on ‘smoko’ from the mid-1990s. Our Anglo-Celtic both enriched and trapped us. Fear of Asia was promoted.  John Horward gave us permission to be ‘relaxed and comfortable’ again, to have a break from the Asian challenge and opportunities. The result was two decades of drift by business, universities, schools and the media in equipping ourselves for the region .Complacency set in.

Ross Garnaut poses questions for us again…

‘Do we have a problem that requires business adjustment, income restraint and new reforms to lift productivity? Or is the Australian ‘she’ll be right’ approach to economic policy in the early 21^st Century good enough? Economic modelling for today’s Forum by Victoria University’s Centre of Policy Studies suggests that Australia does indeed have a sizeable problem with the real prospect of falling living standards to 2020 if nothing is done to avert it.’

Can we counter those vested interests in the community, those ‘diabolical problems’ that consistently run good policies off the rails? And there are serious obstacles to address. There are powerful vested interests that are hostile to risk taking and want to hold on to privileged positions. They don’t want reform and change.

Media

In our 24/7 media cycle the short-term, the partisan, the confrontational and personalities dominate. The attention span of the media on important policy issues is very short. Our Canberra press gallery, including the ABC, is more concerned about politics than policy. News Corporation, which controls 70% of the metropolitan newspaper circulation, runs a partisan agenda that is unprofessional and self-serving. Just look at its denialism on climate change. News Corp distorts and debases almost every public policy issue it touches. What an awful legacy Rupert Murdoch will leave!

The mainstream media is a serious problem not only because of concentration of power but it still influences the agenda in other under resourced media. Social media, even bloggers are filling some of the vacuum but it is nowhere near enough.  Why doesn’t the ABC establish a high quality online policy portal committed to articulating the key issues that we face?

Lobbying

The World Economic Forum in its 2013/4 Global Competitiveness Report on ‘favouritism in decisions of government officials’ ranked Australia poorly, well behind such countries as Singapore,Sweden,Netherlands, ,Norway,Japan, Germany and the UK. In transparency in government decision making we also ranked poorly.

So much of the influence on governments is not exercised in public and contested discussion. The secret lobbying in Canberra and the state capitals has shown how lobbyists can effectively twist the arms of ministers. Lobbyists know that they cannot win an open debate with the public, so they exercise their enormous influence in secret. Think of what the Australian Minerals Council has done to corrupt good public policy in the resources sector. Consider what happens in the health field with the secret influence of the AMA, the Australian Pharmacy Guild, the Private Health Insurance funds and Medicines Australia. We will never get worthwhile health reform until these secretive and powerful vested interests are publicly confronted and forced to publicly defend their positions. And beyond these few examples there is the influence of the Australian Hotels Association in promoting the scourge of alcohol. We need to address the destructive power of the lobbying industry and its corruption of the public interest and public debate. Favouritism in government decision making and a lack of transparency is a major obstacle to good policy making.

Political donations

Associated with the corrupting power of both in house and third party lobbyists is the ability of powerful and wealthy groups to win favours from politcians with political donations. The NSW ICAC inquiry has shown what charade donations have made of any sense of an open and honest public discourse. We need to consider the banning of all donations at both national and state levels. Our political system is being bought by wealthy vested interests.

Think Tanks

Think tanks should be providing us with independent and public advice on important public issues. But the most influential ‘think tank’ is the Institute of Public Affairs, which is secretly funded by wealthy companies like big tobacco and the mining sector. It runs phoney campaigns in service of wealthy private and secret funders. The Sydney Institute pretends that it is an independent forum, but never discloses the sources of its funding. These ‘think tanks’ that refuse to disclose their donors should be refused media access, certainly by the ABC, and denied tax deductibility for donations. If we are to have an honest and transparent public debate action must be taken against these phoney think tanks.

Business Economists

Most of the business economists that we see so regularly on TV or read in our newspapers are employed by the banks. The 19 member Committee of Australian Business Economists is dominated by bank and financial service employees. Some of these business economists make an important contribution to public debate on broad economic issues, but how often do they challenge the power of their employers who increasingly dominate our economy, particularly in the fast-growing area of superannuation and funds management.

We used to have a number of independent “public intellectuals” usually from the universities. But with the exception of a few university people such as Professor Ross Garnaut, Professor Bob Gregory and Ian McAuley, these public commentators are few.

With a few notable exceptions our climate scientists are remarkably tongue tired in the face of so much self-interest and crude ideology. Don’t they care about climate change? Do they feel that politics is beneath them?

Dubious ‘contributors’ to this public debate are the large number of accounting and consulting firms who undertake ‘modelling’ to produce what their clients want. I am not sure how professional and independent some of this modelling is. Ross Gittins has described the problem of recent modelling on the effect on electricity prices if the Renewable Energy Target is abolished. He said ‘regrettably economic modelling has degenerated into a device for bamboozling the public’

Leadership

A key to the earlier periods of policy reform was political leadership supported broadly by business and the trade unions. I do think that we respond to strong leadership if we feel that the sacrifice is worth it in the national interest and that it is fair. Unfortunately today we so often have a lack of leadership and a partisan and coarse public dialogue.

Strong and capable leaders will help to outflank the obstacles I have mentioned. But the obstacles are major reasons why complacency is winning the day.

We are still enjoying the benefits of the reforms of the 1980s and 1990s. Can we shake ourselves free of our complacency and partisanship and stop fooling ourselves that ‘she’ll be right’.

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