Archive for April, 2007

Labor and same-sex relationships

At its conference last week, the ALP endorsed national legislation

which [would] allow same-sex couples to register their relationship and secure legal recognition of their relationship in areas such as property rights and superannuation benefits.

As usual, the idea did not please everyone:

The national secretary of the Shop, Distributive and Allied Employees Association, Joe de Bruyn, said the Tasmanian scheme [on which the policy is modelled] gave same-sex couples the same status as married couples, which would demean and undermine marriage. …

He said the policy would be poorly received in suburban Australia and would make it harder for the Opposition Leader, Kevin Rudd, to win the 16 seats that Labor needed to defeat the Howard Government.

We’ve discussed the rather difficult-to-detect logic of the first claim before, and some newly unembargoed questions from the Australian Survey of Social Attitudes 2005 enable us to consider the second, at least if we consider it a near-equivalent to civil unions.

The overall result, with 48% of respondents being in favour of civil unions, was consistent with two other polls on the issue, which registered 45% and 52% support. As is common with questions on this subject, there was a big ‘neither agree nor disagree’ response of 19%, suggesting that this is still an open debate for many people. A third are opposed to civil unions.
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Does the ‘fairness’ of Fairtrade coffee matter?

According to The Weekend Australian, regular commenter Sinclair Davidson and Tim Wilson of the Institute of Public Affairs are going to the Australian Competition and Consumer Commission, alleging that Oxfam has engaged in misleading or deceptive conduct over its Fairtrade coffee. According to Oxfam:

The term Fairtrade refers to an independently audited product certification and labelling system that ensures those who grow and produce coffee get a fair go. It does this by:

Paying farmers and workers a fair price for their work
Helping them gain skills and knowledge to develop their businesses in the global economy
Providing a certification and labelling system to ensure Fairtrade standards are met and that the benefits of Fairtrade get back to the farmer who produced the product

But according to Tim, drawing in part on this Cato article:

there was evidence that Fairtrade products could do more harm than good for coffee producers in undeveloped nations. He cited reports alleging producers had been charged thousands of dollars to become certified Fairtrade providers and some labourers received as little as $3 a day.

I know nothing about how much Fairtrade affects coffee producers, but if we were to be a little cynical about Fairtrade consumers it perhaps doesn’t matter much whether it is good for producers or not. As I have long argued (eg here and here) there is a market for political gestures, and how effective the gesture is likely to be doesn’t seem to be a huge part of the calculation.
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The problems low ‘unmet demand’ conceal

The latest report on unmet demand for university places shows that the number of ‘unsuccessful eligible applicants after discounting’ is down for the third year running, to 13,200. Among school leavers who did OK in their exams unmet demand is very low. Of the 68,916 home state school leaver applicants with an ENTER of 70 or above, just 964, or 1.4%, did not get an offer.

It’s fair to say that at the aggregate level unmet demand isn’t now much of a problem – especially when we consider that some of those considered academically ‘eligible’ in the discounting process, those with an ENTER of 53 or above and all those applying on another basis, probably would not be offered a place even if there were no quotas holding down the number of places universities could offer (a point I expand on in my recent CIS paper).

It’s when the applications, offers and acceptances data is examined in more detail that we begin to see problems. As I argued in my CIS paper, and which the 2007 statistics show again, there are persistent patterns of over-supply relative to first-preference applications in some fields (agriculture and science) and under-supply in others (eg in medicine, dentistry and veterinary science 50-60% of applicants with ENTERs of 90+ do not get offers).
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Same story, different headline

Me first, family later, says rich Sydney

Sydney Morning Herald, 27 April 2007, reporting that:

SYDNEY’S most affluent citizens may be the most shallow and selfish people in the Asian region, placing lifestyle and real estate acquisition over family wellbeing in their list of priorities.

You guessed it, Sydney the most selfish, shallow

The Age, 27 April 2007, reporting that:

SYDNEY’S most affluent citizens are the most shallow and selfish people in the Asian region, placing lifestyle and real estate before family wellbeing on their list of priorities.

Inequality and happiness

The evidence on higher levels of happiness in Nordic countries has been long and persistent. Could it have something to do with them having less social inequality (less envy and resentment) and more ethnic cohesion (although that is changing)?

- Fred Argy commenting on my Happy Danes post.

As Will Wilkinson’s excellent recent paper on happiness research notes, it’s hard to find consistent results on the well-being consequences of income inequality. As Will argues, one reason for the mixed findings is that the effects of various factors on happiness are ‘culturally and ideologically mediated’. So the impact of income inequality will depend on how intrinsically important equality is seen to be, how justified the differences that are perceived to exist are seen to be, and how people perceive their own prospects. If people in Nordic countries value equality highly, and that is what their society produces, that might help explain why they do well in happiness and life satisfaction surveys.

This does not, however, mean that their model can be easily transposed elsewhere. Other countries with fairly low income inequality like Germany consistently do quite poorly in surveys of happiness and life satisfaction. A 2003 paper by Rafael Di Tella and Robert MacCulloch (can’t find a link) showed income inequality and happiness inequality trends over the period 1975 to 1995 and found that while income inequality rose in the US and Britain happiness inequality was stable or falling.
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Happy Danes

Last year the new economics foundation came up with the very dubious Happy Planet Index. But there are more reputable sources of international comparisons of happiness and life satisfaction, such as the European Social Survey and the Eurobarometer.

Recent research based on the European Social Survey found very high levels of life satisfaction in Denmark. The researchers say:

One of the most consistent trends is that those [countries] with the highest levels of happiness also reported the highest levels of trust in their governments, the police and the justice system, as well as those around them. Happier people also tended to have plenty of friends and acquaintances, as well as at least one very close friend, or a partner.

Seeing this research reminded me of an article in the Christmas issue of the British Medical Journal (which seemed devoted to amusement; another article was on whether good-looking medical students are more likely to become surgeons) called ‘Why Danes are smug’, a quasi-academic satire of life satisfaction research.

The hypotheses dismissed include: ‘blondes have more fun’ (there are more blondes in less happy Sweden; they could have added that there are lots in significantly less happy Germany as well); good health (on objective indicators, the Danes rank 13th among the 15 old EU countries); climate (‘colder and cloudier version of the balmy English weather’); marriage (high rates of marriage but correspondingly high rates of divorce); and alcohol consumption (high, but heavy drinking is usually associated with lower well-being, unless the Danes ‘were drunk when they participated in the Eurobarometer surveys’).

Some hypotheses not completely dismissed:
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A singeing from Scorcher

Clive Hamilton is back on the new releases shelves with another book, Scorcher: The Dirty Politics of Climate Change. I’ve dipped into it today, and while there is much criticism of the ‘right-wing’ groups that with the ‘greenhouse mafia’ of fossil fuel industry groups Hamilton believes persuaded the government to go slow on climate change, the initial chapters also have a distinct resemblance to public choice theories favoured by many on the right about how special interest groups capture the political process.

Of course there were other reasons why the government was always likely to lean to the sceptical side of the climate change debate. Industries that produce high levels of greenhouse gas are an important part of the Australian economy, and have contributed significantly to our current prosperity – no government is likely to jeopardise this lightly. As I argued last year when examing polls on the issue, while the public seems to have accepted the alarmist view of climate change, it still seems well short of accepting the measures needed to deal with it. The political commotion that goes with every oil price spike shows how hard it’s going to be to take this issue from abstract principle to practical policies.

Also, there were tribal political reasons for doubting the views of some climate change proponents. As I noted in my review of Hamilton’s Affluenza, he is part of a political tradition that has never much liked modern industrial society. Climate change is a godsend for such people, because it gives them a scientifically respectable way – a way consistent with modern thinking – to oppose material consumption. The instinct of those who like modern industrial soceity would always be to doubt what people like Hamilton say.
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Taxpayers want their money back

This morning’s Age has the first of the Budget polls on what the government should do with one river that certainly isn’t drying up – the river of taxpayers’ cash flowing into Treasury. For some reason, unlike previous years, they have not asked about a choice between more services or less tax, but simply asked ‘Do you support or oppose cuts to income tax as part of this year’s federal budget?’

Two-thirds of the poll’s respondents think that income tax cuts should be part of this year’s Budget, and a little under a quarter oppose cuts. Taken in isolation from the missing services alternative, that roughly transposes the figures from last year, in which 29% wanted tax cuts and 68% more spending on services and infrastructure.

Though it would be interesting to see a repeat of the tax cuts versus services question, the insertion of the phrase ‘as part of’ into the question does highlight that the question in earlier years at least partly created a trade-off that did not need to be made – the government could (and did) cut tax rates while also increasing spending. Indeed, as the tax revenue statistics released earlier in the month showed despite the cuts to tax rates for 2005-6 tax revenues increased by more than 5% per person on the previous year.

Perhaps also voters are wising up to the realistic alternatives available. If we don’t get tax cuts, where will the money go? As the AFR reports this morning, the government is sitting on more than $2 billion in discretionary programs even before it dips into the surplus to finance its election promises. If you don’t live in a marginal seat, you’d be mad to prefer this pork barrelling to tax cuts. Or if the money isn’t being spent on marginal seats, it will be stashed away in the Future Fund to provide a comfortable retirement for public servants. Again, I can’t think of a strong reason to prefer that to tax cuts now. I’m in the 24% of voters who ‘strongly support’ tax cuts.

Gay neighbours

A sketch in one of the early 1990s comedy shows (Fast Forward?) used a suburban house auction to make a point about Australian prejudices. With Aboriginal actor Ernie Dingo posing as a neighbour during the auction the bidders melted away, and his accomplice in the audience was able to buy the house at a bargain price. This study by Queensland academic John Mangan and co-author Vani Borooah, reported in the SMH yesterday, tells us who we should send to auctions to keep prices down in a range of Western countries, including (partially) Australia, at least over the years 1999-2000.

Though overall what the survey shows is that most people are not fussed by the groups described – people of a different race, Muslims, Jews, immigrants or foreign workers, and homosexuals – Muslims or homosexuals are the least preferred as neighbours. For Australia there was no question about the religious groups, but less than 5% were worried by people of another race or by immigrants and foreign workers, while a quarter did not want homosexuals as neighbours.

The paper does not report it, but this question has been asked before in Australia by Roy Morgan Research. In 1983, 34% of respondents did not want homosexuals as neighbours, while in 1995 it was 25%, the same figure as recorded at the turn of the century. The other groups triggering non-trivial objections in 1995 were Aboriginal people (12%), members of a new religious movement (27%) and drug addicts (74%).

For all these I’d guess that concerns about how a member of that group would behave toward their neighbours (ie the respondent) influence answers, but I am not sure whether this is the case with homosexuals. I’m not sure that any of the gay stereotypes are linked to behaviour that would be regarded as uneighbourly, except perhaps their musical tastes when indulged loudly – which in any case tend to be shared with the far more numerous teenage girls who never turn up in prejudice surveys. It’s perhaps an aversion to what the respondents think gays do in private, which remains unpopular decades after polls recorded majority opinion for decriminalisation.


This week Treasury Secretary Ken Henry launched a Treasury Working Paper called ‘HECS for TAFE: The case of extending income-contingent loans to the vocational education and training sector’, by Bruce Chapman, Mark Rodrigues and Chris Ryan. This is an idea I have supported myself; there is no intrinsic reason why where a course is placed in the Australian Qualifications Framework should determine whether a student should have to pay up-front or being able to take out an income-contigent loan. As with many aspects of policy, the difference is due to a quirk of history rather than principle. In the 1970s, the Commonwealth acquired funding responsibility for higher education, but vocational education was left with the states. So HECS was introduced in 1989 to help the Commonwealth discharge its resposibilities, but vocational education was left as a state responsibility.

While I support the principle of not differentiating between vocational and higher education, I would not support the version of income-contigent loans apparently proposed in the Chapman et al. paper. Their calculations seemed to be based on a straight application of HECS, but they are vague (apart from a footnote which only semi-clarifies the situation) on how they would handle the current debt surcharge element of HECS-HELP.

At universities, students paying their student contribution amount up-front get a 20% discount. Or to put it another way, if you don’t pay up-front you pay a debt surcharge of 25%. (eg say a subject costs $1,000. If you pay up-front with a 20% discount you get $200 off, leaving a price of $800. If the real price is $800, $200 extra is 25% more.) For full-fee students, the surcharge is more obvious. If undergraduate full-fee payers take out a FEE-HELP loan, they pay the advertised price plus 20%.
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