Archive for November, 2008

All talk and little action on greenpower

We know from previous polling that people are reluctant to pay the increased energy prices that will be required under the ETS.

Yesterday the ABS put out some survey results that let us do a revealed preference test on willingness to pay more for greenpower electricity.

In March this year, just under a third of people indicated that they were willing to pay more. But another question on how many are actually paying more came up with a much lower result – 5%. Talk is cheap, greenpower is expensive.

The question about willingness to pay has been asked four times: in 1999, 2002, 2005, and 2008. In the first three surveys willingness to pay was stable on around a quarter of respondents. So the third recorded in 2008 is a clear change.

Yet given the saturation media coverage of climate change issues – I set myself an even bigger task than I realised in going through the results of a daily Google news search for my monitoring of alarmist, denialist and NIMBY stories – it is a clear but small change. There is a major gap between what is required to reduce carbon emissions and what Australians are prepared to do themselves to achieve that reduction.

Over-qualified workers

NATSEM research released yesterday confirmed that on average higher education pays off. Compared to someone with Year 12 education only, the average graduate will have lifetime earnings of $1.5 million more, after deducting forgone earnings while studying.

But the annual ABS Education and Work survey, released today, again suggests that this average may conceal large variations in actual graduate outcomes. Despite the good-as-it-is going-to-get economic conditions (the survey was carried out in May), 26.3% of graduates were working in jobs that the ABS occupational classifications system says require vocational or no post-secondary education rather than higher education. That’s only .2% lower than last year.

Work I have done on data from the 2006 census suggests that it is the generalist degrees, and particularly arts (with the exception of those with degrees in ‘philosophy and religious studies’), that drag down the average. About 40% of other Arts graduates are in jobs that don’t require higher education.

There are still big gaps in our knowledge about this group of seemingly over-qualified workers, particularly on the extent to which their employment outcomes are either wanted or, if not wanted, temporary.

One year into Opposition

There have been plenty of first Rudd anniversary stories in the media, which generally rate the government as politically successful. This is not surprising. It was the Liberals who risked serious trouble in Labor’s first year. Though I did not agree with those predicting the Liberal Party’s demise, I have been quite pessimistic about the party’s long-term prospects.

At 45-55 in the two-party preferred Newspoll, Coalition support is a little worse than the election result but better than where the polls had the party for much of 2007. Things haven’t gone dramatically backwards.

The Australian Election Survey found that the party base – the proportion of people who generally think of themselves as Liberals – was intact at about 36%. Apart from an increase to 40% in 2004, it has been around that level since the late 1970s. Though the AES sample of under-25s is too small to be reliable, it does suggest on-going problems there, with only 27% identifying with the Liberals.

In my view the defeat was partly due to the issue cycle moving against the Coalition, but now there are some signs it is turning back towards issues on which the Coalition has more credibility. If the key issues remained who could best spend the dividends of prosperity the political debate would have remained very much on Labor territory.
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A good rule-of-thumb on deficits

Earlier in the year, there were signs that the general public had picked up the then orthodoxy that what we needed was a contractionary fiscal policy, to the point of not wanting their tax cuts in cash (there was support for diverting them to superannuation).

But it seems that the flipside orthodoxy – that we need deficits in the downside of the economic cycle – has not (or not yet) entrenched itself. A Newspoll published today found that 56% of voters would be concerned about the budget going into deficit next year.

As Club Troppo readers would have predicted, Fred Argy isn’t impressed.

Regardless of the purely economic arguments on this subject (few economists think that temporary deficits are of major concern), I think this is quite a good result. On the assumption that few voters will ever acquire sophisticated economic knowledge or understanding, and that they will use rules-of-thumb instead, an anti-deficit rule of thumb is the one to have.

In other countries with weaker anti-deficit cultures, borrowing is used to finance normal recurrent expenditures and avoid budgetary discipline. Australia is in a much better long-term position than most other countries for having taken its anti-deficit attitudes beyond what economic theory would recommend.

The confusing choice for Melbourne’s Chief Garbage Collector

By far the most useful and important thing the Melbourne City Council does is to take away garbage, but for some reason the position of Chief Garbage Collector, aka Lord Mayor of Melbourne, is being keenly contested.

There are eleven candidates, at least seven of whom are campaigning seriously if the contents of my letterbox and the Google ads when I typed in ‘Melbourne City Council’ are a guide.

I told Tim Wilson, who is running for Deputy Lord Mayor on the Peter McMullin ticket, that I would vote for him. But that was before I realised that McMullin was a member of the ALP, and I cannot vote for Tim without also voting for McMullin. Admittedly, McMullin is of the multi-millionaire former Deputy President of the Victorian Employers Chamber of Commerce and Industry kind of Labor, and his campaign literature has the crucial words ‘rate freeze’ in it, but I’m not sure that I can bring myself to put a ‘1’ next to the name of a member of the ALP.

Of the other campaign materials I have received, pollster Gary Morgan’s promise of 5% cut in rates certainly caught my eye. And I feel I owe Morgan something for providing survey results for free. On the other hand, Morgan has a famously abrasive personality. When he used his polling company to see who was the frontrunner for the Lord Mayor’s job, he published the results with this fine example of pollster neutrality in the comments:
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Should councils second-guess household arrangements?

There doesn’t seem to be a caretaker period for the currently underway (by postal ballot) Melbourne City Council elections, because amidst the large quantity of campaign materials from the candidates for Lord Mayor came a letter advising me of a plan to restrict to one the number carspaces in new residental developments in Carlton.

I’m not sure what any of the candidates think about this proposal. Just as Krystian Seibert (getting his second mention in less than a week) argues convincingly against minimum car spaces, I don’t think there is adequate justification for a maximum number. While it is true, as the letter points out, that there is good public transport in inner Melbourne, that’s only useful if residents don’t have to travel anywhere else.

It also assumes that households are interdependent members of the same family likely to travel together. That may be true out in the suburbs, but in the inner city there are lot of group households where people share the rent and bills but live otherwise separate lives.
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The economy rises as an issue

A Newspoll earlier in the month suggested that the issue cycle may have started to turn, with the economy up and the environment down. Now a very differently structured poll from Roy Morgan Research finds the same pattern.

The Newspoll gives respondents a set list of issues, all of which can be rated as important. The Morgan poll asks respondents to say, without prompting, which problem they believe is the most important one facing Australia today. The answers are then coded by the pollster.

Morgan finds that the proportion of people nominating the economy has increased from 23% to 30% in the last six months, and more than doubled since 2005. The environment is down 5% to 25% in the last six months, but still massively above its 2006 low point of 8%.

The big losers as problems since 2005 are terrorism (down from 19% to a *) and since 2006 various issues that preoccupy the middle-class soft left, presumably reflecting the demise of the Howard government.

While health and education continue to rate strongly in Newspoll, health doesn’t rate at all in the Morgan survey and education is only on 2%. This is consistent with my view that though voters want better health and education services, they are not likely to be the top priority when economic hard times hit.

Taxi users ripped off again

As I noted in May, it is nearly 30 years since the CIS started publishing critiques of taxi regulation, with the most recent publications being Jason Soon’s 1999 paper and Krystian* Seibert’s 2006 Policy article.

The basic problem is that taxi licences are limited in number, and are sold for huge sums. Jason’s article reported that a Victorian taxi licence cost $265,000 in 1998. 10 years on an Essential Services Commission report put the licence cost at nearly $480,000. The cost of servicing this capital adds massively to the cost of running a taxi, and adds significantly to the fares paid by taxi users. Taxpayers suffer too in having to subsidise taxi use by some disadvantaged groups.

The ESC report points out other problems in the industry as well, such as the depots to which taxis must be affiliated and pay fees which are ‘likely to include an element of “monopoly rent”. ‘

In its latest round of fiddling at the edges of the issue, the Victorian government has announced some extra licences and a fare increase of 6.1%, taking the total fare increases to more than 10% for the year. It also offers what I think is irresponsible investment advice:
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Whingeing academics

According to a report in this morning’s Age, a National Tertiary Education Union survey of university staff presents ‘a bleak picture of education quality and morale.’

The trouble with these surveys is that academics are always complaining, so it is difficult to know whether this is ‘whingeing as normal’ or whether there is anything unusual going on. It is always worth checking academic impressions against what evidence we possess.

The Age reports that more than half of academics do not believe that their university offers a better education than five years ago. Yet that is not the perception of students. The Course Experience Questionnaire continues to record improvements in satisfaction with teaching, and indeed most aspects of university life are showing long-term increases in satisfaction. The one clear exception is the ‘appropriate assessment’ scale, which is designed to explore whether ‘assessment promoted deeper forms of learning’. The questions in this scale are to do with whether more than a good memory is needed to do well.

An anonymous academic claims that

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A wet argument for expensive water

My friend Chris James, a regular spokesman for the Victorian Employers’ Chamber of Commerce and Industry, drew the short straw today when he had to defend customers in cafes being charged for tap water.

One person who called 3AW claimed to have had to pay 40c for water, which on the water prices quoted in The Age article is at least 500 times the cost even for large glass. Extreme capitalism!

According to Chris, it is a voluntary charge and the money is to be used for water-saving measures. But when interviewed on radio he could not explain how we could be sure that the money would be spent this way, or why if water-saving measures are necessary they should be be paid for via a levy on water. Indeed, a shift in relative prices against water would lead to more consumption of other drinks that use far more water in their production than tap water does.
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