Month: May 2009

Should the new YA ‘independence’ test be delayed?

~ Andrew Norton ~ 29 Comments

It’s not often that a classical liberal unites with a Labor government in support of a more egalitarian income distribution. But that is what I am doing in the current controversy over changes to the ‘independence’ criteria for Youth Allowance.

What ‘independence’ means in this context is that Youth Allowance applicants are assessed only against their personal income, rather than against personal and parental income. In the budget, the government announced that it was abolishing the two softest work tests of ‘independence’. These were working 15 hours a week for 2 years (so that undergaduates working median part-time student hours would qualify automatically for their last period of study) and earning just under $20,000 over an 18 month period since leaving school (which effectively permitted anyone taking a gap year to qualify, though the YA cash would not start to flow immediately in their first uni year).

Like the government, I believe that this was turning YA not just into middle class welfare, but upper middle class welfare. Bruce Chapman’s study, though on a limited sample, found that there were more YA recipients in $100K+ households than <$50K households. My own work on the 2006 census found evidence of behaviour consistent with teenagers from higher-income households making themselves eligible. While there was only a 5% increase in uni enrolments between ages 18 and 19 for households likely to be fully eligible for YA support, and 13% for partly eligible households, in $100K+ households the increase was 29%.
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No bribes needed to support the budget

~ Andrew Norton ~ Leave a comment

Like last year, Australian voters have shown that they don’t need to be bribed to approve of budgets.

The Nielsen poll, like other polls, found between one in four and one in five voters thought that they would personally be better off as a result of the budget (there are a lot of pensioners). But heading on to three times than number thought that it was fair (56%) or said that they were satisfied with it (58%).

The Newspoll reported in The Australian found that twice as many voters thought that it would be good for the economy (45%) as thought it would be good for them personally (22%).

Whatever its merits as an economic document, the Budget was well handled politically by the government. The manipulation of expectations I noted last week in higher education was successful across portfolios. The Essential Research before-and-after question shows that good reactions exceeded forecast good reactions, and actual negative reactions were lower than anticipated negative reactions.

The only problems for the government are a narrow majority (56%) against lifting the retirement age in the Neilsen poll, and in the Newspoll only 30% of respondents believing that the budget will be back in surplus in six years. Not even Labor voters (49%) believe the government on this one.

Intellectual decline on the right?

~ Andrew Norton ~ 16 Comments

The theme is the intellectual decline of the right; I really am curious; can anyone write a decent foundation that they are in decline from.

commenter Charles in response to my post on whether the crisis in American conservatism will spread to Australia.

There are different elements to political movements, often with overlapping memberships, which can include interest groups, social groups, political parties and intellectuals. The intellectuals will often have influence well beyond their numbers, as the people most able to coherently articulate the movement’s goals and arguments. Their loss of confidence in their own side can be a sign of an actual or coming crisis in the broader movement; while their success in public debates and growing confidence can be a sign that a movement is on the rise.

In American politics, we are seeing that loss of confidence. Richard Posner’s own recent book and the post I quoted yesterday are one sign of this. Here is a man with ideas about markets that have in the past been on the radical end even for free marketeers (such as his idea for a market in babies) who now says that ‘we need a more active and intelligent government to keep our model of a capitalist economy from running off the rails.’ We have former Reagan adviser Bruce Bartlett calling for tax increases in a new book. Conservative intellectual Ross Douthat co-wrote a book calling for the Republicans to support government intervention to win back the working class vote.
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Will the crisis in American ‘conservatism’ spread to Australia?

~ Andrew Norton ~ 23 Comments

A reader suggests that there may be some post fodder in the Richard Posner’s recent comments about the decline of the American ‘conservative’ movement. These are the key passages:

My theme is the intellectual decline of conservatism, and it is notable that the policies of the new conservatism are powered largely by emotion and religion and have for the most part weak intellectual groundings. That the policies are weak in conception, have largely failed in execution, and are political flops is therefore unsurprising. The major blows to conservatism, culminating in the election and programs of Obama, have been fourfold: the failure of military force to achieve U.S. foreign policy objectives; the inanity of trying to substitute will for intellect, as in the denial of global warming, the use of religious criteria in the selection of public officials, the neglect of management and expertise in government; a continued preoccupation with abortion; and fiscal incontinence in the form of massive budget deficits, the Medicare drug plan, excessive foreign borrowing, and asset-price inflation.

…And then came the financial crash last September and the ensuing depression. These unanticipated and shocking events have exposed significant analytical weaknesses in core beliefs of conservative economists concerning the business cycle and the macroeconomy generally.

I’ll leave detailed discussion of the American scene to others who follow it more closely than I do, though Posner’s list seems broadly right to me. What struck me most when I read it was (again) the large differences between the political right (I’ll use this is as a less confusing catch-all term than Posner’s ‘conservatism’) in America and Australia.
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The tyranny of the TER?

~ Andrew Norton ~ 14 Comments

In the SMH this morning, people were lining up to proclaim the end of Year 12 results as the dominant method of selecting university students.

The University of Western Sydney vice-chancellor, Professor Janice Reid, said the UAI obsession needed to end. “The UAI is a great mass sorting system,” she said. “It isn’t, however, really a good predictor of a person’s capacity to study or complete a degree.”

This is an old complaint. Many years ago – at least as long ago as 1997, when she was dumped as education minister – Amanda Vanstone gave a speech called the ‘tryanny of the TER’. Yet as with many ideas for improving access to higher education, we have reason to be sceptical, because virtually all of them have long been common practice in the higher education sector. Few people realise that less than half of all commencing bachelor degree students are admitted based on their Year 12 results. Even if we pull out of the population those admitted based on prior higher education results – as I have in the chart below – only 56% arrive at university on the strength of their school results.

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A 5/10 budget for undergraduate teaching

~ Andrew Norton ~ 5 Comments

The interest groups at last night’s education budget lock-up (I went along representing the U of M) were pretty happy with what they heard. It’s true that with expectations having been managed down for months, what was actually delivered significantly exceeded them, particularly for research, infrastructure and student income support.

But on the core of the system – undergraduate education – the government deserves no more than 5 out of 10.

As announced earlier, they are going to exclude from the demand-driven system the private providers of higher education and the TAFEs offering degrees. While there is a commitment to consult with private providers about their future role, the demand-driven system is not going to deliver its full potential benefits without them being incorporated from the start.

The government has recognised – as per my Issue Analysis paper from February – that it needs to look at the prices received by providers. They are setting up a review to report by 2011. But I think their conceptual framework is mistaken; there is not an appropriate ‘internationally competitive’ funding level, but rather multiple funding levels for different students, courses, and institutions.
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Correction about John Quiggin

~ Andrew Norton

Generally, the time to deal with errors in comments is while the thread is still active. However, last August one of the regular commenters made a point about John Quiggin saying that ‘true to form the professor opposed every major economic reform in the 80’s and 90’s and showed up to give evidence against Workchoices and workplace reform at a hearing appearing “ not as an economist”…’.

Recently, this was repeated in the comments thread of another blog, with an unflattering conclusion drawn from it, prompting Professor Quiggin to want a correction at the source (there is some dispute about where it started, but the earliest Google link is to this blog).

For the record, Professor Quiggin did not appear at a WorkChoices hearing, but instead signed a petition on the subject which referred to the expertise of the signatories, including in economics.

Update: JC has asked me to note that he made the comment in question without first checking its accuracy. He retracts it and apologises for the mistake. As he says, ‘it’s important that criticisms are based on firm ground.’

The welfare state and social solidarity

~ Andrew Norton ~ 5 Comments

After the Jessica Gilbey episode, more evidence that (depending how you look at) shared participation in the welfare state is the basis of social solidarity, or that welfare hand-outs bring out the ugly, grasping, envy-ridden side of human nature:

“The fact that I’ve fallen through the cracks has absolutely destroyed me,” says Melbourne documentary maker Kerry.

“The most annoying thing is feeling like I’m the only one, like everyone else is getting it but me,” says PhD student Chris.

“Self-funded” retiree Stuart is more measured: “I was disappointed in as much as the Government loves to advertise the good bits but I think they keep the nasty bits away from you. I could have done with it for repairs to our home,” he said.

Genuinely self-funded citizen Andrew of Carlton did not receive the $900, and was not interviewed for the article, but if he had been he would have said that he was glad not to have further added to Australia’s already far-too-high budget deficit.

Science, engineering and political identity

~ Andrew Norton ~ 21 Comments

Some commenters on my post on the academic backgrounds that that the science and engineering graduates should be distinguished. I have done this and also separated out those with qualifications in IT.

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As can be seen, while science graduates were the largest single component of the original broad ‘science and engineering’ category for both groups, social democrats are relatively speaking more likely to come from a science background, and classical liberals from an engineering or IT background.