The partisan self-interest behind political donations regulation

In my Australian op-ed for my new CIS paper on political expenditure laws I begin by paraphrasing a famous Adam Smith comment on cartels:

ADAM Smith, the great 18th-century economist and philosopher, famously observed that people of the same trade rarely get together without the conversation ending in some conspiracy against the public. When the Senate meets again after the winter recess, members of the same trade — party politics — will decide on how to regulate their political competition.

I’m referring of course to the bill to ban all foreign-sourced and anonymous above $50 political donations to NGOs, plus lower the expenditure and donations disclosure thresholds from $10,900 every 12 months to $1,000 every 6 months.

Proposals to regulate political donations are almost invariably accompanied by high-minded concerns about protecting the political process from improper influence through donations. But one of the great ironies is that while attempts to show improper influence by donors almost always fail, there is one clear prima facie case of the parties being corrupted by donations considerations: the disclosure law itself. Continue reading “The partisan self-interest behind political donations regulation”


Reader John Fletcher has set up a Taxcheck website that tells us how the government is spending our hard-earned tax dollars.

If you earn $50,000 a year, Taxcheck lists expenses ranging from a bargain 13 cents to pay for pharmaceuticals for Aboriginal people to $768 for granny’s pension.

The methodology is:

Estimates of income tax liabilities are calculated through a naive application of 2009/10 marginal income tax rates, with no accounting for the Medicare Levy, Low Income Tax Offset, Family Tax Benefits, or other potentially relevant factors. …The individual contribution to spending on each item in the above table is calculated as tax paid multiplied by that item’s share of total federal expenditure.

Though the numbers are approximate for most taxpayers, Taxcheck is a good idea. It brings the huge aggregate numbers in the budget papers down to figures more readily comprehensible to individual taxpayers.

Classical liberal nay-saying

You’re becoming a nay-sayer. This is the second voucher type scheme that you’ve argued against and you are still pro-conscription on student unionism.

– Sinclair Davidson, 23 July 2009

A constantly negative person isn’t much fun to be around. But being a policy nay-sayer is, for a classical liberal activist, part of the job description. There are endless suggestions for more government spending and regulation, and so there must also be endless criticisms of those proposals.

Most classical liberals join in the nay-saying. But perhaps where I differ from the others is that, as I argued in my big government conservatism article a few years ago, I believe that pressures for big government come from within centre-right politics, as well as the usual suspects of left-wing ideas, interest group rent-seeking, and politicians’ vote-buying.
Continue reading “Classical liberal nay-saying”

What’s wrong with Taiwanese political donations?

The Age last Friday put another cynical story about political donations on its front page. The gist of it is in the first paragraph:

A TAIWANESE-BORN businessman with close ties to his country’s disgraced former president paid for Kevin Rudd to travel business class to London and has donated $220,000 to the Australian Labor Party.

Julie Bishop followed this up yesterday with a call for a ‘full explanation’ of Kevin Rudd’s past privately-funded travel.

But what would a ‘full explanation’ contain?

Like most of the stories about political donations, this one is like a round-the-wrong way criminal investigation. No crime is identified, but the presence of a possible motive for crime is taken as prima facie evidence that a crime must exist.

The Age sent its journalists off on an elaborate join-the-dots search for an improper motive – Kevin Rudd and Labor are linked to Kung Chin Yuan, who is in turned linked to someone on corruption charges, with the insinuation that some otherwise obscure Taiwanese corruption scandal should taint Rudd and Labor.

I’d have thought a better starting point would be the Rudd government’s policies on Taiwan and China, and if there was something fishy there then the issue of possible explanations would arise. Continue reading “What’s wrong with Taiwanese political donations?”

Ranking crime

The Fairfax broadsheets are having some fun with the ABS’s attempt to rank criminal offences.

“Theft of intellectual property” comes in at 73, one above actual physical theft from a retail premises, suggesting that it’s more serious to download a compact disc illegally than it is to walk into a store and steal one.

Surely the bigger problem here is that it is hard to rank theft independently of the value of what is stolen? Illegally copying a song is less serious than walking out of a shop with a laptop or camera without paying for it. But illegally copying valuable software is more serious than pinching a $1.50 newspaper.

Why is possessing illicit drugs (rank 124 out of 157) worse than actually using illicit drugs (rank 125)? And surely we have curious standards if desiring illicit drugs ranks so lowly while while meeting that desire is covered by a series of offences from rank 14 (importation) to 22 (dealing and trafficking). There would be no supply if there was no demand.

School vouchers at any price?

The IPA’s Julie Novak received good media coverage earlier in the week for her new paper on vouchers.

I’m certainly in favour of school choice. But I’m not convinced that Julie’s proposals – which would cost between $5 billion and $10 billion, depending on various options – represent value for money. Most of it would be spent giving current private school parents the entitlement they would have received had they sent their kids to a government school.

It’s paying people to do what they would do themselves anyway without public assistance. As a classical liberal, I need a lot of convincing that this is a sensible use of taxpayers’ funds (and personally I have difficulty with yet more income redistribution to people with school-age kids).

It is likely to speed up the current trend, by which private schools gain 0.3-0.4% of market share each year. But there are limits on how quickly private schools can expand, and even at triple that rate the majority of kids will still attend government schools for years to come.
Continue reading “School vouchers at any price?”

Another way of collecting graduate earnings data

One of the gaps in the Australian higher education information market is institution-specific earnings information. Is it worth spending more to go to a particular university?

It’s always going to be a difficult question to answer, as field-occupation specific and individual charateristics are likely to be the more important factors. But it would be useful to have some more salary data.

One method of getting the data is shown by this US initiative, PayScale, written up in the New York Times earlier this week.

Payscale gets it data by providing another labour market service, helping employeers and job seekers test the market worth of various occupations. It has used the information on degree source, field of study, occupations and salaries to create lists of the top earning jobs and colleges.

They claim to be drawing on 1.2 million users of their site. As the NYT points out is not a random sample, but I would have thought that the main likely bias – it would undersample those content in their jobs – is unlikely to lead to misleading results for those wanting to test their earnings potential.

It will be interesting to see if anyone sees potential for a similar site here. PayScale works for Australia, so when they have enough Australian entries it would be good if they published a similar report on earnings by university here.

Why is religion in anti-discrimination law?

The exemption [from anti-discrimination law for religious schools] stands or falls on whether there is something so unique about religious belief in education that it should over-ride the principles of equal employment opportunity that the community applies to virtually every other workplace. …. Why should some employers be able to discriminate on the grounds of religious belief when the law specifically proscribes this for the general population?

Ken Lovell, 20 July.

To me the issue stands or falls on the conceptual basis for including religion in anti-discrimination law in the first place.

On one view it is because religion is deeply important to many people, and as a community we accept that we all should be allowed to live according to our spiritual-cultural beliefs. Anti-discrimination law means that people don’t have to hide their religion when looking for a job or buying services. This is likely to be especially important for people who display religious symbols or dress in accordance with religious norms.

On another (not mutually exclusive) view, religion has a long history of causing social strife. With some glaring exceptions like Northern Ireland, Western countries have largely dealt with this through the practice of toleration. Anti-discrimination law gives legal force to this practice of just putting up with other religious beliefs, whether we like them or not.

On these justifications, the legal exemptions given to organisations based on religion are not conceptual exemptions. Rather they give effect to the underlying ideas that religion is important and that the chances that religion will cause social strife should be minimised. Continue reading “Why is religion in anti-discrimination law?”

How much power should government funding give?

The Age this morning reported on religious groups mobilising to fight possible changes to anti-discrimination law, which could force religious organisations, including private schools, to end otherwise-prohibited discriminatory practices against people who do not share their beliefs or lifestyles.

In this dispute, I favour religious freedom and believe the current exemptions to anti-discrimination law should be retained.

But ANU academic Margaret Thornton raises a possible complicating issue:

“I think that if private schools receive money from the state, as they do, they should be subject to the law of the land, they should not be able to claim all these exemptions,” she said.

But this kind of argument has huge implications for government’s broader financial relationships with civil society. Should taking any government money give the state total control? (And state governments are minor funding sources for private schools.)
Continue reading “How much power should government funding give?”