Author: Andrew Norton

The economy and elections

~ Andrew Norton ~ 2 Comments

Commenter Krystian asks:

Do government get tossed out because of difficult economic times, or more because of their own incompetence plus the presence of difficult economic times?

Andrew Leigh has asked himself exactly that question, and come to the (data-laden) conclusion that unemployment does affect election results but ‘luck’ – global or national economic conditions – counts for more than ‘competence’, how well a jurisdiction is doing relative to the gobal or national economy.

He puts this down to

something psychologists call ‘the fundamental attribution error’, which is the fact that humans aren’t very good at separating situational factors from ability when making assessments.

But it seems voters used to believe that governments have more influence over the economy than they do now. The Australian Election Survey has a question about what effect respondents think the government will have on the economy twelve months from now. The first couple of times the question was asked, in 1987 and 1990, about 60% of respondents thought that the government could have either a good or a bad effect.
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Speaking truth to populism

~ Andrew Norton ~ 24 Comments

From the 60 Minutes interview with Pacific Brands boss Sue Morphett, introduced as the most hated woman in Australia:

ELLEN FANNING: … Does the Australian consumer have to accept some responsibility for this decision?

SUE MORPHETT: They do. We all do. Long, long gone are the days where, actually, Australians are prepared to pay more for Australian-made goods and the only way that we’ll pay for Australian-made goods is if they’re giving us something that buying elsewhere or cheaper isn’t giving us.

Is losing an election ever a good thing?

~ Andrew Norton ~ 12 Comments

Third-time unlucky Lawrence Springborg must be feeling a bit down today, while Anna Bligh is triumphantly not packing her office.

But can there be elections it is better to lose?

I can think of two basic scenarios in which this might be the case. The first is when the party is (if in government) no longer capable of doing a good job and risks damaging its reputation if it wins another term or a party is (if in opposition) not ready for government and risks damaging its reputation if it nevertheless wins office.

The second is when there are events over which the government has no or insufficient control, but which overwhelm it and destroy its prospects at subsequent elections.

Unfortunately for the hapless citizens of NSW, both versions of scenario one were at play at the March 2007 election. However for Labor – having so rundown the public institutions of NSW that no quick recovery is possible, even with competent Ministers – a narrow loss would probably have been preferable to the agony of being in terminal decline for years. Despite on-going doubts about the Opposition, Labor runs the risk of severe electoral punishment at the 2011 NSW election.

The Victorian election of 1988 is an example of the second scenario. Labor won, but it was probably too late to avoid the financial disasters of the coming few years. Instead of the Liberals winning a narrow victory and being destroyed by these problems, Labor won a narrow victory and was wiped out by Jeff Kennett in 1992.
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Miscellaneous links

~ Andrew Norton ~ 1 Comment

Tony Abbott’s obituary for Melbourne intellectual Ronald Conway. I was impressed with Conway’s books The Great Australian Stupor and The Land of the Long Weekend when I read them in the mid-1980s. Looking at them again last night, I am still impressed with the range of reference and the synthesis of psychology, sociology, history and politics. But the psychological framework, especially drawing on Freud, seems dated. Still, the books had great titles, which should help preserve Conway’s place in our intellectual history.

The Productivity Commission has released its draft report on parallel importation of books. I have not read it all. Main point I had not previously thought of: that many of the benefits from the existing rules flow overseas, because foreign authors can extract higher prices from the Australian market than otherwise. Main recommendation: that publishers still be protected from parallel importation, but only for 12 months. As most of the profits from a new release will be made in the first 12 months, this looks to be largely a win for the publishers.

Still at the Productivity Commission, an inquiry into the contribution of the not-for-profit sector. It sounds reasonably benign, but I am suspicious. The trend is for civil society is to co-opted or coerced into serving the state.

Sinclair Davidson uses the latest tax statistics to continue his series of analyses showing that during the Howard years the Australian state was increasingly funded by the top 25% of income earners.

Do Group of Eight graduates earn more?

~ Andrew Norton ~ 17 Comments

In full-fee markets, Group of Eight universities charge a large fee premium over their less prestigious competitors. But is this a good investment by students?

According to an article in the latest Australian Economic Review, reported on in the SMH this morning, the answer is no – at least for new graduates.

Using data from the 2003 starting salaries survey carried out by Graduate Careers Australia, UWA academics Elisa Rose Birch, Ian Li and Paul W. Miller found that while choice of industry (mining especially), occupation and having an honours degree all matter, once other factors are controlled for ‘university effects have only minimal impacts on graduates’ starting salaries’.

If this pattern persists as graduates’ careers continue, it would be remarkable: that the brand value of prestige institutions and the presumably higher average innate ability of Group of Eight graduates count for near-nothing in the labour market.
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The Rudd conservative social democrats

~ Andrew Norton ~ 30 Comments

Over at Catallaxy, Jason Soon is highlighting the conservative nature of the Rudd government.

In this post, he picks up on the campaign being run in recent days by The Australian on the government’s IR legislation, which will have very negative effects on restaurants and cafes. Modern left-familists and 1950s conservatives are united in trying to make life difficult for those operating outside 9 to 5 Monday to Friday (except of course the Rudd government itself, with its absurdly over-worked staff).

In this post, he has another go at the government’s internet censorship regime. I think the outrage in question may rely on older laws, but even 20 years ago Labor would not have been on the side of the censors like this government is.

He could have added the activities of Nicola Roxon, a 21st century version of the 19th century temperance activist.

And let’s not forget that Rudd is outdoing Howard on family handouts.

On the theory that all Australian governments are some mix of conservatism, liberalism and social democracy, I thought this one might be predominantly liberal and social democrat, but at this stage it looks like it is predominantly conservative and social democrat. My two least-favourite parts of the modern Western tradition.

Government and private sectors both closing schools

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The 2008 ABS schools data out today illustrates my point that the party in power doesn’t seem to greatly affect the market share of private schools.

In the first full year of Labor in power federally, private schools had an unusually large market share gain of .45%, above the .39% average during the Howard years. Government school enrolments fell in absolute numbers rather than the more usual pattern of recent years of simply growing more slowly than private schools. This was entirely due to government primary schools; government secondary schools recorded an increase in enrolments.

If the number of private schools drops it will actually be continuing a trend in the independent sector, which had a net loss of 1 school in 2008. The state-level data shows clearly that these are net effects. Victoria and NSW gained independent schools, while Queensland and Western Australia lost independent schools.

The government sector lost 18 schools, with NSW, Victoria, South Australia, Western Australia and the ACT all recording losses.

Could the number of private schools fall?

~ Andrew Norton ~ 5 Comments

Citing anonymous sources, The Sunday Age led yesterday with the story that the GFC may cause some private schools to close.

Reference to a company offering fee insurance to parents and schools raises suspicions that, like regular ‘news’ from the Australian Scholarships Group about total school costs (running again in a parallel story yesterday), this story has more to do with clever manipulation of the media by commercial interests and (yet another) slow news Sunday than reporting on real information.

Neverthless, the possibility is real. While the experience of the last recession would suggest that total private school enrolment growth will slow rather than go into reverse, that is across the whole sector, and consistent with individual schools suffering enrolment declines.

Because schools are non-profits often operating on a quasi-charitable basis, many are likely to start the recession under-capitalised and lacking strong trading surpluses. This leaves them vulnerable to a downturn. In the the last recession the number of non-government schools did in fact decrease, from 2,517 in 1990 to 2,499 in 1993.

However, as with enrolments this was a cyclical rather than a structural change. Private school numbers recovered to 2,520 in 1994, and there were 2,728 private schools in 2007. If this is as severe a recession as forecast, I expect we will see a similar dip in numbers and subsequent increase as the economy improves.

Update: After months of stories on the claimed shift to public education, the SMH grudgingly concedes it is not true:

INDEPENDENT schools in NSW have reported an overall increase in enrolments this year, despite having bled some students to the public school system.

Is there any point in double banning capital punishment?

~ Andrew Norton ~ 23 Comments

The SMH reported yesterday that

LAWS prohibiting states and territories from reintroducing the death penalty are being seriously considered by the Rudd Government and could be introduced this parliamentary term.

Even for a government as hyperactive as the Rudd government this proposal seems excessive. After all, nobody has actually received capital punishment since 1967, and according to the SMH article the last state formally removed it from the statute books in 1985. The 2007 Australian Election Survey suggests that, for the first time, capital punishment has minority support. Neither regular appalling murders, nor the introduction of tough anti-terrorist measures, has seen any serious attempt to get the death penalty reintroduced. The issue is as dead as Ronald Ryan, the last man to go the gallows. For good reason, the Australian political class has lost the will to kill.

So why this proposal? According to an accompanying article

The move is intended in part to reinforce with Asia Australia’s opposition to the death penalty – given concern at the fate of three Bali Nine members on Indonesia’s death row.

But this proposal relies for its significance on a distinction between state and federal law that is barely understood within Australia, much less within Asia. I fail to see how an obscure constitutional point adds anything to our international advocacy, much less to the substantive debates within Asia about the advantages and disadvantages of the death penalty.

Double banning capital punishment seems to me to be soft left symbolic politics at its most ridiculous.

Your taxes at play

~ Andrew Norton ~ 26 Comments

Yesterday The Australian added anecdotal evidence to the statistical evidence that Youth Allowance is middle-class welfare.

STA Travel has also released sales to entice students to splash their stimulus cash offshore.

The company’s product and marketing director, Basil Hyman, said anecdotal evidence suggested inquiries for travel to short-haul destinations such as Bali, Fiji and Vietnam had shot up since the handouts had begun reaching bank accounts. “I think it has helped to stimulate overseas travel,” he said.

We are still waiting to see if Gillard will, as the Bradley report suggested, make YA a less rortable scheme.