Author: Andrew Norton

The PM’s left-leaning campaign rhetoric

~ Andrew Norton ~ 14 Comments

The Parliamentary Library has published a new monograph by Maurice Rickard called Principle and Pragmatism: A study of competition between Australia’s major parties at the 2004 election and other recent federal elections (you can tell they aren’t commercial publishers, can’t you?). It has lots of interesting material derived from the Australian Election Surveys and also an analysis of campaign launch speeches to gauge ideological positions and shifts.

Rickard uses the Manifesto Research Group categories to code each sentence in the campaign speeches and to classify them as ‘left’ or ‘right’. Unsurprisingly, he finds that the major parties are close to the centre but in the places we would expect, with Labor just to the left and the Liberals just to the right (though with the Liberals closer to the centre overall).

The chart that most interested me (on p.68, for those who download the publication) was the division of issues into economic and non-economic. This shows that since 1998 the Liberals have moved to the right on economic issues and to the left on non-economic issues. Their campaign rhetoric is consistent with strong spending increases on health and education, and the overall philosophy of ‘big government conservatism’, with growth-oriented economic policies used to finance a large welfare state.

As I have argued before, the big question is how viable this is as a long-term political strategy. Despite the Liberals’ rhetorical and policy shifts on non-economic issues, public opinion still favours Labor on these matters. And that’s with the benefit of being in government and actually implementing big-spending policies. If the Coalition loses the 2007 poll, will voters believe Opposition promises, or fall back on long-standing stereotypes of the political parties? The danger, as has happened in the states, is that the Liberals will just look like a less sincere and less competent version of Labor.

Is mental ill-being increasing?

~ Andrew Norton ~ 18 Comments

One much-publicised finding of the National Health Survey carried out by the ABS is that the self-reported mental health of Australians is declining. In the 1995 survey, 5.9% of the sample reported ‘mental and behavioural problems’, which increased to 9.6% in 2001 and 10.7% in 2004-05. An earlier ABS survey, carried out in 1989-90, came up with lower figures than 1995 – 3.8% reporting ‘nerves, tension, nervousness, emotional problems’ and 0.9% reporting depression. However, its question was different so comparisons should be made with caution.

The rapid increase has led to widespread concern, but also suspicion that there is something wrong with the numbers. Will Wilkinson has long argued that the depression trends (which are similar in the US) are fishy because they don’t match the happiness data. If there was a big increase in depression there should be a substantial increase in those with lower happiness ratings in subjective well-being surveys, but there is not in the US or UK.

In Australia, it’s harder to test this hypothesis because of inconsistent survey formats. In 1983 and 1984, two surveys giving very/fairly/not too happy options found 6% giving the ‘not too happy’ response. The two most recent surveys, the 2003 and 2005 Australian Survey of Social Attitudes, used 0-10 scales. If we count 0 to 4 as ‘unhappy’ we get 6.5% and 8.2% of respondents respectively as ‘unhappy’. The 2003 survey would seem to show little change in 20 years, consistent with what Will finds. The 2005 survey shows a more significant change. But both are below the mental problems reported in the National Health Survey.
Continue reading “Is mental ill-being increasing?” →

The anti-economic rationalist genre

~ Andrew Norton ~ 92 Comments

Some years ago, in reviewing Lindy Edwards’ book How to Argue with an Economist, I suggested that it was part of a genre of anti-economic rationalist writing. I think ‘genre’ is a good way of describing critiques of economic rationalism, because it picks up connotations of a common style as well as of shared subject matter and perspective.

There was another example of this in an article by Martin Feil in today’s Age, run under the title ‘We killed manufacturing’. It’s a vigorous polemic against economic rationalism and free-market economics, but as is usual in this genre it does not cite any actual economic rationalist or free market advocate and shows the standard lack of interest in facts.

Admittedly, indifference to evidence does have its liberating effects, allowing creativity closed to those who drearily stick to what can be substantiated. Take this claim, for example:

According to the free-market adherents, productivity improvements occur only when there is no government intrusion in the marketplace. Businesses are left to compete and only the most efficient survive. They then altruistically give their efficiency gains to consumers to grow the market. (emphasis added)

I’ve been reading anti-economic rationalist tracts for 20 years, and have read countless denunciations of free-market theories putting self-interest at their centre, but I think this is the first time I’ve seen the theory criticised for putting too much faith in altruism. Of course many people are altruistic, but it would indeed be a foolish theory that assumed business would give productivity gains away out of generosity. If it happens, it’s because business want to increase the amount they sell by lowering prices – as free market theory would predict.
Continue reading “The anti-economic rationalist genre” →

Will the Per Capita think-tank find a niche?

~ Andrew Norton ~ 6 Comments

According to The Age, next Wednesday will see a new ‘progressive’ think-tank launched, Per Capita.

This idea has been floating around for a while – I gave them some advice many months ago – so it will be interesting to see how well it goes.

I have had doubts about whether their organisational structure is the right one. For example, when advertising for an Executive Director earlier this year they wanted a rare mix of skills –

You probably have
• an advanced degree
• a reputation as a ‘thought leader’
• an understanding of how ideas, economics and politics interact, including professional public policy experience
• professional management experience, sufficient to manage a small but complex organisation
• strong communications skills, including experience of the electronic media and an ability to write well
• adaptability, flexibility and problem-solving expertise and an entrepreneurial mind-set
• a background in public policy, politics, the media, academia, management consultancy or business.

but then offered only a 12 month contract.

Unsurprisingly, the successful applicant, David Hetherington, doesn’t obviously meet more than a few points on this wish-list. I could find only one published article, this four-year old Online Opinion piece, which is just a summary of the standard union line on minimum wages.

The policy director, Michael Cooney, is a long-time ALP staffer. He’ll bring strong political connections and policy experience to the job, but like Hetherington he has no pre-existing intellectual reputation based on published work. And how long would he stay once a Rudd government started recruiting?
Continue reading “Will the Per Capita think-tank find a niche?” →

The slowing of big government conservatism

~ Andrew Norton ~ 5 Comments

Last December I was complaining, at length, about the rise of big government conservatism. But the release this week of the ABS’s Government Finance Statistics for 2005-06 shows some welcome spending constraint.

Overall, spending was up 5.5% on 2004-05. But inflation of 3.2% accounts for some of that (directly relevant because of the indexation of benefits). Also, as I did before, I calculated spending on a per person basis, as the approximately quarter of a million extra Australians would have added to expenditure regardless of spending policy decisions. This brings the increase down to 3.8%, .6% above inflation. It’s not a great record, but by the standards of the current government it is not bad.

The pattern of spending increases also looked a little more like we would expect of a conservative government than previous years, with ‘defence’ and ‘public order and safety’ receiving larger percentage increases than health or social security. However, education enjoyed strong growth (8.5% per capita), and unusually this was driven more by universities than schools. The most spectacular increase was the 1,973% lift in per capita spending on ‘water supply’. But as spending was only $1 per person per year previously this still left water as one of the cheapest items in the federal Budget (at least before the $10 billion Murray-Darling plan that failed to impress Treasury Secretary Ken Henry).

Alas, the ABS Tax Revenue publication, also released this week, shows that per capita Commonwealth taxes continued their steady rise, up 5.6% per person between 2004-05 and 2005-06. As Stephen Kirchner and others have pointed out, it’s far from clear that the government should be stashing the difference between per capita tax increases and per capita spending increases away for the benefit of future taxpayers (or, if Labor wins, future broadband users) rather than reforming the tax system now. Despite tax cuts in the last couple of Budgets, the government remains rather reluctant to let Australians keep their money.

Why not all the Right is against the ABC

~ Andrew Norton ~ 27 Comments

According to Robert Manne in today’s Age

THE right in Australia is greedy. Even though it now dominates political commentary on commercial radio and television and throughout the Murdoch press, for the past decade it has been conducting a concerted campaign to root out the pitiful remnants of left-wing thinking still found inside the ABC. The long campaign has been conducted by Quadrant and The Australian; by think tanks such as the Institute of Public Affairs and the Centre for Independent Studies (emphasis added)

In fact, the CIS has been rather more interested in appearing on the ABC than rooting out the ‘pitiful remnants of left-wing thinking’ still to be found wandering its corridors. When I put ‘ABC bias’ in in the CIS‘s search engine it turned up only three passing references. When I put ‘centre for independent studies’ in the ABC search engine I get 520 documents, and there are more that just refer to the ‘CIS’.

As I explained in a Catallaxy post last year, I’m not a fan of the ‘ABC bias’ argument. It’s not that I think ABC staff don’t lean to the left; left-wing causes do get more coverage there than elsewhere (though this mainly shows in issue selection; they do try to provide balance once they have picked a topic). But I doubt this greatly increases the total of leftist broadcasting in Australia compared to what we would have without the ABC. There’s a market for leftist ideas, as The Age shows in making money out of a soft left broadsheet and book publishers show by making money out of selling books denouncing capitalism, US foreign policy etc etc. So if it wasn’t the ABC it would be some other institution.

I think this makes the preoccupation with ‘ABC bias’ a strategic mistake by the political right. Even if the ABC’s ‘pitiful remnants’ were left to wander the streets of Ultimo and Southbank (and wherever their studios are in other cities) nothing much would change in the overall political complexion of Australian debate. Devoting significant energy to achieving a reform that would make little practical difference is a mistake the CIS has avoided making.

Aside from strategy, the ABC actually has many virtues to go with its few vices – it gives far more time to explain complex ideas than other radio stations, most of the news programmes are pretty good, and best of all it schedules lots of excellent English television. Yes, I know, ‘middle class welfare’, but one of the few federal government services I actually use for all the taxes I pay.

Conflicting WorkChoices polls?

~ Andrew Norton ~ 1 Comment

Commenter Leopold notes about today’s industrial relations Newspoll, reported in The Australian, that there is

A curious difference between Newspoll and ACNielsen …- 33% of Newspoll respondents reckon they are worse off under WorkChoices. And ‘a lot worse off’ is rising in Newspoll, while in ACN the overall figure ‘worse off’ is falling.

There are two differences between the ACNielsen and Newspoll surveys that may help explain the different results. The first is that ACNielsen asks its question of all respondents, while Newspoll only asks people with jobs. This is a smaller sample that is more likely to be affected by the changes than those without jobs (though those without jobs could still be affected, via other members of their household who do have jobs). Newspoll records more people affected both positively and negatively.

That probably explains most of the difference, but the second possible reason is that Newspoll gives options of varying strength. Its question reads:

How do you think the changes to industrial relations affect you personally? Do you think you are better, or worse, off? If better, do you think you are a lot better off, or a little better off? If worse, do you think that you are a lot worse off or a little worse off?

Whereas ACNielsen asks (if they are consistent, they did not publish the questions last time):

Do you think you will be better or worse off under the planned changes?

Offering milder options can sometimes encourage people without strong views to reveal which perspective they are leaning towards.
Continue reading “Conflicting WorkChoices polls?” →

The fiscal burden of Family Tax Benefits

~ Andrew Norton ~ 35 Comments

In the executive summary of the second Intergenerational Report, released today, it says after noting various fiscal pressures that will build over the next 40 years:

It will be important to focus on the efficiency and effectiveness of government spending

I couldn’t agree more. Unfortunately, the government isn’t heeding its own advice, as the Integenerational Report itself shows. In an appendix on spending projections the Report compares spending forecasts made in the first report five years ago with those Treasury makes now. Back then, they thought that Family Tax Benefits A and B would consume 1.3% of GDP in 2006-07. In the second Report they say FTB spending will be 1.6% of GDP in 2006-07. In a trillion dollar economy – as various government Ministers for some reason keep telling us – that 0.3% is a lot of money. In real per person terms, it’s gone from $613 per person to $790 per person, or about a 29% increase.

Now what do we have for all this money? According to the Report:

Continue reading “The fiscal burden of Family Tax Benefits” →

What do returns to education say about graduate mismatch?

~ Andrew Norton ~ 13 Comments

Andrew Leigh agrees that some people have more qualifications than they need for their jobs. But he’s not convinced that over-education is a problem:

The returns to education have stayed very stable over the past 20 years. If anything, there’s a bigger economic benefit to going to university today than in the past.

It is true that there is no evidence that average returns to higher education have gone down over the past twenty years. But I would not expect the statistics I have been citing to affect average returns as there have always been similar proportions of over-qualified workers, who would have consistently dragged down the averages over time. Though the statistics in my graduate mismatch paper (pdf) only go back to 1991, the time of the last enrolment boom, I also checked some earlier data.

It gets a little complicated because the job categories used by the ABS have changed over the years, but matching as much as I can we get very similar over-education statistics through the years. The earliest data I could find was from 1979, and at that time the proportion of graduates in non-graduate jobs (with the caveat in the first sentence) was 18.7%, remarkably similarly to the 19.2% I calculate for 2006. For 1986 I arrive at a figure of 19.8%. In 1996 it was 22%, but that was a temporary aberration, the unfortunate consequence of the Dawkins enrolment boom graduating into the Keating recession. It was back down to 18.9% in 1998.
Continue reading “What do returns to education say about graduate mismatch?” →