Thursday, February 24, 2011

Climate Change Compromised

Compromise usually means that no one gets what they want, and the compromise is accepted by all because they realise that no one is completely happy, but everybody got something.

So it is with today's announcement that, from July 2012, there will be a fixed price on carbon (pollution), with an eventual move to an Emissions Trading Scheme in about 3 years. (2015) Business, especially big business, wanted, and lobbied both Coalition & Labor Governments for it. Then Labor PM Kevin Rudd acceded to this, and former Coalition Minister and then Leader of the Opposition, Malcolm Turnbull, supported it. The right wing of the Liberal Party shafted him, and installed Tony Abbott as Leader of the Opposition. Abbott promptly labelled climate change as 'crap', in direct opposition to Australia's Chief Scientist, and the CSIRO.

Last year's Federal election resulted in a hung Parliament, and Julia Gillard only became Australia's current Labor Prime Minister after gaining the support of Independent MP's. The result included a multi-party Committee on Climate Change. The Committee members are listed at Prime Minister Gillard Chairs the Committee. No Coalition members are listed, although the Coalition was invited to nominate 2 members of the Committee.

The compromise reached by the Committee is a fixed price on carbon for 3 years, then a transition to an ETS. All parties have compromised:
  • The Greens wanted an ETS, including on-farm activities.
  • Rob Oakeshott and Tony Windsor wanted an ETS, not including on-farm activities. They represent rural and regional voters.
  • Labor wanted an ETS, but different from that, and it had twice lost a vote in Parliament.
So, all parties wanted an ETS, except the Coalition which chose not to have members on the Committee. However, none could agree on the form of the ETS. Hence, a compromise, fixed-price on carbon, that shows they want to do something about climate change, but none have got what they really wanted. If it is introduced, I hope that imported goods are also subject to it, including the carbon-cost of transport to Australia. Otherwise, companies manufacturing in Australia will be further disadvantaged.

Politics is sometimes defined as 'the art of comprommise', but it seems to me that it often compromises good public policy.


Saturday, February 12, 2011

Healthy Change From Gillard

Prime Minister Julia Gillard has announced proposed changes to the Health Funding agreement to be discussed, and possibly agreed, at the COAG meeting on Sunday.

The proposed changes include:
  • Dropping the proposed loss of 30% of GST to the Federal Government. Ms Gillard referred to it as a "merry-go-round of GST money". It was to be used to raise the Federal Government's funding from 40% to 60% of health funding.
  • the proposal for the Federal Government to fund 100% of out of hospital health services.
  • direct funding of hospitals has gone. This is a good thing, I think. Direct funding by bodies under the control of a Prime Minister, Premier, or Minister removes some transparency, and allows for politically-driven funding. Think WorkChoices, where the independent Industrial relations Commission was disbanded, and a federal pay authority established under the effective control of former Prime Minister John Howard.
  • The Federal Government will commit to funding 50% of future increases in health funding, subject to "performance targets" being met. This is less than the 60% under the previous model, and indicates to the states, especially those led by Liberal Party Premiers, that the cost of retaining control over all their GST is that the Federal Government will commit less.
  • Funding will be paid by Federal & state governments to a new Health authority, to be independent of Federal & state government interference, similar to the Reserve Bank. This is a much improved policy to the direct funding model previously proposed by Kevin Rudd.
The changes are largely politically driven to gain the approval of states which have a Liberal Party Premier, including Barry O'Farrell who is expected to be NSW Premier after the 24-March election. Politics is, after all, the art of compromise.

Liberal Opposition Leader Tony Abbott has, predictably criticised the changes, calling them "the biggest backdown since the surrender of Singapore" (in WW2). Abbott has a history of criticising absolutely everything from the Federal Government, so his comments are no surprise.

It was disappointing that no journalist, not one, asked Abbott the following questions:
  • Mr Abbott is this new proposed policy 'bad policy'? [Abbott would have effectively answered 'Yes']
  • If it is such bad policy, why will 2 Liberal Premiers, and one Premier-in-waiting, agree to it?
Also disappointing was that no journalist asked Ms Gillard:
  • Ms Gillard wasn't the direct funding model, proposed by former PM Kevin Rudd just bad policy, because it opens the possibility of future governments funding hospitals for their own political ends, and isn't it better that state governments be given a pool of funds to allocate to hospitals through their Health Departments? [this would have been awkward, because it would require criticism of Kevin Rudd's proposals, something she was at pains to try to avoid]
  • GST revenue to states will fall during some future economic downturn. How will health funding be affected by future economic downturns, given that the states use GST money to partly fund health?

Thursday, February 03, 2011

Abbott's Levy Too Far

Tony Abbott has sent an email to Liberal Party supporters, at the end of which he asks for a donation to fight the (proposed) flood levy. It will really be a short-term addition to the rate of Medicare Levy. Both sides are playing politics with this.

The email bears Tony Abbott's signature, and will have been approved by him, but would have been sent by a political staffer.

Notwithstanding the words of the email, Tony Abbott has no bipartisan cooperation in mind, and has, indeed, been pressuring the Independent MP's to support him and bring down the government.

The post script plea for donations to campaign against flood levy is rather tacky in its implication. That is, that there should be no levy, and perhaps that taxpayers should be more self-centred and contribute less to society. It is Liberal Party philosophy that "user pays" ... unless there is political capital to be made for them.

Abbott's plea seems to be backfiring. It seems that some older members/supporters of the Liberal Party actually think using an income tax levy to rebuild infrastructure is entirely appropriate, and Tony Abbott risks alienating not only Liberal supporters who hold such beliefs, but many Queenslanders, too. Queensland is a state vital to both parties' electoral success.

For its part, members of the current Labor government have hit the media with criticism of the email, again for purely to score political points. Abbott tried to laugh it off, saying he believes Labor emails also solicit donations. But it's what he doesn't say that's important here - that Labor has not asked for donations to fund ads opposing a mechanism to rebuild infrastructure after a natural disaster. It was just tacky and rather cheap politics by Tony Abbott & the Liberal Party. So is the "point-scoring" by Labor.