Friday, 2 May 2014

The National Commission of Audit

I have feared the release of this report for quite some time. However, this post is not about lambasting the report. Instead I am looking at the 5% of content that would be good for the country and should be considered by both sides of the political divide. If it were up to me, I would enjoy a good bon fire with 95% of the 1200 page report - as mostly it is ideologically looking for cuts in government spending and operations that favour the monopolistic business community and the tea-party wannabes.

The sliver of good...

Taking on the Pharmacies Guild - A highly protected industry whose market structure keeps medicine prices higher than they need to be.

Including the home in the pension means test - Does anyone think that people who own multi-million dollar properties should be receiving government payments? Really?

Family Tax Benefit (FTB) - This is poor policy, why? If you want to deliver a payment to Australian families deliver it, don't obfuscate the qualification to receive that payment through tax returns. The current FTB allows for many people to either falsely or mistakenly claim the payment. The inefficient and costly onus then falls on the Tax Office to catch the false claims. A better system is to provide payments through the existing payment arm of Government, Centrelink, and put the onus on claimants to prove before receiving the payment that they qualify to receive it. Ex ante, not ex post. Additionally, regularity of the payment could easily be changed through current operations of Centrelink. If the payment was delivered throughout the year rather than through a lump sum, it would likely improve the utility of the funds for families that struggle on a week to week basis.

Paid Parental Leave (PPL) has been reduced from the inequality reinforcing $150k - Quite simply, why should those earning $150k receive a government payment to replace their wage of $150k? I think the government could find other more productive and equitable ways to that money. The reduction is a good thing.

Raising the preservation and pension age - Life expectancies have been going up but the age at which you stop working has not. It is a shame they exclude the baby booms from this policy recommendation. Of course, for this to be equitable, we do need to consider exceptions. Should ATSI have a different age considering their lower life expectancy? Should those in hard manual jobs be expected to continue to such an age if they are unable to find less physically demanding work?

These are the headline highlights of the report. There may be more sound recommendations, but without reading the 1200 page report I will stop here.

Political Strategy of the Government

Progressives will flinch at reading this, but the the Coalition Government is operating exceptionally well on the political strategy front. They didn't outline their harsh plans to the electorate as this would damage their chances of winning. Instead, after winning government they have set-up a smoke screen, 'The National Commission of Audit', that provides credence to their deeply held agenda and does the talking for them. The Coalition have set the terms upon which the battles will occur.

Labor needs to start forging its own narrative of how it wants to shape the country. Wealth and income inequality are major issues, not just because of the empirical evidence that shows the socially damaging impacts, but because it stifles productive economic investment into items Australia really needs and that Labor should stand for - think for example a proper National Broadband Network or High Speed Rail infrastructure. Perhaps the Labor party could learn from the Coalition's strategy. Set up a 'National Commission of Inequality of Income and Wealth', don't be shy with the terms of reference, let it go full bore. Stack it with academics like Prof. Frank Stilwell or Prof. Bill Mitchell, put a former MP on there that is genuinely pro-worker like Greg Combet, homelessness advocates, environmental experts etc. Then make the Commission present their findings to the public with an announcement prior to the budget. Lay the groundwork for a progressive budget. We'll need one after the Coalition are finished.

Labor needs to think about how it can shift the terms of the political war as well as matching the Coalition's tactics.

*Read the Spirit Level for an engaging meta-study of inequality the detrimental impacts of inequality.

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