Monday, November 08, 2010

A rather comprehensive rejection of political correctness

Labor reverses the push for competition

The Rudd-Gillard Labor government just does not "get" competition

In policy areas as diverse as banking, telecoms and Julia Gillard's $16 billion school hall stimulus program, Labor's policies are failing badly -- and a core reason is Labor's indifference to competitive private sector markets.

In recent days we have seen record bank profits -- and banks increasing their home loan rates ahead of the Reserve Bank's cash rate. When the cash rate was increased by 25 basis points last Tuesday, Commonwealth Bank increased its rates by nearly twice that amount.

Treasurer Wayne Swan blames "a culture of arrogance among the banks". The real explanation is quite different. On Labor's watch, concentration in the banking sector has significantly increased -- reducing competition and increasing the pricing power of the big four.

According to RBA assistant governor Guy Debelle, the major banks' combined market share rose from 60 to over 80 per cent from 2007 to 2009.

During this period significant non-bank operators such as Wizard, Aussie, Rams and Challenger exited the home loan business or were acquired by the banks, while Bankwest was acquired by CBA and Westpac bought St George.

The banks say their rates are going up because they need to recoup increases in their funding costs. But in business there is no automatic relationship between your costs and the prices you charge your customers. It is only if you have market power that you can increase your retail prices with impunity.

In a more concentrated market, the banks now have significantly greater pricing power -- and Australian home loan customers are suffering.

It is a pity that the Rudd government did not think about the competition implications of the panicked decisions it took in 2008 -- decisions it said were necessary because of the GFC. With its rushed introduction of a bank deposit guarantee of $1 million, Labor gave the big banks a competitive free kick. Labor's wholesale funding guarantee further strengthened the competitive position of the big banks, as the credit union and mutuals peak body Abacus has told parliament.

The Rudd-Gillard government has reversed a 25-year trend of increasing competition in banking.

Now they are seeking to do the same thing in telecommunications. Over 20 years, bipartisan policy to increase competition in that sector has delivered clear consumer benefits, most obviously in mobile telecommunications.

More recently, there has been progress in fixed broadband competition thanks to "unbundling". This is where a competitor rents Telstra's copper wire from the exchange to the customer's home, and combines this with its own electronic equipment installed in the exchange. Over 1.4 million broadband services are now provided by Telstra's competitors using unbundling. This has produced lower prices -- and new services.

Unbundling-based competitors were the first to introduce the next-generation ADSL2+ broadband service and the first to allow a customer to purchase a broadband service without also taking a voice service (so-called "naked DSL").

But Labor's extraordinary broadband policy would turn back the clock, establish a new government-owned monopoly broadband network and shut down Telstra's access network.

Under Australian competition law, it is normally illegal for two companies to do a deal in which one is paid by the other to exit the industry. Labor plans to change that law to allow its recently announced deal, under which Telstra will be paid $11bn to stop operating a fixed-line access network, leaving the field clear for the new government-owned monopoly.

A similar indifference to competition has contributed to the wasteful overspending under Labor's Building the Education Revolution.

When the NSW Labor government received $3bn from Canberra, for example, its approach was to divide the state up into seven regions. Each of these was handed to a single large construction company, granting it in effect a regional monopoly.

Is it any wonder that prices paid on a per square metre basis for buildings under this program have been above normal industry benchmarks?

Competitive markets tend to produce the lowest prices and best outcomes for consumers. Companies which charge too much cannot sustain themselves. The discipline of a genuinely competitive market is a much more effective tool for delivering public policy than any amount of regulation imposed by bureaucrats.

There has been a profound reversal under the Rudd-Gillard government.


Greenies hate people

Oliver Marc Hartwich

MORE than 40 years ago, American biologist Paul Ehrlich sketched a doomsday scenario for planet Earth in his book The Population Bomb.

Adding more people to the planet would inevitably lead to mass starvation and ecological disaster.

Since the publication of the book, the global population has nearly doubled but most of its gloomy predictions have not come true. However, this has not stopped its author from campaigning against further population growth, this time in Australia.

As he prepared for a series of lectures to the Environment Institute at the University of Adelaide, Ehrlich warned that Australia was full.

As always in Ehrlich's predictions, a bigger population equals disaster. No doubt, he is striking a chord with many Australians who believe that there are enough of them. At least this is what an Australian National University poll suggests.

In the ANU survey, half the respondents said that families should consider having three or fewer children, in order to save the planet. A majority of 52 per cent claimed that Australia had enough people, and further population growth would harm the environment and place pressure on water resources.

It is remarkable that people now regularly put "nature" and "the environment" ahead of all other concerns. Historically, this is an oddity because not long ago taming nature and overcoming a hostile environment were humankind's priorities. In this sense, the ANU survey does not reveal an Australian eccentricity but it is very much a sign of our times. The new misanthropists are everywhere.

Across the globe, environmentalists are preaching that nature is always good and humanity always a problem. People are seen as some kind of pollution; a book that imagines "the world without us" has become an international bestseller.

This is a remarkable change in human attitudes towards nature. Life in the bad old days was nasty, brutish and short, to quote Thomas Hobbes. Nature was something to be dealt with, controlled or used. "Be fruitful and increase in number; fill the earth and subdue it," the Bible taught.

The only positive thing about this long-gone age is that at least people would not have been bored to death. They simply didn't have time to worry about their carbon footprint or overpopulation.

Our perception of nature has taken a U-turn since then. No longer do we aim to subdue the earth, but we happily surrender to the goddess of nature. The wealthier parts of the world are so well protected against the dangers of nature that we have almost forgotten that nature is more than cute polar bears, cuddly koalas, and clumsy penguins.

We can trace the origins of this thought to the Gaia theory of British scientist James Lovelock. He claims that the planet is just like one big organism. "Gaia", as he called it, fights back against humanity because she has simply had enough of us. From such a perspective, epidemics, starvation, and natural disasters may well be the planet's response to the human disease.

It looks like Lovelock's followers are no longer satisfied leaving it to the planet to seek revenge on humanity. Rather, they would take matters in their own hands. Having identified humanity as the cancer on the face of the earth, they are advocating more hands-on approaches to reduce humankind's footprint on the planet. Or maybe even reduce the world's population. This is what the ANU survey confirms.

Let's not be fooled by these new disciples of Gaia, though. What is disguised by nice, touchy-feely slogans about sustainability, nature and the environment is often just misanthropy by another name. It has no respect for people in developed countries and is completely oblivious to the needs of people in poorer places.

Just consider the case of urban density. In order to save land from development, city dwellers are advised to live at much higher densities.

Gone are nice front patios and green backyards, leafy suburbs and playing fields. For the planet's sake, let's live on top of one another in tiny boxes, ideally next to busy train and tram lines, they preach. It's a victory of nature over the quality of life in our cities.

Things get even more cynical when our subservience to the planet dictates what we allow poorer peoples to do. The thought that millions of Indians would want to drive their own little cars drives Western environmentalists crazy. They would never admit it, but deep down they wish these poor Indians would just remain poor; all for the sake of the planet, of course.

Worshipping their new goddess nature, the environmentalists have forgotten something. We human beings may not all be cute and cuddly, but we deserve at least as much love and attention as our distant relatives in the animal kingdom.


Anti-fat laws in NSW

There is of course not the slightest proof that this will achieve anything

Fast-food Chains in NSW must display kilojoule counts on menus in an attempt to reverse obesity.

The new food labelling law, to be introduced into Parliament by the Keneally government this week, gives fast-food sellers in NSW 12 months from February 1 to comply before heavy fines kick in for outlets in breach of the new code.

Kilojoule information will be "at least the same size as the price of the product" under the proposed law. Every menu board will also have to feature the recommended average adult daily energy intake of no more than 8700 kilojoules so customers can calculate how much energy each item represents in their daily diet.

The NSW Heart Foundation has thrown its support behind the new system as a "logical first step" but will lobby the NSW government to ultimately include information on saturated fat and salt in the future.

Premier Kristina Keneally said yesterday the government will consider expanding the law to cover fat and salt within a year of its introduction.

After lengthy negotiations that involved the former premier and health food advocate Bob Carr, McDonald's and Yum! Restaurants Australia - the company behind KFC and Pizza Hut - will support the labelling law despite the significant cost of altering every menu in NSW.

The law will affect not only the big-brand fast-food chains but also bakery, coffee and doughnut outlets. "Even salad and juice chains that market themselves as healthy, but often pack a big kilojoule punch, must comply," Ms Keneally said.

Companies with fewer than 20 stores in NSW or 50 across Australia will be exempt.


Hockey won't support gay marriage

I don't always agree with Joe but I think he is pretty right on this one

OPPOSITION treasury spokesman Joe Hockey says he would not support laws to allow gay marriage.

Right-wing Labor minister Mark Arbib is the first frontbencher to say he believes Labor should support gay marriage and that MPs should have a conscience vote on the controversial issue. Prime Minister Julia Gillard has previously ruled out the move.

Mr Hockey said he did not support gay marriage. "I don't agree with gay marriage," he told Sky News today. "I think a marriage is between a man and a woman and that's been my consistent view."

Mr Hockey said it would not be advantageous for Labor to support a conscience vote on gay marriage, despite evidence it is losing support to the Australian Greens on social issues.

"The more the Labor Party talks about non-mainstream issues ... the economy and productivity and a range of other things, the more they talk about other issues, the less Australians are going to listen to them," he said.


Thou shall not teach humanism -- says Victorian Labor party government

EDUCATION Minister Bronwyn Pike has ducked a potential backlash from the powerful Christian lobby by rejecting a proposal to allow humanism to be taught in primary schools during time allocated for religious education.

The Humanist Society of Victoria, which wants to teach an ethics-based curriculum, is planning a legal challenge, saying that the current system indirectly discriminates against non-religious children, causing "hurt, humiliation and pain and suffering" to them when they opt out of religious education classes.

Children in two-thirds of Victorian state primary schools are taught Christian scripture by volunteers, even though the Education Act says state schools must be secular and "not promote any particular religious practice, denomination or sect".

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Parents must sign forms if they want their children to be excluded from "special religious instruction" classes, 96 per cent of which teach Christianity, with the remaining 4 per cent covered by the Jewish, Buddhist and Baha'i faiths.

Children who do not attend these sessions are not allowed to be taught anything their classmates might miss out on during this time, so they are often put in another room where they read or play on computers.

The Education Act has a special exemption from its secular roots to allow religious education.

But Ms Pike skewered an attempt last year by the Humanist Society of Victoria to have its "humanist applied ethics" curriculum approved for teaching during the religion period. The course, designed to be taught from prep to year 6, covered subjects such as the art of living, the environment, philosophy, science and world citizenship.

Ms Pike declared that humanism's "world-view philosophy [sic] cannot be defined as a religion", and that the Humanist Society was "not registered as a religious organisation" and therefore could not "provide instruction in government schools". There is, however, no official registration of religions in Australia.

The man responsible for accrediting non-Christian religious teachers, RMIT professor Desmond Cahill, head of the World Conference of Religions for Peace, said, "We'd consider humanism as a religion since it has an ethical standpoint."

Ms Pike refused to answer The Sunday Age's questions about whether she had been targeted by the Christian lobby.

The Greens candidate in Ms Pike's threatened seat of Melbourne, Brian Walters, told The Sunday Age governments should not use their power to "privilege or promote any one religion or non-religion in our schools" and said children should not be segregated on the basis of faith.

The Humanist Society of Victoria has obtained legal advice that children who are excluded from scripture classes are being indirectly discriminated against.

Religious education arguably breaches equal opportunity law, the advice says, and causes "hurt, humiliation and pain and suffering" to children who opt out as they are "isolated from the rest of the class … with little to do". It suggests aggrieved parents take action in the Victorian Equal Opportunity and Human Rights Commission and possibly VCAT.

Humanist Society of Victoria president Stephen Stuart said the society was collecting testimony from parents in an attempt to mount a "convincing class action with hundreds of names".


A bad government that’s getting worse

By Tony Abbott

In his recent book, John Howard claimed that the Labor Party would comfortably have won the recent election had Kevin Rudd remained prime minister.

The government, he said, had torpedoed its principal ground for re-election, namely that it had kept Australia out of recession, by politically assassinating the man who’d led it. It’s a plausible argument but I don’t think that it’s right, notwithstanding my respect for my former leader’s insights.

Julia Gillard’s problem is not that she was a worse candidate for re-election than her predecessor; it’s that she’s turning out to be an even worse prime minister than he was.

Boat people aren’t trying to get to Indonesia or even to Singapore. They’re desperate to get to Australia. That’s why the prime minister’s attempt this week to have other countries solve our problem was so lame. Only a prime minister who was out of her depth would ask other countries to fix a problem that the Australian government had created for itself and then pretend that a polite hearing was actually a step towards a regional agreement. Why do we need a regional agreement on a processing centre on East Timor when Australia could so easily agree with Nauru to put one there?

Julia Gillard is usually personable in a way that her predecessor mostly wasn’t and often seems down-to-earth in a way that her predecessor mostly didn’t but that’s not stopped the perception growing that she’s actually a worse prime minister. Whether it was the Medicare Gold policy that she took to the 2004 election as shadow health minister; the original ACTU-wish-list Fair Work policy that she proposed as shadow workplace relations minister before the 2007 election; or the East Timor processing centre that the East Timorese had never heard of, the climate change people’s convention in lieu of the parliament, and reiterating state Labor’s Epping to Parramatta railway serial broken promise during the recent election campaign, the prime minister lacks judgment. Kevin Rudd was hopeless at running the country but at least he didn’t always sound like the alternative opposition leader ceaselessly sniping at opponents.

There’s the carbon tax that was definitely off-the-table before the election that’s on-the-table now. There’s the onshore detention centres that definitely weren’t happening before the election but definitely are happening now. There’s the mining tax that was fixed before the election but that’s unraveling now. There’s the Murray-Darling water plan that was going to be adopted in its entirety sight-unseen before the election but, now that it’s been seen, isn’t going to happen anytime soon and is all the work of independent bureaucrats. This is a prime minister and a government that has the Midas touch-in-reverse. During the election, we were told about fake Julia and real Julia. Now it seems that there were fake meetings of the gang of four and real ones.

None of this means that there’s likely to be a new election anytime soon. The prime minister won’t call one while the government is in so much trouble and the two independents who created the government are hardly likely to surrender their power within three years. The opposition’s job is not to wait for a bad government that’s getting worse finally to implode. Still less is it to bicker about the election result and the spoils of defeat. It’s to be an even more effective opposition this term than last term and thereby to dispel any voter doubts that we are again ready for government.

Last week, the Coalition pledged itself to a fairer welfare system and to lower, simpler and fairer taxes. The Coalition is committed to a more competitive and responsive banking system. This week, Coalition MPs have been campaigning for people to be taken seriously before, not after, government takes decisions that will impact on their lives: such as putting an asylum seeker detention centre in their town or cutting water allocations to their district. It’s an opposition that’s holding the government to account and methodically developing the policy that makes us a credible alternative government. One of the key differences between the Coalition and the Labor Party is that we want Australia to be a better place but they just want to stay in power.

Over the next couple of years, there’ll be announcement after announcement but almost nothing will change for the better because the government is completely torn between political operators and people who wish they were in the Greens. The opposition has to point out all the occasions when the Labor Party, in one of its own senior member’s words, is being “long on cunning but short on courage” while being ready to form a better, more principled government.


1 comment:

Paul said...

"The more the Labor Party talks about non-mainstream issues ... the economy and productivity and a range of other things, the more they talk about other issues, the less Australians are going to listen to them," he said.

I disagree with his views in principle, obviously, although we couldn't really be bothered with it ourselves anyway, but he nails the debate in this last paragraph when he says "non-mainstream issues". This is a typical political distraction from far more pressing issues, and I'm sick of people like myself being used as a political football.