No magic pudding economy

by: Tony Abbott

In his notorious February 2009 essay for The Monthly, Kevin Rudd pronounced the death of 30 years of neo-liberalism. It was up to government, he said, to rectify the ills of a market economy.

This failure to grasp the requirements of wealth creation has characterised the Rudd-Gillard government.

To every problem, the government's response is a new tax, a new regulation or a new bureaucracy. Higher spending, borrowing and taxes have put upward pressure on interest rates and the dollar, squeezed household budgets and depressed consumer and business confidence. The resources boom has only emphasised how deeply subdued conditions are for most of the domestic economy. Although headline economic growth has remained solid, gross domestic product per person has increased by just one half of 1 per cent since late 2007 compared with annual growth of 2 1/4 per cent between 1996 and the end of the Howard government. This is why so many people are convinced that Australia is a rich country at serious risk of becoming poorer.

The government is making our economy less productive by virtually closing down the live cattle trade. It's progressively closing down much of the Tasmanian forestry industry. It's spending $2 billion to close down the brown coal power stations that have been the source of Victoria's cheap-power comparative advantage in manufacturing, and it's spending $11bn to buy and close Telstra's copper network. In other words, it's spending billions in borrowed money to put people out of work, not into it.

By contrast, the Coalition will cut wasteful spending, abolish counterproductive taxes and build a more productive economy through our six-point productivity plan, which will encourage more people into the workforce, make public institutions more effective, cut red tape, improve competition rules, get greater value from infrastructure spending and reform workplace relations to encourage more pay for better work. Cutting spending means lower borrowing and less pressure on interest rates.

Deloitte Access Economics estimated this year that a $13bn reduction in commonwealth spending would allow interest rates to be a percentage point lower than otherwise would be needed to contain inflation against the backdrop of the mining boom. Getting more people more productively into the workforce will mean a larger economy, a bigger tax base and more ability for the government to fund services without tax increases or spending cuts elsewhere. The government's budget papers suggest a 1 per cent rise in growth through higher productivity would produce an ongoing improvement in the budget bottom line of about $4.5bn a year.

If economic growth is high enough through strong productivity growth, it's possible to deliver simultaneously higher spending, lower taxes, a bigger surplus and higher wages without triggering inflation. Far from being "magic pudding" economics, this is what happened during much of the Howard government.

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Footballers now attacking Julia

A GRAND-FINAL week assault by AFL and NRL clubs on the government over poker machine reform will intensify pressure on Julia Gillard, who faces increasing caucus concern over the policy, the key to her power deal with Tasmanian independent Andrew Wilkie.

As the clubs industry directly targets MPs in Labor heartland seats, some are considering trying to have the policy overturned when it is put to caucus in the next few months.

AFL club presidents meet today to discuss a grand-final week television advertising campaign against the reform deal for mandatory precommitment of poker machines, while the NRL has planned a similar assault.

Mr Wilkie, who will withdraw support for the government if the pokies reform does not proceed, yesterday accused both leagues of showing "a breathtaking lack of leadership" and attacked Collingwood president Eddie McGuire's description of it as a "footy tax" as "dishonest, mischievous and misleading".

Families Minister Jenny Macklin, who has carriage of pokies reform, said the government would push ahead with the move. "It is important for all of us to do something about what is a very important problem in Australia," Ms Macklin said.

The likely grand-final week assault comes as the Prime Minister battles internal unrest over the government's dismal opinion poll ratings, speculation that some MPs are considering bringing back former leader Kevin Rudd, and a likely parliamentary defeat of Ms Gillard's bid to overcome the High Court's scuttling of the government's Malaysia Solution.

One MP told The Australian there was no question the Prime Minister would honour her deal with Mr Wilkie. "But the problem she's got is there is no guarantee it will get through caucus," the MP said.

The other problem was that, unlike the carbon tax, the mandatory pre-commitment regime, which requires punters to set limits on the amount they can bet on poker machines, would not come in until after the next election. This would leave the government open to a continued campaign by opponents of the policy.

Another MP said that caucus would stick with the Prime Minister on the issue but admitted it was upsetting a lot of MPs and "there is no short-term fix for this thing".

Ahead of today's key AFL meeting, Hawthorn president Jeff Kennett said the AFL had realised that the proposed reform "threatens the viability of some clubs, and threatens the survival of the code". "This is an extraordinary attack on the not-for-profit sector that has acted in good faith and abided within the law," the former Victorian Liberal premier said.

Mr McGuire, the president of AFL premiers Collingwood, described the gaming reform as a "footy tax". "Obviously this is hugely important to us," he said. "Anything that would cost us millions of dollars would make you anxious."

Peter Doust, chief executive of NRL premiers St George Illawarra, also condemned Mr Wilkie's reform plan. Mr Doust said mandatory pre-commitment would cost his club $6 million just to implement, potentially bankrupting the famous rugby league club. "It means jobs, 200 jobs," Mr Doust said. "This is about our club fighting to survive. We will close if this system is successful."

Clubs Australia chief executive Anthony Ball said the "licence to punt" would have no impact on problem gamblers. "They will set unrealistically high limits or no limits at all, and if they get sick and tired of that they will jump online," he said. "The reality is that poker machines provide an important income stream for NRL and AFL clubs now, but also for junior sport." ....

Mr Wilkie said he remained genuinely confident that the reforms would be introduced and said Ms Gillard and Ms Macklin had acted with "good will and good faith" at every milestone. "This explains why the industry is thrashing around and throwing everything at it," he said.

Mr Wilkie said he would not compromise with a trial of mandatory pre-commitment. "There is no need for a trial," he said. "The evidence is abundant and that would be a stalling tactic from the industry."

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Internet censorship for Australia still on the government's agenda

YOU cannot learn from books you'll never read or be inspired by ads you'll never see.

The insidiousness of censorship is its invisibility. Banned books don't leave outlines where they should be on library shelves. Banned political ads don't announce their presence on TV or radio with the crackle of dead air.

That's why censorship is the province of authoritarians: silence breeds ignorance, fear and shame – the most effective forms of control.

For much of the 20th century, Australia had the dubious distinction of being one of the world's most zealous censors. After a period of openness that started in the Whitlam era, the war on terrorism returned us to our love of banning. Stephen Conroy's internet filter, while deferred, has not been forgotten. The senator's spokesman says the Gillard government is still "committed to introducing legislation" that will block all "refused classification" content from an entire nation of consenting adults. This is set to happen sometime after next January.

If parents want to lock down their home computers, denying themselves and their children access to certain images and information, that's their prerogative. They should also have the right to block commercial advertising to their kids.

Sure, filters – at the home or provider levels – don't work well and many older children can get around them. But if, in the face of these facts, parents prefer technology to block content, rather than undertaking the more difficult process of educating their children about the different types and calibre of content on the web, that's their choice.

What they should not be allowed to decide is what other adults, and those adults' children, do in the face of online informational plenty.

What is the mandatory filter likely to block? We won't know for certain because the banned list is banned.

But it is unlikely to focus on the evil used to justify it – child-abuse sites. These will already be blocked, in line with a new voluntary code of practice adopted by Australian internet service providers to block all child-abuse material on the Interpol blacklist. The refused-classification list revealed by Wikileaks in 2009 offers clues. It contained the Wikileaks site, as well as gambling sites, porn sites, Wikipedia entries and pages on Satanism. Nothing illegal, in other words, but plenty that is politically inconvenient or offensive to religious morals.

Anything that "sexualises" or "pornifies" anything is also likely to wear a bullseye. Voluntary euthanasia advocate Philip Nitschke's instructions on medically assisted suicide may also be in the firing line, given the banning of his book The Peaceful Pill Handbook.

Examples suggest it won't just be information on performing voluntary euthanasia that will be banned, but the mention of its name.

Last year Commercials Advice banned an ad encouraging Australians to be politically active on the voluntary euthanasia issue on the spurious grounds that it depicted, promoted or encouraged suicide. When ads with atheist messages such as "Celebrate Reason" were banned in 2008 – from the same buses that regularly spruiked biblical verses – no cogent explanation was given.

Comforting. Or terrifying, depending on how much you want this government, or the next, to make secret, arbitrary decisions about what you get to see and read.

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'Verbal sewer' Facebook harming children: principal

“GET YOUR KIDS OFF FACEBOOK,” thundered the latest newsletter issued by Lindisfarne Anglican Grammar School, in Tweed Heads.

“THIS VERBAL SEWER IS HARMING YOUR CHILDREN.”

Principal Chris Duncan's bold, large-print warning filled the front-page column normally devoted to his formal message to parents.

Mr Duncan said he normally wrote an 800-word article on education or school issues, but he was prompted to take a different approach after having to help a 16-year-old student who suffered serious abuse on Facebook.

“It was one of those reflex actions,” he said. “I put it [the newsletter] out and thought this is going to offend half of the school community, but the feedback I've had is overwhelmingly positive.”

Mr Duncan said he was aware of students who had been sent into an “appalling state” due to abuse they received on Facebook, with some children being more vulnerable than others.

“Some kids deal with it really well and other kids are mortally wounded by it and it's just the way different kids react to things,” he said.

“I, and all of my colleague principals around the country, deal with very distressed young people and very distressed parents who have been subjected to what I would call tirades of verbal abuse on Facebook.”

Mr Duncan said he expelled two students last year for serious online harassment online of other students, one on Facebook and the other on the school's internal email system.

He said he was not suggesting a blanket Facebook ban but urged parents to be more proactive.

“My concern is parents are not overly aware of what their kids are subjected to until it gets to the point you've got a very distressed, abused young person,” he said.

“Certainly if they've got primary school age kids they shouldn't be on Facebook for a start and with teenage kids they should be aware of what they're doing, or limit their time on the computer at least.”

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