Yes, the US border policy is harsh – but Australia’s treatment of refugee children has also been deplorable


File 20180625 152164 l7lecu.jpg?ixlib=rb 1.1
Villawood Detention Centre, NSW. There are currently 200 asylum seeker children in detention, in Australia and offshore.
Australian Human Rights Commission

Deborah Zion, Victoria University

US President Donald Trump’s policy of separating children from their families at the Mexican border has sparked outrage in recent months, both in the US and abroad. It became so heated that he eventually ended the separation of families, though their fate remains unclear.

However, Trump is not the only leader to incarcerate children and use their suffering as a form of deterrence. The detention of asylum-seeker children has a long and brutal history in Australia. Trump’s policy invites us to reflect on our own policies regarding the detention of asylum seekers and the situation of children and families fleeing persecution.

Currently, over 200 children are in asylum-seeker detention, including on Nauru, in mainland detention centres and in community-based detention. Many have endured prison-like conditions, with no clear date for their release for months, if not years.

While most children remain with one of their parents, my research has found that separation of families is common. This includes the removal of young men on their 18th birthdays from their families with no warning or follow-up as to their whereabouts.

The mandatory incarceration of asylum-seeker children is an uncommon practice globally. It contravenes important human rights instruments to which Australia is a signatory, most notably the Convention on the Rights of the Child. This states:

No child shall be deprived of his or her liberty unlawfully or arbitrarily … (This) shall be used only as measure of last resort and for the shortest appropriate period of time.

The degree of despair felt by children and their families is well-documented and goes back many years.

In 2004, the Human Rights and Equal Opportunity Commission (HREOC) published A Last Resort? National Inquiry into Children in Immigration Detention. This document outlined the privations of the lives of those held in detention centres in Australia, including the famous case of Shayan Badraie. He was detained for nearly two years, witnessing attempted suicide, self-harming and violence that resulted in several hospital admissions before the family was released.

The report also documents physical assault by guards, mental illness and lack of appropriate food, shelter and education.




Read more:
Accusations of deliberate, cruel abuse of refugee children must prompt a more humane approach


A Last Resort not only documents terrible human rights abuses, but the ongoing effects on those who experienced them. But, far from ending the incarceration of children and their parents, the policy of detention as deterrence has continued. In this regard, Australia is unusual, being the only developed country that imposes mandatory detention on people arriving by boat.

In 2014, the HREOC conducted another investigation, The Forgotten Children. This report documents in detail ongoing breaches of human rights, unsafe living conditions, medical neglect and physical and sexual assault.

Dehumanisation occurs on every level. One 16-year-old boy stated:

People were called by boat ID. People had no value. No guards called me by name. They knew our name, but only called by boat ID.

Children are also constantly exposed to the trauma of other detainees. One father said:

The word of “suicide” is not an unknown word to our children anymore. They are growing up with these bitter words. Last week a lot of women took action to suicide in Construction Camp. All the kids were scared and crying. How do we remove these bad scenes from our kids’ memories?

The report documents other cases of despair. A 13 year-old-boy detained on Nauru expressed to the treating doctor “a complete loss of hope; despair”. The doctor described how “[h]e had no appetite and no will to eat. He lost over 10 kilograms, which would be about a quarter of his body weight.”




Read more:
Sending children back to Nauru risks creating a generation of damaged people


The Australian government has tried to hide the conditions experienced by those held in places like Nauru and Manus Island. In particular, the Border Force Act (2015-17) imposed criminal sanctions on workers who speak publicly about what they see.

However, there is overwhelming and easily accessible evidence that Australia’s policies cause both immediate and ongoing trauma to children, and indeed all those incarcerated in detention. We must recall that Australia is a signatory to the Refugee Convention and that seeking asylum is enshrined in this instrument.

So while we can express moral outrage about things that occur far from home, our own policies ensure human rights breaches that cause unnecessary suffering and trauma for long periods of time.

There is now substantial evidence of the poor treatment of asylum-seeker children. This has come from a plethora of reports from human rights organisations, healthcare providers and detainees like Behrouz Boochani, who document and publish the conditions of incarceration.

The ConversationThey remind us of what the Holocaust historian Yehuda Bauer said: “Do not be a victim; do not be a perpetrator; and above all, do not be a bystander.”

Deborah Zion, Associate Professor and Chair, Victoria University Human Research Ethics Committee, Victoria University

This article was originally published on The Conversation. Read the original article.

Advertisements

Here’s what a privacy policy that’s easy to understand could look like



File 20180606 137315 1d8kz0n.jpg?ixlib=rb 1.1
We need a simple system for categorising data privacy settings, similar to the way Creative Commons specifies how work can be legally shared.
Shutterstock

Alexander Krumpholz, CSIRO and Raj Gaire, CSIRO

Data privacy awareness has recently gained momentum, thanks in part to the Cambridge Analytica data breach and the introduction of the European Union’s General Data Protection Regulation (GDPR).

One of the key elements of the GDPR is that it requires companies to simplify their privacy related terms and conditions (T&Cs) so that they are understandable to the general public. As a result, companies have been rapidly updating their terms and conditions (T&Cs), and notifying their existing users.




Read more:
Why your app is updating its privacy settings and how this will affect businesses


On one hand, these new T&Cs are now simplified legal documents. On the other hand, they are still too long. Unfortunately, most of us have still skipped reading those documents and simply clicked “accept”.

Wouldn’t it be nice if we could specify our general privacy preferences in our devices, have them check privacy policies when we sign up for apps, and warn us if the agreements overstep?

This dream is achievable.

Creative Commons as a template

For decades, software was sold or licensed with Licence Agreements that were several pages long, written by lawyers and hard to understand. Later, software came with standardised licences, such as the GNU General Public Licence, Berkeley Software Distribution, or The Apache License. Those licences define users’ rights in different use cases and protect the provider from liabilities.

However, they were still hard to understand.

With the foundation of Creative Commons (CC) in 2001, a simplified licence was developed that reduced complex legal copyright agreements to a small set of copyright classes.

These licences are represented by small icons and short acronyms, and can be used for images, music, text and software. This helps creative users to immediately recognise how – or whether – they can use the licensed content in their own work.




Read more:
Explainer: Creative Commons


Imagine you have taken a photo and want to share it with others for non-commercial purposes only, such as to illustrate a story on a not-for-profit news website. You could licence your photo as CC BY-NC when uploading it to Flickr. In Creative Commons terms, the abbreviation BY (for attribution) requires the user to cite the owner and NC (non-commercial) restricts the use to non-commercial applications.

Internet search engines will index these attributes with the files. So, if I search for photos explicitly licensed with those restrictions, via Google for example, I will find your photo. This is possible because even the computers can understand these licences.

We need to develop Privacy Commons

Similar to Creative Commons licences under which creative content is given to others, we need Privacy Commons by which companies can inform users how they will use their data.

The Privacy Commons need to be legally binding, simple for people to understand and simple for computers to understand. Here are our suggestions for what a Privacy Commons might look like.

We propose that the Privacy Commons classifications cover at least three dimensions of private data: collection, protection, and spread.

What data is being collected?

This dimension is to specify what level of personal information is collected from the user, and is therefore at risk. For example, name, email, phone number, address, date of birth, biometrics (including photos), relationships, networks, personal preferences, and political opinions. The could be categorised at different levels of sensitivities.

How is your data protected?

This dimension specifies:

  • where your data stored – within an app, in one server, or in servers at multiple locations
  • how it is stored and transported – whether it is plain text or encrypted
  • how long the data is kept for – days, months, years or permanently
  • how the access to your data controlled within the organisation – this indicates the protection of your data against potentially malicious actors like hackers.

How is your data spread?

In other words, who is your data shared with? This dimension tells you whether or not the data is shared with third parties. If the data is shared, will it be de-identified appropriately? Is it shared for research purposes, or sold for commercial purposes? Are there any further controls in place after the data is shared? Will it be deleted by the third party when the user deletes it at the primary organisation?




Read more:
94% of Australians do not read all privacy policies that apply to them – and that’s rational behaviour


Privacy Commons will help companies think about user privacy before offering services. It will also help solve the problem of communication about privacy in the same way that Creative Commons is solving the problems of licensing for humans and computers. Similar ideas have been discussed in the past, such as Mozilla. We need to revisit those thoughts in the contemporary context of the GDPR.

Such a system would allow you to specify Privacy Commons settings in the configuration of your children’s devices, so that only appropriate apps can be installed. Privacy Commons could also be applied to inform you about the use of your data gathered for other purposes like loyalty rewards cards, such as FlyBuys.

Of course, Privacy Commons will not solve everything.

For example, it will still be a challenge to address concerns about third party personal data brokers like Acxiom or Oracle collecting, linking and selling our data without most of us even knowing.

The ConversationBut at least it will be a step in the right direction.

Alexander Krumpholz, Senior Experimental Scientist, CSIRO and Raj Gaire, Senior Experimental Scientist, CSIRO

This article was originally published on The Conversation. Read the original article.

Budget 2018 was old news for energy policy – the next big headlines won’t come until July


David Blowers, Grattan Institute

As with many previous budgets, matters relating to energy and climate change were relegated to little more than a footnote in Treasurer Scott Morrison’s 2018 budget speech. And even the contents of that footnote told us nothing new.

This will bring relief to some, but cause frustration for others.

No money was set aside for a new coal-fired power station, despite the plaintive calls from the backbench in recent weeks. Nor was there any extra help for consumers struggling with sky-high electricity bills. There was no extra funding for the government’s Emissions Reduction Fund, but neither was money cut from the Australian Renewable Energy Agency or the Clean Energy Finance Corporation.




Read more:
A high price for policy failure: the ten-year story of spiralling electricity bills


What Budget 2018 did contain was three “announcables” – or, to put it more accurately, re-announcables.

First, Morrison declared that adoption of the federal government’s National Energy Guarantee would save the average household A$400 a year on its electricity bills. This is a bit of sleight of hand. Yes, modelling for the NEG shows that consumers’ bills will be on average A$400 lower than in 2017. But much of those savings will occur before the NEG comes into force in 2020.

Second, the treasurer declared that:

All energy sources and technologies should support themselves without taxpayer subsidies. The current subsidy scheme will be phased out from 2020.

The subsidies to which Morrison refers are from the Renewable Energy Target (RET). But it is hardly news that the scheme will to be phased out from 2020. This has been known for a decade. In fact, it’s a bit of a stretch to say the subsidies are being “phased out” at all.

After 2020, existing or new renewable energy projects will still be able to generate the same renewable energy certificates for every megawatt hour of electricity they produce, which they can then sell to retailers. The ability to generate certificates – and therefore generate a subsidy – will only end in 2030. The difference between the pre- and post-2020 RET is that there will be no annual increase in the target.

Finally, the treasurer pledged that the federal government will keep up the pressure on the big energy companies to give consumers better electricity and gas deals. This announcement is a signal as to when we can expect to see the next real action from the government on energy. It will come in July, when Morrison receives the report on the Retail Electricity Pricing Inquiry, which is being carried out by the Australian Competition and Consumer Commission (ACCC).




Read more:
As the Libs claim South Australia, states are falling into line behind the National Energy Guarantee


The Turnbull government will be keen to act on the ACCC’s recommendations, given the looming federal election and the pressure on all politicians to find a way to cut voters’ energy bills.

The ConversationSo if we want some real headlines on energy, rather than some reheated footnotes, we will be waiting for a couple of months yet.

David Blowers, Energy Fellow, Grattan Institute

This article was originally published on The Conversation. Read the original article.

ABC Four Corners: five articles to get you informed on sugar and Big Sugar’s role in food policy


File 20180430 135848 1ircyer.jpg?ixlib=rb 1.1
The sugar industry has employed various tactics to influence health policy in its favour.
from shutterstock.com

Sasha Petrova, The Conversation

Tonight’s ABC Four Corners program investigates the influence of the sugar industry on global policy efforts to curtail the rise of obesity. This includes the industry’s involvement in thwarting implementation of a sugar tax, and in watering down Australia’s now largely ineffective health star rating system.

Called Tipping the Scales, the program will highlight some of the tactics the industry employs. The ABC reports companies such as Coca-Cola, Pepsico, Unilever, Nestle and Kelloggs “have a seat at the table setting the policies that shape consumption of their own sugar-laced products”.

A public health advocate is quoted as saying:

The reality is that industry is, by and large, making most of the policy. Public health is brought in so that we can have the least worse solution.

The Conversation’s experts in health policy and economics have weighed into this debate over the years. Here’s our pick of five analysis pieces that will get you informed before tonight’s program.

1. How industry influences research

The sugar industry hasn’t only had its finger in the policy pie, it has also pulled some strings behind the scenes of scientific research into sugar’s health effects.

A study published in the Journal of the American Medical Association in November 2016 revealed that, in the 1960s, the sugar industry paid scientists at Harvard University to minimise the link between sugar and heart disease. The paper’s authors suggested the sugar industry may largely have shaped many of today’s dietary recommendations. And some experts have since questioned whether such misinformation may have led to today’s obesity crisis.

The sugar industry has influenced research in the past.
from shutterstock.com

In an essay on health, the University of Sydney’s Professor Lisa Bero – an internationally renowned expert in the integrity of scientific research and its use in policy-making – has outlined how food companies can sneak bias into scientific research:

She writes:

Pharmaceutical, tobacco or chemical industry funding of research biases human studies towards outcomes favourable to the sponsor…

A 2007 paper that compared over 500 studies found those funded by pharmaceutical companies were half as likely to report negative effects of corticosteroid drugs (used to treat allergies and asthma) as those not funded by pharmaceutical companies.




Read more:
Essays on health: how food companies can sneak bias into scientific research


2. Sugar’s role in health star ratings

The ABC’s Four Corners team interviews the Obesity Policy Coalition’s executive manager, Jane Martin, who is frustrated that industry lobbying has scuttled efforts to make the health star system mandatory.

The health star rating system was introduced in June 2014. It’s a front-of-pack labelling system that rates the nutritional profile of packaged food and assigns it a rating from ½ a star to 5 stars. The more stars, the healthier the choice.

As Deakin University’s public health and nutrition professor, Mark Lawrence, and Curtin University’s public health research fellow, Christina Pollard, explained:

The system is supposed to help consumers discriminate between similar foods within the same food category that contain different amounts of undesirable ingredients. It should, for instance, help compare two loaves of bread in terms of their salt content …

Writing a year after the rating system’s implementation, the authors note the flaws in the policy. The main flaw is its voluntary nature, which can lead to manufacturers putting labels on only those foods that will get a high rating:

While manufacturers might be happy to display stars on foods that attract between two and five stars, they are less likely to put one or half a star on their products.




Read more:
A year on, Australia’s health star food-rating system is showing cracks


3. How a sugar tax would benefit health

Since Mexico introduced a sugar tax in 2014, nearly 30 countries have gone on to do the same. Last month the UK introduced a levy that manufacturers must pay for their high-sugar products.

More than 20 countries have taxed sugary drinks.
from shutterstock.com

Companies will have to pay 18 pence per litre on drinks with more than 5g of sugar per 100g. Drinks with more than 8g per 100ml will face a tax rate equivalent to 24p per litre.

But the ABC reports efforts to introduce such a policy in Australia have failed, due to the lobbying efforts of the Beverages Council.

The evidence for sugar’s negative effects on our health is well known. A study published in the journal PLOS ONE in April 2016 showed a tax on sugary drinks in Australia would prevent 4,000 heart attacks and 1,100 strokes.

The researchers examined the potential impact of a 20% rise in the prices of sugar-sweetened carbonated soft drinks and flavoured mineral waters on health, healthcare expenditure and revenue.

Writing for The Conversation, the study’s authors note:

As expected, the tax would result in people decreasing their consumption of sugary drinks. The influence of a price increase would be greatest on those who drink a lot of sugary drinks, so the greatest impact would be on younger age groups. This is an important result that is difficult to achieve through other obesity-prevention measures.




Read more:
Australian sugary drinks tax could prevent thousands of heart attacks and strokes and save 1,600 lives


4. How a sugar tax would save us money

The UK’s Treasury is estimating the sugar tax will raise £240 million per year. Modelling done in Australia by the Grattan Institute shows that a tax of 40 cents per 100 grams of sugar could raise about A$400-$500 million per year.

The Institute’s Stephen Duckett and Trent Wiltshire write that the sugar industry’s concerns over the tax are overblown. They say:

A sugar-sweetened beverages tax will reduce domestic demand for Australian sugar by around 50,000 tonnes, which is only about 1% of all the sugar produced in Australia. And, while there may be some transition costs, this sugar could instead be sold overseas (as 80% of Australia’s sugar production already is).




Read more:
A sugary drinks tax could recoup some of the costs of obesity while preventing it


5. How bad is sugar, really?

And finally, if you’re wondering how much sugar you can eat to stay healthy, here’s an article written by Flinders University nutrition lecturers Kacie Dickinson and Louise Matwiejczyk that explains exactly that.

In brief:

If you’re an average-sized adult eating and drinking enough to maintain a healthy body weight (roughly 8,700 kilojoules per day), 10% of your total energy intake from free sugar roughly translates to no more than 54 grams, or around 12 teaspoons, per day.

A 600ml bottle of Coke contains more than 14 teaspoons of sugar.


The Conversation


Read more:
Health Check: how much sugar is it OK to eat?


Sasha Petrova, Deputy Editor: Health + Medicine, The Conversation

This article was originally published on The Conversation. Read the original article.

Budget policy check: do we need company tax cuts?


Janine Dixon, Victoria University

In this series – Budget policy checks – we look at the government’s justifications for policies likely to be in this year’s budget and measure them up against the evidence.

In this piece we look at the need for company tax cuts.


Business investment in Australia declined steadily for four years after peaking in 2013. In early 2016, the Turnbull government settled on a series of company tax cuts as their preferred policy to reinvigorate business investment and the economy.

Our modelling shows that a cut to the company tax rate for large businesses will indeed lift foreign investment in Australia, driving an economic expansion and an increase in pre-tax wages, but there is more to the story.

Like many policy changes, there are winners and losers. The give-and-take nature of the tax cut means that the “losers” from the tax cut will be Australian-owned businesses and the Australian government. We find that despite the expansion in GDP, the average income of the Australian population (a more suitable measure of the material welfare of the population) will fall.

Do we need investment to maintain jobs and economic growth?

The jobs growth figures last year – we all know now, more than 1,100 jobs a day – that’s had a really big impact on our economy and we can expect that to continue and now lead to – I would expect – better wage outcomes as long as businesses keep investing and businesses can keep remaining competitive.

– Treasurer Scott Morrison

More investment creates more buildings, equipment and intangible assets that enable workers to be more productive and, in theory, earn higher wages.

If investment is weak for a prolonged period, job opportunities are reduced and wage growth will weaken.

In a well-functioning economy, population growth and technological progress naturally attract investment. When investment only keeps pace with population or employment growth, wages stagnate. For wages to grow, investment needs to be above this level. This happens when there is technological progress, generating the higher returns which attract the level of investment needed.

Australian investment depends largely on foreign finance, so world economic conditions, including rates of corporate tax in other countries, also play a role.

In reality the link between investment and wages is not always clear cut. If unemployment or underemployment is high, investment may lead to growth in jobs without wage growth.

Businesses might also make profits in excess of a “normal” rate of return. These profits exist when new businesses struggle to break into a market dominated by a few large players, and can be an impediment to wage growth.

Even if you do accept that higher investment does lead to higher wages, giving tax cuts to companies to stimulate investment is not justified on this basis.

If company taxes are cut there will be significant costs to government revenue that amount to a “windfall gain” to the (mostly foreign-owned) investments that have already been made on the basis of the 30% tax rate. On balance, the positive impact on growth and wages is not enough to justify the loss of this revenue.

Is there a problem with business investment in Australia?

Business investment is critical to economic growth. When firms are empowered to invest in new productive capacity and technology, it supports innovation and helps create new opportunities and employment for Australians.

– Treasurer Scott Morrison

Business investment is now showing signs of picking up. In a speech late last year, Reserve Bank deputy governor Guy Debelle saw “signs of life” in investment growth, particularly in the services sector and in infrastructure projects completed by the private sector on behalf of the public sector.

https://datawrapper.dwcdn.net/YZHhR/2/

A Grattan Institute report identifies four very good reasons for the four-year decline. These include a return to “normal” investment following the mining boom and an overall decline in the amount of money needed to create capital goods in most industries. The report also points to an ongoing shift towards households spending more on services such as retail, cafes, and professional services and slow economic growth overall.

Viewed in this light, there are plausible and benign reasons underlying the decline in investment. These suggest that it is not a large enough problem to justify “repair” in the form of a costly tax cut.

What’s the verdict?

Certainly business investment has weakened over the last five years, and along with this we have seen weak wage growth. It would be foolhardy to argue against the need for more business investment. Jobs and growth underpinned by a healthy level of investment are essential aspects of a modern society.

But cutting the company tax rate is not the way to go. It may deliver more business investment and economic activity, but by forgoing taxation revenue from existing investment, it comes at a cost to the average income of the Australian people.

The ConversationTo reap the benefits of strong business investment without a costly tax giveaway, Australia must continue to play to its strengths. Reducing the government revenue base through a cut to company tax will undermine the sort of stable, prosperous society that underpins the world-class environment that we strive to offer all investors.

Janine Dixon, Economist at Centre of Policy Studies, Victoria University

This article was originally published on The Conversation. Read the original article.

Budget policy check: do we need ribbon-cutting infrastructure for jobs and growth?


Hugh Batrouney, Grattan Institute

In this series – Budget policy checks – we look at the government’s justifications for policies likely to be in this year’s budget and measure them up against the evidence.

In this piece we look at the need for infrastructure projects.


We look set for another infrastructure budget: big new projects that will, we’re told, boost growth, create jobs and tackle the pressures of our booming population. For example, the Turnbull government has already pledged up to A$5 billion for a rail link from Melbourne Airport to its CBD.

Infrastructure can play an important role, but behind the rhetoric some fundamental investment principles are missing.

Are investing in infrastructure and economic growth a sort of virtuous circle that feed each other?

Through a stronger economy, you can also invest in important infrastructure that again drives stronger growth in our economy … but also delivers the infrastructure that busts the congestion in cities, that makes rural and regional roads safer.

– Treasurer Scott Morrison

Yes, sometimes infrastructure spending and economic growth form a virtuous circle. In new suburbs and rapidly growing cities, infrastructure is needed to connect people to jobs and that in turn drives economic activity.

But we shouldn’t be fooled into thinking any spending is good spending. There are many examples where the opposite is more likely true: where poorly targeted infrastructure wastes resources and weakens economic growth.

If we want to identify the best projects, a good place to start is our biggest cities. Big cities have a productivity advantage because they match workers to jobs better and faster than smaller cities and towns. Transport infrastructure is key to this matchmaking.

But in many cases, the enormous costs of construction in big cities – acquiring land, disrupting traffic, and the physical challenge of constructing in densely developed places – often makes it hard to justify the incremental increases in accessibility that a project generates.

Instead, policies and projects targeting better use of existing infrastructure can have greater economic impacts. The trouble is, these projects usually don’t involve cutting a ribbon.

Changes to the way we set prices for the use of roads and public transport, for example, can help us get more out of the infrastructure we already have. Charging public transport users different amounts depending on the time of day they travel can reduce peak-period overcrowding on our trains. With much lower capital costs, policies like this often deliver a bigger bang for the buck than major new investments.

Are these road and rail projects the sort of infrastructure that supports growth?

Whether it’s the Tulla Rail or the M1 up in Queensland or indeed in my home city of Sydney around Western Sydney Rail from the airport and the road infrastructure that goes around that in particular, we are making important national investments in infrastructure that will support growth, bust congestion in our cities and make our transport – rural and regional roads – safer.

– Treasurer Scott Morrison

Infrastructure undeniably plays a role in supporting the economy. But not every project will add to the productivity of our economy.

On the face of it, the economics of airport rail in Melbourne look thin. Infrastructure Victoria has said upgrading airport bus services should be investigated first, because at A$50-100 million it’s a much cheaper way to tackle the same problem. It has also said that the rail line should be delivered within 15-30 years.

The perceived urgent need for airport rail in Melbourne may stem from the slow and unreliable travel to the airport over the past 18 months. This is a byproduct of the Tullamarine Freeway widening project, which is now almost complete. Responding to a short-term pressure with a multi-billion dollar investment – in the absence of a detailed business case – is a depressing example of poor policy-making.

And the Treasurer’s enthusiasm for the Western Sydney airport rail is also concerning, given that a recent state government study indicated the project wouldn’t be needed to cater for customers and workers at the airport until 2036, at the earliest. Infrastructure Australia has been clear that a rail corridor, running north-south through the airport site, needs to be preserved for a future rail line. But that is a long way from justifying billions of dollars of infrastructure that isn’t needed for nearly another 20 years.

Does Australia need infrastructure to create jobs?

Our national economic plan for jobs and growth has been getting results…A $75 billion national infrastructure investment plan that is building the runways, railways and roads Australia needs to remain competitive, and create jobs.

– Treasurer Scott Morrison

At certain points in the economic cycle, infrastructure spending can help create jobs. New projects create jobs for workers involved in planning, building and deploying each project, as well as for the suppliers of equipment and materials needed as inputs.

And in the longer term, the Treasurer is right to say that infrastructure is essential if our cities are to remain competitive.

But again, context is everything.

Infrastructure can put people to work when there is “slack” in the labour market – when there is unemployment or underemployment, in other words. But if there is little slack in the labour market, then the workers required to get a project off the ground will be drawn from other productive activities. In that case, there may be no boost to jobs or economic growth, because one activity is merely displacing another.

With national unemployment currently around 5.5%, there does appear to be some slack in the labour market right now. However, firms are now finding it more difficult to access the labour they want. And the slack doesn’t appear to be in the parts of the economy that would benefit most from new projects: as the RBA reports, the construction sector recently reached its highest share of total employment since the early 1900s.

What’s the verdict?

Eminent urban economist Ed Glaeser once said, “if you have a focus on jobs and macroeconomic effects, it leads to infrastructure in the wrong place”. Australia should focus on a project-by-project approach; that’s the only way we can be assured that investments represent the best possible use of available funds.

This means starting with some basics: the government should not commit to expensive new infrastructure projects until it has commissioned a detailed look at the economic impacts of the investments, and it has made public the results of that analysis.

The ConversationThat’s how infrastructure policy would be done in an ideal world. But sadly, in a pre-election budget, we can probably expect politics to triumph over policy, yet again.

Hugh Batrouney, Fellow, Grattan Institute

This article was originally published on The Conversation. Read the original article.

Budget policy check: does Australia need personal income tax cuts?


Saul Eslake, University of Tasmania

In this series – Budget policy checks – we look at the government’s justifications for policies likely to be in this year’s budget and measure them up against the evidence.

In this piece we look at the need for personal income tax cuts.


A large proportion of any cut in personal income tax – especially if the cuts were skewed towards lower and middle-income households with a higher propensity to spend – would likely provide a greater direct stimulus to the Australian economy than an equivalent cut in company tax.

Cutting personal income taxes seems likely to provide much more of a boost to the Australian economy than cutting company income tax. As the government’s own published modelling shows, the benefits of its proposed cuts to the company income tax rate are small relative to their cost.

Do we need income tax cuts to provide relief from financial hardship?

The treasurer and I have been working on how we can provide more tax relief for hard-working middle income Australian families.

– Prime Minister Malcolm Turnbull

Over the last five years, household spending has grown by just 2.6% per annum in real terms, on average – of which more than half has been the result of population growth – compared with an average of 3.6% per annum over the preceding 12 years. Even with that lower growth rate in their spending, households have reduced their saving rate, from around 7% of disposable income five years ago to around 2.5% in 2017. That’s the lowest saving rate since before the financial crisis.

The key reason for this “squeeze” on household spending and saving is of course the ongoing weakness in the growth rate of household disposable income. Over the past five years, real per capita household disposable income has grown at an average annual rate of just 0.4%, compared with an average of 2.6% per annum over the preceding 12 years.

One reason for this is that Australian households have been paying an increasing proportion of their income in taxes. In the years prior to the onset of the financial crisis, almost every budget included personal income tax cuts in some form or other.

By contrast, there have been no changes to Australia’s personal income tax scale since 2008 – apart from the increase in the tax-free threshold (paid for by an increase in the bottom rate) in 2012, the temporary surcharge on top-rate taxpayers which applied between 2014-15 and 2016-17, and the increase in the threshold for the second-top rate (from A$80,000 to A$87,000) which took effect in the 2016-17 financial year.

As a result, in 2017, Australian households in aggregate paid 19.5% of their taxable incomes in income and other direct taxes – the highest proportion since 2005, and continuing a steady rise since 2011.

Households are also spending almost two and a quarter percentage points more of their after-tax disposable incomes on education, health, insurance and other financial services, and utilities than they did five years ago.

Given all this, it’s little wonder that household spending in more “discretionary” areas has been so weak in recent years.

https://datawrapper.dwcdn.net/okPTL/1/

Well-targeted personal income tax cuts could thus help to ameliorate this multi-faceted “squeeze” on household incomes, and provide a direct boost to the economy.

Do we need income tax cuts to make up for the fact that we haven’t had a pay rise in a while?

It’s been a long time since any Australians had a decent pay rise…this is a real pressure on Australians…we can give them some relief when it comes to their personal income tax.

– Treasurer Scott Morrison

The other major reason for the very slow growth in real household disposable income over the past few years has been the unprecedented slowdown in wages growth. Wages have risen at an average annual rate of just 2.2% over the past five years (only 0.3 of a percentage point above the inflation rate), down from 3.7% per annum over the preceding 12 years.

Although, as RBA Governor Phillip Lowe noted in a speech that “the latest data suggest that the rate of wages growth has now troughed”, he went on to warn that the pickup which the RBA expects “is likely to be only gradual”.

Recent experience in other advanced economies clearly suggests that the unemployment rate needs to be lower for longer than in previous business cycles before wages growth starts to pick up. So even assuming that Governor Lowe is right, it may be one or two years before Australian households can expect any meaningful improvement in their financial position from faster growth in their wages or salaries.

Well targeted personal income tax cuts could help provide at least some offset to this likely continuing stagnation in wages growth over the next year or so.

What’s the verdict?

Targeted personal income tax cuts could reduce the squeeze on households and make up for persistent low wages.

Of course, it remains crucial that any cuts in personal income tax be sustainable – that is, that they are not funded by bigger deficits, and do not materially detract from the task of putting the nation’s public finances on a sounder footing. This is so we are better placed to withstand any unforeseen economic shocks.

And it’s important to remember that government spending has moved to what appears to be a permanently higher level as a proportion of GDP since the financial crisis. The government’s underlying cash payments averaged 25% of GDP from 2011-12 through 2017-18, up from 24% from 2001-02 through 2007-08. That also represents a constraint on the scope for tax cuts.

However, the apparently greater improvement in the budget so far this financial year, compared with what was forecast as recently as last December’s Mid-Year Economic and Fiscal Outlook, could give the government a little more latitude for financially sustainable personal income tax cuts in the upcoming budget.

The ConversationPerhaps the most sustainable way of providing the “relief” which the treasurer says many Australian households need, would be to abandon the tax cut for companies turning over more than A$50 million a year. The government hasn’t been able to get these through the Senate. These cuts would do far less to boost the Australian economy than well-targeted personal income tax cuts of a similar order of magnitude.

Saul Eslake, Vice-Chancellor’s Fellow, University of Tasmania

This article was originally published on The Conversation. Read the original article.

Germany’s (not so) grand coalition may cause ripple effects on European refugee policy


Kelly Soderstrom, University of Melbourne and Philomena Murray, University of Melbourne

After a tumultuous 2017 election and six months of political uncertainty, Germany finally has a government. The so-called “grand coalition” made up of the centre-right Christian Democrats (CDU), its right-wing sister party, the Christian Social Union (CSU), and the centre-left Social Democrats (SPD), will govern Germany for the next four years.

At the centre of it all is the coalition agreement. The 179-page document sets out the goals for the government, including a new approach to Germany’s refugee policy.

The agreement explains “a new direction for Europe, a new dynamic for Germany, a new cohesion for our country”. It notes two changes in German leadership: a change in the power dynamics among the ruling parties, and a strong emphasis on using the European Union (EU) to achieve German political objectives.

With a weakened CDU under Chancellor Angela Merkel ceding considerable control to the anti-immigration CSU and the socialist SPD, the centre of German political power has shifted. This shift will have a profound impact on German and EU refugee policies.




Read more:
Angela Merkel wins a fourth term in office – but it won’t be an easy one


The issue of refugees is discussed deeply in German society. Since the height of the refugee crisis in 2016, when 722,370 people applied for asylum in Germany, the number of asylum applicants has decreased significantly.

However, 1.6 million refugees remain in Germany and Europe’s refugee crisis appears to be far from over. Not unexpectedly, this is a huge source of tension in the government.

At first, Merkel gained praise for her humanitarian, liberal refugee policy focused on refugee reception and integration. However, growing anti-immigrant sentiment, evident in the rise of groups like Patriotic Europeans Against the Islamisation of the West (PEGIDA), the electoral success of the far-right Alternative for Germany (AfD) and the difficulties in integrating a large number of refugees all resulted in increasingly protectionist sentiment.

Germany needs to provide a feasible refugee policy that is manageable and does not split the coalition.
Shutterstock

Merkel had pushed for refugee responsibility-sharing across the EU. However, no pan-EU approach drawing on the German example eventuated. Many EU member states refused to honour the major instrument for delegating responsibility for refugees, the Dublin Regulation, or participate in the EU-wide refugee redistribution scheme.

Given Merkel’s weakened position in the coalition, it is not clear that Germany will continue her humanitarian approach.

The government faces two leadership challenges in refugee policy. Firstly, it needs to provide Germany with a feasible refugee policy that is manageable and does not split the coalition. Secondly, it is attempting to lead a different type of coalition – namely, the EU’s 28 member states.




Read more:
Why Europe shouldn’t follow Australia’s lead on asylum seekers


Leadership in Germany: Can Merkel still say ‘wir schaffen das’?

In domestic refugee policy, Germany is fractured. Of the three coalition partners, the anti-immigration CSU is the primary winner in migration and refugee policy. CSU leader and Interior Minister Horst Seehofer is leading dramatic restrictions in refugee policy. Although the SPD negotiated a modest victory with 1,000 family reunification visas per month for refugees, government parties are refusing to do more than this.

Creating a cap on refugee visas was a major point of controversy between the CDU and CSU. The CSU prevailed, with the coalition agreement calling for an annual cap of 180,000-220,000 refugees. However, that cap may not take effect as only 198,317 first-time asylum applications were filed in Germany in 2017. Yet this threshold creates distraction from Merkel’s humanitarian approach as it prioritises immigration control over humanitarian obligation.

There is some good news for refugee integration in Germany.
Shutterstock

This, coupled with the limitations on movement of refugees imposed by centralised processing centres and repatriation centres for failed asylum seekers, demonstrates new constraints in refugee policy. This in turn demonstrates the CDU’s diminishing power and the fracturing of the centre of policy leadership.

Yet there is some good news for refugee integration. The grand coalition still maintains a focus on refugee integration, especially through language acquisition and participation in the labour market.

As Germany struggles with its fractured leadership and seeks consolidation and centralisation of refugee processing procedures, the German approach is becoming increasingly binary: if you are not a refugee, you must leave; if you are a refugee, you must integrate.




Read more:
Donald Trump’s ban will have lasting and damaging impacts on the world’s refugees


Leadership in Europe?

When it comes to the EU, the grand coalition government has four objectives: halt secondary movement of refugees; toughen the EU’s external borders; tackle external push factors; and create a robust mechanism for responsibility-sharing.

The Common European Asylum System aims for common application procedures for refugees and accommodation standards to prevent asylum-shopping across countries. The German government is also renewing calls for a quota-based refugee redistribution and resettlement scheme among EU states.

In calling for increased policing of the EU’s external borders and a common approach to push factors, these mechanisms paint refugee protection as a security issue rather than a humanitarian one.

During the Eurozone crisis, Germany showed strong leadership in EU policy. However, it has failed to persuade other member states to follow its leadership on refugees. Its leadership may further weaken as other states refuse to follow.

Will Germany step up to lead in Europe?

The EU is deeply divided on refugee policy and distracted by other concerns. The United Kingdom is consumed by Brexit negotiations, while many eastern and central European states refuse to participate in EU-level refugee resettlement schemes.

The anti-refugee populist parties have increased influence across Europe. Merkel has few natural allies, if any, in the grand coalition or within the EU on this issue.




Read more:
What Europe can teach Canada about protecting democracy


Yet Germany regards leadership of the EU as the key to achieving its interests. Merkel is emphatic that “Germany will only do well if Europe is doing well”.

However, Germany is falling in line with more restrictive policies, rather than leading the EU towards a more comprehensive and humanitarian solution to the refugee crisis.

The ConversationIf Germany leads EU policy change, we may well see increased blocking of access to the EU for refugees and policies that emphasise control and expediency over humanitarian values.

Kelly Soderstrom, PhD Candidate in International Relations, University of Melbourne and Philomena Murray, Professor, School of Social and Political Sciences and EU Centre on Shared Complex Challenges, University of Melbourne

This article was originally published on The Conversation. Read the original article.

‘No pokies’ Xenophon goes for ‘some pokies’, but does his gambling policy go far enough?



File 20180219 116327 1xls5ni.jpg?ixlib=rb 1.1
The evidence behind Nick Xenophon’s proposed gambling reforms in South Australia is reasonably strong.
AAP/Morgan Sette

Charles Livingstone, Monash University

SA-Best, led by high-profile former senator Nick Xenophon, has announced its gambling policy ahead of next month’s South Australian election. Xenophon has backed away from the “no pokies” policy that characterised his earlier approach to gambling reform. However, the evidence behind his party’s proposed suite of measures is reasonably strong.

What’s in the policy?

Key aspects of SA-Best’s proposal are:

  • a five-year plan to cut poker machines numbers in South Australia from 12,100 to 8,100;

  • a reduction in maximum bets to A$1, from the current $5;

  • a reduction in maximum prizes from $10,000 to $500;

  • removing particularly addictive features such as “losses disguised as wins”;

  • prohibition of political donations from gambling businesses; and

  • the removal of EFTPOS facilities from gambling venues.

The policy would also empower the state’s Independent Gambling Authority to implement and evaluate these proposals.

The policy is targeted at commercial hotel operators; clubs, “community hotels” and the casino are exempt from the reduction provisions.

There are also proposals to cut trading hours from 18 to 16 per day, with the introduction of a seven-year pokie licence for venues, from January 1, 2019. Increased resources would go to counselling and support for those with gambling problems.

Notably absent from the policy is the introduction of a pre-commitment system, which would enable pokie users to decide in advance how much they want to spend. Along with $1 maximum bets, this was a key recommendation of a Productivity Commission inquiry in 2010.

The policy has attracted the expected response from the gambling industry. The Australian Hotels Association argued the changes would “rip the guts” out of the gambling industry and attack the “26,000 jobs” it claims the industry directly creates.

Does evidence support SA Best’s policies?

We’ve known for some time that reducing maximum bets is likely to reduce the amount wagered by people experiencing severe gambling problems. This in turn reduces the harm they suffer.




Read more:
A $1 maximum bet on pokies would reduce gambling harm


Reducing maximum prizes reduces “volatility”, meaning pokies may have more consistent loss rates.

Reducing access to pokies is also an important intervention, since easy access is a key risk factor for developing a gambling problem. Reducing the number of machines, and the hours they are accessible, support this.




Read more:
Too close to home: people who live near pokie venues at risk


However, very substantial cuts in pokie numbers are needed to meaningfully reduce harm. A cut of the magnitude SA-Best proposes may not be sufficient to prevent those with serious gambling habits from readily accessing pokies. This is because pokies are rarely fully utilised at all times of the week.

Removing easy access to cash has also been identified as an important harm-reduction intervention. This had a positive initial effect in Victoria (especially among high-risk gamblers), when ATMs were removed from pokie venues in 2012.

The harms associated with gambling generally affect far more people than just the gambler. The most recent study, from 2012 indicates that 0.6% of the SA adult population is classified as at high risk of gambling harm, 2.5% are classified as at moderate risk, and another 7.1% at low risk.

Based on census data, this equates to about 8,000 South Australians experiencing severe harm from gambling. Another 33,100 are experiencing significant harm, and about 94,000 are experiencing some harm.

However, each high-risk gambler affects six others; each moderate-risk gambler affects three others; and each low-risk gambler one other. So, the problems of each high-risk gambler affect another 47,660 South Australians. These are children, spouses, other relatives, friends, employers, the general community via the costs of crime, and so on.

Another 99,300 are affected by moderate-risk gambling, and another 94,000 by low-risk gambling. All up, this amounts to 241,000 people.

Of these, 190,000 are affected at high or significant levels. These harms include financial disaster and bankruptcy, divorce or separation, neglect of children, intimate partner violence and other violent crime, crimes against property, mental and physical ill-health, and in some cases, suicide.

Most gambling problems (around 75%) are related to pokies, and by far the greatest expenditure goes through them. Nothing has changed in this regard since the Productivity Commission identified this in 2010.

In this context, SA-Best’s policy has substantial justification.




Read more:
Removing pokies from Tasmania’s clubs and pubs would help gamblers without hurting the economy


Does it go far enough?

The South Australian Greens, like their counterparts in Tasmania and the Tasmanian Labor Party, want to get all pokies out of pubs and clubs. They argue gambling’s social and economic costs are far in excess of the benefits.

For Tasmania, the costs of gambling can be estimated at about $342 million per year. This is more than three times as much as the total tax take from all gambling in the state.

A similar calculation for South Australia suggests its overall costs of problem gambling are more than $1.6 billion per year. This is more than four times the total taxes from gambling the South Australian government derived in 2015-16 ($380.3 million).

With a cost-benefit ratio like that, some strong measures could well be called for. Xenophon says the proposals encapsulated in his party’s policy are the start. However, Tasmanian Labor has set the new benchmark for pokie regulation – removing them entirely from pubs and clubs.

It is remarkable that a party traditionally in lockstep with – and substantially supported by – the gambling industry has adopted such a position. Perhaps the harms have become too much to ignore?

The ConversationHow these policies might be implemented, amid the resistance they will face from a well-heeled and often-influential gambling industry, presents an intriguing prospect over coming months.

Charles Livingstone, Senior Lecturer, School of Public Health and Preventive Medicine, Monash University

This article was originally published on The Conversation. Read the original article.

View from the Hill: Shorten targets hip-pocket pain, but prescriptions yet to come


Michelle Grattan, University of Canberra

For Bill Shorten, Tuesday’s National Press Club speech was the easy start to what could be a tougher year than 2017. The address had a popular “announceable” – a proposed National Integrity Commission – and it homed in on fertile electoral ground: cost-of-living pinches, flat wages, and high health insurance costs.

But it left a heap of gaps to be filled in on what precisely are Labor plans to ease the pressures many people are feeling, and questions about its ability to convince voters that it can in fact relieve them.

Politically, Shorten could hardly go wrong with the integrity commission, pitched to tapping into the epidemic of mistrust that’s corroding the political system.

Shorten was blunt: he didn’t know of any particular instances of corruption that are demanding address. It is about restoring “people’s faith in their representatives and the system”, restoring “trust, accountability and transparency in the public sector”.

In other words, the commission is an institutional response to what has become a hugely bad vibe in our democracy.

Malcolm Turnbull on Tuesday left open the possibility of endorsing an integrity commission of some sort, while pointedly noting “obviously, in anything like that the devil will always be in the detail”.

Within his ranks there is resistance to doing something robust. Barnaby Joyce, for one, thinks it could unnecessarily restrict ministers. “You’ll be terrified to make a decision that’s different to your department,” he said, with perhaps revealing frankness.

For a long time the major parties did not believe that the objective circumstances required a federal ICAC. Now it is a matter of the public mood. And once Shorten decided to embrace the idea of a commission – probably with one eye on the looming Batman byelection, where the Greens pose an existential threat to the ALP – the government finds itself pushed towards doing the same.

But come election time, votes won’t turn on an integrity commission. They will turn on such issues as cost of living, discontent with flat wages, and health. The parties don’t need focus groups to tell them that, though no doubt the groups are sending the message.

As did Tuesday’s Essential poll (which had Labor leading 54-46% in two-party terms). The numbers show Shorten is playing to ALP’s strengths: 40% trust Labor most to handle industrial relations, compared to 27% who favour the Liberals; 39% trust Labor most to ensure the quality of Australia’s health system but only 28% nominate the Liberals.

People’s perception of a squeeze on their living costs is stark. Asked “in the last two years, do you think your and your household’s income has gone up more than the cost of living, fallen behind or stayed even with the cost of living”, 51% said fallen behind, 28% said stayed even, and 14% said gone up more.

On health, 83% agreed “the government should do more to keep private health insurance affordable”.

Shorten didn’t hold back on the problems. “The wages system is not delivering, and it’s not just cuts to penalty rates, or the exploitation of labour hire,” he said. “Enterprise bargaining is on life support.”

Workers needed pay rises. Labor would “put the bargaining back into enterprise bargaining”.

The minimum wage was no longer a “living wage”. “Our goal should be a real, living wage – effectively raising the pay of all Australians, particularly the 2.3 million in the award system.”

“Yes, we must always be mindful of the capacity of industry to pay. But let me make it clear: we need to fix the disconnect between wages and productivity.”

Much of the detail of how all this is to be done is yet to unfold. Labor has flagged that it would attack the ability of companies to unilaterally terminate agreements. It promises to restore Sunday penalty rates and have a national push to close the gender gap.

But if it wants to significantly raise the “living wage” that could be a big policy challenge and certainly lead to tensions with business, which was twitchy after Shorten’s speech.

Meanwhile medium-sized businesses (with turnovers of more than A$2 million and under A$50 million annually) are still on tenterhooks waiting for Labor to clarify what it will do with the company tax cuts already legislated for them. Shorten in the question-and-answer session said Labor would finalise its position after the budget. It was the first time he had spelled out this timetable.

On health, Labor knows that it can get people’s attention by empathising with their discontent about the rising cost of private insurance, but remains vague about how it would tackle the issue.

Shorten said he put the big operators on notice that “business as usual doesn’t work”.

“If you are getting a $6 billion subsidy from the taxpayer yet you’re making record profits, yet the prices are going up and the exclusions are going up, well that’s a problem.”

The opposition was working though “options” and would talk to the funds. Certainly there needed to be “better monitoring of exclusions”, he said.

Shorten’s reference to subsidies triggered some speculation that Labor might cut the rebate for private health insurance. This was ill-based and quickly quashed. After all, as Labor pointed out, if you’re talking about containing costs to consumers of private health cover, you wouldn’t be reducing the rebate.

The ConversationTurnbull will deliver his 2018 opening-salvo speech on Thursday. He has chosen to make it in regional Queensland rather than in Canberra, getting out of the beltway and bypassing the national media pack.

Michelle Grattan, Professorial Fellow, University of Canberra

This article was originally published on The Conversation. Read the original article.