Writing speeches for Kevin (RR) 11:41 PM

Its very surprising to find this article in the AGE ... its definitely worth checking out, and as you go through the comments you'll find it comes as no surprise to anyone that has worked in government previously.

However, i do differ from some of the comment in that i think the liberals empowered their ministers much more than kevin does.

WRITING SPEECHES

thanks to IPA for pointing it out

Insurance, the Market and those pesky wowsers (Doc Holliday) 3:19 AM

Now that my work has lightened up, I too will part a few shots at government and wowsers.

Health care puts forward a number of dilemmas for economists and policy makers. In this posting, I will consider the incentives and distortions that have arisen from government intervention in the provision of health insurance. I will also put forward a solution.

In any laissez faire insurance market, insurers charge insurance premiums that reflect the risk that people impose on the pool of insurance premiums. This is true for all insurance markets that I can think of - cars, houses, luxury boats, personal property. If you are 18 years old and park your Subaru WRX in Broadmeadows overnight, you pay the price!

Unfortunately, this doesn't occur in health. Instead, in every developed country that I can think of, everyone pays the average (pool) price - not the marginal cost. This is not because of a decision by health insurances but because of government regulation. The objective of community rating regulation as it is called, is to ensure that even the poorest can access affordable health care. Its effect is to smear insurance costs so that the rich and healthy subsidise the poor and the sick.

Community rating regulation appeared first in countries where private health insurance was the norm. But it also operates in the government-run single payer schemes (consider the National Health Service in the UK, Medicare in Australia and Canada). In these schemes, the costs of health insurance are smeared across tax-payers, not those seeking insurance. (The medicare levy surcharge is an exception, but this is only effective when we consider the role of Australia's Lifetime health cover rating system).

However, this has some rather unintended consequences (hello hello!). One is that it removes any incentive for individuals to adopt healthy life-styles. Why drink green tea and ride a bike to work if you know that someone else is paying for your healthcare?

In a laissez faire market, there would be a variety of insurance companies each offering slightly different products. Some might offer health-management organisation type contracts: you agree to change your behaviours (eg give up smoking) in return for discount insurance. (Funnily enough, the earliest health insurance schemes (organised by many religious and charitable organisations) at the turn of the 20th century did offer just that.)

But under community regulation, no one has an incentive to change their behaviour. This is a problem for both private health insurance schemes (as in US, Switzerland and Greece) and single-payer schemes (UK, Canada and Australia). In bid to protect the insurance pool against the threat of smoking and drinking geriatrics, wowsers step up to the plate to start issuing edicts: that shalt stop drinking, smoking, and growing old etc. The number of regulations that Roy posted are indeed scary. But in a dysfunctional market without marginal prices, the number of regulations can not but grow as bureaucrats scramble to change behaviour. Any market in which there are no prices will grow increasingly dysfunctional as successive layers of regulation are introduced to control it.

Is there a role for the market? I believe there is, and Australia already gives us an example. Some years ago (in 2000 I think), Australia introduced Lifetime health cover (LHC). It was introduced by the Howard Government in response to the adverse selection taking place as healthy people opted out of private health insurance to be covered by Medicare. LHC in effect penalises people incrementally the longer they remain privately uninsured. It acts like a second-best market price for private health insurance (PHI). The older and more likely you are to get sick, the more private health insurance will cost, so join up when

you're young. It doesn't give you the same incentive to change your lifestyles as an actuarially fair premium but its close. But it did influence PHI membership dramatically. It also demonstrates that people are sensitive to market prices - even for health insurance.

Back to my dilemmas for economists and policy makers. How do we get a healthcare system that is offers all the economic efficiencies that is currently lacking yet addresses the equity concerns of providing care for the poorest in the community? The obvious response is to introduce a voucher-type system. Governments provide individuals a voucher (it may be means-tested) to be spent on health insurance. The amount given to the individual reflects their risk-rating (so high risk individuals get paid more). Individuals can get to keep some of that voucher if they can demonstrate a reduction in their risk-rating (credited back to a Medicare Savings Account for use on a rainy, sick day). Individuals can use that voucher money to purchase private health insurance from any number of competing health insurers on the market.

There is another dilemma in health care that needs addressing - market power of medical professionals (doctors and surgeons). But that is for another posting.

regards

Doc Holliday.

wowser, wowser, wowser (Roy Rodgers) 12:25 AM

Lucky for us the good people over at the IPA have compiled a comprehensive list of all the new laws and regulations the task force put forward in its report.

As you can see quite a few!! enough to keep a whole armada of cubicles busy for the next 10 years.

All the economic consultants out there are going to start salivating the second they see this list ... wont be able to help themselves... just think of the revenue stream. But who am i to talk, the second i saw the list i decided to seriously consider the wife's contention that we just need that holiday shack on the beach.

New laws
1. Food and beverages classification
2. Junk food if self-regulation fails
3. Raise price of tobacco
4. Tobacco promotion ban
5. Tobacco out of sight in retail outlets
6. Plain packaging on cigarette packages
7. Ban smoking in public places "where children are likely to be exposed"
8. Ban smoking in cars
9. Second-hand smoke in workplaces, incl. outdoors
10. Second-hand smoke outside, "where people gather or move in close proximity"
11. Increase size of pack warnings
12. Tobacco brand names
13. further protections against sales to minors
14. Second-hand smoke outside, "where people gather or move in close proximity"
15. Ban vending machines sales, the internet, and at hospitality & other social venues
16. Nationally consistent liquor outlet opening times and density
17. Nationally consistent accreditation requirements for liquor licences
18. Nationally consistent late night outlet laws
19. Nationally consistent alcohol serving and training
20. Alcohol promotion regulation if voluntary regulation inadequate
21. Alcohol advertising during live sport broadcasts
22. Alcohol advertising during high adolescent/child viewing
23. Alcohol sponsorship of sport and cultural events
24. Alcohol promotion regulation
25. Alcohol availability restrictions, indigenous communities
26. Liquor licence hours restrictions in indigenous communities

New Programs and Frameworks
27. National Framework for Active Living
28. National Food and Nutrition Framework
29. National program to support Health and Physical Education in National Curriculum
30. Expand after-school health programs
31. Healthy and Active Families initiative
32. National Healthy Community Leadership and Education Program
33. Social Marketing Strategy
34. Multi-component community-based obesity programs in low SES communities
35. Multi-component community-based obesity programs in indigenous communities
36. National workplace health leadership program, and best practice guidelines
37. National accord for workplace programs and risk assessment
38. National program to alert pregnant and pre-pregnant women of dangers of excessive weight
39. National strategy to combat illicit tobacco trade
40. Multi-component community-based tobacco control projects
41. Develop further Framework Convention on Tobacco Control
42. Alcohol Diversion Programs, indigenous communities
43. Network of Alcohol-related programs
44. National Strategic Framework for preventative health research

New bureaucracies
45. Prime Ministers Council for Active Living
46. Healthy Food Compact
47. Regulatory body for required disclosure to government, communication to consumers and emissions
48. National Tobacco Strategy Steering Committee
49. National Prevention Agency
50. Preventative health strategic research fund
51. National preventative health research register

Recommendations
52. Research Program to inform National active living framework on economic issues
53. Commission review of economic policies and tax systems towards encouraging healthier food consumption
54. Work with industry towards food labelling
55. Voluntary industry scorecard
56. Nationally agreed accreditation standards for food labelling
57. Research: program to strengthen evidence of effective workplace health promotion
58. Research: legislative changes to encourage workplace health programs
59. Research: feasibility of grants and tax incentives for employees to encourage achievement of benchmarks
60. Health and PE in National Curriculum
61. Establish system to monitor policy of minimum 2 hours physical activity per week from K-10.
62. Research: How teachers promote health
63. Community Intervention Trials
64. Local Government Partnerships to encourage local councils to adopt health guidelines
65. Research: into effectiveness of the self-regulation of junk food
66. Expand allied health workforce
67. Clinical guidelines for allied health workforce
68. Carry out National Risk Factor Survey in 2010
69. National Children's Nutrition and Physical Activity Survey in 2012
70. Research: national research agenda for obesity
71. Research: ongoing research into obesity into indigenous communities
72. International agreements to combat illicit tobacco trade
73. Social marketing campaigns against tobacco use
74. Research into warning label effectiveness
75. Tobacco retailers licensing regime
76. Research: possibility of legal action by government and others against tobacco companies
77. All health services smoke-free, incl. Grounds
78. Patients quizzed about smoking status routinely
79. More money for: extra Quitline resources
80. Nicotine replacement therapy more affordable
81. Social marketing campaigns for indigenous smokers
82. Training in smoking cessation advice for indigenous health workers
83. Tobacco Control Workers in indigenous communities
84. Promotion to health professionals for Quitline
85. Poster advertising in disadvantaged communities
86. Increase efforts for anti-smoking for people with mental illness
87. Prisons and state-funded human services agencies smoke-free
88. Target parents to convey message to children to not smoke
89. Make smoking classifiable in movies
90. Constant alerts to public about dangers, and about new research findings
91. Tobacco surveillance system to assess whether anti-smoking targets are being met
92. Increase resources to develop and implement best practice for laws and regulations related to alcohol
93. Develop business case for COAG nation partnership on policing and enforcement
94. More money for: Drink-driving monitoring
95. More money for: Licence enforcement
96. More money for: Annual review of licences
97. Demerit points for licences
98. More money for: monitoring liquor laws
99. Social marketing strategy
100. Campaign to "build a national consensus on healthy alcohol consumption"
101. Campaign for awareness of alcohol guidelines
102. Campaign to de-normalise intoxication
103. Campaign to raise awareness of consequences of alcohol
104. Research: effectiveness of voluntary approach to alcohol promotion regulation
105. Research: alcohol modelling
106. Advocate: alcohol floor price
107. More money for: alcohol campaigns
108. More money for: healthcare providers, indigenous communities
109. More money for: staff training, indigenous communities
110. More money for: treatment programs, indigenous communities
111. More money for: coordinated case management, indigenous communities
112. More money for: responsible serving of alcohol provision
113. Community groups of indigenous to promote alcohol responsibility
114. Research: alcohol consumption, indigenous communities
115. More money for: health care for alcohol problems
116. More money for: health care for alcohol problems, disadvantaged groups
117. Nationally consistent principles regarding alcohol to minors without parental consent
118. Promotion of early drinking age discussion
119. Community support for parents and alcohol
120. Research: Alcohol use in families and with children
121. Research: nationally consistent collection and management of alcohol wholesale sales data
122. Research: National indicators on alcohol consumption

Link to IPA discussion

I want my 8 cents back (Roy Rodgers) 3:30 AM

Gather round kiddies its story time.
Today’s tale is one of hope, dreams and productivity improvements.

Starting way back in our distant past ... the eighties ... governments across our broad land began a process of microeconomic reform aimied at shaking the shackels of governement owned utilites and achieveing efficiencies in service provision. Collectively our attitudes to government utilities had changed. No longer were we content to sit back and watch public servants sit around on their arses all day.

There was a broad recognition that the private sector was much more efficient and effective in providing people with they wanted when they wanted it. So our governments in a seemingly enlightened state of being jumped to the obvious and quite right conclusion that perhaps the public sector would be better at providing goods and services if it adopted some private sector practices.

The first step in this reform process was corporatisation. Governments from Darwin to Hobart set about corporatising their utilities. They established corporate structures that were separate and independent from government (to varying degrees of success). Thus utilities became corporations.

These new corporations were incentivised to behave in a commercial manner. And surprise surprise ... we got to experience huge bursts of productivity and masive increases in service standards. No matter how annoyed you currently are about customer service with Telstra, electricity retailers or water businesses, none of it compares to the past.

This is going way back (and ill probably lose all the gen y ers) but we should all have some dim memory of what it used to be like dealing with those monolithic old government utilities, of having to queue on phones for hours on end, of having to front up at dank musty offices and stand in lines a mile long waiting to get access to some nose picking genius who would inevitably turn out to be as helpful as an arse full of hemaroids (apologies I'm still carry around some scars).

The days of ping pong playing public servants are well and truly gone. Although they still cop a bit of stick most employees of these businesses now work quite hard and are in most cases just as productive as their fellow counterparts in equivalent private sector positions.

Once business had been corporatised the next step was for them to achieve full cost recovery. The idea being that people should pay for the services that they consume so that they themselves make better more efficient consumption decisions and so that their consumption does not (theoretically at least) infringe too greatly on others by demanding some form of cross subsidisation.

Other commercial practices were imposed on them. They were expected to earn a commercial rate of return, they were expected to face a commercial cost of capital, and they were expected to deliver annual productivity savings ... all good stuff.

In some cases corporatisation led to governments having to face the brutal truth that there was absolutely no reason they should have been in the businesses they were in. Thus we had privatisation. Privatisation still cops a bit of criticism from your leafy suburb types, but the only criticism that can truly be levied is that perhaps in their general rush to off load some of these business governments were a bit hasty and underpriced some of their assets.

But hey, at the end of the day its not the governments job to be entrepreneurial and if there are members of the private sector who are only to happy to provide the requisite goods and services then government has no business in competing with them by operating businesses and should simply get out of the way ... which (ignoring the burden of regulation) by and large they have over the last 20 years. Don’t get me wrong that regulatory burden is quite substantial and ever growing but thats really the subject of another post.

And life was grand ....... .... with one exception.

Our national broadcaster the ABC.

Let’s be upfront here. There is nothing mythical about the ABC. It provides TV broadcasting services. Some of it is good and some of it is bad. But at the end of the day it is just another form of government utility. And while aunty may be a corporation it is not one of the good modern sorts that pays for itself, responds to customers demands and continually seeks to better itself.

No! The ABC is an old school government utility .... one that’s totally dependent on budgetary funding, just as addicted to the public dollar as any addict is to his dealers junk.

The corporatisation of the ABC occurred in 1983, previously the C had stood for commission. with the benefit of hind sight its not actually clear why the utility was corporatised. In its own words it summarises the benefits of corporatisation as:

Since the Corporation was established the ABC has not only forged ahead in the areas of radio and television broadcasting, it has expanded its base to include the introduction and growth of a number of other functions. Major restructuring of the organisation occurred with radio and television being split into separate divisions. Senior management was reorganised and an overhaul of management, finance, property, engineering and equipment areas began

It would appear that the ABC itself sees its main achievements as being

1. doing more stuff

2. shuffling cubicles

There’s nothing in there about productivity gains or achieving some level of cost recovery. Nothing about standing on its own two feet.

And sure as day follows night the place would be full of no-hopers and loafers. The ABC is correctly characterised as a type of collective dole payment for 90% of Australia’s unemployable arts graduates. Although i know absolutely nothing about its expenditure profile, ill bet my little lunch that its in need of a serious haircut.

With the benefit of hind sight you may assume that the point of corporatisation was to provide the broadcaster with a degree of independence so that it would not be just the governments mouth piece. However, since the 80s it has become well and truly partisan. The views, agendas and spin coming out of it are wholeheartedly labour orientated. Point in case, the insiders on Sunday morning... not a bad show, but unarguably subject to systemic bias. There are always without fail two 'left commentators' and only one 'right commentator' thrown into this mix is Barry Cassidy who as an ex advisor to the Hawke government can only be viewed as 'left' ... that makes it three to one. Another example is Q&A, I cant begin to count the number of times I've tuned in only to witness the spectacle of Joe Hockey taking on every other member of the panel including Tony Jones the host.

Above commercialism

So what possible justification could there be for this state of affairs. Well I’m sure some would argue that the ABC needs to leach of the public teat because it is quite simply above having to earn a dollar, that advertising is too grubby and too corrupting. The only response any rational person could possible have to such a contention is GROW UP or #@$% off to North Korea. North Koreans are above grubby commercialism.

Gone are the days when most people were prepared to listen to winging arty wankas. Now days people are more concerned about why they have been put on a waiting list for non elective surgery, why their kids are doing their lessons in demountable class rooms, why there are not enough police on the streets to protect us. For god sake the government has allot more important things to spend our tax money on (ignoring of course the latest round of madness from the stimulus packages). And this issue is not going to go away, the whole concept of the ABC is becoming increasingly at odds with the values of a modern liberal Australia. It is only going to become harder and harder to justify a tax payer funded British content TV channel.

The ABC needs to protect and promote Australian culture.

a;lkszsdrtsdfgdzfgfdgjasfi .... that’s the sound of confused disbelief. Protect and promote our culture? and here i was thinking the ABC was just a franchise of the BBC. Lets see, favourite ABC shows - the bill, the goodies, silent witness, spooks, black books, mis marple, doctor who, life on mars, grand design and on and on and on. Aussie my arse!!

Just exactly what has been the ABCs contribution to culture? The closest it’s come to an iconic Aussie show was sea change. Other than that it’s been a long time between drinks.

At the end of the day it doesn’t matter where you sit on culture. If the aim of the government is to fund for whatever reason Australian content in the base belief that to do so somehow promotes our culture it does not follow that the government needs to fund an entire TV channel. It could simple subsidise or provide incentive payments to the privately owned channels to produce the content. This would have to be much cheaper because we could target directly the Australian produced content and could avoid having to spend tax dollars on paying for such crap as Foyle’s War. Given its seemingly never ending British programming our 8 cents a day has probably done more to promote English culture in Australia than it has to preserve and protect our own.

Supporting localised production

Other arguments such as the broadcaster providing a vehicle for more localised programming don’t wash either. If more localised programming is the objective, the Commonwealth would be better served by opening up licensing restrictions on the digital network to allow community channels like channel 31 make the transition from analogue to digital and to provide space for other community groups or enterprises to set up shop.

Given the massive leaps in production savings generated by cheaper good quality cameras and cheap good quality editing software, it would seem that the only remaining obstacle to people setting up local channels is for the commonwealth to removed restrictions on broadcasting. I don’t know about you but my TV has over 300 channels, which begs the question of why I only receive 4. Sorry that’s 5 now that 10 has set up one (a channel that seems to broadcast NASCAR racing 24 hours a day)

Content for children

Another argument relates to the programming of content for children, again as with culture there is no reason the privately owned channels can not provide this material, its not as if they don’t already, and again as with community there are plenty of spare channels floating round.

Universal coverage

The only other argument for the ABC is coverage. You could argue that the ABC has some type of universal service obligation, so that every Australian no matter how remote has access to the Bill. And thus feel connected at some level with the rest of the Australian population. However, this argument doesn’t wash either. Telecommunications is a much more important service and a minimum level of service is provided universally regardless of the fact that there is no national telecommunications company. Universal telecommunications is provided via a USO by Telstra predominantly and is funded by all carriers through a universal service fund. There is no reason this can’t be duplicated for TV services. And I should also say that I don’t really believe that there are parts of Australia that only receive ABC.

Free tv?

So putting aside our inability to justify the ABC. What else can we have a go at? For one thing I think it’s a total misdemeanour for the ABC to include itself in the Free TV group. There is nothing free about it. We pay and we pay allot. Unlike the commercial channels that adopt a negative production function, which sees content being funded through advertising. The ABC relies on us to pay for it. And pay for it we do and have been since amendments to the Broadcasting Act in 1948 meant that the ABC was no longer financed out of licence fees, but directly by a government lump sum appropriation ... by tax.

In the 80s the mantra was 8 cents a day.... the idea being that we should all be happy little farts that were getting such value for so little money. Well 8 cents a day adds up. 8 cents over a population of 20 million gives 1.6 million per day which gives $584 million for a year, over a 10 year period this amounts to $5.84 billion, after discounting the NPV over this period is $4.2 billion. That is quite allot of school rooms, nurses and police we are foregoing to keep aunty alive. And that number is unadjusted for inflation ... so were talking 80s dollars not money of the day.

Of course the actual budgetary spend has moved on since the 80s. In the 2009 budget the total appropriation for the ABC wasn’t $584 million rather it was $912.3 nearly double, this makes it one of the better funded government agencies. Even after taking into consideration inflation you can pretty safely say the ABC has not been able to achieve any significant efficiency over the last 20 years (unlike the vast majority of Australia). This is even more striking when you consider the economies that have been delivered to the sector through technological innovation. By the way the NPV of $912 million per annum over a 10 year period (6% discount rate) is $6.7 billion. The ABC now cost 13 cents per day and it is most definitely NOT free TV.

So why does the ABC exist? You tell me, I can’t work it out ... although I do have a suspicion that it has more to do with the political power of celebrity than it does with good governance. Heaven forbid that Geoffrey Rush might actually say something nasty about big kev.

Call me a hypocrite........ bureaucracy gone mad 4:35 AM

We have recently found ourselves in the unfortunate position of having to put our two girls in childcare, so we have begun the process of being properly registered for approved care, thus entitling us to claim half the cost of childcare as a tax rebate (I may be a libertarian, but I am not stupid - well, not that stupid).

It has been a labyrinthine undertaking, not least the 22 pages of application form we filled in two days ago. To hand it in, I waited 20 minutes in the Family Assistance Office, only to be told that I need to bring in the original birth certificates for both girls (I can't fax them - the originals need to be sighted). "It won't happen overnight but it will happen", as they say.

I went away wondering whether this is just bureaucratic inefficiency or a deliberate strategy to cut costs......