Centre for Policy Development's Blog, page 119

The Blue Economy: 10 Years, 100 Innovations, 100 Million Jobs – Dr Gunter Pauli June 9th

CPD and Sydney Ideas co-present Dr Gunter Pauli at the law school foyer Sydney Uni.  June 9th from 6pm to 7.30pm -this is a free event and open to all, entry will be on a first come first served basis.

Come and hear this inspiring entrepreneur explain his mission to invest in 100 sustainable businesses.

Gunter Pauli founded the Zero Emissions Research and Initiative (ZERI) at the United Nations University in Tokyo. He subsequently established The Global ZERI Network, redesigning production and consumption into clusters of industries inspired by natural systems, based on open source research and experimentation with a worldwide team of eminent scientists and design thinkers. The mission of The Blue Economy is to prove 100 manufacturing innovations with viable business models that could generate 100 million jobs in 10 years, all with zero waste impact on the environment. Each innovation is inspired by science and draw on biomimetics and the laws of physics. They cover the full gamut of industrial activity, from energy to mining to medicine to banking.

Miriam Lyons | Brisbane Ideas Festival

Miriam Lyons will be presenting at the Brisbane Ideas Festival on Friday 20th May. Her session, Carrots and sticks: Are we managing ourselves to death? looks at whether carrots are effective incentives for managing and motivating staff.

Click here to reserve a seat for this free session and find out more.

Fiona Armstrong & Laura Eadie | A Clean Break for Australia's Future

The Gillard goverment's lightweight commitment to a low-carbon economy puts Australia's future at risk. Fiona Armstrong and Laura Eadie argue that a carbon price and the renewable energy target are not sufficient measures to meet Australia's inadequate 2020 target of a 5 per cent reduction, let alone the 2050 target of a 60 per cent reduction. Well targeted innovation policies are also needed to drive clean energy development in Australia.

Read the article online at Climate Spectator here.

 

ANZSOG Conference 27th – 28th July Putting Citizens First Engagement in Policy and Service Delivery for the 21st Century

July 27th and 28th The Westin Sydney

Putting Citizens First – Engagement in Policy and Service Delivery

for the 21st Century – will again offer a forum for participants to learn from high quality,

senior level strategic thinkers, providing both practical, case based presentations and

opportunities for discussion and networking. Attracting a variety of engaging and insightful

presenters from Australia, New Zealand and beyond, the event promises to be not only

stimulating but have real applications at the policy coalface.

Keynote presenters include

Beth S. Noveck

Professor of Law, New York Law School and Former United States

Deputy Chief Technology Officer (2009-2011) and leader

of the White House Open Government Initiative (@opengov)

Donald F. Kettl

Dean and Professor at the School of Public Policy, University of

Maryland and non resident senior fellow at the Brookings Institution

Gerry Stoker

Professor of Politics and Governance, School of Social Sciences,

University of Southampton

To register for this conference and see the program please click here

 

ANZSOG Annual Conference 27th and 28th July Putting Citizens First Engagement in Policy and Service Delivery for the 21st Century

July 27th and 28th The Westin Sydney

Putting Citizens First – Engagement in Policy and Service Delivery

for the 21st Century – will again offer a forum for participants to learn from high quality,

senior level strategic thinkers, providing both practical, case based presentations and

opportunities for discussion and networking. Attracting a variety of engaging and insightful

presenters from Australia, New Zealand and beyond, the event promises to be not only

stimulating but have real applications at the policy coalface.

Keynote presenters include

Beth S. Noveck

Professor of Law, New York Law School and Former United States

Deputy Chief Technology Officer (2009-2011) and leader

of the White House Open Government Initiative (@opengov)

Donald F. Kettl

Dean and Professor at the School of Public Policy, University of

Maryland and non resident senior fellow at the Brookings Institution

Gerry Stoker

Professor of Politics and Governance, School of Social Sciences,

University of Southampton

To register for this conference and see the program please click here

 

Public Service in the news

A snapshot of how and where public services are making the news. Who's saying what? Good and bad news, refreshed weekly. Suggested links are very welcome > email James.Whelan(at)cpd.org.au

Budget breakdown: bean counting compromises public service > James Whelan and Jennifer Doggett argue that the increase in the Efficiency Dividend announced in the budget will place further pressure on the public sector and result in more agencies reducing their services to the general public…

$1bn budget boost for public sector projects > The federal budget was a boon for the technology sector, with more than $1 billion allocated to public-sector projects that will underpin reforms in service delivery…

News not good as ABC faces budget crisis > The ABC's news division is facing a budget crisis after a plan to cut international reporting costs failed and a string of international disasters led to a blowout in costs…

Public sector should innovate instead of outsourcing > Putting public services out to tender 'avoids the issue' of how to increase productivity, a Work Foundation report published today warns…

Eva Cox | Making a Society More Fragile

The primary and secondary purpose of Gillard's first budget as PM appears to be economic growth for its own sake. It fails to deliver any new equity policies that could contribute to good social outcomes. The nearest it comes to social policies is a range of mainly coercive measures to 'improve' the supply of low-paid workers. The opportunity to be a paid worker is touted as the ultimate Labor value, but I question whether the measures introduced in the budget adequately help the long term unemployed back into the workforce. The Budget speech failed to provide recognition of the structural or social barriers that many jobseekers face, nor the value of other unpaid contributions that people make to our social well being.

Since Budget night, Wayne Swan has been on the airwaves saying this budget is all about jobs and pushing a form of civilian conscription by coercing people receiving income support into more job seeking. His claim that all of those out of the workforce should be able to find paid work is both unfair and not true, despite the type of assistance on offer.

At any one time there are about 250,000 vacancies, and according to DEEWR's own figures,most of these employers want good qualifications and, most likely, recent experience. Currently there are at least 1.5 million Australians who are either looking for work or looking for more work. Those left to line up in the Centrelink queues may include many with limited qualifications but among them you will find there are many with skills and credentials. These are the unemployed who may have spent time out of the workforce but are rejected by employers because of age, parental responsibilities, ethnic or other out-group membership.

So is more training the solution? Already many long-term beneficiaries are being pushed into training but, because they have little work experience, they continue to miss out. They are being compelled to jump through further hoops to prove they are prepared to take on paid work despite being unlikely to score one of the few available jobs for the unskilled. The barriers they face are often on the other side of the interview table. There is, interestingly, little in the budget for changing employer attitudes to people with disabilities, sole parents and other stigmatised groups.

And the government knows that even with subsidies, it will be hard to place these groups. Their funding of 10,000 Newstart level subsidies to employers will make hardly a dent on the 230,000 long-term unemployed. Those who will experience jobs growth will be those hired as the trainers and paid invigilators to carry out and enforce the hoop jumping.

This Government is particularly culpable in its continued stereotyping of the unemployed as unwilling workers – leaving the tabloids to rest of the dirty work and translate their rhetoric into phrases like dole 'bludgers' and 'war on the idle'. It is no surprise then that we see them as needing paternalistic coercion. The Treasurer's tough sounding language in promoting this budget is potentially unfair and seriously damaging to both social trust and the community ethos. Voters who get sucked in by the deliberate stereotyping of sole parents, the unemployed and other out groups are more likely to see others people as not to be trusted. This makes them less likely to manifest political goodwill and social generosity.

The current low levels of political debate and apparent turn off by many voters from optimism about futures suggests that there are serious questions about our levels of social cohesion and resilience.

Yet almost all the political debate is focused economic management which puts up a false view that both the mining boom benefits and the economy will solve all our social problems. The basic assumption is if you have a job, that will solve everything and if not, the government will pressure you into one. The social fabric is not even recognized, let alone mended.

This viewpoint was always going to make a bad budget for those unfortunate Australians who are not contributing their time and efforts in approved Gillard style of hard working early risers. Citizen should make their 'choices' as informed but individualised consumers of services, not citizens. The role of government is defined as supporting such choices with a range of sometimes not very useful  payments.

The grossest targeting is moving  'grandfathered' sole parents, whose children turn 12, off parenting payments onto Newstart. They lose up to $57 a week, though now all sole parents on Newstart can keep more of their extra earnings. Presumably, this change is to pressure them into full time work, despite their parenting responsibilities for older children who need supervision.

Interestingly this cut has received much less media attention than the pegging of family payments for some high-income earners. One parent families, whether teens or older, are generally suitable targets for political opprobrium and scapegoating. 'Tough love' is persecution when applied coercively to vulnerable groups.

The introduction of income management in some designated areas is further evidence of this punitive attitude. There is no evidence that the NT version actually does improve lives. This less universal WA version, focuses on 'vulnerable people', and voluntary sign-ons. It is not clear from the brief limited evaluation whether it is effective,. However, the government is funding extra bureaucrats to control spending with no extra financial resources for the clients.

The coercive approach in all these areas ignores cultural and social disadvantages and differences. It reduces the complex lives in Aboriginal communities, of those with disabilities, or those who care for children into a caricature of a sloth-driven sinner.

There is little in the budget that addresses other inequalities or unfairness. The other offers on the table don't add to up to a coherent overall plan. Some competing teachers will receive a bonus after stiff assessments but not yet, and the program may not improve standards. Some parents, who keep their late teen children in education will be helped, as long as they are not too well off, and other low income workers may get some of their payments sooner.

Tradies and other small business will get cheaper vehicles but hopefully may have to pay a fairer share of FBT. Pensioners will get a set top box and help installing it (I did my own!) at great expense. There are a few other extra payments for school uniforms, completed apprenticeships and other costs. There are a few obviously good news bits: some extra money for children with disabilities and ageing ex-prisoners of war. There is a hit on presumed higher income parents who fund their children's HECS and a cut in the Dependent Spouse Rebate for those under 40, which are somewhat redistributive in the right direction. These may add to some perceptions of fairness but there are many other bigger unfair rorts that were not tackled, like superannuation tax concessions.

Overall the budget fails to fulfill its function of making wise decisions on behalf of the people. There is no mention of a good society, based on principles of equity and ethics or interest in the social cohesion that makes democracies resilient.

It fails to show goodwill towards the less politically powerful, or a reasonable balance between interest groups. The budget should have explicit social goals and the economic means to fund these. The government could have used the money in the budget to fund non-existent services for the willing participants:

a network of special education services for those with young children that offer both on site care and flexibility. Then they would have seen whether the mothers they want there would come without coercion. There are few such places now and no ongoing funding.

Instead of forcing work for the dole, some funded community employment places could offer serious work experiences and fill gaps in the social system.

Some tough work on employers who discriminate would get more jobs for those with disability and redesign of jobs to make them work.

A return of CDEP in Indigenous communities and others with some decent capital funding and training would make a lot of sense and empower local communities to act on their problems and needs.

Instead, the budget uses social stereotyping to show the Government as tough. Calculations about GDP and deficits take the place of any overarching vision of the good society that can meet social and economic needs and share collective risks. Unfortunately, creating social fairness that leads to well being is definitely not on the agenda of either major political party.

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John Menadue | Counting the Cost of Immigration Detention

Asylum seekers continue to suffer because of poll driven policies and their fate remains an enormous political problem in Australia. John Menadue adds up how expensive trampling on human rights really is. He finds that a new approach is not only urgently needed but that it but saves money too.

Read John Menadue's article online at the ABC's The Drum here.

 

James Arvanitakis & Alex Surace | The Disease that Ate the Budget

Wayne Swan's fourth budget can be commended for finally addressing middle-class welfare and ending unnecessary tax cuts. However, Australia once again finds itself riding the resource boom and China's continuing expansion with little consideration of the broader consequences for the nation in the medium to long term. Furthermore, in the short term this mining boom will continue to compound Australia's multi-speed economy. Just how cognisant the Treasurer is of this fact was evident in the first few paragraphs of his speech when he used the phrase 'patchwork economy' multiple times and described the coming years as the Asian century.

In addition, it is concerning that the plan to return the budget to surplus in 2012-13 is dependent on rising commodity prices and the ongoing expansion of the resource sector – an industry whose benefits are often exaggerated. Is there a Plan B if record demand or prices level out? This budget unfortunately continues to aggravate the multi-speed economy by putting all of our economic eggs in the one basket.

The question is whether we can continue to do this or will the multi-speed economy cause a real headache for Australia? Can we afford to continue to rely heavily on mining at the expense of our manufacturing, tourism and education sectors?

The answer is a firm no as each of these sectors are an important part of the Australian economy. Manufacturing, for example, accounts for just over 10 per cent of employment and almost 20 per cent of exports. Manufacturing employs 1.1 million people with almost half of these people working for firms with fewer than 100 employees. Despite significant global pressures, this industry has remained dynamic and relevant by restructuring to focus up the value chain.

Like manufacturing, tourism and education are also important contributors to the economy [PDF] with tourism employing around 4.5% of the total workforce and contributing 8.3% to exports. Education further adds to the mosaic of the economy by contributing 6.5% of total exports.

Unfortunately, the mining boom both creates pressures and diverts our attention from the various risks that these sectors confront. To begin with, the economic activity around the mining boom creates inflationary pressures. The Reserve Bank has previously responded to such pressures caused by the mining sector by increasing interest rates[1] – something that they are likely to do again. Higher rates will increase the cost of funds to industries that are not benefiting from the record terms of trade experienced by the resources industry.

While the Treasurer has attempted to address inflation by increasing the skilled migration levels and improving vocational training, it is unlikely this measure alone will ease these pressures.

Additionally, the ongoing focus on the mining industry will continue the process of crowding out investment in other sectors of the economy. This occurs as investors take note of the government's ongoing support and reliance on mining profits. Consequently, capital continues to flow to this sector to the detriment of others. After all, if the government is focusing on mining to return the budget to surplus, it makes sense to expect the government to maintain support for the industry even if prices or demand fall. The fact that the budget included assistance of $34 million to manufacturers directly servicing the resource sector confirms this.

A third important downside of the mining boom is the consequences that follow a rising currency. Driven by record terms of trade and high interest rate differentials, the appreciating Australian dollar has resulted in record high exchange rates that are making export industries including manufacturing, tourism and education, much less competitive. While mining can survive the high dollar thanks to its healthy profits, other export sectors are simply being punished by it.

What appears to be unfolding is a classic case of 'Dutch Disease' (a term coined from the experience of the Netherlands' initial economic boom from North Sea oil). The basic idea is that an increasing reliance on natural resource exploitation ultimately leads to a decline in the manufacturing sector.

This occurs as the value and volume of natural resources being extracted increases, an appreciation of the nation's currency follows that makes other exports more expensive. This means that other sectors of the economy like manufacturing begin to crumble as it becomes increasingly difficult to compete internationally.

An associated risk is the deskilling of the workforce. The high dollar means that it is more attractive to domestic consumers to import high value foreign goods than those made locally. Over time this decreases the demand for skilled labour as production of high value goods moves overseas. This does not necessarily result in large unemployment, but a fall in the demand for skilled labour. This process even has the potential to de-industrialise the economy as local industry begins to collapse.

This is aggravated as both the government and private sector respond to the increasing economic activity surrounding natural resource extraction by allocating more resources in support of continued expansion. This is exactly the type of crowding out we noted above as other sectors lose out.

In addition to these developments is the emerging risk of dumping. Dumping generally refers to international trade where a manufacturer in one country exports goods to another country at below market prices to protect their own markets from fluctuating prices. Heather Ridout, from the Australian Industry Group, noted that the high Australian dollar is making Australia more vulnerable to such a process as imported goods become cheaper compared to locally manufactured alternatives.

The irony then, is that the fortunes of these other sectors are becoming inversely linked to the mining industry. That is, in the process of producing low value-added resource outputs, other sectors of the economy become less internationally competitive. Clearly this has negative implications for the long-term prosperity of Australia.

The problem is that this budget seems to support rather than treat the symptoms of 'Dutch Disease' as it missed an opportunity to address the two-speed economy, the issue of the rising Australian dollar and the vulnerabilities being experienced by the rest of the economy.

Now that we know we are showing all the symptoms of the 'bug', how should the Treasurer have responded?

The first thing that needs to be done is to reduce the value of the Australian dollar to a more sustainable level that does not compound our multi-speed economy. One way of doing this is to impose a super-profit tax on miners as proposed by the Henry Tax Review. The tax would take some of the heat out of the mining sector as well as generate revenue that could be used to create a sovereign wealth fund. This fund could invest in international markets, putting downward pressure on the value of our currency as we sell Australian dollars.

Another strategy which the government is currently working on, but has failed to adequately link to industry policy, is to create a price on carbon. Pricing carbon is not simply about addressing climate change, but establishing a sustainable economy that meets the future demands of a carbon constrained world. This is achieved by ensuring that the polluter pays and we send a signal to the market to invest in clean technologies helping us to diversify our energy related and manufacturing sectors and economy. Similarly, current fossil fuel subsidies amounting to several billion dollars that are afforded to the mining companies should be stopped and redirected to support other parts of the economy that are not in the mining 'fast lane'.

The mining boom and close links to China were key reasons why Australia was able to traverse the recent volatility in the global economy. We cannot, however, continue to put all our economic eggs in one basket. We are unlikely to be so luck next time.

[1] RBA, Media release No 2006-03, 3 May 2006

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Ian McAuley: Taking the wrong road to a surplus

Deep within the budget is a glimmer of traditional Labor principles. Gillard and Swan have made some cautious moves to wind back middle class welfare payments and tax breaks, which have been putting pressure on other areas of public expenditure.

But so long as the Government feels it cannot raise more revenue, Australia is facing a continuation of severely constrained expenditure on public services, with the occasional short-lived boost from a Keynesian stimulus.

Read Ian's full piece online at The Drum here.