Current Affairs

Governomics

Melbourne University Press have just published Governomics. The book is about the role of government and the importance of the public sector.

The day after Governomics was launched Geraldine Doogue interviewed Miriam Lyons and Ian McAuley on the ABC Radio National program Saturday Extra.

The case for government

In a fightback against the “small government” obsession, Ian McAuley and Miriam Lyons have written Governomics: Can we afford small government?

It was published on May 1 by Melbourne University Press, and, and was covered in an extensive interview on Geraldine Doogue’s Saturday Extra on the following day.

In their words:

“This book emerged from the authors’ many years of collaboration at the Centre for Policy Development, Miriam as executive director and Ian as an external fellow.

In our work together we have seen two strong trends in Australian public life: one is the dominant idea that the best possible government is an emaciated one; the other is that many who seek change struggle to make their case in economic terms.

In the din of political slogans about the supposed need to cut public expenditure it is easy to lose sight of the sound economic reasons for investing in public education, for resisting the sell-off of public assets, for taking strong action on climate change, for public funding of health care, for regulating to protect safety standards, for providing decent support for aged pensioners and the unemployed, for allowing modest levels of public debt, and for collecting enough tax to fund these services.

But while there is no shortage of public passion about these issues, such sound economic arguments are rarely articulated. If the economic debate is left to those who stand to prosper from ‘small government’, the community will lose out.

In our shared and separate work—supervising researchers and interns at the Centre for Policy Development (CPD), teaching students at the University of Canberra and engaging with diverse communities through ideas festivals—we have worked on ways to help people engage with economic issues.”

It’s a timely reminder in this budget period, where the prevailing assumption, largely unquestioned by the media, is that the task of “budget repair” (a term coined by Hockey and repeated by a partisan media) is to be through cutting expenditure.

McAuley and Lyons remind us that “small government” comes at a cost. The private sector can fill some of the space vacated by government, but we pay dearly for adhering to that ideology.

We can fund health care through private health insurance, but as I and others have pointed out that’s a very expensive and inequitable way to achieve what Medicare achieves much more fairly and efficiently.

We can let the public education system run down, and rely on private schools to fill the gap. But the costs are enormous. As those who can afford to abandon shared health and education services and enclose themselves in their own “gated communities” of private schools and private hospitals, those government services slowly become transformed into services for the poor or “indigent” (to use the demeaning American term). And parents who value sharing, who value social inclusion, find their choice constrained. McAuley and Lyons, drawing on the work of the economic philosopher Thomas Schelling, show how shared services such as health and education systems can unravel into something resembling segregation.

Their work is a vigorous defence of the “mixed economy” that has contributed so much to our prosperity in the past. It’s a reminder that when Australia federated we deliberately chose the word “Commonwealth” to describe our new nation. McAuley and Lyons present a strong case for defending the common wealth. John Menadue