What people in other forums are saying about public policy
This week's content
The pandemic’s progress
Australia – Morrison is not a liar
The Princeton University philosopher Harry Frankfurt, author of On Bullshit, distinguishes the liar from the bullshitter. The liar engages in a conscious act of deception, whereas the bullshitter has no concern for the truth – perhaps not even a concept of the truth.
On the distribution of vaccines it would have been easy for Morrison to have said “sorry – we got it wrong – we didn’t realise that it would be so hard for firms to ramp up vaccine production”. But such is Morrison’s learned behaviour as a political salesman that the idea of speaking the plain truth is an alien concept. He and his ministers are supported by an army of partisan sycophants, many on the public payroll, whose job is to protect ministers from the truth – to arm them with “talking points” using tricks of sophistry, casuistry, and misrepresented numbers to save them the task of engaging frankly with the public.
If the only consequence of Morrison’s bullshitting about vaccination supplies were a loss of his public standing, that would be no bad thing – his hollowness was bound to be exposed sooner or later. But the Commonwealth government’s obfuscation and secrecy about vaccination only feeds into public discomfort and scepticism about vaccination.
Now, as we learn that for young to middle-aged people the risk-weighted benefit of the AstraZeneca vaccine is low, clear communication is more important than ever. On the ABC’s Breakfast program on Friday morningNorman Swan was able to give a clear explanation of the situation, and to point out that as the US gets through its program, more vaccines will become available for export, including Pfizer and others on Australia’s long-term order books. He reminds us that, such was our confidence in the Government having secured many sources, we made the unfortunate decision to halt progress on the very promising vaccine developed by the University of Queensland. For the world as a whole the situation is serious, because AstraZeneca has been the main supplier under the COVAX program for poorer countries, where most people are young. (9 minutes.)
Whatever vaccines we use in Australia it is important that we achieve a high vaccination rate – possibly in the 90-95 per cent range – to achieve herd immunity and a safe re-opening of our borders. The less assured we are that vaccines stop people from passing on infection, the more important it becomes to achieve a high vaccination rate: that’s the arithmetic of herd immunity. The more Morrison confuses the situation with his political waffles the less will the public trust the whole process.
As Stephen Duckett has written in The Conversation, the Commonwealth has bungled the vaccine rollout in four ways. It was slow to get going with ordering vaccines; it has not prioritised quarantine workers over those in aged care; it has made a mess of the logistics; and its messaging has been confused.
Of most immediate concern is vaccination of frontline quarantine workers – the most likely sources of introduction of possibly uncontrollable new strains of Covid-19 into an unvaccinated population. On the ABC’s 730 Report on Tuesday night Health Department Secretary Brendan Murphy had the unenviable task of defending the government’s botched rollout. All he could say was “most of the hotel and quarantine staff have already been vaccinated”. Surely vaccinating that relatively small number (70 000 according to the Commonwealth’s disaggregation of the 678 000 people in Phase 1a) should have been the first priority. The possibility that the AstraZeneca vaccine may not be suitable for younger people has been known for some weeks. Surely it would been prudent to reserve limited supplies of Pfizer for those exposed to travellers, rather than allocating them to aged-care homes as the Commonwealth has done.
Earlier on the same 730 program Norman Swan explained how far we have fallen behind other countries in vaccinating our population, even before we became aware of the AstraZeneca restrictions. To achieve the government’s October target we need to be vaccinating 200 000 people a day; to get reasonable coverage before winter sets in we need to be vaccinating 400 000 people a day. Our present daily rate is between 30 000 and 60 000. So far (Friday) only 3.9 per cent of the population has received a first dose. No doubt the Morrison Government will try to attribute our failure to reach the October objective on the AstraZeneca problems, but even if the vaccine had been entirely suitable we would not have reached that target anyway.
The whole incident brings into question why the Morrison Government allowed us to become so dependent on one vaccine. Was the preference for AstraZeneca part of some agreement to favour British-developed products, or a measure designed to give CSL protection against foreign competition? The Government’s secrecy has added to the legitimacy of such questions.
In relation to the New Zealand travel bubble, the risk of virus outbreaks in Australia and New Zealand will lead to caution. Below is a chart of outbreaks that have occurred since November, when Victoria had finally cleared up its major outbreak. Every clear run has been interrupted by a failure of border controls.
The rest of the world
It is clear that there is another wave in progress, hitting many countries that have so far come off lightly – although East Asian countries are still doing far better than Europe and the USA.
In Europe infection rates in this wave seem to have peaked, but there is a clear east-west difference: with the exception of France, western Europe is getting its case rate down. Ireland, Finland, Portugal and the UK all have their daily case rates down to less than 100 new cases per million. (To put this into perspective 100 per million was Melbourne’s peak in August last year: even the best-performing European countries have a way to go.) Whether this reduction in case rate is due to lockdowns or vaccination is not easily determined. Of those four European countries with low case rates only one, the UK, has achieved more than 20 per cent of its population covered with first-shot vaccination: it is now approaching 50 per cent first-shot coverage.
In the US daily infection rates are still high – around 200 per million. It has achieved 32 percent first-shot population coverage and is making strong progress with vaccination. In view of the nation’s strong regional differences and attitudes to vaccines, it’s possible that some regions will achieve high levels of immunity while the virus will continue to rage (and mutate) in certain states and communities.
Apart from some small island nations, Israel seems to be leading the world in vaccination. It has achieved 61 per cent first-shot vaccination, and 53 per cent second-shot coverage. Its peak daily case rate was around 1000 per million: it is now around 40.
Vaccinating the world – politics and property rights, not production capacity, is the problem
Covid-19 presents a global problem: the virus won’t be licked until most of the world’s 7.8 billion people are vaccinated. So we went looking for figures on production numbers – production to date and production capabilities.
We didn’t find much. In spite of the strong public interest, governments allow companies producing vaccines to keep this information confidential.
The journal Nature has published some estimates however – What it will take to vaccinate the world against COVID-19. There should be between 9 and 12 billion doses produced by the end of the year, but weaknesses in supply chains, restrictions on licensing intellectual property, and vaccine nationalism could see up to a year’s delay in getting the vaccines into people in the world’s poorest countries.
The article also has a short description of the processes in manufacturing mRNA vaccines. They are much simpler to make than the conventional vaccines (as are being made by AstraZeneca), but there is a shortage of experienced workers, and the property rights for key components are scattered among many companies.
See our separate web page of generally reliable information and analysis about Covid-19, including hyperlinks to those sources. Vaccination data from Australia and other countries is from the ABC Digital story innovation team Tracking Australia’s Covid vaccine rollout numbers. The Financial Times has an account of yet another virulent variant of Covid-19 that started among agricultural workers in Spain and a survey of discontent among younger people who have disproportionately borne the burdens of restrictions. The Harvard Gazette reports on research about people’s expectations as they return to their physical workplaces: the world of work will be different for many.
The Australian (and world) economy
There’s more to the IMF’s April Outlook than Australia’s upgraded growth forecast
If you have followed Australian media coverage of the IMF’s April World Economic Outlook, you will know that it has upgraded its forecast for Australia’s economic growth this year – from 3.5 per cent in its January Outlook to 4.5 per cent in its April Outlook.
It’s worth considering the Outlook in a little more detail. It forecasts that in so-called “advanced economies” economic recovery from the recession will be reasonably rapid, but for “low-income developing countries” the outlook is for worsening economic conditions in 2021 and 2022.
It warns that within countries income inequality is widening, with young people and women being left behind. Its advice is almost completely at odds with the Morrison economic agenda:
Once the health crisis is over, policy efforts can focus more on building resilient, inclusive, and greener economies, both to bolster the recovery and to raise potential output. The priorities should include investing in green infrastructure to help mitigate climate change, strengthening social assistance and social insurance to arrest rising inequality, introducing initiatives to boost productive capacity and adapt to a more digitalized economy, and resolving debt overhangs.
Reserve Bank – back to stagnation
On Tuesday, as expected, the Reserve Bank didn’t change interest rates. Its reason is summarised in one paragraph of its accompanying statement:
… wage and price pressures are subdued and are expected to remain so for some years. The economy is operating with considerable spare capacity and unemployment is still too high. It will take some time to reduce this spare capacity and for the labour market to be tight enough to generate wage increases that are consistent with achieving the inflation target. In the short term, CPI inflation is expected to rise temporarily because of the reversal of some COVID-19-related price reductions. Looking through this, underlying inflation is expected to remain below 2 per cent over the next few years.
Had the Bank been unconstrained by public service etiquette, it may have expressed the same by noting that in eight years of Coalition governments there has been no meaningful structural modernisation of the Australian economy that could allow wages to rise.
And just because the Reserve Bank is holding rates, doesn’t mean the banks won’t raise them – making extraordinary profits in the process because the Reserve Bank has promised to keep the three-year bond yield at 0.1 per cent.
Remember the postwar years
In Western Europe, North America and in Australia/New Zealand the 1945-1973 period was one of strong economic growth combined with low unemployment and declining inequality. It ended with the emergence of high inflation, to which the failed policy responses were austerity and neoliberalism. Writing in Inside Story – What went right in the twentieth century – John Quiggin asks why economists generally treat the postwar period as something unsustainable or even an aberration, rather than analysing the policies that led to those successful outcomes and replicating them now.
Australian capitalism – conditioned to easy returns
Over the last few years Australian public companies have been paying out almost 80 per cent of their profits as dividends – a high level by world standards and by our own historical standards. In part this may be explained by the uncertainty resulting from the government’s lack of a realistic energy policy and by tax incentives that privilege real-estate speculation over productive investment.
It may also have to do with a history of easy returns – from digging up minerals, from speculating in property, and from capturing economic rent dispensed by corrupt governments. Credit Suisse has released its 2021 Global Investment Returns Yearbook. On Page 14 are shown the annualised returns on equities over the 120 years from 1900 to 2020. Out of the 26 countries for which Credit Suisse has collected data, Australia has had the second-highest return on equity. Our historical returns are second only to South Africa’s and are much higher than returns in Japan and mature European countries. Australian businesspeople and investors have been conditioned to easy profits, and seem to be reluctant to lower their expectations to realistic levels. Rather than expanding their businesses they are handing profits back to shareholders.
(To access the yearbook, go to the Credit Suisse research publications page, then to the heading “Credit Suisse Global Investment Returns Yearbook 2021 Summary Edition”, and download the PDF file from the link provided.)
Australia’s stalled industrial transformation
A state by-election in the upper Hunter valley has brought the coal lobby and the Murdoch media out in force, with a little bit of help from Labor’s Joel Fitzgibbon and the Nationals’ John Barilaro.
Richard Denniss describes the main issues and actors in The Conversation: Is Malcolm Turnbull the only Liberal who understands economics and climate science – or the only one who’ll talk about it? Turnbull is in no doubt that the Murdoch media is behind his sacking as Chair of the New South Wales Net Zero Emissions and Clean Economy Board.
There is already an over-supply of coal in the Hunter Valley. Most of the region’s mines are digging up thermal coal, for which the International Energy Agency sees a dismal future.
The conflict is surely not about the economics of coal, which seem to be clear-cut: rather it seems to be about identity politics. Real men support coal, bed-wetting greenies support renewable energy. But real coal miners are going to have to find other employment, whoever wins the by-election.
Nor is the issue just about coal in the Hunter Valley. The Centre for Public Integrity describes how the Coalition is wooing businesspeople to bankroll gas projects in a process shielded from parliamentary scrutiny.
It is hard to see how any fossil-fuel investment can be worthwhile, even with all the support the industry has wrangled out of governments. But Tariq Fancy, formerly of Black Rock, believes the market is so tilted in favour of fossil fuels that to bring it back to neutrality governments must ensure that polluters pay their way through carbon prices. Wise investors who know that the present privileged treatment of fossil fuels cannot last, would do well to avoid anything to do with fossil fuels.
Biden’s economic plan
On top of a $US 1.9 trillion general fiscal stimulus to re-boot the US economy, badly damaged by Trump and the coronavirus, Biden is pushing Congress to pass a $US 2 trillion infrastructure plan and a matching $US 2 trillion corporate tax plan, reversing corporate tax cuts made by the Trump Administration. Financial Timesjournalist James Politi provides a broad outline of the plan, including the predictable opposition from the Business Roundtable. (The way businesspeople think their companies can thrive without adequately-funded health care, highways, education and other public goods is always stunning.) You can also hear Stephen Kirchner of the US Studies Center give a short outline on the plan on the ABC’s The Money program. (First 12 minutes, and you may care to go to hear about research from RMIT showing how young people have borne a disproportionate cost of protecting the community from mCovid-19.)
The Biden Administration has taken a broad view of “infrastructure” to go beyond stuff that is made of steel and concrete. While a big chunk is dedicated to traditional infrastructure (their roads and passenger railroads are even worse than ours), $400 billion is for elder and disability care and $200 billion is for broadband and job training, writes Politi.
In contrast to stimulus spending by the Morrison Government, Biden’s plan is about ensuring that the government, in providing necessary public goods and services, takes its role as a productive part of the US economy. By contrast the Morrison-Frydenberg spending is about transferring money to corporations and individuals and trusting trickle-down economics to work, in deference to an earlier US President, Ronald Reagan. Thanks to the US finally seeing the need to invest in the public sector, we may soon be able to boast that we have the smallest and most run-down public sector of all prosperous OECD countries.
Biden is not only pushing for the corporate tax rate to be raised from 21 to 28 per cent, but he is also calling for a national minimum tax to cut down on those businesses that pay nothing.
A key plank of the tax plan is a minimum global corporate tax. This is aimed at tax havens such as Ireland, The Netherlands, Switzerland and Luxembourg, and at national policies, particularly in poor countries desperate for investment, bidding away public revenue in a race to the bottom to attract business. On the ABC Breakfast program Jeffrey Sachs explains that successive US administrations, with compliance from the British, have deliberately made it easier for corporations to evade tax through profit-shifting: US and IMF call for a minimum global corporate income tax. The effects on public revenue have been serious, and these concessions have contributed to income and wealth inequality. Biden is serious about using America’s financial power to close down profit-shifting.
As a world-renowned economist living in Washington, Branko Milanovic is well-connected to the world. The expanded use of communication technologies, necessitated by Covid-19 travel restrictions, has allowed him to expand his connections even further. But as he points out in a post in Social Europe, he has become less connected with his local community – A simultaneously expanding and shrinking world. He sees in his personal experience an image of a world to come:
The pandemic will create an almost complete global labour market. As performance of a job becomes divorced from physical presence at the workpost, it will open many jobs to anyone with a Wi-Fi connection around the world.
In countries like the US (and by extension Australia) many jobs now held by the middle-class will become subject to more global competition, and with the need for physical proximity having diminished, cheaper-to-live places will become more attractive, not only within individual countries but worldwide as well. (How long can we in Australia go on attracting skilled immigrants from India if they can enjoy higher real incomes in India?)
It’s a world that may suit the well-connected, even if they have to move. But not all jobs are in this global labour market. Those that are location-specific are likely to be over-supplied and underpaid.
Politics and public administration
A defence of populism
Sam Roggeveen of the Lowy Institute, writing in The Mandarin, analyses a deep malaise in our democracy: Something is broken in the way we are conducting Australian politics. As in similar countries, Australian politics has been hollowed out. “Major parties have ceased to be mass-membership organisations and politics has become professionalised, breaking the connection to voters.” We have a political system that looks democratic but which functions with little public input, operated by small groups of policy elites, some in politicians’ offices, some in semi-independent agencies like the Reserve Bank and the Productivity Commission.
Roggeveen sees the malaise not so much in terms of citizens becoming disconnected from politics – the usual explanation for disasters such as Brexit and the election of Trump – as politicians having become disconnected from citizens. His view that the involvement of unions and industry lobby groups in policy determination may be more democratic than reliance on professional economic advice could be read as a defence of populism.
But we may ask why he assumes there has to be a binary choice between public policy based on advice from a professional public service, and public policy responding to public opinion – an opinion often manipulated by those with vested interests.
The hard jobs are left to the public sector
In the first of a four-part series on the public sector’s response to the pandemic, Geraldine Doogue on Saturday Extra talks to Verona Burgess, a columnist with The Mandarin, and Travers McLeod, CEO of the Centre for Policy Development. (17 minutes.)
She opens by reminding us that “the pandemic has thrust the public sector into the spotlight”.
The public sector has responded, and for once Australian governments have heeded the advice of experts on the public payroll – even though this advice may have been counter to the present government’s belief in “small government”. McLeod points to research by the Centre for Policy Development and others showing that community trust in the public service has risen as it has been called on to respond to the threats of bushfires and the pandemic. Burgess points to research revealing that public servants in agencies closest to the action responded with enthusiasm and dedication. In a world where so many governments have made costly and disastrous decisions in response to the pandemic, Australians have been proud to see their government agencies respond so well, and want to see the public sector maintain and strengthen its capability.
The question left open is whether the response to the bushfires and the pandemic is simply an acknowledgement of the obvious urgency of those situations: will we go back to the dogma of “small government” and the established pattern of stripping the public sector of its capabilities?
To answer that question we get a strong hint in the nature of the Morrison Government’s fiscal response. Worldwide almost all governments, left and right, have had strong fiscal responses. But while the Biden Administration, for example, has responded with a huge boost to infrastructure and government programs, most of the Morrison Government’s fiscal stimulus has been through transfer payments to businesses and individuals – payments that simply pass through private hands on their way to stimulate the private sector. Such a response, although it involves big government outlays, is entirely consistent with the Hayekian “small government” philosophy.
Do the Australian people owe Morrison any gratitude?
Even though the hard work has been done by state governments, and even though he was initially unenthusiastic about keeping the country free of coronavirus, Morrison is hoping that Australia’s extraordinary success in handling the virus, and a speedy economic recovery, will see him returned easily to office whenever an election is called.
Writing in the Sydney Morning Herald Peter Hartcher warns Morrison to beware of the Churchill syndrome, recalling that as soon as the European war was over in 1945 British voters unsentimentally dumped him in favour of Attlee’s Labour Party: they had been through enough hardship and were now ready to go in a new direction.
Hartcher looks at Morrison’s latest reshuffles and symbolic elevation of issues regarding women. They lack substance, and if anything confirm that Morrison’s political tactic is to avoid any change in political direction, hoping that a few duty re-assignments can substitute for real action.
Respect at work – disrespect for process
On Friday the Morrison Government released the report Respect@Work: National Inquiry into Sexual Harassment in Australian Workplaces. This report, prepared by the Australian Human Rights Commission under the direction of Sex Discrimination Commissioner Kate Jenkins, was delivered to the Government in January last year. We wonder how much longer they would have sat on it had not violence against women become so prominent an issue. Media and others were given only a few hours to consider this 932-page report and the Government’s vague statements that they were doing something-or-other on all its 55 recommendations.
Already in that short time we learn that the government will ignore at least one key recommendation about workplace safety. That is Recommendation 17 calling for an amendment of the Sex Discrimination Act to “introduce a positive duty on all employers to take reasonable and proportionate measures to eliminate sex discrimination, sexual harassment and victimisation, as far as possible”.
We hope that Pearls and Irritations readers will provide some analysis and comment over the coming week.
French students: echoes of 1968 but with an illiberal agenda
In May 1968 French students took over the streets in mass protests and street battles and came close to dislodging the de Gaulle Government. There was a raft of issues ranging from opposition to the Vietnam War (even though by then France had ceased to be involved), anti-colonialism, women’s economic rights, the authority of patriarchal institutions, rights of sexual minorities, all merging into a wave of discontent. Soon workers joined the movement and brought the country to a standstill for several weeks.
French students, through their 114-year-old university union Unef, are again rebelling against authority, as reported by Norimitsu Onishi and Constant Méheut writing in the New York Times – An outspoken student union positions itself at the vanguard of a changing France.
As in 1968 it is linked with movements in the USA protesting against racial and gender discrimination, but there the similarity ends, for this is a distinctly illiberal movement that challenges traditions of fraternité and égalité. It is quick to condemn any action that may be considered to be offensive to religious minorities, women, “racial” minorities, and people with non-mainstream sexual preferences. It seems to be in favour of gender and race segregation, and its exclusive gatherings – of women with men excluded, of Islamic women with men and women of other beliefs excluded – have raised the ire of authorities and of those who have fought to preserve the nation’s secular traditions.
Real men don’t like women
The deep state is in the hands of a feminist conspiracy whose purpose in life is to persecute men.
That may come across as an extreme belief, but on the ABC’s Life Matters Hilary Harper interviews Laura Bates about websites directed at young men, grooming them to adopt even more extreme views about women, even to the extent of justifying murder. Such a conspiracy-laden belief is not as uncommon as we may think.
As distasteful as we might find the misogyny engendered in boys’ schools and football teams, there is far worse on websites promoting male supremacy (often “white” male supremacy) targeted at young men. Those who establish and maintain these websites qualify as terrorists in Bates’s view – a view supported when we reflect on the number of women murdered by their partners.
Bates is founder of the Everyday Sexism Project, and author of many books, most recently Men who Hate Women: From Incels to Pickup Artists, the truth about extreme misogyny and how it affects us all.
Human rights and other moral concerns
Pope Francis’s Easter message to the world
Pope Francis’s Easter Sunday message is about the Christian story of resurrection, into which he weaves reminders of people’s sufferings and hopes, whatever their religious beliefs. Its language is soft but its moral messages are strong. How is it that we are killing one another in Yemen while failing to unite around the common threat of a pandemic?
He reaches out to the poor, the people rendered unemployed by the pandemic, the persecuted, and the victims of armed conflict in Myanmar, Lebanon, Syria, Palestine, Ukraine, Nigeria and many other places. He sends a message of support to nurses and health care workers, and to the young – “forced to go long periods without attending school or university, or spending time with their friends. Experiencing real human relationships, not just virtual relationships, is something that everyone needs.”
Human rights in the pandemic
Amnesty International’s 2020-21 Report on the state of the world’s human rights is a hard-hitting moral assessment of the world’s reaction to Covid-19. It summarises the year 2020 as:
366 days that saw the fostering of lethal selfishness, cowardice, mediocrity, and toxic failures from xenophobia and racial hatred. 366 days that illustrated just how unchanged and how contemporary is the violent legacy of centuries of racism, patriarchy, and inequality. But 366 days that also gifted us rich sources of inspiration for our strength and resilience as a human family; days that showed people’s determination to stand up for their rights and for a fair and a just recovery from the pandemic.
While it covers violation of human rights in individual countries in its customary detail, it also comments on general patterns to do with the pandemic:
Some government measures to tackle COVID-19 had a discriminatory impact on marginalized groups. Lockdowns and curfews led to particularly high numbers of workers in the informal economy losing their incomes without recourse to adequate social protection. Since they dominated the sector, women and girls were disproportionately affected. Another measure, the introduction of online-only education without ensuring access to appropriate technology, disadvantaged many learners from marginalized groups. Women primarily bore the burden of homeschooling, as well as other unpaid care resulting from closures of public services, including looking after sick relatives.
It stresses that a fair and sustainable recovery demands resetting the world’s taxation systems. “Adequate taxation is a must to mobilize the resources needed to fulfil economic and social rights including our rights to health, education, and social security”.
An Australian campaigns for his falsely-imprisoned son
John Shipton, Julian Assange’s father, has been campaigning for his son’s release from prison in England. You can hear him on Late Night Live describing his work – Two years after Julian Assange was imprisoned in Belmarsh, why is he still in gaol?
In spite of the indifference shown by the Australian Government, and the contempt for justice shown by the UK Government, Assange still has many supporters in prominent positions, here and in other countries. Shipton is modest about his own contribution, but it’s clear that he has mobilised some powerful voices in his son’s defence. (13 minutes.)
Polls and surveys
The Coalition is losing ground
William Bowe’s Poll Bludger reports on Newspoll’s release of federal voting intention by state – a process that combines the state data from its four most recent polls into “credible” sample sizes. (Even so, he points out, sample sizes for smaller states are small.)
Support for the federal Coalition seems to have held up in New South Wales and Victoria, but to have fallen away in Queensland and in smaller states. Although data is collected by gender, there is no significant gender difference in the results. (This may simply be because the data was collected over four surveys: only the most recent survey would have been influenced by the poor behaviour of Liberal parliamentarians.)
The strongest divisions relate to age: voters aged 18-34 show TPP 64:36 preference for Labor (backed by 22 per cent Green support), while those aged over 65 show a TPP 62:38 preference for the Coalition. A curious finding is that those identifying as “Christian” show TPP 56:44 for the Coalition, in spite of its demonstrated contempt for most aspects of Christian social morality.
Safety in the USA
Australians when visiting the USA know that while the overall atmosphere is little different from Australia, many otherwise normal people they meet may be carrying concealed weapons. Those who, through their jobs, know just how heavily armed and dangerous the country is, have ways of protecting themselves.
See Michael West Media for more analysis of these and other economic and political issues, and watch out tomorrow, Sunday, for Peter Sainsbury’s Sunday environment round up.