What people in other forums are saying about public policy
Australia post Covid-19 – energy policy back on the agenda
An energy technology roadmap – bush tracks but no main roads, and what is the destination?
The Commonwealth has published its Technology investment roadmap discussion paper. It’s not clear what the government means by “roadmap”. A road map is a display of routes and destinations: it’s up to the user to choose. As with a road map the document is about options in that it mentions a suite of technologies, notably not including new coal-fired power stations. But in another sense it is more like a plan than a map, because it shows a clear preference for gas, asserting that “combining gas generation with renewables allows affordable, low emissions generation from solar and wind to be combined with the firming capability of gas generation”.
While it covers all energy-intensive sectors including transport and agriculture, its emphasis, understandably, is on electricity and on the electricity industry’s capacity to respond to demand. In this regard it pays little attention to the possibility of transformations on the demand side – some technological, some market-based – that would reduce the need for “dispatchable” power. Its focus is on the supply side.
Disappointingly, while it has general references to electricity transmission, it does not cover the possibility of developing a transmission system that would allow the best use of solar, wind and geothermal resources. To extend the “roadmap” metaphor, it’s like a road map without the long-distance freeways. Australia has several renewable hotspots in different climatic and weather zones and in different time zones, which, if connected up, could provide much more reliable renewable electricity. This omission may reflect the government’s aim, stated up front in the paper, that it does not want to crowd out private sector investment – a constraint based on gut-feeling ideology rather than on sound economics. As with the NBN, a set of long-distance DC powerlines to connect renewable resources would require upfront public investment.
A plan to shut renewables out of the energy market
The ABC has gotten hold of a document by the National COVID-19 Coordination Committee revealing proposals for massive subsidies for the gas industry – Government’s COVID Commission manufacturing plan calls for huge public gas subsidies. Those subsidies would allow gas to be sold at a low price so as to make it more difficult for other energy sources – i.e. renewables – to compete. Unsurprisingly it does not mention that these subsidies would be on top of the subsidies fossil fuels already enjoy by not having to pay for their damage to the planet’s life-support systems. And rather than use the word “subsidy”, in a stroke of Orwellian Newspeak it refers to “underwriting new supply with government balance sheets”.
This document is well beyond some early proposal. Although it is marked “draft” it is carefully presented in a ready-to-publish form. The group has consulted with executives from the energy and gas industry and from energy-consuming industries, but has had hardly any input from the renewables sector.
Has the Liberal Party embraced some Soviet-style model of central planning, or is this simply its latest foray into crony capitalism? Either way the process, like the government that has commissioned it, is corrupt.
A hot mess – how and why we’re not dealing with climate change
The ABC’s Sunday Extra has been running a series of programs about the politics of climate change in Australia. Why have we made so little progress over the past ten years?
April 25: Introducing Hot Mess – why haven’t we fixed climate change?. (5 minutes)
May 3: Hot Mess – human frailties – about the psychology of understanding climate change: cognitive biases make it hard for us to come to grips with the issue. (37 minutes)
May 10: Hot Mess – spin cycle – how think-tanks and the Murdoch media successfully undermined the science of climate change and turned it into a “left”/“right” issue. (40 minutes)
May 17: Hot Mess – party lines – how the Abbott Government weaponised climate change, how the fossil fuel industry implanted itself into the Morrison Government’s inner circle, and how naïve and patronising greenies helped deliver the 2019 election to Morrison and the coal industry. (39 minutes)
The final session tomorrow will be about emerging opportunities to take (belated) action because governments and businesses will be seeking a way to stimulate the economy through a massive investment in technology that’s ready to go.
Solar energy going to waste
A fifth of Australian homes have rooftop PV solar – around 10 gigawatts in all. Our total wind and solar capacity is about 17 GW. But even when the sun is shining and the wind is blowing we’re not always able to use it all. In part the problem is a lack of storage capacity: that takes time to rectify. But the other problem is that as the amount of renewable capacity grows (expected to be around 27 GW by 2025), it becomes increasingly difficult for it to be incorporated into the grid because much of it, particularly rooftop solar, is “unseen” by the supply authorities. Our grid, and the quasi-market regulations under which it operates, were designed for a small number of big power stations rather than millions of small systems.
This problem is described in the Australian Energy Market Operator’s Renewable Integration Study. It doesn’t make for easy bed-time reading, but on last Saturday’s Saturday Extra, AEMO CEO Audrey Zibelman describes the problem in reasonably clear terms, and describes how a first step towards its solution is to ensure that the operator can “see” these small systems, so that a sudden weather change is less likely to take the operator by surprise.
Australia post Covid-19 – back to partisan politics
Glimmers of a debate on economic ideas?
The Commonwealth has bought time before it has to start setting out an economic policy, but it has to come out with something before the budget on 6 October. With the simple mantra of “Labor’s debt bad” off the table, the Commonwealth may have to start talking about real economic issues.
The ABC’s Ian Verrender writes that economic recovery will involve pitting economic theories against each other. Will our conservative government try to go back to its old priorities of small government and tough treatment of the unemployed? Even Tony Abbott, he suggests, is going through an economic conversion.
Will Morrison revert to “Scotty from marketing”?
The prime minister who lied his way to an election victory a year ago and who bungled his response to the bushfire disaster isn’t the prime minister who, guided by sound political and professional advice, dealt so well with the pandemic. Will Morrison revert to his old style? asks The Guardian’s Katharine Murphy. “He could choose to do some good. A pragmatist, and that’s what Morrison is, could dial down the partisanship that has poisoned our politics for more than a decade, choking hope and destroying trust”. Or will he give in to the gravitational pull of the far right in the Murdoch media and the petulant demands of his Coalition colleagues?
The pandemic’s progress
Are we there yet?
We’re doing well. We’re still running at about 12 new cases a day. Over the last week all 89 of the 90 new cases have been in the eastern mainland states – 62 of them in Victoria, possibly reflecting its ramped-up rate of testing. But there are still cases where the source is unknown (“community transmission”) – 18 of last week’s 90 new cases. We may or may not be at the stage where we can set a time to safely open up further, it’s too soon to tell.
But there are increasingly strident voices, particularly that of the NSW premier, calling for interstate travel restrictions to be lifted. Perhaps they don’t realise that ever since the Justinian Plague of 541 pandemics have been spread by people who stray too far from home – it doesn’t take many. Or perhaps those parties pressuring for the borders to be opened, such as the airlines and those who purport to speak for the tourist industry, don’t really care if we head down a disastrous US or UK path just so long as they can make a few bob before the economy has to shut down again.
We have changed the presentation to show new infection rates in the European Union, the UK, USA, and the usual three countries in our region – South Korea, New Zealand and Australia. The EU is somewhat heterogeneous: Spain and Italy peaked early at high levels, Sweden still has high rates, and some of the eastern European countries have not experienced high rates of infection. But in all 27 countries rates are falling and in all countries other than Sweden, rates are now below 30 new cases a day per million population. They are now down to where New Zealand and Australia were a month ago, and where South Korea was in early March.
Will the EU head towards suppression or elimination, or are such policies impossible in a set of adjoining countries with a population of 450 million? Are they lifting restrictions too early, possibly unleashing a second and more destructive wave of infections?
A reader has warned about the steepness of the curves on the way up. Official data almost certainly understates the early incidence of cases, particularly in the USA: see Did you already have coronavirus in January or February? in LiveScience or You’ll Probably Never Know If You Had the Coronavirus in January in The Atlantic.
Regarding South Korea, Australia and New Zealand, there’s no longer much to be revealed in a plot of their rates. They’re all bouncing around at levels below one new case per million people per day, reflecting the incidence of clusters.
These are the same sources as we have been presenting.
The WHO daily situation report;
Our Department of Health Coronavirus (COVID-19) current situation and case numbers;
Our Department of Health Coronavirus (COVID-19) health alert;
A group of volunteers’ daily-updated site Coronavirus (COVID-19) in Australia;
The ABC’s daily-updated site Charting the COVID-19 spread in Australia;
Norman Swan’s Coronacast;
The Economist paywall-free Coronavirus hub;
The coronavirus update from the Harvard Gazette;
The ABC’s The one Covid-19 number to watch, tracking the reproduction factor (R)
To these we add a link to a paywall-free set of articles by the Scientific American The Coronavirus Outbreak covering scientific aspects of the virus.
Also, the ABC’s Digital Story Innovation Team has produced a highly-informative set of graphs Charting recovery after the coronavirus crisis. You can see the effects of hoarding in supermarkets, how people have changed their travelling, the effects on air travel – and a set of other data, much of it at state level.
Put a proposal to 47 economists and what do you get?
The conventional answer is “47 views”, but in this case Peter Martin and his colleagues found 34 of them in agreement with the statement: “the benefits to Australian society of maintaining social distancing measures sufficient to keep R less than 1 for COVID-19 are likely to exceed the costs”, as reported in The Conversation. (R is the reproduction rate of the virus and any R>1 sees compound growth, while, conversely, when R<1 there is compound diminution.) Of the nine who disagreed some thought the question was too ambiguous, and at least one, Gigi Foster – Peter Martin’s colleague on the ABC’s The Economists program – still seems to be attracted to the “herd immunity” idea, disregarding the accumulated evidence demonstrating its futility.
The WHO Covid-19 response
No – it’s quite different from the Australian Government’s statement
To read most Australian media one might believe that Australia has led the world into a WHO commitment to examine the origins of the Coronavirus-19 epidemic.
In fact the resolution of the World Health Assembly, modestly-titled Covid-19 Response, is primarily a call for a unified public health response to the virus, with an emphasis on access to vaccines, diagnostics and therapeutics. It makes one mention (OP9.6) of the need “to identify the zoonotic source of the virus and the route of introduction to the human population”. Another clause (OP9.10) calls for a general review of countries’ responses. There is no mention of China – except as a co-sponsor.
This is a long way from our government’s gauche foray into the row between the US and China – which seems to be more about an attempt by the Morrison Government to ingratiate itself with the Trump administration rather than any genuine concern to learn from serious mistakes made not only at the source, but in different countries’ responses.
Where the WHO Covid-19 response falls short
Oxfam has expressed disappointment at the resolution, because it “leaves too many barriers standing in the way of a vaccine for all”. It said:
A People’s Vaccine must be patent-free, mass produced, distributed fairly, and made available, free of charge, to every individual, rich and poor alike. World leaders must commit to putting public health before the profits of the pharmaceutical industry.”
Reflecting Oxfam’s global response, Lyn Morgain of Oxfam Australia said that there is nothing in the agreement compelling the pharmaceutical industry to pool patents. She reminds us that our prime minister has called for “a safe vaccine that is available and affordable to all”, and calls for our government to work with other nations to develop a “People’s Vaccine”.
How other countries are coping (or not coping) with the epidemic
Italy – a cautious renaissance
On last Saturday’s Saturday Extra Geraldine Doogue talked to Tim Parkes about Italy’s experiences – Italy emerges from lockdown. Parkes is critical of the over-dramatization of the Italian experience. The virus was regionally concentrated in the Lombardy region, while the south was, and still is, comparatively unaffected. He contrasts the government’s approach to Covid-19, which so far has killed 32 000 people, with its lackadaisical approach to smoking which kills 80 000 Italians a year, and he notes that during the lockdown tobacconists have been classified as essential industries. (But does neglect of one aspect of public health justify indifference to another?) (17minutes)
From a European offshore island – a chronicle of confusion
Compared with other western European countries, the UK has done badly. An editorial article in the British Medical Journal is highly critical not only of the government’s delayed response – “too little, too late, too flawed” – but also of the government’s Scientific Advisory Group for Emergencies (SAGE), which became too embedded with the political processes and was too concerned not to raise fear in the British community. The authors are dismayed that a country with a strong reputation for the quality for its public health has gotten it so wrong.
A group of preeminent experts, chaired by Britain’s former Chief Scientific Adviser, has established the Independent SAGE. Their Independent SAGE Report recommends that “the government should take all necessary measures to control the virus through suppression and not simply managing its spread”. Covid-19 transmission must be controlled before shutdown measures are relaxed. The report goes on to urge the government to undertake a set of practical public health measures, including governance arrangements, to contain and control the virus.
On Saturday Extra Geraldine Doogue interviewed Alan Rusbridger of the Reuters Institute for the Study of Journalism on how the UK media has covered the epidemic. In view of the secrecy around SAGE’s operations, and the UK government’s suppression of data, the media has a particular duty to keep the public informed in a situation where “there are a million versions of what to think and what to believe” (the viral infection of postmodernism). In its public service role journalism must not only expose government incompetencies but also perform the more mundane but important function of keeping the public informed. (19 minutes)
Across the Atlantic – two dangerous populists
Patrick Cockburn, writing in Counterpunch, compares the governments of the USA and the UK, and concludes that Trump’s megalomania and Boris Johnson’s incompetence have only increased in the Covid pandemic. “Both had risen to power by skilfully exploiting nativist fears and ambitions and scapegoating foreigners at home and abroad”, he observes, but there are differences. Johnson is simply a “shambolic opportunist”, whereas Trump has revealed himself not just as a crackpot, but as one possessed by a “dangerous mania”.
In their separate ways their behaviour has had serious consequences for their people. Both countries have terribly high infection and mortality rates, shown in the table below.
To put America’s deaths into perspective, it’s twice the country’s 47 000 combat deaths in the Vietnam War.
Germany puts meat industry employees on the payroll
Around the world meat processing plants are over-represented in coronavirus outbreaks. The situation in Germany is no exception: see a two-minute video. In Germany slaughtering and butchering must now be done by employees, not subcontractors.
America’s woes and threats
A guide to repairing an old democracy
America’s model of democracy was once a model for the world. Our own Constitution has borrowed large parts of it, for example.
But as we look across the Pacific we see what the Economist Intelligence Unit’s Democracy Index classifies as a flawed democracy. In Trump’s America power has become increasingly concentrated in the Executive, supported by a stacked Supreme Court and left unchecked by a weakened Congress, with both the executive and parliamentary arms of government elected in flawed processes. And that’s not to mention dysfunctions at the state level.
Writing in the New Republic – Rebuilding the Constitution – Associate editor Matt Ford describes how this situation has come about, for example through successive Congressional assignments of power to the Executive. He explains how “one of the Trump era’s most important lessons is that American presidents are only bound by the rule of law as much as they want to be”.
He puts the case for a complete constitutional re-build. While his identification of flaws and proposals for improvement are in the US context, they raise points relevant to all who are concerned with the survival of representative democracy – concerned “that government of the people, by the people, for the people, shall not perish from the earth”.
Covid-19 has energised the extreme right
In one of its articles freed from its paywall, The Economist points out that America’s far right is energised by covid-19 lockdowns. Three related ideas have given impetus to the far-right. One is antipathy to the Chinese people, reinforcing the idea of “white” supremacy. Another is an opportunity to exploit a period of social unrest – always a good period to recruit malcontents. And the third is “accelerationism” which the author describes as “a strange marriage of Marxism and neo-Nazism”. It has echoes of the Marxist ideas of capitalism’s inevitable collapse, and the Nazi idea of a utopia “built on blood and soil”.
The world economy
The Economist invited the historian Margaret MacMillan to write on the world after Covid-19. Contrary to those politicians who talk about the economy roaring back to business as usual, she points out that the pandemic has exposed countries’ strengths and weaknesses, and that it has brought to the surface issues that the political establishment would prefer to see submerged.
The present crisis could be the opportunity for strategies to produce essential public goods and ensure that citizens have safe, decent and fulfilled lives. People coming out of a calamity are open to sweeping changes. Governments will find it hard to resist demands for improved social programmes now that they are spending as though John Maynard Keynes were in the room.
Global investment returns: “Curious times indeed”
Every year Credit Suisse issues its Global Investment Returns Yearbook. To find it you will have to navigate through their user-unfriendly website, but you will find their summary report – along with other economic publications, on their studies and publications page. Some people with inflated expectations would say its authors are gloomy; others, with a longer pespective of economic history, would say they are realistic. Note that it was prepared before the epidemic, and the authors were already warning that low interest rates do not necessarily stimulate high investment returns: “when real rates are low, future returns on equities and bonds tend to be lower rather than higher”.
It includes an analysis of the comparative performance of “ESG” investments: that is investments made with a view to environmental, social and governance issues. ESG investment, generally involving exclusion of irresponsible activities such as coal mining, may have negative short-term consequences, but that is only in the short term.
In its report on annualised equity returns over the last 120 years, of the 21 countries studied Australia has the highest real returns (P24). This is the “lucky country” phenomenon: a history of high returns makes it hard for investors to adjust to more modest but realistic expectations. That may be why firms have been handing profits back to shareholders rather than re-investing, and why the Morrison Government’s permissive fiscal and monetary settings may do little to stimulate private sector investment.
What they haven’t told us: wind farms spread coronavirus
In view of the idiocy in circulation we may as well throw that one into the ring. But it’s not just a few right-wing idiots who go for Covid-19 conspiracy theories (although they are generally the source of them). The latest Essential Poll reveals that:
- 77 per cent believe “The outbreak in China is actually much worse than the official Chinese statistics show”;
- 39 per cent believe “The Covid-19 virus was engineered and released from a Chinese laboratory in Wuhan”;
- 20 per cent believe “The number of Covid-19 deaths have been exaggerated by the media and governments to scare the population” (Most researchers believe deaths are significantly understated);
- 13 per cent believe “Bill Gates played a role in the creation and spread of Covid-19”;
- 13 per cent believe “The Covid-19 virus is not dangerous and is being used to force people to get vaccines;
- 12 per cent believe “The 5G wireless network is being used to spread the Covid-19 virus”.
Men and younger people seem to be more likely to embrace conspiracy theories than women and older people.
(Such gullibility revealed in the Australian community may go some way to explaining the Coalition’s success in last year’s election.)
The world is controlled by a deep state that never lets itself be revealed
The statement incapable of falsification is one of the oldest tricks in the game. Think “Obamagate”.
Writing in The Conversation, Marc-Andre Argentino draws attention to a group known as QAnon, and warns that QAnon conspiracy theories about the coronavirus pandemic are a public health threat, because if enough people believe that the risk is all overstated then public health measures such as distancing are rendered ineffective. He writes
QAnon conspiracy theorists believe a deep state cabal of global elites is responsible for all the evil in the world. They also believe those same elites are seeking to bring down Trump, whom they see as the world’s only hope to defeat the deep state. QAnon has now brought the same conspiracy mentality to the coronavirus crisis.
QAnon, he points out, has a significant following among evangelicals – only those who are not among God’s chosen will be afflicted with the disease.
Does QAnon hold any power over our government? In The Guardian last year Christopher Knaus and Josh Taylor wrote about friendships between an unidentified but prominent QAnon member and Coalition politicians and David Hardaker identified the individual in an article in the New Daily. But there is a risk that those trying to uncover the workings of conspiracy theorists become subject to the same cognitive traps as those they are trying to expose. After all, who does not have a few friends with idiotic ideas?
There is a vaccine, but they’re keeping it for themselves
Quassim Cassam, author of Conspiracy Theories, was on Saturday Extra discussing Covid conspiracies with Geraldine Doogue. The most way-out theories are about individuals or governments who have deliberately released Coronavirus into the community to achieve some political end, while almost similarly wacky theories refer to cover-ups about known causes (5G) or cures (Hydroxychloroquine) known only to insiders. Cassam points out that conspiracy theories pretty well always accompany pandemics. They are also a by-product of populist politics – an ideological expression of resentment against experts and elites. (13 minutes)
And yes, there is a group who believe the pandemic is a “vast deception, with the purpose of profiting from selling vaccinations”. A group of British and Australian cognitive scientists, writing in The Conversation, outline the seven traits of conspiratorial thinking that support this and similar beliefs.
Most Covid-19 victims live in areas with fluoridated water
See how easy it is to use a simple fact to get people thinking conspiracy!
Writing in ProPublica Stephan Lewandowsky analyses and explains conspiracy theories: “Immune to Evidence”: How Dangerous Coronavirus Conspiracies Spread. He explains how conspiratorial thinking develops and is reinforced in a process that bypasses the rules of critical thinking. The internet is helping conspiracy theorists to link up, and times of plague tend to spawn conspiracy theories, but it’s difficult to say we now have more than in the past. We need to inoculate the public against conspiracy theories by warning that they are coming.
Revealed: COVIDSafe records your conversations and feeds its data to Crosby Textor to help Morrison win the next election
While those on the left ridicule those who live in a right-wing conspiracy bubble, they are not themselves immune from conspiracy thinking. There is rubbish circulating about the COVIDSafe app – often by people on the “left” whose asserted values are communitarian but who baulk at using an instrument that contributes to an undisputed collective good. Even for those who don’t hold communitarian values, trauma expert Bill Griggs gives some purely self-interest reasons people should download and use the app.
Those who refuse to use the app, whatever their political persuasion, are playing into the hands of Bolsonaro, Putin, Trump and their followers in Australia.
Polls and surveys
Newspoll – not much to see here apart from sampling noise
The latest Newspoll puts the Coalition ahead with a 51:49 2PP lead.
The general view among commentators is that the Coalition enjoyed a honeymoon period, followed by a reaction to its terrible response to the bushfires, and then followed by its redemption with its response to the pandemic. The reality, however is that the 2PP vote has bounced around mainly in the 49 to 51 range – within the margin of error. The commentariat seems to be confusing Morrison’s approval with the Coalition’s vote.
The broader picture from Newspoll is that Labor’s solid lead following the 2016 election fell away in the two months before the election, and since then the parties have been on about a 50:50 2PP vote. The primary vote for both parties, particularly Labor, seems to have improved since the election, but because opinion polls don’t do a good job at picking up support for minor parties they tend to show firming support for major parties.
The Essential Poll is mainly about the coronavirus
The latest Essential Poll reveals that:
- concern about the virus is down a little (but at 80 percent that may be enough to encourage social distancing);
- people’s rating of the government’s response to the pandemic continues to strengthen;
- among state governments, approval for the WA and SA governments continues to rise comparative to support for eastern state governments;
- there is a little more support for easing restrictions, but only 9 per cent say “as soon as possible”;
- people have developed “more positive views” about health workers, care staff, people with mental health issues, the unemployed and the homeless (not promising for the Coalition’s “lifters and leaners” mantra);
Essential asked people about their employment and job prospects, stratified by their present conditions. Those who were unemployed before the outbreak believe they will stay unemployed; those who lost their jobs as a result of the outbreak believe it will be hard to get back to employment, and those who are still in employment seem to be fairly relaxed.
It also asked people about belief in conspiracy theories – see “Conspiracy theories” above.
We trust electricity companies even less than real-estate agents
Renew Economy reports on a Roy Morgan survey, which found that in terms of consumer trust the utilities sector ranks number 22 out of 25 industry sectors – ahead of telecommunications, media and mining, but behind real-estate, banks and gambling businesses. Consumers’ trust, or mistrust, is influenced by personal experiences in resolving problems with companies, and by perceptions of dishonest practices – particularly important issues in this period as many households, facing financial stress, try to negotiate relief from utility charges.
Roy Morgan’s website goes into a little more detail in a PDF you can download from the same page, but as is typical for Roy Morgan, although it calls on people’s time to respond to surveys, it does not reciprocate by making its report freely available. (We note that polling companies are not included in its list of industries it assesses for consumer trust.)
(Over the coming colder months, as people stay at home as a precaution against the epidemic, we can expect household electricity and gas consumption to increase. At the same time, however, reduced overall demand as a result of shutdowns will allow for lower wholesale prices as there will be less reliance on high-cost coal-fired generators. See the AER data on current spot prices. Will the utilities pass these savings through to households?)
Tough on the young
Surveys assessing how people are coping with the Covid-19 restrictions usually do not stratify responses by age, or if they do they use broad categories, but UNICEF Australia has a survey targeted specifically at 13 to 17 year-olds, and it’s clear that they’re finding it particularly tough. “Living in Limbo” How COVID-19 is impacting young people in Australia. And they expect it to get worse. Separation from friends and disruption to education are their greatest concerns. The survey includes a set of questions, the responses to which reveal that young people are neither being talked to or listened to, and are subject to inaccurate stereotyping. They may be coping technically but young people find that when education and socialisation are added to their normal computer use they long for real socialisation and physical activity.
Has the FBI exposed Saudi Government involvement in the 9/11 attacks?
A Pearls and Irritations reader has drawn our attention to an article in Future Directions 9/11 Re-surfaces – With More Questions Than Answers by its analyst Lindsay Hughes. The FBI, under directions from successive US governments, has kept from the public much of what it knew about the 9/11 attacks, but in a document relating to a civil lawsuit against the Saudi Government, the FBI has released the name of a Saudi official who seems to have had connections with the terrorists. It’s a story out of a le Carré novel, complete with claims of prior knowledge of the attacks, a political deal that saw Saudi Arabia supporting the Taliban in Afghanistan, and two unexplained deaths of Saudi princes – one dying in a car accident, the other mysteriously dying of thirst in the desert.
Private health insurance – why would anyone want it?
On Tuesday the Australian Prudential Regulation Authority released its Quarterly private health insurance statistics for the period January to March. The headline figure is that, as a proportion of the population, coverage has continued to fall from its peak of 47.4 per cent in June 2015 to 43.8 percent in March 2020. Of more concern to the funds is the age composition of this fall, because PHI works on the basis of younger people subsidising older people: in round numbers people aged below 60 contribute more than they draw in claims, while older people draw more than they contribute: even with all the subsidies and inducements PHI is a lousy deal for young people. Over the last three years the PHI funds have lost 320 000 younger people while gaining 190 000 older people. This is shown in the graph below: note the fall at age 25 when young people are no longer covered by their parents’ policies.
On the ABC’s PM the same day Stephen Duckett of the Grattan Institute and Rachel David, CEO of Private Healthcare Australia, discussed the implications of this trend. Duckett correctly described it as a “death spiral”. David acknowledged the problem for the funds, and without explaining her logic asserted that without PHI our hospital system would have had difficulty in coping with the expected demand on hospitals resulting from a possible surge in Covid-19 cases. The facts do not support her assertion: during this period state governments have been able to fund private hospitals to treat private patients, demonstrating that the private hospitals can successfully be integrated into the publicly-funded health care system without being dependent on PHI – a bloated financial intermediary that contributes little, if anything, to health care.
America is re-building its soft power
Ignore naysayers who talk about the twilight of the American century. Its president is leading the country in a transition to greatness.
Saturday’s Good Reading and Listening is compiled by Ian McAuley
Watch out tomorrow, Sunday, for Peter Sainsbury’s Sunday environment round up.