Conservative Governments in Europe have welcomed the victory of Jacques Chirac in the French presidential election. Leftist Governments in Europe sent polite congratulations. The reaction on this side of the world has been more uniform. Conservatives, centrist and left political leaders alike have expressed concern at Mr Chirac’s promise that he would resume nuclear testing in the Pacific. It is a justifiable concern.
Mr Chirac’s predecessor, Francois Mitterrand, ended testing in 1992. The Cold War had ended. There was no appreciably nuclear threat to France or anywhere else that required further nuclear-weapons testing. That is true today. The only possible nuclear threat is from nascent nuclear powers or from terrorists with very low-grade weapons. Neither of these threats can be met any more effectively with improved weapons. They cannot be met with present stocks and they cannot be met with more sophisticated stocks. Indeed, the way to security from nuclear weapons lies in all nuclear nations reducing and eliminating their stocks and in preventing their spread to other nations.
The only possible reason for a resumption of testing is as a macho demonstration to show who is boss. Whatever it might do for Mr Chirac’s popularity at home, it will not make France popular in the Pacific.
Fortunately, Mr Chirac’s nationalistic noises on the election campaign trail have been qualified after the event. It now appears that Mr Chirac will seek advice as to whether the testing is necessary. If good sense prevails the idea will be dropped. Nuclear testing is environmentally destructive and militarily unnecessary. The Australian and New Zealand Foreign Ministers have rightly said that any resumption of testing would strain relations with France.
Testing aside, Mr Chirac’s election ends a period of “”cohabitation” government in France under which a Socialist President had to “”cohabit” with a rightist Parliament and Prime Minister. It was not a very satisfactory arrangement. Nor would it be if the situation were reversed, as it may well be in the next few years if the Socialists do well in parliamentary elections.
The essential problem is that while both the Prime Minister through the elected Parliament and the directly elected President have a claim to a popular mandate there is no formal structure for resolution of conflict between the two. The election of Mr Chirac has ended “”cohabitation” for now, but the underlying potential for instability remains.
Month: May 1995
1995_05_may_winlose
The big Budget losers are people on incomes between $46,500 and $66,500. The transfer from tax cuts to superannuation hits them _ to the advantage of low-income earners. People on incomes over $66,500 lose all of the tax cuts promised in the second round of One Nation. And people on incomes between $46,500 and $66,500 lose the promised benefit on a sliding scale. People at the other end are major beneficiaries, as the graphs show. In rough terms $1000 a head goes from the middle- and high-end to the lower end. It sounds fine in theory, but it appears to happen every Budget. Moreover, the Government justified the now-abandoned tax cuts for middle incomes because the lower incomes had had their turn in the first round and in earlier Budget measures. Also, people on very high incomes did well in the early days of Labor when marginal rates came down from 66 per cent to 50 per cent.
The one time middle income earners appeared to get a break has now been taken reversed. Overall the tax and superannuation changes will put more money in government coffers and less in taxpayers’ pockets. The shift happened as follows. One Nation promised a second round of tax cuts. The timing was not set, but was tentatively set for 1998-99. People on $20,700 to $40,000 would have had their marginal rate cut from 34 per cent to 30 per cent. People on $40,000 to $50,000 would have had their marginal rate cut from 47 per cent to 43 per cent. People over $50,000 would have still had a marginal rate of 47 per cent, but would have benefited from the lower rates applying to that portion of their income earned between $20,700 and $50,000.
Continue reading “1995_05_may_winlose”
1995_05_may_rights
The introduction of Terry Connolly’s ACT Bill of Rights Bill last week made me reflect upon Sir Joh Bjelke-Petersen’s performance at the Fitzgerald Royal Commission. The television re-enactment of that performance showed ex-Premier Joh Bjelke-Petersen flustering over the separation of powers. It is a theoretical concept, but an important one. Bjelke-Petersen, being cross-examined was asked, “”What do you understand by the separation of powers?” The blustering conversation went something like this: “”You, you, you . . . . well you tell me what it is and I’ll tell you if you are right.” Counsel: “”No; in this Royal Commission, I ask the questions and you answer them.
Do you understand the concept of separation of powers.” Bjelke-Petersen had to admit he did not. Of course, the cross-examining lawyer, in insisting that Bjelke-Petersen was answerable to the commission, had at once demonstrated that the Executive was answerable to the Legislature which had set up the commission. The importance of the separation of powers is that power is spread, diluted and counter-balancing. In the Westminster and American system of Government it means the elected representatives pass laws of a general nature; that the judiciary apply them is specific cases and that the Executive administers the laws, but is answerable to the laws at the hand of the judiciary. In short, no-one is all-powerful. No one person can pass a law, administer a law and execute that law in specific circumstances. Some people have power but no-one has absolute power. It was instructive that Bjelke-Petersen did not understand the idea that some people _ Members of Parliament _ pass the laws; that Minister administer them, but are themselves subject to them; and that the judiciary determines how the law applies in specific circumstances. He did not understand the idea of the separation of power because he thought that he had all the power and could do what he liked. He controlled Parliament and appointed the judges, so he was all powerful. He could do as he liked. So could his Ministers. They were the law. As Louis XIV said, “L’etat, c’est moi.” The state; I am the state. And so it was that several Queensland Ministers fiddled their expense accounts; ignored planning laws to build what they liked, where they liked for personal advantage; and took bribes and in return did favours to business mates. Further, they prohibited people from demonstrating. They prevented as far as possible people from joining unions.
Continue reading “1995_05_may_rights”
1995_05_may_packer
The definition of “”control” in the Broadcasting Services Act must be the most bizarre piece of legislation in Australia. Incredibly, it runs to 2640 words. The diversity of Australian media ownership hangs on this definition. It determines, for example, how much of the Fairfax newspaper chain television magnate Kerry Packer can devour. Its aim is to ensure that the princes of print cannot be queens of the screen _ that there is no cross-ownership of television and print in one city. Yet, despite its 2640 words, the definition contains the damning admission that the very task of defining “”control” is impossible. It says, “”Because of the complexities involved in this area, it is not possible to provide rules which will give a definite answer in all cases.” So how are we to find out whether someone has “”control” of a television station or newspaper? The Act says, “”The ABA is given a monitoring role over the broadcasting industry and suitable powers of investigation in order to reach a conclusion as to whether a person is in a position to exercise control or not.” And how does the ABA do this? In secret of course. It must not give any commercial secrets away. This week the ABA ruled that Packer’s 17.2 per cent shareholding of Fairfax does not amount to “”control” and that he is entitled to have both that shareholding and have control over Channel 9. No-one can judge whether that decision _ affecting the viewing and reading of millions of Australians _ is sound because the basis for the finding is secret. But never mind, the Minister for Communications, Michael Lee, assures us that the ABA will monitor the situation closely. Great. It took 10 weeks for the ABA to tell us that Packer’s increase of ownership from 14.9 to 17.2 per cent did not amount to taking “”control”.
The sharemarket, however, does not work as slowly. About 12 per cent of Fairfax’s shares would get turned over in that time on average trading _ let alone during a concerted bid. This law is more a mule than an ass. The trouble is that the present legal and constitutional set-up make solutions difficult, even if the political will was there. Australia has now tried several models to control media ownership. All have ostensibly aimed at providing a diverse ownership by Australians who recognise that media ownership is special and requiring a trust relationship with the public. All models so far have failed.
Continue reading “1995_05_may_packer”
1995_05_may_medicare
Brendan Nelson, like any party gate-crasher, has made some uncomfortable comments. He brought with him to the party views he holds as president of the Australian Medical Association, calling for the end to universal bulk-billing. In John Hewson’s time the Liberal Party agreed with that. Now it has put changes to bulk-billing in the same category as the GST _ wash your mouth out. As things stand, universal bulk-billing is here to stay _ a Hewson-made untouchable. Nelson’s erstwhile colleagues dislike bulk-billing because it put competition in their ranks. While ever some doctors were willing to bulk-bill all patients, they would attract the custom. They would also save a lot of administration costs. The Nelson episode is one of several in recent times that show Australia’s health system as a jumble of fiercely competing interests and shifting alliances of convenience.
The main players are: the doctors (roughly dividing into four groups: specialists, AMA-type GPs, Doctors Reform-type GPs, and young salaried doctors); state Governments; the federal Government and the health insurance funds. State Governments want to present electors with well-run hospitals. From their perspective any unduly long waiting lists are due to: lack of federal funding; monopolistic practices by specialists whose colleges refuse to let more practitioners in; declining private insurance due to federal government policies. State Governments play various tricks against the Federal Government to extract more money (and deny all of them). They fail to give information on waiting lists. They give preference to private patients in public hospitals (or allow doctors to) because private patients pay more. They try to pressure people into going to GPs rather than public hospitals for all but catastrophic emergencies. This way the Federal Government through Medicare pays. The Federal Government wants to present electors with low-cost universal health insurance. In its view waiting lists are due to state-government incompetence in running hospitals and high medical costs are due to doctors’ greed. Only bulk billing is saving us from unbridled excess. It plays various tricks in presenting a picture of efficiency.
Continue reading “1995_05_may_medicare”
1995_05_may_leader31may
The appointment of a consultant to help the Act Government meet its election commitment of shedding $32 million from the health budget and at the same time reduce waiting lists has met with a hostile reception from unions and the Opposition. The unions assert they were not consulted and question what an American company knows about Australian health care. The Opposition asserts the consultantcy is a waste and that the Government should get on with implementing the results of earlier inquiries. The Government says that the consultant, Booz-Allen and Hamilton, has been engaged by 16 major hospitals in Australia and New Zealand and has a record of reducing costs and improving care. Of course, it does not matter if the consultants are American; though in fact they are an Australian subsidiary. It is a non-issue. The important point is that the ACT gets the most for its health dollar. The public has every right to be sceptical of a new inquiry.
The history of health administration in the ACT has been one of constant cost overruns; higher costs than the Australian average; longer waiting lists and poorer service that most other states; endless promises of reform and inquiries with no result; and despite this, constant reminders of tireless, caring working by nurses and doctors as individuals who are treated express their grateful praise when they finally get through the waiting lists and in to hospital. At first blush, it would seem pointless to add yet another inquiry to the others before it. However, the Government says this consultantcy is not to identify areas of cost overruns and inefficiency because these have already been identified. The new nine-week consultantcy is to find ways of changing things so those overruns and inefficiencies can be eliminated _ across the whole system, not just administration.
Continue reading “1995_05_may_leader31may”
1995_05_may_leader30may
The Queensland Premier, Wayne Goss, has shot himself in the foot. In his Budget last week he announced that Queensland would half its stamp duty on share transactions from 0.6 per cent to 0.3 per cent. He hoped he would attract more share transactions to Queensland which would result in stock-brokers opening offices in his state. When the other states screamed, he said piously that he did not want to hurt them. He did not want to take away transactions from those states. Rather, he said, he wanted to attract some of the many transactions with Australian shares that took place overseas. Well, that was either underhand or naive. He must have known that by lowering the Queensland rate he would attract interstate business to the detriment of other states’ revenue. Indeed, that was more likely than attracting overseas business. This is because transactions overseas already attract a low level of stamp duty so the incentive is lower to move.
The result of Mr Goss’s move was predictable. It perhaps happened faster than one would imagine. The other states have followed suit. It now means that, in total, instead of collecting about $600 million a year on share transactions; they will collect only half that. The states will lose about $300 million. In short, money that would have gone to hospitals, roads, schools will go instead to people who trade in shares. Well done, Mr Goss. It is true that the leakage of revenue caused by people moving transactions overseas was a problem. Twenty-per cent is a high figure _ about $150 million. However, Mr Goss’s maverick approach to that problem was bound to fail. Besides which, it was selfish. Why should Queensland attempt to attract to itself all the overseas leakage? The way Queensland went about it does not sit well with modern governmental practice.
Continue reading “1995_05_may_leader30may”
1995_05_may_leader27may
The Consumers’ Telecommunications Network published a collection of research last week raising questions about the benefits of competition in the industry in the past five years. It pointed out that the benefits of competition have not been distributed equitably. In particular, it said that business had benefited disproportionately to residential subscribers to the phone service. The research acknowledged, however, that residential users had benefited from improved services and technological innovation.
There is little doubt that a simple comparison of charging will reveal that business has taken the lion’s share of the cost benefits from competition. Business has got large discounts for high volume, especially on major trunks. Discounts of those sizes have not been available to residential users _ though some have been available. However, there is a flaw in the argument that the spoils of competition should be evenly distributed. It is precisely because telecommunications suppliers have been freed of the fetters of price controls and service regulation that there is any competition dividend in the first place.
Continue reading “1995_05_may_leader27may”
1995_05_may_leader26ama
The Northern Territory’s new law on active euthanasia has caused a flurry of reaction across Australia. A lot of the philosophical debate on both sides has been widely canvassed. It has been particularly canvassed in the ACT over the past year or so in the lead up to the ACT Legislative Assembly debating the issue and passing a half-way law. The compromise was reached after Independent MLA Michael Moore introduced a Bill along similar lines to the Northern Territory.
The ACT law allows a more active role on the part of doctors than the law in other states, but it is less active than the new Northern Territory law. The difference is critical. After satisfying a range of safeguards, the Northern Territory law permits a doctor to administer a drug to kill a patient, knowing that the drug will kill the patient and with the sole intention of killing the patient. Other states permit doctors to assent to a request from a patient to withdraw treatment. The ACT’s position is mid-way. ACT law permits a doctor, at the patient’s request, to administer higher and higher doses of drugs (presumably morphine) to alleviate pain irrespective of whether the drug might kill the patient or otherwise hasten death.
Continue reading “1995_05_may_leader26ama”
1995_05_may_leader25may
Independent MLA Michael Moore has decided he will not force Deputy Chief Minister Tony De Domenico to stand down pending an inquiry into allegations of sexual harassment made by a former member of his staff. The Greens and the Labor Party decided he should. The Liberals and Independent MLA Paul Osborne decided he should not. It is perhaps unfortunate that none felt constrained to hear the debate in the House before making up their mind, but the way of modern politics seems to preclude that. Small wonder debates in the House are treated as almost irrelevant. Several arguments have been put on the side of standing down: a Minister should be seen to be above reproach; that whenever an allegation is made against a Minister, he or she should stand down; many other Ministers have been made to stand whenever a shadow has been cast over them; sexual harassment must be taken seriously. Several arguments have been put the other way: the presumption of innocence; the unsubstantiated nature (to date) of the allegation; the Assembly is not a judge and jury; the dangerous precedent of forcing a Minister to stand down on the strength of the allegation of one person; the possibility of mala fides by a lone accuser.
How are these factors to be weighed up? First, it is the prerogative of the Chief Minister to force a Minister to stand aside for whatever reason the Chief Minister sees fit. The Chief Minister or Premier is entitled to make a political judgment about the suitability and circumstances of the tenure of any minister at any time. Thus, the then NSW Premier John Fahey stood aside Terry Griffiths after he was accused of sexual harassment by a dozen or so staffers and former staffers. However, when the Parliament demands a Minister stand aside or resign, there must be something more principled than a political judgment _ particularly when independents hold the balance of power.
Continue reading “1995_05_may_leader25may”