Crispin Hull

The announcements by some major banks that they have agreed with key parts of the Reserve Bank’s credit-card agenda will be good news for some consumers, but for others it will mean an end to subsidised loyalty programs.

There are several pernicious elements to the present scheme. At present, retailers are not permitted to charge extra to those people who pay with credit cards, despite the fact that retailers are charged usually between 1 and 2 per cent. When money is paid by the card-issuing bank to the bank of the retailer, the banks charge each other interchange fees of about 1 per cent – which amounts to about $1 billion a year. The interchange fee covers the costs of loyalty schemes under which card holders get points towards free flights and other goods. These fees are not disclosed at the time of transactions and are not well known in the community.
Continue reading “2002_06_june_leader20jun credit cards”

This week the Senate will consider several critical issues, and it is likely it will frustrate the Government’s will with some or all of them: increases to the pharmaceutical benefits scheme co-payments; changes to the superannuation tax surcharge; changes to the disability pension and the question of excising northern off-shore islands from the migration zone. The first three are budgetary measures and the Opposition is on very weak ground for opposing them. The last is a question of overriding the exercise of regulatory power by the Minister for Immigration, Philip Ruddock. Labor, the Democrats and the Greens are on better ground here.

On Budgetary measures it is so easy for an Opposition to pick on some unpopular revenue measure and oppose it. In the case of an Opposition which can get a majority in the Senate with minor party support, it is a recipe for irresponsibility. The costs of the Pharmaceutical Benefits Scheme are blowing out – perhaps not by the amount asserted by the Government which is based on the most recent couple of years’ figures which had some unusual increases through a couple of very expensive drugs. Nonetheless the scheme’s cost is rising fast than inflation and it seems reasonable to increase the payment made by patients. The Democrats have suggested means testing the insurance rebate as a way of making up the money. That is all very well, but the time to argue broad policy issues is election time. Last election both major parties went into the campaign supporting the rebate. It is a foolish diversion of health resources, but that is beside the point on the issue of increasing the PBS payments. Labor and Democrats should allow the increase through and fight policy questions at the election.

On the disability pension, the Government has said it will look at an amendment to its proposals highlighted by the Democrats and Labor who have pointed out some unintended consequences of the Government’s original plan.
Continue reading “2002_06_june_leader19jun senate”

The first results from the 2001 census were published yesterday. At first blush they confirm some well known trends: incomes are rising; the population is aging; more people are identifying themselves as of Aboriginal descent; Catholicism is the largest religion; more people are living alone; more people are using computers; and Queensland has the highest population growth and Tasmania’s population is declining.

The importance of the census, though, is that it is definitive and that it quantifies the trends. And on that basis, government policy and private-sector decisions can be based. For example, this census included questions on computer usage for the first time. Half of Australian households had a computer and a third of the population used the internet in the week before the census. It suggests that the internet is a fairly good and improving method of information dissemination, but the majority of Australians get their information in other ways. Governments will have to address this information divide. Another example is the 16 per cent increase in the number of people identifying themselves as of Aboriginal or Torres Strait Islander descent since the previous census 5 years ago. Only 12 percentage points of that were natural growth; the rest was change of identity. Governments and indigenous groups will have to address that. Are some misidentifying themselves and therefore taking resources from more deserving or influencing the definition of Aboriginal culture? The census is proof of indigenous disadvantage that is not open to the sort of attacks directed at sampling techniques.
Continue reading “2002_06_june_leader17jun census”

Prime Minister John Howard promised before the last election that Australia would ratify the treaty establishing the International Criminal Court. It is alarming, therefore, that on his visit to the United States he emerged from a briefing by US officials on the US position on the treaty to say that the US arguments against it were “”very powerful”. If he bends to the US will it indicates sickening sychophancy and an incapacity by Mr Howard to make up his own mind on the merits. Presumably, when ratification of the treaty became Liberal policy before the election, Mr Howard had decided the issue on its merits. His Foreign Minister, Alexander Downer, obviously thought so, calling the ratification of the treaty one of the Government’s “”key human rights objectives.” Now, it seems, just because the US does not like the treaty, Mr Howard is impressed by the US view and Australia could well follow the US lead, just as it has done with the Kyoto treaty on climate change. It is almost as if Australia is reverting to the days before World War II when it did not have a foreign policy of its own, but merely followed British policy. Now, it seems, we are about to blindly follow the US. Australia will not get any respect that way. It is demeaning.

If Mr Howard follows the US lead and overrides those in his party room who want to go ahead with the treaty, Mr Downer would have not option but to resign. After promoting the treaty to heavily and stating it as a key objective, he could hardly hold his head up in foreign capitals if the Government refuses to ratify the treaty. No foreign government could treat him seriously again.
Continue reading “2002_06_june_leader14jun war crimes”

Ultimately, the general thrust of the report of commissioner Paul Baxter of the Independent Competition and Regulatory Commission is right. The taxi industry – at the economic level — must be deregulated. It was the same with the milk industry. But the lessons of the deregulation of the milk industry must be learnt and the same mistakes not be made as the taxi industry is deregulated.

Fundamentally, milk and taxi serices are no different from the retailing of meat or petrol or the provision of dental or optical services. There is no need for the government to determine how many providers there should be. There is no need for the Government to limit the number the providers with a monopoly licensing system. And there is no justification for the Government to charge a huge sum (whether by auction or otherwise) for permission to enter the market. Market forces driven by public demand should be the determinant of how many providers there are in the taxi industry. The Government should concern itself only with safety and competence. Once a person has proven the safety of the driver and the vehicle and the competence of the driver to drive it and to navigate it, they should be granted the licence to ply the taxi trade. In the building trade, for example, the Government does not limit the number of builders. Anyone who can demonstrate the competence to be a builder, electrician, plumber or whatever gets a licence and is beholden to an authority to work competently. There is no “”plate” system under which the Government limits the numbner of practitioners. In an ideal world anyone who can prove competence and safety should as of right get a licence to run a taxi – just like the surveying, architecture, surveying or any one of a dozen other activities.
Continue reading “2002_06_june_leader14jun taxis”

The V8 car race has caused yet another surge of passion in the Canberra community. Proponents and opponents of the race have trade arguments and insults through the letters pages and the air waves. Perhaps the main reason for there being more heat than light in the debate is that we do not know the facts on the financing of the race. Ordinarily, the financing of a commercial event would not be the public’s business. If the race were being held on private land with commercial sponsorship and entry fees paying the costs, it would not be public business – expect perhaps for the concern about glorifying speed on the road.

But the V8 race in Canberra is different. It obtains a subsidy and an underwriting guarantee from the ACT Government – money that could be used on others things or money that need not be raised from the populace at large. Further, the organisers of the race justify this public spending on the basis that it is beneficial overall for the Canberra economy. A further public element to the debate is the fact that the race is run in the Parliamentary Triangle, right in the centre of the city thereby causing unsightliness in the lead-up to the race and in its aftermath while the circuit and spectator facilities are prepared and disruption in the week before the race and the weekend of the race itself due to road closures that delay people going to work and hinder people going to attractions in the triangle.

The debate about when and where the race should run and how much taxpayer money should go into it is therefore a very public matter. It would help, therefore, if the public could know a little more about the finances behind it. It should, indeed, help the organisers of the race to stare down opponents if more of the finances could be made public.
Continue reading “2002_06_june_leader12jun race”

The Speaker of the House of Representatives is probably right when he says that it is unrealistic to expect Ministers to actually answer questions in Question Time. He was speaking after last week’s especially unruly sittings of the Parliament. The week saw MPs ejected from the Parliament, unruly behaviour at Question Time on both sides of the House, the Opposition taking innumerable points of order and Government backbenchers asking Ministers Dorothy Dixer questions to which Ministers replied at inordinate length. The voters – or at least those few who have bothered to continue to take an active interest in the doings of Parliament – have been aghast.

Obviously, Ministers are not going to answer embarrassing questions directly or make admissions of folly or inconsistency. Nor should the Speaker force them. The evasiveness of a Minister can be damning enough and if Opposition questions causes that level of discomfort it has done its job. The resulting media reports and follow-ups will enable voters t make their judgment.

However, Mr Andrew appears confused about what the Minister’s role is at Questions Time. Mr Andrew said, “”The obligation is that a minister has to be as fulsome as he can in his answer.” Fulsome means cloyingly insincere or offending by excess. Mr Andrew probably meant “”full”. Even so, it is the “”full” answer which is causing much of the problem with Question Time. Too often Ministers arrange for a government backbencher to ask the classic Dorothy Dixer in the form: “Can the Minister outline to the House what the Government is doing about XYZ and is the Minister aware of any alternative approaches to dealing with XYZ”. This gives the Minister the opportunity to extol the virtues of government policy and attack Opposition policy, adding exactly nothing to the sum total of human knowledge, but having the effect of burning up precious time in Question Time during which the Opposition would otherwise ask more penetrating questions.
Continue reading “2002_06_june_leader11jun parly”

The people of the ACT have some grounds for self-congratulation over the latest Social Trends figures issued by the Australian Bureau of Statistics, but we should not become too smug. The trends found that Canberrans live longer, healthier and wealthier lives that people in other states and territories. We are less likely to die in a car accident, less like to commit suicide, have the highest incomes, lowest social security dependency, highest educational standard and so on. However, we have among the highest alcohol consumption and the lowest fertility.

Some of these statistics have lessons for others in Australia. For all of the Canberra-bashing that goes on in Australia, it seems that having a planned city must have some major benefits. But so also does a huge amount of the federal money spent over the years creating the place including its health and education infrastructure and a large influx of highly educated federal public servants. It also helps to have a younger population than elsewhere and one concentrated in one city – unlike the other states and territories.

If Canberrans are leading longer, healthier, more educative and therefore perhaps happier lives, it seems there is a lot to be said for public spending on – nay, investing in — health, education and infrastructure. It means good economics, too, even from the Government’s point of view. Canberrans earn higher incomes and therefore pay more tax.
Continue reading “2002_06_june_leader11jun parly”

The Reserve Bank of Australia is playing a dangerous game. First its Governor, Ian Macfarlane, used words at a parliamentary committee hearing last week that could only translate as meaning an increase in interest rates of 2 per cent in the near to medium future. Then this week the bank increased rates by a quarter of one per cent (25 basis points in the jargon) which followed a similar rise a month ago.

It may be that Mr Macfarlane was engaging in some artful scare tactics. By merely warning of such large rises, he will cause consumer sentiment to turn, particularly in the housing market. That might not be such a bad thing. The alacrity with which people put their hands up a real-estate auctions, particularly in Sydney, is alarming. However, the Australian economy is more than the Sydney housing market. And in any event the Sydney housing market will adjust itself without any help from Mr Macfarlane. There comes a time when people in Sydney will question whether they will get a return on capital and whether it is wise to spend so much on housing. It does not matter a great deal whether the Sydney housing boom busts this year, next year or the year after. No the real concern is business investment. If Mr Macfarlane succeeds in scaring the business-investment horses as well as the hapless home-buyers of Sydney, he will not have done the country a service.
Continue reading “2002_06_june_leader07jun”

Slowly the political forces are moving towards the full privatisation of Telstra. A year ago, only the Liberal party would countenance its privatisation. Now its Coalition partner, the Nationals, have opened the door towards privatisation in this term provided a review found that services in rural and regional Australia were up to scratch. Moreover, Green senator Bob Brown has suggested that he would think about allowing the privatisation in return for major expenditure and policy commitments on environmental concerns. A third of the ranks of the Democrats have said the issue ought to be looked at in the context of the national interest and One Nation Senator Len Harris has said he would agree to a privatisation in some circumstances provided it were delayed for 18 months. Even the Opposition Labor Party has stated it would permit a full privatisation of part of Telstra – the service provider element – provided the infrastructure were left in public hands.

These stances by the non-Liberal elements in the Federal Parliament might seem quite encouraging for the Liberals. The trouble is that it is no use getting all the opponents half way to agreeing to a privatisation. Rather the Liberals need to get most of the opponents all the way to agreeing to a privatisation.
Continue reading “2002_06_june_leader04jun telstra”