Crispin Hull

Science is having a hard time. Politicians are demanding instant results and relevance to industry. Non-scientists are finding science harder to understand. Scientists want to get on with their research and are frustrated that the rest of society cannot see the self-evident worth of what they are doing and fund them for doing it no questions asked. But they face competition for the public and private dollar from a myriad of less deserving pursuits.

Yet the economic well-being of society and Australia’s international competitiveness are becoming more and more dependent on science and technology. And for Canberra, science and technology presents the best hope for a solid economic base to provide jobs for our youth and a high standard of living. Canberra in the past fortnight has seen a shining example of both the problem and what can be done about it. Canberra has held _ overlapping _ the Australian Science Festival Forum and Autumnfest. It makes one wonder whether Canberra is “”festivalled out”. We have Floriade, Autumnfest, the Canberra Festival, a theatre festival, arts festivals of various kinds and the science festival. The ACT Government gives various amounts of money and support to each of them, and indeed controls some of them. Autumnfest and Floriade, while perhaps attractive to many Australians outside Canberra, are derivative, artificial festivals.
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If Premier Richard Court must have an inquiry into the Easton affair, the proper place is the Western Australian Parliament. Instead he has opted for a Royal commission to be headed by a retired Victorian Supreme Court judge. At issue is whether in November 1992 the then Western Australian Premier and now Federal Health Minister Carmen Lawrence knew the details beforehand of a petition to be tabled in the Western Australian Parliament.

The petition was presented by a Labor backbencher. It falsely asserted that the then Leader of the Opposition now Premier, Richard Court, had improperly given material to Perth lawyer Penny Easton about the commercial dealings of her estranged husband Brian Easton and that Mrs Easton had perjured herself in a Family Law matter. Mrs Easton committed suicide four days later. If she had not there would have been no fuss. The whole thing would have been put down as another little political game to make the other side look sleazy. But she did commit suicide. So the back-fire has had wider repercussions.
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The Prime Minister has done it again. He has juggled the figures to create a telling psychological point. This time he and a couple of close Cabinet colleagues decided to throw in the Commonwealth Bank at the last minute to balance the books. In doing so, he has thrown out the window the second part of the One Nation L-A-W tax cuts and thrown out earlier statements that it was essential for the Federal Government to keep a controlling interest in the Commonwealth Bank. In throwing out the One Nation tax cuts and replacing them with a superannuation dollar-for-dollar subsidy, the Government has one again made upper-middle-income earners bear the brunt of the fiscal burden in favour of lower-income Labor heartland voters on whom it will rely to return it to government. In selling the remnant of the Commonwealth Bank, it has juggled the books in a dishonest way. Treasurer Ralph Willis argued last night that it was all above board. The estimates were on the books for all to see. True, but that is not the point.

The dishonesty lies in the way he, Mr Keating and one or two others made the decision at the last minute in an attempt to get the psychological jump on the markets, the public, the Labor Caucus and, indeed, the full Cabinet. It is now a fait accompli. In an election year, unity is vital and back-bench opponents will be silenced by a sense of self-preservation. There was also some book juggling with Telstra, but at $250 million at a lesser scale. That said, there is nothing wrong with assets sales. In particular, there is no reason why the Government should be running a retail-trading bank; it’s role is well-encompassed by the Reserve Bank.
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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.
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The Leader of the Opposition, John Howard, was this week forced to rule out a goods and services tax forever. Mr Howard made the innocuous observation that while a GST would not be policy at the next election, no-one could predict future circumstances and economic needs. This was beaten up out of all proportion.

The Labor Party’s scare tactics were dusted off again and Mr Howard was forced to rule out a GST forever. This is an appalling result for Australia. It means the nation is locked into it present inefficient tax system for many years to come, perhaps forever. At most, a government can tinker at the edges. Most business people and economists understand the need for major tax reform along the lines of a GST. Many ordinary voters, however, fear that a GST will be imposed in addition to present taxes. That fear has some justification judging on past taxation experience: the tax take seems to get bigger and bigger. It is unfortunate, though, that Labor has managed to play on that fear so that a tax-neutral or even tax-reducing reform is now impossible if it involves a GST component in whatever form. The trouble is that without tax reform, Australia will be a less efficient society and the whole nation suffers. Australia will be less internationally competitive without reform. Some pain and adjustment is needed, but it appears to be worth it in the long run.
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The tobacco industry has launched a multi-million dollars advertising campaign centred on personal rights following the Federal Government’s watering down legislation that had earlier prevented them from engaging in any advertising whatever _ even to the extent of advertising a safety recall of a cigarette lighter that contained a cigarette brand name. The new law takes account of the High Court’s recent ruling that the Constitution contained an implied freedom of political communication.

The gist of the tobacco industry’s advertisements will be that governments affect personal rights too much and they are affecting smokers “”rights” too much. The Canberra Times disagrees with what they are saying, but will defend their right to say it. Indeed, the final result will probably be worthwhile. Vigorous testing of ideas in an open society is one of the best ways for the truth to emerge. A similar result emerged from the earlier health argument about tobacco. For a long time, the tobacco industry asserted that smoking was not injurious to health or failing that it asserted that the case had not been proven. As a result health researchers had to continually re-test the ground against the onslaught of misleading counter-propaganda. The result is now that if there is no other epidemiological link more soundly demonstrated than that between tobacco and ill-health.
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Are managers born or made? Perhaps a bit of both. The Karpin report into Australian management which came down last week paints a depressing picture. It shows that Australian business thinking is too short-term and does not draw on the talents of women and migrants. It is clear that market forces, the laissez-faire approach and even blatant self-interest have not been enough to generate world best-practice management or even to ensure than a high proportion of managers have management training. The report called for changes to the approach of educational institutions and the fostering of an entrepreneurial culture in Australia. It came to the alarming conclusion that nearly half of the nation’s 400,000 front-line managers have no formal management training. The report said the ad-hoc training on the job or throwing in at the deep end was a critical weakness in the Australian economy. It called for business managers to undergo formal training at TAFE colleges in “”workplace management”.

The report’s exposure of the weaknesses in Australian management, though painful, is welcome. Some hard work is needed by business, governments and educational institutions to improve the situation. It will have to start with the recognition that Australian businesses can no longer pluck professional engineers, doctors, lawyers, architects or whatever off the floor and make them general managers of factories, hospitals or a large building project without some solid formal management training. However, it has to be education of the right kind. There are any amount of Mickey Mouse management seminars about. Indeed, there are a fair number of third-rate tertiary management courses. There are also some very good ones. The report recommended 1500 managers from small and medium business go overseas each year to learn more about management.
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Lawyers will lick up most of the Federal Government’s $160 million in a very short time. Throwing money at an already hideously expensive justice system is no lasting solution. Some extra loot for single mums, Aborigines, the handicapped, migrants and women is harmless enough, even if lawyers will take much of it. But it will not do anything to change the fundamentally expensive nature of the labour-intensive Australian justice system. That can only come through a headlong attack on the adversary system; the Alice in Wonderland evidence rules and the Federal Government’s own prolific output of useless law. Let’s take the statute law first. The Justice Statement said “”The Government is already simplifying the law in a number of areas, for example the Corporations Law . . . ”. This statement is from a government that put through a 1350 Section Corporations Law of 1092 pages in 1989 and then did 290 pages or amendments to it the following year.

This is from a government that passed 6905 pages of legislation in 1991 and 6138 pages in 1992 and similar amounts in 1993 and 1994. This compares to 1860 pages in 1980. Imagine the amount of costly lawyers’ time it takes to get across that amount of legislation. The Justice Statement says the Government has begun initiatives to put the law on computer. In fact the Attorney-General’s Department has spent nearly $1 million in the past year mucking around to get Federal statute law into a Windows-CD format what you can buy commercially for under $400. (It’s on my desk, Mr Lavarch, if you would care for a demonstration.) The Justice Statement did not address the laws of evidence or the adversary system. But they are responsible for most of the cost and, probably most of the injustice. In the adversary system, the case is run by the lawyers for each side.
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At a glance: Maternity allowance: $816, means-tested to phase out from $61,020 income. Tax: One Nation tax cuts (favouring middle incomes) axed. Super: Government to match $1 for $1 employee super contributions. Awards to make employees contribute 1 per cent in 1997 rising to 3 per cent in 1999. Government contribution limit: 3 per cent of average weekly earnings ($998). Means tested to cut out at double average earnings ($66,550). Asset sales: Government to sell remaining 50.4 per cent of Commonwealth bank. Cigarettes: Up 27c a packet. Health: Medicare levy up from 1.4 per cent to 1.5 per cent; Pharmaceutical Benefits safety net up from $407 to $600. Education: 5850 new tertiary places. HECS repayments to be faster. Foreigners to pay HECS up front. Company tax: Up 33 to 36 per cent. Sales tax: Car tax from 16 to 21 per cent. Some building materials up 12 per cent: Balance: Goes from $12.2 billion deficit in 1994-95 to $718 million surplus in 1995-96. ACT: First time Commonwealth funding per head is below national average. Selling Melbourne Building. Nothing for Aboriginal gallery.

$5.2 to refurbish Old Parliament. Environment: $217 over four years for coast clean-up. Sport: $3m extra for drug testing for Sydney Olympics. Arts: $11.6m for National Film and Sound Archive accommodation expansion. Public Service efficiency: 1.4 per cent across-the-board cuts, savings of $640 million over 4 years. Foreign Aid: Up $83m but static in real terms at 0.33 per cent of GNP. Social Security: Streamlining of assets test and applications. Defence: Jindavik abandoned. $56m for Russell. Forecasts: GDP 3 and three-quarters per cent; CPI 4 per cent; unemployment June quarter 8 per cent; employment growth 3 per cent; average earnings up 4 and a half per cent; business investment up 13 per cent; current account deficit $27 billion.

Queensland’s halving of stamp duty on shares is likely to be another poisonous apple in the fools’ paradise of competitive federalism.It is similar to the abolition of death duties by the ageing Queensland Premier Joh Bjelke-Petersen in the 1970s. Other states felt forced to follow. But the stamp-duty move is likely to spread more quickly. This is because to take advantage of Queensland’s death-duty abolition, you had to pay the price of dying in Queensland _ which meant, of course, that you had to pay the (perhaps greater) price of living there beforehand.Similarly, when the states compete with each other over who can offer the lowest payroll tax, you have to move your workers to that state to take advantage of it.

However, the stamp duty on share transactions is different. Most shares are held electronically and all are transferred electronically. It is easy enough for stockbrokers to set up an agency in Queensland and do all of the transfers there. At present the market turns over $128 billion a year. At the present tax rate of 0.6 per cent, the total stamp duty would be $768 million, less about $155 million lost to overseas transactions. NSW and Victoria raise about $250 million each. The ACT gets $12 million. Leaving $100 million shared by the rest. Queensland is likely to take a very hefty slice of the NSW and Victoria share. Initially, it may find that by reducing the duty from 0.6 per cent to 0.3 per cent, it will pick up more than enough extra volume of transactions to make up for the loss in percentage taken from each transaction. Unless, the other states fall into line and reduce their tax. If this happens, the usually wealthy shareholders of Australia will gain about $384 million a year at the expense of state revenues which usually go to schools, hospitals and roads.
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