Friday, January 27, 2006

Even get their own fireworks.

I was going to write about the drop off in higher education enrollments (or rather the odds of Ross Gittins and I agreeing on something – twice! First flat taxes and now higher ed), but then a conversation with a friend sparked me off on the special treatment of aboriginals.

The recent promotion of outgoing Minister of Defense, Senator Robert Hill, led to a cabinet shake up, reshuffle and mixing of ministries. Something you may not have heard, because it affects less than 2 per cent of us, is that the Office of Indigenous Policy Coordination (OIPC) has been ripped out of the Department of Immigration and Multicultural and Indigenous Affairs, and placed into the hands of the Department of Family and Community Services.

Immigration is no longer responsible for aboriginals, Centrelink is.

The message the OIPC tells us is loud and clear: our indigenous brothers are different, they can’t cut it like the rest of us, and need our help. They need a special government Office to deal with their special needs. Please, its insulting.

The OIPC looks after all things touched with the aboriginal brush (or should that be finger paint?). Land rights and native title are handled by this Office and not the Attorneys General. Aboriginal health policies are formulated under the guidance of this Office, and not the Department of Health and Ageing. Aboriginal education polices, this Office, not the Department of Education, Science and Training. Economic development, drug use, aged care, fringe benefit taxes, interpreter services, Abstudy, indigenous educational scholarships, the public services’ diversity in employment scheme, the petrol for face-washing scheme, aboriginal arts funding, home ownership. When Bambang gets sick of our drug trafficking and invades us al a the US and Colombia, will the Northern Territory be protected by the OIPC too? Even last night at the Australia Day fireworks, they started with a special aboriginal display, before the rest of us were invited to take part!

Apart from the duplication of government (in 2005 the Office cost, get this, $3.14 billion dollars), the OIPC doesn’t seem to producing the goods: “It is distressingly apparent that many years of policy effort have not delivered desired outcomes, indeed some important respects of Indigenous people appear to have deteriorated or regressed. Worse than that… areas identified as critical to overcoming disadvantage in the long term remain well short of what is needed” (Gary Banks, 2003, Chairman of the Productivity Commission, and Chairman of the Steering Committee for the Review of Commonwealth/State Service Provision).

And to tackle slipping trends and long term shortages- we’re going to change which Canberra suburb our bureaucrats’ll sit.

Here is a novel idea. Lets ask why Whitey Ford and his multicultural mates have been so successful, while aboriginals (in general) have faltered? Its because we’ve been left the hell alone. To get into university, we’ve had to study and work hard. To stay out of gaol we’ve had to obey the law. To stay healthy, we haven’t needed a government petrol bowser as a quid pro quo to wash our faces.

Self responsibility is a wonderful thing. It gives you a sense of pride, ownership and dignity. It is a door to the rest of the world. Rather than treating the “first Australians” as a inferior race with such paternalistic policy, lets treat them equally. This reverse racism sure isn’t working, and its costing me a fortune in tax.

Wednesday, January 18, 2006

OECD Report: Australians efficient in dealing with government

The French based OECD have just come out with a new report criticizing Australia and Australian businesses for excessive bribery in foreign dealings (cough oil-for-escargot cough). But is there anything really wrong with side payments and fat yellow envelopes under the table?

According to this new OECD report, Australia is notorious for being soft on foreign bribery- even providing tax incentives to do so. The OECD has made recommendations for Australia to crack down on companies bribing officials, remove tax loopholes and pursue tighter audits of firms suspected of bribery.

If money is exchanged to evade the legal system, defame or falsify information it is wrong and corrupt and shouldn't be permitted in our society (unless of course the legal system you are dealing with is itself wrong and corrupt then Chappelle should have played her cards better). But in business it is profitable, productive and in many cases more efficient.

A business will only engage in illicit side payments if it is in their best interest. That is, if the transaction is profitable. Presumably, other firms have this same opportunity, and in an imperfect competition setting the firm that values the transaction the most will get the contract.

I’ve heard stories of in the traffic lightless streets of Indonesian, you can get the go-ahead from traffic cops by holding a few Rupiah out the window! Northbourne would be a 3 minute (and $5) cruise rather than a 20 min outing.

The real concern of the OECD report and, the focus of Australian law, is bribery of foreign government officials. So long as we’re “bribing” officials to hasten due process and not interfering with justice what’s the harm? Have you ever dealt with government? Put in a Development Application? Asked for data? Applied for a job? Due process could use a little hastening. And before the cries of “rent seeking” fall in, the efficiency gain of an expedient rubber stamp over “I’m sorry we lost your application in the mail” will far outweigh and side payment efficiency loss. And again, firms are free not to bribe as well.

Tuesday, January 10, 2006


Tip your hat to Liberal MP Andrew Laming, Member for Bowan, for his gutsy article in today's Oz challenging the Pharmaceutical Benefits Scheme (PBS). While he well underestimates how much taxpayers are burdened by the clumsy scheme- "we pay $800million too much" -any effort to reform, reduce and remove the PBS must certainly be welcomed.

In essence, the PBS is a 60 year old scheme under which any Australian- from the battler working behind the servo, to Westfield billionaire and soccer fanatic Frank Lowy- can access any drug listed on the scheme for just the low low price of $29.95 (despite the wealth of complaints from groups such as ACOSS and the ALP) . In reality drugs for asthma cost about $80, heart disease $115 and diabetes approximately $200 a dose. In reality the PBS costs taxpayers $6 billion dollars a year too much.

Let me say up front that I'm all for taking care of those that honestly cannot look after themsleves- as a society, its our responsibility. But when "taking care of" turns into smothering with a tax threshold of 48 cents, I have to draw the line. The co-payment of $29.95 can be less than 10 per cent of the actual cost of the drugs. For concession card holders, the "co-payment" is a token fee of just $4.95. Its a great scheme: you can get a pack of cigarettes and fill your prescription for lung cancer medicine with change from a twenty.

So what's the answer? As always- its competition and choice. The problem now is, because of the PBS, the Australian market is dominated by generic drug manufacturers Alphapharm and Sigma Arrow. Neither company produces any new drugs or saves devises new ways to save lives. Rather all they do is reproduce those drugs where the patent has expired on previous drugs. There is then no incentive for new drug development, research or creating cures. After all, with a pay check of $6 billion a year, why bother?

Remove the PBS, force drug companies to compete for our money, and place more of the burden upon the recipient. Uh-oh, that sounds American right? Good! So it should. The only country in the modern world today that has a moral right to an obesity problem is the US. So long as they themselves pick up the tab for the obesity drugs, go ahead and eat that extra chilli-dog.

The next complaint you’ll fire is straight from “Don’t Work and Spend Everyone Else’s Money- For Dummies.” How can we trust these inherently corrupt (whatever) pharmaceutical companies to not extort us out of all our money? Won’t they just repackage existing drugs, force doctors to prescribe them, and charge us an extra $100 or $200? It’s a good argument, information is certainly power in this market, and the keepers of that information is certainly one sided. Or is it? Already on CHOICE magazine’s website, you can obtain a buyers guide to blood pressure monitors, sleep aids, health insurance, anti-depressants, arthritis drugs, paracetamol and prescription medicines- just to name a few. Guaranteed, a free and open drug market in this country will lead to an open war between A Current Affair and Today Tonight, with exposé after exposé.

Laming’s effort is certainly gallant. Telling anyone they should pay for something themselves is never popular- and this is even more true when it comes to health care. But as a fit, healthy overtaxed and insured young male, I’m certainly happy to incur the price hike.