Pandering to the Government Surveys Have Shown That Voters Trust Non-Government Organisations Much More Than They Trust Politicians and Businesses

Pandering to the Government Surveys have shown that voters trust non-government organisations much more than they trust politicians and businesses. With the election upon us, political parties need the support of environment groups to win over key constituencies. But all is not what it seems in the environment movement. Clive Hamilton reports.

No. 40 September 2004 On 7th September, the Federal organisations, most of which have Environment Minister Senator Ian been campaigning on the issue for Pandering to the Government Campbell issued a media release years, wrote an excoriating letter to Clive Hamilton announcing some new Commonwealth WWF directors. It declared of WWF’s grants for projects to protect threatened Blueprint for Tasmanian Forests: species. While the announcement was a Making private schools dull affair, the remarkable feature of the “The document is incredibly accountable media release was that it included the damaging to the cause of forest Deb Wilkinson panda logo of the World Wide Fund for conservation in Tasmania. We Nature and quotes from the acting CEO believe it will do irreparable harm of WWF praising the Government’s to the reputation of WWF in The next gender wars program. Australia and internationally.” Barbara Pocock The fact that WWF is actively promoting The environment groups were not the Pets and foreign aid the Howard Government’s only ones to feel betrayed. The Age Richard Denniss environmental policies in the middle of reported that some wildlife an election campaign is difficult to square photographers whose work is due to with its angry reaction to the Australia be published in a new WWF book on Quotes from the Tenth Institute’s July report which concluded the Tarkine have withdrawn Anniversary Dinner that the relationship between WWF and permission to use their photos. One the Howard Government has become Hobart photographer, Ted Mead, was Allies fall out over issue that never unhealthily close. quoted as saying: “I certainly would not have been part of the book project if I was had known the blueprint was going to WWF Australia has enjoyed be produced”. Looking into the ‘Too Hard’ lavish financial support from basket the Howard Government with Taming the panda Howard Pender a five-fold funding boost since 1996. The Institute’s study found that WWF has enjoyed lavish financial support Health insurance tricky for the old from the Howard Government with a Richard Denniss The report, Taming the Panda, followed five-fold funding boost since 1996. an earlier Institute report, Silencing Total Government grants over the Australians still the world’s worst Dissent, which examined the means by period amount to more than $15 which the Howard Government million, with $13.5 million allocated greenhouse gas emitters attempts to silence its critics in non- since 1998-99, nearly all of it from the Hal Turton government organisations. Federal Government.

Climate follies Within days of the release of the The flow of Federal funds was turned Clive Hamilton Institute’s paper a bitter row broke out on after WWF endorsed the Howard in Tasmania over a report detailing Government’s highly controversial WWF’s solution to the dispute over Environmental Protection and Institute notes logging in Tasmania’s old-growth Biodiversity Conservation Act in 1999. forests. Thirteen local environment Funding to other environment groups, THE AUSTRALIA INSTITUTE

notably ACF and TWS (both of which Because the public is justified in asking were critical of the EPBC Act), has been whether the opinions and activities of slashed. other groups are influenced by WWF in PNG governments and businesses, the An analysis of the public statements standing of all environment NGOs in WWF’s unpopularity is not made by WWF Australia and other the community could be jeopardised. environment organisations about the confined to Australia. Simmering Howard Government’s major Playing politics resentment among local environment policies showed the conservation groups in Papua It is apparent that WWF is being used following. New Guinea has recently spilled by the Howard Government to endorse into the media with the ABC « WWF Australia’s comments are unpopular environment policies. It almost uniformly favourable, and frequently deploys WWF’s name and reporting environmentalists often highly complimentary, to the statements in an effort to give credibility accusing WWF of not doing Howard Government. to controversial government policies. enough to promote conservation in the Kikori region. For some « WWF Australia’s position is There is an inherent danger for independent community-based time, environment groups in frequently at odds with those of organisations when they accept other major environment groups PNG have criticised WWF for government funding. Organisations such as ACF, Greenpeace, TWS and failing to communicate and work that begin to see the world through the state conservation councils. with local groups. eyes of governments risk losing their « Other major organisations are capacity to make dispassionate sometimes critical and sometimes assessments of what is in the interests supportive of Howard of the environment. It is also likely to win the backing of the Government policies. Most organisations work assiduously National Association of Forest The evidence suggests that WWF to guard their independence and, at their Industries. At a recent forest industry Australia can usually be relied upon to best, governments accept this. In the conference in Melbourne reported by Bob praise the Howard Government’s main case of the Howard Government and Burton, the head of NAFI, Kate Carnell, environment policies, while other WWF Australia, it appears that the line described a divide-and-conquer strategy organisations are more likely to provide has been crossed. in which ‘moderates’ are courted and ‘radicals’ marginalised. WWF’s Senior an independent assessment. With the environment expected to Policy Officer, Michael Rae, shared the The report concluded that there are feature more prominently in this federal podium with her. strong grounds for questioning whether election than any since 1990, ‘solving’ WWF Australia can legitimately the iconic Tasmanian forests problem “The problem as I see it … is that continue to describe itself as will be high on the agenda of the major although I think Michael Rae and independent. The loss of independence parties. WWF’s Blueprint offers the WWF are doing an absolutely is of considerable importance as it promise of saving the industry and stunning job [attempting to undermines WWF Australia’s role in getting the endorsement of a major negotiate with industry],” Carnell public debates about Government green group. It’s an attractive approach said, “ … we know that if we come policy and raises questions about and we may well see the Howard to an arrangement with Michael and whether it has misled its supporters and Government adopting something very WWF, the Wilderness Society will the general public. similar and receiving WWF backing. still hate us because their fundamental position is that native Growth in WWF revenue from government sources 1992/93–2002/03 ($m) forestry shouldn’t exist at all”. Many committed and capable people 4.0 work for WWF, and the organisation has 3.5 made a valuable contribution to environmental protection in Australia and 3.0 elsewhere. But WWF appears to have lost 2.5 sight of the critical importance of maintaining its independence from 2.0 government and business. One hopes 1.5 that it will come to its senses before it does too much long-term damage to its 1.0 reputation. 0.5 The appointment of former BP chief, Greg Bourne, as the new CEO of WWF 0.0 Australia augurs well as he has a track 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 record of asserting his independence. n

2 THE AUSTRALIA INSTITUTE Making private schools accountable In the wake of the Prime Minister’s comments about the lack of values in public schools, The Accountability of Private Schools to Public Values (Institute Discussion Paper 71), considers the extent to which private schools are accountable to the Australian public for the funding they receive. It has always been accepted that The Federal Government’s adoption of organisations must be accountable for the new model to distribute funds the public funds they receive. The large between private schools has resulted in increase in government funding for greater inequality of access to schooling. private schools naturally causes the The largest increases in per student community to ask whether those funding have been allocated to the schools are sufficiently accountable for highest fee schools. Not only can private their commitment to the public values schools select the easiest students to that all schools are expected to uphold. teach, but the Federal Government ensures that the most favourable of While the private school sector, in all of four different funding approaches is its diversity, promotes some of these applied to each private school. public values some of the time, some private schools fail to uphold them. Yet Schools and snobbery these schools remain accountable primarily to their own boards rather There is a widespread view that the than to the Australian public more extension of private schooling, and generally. especially the role of elite schools, is Multiculturalism, understood as respect entrenching class divisions in Australia. Furthermore, to the extent that some and tolerance for different cultural At elite private schools, the school sectors of the private school system practices and religious beliefs, occurs population is largely comprised of actively seek to be exclusive, either above all in the school yard. The students from the same socio-economic because of the fees they charge or on overwhelming majority of respondents group because only wealthy families can religious grounds, the private school to a Newspoll survey commissioned by afford to send their children to these system cannot achieve the degree of the Institute believe that it is good for schools. inclusiveness inherent in the public children of different ethnic and religious school system. backgrounds to mix at school, with 96 per cent agreeing and only two per cent It has always been accepted The Institute’s report argues that the disagreeing (see the table). that organisations must be steady growth of the private school accountable for the public sector is creating a growing tension The refusal of some private schools to funds they receive. between public funding of private conform to community values such as schools and the values that are taught in inclusiveness and tolerance (by, for some of them. Increasingly, students of example, excluding gay students) is not When students from elite schools do differing ethnic and religious the only problem that needs to be mix with other students, it is typically backgrounds are being isolated from tackled by policy makers if they wish to with students from schools of a similar each other through the growth of rely more heavily on the private sector socio-economic standing. The concern church-based and elite schools. to uphold public values. is that not only will students at these exclusive schools not learn ‘how the “It is good for children of different ethnic and religious other half lives’ but that, as a result of their social isolation, they will develop backgrounds to mix at school” (per cent) elitist values and behaviours. Male Female Sydney Melbourne Total Our Newspoll survey reveals that 58 per Strongly agree 87 84 83 87 85 cent of Australian adults believe that Partly agree 10 12 12 10 11 expensive private schools promote snobbery in society. Respondents in Total agree 97 96 95 96 96 Sydney were more likely to agree than Partly disagree 1 1 1 1 1 those in Melbourne. Strongly disagree 1 2 2 2 2 There appears to be a deep uneasiness Total disagree 2 3 3 3 2 in many sections of the Australian community about the social

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implications of the rapid expansion of half believing the promotion of private money on education instead of receiving private schools. The public values that schools to be good for Australia. tax cuts. This preference has been schooling has always meant to promote ignored. appear to have been neglected in the shift from public to private schools. Our Newspoll survey Parents are then asked to choose reveals that 58 per cent between a public school system that, in Equality of opportunity, the right of some instances, does not live up to the of Australian adults all children to a high-quality education their expectations, and a private school and respect for ethnic and religious believe that expensive system in receipt of a growing amount differences are being eroded by some private schools promote of Federal Government funding. For aspects of the growth of private schools, snobbery in society. some parents, the personal choice to and this calls for greater accountability send their children to a private school is in the disbursement of public funds. made because their public choice of While the rhetoric of ‘choice’ in the greater funding for government It is perhaps for these reasons that a schools debate is prominent, parents schooling has been ignored. n majority of Australians do not believe have repeatedly stated that they would governments should be facilitating the like to choose to spend more public Deb Wilkinson growth of private schools. Only one third of respondents to the Newspoll survey agreed with the statement that policies to increase the percentage of ATO to investigate Institute’s claims children going to private schools would of tax dodges be good for Australia. Even among parents who send their children to private schools there is considerable Following the concerns raised in the Institute’s web doubt about the social value of paper, Tax Deductibility of Donations to School Building promoting the sector, with less than Funds, which highlighted questionable practices by some private schools, the Australian Taxation Office has announced that it will be investigating school building funds as part of its compliance program.

Come to our The ATO wrote to the Institute foreshadowing a crack- Christmas down and subsequently released a public statement gathering indicating that it ‘will be reviewing endorsed SBFs to confirm their status as deductible gift recipients and the Members of the Institute tax deductibility of donations made to them, including are invited to an end-of- examination of: year celebration on Tuesday 14th December at * whether gifted money has been used for purposes 5:30 pm. To be held at the Innovations Building on other than the acquisition, construction and the campus of the maintenance of a school building, and Australian National University, Canberra, it * practices in relation to soliciting donations and will begin in the small whether accepted gifts satisfy the requirements lecture theatre with a 30- for tax deductibility.’ minute talk on the latest thinking and research This is welcome as the Institute’s research uncovered work from Institute staff. several cases where schools pressured parents to pay ‘voluntary’ contributions to school building funds. Drinks and nibbles will follow at which members will have a chance to swap The larger issue of the extent of unreported subsidies in ideas and meet staff and the form of ‘tax expenditures’ for the wealthiest private Board members. schools is one that we hope Federal Parliament will consider.

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The next gender wars In a follow up to an earlier discussion paper, Barbara Pocock has analysed the looming gender war over household work and child care in Work and Family Futures: How Young Australians Plan to Work and Care (Discussion Paper 69).

John Howard has referred to work family Most young people in this study assume There are few signs of ‘A New Austra- balance as a barbeque stopper. But while they will live in dual-earner couple lian Wife’ who, having witnessed her the current election campaign features households and share the care of their mother’s efforts to hold down a job competing tax and welfare policies children with their partner. These while performing the bulk of the child designed to make juggling work and objectives can be expected to drive a raising, is intent upon finding a wealthy child care easier, the problems run much continued decline in the traditional male male breadwinner to earn while she de- deeper than whether child welfare breadwinner household and continued votes her time to the children. It is likely payments should be paid fortnightly or growth in dual-earner households. that the plans of young people with in a lump sum at the end of the year. respect to extended family care and As shown in the table, although most shared care with partners will be sorely young men and women plan shared tested by reality – both in terms of parental care of their children, some workplace flexibilities such as leave, and “You’ve got to share, young men take it for granted that their availability of grandparents. This will otherwise she’ll divorce partners will assume this role. By probably drive continuing growth in the comparison, a much smaller proportion you.” demand for formal childcare. of young women plan traditional maternal care while a larger proportion foresee a pattern of intermittent Young men and women have maternal care, shared with extended “I am not going to do significantly different expectations family, partners and formal childcare. The all the housework and about who will clean their houses and plans of these young people with respect look after the baby all mind their children. A significant to the division between work and by myself. He will be mismatch between the desires of men childcare demonstrate some significant and women is likely to persist as fewer doing it as well.” mismatches between the genders. young women are keen on exclusive maternal care than their prospective While young women foresee working partners perceive. This gendered gap around their care responsibilities, the Three models for the allocation of do- regarding the traditional breadwinner reverse is true of many young men who mestic work are evident from the ideas model is suggestive of some lively expect to engage in care around their of these young people: shared, debates about work and care in these work with plans for childcare being outsourced or performed exclusively by households of the future. contengent upon job flexibilities. They women. As the following quotation will ‘lean’ against the door of workplace shows, there is evidence of tactical plan- In order to better understand these flexibility, but if it does not fall open ning on the part of both sexes as they emerging issues, 21 focus groups they will leave the nurturing to their attempt to manipulate the situations comprising Year 6 and Year 11 males partners, the default carers. that they want. and females (aged 10 to 18 years) from Many young women hold high high and low socio-economic situations You’ve got to share, otherwise she’ll di- expectations that their own mothers will in both urban and rural locations were vorce you. You should be able to help for back them up in their labour market convened. In total, 93 young people the first few years [of marriage] then it participation by taking care of their were consulted for the study. might wear off… (Kevin, 17, Country granchildren. High)

Despite the widespread existence of two Young people’s plans for care of children (per cent) income families today, male resistance to housework remains strong, and is Males Females Persons likely to do so into the future. Sharing between partners 30 40 40 Intermittent maternal care 15 28 23 Fingers crossed - in my situation - I’d probably, with the kids, let my wife be at Traditional maternal care 36 16 24 home, be a housewife, so when I come back External care by family 9 14 12 from work she’d have the food ready, the or formal institutions house nice and clean just for me to relax Paternal care 0 2 1 and spend time with my kids and all that. Total 100 100 100 (Sebastian, 17, Strive High)

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Young women, however, are keen to share and know they will have to ‘start Plans for the allocation of housework (per cent) strong and stay strong’ to persuade their partners to agree. Males Females Persons You know, I’ll be helping full-time [in Sharing housework 47 59 55 paid work], I expect shared responsibility. I am not going to do all the housework External help will do it and look after the baby by myself. He (cleaner, maid) 6 23 17 will be doing it as well. No more the My wife will do it (male) 41 0 15 woman’s work, you know, it’s going to I will do it (female) 0 16 10 be a shared household. My husband will do it (female) 0 2 1 The table provides data on the plans Other (eg robot) 6 0 2 for the allocation of housework by gender. It shows that there is a substantial difference in the expectations of young Over half of those in the focus groups earner households seem certain. The sug- men and women about whether would like to see domestic work gener- gestion is that, as more families face the women will perform most of the ally shared, an impulse which is stronger demands of two parents who work while housework. A related mismatch exists amongst young women than it is having responsibility for dependents, the between the perceived need for external amongst young men who, in surpris- tensions around work and family will help with housework, with 23 per cent ingly large proportions, expect that their increase rather than diminish in the fu- of females expecting to rely on such partners will do it (‘fingers crossed’ as ture. This study gives no succour to the help compared to only six per cent of the respondent above put it). A small optimistic hope that the allocation of males. proportion of young women anticipate unpaid work is moving briskly to a fair this and some hope young men will ‘ma- allocation between the sexes, or that the ture into’ housework. Thus a significant heat of discussion around this issue is Young men will “lean” upon mismatch of preferences is evident, with likely to be cooler than it has been the door of workplace a gender struggle over housework likely amongst an earlier generation. n flexibility, but if it does not to persist. Barbara Pocock fall open they will leave the The continuation of the long-term de- nurturing to their partners. cline in male breadwinner households (with children) and the growth of dual- More spent on pets than on foreign aid Australians spend more on their pets than on foreign aid according to a recent Institute web paper entitled Overconsumption of Pet Food in Australia. The paper estimated that Australians spend over $2.2 billion each year on their pets compared to foreign aid spending of around $1.8 billion. In 2003 Australians spent over $1.2 about addressing these newly identified This demand for ever more expensive billion on pet food, $169 million on ‘needs’. pet products is coming at a time when, other pet products and more than $700 according to a Newspoll survey million taking pets to the vet. Some commissioned by The Australia doggie ‘treats’ retail for over $100 per Institute, 62 per cent of Australians kilo while diamond jewellery, buoyancy agreed with the statement that they could vests for dogs and sleeping bags for not afford to buy everything they really ferrets, costing hundreds of dollars, need, including 47 per cent of people in are also now on the market in households earning over $70,000 per Australia. year. While there is no doubt that pets bring Expenditure on such luxury goods is joy to the lives of millions of Australians associated with the ‘humanisation’ of there is also no evidence to suggest that pets. That is, pet owners are a dog appreciates a $100 toy any more increasingly projecting human than a $1 toy. emotions and desires on to their pets n and, having done so, they then set

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Quotes from the Tenth Anniversary Dinner The Australia Institute celebrated its ten-year anniversary with a dinner at Old Parliament House on August 4 and we were reminded of just how much had been achieved. The MC, Geraldine Doogue, praised the Institute’s Executive Director Clive Hamilton for not running away from the hard questions and for getting those same questions asked on the front page of the nation’s newspapers. The keynote speech was given by Tim Flannery who said Clive was “one of the rarest things on the Aus- tralian social scene and that is a true patriot, some- one who really cares for this country”. Sharan Burrow, an Institute Board member and president of the ACTU, wrapped up the night with an uplifting speech in which she said, in part: What an amazing ten years! This is a fantastically precocious ten year old and I think she is fantastic. She is gregarious, she’s loud, she’s opinionated, she’s determined, she’s tenacious and she’s provocative and aren’t we glad she is. Not the top of her class, but in a celebratory sense and a really sad sense, the only one in her class. We see the demise of independent research, challenging commentary and inno- vative ideas in Australia and in that context this Institute stands tall and makes us incredibly proud to be associated with it. The Australia Institute is a touchstone for any of us interested in social policy, political trends, economic theory, infrastructure, just how you feel about the world. There is not much in public or private life, and the intersection of those two, that the Institute has not had a go at and it is amazing stuff. Clive Hamilton’s speech, in which he reflected on the role of think tanks and the challenges they face, is available on the Institute’s web site.

Allies fall out over issue that never was

Claims by the Bush Administration that from the US-Australia free trade that the US had so far not requested for Labor-inspired laws to protect drug agreement negotiations saying the any changes to be made to it”, Sunday prices under the PBS jeopardize the US- Americans have already stated they are Telegraph August 3 2003, p. 2 Australia Free Trade Agreement are not going after the PBS. ‘You can’t get ironic given that the Australian it any clearer than that and that came Senator Campbell: “The Prime Minister Government insisted throughout the from the American side, nor our side,’ and the Minister for Trade have both negotiation process that the PBS was said Minister Vaile”, ABC Radio, May made it very clear that the PBS is not on not even on the negotiation table. 19, 2003. the table. … I should also add that the United States has made no proposals to “Trade Minister Mark Vaile dismissed “A spokesperson for Trade Minister Australia regarding the PBS”, Senate the Australia Institute’s call to remove Mark Vaile said the Government was Hansard, 2 December 2003, p. 18638. the Pharmaceutical Benefits Scheme committed to the (PBS) scheme and n

7 THE AUSTRALIA INSTITUTE Looking into the ‘Too Hard’ basket Much is said about the need for policy reform but the effectiveness and efficiency of previous reforms is often overlooked. In a new Institute discussion paper, Public policy, Complexity and Rulebase Technology, Howard Pender considers the impact of increasing levels of complexity on the equity, efficiency and accuracy of the system. It has been estimated that the number weak or non-existent. Political, of pages of tax law has increased from bureaucratic and academic discussions 120 pages in 1936 to about 7000 pages of public policy often deal with criteria The number of pages of in 2003. Tax law is not, however, the such as economic efficiency, social equity, tax law has increased only area to have witnessed a substantial justice, environmental impact and from 120 pages in 1936 increase in complexity, with the amount administrative cost but traditionally to about 7000 in 2003. and complexity of legislation, regulation they have dealt with complexity and and administrative rules burgeoning in accuracy in a cursory, anecdotal fashion, a wide range of areas. if at all. with RBT, an additional likely result would be a notable reduction in the As a result of this rise in complexity The ability of administrative agencies private costs of accurately complying there has been a deterioration in accuracy. to hide inaccuracy, which inevitably with laws. Considerable improvements For example, an audit of accuracy in results from complexity, has in accuracy will result in a more equitable Centrelink, the Commonwealth agency contributed to the lack of feedback. In and just application of law. responsible for the distribution of some areas of public policy, complexity welfare payments, has recently revealed has increased to such an extent that the The main benefits likely to result from that an estimated one million mistakes impact of sections of some bodies of wide-spread public sector use of RBT had been made by the agency over a four legislation can no longer be described in future are twofold. A greater focus month period. as ‘the rule of law’. In particular on the problems currently caused by complexity (for example, high levels of inaccuracy) in public administration is a In some areas of public policy, complexity has increased likely outcome. to such an extent that the impact of sections of some In addition, better informed discussion bodies of legislation can no longer be described as ‘the of the costs and benefits of higher levels rule of law’. of complexity and the impact of complexity on public policy performance criteria such as efficiency, equity and Complexity is often treated as a hidden situations, this impact comprises a administrative law values can take place free good in discussions of public policy random element potentially as prior to the introduction of new and public administration in Australia capricious as the decisions that would legislation. Legislative changes aimed at and many other Western countries. An result from the delegation by law reforming areas such as tax and social architect commissioned to design a new makers of a high level of discretion. security are essential to the development building might consider criteria such as of a modern society. visual appeal, energy efficiency and Hope for the future materials availability when producing a Two recent developments are beginning However, the process of incremental design. But as the architect increases the to introduce a small measure of change cannot be pursued indefinitely degree of structural complexity of the feedback into the legislative cycle. First, without regard to the impact on the building the client, the builders or the attempts are being made to measure complexity and, in turn, the accuracy and potential tenants will at some stage say accuracy in a statistically valid manner. fairness, of the legislation. RBT is an ‘no’. Secondly, information technology has important technological development in n Further, architects considering developed a class of product, ‘rulebase’ this regard. renovations to a house would be technology (RBT), to enable a set of derelict in their responsibility if they private or public rules to be modelled proposed second storey extensions that and then administered with very high could not be supported by the standards of accuracy. foundations of the original building. But that is what policy makers regularly Public sector use of RBT in particular do. areas could afford several benefits, including substantial reductions in In much public policy discussion and public administrative costs over the life- formulation the feedback loop between cycle of bodies of legislation that have the architects of public policy and the been developed using the technology. practitioners who implement it is very On the basis of private sector experience

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Health insurance Australians still the world’s tricky for the old worst greenhouse gas emitters The Commonwealth Government has recently announced an extension of the Discussion Paper 66, Greenhouse gas were 27.2 tonnes of carbon dioxide multi-billion dollar private health emissions in industrialized equivalent. In comparison the figure for insurance rebate, lifting the 30 per cent countries: where does Australia the next big polluter, the USA, was 21.4 subsidy to 35 per cent for 65 year olds stand? by Hal Turton, shows that tonnes. The main culprits are Australia’s and 40 per cent for 70 year olds. Australians are still the highest per electricity generation mix, road capita greenhouse gas emitters in the transportation and aluminium However, according to an analysis by the developed world. production. Institute, 65 year olds who respond to the higher rebate by taking out private The Institute’s latest study on The high levels of emissions from these health insurance will pay 35% more than greenhouse gasses shows that per capita sectors are not caused by underlying they would have before the changes in emissions by Australians are 27 per cent intractable physical or social constraints, health insurance introduced in 2000. higher than those of US citizens and nor are they based on economic more than double the average for imperatives. However, influencing these Under Lifetime Health Cover, those over industrialised countries. Australians activities and bringing about a 30 who do not have private health remain the highest emitters per person significant reduction in emissions will insurance must pay premiums two per of all industrial countries. take time, highlighting the need for early, cent higher for every year they are over consistent and sustained policy action. When measured on a comprehensive 30, with a maximum loading of 70 per basis, Australian per capita emissions n cent payable by people who first take out hospital cover at age 65 or older. Even without accounting for increasing Greenhouse gas emissions per capita for selected countries, premiums in recent years, a 65-year old 2001 (t CO2-e) will pay more for a private health insurance policy than in 1999 before the 30 changes. 25 While the new changes are unlikely to encourage older Australians to take out 20 health insurance, the number of young people with cover continues to decline. 15 According to official Government statistics released in August, more than 10 173,000 people aged under 40 have abandoned their private health insurance 5 in the last two years, with over 36,000 0 people under 40 leaving in the last quarter. n USA UK Russia Japan Australia Germany All Annex I Remember that our address is now:

Level 1 Phew, that’s a relief! Innovations Building Eggleston Road Steve Liebmann (24 August): So Clive Hamilton from the ANU ACT 0200 Australia Institute has got it wrong [on private health insurance]? Email remains the same but Prime Minister: Well, I disagree with him. I mean, I’m not Phone No. is 6125 1270 saying he’s a bad man or he’s making that up, but I’m just and Fax No. is 6125 1277 saying that the advice I have is that it will essentially reward people who already have private health insurance …

9 THE AUSTRALIA INSTITUTE Climate Follies In his recent public lecture on “Climate Change Policy in Australia”, Institute Director Clive Hamilton responded to the ten silly excuses used by the Federal Government to refuse to ratify the Kyoto Protocol. Here is a summary. The full paper is available on the Institute’s website. Silly Excuse No. 1. Developing countries economically worse off in 2020. By 2020 are ‘exempted’ from the Protocol Australia’s participation in the Kyoto Protocol is estimated to reduce real GNP Fact 1: Climate change is caused by by 0.51%. If Australia refuses to ratify increased concentrations of greenhouse then the effect of Kyoto would be to gases in the atmosphere and it will be reduce real GNP by 0.30%, so ratification 50 years or more before developing is responsible for a decline in real GDP countries match the pollution of the in 2020 of 0.21%. rich countries over the last two centuries. But how painful would it be to see our Fact 2: In per capita terms developing real GNP reduced by 0.21%? Under countries typically have one tenth to one business as usual Australia’s real GNP twentieth of the emissions of the USA will exactly double on about 1st and Australia. December 2020. According to the model results, if we ratify the Protocol then Fact 3: Although rich countries are overwhelmingly responsible for the will first ‘pick the low-hanging fruit’. If problem, poor countries will suffer more fruit is wanted then more effort If Australia is going to must be expended getting it from the most of the impacts of climate change. meet the target anyway, higher branches. Compared to most why not ratify the Fact 4: The principles of polluter pays other OECD countries, Australia has not yet picked the low-hanging fruit. Kyoto Protocol and and ability to pay mean that a wealthy spare ourselves all of the country like Australia with high This is because fossil fuels in Australia international oppro- emissions should do much more than have been cheap and abundant. poor countries with low emissions. brium. Silly Excuse No. 4. Kyoto is not in our economic interests Silly Excuse No. 2. Our energy exports make us more vulnerable our GNP will not double until the end The Government’s own modelling of January 2021, a delay of eight weeks. concluded that the economic cost of the The greenhouse gas emissions from our This eight week wait before we become Kyoto Protocol in 2010 will be higher energy exports have no bearing on twice as rich is the basis for the repeated if Australia does not ratify the treaty than Australia’s obligations at all. They are stories about the huge economic costs if it does. This is because actions by counted in the country where they we will face. burned. Other countries may decide to other countries (such as Japan reducing import less fossil fuels, but there is Silly Excuse No. 5. Ratifying the Kyoto nothing Australia can do about that, Protocol will result in massive job losses except perhaps to try to sabotage the This eight week wait Kyoto Protocol. before we become twice The studies on which these sorts of as rich is the basis for the claims are based range from the dubious Silly Excuse No. 3. Australia’s fossil-fuel repeated stories about to the ridiculous. For example, the Allen dependence makes it harder for us to cut our the huge economic costs Consulting report which the emissions we will face. Government seized upon suffered from several simple but vital errors. To pick A little thought reveals that in fact the out only two: opposite is more likely to be the case. The cost of reducing emissions depends its coal imports) will have a negative 1. It attributed all claimed job losses to not on how much fossil fuel is burnt economic effect, which we could partially ‘Australian compliance’ with the Kyoto but how efficiently a country burns it. offset if we started to cut our emissions Protocol, yet most of its forecast job If it is used wastefully then it will cost too. losses are due to decisions by less to reduce consumption. governments overseas. Although the modelling concluded that As an analogy, it is sometimes said that we would be better off in 2010 if we 2. It completely ignored the two largest to reduce emissions those responsible ratified, it calculated that we would be tranches of emission cuts in Australia

10 THE AUSTRALIA INSTITUTE that are available at no cost or very low Keeping it in the family cost, namely, accelerated energy efficiency and the end of land clearing. On 6th May the Prime Minister hosted a meeting with the heads of major fossil fuel producing and using firms, including Alcoa, Coincidentally, every one of the errors Edison Mission Energy, BHPBilliton and Boral. A set of meeting and misinterpretations in the Allen notes made by Sam Walsh, Acting Chairman of Rio Tinto, fell off Consulting report had the effect of the back of the proverbial truck. exaggerating the apparent costs to GDP The Prime Minister, flanked by senior advisers and public service and employment of meeting Australia’s heads, opened the meeting by saying he was looking for policy Kyoto obligations. ideas to head off the Tambling report, which his Government had commissioned to consider the future of energy policy. Grant Silly Excuse No. 6. Australian firms will Tambling, a former Coalition senator, recommended the shift off-shore if we ratify extension of the Mandatory Renewable Energy Target (MRET). This was the wrong answer. The aluminium industry makes the loudest threats to move off-shore. The Instead of extending MRET the PM planned to set up a $1.5 six aluminium smelters enjoy very cheap billion technology fund and wanted some ideas that would pass electricity from long-term contracts the “pub test”. Later in the meeting, the Environment Minister signed with state governments. Why Ian Macfarlane said that MRET had worked “too well” in stimulating investment in renewables, especially wind power. Ignoring existing renewable energy, which is commercially available and Respectable corporations raring to go, the Government has convinced itself that we nowadays don’t threaten cannot reduce our greenhouse gas emissions without major to take their dirty technological breakthroughs. This is code for protecting the coal industry, mainly through the promotion of factories to poor coun- geosequestration. tries so they can exploit lax environmental laws. This is why the Government can say that MRET has worked too well and so must be abolished. Minister Macfarlane noted that there had been a “roaring silence” would an aluminium company shift a from industry after the Tambling report, except for the smelter with a 30-40 year life span to a renewables industry which had been “very vocal and in some developing country to escape greenhouse ways the Agenda has got away from us”. Mr Walsh noted: restrictions in Australia, when everyone “He commented that the Sydney Morning Herald and the accepts that developing countries too media had created a problem for Government and there will have to take on emission-reduction was a need to convince the SMH as well as the PM’s ‘pub obligations within a decade or so? test’ as the matter had become very political.” In fact, the greenhouse gas emissions “There was a need”, Minister Macfarlane said, “for the per tonne of aluminium smelted are Government to defend themselves from Mark Latham’s higher in Australia than any other thrust to sign Kyoto and implement a 5% MRET scheme by country, so if Australian smelters shifted 2010". anywhere else global emissions would After further discussion the Minister closed the meeting probably fall. Besides, respectable stressing the need for “absolute confidentiality”. “He said that if corporations nowadays don’t threaten the Renewables Industry found out there would be a huge to take their dirty factories to poor outcry.” countries so they can exploit lax environmental laws. Yet that is how the Another document leaked at the same time was a copy of an Federal Government seems to view email sent by Lyall Howard, PR chief at Rio Tinto and a nephew them. of the Prime Minister, to the big fossil fuel companies and industry associations. It described, two weeks before its release, Silly Excuse No. 7. Australia can still the Prime Minister’s Energy Statement and how industry should participate in international emissions trading react to it. The recipients are instructed to say that industry even if we do not ratify the Kyoto Protocol “welcomes the joint greenhouse program” and that “Alternative policy approaches are against the national interest…”. At best this is wishful thinking; at worst, the Government is wilfully Both documents can be viewed under What’s New on The Institute’s misleading Australian businesses. The website – www.tai.org.au. Continued on page 12

11 THE AUSTRALIA INSTITUTE Institute notes New Publications D. Wilkinson, R. Denniss and A Macintosh, The Accountability of Private Schools to Public Values, Discussion Paper 71, August 2004. C. Hamilton, The Disappointment of Liberalism and the quest for inner freedom, Discussion Paper 70, August 2004 B. Pocock, Work and Family Future: How young Australians plan to work and care, Discussion Paper No. 69, August 2004 R. Denniss, Overconsumption of pet food in Australia, Web Paper, July 2004 C. Hamilton and A. Macintosh, Taming the Panda: The relationship between WWF Australia and the Howard Government, Discussion Paper No. 68, July 2004 H. Pender, Public Policy, Complexity and Rulebase Technology, Discussion Paper No 67, June 2004 H. Turton, Greenhouse Gas Emissions in Industrialized Countries: Where does Australia stand?, Discussion Paper No. 66, June 2004. Forthcoming Publications *Geosequestration: The answer to climate change? *Compensation and property rights *Trade agreements and food safety *Indigenous heritage prtection *Commuting time and family relationships *The impact of HECS debts on fertility *Border tax adjust,ments for greenhouse taxes *Older workers and hidden unemployment

Climate follies from page 11 Silly Excuse No. 9. Australia will meet its from all other sources, and especially the Kyoto target anyway electricity and transport sectors. Australia European Emission Trading System will go close to meeting its Kyoto target explicitly allows the scheme to be linked The normal rules of logic would because the governments of NSW and up with trading schemes in other suggest that if we are going to meet Queensland have been restricting land countries, but only if they have ratified the target anyway, then why not ratify clearing. the Kyoto Protocol. The same goes for and spare ourselves all of the the Kyoto trading system. international opprobrium. This is a Silly Excuse No. 10. Australia contributes question the Government refuses to little to global greenhouse gas emissions answer. This is because emissions from The decline in land the most important sectors (transport This argument has no moral basis. As clearingemissions since and stationary energy) continue to grow an analogy, Kerry Packer could argue that 1990 has masked the rapidly. It is possible for the since his taxes amount to only 0.01% relentless increase in Government to claim that Australia is of all tax collections in Australia, it will emissions from all other on track only because we have been not make any difference if he refuses to sources. playing our special get-out-of-jail free pay his taxes. But we know that Mr card, the famous or notorious Packer’s refusal to pay would undermine ‘Australia clause’ on land clearing. the integrity of the tax system, and Silly Excuse No. 8. Cuts required by the many others would refuse to pay. Kyoto Protocol are too small to make a The decline in emissions from land difference, so why bother? clearing since 1990 has masked the rapid Besides, it is simply untrue that and relentless increase in emissions Australia’s emissions are too small to This claim is astonishing for its gall. worry about. In absolute terms our When former Environment Minister emissions are higher than those of some Robert Hill returned from Kyoto he In absolute terms our major European countries such as France reportedly received a standing ovation emissions are higher and Italy and only 20 per cent lower than from Cabinet because he had secured those of the UK. So if Australia’s than those of some emissions are too small to worry about such a lenient deal for Australia. At major European coun- subsequent conferences Australia has so are those of Italy, France, UK, Spain tries such as France and worked tirelessly to water down the and Canada. n Kyoto agreement. Now they complain Italy. that Kyoto was not tough enough!