‘ History repeats ... again Vol. 65 March 2011 he current hysteria arising from the numbers of boat people arriving in Australian waters is sim- History repeats ... again ply a case of history repeating itself. Andrew Bar- tlettT examines the foundation of Australian attitudes by Andrew Bartlett to boat people and how quickly the ‘key values’ of the Patenting human genes Labor Government have been abandoned. Opinion piece by Senator Bill Heffernan In the ten or so years I spent in the some of the material that documents Senate, migration policy, and espe- decisions and actions by a range of cially asylum-seeker policy, was governments from the rel- Complementary or contradictory area that occupied more of my time atively distant past. Glenn Nicholls’ by Richard Denniss and Andrew than any other. The political and book Deported details a series of Macintosh media obsession about a relatively injustices, some of them deadly, per- small number of asylum seekers who petrated by governments that put this Sort of ‘Made in ’? arrive by boat, and the patholagising fear above all other considerations. by Ben Irvine of this as some sort of major problem (which it is to the asylum seekers, but Professor Klaus Neumann is another certainly not to Australia) was and re- who has written extensively on the, 2012: The year of the carbon tax? at best, ambivalent record of govern- by Richard Denniss mains irrational in the literal sense of the word. ments throughout our history when it comes to attitudes to, and treatment High stakes It is true that this obsession is shared of, refugees. Suffice to say, whilst by David Baker by some of the general public, but there are some positive examples, that is continually fed and validated as of course there are in more recent More hot air? by politicians and media commen- decades, there is no shortage of bad by Josh Fear tators rather than being seen as an examples. area where the provision of some ba-

sic facts into the public debate would ear and anxiety about New publications and Institute be beneficial. the prospect of people notes flowing down into Aus- This irrational reaction to boat ar- tralia from the north was rivals was literally embedded in the F a major factor in galvanising foundations of the Australian nation. the separate British colonies on Fear and anxiety about the prospect the island of Australia to come of people flowing down into Austra- together in a federation. lia from the north was a major fac- tor in galvanising the separate British colonies on the island of Australia to Many of those who have followed the come together in a federation, and toing and froing of political debates has been apparent in many decisions and policies on refugees and asylum made by governments and ministers seekers over the last 20 years or so, ever since. especially those who have actively worked for more effective, efficient, Those who think the current level reality-based administrative and pol- ISSN 1322-1876 of distorted and perverted public icy approaches, would be looking on ACN 061 969 284 policy processes is some sort of un- the current situation with a mixture of ABN 90 061 969 284 precedented low in Australia’s his- despair and resignation. [email protected] tory would benefit from looking into Continued on Page 2 www.tai.org.au History repeats ... again from Page 1

The glass-half-empty view would be finitive ‘key value’ that ‘children, in- to argue that it is well past time for us cluding juvenile foreign fishers and, as a nation to have lifted our game where possible, their families, will not in this area. Backing such an at- be detained in an immigration deten- titude is the disappointment that is a tion centre (IDC)’. People with any result of the rapid backsliding from experience of the then only recently what seemed like some real progress concluded Howard era were well towards a far more rational policy ba- aware that giving a detention cen- sis in the early stages of the Rudd tre any name other than ‘Detention Government under the leadership of Centre’ was all that was needed for then Immigration Minister, Senator a government to publicly assert that Chris Evans. people (especially children) weren’t being kept in a detention centre. So While short of ideal, the new ‘immi- scepticism wasn’t completely absent gration detention values’, which he when these new principles were re- is also when Prime Minister Rudd in outlined in a speech in July 2008, leased. provided a significant step forward effect took the public management of not just in terms of a more efficient, the issue out of the hands of Minister Sadly, the retreat from this new ap- more open, less harmful and less Chris Evans. proach did not take long to appear. It expensive policy approach, but also is hard from the outside to know for But it is still profoundly dispiriting that in terms of trying to move public dis- certain precisely what all the factors it took such a short time for the Rudd course on the issue to a more ratio- were that led to this new approach and then Gillard governments to walk nal level. unravelling so badly. It is hard not to away so completely from this policy While the specifics of the new policy see Kevin Rudd’s decision to high- (and so-called ‘key value’) so that were, as always, somewhat open to light his personal, and very public, we now have well over 1000 children interpretation, the very specific state- request to the Indonesian President kept in immigration detention, many ment by the minister that ‘detention in to intervene to prevent a boatload of them for prolonged periods of time. immigration detention centres is only of 255 Tamil refugees from reach- The promise has been so completely to be used as a last resort and for the ing Australia, diverting them instead broken that the government hasn’t shortest practicable time’ provided to the Indonesian port of Merak, as even bothered to put most of those genuine cause for hope. the key moment when the short-term detained children in places that are politics of the issue once again poi- not labelled a ‘Detention Centre’. Even more explicit, and perhaps soned policy implementation. It is

most welcome, was the very de- probably not a coincidence that this The sense of history repeating is compounded by reports such as that recently released by the Com- ChilOut monwealth Ombudsman into deten- ChilOut, or Children Out of Detention, was formed in August 2001 by tion conditions on . concerned parents and citizens in response to the screening of the The similarities with the criticisms ABC’s 4 Corners exposé on the psychological and physiological break- and warnings in a range of reports from the Howard era are compelling. down six-year-old Shayan Badraie was suffering in the Villawood Im- Perhaps the most telling indication migration Detention Centre. At that time, 856 children were being held of how much things have regressed in indefinite mandatory detention. came with the decision by the dor- Over the next four years ChilOut, along with a number of other groups, mant child refugee advocacy group fought to convince the wider Australian public and policymakers that ChilOut, with a core focus to get chil- detaining children significantly harmed their development, was detri- dren out of immigration detention, to mental to their health and wellbeing and was not good policy for a reactivate so that it could once again take up the fight on an issue it had ev- civilized, caring society to pursue. ery reason to think had been won. ChilOut has recently decided to revive its network of supporters and If one were to take a glass-half-full recruit new volunteers. The group co-ordinates visitors to children in approach, it is reasonable to argue detention and assists with the welfare needs of detained families and that while the current situation with unaccompanied minors. boat-borne asylum seekers is bad, If you are able to assist ChilOut, please visit their website www.chilout. and the levels of unnecessary and org to learn more about how you can be involved unjust human suffering appalling, it Continued on Page 10

2 Patenting human genes

he Patent Amendment (Human Genes and Biological Materials) Bill 2010 has received some criticism but it is merely an attempt to return common sense to the Australian patent system by banning the patenting of material that is naturallyT occurring or isolated from material that is naturally occurring. Senator Bill Heffernan defends the new Bill and explains the reasons for it.

Recent criticism of the Patent rightly been cited as an example of Government conceded that ‘the Amendment (Human Genes and Australia’s contribution to improv- longstanding practice’, which had Biological Materials) Bill 2010 is ing world health, it is irrelevant led to the granting of patents for unfounded as this Bill seeks to re- to this Bill and adds weight to the isolated genomic DNA, was wrong. turn common sense to the Austra- question: do critics of the Bill un- According to the US Government, lian patent system and apply the derstand the distinction between the human gene BRCA 1, at issue law by legislating to ban the patent- discovery and invention? in the case, ‘was not invented’. ing of human genes and other bio- logical materials either isolated or Here are the facts: In Australia, under the passionate naturally occurring. direction of a multi-partisan group First, for nearly 400 years, patents of Senators, the Senate Commu- have been granted for inventions, The Bill will not prevent or reduce nity Affairs Reference Committee not for discoveries. No one has pat- investment in the biotech industry. investigated gene patents and their ented the discovery of the sun, the It is very narrow and only seeks impact upon Australia’s medical moon and the stars. Just as Isaac to clarify and apply existing patent and research sector and the Aus- Newton couldn’t patent the law of law. tralian healthcare system. The in- gravity and Albert Einstein couldn’t quiry concluded by strongly reject- patent the formula E=mc2, neither ing the ‘isolation’ rationale. saac Newton couldn’t pat- could Francis Crick and James ent the law of gravity and Watson patent the DNA double he- Far from shackling ‘Australian sci- Albert Einstein couldn’t pat- lix. A human gene made up of DNA entific research’ as claimed, the ent the formula E=mc2, and I is a product of nature, not an inven- Patent Amendment Bill 2010 will neither could Francis Crick and tion. rejuvenate medical and scientific James Watson patent the DNA research in this country by giving double helix. Secondly, all science agrees that Australian scientists and doctors there is no material difference be- unfettered access to what Presi- tween genes that are naturally oc- It was a little over two years ago, on dent Clinton and British Prime curring or isolated from naturally 16 October 2008, that I first rose in Minister Blair called the ‘raw fun- occurring. Thus, merely removing the Senate to bring this important damental data of the human ge- genes from their natural environ- matter to the Senate’s attention. At nome’. the time, I questioned the legality of ment by isolating them does not a practice which had allowed Myri- change what they are; nor does So concerned were they by the pat- ad Genetics and its exclusive Aus- it change their function. Regard- enting of human genes that when tralian licensee, Genetic Technolo- less of where they are located, test Continued on Page 12 gies Limited (GTA), to monopolise tube or otherwise, it does not make human genes BRCA 1 and BRCA them inventions. 2, genes linked to breast and ovar- According to the US Federal Court ian cancers. No one invented these Judge Sweet, ‘many scientists in genes. Yet, relying on four pat- the fields of molecular biology and ents granted by IP Australia, on 8 genomics have considered this July 2008 Genetic Technologies practice a lawyer’s tric; and, I might attempted to close down all pub- add, a banker’s feast contrived at lic laboratory genetic breast and great cost to human health and the ovarian cancer gene testing when public purse. it sent a letter threatening to sue each of them for patent infringe- Thirdly, the US Government agrees ment. I said then, and I say now, with Judge Sweet on the issue of that this ‘is a disgrace’. isolation.

While the cochlear hearing implant In a recent court brief filed by the is a wonderful invention, which has Department of Justice, the US

3 Complementary or contradictory

ichard Denniss and Andrew Macintosh debate the efficacy or otherwise of the government’s policies designed to complement the operation of a carbon price. They conclude that, instead of seizing the opportunity to develop bet- terR and more coherent policies, the government has attempted to hide the flaws in the existing ones by ramping up expectations of what a carbon price can deliver.

Well-designed, complementary a carbon price policies play an important role in is introduced or any attempt to drive significant redundant. This greenhouse-gas emission reduc- suggests that the tions in Australia. And contrary Gillard Govern- to popular belief, the policies that ment believes are most effective in driving down that the specific greenhouse-gas emissions actu- objectives of ally raise revenue rather than cost the policies to the budget money. be scrapped or wound back are That said, there is no doubt that best met by a some complementary policies are broad-based car- so poorly designed and implement- bon price rather ed that it is in neither the environ- than well-target- ment’s nor the taxpayers’ interests ed complemen- for them to be maintained. tary measures.

The Gillard Government has re- Ideally, this situa- cently scrapped, or wound back, a tion could have provided an oppor- such policies to be abolished in the range of policies designed to help tunity for the government to rethink name of cost-cutting; they need to reduce greenhouse gases in order the role of complementary mea- be replaced with policies that are to ensure that the budget returns sures and to develop a more coher- genuinely transformative of the quickly to surplus. These policies, ent suite of policies with the poten- Australian car industry. including the Cleaner Car Rebate, tial to deliver lower-cost abatement Green Car Innovation Fund, Green as well as potential spillover ben- An irony of the decision to make Start Program (the replacement to efits in the form of knowledge, ex- savings at the expense of climate the Green Loan Program, ironically ports and jobs. policies is that far greater savings could be made by abolishing the However, in attempting to conceal billions of dollars spent each year ontrary to popular be- the design flaws of some of its on contradictory policies that serve lief, the policies that are complementary measures under to encourage the consumption of most effective in driv- the imagined need to find budget- fossil fuels. ing down greenhouse C ary savings, the Gillard Govern- gas emissions actually raise ment has instead further muddied The greater irony, however, is that revenue rather than cost the the policy waters. Rather than help while the Prime Minister cited the budget money. inform the public that a carbon impending arrival of a carbon price price has an important, but limited, as causing a wide range of climate named as it was scrapped before it role to play in driving behaviour policies to become redundant, that started), and the Solar Homes and change, the government has in- same carbon price should deliver Communities Plan, are often called stead inflated expectations about between $10 and $20 billion in ad- ‘complementary policies’ as they what a carbon price can achieve ditional revenue each year. are designed to complement the as an excuse to avoid scrutiny over Such a new source of revenue operation of a carbon price, as yet the design of its existing comple- could easily fund the undefined. mentary measures. flood reconstruction several times The explicit rationale provided by Policies such as the Green Car over, unless of course the govern- the Prime Minister for her decision Innovation Fund were little more ment is again planning to give ev- to wind back, or abolish, funding than a gift from Australia’s taxpay- ery cent of new revenue away in for these programs is that they will ers to the Australian car industry. compensation to those it is seeking either become more effective after But what is needed is not simply for to tax. §

4 Sort of ‘Made in Australia’?

ustralians like to buy Australian-made goods as it allows them to feel that they are supporting their country, its products and local jobs. There are also safety aspects to consider. However, as Ben Irvine, points out, there is some confusionA about what exactly ‘Australian made’ means as was demonstrated by a survey conducted recently by The Australia Institute.

The ubiquitous ‘Australian Made’ But cases of ambiguous country-of- kangaroo within a triangle was origin-labelling are causing many he existing labelling launched in 1986 by the Hawke consumers to be unclear as to how rules for ‘Made in Aus- Government and is overseen by the Australian the product they are tralia’ mean that foreign not-for-profit organisation Australian buying actually is. This is because Tcontent can be masquer- Made Campaign Limited (AMCL). the ‘Made in Australia’ claim refers aded as local content as long The logo is primarily used with one only to the processing of the prod- as it is ‘substantially’ mixed, of three claims: Australian Made, uct rather than to the source of the blended, seasoned, cured or Product of Australia or Australian ingredients. Country-of-origin lo- homogenised here. Grown. gos displayed on products must be consistent with the country-of-origin onstrates the consumer confu- provisions in the new Australian sion over what ‘Made in Australia’ Consumer Law. In order to claim means. Three in four Australians are that a product is ‘Made in Austra- not certain about the meaning of the lia’ or ‘Australian made’, the product term, despite a recent advertising must pass two tests: it must be ‘sub- campaign to encourage people to stantially transformed in Australia’ buy locally produced goods from the during the manufacturing process organisation AMCL. Only a quar- and at least 50 per cent of the costs ter (27%) of respondents answered of production must be incurred in the question correctly by indicating Australia. The more comprehensive that a product must be produced or label, ‘Product of Australia’, means manufactured mostly in Australia in all the significant ingredients must order to be labelled ‘Made in Austra- originate here and almost all the lia’. A higher proportion (34%) said Economists and policymakers may manufacturing or processing must that something must be produced debate the implications of buying be done in Australia. or manufactured entirely in Aus- local but it is clear that many Aus- tralia, which is not the case. Other tralians see buying Australian prod- The existing labelling rules for respondents thought that a product ucts as helping to support local jobs ‘Made in Australia’ mean that for- must either be made from Australian and the economy while alleviating eign content can be masqueraded ingredients or components (13%) or concerns about quality and safety as local content when it has been produced by an Australian-owned standards. A recent survey by The mixed, blended, seasoned, cured company (20%). Neither of these Australia Institute shows that many or homogenised here. This can ef- factors is relevant in determining Australian consumers prefer to buy fectively mislead customers who which products can be labelled Australian products. Three in four reasonably expect that the main ‘Made in Australia’. survey respondents said that they ingredient in the ‘Australian made’ either sometimes (44%) or always product is Australian. Examples are The debate about country-of-origin la- (30%) try to buy products that are bacon cured in Australia from for- belling has been heating up recently. made in Australia. A majority (55%) eign ham, Australian crumbing on Continued on Page 7 also said that they would be willing foreign prawns, Australian batter on to pay more for a product if it had foreign fish fillets and blended fruit been made in Australia. juices with a high foreign content. AMCL is in the process of amend- t is clear that many Aus- ing its Code of Practice so that pro- tralians see buying Austral- cesses such as these are not con- ian products as helping to sidered substantial transformations. Isupport local jobs and the The ‘Australian made’ logo is a cer- economy while alleviating con- tification trademark so any changes cerns about quality and safety require government approval. standards. The Australia Institute survey dem-

5 2012: The year of the carbon tax? pponents of the need to put a price on carbon label ’s latest ini- tiative as a ‘great big new tax on everything’. Those who advocate a carbon price are not yet sure whether it is a tax or something completely different andO the Swiftian argument is obstructing the case for change. Richard Denniss ex- amines the politics behind the debate.

Prime Minister Julia Gillard and a fixed-price emissions trading Opposition Leader Tony Abbott scheme and a carbon tax. Al- are engaged in a fight to the po- though opponents of the need to in- litical death over the introduction of troduce a price on carbon pollution a carbon tax (or fixed-price emis- insist on calling the scheme a ‘tax’, sions trading for those worried its advocates remain divided as to about the ‘T’ word). It is difficult to whether it is or not. Such division imagine that either leader will be is, not surprisingly, making it harder able to spin their way out of losing to prosecute the case for change. the fight they are currently engaged in, no matter how hard they try. So, which is it? While the distinction between taxes, levies, surcharges ne of the most confus- and fees has been deliberately ing elements of the pro- blurred by politicians from across posed scheme is the dif- the spectrum, the distinction be- ference, if any, between tween a tax and an emissions trad- O ing scheme has previously been a fixed-price emissions trading scheme and a carbon tax. relatively clear-cut. A carbon price relies on government setting a fixed price for pollution and then letting The political stakes couldn’t be the market determine its desired higher but the stakes for the climate level of pollution while an emissions are, of course, higher still. Unfortu- trading scheme relies on the govern- nately, the voluminous coverage of ment setting a quantity of allowable what the proposed scheme means pollution and then letting the market than later, while postponing what for the 2013 election dwarfs the set the price for pollution permits. it disagrees on, namely the emis- coverage of what it means for the sions reduction target for 2020. environment and economy, not to The current difficulties with no- mention the people, of the late 21st menclature are, however, the The result of this pragmatic ap- century. direct result of some good poli- proach to policy within the MPCCC tics from all involved. Put simply, is, however, a degree of policy While the details of the proposed one of the main reasons that the confusion in the broader public. scheme have yet to be negotiated, Rudd Government’s Carbon Pol- Given the preference among the let alone legislated, the so-called lution Reduction Scheme (CPRS) MPCCC for ultimately implement- Multi-Party Climate Change Com- failed was that, while a majority ing an emissions trading scheme in mittee (MPCCC) has released what of the Parliament agreed that an three to five years, there is a de- it calls its agreed architecture, the emissions trading scheme was re- termination to refer to it as such in key features of which include: quired, a majority could not agree the interim. However, the inability • A starting date of July 2012 on the number of pollution permits to agree on an emissions reduc- that should be auctioned. What the tion target means that the MPCCC • A fixed carbon price for the first three to five years of operation MPCCC is proposing, however, is must instead mandate a fixed pollu- before a transition to a flexible that the Parliament focus on what tion price during the interim period price scheme if and when 2020 it agrees on first, namely the need and then sell as many permits as emission reduction targets can to introduce a price sooner rather the market demands at that price. be agreed carbon price relies on government setting a fixed price for • Compensation for households pollution and then letting the market determine its desired and industry. level of pollution, while an emissions trading scheme relies One of the most confusing ele- on the government setting a quantity of allowable pollution ments of the proposed scheme A and then letting the market set the price for pollution permits. is the difference, if any, between

6 In effect, the MPCCC is proposing While the details of these design to introduce a carbon tax until such features are yet to be negotiated by time as a majority of Parliament can the MPCCC, the broad parameters agree on what constitutes an effec- are beginning to shape up; a car- tive emissions reduction target for bon price of around $25 a tonne, 2020 and beyond. Given that Julia industry compensation that is lower Gillard ruled out introducing a car- than that provided under the CPRS, bon tax before the 2010 election, it and a more streamlined and, hope- is likely that choice of words rather fully, more integrated approach to than the actual impact of the policy complementary measures. The big on greenhouse-gas emissions will unknowns are whether the scope of continue to dominate the public the scheme will be broad enough to ‘debate’. include petrol and how the house- hold compensation scheme will be For those more interested in green- structured. house-gas emissions reductions than movements in the fortnightly A high carbon price combined with opinion polls, the big issues that low levels of polluter assistance will are yet to be resolved are: set Australia up to achieve relatively ambitious emission reduction targets • the size of the carbon price over the next decade while leaving • the breadth of the scheme’s enough money to help insulate the Over the coming months, the big coverage most vulnerable groups from the in- questions will be what constitutes evitable adjustments. A low carbon the definitions of ‘a high carbon • the design of the compensation price with generous compensation price’, ‘vulnerable groups’ and package to polluters, however, will virtually ‘struggling industry’. And the big an- • the design of the complementa- rule out ambitious emission reduc- swers will be coming from represen- ry measures that augment the tion targets and reduce the funds tatives of the most finely balanced role of the carbon price. available to those most in need. Parliament in Australia’s history. §

necessary for production must be nophon, AMCL and the Greens are Sort of ‘Made in Australia?’ from Page 5 obtained from overseas. insisting that the recommendations AMCL and other country-of-origin be extended further for consistency. label groups such as OZcompliance The Council of Australian Govern- and , are all calling for a ments (COAG) and the Australia and The Australia Institute’s evidence tightening of the Australian Consum- Food Regulation Min- of the common misunderstanding er Law to clamp down on misleading isterial Council (Ministerial Council) of country-of-origin claims gives product labelling. agreed to undertake a comprehen- credibility to calls for reform. There sive review of food labelling law and is clearly room for improvement in In 2009, the Greens, Senator Nick policy. The review panel, headed by helping consumers make informed Xenophon and Senator Barnaby Dr Neal Blewett AC, released its fi- choices. § Joyce introduced a private member’s nal report on 28 January 2011 (www. bill seeking amendments to food la- foodlabellingreview.gov.au) with 61 belling standards (www.truthinlabel- recommendations for reshaping ling.com.au), which would require Australia’s food regulations. With re- manufacturers to provide more accu- gard to country of origin, the Panel rate detail on labels about imported ‘favours the development of an un- content. It is worth noting that some ambiguous and consumer-friendly products, which qualify for the ‘Pro- Australian-origin claim based on the ducty of Australia’ claim, could suffer ingoing weight of the various compo- from this kind of reform, for example nents of the food, excluding water’. Australian cheese where the rennet However, many such as Senator Xe-

ases of ambiguous country-of-origin labelling are causing many consumers to be unclear as to how Australian the prod- uct they are buying actually is, because the ‘Made in Aus- Ctralia’ claim refers only to the processing of the product rather than to the source of the ingredients.

7 High stakes

Poverty traps from Page 7 he states are caught on the horns of a dilemma over the question of gambling because most of them would not be able to balance their budgets without the revenue it brings them. David Baker asks, however, if they ever factor in the negativeT social, health and economic costs of gambling when they are doing their sums.

The political will to address the Some states are more dependent negative social, health and eco- on tax revenue from gambling than nomic aspects of gambling, and others as illustrated in Table 1. pokies in particular, was ratcheted is the least de- up last year with the election of the pendent on gambling revenue Independent member for Denison, while, in , gamblers contrib- Andrew Wilkie. He made his sup- uted $1.65 billion to the state bud- port of a minority Labor Govern- get in the financial year 2008–09. ment contingent upon its reaching The Northern Territory Govern- an agreement with the states on ment has the highest proportion the implementation of a manda- of overall tax revenue coming tory pre-commitment scheme (re- from gambling, but, according to quiring poker-machine gamblers the Productivity Commission, this to set a spending limit), otherwise is most likely due to ‘the “export” legislating for such technology in of gambling services to non-state pokies by 2014. His presence in residents—through tourism and the lower house has added weight online wagering’. Overall, gambling While defining problem gambling to the existing pokies campaign of taxes contributed more than $5 bil- is difficult and has been described upper-house member and fellow lion to state and territory coffers in as ‘abstract’ and ‘complex’, in 2010 Independent Nick Xenophon. 2008–09. the Productivity Commission was sufficiently confident to report that ithout the revenue Without this revenue, many of the between 0.5 and one per cent of from gambling, predicted state budget operating sur- gamblers suffer ‘significant prob- many of the pre- pluses would have been deficits. lems’ and a further 1.4 to 2.1 per dicted state budget cent are at moderate risk and thus W In Victoria, the forecast operating vulnerable to problem gambling. operating surpluses would have surplus of $828 million would have been deficits. This small percentage of gamblers been an operating deficit of almost as accounts for an average 42 per much ($821 million). The anticipated cent of gambling-machine spend- However, with state governments budget surplus of ing—the most popular form of the beneficiaries of a reliable rev- $268 million would have been a defi- gambling amongst people identi- enue stream from gambling taxes cit of $1,384 million. fied as problem gamblers. on ‘player loss’, there is likely to be would have been expecting a deficit considerable resistance in agreeing of more than $900 million without The question of how states and ter- to significant pokies reform. On av- gambling revenue, and in ritories balance the social, health erage across the country, gambling a budgeted surplus of $105.7 mil- and economic costs of potentially tax revenue represents 10 per cent lion would have been a more modest addictive consumption with a de- of the revenue base for state and ter- $11.7 million. Yet for Western Aus- pendency on the revenue gener- ritory governments; put another way, tralia, its predicted budget surplus of ated from gambling, along with to- gambling generates one in every ten $2.1 billion would have been reduced bacco and alcohol, is an important dollars the states have to spend. by less than one per cent. one.

Table1: Gambling tax as a percentage of tax revenue (2008–09) Continued on Page 11

State/territory NSW VIC QLD SA WA TAS NT ACT ALL Proportion of total 9% 14% 11% 13% 3% 12% 16% 6% 10% revenue Value ($m) 1,652 1,649 922 407 180 94 73 50 5,207

Source: ABS, Taxation Revenue, Australia 2008–09, Cat. No. 5506.0.

8 More hot air?

here is substantial opposition on the part of Australians to the approximately $750 million a year they pay in ATM fees. Instead of bringing down prices, the 2009 reforms have meant that owning an ATM is now even more profitable thanT it used to be. Josh Fear examines the consequences of high ATM fees for aver- age Australians based on a survey conducted by The Australia Institute.

Each and every day millions of consumers are charged ATM fees not necessarily in the best interests Australians pay financial institu- twice in the one transaction. In this of consumers. Two in three survey tions to access their own money. situation, the cost of a balance en- respondents (66%) reported paying Some pay more while others pay quiry is effectively $4. This ‘double- for purchases with a credit card to less, depending on the way they whammy’, in essence, penalises avoid ATM fees, but a substantial do it. Sometimes, as with EFTPOS financially responsible behaviour. minority (18%) do so without paying transactions, the price consumers off their credit card in full. These pay for their own money is largely A recent report from The Australia people then end up paying high invisible, being factored into the Institute, The Price of Disloyalty: rates of interest on their purchases, prices of goods and services. In Why competition has failed to lower effectively negating any savings other cases, the cost of using your ATM fees, shows that Australians they might have made on ATM fees own money is embedded in are still paying around $750 mil- and, in the process, delivering ad- fees, or else in forgone interest lion a year in ATM fees. Despite ditional revenue to credit-card pro- from transaction accounts with reforms in 2009 designed to lower viders. The perception that using negligible rates of interest. prices and bring competition to credit cards can help reduce ATM the sector, third-party ATM fees fees may therefore serve to exac- One of the most expensive ways typically remain at $2 or higher. In erbate the problems with personal for Australians to access their own the words of the Reserve Bank of debt that many Australians experi- money is by using a third-party Australia (RBA), the $2 fee has be- ence. automatic teller machine—that is, come a ‘benchmark’. an ATM not provided by their own Our survey research indicates that nstead of bringing down bank. In most cases, third-party prices, the 2009 reforms ATMs charge $2 for every trans- there is substantial public opposi- tion to ATM fees. The great major- to the ATM system have action, including checking one’s actually meant that own- account balance. In other words, ity of Australians (82%) believe it I ing an ATM is now even more $2 is the price consumers pay ev- is unfair for to charge $2 to use their ATMs. Survey findings profitable than it was prior to ery time they are disloyal to their the reforms. bank. also corroborate the RBA’s claim that consumers have changed their If they first check their account behaviour in order to avoid paying Survey results also show that balance and then withdraw cash, third-party ATM fees now that they young people bear a disproportion- are more aware that such fees ex- ate burden of ATM fees. One in four ist. survey respondents (26%) reported paying an ATM fee of $2 at least In the year following the 2009 re- once in the past week, but some forms, the use of third-party ATMs 40% of those aged between 18 and fell 18 per cent, delivering consum- 24 years had done so. People un- ers savings of some $120 million. der of 25 typically earn less Virtually all these savings were the than those who have been in the direct result of consumers deliber- workforce for longer, meaning that ately avoiding foreign ATMs, even ATM fees would constitute a much though behaviour change was higher proportion of income for never an explicit objective of the younger people than for other ATM RBA’s reforms. But there is only so users. Given that the use of third- much that consumers can do when party ATMs declines with age, it is ‘market forces’ continue to let them possible that children with a bank down. account are also paying a higher- than-average share of ATM fees. The increased transparency of Similarly, people on low incomes ATM fees may have led to another form of behaviour change, which is Continued on Page 11

9 History repeats ... again continued from Page 2

is not hugely worse than at some oth- bott-led Opposition, which is clearly er periods of our history. And there looking for every chance to run a CHANGE OF ADDRESS are still some positive signs and ad- ‘soft-on-illegal immigration’ line, no vances from the last few years that matter how inaccurate or dishonest should both be acknowledged and their attacks might be. The Australia Institute defended. has a new address. In Another recent government an- early March, the Institute The scrapping of the iniquitous, nouncement also gives cause for moved from its location in harm-inducing, family-destroying hope that the tide may be slowly Manuka to the campus of Temporary Protection Visa by Min- turning back in a sensible direction. the University of Canber- ister Chris Evans was very positive This is the new policy that overtly and ra in Bruce, ACT. and very important. This position strongly supports multiculturalism as has been maintained, and there is no a fundamental and positive underpin- The new physical address sign of this very important and posi- ning of Australian society. Whilst it is is: tive decision being reversed (and no too early to judge how strongly this reason to think that will change). will be promoted and implemented, Level B, Building 23 the opportunity it presents is real and University Drive South important. University of Canberra ACT 2601 Multiculturalism of course is about far more than the treatment of and The mailing address is: attitudes towards asylum seekers. It is certainly more than possible that PO Box 5096 asylum seekers will still be treated University of Canberra as being fundamentally outside the BRUCE ACT 2617 multiculturalism framework of gov- ernment. Phone: 02 6206 8700 But the decision of the government Fax : 02 6206 8708 to wax ‘loud and proud’ on an issue that it had been relatively quiet about Email addresses remain since Kevin Rudd was first elected, the same. does provide advocates of compas- sion and reason with an opportunity. Very recently, the new Immigration The federal government’s decision forward its own positive alternative, Minister Chris Bowen reintroduced to go on to the front foot on this is- provides an opportunity which, I be- legislation, which had lapsed under sue, at least in the early stages since lieve, justice activists and advocates the previous Parliament, to bring in the multiculturalism policy has been should make the most of. Effective a formal process for assessing the released, could also indicate that advocacy does not just involve high- complementary protection needs we might finally have seen the new lighting the failures and broken com- of an asylum seeker. That is, where low-water mark in debauched de- mitments of government; it also in- people don’t fit into the precise and bate below which one of the major volves recognising positive decisions somewhat confined criteria outlined parties will still not go. The flagrant and actions, and applying pressure in the Refugee Convention but would hate-mongering by a number of se- to maintain and build on such com- still face serious dangers along nior frontbenchers aimed mitments. We owe it to those who the lines described in other human at inflaming attitudes and increasing cannot speak for themselves, the rights conventions if they were to false beliefs about asylum seekers many who at this very moment are be returned to their country of ori- and Australian Muslims has reached being hidden away and harmed, to gin. Whilst this Bill simply brings in a new depths in recent times, the most use every opportunity to continue far more efficient, transparent, con- extreme examples produced by Sen- to push for progress, as well as to sistent and speedy process for as- ator Corey Bernardi, Tony Abbott’s defend against regressiveness. § sessing wider humanitarian risks for own Parliamentary Secretary. asylum seekers, it will nonetheless The Labor Government’s decision Andrew Bartlett is a Research Fellow

provide an obvious target for an Ab- to stand up against this, and to put with the Migration Law Program at

the ANU. He was Senator and immi- gration spokesperson for the Austra- ffective advocacy does not just involve highlighting the fail- lian Democrats from 1997–2008, and ures and broken commitments of government; it also in- Greens candidate in the seat of Bris- volves recognising positive decisions and actions, and apply- bane at the 2010 federal election. Eing pressure to maintain and build on such commitments.

10 More hot air? continued from Page 9

nesses that facilitate this have been able to consumers and its stated listed on the stock exchange. commitment to price competition.

So why have the reforms failed? A third factor contributing to ATM Partly because ATM fees are not fees is that many machines con- yet transparent enough to foster tinue to enjoy what might be called real price competition. Information a local monopoly. Even if prices about the cost of using an ATM were fully transparent to consum- is ‘embedded’ in the transaction ers (which they are not), in many rather than being apparent before cases there is only one ATM in a the transaction is started. Unlike given location. The nearest alter- motorists, who can see the price of native ATM may be within walking unleaded petrol as they approach a distance, in the next suburb, or service station, ATM users cannot even hundreds of kilometres away. know the cost of using an ATM in The farther away an alternative advance. In the mind of someone ATM is, the less any competitive seeking to shop around on price, pressures can be expected to ap- information about the cost of using ply. And even if a cheaper ATM is a third-party ATM simply comes ‘just around the corner’, consumers are likely to pay more in ATM fees too late to be of practical use. may not necessarily be aware that this is the case. as a proportion of their incomes This is why the government should than people who are financially require that ATM owners display better off. Although free withdrawals are the cost of foreign-bank transac- widely available at ATMs in other Instead of bringing down prices, tions prominently on the outside countries, Australian consumers the 2009 reforms to the ATM sys- of their machines. Potential users continue to get a raw deal. The tem have actually meant that own- could then see at a glance what RBA argues that market forces will ing an ATM is now even more they will be charged if they use that eventually force prices down, but profitable than it was prior to the ATM. we have been waiting almost two reforms. Independent operators years for this to take place. It is can now expect to generate twice ne of the most ex- time for the government to serious- as much revenue from the same pensive ways for ly consider imposing price controls number of transactions because Australians to access on the ATM system, particularly of the removal of interchange fees their own money is where ATM owners enjoy a local imposed by financial institutions on O monopoly. by using a third-party auto- ATM operators. matic teller machine. The sudden jump in the profitability Moreover, fees for balance enqui- of ATM ownership has meant that Another explanation for ATM fees ries should be abolished entirely the number of ATMs has increased, remaining so high is that the recent as they serve to discourage re- rents for ATM sites have risen, and reforms were intended to ensure sponsible financial behaviour by opportunities to invest in individual that ATM owners had sufficient fi- effectively doubling the cost for ATMs have even emerged. To date, nancial incentive to maintain and cardholders who wish to know how the benefits of reform have accrued add to the existing ATM stock. This much money is in their account be- exclusively to ATM owners, and has undoubtedly happened: the fore withdrawing cash. If the major particularly to owners that can at- typical fee of $2 is well in excess banks are serious about the impor- tract many ‘foreign’ users. In fact, of the cost of providing the service. tance of financial literacy, they will the provision of ATMs is such a But there is a fundamental tension support such a change. Or is their lucrative market that investors can between the RBA’s desire to in- talk about social responsibility just now ‘buy’ their own ATM and busi- crease the number of ATMs avail- more hot air? §

High stakes from Page 8 how enthusiastic they will be in act- Indeed, although supporting gam- ing on Recommendation No. 78, bling taxes, the Henry Tax Review considering the policy contradic- recommended that: tion. Governments should consider the allocation Increasing resources to address of responsibilities for the regulation and tax- ation of gambling, with a view to minimising problem gambling might be good conflicts in policy-making between revenue- policy in one context, but in another raising and addressing problem gambling. policy context it equates to spending money to reduce government rev- While it’s probably a sure bet that enue. How much political sway the the state and territory governments Independent Andrew Wilkie ends up will continue to rely on gambling having over reform of gambling in revenue, the odds are longer on Australia is another bet altogether. §

11 Patenting human genes from Page 3

the human genome was decoded, the US biotechnology industry. As who seek to use this data for the they announced that ‘raw funda- opposed to jeopardising Australia’s betterment of healthcare. mental data on the human genome research capabilities, the Bill will The passage of this Bill will refocus … should be made freely available reduce research costs by stopping and strengthen Australia’s inven- to scientists everywhere’. the private taxation of the raw fun- tive scientific and medical minds damental data of the human ge- by permitting the use of this data in During the ’s two- nome. ways that are truly inventive, such year investigation, calls for legisla- as in new diagnostics, treatments tive action to stop the patenting and, hopefully, cures. of genes came from respected in- dustry bodies such as the Cancer There are many supporters of the Bill, Council Australia, the Australian including eminent Australian doctors, Medical Association, the Royal scientists and medical organisations. Australasian College of Surgeons Professor Ian Frazer, one of the in- and the Human Genetics Society ventors of Gardasil, the cervical can- of Australasia. Both Westmead cer vaccine, is one of many who have Hospital and the Peter MacCallum joined the scientific chorus crying out Cancer Centre had been threat- for patent-law reform. ened with legal action over the pro- vision of a genetic test for breast It is what the Australian medical and ovarian cancers. community desperately called for, and precisely what the Bill does. It’s all very well for some people But, more importantly, this Bill will to claim that the Bill will be ‘enor- advance affordable wellbeing and mously detrimental’ to Australia’s provide long-term benefits for the hu- biotechnology industry, but the ac- man race regardless of social, eco- cusation is totally misinformed and nomic and racial backgrounds. § unfounded. Senator the Hon. Bill Heffernan, Drawing on the comparative prec- It will promote, not stifle, research Liberal Senator for NSW: Opinion edent, the US Government doesn’t by removing the threat of patent Piece, The Australian, 21 Decem- think a similar approach will harm infringement on those researchers ber 2010 .

New publications Institute Out and About R Denniss and A Macintosh, • Executive Director Richard Denniss was invited to New Zealand in Complementary or contradictory: An February to deliver the keynote address at a conference in Hampden analysis of the design of climate examining economic growth and indicators of progress. While in policies in Australia, Policy Brief 22, Hampden, Richard also participated in a high-profile debate February 2011. opposite the Labour Party and enjoyed a traditional Haangi dinner. J Fear, The price of disloyalty: Why • Richard provided evidence to the Senate Economics Committee competition has failed to lower ATM inquiry into the flood levy bill in March. fees, Policy Brief 23, February 2011. • Deputy Director Josh Fear discussed ‘The politics of achieving better work/life balance’ at the University of South Australia’s Centre for Work + Life Seminar Series in in March. Opinion pieces • Richard will participate in a panel discussion at the National R Denniss, ‘Power to the people, Sustainable Food Summit in Melbourne in April. The panel will simply’, The Canberra Times, 11 consider the topic: ‘Should food be treated purely as a tradeable commodity, left to market forces, or as a fundamental human need December 2011. and essential to stable societies?’ R Denniss, ‘High profits not high taxes driving shoppers online’, 12 Institute in the media January 2011. • The Institute’s research paper The price of disloyalty: Why competition has failed to lower ATM fees generated substantial R Denniss, ‘GST $1000 threshold: high-profile media coverage including ABC Radio National retailers share in more trouble than Breakfast, Sky News Business Channel, ABC 2 Breakfast, Channel Harvey’s image’, Crikey, 20 January 7 Sunrise and all the major daily newspapers. 2011. • Richard was invited to provide his view on the Multi-Party Climate J Fear, ‘Rebuilding Australia’s retail Change Committee’s announcement of a framework for a price on industry’, 20 January 2011. carbon on the ABC’s PM program. J Fear, ‘Owning an ATM is money in • The Canberra Times has recently agreed to give Richard a regular, the bank’, The Punch, 17 February fortnightly column. 2011.

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