Will Australia ever have a Ron Paul?
This question is one that brings a mix of emotions to Australian libertarians. For me it draws emotions of optimism for Australia’s political future, but on the other hand I feel overwhelmed by the prospect of how far we may have to go before we can boast a strong libertarian presence in Australian politics. When I ask the question whether Australia will ever have a Ron Paul, I am referring to whether Australia will ever have such a prominent representative of libertarianism in mainstream political debate. I think a better question to ask though is ‘How will Australia get a Ron Paul’.
Ron Paul stands out internationally as being on the forefront of bringing the libertarian movement into mainstream politics, but we are not fortunate enough as of yet to have such a prominent figure in Australian politics. Perhaps Ron Paul’s greatest contribution to the Libertarian cause is the fact that he has been able to be part of the debates, giving people the world over access to the ideas of free market economics and personal liberty. Ron Paul’s success comes not from his ability to communicate his policy perhaps, but from the mere fact that he has been able to communicate his policy. I know many of you will argue that he has not received equitable coverage in his campaign, but it cannot be denied that his bid for presidency has had far reaching effects on libertarian thinkers all over the world, and if even he doesn’t receive the Republican nomination, he will have done that, which is no small accomplishment.
What has given Paul strength is that he was able to make his case in the mainstream media and political scene, which would have been exponentially harder without the backing of a mainstream party. In Australia it is almost unthinkable that a libertarian candidate could arise from the Liberal Party, arguably the closet Australia has to an economically conservative mainstream political party.
As mainstream political party members in Australia, we do not get the privilege to be so involved in process of choosing party leadership as our American counterparts. As members of a party we are expected to support whoever gets appointed behind the closed doors of caucus. The system of choosing party leaders in Australia will always favour the more populist of politicians, without even giving a platform for the rare ideological candidates to be heard. The American system is by no means perfect, but it certainly makes it possible for more ideological candidates to be heard.
There is no doubt that there is a wealth of libertarian thinkers in Australia, but there is a mixed consensus on how to advance the libertarian movement in mainstream politics and what needs to be done to get us there. If we are to have an Australian Ron Paul, it is going to come about in either from one of the smaller parties, or after a radical change has occurred within the mainstream political parties. It can be argued that if a prominent figure representing libertarianism is going to arise anytime soon, they are probably already involved in politics, and if they are anything like Ron Paul, they are earning a tenure representing a mainstream political party. Although neither of the mainstream parties are very libertarian in their policies, they do provide a framework for success, success that can give opportunities to ambitious, ideological up and comers. Working within the framework of the mainstream parties holds certain advantages that currently are not available within any of the minor parties, but the advantages aren’t as great as they are in the U.S. One thing is clear though, that for there to be a libertarian presence in Australian politics, libertarians need to make an effort to be present in Australian politics. You can argue all day about economic theory, but at the end of the day it doesn’t make us any closer to having a Ron Paul if you aren’t championing the rationality of libertarian philosophy. Ron Paul has done us a huge favour by representing the cause, but he wouldn’t be able to do so if he didn’t fight to make himself heard.
Paging All Pro-Liberty Students!
Last week I had the privilege of attending the amazing, brilliant, and wonderful annual conference of Students for Liberty, which attracted well over 1,000 libertarian students from not only the U.S., but around the world.
The success of Students for Liberty is an amazing story: in just five years they have grown from nothing to having 800 clubs on campus in the U.S., presence in many European cities, regional conferences both in Europe and the U.S., and of course, their main annual conference with – again – over 1,000 students in attendance! Clearly they are doing something right!
As readers where would know, options for libertarian students in Australia at present remain rather limited: only a couple of universities have anything resembling libertarian clubs (and even these are rather new), so many students do not have the opportunity to develop their libertarian ideas or receive training in effective advocacy as part of a network and support-structure of like-minded individuals.
As such, I am incredibly excited about the fact that Students for Liberty has just launched a new program to train and provide resources to libertarian future leaders. Called their Global Charter Teams Program, this is an amazing opportunity for people to start up their own clubs, or, if they are already members, receive the skills necessary to become more effective. And, of course, make new friends around the world! Here’s more on the program:
The SFL Charter Teams program seeks to build the student movement for liberty around the world by identifying, training, and supporting the strongest student leaders of liberty in areas currently underserved by SFL (i.e. outside the United States, Canada, and Europe). All students selected to the Charter Teams Program will undergo a rigorous 3 month online training program with biweekly readings and online seminars on the philosophy of liberty and management techniques. This training will educate Charter Team members in the best practices SFL has developed over the years to effectively create a student movement for liberty in new areas. Once the online training program is completed, Charter Teams will begin to start student groups at their own schools and schools nearby, run events that educate others on the meaning of liberty, and seek to identify other pro-liberty students in their areas. The goal is for Charter Teams and the individual members achieve success in building the student movement for liberty in their area to create long-lasting, meaningful mechanisms of supporting pro-liberty students.
In addition to this, I know that Students for Liberty is very interested in helping provide support and resources to help build the movement up in Australia, so this is a great opportunity on all rounds!
So, if you are a libertarian student, I would strongly encourage you to check out the Charter Team project and apply(and also, feel free to email me on my gmail address (timintheus) if you have any questions, or want to be involved more!). Otherwise, if you’re not a student… I’m sure you know some who are pro-liberty, so pass the link along!
Does Australia need industrial relations deregulation?
Last Wednesday I attended a joint Friedman/HR Nicol Society dinner arranged by the infamous John Humphreys. The guest speakers were Professor Judith Sloan and the former Howard minister Peter Reith. Both made the case for deregulation of the labour market and condemned the current Fair Work system as imposing excessive costs on employers and stifling flexibility. This is clearly a controversial issues and Labor is quick to remind people of workchoices.
Flexibility is one of those hot words when it comes to industrial relations. For many it’s code for employers being flexible with pay and conditions, while workers work harder in less certain jobs. For those who are employed in industries where they have little bargaining power and are working in jobs where little skills is required this is a likely consequence of a more flexible industrial relations system. Trade unions use the fears of such people to defend the arbitration system that gives them significant power.
What is often not mentioned in arguments about industrial relations is the cost of a highly regulated system to those people who are excluded from employment. Setting minimum standards for wage rates sets wages above the market rate, meaning that there are people willing to supply their labour for less than the award rate. Industrial laws actually make it illegal for people to work for less than the award rate. The result of this restriction on individual liberty means for those people who due to a lack of experience, training or ability are not productive enough to justify the award rate are excluded from the labour market.
The Government itself has all about acknowledged this by providing wage subsidies for its employment services to use. The ultimate effect of a wage subsidy is to reduce the cost the employer incurs employing people who lack experience or education. This method of creating flexibility has significant transaction costs to the employer and financial costs to the government. Wage subsidies have to be agreed to and both employer and jobseeker are at the mercy of government policy to determine if they are eligible for the subsidy. Ultimately the employer is getting taxpayer money for employing someone and the worker is getting a wage above market rates.
Another deficiency of the current system is that imposes a set of penalty rates on both employers and employees. Of course these benefits are popular with workers who earn extra money for working weekends, what often doesn’t get reported is the employment opportunities that never occur because employers choice not to open their doors. Rules that impose penalty rates and minimum hours eliminate opportunities for unskilled jobseekers to enter the labour market. While doing dishes for two hours on Sunday afternoon may seems like a “shitty” job to many of us, for others it is an opportunity to enter a new industry, gain some experience and a credible reference for their resume. This can be an important first step for some to enter the labour market. Unfortunately, “fairness” for workers at the bottom of the labour market comes at the expense of those excluded from the labour market. These are the true forgotten people in the industrial relations debate.
Is the medicare rebate middle class welfare?
I should start by saying this piece is more of debate about ideology rather than economics. The medicare offset known commonly as the medicare rebate can be seen as a subsidy of 30% to the holders of private health insurance. These people are mostly middle class or in a high income bracket. However, many people, especially those with health issues choice to purchase a private health insurance policy despite not having a high income. Alternatively, the policy could be seen as a way of giving health consumers choice. In that if people decide to insure themselves privately they can at least claim a deduction on their tax for the cost of the policy allowing them to pay with their gross income rather than net.
How a tax offset differs from a deduction is that a deduction reduces a persons reportable income on their tax return and results in a reduction of tax of whatever the top marginal tax rate the consumer was paying. So assuming the person who bought the policy was earning 200k the deduction would be 45% plus a reduction in of the medicare levy making a total tax deduction of 46.5% of the policy cost. This would mean that the wealthy would get a bigger deduction for purchasing health insurance than people not paying the top marginal tax rate. An offset instead is a blanket 30% of the policy cost regardless of who buys it. It’s for this reason and to reduce the cost of the policy the Howard Government would have chosen to have an offset rather than a deduction.
This with the fact its commonly known as a rebate has seen this policy portrayed as middle class welfare. This with the private vs public school debate really comes down to the question should people be able to opt out of government provided services? Clearly in health people still continue to benefit partially by the public system and will still continue to receive benefits from it, but should people who choose to partially seek healthcare through the private market be made to pay the full cost of the public system that they now are far less likely to use. Many people have the view yes, if people choose to use private services than they should still contribute 100% to the public system and receive no assistant/deduction for their private expenditure.
Another argument that is often used is the claim that people should pay their fair share. Too often a person’s fair share is their share and about four other peoples share and then are to be told they can’t access the service they paid for becomes of a means test. It’s apparent that the expansion of middle class welfare in the late Howard years was a response to the fact the middle class felt they were paying taxes into a system that wasn’t interested in helping them or their family.
As a libertarian I believe in a perfect world much more of the health system would be left to the private market with competitive pressures rather than a system that helps line the pockets of the medical profession. (I believe we do need a public helathcare system, probably similar to what Queensland had pre Medicare) However, we do not have that system, we probably will never have that system as the average person does not under that government funding of many medical services in the long run raises the price of those services. So as a next best solution those people who do not want take a chance with government waiting lists is to allow them to choose to access services through the private market. By allowing a 30% rebate of private health insurance means the individual gets a small deduction of their tax as an incentive, while they still continue to pay the medicare levy and a significant proportion of their taxes still goes towards funding the system.
Medicare HECS (v2)
The level of debate regarding health care reform in Australia is really rather pedestrian. We should be opening up the health sector to more private involvement and more personal responsibility. We need more price signals on both the supply and the demand side of the equation. However it seems the best we can manage in price signals is a modest tax rebate from the Liberals if you buy private insurance, and a higher medicare levy by the ALP if you don’t. Neither of these is the sort of market price signal we need. We need price signals that link consumers to suppliers.
Currently the medicare levy raises about 1/6 th of the amount that the government actually spends on health. If the Medicare levy was meant to raise the revenue needed to pay for Medicare it would need to be about 9%. So if we increased in from 1.5% (there abouts) to 9% and cut income taxes by 7.5% we would still pay the same in taxes (the levy is a tax) but we would have a lot more transparency informing the debate.
Each quarter we ought to get mailed a statement from the Medicare office outlining how much expenditure we incurred using our Medicare card. Again this would not change the benefit we receive but it would improve transparency and better inform the debate.
If the Medicare statement suggested above was actually an invoice and we were required to repay the expenses we incurred using our medicare card this would allow us to cut taxes by about 9% (inclusive of the current 1.5% Medicare levy or else just the 9% levy suggested above). Given the dead weight cost of taxation this would be real boost to the economy.
However there is a social policy concern with this approach that cuts to the heart of why Australians overwhelmingly like Medicare. The cost may deter poorer people from getting treatment. Fair enough. We can fix this concern by allowing people who can’t or don’t pay the invoice to automatically roll the debt from their Medicare invoice onto their HECS debt. In short Medicare would become an income contingent loan from the government. The Medicare card would become an alternate payment system much like VISA or Mastercard but issued by the government and with an income contingent repayment plan. Social concern fixed because nobody is denied essential health care on the basis of affordability. HECS could be renamed to the “Health and Education Contribution Scheme” and still abbreviated as HECS.
Okay some people don’t want to burden their future self with such a debt. That is up to them. They can take out private insurance instead or pay as they go using cash. People will vary in their preference but nobody will miss out on medical service due to an incapacity to pay. And insurance could be bought unencumbered by the current prescriptive government rules about inclusions and excess thresholds. Consumer demand and insurance company innovation coupled via the market would allow a process of discovery to determine what health services get paid for by insurance and what get’s paid for via cash. Whether insurance has a small excess or a large excess. Whether we mostly all have the same scheme or if we want a lot of variety.
Having reformed the demand side of the equation we should seek to reform the supply side by privatising hospitals. We already have private GPs, private specialists, private medical centres and private pathology services. In fact most routine encounters with the medical sector is already through a private provider. We even have numerous private hospitals. It isn’t a sector that benefits from either government ownership or government operation so we should extricate the government from it and allow hospitals to focus on treating patients and allow governments to instead focus on making better laws.
Others have suggested that health care should be provided by governments issueing vouchers which people then use to pay for private insurance. My view is that this approach will lead to governments being prescriptive about what insurance policies must include. About what excess they must provide. They will tend to exclude the option to self insure for some medical expenses. In short I don’t think a voucher scheme would drive the same dynamic process of innovation.
Catallaxy Files- Why did this native born Hawaiian once describe himself as a Kenyan? May 18, 2012As the accompanying article on Drudge says, Obama was indeed born in Hawaii but asks why there has been so little vetting of the president. As they write: It is evidence–not of the President’s foreign origin, but that Barack Obama’s public persona has perhaps been presented differently at different times. The US is not really [...]Steve Kates
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- Generalising about racism May 14, 2012The Sydney Morning Herald is running a poll asking if Australians are Racist. So far 74% of respondents say yes and 26% say no. Some of the commentators include Larissa Berendt who argues that Australia is a racist country because Aboriginal people have a shorter life expectancy. However, there are many reasons why their life expectancy is shorter than the a […]Sara Hudson
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Oz Political Quiz
