This is the first of four blog posts I will be writing for ESSA from the 41st Australian Conference of Economists, co-hosted by Economics Society of Australia and Victoria University. This blog aims to give its readers an insight into the key discussion topics at the ACE conference which created hearty debate amongst some of Australia’s pre-eminent economists.
When you consider what ‘government policy’ really means, most tend to think of actions made by government on production, distribution, consumption and identity issues, and rightly so. Public policy mainly concerns both the formulation of goals across these many areas of life and implementing ways of achieving these goals (Australian Public Policy, Fenna).
Wayne Swan’s essay in The Monthly titled ‘The 0.01 Per Cent: The Rising Influence of Vested Interests in Australia’ has caused quite a stir in the last few weeks. Swan laments the rising influence of wealthy vested interests in Australia’s public policy debate, and warns of it undermining our equality and democracy. These are strong, politically-potent words from Australia’s Treasurer, and have brought interesting reactions from the opposition, the media, the mining industry magnates he attacked, and the general public.
George Megalogenis’ quarterly essay titled ‘Trivial Pursuit: Leadership and the end of the reform era’ highlights the worrying lack of political leadership on both sides of the parliament in the aftermath of the 2010 Australian federal election. It argues that political short-termism and party politics has become the order of the day, leaving proper policy debate and detailed analysis out of the picture. It means that governments are focussing on winning the next 24-hour news cycle, or the next opinion poll rather than focussing on creating an enduring economic reform agenda that builds on our prosperity in Australia. Many prominent Australian journalists, including Megalogenis and Annabel Crabb of the ABC, have vowed not to discuss opinion polls to reflect their distaste of the current political atmosphere.
The Labor governments leadership struggles over the past week has fixated the nation. On 22 February, following weeks of reports of tension, Kevin Rudd stepped down as Foreign Minister. The next day Julia Gillard called a leadership ballet and by 23 February Rudd confirmed he would contest the leadership. Opinions polls have shown Rudd to be preferred Prime Minister to Gillard however whom the caucus prefers is still mere speculation.
After passing through both Houses of Parliament, Australia will officially have an emissions trading scheme on July 1st 2012, which will take the form of a carbon tax for its first three years before moving to a flexible price carbon trading market in 2015.
The Federal government announced recently that they will continue to support the Australian car industry through ‘co-investment’ – i.e. through tax-payer funded direct subsidies to industry. This is funneling money to multinational co-operations so they can maintain production of Holdens and Fords in Australia. All this is for one reason – to protect Australian car manufacturing jobs.
The government argues that this investment is important to maintain a car manufacturing industry in Australia, and if there no support, they would cease producing locally-made cars. For example, the government granted $34 million in subsidies to the Ford Plant in Melbourne to keep it running until 2016. Decisions such as this have been branded as important to Australia’s ‘national interest’, a clever political line to justify protectionist policy initiatives.
