What is desirable is not always affordable or How Ken Henry is wrong about the policy debate

STONE the crows! The wonks are whacking back!

Last week, Ken Henry complained about the crook quality of the policy debate: “I think it is quite serious. There is an insufficient understanding of the issues that Australia confronts. …There is a role for deeper analysis, there”s a role for deeper thinking, and there”s a role for a much higher quality of public policy debate and all of this needs to happen before governments make and announce decisions.” [i]

On Saturday, George Megalogenis said hacks (or as he described them “political and economic correspondents”) stopped being “thought leaders” in the early 1990s.[ii]

These arguments normally emerge around elections. However, since mid 2010 they have remained ever-present in the policy experts’ manifesto of moans – basically because the state of the parliament ensures the last two years were one continuous campaign, with both major parties avoiding ideas that upset key constituents.

But intellectual bankruptcy and a policy deficit are different things.

The assumption that politics and press are bereft of ideas is triple distilled banana oil.

This is a golden age for policy debate, and it is the best ever era of Australian journalism (and please, do not tell me about the compendium of conspiracies that was the National Times).

From ABARE to WEA, the public sector facts and stats available online ensure it is all but impossible for bureaucrats to hide the state of government from us.[iii] And there is more commentary from academics and industry analysts than the Crows can shake a feather at.

As for the papers, The Australian and The Australian Financial Review are rich with policy coverage and comment, if not readership and and revenue.

And if you think “thought leaders” are ignored by policy literate people, have a look at the quantity, and quite often quality, of reader comments on Megalogenis’ blog.[iv]

So is Dr Henry upset that the government ignored his tax review? If so, why has he taken on the Asia white paper? [v] Perhaps because it provides him with a reason to explain why mandarins and academics should be left alone to work out the details the rest of us are too dumb to deal with.

Thus he wonders whether:

Australians simply don’t understand what is going on. It may be that policy matters have always generated confusion, but I have a sense that the confusion in public debate is getting worse. At least, it seems to me to be a lot worse than at any other time over the past 25 years or so. Indeed, and this is a gross generalisation, I can’t recall a poorer quality public debate – on almost any issue – than what we have in Australia at the moment.  Today, it is almost certain that, in almost any area, what people generally understand to be the case is, in fact, a myth.

And/or it allows Ken Henry an opportunity to blame hacks for the way ordinary Australians are not thinking as our betters instruct:

There have been many public policy debates in Australia in recent years in which the media have not managed to facilitate a balanced discussion – for whatever reason. On some issues, the media have appeared keen to report the views of almost anybody who has a view.  But the media appear to have no way of guiding readers, listeners and viewers as to the weight that should be put on the various views presented. [vi]

The learned doctor has form on coming over aggrieved at people who don’t do what they are told. In 2010, he attacked academic economists for not backing the government’s emissions trading scheme: “There were no end of academic economists who wanted to say it’s not bad but I’ve got a better one … And in the way in which political debate occurs, such a statement does enormous damage to the chances of sensible reform.”[vii]

But, as then, the problem now is that for as long as there are “thought leaders” who are not on the public payroll while the government cannot find a way to elect people it prefers, Dr Henry is stuck with us ordinary Joes who have this inflated idea of our own ability to work things out for ourselves.

So, if we are not paying enough attention to what he wants to tell us is in our interest, who’s responsible?

Here’s a hint: have a look at the numbers in the House of Representatives this week when the Opposition moves its standard suspensions of standing orders after question time.

If there is a paucity of policy it is because neither side dare address the obvious issues and neither has a clue what the point of being power is, other than it is much better than being in opposition.

And the obvious issue they avoid is that without tax reform (a euphemism for hitting the 20 per cent of people who provide 59 per cent of PAYE receipts) we cannot afford the government we have got, let alone the one both sides promise.[viii]

Perhaps this is why Tony Abbott is focusing on cutting public service numbers instead of programs as a way of funding his proposals. Good-oh, except there are suggestions the Coalition needs to find $30bn in savings cuts – which can’t all come from cutbacks.[ix] Total Commonwealth outlays on administration are around $19bn.[x]

And it may be why Treasurer Wayne Swan separately talks up the strength of the economy and the case for welfare spending, without explaining how the former will pay for the latter.[xi]

That they do this is not the fault of the media. The quality press has hammered away at Canberra’s unsustainable spending for 15 years. In the disgraceful give-away that was the 2004 election, for example, The Australian editorialised:

Both parties have played us for mugs during the campaign … during the past six weeks they have each made spending promises worth $14bn. And far from being spent in ways that invest in future growth – on vocational education say, or infrastructure – most of the money has been spent with immediate political gain in mind. [xii]

Nor is it forced on government by the generality of voters who do not reward budget give-aways with poll boosts and who have a generational habit of turfing out governments that spend unsustainably.

The present crisis is a direct result of a political class that confuses profligacy for policy and dares not admit that what is desirable is not necessarily affordable.

The ideas and arguments are out there it’s the politicians who are ignoring them.

[i] Ben Packham, “Ken Henry says quality of policy debate is at its worst in 25 years,” The Australian, August 14

[ii] George Megalogenis, “How the language of shock-jocks came to drive political debate,” The Weekend Australian, August 18

[iii] Australian Bureau of Agricultural and Resource Economics and Sciences, @ www.daff.gov.au/abares/ , Wheat Exports Australia, www.wea.gov.au/ recovered on August 18

[iv] http://blogs.theaustralian.news.com.au/meganomics/index.php

[v] Australia’s Future Tax System @ www.taxreview.treasury.gov.au/content/FinalReport.aspx?doc=html/Publications/Papers/Final_Report_Part_1/index.htm recovered on August 18, http://asiancentury.dpmc.gov.au/sites/default/files/files/terms-of-reference/asian-century-tor.pdf recovered on August 18

[vi] Ken Henry, “Public policy in the 18th century,” Australian National University media release, July 19 @ http://news.anu.edu.au/?p=16031 recovered on August 18

[vii] “Treasury chief lashes academic economists over ETS”, ABC Radio, PM June 21 2010 @ www.abc.net.au//pm/content/2010/s2932954 recovered on June 26 2010

[viii] Australia’s Future Tax System, 3.3 Distribution of wealth, income and taxes @ www.taxreview.treasury.gov.au/content/Paper.aspx?doc=html/publications/papers/report/section_3-03.htm recovered on August 18

[ix] Lenore Taylor, “Cuts would not hit frontline services – Coalition,” The Sydney Morning Herald, August 18

[x] Peter van Onselen and James Massola, “Swan to put brakes on public sector blowout,” The Australian, April 13

[xi] Wayne Swan, “Treasurer’s economic note,” August 5 recovered on August 18

[xii] “Campaign has been a fiscal extravaganza,” The Australian October 7 2004