“I’m not dead yet.”

Chinese saying, possible Keynes reference.

Quote is a cheery response to “how are you?” but I like to think it’s a long-run thing.

I hear that the 90’s are back, so on that basis I’m actually an early-adopter & not someone who has caught up with blogging after everybody has moved on.

Links to new published work, the odd throwback and other thoughts.

New Forms of Organising & Membership for Unions

One of issues I’m spending a lot of time on is new forms of organising and membership for Australian unions.

With Troy Burton I’ve written this paper on the subject to help people think through what is a diabolically complicated issue.

It’s been distributed to a bunch of unions, but if you know of folks working on this this sort of thing, please pass it on.

HMU with feedback good and bad.

Reveille Research Note Alternative Membership

(BTW Reveille Strategy is the day job / how we pay the bills. And yes, the name is an homage to Alinsky.)

Union movement needs to fix the hole in its roof to survive

(Post of my otherwise pay walled column in the Australian Financial Review 30/10/15)

Historian Arnold Toynbee said civilizations don’t get murdered, they die by suicide. After the release of new ABS statistics on union membership, we will soon find out if the dictum holds for organisations. Australian unions have only a few years to change or die.

After a brief period of stability, union density in the workforce is again falling sharply.  Under 14 per cent of workers now hold a ticket. The headline number is propped up by the public sector (of about 39 per cent) and strong performances in the health and education sectors.

In the private sector, only about one in 10 workers is a member. Then there is the demographic challenge. Membership among young workers is almost at trace levels.

To say this causes me great pain. As a lifelong unionist who still works with a range of unions. As a former senior ACTU officer who shares the blame. I know unions and collective bargaining are good for growth and productivity and ameliorate inequality.

And I say it as a democrat, who believes strong civil society organisations, like unions, are vital to a healthy commonwealth.

But there comes a point when silence is complicity in failure. The official ACTU response to cavil at the ABS numbers was more than faintly pathetic. It’s quibbling over whether catastrophe is immediate or merely imminent. Nor is a flagged focus on digital disrupters going to cut it.

Worrying about the relative handful of people who work for outfits like Uber when you can’t organise millions in conventional employment relationships is like focusing on a dripping tap when there is a huge hole in your roof.

The numbers have been predictably seized on by those with an interest in unionism continuing to decline. This included erstwhile ACTU president Martin Ferguson, loyally mouthing the views of his industry clients.

The commentary was confused. People don’t like “militancy”, but the bright spots for unions are where they have aggressively pursued wages and conditions. Unions are weak but are on the rampage through the Fair Work Act, and must be subject to immediate and severe restrictions.

The truth is that the remaining redoubts of high-density unionism in the private sector are under attack precisely because they are isolated and unusual. And the Fair Work Act is no collective paradise. It’s a scheme of individual rights and entitlements, with very limited collective rights constrained by complex procedures.

But released the same day as the ABS data was an Essential Media poll showing almost two-thirds of Australians think unions are important and that almost half of us think workers would be better off if unions were stronger. There is a message and clue in these numbers.

The message is that although the public still instinctively understands and values the role of unions, union leaders aren’t managing to offer people a membership proposition that makes sense to them.

Unions have one, unchanged, membership model. It delivers terrific outcomes in large factories, and still works brilliantly in places like hospitals. But it doesn’t work, and unions have no capacity to deliver it, in large parts of our economy. The need for new models of membership and worker participation is long overdue.

The clue is in the framing of the question – and specifically the use of the term “workers”.  Unions speak with authority about work. It’s what people want unions to do, and it must be the focus.  There is considerable research evidence that people see unions as “too political”.

This is cancerous, and fed by the fact that visibility of unions is almost exclusively about politics (or corruption allegations) and that a union voice is too often absent from debates about the nature of work.

The routine calls by unions for governments to “do something” obscure the fact that unionism is about people doing something for themselves.

Political campaigning can’t ever be an excuse for not organising. As the workers who built the labour movement found out, there are some things you can’t win at work and political representation is vital. But as they say in the US civil rights movement, an election measures the temperature of a society, a social movement is a thermostat that permanently changes it.

A retreat from workplace organising and serious engagement with public policy in favour of an almost exclusive focus on electoral politics is a dead end. Organised labour will not be rebuilt with internet memes. The answer is not, and never will be, the election of one more Labor government.

Telling workers that voting will change their lives is a problem when they do and it doesn’t. Strong, growing unions are ones that help give workers some power over their work and therefore their lives. There are no shortage of workplace issues to organise around, with penalty rates being only the most obvious.

Unions are still the biggest membership based show in town. By far. The future is grim, but not terminal. Provided unions take their last chance and make it count.

Productivity Commission Reports Are Like East German Shoes


Tomorrow, (Tuesday 4 August) The Productivity Commission is due to release the draft report from its Workplace Relations inquiry.  The possibility of this inquiry was knocking around for years before the last election. In anticipation of the draft, here’s part of a speech I gave at Macquarie University at the end of 2012 attacking the record of the PC on workplace relations (and more generally really). 

Under Gary Banks the PC regularly demonstrated it didn’t understand a great deal about what labour law is for and what it does.  A new Chair, Peter Harris, is now in charge and we shall see when the draft report is released if that has made a detectable difference in the approach of the Commission.  

The full speech (which includes a discussion on the drivers of productivity and makes a case of a broadband land tax ) is here.

“Why Chairman Banks and the cadres could use a healthy dose of competition.

Of course we have an institution nominally devoted to the subject of productivity – and I wanted to make some observations about that.

Recently, one of my senior union colleagues said to me “You know, Doug Cameron is dead wrong about abolishing the Productivity Commission. It shouldn’t be abolished it should be subject to rigorous market-based competition.”

My mate got me thinking.

You see there is a sameness to the advice from the PC. You can generally guess the content of a PC report in advance, with the prescriptions following a certain pattern. If it’s a government service delivery question – turn it into vouchers. If it’s a regulatory issue – propose deregulation. If it’s a market failure issue – create an artificial market

The PC, contrary to the medicine it doles out for others, is under no market pressure to deliver. Like many monopoly providers, it has simply standardised its product and doesn’t innovate. A PC report is like East German shoes –you can have any sort you like as long as you want the size 10 brown ones.

In two recent speeches, outgoing PC Chairman Gary Banks has called (again) for the application of competition law principles to workplace regulation, and suggested that industrial protections are an out-dated relic of the era of “dark-satanic mills”.

The offensive inference from these interventions is that labour market regulation is some sort of protection racket and that taking wages out of competition (so firms compete on an equal footing through innovation and quality) is an act of economic terrorism.

But labour markets are not remotely well represented by some frictionless Walrasian process where workers receive their marginal product. Witness the gender pay gap, and the lack of premium paid for insecure work, or the failure of the deregulated US labour market to clear.

Labour markets are characterised by a fundamental power imbalance between employee and employer. Employment relationships involve bargaining quasi-rents, where the parties to the negotiations typically and almost universally have vastly different bargaining power. Monopsonistic employment relationships – where employers have some discretion over the wage they will pay – are widespread and endemic. Labour markets are segmented. Employment agreements are complex and highly incomplete, with an asymmetry of information between the parties and are typically entered into for an open-ended duration.

As Krugman’s quote demonstrates, without industrial regulation and labour market institutions like unions, employees typically have little control over their working lives, little ability to predict and plan their income and their time. Unions also provide workers with a voice. Labour regulation and institutions help to redress the imbalance of power, however modestly.

The only plausible outcome from subjecting industrial relations regulation to a PC review is a reduction in workers’ rights and entitlements. A dispassionate evaluation of the evidence does not provide any support for the contention that the removal of workers’ rights is the most pressing priority for governments seeking to improve the wellbeing of the Australian people.”

8 Minutes on the Ideological & Moral Compass of Labor.

(On 25 July, I spoke at the John Cain Foundation / Open Labor “Basic Values Forum” as as part of the Fringe at the ALP National Conference. The idea of the session was to talk about the ideological and moral compass of Labor. There were terrific contributions from Clare O’Neil MP and Pat Conroy MP and a good crowd with plenty of questions wrangled by Maxine McKew. The speakers got 8 minutes each to cover “What are Labor Values?” . Here’s a very slightly edited version of what I said.)

So, we are in the “there-be-hashtag-monsters” territory of Labor Values.

The organisers have invited us to opine on these, and not on the detail of a program. This approach is to be deprecated – because everybody loves a detailed program. I have lost count of the number of times I’ve marched up and down Bourke St chanting “what do we want? / detailed programmatic specificity / when do we want it? / now”.

So, instead of talking about a program I’m going to do 3 things:

I’m going to give two disclaimers.

I’m going to posit 6 things with are either principles and or things we need to remember – necessary but insufficient conditions to get anything useful done. (I don’t have time to explain which are which, you have to figure it out yourselves.)

Finally, I’m going to suggest 10 things I think are values – things the labour movement needs to stand for.

Disclaimer 1 – I am already down to about seven minutes and the formidable McKew is riding shotgun. So the list is not exhaustive, and give me a break if I don’t hit your sweet spot. I let you guess if its rank order preference or not.

Disclaimer 2 – Is about me. I’m considerably more distrustful of statist solutions than most of the left of the Party – including because the state is run or most influenced by people with power, which isn’t generally workers or the poor. The state can be a force for inequality and I dislike bureaucracy intensely. At the same time I am much less pro-business than many on the right because I am pro-free enterprise (there is a vitally important difference – I think almost anything an incumbent firm or industry says to Government must be treated with extreme caution). I’m pro-market, but they must be firmly regulated, and markets can’t be privileged over society. I’m considerably more supportive of action by workers collectively in their own interests than many on either the left or the right.

To the Principles / Things we need to remember.

  • The health of a society is measured by the way those at bottom are doing not the top. Inequality, what it does, and why it matters, is central. Prosperity only matters if you share it. At the end of WWII most of the global non -communist left would have said they stood against inequality and autocracy and that’s still not a bad start – we stand for a democratic politics of the commonwealth.
  • Political economy is about choices – countries make decisions, and we can make them. A glance a national statistics in comparison shows you that countries make a wide variety of choices about taxes, services, work, welfare and much more. And we can’t allow the need to focus on microeconomic questions to make us forget that the nation is an organism, a collection of communities, and that the macro matters. The choices a country makes matter and they effect real peoples lives – read my Per Capita colleague Dennis Glover’s new book.
  • Economic and political justice are inseparable. Dr King called it the “March on Washington for Jobs and Freedom” for a reason.
  • Anything that pits the poor, weak and the vulnerable against each other and / or against the community is a politics that must be resisted.
  • Lots of people aren’t conservative in the sense of worrying about other people’s sex lives – but they are conservative in the sense of wanting some security and certainty when it comes to themselves – to their household and their family and the trajectory of their children’s lives. Good, lets help them.
  • Democracy and community is strongest when people have the space to build there own organisations – to organise not just politically or industrially but socially and economically. And by the way, although I am not one, the sooner the left cuts out its occasionally contemptuous attitude to people of faith and learns to make common cause with them the better. (It’s a bit bewildering to have to mention this given that the only two strains worth really talking about re how this party started and grew are Christian socialism and Irish Catholicism.)

And so to the values.

  1. Full Employment – but a commitment based on understanding that quality, quantity and incidence of jobs matters as well as a job per se. Jobs must be at the heart of macro economic policy. We must use fiscal and monetary, levers plus thoughtful industry policy (I don’t mean Tariff Boards or the like) and active labour market policies.
  2. Market incomes – I think we have fallen down on this a bit. The labour movement has an almost unlimited number of aspirations for the country and its people. But few, if any, of these can be achieved with a having an economy where market incomes deliver what we have always said they should do: rising real standards of living from decent safe and secure jobs. And we know that this basically means organised jobs.
  3. The welfare state – we need to defend the collective management of risk. We need to embrace social insurance and a way to supplement the meager and insufficient social assistance schemes we have to help households manage risk – age, sickness, disability, unemployment – and ensuring that the incidence and design changes and evolves as the society and economy does so that an event of misfortune isn’t a fall into permanent and terrifying poverty.
  4. A consumer focus – on competition, consumer and law and corporate regulation. It is our people pay economic rents and get scammed and we must be aggressive about this.
  5. Governance – we must stand for accountability, transparency and honesty in public life and access to justice. Our people do not have power by themselves – if the system is bent, ordinary people are the ones that suffer.
  6. Social goods – about amenity, the built and natural environment and perhaps above all for education, not just because its an economic good but because it’s a social good.
  7. Building co-operative and mutually owned services and enterprises. Industry Super Funds area amongst the largest and most successful co-operatives in the world with half a trillion in funds under management. We need to be about doing more with workers savings and talk about what other institutions we can give space to.
  8. A human centered approach that listens to its communities – not just a search for allies but an approach which gives voice and autonomy and agency to people – first and foremost our indigenous people. We need to promote a balance between centrism and local and distributed autonomy.
  9. Civil liberties – with an expansive and modern take. Ordinary people are the ones that suffer from excessive state power or the abuse of legitimate powers. Think of the vulnerability of the Somali-Australian kids who live in the Commission flats near me to inappropriate policing as well as about rights to assemble, speak and organise. We have wider aims than the right – who’s modern take on civil liberties is that they are about the right to feel ok about being a bit racist and about property protection. Above all we need a modern, ferocious commitment to digital privacy – digital assembly and personality and speech is the new frontier.
  10. Finance. The defining task of social democracy in the new century is to deal with and control the power of finance and to retard and reverse unnecessary financialisation. The incidence, power and dimensions of finance has grown even as it effectiveness in facilitating capital formation in the rest of the economy has withered. At a household level this is about the acquisition of risk – including the great lie of the finical planning industry that anyone can be rich if you just acquire enough risk. And it’s also about the society level, where the lesson of Greece (and indeed of the global financial crisis) is that the power of finance has reached such heights as to be capable of terrorism against the nation state itself.

Conquest’s Third Law and the ALP National Conference

I’m speaking at an ALP National Conference Fringe Event for the John Cain Foundation on Saturday 25 July on the topic “What Are Labor Values?” This post is really a throat clearing exercise before I get there. I will post a version of what I say on the values topic after the event.

One of my favourite laws about organisations (political or otherwise) was posited by Robert Conquest, a fine historian of the Soviet Union. It holds that “the simplest way to explain the behavior of any bureaucratic organization is to assume that it is controlled by a cabal of its enemies”.

If the ALP spends lots of time in public over the next few days on either the socialist objective or its internal plumbing, I’d say the law might have been proved again.

On the objective, I don’t say this because I’m am now or have ever been – as they say in the classics – a socialist. I says it because in my years as a member of the ALP the people most concerned with this topic have almost invariably been amongst the least interesting. A fascination with repeal (or indeed exaggerated defence) of the socialist objective has been a marker of second-rate minds trying to sound serious.

That drafts of replacement language usually seem like off-cuts from a management consultant’s PowerPoint deck compounds my objection.

In its heavily qualified form, where socialisation is prescribed only “to the extent necessary”, the objective is not really very socialist at all. It translates as the party saying “look, political economy is complicated OK?” In that sense, the objective is a rather commendable historical marker of Labor’s practicality and pragmatism. And there are still some things we do need to own and operate by and for our commonwealth.

When Gareth Evans led a push during the Fraser Government years to repeal it, the change might have meant something in practical terms. It might have been a motive force in people declining to vote Labor. Or it might have been a barrier to the adoption of a particular policy (although it wasn’t in 1983-1996). The prohibition on state–aid to non-government schools, which Whitlam managed to get rid of, clearly did both. I’d say it’s pretty clear that the socialist objective does neither.

As Marx might have said, it is entirely unnecessary to abolish the socialist objective, it has merely withered away.

Then there is the issue of the party rules. Many well meaning people have sweated tears of blood about this for years. But remember that nobody loves talking about the structure of the Labor party more than the worst sort of factional factotum with a clipboard and a stack of how-to-vote cards. It’s of deep interest to those of us in the ALP, our sworn enemies and essentially nobody else.

Obsession with internals is a mark of a party turning in on itself, in the hope that by some constitutional alchemy alone it can be transformed into a mass movement. Among the paradoxes are that giving more power to individual members as opposed to unions or caucus indirectly rewards branch stackers, and that any measure to try and fix branch-stacking also makes it harder for an ordinary member to join and participate.

It rightly annoys Labor people that the Liberal Party, that tiny secret kingdom of corporate shills and geriatrics with their utterly farcical conferences and stone-crazy fringe dwellers, are subject to nothing like the scrutiny or expectation we are. But we must hold ourselves to a higher standard, and the composition of the Labor rank and file has its own issues.

Party members, even ones where the party aspires to majority national government, by definition never exactly “look like” the societies they spring from. Whatever the ideology, party activists are always a vanguard of sorts.

Which is why I’ve never been convinced about the party at large being involved in electing the leader. The point of electing a parliamentary leader is to pick someone who can secure a majority Labor government. This person may or may not be who the party as a whole might happen to have a bit of a crush on when the ballot is held. It’s also worth remembering the successful Labor leaders who became beloved elders but were widely opposed and even reviled by big chunks of the party during their ascent.

(I’m willing to predict that the experiments with extra-parliamentary involvement in leadership elections will be quietly repealed or neutered after the ALP slouches to a predictable and avoidable thrashing at a general election.)

You wont get transformation by tinkering with the tightly controlled proprietary code of the party. The answer is to go open-source, to turn the party outwards so the people we put in power and our program are a product of our community.

The only party changes worth talking about are those that are clearly going to improve the quality of our parliamentary candidates. We have too many preselections determined based on who’s turn it is on the bike. Fundamentally, we need to find ways to reward people in the process of preselection (and subsequent advancement) for having deep, organic ties to communities. That, in combination with intellect and values, are the things that help us write a program, win elections and govern successfully.

Unions need to play a role in this – first by urgently democratising the way they exercise member’s power inside the ALP. And by accepting that a fair chunk of the poor quality MPs are ex-union officials.

(It’s said that unions are currently a “dead-hand” on the party specifically in respect of policy. Electricity privitisation – loathed by the public – is generally the only thing that gets mentioned in this regard. A debate about competing policy positions and the national – or state – interest would actually be worth having. )

The real issue for me is a lack of confidence in what the party and the movement stands for and would do with power in government: the asking-for-hashtag-trouble question of “values”.

Globally, social democracy is in crisis. Our sister party in Greece, PASOK, now has a smaller parliamentary delegation than the openly fascist Golden Dawn. It’s pretty hard to find a social-democratic or labour party in Europe that even looks like it could win majority national government. The triumph of bloodless technocracy in the EU has seen the center-right running the show and the fringes on the up.

In Australia, waves of economic change over the past few decades have weakened or sometimes destroyed the workplaces, organisations and communities the labor movement sprang from and relied on for renewal, strength and ballast. Change has broken the way we used to organise and do politics.

Social-democracy (its thinking if not always its parties) might have dominated the developed word in the post war years, but it is generally in retreat. But despite all that, the broad policy preferences of most people in the developed world still trace the outlines of a social-democratic program.

In that there is hope and opportunity. With some bravery and leadership and some luck along the way.

Brown Paper Bag Tigers.

Screen Shot 2015-07-23 at 11.06.49 am(My piece in The Saturday Paper on 18 July 2015 on national governance, corruption and institutions. Headline above is from the dead tree version, which I like more than the one on the online version that can be found here.)

As anyone who remembers the Jeff Kennett-era bumper stickers “Vote 1 Auditor-General” knows, institutions designed to make the government accountable and honest enjoy strong support from the public. The same is true of state anti-corruption commissions such as the Independent Commission Against Corruption in New South Wales and the Crime and Corruption Commission (formerly the Crime and Misconduct Commission) in Queensland. It tends to be the political class that expresses reservations about them.

There is a satisfying schadenfreude in watching various colourful characters do the walk of shame into corruption inquiries, but it also tends to reinforce a deep frustration with, and alienation from, politics in general and party politics in particular.

Similarly, on political donations, the public reacts badly when shown the mechanics of political fundraising because it just smells like turning money into power – and into more money. Or vice versa. A cursory glance at the patterns of political donations shows a high correlation between regulated industries and the cash flows to parties. The democratic instinct on all this is dead right: not all fundraising is corrupt but there is a real sense in which all of it contains the possibility of corruption. And when dark money meets a faulty moral compass, the result is entirely predictable.

Which explains why two common responses to corruption allegations and donation scandals in national politics are to call for a “federal ICAC” and royal commission into political donations. Both are fine suggestions, and need to be taken seriously, including because they are advocated for by people with a long record of support for anti-corruption measures, such as Tony Windsor.

We probably do need both, but it’s certainly not all we need to do. Done on their own, they are likely to be ineffective, because they would deal with only part of the governance issue.

For one thing, appeals for a federal ICAC-style body seem to miss something important about the contours of corruption. ICAC-type bodies with significant and coercive investigatory powers are particularly good at unravelling, albeit after the fact, a specific species of corruption – a species of corruption that directly relates to a core function of state and local governments, namely licensing and permit issues and especially those relating to land.

In simple terms, it’s basic brown paper bag stuff, involves the personal enrichment of individuals, and falls into one of three categories.

The first is money or other advantage in return for a favourable decision on a specific question – say, funding or a mining lease or a planning application. Much judicial corruption, which has been mercifully rare in Australia, also falls into this category.

Rent-seeking may not be corrupt, but in terms of its negative consequences for the country and corrosive effect on governance, it can be as bad.
The second is regulator corruption in the form of payments to look the other way or even facilitate an illegal operation or act, such as illegal brothels, drug distribution or dumping waste. Police corruption, which is like a fungus you can never quite kill and a function of the opportunities presented by daily proximity to illegality and cash, is the most obvious example.

The third is common or garden-variety stealing, often via procurement manipulation and the payment of secret commissions. A classic of this genre is the current scandal at the Education Department in Victoria, where a network of managers siphoned off cash and goods meant for public schools.

Our major scandals at a state government level tend to fall readily into these categories. Much of the WA Inc scandal was about resources and property, as well as government investments. Queensland’s Moonlight State was a miasma of grog, developers, cops, pimps and bookies. The ICAC sagas of recent years that hit both major NSW parties involved infrastructure, land, property and mining rights, as well as something as mundane as the lease on the coffee cart at Circular Quay.

Further back in NSW history, premier Robert Askin, who said his wealth came as a result of saving hard and being a very lucky punter, was outed immediately after his death as being at the apex of a network of corruption around liquor licensing and prostitution. The end of the 1970s also saw a Victorian Liberal government caught up in serious corruption around land and housing in outer Melbourne.

There’s a pretty clear pattern. And that pattern says something important about what institutions we might need at a national level.

In contrast to the grand episodes of state corruption, national politics appears to have a better record. Politicians padding their travel expenses, while egregious, is hardly a systemic threat. It’s possible that the fact we have never had a really major corruption scandal at a federal level is because we have never had an ICAC to uncover it. But perhaps it is more likely a sort of happy constitutional accident – our national government does a lot less of the specific sort of regulation and licensing that states and local councils do, and it does a lot less direct procurement because it doesn’t run things such as schools and hospitals.

This does not mean that there isn’t a corruption risk. It means that the main “corruption” potential is different but actually much bigger and more serious. The problem is that it’s not black-letter-law-type corruption. It’s not brown paper bag stuff and personal enrichment. At least as far as we know.

What the federal government does do is write the fundamental rules of the economic game, including in relation to tax, trade and the finance sector that dominates all our lives. And the key players in these games are the largest and most powerful corporations, foreign and domestic.

A government decision can be entirely free of corruption but still not be an example of good governance. And it can still be a catastrophe for the public interest. For example, if the banks secure a major tax break, or a de facto government guarantee, this is worth literally billions to corporations and costs the public accordingly. I would argue that it is an illegitimate manipulation of public policy when this is done privately, using privileged access and economic or other leverage. But it’s also different to brown paper bag corruption. It’s opaque decision-making and power that are the issues. Although they made plenty of them, the mining companies didn’t have to use donations to kill Labor’s original mining tax, they used their hard and soft power.

Rent-seeking may not be corrupt, but in terms of its negative consequences for the country and corrosive effect on governance, it can be as bad.

Would an ICAC be suitable to untangle a “corruption” mess involving multinational drug companies, the Pharmaceutical Benefits Scheme and free-trade negotiations? Almost certainly not. We should not presume an institution that is good at catching mid-ranking bureaucrats who are rorting the printer cartridge contract will deal with the bigger issues about how politicians become subalterns for immensely powerful interests playing an inside game.

There are a series of important and urgent issues in relation to integrity and transparency in Australian public life. A core problem is that governance institutions are assembled and altered in a remarkably ad hoc fashion, which reduces the chance they can be effective. A national carbon copy of ICAC and an inquiry about donations seems to me to be just treating some symptoms.

We shouldn’t deal with capital C corruption and political donations by themselves. Not while other key governance and transparency institutions in Australia are either totally broken, such as freedom of information laws; overhyped, such as the Parliamentary Budget Office and whistleblower protections; handicapped by jurisdiction or poor funding, such as the Ombudsman and the National Audit Office; hilariously ineffective, such as the Charter of Budget Honesty and Ministerial Code of Conduct; or thoroughly pointless, such as most parliamentary committees.

During the Asian century white paper process, former treasury secretary Ken Henry was fond of saying that good governance can be a source of national competitive advantage for Australia. He’s right, but our system needs work.

Australia should have a royal commission into governance. It would consider the national mechanisms and institutions Australia needs to secure transparency and integrity but also good governance more generally. It would consider not just corruption and electoral funding, but also policymaking and accountability in public administration.

Although it’s unnecessary as a matter of law, the parliament should establish the commission so it’s not a mere creature of the executive. And as fantastic as it sounds in these times when commissions are appointed to investigate such partisan flim-flam as pink batts, the government and opposition should agree on the names of three commissioners.

Restoring public faith in institutions and political actors is a big, complicated task. Establishing a royal commission into governance would be a way for the prime minister and the opposition leader to show some dedication to the public interest.

And if, as I suspect it may be, our polity is so broken at present that it can’t get a task like this done, then perhaps civil society should organise its own inquiry and let the public lead the political class.

A few “Vote 1 Commission for Governance” Facebook memes would scare a lot of them.

This isn’t reform, it’s more like class war: Hockey on Tax.

(My piece in Guardian Australia on 16 July 2015 on Hockey’s tax and speech. Original is here.)

Being the sort of sad type that finds tax tremendously interesting, I was excited for Joe Hockey’s big speech on Wednesday, in which he was expected to set out principles and direction for that hardy perennial of federal politics, tax reform.Being the sort of sad type that finds tax tremendously interesting, I was excited for Joe Hockey’s big speech on Wednesday, in which he was expected to set out principles and direction for that hardy perennial of federal politics, tax reform.

Instead what we got was equal parts underwhelming and infuriating, a cocktail of shallow politics, bad policy and return to the class warrior Hockey of the 2014 budget.

The shallow politics was leaking and then floating the idea of a bigger and wider GST, with one caveat: “no change will be considered without the unanimous agreement of state and territory governments and bipartisan support in the Federal Parliament.”

Rightly, and as anyone could have predicted, Victorian Labor premier Daniel Andrews killed that dead within the hour. Hockey knew full well he would. It didn’t even have to be Andrews; presumably he just beat Annastacia Palaszczuk and Jay Weatherill to a microphone.

Then there were Hockey’s “six principles for tax reform” – a mixture of motherhood statements and partisan potshots, which give the appearance that Hockey sees the tax system as a sort of instrument for industry policy. It’s a pretty odd thing for a Liberal treasurer to be proposing, that we should shape the economy by favouring certain investments.

I doubt we will hear much about Joe’s principles again.

The purpose of the tax system is to raise the money the community needs to fund the services and infrastructure we demand – and to do some redistribution based on capacity to pay and needs.

Most people who have looked at the issue think the key principles are something like equity, efficiency, simplicity and sustainability. The fight comes about how you give effect to this, and the tradeoffs that are involved.

To demonstrate this, while Hockey spruiked the GST as better than income tax, the government’s own tax discussion paper says that what economists call the “deadweight cost” to the economy of these taxes is about the same – until you make income tax progressive.

That is, a GST – an inherently regressive tax that falls most heavily on people with low incomes – is only inherently more efficient if you think progressive income tax is a bad idea.

Much more revealing than Hockey’s principles was how he fleshed out his views about who should pay what tax, and how progressive the system should be. It showed that we’ve still got the treasurer who framed the widely-loathed 2014 budget, not the allegedly kinder and gentler Joe of 2015.
Hockey also bemoaned the top rate of personal income tax (despite the fact that only the top 5% of taxpayers actually pay it), taxes on capital gains and the company tax rate.

Then there was what he ruled out or wouldn’t go near at all. Like the absurdly generous and radially expanding concessions for high income earner on superannuation. Or negative gearing. Or company tax concessions. Or, of course, taxing windfall profits in mining. Or pricing carbon.

Unmentioned – and it should have been front and center in a speech to a mainly business crowd – was the need for companies to pay their fair share and be transparent about it. It’s part of their social licence to operate. Hockey’s plan to deal with multi-national tax avoidance is set to raise a truly pathetic $30m and modest efforts to improve disclosure of tax paid by the big end of town seem set to be wound back.

Asking the public to support a “business tax cut” when there is white hot anger in the community about big business not paying their way, and winding back tax –transparency at the same time is “courageous”. But it says something about priorities.

That’s before you add up his goals for tax reform: lower tax on business, lower tax on wealth from capital gains, lower tax on income for top earners. Higher tax on the poor, via the GST. And nothing about any of the rorts and loopholes, or about raising some more revenue to fund the things Australia needs.

A program where reform means it’s all upside for the wealthy and only the poor lose any skin. This isn’t reform, it’s more like class war. And it’s more like the 2014 budget.

Unspoken was the fact that Australia is actually a relatively low-taxing and low-spending country by OECD standards. We have a revenue problem at least as much as we have a spending problem. And it’s only going to get worse.

Recent data suggests that the growth prospects of the Australian economy have fundamentally shifted downwards, and the forward estimates of the federal budget predicated on a return to trend or above-trend growth look increasingly fanciful. Lower growth means even bigger revenue problems for federal, and state, budgets.

I don’t expect to agree with Hockey about lots of things when it comes to tax, but on Wednesday’s performance, you wouldn’t bet on Hockey doing anything substantive, sensible or fair about how our tax system copes with the future.