Wednesday 22 April 2015

Tony Abbott and his attempts to degrade scientific research in Australia


It is well known that Australian Prime Minister Tony Abbott believes that climate change science is absolute crap, but even he has exceeded expectations of what his passive-aggressive brand of climate change denialism will bring forth when he appointed self-described climate policy sceptic, Bjørn Lomborg*, as an adviser to federal government on foreign aid delivery and arranged for the Australian taxpayer to fund Lomborg to the tune of $4 million now that the Danish Government has defunded his pseudo-scientific approach to research and American donors are not enthusiastically supporting this 'homeless' think tank the Copenhagen Consensus Center Inc.

BRIEF BACKGROUND

Excerpt from one of the Lomborg Errors documents:


"The Skeptical Environmentalist" has given rise to extensive public discussion and debate, both in Denmark and internationally. There have been enthusiastic reviews in some of the world's top newspapers such as the Washington Post and the New York Times, and in The Economist.

The magazine Scientific American asked four leading experts to assess Bjørn Lomborg's treatment of their own fields: global warming, energy, population and biodiversity, devoting 11 pages to this in January 2002.

Stephen Schneider: "Global Warming, Neglecting the Complexities"

Schneider is a particularly respected researcher who has been discussing these problems for 30 years with thousands of fellow scientists and policy analysts in myriad articles and formal meetings.

Most of Bjørn Lomborg's quotes allude to secondary literature and media articles. Bjørn Lomborg uses peer-reviewed articles only when they support his rose-coloured point of view. By contrast, the authors on the Intergovernmental Panel on Climate Change (IPCC) were subjected to three rounds of audits by hundreds of external experts.

Bjørn Lomborg employs no clear and discrete distinction between various forms of probabilities. He makes frequent use of the word "plausible" but, strangely for a statistician, he never attaches any probability to what is "plausible". IPCC gives a large "range" for the majority of projections, but Bjørn Lomborg selects the least serious outcomes.

Stephen Schneider then provides a specific criticism of Bjørn Lomborg's four main arguments:

1. Climate Science: Bjørn Lomborg quotes an article in Nature (from the Hadley Center, 1989), uncritically and without the authors' caveats. BL quotes Lindzen's controversial "iris effect" as evidence that IPCC's climate range needs to be reduced by a factor of almost three. BL either fails to understand this mechanism or else omits to state that the data stem from only a few years' data in a small part of a single ocean. Extrapolating this sample to the entire globe is wrong. Similarly, he quotes a controversial Danish paper claiming that solar magnetic events can modulate cosmic radiation and produce a clear connection between global low-level cloud cover and incoming cosmic rays as an alternative to CO2 in order to explain climate change. The reason IPCC discounts this theory is "that its advocates have not demonstrated any radiative forcing sufficient to match that of much more parsimonious theories, such as anthropogenic forcing."

2. Emissions scenarios: Bjørn Lomborg assumes that over the next several decades, improved solar machines and other new technologies will crowd fossil fuels off the market, which will be done so efficiently that the IPCC scenarios vastly overestimate the chance of major increases in CO2. This is not so much analysis as wishful thinking contingent on policies capable of reinforcing the incentives for such development, and BL is opposed to such policies. No credible analyst can just assert that a fossil-fuel-intensive scenario is not "plausible" and, typically, BL gives no probability that this might occur.

3. Cost-benefit calculations: Bjørn Lomborg's most egregious distortions and feeblest analyses are his citations of cost-benefit calculations. First, he chides the governments that modified the penultimate draft of the IPCC report. But there was a reason for that modification, which downgraded aggregate cost-benefit studies: these studies fail to consider so many categories of damage held to be important by political leaders, and it is therefore not the "total cost-benefit" analysis that Bjørn Lomborg wants. Again, BL cites only a single value for climate damage - 5 trillion dollars - although the same articles indicate that climate change can vary from benefits to catastrophic losses. It is precisely because the responsible scientific community cannot rule out catastrophic outcomes at a high level of confidence that climate mitigation policies are seriously proposed. For some inexplicable reasons, BL fails to provide a range of climate damage avoided, only a range for climate policy costs. This estimate is based solely on the economics literature but ignores the findings of engineers and does not take into account pre-existing market imperfections such as energy-inefficient machinery, houses and processes. Thus, five US Dept. of Energy laboratories have suggested that such a substitution can actually reduce some emissions at below-zero costs.

4. The Kyoto Protocol: Bjørn Lomborg's invention of a 100-year regime for the Kyoto Protocol is a distortion of the climate policy process. Most analysts know that "an extended" Kyoto Protocol cannot deliver the 50% reduction in CO2 emissions needed to prevent large increases at the end of the 21st century and during the 22nd century, and that developed and developing countries alike will have to cooperate to fashion cost-effective solutions over time. Kyoto is a starting point, and yet with his 100-year projection BL would squash even this first stage.

Bjørn Lomborg's book is published by the social sciences side of Cambridge University Press. It is no wonder, then, that the reviewers failed to spot BL's unbalanced presentation of the natural science. It is a serious omission on the part of an otherwise respected publishing house that natural-science researchers were not taken on board. "Lomborg admits, 'I am not myself an expert as regards ENVIRONMENTAL PROBLEMS' - truer words are not found in the rest of the book".

John P. Holdren: "Energy: Asking the Wrong Questions"

Bjørn Lomborg's chapter on energy covers a scant 19 pages and is devoted almost entirely to attacking the belief that the world is running out of energy, a belief that BL appears to regard as part of the "environmental litany". But only a handful of environmental researchers, if any at all, believe this today. Conversely, what they do say about this topic is that we are not running out of energy, but out of environment, i.e. the capacity of air, water, soil and biota to absorb, without intolerable consequences for human well-being, the effects of energy extraction, transport, energy transformation and energy use. They also say that we are running out of the ability to manage other risks of the energy supply, such as overdependence on Middle East oil and the risk of nuclear energy systems leaking weapons materials and expertise into the hands of proliferation-prone nations or terrorists. This has been the position of the environmental researchers for decades (e.g. from 1971, 74, 76 and 77).

So whom is BL so resoundingly refuting with his treatise on the abundance of world energy resources? The professional analysts have not been arguing that the world is running out of energy, only that the world could run out of cheap oil. BL's dismissive rhetoric notwithstanding, this is not a silly question, nor one with an easy answer.

Oil is currently the most valuable of the conventional fossil fuels that have long provided the bulk of the world's energy, including almost all energy for transport. The quantity of recoverable oil resources is thought to be far less than coal and natural gas, and those reserves are located in the politically volatile Middle East. Much of the rest is located offshore and in other difficult and environmentally fragile areas. There is, accordingly, a serious technical literature, produced mainly by geologists and economists, exploring the questions of when world oil production will peak and begin to decline, and what the price might be in 2010, 2030 or 2050 - with considerable disagreement among informed professionals.

BL seems not to recognize that the transition from oil to other sources will not necessarily be a smooth one or occur at prices as low as the price of oil today. BL shows no sign of understanding why there is real debate about this among serious-minded people.

BL offers no explanation of the distinction between "proved reserves" and "remaining ultimately recoverable resources", nor of the fact that the majority of the latter category is located in the Middle East, but placidly informs us that it is "imperative for our future energy supply that this region remains reasonably peaceful" - as if that observation does not undermine any basis for complacency.

BL is right in his basic proposition that the resources of oil, oil shale, nuclear fuels and renewable energy are immense. But that is disputed by only few environmental researchers-and no well-informed ones. But his handling of the technical, economic and environmental factors that will govern the circumstances and quantities in which these resources might actually be used is superficial, muddled and often plain wrong. His mistakes include apparent misreadings and misunderstandings of statistical data, the very kinds of errors he claims are pervasive in the writings of environmentalists. By the same token, there are other elementary blunders of a type that should not be committed by any self-respecting statistician. Thus, it is wrong that measures in the developed countries have eliminated the vast majority of SO2 and NO2 from smoke from coal-burning facilities: it is only a minor proportion. Other examples are given, and when it comes to nuclear energy, plutonium is such a great security problem as regards the potential production of nuclear weapons that it may preclude use of the "breeding" approach unless a new technology is invented that is just as cheap.

BL uses precise figures, where there is no basis for such, and he produces assertions based on single citations and without detailed elaborations, which is far from representative of the literature.

Most of what is problematic about the global energy picture is not covered by BL in the chapter on energy but in the chapters dealing with air pollution, acid rain, water pollution and global warming. The latter has been devastatingly critiqued by Schneider.

There is no space to deal with the other energy-related chapters, but their level of superficiality, selectivity and misunderstandings is roughly consistent with what has been reviewed here.

"Lomborg is giving skepticism - and statisticians - a bad name."

John Bongaarts: "Population: Ignoring Its Impact"

Bjørn Lomborg's view that the number of people is not the problem is simply wrong. The global population growth rate has declined slowly, but absolute growth remains close to the very high levels observed in past decades. Any discussion of global trends is misleading without taking account of the enormous contrasts between world regions, where the poorest nations of Africa, Asia and Latin America have rapidly growing and young populations, whereas Europe, North America and Japan have virtually zero, and in some cases even negative, growth. As a consequence, all future growth will be concentrated in the developing countries, where four-fifths of the world's population lives: from 4.87 to 6.72 billion between 2000 and 2025, or just as large as the record-breaking increase in the past quarter of the (21st) century. This growth in the poorest parts of the world continues virtually unabated. The growth has led to high population density in many countries, but BL dismisses concerns about this issue, based on a simplistic and misleading calculation of density as the ratio of people to land. In Egypt this would make 88/km2, but deducting the uncultivated and unirrigated part of Egypt, it makes 2,000/km2 - no wonder Egypt has to import foodstuffs! Measured correctly, population densities have reached extremely high levels, particularly in large countries in Asia and the Middle East. This makes demands in terms of agricultural expansion on more difficult, hitherto untilled terrain, increased water consumption and a struggle for the scarce water resources between households, industry and farming. The upshot will be to make growth in food production more expensive to achieve. BL's view that increased food production is a non-issue rests heavily on the fact that foodstuffs are cheap; but BL overlooks the fact that it is large-scale subsidies to farmers, particularly in the developed countries, that keep prices artificially low.

Appreciably expanding farming will result in a reduction of woodland areas, loss of species, soil erosion, and pesticide and fertilizer run-offs. Reducing this impact is possible but costly, and would be easier if the growth in population were slower.

BL overlooks the fact that population growth contributes to poverty. First, children have to be fed, housed, clothed and educated - while economically non-productive - then jobs have to be created once they reach adulthood. Unemployment lowers wages to subsistence level. Counteracting population growth has fuelled "economic miracles" in a number of East Asian countries.

BL overlooks the fact that the favourable trend in life expectancy is due to intensive efforts on the part of governments and the international community, but despite this, 800 million are still malnourished and 1.2 billion are living in abject poverty. Population is not the main cause of the world's social, economic and environmental problems, but it is a substantial contributory factor. If future growth can be slowed down, future generations would be better off.

Thomas Lovejoy: "Biodiversity: Dismissing Scientific Progress"

In less than a page, Bjørn Lomborg discounts the value of biodiversity both as a library for the life sciences and as a provider of ecosystem services (partly due to the general absence of markets for these services). When he does get round to extinction, he confounds the process by which a species is judged to have been made extinct with estimates and projections of extinction rates. In contrast to BL's claim, the loss of species from habitat remnants is a widely documented phenomenon. A number of factual errors are highlighted. BL takes particular exception to Norman Myer's 1979 estimate that 40,000 species are being lost every year, failing to acknowledge that Myer deserves credit for being the first to point out that the number was large and at a time when it was difficult to do so accurately. Current estimates are given in terms of the increases over normal extinction rates. BL cynically spurns this method, because such estimates sound more ominous. Instead, he ought to acknowledge that this method is an improvement in the science. These rates are currently 100 to 1,000 times' the normal, and are certain to rise as natural habitats continue to dwindle.

The chapter on acid rain is equally poorly researched and presented. BL establishes that acid rain has nothing to do with urban pollution, though it is a fact that nitrogen compounds (NOx) from traffic are a major source. Errors are pointed out in BL's view of acid rain on forests.

The chapter on forests suffers from BL not knowing that FAO's data are marred by the weight of so many different definitions and methods that any statistician should know they are not valid in terms of a time series. There are errors in the figures from Indonesia in 1997. BL confuses forests with tree plantations, and asserts that the only value of forests is harvestable trees. That is analogous to valuing computer chips for their silicon content only.

It is important to know that while deforestation and acid rain are reversible, extinction of species is not.

BL entirely overlooks the fact that environmental scientists identify a problem, posit hypotheses, test them and, having reached their conclusions, suggest remedial policies. By focusing on the first and last stages in this process, BL implies incorrectly that all environmentalists do is exaggerate.


Dr Peter Raven, President of the American Association for the Advancement of Science in 2002 said of Lomborg: "...he's not an environmental scientist and he doesn't understand the fields that he's talking about so in that case, if you have a point to make and you want to get to that point, which is: everything's fine, everybody's wrong, there is no environmental problem, you just keep making that point. It's like a school exercise or a debating society, which really doesn't take into account the facts". 
"Raven said that the success of Lomborg's book 'demonstrates the vulnerability of the scientific process -- which is deliberative and hypothesis driven -- to outright misrepresentation and distortion.'"

Newsweek 21 February 2010:

Lomborg opens Cool It with a long discussion on polar bears, arguing that no more than two (of 20) groups are declining in population, that their numbers are not falling overall, and, in places where they are, that it is not a result of global (or Arctic) warming. In fact, polar-bear populations in warming regions are rising, he argues, suggesting that a warmer world will be beneficial to the bears. As Friel shows, Lomborg sourced that to a blog post and to a study that never mentioned polar bears. But he ignored the clear message of the most authoritative assessment of the bears' population trends, namely, research by the International Union for Conservation of Nature. It found that bear populations are indeed declining where the Arctic is warming. In fact, concluded the IUCN, polar-bear populations "have declined significantly" where spring temperatures have risen dramatically. It also offered an explanation for Lomborg's claim that numbers are falling most where temps are getting colder: that area happens to be where there is unregulated hunting.
For his claim that the polar-bear population "has soared," Lomborg cited a 1999 study (scroll down to the paper by Ian Stirling). But that study described declining birthrates and other threats to the bears, blaming warmer spring temperatures that cause the sea ice to break up. Overall, since the mid-1980s polar-bear numbers have fallen, which experts attribute to global warming. The source is thus not exactly the solid endorsement of Lomborg's claim about thriving polar bears that one might assume.

Climate Council 14 April 2015:

The Australian Government today announced they would contribute $4m for Danish climate contrarian Bjorn Lomborg to establish a new “consensus centre” at the University of Western Australia.

In the face of deep cuts to the CSIRO and other scientific research organisations, it's an insult to Australia’s scientific community.

As the Climate Commission, we were abolished by the Abbott Government in 2013 on the basis that our $1.5 million annual operating costs were too expensive. We relaunched as the Climate Council after thousands of Australians chipped in to the nation’s biggest crowd-funding campaign…

It seems extraordinary that the Climate Commission, which was composed of Australia’s best climate scientists, economists and energy experts, was abolished on the basis of a lack of funding and yet here we are three years later and the money has become available to import a politically-motivated think tank to work in the same space.

This is why the work of the Climate Council is so important - to counter this continuing ideological attempt at deceiving the Australian public.

Mr Lomborg’s views have no credibility in the scientific community. His message hasn’t varied at all in the last decade and he still believes we shouldn't take any steps to mitigate climate change. When someone is unwilling to adapt their view on the basis of new science or information, it's usually a sign those views are politically motivated. 

 Bjørn Lomborg states he is a director of the Copenhagen Consensus Center, adjunct professor at University of Western Australia, and visiting professor at Copenhagen Business School.
He further states that he has an M.A. in political science (University of Aarhus) and a Ph.D. in political science (University of Copenhagen).
His degrees are in social science and not in any of the scientific disciplines which inform credible climate research.

Tuesday 21 April 2015

Mental health report and recommendations that the Abbott Government didn't want you to see until it had worked out how to pass the buck to the states


Australian Health Minister Sussan Ley has had the four-volume National Review of Mental Health Programmes and Services since 1 December 2014.

Despite the report being leaked to Crikey, she insisted on 15 April 2015 that; there was no sense in releasing the report before the Government had formulated a response.


On 19 April Crikey Insider sent out access links to all four volumes to its readers.

The Abbott Government has now released the full report which can be read at leisure on the Mental Health Commission website.

The report makes 25 recommendations:

Summary of recommendations

1. Set clear roles and accountabilities to shape a person-centred mental health system

Rec 1. Agree the Commonwealth’s role in mental health is through national leadership
and regional integration, including integrated primary and mental health care.

Rec 2. Develop, agree and implement a National Mental Health and Suicide Prevention
Plan with states and territories, in collaboration with people with lived
experience, their families and support people.

Rec 3. Urgently clarify the eligibility criteria for access to the National Disability
Insurance Scheme (NDIS) for people with disability arising from mental illness
and ensure the provision of current funding into the NDIS allows for a significant
Tier 2 system of community supports.

2. Agree and implement national targets and local organisational performance measures

Rec 4. Adopt a small number of important, ambitious and achievable national targets
to guide policy decisions and directions in mental health and suicide prevention.

Rec 5. Make Aboriginal and Torres Strait Islander mental health a national priority and
agree an additional COAG Closing the Gap target specifically for mental health.

Rec 6. Tie receipt of ongoing Commonwealth funding for government, NGO and
privately provided services to demonstrated performance, and use of a single
care plan and eHealth record for those with complex needs.

3. Shift funding priorities from hospitals and income support to community and primary health care services

Rec 7. Reallocate a minimum of $1 billion in Commonwealth acute hospital funding in
the forward estimates over the five years from 2017–18 into more community based
psychosocial, primary and community mental health services.

Rec 8. Extend the scope of Primary Health Networks (renamed Primary and Mental
Health Networks – PMHNs) as the key regional architecture for equitable
planning and purchasing of mental health programmes, services and integrated
care pathways.

Rec 9. Bundle-up programmes and boost the role and capacity of NGOs and other
service providers to provide more comprehensive, integrated and higher-level
mental health services and support for people, their families and supporters.

Rec 10. Improve service equity for rural and remote communities through place-based
models of care.

4. Empower and support self-care and implement a new model of stepped care across Australia

Rec 11. Promote easy access to self-help options to help people, their families and
communities to support themselves and each other, and improve ease of
navigation for stepping through the mental health system.

Rec 12. Strengthen the central role of GPs in mental health care through incentives for
use of evidence-based practice guidelines, changes to the Medicare Benefits
Schedule and staged implementation of Medical Homes for Mental Health.

Rec 13. Enhance access to the Better Access programme for those who need it most
through changed eligibility and payment arrangements and a more equitable
geographical distribution of psychological services.

Rec 14. Introduce incentives to include pharmacists as key members of the mental
health care team.

5. Promote the wellbeing and mental health of the Australian community, beginning with a healthy start to life

Rec 15. Build resilience and targeted interventions for families with children, both
collectively and with those with emerging behavioural issues, distress and
mental health difficulties.

Rec 16. Identify, develop and implement a national framework to support families and
communities in the prevention of trauma from maltreatment during infancy and
early childhood, and to support those impacted by childhood trauma.

Rec 17. Use evidence, evaluation and incentives to reduce stigma, build capacity and
respond to the diversity of needs of different population groups.

6. Expand dedicated mental health and social and emotional wellbeing teams for
Aboriginal and Torres Strait Islander people

Rec 18. Establish mental health and social and emotional wellbeing teams in Indigenous
Primary Health Care Organisations (including Aboriginal Community-Controlled
Services), linked to Aboriginal and Torres Strait Islander specialist mental health
services.

7. Reduce suicides and suicide attempts by 50 per cent over the next decade

Rec 19. Establish 12 regions across Australia as the first wave for nationwide
introduction of sustainable, comprehensive, whole-of-community approaches to
suicide prevention.

8. Build workforce and research capacity to support systems change

Rec 20. Improve research capacity and impact by doubling the share of existing and
future allocations of research funding for mental health over the next five years,
with a priority on supporting strategic research that responds to policy
directions and community needs.

Rec 21. Improve supply, productivity and access for mental health nurses and the
mental health peer workforce.

Rec 22. Improve education and training of the mental health and associated workforce
to deploy evidence-based treatment.

Rec 23. Require evidence-based approaches on mental health and wellbeing to be
adopted in early childhood worker and teacher training and continuing
professional development.

9. Improve access to services and support through innovative technologies

Rec 24. Improve emergency access to the right telephone and internet-based forms of
crisis support and link crisis support services to ongoing online and offline forms
of information/education, monitoring and clinical intervention.

Rec 25. Implement cost-effective second and third generation e-mental health solutions
that build sustained self-help, link to biometric monitoring and provide direct clinical
support strategies or enhance the effectiveness of local services.

It took some time for Dr. Karl Kruszelnicki to understand that the 2015 Intergenerational Report was always a politically partisan document created by the Abbott Government



On 5 March 2015 Abbott Government released its 2015 Intergenerational Report

“Dr. Karl” begins to voice doubts about the report in The Canberra Times on 14 April 2015:

The man appearing on television screens across the country promoting the Abbott government's Intergenerational Report - science broadcaster Karl Kruszelnicki - has hardened his stance against the document, describing it as "flawed" and admitting to concerns that it was "fiddled with" by the government.
Dr Kruszelnicki, widely known as Dr Karl, has previously revealed that he had not read the full report before he agreed to front the taxpayer-funded campaign, which is expected to cost millions.
The Intergenerational Report - a snapshot of Australia's economy and society in 40 years - was criticised by Labor as a "highly political document" for, among other things, downgrading climate change from its own chapter in 2010 to three-and-a-half pages in 2015.
"As far as I can see, it's a flawed report," Dr Kruszelnicki told Fairfax Media.
He singled out the reduced focus on climate change in this year's report for criticism. "In no way am I endorsing the government's stance on climate change. I think it is incredibly short-sighted," he said. 
Dr Kruszelnicki - who has appeared in advertisements for the report running prominently on commercial television, news websites and social media - has also tweeted comments criticising the government for cutting funding to the CSIRO. The report emphasises the value of scientific research and innovation. 
Dr Kruszelnicki said: "The only reason I agreed to do it [promote the report] is because I was told that it would be independent, bipartisan and non-political.
"If it turns out to have been fiddled with or subject to political interference from one side of politics I would deeply regret playing any part in it whatsoever."
Dr Kruszelnicki said he agreed to front the campaign after reading extracts on the ageing of the population and the changing nature of work.
He said the independence of the document is now unclear.

Unfortunately at that stage he still appears to believe that the report was created by the Australian Treasury and public servants. Hence, the idea that it may have been “fiddled with” once it left their hands.

The Abbott Government did not have to fiddle with the report – the entire document was assembled at the direction of government ministers.

Thirteen days after the report’s release the Deputy Secretary, Fiscal Group, from the Dept. of Treasury made it clear to the Senate Select Committee Into The Abbott Government’s Budget Cuts that it was not a treasury document:

Mr Ray : The document is the government's document. We work with the government to prepare it. Generally, this is the government's document, not ours.

By 15 April Dr. Karl had become blunter in his assessment of the situation when quoted by ABC News:

Dr Kruszelnicki blames himself for trusting the Government. He turned to Aesop's Fables to explain himself.
"The scorpion says to the frog, 'can you take me across the flooded river?' And the frog says, 'No, you'll stab me and kill me.'," he said.
"And the scorpion says, 'No, I won't do that because I'll drown myself." And the frog says, 'Yes, you'll drown.' So the frog says, 'hop on my back', takes him half way across the river and then the scorpion stabs him.
"And the frog says, 'Hey, you stabbed me, I'm going to die! And so are you! Why'd you do that? Are you crazy?' And the scorpion said, 'I can't help it. It's my nature.'
"It was my fault for not realising the nature of the beast that I was involved with.
"I really thought that it would be an independent, bipartisan, non-political document."
However, Dr Kruszelnicki said he had not asked for the ad campaign to stop.

Finally that night, Dr. Karl must have realised that his participation in government advertising was an issue with the potential to damage his own reputation and, this was the result:



Unlike the good doctor, The Guardian had the measure of this intergenerational report early and on 9 March 2015 pointed out its glaringly obvious partisan nature:

Every intergenerational report is only as good as the assumptions on which the predictions are based – especially those pertaining to demographics. And while some of the predictions about the ageing population and the implications that will have on employment participation and economic growth are worth considering, the assumptions about government spending over the next 40 years are pretty much a farrago of idiocy.
For no good reason whatsoever, Hockey has decided for the first time to include in the report projection based on policies of the former government. But he takes as the ALP’s “previous policy” that represented in the 2013-14 mid-year economic and fiscal outlook (Myefo) – a document produced by the Abbott government and which saw the 2013-14 deficit increase by $10.26bn due to “policy decisions” taken by the Abbott government.
The 2013-14 Myefo was itself designed to make it appear the ALP had blown the budget, and thus using that as the starting point to predict budget deficits over the next 40 years is a fairly dodgy exercise.

Monday 20 April 2015

Public statement by NSW Independent Commission Against Corruption concerning the High Court decision of 15 April 2015



Found at @political_alert 

Their master's voice has spoken. Where to now for tax reform under Abbott & Co?


On 30 March 2015 the Australian Treasurer Joe Hockey released a tax reform discussion paper titled Re:think, which is supposed to mark the start of a conversation about how we bring a tax system built before the 1950s into the new century.

Presumably this is to be a step towards the 'lower, simpler, fairer' revenue raising system Prime Minister Tony Abbott was banging on about during the 2013 election campaign.

The problem for the Abbott Government is that the propaganda power behind Abbott's 'throne', the ubiquitous far-right think tank pressure group the Institute of Public Affairs (IPA), is increasingly disenchanted with the federal government's approach to both taxation and superannuation.

So where to now for tax reform in the face of the slump in iron ore prices and company tax receipts that the prime minister and treasurer complain about.

Well, we know that Abbott has ruled out changes to company tax, intends to leave the superannuation loopholes in place for the rorting rich and will go ahead with tax cuts for small business in the face of that projected falling government revenue.

Capital gains tax breaks and negative gearing on investment properties also appear to be exempt from review.

Hockey is now promising no new taxes at all when he talks to the media, despite recently announcing the proposed 'Google' and 'Netflix' taxes.


This is a mixed bag for the very rich and comfortably well-off.

They will not like the federal government abandoning its promises to cut the company tax rate and reduce 'bracket creep'.

However,  Abbott & Co are obviously not going to take tax perks away from those same very rich and comfortably well-off Australian citizens and would have a weather eye out for the irritable mood of its right-wing backers.

 So that leaves it with limited options for cost savings in the 2015-16 Budget.

All of which indicates more bad news may be coming for vulnerable sections of society, because those sections are where Abbott in particular likes to hunt.

BACKGROUND

IPA in The Drum, excerpt, 7 April 2014:


The plan, as far as we know, is that small business will get a tax cut of about 1.5 per cent. Big business will be left paying the standard rate of 30 per cent.
The Coalition has long had a romantic attachment to small business as a sort of moral heart of Australian private enterprise, but this policy is the worst sort of small business fetishism.
It threatens to further undermine an already complicated corporate tax system, confuses the sources of economic growth, and will distract policymakers from the much more fundamental task of opening protected areas of the economy up to competition.
Let's take these one at a time.
It beggars belief that while the political class is banging on about the convoluted the tax code, "unfair" tax concessions, and clever corporate tax minimisation, the Government is planning to increase the complexity of the corporate tax system.
How long before we see the first exposé in Fairfax business pages about large corporates rearranging themselves to take advantage of the concessional small business rates?
The proposed small business tax cut would make the Australian corporate tax system explicitly progressive. Just as we pay a higher rate of income tax according to our wealth, firms would pay a higher rate of corporate tax depending on their size. The United States has a progressive corporate tax. Ours is flat - 30 per cent no matter what.
Now, in practice, firms don't pay the same 30 per cent rate. As my Institute of Public Affairs colleague Sinclair Davidson has documented, all those deductions, offsets and credits mean the effective tax rate - that is, the amount of tax paid - hovers about 25 per cent. On top of this, small businesses tend to have much more variable profitability, so they tend to pay less than big business already.
Even with this caveat in mind, progressive corporate taxes are a terrible idea.
IPA in the Australian Financial Review, excerpt, 13 April 2015:


The corporate tax profit shifting debate is a classic example of moral panic. First, it's incredibly complicated. How many Australians could explain how company tax is calculated, let alone what business practices a "double Irish Dutch sandwich" refers to?
Second, it's driven by hyperbolic and simplistic reports of companies paying little to no tax. These stories pivot on even more complicated scandals, such as "Lux Leaks", and the technicalities of foreign tax systems.
And third, it's wildly overstated. The best current estimates of how much corporate tax is shifted across borders is in the realm of 2 per cent to 4 per cent of total corporate tax.
It's true that earlier estimates in the 1990s were much more than that. It was those high estimates that got the Organisation for Economic Co-operation and Development interested in the issue. But the firm- and affiliate-level evidence is better now. It's pointless to scrutinise a moral panic for the clarity of its claims. But the corporate tax debate is missing the point.
As a society we don't value firms for the money the government extracts from them. We value firms because they produce goods and offer services that make us richer, our lives easier, more convenient and more enjoyable, and our standards of living higher.
We ought to design our tax system to encourage foreign firms operating and doing business on Australian shores, bringing investment and jobs. Any attempt to tackle profit shifting that raises uncertainty or lowers Australia's investment climate would be a disaster.
The corporate tax is not a good tax. As a recent Treasury paper pointed out, it is one of the most inefficient taxes levied by Australian governments. The burden of the corporate tax is scattered and obscure.

IPA, media release, April 2015:


"The government's proposed 'Google tax' is nothing more than a tax grab and will damage Australia's investment reputation," says Chris Berg, Senior Fellow with the Institute of Public Affairs.
Treasurer Joe Hockey announced yesterday that the government has drafted legislation to go after companies accused of "profit shifting" across international borders to reduce their taxes.
"Companies should pay tax for economic activity in the countries in which that activity occurs. However to follow the United Kingdom's lead and introduce a Diverted Profits Tax would be to damage the integrity of our corporate tax system for little revenue benefit," says Mr Berg.
Mr Berg and Professor Sinclair Davidson put a submission into the Senate Inquiry into Corporate Tax Avoidance in February 2015.
"Institute of Public Affairs research has found that the profit shifting problem has been vastly overstated," says Mr Berg.
"There is little evidence to suggest the existing system is broken. Large firms are responsible for the vast bulk of Australia's corporate tax revenue. And past inaccurate Treasury forecasts of future corporate tax revenue are due to changing commodity prices, not corporate tax avoidance."
"Joe Hockey has a spending problem, not a revenue problem. If the government wants to get the budget back into shape it needs to focus on the size of government, not penalise successful companies for investing in Australia," says Mr Berg.

IPA, excerpt from media release, 30 March 2015:


The government's Tax Discussion Paper released today fails to address the need to reduce the size of government in Australia, says the free market think tank the Institute of Public Affairs.
"Australia does not need new or higher taxes. The Abbott government should immediately rule out the idea of a bank deposits tax, and reverse its previous tax increases," says Dr Mikayla Novak, Senior Research Fellow at the Institute of Public Affairs.
"The Tax Discussion Paper rests upon the false assumption that Australia is a low taxing country."
"But superannuation contributions, health insurance premiums, and workers' compensation premiums effectively act as taxes, since non payment of these obligations carry tax penalties," says Dr Novak.
IPA research shows that if these payments are added to the OECD tax statistics, the Australian tax to GDP ratio increases from 27.3 per cent to 34.3 per cent in 2012, above the OECD average of 33.7 per cent.
"There's no doubt that Australia would benefit from tax reform. Urgent problems that need fixing include the threat of bracket creep which is exacerbated by a steeply progressive income tax system. The compliance costs borne by tax complexity also needs to be substantially reduced," says Dr Novak.
"Australia needs to radically reduce and simplify the overall burden of its taxation regime, to unleash entrepreneurship, innovation, and investment for growth and prosperity."
"The best way forward is to very substantially reduce government spending, helping to provide room for tax cuts right across the board," says Dr Novak.

Institute of Public Affairs in The Canberra Times, excerpt, 6 March 2015:


Since the Keating government, the Commonwealth has forced people to forgo higher salaries for the sake of contributing to super funds that cannot be accessed until later in life.
Given the inconveniences of this financial policy paternalism, not to mention endless superannuation policy tinkering, tax biases against long-run savings patterns, and the existence of welfare programs, there are disincentives for individuals to save even more for retirement, which would seem to justify at least some sort of concessional treatment for super.
The rates of tax applicable to super contributions and earnings serve as a role model for the lower, flatter general income tax regime that Australia should aspire to, but, in the final analysis, the concessions would not garner such political discord if we abandoned compulsory superannuation altogether.
To do so would likely increase take‑home pay for workers, ease financial repression experienced by lower income earners, reduce skewness in asset holdings such as housing, help deflate a boated financial sector, and treat Australians as adults who can confidently come to their own trade-offs between consumption and savings.
Ending compulsory superannuation would be a much more durable reform than a shameless revenue grab aimed at tax‑captive superannuants.

IPA, January 2015:


Following recent direct and indirect tax increases, there has been speculation that the Abbott government is considering extending the GST to low value imports of $1,000 or less.
Putting a GST on low value imports is unlikely to revive Australian retailing in the face of intense online shopping competition, given the significant price differentials for many popular consumer products.
There are several important drivers of high retail costs in Australia, including a highly regulated labour market, severe land use restrictions, and trading hour conditions, which are not being addressed by governments.
Available estimates suggest that the administrative costs of ending the GST exemption threshold would greatly exceed actual revenues collected, violating a basic principle of tax policy if implemented.
If the GST low value import exemption is abolished, there can be no assurances that governments will spend the additional revenue in ways that give good value to taxpayers.
The Abbott government should rule out the anti consumer and anti taxpayer proposal to extend the GST to low value imports.

IPA, excerpt from media release, December 2014:


The Abbott government should publicly reject the OECD's recommendation to slug Australians with higher taxes, according to free market think tank the Institute of Public Affairs.
"The latest OECD economic survey of Australia explicitly calls for Australians to bear an even heavier tax load," says IPA Senior Research Fellow Dr Mikayla Novak.
"This call for higher taxes to bring Australia more in line with the OECD average is misleading. IPA analysis has clearly demonstrated that Australia is not a low taxing country."
"The IPA has shown our 2012 tax-to-GDP ratio of 33.5 per cent (including superannuation and health insurance contributions) is now virtually level with the OECD average of 33.7 per cent."
"The tax recommendations, such as raising the GST to 15 per cent, higher land taxes, road user charges, and withholding future income tax cuts through a stabilisation fund, are an invitation for economic disaster if implemented."
"OECD calls for higher Australian taxes are precisely the wrong policy prescription for our budget overspending problems, and must be rejected by government in favour of more vigorous expenditure savings."
"If the government is to change Australian taxes, they should make our overall tax burden lower," says Dr Novak.

Main stream media in self-congratulatory mode


Main stream media is currently in self-congratulatory mode. 

The Daily Examiner 14 April 2015:

Who had the power to help reduce street violence by 40% in Australia's biggest city? Who made Queensland's Government aware of the need to protect local jobs and forced them to backtrack on allowing 100% fly-in, fly-out workforces? And who is on the cusp of significant changes to domestic violence legislation that will better protect women?

The answer? The nation's newspapers, whose influence in our society is being highlighted in a $5 million marketing campaign.

APN News & Media (parent company of this newspaper), Fairfax Media, News Corp Australia and West Australian Newspapers (Seven West Media) have combined to promote the "Influential by Nature" campaign.

It will highlight achievements that few other media are able to match; like a Sydney Morning Herald campaign that reduced drunken violence by 40%, an Australian Regional Media campaign spearheaded by the Mackay Daily Mercury, Rockhampton Morning Bulletin and Gladstone Observer that reversed a 100% FIFO stance by the Queensland Government. And the current campaign involving this paper that will likely result in new domestic violence initiatives.

APN chief executive Michael Miller, fronting the campaign for the newspaper and website publishers, said readers and advertisers needed reminding that one media was having more impact on their patch than others……

There is no denying that ethical news reporting often gives newspaper readers their first information on a social or political issue.

However, this thinly disguised marketing ploy "Influential by Nature" ignores the decline of that which it is promoting.

The barely re-worked media releases presented as news gathered by journalists, the advertorials passing as articles, the growing number of spelling and grammar errors which turn paragraphs into guessing games for the reader and, the fact that modern newspapers are now more often followers rather than leaders when it comes to social and political 
issues.