Federalism gaining in popularity

The recent ANU poll shows some turnaround in views on federalism:

Question: Some people think that in order to deal with Australia’s problems the state governments should
hand over some of their powers to the federal government in Canberra. Others think that the federal
government has enough power already. What is your own feeling on this? Do you think the state
governments should give some powers to the federal government, or do you think it has enough
powers already? If you have no opinion, just say so.

However I doubt there is any philosophical shift behind this opinion change. Rather, the apparent shambles in Canberra has undermined the federal alternative. The implicit lesson is unlikely to leave a permanent mark on public opinion.

What drives tax and spend opinion?

The latest ANU Poll finds, like all such polls in recent years, that given a choice between reduced taxes and increased spending on services, most people would go for the latter. Report author Professor Ian McAllister observes:

Public opinion on government spending tends to be both secular – in that it is largely unrelated to
partisan debates and changes in government – and cyclical – in that it is responsive to broader
economic conditions. For example, on the latter point, it has often been observed that national
electorates are more likely to favour spending on social services and welfare when economic conditions
are benign, and to favour reduced taxes when economic conditions become harsh.

I agree, having argued for this interpretation in a 2004 paper. But a few years ago Professor McAllister thought that other factors were at work. In a newspaper report on the 2007 version of the tax and spend question, he was reported as saying that:Read More »

Battle of the think tanks (or some of them, anyway)

I’m not sure what my current employer will think of being left out a contest of Australia’s most influential think-tanks, but Thought Broker’s end of year event should be good if you happen to be in Sydney on 12 November:


Australia’s most prolific and influential think tanks will duke it out over whose ideology and vision for the future should prevail.

Pitting speakers from social democrat and progressive think tanks against their conservative and libertarian counterparts, Thought Broker will once again present incendiary debate to a well-lubricated audience.

In the blue corner we have Tim Wilson of the Institute of Public Affairs and Dr Oliver Hartwich from the Centre for Independent Studies. And, in the red corner Dr David Hetherington, Per Capita and Miriam Lyons, Centre for Policy Development.

At a time when ideological purity has hit the skids and political debate and policy implementation are mired in spin and short-termism, this event will explore the importance of long term thinking in Australia’s public debate.

Event DetailsRead More »

Are Australians reluctant to move?

Last week, Conrad said:

Australians seem to move about very little in general (excluding retirement), and many people want to live close to their families for one reason or another.

I was a little surprised to read this, as the more common view is that Australians are becoming more mobile. Yet neither view seems to be correct.

In the figure below from the OECD (the Australian data was from HILDA), Australian residental mobility was the second highest of the countries examined over a 2 year period.

Read More »

Are Australian students reluctant to choose?

The visiting boss of Universities UK, their Universities Australia equivalent, says that Australian students are used to studying near their home. It means student choice here will take longer to evolve than in the UK, where leaving home to study is common (they are getting a very partial demand-driven system).

That Australian students are stay-at-homes is a commonly held view, but there is not much research on how often Australians move to study. The DEEWR student statistics show that about 11% of students are enrolled outside their home state. But the 2006 census showed that about 40% of 18-19 year old university students were not living with their parents.

Of course many of these are likely to still be fairly close to the family home; living in a share house in Fitzroy is more fun than living with your parents in Camberwell. But it shows a capacity and willingness to move.

There are signs of national marketing. Both Bond and James Cook universities have been advertising on Melbourne TV in the last few weeks (admittedly SBS). This suggests that at least some universities think that students can be persuaded to travel long distances.

All the other mobility statistics – jobs, houses, travel – suggest that Australians are happy to go somewhere new or do something new. If student mobility to study is lower than in other countries I doubt it is anything deep in the culture. It is a pragmatic decision that Australian universities are quite similar, and that therefore there is not much point in moving to study. If universities differentiate themselves more, I would expect more mobility.

A new private uni, established just in time

The American for-profit university conglomerate Laureate International Universities is to open a campus in Adelaide, to be known as Torrens University Australia. (An earlier, detailed description of the proposal is here (big pdf).

Universities Australia, the lobby group for current universities, said that it would be pleased to consider an application from Torrens. But it added:

“However, Universities Australia is surprised that the South Australian Government has made this decision prior to the Tertiary Education Quality and Standards Agency beginning its regulatory functions in January 2012.”

Actually, it is not very surprising at all. The proposed rules for admitting new universities under the TEQSA regime make it extremely difficult to become a university. At best, it would be a slow, evolutionary process for another kind of higher education provider to become a university. The biggest obstacle is that to be approved as a full university, research activity is required in three broad fields of study. Not many institutions can sustain loss-making activities across such a range.

The current protocols for approving new universities are also quite protectionist. But there
is a provision in the protocols on ‘greenfield’ universities that have a ‘high probability’ of meeting the general criteria for being an Australian university. That’s what Torrens and the SA government are using, before this option is closed off by TEQSA rules.

I fear TEQSA is going to bury higher education in red tape, so I am pleased that this new competitor was allowed in before they get the chance to stop it.

A degree and net worth

Last Friday the ABS put out their latest report on household wealth and wealth distribution. This includes average ‘study loan’ debt, though there is nothing in the ‘assets’ section on the value of human capital. This is not a criticism of the ABS; human capital is not a directly tradeable asset and there are substantial methodological issues in valuing it.

Nevertheless, for most younger people their human capital is their most important asset. If what we are hoping to measure is capacity to command resources over the longer term (superannuation is included), then excluding human capital gives a fundamentally misleading idea of how wealth is distributed.

Combining numbers from two tables gives us an idea of what impact this has. The highest average HECS debt is in the households with the lowest net worth. Unfair! Students impoverished by debt! But looking at average HECS debts by gross household income quintiles things are reversed – the highest average HECS debt is in the top income quintiles. Equity! The rich being forced to pay their way!

What I suspect is happening here is that the net worth numbers are picking up many new households, graduates starting to earn good salaries but still renting and with little superannuation. But the household income numbers are picking up graduates living together; since they tend to overtake the incomes of non-graduates early in their careers putting two or more graduates together in a household gives them high collective earnings.

Because there are very large life cycle effects in wealth distribution, it will always be far more equal over a lifetime than at any one time. HECS/HELP will make it mildly more progressive.

Separate student amenities fees to return

After much Coalition stalling, the government’s amenities fee legislation passed into law today. However, it is not a restoration of the previous status quo. The key differences are:

* while before 2006 unis could charge what they liked in a separate amenities fee, now it is capped – a maximum of $263 next year, with indexation for future years;

* before 2006, it was an up-front fee, but now it can be deferred through a new income-contingent loan scheme, SA-HELP;

* before 2006, there was no Commonwealth regulation of what they could spend the amenities fee on (though there had been some state legislation), but now there are some restrictions, including on political parties and local, state or federal campaigns;

* before 2006, there was no Commonwealth regulation of universities in their provision of general student and advocacy services, and now there is (same legislation, but not connected to the amenities fee – the trigger is receipt of Commonwealth grants, not the amenities fee).

So overall there is a substantial increase in bureaucratic complexity compared to the pre-2006 situation.

As longtime readers of my blog will know, my position is that both sides to this debate are wrong. A separate amenities fee is a relic of an earlier funding system, in which the Commonwealth paid grants that were specifically for academic matters (some of which they recovered via HECS from 1989), and permitted universities to charge students for non-academic matters.Read More »

When is is ok for politicians to break their commitments?

Today’s Essential Research poll asks about when politicians should be able to break commitments. Unfortunately it is marred by poor wording, especially in the options not being mutually exclusive, but the plurality for the option ‘as situations change, it is reasonable that politicians change their positions’ suggests a pragmatic attitude. It is the common sense morality that I expect most people apply in their own lives – commitment keeping is a virtue, but sometimes things we assumed in making that commitment turn out not to be the case, and that affects the morality of whether or not the original commitment should be kept.

The pragmatic position may well have secured more support had not respondents read it as excusing Julia Gillard’s carbon tax backflip. Other polls conducted in a more neutral context do not show Coalition supporters as more cynical about politicians than Labor supporters. Not only does the correct thing to do change when relevant facts change, but also according to the identity of the people involved.