Green Whiskers

ABC of better childcare

Tue, 11 Nov 2008 12:22:06 PST

The collapse of ABC Learning has prompted widespread calls for greatly increased regulation of childcare services. According to Deputy Prime Minister Julia Gillard, child care needs to be a "highly managed market", not only with regulation of service standards but also with caps on the number of places. Equally, the organisation representing independent private childcare operators, Childcare Associations Australia, has called on the Government not to allow "another childcare monopoly" to take ABC Learning's place. Central planning is in the air. To view the article click read more.

Is it Wayne the bold or Swan the Unready?

Thu, 06 Nov 2008 12:07:47 PST

Is it Wayne the bold or Swan the Unready?

SPEAKING in Brisbane last week, Wayne Swan said that "as Treasurer, I'm effectively minister for markets". His job, he explained, involved more than merely promoting the benefits that markets could bring. Rather, it required taking the lead in "designing markets that can serve the public without blunting the incentives that enable them to allocate resources effectively and generate prosperity". But these needed to be "the right type of markets", which were not "those that reward greed". To that end, they needed to be "creatively constructed and informed by evidence".

An Optimal Policy Framework for a New Broadband Network

Wed, 29 Oct 2008 13:32:15 PST

While there are at least seven full facility-based broadband competitors, competitive facility-based fixed line investments appear to be declining in favour of use of Telstra’s network. It also appears that no carrier is presently willing to make significant fixed broadband investments without substantial regulatory commitments and protections relative to those currently available.

Summit's verdict is bigger government

Mon, 15 Sep 2008 14:07:08 PST

The word from Canberra was that the public sector can never be big enough, writes Henry Ergas.

THE 2020 Summit proposals form a very mixed bag. Some seem fanciful, and will doubtless be dispatched by the bureaucrats to that great resting place in the sky of ideas better forgotten. With others, tortured drafting, presumably reflecting the triumph of compromise over clarity of thought and expression, make it difficult to understand what, if anything, was intended. Yet others, such as the republic, a bill of rights and some form of treaty, have a degree of corrugated charm, recalling the old saw that there were plenty of good and new ideas, but the good ideas had little that was new, while the new ideas were far from good.

PM reforms could hit target and miss point

Wed, 03 Sep 2008 13:58:38 PST

Kevin Rudd's education and health reforms will founder if they focus only on improved central-planning initiatives without allowing users to vote with their feet, advises Henry Ergas.

IF there is one law of economics, it is that if you reward people to do more of something, they will. Assuming that is what you want, so far, so good. But there is a less pleasant corollary, which is this: if they do more of what you are rewarding them for, they will do less of those activities for which they are not rewarded or are rewarded less, with results that can eliminate the benefits you were seeking.

Improving the delivery of public services in the Federation

Mon, 01 Sep 2008 10:21:56 PST

Thank you for the opportunity to address this conference today. I want to start by dealing with a few issues related to the role of Federalism, and then turn to the specific challenge of State government service delivery. Click the link below to view the paper.

Promoting Better Environmental Outcomes

Mon, 01 Sep 2008 10:05:22 PST

Institutional design focuses on the task of providing accountability and effective monitoring of decision-making by bodies vested with the coercive powers of the state in a context where information is inherently limited, costly to acquire and asymmetrically distributed. Click the link below to view the paper.

Fearless watchdog or his master's voice

Mon, 11 Aug 2008 13:13:29 PST

The Australian Competition and Consumer Commission will lose its reputation for independence if it keeps coming up with politically convenient schemes for the Government, warns Henry Ergas

Government spins its way out of trouble

Fri, 01 Aug 2008 13:42:12 PST

Under Kevin Rudd, there's a quick fix to every problem, argues Henry Ergas.

THE Prime Minister stands at the mouth of the Murray and proclaims Australia must act now if we are to save our environmental heritage.

At the 2020 Summit, the best and brightest in the land demand bosses allow employees 30 minutes a day for exercise. Climate Change Minister Penny Wong and economist Ross Garnaut equate an emissions trading scheme with financial deregulation and tariff reform. Australian Competition and Consumer Commission chairman Graeme Samuel tells us a scheme based on far-reaching price regulation FuelWatch) is a good idea because the ACCC's 'rigorous assessment' of its effects found weekly average petrol prices in Perth fell by 1.9c a litre after itsimplementation.

A case where the climate cure is more costly than the disease

Mon, 14 Jul 2008 13:27:08 PST

The Garnaut report's trouble is it costs the problem but not the solution, observes Henry Ergas.

DEMOCRACY, as Arthur Balfour said, is government by explanation: but the explanations must be good ones. The Garnaut report was to explain the basis for the Government's climate change policy.

Unfortunately it leaves open more questions than it answers.

Beware green zealots

Tue, 01 Jul 2008 13:33:15 PST

Reducing emissions is not a moral play, it is a trade of costs and benefits, argues Henry Ergas.

A FANATIC, George Santayana famously said, is someone who redoubles his effort when he has forgotten his aim. With July shaping up as climate change policy month, a good dose of fanaticism seems likely to come our way.

Subsidised farce on four wheels

Thu, 12 Jun 2008 13:22:20 PST

As we hand over the millions to Toyota, will the real hybrid please stand up, asks Henry Ergas

THERE are, Lord Rothschild mused as he reflected on Britain's attempts at becoming an international powerhouse of high technology, two ways of going to rack and ruin. The first is wine, women and song; the second is listening to the advice of engineers. Of these, the first may be the more pleasurable, but the second is by far the more certain.

Kevin 24-7 or 7-11

Tue, 03 Jun 2008 13:47:03 PST

The PM must stop confusing activity with progress and focus on real reform, advises Henry Ergas.

IF Australian public policy formulation is rarely a dignified process, the FuelWatch debate has plumbed new depths. Australian Competition and Consumer Commission chairman Graeme Samuel emerged as the white knight for the Government from which he is seeking reappointment, brandishing an econometric study that claimed to find support for the scheme.

Swan budget signals choice under threat

Fri, 16 May 2008 14:17:40 PST

Variety in a free market is the key to efficiency, so why is Labor eroding it, asks Henry Ergas.

IF there is one lesson that emerges from experience with economic reform in Australia and internationally, it is that choice is the key to efficiency. At the end of the day, it is consumers who are best placed to evaluate the services offered to them by suppliers. And it is the threat of that choice being exercised that disciplines suppliers and ensures that they innovate, invest and provide consumers with enduring value.

Root, branch or tree

Tue, 13 May 2008 14:02:58 PST

The tax system needs an overhaul, not more ad hoc tinkering, insists Henry Ergas.

ALL tax systems are imperfect, but some are more imperfect than others. And the more revenue a tax system has to raise, the worse its inherent imperfections become. Nowhere is this clearer than in Europe, where tax systems have been strained to breaking point by attempts to finance large-scale income redistribution through complex systems of progressive taxation. In Australia, the problems may seem less acute, but the underlying disease is no less chronic and no less in need of attention.

Evidence doesn't back fuel scheme

Fri, 18 Apr 2008 13:17:08 PST

Don't regulate markets on scant research, argues Henry Ergas

ONLY three weeks ago, at a conference organised by The Australian and the Melbourne Institute, Finance and Deregulation Minister Lindsay Tanner was trumpeting the Rudd Government's commitment to letting markets work. Now the Government seems poised to regulate petrol retailing, despite findings by successive inquiries that the market is workably competitive.

A slanted snapshot to take to the future

Tue, 08 Apr 2008 13:37:46 PST

Background papers for the 2020 Summit present a negative view of Australia, suggests Henry Ergas.

IS it possible to examine Future Directions for the Australian Economy without noting that we have just had 10 years of strong economic growth, low to moderate inflation and steeply declining unemployment? Is it possible to do so without mentioning the words industrial relations and the possible effects of abolishing Australian Workplace Agreements on wage determination? Yes, if you are the (unidentified) authors of the background papers for the Prime Minister's 2020 Summit.

More on the ACCC Draft Merger Guidelines

Tue, 26 Feb 2008 06:25:01 PST

Joshua Gans has replied to my comments on the ACCC draft merger guidelines on his blog site. While my comments touched on several aspects of the draft guidelines, Gans only deals with one, which is the guidelines’ emphasis on vertical mergers. In my comments, I suggested that this emphasis was difficult to understand, as vertical mergers rarely raise competition issues (and more often promote efficiency).

The ACCC’s Draft Merger Guidelines: Still a Work In Progress (One Hopes)

Tue, 12 Feb 2008 17:21:38 PST

The ACCC’s draft new Merger Guidelines (“the Guidelines”) are long overdue and, even if for that reason alone, should be welcomed. The Commission’s previous Guidelines, issued in 1999, were the culmination of a lengthy process of elaboration, and represent a substantial and enduring intellectual achievement. But the theory and practice of merger analysis has moved on considerably since then. Updated Guidelines were badly needed if clear guidance was to be provided about the Commission’s approach to analysing mergers.

Should the States Be Paid to Do the Right Thing?

Thu, 31 Jan 2008 14:08:54 PST

Competition policy payments are back in favour, with the Rudd Government, the States and even the Business Council all embracing the idea that States should be paid for undertaking reforms. But even if competition payments were a good idea in the 1990s, do they make sense now? The answer is that they do not.