Showing posts with label disability. Show all posts
Showing posts with label disability. Show all posts

Friday, October 22, 2021

Morrison's budget report card: could do a hell of a lot better

When it comes to the relative strengths and weaknesses of the two main parties, polling shows voters’ views are highly stereotyped. For instance, the Liberals, being the party of business, are always better than Labor at handling money, including the budget. But this hardly seems to fit the performance of Scott Morrison and his Treasurer, Josh Frydenberg.

Dr Mike Keating, former top econocrat and a former secretary of the Department of Finance, has delivered a two-part report card in John Menadue’s online public policy journal.

His overall assessment is that the Morrison government is guilty of underfunding essential government services on the one hand, and, on the other, wasting billions on politically high-profile projects.

Keating traces these failures to two sources. First, the government’s undying commitment to Smaller Government, but unwillingness to bring this about by making big cuts in major spending programs, such as defence, age pensions or Medicare.

This is a tacit admission that Smaller Government is an impossible dream. Why? Because it’s simply not acceptable to voters. But this hasn’t stopped Morrison and Frydenberg persisting with the other side of the Smaller Government equation: lower taxes.

The consequence is that they underfund major spending programs, while engaging in penny-pinching where they think they can get away with it. Too often, this ends up as false economy, costing more than it saves.

For instance, Keating says, the Coalition has reimposed staff ceilings. By 2018, this had cut the number of permanent public servants by more the 17,000. But departments now make extensive use of contract labour hire and consultants to get around their staff ceilings, even though it costs more.

Second, Morrison’s determination to win elections exceeds his commitment to businesslike management of taxpayers’ money. He’s secretive, reluctant to be held accountable and unwilling to let public servants insist that legislated procedures be followed.

Apparently, being elected to office means you can ignore unelected officials saying “it’s contrary to the Act, minister”.

Let’s start with Keating’s list of underfunded spending programs. The government has increased aged care funding following the embarrassment of the aged care royal commission, but spent significantly less that all the experts insist is needed to fix the problems.

On childcare, this year’s budget increased funding by $1.7 billion over three years, but this is insufficient to ensure that all those parents – mainly mothers – who’d like to work more have the incentive to do so. This is despite the greater boost to gross domestic product it would cause.

The National Disability Insurance Scheme is clearly underfunded – which is why we have a royal commission that’s likely to recommend additional funds. (I’d add, however, that it’s perfectly possible for underfunding to exist beside wasteful spending on private service-providers costing far more than the state public servants they’ve replaced.)

On universities, the government has recognised the need to provide more student places, but failed to provide sufficient funding. On vocational education and training, the extra funds in this year’s budget were too little, too late. They won’t make up for the 75,000 fall in annual completions of government-funded apprenticeships and traineeships over the four years to 2019.

While housing affordability has worsened dramatically, the government’s done nothing to help. Its modest new assistance to first-home buyers will actually add upward pressure to house prices. What it should be doing is increasing the supply of social housing.

Turning to wasteful highly political, high-profile spending, Keating’s list is headed by the JobKeeper wage subsidy scheme. He acknowledges, as he should, that the scheme was hugely successful in maintaining the link between businesses and their workers, so that the fall in unemployment after last year’s lockdowns ended was truly amazing.

Keating also acknowledges that the scheme was, unavoidably, put together in a hurry. At the start of recessions there’s always a trade-off between getting the money out and spent quickly and making sure it’s well-spent. The longer you spend perfecting the scheme, the less effective your spending is in stopping the economy unravelling. The stitch that wasn’t in time.

Remember, too, that since the objective is to get the money spent and protecting employment, it doesn’t matter much if some people get more than their strict entitlement. In these emergency exercises, it’s too easy to be wise after the event. And the more successful the scheme is in averting disaster, the more smarties there’ll be taking this to mean there was never a problem in the first place, so the money was a complete waste.

But it’s now clear many businesses – small as well as big – ended up getting more assistance than the blow to their profits justified, and many haven’t voluntarily refunded it. Keating criticises the failure to include a clawback mechanism in the scheme and rejects Frydenberg’s claim that including one would have inhibited employers from applying for assistance.

Next, he cites the contract with the French to build 12 conventional submarines. The process that led to the selection of the French sub was “completely flawed”. There was no proper tender, with the contract awarded on the basis only of a concept, not a full design.

Five years later we still didn’t have a full design, but the cost had almost doubled. The government was right to cancel the contract, but the cost to taxpayers will be between $2.5 billion and $4 billion.

Finally, spending on road and rail infrastructure projects, which was booming long before the pandemic. Keating quotes Grattan Institute research as finding that overall investment has been “poorly directed”.

More than half of federal spending has gone on projects with no published evaluation by Infrastructure Australia, suggesting many are unlikely to be economically justified.

“In short,” Keating concludes, “there is an enormous management problem with the government’s infrastructure program. The projects are much bigger, but often poorly chosen, and poorly planned with massive cost overruns.

“The key reason is that the government announces projects chosen for political reasons.”

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Monday, February 20, 2017

How Shorten is wedging Turnbull at our expense

Eighteen lobby groups ranging from the Business Council to the ACTU have pleaded with political leaders on both sides to "stop partisan antics" and reach agreement on reform of the energy market, ending all the uncertainty. Fat chance.

They're quite justified, of course. When businesses are making hugely expensive investments in generation plants that may last for 50 years, they need to know what the government's rules are – and that the other side won't come along and change everything.

But such a plea assumes our politicians are prepared to give the good government of the nation top priority.

They're not. On both sides top priority goes to winning the next election.

These days, the two sides of politics are quietly busy getting issues lined up in a way that gives them the advantage in that election.

The pollies play an unending game of "wedge and block". You try to take a position on a particular issue that drives a wedge between the different wings of the other party.

It has to decide whether to be pragmatic and take the position it knows is popular with voters, or stick with the position it nominally stands for and favours the interests and prejudices of the party's base.

If it takes the popular position you've taken, it's successfully blocked your move (but left its heartland unhappy). If it stands its traditional ground, its base is happy, but it's lost votes to you.

You've successfully driven a wedge between it and the voters, putting you on the way to winning.

Each side's goal is to manoeuvre the other side into a situation where the election campaign is dominated by those issues that favour you.

You seek to wedge the other side on those issues where you have a natural advantage (your biases align with the voters') while blocking the other side's attempted wedges on issues where it has the natural advantage.

Labor voters are proud of its advocacy of the national disability insurance scheme and the Gonski schools funding reform, yet Julia Gillard damaged both by trying to use them to wedge Tony Abbott at the 2013 election.

She belatedly proposed an increase in the Medicare levy to help fund the NDIS, hoping Tony No-tax-increases Abbott would oppose it, so she could accuse him of hating the disabled.

Abbott woke up and quietly agreed to the tax increase.

Gillard delayed the introduction of Gonski until the election year (meaning most Coalition states wouldn't sign up) hoping Abbott would oppose it and she could accuse him of hating public schools.

Abbott and his elite private-school shadow cabinet denigrated "Conski" until he woke up and claimed he was on a "unity ticket" with Labor on schools funding – a commitment he ditched the moment he'd won the election.

Look behind all the present argy-bargy between the pollies and you see Bill Shorten trying to keep alive all the key policy issues that got him so close to winning last year's election.

He's having remarkable success retaining last time's wedges against the government because Malcolm Turnbull is hamstrung by the dominant hard right faction on his backbench, which is insisting on doctrinal purity.

Last week internal party pressure caused Turnbull to disown talk of tightening the capital gains tax discount for rental properties, even though this would have blocked Labor's use of opposition to negative gearing to attract younger voters (as well as helping the budget).

Far more voters' kids go to government than non-government schools. We desperately need to move to needs-based funding regardless of school sector, so we can get on with the more pressing issue of lifting students' performance.

But Gillard's version of Gonski is way too expensive (incongruously, because of Labor's visceral fear of offending elite private schools).

It's clear the minister, Simon Birmingham, is working on a compromise, but Labor is refusing to countenance anything but "the full Gonski".

It wants to keep the issue alive and the Coalition successfully wedged.

Most voters accept the reality of climate change and want effective action to help limit it, but with the minimum increase in energy prices.

People of goodwill developed a face-saving way for Turnbull to make progress on emissions reduction without much increase in retail prices, called an "emissions intensity scheme".

Since Labor has a similar scheme, Turnbull could have blocked the climate change wedge without political risk. But the disguised deniers sitting behind him were so opposed he had to swear off it.

Neither side of politics has any interest in finding a compromise that would give our energy sector the policy stability needed for it to adjust to the world's low-carbon future.
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Wednesday, August 1, 2012

No one knows how we'll pay for disability scheme

You may not have noticed, but last week was among the most significant of the Gillard government's term. The commitments made may do great good, but they will also cause much pain and gnashing of teeth in the years ahead.

Last week the nation made it crystal clear to its political leaders - federal and state - it wanted them to get on with implementing the national disability insurance scheme. After decades of turning a blind eye to the difficulties faced by the disabled and their carers, last week conscience struck.

Fine. You're a believer; so am I. But the scheme is very expensive: when fully implemented in 2018, an additional $8 billion a year. Or, as the politicians and the media usually prefer to put it, $32 billion over four years.

To give you an idea, $8 billion a year is more than will be raised each year by the carbon tax or more than twice what will be raised by the new mining tax.

So how will the disability scheme be paid for? No one has any idea. The pollies were arguing about that very question when - urged on by the same radio shock jocks who on other days rail against "debt and deficit" - the electorate put a rocket under them: Just do it!

That's why I have reservations. We behaved like a teenager with his first pay packet who goes out and buys a car on the never-never, without a moment's thought about how he'll fit the repayments into his budget.

Perhaps this was the only way an increasingly self-centred nation was ever going to commit to something so caring but expensive. Had we dwelt on how much it would cost and how we'd be paying for it, we might have made an excuse and passed on.

Even so, the accountant in me remains uneasy. Sometimes in politics, good deeds aren't born of the purest motives. The Productivity Commission report that recommended the scheme called for the pilot programs to begin in 2014.

I suspect Julia Gillard brought it forward a year because she wanted to be seen doing something worthwhile - and something that didn't have Kevin Rudd's fingerprints on it. She committed to spending just $1 billion over the four-year trial phase.

If Gillard has a clear idea of how she would afford the scheme when fully implemented, she's given no hint of it. All we know is that, contrary to the commission's advice, she expects the states to bear some of the cost.

I suspect she's fingered the states as a red herring, intending to draw attention away from her own lack of forethought. That's where we got to last week. She put the wood on the premiers to make a small contribution to the cost of their state's pilot scheme, but many declined. This could have been the usual story - whenever the feds require the premiers' co-operation, their hands go out: What's it worth to you?

If that was the premiers' motivation, I'm sympathetic. Though the states are responsible for provision of many costly public services - law and order, roads and transport, schools and hospitals - their taxing powers have been greatly constrained by the High Court, leaving them heavily dependent on the feds.

John Howard's decision to grant them the full proceeds from the goods and services tax was intended to solve their problem, but it's no longer the "growth tax" it was. Our consumer spending no longer outstrips our income the way it did, and an ever-growing proportion of our spending goes on items excluded from the tax, particularly private education and health.

So the premiers can't reasonably be expected to stump up for anything much. And, indeed, it's the feds who'll have to come up with a solution to their chronic revenue problem. This week a poll shows 84 per cent of respondents oppose increasing the rate of the GST to 12.5 per cent.

But only the Liberal premiers jacked up last week. The remaining Labor state and territory leaders played along. So maybe it wasn't the standard premiers' money-motivated bail-up.

There isn't a politician in the country with the courage to openly oppose the disability scheme. Gillard's lack of courage comes in telling us how she proposes to pay for it. Maybe she's decided she'll worry about that only if she wins the next election.

Tony Abbott's more likely to win it, of course. I suspect the hard-heads on his side had been intending to relegate implementation of the full scheme to the status of an "aspiration" to be afforded only when finances permit.

That now would be a lot harder to do, following the surge of public pressure that forced the premiers of NSW and Victoria to back down after just a day or so. Such forceful expressions of the public's will stay burnt on politicians' brains long after you and I have forgotten them.

Abbott's shadow treasurer, Joe Hockey, is saying it would be cruel to offer hope to the disabled when there was no guarantee the money could be found. In contrast, his more slick-tongued finance spokesman, Andrew Robb, says the full scheme would be introduced in 2018, but this "probably would require the removal or scaling back of other programs".

Don't forget Abbott would first have to cover the cost of abolishing the carbon tax and the mining tax. This is a man who professes to believe taxes must go down and may never go up. Now he's got to find a further $8 billion a year in spending cuts.

I find it hard to believe this would happen. But whatever happens, I foresee much pain and gnashing of teeth.
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Wednesday, March 9, 2011

Money can ease the pain of disability

Did you know there's an expensive policy proposal Tony Abbott isn't opposed to? When it lobbed last week both sides made supportive noises about it so, thanks to the perversity of politics, it slipped past without getting the attention it deserves. It's the Productivity Commission's draft report on the government's desire to establish a national disability insurance scheme.

The scheme would cover people with severe disabilities present at birth or acquired through an accident or health problem, but not due to ageing.

It's estimated that about 680,000 people under 65 suffer a severe or profound limitation in their ability to engage in core human activities. Just under half of these have at least a daily need for help with mobility, self-care or communicating with others. But only about 170,000 are using disability services.

Among those with a profound inability to engage in core activities, about 40 per cent suffer from mental and behavioural disorders such as autism, Asperger's syndrome and intellectual disability. The next biggest groups suffer from diseases of the nervous system, such as multiple sclerosis, of the circulatory, respiratory or digestive systems, and of the musculoskeletal system.

It's easy to look at that list and think none of it applies to me and mine, thank God. That's the political problem: it's not that we have no sympathy for these people, it's that we prefer not to think about such unpleasant topics. But all of us are just a car or household accident away from joining their number.

My interest in the topic comes via my belief that governments should be seeking to maximise our subjective wellbeing - our happiness - not just our material standard of living. One of the best ways to increase national happiness is to reduce the deep unhappiness suffered by many of the disabled and their carers.

People with disabilities are able to adjust to their circumstances and find happiness - but not if the community's neglect allows their lives to be a hellish struggle. The report quotes a psychiatrist saying members of the profession regularly meet parents considering murder-suicide because of their inability to find adequate help for their child.

The present system - or lack of system - for helping people with disabilities has many deficiencies. The most obvious is that in all states there are insufficient resources and gaps in services, so that people with disabilities and their family carers bear too much of the cost.

People with similar levels of impairment get quite different levels of support, depending on the state they live in, whether they live in the city or the country and even the origin of their disability.

The present arrangements are "provider-centric" - organised for the convenience of the providers of assistance - which reduces the ability of people with disabilities and their carers to choose which services they use.

Services are generally narrowly prescribed and don't have the goal of increasing the person's ability to take part in normal life. There are too few opportunities for people to work or participate in the community if they're able to.

People with disabilities and their families often don't have a reasonable level of certainty about the future. In particular, the parents of children with profound disability often worry about how their child will be supported when they get too tired or sick, or they die.

There's a lack of co-ordination between agencies, seen in duplicated and inconsistent methods for assessing people and allocating services, and inadequate links between services provided by different governments.

Services often aren't portable between states, penalising people who move. And there are other injustices and inefficiencies, such as caring for young people with disabilities in aged care homes and keeping people in hospitals - thus blocking beds - because of insufficient funds for minor modifications to their homes.

The report proposes a new national scheme providing insurance cover for all Australians in the event of a significant disability. The scheme would fund long-term, high-quality care and support (such as accommodation, mechanical aids, transport, respite, day programs and participation in the community), but would not overlap with Medicare, social security benefits or aged care arrangements.

Each individual's needs would be assessed and they would be provided with a "support package" portable across state borders. People with a package would be able to choose their own service providers, ask a non-government support organisation to assemble the best package on their behalf and even cash out their allocation of funds and direct them to areas of need they thought more important.

There would be a strong emphasis on helping people participate in education, training and employment where possible. People would be given more opportunity to choose mainstream services rather than those from specialist providers.

A separate national injury insurance scheme would be established for people requiring lifetime care and support for catastrophic injuries, such as major brain or spinal cord injuries. It would be a no-fault scheme and would catch people whose injuries were covered neither by worker's comp or compulsory third-party motor insurance.

The agency overseeing the two schemes would be created by, and report to, federal and state governments. It would have a high degree of protection from political interference. By "insurance" is meant social insurance - the risk of disability is removed from the individual and shared by the group which, because of its sheer size, is most able to bear it without great pain: all taxpayers.

At present, governments - mainly state governments - are spending about $6.2 billion a year. The report estimates the new schemes would cost as much again.

The extra $6.3 billion a year could be covered by increasing the present Medicare levy from 1.5 per cent to 2.3 per cent of income but, rather than start another "great big new tax on everything" outcry, the report recommends just funding it out of consolidated revenue, leaving the government to worry about how it will balance its budget. Funding problem safely swept under carpet.

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