Of clowns and treasurers
The Monthly is one of Australia’s premier political current affairs magazines. The Australia Institute’s Richard Denniss provided the cover article for the current edition, titled 'Of clowns and treasurers'.
The response has been staggering. As of Thursday, over 18,000 people had shared the article through their social media accounts (follow facebook or twitter). The reach and readership is enormous. The Monthly have now made it free to access the article online.
Thankyou everyone who has shared the article, posted kind words or contacted us with feedback. If you haven’t already, read an excerpt of the article below, along with some other big issues of the week including mining, the ABC and taxes on booze.
Excerpt from Of clowns and treasurers by Richard Denniss
I remember my first lesson in economics like it was yesterday. I’d never heard a bigger bunch of crap in my life. It made no sense. The assumptions were flawed. The examples were ridiculous and the conclusions worse.
Burned into my memory from these first lessons is the sense of frustration and shame I felt. No matter how hard I tried to express my concerns, no matter what I said, my teacher’s face told me that he’d heard it all before. If I wanted to pass, I would have to agree. Greater minds than mine had puzzled over economics. My job was to remember it, and regurgitate it. And regurgitate it I did.
My high school economics teacher was a great teacher and a nice bloke. But I hated his class more than all my other classes. It wasn’t him that was frustrating; it was the language of economics. I decided to become an economist, vowing never to make anyone who doubted what economists had to say feel stupid.
Catholic priests once preached to the people in Latin to ensure that their audience had no idea what was being said. The purpose of the sermon was not to explain or persuade. The purpose was to silence. How can you criticise something you don’t understand?
Economists often speak in Latin, and in Greek. We love to wear folk down with a few deltas and gammas before finishing them off with a bit of ceteris paribus. But one of our best tricks is to use words that sound like English but to which we attach our own very specific meaning. We use simple-sounding words like “efficiency” and “unemployment” to draw the unsuspecting into our conversation. Then we slam the door on their fingers when they admit to thinking that unemployment is measured by the number of people on the dole (it’s not) or that efficiency means reducing waste (not to economists it doesn’t).
While economics provides a bunch of simple tools to help break down complicated problems, the language of economics is more frequently used to confound and confuse. Especially when it’s politicians talking about economics.
The primary purpose of the econospeak that fills our airwaves, most of which is complete nonsense, is to keep ordinary Australians out of the big debates about tax, fairness, climate change and the provision of essential services.
Huge week in mining
It’s been a massive week for mining in Australia. The price of commodities are dropping, as our export quantities hit record highs. A giant coal mine that fails every economic, environmental and logic test was approved. NSW has again changed approvals processes. The world’s biggest coal project in the Galilee Basin has begun to look like the limb-less knight in Monty Python.
There’s too much to cover here and now, but our Director of Research, Rod Campbell will be writing up a full review of the madness in a special bulletin, out this weekend. This will go to The Australia Institute’s Mining e-list. If you’d like to join the list- subscribe here.
The Abbott government campaign to defund, editorially intimidate and now boycott the Australian national broadcaster is a deeply unpopular one. To recap the last 18 months or so:
- The 2014 budget saw the Government break a clear election promise to strategy and announced the divestment, in the form of a $254 million cut to the ABC budget.
- In January 2014 when the Prime Minister suggested that the ABC instinctively took "everyone's side but Australia's” and calling the organisation “un-Australian”.
- Last week, the Prime Minister enforced a boycott of appearances on the ABC’s top-rating Q&A program by members of his Cabinet.
While there may be some benefit to the Liberal party if editorial decisions are affected, the publicity around such an open and brazen attack on the ABC is unlikely to be advantageous.
The Australia Institute commissioned a ReachTEL poll in late April in blue-ribbon Liberal electorates held by Christopher Pyne, Joe Hockey and Malcolm Turnbull.
The results of the polling, indicate the majority of voters in these Liberal held seats oppose the cuts to the ABC, while an average of just 31% supported the budget cuts. Nearly two-thirds of those polled supporting protecting the ABC from political interference by enshrining its role in the Constitution. Previous polling has shown that the ABC enjoys much higher levels of trust than the Abbott Government.
This was reported across the media, including this article in the Sydney Morning Herald. The ABC’s Media Watch program featured our Chief Economist, Richard Denniss, reviewing the polling results – watch here.
The Goon Show: Report looks at how we tax grog
The Australia Institute was approached by the Foundation for Alcohol Research and Education (FARE) to look into the way wine is taxed in Australia. The full report is published on our website - here.
The findings were interesting, with a massive tax advantage for bulk, cheap wine over all other types of alcoholic drinks in Australia. It works, in effect, as a subsidy to bulk winemakers in the order of a billion dollars a year. The tax treatment of wine, described by the Henry tax review as ‘incoherent’, has distorted the industry, favouring industrial-scale production of wine, which attracts close to zero tax. This is despite the nature of bulk wine production in Australia – done in hot inland regions, reliant on heavy irrigation, and attracting a paltry price for growers.
The report modelled changes to the tax system which could be good for consumers, winemakers, and the federal budget. By removing artificial incentives favouring the lowest quality of wine, growers would see more consumers move to a higher quality product. Improving Australian wines reputation for quality would likely increase revenue potential for exports, as well as better positioning local products against foreign imports.
The Australia Institute in the media
The Drum: Super tax problem
The Conversation: Rising electricity demand could be here to stay
The Saturday Paper: The Coalition's 'evil twin' lobby firm
Media Watch: Front benched from Q&A
Climate Spectator: What would it take to make the NSW coal industry happy?
Canberra Times: Senate reform: Careful what you wish for