“Washington is talking about a new tax on juice drinks and soda. They say it’s only pennies. Well, those pennies add up when you’re trying to feed a family,” one advertisement said.
If you’re feeding a family with sugary drinks, you’re doing it wrong.
The US is considering imposing a tax of 1c/oz on sugary drinks in order to combat obesity. If the aim of this really is to raise money to pay for public health care, they’d be better off abolishing the corn subsidies which continue to hurt Mexican farmers and pump Americans full of high fructose corn syrup. If the aim is to increase the price of sugary drinks to stop Americans buying them, they’d be better off abolishing corn subsidies.
I’m not opposed to the idea of taxing things in order to pay for the health care costs associated with their consumption, but in this case it’d be better to stop spending money on the subsidy rather than attempting to raise new revenue. This tax is regressive in that, when coupled with the subsidy to corn farmers, redistributes money from the poor Americans who drink the sugary drinks to the large scale farms which soak up the corn subsidies.
The front group “Americans Against Food Taxes” don’t care about the pennies adding up in the household budgets of American families; they care about the pennies adding up in their bottom line.
Peter Costello has quit. Fran Bailey is retiring at the next election.
There’s a bit of an argument happening on Twitter at the moment as a result of Geordie Guy claiming that it isn’t the place of academics to comment on what policy should be, only on what it is, has been and might be. Identifying options rather than making a recommendation. There’s a bit of back and forth between him, Michael Meloni, Kylie Pappalardo, Nic Suzor and myself at the moment but 140 character isn’t enough (as Geordie has said). Here’s somewhere for discussion.
The Senate Economics Reference Committee is currently reviewing the “Government economic stimulus initiatives”. The Head of Treasury and the RBA Governor are due to appear before the committee next week, but in the lead up there have been some invited contributions from other economists.
A key point from many contributors and Senators seems to be about public institutions spending money. In the contribution from Dr Denniss, he says in response to a question from Senator Xenophon:
This idea that, when governments spend money it is wasted and when the private sector spends money it is perfect, I find bizarre. If you cut my interest rates and I go and spend it on something, no-one is ever going to question what I spent it on—that is entirely up to me. The ideology is that it is impossible for me as an individual to waste money.
The more I think about this argument, the more compelling it is to me. The basis of dissent to government spending seems to be on this very argument. I don’t see any reason why private individuals and enterprises are infallible and why Governments will always fail. And I also see no argument as to why it is an all or nothing proposition.
Further on in the hearings there was this interaction:
Dr Denniss —I was just going to say that there is an asymmetry. Once interest rates get to zero, you have a problem.
Senator BUSHBY —I know that.
Dr Denniss —You can keep spending more with fiscal policy—
Senator BUSHBY —To an extent. You run out of money.
This seems to show just how ill-informed many of the senators are. Zero interest rates means that the cost of money is zero. So you can borrow as much as you like and pay nothing for it. Hence it never runs out. Of course this is a ceteris paribas argument, but still the central implication of zero interest seems to have escaped poor old Senator Bushby.
From ABC News:
The head of the USA’s Federal Communications Commission (FCC) has proposed new rules requiring internet providers to respect “net neutrality”, the principle that all online traffic should be treated equally.
“The internet is an extraordinary platform for innovation, job creation, investment, and opportunity,” FCC chairman Julius Genachowski said in remarks prepared for delivery at the Brookings Institution, a Washington think tank.
I am incredibly glad that the FCC is coming out in favour of net neutrality. Nothing threatens the ongoing survival of the internet like attempts to control the flow of information whether they come from corporations or governments.
The prioritisation of one type of traffic over another is “picking winners” and derails attempts at innovation. For example, slowing file sharing traffic down may inhibit piracy but there are legitimate uses of things like BitTorrent, such as the distribution of open source software without relying on a server with a huge amount of capacity.
We could move things like online music stores to a Bit-torrent based system and reduce the download costs of that store, leading to a lower price for the end customer. Things like this can’t happen when companies have control over the speed of certain types of web traffic.
Imagine if Time Warner AOL’s ISP service reduced the speed of traffic to competitors’ music stores (Apple, for one). Net neutrality stops this anti-competitive behaviour.
Interesting debate going on as Rudd has called economic changes under Howard as “indolent”. Terms that would be more appropriate I think are “microscopic” and “retrograde”.
Luckily Peter van Onselen gives a nice list of the major Howard “reforms”:
- Introduction of the goods and services tax. This was quite a mammoth change to the tax system. Unfortunately, it was a recommendation from the 1970s Campbell Inquiry and removed the good features of the old wholesale sales tax system such as progressive rates. If you ignore the rorting of the wholesale sales tax system, then the two achieve basically the same outcome. So it wasn’t really their change and it wasn’t a change the brought about prosperity to all due to structural change.
- Reforms to the inefficient waterfront. This was more of an example of how NOT to change things. The people who’s lives most depended on that employment were bypassed entirely in the process.
- Workplace reforms at multiple stages during the life of the Howard government. The only change of any note was “workchoices” and that was completely un-necessary as EBAs provide the necessary wage flexibility to individual firms.
- Abolition of the cumbersome Commonwealth Employment Service. Under which employment services were entirely privatised and those people who lived in poorer communities had little access to employment services. Whilst the people in the cities (where it is most profitable) were left with a service almost identical. Another small step which is mostly backwards.
- Introduction of Work For the Dole. So instead of getting long term unemployed people into jobs, they gave up.
- Granting formal independence to the Reserve Bank. Another hardly revolutionary reform. While the reserve bank was “not” independent, the government never used the override powers, even though there might have been a case for them to do that.
- The controversial privatisation of Telstra. And controversial is the word. The entire thing was privatised even though the monopoly ownership issues weren’t sorted out. Regulations were going to save us, but as we found out, large firms can play the political game as well.
- Strengthening of the banking system. How? APRA? APRA’s role was part of the RBA. Splitting something off a public institution isn’t reform. It is a restructure.
- Intergenerational planning with superannuation concessions. For goodness sake. These are the people who took the 15% tax off lump sum redemptions. So now why would people purchase pensions? This is the whole point of superannuation; funding household pensions from private savings not the commonwealth budget. Yet another backwards step.
- Setting up of taxpayer funds to plan for an ageing population. These are exactly the type of “sinking funds” Keynes talked about in the 1930s. And it wasn’t in a positive light. Keynes’ arguments under times of shrinking final demand are still relevant. Sure it is a mechanism that should be there, but they will not save you if private investment doesn’t occur and nobody seems to understand that.
These changes pale in comparison to things like the accords, enterprise bargaining, introducing superannuation, floating the dollar and moving the whole of monetary policy to the RBA to name but a few. These changes affected the whole of how we interact with one another and were based on the best available economics at the time. The Howard reforms were either just tinkering (“microscopic”) or implementing failed ideology (“retrograde”).
Yesterday in the senate there was a disallowance motion moved by Senator Milne. This was for the disallowance of “Select Legislative Instrument 2009 No. 119 and made under the Energy Efficiency Opportunities Act 2006″.
Regulations complement legislation by defining the scope of particular terms and limits which are not in the wording of the legislation. They are controlled by the executive, but to maintain some control over the exact nature of the legislation either house of parliament can “disallow” a regulation made by the executive.
This particular regulation involved which firms are exempted from the Energy Efficiency Opportunities Act 2006. The act requires firms to identify (but not necessarily implement) what opportunities exist to improve their energy efficiency for their operations. Interestingly when the first set of regulations was introduced, the most energy intensive industries such as coal fired power generators and smelters were excluded from the requirements of the act for a fixed period of time. Given how loose the requirements under the act are there can be seemingly no reason for this. Why would you require so many firms to conform to identify these opportunities but not those particular firms where the opportunities make the biggest impact? So far I have seen no good argument for this.
Now, “Select Legislative Instrument 2009 No. 119″ extends the exemption. And who supported this extension? The results are here. ALP, Liberal and National senators and Fielding supported this extension. The Libs and Nats would of course be expected to do this and I guess Fielding too. But the ALP were elected on the back of a campaign to do something about climate change and GHG emissions. This was an opportunity to make some meaningful progress unlike the unwieldy ETS with poor targets and huge compensation. But they all voted against doing this.
Which news outlets have reported on this? I am yet to find one.
Apparently the Brisbane City Council is looking to build a museum dedicated to Multicultural and Indigenous History. The obvious location is the old Yungaba Immigration Centre, Queensland’s immigration centre for over 100 years and located in what was once one of the most populous Indigenous places in the area.
I fired off an email to the Lord Mayor in support of Yungaba.
Cr Newman,
I believe the best place for the proposed Multicultural and Indigenous Museum is the old Yungaba immigration centre. Nothing could be more appropriate, given Yungaba’s history as the first point of contact with Australia for many generations of new migrants. On top of that, it is in an area which had a high number of indigenous people prior to the construction of the building.
With Yungaba winning the Q150 State Shaper award, I can not think of a better place than a heritage listed building of immense cultural significance.
I eagerly await your response.
Sam Clifford
I’m starting to be thankful that the ALP remained controlling the executive in Queensland.
The (self proclaimed) alternative seem to have a policy of dealing with problems that can only be described as directly out of the middle ages.
I’d hate to think how they’d deal with an outbreak of a human to human transmitted virus.
Until the LNP can provide an approach to important issues which is less hysterical, then they don’t have a very bright future, no matter who “leads” them.
Australia Post are apparently looking at moving into selling insurance to reinforce their bottom line. Craig James of CommSec says two things in the article which are quite interesting when taken together. He’s worried about whether Australia Post have an unfair advantage in moving into the insurance market with such an extensive network of stores (due to government backing). He then also raises the point that Australia Post might be better run if it were privatised.
If there’s one thing we’ve learned from Telstra it’s that turning a public monopoly into a private monopoly is the worst idea ever. The level of service in the bush would go down dramatically, prices would go through the roof to ensure large returns to shareholders and a string of CEOs would continue to run the company into the ground. You can not privatise a public asset and still maintain a high quality of service. Just look at Victoria’s public transport system.
