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    Full House?

    By
    Max Payne
    -
    1

    As Australia grapples with a crisis of housing supply and affordability, the ‘M’ word is rapidly re-entering the lexicon, this time from both the conservatives and progressives. Yet I can’t help but wonder whether and how much Australia’s current levels of migration influences issues such as housing affordability. I believe this is a red herring that has allowed proper scrutiny of resource allocation within Australia to be lazily sidestepped. 

    Everyone – from economists to politicians and everyday Australians – loves simple solutions to complex problems. The so-called ‘housing crisis’ is no different, and this time the primary culprit appears to be immigration. In the midst of skyrocketing costs and severe shortages of materials, new housing construction is far from meeting growing housing demand. 

    Not only do we have an unrealistic image of what type of dwelling or location we need to live in, but both taxes and regulation act as a disincentive to the type of nimbleness that a housing ‘crisis’ demands.

    The affordability of houses and land has long been an economic challenge in Australia and, as Bob Day pointed out, vested interests tend to keep it that way. High house prices are politically popular given many Australians own their homes, but they also form the backbone of state budgets through inflated stamp duty and land taxes. 

    There is another angle here too – Jobs and Skills Australia reported last month that a whopping 36% of occupations in Australia are experiencing a worker shortage. An economic vacuum exists that can only be filled in the short term by migration – yet apparently there is nowhere to house them. 

    Or is there? 

    Let’s take a look at a couple of graphs …

    What this shows is that the most common type of dwellings in Australia have three or four bedrooms, yet the most common household sizes are single or two occupants. There is also a trend towards rates of single and two person households that has slightly accelerated in recent years. Do we have a ‘housing crisis’? Or do we have a ‘misallocation of housing crisis’? 

    It sounded callous and out of touch when ex RBA Governor Phillip Lowe told Australians to rent out an extra room or move in with mum and dad if cost-of-living was beginning to bite. But perhaps he was right. Maybe it’s not a case of Australia lacking the space for migrants, but that we lack the capacity to house each single or two-person household independently in their own dwellings.  An attitude shift might be necessary.  

    This is highlighted by the fact that migrants on the whole – particularly the international students who anti-immigration economists have in their sights – are in fact adapting to the housing crisis much better than existing citizens. Housing researcher Dr Zahra Nasreen found that the majority of Sydney’s shared house accommodation was filled by international students and other migrants, along with young professionals. 

    Along with the drip-feeding of land supply, which artificially inflates prices, the difficulties in construction, the regulatory burden that stifles higher density infill, and the migration program, misallocation is a substantial contributor to our housing shortage. 

    Do we have a ‘housing crisis’? Or do we have a ‘misallocation of housing crisis’? 

    A major reason for this is stamp duty, which is an insidious block on housing mobility – punishing home-owners financially for up-sizing, down-sizing, or moving closer to employment opportunities. If we are to utilise our existing and future housing stock to its fullest capacity, we must abandon this tax. 

    Another reason is that family homes are not taken into account when assessing eligibility for welfare payments such as aged and disability pensions. This creates an incentive to remain in homes that, if sold for something smaller, would create surplus funds and threaten eligibility.

    So far governments around Australia, particularly in Victoria, have simply targeted landlords, holiday home owners, short stay accommodation providers and empty land owners with new taxes and regulations. It is about time we had a serious conversation not only about how to increase our housing supply but how to maximise use our existing stock. 

    Not only do we have an unrealistic image of what type of dwelling or location we need to live in, but both taxes and regulation act as a disincentive to the type of nimbleness that a housing ‘crisis’ demands. Before we as libertarians abandon important principles such as freedom of movement and succumb to the allure of protectionism, we ought to ensure migration really is the problem they say it is.     

    The Myth of Speed

    By
    David Leyonhjelm
    -
    8

    We are constantly told that Australia has a huge road toll. Every holiday break and long weekend there are reports of how many people were killed, amid inferences that this is a major and growing tragedy.  

    Equally constant is the assertion that the underlying cause is speeding. There is a never-ending campaign, complete with gory advertisements warning of lifelong injuries, telling us to slow down. The message never varies – below the speed limit is safe, above the limit is not. Indeed, we are told that even 1km/hr above the speed limit increases the likelihood of serious injury and death. Vacuous journalists blame speed for almost every accident they cover. 

    And should we fail to heed the message there are speed cameras, aerial monitoring, highway patrols and double demerit periods to remind us.  

    In reality, driving on Australian roads is safer than it has been for over fifty years. Road fatalities, both absolute and relative to the population, have been steadily falling.  Whereas in 1970 there were 3,798 road fatalities, equal to 30.4 fatalities per 100,000 people, in 2022 there were just 1,194 fatalities, a rate of 4.6 per 100,000. 

    Nobody wants to increase deaths and injuries on the roads

    Most of the decline occurred prior to 2000 following the introduction of seat belts, improved road design, vehicle safety upgrades such as disc brakes and impact resistance, and limits on drink-driving. 

    But it has continued up to the present time: in the decade to 2012 the rate of deaths relative to population decreased by an annual average of 4.2%. In the ten years to 2022 it fell by an annual average of 1.9%. 

    The bottom line is, Australia’s road toll is a fraction of what it once was and continues to fall. Fewer people die in road accidents than from the flu or Covid. And yet, rather than celebrate this success, government perpetuates the fiction that things are bad and getting worse. Moreover, despite quite minor changes to speed limits over the period (slight increase on highways and slight reduction in the suburbs), it insists that excessive speed is the primary culprit.   

    All this while most of Europe, which has overall higher speed limits than Australia, has lower road death rates. That includes Germany, where there are no speed limits on major autobahns. 

    Responsibility for this myth lies with the National Road Safety Strategy, prepared every few years by transport and infrastructure bureaucrats from the Commonwealth, State and Territory governments. For many years it has led a crusade with the broad aim of significantly reducing road trauma, resulting ultimately in zero deaths and serious injuries (which it defines as anyone admitted to hospital, irrespective of seriousness or the length of stay), by 2050. 

    It argues speed is a key element in all crashes, and that this necessitates lower speed limits and additional enforcement. State governments, which collect tens of millions in speeding fines, dutifully go along with it. 

    Equally constant is the assertion that the underlying cause is speeding.

    While very high speeds can obviously lead to more serious accidents, the data shows that deaths occur at any speed. Indeed, achieving zero deaths and injuries from road accidents is only feasible if everyone walks (even then, some would die of heart attacks). That would clearly be unacceptable to the community, which implicitly accepts a certain level of deaths and injuries as the price of convenient travel.

    The elevation of speed limits to icon status is both dishonest and absurd. Those responsible for setting limits, road safety experts and traffic engineers in the public service, are determining the trade-off between convenient travel times and the road toll for the entire community. If speed is truly the demon we are led to believe, they are essentially deciding how many people should die.  

    If this all sounds familiar, with memories of recent events during the Covid epidemic, that is not surprising. The gross overstating of a public health risk; a determination to mitigate that risk without regard for economic or social consequences; an assumption that the public are not competent to make their own decisions about bearing that risk. It’s all the same. 

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    As with Covid, it amounts to a classic case of gross bureaucratic overreach. It is the public, not bureaucrats, who ought to determine the trade-off between travel convenience and the road toll. (There is even an internationally recognised method of achieving this, known as the 85th percentile formula.) It is the public, not public health bureaucrats, who should decide whether the road toll warrants greater priority than other causes of death and disease. 

    Nobody wants to increase deaths and injuries on the roads, but a risk-free society is not a rational public health objective. Road users are not sinful children and should not be viewed as a source of government revenue, and public health bureaucrats should not be allowed to play God.

    GST is Better than Income Tax

    By
    Duncan Spender
    -
    0

    In my last article I argued that a flat and broad-based income tax is much the same as a broad-based GST, so we have little reason to hate the concept of income tax more than the concept of GST. I argued this by setting out an imaginary scenario with five citizens, one business, and no government.

    But there is an inherent difference between income tax and GST that makes GST better. I will argue this by adding an additional year to the imaginary scenario, and by honing in on three of the citizens – the three employees.

    Year 1

    In year 1 each employee earns a salary of $100,000, enough to buy 100,000 products at $1 each. 

    One employee is short-sighted and borrows $100,000 from another employee, who we will call the long-sighted employee. So in year 1 the short-sighted employee buys 200,000 products while the long-sighted employee buys nothing.

    Year 1 with no government

    Citizen…receives…and pays…
    The short-sighted employee$100,000 of salary, plus $100,000 borrowed from the long-sighted employee$200,000 for 200,000 products
    The long-sighted employee$100,000 of salary, less $100,000 lent to the short-sighted employeeNothing for no products
    The take-it-as-it-comes employee$100,000 of salary$100,000 for 100,000 products

    To extract the money it demands, the government imposes an income tax rate of 19.8 per cent.

    Year 2

    In year 2 each salary is $104,030, but this amount now buys only 101,000 products because the product price has risen from $1 to $1.03.

    The salary of the short-sighted employee is transferred to the long-sighted employee to pay off the previous year’s debt. As such, the long-sighted employee buys 202,000 products in year 2, while the short-sighted employee buys nothing.

    Year 2 with no government

    Citizen…receives…and pays…
    The short-sighted employee$104,030 of salary, less $104,030 paid to the long-sighted employeeNothing for no products
    The long-sighted employee$104,030 of salary, plus $104,030 paid by the short-sighted employee$208,060 for 202,000 products
    The take-it-as-it-comes employee$104,030 of salary$104,030 for 101,000 products

    Bring Out The Government

    Now imagine instead a scenario where there is a government, and let us assume the government’s taxation does not discourage the citizens from producing as much as in the absence of government.

    In year 1 the government demands enough money from the three employees to buy 60,000 products. The government could get the money via a 20 per cent income tax on the salaries of the employees.

    Year 1 with income tax

    Citizen…receives…and pays…
    The short-sighted employee$80,000 of after-tax salary, and $80,000 borrowed from the long-sighted employee$160,000 for 160,000 products
    The long-sighted employee$80,000 of after-tax salary, less $80,000 lent to the short-sighted employeeNothing for no products
    The take-it-as-it-comes employee$80,000 of after-tax salary$80,000 for 80,000 products
    Government$60,000 in tax$60,000 for 60,000 products

    In year 2, the government ups its demand, and now seeks enough money from the three employees to buy 60,600 products.

    If the government gets the money via income tax, it ends up taking more from savers compared to the amount taken from borrowers, and compared to the amount taken from those who neither save nor borrow.

    Consider the long-sighted employee, who lent $80,000 to the short-sighted employee in year 1, and who receives $83,452 from the short-sighted employee in year 2. 

    Year 2 with income tax

    Citizen…receives…and pays…
    The short-sighted employee$83,452 of after-tax salary, less $83,452 paid to the long-sighted employeeNothing for no products
    The long-sighted employee$83,452 of after-tax salary, plus $83,452 paid by the short-sighted employee, less $683 of tax on interest $166,221 for 161,379 products
    The take-it-as-it-comes employee$83,452 of after-tax salary$83,452 for 81,021 products
    Government$62,418 in tax$62,418 for 60,600 products

    The pre-tax income of the long-sighted employee in year 2 is $104,030 of salary plus $3,452 of interest, summing to $107,482. So the long-sighted employee has higher pre-tax income than the other employees, simply because of a deal struck between peers.

    There is an inherent difference between income tax and GST that makes GST better.

    To extract the money it demands, the government imposes an income tax rate of 19.8 per cent. The rate is lower than in year 1 because the government has dreamt up more income to tax than just salary income.

    The long-sighted employee pays more tax in year 2 than any other citizen ($21,261 compared to $20,578). The long-sighted employee ends up purchasing less than double what the take-it-as-it comes employee purchases, despite the long-sighted employee having gone without all purchases in year 1.

    This intrusion into the deal struck between the long-sighted employee and the short-sighted employee is how income tax punishes saving.

    Even if the long-sighted and short-sighted employees respond to the imposition of income tax by negotiating a change in the interest payment involved in their arrangement, this would just mean they share the punishment of deal-making meted out by income tax, a punishment that the take-it-as-it-comes employee avoids.

    As income tax penalises deal-making between savers and borrowers, while GST does not, income is inherently inferior to GST.

    Resisting centralist power – Part 2

    By
    Bob Day
    -
    0

    Following the Second World War, the most dramatic shift in the balance of tax power between the States and Commonwealth occurred.

    In 1942, under the leadership of John Curtin as Prime Minister and Ben Chifley as Federal Treasurer, all income taxing authority was handed over to the Commonwealth by the States for the duration of the war under the defence power of the Constitution. This was intended to be temporary and to last for a year after the end of the war. However, while the war ended in 1945, the role of the Commonwealth as the sole income taxing authority did not.

    For those concerned at the erosion of State rights through judicial activism, even worse was to come when, following the end of the Second World War, the High Court ruled that income tax collections could exist as an exclusive Commonwealth right under the normal powers of the Constitution.

    Australia has the highest level of vertical fiscal imbalance of any federation in the world.

    During the 1950s the State of Victoria mounted two legal challenges to the uniform tax legislation without success, and in 1959 at a Special Premiers’ Conference discussion of a return of income tax power to the States was on the agenda but could not be agreed. While there remains no legal barrier to the States exercising their right to levy income tax, there are practical (and political) reasons not to do so.

    In the post war era, the centralisation of power continued to be affirmed through decisions of the High Court including the Franklin Dam case in 1988, the Queensland Rainforest case in 1989, Mabo in 1992, and the Wik Peoples case in 1996.

    In speaking of the influence of the High Court and the threat to federalism arising from its decisions, Sir Harry Gibbs, former Chief Justice of the High Court of Australia said:

    “It is a basic rule in the interpretation of any written document and indeed a matter of common sense that the whole document must be looked at in order to ascertain the meaning of any particular part. It might therefore have been supposed that in deciding on the meaning of the paragraphs of the Constitution which confer power on the Commonwealth Parliament, the Courts would have resolved any ambiguity by interpreting the provisions in a way that would maintain the federal distribution of power which the Constitution so obviously appears to guarantee ….. However, since 1920 the High Court has consistently rejected an approach of that kind.”

    The struggle for power continued in the High Court in 2006 with the States challenging the Commonwealth over the validity of the federal WorkChoices legislation, which was enacted under the Corporations power. The High Court overwhelmingly came down in favour of the Commonwealth. While workplace relations laws, prior to the WorkChoices legislation, were a relic of a bygone era and desperately in need of reform, the rights of States in the area of industrial relations were now all but gone. For example, the 1999 decision of the High Court to allow SA State government public servants to be covered by a Federal Award undermined that State’s competitiveness.

    The ability of a small, low cost-of-living State to use its industrial relations system to create a competitive edge over the larger States is important. South Australia, for example, under Premier Sir Thomas Playford, used this strategy (in conjunction with tariffs) to build a manufacturing base in Adelaide in the 1950s and 60s. Likewise Tasmania may wish to trade-off high salaries for quality of life and a green and clean environment.

    The most dramatic shift in the balance of tax power between the States and Commonwealth occurred.

    Undermining the rights of States is also evident in the actions of a burgeoning and, at times, arrogant Federal bureaucracy where the controlling hand of the Commonwealth is exercised through the terms and conditions embedded in funding arrangements with State government agencies.

    Since federation the tax revenue balance has moved dramatically from the States to the Commonwealth. The imbalance that now exists, known as Vertical Fiscal Imbalance, has put the Commonwealth in an all-powerful position, able to dictate to the States how and where funds are spent.

    Australia has the highest level of vertical fiscal imbalance of any federation in the world. The Federal government raises over 70% of all general government revenues, much more than is required to fund its own operations. The States raise just over half what they require to fund theirs. The balance of the States’ financial requirements is met through Commonwealth grants. This gives the Commonwealth enormous economic power and influence, and is inefficient and inequitable. It has the effect of keeping States like South Australia and Tasmania in a position of mendicancy.

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    Ideally, the States and the Commonwealth should only collect taxes for their own purposes with taxpayers and consumers fully informed as to what is a State tax and what is a Commonwealth tax. Those who spend the money should have the responsibility of raising it. It is about accountability, and governments of all persuasions should be specifically accountable for the money they raise and spend.

    The use of Section 96 of the Australian Constitution, which empowers the Commonwealth to make grants to any State “on such terms and conditions as the Parliament thinks fit”, has been used by Federal governments to wield power over the States.

    The Commonwealth’s control over State borrowings has further served to erode the power of States and their capacity to control their own destiny.

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    Liberty Itch is Australia’s leading libertarian media outlet. Its stable of writers has promoted the cause of liberty and freedom across the economic and social spectrum through the publication of more than 300 quality articles.

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    Resisting Centralist Power – Part 1

    By
    Bob Day
    -
    0

    In 1901, when six individual British colonies came together as a federation, it was in an environment of extensive and, at times, torrid debate. While there was widespread acceptance that the colonies could achieve together what they could not achieve alone, there was also apprehension about the extent to which the power to govern would become centralised.

    The enthusiasm and sense of expectation surrounding the birth of a nation was tempered by concerns about the future autonomy of individual colonies. The smaller colonies were also apprehensive about the power and influence the larger colonies might exercise.

    As a consequence, the process leading to the formation of the Australian Constitution was both painstaking and torturous.

    One can imagine how much this would have helped the fledgling Commonwealth-State relationship.

    During the first of the convention debates in 1891, Sir Samuel Griffith, who would later become the first Chief Justice of the High Court of Australia, captured the essence of concerns saying:

    “We must not lose sight of the essential condition that this is to be a federation of states and not a single government of Australia. The separate states are to continue as autonomous bodies, surrendering only so much of their power as is necessary for the establishment of a general government to do for them collectively what they cannot do individually for themselves.”

    In uniting as a nation, each colony agreed to cede a portion of its powers so that the nation might become “one indissoluble Federal Commonwealth under the Crown.” It is clear, both from the Constitution and from the record of the Convention debates, that the Federal government was to have significant but well-defined powers. All powers not defined in the Constitution, known as the residual powers, were to remain the province of the States. However, the ink was barely dry on the Constitution before a growing appetite for centralised power emerged.

    Foundations of Power

    The powers of the Commonwealth were set out in Section 51 of the Constitution, and their scope described in 39 subsections known as a head of power. While the States retained the right to legislate on these matters as well, the Constitution provided that where any inconsistency existed between Federal and State legislation, the Federal legislation prevailed.

    The powers ceded to the Federal government were very wide and included interstate trade and commerce, corporations, external affairs, taxation, defence, quarantine, currency, pensions, banking and many more.

    Centralisation of Power

    As one might expect, the first issue on which the boundaries of authority between the States and Commonwealth were tested related to tax, with the High Court becoming the arena for argument. The gloves came off, the lawyers were primed, and the fight over money began.

    The first tests came in 1904 in Peterwald v Bartley where the High Court examined whether the Constitution prohibited the States from imposing excise duty. This was followed the same year with D’Emden v Pedder, in which the power of the States to impose taxes on Commonwealth activities was rejected. 

    In 1908, in response to the Constitutional requirement that any surplus tax revenues in the first decade of Federation be returned to the States, the Commonwealth enacted legislation to pay these surpluses into a trust account thereby avoiding payment to the States. One can imagine how much this would have helped the fledgling Commonwealth-State relationship.

    In 1910, the Constitutional obligation that not less than 75 per cent of the Commonwealth’s customs and excise revenue be distributed to the States came to an end. While the arrangement was mandated for only the first decade of Federation, the Commonwealth terminated the arrangement as soon as it was legally able to do so, much to the ire of the States.

    In uniting as a nation, each colony agreed to cede a portion of its powers so that the nation might become “one indissoluble Federal Commonwealth under the Crown.”

    Commonwealth government activity and bureaucracy then began to grow rapidly, fed by its growing tax harvest. The years leading up to World War 1 (1910-1914) saw increases in Commonwealth control of the economy and in social services. In 1915, following the entry of Australia into the war, the Commonwealth introduced income tax which co-existed with income tax applied by the States.

    Over the next few decades, both in the High Court and through legislation, the Commonwealth and States battled for territory in a number of areas including tax, defence and welfare services. So extreme was the discontent with the way the federation was heading that some States, most notably Western Australia, South Australia and Tasmania, contemplated secession. In 1933 a referendum was held in Western Australia.

    At the time there was a Great Depression and every State was struggling. Some believed the problems were a result of Federal government policies and actions, particularly in respect of tariffs imposed to protect the manufacturing and sugar industries.

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    The result of the WA referendum sent shock waves through the rest of Australia with 68% of West Australians voting in favour of secession. This was about the same number who had voted to join the Federation only 33 years earlier. The desire of West Australians to separate from the Federation was not fulfilled as the British Imperial Parliament refused to act, claiming that such an action could only be taken with the consent of the Commonwealth Parliament of Australia.

    Got something to say?

    Liberty Itch is Australia’s leading libertarian media outlet. Its stable of writers has promoted the cause of liberty and freedom across the economic and social spectrum through the publication of more than 300 quality articles.

    Do you have something you’d like to say? If so, please send your contribution to editor@libertyitch.com

    None of your Business

    By
    Max Payne
    -
    1

    Housing affordability is a perennial issue that seems to be spilling over into the political domain in a way that is more divisive and acute than ever. And as usual, the political class is more interested in sounding like they are engaging with the issue than actually addressing it.

    Oddly enough it is the left side of politics that has shown the most interest in the critical supply side of the equation. The Liberals on the other hand appear poised to double down on demand-side solutions by rehashing their ‘super for homes’ policy – as if there wasn’t already enough money flowing into property! Meanwhile everyone else on the right merely points to immigration.  

    There is no question that the heart of this issue is the fact that there is not enough housing being built to keep supply in step with demand – I previously hypothesised that more atomised living arrangements could be at least partly to blame, Bob Day suggested land supply was responsible.

    Politicians never talk about the amount of misallocated capital which has resulted from government intervention.

    There are other problems too – government intervention during Covid brought forward demand and deferred builder collapses, aggravated by inflation of material and labour costs. The affordability of borrowing to buy a house has also tightened – with mortgage repayments rising significantly due to interest rate hikes. 

    There has also been a long history of demand-side grants, subsidies, policies and exemptions that have aimed to increase affordability while also maintaining high prices. That’s before we even talk about how much state and local governments rely on higher house prices, particularly via stamp duty and council rates.  

    But there is something more fundamental at the heart of the property market – the extent to which government intervention directs investment away from more productive investment involving genuine innovation. Australia is anti-business, and Labor’s changes to stage 3 tax cuts indicate the punitive attitude government takes towards higher income earners. 

    Politicians never talk about the amount of misallocated capital which has resulted from government intervention. People respond to incentives – and there is very little incentive to invest in innovation and business, but plenty to invest in property – notwithstanding the current constraints.

    The affordability of borrowing to buy a house has also tightened – with mortgage repayments rising significantly due to interest rate hikes. 

    Would you start a small business and deal with endless red or green tape, the highest nominal minimum wage in the world, the above median corporate tax rate, and spiralling energy costs? 

    Given the government’s policy settings you’d be more likely to buy an investment property, write off the interest payments against your taxable income, and claim a capital gains discount if you decide to flip it or sell up later. Perhaps you’d even build a property portfolio by leveraging equity along the way. 

    You’d benefit from the legislative protection of inflated prices that has resulted from real estate becoming such a large pool of private wealth and key source of state and local government revenue. You’d bank on local council opposition to new development, and large public infrastructure projects tying up resources to halt new housing supply coming to market amidst ever growing demand. 

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    Australian property has become such a safe bet that it is now even a well-known vehicle for international money-laundering! 

    Talk of new housing supply, development, upzoning or adjusting the rules around capital gains tax and negative gearing won’t change the fundamentals. Australia is anti-business and anti-innovation. Housing is the only way to get ahead in the lucky country.

    What should the Australian Defence Force do?

    By
    Duncan Spender
    -
    0

    Hint: the answer is in the name

    The Australian Defence Force (ADF) does lots of things it shouldn’t.

    Restrict the trading of others

    The Australian Defence Force (ADF) helps to enforce sanctions.  

    It contributes in varying degrees to efforts to enforce sanctions endorsed by the United Nations Security Council, like sanctions against North Korea, Afghanistan, Iran, Iraq, Syria, and various countries in Africa, as well as other sanctions like those against Russia, Myanmar, and Zimbabwe.

    Sanctions impede and redirect, rather than stop, trade involving the targeted countries.  They rarely bring about regime or policy change in the targeted country, and any impact in this regard is more often negative than positive.  Sanctions amount to a diplomat’s response to a call to ‘do something’ without the commitment of ground troops.

    Deterring and countering restrictions on our own trade

    Some say the ADF can and should defend Australian trade by ensuring the ADF can project power including through a long-range navy.

    This is wrong.

    The likelihood of any attempts to stop Australia’s trade is low, the likelihood of success of any such attempts is low, the impact of a successful attempt to stop Australia’s trade would be far from catastrophic, and the ADF can do little to deter or counter any of this anyway.

    Firstly, consider the likelihood of attempts to stop Australian trade.  Here are some scenarios, from less to more likely.

    • The United Nations Security Council agreeing to impose sanctions on Australia in an attempt to stop Australian trade.
    • An assortment of powerful countries defying the Security Council and attempting to stop Australian trade themselves.
    • One country, such as China, unilaterally attempting to stop Australian trade, including through war.
    • Pirates attempting to stop Australian trade.

    Each scenario is unlikely, except perhaps the risk of piracy, for which traders can arrange their own security.

    The federal government should not have supported this illiberal state policy

    Secondly, consider the likelihood of success of any attempts to stop Australian trade. As we see with current sanction efforts, and even at the height of the last world war, even the most sophisticated campaigns against a country’s trade tend to impede and redirect trade, rather than stop it.

    Thirdly, consider the impact of a successful attempt to stop Australian trade. Despite popular impressions that Australia is heavily trade dependent, Australia has a below-average reliance on trade.  We are more self-sufficient than you think.  So a successful blockade of Australia would cause some hardship, but any claims beyond this are hyperbolic.

    Finally, even in the unlikely event of a successful trade blockade against Australia, what would be the optimal ADF response?

    Nothing.  

    The point is, the cost of having a military powerful enough to counter such a blockade would be greater than the cost of living self-sufficiently.

    The ADF as foreign aid

    The ADF is building infrastructure in PNG, Vanuatu, Fiji and the Solomons, doing maritime surveillance to defend the fisheries of various Pacific Islands, and training military and police forces in various Pacific countries. 

    Such action may fail to deliver political stability and prosperity to the Pacific, and may fail to deter the establishment of Chinese military bases in the Pacific.  Moreover, Australians suffer little from instability and poverty in the Pacific, and Chinese military bases in the Pacific would do little to increase the risk of, or damage from, Chinese aggression to Australia.  

    The ADF’s actions in the Pacific are essentially foreign aid, the funding of which should not be forced on all taxpayers.

    Despite popular impressions that Australia is heavily trade dependent, Australia has a below-average reliance on trade.

    Other overseas operations

    The operations of the ADF beyond the Pacific are unwarranted too.

    The ADF is training Ukrainians to fight Russia and remains in a fight against ISIS in Iraq and Syria, with a current focus on training Iraqi forces. The ADF dons blue berets to police the borders of Israel and the Koreas and to provide security in South Sudan, having recently provided security in Mali.

    These are not our fights. Interested Australians should be free to engage in these conflicts if they so choose, without roping the Australian taxpayer in. The ADF’s engagement in these fights does not represent cost-effective training for defending Australian soil, which is best done through defensive exercises in Australian conditions.  And while ADF personnel are overseas, they are not defending Australia.  

    Enforcing obedience to state law

    During the Covid lockdowns, the ADF was used in support of state police to prevent travel beyond legally permitted limits and to keep state borders closed. 

    The federal government should not have supported this illiberal state policy, and the military should not have been tasked with law enforcement.  In liberal democracies, we train and regulate our military primarily for the exertion of force on enemies, and our police primarily for the service and protection of citizens.

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    Disaster relief

    The ADF is increasingly being used for humanitarian assistance following floods and bushfires. This is not its role; indeed, such activities are a serious distraction from its primary role of the defence of Australia. 

    State governments should bolster the ranks of volunteer organisations to provide humanitarian assistance.

    We are Family

    By
    Max Payne
    -
    0

    The family unit is a core tenet of a functioning free society. A strong, stable family environment provides a much-needed buffer against the encroachment of government dependence – a difficult bond to break. 

    As mainstream media finally begins to report on the potential impact of falling birth rates around the world, the blame is laid squarely at cost of living and the lack of financial stability experienced by those of child-bearing age. The cost of housing is chiefly to blame here, but the broader cost of living leaves young Australians chained to their careers and busy lifestyles. Without a stable financial base, people in their reproductive years are putting off the decision to have children. 

    Governments often harp on about their ‘family focussed’ budgets and policies but, in reality, government policy is increasingly hostile to building strong families. 

    Various taxes and duties create an unsustainable strain on small businesses and families.

    Let’s begin by making one thing clear: subsidies for childcare are not a ‘family positive’ initiative. Parents cannot build strong families while raising their children is outsourced to daycare centres on the taxpayer dime. What these subsidies actually do is incentivise ‘workplace participation’ – hailed by activists as a metric of gender equality, but only really loved by big spending governments which rely heavily on income tax to fund their agendas. 

    The attack on genuine family time is mounted on other fronts too – with early childhood education increasingly touted as a necessary step in development, which by implication cannot be fulfilled at home. What’s more, state governments (which originally initiated Covid lockdowns) are now rushing to walk back public sector WFH arrangements to save the CBDs from their own policies! Thus, parents facing high cost of living are told their children need expensive early education and must not work from home. What choice do they have?  

    Governments often harp on about their ‘family focussed’ budgets and policies

    So what can be done? First, it’s time to bring back income splitting, where the combined income of a married couple is ‘split’ for tax purposes, which can be leveraged by a single household earner to reduce their tax obligations. While tax policy continues to punish higher earning sole providers while incentivising dual income arrangements, children will continue to miss crucial time with their parents at home. 

    Second, major reforms to childcare and the wider education system must be initiated. Childcare should be largely deregulated; the escalating cost is not providing improved value but is an increasing burden on families and taxpayers. Tax credits should be available to families who opt out of government funded schools as well, encouraging homeschool arrangements. 

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    Finally, massive spending and spiralling red tape at all levels of government must be reigned in, as they are fuelling the cost of living crisis that is crippling families. Ever increasing regulation on building codes, the drip feed of land supply and minimum standards for rental properties are drying up housing supply when more are desperately needed. Various taxes and duties create an unsustainable strain on small businesses and families, while increased spending drives inflation, sending mortgage repayments, utilities, food and fuel costs higher than wage rises. Who would want to start a family in that environment? 

    There can be no growth to our society if the family unit is being so critically undermined. How can we expect to raise a generation of independent thinkers and self sufficient upstarts if we can only afford to hand them over to the government while we work all day? If we can afford to have them at all.  

    How much should we pay our pollies?

    By
    David Leyonhjelm
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    0

    Among the many criticisms of politicians that I heard during my time as a Senator, the accusation that they are only in it for the pay and perks, looking after themselves rather than the country and voters, was one of the most common. 

    Sometimes this arose from dissatisfaction with certain politicians, but more often it reflected disdain for them all. Many Australians are convinced politicians are paid far more than they are worth. 

    I am inclined to agree. 

    This prompts the question – should politicians be paid at all? Should we treat parliamentary service as a career, as we do now, or as a form of public service necessitating an element of sacrifice? And if politicians are to be paid, what is an appropriate amount? 

    Not paying politicians would change the types of people who offer themselves for election

    In democracy’s ancient home, Athens, eligible citizens all had a civic duty to participate in the governing assembly. There was no salary, although in the 5th century BC an attendance fee was introduced as an incentive. 

    In the British parliament, on which our democracy is based, service in the House of Commons was unpaid until 1911. Members of the House of Lords, who are mostly appointed, are still unpaid unless they hold an official position. They can claim an attendance allowance plus limited travel expenses, although many do not bother. 

    Politicians in several US states receive little or no pay for their service. In New Hampshire, for example, state legislators are paid just $200 for their two-year term plus mileage. In Maine, Kansas, Wyoming and New Mexico, state politicians are paid less than what Australian local government councillors receive. 

    It’s different for heads of government, most of whom are well paid. Top of the list is the prime minister of Singapore, at more than a million dollars and over five times the pay of ordinary MPs. By comparison Australia is rather egalitarian; our government leaders are only paid about double what ordinary politicians receive. 

    But it is the pay of ordinary politicians that agitates people, and on that Australia is generous. A backbench member of the Federal Parliament receives a package (i.e. salary, allowances and superannuation) of at least $280,000. State politicians’ salaries tend to be only slightly lower. 

    This is far more than what most of them earned before getting elected and, more importantly, is much more than what they could earn if they lost their seat. This has a powerful effect on their behaviour. 

    Not paying politicians would change the types of people who offer themselves for election. In the case of New Hampshire, around half the members of the legislature are retired, with an average age of 58. 

    Politicians in several US states receive little or no pay for their service.

    Perhaps it is reasonable they be paid something. Being a senator can be extremely busy, as I found. There are not only long days in Canberra but also committee hearings and an endless stream of people seeking help. Most politicians treat it as a full-time job and their salary is their sole source of income. 

    But that need not be the case. While the workload for key ministers is typically substantial, ordinary MPs have considerable time-flexibility. Indeed, some undertake additional study or write a book, while a few maintain a professional interest (such as doctors) or remain involved in an outside business (as I did). 

    More to the point, a great deal of the activity of politicians is designed to help them get re-elected. Being paid a handsome salary with generous expenses while doing this gives them a significant advantage over their unelected competitors. 

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    The reason for entering politics ought to be service to the country rather than a lucrative professional career. It should attract people who have achieved more than navigated their way through a party, worked for existing politicians, and manipulated numbers to gain preselection. Politicians should also have a life outside politics that ensures they are not desperate to be re-elected. 

    It is difficult to see how political service is substantially any different from serving on the board of a charity or other non-profit organisation, for which there is reimbursement of expenses and possibly an attendance fee. It should ideally be no better paid than any other job an incumbent is likely to achieve. 

    And, of course, service in politics should be viewed as a temporary role that will end. And when it does, there should be something to go back to. 

    Don’t Pay the Pied Piper

    By
    James Hol
    -
    2

    More than anything, government is incompetent. It is staffed by people who, by and large, have been or would be unsuccessful in the private sector – whether the receptionist at your local motor registration office or the Prime Minister of Australia.

    Ultimately, we are aware of this. However, thanks in part to television programs such as The West Wing and House of Cards, we simultaneously believe the government is comprised of savant-level masters of psychoanalysis and manipulation.

    THE MARKETPLACE OF GOVERNMENT

    Perhaps one of the biggest tactical failings of libertarians and anarchists is the tendency to view the government as one cohesive and comprehensive entity. While it is true that most Western governments are behemoths, they are not homogenous. Rather, they are comprised of a number of disparate departments competing for their slice of tax revenue. 

    Good leaders should be able to admit their faults and avoid acting on emotion

    Both libertarians and authoritarians like to think that government departments work in tandem, sharing relevant information and working together to overcome an obstacle or bring down the ‘bad guy’.

    While they do undoubtedly work together at times, we should all be very hesitant to assume that is typical. Often, it is in the interests of the self-serving bureaucrats who lead various government departments to work against other departments. 

    What is better for the Department of Foreign Affairs and Trade (DFAT) than to prove the incompetence of the Department of Home Affairs? If you were a self-serving bureaucrat at DFAT, you could leverage that to demand more scope, which means more funding, a bigger empire, and perhaps more money in your pocket.

    INCOMPETENCE BEFORE CONSPIRACY

    Whenever we are presented with government inconsistencies, we should always consider incompetence before conspiracy. That is not to say that government conspiracies do not exist, but the level of expertise required to pull off many of the conspiracies posited is something that is simply not possible for the incompetent people who have comprised our governments for many decades.

    When attempting to determine the likelihood of a conspiracy theory being true, it is always worth examining:

    1. The number of co-conspirators required.
    2. The profit or benefit for the conspirators.
    3. The use of unfalsifiable statements and arguments.
    4. The deliberate misinterpretation of events.
    5. The excessive use of baseless arguments.
    6. The number of assumptions required.
    7. The false messiah.

    It is true that most Western governments are behemoths, they are not homogenous. 

    THERE BUT FOR THE GRACE OF GOD GO I 

    Even when we look at recent Covid tyranny, the most likely culprit is old-fashioned pride. While homegrown tyrants like Dan Andrews and Mark McGowan do not deserve to ride off into the sunset of retirement without facing the accountability of the people, that does not mean they were motivated by a global conspiracy to imprison their own constituents and usher in a social-credit-style system at the behest of the World Economic Forum (WEF). Occam’s razor dictates that their real fault was the inability to detach their own pride and ego from the policy they prescribed. We all find it difficult to reverse our instinctive position and admit that we were wrong. 

    This does not excuse tyranny; good leaders should be able to admit their faults and avoid acting on emotion, but it is important we recognise the banal origins of tyrannical behaviour. We are all capable of extreme tyranny.

    THE RABBIT HOLE

    All this is to say that there are some conspiracy theories out there that are ridiculous, yet refuse to die. Flat earth, reptilians, QAnon and fake moon landings are just a few that immediately come to mind. These theories are not only completely ridiculous, but dangerous. They serve to ideologically neutralise those who believe them: instead of directing their investigation towards actual, observable corrupt government and corporate institutions, they are too busy chasing shadows, fighting imaginary adversaries and worshiping false messiahs.

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    What have any of these conspiracy theorists actually accomplished? Have they created a thinktank that has shaped public policy? Have they run a successful candidate? Have they meaningfully gained influence and shaped culture? Have they captured a single reptilian? Have they found real evidence demonstrating the earth is flat? Have they proven anything? All they have achieved is increased sales of their “natural remedies” they advertise.

    Julian Assange and Edward Snowden showcased actual government corruption and exposed real conspiracies in their entirety. Meanwhile, when it comes to grifters like Ricardo Bossi or Q, the revelation is always “just around the corner”.

    Challenging narratives and thinking critically isn’t just about calling out corporatist media propaganda and government corruption, but also the grifters within our own movements.

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