Sunday 31 March 2013

Policy Positions - Part 2


Economics

My position is that a market economy is the best known way to run an economy, as imperfect as a market economy can be. The government has a role to play in the case of market failure and where it is more efficient to do something collectively, for example roads.

The Australian economy should be run to benefit Australian society. Wealthier Australians should not be punished, but they should contribute based on their capacity.

The government should target lower income earners directly, rather than relying on a "trickle down" effect. Middle class welfare should be replaced with tax cuts, while still retaining subsidies for lower income earners - in order to break poverty traps.

Having stated that we should end this middle class welfare - should Medicare and education be means tested? The case against education being means tested is very strong - education gives an enormous benefit to the economy by minimising structural unemployment, as well as an enormous benefit to the individual.

Health is another area that requires government intervention due to market failure. What would you pay for the medical care to prevent your death? A person's life has infinite utility to that person - so surely it is rational that a person would pay whatever they could for medical care, even if the cost price was much lower.

One only needs to look at healthcare in the US. It is not like private healthcare in Australia. Since there is no competition across the country from a public health system prices are exorbitant and service is worse.

In terms of economic management I support mainstream evidence based quantitative economics. I support saving during the expanding portion of the business cycle and stimulus during the contracting portion of the business cycle. Economists must be consulted in the running of the economy, they are the experts, but they should present options from which the Australian people may choose.

Welfare

Welfare assists the most vulnerable in our society. The elderly, the unemployed, single mothers and the disabled. The largest of welfare spending is on the elderly (2012-2013 budget).

The most important component of welfare is not welfare itself. It is important to remove structural impediments to people working. For example education, childcare and low tax rates for lower income earners.

Issues where welfare should be reformed involve changing the structure of the rules to encourage work. For example a number of welfare recipients would lose money by working - after reduced benefits, tax,  childcare, transport.

A number of people eligible for disability pensions have expressed to me that it is very hard to work after receiving the disability pension. Even if the recipient of a disability pension is well enough to work for a short period, it is then very difficult to get back onto the disability pension and they are treated as liars for the period when they were unable to work.

There is a need to ensure that welfare payments are sustainable which may include a small punitive element.

Industrial Relations

Industrial relations should be concerned with matching the needs of workers with the needs of employers as efficiently as possible. Policies which maximise the value of employee's pay while minimising the cost to employers. Improving productivity and increasing mobility should be encouraged.

War

In my opinion there are no good wars. However there are wars that we need to fight. I am against sending Australians to fight unless absolutely necessary.

I support the Australian troops - they are simply doing their job.

The nature of war is that there will be collateral damage. If a soldier rounds the corner and needs to make a split second decision whether a person is a threat - mistakes are inevitable.

Some people say that we should "stay the course" or "complete the mission" for the sake of those soldiers that Australia has already lost. The problem is that the loss is ongoing.

Furthermore the scope of the mission creeps over time. Iraq's mission was to find weapons of mass destruction - none were there, then to remove Saddam Hussein, then to establish democracy, then to rebuild the country then ad nauseum. Afghanistan's mission was to find Osama Bin Laden. Bin Laden was found - in Pakistan. Again the democracy and rebuilding mission creep was added. All the time a continuing cost was paid with the lives of our soldiers.