Tips for the big race

Sarah Berry in Avoiding gel packs and doing a whole lot of nothing may be the keys to running a better race gets some advice from physiotherapist Jason Smith on running a half marathon.

Can you really ensure that certain tax dollars are only spent on roads?

Marius Benson in The fungible world of federal budgets explains that you can't ensure that certain tax dollars are only spent on certain items (e.g. fuel excise on roads).

Business may not be a long term winner from this budget

In Corporate Australia wasn’t really the budget winner after all Roy Green, Dean of UTS Business School, doesn't think this budget was very good for business after all:

The 2014 Budget has been variously celebrated and reviled as a “budget for corporate Australia”. But this assessment is based on the premise that corporate tax cuts and infrastructure spending will provide the major source of future growth and competitiveness in the aftermath of the commodity prices boom.

What if this premise is wrong? What if the evidence shows that well targeted government programs to promote science, technology and innovation are a more effective mechanism for creating long-term growth and jobs? In this case, we may be witness to one of the larger public policy mistakes of recent times, with serious implications for the structure and performance of the Australian economy.

For all the cuts in the 2014 budget the Government isn't spending any less

In Abbott's Fiscal Churn, 13 May 2014 Stephen Koukoulas has taken a look at the Abbott Government's first budget and he's not impressed:

The 'tough' decisions in the Abbott government budget are obvious and will have a high impact on those effected, but they do little more than fund a raft of its pet spending projects. The paid parental leave scheme, defence, the Medical Research Future Fund, roads, airports and infrastructure are big ticket items that receive the bulk of the money saved from elsewhere in the budget.

This shows that the rhetoric of the budget crisis and need for fiscal repair was, and still is, without foundation. A truly tough budget would have made the tax hikes greater and the spending cuts would have been made without spending offsets elsewhere. The spending cuts would have been broader.

Now to the tax and revenue side.

The budget does confirm that tax and other government revenue will be the driver of smaller deficits.

The budget shows that the tax-to-GDP ratio will rise from 21.4 per cent in 2012-13 to 23.2 per cent in 2017-18. This is a tax take that no Labor government has ever bettered in the 45 years back to 1970-71.

The end point is that this is a budget where the government has squibbed on the decisions needed to return to surplus in a timely fashion.

There have been some tough and inevitably unpopular policy decisions, but they should have yielded a more favourable return to the budget bottom line. Alas, the government has seen fit to use the money saved from these tough policy decisions to pump into other parts of the economy and it has relied on a higher tax take to make a few baby steps along the way to an eventual surplus.

In terms of fiscal consolidation, the first Abbott budget is a very small down payment.

Pink Batts Royal Commission could set dangerous precedents

Jack Waterford writes in Pink batts royal commission could rebound on Abbott:

If ever there was anything with a potential to be an own-goal, it would have to be the Abbott government's decision to establish a royal commission into the home insulation program, and the culpability of politicians and bureaucrats for the deaths of four installers, three by electrocution and one from hyperthermia.

...

With all of the benefit of hindsight - and one can expect that Hanger, even from 1200 kilometres away, will have plenty of that - we now know that the Commonwealth should never establish any program whatever without surrounding it with great quantities of red tape, rules, regulations, prescriptions, proscriptions, manuals and warnings. Bureaucrats and ministers - even the prime minister - should anticipate, warn against and effectively prevent every imaginable silly thing a builder - or, in due course, any entrepreneurial chancer - could do. Copious warnings should probably be in at least 16 languages, including Pitjantjatjarra.

No doubt it is for just this purpose that Abbott has set up a taskforce to rid the Commonwealth of unnecessary and cumbersome red tape, particularly in areas which are basically state responsibilities anyway.

Some will listen very carefully to statements made, either by counsel for the Commonwealth, or by counsel assisting, which attempt to set any new standard for ministerial responsibility. It will be new ground to have such a standard for work which has been completely contracted out to others, by householders, under regimes which are supposedly under the regulatory and supervisory structures of ''sovereign'' state governments. This could end up being a standard used to hang a future minister - perhaps an Abbott one.

Decline in taxation receipts

Greg Jericho posted an interesting graph on Twitter that shows the decline in taxation receipts:

Productivity growth vs average income growth

Via Twitter Matt Cowgill has posted this graph of "Productivity growth and the real average incomes of the bottom 90% in Aus & elsewhere":

I think it shows that over the last 40 years the benefits of productivity growth have not gone to the workers.

We're in deficit because of our previous tax cuts

In We were blinded by bounty, now we must act Ian Verrender writes about the real reason for the Australian Government's budget deficit - the income tax cuts of the preceding decade.

Will the Murray Inquiry deliver on Superannuation

In Inquiry's chance to be a super saviour Ian Verrender suggests that the Murray inquiry into the financial system has an opportunity to make our superannuation system more equitable and affordable.

Personally I don't think we should hold our breath.

Jurors think the judges get it right

Public judgement on sentencing: Final results from the Tasmanian Jury Sentencing Study by Kate Warner, Julia Davis, Maggie Walter, Rebecca Bradfield and Rachel Vermey looks at the reaction jurors to sentences imposed by judges. It's interesting because the jurors generally agreed with the sentences imposed, suggesting the community attitude that sentences are too light is mistaken

To quote the forward:

This seminal study, which was funded by the Criminology Research Council, is the first reported study to use jurors in real trials to gauge public opinion about sentences and sentencing. Using jurors is a way of investigating the views of members of the public who are as fully informed of the facts of the case and the background of the offender as the judge. Based upon jurors’ responses from 138 trials, the study found that more than half of the jurors surveyed suggested a more lenient sentence than the trial judge imposed. Moreover, when informed of the sentence, 90 percent of jurors said that the judge’s sentence was (very or fairly) appropriate. In contrast, responses to abstract questions about sentencing levels mirrored the results of representative surveys. The results of the study also suggest that providing information to jurors about crime and sentencing may be helpful in addressing misconceptions in these areas.

Don Russell on Canberra, the public service, innovation, etc.

In Reflections on my time in Canberra Dr Don Russell makes some interesting observations about the public service, universities, industry, innovation, the economy and the role of ministers, the Prime Minister and departmental secretaries.

Tighter means testing may be counterproductive

In Australia’s already progressive tax system doesn’t need further tightening Greg Jericho explains how tightening means testing on welfare can decrease people's incentive to work.

John Stuart Mill said a bit more about the right to free speech

Peter Brent in Yes but what would Mill say? notes that many people like to quote John Stuart Mill when arguing about free speech. However, he notes that these people tend to be selective in their quotes.

These Libertarians are wont to quote centuries old European philosophers, with John Stuart Mill probably the favourite, on how speech should be unbridled. Sometimes it looks like the results of a Google search.

And that’s a game we can all play. How about this from JS Mill:

“there are many acts which, being directly injurious only to the agents themselves, ought not to be legally interdicted, but which, if done publicly, are a violation of good manners and, coming thus within the category of offenses against others, may rightly be prohibited.”

Brent also writes:

Jeremy Bentham, who JS Mill was (at least initially) a disciple of, reckoned all that earlier stuff about “natural rights” and men being “born free” was the biggest load of rubbish—"rhetorical nonsense”, he called it, and “nonsense upon stilts” and “[a]bsurd and miserable nonsense!”

Now I’m even less of a Mill expert than I am a Bentham one, but I’m quite sure he also believed that human rights do not come out of the earth and rocks, but are indeed “decided”, or at least identified, by someone, or some people. Such as his good self.

....

There is no absolute right to free speech in any society, and I’m not just referring to defamation laws. If someone stood outside your property for 18 hours a day, week after week, yelling abuse at you and your family, I’m pretty sure you could get the coppers to move them on.

Is it cheaper to pay the pension to everyone and tax super instead?

A number of reports are citing a paper by the Australia Institute arguing it would be cheaper to increase the pension by $5,000 a year and offer it to everyone in return for removing all tax breaks for superannuation.

Super tax breaks the 'Hindenburg' of the Federal Budget: Report
It's super tax concessions, not pensions that are killing the budget

It wasn't Voltaire after all

John Birmingham in Reassuring lies don't belong in climate debate points out that it wasn't Voltaire who made the famous statement "I disapprove of what you say, but I will defend to the death your right to say it” but:

Evelyn Hall, writing under the pseudonym S. G. Tallentyre (because who wants to listen to a woman, right?) in a 1906 biography, The Friends of Voltaire.

Joan Robinson's book on economics

In Joan Robinson’s “Introduction to Modern Economics” "Rumplestatskin" recommends the economics text book An Introduction to Modern Economics by Joan Robinson.

For Robinson, rebuilding modern economics teaching meant starting with an understanding of evolving economic doctrines. As such, she begins her revolutionary textbook with a summary of the defining battles within economic philosophy, tracing the key players and their moral and logical arguments since the writings of Fançois Quesnay in the 18th century.

...

As a recently trained economist one of the more shocking things about Robinson’s textbook is the way many core features of neoclassical economics are brushed away in a sentence or paragraph as mere metaphysical reasoning. She defines such reasoning as being “applied to a use of language that conveys no factual information, describes no logical relations nor gives precise instructions and yet is calculated to affect conduct.”

...

If you want an introduction to economics that acknowledges the rather limited knowledge generated by the field, and starts from fundamental moral foundations, then you could do worse than tracking down a copy of Robinson and Eatwell’s textbook from your local library’s storage shed.

George Brandis is wrong, consensus on climate change is not an attack on free speech

In a recent interview George Brandis criticised the consensus view on climate change as an attack on free speech, citing John Stuart Mill in support. In Brandis misses the finer points of free speech Henry Martyn Lloyd argues that Brandis is wrong.

Brandis seems to think that it is necessary that debate continue until those in error come to accept their error. Mill had no such requirement and nor should he.

For Mill there is nothing in principle that prevents the forming of a consensus view on any matter, scientific, religious, or political. In fact, Mill held that the ideal of knowledge is true consensus. Ensuring liberty of thought and discussion does not prevent consensus, rather the opposite, the ideal of discussion is convergence on truth even though this convergence will always be incomplete and must never become dogmatic.

Thomas Piketty interviewed on his book and rising inequality

In The rise and fall and rise again of inequality: an interview with Thomas Piketty Jonathan Derbyshire talks to Thomas Piketty about his book Capital in the Twenty-First Century and the causes of rising inequality.

IMF warns that income inequality can reduce economic growth

In IMF Issues Income Inequality Warning, Suggests Ways To Slow It Christopher S. Rugaber reports that:

The International Monetary Fund warned Thursday that wide income inequality can slow economic growth and is proposing ways to reduce it.

Its recommendations include: Raising property taxes. Taxing the rich more than others. Raising the eligibility age for government retirement programs.

...

Government tax and spending policies can be effective in reducing inequality, the report said. Such policies have lowered the income gap by an average of one-third in advanced economies, mostly because of money transferred to the poorest households.

Last month, an IMF research paper concluded that countries with steep income inequality were more likely to have briefer and weaker periods of economic growth. It also argued that efforts to redistribute income don't necessarily hinder economic expansion.

Triclosan may enourage staph nasal infections

Beth Mole writes in Triclosan aids nasal invasions by staph that "Soaps that contain triclosan, a commonly used antimicrobial compound, could actually help disease-causing bacteria [staph] colonize the human nose".

Because triclosan usually kills bacteria, the finding was a surprise, says Boles, who works to understand why only some people harbor staph. A person carrying the microbe in his or her nose, he says, has a much higher risk of a staph infection, which can occur in the skin and blood and cause pneumonia and produce toxic shock syndrome.

In the study, 37 people, or 41 percent, had detectable levels of triclosan in their nasal secretions. Of the people that had very little or no antimicrobial compound in their snot, 27 to 32 percent had staph in their nostrils. This fraction fits with previous studies, which have found that staphcolonizes about 30 percent of the general population. But of the people with higher levels of triclosan, 64 percent carried staph.