March 01, 2009 | Ronda Jambe

Government as jukebox

There’s nothing wrong with a good aporphism/cliche, and ‘he who pays the piper calls the tune’ is as reliable as they come.
The previous government gave about $18 million (that’s taxpayers’ money) to Pacific Brands, and the current government is now disappointed that the execs have used some of that to triple their salaries while presiding over the demise of quite a few jobs in the perennially endangered textile, clothing and footwear industries.
Disappointed perhaps, but not surprised. Government is, among other things, a mechanism for redistributing resources, much as a jukebox transforms loose change into music. The idea is that if you press the right buttons, you get the song you want. With government, the outcomes more often seem to rely on nebulous winks and nods, or perhaps wishful thinking.
If you give people money with no strings attached, you can’t really expect them to spend it the way you want them to. As with the pre-Christmas bonuses to those on pensions: was that intended to be a sop for the pokie industry? This taxpayer isn’t happy with that outcome.
Back to the $18 m subsidy to Pacific Brands: what is the real game here? It seems to me that trying to hang onto lowly paid and lowly skilled jobs for Australians and Vietnamese immigrants isn’t really a higher good than letting those jobs go offshore to even more lowly paid and lowly skilled Chinese. Further down the track, these Chinese jobs will translate into purchases of Australian coal and iron, and thus employ more Australians.
Some believe the global crisis is at least partly about oversupply of manufactured goods. It is certainly about over-enthusiasm for the development of more capacity, and the larger pie of debt that underpins it.
What if we are all blackbirds in the same pie? What if the pie is finite, rather than a magic pudding? What if government has been sloppy or worse in not demanding that exec salaries be hemmed in as a condition of these subsidies?
The Economist magazine argues, and I agree, that subsidies for manufacturing are purely distorting of the economy, and that government is not very good at allocating lottery tickets to winners and losers. The jukebox is all too often a random choice of what music is playing after the money runs out.
On another sad note for the Rudd gov, it seems that their little song about increasing transparency in government was no more meaningful than a nursery rhyme, or perhaps an advertising jingle. But if you are dead set on a trading scheme that will not reduce our emissions or contribute to the pubic good, you wouldn’t want people to be able to follow a reporting and auditing trail, now would you?
The government will be pouring many thousands of times more money than $18 m into the jukebox of subsidies, this time to the fossil fuel (read coal) industry. And there will be even less liklihood that the song we will hear will have anything to do with Australia’s long term resilience. The writing is on the wall for coal globally, and it ain’t written in invisible ink.
Thanks to the wonders of internet activism, I have found out (and am really hoping you are interested) that the government’s Department of Climate Change has put out draft legislation to amend the National Greenhouse and Energy Reporting Act so eliminate public disclosure of heavy polluters’ emissions.
Following on accusations this past week that Penny (ah, Penny, I had such high hopes for you!) and Kev are deliberately encouraging public misunderstanding about the potential benefits of their Emissions Trading Scheme, this is a low blow indeed.
GetUp shot the info around, and apparently the gov has only allowed a few days for comments on this draft legislation.
Now whatever you might think about climate change and its causes, it would be hard to argue that good public policy would allow less transparency on this hot potato issue about who is emitting what.
But don’t take my word for it, you can ask them yourself:
Another few thousand dollars of government (the taxpayer again) coinage has been paid, on my partner’s behalf, into the jukebox to hear the song ‘rural broadband’. He applied, and a company received, $3000 from the federal gov to install a satellite internet receiver on our wanna-be eco shed at the coast. It took about 3 hours to install, and if cable TV dishes are any comparison, the dish itself isn’t worth more than a few hundred. Who knows? I guess the sign up fees for domestic access to satellite was a big part of the bill. In any case, that seems a lot of money for a little job, but we are grateful to have other taxpayers pick up the tab. And while I don’t know what other arrangements could have avoided that gov subsidy, surely there are other possiblities, such as microwave.
Maybe I should have called this blog ‘government as jokebox.’

Posted by Ronda Jambe at 8:59 am | Comments Off on Government as jukebox |
Filed under: Australian Politics

No Comments

No comments yet.

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.