Monday, January 24, 2005


Sorry - dropped off the map for a while. It was a strange weekend. I am not really into the idea of writing about the big N’s 30th on Saturday. There are two things that may be said:
(i) I don’t go well with cocktails.
(ii) I can’t say much as I don’t remember much. Well and truly a kick back to the teen years.

Friday night was awesome. Up there with my all time best of gigs (I smell a list there in future), and totally justifying the New Year policy of seeking more musical and cultural experiences here in Melbourne. Because we can. Now, I am not a music writer in any way, so I will try not to wax lyrical about what I saw. All I want to say is that I saw an absolutely stunning gig at the Corner.

Unfortunately we missed the first set played by support band Because of Ghosts. Via tania started as we got there, and they were enjoyable, but nothing all that much. Because of Ghosts played a second set, much to our enjoyment (I am listening to their EP at the moment — it is worth it). Little drummer dude was wonderful — driving the band with such a perfect sense of rhythm (as a percussionist should possess). I have never seen a percussionist stand there and clap a guitarist into time on stage before. Strict taskmaster, hey? These guys have a lovely sound, and I hope to see them again. Soon.

But the biggie of the night was the headline Tortoise. It is hard to actually say much about their performance, because there is no way that I can do it justice. I wasn’t really into Tortoise before Friday. I had only listened to their album, Standard, a couple of times before (I have now listened to it, and the preceding LP TNT quite a number of times).

So, in a sense I am jumping on the bandwagon. That being said, I am certainly glad I got to experience them, and you gotta get on the bandwagon at some stage. I am glad that I have found Tortoise. They produce a complete and thoroughly marvellous aural aesthetic with such an intense and methodical approach that is truly a joy to behold. And they just keep on going and going. So good.

It was one of those experiences that just leaves you standing there with a silly grin, shocked, happy, and not really knowing what to say.

Wednesday, January 19, 2005

As everyone is going on and on about the ALP leadership situation, I will endeavour just to keep this short. Not much has changed today — Gillard and Rudd (who would fit nicely on a ticket together, in that order) are still neither in nor out. Beazley is still the only one in, although this is enough to constitute a split, as pointed out by Andrew Bartlett.

A good synopsis of the opinions going around in the sphere-o-blogs is presented with customary style by Jess @ ausculture. Big ticks for finding the article on Conroy — that is an excellent read. Latham was certainly right — if Conroy is a rooster, he sure is a cock.

Questions to ponder down at the pub tonight:
(i) If Beazley is to stand unopposed is that a sign of unity?
(ii) Or does it just show that there is a lack of alternatives?
(iii) Is this just a glass half full/empty type problem?

Tuesday, January 18, 2005

maybe things aren't as bad.

I am trying to be optimistic here. Actuarial psephologist (amongst other things) Andrew Leigh has pointed out that, within hours of Latham's resignation from the ALP leadership, Labour has shortened from $3.00 to $2.55.

He equates this to an increase in the probability of an ALP victory at the next Federal election from 33 to 39 per cent. And this is for a party without a leader.

money on the fat man from freo.

I don’t like it, but now that the pancreas has won and Latham has resigned, the ALP will return to Kim Beazley, because of his experience at losing. That is what the ALP seem to be good at these days: losing elections, losing support, losing their way.

This pisses me off in so many ways. Here are some of them:
(i.) We’ve been there, done this. What can Beazley offer that we haven’t seen before?
(ii.) Beazley played the seminal role in turning the ALP into the ill-defined mess that it is today, pandering to the right in such a manner that that the ALP gave up its ideological basis (yes, I am willing to argue that they still had such a basis under Hawke/Keating), which I think that is the root of the problem today. There is no ideological differentiation between the ALP and the Liberal party in Australia. Beazley is not going to re-establish this.* He is going to continue to try and battle with the Libs on their terms, and will lose every time.
(iii.) There is no viable alternative to the fat man. There is just no one there who can realistically lead the party. Please guys, prove me wrong.
(iv.) Oh Carmen, why did you have to get involved in the business with Penny Easton? You didn’t need to do that, and you could’ve been here for us when we needed you. Not that the NSW Right would let you in, anyway … but I can still imagine what could have been. You would have been a fine leader of this country, if you just could’ve told the truth.
(v.) I still will have to support Kim, because he is the only thing that is sort of standing in the way of honest John and his band of merry neo cons. How screwed is the left?

* Neither did Mark, but at least I had hopes when he began.

Monday, January 17, 2005

are you for real?

I was having breakfast this morning, and was reading my beloved Guardian when I came across this story.

Basically, our revered Queen and delightful Charlie are the biggest recipients of farm subsidies in the UK due to the ridiculous amount of land they "own" (I'm sure they worked real hard for it).

This pisses me off on so many levels:
(i.) That they, in addition to all the other special treatment they get, receive agricultural subsidies to run farms that would not return a profit if it was in competition with the rest of the world (otherwise, why would they need to be subsidised?).
(ii.) I am not sure what they actually farm, but this protectionism is likely to be giving them an unfair advantage over farmers elsewhere in the world, making it harder for them to sell their product at a profit.
(iii.) This makes stuff more expensive in Britain (according to Ricardo's theory of comparative advantage).
(iii.) If you are going to subsidise an industry, surely it is to protect a workforce for some reason or another (not that I generally agree with this, although there are exceptions, but if you are going to do it, please give the money to those working the field, rather than our struggling royals)

THe good bit about this story is that the Guardian got access to this information through the British Freedom of Information Act. As former the UK Agriculture Minister said:
This is a great victory for the Guardian. When I was a minister I had a struggle to be allowed to see the individual figures, let alone be able to publish them. They will reveal that some 80% of the subsidy goes to 20% of the farmers.

FoI is a good thing. So is the Guardian.

poverty and tax: effective marginal tax rates.

Effective marginal tax rates as a potential disincentive to work are certainly a problem, and have long been recognised as such, by both sides of the game. The problem is, as Gavin Wood points out, the question of the effects of tax arrangements on poverty (and housing) are frequently put in the too hard basket in the political arena. I feel that part of this problem is that people are only thinking about the initial effects of the tax system, and are not considering the interaction between the tax system and welfare regimes. This is where effective marginal tax rates come into play.

Gillian Beer defined effective marginal tax rates as “the percentage of [a] one dollar increase in private income that is lost to income tax and income tests on government cash benefits”. So, as someone on the dole earns more and more money, the benefits they are receiving decrease, as shown by the red line in the picture below.

This also affects the rate at which their total income (welfare payments plus earned income, shown by the blue line) increases. So when a Newstart recipient’s fortnightly earned income goes over $142, they only pocket 30 cents in every dollar they earn — an effective marginal tax rate of 70 per cent.

Here, the red line shows the relationship between welfare payments (w) and earned income (Y) — as earned income increases, payments can be seen to decrease. The blue line shows the relationship between earned income and total income (earned income plus payments).

Other payments (such as Family Tax Benefits and Rent Assistance which would increase the initial level of payments above $394.50) can lead to other reductions in welfare benefits.

Now, if you are in this position, then are you really going to go out and bust your ass, in a job that you find particularly uninspiring, that has little prospect of further development, when you are only going to pocket 30 cents for every dollar you earn? That, my friends, is called a poverty trap — there is very little incentive to go out and get off the dole. People in the situation are facing an effective marginal tax rate that is far greater than those in the upper brackets.

The main reasons for getting into this were that (i) these lads (whose blogs I enjoy reading) were arguing about the proposed LDP income tax system; (ii) I felt like working out what was happening here (I am bored) and (iii) I thought I should write something today, although I just have to hurry up and get this done, now.

The LDP propose some reforms to try and deal with problem of high effective marginal tax rates. This scheme is not radical — the idea has been around for ages in one form or another.

But it would be tough to get it to work, and there are a number of problems with the proposed system. Notably, there are no equivalence measures (ie. different payments for different family structures) that are described. They also provide no description of the rate at which they would withdraw benefits and the rate at which they would tax. The impression I get is that it is a linear (flat rate) which would lead to something looking like this:

In this figure, p represents the welfare payments received, and where the blue intersects with the horizontal (income) axis is the point where you receive no payments and pay no tax. The LDP set this at A$ 30 000.

I like the smooth transition from receipt of welfare to income payments (ie. negative welfare receipt), which does make for more acceptable effective marginal tax rates. However, this basic model is not progressive — it taxes everyone at the same amount.

I would prefer a model that looks a bit more like this:

Here the effective marginal tax rate is low for welfare recipients and steadily increasing as it progresses into negative welfare benefits (income tax). I have put two lines in there because you need to adjust the point at which the curve intersects the horizontal axis according to family structure (ie. move it to the right as the size of the family increases).

Anyway, I need to get on with stuff. This article looks as though it would be useful to read about effective marginal tax rates in Australia, if you want to know more (although it is a bit dated).

Friday, January 14, 2005

how very exciting.

High drama with high speed car chases around my neighbourhood, into the city, ending on Flinder's Lane. This was followed by a gunman running past my work, highjacking a taxi before crashing it into a tram stop. How good is that?

I didn't see a bit of it unfold, although Collins St was awash with policemen when I went down to have a look.

[Only problem is I can't find the connection to get my photos off my camera, so I have to borrow from the Age.]

Australian spin — friday morning rant

Yesterday I used the term Howardian spin without really saying what I meant. As it is an integral part of Australian political life these days, I think that it should be somewhat expanded upon.

Spin is often imparted through:
- Selective quotation
- Selective use of facts
- Non-denial denial
- Phrasing in a way that assumes unproven truths
- Euphemisms to disguise or promote one's agenda

The Howard government often takes a slightly less subtle approach to their deception. They seem to lean towards outright deception along the lines of:
- “they did throw their children in the water”;
- “Saddam Hussein basically is Bin Laden”
- “they do have WMDs”;
- “I really didn’t talk to those ethanol people”; and
- “interest rates will rise under the ALP (yeah they will. they really will. no really, they really will)”.

This is what I mean by Howardian spin — blatant disregard for the truth in favour by telling an unquestioning audience exactly what they want to hear, ad nauseum. And the Australian people just swallow it, every single time, with any questioning steadily drowned out by the clamour of acceptance.

At the risk of just banging on, this is what I was getting at yesterday, with the Minister for Employment and Workplace Relations. He made no argument whatsoever in support of the work for the dole scheme. He just kept on repeating his mantra: don't knock work for the dole - it works.

As always, this leads to the question — how can Australians be so friggin’ uncritical and generally stupid?

Thursday, January 13, 2005

work for the dole.

Yesterday, there was an interesting article in the Age by Simon Castles decrying the work for the dole program. (Thanks to this fellow for pointing me in that direction - like your stuff).

Today, the Minister for Workplace Relations mounted a limp response to the criticisms that were levelled by Castles. It is not just the completely lame-ass nature of this reply that gets my goat, it is the blatant application of Howardian spin that is the norm these days. There is nothing of value here — there is no friggin' argument.

Dutton says that;
Castles states in his article, "what the long-term unemployed need is real training in real jobs, backed by intensive assistance tailored to them, as individuals". He is exactly right. That's why work for the dole works hand-in-glove with the Government's Job Network.
He doesn’t say how the systems are complementary, or how they have been successful. Not that he honestly can — the system does not provide effective support for long term unemployed. What he does do is go on and reel off some figures totally irrelevant to the argument about the “success” of the Job Network system. He says that;
[A] total of 625,000 job placements had been recorded in the past 12 months. This is a 50 per cent increase on the previous year.
Of course this means jack shit. This means that more people are going through the system, or that people are going through the system more times. In fact it can readily be taken to mean that the job network providers are shit at performing their task of matching prospective employers and employees. This could easily be a function of their incentive structure — I think that they get cash for finding people employment (ie. getting them off the unemployed list) not keeping them employed.*

Dutton then goes on and spouts some numbers regarding ‘commencements’ in work for the dole:
Since 1997 and including approved future projects, work for the dole has and will provide more than 330,000 work experience opportunities for job seekers. During 2003-04 there were more than 74,000 commencements in work for the dole, up 16 per cent on the previous year. In 2004-05 commencements are already up by 13 per cent compared with 2003-04 and on schedule to reach 85,000 commencements.
Again, this is not an indicator of the success or failure of the scheme. It is simply a set of numbers showing that the Howard government is pig headedly progressing with this program.

And that there are no numbers available that indicate that it has had any success.

An appropriate indicator would be more along the lines of looking at the effects of work for the dole on the spells of unemployment experienced by long term unemployed. This is what Jeff Borland and Yi-Ping Tseng tried to do last year in their paper, written at the instigation of the Department of Family and Community Services. They are very definite in their conclusions;
Participation in the Work for the Dole program is found to be associated with a large and significant adverse effect on the likelihood of exiting unemployment payments.
They pose three potential explanations for these outcomes:
- work for the dole may lead to a reduction in job search activities;
- can lead to a stigma effect; and
- it is experience not training, and has no siginificant effect on human capital.

Both Castles and the good Minister refer to this paper. Dutton says;
It is unfortunate that Castles attempts to lend weight to his criticism of work for the dole by citing research from the Melbourne Institute that found that participants in the program were 12 per cent less likely to find a job than unemployed people not in the scheme. That research looked at work for the dole during 1997 when it was a pilot program. Since then work for the dole has undergone major changes that have improved its effectiveness and links with other forms of employment assistance.
It is true that the paper refers 1997 data, because that was all that was made available to Borland and Tseng. Dutton makes no reference as to what “major” changes have been implemented, and provides no evidence at all of any change in effectiveness.

The program does not work, and there is no reason to suggest otherwise. There would be no reason to credit this article with response if it wasn't written by a Government Minister. This is all complete bollocks.

I just wish they would stop insulting our intelligence.

* Will have to look at this more at a later date. The Job Network system is certainly suspect, and we haven't even mentioned the Community Development Employment Projects yet.

Wednesday, January 12, 2005

working it all out.

Okay and here we are. All one of us. Just because we wanted to make a stupid comment on another blog somewhere done by a guy I am pretty sure generally agrees with me, anyway. It's just preaching to the converted. Well I can't be bothered now -- 3 minutes to set up, my ass.

We'll see how this all goes, and then have a look at it tomorrow. Well I can and I will. And I am sure it will be beautiful.

I've guess you have to start somewhere. This game is terribly narcissistic.