And the gold medal for worst policy of 2012 goes to …

I have this piece in The Weekend Australian today.  Read it and weep.  Obviously, quite a few exclusions.

During an election campaign, I like to run a book on the worst policy proposals put forward by any of the parties.  Ironically, I started this competition during the 2004 federal election campaign.  I say ‘ironic’ because the gold medal winner then, by a country mile, was the Medicare Gold proposal put forward by none other than Julia Gillard, then shadow health minister.

Back then, the number of players in my competition was small.  But with the advent of blogging, I have been able to expand the number of punters.  It was a tight run race last election campaign, with strong betting for the Citizens’ Assembly, East Timor offshore processing, cash for clunkers and Tony Abbott’s souped-up paid parental leave scheme.

But why leave it to election campaigns, I thought.  Why not award a gold medal to the worst policy of the year?  In setting up this competition, there are a number of criteria to bear in mind.  Are the objectives of the policy likely to be met by the intervention?  Do the objectives make any sense in the first place?  Do the benefits outweigh the costs? What is the magnitude of the losses to economic efficiency?

By confining the contest to 2012, there are some truly appalling policies that cannot be considered.  The Renewable Energy Target (originally instituted by the Howard government) is right up there in terms of costliness and inefficiency.

And while the carbon tax and all its wasteful paraphernalia, most particularly the Clean Energy Finance Corporation, would normally be a front runner, the legislation was passed last year, not this year. More generally, the regulation of electricity markets should get a guernsey but the mismanagement of this space has been going on for years.

And then there’s the NBN.  Placing a single bet on one technology, costing untold billions and creating a new government monopoly, the NBN would have to be the clear winner if judged over a number of years.  Add the facts that the roll-out is way behind schedule and the take-up rates are pitiful means its long-term winning position is virtually unassailable.

One exclusion from consideration for this year’s prize that does particularly disappoint me is the policy with the silly sounding name, Stronger Shipping for a Stronger Economy.  Sadly, this shameful and expensive sop to the Maritime Union of Australia and Shipping Australia – which will doubtless be completely ineffective – became operational last year.

Not that I need worry too much, because there are plenty of lousy policies in 2012 vying for the top prize.  Here are my finalists:

• Australian Education Bill 2012
• Supertrawler ban
• Illegal Logging Act
• Schoolkids Bonus
• Anti-Dumping Commission
• Road Safety Remuneration Tribunal

Lest I be accused of picking on the government, although governments do implement policies rather than oppositions, I would point out that a number of these policies have been either waved through the parliament by the Coalition or are stolen from the Coalition play-list.  The most notable example of the latter is the Anti-Dumping Commission.

I was very tempted simply to award the gold medal to the Australian Education Bill 2012 without considering the other entrants.  This must be one of the few times that there are more words in a second reading speech than there are in a bill itself.  But here’s the real kicker: it is a law without legal effect.  Section 10 states that the “act does not create legally enforceable obligations.” It is a complete con and an offence to parliamentary processes.

Of course, there is the guff attached to the bill, including one of the aims that “Australia will be placed in the top five countries in reading, science and mathematics, quality and equity in recognised international testing by 2025”. Let’s face it – there is no chance of this being achieved.  The recent results show Australia’s international education standing has actually deteriorated, notwithstanding the close to 40 per cent increase in per capita spending on schools in the past decade.

I am very tempted to award the gold medal for worst policy to the supertrawler fiasco simply on the important grounds of failure to comply with due process.  Here was a venture into which the owners had invested millions and spent years securing all the relevant approvals.  The science was also on their side – one large trawler would inflict less environmental damage than a number of smaller ones.

All this counted for nought when the government faced some voter resistance and strong opposition from their partners in government, the Greens.  Notwithstanding a disagreement between two ministers, the pin was pulled and the taxpayer can look forward to forking out substantial monetary compensation – and rightly so – to the owners of the venture.

There is no doubt that the Illegal Logging Act could easily be awarded the medal.  Just what the Coalition thought it was doing when it voted to allow the bill through the houses of parliament is completely beyond me.  The law reverses the onus of proof so all importers and users of timber have to be able to prove that timber being sold or used has been legally harvested.  Of course, the real aim of the Greens is to kill off all harvesting of hardwood timber, an aim that might well be achieved.

And what was the government thinking when it introduced the Schoolkids Bonus?  After all, the savings from ditching the under-utilised education tax refund could have come in handy to secure the predicted wafer-thin budget surplus.  But having given in on the solid idea of reducing the company tax rate, the government opted to spend the ‘proceeds’ by handing over regular and completely unjustified cash handouts to parents with school children.  All up, just a bit of brazen vote buying, which hopefully – from the government’s point of view – will do the trick in the western suburbs of Sydney

It is early days for the Anti-Dumping Commission, but here is another example of a sop to the union movement and certain companies.  Don’t you just love the idea of anti-dumping?  The Prime Minister defined the practice of dumping as unfair because “imported goods are sold in Australia at prices below their normal value, injuring local businesses and their workers.” Define “normal”, Prime Minister.

And how does the Anti-Dumping Commission sit with the advice given by Austrade to Australian exporters to price at marginal cost in order to get into overseas markets?  There is an assumption here that we are all dying to pay more for the goods we purchase.  Let’s be honest about this – the Anti-Dumping Commission is just another industry protection racket

But, as they say in the classics, there can be only one winner.  The gold medal for worst government policy for 2012 goes to the Road Safety Remuneration Tribunal.

Notwithstanding the fact that truck road safety has been actually improving, the Transport Minister, Anthony Albanese, has been on a promise to the Transport Workers’ Union to introduce this costly and ineffective intervention for some time.  Not that the big transport companies will be complaining.  Roping in owner-drivers and extending responsibility to all parties in the chain suits their cartel-like ambitions very well.

From July, a new section of Fair Work Australia has been tasked (I am really on to this government lingo) with setting the pay and conditions in the road transport industry.  It covers all manner of issues.  Recently, there has been a call for suppliers to pay for any waiting times that drivers must endure.

But here’s the real kicker.  When the regulation impact statement was prepared to consider the establishment of the Road Safety Remuneration Tribunal, the cost-benefit analysis clearly demonstrated that the costs would exceed the benefits. In fact, the net present value of the policy was estimated to exceed negative $200 million, principally because the costs “will be passed on in the supply chain and ultimately paid for by consumers”.

Yes, I hear the squeals of complaint about policies I have missed, but the judge’s decision is final.