Friday, March 20, 2009

Freedom Of Speech Has A Cost

In our supposedly free society, just exactly how free are we? We profess to believe in freedom of expression, freedom of movement, freedom of association, freedom of political and religious beliefs. In reality of course all of these freedoms have some restrictions, essentially because all liberty carries with it a responsibility and those who have difficulty with being responsible make it necessary to have those restrictions to protect both themselves and others.

For example we are free to hold whatever religious belief makes sense for us, but if that religious belief dictates that non believers must suffer or die then that is no longer acceptable to the community, and laws are imposed to prevent that belief being acted upon. It’s a simple and easy to understand example, and almost everyone accepts that as a sensible approach. But what about freedom of expression? That’s an area which can become much more complicated.

The explosive growth of the internet has created a revolution in free speech and freedom of expression which is unprecedented in human history, transcending national boundaries, and of course the boundaries of both good taste and common decency. As a phenomenon it is perhaps the powerful force for cultural and social change in the world, as well as for education and business. But it comes with a dark side; a world that begins with dodgy marketing scams, unregulated gambling and pornography, and extends to encompass pretty much every imaginable aspect of human behavior no matter how extreme.

It is these more extreme elements which have prompted efforts to impose censorship on the world wide web. No matter how firmly we might believe in the merits of free speech it’s very difficult to confront the reality of ten year old kids discovering necrophilia or bestiality without asking if the price of free speech is too high. It would seem reasonable to take steps to head off that kind of exposure of young children to material which is so extreme. And so we have the plan by the federal minister for communications Stephen Conroy to filter access to the internet for all Australians by compiling a blacklist of websites and blocking access to them. The only problem is it won’t work.

It has been reported that already the supposedly secret list has been leaked, and along with the catalog of depravity there are perfectly innocent websites which have apparently been caught up in the sweep. Senator Conroy has claimed that the leaked list is not in fact the official ACMA list, but even so it does highlight the real difficulties that arise in drawing up such a list. On the now disputed list, a dentist in Queensland, a business which provides tuckshop and canteen management services, a tour operator, a boarding kennel, and even Christian websites have apparently somehow been labeled as being so offensive they deserve to be made illegal. If such businesses were to be affected by the censorship plan, it would have serious consequences. Quite aside from interfering with these legitimate enterprises’ abilities to market their services on line, there is the more serious consideration that they are being defamed by virtue of being listed alongside child pornographers as a threat to society.

On top of that is the reality that no list of offensive websites will ever be complete because it is constantly changing and growing faster than anyone is likely to be able to keep track. No sooner than one site is blocked than its URL will be changed, possibly even shifted to a different country, and in any event a dozen more will spring up to take its place. At the same time there are also concerns that the whole process of attempting to filter the internet will actually slow down the network for everybody. It’s not practical, and while it will block access to a great many sites, it won’t and can’t stop them all. Worse, it will stop sites which are not a legitimate threat.

Ultimately, the benefits of freedom of expression far outweigh the risks, and attempting to impose a blunt form of censorship is not desirable for an open democratic society. However, given the legitimate concerns about addressing the most extreme material and the potential impact on children, it is an important debate, and one in which it is worthwhile attempting to find a more practical solution.

That might centre around negotiating an international agreement of minimum standards with reciprocal agreements for enforcement, making the internet world a bit more like the real world where you are free to break the law, but if you do you will caught and punished. Obtaining such an international agreement obviously carries some challenges, but if there is any jurisdiction which still insists on allowing truly dangerous material to be freely available it should be possible to simply block that whole country from being accessed by the rest of the world.

At least that way the boarding kennel in Maroochydore would still be able to advertise its services.

Thursday, March 19, 2009

There’s Gold In Them Thar Parachutes!

If you have taken the time to read the Prime Minister’s essay on the Global Financial Crisis you probably would not be surprised by the announcement from Wayne Swan that the issue of corporate executive pay and bonuses will be investigated by the Productivity Commission. That inquiry will run for nine months, but ahead of any findings it might make the Treasurer has indicated that the government will move now limit any so called “golden parachute” payments to an amount equal to no more than one year’s base pay unless shareholders vote to allow it.

The rhetoric which has come from both the Treasure and the Prime Minister in recent months has been such that stronger measures would not have been a surprise, but the approach which has been announced is both measured and sensible. Critics might suggest that launching yet another inquiry is simply sideling the issue for another nine months, and that if action needs to be taken the government should simply take it. But it would be wrong for the government to do something as dramatic as regulating executive salaries without any proper examination of the potential impact.

Putting the inquiry into the hands of the Productivity Commission means that an independent assessment will be made on the basis of what is good for productivity and for the nation generally, rather than simply making a knee jerk decision to introduce draconian regulations which could very well prove to be counter-productive. All interested parties will have the opportunity to put their case to the Commission, and if there are persuasive arguments for any particular course of action they will be considered.

In any event I seriously doubt that the Commission will ever come up with a proposal to actively regulate salaries as it would be contrary to the proper workings of a free market. But perhaps it might identify areas where the free market has been distorted by corporate practices which leave the ultimate owners of companies, the shareholders, with virtually no power to control what goes on. Either way, there is another far more appropriate instrument available to government to use to influence activity. Tax.

Actually it is the combination of taxes and subsidies together which provide any government with one of its most powerful tools for influencing all forms of community and corporate behavior. If there is a behavior which the government wishes to encourage it can do so with a subsidy or a tax discount, and if there is any behavior which the government wishes to discourage it can do so with a tax. By far the simplest approach to addressing exorbitant salaries is to penalize them with tax.

This is not a new idea. In fact it is the way things used to be. Decades ago the highest marginal income tax rate was 60%, but only those who were paid around 20 times the average wage fell into that tax bracket. Of course in those days there was no capital gains tax, no fringe benefits tax and so on, so there ways to reward high fliers and avoid the higher rate of tax, but at the same time it did mean that there really wasn’t much point in paying anybody a salary 20000 times the average worker as has happened in the most excessive cases to emerge from Wall Street. It was just too inefficient and wasteful to do so, and as such it constituted a regime which actively discouraged unsound business practices without actually banning them. After all, it could be said that any company stupid enough to pay ridiculous money to executives beyond the worth of their contribution deserves to go broke. But not while the shareholders are denied the opportunity to protect their investment by having some sort of control over remuneration, and not while boards of directors are not held accountable for the limp wristed decisions that they make.

As for the matter of the golden parachutes, it’s all very well to limit the size of such payments to one year’s base pay, but even that remains astoundingly generous in the case of executives who are removed because they have failed. Consider the statutory entitlement to redundancy pay enjoyed by ordinary workers. The starting line is six weeks, a far cry from twelve months. Imagine the screams from executives and shareholders alike if every redundant worker was entitled to twelve months pay! It would be considered to be a calamity of biblical proportions, and the obvious reality that no company could afford such a thing would be shouted by the very people who have enjoyed such privileges themselves.

The reality is that none of these corporate executives are in desperate need. If they have been paid a multi-million dollar salary for a number of years and they don’t have something to fall back on then there is something very wrong. So to place a sensible limitation on the ability of such payments to be made without the approval of the people who actually own the company is only sensible. If any individual has done such a great job that he or she deserves a larger reward there should be no difficulty rounding up the shareholder votes to recognize such an astounding achievement.

I have always said that there is absolutely nothing wrong with rewarding people for a job well done. In fact it is essential that achievement is rewarded or else the whole system falls apart. That’s why it is important that the level of remuneration for any position should reflect both the level of responsibility of that position and the skills and qualifications of the person who holds the position, but the problem has been that the buccaneers have been in a position to essentially set their own salaries and the inevitable outcome has occurred.

Wednesday, March 18, 2009

Bonus Bungling More Perception Than Reality

The federal opposition has been trying for some time now to depict the government as being fiscally irresponsible for splashing too much cash up against the wall in its economic stimulus packages. It has accused the government of plunging the nation into debt, racking up a massive national credit card bill, without delivering sufficient economic benefits to justify the splurge. It has been a message that has met with only modest success, because overall the government has won widespread praise for its response to the crisis and its willingness to take action.

It did seem all the more hypocritical when the opposition was forced to reveal that even if they had been in government they too would have been forced to deliver a budget deficit and accrue a debt which in the larger scheme of things was not much different from the one contemplated by the current government. There is widespread agreement that it is legitimate and necessary for our government to use deficit and debt to fund stimulus packages to both bolster the economy and help shield the vulnerable from the worst of the impact of the global recession.

But it is often the detail which brings even the grandest schemes undone, and so it is with the Rudd government’s decision to dump cash into the economy by way of cash handouts. While it is true that it is quick and can be an effective boost to economic activity, it is an approach that is not without its problems. One of the problems is the risk of upsetting anyone who misses out on the free money. Human nature ensures that there will always be some envy which can accumulate into a political backlash. What’s worse is when those who do receive the handouts are seen to be undeserving.

Following on from the revelation that as many as 60 000 pensioners who live overseas received handouts in the December package, comes the news that the tax bonus due next month will be collected by convicted criminals who are behind bars for anything from muggings to murder, along with tens of thousands of foreigners and expatriates who have worked in Australia during the qualifying period. Such revelations would seem to lend weight to the accusation that the stimulus plans have been ill thought out, poorly targeted, and rushed into effect without proper consideration. Handing out money to foreigners is not going to be seen to do anything to help the Australian economy or to protect Australian jobs, while rewarding prisoners in jail for hideous crimes is just an insult to law abiding people who have missed out on th emoney for whatever reason.

While it’s easy to understand how this state of affairs lends credibility to the criticisms, it amounts to nitpicking to suggest that the leakage of less than one percent of the package into offshore bank accounts somehow invalidates the stimulatory effect on the Australian economy. In practical terms it is negligible. But in political terms it’s a whole lot more damaging. It unnecessarily provides ammunition to critics and provokes resentment in the community. The problem is that the political damage is far worse than the fiscal damage.

How hard would it have been to ensure that free money was only handed out to Australian citizens and permanent residents with a current home address in Australia? How hard would it have been to disqualify prisoners currently in jail for serious offences? By failing to address these matters the government has left itself open to the criticism that it has been reckless with taxpayers’ money, even though the damage is more perceived than real. In politics, perceptions are always important, and the perception that the government has failed to pay attention to detail will inevitably lead to the question of what else they might be getting wrong.

Tuesday, March 17, 2009

Holidays Are Not Holy Days Anymore

Although we all know that we live in what is increasingly a 24/7 world, it is still quite a significant step to have TAB agencies announce that they will be open for business on Good Friday. Perhaps punters will be pleased that they will be able to relax at their local PubTab and make a few wagers on international events in Singapore and South Africa. They’ll even be able to place bets on the local NRL matches being played on that day. At the same time there is increasing pressure from some retailers to allow trading on Easter Sunday, with the argument even being put forward that it would be good for the economy and good for employees who stand to receive penalty payments at the same time. But aren’t we all missing something?

No doubt there will be a response from the religious community concerned that the spiritual significance of Easter is being overlooked and undermined. But it is probably true that good Christians will be doing something other than visit their local TAB on Good Friday, while those who are not religious, or have a different faith, probably have different priorities. Indeed, the question has been asked as to why those who are not religious should be denied the opportunity to follow their chosen pursuit, whether it is punting or shopping, just because there is a day of religious observance. In fact, Robert Nason from Tabcorp was quoted in the Telegraph as saying “All this is discretionary. People have a choice as to what they do on the day and how they wish to spend it. We are a multicultural society."

But wait a minute. Why are we having a public holiday in the first place? The Easter weekend is certainly a welcome break from the daily grind for Christians and Non-Christians alike. But the whole reason the holiday exists in the first place is because it is a day of religious observance. Those who ask why they can’t spend their public holiday in the TAB have completely overlooked the obvious question: “If you are not religious why are you taking a day off?” Of course, that is a rather extreme position, and of course so long as there is a public holiday, people are entitled to spend their time as they please.

So let’s ask instead, if the public holiday is no longer for the purpose of religious observance, what exactly is its purpose? Do we as a society cling to public holidays in order to provide a scattering of long weekends throughout the year? Is it so that people can have a break now and then? Is there an economic benefit in doing this? Or is there only a social benefit? If there is a benefit, is it worthwhile preserving, or is it outweighed by other considerations such as boosting the economy?

So long as more and more businesses, such as retail outlets and service businesses want to remain open for business on public holidays, obviously the more staff will be required to work on those days. As the trend continues, fewer people will actually get to have the day off, until eventually it could get to the point when businesses ask why they are paying penalty rates for special days that are no longer so special. If the TABs are going to be operating on Good Fridays how long will it be before governments cave in and allow race meetings to take place in Australia in order to give the TAB a justification for remaining open, and therefore requiring even more people to turn up for work?

Bit by bit we really are edging towards a 24/7 world that never lets up, and the risk is that we will lose a part of our way of life which is important to us. Public holidays may not be Holy anymore but most Australians would like to think that they are sacrosanct.

Monday, March 16, 2009

Our Pauline!

I can’t help but wonder why Pauline Hanson keeps coming back for more mistreatment at the hands of both the media, and political opponents. I would have thought that after everything she has been through, including the infamous period of imprisonment on charges which were later overturned, she might have had enough. I would have thought that coming back into politics would have been the last thing any sane sensible person who had suffered such indignities would want to do. But, no. Pauline is having another go. So it should be no surprise that some have decided to shoot her down again.

The purchase and publication of photos purporting to be of a nineteen year old Pauline Hanson in seductive poses and very little clothing has provoked an enormous reaction. But it’s not the reaction that some people might have expected. Overwhelmingly, the public has rallied in support of the besmirched Pauline, doing nothing to harm her public image. In fact, quite the opposite, it seems to have increased support for her. Pauline herself has reacted angrily, claiming that the photos are not of her, and threatening legal action against the newspaper.

Obviously the Telegraph believed the photos to be genuine, otherwise there would be no point in printing them and even less in paying for them. But whether they are genuine or not, does it make any difference to the question of whether it is newsworthy? Is it legitimately in the public interest, or nothing more than cheap sensationalism to sell more papers? To be truly pedantic about it, the proof of that pudding is in the eating. It has prompted this enormous public reaction, it has triggered raging discussion, and here I am talking about it now. So it becomes self evident that there is a level of public interest, even if it is of the guilty furtive kind that is more commonly associated with being unable to take your eyes from a tragedy or a scandal.

In that sense this episode has something for everybody. People love to be indignant, so this offers supporters of Pauline the opportunity to be indignant on her behalf. It offers her detractors yet another chance to be indignant at her, along with the bonus of being indignant at the additional publicity it has generated in Pauline’s favour. It offers the Telegraph both sales and notoriety, while offering the rest of the media the chance to be indignant at the Telegraph for being so scandalous, even if most of them are secretly wishing they had pulled it off. It has provided me something to pass judgment upon, and it even gives Pauline the benefit of increased public sympathy. Heck, she might even get elected! The mysterious Jack Johnson is $15000 better off, and even the lawyers can look forward to a payday. In short, pretty much everyone is better off.

While anyone else might have given up years ago, Pauline is seen as still being willing to stand up and have a go. Australians love a battler, and they love her even more when she’s being pushed around by bullies in the press or in politics. Most Australians still believe in a fair go, and what has happened to Pauline just isn’t fair at all. She might be a politician without a grasp of policy, she might propound opinions without the benefit of comprehension, and she might be willing to speak her mind, no matter how small and narrow it might be, but the injustice cannot be allowed to pass unchallenged. She might be an ill-informed, uneducated, inarticulate xenophobe, but damn it, she’s OUR PAULINE!