In Search of Good Government

This slim book, published through two of Australia’s leading independent think-tanks, principally deserves attention as an important contribution to policy formulation. Although it focuses on Western Australia, the book is of national importance, given the interconnectedness of the state economies, and Western Australia’s disproportionately large contribution to national export income.

Further, though the politically glamorous issues like border control, defence and foreign relations tend to be federal, this book reminds us how vitally important good state and local government is.

Let it never be forgotten that it was in Western Australia in the days of WA Inc that about a billion dollars (when a billion dollars was still serious money) disappeared into dubious—no, not dubious, blatantly corrupt—corporatist/governmental enterprises, of which a non-existent petro-chemical plant was only one, and a bunch of thuggish wielders of power terrified both Governor and media (though not, to its credit, the Liberal opposition) into silence.

It also demonstrates the extent to which private think-tanks have picked up the tasks which government and universities should be doing in furthering informed economic and policy debate.

Both authors are well qualified for this task. John Hyde was for nine years a federal MP and a leader of the parliamentary “Dries”, and since then has been a leading figure in independent think-tanks. Mentored by the great Bert Kelly, he has contributed at least 745 major articles to various publications, apart from books, and has developed a lapidary, truly “dry” style, clear, crisp and well-informed, that is a pleasure to read in itself.

Andrew Pickford is also widely experienced in policy research and formulation. As well as specific policy prescriptions, the authors’ timeless observations of government and the reading lists provided with each chapter make this an excellent handbook for the student. It should, it almost goes without saying, be required reading for every MP, journalist, and political candidate.

The book begins 

The next Western Australian Government will make a series of decisions about the future of this state. These decisions will determine the extent to which the state becomes reliant on transient mineral and energy prices, or offers wider opportunities for businesses and entrepreneurs to flourish. Despite current optimistic growth forecasts for Western Australia based around the success of its resource sector, mining booms inevitably lead to busts—or at least corrections.

The need for sound economic reform never ends and now is the best opportunity the State is likely to enjoy.

In “fiscal imperatives for a prudent government,” the authors quote former Labor MP Gary Johns:

The continuing campaign of promises is killing government and costing taxpayers a great deal of money. None of this is reform. It is about buying votes. And the queue grows as our wealth grows. Every cause has its lobby and every lobby its review. Each asks for the world, and with the politicians vying for votes their dreams are assured eventually.

This is the longest and most important chapter. We remember that more than 200 years ago, Alexander Tyler made the following forecast: 

A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves a generous gift from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury, with the result that a democracy always collapses over loose fiscal policy, always followed by dictatorship. The average age of the world’s greatest civilizations has been 200 years …

The task of this book, and the task the “Dry” movement has, heroically, set itself, is to prove that gloomy forecast wrong.

The book’s specific recommendations include a wide-ranging audit of the state economy, something that might have saved us much grief in the WA Inc days.

Turning to welfare reform, while New Zealand’s Roger Douglas is one Labor/Labour politician whose reform of social welfare programs to make welfare genuinely needs-based receives well-merited praise, I disagree with the high opinion of British Prime Minister Tony Blair. I do not think Blair won elections because of promising, let alone implementing, welfare reform, but because the Tories picked a succession of disastrous leaders (Labour eventually found, in Gordon Brown, someone even more disastrous—a monkey would have won against Brown, and apparently did). Unwed motherhood, followed by the provision of council housing and a lifetime “On the suck” is still an industry and lifetime career for many in Britain, for example. Last year’s riots gave some indication of how widespread social breakdown and hopelessness are there.

A most important chapter deals with the need to stop the endless growth of legislation. Not only is this growth a killer of business, but the very growth itself imposes often crippling transaction costs. My own small law practice must ideally buy expensive new texts virtually every year and spend a vast amount of time and money perusing notices, attending seminars and generally attempting to stay on top of the flood—all costs which must be passed on. Heaven knows the effect on, for example, the big and medium-sized mining businesses upon which the state’s and the nation’s economy depends. The authors demand sunset clauses in new legislation, and I look forward to this becoming standard practice and a plank in party platforms.

Recommendations are also given for reforming water and electricity markets and industrial relations. It is suggested local government policy be reviewed, and many ratepayers would certainly agree. The whole question of the morality of local authorities granting vast amounts of other people’s money to spend on the favoured few in the form of sporting clubs is one example of an area needing stringent critical examination.

While many other specifics are covered (all with valuable reading lists which in themselves would make the book worth reading) one matter of particular interest to readers may be the need to reduce limits on freedom of speech.

Here, as we all know too well, the Bolt case and the Catch the Fire Ministries case in Victoria, as well as others, represent major damage to Australian democracy and presage worse to come.

At present West Australian criminal law prescribes up to fourteen years imprisonment for conduct likely to stir up racial animosity. Like the French Revolutionary Law of Prarial, which sent people to the guillotine for having a bad moral character, this could be made to mean almost anything, from denouncing Chinese atrocities in Tibet to criticising the extent of benefits paid to “asylum-seekers”.

Will making the villain in a piece of adventure fiction of a certain ethnicity invite a long prison sentence? Shall we see re-enacted here the fate of the man in England who found himself in a prison cell for having revved his car in a racist manner? Or the sufferer from muscular paralysis seized and thrown to the ground by police for not smiling during an event at the Olympic Games? The notion of punishment for mentioning the ethnicity of the 9/11 killers may sound totally bizarre, but I am not so sure it will always be so in some countries where political correctness has really taken hold.

I don’t wish to sensationalise this book. It is sober, well-written, balanced, informed and important. The authors have not been backward in giving credit where it is due, and they find a good deal in the West Australian scene to praise.

Publications putting the economic “dry” point of view, such as John Hyde’s previous publication, Dry, have received the predictable totschweigentaktik treatment. Don’t hold your breath waiting for notices in the Fairfax press.

The resurgence of Keynesianism under economic illiterates such as President Obama and others ready to attribute economic rationality to the influence of Ayn Rand is also discouraging.       The only course, as Winston Churchill put it when things looked dark, is to keep buggering on.