Category Archives: Policy Making

What A Waste!

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Local government is like the unwanted stepchild (or even bastard) of Australian politics – not formally recognised by the Constitution, but expected to provide all the services that neither the Commonwealth nor the States want to deliver. So they get delegated with roads and recreation, planning, libraries, waste management and other more esoteric activities.

Most of their funding comes from Federal and State coffers, plus property rates, permit fees and income from sundry services, but they have limited discretion as to how and where to allocate their resources since local by-laws must be consistent with State legislation.

So when it comes to the straightforward provision of rubbish collection and waste recycling, it’s quite amazing how inconsistent these services are from once council to the next.

In the case of my own local authority, we now have four different waste bins, one each for: glass; recycling; organic; and general (i.e., pretty much anything else that does not belong in the other three bins).

In addition to having to remember which bins get collected each week, residents also have to interpret what items can actually go in each bin. For example, “glass” really means only bottles and jars – so no cookware, drinking vessels or other glass products. “Recycling” only covers paper, cardboard, metal cans and lids, foil, and a few categories of plastic bottles and containers (and only as long as the lids have been removed and placed in the “general” waste). Soft plastics such as food packaging are not accepted, nor are Tetra Paks (one of the most common forms of beverage containers). As for the “organic” bin (or FOGO – “food and garden organic”), while this is no doubt a helpful solution to separate valuable compostable materials from general waste, our local council will not allow us to use bio-degradable bags, so the FOGO is thrown straight into the bin (nice in the height of summer!). Yet my friends and neighbours who live in other local council areas are able to use these convenient bags to manage their organic waste. Go figure why there is this difference!

On the question of recycling drink containers, things get even more confusing when looking at the Victorian government’s Container Deposit Scheme (CDS). First, the CDS collection points, despite there being over 600 across the State, are still quite limited (by location and operating hours). Second, the list of eligible categories is shorter than the types of ineligible items (5 vs 7). Third, it seems that unlike local council waste collection, the CDS will accept container lids, and even Tetra Paks (but the latter only applies to flavoured milks, not plain or plant-based milks). Fourth, while my council is willing to accept any glass bottle that has contained alcohol, the CDS only accepts beer and cider bottles. Why do they have to make it so confusing and complicated?

I know that there have been huge problems with the collection and recycling of soft plastics. For a few years, it was possible to return most plastic food packaging (bags and wrappers) to local supermarkets for recycling. But whoever signed off on those service contracts forgot to check what was actually happening to these materials, until there were a series of warehouse fires and other problems. Yet, this reverse supply chain model would be a logical way to manage the CDS – we buy most of our drinks from bottle shops and supermarkets, so why not encourage us to take back the empties to the point of sale? When my family lived in South Australia in the early 1970s, there was already a CDS scheme for bottles, and I remember as kids we would collect the empties and take them back to the local milk bar and use the deposit refunds towards our next purchases. Made sense then, should make even more sense now?

Finally, another example of how inconsistent my local authority is when it comes to waste management: the council operates a depot where local residents can take a range of household items for recycling and disposal, including hard and soft plastics, batteries, electrical goods, computers and peripherals, and larger items that won’t fit in the domestic bins. I took a large plastic item all the way to the depot in person, only to be told I would have to book a hard waste collection service so it could be picked up when they next sent out a truck. Surely I was saving them time and resources by dropping it off at the depot myself?

 

“Only losers take the bus”

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The Victorian government has recently announced that passengers under the age of 18 will get access to free public transport (as long as they hold the appropriate travel card). Although this is being heralded as a cost-of-living measure, I can’t help thinking it’s also about removing a section of “fare non-compliant” passengers from the books.

I’m not saying that under 18s are over-represented among fare dodgers and under-payers. The latest PTV data available does not give a demographic breakdown, but the average non-compliance is 4-5% across all transport formats and routes. Overall, buses have lower compliance rates, and since school students would likely account for a large proportion of weekday bus journeys, one might reasonably assume they form a significant component of fare non-compliance.

It will be interesting to see what the take up is for these free travel cards. Recent research shows that even where fares are as low as 50 cents, there is still a high level of non-compliance. My own very limited research (conducted recently while waiting to meet a passenger at my local train station) suggested that most of the passengers traveling without a valid ticket were young people, many of whom had just come from a match at the MCG (so they could afford a ticket for the game?) or were sporting the latest noise-cancelling headphones (again, they can afford Dr Dre but not a Myki?). Not all of these younger passengers were of school age, of course, but it was interesting to see the high preponderance of youth being waved through at the barrier.

Talking to station staff, it was clear that they have no choice but to let passengers enter/exit the gates even though they don’t hold a valid ticket. First, if stopped, there is every chance that a passenger will simply try to jump over the barrier, and if they hurt themselves in the process, the station staff will probably get the blame. Alternatively, if the passenger decides to kick their way through the gate and manages to break it, there is a greater inconvenience to other passengers (and the station staff will bear the brunt of that, too). Secondly, barrier staff are probably not trained to deal with potentially aggressive and violent fare-dodgers – it’s not worth the risk or the hassle. Better to let the Authorised Officers, armed with relevant powers, training and equipment to deal with ticket evaders.

Does any of this matter? After all, public transport is a utility for everyone; so what if 4-5% of users are non-compliant? That might be seen as a small price to pay if it means we all get to use a public service to get from A to B. But are the 10s and 100s of millions of dollars governments lose each year due to fare dodging a reasonable cost to the rest of society, and the vast majority of passengers who do the right thing? While access to public transport is a public good (even a public right, some would argue), it does not convey an entitlement, and comes with an individual cost, under a “user pays” principle. (But since public transport is underwritten by government funding and subsidies, couldn’t we argue that our rates and taxes have already paid for it, so we are entitled to use it for free? Well, under the same argument, drivers and vehicles shouldn’t have to pay to use public roads….)

There is an argument to be made that if something is made available for free, we may come to undervalue it (or take it for granted), causing us to treat it with less care and consideration than if we have paid for the privilege. On the other hand, from a passenger’s perspective, I might be less inclined to avoid paying if I felt that I was getting value for money, or that my user experience was much better than it often is. We have all experienced dirty or smelly vehicles, graffitied carriages, delayed, cancelled and overcrowded services, petty vandalism and anti-social behaviour when taking public transport. Seeing fare-evasion as part of a wider societal decline may seem an extreme stance – but lumped in with other petty crime and broader social ills, it can give rise to populist grievances that our political leaders ignore at their peril.

Public transport can never be 100% reliable or fail-safe (thanks to weather events, power outages and transport strikes). But from a user experience of train systems in places like Japan and Europe, I know it can be much better than it is here in Australia. Nationally, it feels like this particular public service is never going to be a top priority for our local, state or federal governments. It’s always a bit of an afterthought, and gets overlooked in the need to pander to car lobbyists, airline duopolies and the construction industries. Even where public money is being put into transport infrastructure and system upgrades, they always seem to take a lot longer to complete, and cost a lot more (and deliver a lot less) than we were promised.

You’re more likely to hear our politicians campaigning about fuel excise, road congestion, speed limits, EV concessions, extra airport runways, car parks, local car manufacturing (er, maybe not so much these days!), than about integrated transport hubs, high-speed intercity trains, and contactless ticketing systems.

It’s this attitude that reinforces the common notion that “Only losers take the bus…” (….and only bigger losers actually pay!).

Apologies to Fatima Mansions for the misappropriation for the title of this blog.

 

And the public gets what the public wants?*

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Another Australian General Election comes and goes – although with a mere 3 years between federal polls, our politicians and their parties seem to be in constant campaign mode. Certainly, the formal election campaign lacked any significant new policies, so it felt like the leadership “debates” were simply a continuation of the stale language, petty point-scoring and tedious soundbites we hear day in, day out.

Cue the constant and familiar references to crises in housing, the cost of living and climate change. Both major parties tried to build platforms promising financial incentives for first-time home owners, with policies that were expensive, ill-conceived (albeit well intentioned), and with little regard for the consequences on the housing market or the broader economy. There was a failed attempt to have an informed debate about nuclear power, and tons of the usual pork-barrelling for pet industries and favoured constituencies. Even a major credit rating agency suggested that the Commonwealth’s coveted AAA status could be at risk as a result of all the campaign largesse. And of course, any lowering of the AAA rating would likely see an increase in interest rates, which would largely defeat the object of the first-time home owner policies.

At the time of writing, the Australian Labor Party has retained power with a significantly increased parliamentary majority, based on the projected number of seats it will win. But while the seats total may look like a landslide, it’s clear that a significant portion of the electorate voted tactically to either: a) keep the Liberal Coalition out of power; b) increase the chance of a minority Government and/or hung Parliament; or c) maintain the current status quo in a turbulent and uncertain world.

Based on the counts so far, both the ALP and Liberals have each only managed to garner about one-third of the total primary votes (4,678,061 – 34.81% and 4,315,961 – 32.1% respectively). While the national swing to Labor was around 2.3% since 2022 (with the Liberals seeing an opposite swing of -3.6%), this is enough to give them a large majority in the House of Representatives, thanks to the preferential voting system.

By contrast, in 2022, the ALP secured fewer primary votes than the Liberals (4,776,030 – 32.58% and 5,233,334 – 35.70% respectively), but managed to secure government with a slim majority. The point is, that the two major parties combined face a continued decline in their share of the primary vote. Given the performances by the Greens and Independents in recent elections, there could be a case for adjusting the current system of preferences to include a weighting or allocation based on the total primary vote by party. This might seem fairer in those constituencies with very marginal results, or where parties draw a significant share of primary votes nationally, but not enough to win (m)any seats, even with preferences. But given that most independent candidates (by their very nature) are not affiliated to any party, and usually focus on local issues (and often on single policy platforms), that allocation would be very difficult to calculate on a federal scale.

Meanwhile, it felt like the number of early-voting facilities was limited compared to previous elections, and there was little or no promotion of postal vote applications. This could have been due to the relatively short campaign period (although it always feels much longer…) combined with the large number of public holidays during that time. Cynics might suggest that this was a deliberate tactic by the incumbent government as early voting and postal votes are traditionally considered to favour the Liberal Coalition. I can’t find any compelling evidence for this theory. Partly, I suspect, because the major parties recognise that undecided, wavering and swing voters make a huge difference to the final results, so encouraging people to cast their ballot on election day helps them in that regard, even though more and more voters opt to vote before the big day itself. Whether the promise of an election sausage is sufficient incentive, I’d rather not speculate!

I experienced a huge feeling of disengagement with this latest election, mainly because I didn’t identify with any policies, parties or candidates that I could really get behind. When it came to voting for the Senate, I couldn’t see 6 parties (above the line) let alone 12 candidates (below the line) that I considered deserving of my vote. But we are forced to express our preferences for a minimum number of parties/candidates, hence the candidate lists are usually very long. I always think the large Senate voting slips are problematic, especially if you want to complete the full “below the line” choices, as we don’t really know what preference deals have been done behind the scenes.

Like many voters, I had issues with the unsolicited text messages I received, on behalf of candidates and/or parties. Apart from not disclosing how they obtained my number, some of the SMS did not carry the relevant authorisation statement; the sender’s number was anonymous (presumably they use automated systems); and blocking the sender had little or no effect – they still kept sending them! Since political parties are deliberately exempt from complying with laws against spam and invasion of privacy, the Australian Electoral Commission is relatively powerless to act. Presumably it’s in the parties’ interests to keep the status quo?

I was also surprised that polling stations still use a paper-based system to tick off who has turned up to vote. (I was using the same system when I was a polling clerk back in the 1980s in London.) Although the polling officers are required to ask me if I have already voted in another location, there is no immediate way to cross-check the electoral rolls. Surely an electronic tracking system would be a better solution? And on that note, I’ll end with a suggestion that it’s about time we put voter registration, voting and campaign donations on a blockchain to support voter ID and verification with privacy, secure proof of polling and force campaign funding transparency… as well as a speedier vote count!

*(with apologies to The Jam)

Same old economic crises?

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Amid the current turmoil surrounding tariffs and trade wars, I have been re-reading “Economics: The User’s Guide” by Ha-Joon Chang.

First published in 2014, this highly accessible introduction to economic theory and practice was written in the wake of the GFC, and the fallout that ensued from the US housing bubble and the consequential collapse (and public bailout) of major banks and financial institutions. The US bubble was largely caused by an imbalance in housing supply, poor lending standards, and over-engineering of mortgage-backed securities that quickly unraveled when banks lost confidence in each other, causing a major credit crunch and a lack of market liquidity.

Chang couldn’t have foreseen COVID and the knock-on effect on global supply chains and the impact of lock-down policies on overall productivity. He overlooks (ignores?) Bitcoin, a key ideological and technological response to the GFC, and he downplays the role of innovation in economic growth. However, his historical survey, his analysis of major economic theories (or “schools”) and his explanation of the roles that governments and the private sector play are all spot on and serve as a great resource for anyone wanting to try and make sense of the world.

Given the credit crunch at the heart of the GFC, the recent sell-off in the US bond markets reminds us that:

1. History repeats itself time and time again (albeit for different reasons)

2. Global markets are deeply interconnected, despite various attempts at de-coupling and policies designed to challenge globalisation and bring about increased protectionism

3. The US housing market is heavily reliant upon foreign investors since US treasuries both create market liquidity for new mortgage lending, and set key interest rates for borrowers – and major holders of US treasuries are foreign governments and institutional investors

The US mortgage market is underpinned by a near-socialist funding model (in the form of Fannie Mae and Freddie Mac), a propensity for long-term fixed rate loans, and a significant volume of non-recourse mortgages.

If a global trade war results in higher cost of goods for US consumers, and a bond sell-off results in higher interest rates, could we see a repeat of the GFC but driven by different causes?