Hockeynomics: Cut medicare, subsidise private health, save money

Shadow Treasurer, Joe Hockey, has attacked the "culture of entitlement" that has supposedly stemmed from Australia's welfare state - citing examples of our Asian neighbours as a yardstick by which to judge effective government spending on welfare.

An excellent analysis of Hockey's argument by Matt Cowgill shows that, in fact, Australia's welfare spend on areas other than health and ageing, is comparable to our Asian neighbours. It also compares strongly to other Western countries, including the US.

Cowgill's conclusion is that the only place in which welfare can effectively be cut is in either Health or Ageing:

"To achieve the sort of cuts that Hockey has flagged, to bring our social spending into line with Korea and other countries in our region, would involve huge cuts to health spending, pensions, aged care and help for people with disabilities."

However, there is no need to go into a depth of analysis to see that this is precisely what the coalition intends to do with its cuts to welfare.

In an interview with Lateline, in answer to a question on the Private Health Insurance Rebate, Hockey outlines a move to the US-style system of health care: heavily subsidised private providers providing the bulk of care, with a minor role for a public safety net. Hockey said (emphasis mine):

"If you reduce or remove the Private Health Insurance Rebate, you are simply pushing more people onto the public hospital system, which means they have an entitlement to universal health care, which means that the entitlement system grows."

Hockey is suggesting that an entitlement to universal health care is a bad thing and it is more effective to dismantle the universal system for a system of government subsidy to the private sector.

Hockey goes on further to say: "some entitlements [the Private Health Insurance Rebate] work to reduce other entitlements."

So, according to Hockey, the use of the Private Health Insurance Rebate - a subsidy to the private sector, will reduce the entitlement to universal health care [ie. Medicare].  The shifting of subsidies to the private sector and the dismantling of Medicare's universality smacks heavily of the current US system. In this system the publicly funded system is only available to certain classes of citizen with many falling between the cracks of subsidised private health insurance and the public scheme.

So how does this system compare for cost savings? According to the OECD the US health system costs 7.2% GDP compared to the Australian system which costs 5.7%. In terms of life expectancy, the US ranks 38th in the world, compared to Australia's rank of 6th. There appears to be little gained in the way of cost savings or better health outcomes.

Hockey has given us a glimpse of what a Coalition government would do to fund it's $70 billion in promises - Medicare's universality is to be dismantled, and not for cost but for an ideological antipathy to Medicare that has festered in the Coalition since Malcom Fraser first opposed it.

Billionaires and Battlers

Labor back bencher, Kelvin Thompson, has recently become embroiled in the latest round of Australia's supposed "class war" by daring to suggest that the $50 million taxpayer funding of Australia's F1 Grand Prix might better be better spent on hospitals than funding the lavish lifestyle of Bernie Eccelstone's daughter.

The response from Eccelstone was typical of the recent responses of billionaires to criticism - that democratically elected representatives should resign for daring to criticise those of the moneyed elite. Similar to Clive Palmer's dummy spit to Wayne Swan's article in The Monthly, Ecclestone became indignant and rather than address the criticism, engaged in ad hominem attacks as if somehow the mere fact that he was rich was a shield to any sort of criticism.

Palmer and Eccelstone have attacked their critics variously as "communists" and "destroying the wealth of this country and robbing our children of their opportunities". They have both forgotten that it is the stability of the democratic civil society that has enabled their wealth including, in Palmer's case, the ability to exploit publicly owned assets. Yet the billionaire's view is that they are entitled to their position, and their position is immune to criticism. Those that criticise them, regardless of the fact that they may be democratically elected, "should be fired".

These indignant reactions to criticism are typical of the 1% - they do not see themselves as participants in a society that goes deeper than mere tax-deductable expressions of philanthropy. They see themselves as entitled to a special place in the operation of that society, free from its responsibilities - an unfettered plutocracy, geared to exploit.

We have seen the results of when the 1% are unfettered, first in the 1980's when Reagan removed lending regulations on savings and loans banks that eventually resulted in a financial crisis, and secondly in the 2000's when Bush similarly removed restrictions on banks that resulted once again in financial crisis. In both instances, the 1% were happy to use the removal of regulation to exploit those that were most at risk in society to the detriment of all, particularly the wealth generating middle-class which is now being squeezed out of existence by a rampant 1%.

The disproportionate intrusion of the billionaires to undermine the civil society by the mere size of their wealth is an expression of a sense of arrogant entitlement from those who do not think that a £1 million Mexican crystal bathtub is a vulgar extravagance. A sense of entitlement that was built out of the policies of Reagan and Thatcher in the 1980's.

Margaret Thatcher's declaration in the 1980's that "there is no such thing as society" became the rallying cry of neo-conservatives around the world. Neo-conservative governments began to remove the progressive regulation and taxation systems that had limited the excesses of the rich under the theory that the civil society was unnecessary and that the self-interest of individuals would be sufficient.

Ironically, these conservatives decried the entitlement culture and assumed that the emphasis on the individual would necessarily lead to a "trickle down" of wealth to those less fortunate.

Thatcher herself recognised the entitlement culture, stating: "People have got the entitlements too much in mind, without the obligations, because there is no such thing as an entitlement unless someone has first met an obligation"

However, both Thatcher and Reagan saw those obligations (including the tax burden) as rightly falling upon the poor and middle classes and not similarly upon the rich. The view was that by the very fact that the rich were wealthy, they had fulfilled any obligation to society. This position unravelled the social contract and led to the excesses that caused the financial crises. Far from these crises causing a re-evaluation of this position, Thatcher, Reagan and later Bush continued with their policies further squeezing the middle classes. This has led to an entitlement culture growing amongst the rich - that regardless of the damage caused by their exploitation, government should be there to pick up the pieces at taxpayers expense.

In the past, this sort of sense of entitlement from the rich was met with derision from both the working and middle classes because it was seen for what it was - a desire to exploit society for reasons of self-interest. The institutions of the civil society placed proportionate obligations on everyone.

However, the structures of the civil society have been eroded by successive neo-conservative governments, which has created a society built on exploitation and an indignant sense of entitlement.

The removal of these institutions by conservative governments has led to  the "trickle down" of the exploitative sense of the entitlement to the middle class such that the billionaire's dilemma can be related to by those who are less well off. Accusations of "class warfare" resonate with the middle class, even though the warfare is actually being perpetuated upon them from above.

In Australia, this sense of entitlement has been generated through the explosion in middle class welfare under the Howard government. Just as the 1% believe that they are entitled to be unfettered by responsibilities to society, the middle class believe they are entitled to subsidy-fueled mortgages, private health rebates, subsidised private schools and the like, regardless of the exploitative effect on civil society. In fact, when governments have tried to make these "entitlements" progressive, it has been met with howls of "class warfare".

We have become too relaxed and comfortable, demanding our share of the trough rather than accepting our responsibility to engage with our obligations to society. We instead have fallen to the cheap popularism of slogan inspired "comfort".

This is why the accusation of class warfare has such resonance. In the same way that the billionaires see criticism of their extravagant unsustainable lifestyles as unfair, the middle classes see criticism of their entitlement to an unsustainable subsidy as equally unfair.

The exploitation of the unravelling of civil society is most pronounced by the 1%, who lobby for more changes that entrench their influence and power, but it can also be seen by the subsidy demanding "Howard battlers" who parrot the demands of the 1% even as their own standards of living are eroded.

This exploitative culture has thoroughly distorted the economy, such that everyone looks to Government to provide the conditions by which they can exploit society - rather than to provide conditions under which society thrives. The rampant individualism set in motion in the Thatcher and Regan eras has engendered the exploitation culture - a culture that led us to the global financial crisis and a culture that has created a crisis for the civil society.

Whooping Cough is dangerous, so is misinformation

Earlier this year I was diagnosed with whooping cough. Like many people I'd had the vaccination, but my immunity had run out (it is recommended that adults get a booster).

It was one of the most unpleasant sicknesses I have ever experienced. Six weeks of a horrible hacking cough, so bad that I couldn't breathe except for the "whoop" at the end of the fit. I was told by my doctor that it is not unusual to break ribs during these coughing fits - something that I was glad I didn't do, but the pain in my sides was bad enough.

I could not imagine a child going through that. It was bad enough as an adult. Adults generally don't get it as bad as children, adults rarely die of it but children do. Immunisations save lives.

So today I'm sitting at home with a cold - with a similar hacking cough which is a gift from my bout of pertussis -  and I'm catching up on the news and the ABC is a story about whooping cough. It was enough to start a coughing fit.

The story quotes Meryl Doorey from the notorious and misleadingly named "Australian Vaccination Network". The AVN is a pseudo-science based anti-vaccination organisation whose ideas have been discredited by actual real science, yet the ABC sees fit to go to them for an opinion.

Does this mean that the ABC will go to Birthers, Truthers, and Reptillians for their particular alternative nutjob views in the cause of "balance"?

Immunisations save lives and it is extremely irresponsible to give a platform to someone who not only is discredited, but preaches dangerous pseudo-science that can have disastrous consequences.

Optus v NRL: Rightsholders vs Technology...again.

The Optus v NRL decision has thrown rightsholders into their usual frenzy of lobbying to protect their revenues from innovation. In summary the decision allows sports fans to use Optus' TVNow cloud services to stream Free to Air TV that they have recorded (often only time-shifting by a few minutes) through the time-shifting exception in s111(1) and s111(2) of the Copyright Act 1968.

As Rares,J found at [74] (emphasis mine):

"The purpose of the exception in s 111(1) and (2) was to accommodate, to some degree, the law to the realities of modern life. Copying for private and domestic use is so much a commonplace that it is not difficult to infer that a user who made a film, by clicking “record”, was doing so for such a use. Indeed, the rightholders did not suggest how anyone, for example, watching a broadcast or film of a football game or television program, on his or her mobile device or PC would be doing so for some reason other than personal pleasure or interest."

Of course, this finding has bought about the usual howls of protest from rightsholders and the attendant claims that the decision will be the end of sport as we know it - despite decisions in other jurisdictions (cited with favour in Optus v NRL) finding similar services to be non-infringing and their content industry continuing to be profitable.

The sports broadcasters seem to have found a sympathetic ear in the form of the sports minister Senator Mark Arbib. Concerningly Senator Arbib has not only used the  time-worn "think of the children" argument but has also intimated that "there were complex issues to consider before legislating, to ensure any laws were not overtaken by fresh technological developments." (emphasis mine)
Senator Arbib appears to be arguing that any law should ensure that any future technological innovation ought to be stunted by copyright law.

This is the typical position taken by a government that sees copyright as essentially an "industry problem" rather than a problem in the content market. The government's position is evidenced by the "secret" copyright meetings between ISPs and rightsholders to the exclusion of consumer interests and the government's apparent preparedness to acquiesce to international treaties that favour the interests of the US content industry.

Unfortunately the government continues to misunderstand the copyright infringement "problem" as an industry-related problem rather than one caused by an inefficient and over-regulated market which has limited consumers' access to reasonably priced legal content. Consumers are willing to pay for access to legal content and the ABC's iView service is a case-in-point recently capturing over 30% of the sources for downloading/streaming content.

Until the copyright infringement "problem" is re-cast as a problem with the market, rightsholders will continue their cat and mouse game with technological innovation and governments will be tempted to pass knee-jerk legislation to ban it.

As Rares,J pointed out, the law as it stands was passed to "accommodate [...] the law to the realities of modern life". It is these realities that have created the incentive for the market to innovate to enable content to be time and device shifted.

It is dangerous for governments to try to pre-empt market innovation by passing laws to further regulate an already over-regulated and highly inefficient market. In this case, it is particularly dangerous as the change to the law alluded to by Senator Arbib will attempt to curtail consumer expectations that are already widespread in the market - expectations that were previously codified in the s111 exemptions.

The result will be inevitable - just as P2P filesharing has become a statement of civil disobedience amongst certain internet communities - technological innovation to make time and format shifting available to the market will continue to expand regardless of the law. If the content industries refuse to harness the technology and give in to the demands of the market, it is not up to the government to prop them up with regressive regulation.

Linux.conf.au 2012 presentation: The harbour is no longer safe: AFACT v iiNet

This presentation examines the AFACT v iiNet cases. The presentation will draw on some of the ideas that I have written about in these previous posts:

• The harbour is not as safe as it looks; and
• AFACT appeals against reason

I also provide some analysis of several of the proposed solutions in the AFACT case and what their potential impact could be on end users.

This talk was presented at the 2012 linux.conf.au in Ballarat.

Obligatory top-10 tech predictions for 2012

I think there's some rule that if you're involved in technology, you have to predict stuff for the next year.

It beats me why, because everyone always seems to get them wrong - maybe the tech press wants a piece the kudos given to economists for making predictions which inevitably turn out to be incorrect.

Anyhow here's mine:

1. Apple will release another iThingy. Hipsters will buy it, regardless of the fact that it's only an incremental release on the previous iThingy. It's times like this I wish I had a Newton - so I could say: "I was using tablets before they were cool. Or even worked properly".
2. Android will continue to inexplicably gain market share, despite still not being able to crack the lucrative hipster market. Apple will continue to sue any android devices that look like they might - and lose. Hipsters will continue to prefer iThingys.
3. Windows Phone will continue to languish mainly because it's about as un-hipster as you can get.
4. Google Plus will continue to grow despite no-one actually admitting to using it. The tech pundits will continue to pronounce its failure until the first mainstream media outlet proclaims it as the new tool of choice for cyberbullying/cyberstalking/farmville and demand "something be done about it". After this, Google Plus will be a real alternative to Facebook.
5. Facebook growth will continue to slow. Pundits will continue to proclaim the death of Facebook. Facebook will still have eleventy billion members.
6. Diaspora will continue to be cool despite no-one actually admitting to using it, or indeed knowing what it is. 
7. Twitter will continue to grow in proportion to those that complain about it.
8. Rightholders will continue to push for more draconian copyright laws. Consumers will get better at using encryption.
9. The State will continue to try to crack down on <insert internet evil here> by proposing even more draconian laws. Citizens will get better at using encryption.
10. 2012 will be the year of the Linux desktop :)

There you have it - 2012, the year that tech will continue doing pretty much what it's done since 2006.

Sceptics and Ideologues

Scientific scepticism (or rational scepticism) is the practice of questioning or doubting the veracity of conclusions that lack empirical evidence or rely on non-reproducable experimentation. For example, the Berkely Earth Project set out to test climatologists research:

"Existing data used to show global warming have met with much criticism. The Berkeley Earth project attempts to resolve current criticism of the former temperature analyses by making available an open record to enable rapid response to further criticism and suggestions. Our results include our best estimate for the global temperature change and our estimates of the uncertainties in the record."

-From Berkeley Earth Project FAQ

The project took a sceptical approach to the earth temperature measurement to test some of the assertions made against climatologists. This independent analysis of both the data used by the IPCC and the arguments put by critics of climate change is an example of a sceptical, scientific method of analysis.

In contrast, an ideologue is a partisan advocate of a particular position or theory - for example [Emphasis mine]:

"Climate change sceptic Ian Plimer's book "How to Get Expelled from School: A Guide to Climate Change for Pupils, Parents and Punters" arms children with 101 questions to challenge their teachers...

The 250-page book includes a list of questions intended to embarrass poorly prepared teachers."

Plimer and his denialist friends are very fond of using the title of "sceptic" because the term lends them some sort of scientific credibility. However, Plimer is not a sceptic, he is an ideologue and his book is pure ideology.

It is little surprise that he got one of Australia's most ideologically-driven leaders to launch it.