Wednesday, 21 May 2014

Singing Australia

When my family became Australian citizens it was a very low-key affair.  Mum and Dad never had any interest in ceremony and were not particularly patriotic, so we skipped the public ceremony and took our pledge in the Brisbane office of the Immigration Department in the presence of an appropriately-ranking public servant.  At least, Mum, Dad and my sister did.  I was still under 16 and automatically became a citizen when my parents did.

So I actually attended my first ever citizenship ceremony this week, supporting another relative.  It was an interesting event, because it emphasised just how much we are a nation of immigrants.  Brisbane's Deputy Mayor Adrian Schrinner, son of German immigrants, conducted the formal part of the ceremony.  Member for Brisbane Therese Gambaro, whose parents came from Italy, represented the Immigration Minister. These longer-standing immigrants welcomed new ones, proclaiming how happy they were that their parents had chosen Australia over the other alternatives on offer.  There was an Aboriginal dance troupe involved in the ceremony but we didn't get to hear what they thought.

There are three signature Australian songs that are always sung at patriotic events and we got to hear versions of all three, so let me share them with you.

The first is 'Waltzing Matilda', Banjo Patterson's song about a homeless man who steals a sheep, is caught and drowns himself in the billabong rather than allow himself to be arrested.  I love that we continue to sing this song at official occasions because it is so unpatriotic  It reminds us of the poverty and hardship which have been part of Australian life from the beginning, and of our ambivalent relationship with authority.  The swagman's ghost is still heard, even if familiarity has tamed and muted him.

The second is a little more awkward in a number of different ways.  It is our National Anthem, 'Advance Australia Fair'.  It was first performed in 1878, written by a Scottish immigrant called Peter Dodds McCormick.  Apparently he was frustrated at going to a concert at which the national anthems of various nations were sung, and finding Australia unrepresented.  The muse struck him on the bus on the way home, and by the next morning he had a complete song.

It has been performed at ceremonies ever since, including at the ceremony to inaugurate the Australian Commonwealth in 1901.  However, it has only been our National Anthem since 1984 when Australians finally got brave enough to ditch 'God Save the Queen'.  In 1974 at the request of the Whitlam Government the Australia Council held a competition to find an appropriate song.  It ended up concluding that none of the entries were worth considering and instead recommended a short-list of three songs - 'Waltzing Matilda', 'Advance Australia Fair' and a third option,'Song of Australia' written by British-born Caroline Carleton in 1859. These were submitted to a plebiscite in 1977.

Of course Matilda would never make a national anthem, but 'Song of Australia' could have been an interesting choice.  It includes the following words.

There is a land where treasures shine
Deep in the dark unfathom'd mine
For worshippers at Mammon's shrine;
Where gold lies hid, and rubies gleam,
And fabled wealth no more doth seem
The idle fancy of a dream — Australia!

Well, perhaps not, but the song that eventually won is not much better.  The original has four verses but only one of them was officially adopted in 1984, along with a second written by another hand for the 1901 ceremony.  Perhaps they just thought the song was too tedious to go on for its full length.  Most often even the two official verses are too much and we only sing the first.

Part of the reason this song makes an appropriate anthem is that it says so little of substance about our country and its aspirations that no-one can be particularly offended by it.  Yet it contains quite a few half-truths and some misleading but flowery language.

Australians all let us rejoice,
For we are young and free;
We've golden soil and wealth for toil;
Our home is girt by sea;
Our land abounds in nature's gifts
Of beauty rich and rare;
In history's page, let every stage
Advance Australia Fair.

This rather disembodied picture of a natural paradise conveniently avoids mentioning those who cared for it for 40,000 years before the British found it.  It also skates over our vast expanses of desert, and assumes that wealth inequalities will be overcome by hard work - a good aspiration which we seem to be failing to fulfill.  Nor are we as young as we used to be, and we are getting older by the day.

The second verse is even more problematic, even in its edited official form.

Beneath our radiant Southern Cross 
We’ll toil with hearts and hands; 
To make this Commonwealth of ours 
Renowned of all the lands; 
For those who’ve come across the seas 
We’ve boundless plains to share; 
With courage let us all combine 
To Advance Australia Fair. 

Of course recently we've been working hard to convince ourselves that our plains are not boundless and that we need to be very choosy who we share them with.  This includes a definite bias against those who come "across the sea" in favour of those who have the resources to fly over it.  I doubt this would have bothered McCormick, who did not write this verse, or even the authors who wrote it for the Federation ceremony with slightly different fifth and sixth lines.

For loyal sons across the sea
We've boundless plains to share.

A clear reference, of course, to loyal sons of Britannia.  This British connection is much clearer in the original second verse, which says

When gallant Cook from Albion sailed
To trace wide oceans o'er
True British courage bore him on
till he landed on our shore.
Then here he raised old England's flag
The standard of the brave
"For all her faults we love her still
Britannia rules the waves."

And of course McCormick's third verse makes it plain what this means for Australian identity

From England, soil and Fatherland
Scotia and Erin fair
Let all combine with heart and hand
To advance Australia fair.

No Germans or Italians here, thankyou, never mind anyone from Asia or the Middle East!  No wonder they had to edit it for official consumption.  At least they made it less offensive, but only by making it more platitudinous.

Which brings me to the third song, which is of course 'We Are Australian'.

If this song had been written by 1977 when the plebiscite was held, it could well have blitzed the field.  As it was, it was written in 1987 by two iconic Australian folk musicians, Bruce Woodley of The Seekers and Dobie Newton of The Bushwackers.  It has a few advantages over 'Advance Australia Fair' as an anthem.  For a start it has a tune you can actually listen to all the way through without falling asleep.  It also presents a very concrete view of Australian history, and even names some real people.  Hence, it's worth looking at what is says a bit more closely.

To Woodley and Newton's credit, unlike the earlier patriotic songwriters they don't ignore Aboriginal people.  The whole first verse is about them.  However, like the histories kids of my generation (and also Woodley and Newton's) were taught in school, the song abruptly shifts focus once it gets to the point where they are standing on the rocky shore watching the tall ships come.  Aside from a later reference to the painter Albert Namatjira they simply disappear from the story.  "Don't mention the war", as they say.

The story they tell of the subsequent British-Australian community is also a lot more realistic than McCormick's or Carleton's, but it's still all about myth-making.  It is a tale of triumph through adversity - of convicts who suffer the lash but finally become free men, of stockmen and farm wives waiting anxiously for the rain which does eventually come, of the depression that resolves itself into the "good times', conveniently skipping the First World War and stopping short of the Second.  At this point the writers run out of puff and leave off history to talk about landscape.  The great post-war influx of migrants from outside the UK is lumped into the generalisation of the chorus, "from all the lands on earth we come". The Schrinner and Gambaro families will just have to be content with that.

All things considered, apart from noticing Aboriginal people Woodley and Newton have not progressed far beyond Banjo Paterson in their view of Australian identity.  Indeed when they come to naming names in Verse 4, they pair two real people (Namatjira and the outlaw Ned Kelly) with two fictional characters from Paterson's verse, the jolly swagman we have already met, and the stockman Clancy of the Overflow.  No women I'm afraid.

I kind of like the fact that Australians are so poor at patriotism this is the best we have to offer.  Still, there are plenty of other songs about Australia that never get a run and some of them are a lot more challenging than these.  How about this one, as a closer?  Sadly I can only find this slightly insipid cover on YouTube.  The author, the late lamented Scottish/Australian singer Alister Hulett, would have given it a lot more bite.

Sunday, 18 May 2014

Farewell, National Rental Affordability Scheme

There's so much carnage in this week's Commonwealth Budget that small things are apt to slip by.  So I'm going to tell you about something from my professional life that has just become a casualty of Abbott and Hockey's slash and burn exercise.  It's a scheme called the National Rental Affordability Scheme.

Back in 2004 National Shelter, the Community Housing Federation of Australia, the Australian Council of Social Services, the Australian Council of Trade Unions and the Housing Industry Association, supported by a wide range of other organisations with an interest in housing, convened a National Affordable Housing Summit.  It came up with a simple but ambitious plan of action aimed at improving Australia's housing system, and set up a working party under the leadership of Julian Disney to promote this plan around the country.  They were very successful, and large parts of their agenda were adopted by the Labor government on its election in 2007.

One of the most significant initiatives championed by the Summit group was a program aimed at attracting private investment into affordable housing.  This concept was adopted by the government, with modifications of their own, as the National Rental Affordability Scheme (NRAS).  This scheme provides a tax incentive (or grant for not-for-profit organisations) each year for ten years to fund the provision of rental housing to be rented at no more than 80% of market rent. Properties are rented to low income tenants on a long term basis, but the subsidy cuts out at the end of 10 years and the owner gets to keep the property and do whatever they want with it.  The scheme aimed to provide 50,000 new affordable housing dwellings in its first five years, with a further 50,000 tentatively flagged after that "if needed" - as if they wouldn't be!

This scheme was a radical break from the way affordable housing has previously been delivered in Australia.  The Australian model of affordable rental provision has always been driven by 100% funding from government capital grants, with the ongoing costs of managing and maintaining the housing coming from rents.  The result is a system limited by the amount of capital governments are prepared to put in up-front, and the small amounts of housing produced by it are heavily rationed to those on the lowest incomes.

NRAS reverses this - the capital cost of the housing has to be privately funded, but the difference between the below-market rent and the cost of provision is made up by an annual subsidy.  This subsidy makes the scheme a viable commercial proposition but significantly less costly to government.  To make it work, it needs to target a different tier of renters - those who struggle to afford market rents, but could afford something a little less and never get to the top of the public housing waiting lists because their need is not dire enough.

 NRAS is an attempt to find one of the Holy Grails of housing policy: a way to get the private sector to fund and build affordable rental housing.  Ever since the advent of compulsory superannuation in the 1990s , housing policy makers have pondered over how to get some of this superannuation money into rental housing.  The problem is, the structure of the private rental market in Australia just doesn't suit superannuation funds.  It is driven by small investors who use operating losses to minimise tax and make up for it later through capital gain.  Superannuation funds can't do this so rental investment isn't attractive to them.  It's also too small-scale - the big superannuation funds aren't interested in investing half a million dollars into a house, they only invest in chunks of $50m or more.

Early on some attempts were made to interest these big investors in the scheme.  However, while they nibbled at the bait they didn't swallow the hook.  The returns were still not good enough for them.  There was still no way to invest in big enough chunks to satisfy them.  And it was not flexible enough - it was too hard to sell out of if they wanted to down the track.

This failure to land the big fish, plus the fact that the scheme was launched in the middle of a credit squeeze, meant the scheme struggled to achieve its targets.  Other problems didn't help.  The cumbersome Commonwealth-State approval system and the insistence on detailed, site-specific applications meant that plenty of opportunities were lost.  Time is literally money in the property industry, and as NRAS approvals were delayed many developers elected to sell on the open market rather than wait, sending proposals back to Square 1.

Nonetheless the program has succeeded in delivering a substantial amount of affordable rental housing.  By June 2013, the date of the most recent published update, over 14,000 dwellings were tenanted under the scheme and another 24,000 were in progress.  This is well short of the 50,000 target but the pace has been steadily picking up after the slow start.

Of all the Australian Government's housing programs, this is the one which is most closely aligned with Liberal Party values.  It is a social program but largely funded by the private sector.  Commercial and not-for-profit providers compete on an equal footing.  There is a large element of "user-pays" in its charging regime.  It is built around the expectation that assistance will be temporary.  These are all things the Liberals love in a welfare measure.

Yet in the lead-up to this month's Budget, the ground started to be laid for its abolition.  In March and April News Ltd's The Australian ran a series of articles on it, echoed in other News papers.  These articles used "un-named sources" to identify a set of supposed "rorts" or failings in the scheme and some of its individual projects.  Aside from the fact that the scheme hadn't achieved its targets, the articles focused on its use to build housing for students and the fact that some of it was rented to students from overseas.  It is no surprise that once the abolition of the scheme was announced in the Budget, these were the very reasons cited by the responsible Minister, Kevin Andrews.  His press release says:

From the beginning, the previous government’s scheme was poorly designed, with multiple flaws, ambiguous legal requirements and red tape.

The National Rental Affordability Scheme has fallen well short of expectations—it has simply failed to deliver for low and moderate income Australians.

The scheme has been plagued by the late delivery of dwellings, trading of incentives, multiple changes to agreed locations, leasing to international students and rorting.

There is just enough truth in this to make it plausible.  There were problems in the scheme's design and it has not delivered all that was hoped.  Yet it was hardly the monumental failure Andrews' statement implies.  Even Andrews' Queensland LNP counterpart Tim Mander is happy to spruik the success of the program in delivering affordable rental housing in regional Queensland and getting people off the public housing waiting list.  The trading of incentives is hardly a problem - tradeability is an essential element of a successful investment product.  Nor is the student housing issue the killer it is made out to be.  Students are among the population groups who most struggle to find affordable rental housing, and university towns and suburbs are plagued by problems in their rental market as a result.  The Commonwealth guidelines for the scheme don't currently require Australian residency so there is no bar to overseas students occupying NRAS housing if they meet the income guidelines.  If this is a problem it is easy to fix by adding a dot point to the guidelines.

No, all these "reasons" sound like excuses, and for anyone who knows the scheme they are lame ones.  NRAS was always going to be experimental.  Nothing like this had been tried in Australia before.  Investors are conservative and it takes them a while to warm to new products.  Government housing departments have never dealt with private investors in this way, and they needed to learn how to do it.  What this scheme needed was not abolition but a proper evaluation and redesign to build on the experiences of this first tentative effort.

That we got abolition is symptomatic both of this budget and of the state of housing policy in Australia.

As far as the budget goes, it is simply another program aimed at helping people on low incomes which has got the chop.  There are so many of them that this one has had very little airplay in the mainstream media, although the Australian made use of one last anonymous leak in the budget lead-up to trumpet its expected axing.  The Abbott government has shown it cares nothing for social equity and has no interest in programs that promote it.

In housing policy, the situation has been dire for a long time.  Despite huge tax subsidies (or perhaps because of them) private home ownership and private rental are out the reach of increasing numbers of Australian households.  Meanwhile, public housing, the safety valve which provides housing for low-income households, is labouring under an outdated financial model and State housing authorities are leaking funds, forced to gradually sell down their housing portfolios to stay afloat.  This is creating a vicious spiral in which shortage of housing leads to increased rationing to the most highly disadvantaged, lowering the potential income of the system and deepening the spiral.

Housing researchers and government policy-makers have known about these problems for a long time.  The financial viability of the public housing system has been a subject for discussion for the past 25 years.  Housing researchers have described, modeled and advocated various solutions repeatedly and at length.  For a brief moment in 2007 it looked like a meaningful response might be in the offing, but in the end the Rudd and Gillard governments never quite got there, putting the architecture in place but failing to put their money where their mouth was after an initial burst of post-GFC spending.  There seems no chance whatsoever that the Abbott government will get anywhere near this close - the best guess is that they will just delegate the whole mess to the States and Territories as suggested by the Commission of Audit.

NRAS was the single lasting benefit to come out of Labor's hopeful beginning, a program that continued to grow when other housing funds dried up, that provided a meaningful growth option for housing providers, a source of income beyond the hugely welfarised social housing system and affordable housing for low income Australians.  Now it's gone.  It makes me feel a bit like Macbeth:

Out, out, brief candle!
Life's but a walking shadow, a poor player
That struts and frets his hour upon the stage
And then is heard no more: it is a tale
Told by an idiot, full of sound and fury,
Signifying nothing.

(Bangs head against wall.  Lights fade...)

Wednesday, 14 May 2014

Heavy Lifting

So now it's official, Joe Hockey's first budget is a shocker.

His metaphorical language has taken a new turn.  Along with the task of "budget repair" we now now have the image of lifting.  Australians, he says, are "lifters not leaners" and this budget is about doing "heavy lifting" to get rid of government debt and move us back into surplus.

It is highly debatable whether getting back into surplus is as important as Hockey wants us to think, but this morning I'm worried about less esoteric questions.  Like, who exactly is doing all this lifting?  Joe himself and his parliamentary colleagues are symbolically doing a little, accepting a 12-month pay freeze.  Meanwhile, 16,500 lower-ranking public servants will do a lot more, losing their jobs and having to look elsewhere, perhaps ending up doing real lifting as labourers on one of the many road building projects flagged in this budget.

However, by far the heaviest lifting will be done by the poorest members of our community - older people on pensions, people with disabilities, young unemployed people, and Aboriginal communities.  Not to mention people in other communities altogether.

There's been a lot of talk about the "temporary deficit levy" to be paid by higher income earners for the next few years.  In principle, as I have said before, this is a good idea - a progressive tax aimed at the rich to help shore up government revenue.  However, in practice it's a bit of a fizzer.  People whose incomes are over $180,000 per year will pay 2% of the amount by which they exceed this figure.  In other words, a person with an income of $200,000 will pay 2% of $20,000, or $400.  The tax will be scrapped after three years.

Meanwhile, a single pensioner will immediately lose their seniors supplement, worth $876 per year.  This alone represents a loss (effectively a tax) of just under 4% of the single pension which currently sits at around $22,000 per year.  This is 4% of their entire income, with no threshold amount.  In addition, pensioners will now have to pay $7 each for their first ten doctors visits per year - another $70 per year if they go that often.

Unlike high income earners, who will be able to lift a little less in three years' time, pensioners will have to gradually build up their muscles over time.  Not only are the scrapping of the seniors supplement and the Medicare co-payment permanent, indexation of the pension has been de-linked from average incomes and instead linked to the CPI, meaning pensions will rise more slowly than other incomes, while more assets will be included in the assets test and the income thresholds for pensions will not be indexed at all, so many pensioners will lose eligibility over time.

Other poor people will have it even worse.  If you are unemployed and under 30, look out!  Under 30s will only be able to get Newstart Allowance for six months at a time, while under 25s will not get it at all - they will only get Youth Allowance and will have to be studying - study they will have to pay for, later if not now.
There is an even more insidious trap in store for younger people with disabilities.  Stricter assessment regimes will apply to people on disability support payments.  This will mean that some people whose disability is less severe - say, people with a mild intellectual disability or a chronic mental illness - will be assessed as able to work and shifted to Newstart allowance.  These people will then be obliged to "earn or learn" but will find themselves still hugely disadvantaged in the workforce and in education and at risk of having no source of income whatsoever.  This is certainly a heavy burden for highly disadvantaged people to bear!

Direct payments are only the tip of the iceberg.  The government is cutting over $1.3b of support for State pensioner discounts - this funds things like concessions on public transport and Council rates, so daily life will become more expensive.  The indexation of fuel excise will hit everyone (unless they drive diesel vehicles), so of course its impact will be greatest on those on low incomes who have less capacity to pay.  Cuts to hospital and school funding fall most heavily on the public system which poorer people rely on.  Over $500m will be cut from Aboriginal community programs over the next four years - funds for the provision of services to the nation's poorest people.  As for foreign aid, cut by $7b over four years, we obviously don't care a scrap for the poverty of people in "countries other than Australia" as Shaun Micallef would put it.

Meanwhile, high income earners pay a little more tax, companies pay the same and mining companies pay less courtesy of the scrapping of the Resource Rent Tax, not to mention the Carbon Tax.  When Mr Hockey talks about a nation of lifters, he clearly has in mind coolies carrying the luggage and supplies while their wealthy employers stroll along swinging their stick and whistling a happy tune.

Saturday, 10 May 2014

Commission of Audit

Tuesday will bring the unveiling of the first Abbott-Hockey budget, so I thought I'd prepare by reading the report of the National Commission of Audit.  What a sorry dog's breakfast it is!

It's hardly a surprise that the report is a highly ideological affair.  Not only was it commissioned by an ideologically-driven government freshly elected to office, it is controlled by a hand-picked group of right-wing opinion-makers.  The Commission's chair, Tony Shepherd, was until recently President of the Business Council of Australia and its secretariat is headed by the Business Council's Director of Policy Peter Crone.  Other commissioners vary from politically committed right wingers to more moderate conservatives.  The commissioners are supported by a substantial team of officers from Treasury and Finance, but none from the operational departments whose programs they comment on with impunity.

What did surprise me was how careless and slipshod the whole thing is.  The title - Commission of Audit - is clearly a misnomer.  How many auditors have to confess early in their reports that their recommendations have not been properly costed?

The starting point for their deliberations is a set of predictions about government income and expenditure.  According to their projections, in the absence of policy change government expenses (overwhelmingly made up of direct service costs, not "red tape") will increase by 3.7% per year in real terms between 2016 and 2024.  This increase is driven by a number of factors, the most important of which is the ageing of the population.  This increase will see government spending increase from 25% to 26.5% of GDP.

Interestingly, their terms of reference don't include a brief to look closely at taxation.  Instead, they make some heroic and rather odd assumptions.  They assume that taxation receipts, currently running at a bit under 22% of GDP, will recover with economic growth and increase to about 24%.  After this, they assume these receipts will stay at that level because even though in the absence of policy change bracket creep will ensure receipts keep rising, governments will adjust rates to stop this happening.

Funnily enough a scenario in which actual (if rubbery) projections show steadily increasing expenditure while income is arbitrarily assumed to stay constant reveals increasing deficits.  This is what they call the "business as usual" scenario but like the name of the commission this is a misnomer because it builds in an assumed change in tax rates.  This view is reinforced as you read on, because Recommendation 1 of the report contains a set of proposed "fiscal rules" which include a provision that taxation not rise above 24% of GDP.  In other words, this percentage is not a "business as usual" assumption, it is part of their recommended set of reforms.

They then set out an alternative scenario - the "reform" scenario - in which various programs are trimmed to bring the budget back into surplus, while tax revenue is assumed to be the same as in the "business as usual" scenario.  Given their own admission that their recommendations are not properly costed, the detailed numbers can't be relied on, but as a general principle this is a question of primary school maths.  If income stays the same and spending is cut, the deficit will decrease and if you cut enough you will get a surplus.  We didn't need a high powered commission to tell us that.

The devil (and devil it truly is) is in the detail.  The largest part of the report is a breathtaking gallop through Commonwealth policy and Commonwealth-State relations.  The Commission stabs and slashes here and there in order to get the budget down to their recommended level, but in the process it reveals both its incoherence and its ignorance.

Incoherence is shown in their approach to the defence and foreign aid budgets.  Defence has been the subject of a promise by the incoming government to raise spending to 2% of GDP, while foreign aid has been working haltingly towards an internationally agreed target of 0.5% of GDP.  In both cases, the commission recommends that it would be better to define the outcomes sought and then set the appropriate budget figure to achieve these outcomes rather than rely on an arbitrary percentage.  This seems reasonable, but if it makes sense in the individual policy areas that make up the budget, why not for fiscal policy as a whole?  Why does the commission not take its own advice, define the policy objectives of government and then set a spending level that will achieve them?

Incoherence can also be seen in its approach to federation.  Without a lot of analysis, the commission recommends a quite radical re-writing of Commonwealth-State financial relations based on a strict interpretation of the constitution.  Areas of responsibility that are constitutionally assigned to the States should be managed and funded by them, not by the Commonwealth.  To pay for this, a portion of income taxing power should be handed back to the States.  They would be given the power to levy an income tax surcharge, with the Commonwealth proportionally decreasing its own income tax rates.  At the same time GST should be distributed to the States on a strictly per capita basis, with top-ups to poorer states paid as a separate grant.

Of course it would be too much to expect that they would apply this principle consistently.  In education and health, both State responsibilities in the constitution, they envisage an ongoing but reduced (and less costly) Commonwealth role and a streamlined reporting arrangement which cuts red tape.

It is hard to see how this will help achieve the commission's overall aim of reducing expenditure.  Their argument seems to be that streamlining accountability by delegating more responsibility reduces costs.  However by their own account the cost of administration is only a small proportion of the cost of government and savings in this field have only minimal impact on the bottom line.  At the same time, although their reforms include a major re-alignment of taxation arrangements, no attempt is made to build these into their financial projections - the "reform" scenario has identical revenue projections to the "business as usual" scenario.  Nor is there any analysis of what these changes might mean for State budgets.  Could it be that the commission is just recommending the deficit problem be shifted from the Commonwealth to the States, most of whom are already struggling with their own deficits?

Their boldness in making recommendations about individual portfolios is also quite stunning, given they had little input from anyone with expertise in these areas.  My own professional field of housing policy provides a good example.  Here they have applied the constitutional separation of responsibilities fairly strictly.  The Commonwealth, they say, should withdraw from all funding of affordable housing and homelessness, with their contribution restricted to paying rent assistance to low income Australians through the income support system.  Eligibility for these payments should be extended to tenants of State housing departments provided these departments shift to charging market rents.  Everything else should be left entirely to the States.

This set of recommendations sounds reasonable when you say it quickly, as the commissioners do.  Their analysis of housing policy is less than a page long.  Yet it advocates a wholesale reconstruction of the housing assistance and homelessness systems which have been built up jointly by State and Commonwealth governments since the second world war through a series of intergovernmental agreements.

The public housing system is not working well at the moment, a result of decades of bipartisan neglect at Commonwealth and State level.  State housing departments are facing huge financial challenges with falling rental income and rising maintenance costs, a result of increased targeting to very low income tenants and steady funding cuts.  At the same time, housing stress in the private market continues to increase.  How will the Commission's recommendations impact on these conditions?  Under the new arrangements, will the States be able to fix the chronic financial problems facing their public housing programs?  Will the changes improve the options available to households struggling in the private market?  The commissioners show no evidence of even being aware of these issues and provide no analysis of the impact of their recommendations on them.  Not their problem, I guess, since the constitution says it belongs to the States.

This slapdash approach is repeated across policy areas.  Health, education, social security, aged care, defence, aboriginal affairs, foreign aid, industry assistance, research and development - you name it, all get the same broad brush, the same superficially rational-sounding ignorance.

So, to sum up, the Commission of Audit admits to not properly costing its recommendations, so its numbers are relatively worthless.  Its approach to taxation is incoherent and disingenuous, building some of its recommendations in as if they are fait accompli while pretending other far-reaching tax changes will have no impact.  It recommends substantial transfers of responsibility to the States but does not include even the most rudimentary analysis of State finances.  It makes detailed recommendations about specific policy areas based on an ignorance so profound it is almost criminal.

The Commonwealth government would have got just as good advice - and it would have been a lot cheaper - by asking the Year Six class at Yarralumla Primary School.  Still, the money has now been spent and it's important to make efficient use of taxpayers' funds, so I would suggest the government recycle the copies of this report and its appendices into toilet paper for the Parliament House toilets.  At least that way we will get some value out of the exercise.