Economic and social disparities

econmic disparity by religion australia 2011

From The Australian today, Statistics lay bare stark economic and social disparities for Muslims. The stats are from the story which begins:

The dictionary defines assimilation as the ability of groups to succeed and prosper in societies built on different religious and cultural building blocks. The idea is always controversial and raises fundamental questions about how far people with vastly different belief systems and social practices need to “change” to succeed in the society where they have been implanted.

Do they need to change at all? Can nations operate coherently as what former prime minister John Howard described as a “federation of cultures”? Is a single culture even feasible in a global, mobile world where diversity is a hallmark of every society? Where is the magical line where integration reaches a viable point of cohesion?

The assimilation, or social integration, issue has risen most starkly in Australia in recent years through the growth of the nation’s Muslim community against the backdrop of terrorist activity across the world and growing examples of young Australian Muslims being radicalised and joining extreme Islamic groups in the Middle East.

Domestically the struggle of many Muslims to infiltrate Australia’s economic mainstream is evident in poor employment outcomes, a mismatch between their relatively high skill and education rates and jobs secured, high welfare dependency, low home ownership and a high incidence of household poverty.

Most research suggests that some of the employment problems relate to discrimination against people who are visibly Muslim. However, for women in particular, there are also religious-based employment restrictions that vastly limit acceptable job options and leave many permanently disenfranchised from mainstream work.

Accommodating disruption

Craig Emerson has a column on Ideas needed for next economic growth phase. Here are, according to Emerson, “five ideas that could make a material difference to Australia’s future living standards”. He is certainly right about that, but you would think he would want to see our living standards rise rather than fall. The five:

1. A very fast train.
2. Lift the asylum seeker intake.
3. Double teachers’ salaries.
4. Increase land tax.
5. Accommodate disruptive technologies.

The support for “disruptive” technologies I find revealing. Why doesn’t he just say support the market and encourage entrepreneurial change? It’s not ideas that cause change but commercialisation of the ones that will work by the private sector. Everything else is almost inevitably waste. See the NBN and the series of Desal plants scattered around the country for recent examples.

But it did change our attitude to gun ownership

From Andrew Bolt, Of all the absurd analogies offered by the wilfully blind:

George Megalogenis, who has written a book and produced a documentary linking Australia’s economic success to its immigration program, said … the recent spate of terrorism-related arrests should not affect Australia’s attitudes to Muslim migration any more than the Martin Bryant massacre should affect mainland attitudes towards Tasmania.

It truly is an absurd analogy. Rightly or wrongly, we completely changed our gun ownership laws because of this one unique instance. Whether it did or did not make us safer, that was the premise of these changes. Our immigration program ought to at least not make us less safe on our streets, or when we go off to an ANZAC Day parade.

And for what it’s worth, the article Andrew was referencing was titled, Five million visas into Australia this year likely to set new records. Immigration is a good thing, generally agreed upon by all, if the numbers are increasing at a moderate rate so that migrants can be assimilated into our way of life. These are the necessary characteristics of migrants that we can agree on:

“If a nation’s immigration programme is well crafted and targeted, and migrants enjoy high levels of economic participation, as distinct from high levels of social exclusion and welfare-dependency, immigration has beneficial impacts in terms of growth in the demand for goods and services; increases in national income, and living standards; improved labour participation; expansion of the economy’s productive capacity; and growth in household consumption and public revenues.”

Every migrant comes at a substantial cost to the economy which is only repaid slowly over time and will only do so if they are productively employed. The kinds of migrants we should do everything we can to keep out are precisely those with “high levels of social exclusion and welfare-dependency”.

As odd as it may sound, Australia has the best industrial relations system in the world

I have an article at The Drum, Industrial reform: ignore fairness at your peril. There are many political traps for a right-of-centre government in trying to improve the operation of our industrial relations system, but the most dangerous is thinking that the most important reform is the removal of the role of our system of industrial tribunals. This was the central point in my article:

All too often, the core issue about industrial relations reform is not about outcomes, but about the structure of the system itself. Australia has developed its own unique and largely successful system of tribunals that has been the perennial target for elimination by economists since it was first formed.

And so it worries me that we are there once again. This is the basic outline of what is being investigated according to the Productivity Commission website:

In undertaking this inquiry, the Commission has been asked to review the impact of the workplace relations framework… [my emphasis]

If the continuation of industrial tribunals were off the PC agenda, and instead the issue was how our existing industrial relations system could be made to function for the better, I would be much more confident that the PC inquiry might come up with something of genuine value.

So my prime recommendation to the PC is this. If you start from the premise that industrial tribunals are here to stay, there is a possibility that the inquiry might do some serious good. But if that is not your premise, I would expect little good to come from this inquiry.

I, of course, go much farther. I think that industrial tribunals are a positive benefit to the smooth operation of this economy. I don’t think trying to remove them would be bad only because the politics are wrong. I think they should be left alone because the economic consequences of trying to remove them would be so damaging.

In the UK, The Times required Fortress Wapping to introduce new technology. At The Australian, it was IR as usual and a relatively smooth transition. Recognising the nature of the difference will help you understand how important our industrial relations system is to our economic prosperity.

Abusing our tradition of tolerance

This is by Henry Ergas, Australia’s finest economist, in an article today in The Australian on Australia Day. It is titled, Islamists cannot be permitted to abuse our tradition of tolerance.

THE French love the idea of France, Americans their country’s shining ideal of liberty.

Australians simply love their country as it is. And nothing is more integral to the achievement we celebrate on Australia Day than the easygoing tolerance of difference.

But tolerance was hardly on display at the demonstration Hizb ut-Tahrir organised last Friday night in Lakemba, which refused to condemn the attack on Charlie Hebdo. And though the organisation is on the fringe of Australia’s Muslim community, its views, and those of other fundamentalists, find a broad and growing echo in the Islamic world.

Whether our model of pluralism can remain unchanged as religious hatred spreads, including into Australia’s suburbs, is a problem that demands honest discussion. At the heart of that problem lies the fact that Islam finds it difficult to accept religious freedom and the freedom of expression that goes with it.

The UN’s Universal Declaration of Human Rights defines religious freedom in terms of each person’s ability to “change his religion or belief” and to manifest that religion or belief “in teaching, practice, worship or observance”. But data from the Association of Religion Data Archives shows that while they endorse that declaration, severe restrictions on religious freedom are imposed in almost 80 per cent of Muslim-majority countries with a population of two million or more, compared to 10 per cent of Christian-majority countries.

Those restrictions have dramatic consequences, with serious religious persecution more than twice as likely in Muslim-majority countries than in their Christian-majority counterparts. What were once large Jewish populations have almost entirely disappeared; increasingly, Christians are targeted too, with their numbers plummeting, while Christian proselytism is commonly prohibited and routinely punished. As for the Baha’is and Zoroastrians, repression is their daily fate.

That is not to deny that many victims are themselves Muslims: in 70 per cent of Muslim- majority countries, governments persecute other Muslims, typically from minority sects. But that merely betrays a fanaticism which continually breathes fresh life into centuries-old doctrinal disputes.

Catholics and Protestants in Northern Ireland may fight, but their quarrels never invoke 16th- century differences on transubstantiation.

Every day, however, Sunnis and Shi’ites slaughter each other over the rightful successor to the prophet Mohammed.

That fanaticism breeds a demonisation of enemies, apparent in Islamists’ portrayal of Jews, that encourages religiously-inspired violence. Muslim-majority countries have a relatively low incidence of conventional homicide; but even excluding the conflict in Chechnya, Muslims account for more than 60 per cent of all high-casualty terrorist bombings since 1999, with most of those bombings targeting civilians in Islamic lands.

As Muslims comprise less than a quarter of the world’s population, the thesis Montesquieu advanced 250 years ago — that “the Mohammedan religion, which speaks only through the sword, continues to act on men with the destructive spirit which founded it” — retains its element of truth.

That truth grates against Australia’s founding principles. It wasn’t by accident that the founders of the federation ensured it would accommodate religious diversity, not favouring one faith or denomination over any other. Rather, the Constitution’s reticence on matters of religion was a conscious choice, made despite what might readily have been overwhelming pressures.

Just on its first day, for example, the 1897 Constitutional Convention received a petition with more than 17,000 signatures asking for the constitution to state that “God is the Supreme Ruler of the world and the source of all law and authority”; and in the next three days alone, that petition was joined by 16 others, signed by 140,000 people. But though they were deeply religious, the founders rejected those requests, convinced that the expression of faith had to be a private matter. That position, abhorrent to the Islamists, remains vital to the “feeling of free citizenship” Henry Parkes exalted. The issue is how it can now be defended.

To that question there are no simple answers: just as Jonathan Swift wisely observed that “it is useless to attempt to reason a man out of a thing he wasn’t reasoned into”, so the abject failure of costly “deradicalisation” programs shows the intolerant cannot be lulled into tolerance. What is clear, however, is that religious neutrality can no longer mean indifference. It is, in other words, an illusion to believe “tolerance for the tolerant, Islamism for the Islamists” makes any more sense as a policy than “liberalism for the liberals, cannibalism for the cannibals” (to use Martin Hollis’s phrase): for like all plans to appease wolves by throwing them carcasses, what begins with other people’s bodies invariably ends with one’s own.

Rather, a response is needed that measures up to the threat. Yes, the fanatics will smoulder with rage; but no Islamist should qualify for Australian residence or citizenship. And if the government sees merit in retaining section 18C, it should see even greater merit in enforcing longstanding prohibitions on incitement to violence, which have played too little role in dealing with the Islamists and their fellow travellers.

All that raises many legitimate questions. How can it be, for example, that the government blocks access to websites suspected of breaching copyright, but allows jihadi websites to flourish? And how can it be that SBS, using taxpayers’ funds, helps subsidise Al-Jazeera, whose executive producer called “I am Charlie” an “alienating slogan” while suggesting the Paris attacks might only be a “targeted” response to Abu Ghraib and to French action against Islamic State?

That is not the country today celebrates. Nor should it be that our children inherit. Australia’s “indissoluble Federal Commonwealth”, the Constitution tells us, was achieved “humbly relying on the blessing of Almighty God”. It will take all our human vigilance to keep those blessings intact.

From the comments at Henry’s thread, there is this, which is correctly subtitled “a non-racist, unbigoted inquiry into the core teachings of Islam and what it all means (if anything) for non-Muslims”. These are the 28 headings. Detailed explanations for each of the 28 are found at the link.

1. A standardized version of the idea-collection is written down.
2. The Quran includes instructions for its own spread.
3. The idea-collection includes instructions for its own preservation, protection, and duplication.
4. Islam commands its followers to create a government that supports it.
5. Permission to spread the religion by war.
6. Lands must be conquered.
7. The idea-collection provides new soldiers by allowing polygamy.
8. It is a punishable offense to criticize Islam.
9. You can’t leave Islam once you’re in.
10. Islam must be your first allegiance.
11. Dying while fighting for Islam is the ONLY way to guarantee a man’s entrance into Paradise.
12. You must read the Quran in Arabic.
13. You must pray five times a day.
14. The prayers involve moving together in time.
15. A woman is in a thoroughly subordinate position.
16. The only way a woman can guarantee her passage into Paradise is if her husband is happy with her when she dies.
17. Allah gives Himself permission to edit his own work.
18. The Quran uses the carrot and stick to reinforce behaviour.
19. Islam provides a huge and inspiring goal.
20. Non-Muslims must pay a large tax.
21. A Muslim is forbidden to make friends with a non-Muslim.
22. The Quran counsels the use of deceit when dealing with non-Muslims.
23. Islam must always be defended.
24. Islamic writings teach the use of pretext to initiate hostilities.
25. The explicit use of double standards.
26. It is forbidden to kill a Muslim (except for a just cause).
27. If Muslims drift away from Mohammed’s teachings, Allah will end the world.
28. The message in a standard Quran is difficult to decipher.

Isn’t this a good news story?

The way this started, you would have thought that the Government was slipping this in under the cover of Christmas so that no one would notice. From The Age naturally:

Environment Minister Greg Hunt has quietly published data, just two days before Christmas, showing the second year of operation of Australia’s carbon price was more successful at reducing emissions than the first.

New data from Australia’s National Greenhouse Gas Inventory show emissions declined across Australia by 1.4 per cent over the 12 months to June.

That compares to a decline in emissions of 0.8 per cent for the previous 12 months.

The carbon price was introduced by the Gillard government and began operation on July 1, 2012. It ended on July 1, this year after the Abbott government fulfilled an election pledge by abolishing it.

The sneaky dogs, not telling us how wonderfully it was all working. Tim Blair, however, brings it all into the light, under the cryptic heading The Joy of Pointlessness:

According to the National Greenhouse Gas Inventory, Labor’s carbon tax reduced carbon emissions by 0.8 per cent during its first year and by 1.4 per cent during its second year. In other words, it cut Australia’s 1.3 per cent global carbon dioxide contribution by next to nothing.

And the cost of this minimal reduction? $7.6 billion. Labor’s Andrew Leigh evidently believes this was money well spent, and is upset that carbon generation has now returned to the same level it was in August 2013.

Nevertheless, it is astonishing that the Government did hide the announcement in this way. Either most of the country sees the pointlessness, which should mean it deserves a larger run, or it doesn’t, in which case we will return relatively soon to this exercise in poverty creation.

Overseas money and domestic property

chinese house purchasing

This is already an old story, from the SMH on October 11. It’s heading is quite straightforward, Chinese investors are pushing into Melbourne and Sydney. And the text of the article is also pretty clear:

Chinese investors are aggressively lifting their Australian residential and commercial real estate investment.

And then there was this on October 15, Foreign buyers snap up one in six new Aussie homes:

Foreign buyers are flocking to buy Australian property, snapping up one out of every six new homes – and that number is set to get higher.

Foreign demand for new homes surged in the September quarter and is tipped to rise further next year, according to the National Australia Bank’s latest residential property survey.

Overseas buyers accounted for almost 17 percent of total demand for new properties and in Victoria, they accounted for almost 25 percent, or one in four new homes, the report said.

Foreign buyers were also more active in the established property market last quarter, accounting for eight percent of demand.

Again, Victoria led the way, with foreigners accounting for a record high 11.5 percent of established property demand, the report said.

If you are of the opinion that none of this is pushing house prices up and keeping people like my sons out of the market, then you need to brush up a bit on supply and demand. But what has added to my dismay at all of this you may find in this story from The Age on Monday, Corrupt Chinese in AFP sting. Here’s the bit that matters:

The manager of the AFP’s operations in Asia has confirmed Australia has agreed to assist China in the extradition of and seizure of assets of corrupt officials who have fled to Australia with illicit funds running into the hundreds of millions of dollars. . . .

“As time goes on, they start to put [their funds] into legitimate assets such as houses and property”. . . .

The sums of money believed to have been spirited out from China are staggering. The Washing-based Global Financial Integrity Group, which analyses illicit finalcial flows, estimates that $US3 trillion left China illegally between 2005 and 2011.

Some of that money is coming here and it doesn’t take much of a slice of all of that to make an impact on our housing market. It is ridiculous that we haven’t done something ourselves before now, but with the Chinese now seeking to get their money back there may at least be a start.

Pierre Ryckmans (1935-2014)

Before I arrived on this continent these many years ago, the image of Australia to me as depicted in Private Eye was the comic strip Barry McKenzie written by the brilliant Barry Humphries. In fact, the first movie I saw in Australia was the second of the Barry McKenzie films. It more or less fixed the image that had commenced with Monty Python’s Australian Philosophy Department. What then radically changed my view of Australia was to discover that Simon Leys, the author of Chinese Shadows, lived in Canberra and taught at the ANU. He has now passed away, on August 11. I would not have known except for the notice in The Australian today written by Theordore Darlrymple, a writer I have almost as much affection for as Leys, whose real name was Pierre Ryckmans. This is from the notice. The first sentence below can only ever be stated once in this day of the internet. It is incredible, but not misguided, that Darlrymple says what he says here:

I admired Simon Leys more than any other contemporary writer. He was, in fact, my hero, in so far as I have ever had one. ­Although he had previously written discerningly about Chinese art, I first read his books about the Cultural Revolution. Leys, of Belgian origin, was a passionate lover and connoisseur of Chinese culture and viewed its barbarous destruction with horror during the Revolution; he abominated Maoism at least two decades before it became obligatory for all right-thinking persons to do so. From the very first page — no, from the very first sentence — of all his books and essays it is obvious that Simon Leys always knew what he was talking about.

Leys’ guiding star was cultivation (in a broad sense) and his betes noires barbarism, stupidity and humbug. There was no better sniffer out of humbug, the besetting sin of intellectuals, anywhere in the world.

The final line of the notice reads, “Australians should be proud that he chose Australia as his home for the last 44 years of his life.” I feel exactly the same.

The manifest ignorance of Joe Stiglitz

I have just caught up with the article written by Joe Stiglitz on the Australian economy, American Delusions Down Under. I have had serious doubts whether he understands his own economy given his Keynesian orientation, but that he has no idea about Australia is manifest.

What matters more for long-term growth are investments in the future – including crucial public investments in education, technology, and infrastructure. Such investments ensure that all citizens, no matter how poor their parents, can live up to their potential. . . .

To be sure, given its abundance of natural resources, Australia should have far greater equality than it does. After all, a country’s natural resources should belong to all of its people, and the “rents” that they generate provide a source of revenue that could be used to reduce inequality. And taxing natural-resource rents at high rates does not cause the adverse consequences that follow from taxing savings or work (reserves of iron ore and natural gas cannot move to another country to avoid taxation). But Australia’s Gini coefficient, a standard measure of inequality, is one-third higher than that of Norway, a resource-rich country that has done a particularly good job of managing its wealth for the benefit of all citizens.

Well I see fit to comment on the American economy although I live here, so he is welcome to comment on ours even though he is out of his depth on everything he says. But it is a wonder that he doesn’t stop to think about his own empty rhetoric when we find in between the above two paras these two paras:

There is something deeply ironic about Abbott’s reverence for the American model in defending many of his government’s proposed “reforms.” After all, America’s economic model has not been working for most Americans. Median income in the US is lower today than it was a quarter-century ago – not because productivity has been stagnating, but because wages have.

The Australian model has performed far better. Indeed, Australia is one of the few commodity-based economies that has not suffered from the natural-resource curse. Prosperity has been relatively widely shared. Median household income has grown at an average annual rate above 3% in the last decades – almost twice the OECD average.

Most of that growth he discusses was under a Coalition government that made it a matter of policy to balance the budget and contain its spending. That is the Australian model from which the US, and Joe Stiglitz, might learn something he is apparently clueless about.