Mankiw on Pigovian taxes

I just found a nice piece by Greg Mankiw on Pigovian taxes: Smart Taxes: An Open Invitation to Join the Pigou Club. I think I’m a member.

The abstract is:

Many economists favor higher taxes on energy-related products such as gasoline, while the general public is more skeptical. This essay discusses various aspects of this policy debate. It focuses, in particular, on the use of these taxes to correct for various externalities—an idea advocated long ago by British economist Arthur Pigou.

Downloaded the paper here.

Unions and the ALP

The relationship between the ALP and trade unions is problematic.

The current circumstance in which a collection of trade unions affiliated to the ALP – representing a small fraction of working Australians – exercise a great deal of influence in selecting political candidates and party officers for the major centre-left Australian political party, is unhealthy.

I would to see either a much wider range of organisations being able to affiliate to the ALP, or a severance of the link.

Supporters of the current link have argued for its retention for the following reasons:

• community link – it provides a link with millions of Australians;
• for historical reasons – it wouldn’t be a labour party otherwise; and
• constitutional reasons (and less commonly argued) – it is the political arm of the trade union movement.

The most substantial reason is the first, while the second and third are weak (the second is about definitions while the third suggests that the party is a pressure group rather than a party of government).

Retaining a community link has merit – noting that the current link is specific to workers’ employment relationship. The community link could be enhanced by allowing a wider range of organisations to affiliate to the ALP. It is a historical accident that only one type of organisation – those relating to workers’ employment relationships – can affiliate to one of the major political parties. If it is going to have affiliated organisations, why not have a much wider range?

We’d need to define the types of organisations that could be affiliated. This should be done broadly and could include: associations focussed on economic, social, environmental and political matters that support the Labor political movement.

Reforming the ALP

My very irregular blog updates reflect my busyness in the five months since starting my new role at the Allen Consulting Group. It’s been extremely rewarding and challenging – the name of the game is tap dancing and adapting at a moment’s notice.

Reform of the ALP – and separately the NSW ALP – has been an interesting issue the last year. Fundamentally interest in reform has been sparked by

the ALP’s recent poor political performance;

• its declining (and ageing) membership;
• in some cases – poor selection of candidates;
• factional control of important decisions (e.g. preselections for winnable seats and membership of party forums); and
• a feeling among many members unconnected to factions that they aren’t listened to and wouldn’t have a chance of being selected as a candidate for parliamentary or important party roles.

These factors reflect behaviour and structural aspects of the ALP. While structures can be changed, behaviour cannot be forced to change – and so there has been focus on reforming structures.

The NSW ALP appears to be genuinely interested in reforming itself and the ALP – something surprising to all observers of Australian politics. Sam Dastyari – its General Secretary – has suggested that local party members have a vote in the election of new parliamentary leaders. I support this.

Cull approved for sulphur-crested cockatoos in Potts Point!

City News reported on 6 October 2011 that the NSW Government has given cull licenses to a number of Potts Point building owners. Shame!

I agree with vet Ross Perry:

Bird vet Ross Perry said a cull is inhumane and only a short term option.
“I personally think it is an act of ignorance. If they manage the cockatoos differently then they’ll find a long term solution, it is setting a poor example to the community and to future generations.”

At the very least future buildings should be designed to be cockatoo-proof.

Stop the cull of the Potts Point cockatoos!

Terrible news – I just learned that some of my neighbours up the road would like to cull the fabulous sulphur-crested cockatoos (thanks My Darling Darlinghurst blog) that squark and terrorise the inner east of Sydney – Woolloomooloo, Darlinghurst, Kings Cross and Elizabeth Bay. How dreadful!

I love the cockatoos – they’re like a bunch of juvenile delinquents that look you cheekily in the eye as they peer into your home. I love the sound of the clomping claws on our aluminium window sill. The cockatoos were here when I moved to Sydney in 2000 and seem generally loved by people in the neighbourhood. Except those in the heritage buildings at the top of Greenknowe Ave, Elizabeth Bay – Tara and Kingsclere. See the Central Courier story and the SMH story.

The SMH reports that:

RESIDENTS have tried everything to get rid of them: flashing lights, rubber snakes, spikes on sills, mirrors on windows, chilli oil on woodwork, even lying in wait with hoses or water pistols. But the sulphur-crested cockatoos of Potts Point, which have caused more than $40,000 in damage to one building alone, are absolutely incorrigible, say infuriated residents, whose plan for a cull is stuck in bureaucratic limbo.

Many of the homes affected are in heritage-listed, art-deco buildings, with wooden windowframes eaten through by the birds. At Kingsclere, a 1912 building on Macleay Street, cockatoos have destroyed slate roof tiles, causing them to drop seven storeys to the street.

The birds have also caused damage to Potts Point and Elizabeth Bay apartment buildings Werrington, Ikon, Villard, Byron Hall, Tara and the Devere Hotel, where a neon sign fell after cockatoo sabotage.

Frustrated Kingsclere residents have applied to the National Parks and Wildlife Service for a licence to kill cockatoos. Asked how many birds would need to be culled to fix the problem, Kingsclere resident David Crompton said: ”I don’t know. But it seems the same five or six keep coming.”

He conceded that more birds may return after a cull, but said it would at least halt the damage for a while. National Parks officers confirmed the damage and the public risk it posed, leaving residents optimistic of a solution.

But the City of Sydney objected to a cull and suggested a trial of a shocktrack system, a non-lethal deterrent used successfully at Cook + Phillip Pool and Woolloomooloo wharves.

Is it impossible to adapt the units to the marauding cockatoos? Do we go about killing animals because they’re inconvenient to us? This seems incredibly selfish. Culling the cockatoos should only be a last resort.

Here was a petition (now closed) against the cull to be sent to the NSW Environment Minister & Director NSW National Parks & Wildlife. Email the Environment Minister to save the cockatoos!

Selling NSW govt electricity networks could raise $35 billion

The NSW government could raise $29 billion – $35 billion, if not substantially more, from sellng its electricity distribution and transmission networks. These numbers come from summing the RABs (regulatory asset bases) of the four businesses and applying a conservative multiplicative factor.

This is a very large amount of money. Careful consideration should be given to whether devoting this capital to electricity networks is its best use, particularly in light of the need for transport infrastructure in NSW.

Submissions – NSW Special Commission into Electricity Transactions

It’s difficult to find submissions to the NSW Special Commission of Inquiry into Electricity Transactions. Google searches throw up the following:

• NSW Business Chamber submission
• Infrastructure Partnerships Australia submission
• City of Sydney (can only find a reference to a submission)
• Public Service Association (PSA indicated that it put forward its submission to the Owen Inquiry)

The Infrastructure Partnerships Australia submission suggests that privatising the NSW distribution and transmission networks (the “poles and wires”) could realiase between $29.2 billion and $34.5 billion. This feels like a high number to me.

Why Prime Minister Gillard may survive a by-election loss

A by-election loss for the Gillard Labor Government need not lead to Tony Abbott becoming Prime Minister.

Gillard has the support of 76 members of the House of Representatives while Abbott has the support of 74 (counting Tony Crook). With one Labor MP as Speaker, this turns into a 75-74 vote on confidence motions on the floor of the House – assuming that both Tony Crook and Bob Katter vote with Coalition MPs against Gillard

A by-election loss for the Gillard Government would lead to a 74-75 split on the floor of the house in favour of Abbott. But it is highly likely Labor MP Harry Jenkins would resign the speakership to prevent Abbott becoming Prime Minister.

Atlas of NSW

The NSW Land and Property Information division of the Department of Finance and Services has recently published its online Atlas of NSW overlaying all types of statistical information onto maps of NSW covering on the topics of economy, elections, environment, history, people and the 2006 census.

I’ve only looked in detail at the elections section, which is a fabulous treasure trove of historical information from 1856, including electorate maps and results. You can zoom in to any part of NSW and scroll through time. No doubt Antony Green enjoyed himself putting the information together!

Here is the electoral atlas.

NSW Parliament publication – NSW Election 2011: Overview of Legislative Assembly Results

My blog has suffered from neglect recently due to my extreme business in my new job as a consultant for the Allen Consulting Group.

I thought I’d publish a link to something students of NSW politics will be very in interested – the NSW Parliament’s publication on the lower house results of the 2011 NSW state election.

The NSW Government has also published a treasure chest of NSW state electoral history, including electoral boundaries, which I’ll link to on another post. Creating this electoral atlas would have been a truly herculean task.