Institute for Private Enterprise

Since my August report to subscribers on the paper given to the HR Nicholls Conference by barrister Stuart Wood on the abysmal failure of the Victorian police to enforce the law in the waterfront dispute there have been further worrying developments in similar vein. The most dramatic was the police's failure to deal with Jabiluka protesters who, with complete impunity, trespassed on the property of North Limited and despoiled the building occupied by the company. My attached article, which deals with that matter and the waterfront dispute, produced a response from Victoria police which can only be described as pathetic and which is effectively answered by an 'ex-member.' It is worth mentioning that, after my article was published, I had a call from an existing member of the force who said that the lower ranks are very unhappy with not being able to do their duty and who claimed that the decision of the Police Association to affiliate with the Victorian Trades Hall Council was taken without a vote by members.

I have plans to pursue this important issue further. I should also report that I have given a seminar at the Commonwealth Treasury outlining some preliminary results of my project for the Council of Federal and State Labor Ministers on labour market deregulation. The presentation appeared to be well received and will be repeated at the forthcoming Economists Conference in Sydney. I am not distributing a copy now as it is a similar, if improved, version of the paper which I gaveat he HR Nicholls Conference and which has been distributed. Subscribers will receive a copy of the final version when it is published, hopefully in November. (However, if anyone would like a copy of the Treasury Seminar paper, I will send them one on request).

It is most disappointing that the election debate has scarcely touched the need for further industrial relations reform. Peter Reith has beavered away drawing attention to the very serious implications if Labor were to be returned and to implement its stated policies, which not only involve back-tracking on the reforms of the Coalition but also on those introduced by the Hawke-Keating governments. However, modern elections seem to focus primarily on what the leaders say and, astonishingly, John Howard has completely failed to exploit what seems to be a lay down misere.

Of course, trying to 'sell' a GST issue has been a very time consuming exercise. But surely it would have been possibleto chew gum and promulgate industrial relations reform? Those who opted to give preference to a GST over industrial relations reform will have a lot to answer for if, as now appears a very real possibility, the Coalition loses the election. Even if the Coalition gets up there are significant downsides involved in the GST 'package.'

For one thing, the introduction of a tax that will marginally improve efficiency is offset by higher spending that will substantially reverse the modest spending cuts made in the first Coalition budget. Thishigher spending is allegedly required to 'compensate' for the GST's price effects but in reality its main purpose is to try to 'persuade' voters to accept the new tax. It is amazing that no economic commentator has noted that, as the additional revenue from the GST will be almost entirely offset by the reduction in revenue from the elimination of the wholesale sales tax and of various State taxes, the substantive case for compensation is very weak.

For another thing, it is astonishing to hear John Howard arguing that a GST is needed to ensure the future provision of government services when there is considerable scope (and need) to reduce government spending, particularly on middle class welfare. These issues are developed in the enclosed articles.