Sections

Services

Information

UK United Kingdom

In mining and governing, policy made on the fly is likely to flop

Most controversial public policy could be said to be made on the run, or at least amended on a brisk walk. So the revelations in Peter Martin’s recent article on the errors embedded in the Gillard government’s…

Martin Ferguson, Julia Gillard and Wayne Swan announced the MRRT in 2010 … but three ministers and three miners do not a policy make. AAP/Alan Porritt

Most controversial public policy could be said to be made on the run, or at least amended on a brisk walk.

So the revelations in Peter Martin’s recent article on the errors embedded in the Gillard government’s Minerals Resource Rent Tax (MRRT) are all too familiar.

There is much to criticise. The tax agreement is infamously short - only one and a half pages - and was signed off without experts from treasury in the room to properly assess the proposal and ensure the government’s objectives were being pursued.

Certainly, it was a compromise agreement - all policies are, given the complex nature of such problems and the conflicting goals of stakeholders and governments. But in their rush to put the issue to rest, it seems the government was too accommodating towards those seated across the table and, as Peter Martin reported, a drafting error allowed the states to take a huge cut of the revenue before it reached the Commonwealth.

While the Gillard government’s ill-fated MRRT may have failed its revenue raising purpose, it remains an invaluable lesson in policy formation. It taught us the high cost of making policy on the run, and it may even cost the government the next federal election, especially now the Greens have stepped away from their agreement with the government.

Policy making and reform should follow a slower, considered and rigorous path from conception to implementation to review.

In Australia, we often refer to the “policy cycle”, a model developed by Peter Bridgman and Glyn Davis in their ubiquitous handbook for students and practitioners of government policy. It stresses a sequential approach: problems are identified and carefully defined, research is undertaken and analysed, policy instruments considered and selected, stakeholders are consulted, coordination between government agencies occurs, and only then is there a decision, implementation and evaluation.

While Bridgman and Davis recognise the constraints of imposing a normative theoretical model in the messy “real world”, the policy cycle still provides critical analytical tools. By stressing process and rigour, it helps break complex problems into manageable pieces to enhance understanding of the issues and the appropriateness of any response. I agree with the authors that good policies should include all these steps, even if the sequence varies or some steps are repeated.

I’ve found in my research that while this cycle model continues to guide policy making, particularly within government departments, it remains a best case scenario.

Life and politics often get in the way. The problems that arise are complex and unpredictable, as can be the solutions. Policies are sometimes made very quickly for good and bad reasons. Sometimes whole sections of this policy cycle are ignored. Sometimes decisions are made by the prime minister alone (such as Howard’s reflexive declaration of military support to President Bush following the September 11 attacks) or with a small number of others (a la Rudd’s “gang of four”), or, as it appears here, all of the above.

There are, unfortunately, many other cases of policies made on the fly that later flopped. The Howard government’s Northern Territory intervention is one example. This was a grab-bag of policies hastily assembled and rapidly pushed through parliament without normal Senate review - prompted by a Four Corners exposé of the appalling and heartbreaking abuse and neglect of indigenous children and others, and the Little Children Are Sacred Report, which had laid bare the extensive abuse and dysfunction in many indigenous communities.

Yes, the cause was urgent, but it had been increasing in urgency for decades. Deeper government consideration and consultation and robust parliamentary scrutiny would have ultimately led to much better policy, and better health, safety and education for Indigenous Australians. In their rush to do something quickly, the Howard government reportedly neglected even to consult the authors of the report and consequently ignored most of its central recommendations, such as the necessity to engage with community leaders to tailor meaningful policy responses.

The pink batts scheme is another example. It was a key plank of the Rudd government’s raft of policies to quickly quash the local effects of the global financial crisis. Lenore Taylor and David Uren report in their book Shitstorm, that when free ceiling insulation was offered to households, the sector rapidly expanded to 20 times its original size, with “many shonky and inexperienced operators” taking part. This was a recipe for calamity.

The scheme only operated for eight months, but four deaths and around 200 house fires have been attributed to it. Not only did Rudd’s “Kitchen Cabinet” veto two, safer policy alternatives recommended by their government departments, but “clear warnings about the danger inherent in the scheme [had] been dismissed in the rush to implement the government’s stimulus decisions”.

Nearly half of the $2.5 billion allocated for the scheme would be spent checking roofs and repairing unsafe electrical work.

Process matters. The exacting set of processes suggested by the policy cycle does not guarantee perfect governing, but as Bridgman and Davis state, it does reduce the chance of “howling errors”, such as a revenue raising tax that fails to raise revenue and destabilises a government already under attack.

Join the conversation

45 Comments sorted by

  1. Ben McCombe

    logged in via Twitter

    re the pink batts scheme:

    "The scheme only operated for eight months, but four deaths and around 200 house fires have been attributed to it. Not only did Rudd’s “Kitchen Cabinet” veto two, safer policy alternatives recommended by their government departments, but “clear warnings about the danger inherent in the scheme [had] been dismissed in the rush to implement the government’s stimulus decisions”.

    This is true, but very misleading. The number of fires increased, but so did the number of installations. During the period of the Home Insulation Program, the rate of fires per 1000 installations fell from 1.31 to just 0.16.

    It actually made the industry safer, not more dangerous as the coalition and many in the media keep reporting.

    http://blogs.crikey.com.au/pollytics/2010/10/19/insulation-fire-risk-%E2%80%93-the-data-is-in/

    report
    1. Steve Hindle

      logged in via email @bigpond.com

      In reply to Ben McCombe

      The other tragedy is that saving energy by insulating our buildings is still a good idea. It is an idea that deserves to be resurrected. Insulation can be an investment that returns all of its costs in power bill savings and the increased home value. However the damage done by rushing poorly thought out ideas is a lesson in how not to develop policies. This good idea will now probably sit on the shelf for many years until we are forced to revisit it.

      report
    2. Tim Keegan

      Community Worker

      In reply to Ben McCombe

      Yes, this is what a more in-depth look at the issues found and what the MSM should have reported a whole lot better. The ANAO report is interesting reading and confirms the author's point about rushed policy making. I was hoping that the ANAO report would lead to a re-developed program that met its original objective re tail end GFC and energy/carbon polution savings.

      report
  2. Ngoc Luan Ho Trieu

    logged in via Facebook

    '...problems are identified and carefully defined, research is undertaken and analysed, policy instruments considered and selected, stakeholders are consulted, coordination between government agencies occurs, and only then is there a decision, implementation and evaluation...'
    I do not think that 'research' should be taken as a separate stage in this 'policy cycle' but it should be undertaken at every stage of the policy cycle to identify and define the problem, to design or consider and select…

    Read more
  3. Riddley Walker

    .

    Labor, Liberal and Nationals have made their choice. It is for the big miners and the green light to environmental destruction.

    Minister Burke sold out the Tarkine to mining interests at the behest of NSW Right Paul Howes, and was applauded by Labor premier Lara Giddings and the Coalition. Only the Greens are standing up for the Tarkine, the largest tract of temperate rainforest left in Australia.

    Three days after that decision, Minister Burke and the Prime Minister decided that they would…

    Read more
    1. Robert McDougall

      Small Business Owner

      In reply to Riddley Walker

      they made lots of promises in NSW in order to get elected re CSG, which they promplty ignored once in power

      report
  4. Colin MacGillivray

    Architect, retired, Sarawak

    Dead right.
    It is a fault of the Westminster adversarial system of government- the elected government and opposition- one trying to stay in power and the other trying to knock them off. And there's no possibility of long term strategic planning in a 4 year term.
    Despite its shortcomings, the Singapore government tries the sequential approach to continue the amazing prosperity of that tiny island state. Public politicking is supplanted by more thoughtful decision making.

    report
  5. Garry Baker

    researcher

    Australia's mining policy has been quite simple to understand (very simple) - Hand more control of our mineral assets to those with deep pockets. Also let them buy any Australian mining company with ease. Consequently the worlds mining giants have poured in, and now they run the show - Not government. As it stands, more than 83% of our mineral assets are now in foreign hands - indeed, quite a fair % are owned by Sovereign State entities, or their proxies. Nationalised, if you like.

    As…

    Read more
  6. paul magnus

    logged in via Twitter

    The urgency of global warming, climate change and ocean acidification is increasing every time we reassess to situation. Policy has to be reassessed and updated accordingly.

    report
    1. Geoffrey Harold Sherrington

      Boss

      In reply to paul magnus

      Paul Magnus - ocean pH change?
      Please give me the title of a peer-reviewed paper, printed less than 3 years ago, that has measurements representing all parts of all ocean systems to all depths, plus figures taken from actual sea water with biota included - a paper that shows that pH has changed within the limits of experimental uncertainty on time scales from hours to decades. To my knowledge, there is no such paper, but there are so many FAIL papers along these lines that it's possible I might have missed a key paper. I ask in earnest, not for combat, because I've done a modest amount of such work and simply cannot reconcile my findings with the current 'science' that is flooding the minds of our youngsters (and their teachers).

      report
    2. Geoffrey Harold Sherrington

      Boss

      In reply to Robert McDougall

      Robert McDougall
      Making straw men again, Robert?
      No, I'm simply doing what every prudent scientist should do, I'm seeking high quality raw data amenable to audit.
      That's a better way than trying to "hide the decline".
      http://www.youtube.com/watch?v=WMqc7PCJ-nc

      report
    3. Peter Ormonde
      Peter Ormonde is a Friend of The Conversation.

      Farmer

      In reply to Geoffrey Harold Sherrington

      Ah yes, a prudent scientist - last week it was temperature that all the world's imprudent climate scientists were lying about (not to mention Gavin the weatherman on TV). This week Geoff's mastered oceanography and complex system chemistry ... busy weekend was it Geoff?

      Nobel Committee are you watching this bloke go????

      Oh well at least Youtube is a slight improvement on citing Jo Nova directly.

      report
    4. Geoffrey Harold Sherrington

      Boss

      In reply to Felix MacNeill

      Felix & Peter,

      Already I have mentioned that I worked for several years at the bench, looking at ways to measure quantities like pH with ion-specific electrodes and also spent a year on-and-off writing a draft masters' thesis on complications caused by working with impure water and some types of water with solids in suspension (mainly clay). So I'm not taking off here from a standing start. I've also pointed out that almost every pH/ocean water paper I have read defines pH incorrectly, not as…

      Read more
    5. Geoffrey Harold Sherrington

      Boss

      In reply to Felix MacNeill

      Felix, I do not know what a PRATT is. But I can give an off-the cuff talk about Fibonacci numbers, chirality and geometry of sunflower seed patterns.

      report
    6. Peter Ormonde
      Peter Ormonde is a Friend of The Conversation.

      Farmer

      In reply to Geoffrey Harold Sherrington

      Geoff the thing I find a bit disturbing is that - as a prudent scientist - you don't seem to consider that there might be a few levels of magnitude between doing a bit of lab work with pH in colloidal suspensions in a beaker and getting to grips with large scale systems like oceans and pH.

      And yet you are confident enough - armed with this expertise - to pile a bucket on anyone with the temerity to suggest that we are reaching the end opf the rope carbon-wise. Depite the fact that these guys actually look at oceans, climate, atmosphere and the like for a quid.

      See it's actually the idea of a limit to burning things that is completely unacceptable isn't it Greg - it's not the science, it's the conclusions. You are looking for excuses to do nothing. Do you smoke?

      report
    7. Felix MacNeill

      Environmental Manager

      In reply to Geoffrey Harold Sherrington

      A PRATT is a Point Refuted a Thousand Times. 'Climategate' and 'hide the decline' is a classic example.

      Anyone who would seriously advance this material as forming a worthy component of an intelligent debate, while making claims about scientific expertise is, quite frankly, displaying serious cognitive dissonance.

      report
  7. Peter Ormonde
    Peter Ormonde is a Friend of The Conversation.

    Farmer

    Can't get much better analysis and research than Ken Henry's tax review.

    But in the absence of public debate and understanding then something that looked a bit like a resources tax was by and large OK apparently.

    It is not enough to see the policy process as some sort of iteration between bureaucrats and politicians. It must also involve public understanding and support and that's where the time comes in.

    Cumbersome, slow and awkward this democracy business clunks along at a snail's pace…

    Read more
  8. Tim Keegan

    Community Worker

    My impression of the Coalition government's original approach to the child abuse revelations in the NT was to see it as an opportunity to beat up on the blacks [Look at them, they are not us] and futher other agendas. From my reading, the issues in the NT were a catastrophe well before they turned into a Commonwealth Government 'emergency', when funds were found. That most of the recommendations in The Little Children are Sacred Report were ignored attests to this. A lot of other agendas were pursued in the Intervention and Labor has continued to pursue them.

    report
  9. Brenton Prosser

    Senior Research Fellow in Policy, Sociology and Public Health at University of Canberra

    The 'best case scenario' policy cycle model assumes a powerful executive, majority government and departments as the key players in successful policy implementation - this does not look or sound like the last three years!

    And even if a large swing to the Coalition ends minority government in the House and dislodges the Greens' grip on the 'balance of power' in the Senate, it will be handed over to a handful of independents. Add to this there is little chance that the pace of the media cycle is going to let up to facilitate slow, sequential and considered policy...

    Perhaps we should be looking toward policy models that place the messiness of the 'real world' at front-and-centre, rather than looking back to an ideal of decades past?

    report
    1. Robert McDougall

      Small Business Owner

      In reply to Brenton Prosser

      i would say its the powers behind the thrones. All made possible through "commercial in confidence" like subterfuge.

      Effective government requires transparency and accountability, not only for effective policy, but also to inform and educate the electorate so that they can make informed decisions as to who is most able to be most effective.

      If a commercial interest wants to operate in the public space, or needs support of public funds, then ALL information that related to what is being sought needs to be in the public domain.

      Cutting out the lobbyists ability to gain access behind the scenes is a substantial step in the right direction. I would go further and amend legislation so that ex politcians are forbidden for life from being a lobbyist for any organisation.

      report
    2. Geoffrey Harold Sherrington

      Boss

      In reply to Brenton Prosser

      Brenton Prosser,
      Perhaps as a country we should have a convention to determine which parts of the Constitutions of the Commonwealth and States should be handled by whom as allowed by law. There are many present functions that were never enabled by the Founding Fathers. Either stop them at once, or legitimise them by Referendum.
      Much of what you see as a problem could be traced to bodies, often government bodies, that intrude inefficiently and usually uninvited, into areas beyond their ken and beyond their enablement.
      In short, governments are the lead in the saddle of progress.
      Release the vast bulk of those who sit around telling others what they can and cannot do, point them to productive effort, shrink the legal process back into a properly-constructed judiciary, halve the number of Federal and State departments and let business get on with the jobs ahead.
      There is a proven business track record for those whose eyes are still open.

      report
    3. Felix MacNeill

      Environmental Manager

      In reply to Geoffrey Harold Sherrington

      ...turn the calendar back 100 years and eliminate all the greater complexity of the modern world and Geoffrey's suggestion would not be entirely idiotic.

      report
    4. Felix MacNeill

      Environmental Manager

      In reply to Brenton Prosser

      Brenton, I'm not sure you need majority government at all - but you do need a calm, rational government, with a reasonably functional parliament.

      I would have thought that the carbon price legislation, though not perfect, demonstrated that a complex minority government could, in fact, produce sensible compromises that may even have been better as a result of having to go through internal debate, based on good will but different perspectives. The engagement of the Greens on the one hand and Oakeshott and Windsor on the other worked well - though mainly because we were talking rational people of good will who grasped the seriousness of the problem. And they took the time to listen to the experts - not least the experienced bureaucrats.

      Now the much trumpeted media cycle was a problem, I'd grant you...

      report
    5. Geoffrey Harold Sherrington

      Boss

      In reply to Felix MacNeill

      Felix MacNeill
      In logic, a tax on profits from mining the minerals that belong to the people is not different to a tax on the dirt on unwashed potatoes that belongs to the people, or the minerals that the people own, taken from the ground by animals we kill then eat, or on the very air we breathe, that belongs to all people.
      You cannot make a logical, definitive case for selective taxation of whomever might be making a profit at a given time.
      Try making a case. You'll not be able.

      You main fault is to assume that taxing bodies know better how to spend profits than the people who make them. I'd contest that with utmost vigour.

      report
    6. Peter Ormonde
      Peter Ormonde is a Friend of The Conversation.

      Farmer

      In reply to Geoffrey Harold Sherrington

      Yet more utmost vigour Geoff ... you're incorrigible. Logic now! And some economics to boot!

      When you say folks make profits - how do they do that? Who actually makes the profits in a mine - the investors' capital? the managers' hard work and sweat ? the secretaries answering the phone? How does this miracle occur?

      What a funny chap you are Geoff. English?

      report
    7. Peter Ormonde
      Peter Ormonde is a Friend of The Conversation.

      Farmer

      In reply to Peter Ormonde

      Here you go ... have a read of these and we'll have a chat ...

      A nice little paper by Johns Freebairn & Quiggin on the "special case" of taxation on mining...

      http://www.uq.edu.au/rsmg/WP/WPP10_3.pdf

      The Henry Tax Review proposal for a resource rental tax - very different to what is now operating ( you want Chapter 6)

      http://taxreview.treasury.gov.au/content/downloads/final_report_part_1/00_afts_final_report_consolidated.pdf

      And lastly a short report on the Minerals Council's submission to the Henry Tax Review in which the Council argued strongly for a profits based resources tax to replace the existing production based royalty system.

      http://www.theage.com.au/business/big-miners-cry-foul-but-this-is-what-they-asked-for-20100505-uat2.html

      Look like the Minerals Council of Australia doesn't understand about the dirt on spuds issue Geoff ... better get onto them.

      report
    8. Peter Ormonde
      Peter Ormonde is a Friend of The Conversation.

      Farmer

      In reply to Peter Ormonde

      And if that's not enough ... here's the Minerals Council submission itself .... makes an interesting read actually - especially this notion of mining as a "joint venture" between the state and the mining company.

      http://taxreview.treasury.gov.au/content/submissions/pre_14_november_2008/Minerals_Council_Australia.pdf

      You might need to sort the MCA out first actually ... they seem to think it's a good idea. Charles Copeman would NEVER have tolerated such betrayal!

      report
    9. Felix MacNeill

      Environmental Manager

      In reply to Geoffrey Harold Sherrington

      Geoffrey this is so startling a piece of projection that I am simply unable to respond - you have disconnected completely with reality.

      report
    10. Geoffrey Harold Sherrington

      Boss

      In reply to Felix MacNeill

      Sorry Felix, it was my error to assume that Universities had by now grasped some concept of lateral and constructive thinking. The reason that people like the MCA have their names alongside tax designs is that they are handed a choice, like "Endorse a,b,c or d". The miners really don't want to take any.
      You guys are also stooges in asking questions about my questions. There's practically nothing of any value in any of the blog responses I've received here. Ask a question, get a different question…

      Read more
    11. Peter Ormonde
      Peter Ormonde is a Friend of The Conversation.

      Farmer

      In reply to Geoffrey Harold Sherrington

      No Geoff ... nice try but if you had actually READ the MCA submission to Henry you wouls see that the Minerals Council argued forcefully in favour of a profit based alternative to the multiplicity of state and territory royalties and other taxes that saddle the industry with ridiculous complexity anmd different tax regimes depending what side of what border your hole is sitting. They did not get forced into any position at all. They supported and argued in favour of an MRRT style approach - one that is far more widespread and comprehensive than the eventual deal negotiated.

      Read what I sent you and we can have a chat - otherwise Geoff you're just making stuff up again.

      report
    12. Geoffrey Harold Sherrington

      Boss

      In reply to Peter Ormonde

      Peter, Please don't commence your replies to me with "No, Geoff" and then argue from a position of little to no significant knowledge.
      In 1987 I spent several days with a prominent QC, drafting a model Bill for an Act to overcome some of the complications arising from State ownership of most minerals and the Feds wanting to muscle in. I mention that as the depth to which I personally studied the problem. There are others who went much further. It's not easy to write a draft Bill. You have to have…

      Read more
    13. Peter Ormonde
      Peter Ormonde is a Friend of The Conversation.

      Farmer

      In reply to Geoffrey Harold Sherrington

      No Geoff ... what a week - logic, economics and now the law ... watch out Chris Monckton you're polymathery is in peril!

      Read the MCA submission Geoff rather than prattle on about something you sat in on back when you were a geochemist for Ranger. You are all wrong both on what they were proposing and the reasons for it ... If you want to talk about reality base it on some current facts rather than your old anecdotes.

      Must admit I did find the paper you endorsed on Tennant's porphyry and…

      Read more
    14. Geoffrey Harold Sherrington

      Boss

      In reply to Peter Ormonde

      Peter,
      In all ways, no more means no more. Cheerio.

      report
  10. Bronwyn Hinz

    Policy Fellow at the Mitchell Institute for Health and Education Policy (Victoria University) & PhD Candidate, School of Social and Political Sciences & Melbourne Graduate School of Education at University of Melbourne

    Thank you all for taking the time to read this. Some responses to some comments:
    Ben McCombe - yes that's true. Alas word limits meant I couldn’t include everything I wanted to. I believe the point still remains that the policy would have benefitted from more rigourous research and consultation (and pursuance of departmental advice) prior to implementation, which would have likely made the resulting insulation work much safer again.
    Steve Hindle - agree.
    Ngoc Luan Ho Trieu - research usually…

    Read more
    1. Geoffrey Harold Sherrington

      Boss

      In reply to Bronwyn Hinz

      Bronwyn,
      It can be an interesting exercise to grab a copy of the Australian Constitution, then try to find which powers allow some of the activities that you mention. From where do you derive permission to meddle with more flexible working arrangements? Was it legal to harm the homes of some people with pink insulation, without a prior agreement covering acquisition of property (like by burning it down) on just terms? Just because people work for the Fed, there is no open door to any open slather clause for them in the Constitution.

      report
    2. Felix MacNeill

      Environmental Manager

      In reply to Geoffrey Harold Sherrington

      Geoffrey, we all appreciat that you have a deep aversion to evidence or facts, but you might like to consider that nobody was forced to have insulation installed, the acxtual rate of fires-per-installation was lower than before and, though the program was poorly managed (mainly by failing to create sufficient controls over the cowboys who sought to exploit an opportunity to steal from all of us) it did still lead to a grat many people having well insultated houses, greater comfort and lower energy usage. As failures go, it had quite a few positives!

      Anyway, I'm sure you'll find a way to tell me that I've failed to take into account Renaissance architecture or the square of the hypotenuse...

      report