The Australian - 17 February 2014
AMONG the worthy tomes in the Grattan Institute’s 2013 Summer Reading List for the Prime Minister is The Blunders of Our Governments, Anthony King and Ivor Crewe’s excellent new study of British policy ineptitude.
If Tony Abbott had read this book he might have felt a sense of foreboding as the policy that he is most closely associated with, the Coalition’s Paid Parental Leave scheme, has almost all of the hallmarks of blunderous policymaking identified by the authors.
“Blunders” are policies that fail to meet their own objectives - regardless of how sensible those objectives may be - at great cost to the taxpayer.
When Abbott launched his PPL policy in March 2010, he claimed its objective was to “enable more women to stay in the workforce and thus boost national productivity”. He would achieve this by offering women earning up to $150,000 a year six months’ paid leave at full pay.
Before the policy has even been implemented, there is a near consensus among key stakeholders that this approach will fail to increase workforce participation and has a vastly higher cost to the taxpayer than alternative policies, such as reducing the cost of childcare.
Abbott is in this bind by committing the majority of blunders identified by Crewe and King.
The most common cause of blunders relates to “cultural disconnect”, or making policy in ignorance of how those affected by the policy live their lives.
Abbott’s PPL policy demonstrates a complete ignorance of what the typical Australian earns in a year. While an income of $150,000 a year may be typical in Abbott’s inner circle, in reality a woman with this salary would be earning more than 95 per cent of Australian taxpayers, according to the Australian Taxation Office.
In a tightening fiscal environment where the government lectures manufacturing workers with an average salary of $67,000 about the generosity of their wages, giving taxpayer-funded grants of $75,000 to wealthy women is morally unjustifiable.
But when the regressive nature of this payment is compounded by Abbott’s seeming ignorance of existing PPL arrangements for professional women, the policy becomes not just exorbitant, but ineffective too.
As the Business Council of Australia pointed out: “Big business is already doing the heavy lifting on paid parental leave.”
Abbott might have noticed this had he not committed his second blunder - “a deficit of deliberation”. In policy making, “speed kills”, and rushed policy announcements that fail to engage in consultation exacerbate policy makers’ blind spots.
Only a narrow circle of people were consulted on the development of Abbott’s PPL policy; as a result, the policy quickly became a moving feast, with its cost and the funding model shifting between its announcement in March 2010, relaunch in August 2010 and reshaping in the lead-up to the 2013 election.
This could have been ameliorated had Abbott not committed his next blunder.
“Group think”, or an environment in which dissenters are pressured into silence to maintain group cohesion, can compound mistakes made early in the policy-making process. As a result, the policy’s flaws have been left uncorrected for years.
Why did Abbott embark on such a misguided course? The answer may lie in the prioritisation of symbolism over substance.
The fact that Abbott’s PPL policy was announced out of the blue, on International Women’s Day, at a time when there was significant speculation about Abbott’s level of support among female voters, is surely no coincidence.
In contrast to Abbott’s blundering approach to PPL policy-making, the previous Labor government introduced a PPL scheme that was a model of good practice.
The Labor government’s objectives were more achievable: to help parents take time off work to care for children; to support the health and development of the child and mother; and to encourage a continuation of workforce participation by parents.
Labor approached this objective through two years of policy deliberation, including an independent review by the Productivity Commission.
Labor elected to provide 18 weeks PPL, paid at the minimum wage, for parents earning less than $150,000; supporting those who needed it the most while allowing employers who wanted to offer more generous terms to employees the freedom to do so.
Importantly, Labor’s scheme incorporates Crewe and King’s recommendation for a “test drive” to allow the effectiveness of policy to be assessed. A two-year review by the Productivity Commission was built into Labor’s PPL policy, the results of which must be made public. Seems a bit of judicious reading might have saved Abbott some self-inflicted pain.
Tim Watts is the federal Labor MP for Gellibrand.