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Seeing red on green bins: An economic rationalist’s reply

By Liberal Democrats - 28 September 2016 13

green bins

To many people the rollout of green bins may sound like a great idea. After all, it will make it easier to recycle waste in Canberra. What has been overlooked, however, is the fact that there is already a viable private sector providing these services. The real story here is just how willing the ACT government is to interfere in the private sector. All of this comes — of course — at our cost.

The Labor Government’s announcement to roll out green bins will cost ratepayers millions over four years. The cost of the pilot scheme in Weston Creek and Kambah implies an annual cost of up to $150 per household, well above the $50 deposit for a bin.

This is another example of Labor rushing out costly ideas before the facts are known. As recently as January this year the Government told local businesses that the Government had no plans for green bins and had previously knocked back a third bin for garden waste when the research had identified “high initial establishment costs and significant operational costs”. Private businesses who invested in providing green waste services on the back of these assurances will now see their business callously destroyed.

The lack of consultation and disregard for the role of existing operators demonstrate that the ACT Government is no friend to business.

In fact, the ACT’s red tape and regulation practices are well behind Australia’s leading practice. A 2013 Issues Paper from the ACT Treasury showed that the ACT’s processes were inconsistent with most of the leading practices identified in the Productivity Commission’s report for COAG on Benchmarking Regulatory Impact Analysis. Nothing seems to have been done to improve practice, particularly in relation to impacts on competition, transparency and consultation. The ACT is one of the few jurisdictions that allows exemptions to the need for a Regulation Impact Statement on any grounds beyond than exceptional circumstances.

Rather than using well-established means for determining the scope of government, such as consultation, analysis, and evidence-based policy design, Labor has rushed out a silly and poorly considered policy just a few weeks out of an ACT election.

While the Liberal Democrats welcome the Government’s recent partial backflip on its misguided liquor reforms, it must be recognised that the Government has form on ill-judged regulation.

Who can forget the pathetic law that required charity sausage sizzles to undertake expensive training for safety supervisors? The law was reversed after it was clear that there had been no consultation and the regulation was completely out of proportion to the risks involved. The Government also made a botched attempt to impose costs on displays of Christmas lights.

The recently passed Discrimination Amendment Act is also likely to add considerable costs and uncertainty to business without addressing the issue of discrimination. The legislation introduces a rebuttable presumption that discrimination has occurred after weak tests have been passed (including circumstantial or indirect evidence). Reversing the burden of proof in this way clearly imposes additional uncertainty through regulation. Prudent businesses will adopt a range of expensive defensive measures — human resources policies, diversity training, and compliance and monitoring beyond what the business would already reasonably require — so that they can better defend themselves against any future claims. As recent claims involving alleged discrimination in other jurisdictions have shown, the process itself often becomes the punishment.

Mr Barr’s concern for popularity rather than good policy was highlighted again by the rash decision to mimic NSW’s ban on greyhound racing while in New Zealand, only hours after the lengthy report was handed down. The Liberal Democrats believe that the ACT should work out the best way of regulating this industry on the basis of a proper analysis of the impacts of regulation that serve to meet the desire of people to follow this sport with as little adverse effect on animal welfare as possible. The Government’s rush to a ban ignored the fact that the Canberra Greyhound Racing Club had just spent $30,000 on new security systems to help prevent illegal live baiting.

Despite the Government’s claims that it is reducing red tape, Access Canberra has been too focussed on a myriad of inspections and regulations and is only now moving towards risk based approach to regulation. The Liberal Democrats will ensure that Access Canberra’s current process of simplifying and standardising processes for businesses and individuals across more than 70 licensing areas will be subject to independent assessment to eliminate unnecessary regulations develop a simplified business licensing framework that also takes greater advantage of modern, more flexible regulation that leverages market forces and peer to peer ranking, and ultimately reserves government regulation for only the highest risk areas.

The ACT Government’s disregard for private business extends to running a commercial linen company — the Capital Linen Service — providing services to public and private hospitals, hotels, restaurants, and major tourist attractions. The Liberal Democrats will ensure that this activity will be examined to see whether it has been acting in a competitively neutral manner, why the service cannot be provided by the private sector, and the rationale for funding provided by the Capital Linen Service to a group representing its customers.

While facilitating recycling is a laudable policy objective, there is often much more to public policy issues, as highlighted by the above example. The ACT Liberal Democrats are committed to evidence-based policy, economic rationalism, and ensuring that we have a lean and accountable government.

 

Roman Gowor

 

Roman Gowor is a Liberal Democrat Candidate for Murrimbidgee.

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13 Responses to
Seeing red on green bins: An economic rationalist’s reply
creative_canberran 4:20 pm 30 Sep 16

devils_advocate said :

creative_canberran said :

If it’s good enough for the City of Sydney, and the City of Orange, and many other places, it’s good enough for Canberra.

The fact that everybody else is doing something (dumb) isn’t a particularly credible argument as to why we should do it.

Those jurisdictions would have undertaken a process to justify the provision of the service. If you can provide your own evidence based analysis rebutting their’s, then you may call it dumb.

Maya123 2:16 pm 30 Sep 16

creative_canberran said :

Elf said :

Most Recycling bins are filled with rubbish as well as recycling. Who really thinks that the green waste bins will be rubbish free. the landscape yards that compost cant stop people dumping rubbish as it is, how are they going to manage this.

If they can filter out rubbish from recycling streams, where they have the added requirement of sorting bulk recycling into several specific material streams, then I don’t see it being a challenge also filtering out waste from the green recycling stream. Heck the process might actually create some jobs.

How about creating some more jobs of inspectors and doing a random inspection of bins to check that the correct waste is going in each. Better to educate the community than need to sort the non-recyclables out of the waste stream after collection.

devils_advocate 11:55 am 30 Sep 16

Liberal Democrats said :

@devils_advocate

In short, yes, we consider that either Labor has received poor advice or has disregarded the overwhelmingly strong argument against this green bins proposal.

Leaner government can be achieved through a commission of audit to identify savings in the scope of government service delivery.

Thanks for the well-thought-through answer. I support the idea of taking a case-by-case approach to outsourcing, I can’t claim to have read the literature in detail but I think outsourcing works best in routine service delivery where performance can be readily (quantitatively) measured, risk/consequence is low, services are homogenous (quality not a major factor) and markets are competitive. So you have my support on that approach.

As for the commission of audit… I kind of had to laugh when this was mentioned in the same sentence as identifying savings. There is so much low-hanging fruit in this town in terms of reducing pointless regulation, red tape, bureaucracy and waste that I really don’t think you’d need a commission to tell you about it.

Overall, good luck (and I mean that sincerely).

devils_advocate 11:00 am 30 Sep 16

creative_canberran said :

If it’s good enough for the City of Sydney, and the City of Orange, and many other places, it’s good enough for Canberra.

The fact that everybody else is doing something (dumb) isn’t a particularly credible argument as to why we should do it.

miz 10:40 pm 29 Sep 16

While I agree that the ACT Govt is consistently shown to be a red tape nightmare, there are some things for which government should be directly responsible for, and for which we pay taxes/rates. Rubbish is one of these.
It was stupid of govt not to implement green bins years ago when it had the opportunity to do so. However, the trash pack system has proven to be quite unsatisfactory all round and it’s time for this issue to be resolved properly.
And I personally have no issue with the government running a linen service. Privatising has been shown not to be viable in many instances, and it’s certainly not worth doing it simply on ideological grounds. Privatisation just gives firms and govt an extra layer of red tape and a way of deflecting responsibility.
Also economic rationalism is a failed ideology in which only those who have, get any benefit. That is not how society should operate.
Thanks for this post, I now know I will definitely not be voting for the Lib Democrats.

creative_canberran 6:37 pm 29 Sep 16

Elf said :

Most Recycling bins are filled with rubbish as well as recycling. Who really thinks that the green waste bins will be rubbish free. the landscape yards that compost cant stop people dumping rubbish as it is, how are they going to manage this.

If they can filter out rubbish from recycling streams, where they have the added requirement of sorting bulk recycling into several specific material streams, then I don’t see it being a challenge also filtering out waste from the green recycling stream. Heck the process might actually create some jobs.

creative_canberran 6:34 pm 29 Sep 16

The Lib Dems are ideologically backward. None of their ideas are practical in a modern and highly interconnected society. We would all need to live in bubbles for their plans to work.

Now as to this specific issue. No where in this rant does Gower address the fact municipal green waste is already offered elsewhere in Australia. No doubt that’s a deliberate omission because it undermines his arguments. If it’s good enough for the City of Sydney, and the City of Orange, and many other places, it’s good enough for Canberra.

Elf 5:27 pm 29 Sep 16

Most Recycling bins are filled with rubbish as well as recycling. Who really thinks that the green waste bins will be rubbish free. the landscape yards that compost cant stop people dumping rubbish as it is, how are they going to manage this.

dlenihan 1:07 pm 29 Sep 16

Maybe people that live in Canberra, would just like the same type of service from the local authority that almost every other local council within Australia provides.

Liberal Democrats 12:48 pm 29 Sep 16

@devils_advocate

In short, yes, we consider that either Labor has received poor advice or has disregarded the overwhelmingly strong argument against this green bins proposal.

Leaner government can be achieved through a commission of audit to identify savings in the scope of government service delivery. The truth is that if there is a market of service providers out there collecting green waste, then government should not intervene. User pays is a very important principle here: why should people who have low-maintenance gardens effectively subsidise people who might make extensive use of the green bins service? Governments should only really intervene where there is a market failure.

The literature around outsourcing and privatisation suggests that appropriately selected services can be provided by the market at much more competitive rates than government provision. Yes, there are some empirical suggestions: some services are more likely to be successfully outsourced than others. There is a further question about how other services can be outsourced in a manner than ensures accountability. It would be glib, then, to suggest that outsourcing everything is the best way forward, but we firmly believe that we could reduce cost and increase quality across a whole range of government services.

The reason why the article didn’t address the tram question is that there’s not much oxygen in that debate. We have a clear view on the tram: http://act-ldp.org.au/Policy_Transport.html. I’d say that it is a bit more considered than the Liberal party’s for the simple reason that we are not committing to a whole range of other capital expenditure. It seems highly dubious that the Liberal’s line that they will keep rates down is sustainable given they’re proposing to spend quite a bit of money themselves. We have the most credible economic argument for our proposal to freeze rates for four years.

devils_advocate 11:31 am 29 Sep 16

london said :

Surely if had bins there would be no excuse.

1) people can and do dump normal rubbish despite having bins for these. No reason why having dedicated greenwaste bins would stop people dumping greenwaste, particularly if they have to pay a $50 bin deposit.
2) it’s not the job of government to provide its own bespoke alternative to conduct which is illegal.
3) that’s particularly the case when the government is displacing private investment.

london 10:33 am 29 Sep 16

Can’t see why anyone would object. I expected Canberra to have best environmental options before moving here but find they are lacking. We take our garden waste to Mitchell for very little cost and yet some around us in harrison mow lawns and dump the grass clippings around trees and on empty block of land. Surely if had bins there would be no excuse.

devils_advocate 3:23 pm 28 Sep 16

In theory that sounds fine, but to develop the policy evidence base, don’t you need capable and experienced policy analysts? Do you think the government already has them and they’re being ignored, or are you going to hire that expertise? How does that fit in with a leaner government?
And are you really touting outsourcing and privatisation as the panacea for all perceived inefficiencies in government? Finally, why in an article about economic rationalism are you silent on the (white) elephant in the room, the tram?

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