Rent Seeking and Bureaucracy Position Statement

Position Statement - Effective Government involvement, Excessive Bureaucracy and Rent-Seeking

The Pirate Party notes with concern the excessive growth in bureaucracy and rent-seeking, at the same time as we note the worthwhile possibilities for government involvement in the economy. Because of the excessive polarisation of politics, neither political party engages with these realities. Government funding is "cut back" as the result of Party agendas, without any sense of perspective on what effective bureacracies would in fact look like, resulting in both a chaotic outcome that does not improve the situation and further opens the way up for rent-seeking parties.

We note that the supposed reform of "user pays" in fact often means openings for rent-seeking parties and net transfer of wealth to the privileged and connected.

We note for example the fact that an excessive bureaucracy in both health and education, be that either in central offices in Canberra calculating needless statistics, or excessive administration in local establishments, has a cost which exceeds the savings which might have resulted from proper monitoring and supervision, which is itself a dubious notion. Certainly, we do not want to give academics a blank check, and spiraling health costs do need to be engaged with, but current trends have taken us past the point where any such measures could possibly be useful.

Our policy element https://pirateparty.org.au/wiki/Platform#Universities particularly notes these problems in Universities, and https://pirateparty.org.au/wiki/Platform#Transparent.2C_efficient_health_services notes rent seeking related to Health. The article https://www.macrobusiness.com.au/2019/06/ruthless-exploitation-international-students-destroying-universities/ outlines wasteful "top end" bureaucrats in Universities.

Prompted by problems with Dr Jayant Patel, The Queensland Public Hospitals Commission of Inquiry revealed many problems with bureaucracy. Some problems were unique to Queensland, but others would be expected to reveal themselves in similar bureaucracies elsewhere in Australia. Apart from bureaucracies calculating numbers needlessly, the health bureaucracy allocated resources inefficiently, telling clinicians what to do rather than listening to them. One example was to set up a small orthopaedic unit in Hervey Bay Hospital, which was too small to be effective. It would have been better to do fewer things well, but there was a political goal of setting up vote-winning "satellite facilities" which actually made the whole health system deliver worse outcomes for the same dollars. To some degree this was political; but other examples were also a function of bureaucrats not listening to clinicians.

The bureaucracy prioritised embarassing incidents becoming public as comparable to incidents involving harm to patients, and indeed seemed to be more concerned about embarassment than patient health. The further issue is that in spite of an onerous bureaucracy developing, it was ineffective in responding to concerns about Dr. Patel. Certainly, there were broader budgetary concerns which were covered up by Government propaganda, and perverse incentives around "efficiency dividends" prompting the prioritisation of some services at the expense of others, but onerous bureacracy had an important part to play.

This is noted in the whole report, but particularly Chapter 6 parts b, e and f, available at http://www.qphci.qld.gov.au/ We also note that many health initiatives are seized upon by private interests, who seek to take advantage of the opportunity and over-service - in fact, rent-seek - as compared to the original initiative, which was only meant to make a difference for those who were in most need of it without an excessive impact on the budget.

Many situations can be viewed from a rent-seeking lens. One view of rent-seeking is that privileged parties set up a difficult situation, and then charge people extra to escape from the situation they have set up.

We see this in the lack of a high-speed rail connection between Sydney and Melbourne. We all pay for this lack - be it in higher air fares, increased congestion at the airport, or increased noise pollution from aircraft. For sure, international flights and flights to destinations such as Brisbane and Perth will remain important regardless - but such a rail link would free up capacity for these other services.

An example has been the sale of water rights. The Pirate Party embraces transparency, but not just in the contracts themselves. We assert that if a financial approach cannot be readily explained to the general voter, it should be replaced with one that can be. It is not just a case of transparency - but also of maintaining clarity. This noted in our policy https://pirateparty.org.au/wiki/Platform#Transport_for_a_connected_society and https://pirateparty.org.au/wiki/Platform#Government_transparency

We note that the Commonwealth Employment Service, for all the criticism that was made at the time, has been replaced with a plethora of rent-seeking companies that between them provide a less effective service than the CES. We have anecdotal evidence for employees working at the CES who saw over 20 clients a day and placed more than half in jobs, as compared to providers who see a limited number of clients a day and then only at particular times. Then, you have stories of companies being paid more to interview a client than that client gets paid in a week, and encouraging people to become long-term unemployed as the companies get paid additional bonuses for placing such clients - rather than making "extra effort", it means they end up significantly less effort otherwise. You also have government department shifting their work base from employees to contractors, and ultimately costing more even though the original goal of such initiatives was to save money. The point is that problems with bureaucracy and structures are real and significant, and are ignored by both major political parties. This is more suprising for the Liberal Party, but in fact rather than engaging with the details, they engage in a theatre of ideology, letting significant problems grow and fester regardless of their rhetoric. Certainly, there is also a problem with the Labor Party having a naive view of the possibilities for government involvement. There are real and substantial benefits from government involvement in our economy, but you need to keep your eye on the ball.

The rent-seeking spotlight can be put on many things. It is the reason we see less shared wealth between all of us, but because it is not obvious, those abusing it can readily take advantage of it, and the rest of us struggle to appreciate what is going on. We have developed a sense of unease about the part of Government, bureaucracy and administration of the last few decades. While it is hard for us to put a finger on that unease, we feel that these trends in the background are an important contribution.

In spite of not being obvious, and hard to pin down, these concerns are nevertheless significant and worth engaging with.