Rent Seeking and Bureaucracy Position Statement

Statement
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 political polarisation, neither major party engages with these realities. Government funding is "cut back" as the result of party agendas, without any sense of perspective on what effective bureaucracies 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 individuals and corporations.

Supposed "user pays" reforms often really mean openings for rent-seeking individuals and corporations - resulting in a net transfer of wealth to the privileged and connected.

Current trends in health and education point to an administration whose costs exceed their savings. Both our existing policy and the press have outlined wasteful "top end" bureaucrats in universities. Our Health policy also notes rent-seeking issues in that sector.

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. 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 seemed to be more concerned about embarrassment than patient health. For all that, they were 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 bureaucracy had an important part to play too.

This is noted in the whole report, but particularly Chapter 6 parts b, e and f. 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. Tolled infrastructure and water rights are both vulnerable to this.

The appearance of rent-seeking can be avoided with transparency in contracts. 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 Transport and our Transparency policies.

The Commonwealth Employment Service, for all the criticism in its time, has been replaced with a plethora of rent-seeking companies that between them provide a less effective service than the CES did. Anecdotally, employees of the CES saw over 20 clients a day and placed more than half in jobs. Now, there are 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. The incentives are wrong. It is for this reason that we support restoring the CES.

A related problem is government departments outsourcing 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 surprising 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 we all need to keep our eyes 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.