Australia’s energy options: renewables and efficiency

The world is wrestling with the challenge of ensuring an ongoing supply of energy that does not damage the environment while enabling billions of people to appreciate the benefits of modern life. Global interest in renewable technologies is accelerating the maturity of many of these energy sources. These efforts are vital if the quality of human life is to be improved across the planet without causing its further degradation. Energy underpins all aspects of modern life and generates many externalities that affect both the environment and society more broadly, such as the environmental consequences of extracting the raw materials used in all energy generation. All forms of energy generation create externalities, although not all have an influence on the climate. Numerous policies have been established to adjust for climatic externalities in the energy generation and to incentivise low carbon emission sources of energy. There is a complex interplay between technological and economic factors influencing the deployment of renewable technologies, the relative cost of generating energy from different sources, and the broader political and economic cycles. Given how fundamental reliable energy is for modern life the costs involved in mitigating climate change are substantial. The scale of change requires examining public policy outcomes throughout the world to ensure that interventions are producing effective results in Australia.   Related identifier: ISBN 0 85801 280

Addressing entrenched disadvantage in Australia

An estimated four to six per cent of Australia\u27s population experiences chronic or persistent poverty or deprivation. Executive Summary Entrenched disadvantage is a wicked problem for any society. Disadvantage of one form or another will always be with us, but when disadvantage is entrenched, some Australians are not able to play their full part in our economy and society. An estimated four to six per cent of our society experiences chronic or persistent poverty or deprivation. This represents both a tragedy for the individuals concerned and a loss of economic potential for the nation. While we have policies in place or in development to address disadvantage, it is not clear that we have recognised the need to address the deeper problem of long-term, persistent and chronic disadvantage. As a rich and successful society, we can clearly do better – others do. Two aspects of entrenched disadvantage are clear: The problem is both significant and complex; and Current policies to remove entrenchment are not working. The people who find it hardest to escape from disadvantage appear to fall into six main categories: 1. Older people; 2. Less-educated people; 3. Households with no employed members; 4. Particular geographic areas; 5. Indigenous Australians; and 6. Those with chronic health problems. Current policies are mainly designed to get people into, or back into, the labour market. While this is an appropriate objective, there are people in our society who need targeted and/or additional help to prepare themselves for ongoing employment. It is difficult to get or hold a job if you do not have anywhere to sleep or have ongoing health problems. It is hardly surprising then that disadvantage is cumulative: The longer a person spends with significant disadvantage, the more likely he or she is to be stuck there. Children who grow up in a home with entrenched disadvantage are also more likely to face the same problem. Related identifier: ISBN 0 85801 299

Reinventing the regions: Victoria’s changing regional economies

Regional Victoria accounts for around a quarter of the State\u27s population and economic output. In March 2013 Deputy Premier and Minister for Regional and Rural Development Peter Ryan released the Reinventing the Regions report which documents the findings from a series of events held in 2011-2012 which CEDA, in collaboration with RDV, hosted. This report provides an overview of the changes taking place in five of Victoria\u27s regional economies, key policy and economic themes that emerged from discussions throughout the series of events, case studies from regional businesses and five individual event summaries. The event series provided an opportunity to engage key stakeholders including business, industry, government, communities and academia in a discussion of: The key economic drivers and prospects for growth; Challenges faced by businesses across five regions; How regional businesses are adapting to evolving economic conditions; and How they can capitalise on new opportunities. The series consisted of five events looking at the experiences of Ballarat and the Central Highlands, Hume,Geelong and Barwon South West, Loddon Mallee and the Latrobe Valley. This publication is a joint project of CEDA and Regional Development Victoria. &nbsp

A federation for the 21st century

A Federation for the 21st Century examines: The key challenges for a federation in the 21st century The potential for reforming the way government organises and delivers services The relationship between the Commonwealth and state governments in relation to funding, investment and infrastructure Local versus national requirements for services and regulation Engaging with state and Commonwealth policy makers to increase Australia\u27s long-term economic and social prosperity Chapters and authors: Section 1: Context Chapter 1.1 The historical context of Australia\u27s Federation Professor John Cole Chapter 1.2 Economic perspectives on federalism Professor Bhajan Grewal Chapter 1.3 Federalism and diversity in Australia Professor Nicholas Aroney Section 2: Critical interdependencies Chapter 2.1 The culture of Commonwealth and state relations Jennifer Menzies Chapter 2.2 The legality of federal government expenditure Professor Anne Twomey Chapter 2.3 Regulatory setting within the Australian Federation Dr Tina Hunter Chapter 2.4 Performance comparison in Australian federalism Alan Fenna Section 3: Determining roles, responsibilities and functions Chapter 3.1 Criteria for assigning roles and responsibilities in the Federation Professor Kenneth Wiltshire Chapter 3.2 Virtual local government Professor Percy Allan AM Chapter 3.3 The need for strong metropolitan governance within the Federation Lucy Hughes Turnbull AO Chapter 3.4 Providing public infrastructure in Australia Bree O\u27Connell and Brad Vann Chapter 3.5 Roles and responsibilities in the Federation Tanya Smith Section 4: A reform agenda Chapter 4.1 Reforming the Federation The Hon. John Brumby Chapter 4.2 Governments, subsidiarity and saving the Federation Terry Moran AC Chapter 4.3 Case study of reform in the Federation: Vocational Education and Training Dr Vince FitzGerald and Professor Peter Noonan Chapter 4.4 Entrenched disadvantage: Helping remote indigenous communities The Hon. Fred Chaney AO and Professor Ian Marsh Related identifier: ISBN: 0 85801 296

Healthcare: reform or ration

Healthcare: Reform or ration considers: The contribution of the biotechnology sector to the Australian economy, export challenges and opportunities and policies that would support sector innovation and advance Australia\u27s comparative advantage; How education in STEM skills underpins an innovative economy and policies that would improve the quality and quantity of students undertaking STEM subjects; and The fiscal challenges confronting Australia\u27s tax-based healthcare system, and the reforms necessary to sustain universal access. Authors Professor Just Stoelwinder Professor and Chair of Health Services Management, Monash University Professor Philip Clarke Professor of Health Economics, Centre for Health Policy, Programs and Economics, Melbourne School of Population Health, University of Melbourne Professor Ian Chubb AC Australia\u27s Chief Scientist Dr Julian Clark Head of Business Development, Walter and Eliza Hall Institute Dr Anna Lavelle Chief Executive Officer AusBiotech Dr Vince FitzGerald, Senior Research Fellow, CEDA Professor Ian Chubb AC Australia\u27s Chief Scientist Dr Julian Clark Head of Business Development, Walter and Eliza Hall Institute Professor Philip Clarke Professor of Health Economics, Centre for Health Policy, Programs and Economics, Melbourne School of Population Health, University of Melbourne Dr Vince FitzGerald, Senior Research Fellow, CEDA Dr Anna Lavelle Chief Executive Officer AusBiotech Professor Just Stoelwinder Professor and Chair of Health Services Management, Monash University Related identifier: ISBN 0 85801 286

Australia adjusting: optimising national prosperity

The recommendations form the basis of a National Productivity Policy (NPP) to drive a sustained improvement to Australia’s productivity so that the nation can realise ongoing economic growth. Reform agenda for an open economy To remain competitive and economically strong, Australia will need to adjust to economic changes taking place now – and in the future – to ensure we have a knowledgeable, productive workforce and strong, innovative industries. CEDA’s research outlines a reform agenda that will address these concerns, and sustain Australia’s international competitiveness and productivity into the future. That reform agenda embraces economic flexibility, incentivising innovation and developing the nation’s human capital. Economic flexibility The flexibility of Australia’s economy underpins the nation’s ability to respond to changing domestic and/or international circumstances. To improve its economic flexibility, Australia needs to initiate a series of microeconomic reforms to remove rigidities in the economy, address inefficiencies and uncompetitive elements of the tax system, reform the Federation, and adopt processes to deliver suitable levels of infrastructure. Incentivising innovation Along with a competitive environment that in itself provides incentives to become more productive, the capacity to innovate and to adopt innovations quickly is essential to raising productivity. Australia has tended to derive its comparative advantage from other sources in the past, so it will be a challenge for the nation to develop vibrant hubs of innovation. There is also evidence of a lack of management innovation in Australian small and medium enterprises (SMEs), relative to those in northern hemisphere advanced economies. Capability and workforce development A nation’s most valuable resource is its people – its human capital – and how well it performs in productivity and raising living standards depends critically on ensuring that their capabilities and agility are developed to their full potential, and that we have adaptive and consultative workplaces. While Australia has had relatively high levels of participation and employment in recent times, there are segments of the community where skill development and participation are poor. Related identifier: 0 85801 290

The economics of climate change

This report examines the economic impact of climate change for Australia, explores the responses of other nations and considers what policies will be most effective for Australia to mitigate and adapt to the effects of climate change. Executive summary The politics of climate change are highly contested in Australia at this point in time. In The Economics of Climate Change CEDA explores the economic issues of climate change examining the international context, how to minimise Australia’s exposure to climate change risks and how best to expend its natural resources. In the international context, the report examines both the emerging policy responses and their economic consequences for Australia. Adjusting to the impacts of climate change and mitigating its effects will be a task for both this and future generations. As a relatively small industrialised nation, Australia must be open and responsive to global developments in both the economic and the policy environment. Many of the implications of climate change can be ameliorated through effective policy responses, whereas poor public policy will exacerbate the challenges. These issues were explored in CEDA’s recent publications on population, A Greater Australia: Population, policies and governance; water, The Australian Water Project; and energy, Australia’s Energy Options. This policy perspective suggests that there is considerable scope to improve Australia’s policy response to climate change. CEDA has also extensively examined the policy settings surrounding climate change in the 2009 report Climate change: Getting it right, the 2010 report, A taxing debate: Climate policy beyond Copenhagen and the 2012 policy perspective A taxing debate: The forgotten issues of climate policy. The contributions to this policy perspective accept the science of climate change but acknowledges that there are uncertainties about its ramifications both at the global and, particularly, the local level. They also appreciate Australia’s inability to avert global climate change in isolation while appreciating the nation’s economic need to respond in conjunction with the rest of the world, particularly the developed world. It also appreciates that climate change is a source of economic and social challenge but also of opportunity. Related identifier: ISBN 0 85801 294

Setting public policy

Australia’s two-decade economic expansion has not been simply a function of chance or benefiting from the nation’s rich natural endowments. This historic growth period has occurred despite the Asian Financial Crisis; the Russian and Long Term Capital Management (LTCM) crises; the 2001 bursting of the technology bubble; the quintupling of oil prices; the global financial crisis and subsequent deep recession in advanced economies; and the ongoing European sovereign debt crisis. Success has been enabled by public policy settings that have encouraged flexibility, efficient resource allocation and innovation in the economy.   There is widespread belief among CEDA members that Australia’s recent policy making has not been at a best practice standard. Some reasons that have been given for the presumed decline in quality of public policy debate and execution are: A heightened emphasis within governments on opinion polls and responding to perceived popular opinion; Changes in the media landscape and its influence on public information; and Issues in the relationship between the public service and politicians. While these issues have not stopped important policy development, such as the Henry Tax Review or the white paper on Australia in the Asian Century, many of the reforms put forward have been considered too difficult or politically unpalatable for government to pursue. The major exception is the National Disability Insurance Scheme, now DisabilityCare Australia. However, despite wide community and bipartisan political support for the initiative, contentious issues associated with its ongoing funding have proven intractable. It is vital that Australia rediscovers its ability to clearly identify and implement challenging economic reforms.   As the stimulus from the mining boom fades, Australia’s prosperity will become increasingly subject to the pressures of the international marketplace. This will occur in an environment of heightened human and financial capital mobility and fast paced technological advances that can rapidly undermine sources of traditional comparative advantage. Whether recent economic success fades into memory or continues will be substantially determined by the quality of policy implemented by government.   Related identifier: ISBN 0 85801 289

Towards an Economy of Higher Education

This paper draws a distinction between ways thinking and acting, and hence of policy and practice in higher education, in terms of different kinds of economy: economies of exchange and economies of excess. Crucial features of economies of exchange are outlined and their presence in prevailing conceptions of teaching and learning is illustrated. These are contrasted with other possible forms of practice, which in turn bring to light the nature of an economy of excess. In more philosophical terms, and to expand on the picture, economies of excess are elaborated with reference, first, to the understanding of alterity in the work of Emmanuel Levinas and, second, to the idea of Dionysian intensity that is to be found in Nietzsche. In the light of critical comment on some current directions in policy and practice, the implications of these ways of thinking for the administrator, the teacher and the student in higher education are explored

Increase in computed tomography in Australia driven mainly by practice change: A decomposition analysis

Background: Publicly funded computed tomography (CT) procedure descriptions in Australia often specify the body site, rather than indication for use. This study aimed to evaluate the relative contribution of demographic versus non-demographic factors in driving the increase in CT services in Australia. Methods: A decomposition analysis was conducted to assess the proportion of additional CT attributable to changing population structure, CT use on a per capita basis (CPC, a proxy for change in practice) and/or cost of CT. Aggregated Medicare usage and billing data were obtained for selected years between 1993/4 and 2012/3. Results: The number of billed CT scans rose from 33 per annum per 1000 of population in 1993/94 (total 572,925) to 112 per 1000 by 2012/13 (total 2,540,546). The respective cost to Medicare rose from $145.7 million to$790.7 million. Change in CPC was the most important factor accounting for changes in CT services (88%) and cost (65%) over the study period. Conclusions: While this study cannot conclude if the increase is appropriate, it does represent a shift in how CT is used, relative to when many CT services were listed for public funding. This ‘scope shift’ poses questions as to need for and frequency of retrospective/ongoing review of publicly funded services, as medical advances and other demand- or supply-side factors change the way health services are used