John August, a Sydney radio host and Pirate Party of Australia official, returns to provide feedback on recent episodes about nuclear power, COVID policies, and government outsourcing and consulting. John discusses his generally positive view of nuclear energy with some qualifications and provides his thoughts on the analysis of COVID restrictions presented in a recent episode by Prof. Gigi Foster. John also weighs in on the challenges of government service delivery, noting potential upsides and downsides to outsourcing and cautioning against contractors dominating policy development.
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About this episode’s guest: John August
John August is the Treasurer of the Pirate Party Australia. John does computer support work in retail and shareholder communication. He is passionate about justice and ethics in our world, particularly as it plays out in law generally and intellectual property in particular. He has stood on behalf of the Pirate Party in the Federal seat of Bennelong and also as a Councillor for Ryde City Council.
Along with technology and law John is also interested in spoken word and poetry. He broadcasts on community radio and hosts the program “Roving Spotlight” on Tuesdays from noon-2pm on Radio Skid Row Marrickville Sydney, and writes about his ideas on the website www.johnaugust.com.au. You can keep up to date with what John is up to via his Facebook page.
What’s covered in EP220
- 00:04:08 – Discussion on Nuclear Energy
- 00:13:37 – Gigi Foster’s COVID Analysis
- 00:25:58 – Economic Impact of COVID Restrictions
- 00:35:57 – Outsourcing and Consulting in Government
- 00:44:20 – Final Thoughts and Wrap-up
Takeaways
- Nuclear power holds promise as an energy source, but challenges around risk management, technology development, and public perception still need to be addressed.
- In John’s view, there are reasonable arguments on both sides of the debate around COVID restrictions, with disagreement centring around difficult-to-determine counterfactual scenarios.
- Outsourcing can benefit the government, like additional capacity and fresh perspectives, but oversight is needed to avoid issues like mission creep or perverse incentives.
Links relevant to the conversation
Recent news about nuclear energy:
First new U.S. nuclear reactor since 2016 is now in operation
NuScale ends Utah project, in blow to US nuclear power ambitions | Reuters
John talking about nuclear energy on his radio show:
Pirate Party position statement on bureaucracy and rent-seeking:
https://pirateparty.org.au/wiki/Position_Statements/Government_Bureaucracy_Rent-Seeking
Video mentioned by John: “The consulting industry has infantilised government” – Mariana Mazzucato on taking back control
Review of Jobkeeper payment by Nigel Ray:
https://treasury.gov.au/consultation/c2023-407908
Previous Economics Explored episodes mentioned this episode:
Transcript: Nuclear Power, COVID Policies, & Outsourcing: Thoughts on recent episodes w/ John August – EP220
N.B. This is a lightly edited version of a transcript originally created using the AI application otter.ai. It may not be 100 percent accurate, but should be pretty close. If you’d like to quote from it, please check the quoted segment in the recording.
John August 00:03
Over time, the Public Service changed from this institution that was giving Frank and fearless advice to one that was basically mindlessly implementing government policy without challenge or question.
Gene Tunny 00:20
Welcome to the economics explored podcast, a frank and fearless exploration of important economic issues. I’m your host gene Tunny. I’m a professional economist and former Australian Treasury official. The aim of this show is to help you better understand the big economic issues affecting all our lives. We do this by considering the theory evidence and by hearing a wide range of views. I’m delighted that you can join me for this episode, please check out the show notes for relevant information. Now on to the show. Hello, it’s the last episode of 2023. And I thought I’d take the opportunity to share some feedback on recent episodes from listeners. I caught up with previous guests and regular listener John August recently for some of his reactions to some episodes. If you’ve listened to my previous conversations with John, you’ll know he’s a radio show host in Sydney. He’s a member of the Pirate Party of Australia. And he always has interesting things to say. So I’m glad I caught up with him for his reflections. We talked about nuclear power, about COVID policies about consulting and outsourcing. So these reflections of John were inspired by recent conversations that Tim and I had with David Hendry, and with GG Foster, and about a conversation I had with university students. I’ll put links to those episodes in the show notes so you can check them out if you haven’t listened to them yet. If you have any thoughts on what genre I have to say in this episode, or ideas about how I can improve the show in 2020 for them, please get in touch in find my contact details in the show notes. One really great bit of feedback I’ve had recently came from radio it was in a shale. He had some kind words to say about recent episodes with John Cochran and John danced. So thanks for that shale. One of the really good points he makes regards health insurance, so quoting shale, regarding health care and social security. Those are both sticky wickets because of the adverse selection problem. Any medical system whether entirely socialised entirely private or some mixture of the two suffers from the fact that people in their working prime have little incentive to contribute to pooled insurance or annuities, which benefit older strangers more than themselves. Privatisation risk spiralling costs socialisation risks long wait times and rationing of services. I think this is a really good point about the trade offs involved. And one I’ll have to explore in a future episode. So if you think this is a topic I should do early next year, then please let me know. Right. Okay, let’s get into it. I hope you enjoy my conversation with John August. John Agus, good to be catching up with you again. Yes.
John August 03:02
Good to be talking. Again, Jean, you’ve got a lot of interesting discussion on your podcast. And I’ve obviously stuck my order in and a lot of ways on a lot of topics along the way on my own show. But yes, good to be here again.
Gene Tunny 03:14
Excellent, John. So some of the issues I’d like to chat with you about based on the conversations we’ve been having in response to some of those podcast episodes, keen to chat with you about nuclear energy, you’ve got some views on nuclear, and also the episode that I did with Gigi Foster on COVID. And then consulting and outsourcing and possibly we might get on to crypto if, if we have time to start off with on nuclear energy? What’s your position on nuclear? So we’ve had a lot of discussion in Australia about possibly, you know, opening up or allowing these small nuclear reactors? Do you think that’s actually feasible? So one, there’s a question of feasibility. And two, there’s a question of desirability. What are your thoughts on that, John?
John August 04:07
Well, I think it’s desirable, it may not be feasible. But to try it as well, I’d say there’s a lot of ideas I have swirling around and I will get started on them. Like, one of my favourite ideas is to take our existing power stations and retrofit them with a nuclear boiler. And that, you know, people talk about just how long it takes to make a whole new nuclear reactor. And that is true, it is quite an amount of time. But you know, if we had that technology knocked that out, then you know, I guess retrofitting existing new power stations with nuclear actors would be a good thing. And then you also have your small modular nuclear reactors and one of the things you’ve got to say about those reactors as much as I am feeling so positive about their promises In a potential, the technology isn’t there yet. Now, my more contingent statement is, you know, let’s have a list of things once the technology does five or six things in will officially say it’s a goer, and then run with it. Now, one of the things that I sort of straddle the fence between nuclear and renewables. And if you go back, you know, 10 or 20 years ago, there all these people promoting renewable saying, you know, one day we’ll have good solar panels, one day, we’ll have this one day, we’ll have that. And if you look at the last 10 or 20 years, I think we have made considerable progress on those fronts. But the point is just like I was willing to give renewable power a bit of slack back then, in the same way, I’m willing to give nuclear power a bit of a Slack now and say, Look, some of these things aren’t quite nutted out at the moment, but maybe they will be in the future. And you know, that’s a reasonable position to say, let’s wait till these things are sort of working. But in broad terms, going back to nuclear power itself, you know, regardless where we’re talking about new technology or whatnot, there’s like, so many, so much criticism of nuclear power that I think is ill founded. And one of the things that people claim is that, oh, there’s no new nuclear power stations coming online. And I believe there’s one coming online just reasonably soon, or in the next six months or whatever, in the US. Admittedly, it’s been stalled for about 10 years, but it’s finally coming online. And, you know, one of the things is that, like, you’ve got, I think, nuclear reactors elsewhere in the world, I think India, some countries in, in and around Saudi Arabia, are building them. And, you know, you can wonder why are these other nations thinking that this is a reasonable thing to do? The cynical comment would be, you know, they don’t value human lives that much. Or you could just say, Look, they are a sovereign nation, which is making their own calculations and their own decisions, and they think it’s a reasonable thing to do. So in broad terms, I’m actually quite positive about nuclear power. Because even with Shinobu, in Fukushima, and so on, you grind through the numbers. And basically, conventional coal fired power stations built kill a lot more people on a per kilowatt hour basis than nuclear. Because your nuclear accidents, look, they are quite spectacular. Let’s not deny that. But there is some details underneath that, that with a coal fired power station, every bit of coal has to be mined in the mind and transported to the power station with nuclear power, that you have a certain amount of mining and each step down the track, it becomes more and more concentrated till it’s this lump of uranium, you’ve just got to get to the nuclear power station, you don’t need to do it very often. So there’s, there’s basically less fatalities overall. And also, this is one of the things that even though I’m an atheist, I suppose sometimes I tap into concepts like original sin, and so on. And look, with Shinobu, I think we can legitimately say, that was an artefact of the way they did things in the Soviet Union. And like, the reactor had its own faults Built in, the people running it weren’t properly trained. And they did some stupid things, and so on. So so that’s one thing you say there. And with Fukushima, there was a problem with the fault analysis of it. There’s something in engineering called failure mode and Criticality Analysis. And it’s my view that if they properly assessed the Fukushima reactor, they might have actually uncovered this floor in this design, the possibility that tsunamis would not get out, and basically take an action for that maybe elevated their backup reactors to the point where, you know, they were not in a basement that would get flooded, or whatever. But having said that, this is where I talk about original sin, because I don’t blame that nuclear technology. But I do wonder about our human ability to properly manage this risk. And maybe that’s an inherent problem, but the other side of it and who knows, maybe we’ll get into bureaucracy, later on. But I was speaking to a administrator of a nuclear reactor in the US. This was probably a good 10 or 20 years ago, and he was telling me a story that he felt he was being paid by this the signature not by the hour, because in a given day, he signed 500 different bits of paper. Right now, the point is, look, this is a dangerous technology, it needs to be regulated by the government in an appropriate way. Okay, so I think we have to acknowledge that but when they say nuclear power in the US is really expensive. You wonder if it really is expensive. If, or it’s expensive because of the excessive bureaucratic overheads that are piled on it. So, you know, that’s sort of one of the things that I think about. And the other thing is that people say, while nuclear power can actually be very cheap, once you get the reactor running, it’s such an investment to get going, that like the financial markets, you know, they struggle to deal with that. So you might say, you know, sometimes it is interesting that, you know, with, with some people who are critical of nuclear actors, how a lot of the time they’re critical of the market, and maybe that’s a legitimate thing. But then when it comes to nuclear power, they suddenly think that the insurance market is absolutely perfect, while at other times they think the market is totally dysfunctional. And so I sort of say, well, how do we deal with this risk? How do we insure it? And you know, if you look at the deeper picture that basically more people get killed in coal fired power stations, and I don’t know, it was 10 years or more, I think I was checking out an eclipse in China. And I checked out in the newspaper, and they said, you know, some sort of headline like, last year, we had an amazingly good year, only 40,000 people died in coal mines. Right. Right. So so they have a different way of looking at things. Obviously, we’re pretty good with power mines in Australia. But if you look at the global picture, you know, there, there’s more going on there. So what some of the stories that the idea that nuclear waste, is that obnoxious, I tend to think there’s a fundamental trade off here, either you have a lot of pollution in the atmosphere all around you, or it’s all located in one place, and you can point a finger at it. And I have to say, I am much more comfortable with it being located in one place where you can point a finger at it, then it sort of being everywhere. So I’m actually comfortable with nuclear waste. Okay.
Gene Tunny 11:57
And John, is that the Pirate Party position? Are you are you still with the Pirate Party and the I
John August 12:03
am still with the Pirate Party? And I suppose look, we mostly, let’s say there’s a diversity of views on within the Pirate Party. I think our main position, though, is we shouldn’t let we shouldn’t lift the ban on nuclear power, and let things unfold and progress and develop. And, you know, that’s, I think that would be a fair assessment of the position of the Pirate Party on nuclear power. You know, that we don’t put Well, the official position is not to particularly favour it, but let me know, let’s set up a situation where if it’s good, it can show itself to be good.
Gene Tunny 12:43
Yeah, yeah, I think that’s, that’s fair enough. Okay. We might move on to the COVID discussion I had with Gigi Foster. So you had some reactions to the conversation with Gigi, would you be able to take us through First, what were your reactions to Jay Jay’s thoughts on COVID? And the big? I mean, Gigi has analysed, you know, she’s run some numbers. And she’s concluded that, you know, the COVID restrictions, lock downs. In particular, school closures ended up costing young people so much more than any benefits they gained. And I mean, her conclusion is that from a societal perspective, it didn’t make sense, either. So could you take us through what your reactions to that episode? Were please, John?
John August 13:37
Oak? Okay. Well, the point is, I can think of lots of concerns I would have with her analysis. But let me also say at the same time, I haven’t actually sat down and cranked out the numbers. But still at a conceptual level, I could see so many problems with the way she had done her analysis. Now, let me first off say that, you know, I think it’s a healthy thing to do these styles of economic analysis. I think that Jodie Foster was, I guess, you know, basically people were having a personal galette are harassing her and, and I don’t condone that I’m very sympathetic to her in that situation. I think it’s very sad that that happened, because part of me says, I think she’s wrong, but she should be allowed to speak that wrong and we shouldn’t try to censor her. So, but at the same time, there was a certain amount of emotion in her argument where she was presuming that she was correct straying that she was engaging with people, and they were just talking past each other. And there was no, there was no accommodation, no engagement. But I also know that it did seem to me that on the one hand, she was claiming to be this objective economist that was just going through the numbers, but you could also see some definite, I guess, emotional leakage. In the argument that she made, but to try to sort of talk about, I guess the problems I saw with her analysis was where she wasn’t working through what I consider to be some illegitimate costs of COVID. And basically, looking at Rip, because there were the things that we saw in Italy, in the US of, you know, basically funeral homes being overwhelmed with hospitals being overwhelmed. And, you know, I will look, I’ll listen to a detailed argument, if you want to say that those pictures were misleading and not representing the underlying statistics. But, you know, I would be very surprised for me, you know, they let it rip in the US, and Italy, and things got quite bad. Another thing is to sort of say, look, Gigi was saying, oh, you know, the people were asking for, for lock downs, and clamp downs, and so on. And if you look at what was going on in the US was just so many people saying, on our COVID is not a problem, we’ll sort of just, yeah, people are talking nonsense. It’s just a little flu. And, you know, there are a number of tragic cases of people who just thought, Oh, this isn’t going to be a problem, and they caught it, they died, or they got very seriously ill. And then they suddenly thought, oh, cripes. COVID really is a thing. So I challenge that narrative in terms of what did actually happen in the US. But look, you know, I now have a doctor in Melbourne, who was saying, Look, guys, this is a respiratory disease fundamentally, and people are overreacting sort of worrying about surfaces and so on. And but, you know, he was actually saying, Look, you know, breathing on each other is an issue, but surfaces really isn’t an issue. And you know, there was sort of an overreaction there. And I do remember, I think I spoke to an epidemiologist on my own show. And he was willing to say, look, in the latest stages, maybe we should have lifted the lock down sooner than we did. But certainly, he was going to say, look at the early stages, lockdown was worthwhile. Now there was this whole story of flattening the curve, and the hospitals being overwhelmed. And you might remember that concern. And I think that was a legitimate concern. And you know, some of the stories about Sweden, you know, a lot more old people died than they expected, their health services were overwhelmed. You know, the story about rounds wound Sweden was not as rosy as is made out from the outside, though, certainly they took a different approach. And that’s worth paying attention to. But you know, the other thing is, as far as young people is concerned now, you know, sure, it’s good, that they’re educated, it’s good that they have a job. But in a sense, it’s also good that there’s an economy to provide services for us all. And if that economy is disrupted, then that’s a bad thing. And you can say, look, how much is it going to be disrupted when the health services are overwhelmed? You know, when there’s so many people having COVID, so many people going off work, they’re not off work, because it’s locked down. They’re off work, because they’re ill. You know, that is what I guess you call the counterfactual of a situation in Australia being somewhat like that in Italy, or the US. And you know, your GI, we’re talking about qualities. And I would still say that there is the whole thing of like, Sure, it’s, maybe some people just get COVID Very lightly. I remember I had, you know, two decent nights of fever. It was a bit strange, but no, I have actually had worse, I guess, infections or flus and COVID had had a different trajectory. But equally, I think I’d had two in two backs vaccinations at that stage, so maybe it could have been a lot worse if I hadn’t been vaccinated. But the point is, you can actually get long COVID. And if you have long COVID, that means you have a health impact, where you’re knocked around for for quite some time. And I remember a woman I know, she got COVID. And I think a month later, you know, she had, she was struggling to walk upstairs. You know, that’s how badly off it affected her. And I think there’s that sort of effect, ongoing effect on the hill. So you don’t just say, look, either you’re alive or you’re dead. And there’s no grey area in between, I think the grey area in between is quite significant. And once we had vaccinations, alright, you deal with it differently, but before you have vaccinations, then it is appropriate to say, let’s contain the outbreak. And I do remember there was a time I think before, before Delta That’s right. And you know, we Australia had been cleared of COVID and you know, I was sitting at the beach looking at the looking at the beach and thinking this is part of the shoreline of Australia and We’re here and we’re protected by ocean and were safe. And that was truly an uplifting feeling. And keep in mind politically in Western Australia, they had what you might call a pro COVID reaction, because we in the, in the eastern states, were looking at the US and Italy and shaking our heads, and Western Australia, they were looking at the eastern states of Australia and shaking the head and thinking, thank God, we’ve gotten away with COVID. And yes, they wanted their lock downs, and they got their lock downs. And then you know, that government was returned with an astounding majority, because partially because of its behaviour around COVID. So, so I guess that’s going off on quite a tangent. But the point is, you know, you’ve got to contrast against Western Australia to the to the eastern states and their experience of it. But what’s the other thing is sort of like, during the lockdown, some businesses would have reviewed their processes done all the maintenance that have been putting off. So, you know, you want to have a productivity boost when you came back. But the other thing that Judy also mentioned was, look, we got our put ourselves into debt. And I will actually have to say that some of that money may not being targeted, as well as it could have been, you can wonder, was that an honest mistake? Should they have known better? Okay, that’s a more complicated issue. But I’ll certainly say that. But you know, the Liberal Party finally figured out what it was like to be a government and you had to spend some money from the government coffers, I suppose. So then they finally finally got to find out what it felt like. But, but the thing is, in going into debt like that, you’re hopefully giving the economy a soft landing, it’s not crashing into a wall. Now, the problem is, Gigi might well say, Well, I avoided any sort of soft landing hard landing, you would have the consequences, you know, would have been like Sweden, that would not have been that bad. But I believe we manage COVID, we went into debt, we went into debt so that our economy didn’t hit a wall. And in fact, you know, some people were surprised at how the economy bounced back. After like the COVID Depression, the economy just came back. And, you know, one metaphor was that, you know, we had the embers that were still warm in the fire, and were able to come back, you know, we had all the cycle couriers keeping things going during lockdown. And so the economy was able to recover. But I guess what I’m trying to say is, look, my argument is yes, we went into debt, some of that money was ill spent, but broadly speaking, we got the benefits for going into debt. And, okay, and a few things that I will say about that I agree a teensy bit, or think about the possibilities with her argument. Look, okay, SARS, various other I think it was swine flu. Maybe some people were saying, Oh, this is gonna be bad. And it wasn’t as bad as it was. But keep in mind go back at 20 or even 30 years, the smart people were saying, the next pandemic epidemic was spread across the world, through the airline system. And that’s what they said, what happened? And that’s what happened. So, you know, I think so I engaged with both the fact that God legitimately says, Look, some people were overstating the story. And she’s talking about people voluntarily catching COVID To, to sort of give themselves immunity. And this is where I sort of have this engagement of like, you know, an honest volunteer response that makes a conscientious reaction to the situation, I would have thought engaging. Well, Judy says, maybe you get a whole bunch of young people who are willing to catch COVID, take them out to the country, put a campsite there, bring a few people with COVID, everyone gets COVID. And then once everyone has got COVID, and everyone’s got cured of it, then you bring them back into society. And you’re as it were isolating the group of people that do that. And I personally think we could have been a bit more flexible with COVID, where if you wanted to attend a funeral, or some event, you define, let’s say, 20 or 30 people ahead of time, and two weeks out from the event, you isolate yourself at home, and people just drop off eskies of food at your door. And then you all go to that event and then for two weeks after people drop off excuse of food at your door. So you’re still allowing people to attend funerals, but there’s also this this hybrid of sort of quarantining you more stringently than would have otherwise been the case. So notice, and I do engage a little bit with some of Judy’s ideas about we could have gotten immunity and deliberately caught COVID to help things along. So admittedly, okay, there’s my reply to what she said. I don’t know how structured that was, but yes, I thought I blurted it all out anyway. Yeah,
Gene Tunny 24:59
yeah. minutes no doubt that GGS GGS views are I suppose you’d say controversial. I mean, I think there’s a, it’s a good work she’s done. And I think it’s great that she has tried to put it in a framework where we might be able to come up with a rational answer to this. Although, you know, it is challenging because there are, as you said, the challenge is, understanding what that counterfactual is what would have happened. I think my idea
John August 25:29
of what we avoid now is very different to what Gigi, we avoided. I think that’s that’s a fundamental point of disagreement. And as I say, I’m just reacting as best I can. I let me be honest, and say, Look, I’m interested, I’m passionate, but I can’t afford to spend the sort of time on this that Gigi has. So you know, she’s, she’s got one up on me there.
Gene Tunny 25:52
Okay, we’ll take a short break here for a word from our sponsor.
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Gene Tunny 26:28
Now back to the show. So a couple other points, Mike. So you talked about, you know, all of the debt now. And we came roaring back. And I mean, partly that was because of all the additional money that people had in their bank accounts that was that was financed by all that borrowing. And so, yeah, we just had this extraordinary recovery. And then we had the inflation because of, you know, too much money chasing too few goods, so to speak. So look, I think, yeah, the stimulus was definitely over done. I think they we recognise that, in hindsight, having worked in Treasury, and having, you know, worked on a stimulus package, the one in 2000, and 809, I know that at the time you don’t have, you just don’t have a lot of time to be able to develop these things as rigorously or as well targeted as you might like. And I think they did the best in the circumstances. And yeah, and I was just thinking about job keeper. I mean, that was at a time when we thought the world economy was just, it was just collapsing, right. And I mean, there was so much pessimism in late March, and they just had to come up with something in a few days or a week or however long they had to design it and announced it. And it was as simple as that.
John August 27:51
I suppose the different layers are, do you want to say it was a mistake or not? And then do you want to say it was an honest mistake or not? You know, do you want to say really, they don’t want to say, well, they maybe they made a mistake, but Well, fair enough, you know, that that’s, I guess the range of ways you can relate to it.
Gene Tunny 28:12
I think they did the best they could in this in the circumstances. But you know, looking at it, you know, some of the design features. In hindsight, were pretty bad.
John August 28:22
I’ve actually spoken to someone in business. And he thought that the way that you would prove that either there was a loss related to COVID, or you would or wouldn’t shed shed staff or whatever, he thought it was very easy to put up your hand, even if you weren’t going to be affected by COVID. And he said that, and I won’t mention the guy’s name, obviously, look, he thought he put up his hand just like everybody else did. But you know, he was actually thinking about what hoops do I have to do to prove that COVID is affected my business and he even he felt you know, the the the the hoops yet to jump jumps through weren’t that stringent? You just put up your hand and I will give you some money sort of thing. That was that was his view of it? And I mean, admittedly, it’s good, good, good one two years since I had that discussion with him. But that was a story that he told me at the time and and then there is a whole thing of these businesses that claimed all this COVID help. And then, you know, however down the track, their their profit margins went up considerably. And you thought I thinking well, hang on, maybe you should pay some of that extra profit back to the government. Isn’t that the reasonable thing to do? And, you know, but that okay, but that’s perhaps going off on a bit of a tangent, I have to say,
Gene Tunny 29:32
yeah, there’s a, there was a good review of job keeper, which I’ll put in the show notes. I thought it was well done. And it did raise a lot of these issues and, you know, issues with the design of it, and okay, if we did it again, we’d probably do it differently. We’ve learned from this experience was done by Nigel Wray who was my old boss in Treasury. So I’ll put a link to that in the show notes.
John August 29:56
I suppose tomorrow. I think it’s the counterfactual. Oh, yes, we got into debt. Yes, we got inflation but the economy didn’t hit a brick wall. Now how valuable is it that their economy didn’t hit a brick wall? You know, that’s that’s to my way of thinking. That’s that, that those are the things you got to balance. Yeah.
Gene Tunny 30:15
Yeah, yeah. Yeah. I agree with you there. Okay. And the other. Oh, yes. The point about lock downs and the all of the restrictions. I think there is a consensus emerging that we probably did go too far isn’t there. I mean, maybe early on, there was a need for a reaction, but there was an independent review by Peter shergold and some other academics and public policy and public health experts, which I thought came to the conclusion that we were imposing them lockdowns when we shouldn’t have or interstate border restrictions. I think they came out against those. So we just went we went too far in our, in our restrictions. And I think that, you know, that possibly, you know, lends some support to what Judy’s been arguing. I mean, we probably we should have listened more.
John August 31:14
Talk to the Western Australians and see what they think about that. Not the Western Australians. Yeah, yeah. Yeah,
Gene Tunny 31:21
I mean, Queensland is too. I mean, we loved it in a while. I didn’t but other Queenslanders seem to love it. And, you know, Anastasia, Paula, che was reelected resoundingly. So yeah, look, people did did love it. But gee, gees argument is that it was, you know, her argument is that it was driven by fear. It was irrational. Now, I mean, that’s, that’s a difficult thing to figure out.
John August 31:44
All I can say is, I haven’t spoken to a bit if I had discussed it, whether I would like to think I would have had an objective and moderately dispassionate discussion whether or not been one of the people whose brains were totally blanked as well. I’m not, I’m not sure. Well, but that’s not the exact words, but the sort of sentiment that she was driving it.
Gene Tunny 32:06
Right. Okay. Well, I think it’s, uh, I mean, I think you make some, make some good points there, John, and ask them good questions. And I’ll, I’ll put a link in the show notes to the episode with Gigi, because I think it’s really worth listening to, I think Gigi is, you know, she’s thought a lot of thought a lot about these issues and done some really provocative, really thought provoking analysis that I think is definitely worthwhile. Okay, one thing I wanted to get back to John, I just remembered about nuclear. You mentioned there was one reactor being built in the states that you’re talking about this one, you’re not talking about this utar project idea that was abandoned because it was news last month, maybe? I don’t know if you saw it about new scale, new scale NS utar project in blow to US nuclear power ambitions. Was that the one you? You thought you were thinking of?
John August 32:56
So yeah, but that that story you have there is, is not to do with a regular nuclear reactor, that that sort of installed for 10 years, and finally came online just recently. And the reason why I was talking about that, who knows, maybe you want to actually link to my own show where I had this discussion, but there was someone involved in brains. And they were saying, look, there’s no nuclear reactors being built anywhere around. I did my research. And I found, you know, there, there were a few in the Arab nations, there was this one in the US that had just come online recently. And I guess I was pushing back saying, you know, maybe they may not be building that arrayed or not. But you know, I think, particularly South Korea is is cranking them out. You know, there’s basically a decent number of them being built around the world, which is contrary to what this gentleman was saying. And I do think you got to say, look, if now if the Indians are making their assessment of the South Koreans are making their assessment, the French are making the assessment. Do we want to say that they’re all stupid? And really, that’s sort of the thinking I was saying, and what the CSIRO have said that, you know, small modular nuclear reactors are not a mature technology, while and maybe they’re onto something there. That’s why I say I’m contingent. I say once you tick enough boxes, then we’ll say this is a goer.
Gene Tunny 34:16
Yeah, yeah. I think you’re right about one coming online recently. I’ve just found on the Energy Information Administration, that’s a federal government US agency. Newest reactive anti Commercial Services Unit three at the Elven W. votable. probably mispronounced that VAG TL E electric generating plant in Georgia.
John August 34:38
That sounds that sounds like it, look, I mean, it’s gonna take me you know, a good three to four, three to four minutes to check through my notes, so I could actually try to find out what these references are. Who knows I can even email them to you after the show.
Gene Tunny 34:55
Yeah, that’d be good. But that’s 31 July 2023. So that sounds like The one you were you were thinking of?
John August 35:01
Yeah. And this was sort of like some International Nuclear Energy Agency, which had, you know, we’ll have all the ones in the US and South Korea, and here and here and here and here and all across the world. And as I say, it’s not a bucket load, but there’s a moderate, moderate number of new nuclear reactors coming online of the conventional variety, not the Small Modular variety. Okay. That yeah, okay. I’ll track that down and send you the notes of that. And obviously, I think you may have listened to some of the show where I had that discussion. So very
Gene Tunny 35:33
good. Okay. Well, that’s so chat about nuclear and COVID. Finally, good. Just so we keep this to a manageable length, we might just cover the outsourcing and consulting issue. So you, you listen to that conversation I had with the university students, the UQ PP. E. S. Society, that that’s correct. Yes. Yes. Yeah. And you had some thoughts on, you know, the use of consulting and outsourcing that’s been quite controversial in in Australia, recently. And now there’s some, you know, I guess, worldwide. There’s the LSE, economist. whose name I won’t try and pronounce it was Mariana
John August 36:18
Mazur. carto. Right. But, yeah, she’s been talking about the experience with outsourcing. But this happened in the UK Government. And there was one time where she mentioned some stuff happening in Australia. And, you know, basically, they’ve had a similar experience over there. And she’s got some perspectives there. But, but, okay, look, I will actually rip in and sort of say that, you know, part of me part of the Pirate Party, we do actually say, look, it’s very easy for there to be excessive bureaucracy. And we do have a more general feeling that there are too many people calculating numbers, but you know, statistics or universities or schools or whatever, and too few people actually doing stuff. So that’s the broad brush thing will actually say about bureaucracy. And also, I think in Queensland, it was Dr. Patel, if you remember him, and our cynical remark was look at how much the Queensland Health bureaucracy Brut grew over the time leading up to Dr. Patel. And it seemed to be mostly concerned with trying to stop the minister from getting embarrassed rather than actually doing good. And you would think if that grind bureaucracy realised its promise, it would have been able to figure out there was an issue with Dr. Patel, as it were, as a result of the regular workings of its own processes. And it was actually as I understand it, some courageous nurses who stood up and said, Hey, there’s a problem here. It wasn’t the regular workings of the bureaucracy. So you know, whether it be me or the Pirate Party, we certainly have a lot of criticisms to make bureaucracy, you know, but we will also say that sometimes the government has got it correct. We do actually think that the CAS did a good job. And it’s been replaced with numerous private providers with twisted incentives, and the whole thing’s quite a mess. But let so so there are those things there. But I guess there’s a whole lot of other things that add to the mix that basically Mariana Meza, Carter has actually said, look, we’ve infantilize the public service to the point where the public service isn’t actually smart enough to properly scrutinise the contracts that they are feeding into the private private service. Because let’s just say, Look, if you’re in a government department, you’ve got some report that needs to be done in three months time, you’ve got a bit of a squeeze on your resources, let’s get this outside firm just to square this on you. That’s probably a very reasonable thing to do. But what he’s saying is that, you know, the private companies, the contractors have taken over, like the comprehensive policy development thing, and sort of taking the lead. And she’s sort of like saying, look, so often, why do we think that the contractors or the will actually have expertise? Now if we want to know what’s going on with health, we ask that the you know, the health bureaucrats if we want to know what’s going on with science, we asked to CSIRO and Marianas political story was looked, you know, the government could have got the CSIRO to make an assessment of climate risks, but they actually got a private contractor to do that. And her suspicion is that they wanted a political answer rather than the objective scientific one that the CSIRO would have would have given. So, so there’s a lot of sort of abuse of that. And to some degree, there’s this like laziness. have sort of like starting to push more and more of your policy development notes, as I say, Sure, a contractor to fix a particular issue, you know, perhaps reasonable, but to take the lead on policy development, and to also think that these these contractors will have good expertise in health in science, like to my way of thinking if you’ve got an issue, you talk to the CSIRO, some academics in a university or an engineering firm or something like that, you know, that’s that if you need to reach outside of government, you know, that’s what you do. Now, one of the things that contracting firm might just have, they might have the outsider’s perspective. And maybe that’s a useful thing to bring in. But you shouldn’t let the outsider’s perspective, you know, stop the insiders, from actually figuring out what’s going on as well. You know, okay, a fresh out pints perspective, maybe that’s the one legitimate justification you might have. But the idea that this ad hoc bunch of consultants would know their science better than the CSIRO seems a bit strange to me. But what’s some other things going on with bureaucracy? I know that if you go to that, I think it’s the cyber the programme, you actually have Malcolm Crompton, who was once a Privacy Commissioner. And he’s actually talking about how I think evil was Whitlam was starting to sort of change the way department heads were hired and fired and allocated. And that this was to try to give the public service more flexibility. But is also saying that over time, the Public Service changed from this institution that was giving Frank and fearless advice to one that was basically mindlessly implementing government policy without challenge or question. And he does say that the right sort of started with Gough Whitlam. But you know, to actually try to be politically neutral. You know, it was John Howard that took it even further. And the original sentiment was good, let’s give people flexibility to prove themselves to demonstrate themselves that free up the public service. But you know, John Howard started to take it away from, you know, the tradition of Frank and fearless advice to, to mindlessly implementing government policy without challenge or question. And you could say that it ended up in the whole Robo debt fiasco. So notice my, my more complicated thing, where I have actually acknowledged that you can have too much bureaucracy going in the very wrong direction. And I’ve sort of introduced that at the start of my talk. But I’ve also said, Look at what’s happened, and I suppose this controversy with those contracting bodies, and just how they’ve basically, you know, basically, you know, had confidential information from government that they have abused and then sold to other corporate clients. And that’s been a betrayal of trust. And yet, you know, on paper, these firms will say, you know, oh, there’s a wall between these different sections of the firm, and that wouldn’t happen. And, you know, well look at you, well, we I can see you’re sort of smiling or shaking your head. But let’s just say, Look, I’m here, I don’t want to mention any names, but it’s amazing how tangled and convoluted any firm can get over time. And, you know, there’s just so many things that are boiling over and you’re, you’re you’re putting out fires all over the place. It’s, it’s amazing how chaotic things can end up. And this is an affirm that I won’t mention names, but it was a good firm, it made a damn good quality product, but by golly, under under the surface, just how, just how, yeah, you’re putting out fires all the time. And I can imagine a similar thing happening in the public service. So or are these private organisations were on paper, you know, you’ve got these rigorous processes and procedures that everyone follows to the letter and you’re sort of going oh, yeah, right. But anyway, so that’s me blabbing about those sorts of things. So that’s my hybrid thing, and unlike the Pirate Party does have their position about bureaucracy and rent seeking. And we do recognise that as a real and substantial problem that by golly, there’s a lot of problems to think about, if you want to think about them.
Gene Tunny 44:20
Yeah. You know, obviously, I’m, it’s a challenging issue for me, because I’m someone who has done some contracting for government and I have, but it’s more along the lines of, you know, occasionally coming in helping out on a report or doing an independent analysis of a specific issue. Now, yeah, there are challenges with this infantilization of the public servants. That’s an interesting way of putting it and I do wonder myself about whether the capacity of the public service has been reduced because of so much outsourcing I think that is a legitimate concern, something that that’s worth thinking about. And you just see it with NDIS. At the moment, like we’ve contracting out so much of that. I mean, that’s just a big, you know, this huge social welfare programme, the National Disability Insurance Scheme in Australia, and there’s, you know, big reliance on delivery by the private sector, and yet it’s overseen by this National Disability Insurance Agency. And it’s not clear to me whether the we’ve got those I mean, I guess we don’t know the rules, right. There’s all of the there are all these inquiries into NDIS. And we’re trying to tighten it up. So it just doesn’t become this huge, cost blowout. But it looks like there’s a lot of women, there’s problems with definition, who’s in and who’s out. But there’s also problems with just blight and rotting by both of these in firms that are NDIS providers. And the government just says, the regulatory agency just seems to lack the capability to to stop this.
John August 46:01
Well, that that is a strange thing. That note, notice earlier on in my narrative, I was saying, Oh, look at these bloated bureaucracies that, that don’t actually deliver on their promise. But at the same time, it’s a strange sort of thing that I will also say, it does feel like a lot of guff government, regulatory agencies just are not sufficiently resourced to do their job properly. And, you know, you end up in this this strange sort of thing where, you know, there’s a mistake made, you get some sort of inquiry, and they point out all these things, and the inquiry probably says, Oh, look, they could do with some more money, and then they don’t end up getting more money. So notice, I’m saying that in some cases, the bureaucracy seems to get bloated. And at some stage, other cases where you really do need some resources, it stopped. So yeah, it gets hard. You know, I
Gene Tunny 46:51
guess if you’re handing out $50 billion a year in, in contracts, or, you know, in funding, which the NDIS is, I don’t know if that’s the right amount, but it’s, you know, it’s 10s of billions of dollars, then you need some you need enough oversight to make sure that that’s not been recorded, and I’m not sure we’ve got that right at the moment. Well, I would
John August 47:11
broadly say I suppose. Yeah. Dealing with these these contracts is not easy. Yeah. That’s that’s, that’s, that’s the generalisation. I’ll make and
Gene Tunny 47:22
a couple other things. You mentioned Patel. So this was Jaden or Patel. I think Jaden Patel, he was a doctor at Bundaberg hospital. And it turns out he wasn’t very competent, and all of these patients died. Really just terrible situation. And I’m trying to remember the circumstances now. Partly is because I mean, there was a shortage of doctors. I mean, we so we were letting I think he was a he was an immigrant, if I remember, and so that I think there’s some question about his exact qualifications, and whether they were actually legitimate or not, or whether they were comparable with with qualifications here. And yeah, part of the problem, I guess, was just poor, administration, poor oversight by Queensland Health. And also we we just weren’t training enough people in, in medicine here in Australia, we just weren’t training enough doctors?
John August 48:22
Well, who knows? Maybe we’ll see common cause here. I mean, admittedly, look, they are obviously we’re trying to be flexible in letting this particular doctor in but I do have the feeling that, you know, our, you know, our medical profession are really don’t want to have sort of people coming in from overseas because it dilutes the amount that they’re able to sort of secure for their services. So having said that, it does get very complicated, where, you know, my my own position, I think it’s reflected in the Pirate Party is like, if we are importing skilled people from nations that are less well off than we are, we should really be making a virtual subtraction of those training costs to our foreign aid budget. And, you know, there is the whole thing of you know, do we want skilled people coming in now, how they’re going to contribute to the economy and so on. And, you know, and sort of like leaning on all those students coming into Australia as a source of foreign revenue, and, you know, oh, my gosh, should get get get sort of complicated. And then people say, Oh, yes, yes, we want to have skilled immigration, I’m thinking, well, if we’ve got skilled people coming in from nations less well than ourselves, aren’t we abusing those nations, you know, and, you know, that’s where the whole thing gets complicated. But let’s say if we quarantine that issue, I think it’s it’s fair to say that doctors in Australia are are protective of their monopoly,
Gene Tunny 49:51
I guess you would say, Yeah, I think that’s that’s correct. Yeah. So that is a that is a an issue. And you know, there’s a there’s a supply side restrict Near and dear. That’s partly the reason yeah, we’re not. We aren’t training enough doctors, arguably and so in because Queensland had a real big growth spurt in the 90s, lots of more, lots more people. Lots of people coming here, big growth in population and therefore, more demands on the health system. And so we maybe our standards did drop in. And it was, it’s quite scandalous. I was just looking at the details. And it turns out there were complaints about that doctor, so giant Patel, in other places who work before Queensland, so in in Buffalo in New York, and hang on, it looks like there was some issues in Portland, Oregon. And so these are things that, arguably our Well, I’d say they should have picked this up, they should have done their, their due diligence. So yeah, that was a that was a huge scandal. That one. The other thing I thought I mentioned is you talked about the CIA is now I mean, we have another CIA, I mean, that brought me, you know, took me back to the 90s. I think they abolished that 96. Didn’t know and how it got and that was a Commonwealth employment service. And yes, yeah, look, I mean, I, I wasn’t sure about how effective the CES was. But I do take your point. I mean, what we’ve replaced it with, there have been all sorts of problems with with that, and concerns about the level of service being provided by many of these. Well,
John August 51:28
one anecdote from an okay, unfortunately, it’s going to be hard for me to map this out and flesh out the details. But, you know, he was telling me a story of, you know, he saw 30 people in a day and place 15 of them in a job. And you go to one of these private agencies, you got to place an appointment, like three days in advance and your front up, and they might well see three or four people that morning, you know, and there’s sort of saying that there’s such a contrast between the effectiveness of the CS versus and, and, you know, I guess you perverse incentives, that there, there are stories of basically people being dragged along to buy become long term unemployed, and then then the agency is finally taken seriously, because there’s extra incentives replacing long term unemployed as compared to short term unemployed, but the CIS had no such distinction, you know,
Gene Tunny 52:18
you get those details of the specifics of the contracts. Right. So you got the incentives, right, or you can have all sorts of problems. So, yeah, yes. So definitely, there’s, there’s issues with outsourcing. I mean, I’m, I think, you know, we shouldn’t be doing looking for efficiencies, and in many cases, it makes sense to outsource but then in other cases, it doesn’t particularly well. And when you do outsource, you got to be extremely careful about how you do it, then you got to make oversee those contracts and make sure that there isn’t any rotting.
John August 52:54
And I’m very pleased and more by accident than design, but I didn’t bite the hand that sees me notice. I was saying that the worth in you know, hiring a contractor to fill in this particular report or this particular issue, but that’s quite different to basically taking over policy development. holdest Bowlus? Yes,
Gene Tunny 53:12
yes. Well, I guess what the some of the big four firms and also BCG, Boston Consulting and McKinsey seem to do very well is really get they get really into the government and or they get their people embedded in some of these agencies to and they’re very closely associated with the policy development and then delivery of of policy, I
John August 53:35
can only suggest let’s listen to some of the videos by Mariana. Cassie, when she sort of goes into that. Yes.
Gene Tunny 53:42
Yeah, I’ll I’ll definitely definitely have a listen. Okay. John Agus, this has been great. Thanks for all your your feedback on and thoughts on those recent episodes we covered? Is there anything else before we wrap up? Oh,
John August 53:58
my gosh. Okay, well, let’s say just say that there’s so many things that I can talk about. There’s a few different guys that you had you had a guy talking about, you know, productivity being a crisis, but he did say some interesting things about intellectual property or junk. I found that that quite Yeah, I found it found, found some of the stuff he was saying quite interesting. And I think you had a guy talking about valuation of businesses. And he was saying, you know, let’s sort of give banks equity in the property for when it gets sold rather than just, you know, to turfing, the turfing, the people who were paying the interest out, but I know you also had someone talking about crypto and some of the I don’t know the details of that show. Let’s say I’ve listened to quite a few shows but maybe not that one. But I would you know, I’m still saying before that the problem with crypto is a whole lot of amateurs are in the field. You can sort of say Oh, I’m in crypto and then you’re on some exchange and my my glib state would be, unless you have some sort of code on your phone that you can write down and transfer to another another phone that is actually engaging with a crypto network beggar theory, or Bitcoin or whatever. If you’re just plugging into an exchange and you’re playing with Lego blocks, you’re not actually doing crypto. Yeah, that that’s my and you know, it is the old cliche that you know, you should only invest in what you’re familiar with. But all the who worry about crypto is to try to get people who know nothing about crypto to be involved in crypto. I think that’s sort of a bit of an issue there. And what am I also thinking about crypto, gosh, that thought is slipping through my fingers? Oh, yes, the thing about crypto is at the moment. The discussion space, if you like, is dominated by snake oil merge. Now, that’s not to say there are some general genuine crypto people out there, you know, hidden behind all the all the all the all the noise, who genuinely want an alternative system of currency because they have problems with the way the central banks and the regular banks relate to our mainstream system of currency. And they are genuinely interested in an alternative. And there may well be people there who are the true believers. But the scene if you like the scene, sad to say, is dominated by the snake oil merchants. And until somehow the genuine players can achieve greater prominence and it not being just all this hooey. You know that the sad thing is that crypto has it has betrayed its promise. It’s gone down this path with all with with the conceptual space, the thoughts face, whatever want to call it being dominated by the snake oil merchants and the true believers being suppressed. You know that the way I’ve described the scene, and in a sense, it said, because I’ve heard the crypto advocates, I’ve heard the passion with which they talk about wanting to go down this alternative path. And while I’m not into crypto, it’s said that their passion hasn’t been realised, you know? Yeah, yeah, fair point.
Gene Tunny 57:25
I agree with you about, yeah, the snake oil, snake oil cycle merchants, I
John August 57:32
suppose. Or if you want to say as I call it, if you want to, say snake oil salesmen, yes, but there’s the old pump and dump thing about talking about some particular crypto. And, you know, basically, some, some prominent people might basically buy a little crypto, and then one week later, they go off and buy it back. Because they managed to suppress the value. You know, those sorts of games, you know, so that that’s getting a bit sad. And Sad to say, look, I’ve listened to a few other episodes. There’s so many thoughts that I have, but it’s hard for me to bring them bring them to mind at the moment. I have to say.
Gene Tunny 58:07
That’s, that’s fine, John. We’ve we’ve covered some, some important issues. So yeah, Happy. Happy to finish up there. So again, thanks for thanks for listening through the and thanks for all the great conversations. Yep. And yeah, I really, really enjoy hearing your thoughts and having having those chats so
John August 58:29
well. I do appreciate it. I know you had some some sort of sentiment that you didn’t want to interview people too often but I hope this is not too often. I know you’re you’re recycling guests to some degree anyway. So
Gene Tunny 58:40
Oh, yes. No happy this. Definitely not too often. I think we we caught up in June, didn’t we? That was when you visited Brisbane.
John August 58:48
Yeah. I think that was that was passing through Brisbane and, and yes, that was lovely. And I guess you had the dare I say you’ve obviously had better sound equipment there. But nevermind. It’s still good to have a chat regardless. Yeah, absolutely.
Gene Tunny 58:59
Okay, John, Olga’s thanks for your time.
John August 59:02
No worries. I’ll leave you to it
Gene Tunny 59:05
rato thanks for listening to this episode of economics explored. If you have any questions, comments or suggestions, please get in touch. I’d love to hear from you. You can send me an email via contact at economics explore.com Or a voicemail via SpeakPipe. You can find the link in the show notes. If you’ve enjoyed the show, I’d be grateful if you could tell anyone you think would be interested about it. Word of mouth is one of the main ways that people learn about the show. Finally, if you’re podcasting outlets you then please write a review and leave a rating. Thanks for listening. I hope you can join me again next week.
59:52
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Credits
Thanks to Obsidian Productions for mixing the episode and to the show’s sponsor, Gene’s consultancy business www.adepteconomics.com.au. Full transcripts are available a few days after the episode is first published at www.economicsexplored.com. Economics Explored is available via Apple Podcasts, Google Podcast, and other podcasting platforms.
