It is an axiom, enforced by all the experience of the ages, that they who rule industrially will rule politically.

Aneurin Bevan, ladies and gentlemen. Welshman, politician (secretary of state), author, and architect of the National Health Service. It is he, to my mind, that we have to thank for Social Welfarism all over (and, in particular, Australia).

The changes face(s) of which – the NHS – becomes the subject herein.

Number 1: the British United Provident Association has decided to split its health division from its insurance division. The Health division consists of some 25 provider sites, worth GBP1.44bn to a concern called Cinven (who comes up with these?). BUPA sites provide non-emergency care, and do so at a time when the NHS is sending ever more patients out of the NHS for treatment.

So BUPA sees more private care of NHS patients, and wants out. Cinven see a bigger buy-in:

Cinven, which like BUPA is based in London, two years ago paid £552 million for Partnerships in Care, which provided services to patients with mental health illnesses. Cinven has also owned General Healthcare, which it developed into the biggest private hospital provider in Britain, according to the statement, and a stake in Générale de Santé of France, now the largest private clinic operator in Europe.

This is becoming not unlike Australia’s Medicare: our universal health insurance is just that – a finance mechanism, not a provision mechanism. Australia actually has quite a robust private hospital sector. This is a reason why the likes of waiting times don’t matter so much there. Medicare makes very well-managed use of the ’safety-valve’ of private treatment, just as the NHS, which is actually a universal provider, not payer, is now seeking to do. All of which is going to make the UK’s system rather murky indeed.

I wonder how Blair’s investments in the NHS will come be judged, if this trend continues.

Number 2: Related to the NHS, and how it functions (or disfunctions, pending the disposition of one’s interlocuter). David Cameron’s long-awaited blueprint for NHS reform will be set out tomorrow in a Tory white paper that seeks to abolish government targets for reducing waiting times, the Guardian can reveal.

I will never ever become tired of British media’s knack for reporting tomorrow’s news today, literally. I love it. The Tories plan involves:

• GPs’ salaries to be linked to the success of the treatment they deliver and the extent to which patients are satisfied with the experience
• abolition of all central targets, including the government’s current commitment to reduce waiting times to 18 weeks by the end of next year
• control of the vast majority of NHS budget to be passed to GPs, who would use the money to commission services for their patients
• patients with long-term conditions to get “individual budgets” to buy services such as therapy and home visits
• NHS and private hospitals to be allowed to compete on price, offering discounts to encourage GP commissioners to send more patients
• all hospitals and community services to be encouraged to become self-governing foundation trusts, with freedom to borrow for investment on the open capital markets

That one about GP funding ought to go down well. Roy Carr-Hill may appreciate being let off for a while, at least (not true. Knowing Roy, he probably had been rather enjoying it). Mind you, that move of budgeting discretion from Trusts to GPs will be popular. The idea that outcomes will determing GP payments, where outcomes at least in some part come from patient-driven feedback mechanisms, will be a worry. Individuals can’t be relied upon for information about their own health, so why we should trust them to judge their care to such an extent is worth questioning.

The other noteworthy element is the introduction of price-competition, for both Trust and private hospitals, and the abolition of central targets (see the previous about waiting times). This might at least take some time and energy away from meeting numbers requirements – whether it goes into better health outcomes will (hypothetically – Cameron still has to win the election) remain to be seen.

Brown’s own ‘people’ had mooted the idea of NHS independence (managed by an independent board) – much like independence of the Treasury. There’s something very appealing in that idea, as though health outcomes can exist independently of parliamentary policy, like inflation and interest rates. I don’t know how feasible that is, but it is such a nice idea. There’s a cleanliness about it (which I clearly can’t describe at all well).

Nothing, at least yet, on what the Tories would actually spend on the NHS, which is a gap that they will need to fill (Americans, the Brits have content-driven, and policy-driven, elections like you wouldn’t believe. You have no idea how robbed your democracy is by your own Fourth Estate).

10 million refugees

Another very graph-y kind of post.

The UNHCR today released their report Global Trends, 2006.

At the end of 2005, the global figure of persons of concern stood at 21 million. By the close of 2006, Refugees 32.9 million, or an increase of 56 per cent was the IDPs protected/assisted figure. The single largest increase has occurred among the internally displaced persons. The global refugee population itself has however also increased, for the first time since 2002. The 2006 figures for stateless persons also show a marked increase compared to the statistics for 2005.

As the news is reporting, the global refugee population is very near 10 million people (the ‘people’, no doubt, needs stressing). That’s nigh on half of Australia’s population, by the by. But it’s not even the big number.

The big movers are of course Iraq and Somalia:

According to the UNHCR report, the increase in the number of refugees is largely due to the situation in Iraq, which by the end of last year had forced up to 1.5 million Iraqis to seek refuge in other countries, particularly Syria and Jordan.

In 2006, the main group of refugees under UNHCR’s mandate continued to be Afghans (2.1 million), followed by Iraqis (1.5 million), Sudanese (686,000), Somalis (460,000), and refugees from the Democratic Republic of the Congo and Burundi (about 400,000 each).

This, by the way, does not include Palestinians:

The refugee total omits the 4.3 million Palestinians in Jordan, Lebanon, Syria, the West Bank and Gaza, who are under the auspices of a separate agency — the United Nations Relief and Works Agency, or UNRWA.

If added together, the total number of refugees under both agencies is more than 14 million.

Who’s creating them (I mean, besides us)? From the UNCHR’s report,

The total also excludes some 24.5 million people who have had to flee conflict, but remain within their countries and thus are labeled “displaced” rather than refugees under international law. The UNHCR protects or assists around 13 million of these – one of the reasons for the big increase in people under the wings of the UNHCR.

These numbers also exclude around 5.8 million ’stateless’ people. The total number estimated in the report (non-definitively) is 15 million.

The number of resettlements is also steadily declining:

The full report, as I said, is here. I highly recommend the Tables – every one, from 1 through 20, a who’s who of Who Shames Us. Here are the biggest host countries for refugees (a grateful salute to the UK and Germany – although while they are helped out in primary school in the UK, Universities not so much – but that’s a different discussion).

Those are some numbers, no? Bloody hell. What blows my mind is the reporting about the 10 million – the numbers excluded from the numbers are running bigger than 10 million. The number of variously-defined non-refugees about whom the UNHCR is ‘concerned’ is greater than 10 million. I guess we just like round number?

I wonder what Condi Rice thinks of those birth pangs, these days. When she’s not too busy trying to prevent Cheney’s thugs from bombing Iran.

All they taught you at school/Was how to be a good worker/The system has failed you, don’t fail yourself

My wife’s telephone conversation this morning reminded me to discuss student loans and student debt. Specifically, she was calling up whoever has purchased her student loan most recently to explain that, although she just was awarded an MPhil, she is in fact a full-time registered PhD student, and hasn’t actually graduated. So we’d rather like not to have to start paying them back.

I had the good fortune of scholarships to cover my MPhil and PhD, and got my undergraduate degree under
Australia’s  Higher Education Contribution Scheme. After which I went to Canberra for my MPhil, then to England for my PhD. In other words, I’ve never paid it back. And until I return to Australia, work and earn an Australian-taxable income, I will not have to.

Internationally, how do student debts shape up? My 4 years at Sydney University came to around AUD20,000. Four years here would come to a hell of a lot more. Including accommodation, my University now charges something near USD40,000 per year. I’m not saying they aren’t worth it, but if I ever discovered my wife was pregnant we’d be on the first flight back to Medicare and public Higher Education, the open arms of Gough Whitlam (to whom history dictates we give credit for such things). In fact, not only do Australians have the cost side pretty easy, but the repayment side is University-friendly as well:

There are some neat differences there. Australia, for example, has a higher income threshold, compared to New Zealand, but New Zealand uses a kinder calculation of the amount to be repaid. Other countries use mortgage methods (a proportion of the debt, rather than a proportion of the income – this is a reason why we worry less about our debt than our UK or Us counterparts).

From the same report (it’s Canadian, from 2005), estimated/average salaries for graduates:

So Sweden is actually the worst – average salaries for recent graduates are only 1.26 x graduating debt, followed by the US at 1.77 x graduating debt. Germany is the best at 7.35 x graduating debt. Other differences can affect this, though, including amortisation periods, subsidised interest repayments, etc. (the appendix of Usher’s report contains detailed information).

This only includes undergraduates, of course – if you’re taking out student loans for higher education or overseas education (or both), particularly in the US, you are going to have a level of debt awfully greater than USD19,300.

This comparison doesn’t gel too well with the news, particularly in the UK, of late, that student debt is crippling, young people are avoiding university, etc. We hear in the UK similar arguments to those heard in Australia when I was there, concerning the hypocrisy of government ministers, who went through with grants and free education, lumping fees on us. It ignores the realities of the costs of education, and the number of people receiving it, both of which statistics are increasing.

This report also preceded UK fee increases. The latest graduating debt averages for UK graduates are nearer to GBP13,200 – a combination of fees, no grants, higher costs of living and student bloody credit cards. Allowing still for no change in starting salaries, the ratio for the UK would be 1.67. That’s still worth it (again, bearing in mind inter-national differences in how repayment/servicing is calculated).

The key for higher education, like any other investment, is cost-effectiveness. There’s a fair amount of variation: non-graduates will/should have uniformly lower incomes, on average, but university graduates can leave school with valuable qualifications or …not so valuable qualifications (you can read Economics or Law for 4 years or, say, Poetry – there will be variation in your employability and income).

One of my master’s students this semester actually looked at this for our cost-benefit analysis class (he found, for example, that Lehigh’s tuition is almost 6.5 x the national average for 4-year degrees at public colleges – impressive). For degrees computing, economics, finance, international relations, psychology, and so forth (so, not liberal or social studies), lifetime earning were, at their lowest, at a Net Present Value of nearly USD1m up to USD1.9m. The higher estimates were USD1.7m up to USD2.4m. It comes out ahead of the tuition costs, making university a positive investment.

Incrementally, the same is – or should be – true for graduates elsewhere: the difference in lifetime earnings between graduates and non-graduates is greater than the costs of a university degree, at present values (at least for undergraduates. Again, higher degrees may or may not have such a great payoff, especially if it means you stay in academia). You will absolutely pay a premium for the degree, but you will on average earn far and away more. Moreover, your incomes are far more likely to keep up with inflation, meaning the payoff stays with you. It’s the same in the UK, although the gain is less – inline with much lower levels of income inequality. It’s the same in Australia. It’s the same all over. Private rates of return on university educations are easily high enough to make borrowing for one worthwhile.

If you take a degree in something or other, then move to London or New York, trying to find work in politics, fashion, writing for newspaper or something, then you will not follow this basic comparison, and servicing your debt will probably be a real hassle – particularly for Americans, where the threshold for repayment is so low. It’s hard to say what that means. If you are nevertheless pursuing something you would only attain with a university degree, then that goes into your own willingness-to-pay for the opportunity (that sounded unsympathetic – I’m not. But these are the economics of higher education).

Selling Australia’s productivity (growth)

Students of Economics and Econometrics! This is not how you use graphs. Graphs require Titles and Captions.

Kevin Rudd is in trouble! Caught red-handed with a (leaked) Labor policy briefing discussing how Labour would spin the productivity numbers to make Howard look bad. I can see the headlines:

Labor Plays Game!

Crazy. The briefing recommended using figures from the May budget instead of recent national accounts figures, the result being less-to-no growth in productivity. Specifically, it discusses the less-than-historical-norms rates of productivity growth – a key ingredient in long-run economic growth, and one of the things for which we require governments (instead of politicians).

That Labour are trying to turn the numbers to their advantage at election time is hardly surprising. The policy briefing, moreover, is a good deal more in-depth than the few paragraphs and Prime-Ministerial sound-bytes are making it out to be. In any event, I don’t think this is a great political move, as it stands. Productivity (as Labor’s leaked document states) isn’t much for a short-run numbers game, because the short-run numbers don’t mean anything. Using growth or other figures for a couple of quarters is also not particularly informative. If productivity slow-downs are structural, then they’re problematic, and certainly cause for political threshing. Productivity, however, isn’t something that grows smoothly, but rather in fits and starts.

Here is what I’d like to see the media throw up on our TV screens (cue that cool day-dream/flashback thing they had in Wayne’s World).

In terms of productivity, we are on what is called the ‘flat of the curve’. My undergraduate textbook uses the following example for the per-worker production function:

We use this to talk about the important of technological change in long-run economic growth (in today’s post, the equivalent of ICT, or Information and Communications Technology). One can see that Capital Deepening (increasing capital – machinery – per worker) produces diminishing returns. Economic growth will tail off and die – unless ICT change causes the per-worker production function to shift upwards.

So, important? Fyeah.

Hence the importance of a structurally sound economy, in terms of labour, manufacturing, communications, etc. Total Factor Productivity is stitched together thus:

There are two methods open for us: using ABS data or the Diewart-Lawrence data (read this if you really want to get into it). Using each, we get the following figures (forgive the sizes – WordPress is killing me here. Amongst other things, it has jumbled the files with the thumbnails – I can hardly tell which is which)

So we have productivity growth, but not much – not much scope for electioneering, anyway. Moreover, the latter-year’s decline is not especially worrying, relative to long-term trends

This is why period-peaks, or period-averages, are more relevant for measuring and comparing productivity. What Labor will want to discuss is the underlying change in productivity, which includes a decline from manufacturing and agriculture (the last one not at all surprising):

And:

For Labor, if it could even get the media this far, the importance of ICT-based factors in total factor productvity is the element with political gain attached:

I’ve seen a few reports discussing this, even down to the effects high-speed internet access in the workplace can have on electronic commerce. How much moreso in rural areas, where access to high-street goods might only be available thus? And what effect might it all subsequently have on declining agricultural productivity?

This is where all the broadband stuff comes into play, particularly considering that, despite all of this work (most of the above through either the ABS or Australia’s Productivity Commission), investment in communications has been down for most of the period of interest:

That was IT investment – I lopped off the headings, and I can’t be assed going to get them again.

This, to me, is Labor’s hold-all, from a policy-making/electioneering perspective. Not ‘big-p’ Productivity, because it’s relatively meaningless – and relatively meaningless = both sides can be right, wrong, or make no sense. It will be all heat and no light. If Labor want to get specific in relative terms, it can promote structural changes to move us up in the world:

But it’s hard to say what will do that – labour market restructuring may or may not:

So chasing after America, for example (who are ahead of us)

by way of their IR laws is no guarantee of anything.

So. Fun with graphs aside, I’d like to see Labor do something different with the idea of productivity, the structural soundness and future character of the Australian economy. Just turning one year of number onto another set of Liberal’s number like some kind of Pokemon – Election Edition would be a real wasted opportunity.

Follow-my-Labor

This is really only here so I could use that pun (get it? Because Howard is playing Follow-My-Leader. Oh forget it).

Rudd is calling Team Howard out on it’s lack of iniative (what Americans will know as ‘the vision thing‘). I find this interesting because it isn’t common for the government to be so blandly co-opted by better opposition policy-making. One also tends not (I think) to see the fourth wall of politics being broken

In an address this morning, Mr Rudd said the Government’s strategy of trying to neutralise the Opposition’s policies on broadband, climate change and education was becoming increasingly transparent.

“That might happen with Iraq in the future,” he was quoted as telling caucus.

Of course it’s transparent – it’s politics. Does the media know Rudd is trying to do an end-run around them?

Rudd is also cleverly predicting Team Howard’s drifting a little anti-occupation (I’d be more impressed if he just laid out what most people could probably predict from Howard: unapologetic about the war, Hussein had to be removed, victims of bad intelligence, look forwards instead of backwards, Labor has no plan to get us out of the war in Iraq), as he has anti-climate change (unapologetic about Kyoto, global caps are bad for the economy, Labor has no plan to get us out of global warming).

I also particularly enjoyed the SMHs other-handing (got to give dual, if not equal, representation, after all) towards the end, with quotes from the Prime Minister.

“We have the fight of our lives, it’s a fight we can win and it’s a fight we will win if we focus on the critical choice between the Government and the Opposition.”

Mr Howard said “all distractions” must be cleared away first, but did not say what those distractions were.

And I’ll bet nobody thought to ask. Is Howard going to have Rudd killed? It sounds vaguely threatening. Maybe he’s having all the Newspoll people arrested? Ooh! Maybe he’s having Channel Nine shut down! And current affairs programmes banned! He’d have my vote…