When politicians talk of 'security', be on your guard

I doubt if you’re waiting with bated breath for next Tuesday night’s federal budget but, since it’s the big set-piece event of my year, I’ve started limbering up. I’ve set my bulldust detector to ping every time I see or hear the word “security”. May I suggest you do the same?

We’ve been hearing a lot of that word lately, particularly from Anthony Albanese and his treasurer, Jim Chalmers. It comes with many adjectives – energy security, food security and, of course, national security – and with many spooky euphemisms: risk, strategic, sensitive, critical and sovereign, not to mention the spookiest of them all, terrorism.

In Albanese’s landmark speech on A Future Made in Australia, he assured us that “strategic competition is a fact of life”. “Nations are drawing an explicit link between economic security and national security,” he told us.

“We must recognise there is a new and widespread willingness to make economic interventions on the basis of national interest and national sovereignty,” he said. His government would be guided by three principles, the second of which was that “we need to be more assertive in capitalising on our comparative advantages and building on sovereign capability in areas of national interest”.

His government would be “securing greater sovereignty over our resources and critical minerals”.

Indeed so. When Chalmers announced the government’s new foreign investment rules last week, they seemed to be all about security.

“By providing more clarity around sensitive sectors and assets,” Chalmers said, “our reforms will give businesses and investors greater certainty while safeguarding our national security.

“National security threats are increasing due to intensifying geopolitical competition and risks to Australia’s national interests from foreign investment have evolved at the same time as competition for global capital is becoming more intense.”

The reforms to our foreign investment rules would “boost economic prosperity and productivity, while strengthening our ability to protect the national interest in an increasingly complex economic and geostrategic environment.

“We are dedicating more resources to screening foreign investment in critical infrastructure, critical minerals, critical technology, those that involve sensitive data sets, and investment in close proximity to defence sites, to ensure that all risks are identified, understood and can be managed – balancing economic benefits and security risks,” Chalmers said.

And a bolstered foreign investment compliance team will use the minister’s “call-in power” to review investments that come to pose a national security concern.

My goodness. If you were the excitable type (which I’m not), you could wonder whether the economy’s being put on a war footing. Or maybe it’s that Treasury’s been taken over by Defence and Foreign Affairs. Or ASIO.

Of course, it may be that the government and its spooks know something terrible they’re not telling us. Perhaps some foreign enemy is, as we speak, preparing to do us in.

But if you’ve spent years studying the behaviour of politicians (which I have), you wonder if it’s something less life-threatening and more self-serving. Is there an election coming up, for instance? Do voters have complaints about the economy that you’d like to draw attention away from?

The independent economist Saul Eslake says that, as the government seeks to use “national security” and “economic security” as a rationale for a major shift in economic policy, two things concern him deeply.

First, the tendency to use “security” as a justification for a policy initiative opens the door to interventions that are, in the infamous phrase of former Treasury secretary Dr Ken Henry, “frankly, bad”. Decisions that, without the “security” label, wouldn’t pass muster.

Second, grounding a policy decision in “security” gives politicians an excuse to shut down any questioning of the justification for that decision.

“When governments say something is a matter of ‘national security’, they usually refuse to say why it is; that it would be wrong to allow grubby considerations of ‘cost and benefit’ to interfere with their judgments about ‘security’, or even that it is borderline unpatriotic to question a decision made on ‘security’ grounds,” Eslake says.

It’s not the first time Eslake has expressed such concerns. Here’s a quote from an article he wrote in this august organ in late 2011.

“If you want a government to do something that entitles you to some form of protection from competition (especially overseas competition), some kind of subsidy or tax break, or some other privilege not enjoyed by ordinary folk, but you know that your proposal wouldn’t pass any kind of rigorous, independent, arms-length scrutiny ... then your best chance of getting what you want is to succeed in portraying it as being somehow essential in order to enhance some form of ‘security’,” he wrote.

Sometimes I even wonder how AUKUS – the wisdom of which many defence experts quietly doubt – came about. How much of it was the Americans’ idea, and how much was ours?

What we do know is that, without any prior debate, Scott Morrison suddenly unveiled it as a fait accompli and great coup. Had Labor opposed it, we’d have been straight into a khaki election.

But Labor accepted it without demur and the costs or benefits we’ll discover over the next decade or two.

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How we're scammed by our fear of terrorism

These days there aren't many scams bigger than all the fuss we're making about the threat of terrorism coming to our shores.

What makes the scam worse is that we bring it on ourselves.

But I'm not first to point out that this degree of concern is totally out of whack with the actual risk of being attacked.

In the past two decades, just three people have died as victims of terrorist attacks (broadly defined) in Australia. They were the two victims of the Martin Place siege and the NSW police accountant Curtis Cheng.

When Malcolm Turnbull was announcing the formation of the mega Home Affairs department last week, which he insisted was all about improving the domestic security response to "the very real threat of home-grown terrorism that has increased with the spread of global Islamist terrorism", he said that intelligence and law enforcement agencies had successfully interdicted 12 imminent terrorist attacks since September 2014.

There's no way of checking that claim, nor guessing how much harm would actually have transpired, but if that figure of 12 impresses you, you're making my point. Relative to all the other threats we face, it's chicken feed.

Professor Greg Austin, of the Australian Centre for Cyber Security at the University of NSW, has written that more Australians have died at the hands of police, lawfully or unlawfully, in 10 years – at least 50 between 2006 and 2015 – than from terrorist attacks in Australia in the past 20 years.

You reckon terrorism's a great threat? What about the more than 318 deaths from domestic violence just in 2014 and 21015?

The former senior bureaucrat John Menadue has written that Australia's alcohol toll is 15 deaths and 430 hospitalisations a day.

The journalist Bernard Keane says that between 2003 and 2012, there were 2617 homicides and 190 deaths from accidental gun discharges. More than 130 rural workers died from falling off vehicles, 206 died from electrocution and 1700 Indigenous people died from diabetes.

Why do we so greatly overestimate the risk of being affected by terrorism? Many reasons.

Part of it is that, as psychologists have demonstrated, the human animal is quite bad at assessing probabilities. We tend to underestimate big risks (such as getting killed on the road) and overestimate small risks (such as winning Lotto or being caught up in terrorism).

We tend to assess the likelihood of a particular event according to its "salience" – how well we remember hearing of similar events in the past and how much notice we took of them.

Trouble is, most of what we know about what's happening beyond our personal experience comes to us from the news media, and the media focus almost exclusively on happenings that are highly unusual, ignoring the everyday occurrences.

They do so because they know this is what we find most interesting. They tell us more about the bad things that happen than the good things for the same reason.

The media know how worried and upset we get by terrorist attacks, so they give saturation coverage to attacks occurring almost anywhere in the world.

The unfortunate consequence is we can't help but acquire an exaggerated impression of how common terrorist incidents are and how likely it is one could affect us.

But it's not all the media's fault. Of the many threats we face, we take special interest in terrorism because it's far more exciting than boring things like road accidents or people drinking too much.

The other special, anger-rousing characteristic of terrorism is that it comes from overseas and thus stirs one of our most primeval reflexes: xenophobia.

Our response to terrorism is emotional rather than thoughtful. And that leaves us open to manipulation by people with their own agendas.

After the media come the politicians. It's conventional wisdom among the political class that security issues tend to favour the Liberals over Labor. That's why conservative politicians are always trying to heighten our fear of terrorism (see Turnbull above) and why Labor avoids saying anything that could have it accused of being "soft on terror".

After the politicians come all the outfits that make their living from "domestic security" – spooks, policy people, equipment suppliers and myriad consultants – all of them doing what they can to keep us alarmed but not alert.

Domestic security is probably the fastest-growing area of government spending. None of the budget restraint applies to it. That's partly because of public pressure, partly because of the security industry's success in wheedling money out of the pollies, and partly because, should some terrible event ever happen, the pollies want to have proof they tried their best to prevent it.

What's this got to do with economics? Everything. Economics is about achieving the most efficient use of scarce resources.

We face many threats to life and limb and are right to expect the government to do what it can to reduce them. But there's a limit to how much tax we're prepared to pay, and the more money we lavish on the tiny risk of local terrorism, the more we underspend on many far greater risks to our lives.

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The game pollies play rather than governing

It came to me while I was lying awake the other night: the business, union and community worthies at last week's National Reform Summit thought the way to make progress was to hammer out a compromise proposal most people could agree to. You hand it to the government, the opposition agrees, they whack it through parliament and problem solved.

But that's not the game Tony Abbott is playing.

He doesn't want agreement, he wants disagreement, but with the government on the majority side and its opponents on the minority side. That way, you get re-elected and maybe, as a bonus, there's some benefit to the country.

Pretty bad? Here's the worst part of my early-hours revelation: the other side's no better.

This is the way both sides have been playing the political game for years. It's just more obvious now because Abbott doesn't play it with as much finesse as his predecessors.

In Canberra, the game is known as "wedging", but is better described as "wedge and block". Whoever's in government thinks of issues acceptable to their side – and popular with voters – but inconsistent with the other side's values and thus likely to divide it. Ideally, the others oppose you and so get themselves offside with most voters.

Failing that, the pragmatists on the other side – who see perfectly what you're up to – reluctantly go along with you, but a more principled minority don't, so you've sown dissent among your opponents. Always a bad look to the electorate.

If the practitioners of expedience get their way without noticeable demur from the keepers of party principle, the wedge has been successfully blocked and you have to go away and think up another one.

How do you come up with a good wedge issue? You consult those polls that regularly ask voters which party is better at handling particular issues. Study these results and you find voters have highly stereotypical views about the parties' strengths and weaknesses.

The Liberals are better at what you'd expect a penny-pinching bosses' party to be better at: managing the economy, fighting inflation, keeping taxes and interest rates low and controlling the budget. And, of course, keeping the country safe from threats to our security.

Labor, on the other hand, is better at what you'd expect a big-spending workers' party to be better at: unemployment, social security, health, education, the environment and industrial relations.

In the months leading up to an election, each side manoeuvres to establish as key election issues problems the voters regard them as better at dealing with. They try to neutralise – block – those issues the other side is pushing that would leave them at a disadvantage.

The sainted Julia Gillard wasn't too saintly to use her two most popular (and expensive) measures to try to wedge Abbott at the 2013 election.

She proposed a 0.5 percentage point increase in the Medicare levy to help pay for the national disability insurance scheme, hoping Abbott would object and so could be accused of opposing greater assistance to the disabled.

She delayed the Gonski reforms to school finding, hoping Abbott would defend private schools and she could make it a key election issue.

Abbott blocked both wedges. He quietly agreed to the tax increase which, becoming uncontentious, was never mentioned again. On the Gonski reforms he belatedly professed to be on a "unity ticket" with Labor. But the delay meant many Liberal state governments declined to sign up to the scheme so close to an election.

Abbott's efforts to wedge Labor have come thick and fast in recent days. He asked President Obama to ask us to join in the US bombing of Syria because he was hoping Labor would object to such an ill-judged move. It didn't.

In another effort to increase public concerns about national security, he propose stripping certain Australians of their citizenship, hoping Labor would object and so allow him to accuse it of being "soft on terrorists". It didn't.

Abbott is anxious to portray his government as big on "jobs and growth". He cooked up a story about greenies using the law to block a new coal mine in Queensland and proposed amending the federal environment protection act to counter "green sabotage", hoping Labor would object and he could accuse it of putting the environment ahead of jobs.

As became clear at last week's reform summit, there's now widespread agreement that superannuation tax concessions to high-income earners are too generous and need to be cut back, with big savings to the budget.

Earlier this year, Joe Hockey had Treasury working on super changes when Labor announced it would take such a policy to the election. Abbott immediately embarrassed Hockey by insisting the government would countenance no changes to super or any other tax concessions.

Labor may stand for higher taxes, he told us, but the Libs stood for lower taxes. He made it clear last week that, come hell or high water, the government would go into next year's election promising tax cuts.

Great wedge. One small problem: all Labor has to do to block it is promise to match it – just as it did when John Howard tried the same thing at the 2007 election.

Bad policy, but what of it?

If you wonder why our politicians don't seem interested in good government, their addiction to playing the wedge-and-block game explains a lot.

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