In mining and governing, policy made on the fly is likely to flop

Most controversial public policy could be said to be made on the run, or at least amended on a brisk walk.

So the revelations in Peter Martin’s recent article on the errors embedded in the Gillard government’s Minerals Resource Rent Tax (MRRT) are all too familiar.

There is much to criticise. The tax agreement is infamously short – only one and a half pages – and was signed off without experts from treasury in the room to properly assess the proposal and ensure the government’s objectives were being pursued.

Certainly, it was a compromise agreement – all policies are, given the complex nature of such problems and the conflicting goals of stakeholders and governments. But in their rush to put the issue to rest, it seems the government was too accommodating towards those seated across the table and, as Peter Martin reported, a drafting error allowed the states to take a huge cut of the revenue before it reached the Commonwealth.

While the Gillard government’s ill-fated MRRT may have failed its revenue raising purpose, it remains an invaluable lesson in policy formation. It taught us the high cost of making policy on the run, and it may even cost the government the next federal election, especially now the Greens have stepped away from their agreement with the government.

Policy making and reform should follow a slower, considered and rigorous path from conception to implementation to review.

In Australia, we often refer to the “policy cycle”, a model developed by Peter Bridgman and Glyn Davis in their ubiquitous handbook for students and practitioners of government policy. It stresses a sequential approach: problems are identified and carefully defined, research is undertaken and analysed, policy instruments considered and selected, stakeholders are consulted, coordination between government agencies occurs, and only then is there a decision, implementation and evaluation.

While Bridgman and Davis recognise the constraints of imposing a normative theoretical model in the messy “real world”, the policy cycle still provides critical analytical tools. By stressing process and rigour, it helps break complex problems into manageable pieces to enhance understanding of the issues and the appropriateness of any response. I agree with the authors that good policies should include all these steps, even if the sequence varies or some steps are repeated.

I’ve found in my research that while this cycle model continues to guide policy making, particularly within government departments, it remains a best case scenario.

Life and politics often get in the way. The problems that arise are complex and unpredictable, as can be the solutions. Policies are sometimes made very quickly for good and bad reasons. Sometimes whole sections of this policy cycle are ignored. Sometimes decisions are made by the prime minister alone (such as Howard’s reflexive declaration of military support to President Bush following the September 11 attacks) or with a small number of others (a la Rudd’s “gang of four”), or, as it appears here, all of the above.

There are, unfortunately, many other cases of policies made on the fly that later flopped. The Howard government’s Northern Territory intervention is one example. This was a grab-bag of policies hastily assembled and rapidly pushed through parliament without normal Senate review – prompted by a Four Corners exposé of the appalling and heartbreaking abuse and neglect of indigenous children and others, and the Little Children Are Sacred Report, which had laid bare the extensive abuse and dysfunction in many indigenous communities.

Yes, the cause was urgent, but it had been increasing in urgency for decades. Deeper government consideration and consultation and robust parliamentary scrutiny would have ultimately led to much better policy, and better health, safety and education for Indigenous Australians. In their rush to do something quickly, the Howard government reportedly neglected even to consult the authors of the report and consequently ignored most of its central recommendations, such as the necessity to engage with community leaders to tailor meaningful policy responses.

The pink batts scheme is another example. It was a key plank of the Rudd government’s raft of policies to quickly quash the local effects of the global financial crisis. Lenore Taylor and David Uren report in their book Shitstorm, that when free ceiling insulation was offered to households, the sector rapidly expanded to 20 times its original size, with “many shonky and inexperienced operators” taking part. This was a recipe for calamity.

The scheme only operated for eight months, but four deaths and around 200 house fires have been attributed to it. Not only did Rudd’s “Kitchen Cabinet” veto two, safer policy alternatives recommended by their government departments, but “clear warnings about the danger inherent in the scheme [had] been dismissed in the rush to implement the government’s stimulus decisions”.

Nearly half of the $2.5 billion allocated for the scheme would be spent checking roofs and repairing unsafe electrical work.

Process matters. The exacting set of processes suggested by the policy cycle does not guarantee perfect governing, but as Bridgman and Davis state, it does reduce the chance of “howling errors”, such as a revenue raising tax that fails to raise revenue and destabilises a government already under attack.

Bronwyn Hinz does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.

The Conversation

This article was originally published at The Conversation. Read the original article.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.