Viv Forbes, Stuck on Red & Other Essays (First Published by “Business Queensland” and “Common Sense” in 1991), pp. 68-70.About the Author»

Every little boy loves watching fires and floods. The excitement of action, the thrill of danger and the feeling of importance when relaying the news back home are irresistible.

Politicians are no different. Once disaster strikes they flock in with concerned faces and promising cheque books. If the disaster is big enough to attract national television, there will be sufficient politicians on hand to hold a joint federal-state cabinet meeting.

However, the long-term disasters conceived by vote seeking blow-ins are more costly than those they claim to solve.

Take drought relief. For years the elders of the farming community have said to their sons, “Don’t get into debt, build up your savings and keep the hay shed full.”

Now the government says to those who ignored this sound advice, “If you have heavy debt, no liquid assets and starving stock, do not worry. You are entitled to a handout from us. Your prudent neighbours will pay for it.”

We all sympathise with struggling farmers plagued by taxes, tariffs, inflation, blow-flies, politicians, unions, floods and drought.

However, droughts are a normal feature of the Australian landscape. Some areas have been defined as “drought stricken” for 50% of the time for over 20 years. People who choose freely to locate their businesses in these areas must plan to cope with natural climatic conditions. It is unfair that other businesses who choose safer environments should be forced by politicians to subsidise those who gamble unsuccessfully against King Drought. As Mr Warburton said in 1986, “Farmers who receive most assistance tend to be risk takers, while those who adopt strategies to minimise risk, or prepare for a disaster, are often ineligible for assistance.”

Past drought policies have perversely added to the risks faced by country businesses.

Firstly, there are no clear unchangeable guidelines. Each natural disaster produces ad hoc decisions and arbitrary rules which add political uncertainty to all the other risks facing the farmer.

Worse still, if farmers believe there will be government help, they lose the incentive to adopt drought insurance policies. This encourages overstocking (and land degradation) and makes the next drought an even bigger disaster.

Floods are a natural feature of certain country. As Moss Cass said in 1974, “Flood plains are for floods.” People who freely locate their house or business on flood plains are choosing higher risks in return for cheaper housing blocks, or more fertile farm land. It is unfair that those with different risk preferences should be forced to subsidise them.

Politicians like to grandstand and gladhand on the stage of big disasters. But disasters are individual things. The man whose house is burnt down in an isolated fire has suffered a bigger disaster than any one of the thousands of home owners whose houses are flooded but left intact. Moreover, it is difficult to determine who has suffered from a natural disaster. Drought does just as much damage to the regional machinery dealer as it does to his farmer clients, but the dealer seldom gets a political handout.

Politicians also magnify future disasters by giving handouts to those who have no insurance. This is equivalent to supply government insurance at zero cost, which is certainly more attractive than insurance from AMP or MLC. This unfair competition tends to increase the number of people with free government insurance and decreases the pool of people contributing directly to the voluntary disaster insurance pool.

The media are often equally irresponsible. They could play a valuable role with accurate advice and information, in organising and promoting voluntary relief schemes and in acting as a watchdog to expose deceptive insurance practices or fraudulent claimants. Instead they employ emotive headlines and journalistic harassment to spread the Aorta disease — “Aorta give these poor victims more money.”

Every government welfare scheme gets abused and over-used and leads to widespread corruption.

First is the legal corruption which occurs where assiduous advisers employed by big business read the rules and manipulate stock or assets to ensure they are eligible for government relief. Second is the outright fraud committed on a clumsy bureaucracy by individual liars and con-persons (yes, there were ladies among the 10% of fraudulent claims to the Logan City disaster relief scheme).

What may responsible politicians do? They could ensure that all disaster insurance is tax deductible — this should include storage of water and fodder, and insurance premiums for fire, flood, storm or earthquake. They should also ensure that there is no deception or fraud on either side regarding the disclosure of risks and no breach of any insurance contract.

They should also avoid the use of totalitarian “emergency” evacuation and seizure powers. (A study of most disasters shows that jackbooted officials are one of the biggest dangers facing any independent-minded citizen.) If someone chooses to defend his property from flood, fire or looting, or to take the risk of staying put, that is his right. The combined effect of all such individual defence efforts will always exceed the centralised and costly efforts of the authorities. Finally, politicians should abandon the business of providing “free” disaster relief, absolutely and completely, and publicise this fact. Those with a compulsion to do good deeds should find a useful job on the end of a shovel or on a fund raising committee.

Life is full of disasters — flood, fire, earthquake, cyclone, drought, accident, volcano, war, burglary, disease, locusts, rabbits, unwanted pregnancy, toxic waste dumps, tax audits, political promises and the Australian Wool Corporation.

Only foolish people do not recognise these risks. Each person must decide which risks to insure against and which to bear. Inevitably, some will choose to take foolish risks, but politicians should not coerce other taxpayers to reward the foolish.

The ultimate result of protecting people from their own foolishness is to fill the world with fools.

This is no service to any country.

(in order of appearance on Economics.org.au)
  1. Lang Hancock's Five Point Plan to Cripple Australia
  2. Put Windmills in National Parks
  3. Magnifying National Disasters
  4. Please Don't Feed the Animals
  5. Buy Birdsville Made?
  6. The Economics of Flood Risk
  7. Touring Bureaucrats
  8. Our slip-shod laws to blame
  9. Why Wind Won't Work
  10. A Profusion of "Prices"
  11. R.I.P. Ron Kitching - pioneer, explorer, author, family man, entrepreneur, scholar
  12. The Carbon Pollution Lie
  13. Closing Down Australia
  14. The Anti-Industry
  15. The Pyramid Builders
  16. Carbon Tax Bribery
  17. Crown Monopolies
  18. Carbon Tax Job Losses
  19. What Next, a Tax on Water?
  20. Carbon Health Warnings Coming Soon
  21. Growth Mythology
  22. The Tax Collection Industry
  23. Propaganda Puts Paid to Proof
  24. The Milk of the Welfare Teat is Watered Down
  25. "Crops for Cars" as Bad as Everlasting Drought
  26. Poll speech sets record
  27. The Emissions Trading Casino
  28. The Contract Society
  29. A Model Ministry
  30. The Five Point Plan to kill the economy with High Cost Electricity
  31. Put a Sunset Clause in the Carbon Tax
  32. Stuck on Red
  33. Time to Butcher "Aussie Beef"
  34. Carbon Tax Lies and Bribes
  35. The Middle of the Road
  36. United against taxes
  37. Call for Govt administrator
  38. Property & Prosperity
  39. "The Science is Settled" BUT Durban Climate Summit Not Cancelled
  40. No End to Fuelish Policies?
  41. The Right to Discriminate
  42. Sell the CES
  43. Free Water Costs Too Dam Much
  44. Creating Unemployment
  45. Viv Forbes Wins 1986 Adam Smith Award
  46. 1985 news item on Tax Payers United, Centre 2000 and the Australian Adam Smith Club
  47. Having the numbers is not the same as having the truth
  48. Who's Who in the Workers Party
  49. David Russell Leads 1975 Workers Party Queensland Senate Team
  50. Caught in a welfare whirlpool
  51. Global Warming Season
  52. Mining in Queensland, Past, Present and Future
  53. WEATHER IS USUALLY UNUSUAL
  54. Political branch formed
  55. Ron Manners on the Workers Party
  56. Viv Forbes on Libertarian Strategy and the Constant Resources Myth
  57. The New Brisbane Line?
  58. Carbon Lies
  59. We Mine to Live
  60. Save the taxpayer
  61. Solving Three Canberra Problems
  62. Vested Interests in the Climate Debate
  63. Carbon Tax Retrospective?
  64. Carbon Price Propaganda Taxes the Truth
  65. Don't Burn Food for Motor Spirit - Feed People not Cars
  66. Two Big Climate Taxes
  67. Greens Rediscover Hydrogen Car
  68. Atlas of Australia
  69. Shutting Out The Sun
  70. Safety Mania
  71. Coal - Sinking in the Swamps
  72. Hobbling the Competition
  73. Cubic Currency Coming
  74. "Dear Government"
  75. Viv Forbes mocks Flannery in 1988
  76. What we have is not a drug problem but a drug law problem
  77. Smoking, Health and Freedom
  78. Privatise Now! while they are still worth something
  79. The Electoral Act should allow voters to choose "none of the above"
  80. The New Federalism
  81. Sunset for Solar Subsidies
  82. The mouse will roar
  83. The Road to Homelessness
  84. Planning & Prosperity
  85. Viv Forbes and Jim Fryar vs Malcolm Fraser in 1979
  86. Quip, Quote, Rant and Rave: four of Viv Forbes' letters to the editor in The Australian in 1979
  87. Australia's First Official Political Party Poet Laureate: The Progress Party's Ken Hood in 1979
  88. Our homeless regulation refugees
  89. Progress Party and Workers Party lead The Australian
  90. Viv Forbes in 1978 on loss-making government, the Berlin Wall and misdirected blasts of hot-air
Powered by Hackadelic Sliding Notes 1.6.5
Forbes has long been active in politics, economic education, business and the global warming debate, and was winner of the Australian Adam Smith Award “For outstanding services to the Free Society” in 1986.Powered by Hackadelic Sliding Notes 1.6.5