Tuesday, 15 November 2011

Onus of Proof

In developing policy on free trade and workers compensation, political parties have recently turned to the tactic of switching the burden of proof.

The burden of proof is probably best known in criminal law where a switch would mean that instead of the police having to show that an offence was caused by the defendant beyond reasonable doubt, defendants would have to show that they are innocent.

It is an approach that, if adopted, would offend the long standing principle that you are not guilty unless proven otherwise. Even in civil cases, where the test is "the balance of probabilities", the onus of proof is still on the complainant.

In my view it would be unfortunate if this principle were to be slowly eroded.

The Greens recently introduced a bill into the Federal Parliament to provide a particular benefit to firefighters. Normally, if you have a claim for workers compensation you have to demonstrate that your injury is the result of something that happened at work. The legislation now going through Parliament is that the insurers have to prove that the injury was not caused at work. The argument, accepted by the Government at the request of the Greens, in favour of the proposition is that the cause of some injuries to firefighters can be difficult to prove.

Surprisingly, despite expressions of concern from his own backbench and employer groups, Mr Abbott, himself a voluntary firefighter, decided to support the Greens' initiative. The benefit is provided for one group of firefighters; the country firefighters missed out.

I am not sure about this proposal. Any scheme from the Greens needs to be looked at closely. My instincts tell me that the proposal should have been subject to much more rigorous evaluation. That review should have examined the rationale of overturning the onus of proof and what other groups might now make the same claim.

The onus issue has also arisen in free trade policy.

Neither Labor nor the Liberals have an unblemished record in support of free trade. Whitlam severely slashed textile tariffs in the early 70s. Bob Hawke in government promoted free trade and moved to reduce tariffs over time whilst still propping up the motor vehicle industry through the Button car plan. John Howard was encouraged by the Dries to adopt a more liberal trade policy, but it is fair to say he was keener on industrial relations reform.

Julia Gillard talks about free trade and Craig Emerson, the current Trade Minister probably believes in free trade but actions speak louder than words. Labor has spent a small fortune in propping up the car industry at the behest of the unions.

Talk of a new trade deal, the Trans Pacific Partnership, is welcome but it was accompanied by outright hostility by the Greens and clear misgivings from the unions. You would have to be a supreme optimist if you think the deal might ever be consummated.  And, I note the comment in The Age, "But Australian officials at the APEC summit said any pre-existing free trade agreements would hold sway, with neither provision being put at risk". So, that means no extra access to the US for our farm produce. That's not much of a deal. And I doubt we would get much from Japan either.

Before John Howard became leader I was worried that he would be weak on protectionism and, looking back at my notes at the time, my fears were proved correct when, as PM, Howard pushed through a special deal to continue propping up the car industry. I told Cabinet, a few weeks before the decision, that I had been to a car factory in South Australia and the person in charge admitted that the business could not operate as effectively as possible because of the trade unions.

As far as I was concerned the Cabinet decision ensured that this state of affairs would continue and was contrary to the thrust of our general economic policy. Peter Costello and Alexander Downer were also advocates for free trade and we thought that the decision was a bad one. In contrast John thought it was one of his better decisions and kept saying so for months after the decision.

Tony Abbott's recent decision to change the onus on dumping reminds me of John Howard on protectionism before our election win in 1996, although John offered the reassurance that came with his generally pro-market values. My worry is not immediately the dumping decision, but what it says about the policy of an incoming Abbott government. Of course, anti-dumping provisions are allowed under WTO rules, but they have been often misused for protectionist interests. So any free trader will look very closely at anything called "anti-dumping".

Abbott proposes a change of the onus of proof so that importers have to prove that they are not dumping. Apparently this new approach will be handled by the Industry Department. Of course the culture of that department is well known. It would have been more reassuring if that responsibility was with an agency that has a pro-free trade approach.

The scheme supported by both sides of politics for decades has been that complainants have to show that the imports are being sold for less than cost. My personal view is that if someone wants to sell me something at less than cost then I usually buy it. The issue is more complicated than that, but millions of Australian shoppers are always looking for a bargain and that attitude is a good starting point when considering anti-dumping.

The changing of the onus in both these examples will have consequences. It is a pity that more consideration has not been given to this tactic.

Next time we hear a political party advocate a change in the onus I hope a proper consideration of all the issues will be triggered and then conducted with a lot more intellectual rigour than has been apparent in these two examples.

No comments:

Post a Comment