Two conference papers to wrap up the year

In November I delivered two conference papers. I summarise them below.

From cell transplants to genome edits: Regulation and bioethics of existing and emerging interventions for sickle cell disease

This first paper was a ‘rapid-fire’ talk at the Australian Association of Bioethics and Health Law (AABHL) conference (‘Making Connections’) in Hobart, Tasmania, on 17 November. This talk summarised some of the work I have done on the bioethics of somatic cell genome editing with my colleague Prof Dianne Nicol. The most promising and translation-ready genome editing treatment around today seems to be CTX-001, manufactured by Vertex Pharmaceuticals. CTX-001 has been developed to treat sickle-cell disorders (SCDs).

SCDs comprise a group of genetic disorders of red blood cells (RBCs). Hemoglobin in RBCs usually carries oxygen from the lungs to the tissues and removes carbon dioxide. In the SCDs, a ‘sickle’ hemoglobin (‘HbS’) molecule is expressed within the RBCs. Generally speaking, if you have two HbS genes, you might have sickle-cell anaemia. If you have one HbS gene (heterozygous), you might have beta thalassemia.

The HbS molecule in the RBCs comes from the HbS gene. The HbS gene is a mutation thyat occurs when glutamic acid is replaced by valine. GAG becomes GTG on the HbS gene (at chromosome 11p15.5), which results in the HbS gene. Pathophysiologically, once the HbS gene mutation occurs, the HbS molecule within the RBCs results in a situation where, under reduced oxygen tension, you get polymerisation of the RBC, and this turns the cells (erythrocytes) into the characteristic sickle cell shape. When the RBCs are in this sickle shape, they obstruct blood flow, causing ischemias or vaso-occlusive crises. This then deprives the tissues of oxygen, creating respiratory issues that can be very serious.

CTX-001 is a new treatment to treat and potentially cure SCD. This paper examined SCD and its prevalence, identified its significant impacts on African American and African populations and analysed the bioethics of the best existing treatment (the allogeneic hematopoietic stem cell transplant, or a bone-marrow transplant). The paper then contrasted the bone-marrow transplant with the CTX-001, the yet-to-be-approved somatic cell genome therapy, and briefly noted the bioethical implications of administering CTX-001.

The paper was largely based on a book chapter contribution that I have written with Dianne Nicol titled Bioethical decision-making about somatic cell genome editing; Sickle-cell disease as a case study, which has been accepted by the editors of the Springer Handbook of Bioethical Decisions and will presumably be published in 2023. Slides from my talk (title page below) are viewable here.

Teaching constraints: Why we should (but don’t) teach the Commonwealth ‘spending’ power (among other things)

The second paper was presented at a symposium of law academics from around Australia held at the University of Sydney on 29 and 30 November and called Teaching Material: Symposium On The Pedagogy Of Political Economy In Australian Law Schools (program here).

This paper was one of my first serious attempts as a legal scholar to write about public finance law. In writing the paper, I learnt a lot, including from Will Bateman’s excellent book Public Finance and Parliamentary Constitutionalism (CUP, 2020). The essence of my talk was the ‘spending power,’ which is generally understood to be reposed in section 83 of the Australian Constitution. However, sections 81, 3 and 66 also deal with the Executive Government’s ability to spend by reference to Consolidated Revenue Fund, and so I made reference to those sections as well. But the main claims I was making were as follows.

There is no textbook dealing with public finance law in Australia, or in the UK, Canada or New Zealand; this represents an almost unbelievable lacuna in legal knowledge that shall continue to dog learning and epistemic understanding until we build a textual knowledge base.

There are three examples of how complicated public finance law can be; but, when we look at these examples, we can readily see (1) just how easily these complications can be resolved, and (2) why it is so important to resolve them.

The first complication is the notion of the spending power under s 81 of the Constitution; that power is not generally a parliamentary power but one exercised exclusively by the Executive Government of the Commonwealth; in other words, federal MPs not a part of the Executive are powerless to block spending or ‘block supply,’ with the effect being that there is really nothing anyone can do outside the Executive to control how much, or how little, the Commonwealth spend on its projects

The second complication is that the Consolidated Revenue Fund, which exists by dint of the ‘appropriations power’ (Constitution s 81; but also ss 83, 3, 66) is not actually a finite ‘kitty’ into which taxpayers’ taxes are deposited (eg, by the Australian Taxation Office), as appears to be largely assumed. Rather, the CRF is more complicated. It is a legal concept; and it is notionally self-executing and does not actually appear to be accessible, or its full quantum knowable, at any single point in time. This may be as confusing for students as it has been for apex courts!

The third complication is the seemingly unknown fact that special appropriations and standing appropriations can set aside (‘hypothecate’) or even ‘bake in’ an unspecified amount to be spent on a government program over an unspecified period of time. This means that spending can be effectively automated. For example, Medicare: will a person entitled to a rebate ever have their request declined because there are ‘insufficient funds’ in the CRF? No.

The point of bringing this into relief is to show that, as with legal knowledge about the legal ‘abstraction’ that is the CRF, knowledge about appropriations, and specifically ‘special appropriations’ (including knowledge about the common law and operations of the finance department), shows us: (1) precisely how government can lawfully spend money (for what purposes); (2) how it determined this (and it appears to be self-determined and open-ended (see Brown v West; Combet v Cth); (3) whether an appropriation that is an ‘Advance to the Finance Minister’ (AFM), for example, is lawful (it is: see Wilkie v Cth; Aus Marriage Equality Ltd v Minister for Finance); and (4) whether appropriations can include money that is not government money (seemingly they can, through ‘net appropriation’ agreements determined by the Finance Minister under the Financial Management and Accountability Act 1997 (Cth) s 31).

As the slides reveal, for each of these ‘complications’, there is a respective ‘teachable’ that shows us so much more about the reality of government spending. The paper then goes on to illustrate its claims through an example of a fictitious Act, the Bigger Medicare Act 2022 (Cth). I am hoping to write this up as a paper in the new year, once I finish some other work. The slides (title below) are viewable here.

Why a modern legal education should examine constraints on the Commonwealth’s spending power

Mainstream critical legal education in Australia gives little attention to enactments and case law regulating the Commonwealth’s constitutional power to appropriate (s 81) and spend money (s 83). This neglect has several causes, including a shallow knowledge base. Few legal scholars have engaged with reforms aimed at increasing the public administration of government spending, much less criticised their effects on Parliament’s spending powers. One exception is Professor Charles Lawson, who argues such reforms have undermined Parliament’s constitutional authority.

The Charter of Budget Honesty Act 1998 (Cth) (CoBHA) is a reform in point. It imposes guiderails around the Commonwealth’s constitutional spending (‘budgeting’) powers by introducing ‘principles of sound fiscal management.’ On first view, these principles seem commendable: they make government more transparent about fiscal strategy and seem broad enough to permit diverse governments to develop divergent economic policies. But the substance of these principles (including what they omit) reflects a bias towards orthodox neoclassical economic theory (eg, pro-austerity fiscal policy) and against the emergent insights of heterodox economic theory (eg, the sectoral balances approach).

Given the central role government expenditure plays in our daily lives (eg, Medicare, the NDIS) and the importance of political economics to Australian electors, a modern legal education should familiarise students with laws that may constrain or even undermine Parliament’s constitutional power to spend money (such as CoBHA), together with related case law. I contend that both constitutional law and administrative law are Priestley 11 subjects well placed to highlight these tensions in political economy and law.

On Bernie Fraser’s avowed dispreference for academic review of the RBA

This post is a provisional opinion. It is expressed in a moment in time and does not represent the view of my employer, is not legal advice, and is not offered as a scholarly contribution.

Bernie Fraser says he’d rather ACTU Secretary Sally McManus be appointed to review the RBA than an ‘academic pontificating on things.’ Surely that’s a stir-up. Indeed, to my ears, it’s quasi-Trumpian. What’s he worried an academic economist would say?

Almost three-quarters of the economics academics in Australia seem to me to be orthodox neoliberals, and those who are not (and eminent enough to be considered), such as Profs Bill Mitchell and Steven Keen, are exactly what we need right now.

We need fresh thinking in economics. Specifically, we need to think differently about sectoral balances. Everyone is so worried about government debt in Australia, but government debt is only 40% of our GDP while our household debt is three times that amount: a massive 120% GDP — the second highest in the world (by far).

What’s the point of shrinking government debt through fiscal contraction if we are all just getting more and more indebted to the banks? Million-dollar mortgages are not normal in other economies. They may be common, but they’re not pervasive and normative like they are here. Household debt to GDP in the UK IS 87%; in the US is 78%; in France is 67%; in Japan is 66%; in Germany is 57%; in China is 61%.

Switzerland is the only country in which households are more indebted to the banks than Australia. Their ratio is 131%. But many economists do not even believe the Swiss figure because the banks in Switzerland have significant disclosure differences to other jurisdictions (hence the proverbial ‘Swiss bank account’).

So if, on average, we in Australia are all but leading the world for household debt, but we then hear that wage rises will cause inflation (see below), and then interest rates are rising, why on Earth would the RBA resist academic input on the its role and performance? My provisional view is that that the RBA has become super timid and conservative and fears the kind of sunlight an academic study would throw on the RBA’s current methods (QE, interest rate rises, etc.). They just want to ‘get through it.’

On the other hand, if Bernie is a true believer and wants Australia to get out of this and is still thinking consistently with the duties expressed in the RBA’s statutory objects (full employment, prosperity for all, etc), he might actually just be worried that an academically honest assessment might damage Australia’s credit ratings by exposing the chaos. If that’s the case, then more power to him!

The RBA do great work, but they’re a bubble — just like academic communites can be bubbles — and that’s also why Jim Chalmers has said the review has to be independent. There’s no doubting the quality and rigor of the RBA’s assessments and analyses, which is laudable. This study of household income to GDP, for instance, is great:…/why-is-australian-household…. But the RBA seems to me to have become reactive and explanatory, at least at the moment; it’s not a rich source of policy, despite its experiments with QE. We need some Australian innovation in economics and the academy is not a place to put down in these discussions.

Credit: Cathy Wilcox for The Age