Stephen Bartos is Executive Director of ACIL Tasman and a former Deputy Secretary of the Department of Finance.

Alex Oliver's Policy Brief on the Consular Conundrum points to the problem of rising expectations: 'successive Australian governments have progressively "bid up" the servicing of consular cases over the last two decades'.

Loss of self-reliance is not confined to Australians traveling abroad. Laura Tingle paints a picture in her Quarterly Essay Great Expectations of an Australia with an exaggerated sense of entitlement. We not only want our governments to do more, we then hate them no matter what they do. She says 'as a nation, a polity, we have not sat down and worked out what exactly we expect "the government" be and to do'.

The mob is all too ready to vent anger against whoever is in government whenever a radio announcer turns an Australian in trouble abroad into a cause celebre. Consular officials face a real problem. Tempting as it is to say they should be more hands-off, the political reality is that they have to intervene when called on. The question thus becomes how to pay for it.

Alex Oliver proposes a charge on all travelers, via a levy on either tickets or passports. While the motivation is commendable, I worry about the risks.

Others in the debate have said that they like the proposal because it offers the prospect of a revenue boost for DFAT. Maybe it's pessimism, but I think it equally likely that DFAT could have its budget reduced by the estimated revenue. That would introduce greater volatility, with the foreign affairs budget rising and falling with international travel volumes. 

It could also have the unintended consequence that others have already noted: that a hypothecated charge will lead to an increase in the number of Australians demanding consular help. Travelers may well say to consular staff: 'give me the assistance that I have paid for', no matter how trivial the request. 

A further problem is that such a charge is likely to be classified as a tax. That will be a difficult sell in an election year where neither major party wants to be seen to be raising taxes. It is a tax, not a user charge, because it would apply to everyone taking out a passport or buying an airline ticket (the two options for where a charge could be levied). The IMF says a levy is classed as a tax 'where government is not providing a specific service in return for the levy'. 

A user charge, on the other hand (that is, asking those who use consular services to pay for the costs incurred by government) would have several benefits:

  • It would not increase taxes, an attraction for government.
  • It would not penalise travelers who take sensible precautions when overseas or who insure.
  • It would discourage frivolous requests for assistance.
  • Most importantly, the knowledge that they might have to pay for assistance would be a disincentive for Australian travelers to engage in stupid or illegal behaviour. At present, the safety net of consular assistance is more likely than not inclining Australian travelers to take more risks than they should (what is known in insurance as the 'moral hazard' problem). 

There could still be room in such an arrangement for charges to be waived where a circumstance was genuinely unforeseeable and the person involved could do nothing to reduce the risk. For those who could not afford such a charge, there is a good policy solution. They could be issued with an income contingent debt (rather like a HECS debt), repayable only once they could afford it. 

There would also be a strong case, as with any such policy change, for government to put some funds into a publicity campaign and into encouraging the insurance industry to respond. 

An arrangement like this might in time produce a spinoff benefit: revision of what is currently a very, very cautious smartraveller site. Many relatively quiet countries where dangers to any sensible traveler are low are rated with 'exercise a high degree of caution'. Some others where there are risks that sensible travelers can and do manage are rated 'reconsider your need to travel' (although there are others such as North Korea where the rating seems well justified by current events). 

The reason for the caution is apparent from Alex's report. It can no longer be assumed that Australians traveling abroad will read about a country before visiting and avoid conflict zones, street demonstrations or other dangers. The concept of sensible preparation has gone out the door. 

DFAT has to assume the worst because often that is what happens. A user charge on those who find themselves in trouble through their own stupidity would help change those incentives.

Photo by Flickr user iwona_kellie.