Category Archives: Australian politics
The Costings Fetish and What it May Mean
Australian politics is undoubtedly at a strange place. Since the 2010 election when Prime Minister Julia Gillard and her Labor Government scraped into the power with the support of the Greens and three Independent MP’s, all the usual hostilities have ramped up. Some new battles have even been established too. Much of this can be put down to one simple factor and that is the vicinity of power to the two political leaders. The Labor Party are just holding onto power, only just and the Liberal and National Party coalition still look very close to taking power at the 2013 election despite narrowing poll margins.
Of all the interesting and at times absurd events fomented by the fragile state of play, one of the most interesting has been the growing desire and outward protestations from the ALP , particularly over recent weeks and months, for the Coalition to cost their policies and do so now.
There are always calls from incumbent governments, it is true, for opposition parties to release and cost their policies as early as possible. Why would governments not want to do that? Were that to occur, to be common practice, it would certainly help the reigning political party or coalition to construct a strategy to rip apart the figures.
It has come to light this week that a relatively unusual event has occurred in Australian politics. The Gillard Government, it was revealed, asked Treasury to cost three existing Coalition policies. That analysis found that those three policies would come at a cost of $4.57 billion to businesses in the first year of a Coalition Government from 2013.
As was mentioned before, governments seeking costings in a rather energetic way has always been a bit of a thing. But now it appears to have developed into a fetish. Rarely before have the calls been so relentless and so vocal. Again, that mostly goes down to the thirst for either maintaining or gaining power, a hunger that both sides of politics have at the present time.
Really though, it is completely stupid to be asking, to be demanding that opposition parties release their policies so far out from the election. If the budget state is uncertain and your party have announced, or have a well-entrenched focus on achieving a particular budget outcome, then it would be folly to release your costed policies so far out from the election.
It is almost without doubt that the Coalition will either drop outright or alter, either in part or dramatically, their existing policies. You could almost be sure that the paid parental leave scheme will be different to the existing policy. The rhetoric around that policy has shifted and talk about it from the Coalition is no longer a priority, almost to the point of no words being uttered willingly about the proposed scheme.
Not only that, but the Opposition would surely be considering a number of cuts to existing government programs. That’s a hallmark of Liberal administrations.
An interesting thought does come to mind when thinking about the reasons for the Gillard Government seeking and then leaking costings of Liberal Party policies.
The possibility of a March election has been raised in the last week or so in response to a rush on the part of the Labor Party to get legislation through the parliament before it rises for the Christmas break.
Of course, running up to an election, as a government, you might want to look like you are getting things done, even though to some, too much government is a very bad thing. Australians though, on the whole, while they hate their government, whatever the political complexion, they tend to want, or rely on its intervention.
And so the recent suggestion of the Coalition has some weight. An early poll probably will not eventuate, but the thought must not be discounted.
Really, the most likely reason for the politicisation of Treasury is the thirst for more political blood. Surely the Gillard Government is itching for more momentum, to capitalise on recent movements.
It is the job of the Coalition to release their final suite of policies close enough to the election to put them in the context of the fiscal position but far enough out from the polls so that the public get a good look.
Now is too far out, despite what the Labor Party and sections of the media will have you believe.
The Stupidity of the Ban Mentality
Overnight we again saw distressing scenes of animal cruelty on our television. This time it was truly horrific scenes of barbarity towards sheep which ended up in Pakistan after being diverted from Bahrain which There is nothing pleasant about the way the animals were treated. Nobody could in any way excuse or justify the treatment of the Australian livestock by Pakistani officials. Of course the sheep were bound to be killed either way, but the reasons given and methods deployed were at the same time dubious, ugly, abhorrent and disgusting.
Predictably of course, the live export ban lobby have again found fuel for the fire that they want to build in order to see the entire industry destroyed. The extra oxygen is again fanning the flames and the advocacy groups involved will not stop until the industry has been reduced to smouldering ashes.
But is this a reasonable move? Is this something that should logically occur as a response to this incident? To any given incident which makes people question the trade?
The reality is that the reaction, as far as continued calls for a complete and permanent cessation of live exports, is a woeful overreaction with little or no understanding of the real world of policy-making. The repeated calls also lack reason.
Thankfully, this time, Agriculture Minister Joe Ludwig and the Labor Government actually made a rational and reasonable decision. This time there was not and there will not be a knee-jerk reaction from an out-of-touch government pandering to the chosen few because they feel slightly uncomfortable about the headlines live exports have generated.
That seems to be the new test. The ‘discomfort test’, it would appear, is the new threshold for banning a whole industry in response to what are undoubtedly horrific scenes.
Back in the real world, we realise that isolated incidents do not make a bad industry. We realise that while there have now been a few documented incidents and disturbing ones at that, that those occasions do not represent the industry as a whole.
Let’s think about the proposition for a minute. The proposition that says banning a whole industry is a smart and justified response to limited wrongdoing across a specific industry.
Imagine if we followed this suggestion through to its logical conclusion. Any industry where there is any hint of wrongdoing, no matter how limited, where there are examples of events of an illegal, abhorrent or unpopular nature should be cut down and eliminated.
Not quite so sensible an idea now is it? How many industries would be left if this was the case? Probably none.
We would be stupid, indeed naive to believe that any amount of regulation, any number of checks and balances could eliminate all inappropriate behaviour in any industry. However, banning something in response to reprehensible actions is not the answer.
Some in the ban live exports camp will say we could replace the live expert trade with the slaughter and preparation of livestock in Australian abattoirs and some of course do not want us to be eating meat at all. Those advocating the latter should be ignored. They are well and truly in the minority and should not be trying to push their beliefs on the vast majority of people.
Those protesters pushing for the killing and preparation of livestock in Australia for export in place of sending live animals to overseas nations have a point, at least in theory.
We could create an extensive slaughter industry in the north of Australia. Jobs would be created and more money would be rolling in domestically from the livestock trade. Sounds good right?
The trouble is that in reality, if we were to travel down that avenue, slaughtering and preparing all meat for export onshore, we would almost certainly strike a problem.
If we were pursue a policy like this we would almost undoubtedly experience a drop in demand for our product. Some countries would surely be more cautious about accepting our meat trade if we were responsible for the whole slaughter and preparation process.
Then there is the small matter of local slaughterhouses occasionally slipping up and making mistakes. Yes, there would be better oversight if meat-processing was located here but it would be a mistake to believe we could eradicate all issues.
All this seems like an unnecessary price to pay. Animal rights lobbyists should be advocating punishment for wrongdoing but not calling for a complete ban of the trade.
An Open Letter to State and Federal Politicians Regarding the NDIS
Dear state and federal governments,
I do not believe that all of you, despite protestations to the contrary, are actually one hundred percent serious about pursuing the implementation of a National Disability Insurance Scheme. Furthermore, I am concerned that the bipartisanship at the federal level may well be in name only.
Labor: You announced, with great fanfare as a result of work precipitated largely by Bill Shorten as Parliamentary Secretary for Disabilities through the Productivity Commission, that a NDIS was needed. That report identified that the disability services sector is fragmented and under-funded. You pledged to work towards implementing such a scheme.
The Coalition: You announced swiftly, despite a perceived disposition towards opposing major reforms, that you wholeheartedly supported the idea to assist some of the most vulnerable Australians.
Since that wonderful day when you, our federal politicians gave a feeling of hope that many people with a disability and their carers have never experienced before, things have changed.
The future of the much-needed reform looks far less certain than it did this time last year and that worries me. I have no doubt it also worries many others with a connection to disability. We are used to disappointment and people with a disability are used to being largely left out of government calculations.
I acknowledge that the problem is not wholly because of you, the federal government. Blame for the uncertainty must also be laid squarely at the feet of some of our state governments. Yes, you did ignore, as governments generally do an important recommendation. This recommendation from the Productivity Commission said that you, the commonwealth should be the sole funding government of this important initiative.
To Tasmania, South Australia, the Australian Capital Territory and later New South Wales and Victoria: Thank to all of you for getting past the Gillard Government’s refusal to be the sole contributor to the National Disability Insurance Scheme. Your contribution is much appreciated, even yours NSW and Victoria. At least you were willing to remain at the negotiating table even if your government’s played it trickily for a while.
Queensland: Despite the dumping of the key recommendation from the report into the insurance scheme, you could have contributed a modest amount of funds toward a launch site.
You should have been able to get past that point and negotiate with the federal government from the viewpoint that they must be responsible still for the bulk of money contributed towards the establishment of a NDIS. We know and acknowledge that your revenue streams, as with all states, are limited. However, giving something was entirely possible.
To all the states: Please now operate on the assumption that the commonwealth government should provide the vast majority of the funds toward the NDIS. That includes you Queensland.
But back to you, the federal government: A half thanks for the $1 billion over 4 years in the May budget. You contributed something. But in the scheme of things it falls remarkably short of the mark. The meagre sum of $250 million a year for four years for a project that will cost over $13 billion in the first full year is a bit of a joke, especially considering how much more you like to waste in other areas.
To the federal Opposition: Thanks for what appeared, at least initially, to be earnest support for an essential new way of catering to the unmet needs of people with a disability.
Since that initial endorsement though, there have been mixed messages which make me and many others concerned that your professed interest in pursuing this in government might actually be a little on the fake side.
If this is a false assumption then please stop people like Joe Hockey from appearing to question the ability to fully fund the scheme years into the future. Please stop the Shadow Treasurer from referring to it in a negative light.
Contribution to the scheme will be more than possible by the time of implementation put forward by the Productivity Commission. Even the timetable of the ALP Government is within reason. It is only one year earlier.
Again to Labor: I hope you did not think that my concern over your actions, or lack thereof was limited to that already mentioned. It is not.
I am very concerned at your ability to appear to be doing something while actually doing little at all, other than mostly talking. You now say you will introduce legislation to establish aspects of the NDIS, including the transitional agency. That is great, but it is useless without money being funneled towards it.
You have said, or at least hinted over the past couple of days at more money being directed toward the policy, but only next year. If your hilariously small contribution in the May budget is anything to go by, then a contribution next year, keeping in mind the state of the budget and the fact that it is an election year, will either be inadequate or potentially peeled back upon change of government.
The disability community would appreciate it if all of you would address our concerns. Some of you are doing very well, some okay and one state, that’s you Queensland, doing terribly.
There are a lot of people now more cautious, some cynical and some even scared about the prospects of not having the NDIS going ahead. We need reassurance that our concerns are not based in reality. That can only be achieved through strong actions, not strong rhetoric.
Yours Sincerely,
A NDIS fan
Reason Excised From the Mainland
Reason and informed debate are both being used much less in politics than they should be. Too much time is focused on populist policies for political gain and not enough on well thought out ideas. The withdrawal of sensible thought has been accelerating during this 43rd parliament and it is a blight on both sides of politics.
There are two recent decisions in particular which best display the timidity of thought and action that now pervades our parliamentary process.The first is the “tactical withdrawal” from moving towards indigenous recognition in the Constitution in the preceding weeks. The second topical example is before the parliament at the present time and that is the decision to excise the whole of mainland Australia from the migration zone.
The former, indigenous acknowledgement in the Constitution received much more attention than the latter, the excision of Australia has. That in itself is a sad example, not just of the lack of reason and thought used in the political discourse, but also the wildly out of kilter priorities of those put forward by our political parties.
The excision of the mainland was not a policy advocated for by the government as part of the misguided response to asylum seeker policy. Instead, it was put forward by what was, in name only, an “expert panel”. However, it and all the other recommendations set out in the Houston report have been adopted wholeheartedly by a rapidly changing Australian Labor Party.
The ALP is a political grouping that appears to be doing its best, at least on asylum seeker and refugee policy, to appear a faction of the Liberal Party. At the very least, they are playing wedge politics in an over-indulgent manner.
The policy of removing the Australian mainland from the migration zone defies all logic. As some have argued, it would be quite funny, if it were not sad and cruel, to believe anyone really thinks that pretending the mainland does not exist for the purposes of being able to send more largely desperate people for offshore processing, will help “stop the boats”.
Immigration detention is jail wherever it takes place. It is punitive and it is ugly. It is also something that should be beneath Australia as a mostly civilised nation. Funnily enough too, the spectre of detention has actually not deterred too many from risking their lives.
So why does the asylum seeker and refugee debate lack reason. First and foremost, because it appeals in some way to a fear of difference that some in our community hold onto. This area of government action also lacks commonsense because it is easier to appeal to fear, engage in knee-jerk responses and to punish than it is to invoke compassion and implement more comprehensive and sensible policies.
What of that much less discussed and debated issue, the one that should be of much more domestic concern than the over-inflated “boat people” “issue”? How about choosing not to pursue, for the moment at least, indigenous recognition in our Constitution?
The dropping of the process, the tossing of it into the too-hard basket is again a case of the easy way out.
Yes it is true that it would have been very difficult for the constitutional amendment to pass, especially when it was supposed to be posed at or before the 2013 election. The question would have required a majority of people in a majority of the states to say ‘yes’ to whatever the proposition put forward by the government and of course only 8 out of 44 referenda have successfully been prosecuted.
However, just because the circumstances are difficult does not mean that the process should have largely been abandoned. A smart approach would have been to acknowledge the difficulty in forging ahead with the vote on the timetable agreed on.
After doing that it would have been quite reasonable to say to the public and more importantly, our indigenous people, that we would like to forge ahead with the planned constitutional amendment, but in doing so would need more time to forge a strong consensus in the community.
The fact that we need more time to forge a consensus within the Australian public that indigenous people are indeed humans populating this country and did inhabit this country prior to our ancestor’s arrival is an uncomfortable thought too. It shows that perhaps some of the lack of reason it appears our politicians show might actually be more of a fear of losing power .
The apparent abandonment, or at least wariness of the Coalition towards implementing the next best thing, a legislative instrument giving some form of recognition to indigenous people, gives pause for thought and defies sense.
Why would the Coalition give bipartisan support for constitutional change, including recommending a bipartisan committee, but then apparently baulk at the opportunity for an Act of Recognition, a meek and mild form of acknowledging a truth? Why seek a preference of separate statements to the parliament when the question of a statement proved difficult for some in the party back in 2008? It just does not compute.
These are but two examples where logic and reason have been abandoned in Australian politics, both for similar but also divergent reasons. They are only two examples, others do exist and will continue to eventuate as a result of a number of factors, not the least of which are appealing to irrational fears and beliefs as well as a rampant desire, an uncontrollable lust for power and political dominance.
Newspoll and Mischievous Thoughts
The Prime Minister and her government have been enjoying some improvements to their poll fortunes in recent times. The Labor Party have been clawing back ground, at least as far as the Morgan, Nielsen and Newspoll results have shown. The Essential Poll on the other hand hovers at around the levels we have seen from that survey for some time now.
While it appears that the Newspoll is mischievous, bouncing like a kid on a pogo stick and now showing the ALP and the Coalition level-pegging, it appears that the electoral reality lies somewhere between Essential, Morgan and Nielsen where the real electoral prospects for the Labor Party seem to lie.
However, the improvement, while much less dramatic than Newspoll would have you believe, should be pause for some thought. In the Labor Party caucus room they would be pondering mostly positive thoughts. The belief that they are done for, while not dissipating at a rate of knots within the party room, would be receding slowly in the mind’s of some MP’s.
For the Liberal and National Party coalition thoughts would or at least should be turning to what they can do now, to how they can shift strategy to arrest the decline in their vote instead of having to play a game of catch-up.
But let’s for a moment, in the spirit of mischief, contemplate the options that might lie ahead for both the Labor Government and the Opposition. What would they be thinking? What scheming would be happening?
If the result really was level on a two-party preferred basis the ALP would be incredibly buoyant. They would feel that a win at the 2013 election was within reach. Labor Ministers and MP’s think that now in the wake of improving poll numbers, though that belief is still somewhat delusional. The election is far from being lost by the Liberal and National Party coalition.
The Liberal Party would be, if they had not already as a result of the declining numbers, be seriously questioning what might be going wrong. They would be looking at changing tack, changing strategy where their efforts on specific issues are losing traction.
The Coalition would also need to look at beginning to both refine and announce more aspects of their policy agenda. At the same time, they would need to continue to explain that the budget situation is tight. To not continue to further prosecute this case would result in one of the remaining areas of some strength for the Opposition falling away. To not continue talking about it would look like backing away from the validity of their arguments about the budget position.
In terms of leadership, there would be even further clear air for Julia Gillard. The Prime Minister would almost certainly be safe in the run-up to the 2013 election. To come back from the depths of despair, from record low votes, would cement Ms Gillard’s leadership position.
Kevin Rudd, already out of the leadership equation for the most part, would see his prospects for a return to Prime Minister, even in terms of the way his ego allows him to see things, almost completely vanish.
The third candidate idea too would practically cease being necessary.
Leadership of the Liberal Party would also be affected in some way by even poll results. Malcolm Turnbull would at least have distant sight of the leadership, especially if it was the case that the arguments against the carbon price continued to fall away.
Were poll results to actually reach the stage of being level it would be important that the Liberal Party had learned the lesson of Labor. That very public education in the perils of leadership transitions should have taught all political parties that a knee-jerk reaction to poor polling could have long-term negative consequences. There is a possibility though that this argument need only apply to a popular leader and Tony Abbott certainly cannot be characterised in that way.
In terms of going to an early election, ordinarily that would be on the table. However, with a minority government situation, supported by MP’s that want the parliament to go full-term, the chances of that outcome are almost non-existent.
Even if an early poll was a possibility, the decision to go to one would be fraught with danger. Electors could view a snap poll as a move of pure political expediency and therefore not take too kindly to the idea at all.
The polls are undoubtedly getting closer, but how close and how real the narrowing of margins is remains unclear. It is still on the naughty side to be talking of leadership change in the Opposition despite results being less assured. What is almost without doubt is the need for a shift in the focus of Coalition strategy.
Not the Asian Century White Paper
Tomorrow the Prime Minister will launch the Australia in the Asian Century White Paper. This document, which will plot a way forward for Australia in what is already considered to be the “Asian Century”. It will act as the government’s version of a SWOT analysis. The paper will examine the real internal strengths of Australia and external factors that lead that do contribute to our strengths as we continue to engage in the region. The paper will also look at our weaknesses in terms of trade in particular, but also security. The paper will look at the opportunities for Australia in the Asian century, with whom we can engage more to our benefit. Finally, the document will also look at the threats in the region.
In a way, the Asian Century White Paper is behind the times. Trade with Asia already makes up about 70% of Australia’s international trade. This makes it appear clear, as do public statements, that the blueprint is more about the rise of China and to a lesser extent India, than it is about looking at the strengths, weaknesses, opportunities and threats that exist in the Asia-Pacific area. As such, the possibilities of greater relations with the “Asian Tigers” and rapidly growing Asian economies will likely not receive much press.
This examination will look mostly at the bilateral activities Australia undertakes currently, could enhance or could begin to participate in and less at the specific domestic policy directions necessary to cope with living in a strong and prosperous Asia.
Undoubtedly, the Asian White Paper will say that China is the country, above all others to focus our energies on. You would be hard-pressed to find many who would say otherwise. We need China and they need us. Our commodities are prized by China and we source cheap goods from the Asian powerhouse, now the second biggest economy in the world after overtaking struggling Japan. To this end, concluding Free Trade Agreement negotiations with China is an absolute must.
Some will have you believe that China also serves as one of the great uncertainties of the Asian Century. “Reds under the beds” is not a worry that should be occupying the mind’s of our people. China’s continued growth will almost certainly be one of peaceful empire. Their growth is because of the embrace of market economics and China is communist in name and some aspects of internal behaviour only. The military build-up in China is entirely consistent with the growth of the country as a world power and countries like the United States of America have nothing to fear except for loss of economic dominance. 
In terms of Japan, our second largest trading partner, the future of the economic relationship at least is not as certain. The economy of Japan has been battered by high levels of debt, natural disasters and unstable economic leadership. In saying this though, the relationship with the nation of islands should be maintained with caution and buttressed by increasing economic cooperation with other nations in the region. However, it is in our interests to continue to proceed with free trade negotiations with the Japanese.
Trade relations with South Korea continue to be strong with the nation, as of 2011, being our 3rd biggest export market. We have commenced Free Trade Agreement negotiations with Korea, but the discussions have hit the final hurdle. The agreement was supposed to have been concluded by now, but negotiations are ongoing.
Our next biggest market, is also our second biggest opportunity as the growth of Asian economies explodes. That nation is India. This is a nation with economic growth to rival that of China. While India is not in a position to rival China in terms of the size of her economy, India does provide opportunities. This includes, somewhat contentiously, uranium exports which are now being negotiated and also the restoration of Indian confidence in Australia’s safety for the large overseas student and tourism market the nation of the subcontinent can and has provided. Finalising the Australia-India Comprehensive Economic Agreement is also a necessary step in continuing to open up India to Australia and vice versa.
There are other nations of Asia in the list of our top 10 training partners too. In fact, Asian countries make up more than half of those nations. Also in the top 10 is Taiwan, Singapore and Thailand. With both Singapore and Thailand we have established Free Trade Agreements. However, in the case of Taiwan, there is no economic agreement being negotiated, awaiting approval or in force. Perhaps an opportunity lies there, perhaps we are frightened to pursue one for fear of causing China offense or perhaps our priorities are not mutual.
There are also other Asian states that are outside of the 10 biggest Australian trading partners with which we have already or are in the process of negotiating or approving FTA’s. There is an ASEAN-Australia-New Zealand Free Trade Agreement which includes Brunei, Myanmar, Cambodia, Indonesia, Laos, Malaysia, Singapore, the Philippines, Thailand and Vietnam. This includes nations such as Singapore, Thailand, Indonesia and Malaysia with whom we either have individual FTA’s or are in the process of either negotiating or seeking domestic approval for.
In a broad sense, continuing to pursue the recently commenced negotiations over the Trans-Pacific Partnership Agreement is also a must and will only enhance economic relations with both Asia and other parts of the world.
So in terms of economic cooperation in the Asian region and into the Asian century, the task is not really to establish new markets, but rather to consolidate and build upon those already available to Australia. In the case of the services sector in particular the task is returning it to the vitality we know. Particularly in the case of tourism this will be a lot easier when the price of the dollar lowers and economies recover.
In terms of economic engagement with Asia and the focus that it is given, it is a positive but has the potential to be a negative from time to time. Putting too many eggs in the Asian basket might expose us to regional shocks. So far, with the economic activities we undertake in Asia though, we have managed to avoid major damage to our economy when other countries in the Asia-Pacific have not been spared. But the possibility of exposure to risks should still be in the front of the mind’s of our policy-makers.
New Zealand and the other Pacific Island nations must also factor into the Asian equation. They are as much a part of Asia as we are. New Zealand is our greatest ally in the Asia-Pacific region, a long-term friend and economic partner and we will continue to share and grow our economic relationship and broader bilateral relations with her.
In terms of security, the most volatile place in the Asian region, the place that has the potential to most impact on our security, is Indonesia. Enhancing current cooperation with Indonesia on counter-terrorism efforts is a must. However, this must not be at the expense of combating homegrown terrorism on Australian soil.
It is certain that we will be seen to be deeply connected with the USA . We can, will and should make clear that our actions in the region will be peaceful and aimed at trade and our ongoing security, rather than offensive actions and manoeuvres that constitute a threat.
In terms of China, as stated earlier, it has been quite easy for some to classify the economic growth and consequential militarisation of China as a threat. This eventuality though, as stated before, appears hard to fathom. On the other hand, disputes involving China and her nearer neighbours, currently festering, do have the potential to develop into problems for those nations. By and large, these are conflicts Australia can remain independent of.
With regard to people movements, Indonesia as well as Sri Lanka and Malaysia will remain central to our efforts in cutting down on irregular people movement. We would be foolish to ever imagine that we as a country or even the wider Asian region could solve the complex issue that is asylum seeker movements.
Later on in the Asian century it is also reasonable to keep in mind the potentially significant movement of people in our region brought about by climate change. The scale of this is hard to calculate, but the prospect must be factored into equations. Australia as a rich and prosperous country would be expected to take up the majority of the resettlement burden in such circumstances.
Overwhelmingly the opportunities for Australia in the Asian Century are good. The positives far outweigh the negatives. We must however be careful of too much dependence on the region and too much nation specific interaction within the Asia-Pacific.
We must think, for the century ahead, well beyond commodities and to sources of renewable energy. An ongoing and healthy services sector is also a must as resources begin to diminish.
There is the possibility of regional instability, but much of that should not have consequences for Australia. The major threat will continue to be terrorism with hatred fomented and potential non-state actors trained in Indonesian camps in particular.
We will be seen as one of America’s deputies in the Asia-Pacific, along with South Korea and Japan as well as New Zealand to some extent. In reality though, this should not colour the way we interact in our geographical region nor the way in which our peaceful advances are received.
People movement will continue to be something Australia experiences for as long as there is security and economic concerns in nations around the world. Later in the century this will probably be exacerbated by climate change, particularly in the low-lying areas of the Asia-Pacific.
Australia must not be happy with the status quo. Moving towards greater engagement and cooperation not just in Asia, but the world, is the answer to making the most of the opportunities and the threats that we and the region already experience and may encounter in the future.
Not So Taxing Times
The Minerals Resource Rent Tax has commenced and it’s causing problems for the Gillard Government, including in particular, the Treasurer. What most people would not have expected is the way in which it is causing trouble for Wayne Swan. Instead of having to defend a huge tax grab, the Treasurer today was forced to respond to reports in newspaper The Australian that the MRRT failed to raise any revenue in it’s first quarter of operation. This is a circumstance few would have seen coming, though tumbling commodity prices should have provided somewhat of a warning to the pundits.
You see, the Minerals Resource Rent Tax, the renegotiated version of Kevin Rudd’s Resource Super Profits Tax was designed in an interesting way. Even though the name was changed, the new iteration was still a tax on profits. Therefore, when profits were high, the tax would be paid and when they were low, it would not.
Budget papers, released earlier this week in the Mid-Year Economic and Fiscal Outlook showed that the government believed the tax would still raise $2 billion this financial year.
A failure to clearly sell the way the tax works is the main reason that the response today was as it was. Too little time was spent saying that the tax would not raise revenue in bad times, but would in good times.
It is also a failure of design. If the ALP wanted to be sure of revenue then pegging the new tax to profits as they did was not the way to achieve a certain stream of revenue, especially one so easily impacted by poor commodity prices. To make matters worse, the new mining tax is not to prop up revenues with proceeds put away for future benefits. No, the tax revenue raised was to pay for promises made by Labor.
Clearly the turn of events this week, including the broader revenue shortfalls announced as part of MYEFO, make the prospects of returning to surplus extremely unlikely. Commodity prices for one would have to not just get back to where they were, but likely higher to make up for the time when the price was below expectations. Those prices could yet stay low for some time.
But the tough week, more accurately the tough day today did not end there for Mr Swan.
Speaking to reporters in Brisbane today, Treasurer Wayne Swan twice made a mistake when saying how much revenue the Minerals Resource Rent Tax would provide to the budget bottom line. Twice the Treasurer said that the tax would make $9 billion this financial year.
Actually, the resource rent tax is set to make $9 billion, not over the first year, but over the forward estimates, the next four financial years. It was a case of third time lucky for Mr Swan.
Ordinarily a simple gaffe like that does not mean much. It happens to politicians from time to time. However,for a Treasurer battling for a surplus and not having the numbers add up, it adds to a perception of confusion and uncertainty on the part of Wayne Swan and the Gillard Government.
The Opposition of course were crowing, enjoying a day where again, the Treasurer has been squirming over economic issues. But the celebration should also have been a tad on the difficult side for them too. The tax raised no revenue, so it was not doing the damage to the economy and businesses that the Coalition had warned about.
Federal Labor are seeing any remaining hope they had of returning the budget to surplus, which was delusional in the first place, evaporating before their very eyes.
But it is not the surplus the ALP should be most worried about the most. It is a worry, but the least of them. What they should be worried about the most is how much they might have to borrow to pay for the spending promises associated with this new tax of theirs.
A Mandatory Minimum Prison Sentence and Other Asylum Seeker Policies
Asylum seekers and refugees are never far from the headlines. Indeed from time to time stories involving them are among the most prominent in the news cycle. In recent times, boat arrivals of people seeking asylum have been more than weekly. The debate about what to do about the perilous journey, from Indonesia, Malaysia and Sri Lanka has been up there with the most politicised and most discussed issues of this 43rd parliament.
We have a new policy, a return to most aspects of the Pacific Solution that the Gillard Government continues to work towards implementing. This calls for offshore processing on Nauru and Manus Island as happened under the Howard Government.
The Gillard Government has or is working toward implementing all of the recommendations of the expert panel on asylum seekers which was chaired by former Chief of the Australian Defence Force, Angus Houston. However, the Coalition want more.
The Opposition, through leader Tony Abbott and Shadow Minister for Immigration Scott Morrison have continued to call for the reintroduction of Temporary Protection Visas (TPV’s). The Coalition have also called for a return to that policy that Indonesia do not like and will never allow to happen- turning back asylum seeker boats toward Indonesia.
In the case of TPV’s, the Labor Party, as part of the recommendations from the Houston panel are, in effect, implementing an iteration of the Howard Government measure which will cut out family reunion.
But of course, and rightly so, the ALP Government is against turning back the boats This is the case, one, because the ADF sees it as no longer feasible or safe and two, because Indonesia would voice their anger and discontent at our contempt for our regional neighbour.
But it is the evolution of the asylum seeker policy of the Tony Abbott led Opposition, apart from the already announced measures, that will add to the poor treatment of people seeking asylum in Australia who arrive by boat.
Last Friday the Opposition Leader announced an effective minimum prison sentence for the “offence” of seeking asylum, seeking refuge from the fear of, or from actual persecution. The no advantage test, part too of the recommendations of the expert panel, has so far not had a time in offshore detention applied to it. But Tony Abbott and the Liberal Party think it should be no less than 5 years. In the legal fraternity this would be termed a mandatory minimum sentencing provision.
Of course, since mandatory detention was introduced in the early 1990’s, we have had what amounts to a term in prison. At first, a time limit of less than a year was implemented by the Keating Government, but that was removed in favour of an indefinite stay. In effect, the indefinite nature of asylum detention will continue under a Liberal Government with a 5 year minimum stay. The time served would almost certainly be longer.
In further worrying comments, the Opposition also appeared to question the efficacy of a regional solution, saying that too much time was spent on discussing the problem in the region and not enough on tough deterrence measures.
Also of concern in the comments made at the end of last week was what appeared to be utter contempt for the work of the UNHCR, the United Nations’ asylum seeker and refugee organisation. Australia has long appeared to feel this way towards the UN about asylum seekers and refugees. However, that would seemingly accelerate under an Abbott Government.
The Coalition is obviously moving towards an aim of being the most punitive in Australia’s history toward asylum seekers and refugees. At the moment that is just rhetoric, but there is a strong chance that the strong words will become punishing deeds in government, also a strong possibility.
Far from just showing a desire to put forward the strictest regime for asylum seekers, the Abbott-led Opposition appear hell-bent on isolating Australia further from the way the region and the international community should deal with the asylum seeker question.
All this punishment and pain for what gain? Seeking asylum is not a crime, thought it appears there is a wish that it was. Either way, asylum seekers are going to be locked away for at least 5 years under a Coalition Government.
The Stupid, the Strange and the Sensible in Search of a Surplus
The Gillard Government’s Mid-Year Economic and Fiscal Outlook, or MYEFO for the acronym loving political wonks, is now out. The record continues to struggle, a fact not lost on many, even the most casual of observers. After some time discussing personalities, yesterday the discourse turned to discussing economics and the economy, a welcome shift. Wayne Swan’s budget hopes were always, at the very least optimistic and at the most fanciful when he brought down in May what he believed was the first of four budget surpluses.
Revenue and tax receipts have continued to decimate the federal budget in the wake of the Global Financial Crisis and as a result of the continuing shocks in Europe and the US in particular.
The May budget revealed a small budget surplus of $1.5 billion and that has already, in four months fallen by the wayside with the prediction of the final budget surplus downgraded to just $1.1 billion in the MYEFO update from Monday. Falling commodity prices and ongoing poor tax receipts were the chief factors blamed for the below expectation forecast.
Tax revenue over the forward estimates also points to an ongoing challenge for the budget, with expectations for the current financial year $4 billion down and over that entire period, down $22 billion.
Of course new spending will also be a major problem for the budget bottom-line and that still, despite improving poll numbers, seems like it will become the Coalition’s problem from 2013. But of course that will be tempered by widespread cuts in a variety of areas. This appears likely to include some areas of spending with bipartisan support, with rhetoric from the Opposition around the NDIS particularly troubling.
As there always is with budget cuts and payment increases, there has been much debate over the past 24 hours about the main measures employed by Treasurer Wayne Swan in an attempt to complete his budget mission. Overall, MYEFO revealed $16 billion in spending cuts and extra charges.
The main features of so-called ‘mini-budget’ were limits to the private health insurance rebate, increased visa application fees, changes to the baby bonus, a delay in funding for trades training centres and changes to how businesses pay tax.
In terms of political stupidity, cutting the Baby Bonus for a second and subsequent children wins the prize. The changes simply will not be widely liked and will quite easily be fed into the ongoing cost of living debate.
However, it is an entirely sensible decision economically to change the size of the payment made to families choosing to have more than one child. This payment is merely meant to assist with the initial costs of raising children and in no way makes a dent, nor should it, in the long-term costs of raising a child.
The government’s decision to dramatically increase the price of visa application fees, including the Working Holiday Visa, is one of the most ridiculous decisions taken in the Mid-Year Economic and Fiscal Outlook. Tourism is a very important part of our economy and has been hit by natural disasters in the north and more broadly by the GFC and continuing trouble in Europe and the US. Add the high dollar to the equation and the Gillard Government looks quite stupid in choosing to increase prices in this area.
Another odd decision for the Gillard Government to make is to delay funding for trades training centres. Delaying funding for their baby, replacing John Howard’s iteration, will look stupid to and hurt some of their constituency, at least in the short-term. The Labor Party making these cuts to their own program also effectively blunt their own attacks on the Liberal Party over cutting funding to this program.
The ALP has also, unsurprisingly, decided to give big business a bit of a whack, though this time, it’s not just the big miners, but businesses earning over a billion dollars in general. Changes to how companies pay tax, from quarterly to monthly installments will raise $8.3 billion dollars in revenue for the government. The overall effect on individual businesses is as yet unclear but the extra impost and timing of it will certainly have some effects.
Increases to the private health insurance rebate will now be limited to inflation. It is possible that some of those on low incomes who might choose to enter the private health insurance market at the lower end could be discouraged, though the punitive measures already in place will probably cut the chances of that down.
We have a bit of a mixed bag from a government in an almost vain search for a surplus. There have been some stupid decisions and there are some sensible ones in MYEFO. The sensible ones though, especially in the case of the baby bonus payment, will quite likely be seen by many as the exact opposite, dumb ones by the broader public. The unpredictability of some of the measures is also met with the predictability of others.
The only question left is will this budget update hold up to scrutiny? There will be attacks on and questioning of it and the Labor Government from various quarters. The political pain that will seemingly be felt still seems unlikely to be quelled by a surplus.
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