The links below are to articles reporting on persecution news from Eritrea (the most recent are at the top).
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The chairman of the Australian Competition and Consumer Commission (ACCC), Rod Sims, holds out the prospect of an absolute fall in electricity bills over coming years – but says this will require focusing centrally on affordability, not just reliability and sustainability.
In its Retail Electricity Pricing Inquiry preliminary report into the electricity market, released on Monday, the ACCC says residential electricity prices have increased by 63% on top of inflation in the last decade, with network costs being the major contributor.
Household bills rose by nearly 44%, from an average of A$,1177 in 2007-08 to $1,691 in 2016-17.
Household bills have risen less than electricity prices because usage has fallen, mainly due to self-supply by solar panels.
The report comes as cabinet is set to consider on Monday the government’s energy policy, which it hopes to take to the Coalition partyroom on Tuesday. Energy Minister Josh Frydenberg last week signalled the government had moved away from the Finkel inquiry’s recommendation for a clean energy target.
Facing the prospect of a shortage of power in the period ahead, the government is particularly focused on the need to increase dispatchable power.
The clean energy target, even in modified form, is also unpopular in Coalition ranks.
The ACCC report indicates that supporting renewable energy has been a relatively minor driver of the spiking of prices.
Sims – who flagged the ACCC findings when he addressed the National Press Club recently – says affordability should be the “dominant” objective in policy but in recent years it has come after several other objectives – including reliability, dividends and sustainability.
He said different approaches were needed to pursue each of the objectives of affordability, reliability and sustainability. As reliability and sustainability were pursued, it was important to do it in “the least-cost way and to let people know the costs”.
“What’s clear from our report is that price increases over the past ten years are putting Australian businesses and consumers under unacceptable pressure,” he said.
The ACCC found that on average across the national electricity market (which does not include Western Australia or the Northern Territory), a 2015-16 residential bill was $1,524, excluding GST. This was made up of network costs (48%), wholesale costs (22%), environmental costs (7%), retail and other costs (16%) and retail margins (8%).
Sims said the primacy of network costs in rising bills was not widely recognised.
Since July 2016, retail price rises were likely to be driven by higher wholesale prices.
“We estimate that higher wholesale costs during 2016-17 contributed to a $167 increase in bills. The wholesale (generation) market is highly concentrated and this is likely to be contributing to higher wholesale electricity prices.”
The ACCC estimates that in 2016-17 South Australia had the highest residential electricity prices, followed by Queensland, then Victoria and New South Wales. SA prices were roughly double those in Europe.
Sims said measures the government had already taken – notably telling companies to make customers aware of better deals, and its plan to scrap the process allowing companies to appeal against decisions of the Australian Energy Regulator – would help lower prices.
The ACCC is now looking in detail at further measures, ahead of making a final report. In the meantime, its preliminary report puts forward some suggestions. These include the states reviewing concessions policy to ensure consumers know their entitlements and concessions are well targeted to the needy, and a tougher stand against market breaches.
It says increased generation capacity (particularly from non-vertically integrated generators), preventing further consolidation of existing generation assets, and lowering gas prices could help reduce the pressure on bills.
The ACCC will also look at how to mitigate the effect of past investment decisions – but it notes that many are “locked in” and will continue to burden users for many years.
It will as well consider what more can be done to make it easier for consumers to switch suppliers.
The report says that “an increasing number of consumers are reporting difficulties meeting their electricity costs, and some consumers have been forced to minimise their spending on other essential services, including food and health services, to afford electricity bills.
“Businesses across all sectors have faced even higher increases over the past 12 months, following renegotiation of long term contracts. Many of these businesses cannot pass the increased costs on and are considering reducing staff or relocating overseas. Some businesses have even been forced to close.”
The ACCC’s final report will be released in June next year.
The Coalition is trailing in its 21st consecutive Newspoll, with Labor maintaining its two-party lead of 54-46% and Malcolm Turnbull suffering a setback in his personal ratings.
As parliament resumes, with the energy issue preoccupying cabinet and the government nervously waiting on the High Court’s citizenship decisions, Turnbull’s lead over Bill Shorten as better prime minister narrowed to 41-33%, a margin of eight points, compared with 11 three weeks ago (42-31%).
Turnbull’s net satisfaction in the poll, published in Monday’s Australian, worsened from minus 17 points to minus 24 points. Shorten’s rating also worsened, from minus 20 to minus 22.
The run-up to the poll was marked by Tony Abbott’s controversial speech on climate change, delivered in London. It also saw further public uncertainty over the government’s yet-to-be-announced policy on energy, which cabinet is expected to consider on Monday.
Last week, the government effectively dumped any prospect of bringing in a clean energy target, which kills the chance of any bipartisanship. Opposition spokesman Mark Butler on Sunday told the ABC that if Turnbull walked away from a clean energy target “he won’t get the support of the Labor Party”.
When he challenged Abbott in 2015, Turnbull pointed to the Coalition being behind in 30 Newspolls in a row. His government is now more than two-thirds of the way to that benchmark.
Labor’s primary vote fell one point to 37%, while the Coalition was steady on 36%. One Nation rose one point to 9%; the Greens rose one point to 10%; and support for “others” fell from 9% to 8%.
The poll of 1,583 voters was done from Thursday to Sunday.
In parliament, the government this week will press its efforts to lower the company tax rate for larger enterprises. A deal with Nick Xenophon earlier this year saw the passage of the tax plan reductions for companies with a turnover of up to A$50 million annually. But the government has not been able to win support for the cuts proposed for big business. It is the cuts for the large companies which have the more significant economic impact.
Xenophon on Sunday night reiterated his Nick Xenophon Team (NXT) would not support the cuts. “We’ve ruled it out. Our position won’t change,” he said.
The ten-year tax plan was a centrepiece of the Coalition’s 2016 election policy.
The Business Council of Australia (BCA) has stepped up its lobbying for the cuts, with a booklet titled “Why Australia needs a competitive company tax rate”.
The BCA says Australia’s top company tax rate of 30% is the fifth-highest in the OECD and could soon be the third-highest. The average company rate across the OECD is 24%, while in Asia the average is 21%.
The UK has plans to cut its federal rate from 35% to 20% and the UK has legislated to go from 19% to 17%, the BCA points out.
BCA chief executive Jennifer Westacott said the “global action should be a wake up call for the Senate that Australia cannot afford to stand still, since every company tax reduction overseas is a de-facto tax increase on Australia”.
Westacott said parliament’s decision in March to restrict the tax cut to businesses with a turnover up to $50 million per year “leaves the job half done and our economy at risk as other countries become more competitive in the global race for investment.
“Those who attack the case for company tax cuts have no alternative credible plan to get investment growing strongly again,” she said.
The government is also battling to get the numbers to pass its higher education package. On this Xenophon said the NXT had serious reservations “but we’re still talking to the government”.
Xenophon is one of those MPs whose citizenship status is before the High Court, but he plans to leave federal politics even if the court decision goes in his favour (although he hasn’t said exactly when). He intends to lead his SA-BEST party at next year’s South Australian election.
The government has two ministers – Barnaby Joyce, the deputy prime minister, and Fiona Nash, the Nationals’ deputy – before the High Court, as well as former minister Matt Canavan, who quit the frontbench when the question of his constitutional eligibility for parliament arose.
The High Court is expected to make its decisions on the seven citizenship cases quickly.
The federal government’s return to a budgetary surplus by 2020/21 will mainly be due to a projected increase in personal income tax revenue, according to a report from the Parliamentary Budget Office (PBO).
The PBO modelling shows that people in the middle of the income spectrum will bear the brunt of this, due to bracket creep. This occurs when tax thresholds (including the tax free threshold) stay constant while income grows due to inflation.
But the PBO modelling includes assumptions about inflation and wages growth that do not bear a resemblance to what is happening in the economy. Both inflation and wages growth have been depressed for some time, and there’s little reason to believe there will be a sudden increase.
The fundamental assumption driving the PBO projections is nominal (not adjusted for inflation) income growth of between 4% and 5%. This consistutes 2% to 2.5% annual inflation and 2.5% to 3% percent annual increase in real income.
The difference between nominal and real incomes is important as it is increases in real income (adjusted for inflation) that result in higher standards of living. But taxes are levied on our nominal incomes, regardless of inflation. Because of this difference, bracket creep means that real incomes after tax (otherwise known as disposable income) will actually fall.
What the PBO report projects
To calculate how much tax we will be paying in the future, the PBO first makes assumptions about inflation and real earnings growth and uses these to project individual incomes. Current income tax rates are then applied to these projected incomes, and the increased amount paid by each individual is added together.
According to the PBO’s modelling, the average individual tax rate will increase by 2.3% from 2017–18 to 2021–22. And every income group will see their tax rates increase over this period.
The largest tax increase is expected for individuals in the middle incomes, who have an average taxable of A$46,000 in 2017/18. This group are projected to face an increase in their average tax rate of 3.2% by 2021–22. Their average tax rate is expected to increase from 14.9% to 18.2%.
Meanwhile, those in the second lowest and two highest income quintiles are expected to see their average tax rate rise between 1.9% and 2.5%. The average tax rate for individuals in the lowest income group is projected to rise by only 0.2%, as most of their income remains below the tax free threshold.
The increases in average tax rates are even greater if a comparison is made with 2016/17, the latest year for which individuals have been paying tax. As you can see in the previous chart, when compared to 2016/17, individuals in the middle income quintile will see their average tax rate rise by 3.8%.
As you can see, the largest burden of the tax brack creep will fall on “average Australians”. This is because they will see their nominal (before adjusting for inflation) incomes rise. Typically, the lowest income earners do not earn enough to get above the tax free threshold and the highest income earners already pay a large portion of their tax at the top marginal rates.
Because of increasing inflation and wage growth, the Parliamentary Budget Office projects that even the lowest income earners will be liable to pay income tax by 2019/20.
The 2% to 2.5% inflation assumed in PBO’s forecast is in the mid-point of the Reserve Bank’s target range of 2% to 3%, so this is not entirely unreasonable assumption.
But both PBO’s inflation and wage growth (2.5% to 3%) assumptions are currently way above the levels seen in the economy. According to the ABS annual inflation currently stands at just 1.8%, and the earnings of all Australian employees is growing at 1.6% per annum.
The reasons for persistent low inflation, not just in Australia but in most other industrialised countries, are not well understood or agreed upon.
And a number of theories have been put forward to explain low real wage growth including, the degree of underemployment, reduced job security, declining bargaining power of unions and increased potential competition, either from advances in technology or from international competition.
But regardless of the reasons for the persistently laggard growth in wages and inflation, there are also no signs that these rates will rise significantly any time soon, let alone to the levels assumed by the PBO.
Given the information contained in the PBO report we can’t calculate exactly what the impact of these tax increases will be for individuals.
However, it is clear that if the current wage and price conditions persist the actual tax revenue will fall way short of the projected figures for all years up to and including 2021/22 and make a Budget balance even further off.
We can also make some extrapolations based on averages. As a simple example, consider someone on an annual income of A$84,000 in 2017/18 (which is around the current average earnings in Australia). Under the assumption that nominal incomes increase by only 2% per year, the tax paid (including Medicare levy) in 2020/21 would be A$23,158.
However, if you compare this to nominal income growth of 5% (which is what the PBO assumes) the tax paid would be A$26,357 in 2020/21.
That is, tax collected from this individual would be 12% less under a low growth scenario than under the PBO’s more optimistic scenario. In the years 2018/19 and 2019/20 the tax collected would be respectively 4% and 8% less. This illustrates how precarious the projection of a balanced Budget in 2020/21 is.
Whatever the outcome, it is for certain that income earners will see any nominal increases eroded not just by inflation, but also through bracket creep.
The links below are to articles reporting on persecution news from China (the most recent are at the top).
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The links below are to articles reporting on persecution news from Cambodia, Vietnam and the Philippines, particularly in reference to Montagnard Christians (the most recent are at the top).
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The links below are to articles reporting on persecution news from Malaysia (the most recent are at the top).
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A NSW ReachTEL poll for Fairfax media, conducted 5 October from a sample of 1650, gave the Coalition a 52-48 lead by preference flows at the 2015 election, a 3 point gain for Labor since a Channel 7 ReachTEL poll, conducted just after Mike Baird’s resignation as Premier in January. With 8.1% undecided excluded, primary votes in this ReachTEL were 40.9% Coalition (down 1.8), 33.7% Labor (up 5.7), 9.9% Greens (up 1.5), 8.9% One Nation (down 7.4) and 2.4% Shooters, Fishers and Farmers. NSW uses optional preferential voting.
Premier Gladys Berejiklian held a 52.1-47.9 lead over opposition leader Luke Foley in ReachTEL’s forced choice better Premier question, which tends to favour opposition leaders over polls that have an undecided option.
The January poll was taken when One Nation was at its peak, both nationally and in state polls, and that poll had One Nation at a record for any NSW poll. As One Nation’s right-wing economic views have become better known, it appears that much of their working-class support has returned to Labor.
In Queensland, One Nation’s support in a recent ReachTEL was 18.1% including undecided voters. Queensland Premier Annastacia Palaszczuk’s support for the Adani coal mine does not distinguish Labor from the LNP. If the two major parties are seen as similar, anti-establishment parties can thrive.
At the recent NZ and UK elections, the total major party vote increased substantially. I believe this increase occurred at least partly because the major NZ and UK parties had very different policies, and anti-establishment parties were denied the “this mob is the same as the other mob” line. In contrast, the major parties were in coalition before the German election, and both slumped badly, with the far-right AfD winning 12.6%.
NSW state by-elections: Nats hold seats despite big swings against
Yesterday, by-elections occurred in the NSW National-held seats of Murray and Cootamundra, and in Labor-held Blacktown; all three seats were easily won by the incumbent party at the 2015 election. The Liberals did not contest Blacktown.
In Murray, Shooters candidate Helen Dalton stood as an Independent at the 2015 state election. The Nationals won by 53.5-46.5, a 19.2 point swing to Dalton since 2015. Primary votes were 40.5% Nationals (down 15.0), 31.4% Dalton (up 13.2) and 21.0% Labor (up 4.8).
In Cootamundra, the Nationals won by 60.1-39.9 vs Labor, a 10.3 point swing to Labor. Primary votes were 46.0% Nationals (down 19.9), 24.2% Labor (down 1.8) and 23.5% Shooters, who did not stand in 2015.
With no Liberal in Blacktown, Labor romped to 68.9% of the primary vote (up 15.0). The Christian Democrats were a distant second with 17.7% and the Greens won 8.8%.
These results do not yet include postal votes, which are likely to favour the Nationals. Further pre-poll votes in Murray and Cootamundra also remain to be counted.
Galaxy poll in SA seat of Hartley: Xenophon leads Liberals 53-47, but ReachTEL has a 50-50 tie
Nick Xenophon has announced he will leave the Senate after the High Court’s ruling on whether current members are eligible has been delivered. Xenophon will contest the SA state Liberal-held seat of Hartley at the March 2018 election. A Galaxy robopoll in Hartley, from a sample of 516, had Xenophon leading the Liberals by 53-47, from primary votes of 38% Liberal, 35% Xenophon, 17% Labor, 6% Greens and 3% Conservatives.
However, a ReachTEL poll for Channel 7 had a 50-50 tie, from primary votes of 36.7% Liberal, 21.7% Xenophon and 19.7% Labor. The primary votes probably include an undecided component of a little under 10%; these people can be pushed to say who they lean to. It is likely leaners strongly favoured Xenophon, as the Liberals would lead on the primary votes provided.
The Galaxy poll is encouraging for Xenophon, but the ReachTEL poll is more sobering. Labor will target Xenophon during the campaign over votes he has taken in the Senate that have helped the Coalition pass its legislation. Currently, only those who follow politics closely are aware of these votes, but Labor’s campaign is likely to increase this awareness. Such a campaign could undermine Xenophon’s support among centre-left voters.
Essential state polling: July to September
Essential has released July to September quarterly polling for all mainland states, by month for the eastern seaboard states. In September, the Coalition led by 51-49 in NSW, unchanged on August. In Victoria, Labor led by 54-46, a 2 point gain for Labor since August. In WA, Labor led by 54-46 for July to September, a 1 point gain for the Coalition.
In Queensland, Labor led by 53-47 in September, a 2 point gain for the LNP since August. Primary votes were 35% Labor, 35% LNP, 13% One Nation and 10% Greens. By splitting One Nation and Others preferences evenly, Essential is likely to be overestimating Labor’s two party vote.
In SA, Labor led by an unchanged 52-48 in July to September. Primary votes were 37% Labor, 30% Liberal, 18% Nick Xenophon Team and 6% Greens. If these hard-to-believe primary votes are correct, Labor is far further ahead than 52-48. The NXT won 21.3% in SA at the 2016 Federal election.
Essential’s state polling was not good at any of the Victorian 2014, Queensland 2015 or NSW 2015 state elections.
US President Donald Trump’s decision on Friday to decertify the Iran nuclear deal threatens the future of the landmark agreement, creates greater instability in the Middle East, and weakens America’s position in the wider global order.
Why is the agreement important?
Adopted in October 2015, the agreement was the culmination of 20 months of intense negotiations between Iran and a US-led coalition made up of the UN Security Council P5 nations (the US, the UK, Russia, France and China) as well as Germany. It significantly limited Iran’s capacity to enrich uranium and achieve a domestic nuclear weapons capability.
In exchange, a range of longstanding US and EU economic sanctions were removed against Iran. This allowed access to wider export markets for its beleaguered oil industry and permitted greater amounts of external investment – particularly from interested parties in Europe and China.
Iran was permitted to retain a civilian nuclear program for power and medical purposes. However, this was subjected to regular checks by international inspectors to ensure no nefarious activities were taking place.
Further reading: Why now? Understanding the Iranian nuclear breakthrough
The US president is required to certify that Iran is complying with the agreement every 90 days. If non-compliance is detected, the president’s decertification begins a congressional process that can end with the reimposition of sanctions.
Many saw the agreement as a significant and positive foreign policy legacy for former president Barack Obama. It was a rare achievement for an administration that largely fumbled in its approach to the Middle East.
Consternation over Trump’s inability to effectively handle the Iran deal began long before he was sworn in as president. On the campaign trail, Trump described it as a “disaster” and “the worst deal ever negotiated” without clearly stating why.
As president, Trump has sullenly recertified the agreement twice. But he always indicated he wanted to assume a more hostile stance toward Iran.
While taking a harder line toward Iran is hardly a desire Trump holds alone among Republicans, he has offered little coherent vision on an alternative. Aside from vague threats of violence and suggestions he could “renegotiate” the agreement, Trump has provided little in the way of viable policy options.
In the case of the former, short of regime change, this would only lead to a more hostile Iran and a greater probability of nuclearisation – just as it did in similar circumstances during the Bush years.
For the latter, Trump is unlikely to be able to mobilise the necessary partners to return to the negotiating table. Nor could he entice an antagonised Iran to trust future US commitments after it feels the US has once again duped it.
The ‘spirit’ of the deal
Trump’s justification for decertification stems from his view that Iran is violating the deal’s “spirit”. This is despite other partners in the negotiations, and his own advisers, indicating that Iran remains compliant with the agreement.
Trump cites Iran’s support for militia groups like Hezbollah in Lebanon and the Houthis in Yemen, as well as its ongoing ballistic missile program and backing of Syria’s Assad regime, as a dereliction of its commitment to the deal.
The problem with this logic is two-fold and interrelated.
First, none of these activities are included in the nuclear agreement. While they are certainly challenges to be responded to with a combination of carrots and sticks, the deal was never designed or intended to resolve them.
Second, Trump seems to expect that the agreement should act as a panacea to the wider challenge of Iran for the US. This attitude ignores the complex, slow and ongoing nature of adversarial diplomacy.
Normalising Iran within the international system – the ultimate goal of US engagement – is a process that will likely take decades. In this endeavour, an all-or-nothing attitude only serves to weaken Washington’s position in any ongoing delicate negotiations, where both parties need to walk away with some sense of accomplishment, dignity and confidence in their partners.
Obama was starkly aware of such realities. He knew that while he might not be able to curtail all of Iran’s regionally destabilising activities, discussions on the nuclear issue in isolation could offer a path forward.
The decertification also reinforces Trump’s disdain for multilateralism as a key tool for promoting US interests and resolving international problems.
Not only does Trump’s decision incense America’s partners in the deal, it also joins a long list of multilateral frameworks, alliances and agreements he has either abdicated, threatened or weakened. These include the Trans-Pacific Partnership, the North America Free Trade Agreement, the Paris climate accord, and NATO.
US participation and leadership in these institutions directly serves its own international interests: it helps it shape the norms and standards by which other countries engage in the global arena.
But, by undermining these same structures through such non-consultative and unilateral actions, the US disincentivises other countries from adhering to the rules-based international architecture it has sought to sculpt since 1945.
This has direct relevance for normalising Iran’s behaviour. It has viewed the international system as arrayed against it since at least the Iran-Iraq War in the 1980s.
Under such conditions, getting Iran to embrace a less revisionist and disruptive approach to foreign policy through socialisation and co-operation will hardly be helped by undermining a key structure of rapprochement.
At a wider level, such unilateralism harms US relations with its more traditional allies, which view it as a less reliable and predictable partner.
Trump’s transactional worldview may put little stock in national prestige. But such qualities can be just are crucial to the long-term diplomatic relationships of international affairs as short-term material concerns.
Should the US wish to maintain its global primacy, it cannot simply devolve into a bully power and expect others to remain in lock-step with its goals. While most US presidents have seemed to grasp this concept to varying degrees, it seems wholly beyond Trump’s neophytic views on grand strategy in foreign affairs.