With August 4th looming as the earliest possible date for an election of the full House of Representatives and half the Senate, the founder of the now-defunct Palmer United Party and former MP, Clive Palmer, has flagged his intention to run again. The new incarnation of the Palmer tilt will be the “United Australia Party”, which was also the name of the predecessor to the modern Liberal party.
Presumably in a bid to hitch himself to Donald Trump-style populism in the United States, Palmer’s early election advertising signals his desire to “Make Australia Great”.
Billboards featuring Palmer, his new party name and the slogan are popping up all over Australia.
Palmer’s re-emergence seems somewhat ludicrous given the disasters that befell his former party following the 2013 election that saw him and three senators elected. For those who have forgotten, the PUP imploded almost the moment it tried to have the first meeting of its new parliamentary team, and Palmer was also pursued in the courts over his business interests.
In the past two general elections, an array of minor right-wing parties – be they anti-environment, socially conservative or populist – have captured seats in parliament, only to later disintegrate between election cycles. Presumably, Palmer sees a potential constituency and he is out to win its vote.
Palmer’s UAP is yet another in the pantheon of right–of-centre minor parties that have grown in number over the last three electoral cycles that have been notable for their volatility and lack of discipline.
The re-emergence of Pauline Hanson and the One Nation party is a case in point. Having struggled to survive after the 1998 election, One Nation re-appeared in time for the 2016 Senate vote, securing four seats and exercising some cross-bench influence over the balance of power in the upper chamber.
However, from the moment the parliamentary team got together, One Nation started to fall apart through the disqualification of senators and ongoing tensions between Hanson and the remnants of her party.
Indeed, the implosion of One Nation since the 2016 election may well have been the catalyst for Palmer’s re-mobilisation, especially in Queensland, where the populist, anti-establishment vote has been quite strong for some time.
Palmer has been the beneficiary of this vote in the past. In 2013, Palmer won the lower house seat of Fairfax and Glen Lazarus, who led the PUP Senate ticket in Queensland, easily secured a seat in the upper chamber.
The PUP lost the populist vote to One Nation in the 2016 election, but with One Nation’s recent struggles, Palmer clearly thinks he can win back this segment of the electorate and return to national politics.
There are some serious obstacles ahead of him, though. First, it remains to be seen if his candidacy will be viewed as credible by voters, given what happened the last time he ran.
It’s also worth remembering the structural barriers that stand in the way of candidates from outside the major party system. Palmer’s party has flagged its intention to contest every lower house seat, but his candidates will be unlikely to garner 35% of the vote anywhere – the minimum prerequisite for winning a seat.
The UAP’s best hope is in the Senate, and especially in Queensland. But here, changes to the Senate voting system will also hurt the party’s chances.
Unlike the 2013 election, Palmer and his party will be contending with a quasi-optional preferential voting system thanks to changes made by Malcolm Turnbull’s government two years ago. There is no guarantee all the primary votes cast for the plethora of tickets running for Senate in each state will flow through as preferences to other right-of-centre candidates.
“Preference-whispering” arrangements that were so important to the PUP’s success in 2013 will not be in place for the next Senate election. Indeed, the next election will be a half-Senate contest, which will make it even harder for minor party candidates to succeed.
All of this serves to remind that, despite their larger-than-life personas, these minor-party populists like Palmer and Hanson win very small shares of the vote.
While he might try to plagiarise the American president, the truth is that Palmer is no Donald Trump. Trump was the official candidate of one of the two major parties that dominate the US political system and won nearly half of the popular vote in the 2016 election.
Palmer is a fringe player who will be depending on the interchange of preferences with other fringe players and the vagaries of the Senate voting system to be able to gain a foothold in the Australian parliament.
He will also need to hope the Australian electorate has either forgotten or forgiven him for his performance the last time he was in the parliament.
Overnight US President Donald Trump announced the establishment of a “Space Force” as a separate force of the US military.
Trump has indicated the reasoning behind the Space Force stems from national security concerns arising from the potential for renewed activities in space by China and Russia. Trump had previously referred to space as the “new warfighting domain.”
It’s not yet clear where this move sits in light of prohibitions laid out in the Outer Space Treaty, the document that has guided the the exploration and use of outer space by members of the United Nations since 1967.
When it comes to defending America, it is not enough to merely have an American presence in space. We must have American dominance in space. So important.
It’s been coming
Departments in the US military currently include the Air Force, the Army, the Navy, the Marine Corps and the Coast Guard.
The announcement of a Space Force is part of Trump’s increased interest in the space domain, having in 2017 revived the National Space Council, under the leadership of Mike Pence.
Trump had previously flagged the idea of a US Space Force with statements in March and May.
However, with this most recent announcement Trump officially directed the US Department of Defense and the Pentagon to establish the Space Force.
Much more will be needed to actually make this happen. The President cannot simply declare the existence of a new branch of the US armed forces – it would also require, at minimum, an Act of Congress and quite possibly something more. Each branch of the US military has its own unique origins and would require the restructure of the Air Force and other oversight mechanisms in the Pentagon.
Further, there is also the question regarding what such a force could do. Trump’s speech flagged some sort of peacekeeping role.
Rich guys like rockets
Whilst much of the reportage of Trump’s speech has focused on the military aspects of his announcement, Trump reminded the audience that the Space Force was not the only space activity planned by his administration. Rather there was a strong emphasis on commercial space industries, observing that “rich guys seem to like rockets”.
US laws relating to commercial space are to be updated to encourage commercial space industries, directing government and the private sector to work cooperatively. Trump said:
I am instructing my administration to embrace the budding commercial space industry. We are modernizing out-of-date space regulations. They’re way out of date. They haven’t been changed in many, many years. And today we’re taking one more step to unleash the power of American ingenuity. In a few moments, I will sign a new directive to federal departments and agencies. They will work together with American industry to implement a state-of-the-art framework for space traffic management.
Trump also celebrated the potential for benefit to US workers, along with a lot of rhetoric about conquering the unknown. He said “we are Americans and the future belongs totally to us”, we will be “leading humanity beyond the Earth” and “into the forbidden skies”.
Noting the interest of private entrepreneurs establishing long term settlements on Mars, Trump observed that whoever made it to Mars first was fine as long as it was a US citizen.
The Outer Space Treaty
Trump’s proposals – as with any other new outer space settlements – must operate within prohibitions laid out in the Outer Space Treaty. Established in 1967, this document is the framework multilateral treaty that establishes the principal rules regulating the exploration and use of outer space.
Article II of the Outer Space Treaty indicates that “Outer space, including the moon and other celestial bodies, is not subject to national appropriation by claim of sovereignty, by means of use or occupation, or by any other means.”
That said, US law has been drafted to enable access to, including mining of, space resources, without any claim of sovereignty being made.
With respect to a Space Force, Article IV of the Outer Space Treaty expresses a principle of use of space for “peaceful purposes”. Members of the Outer Space Treaty are forbidden from placing nuclear weapons or weapons of mass destruction in orbit around the Earth, on celestial bodies or stationed in outer space. Military bases, installations and fortifications, weapons testing and conduct of military manouevers on celestial bodies are also forbidden.
Of course, none of this has prevented military personnel being involved in space activities and exploration since the dawn of the space age. Both the early US astronauts and Soviet cosmonauts have been members of their respective countries armed forces. Nor has it prevented the transit of weapons of mass destruction through space. GPS is a development of the US Department of Defense and many satellites, including Australia’s own Optus C1 satellite is a dual use (military and civilian) satellite.
The question of the legality of the extent of military uses of outer space and what role may be performed by Trump’s Space Force is still open.
Generally, the practice of the space faring states to date indicates that the prohibitions contained in Article IV of the Outer Space Treaty have been interpreted as “peaceful”, but as referring to non-aggressive rather than non-military uses of space.
Of course, militaries worldwide are already very reliant upon space in terms of communication, position, navigation and timing, surveillance and reconnaissance. Militaries regularly hold exercises such as a Day without Space, which prepares users for the possible destruction of or serious interference with GPS, internet and satellites communications, upon which all modern militaries are heavily reliant.
Space assets such as satellites are quite fragile and valuable and hence issues will inevitably arise regarding capacity to protect space assets.
Trump’s Space Force may still be a highly speculative announcement but it is true that we live in an era where militaries and civilians worldwide are becoming far more reliant and invested in the space domain.
In January 1931, as the newly elected United Australia Party government of Joseph Lyons was contemplating the establishment of a national broadcasting service, the prime minister received a deputation of prominent Melburnians, including a barrister and member of the Victorian parliament, Robert Gordon Menzies.
They urged that the new broadcasting service “be organised on an independent basis and that cultural potentialities of the Broadcast Service be considered a matter of primary importance”. The broadcast service came to be named the Australian Broadcasting Commission and went to air for the first time on July 1 1932.
It is a measure of how far today’s Liberal Party has drifted away from the values and ideals of its founder, Menzies, that last Saturday its federal council should have resoundingly adopted a motion that the ABC should be privatised.
One of the proponents of the motion was Mitchell Collier, the federal vice-president of the Young Liberals. He said there was no economic case to keep the broadcaster in public hands.
No economic case. Where the ABC is concerned, that is a false premise on which to proceed. The ABC was explicitly not established for economic purposes or in pursuit of an economic ideology. It was established for social, educational and cultural purposes.
It was also established on an explicitly non-commercial basis: it takes no advertising. Why? Because it was believed advertising would weaken its independence. The policymakers of the 1930s had seen only too clearly how beholden the newspaper proprietors of the day had become to commercial imperatives: the demands of advertisers and the pressure to increase circulation, even at the cost of editorial quality and integrity.
The newspapers of the day had also become mouthpieces for sectional interests. In Melbourne, The Argus stood for the interests of the mercantile classes and conservative political causes; The Age for a kind of Protestant liberalism and social justice. It supported the miners at Eureka.
The bipartisan political vision for the ABC was that it should not be vulnerable to sectional interests or commercial pressures, but should exist to serve the public interest in the widest sense.
The first paragraph of its charter captures the essence of these expectations:
The functions of the Corporation are to provide … innovative and comprehensive broadcasting services of a high standard … and … to provide broadcasting programs that contribute to a sense of national identity and inform and entertain, and reflect the cultural diversity of, the Australian community; and broadcasting programs of an educational nature.
No mention there of economic criteria.
Nonetheless, in a political age dominated by the narrow perspectives of neoclassical economics, it is self-evidently no longer enough to rely on ideals of the kind promoted by Menzies and reflected in the charter.
In her reply to the privatisation motion, the ABC’s managing director, Michelle Guthrie, told the Melbourne Press Club the ABC contributed more than $1 billion last financial year to the Australian economy, on a par with the public investment in the organisation.
She also advanced an efficiency argument, saying the ABC’s per capita funding had halved in real terms over the past 30 years, and warned that the latest cuts in funding – $83.7 million in a so-called efficiency dividend – would serve only to punish audiences.
Herein lies the political sting for the government, and especially for the National Party.
A motion to privatise the ABC, no matter how vigorously repudiated by the government, is political poison, especially in regional, rural and remote Australia.
These voters have watched as the Abbott-Turnbull administrations have cut the ABC’s funding by $338 million since 2014. They have watched as the ABC has been used – in Guthrie’s words yesterday – as a punching bag by narrow political, commercial or ideological interests.
Guthrie was too diplomatic to nail the government or the Murdoch press. But the overt hostility to the ABC shown by the government over the past four years may now reap a political harvest.
That hostility has been demonstrated not only by the funding cuts but by sustained carping criticisms, vexatious complaints and political stunts exemplified by the current competitive neutrality inquiry.
It would be more accurately called the editorial neutering inquiry. Its focus is clearly on the ABC news service, as its own issues paper makes clear. That is the part of the ABC most detested by the government and the politician for whom the government is a cat’s paw in this, Pauline Hanson.
Each Tuesday, I engage in a pro-bono 25-minute segment on media issues with the presenter of ABC Radio Statewide Drive, Nicole Chvastek. The program is broadcast across regional Victoria and southern New South Wales, covering the National seats of Riverina, Mallee, Murray and Gippsland, and the Liberal seats of Farrer, Wannon, McMillan, Corangamite and McEwen.
Yesterday the talkback calls ran hot on this one issue: privatisation of the ABC. Yes, the ABC needed scrutiny; yes, the ABC was a bunch of lefties. But: where would we be without it?
Just after 5pm, the Nationals served up their deputy leader, the Victorian senator Bridget McKenzie, to answer talkback calls on this issue. It was like something from the Colosseum.
Labor frontbencher Anthony Albanese has urged Labor to “engage constructively” with business, empower its party branches and make sure it avoids “allowing tactics to marginalise strategy”, in a speech that will be seen in the context of leadership.
Albanese’s Gough Whitlam Oration comes against a background of speculation that Bill Shorten’s leadership could come under pressure if Labor did badly in the Super Saturday byelections on July 28. Albanese is considered the only alternative to Shorten.
The address was carefully crafted to keep away from any direct criticism of Shorten, but it had a clear subtext. In saying what Labor’s approach should be, Albanese was also differentiating himself from Shorten who, for example, has been criticised for being too “tactical”.
Albanese’s tone on business contrasted with some of Shorten’s more strident attacks on the top end of town.
He noted that “successful Labor governments collaborate with unions, the business sector and civil society to achieve positive outcomes in the national interest”.
Criticising Malcolm Turnbull for setting business and unions against each other, he said a better course would be to encourage collaboration and compromise.
“That’s the approach of the best Labor governments. Our job is not to sow discord. It is to bring people together in the service of the national interest,” he said.
“Labor doesn’t have to agree with business on issues such as company tax rates, but we do have to engage constructively with business large and small.
“We respect and celebrate the importance of individual enterprise and the efforts and importance of the business community.”
Referring to his area of infrastructure and transport, he said he had maintained a close working relationship with the sector.
“Working with industry helps us to understand its perspective and also helps business to understand ours,” he said.
Albanese also confronted the issue of “aspiration”, which the government is using to attack Labor, especially on the back of its tax cuts legislation which passed this week. The government is claiming the ALP rejects or doesn’t understanding the aspirations of Australians.
Albanese conceded the importance of aspiration – but sought to cast it differently.
“The key to an effective plan for government is an understanding of the aspirations of our fellow Australians,” he said. “We in Labor must always ask ourselves, ‘what do Australians want out of life and how can we help them achieve it?’”
Malcolm Turnbull or Scott Morrison would say people wanted more money, Albanese said, but “I’ve got a different view. Australians do care about quality of life. But they define quality of life as something more than the value of their share portfolio or how much money they have in the bank”.
They wanted happy and productive lives and to build a society where their children had more opportunities than themselves, he said. “While Australians have personal aspirations, they extend beyond individual needs to family, community, environment and indeed, to encompass a fair nation.”
Albanese said Labor needed to recognise the importance of its branches to understanding what was happening in Australia.
“This is not 1950, when most Australians were members of trade unions. Indeed, many people from working class backgrounds are not members of unions because they were beneficiaries of Gough Whitlam’s education reforms,” he said.
“We cannot afford to ignore this demographic. We need the energy and ideas of our membership.
Labor must empower our membership by giving them more direct say in elections for public office and internal positions.
“Labor must also maintain our internal processes that emphasise policy making from the bottom up.
“Policy ideas that come from branch meetings or workplaces are gold. Sometimes they are ahead of their time. But they are always valuable,” he said, pointing to the push for marriage equality, that came from the community, up through the party and ultimately went through parliament.
Albanese trod carefully on refugee policy. “No mainstream politician believes in open borders, but a policy that uses its prolonged treatment of detained people as an ongoing deterrent to others has a deep flaw at its heart.
“Labor supports offshore detention and regional processing, in order to stop the people smuggling trade. But we call out the government’s failure to settle refugees in third countries, despite the clear offer of assistance from countries including New Zealand.
“You can be tough on people smugglers without being weak on humanity. You can protect our borders without losing our national soul.”
The Australian Bureau of Statistics has just released its latest analysis of the effects of government benefits and taxes on household income. Overall, it shows government spending and taxes reduce income inequality by more than 40% in Australia. Disparities between the richest and poorest states are also greatly reduced.
The ABS analysis provides the most up-to-date (to 2015-16) and comprehensive figures on the impacts of government spending and taxes on income distribution. As well as direct taxes and social security benefits, it estimates the impact of “social transfers in kind” – goods and services that the government provides free or subsidises. These include government spending on education, health, housing, welfare services, and electricity concessions and rebates.
The figures also include a wide range of indirect taxes. Among these are GST, stamp duties and excises on alcohol, tobacco, fuel and gambling.
The 2015-16 results are the seventh in a series published every five to six years since 1984. The methodology is based on similar studies by the UK Office of National Statistics since the 1960s. The latest UK analysis coincidentally also came out on Wednesday.
How do the calculations work?
The ABS analyses income distribution in a number of stages.
First, it calculates the distribution of “private income”. This includes wages and salaries, self-employment, superannuation, interest, dividends and income from rental properties, among other items. It also includes net imputed rent from owner-occupied dwellings and subsidised private rentals.
Next the ABS adds social security benefits, such as the Age Pension, unemployment and family payments, to give “gross income”.
Then it deducts direct taxes – primarily income tax – to give “disposable income”.
The next stage is to add the estimated value households derive from government services. This is mainly the value of public health care and education spending.
The final stage is to deduct the estimated value of indirect taxes.
So what are the impacts on income inequality?
It is possible to calculate measures of economic inequality at different stages in this process. By implication, the difference between inequality measures is the result of the different government policies taken into account.
Figure 1 shows the Gini coefficient, which ranges between zero – where all households have exactly the same income – and 100% – where one household has all of the income. The Gini coefficient for private income in 2015-16 was 44.2. The addition of social security benefits, which mainly increase the incomes of low-income groups, reduces the coefficient by 8.1 percentage points.
Deducting income taxes – which are progressive – further reduces inequality by 4.5 points. Government non-cash benefits reduce the Gini coefficient by nearly as much as the social security system. However, indirect taxes slightly increase income inequality.
The Gini coefficient for final income is 24.9. So, compared to a coefficient of 44.2 for private income, government spending and taxes reduce overall income inequality by more than 40%.
While most of the reduction in inequality is due to government spending, taxes are obviously important to pay for this spending.
Figure 2 shows the distribution of social security benefits and government services across income groups, from the poorest 20% to the richest 20% of households. The poorest 20% receive about seven times as much in benefits as the richest 20%. The average for OECD countries is close to one, with rich and poor receiving about the same amount.
Government spending on social services is also progressively distributed. This spending is considerably greater than social security spending and includes both Commonwealth and state spending on education and health.
The poorest 20% receive about 70% more in non-cash benefits than do the richest. This is not due to income-testing. Instead, it’s largely a result of the greater value of public health spending on hospitals and Medicare for older people, who tend to be in the bottom half of the income distribution.
Taxes, of course, work to reduce income inequality, as high-income groups pay a higher share than low-income groups. Figure 3 shows that the poorest 20% pay about 5% of their disposable income in direct taxes, while the richest 20% pay about 30% of their disposable income.
In contrast, indirect taxes – particularly those on tobacco and gambling – are regressive. Low-income groups pay more than high-income groups as a share of their disposable income. However, the undesirable effects of smoking and gambling on the wellbeing of low-income households need to be borne in mind.
When direct and indirect taxes are added together the overall tax system is less progressive, but the richest 20% still pay nearly twice as much of their disposable income as do the poorest 20%.
Redistribution also happens between age groups and states
In addition to reducing inequalities between income groups, government spending and taxes redistribute across age groups. Government spending is much higher for households of Age Pension age than for younger households. This is because of both the Age Pension and older households’ use of the healthcare system.
For example, households where the reference person is 75 or older receive on average just over $1,000 a week in government spending but pay about $180 a week in direct and indirect taxes. Households with a person aged 45 to 54 pay the highest taxes on average – about $800 per week – and on average receive about $620 a week in social spending.
There is also redistribution across states and territories. For example, average private income is about 65% higher in Western Australia than in Tasmania. However, on average, Western Australian households receive about two-thirds of the social security benefits that Tasmanian households get. This reduces the disparity in gross income to about 45%.
Western Australian households pay about twice as much in income taxes as Tasmanians, reducing the disparity to 35%. Households in the West receive only about 3% more in spending on social services than in Tasmania, which reduces the disparity in average incomes to 28%. West Australian households also pay about 20% more in indirect taxes than Tasmanian households (although as a percentage of disposable income, this is a higher share in Tasmania).
These figures suggest that while the financing of fairly equal social services across most parts of Australia reduces inequality between states, the income tax and social security systems also significantly reduce disparities. This is because income tax and social security are national systems and because Tasmania is the poorest state largely due to the higher share of age pensioners in its population.
Overall, this publication provides an invaluable picture of how government spending and taxes affect household economic well-being. Its results are relevant not only to the political debate about tax cuts, but also to long-term policy development to prepare Australia for an ageing population.
Coles is aiming to have private label products make up 40% of its product range over the next five years. This increase will apply across multiple tiers of products, with a focus on quality, innovation and new strategic global relationships.
More supermarket-owned brands will mean lower prices for consumers and greater margins for the retailer. But the move could significantly impact Australian suppliers as their branded products are delisted and supermarkets seek out cheaper manufacturers overseas.
Private label products also help retailers differentiate themselves from competitors by giving them unique products.
Private labels have increased their footprint across many retailers, including discount department stores, liquor and convenience stores and traditional full-line department stores like Myer.
The flipside of private label expansion
The main fears about the continued growth of private label brands are that it could discourage suppliers from innovating with their products, jeopardise the livelihoods of smaller, independent suppliers, and ultimately result in less choice for consumers.
Just a few years ago then Woolworths CEO Grant O’Brien said the company would put customers “before” suppliers.
Some researchers suggest that increasing private label ranges could impede innovation in the food industry. This is largely because branded manufacturers will have less incentive to invest in new products only to have them copied by the contract manufacturers who produce private label goods.
Smaller, local independent brand manufacturers and wholesalers could be exposed to “delisting” – where a supermarket does not renew a supply contract in order to free up shelf space for its own private label alternatives.
Supermarket shopping is notoriously a low-involvement, mundane and habitual task. Shoppers often visit the same supermarkets, buy the same products and browse the same aisle. In fact, studies continue to demonstrate that the “abundance of choice” is problematic for many shoppers, who simply seek an “optimal choice”.
Research shows that when faced with a “good, better and best” option, people choose the one in the middle. This is why we see supermarkets offering very basic generic private label products all the way through to “select” and “finest” options.
Coles’s announcement comes as supermarkets are getting smaller in the face of rising costs. Together, these trends could have long-term implications for the Australian grocery industry.
The presence of more private label goods will likely require domestic manufacturers to themselves produce more private label goods to minimise offshoring. But, in doing so, manufactuers will commoditise themselves, thereby giving retailers even more power.
The odds were always in the government’s favour in the battle to get its A$144 billion income tax package through parliament.
However much some Senate minnows might have objected to the package’s third stage – taking effect way out in 2024 and favouring the wealthy – they didn’t want to be blamed for denying middle and lower income earners early tax cuts.
Pauline Hanson – of course – attracted the limelight but at no point voted against stage three. But the two Centre Alliance (former Nick Xenophon Team) senators epitomised the dilemma – they voted (successfully) to amend the bill to exclude the last stage, but when the government said it was the whole package or nothing, they folded.
In response, they copped a serve from Tim Storer, the South Australian independent who was on the NXT election-ticket in 2016. Storer was the only crossbencher to hold out.
Clearly the government has had a big victory and Labor has taken a risk in saying that if elected, it will (Senate permitting!) repeal the legislation’s second and third stages, while keeping, and building on, the initial tax cuts.
What’s less clear is the size of the risk for Labor.
If the whole package had been defeated, the ALP would have been exposed as tax-cut spoilers. As it is, middle and lower income voters will know that whoever wins the election, they have a guaranteed tax cut, indeed a rather bigger one under Labor.
From Labor’s point of view, committing to repeal the second stage, which moves the threshold at which the 37% rate cuts in from $90,000 to $120,000, is more of a gamble than saying it will kill the third stage, which flattens the scale, with benefits directed to high earners.
But stage two doesn’t start until mid 2022, so a Labor government would not be taking away a bird in the hand but one that was still on the wing. Some voters might apply a discount to a cut so far in the future, even though it has been legislated.
How voters react to Labor’s position will also depend on whether the government can convincingly sell its arguments that the ALP is dissing “aspiration”, engaging in “class warfare” and, via a range of policies, is the “high tax” party.
Also, the debate over tax cuts can’t be seen in isolation. The opposition has money to use and policies still to unveil. Polls show people have other priorities – fiscal consolidation, spending in certain areas. Voters at the election will look at the full menus before them, as well as the leaders and the government’s record.
Nevertheless, the results in the July 28 byelections will be interpreted as a referendum on the competing tax plans, though other factors will feed into those contests as well. Super Saturday will reset the political landscape in one way or another.
It would have been a huge setback if the government hadn’t secured its income tax package, which was the budget’s centrepiece. Politically, there’s less at stake in its intention to put to a Senate vote next week its tax cuts for big business. On current numbers this legislation is headed for defeat.
More crucial than the fate of the company tax cuts is the government’s long struggle to nail down its national energy guarantee (NEG), with the crunch coming when Energy Minister Josh Frydenberg meets his Council of Australian Government counterparts on August 10.
The tax win has further enhanced the reputation of Senate leader and chief negotiator Mathias Cormann. The outcome of the NEG negotiation will be important for Frydenberg’s reputation.
On tax, the battle was only with the parliament. On energy, Frydenberg has to wrangle state and territory ministers (the ACT is particularly challenging), and also fend off an insurgency from Tony Abbott and other sceptics, who ran interference at this week’s Coalition parties meeting. As well, unease seems to be growing among some Nationals, including frontbencher Keith Pitt.
After an earlier general discussion in the party room, the Abbott band had wanted the NEG plan returned there before the August meeting. This isn’t happening – the next broad party room consideration is due when the legislation comes forward. But that doesn’t prevent ad hoc sorties of Tuesday’s kind.
Abbott also launched public attacks covering not just the energy issue itself but the way Malcolm Turnbull runs the party room.
“I think the government is more interested in reducing emissions than it is in cutting prices,” he told 2GB on Wednesday. And it was “a big mistake for the Coalition to sub-contract out its energy policy to the Labor state governments”.
He left open the option of crossing the floor when legislation comes. It will formalise the emissions reduction target. The critics will cavil at any provision that would facilitate a Labor government moving to a more stringent target. Yet this flexibility might be needed to secure a deal for the package.
Abbott said he hoped things wouldn’t get to the floor-crossing stage but “the executive government needs to understand that you can’t take the party room for granted”.
He complained at Turnbull’s “practice of discussing legislation at enormous length every party room meeting before we actually get to backbenchers’ questions and comments”, declaring this “completely unprecedented”.
While by necessity, “the government spends an enormous amount of time negotiating with the crossbench”, it needed to “spend a bit more time talking to the backbench,” he said.
There are obvious retorts to Abbott’s criticisms. For example, on the “sub-contracting” to the states, it is the states that have the main responsibilities in this area.
As to party processes, while he contrasted Turnbull’s style with his own and that of Howard and others, some colleagues were quick to recall his notorious “captain’s calls”, especially the paid parental leave scheme.
By late Thursday, the pro-NEG forces were mobilised, with an assortment of backbench Liberals (Julia Banks, Trent Zimmerman, Trevor Evans, Tim Wilson) and Nationals (Mark Coulton, Andrew Broad) publicly rallying to its defence.
As the Coalition celebrates on tax, the internal heat over the NEG has suddenly been turned up to high, with the disunity going on full display.
Frydenberg’s timetable means he doesn’t have to deliver on the NEG until after the byelections. But when it comes to the main election game, a credible (though inevitably disputed) energy policy is as crucial for the government as having its income tax plan in place.
The Senate on Thursday is set to pass intact the government’s A$144 billion three-stage income tax package – but whether the plan is fully delivered will depend on who wins the election.
On Wednesday the Senate voted 36-32 for an amended package that removed the third stage of the plan. This stage, implemented in 2024, gives tax cuts to higher income earners, flattening the tax scale so the same marginal rate would apply through incomes from $41,000 to $200,000.
But the government has declared the legislation must be passed as a whole, and the House of Representatives on Thursday will reject the amended package.
After intense lobbying of the crossbench, the government is considered to have the required backing to carry the original bill when it is re-presented to the Senate.
Senate leader Mathias Cormann on Wednesday won Senate support for a motion for the bill when it is returned on Thursday to be voted on without further debate. All the crossbenchers except South Australian independent Tim Storer voted for this. Debate on the legislation was also cut short on Wednesday.
Centre Alliance senators Stirling Griff and Rex Patrick voted to strip out stage three, but are now set to vote with the government.
Griff said what while “we are going to make our final decision on the floor”, “we are not going to say no to low and middle income earners getting tax cuts.”
He said stage three was two elections away, and so there was plenty of time to try to knock it out.
Storer lashed out at the Centre Alliance senators. Centre Alliance is the renamed former Nick Xenophon Team – Storer was on its ticket at the election.
“They supported an amendment to remove Stage 3 of the bill … but say they will vote with the government to approve the bill in its entirety when it returns to the Senate,” he said. “We can only conclude Centre Alliance’s initial opposition to Stage 3 was all for show”.
Labor this week committed a Shorten government to repealing the last two stages of the plan if it had been legislated. Instead, Labor would maintain and enhance the first stage, directed to middle and lower income earners.
The first stage starts this year and gives a tax offset to a maximum of $530 for taxpayers earning up to $90,000. Labor would then build this to a maximum offset of $928. The ALP alternative would cost $73 billion over a decade.
An analysis by the progressive think tank The Australia Institute said that almost 95% of the benefits of stage three “go exclusively to top 20%, while 75% of taxpayers get no benefit at all”.
“We’re not splitting the bill,” Treasurer Scott Morrison said. “Our personal tax plan is not about creating winners and losers, setting winners against losers. It is about ensuring that all Australians win.”
Malcolm Turnbull said the government would reject any amendment “because we want all Australians to get the benefit of a comprehensive tax reform. We want to ensure that 94% of Australians don’t have to pay any more than 32.5% for every extra dollar they earn. We want to reward and encourage aspiration”.
“Aspiration is what is driving the Australian economy,” he said.
Bill Shorten said: “Labor is going to support tax reductions for lower paid workers, 10 million of them. …We have a better plan. We’re going to provide a tax refund, a tax cut, of $928 a year … for most people. That means over three years, that’s nearly $3,000.”
Two contributions made in separate forums in Parliament House on Tuesday captured the sharp cross-currents in the China-Australia relationship.
At the Australia China Business Council’s “Networking Day”, Chinese ambassador Cheng Jingye reiterated that China “never interferes in the internal affairs of other countries”, let alone engaged in “the so-called infiltration of other countries”.
The ambassador delivered little-disguised criticism of Australia. To dispel “the clouds” over bilateral relations, “the two countries need to have more interactions and inclusiveness, with less bias and bigotry… less cold war mentality”.
Over in the Coalition party room Liberal senator David Fawcett, chairman of the parliamentary foreign affairs committee, also had a forthright message, urging the cabinet to put security concerns at the forefront in considering the Chinese company Huawei’s push for a slice of the action in the 5G network build.
The government’s attitude to China’s protestations that it doesn’t interfere is one of, “it would say that”. Its view of claims by non-state companies such as Huawei that they have no connections with the Chinese regime is much the same.
For both sides of politics, the China policy challenge is to strike the right balance in a bilateral relationship now infused with Australian suspicion and openly-expressed Chinese irritation.
If Labor wins the election Penny Wong, now shadow foreign minister, will be shouldering much of that responsibility.
In her speech at the business forum, Wong criticised the Turnbull government’s management of the relationship and said “a more considered, disciplined and consistent approach is required”.
So how would a Labor government handle things? Wong outlined six “operating principles” that it would use:
A clear understanding and articulation of Australia’s national interests, which included the country’s security and prosperity, regional stability and constructive internationalism.
Acceptance that we live in a disrupted world.
Acceptance of China “as it is, not as others might perceive China to be or as China itself might represent itself”.
Acknowledgement of how important and beneficial China’s emergence as a major economic power has been to Australia and the world.
Pursuit of an integrated approach to the many strands of the relationship.
A commitment to working constructively with China and others in a regional framework.
Australia and China were very different culturally, politically and socially, Wong said.
“The important objective is to prevent differences from becoming disagreements, as far as possible. And when disagreements do occur, they must be managed with intelligence and tact,” she said.
“To the extent possible, Labor will work towards ensuring that our political relationship works on the same basis as our economic relationship – respect and trust based on dialogue and understanding. Respect and trust don’t just happen. They have to be built and maintained, and that’s what we intend to do”.
Of course it is easier to say how things should be managed than to manage the often tricky realities.
In his address to the forum, Malcolm Turnbull did not dig down deeply to those realities. He kept his references to differences to the easier, less sensitive ones. “Sometimes you’ll get issues at a fairly granular level,” he said, and referred to the problem with imports of Australian wine. “We went to work to ensure that that could be resolved and indeed so it was”.
Turnbull also suggested the reality wasn’t always as it was portrayed. “Sometimes in the media there is always going to be an emphasis on differences, on conflict, on problems”.
It was a superficial speech – which can be defended on the grounds that it can create more trouble than it is worth to be too blunt in public about the actual problems. Also, Turnbull regarded it as a business occasion rather than one for a more formal foreign policy presentation.
The crack at the media was, however, a cheap and not very honest shot. The media is often simply saying publicly and directly what the government is saying privately or more obliquely. It’s notable that Andrew Hastie, Liberal chair of the parliamentary intelligence and security committee, recently put on record (under privilege) allegations against business figure Chau Chuk Wing, partly on the grounds of giving some backing to media outlets that are being sued over stories about him.
On other fronts this week, Huawei has been lobbying MPs to try to convince them it is as transparent as it claims, while Hastie’s committee is preparing its report on the legislation – which the government wants passed next week – for a register of agents of foreign governments and other foreign political interests.
The Australia-China relationship involves walls and whispers, as well as all the rhetoric about trust and respect.
Meanwhile the Lowy Institute’s annual poll, Understanding Australian Attitudes to the World, released Wednesday, suggests ordinary Australians are less galvanised by the China debate than the decision-makers.
“Australians remain remarkably sanguine about foreign interference in Australia’s political processes following the furore over Chinese-linked donations to Australian political parties, politicians, and institutions. Foreign interference remains a low-order threat in the minds of Australians, who are almost equally concerned about US influence as Chinese influence,” Lowy’s executive director Michael Fullilove writes in his introduction to the poll, done in March with a sample of 1200.
“Foreign interference in Australian politics” was seen as a “critical threat” by 41% – behind terrorism (66%), North Korea’s nuclear program (66%), climate change (58%), cyber attacks from other countries (57%), the prospect of a severe downturn in the global economy (50%), and the Trump presidency (42%).
Although the debate has been all about China, the poll found what concerns there were appear to be focused on foreign influence generally, rather than specifically Chinese influence. Asked about influence from both China and the US in Australia’s political processes, 63% expressed concern about China and 58% concern about the US.
In other findings relating to China
72% said the Australian government was “allowing too much investment from China”. In 2014, the figure was 56%.
46% believed it was likely “China will become a military threat to Australia in the next 20 years”.
But 82% said China was more of an economic partner to Australia than a military threat to it.
81% believed it was “possible for Australia to have a good relationship with China and a good relationship with the United States at the same time”.
In their attitudes to China, the Australian public may be alert but they’re not alarmed.
In doing so, they claimed the council was a roadblock to genuine global human rights protection. This move by the Trump administration has been anticipated for some time. In a sense, the elephant has left the room. But in doing so, the elephant has belled the cat on a number of serious issues regarding the HRC.
Is the United States’ decision sound in terms of international human rights protection? Is it one that Australia, an HRC member from 2018-2020, should follow?
What is the Human Rights Council?
The UN Human Rights Council was established in 2006 to replace the UN Commission on Human Rights, which ran from 1947 to 2006. By the time of its demise, the commission was criticised from all sides for being overly politicised.
The HRC’s 47 seats are divided between the five official UN regions in the following way: Africa (13); Asia (13); Latin America and the Caribbean (8); Western Europe and Other (7); Eastern Europe (6). The US (and Australia) is in the Western Europe and Other Group, known as WEOG.
One-third of the council is elected each year by the UN General Assembly, and members serve three-year terms. No member may serve more than two consecutive terms. A member can also be suspended from the council in a vote of two-thirds of the UN General Assembly: Libya was suspended in 2011 after Muammar Gaddafi’s crackdown on Arab Spring protesters and armed dissidents. No other member has been suspended.
The HRC meets three times a year for a total of around ten weeks. Its 38th session has just begun. It also meets for one-day special sessions at the initiative of one-third of its members. It has so far held 28 special sessions.
The HRC also authorises independent investigations into particular human rights issues, either thematic (dealing with a human rights issue such as torture or LGBTI rights) or, more controversially, focused on a particular state. At the time of writing, there are 46 thematic mandates and 12 country mandates for these “special rapporteurs”.
It has one major new function compared to its predecessor, the Universal Periodic Review (“UPR”), whereby the human rights record of every UN member is reviewed by the HRC (as well as all other “observer” nations) every five years.
The US’ grievances against the HRC arise with regard to the human rights records of its members, and its politicised character. Its key red line concern seems to be the HRC’s “unconscionable” and “chronic bias” against Israel (to quote from this morning’s press conference). These issues are examined in turn below.
Membership criteria as they stand are very soft: candidates commit to the highest standards of human rights, and states should take into account a nominee’s human rights record when voting. Both of these rules are basically unenforceable.
Human rights criteria were mooted as prerequisites for membership when the HRC was created. However, the UN’s nearly 200 members could not agree on substantive criteria, as they have very different views on human rights. The US, for example, wanted only “democratic nations” to be eligible. Such a criterion would have led to debates over the meaning of “democracy”, and would seem to prioritise civil and political rights over economic, social and cultural ones. A focus on the implementation of economic and social rights might have led to the exclusion from eligibility of the US itself.
In any case, the “measurement” and respective ranking of human rights records across states is contentious. While comparisons between two states may lead to easy conclusions over which one is better or worse, it is a fraught exercise across the entirety of the UN membership.
Procedural criteria, such as a nation’s record on ratification of human rights treaties, would be more objective. However, such criteria might have led to the exclusion of the two most powerful countries in the world – the US and China, which have both failed to ratify crucial treaties. Realpolitik indicates that such an outcome is very unlikely.
In the press conference, Haley and Pompeo decried the presence of human rights abusers on the council, including China, Cuba, Venezuela and the Democratic Republic of the Congo. Consternation has also commonly been expressed over the common presence of Saudi Arabia and Russia on the HRC. Certainly, none of those states is remotely close to upholding the highest standards of human rights. Haley and Pompeo went further, claiming that these states manipulate the HRC to shield abusers and target blameless states in its resolutions.
So how bad is the HRC membership? Freedom House is a non-government organisation (NGO) that rates states as “free”, “partly free”, or “not free”, according to certain civil and political rights criteria, such as press freedom. While Freedom House’s methodology is assailable, I will use its rankings in assessing the current HRC, as the US itself historically uses them in making certain policy choices.
2018 is in fact one of the worst years in terms of the numbers of non-free HRC members. Nevertheless, free states always outnumber unfree states on the HRC, and can easily pass or block any resolution with the cooperation of just a few partly free states, if they vote together.
Any problem with “bad” resolutions on the HRC arises not from a preponderance of bad states, but from bloc voting within regions, like-minded groups and alliances.
The phenomenon of clean slates
Nevertheless, one can still fairly criticise the HRC for containing 14 non-free states. How do such states get elected?
A major problem for HRC elections is the issue of “clean slates”, whereby the number of candidates presented by a UN region correlates exactly to the number of seats it is scheduled to have elected at any particular time. For example, a region might put forward only two candidates for two seats. In such circumstances, the various candidates’ election seems to be a fait accompli. This phenomenon of clean slates was what Pompeo was referring to when he said that some states were elected by a rigged, collusive process.
Yet clean slates are a problem with all of the UN regions. The US itself was initially elected to the HRC on a clean slate in 2009. Australia was elected to the HRC on a WEOG clean slate in 2017, due to France’s belated withdrawal of its candidature.
Genuine elections do occur when open slates are presented by regions. This is how Russia was rejected in 2016, an unprecedented and humiliating blow that probably led to Russia’s failure to even stand for election in 2017. Other serious human rights abusers, such as Azerbaijan, Sri Lanka and Belarus, have failed to gain seats in similar circumstances.
Although states are elected on a regional basis, each member must still attain the majority of votes in the general assembly in order to be elected. There remains a possibility that an unacceptable candidate will simply not reach that threshold, even in the case of a clean slate.
That possibility has in the past led to the late replacement of controversial candidates, such as Syria’s replacement by Kuwait in 2011. This author eagerly awaits the day when the General Assembly finally flexes its muscle by refusing to elect an entire clean slate, thus depriving a region of a seat for a year. Such an outcome, in the absence of a relevant reform, is one way to dissuade future clean slates.
Finally, while states – particularly WEOG countries – might rail against the awful records of other members, those sentiments might not be reflected in their actual voting. After all, voting is by secret ballot. For example, given that Saudi Arabia is a key US geopolitical ally, it seems likely that the US (and even Australia) has voted for it on occasion. Certainly, the UK seems to have done so.
The US is correct that membership criteria should be revisited. Certain obstacles could be put in the way of the worst abusers, such as compulsory open slates, public voting (which might help prevent UK votes for Saudi Arabia), and a requirement that an eligible state must allow visits by all special rapporteurs.
Politicisation of the HRC
As the HRC’s members are representatives of their governments, the HRC is a highly politicised body, like its predecessor. State governments are political constructs, so any institution made up of government representatives is inevitably political too.
Unfortunately, states will generally vote in favour of their national interests rather than human rights interests if the two should clash. Pompeo inadvertently admitted that this morning, when he praised Haley by saying that she always put “American interests first”.
Politicisation inevitably leads to the manifestation of political biases. The most notorious HRC bias concerns Israel. It seems that the US’ biggest complaint over the HRC, and the “red line” that has led to its withdrawal, is the HRC’s treatment of Israel.
Its special rapporteur mandate stands until the occupation is over, so its renewal is automatic rather than the subject of periodic debate, as is the case with other mandates. The mandate-holder investigates its actions rather than those of the Palestinian authorities, whose abuses are largely ignored.
Israel has been the subject of more special sessions than any other state (more than a quarter of the 28 sessions). Having said that, it was the subject of the first three special sessions in 2006, and four of the first six, so the “hit rate” of 4 out of 22 is less stark since then.
Why is the HRC preoccupied with Israel? For a start, Israel has committed serious human rights abuses that are worthy of the HRC’s condemnation. It is absurd for Pompeo to have implicitly suggested that Israel has “committed no offence”. Any HRC bias does not mean that the substance of its criticisms is wrong. The recent killings of Palestinian protesters, targeted killings, illegal settlements, forced evictions, war crimes, the Gaza blockade and, most fundamentally, an ongoing occupation of Palestine that has lasted for more than 50 years, will cause critics to proliferate.
Nevertheless, that does not explain the HRC’s disproportionate attention to one country, given the scale of human rights abuses by other states that receive far less attention.
Ardent supporters of Israel often contend that the bias is driven by anti-Semitism. While such a motivation cannot be dismissed, there are other reasons that seem likely to be driving this phenomenon. The equation of “anti-Israel” with “anti-Semitic” is simplistic.
Israel has many enemies among UN states. Some have never accepted Israel’s right to exist, believing that it was established illegitimately on Arab (Palestinian) land. Indeed, the Organisation of Islamic Cooperation was set up in 1969 to unite Muslim states after the 1967 war in which Israel seized the occupied territories, so opposition to Israel has been an article of faith since its inception. The OIC routinely brings as much diplomatic pressure to bear on Israel as possible. As OIC states straddle the two biggest UN groupings, Africa and Asia, they can rely on significant bloc solidarity for support in their initiatives.
The racial element, whereby the Jewish State of Israel illegally occupies lands populated by Arabs in the occupied territories, attracts the ire of developing states, which have historical grievances regarding racial oppression. Yet other instances of racial tension – such as the oppression of the Tibetans, the Kurds, the West Papuans, the Tamils or the Chechens – fail to attract the same HRC scrutiny.
One difference is that Israel’s occupation of the Palestinian Territories is not recognised as legitimate by any other state, unlike for example China’s sovereignty over Tibet or Indonesia’s sovereignty over West Papua.
Indeed, increasing numbers of states have diplomatically recognised the occupied territories as the State of Palestine, and the UN General Assembly voted in 2012 to recognise Palestine as a non-member state.
Occupation also allows states to feel safe in attacking Israel without being too hypocritical. While human rights abuses are sadly common, the status of “occupier” is rare. Indeed, Israel is sometimes seen as a remnant of colonialism, and its actions certainly breach the right of self-determination enshrined in the UN Charter.
However, Israel is not the only occupier. Morocco has long annexed the [Western Sahara], yet the global silence on that situation is deafening in comparison.
Israel is also seen as a surrogate for the West, particularly the US. Given that Israel is almost always defended within the UN by the US, and is often defended by much of WEOG, the question of “Israel-bashing” has become part of a greater North/South divide in the UN. Anti-American states such as Cuba, Venezuela, Ecuador and Russia see Israel as a US surrogate in the Middle East, and exploit the issue accordingly.
Bias against Israel is matched by biased displays of support for Israel by its allies, such as the US and Australia. For example, the US instinctively presumed that the recent border killings were justified. Past bombings of Gaza (in 2009 and 2012) have been blithely dismissed by Australia as an exercise of Israel’s right to self-defence. But a legitimate case of self-defence can still result in an illegal use of excessive, indiscriminate or unnecessary force.
Regardless of its causes, the HRC’s perceived bias against Israel is counterproductive. It provides Israel with a ready-made argument to reject even legitimate condemnation, thus providing cover for human rights abuses. Indeed, claims of bias (within and outside the UN) have become a dominant part of the Middle East narrative on both sides, detracting from a focus on the actions of the actual protagonists. It has facilitated Israel’s progressive disillusionment with and disengagement from the UN, and now, the disengagement of the US. It reduces the HRC’s credibility and opens it up to charges of hypocrisy. None of these outcomes is useful for those who sincerely wish for improvements in human rights for all in Israel and the Palestinian occupied territories.
Finally, the biggest problem with the focus on Israel is the corresponding lack of focus on other serious human rights situations. While it is impossible to demand or expect that a political body, or even an apolitical one, should achieve perfect balance in its human rights focuses, it is fair to expect that such focuses not be way out of balance.
The US and human rights
Haley and Pompeo reassured us that the US will continue to play a leadership role in human rights, despite its withdrawal from the HRC. And certainly, the US’ role on the HRC was in many ways positive. For example, it took the lead in addressing impunity in Sri Lanka. The WEOG group suffers from some dysfunctionality on the part of EU states, which generally seek a common position. Strong non-EU voices are important in this regard.
Yet the US is as political as other players on the HRC. Just as some states instinctively oppose Israel, the US instinctively supports it. Neither position is principled. The US has also protected other allies, such as Bahrain.
Outside the HRC, US President Donald Trump is not a credible leader on human rights. He seems to have an affinity with leaders with horrible records, such as the Philippines’ Rodrigo Duterte. Most recently, he responded to comments about North Korea’s human rights record, which is possibly the worst in the world, by praising the “talented” Kim Jong-un.
And of course, the US has long had its own serious human rights problems, which are too numerous to mention, but which include torture and the highest proportion of incarceration in the world. Its recent decision to separate migrant children from their parents and intern them reflects its status as the only country in the world that has failed to ratify the Convention on the Rights of the Child.
Furthermore, it is nonsense for Pompeo to suggest that the HRC had sought to infringe on US sovereignty. This betrays a serious misunderstanding of the concept of sovereignty, indicating that it dictates immunity from criticism. It does not.
Is the council salvageable?
The US is correct to note there are major deficiencies in the current HRC. Is its response therefore the correct one? If so, that would seem to indicate that Australia should also quit the HRC. It is very unlikely that Australia will do so.
The HRC is the peak global intergovernmental human rights body, which may represent the world of today, warts and all. The battle for universal human rights observance will not be won by adopting an “us and them” mentality, which excludes significant numbers of countries in the world from “the human rights club”. Such a solution is more likely to lead to balkanised human rights discussions, and possible competing institutions inside and outside the UN.
The HRC must remain a forum where non-like-minded states, and civil society, can talk to each other, and occasionally cross divides to make important human rights decisions.
Furthermore, the HRC is meant to be a political body. Other parts of the UN human rights machinery are made up of independent human rights experts, and accordingly take a more impartial approach than the HRC. While their human rights findings are more credible, it also seems that states generally take their findings less seriously.
States tend to care more about what their peers think than what human rights experts might think. Hence, human rights would suffer in the absence of a relevant intergovernmental global body.
Despite its flaws, the HRC does make decisions that benefit human rights, even in the face of political lobbying by members with scurrilous motives. For example, a special rapporteur was appointed to investigate Iran (after the application of US pressure), and it remains in place, despite that influential country’s forceful efforts to dismantle the mandate. A special rapporteur on LGBTI rights was appointed in 2016, despite fierce opposition from the OIC and homophobic states, due to an alliance of developed and developing states, and civil society.
The HRC will continue to be an imperfect institution for as long as the UN is made up of states with imperfect human rights records. However, the council still can and must be improved.
But the worst way to achieve that goal is by just walking away.