Clive Palmer has a Trump-style slogan, but is no sure bet to return to parliament

Nick Economou, Monash University

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.

Right-wing struggles

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.

The only survivor of the PUP era was Tasmanian Jacqui Lambie, and even she was unable to see out her next senatorial term, thanks to problems with her citizenship.

Given all this, it would seem Palmer’s return to the fray is another manifestation of his narcissistic nature, although there is also a strong hint of opportunism behind the formation of the UAP.

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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.

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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.

Uncertain return

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.

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“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.

Nick Economou, Senior Lecturer, School of Political and Social Inquiry, Monash University

This article was originally published on The Conversation. Read the original article.

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Constant attacks on the ABC will come back to haunt the Coalition government

ABC managing director Michelle Guthrie has launched a strong defence of the public broadcaster.
AAP/Julian Smith

Denis Muller, University of Melbourne

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.

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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.

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The politics behind the competitive neutrality inquiry into ABC and SBS

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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.

Denis Muller, Senior Research Fellow in the Centre for Advancing Journalism, University of Melbourne

This article was originally published on The Conversation. Read the original article.

Anthony Albanese sets out his blueprint for Labor

Anthony Albanese is considered the Labor party’s only leadership alternative to Bill Shorten.
AAP/Ben Rushton

Michelle Grattan, University of Canberra

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.”

Michelle Grattan, Professorial Fellow, University of Canberra

This article was originally published on The Conversation. Read the original article.

Who gets what? Who pays for it? How incomes, taxes and benefits work out for Australians

Public health spending is an important factor in reducing inequality between households in Australia.
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Peter Whiteford, Crawford School of Public Policy, Australian National University

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%.

Figure 1: Effects of government spending and taxes on income inequality, measured by Gini coefficient Australia 2015-16.
Data source: ABS Government Benefits, Taxes and Household Income, Australia, 2015-16, Author provided

While most of the reduction in inequality is due to government spending, taxes are obviously important to pay for this spending.

The social security system reduces income inequality (and poverty) because Australia targets benefits to the poor more than in any other high-income country.

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.

Figure 2: Distribution of social spending ($ per week) by equivalised disposable household income quintiles, Australia 2015-16.
Data source: ABS Government Benefits, Taxes and Household Income, Australia, 2015-16, Author provided

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%.

Figure 3: Distribution of direct and indirect taxes (% of disposable income) by equivalised disposable household income quintiles, Australia 2015-16.
Data source: ABS Government Benefits, Taxes and Household Income, Australia, 2015-16, Author provided

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.

Peter Whiteford, Professor, Crawford School of Public Policy, Australian National University

This article was originally published on The Conversation. Read the original article.

Love them or loathe them, private label products are taking over supermarket shelves

Supermarkets are stocking more of their own brands even as they shrink stores.
Shutterstock

Gary Mortimer, Queensland University of Technology and Louise Grimmer, University of Tasmania

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.

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In Australia, private label products currently account for 18.1% of all retail dollar sales. The proportion is similar in North America (17.7%).

This is significantly less than supermarkets in other countries. Private label products account for 41% of supermarket sales in the UK, 42% in Spain, 36% in Germany and between 27 and 32% in most other European countries.

Why private labels?

In one academic study, 85% of the retailers surveyed said “improved margins” was their main reason for investing in private label products.

A private label product with features and quality parity with national brands may cost retailers 40% to 50% less to manufacture and distribute to customers.

Some American convenience stores claim gross margins of up to 72% on private label bottled water, for instance, compared to 45% on branded alternatives.

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Overall, supermarkets see an 8-10% premium on margins for private label products over branded ones.

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.

Consumers are currently benefiting from increased competition. Progressively higher-quality private label products are available at much lower prices than branded products.

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.

But a recent report from the European Commission actually found innovation in the food supply chain is not under pressure. And a quick wander through any major supermarket will illustrate the effort supermarkets are making to improve quality and introduce new product lines.

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Woolworths and Coles should heed simplicity lesson from Aldi

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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.

Naturally, if Coles is aiming to increase the proportion of its own branded products, minor brands will be the ones to disappear from shelves, not major brands like Coke, Cadbury or Nescafe.

As for less choice, most shoppers will not notice the difference, or may enjoy the shopping experience more.

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.

Accordingly, a successful private label strategy hinges on leveraging perceptions of both price and value. Private label products are a key weapon for Coles and Woolworths to compete with Aldi and Kaufland for price-sensitive customers.

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Australian supermarkets previously looked to local manufacturers to produce their private label ranges. However, Aldi, Kaufland, Costco and Lidl have found success by leveraging their global sourcing strategies, providing both quality and economies of scale, and so lower prices.

This appears to be on the cards for Coles. It has also announced a wish to develop new strategic global relationships to realise its 40% private label target.

This suggests that Coles may overlook local manufacturers, instead seeking out international manufacturers to produce some ranges.

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‘Honey, I shrunk the store’: Why your local supermarket is getting smaller

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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.

Gary Mortimer, Associate Professor in Marketing and International Business, Queensland University of Technology and Louise Grimmer, Lecturer in Marketing, Tasmanian School of Business and Economics, University of Tasmania

This article was originally published on The Conversation. Read the original article.

Grattan on Friday: Government celebrates on tax, fights on energy

Michelle Grattan, University of Canberra

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.

Michelle Grattan, Professorial Fellow, University of Canberra

This article was originally published on The Conversation. Read the original article.

Government set to call Senate’s bluff on income tax bill

Michelle Grattan, University of Canberra

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.”

Michelle Grattan, Professorial Fellow, University of Canberra

This article was originally published on The Conversation. Read the original article.

View from The Hill: China challenge is the issue of the moment in Australian foreign policy

Michelle Grattan, University of Canberra

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.

Michelle Grattan, Professorial Fellow, University of Canberra

This article was originally published on The Conversation. Read the original article.

ABC contributes as much to the economy as it costs the taxpayer: Michelle Guthrie

Michelle Grattan, University of Canberra

ABC managing director Michelle Guthrie has hit back against critics with a Deloitte Access Economics assessment that the public broadcaster contributed more than A$1 billion to the Australian economy in the last financial year.

This was on a par with the public funding of the organisation, she told the Melbourne Press Club, in an address coming days after the Liberal Federal Council urged the ABC be privatised – a call rejected by the government.

Far from being a drain on the public purse, the audience, community and economic value stemming from ABC activity is a real and tangible benefit,“ she said. The Deloitte study was commissioned by the ABC; Guthrie said its report was still being compiled and would be released next month.

Of the $1 billion, “more than a third is economic support for the broader media ecosystem. Far from being Ultimo-centric, the ABC is boosting activity across the country,” she said, giving as examples the filming of Mystery Road in the Kimberley and the production of Rosehaven outside Hobart.

Deloitte calculated the ABC was helping sustain more than 6000 full-time equivalent jobs across the economy. “It means that for every three full-time equivalent jobs created by the ABC, there are another two supported in our supply chain – local artists, writers, technicians, transport workers and many more.

“In hard figures, the research shows that the ABC helps to sustain 2500 full-time equivalent jobs in addition to the 4000 women and men who are directly employed by the public broadcaster.

“When broken down this equates to more than 500 additional jobs in production companies, over 400 jobs elsewhere in the broadcast sector, and close to 300 full-time equivalent jobs in the professional services.

“Amidst the debate over the ABC’s purpose and its funding we should all remember that there are 2500 jobs outside public broadcasting at risk in any move to curtail our remit and activities”.

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Read more:
View from The Hill: Threat to the ABC is not sale but more bullying

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Addressing the critics’ argument that the ABC’s about $1 billion funding wasn’t well spent, Guthrie pointed out that the broadcaster’s per capita funding had halved in real terms in three decades while the demands on it had increased, and that this financial year 92% of its budget would be spent on making content, supporting content makers and distribution.

“Thirty years ago, the ABC had five platforms and 6000 people working around the country. Today, Your ABC has two-thirds the number of people operating six times the number of platforms and services with half the real per capita funding”.

Guthrie argued that the claim that the latest 1% efficiency dividend could easily be accommodated ignored the accumulation of efficiency takes over the past four years, and the fact these efficiencies robbed the organisation of its ability to finance new content and innovation.

She rejected what she described as two other “fallacies” – that the ABC should be stripped back to servicing gaps in the market, becoming a “media failure operator”, and that the ABC served only sectional interests.

Referring to the ABC charter, she said that “as the independent national public broadcaster, our purpose is to provide a balance between broadcasting programs of wide appeal as well as specialised interest”.

Public broadcasting was “about providing the distinctive programs that Australians young and old, left and right, rich and poor, in Bourke and in Brisbane, both want and need”.

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Read more:
Shorten promises to reverse budget cut to the ABC

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She attacked those commentators and politicians who liked “to pigeonhole our audience as being of a particular political bent or social strata.

“In the two years since I’ve been in this role, I have been constantly reminded how wrong that is”, she said, citing the 12 million Australians who would watch ABC TV this week, the nearly five million who’d listen to ABC radio, and the 13 million ABC podcast downloads that occurred every month.

“If all those listeners and viewers were on the one side of politics, there wouldn’t be much politicking left to do.

“I note also the findings of the recent Reuters Digital News Report. Australia may have an increasingly polarised media sector, but ABC television attracts viewers from across the political spectrum for its news coverage”.

Guthrie said that Australians regarded the ABC “as one of the great national institutions” and “deeply resent it being used as a punching bag by narrow political, commercial or ideological interests”.

Michelle Grattan, Professorial Fellow, University of Canberra

This article was originally published on The Conversation. Read the original article.

Poll wrap: Coalition’s record Newspoll losing streak, and Rebekha Sharkie has large lead in Mayo

Recently, hard-right Coalition MPs have not had as much influence on government policy as they used to, and Malcolm Turnbull is probably benefiting from this.
AAP/Mick Tsikas

Adrian Beaumont, University of Melbourne

This week’s Newspoll, conducted June 14-17 from a sample of 1,660, gave Labor a 52-48 lead, unchanged since three weeks ago. Primary votes were 38% Coalition (steady), 38% Labor (steady), 10% Greens (up one) and 6% One Nation (down two).

This Newspoll is Malcolm Turnbull’s 34th consecutive loss as prime minister, four ahead of Tony Abbott. According to analyst Kevin Bonham, this is the worst Newspoll losing streak for a government, with Turnbull and the Coalition now one ahead of Julia Gillard’s 33 successive losses as PM.

Prior to July 2015, Newspoll was conducted by landline live phone polling with samples of about 1,100. Since July 2015, Newspoll has been administered by Galaxy Research, using robopolling and online methods with samples of about 1,700. The new Newspoll is much less volatile than the old Newspoll, so trailing parties have far less chance of getting lucky with an outlier 50-50 poll.

In this Newspoll, the total vote for Labor and the Greens was up one to 48%, and the total vote for the Coalition and One Nation was down two to 44%. This matches a late March Newspoll as the highest vote for the left-of-centre parties this term. These changes would normally give Labor a two party gain, but it is likely the previous Newspoll was rounded up to 52%, and that this one has been rounded down.

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Read more:
Poll wrap: Labor maintains its lead as voters reject company tax cuts; wins on redrawn boundaries

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40% were satisfied with Turnbull’s performance (up one), and 50% were dissatisfied (also up one), for a net approval of -10. Bill Shorten’s net approval was down one point to -22. Turnbull continued to lead Shorten by a large 46-31 as better PM (47-30 previously).

Turnbull’s ratings improvement has been sustained since the budget. It is likely he is benefiting from the tax cuts in the next financial year. Recently, hard-right Coalition MPs have not had as much influence on government policy as they used to, and Turnbull is probably benefiting from this.

While Turnbull’s ratings improved, I believe the greater focus on the government’s tax policies and the publicity regarding Barnaby Joyce are holding back the Coalition’s vote. One Nation probably slumped owing to the split between Pauline Hanson and Brian Burston, who is now a senator for Clive Palmer’s new United Australia Party.

Both Newspoll and Essential’s fieldwork was mostly conducted before the federal Liberal council passed a motion to privatise the ABC on Saturday. This vote is likely to be embarrassing for Turnbull and Coalition ministers.

The Australian has been campaigning against the Australian National University’s refusal to allow a Western civilisation course. Most voters would have heard nothing about this issue. It is not surprising that, when given a question skewed in favour of the Western civilisation course, voters backed it by a 66-19 margin.

Essential: 52-48 to Labor

This week’s Essential poll, conducted June 14-17 from a sample of just over 1,000, gave Labor a 52-48 lead, a two-point gain for the Coalition since last fortnight. Primary votes were 38% Coalition (up two) and 35% Labor (down two). Tables have not yet been published, so The Poll Bludger’s report is the best for domestic issues.

79% supported the first stage of the income tax cuts that are introduced in the next financial year, but only 37% supported the third stage, which is scheduled to be phased in from 2024 – these tax cuts would flatten the tax scales. Support and opposition to the company tax cuts were tied at 39% each.

From Peter Lewis in The Guardian, 35% thought the agreement between US President Donald Trump and North Korean dictator Kim Jong-un would make the world safer, 8% less safe, and 41% thought it would make no difference.

Despite Trump’s presidency, 50% consider it very important for Australia to have a close relationship with the US, followed by the UK at 47% and China at 39%. Russia at 17% and Saudi Arabia at 14% are at the bottom of this table.

By 54-11, voters had a favourable view of New Zealand PM Jacinda Ardern, followed by Canadian PM Justin Trudeau (54-14), German Chancellor Angela Merkel (43-18), French President Emmanuel Macron (42-15) and UK PM Theresa May (42-19). Trump had an unfavourable 64-22 rating, Russian President Vladimir Putin 56-19 unfavourable and Kim Jong-un 68-9.

Two Mayo polls give Rebekha Sharkie 58-42 leads over Georgina Downer

On July 28, Mayo is one of five seats up for federal byelections. The incumbent, Centre Alliance’s Rebekha Sharkie, was forced to resign over the dual citizenship fiasco, but will recontest. The Liberal candidate is Georgina Downer, daughter of Alexander Downer, who held Mayo from 1984 to 2008.

A ReachTEL poll for the left-wing Australia Institute and a Galaxy poll for The Advertiser both gave Sharkie a 58-42 lead over Downer. Primary votes in Galaxy were 44% Sharkie, 37% Downer, 11% Labor and 6% Greens. In ReachTEL, primary votes were 41.4% Sharkie, 35.5% Downer, 11.1% Greens and 8.2% Labor.

These poll results represent a 3% swing to Sharkie in Mayo compared to the 2016 election. The ReachTEL poll was conducted June 5 from a sample of 1,031, and the Galaxy poll June 7 from a sample of 515.

In the Galaxy poll, 62% had a positive view of Sharkie and just 10% a negative view. In contrast, 31% had a positive view of Downer and 41% a negative view.

The Centre Alliance was Nick Xenophon’s former party, and the expectation was that Sharkie would follow Xenophon down. However, it appears that she has built up a strong profile in Mayo that is independent of Xenophon’s appeal. It is likely Sharkie will defy the collapse of her party to retain Mayo.

It could be perceived that Downer thinks she should have the seat because it was her father’s seat. Other weaknesses for Downer are her membership of the hard-right Institute of Public Affairs, and her absence from Mayo for the last 20 years.

The Australia Institute ReachTEL has left-skewed additional questions. Question 2, regarding company tax cuts, gave unpopular examples of large companies — banks, mining companies and supermarkets. It then offered three options for company tax rates (increased, kept the same or decreased), with only one unfavourable to The Australia Institute’s left-wing agenda.

Three weeks ago, The Australian had a right-skewed company tax cut question in Newspoll, but left-wing organisations often do the same thing, though their profile is far lower than Newspoll.

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Read more:
Poll wrap: Newspoll asks skewed company tax cut question as Labor gains

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In brief: Darling Range (WA) byelection, Conservatives win in Ontario and Colombia

A byelection for the Western Australian state seat of Darling Range will be held on Saturday. At the March 2017 state election, Labor won Darling Range by 55.8–44.2 against the Liberals, a massive 18.9% swing to Labor from the 2013 election. However, Labor member Barry Urban was forced to resign over allegations of fraudulent behaviour. A ReachTEL poll for The West Australian gave Labor a 54-46 lead in Darling Range.

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Read more:
Labor romps to landslide win in WA election

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At the June 7 Ontario provincial election, the Conservatives won 76 of the 124 seats, the left-wing NDP 40, the centre-left Liberals seven and the Greens one. The Liberals had governed Ontario for the last 15 years. The Conservatives won just 40.5% of the popular vote, with 33.6% NDP, 19.6% Liberals and 4.6% Greens. First Past the Post, which is used in all federal and provincial Canadian elections, greatly benefited the Conservatives with the left vote split. You can read more at my personal website.

At the Colombian presidential runoff election held on Sunday, conservative Iván Duque Márquez defeated the left-wing Gustavo Petro by a 54.0-41.8 margin. Duque opposes the 2016 peace deal between the government and guerrilla fighters.

Adrian Beaumont, Honorary Associate, School of Mathematics and Statistics, University of Melbourne

This article was originally published on The Conversation. Read the original article.