The government was defeated on the ‘medevac’ bill, but that does not mean the end of the government



File 20190212 174851 1azgk58.jpg?ixlib=rb 1.1
Cross-benchers Kerryn Phelps, Julia Banks and Rebekah Sharkie celebrate the passing of the Medevac bill.
AAP/Lukas Coch

Anne Twomey, University of Sydney

The Morrison government has been defeated in the House of Representatives by the passage of a government bill containing amendments made against its wishes that allow for the medical evacuation of asylum-seekers from Manus Island and Nauru.

At the last minute, the Speaker tabled, against the wishes of the government, advice from the Solicitor-General raising a constitutional problem with the Senate amendments. In short, those amendments provided for an “independent health advice panel”, of which six members would have to be paid. Their remuneration would come automatically under an existing appropriation in the Remuneration Tribunal Act 1973 for the payment of persons who hold public offices. The effect of the amendments in the bill would therefore have increased the amount payable under that existing appropriation.

This is important, because section 53 of the Constitution says that the “Senate may not amend any proposed law so as to increase any proposed charge or burden on the people”. The argument was that even though the Senate amendments to the bill did not contain an appropriation, they would increase a burden on the people by increasing the amount automatically appropriated under the Remuneration Tribunal Act.




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Explainer: what is a hung parliament and how would it affect the passage of legislation?


Whether this is enough to trigger section 53 is a matter of dispute between the houses. Understandably, the House of Representatives has long considered that Senate amendments of that kind do breach section 53, while the Senate takes a different view.

The issue cannot be decided by a court, because the courts have held that section 53 is an internal matter for the houses, and not one to be determined judicially. This was made clear in the recent case on the same-sex marriage postal survey. So even if the houses chose to ignore section 53 and pass a bill that breached its terms, and the validity of the law was challenged, a court would not find it to be invalid.

The consequence was that this was a battlefield for the two houses. In the absence of any judicial precedents, all we have to guide us is parliamentary practice and the competing views of parliamentary committees. These do not provide clear answers. While the houses are under a moral and political obligation to obey the Constitution, this is difficult when the Constitution itself is unclear and its interpretation is disputed.

The government’s action in seeking to declare the bill to be a money bill also raised the political stakes. In order to govern, a government must retain control over government finance. Defeat on a money bill in the House of Representatives is regarded as a loss of confidence, which by convention requires the government to resign or seek an election. For example, the Fadden Government resigned in 1941 when its budget was reduced by the nominal sum of £1. So if the bill was treated as a money bill by the government, its passage against the wishes of the government would have raised a serious issue of whether it could continue governing.

However, the Labor Party moved an amendment to remove any right to payment of officers of the panel. This should mean that it is not a money bill, with the consequence that the constitutional issues about s53 should go away (although there would still be a precedent of the House of Representatives dealing with the Senate amendments, rather than rejecting their validity outright).

The bill still has to pass the Senate. If it does so, it will then be presented to the governor-general for royal assent. I have previously discussed why it would not be wise for the government to advise the governor-general to refuse royal assent. Assuming that royal assent is given, then the medevac amendments will take effect the day after the bill receives royal assent.




Read more:
Why a government would be mad to advise the refusal of royal assent to a bill passed against its will


Can the Morrison government continue to govern after its defeat on this bill? Yes. As the bill is no longer a money bill and is not one that the government has declared to be a matter of confidence, the government can continue to govern.

If the House of Representatives has truly lost confidence in the government, it can always move a vote of no confidence to make this clear. Unless that happens, the Morrison government can continue governing until the election is held.The Conversation

Anne Twomey, Professor of Constitutional Law, University of Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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View from the Hill: Shorten’s victory will bring dangerous counter strikes from a desperate government


Michelle Grattan, University of Canberra

An extraordinary amount of hype and some confected hysteria preceded Tuesday’s vote on the medical transfer legislation.

The government threw everything at trying to avoid a defeat. In a last stand, it fell back on a constitutional argument – backed by
Solicitor-General advice – that carried no practical weight and was simply circumvented by the majority that passed the bill in the House of Representatives.




Read more:
Crossbenchers must decide between something or nothing on medical transfers bill


While the government frantically attempted to thwart Labor and the crossbench, Scott Morrison also ran the line that he wasn’t that fussed. Afterwards he told a news conference: “Votes will come and votes will go, they do not trouble me.” That claim wouldn’t pass a fact check.

This was a big vote, and everyone knew it. Morrison operates a
minority government and Tuesday’s loss underscored that he can’t
automatically get his way. (Ironically, in the last days of Turnbull’s majority government, the threat of losing a House vote came from internal dissidents.)




Read more:
The government was defeated on the ‘medevac’ bill, but that does not mean the end of the government


The next test for Morrison will be on whether the House agrees to
extra sitting days to discuss the measures from the banking royal
commission. For procedural reasons, this needs 76 votes, one more than the 75 required on the medical transfer bill. The government has been leaning heavily on Bob Katter, the crossbencher who will be the key.

While the government looked rattled as the votes on the medical
transfer bill proceeded, Labor was calm and steely.

For all the talk about Labor’s misjudgement on the issue, this week it has moved cautiously and methodically.

Originally pushed by the crossbench into taking a stand on
humanitarian grounds – the bill is based on a proposal from
independent Kerryn Phelps – Labor has sought to display compassion but contain the political risk.

Bill Shorten, knowing the danger, decided the version of the bill
coming from the Senate (which Labor had supported there) left the ALP too exposed. He flagged last week he’d like a “middle” course.

So the opposition came up with amendments to give the minister wider discretion and more time in making decisions, and to limit the application of the legislation to those on Nauru and Manus now. The latter change was to minimise the “pull” factor – the extent to which the new arrangement would encourage the people smugglers.

Then it was a matter of persuading the required six crossbenchers.
They accepted in the negotiations that a modified bill was better than nothing (though there was some Greens cavilling).

In the House, the ALP troops were kept carefully in check; the emotion was turned down; the speeches from the bill’s supporters were few and brief. Labor just wanted one thing in the chamber – a win. This wasn’t the time to grandstand.

The government, wounded and worried, is seeing this as one (albeit
major) battle in the long war to the election. Its spruikers will say that in defeat it has had a victory – that Labor has given the
Coalition ammunition for the campaign.

It’s true the bill has breathed new life into the border security
debate, but whether this will be enough to do Labor serious harm is an open question. `

The ALP is always vulnerable on boats. On the other hand, boats are lower in voters’ minds than they used to be.

The government will turn up the dial by announcing “contingency plans” against fresh arrivals. Morrison, having accused Shorten of
undermining offshore processing, is already moving on to the claim that he couldn’t be trusted to be strong on turnbacks.

Goodness knows how the politics would play out if a boat appeared on the horizon in the next few weeks. You can be sure, however, that the government would be quick to tell us about it, and point the finger at Shorten.

In all this, the bill itself (which has to go back to the Senate for a tick off on the amendments) should be kept in perspective.

The minister has a veto on “security” grounds, including being able to exclude anyone who has committed a major crime. The composition of the medical panel which would have the final say on other transfers is broad and balanced.

Probably, over a period, there would be a lot of transfers out of the 1000 people offshore. But there have already been nearly 900 (some after legal action). These transfers have amounted to a backdoor route into Australia.

If the legislation in the longer term opens that door a little wider, it will also be a way of “settling” people in Australia without acknowledging that is being done.

More of the same? Or a radical change? It depends how you look at it.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Poll wrap: Labor maintains Newspoll lead but Morrison’s ratings up, and Abbott behind in Warringah


File 20190211 174890 j1yv7p.jpg?ixlib=rb 1.1
While Scott Morrison remains preferred PM, Labor maintains an election-winning two-party preferred lead in the latest Newspoll.
AAP/Ellen Smith

Adrian Beaumont, University of Melbourne

This week’s Newspoll, conducted February 7-10 from a sample of 1,570, gave Labor a 53-47 lead, unchanged from last fortnight. Primary votes were 39% Labor (up one), 37% Coalition (steady), 9% Greens (steady) and 5% One Nation (down one) – One Nation’s lowest Newspoll vote since February 2018.

43% were satisfied with Scott Morrison (up three), and 45% were dissatisfied (down two), for a net approval of -2, up five points. Bill Shorten’s net approval was down two points to -15. Morrison led Shorten by 44-35 as better PM (43-36 last fortnight).

There has been much debate in the last fortnight about Labor’s proposal to abolish franking credit cash refunds. Voters were opposed by 44-35, but this is down from 48-30 opposition in December. Opposition was strongest among those aged over 65 (59-28 opposed).




Read more:
Words that matter. What’s a franking credit? What’s dividend imputation? And what’s ‘retiree tax’?


Voters supported reducing investor tax breaks, such as negative gearing and capital gains tax deductions, by a 51-32 margin (47-33 in November).

It has been over five months since Morrison replaced Malcolm Turnbull as PM in late August 2018. In nine Newspolls, his net approval has been in the single digits, positive or negative.

The last three Newspolls of 2018 were all 55-45 to Labor, while the first two of 2019 have been 53-47. I believe the Coalition has been assisted by Morrison’s relative popularity and a greater distance from the events of last August.

In Turnbull’s last four Newspolls as PM, the Coalition trailed by just 51-49, but Turnbull’s ratings were weaker than Morrison’s, with a peak net approval of -6. However, Turnbull’s ratings would have been better if not for the hard right’s hatred of him; it is plausible that 10% of the electorate disliked him from the right. Morrison has no problem with his right flank.

The Coalition is perceived as too close to big business (see Essential below), and Greg Jericho wrote in The Guardian that the latest data are not good for the Australian economy. A key question is whether Morrison’s ratings eventually fall due to the unpopularity of most Coalition policies. Economic credibility is likely to be important if the economy slows.

Essential poll: 52-48 to Labor

Last week’s Essential poll, conducted January 23-31 from a sample of 1,650, gave Labor a 52-48 lead, a one-point gain for the Coalition since Essential’s mid-January poll. Primary votes were 38% Coalition (steady), 36% Labor (down two), 10% Greens (steady) and 7% One Nation (steady).

The fieldwork period and the sample size were both larger than usual for Essential – normally Essential is conducted over four days with a sample a bit over 1,000.

By 47-41, voters agreed that one of the reasons why there are relatively few female MPs is that women choose not to get involved with politics. By 46-39, they disagreed with the proposition that voters preferred to elect men, rather than women. By 72-20, they disagreed with women being less capable politicians. Gender quotas were supported 46-40, but Coalition voters were opposed 50-37.

37% supported a separate national day to recognise Indigenous Australians alongside Australia Day, 15% thought Australia Day should be replaced, and 40% did not support a separate day.

At least 50% thought that private health insurance companies, big banks, mining companies and big business wanted the Coalition to win the next election. Labor had a lead on this question with pensioners and people with a disability, and at least 50% with families with young children and the unemployed.

Seat polls of Warringah, Stirling and Pearce

A ReachTEL poll of the NSW seat of Warringah for GetUp, from a sample of 622, gave independent Zali Steggall a 54-46 lead over incumbent Tony Abbott. Primary votes and fieldwork dates were not included in the media report. In 2016, Abbott won Warringah by 61.6-38.4 against the Greens, and 61.1-38.9 against Labor.

60% thought Abbott’s performance as a local member poor, and 60% said they were more likely to vote for a candidate who would tackle climate change – 78% among those who had defected from Abbott.

A Labor internal poll of the WA seat of Stirling, conducted after Michael Keenan announced his retirement from a sample of 950, gave Labor a 1.5% lead after preferences. In 2016, Keenan won Stirling by a 6.1% margin. Labor and the Liberals were tied at 36% each on primary votes with 6.8% undecided.

A GetUp ReachTEL poll of the WA seat of Pearce, conducted January 16 from a sample of 674, gave the Liberals a 52-48 lead over Labor (53.6-46.4 at the 2016 election).

Seat polls are very unreliable, but Stirling and Warringah are inner metropolitan seats, while Pearce is outer metropolitan. I believe the Coalition will struggle most in better-educated inner metropolitan seats.

The three seat polls were commissioned by left-aligned groups. However, ReachTEL asks for voting intentions first. Media-commissioned polls are superior to polls from political interest groups, but seat polls are unreliable in any case.

SA byelections and NSW pill testing Newspoll

Byelections occurred on Saturday in the South Australian state seats of Cheltenham and Enfield, following the resignations of Labor’s Jay Weatherill and John Rau respectively. Labor retained both seats easily, with primary vote swings to Labor of 6.6% in both Cheltenham and Enfield since the March 2018 election. The Liberals did not contest either seat.

In an additional question conducted with last fortnight’s NSW Newspoll that had a 50-50 tie, voters were in favour of the NSW government providing a pill testing service at music festivals by a 56-35 margin. Over 70% of Labor and Greens voters supported pill testing, while Coalition voters were narrowly opposed 49-45.




Read more:
Poll wrap: Coalition gains in first Newspoll of 2019, but big swings to Labor in Victorian seats; NSW is tied


US government shutdown aftermath

On January 25, the US government shutdown ended when President Donald Trump accepted a bill that would reopen the government until February 15 without funding for the southern border wall he had demanded. The 35-day shutdown was the longest, beating the previous record of 21 days from 1995-96. Trump has suggested declaring a national emergency if Congress cannot agree to fund the wall by February 15.

In the FiveThirtyEight poll aggregate, Trump’s ratings fell to 39.3% approve, 56.0% disapprove on January 26. Since then, his ratings have recovered to 40.2% approve, 55.1% disapprove. However, Trump’s ratings among Republicans are well over 80% approve.




Read more:
Record US government shutdown harms Trump’s ratings, plus Brexit chaos and Australian Essential poll


A second shutdown could occur after talks between Democratic and Republican members of Congress broke down. To avert a shutdown, new funding must be passed by Friday (Saturday Melbourne time).

Given strong opposition to Trump in the polls, he needs the US economy to stay strong to have a reasonable chance of re-election in 2020. Despite the January shutdown, the economy added 304,000 jobs in that month.The Conversation

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

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Labor leads 53-47% in Newspoll as Shorten struggles with medical transfer bill


Michelle Grattan, University of Canberra

The government goes into the resumption of parliament this week
trailing Labor 47-53% on the two-party vote in Newspoll, unchanged
from a fortnight ago.

The poll comes as Labor’s stand on the legislation to facilitate
medical evacuations hangs in the balance, with Bill Shorten having
indicated he would like to find a compromise and speculation about a Labor retreat from its earlier support.

Shorten receives a briefing on the implications of the bill from the secretary of the Home Affairs Department, Mike Pezzullo on Monday. Shadow cabinet and caucus will discuss Labor’s position.

The opposition has been under concerted attack from the government
over its backing for the legislation, which passed the Senate last
year with ALP support.

Shorten is worried about Labor being wedged, because border protection is always a politically vulnerable area for the ALP.

Scott Morrison says the government will not shift from outright
opposition to the bill, which is based on a proposal originally coming from independent Kerryn Phelps but subsequently refined.

Newspoll, published in The Australian, has Labor’s primary vote up a point to 39%; the Coalition’s vote remains on 37%. The Greens are on 9%; One Nation is polling 5%, down a point.

Morrison has increased his lead over Shorten as better prime minister by 2 points to 44-35%.

Morrison’s satisfaction rating is up 3 points to 43%; his
dissatisfaction rating has fallen 2 points to 45%. Shorten has a net approval rating of minus 15, a worsening by 2 points.

The tactical battle over the medical transfer amendments will dominate the run up to Tuesday’s first day of the sitting. On another front, the opposition is trying to muster the numbers for extra sitting days to consider measures from the banking royal commission.

In comments on the medical transfer bill Opposition spokesman Shayne Neumann said on Sunday: “Labor has always had two clear objectives – making sure sick people can get medical care, and making sure the minister has final discretion over medical transfers.”

The bill provides that where there a dispute between the two doctors recommending a transfer and the minister, the final say on medical grounds would be in the hands of a medical panel.

The minister could override medical decisions only on security grounds (“security” is as defined in the ASIO act).

Passage of the legislation, which would require support from Labor and all but one of the crossbench, would be a big rebuff for the
Coalition.

But the government has managed to turn the heat onto Labor, claiming the legislation would undermine Australia’s border protection.

The briefing Shorten will receive will put more pressure on the
opposition, because Home Affairs will presumably reinforce the
argument it advanced in advice to the government.

The government has now declassified this advice – which last week it provided more informally to The Australian.

The advice, which has some sections blacked out, says: “The
effect of the Bill will undermine the Australian Government’s regional processing arrangements.

“Conduct which would come within the security exception to transfer
based on the minister’s reasonable belief that the transfer would be prejudicial to security, does not include all criminal conduct”.

“Ultimately, the amendments provide that the approximate 1000
transferees currently located in Papua New Guinea (PNG) and Nauru
could have access to a transfer to Australia within weeks of any Royal Assent,” the advice says.

“It is not expected that the Minister’s ability to refuse transfer on security grounds will significantly reduce the number of potential transfers”.

Neumann said on Sunday: “Labor has great respect for our national
security agencies and we’ve always worked cooperatively with them.”The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Words that matter. What’s a franking credit? What’s dividend imputation? And what’s ‘retiree tax’?



File 20190210 174873 wstlrx.png?ixlib=rb 1.1
There are words you’ll need to understand. But imputation is complex, like the tax system.
Wes Mountain/The Conversation, CC BY-ND

Peter Martin, Crawford School of Public Policy, Australian National University

You’re forgiven for being confused.

Newspapers need to economise on words. Television and radio reporters need to economise on seconds. So they use shorthand: words like “dividend imputation”, “franking credits”, and yes, “retiree tax”.

Which is fine if you already know what they mean, and pretty fine if you don’t, because you probably don’t need to. They speed things along.

Until now. Suddenly, because of their prominence in the upcoming election campaign, we are going to have to know what they mean. We are even going to have to know that one of them doesn’t mean what it seems to mean. The election might depend on it.

So here goes:

Taxable profits

If a company’s income exceeds its expenses, it has made a profit, which in ordinary circumstances is taxed at the legislated rate, which for big companies such as Telstra and the big banks is 30 cents in the dollar.

Dividends

After the tax is taken out, companies can pay some of what’s left to shareholders as a dividend, one for each share.

Last September Telstra paid shareholders a dividend of 15.5 cents per share. The previous March it was 11 cents.

Income tax

Australians pay tax on what they earn, unless the income is classified as not taxable or is below the A$18,200 tax-free threshold. The marginal rate (the rate on extra income) climbs with income, so that anyone earning more than A$180,000 (the top threshold) pays 45 cents on each extra dollar earned.

Dividends are taxable and so are taxed along with other income.

Dividend imputation

In 1987 in what he hailed as a world first, Labor treasurer Paul Keating introduced a rebate for each each tax-paying dividend recipient.

Taken off their tax would be the company tax the company had paid on the part of the profit that had been handed to them as a dividend.

It would greatly reduce the existing bias in the tax system which
taxed interest income once, but dividend income twice.

Here’s how it would work at today’s tax rates.

  • Jill owns 1,000 Telstra shares

  • Over the period of a year she gets dividends of A$265

  • To provide them, Telstra made a profit of A$379 on which it paid A$114 tax

  • Jill pays tax on the full $379 but gets a credit of A$114 that can be taken off any other tax she owes that year

  • As with other tax credits, it can be used to cut Jill’s tax bill as far as zero, but not to turn it negative. It can’t be handed to her in cash.

As Keating put it, the tax paid at the company level would be imputed, or allocated to shareholders by means of imputation credits.

But not to all of them. Non-resident (overseas) shareholders couldn’t get them, and nor could shareholders whose dividends hadn’t been franked.

Franking credits

As Keating explained, the tax credit only applied to the extent to which full Australian company tax had been paid; to the extent to which the dividends had been franked (stamped) to indicate that tax had been paid.

Not every company pays the full 30 cents in the dollar in every year. Often it is carrying forward previous losses. Only dividends from profits on which full tax had actually been paid were to be marked “fully franked”. Dividends on which tax had been partly paid were to be marked “partly franked”.

Fully franked dividends became sought after, because they brought with them the biggest franking credits. In a useful side effect, dividend imputation encouraged companies that wanted to look after their shareholders to pay full tax.

Refunds to non taxpayers

Although the particular Australian design arguably was a world first, dividend imputation or something similar is not unusual. Many countries have systems in place that to a greater or lesser degree ensure company profits are taxed only once – among them Canada, New Zealand, Chile, Mexico, Malaysia and Singapore, whose system is called “one-tier” tax.

Many that did adopt it later moved away from it, using the money saved to cut headline tax rates; among them Britain, Ireland Germany and France.

What is unusual is what Australia did next. In 2001 after more than a decade of dividend imputation, the Howard government supercharged it, paying out franking credits in cash to shareholders who didn’t have any or enough tax to offset.

From the point of the view of these non-taxpayers, dividend imputation became a negative income tax: instead of them paying the government money, the government paid them money.

As far as is known, it is an enhancement that has not been copied anywhere.

On one hand, it makes sense because it treats non-taxpayers the same as taxpayers by refunding them the same amount of company tax.

On the other hand, it does not make sense because it means that instead of being taxed once (at either the company or the personal level) as was the original intention, company profits can escape tax altogether.

Untaxed super

From 2007 the change mattered to many more retirees.

The Howard government’s “Simplified Superannuation” package made super benefits paid from a taxed source (that’s most super benefits outside of the public service) tax free when paid to people aged 60 and over.

A quirk in the wording of the Act went further. Not only did super withdrawals become tax free, they also became no longer included in “taxable income” and so didn’t need to be declared on tax forms.

This meant that many retirees on reasonable super incomes were no longer taxed at reasonable rates on their other income, including income from shares which could be untaxed if it fell below the tax free threshold.

And because of the 2001 decision to send dividend imputation cheques to shareholders who were untaxed, these retirees who suddenly found themselves untaxed also got imputation cheques mailed to them from the government.

Self-managed super funds, whose income is tax exempt in the retirement phase, also got imputation cheques.

In July 2017 the Turnbull government wound back tax free super by placing a limiting it to accounts with less than A$1.6 million. The restriction was to hit 1% of super-fund members.

Labor’s proposal

Treasury’s 2015 tax discussion paper prepared for the Abbott government referred to “revenue concerns” about dividend imputation cheques.

They cost the budget just A$550 million in the year the Howard government introduced them, but A$5 billion per year by 2018 and were on track to cost A$8 billion.

Labor’s proposal, announced in mid March 2018, was to return the divided imputation system to where it had been before Howard changed it in 2001, and to where it still is elsewhere. Tax credits could be used to eliminate a tax payment but not to turn it negative.

Labor allowed exceptions for tax exempt bodies such as charities and universities who would continue to receive imputation cheques alongside dividends.

Pensioner guarantee

Two weeks later, in late March, Labor amended its policy by adding a “pensioner guarantee”. Pension and allowance recipients, even part pensioners, would be exempt from the changes and would continue to receive cash payments.

Also exempt would be self-managed super funds with at least one member who was receiving a pension or part-pension at the date of Labor’s announcement, 28 March 2018.

The change cost relatively little (the budget saving over the next four years fell to A$10.7 billion from A$11.4 billion) because most of the imputation cheques go to Australians with too much wealth to get even a part pension.

Self Managed Super Funds

Retail and industry super funds pool their members contributions, and so almost always have tax to reduce, meaning most would be unaffected by the withdrawal of cash credits.

Self Managed funds usually represent just one person, or a couple; their funds aren’t pooled with anyone else’s. This means that in the retirement phase, where fund earnings are untaxed, most do not have enough tax to reduce. So they get imputation cheques, which they would no longer get when Labor’s policy was implemented.

The Parliamentary Budget Office expects some self-managed funds to change their investment mix and some owners of self-managed funds to transfer their investments to retail or industry funds.

Retirement tax

There is no such thing. The phrase is shorthand for Labor’s proposal to withdraw dividend imputation cheques from dividend recipients who are outside the tax system.The Conversation

Peter Martin, Visiting Fellow, Crawford School of Public Policy, Australian National University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Tim Wilson’s ‘retirement tax’ website doesn’t have a privacy policy. So how is he using the data?


Andre Oboler, La Trobe University

A growing debate over Labor’s policy to end cash rebates for excess franking credits has led to calls for the chair of parliament’s economics committee, Liberal MP Tim Wilson, to resign.

Labor has accused Wilson of using a parliamentary inquiry into the policy to spearhead a partisan campaign against it.

Part of the controversy revolves around a website Wilson is promoting – stoptheretirementtax.com – that initially required people who wanted to register to attend public hearings for the inquiry to agree to put their name to a petition against the policy. Wilson described this as a “mistake” that has since been fixed.

But there’s another issue with the website that’s worth taking a look at: if it complies with privacy law.

Political parties are exempt from the usual privacy rules, so we need to know if stoptheretirementtax.com is a Liberal party website or government website. The answer has implications for whether privacy law may have been breached, and if the data collected can be used for political campaigning in the upcoming federal election.




Read more:
Australia should strengthen its privacy laws and remove exemptions for politicians


A party or parliamentary website?

Stoptheretirementtax.com was registered anonymously on October 31. While it’s a requirement of website registration for owners to be publicly listed, in this case a domain privacy service was used to hide those details.

By mid-November the site was being shared by a financial services company with their clients, who said that Wilson had sent the website details to them. In several tweets promoting the inquiry in November, Wilson didn’t mention the site.

The site was promoted publicly in January, when Wilson tweeted six times that people should use it to register for hearings in Queensland and New South Wales.

In these tweets, Wilson identified himself as both the Liberal MP for Goldstein and the Chair of the Economics Committee.

By contrast, stoptheretirementtax.com doesn’t mention Wilson’s electorate or political party. The bottom of the site has the Australian coat of arms with the words “Chair of the House Economics Committee”. Wilson’s parliamentary contact details appear alongside a statement that reads:

Authorised by Tim Wilson MP, Chair of the Standing Committee on Economics.

The confusion around whether stoptheretirementtax.com is an official government website begins with the website’s domain name. It’s based on a slogan coined by Wilson Asset Management, a financial services company that is actively campaigning against Labor’s policy on franking credits. The site also uses a photograph the company has used in their campaign, and Wilson has said Wilson Asset Management were consulted in the site’s development.

Then there is the text, which reads:

At the next election your financial security will be on the ballot … Labor are attacking your full tax refund. After the election they want to scrap refundable franking credits. That will hit your security in retirement and risk pushing many vulnerable retirees below the poverty line.




Read more:
The Australian public cares about privacy: do politicians?


What data is being collected?

Stoptheretirementtax.com is collecting personal information. Visitors who wish to send a submission to the inquiry or register to attend public hearings are required to provide their name, email address, mailing address and phone number.

Visitors who want to send a submission to the standing committee on economics are offered a box with pre-filled text. A small note reads: “feel free to edit, or write your own”. A second box invites visitors to share their story.

Design features such as the colouring of the text could be seen to discourage editing of the first box while directing people to the second, meaning many people who submit a response will likely end up including the pre-filled text in their submission.

When registering for the public hearings, users are offered two check boxes (pre-checked), which state:

I want to be registered for the petition against the retirement tax

I want to be contacted on future activities to stop the retirement tax.

Until Sunday, it was impossible to register for a hearing without also signing the petition. Tim Wilson has said this was an “error”. The required check box for hearings and the design of the submission boxes may in fact be a dark pattern – a use of design feature to manipulate users into making the decision the site owner wants.

The site contains no privacy policy or indication of who the data is shared with or how it will be used.

On Monday, a page for the inquiry was added to the Australian Parliament’s website describing itself as the “the official page of the committee”. It states that submissions to the inquiry can be made via the Parliament’s submission system or by email. It also explains that “pre-registration is not required to participate” in the hearings.

A matter of privacy

Australian privacy is largely regulated by the Privacy Act and the Australian Privacy Principles it contains. Registered political parties are exempt, but stoptheretirementtax.com does not appear to come from a registered political party.

To assert it is campaign material from a registered political party at this stage would raise electoral law issues. The Commonwealth Electoral Act requires that registered political parties identify themselves in the authorisation statement on their political materials. Stoptheretirementtax.com has no such authorisation.

The Privacy Act does apply to government agencies, including ministers, departments and people:

holding or performing the duties of an appointment… made… by a Minister.

The Chair of a Standing Committee is “appointed by the prime minister”, making them an agency subject to the Australian Privacy Principles.

The Australian Privacy Principles requirements for government agencies include:

  • being open and transparent about how personal information is managed, including having a privacy policy
  • explaining why they are collecting, holding, using or disclosing personal information
  • only collecting personal information if it is reasonably necessary or directly related to one of their function or activities
  • only collect personal information by lawful and fair means
  • disclosing who else the personal information would usually be shared with

A failure to comply with the Australian Privacy Principles may put personal information at risk and can attract the attention of the Information Commissioner, who regulates privacy.

What about parliamentary privilege?

The Australian Law Reform Commission noted in 2008 that:

Ministers engaging in their official capacity are bound by the Privacy Act, while MPs engaging in political acts and practices are not.

A Committee Chair would likely be similarly bound only while acting in that capacity.

Some of the time, while acting in their capacity, they may be effectively exempt from the Privacy Act due to parliamentary privilege.

Section 16(2) of the Parliamentary Privileges Act reasserts a right of immunity going back to the Bill of Rights of 1688. It covers:

all words spoken and acts done in the course of, or for purposes of or incidental to, the transacting of the business of a House or of a committee.

That doesn’t mean the principles don’t apply, just that enforcing corrective action may be beyond the reach of the courts. Parliament has its own processes that could still be used to address concerns.

The usual rules, enforceable by the courts, may still apply in circumstances where a committee chair is acting in that capacity, but outside the business of the committee.

Advocacy activities, like running a petition or soliciting contact details for political action may not be something “for the purpose” or “incidental” to the business of a committee. In fact, publishing an overtly political website may itself step outside the protection – as it is the committee and its parliamentary work, not the activities of the chair per se, that attract the privilege.




Read more:
Australians’ trust in politicians and democracy hits an all-time low: new research


Reaching a resolution

The best resolution would be for Tim Wilson to take down the site (particularly in light of the new official site), pass to the Committee Secretariat any information they require (such as submissions), then delete all personal information he has collected through the stoptheretirementtax.com website.

A full disclosure of who data may have been shared with, where it was held and how it was secured would also help. If data has been disclosed to anyone other than the Parliamentary Committee, those who have been impacted should be informed. The Information Commissioner should be consulted for guidance and assistance.

The broader lesson is that privacy must be taken seriously. The Australian Privacy Principles are designed to ensure transparency and accountability. The lack of a privacy policy on the website should have served as a warning.The Conversation

Andre Oboler, Senior Lecturer, Master of Cyber-Security Program (Law), La Trobe University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Morrison plays scare card on medical transfer bill


Michelle Grattan, University of Canberra

As the battle escalates ahead of next week’s vote on legislation to
facilitate medical transfers from Manus and Nauru, Scott Morrison is playing up the dangers if the bill passes while downplaying the
political implications.

Morrison declares the amendments, based on a proposal from independent Kerryn Phelps, would leave the government powerless to stop the entry of a paedophile, rapist or murderer.

“It doesn’t provide for the usual arrangements which would enable us to reject someone coming to Australia because they have a criminal history.

“They may be a paedophile, they may be a rapist, they may be a
murderer and this bill would mean that we would just have to take
them,” he said on Wednesday while campaigning in Melbourne.

Morrison raised the spectre of “hundreds upon hundreds upon hundreds of single males being transferred … at the directive of doctors, not the government.

“This will mean we will have to reopen detention centres that we
closed, like Christmas Island.”

But the Prime Minister has been anxious over the last two days to hose down talk that a government defeat on the bill could lead to an election.

“If we lose that vote next week, so be it. We won’t be going off to
the polls. The election is in May. I will simply ignore it and we’ll get on with business,” he told Sky on Tuesday.

Asked on Wednesday whether a loss would be a trigger for an election Morrison said: “Of course not. Why would it be?”




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Why a government would be mad to advise the refusal of royal assent to a bill passed against its will


The government is firmly locked into the May election timetable and
its April 2 budget that it will use to frame the poll. Passage of the medical evacuation measure would not amount to a vote of no
confidence.

Meanwhile Labor on Wednesday released its legal advice, from barrister Matthew Albert, arguing that the legislation would add to, rather than detract from, present security protections.

“The minister’s power to exclude a person from transfer to Australia is expanded beyond the security protections of the existing law,” the December advice says.

“The expansion empowers the minister to have regard to questions of
both public safety ‘and border integrity’ before a person is
transferred”.

The measure, passed by the Senate last year, would allow the transfer on the advice of two doctors but the minister could intervene on security grounds.

At central issue is the adequacy of the definition of “security” – the bill draws this from the ASIO act.

The government maintains this definition, with its focus on national security, is too narrow, while the ALP’s advice argues it is broad.

Under the ASIO act, “security” means:

“(a) the protection of, and of the people of, the Commonwealth and the several States and

Territories from:

(i) espionage;

(ii) sabotage;

(iii) politically motivated violence;

(iv) promotion of communal violence;

(v) attacks on Australia’s defence system; or

(vi) acts of foreign interference;

whether directed from, or committed within, Australia or not; and

(aa) the protection of Australia’s territorial and border integrity
from serious threats; and

(b) the carrying out of Australia’s responsibilities to any foreign
country in relation to a matter mentioned in any of the subparagraphs of paragraph (a) or the matter mentioned in paragraph (aa).”

As in present arrangements, under the bill transferees would be
immediately detained and only released from detention if the minister determined this was in the “public interest”.

“This is a broad test which allows the minister to have regard to any issues of security or character relating to that person,” the advice says.

On the last sitting day of 2018 the legislation potentially had the
required crossbench support to be carried in the House but a
government filibuster prevented it reaching there for a vote.

The government is lobbying crossbenchers intensively, while keeping the public heat on Labor. It has also undertaken to set up a medical panel to review transfers from Manus and Nauru.

In his Tuesday Sky interview Morrison played down the significance of this gesture.

“All that I have done is made sure that the Australian people have got an assurance about how well that [present] process works. They can’t change the decisions, they can’t reverse the decisions, the decisions all remain with the Department of Home Affairs”.

But Bill Shorten said he thought the government was “starting to do a backflip”.

“They may be doing it because they don’t want to lose a vote in
Parliament, but I’m not going to be a purist, if they get to an
acceptable outcome I’m not going to judge their motivation.”

Labor would have a look at the government’s position “but this stage we’re still supporting the Phelps amendments,” Shorten said.

Replying to Morrison, Phelps said:“The large majority of people on Manus Island and Nauru have been assessed as genuine refugees. Under the Refugee Convention, they cannot be granted that status if they have committed a serious crime, a hate crime or a war crime in their country of origin.”

The government faces pressure of another front next week, as Labor
tries to muster the numbers for its call for parliament to have extra sitting days to consider recommendations from the banking royal commission. It would need the support of all the crossbenchers to pass its motion but the stand of Bob Katter is not clear.




Read more:
Shorten: we should legislate on Hayne recommendations before election


The Conversation


Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Hayne’s failure to tackle bank structure means that in a decade or so another treasurer will have to call another royal commission


Andrew Linden, RMIT University and Warren Staples, RMIT University

Every 10 to 15 years it’s the same.

Ever since financial deregulation in the 1980s we’ve had a finance industry scandal followed by an inquiry, a quick fix, and a declaration that it shouldn’t happen again.

In the early 1990s there were royal commissions into the A$1.7 billion Tri-continental/ State Bank Victoria collapse, the A$3.1 billion State Bank of South Australia collapse and the WA Inc collapse which explored the interrelated activities at Rothwells bank, the A$1.8 billion collapse of Bond Corporation and the A$1.2 billion siphoned from Bell Resources.

A decade later in 2003 Justice Owen reported on the A$5.3 billion collapse of Australia’s largest insurer HIH.

And now, bang on schedule, we have Kenneth Hayne delivering the final report of a royal commission into systemic misconduct in banking, superannuation and financial services industry to a government that voted 26 times against holding it.

There are two particularly striking things about the 10-15 year cycle.

One is the rhythm of public inquiries followed by reports, then (sometimes) trials, then books, then almost everyone forgetting (except for those personally scarred) only for problems to resurface later.

The other is that the times between have been punctuated by government-commissioned banking and financial system reviews: the 1991 Campbell Inauiry, the 1996 Wallis Inquiry, the 2010 Cooper superannuation review and the 2012 Murray Review . Each either missed or downplayed the links between poor governance, industry structure, systemic misconduct and prudential risk.

Has Kenneth got the frequency right this time?

Commissioner Kenneth Hayne’s 1000-page final report hasn’t gone far enough to end this cycle.

While his referral of 24 misdeeds for possible criminal and civil prosecution will help in righting past wrongs and perhaps focus the minds of directors and executives, the impact will be generational rather than permanent.




Read more:
Compensation scheme to follow Hayne’s indictment of financial sector


The flurry of prosecutions and actions will again reveal problems with the law – gaps in coverage, inadequate penalties and cases the law won’t allow to stand up.

Taken together the recommendations are a patchwork of measures that if implemented will over time be eaten away – and at some point will be dismantled – because the rationale for their adoption will be forgotten.

Even before they are implemented they will have to run the gauntlet of a massive subterranean lobbying effort from industry to water them down, something Hayne indicated he expected.

The deepest flaw lies unaddressed…

Even though Hayne emphasises the link between systemic misconduct, governance, structure and prudential (system-wide) risk, something that Treasury, the RBA and Australia’s three business regulator amigos, APRA, ASIC and the ACCC, have long rejected, he makes no concrete suggestions to tackle it.

As we have written previously, research tells us big systemically important shareholder-focused universal for-profit banks that cross-sell products are more profitable than smaller banks in the good times but are more prone to misconduct and to failure in the worse times.

Australia’s big four fit the bill – they’re big, they have been vertically integrated one-stop shops, they are very, very profitable and they are very focused on shareholder returns.

While the banks, apart from Westpac, have divested themselves of wealth management and insurance arms for now there is nothing stopping them reacquiring them in the future.

This means we are once again 10 or 15 years away from systemic misconduct resurfacing as big banks seek to become more profitable.

…and putting the onus on directors won’t much help

While heads might roll in yet another round of internal investigations to fix bank culture, it is wise to remember that as Adele Ferguson observed ANZ’s internal investigation of the Opes Prime collapse left the bigger governance lessons “unlearned”.

Directors and senior executives of failed companies continue to live charmed lives.

The directors of Babcock and Brown were cheered as they left the building, while friends and family of the disgraced One.Tel director Jodee Rich have resurfaced at Hayne and other public inquiries.

Some of the One.Tel directors have had long corporate careers. The former chair at of the collapsed Allco Finance Group Bob Mansfield went on to review the ABC.

As Adam Schwab bluntly put it, “corporate Australia is nothing if not forgiving”.

It’ll chase horses rather than close doors

Hayne is persisting with a chasing bolting horses approach to misconduct that relies on detection and enforcement.

We have argued this approach is just not as a effective as other alternatives such as two-tier boards and employee directors which have a better track record of keeping stable doors closed and horses tethered.




Read more:
Banking Royal Commission: no commissions, no exemptions, no fees without permission. Hayne gets the government to do a U-turn


Without them we could very easily have another crisis and another royal commission in 15 to 15 years time.

Ireland has taken a been prepared to change corporate structures. After the meltdown of its financial system triggered by the end of a “classic vanilla property boom” its parliament legislated to appoint public interest directors to the boards of its failed banks.

These changes were designed to ensure banks directors put the public interest first, ahead of shareholders interests and even customers interests.

It’s beyond time we did it here.The Conversation



Andrew Linden, Sessional Lecturer, PhD (Management) Candidate, School of Management, RMIT University and Warren Staples, Senior Lecturer in Management, RMIT University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Shorten: we should legislate on Hayne recommendations before election


Michelle Grattan, University of Canberra

As Labor seeks to get maximum political mileage from the banking royal commission report, Bill Shorten on Tuesday asked Scott Morrison for extra parliamentary sitting days to pass legislation to implement some of its recommendations.

In a letter to Morrison, Shorten said both houses should be recalled on March 5-7 and March 12-14. The sitting calendar has only 10 sitting days before the election.

“While there are many significant priorities facing the parliament,
there is no more pressing priority than addressing the recommendations of the royal commission,” he said in his letter.

Shorten said it was “deeply regrettable” that the government had not given in-principle agreement to all the commission’s recommendations.




Read more:
Banking Royal Commission: no commissions, no exemptions, no fees without permission. Hayne gets the government to do a U-turn


Both government and opposition have left themselves some wriggle room on the question of implementation, particularly on timing, while seeking to convey the message they are embracing everything
commissioner Kenneth Hayne has recommended.

The government has said it will be “taking action” on all 76
recommendations. But it is not, for example, implementing for the time being the recommendation that the borrower, not the lender, should pay the mortgage broker fee for acting on home lending. It says this could reduce competition.

The opposition says it accepts all recommendations “in principle”.

In his letter Shorten said he noted that “the government has agreed to
some important legislative changes” arising from the commission.

“After taking so long to recognise a royal commission was necessary, Australians will not accept any further delaying tactic from your government,” he said.



“Over the past 24 hours, Treasurer Josh Frydenberg has appeared to use the small number of remaining sitting days as an excuse to delay legislative changes. This should not be the case.”

Measures Labor nominates that should be legislated at once include
ending grandfathering commissions for financial advice; prohibiting
hawking of superannuation and insurance; application of unfair
contract terms provisions in the Australian Consumer Law to insurance; and the closing of loopholes to protect consumers, such as removing the exemptions for funeral expenses policies.

But the government, which is now in a minority in the House of
Representatives, is anxious to minimise its exposure in parliament.




Read more:
Compensation scheme to follow Hayne’s indictment of financial sector


Shorten received short shrift, with a government spokesman saying
there was already “legislation in the parliament that deals with a
number of the royal commission’s recommendations and even goes
further, but Bill Shorten and Labor have been fighting it tooth and
nail.”

The legislation the government is referring to includes increased
penalties for white collar crime, and the Protecting Your Super
legislation and increased powers for APRA.

“We won’t be lectured by Bill Shorten who still hasn’t outlined which recommendations Labor would implement,” the spokesman said.

Former prime minister Malcolm Turnbull, whose government finally
called the royal commission after continually rejecting pressure for one, said he regretted it had left it so long. “I think we should have got on with it earlier, ” he said on Tuesday.




Read more:
Six questions our banks need to answer to regain trust


He said “the reason I didn’t support a royal commission and the government didn’t – and that was a collective view of the government, not just mine – was because I could see what the problem was, a failure of responsibility and trust, and I wanted to get on and deal with it immediately.

“I didn’t want to have the delay of the royal commission”.

Frydenberg said he would be speaking to the banks directly “and my
message will be the same privately as it is publicly, that they must do better, that they need to reform, that they need to change the culture within their own organisations and that consumers must come first, second and third.”The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Grattan on Friday: What Labor has to fear is the Big Scare


Michelle Grattan, University of Canberra

Asked this week to nominate Labor’s main problem, one insider said
“time”. As the very remote possibility of a March election drifted
away, the opposition bunkered down for the long wait until May 11 or
18.

Labor has an entrenched lead in the polls and, from its frontbench to
its campaign planning, it is match-ready. But there’s no match at the moment. While some government MPs worry things will get even worse for them as time passes, it can equally be argued that the downside risk for Labor is as great.

This revolves around how effective the scares being rolled out against
the ALP will be.

Though it is generally believed a minor miracle would be needed to
rescue the Morrison government, the Coalition judges the best way to
“save furniture” is to wave the fear flags.

“Scare” campaigns are distasteful but potent: Labor’s Mediscare in
2016 was dishonest but brutally effective.

This is well-ploughed territory. In notes written at the time, then
Liberal federal director Tony Eggleton documents the success of the
Coalition’s 1980 fear-mongering.

The election “was particularly heavy going … the opinion polling was
not encouraging” for the Fraser government, Eggleton wrote. Then
“Labor inadvertently tossed us a lifeline in the final stages of the
campaign.

“One of their spokesmen cost the opposition dearly by raising, albeit
tentatively, the prospect of capital gains taxes on the family home.
We jumped on this and the unpalatable new tax was made the dominant
issue for the last week of the campaign.

“Television and radio messages and full page press advertisements
warned of Labor’s threat to the family home. The day before election
day our pollster Gary Morgan was able to report that for the first
time in the campaign the polls showed us drawing ahead of Labor. He
predicted the possibility at the last minute we had enough momentum to
get over the line”.

Which Malcolm Fraser duly did.

Eggleton also recorded that “the negativity and the tactics were
controversial even among the Liberals but the political hardheads were
of the view that the end justified the means”.

The Morrison government has been stepping up its scares since the
start of the year. Two major targets are Labor’s proposed crackdown on
negative gearing and capital gains and its plan to scrap cash refunds
for franking credits (both cast against the background of Labor
raising taxes). A more general scare is being run claiming a Shorten
government would harm the economy.

The latter illustrates how scare campaigns can be complex and carry
the danger of backfiring.

In a Tuesday speech Scott Morrison claimed a Labor government would lead to a “weaker” economy. He didn’t say it would put Australia into recession, but he highlighted that many workers hadn’t experienced a recession – enough for an Age headline “PM warns recession on way under Labor”. Defence Minister Christopher Pyne declared unequivocally: “There will be a recession in Australia if Labor wins”.

Morrison then found himself on the spot, caught between what he’d said, what he was taken as implying, and what Pyne had asserted.

Amid the confusion, it’s unclear whether this scare would have been a
plus or a minus for the government. It contained another risk too –
any talk of a recession is itself bad for the economy, including for
overseas perceptions of Australia.

The scares over the negative gearing and franking policies are less
complicated, focusing on and magnifying the losers.

Labor first announced its negative gearing revamp last term, when
house prices were rising. Since then, prices in Sydney and Melbourne
have been falling.

This has made it easier for the government to whip up concerns about
the impact of the policy on house values.

The centrality of their house in the thinking of so many Australians
makes this hazardous territory for Labor, however rational its policy.

In the changing circumstances, Labor does have a modest element of
flexibility to play with, because it has not yet announced the start
date.

But to fireproof itself on negative gearing, Labor needs to work harder
on both reassurance (the fact existing negatively-geared properties
would be grandfathered) and selling the policy’s advantages (linking it more strongly to the aspirations of first home buyers).

Anything that affects retirees is another highly sensitive area electorally.

It has been reported that Labor is discounting the political impact of
its franking credits policy because it calculates that many of those hit are already likely to be Liberal voters.

But it would be unwise to be complacent – in the way the Liberals were
for a time about Mediscare in 2016.

And in the hyped climate before an election, any throwaway line can be
weaponised, as shadow treasurer Chris Bowen found this week.

Under questioning about a listener’s view on the franking
issue, Bowen told the ABC: “I say to your listener: if they feel very
strongly about this, if they feel that this is something which should
impact on their vote they are of course perfectly entitled to vote
against us”.

It was a statement of the obvious, although it also came across as
reflecting some frustration.

But the comment took off in the media. “ALP goads seniors: vote
against us”, The Australian headlined its Thursday lead story.
Morrison said the Bowen comment was “arrogant”; Bill Shorten was grilled.

None of the above is to overlook that the government has had another
bad few days, despite Newspoll giving it a small summer lift (from
trailing 45-55% before Christmas to 47-53% now).

Two more ministers, Michael Keenan and Nigel Scullion, have announced
they will leave at the election.

Three high profile independents have emerged in heartland Liberal
seats: Zali Steggall in Warringah; Oliver Yates in Kooyong, and Julia
Banks (Liberal defector now on the crossbench) who plans to run in
Flinders.

All three are highlighting climate change and the fractures in the
Liberal party.

The prospects for Yates and Banks are low but Steggall is a real threat
to Tony Abbott in Warringah.

The government in general remains in bad shape on multiple fronts, and
Scott Morrison often sounds desperate.

The Coalition does have the April 2 budget as an opportunity to
improve its fortunes – on the other hand, if that goes badly it will
be another own goal.

The budget will offer the sugar, the incentives, the bribes to voters.
But it will be the scares that will be the government’s strongest
ammunition. The question will be: how far can these bullets penetrate
Labor’s armour?The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.