Shorten’s subsidy plan to boost affordable housing



File 20181215 185249 1xa2lk8.jpg?ixlib=rb 1.1
Labor would work with community housing providers, the residential construction sector and institutional investors.
Flickr, CC BY

Michelle Grattan, University of Canberra

Institutional investors would receive long-term subsidies to build new dwellings – on condition they rented them out below market rates – under an affordable housing program Bill Shorten is announcing on the first day of Labor’s national conference in Adelaide.

A Labor government would offer 15-year subsidies – $8,500 a year – for investors building new homes provided they charged rent at 20% under the market rate.

The program would cost A$102 million over the forward estimates to 2021-22 and A$6.6 billion over the decade to 2028-29. The costing was done by the Parliamentary Budget Office.

In his Sunday announcement, Shorten says that the ALP’s ten-year plan to build 250,000 houses and units would be Australia’s “biggest ever investment in affordable housing”. The plan includes 20,000 dwellings in the first term of a Labor government.

“This is a cost-of-living plan, a jobs plan and a housing plan. It will give working families a fair go to put a roof over their head now – and save for their own home in the future.”

He says these dwellings would be available to renters on “low and moderate incomes”. A family paying the average national rent of $462 a week could save $92 a week.

Labor would work with community housing providers, the residential construction sector and institutional investors.

“Labor’s plan will provide investors with certainty to build – knowing that they will have long-term government support and guarantees beyond the decade.”

Shorten says access to housing is one of the biggest challenges to dealing with intergenerational inequality, as an increasing “wealth gap” locks people out of the housing market.

“Increasing the supply of affordable housing is critical to addressing pressures on disposable income and, in turn, addressing inequality.

“Labor’s plan will deliver affordable, environmentally sustainable housing that helps to reduce energy consumption and cost-of-living pressures on Australian families.”

Shorten says the existing rental scheme – the National Rental Affordability Scheme – has attracted private investment of about A$12.9 billion, delivering 37,000 dwellings in a decade.

“Despite this success, the Liberals have abandoned affordable housing and axed the subsidies that encourage affordable housing. There is a severe shortage of affordable rental housing in Australia and many families are struggling to find and keep a roof over their heads. The number of Australians experiencing rental and mortgage stress is at record levels.”

The Australian Housing and Urban Research Institute estimates a shortfall of more than 525,000 affordable rental properties, Shorten says.

Overseas students, temporary foreign workers and other non-residents would not be eligible to rent under the Labor scheme.

Shorten says the plan would support the ALP’s reforms to negative gearing, “which direct concessions to newly built premises and encourage housing construction”.

Labor hopes that the three-day conference will end the year on a high note for the opposition, after its strong two-party performance in polling during 2018. Maximum effort has been made to ensure that internal policy differences are managed to avoid damaging public divisions.

Shorten told a press conference on Saturday that he hoped to see “energetic, enthusiastic debate” at the conference.

He said “perhaps the most valuable proposition that Labor presents the Australian people at the federal election within the next five months – it’s a united team, it’s energetic and it’s a team with vision”.

Shorten defended his undertaking that Newstart would be reviewed ahead of an ALP government considering an increase.

“I think Newstart is too low. I don’t think anyone who says that it needs to increase is wrong.

“But what we’ll need to do from government is review the level and understand the implications of increasing Newstart, along with the impact on all of our other taxes and payment systems.

“We have to look at what we can afford as a nation. But we’re not reviewing Newstart to decrease it.”

On the sensitive issue of asylum-seeker policy, Shorten told his press conference a Labor government would put whatever resources were needed into stopping boats.

It would also support regional and offshore processing. It would take refugees into Australia – “properly, not via people smugglers”.

“We want to be a good international citizen – we also recognise, however, that we’ve got to make sure that whatever policy we adopt we can afford, and that it meets our combined goals of not keeping people in indefinite detention on Manus and Nauru but also keeping our borders strong, so we never again see the people-smuggling trade start up.”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.

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Shorten pledges $500 million for UNHCR in border protection policy


Michelle Grattan, University of Canberra

Bill Shorten has promised Labor will commit $500 million over five years to the United Nations High Commissioner for Refugees in a policy designed simultaneously to reassure voters and satisfy the party on the politically sensitive issue of border protection.

This was among proposed new measures on asylum seeker policy the opposition leader announced to the ALP national conference on Monday morning, preempting a debate later in the day, to ensure internal party differences were minimised.

He said the $500 million would directly improve orderly regional processing and resettlement in the region and countries closer to where refugees originally came from. The funding would “speed up legitimate settlement pathways – it will deny people smugglers a product to sell”.

Portraying Labor as tough on borders, but humanitarian on refugees, Shorten said that if he became prime minister, he would take immediate advice from the chief of the Australian Defence Force, the Home Affairs Department, ASIO and other agencies about Australia’s state of preparedness to disrupt people smuggling operations before people departed.

Labor would triple the number of Australian Federal Police working overseas to stop people smugglers and prevent people even contemplating getting on boats.

An ALP government would expand the existing community sponsored refugee program from the current number of 1,000 to 5,000.

“This means state and local governments, community organisations, businesses and unions and faith-based institutions will be able to sponsor humanitarian entrants into Australia and support the economic and social integration of refugees into communities,” Shorten said.

He said the expansion would be in addition to Australia’s existing humanitarian intake, so a Labor government would take more refugees overall as part of its migration mix.

Shorten reaffirmed Labor’s commitment to turnbacks and offshore processing, saying “it is not a crime to want to come to this country. But it is a crime to exploit vulnerable people to put them in dangerous and unsafe vessels and have them drown at sea”.

“We cannot, we must not, and we will not permit the reopening of their
trade in human desperation and the drownings and the irreplaceable loss of life that it brings.”

This required pursuing regional resettlement, turning back boats when it was safe to do so and maintaining offshore processing.

“But also … we understand that keeping our borders secure, and keeping people smugglers out of business should and never has meant leaving women and children to languish for years and years in indefinite detention in sub-standard facilities and unacceptable conditions”

“It has never meant allowing peoples’ mental and physical health to deteriorate whilst under direct or indirect Australian care. It has never meant fighting every step of the way against medical advice which says that more needs to be done to treat people”

“I believe that Australia can meet our international humanitarian and legal responsibilities without compromising our national security for a commitment to strong border protection,” Shorten said.

A Labor government would take up New Zealand’s offer to resettle refugees from Manus and Nauru by immediately negotiating an agreement on similar terms to the current deal with the United States.

In a counter attack against the Coalition, which is running hard on the ALP being soft on borders, Shorten accused the government of “telling lies about Labor” and thereby “doing the dirty work of the people smugglers.

“The Liberals are acting as spruikers for the criminal syndicates. Every time they get up and say that there will be a change in terms of border security, they are signalling criminal syndicates to try their hand again.

“They should be ashamed, they know what they do and they still do 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.

Labor’s housing pledge is welcome, but direct investment in social housing would improve it


Julie Lawson, RMIT University and Laurence Troy, UNSW

Despite recent falls in the housing market, housing costs and indebtedness bite deeply into household budgets, especially at Christmas time. Just over 433,000 households confront housing stress and homelessness every day across Australia. They represent the current shortfall of social housing.

If Christmas offers a moment for reflection, ask yourself what should our resolutions be for the housing market? What should we expect our governments to do about it?

In this article, we look at this week’s major statement on housing policy from a key contender to lead Australia’s next government – made by Bill Shorten at the ALP national conference.

We applaud the principle of fairness and the ambition of the ALP policy. We are less supportive of the reliance on for-profit investors, market rent mechanisms and land grabs. Our research shows direct government investment in social housing is ultimately far more efficient and effective than subsidising investors in the long term.




Read more:
Australia needs to triple its social housing by 2036. This is the best way to do it


So what is Labor’s policy?

Shorten’s announcement also pledges reform of tax concessions that are driving inequality between households and investors. However, Labor recognises that this might not be enough to tilt the balance in favour of low-income households, and directing the savings from these changes into housing programs is a welcome move.

Labor proposes to subsidise investors in affordable rental housing, much like the Rudd government’s National Rental Affordability Scheme (NRAS). Labor would offer an $8,500-a-year subsidy over 15 years to investors who build new homes for low-income and middle-income households to rent at an “affordable” rate – 20% below market rent.

Starting modestly, the program aims to produce 20,000 affordable units over three years, building to a much larger target of 250,000 dwellings over ten years.




Read more:
Shorten’s subsidy plan to boost affordable housing


State governments would also be required to get on board through partnership agreements, as they have done in the past, providing land and other forms of co-investment. Hefty stamp duty revenues in recent years should make this easier for the states.

While Labor’s targets appear high by recent standards, Commonwealth and state governments directly funded the building of 9,000 public housing dwellings each year for the better half of the 20th century – until 1996. Annual production is now down to 3,000 dwellings. That’s not even enough to maintain the existing public share of housing.

Since the mid-1990s, a preference for outsourcing social responsibility through private rental providers and indirect rental support payments has dominated public policy. The ALP’s subsidy-based policy continues this trend.

The proposal centres on maintaining returns to investors at levels that encourage investment. As our previous research has shown, over the longer term this increases cost per dwelling. The question remains, as it did under the NRAS: who are we trying to subsidise here, the investors or the tenants, and is it really equitable and effective?

What are the alternatives?

Previous work has shown that NRAS-type schemes offer most benefit to new affordable housing developments when the funds are directed to not for profit organisations, rather than “leaking” out to the for-profit private sector. The advantages of this approach include:

  • subsidies are retained within the affordable housing system
  • benefits are directed to regulated not-for-profit developers with a social purpose
  • the benefit is stretched out over a longer time, meaning government investment does not expire after a set time.

In the UK, a lack of direct conditional investment and weak definitions of affordability led to an 80% decline in social housing production. Without public equity, recurrent operating subsidies have no influence on design quality or ongoing impact after the expiry of providers’ obligations – or their cancellation. Yes, they can be switched on and off like a tap – as happened in 2014 with the NRAS.

With good design, a new scheme could overcome some of these deficiencies. Labor promises to provide lower annual subsidies than NRAS but for longer – 15 rather than 10 years – adding up to at least $127,500 from the Commonwealth for a tenancy to be offered at below market rents. It’s a substantial commitment.

Yet if this level of support was invested up front to build dwellings, rather than provided as an annual operating subsidy, it would make a substantial and enduring contribution to Australia’s housing needs. This is not only socially responsible, it can drive green innovation and is also more financially responsible too.

The only thing that stands in the way is the narrow public accounting doctrine that privileges day-to-day expenditure over long-term investments. This is something that, in the UK, even the Treasury and the National Audit Office are learning to overcome after the painful experience of the Private Finance Initiative.




Read more:
Homeless numbers will keep rising until governments change course on housing


How much more cost-effective is direct investment?

If equity and fairness are to be the yardsticks of policy, age pensioners, people with disabilities and low-paid workers should be the focus of our deepest support. Our AHURI research has established the level, type and location of investment required to meet the needs of 433,000 low-income households in housing stress or homeless across Australia. The current market offers no affordable or secure options for them.

Our research also compared the cost of subsidising investors versus direct investment by government. Our modelling of costs and review of international experience provide evidence that direct investment is far more efficient and effective in the medium and long term.

Capital funding model.
Lawson et al, 2018, Author provided
Operating subsidy funding model.
Lawson et al, 2018, Author provided

Thus, we argue for more direct investment in social housing, strategic use of efficient mission-driven financing and retained investment via public equity and public land leases.

Recognition of the need for national leadership and policy reform is growing. After backpedalling, the Coalition government moved forward in 2018 to establish, with cross-party support, the National Housing Finance Corporation. This mission focused public corporation will soon channel lower-cost financing towards regulated not-for-profit housing. Of course, financing is debt and not quite the same as funding.




Read more:
Government guarantee opens investment highway to affordable housing


The Australian Greens have yet to announce their policy but an outline suggests a commitment to invest in social housing and establish a federal housing trust.

The ALP’s proposals are framed in line with the laudable principle of fairness and are a work in progress – rather than mission accomplished. Overcoming the shortfall of affordable and secure housing will require purposeful Commonwealth and state government funding, mission driven financing as well as land policies to make housing markets fairer for all.The Conversation

Julie Lawson, Honorary Associate Professor, Centre for Urban Research, RMIT University and Laurence Troy, Research Fellow, City Futures Research Centre, UNSW

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

View from The Hill: Malcolm Turnbull and his NEG continue to haunt the government



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The former PM via twitter effectively inserted himself into Question Time – in real time.
Dan Himbrechts/AAP

Michelle Grattan, University of Canberra

If anyone needs further evidence of the self-defeating weird places
the Liberals seem to find themselves in, consider what happened on
Tuesday.

Malcolm Turnbull made another intervention in the political debate,
this time talking about the National Energy Guarantee, when he spoke
at an energy conference on Tuesday morning.

“I’ve strongly encouraged my colleagues to work together to revive the
National Energy Guarantee. It was a vital piece of economic policy and
had strong support, and none stronger I might say, than that of the
current Prime Minister and the current Treasurer,” he said.

This and the rest of Turnbull’s observations on energy policy provided
abundant material for a question time attack by a Labor party bloated
from dining on the unending manna that’s been flowing its way from
some political heaven.

As Scott Morrison sought to counter this latest attack by concentrating on
Labor’s substantial emissions reduction target (45% on 2005 levels by
2030), suddenly a tweet appeared from Turnbull.

“I have not endorsed “Labor’s energy policy”. They have adopted the
NEG mechanism,“ Turnbull said – adding a tick of approval – “but have
not demonstrated that their 45% emissions reduction target will not
push up prices. I encouraged all parties to stick with Coalition’s NEG
which retains wide community support.”

Here was the former PM effectively inserting himself into Question
Time – in real time.

Morrison quickly quoted from the tweet, but it couldn’t repair the
damage done by Turnbull’s earlier comments.

All round, it was another difficult day for the government on the energy front.

The Coalition parties meeting discussed its controversial plan
providing for divestiture when energy companies misuse market power,
with conduct that is “fraudulent, dishonest or in bad faith” in the wholesale market.

The government has put more constraints on its plan than originally
envisaged. Notably, rather than a divestiture decision resting with
the treasurer, it would lie with the federal court (although precisely what this would mean is somewhat unclear).

Treasurer Josh Frydenberg told a news conference: “This power will be on the advice
of the ACCC [the Australian Competition and Consumer Commission] to
the Treasurer, and then the Treasurer will make a referral to the
Federal Court. The Federal Court will then be empowered to make that
judicial order.”

There had already been backbench criticisms of the divestiture proposal expressed to Frydenberg last week; the changes dealt with some of these.

But the plan is still leaving some in Coalition ranks uneasy.

According to the official government version, in the party room 18
speakers had a say, with 14 supporting (though a couple of them were
concerned about the interventionism involved) and four expressing
varying degrees of reservation. No one threatened to cross the floor.

Backbench sources said the strongest critics were Jason Falinski,
Russell Broadbent, Tim Wilson and former deputy Liberal leader Julie Bishop,
while milder criticisms came from Craig Laundy, Scott Ryan and Jane
Prentice.

There were two main worries about the measure – the potential negative
impact on business investment and its inconsistency with Liberal party
free market principles.

Bishop – who, it might be recalled, was recently saying there should
be a bipartisan deal with Labor on the NEG – highlighted the
investment implications and the issue of sovereign risk.

She said: “This is not orthodox Liberal policy. We need to do more
consultation with the industry and we need to be cautious of
unintended consequences of forced divestiture”.

Addressing the concerns, Morrison told the party room that a variety
of principles were at play.

The energy sector was not “a free market nirvana” but rather “a
bastardised market,” he said. The law was targeted at situations where
sweetheart deals came at the expense of consumers.

Energy minister Angus Taylor said governments of the centre-right,
including the Menzies and the Thatcher governments, had acted to
ensure markets operated for consumers.

Taylor invoked an example of the beer drinkers against the brewers,
when Thatcher had been on the side of the beers drinkers.

Frydenberg produced a quote from Menzies’ “Forgotten People”
broadcasts about the need to balance the requirements of industry with
social responsibilities.

The legislation, which is opposed by Labor even with the changes, is
being introduced this week. But there is no guarantee that it can be
passed by the time of the election – not least because there are so
few sitting days next year.

So the most controversial part of the government’s “big stick”, which
has caused so much angst with business, may never become a reality.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: Hokey-pokey politics as the government is shaken all about


Michelle Grattan, University of Canberra

In the topsy turvy Liberal universe, just when the right is trying to
tighten its grip on the throat of the party, the government is haring
off to the left, with this week’s legislation to allow it to break up
recalcitrant energy companies.

As former deputy Liberal leader Julie Bishop – who as a backbencher
has become very forthright – said in the Coalition party room on
Tuesday, “this is not orthodox Liberal policy”. Bishop canvassed the
danger of sovereign risk.

To find a rationale for a frolic into what in other circumstances the
Liberals would no doubt denounce as “socialism”, one might see it as
driven by the veto of the so-called conservatives.

Those on the right (led by Tony Abbott and his band) have long stopped
the government putting forward a sound energy policy, despite the
strong pleas from stakeholders across the board.

Instead, trying to respond to the pressing electoral issue of high
electricity prices, the government has reached for its “big stick”
including the threat of divestiture – a policy that’s being attacked
by Labor as well as business.

Shadow treasurer Chris Bowen was correct on Thursday when he said:
“this is what we see when a government’s policy agenda falls apart”.

Having to defend this draconian policy, first from critical Coalition
backbenchers (who won some changes) and then in parliament, the
government found itself tied in knots.

Given this is such a radical proposal, it was also in an enormous rush with the legislation, introducing it on Wednesday and wanting the House of Representatives to pass it by Thursday.

But that timetable was stymied by Labor. Passage through the House
will have to wait until February.

Meanwhile there will be a Senate inquiry, reporting in March. This
puts off a Senate vote until budget week in April – ensuring a lot
of noise about this controversial measure just when the government
will want all the attention on a budget crafted to appeal to voters
for a May election.

Even if the divestiture legislation gets through the Senate next year,
a likely Labor election victory would mean we’ll probably never see
this particular “big stick” wielded. It’s highly doubtful the threat
will have been worth the angst, or the trashing of Liberal principles.

The final parliamentary fortnight of 2018 coincided with the first
fortnight of the hung parliament.

For Scott Morrison, it has been an excruciating two weeks, with the
backlash from the Liberals’ trouncing in Victoria, Julia Banks’
defection to the crossbench, Malcolm Turnbull’s provocative
interventions, and an impasse with Labor over the plan to protect LGBT
students.

The government’s stress culminated in Thursday’s extraordinary battle
to prevent a defeat on the floor of the House.

This test of strength was over amendments, based on a proposal
originally coming from new Wentworth member Kerryn Phelps, that would
make it easier to transfer people needing medical treatment from Nauru
and Manus to Australia.

As both sides played the tactics, a remarkable thing happened in the
House of Representatives. Behaviour improved one hundred percent, with
none of the usual screaming and exchanges of insults. This pleasing
development was, unsurprisingly, driven by self-interest – neither
government nor opposition could afford to have anyone thrown out ahead
of the possible crucial vote.

Earlier, Morrison had shown anything but restraint when at his news
conference he described Bill Shorten as “a clear and present threat to
Australia’s safety”. Once that would have been taken as a serious
claim, which a prime minister would have been called on to justify. In
these days, it’s seen as a passing comment.

In what was a highly aggressive performance, Morrison gave us another
foretaste of what he’ll be like on the hustings.

In the end, by its delaying tactics in the Senate, the government
prevented the amendments reaching the House before it adjourned, and
so avoided a test of the numbers.

Defeat in the House would not have equalled a no confidence vote, but
it would have been a serious blow for Morrison. Looking for a
precedent, the House of Representatives’ clerks office went back to
votes lost in 1929 (which led to an election) and on the 1941 budget
(which brought down the Fadden government).

But the government may have just put off, rather than prevented, the
reckoning. Phelps said on Sky, “I am sad that we didn’t get this
through today … because I believe it would have gone through on the numbers … But you know if we have to wait until February, at least I believe that there is a light at the end of the tunnel.”

Dodging this vote meant that legislation to give authorities better
access to encrypted messages to help in the fight against terrorism
looked like it would be delayed. Once the House had adjourned, any
Labor amendments the Senate might pass couldn’t go back there until
February.

The government had declared the encryption measure was urgent, and the
blame game started in anticipation of a hold up. Then, mid-debate in
the Senate, Labor abandoned its attempt to amend the bill, which
glided through. In an agreement which may mean something or nothing,
the government undertook to consider the ALP amendments in the new
year.

Shorten didn’t want to be open to the government’s accusations of impeding legislation the security agencies said would help prevent terrorist
acts. “I couldn’t go home and leave Australians over Christmas without
some of the protections which we all agree are necessary,” he said.

The events of this week show why the government decided to have
the minimum of sitting days before the election next year.

The new parliamentary session will open with a deadlock on the
protection of gay students, the divestiture plan up in the air, and
the Nauru-Manus vote hanging over the government.

And by that time Scott Morrison will have had his first and probably
his last Christmas at Kirribilli.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.

View from The Hill: Day One of minority government sees battle over national integrity commission


Michelle Grattan, University of Canberra

Whatever it does, the Morrison government seems to find itself caught
on the sticky fly paper. As if it didn’t have trouble enough with
trying to decide about the embassy in Israel and the religious freedom
report, on Monday it became messily entangled in the issue of a
national integrity commission.

On the first day of formal minority government, the crossbench flexed
its muscle and the government bowed to the new reality.

Well, not quite bowed – but bought time by taking a line of least resistance.

After the independent member for Indi, Cathy McGowan, introduced her
private member’s bill for a national integrity commission, the House
of Representatives considered a motion from the Senate which called on
“the federal government to establish a national anti-corruption
commission”.

The government didn’t oppose the motion, which went through on the voices.

It was claimed that Attorney-General Christian Porter wanted to set out
the government’s objections to the McGowan bill, which he couldn’t do
in private members’ time.

The real reason was the government didn’t want to test its numbers on
the floor when there could be a defector or two from its own ranks.

Porter embarked on something of a lawyer’s frolic as he pointed to
dangers in the bill.

He warned that any public official who, it could be argued, had
breached public trust or impaired confidence in public administration
“would be liable to a finding of corruption”, even for a trivial
matter.

The ABC would come under the proposed body. So Porter conjured up the
scenario of ABC political editor Andrew Probyn (who, it will be
recalled, former ABC chairman Justin Milne wanted shot) being caught
under the bill.

On Porter’s account, that would be because Probyn was found in breach
of the ABC code of practice’s provision on impartiality for saying
Tony Abbott was the “most destructive politician of his generation”.

“Under this bill before the House—no ifs, ands or buts—Andrew Probyn
would be found to have committed corruption,” Porter declared.

He didn’t sound as if he were joking but maybe the Attorney has a very
dry sense of humour.

Not that McGowan is claiming her bill has the detail right. What she
and other crossbenchers are trying to do is force the government’s
hand.

How far they’ll succeed is not clear – they’ll get something but not
the full monty.

The government’s preference would be to do nothing. But that’s no
longer politically viable. Labor is committed to a new anti-corruption
body (once it didn’t believe in one), and the level of public distrust
of the political system makes this an issue that resonates in the
community.

The government now finds itself in the rather bizarre situation of
having voted for a “national anti-corruption commission” without
committing itself to one.

In fact, such a commission is the least likely to get a tick of the
three options before the government. Porter has all but written it
off.

The other options, according to Porter, are expanding one of the
existing 13 bodies that presently deal with integrity and corruption
(probably the Australian Commission for Law Enforcement Integrity),
or merging some of them to eliminate overlap.

Ideally the way forward would be by a bipartisan approach. The issues
are indeed complex and state experience suggests the need for careful
balances and protections. But bipartisanship not the way of things
before an election.

Attacking Shorten, Scott Morrison accused him of being preoccupied
with a “fringe issue”.

Morrison said the matter would be dealt with “through a normal Cabinet
process”. Porter says this process is well underway. Indeed a lot of
it happened under Malcolm Turnbull – Porter says he has been working
on it since he became attorney-general nearly a year ago.

Both the embassy question and the religious freedom report are in
“processes” at the moment.

The government received another prod on the latter when on Monday a
Labor-chaired Senate committee recommended in its majority report that
a ban on religious schools discriminating against gay teachers should
be considered.

This goes much further than the government’s plan – bogged down in
negotiations with Labor – for legislation to prevent discrimination
against gay students. The opposition is expected on Tuesday to push the
government to act immediately on its promise to protect students.

As the Liberals took in the devastating Victorian result, there was
the feeling that the Morrison government was just holding things
together.




Read more:
View from The Hill: Labor’s 55-45% Newspoll lead adds to Liberals’ weekend of woe


Senate president and Victorian Liberal Scott Ryan, who rarely enters controversies given his position as a presiding officer, unleashed a restrained but pointed assault against the right of the party (and rightwing commentators).




Read more:
Senate president Scott Ryan launches grenade against the right


Victorian Liberal backbencher Tim Wilson delivered a sharp message to the coal lovers. “If anybody thinks that there’s this great public sentiment out there that people really deep down hate renewables and they’re hugging something like coal, I say again — get real”.

That immediately encouraged a rerun of Morrison’s coal hugging in parliament.

In question time the Prime Minister was decidedly shouty and aggressive.

And, despite the crossbenchers now looming large in his world, he
didn’t make time to sit in the chamber for Kerryn Phelps’ maiden
speech. He had other engagements, his office said.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.

View from The Hill: Labor’s 55-45% Newspoll lead adds to Liberals’ weekend of woe


Michelle Grattan, University of Canberra

Labor has maintained a 55-45% two-party lead in the latest Newspoll,
in a weekend of woe for the Morrison government, which is trying to
play down the federal contribution to the Victorian Liberal wipeout.

The Coalition’s primary vote fell for the third consecutive
time, to 34%, in a poll that if replicated at an election would see a loss of 21 seats. Labor’s primary vote remained at 40%. One Nation rose 2
points to 8%; the Greens were steady on 9%.

Scott Morrison boosted his lead over Bill Shorten as better PM to 12
points, leading 46-34% compared with 42-36% a fortnight ago. Morrison
has a net positive satisfaction rating of plus one, improving from
minus 8 in the last poll.

The poll will reinforce Coalition gloom after Saturday’s Victorian
election which saw a swing to the Labor government estimated by ABC
election expert Antony Green at around 4% in two-party terms. While an
ALP win was expected, the stunning size of it came as a surprise.




Read more:
Labor has landslide win in Victoria


Even assuming the Victoria election was mainly won (or lost) on state
issues, there are clearly federal factors and lessons in this smashing
of the Liberals, which if translated federally would potentially put at risk half a dozen Victorian seats.

As Premier Daniel Andrews said, Victoria is a “progressive” state. It
stands to reason that Liberal infighting and the dumping of Malcolm
Turnbull, the trashing of the National Energy Guarantee and the
talking down of renewables, and the broad rightward lean of the
federal Coalition alienated many middle-of-the-road Liberal voters.

The anecdotal evidence backs the conclusion that Victorians were
sending strong messages to the Liberal party generally, including the
federal party.

But are the federal Liberals willing to hear those message? And anyway,
does Morrison have the capacity to respond to them effectively?

Morrison has so far demonstrated no personal vision for the country,
and his play-for-the-moment tactics are being increasingly seen as
unconvincing.




Read more:
Victorian Labor’s thumping win reveals how out of step with voters Liberals have become


Morrison took the unusual course of not saying anything about Victoria
on Saturday night or Sunday. He will meet the Victorian federal
Liberals on Monday to discuss the outcome.

Ahead of that meeting Treasurer Josh Frydenberg – who is from Victoria and is deputy Liberal leader – played down the federal implications. While conceding “the noise from Canberra certainly didn’t help”, he claimed in an ABC Sunday night interview that the lessons to be learned federally were about grassroots campaigning and the need to rebut “Labor lies”. He would not concede a recalibration of policy was needed.

Some in the right will try to write Victoria off as unrepresentative
of the nation, just as they did Wentworth. This flies in the face of
reality – there were big swings in the eastern suburbs and the sandbelt,
the sort of areas the Liberals would expect to be their middle class strongholds.

The government needs to pitch much more to the centre in policy terms
but it will be hard to do so.

Given its current positioning, how could it sound moderate on energy
and climate policy? It can’t go back to the NEG. It is stuck with its
obsessions about coal and its distrust of, or at least equivocation
about, renewables, as well as its business-bashing threat of
divestitures.

On issues such as coal and climate change, the party’s eyes have been
turned obsessively to Queensland, where there is a raft of marginal
seats, without sufficient regard to those in Victoria and NSW. Even in
relation to Queensland, there has been a failure to adequately
recognise that that state is not monolithic when it comes to issues
and priorities.

The right is unlikely to stop its determined effort to take over the
party, whatever the cost. Indeed some on the right will argue that the Morrison strategy should be to sharpen the policy differences further, rather than looking to the centre.

The right’s mood will be darkened by the Saturday dumping of rightwing senator Jim Molan to an unwinnable position on the NSW Liberal ticket. Molan has pulled out from Monday’s Q&A program; the ABC tweeted that he’d said he could “no longer defend the Liberals”.

As if the Victorian result was not sobering enough, the government
this week begins the final fortnight of parliament for the year in minority
government, with independent Kerryn Phelps sworn in on Monday as
Turnbull’s replacement in Wentworth.

The government wants the focus on national security legislation but
other issues will be political irritants for it.

Labor and crossbenchers are pushing the case for a federal
anti-corruption body – the sort of initiative that would appeal to
voters highly distrustful of politicians.

Crossbenchers Cathy McGowan and Rebekha Sharkie will introduce a
private member’s bill. 34 former judges have signed an open letter
advertisement calling for a national integrity commission.

They said: “Existing federal integrity agencies lack the necessary
jurisdiction, powers and know-how to investigate properly the
impartiality and bona fides of decisions made by, and
conduct of, the federal government and public sector.”

The government is resisting a new body but will need some convincing
alternative response.

The government will also be under pressure over Morrison’s pledge to
legislate to remove the opportunity for religious schools to
discriminate against gay students. Negotiations with the opposition
have been at an impasse, although the government says it still wants
legislation through this fortnight.

In the middle of the fortnight Morrison attends the G20, where he is
expected to have a meeting with Donald Trump. One would assume they
will canvass the Australian government’s consideration of moving our
embassy to Jerusalem, with Trump urging Morrison to go ahead with
the controversial move.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.

Senate president Scott Ryan launches grenade against the right


Michelle Grattan, University of Canberra

Senate president Scott Ryan has called out the right within the
Liberal party and among commentators, declaring that Liberal voters
“don’t want views rammed down their throats”.

In a trenchant critique of federal influences in the rout of the
Victorian Liberals, Ryan, a former vice-president of the state
division, pointed to the swings in seats “that are the cradle of the
Liberal party”.

They were areas that were in federal seats like Goldstein, Higgins,
Menzies and Kooyong, he told the ABC.

These voters were the “real base of the Liberal party. They sent us a
message,” he said. “They don’t want litmus tests for what it means to be a real Liberal”.

Many Liberal voters were fairly conservative in their own lives,
raising kids, working hard, running small businesses, supporting
strong local communities. “But they’re pretty liberal in their
political outlook. They don’t want views rammed down their throat, and
they don’t want to ram their views down other people’s throat.

“And that has historically been the Liberal way. We’re often
conservative in our disposition – I am – but I’m very liberal in my
political outlook”.

He said part of the problem was “tone” – while Victoria was a state
election some of the noise that came out of Canberra “did strongly
influence the scale of the loss, where it happened”.

Ryan said after the loss of Wentworth some had “tried to dismiss those
voters as not part of real Australia … labelling people, dismissing
them – that’s not the Liberal way.

“I want to cast the net wide in the Menzies and Howard tradition [so]
as to give people a reason to be Liberals, not come up with litmus
tests and say if you don’t hold this view on a social issue, or if you
don’t hold this particular view on climate change or renewable energy,
then somehow you’re not a real Liberal.

“This is not the path to electoral success. And I’m sick of being
lectured to by people who aren’t members of the party, by people who
have never stood on polling booths, about what it means to be a real
Liberal”.

Ryan declined to name names, but his reference to the media was
directed at commentators on Sky in the evening and the Sydney shock
jocks.

Liberal voters wanted the government to focus on their issues and “I
think the federal government is doing that,” he said.

Ryan said that the days before Wentworth “were distracted … talking
about what some people call religious freedom”. In Victoria people
weren’t raising anti-discrimination law with him on polling booths.

“What we need to do is say the Liberal party has people with various
views, and all of those views can be accommodated, and internally the
idea of compromise is actually a good thing”.

Too often compromise was seen as a sell out, he said. But John Howard
and Peter Costello had compromised to achieve historic tax reform;
Peter Reith had compromised with the Australian Democrats to get
industrial relations change.

“This idea – and I think this is another thing that a lot of our
voters are tired of – that somehow to compromise to address a problem,
and move on to one of the other plethora of problems governments need
to address – that is not selling out – that is getting the jobs done”.

Tim Wilson, the member for Goldstein, criticised those who were being
ideological about energy policy.

“If anybody thinks that there’s this great public sentiment out there
that people really deep down hate renewables and they’re hugging
something like coal, I say again — get real,” Wilson told Sky.

He said he had sat on polling booths where “every second person either gave you deadly silence, which is a very cold, deadly silence, or there were people mentioning energy, climate, or the deposing of the prime minister”.

Victorian senator Jane Hume wrote in the Australian Financial Review:
“Our quest should always be to raise the standard of living – whether
through economic policies, energy, health or education. If we allow
good policy to be infiltrated by even the perception of an ideological
crusade, Labor will win the messaging war”.

After the Prime Minister met Victorian Liberal federal MPs on Monday
morning Treasurer Josh Frydenberg, who is deputy Liberal leader, said
“We had a good, honest discussion about lessons to be learned from the
state campaign. As a group we will continue to be focused on
delivering for our local communities.”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.

Labor’s battery plan – good policy, or just good politics?



File 20181122 182059 wylcnu.jpg?ixlib=rb 1.1
With the right settings, Labor’s new scheme could benefit householders as well as the grid itself.
Shutterstock.com

Guy Dundas, Grattan Institute

Federal Labor obviously likes the politics of giving rebates of up to A$2,000 each to 100,000 households of prospective voters so they can install domestic batteries. But is this good policy that will support Australia’s transition to a reliable, affordable, low-emissions energy system, or is it just middle-class welfare?

The Grattan Institute has previously been critical of solar subsidies similar to this program. In 2015 we found that household solar photovoltaic (PV) installations driven by state and federal government subsidies cost Australia around A$9 billion. Many solar incentive programs were uncapped, and their costs blew out as the price of PV systems dropped rapidly.

The parallels with battery technology are clear: batteries may be expensive and uncommon today, but many commentators expect them to drop rapidly in price.




Read more:
Households to get $2000 subsidy for batteries under Shorten energy policy


More recently, my colleagues and I have lamented the Victorian government’s return to the bad old days of solar subsidies. Its Solar Homes program promises A$1.24 billion in subsidies over 10 years and would roughly triple the level of household solar in Victoria. Yet most households will be financially better off installing solar even without this subsidy. If fully implemented, it will be a great waste of taxpayers’ money.

The case for public subsidies for household batteries is stronger than for household solar panels. Batteries are better able to help cut the cost of the entire energy system and so don’t just benefit the people who install them – they also benefit electricity consumers more generally. By releasing stored power when most needed, batteries can reduce reliance on expensive “peaking” power plants that operate only at times of high demand. And they can reduce the cost of expanding network capacity to supply all customers at peak times.

By contrast, solar primarily eats into midday demand, which is already low due to the output of the large existing fleet of solar panels. While solar has historically reduced peak demand to some degree, the Australian Energy Market Operator considers that this effect is reducing as solar has pushed peak demand later in the day.




Read more:
Slash Australians’ power bills by beheading a duck at night


Impact of rooftop solar PV on peak demand.
AEMO 2018, The NEM Reliability Framework

In a perfect world, households would have enough private incentive to install batteries when they benefit the entire system. If households faced higher electricity prices at times of peak demand, they would be rewarded for reducing system-wide costs by installing batteries.

But we do not live in this perfect world. Governments are reluctant to mandate that households pay higher prices during peak periods, and retailers find it hard to convince households to accept these more complex tariffs. Cost-reflective pricing is unlikely to become widespread any time soon, meaning there is a case for public subsidy to household batteries – provided the subsidies are capped, and end when battery prices inevitably fall.

Using smart controls to coordinate multiple batteries can maximise their benefits. These so-called “virtual power plants” allow the controller to reduce a household’s draw on the grid at peak times, thus reducing costs for both the household and the system. Federal Labor should increase the benefits of its policy by mandating that people who receive a subsidy participate in such a scheme, and by targeting installations to areas where the network most needs support.




Read more:
Virtual power plants are in vogue, but they can be like taking a sledgehammer to a nut


On balance, federal Labor’s policy appears to be a sensible step towards a smarter, lower-emissions electricity grid. It can be tweaked to maximise benefits to the whole system, not just to the lucky households that get government assistance. And its cost is capped, which reduces the risk of the sort of cost blowouts that have plagued solar subsidy schemes.

Unlike some of the Coalition’s policies, such as its plan to underwrite new generation, Labor’s battery policy is likely to help rather than hinder Australia’s energy transition.The Conversation

Guy Dundas, Energy Fellow, Grattan Institute

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

Grattan on Friday: Labor’s energy policy is savvy – now is it scare-proof?


Michelle Grattan, University of Canberra

Hours before Bill Shorten delivered his energy policy on Thursday,
Scott Morrison’s office had circulated an attack.

Labor’s plan was for a “carbon tax”; the proposed subsidy for “pink
batteries” would leave households “$8000 out of pocket”.

It was a wild broadside that said much about how the government hopes
a massive scare campaign can be an effective front line weapon in next year’s election.

In 2016 Malcolm Turnbull declined to run a heavily negative campaign,
especially against Shorten personally. When things went pear-shaped he
was strongly criticised for his approach.

Tony Nutt, Liberal federal director at the time, speaking soon after
the election, defended the approach by saying research had confirmed
voters were sick of political aggression and wanted to see a positive
vision and plan. But others in the party were not convinced.

Labor, for its part, did very well with its “Mediscare”.

In more desperate circumstances and with a new leader, the Liberals at
the next election will go all out stoking fears. Morrison is a much
better negative campaigner than Turnbull ever could be: he delivers
lines sharply and is not troubled by inconvenient nuance.

The government, assisted by the cooling of the housing market, has
been stepping up its warnings about the effects on house prices of
ALP’s negative gearing plan. Labor’s proposed crackdown on cash
refunds from dividend imputation is also a ripe target, especially for
agitating retirees (although pensioners are exempt).




Read more:
Pensioners would retain cash refunds on franked dividends under Labor backdown


And now that Shorten has released the energy policy this week, the
Coalition is reaching back into the past for lines and spectres.

Labor’s promise to subsidise home batteries ($2000 for
households with incomes under $180,000) is dubbed “pink batts to pink batteries” to trigger memories of Kevin Rudd’s ill-prepared policy that cost several lives.

Energy Minister Angus Taylor went for the ultimate try-on, when he
posed outside the Tomago Aluminium Smelter in Newcastle and claimed
that “if all of Bill’s batteries were installed, it would keep this
smelter, this business, going for less than 15 minutes”. “Bill’s
batteries” are not, of course, aimed at powering Tomago.

The old line about the ALP putting a “wrecking ball” through the
economy with its policy is getting a fresh workout.




Read more:
Households to get $2000 subsidy for batteries under Shorten energy policy


In crafting its energy policy, Labor is drawing on different, more
recent history – the widespread support from the business community
and other stakeholders for the National Energy Guarantee that the
Coalition abandoned amid its leadership meltdown.

Shorten says a Labor government would try to get bipartisan agreement for a NEG, but not rely on doing so.

In an interventionist approach, Labor proposes an additional $10
billion for the Clean Energy Finance Corporation; its investments
would support large scale generation and storage projects.

Labor’s investment would be in renewables, pushing towards its target
of 50% of Australia’s energy coming from renewables by 2050. In
contrast, the government is planning early next year to have a “short
list” of dispatchable power projects, focusing on coal, gas and hydro,
that it will look at underwriting.

An ALP government would also provide $5 billion for “future-proofing”
the energy network – the transmission and distribution systems.

Labor’s energy policy is in the context of its commitment to a much
more ambitious emissions reduction target than the government has – a
45% economy-wide reduction by 2030 on 2005 levels, compared with the
Coalition’s 26%-28%.

This week’s announcement is about the energy
sector only – the opposition will release soon its climate change
policies to lower emissions in other sectors including
transport. The government, homing in on the 45% target, is conjuring up scares about the nation’s cattle herd and the like.

Labor claims its energy policy would drive power prices down; the
government says it would drive them up. In fact no one can be sure
what will happen in the next few years in a situation where we are
undergoing a major transition to a different energy mix.

Nor is it clear which side will win the coming debilitating round of the
energy-climate wars.

The ALP would be unwise to underestimate the power of the scare. On
the other hand, the government’s own policy looks like a
shredded garment now it has torn up the NEG. Its “big stick’,
including the threat of divestitures, and its promised “short list” of new
dispatchable power projects don’t really cut it.

Labor would be heartened by the early responses its policy is
receiving from business groups, despite their reservations.

In a crack at the government’s threat, the Business Council of
Australia welcomed “Labor’s commitment not to support heavy-handed,
intrusive changes into the energy sector such as forced divestiture”.

Most notable in the reaction of these groups, however, was their
hankering for the NEG.

The Ai Group said a revised NEG was “still achievable” and “would be
greatly preferable” to a government directly underwriting new
generation, versions of which were being proposed by both major
parties. The BCA was pleased Labor was taking the NEG to the election,
reiterating that it was “a credible, workable, market-based solution
to the trilemma of affordability, reliability and reducing our
emissions”. The Australian Chamber of Commerce and Industry was
likewise encouraged by the reference to the NEG.

This indicates that Labor’s decision to include the NEG in its plan is
not just sound on policy grounds but is politically savvy. By keeping
alive the NEG option, Labor has reached out to business.

Surely many Liberals are now starting to think that far from giving
themselves a break against Labor by rejecting the NEG, they may have
put themselves at a serious disadvantage which could be hard to
overcome even with a fierce scare campaign.

This also raises an interesting question for after the election, if
Labor wins. Given the widespread support for a NEG, would a Coalition
opposition persist in rejecting it? Much would depend on the factional
make up of the Liberal party of the day.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.