Shadow treasurer Chris Bowen on Wednesday will promise a Labor government would deliver bigger cumulative budget surpluses than the government over the forward estimates and substantially bigger surpluses over a decade.
Outlining the fiscal parameters the opposition will take to the election, Bowen will repeat that the ALP would achieve budget balance in the same year as the government – 2019-20.
He will also undertake that the majority of the savings raised from the ALP’s revenue measures over a decade would go to budget repair and paying off debt.
Bowen will insert a qualifier, saying that the pledges are on the basis of the budget figures released last week. If the government announced “a new secret policy that is fundamentally unfair and is an attack on working people, then we reserve the right to address that”.
Detailed figures of the full impact of Labor policies would be announced before the election, “but we are announcing today that the net result of those policies will be a better budget bottom line in the short term and bigger surpluses in the long term,” Bowen will tell the National Press Club.
He will also say that until a Labor government achieved a strong surplus it would be guided by the principles of
… repairing in the budget in a way that was fair, and did not place the heaviest burden on the vulnerable;
… more than offsetting new spending with savings and revenue measures;
… putting to the budget bottom line any positive changes in revenue and spending that resulted from economic changes.
Bowen will attack the government for not budgeting for larger surpluses.
“The whiff of a surplus, not reaching at least 1% of GDP until 2026-27, does not adequately protect Australia against the potential roiling seas of international uncertainty. Australia needs bigger surpluses, sooner than the government is scheduling,” he will say.
“We can’t afford to let the next four years go to waste in the efforts for a healthier, safer budget surplus”. He will point to the Coalition’s 2013 commitment to a surplus of at least 1% of GDP by 2023-24, criticising the the government for its having “watered down their fiscal rigour with regular monotony”.
Bowen will also emphasise the long term risks of the government’s seven year tax package.
“The government has the most expensive and growing component of their tax package coming in in six years’ time, based on the assumption the good times roll on for another decade.” This was “a budget that bakes in future tax cuts in six years’ time worth tens of billions of dollars, when the revenue may not turn up to fund them”.
Bowen will say that by making a series of tough decisions on revenue measures as well as opposing the corporate tax cuts, Labor is setting out to deal faster than the government with debt and deficit and to fund policies that are important for economic growth, including investment in education.
He will also announce a panel to review Labor’s costings, which have been done by the Parliamentary Budget Office. Its members are Bob Officer, emeritus professor at Melbourne University; Mike Keating, former head of the finance and prime minister’s departments, and James Mackenzie, a fellow of the Institute of Chartered Accountants and the Institute of Company Directors. These three undertook a similar task before the 2016 election.
This week’s Newspoll, conducted May 10-13 from a sample of 1,730, gave Labor a 51-49 lead, unchanged from three weeks ago. Primary votes were 39% Coalition (up one), 38% Labor (up one), 9% Greens (steady) and 6% One Nation (down one).
This Newspoll is Malcolm Turnbull’s 32nd successive loss as PM, two more than Tony Abbott. However, the past two have been narrow losses.
The total vote for Labor and the Greens was up one point to 47%, while the total for the Coalition and One Nation was steady at 45%. The gain for the left would normally result in a gain after preferences, but rounding probably helped the Coalition again.
39% (up three) were satisfied with Turnbull, and 50% (down three) were dissatisfied, for a net approval of -11, Turnbull’s highest net approval since the final pre-election Newspoll in July 2016. Bill Shorten’s net approval was down two points to -22. Turnbull led Shorten as better PM by 46-32; this is Turnbull’s clearest better PM lead since February.
Newspoll asks three questions after every budget: whether the budget was good or bad for the economy, good or bad for you personally, and whether the opposition would have delivered a better budget.
The best news for Labor was on the third question, where it only trailed by seven points, equal to their deficit after the badly perceived 2014 budget. According to The Poll Bludger, Labor trailed by more during all of the Howard government’s budgets.
This budget was seen as good for the economy by 41-26, and good for you personally by 29-27. The Poll Bludger says it is fifth out of 31 budgets covered by Newspoll on personal impact, but only slightly above average on the economy.
Turnbull led Shorten by 48-31 on best to handle the economy (51-31 in December 2017). Treasurer Scott Morrison led his shadow Chris Bowen 38-31 on best economic manager. By 51-28, voters thought Labor should support the government’s seven-year tax cut package.
Turnbull has delivered a well-received budget, while Shorten’s credibility took a hit after four Labor MPs were kicked out over the citizenship fiasco.
Voters were not sympathetic to politicians who held dual citizenships. By 51-38, they thought such politicians should be disqualified from federal parliament (44-43 in August). By 46-44, voters would oppose a referendum to change the Constitution to allow dual citizens to become MPs.
A key question is whether Turnbull’s ratings bounce will be sustained. The PM’s net approval and the government’s two party vote are strongly correlated, so the Coalition should do better if Turnbull’s ratings are good. Past ratings spikes for Turnbull have not been sustained.
While people on low incomes receive a tax cut, it will not be implemented by withholding less tax from pay packets. Instead, people will need to wait until they file their tax returns after July 2019 to receive their lump sum tax offsets. As the next federal election is very likely to be held by May 2019, this appears to be a political mistake.
In last week’s Essential, 39% thought the Australian economy good and 24% poor. While Australia ran large trade surpluses in the first three months of this year, the domestic economy is not looking as good as it did in 2017 – see my personal website for more.
Ipsos: 54-46 to Labor (53-47 respondent allocated)
An Ipsos poll for the Fairfax papers, conducted May 9-12 from a sample of 1,200, gave Labor a 54-46 lead by 2016 election preferences, a two-point gain for Labor since early April. Primary votes were 37% Labor (up three), 36% Coalition (steady), 11% Greens (down one) and 5% One Nation (down three).
Newspoll is no longer using last-election preferences, so it seems better to compare Ipsos’ respondent allocated preferences with Newspoll, not the last election preferences. By respondent allocated preferences, Ipsos was 53-47 to Labor, a three-point gain for Labor.
Ipsos is bouncier than Newspoll, and the Greens’ support is higher. If you compare Ipsos’ respondent allocated two party vote with Newspoll, the difference is diminished.
Turnbull had a 51-39 approval rating (47-43 in April). This is Turnbull’s best rating in Ipsos since April 2016; Ipsos gives Turnbull his strongest ratings of any pollster. Shorten’s net approval was up three points to -12. Turnbull led Shorten by 52-32 (52-31 in April).
By 39-33, voters thought the budget was fair (42-39 after the 2017 budget). By 38-25, voters thought they would be better off, the highest “better off” figure in Nielsen/Ipsos history since 2006. However by 57-37, voters thought the government should have used its extra revenue to pay off debt, rather than cutting taxes.
Queensland Galaxy: 52-48 to federal Coalition, 53-47 to state Labor
A Queensland Galaxy poll, conducted May 9-10 from a sample of 900 for The Courier Mail, gave the federal Coalition a 52-48 lead, unchanged since February, but a 2% swing to Labor since the 2016 election. Primary votes were 40% Coalition (down one), 33% Labor (up one), 10% Greens (steady) and 10% One Nation (up one). Primary vote changes would normally imply a gain for Labor, but this was lost in the rounding.
By 39-33, Queenslanders thought the budget was good for them personally, rather than bad. By 39-28, they thought the budget would be good for Queensland.
The state politics questions gave Queensland Labor a 53-47 lead, a one-point gain for Labor since February. Primary votes were 38% Labor (up one), 35% LNP (down one), 12% One Nation (up two) and 10% Greens (steady).
Premier Annastacia Palaszczuk had a 46-38 approval rating (44-38 previously). Opposition Leader Deb Frecklington had a 31-28 approval rating (29-25). Palaszczuk led Frecklington as better Premier 47-27 (42-31).
Longman ReachTEL: 53-47 to LNP
The Longman byelection is one of five that will be held soon. A ReachTEL poll, conducted May 10 from a sample of 1,280 for the left-wing Australia Institute, gave the LNP a 53-47 lead, about a 4% swing to the LNP since the 2016 election. Primary votes were 36.7% LNP, 32.5% Labor, 15.1% One Nation and 4.9% Greens.
ReachTEL is using respondent allocated preferences. The two party vote in this poll looks reasonable assuming One Nation preferences flow to the LNP.
National polls and the Queensland Galaxy poll show swings to Labor compared with the 2016 election. It would be highly unusual for a seat to swing so strongly to the Coalition when other polling shows a swing to Labor. In the past, seat polls have been far less reliable than national and state-wide polls.
In better byelection news for Labor, the Western Australian Liberals will not contest either Perth or Fremantle. Fremantle has a 7.5% margin with an incumbent recontesting, but Labor only holds Perth by a 3.3% margin with no incumbent.
This week’s Essential, conducted May 10-13 from a sample of 1,033, gave Labor a 52-48 lead, a one-point gain for the Coalition since last week. Primary votes were 38% Coalition (steady), 36% Labor (down one), 10% Greens (steady) and 7% One Nation (up one).
By 44-28, voters approved of the budget overall. 22% thought the tax cuts would make a difference to their household. 39% supported the tax cuts, with 30% wanting more spending on schools and hospitals and 18% preferring a reduction in government debt.
By 44-40, voters disagreed with giving higher income people larger tax cuts. By 79-14, voters agreed that those earning $200,000 should pay a higher tax rate than those earning $41,000.
Labor continues to hold a 51-49% two-party lead in the wake of last week’s budget. However, Malcolm Turnbull’s advantage over Bill Shorten has surged in the Newspoll published in The Australian on Monday.
But the Ipsos poll, in Fairfax papers, has Labor ahead by a much wider 54-46% margin on a two-party basis – a rise of two points for the ALP since the last Ipsos poll in early April, with a corresponding fall for the Coalition.
Post-budget opinion will soon be tested on the ground in five byelections, four of them caused by the citizenship crisis.
The Western Australian Liberals have announced they will not run in the two contests in that state, while Pauline Hanson and opposition leader Bill Shorten are trading public blows over preferences for the Queensland seat of Longman, where One Nation preferences were crucial in Labor’s win last election.
In Newspoll, Turnbull has stretched his previous three-point lead over Bill Shorten as better PM to 14 points. Turnbull jumped eight points to 46%, while Shorten fell three points to 32% in the poll, done Thursday to Sunday.
Last week Shorten was embarrassed over his previous boasts that Labor had a strong citizenship vetting process, after the High Court on Wednesday disqualified Labor senator Katy Gallagher for having dual citizenship when she nominated for the 2016 election. The court decision prompted three Labor MPs and a crossbencher to resign.
Turnbull’s satisfaction rating has risen three points to 39% in Newspoll, while Shorten’s rating went down a point to 33%. The Coalition primary vote was up a point to 39%; Labor also rose a point to 38%, since the last poll, published three weeks ago. One Nation is on 6%, the Greens are 9%.
Newspoll found 41% thought the budget good for the economy; only 26% said it would be bad. People were split on its impact for them personally: 29% said they would be better off, 27% thought it would leave them worse off.
Just over half (51%) backed the government’s tax plan, the first stage of which would give a tax cut to lower and middle income earners.
The Labor primary vote in the Fairfax-Ipsos poll was 37% (up three points). The Coalition was unchanged on 36%.
In the Ipsos poll, taken Thursday to Saturday, 38% believed they would be personally better off as a result of the budget – the highest rating in perceived personal benefit since 2006 – while 25% said they would be worse off. On the measure of fairness, 39% believed the budget was fair, while 33% said it was unfair. Ipsos found 57% would prefer the government to use extra revenue to pay off debt; 37% would prefer it to be used for tax cuts.
Turnbull’s approval rating was 51% (up four points) in the Fairfax-Ipsos poll; his disapproval was 39% (down four points). Shorten was on 39% approval (up a point) and 51% disapproval (down two points) . As preferred prime minister, Turnbull was ahead 52% (unchanged) to Shorten’s 32% (up a point).
The timing of the byelections is yet to be announced – they are expected to be on the same Saturday. Four are in Labor seats; the fifth is in Mayo, held by the Centre Alliance’s Rebekha Sharkie – the Liberals are hoping to wrest the seat back.
Braddon in Tasmania and Longman will be the two government-opposition head-to-head battles.
In Longman, on less than 1% margin, a ReachTEL poll commissioned by the left-leaning think tank The Australia Institute found the government leading the ALP 53-47% in two-party terms. It had One Nation on 15.1%. The poll was done Thursday night, of 1277 people.
As it seeks a strong candidate for Longman, the Liberal National Party is bedevilled by the dual citizenship issue that has caused the byelection in the first place. The LNP is having to ensure, before it does its preselection, that no potential candidate is a dual citizen, which can go to complicated questions of eligibility for foreign citizenship through relatives.
Labor’s Susan Lamb, who won the seat in 2016, also must renounce her dual British citizenship in time for her renomination.
Shorten at the weekend delivered a sharp response to Hanson’s demand that Labor put the Greens last.
Hanson wrote to Shorten that:
With a looming byelection in the seat of Longman and a federal election likely within the next 12 months, One Nation and its supporters are seeking an assurance from you as Leader of the Australian Labor Party that you will guarantee placing the Greens at the bottom of all Labor how-to-vote cards.
Conservative Australians do not support parties who flow their preferences to the Greens and I cannot in good conscience flow One Nation preferences to Labor if their preferences relationship continues with the Greens.
Shorten wrote back:
I know you are under a lot of pressure following your decision to support the Prime Minister’s $80 billion tax handout to multinationals and the big banks. That’s the only explanation I can think of for your letter to me, in which you appear to be attempting to direct the preferences of Longman voters voters to the LNP.
Meanwhile a row has blown up over the preselection dumping of Queensland Liberal Jane Prentice, an assistant minister in the Turnbull government. She was beaten decisively in a rank and file ballot by a Brisbane city councillor, Julian Simmonds, a former staffer of hers. Her defeat has reignited the criticism of the Liberal party for having so few women in its parliamentary ranks.
Asked about Prentice’s loss, Treasurer Scott Morrison told the ABC that politics was “a contestable process”. Prentice had “done a great job and we thank her for her service”.
In Labor’s budget reply speech, Bill Shorten reaffirmed the plan to remove refundability of dividend imputation credits. His pitch was to Australian voters on lower and middle incomes, in which he pledged to look after the country’s ageing population:
We know that giving older Australians the security and dignity they deserve matters more than an $80 billion corporate tax cut.
The issue of whether or not retirees should be able to get a refund in dividend imputation has sparked considerable discussion of retirees’ income and wealth.
The Household, Income and Labour Dynamics in Australia (HILDA) Survey shows that, overall, retired people tend to have lower incomes than the population as a whole, but higher wealth. This is because retirement typically involves ceasing employment and reducing income, while wealth tends to accumulate with age, at least up to the point of retirement, mainly due to paying off the mortgage and accumulating superannuation.
The different mix of income and wealth for retired and non-retired households means it’s not straightforward to compare their economic well-being. For example, the HILDA Survey data show that only 23% of retirees aged 60 and over have above-median incomes (compared with 50% of the population as a whole); but 62% have above-median household wealth.
That said, retirees are generally wealthy if they have both above-median household income and above-median household wealth. With this definition, 20% of retirees aged 60 and over are wealthy. This compares with approximately 28% of the Australian population as a whole.
What does retirement wealth look like?
Among retirees aged 60 and over, wealthy retirees are on average about two years younger than other retirees, having an average age of 71.8. Nearly 97% of wealthy retirees own their home, compared with 76% of other retirees.
These retirees have net wealth in 2014 (when wealth was last measured by the HILDA survey) averaging over A$2.4 million at today’s prices.
While wealthy retirees have high average holdings of superannuation, investment property and other investments, the home is still the most important component of their wealth. The home is also the most important asset for other retirees, but in 2014 it was worth an average of only A$400,000 (at today’s prices) for these retirees, compared with A$800,000 for wealthy retirees.
Wealthy retirees get most of their income from superannuation and other investments, although government benefits (mostly the Age Pension) nonetheless average over A$11,000 per wealthy retired household. For other retirees, the Age Pension is the dominant income source, averaging A$24,000 per household.
The HILDA survey data indicates that both wealthy and other retirees on average pay little income tax – A$4,256 for wealthy retirees and only A$94 for other retirees. Indeed, less than 30% of wealthy retiree households, and only 5% of other retiree households, are estimated to actually pay any income tax.
Moreover, the data show that 42% of wealthy retirees, and 22% of other retirees, have negative income tax because of dividend imputation credits received on their holdings of Australian shares. This does not take into account taxes and imputation credits on dividends received by superannuation funds.
Given the tax-free status of superannuation in people’s “retirement phase” (albeit now only on the first A$1.6 million), it’s likely that more than 42% of wealthy retirees, and more than 22% of other retirees, effectively have negative income taxes.
Whether you consider Labor’s plan good or bad policy, given its exemption of pensioners, it is clear that its impact will be most acutely felt by wealthy retirees.
Opposition leader Bill Shorten has launched a tax bidding war, promising to top the government’s tax relief for lower and middle income earners, as he prepares to fight a string of byelections in Labor seats.
The Labor alternative almost doubles the budget’s relief for these taxpayers, incorporating the early part of the government’s plan and then building on it.
Delivering his budget reply in Parliament on Thursday night, Shorten pledged to give bigger income tax cuts for 10 million taxpayers. Some four million would get A$398 a year more than the $530 under the government’s plan.
Labor’s “Working Australians Tax Refund”, would cost $5.8 billion more than the government’s plan over the forward estimates.
Labor’s alternative comes as debate intensifies about the latter stage of the government’s plan, when a flattening of the tax scale would give substantial benefit to high income earners.
The ALP hardened its position against that change as modelling cast doubt on its fairness. The opposition launched a Senate inquiry which will report mid June on the tax legislation, introduced into parliament on Wednesday.
The government says it will not split the bill, which it wants through before parliament rises for its winter break, but will be under pressure to do so including from the crossbench.
Under Shorten’s proposal, the ALP would support the government’s budget tax cut in 2018-19. Once in power, it would then deliver bigger tax cuts from July 1 2019, when it began the refund.
In Labor’s first budget “we will deliver a bigger better and fairer tax cut for 10 million working Australians. Almost double what the government offered on Tuesday”, Shorten told parliament.
The Labor plan would give all taxpayers earning under $125,000 a year a larger tax cut than they would get under the budget plan.
In a speech heavy on the theme of fairness, Shorten said: “At the next election there will be a very clear choice on tax. Ten million Australians will pay less tax under Labor”.
He also pitched his budget reply directly at the campaign for the byelections.
“This is my challenge to the Prime Minister. If you think that your budget is fair, if you think that your sneaky cuts can survive scrutiny, put it to the test. Put it to the test in Burnie, put it to the test in Fremantle and in Perth.
“I will put my better, fairer, bigger income tax cut against yours. I’ll put my plans to rescue hospitals and fund Medicare against your cuts. I’ll put my plans to properly fund schools against your cuts and I’ll put my plan to boost wages against your plan to cut penalty rates and I’ll put my plans for 100,000 TAFE places against your cuts to apprenticeships and training and I’ll fight for the ABC against your cuts.”
In the Labor model, a teacher earning $65,000 would get tax relief of $928 a year, $398 more than the $530 offered by the government.
A married couple, with one partner earning $90,000 and the other $50,000 would receive a tax cut of $1855, making them $796 a year better off under Labor than under the government.
Shorten said Labor could afford the tax cuts it proposed because it wasn’t giving $80 billion to big business and the big four banks. Also, it had earlier made hard choices on revenue measures.
An ALP government could deliver “the winning trifecta” – “a genuine tax cut for middle and working class Australians; proper funding for schools, hospitals and the safety net; and paying back more of Australia’s national debt faster”.
Shorten said that the Liberals were proposing to radically rewrite the tax rules in their seven year plan. Research had revealed that $6 in every $10 would go to the wealthiest 20% of Australians, he said .
“Very quickly, this is starting to look like a Mates Rates tax plan”.
“And at a time of flat wages, rising inequality and a growing sense of unfairness in the community”.
Other initiatives he announced include:
· A plan for skills, TAFE and apprentices costing $473 million over the forward estimates.
· Abolition of the cap on university places, re-instating Labor’s demand driven system, at a cost of $140 million over the forward estimates.
· Reversing cuts to hospitals and establishing a Better Hospitals Fund, seeing an extra $2.8 billion flow to public hospitals. This would cost $764 million over the budget period.
· Invest $80 million to boost the number of eligible MRI machines and approve 20 new licences – which would mean 500,000 more scans funded by Medicare over the course of a first Labor budget.
· Provide $25m to the Commonwealth Public Prosecutor to establish a Corporate Crime Taskforce. The Taskforce would deal with recommendations for criminal prosecution from the banking royal commission.
On Wednesday morning, the High Court disqualified Labor’s ACT Senator, Katy Gallagher. As a senator, Gallagher’s disqualification will not require a byelection; she will be replaced by Labor’s second candidate on its ACT ticket, David Smith.
However, Gallagher’s case was seen as a test case for four House members: Susan Lamb (Labor, electorate of Longman), Josh Wilson (Labor, Fremantle), Justine Keay (Labor, Braddon) and Rebekha Sharkie (Centre Alliance, Mayo).
By Wednesday afternoon, all four of these members had announced they would resign from Parliament and recontest their seats at subsequent byelections. With the Perth byelection that was required last week, there are likely to be five federal byelections on the same date.
All byelections will be held on 2016 boundaries, even if there has been a redistribution in the state in which the byelection takes place. As the incumbent will be recontesting, the byelections caused by section 44 are different from most byelections.
At the 2016 election, Labor gained both Braddon and Longman by defeating Coalition incumbents. Labor’s 0.8% margin in Longman, and 2.2% margin in Braddon do not reflect the “sophomore surge” effect.
If Longman and Braddon were held at a general election, Labor would expect to do better in those seats than nationally, as their new incumbents should receive a personal vote bonus, while the Coalition loses the personal votes of their previous members.
A negative for Labor in Longman is One Nation preferences. In 2016, One Nation won 9.4%, and their how-to-vote cards put Labor ahead of the LNP; Labor won 56.5% of One Nation preferences. One Nation is now more pro-Coalition than in 2016, and is likely to recommend preferences to the LNP at the byelection. However, One Nation’s primary votes are likely to come more from the LNP than Labor, mitigating damage from One Nation’s preferences.
Labor has a 7.5% margin in Fremantle, and the Liberals are more likely to focus on Perth (Labor by 3.3%), where the incumbent Labor member is not recontesting.
In Mayo, the Centre Alliance’s Rebekha Sharkie (formerly Nick Xenophon Team) holds a 5.0% margin against the Liberals. However, Xenophon’s attempt to win the balance of power in the South Australian election failed dismally, as his party won zero lower house seats.
It is likely Xenophon’s failure will affect Sharkie, although her profile as a sitting member will help her. Sharkie’s interest would be best served by running as an independent, not endorsing Centre Alliance policies. The former Liberal MP Jamie Briggs was negatively perceived, explaining some of the swing to Sharkie in 2016.
On a two party basis, the Liberals hold a 5.4% margin against Labor, a 7.2% swing to Labor since the 2013 election. However, some of this swing is explained by Briggs, and Labor is unlikely to be competitive with a better Liberal candidate.
In summary, I think it is likely that Labor will hold all four of its seats, and that Sharkie is the most vulnerable at these byelections.
Essential: 53-47 to Labor
This week’s Essential, conducted May 3-6 from a sample of 1,033, gave Labor a 53-47 lead, unchanged since last fortnight. Primary votes were 38% Coalition (up one), 37% Labor (up one), 10% Greens (down one) and 6% One Nation (down two). This will be the last poll conducted before the budget.
Malcolm Turnbull’s net approval was -2, up one point since April. Bill Shorten’s net approval was -4, up four points. Turnbull led Shorten 40-26 as better PM (41-26 in April).
39% (up six since November 2017) thought the Australian economy was good, 32% (down six) thought it was neither good nor bad, and 24% (steady) thought it was poor.
Since May 2017, there was an 11-point increase in those thinking the budget should increase assistance to the unemployed, and eight-point increases for aged pensions, affordable housing and assistance to the needy. The only large decrease was for public transport infrastructure (down six).
28% thought more funding for schools and hospitals most important for the budget, followed by 22% for supporting industries that create jobs, 17% for personal tax cuts, 12% for building infrastructure and 8% for fully funding the NDIS.
Status quo result likely in Tasmanian upper house elections
Every May, two or three of Tasmania’s 15 upper house seats hold elections for a six-year term. Currently the left has control with eight seats (four Labor and four left-wing independents). On Saturday, elections were held in Hobart and Prosser.
Tasmanian analyst Kevin Bonham has more details. In Hobart, left-wing incumbent independent Rob Valentine defeated another left-wing independent challenger, 61-39, with the Liberals a distant third.
In Prosser, in a field of 13, Liberal Jane Howlett had 26.1%, Labor’s Janet Lambert 22.0% and independent Steve Mav 19.8%. Bonham thinks Howlett is most likely to win when preferences are distributed next Tuesday, the final day for receipt of postals.
If either Howlett or Mav wins in Prosser, the right and left will retain their seats, with no change to the overall balance of power.
In brief: UK local elections, Malaysian election, Australian vs US employment
I wrote for The Poll Bludger about the May 3 UK local government elections. According to the BBC’s projected national vote share, Labour and the Conservatives tied on 35% each. This was the first major UK electoral test since Labour surged back at the June 2017 general election to deny the Conservatives a Commons majority.
In Wednesday’s Malaysian election, the party that had governed Malaysia since independence in 1957 was defeated. Former PM, and current opposition leader, Mahathir Mohamad, will become the new PM, the oldest head of government in the world at the age of 92. The opposition parties gained 54 seats from the government.
I have written about the Australian and US employment figures on my personal website. The current US unemployment rate is 3.9%, while Australia’s is 5.5%, but Australia’s participation rate is 2.7% higher than in the US. As a result, in my opinion, Australia’s employment situation is better than in the US.
In one fell swoop, the High Court’s judgment about the eligibility of Katy Gallagher as a Senator disposed of five members of Parliament.
Not only was Gallagher disqualified, but the consequence was that Susan Lamb, Justine Keay, Josh Wilson and Rebekha Sharkie had no legal ground left to stand on. They had to resign, and they did.
In each case, although they had initiated the procedure to renounce their foreign citizenship before the nomination date at the last election, that procedure had not been completed in the United Kingdom and they were still formally British citizens on nomination day. That was enough to see them disqualified.
A change in the law or a clarification?
The ALP had previously boasted of its rigorous vetting of its candidates, and expressed certainty they were all validly elected.
What went wrong? Has the High Court changed its interpretation of the Constitution or has it been consistent, as the Liberal Party claims?
The answer is that the previous position, as set out by the High Court, was ambiguous and could legitimately have been interpreted in two different ways. What the High Court did was to clarify the law by removing the ambiguity.
When the issue was first dealt with in the 1992 case of Sykes v Cleary, Chief Justice Mason and Justices Toohey and McHugh rejected a strict reading of section 44(i) of the Constitution on the ground that it would:
result in the disqualification of Australian citizens on whom there was imposed involuntarily by operation of foreign law a continuing foreign nationality, notwithstanding that they had taken reasonable steps to renounce that foreign nationality.
They considered that it would
be wrong to interpret the constitutional provision in such a way as to disbar an Australian citizen who had taken all reasonable steps to divest himself or herself of any conflicting allegiance.
Their Honours pointed out that even at federation, Australia was a nation of migrants, and that:
it could scarcely have been intended to disqualify an Australian citizen for election to Parliament on account of his or her continuing to possess a foreign nationality, notwithstanding that he or she had taken reasonable steps to renounce that nationality.
The ambiguity was whether the “reasonable steps test”: (a) only applies where the person would otherwise be disbarred from parliament because he or she was unable to renounce the foreign citizenship by any reasonable means; or (b) applies to all categories of dual citizenship, including those that can readily be renounced by following a reasonable procedure. This would mean that a candidate need only take all the reasonable steps within his or her power to renounce the foreign nationality prior to the nomination date, even if the formal renunciation did not happen until after that date.
Either view about what the court meant could have been fairly taken, but on balance most scholars favoured interpretation (b) because their Honours went on to apply the test of “reasonable steps” to two candidates who had dual citizenship with countries that permitted renunciation.
It was therefore unsurprising that the ALP, in its legal advice to candidates, took interpretation (b), with the consequence that some of its candidates undertook the renunciation process before the nomination date, but not sufficiently early for the renunciation to be completed prior to nomination.
While this approach was legitimate, it was not the most cautious one, as it involved a risk of invalidity if the High Court later decided that (a) was the correct approach.
Doubts arose about this interpretation when the High Court handed down its judgment last year in relation to Barnaby Joyce and the other “citizenship seven” in the Re Canavan case.
There, when discussing the “reasonable steps test”, the High Court did so solely in the context of the “constitutional imperative” to avoid the “irremediable exclusion” of citizens from being capable of election to parliament.
This left lawyers wondering whether the reasonable steps test applied more broadly, and the court had simply not mentioned it in that context, or whether the Court was confining its application to circumstances where the foreign citizenship could not be renounced at all.
What the High Court decided in the Katy Gallagher case
We now have an answer – the court took interpretation (a) above. It held that the “reasonable steps test” only applies where it is impossible or not reasonably possible to renounce the foreign citizenship.
In such a case, the person must still take all reasonable steps within his or her power to renounce that citizenship (but not the “unreasonable” ones). Once this is done, the person can stand for Parliament even though the foreign citizenship continues.
But if the impediment is simply slow processing, or that renunciation is a matter of discretion, this is not enough to trigger the exception. The process of renunciation has to be completed in accordance with the law and procedures of the foreign country before the person nominates as a candidate in a Commonwealth election.
Has this now resolved all the problems?
We now have more certainty than we did a year ago. We know that a person can be disqualified for holding dual citizenship, even when it was inherited through parents and the person holding it did not know of its existence. Ignorance is no excuse. We also now know that a person has to complete the process of renunciation of that foreign citizenship before he or she nominates to stand for parliament, even if it takes a long time to complete it.
The only exemption will be if it is impossible to renounce the foreign citizenship or the steps for doing so are unreasonable, such as a requirement that would involve a risk to the person, such as residency in a dangerous country.
It is in this area that there may yet be litigation. Some countries make it very difficult to renounce foreign citizenship, and the court may have to decide in the future about the point at which that difficulty becomes unreasonable. So this may not necessarily be the last of these cases.
What are the ramifications?
In practice, it will mean that political parties need to complete their pre-selection processes well before an election to allow sufficient time for any renunciation. If there is a snap election, or where casual vacancies or byelections occur and a candidate is needed quickly, those with dual citizenship may have to be passed over if there is not enough time to renounce the foreign citizenship.
It is also likely that arrangements will be made with some countries, such as the United Kingdom, to fast-track processing of renunciation to deal with this problem.
But in other countries, this will not be feasible, so some potential candidates will have to renounce a long time in advance in order to be ready to nominate if the opportunity arises. The message to every aspiring politician is to check your family tree, identify any foreign citizenship you may have and renounce now.
Can this be fixed?
Realistically, the only way of removing this problem is by way of a constitutional amendment approved by a referendum. There have been many past proposals to repeal this disqualification, or to replace it with a requirement that all candidates be Australian citizens, or instead to give parliament the power to deal with the issue by legislation.
It would not be necessary to abandon the principle that members of parliament have sole allegiance to Australia. Instead, this could be achieved by legislation that puts control over renunciation of foreign citizenship into Australian hands.
The biggest problem with the current provision is that both the law as to who is a foreign citizen and the procedure to renounce it are outside Australian control.
Would such a referendum be successful? I have my doubts. It is likely to be perceived as something to help politicians, not the people.
But this High Court judgment will make it more difficult for people from some countries to become members of parliament, and that unfairness may provide a stronger argument to support a referendum to change the system.
Voters in four states will face byelections after three Labor MPs and a crossbencher announced they were resigning from parliament in the wake of a landmark High Court decision disqualifying ACT Labor senator Katy Gallagher on the grounds that she was a dual British citizen when she nominated for the 2016 election.
Labor’s Josh Wilson (WA), Justine Keay (TAS), and Susan Lamb (QLD) and the Centre Alliance’s Rebekha Sharkie (SA) quit within hours of the judgement.
Another byelection will also come from the proposed resignation of the ALP’s Tim Hammond (WA) who is stepping down for family reasons.
Lamb, who holds the highly marginal Queensland seat of Longman will have to renounce her British citizenship before she can recontest her seat. Bill Shorten said he was confident she could do so in time for a byelection.
The High Court has disqualified ACT Labor senator Katy Gallagher from sitting in parliament, in a decision opening the way for four byelections, three of them in Labor seats.
The decision, reigniting the citizenship crisis, has transformed the immediate political landscape, overshadowing Tuesday’s budget and putting immense pressure on Opposition Leader Bill Shorten, who delivers his budget reply on Thursday, to have three ALP MPs immediately quit.
Gallagher was ineligible to sit because she had not completed the renunciation of her dual British citizenship when she nominated for the 2016 election.
The four MPs in the firing line are Susan Lamb in the Queensland seat of Longman (0.8% margin), Justine Keay from Braddon in Tasmania (2.2%), Josh Wilson who holds Fremantle in Western Australia (7.5%) and crossbencher Rebekha Sharkie from the South Australian seat of Mayo (5.4%).
Labor already faces a byelection for the seat of Perth, with Tim Hammond announcing last week he would resign for family reasons.
Attorney-General Christian Porter declared the court had provided a “crisp and crystal-clear clarification” of the law. He called for the resignations of the Labor MPs by the end of the day.
Porter flatly rejected Shorten’s earlier statement that the court had set a new precedent. Shorten said Labor would now consider the implications of the decision.
Porter said for Shorten to claim it was a reinterpretation was “talking absolute rubbish”.
“We all knew what the circumstance was last October”, when the court ruled on the case of the Nationals’ Matt Canavan, Porter said.
“Bill Shorten must require the resignation of those three Labor members today, and that must occur before close of business today,” he said.
Neither side looks forward to a plethora of byelections, which are expensive and with unpredictable fallout, so close to a general election.
The contest in Longman would be testing for Labor. The Liberals would have a prospect of picking up Mayo. Sharkie is from the Centre Alliance, formerly the Nick Xenophon Team, the fortunes of which have collapsed.
University of Sydney constitutional expert Anne Twomey said the crux of the court’s decision was that the test of someone having taken reasonable steps to renounce their foreign citizenship – the argument on which Gallagher relied – applied only when the country actually or effectively would not let the person renounce. This did not apply with UK citizenship.
Twomey said the four MPs in question, who were all British citizens when they nominated, were in similar circumstances to Gallagher’s.
She added that “the real problem will be for those people from countries where it is difficult to renounce or it takes a very long time.
“Parties will have to complete pre-selection at least a year before an election to allow sufficient time for renunciation, and even this might not be enough for people from some countries.
“It will also narrow the field for filling casual vacancies to those who have no foreign citizenship, so that renunciation problems can be avoided. The big message here for anyone who might want to be a member of parliament in the future is to renounce now.”
George Williams, from the University of New South Wales, said there could be more MPs caught by the decision.
As a senator, Gallagher’s disqualification does not trigger a byelection – she is set to be replaced on a recount by the next person on the ALP ticket, David Smith.
Sharkie said she would now take urgent legal advice.
“It is my belief that the particulars of my circumstances are materially different to Senator Gallagher’s case. My paperwork was lodged and received by the UK Home Office before the election was called. My paperwork was returned before the election was held.”
Porter rejected her argument that her circumstances were different.
Gallagher said she had always acted on legal advice which indicated she satisfied the eligibility requirements. But she respected court’s decision.
“I believe that I have more to contribute to public life and I will take the time to talk with Labor Party members on how I can do this over the months ahead,” she said.
The citizenship crisis has claimed nine federal parliamentarians since the election. Another two, Barnaby Joyce and John Alexander, were either ruled ineligible or resigned but are still in parliament after being returned at byelections.
In the earlier stages of the citizenship crisis Shorten had been adamant that all Labor MPs had fulfilled the constitutional requirement on citizenship.
Over the past two months, things have been uncharacteristically quiet on the dual citizenship front. That is all about to change when the High Court (sitting as the Court of Disputed Returns) hands down its long-awaited decision on the eligibility of Senator Katy Gallagher. Whatever the result, this decision has implications beyond the immediate fate of the Labor senator.
Unlike the previous cases, Gallagher admits she knew of her dual citizenship, but maintains she was still eligible because she had taken “all necessary steps” to renounce it.
Before nominating, Gallagher had submitted the prescribed renunciation form and the renunciation fee had been debited from her credit card. However, the UK Home Office subsequently requested further documents and did not formally register her renunciation until after the 2016 federal election.
What will the court decide?
The question before the High Court is whether somebody who has begun the renunciation process but is technically still a dual citizen at the time of nomination is eligible to be elected to parliament.
In one of the earliest cases considering dual citizenship in 1992, the High Court raised the possibility of an “all reasonable steps” exception to the dual citizenship disqualification. In the recent “Citizenship Seven” case the court confirmed there were limits to section 44. It found that if a foreign law made it impossible (or not reasonably possible) for a person to renounce their foreign citizenship, they would not be disqualified provided they had taken “all reasonable steps” within their power to renounce.
The present case turns on just how wide the “all reasonable steps” exception is held to be. Does section 44 just require a person to take all reasonable steps within their power to renounce, regardless of whether that renunciation is actually effective? Or is the exception limited only to circumstances where a foreign law makes renunciation practically impossible?
As the prime minister has learnt, it is never easy to predict with any certainty what the High Court will decide. If Senator Gallagher is to remain in parliament, she needs the court to take an expansive approach to the section 44 exception.
However, in both the Citizenship Seven and Hollie Hughes cases, the High Court has adopted a stricter interpretation of section 44, which would likely lead to disqualification if it approaches this case in the same way.
What happens next?
Obviously the High Court decision will have an immediate impact on Gallagher. If she is found to be ineligible, then a recount will likely mean that her replacement in the Senate is David Smith. He was the second ALP Senate candidate for the ACT at the 2016 election.
Importantly, this is a decision that has potential impacts on at least four other parliamentarians. The citizenship declarations of Susan Lamb, Justine Keay and Josh Wilson from the ALP, and Rebekah Sharkie from the Centre Alliance, all show they were technically British dual citizens at the time of nominating for the last federal election.
All four have made similar claims to Gallagher in terms of having taken “all reasonable steps” to renounce their dual citizenship. If Gallagher is held to be ineligible, the status of these members will undoubtedly also be in question.
Importantly, there are factual differences between all of these cases. This means much will turn on the precise reasoning contained within the High Court decision on Gallagher. If the court adopts the same strict approach as in recent section 44 cases, there would be a strong case for arguing that these other four parliamentarians should resign immediately.
Conversely, if the court finds Gallagher is eligible, much of the heat will be taken out of the dual citizenship controversy. It may even mean that we have seen the last of the dual citizenship referrals.
Parliamentary committee report
In all the speculation about the pending High Court decision, it should not be forgotten that the Joint Standing Committee on Electoral Matters is expected soon to hand down its final report following its inquiry into section 44.
While today’s High Court decision will have an immediate impact on the composition of the current parliament, the committee report is perhaps even more significant in terms of its potential effect on the broader conversation about section 44 and constitutional reform.
A ReachTEL poll for Sky News, presumably conducted Monday or Tuesday from a sample of over 2,000, gave Labor a 52-48 lead, a two-point gain for the Coalition since a late March ReachTEL. Primary votes were 36% Coalition (up two), 35% Labor (down one), 10% Greens (steady) and 6% One Nation (down one).
The 13% who did not express a preference for the four stated parties almost certainly include undecided as well as Other voters. As usual, media sources have omitted these details.
ReachTEL uses respondent allocated preferences. According to analyst Kevin Bonham, this poll would be about 52.7% to Labor by 2016 election preferences.
Malcolm Turnbull led Bill Shorten by 54.5-45.5 as better PM, a two-point gain for Turnbull since late March. 48% would prefer an earlier return to surplus, while 39% would like a tax cut in the budget. By 50-30, voters supported Labor’s policy for a 90-day limit on holding asylum seekers on Manus Island and Nauru.
Last week’s Newspoll was 51-49 to Labor using Newspoll’s changed method (since the November 2017 Queensland election) of assigning about 60% of One Nation preferences to the Coalition, instead of the half that were assigned previously.
One Nation is a far-right party that attracts Tony Abbott supporters who believe Turnbull is too left-wing. Liberal leadership polls show the highest support for Abbott is with One Nation voters.
Given the 65% preference flow from One Nation to the LNP at the Queensland election, the clear preference for Abbott over Turnbull with One Nation voters and respondent preferences being about one point better for the Coalition than 2016 preferences, Newspoll is justified in shifting its preference flow assumptions for One Nation.
Since late March, Ipsos, Newspoll and ReachTEL polls have shown a trend to the Coalition, with only Essential moving the other way. Left-wing partisans should stop complaining about Newspoll, and acknowledge that Labor’s lead is diminishing.
Labor’s Perth MP Tim Hammond resigns, causing byelection
On Wednesday, Tim Hammond resigned as the federal Labor Member for Perth. A byelection will be required to replace him.
At the 2016 election, Hammond won Perth by a 53.3-46.7 margin against the Liberals, a 1.2% swing to Labor. Primary votes were 42.3% Liberal, 37.4% Labor and 17.1% Greens. In Western Australia overall, there was a 3.6% two party swing to Labor in 2016.
The relatively small margin in Perth implies that the seat could be competitive if the Liberals field a candidate, particularly if the Liberal candidate is well-known and popular. Labor will not lose Hammond’s personal vote, as he was first elected in 2016; personal votes of sitting members usually take two elections to build.
According to The Poll Bludger’s BludgerTrack, there is currently an 8% two party swing to Labor in Western Australia since the 2016 election. If this is the case, Labor should easily hold Perth.
Defying her party, Liberal Sue Hickey wins Tasmanian Speakership
At the March 3 Tasmanian election, the Liberals won 13 of the 25 seats, Labor ten and the Greens two. On Tuesday (the first sitting day since the election), Rene Hidding, the endorsed Liberal candidate for Speaker of the lower house, was defeated by Sue Hickey, 13 votes to 12. Hickey’s votes came from Labor, the Greens and Hickey herself.
Hickey has said she will remain a Liberal, but will not attend party room meetings, and will vote independently, though she will “mostly” vote with the Liberals. The Liberals have not yet lost their majority, but if Hickey votes with Labor and the Greens on major legislation, they will lose it.
Hickey was the former Mayor of Hobart, and was the second of two Liberals elected from the Hobart-based seat of Denison, the most left-wing Tasmanian electorate.
According to Bonham, Hickey is the first Speaker in Tasmanian history to become Speaker immediately after being elected to Parliament.
Strong swings to US Democrats at byelections
At a byelection for Pennsylvania’s 18th Congressional District (CD) held on March 13, the Democrat, Conor Lamb, defeated the Republican, Rick Saccone, by a 49.8-49.6 margin. Donald Trump had crushed Hillary Clinton in this district by almost 20 points at the 2016 Presidential election.
On April 24, Republicans held Arizona’s eighth CD by 52.4-47.6, but this was a 16-point difference from Trump’s 21-point margin in 2016. In December 2017, Democrats won the Alabama Senate byelection in a state Trump had won by 28 points.
CNN analyst Harry Enten says the Democrats have performed an average 17 points better than expected given partisan lean at federal byelections in 2017-18.
According to Daily Kos Elections, in state and federal byelections held in 2018, Democrats have overperformed the 2016 Presidential margins by an average 15 points, and the 2012 Presidential margins by an average six points.
In the FiveThirtyEight poll aggregate, Trump has a 41.2% approve, 52.9% disapprove rating. Trump’s ratings have been very steady since early March, with a slight recent uptick, probably owing to the peace talks between North and South Korea. Trump’s approval is below all his predecessors since Harry Truman at this point in their presidencies.
Democrats hold a 46.8-39.0 lead over Republicans in the race for Congress. All 435 House seats are up for election on November 6. Owing to natural clustering of Democratic voters and Republican gerrymandering, Democrats probably need to win the House popular vote by about seven points to take control. The swing to the Democrats in national House polls is far lower than the swing in byelections.
35 of the 100 Senate seats are also up for election on November 6, including two Senate byelections in Mississippi and Minnesota. 26 of these seats are currently held by Democrats and just nine by Republicans. Democrats will be defending five states that voted for Trump by at least 18 points. It will be very difficult for Democrats to win a Senate majority despite Republicans currently holding the Senate by just a 51-49 margin.