View from The Hill: Morrison government’s message to Daniel Andrews: ‘open faster’


Michelle Grattan, University of Canberra

Daniel Andrews’ Sunday announcement of some modest steps out of lockdown will bring both relief and reassurance to many Victorians, but frustration to those who think he should move faster.

Certainly the Morrison government wants the state to take bigger strides.

As the federal government finalises next week’s budget, with a deficit for this financial year of a magnitude none of us have seen before and large red numbers into the future, Morrison, Treasurer Josh Frydenberg and Health Minister Greg Hunt applied the blow torch to the premier.

“It will be important that more be done in the weeks ahead to safely ease more restrictions,” they said in a joint statement.

“We note that at similar case levels NSW was fundamentally open while remaining Covidsafe due to a world class contact tracing facility.

“As many epidemiologists have encouraged, we would support Victoria in reviewing the trigger of five and zero cases with regards to the third and last steps.

“As it stands this lockdown is already longer than that faced by residents in many cities around the world. We remain deeply concerned about the mental health impacts of a prolonged lock down on Melbourne residents,” they said.

Andrews has responded to a more rapid than expected fall in new cases, and says he will now be driven by numbers rather than dates.

But there is every indication he will continue to be risk averse, after the disaster of the second wave, and on the evidence of last week’s Newspoll, he has public support for that approach. Some 62% of Victorians thought he was handling COVID-19 well.

Andrews has become a highly polarising figure in the pandemic and that’s only likely to increase after his and other evidence to the inquiry into hotel quarantine, followed by Saturday’s resignation of Health Minister Jenny Mikakos.

In contrast to his demeanour at his news conferences, when appearing before the inquiry on Friday, Andrews seemed to be barely containing his anger.

He, like a conga line of witnesses, couldn’t say who had decided to use private security guards to supervise the quarantine.

But he made it clear he held Mikakos responsible for the program.

She, however, thought responsibility spread more widely and indicated her resignation was triggered by Andrews throwing her under the bus.

It continues to be unfathomable to most observers that no one – whether minister, bureaucrat or anyone else – can answer the fundamental but on the face of it simple question: who made the decision about the private security guards?

But Kristen Rundle, from Melbourne University’s Law School, is not so surprised, given the often opaque accountability situations created by contracting out, increasingly a default practice of governments around the country.

She writes in a policy brief titled Reassessing Contracting-Out published last week, that “we need to look beyond standard mechanisms of political accountability in order to address the structural problems posed by contracting-out high-stakes government functions.

“Specifically, we need to analyse more deeply the appropriateness of contracting-out in cases that carry serious consequences for public safety and security, and develop frameworks to achieve better decision-making on when, and whether, to contract out complex government functions.

“The failures in this case underscore that choices about who delivers such government functions, and how, matter to those directly affected by them.”

Clearly the Victorian disaster had three root causes: the bad quarantine arrangements, the failure of Victorian contact tracing and the vulnerability of aged care.

The first two can be completely sheeted home to the Victorian government; aged care is a federal government responsibility, although the state government is responsible for the public health aspects.

Andrews’ supporters aren’t too preoccupied with the state government’s mistakes. They believe he has put health first (despite the death toll, which has been overwhelmingly in aged care). They have been impressed by his willingness to front up day after day to those extended news conferences. They see that as a sign of accountability.

The premier’s critics look at the news conferences in a totally different way. Andrews’ physical presence is not a mark of accountability, they argue, because he pushes aside vital questions (often repeated again and again), saying they must wait for the inquiry’s findings.

Many of Andrews’ strongest critics are those who believe the economy and people’s livelihoods have not received sufficient consideration generally in the pandemic. They are outraged at the economic costs of Victoria’s second wave, and at the slowness of the reopening.

The divisions have an ideological element between the priorities of the left and the right during the crisis.

Mikakos’ quitting has renewed the calls from those who say it is the premier who should go.

There doesn’t seem a lot of common sense in this. Andrews has said he accepts ultimate responsibility for what’s happened. So he should – what’s occurred in Victoria has been appalling.

But would his going actually do any good? Would a replacement perform any better? Would a change of leader amount to anything more than a notch on the critics’ belts?

While Andrews remains the best person for the current job, the pandemic has revealed serious inadequacies in his government, and thus in his leadership, and in parts of the state’s administration.




Read more:
Daniel Andrews has flagged a quicker easing of Melbourne’s restrictions. But cases are still in the ‘red zone’


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.

Frydenberg is setting his budget ambition dangerously low


Brendan Coates, Grattan Institute and Matthew Cowgill, Grattan Institute

Treasurer Josh Frydenberg’s announcement that he’ll prioritise reducing unemployment ahead of reducing government debt is welcome news.

The government is required by the Charter of Budget Honesty to develop and publish a fiscal strategy to be used in each budget.

The one that it has been using doesn’t mention unemployment at all and instead talks about offsetting new spending “by reductions in spending elsewhere” and commits it to “achieve budget surpluses, on average, over the course of the economic cycle” – something that’s not going to happen for a long time.

A realistic fiscal strategy is a good idea. A lot of behaviour is driven by expectations. If consumers and businesses think the government is going to slash and burn its way to a surplus, any stimulus in the meantime will be less effective.

People are more likely to save, and businesses less likely to hire, if they think tax hikes and spending cuts are around the corner.

A clear statement that is not the case will help.

But the Treasurer’s pledge to keep running deficits “until the unemployment rate is comfortably back under 6%” is nowhere near ambitious enough.

Former US Federal Reserve Chairman William McChesney Martin Jr. once famously said that the central bank’s role is “to take away the punch bowl just as the party gets going”.

Tightening budget policy – raising taxes or cutting spending – when unemployment crosses the 6% mark would be packing away the booze when many of the guests haven’t even arrived.

In the 15 years before COVID-19 struck, Australia’s unemployment rate had been above 6% only briefly, between mid 2014 and early 2016.


Unemployment rate, 2015 – 2019

Seasonally adjusted.
ABS Labour Force, Australia

The unemployment rate was well below 6% before the pandemic struck, yet the labour market was clearly running below its potential.

Before the pandemic, the Reserve Bank revised down its estimate of the unemployment speed limit – the unemployment rate at which inflation and wages would accelerate – from 5% to around 4.5%.

The Treasurer should wait until we’re closer to that speed limit before reaching for the brakes. The difference between 6% and 4.5% unemployment might not sound like much, but it amounts to an extra 200,000 people or so in work.

And it affects the rest of us too. Most Australians won’t get anything more than modest pay rises until the labour market tightens.

The danger is declaring victory too soon

The government handled the acute phase of this crisis well, although not perfectly. It deserves credit for moving very quickly to support the economy. But the danger now is that it turns too soon to budget tightening, stunting a nascent recovery.

This is the mistake many governments and central banks made after the global financial crisis – acting commendably to shore up activity in the crisis phase, but then pulling away support before enough of the damage had been repaired.

With interest rates so low, the government has a lot of capacity to run deficits without the debt-to-GDP ratio getting out of control.

As Frydenberg noted, “with historically low interest rates, it is not necessary to run budget surpluses to stabilise and reduce debt as a share of GDP — provided the economy is growing steadily”.




Read more:
COVID will leave Australia with smaller economy and older population: Frydenberg


It’s a point made by former IMF Chief Economist Olivier Blanchard in one of the most influential recent papers in economics – his 2019 presidential address to the American Economics Association.

Blanchard noted that when the interest rate on government debt is less than the nominal growth rate of the economy, “public debt may have no fiscal cost”.

We’ve access to money for nothing

The Australian government can borrow for 10 years at a fixed interest rate of about 0.9%. It recently issued 30-year fixed-rate bonds for less than 2%.

Both are less than the Reserve Bank’s inflation target, suggesting that over time in real terms the money will cost nothing.

Over the past five years, Australia’s nominal growth rate has averaged 4%. The most recent Intergenerational Report projected average nominal growth of 5.25% a year for 40 years.

Even if economic growth falls well short of that projection it is hard to imagine it going below the rate at which the government can borrow for very long.

That means debt is likely to remain manageable relative to the size of the economy, and debt servicing costs will be modest, particularly compared to the benefits of stimulus.




Read more:
Now we’ll need $100-$120 billion. Why the budget has to spend big to avoid scarring


Over the medium-term the government will need to ensure its debt is sustainable and does not continue to rise as a share of the economy.

But rushing too quickly to “repair” the budget position would be an economic ‘own goal’ – hampering job creation, economic growth, and ultimately the bottom line it sought to protect.

Reserve Bank Deputy Governor Guy Debelle said this week that “absent the fiscal stimulus, the economy would be significantly weaker and debt levels even higher”.

He is right. Taking the foot off the economic accelerator when unemployment is at 6% would condemn Australia to a long and slow recovery. It’s not in the Treasurer’s interest, and it’s not in ours.The Conversation

Brendan Coates, Program Director, Household Finances, Grattan Institute and Matthew Cowgill, Senior Associate, Grattan Institute

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

Coalition regains Newspoll lead; time running out for Trump



AAP/Dean Lewins

Adrian Beaumont, University of Melbourne

This week’s Newspoll, conducted September 16-19 from a sample of 2,068, gave the Coalition a 51-49 lead, a one-point gain for the Coalition since the previous Newspoll, three weeks ago.

Primary votes were 43% Coalition (up two), 34% Labor (down two), 12% Greens (up one) and 3% One Nation (steady) – all figures from The Poll Bludger.

65% were satisfied with Scott Morrison’s performance (up one), and 31% were dissatisfied (down one), for a net approval of +34. Anthony Albanese’s ratings fell into negative territory: his net approval was -1, down three points. Morrison led Albanese as better PM by 59-27 (58-29 last time).

The last Newspoll had the Coalition’s lead dropping from 52-48 to a 50-50 tie, while Morrison’s net approval was down seven points. This Newspoll implies movements in the previous Newspoll may have been exaggerated.

It is also possible the federal Coalition is benefiting from restrictions to fight coronavirus becoming less popular in Victoria. A Morgan Victorian state poll (see below) gave Labor a narrow lead, but that lead was well down on the November 2018 election result. In other state polls, there was a clear surge to the incumbent government.

Australian state polls: Victoria, South Australia and Tasmania

A Victorian SMS Morgan poll, conducted September 15-17 from a sample of 1,150, gave Labor a 51.5-48.5 lead over the Coalition, a six-point gain for the Coalition since the November 2018 state election. Primary votes were 38.5% Coalition, 37% Labor and 12% Greens. Morgan’s SMS polls have been unreliable in the past.

A South Australian YouGov poll, conducted September 10-16 from a sample of 810, gave the Liberals a 53-47 lead over Labor, a six-point gain for the Liberals since March, likely due to the state’s handling of coronavirus. Primary votes were 46% Liberals (up seven), 35% Labor (down three) and 10% Greens (down one).

Liberal Premier Steven Marshall had a massive surge in net approval, to +52 from -4 in March. Opposition Leader Peter Malinauskas had a +22 net approval.

A Tasmanian EMRS poll, conducted August 18-24 from a sample of 1,000, gave the Liberals 54% (up 11 since the last publicly released EMRS poll in March), Labor 24% (down ten) and the Greens 12% (steady). Liberal Premier Peter Gutwein led Opposition Leader Rebecca White by 70-23 as better premier (41-39 to White in March).

Time running out for Trump

This section is an updated version of an article I had published for The Poll Bludger last Thursday.

Six weeks before the November 3 election, FiveThirtyEight’s national aggregate gives Joe Biden a 6.8% lead over Donald Trump (50.3% to 43.5%). This is an improvement for Trump from three weeks ago, when he trailed by 8.2%. In the key states, Biden leads by 7.6% in Michigan, 6.6% in Wisconsin, 4.6% in Pennsylvania, 4.5% in Arizona and 2.0% in Florida.

In my article three weeks ago, the difference in Trump’s favour between the Electoral College tipping-point state and the national vote had widened to three points, but this difference has fallen back to about two points, with Arizona and Pennsylvania currently two points more favourable to Trump than national polls.

If Biden wins all the states carried by Hillary Clinton in 2016, plus Michigan, Wisconsin and Arizona, he gets exactly 269 Electoral Votes, one short of the 270 required for a majority. Maine and Nebraska award one EV to the winner of each of their Congressional Districts, and two to the statewide winner. All other states award their EVs winner-takes-all.

Under this scenario, Biden would need one of either Nebraska’s or Maine’s second CDs for the 270 EVs required to win the Electoral College. Nebraska’s second is a more likely win for Biden as it is an urban district.

The US economy has rebounded strongly from the coronavirus nadir in April. Owing to this, the FiveThirtyEight forecast expects some narrowing as the election approaches. Every day that passes without evidence of narrowing in the tipping-point states is bad news for Trump. Biden’s chances of winning in the forecast have increased from a low of 67% on August 31 to 77% now.

While Trump has improved slightly in national polls, some state polls have been very good for Biden. Recently, Biden has had leads of 16 points in Minnesota, 21 points in Maine, 10 in Wisconsin and 10 in Arizona.

Trump’s ratings with all polls in the FiveThirtyEight aggregate are currently 43.2% approve, 52.7% disapprove (net -9.5%). With polls of likely or registered voters, his ratings are 44.0% approve, 52.8% disapprove (net -8.8%). In the last three weeks, Trump has gained about two points on net approval, continuing a recovery from July lows.

The RealClearPolitics Senate map has 47 expected Republican seats, 46 Democratic seats and seven toss-ups. If toss-ups are assigned to the current leader, Democrats lead by 51-49, unchanged from three weeks ago.

Coronavirus and the US economy

The US has just passed the grim milestone of over 200,000 deaths attributable to coronavirus. However, daily new cases have dropped into the 30,000 to 50,000 range from a peak of over 70,000 in July. Less media attention on the coronavirus crisis assists Trump.

In the US August jobs report, 1.4 million jobs were created and the unemployment rate fell 1.8% to 8.4%. The unemployment rate has greatly improved from its April high of 14.7%.

The headline jobs gained or lost are from the establishment survey, while the household survey is used for the unemployment rate. In August, the household survey numbers were much better than the establishment survey, with almost 3.8 million jobs added.

It is probably fortunate for Biden that the September jobs report, to be released in early October, will be the last voters see before the election. The October report will be released November 6, three days after the election.

I believe Trump should focus on the surging economy in the lead-up to the election, and ignore other issues like the Kenosha violence and culture war issues. Particularly given the Supreme Court vacancy, Biden should focus on Trump and Republicans’ plans to gut Obamacare.

Implications of Ruth Bader Ginsburg’s death

On Friday, left-wing US Supreme Court Justice Ruth Bader Ginsburg died. While Democrats control the House of Representatives, only the Senate gets a vote on judicial appointments, and Republicans control that chamber by 53-47.

Even if Democrats were to win control of both the Senate and presidency at the November 3 election, the Senate transition is not until January 3, with the presidential transition on January 20.

There is plenty of time for Trump to nominate a right-wing replacement for Ginsburg, and for the Senate to approve that choice. That will give conservative appointees a 6-3 majority on the Supreme Court.The Conversation

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

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

Morrison’s foreign relations bill should not pass parliament. Here’s why


Melissa Conley Tyler, University of Melbourne

The Morrison government wants sweeping new powers to cancel international arrangements by universities, councils and state governments.
After announcing its intentions in August, it introduced a bill to parliament last week.

The government argues the bill is needed to “ensure a consistent and strategic approach to Australia’s international engagement”. Prime Minister Scott Morrison has said Australia must “speak with one voice”.

But the bill should not pass parliament.

Not only has the government failed to identify any specific problem with the status quo, the bill rests on a fundamental misunderstanding of the nature of modern diplomacy.




Read more:
Morrison government set to target Victorian ‘belt and road’ agreement under sweeping new legislation


Modern diplomacy is about multiple voices

For decades, Australia has had international agreements beyond the federal level. A huge number of actors interact internationally and affect how Australia is viewed. This can’t be exclusively managed from Canberra.

Over the past year, I’ve been researching new diplomatic actors – including sister cities, think tanks, sports diplomacy, international education, student mobility and corporate diplomacy.




Read more:
Explainer: can the federal government control the ability of states to sign deals with foreign governments?


There are 87 state trade and investment offices overseas and 500 sister cities, including more than 100 with China. Each university would have hundreds of international agreements, including for students to study abroad for a semester and for research collaboration.

The proposed legislation mistakenly rests on the idea that speaking with “one voice” in foreign policy is a positive thing, when the modern idea of diplomacy emphasises broad engagement.

Australia benefits when multiple actors across society engage internationally to balance the ups and downs in official relations. As American author Parag Khanna memorably described it, “diplomacy is no longer the stiff waltz of elites but the jazzy dance of the masses”.

This bill overreaches

The legislation badly overreaches by seeking to regulate activities across education, culture, research and trade.

For example, it treats a visual artist exchange between Victoria and Jiangsu or a library agreement between the City of Sydney and Guangzhou as issues of foreign policy.

Including universities is also a step too far. It was originally thought the legislation would only cover arrangements between universities and foreign agencies, but it also covers universities that do not have institutional autonomy, which is a large number of foreign universities. This vastly increases the scope of regulation.




Read more:
Explainer: what are Confucius Institutes and do they teach Chinese propaganda?


Meanwhile, the test for vetoing a foreign arrangement is far too wide. The foreign minister can declare an arrangement invalid if it is likely to adversely affect Australia’s foreign relations (undefined) or be inconsistent with Australia’s foreign policy (defined as whatever the minister says it is, whether or not written or publicly available). “Arrangements” include anything in writing, whether or not legally binding.

We don’t actually need this bill

In sounding the alarm, the government has failed to pinpoint a real problem.

For example, there is zero evidence that a non-binding, symbolic memorandum of understanding between Victoria and China on to the Belt and Road Initiative has hampered the Commonwealth in pursuing Australia’s foreign policy.




Read more:
Why is there so much furore over China’s Belt and Road Initiative?


It is important to note Australia already has the ability to protect itself, with existing laws on espionage, foreign interference and foreign investment and a University Foreign Interference Taskforce. We made it through the Cold War without needing this type of legislation.

What will happen if the bill passes?

Apart from being unnecessary over-regulation, the bill will also create problems for Australia if passed.

Firstly, the Department of Foreign Affairs and Trade will have to divert resources to this new function when its funding is the lowest in history.

This means diplomats, who could be pro-actively working to promote the national interest, must check potentially tens of thousands of overwhelmingly non-controversial arrangements like the City of Warrnambool’s local export bureau with Changchun or the City of Darwin’s student English language competition in Haikou.

Secondly, the bill is likely to reduce international linkages due to uncertainty about what will be approved. Educational or cultural exchanges are the most at risk.

State and local governments will continue to promote trade, but they will waste time filling in the prescribed form to take, say, a delegation of Australian start-ups to pitch to investors in Nanjing.

Beyond this, the legislation sends exactly the wrong message to the wider community: to be uneasy about international engagement.

And all of this at a time of economic recession, when we need to find new avenues for growth. Sister cities have been shown to have measurable direct economic benefits, while state government export and investment promotion brings local jobs.

What could we do instead?

There are better solutions: more information-sharing between different levels of government; a one-page bill banning state governments from the Belt and Road Initiative.

Even giving the foreign affairs minister the power to request information on, and then cancel, any specific arrangement would be better than the overkill regulatory burden proposed.

And if, as many believe, the bill is directed at China, the irony is that fighting the Chinese Community Party seems to bring out the Australian government’s authoritarian tendencies.

Speaking with one state-approved voice is not what a open democracy like Australia should aim to achieve.The Conversation

Melissa Conley Tyler, Research Fellow, Asia Institute, University of Melbourne

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

View from The Hill: Barilaro keeps Nationals in the tent; koalas stay in limbo


Dean Lewins/AAP

Michelle Grattan, University of Canberra

Several premiers presently find themselves at war with the federal government. NSW Premier Gladys Berejiklian, by contrast, suddenly found herself locked in battle with her deputy premier, John Barilaro, and his bolshie band of Nationals.

The junior partner in the NSW coalition chose this week to pull on a stoush over a new regime the state government launched months ago to protect koalas, which have been devastated and displaced by fires and drought.

That a row over koalas could shake the Berejiklian government to its core during a pandemic is startling, at the least. The Nationals justify this by saying they’d long been told their concerns would be considered, and they hadn’t been.

They insist they’re not anti-koala — they’d like to see the population doubled, they say — but claim the new regime is too burdensome, including by extending the definition of core koala habitat and increasing the number of koala tree species.




Read more:
The NSW koala wars showed one thing: the Nationals appear ill-equipped to help rural Australia


The Nationals are under pressure from farmers and, at a political level, from the Shooters, Fishers and Farmers party, which is always nipping at their heels.

Within the Nationals, pressure built with first one, then two, and several more MPs in revolt — and quickly the whole party. Efforts to get a special meeting to deal with the koala issue were unsuccessful – the premier had other things on her plate.

By Thursday, the Nationals had resolved that until the koala row was addressed they’d no longer attend joint party room or parliamentary leadership meetings and would abstain from voting on government bills. (They reserved the right to support bills and motions important to regional areas.)

“This effectively puts the entire party on the crossbench,” the party said in a statement.

Barilaro insisted the Nationals could take this stand while their ministers remained in cabinet.

This would have made them sort of “virtual” crossbenchers – a very strange notion indeed under the Westminster system.

A frustrated Berejiklian issued an ultimatum. “It is not possible to be the deputy premier or a minister of the Crown and sit on the crossbench,” she said in a statement.

She said she’d told Barilaro that he and his Nationals cabinet colleagues had until 9am Friday “to indicate to me whether they wish to remain in my Cabinet or else sit on the crossbench”.

By Friday morning, Barilaro had stepped his party back from the brink. After a meeting with Berejiklian, the two leaders said in the briefest of statements the coalition remained “in place”, as did “cabinet conventions and processes”.




Read more:
Nationals have long valued stable leadership and being strong Coalition partners – this shouldn’t change now


Meanwhile, koalas were to be dealt with at a coming cabinet meeting. The extraordinary upheaval may be over for now, but it leaves scars, questions, uncertainty and tension.

Most obviously, the substantive issue is still unresolved. If the Nationals don’t get their way on changes to the koala regime, there could easily be another explosion. If they do, many Liberals will be angry.

The Nationals’ constituency will be behind the party’s stand. But for numerous Liberal supporters, compromise on as emotive an issue as koalas will be an electoral no-no.

This week’s events have again brought into question Barilaro’s judgement.

He was caught between the strong feelings within his party and the need to maintain the coalition. He laid himself open to criticism of firstly overreaching and then failing to carry through his threat.

This is against the background of his behaviour before the Eden-Monaro byelection, when he as good as said he would run for the seat and then said he wouldn’t.




Read more:
Eden-Monaro opens wounds in Nationals, with Barilaro attack on McCormack


Even some Nationals shake their heads, while the Liberals resent what Berejiklian has to put up with.

At one stage on Thursday, Barilaro asked his parliamentary party if they thought someone else would be better to lead them. The idea was dismissed. Nevertheless, the past few days have fanned doubts about his style of leadership.

Most serious in the immediate term, the trust between Berejiklian and Barilaro has been further eroded, after taking a knock from his conduct over Eden-Monaro. The NSW coalition remains intact, but no one can miss the crack that has been repaired by superglue. It is not as robust as it once was.

And Berejiklian has less patience with her volatile partner than she used to have.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.

The NSW koala wars showed one thing: the Nationals appear ill-equipped to help rural Australia



JoelCarrett/AAP

Tanya M Howard, University of New England

This morning, NSW Nationals leader John Barilaro capitulated on a threat to tear apart the state government over new koala protections. For now, the government remains intact. However the Nats’ campaign to loosen environmental protections that affect farmers will continue to destabilise the Coalition in the longer term.

The dramatic events of the past 24 hours have cast doubt on whether such a blustering, short-sighted political party has what it takes to lead rural Australia. The NSW Nationals have been entrusted with seven ministerial portfolios – from agriculture to trade and early childhood. But they were willing to throw it away over the fine print of a single planning policy.

There’s no doubt many people in the bush, including farmers, are doing it tough. And many farmers feel environmental protections are hurting their livelihood.

But it’s in everyone’s interests – including farmers’ – to ensure our environment stays healthy. And the extreme summer bushfires shone new light on how close we are to losing vulnerable species such as koalas. It’s hard to understand what the National Party thought it had to gain from this damaging display of brinkmanship.

A koala in a tree
The Nationals objected to changes to koala protections that curtail their land management.
Joel Carrett/AAP

A long history of tension

Nationals MPs had been demanding the government change a state environmental planning policy that aims to make it easier to identify and protect koala habitat. The policy changed the way koala habitat is identified by increasing the number of protected tree species from ten to 65.

Barilaro branded the change a “land lockup policy”. He described the number of protected tree species as “excessive” and said farmers would be forced to conduct time-consuming and expensive surveys before any new development or farming on their land.




Read more:
Farmers, murder and the media: getting to the bottom of the city-country divide


NSW Liberal Planning Minister Rob Stokes rejected Barilaro’s claims that farmers can’t build a feed shed or a driveway without a koala study, and that noxious weeds are listed as core koala habitat.

Development pressures on the NSW north coast have likely fuelled this latest stoush. There, a move to different, more lucrative crops such as blueberries and the demand by “sea-changers” for residential real estate is prompting agricultural land to be sub-divided and sold. The new koala rules might slow this down.

Murdered compliance officer Glen Turner.
Supplied by family

Land clearing policy has always been a flashpoint for conflict in regional and rural NSW. Tensions tragically came to a head in 2014 when environment compliance officer Glen Turner was murdered by a disgruntled landholder found guilty of breaking native vegetation laws. In the days afterwards, rural politicians said Turner’s death was “brought about by bad legislation” on land clearing.

Since then the NSW government has relaxed native vegetation laws. As a result, land clearing in the state has risen almost 60%, according to government data.

And in August last year the government announced it would no longer investigate or prosecute those who cleared land illegally under the old laws.

A chain used for land clearing is dragged over a pile of burning wood on a rural property.
Dan Peled/AAP

The city-bush divide

The issue of environmental protection plays into a historical city-country divide that has long been an easy wedge for rural politicians.

This tension came to the fore over the koalas issue. Clarence MP Chris Gulaptis said this week:

I was elected to Parliament to represent my community and I get really annoyed when city-centric people preach to us, especially when people in Sydney have done nothing for their koalas.

But it’s worth remembering northwest NSW has some of the highest land clearing rates in the world. It has been identified as a deforestation hotspot, on par with Brazil and the palm oil plantations of Indonesia.

And environmental degradation is not just a concern for city people. Biodiversity underpins our agricultural systems; insects, birds and soil microbes all contribute to food security and regional prosperity.

Separately and just as importantly, in all this talk of what regional communities want, the National Party is virtually silent on the views of Indigenous Australians.

A tractor plowing a field.
Biodiversity underpins farming systems.
Shutterstock

Farmers have bigger problems than koalas

Barilaro and his MPs suggested the amendment was the final “nail in the coffin” of rural and regional Australia. But the fact is, the rapidly dwindling NSW koala population already has one foot in the grave.

A recent NSW inquiry predicted the extinction of the species by 2050 unless protections and rehabilitation efforts were radically ramped up. And a World Wildlife Fund report this week found a 71% decline in koala numbers across bushfire-affected areas of northern NSW.

Koala protections are far from being the biggest threats to rural prosperity. Escalating tensions with China have led to recent bans on barley and beef. The rural community has been hit hard by the extreme drought, and there is growing discontent with the mismanagement of water in the Murray Darling Basin.




Read more:
Australia’s farmers want more climate action – and they’re starting in their own (huge) backyards


What’s more, recent expansion of gas exploration and development in the state’s northwest has left locals worried about water contamination and over-extraction.

There is no doubt life in regional and rural Australia is different to the life lived in the city. In some areas there are poor internet connections, worse roads and great distances to travel for basic health services.

But these problems, like land clearing, are complex. And it seems the NSW Nationals are ill-equipped to deal with these challenges. This week’s display suggests the party only deals in wedge politics and blunt solutions – and with that approach, we all stand to lose.The Conversation

Tanya M Howard, Senior Research Fellow, University of New England

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

Morrison is right. All governments will need to spend more to get us out of the crisis



ixpert/Shutterstock

Danielle Wood, Grattan Institute and Tom Crowley, Grattan Institute

The prime minister wants the states to open their wallets. Although he has warned them not to “make whoopee”, his message is blunt: “The Commonwealth cannot do all the fiscal heavy lifting on its own”.

The Reserve Bank governor is more circumspect, but also says the states have an “important” role in the fiscal response to the COVID recession and “can do more over time”.

Have the states been slacking off? At first glance, it appears so. The Commonwealth’s stimulus contribution so far is more than A$170 billion, compared to less than A$30 billion from all of the state and territory governments.

To date, it’s the Feds more than the states

The Commonwealth has spent almost 9% of national output on stimulus, whereas no state except Tasmania has spent more than 2% of its own output.

The two biggest states, NSW and Victoria, have each spent little more than 1%.

But these measures tell only part of the story. The Commonwealth has greater spending power because it has more revenue to draw from, and the states get about half their revenue from the Commonwealth.



Source: Grattan analysis of government announcements

These disparities account for some of the unbalanced effort, but not all of it.

Excluding what it passes on to the states, the Commonwealth’s revenue as a share of gross domestic product is about twice that of most states as a share of gross state product.

Yet its COVID response has been almost six times as big.




Read more:
The big stimulus spending has just begun. Here’s how to get it right, quickly


Although the Commonwealth is the main funder for several of the traditional stimulus levers – including the welfare and personal income tax systems – the states also spend money in areas that can be used to stimulate the economy.

The most important include social housing, health, education, and industry support.


Notes: Commonwealth Budget (Budget Paper 1, Table 3, p5-7) does not specify funding for Environment, so this is included in other. ‘Economic Support’ for the Commonwealth includes spending on Fuel and energy; Agriculture, forestry and fishing; Mining,
manufacturing and construction; and Other economic affairs. Commonwealth figures include transfers to the states.

Source: 2019-20 Budget papers


There’s also plenty of “room to move” on state government balance sheets – all six states entered this crisis with net debt below 15% of gross state product and with interest and depreciation costs less than 2% of gross state product. All were projecting operating surpluses.

Their borrowing costs, though higher than the Commonwealth’s, are still exceptionally low.

NSW and Victoria can borrow for 10 years at an interest rate just over 1%, far below the Reserve Bank’s inflation target band, making the money free in real terms.

More is needed from both

All of this suggests our states can and should do more to support the recovery.

But the Commonwealth will also need to do more. Like the states, it has room to spend more, and it should.

The Reserve Bank expects unemployment to peak at 10% in the December quarter and still be as high as 7% in December 2022.

That’s too high for too long.




Read more:
Cutting unemployment will require an extra $70 to $90 billion in stimulus. Here’s why


To avoid this scenario, the Grattan Institute recommended in June that governments of both kinds plan for $70-to-$90 billion in extra stimulus over the next two years to bring unemployment down to 5% and get wages growing again.

The renewed economic fallout from State 4 restrictions in Melbourne means that the response will now need to be even larger.

There are many things governments can do beyond the extensions of JobKeeper and JobSeeker already announced.

A banquet of options

The Commonwealth could introduce a wage subsidy for new employees beyond March. And it should boost the childcare subsidy to help parents who have lost jobs or hours during the downturn to re-enter work.

It could also amplify state investments in infrastructure and services that create jobs and serve social needs: social housing and mental health services are obvious candidates. The tutoring program to help disadvantaged students that Grattan proposed in June also fits this bill.

Well-targeted personal income tax cuts or better, a tax bonus, targeted at low and middle income earners, can also help boost demand, including in worst-hit sectors such as hospitality, tourism, and the arts.




Read more:
No snapback: Reserve Bank no longer confident of quick bounce out of recession


But tax cuts generally don’t provide as much economic kicker as others forms of government stimulus because more of the money “leaks” to savings.

Announcing a permanent boost to JobSeeker beyond December would put money in the hands of those most likely to spend it.

Other ideas such as a temporary GST holiday or electronic vouchers to spend in certain sectors – an idea being adopted in Britain – have the advantage of being temporary and targeted.

There is a banquet of worthwhile options governments should be considering – and they shouldn’t fight over who picks up the tab.

If governments of both kinds don’t do more, the recession will last longer.

Maybe it wouldn’t hurt to make a little whoopee. The downside of doing too little way exceeds the potential downside of doing too much.The Conversation

Danielle Wood, Chief executive officer, Grattan Institute and Tom Crowley, Associate, Grattan Institute

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

Morrison government secures two possible vaccine supplies with agreements worth $1.7 billion


Michelle Grattan, University of Canberra

The federal government has nailed down two possible vaccine sources with supply and production agreements with pharmaceutical companies worth $1.7 billion.

The agreements mean the University of Oxford/AstraZeneca and the University of Queensland/CSL would provide more than 84.8 million vaccine doses, almost entirely manufactured in Melbourne.

The success of either vaccine still has to be demonstrated, but trials are encouraging.

If all goes well, there would be access to 3.8 million doses of the University of Oxford vaccine in January and February.




Read more:
The Oxford deal is welcome, but remember the vaccine hasn’t been proven to work yet


The government promises a vaccine would be made available free.

Earlier it announced it had signed a letter of intent for the Oxford vaccine.

Scott Morrison said there were “no guarantees” these vaccines would prove successful. “However the agreement puts Australia at the top of the queue, if our medical experts give the vaccines the green light.”

“By securing the production and supply agreements, Australians will be among the first in the world to receive a safe and effective vaccine, should it pass late stage testing,” he said.

The government is also exploring other promising vaccines which are being developed and it may invest further.

If successful, the Oxford vaccines would be available from the start of next year, and the UQ ones from mid year. There would be 33.8 million doses of the Oxford vaccine and 51 million of the UQ one.

More than 95% of doses would be manufactured in Australia.

Each person would have a dose of one vaccine followed by a second dose of the same one within a few weeks. First to get the vaccine would be people most at risk of COVID and health workers.

The government said the agreements it had secured allowed for more orders to be negotiated and for doses to be donated or on-sold, without mark-ups, to other countries or international organisations. Morrison has stressed Australia wants to help Pacific countries and other regional neighbours get early access.

Late stage phase 3 trials are underway for the Oxford vaccine. Phase 1 clinical trials for the UQ vaccine began in mid-July in Brisbane. If this is successful, CSL will take responsibility for the Phase 2b/3 clinical trial, expected to begin late this year.

The government would run a strong campaign to encourage people to be vaccinated, but this would not be compulsory.




Read more:
Grattan on Friday: Scott Morrison hypes vaccine hopes but there is a long road ahead


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: Daniel Andrews frustrates Scott Morrison with a slow-pace lockdown exit



Erik Anderson/AAP

Michelle Grattan, University of Canberra

Victoria’s ultra-cautious roadmap out of its lockdown, outlined by Premier Daniel Andrews on Sunday, reinforced the strong message that came from Friday’s national cabinet.

Premiers are in the driving seat of exiting COVID restrictions, and they are imposing the strictest speed limits – much slower than Prime Minister Scott Morrison would like – and ignoring federal government pressure.

Western Australia’s Mark McGowan defied Morrison’s plan on Friday. Queensland’s Annastacia Palaszczuk made it clear she won’t open her state’s border with New South Wales until she’s good and ready.

Now, unsurprisingly, Andrews has indicated he will not be hurried, despite the cries from business and the sound of Canberra’s grinding teeth.

Andrews stressed his timetable “is not what many people want to hear – but it is the only option”. He warned “you can’t run” out of lockdown – or there would be a third wave.

The Morrison government doesn’t think it is the only option, and didn’t mince words in a statement quickly issued from the PM, Treasurer Josh Frydenberg and Health Minister Greg Hunt (the latter two are Victorians).

“To extend lockdown arrangements will be hard and crushing news for the people of Victoria,” they said.




Read more:
‘Slow and steady’ exit from lockdown as Victorian government sets sights on ‘COVID-normal’ Christmas


Just in case anyone doubted where to sheet blame, this was “a further reminder of the impact and costs that result from not being able to contain the outbreaks of COVID 19”.

The statement stressed the roadmap was “a Victorian government plan”, distancing the feds from any ownership.

A woman walks wearing a mask.
Dan Andrews has charted a slow course out of lockdowns for Victoria.
AP

The tone was very different from Morrison’s words to Parliament last Tuesday, when he said “Victoria has turned the corner and we, together with the Victorian government, are planning to reopen Melbourne and reopen Victoria”.

Sunday’s federal statement declared “the proposed roadmap will come at a further economic cost.”

“While this needs to be weighed up against mitigating the risk of further community outbreak, it is also true that the continued restrictions will have further impact on the Victorian and national economy, in further job losses and loss of livelihoods, as well as impacting on mental health.”

The federal government will talk to business in Victoria “to understand their concerns and seek to ensure they are addressed”.




Read more:
Victoria’s path out of COVID-19 lockdown – quick reference guides


Morrison and his ministers also had fresh praise for the NSW government, which has its economy running despite continuing low levels of cases. They highlighted the Berejiklian government’s successful contact tracing.

Federal help is being offered to strengthen Victorian contact tracing, in the (probably vain) hope that could put the Victorian foot on the accelerator.

Andrews has used elaborate modelling in reaching his strategy. But his critics argue the benchmarks, particularly at the back end of the timetable, are unrealistic.

For example, the last step in Melbourne’s easing, dated from November 23, is contingent on “no new cases for 14 days (state-wide)”.

It was quickly pointed out if the Andrews’ road map were in place in NSW, that state would have a curfew now.

An empty Melbourne street at night.
Businesses want Victoria’s restrictions to be lifted more quickly.
AP

NSW’s tally announced on Sunday was 10 new cases to 8pm Saturday. The Melbourne curfew is to be lifted from October 26 if there is a statewide daily average over the previous fortnight of less than five new cases and a statewide total of less than five cases with unknown sources over that period.

For the immediate future, in Melbourne there will be an additional fortnight – beyond next weekend – of the hard lockdown, with some minimal tweaking.

The overnight curfew will start an hour later (at 9pm), exercise can be up to two hours, and singles will be able to form a bubble with someone else.

From September 28, if the cases have come down (latest tally on Sunday was 63) to 30-50 daily average in metro-Melbourne over the previous fortnight, there will be gradual relaxations including the re-opening of childcare. The state government says step two would see about 100,000 people return to work across a number of sectors, including construction and manufacturing.

But Melbourne businesses in retail and hospitality will not be able to start to getting back to reasonable activity until the end of October, and hospitality will be strictly limited.

The restrictions in regional Victoria will be eased from their already lighter base.

Business is up in arms. The Australian Industry Group predicted “catastrophic economic, health and social damage caused by the continued lockdown and [the] prospect of more months of sharply diminished activity”.

Frydenberg said a week ago that on Treasury estimates, in the December and March quarters more Victorians were expected to be on JobKeeper than in every other state combined. The calculations didn’t assume any extension of the lockdown. The roadmap could see the numbers even higher than anticipated.

The Andrews timetable will put pressure on the Victorian government but also on Morrison.

Scott Morrison and Josh Frydenberg in Parliament with masks
The Victoria situation will put pressure on Prime Minister Scott Morrison.
AP

Andrews’ hard line is stretching the tolerance of Victorians. Not only will many local businesses believe they can’t survive the longer restrictions, but some voters will be reaching levels of deep stress.

The pressure points on the federal government come from various directions.

There have been calls for it to just “do something”, to intervene to override what are being seen as recalcitrant states. However it is not obvious it would have viable power to do so.

Even if it could intervene, it would be high risk – on health, economic and political grounds.

The extended Victorian lockdown will increase demands for the government to provide more stimulus for the economy, and bolster the calls of those who say JobKeeper and the Coronavirus supplement should not be phased down.

The Victorian roadmap won’t just feed into the budget numbers, but it will affect the public climate in which the October budget is brought down.

In that budget, the government will be talking up hope. But on October 6, Victorians hearing the budget will be still under curfew, confined to takeaways, unable to see extended family.

“I want all of us to stay the course so that we can all have something approaching a normal Christmas,” Andrews said on Sunday. It will require quite a feat to deliver that, on the terms of this strict roadmap.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.

Scott Morrison is dreaming of an open Australia for Christmas


Michelle Grattan, University of Canberra

Scott Morrison wants a commitment from national cabinet for Australia to return to as much normality as possible for Christmas, provided the medical advice supports it.

As the Prime Minister continues his push to prise open the borders of what he sees as recalcitrant states, he is mixing strong pressure – as on Friday when he demanded an explanation from Queensland over a NSW health case – with a more light-touch appeal for co-operation.

Morrison told Tuesday’s Coalition party room a definition of a COVID “hotspot” would go before Friday’s meeting of the national cabinet.

But he conceded whether states agreed with it would be “a matter for them”.

At the last meeting of the national cabinet its health advisers in the Australian Health Protection Principal Committee were asked to come up with a definition.

Morrison wants states with few or no cases to have open borders; hotspot outbreaks would be isolated locally. The federal government has had run-ins particularly with Queensland and Western Australia over their tight borders.

After saying in the party room “we are dealers in hope”, Morrison told parliament “by Christmas … we should aim for Australians to be able to go to work, to be able to be with their family at Christmas, and to return to visit their friends, and to look forward to a positive 2021.

“We cannot resign Australia to being a dislocated nation under COVID-19.

“That is what our plan is – to work together with the states and territories, to reactivate the plan that we first set out in May, and made great progress towards.

“There are borders that are in place now. And that is understandable. But what we have to work to do is to let Australians know that, by Christmas … they will be able to come together as families and look to a 2021 … that doesn’t look like the difficulties that they’ve gone through in 2020.

That is what [the government is] committed to doing. And we are committed to doing it with everyone in this country, every government in this country, who will come together behind that ambition.”

He said he had had discussions on Monday night with the premiers of Victoria and NSW, Daniel Andrews and Gladys Berejiklian, who were committed to seeing the NSW-Victorian border reopened as soon as it was safe to do so. “I welcome that cooperation from the New South Wales and Victorian governments.”

Morrison’s tone about Victoria was in sharp contrast to the Sunday-Monday attacks on Andrews by Treasurer Josh Frydenberg. The federal government has wound back its anti-Andrews rhetoric now the premier has promised to produce on Sunday a roadmap for the state’s reopening.

Morrison said Victoria had “turned the corner”.

The Victorian numbers continue to improve with the latest tally 70 new cases.

The federal government believes NSW and Victoria will probably be the most likely to agree to the hotspot scheme at national cabinet.

Andrews told reporters borders were “a central feature” of the Monday night conversation.

“The greatest contribution we can make to get borders open across the country is to continue to drive these [Victorian] numbers down as low as we can,” Andrews said. But it was important not to open up too much too soon, lest by Christmas “instead of a long-term, stable and safe COVID normal”, there would be another lockdown. “We have to avoid that.”

Berejiklian on Tuesday announced a travel bubble to ease inconvenience on the NSW-Victorian border – a single border region will be reinstated extending 50 kilometres on either side.

Meanwhile the extension until the end of March of JobKeeper – which will be scaled down – went through parliament.

Ahead of Wednesday’s national accounts showing the economy falling into a deep trough, Reserve Bank Governor Philip Lowe said on Tuesday the economic picture was not as bad as earlier expected.

“The economy is going through a very difficult period and is experiencing the biggest contraction since the 1930s. As difficult as this is, the downturn is not as severe as earlier expected and a recovery is now under way in most of Australia,” Lowe said.

“This recovery is, however, likely to be both uneven and bumpy, with the coronavirus outbreak in Victoria having a major effect on the Victorian economy.”

Labor continued its parliamentary attack on the government over aged care. But an attempt to bring on a censure motion against the Aged Care Minister Richard Colbeck in the Senate failed.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.