After all the talk, what is the Turnbull government actually doing for small business?


Martie-Louise Verreynne, The University of Queensland and Thea Voogt, The University of Queensland

Treasurer Scott Morrison continues to warn about the decline of Australia’s global competitiveness if the centrepiece of the 2016–17 federal budget – a company tax rate cut – is not passed.

However, such tax cuts are not necessarily the best approach for the government to support small business. They need other – more immediate – forms of support, our research shows.

What’s being proposed?

The 2016-17 budget reflected the Turnbull government’s catchphrase of “jobs and growth”. From a small-business perspective, the budget wanted to:

… boost new investment, create and support jobs and increase real wages, starting with tax cuts for small and medium-sized enterprises, that will permanently increase the size of the economy by just over 1% in the long term.

In 2014, Australia had the fifth-highest company tax rate among OECD countries, albeit average in the Asia-Pacific region. Local investors benefit from lower taxes on dividends through Australia’s dividend imputation system, which passes credits onto them for corporate taxes already paid.

The Abbott government later succeeded in lowering the tax rate for small businesses with a turnover of less than A$2 million from 30% to 28.5%. The Turnbull government’s plan would eventually reduce the rate for all companies to 25% by 2026-27. It’s a phased implementation over the next ten years, starting with an immediate cut for small companies to 27.5%.

However, 70% of small businesses are unincorporated. This means their owners add profits to their personal income for tax purposes. While the government has promised an increase in their tax offset percentage, it plans to retain the cap of A$1,000.

All small businesses will benefit from the simplification of tax rules for stock, GST and depreciation. But the government’s plan introduces three levels of concessions for small businesses. This complicates the definition of what these small businesses are.

Definition disputes

Defining small business goes beyond an academic debate.

With little consensus on typical turnover numbers – these range from A$2 million to A$25 million – a better indicator could be the Australian Bureau of Statistics definition of small businesses as those with fewer than 20 employees. And 97% of the 2.1 million businesses trading in Australia fit this definition.

It is risky, though, to simplify the definition into one blunt instrument that ignores differences in industry, life cycle and high-volume versus high-worth sales. A more nuanced approach is needed to ensure relief for the businesses that need it most.

However, the major political parties seemingly remain focused on turnover as a measure of what is and isn’t a small business. The government’s plan extends the upper limit for the turnover of small businesses to A$10 million by 2016–17, which covers some of the 3% of Australia’s non-small businesses.

Meanwhile, Labor has argued for immediate support for tax cuts to small businesses with a turnover of less than A$2 million.

Lifting the turnover threshold for all small businesses from A$2 million to A$10 million in the short term will increase the number of businesses that can access some tax concessions by 90,000. And it may improve economic growth as larger firms receive some relief.

What small businesses actually need

Small businesses need immediate and certain tax relief in the short term. They struggle with an uncertain business environment.

But, in the longer term, our research shows increased competition, a lack of market demand and red tape are but a few of the issues small businesses deal with. They highlighted statutory and regulatory compliance, as well as tax planning and compliance, as major issues for them.

More than tax rates, complex tax requirements and regulations are issues causing small businesses substantial distress. The Australian Tax Office’s research supports this: more than 70% of surveyed clients viewed their tax affairs as complex. And the World Bank’s ease of doing business index ranks Australia 25th in terms of ease of paying taxes.

The immediate tax relief for small businesses is tied up in proposed legislation surrounding the government’s ten-year tax plan, which is unlikely to find enough support to pass the parliament in its current form. The uncertainty and complexity that have ensued from the political conflict over tax have negative effects on the small business landscape.

Innovation is likely to suffer under such uncertain conditions. The government’s plan recognises that:

Small businesses are the home of Australian enterprise and opportunity and they are where many big ideas begin.

In addition to ideas and passion, small businesses need resource availability, appropriate capabilities and market access to innovate. The plan proposes measures that satisfy some of these criteria, but more focus on finding ways to minimise bureaucracy to provide time to focus on innovation is needed.

The role of government is undeniable in such initiatives. Even if one argues that tax relief is a temporary reprieve, this cash injection can jump-start small business innovation and growth.

Should the two major parties fail to find common ground on the government’s company tax cut, the stalemate will continue – and leave small businesses in the lurch.

The Conversation

Martie-Louise Verreynne, Associate Professor in Innovation, The University of Queensland and Thea Voogt, Lecturer in Tax Law, The University of Queensland

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

WA state election: Liberals’ deal with One Nation may come back to bite them


Narelle Miragliotta, Monash University

Elections are colourful affairs, and the March 11 state election in Western Australia is no exception. What is bringing particular clamour to this election is the resurgence of One Nation.

Pauline Hanson’s party has certainly made its presence felt. The party is contesting 35 of the state’s 59 Legislative Assembly seats, and fielding 17 candidates across the six upper house regions. According to the polls, it is also the third-largest party in electoral terms. The most recent Newspoll has One Nation’s primary vote at 13%, well ahead of the Nationals (5%) and the Greens (9%).

It is little wonder, then, that the Liberals finally ended speculation by announcing a preference deal with One Nation. The Liberals will direct preferences to One Nation upper house candidates in regional seats. In exchange, One Nation will direct lower house preferences to Liberal candidates ahead of Labor candidates.

While the Liberals’ preference deal with One Nation is the first of its kind since John Howard took the decision as prime minister to place One Nation last on the Liberal how-to-vote card at the 2001 federal election, it is not likely to be the last. Over the past six months or so, the Liberals’ anti-One Nation resolve has been fraying.

In spite of catastrophising in some quarters, the preference deal is important for the Liberal-led government’s chances of re-election. The party’s first preference vote is at 30% and its two party preferred vote is 46%. ABC election analyst Antony Green estimates that “a swing of between 2.2% and 10% against the Liberals would produce a minority government”. In the face of a resurgent Labor Party, such a swing is possible.

The Liberals’ partners in government, the WA Nationals, are the most grievously affected by this deal. Some commentators estimate it could cost them their five upper house seats.

But the Nationals can hardly be surprised by the Liberals’ decision. Although the relationship between the two parties is often civilised, it also has a long history of strife.

In recent years, tensions between the parties were re-ignited when, prior to the 2008 WA election, the Nationals declared they would not be seeking a coalition but a partnership with the Liberals.

The Nationals leveraged the fact that neither major party had attained a parliamentary majority to negotiate a deal that provided for 25% of all state royalty payments to be set aside for re-investment into a royalties for the regions program. While the Nationals eventually agreed to support the Liberals, there was no doubt that the Nationals were seriously entertaining the prospects of doing a parliamentary deal with Labor.

A more traditional coalition arrangement was resumed following the 2013 state election, but the relationship between the two parties showed signs of strain by August 2016. The return of Brendan Grylls – the architect of the 2008 parliamentary agreement – to the Nationals’ leadership, and the unpopularity of the Barnett government, marked the return of a more assertive Nationals party.

Under Grylls’ leadership, the Nationals have been less than willing to commit to a new alliance with the Liberals. Grylls has indicated that support for any minority government would be contingent on the Liberals agreeing to support an increase in the lease rental fee on BHP and Rio Tinto from 25c to $5 a tonne on Pilbara iron ore production. The Liberals oppose this.

Consequences of the deal for the Liberals

The preference agreement carries some risk for the Liberals.

It is not entirely clear whether One Nation preferences will flow in a manner consistent with the party’s how-to-vote card. In part this is a question of whether One Nation has the infrastructure to deliver on the agreement.

A successful how-to-vote card strategy requires a party presence at polling booths on election day. The major parties struggle to cover all of their polling booths, so One Nation is likely to struggle too.

There is also a question mark over whether One Nation supporters will actually follow the party’s how-to-vote card recommendations, even if given one.

If the party’s voter base is anything like some of One Nation’s candidates, there is no reason to think that the preference deal will be widely supported. Already one of the party’s highest-profile candidates, Margaret Dodds, has rejected the deal on the basis of policy differences with the Liberals and concerns about the lack of consultation over the agreement.

Even if a significant proportion of One Nation preferences help to secure the Liberals’ return to government, the deal will cost the Liberals when the incoming upper house members take their seats in May.

While lower house preference deals are difficult for parties to impose on their supporters, there is greater certainty on preference flows for the upper house. Proportional representation, combined with above-the-line voting, makes it highly likely that most of the Liberal surplus preferences will find their way to One Nation’s upper house candidates.

This greatly increases One Nation’s prospects of holding the balance of power in the Legislative Council. Should this happen, the Liberals’ plans to partially privatise the state’s electricity utility in order to pay down soaring debt will not be realised. One Nation is staunchly opposed to the privatisation.

So while the Liberals’ decision is “pragmatic and sensible” in the short term, it might seriously compromise the party’s legislative agenda should it be returned to office.

The Conversation

Narelle Miragliotta, Senior Lecturer in Australian Politics, Monash University

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

One Nation has now been ‘normalised’ in the Liberals’ firmament of political players


Michelle Grattan, University of Canberra

The decision by the Western Australian Liberals to do a preference deal with One Nation will bring some ripples for Malcolm Turnbull.

The WA Liberals have their backs against the wall – for them it’s a matter of the Barnett government desperately trying to survive against the Labor tide.

The embattled premier, Colin Barnett, said the move was “unusual, but it is a practical, pragmatic decision by the Liberal Party, because what we’re out to do is to retain government”.

And as Liberal senator Linda Reynolds told Sky: “One Nation has got a lot of support here in Western Australia”.

But inevitably, not just because of One Nation’s policies but because of the history of the Liberals’ attitude to the controversial party, the WA embrace will be challenging for Turnbull to handle. When he campaigns in the state poll, he’ll have to deal with questions about it.

The deal harms the WA Nationals who, though a different beast to their eastern cousins, and in an alliance rather than a coalition with the state Liberals, are nevertheless definitely part of the Nationals’ “family”.

Under the deal, as reported by the WA Sunday Times, the Liberals would preference One Nation above the Nationals in the upper house regional seats, in return for One Nation preferencing against Labor in the lower house. This could cost the Nationals seats and help One Nation to win the balance of power in the upper house.

Deputy Prime Minister and Nationals leader Barnaby Joyce observed cryptically on Sunday that: “Always as times grow cold … new friends are silver but old friends are gold”. It’s a fair bet it won’t be his last word on the subject. In response to earlier talk of the plan he predicted it would bring “another blue in WA”.

The WA deal will only be the start of the story. In Queensland the latest Galaxy poll has One Nation on 23% at state level, with an election likely later this year.

Federally, the Liberals are running the line that Hanson and her party are different these days.

Cabinet minister Arthur Sinodinos told the ABC on Sunday: “They are a lot more sophisticated; they have clearly resonated with a lot of people. Our job is to treat them as any other party.

“That doesn’t mean we have to agree with their policies. When it comes to preferencing, we have to make decisions – in this case a state decision, not a federal decision – based on the local circumstances.”

Compare the tone to Turnbull’s attitude before the federal election when he was asked whether he’d agree Pauline Hanson was a “known quantity in Australian politics” and “can you rule out negotiating or horse-trading with her”.

“Pauline Hanson is, as far as we are concerned, not a welcome presence on the Australian political scene. You’ve got to remember she was chucked out of the Liberal Party,” he said.

As soon as Hanson arrived in parliament with her Senate team Turnbull changed his tune. They had talks. Hanson was chuffed. When Turnbull was recently asked about the mooted WA preference deal he dodged the questioning but did note that federally: “We respect every single member and senator”.

One also has to remember that thanks to Turnbull running a double dissolution, Hanson won four Senate seats and a significant slice of the upper house balance of power.

In an ordinary Senate election she would have ended up with just her own seat. Turnbull would argue the double dissolution has made it easier to get legislation through – even though it is a tortuous process that will bring its failures – but in terms of boosting Hanson’s clout and profile the cost has been significant.

Even if she had had only one Senate seat One Nation might have surged in WA and Queensland, but her federal weight has helped – regardless of the antics of her now ex-WA senator Rod Culleton, who has been tossed out of the parliament.

One Nation, because of its power, has now been “normalised” in the Liberals’ firmament of political players, something likely to stick in the craw of their more “small-l” supporters. The Liberals are afraid of the populist party, but the days of denouncing it holus-bolus are gone.

https://www.podbean.com/media/player/zf38q-677342?from=yiiadmin

https://www.podbean.com/media/player/zf38q-677342?from=yiiadmin

The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

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

Queensland Galaxy: One Nation surges to 23%<


Adrian Beaumont, University of Melbourne

A Queensland Galaxy poll has One Nation surging to 23%, up 7 points since early November. One Nation’s gains have come at the expense of both major parties, with the Liberal National Party (LNP) on 33% (down 4), Labor on 31% (down 4), and the Greens steady on 8%.

While Labor maintains a steady 51-49 two party lead, the high non-major party vote makes this result a guesstimate. No fieldwork dates or sample size are given, but this poll was presumably taken between Tuesday and Thursday with a sample of 800-1000.

Of the three established parties, the Greens have been least affected by One Nation’s rise, indicating that demographics that vote Green are the least likely to swing to One Nation.

At the 1998 Queensland state election, One Nation won 11 of the 89 seats on 22.7% of the vote. If their vote in this poll were replicated at the next election, due by early 2018, One Nation would probably win a similar number of seats, and be likely to hold the balance of power.

Despite One Nation’s surge, Premier Annastacia Palaszczuk’s ratings are still positive, with 41% approval (down 3) and 37% disapproval (down 2), for a net rating of +4. However, Opposition Leader Tim Nicholls’ ratings have slumped a net 8 points to -12.

Federally and in other states, One Nation’s polling has met or exceeded their previous peaks from 1998-2001. It is no surprise that Queensland, which had the highest One Nation vote in 1998, is better for them than other states.

Whether One Nation and similar international parties continue to surge probably depends on President Trump. As I wrote here, if Trump succeeds in revitalising the industrial midwest, far right parties are likely to thrive. On the other hand, if working class people eventually decide that Trump is opposed to their economic interests, far right parties will probably decline.

The Conversation

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

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

Turnbull’s rant about Shorten a treat for the troops but will it play with the public?


Michelle Grattan, University of Canberra

After Malcolm Turnbull called Bill Shorten a “social-climbing sycophant”, a “parasite”, and a “hypocrite” in parliament on Wednesday, Liberal Party director Tony Nutt tweeted a link, so people could watch Turnbull “tell the truth” about Shorten.

The Liberals obviously think Turnbull’s extraordinary harangue will go down well with Mr and Mrs Suburbia. Victorian senator James Paterson told 2GB it was “great to see a bit of steel from the PM, I think that’s exactly what the people want”.

Maybe. But it is equally possible ordinary people might see this as another example of just what they dislike about politics. Nutt has been around long enough to recall the experience of Paul Keating. Insiders loved his colourful tirades, insulting and demolishing opponents. But the voters came to hate them.

Turnbull went boots and all for the personal onslaught after Shorten attempted to move a motion against “Mr Harbourside Mansion”, claiming he was “attacking the standard of living of over a million Australian families” with an omnibus bill which includes big savings in social security as well as reform of the childcare system.

The speech was notable for its sheer quantity of sustained abuse.

“We have just heard from that great sycophant of billionaires, the leader of the opposition,” Turnbull said. “All the lectures, trying to run a politics of envy – when he was a regular dinner guest at Raheen, always there with Dick Pratt, sucking up to Dick Pratt. Did he knock back the Cristal [champagne]? I don’t think so.

“There was never a union leader in Melbourne that tucked his knees under more billionaire’s tables than the leader of the opposition. He lapped it up!

“He was such a sycophant, a social-climbing sycophant if ever there was one. There has never been a more sycophantic leader of the Labor Party than this one and he comes here and poses as a tribune of the people.

“Harbourside mansions – he’s yearning for one! He is yearning to get into Kirribilli House. You know why? Because somebody else pays for it.

“Just like he loved knocking back Dick Pratt’s Cristal, just as he looked forward to living in luxury at the expense of the taxpayer. This man is a parasite.

“He has no respect for the taxpayer. He has no respect for the taxpayer any more than he has respect for the members of the Australian Workers Union he betrayed again and again. He sold them out.”

Quoting Shorten’s words of some years ago that lowering company tax assisted job creation, Turnbull said: “I reckon he probably talked about that with Dick Pratt and Solly Lew and Lindsay Fox and all the other billionaires he liked sucking up to in Melbourne, on their corporate jets”.

“Or did he give them the blast, the good attack on the rich, down with anyone that has got a quid. … I don’t think so.

“No, I think he just sucked up to them … I think he says one thing here and another thing in the comfortable lounge rooms of Melbourne …

“No consistency, no integrity … This simpering sycophant. Blowing hard in the House of Representatives, sucking hard in the living rooms of Melbourne. What a hypocrite!”

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Turnbull has many faces but this is not the one most people would have expected when he overthrew that aggressive verbal boxer Tony Abbott. He stood for another political style.

So what’s made him flick the switch to nasty?

He’s been obviously stung by Shorten’s adoption of the “Mr Harbourside mansion” handle that Peta Credlin, Abbott’s former chief-of-staff, attached to him before the election. After Shorten again tossed the term out last week, he reacted angrily.

Also Turnbull must be seriously discombobulated by a dreadful start to the year, including this week’s bad Newspoll followed by the defection of Cory Bernardi to set up a conservative party.

Turnbull knows his followers are uneasy. Nothing like a red meat speech, delivered with his superior barrister’s skill, to provide them with a short-term adrenaline rush.

But closer to the interests of the average voters than Wednesday’s hyperbole around it will be the actual measures in the omnibus bill, which includes a reworking of certain earlier initiatives in an effort to massage them through the Senate. A lot of people stand to be affected, positively or negatively, by the content of this enormous bill.

The childcare reforms, designed to boost workforce participation, are as they were proposed previously. The government says the changes would give about 1 million families “relief from out-of-pocket child care cost pressures” and “encourage more than 230,000 families to increase their involvement in paid employment”.

Also in the bill are savings of more than A$5.5 billion, including changes to the family tax benefit (FTB) system and to paid parental leave provisions.

But the government has softened its proposals in both these areas, to accommodate crossbench senators.

Thus, while it still would phase out FTB end-of-year supplements, it would double to $20 the maximum fortnightly payment rates of FTB Part A. It has also abandoned its planned scaling back of FTB Part B for children between 13 and 16.

And it will increase from 18 to 20 the maximum number of weeks the government’s paid parental leave scheme provides.

The concessions will reduce the savings the government would originally have got by about $2.4 billion.

But as “cameos” flew from government and opposition about how individual families would be affected, Shorten said that “the prime minister is taking $2.7 billion from Australian families and yet he proposes giving $7.4 billion to big banks in tax giveaways”.

“We draw a line in the sand on this $2.7 billion cut to family payments. We are not buying it and the Australian people are not buying it,” he told parliament.

The omnibus legislation also includes other leftovers from past attempts to tighten social security, among them various pension-related savings and the four-week waiting period for unemployed young people seeking income support payments.

The government seems confident it has a set of measures it can “land” in parliament. But there will likely be more trade-offs required for that to happen, amid a good deal of noise from those who stand to lose.

The package will need better salesmanship than on Wednesday, when the mass of detail had it struggling to be understood – and then it was overshadowed by the Turnbull rant.

https://www.podbean.com/media/player/8vd69-67798f?from=yiiadmin

https://www.podbean.com/media/player/zf38q-677342?from=yiiadmin

The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

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

Bernardi should have resigned his Senate seat: here’s why


Narelle Miragliotta, Monash University

Senator Cory Bernardi’s decision to quit the Liberal Party comes as no surprise to most political observers. For quite some time, and certainly since Malcolm Turnbull’s elevation to the Liberal leadership, Bernardi’s resignation from the party was always a distinct possibility.

However, his decision to quit the party without resigning from the Senate has sparked (the inevitable) condemnation from his former party colleagues. While he might well be feeling “reluctant and relieved”, many Coalition MPs are savage about this decision.

The perils of ratting out the party

Parties have little mercy for those in their ranks who quit the party but continue to occupy their seat in parliament. Such persons are often decried as “deserters” or “rats”.

In this case, the displeasure with Bernardi runs even deeper. From the Liberal Party’s perspective, it believed it had gone to some lengths to accommodate some of the senator’s policy concerns. Yet the efforts to appease Bernardi ultimately proved insufficient to prevent him from tendering his resignation only seven months after the federal election that granted him a six-year Senate term.

On a more practical level, Bernardi’s resignation makes an already complex Senate even more so for the Turnbull government. Once the vacancies triggered by Rod Culleton and Bob Day are filled, Bernardi will be among a 21-strong cross bench. The Turnbull government’s numbers have been reduced to 29 senators, 10 votes short of the 39 it needs to transact most business in the chamber.

High-profile, senior Liberal Party ministers, such as George Brandis and Christopher Pyne, have argued that Bernardi should resign as senator to give rise to a casual vacancy. This would enable the party to select a replacement senator.

The problem for the Liberals is that Bernardi does not believe he is under any particular obligation to do this. For Bernardi, the decision to resign from the Liberal Party is a matter of principle, and therefore justified and imperative.

In constitutional terms, Bernardi is not obliged to quit the Senate just because he has resigned from the Liberal Party. The party can do little to force his hand, except to hope that he might eventually fall foul of the Constitution’s various eligibility requirements to serve in the federal parliament. This would be unlikely.

Should Bernardi resign on ethical grounds?

While there is no constitutional basis for Bernardi to resign from the chamber, there is a compelling ethical case for him to do so.

Before I outline my reasons, I must clarify the scope of my claim. First, the argument is not directed exclusively at Bernardi. This is an argument that should apply to any senator who quits his or her party, short of reasons of their party imploding, or being fired by the party.

Secondly, this argument is not one that I would extend to members of the House of Representatives who resign from their party. It is particular only to party defections when the member was elected in a seat through proportional representation.

My argument is essentially tied to two particular features of the Senate electoral system: the statewide basis of that system and group ticket voting. In combination, these elements greatly heighten the importance of the party label to the electoral success of major party candidates.

The statewide basis of the electoral system creates a geographical obstacle for all but a rarefied group of candidates to build a sufficiently strong personal mandate to secure a Senate quota. For this reason most independent candidates choose to contest lower house electorates rather than nominate for the Senate, where campaigning is conducted over a much wider, often more diverse electoral terrain.

Group ticket voting has further elevated the importance of the party label to the election of Senate candidates. Known colloquially as “above the line” voting, it allows parties to predetermine their preferred order of election of their candidates. While voters are permitted to vote for any candidate in any order that they wish, most do not. Only a very small proportion of voters cast their vote within the party list.

The combination of these features of the Senate electoral system means that most major party senators would struggle to make a convincing case that they were elected on the basis of personal appeal and support.

If we use Bernardi as the case in point, of the 345,767 votes cast for the South Australian Liberals at the 2016 election, he attracted just 2,043 of the first preference vote. Bernardi’s re-election had almost nothing to do with his personal vote and almost everything to do with the Liberal Party label and the favourable number two Senate spot that South Australian party officials awarded him on the party’s ticket.

Established parties can legitimately claim, therefore, that the single most decisive factor that accounts for the election of their senators is the power of the party label. For this reason, senators who quit their party under the current rules should feel compelled on ethical grounds to resign their vacancy, so that the democratic will of the party’s supporters is fulfilled.

The Conversation

Narelle Miragliotta, Senior Lecturer in Australian Politics, Monash University

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

Coalition slump in Newspoll gives Labor 54-46 lead


Adrian Beaumont, University of Melbourne

The first Newspoll of 2017 has Labor leading by 54-46, a 2 point gain for Labor since the final 2016 Newspoll, conducted in early December. Primary votes are 36% for Labor (steady), 35% for the Coalition (down 4), 10% for the Greens (steady) and a high 19% for all Others (up 4). It is Labor’s first primary vote Newspoll lead since Abbott was PM. This poll was conducted Thursday to Sunday from a sample of 1730.

We are told that One Nation had 8%, but this is not reported in the tables. Newspoll is still asking for voter choice between Coalition, Labor, Greens and Others, and then questioning Other voters further. In the past, this method has underestimated the support of significant minor parties, and One Nation is probably in at least the double digits.

Last Friday’s WA Newspoll, on the other hand, asked about One Nation support in the initial readout, finding 13% support for One Nation.

Turnbull’s satisfied rating was up one point to 33%, and his dissatisfied rating down one point to 54%, for a net approval of -21. Shorten’s net approval was -22, down 5 points.

An additional Newspoll question asked whether Australia should adopt a similar policy to the US in “making it harder” for those in 7 Muslim countries to immigrate, finding 44% in favour and 45% opposed. This question wording is somewhat deceptive, as Trump is not “making it harder”, he is outright banning.

In the months after Turnbull deposed Abbott, the Coalition had a large lead over Labor. As Turnbull’s policies became more right wing, the Coalition’s lead diminished, and they only barely won last year’s election. Since the election, Turnbull, at the urging of the hard right of his party, has abandoned positions that once made him appealing to mainstream voters. There is no evidence from the polling under either Turnbull or Abbott that Australians want a hard right government.

Essential at 53-47 to Labor

In this week’s Essential, primary votes were 37% Labor, 36% Coalition, 10% One Nation, 8% Greens and 3% Nick Xenophon Team. Voting intentions used a two-week sample of 1785, with other questions using one week’s sample.

49% disapproved of Trump’s immigrant ban, with 36% approving; the strongest support came from Other voters (mainly One Nation), who approved 66-25. When asked whether Australia should institute a similar ban to the US, 46% were opposed, and 41% in favour. 53% agreed with Turnbull’s response to the US ban, while 36% disagreed.

50% thought technological change was making people’s lives better, and 25% thought it was making people’s lives worse; in November 2015, it was 56-22 in favour of better.

Bernardi resigns from Liberals

Cory Bernardi has left the Liberals, and will form an Australian Conservative party. Bernardi was No. 2 on the Liberals’ SA Senate ticket, and thus received a six year term. His term will not expire until June 2022, barring a double dissolution.

Bernardi’s exit will not change the Senate situation much, as he will seldom vote with Labor against the Coalition. I do not expect Bernardi to perform well, as he does not have a high profile with the general public, and will be competing in much the same ideological space as One Nation.

Trump’s US ratings, and why impeachment is very unlikely

According to the Gallup daily tracking poll, 42% of Americans approve of Donald Trump’s performance as President, and 52% disapprove. Trump has made no effect to be bipartisan, and so those who voted against him disapprove, while the 46% who voted for him are satisfied with his performance.

Those who voted for Trump mostly did so because they approved of his efforts to shake up the system, including his 90-day ban on immigrants from seven Middle Eastern countries. Unless Trump does something that angers his support base, his ratings are likely to remain roughly where they are. Much will depend on whether Trump’s economic policies displease the white working class voters.

Impeachment of a President requires a majority of the House and a 2/3 majority of the Senate. The Republicans hold a 241-194 majority in the House, and a 52-48 Senate majority. Assuming all Democrats voted for impeachment, 24 House Republicans and 19 Republican Senators would need to vote for impeachment.

Most of Trump’s policies, such as anti-abortion measures and removing regulations on big business, are strongly supported by establishment Republicans. Trump’s Supreme Court nominee, Neil Gorsuch, satisfies the conservative base of his party. The Senate confirmed Trump’s controversial Secretary of State, Rex Tillerson, by a 56-43 margin, indicating that Republicans are in no mood to impeach Trump.

Impeachment is a drawn-out process where the Senate effectively tries the President with the Chief Justice of the Supreme Court presiding. Trump would rally his fervent supporters against any serious move to impeach him, putting pressure on Republicans that supported impeachment.

Midterm elections will be held in November 2018, and these give the Democrats a chance to take control of the House and Senate. However, the Democrats are defending 25 Senate seats in 2018, while Republicans defend just 8, so the Democrats appear likely to go backwards.

Section 4 of the 25th Amendment to the US Constitution allows a majority of the Cabinet and the Vice President to remove the President. If the President protests, a 2/3 majority in both the House and Senate is required to remove him. This runs into the same problem as impeachment: Republicans generally will not remove Trump, and his hand-picked Cabinet is even less likely to remove him.

If Trump does something so dreadful that even Republicans rush to impeach him, it may already be too late.

The Conversation

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

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

The tag is cut: how will the Trump-Turnbull spat damage the alliance?


Alan Tidwell, Georgetown University

When former prime minister Paul Keating said last year it was time to “cut the tag” and loosen the bonds of the Australia’s alliance with the US, who would have thought the man wielding the knife would be Donald Trump?

The public disagreement between the Trump White House and the Turnbull government over the deal to send asylum seekers languishing on Manus Island and Nauru to the US is unprecedented. At no previous time in the history of the Australia-US alliance have things seemed so dire – and got there so quickly.

Past tensions kept quiet

Australian and American leaders over the years have, from time to time, disagreed or said things to cause embarrassment. But for the most part, such disagreements have been kept out of the limelight.

John Howard and Bill Clinton did not like one another. Their discomfort did not, however, seriously affect the alliance. But sometimes discomfort breaks into something stronger.

Blanche D’Alpuget, Bob Hawke’s then-biographer (and later his wife), recounts that Australia’s former foreign minister, Bill Hayden, and US Secretary of State George Shultz loathed one another. Hayden referred to Shultz as “the German pork butcher”, while Shultz called Hayden “stupid” to his face.

But, unlike the current saga, the Hayden-Shultz spat did not become public until after D’Alpuget published her Hawke biography.

In 2008, the content of another phone conversation between Australian and US leaders became pubic. A brief row broke out when reports emerged of a leaked conversation between Kevin Rudd and George Bush.

As the 2008 financial crisis erupted, Rudd had suggested using the G20 as a way of handling things to Bush in a phone conversation. Bush allegedly replied:

What’s the G20?

The White House angrily rejected the public version of events.

Time to think differently

Members of the US Congress have made a rare intervention in the latest spat in an attempt to counter Trump’s amateurish handling of the issue. Speaker of the House Paul Ryan said:

Australia is a very important and central ally and it’s going to continue to be.

Republican senator Lindsey Graham admonished Trump, suggesting the president “sleep more and tweet less”. Representative Adam Schiff, the ranking Democrat on the House Intelligence Committee said:

Before the president shows such disrespect again, he should consider this: there is only one nation that has stood with us in every war of the last century, from the fields of France and Belgium to the mountains of Afghanistan – Australia.

Trump has handled this situation very badly. In a very short space of time he has undone decades of work in building trans-Pacific security ties between Australia and the US. Other American allies – Japan and South Korea in particular – must look on, aghast at what has transpired.

But the Australia-US alliance was already under pressure before the phone call between Trump and Malcolm Turnbull went awry. The Trans-Pacific Partnership (TPP), a vital element in the Obama pivot to Asia, was headed for the dustbin even before the US election. Within hours of being sworn in, Trump cancelled US involvement in the trade deal.

More ominously, other US security partnerships in the region exhibit severe strain. In an eerie and intemperate foreshadowing of Trump’s outburst, Philippine President Duterte in 2016 called Barack Obama a “son of a whore” and then denounced his country’s security alliance with the US and embraced the Chinese.

While many aspects of the US-Philippine relationship are still in place, it is nonetheless showing signs of strain.

The Australia-US relationship has suffered numerous knocks over the past year. The greatest threat to it has not come from China, the Philippines or Australia, but from the US. Trump’s misguided handling of the refugee issue and his withdrawal from the TPP has combined with external events to place real pressure on the alliance.

Trump has cut the tag. Now Australia must think differently about its relationship with the US.

The Conversation

Alan Tidwell, Director, Center for Australian, New Zealand and Pacific Studies, Georgetown University

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

Newspoll shows Coalition trailing 46-54% at start of new parliamentary session


Michelle Grattan, University of Canberra

With parliament resuming this week, the first Newspoll of 2017 has the government trailing Labor 46-54% on the two-party vote and the Coalition’s primary vote falling four points to 35%.

This is the seventh consecutive Newspoll with the ALP ahead and the worst for the Coalition under Malcolm Turnbull’s prime ministership.

In results that will send fresh tremors through Coalition members who had hoped to start the new year on a better footing, the government’s primary vote is seven points lower than at the election, which the government only just won. It last was this low when the first move was made against Tony Abbott’s leadership, two years ago.

The poll, published in Monday’s Australian, reflects the general trend of disillusioned voters looking for avenues to reflect their protests. It shows a surge in support for independents and minor parties, which have gone from 15% to 19%.

Pauline Hanson’s One Nation, soon to be tested at the Western Australian election, is polling 8% nationally.

Labor remains on 36% primary vote, unchanged since early December; the Greens remain on 10%.

Turnbull’s net satisfaction has marginally improved from minus 23 to minus 21, while Opposition Leader Bill Shorten’s has worsened, from minus 17 to minus 22. Turnbull leads Shorten as better prime minister – 42% (up one) to 30% (down two points).

The government, beset with an expense scandal and the loss of a minister, anger over pension changes and other problems, got no clear air over the summer break. Now parliament resumes amid the fallout from the Trump-Turnbull contretemps over the refugee deal, a push from some Liberal MPs to have same-sex marriage determined by a free vote in parliament, and the prospect of South Australian Liberal senator Cory Bernardi defecting to lead his own conservative party.

Even Turnbull’s own issue of choice for the start of the year – energy policy – is not going as well as he hoped because of a lack of enthusiasm from energy companies and the financial sector for his advocacy of new “clean coal” power stations to be constructed.

In an interview with Network Nine on Sunday, Turnbull repeated he had “stood up for Australia” in dealing with Donald Trump, and said Trump had “absolutely not” asked for anything in return for saying he would honour the Obama administration’s deal to take refugees from Nauru and Manus Island.

Asked about any future military request that might be made, Turnbull said: “We assess all requests for military assistance on their merits, and there is no linkage, no linkage at all, between an arrangement relating to refugee settlement and any other matters.”

Turnbull was again cautious about the telephone call in which Trump was very aggressive.

“I’ve only said three things about the phone call with the president: firstly that it was frank and forthright; secondly that he gave a commitment that he would honour the refugee resettlement deal entered into by President Obama and thirdly that he did not hang up. The call ended courteously.

“Now I’ve got nothing more to say about the content of the phone call than that. It’s very important for me to be disciplined, to be calm and to pursue – in a very focused way – Australia’s national interests, and that’s what I do as Australia’s prime minister.”

On same-sex marriage Turnbull slapped down the new push for a free vote. “I’ve got no doubt that all of these matters will be discussed in the party room but I’m the prime minister, the government’s position is that which we took to the election, which is that this issue should be determined by a vote of every Australian in a plebiscite.”

A serious renewal of the same-sex marriage debate within the Liberal Party would be dangerous for Turnbull because it is a signature battle for the conservatives.

Former prime minister Tony Abbott at the weekend cast it in terms of Turnbull keeping his word. He told Fairfax Media: “Malcolm Turnbull made a clear election commitment that the marriage law would only change by way of people’s plebiscite, not free vote of the parliament. I’m sure he’ll honour that commitment. This isn’t about same-sex marriage, it’s about keeping faith with the people.”

Cabinet minister Christopher Pyne said on Sunday that there was no bill before the parliament to address marriage equality at this stage. “What happens down the track is a matter for the prime minister, for the cabinet, for the party room.”

In the Nine interview Turnbull, who gave the Liberals A$1.75 million for the campaign, made the startling revelation that when Tony Nutt became Liberal federal director at the end of 2015, “the party had so little money he had to work for several months without pay”.

The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

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

Grattan on Friday: Malcolm Turnbull should walk away from the refugee deal


Michelle Grattan, University of Canberra

It’s the last thing Malcolm Turnbull would want to do, or will do. But what he should do is walk away from the deal he struck with the Obama administration for the US to take refugees from Nauru and Manus Island.

He should then persuade his cabinet to grant a one-off amnesty, and let these people settle in Australia.

It would be a drastic and, for many in the government, a deeply unpalatable course. But the road Turnbull now has Australia travelling – that of the supplicant – is against our national interest. It’s one that sees the unpredictable Donald Trump treating the US’s close ally with near contempt, one that makes the Australian prime minister hostage to the US president’s capricious behaviour.

At the weekend, in their now much-canvassed telephone conversation, Trump told Turnbull it was his “intention” to honour the refugee agreement while, as revealed by the Washington Post’s detailed report, describing it to Turnbull as the “worst deal ever”.

According to the Post, Trump said Australia was seeking to export the “next Boston bombers”; he also told Turnbull “this was the worst call by far” in his round of five phone calls to world leaders that day, which included one with Russia’s Vladimir Putin.

Trump terminated the conversation after 25 minutes – it was expected to run for longer – although Turnbull insists Trump did not hang up on him, but rather “the call ended courteously”.

By Thursday (Australian time), after days of mixed messages from the US administration, Trump was publicly dissing the deal in the strongest terms, tweeting:

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No-one can predict where this imbroglio will now go. As one senior Australian source put it: “We are like a cork bobbing on the sea”.

Logic would suggest that Trump would want to ditch “this dumb deal”, which sits at odds with his suspension of the US refugee intake and must look inconsistent to his rusted-on supporters. But equally, he could go the other way and decide there were pluses – in terms of sway over Australia – in keeping it.

If he does proceed with it, the deal could be scuttled in practice by the US “extreme vetting” process excluding most of the refugees. That would leave Australia, after having endured the diplomatic agony, still with responsibility for the people.

What is clear is that the deal has become a big and damaging issue in the Australian-American partnership.

Turnbull has already come under attack for refusing to criticise Trump’s provocative temporary bans on refugees (indefinite for those from Syria) and entrants from seven majority-Muslim countries, which have been widely condemned internationally. Even if he had other motives, his desire to preserve the refugee agreement was obviously one in Turnbull’s approach.

There could be serious longer-term implications if Trump did go ahead with the deal.

Trump is the ultimate transactional politician. If he does something for Australia, reciprocity will likely be demanded at a later stage – with Trump, whose approach is to bully, having no compunction in putting his foot on Australia’s neck. It could be over anything – such as a further commitment to the Middle East or an involvement if the US escalates pressure on China in the South China Sea.

If Turnbull had received a favour, it would be harder for Australia to resist US pressure to do what it might not want to do. Even if the government were comfortable on policy grounds to go along with some US request there would be the suspicion in the public’s mind that this was a quid pro quo.

Apart from those concerns, it is extremely unfortunate to have this issue, with the fractiousness surrounding it, dominate the start of the Turnbull government’s relationship with the new administration. Trump is known for his vindictiveness. If he keeps the deal but angrily and resentfully, that won’t stand Australia in good stead.

Early sourness could limit the extent to which Australia will be in a position to exert any influence on other matters that are of importance to it, such as trade policy – where there are substantial differences between the two countries – and, in particular, America’s future role in the Asia-Pacific region.

Regional countries will be watching closely how the Australian-US relationship unfolds; much of our clout with them derives from the perceived closeness we have with the Americans.

Critics will claim that if Australia cut its losses, dumped the deal and took in the refugees, all manner of disaster would follow.

In particular, they would say, the people-smugglers would start their trade again.

Turnbull on Thursday reiterated that “the only option that isn’t available” to the refugees “is bringing them to Australia for the obvious reasons that that would provide a signal to the people-smugglers to get back into business”.

Yet they didn’t restart their business when the US agreement was first announced, despite suggestions that this could send them an encouraging message.

The government fortified the border further, and the so-called ring of steel around our north would surely be enough to keep boats at bay if it had to take another step. If not, there is something very wrong with our military and coastguard forces.

Politically, there is no question the amnesty course would be extremely difficult for Turnbull, after all the government has said and done.

How difficult? Well, Labor could hardly score real hits against it.

Turnbull would have much more to fear from the conservative ranks in his own party and the right-wing commentariat – and he doesn’t have a lot of gumption when it comes to standing up to these people.

But it would be better to do so, even with the undoubted political risks that it would involve for him, than allow himself and Australia to be subject to the current and future whims of a US president who is raising a great deal of alarm in many places.

The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

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