View from The Hill: Malcolm Turnbull’s home truths on the NEG help Labor in the climate wars


Michelle Grattan, University of Canberra

An Easter weekend in an election campaign might be a bit of a challenge for a pair of leaders who were atheists. But fortunately for Scott Morrison and Bill Shorten, declared believers, it wasn’t a problem.

Both attended church services during the so-called campaign cease-fire that the main parties had proclaimed for two of the four days.

Morrison on Sunday was pictured in full voice with raised arm at his Horizon Pentacostal church in The Shire, where the media were invited in. On Friday he’d been at a Maronite Catholic service in Sydney.

Sunday morning saw Shorten at an Anglican service in Brisbane, his family including mother-in-law Quentin Bryce, former governor-general.

Neither leader was hiding his light under a bushel.

Church, chocolate and penalty rates

Sunday was an opportunity to wheel out the kids, chasing Easter eggs (Shorten) or on the Rock Star ride at Sydney’s Royal Easter Show (Morrison). This was campaigning when you’re not (exactly) campaigning.

The minor players weren’t into the pretend game. For them, the relative restraint on the part of the majors presented rare opportunity. Usually Centre Alliance senator Rex Patrick would have little chance of being the feature interview on the ABC’s Insiders.

But while Friday and Sunday were lay days for the major parties Saturday was not (and Monday won’t be either).

For Labor, Easter has meshed nicely with one of the key planks of its wages policy – restoration of penalty rate cuts by the Fair Work Commission. Even on Sunday, Shorten pointedly thanked “everyone who’s working this weekend”.

It was the start of Labor’s campaign focus turning from health to wages this week, when it will cast the election as a “referendum on wages”.

Turnbull resurrects the NEG

The weekend standout, however, was the intervention of Malcolm Turnbull, who launched a series of pointed tweets about the National Energy Guarantee (NEG).

Turnbull was set off by a reference from journalist David Speers to “Malcolm Turnbull’s NEG”.

“In fact the NEG had the support of the entire Cabinet, including and especially the current PM and Treasurer. It was approved by the Party Room on several occasions”, the former prime minister tweeted.



“It had the support of the business community and energy sector in a way that no previous energy policy had. However a right wing minority in the Party Room refused to accept the majority position and threatened to cross the floor and defeat their own government”.

“That is the only reason it has been abandoned by the Government. The consequence is no integration of energy and climate policy, uncertainty continues to discourage investment with the consequence, as I have often warned, of both higher emissions and higher electricity prices.”

He wasn’t finished.



“And before anyone suggests the previous tweet is some kind of revelation – all of the economic ministers, including myself, @ScottMorrisonMP, @JoshFrydenberg spent months arguing for the NEG on the basis that it would reduce electricity prices and enable us to lower our emissions.”

And then:

“I see the @australian has already described the tweets above as attacking the Coalition. That’s rubbish. I am simply stating the truth: the NEG was designed & demonstrated to reduce electricity prices. So dumping it means prices will be higher than if it had been retained. QED”

“The @australian claims I ‘dropped the NEG’. False. When it was clear a number of LNP MPs were going to cross the floor the Cabinet resolved to not present the Bill at that time but maintain the policy as @ScottMorrisonMP, @JoshFrydenberg& I confirmed on 20 August.”



(Frydenberg, incidentally, has lost out every which way on the NEG. As energy minister he tried his hardest to get it up, only to see it fall over. Now he is subject to a big campaign against him in Kooyong on climate change, including from high-profile candidates and GetUp.)

Turnbull might justify the intervention as just reminding people of the history. But it is damaging for the government and an Easter gift for Labor – which is under pressure over how much its ambitious emissions reduction policy would cost the economy. It also feeds into Labor’s constant referencing of the coup against Turnbull.

Turnbull’s Easter tweets are a reminder

  • the Coalition sacrificed a coherent policy on energy and climate for a hotchpotch with adverse consequences for prices;

  • it dumped that policy simply because of internal bloodymindedness, and

  • the now-PM and treasurer were backers of the NEG, which had wide support from business.

Shorten has strengthened his commitment on the NEG, indicating on Saturday he’d pursue it in government even without bipartisan support.

“We’ll use some of the Turnbull, Morrison, Frydenberg architecture, and we will work with that structure,” he said.

Given the hole it has left in the government’s energy policy, pressing Morrison on the economic cost of walking away from the NEG is as legitimate as asking Shorten about the economic impact of his policy.




Read more:
VIDEO: Michelle Grattan on the starting line of the 2019 election campaign


The Conversation


Michelle Grattan, Professorial Fellow, University of Canberra

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

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What will the Coalition be remembered for on tax? Tinkering, blunders and lost opportunities


Robert Breunig, Crawford School of Public Policy, Australian National University and Kristen Sobeck, Crawford School of Public Policy, Australian National University

This article is part of a series examining the Coalition government’s record on key issues while in power and what Labor is promising if it wins the 2019 federal election.


Politicians often invoke the word “reform” to convey the significance, or gravitas, of a particular policy change they are proposing.

However, the tax policies implemented over the six years of the Abbott-Turnbull-Morrison government should be more aptly described as: no reform, lots of tinkering, two blunders and some lost opportunities.

To be fair to the leaders of the Coalition, both Abbott and Turnbull began their prime ministerships professing a large appetite for tax reform.

In opposition Abbott and his treasury spokesman Joe Hockey had promised a major inquiry. Hockey said it would pick up where Labor’s Henry Tax Review left off:

We thought the Henry Tax Review was going to be a proper process. Now, that has obviously been an abject failure. We’ve said – Tony Abbott announced
in Budget and reply speech – we will have a proper process for proper tax reform, and whatever comes out of that process, which will be a white paper, we will take to a subsequent election, seeking the mandate of the
Australian people – their approval.

Treasury’s Re:think tax discussion paper, which is as far as the tax white paper process got.
Source: Commonwealth Treasury

It got as far as a discussion paper, seeking submissions.

When Turnbull assumed the leadership, the draft white paper, which would have followed the discussion paper, was scuttled, and the process ended.

Tinkering…

Instead what resulted were marginal changes to personal income tax. One of the brackets was expanded and a new low and middle income tax offset was added.

Marginal changes to superannuation tax further added to the complexity of the tax system as a whole. The current superannuation system disproportionately rewards higher income earners because most contributions are taxed at the same low rate (15%) regardless of the taxpayers’ income tax rate.

The Coalition’s response was to apply a 30% tax on contributions for those earning $250,000 or more (down from the previous threshold of $300,000) and to cut the cap on concessional contributions from $30,000 ($35,000 for those aged 49 and over) to $25,000. And it capped at $1.6 million the amount that could be transferred into the “retirement phase” where fund earnings in retirement were exempt from tax.

It made the system much more complex, and it could have been done more simply, perhaps by reimposing tax on super earnings in retirement (at a low rate) or by taxing by contributions at a standard discount to taxpayers at a marginal rate, as recommended by the 2009 Henry Tax Review.

Alongside these marginal changes, there was also a failed attempt to cut the company tax rate (only the tax rates for small companies were cut) and a muddled discussion about the progressivity of the income tax system.

All in all, many a tinker, but no reform.

Blunders…

Human-induced climate change is compromising the sustainability of our planet. The only way to solve it is by changing incentives using the economic toolkit at our disposal. The Carbon Tax was a good tax. It shifted the costs of pollution onto those who created it, instead of subsidising processes that damaged the environment.

No solution to climate change is possible without corrective taxes.

At some point we’ll have to climb that mountain again, assuming the mountain is not underwater before politicians come to their senses.

The repeal of the Minerals Resource Rent Tax was also a step backwards. By taxing rents (excess profits) instead of profits, it avoided the disincentives created by traditional company taxes. And, it was a good example of the kind of taxes that could eventually replace or supplement company tax.

…and lost opportunities

Changing the GST could have ensured at least one significant contribution to overall tax reform. At 10%, the rate is relatively low by international standards and applies to a shrinking share of spending, as more and more of our money is spent in places or on goods that aren’t taxed.


Value-added (GST) tax rates in OECD and selected Asian countries.
Re:think, Treasury tax discussion paper, March 2015

These factors, combined with the fact that GST is difficult to evade and less costly to administer, suggest that broadening the base is low hanging fruit on the tax reform tree, ripe for picking.

Instead, it may as well be forbidden fruit from the Garden of Eden. We’ve gone in the wrong direction by adding even more exemptions and cutting short talk of increasing the rate.

The failed debate on company tax cuts was another missed opportunity.

What remains is a system that applies different rates to different company sizes, one of few remaining dividend imputation systems in the world, and no discussion about the sustainability of corporate income tax revenue in the future.

All up, the government’s approach over the past six years has largely been piecemeal. It also managed to dismantle two of the most significant tax reforms that could have contributed to a more sustainable tax base in the long run.

Would Labor be better?

It remains to be seen whether a Labor government will be able to achieve more. Some of the party’s proposed changes, such as the treatment of capital gains, head in the right direction, but what it is offering falls short of comprehensive reform.

At the same time, many of its proposed changes will add additional complexity, fail to account for interactions within the entire tax system and use tax exemptions to reach goals that could be better achieved with payments.

Many an international tax reform was engendered by crisis, so there’s hope, of a sort. The opportunity still remains to get in early before weaknesses inherent in the current system become grossly apparent.

What we’ve got is unfair and its complexity rewards those with the resources to pay to understand and exploit it. It is overly reliant on income and company tax in place of indirect taxes, like consumption tax, and it tries to achieve too many disparate objectives, without consideration for the workings of the family and social security payments system.

There is much scope to improve things. What we need most are fearless leaders, from all sides of the political spectrum, who treat comprehensive tax reform as important and can work together to achieve it.




Read more:
What will the Turnbull-Morrison government be remembered for?


The Conversation


Robert Breunig, Professor of Economics and Director, Tax and Transfer Policy Institute, Crawford School of Public Policy, Australian National University and Kristen Sobeck, Senior Research Officer, Crawford School of Public Policy, Australian National University

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

Grattan on Friday: In this campaign, Morrison won’t be wearing gloves like Turnbull did in 2016


Michelle Grattan, University of Canberra

The Wall Street Journal carried the announcement of Australia’s May 18 poll with the rather cruel headline “Australia to Pick Its Next Leader—With an Election”.

It was a sharp reminder (if anyone needed one) of how appalling federal politics has been – and what it looks like to outsiders, as well as to the local voters who will soon register their judgement.

This election is Bill Shorten’s to lose, if you take the long trend of opinion polls, and what the public predict when asked who’ll win.

But the campaign over the coming weeks can be crucial, and Scott Morrison is a ferocious and desperate fighter.




Read more:
Morrison visits Governor-General for a May 18 election


Bill Shorten starts in a strong position. The Coalition has been a shambles through much of the parliamentary term. The Liberals executed a prime minister; a Nationals leader executed himself. The government has few significant achievements except same-sex marriage, to which it was dragged.

Labor has a coherent narrative and an extensive suite of well-developed policies.

But those policies – including on negative gearing, franking credits, and climate change – are Labor’s weakness too. They leave it wide open to the scaremongering that will be relentless (and often dishonest, if the electric car debate is a guide).

Government and opposition begin this contest with nearly equal numbers. After the redistribution, the Coalition has a notional 73 House of Representative seats and Labor 72, with six crossbenchers; 76 seats are required to win government in the new 151-member house.

The closeness of the numbers means the Coalition (in minority government when the term ended) must win seats to survive.

It has hopes in a scattered handful of Labor seats – including Herbert in Queensland and Lindsay in NSW.

join The Conversation in Melbourne

The Liberals may win back Malcolm Turnbull’s old seat of Wentworth – which independent Kerryn Phelps took in the byelection – if former Liberal voters have got over their fury at the coup and look to a potential future high-flyer in Liberal candidate Dave Sharma.

Another possible Coalition gain could be Indi, where independent Cathy McGowan’s bid to pass her mantle to an independent successor may be too ambitious.

But against the government’s few prospects, its outlook in Victoria is bleak and it has many marginals in Queensland. Several Liberal seats are at risk in Western Australia. The Nationals seat of Cowper could go to a recycled independent, former MP Rob Oakeshott.

If the Coalition pulled this election out of the fire, its victory would surely be narrow, even a hung parliament, not a prospect many voters would relish.

Morrison is framing the battle as centrally about economic management, recalling Labor’s deficits, casting forward to ALP tax hikes.

He has drawn on John Howard 2004 “trust” pitch, asking “who do you trust to deliver that strong economy which your essential services rely on?”

But how will Morrison rate compared with Shorten on the empathy meter? His reply, when asked on Thursday about Labor’s “fairness” theme, that “under a Liberal Nationals government, we will always be backing in those Australians who are looking to make a contribution not take one” was jarring (and reminiscent of Joe Hockey’s lifters and leaners).

Morrison will persistently exploit Shorten’s unpopularity. “If you vote for me, you’ll get me. You vote for Bill Shorten and you’ll get Bill Shorten”. Labor sources claim people’s reservations about Shorten are already factored into the vote. Shorten says: “It’s not about me and it’s not about him” – which of course it is.

Shorten is tapping into a rich vein of grievances, over flat wages and the high cost of living. His mantras are fairness, a united team, and the contrast between looking to the future “versus being stuck in the past”. He has made Labor’s pitch on health, its traditional strength, very personal for people with his big-ticket promise to slash costs for cancer sufferers.

Compared with 2016 this will be a short campaign, 38 days to 56 days. And it will be rougher, as the Coalition runs heavily negative and reaches for every weapon. Unlike Turnbull in 2016, Morrison will not be wearing gloves.

On the other side, Labor will benefit from the freneticism of GetUp, which has many government MPs in its sights and a target of making a million phone calls. And the unions have money and manpower.

Turnbull campaigned badly, and the government was lucky to survive last election. The former prime minister’s hyped language – “innovation”, “agile”, “ideas boom”, “age of excitement” – was attuned to the future but a turn off in many parts of the country.

Morrison has to be wary of falling into the opposite trap – sounding old-fashioned, out of sync with public opinion and the rush of technology.

The scepticism of sections of the Coalition about renewables has damaged the government. The misrepresentation and demonisation of Labor’s target of having electric cars form 50% of new car sales by 2030 is likely to be counterproductive. “Bill Shorten wants to end the weekend […] where you’ve got Australians who love being out there in their four wheel drives,” Morrison said last Sunday. After the airing of past quotes from ministers praising electric cars (and maybe some focus groups) the attacks shifted gear slightly.

Australians love renewables and believe electric cars are the way of the future – that it’s just a matter of when they become cheap enough. The Coalition will get nowhere by appearing to stand in the way of progress.

Both sides are struggling with the imperatives of geography in this election. Adani epitomises the dilemma.

This week the Morrison government signed off on another approval stage of the proposed coal mine – a good message to central and north Queensland, a bad one to Victorian Liberal seats where climate change resonates. Likewise, Labor has its own problem dancing along the Adani tightrope. The controversial project will stalk the campaign.




Read more:
Morrison government approves next step towards Adani coal mine


In announcing the May 18 date on Thursday, Morrison spoke in his prime ministerial courtyard. A few hours later Shorten made his opening statement from the home “of an everyday Australian family” in the Melbourne suburb of Mitcham.

Courtyard versus backyard – the competing images at the election’s kickoff. A beginning that will be long forgotten when the campaign reaches its exhausted end after five weeks of trench warfare.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.

What will the Turnbull-Morrison government be remembered for?


Rob Manwaring, Flinders University

This article is part of a series examining the Coalition government’s record on key issues while in power and what Labor is promising if it wins the 2019 federal election.


When the “mighty Roman” Gough Whitlam died, Indigenous leader Noel Pearson delivered a memorable eulogy. Channelling Monty Python, Pearson asked what had Whitlam ever done for Australia? Pearson then reeled off a long list of achievements, including Medibank, no-fault divorce, needs-based schools funding, the Racial Discrimination Act and many more. This was a blistering set of reforms by a truly radical and activist government.

After close to four years of the Turnbull and Morrison Coalition government, we might well ask: “What has the Coalition done for us?”

It is hard to think of a single notable achievement for which the government will be credited or remembered. If we take another government as ideologically driven as Whitlam’s – albeit from a different vantage point – in this case John Howard’s, we can still recall a significant range of policies and changes. Chief among these was gun control.

In contrast, we are hardly likely to remember the Turnbull-Morrison governments.




Read more:
Grattan on Friday: Scott Morrison struggles to straddle the south-north divide


In 2016, if we vaguely recall, there was a double-dissolution election – but could many voters even remember why? Ah, the trigger was the ill-fated Australian Building and Construction Commission, which did not even feature during the election campaign.

Since then, what have been the major policy achievements?

The National Energy Guarantee? If the government is likely to be remembered at all, it will be for the deep-seated divisions that meant Malcolm Turnbull was entirely unable to deliver a clear and coherent energy and climate policy. This was, after all, a government that chose to ignore Chief Scientist Alan Finkel’s call for a Clean Energy Target.

Tony Abbott’s reversal on withdrawing from the Paris Climate Agreement (under Turnbull), but then arguing Australia should stay in (especially with Angus Taylor’s masterful handling of the data on emissions) reflected a policy agenda dogged by internal divisions and incoherence.

Scott Morrison’s major contribution to the debate was to bring a piece of coal into the parliament.




Read more:
What kind of prime minister will Scott Morrison be?


Perhaps immigration? Turnbull was forced to rescue a deal initially brokered with the Obama administration, after new President Donald Trump mocked the deal as “stupid”. With the government wedded to a “tough” border policy, including re-opening the detention facility on Christmas Island, it even lost the vote on “medevac” legislation to ensure medical treatment for suffering refugees.

Any lasting achievements that seem to have happened were only because the government was either forced to, or reluctantly accepted it needed to, make changes. On the banking royal commission, Morrison – a political leader resolutely wedded to remain on the wrong side of history – had initially described it as a “populist whinge”. Any systemic changes to the banking sector will emerge, in spite of, rather than because of the government’s actions.

Turnbull will point to legislating for same-sex marriage as one of his government’s signature policy achievements, following the plebiscite. Yet Morrison will hardly be trumpeting this achievement, given that he voted against it.

Yes, same-sex marriage should be a lasting and welcome change, but again, the Coalition did much to resist it.

In stark contrast, German Chancellor Angela Merkel enabled a parliamentary vote but then voted against it – a more principled position than the unnecessary plebiscite. This was a government that consistently showed it was behind public opinion on a range of issues.

There is a case that underneath the general political and policy mess of the Turnbull-Morrison era, the government notched up some quiet achievements. These include a free-trade deal with Indonesia, entering the fourth phase of the bipartisan national plan to reduce family violence, and trying to embed the Gonski 2.0 schools funding.

Many public servants across a range of portfolios were busily, professionally carrying out a range of important policies and programs out of the media glare. This reflects a long-standing view of government as policy incrementalism – carrying out the everyday, important, but unglamorous work of running the country.

Perhaps the greatest missed opportunity of the Turnbull-Morrison era has been a consistent failure to adequately represent the concerns and issues of the centre-right of Australian politics. Neither Turnbull or Morrison understood the promise of Burkean conservatism or even John Stuart Mill’s liberalism.

Worse still, in the case of the Nationals, there was an almost wilful inability to offer a coherent and reasoned case on behalf of regional Australia. As Coalition MPs scratch their heads and wonder where it all went so horribly wrong, they might well look at South Australia and now New South Wales to remind themselves what a “liberal” government looks like.

Indeed, if we needed a lasting image of the Nationals’ mishandling of the water portfolio, then the dead fish of the Menindee will suffice.

As Scott Morrison most likely exits the prime ministership, a different kind of Roman to Whitlam, his only comfort might be that he is not Theresa May.The Conversation

Rob Manwaring, Senior Lecturer, Politics and Public Policy, Flinders University

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

Grattan on Friday: 2018, the year of governing badly


Michelle Grattan, University of Canberra

Looking back on the federal politics of 2018, voters can conclude
they’ve been given a rough trot.

What’s been dubbed “the permanent election campaign” to which we are
subjected these days is a curse. Too often it encourages expedient
rather than sound decisions and ugly behaviour dominated by noise and
stunts.

Added to that, we’ve had from the Coalition this year an extraordinary
series of leadership, policy and individual meltdowns. A government
that started 2018 with a one-seat majority ends it in a minority,
after the loss of a byelection and a defection to the crossbench.

This has indeed been the year of governing badly.

As the Coalition struggles towards Christmas it has been buffeted this
week by a sex scandal involving an obscure Nationals MP and an attack
from its own side over its energy policy.

The cavorting of Andrew Broad in “sugar baby” land has left the
Nationals looking for a candidate for the Victorian seat of Mallee,
safe in normal circumstances, but not to be taken for granted in these
days of community independents and when the incumbent has been
disgraced. (Broad will be around until the election –
there is no byelection.)

Senior Nationals want a woman to run. The party’s deputy leader,
Senator Bridget McKenzie, is not ruling out seeking preselection but
has no connection with the area. One government source says “it would
be pretty late for her to be carpetbagging” into the seat. A strong
local would seem better.

Whether the Liberals will make it a three-cornered contest is an open
question (though they probably wouldn’t field a candidate if McKenzie
ran).

In 2016 the Nationals contested Murray after a Liberal retired, and won the seat; the Liberals might think they could
benefit in this contest from any backlash against the Nationals over
Broad’s conduct. On the other hand, would they want to spend money on this seat in an election when dollars will be tight?

The Nationals have often been a steady and stabilising force within
the Coalition. Coming out of this year they look like a chaotic rump,
unable to manage their personal and political lives.

Barnaby Joyce destroyed his leadership with an affair and has been
undermining his party as he attempts to get it back. McCormack is a trier
facing a job that often looks beyond him. He’ll last to the election
(well, presumably) but probably not after that.

Prime Minister Scott Morrison is the ultimate trier, believing the
only possible salvation for the government is constant activity. For a
very short time, he looked reasonably effective. But then all the
freneticism started to appear contrived and fake.

One big challenge Morrison has not been able to handle is the
Coalition’s “woman problem”. Minimal female representation in both
Coalition parties, claims of bullying in the Liberals, and the
defection to the crossbench of Liberal MP Julia Banks will inevitably
put off female voters. The Broad scandal feeds into the negative
narrative.

Morrison himself has a “blokey” image that might turn away some female
voters although Liberal sources dispute this.

It’s ironic that neither Coalition party will embrace quotas but
Morrison wanted a female candidate in Wentworth (only to be rebuffed
by the preselectors) and now Nationals president Larry Anthony urges a woman for Mallee.

Women are thought to be useful in desperate circumstances, it seems.

Amid all the year’s bedlam in conservative politics, one major policy
issue remains a complete muddle – or more precisely it is the intersection of
two issues, energy and climate.

The bitter battle within the Liberals over energy didn’t just bring
down Malcolm Turnbull – it stopped the formulation of the sort of
viable policy business pleads for, to give certainty to investors.

This week the Berejiklian government called out its federal
counterpart; state energy minister Don Harwin declared it “out of
touch” on energy and climate policy, saying “it’s time for them to
change course”. But at a testy meeting of the COAG energy council
federal minister Angus Taylor was defiantly unmoved.

Also this week came criticism from the Energy Security Board, which
says in its 2018 Health of the Electricity Market report that when
investment is needed “it is not helpful for the Commonwealth
government to be threatening powers of divestment, price setting and
discretionary asset write-downs.”

Energy policy both symbolises the deep ideological divide in the
Liberal party and is at the core of it. The party won’t be credible on
policy until it can formulate a broad position that is acceptable to
stakeholders and the community. If it goes into opposition next year,
doing so should be a top policy priority.

Its plan for a National Energy Guarantee was scuttled by the
government itself during those crazy coup days in August. But this was
not before devising the scheme had given then energy minister Josh
Frydenberg a chance to show his credentials, as a policy formulator
and a negotiator.

Frydenberg lost the NEG but won his colleagues’ respect. He received
an overwhelming vote for Liberal deputy; as things stand, he’s well
placed to lead his party at some future point.

Now treasurer, Frydenberg is one of the few senior Liberals who has
looked half way impressive this year. His next test will be the April
2 budget, although naturally ownership of that will lie as much or
more with Morrison.

The timetable for a May election is now set. The government wants to
maximise the period it has to try to regroup.

When parliament rose there was speculation the government might not
want it to return in February because the Coalition faced a House
defeat on a amendment to facilitate medical transfers from Manus and
Nauru. This might make a March election more attractive, so the
argument went.

But the government doesn’t seem so concerned about that vote now,
believing some of the crossbenchers will drop off the amendment or
want to weaken it.

Looking to 2019: the betting is firmly on an ALP victory, in the
absence of a surprising turn of events. A win by either side would at
least bring an end to the revolving prime ministerships, thanks to
rule changes.

Assuming Labor won a solid majority, hopefully the voters might also
get a little respite before the continuous campaigning started up
again.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: Malcolm Turnbull and his NEG continue to haunt the government



File 20181204 34148 17lkcuy.jpg?ixlib=rb 1.1
The former PM via twitter effectively inserted himself into Question Time – in real time.
Dan Himbrechts/AAP

Michelle Grattan, University of Canberra

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

So the most controversial part of the government’s “big stick”, which
has caused so much angst with business, may never become a reality.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

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

Grattan on Friday: Hokey-pokey politics as the government is shaken all about


Michelle Grattan, University of Canberra

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Michelle Grattan, Professorial Fellow, University of Canberra

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

Turnbull versus Morrison in Liberal crisis over Craig Kelly


Michelle Grattan, University of Canberra

Scott Morrison faces a major Liberal party crisis after Malcolm
Turnbull moved to torpedo the Prime Minister’s plan to protect the
preselection of controversial rightwing backbencher Craig Kelly.

Morrison wants the NSW Liberal executive to re-endorse sitting NSW
federal members so Kelly does not have to face a ballot in which he would be defeated.

Kelly has threatened to run as an independent if he loses preselection
and also at times has left the way open to go to the crossbench.

The Coalition is already in minority government after the loss of
Wentworth and last week’s defection of Julia Banks.

Kelly has lost the support of his local branch members, and the
moderates have the numbers to remove him. His preselection opponent,
Kent Johns, has been under pressure to pull out of the race – as he
was persuaded to do before the last election to save Kelly.

Kelly was one of those who scuppered the National Energy Guarantee, in
the party meltdown that ended Turnbull’s leadership. He is a constant
presence in Sky and used his appearances to undermine the Turnbull
position on energy.

After hearing of the save-Kelly plan Turnbull immediately began
lobbying moderate executive members not to agree to the
cross-factional deal. When his lobbying reached the media, he took to
Twitter.

In a series of Sunday night tweets he said: “Today I learned there was a move to
persuade the State Executive to re-endorse Craig Kelly as Liberal
candidate for Hughes in order to avoid a preselection – in other words
to deny Liberal Party members in Hughes the opportunity to have their
say.”

He said he had spoken with “several State Executive members to express
my strong view that the Party’s democratic processes should operate in
the normal way especially after such a long debate in the NSW Liberal
Party about the importance of grass roots membership involvement.”

“It is time for the Liberal Party members in Hughes to have their say
about their local member and decide who they want to represent them.”

“It has been put to me that Mr Kelly has threatened to go to the cross
bench and “bring down the Government”. If indeed he has made that
threat, it is not one that should result in a capitulation. Indeed it
would be the worst and weakest response to such a threat.“

Turnbull said he was “strongly of the view that the normal democratic process should proceed.”

The Australian reports that Turnbull told one executive member, NSW Minister Matt Kean, that if Kelly moved to the crossbench it would “force Morrison to an early election and that will save the Berejiklian government”.

Turnbull had said that when he was PM he and Morrison had agreed to a
March 2 election – before the state poll later in March – but Morrison
was reneging.

The Liberals believe that whichever government faces the people first
in NSW will get a double whack from angry voters. Morrison indicated
last week that the election would be in May after an April 2 budget.

Another NSW rightwinger, senator Jim Molan is arcing up over his
dumping to an unwinnable position on the Senate ticket. Molan is also
looking to Morrison to do something about his position.

“Let’s see what he does, but I’m not here to be taken for granted,”
Molan told 6PR on Sunday.

“I would make the arrogant statement that the Liberal Party needs me
more than I need the Liberal Party.”

UPDATE Kelly survives after Morrison appeal

The NSW Liberal executive has voted to save the preselection of rebel
MP Craig Kelly after Scott Morrison personally lobbied key executive
members.

Morrison, who only landed in Canberra on Monday morning after his trip
to the G20, rang several executive members to appeal to them not to
follow Malcolm Turnbull’s strong urging to veto a deal to endorse Kelly.

The key four executive members to be persuaded to abstain were moderates Wayne
Brown, Harry Stutchbury, Chris Rath, and Sally Betts.

It is understood that Morrison said that while he wanted them to
support the motion for re-endorsement, if they couldn’t do so they should abstain for the good of the government.

The government feared that Kelly – who was among those who destroyed
Turnbull’s energy policy and his prime ministership – would run as an
independent at the election and go to the crossbench in the meantime
if disendorsed.

He had left the way open to do so.

Kelly, who would have lost an ordinary preselection because he did not
have local support, was part of a job lot of federal members endorsed
by the executive after Morrison’s efforts on Monday.

In a statement, a spokesman for the NSW Liberal party said it had “re-endorsed John Alexander OAM MP as our candidate for Bennelong, Jason Falinski MP as our candidate for Mackellar, Craig Kelly MP as our candidate for Hughes, and Lucy Wicks MP as our candidate for Robertson.” It did not mention Craig Laundy who is still making up
his mind whether he wants to recontest. All other NSW MPs have been re-endorsed.

Earlier Turnbull, after intensive private and public lobbying on
Sunday, said on Monday it would be “the antithesis of good government”
to give into Kelly’s threats – if he had made them.

But assuming he had made threats “that is the worst and the weakest
reason not to have a preselection process”.

He said even if Kelly went to crossbench the numbers would not be
there for a successful motion of no confidence against the government.

Turnbull said he had planned to have an election on March 2, ahead of
the NSW election later in March.

Many NSW Liberals believed “it would be in the party’s interest for the federal government to go to an election before the NSW government’s set election date of 23 March. “He described the Berejiklian government as “outstanding”.

If the Morrison government faced the people first Berejiklian could
“go to the polls and be judged on her record rather than being hit by
the brand damage that arose from the very destructive, pointless,
shameful leadership change in Canberra”.

“I know there’s been this proposition put around that no one’s really
interested in the leadership change or the internal machinations of
the Liberal party. The fact is they are and it has done a lot of brand
damage to the Liberal party.

“That’s something the party is going to have to work through. But
there’s no point being mealy mouth about it or pretending that that
damage hasn’t been done”.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.

Malcolm Turnbull accuses his critics of “paranoia”


Michelle Grattan, University of Canberra

Malcolm Turnbull has struck back angrily at a report that he has been helping independent Kerryn Phelps, his successor in Wentworth, as chaos continues to fracture the Liberals.

Responding to a front page-lead story in The Australian headed
“Turnbull plays invisible hand”, the former prime minister tweeted,
“Attribution bias – blaming others for the consequences of your own
actions is a common symptom of paranoia.

“Imagining “invisible” people are out to get you is also a classic
symptom. Not often on the front page of course…“

The report said Turnbull had been in regular contact with Phelps and had had a former electorate office staffer work for the new member for three days to help in the transition.

It quoted a senior Liberal source saying they believed Turnbull was advising Phelps on strategy and that his hands were “all over” the defection of Liberal MP Julia Banks to the crossbench this weel.

The report also said that Phelps had counselled Banks before her defection.

The story was another manifestion of the deep bitterness still
consuming the Liberals from the leadership coup, which has been
reactivated by the Banks’ defection. Banks made a stinging attack on
those who ousted Turnbull in her speech to parliament.

Phelps said on Thursday that Turnbull had had no contact with her
during the Wentworth campaign. Afterwards he had offered assistance
for a smooth transition. She said she and Turnbull had not discussed
Banks.

She told Sky that Turnbull “was very kind in being able to allow a couple of his former staff members to come in to do a handover to my staff members to make sure that they understood which grant programs needed to be progressed and which organisations we needed to be in contact with.”

Phelps confirmed that Banks had approached her before defecting.

“Julia reached out to me for some consultation about what that process
might look and feel like, and I indicated that I would be there to
support her in that transition and the three female crossbenchers were
there to support her when she gave her statement,” she said.

Meanwhile embattled right wing Liberal Craig Kelly, who faces losing
preselection, has changed tactics in his fight to survive.

After earlier repeatedly refusing to rule out defecting to the
crossbench, Kelly – wearing a T-shirt with the face of Robert Menzies
on it – told the ABC he would not do so.

He said he had a contract with the people of his Hughes electorate to
serve through the term as a Liberal member.

He did not rule out running as an independent if he lost preselection,
saying “I haven’t considered that”. He claimed to be confident of being
re-endorsed – although the numbers are against him.

Posing with the T-shirt wearing Kelly, Tony Abbott tweeted, “Always
good to be with a real Liberal!”.

The Senate on Thursday voted to alter the government’s sitting
timetable for next year to ensure Senate estimates hearings will he
held on the April 2 budget before the election is called. The
timetable released earlier this week would not have had estimates
hearing before the poll.

Labor is also introducing in the Senate its own bill to protect LGBTI
students against discrimination, after negotiations between the
government and the opposition on a bill reached an impasse.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.

Australian Politics 2018