Scott Morrison pledges ‘absolute support’ for Gladys Berejiklian



Dan Himbrechts/AAP

Michelle Grattan, University of Canberra

Scott Morrison has thrown his weight behind the embattled Gladys Berejiklian, ahead of Wednesday’s evidence to the Independent Commission Against Corruption from disgraced former MP Daryl Maguire, with whom she had a “close personal relationship” for five years.

Morrison said Berejiklian, who had been “a tremendous premier”, had his “absolute support”.

Maguire, former Liberal member for Wagga Wagga, is due to give evidence over two days.

Berejiklian was grilled for several hours on Monday at ICAC, which is investigating whether Maguire misused his parliamentary position for financial gain. Tapped phone conversations were played in which he talked to her about his efforts to broker deals for property developers, notably a sale of land owned by Louise Waterhouse near Badgerys Creek, from which he hoped to get a huge commission.

Berejiklian, who says she did nothing wrong and is not being investigated, told a news conference after her ICAC appearance that she had “stuffed up” her personal life.

She only severed her secret relationship with Maguire recently, despite his resignation from state parliament in 2018, after his property activities came to light in an earlier ICAC inquiry.

Morrison said Berejiklian had shown “a lot of courage” on Monday.

“But I also thought she showed a lot of humility, which is the Gladys I know.

“We’re all human. And particularly in those areas of our lives, and Gladys is an extremely private person, and a person of tremendous integrity. She’s a great friend. And I know she’s been getting many messages of support from her friends and colleagues and including from me … and Jenny.”

Morrison thanked state ministers “Dom Perrottet and Brad Hazzard and the whole team down there in the New South Wales government” for “getting in behind her.”

The last thing Morrison would want at the moment would be the removal of Berejiklian – he has repeatedly praised her government’s performance as the “gold standard” in handling the pandemic and highlighted NSW’s economic progress. So far there has been no sign of a move against her by colleagues and she has indicated her determination to tough out the scandal.

At ICAC on Tuesday Maggie Wang, a former business associate of Maguire, related what he had told her after his appearance at the earlier ICAC investigation. He had said words to the effect, “There’s been an unfortunate accident where my phones and iPad have been run over by a tractor”.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.

Coalition gains in Newspoll after budget; Trump falls further behind Biden



Mick Tsikas/AAP

Adrian Beaumont, University of Melbourne

This week’s Newspoll, conducted October 8–10 from a sample of 1,527 voters, gave the Coalition a 52–48% lead over Labor in the two-party preferred question, a one-point gain for the Coalition since the previous Newspoll three weeks ago.

Primary votes were 44% Coalition (up one), 34% Labor (steady), 11% Greens (down one) and 3% One Nation (steady).

Prime Minister Scott Morrison remained very popular: 65% were satisfied with his performance and 31% were dissatisfied, for a net approval of +34. These figures are unchanged from the last poll.

Opposition Leader Anthony Albanese’s net approval slid three percentage points to -4. His net approval is down six points since late August. Morrison led as better PM by 57-28% (compared to 59-27% three weeks ago).

Newspoll asks three questions after each budget: whether the budget was good or bad for the economy, whether it was good or bad for you personally, and whether the opposition would have delivered a better budget.

On the economy, 42% said the budget was good and 20% bad. When it came to people’s personal fortunes, 26% said they would be better off after the budget, compared to 23% who said worse off. By 49-33%, respondents said Labor would not have delivered a better budget.

Analyst Kevin Bonham tweeted a graph showing this budget performed well compared to historical budgets. The 16-point deficit for the question of whether Labor would have delivered a better budget is the worst for an opposition since 2009.

The one-point gain for the Coalition on people’s voting intentions is also consistent with a well-received budget.

Australian state polls: Victoria and WA

A Victorian Morgan SMS poll, conducted September 29-30 from a sample of 2,220 voters, gave Labor a 51.5-48.5% lead over the Coalition, unchanged from mid-September.

Primary votes were 39% Labor (up two), 39.5% Coalition (up one) and 10% Greens (down two). Morgan’s SMS polls have been unreliable in the past.

In a forced choice, Premier Daniel Andrews had a 61-39% approval rating, down from 70-30% in early September.

Three weeks ago, Newspoll gave Andrews a 62-35% approval rating (compared to 57-37% in late July).

An Utting Research poll of five Western Australian marginal seats showed an average swing to Labor of 16%. In Liberal leader Liza Harvey’s Scarborough seat, the result was 66-34% to Labor.

Labor had a big victory at the March 2017 state election, and this poll suggests a Liberal wipe-out at the next election, due in March 2021.

Biden’s national lead over Trump exceeds ten points

In the FiveThirtyEight national poll aggregate, Democratic presidential nominee Joe Biden now leads President Donald Trump by 10.4% (52.2–41.9%). It’s somewhat closer in the key swing states, with Biden leading by 8.0% in Michigan, 7.3% in Pennsylvania, 7.2% in Wisconsin, 4.5% in Florida and 3.9% in Arizona.

Since my article about Trump’s coronavirus infection and the first presidential debate, Biden’s national lead has increased by 1.4%.

With Pennsylvania and Wisconsin now polling very closely, both can be seen as “tipping point” states. Previously, Pennsylvania had been better for Trump than Wisconsin.

The gap in Trump’s favour between the national vote and the tipping-point states of Wisconsin and Pennsylvania has increased from 2.4% to 3.2%. If Trump were within five points nationally, this election would be highly competitive. But this difference isn’t going to matter with Biden up ten points nationally.

CNN analyst Harry Enten says Biden is polling better than any challenger against an incumbent president since 1936, when scientific polling started.

US polls include undecided voters, so it is hard for candidates to reach 50%. In 2016, Democratic candidate Hillary Clinton never reached that mark in polls, and Trump was able to win far more of the late deciders.

The FiveThirtyEight forecast gives Trump a 14% chance to win, down from 17% last week. Trump has just a 6% chance to win the popular vote.

The Senate forecast gives Democrats a 72% chance to win the Senate, up from 70% last Wednesday. The most likely Senate outcome is still a narrow 51-49 Democratic majority.The Conversation

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

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

Big budget spending isn’t new: it’s a return to what worked before


Steven Hail

It’s easy get the impression the massive government spending and deficits and debt required by the pandemic are new.

It would be understandable, because much of what happened before the 1980s has been forgotten.

Yet for almost all of the years since Federation – almost every one – the Commonwealth budget has been in deficit, right through til the late 1980s.

And it has hurt us not at all.



Centric Wealth

Seventy five years ago, the world faced daunting challenges: the reconstruction of Europe and Japan; the long-overdue end of an empire; the threat of communism; urgent demands for public services, social welfare and housing; and the orientation of economic activity away from the demands of war towards improvements in the quality of life.

The Argus, May 31 1945.
NLA Trove

In Australia, the Commonwealth published a white paper, Full Employment in Australia, in which it accepted responsibility for ensuring that there would always be enough demand for labour so that everyone who wanted to a job would be able to get one.

In pursuit of this goal, both sides of politics understood that they would usually need to run budget deficits.

For 40 years under prime ministers Chifley, Menzies, Holt, Gorton, McMahon, Whitlam and Fraser that is exactly what happened, as it had for most of the 40 previous years without the guiding light of the white paper.

Governments would spend as much as was needed (some of it in the form of gigantic nation-building projects such as the Snowy Mountains Scheme) and tax as little as was needed in order to keep the unemployment rate at close to zero as practical without putting too much pressure on prices.

If there were deficits, low interest rates and the economic growth that flowed from those deficits would shrink the resulting debt as a proportion of GDP.

Banks were regulated to ensure interest rates stayed low and credit was directed to businesses and households.

Menzies was a Keynesian

These were the golden years of so-called Keynesian economics with a consensus across the political spectrum that it was right to use government spending and tax measures to sustain the economy, disputed only by Marxists on the Left and a small band of neoliberals on the Right.

Up until the mid-1970s, when war in the Middle East, fautrising energy prices in a world dependent on oil and rising union militancy in Australia combined to create double-digit inflation and an unemployment rate far higher than the one or two per cent Australia had enjoyed since the war.




Read more:
Memories. In 1961 Labor promised to boost the deficit to fight unemployment. The promise won


In Australia and elsewhere it allowed a takeover by a new band of neoliberal politicians and economists who believed in small government (sometimes austerity), balanced budgets and outsourcing economic management to central banks who were given the autonomy to adjust interest rates and the supply of money in a deregulated market.

It happened slowly, under the governments of Margaret Thatcher in the United Kingdom, Ronald Reagan in the United States and (Labor prime minister) Bob Hawke in Australia.

Hawke was an exception

By the 1990s, the old consensus had not only disappeared, its successes had been erased from memories. A new academic and institutional consensus emerged, shared by prime ministers Hawke, Keating and Howard and treasurers Keating and Costello.

Although it does not require balanced budgets, the Charter of Budget Honesty introduced by Treasurer Peter Costello requires governments to publish the fiscal strategy they intend to use in drawing up budgets.




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Frydenberg is setting his budget ambition dangerously low


The first, in 1997 required the government to achieve “underlying budget balance, on average, over the course of the economic cycle”.

Over time it was hardened to “achieve budget surpluses, on average, over the course of the economic cycle”.


Commonwealth budget, 2019-20

It has been honoured in the breach since 2008, because surpluses usually aren’t consistent with good economic management, regardless of charters.

If the private sector is a net saver, as it usually is, the public sector usually needs to be a net spender in order to keep resources fully employed.

In last year’s election Prime Minister Scott Morrison and his opponent Bill Shorten disagreed about many things, but the need for surpluses wasn’t one of them

Surpluses no longer

No longer. In the leadup to tomorrow’s budget Treasurer Josh Frydenberg has promised a new fiscal strategy, one that for the first time is likely to promise neither a surplus or a balanced budget.

“It would now be damaging to the economy and unrealistic to target surpluses over the forward estimates, he said in September. “This would risk undermining the economic recovery we need to bring hundreds of thousands more Australians back to work and to underpin a stronger medium-term fiscal position”.

Proponents of the neoliberal consensus would argue that the decade of surpluses between the late 1990s and the global financial crisis was a golden time. It was certainly helped by the mining boom.




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Bernie Sanders’ economic adviser has a message for Australia we might just need


But inequality grew, household debt trebled, and as the government continued to target a surplus, interest rates had to be cut to the point where further cuts may no longer have an effect.

Inflation has been below the Reserve Bank’s target and unemployment above it for a decade. The budget is about all that’s left to support the economy. It certainly shouldn’t be getting out of the way to allow the private sector to create wealth, as those proponents used to suggest.

We are on the cusp or a second Keynesian revolution, one expression of which is Modern Monetary Theory, which suggests deficits need to be embraced where they are necessary to bring about full employment.

A government such as Australia’s which issues its own currency is able to fund deficits for as long as it needs to, and would be wise to do so up until the point where it creates too much inflation.

Something stronger

With the package comes the idea of a job guarantee, first put forward by the American economist Hyman Minsky in the 1960s, and promoted now by University of Newcastle labour market specialist Bill Mitchell and the founder of the Cape York Institute Noel Pearson.

It is the unconditional offer of a job at a minimum wage to anyone willing and able to work, normally funded by budget deficits and bigger when the economy is weak and smaller when it is strong.

Will it happen? As Stephanie Kelton, the world’s most prominent Modern Monetary Theorist and author of the New York Times bestseller The Deficit Myth said recently, “I won’t say no. But it’s going to be a hell of a fight.The Conversation

Steven Hail, Lecturer in Economics

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

Scott Morrison names six priority areas in $1.5 billion plan to boost manufacturing


Michelle Grattan, University of Canberra

The federal government is selecting six priority areas for support in a $1.5 billion manufacturing plan Scott Morrison will outline in a pre-budget address.

They are resources technology and critical minerals processing, food and beverage, medical products, recycling and clean energy, defence, and space.

The plan will also focus on building “supply chain resilience” after the COVID pandemic exposed the risks of not having enough capability to quickly produce large amounts of vital items such as personal protective equipment.

The funding will be provided over the budget’s forward estimates period.

In a Thursday speech to the National Press Club, released ahead of delivery, Scott Morrison says this budget “will be one of the most important since the end of the second world war”.

“This budget will be necessarily different in scale to those we have seen for generations. It will respond responsibly to the challenge of our time.

“The budget will confirm the strong plan we have to recover from the COVID-19 recession and to build our economy for the future.”

Morrison says Australia needs “to keep making things”. Manufacturing employs about 860,000 and before COVID generated more than $100 billion in value annually for the economy and more than $50 billion in exports.

“Our government is determined to set a ten-year time horizon where all parties – industry, workforce (including unions), governments at all levels, capital (including superannuation funds) and our scientific and research community – are pulling in the one direction,” Morrison says.

He says the government’s “practical strategy” has three elements: creating a business environment where manufacturers can be more competitive, aligning resources to build scale in areas of competitive strength, and securing sovereign capability in areas of national interest.

The policy involves considerable government intervention – picking winners in terms of sectors, and collaborating with them in planning.

A $1.3 billion “modern manufacturing initiative”, focused on the priority areas, will invest in projects to help manufacturers “scale up” and create jobs.

The government and industry will partner to develop industry-led roadmaps to identify growth opportunities, barriers to scale and what is needed along the value chain in each area.

These maps, to be prepared by April, will be guides for investment and actions by both government and industry.

They will set goals and performance indicators – in jobs, research and development, investment – for the following two, five and ten years.

The manufacturing plan is one of a series of policy initiatives the government is announcing in the run up to the budget.

Others have included deregulation of credit policy to stimulate lending, changes to insolvency provisions to cushion struggling businesses, measures to promote digitalisation, and policies on energy.

Morrison in his speech again strongly talks up the importance of gas for the economic recovery generally and the manufacturing sector in particular.

“If you’re not for gas, you’re not for jobs in our manufacturing and heavy industries,” he declares. “For many manufacturers, it is half the problem.”

The National Covid-19 Co-ordination Commission had advised that gas was 20-40% of many industries’ cost structures.

“Combined with higher electricity costs, the NCCC said that has moved many firms into a ‘doom loop’ where they are living ‘turnaround to turnaround’, making existential decisions at each point of the next major maintenance decision, rather than decisions to invest in technology and much-needed productivity improvements to remain competitive. This needs to change,” Morrisons says.

“That is why, as part of our gas-fired recovery plan, we have committed to resetting our east coast gas markets, unlocking gas supplies, establishing a new gas hub and improving our gas grid distribution systems.”

His speech comes as Santos’s $3.6 billion controversial Narrabri coal seam gas project has this week been given “phased approval” by the NSW Independent Planning Commission, with its development subject to it meeting a range of conditions.

Morrison says the government’s “modern manufacturing initiative” will provide a new investment vehicle to help overcome the barriers to scale. It will leverage co-investment with states and territories, industry and research institutions across three activities

  • collaboration: investments of an average of $80 million each to foster long-term, large-scale production or R&D facilities involving consortia of businesses and other organisations, including physical clusters (such as at the Western Sydney Aerotropolis)

  • translation: investments of about $4 million for industry-led projects translating research and commercialising new products

  • integration: investments of about $4 million connecting local firms with export markets.

The national sovereignty part of the manufacturing plan has more than $107 million earmarked for “supply chain resilience”.

“We cannot ignore the obvious. The efficiency benefits of hyper-globalisation and highly fragmented supply chains can evaporate quickly in the event of a major global shock like the COVID-19 pandemic.

“It is only sensible that Australia consider more options to guard against supply chain vulnerability for critical necessities and to secure us against future shocks,” Morrison says.

Currently, a government review is being done of Australia’s supply chain vulnerabilities in the wake of the pandemic.

The resilience initiative “will support Australian manufacturers investing in capabilities to address areas of identified acute vulnerability domestically, and to ensure they are in a position to contribute to the supply chains of trusted partners and like-minded countries.

“Sovereign Manufacturing Capability Plans will be developed in key areas and a range of policy options will be considered including procurement and long-term contracting arrangements, as well as actions to promote better information sharing and collaboration between government and industry.”

But Morrison stresses this does not herald a return to protectionist policies.

He says Australia is complementing its actions to boost domestic sovereign capability through greater collaboration with like-minded countries.

The manufacturing policy also includes $52.8 million for the existing manufacturing modernisation fund which gives grants to support transformational technologies and processes.

In a Wednesday pre-budget speech Anthony Albanese renewed his calls for trains to be built locally.

“State governments will invest billions of dollars in new public transport projects over the next two decades, requiring hundreds of new rail carriages.

“We should build them here. We have the facilities in Maryborough, Ballarat, Bendigo, Newcastle and Perth. We also have the skills,” he said.

“What we need is a government prepared to back in Australian-made trains and Australian-based jobs.

“This is just one example of how the government should use its purchasing power to create good, secure jobs while strengthening our sovereign industrial and research capabilities.”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: Morrison government’s message to Daniel Andrews: ‘open faster’


Michelle Grattan, University of Canberra

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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




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


The Conversation


Michelle Grattan, Professorial Fellow, University of Canberra

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

Coalition regains Newspoll lead; time running out for Trump



AAP/Dean Lewins

Adrian Beaumont, University of Melbourne

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

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

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

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

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

Australian state polls: Victoria, South Australia and Tasmania

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

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

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

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

Time running out for Trump

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

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

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

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

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

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

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

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

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

Coronavirus and the US economy

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

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

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

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

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

Implications of Ruth Bader Ginsburg’s death

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

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

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

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

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

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



ixpert/Shutterstock

Danielle Wood, Grattan Institute and Tom Crowley, Grattan Institute

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

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

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

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

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

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

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



Source: Grattan analysis of government announcements

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

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

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




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


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

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


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

Source: 2019-20 Budget papers


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

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

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

More is needed from both

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

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

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

That’s too high for too long.




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


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

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

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

A banquet of options

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

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

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




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


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

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

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

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

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

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

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

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

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


Michelle Grattan, University of Canberra

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

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

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

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




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


The government promises a vaccine would be made available free.

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

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

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

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

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

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

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

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

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

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




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


The Conversation


Michelle Grattan, Professorial Fellow, University of Canberra

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

View from The Hill: Daniel Andrews frustrates Scott Morrison with a slow-pace lockdown exit



Erik Anderson/AAP

Michelle Grattan, University of Canberra

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

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

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

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

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

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

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




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


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

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

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

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

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

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

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




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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Michelle Grattan, Professorial Fellow, University of Canberra

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

Scott Morrison is dreaming of an open Australia for Christmas


Michelle Grattan, University of Canberra

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

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

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

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

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

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

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

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

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

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

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

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

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

Morrison said Victoria had “turned the corner”.

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

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

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

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

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

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

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

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

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

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

Michelle Grattan, Professorial Fellow, University of Canberra

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