Scott Morrison strengthens his policy power, enshrining national cabinet and giving it “laser-like” focus on jobs


Michelle Grattan, University of Canberra

Scott Morrison has won support for a major restructure of federal-state architecture which scraps the Council of Australian Governments, enshrines the “national cabinet” permanently, and pares down a plethora of ancillary ministerial bodies.

The Prime Minister is shaping the ongoing national cabinet around his government’s central priority of jobs, and strengthening the government’s grip on Commonwealth-state relations.

“The national cabinet will be driven by a singular agenda, and that is to create jobs,” Morrison said on Friday.

This would be its “laser-like” mission as the country came out of the COVID crisis and went into the years ahead. The national cabinet would “drive the reform process” between federal and state governments “to drive jobs.”

It would oversee ministerial cabinet subcommittees in key areas, including rural and regional, skills, energy, housing, transport and infrastructure, population and migration, transportation and “health, in terms of having a healthy workforce and a healthy community to support a strong economy”.

The changes, agreed at Friday’s national cabinet meeting, follow the success of that body since it was set up to deal with the pandemic.

“By any measure, national cabinet has proven to be a much more effective body for taking decisions in the national interest than the COAG structure,” Morrison said.

Although like COAG the national cabinet includes federal and state leaders, it has not been hampered by so much bureaucracy. Whether what’s regarded as excessive bureaucracy can be prevented from accumulating when there’s not a crisis remains to be seen.

Nor is it clear whether partisan federal-state politicking, which has been missing at national cabinet despite some sharp disagreements, will get back to previous levels in normal times.

The national cabinet is bound by cabinet confidentiality, which likely will work to the federal government’s advantage.

It will continue to meet regularly – fortnightly at the moment and later monthly – and “initial reform areas” will be agreed by it.

Mostly it won’t meet in person but by “telepresence”. Morrison said the virtual meetings during the pandemic had worked incredibly well. He said there would be two face-to-face meetings a year.

It will draw on a wider range of experts than just public servants.

Federal and state treasurers, who already meet regularly, will become a council of federal financial relations (CFFR). They will take responsibility for all funding agreements including national partnership agreements, and look to consolidating some of them.

The reshaped model cuts down the access of local government, the representative of which has been a permanent participant in COAG.

In the new system, once a year the national cabinet, the CFFR and the Australian Local Government Association will meet in person as the national federation reform council. This will discuss federation reform and “priority national federation issues such as Closing the Gap and women’s safety.”

Closing the Gap and women’s safety will also be on the agenda of national cabinet throughout the year.

Some 20 ministerial councils, which currently range from the regional ministerial forum to the ministerial forum on vehicle emissions, are to be consolidated. Another nine ministerial regulatory councils, presently ranging from energy to consumer affairs, are also to be reduced in number and streamlined; they are to focus on areas of key responsibilities.

Morrison said: “It’s important that ministers at state and federal level talk to each other but they don’t have to do it in such a bureaucratic form with a whole bunch of paperwork attached to it.

“They need to talk to each other, share ideas, but the congestion-busting process we’re engaged on here is simplifying that. They come together to solve problems, deal with issues and move on. They should talk to each other because they find value in it, not because of the requirements of some sort of bureaucratic process”.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.

Vital Signs: Morrison’s industrial relations peace gambit is worth a shot. Even if it fails, it’s shrewd politics


Richard Holden, UNSW

Australian Prime Minister Scott Morrison this week announced plans for a potential “grand bargain” on industrial relations.

Speaking at the National Press Club, he framed the issue as one of boosting economic productivity:

We must enable our businesses to earn Australia’s way out of this crisis. And that means focusing on the things that can make their businesses go faster.

Rather than directly introducing legislation into the parliament, Morrison’s plan involves creating five “working groups” of union and business advocates to look at issues from simplifying awards and the enterprise bargaining system to the treatment of casual workers and “greenfields” agreements for new enterprises.




Read more:
Morrison government invites unions to dance, but employer groups call the tune


This is shrewd politics. If the working groups find agreement, the government can push the required legislation through parliament with a claim to a mandate. And claim the credit.

If it fails, Morrison can say nothing can happen without business and workers agreeing. So the government avoids blame.

But it may also be canny economics.

Going for broker

Perhaps Morrison has realised his real power is not as an advocate but a broker.

This process might have less in common with Australia’s prices and incomes accords of the 1980s, where unions agreed to limit wage claims, than with the Dayton Accords, the peace agreement that ended the Bosnian War in 1995.

The accords between the Australian Council of Trade Unions and the Hawke and Keating governments between 1983 and 1991 were a response to the wage-price spirals that plagued advanced economies in the 1970s and early 1980s.

High inflation led to large wage claims, which further fuelled inflation. The 1983 accord broke this spiral by guaranteeing wage increases every six months tied to the consumer price index. As I’ve noted previously:

Once people knew that wages weren’t going to gallop ahead of prices, there was less of a reason to raise prices, which put less pressure on wages, and so on.

The Dayton Accords (officially the: General Framework Agreement for Peace in Bosnia and Herzegovina) were brokered by the US administration in Dayton, Ohio, in November 1995 between the presidents of Bosnia, Croatia and Serbia.

Booking a room

The shadow minister for industrial relations, Tony Burke, reacted to Morrison’s announcement by saying:

Let’s be clear: all the government has done so far is book a room. This is not an IR agenda – it’s a series of meetings.

Burke meant this as a criticism, but in fact it might be a virtue. It’s hard to imagine a deal on industrial relations without representatives of employers and employees agreeing. That agreement may be better served by a government acting as a broker rather than pushing its own specific agenda.

There is an emerging school of thought in economics that coordinating beliefs plays a crucial role in reaching value-enhancing deals. Having the participants believe there can be a deal might be the heart of the issue.

That was arguably the role US chief negotiator Richard Holbrooke played in the Dayton Accords, and the role federal industrial relations minister Christian Porter will need to play in this rather different setting.

Very different starting points

That said, the parties don’t agree on all that much – at least as a starting point. ACTU secretary Sally McManus has emphasised that:

We can only secure a better, stronger Australia if working people have permanent, well-paid work and the entitlements that come with it.

The head of the Business Council of Australia (BCA), Jennifer Westacott, says the issue is needing:

… a system that delivers higher productivity, letting people work more effectively, produce more and find new and innovative ways to work.

Can permanence and job security be reconciled with effectiveness and innovation in the workplace? I’m an optimist. But we shall see.

Are the representatives representative?

This possible grand bargain needs to be between employers and employees. Those at the table will be representatives of those groups – namely unions and employer groups such as the BCA and Ai Group.

A crucial question is how representative these representatives are.

As Leigh Sales observed on the ABC’s 7:30 program this week:

The vast majority of Australians aren’t members of unions, only 14% of people are. In this process, shouldn’t workers be represented by other voices that more likely speak for them?

In the private sector, union membership is even lower – about 10%.




Read more:
Three charts on: the changing face of Australian union members


One should ask similar questions of the BCA and Ai Group. For instance, do they represent the views of smaller businesses as faithfully as they do the big ones?

This is crucial because it affects the credibility of any potential deal, and how any benefits are spread. A cosy deal between big business and unions on greenfield construction sites is one thing. A grand bargain that helps workers not in unions and employers across the economy is quite another.

Will it work?

Morrison did frame the issue adeptly in his address. He was clear about the inputs needed to increase the economic pie:

The skilled labour businesses need to draw on, the affordable and reliable energy they need, the research and technology they can draw on and utilise, the investment capital and finance that they can access, the markets they can connect to, the economic infrastructure that supports and connects them, the amount of government regulation they must comply with, and the amount and the efficiency of the taxes they must pay.

Given all that, Australia’s industrial relations system does arguably need reform. And it won’t happen without the key players agreeing to it themselves.

Morrison’s gambit may not work, but it is certainly worth a shot.The Conversation

Richard Holden, Professor of Economics, UNSW

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

Morrison government invites unions to dance, but employer groups call the tune


Anthony Forsyth, RMIT University

Prime Minister Scott Morrison this week proposed a new deal in industrial relations, bringing together the government, employers and unions to agree on reforms to create jobs and lift the economy in the post-CIVD-19 pandemic recovery phase.

“”We’ve booked the room, we’ve hired the hall, we’ve got the table ready,” he said on Tuesday. “We need people to get together and sort this stuff out.”

Comparisons have been made with the “accords” of the Hawke and Keating Labor years between 1983 and 1991.

It’s not the same.

The Morrison government is simply recasting an agenda that business groups have pushed for the past decade, and inviting unions (and other stakeholders) into the room.

The Hawke-Keating accord era

This is a long way from the seven accords agreed between the Hawke-Keating governments and the Australian Council of Trade Unions.

The agreements secured union support for the government’s economic reform program by promising improvements in the “social wage” in exchange for unions curbing claims for pay rises.




Read more:
Australian politics explainer: the Prices and Incomes Accord


As a result, landmark social improvements, including the establishment of Medicare and guaranteed employer contributions to superannuation, were achieved for all Australians.

As the accords wore on, though, unions paid a heavy price as “efficiency” became an element in deciding the merits of claims for higher wages. The last accord, for example, ended centralised wage-fixing and ushered in enterprise bargaining. This did more for business productivity than for employee gains.

The WorkChoices era

The election of John Howard in 1996 buried the accord era. His government embraced an overtly anti-union posture, culminating in the 2006 “WorkChoices” legislation that allowed individual workplace agreements. Howard championed this as giving flexibility to both employers and employees. But it really shifted the balance in favour of employers. The backlash helped end Howard’s reign in 2007.

The Labor government of Kevin Rudd then brought in the Fair Work Act, which reinstituted union-centred collective bargaining.

Since then the business lobby has fought back on two fronts: continuing to campaign for deregulation, and developing strategies (including through litigation) to enable employers to sidestep the Fair Work Act’s collective bargaining provisions.

The success of this approach for many employers largely explains the ACTU’s “Change the Rules” campaign before the 2019 election.




Read more:
Where to now for unions and ‘change the rules’?


Industrial relations has therefore remained hotly contested. Prior to the COVID-19 crisis it was almost like a war of attrition. The Coalition’s Ensuring Integrity Bill exemplifies its aggressive agenda. It would have enabled union officials to be removed from office, and unions deregistered, for minor breaches of workplace laws.




Read more:
‘Louts, thugs, bullies’: the myth that’s driving Morrison’s anti-union push


Lay down your guns

Now the prime minister wants everyone to put down their weapons.

In fact this has already occurred in the past two months, with the government, businesses and unions co-operating over emergency measures to deal with the pandemic.

Unions have agreed, for example, to the removal of award restrictions, enabling changes to business operations and work-from-home arrangements. They pushed hard for the JobKeeper wage subsidy scheme.

But how much more will union leaders be prepared to concede when it comes to considering permanent changes to workplace regulation?

Battleground issues

The scope for consensus is limited, especially given four of the five items on the government’s agenda align with that of business organisations such as the Australian Industry Group.

First, casuals and fixed-term employees.

This will be the most hotly fought area. The federal government is likely to address business concerns about the Federal Court ruling last week that “permanent casuals” have a right to paid leave as well as their casual loading. The likely outcome is a new statutory definition of “casual” to prevent this.

For unions, the court decision shuts down the ability of employers to treat workers as casuals long-term. A possible compromise might involve ensuring casuals have a legal right to convert to permanent employment after 12 to 18 months.

Second, “greenfields” agreements for new projects.

Employers in the resources and construction sectors have long complained they are compelled to negotiate with a union for new project agreements. Unions are unlikely to be willing to give this up.

Third, enterprise bargaining.

Employer groups complain the Fair Work Commission’s strict approach to the “better off overall test” and other technical requirements make reaching enterprise agreements too difficult. The unions contend some employers have perverted enterprise bargaining through tactics such as getting carefully selected employees to vote for substandard agreements. There is little room for common ground here.

Fourth, award simplification.

Employer groups have argued that wage-theft scandals are really due to awards being too complex. Yet we have gone from several thousand federal and state awards to 122 awards (one for each industry).




Read more:
All these celebrity restaurant wage-theft scandals point to an industry norm


It is hard to see unions agreeing to (for example) removing leave entitlements from awards when they are arguing in a case before the Fair Work Commission for pandemic leave to be included in awards.

Fifth, compliance and enforcement.

This is the one area where employee gains might be achieved, if the government makes good on its commitment to make systemic underpayment of workers a criminal offence.

Overall, however, the Morrison government’s agenda is skewed towards the reform ambitions of the business community without offering any equivalent of the social wage benefits of the original accord.

Unions may well regard his peace proposal as a request to surrender. They won’t, of course, and will try to ensure their concerns about wage stagnation and exploitation of workers in the gig economy form part of the coming discussions.The Conversation

Anthony Forsyth, Professor of Workplace Law, RMIT University

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

Morrison wants unions and business to ‘put down the weapons’ on IR. But real reform will not be easy.



Lukas Coch/AAP

Ray Markey, Macquarie University

In a bid to repair the economy, Prime Minister Scott Morrison has announced an industrial relations overhaul.

Business groups and unions will be brought together to try to change a system that Morrison says is “not fit for purpose”.

This is a positive step after years in which industrial relations has substantially divided interested parties. As Morrison told the ABC on Wednesday, “we’ve got to put down the weapons”.

But reaching meaningful agreement will not be simple or straightforward.

Accord 2.0?

Morrison’s move has invited comparisons with the Accord between the Labor Party and the ACTU when Bob Hawke became prime minister in 1983.

This was the basis for economic reform built on wide consensus between employers, unions and government.

However, there are many differences between the special circumstances of the Accord and now, which may indicate the chances of success for the current initiative.




Read more:
Australian politics explainer: the Prices and Incomes Accord


Hawke had the advantage of high levels of trust from both unions and employers, based on his years as a successful negotiator as ACTU president and industrial officer.

While Morrison talked positively about to the “constructive approach” between unions and employers during the coronavirus pandemic, he does not have any such record of trust to build on.

Another difference with the Accord is that in the 1980s, the industrial relations system was more centralised. So, employer organisations and the ACTU enjoyed greater coverage and authority among their own constituents to bring them to an agreement.

One indication of that difference now is the recent Jobs Protection Framework negotiated between the National Tertiary Education Union and the Australian Higher Education Industrial Association.

It has fallen over as a sectoral agreement because many universities have refused to participate and it has attracted criticism among some union members.

What needs to be fixed in 2020

Unions, business and government all agree that reform of the current system is needed. Finding common ground on what those changes are will be more difficult.

ACTU secretary Sally McManus says she wants to make jobs more secure for workers.
Joel Carrett/AAP

Morrison has announced five working groups, to be chaired by Industrial Relations Minister Christian Porter. The groups will look at award simplification, casual and fixed-term employment, greenfield projects, and compliance and enforcement for wages and conditions.

Most of the working group topics relate to employer groups’ reform agenda.
The Business Council of Australia has advocated for greater flexibility and simplification of the award system for the economy to successfully rebuild.

Employment relations professor David Peetz warns that this is code for shrinking the award safety net. Unions are likely to interpret this similarly.

Unions may be more interested in simplification of the enterprise bargaining system to benefit workers. They are concerned with the ease with which employers have increasingly terminated agreements and moved employees onto lower paid awards.

Casual workers

The casual workforce is likely to be a contentious area for discussion.

The Australian Industry Group has called for tighter legislative definition of casual worker status, after recent court decisions granted leave for long-term casuals.

Ai Group chief executive Innes Willox is concerned about the definition of workers.
Lukas Coch/AAP

Meanwhile, the ACTU has long sought a general right of conversion to permanent employment for long-term casuals of six to 12 months standing, whom they consider to be exploited.




Read more:
Australian economy must come ‘out of ICU’: Scott Morrison


Notwithstanding the casual loading for casual workers, they earn less on average than permanent employees.

There may be grounds for agreement on this issue. Employers would need to concede a formula for long term casuals’ easy conversion, if they choose, to permanent employment. Unions would need to concede no leave entitlements for employees who choose to remain casuals.

Greenfields sites

Greenfields sites – which involve a genuine new business, activity or project – have been a battleground in the Fair Work Commission for years.

Greenfields agreements on large construction sites have enabled employers to reach enterprise bargaining agreements with a small number of employees before most workers are hired. Workers who are hired when the project gets fully underway are then bound by the agreement.

Compliance and enforcement

There may be more common ground over improved compliance and enforcement for wages and conditions. Employers and unions have condemned major cases of underpayment recently uncovered by the Fair Work Ombudsman.

However, better compliance may be difficult to reconcile with the government and employers’ desire for less regulation.

Where to now?

Unions and employers have indicated willingness to participate in good faith, despite the huge challenges they face. But the omens are poor.

There is already disagreement over the Fair Work Commission’s annual minimum wage decision, due in July.

The ACTU is arguing for a 4% increase, angering business groups.

Industrial Relations Minister Christian Porter will chair five working groups to try and overhaul the IR system.
Joel Carrett/AAP

The Australian Chamber of Commerce and Industry has argued the minimum wage should remain frozen until at least mid-2021. It has even cited a precedent of the 10% reduction awarded on the basis of capacity to pay during the Great Depression.

The fact that wages growth had been at record lows before the COVID-19 crisis will not help matters.




Read more:
View from The Hill: Can Scott Morrison achieve industrial relations disarmament?


There is also a serious question as to whether industrial relations reform is the right place to be looking to reboot the economy.

Former top public servant Michael Keating was head of the Employment, Finance and Prime Minister’s departments during the Accords era.

Writing last month, he said Australia’s industrial relations regulation was more flexible than that in the United States, and the reforms of the past 25 years have had little substantial impact on productivity, labour market adjustment, wages growth or industrial disputation.

Keating also warned that industrial relations reform is mainly “camouflage for lower wages, which is the last thing this economy needs right now”.The Conversation

Ray Markey, Emeritus Professor, Macquarie University

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

View from The Hill: Can Scott Morrison achieve industrial relations disarmament?



Lukas Coch/AAP

Michelle Grattan, University of Canberra

Scott Morrison has indeed taken to heart that adage about not wasting a crisis. He insists he is going to put to advantage the opportunity brought by these most unfortunate circumstances.

His plan for a government-employer-union-community effort to reform this country’s industrial relations will, if it comes off, be a substantial achievement (although the actual magnitude would depend on just how much was done).

Politically, success would give Morrison something positive for the next election, which will be fought in the testing circumstances of likely high unemployment and sectors of the economy still struggling.

Labor would be outflanked.

If Morrison’s effort ends as a busted flush, he’ll say he tried and move on to something else.

Despite his pragmatism, Morrison aspires to be remembered as a leader who delivered reform. Remember when as treasurer under Malcolm Turnbull, he pushed strongly to change the GST and talked up his mission?

In Tuesday’s address to the National Press Club, he was the ambitious consensus prime minister, declaring “we’ve booked the room, we’ve hired the hall”, to get everybody to the table in pursuit of better industrial relations arrangements.

The present system had “retreated to tribalism, conflict and ideological posturing,” he said. It had “settled into a complacency of unions seeking marginal benefits and employers closing down risks, often by simply not employing anyone”.

As a “good faith” gesture, the government won’t pursue another Senate vote on its controversial Ensuring Integrity bill which would give the Federal Court the power to cancel the registration of a union or an employer organisation and introduce a public interest test for the amalgamation of such organisations. The Senate rejected the legislation last year.

In his speech Morrison announced a structure for talking, and broad topics to talk about. Industrial relations minister Christian Porter will chair five groups – they will consider award simplification; enterprise agreements; casuals and fixed term employment; compliance and enforcement, and greenfield agreements for new enterprises.

“Membership of each group will include employer and union representatives, as well as individuals chosen based on their demonstrated experience and expertise and that will include especially small businesses, rural and regional backgrounds, multicultural communities, women and families,” Morrison said.

The process will run until September. “It will become apparent very quickly if progress is to be made,” he said.

Indeed, it is not as if Porter is starting from scratch. After being appointed industrial relations minister following the 2019 election, Porter set up a process of IR reform which has produced several discussion papers and consultations on a range of issues.

A frustrating feature of the Coalition government, if you take it as a whole from its election in 2013, is its failure to finish what it starts.
Key reform processes have previously begun but run up dry gullies or been overtaken.

For instance Tony Abbott commissioned white papers on taxation and federalism. After overthrowing Abbott, Turnbull aborted the white papers. Turnbull in turn flirted with tax change, not just possible GST reform but even the states raising their own income tax. Tax reform as well as federalism are among the issues Morrison has in his sights.

As for Morrison’s declared determination to get a better system for training and skilling workers for the jobs of the present and the future – we have heard this from governments of both stripes for a very long time.

Of course, the past isn’t necessarily a guide to the future, and Morrison’s handling of the pandemic points to his adaptability as a leader.

His agenda appears broad and ambitious (although we can’t be definitive ahead of the detail). He has talked skills and industrial relations this week, but there’s also deregulation (another recurring Coalition theme) and energy as well as tax and the federation.

Admittedly it is not a matter of all-or-nothing. Worthwhile but limited changes would be better than not making the effort.

The extent to which Morrison succeeds will depend on a number of factors.

On industrial relations, it is whether employers and unions put the interests they share above those that divide them – whether each side will be willing to give ground for a larger common cause. The chance of agreement will differ according to the issue.

ACTU secretary Sally McManus responded on Tuesday: “The ACTU will measure any changes to industrial relations law on the benchmarks of: will it give working people better job security, and will it lead to working people receiving their fair share of the country’s wealth?”

They could be challenging benchmarks.

A co-operative discussion will go against the instincts of some of the Coalition’s anti-union hardliners, and be resisted by some in McManus’s constituency.

Asked his message to people in his own party who might see this as an opportunity to finally neuter the union movement, Morrison said: “I think everybody’s got to put their weapons down on this”.

On making progress with reforms involving federal-state relations, including the training system, the attitude of the states will be crucial.

Morrison lauds the national cabinet, and the government contrasts it with the more bureaucratic Council of Australian Governments processes.

But national cabinet and COAG are the same people. The difference is national cabinet is operating in a crisis and totally focussed on that, and on the moment.

COAG deals with everything, and is mostly putting in place measures for the longer term. Inevitably, interests will diverge and corners are harder to cut (which doesn’t mean COAG’s working can’t be usefully shaken up).

Even if national cabinet continued, on some of these reform measures the states would probably behave more like they were in COAG – that is, there’d be more “process”.

Finally, there’s whether a crisis really does produce a climate conducive to reform.

It certainly concentrates attention, turns the page, sweeps away most else. (Asked on Tuesday about the timetable for the religious freedom legislation and the proposed anti-corruption body, Morrison had no answers. It was almost as though they were from another era.)

The road out of this crisis will be very tough for many people. Extensive reform is often painful. Whether the Australian public will be in the mood for it as they cope with the aftermath of such a trauma is an open question.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 economy must come ‘out of ICU’: Scott Morrison


Michelle Grattan, University of Canberra

Scott Morrison says it is vital to get the Australian economy “out of ICU” and “off the medication” of government support “before it becomes too accustomed to it”.

In speech on his government’s plans to reset economic growth over the next three to five years, Morrison says, “We must enable our businesses to earn our way out of this crisis.

“That means focusing on the things that can make our businesses go faster.”

Part of the address, to the National Press Club, has been released ahead of its Tuesday delivery.

Morrison’s strong emphasis on business leading the recovery further sets up the contrast with Anthony Albanese, who has outlined an agenda placing much more stress on the role of government.

The Prime Minister outlines principles that will guide the pursuit of a “JobMaker plan for a new generation of economic success”.

This speech deals with skills and training – flagging extra federal resources would be available for a better system – and with industrial relations (although the IR section hasn’t been released). Morrison has previously flagged he would like a compact involving employers and unions to promote change.

Areas including tax reform, deregulation, energy and federation will be addressed later.

Morrison says the reset’s overwhelming priority “will be to win the battle for jobs”, with the October budget important in this.

He paints a dark background against which the budget will be framed, including “an historic deficit”, debt above 30% of GDP, unemployment about 10% and global trade expected to fall by up to a third.

Five principles will guide the JobMaker plan.

First, Australia will “remain an outward-looking, open and sovereign trading economy”, that won’t “retreat into the downward spiral of protectionism” – but also won’t trade away its values for short term gain.

The second principle “is caring for country, a principle that indigenous Australians have practiced for tens of thousands of years”.

This involves “responsible management and stewardship of what has been left to us to sustainably manage for current and future generations. We must not borrow from future generations what we cannot return to them.

“This is as much true for our environmental, cultural and natural resources as it for our economic and financial ones. Governments must live within their means, to not impose impossible debt burdens on future generations.”

The third principle is leveraging and building on strengths.

These include “an educated and highly-skilled workforce that supports not just a thriving and innovative services sector, but a modern and competitive advanced manufacturing sector.

“Resources and agricultural sectors that can both fuel and feed large global populations, including our own and support vibrant rural and regional communities. A financial system that has proved to be one of the most stable and resilient in the world.

“World leading scientists, medical specialists, researchers and technologists. An emerging space sector.”

Fourthly, “ we must always ensure that there is the opportunity in Australia for those who have a go, to get a go”.

Under this falls “access to essential services, incentive for effort and respect for the principles of mutual obligation. All translated into policies that seek not to punish those who have success, but devise ways for others to achieve it.”

And fifthly is “doing what makes the boat go faster”.

“To strengthen and grow our economy, the boats we need to go faster are the hundreds of thousands of small, medium and large businesses that make up our economy and create the value upon which everything else depends.”

To go faster, businesses need skilled labour, affordable and reliable energy, research and technology they can use, investment capital and finance, markets, and economic infrastructure.

Also relevant are the amount of government regulation they must comply with, and the level and efficiency of the taxes they have to pay, in particular whether these encourage them to invest and employ people.

Morrison says changing the skills and training system will be a priority, to better prepare people for the jobs businesses will create.

Present arrangements are too clunky and unresponsive, he says. Clear information is lacking about the skills needed now and in the future, so the right training and funding can be provided. There are inconsistencies and incoherence in the funding arrangements, with little accountability back to outcomes.

Changes are required to:

  • better link funding to forward looking skills businesses need

  • simplify the system, with greater consistency between jurisdictions and between VET and higher education

  • increase the transparency of funding and the monitoring of performance

  • better coordinate the subsidies, loans and other funding sources, to make the most of the support provided.

“Our national hospital agreement provides a good model for the changes we need to make. Incorporating national efficient pricing for training and activity based funding models would be a real step forward,” Morrison says.

“That is a system my government would be prepared to invest more in.”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: JobKeeper $60 billion snafu like your house builder revising quote: Morrison


Michelle Grattan, University of Canberra

Campaigning in Eden-Monaro with just-selected Liberal candidate Fiona Kotvojs, Scott Morrison on Sunday turned folksy to present the upside of the $60 billion JobKeeper forecasting snafu.

“If you’re building a house and the contractor comes to you and says it’s going to cost you $350,000 and they come back to you several months later and say, well, things have changed and it’s only going to cost you $250,000, well, that is news that you would welcome.”

Two things happened with the JobKeeper estimate.

First, treasury made wrong assumptions about the likely numbers and cost. The about 6 million employees anticipated to access the program has shrunk to some 3.5 million, so the $130 billion cost has fallen to $70 billion.

Second, The Tax Office didn’t spot treasury’s bad forecasting for a long time because it failed to pick up that its own data was flawed due to some employers filling in their forms wrongly.

Treasury says it erred in part because things didn’t get as bad as it had expected. Also, there was the “inherent uncertainty” in estimating the take-up of a demand-driven program.

It’s notable however, that writing in The Conversation in late April, Melbourne University economists Roger Wilkins and Jeff Borland pointed to a disparity between the drop of 2.6 million full time jobs implied by the Reserve Bank and the 6.6 million jobs their calculations suggested treasury was preparing to fund under JobKeeper.

Given this big discrepancy, one might have thought the treasury bureaucrats would have kept a careful eye on the numbers. But they were falsely reassured by the Tax Office’s incorrect figures.

Presciently, the academics wrote: “Forecasts – even those based on the most relevant and up-to-date information – can be wrong. This isn’t a criticism. Making forecasts is hard.

“But it might be that 6.6 million turns out to be an overestimate.”

They argued that “if so, it creates an opportunity.

“It would allow JobKeeper to be extended to some of the workers who at present miss out, among them casual employees in their job for less than 12 months and the temporary visa holders who are currently excluded.”

This is just what the government doesn’t want to do.

Inevitably the huge looming underspend has intensified the widespread calls for JobKeeper to be broadened.

Asked on Sunday about using the money to extend the program to more people or beyond September, Morrison replied, “If the suggestion is that we should be increasing borrowing more than would be needed to deliver the program that we’ve designed and [are] delivering, well, the answer is no”.

But Morrison also said JobKeeper was not the only programs the government had. He noted hard-pressed sectors such as tourism, the arts and media, and housing. He said, “we will continue to target our support and it will become more targeted as time goes on.”

“There are many challenges that the economy will face beyond September. We know that and there are particular sectors that will feel this for longer, particularly those who are particularly dependent on international borders. We understand that and we’ll be considering that carefully.”

Morrison is leaving the way open for further assistance, but would seem to prefer not to give it via substantial changes to JobKeeper.

Still, there has been speculation about JobKeeper being phased out rather than having the proposed hard finish in late September. And there is a review of it reporting in June. So the government has wriggle room.

Whatever the mechanism, there’ll be a lot of pressure to extend more funding to the tourist industry in the context of the Eden-Monaro by-election, especially with Morrison declaring that “job-making is honestly what this byelection is going to be about”.

The windfall also puts pressure on over JobSeeker.

A poll released by The Australia Institute, a progressive think tank, found 59% of Eden-Monaro voters want a permanent increase to the JobSeeker payment (all or some of the Coronavirus Supplement of $275 a week retained). The poll was done May 12 of 978 residents. At present the payment is due to snap back to the old level at the end of September – $282.85 for a single recipient without dependants, roughly half of what they are getting now.

The opposition has leapt on the massive forecasting/monitoring snafu to call for Treasurer Josh Frydenberg to appear before the Senate committee that is examining the government’s COVID measures.

But Morrison on Sunday ruled this out, and Frydenberg can’t be compelled.

While the government under the Westminster system must accept responsibility for the incorrect forecasting and poor monitoring – and Morrison did so – it is the officials that have the detailed information about how it went wrong.

Morrison said he had “a great deal of confidence in our public service and the officials”. He wouldn’t be wanting to say anything else given, as he noted, “there are many, of course, who live here in the Eden-Monaro electorate”. Indeed it has the highest proportion of government workers of any electorate outside the ACT.

The Tax Office has admitted its attention was on making the early payments and it didn’t have its eyes on the estimates of numbers.

But treasury? While it has given some reasons, there are surely more questions, in light of what seemed obvious to the academics weeks earlier.

The value of having the Senate committee is it can get quickly from the public servants a fuller explanation of what was not a black hole but a over-inflated balloon.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.

Why good leaders need to hold the hose: how history might read Morrison’s coronavirus leadership



Wes Mountain/The Conversation, CC BY-ND

Frank Bongiorno, Australian National University

What does political leadership look like in a pandemic?

Many of us probably carry images in our heads of what good leadership might be in a depression or a war. But before 2020 few of us would have had any conception of what political leadership might look like during a life-threatening public health crisis.

We took from last summer some fairly firm ideas of what leadership in a bushfire crisis should not look like. Political leaders should not leave for luxurious overseas holidays. They should not expect those who fear for their lives and property to find inspiration in the exploits of the Australian cricket team. They should not force themselves onto traumatised people when offering nothing except the chance to participate in a photo opportunity. They should not run party-political advertisements that seek to obscure their own monumental failures.




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How Australia’s response to the Spanish flu of 1919 sounds warnings on dealing with coronavirus


Charles II: good in a crisis.
Royal Museums Greenwich

Above all, they should not announce that it’s not their job to hold the hose. As it happens, we already had a famous model of what a national leader might do in a fire.

In 1666, King Charles II of England was widely regarded as a worthless playboy with nothing much to his credit. In 1665, London lost tens of thousands of people in the Great Plague and there was little that he, or anyone else, had been able to do about it. When a fire broke out in Pudding Lane in the following year, few had any reason to expect Charles would distinguish himself. But his leadership in that fire is famous. It was brave, inspiring and, yes, although he did not hold the hose, he did pass the buckets.

Crises can make leaders but they can also break them – or, as happened over the summer with Morrison, nearly break them. In a recent book, labour historian Liam Byrne explores the early lives and careers of two Labor prime ministers, James Scullin and John Curtin. Each was a product of the Victorian labour movement. Each had regarded himself as a socialist. Each would face a massive national crisis on becoming prime minister that required them to put aside the beliefs of a lifetime.

Scullin faced the Great Depression of the 1930s. He emerged from a brief time in government at the beginning of 1932 damaged and bewildered. The crisis was the breaking and not the making of him. To be fair, it’s hard to imagine how, given the state of the Australian economy and the scale of the problem he faced, anyone could have done much better.

When Australian prime ministers are ranked, Scullin usually occupies a lowly place while Curtin often comes out on top. The success of Curtin’s wartime leadership wasn’t predictable. He was a anti-conscriptionist during the first world war who saw that war as a scheme devised by capitalists to divide and conquer the working class. He was moody, aloof and a worrier. But the crisis of the Pacific War was the making of Curtin as a leader, even if he would not live to see the peace.

We should not exaggerate the extent to which Australians fell in behind Curtin’s urgings. In the present crisis, I’ve occasionally been reminded, during some of Morrison’s occasionally hectoring and patronising performances, of the difficulties Curtin faced.

Morrison called panic-buying “un-Australian”, but it must be sufficiently Australian also to have occurred during the war, when people got wind of the approach of clothing rationing. Morrison’s infantilising “early mark” made some bristle in the same way, inevitably, as grown-ups came to resent petty government restrictions during the second world war. The minister in charge of rationing, John Dedman, was famously lampooned for having banned pink icing on wedding cakes and for killing Santa Claus with his restrictions on Christmas advertising. Even in war, adults expect to be treated as adults.

A poster from 1942.
Queensland Museum

Morrison could not afford another leadership failure when coronavirus hit. My own view of his leadership by the end of the last summer is that it was badly damaged but unlikely to be terminal. He had already shown himself as an adaptable politician and I expected he would also enjoy the help of a friendly right-wing media in repairing it.

Malcolm Turnbull’s memoir presents a hostile but mainly persuasive account of Morrison as a politician. Turnbull presents him as sneaky and duplicitous. But more importantly, in making sense of his recent leadership, Morrison is painted as a pragmatic political professional unattached to ideology and quite prepared to pick up and drop policies according to his perception of the needs – including his own – in any context.




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Grattan on Friday: Descending the COVID mountain could be hazardous for Scott Morrison


For Morrison, the science on climate change is negotiable, but the science on coronavirus is the last word. He is the kind of leader who is off to the footy one moment and everyone else should also get out and about, then that he’s not and everyone must stay home. He can dismiss the need for a wage subsidy one week and then announce a A$130 billion package the next. He can double the JobSeeker allowance after having for years staunchly opposed even a minor increase as an affront to self-reliance and an intolerable incentive to the unemployed to stay that way.

Morrison can do all of this with very few backward glances and then – if it suits his purposes and he can get away with it – reverse the lot when that suits him as well.

So there is Morrison’s adaptability. But there is also a helpful conservative media. Here, Morrison is not just a nimble leader with a well-developed survival instinct. He is positively Churchillian.

Greg Sheridan of The Australian was early out of the blocks near the end of March. “Scott Morrison could become Australia’s most important war-time leader,” he declared. “If he succeeds, he will join a pantheon which at the moment consists only of John Curtin, a leader who got us through, who worried us through, our last existential challenge.”

More recently, Sheridan’s colleague, Paul Kelly, has extended this to an attack on state premiers as “laggards”. He asked rhetorically whether they were “free riders on the Morrison government and the banks, who keep the economy alive at such dire cost”.

A prime minister who can rely on such free promotion has good reason to expect a bright political future. And Labor Party figures are entitled to ask if they could have expected such generosity in the context of draconian restrictions on personal freedom and massive spending aimed at propping up the economy and saving lives.

As we return to something like political business as usual, Morrison is likely to be subjected to efforts to make him and his government accountable that he has long shown he regards as onerous. How he deals with those, and with the immense challenges of rebuilding the economy in the context of debt, deficit, global depression and the danger of new outbreaks of disease, may well be a more testing challenge to his leadership than anything so far.The Conversation

Frank Bongiorno, Professor of History, ANU College of Arts and Social Sciences, Australian National University

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

Grattan on Friday: Descending the COVID mountain could be hazardous for Scott Morrison


Michelle Grattan, University of Canberra

Just a year ago, Scott Morrison was on the cusp of achieving what most had believed impossible. His ability as a campaigner, aided by the failure of his opponent to connect with the Australian public and Labor’s over-heavy policy bag, brought him the unexpected May 18 election victory.

Now he is riding another wave of success. But it’s thanks to the strangest and scariest of circumstances.

Morning Consult polling published in the May 9 issue of The Economist shows Morrison, with an approval rating of 64%, heading a selection of world leaders. Behind him are Trudeau (Canada), Merkel (Germany), Johnson (UK), Modi (India), Macron (France), AMLO (Mexico), Trump (US), Abe (Japan) and Bolsonaro (Brazil).

It’s a hell of a way to become top of the political pops.

Without the pandemic, Morrison would likely be going into the second year of this parliamentary term in a very sub-optimal position.




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Grattan on Friday: The delicate art of political distancing during the pandemic


Voters would remember the past year more for his shocker performance during the bushfires, the “sports rorts” scandal and the controversy around minister Angus Taylor than for positive achievements.

In dealing with the COVID crisis, Morrison has succeeded (so far) because of his extreme pragmatism (the government’s huge spend defies its ideology), a willingness to listen, and his ability to learn from mistakes.

He heeded the health experts – though he balanced their advice with his own economic orientation (hence his rejection of the aim of eliminating the virus). In crafting the relief package he heeded Treasury advice.

Having been frustrated by the lack of federal government powers during the fires, and aware that, similarly, in the COVID crisis power overwhelmingly would rest with the states, he established the national cabinet to maximise Canberra’s clout.

He became a devotee of consensus politics, even when that meant embracing disagreement.

He’s used his communications skills to the maximum, and worked hard at switching from arrogance to empathy.

Every news conference, of which there are many (watched live by quite a few of the public) opens with a carefully crafted homily, which often has the feel of a sermon.

These are designed to connect, exhort and set a tone. (“This is a tough day for Australia, a very tough day. Almost 600,000 jobs have been lost,” he began his Thursday press conference about the horrifying figures that will be followed by even worse numbers.)

But extremely difficult as it has been, managing the “hot” stage of this crisis is likely easier than navigating the journey out which, at least for the foreseeable future, will have the virus lurking as activity steps up. As Boris Johnson said, charting his government’s way ahead, “it is coming down the mountain that is often more dangerous”. (He was echoing a similar line from Jacinda Ardern.)

If we think of the parliamentary cycle, where will Morrison be in May 2021, when (at most) the election will be 12 months away?

The unemployment queue will be shortening but still long. Many businesses, especially small ones, will have disappeared. There’ll have been stoushes about the government’s winding back its JobSeeker and JobKeeper programs, and the free child care it is currently providing. Perhaps it will have been forced to modify those wind-backs in some respects.

Treasurer Josh Frydenberg’s budget of October this year would have contained a massive deficit for 2020-21 (Deloitte estimates it at more than $131 billion), after a likely even bigger outcome for 2019-20. The government would be producing a 2021 budget with a deficit, on Deloitte’s forecast, of more than $51 billion for 2021-22.

By May 2021, the government will be having a stab at reforms, the nature and extent of which are at this point unclear, probably even to it. Indeed, Morrison needs to start managing expectations; while every parrot (to adopt a Keatingism) might be squawking about reform, there are no silver bullets.




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First stage of ‘road back’ will boost monthly GDP by $3.1 billion and jobs by 252,500: Frydenberg


Regardless, some or much of whatever the government does will be contested, by the opposition and by some stakeholders.

If proposals involve political losers, there’ll be blow back. On the other hand, there may also be disappointment from some, especially in business, that the reform agenda hasn’t gone far enough, and concern it doesn’t have sufficient heft to adequately stimulate growth.

To implement reforms, many of which lie in the remit of the states, the co-operation of the premiers will be needed. But political differences are likely to constrain this, even if the national cabinet were to be kept going in some form.

A wild card is whether the trade dispute with China gets worse in coming months. This is of course about a lot more than trade. It will be a serious economic problem if China is determined to punish Australia. Strong exports are being relied on to help us get through the crisis.

Anthony Albanese this week delivered Labor’s broad principles for Australia’s economic recovery. His main message was that we must not just “return to as we were”. Issues such as the excessive casualisation of jobs and jobseekers stuck in poverty had to be addressed, he said.

In short, Albanese is arguing the lessons of the pandemic feed into Labor’s advocacy of a fairer, better society. It was familiar if worthy territory, but with little evidence of any transformational ideas from the opposition.




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The impending by-election in the Labor-held seat of Eden-Monaro will provide an early test of whether Morrison’s good performance over the virus translates into electoral reward. Albanese, however, has more at stake in this byelection than Morrison.

A loss would be a major knock to him personally and to morale in Labor, which has inevitably struggled on the sidelines during the crisis. It would reduce his authority with his colleagues, and sharpen his critics.

Assuming the ALP holds Eden-Monaro, Albanese in the coming two years has to do what Bill Shorten could not: that is, persuade people they can see him as prime minister. Given all the advantages of incumbency, and Morrison’s salesmanship skills, that’s harder than it might sound.

On the other hand, the unprecedented circumstances could as easily assist Labor as help the government.

As an election pitch, Morrison may be able to say, “look how well we handled the health crisis, supported so many people through the recession/depression, spurred economic recovery, and are now repairing the budget”.

But Labor may be able to counter, “Look how many people are still on the scrap heap, especially the young, in an economy where growth is still struggling, too much work is insecure, and some industries – such as tourism – can’t get out of the doldrums”.

Whether voters remember the disasters missed or mitigated, and believe the Coalition is the best manager in bad times, or they are preoccupied with the country’s continuing pain and blame the government for it, could determine the result of the election due early 2022.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

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

The PM wants to fast-track mega-projects for pandemic recovery. Here’s why that’s a bad idea


Elizabeth Mossop, University of Technology Sydney

Our governments are committing taxpayers to further debt as part of a planned recovery from the economic impacts of the coronavirus pandemic. Infrastructure spending is great for economic stimulus, but it has to be the right kind of infrastructure.

These are some of our largest public investments, so we want this public money to work a lot harder to create multiple rather than just singular benefits. As well as quickly providing jobs and the economic benefits of solving the problems of transport or energy supply, stimulus projects need to deliver broad, long-term community value, reduce inequality and help counter climate change.

The focus of fast-tracked infrastructure spending in the pandemic recovery should be many smaller-scale projects that provide these broader benefits. Hence these projects will provide greater value than the transport mega-projects that had already been proposed for economic stimulus.

For example, the high-speed rail project Labor has proposed will help decarbonise travel, but it won’t provide enough jobs in the short or medium term. Major road projects will cut commuting time for some drivers, but won’t provide widespread benefits or longer-term employment. New roads also increase emissions and often damage neighbourhoods.




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Good infrastructure delivers broad benefits

Infrastructure projects are such significant economic engines they can incorporate community improvement without compromising their other outcomes.

The ways in which projects get planned and implemented hold the key. For example, projects should involve local businesses, give hiring preference to long-term unemployed people and use sustainable materials.

Infrastructure planning can integrate multiple functions. For example, water-management infrastructure (for drainage or flooding) can be designed to include open space, tree cover, recreation and cycleways. Streets can be designed as beautiful public spaces that include pedestrians, cyclists and cars, as well as tree canopy and water storage.

Good infrastructure used for employment creation and economic recovery looks like Roosevelt’s New Deal of the 1930s. These programs created a legacy of high-quality public infrastructure across the United States.

A “Green New Deal” approach in Australia could focus on smaller-scale projects, including:

This greenway traverses Sydney’s Inner West municipality.

These types of projects are fast to get going and labour-intensive. They can be implemented in both cities and regional areas. These projects can also build longer-term employment capacity and help with the transition of workers out of fossil fuel industry jobs.




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Bigger isn’t necessarily better

The largest infrastructure projects, like those being proposed, are the riskiest in terms of cost blowouts and often deliver limited social and environmental value. In many instances their claimed economic value is also doubtful, as their costs are modelled inaccurately and their benefits and use are often vastly exaggerated.




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Spectacular cost blowouts show need to keep governments honest on transport


One cause of cost blowouts is that governments are often reluctant to commit to spending in the early stages of major projects. This means commitments are often made before projects are well enough understood. Early spending to explore alternatives, understand impacts and consult widely can often realise projects more quickly and with more predictable outcomes that better serve the public interest.

The Morrison government is promoting the myth of fast-tracking through the cutting of red tape and green tape. This is not the key to faster project delivery. We have a decent system of development regulation, which attempts to balance the business interests of developers against the public good. The current crisis has illustrated very clearly the importance of the public values of liveability, preserving natural resources and easy access to open space and local centres.




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We must hold all our infrastructure projects to higher standards. Robust planning and environmental regulation are crucial to maximise the public benefit of projects. Effective community engagement ultimately leads to smoother implementation and better outcomes. Projects that work within planning regulations move more swiftly into implementation than projects that try to bypass them.

In this pandemic crisis we have seen governments move fast and effectively to change policy and implement large-scale programs to benefit the community. The economic rebuilding forced on us by the pandemic is an opportunity to show the same agility to rethink our approach to infrastructure as an engine to uplift our communities and improve life for all citizens.The Conversation

Elizabeth Mossop, Dean of Design, Architecture and Building, University of Technology Sydney

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