Explainer: is a High Court challenge about to bring down the Turnbull government?



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Labor will argue David Gillespie ineligible to be an MP based on Section 44(v) of the Constitution.
AAP/Mick Tsikas

Lorraine Finlay, Murdoch University

Labor is set to launch a High Court challenge over the eligibility of Assistant Health Minister David Gillespie to sit in federal parliament. The case has been brought by Peter Alley, the ALP candidate who ran against Gillespie in Lyne at the 2016 federal election.

The action is based on Gillespie, a Nationals MP, owning a small shopping centre in Port Macquarie that contains an Australian Post outlet. As Australia Post is a government-owned corporation, Labor claims this results in Gillespie having an indirect pecuniary interest contrary to Section 44(v) of the Constitution.

If the High Court agrees, Gillespie would be ineligible to sit as an MP.

What does the Constitution say?

Section 44 of the Constitution sets out several grounds of disqualification from holding parliamentary office.

Under Section 44(v), someone “shall be incapable of being chosen or of sitting as a senator or a member of the House of Representatives” if they have:

… any direct or indirect pecuniary interest in any agreement with the Public Service of the Commonwealth otherwise than as a member and in common with the other members of an incorporated company consisting of more than 25 persons.

Before this year, the High Court had only considered this section on one occasion, in 1975.

In that case, Chief Justice Garfield Barwick took an extremely narrow interpretation of the provision, based on a finding that its historic purpose was to protect parliament’s freedom and independence from the influence of the Crown.

An “indirect pecuniary influence” would only be disqualifying where it involved a legal or equitable interest in a contract with ongoing obligations, and where the possibility of financial gain by the agreement’s existence or performance could conceivably allow the Crown to influence an MP in relation to parliamentary affairs.

Under this narrow interpretation – which had been subject to considerable criticism – Gillespie would not be considered ineligible based on his interest in the shopping centre.

The Bob Day case

The High Court revisited the meaning of “indirect pecuniary interest” in April this year. It unanimously held that former Family First Senator Bob Day had an “indirect pecuniary interest” at the time of the 2016 federal election, and was therefore ineligible to be a senator.

Day had already resigned from the Senate before this ruling. But the High Court’s decision was significant for two key reasons.

  • The first was its immediate importance in deciding how a replacement senator was to be selected.

  • The second, which will now be critical when considering Gillespie’s future, was its reconsideration of what constitutes an “indirect pecuniary interest” under Section 44(v).

The Day case concerned a lease agreement between the Commonwealth and Fullarton Investments Pty Ltd for premises Day used as his electorate office. There were a variety of ways in which Day was connected to both the company and property. However, a fact the court found to be particularly significant was that in February 2016, Fullarton Investments directed that rental payments be made into a Day-owned bank account.

The High Court declined to follow the 1975 precedent and adopted a broader interpretation of Section 44(v). Importantly, it found the section had a wider purpose than solely protecting parliament’s independence from executive influence. It was also intended as an anti-corruption provision, designed to protect against potential conflicts of interest by ensuring the public duties of MPs are kept separate from their personal interests.

Under this broader view, an individual would be disqualified where there was an expectation of financial gain if the agreement in question was performed. The court would look at the agreement’s practical effect when making this assessment.

High Court justice Patrick Keane observed:

It is enough that the person’s pockets were or might be affected.

However, it was noted there will be no relevant interest:

… if the agreement in question is one ordinarily made between government and a citizen.

The case against Gillespie

So, is Gillespie ineligible based upon this new, broader interpretation of Section 44(v)?

There is no question of a direct financial interest in this case. Rather, the information currently available suggest that a company owned by Gillespie and his wife leases space in a shopping centre it owns to an Australia Post licensee.

The possible financial interest in this case certainly seems to be more remote than in Day’s case. However, there is still sufficient uncertainty surrounding the outer limits of section 44(v) for this case to be of real concern to the Turnbull government.

What happens now?

If the High Court finds Gillespie is incapable of sitting as an MP under Section 44(v) there would necessarily be a by-election in Lyne.

Given the Turnbull government only has a one-seat majority, the immediate stakes are as high as they could possibly be.

There is also a broader issue worth considering. Gillespie is the third member of the 45th parliament – after Day and Rod Culleton – to have their constitutional eligibility challenged before the courts. In Day’s case, High Court Justice Stephen Gageler emphasised the importance of certainty in this area, so candidates and MPs know where they stand.

The ConversationGiven recent controversies, it would seem an opportune time to review Section 44 to make sure the disqualification provisions in our Constitution are clear, fair, and reflect voters’ real concerns.

Lorraine Finlay, Lecturer in Law, Murdoch University

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

ReachTEL: One Nation voters prefer Abbott to Turnbull by over 3:1


Adrian Beaumont, University of Melbourne

A ReachTEL poll for Sky News, conducted Thursday from a sample of 2390, has Labor leading by 52-48, a one point gain for the Coalition since the previous Sky News ReachTEL, just after the May budget. Assuming the 7.1% undecided are excluded, primary votes are 36.5% Coalition (down 1.3), 35.6% Labor (up 1.4), 10.3% Greens (steady) and 9.8% One Nation (down 0.4).

The primary vote changes suggest Labor should have gained after preferences, but ReachTEL is using respondent allocated preferences. According to Kevin Bonham, using previous election preferences, Labor leads by 52.8-47.2, a 1.3 point gain for Labor since the previous ReachTEL.

At the 2016 election, One Nation preferences split almost 50-50 between the two major parties. However, this poll has evidence that One Nation is now attracting the hard right of the Coalition, and thus that their preferences will be more Coalition-friendly at the next election.

Turnbull is preferred as Liberal leader to Tony Abbott by 68-32, with Coalition voters favouring Turnbull 73-27. However, One Nation voters prefer Abbott by a massive 77-23. It appears that as Turnbull has become more centrist over the last two months, the hard right has moved towards One Nation.

In ReachTEL’s forced choice better PM question, Turnbull leads by 54-46, a two point gain for Turnbull since the May Channel 7 ReachTEL. Same sex marriage is supported by 62-26, with 59% in favour of a plebiscite to decide the issue, while 41% prefer a parliamentary vote. 64% thought penalty rates should be higher on Sunday than Saturday.

Essential 52-48 to Labor, YouGov 51-49 to Labor

In this week’s Essential, primary votes were 39% Coalition, 36% Labor, 10% Greens, 7% One Nation and 3% Nick Xenophon Team. After surging to 9% last week, One Nation’s vote has fallen back. This poll was conducted over the last two weeks from a sample of 1790. Additional questions are based on one week’s sample.

Turnbull’s attributes were relatively unchanged since February, while Shorten’s were a little worse. Turnbull had double digit leads over Shorten on “intelligent”, “capable leader” and “good in a crisis”, but also on “out of touch” and “arrogant”.

By 79-6, voters supported the proposition that politicians should publicly disclose meetings with lobbyists, and by 78-5 they supported continuous reporting of political donations. Over 60% were in favour of bans on foreign donations, donations of over $5,000 and company and union donations. However by 46-30, voters opposed a complete ban on donations, with all political campaigning taxpayer-funded.

UK pollster YouGov has entered the Australian market. Polling will be conducted every fortnight from Thursday to Tuesday by online methods with a sample over 1000. The first YouGov poll, conducted from 22 to 27 June from a sample of 1125, has Labor leading by 51-49. Primary votes are 34% Labor, 33% Coalition, 12% Greens, 7% One Nation, 4% Christian parties and 3% NIck Xenophon Team.

Labor’s narrow two party lead was obtained using respondent-allocated preferences. Using the previous election method, Labor would lead 54-46. Christian parties are not included in the readout in any other poll, and it is likely that most of them are Liberals.

Victoria and ACT to gain seats, while SA loses a seat

On 31 August, the Electoral Commission will determine the number of House seats each state and territory is entitled to, based on the latest population figures.

The 2016 Census was released on 27 June. As a result, according to the parliamentary library, SA’s seats will be reduced by one to 10, while Victoria and the ACT will both gain one seat, to 38 and 3 seats respectively. Other states are unchanged, with NSW entitled to 47 seats, Queensland 30, WA 16, Tasmania 5 and the NT 2. Overall, the House will have 151 members after the next Federal election, up from the current 150.

Labor easily won both ACT seats at the 2016 election, so the creation of a third seat is good news for them. The political effect of redistributions in Victoria and SA will not be known until draft boundaries are released.

If an election is called before the redistributions are finalised, special arrangements are used to create or merge seats. These arrangements have never been used.

Tasmania should have only three House seats, but is entitled to five as this is the minimum entitlement for any of the six original states. As Tasmania has tended to give better results for Labor than the mainland, this malapportionment favours Labor.

More UK post-election analysis

The Guardian has analysis of a post-election study from pollster Ipsos Mori. In terms of swing from the 2015 election, the Conservatives performed best among demographics where the UK Independence Party (UKIP) had its highest vote shares in 2015: these demographics included those aged over 65 and lower social classes.

The Conservatives have adopted UKIP’s populist agenda regarding Brexit, and right-wing populism explains some of the swing to the Conservatives among demographics that were most likely to vote for UKIP and Leave at the 2016 Brexit referendum.

Labour performed best in swing terms among voters aged 18-44 and higher social classes. UKIP had low 2015 vote shares among these demographics. Although Jeremy Corbyn’s radical left-wing policies were also important in winning over young people, Labour’s unexpectedly strong performance can be seen as a rejection of right-wing populism among demographics that voted Remain at the Brexit referendum.

The swing to Labour in higher social classes, and the swing to the Conservatives in lower classes, has meant that the Conservatives narrowly won the top three classes, and Labour narrowly won the fourth class. At previous elections, there has been a far greater difference in party support by class.

On 26 June, the Conservatives committed to spend an additional £1 billion (about $AU 1.7 billion) on Northern Ireland (NI) in return for support on important Commons votes from the Democratic Unionist Party (DUP).

The ConversationDuring the election campaign, PM Theresa May told a nurse who had had no wage increases for eight years, “There isn’t a magic money tree we can shake”. Every time the Conservatives now say there is no money for schools, hospitals, public sector wage increases, etc, people will remember the £1 billion “magic money tree” for NI.

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

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

Grattan on Friday: It’s a year since Turnbull won his first election, but what about a second?



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Malcolm Turnbull broke out his leather jacket this week and tried to shrug off the tensions consuming his party.
Jennifer Rajca/AAP

Michelle Grattan, University of Canberra

An admission. When I heard people raising the “transaction costs” after Tony Abbott was deposed by Malcolm Turnbull, I thought they were exaggerating. Surely these couldn’t be too high, given the relative popularity levels of the two.

Nearly two years on, when the Coalition is lagging badly in the polls and many Liberals – albeit way out from an election – already see opposition looming, those costs are there in spades, in the form of a deeply vengeful Abbott, bent on wrecking his successor; a party at war internally, and speculation being fanned about whether its leader will last to the election.

It’s just a year on Sunday since Turnbull narrowly won the election, but the fear of defeat is strong.

Former Queensland premier Campbell Newman, who spectacularly lost office in one term from a massive majority, has a credibility problem in commenting on what leaders should do. Nevertheless, his call this week for Turnbull to stand down is just another unhelpful piece of flotsam for the Liberals.

“He can’t be deposed – we can’t have another execution,” Newman said. But Turnbull was “dividing the Liberal Party”, what he’d tried wasn’t working, and he should “do the right thing” and quit.

Like most other people in the community, politicians are more impatient than they used to be. So parties are even less willing than once to contemplate losing office.

A period out of power would be painful, no question. The Liberals would soul-search to define the identity of the party they wanted to go into the 2020s.

A new generation would take over, replacing top players of the last decade – Turnbull, Abbott and Julie Bishop. The Nationals might possibly break out of a coalition relationship with the Liberals.

For a Liberal Party that thinks office is its natural home, this would be like facing a nasty spell in hospital to repair severely broken bones. One comfort, perhaps, would be that the febrile nature of today’s politics means government is never too far away. Kevin Rudd won handsomely in 2007; Abbott almost became prime minister at the following election. Abbott swept into power in 2013; Turnbull nearly lost in 2016.

As this year ebbs away, Turnbull’s hold on the leadership will become more precarious if there is no lift in those relentless Newspolls.

But a problem for the party and an insurance for Turnbull is that of the possible alternatives – Bishop, Peter Dutton, Scott Morrison, a resurrected Abbott – there is no one who’d obviously do any better. And given that we may be talking about “saving the furniture”, like Rudd did in 2013, who would want to be the one to lead to a loss?

Just say Turnbull, facing a rout, did decide (much later) to do what Newman says he should do now. Who’d benefit by getting a poisoned chalice?

Bishop? To end a sparkling career by leading to a likely defeat?

Dutton? In recent times, especially since Morrison’s sheen disappeared, Dutton has been talked up as a future leader. But lose an election, perhaps in a landslide, and it would be hard to hang onto the leadership in opposition.

The same applies to Morrison, even if he could get the party room numbers.

That leaves Abbott. Peta Credlin, his confidant and former chief-of-staff, said this week he “actually doesn’t want the job of prime minister”. Unlikely as this seems, that assessment is corroborated by another source.

The thing about Abbott, however, is that he can take one view one day and the opposite the next. If there was half a chance to put on the boxing gloves, he wouldn’t care too much about facing defeat. He’d feel vindicated, and relish the fight.

Don’t lay any money on such a scenario. It’s just one of many long shots in an unfolding story.

Meanwhile, Abbott is said to be in good spirits, as he’s been a centre of attention this week, with a speech articulating his broad agenda, followed by one calling for Australia to consider acquiring nuclear-powered submarines.

Once again, as is his wont, he went back on a position he took in government. “Not more robustly challenging the nuclear no-go mindset is probably the biggest regret I have from my time as PM,” he said.

The submarine speech saw him wading into the portfolio of Defence Industry Minister Christopher Pyne, who has had a nightmare week.

As the dust settles, one legacy question will be how much damage Pyne has done himself with his foolish boasting about the moderates’ power and the prospects for the earlier-than-expected delivery of same-sex marriage – comments which, when leaked, sparked such a damaging furore.

Pyne traditionally has had a heavy coating of teflon. His ministerial performance during this government has been lacklustre: in education, he failed to deliver his tertiary package; he was in and out of the innovation job in a flash, and the most talked-about feature of his period so far in his present post has been his covetous eye on the Defence job held by fellow moderate Marise Payne.

As he said in last Friday’s speech to the “Black Hand” moderates’ function, he’s always voted for Turnbull. But he managed to crack Abbott’s inner circle, before climbing on board with the Turnbull coup.

Pyne’s ambition is the deputy leadership – which would allow him to move into foreign affairs.

The ConversationBefore this week, he might have thought himself well placed, for example, to be deputy to Dutton in opposition. Now he has suffered a lot of reputational damage. But he has considerable powers of regeneration, and the thickest of skins. When some years ago he was featured in a Good Weekend profile with the cover asking “Is this the most annoying man in Australia?”, he was reportedly delighted.

Michelle Grattan, Professorial Fellow, University of Canberra

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

Newspoll steady at 53-47 to Labor. Macron’s party wins French lower house elections


Adrian Beaumont, University of Melbourne

This week’s Newspoll, conducted Thursday to Sunday from a sample of 1790, has Labor leading by 53-47, unchanged since the last Newspoll, three weeks ago. Primary votes are 37% Labor (up 1), 36% Coalition (steady), 11% One Nation (up 2) and 9% Greens (down 1).

32% were satisfied with Turnbull’s performance (down 3), and 55% were dissatisfied (up 1), for a net approval of -23. After creeping above a net -20 rating in the last Newspoll, Turnbull has slid back. Shorten’s net approval was also -23, down three points.

The 2-point lift in One Nation support is probably due to the many headlines about terrorism in the last few weeks. While there has been bad publicity about One Nation’s expenses, One Nation voters are likely to regard this as a media conspiracy to “get” One Nation, and be undeterred.

Since Donald Trump’s election, far right parties in Europe, and at the WA election, have slumped in the closing weeks of election campaigns, and then underperformed their polls on election day. There is no reason to think that a similar pattern will not apply at the next Federal election.

Some have argued that the UK election resembles the Australian 2016 election. As Kevin Bonham says, this is not true. The UK election was held three years early, while the Australian election was held two months early. Furthermore, the Australian election was held early in an attempt to make the Senate more compliant, while the UK election was held solely to attempt to increase the Conservatives’ Commons majority, and this was a dismal failure.

UK Labour leader Jeremy Corbyn succeeded by enthusing the youth vote. With compulsory voting in Australia and full preferential voting required, parties do not need to encourage their supporters to vote. While many on the left would prefer Tanya Plibersek as Labor leader, they will still preference a Labor party led by Shorten higher than the Coalition.

Similarly, many on the right would prefer a PM more right-wing than Turnbull, but they will still prefer the Coalition to Labor.

UK election aftermath

At the UK general election held on 8 June, the Conservatives lost their majority, winning 318 of the 650 seats, 8 short of an outright majority. The Northern Ireland (NI) Democratic Unionist Party (DUP) won 10 seats. As the DUP is very socially conservative and Corbyn has connections to the IRA, they will support the Conservatives.

All other parties represented at Westminster are to the left of the Conservatives. With the Speaker, John Bercow, omitted from the Conservative total, the Conservatives and DUP would have a wafer-thin majority of 327-322.

However Sinn Féin, which won seven seats in NI, will not take its Westminster seats, owing to historical opposition to British rule of NI. Unless this policy changes, the Conservatives and DUP will have a more comfortable 327-315 majority.

Owing to her loss of authority, PM Theresa May’s YouGov ratings have slumped since the election, while Corbyn’s have surged. This graph shows the net favourable ratings of May, Corbyn, the Conservaitves and Labour before the election campaign, near the end of the campaign, and now.

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According to YouGov, just 8% had a favourable opinion of the DUP, while 48% had an unfavourable opinion. Association with the DUP could taint the Conservative brand.

Division within the Conservatives is likely over Brexit. Had the Conservatives won the expected thumping majority, May would have a mandate for a “hard” Brexit. As it is, Conservatives who favour a “soft” Brexit are pushing back.

Macron’s party easily wins French lower house elections

Elections for the French lower house were completed in yesterday’s second round vote. President Emmanuel Macron’s new party, La République En Marche! (REM), won 308 of the 577 seats, and its ally, the Democratic Movement, won another 42 seats. The centre right parties won 137 seats, the centre left 44, the hard left Unsubmissive France 17, the Communists 10 and the far right National Front 8. Turnout was just 42.6% of registered voters, and only 38.4% cast a valid vote.

At the 2012 lower house elections, the centre left had won 331 of the 577 seats, the centre right 229, the Left Front 10, the National Front and the Democratic Movement 2 each. In 2017, Macron’s centrist movement made huge gains at the expense of both the right and left, with far right and left parties also gaining seats.

In the first round held on 11 June, the REM and Democratic Movement won 32.3% of the vote, the centre right 21.6%, the centre left 9.5%, the National Front 13.2%, Unsubmissive France 11.0% and the Greens 4.3%. Unless a candidate won a first round vote majority, the top two candidates in each seat proceeded to the second round.

The ConversationCandidates other than the top two who received at least 12.5% of registered voters also qualified for the second round. However, turnout of only 48.7% meant that just one seat was contested by more than two candidates in the second round.

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

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

Newspoll steady at 53-47 to Labor. Plus UK and French elections


Adrian Beaumont, University of Melbourne

This week’s Newspoll, conducted Thursday to Sunday from a sample of 1655, is completely unchanged on voting intentions since last fortnight’s post-budget Newspoll. Labor leads 53-47, from primary votes of 36% Coalition, 36% Labor, 10% Greens and 9% One Nation.

35% were satisfied with Turnbull’s performance (up 2) and 54% were dissatisfied (up 1), for a net approval of -19. Turnbull’s ratings have risen from a net -29 in early April. According to Kevin Bonham, this is Turnbull’s best net approval since last September, breaking a run of 12 Newspolls with his net approval at or below -20. Shorten’s net approval was -20, up two points.

In my opinion, Turnbull’s gains on approval are because he is moving towards the centre on some policies, such as school funding and the bank levy. However, the electorate trusts Labor more on schools and health. Producing a “Labor-lite” budget has not helped the Coalition, as it surrenders on principles of fiscal rectitude, which are seen as strengths for the Coalition.

56% supported Labor’s position of only raising the Medicare levy for those earning at least $87,000 per year, while 33% supported the Coalition’s position of raising the Medicare levy for taxpayers who already pay the levy. 19% were very worried about a cost blowout for the National Disability Insurance Scheme, 46% were somewhat worried, and 24% not worried.

This Newspoll asked about leader traits, with May 2016 used for comparison. Both leaders fell on every trait, except the negative trait of “arrogant”. Turnbull led by seven points on “decisive and strong” and six points on “likeable”. Shorten led by nine points on “cares for people”, and trailed by 14 on the negative trait of “arrogant”.

Essential at 53-47 to Labor

Since last fortnight, the Coalition has gained a point in Essential. Primary votes are 38% Coalition (up 1), 36% Labor (down 2), 11% Greens (up 1), 5% One Nation (down 1) and 3% Nick Xenophon Team (steady). One Nation has dropped in Essential in the last two months, while holding up in Newspoll. Voting intentions were based on a two-week sample of 1780, with additional questions using just this week’s sample.

By 67-12, voters agreed that asylum seekers should be deported to their country of origin if their claims are unsuccessful. By 53-25, voters thought the government was not too tough on asylum seekers. By 40-32, they thought that asylum seekers who cannot be safely relocated to another country when Manus Island closes should not be brought to Australia.

Most major government decisions were well supported, with the exceptions of privatising Qantas, the Commonwealth Bank and Telstra.

48% thought the bank levy should apply to foreign banks and the big Australian banks, 16% thought it should also apply to small banks, 12% to the big Australian banks only and just 10% thought it should not apply to any bank.

38% thought Catholic schools would not be worse off under the new funding model, and 20% thought they would be worse off. By 52-23, voters would prefer an income tax cut to stronger workplace laws.

French lower house elections: 11 and 18 June

The French lower house is elected for a five-year term (the same as the President) using 577 single-member electorates. Unless one candidate wins an absolute majority in the first round on 11 June, the top two candidates in each seat proceed to the 18 June second round.

Candidates other than the top two can also advance to the second round if they win at least 12.5% of registered voters. That means those who did not vote or spoiled their ballots are counted in the determination. For example, if 50% abstain or spoil their ballots, a 25% threshold of valid votes must be met for candidates other than the top two to proceed to the second round.

The second round uses First Past the Post. As a result, third and sometimes second candidates will often withdraw prior to the second round, to give their broad faction a greater chance of winning, and/or to stop an extremist party like Marine Le Pen’s National Front.

The key question about the lower house elections is whether President Emmanuel Macron’s new party, La République en Marche! (Forward the Republic!) can win a majority. Polling has the REM on about 31%, followed by the conservative Les Républicains on 20%, the far right National Front on 19%, the hard left Unsubmissive France on 14%, and the Greens and Socialists have 10% combined.

If the election results are similar to these polls, the REM will be first or second in the vast majority of seats on 11 June. Whether their main opponent comes from the hard left, centre right or far right, the REM is likely to do well from the votes of excluded candidates, and easily win a majority of the French lower house on 18 June.

UK general election: 8 June

With nine days left until the UK election, polls have diverged. The most Labour-friendly polls (Survation, ORG, YouGov and SurveyMonkey) give the Conservatives 6-8 point leads over Labour. However, the ComRes and ICM polls have the Conservatives 12-14 points ahead. The 10-point Conservative lead in Opinium may be a result of Opinium polling in the two days immediately following the Manchester attack.

Turnout assumptions are the largest cause of the poll divergence. According to UK election analyst Matt Singh, the better polls for Labour use self-reported likelihood to vote among respondents, while ComRes and ICM use historical election turnout patterns to model this election’s turnout. Older people have historically been far more likely to vote than young people.

Turnout assumptions are making a large difference at this election as there is a massive divide between the generations. According to the latest YouGov poll, those aged 18-24 favour Labour by 69-12, while those aged over 65 favour the Conservatives by 66-16.

For Labour to pull off what would be one of the biggest upsets in election history, they need a massive turnout from young people. A five point Conservative lead would probably lead to a hung Parliament, so the more Labour-friendly polls are close to that.

Update Wednesday morning: A new ICM poll has the Conservatives leading by 12 points. However, as noted by UK Polling Report, the lead is only three points before adjustments for historical turnout likelihood among the various demographics.

Some on US right applaud Republican candidate’s assault of journalist

On Friday I wrote that, the day before a by-election, Republican candidate Greg Gianforte assaulted The Guardian’s reporter Ben Jacobs. Gianforte nevertheless won the by-election 50-44, and has been applauded by some on the US right; this attitude is shown by the Tweet and cartoon below.

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The ConversationThe donkey represents the Democrats in the US; an elephant represents Republicans.

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

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

Coalition fails to get post-budget boost predicted by commentariat


Adrian Beaumont, University of Melbourne

After the release of the Federal budget on Tuesday night, much of the political commentariat thought that the budget would be popular, and predicted a lift for the Coalition in the post-budget polls. Graham Richardson in The Australian said the government would “no doubt get a sugar hit from the budget”. The Conversation

All the regular post-budget polls are instead at least 53-47 to Labor, with little change apparent from the pre-budget situation. In Newspoll Labor gained a point, while in Ipsos the Coalition gained two points, leading to different commentary from Fairfax, which sponsors Ipsos, than The Australian, which sponsors Newspoll.

The last Ipsos was 55-45 to Labor in late March; this seemed an outlier at the time. The last Newspoll was 52-48 to Labor three weeks ago, and was probably influenced by the announcements on the citizenship test and 457 visas.

Here is the post-budget poll table. Two separate ReachTEL polls were conducted on 11 May, one for Sky News and one for Channel 7. They are the first public ReachTEL Federal polls since before the 2016 election. Only half of the Essential sample is post-budget, though this week’s additional questions are based on the post-budget sample.

post budget.

The Sky News ReachTEL was reported as 53-47 to Labor, and the Channel 7 ReachTEL as 54-46. However, both these results were based on respondent allocated preferences. To match polls that only give the previous election preferences, I am using Kevin Bonham’s calculated two party vote from the decimal primaries of both ReachTELs. Since the rise of One Nation, ReachTEL’s state polls have leaned to the Coalition, and this lean appears to be happening federally.

While individual budget measures, such as the bank levy and additional Medicare levy, are popular, the budget as a whole gets only a middling rating on a range of measures. Commentary suggesting that the overall budget would be very popular has been shown to be wrong.

While the budget allocated much spending to health and education, voters trust Labor more on these issues. A government that has tried to cut spending for three years, but suddenly has a poll-driven about-face strains credibility. Labor’s fairness criticisms of the termination of the 2% deficit levy for high-income earners, and the now $65 billion for company tax cuts, are likely to be accepted by a large portion of the population.

Kevin Bonham’s poll aggregate is at 52.7% two party preferred to Labor, a gain for Labor of 0.2 points since last fortnight.

Perceptions of this budget

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

45% thought they would be worse off and 19% better off, for a net of -26. 36% thought the economy would be better with this budget, and 27% worse, for a net of +9. Compared with previous budgets, neither of these scores are very bad nor very good.

Coalition governments do better than Labor ones on whether the opposition would have delivered a better budget. In this Newspoll, by a 47-33 margin, voters thought Labor would not have delivered a better budget. This 14-point margin is about the same as the last two budgets, but better for Labor than any budget in the Howard era, except the 2007 13-point margin, which came shortly before Rudd ousted Howard at the November 2007 election.

In other Newspoll questions, 45% said they would be prepared to see a reduction in taxpayer funded entitlements to pay down debt, while 41% thought otherwise. By 39-36, voters thought this budget was fairer than others under this government. As one of those budgets was the widely hated 2014 budget, this is not saying much. By 71-19, voters thought the banks would not be justified in passing on costs from the bank levy.

In Ipsos, by 45-44 voters approved of the budget, and by 42-39 they thought it was fair; these measure are much better for the government than following the 2014 budget. 50% thought they would be worse off with the budget, while 20% expected to benefit. By 58-37, voters supported increasing national debt to build infrastructure.

The Sky News ReachTEL found that 52% thought their family would be worse off with this budget, with just 11% for better off. 36% thought the government had done a good or very good job explaining its budget, 37% an average job and 27% poor or very poor. 34% of non-home owners thought the budget made it harder to buy a home, 13% easier, and the rest said there was no change.

The Channel 7 ReachTEL found that the budget was rated average by 38%, poor or very poor by 33% and good or very good by 29%.

In Essential, voters approved of the budget by 41-33, though 29% said it made them less confident in the government’s handling of the economy, with 27% for more confident. On both questions, the strongest disagreement with the budget came from Other voters, not Labor and Greens voters.

Explaining why Shorten did not mention punitive measures against the unemployed in his budget reply speech, a crushing 76-14 supported payment reductions for jobseekers who fail to attend appointments, and 69-22 supported a drug trial for jobseekers. The second airport in Sydney was supported by 54-18.

By 51-27, voters agreed with the statement that the budget was more about improving the government’s popularity than the economy. 56% thought higher income earners should bear a greater share of the cost of funding the National Disability Insurance Scheme, while 27% thought applying the Medicare levy for all taxpayers is the right approach. Scott Morrison was favoured over Chris Bowen as preferred Treasurer by 26-22 with 52% undecided.

There was strong support for the bank levy (68-21 in Newspoll, 62-16 in the Sky News ReachTEL, 60-18 in the Channel 7 ReachTEL, 68-29 in Ipsos and 66-19 in Essential). The additional Medicare levy was also well supported (54-36 in Newspoll, 48-34 in the Sky News ReachTEL, 51-28 in the Channel 7 ReachTEL and 49-39 in Essential).

Primary votes, leaders’ ratings and other polling

Primary votes in Newspoll were 36% Coalition (steady), 36% Labor (up 1), 10% Greens (up 1) and 9% One Nation (down 1). 33% (up 1) were satisfied with Turnbull’s performance and 53% (down 4) were dissatisfied, for a net rating of -20, up five points. Shorten’s net rating was -22, down two points.

In Ipsos, primary votes were 37% Coalition (up 4), 35% Labor (up 1) and 13% Greens (downs 3 from an unrealistic 16%). 45% approved of Turnbull’s performance (up 5) and 44% disapproved (down 4), for a net rating of +1, up nine points. Shorten’s net approval increased a sizable 13 points to -5. Turnbull’s ratings in Ipsos have been much better than in other polls. Ipsos skews to the Greens, but less this time than in their first two polls of the new parliamentary term.

The Sky News ReachTEL had primary votes of 37.8% Coalition, 34.2% Labor, 10.3% Greens and 10.2% One Nation. In the Channel 7 ReachTEL, assuming the 9.2% undecided are excluded, primary votes are 37.1% Coalition, 35.0% Labor and 10.8% for both the Greens and One Nation.

Primary votes in Essential were unchanged on last week at 38% Labor, 37% Coalition, 10% Greens, 6% One Nation and 3% Nick Xenophon Team.

In the Channel 7 ReachTEL, both leaders’ ratings tanked from the final survey prior to the 2016 election. Turnbull’s (total good) minus (total poor) score fell 18 points to -24, his record lowest, just ahead of Tony Abbott’s ratings before Abbott was replaced. Shorten’s rating was down 17 points to -21, his lowest since March 2016.

38% preferred Turnbull as Coalition leader, followed by 29% for Julie Bishop, 17% for Abbott, 11% for Peter Dutton and 6% for Scott Morrison. Among Coalition voters, it was 61% Turnbull, 18% Bishop and 14% Abbott.

For preferred Labor leader, Tanya Plibersek had 31% with Shorten and Anthony Albanese tied on 26%. Labor voters had Shorten leading with 40%, Plibersek on 33% and Albanese on 20%. Plibersek was strongly favoured by the Greens, with 51% support from them.

Turnbull led Shorten as better PM by 47-35 in Ipsos and 44-31 in Newspoll, but only 52-48 in the Channel 7 ReachTEL. ReachTEL uses a forced choice question, and this method usually benefits opposition leaders.

ReachTEL’s respondent allocation problem

As noted at the beginning of this article, ReachTEL’s respondent allocated preferences are over a point more favourable to Labor than using the previous election method. It appears that some of this difference is explained by ReachTEL asking National voters which of Labor or Liberal they prefer.

This is a mistake, as in most cases the Nationals are not opposed by a Liberal, and so their preferences are not distributed. In the few cases where National votes were distributed, 22% leaked to Labor at the 2016 election. Applying this rate to the 3.5% National vote in the Sky News ReachTEL would mean that Coalition leakage would increase Labor’s two party vote by 0.8 points; the actual Coalition leakage is worth only about 0.1 points to Labor.

Ipsos also asked for respondent allocated preferences, and had Labor ahead by 53-47 on this measure, the same as when using the previous election method.

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

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

Coalition two-party vote slips in post-budget Newspoll


Michelle Grattan, University of Canberra

The Coalition has slipped further behind in Newspoll, trailing Labor 47-53% in two-party terms, despite a pragmatic budget that moved the government onto ALP ground in a bid to win back voters. The Conversation

Labor slightly widened the gap compared with three weeks ago when it led 52-48%. This makes a dozen Newspolls in a row that have seen the government behind the opposition.

The post-budget Fairfax-Ipsos poll also has Labor ahead 53-47%.

The previous Ipsos poll was in late March, when the ALP led 55-45%.

Both polls show majority support for the budget’s tax increases – the new bank tax and the proposed hike in the Medicare levy. The bank tax was backed by 68% in each poll; the Medicare levy rise was supported by 54% in Newspoll and 61% in Ipsos.

In the Ipsos poll, one in two people said they would be worse off from the budget; only one in five believed they would be better off. In Newspoll 45% thought they would be worse off and 19% said they would be better off. In both polls, Coalition voters were more likely than Labor voters to think they would be better off.

In Ipsos people were evenly split on whether they were satisfied with the budget – 44% were and 43% were not, a net plus one. This is better than the response to last year’s budget (minus seven) but not as good as the reception for the 2015 Hockey budget (plus 17).

Ipsos found 42% thought the budget fair, compared with 39% who did not, a net plus three. Last year’s budget rated a net minus six on fairness. Coalition voters were more likely than Labor voters to rate the budget as fair – 63% to 25%.

Newspoll asked whether it was fairer than previous budgets delivered by this government: 39% thought it was, while 36% did not.

Labor’s primary vote in Newspoll, published in The Australian, is up a point to 36%; the Coalition is static on 36%. The Greens rose a point to 10% and One Nation fell a point to 9%. The poll was taken from Thursday to Sunday.

When budgets do not normally bring a bounce for a government – ministers will argue it will take time for positives to show up in the polls – the result will be a disappointment for Malcolm Turnbull, although his personal ratings have improved.

In Newspoll, his net satisfaction went from minus 25 points to minus 20 points in three weeks, while satisfaction with Opposition Leader Bill Shorten declined from minus 20 to minus 22. Turnbull has also widened his lead as better prime minister from nine to 13 points – he is now ahead 44-31%.

In the Ipsos poll, taken Wednesday to Saturday, Labor’s primary vote is 35%, and the Coalition’s is 37%. The Greens are on 13%. Turnbull’s net approval is plus one, up nine points since March; Bill Shorten’s net approval is minus five, up 13 points since March. Turnbull leads Shorten as preferred prime minister 47-35%

The Ipsos poll found the government’s promised A$18.6 billion boost to spending on schools was supported overwhelmingly – by 86%. Some 58% backed increasing national debt to build infrastructure, but 37% opposed.

Treasurer Scott Morrison on Sunday continued his tough language on the big banks, which are furious about the new tax imposed on them.

When it was put to him that he could not stop them hitting customers with it he said: “In the same way that banks have put up interest rates even when there hasn’t been a move in the Reserve Bank cash rate. I mean, banks will find any way they can to charge their customers more.”

He reiterated that the government would pressure the banks through the regulator not to pass on the tax to customers. “But the best thing you can do is if you are unhappy with how a bank is seeking to fleece you – that’s what they would be doing if they pass this on – go to another bank.”

The tax was just six basis points, he said on the ABC. “Reserve Bank cash rates move by 25 basis points at a time and to suggest that this is the end of financial civilisation as we know it is one of the biggest overreaches in a whinge about a tax I’ve ever seen.”

Michelle Grattan, Professorial Fellow, University of Canberra

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

Government out of touch on housing policies ahead of budget: poll


Ben Phillips, Australian National University

Australians are concerned about housing affordability, so much so that 45.4% say they would be willing to see the value of their home stop growing to improve the situation, only 31.8% of those polled wouldn’t. An ANU poll shows 51.7% of Australians are also in favour of removing tax concessions like negative gearing. The Conversation

The poll surveyed 2,513 people (representative of the population) and found 63.6% were willing to see an increase in supply of public housing. Only 32.3% are opposed to relaxing planning restrictions.

With these numbers in mind, it is perhaps surprising that state and federal governments have done so little of any substance in housing policy for decades, if anything they’ve contributed to the problem rather than improved the situation.

Potential policy changes that many believe will improve housing affordability, including removing or reducing tax incentives such as the capital gains tax discount or removing supply impediments, have all been considered too politically difficult by the current government.

The government has justified this by playing to the fear that the value of people’s home may decline or that more liberal planning arrangements may mean that new buildings may spoil the look and feel of local neighbourhoods.

The latest ANUpoll shows Australians are very concerned that future generations may be locked out of home ownership. Three quarters believe home ownership is part of the Australian way of life.

In terms of their own investments we found that nearly 68% of homeowners cite emotional security, stability and belonging as a reason for becoming a homeowner. In terms of security factors, 51% cite financial security, 42% refer to “renting is dead money” and 41% cite security of tenure and being able to “bang nails in the wall”.

Of those families who have an investment property (17% in this poll) the primary motivation for the investment was a “secure place to store money” (27.4%) closely followed by rental income (24.3%). Only 11.9% cited negative gearing as the primary motivator and 13.7% were motivated primarily by the capital gains discount.

Housing remains easily the most popular investment vehicle, with 30% saying their preferred investment for spare cash would be an investment property, followed by 18.5% preferring to upgrade their own home. Only 12.6% preferred shares as an investment.

In spite of recent talk of a housing bubble the general population is not particularly concerned with immediate price drops, with 85% expecting house prices to rise over the coming five years. Only 5.4% expect prices to fall and just 1.7% expect prices to decrease a lot.

If interest rates were to increase by 2 percentage points, 6.4% of mortgage holders expected to be in “a lot” of financial difficulty and 16.7% in “quite a bit”. Only 27.9% would be in no difficulty. While financial difficulty does not mean default, in mortgage markets it may not take a large share of loans to default to cause financial problems for an economy.

As pointed out earlier negative gearing was the least cited reason for property investment which suggests removing the incentive would at least not make a dramatic difference to the level of housing investment in Australia.

The ANUpoll shows that the public are concerned about housing affordability and where policy is directed at improving affordability they are likely to be supportive. The policy options, be they demand side – reducing tax incentives, or supply side – building more dwellings and/or relaxing planning restrictions, are available, but greater political nerve may be required to undertake such options.

Ben Phillips, Associate professor, Centre for Social Research and Methods (CSRM), Australian National University

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

How the politics of the budget might play out for a government in trouble



File 20170505 21635 1hykoj9
This budget, led by Scott Morrison and Malcolm Turnbull, will form part of the government’s repositioning as an advocate of equal opportunity and fairness.
AAP/Mick Tsikas

Carol Johnson, University of Adelaide

Given months of polls that show Labor ahead and damaging internal disunity, the politics of this budget are extremely tricky for the government to manage. The Conversation

It is not just that Tony Abbott’s sniping is causing political headaches for Prime Minister Malcolm Turnbull. Some of the government’s budget problems go back to the 2013 election.

In that campaign, Abbott suggested the budget deficit problems would be easily fixed by simply getting rid of Labor, and the government could somehow do so painlessly without cutting health, education or pensions.

However, as then-treasurer Wayne Swan had noted, Australian budget deficit problems were very complex and included substantial falls in government revenue due to the global financial crisis and the end of the mining boom. They weren’t just due to government spending.

Opponents criticised the size of the Rudd government’s expenditure, including its economic stimulus package designed to counter the GFC. Nonetheless, Kevin Rudd argued that Australian government debt was in fact relatively small compared with many other Western countries in a post-GFC world.

Once he won office, Abbott had to face the difficult realities involved in reducing the deficit. The substantial 2014 budget cuts, including to areas Abbott said would be protected, infuriated many voters and contributed to his poor polls and political demise.

The Abbott government’s woes went beyond the failure to fix a difficult budget situation. Other than attacking Labor, it wasn’t clear what its positive vision for the Australian economy was in terms of how to transition after the mining boom, and how to develop new jobs and new industries at a time of rapid economic and technological change.

Tony Abbott’s sniping continues to cause headaches for Malcolm Turnbull.
AAP/Sam Mooy

Replacing Abbott with Turnbull was meant to provide us with such a positive economic vision. However, Turnbull’s mantra of living in innovative and “exciting times” failed to convince many voters. As one anonymous Liberal MP noted, it actually made some voters highly nervous about what was going to happen to their jobs.

Hence Turnbull turned to promising “jobs and growth” during the 2016 election campaign.

However, the Coalition’s narrow win suggested many voters still weren’t convinced the government knew how to ensure job security and a good standard of living in challenging times. In particular, many voters remained unconvinced that substantial business tax cuts would drive the economic growth and improved government revenues that were promised.

Given current levels of underemployment, unusually low wages growth and with inequality increasing, they had reason to be concerned. There is also international research suggesting that corporate tax cuts don’t have the beneficial results claimed.

Fast forward to the 2017 budget, and the Liberals are desperately trying to develop a more convincing economic narrative around good economic management, nation-building, and fairness.

Despite their attempts to blame past Labor policy and more recent Labor intransigence at passing budget cuts in the Senate, Liberal ministers are still having trouble explaining how government debt has increased from A$270 billion under Labor to some $480 billion under the Coalition.

Fortunately for them, Treasurer Scott Morrison now argues there is “good debt” and “bad debt”. Good debt covers areas such as infrastructure that assists economic growth. Bad debt apparently covers areas such as welfare.

Morrison is partly belatedly accepting advice on infrastructure-funding debt from bodies such as the International Monetary Fund, while trying to argue that the government’s new debt policies will be very different from past Labor economic stimulus ones.

Needless to say, these areas of “good” and “bad” debt aren’t quite as simple to define as Morrison suggests. Furthermore, so called nation-building infrastructure spending is sometimes more electoral pork barrelling than economic necessity. Doubts have already been raised over the economic, rather than political, benefits of a second Sydney airport and inter-capital city rail links.

The NBN: ‘good debt’ or ‘bad debt’?
AAP/Mick Tsikas

Meanwhile, Turnbull struggled to explain whether Labor’s National Broadband Network was good or bad debt in terms of building necessary infrastructure.

Australian businesses that are struggling with Turnbull’s cheaper version, with its continuing use of 19th century derived copper wire technology or 1990s pay-TV-derived hybrid fibre coaxial cable technology may be wondering whether the Coalition should have discovered “good” infrastructure debt earlier and supported Labor’s more expensive fibre-optic to-the-premises model.

After all, under Rudd, the NBN was meant to be the nation-building 21st century equivalent of 19th-century government infrastructural expenditure on building railways.

Consequently, the government faces questions about whether its economic policy positions have been consistent, particularly given past Coalition rhetoric about debts and deficits.

Furthermore, while Morrison apparently characterises it as bad debt, providing temporary welfare benefits for those who lose their jobs because of economic downturns or restructuring helps keep up consumption levels. This in turn means it potentially has flow-on benefits for the private sector, as well as the individuals concerned.

It is a central lesson of the Keynesian economics that Robert Menzies’ Liberal Party embraced at its foundation, but was rejected under John Howard in the 1980s.

Does all of this mean that Turnbull is now acknowledging a lesson of the 2016 election: that neoliberalism is harder to sell than it used to be? Are his backdowns on “small-l” liberal values now being combined with back-downs on some of his long-held free-market values?

That seems to be going too far at present, especially given the government’s continued belief in the “trickle-down” benefits of corporate tax cuts and attacks on welfare expenditure.

However, there is some nuancing taking place as Turnbull tries to throw off the image of “Mr Harbourside Mansion” who loves hobnobbing with bright young technology entrepreneurs, and instead stress he is in touch with the concerns of ordinary voters.

Consequently, and much to Labor’s outrage, the government has now repositioned itself as an advocate of equal opportunity and fairness that supports a Gonski-lite needs-based education funding model.

While the government’s cuts to higher education will still have a negative impact on universities, and particularly students, the measures are less harsh than those in the 2014 budget.

It seems likely there will be some attempt in the budget to assist first home buyers. Various options have been canvassed.

Turnbull has already tried to position himself as taking action on household energy costs by criticising renewable energy costs and ensuring gas reserves. Meanwhile, there are suggestions the government will improve Medicare benefits in an attempt to counter Labor’s controversial “Mediscare” campaign at the last election.

All budgets are about politics, not just economics. But this budget will be even more so. Not all the measures are working out politically. Abbott is already threatening dissension over the impact of the education measures on Catholic schools.

This is a government in trouble. On one side it faces internal disunity and pressure from Labor’s emphasis on reducing inequality and fostering “inclusive growth”. On the other it has One Nation’s mobilisation of race and protectionism to appeal to the economically marginalised.

Then there is Cory Bernardi, the Greens, Nick Xenophon and a host of independents and other groups to consider.

After all, the budget is only the beginning. The next test is getting key measures through the Senate, perhaps even wedging Labor by deals with the Greens, so that the Coalition is in a stronger position to face the next election.

Carol Johnson, Professor of Politics, University of Adelaide

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

Turnbull government aims to distance itself from its predecessor with the 2017-18 budget


Saul Eslake, University of Tasmania

One of the primary objectives of the 2017-18 budget is likely to be to put some distance – politically and in terms of economic policy – between the Turnbull government and its predecessor, that of former Prime Minister Tony Abbott. The Conversation

The Abbott government came to office with a view that any and all public debt was “bad”, and that returning the budget to surplus as quickly as possible was a political and economic imperative. Hence, its first budget emphasised cuts in government spending, including in areas where it had previously promised there would be no cuts.

And it increased taxes, despite having previously promised there would be no tax increases under a Coalition government. The political legacy of those broken promises – and the widespread (and largely justified) perception that those measures were manifestly unfair – contributed to Malcolm Turnbull’s near-death experience at last July’s federal election.

The first budget of the returned Turnbull government will be largely about burying the legacy of its predecessor.

Treasurer Scott Morrison will pronounce the death rites for the so-called “zombie” spending cuts left over from the 2014 budget, which the Senate has refused to pass. According to the Parliamentary Budget Office, these are still contributing almost A$8.5 billion to the improvement in the budget bottom line over the four years to 2019-20 (forecast in last year’s MYEFO). It’s also contributing almost A$43 billion of projected savings over the ten years to 2026-27.

The government will of course be seeking savings from the same areas as were to be affected by these zombie measures. But, as we have seen with the announcements last week regarding universities and schools, the savings sought will be smaller.

In addition, greater attention will be paid to perceptions of “fairness” than was the case with the “zombie” measures. The same is likely to be the case with regard to the health measures to be announced in the budget itself.

The budget will also confirm that the so-called “temporary deficit repair levy” will lapse on 1 July. This was the 2% surcharge on the top marginal personal income tax rate which was the only significant taxation measure actually implemented by the Abbott government.

The foreshadowed distinction between “good” and “bad” debt is another element of the budget’s effort to distance the Turnbull government from its predecessor. For all of Tony Abbott’s efforts to portray himself as the infrastructure prime minister, public infrastructure spending actually declined on his watch.

That partly reflected the Abbott government’s unwillingness to accept the advice of then RBA governor Glenn Stevens, the IMF, the OECD and others, that government borrowing, especially at record low interest rates, to fund well-targeted infrastructure investment was a good thing.

In this year’s budget, the government will foreshadow additional borrowing in order to finance additional infrastructure spending. Some of this will be on projects that would clearly meet Glenn Stevens’ criteria of “appropriate governance” and “appropriate pricing” – such as a second Sydney Airport. Some of it will be on projects which, more likely than not, would not pass those tests.

But the government will seek to quarantine this “good” debt from detracting from its policy and political goal of returning the budget to surplus. It will do this by focusing attention on the net operating balance or difference between revenues and operating expenses – as state and territory governments and the New Zealand government have done in their budgets for decades.

Indeed, by focusing on this measure, the budget might be able to proclaim a return to surplus in 2019-20, a year earlier than projected for the underlying cash balance.

Such an achievement would perhaps allow the government to gloss over the fact that the budget will do far less to address the on-going deterioration in housing affordability, than it had foreshadowed earlier this year.

The proposed bond aggregator will provide a vehicle for community and not-for-profit providers of affordable rental housing to borrow larger sums, for longer terms and at lower interest rates, from the bond markets. This is a welcome initiative for a sector of the housing market that has for too long received too little attention from governments.

But the government is clearly unwilling to contemplate any measures that might reduce the competition which low-income renters increasingly face from middle-income households who are no longer able to afford to become home-owners. That’s in no small part because of the competition which they in turn face from investors who enjoy tax concessions more favourable than in almost any other “advanced” economy.

This competition has seen the share of housing loans going to investors rise from less than 20% twenty-five years ago to almost 50% in recent years.

The only measure which the budget is likely to include as a form of purported assistance to would-be home-buyers – a mooted plan to allow prospective first-time buyers to make pre-tax contributions to a dedicated savings account from which they could later withdraw in order to fund a deposit. It’s only marginally less worse than the idea of allowing would-be home-buyers to draw down their superannuation savings in order to enhance their deposits.

This was a proposal which Prime Minister Turnbull rightly described as “thoroughly bad”. But as a piece of product differentiation from the Abbott government, which did absolutely nothing in the housing arena, it fits with what is likely to be the most important theme of this week’s budget.

Saul Eslake, Vice-Chancellor’s Fellow, University of Tasmania

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