A Labor government would boost schools’ money but how much would it unpick Gonski 2.0?


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Labor has been steadfast in its opposition to the government’s school funding plan.
Mick Tsikas/AAP

Michelle Grattan, University of Canberra

Malcolm Turnbull is on the brink of a major policy victory after the government mustered ten of the 12 non-Green crossbenchers behind its Gonski 2.0 policy.

The outcome of a week of intense negotiation by Education Minister Simon Birmingham means, barring mishap, the government is set to end this parliamentary sitting on a strong note, at least in policy terms. The Coalition remains in a bad place in the polls.

The new model for schools funding will be much closer to the original needs-based one recommended by the Gonski review, the implementation of which was compromised by a plethora of special deals.

In electoral terms, Turnbull hopes the schools policy will at least partly offset Labor’s usual strong advantage in education. But the fight over schools will still be on, because Labor will be promising a big extra boost to funding.

To get its legislation through, the government has shortened the time frame for delivering funding targets from ten to six years; boosted by $A4.9 billion to $23.5 billion the amount of additional money that will be spent over a decade (including $1.4 billion over the next four years); agreed to establish an independent body to oversee the funding; and endorsed a tight arrangement to prevent states lowering their share of school funding.

In a gesture to a deeply agitated Catholic sector, the government will provide transitional money for it next year, while a review is undertaken of the basis for calculating how much parents should be expected to contribute. Some money will also be available for schools that are part of systems in the independent sector.

This is being couched as transition money so that all systems will come under the new model from the 2018 start. The transition money will amount to $46 million, $38 million for the Catholics.

But the Catholics, who benefited from the previous special arrangements, remain angry. The future political implications of this are yet to be seen.

On Wednesday night National Catholic Education Commission executive director Christian Zahra said that commission representatives had just met with Birmingham who “set out the minor changes” he proposed in response to the Catholics’ “very serious concerns”. But the commission’s position hadn’t changed: the bill “still poses an unacceptable risk to the 1,737 Catholic schools across the country” and should be defeated.

The outcome has left the Greens caught badly short, exposed as under the thumb of the powerful teachers union, the Australian Education Union (AEU).

The government negotiated simultaneously with the Greens and the other crossbenchers. But the Greens were split, unable to finalise a deal even though they did most of the heavy lifting in extracting some major changes and additions to the government’s original $18.6 billion plan.

The result is they’re in the worst of positions. They are unable to claim victory in delivering the more needs-based system. But they have raised the ire of some of their supporters for attempting to reach agreement with the government.

As soon as it knew it had the numbers with the other crossbenchers, the government – unsurprisingly – brought on the second reading vote on the legislation in the Senate.

Greens leader Richard Di Natale said he was disappointed the government had stitched up the deal with the other crossbenchers. The Greens had still been negotiating when the second reading vote was called. “We thought those talks were progressing really well when out of the blue, the bells rang,” he told reporters.

He said the Greens were proud that what they did through their negotiations “was to raise the bar”. But they could not support the “special deal” for the Catholic sector, and had wanted more money for disabled children.

The government is relying on getting the votes of Pauline Hanson’s One Nation, the Nick Xenophon Team, Jacqui Lambie, Derryn Hinch, and Lucy Gichuhi.

Labor has trenchantly opposed the government’s package, saying the $18.6 billion is $22 billion short of what schools would have received under the ALP’s policy.

The opposition’s schools spokeswoman, Tanya Plibersek, says a Labor government would keep the parts of the package that “are practical, like an independent schooling resource body”. It would also retain the cuts to elite private schools.

But Labor has not spelled out how a Shorten government would alter the new model it would inherit and fund more generously.

It says Gonski 2.0 is flawed because it entrenches a skew in federal funding towards non-government schools (traditionally funded by the federal government, which is only the minor funder, compared to the states, of government schools). But that doesn’t deal with the issue of how a Labor government would handle the Catholics.

Labor has taken advantage of the Catholic rebellion. The Catholic sector, having lost the old special deals, would be anxious to extract some new ones from an ALP government that had extra dollars to put around.

So, will Labor give the Catholics any undertakings that in power it would rectify the wrongs it alleges the government will do to the Catholic system? If it won’t, what will be the response of the Catholics?

The ConversationIf, after the dust settles from the Turnbull government making the tough changes, Labor broadly accepts the new model as a basis for its own planned funding, it will have a sound policy position but questions to answer about disingenuous claims we have heard from it in this debate.

Michelle Grattan, Professorial Fellow, University of Canberra

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

Australians shy away from Trump but strongly embrace the alliance: Lowy poll



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Donald Trump’s poor popularity has affected the level of trust Australians have in the US, but not their level of faith in the alliance.
Michael Reynolds/EPA

Michelle Grattan, University of Canberra

Fewer Australians are trusting the US to act responsibly in the world, and they have scant regard for Donald Trump – but this is not translating into people losing faith in the American alliance, according to the Lowy Institute’s 2017 poll.

Only 20% have a “a great deal” of trust to act responsibly in the world. This is a big fall from the 40% level in 2011, when the question was last asked.

Overall, 61% trust the US to act responsibly, 22 points lower than 2011. The contrast is stark when attitudes to other countries are compared – 90% trust Britain and 86% trust Germany and Japan. China is trusted by 54%.

The poll found that 60% of Australians say Trump causes them to have an unfavourable opinion of the US, with younger adults and women being especially likely to be unimpressed. Still, this figure is lower than the proportion who said this about George W Bush in 2007.

Despite people’s feelings about Trump, support for the alliance has actually increased six points since 2016 – 77% say it is “very or fairly important” for Australia’s security. Just 29% believed “Australia should distance itself from the United States under President Donald Trump”.

The institute’s executive director, Michael Fullilove, said that while Australians had come to terms with the Trump presidency, the relationship was not unaffected by him. “The president is not popular in Australia. And Australia’s trust in the United States to act responsibly has declined”.

The survey of 1200 people was conducted in March. The release of the results comes a week after Malcolm Turnbull’s parody of Trump at the federal press gallery’s Midwinter Ball. So far there has been no response from Trump.

The poll found considerable suspicion of China, mixed with strong pragmatism.

Some 46% believe it is likely China “will become a military threat to Australia in the next 20 years”. But 79% see China as more of an economic partner than a military threat.

Only one-third (34%) would favour using Australian military forces “if China initiated a military conflict with one of its neighbours over disputed islands or territories”. But 68% favour Australia conducting “maritime operations designed to ensure freedom of navigation in the region”.

The ConversationNearly eight in ten people (79%) are dissatisfied with the direction of the world, but despite the international rise in protectionist and nationalist sentiments, 78% believe globalisation is “mostly good” for Australia.

Michelle Grattan, Professorial Fellow, University of Canberra

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

Pauline Hanson is wrong – we need to include children with disability in regular classrooms


Linda J. Graham, Queensland University of Technology and Kate de Bruin, Monash University

Yesterday, One Nation leader and senator Pauline Hanson suggested it would be better for teachers if students with autism and disability were put in special classrooms.

Hanson used children with autism as an example. She argued that their inclusion in regular classrooms was detrimental to non-disabled students, because “it is taking up the teacher’s time”.

She suggested moving students with disability “into a special class [to be] looked after and given that special attention … to give them those opportunities”.

Do Hanson’s claims stack up?

Hanson claimed that students with disability have a negative impact on their peers. Yet international research shows otherwise. Some research suggests students with disability have no impact on the learning of other students – whether they are present or not.

Other research shows that students appear to benefit from having disabled peers. They develop greater appreciation for human diversity and capacity for positive relationships.

Hanson also claimed that students with disabilities were better served in separate classrooms or schools. Evidence shows the converse is true. Decades of research has concluded that students with disabilities who learn in inclusive classrooms make far greater progress.

For example, students with disabilities in mainstream schools achieve higher grades than their counterparts in segregated schools and classes. They also develop more proficiency in language and mathematics and perform better on standardised tests.

Hanson claimed that students with disabilities take a disproportionate amount of teachers’ time, at the expense of non-disabled students. Yet studies exploring the views of teachers strongly indicate that they perceive inclusion as beneficial and valuable.

Teachers are more likely to feel anxious about their ability to meet their students’ needs and overwhelmingly express a desire for more information and training in order to become better teachers for all their students.

Interestingly, teachers often cite students with autism as a major group with whom they want to improve their skills. Our research shows there are many highly effective strategies that can be used in regular classrooms to achieve this.

In addition, teachers who receive appropriate professional learning about disability and inclusion report feeling more knowledgeable and less stressed.

This points to the importance of providing high-quality education and training for teachers. It also suggests the need for ongoing professional development in the teaching workforce.

Support for students with disability in class

Students with disability are not always well supported in Australian schools, but this does not mean that they are better off in special classes or that “special attention” will lead to opportunity.

In fact, too much individualised support and attention can increase disablement by fostering dependence, reducing the range of learning opportunities, and hampering achievement.

For this reason, it is critical that students with disability are included in the “real world” of school. This is important for them to become socially competent, independent and financially secure adults.

Preparing for life after school

Having desegregated classrooms is also an important step in paving a positive future after school. Inclusive education makes a powerful contribution to creating a more equitable and productive society. This prepares adults with disability for life after school and connects them in the wider community.

Students with disabilities who are educated in inclusive classrooms are far more likely to complete post-secondary education, making them much more capable of engaging in the workforce and obtaining meaningful employment.

Additionally, students with disabilities who attend their local schools are also more socially connected and engaged in their community as adults.

Hanson’s comments were based on anecdotes from conversations with a limited number of teachers. However, there is both established and new evidence that clearly indicates Hanson’s claims are unsubstantiated.

The ConversationMost importantly, when considering the placement of children with disability in the schooling debate, we should focus on both promoting quality education for all kids (regardless of their backgrounds), and providing the tools for a society in which all adults can work, study and interact socially.

Linda J. Graham, Associate Professor in Education, Queensland University of Technology and Kate de Bruin, Researcher in Inclusive Education, Monash University

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

Labor takes a political risk and opposes government’s tougher citizenship legislation



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Peter Dutton says changes to citizenship legislation are a modernisation that would bring Australia in line with other countries.
Lukas Coch/AAP

Michelle Grattan, University of Canberra

The government has finally found an issue it can cast in terms of “national security” on which it can get a fight with Labor.

Bill Shorten usually sticks leech-like to bipartisanship on anything with even a whiff of “security”. But now the opposition has said “enough” on the proposals to toughen the criteria for people seeking citizenship.

In political terms, the question is whether the government can turn this into an effective wedge against Shorten, claiming he is “soft” on citizenship. Labor’s challenge is to keep the debate as one about what are reasonable conditions to place on aspiring Australians.

The government believes it is in tune with the mainstream; its eye to the politics was obvious when Malcolm Turnbull went out of his way to make a statement on the matter at Tuesday’s news conference on his latest energy security initiatives.

“The Labor Party does not value Australian citizenship enough to say, as we do, that it must be more than simply the outcome of an administrative tick-and-flick form-filling process,” Turnbull said. Immigration Minister Peter Dutton invokes national security and claimed Shorten has been “mugged by the left of his party”.

The proposed legislation requires potential citizens to have a higher English proficiency than at present. Additionally, the applicant will need to have lived in Australia as a permanent resident for at least four years (just one at present).

There will be a defined process to assess a person’s commitment to Australian values, helped by the longer residency requirement; people will have to show what they’ve done to integrate into the community.

The immigration minister will acquire the power to override decisions of the Administrative Appeals Tribunal on citizenship, subject to a court appeal.

Labor is opposing the bill as a whole; it wants it referred to a Senate inquiry, and says that then, if it considers there are parts worth supporting, it would ask the government to bring them back in separate legislation.

Aware Labor is treading on potentially dangerous ground, citizenship spokesman Tony Burke is trying to fireproof it. “Don’t lie and pretend something is national security when it is not,” he said.

The opposition is challenging in particular the longer qualifying period and the harder English test.

The government has a case with the former; comparable countries make residents wait between five and eight years before applying for citizenship. It is on more dubious ground on English testing, where the standard is to be raised to “competent”.

This is a level where the person has “an effective command of the language despite some inaccuracies, inappropriate usage and misunderstandings. They can use and understand fairly complex language, particularly in familiar situations.”

Burke pointed out that the questions now asked of those seeking citizenship are in a test “which is written in English. If you can’t speak English, you can’t pass the test.”

He warned the new requirement would “guarantee there will be a group of permanent residents who live here their entire lives and are never invited to take allegiance to Australia and are never able to be told by the Australian government: ‘you belong’. That is a fundamental change in our country.”

While it is desirable, not least for their own benefit, to have aspiring citizens acquire good English, people can also be excellent citizens even though their English language will always be poor. Many of us know people like that.

One motive for upping the English requirement might be fears about inward-looking communities. But insisting on the proposed level of English proficiency makes for a very un-level playing field, discriminating against those from certain countries.

Immigrants should be encouraged to become citizens – surely that is likely to be a positive for national security because it promotes a more unified nation. A “two-class” situation in the migrant/refugee population, where some can’t make the cut because of the language issue, is not what we want.

Dutton dismisses Labor’s concerns about the longer qualifying period and the harder language test.

Possibly wearing a focus group on his sleeve, he says: “The Australian public wants to see an increase in the English language requirement, they want to see people meet Australian laws and Australian values”.

There have been mild concerns in Coalition ranks about people who are about to qualify for citizenship under current rules but will face waiting longer. Dutton has told colleagues to bring him any particular cases.

If the government is playing politics with its citizenship move, Labor will have its eye on what might be opportunities on the ground.

These changes won’t be popular with some in ethnic communities, where Labor seeks votes.

On the other hand, some of those who’ve entered the citizenship tent can be less than sympathetic to aspirants.

The ConversationThe government may get the legislation through regardless of Labor’s stand, via the crossbench. If so, the opposition would have to decide whether it would undertake to alter the law if it won the election, or just move right on.

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Michelle Grattan, Professorial Fellow, University of Canberra

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

Are China and the US destined for war?


Jack Bowers, Australian National University

By 431 BCE, under the leadership of Pericles, Athens had become a formidable maritime power whose empire extended across the eastern Mediterranean region. Its challenge to the supremacy of Sparta, the warrior nation of the Peloponnesian peninsula, was obvious. According to historian and general Thucydides:

Growth of the power of Athens, and the alarm which this inspired in Sparta, made [the Peloponnesian] war inevitable.

Graham Allison’s new book, Destined for War, suggests a modern parallel in a rising power (Athens/China) causing fear in an established power (Sparta/the US) in which the necessary trust in one another is lost, and war becomes inevitable.

But the analogy has its limits. All too often the who, when and how of the next war have been confidently predicted. Very rarely has anyone got it right.

Athens and Sparta exercised power very differently from their analogous contemporaries. Over the four decades before the war, Athens had become the regional muscle, rather more like the US than China, extracting payment for providing security. The Athenians were primarily traders, providing a maritime security envelope while also securing resources for themselves.

Like the Chinese, the Spartans were focused more on maintaining territorial security. Most of the Peloponnesian peninsula was under Spartan control. Their strength came with the land and their exercise of a military regime depended on an often rebellious population of slaves known as Helots.

Athens had transformed its prosperity into a tightly controlled corporate empire. Similarly, today, the US has exerted considerable influence over strategic hotspots. Countries like Australia have effectively outsourced their security risks.

Sparta maintained a looser confederacy of alliances of which less was demanded, and less given. China too has used soft power, offering aid and investment across the Pacific and Africa, buying influence rather than extracting power.

We might see a certain aggressiveness about the US that reminds us of the image of Sparta as a warring nation. But, in fact, Sparta was somewhat insular and inward-looking. China’s expansion might remind us of the growth of the Athenian empire, but Athens had little land and few prospects – it depended on an empire to secure resources, very different from the Chinese situation.

Allison is acutely aware that his analogy to the fifth-century war is a provocation. With his colleagues at the Belfer Center at Harvard, Allison’s Thucydides’s Trap Project has studied 16 significant conflicts from the last five centuries. Twelve of those led to war. The others only avoided war through significant adjustments in the attitudes and postures of both sides.

There is no doubt that China is rising. The GDP of China surpassed the GDP of the US (on purchasing power parity terms) in 2014. By 2019, it will be 20% larger. While the US can only manage a growth rate of 2.1%, China continues to grow by at least 6.5%.

As former Australian prime minister Kevin Rudd once observed, China is experiencing “the English Industrial Revolution and the global information revolution combusting simultaneously and compressed into not 300 years, but 30”.

The fearful West is apt to ignore the considerable internal tensions that China faces. The Chinese Communist Party has a social contract with its citizens: the price of authoritarian rule is to provide economic opportunities for all.

While the vast majority has prospered under its regime, inequality has risen exponentially between China’s urbanised east coast and the rural hinterland. Balancing the forces for social liberalisation on the coast and economic prosperity inland requires withering complexities.

Ironically, as part of the “One Belt One Road” initiative, the Chinese bought the port of Piraeus, the Athenian port that was the axis around which the Athenian empire once turned.

But this highlights China’s distinctly bifurcated view, between a maritime expansion of influence and a new Silk Road, designed to compete with Russia for economic and political dominance in Central Asia. China is a speeding juggernaut, precariously balanced between its international and domestic aspirations.

President Xi Jinping wants to make China great again. Allison’s prescient analysis shows that, despite Xi’s nuanced understanding of China-US relations compared with US President Donald Trump’s infantile floundering on the world stage, the aspirations each has for his country are remarkably similar.

But, unlike the bipolar world of the Ancient Greeks, the international system since the Cold War has been characterised by multipolarity: China, the US, the European Union, Japan, Russia and India each has an opportunity to exercise power more independently, or perhaps interdependently.

Allison’s book makes a fascinating and worthwhile contribution to our understanding of the nature of power as a function of the nation-state.

Through his analysis of the four case studies in which war was avoided, Allison gives us “twelve clues for peace”, including practical examples of how Thucydides’s Trap was avoided. These include insights into the nature of leadership, how power is enacted, the opportunities and entrapments of alliances, and much more.

Thucydides spoke of the motivations of war being fear, honour and interest, and it’s the same today. These motivations come largely from within – they are not imposed by other countries from outside.

The ConversationUltimately, countries go to war when their respective grand strategies – the exercise of power in the world for national interest – become misaligned with the expectations of their respective domestic audiences. That is, the trap for both the US and China is to manage domestic expectations, and to harmonise those expectations with the exercise of international influence.

Jack Bowers, Senior Lecturer, Strategic and Defence Studies Centre, Australian National University

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

Income inequality exists in Australia, but the true picture may not be as bad as you thought



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Wealth inequality remains a problem in Australia, but it is lower now than in the years leading up to the GFC.
Flickr/Sacha Fernandez, CC BY-NC-SA

Roger Wilkins, University of Melbourne

We hear a lot about inequality in Australia but the true picture is much more complicated than the headlines usually suggest.

The data indicate that wealth inequality has grown but is lower now than before the global financial crisis (GFC). And while the personal incomes of the very rich have gone up, overall household income inequality has barely shifted since the start of this century.

Economic inequality refers to the extent to which material well-being differs across people – how rich are the rich, how poor are the poor. But there are different ways to be rich, and different ways to be poor.

Income inequality is about the gap between people with high incomes and low incomes. Wealth inequality, on the other hand, looks at the gap between people with high net worth (for example, a lot of houses, stocks or other assets) and people with low net worth (few or no assets). People could have very similar incomes but be at opposite ends of the scale when it comes to their wealth, for example.

In practice, attention typically focuses on income inequality, although it is also important to consider wealth inequality.

Since 2000-01, there have been three key data sources for examining income inequality in Australia: the Australian Bureau of Statistics’ (ABS) Household Income and Wealth surveys, the Household, Income and Labour Dynamics in Australia (HILDA) Survey that the Melbourne Institute has been running since 2001, and the Australian Taxation Office’s tax records data.

The first two can also be used to examine wealth inequality.

For various reasons, the three data sets do not tell exactly the same story about income inequality trends since the beginning of this century. Nonetheless, there are some key conclusions we can draw.

1. The top 1% got richer, faster – but overall household income inequality has barely changed

The first conclusion is that the personal incomes of the very rich have grown somewhat more strongly than the personal incomes of the rest of the population.

For example, data compiled by the World Wealth and Income Database (WID World) show that the share of income going to the top 1% rose from 7.5% in 2000-01 to 9% in 2013-14.


WID World

Despite this increase in inequality of personal incomes at the top, measures of overall inequality of household incomes (as opposed to personal incomes) show relatively little net change this century.

One way to track this is to look at the Gini co-efficient, a commonly used measure of inequality that ranges from zero to one. Zero means total equality, with everyone on the same income. A Gini coefficient of one means complete inequality, the equivalent of one person having all the income.

HILDA survey data show that Australia’s Gini coefficient was 0.303 in 2000-01 and 0.296 in 2014-15. In other words, it has barely shifted.

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The ABS income survey shows a small increase from 0.311 in 2000-01 to 0.333 in 2013-14, but this increase can be attributed to changes made by the ABS between 2003-04 and 2007-08 to the definition and measurement of income:

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Being a longitudinal study, the HILDA Survey also allows us to consider inequality in incomes measured over longer intervals than one year. Incomes can fluctuate from year to year, and so we may get an exaggerated picture of income inequality if we examine only annual income. Some people who appear poor in one year may in fact have high incomes in other years and so, overall, are not really poor.

The HILDA Survey indeed shows that inequality of income measured over five years is lower than inequality of annual income. However, of some concern is that measures of inequality of five-year income have been trending upwards since the early 2000s — although the increase is very slight.

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2. Wage inequality has increased

While that’s been happening, however, the labour market has become more unequal.

Wage inequality is typically thought of in terms of inequality in earnings per hour worked, while labour market inequality more broadly could be thought of as inequality in total (annual) earnings across all persons in the labour force.

Wage inequality has steadily risen and, moreover, the share of employment that is part-time has risen. Research published last year showed that the higher your pay relative to others, the more likely you are to get a better pay rise.

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On the surface, it is remarkable that the large rise in labour market inequality has not — at least, not yet — translated to large increases in income inequality.

The reasons for this are complex, but an important contributor has been the relative concentration of employment growth in low-income households.

Another potential reason why increased wage inequality has not translated to increases in income inequality is our system of progressive income taxes and transfers. However, this seems largely to not be the case in the 2000s in Australia, since the tax and transfer system actually became less redistributive (was doing less to reduce income inequality) over this period.

So while the tax and transfer system has probably moderated the effects of increased wage inequality on income inequality, it has not completely neutralised it.

3. Wealth inequality grew – but is lower now than in the years leading up to the GFC

In terms of wealth, both the ABS income surveys and the HILDA Survey indicate that wealth inequality grew strongly in the years leading up to the global financial crisis (GFC).

The HILDA Survey, which has collected detailed wealth data every four years since 2002, shows that the wealth required to be in the top 1% of the wealth distribution increased by 140% in real terms between 2002 and 2006. This was a period in which both house prices and the share market were rising strongly.

However, wealth inequality appears to have moderated slightly since the GFC, with the wealth required to be in the top 1% actually 9% lower in 2014 than in 2006. This appears to primarily derive from weaker share market performance. The ASX200, for example, was approximately 20% below its October 2007 peak in late 2014 (and even now is still over 10% below the peak).

Perception and reality

In light of the minimal changes in overall income inequality this century, and the evidence that wealth inequality is lower now than in the years leading up to the GFC, it is perhaps surprising that public perceptions appear to be that inequality is growing strongly.

Income inequality has grown in the US more sharply than it has in Australia.
World Wealth and Income Database WID World

Perhaps also important is that household income growth in Australia has slowed since 2008-09, and indeed has essentially stalled since 2011-12. In part, this reflects slowing wage growth, but also important has been relatively weak growth in employment, and in particular full-time employment.

For example, the forthcoming HILDA Survey Statistical Report will show that, at December 2015 prices, the median “equivalised” household income – that is, household income adjusted for household size – was A$46,031 in 2011-12 and was still only A$46,007 in 2014-15.

The ConversationThis stagnation in average living standards is arguably likely to lead to greater focus on the fairness of the income distribution.

Roger Wilkins, Professorial Research Fellow and Deputy Director (Research), HILDA Survey, Melbourne Institute of Applied Economic and Social Research, University of Melbourne

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

Grenfell Tower fire exposes the injustice of disasters


Jason von Meding, University of Newcastle; Giuseppe Forino, University of Newcastle; J.C. Gaillard, and Ksenia Chmutina, Loughborough University

Decades of gentrification in London and other European cities (including Paris, Barcelona, Rome and Istanbul) have enacted a form of social cleansing. This has pushed away low-income and marginal residents, divided the rich from the poor, and generated inequalities among citizens.

The Hammersmith area, where the Grenfell Tower is located, has been gentrified. This previously working-class area has been transformed into a vibrant middle-class neighbourhood. Just a few residential social housing tower blocks remain.

As a cosmetic measure, the Grenfell Tower was refurbished in 2014. The choice of cladding material that appeared to fuel the fire is now subject to scrutiny, but with no understanding of the social dimensions of the building’s design regulation and safety measures.

Repeated warnings from the Grenfell Tower residents that this was a disaster waiting to happen were ignored.


Grenfell Action Group

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There has been an outpouring of grief and anger from the affected community and beyond and tensions remain high. While certain elements of the media rebuke those seeking to hold the ruling class accountable, it is important to emphasise a simple truth: disasters are socially – and politically – constructed.

Root causes of disaster

Disasters are often misunderstood as “natural”, or simply assumed to be extreme and tragic events.

This view draws on a century-old paradigm that puts the blame on rare and inescapable natural phenomena, an “act of God”, or technological breakdowns that lie beyond the everyday social fabric.

But there is nothing natural about disasters; disasters usually have root causes of vulnerability that we don’t speak about and that reflect the day-to-day make-up of society – inequality, poverty, political ideology, class and power relations.

These root causes are similar in London, New York, New Orleans, Port-au-Prince and Manila – a few of the world’s cities that have been stricken by major disasters in recent times.

The Grenfell Action Group couldn’t have been clearer in its warnings of disaster – this one is from November 2016.
Grenfell Action Group

Disasters as experienced today are often rooted in the historical development of societies. The impacts of colonialism, slavery, military conquest and discrimination based on class, gender, race and religion are visible today.

Billions of people around the world, in both wealthy and less affluent countries, are at this moment suffering under structural injustices. As demonstrated at Grenfell Tower, this is a recipe for disaster.

Structural injustice creates vulnerability

This disaster is quite a shock to British society. Although the contributing sociopolitical drivers (while sometimes not explicitly discussed) are perhaps more visible on this occasion, having struck a centre of wealth and power in London, we need to recognise that injustice lies at the core of almost all disasters.

At the Grenfell Tower and around the world, the poor and the marginalised suffer the most from disasters.

This injustice is not an accident – it is by design. There is no disaster that kills everyone in a particular locality nor one that knocks down all buildings in a single place.

Normally the resources to overcome the impact of natural hazards are available locally. The privileged have access to these resources while those at the margin do not.

Vulnerability to hazards, and related disasters, therefore mirrors how power and resources are unequally shared within societies. More often than not disasters affect people not because of a lack of knowledge about disasters, but because this knowledge is not applied.

Political decisions also put lives at risk. MP Chi Onwurah summarised appropriately when she wrote:

The residents of Grenfell were poor in a rich neighbourhood. They were those the market rejected, a burden on a borough apparently determined the rich should not pay to lift the constraints of the poor.

The British political class has failed to adequately represent the interests of its most vulnerable citizens for decades. That people are consigned to live in such conditions in a wealthy country is at best a betrayal of the vulnerable by the state. Some would call it criminal. It is not only the Tories who must swallow this bitter pill.

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Cities are battlegrounds

Cities tend to greatly magnify inequality. The Grenfell Tower disaster is a product of a deep societal divide in Britain, where wealth is increasingly concentrated among a small minority.

Gentrification is pushing already marginalised people out of sight and out of mind. This kind of urban development is a boon for housing market profiteers and supports the ruling class agenda, but neglects the needs of the most needy in society. Marginal people become resourceless, invisible to public policies, and disempowered in public life. This increases their vulnerability.

If cities are to reduce the risk of disasters like the Grenfell fire, we must focus on social justice in urban development. The benefits of development or redevelopment should prioritise the have-nots and provide dignity to people regardless of income or background. Cities that are able to provide opportunities for all citizens are also able to appreciate diversity rather than homogenisation.

The ConversationThe Grenfell Tower fire exposes the injustice of disaster, and this terrible moment must be learned from and acted upon. Pushing people to the margins and deeming them worthless is ultimately what causes them to perish.

Jason von Meding, Senior Lecturer in Disaster Risk Reduction, University of Newcastle; Giuseppe Forino, PhD Candidate in Disaster Management, University of Newcastle; J.C. Gaillard, Associate Professor, School of Environment, and Ksenia Chmutina, Lecturer in Sustainable and Resilient Urbanism, Loughborough University

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.

Amazon poses a double threat to Australian retailers



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Amazon is a low-margin retailer sitting on other higher-margin businesses.
shutterstock

David Bond, University of Technology Sydney

E-commerce giant Amazon has struck a deal to acquire Whole Foods Market, an American supermarket chain with more than 400 stores. The move has put even more pressure on Australian retailers as Amazon sets up shop in Australia.

But the real threat to Australian retail lies in Amazon’s business model. It is a low-margin retailer that owns several other highly profitable and fast-growing businesses, such as cloud services. These other businesses can and do cross-subsidise its retail operations.

JB Hi-Fi and Harvey Norman have suggested they will compete with Amazon on price, but given the cost structure of Australian retailers this may not be possible.

Amazon is very lean

While Amazon is extremely large, it is very lean. In 2016 alone, Amazon sold US$94.7 billion of product globally. But the cost of buying (or manufacturing) these products was US$88.3 billion, leading to a gross profit of just US$6.4 billion.

This means the mark-up Amazon puts on its products is very small. For example, in 2016 Amazon’s gross profit margin (gross profit divided by sales revenue) was just 6.8%. JB Hi-Fi had a margin of 21.9%, Woolworths 26.8%, Wesfarmers 31.0%, Harvey Norman 31.4%, Myer 42.1% and Super Retail Group a whopping 43.4%.

But Australian retailers also face high operational costs (wages, advertising, marketing and leases). The two largest, Wesfarmers and Woolworths, both have operating expenses in excess of 24.0% of sales revenue, while Myer, Super Retail Group and Harvey Norman are all around 40.0%. JB Hi-Fi is an outlier at just 16.3%.

Another important measure to consider is the net profit margin. This shows what percentage of each dollar of sales the company ultimately earns after all costs (including tax) are factored in. Net margin is calculated by dividing net profit after tax by sales revenue.

The net profit margins for Australian retailers are, for the most part, quite low – around 2-3%. This means they don’t have much room to move on price. If they drop prices, many will become unprofitable. So even if Amazon doesn’t start a price war in Australia, its business model is such that prices will be extremely competitive.

Amazon has other businesses

Most Australian retailers are only retailers. Some of the larger groups, such as Myer and Wesfarmers, operate across a few industries. But they ultimately still earn nearly all their revenue from buying and then re-selling physical products.

Amazon, on the other hand, has a profitable and booming services business. Its “services sales” represents about US$41.3 billion in sales, or 30% of its revenue. This covers third-party seller fees (Amazon charges other companies for access to its marketplace and warehouses), Amazon Web Services (a fast-growing provider of cloud services), digital subscriptions, advertising services and co-branded credit card fees.

In its 2016 annual report, Amazon reported US$12.2 billion in revenue from Amazon Web Services alone. The scariest thing for Australian retailers is that this has increased four-fold since 2013, and is responsible for nearly 75% of Amazon’s operating profit.

Amazon, then, not only has a large, low-margin online retail offering, but is supported by a fast-growing, high-margin cloud service.

Finding new ways to compete

Most Australian retailers will need to look at other ways of saving costs if they are to remain competitive with Amazon. For example, Coles and Woolworths can put even more pressure on suppliers to reduce their costs. Coles has recently signalled that it will pursue this strategy. And all of our retailers can try to reduce the cost of leases, and shift or reduce staff.

The small margins of most Australian retailers mean reducing prices alone isn’t a viable long-term strategy, especially as Amazon Web Services gains steam and Amazon is profitable in other countries.

Not every retailer will come under the same pressure, though. In the short term at least, groceries are still likely to be purchased in stores. But the same can’t be said of clothing and electronics. This means Woolworths and Wesfarmers should not be as concerned as Myer, Super Retail Group and JB Hi-Fi.

The ConversationThe answer for retailers may be to look past price and compete on other aspects of the shopping experience, such as convenience or customer service. But only time will tell if that’s what the Australian public wants.

David Bond, Senior Lecturer, Accounting Discipline Group, University of Technology Sydney

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