Want more jobs in Australia? Cut our ore exports and make more metals at home


Trucks taking iron ore from mines in Western Australia where it will probably be shipped overseas.
Shutterstock/Inc

Michael Lord, University of Melbourne

Australia could create tens of thousands of new jobs and generate many billions of dollars in export revenues if it turned more to manufacturing metals rather than exporting ore to other countries.

That’s a finding of our report, From Mining to Making, released by the Energy Transition Hub.

As international climate action accelerates, there is a need to produce goods without the carbon emissions. The report describes opportunities for Australia to use its exceptional wind and solar resources to make zero-emissions metals.




Read more:
Australia’s hidden opportunity to cut carbon emissions, and make money in the process


The need for metal

Demand for metals is set to grow, not least because of their importance in nearly all renewable energy technologies. Wind turbines are made from steel, copper and rarer metals such as cobalt and neodymium. Solar panels and batteries use metals including silicon, lithium, manganese, nickel and titanium.

As the global economy tries to reduce carbon emissions we must change the way metals are made. Metal production is energy intensive and accounts for around 9% of global greenhouse gas emissions. Herein lies Australia’s opportunity.

Australia is already a major source of the world’s metal. It is among the top three exporters of iron ore, bauxite, lithium, manganese and rare earth metals.

A small proportion of these metals are refined domestically, but most are shipped overseas in their raw mineral form. For example, we found Australia converts less than 1% of its iron ore into steel.

By exporting raw ores, Australia is selling non-renewable resources at the lowest point of the value chain. Processed metal is worth much more than ore.

Metal needs energy

Many metals are made through electrically-driven processes so we can reduce carbon emissions by switching to cheaper renewable electricity.

One example for this approach is Sun Metals, near Townsville in Queensland. The company built a 125MW solar farm to supply a third of the energy required by its zinc refinery. It is now considering adding wind power and battery storage.

Similar opportunities exist with the production of other metals such as manganese, copper, nickel and rare earths.

Another angle for Australia is to make specialised metal products with higher profit margins. Element 25, in Western Australia, plans to produce high-value manganese metal using an energy-efficient process developed with CSIRO. The company says a 90% renewable energy mix could lower production costs and help it compete with Chinese producers.

Renewable energy could even relieve Australia’s ailing aluminium industry. The owners of three of Australia’s existing aluminium smelters said they were “not sustainable” with current electricity prices. Could cheap wind and solar energy provide a lifeline?

The usual objection is that aluminium smelters need a steady power input, not variable solar and wind energy. But, new technologies enable more flexible operation, allowing smelters to react to market conditions, while relieving pressure on the grid during peaks in demand.

Steel production presents a different kind of problem. It uses so much coal that it accounts for 7% of global emissions. But new steel can be made without coal.

Many steelmakers around the world use an alternative process, called direct reduction, fuelled by natural gas. This technique reduces emissions by about 40% and can be modified to run on pure renewable hydrogen, enabling production of near-zero emissions steel.

At least five companies in Europe are actively pursuing hydrogen-based steel production as part of their efforts to eliminate emissions. So far there are no similar plans in Australia despite this country’s unrivalled wealth of iron ore and renewable resources.

The jobs boom

Zero-emissions metals could become a major export industry. Our report explores a scenario in which Australia could double the value of its iron and steel exports to A$150 billion by converting just 18% of currently mined iron ore into steel using renewable hydrogen.

This would be a welcome boost for the national balance of trade, counteracting any reduction in coal exports due to climate and energy policies among Australia’s trading partners.

Making this amount of zero-emissions steel requires a huge amount of renewable electricity – almost double the total electricity generated in Australia in 2018.

But this demand for renewable energy is part of the point – Australia can do this, most of our competitors cannot due to their greater energy demand relative to land suitable for generating renewable energy.

A successful zero emissions metal industry would bring many thousands of steady jobs, often in regional areas with higher unemployment. It could also support towns such as Portland, in Victoria, and Gladstone, in Queensland, where metal producers are already the chief employer.

The market for zero-emissions metals is likely to be enormous. Until recently, emissions embodied in materials have been neglected. But this is changing, as hundreds of the world’s largest companies commit to reducing the emissions of their supply chains.

For example, car makers Volkswagen and Toyota are aiming for zero-carbon production.

In September the World Green Building Council challenged the global construction sector to ensure all new buildings have net-zero embodied carbon by 2050. Such public commitments are a strong signal to manufacturers everywhere.

Make it happen

Zero-emissions metals could be one of Australia’s most significant new industries of the 21st century.




Read more:
Australia has plenty of gas, but our bills are ridiculous. The market is broken


To make it happen, our report recommends governments acknowledge this opportunity by creating a National Zero-Emissions Metals strategy, committing serious resources to ensure it succeeds. This strategy should identify and evaluate Australia’s best opportunities within the metals sector.

If we don’t do something then, as South Australian Senator Rex Patrick put it, we’ll just continue to “export rocks” and let others reap the benefits from developing technologies to process them.The Conversation

Michael Lord, Zero Carbon Researcher, University of Melbourne

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

Nuance and nostalgia: Labor’s election review provides useful insights and inevitable harking back to Hawke


Frank Bongiorno, Australian National University

The media have been itching for a report that blamed Labor’s defeat on a dud leader. But the Review of Labor’s 2019 Federal Election Campaign, chaired by former Rudd and Gillard government minister Craig Emerson and former South Australian premier Jay Weatherill, is proportionate in the blame it sends Bill Shorten’s way. Shorten’s unpopularity contributed to Labor’s defeat, but there were wider problems that cannot be put down to leadership alone.

The review is a nuanced account of why Labor lost. Its brief explanation for that loss – a combination “of a weak strategy that could not adapt to the change in Liberal leadership, a cluttered policy agenda that looked risky and an unpopular leader” – belies the sophistication of the report as whole.




Read more:
Grattan on Friday: Labor’s post-mortem leaves the hard work still to be done


The document does better than most post-election analysis that has so far come from within the party. Some of this has been so tendentious and self-serving that its value in either explaining what went wrong or in pointing a way forward has been close to nil.

The review suggests that central to the party’s failure was that it did not reassess its approach adequately when Scott Morrison replaced Malcolm Turnbull. Rhetoric that might have made sense when the Liberal Party was being led by “Mr Harbourside Mansion”, as well as proposing business tax cuts, made rather less sense once the “daggy suburban dad” in the baseball cap was in charge.

Labor made too little of the chaos in the Coalition. Instead, the ALP made itself the issue at the election, a kind of government-in-waiting with a target on its back.

University-educated voters in the southern states, when they tuned in to Morrison, might have heard a sound something like the air escaping from a whoopee cushion. And such voters swung to the Labor Party in the election.

But voters in the suburbs and the regions, especially in Queensland, liked what they saw. So did professing Christians, who liked it even more when they saw photos of the devout believer at prayer, right arm pointing to heaven.

Christian voters swung behind the devout Scott Morrison in the 2019 election.
Mick Tsikas/AAP

On the other hand, many voters saw a danger to their already insecure lives in Labor’s multitude of expensive promises – and the taxation changes proposed to pay for them. They believed Morrison when he warned them of the risks of voting Labor.

Then there was coal. The authors of the report do seem to struggle with Adani. Like just about everyone else, they know it’s a financial and environmental mess. But in terms of electoral politics, Adani is radioactive.

Labor suffered in Queensland and the Hunter Valley as a result of its ambiguity, but the authors are silent on what the party could have done differently. If it had been less ambiguous about Adani, it would have needed to take a stand. But what should that stand have been?

The report is insistent that Labor should not alienate progressive and well-educated voters for whom climate change matters a lot and Adani is toxic. But how can it avoid their alienation while also pleasing economically insecure voters in Queensland? Is this simply a matter of finessing one’s language, or do the problems run deeper?

This is perhaps the report’s weakness. It is good at setting out the kinds of dilemmas Labor faces, which the party failed to grapple with at the 2019 election. It bemoans the party’s tendency to become the vehicle for various interests with diverse grievances, at the expense of serving the needs of economically insecure working-class voters. The habit of trying to serve too many masters multiplies policies and increases the complexity of campaign messaging, while undermining the party’s ability to craft a coherent story based on the party’s “core values”.

Yet the report has little to say on what such a narrative would look like or what those core values actually are. We are told the latter include:

improving the job opportunities, security and conditions of working Australians, fairness, non-discrimination on the basis of race, religion and gender, and care for the environment.

But there is nothing much here that would prompt an undecided voter to look to Labor rather than the Coalition, especially if they like the look of the Coalition’s leader better than Labor’s – as most did in 2019.

And then, when the review tries to set out what a “persuasive growth story” might look like, we are treated to the usual history lesson on the Hawke and Keating governments, whose “whole economic strategy” was about promoting “growth, and through it, jobs” (otherwise known as “jobs and growth”). For the Labor Party, it seems, it’s always 1983. We just need to find the winged keel to get us home.

Rather as the Hawke and Keating governments did, the review pushes any idea of redistribution, or of reducing inequality, to the very margins of Labor philosophy and policy. Indeed, the hosing down of such aspirations – modest as they were at the 2019 election – may well help to explain one of the strangest silences in the report: its failure to deal with the role of the Murdoch press.

The Murdoch media didn’t merely favour the government over the opposition. It campaigned vigorously for the return of the Coalition. And it is a vast empire, with a monopoly through much of regional Queensland, for instance. It is hard not to see in the review’s silence on this matter a clearing of the way for a future kissing of the ring of the familiar kind.

Still, there is much that is valuable in the review. There is its frank criticism of the deficiencies in the Labor Party’s strategising and the incoherence of its campaign organisation. There is the news that the party’s own internal data pointed to the possibility of the catastrophe that ultimately occurred – polling outside the party prompted a misreading of the readily available evidence.




Read more:
Why the 2019 election was more like 2004 than 1993 – and Labor has some reason to hope


The review is also particularly good on the damaging effects of Clive Palmer’s massive advertising splurge. And it makes a fair attempt to relate the Labor Party’s problems to wider international trends, such as the decline of trust, the insecurity of working life for many, the crisis of social democracy, and the search for convenient scapegoats – all of which have undermined the position of parties of reform.

Best of all, the review spares us a lot of rubbish about moving the party to the centre, or the right. It does make much of the need for Labor to reinvigorate its appeal to those groups who seem to have been most alienated at the 2019 election.

It recognises – correctly in my view – that Labor’s position on Adani performed unfortunate symbolic work, suggesting to people especially in parts of Queensland “that Labor did not value them or the work they do”.

But when your primary vote in Queensland is tracking at about 25% and you hold fewer than a quarter of the lower-house seats in that state and Western Australia combined, you probably don’t need a review to tell you something has to change.The Conversation

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

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

Grattan on Friday: Labor’s post-mortem leaves the hard work still to be done



Bill Shorten may or may not have been able to beat Malcolm Turnbull, but the review makes it clear the ALP failed to adapt to a new, tactically-astute prime minister.
AAP/Lukas Coch

Michelle Grattan, University of Canberra

The messages for next time from Labor’s 2019 election post-mortem are clear. Have a better strategy. Have a stronger narrative, fewer policies, greater emphasis on economic growth. Have a better leader.

Obvious. Incontestable. Just, as a package, devilishly hard to achieve.

The review by Labor elders Jay Weatherill and Craig Emerson identifies the plethora of reasons for Labor’s unanticipated failure. It doesn’t pull punches and contains sensible recommendations.

But no prescribed remedies can guarantee success, in a game where how the other side operates is as important – and can be more so – than what your side does. And that’s apart from the general climate of the times, these days characterised by uncertainty and distrust.

Political success comes from judgement and planning, but there’s also the lottery element. We’ll never know whether Bill Shorten could have beaten Malcolm Turnbull if he’d still been the prime minister in May. Turnbull would say no. Many of the Liberals who ditched Turnbull would say yes. Everyone would agree with the review’s conclusion that Labor failed to adapt when it suddenly faced a new, tactically-astute Liberal PM.

The review’s release was much anticipated, as though it marks a watershed. It doesn’t. It’s sound, well and thoroughly prepared. But it was never going to say how policies should be recast. It leaves the hard work still to be done, and that will be painful and prolonged.

While there’s been much emphasis on Labor’s big taxing policies, the review stresses they were driven by the ALP opting for big spending.

It says “the size and complexity” of the ALP’s spending promises – more than $100 billion – “drove its tax policies and exposed Labor to a Coalition attack that fuelled anxieties among insecure, low-income couples in outer-urban and regional Australia that Labor would crash the economy and risk their jobs”.

Labor has long believed in both the policy desirability and the political attractiveness of large dollops of money for education and health in particular.

Beyond a certain point, however, the value of ever more dollars becomes questionable, on both policy and political grounds. Is the community, for example, getting the return it should for the funds put into schools over the past decade?

One can assume – and Anthony Albanese is signalling – Labor will throw around fewer dollars next time.

The review doesn’t target the controversial policies on negative gearing and franking credits. But they’ll be watered down or dumped.

Albanese, speaking to the National Press Club on Friday, said of the franking credits policy: “When you’ve got to explain dividend imputation and franking credits from opposition – tough ask”. He recounted talking to a pensioner worried about the policy – although pensioners would have been exempted and she’d never owned a share in her life.

The franking policy should have had a protection built in to avoid hitting genuinely low-income retirees while still catching wealthy people who’d rearranged their affairs to have little or no income. Shorten was advised to change it, but refused. On Thursday he said “were the universe to grant reruns” he would “take a different position on franking credits”.

It will be a lot easier for Labor to deal with these tax measures than with climate policy.

The review says: “A modern Labor Party cannot neglect human-induced climate change. To do so would be environmentally irresponsible and a clear electoral liability. Labor needs to increase public awareness of the costs of inaction on climate change, respect the role of workers in fossil-fuel industries and support job opportunities in emissions-reducing industries while taking the pressure off electricity prices.”

Indeed. The summary just highlights the complexities for Labor in working out its revised climate policy.

Anthony Albanese has already put the policy, whatever its detail, into a framework of its potential for job creation as the energy mix moves to renewables.

It’s part of his broader emphasis on jobs and growth (accompanied by his pursuit of improved relations with business, never again to be labelled “the big end of town”).

It’s possible increasing public worry about climate change could help Labor at the next election, if the government’s response is seen as inadequate. That won’t, however, make it any less imperative for the ALP to have a better pitched policy than its 2019 election one, which was too ambitious, lacked costings, and was conflicted on coal.

This segues into Labor’s problem juggling its “progressive” supporters with its working class suburban base, to say nothing of those in coal areas. Taking one line in the south and another in the north didn’t work. The unpalatable truth may be these constituencies are actually not reconcilable, but Labor has to find more effective ways to deal with the clash.

Notably, the review points to the risk of Labor “becoming a grievance-based organisation”. “Working people experiencing economic dislocation caused by technological change will lose faith in Labor if they do not believe the party is responding to their needs, instead being preoccupied with issues not concerning them or that are actively against their interests,” it says.

This is an important warning in an era of identity politics. But again, Labor is in a difficult position, because its commitment to rights, non-discrimination and similar values will mean it attracts certain groups and has to be concerned with their problems. It’s a matter of balance, and not letting itself become hostage.

Grievance politics, looked at through a positive lens, is a way of identifying wrongs and injustices and seeking to rectify them. But it is also in part a reflection of the wider negativity infecting contemporary politics, amplified by today’s media.

That culture can add to the problems of a centre left party trying to sell an alternative.

Labor frontbencher Mark Butler recently noted that on the three post-war occasions when Labor won from opposition, it had immensely popular leaders (Gough Whitlam, Bob Hawke and Kevin Rudd), visions for the nation and superior campaigns.

Whitlam sold a sweeping new program in tune with the changing times. Hawke promoted “reconciliation, recovery and reconstruction”. Rudd was welcomed as a fresh face embracing concern about climate change. Albanese has boldly dubbed a series of his speeches (the first already delivered) “vision statements”. But “vision” is an elusive elixir, apparently harder than ever to come by.

Winning from opposition is a struggle for Labor. This makes it crucial to have a leader who can both reassure and inspire swinging voters. Unfortunately out-of-the box leaders don’t come often; in reality, a party has to work with what it has got.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

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

Australia’s drought relief package hits the political spot but misses the bigger point


Lin Crase, University of South Australia

There are two basic components to the Morrison government’s latest A$1 billion package response to the drought affecting large parts eastern Australia. One part involves extra subsidies to farmers and farm-related business. The other involves measures to create or upgrade infrastructure in rural areas.

Unfortunately, most funds will be misdirected and the response is unlikely to secure the long-term prosperity of regional and rural communities. This is a quick fix to a political problem, appealing to an important constituency. But it misses the point, again, about the emerging economics of drought.

Hitting the political target

The bulk of the A$1 billion package is allocated to a loan fund. The terms of the ten-year loans are more generous than what has been offered in the past. They are now interest-free for two years, with no requirement to start paying back the principal till the sixth year.

Farmers will be able to borrow up to A$2 million. In addition, loans of up to A$500,000 will also be available to small businesses in drought-affected towns.




Read more:
Government sets up concessional loan scheme for drought-hit small businesses


Because recipients are not having to pay the full cost, these loans are in practice a form of subsidy.

Subsidies are used by government to make more people undertake an activity than would otherwise be the case. In this case the government is offering a subsidy to keep farmers and small businesses owners doing what they’ve been doing, even though from an economic point of view this might not be very wise at all.

The question that should be asked is: “do we want more or fewer people to be involved in a farming activity that is vulnerable to drought?”

Most farming in Australia is completely reliant on rainfed crops and pastures. Rainfall is already highly variable. All the indicators from climate science is that rain will be even more unreliable in the future.




Read more:
The science of drought is complex but the message on climate change is clear


In addition, the agricultural industries currently drought affected are not just at the whims of rainfall. These industries are constantly changing and being affected by new technologies and market forces.

For most agricultural produce the key market force is price. Sure, some farms and farmers can carve out niche markets, but most farm businesses depend on producing at lowest cost. Increasingly, the farms that survive in a highly competitive global environment do this by exploiting economies of scale. Big farms are thus more profitable than small ones in the good times (such as when it rains); and during the tough times (such as during drought) they have more resources and deeper reserves to ride it out.

Ultimately, this means successful farms are continually getting bigger and small farmers are getting squeezed out.




Read more:
Just because both sides support drought relief, doesn’t mean it’s right


The data also support the view that the farmers who survive and are simultaneously exposed to drought ultimately become even more profitable, because of what they learnt about managing in a difficult environment.

This is not to argue drought is a good thing for any farm, but it does raise a serious question about any government policy that effectively encourages more people to keep doing something when global and technological forces would point to it being unsustainable.

So what’s the point?

The second component of the Morrison government’s relief response involves directing about A$500 million from existing regional infrastructure funds into building roads and other things into affected communities.

While many will welcome this on top of the the extension of loans to small business in country towns, the policy detracts from the serious questions that confront rural and regional communities.

The economics of agriculture has flow-on effects to towns, but it would be wrong to think all are impacted in the same way.




Read more:
Helping farmers in distress doesn’t help them be the best: the drought relief dilemma


As a general rule, when farmers sell up, they tend to leave from the small communities first. The upshot is that small communities get smaller, older and poorer as those least mobile are left behind. These people also generally require more, not less, public support. Mid-size communities tend to level out, while continuing to age. Large regional centres tend to grow and prosper.

The point is that each community requires different things from government. Genuine public goods like roads, health services and education are desperately needed and undersupplied in many cases. Providing cash to a few select businesses and grading a gravel road in this situation belies the complexity of the long-term challenges and fails to address serious issues.

An elderly retiree in a rural town might well ask why their local road or bridge is only upgraded during a drought. Surely, government should focus on providing legitimate public goods for the long term, regardless of the weather.The Conversation

Lin Crase, Professor of Economics and Head of School, University of South Australia

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

Government sets up concessional loan scheme for drought-hit small businesses



The business drought loans will be up to $500,000, and include a two-year interest free period.
AAP/Dan Peled

Michelle Grattan, University of Canberra

The government will provide concessional “drought loans” for small businesses dependent on agriculture, as well as improving the terms of loans under the existing scheme for farmers, in a package approved by cabinet on Wednesday.

Measures to be unveiled on Thursday also include hundred of millions of dollars of direct investment into communities.

The initiatives come after intense pressure on the Coalition to do more for those hit by one of the country’s worst-ever droughts, with Scott Morrison very sensitive to how the issue is playing not just in the regions but among metropolitan voters.

Costings were still being finalised late Wednesday but sources said the package was worth more than $500 million.

The business drought loans will be up to $500,000. They will include a two year interest free period and interest only payments for years three to five, with interest and principal repayments in years six to ten.

Those set to benefit would include harvesting and shearing contractors, carriers, stock and station agents, and businesses dealing in agricultural equipment and repairs.

Businesses not directly linked to the farming sector – such as the local hairdresser or newsagent – would not be eligible.

The loans will be made through the Regional Investment Corporation – a Commonwealth body – with a small business defined as one with 19 or fewer employees.

The loans will be available immediately and no legislation is needed.

The improved terms for farmers loans will be see up to two years interest free, interest only payments for years three to five, and interest and principal payments for years six to ten. The current arrangements are interest only for the first five years and principal and interest for the rest of the 10 year loan.

The former co-ordinator-general for drought, Stephen Day, told the government that concerns had been constantly raised with him about the survival of small businesses in areas in drought.

Morrison said these businesses had been forced to seek overdrafts or other finance.

“Rural communities can’t function without these small businesses – that’s why we’re stepping in to provide this extra support,” he said.

The government says its planned extra direct investment will flow into projects that boost local businesses and jobs.

Six more local government areas will be added to the Drought Communities Program, at a cost of $6 million, and another $122 million will be available for the 122 local councils which have already received support of $1 million each.

The program funds infrastructure and local activities. An extra $50 million discretionary fund will support additional councils when needed. But this will be after a review of the program early in the new year.

Some $200 million will be redirected from the Building Better Regions Fund to set up a Special Drought Round, providing up to $10 million per project in local government areas.

Supplementary payments will be made under the Roads to Recovery program for 128 local government areas in drought for upgrades and maintenance. This is a re-purposing of $138.9 million.

Drought minister David Littleproud said the federal package was not linked to any requirement for state funding, which would have carried the risk of the states not matching the money. But he called on state governments to provide some relief on rates and payroll tax.

“We’re going to cut the cheque and we’re going to get the money out, because that’s what these local economies need now. They need stimulation …. We’re not going to play politics, we’re going to get on with the job and deliver, and hopefully the states will complement us with things like rate relief and also payroll tax”.

Deputy Prime Minister Michael McCormack said: “This suite of measures go to the heart of what matters to these communities. From small businesses to primary producers, we are working with communities to take the pressure off one of the worst droughts in history.

“Not only is the government continuing to respond as the drought progresses, but we are working on measures to assist in the recovery when the rains come, which includes the government’s billion dollar investment in water infrastructure.”

Agriculture Minister Bridget McKenzie said: “I know our farmers and our communities are doing it really tough right now but despite the current drought Australian agriculture has a bright future”.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

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

Trump could win again despite losing popular vote, as Biden retakes lead in Democratic polls



Despite poor polling and an impeachment inquiry, Donald Trump has a reasonable chance of being elected again.
AAP/EPA/Mark Lyons

Adrian Beaumont, University of Melbourne

A year away from the November 2020 presidential election, Donald Trump has a 41.4% approval, 54.6% disapproval rating with all polls in the FiveThirtyEight aggregate. His net approval is -13.2%, down 0.8% since my October 10 article.




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Trump’s ratings slightly down after Ukraine scandal as Warren surges to tie Biden in Democratic polls


With polls of registered or likely voters, Trump’s approval is 42.4% and his disapproval 54.6%, for a net approval of -12.2%, down 0.7% since October 10.

In the FiveThirtyEight tracker, 47.5% support actually removing Trump from office by impeachment and 45.7% are opposed (47.4-44.7 support four weeks ago).

On October 31, the Democrat-controlled House officially voted to begin an impeachment inquiry by 232-196. As I said previously, while the house will very probably impeach Trump, the Senate is very unlikely to reach the two-thirds majority required to remove him.

In national general election polling against the three leading Democrats, Trump trails Joe Biden by 10.2% in the RealClearPolitics average (7.4% on October 10). He trails Elizabeth Warren by 7.3% (4.5% previously) and Bernie Sanders by 7.9% (5.2%).

How the Electoral College could save Trump again

To win the presidency, a candidate needs at least 270 Electoral College votes. The 538 total Electoral Votes (EVs) are apportioned winner-takes-all by state with two minor exceptions. Each state’s EVs is the sum of its house seats (population-based) and senators (always two).

While Trump’s national ratings and general election match-ups are poor, a poll of the six closest 2016 Trump states gives him a real chance. In this Siena College poll for The New York Times of the states of Michigan, Wisconsin, Pennsylvania, Florida, Arizona and North Carolina, Trump trails Biden by two points overall, is tied with Sanders and leads Warren by two.

In 2016, Trump won these six states collectively by two points. Despite losing the national popular vote by 2.1%, Trump exceeded the magic 270 Electoral Votes when he won Wisconsin by 0.8%, so the difference between the national vote and the “tipping-point” state was 2.9%.




Read more:
US 2016 election final results: how Trump won


Trump’s 2016 win was a result of strong backing from non-college educated whites, who make up a large share of the population in the mid-west. This poll suggests Trump’s support is holding up with non-college whites. The Democratic vote could be more inefficiently distributed than in 2016.

I do not believe there will be an eight-point difference between the national vote and battleground states, which this poll suggests when compared with current national polls. The Siena poll was taken October 13-25, a better time for Trump nationally. It may also be Republican-leaning.

US economy still good

In the September quarter, US GDP grew at a 1.9% annualised pace. The US reports its quarterly GDP rates as if that quarter’s GDP was the rate for the whole year. To convert to Australian-style GDP rates, divide by four, which means US GDP grew almost 0.5% in the September quarter. This growth rate is moderate. In the June quarter, GDP was up 2.0% annualised.

In the October US jobs report, 128,000 jobs were created and the unemployment rate was 3.6% (up 0.1% since September, but still very low historically). The participation rate increased 0.1% to 63.3% and the employment population ratio was steady at 61.0% – matching September’s highest since December 2008.

In the year to October, hourly wages grew 3.0%, while inflation increased 1.7% in the year to September, so real wages increased 1.3%.

These two economic reports are good news for Trump. If the economy was all-important, Trump would be a clear favourite for re-election. But Trump’s general behaviour has angered many who might otherwise have voted for him based on economic factors.

Trump will need the economy to stay strong until November 2020 to have a realistic chance. It is likely a weak economy is the only thing that would shake Trump’s support with non-college whites.

Biden retakes lead in Democratic polls

Three weeks after the October 15 Democratic debate, Biden leads with 29.7% in the RealClearPolitics average of national Democratic polls, followed by Warren at 20.8%, Sanders at 17.8% and Pete Buttigieg at 6.7%. Nobody else has more than 4%. In the past four weeks, Warren has lost votes to Sanders and Buttigieg, owing perhaps to her difficulties with the Medicare for All policy.

We are now three months away from the first Democratic contest: the February 3 Iowa caucus. In Iowa, Warren has 22.3%, Buttigieg has surged to 17.0%, Biden has 15.7% and Sanders 15.3%. In New Hampshire (February 11), the one poll conducted since the October debate gives Sanders 21%, Warren 18%, Biden 15% and Buttigieg 10%.

Two recent polls in Nevada (February 22) give Biden an eight or ten point lead over Warren. Biden still has a large lead in South Carolina (February 29).




Read more:
US Democratic presidential primaries: Biden leading, followed by Sanders, Warren, Harris; and will Trump be beaten?


The next Democratic debate will be held November 20 with qualifying criteria increased from October; nine candidates have qualified so far. The qualifying criteria will be increased again for the December 19 debate; five candidates have qualified for that debate.

UK general election: December 12

After failing to win parliamentary approval for his Brexit deal in time for the October 31 exit date, Prime Minister Boris Johnson won House of Commons backing for a December 12 election on October 29. The European Union had extended the Brexit deadline to January 31 at parliament’s request.

I wrote for The Poll Bludger on October 29 that Labour’s chances of winning will improve if they can make the election a referendum on Boris Johnson’s deal, which has plenty to attack from a left-wing perspective. Leave was helped by being undefined at the 2016 Brexit referendum, now it is defined.

Canada and other elections

I live-blogged the October 21 Canadian election for The Poll Bludger, in which the centre-left Liberals won a second term, but lost their majority. I also covered the Argentine and Polish elections for The Poll Bludger: a centre-left presidential candidate won in Argentina, and the Law and Justice party retained its lower house majority in Poland.

On my personal website, I wrote about the Greens’ surge at the October 20 Swiss election, where a unique system of executive government is used. Also covered: the left-wing Bolivian president was re-elected for a fourth successive term, the far-right dominated Hungarian local elections despite a setback in Budapest, and the far-right surged in German and Italian October 27 state elections.

Australian Newspoll: 51-49 to Coalition

In the latest Australian Newspoll, conducted October 17-20 from a sample of 1,634, the Coalition led by 51-49, unchanged since late September. Primary votes were also unchanged, with the Coalition on 42%, Labor 33%, Greens 13% and One Nation 6%.

Scott Morrison’s net approval was +2, down two points. Anthony Albanese’s net approval was -7, down six points. Morrison led Albanese by 47-32 (50-31 previously). Figures from The Poll Bludger.

This Newspoll was the fourth consecutive Newspoll with the Coalition ahead by 51-49. Newspoll’s lack of volatility probably contributed to the poll failure at the May federal election, but this does not appear to have changed.The Conversation

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

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

Labor’s election post-mortem warns against ‘becoming a grievance-based organisation’



Former minister Craig Emerson and former South Australian Premier Jay Weatherill have pinpointed key weaknesses in Labor’s 2019 election strategy.
AAP/Julian Smith

Michelle Grattan, University of Canberra

The long-awaited ALP campaign review says Labor lost “because of a weak strategy that could not adapt to the change in Liberal leadership, a cluttered policy agenda that looked risky and an unpopular leader”.

“No one of these shortcomings was decisive but in combination they explain the result,” says the report from former South Australian premier Jay Weatherill and former federal minister Craig Emerson.

While it says Labor’s big tax policies didn’t cause the defeat, the size and complexity of its spending plans “drove its tax policies” exposing it “to a Coalition attack that fuelled anxieties among insecure, low-income couples in outer-urban and regional Australia that Labor would crash the economy and risk their jobs”.

Labor failed to “craft a simple narrative” bringing together its policies, the reviews says.

Its analysis is damning while seeking to be positive for the future, at a time when the ALP remains in shock at its unexpected loss and divided and uncertain about the way forward.

Looking ahead, the report says “policies can be bold but should form part of a coherent Labor story, be limited in number and be easily explainable, making them less capable of misrepresentation”.

“Labor should position itself as a party of economic growth and job creation. Labor should adopt the language of inclusion, recognising the contribution of small and large businesses to economic prosperity, and abandon derogatory references to ‘the big end of town’.”

The report’s emphasis on the importance of Labor tapping into economic growth and being attuned to business reflects the direction in which Anthony Albanese has been seeking to take the party since becoming leader.

The criticism of the “top end of town” language is a direct slap at the rhetoric of Bill Shorten.



The Conversation, CC BY-ND

Just ahead of the report’s release, Shorten said in a Thursday statement that “were the universe to grant reruns” he would have fewer campaign messages, put more emphasis on the opportunities provided by renewable energies, and take a different position on franking credits.

He also said he should have promised bigger immediate tax cuts for working people.

Shorten reiterated his intention to remain in politics for the next 20 years.

The report warns that “care needs to be taken to avoid Labor becoming a grievance-based organisation,” saying it “has been increasingly mobilised to address the political grievances of a vast and disparate constituency”.

“Working people experiencing economic dislocation caused by technological change will lose faith in Labor if they do not believe the party is responding to their needs, instead being preoccupied with issues not concerning them or that are actively against their interests.

“A grievance-based approach can create a culture of moving from one issue to the next, formulating myriad policies in response to a broad range of concerns.”

Addressing the swing against the ALP by low-income workers, the report says the party’s “ambiguous language on Adani, combined with some anti-coal rhetoric, devastated its support in the coal mining communities of regional Queensland and the Hunter Valley.”

In contrast, higher-income urban voters worried about climate change moved to Labor, despite the potential impact on them of the opposition’s tax policies.

Labor lost some Christian voters, “particularly devout, first-generation migrant Christians”, but the review does not find that people of faith in general deserted Labor.

The review does not believe Labor’s values – “improving the job opportunities, security and conditions of working Australians, fairness, non-discrimination on the basis of race, religion and gender, and care for the environment – were the problem at the election, and says Labor should retain its commitment to these values.

“Labor’s policy formulation should be guided by the national interest, avoiding any perception of capture by special interest groups.”

As a debate has raged within the ALP on how Labor should reshape its climate change policy, and notably its targets, the report says: “A modern Labor Party cannot neglect human-induced climate change. To do so would be environmentally irresponsible and a clear electoral liability.

“Labor needs to increase public awareness of the costs of inaction on climate change, respect the role of workers in fossil fuel industries and support job opportunities in emissions-reducing industries while taking the pressure off electricity prices.”

The report says that high expectations of victory caused Labor incorrectly to assume it had a stronger campaign machine and better digital capacity than the Coalition. It also led to “little consideration being given to querying Labor’s strategy and policy agenda”.

Following Clive Palmer’s huge advertising blitz, the review urges caps on spending by high wealth individuals. Also, influenced by the scare campaign that wrongly asserted Labor had in mind a death tax, the review said the issue of truth in advertising should be looked at.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

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

Australia is spending less on diplomacy than ever before – and its influence is suffering as a result



Scott Morrison has heavily promoted his government’s ‘Pacific Step Up’, but it hasn’t invested the requisite funds to support the initiative diplomatically.
Darren England/AAP

Melissa Conley Tyler, University of Melbourne

Ten years ago, the Lowy Institute published a report on the state of Australia’s diplomatic capacity that painted a “sobering picture” of overstretched foreign missions and declining resources.

In the words of then-Prime Minister Kevin Rudd, who was quoted in the report:

Given the vast continent we occupy, the small population we have and our unique geo-strategic circumstances, our diplomacy must be the best in the world.

However, since then we haven’t put enough resources into our diplomacy as we should. New research by Asialink at the University of Melbourne published in Australian Foreign Affairs shows continuing under-investment in Australia’s diplomatic capacity, with funding for the Department of Foreign Affairs and Trade (DFAT) now at a new low of just 1.3% of the federal budget.

Still in deficit?

According to Allan Gyngell, the founding director of the Lowy Institute, the reason for its 2009 report, Diplomatic Deficit, was simple.

For Australia to do things in the world, it needs a number of assets. These include the instruments of foreign policy, including the overseas network of posts.

The idea for the report was to go beyond the usual suspects and involve people like business leaders in making the case for diplomacy. It made 24 recommendations, many of which were not specifically about funding. These have mostly been met.

Sadly, the situation is less positive for recommendations that called for additional funding. Since 2013, Australia’s total diplomatic, trade and aid budgets have fallen from 1.5% of the federal budget to 1.3%. In pure dollar terms, this is a fall from A$8.3 billion to A$6.7 billion.

At the same time, the budgets for defence, intelligence and security have ballooned. In the almost two decades since the September 11 terror attacks, the Department of Defence budget has increased by 291%, while the allocation for the Australian Security Intelligence Organisation has grown by 528% and the Australian Secret Intelligence Service by 578%.




Read more:
Methodology: finding the numbers on Australia’s foreign aid spending over time


Lost opportunities

This systematic under-funding of DFAT has run down Australia’s diplomatic capacity to the point that it is under-resourced to confront current foreign policy challenges.

To give an idea of what this means, these are some examples of what Australia’s diplomats do on a day-to-day basis:

  • consular work assisting Australians in trouble with law enforcement, such as visiting them in prison and advocating for fair treatment

  • counter-terrorism cooperation, working with overseas governments to build capacity and help keep Australian travellers safer

  • business promotion of Australian products and services and investment promotion for companies considering setting up operations in Australia

  • networking with influential politicians and business people to try to impact decisions that will affect Australians.

When Australia’s diplomats are asked to accomplish more with fewer resources, they have to cut back what they can do.




Read more:
As Australia’s soft power in the Pacific fades, China’s voice gets louder


Scaling back has a real effect on Australia’s influence. If Australia reduces the scholarships to bring future regional leaders to study in Australia, for instance, they’ll likely study and form bonds elsewhere.

If Australia reduces its investment in Indonesia’s education system, it will be dominated by the country’s other major funder, Saudi Arabia.

When Australia pulls back on its diplomacy, other countries take up the slack.

One impetus for the Morrison government’s much-vaunted “Pacific Step Up” was the realisation that cuts in aid and diplomacy had led to lessened Australian influence in its neighbourhood. In the words of one diplomat I spoke to, “China had been eating our lunch”.

The problem is that the “step up” did not come with increased funding for diplomats, meaning that DFAT’s new Office of the Pacific is being formed by taking staff and resources from other parts of department.

Getting back in black

We recommend an immediate increase in spending on diplomacy, trade and aid to 1.5% of the federal budget. This is closer to the spending of countries such as Canada (1.9%) and the Netherlands (4.3%), though still much lower than the challenging era after the second world war, when Australia was spending 9% of the federal budget on diplomacy, trade and aid.

If nothing else, DFAT should be granted an exemption from the efficiency dividend – an annual funding reduction for government agencies – until its budget rises to a more normal, historical level. This measure, usually levied at 1% to 1.25% of the administrative budget, reached 4% in 2012–13. With DFAT cut to the bone, the focus should be on increasing its budget, not constant cuts.




Read more:
Next government must find Australia’s place in a turbulent and rapidly changing world


The aspirations for our diplomacy must be upgraded beyond the bare minimum. Ten years on from Diplomatic Deficit, Australia must resist the magical thinking that foreign affairs and trade somehow happen by themselves. In the 2009 report, former DFAT Secretary Richard Woolcott is quoted as saying:

I do feel that the Department of Foreign Affairs … has been allowed to run down to a dangerously low level … we can’t go on doing more with less … these sorts of undertakings do need to be properly resourced.

If only this had changed in the last 10 years.


Mitchell Vandewerdt-Holman, a Master of International Relations student at the University of Melbourne, contributed to this report.The Conversation

Melissa Conley Tyler, Director of Diplomacy at Asialink, University of Melbourne

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

India’s not joining the latest free-trade deal which limits Australia’s market access


Pat Ranald, University of Sydney

Australian prime minister Scott Morrison and other leaders involved in the Regional Comprehensive Economic Partnership (RCEP) announced late yesterday that 15 of the 16 countries have finalised the text, and are prepared to sign the trade deal in early 2020.

India is the only one not to join, a joint leaders’ statement saying the country had “significant outstanding issues”. Negotiations will continue in the hope it may join later.

The RCEP now involves Australia, New Zealand, China, Japan, South Korea and the 10 Association of Southeast Asian Nations (ASEAN) countries, covering 2.5 billion people.




Read more:
Arrogance destroyed the World Trade Organisation. What replaces it will be even worse


A lost Indian market, for now, and concerns about corporate power

India’s absence severely diminishes the market access Australia hoped to gain. Australia already has a free trade agreement with ASEAN, and has bilateral free trade agreements with all of the other countries.

India would have been the main area of additional market access for Australian agricultural and other exports.

RCEP negotiations have dragged on since 2012. Much attention has focused on India’s resistance to lower tariffs and emphasised the importance of concluding a major trade deal in the face of US president Donald Trump’s America-first protectionism.

But there is a hidden contentious agenda of non-tariff issues that has influenced India’s decision and could restrict future government regulation by giving more rights to global corporations.

These deserve more public discussion in Australia, and reflect the widely divergent levels of economic development of RECP countries.

A secret deal

As usual, the wording of the RECP deal is secret. The final text will not be revealed until after it is signed.

It’s a process widely criticised by both civil society groups and the Productivity Commission.

This secrecy favours corporate players, which have the most resources to lobby governments.

Leaked documents reveal the industrialised countries, including Japan, South Korea and Australia, have been pushing non-tariff rules that suit their major corporations, similar to those in the controversial Trans-Pacific Partnership (TPP).

These have been resisted by developing countries, which have more vulnerable populations, and wish to preserve regulatory space to develop local industries.

Concern over foreign investor rights

The contested proposals include foreign investor rights to bypass national courts and sue governments for millions of dollars in international tribunals if they can argue a change in law or policy will harm their investment. This is known as Investor-State Dispute Settlement or ISDS.




Read more:
Suddenly, the world’s biggest trade agreement won’t allow corporations to sue governments


Tobacco company Philip Morris used ISDS to sue our government for compensation over our plain packaging law, a public health measure designed to discourage young smokers. Australia won in the end, but at a cost to taxpayers of $12 million.

Most of the 983 known ISDS cases have been taken against developing countries, with increasing numbers against health, environment, indigenous land rights, labour laws and other public interest regulation in both developing and industrialised countries.

RCEP members India and Indonesia have policies to exclude or severely restrict investor rights in new agreements.

ISDS has been reportedly excluded from the RCEP text. India was one of the main opponents of ISDS. We won’t know for sure whether ISDS is still excluded until the text is released after signing.

Other concerns over patents and e-commerce

Even more contentious are proposals that pharmaceutical companies should be given longer patent monopolies on medicines than the current 20 years. This would delay the availability of cheaper medicines, at greatest cost to developing countries.

There are also proposals to extend to developing countries’ rules on patenting of seeds and plants that apply to industrialised countries. This would make it more difficult for millions of small-scale farmers in developing countries to save and exchange seeds with each other as they have done for centuries. They lack the capacity to use the legal system to obtain patent rights and lack the funds to buy patented seeds.

The RCEP also includes an e-commerce chapter that mandates free cross-border data flows for global corporations such as Google and Facebook. This makes it more difficult for governments to regulate them.

For example, if trade rules forbid requirements to store data locally, then national privacy laws and other consumer protections cannot be applied to data stored in other countries.

The recent Digital Platforms report of the Australian Consumer and Competition Commission recommended more, not less regulation of these corporations. That was in the face of scandals about violations of consumer privacy, misuse of data in elections and tax evasion.

Developing countries are also concerned rules favouring the global tech companies will lock in their market dominance at the expense of local IT industry development.

These conflicts between governments have been deepened by national pressures from civil society groups in RCEP countries including Australia. When RECP negotiations were held in Australia in July this year, 52 community organisations, including public health, union, church, environment and aid groups endorsed a letter to the trade minister Simon Birmingham. They asked him to oppose ISDS and longer medicine monopolies in the RCEP, and to release the text for independent evaluation before it is signed.

Show us the deal

Even without India in the deal, the Australian government says it will boost local jobs and exports.




Read more:
Myth busted: China’s status as a developing country gives it few benefits in the World Trade Organisation


But without India, claimed market access gains are marginal for Australia and must be evaluated against the costs of expanded corporate rights and restraints on future government regulation.

That’s why the text of the RCEP deal should be released before it is signed and there should be independent evaluation of its costs and benefits for both Australia and its trading partners.The Conversation

Pat Ranald, Research fellow, University of Sydney

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