Merged minor parties chase votes on the right as identity crisis grips Coalition



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Cory Bernardi’s Australian Conservatives party has amalgamated with Family First, which shares similar social conservative values.
AAP/Lukas Coch

Zareh Ghazarian, Monash University

Cory Bernardi entered a new phase of his political career by announcing this week that his nascent Australian Conservatives party was to merge with Family First. The Conversation

The merger makes sense. Both parties advance a socially conservative agenda; both have origins in South Australia. And the merger is a savvy response to the changes to the Senate voting system that were introduced in 2016.

Benefits of minor parties merging

The changes to the Senate voting system abolished the group voting ticket. So, parties can no longer make the same preference deals they had in the past.

Merging, however, will provide like-minded minor parties with benefits.

First, they will be able to consolidate their human and financial resources for election campaigns and the party’s day-to-day operations.

Second, by merging into a “super” minor party, they maximise their chances of winning Senate representation: they pool their electoral support.

This sense of electoral fragmentation has been a greater problem for minor parties on the right of the political spectrum. The Greens, after decades of evolution, appear to have consolidated their role as the lightning rod for voters from the left who are unhappy with the choices provided by the major parties.

No such party, however, exists on the right, where myriad minor parties with competing agendas are clamouring for attention.

Social conservatism

The Australian Conservatives and Family First shared similar policies on a range of issues. In particular, they opposed same-sex marriage and abortion, and expressed deep suspicion about the role humans have played in climate change.

Both parties also sought to advance “traditional” family values and have been sceptical of the socially progressive policies promoted by the likes of the Greens.

But their opposition to same-sex marriage contrasts with others on the right of political spectrum – such as Liberal Democrat senator David Leyonhjelm, who supports it.

In 2016, Family First won a national primary vote in the Senate of 1.38%. Its best performance was in South Australia, where Bob Day – who is to be replaced in the Senate by Lucy Gichuhi – won a seat after polling 2.87% of the statewide primary vote. Gichuhi, however, will sit as an independent – not as an Australian Conservatives senator.

Race and immigration

Pauline Hanson’s One Nation made a remarkable return to the Senate in 2016, almost 20 years after it first emerged. Reflecting an approach common to right-populist parties in other liberal democracies, One Nation was deeply concerned about race, migration and religion.

Led by the charismatic Hanson, the party sought to advance the interests of “ordinary” Australians in a political system that it believed was over-run by professional politicians and political elites.

At the 2016 election, One Nation won a national primary vote in the Senate of 4.29%. Its best performance was in Queensland, where 9.2% of the statewide vote garnered it two Senate seats. It holds four seats in the Senate.

Libertarian

In 2013, Leyonhjelm led the Liberal Democrats to an unexpected triumph when he won the party’s first seat in the Senate. Since then, he has built a high public profile by advancing his party’s agenda, which focuses on individual liberties and freedoms.

The Liberal Democrats advance free trade, freedom of choice, and winding back the welfare state. The party supports euthanasia, the use of cannabis, and same-sex marriage.

It is also in favour of citizens having the right to own firearms as well as ending prosecutions for victimless crimes, which it describes as illegal but not threatening the rights of anyone else. These include “crimes” such as abortion, public nudity and the consumption of pornography.

However, Leyonhjelm differs from One Nation’s positions on some economic issues. For example, he supports cuts to weekend penalty rates and the privatisation of state assets – in contrast to One Nation’s opposition to both of these measures.

In 2016, the Liberal Democrats won 2.17% of the national vote in the Senate. Leyonhjelm held onto his seat after winning 3.1% of the statewide vote in New South Wales.

Liberal-National Coalition

While the minor parties mentioned above are advancing specific policy agendas, the major right-of-centre force appears to be grappling with internal divisions about the direction of its policies.

The belief that One Nation, Family First and the Liberal Democrats are chipping support off the Coalition has prompted some MPs to agitate for the party to promote more socially conservative policies. Former prime minister Tony Abbott has continued to advocate for the Liberal Party to shift to the right.

As a major right-of-centre force, however, the Liberal Party risks alienating socially progressive voters who have supported the party in the past. And the sense of a growing threat from minor parties on the right may be overstated.

As the electoral performances demonstrate, these minor parties were successful in 2016 thanks primarily to the double-dissolution election making it easier to win seats in the Senate. These parties would struggle to have as much success under the new electoral system at an ordinary half-Senate election.

Notwithstanding these elements, Prime Minister Malcolm Turnbull’s recent announcements of changes to citizenship laws suggest the Coalition leadership is responding to demands of the right from within the partyroom. Whether these will be enough to placate those seeking greater shifts to the right remains to be seen.

Zareh Ghazarian, Lecturer, School of Social Sciences, Monash University

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

Budget to distinguish good and bad debt


Michelle Grattan, University of Canberra

The government will highlight in its May 9 budget a distinction between “good” debt, incurred to boost growth, and “bad” debt, used to finance welfare and other recurrent spending. The Conversation

Treasurer Scott Morrison will say in a speech to business economists on Thursday that while previously all debt, whether for capital or recurrent purposes, has been lumped together, in this budget it will be linked to spending.

This “will make clearer the share of expenditure that is contributing to investment that increases productive capacity and produces future income and the debt that is being incurred to deal with everyday expenditure”.

The budget will also assign the level of government debt across portfolios. “We all need to understand what is driving the growth in our public debt and we need to budget in a way that creates accountability for increasing public debt and the interest payments that go with it,” Morrison says in his speech, released ahead of delivery.

The government is beginning the process of changing the spending culture, he says. “Portfolios will be held responsible for the debts they are incurring for future generations as a result of their expenditure.

“At the same time we will be providing room for common sense decisions to invest in our economy, by utilising our balance sheets to support investment that boosts growth and the jobs and wages that depend on that growth.”

On the latest figures net federal government debt in this financial year is estimated at A$317 billion.

Net debt is projected to peak at 19% of GDP in 2018-19 and then decline over the medium term.

The government remains committed to budget repair and its first priority for that remains controlling growth in spending, Morrison says.

“It is not sustainable for Australia to continue to finance our recurrent expenditure by borrowings.

“Australians understand taking out a mortgage to pay for their home is a wise investment for their future. But they also know that putting your everyday expenses on the credit card is not a good idea. It doesn’t end well.

“That is basically the difference between good and bad debt. The same is true for government.

“It can be very wise for governments to borrow, especially while rates are low, to lock in longer term financing and invest in major growth producing infrastructure assets, such as transport or energy infrastructure. But to rack up government debt to pay for welfare payments, Medicare costs or other everyday expenses, is not a good idea.

“This is a critical part of ensuring that government lives within its means.”

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Michelle Grattan, Professorial Fellow, University of Canberra

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

Turnbull expects to meet Trump next week


Michelle Grattan, University of Canberra

Malcolm Turnbull has flagged he expects to meet US President Donald Trump in New York next week, although late Tuesday his office said the government was still waiting for the formal invitation. The Conversation

The occasion is the 75th anniversary of the Coral Sea battle.

Speaking at the Al Minhad Air Base in the United Arab Emirates during an Anzac commemoration trip that included Iraq and Afghanistan, Turnbull said he looked forward to discussions with Trump “at an early opportunity”. “We’ll be making announcements very shortly about that,” he said.

Turnbull would only make the visit for the Coral Sea anniversary if it provided an opportunity for his first face-to-face meeting with Trump. Even though it would be brief, the timing is awkward – he would be overseas only days before the crucial May 9 budget.

Turnbull, who has had talks with senior administration figures in the past few days, is anxious to get a first-hand feel for Trump.

During his visit to Australia at the weekend, US Vice-President Mike Pence briefed Turnbull on the new administration’s defence and foreign policy assessments, as tensions ramp up with North Korea.

Pence also reaffirmed the US would honour the deal to take refugees from Manus Island and Nauru, while again making clear Trump’s dislike of the agreement the Australian government forged with the Obama administration. Trump expressed this displeasure forcefully in his now-notorious phone conversation with Turnbull earlier this year.

While in Kabul, Turnbull had the opportunity for talks with US Defence Secretary James Mattis.

Asked at his news conference whether Australia needed to do more in the Middle East region, Turnbull said that in both the Afghan and Iraq theatres “there is going to need to be a long-term commitment”.

“But it is one of supporting, above all of training, the Afghan and Iraqi security forces, both military and police, to ensure that they have the ability to defend their own country, to push back the terrorists where they’ve made gains, and to secure the territory that the government is holding.”

He said that as the situation evolved “we’ll consider requests for further support”.

The government on Tuesday announced humanitarian and stabilisation help for Iraq worth an extra A$110 million over three years. This brings to more than $530 million Australia’s humanitarian help for Iraq and Syria since 2014.

During his trip Turnbull met both Iraqi Prime Minister Haider al-Abadi and Afghan President Ashraf Ghani.

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Michelle Grattan, Professorial Fellow, University of Canberra

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

The real reason Scott Morrison is playing down the budget


Phil Lewis, University of Canberra

Despite the Treasurer, Scott Morrison, describing the federal budget as “not a centrepiece”, it has always been regarded as just that – the centrepiece of fiscal policy in Australia. The Conversation

Any changes in federal taxes and expenditure are intended to achieve good outcomes for Australia’s economy, such as low unemployment, price stability and economic growth. In economic terms, government spending should increase and tax receipts fall during downturns in the economy, and the opposite should happen when the economy is booming. This is how the government is able to balance out cycles in spending by the private sector.

Importantly, the budget is made up of more targeted fiscal policies (referred to as “discretionary” by economists) as opposed to automatic processes (referred to as “stabilisers”). The distinction between the two is important.

Automatic processes refer to when government taxes and expenditure generally increase and decrease with the business cycle. They are automatic because these changes in taxes and spending occur without the government having to do anything.

For example, when the economy is growing strongly, employment increases and unemployment falls. This results in unemployment benefit payments to workers, who were previously unemployed, automatically decreasing.

Also, when the economy is expanding, expenditure and incomes for workers and for businesses rise and the amount the government collects in taxes increases. When economic growth slows or becomes negative, the opposite occurs: the amount the government collects in taxes will fall and expenditure on unemployment benefits will rise.

With more targeted fiscal polices, the government takes actions to change spending or taxes. But although the budget is the centrepiece, it is not a very effective means of managing the economy.

The government and parliament have to agree on changes in fiscal policy. The treasurer initiates a change in fiscal policy through the budget in May each year. This must be passed by both houses of federal parliament, which can take many months (some measures have been blocked by the Senate for much longer).

Even after a change in fiscal policy has been approved, it takes time to implement. Suppose, for example, that parliament agrees to increase spending on infrastructure to create “jobs and growth”. It will probably take several months or more to prepare detailed plans for construction projects.

State or territory governments will then ask for bids from private construction companies. Once the winning bidders have been selected, they will usually need time to organise resources, including hiring labour, in order to begin the project.

Only then will significant amounts of spending actually take place. This delay may well push the spending beyond the end of the low point in the economy that the spending was intended to counteract.

Indeed, if the economy has recovered by the time the construction and related jobs come on board then the government spending will mean a shortage of labour in other parts of the economy and few or no new jobs (unless shortages are filled through migration).

Because the budget is a very difficult means of carrying out targeted fiscal policy, it’s become more important as a centrepiece for the government to set out its broad economic strategy – its goals and how to achieve them. But it seems that both major parties are failing even with this goal.

In recent years the view of most economists has been the need to reduce the structural budget deficit and the level of government debt. In 2016-17 net government debt stood at A$326 billion, and was forecast in last year’s budget to increase until at least 2018-19. There is also quite widespread acceptance that our tax system is in need of reform.

There are two glaring omissions from recent federal budgets of both major parties: any plan to significantly reduce the deficit any time soon, and any proposal to embark on meaningful tax reform.

The Rudd and Gillard governments will be remembered for Wayne Swan’s budgets, which consisted of new spending initiatives including the National Disability Insurance Scheme, the National Broadband Network, and the Gonski education funding reforms, but featured no plan to raise revenues to fund them and manage the huge subsequent debts.

Joe Hockey and Tony Abbott’s attempt in the 2014 budget to address government deficit and debt was regarded as a disaster, resulting in the demise of both as leading politicians. Morrison and Prime Minister Malcolm Turnbull are desperate not to make the same mistake, and this severely limits their capacity to do anything meaningful to tackle the deficit and debt issue.

The major problem with successive budgets is that they have not provided a cogent strategy for improving living standards, including addressing inequity for the most disadvantaged Australians, which can only be achieved through economic growth.

Growth entails taking materials, labour and capital to produce goods and services of greater value that people want at prices they are willing to pay. This is best done by the private sector and cannot arise from wasteful government expenditure, accumulating debt or fiddling at the edges with markets, through such things as changes to superannuation or housing finance.

Growth and jobs can only arise from value-adding activities and government policies which facilitate this such as reducing debt, promoting free trade, reducing restrictions on business and labour market reform. This is hard to do and far more difficult than easy options, which explains why we can expect little from the budget to address real reform.

Phil Lewis, Professor of Economics, University of Canberra

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

How Dutton comes out of dispute about Manus claim goes to the question of character


Michelle Grattan, University of Canberra

Peter Dutton has put his credibility in the frame by sticking to his claim about the role of an incident involving a young boy in triggering the Manus Island disturbance that saw Papua New Guinea defence personnel fire shots at the detention facility. The Conversation

Dutton’s well-publicised but strongly disputed allegation will be tested by the investigations being done by the PNG defence and police authorities, while Senate estimates in a few weeks should also provide a chance to probe it.

Dutton is a former policeman, which is just one reason why he should be held to the highest standards of accuracy in making a claim.

How Dutton comes out of this dispute about facts is particularly important, because it goes to the character of the conservative Liberal from Queensland who is touted as a possible future leader.

In notable contrast to the obvious tensions between Malcolm Turnbull and Treasurer Scott Morrison, the prime minister and his immigration minister are walking in lockstep. Dutton is at the heart of Turnbull’s attempt to win voters’ support with tougher policies on foreign workers and citizenship.

When Dutton last week was asked on Sky what he knew about the Good Friday violence he said: “There was difficulty, as I understand it, in the community. There was an alleged incident where three asylum seekers were alleged to be leading a local five-year-old boy back toward the facility and there was a lot of angst around that, if you like, within the local PNG community.”

Pressed on why there was this angst, he said: “Well because I think there was concern about why the boy was being led, or for what purpose he was being led away back into the regional processing centre. So I think it is fair to say that the mood had elevated quite quickly. I think some of the local residents were quite angry about this particular incident and another alleged sexual assault.”

But Manus Province police commander David Yapu rejected this version. He told Fairfax the boy, who he said was aged about ten, had been given fruit in the centre about a week before the violence.

“Then Wilson Security had to intervene and get him out from the centre. That had nothing to do with the latest incident involving soldiers,” Yapu said. “The child incident is unrelated.”

Earlier Yapu was reported to have said the soldiers’ drunken rampage was retaliation following a clash between navy personnel and asylum seekers who were playing soccer in the navy base.

When it was put to Dutton on Sunday that what he’d said wasn’t true, he retorted: “It is true. And the briefing that I’ve had is particularly succinct and clear … I can give you the facts in relation to it or you can take the Twitter version.”

Reference to “the Twitter version” was an obvious attempt to denigrate the alternative account. But that alternative came in the form of direct quotes from a local police commander.

Dutton told interviewer Barrie Cassidy that “there are facts that I have that you don’t”. Pressed on the source of his information he said: “I have senior people on the island. We also have obviously significant contacts with the governor and people of Manus.”

Let’s hope that the evidence-gathering speedily produces “the facts”, whether those facts contradict or back Dutton.

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Ministers should not be allowed to slip away from taking responsibility – as former immigration minister Morrison did over his wrong claims against Save the Children personnel. On the other hand, if Dutton is so certain he’s got the right story, he has every interest in seeing the proof out in public to back it.

Meanwhile at the weekend US Vice-President Mike Pence reiterated that the Americans will stick by the deal the Turnbull government did with the Obama administration to take refugees from Manus Island and Nauru. But Pence didn’t miss the opportunity to again register the Trump administration’s unhappiness with the deal. The honouring “doesn’t mean we admire the agreement,” he told his news conference with Turnbull.

Pence cast the honouring in firmly alliance terms: “The decision to go forward I think can rightly be seen as a reflection of the enormous importance of the historic alliance between the United States and Australia,” he said.

“And whatever reservations the president may have about the details of agreements reached by the prior administration, we’ll honour this agreement, out of respect for that enormously important alliance.”

The firm message-behind-the-message seemed clear: don’t forget we’re doing you a big favour.

Newspoll postscipt

Labor leads the Coalition 52-48% in Newspoll, compared with 53-47% three weeks ago. The Coalition’s primary vote remains at 36% in the poll, published in Monday’s Australian, while Labor has slipped from 36% to 35%, and the Greens from 10% to 9%. Pauline Hanson’s One Nation remains at 10%.

Malcolm Turnbull’s net satisfaction has improved from minus 29 points to minus 25; while Bill Shorten’s net satisfaction has gone from minus 22 to minus 20.

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Michelle Grattan, Professorial Fellow, University of Canberra

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

Pence visit reassures that the US remains committed to the Asia-Pacific


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Mike Pence and Malcolm Turnbull meet at Admiralty House in Sydney.
AAP/Jason Reed

Tony Walker, La Trobe University

Viewed through the lens of a traditional relationship between close allies, all might have seemed well as US Vice-President Mike Pence and Prime Minister Malcolm Turnbull sprinkled emollient words on a media contingent gathered on the lawns of Sydney’s Admiralty House. The Conversation

Ferries traversed Sydney Harbour in the background, yachts tacked back and forth, and the sun shone. But that pastoral scene hardly shielded a troubled world beyond, and one that is weighing on the US alliance.

In the age of Donald Trump and “Trumpism” – defined by its unpredictability – Pence’s mission was to reassure an alliance partner the US remained committed to an Asia-Pacific presence, and America’s relationship with Australia in particular. Pence put it this way:

I trust that my visit here today on my very first trip the Asia-Pacific as vice-president of the United States and the president’s plans to travel to this region this fall are a strong sign of our enduring commitment to the historic alliance between the people of the United States of America and the people of Australia.

Importantly, from Turnbull’s perspective, Pence put his imprimatur on a refugee deal that would see asylum seekers on Nauru and Manus Island resettled in the US subject to severe vetting.

The plain vanilla former Indiana governor and long-term congressman – polar opposite of the flamboyant Trump – did a reasonable job in his efforts to calm concerns that might be held about a new administration’s commitment to the region.

His message was similar to those delivered on previous stops in Japan and South Korea. America would stay the course, and it would stand with its allies against threats to regional security. If anything, it would act more assertively in seeking to preserve Asia-Pacific peace and stability.

Pence made no reference to the previous administration’s “pivot” to Asia, or its commitment to broaden engagement in the region via diplomatic means. If there is a defining characteristic of the new White House in its early months, it is that the threatened projection of American power is back more overtly as a diplomatic tool.

Had former vice-president Joe Biden been standing on the Admiralty House lawns, his words of reassurance to an Asia-Pacific ally would not have been much different. But the context has shifted significantly – and so, too, has the rhetoric.

North Korea’s belligerence, its provocations, its prosecution of a potentially deadly game of bluff, its quirkiness, its threats to launch ballistic missiles against the west coast of the US and as far afield as Australia, all are hardly new. But what has changed are the players: or to put it more bluntly, one player in counterpoint to North Korean leader Kim Jong-un.

Trump’s arrival in the White House has added a new layer of unpredictability to a set of circumstances North Korea’s neighbours have lived with for many years – that country’s development of a nuclear weapons capability.

The world might regard Kim as a cartoonish figure. But the reality is that he presides over a country whose firepower could leave swathes of the Korean peninsula in ruins.

More than half-a-century after the end of the Korean war, the Korean peninsula remains on a hair trigger. The South Korean capital, Seoul, is in split-second range of the north’s artillery and missile batteries.

If a response to Syria’s use of chemical weapons against its own citizens provided the first significant foreign policy challenge for a new administration, North Korea’s bombast represents a test of a different order.

No responsible public official can afford to ignore such threats, whatever judgements might be made about that country’s endless displays of brinkmanship.

Speaking of brinkmanship, America’s allies would be foolish not to recalibrate their own expectations of American behaviour under a Trump administration. In this regard Australia is – or should be – no exception.

While Turnbull might have emphasised his fealty to the alliance, the reality is that the Asia-Pacific – or as Australian officials emphasise these days, the Indo-Pacific (to include India and the Indian Ocean that laps at our shores) – has to accept that regional security increasingly will depend on Chinese engagement, whether we like it or not.

Both Turnbull and Pence made it clear they were looking to Beijing to help lessen tensions on the Korean peninsula and bring North Korea to heel. China has proved reluctant to assert its influence over its neighbour, but indications now are the Chinese accept that it is in their interests to calm the situation.

China has taken several significant steps to put Pyongyang on notice, including turning back coal shipments.

If Chinese and US pressure proves able to calm current tensions – and even bring about a freeze on North Korea’s nuclear ambitions – this may come to be regarded as an historic moment in regional security. It may also be a possible forerunner to the development of more formalised regional security arrangements.

American media reported that Pence’s visit to Australia and other regional countries was prompted partly by concerns in Washington that relations needed to be smoothed to combat reservations about the Trump administration’s commitment to the region.

Trump’s decision to pull the US out of the Trans-Pacific Partnership agreement, his criticisms of China so-called “currency manipulation”, his threats to launch a trade war with China, his description of efforts to combat global warming as a “Chinese hoax”, and other intemperate statements have rattled traditional allies.

If the American embassy in Canberra had been paying attention to local media it would have reported back to Washington that there is a groundswell of opinion in Australia that would like to see the country reposition itself between its traditional ally and its most important economic partner.

Influential voices, including those of former foreign minister Gareth Evans, have been calling for less “reflexive” support for US policies. Opinion polls indicate the majority of Australians have a poor regard for Trump.

Whatever Pence and Turnbull may have said on that sun-filled day on the shores of Sydney Harbour, the world is changing fast and with it the context within which Australia interacts with its security guarantor. And perhaps just as importantly, with its principal economic partner.

Tony Walker, Adjunct Professor, School of Communications, La Trobe University

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

Budget explainer: the federal-state battle for funding


Adam Webster, University of Oxford

There seems to be an ever present struggle for a share of the revenue government collects, not only between states but also between the different levels of government. The Conversation

In each year’s budget, the federal government allocates funds for federal programs (such as defence) and for some programs operated at a state level (such as school education, public transport, and hospitals). It has this role because it also collects more revenue from taxpayers than the states.

The reason for this all relates back to (at least in part) the Australian constitution.

The division of power between the federal and state governments

The federal parliament can only legislate (that is, make laws) in certain areas, known as “heads of power”, most of which are listed in sections 51 and 52 of the Constitution. This gives the federal parliament the power to legislate with respect to matters such as defence, external affairs, immigration, invalid and old-age pensions, and marriage.

In contrast, there is no equivalent limit on the legislative power of the states. The states may legislate in any area. However, section 109 of the constitution provides that where there is an inconsistency between a federal law and a state law, the federal law will prevail. In simple terms, this means that if the federal parliament has made a law dealing with a particular matter, state governments are unable to legislate in ways that conflict with the federal law.

The federal government’s control of revenue

The state and federal governments all have the power to collect tax, subject to some exceptions. Notably, section 90 of the Constitution gives the federal government exclusive power over the lucrative revenue streams of customs and excise duties (taxes on goods, such as alcohol, tobacco and fuel).

Until the Second World War, Australians paid income tax to both state and federal governments. However since 1942, the federal government has been the sole collector of income tax.

The federal government has also collected company tax for over 100 years, and the GST since 2000. The states could still collect income tax if they wanted to, but choose not to for political reasons.

Prime Minister Malcolm Turnbull tried to explore the possibility last year of both the federal and state governments collecting income tax, but this was quickly rejected by the states. While the states generate some revenue – for example through gambling, property and payroll taxes and mining royalties – they are unable to collect anywhere near the same amount as the federal government.

This creates a “vertical fiscal imbalance” between the federal and state governments. Conversely, the federal government is in the opposite position: while the federal government collects extensive revenue, its power to spend and directly fund programs is more limited.



The Conversation, CC BY-ND

Testing the government’s power to spend on certain programs

Until recently, the federal government thought it could spend money more or less as it pleased. However, the High Court clarified and restricted the federal government’s power to spend money and limited its ability to fund directly some programs.

Its power to spend was tested in 2012 and 2014 in two legal challenges to the government’s funding of the national school chaplaincy program. Prior to the legal challenges, the federal government had entered into agreements with religious service organisations – such as Scripture Union Queensland – to provide chaplains in schools.

The High Court held that (with some small exceptions) the federal government’s power to spend money is limited to where the authority to spend money is expressly conferred by legislation. The legislation authorising the spending must also be supported by one of the “heads of power” granted to the federal parliament by the constitution.

In the case of the chaplaincy program, the court rejected the arguments that the legislation could be supported by the power in one section of the Constitution to make laws for the “provision of…benefits to students” or by the corporations power in another section of the Constitution. To continue the funding of the national school chaplaincy program the federal government turned to the states for assistance.

How the federal government gives money to the states

Section 96 of the Constitution provides for the federal government to provide a significant proportion of its revenue to the states:

…the Parliament may grant financial assistance to any State on such terms and conditions as the Parliament thinks fit.

This distribution of revenue takes two forms – general revenue assistance (“untied funding”) and payments for a specific purpose (“tied funding”).

The untied funding that states receive from the federal government is largely made up of the money that the federal government collects from the GST. The states can spend this money as they see fit.

However, the passing on of the GST revenue is not unconditional. It’s conditional on the states giving up the collection of a number a number of states taxes.

The complex task of carving up the GST revenue between the states is left to the Commonwealth Grants Commission. The annual process always seems to leave a least one state claiming it should receive a greater share of the pie.

The federal government may also provide funding to the states for a specific purpose. The states have to consent to receiving the funding (which is not usually a problem), but it does mean that the federal government cannot impose programs on the states that they vehemently oppose.

This funding is tied to a particular project, where the federal government provides the funds and the state carries out the project. Grants such as these have been used regularly to fund education and health projects in the states. These specific purpose grants may be conditional on states meeting regular reporting requirements or achieving certain milestones.

Providing funding to the states through specific purpose grants allows the federal government to have great influence on policy areas that have traditionally been within the purview of the states.

The federal system of government created by the constitution divides power between the federal and state governments. While at times this might seem inefficient, it also provides checks and balances on government spending.

Adam Webster, Departmental Lecturer in Law and Public Policy, Blavatnik School of Government, University of Oxford

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

Turnbull talks tough on foreign workers – deer farmers and historians off welcome list


Michelle Grattan, University of Canberra

Whatever the arguments for the changes governing foreign skilled workers announced by Malcolm Turnbull, make no mistake – this is about an embattled government wanting to send a strong political message. The Conversation

One clue was Turnbull’s reference to placing first not just Australian jobs, but “Australian values”. He made mention of “Australian values” both in his Facebook video and his news conference, when announcing the replacement of the 457 visa.

In this context, “Australian values” is itself a value-laden term.

For Turnbull, it was something of a rhetorical juggle, as he acknowledged Australia as an “immigration nation” and noted the many workers “from war-shattered Europe” who helped build the Snowy scheme, while declaring Australian jobs must be filled by Australians wherever possible.

The government has been under pressure over foreign workers from left and right – from Labor (Bill Shorten introduced a private member’s bill to tighten the 457 scheme), as well as from One Nation.

Pauline Hanson was – of course – quick to claim credit for Turnbull’s move.

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A few years ago another federal government on the defensive went to a like place. In 2013, Julia Gillard pledged to “stop foreign workers being put at the front of the queue with Australian workers at the back”.

Labor sources at the time said she was tapping into what they described as the “economic patriotism” embedded in the “battler” view of the world; Labor research had found a strong view among voters that there were available jobs Australians couldn’t get. Attitudes are unlikely to have changed, and the Turnbull government knows it.

For the record, in response to Gillard then-opposition leader Tony Abbott defended the 457 entrants and accused her of “trying to divide Australians”.

It’s unclear precisely how much difference the Turnbull government’s change – cast to sound dramatic but seen by some as mainly a rebadging – will make.

It is scrapping the 457 visa, under which foreign workers are brought in on four-year visas. It will be replaced by a new Temporary Skill Shortage Visa program with two streams. One will provide a two-year visa; the other, a visa for up to four years.

The list of requirements will include applicants having at least two years work experience in their skilled occupation; mandatory criminal history checks; and the capacity for just one on-shore renewal under the short-term stream. The short-term stream won’t provide a path to permanent residency. There will be tightened English language requirements for the medium-term stream.

The government has given no estimate of the expected outcome of the change.

Turnbull said that at present there were about 95,000 457 visa holders. But he could not quantify the likely impact of the new system beyond saying: “Because we are narrowing significantly the number of occupations and we are increasing the qualifications that visa applicants need to have, it is our expectation that all other things being equal you will see a material reduction over time of people working on these temporary visas.”

But “it depends upon all other things being equal … which they are not. It depends on the demands of the economy, emerging skill gaps, changes in the economy.”

It’s worth remembering that 457 visa workers are less than 1% of the workforce.

The present list of 651 eligible occupations has been cut by 216, to 435. Some 268 occupations will be available under the new two-year visa, and only 167 will be eligible for the four-year visa.

The occupations chopped range widely, including jobs as diverse as deer farmer, project builder, betting agency manager, chemical engineer, horse trainer, singer, antique dealer, and bed and breakfast operator.

It’s not clear precisely how judgements were made on some of them, such as commissioned police officer, policy analyst, television presenter, and archivist.

Some of the deletions – such as “historian” and “archaeologist” – are hardly jobs to which an “Australians first” rule should apply. Nor will their exclusion from the list have much impact on the Aussie labour market.

Then again, much of this is definitional. Quite a lot of the deleted occupations could be re-classified to come within the revised lists.

Indeed, Jenny Lambert, from the Australian Chamber of Commerce and Industry, pointed out that the 457s were “rarely if ever” applied to many of the deleted occupations. She suggested that the problem with 457s has been one of public perception rather than the scheme’s operation. “The perception of the program is the biggest issue and we need to reset it,” she told Sky.

The Australian Industry Group’s Innes Willox said that “the 457 visa system was a highly valued program but misunderstandings of its use and exaggerations of its misuse led it to become a lightning rod for anti-migration sentiments”.

Supporting the reforms, Willox said: “The temporary skilled visa program should now be considered as settled without the need for further reviews and disruptive policy change”.

In other words, business’ main preoccupation is that the importation of foreign skilled workers should be taken off the political football field.

That may be wishful thinking. Meanwhile, eyes will be on whether the government puts any squeeze in the budget on the general immigration program, which has been coming under attack from some critics in a housing affordability debate that’s run increasingly out of the government’s control.

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Michelle Grattan, Professorial Fellow, University of Canberra

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