The space industry in Australia is currently characterised by many small, independent and disparate enterprises in niche areas. Surviving in an increasingly competitive global market will require collaboration, pooled experience, and teamwork. In addition to the space agency, we need something to galvanise Australian enterprises in the space industry.
But turning new technology into marketable commodities is a risky enterprise. Along that journey, a prize provides the opportunity to gain financial rewards for demonstrated achievement of milestones. It provides context to draw the attention of potential clients to the prospective commodities of Australian space start-ups.
In the model of previously successful prizes in aeronautics and space, Space Prize Australia could drive an Australian space launch – where the satellite, components, launch vehicle, launch facility, operation, ground control station and user applications all come from Australia.
The Great Air Race
On 19 March 1919 the government of Prime Minister Billy Hughes announced a £10,000 prize for the first successful flight from the UK to Australia in an aircraft manned by Australians, for the purpose of “stimulating aerial activity”.
It was known as the Great Air Race, and within five months of the announcement, six groups of former WWI airmen and their aircraft had formally registered to compete in the race.
Four Australians – Captain Ross Smith, Lieutenant Keith Smith, Sergeant Wally Shiers, and Sergeant James Bennett – won the prize:
Smith and his team landed at Fannie Bay Airfield in Darwin at 4.12 p.m. on December 10, 1919 and were instantly mobbed by almost the entire population of just under 1,500. Lieutenant Hudson Fysh, soon to be co-founder of the newly formed Qantas, was the first to greet the four airmen.
Their trip was a bold demonstration of what Australians could do. It connected us to the global economy and community, put Australia at the forefront of global aviation, and provided inspiration and energy for the Australian aviation industry.
The Great Air Race and others like it were the inspiration for more recent prizes, specifically in the space industry.
The Ansari X Prize was initiated in 1996 at a value of US$10 million. It was designed to reward the first non-government organisation to launch a reusable manned rocket into space twice within two weeks. The prize was won in 2004 by the Scaled Composites company led by Burt Rutan.
Of greater significance is that it was estimated to have generated US$100 million in new technologies investments. The winning technology was licensed to the newly created Virgin Galactic, and Scaled Composites was later sold to aerospace and defence firm Northrop Grumman.
With an initial target date of March 31 2018, the Google Lunar X Prize included rewards totalling US$30 million for the first privately funded team to place a spacecraft on the Moon, travel 500 metres and transmit high definition video and images back to Earth.
Interim prizes were awarded, but no team was able to meet the challenge by the deadline. Nevertheless, it is estimated that it generated over US$300 million in investments.
Let’s get started
Space Prize Australia is, at this stage, a proposal: no one has committed the funds. However, it has the capacity not just to galvanise our space industry enterprises, but also to inspire the Australian population broadly – just as the Great Air Race did.
It could start with crowd-funding – so that everyday Australians can have a stake in the Australian space industry – and with philanthropy from wealthier individuals or groups.
State governments may be interested. The states and territories have already demonstrated interest in and commitment to attracting space industry to their cities, and are seeking further opportunities to do so.
It is impossible to say how much could be raised as a prize pool from all those sources. But if it could be announced on 19 March 2019 – the 100th anniversary of the announcement of the Great Air Race – then AU$10m would seem apt. It’s a figure of comparable significance to the £10,000 prize offered in 1919, and would be sufficient to attract several competitive teams.
Space Prize Australia would provide an opportunity for Australian space enterprises to demonstrate their technology, with financial and other support.
The prize would be a means to encourage and facilitate collaboration – potentially with benefits even for enterprises that don’t win.
Opposition leader Bill Shorten has backed down on his controversial declaration on Labor’s company tax policy, announcing a compromise that would allow firms with turnovers under $50 million to keep the tax cut that will be in place at the election.
This would be a 27.5% rate. But companies would not get the rest of the already legislated cut, which eventually takes their tax down to 25% by 2026-27.
The compromise follows a fierce backlash from business and an outcry from some of Shorten’s senior colleagues, after he declared an ALP government would repeal tax cuts for firms with turnovers between $10 million and $50 million.
While that position had support in the opposition’s expenditure review committee, it had not been taken to shadow cabinet.
The shadow cabinet endorsed the new position on Friday morning.
Shorten told a news conference that it had become clear in consultations with business and colleagues “that any proposition to change already implemented tax rates … was creating great uncertainty.”
“I have listened to all of the debate, spoken to colleagues, spoken to business. I now accept that simply stopping at $10 million would have created more confusion and uncertainty and it was not the main game,” he said.
Asked whether he had got things wrong, Shorten said: “You can play all the word games you want, but let me be very, very clear. We have changed our position, we have amended our position because politicians who do not listen, politicians who just simply want to stick on one course of action regardless of all the facts, I do not think that helps anyone.”
Shorten said that as well, on the latest figures from the Parliamentary Budget Office (PBO), “we have also found that the cost of this amendment on company tax cuts is not as great as we thought.”
Shadow treasurer Chris Bowen told the news conference that the position Shorten put on Tuesday reflected what Labor’s expenditure review committee thought at that time could be afforded – before the updated PBO figures.
Compared with the government’s legislated cuts, the Labor position saves $2 billion over the forward estimates and $62 billion over a decade.
An ALP government would have to get its repeal legislation through the Senate, which could be a challenge.
Business remained dissatisfied with Labor.
Business Council chief executive Jennifer Westacott said the decision “has created confusion and will hurt business confidence”.
Labor had “failed to properly listen to the business community’s call to reverse its announcement earlier this week to repeal the tax cuts for business with a turnover of under $50 million. Freezing the threshold at 27.5% for those businesses is actually a tax increase on the 25% rate that has been passed by the parliament”.
The Australian Industry Group welcomed the Labor change but said it regretted Labor remained uncommitted to taking the rate to 25%.
The group’s chief executive Innes Willox said: “We look forward to further discussions with the opposition on tax policy with the aim of a bipartisan commitment to lowering Australia’s corporate tax rate for all businesses to a more internationally competitive rate of 25 per cent over the medium term.”
Finance Minister Mathias Cormann tweeted: “Bill Shorten can’t even perform a backflip properly. Turns out he is still pushing for higher taxes on small and medium sized business putting jobs right across Australia at risk.”
Treasurer Scott Morrison said Shorten “has shown a complete lack of sensitivity to what our economy requires to ensure that people have their jobs and their wages and can plan for their future with confidence.”
It’s a surprising piece of work. Why? Because it avoids the ingrained partisanship that has bedevilled regional policy in Australia.
Put simply, it’s good, rigorous work. It makes recommendations that any smart government, of any political hue, could support.
The report even avoids the landmines surrounding the highly contentious policy of decentralisation – the relocation of city-based public service agencies to the regions. It has sidestepped its most obvious route – a squabble over decentralisation – and instead taken a good, hard look at the big issues confronting regional communities and economies.
Let’s take a moment to recall the politically awkward background to this inquiry. It was launched following Barnaby Joyce’s controversial decision to uproot the Australian Pesticides and Veterinary Medicines Authority from Canberra and relocate it to Armidale, in his own electorate.
A separate Senate committee had already inquired into that decision. Its report (issued a year ago) demonstrated the highly politicised nature of this policy terrain: the majority report, by non-government senators on the committee, firmly rejected the relocation, while the minority report by government senators slammed the entire inquiry as “a political witch-hunt”.
This new inquiry could have traversed the same terrain, with the same outcomes. Certainly, the terms of reference were heavily focused on the issue of decentralisation. But they also invited comment on the overarching wellbeing of regional Australia, and this provided an opportunity the committee members seized.
The committee’s report covers a sweeping range of issues, which is entirely necessary, given the complex interactions between regions and what the committee terms “megatrends” – things like globalisation, population ageing, urbanisation and technological change.
The committee’s recommendations are similarly comprehensive and unapologetically ambitious. The explicit goal is to move beyond the old “roads and rail” approach to regional investment. Instead, it supports strategic (or “catalytic”) investments that build workforce and leadership capacity, cultural capital and infrastructure to support and attract jobs.
The report even elucidates 12 principles of regional development. It’s a sure sign that the committee made a genuine effort to synthesise information from the 196 submissions it received and the more than 100 witnesses at public hearings around the country.
The 13 recommendations are arranged around a central strategy, with six interrelated themes:
building “enabling infrastructure” that supports development
identifying regional development priorities through a national process
extending the fledgling City Deals program to regional cities
giving Regional Development Australia committees more power and resources
developing a proper policy for public sector decentralisation
strengthening regional universities.
I’ll own up to being very pleased that my own recommendation made it onto the list: that the government prepare a white paper on regional Australia. This would elevate regional policy to the same hallowed arena as foreign, defence and security policy.
All of this would be monitored by a new Joint Standing Committee on Regional Development and Decentralisation, to cement parliamentary oversight of the work program.
And what about shifting all of those public sector jobs out of the capital cities and into the regions? This isn’t a new debate. In fact, decentralisation is a recurring theme in regional development, at both federal and state levels.
The practice of governments luring, or pushing, jobs from the corporate and public sectors into regional Australia stretches back to the 1930s. Since then, governments have periodically promised – and occasionally delivered – highly interventionist policies to move labour and capital from the cities to the country.
This inquiry was charged with examining decentralisation, and its report does exactly that, but in an admirably low-key way. Shedding more light than heat, the report insists that decentralisation should only be pursued where it makes sense – that it “should be part of a broader strategy for regional development”. That simple statement is a marked departure from the previous partisan bickering on this issue.
So where does this report leave us? And, more importantly, what does it do for the nearly 9 million Australians who live in regional and rural areas?
The answer is, the committee has laid out a far-reaching and highly practical work program for regional development. If either side of politics took up its recommendations, regional communities might find themselves in a better position to construct sustainable, enjoyable futures.
In the short term, an election is due in the next 12 months and there’s a good chance this report’s recommendations will be cherry-picked for election policies.
But beyond the current electoral cycle, this report gives federal parliamentarians a comprehensive plan for meaningful work over the next decade or more. Here’s hoping they make the most of it.
This is an edited extract of The Knowledge Solution, out July 2 from mup.com.au.
It is a paradox of our modern democracy that we have the conditions and tools to enable our political system to work better than ever before, yet all that seems to be discussed today is its dysfunction.
In this country, people are, for the most part, relatively well educated and prosperous. In theory, that should encourage an interested and alert citizenry. The communications revolution empowers the electorate — or should. So much more information is available and instantly attainable than only a generation or two ago, including tools for monitoring events and debates and thus improving interaction and accountability. Today’s plethora of opinion polls ought to be positive for the process, providing constant feedback to decision-makers about what people think and want, and channels for voters to express their opinions.
Yet much of what should facilitate a smooth-running, engaged political system has helped corrode it. In politics, as in other aspects of life, abundance can be good but excess is often harmful. You can end up with too much of everything, and I think that’s what we’ve got in politics today.
We’re lumbered with what has been dubbed the continuous campaign, and that means, as Hugh Heclo, who was an academic expert on US democratic institutions, wrote in Norman Ornstein and Thomas Mann’s The Permanent Campaign and its Future: “[e]very day is election day”.
The leaders never hang up their high-vis vests. This is debilitating for decision-making because, as Heclo notes, there is a difference between “campaigning” and “governing” — and it is exhausting for the public.
Leaders always have to strike a balance between the time they spend with their feet under the desk and the days their boots are on the road, but things seem out of kilter. The permanent campaign encourages short-termism and puts the focus on the immediate media grab and headlines. It fans the politics of negativity, accentuates the adversarial and makes for hyper-partisanship. And it stretches the patience and concentration of voters.
The modern 24-hour news cycle both enables and fosters the permanent campaign, providing platform and spur. Political leaders have given up previous aspirational talk about “not feeding the media beast”. Tony Abbott tried that (for a nano-second) and it did not work too well. Now they argue that if they leave a gap, their opponents will fill the vacuum. Seeing so much of their politicians close up (and often too personal for comfort) has alienated voters, rather than made them to want to involve themselves in the political process.
The ability always to command attention, when there is so much airtime available, also helps small players turn themselves into minor political celebrities. It’s a sign of the times that as voters have increasingly looked to minor parties, these often come with a personal branding. They have been based around individuals, whose names they have taken — Pauline Hanson’s One Nation, the Nick Xenophon Team (subsequently the Centre Alliance), the (now collapsed) Palmer United Party, the Jacqui Lambie Network. “Name” parties fit this age of celebrity. If they had been born in today’s world, the Australian Democrats might have been “The Don Chipp Party”, after their early leading light (and conveniently shortened to “Don’s Party”).
Far from providing a sophisticated channel of community feedback, constant polling has come to be a whip hand over leaders, especially if they are going through a difficult period. This can restrict their room to breathe — that is, to lead — and it is made for the media’s “horse race” coverage of politics.
It means policy is often framed with an eye to how it will go down in the short term, a point that bureaucrats are forced to take account of in their advice to government. At the same time, polling is used as a tool of advocacy, with special interests commissioning polls that seldom fail to get the results they want and will almost always find a market in the media. With the rise of cheap robo-polls, there is a lot more “junk” polling around.
The professionalisation of politics has been building for decades. It has penetrated everything: ministerial offices, messaging, campaigns, the recruitment of candidates, the operation of interest groups and the explosion of a commercial lobbying industry. The more politics is professionalised, the more “insider” it becomes, in the preoccupation with daily “tactics” and in its gene pool of players.
An increased proportion of parliamentarians comes from the political class, having served as staffers to MPs before preselection. The grip of factions within the parties and the shrinking size of the major parties foster the closed shop, giving a leg-up to the insiders when it comes to preselections.
The well-documented decline in the public’s trust in the political system not only makes governing more difficult, but also puts off potential political recruits. When we turn from excess to deficit, what’s lacking — and has been falling for some time — is this elusive but vital quality of trust, the bedrock of a democracy that’s in top health. A recent paper published by the Grattan Institute, A Crisis of Trust, examines the surge in the minor party vote. It concludes:
Culture and economics are insufficient to explain the rise in the minor party vote. The best evidence is that the rising minor party vote is largely driven by declining trust in government: the growing belief that government is increasingly conducted for the interests of the rulers rather than the ruled.
The matter of “respect” is core. From there we can segue to trust. So if we think about what can be done to improve the situation — recognising that it’s only a limited amount and might be beyond the players anyway — let’s begin with the challenge of politicians winning respect, and go to a very basic level.
Politicians behave badly and — thanks especially to the all-pervasive media and that decision all those years ago to allow the televising of parliament — ordinary people see and hear this, and they hate it. In a March 2018 speech, Australia’s former chief scientist Ian Chubb put his finger on it:
I can see on television the people we employ to work in our interests behave in a way we would not tolerate in our own small children. Sadly at a time when trust is so low, contempt so high, it appears they don’t even try to get better. They seem not to understand that trust is what we give them when they earn it, not what they get because they are where they happen to be.
It was notable that when the March 2018 scandal broke around Australian cricketers cheating in South Africa, commentators and members of the public immediately drew parallels with politics, where there is plenty of “cheating” with the truth. Then there is the cricketers’ “sledging” culture and the politicians’ similar practice.
Malcolm Turnbull told a news conference:
I think there has to be the strongest action taken against this practice of sledging. It has got right out of control, it should have no place … on a cricket field.
But when a journalist interjected, “Doesn’t it happen in parliament?” Turnbull let that pass without responding.
It’s a source of perennial wonderment to me that MPs are aware they are disgusting and infuriating the public by often conducting themselves, especially in parliament, like out-of-control adolescents, but they fail to curb this conduct.
Maybe it is the adrenaline of the chamber. Perhaps it is the pursuit of the parliamentary point. And admittedly, we are all living in a world where “anything goes” a lot more than was once the case. Whatever drives MPs, behaving in a manner that would be unacceptable in almost any other workplace is costly to them and to the political process — and could be easily changed by a bit of collective restraint. Sure, parliament will always have its moments, but chaos and insult-throwing should not be the norm.
This awareness should be extended to entitlements. The rules for these have been tightened in recent years after various scandals, and there is now an oversight body. But there is still an inability to understand the sniff test. The companion who accompanies Foreign Minister Julie Bishop to functions around Australia has been sponsored by the taxpayer to the tune of $35,000 over three years, which is within the parliamentary rules. Yet his assets do not appear on the MPs’ register of interests, as would those of a spouse or partner, because she has not defined him as her “partner”.
Parliamentarians should be paid well and have reasonable entitlements. But they should not try to have things every which way, and the public would respect them more if sometimes they, or those attached to them, put their hands in their own pockets.
Politicians’ reputations would also be enhanced if there were a better balance between partisanship and bipartisanship. It’s hard, made more so by the continuous campaign. But MPs will point out that behind the scenes — in committees, parliamentary special interest friendship groups and the like — there’s quite a bit of constructive working together.
It’s usually a different picture in the public arena. Voters would like to see some acknowledgement from time to time that the other side has had a good idea, and more co-operation on worthy projects. This would not at all diminish robust partisanship on core differences, and would improve the chances of achieving desirable reforms.
Politicians could alter the tone, as I have argued above. And they could better organise their workloads, and those of their offices. I appreciate how ministers have to keep up with the fast news cycle, but do staffers routinely have to be up at 4.30am? Do ministers have to make as many media appearances as they do, especially when often they are repeating the same “lines” that have been issued to them, or answering questions on someone else’s portfolio about which they have no personal knowledge? Is it necessary in non-election times to run around the country quite so much?
Excepting the positions of prime minister and treasurer, the job of most ministers is not bigger than that of a CEO of one of the top Australian companies. I suspect they could pare back their workload and their travel by say, one-fifth, and nobody would be saying they were not working diligently. They might even be more efficient.
When we consider how political parties should change to improve our democratic system, the answers run into vested interests, as well as the nature of modern society. Few people want to join the major parties. It’s not just that they are discouraged by factionalism and the powerlessness of the membership. More fundamentally, they have many other calls on their time, and (except for the truest of believers) organisations such as political parties have gone right out of fashion. When they want to be politically engaged, people nowadays tend to be more interested in specific issues, and limited activism or gestures (such as donating to GetUp), than in committing to what is often the drudgery of party membership.
Nonetheless, the withering of the major parties has dangers. Two examples make the point. It contributes to narrowing the sources from which parliamentary candidates are drawn. And with the ALP rank-and-file now having a 50 per cent say in the choice of party leader, a reduced base which is down to the hard core of that party could tilt the vote towards a candidate who has limited appeal to the broad electorate.
These parties will never be what they once were. But their leaders should try harder than they have for some improvement. Neither Bill Shorten nor Malcolm Turnbull has distinguished himself in this regard. An obvious step is to reduce the factional grip on pre-selections. But this must be genuine: it’s no good having “democratic” pre-selections effectively undermined by branch stacking.
There are other obvious, related, areas for change to improve faith in the system, such as more accountable, transparent and timely disclosure for political funding. Some attention is being given to these and they shouldn’t be particularly difficult.
Much talked about is the decline in the share of votes that major parties get, and the rise of the minors, whether they are born out of an issue (the Greens), or they are fundamentally a vehicle for protest and often based on a “name”. At one level, this can be seen as part of the fragmentation of modern life, that is also reflected in areas as diverse as the media and the industrial relations system. The fall in the vote for the major parties also reflects the “detribalisation” of politics and social mobility. People don’t “inherit” their vote from their parents as so many once did.
While the big parties (including here the Nationals as part of the Coalition) are diminished, we should remember that they are not dead. Federal electors still strongly support them. In the three most recent state elections — Queensland, Tasmania and South Australia — the outcomes were majority governments. For some voters, their decision is a choice between a desire for stability (represented by a vote for a major party) versus the urge to express their disenchantment (through an “insurgent” party).
There is no miracle cure for the lack of political trust that is now such a problem. That reflects not just political behaviour, but the more general cynicism of the times and an absence of faith in government. We seem as a community to be in a more bleak frame of mind than in some other periods. Contrast the mood now with that of the late 1960s and early 1970s, when voters were turning to Labor, optimistic that an ALP government would effect important change. If the polls are to be believed, Labor is well-placed to win the next federal election, but people aren’t thinking of a new government in anything like transformational terms.
Leadership can be an antidote to cynicism, though in contemporary politics perhaps only a partial one. Take the example of Bob Hawke as prime minister. People liked him and related to him, and he to them. And remember the commitment to reconciliation in his “reconciliation, recovery and reconstruction” mantra for the 1983 election.
Voters want both an agreed framework within which the political arguments are conducted, and where possible consensus around some of the paths forward.
The reader might well ask why I am putting the weight for spearheading reform on politicians, rather than, for instance, advocating as the priority that the media get its house in better order. I accept some will see this as a cop out, coming from a journalist. The reason is that I think in practical terms it is a fairly hopeless cause to look to the media as the lead agent of change that will promote trust and put our democracy into healthier shape. The collapse of the old business model in the media industry, fragmentation of the market, the nature of news in the modern world, the celebrity culture — all work against that. But if the politicians took a higher road, at least there would be pressure on the media to follow.
Our democratic system is resilient but under strain. As we view it, the critical thing is not to let cynicism get the better of us.
The insults have been flying thick and fast. Malcolm Turnbull is “Mr Harbourside Mansion”, “Top Hat” Malcolm, “the slick merchant banker”, “the top end of town” man. It is a measure of the unhappiness in the Coalition that not all of these epithets were invented by Labor.
Meanwhile, Bill Shorten is, according to Turnbull, a “sycophant”, a “groveller”, a “man who abandoned workers” while he “tucked his knees under” the table of billionaires like the late businessman Richard Pratt.
The red faces, raised voices and flying spittle that accompany the parliamentary trade in insults are meant to convey passion and spontaneity. But we can be confident the lines have been sorted well in advance.
Turnbull’s insults, for example, made in parliament just recently, largely repeat things he said in February last year when he called Shorten “a social-climbing sycophant” and “would-be tribune of the people”. On the other side, Labor has been seeking to present Turnbull as an out-of-touch Sydney snob from the day he took office.
Do such insults work? We know from the research of Australian political scientists – such as my colleagues here at the Australian National University who produce the Australian Election Study – that elections have become increasingly personalised. Most voters do not comb through policy documents. Rather, they use the party leader as a means of making judgments about the things that matter to them.
So, the Labor Party hopes that, if it can make enough mud stick to Turnbull, it can present him as unqualified to make decisions about the welfare of ordinary people. Being so rich, they suggest, he is out of touch with their concerns.
The Coalition hopes that if it can make its mud stick, Shorten will be seen as a self-serving opportunist who built a union and political career by taking advantage of the workers he was supposed to represent.
There is nothing new here; the appeal on each side is a traditional one.
Labor cartoonists of a previous era would often draw Mr Fat – an obese capitalist – complete with top hat, tails and cigar, the very embodiment of greed and excess. They would sometimes set him beside a brawny, manly worker determined to resist his wiles.
The anti-Labor images of the union boss as a parasite on the working man, and of the Labor politician as self-serving careerist, have existed as long as the Labor Party itself.
Political name-calling and insults are sometimes like water off a duck’s back. But others can stick. The radical Daniel Deniehy’s lampooning of William Wentworth and his followers in 1854 for wanting to create “a bunyip aristocracy” of titled men to fill a colonial upper house was recalled for generations. (Personally, I’ve always thought the funniest jibe was Deniehy’s suggestion that James Macarthur’s coat of arms as “Earl of Camden” should include a rum keg, a reference to his father’s role in the commerce and politics of early New South Wales.)
Paul Keating’s question about an Andrew Peacock leadership comeback – “Can a soufflé rise twice?” – was perfect in every way, as was his designation of Liberal leader John Hewson, “the feral abacus”.
But Keating’s quips went down better with the press gallery and the intelligentsia than the ordinary punter, and he had to endure insinuations that an enthusiast for Italian suits and French clocks could not be a true Labor man.
Bob Hawke, more than Shorten, acquired a large coterie of “close personal friends” among the rich and the filthy rich. But this was probably an advantage in his early days as prime minister, when he talked of consensus between workers and bosses in the national interest. As the feeling developed that his friends were doing very nicely while most others were doing it tough, the term “rich Labor mates” became shorthand for the idea that Hawke and Keating had sold out the workers.
Hawke was “the silver bodgie”, a reference to the colour of his still luxuriant hair, somewhat like that of a 1950s “bodgie”, a stylish youth somewhat in the James Dean mould.
But some of our political leaders have had nicknames that were more distinctly pejorative. The Sydney Bulletin called Australia’s first prime minister, Edmund Barton, “Toby Tosspot”: he had been known as “Toby” much of his life and a “tosspot” was a vulgar term for an enthusiastic drinker.
“Affable Alfred”, for Deakin, was affectionate but could be used by opponents sarcastically when he wasn’t being quite so affable. “Jolly John”, for John Gorton, sounds affectionate, until you recall that it was a reference to his erratic personal behaviour.
“Honest John” – for Howard – was mainly used ironically rather than descriptively. But Howard’s own claim that Kim Beazley lacked “ticker” is usually seen as having worked on voters looking for strong leadership and doubtful the Labor opposition leader could provide it.
Robert Menzies’ critics on the left called him “Pig Iron Bob” after his role, as a member of the Lyons government, in opposing union bans on the shipping of pig iron to Japan. The epithet, which stuck throughout his long career, was intended to remind people of Menzies’ poor judgment and association with the policy of appeasement of the Axis powers. It was a potent rhetorical weapon during the 1940s and even became the subject of radical folksong but, as the years of his prime ministership rolled on after the war, it seemed to do him no obvious harm.
Highly personal assaults can backfire badly. The best example from Australian politics is Country Party leader Earle Page’s savage attack on Menzies in 1939 for failing to enlist in the first world war. Menzies had wanted to serve but already had brothers at the front, so remained behind as the result of a family decision.
Page’s career never recovered from the disgust that his attack induced. That didn’t stop the mischievous Labor firebrand, Eddie Ward, from later joking that Menzies’ brilliant military career had been cut short by the war. It’s a tough place, the federal parliament.
If like most Australians you have an online shopping habit, then as of this Sunday you will likely pay 10% more for any goods you have delivered from overseas suppliers.
The reforms rely on local and overseas businesses and platforms (such as eBay and Alibaba) that make more than A$75,000 worth of annual sales in Australia to collect Goods and Service Tax on sales of imported goods worth A$1,000 or less, and then pass on that revenue to Australian authorities. Australia is the first country to require offshore suppliers to collect GST.
Once a platform reaches the A$75,000 threshold, any business making sales to Australian consumers through that platform will need to charge GST regardless of its size.
However, the complexity of the reforms might jeopardise the necessary cooperation of overseas businesses, and place consumers at risk of paying wrongly charged GST. It could also leave governments locked in to an ineffective way of collecting GST on imported goods.
The government’s own estimates suggest that, after taking into account exclusions and non-compliance, the reforms will capture only half of all eligible sales. This will generate modest revenues of A$300 million over the first three years.
Why the reforms?
There are several good reasons to extend GST to goods bought by Australian consumers from overseas suppliers.
Much has been made of the need to “level the playing field” between domestic retailers (who collect GST on all eligible sales) and overseas retailers (where GST is charged only on sales over A$1,000).
At a more basic level, as a tax on household consumption, the GST should tax the purchases of final consumers. Therefore all imports should be taxed under a GST, as this is where the goods will most likely be consumed.
The choice to not tax imports of low-value goods was made for a practical reason – the cost of customs authorities collecting the GST at the border could outweigh the revenue obtained. Estimates suggest the exclusion cost about A$390 million, or less than 1% of total GST revenues of A$62.2 billion for 2017-2018.
But this has changed with the expansion of online shopping and the development of collection methods other than at the border. These reforms are therefore best understood as a revenue-integrity measure.
What will be the effect of the changes?
As border authorities will continue to collect GST on imported goods worth more than A$1,000, the reforms effectively establish two separate schemes for imported goods.
It is possible for one transaction to be taxed at the point of sale (GST is payable on sales that include low-value goods even if the total value of the sale is more than A$1,000) and again at the border (because GST will continue to be payable on imports where the value of the whole consignment exceeds A$1,000 even if it consists entirely of low-value goods).
So if a consumer buys three pairs of boots at A$400 (A$1,200 total) the transaction might be taxable either at the point of sale (as a sale that includes low-value goods) or at the border (because the total value of the consignment is over A$1,000).
The reforms contain rules to address this double taxation. For example, it can be avoided by the supplier providing notice to customs prior to importation.
In the event this doesn’t happen, the consumer risks paying the GST twice because no provision is made for refunding GST paid at the border.
Consumers would need to rely on the goodwill of the supplier to refund the wrongly paid GST. The same risk applies if an overseas supplier wrongly charges GST at the point of sale on a GST-free good such as a medical aid or appliance.
All of this will require a lot of cooperation by suppliers with little reward for compliance and only patchy enforcement mechanisms for those that don’t comply.
The response of suppliers and platforms
Despite big players warning that the reforms might “force marketplaces like eBay to prevent Australian buyers from purchasing from foreign sellers”, Amazon has been the only one to act. It announced on May 31 2018 that it would no longer ship from its US website direct to Australian consumers as of July 1.
Consumers will instead be redirected to the Amazon.au site (with Amazon collecting the GST on imports) or would need to engage a redelivery service to ship items bought on Amazon.com to Australia (with the redeliverer responsible for collecting GST).
Although Amazon is right to question the “workability” of the reforms, there is little doubt that Amazon has the capacity to comply, as Treasurer Scott Morrison has suggested.
Amazon’s chosen method to comply with its GST obligations results in either reduced choice for consumers (64 million goods via Amazon.com.au compared to 480 million on Amazon.com) or increased cost (if shopping through Amazon.com).
It also transfers the compliance costs from Amazon to redeliverers (no doubt offset by increased customers) and makes the redelivery provisions in the reforms, intended as a last resort, far more significant.
However, Amazon’s move is not simply about its capacity to comply with GST obligations in Australia. It must be understood in the context of governments around the world moving to collect GST and other taxes on online consumer spending.
Australia is the first jurisdiction to move to adopt a vendor-platform collection model and many jurisdictions are poised to follow suit (the European Union, Switzerland and New Zealand have all announced similar reforms). The Amazon response might give them pause for thought, and sufficient pause is all that might be needed.
Amazon would like transporters such as freight and logistics companies and Australia Post to collect GST on imported goods because it means suppliers and platforms like Amazon won’t have to do so.
The transporter method potentially offers a more reliable method to collect GST, but the paper-based international postal system is unable to do so at least until 2023.
Amazon appears willing to take a short-term hit while waiting for technology and regulatory change to make it viable to adopt its preferred method of transporter collection.
In the meantime, consumers should take care when making purchases from overseas suppliers to ensure as much as they can that GST is being correctly charged. And the world is watching.
The government has pulled its legislation for tax cuts for big businesses – for the second time this year – after its last minute bid to get the Senate crossbench numbers failed.
Announcing the retreat, Finance Minister Mathias Cormann, who had been running the negotiations, reaffirmed that the government remained committed to the cuts, and cast the July 28 byelections as a referendum on them.
Cormann was unable to win Pauline Hanson’s two votes or the two senators from the Centre Alliance.
After flip-flops and with the byelection in Longman at the forefront of her mind, Hanson stuck with her rejection of the measure. The Centre Alliance’s opposition was reinforced by the fact that its lower house member, Rebekha Sharkie, is fighting for survival in the Mayo byelection.
The government had flagged that it intended to press the matter to a vote this week but then decided it did not want to be rebuffed on the floor or parliament.
Cormann told a news conference: “We
need more time to make our argument to our colleagues on the
Senate crossbench – and we, of course, will continue to make our argument in the Australian community.”
“The government remains fully committed to these business tax cuts for all businesses because it is the right thing to do for working
families around Australia.”
This is the second blow on the tax front for the business community this week.
On Tuesday, in what’s been labelled a “captain’s call”, Opposition Leader Bill Shorten announced a Labor government would repeal legislated tax cuts for businesses with turnovers between $2 million and $10 million. Business has reacted angrily to the repeal plan.
The ALP is still considering its position for those with turnovers from $2 million to $10 million. It is under pressure to clarify its policy quickly.
Cormann said the byelections “will
be a referendum on who has the better plan for a stronger economy and more jobs”.
In a reference to speculation about the Labor leadership in the event of bad byelection results, Cormann said, “After the byelections, who knows? We might
have a more business-friendly Labor leader. All sorts of things could
be different on the other side of the byelections.”
He said his message to the people of Longman and Braddon was that they “do have the opportunity to send Bill Shorten and Labor a message. If they don’t like Bill Shorten’s higher taxes on business, on hardworking Australians, on retirees, on home owners, on everyone who moves, then vote against Labor, put Labor last.”
Cormann also targeted One Nation voters. He pointed to polling showing two thirds of One Nation voters in Longman supported lower business tax.
“I hope that the fact that One Nation voters increasingly appear to be coming on board with our plan for lower business taxes will, over time, help to persuade Senator Hanson this is the right thing to do.”
Australia’s military forces will be given power to play a bigger part in dealing with terrorist incidents, under legislation to be introduced into parliament on Thursday.
The bill makes it easier for states and territories to seek help from the Australian Defence Force (ADF) to respond to terrorist and other violent occurrences, especially those that stretch the capabilities of state forces. The move was announced by the Prime Minister Malcolm Turnbull in July last year.
The ADF’s powers to search, seize and control movement at the scene of an incident will be simplified, expanded and made clearer. It will also have greater ability to respond to incidents that span more than one jurisdiction.
It will be able to be “pre-authorised” to protect Commonwealth interests and the state and territories from land and maritime threats, in addition to aviation threats. At present the contingent call out is limited to aviation threats.
The changes also add the minister for home affairs to the existing list of those ministers who can have a role in authorising a call out of the ADF in certain circumstances.
The prime minister, attorney-general and defence minister have key roles as authorising ministers. But where the prime minister and one of the attorney-general or defence minister is not available, the remaining minister can authorise a call out jointly with the deputy prime minister, foreign minister, treasurer, or home affairs minister.
The enhanced remit for the defence forces has come out of the Defence Counter-Terrorism Review.
While the government emphasises that the police remain “the best first response to terrorists and other incidents”, Attorney-General Christian Porter said “amendments to the ADF call-out powers are the most significant changes since the provisions were enacted in 2000” before the Sydney Olympics. The “terror threat we face today is greater and more complex than that we faced when these laws were introduced almost 20 years ago”, he said.
Defence minister Marise Payne said Defence had already strengthened the practical support it provided to police, including a broadened program of specialist training and better access to Defence facilities such a rifle ranges.
The latest anti-terrorism legislation comes as, on a different national security front, the Senate is set on Thursday to pass the government’s measures to combat foreign interference, including setting up a register of agents of “foreign principals”.
The measures have bipartisan support after the parliamentary joint committee on intelligence and security agreed on a range of amendments that have narrowed provisions and inserted protections for bodies such as charities.
Whether the register will capture Chinese non-state companies remains unclear.
Asked about the potential application of the register to Huawei, the chairman of Huawei Australia, John Lord, appearing at the National Press Club on Wednesday, said he didn’t see why he should register “because Huawei’s privately owned, does not have government links other than it’s Chinese. And, therefore, I don’t see why I should.
“However, if at the end of the day the act says something to that effect and the legal advice to Huawei is that we should register, we, Huawei, will have no problems with that and I, John Lord, will have no difficulty whatsoever. If that’s what the government wants, we will do it.”
Lord argued Huawei’s case to be allowed to build the 5G network, amid strong speculation that will be banned from doing so on national security grounds.
He said the 5G decision was not just a tough political one but “this is a long term technology decision that could impact our growth and productivity for generations to come”.
“The suggestions that Huawei, the largest provider of 4G technology in Australia today, should be banned from building 5G networks here should be a concern for everyone and every business in Australia.
“The implications about limiting access to technology competition will be devastatingly high – and is a short term small mind choice rather than seeking to incorporate all technologies in a solution that also secures our critical structures”.
It is no secret people are living longer, thanks to advances in medical technology. Futurist Ray Kurzweil predicts we are approaching a point of breaking even – where for every year lived, science can extend lifespans by at least that much. And more than 80% of Kurzweil’s predictions have so far proved correct.
But length of life and quality of life are not the same thing. For good quality of life as one ages, there must be optimal retirement options. The default is to stay in one’s current home for as long as possible, or downsize. Some will settle into the quiet life of a retirement village on the urban fringes.
Driving the trend are well-heeled baby boomers (those born between 1946 and 1964) who have been using technology at home and work for years. For some, technology has been integral to their lives. And it seems it might be integral to the future of retirement living.
Vertical retirement communities
The chair of the NSW inquiry into retirement villages, Kathryn Greiner, recently recommended integrating designated seniors’ apartments in medium or high-rise residential developments where people of all ages live. Experts have said such retirement communities are the “way of the future”.
But the future is already here, as greater numbers of vertical retirement communities in high-rise apartment buildings are being built in inner-urban areas around Australia. They offer high levels of luxury with ready access to the kinds of amenities inner-city dwellers have grown accustomed to.
High-rise retirement villages would typically be equipped with various smart technologies that connect with the larger technological infrastructure of the city.
Similar to luxury hotel suites, residents would have a spectrum of in-house services and entertainment options presented via internet-connected smart TVs.
Multimedia suites would be there for augmented or virtual reality experiences – travel and education being among them. In-house cinemas would host movie nights.
The way we’re heading, technology-enabled, proactive health management will likely be built into the infrastructure of these retirement villages. It will allow people to stay healthy and live independently at an advanced age, forestalling the time when a move to aged care becomes necessary.
The health-maintenance technology available today means retirees hardly need to leave home for a checkup. Telehealth gives on-demand access to doctors via the internet. Visiting nurses have their role in looking after the elderly at home.
Then there are the dozens of smartphone apps that monitor vital signs, some of which send timely warnings before something becomes a problem.
And while high-rise living may not offer the same access to the outdoors for walking and exercise, technology has other options.
“Exergames” – video games that enable physical activity – are a segment of the computer game industry known to be beneficial to people of all ages, including the elderly. Exergames lend themselves well to vertical communities by not needing much space. They are played either alone or with friends in self-contained virtual environments.
Apart from the physical benefits of exercise, exergames have also been shown to improve mental alertness, balance and coordination, all of which contributes to fewer injuries common to the elderly, such as fractured hips from falling.
Good help is not hard to find now with assistive technologies like Google’s Duplex. These personal assistants fit right into the high-tech home and allow people, wherever they live, to stay independent for longer.
The assistant can keep your diary, make appointments over the phone, buy flowers and have them delivered, turn on the lights, call a taxi and more. Autonomy aids like this could delay the transition to aged care.
High-rise apartments are a thorny issue in suburban neighbourhoods, regardless of who is living in them. There are already some objections to high-rise aged-care facilities. But these mainly come from existing low-rise residents who are not happy to have any high-rise buildings in their neighbourhood.
Some are concerned that high-rise communities will lead to social isolation. Traffic congestion is also a concern.
When managed well in an architectural and town planning sense, vertical communities offer high-quality living while occupying a smaller urban footprint than a hundred detached dwellings. They can help reverse the urban sprawl of Australian cities, which are among the largest and least densely settled in the world. We love our big suburban houses, but they do consume vast tracts of countryside.
People want to live out their days in the freedom of their own home, not in an institution, no matter how benevolent. And it’s in the national interest to relieve pressure on the public health system. Emerging health-optimising technology and vertical communities can enable this. It’s a win-win.
Two months ago, the Australian minister for international development and the Pacific, Concetta Fierravanti-Wells, argued that “80% of Australians do not support any further spending on foreign aid”.
This was reflected in the 2017 Lowy Institute Poll where, when the Australian respondents were told exactly how much Australia invested in aid, $3.8 billion, only 22% supported an increase.
But dollar amounts can be misleading, so the 2018 Lowy Institute Poll took a different approach to the question of public support for Australian aid. Instead of asking Australians whether our current aid investment was right, we asked how much they thought we invested. The results, which back up other research into public opinions on foreign aid, are in striking contrast to reality, revealing how fraught polling of public perceptions on foreign aid can be.
Our 2018 results show that Australians have a highly inflated perception of the size of our aid program. The average Australian believes we invest about 14% of the federal budget on foreign aid and that we should actually invest about 10%. In reality, we invest 0.8%.
On average, Australians think we invest 17.5 times more than we actually do, and would like us to be 12.5 times more generous than we are. Only 6% of respondents guessed anywhere close to the actual number. If that’s how much they think we invest, it’s no wonder there is little support to increase it.
When told how much we actually invest, be it $5 billion (1.2% of federal expenditure) in 2015 or, after significant cuts, $3.8 billion (0.8% of federal expenditure) in 2017, the results are remarkably sticky. The majority thought it sounded reasonable, and only 21% in 2015 and 22% in 2017 supported an increase. When given no baseline, they think we invest more than we do, and think it should be less.
How do we reconcile these results, which appear completely at odds with one another?
To me, this shows how little Australians think about foreign aid. We think of ourselves as a generous nation and expect that to be reflected in our aid program. We don’t give any real thought to it, and in the end trust the government to do what’s right.
But the government is not doing what is right. Since the Coalition government came to power in 2013, Australian aid has been cut by close to 25% when adjusting for inflation.
Australian aid is now at its lowest point in our history, when measured as a proportion of national income. As peers like the United Kingdom and New Zealand are rapidly stepping up, we are slipping into the bottom third of rich country donors.
We are the fifth-most-prosperous country in the OECD but rank 21st in generosity. By 2021, our donor peers down the bottom will be Spain, the United States, Portugal, Slovenia, Greece, Korea, Czech Republic, Poland, Slovak Republic and Hungary.
For me, the answer is that the Abbott and Turnbull Coalition governments do not see the efficacy and importance of aid. They don’t see the critical national interest of our aid program in building goodwill and strong institutional linkages with our immediate neighbours, or the impact it has on improving people’s lives.
They know it will only ever be a marginal election issue, and what few votes there are for it tend to sit on the other side of the aisle. If MPs don’t believe in its importance and don’t see any election implications or widespread public outcry at the cuts, it starts to make sense why the aid program has been such an easy target for this government.
Fierravanti-Wells instead argues forcefully that it is impossible to increase the aid budget when the public does not support it.
Academic literature points to this being a critical flaw of foreign aid. Normal feedback mechanisms of domestic government expenditure that promote effectiveness and support do not apply to foreign aid. Taxpayer money is collected in one country and spent in another, with taxpayers having little knowledge of, or interest in, how it is being spent.
Beneficiaries of aid, on the other hand, have a strong interest in aid, but no direct political influence or voice to advocate for it. These flaws result in a marginal constituency for foreign aid, reflecting its marginal place in government expenditure.
What’s surprising about foreign aid is the public scrutiny it receives from our political class over other investments in Australia’s national interest. Our diplomatic, defence and intelligence expenditure receive less public scrutiny despite far larger (and growing) sums.
The development community has in part allowed this to happen by failing to build and maintain a bipartisan political constituency for Australian aid by selling the importance of foreign aid as a critical investment in Australia’s national interest. It is an important complement to our investments in diplomacy and defence, particularly because we are surrounded by developing nations that have significant financing challenges.
Having just a few political champions can do more than any campaign to deepen public support for Australian aid. Our politicians have the loudest megaphone to support the aid program, but at the moment are choosing not to use it.
There are ways out of this. Aid advocacy efforts could be professionalised and targeted at members of parliament. There should be more study tours for politicians, like those run by Save the Children with the support of the Gates Foundation, to see Australian aid in action in supporting the unprecedented humanitarian and development needs in our region. More effort should be made to highlight the foreign policy and strategic imperative for Australian aid, particularly in response to the growing competition from China, which has finally captured the attention of Australian media in the Pacific.
The Australian aid program is at a disappointing low point, and our poll shows that there is expectation for us to be doing more. It’s time for some political leadership to turn things around.