New guidelines for responding to cyber attacks don’t go far enough



File 20181217 185255 1repzj6.jpg?ixlib=rb 1.1
If Australia’s electricity grid was targeted by cyber attack the fall out could be severe.
Shutterstock

Adam Henry, UNSW and Greg Austin, UNSW

Debates about cyber security in Australia over the past few weeks have largely centred around the passing of the government’s controversial Assistance and Access bill. But while government access to encrypted messages is an important subject, protecting Australia from threat could depend more on the task of developing a solid and robust cyber security response plan.

Australia released its first Cyber Incident Management Arrangements (CIMA) for state, territory and federal governments on December 12. It’s a commendable move towards a comprehensive national civil defence strategy for cyber space.

Coming at least a decade after the need was first foreshadowed by the government, this is just the initial step on a path that demands much more development. Beyond CIMA, the government needs to better explain to the public the unique threats posed by large scale cyber incidents and, on that basis, engage the private sector and a wider community of experts on addressing those unique threats.




Read more:
What skills does a cybersecurity professional need?


Australia is poorly prepared

The aim of the new cyber incident arrangements is to reduce the scope, impact and severity of a “national cyber incident”.

A national cyber incident is defined as being of potential national importance, but less severe than a “crisis” that would trigger the government’s Australian Government Crisis Management Framework (AGCMF).

Australia is currently ill-prepared to respond to a major cyber incident, such as the Wannacry or NotPetya attacks in 2017.

Wannacry severely disrupted the UK’s National Health Service, at a cost of A$160 million. NotPetya shut down the world’s largest shipping container company, Maersk, for several weeks, costing it A$500 million.

When costs for random cyber attacks are so high, it’s vital that all Australian governments have coordinated response plans to high-threat incidents. The CIMA sets out inter-jurisdictional coordination arrangements, roles and responsibilities, and principles for cooperation.

A higher-level cyber crisis that would trigger the AGCMF (a process that itself looks somewhat under-prepared) is one that:

… results in sustained disruption to essential services, severe economic damage, a threat to national security or loss of life.

More cyber experts and cyber incident exercises

At just seven pages in length, in glossy brochure format, the CIMA does not outline specific operational incident management protocols.

This will be up to state and territory governments to negotiate with the Commonwealth. That means the protocols developed may be subject to competing budget priorities, political appetite, divergent levels of cyber maturity, and, most importantly, staffing requirements.

Australia has a serious crisis in the availability of skilled cyber personnel in general. This is particularly the case in specialist areas required for the management of complex cyber incidents.

Government agencies struggle to compete with major corporations, such as the major banks, for the top-level recruits.

Australia needs people with expertise in cybersecurity.

The skills crisis is exacerbated by the lack of high quality education and training programs in Australia for this specialist task. Our universities, for the most part, do not teach – or even research – complex cyber incidents on a scale that could begin to service the national need.




Read more:
It’s time for governments to help their citizens deal with cybersecurity


The federal government must move quickly to strengthen and formalise arrangements for collaboration with key non-governmental partners – particularly the business sector, but also researchers and large non-profit entities.

Critical infrastructure providers, such as electricity companies, should be among the first businesses targeted for collaboration due to the scale of potential fallout if they came under attack.

To help achieve this, CIMA outlines plans to institutionalise, for the first time, regular cyber incident exercises that address nationwide needs.

Better long-term planning is needed

While these moves are a good start, there are three longer term tasks that need attention.

First, the government needs to construct a consistent, credible and durable public narrative around the purpose of its cyber incident policies, and associated exercise programs.

Former Cyber Security Minister Dan Tehan has spoken of a single cyber storm, former Prime Minister Malcolm Turnbull spoke of a perfect cyber storm (several storms together), and Cyber Coordinator Alastair McGibbon spoke of a cyber catastrophe as the only existential threat Australia faced.

But there is little articulation in the public domain of what these ideas actually mean.

The new cyber incident management arrangements are meant to operate below the level of national cyber crisis. But the country is in dire need of a civil defence strategy for cyber space that addresses both levels of attack. There is no significant mention of cyber threats in the website of the Australian Disaster Resilience Knowledge Hub.

This is a completely new form of civil defence, and it may need a new form of organisation to carry it forward. A new, dedicated arm of a existing agency, such as the State Emergency Services (SES), is another potential solution.

One of us (Greg Austin) proposed in 2016 the creation of a new “cyber civil corps”. This would be a disciplined service relying on part-time commitments from the people best trained to respond to national cyber emergencies. A cyber civil corps could also help to define training needs and contribute to national training packages.

The second task falls to private business, who face potentially crippling costs in random cyber attacks.

They will need to build their own body of expertise in cyber simulations and exercise. Contracting out such responsibilities to consulting companies, or one-off reports, would produce scattershot results. Any “lessons learnt” within firms about contingency management could fail to be consolidated and shared with the wider business community.




Read more:
The difference between cybersecurity and cybercrime, and why it matters


The third task of all stakeholders is to mobilise an expanding knowledge community led by researchers from academia, government and the private sector.

What exists at the moment is minimalist, and appears hostage to the preferences of a handful of senior officials in Australian Cyber Security Centre (ACSC) and the Department of Home Affairs who may not be in post within several years.

Cyber civil defence is the responsibility of the entire community. Australia needs a national standing committee for cyber security emergency management and resilience that is an equal partnership between government, business, and academic specialists.The Conversation

Adam Henry, Adjunct Lecturer, UNSW and Greg Austin, Professor UNSW Canberra Cyber, UNSW

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

Advertisements

Populism’s problems can be fixed by getting the public better-informed. And that’s actually possible


Ron Levy, Australian National University

Many commentators have been alarmed at the electoral wins of ultra conservative leaders around the world, as well as policy decisions such as Brexit made by a popular referendum. They see these as signs of a rising populism.

In its benign forms, populism can simply mean ordinary citizens’ desire to see their interests and preferences better reflected in policy making. It may also mean greater direct involvement in government by the people themselves.

But in its more dangerous manifestations, populism can mean a reckless, extreme distrust in governmental expertise. It can be under-informed, and divide communities between “us” and “them”. And – in its impatience to see change – it can tear down useful democratic values and institutions such as inclusivity and a neutral judiciary, which safeguard our rights in a democracy.




Read more:
The pathologies of populism


There is at least one way we could harness the populist trend and turn it in a more useful direction: deliberative democracy.

As the name suggests, deliberative democracy aims to promote not only democratic majority rule, but also deliberation. This means well-informed, inclusive and reflective decision-making. While populism gives a greater role to ordinary citizens in the affairs of government, deliberative democracy models can improve this by ensuring citizen input is robustly inclusive, reflective and well-informed.

So far, deliberative democracy is the best answer we have to the challenge of populism.

Deliberative democracy at work

One form of deliberative democracy is to enlist ordinary citizens in deliberation, such as in the case of citizens’ juries. Here, randomly-picked groups of citizens are invited to attend a series of organised sessions, where they become well-informed on a specific policy matter before advising governments on the best way forward.

This model has been used hundreds of times around the world, including in the ACT (on matters such as housing) and South Australia (on nuclear waste).




Read more:
City calls on jury of its citizens to deliberate on Melbourne’s future


To many, such an approach seems fanciful. Their cynicism is based on the assumption members of the public couldn’t possibly deliberate about public matters thoughtfully. But many studies show that creative approaches to democracy, such as citizens’ juries, can increase how well ordinary citizens deliberate about the matters put to them. Citizens’ juries can be informed, inclusive, thoughtful, fair and intellectually supple.

Citizens’ juries have a particular kind of democratic legitimacy. Since they are randomly-selected, and often demographically representative of the larger population, the public tends to see jury members as “just like me”, which creates more trust in the process.

But citizens’ juries have limitations. One is that the process has so far only included a handful of citizens at one time. And some critics will insist that only a vote in which all eligible voters can participate confers democratic legitimacy. This is where the referendum can be used as part of the deliberative democracy model.

Referendums can provide a neutral, democratically robust input into matters of public interest that politicians cannot resolve themselves. They can, for example, spur governments to act where a clear majority of the population has a considered view, but the government is divided and therefore powerless to act on that view.

Think of climate change mitigation, as well as other environmental matters such as coal seam gas mining and fracking.

But when a policy matter is put to a referendum or plebiscite – in which all eligible citizens could vote – it is a hard task to bring most of the people up to speed. It is far easier to inform people on a citizens’ jury, which might include just 50 people.

The conundrum is therefore that the citizens’ jury is deliberative but (according to some) democratically insufficient, while a referendum or plebiscite is more democratically robust but not always deliberative. But we can take useful steps toward making referendums or plebiscites more deliberative.

Around the world a number of academics, including the author, have proposed the “deliberative referendum”. Those who doubt referendums can be deliberative may prefer the term “informed referendum”.

The deliberative/informed referendum

Reforming a referendum or plebscite to make it more deliberative can be done through several methods – some already common. They include:

Voting online or at computer voting stations, which is already in use in many places. This can permit more interactive voting than a mere yes/no vote. In a new approach, before they could cast their votes, voters are asked to interact with a 15-minute tutorial informing them of the relevant issues. For instance, a vote on a local housing development plan would canvass environmental, economic and social arguments for and against greater urban density.

Multi-option voting would depart from the traditional yes/no vote, presenting voters with several options and avoiding the artificial reduction of complex matters into a binary choice. Preferential voting could still allow a single option to emerge with majority support.

Value-based voting could take place, meaning one set of ballot options put to voters would concern not just final choices, such as urban density levels adopted in a city plan, but also the values underlying them. Voters could rank values such as environmental sustainability and economic development. This would encourage voters to think more thoroughly about their final choices.

Citizens’ juries should be held in the lead up to a referendum. This has happened in many cases, such as in the recent Irish abortion referendum. A citizens’ jury could help to inform the broader public about the issues at stake. As a neutral body, the jury would write the questions on the ballot and the content of the information tutorials.

An optional measure would be a political misinformation law enacted to prevent politicians and others from uttering false statements likely to mislead voters. This method has been common, most of all, in Australia. Granted, around the world it has been subject to challenges under constitutional free speech and communication guarantees. But in Australia political misinformation laws were upheld by judges who cited the value of accurate information for voters.

Robust anti-misinformation laws would have been useful in the 2016 Brexit referendum campaign, which had a number of whoppers. For instance, campaigners greatly overstated the costs to the UK of both staying in and leaving the EU.

Referendums on Australia becoming a republic, and on Brexit (again), may be on the horizon. Other cases, such as the urban density example, are perennially unresolved matters in localities around Australia – in part because governments cannot decide whether to favour homeowners, developers, environmentalists or other groups. Even societies experiencing war often turn to referendums to try to jolt them out of their entrenched cycles of violence.

Referendums and plebiscites can be democratic circuit-breakers in a system of government that is in theory dedicated to serving the public, but that in many cases falls short.




Read more:
Australia’s public servants: dedicated, highly trained … and elitist


Of course, there is still a risk the circuit-break may end up merely giving greater voice to a coarse populism, which knows it wants to tear down elitism and expertise, but not what to replace them with. However, work on deliberative referendum design suggests we needn’t be quite so fearful of populism. At least sometimes, and to some degree, populism can be remade so the public can have a more deliberative input into government decision-making.The Conversation

Ron Levy, Associate professor, Australian National University

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

Shorten’s subsidy plan to boost affordable housing



File 20181215 185249 1xa2lk8.jpg?ixlib=rb 1.1
Labor would work with community housing providers, the residential construction sector and institutional investors.
Flickr, CC BY

Michelle Grattan, University of Canberra

Institutional investors would receive long-term subsidies to build new dwellings – on condition they rented them out below market rates – under an affordable housing program Bill Shorten is announcing on the first day of Labor’s national conference in Adelaide.

A Labor government would offer 15-year subsidies – $8,500 a year – for investors building new homes provided they charged rent at 20% under the market rate.

The program would cost A$102 million over the forward estimates to 2021-22 and A$6.6 billion over the decade to 2028-29. The costing was done by the Parliamentary Budget Office.

In his Sunday announcement, Shorten says that the ALP’s ten-year plan to build 250,000 houses and units would be Australia’s “biggest ever investment in affordable housing”. The plan includes 20,000 dwellings in the first term of a Labor government.

“This is a cost-of-living plan, a jobs plan and a housing plan. It will give working families a fair go to put a roof over their head now – and save for their own home in the future.”

He says these dwellings would be available to renters on “low and moderate incomes”. A family paying the average national rent of $462 a week could save $92 a week.

Labor would work with community housing providers, the residential construction sector and institutional investors.

“Labor’s plan will provide investors with certainty to build – knowing that they will have long-term government support and guarantees beyond the decade.”

Shorten says access to housing is one of the biggest challenges to dealing with intergenerational inequality, as an increasing “wealth gap” locks people out of the housing market.

“Increasing the supply of affordable housing is critical to addressing pressures on disposable income and, in turn, addressing inequality.

“Labor’s plan will deliver affordable, environmentally sustainable housing that helps to reduce energy consumption and cost-of-living pressures on Australian families.”

Shorten says the existing rental scheme – the National Rental Affordability Scheme – has attracted private investment of about A$12.9 billion, delivering 37,000 dwellings in a decade.

“Despite this success, the Liberals have abandoned affordable housing and axed the subsidies that encourage affordable housing. There is a severe shortage of affordable rental housing in Australia and many families are struggling to find and keep a roof over their heads. The number of Australians experiencing rental and mortgage stress is at record levels.”

The Australian Housing and Urban Research Institute estimates a shortfall of more than 525,000 affordable rental properties, Shorten says.

Overseas students, temporary foreign workers and other non-residents would not be eligible to rent under the Labor scheme.

Shorten says the plan would support the ALP’s reforms to negative gearing, “which direct concessions to newly built premises and encourage housing construction”.

Labor hopes that the three-day conference will end the year on a high note for the opposition, after its strong two-party performance in polling during 2018. Maximum effort has been made to ensure that internal policy differences are managed to avoid damaging public divisions.

Shorten told a press conference on Saturday that he hoped to see “energetic, enthusiastic debate” at the conference.

He said “perhaps the most valuable proposition that Labor presents the Australian people at the federal election within the next five months – it’s a united team, it’s energetic and it’s a team with vision”.

Shorten defended his undertaking that Newstart would be reviewed ahead of an ALP government considering an increase.

“I think Newstart is too low. I don’t think anyone who says that it needs to increase is wrong.

“But what we’ll need to do from government is review the level and understand the implications of increasing Newstart, along with the impact on all of our other taxes and payment systems.

“We have to look at what we can afford as a nation. But we’re not reviewing Newstart to decrease it.”

On the sensitive issue of asylum-seeker policy, Shorten told his press conference a Labor government would put whatever resources were needed into stopping boats.

It would also support regional and offshore processing. It would take refugees into Australia – “properly, not via people smugglers”.

“We want to be a good international citizen – we also recognise, however, that we’ve got to make sure that whatever policy we adopt we can afford, and that it meets our combined goals of not keeping people in indefinite detention on Manus and Nauru but also keeping our borders strong, so we never again see the people-smuggling trade start up.”The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

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

NSW Governor David Hurley will be Australia’s new Governor-General


Michelle Grattan, University of Canberra

Scott Morrison has announced that New South Wales Governor David Hurley will become Australia’s next Governor-General, succeeding Sir Peter Cosgrove.

The Prime Minister timed his news conference in Canberra with the governor-general designate to coincide with Bill Shorten’s opening address at the ALP national conference in Adelaide.

Like Cosgrove, Hurley is a former military man. He has been NSW Governor since 2014 and served as chief of the Australian Defence Force from 2011-2014.

He will be regarded as a safe and uncontroversial choice, although some critics will say the government should have looked beyond former military ranks.

Labor frontbencher Jim Chalmers said the opposition welcomed Hurley’s appointment but was disappointed that Shorten had not been consulted. The opposition leader was only informed on Sunday morning, ahead of the 10am announcement.

“Ideally, so close to an election the opposition would have been properly consulted on an appointment which is so important to Australia and goes for such a long time” Chalmers said.

Morrison said Hurley would be sworn in on June 28, to allow him to fulfil his present duties. Cosgrove’s term, which ends in March, will be briefly extended.

Morrison in a statement said Hurley had been “a very popular governor of NSW. From his weekly boxing workouts with Indigenous children as part of the Tribal Warriors Program, to his frequent regional trips, Governor Hurley is known as being generous and approachable to young and old alike.”

Appearing at their joint news conference in the prime ministerial courtyard, Morrison said of General Hurley “I had only one choice, my first choice, and he is standing next to me,”

Asked why the announcement was made on Sunday, Morrison said “it needed to be done to provide certainty about the role going into next year”

“Next year is an election year and it is very important that … this appointment is seen well outside the context of any electoral issues.”

The start of Shorten’s national conference speech was disrupted when demonstrators, protesting about the Adani mine and refugee policy, mounted the stage. An anti-Adani protestor stood beside Shorten with a flag that said “Stop Adani”, and other protestors unfurled a banner “ALP – Stop playing politics with peoples lives. #ClosetheCamps”.

An obviously frustrated Shorten said people had the right to protest but “you have got to ask yourself when you see these protests, who is the winner? It is the Coalition”.

Security guards escorted and dragged the protesters off the stage.

In his speech, Shorten said a Labor government would be the first government in Australian history with 50% of women in its parliamentary ranks. Standing in front of the conference’s theme of “A Fair Go for Australia” Shorten said “inequality is eating away at our prosperity”.

He announced that an ALP government would make superannuation part of the national employment standards, saying it was a workplace right and that bosses who stole superannuation from their employees should suffer the same penalties as others who violated workplace rights.

He stressed that Labor’s plans were fully costed and a Labor government could “guarantee stronger budget surpluses”.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

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

Morrison’s decision to recognise West Jerusalem the latest bad move in a mess of his own making


File 20181216 185246 mx5xqk.jpg?ixlib=rb 1.1
Scott Morrison’s announcement that Australia would recognise West Jerusalem as Israel’s capital has cause a negative reaction not only from the Muslim world, but from Israel itself.
AAP/Mick Tsikas

Tony Walker, La Trobe University

Prime Minister Scott Morrison will have learned a valuable foreign policy lesson in the past day or so as it relates to the Holy Land.

As ye sow, so shall ye reap (Galatians 6:7).

When Morrison allowed a thought bubble to become a political ploy in the Liberal party’s desperation to cling on to a safe seat in the Wentworth byelection, he miscalculated the damage it would cause to his own credibility and the country’s foreign policy settings.

An inexperienced prime minister blundered into the thicket of Middle East politics by announcing Australia would both consider moving its embassy from Tel Aviv to Jerusalem, and would also review its support for the Joint Comprehensive Plan of Action (JCPOA).

This latter is the 159-page document negotiated by the permanent members of the Security Council, plus Germany. In it, Iran agreed to freeze its nuclear program.




Read more:
Shifting the Australian embassy in Israel to Jerusalem would be a big, cynical mistake


In any event, Morrison indicated Canberra would continue to adhere to JCPOA, thus putting itself at odds with Washington. The United States announced it would abandon the JCPOA, pending the negotiation of better terms.

In his efforts to purloin the Jewish vote in Wentworth, Morrison’s shallow marketing impulses got the better of policy prudence.

He proceeded with haste in the first instance, and now he can repent at leisure after having sought – unsuccessfully it seems – to thread the needle in his policy pronouncements at the weekend.

If we stretch the biblical allusions further, we might say that when it comes to the Middle East, it is easier for a camel to pass through the eye of a needle than for a political ingénue to shift the status quo in Australia’s position on the vexed Arab-Israel issue.

What has now happened – as it inevitably would – after Morrison announced that Australia would recognise West Jerusalem as Israel’s capital and establish a branch office there, is a negative reaction not only from the Muslim world, but from Israel itself.

So an Australian prime minister goes out on a limb for the Jewish state, only to have it sawn off by critics in Israel who did not like the distinction he made between Jerusalem’s Jewish west and Arab east.

Under Israel’s Basic Law, the constitution, an undivided Jerusalem is deemed to be the country’s capital in perpetuity. This position was bolstered in a Knesset vote as recently as this year.

Israel’s official reaction to the Morrison announcement was to describe it as a “step in the right direction”. However, as its implications sunk in, Israeli public figures began to take strong exception to Australia’s “acknowledgement” of Palestinian claims to Jerusalem in a final status peace settlement.

Typical of the reaction was this, via Twitter, from Tzachi Hanegbi, a prominent Knesset member of the nationalist Likud party and confidant of Prime Minister Benjamin Netanyahu.

Yuli Edelstein, the speaker of the Knesset, went further.

We expected more from a friendly country like Australia […] I am hoping that our cool response will make it clear to the Australians that this is not what we were wishing for.

Pointedly, Netanyahu had not commented publicly at time of writing.

In his announcement on Saturday at a Sydney Institute event, Morrison set out his stall on the Jerusalem issue. In the process, apart from infuriating the Israeli nationalist right, he exposed himself to withering criticism at home and in the region.

This was the nub of Morrison’s statement:

Australia now recognises West Jerusalem, being the seat of the Knesset and many of the institutions of government, is the capital of Israel […] Furthermore, recognising our commitment to a two-state solution, the Australian Government has also resolved to acknowledge the aspirations of the Palestinian people for a future state with its capital in East Jerusalem.

While Morrison’s use of the word “acknowledge” falls a long way short of “recognising” Palestinian aspirations, his “acknowledgement”, in the context of final status peace negotiations, trespasses on an Israeli article of faith.

Israel’s insistence on an undivided Jerusalem in perpetuity under its control contradicts an international consensus that East Jerusalem remains occupied territory since the 1967 Six-Day War.

Australia has supported numerous United Nations resolutions to this effect, including Security Council resolutions 242 of 1967 and 338 of 1973 that called on Israel to withdraw from territories occupied in war.

In his efforts to find favour with Israel’s supporters, Morrison crossed that divide, thereby infuriating an Israeli government and discomforting Israel’s backers in Australia, notwithstanding their professed delight at the latest turn of events.




Read more:
Moving the Australian embassy to Jerusalem makes sense: here’s why


Australia’s position, it might be noted, contrasts with that of the United States. Washington recognised Jerusalem as Israel’s capital earlier this year without making a distinction between “west” and “east”.

In his Sydney Institute speech, Morrison indicated he and his public service advisers had conferred widely in their efforts to come up with a form of words that would be consistent with his pledge to review Australia’s position on Jerusalem.

This review included consultations with:

…some eminent Australian policymakers: former heads of various agencies and departments whether in Defence, Foreign Affairs or Prime Minister and Cabinet.

Advice to Morrison from what was known as a “reference group” of “eminent Australian policymakers” was overwhelmingly, if not unanimously, resistant to changing the status quo.

In other words, Australia should adhere to settled policy.

Morrison chose to ignore this advice after having committed himself to a review. In the process, and unnecessarily, he has risked negative reactions from Australia’s important neighbours, Indonesia and Malaysia, and from the Arab world. At home, he has exposed himself to criticism he has jeopardised Australia’s international standing for no conspicuous benefit.

This has been a mess, and one entirely of Morrison’s own making, driven by short-term political calculations.The Conversation

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

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

Shorten pledges $500 million for UNHCR in border protection policy


Michelle Grattan, University of Canberra

Bill Shorten has promised Labor will commit $500 million over five years to the United Nations High Commissioner for Refugees in a policy designed simultaneously to reassure voters and satisfy the party on the politically sensitive issue of border protection.

This was among proposed new measures on asylum seeker policy the opposition leader announced to the ALP national conference on Monday morning, preempting a debate later in the day, to ensure internal party differences were minimised.

He said the $500 million would directly improve orderly regional processing and resettlement in the region and countries closer to where refugees originally came from. The funding would “speed up legitimate settlement pathways – it will deny people smugglers a product to sell”.

Portraying Labor as tough on borders, but humanitarian on refugees, Shorten said that if he became prime minister, he would take immediate advice from the chief of the Australian Defence Force, the Home Affairs Department, ASIO and other agencies about Australia’s state of preparedness to disrupt people smuggling operations before people departed.

Labor would triple the number of Australian Federal Police working overseas to stop people smugglers and prevent people even contemplating getting on boats.

An ALP government would expand the existing community sponsored refugee program from the current number of 1,000 to 5,000.

“This means state and local governments, community organisations, businesses and unions and faith-based institutions will be able to sponsor humanitarian entrants into Australia and support the economic and social integration of refugees into communities,” Shorten said.

He said the expansion would be in addition to Australia’s existing humanitarian intake, so a Labor government would take more refugees overall as part of its migration mix.

Shorten reaffirmed Labor’s commitment to turnbacks and offshore processing, saying “it is not a crime to want to come to this country. But it is a crime to exploit vulnerable people to put them in dangerous and unsafe vessels and have them drown at sea”.

“We cannot, we must not, and we will not permit the reopening of their
trade in human desperation and the drownings and the irreplaceable loss of life that it brings.”

This required pursuing regional resettlement, turning back boats when it was safe to do so and maintaining offshore processing.

“But also … we understand that keeping our borders secure, and keeping people smugglers out of business should and never has meant leaving women and children to languish for years and years in indefinite detention in sub-standard facilities and unacceptable conditions”

“It has never meant allowing peoples’ mental and physical health to deteriorate whilst under direct or indirect Australian care. It has never meant fighting every step of the way against medical advice which says that more needs to be done to treat people”

“I believe that Australia can meet our international humanitarian and legal responsibilities without compromising our national security for a commitment to strong border protection,” Shorten said.

A Labor government would take up New Zealand’s offer to resettle refugees from Manus and Nauru by immediately negotiating an agreement on similar terms to the current deal with the United States.

In a counter attack against the Coalition, which is running hard on the ALP being soft on borders, Shorten accused the government of “telling lies about Labor” and thereby “doing the dirty work of the people smugglers.

“The Liberals are acting as spruikers for the criminal syndicates. Every time they get up and say that there will be a change in terms of border security, they are signalling criminal syndicates to try their hand again.

“They should be ashamed, they know what they do and they still do it.”The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

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

MYEFO reveals billions more in revenue, $9 billion in fresh election tax cuts


Peter Martin, The Conversation

Higher-than-expected company tax revenue and lower-than-expected spending have boosted the budget’s bottom line by A$15 billion over next four years, allowing it to forecast cumulative surpluses of A$30.4 billion, double what the budget predicted in May.

Modestly improved surpluses

The midyear budget update cuts the projected deficit for 2018-19 from a May estimate of A$14.5 billion to A$5.2 billion.

The surplus forecast for 2019-20 climbs from A$2.2 billion to A$4.1 billion. By 2021-22 the surplus is forecast to be A$19 billion, up from A$16.6 billion.



The surplus won’t reach the government’s long-term target of 1% of gross domestic product until 2025-26. And in projections out to 2028-29 it is not forecast to climb much above this target as the budget hits the Coalition’s self-imposed tax “speed limit” of 23.9% of GDP.



$9 billion in unannounced tax cuts

The budget boost would have been much bigger were it not for more than A$9 billion in “decisions taken but not announced”. Almost all of these are revenue decisions, presumably extra election tax cuts, worth A$2.5 billion to A$3.7 billion per year.

The budget papers say these are decisions taken since the May budget, and are either not for publication or haven’t yet been made public.




Read more:
More mirage than good management, MYEFO fails to hit its own targets


Treasurer Josh Frydenberg confirmed the government had taken decisions to do with tax, but said it would announce them at a time of its choosing rather than in the budget update.

It reserved the right to take other tax and spending decisions in the lead-up to the election. Some would be revealed in the 2019-20 budget, to be delivered in April rather than in May to allow an election in May.

Downgraded wage growth

Although the Treasury has revised up its estimates for revenue and revised down its estimates of unemployment, expecting the rate to fall to 5% by June 2019 and stay there, it has shaved 0.25 percentage points off its estimates for wage growth.

It now expects wages to grow by 2.5% in the year to June 2019 (down from 2.75%) and 3% in 2019-20 (down from 3.25%). In future years, it expects wage growth of 3.5%.



Addressing the downgrade, Mr Frydenberg said weaker-than-expected wage growth appeared to be part of a worldwide phenomenon, “not unique to us”.

Wage growth for the year to September was 2.3%, the highest since 2015. The statement said anecdotal evidence from Treasury’s business liaison program pointed to “skills shortages and wage pressures in some sectors of the economy, consistent with a tightening labour market”.

Weaker consumer spending, economic growth

Growth in consumer spending has also been revised down, from 2.75% in 2018-19 to 2.5%. It is expected to climb back to 3% in 2019-20.

The statement revises down the government’s forecast of economic growth in 2018-19 from 3% to 2.75%, in part because of the Queensland drought, but predicts growth of 3% in 2019-20, 2020-21 and 2021-22, a touch higher than the Treasury’s estimate of long-term sustainable growth.

The Treasury is expecting economic growth to weaken in China and the United States, slipping from 6.5% in China to 6% in 2019 and 2020, and from 2.75% in the US to 2.25 and then 2%.

But debt has peaked and is headed down

The update shows that net debt has already peaked as a proportion of GDP and will fall faster than previously expected, in line with higher surpluses, sliding from 18.2% of GDP to 1.5% over the decade to 2028-29.



Government receipts are expected to climb from 24.9% of GDP to 25.5% by 2021-22. Payments are expected to fall from 24.9% of GDP to 24.6%.

Mr Frydenberg said the Coalition had kept average real spending growth at 1.9% per year, well below Labor’s 4% over six years which included the global financial crisis.



Finance Minister Mathias Cormann said recurrent spending had fallen below recurrent revenue for the first time in more than a decade.

Recurrent spending excludes spending on long-term investments in things such as road and rail infrastructure.

He said all new spending since the May budget had been offset by spending cuts elsewhere.

No firm commitment on fiscal discipline

Asked whether he felt bound by a commitment in the budget papers to bank rather than spend improvements to the budget’s bottom line due to changes in the economy, Cormann said it was “a matter of balancing priorities”.

The imperative to cut tax to keep it below the government’s self-imposed speed limit might conflict with the commitment to devote extra tax takings to improving the bottom line.




Read more:
Monday’s MYEFO will look good, but it will set the budget up for awful trouble down the track


The Conversation


Peter Martin, Editor, Business and Economy, The Conversation

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

More mirage than good management, MYEFO fails to hit its own targets


Danielle Wood, Grattan Institute and Kate Griffiths, Grattan Institute

The Morrison government wants next year’s election to be about economic management.

So understandably, it’s using the improved bottom line in the Mid Year Economic and Fiscal Outlook (MYEFO) to talk up its economic credentials.

But the numbers in MYEFO show it has failed to hit many of its own targets.

Target 1: Surpluses on average over the cycle

The government’s overarching fiscal objective is to deliver budget surpluses: not just in one year but on average over the economic cycle.

MYEFO indicates the government is expecting a $5.2 billion deficit in 2018-19 (0.3% of GDP).

It will be the 11th consecutive deficit for the Commonwealth budget.

Deficits have averaged $33.2 billion (2.1% of GDP) over those 11 years.

Yes, a $4.1 billion surplus is forecast for next year, with surpluses projected to reach $19 billion (0.9% of GDP) by 2021-22.

But so big have the recent deficits been, that even if everything goes well and the fiscal position continues to improve, the budget would need to be in surplus for decades to produce a surplus on average over each year, far longer than what most economists consider a typical economic cycle.




Read more:
MYEFO reveals billions more in revenue, $9 billion in fresh election tax cuts


A related fiscal target is that budget surpluses will build to at least 1% of GDP as soon as possible.

Despite revenue windfalls from income and company taxes (discussed below), the government is still forecasting it won’t reach that 1% of GDP surplus target until 2025-26.

Policy decisions in this year’s budget and MYEFO – including income and company tax cuts, additional funding for independent and Catholic schools, and changes to the GST formula to placate Western Australia – have weakened the bottom line in 2021-22 by $10.5 billion.

Hardly the actions of a government in a hurry to deliver a sizeable surplus.

Verdict: Fail.



Target 2: Reduce the payments-to-GDP ratio

The government’s policy is also to maintain strong fiscal discipline by controlling expenditure, with a falling payments-to-GDP ratio its measure of success.

Whether it has met the target depends on the starting year. Governments payments are forecast to reach 24.9% of GDP in 2018-19, up from 23.9% in 2012-13 before the Coalition took office.

The government prefers the starting point of its first year in office 2013-14 where payments were 25.5% of GDP.

Either way, payments in 2018-19 remain above the 30-year historical average of 24.7% of GDP.




Read more:
Morrison’s return to surplus built on the back of higher tax – Parliamentary Budget Office


While the government projects that spending will fall slightly further to 24.6% of GDP by 2021-22, this relies on spending growth across the government’s major programs falling substantially compared to the previous four years – without major policy changes to help facilitate the fall.

Verdict: Debateable pass.



Target 3: Tax-to-GDP ratio below 23.9% of GDP

In last year’s budget, the government introduced a new target of capping tax collections at 23.9% of GDP.

Why 23.9%? That was the average level of tax during the final two terms of the Howard/Costello government.

While the Coalition is understandably keen to follow the lead of one of its most electorally successful governments, that was also a period where tax collections were historically high.

Tax collections are projected to reach 23.8% of GDP in 2022, on the back of stronger than forecast personal income tax and company tax receipts.

Verdict: Pass.


MYEFO Chart.


Target 4: New spending measures more than offset by reductions in spending elsewhere

Since becoming prime minister, Scott Morrison has sent mixed signals about whether his government will adhere to the longstanding budget rule that all new spending proposals be matched with budget savings.

At the MYEFO press conference, Finance Minister Matthias Cormann said it was a “matter of balancing competition priorities”.

Here’s the straight answer – the net effect of policy changes announced in MYEFO are an additional $12.2 billion in spending over four years.

In other words, the government has not offset new spending with cuts to other spending programs. The Turnbull government similarly failed to offset its new spending in 2017-18 (although it succeeded in prior years).




Read more:
Monday’s MYEFO will look good, but it will set the budget up for awful trouble down the track


There have been some reductions in spending because of improvements in the economy. The government claims these reductions offset its recent spending announcements. But genuine offsets come from policy changes, not economic good luck.

Verdict: Fail.

Target 5: Shifts due to changes in the economy banked as an improvement in budget bottom line

This objective is key to the government’s fiscal conservative credentials.

If it has some economic good luck, it commits to use the proceeds for budget repair rather than new spending or tax cuts.

This rule has been irrelevant for most of the past decade, because almost every budget had revenue collections falling short of forecast.

But the Morrison government is in the middle of a mini revenue boom – revenue collections were higher than forecast in both the 2018-19 budget and MYEFO.

Company tax collections are higher largely due to strong commodity prices. Income tax collections are up and government spending is down because of improvements in the economy.




Read more:
Labor would deliver bigger surpluses than the Coalition: Bowen


So has the government used this chance to show off its fiscal prudence?

Not exactly. It will spend around $11.8 billion of this windfall, give away another $19.3 billion in tax cuts and bank just over half of it ($35.2 billion) to the bottom line.

And in the shadow of an election, we can almost certainly expect further spending. The $9 billion in decisions taken but not announced – potentially a pre-election warchest – suggests that more tax cuts could also be on the way.

Verdict: Fail.

Our final verdict

The challenge in assessing budget management is separating good luck from good management. Governments will always seek to take credit for economic upswings that boost the bottom line.

Fiscal targets are there to keep them on the straight and narrow.

An objective assessment of the government’s performance against its own key targets suggests its good news budget is more mirage than magnificent management.The Conversation

Danielle Wood, Program Director, Budget Policy and Institutional Reform, Grattan Institute and Kate Griffiths, Senior Associate, Grattan Institute

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

Government hopes Jerusalem compromise will smooth Indonesian trade deal


Michelle Grattan, University of Canberra

Scott Morrison has announced a compromise position that recognises West Jerusalem as Israel’s capital but does not move Australia’s embassy there until a peace settlement determines Jerusalem’s final status.

Instead Australia will simply establish a Trade and Defence Office in West Jerusalem.

The government briefed Indonesia before the Prime Minister outlined the new Australian policy in a speech in Sydney on Saturday.

Morrison’s announcement in the run up to the Wentworth by-election that Australia would consider moving its embassy from Tel Aviv to Jerusalem caused Indonesia – a Muslim country that is hostile to Israel – to put on ice the conclusion of the free trade agreement between the two countries. It also led to criticism from Malaysia. The government is hoping the compromise will mollify the Indonesians, and enable the finalisation of the trade deal.

In a speech strongly sympathetic towards Israel and condemning the “rancid stalemate” that had emerged in the negotiations to resolve the Israeli-Palestinian dispute, Morrison outlined Australia’s position.

“Australia now recognises West Jerusalem, being the seat of the Knesset and many of the institutions of government, is the capital of Israel.

“And we look forward to moving our embassy to West Jerusalem when practical, in support of and after final status determination”.

Morrison said Australia would start work now to find a suitable site for an embassy in West Jerusalem.

“Out of respect for the clearly communicated preference of the Israeli government for countries to not establish consulates or honorary consular offices in West Jerusalem, the Australian government will establish a Trade and Defence Office in West Jerusalem.”

Morrison said the defence aspect of this office would be concerned with defence industry, not diplomatic activity, because the Israeli defence ministry was in Tel Aviv.

He also said that “recognising our commitment to a two-state solution, the Australian government has also resolved to acknowledge the aspirations of the Palestinian people for a future state with its capital in East Jerusalem”.

Bill Shorten described the Morrison announcement as “a humiliating backdown”.

Shorten said the government had “walked away from their initial rush of blood to the head”.

Asked whether a Labor government would reverse the decision, Shorten said the ALP believed “Jerusalem should be recognised as the capital of both Israel and Palestine as part of the final stages of a negotiated two-state peace deal”.

Labor would do this “at the final stage and we’re not at the final stage of a two-state peace deal”.

Shorten said he hoped the trade deal with Indonesia would go ahead.

There was no immediate reaction from Israel because of the Jewish Sabbath. At the time when Morrison announced that Australia was considering moving its embassy, this was warmly welcomed by the Israeli Prime Minister, Benjamin Netanyahu, so the Israelis might be disappointed with the Morrison halfway house.

The official Indonesian reaction gave no indication about whether the Morrison announcement would be enough to move along the trade agreement. An Indonesian statement called “on Australia and all member states of the UN to promptly recognise the state of Palestine and to cooperate towards the attainment of sustainable peace and agreement between the state of Palestine and Israel”, based on a two-state solution.

The Sydney Morning Herald reported a member of the main Indonesian opposition coalition, Dian Islamiati Fatwa, a candidate for next year’s election, was critical of the announcement and said the free trade deal should be put on hold.
The Australia Palestine Advocacy Network denounced the Morrison announcement saying that it “was appeasing extremist elements of the party while further slamming closed the door to peace”

“As Israel claims exclusive sovereignty over all of Jerusalem and refuses to abide by United Nations resolutions calling it to withdraw from occupied East Jerusalem, we cannot give them a free kick,” said Bishop George Browning, President of the Australia Palestine Advocacy Network.

SUNDAY UPDATE: Malaysia slams Morrison Jerusalem decision

Malaysia has issued a strong statement opposing the Australian decision to recognise West Jerusalem as the capital of Israel.

As statement from the Malaysian government said: “Malaysia firmly believes that this announcement, made before the settlement of a two-state solution, is premature and a humiliation to the Palestinians and their struggle for the right to self-determination”

“Malaysia reiterates its long standing position that a two-State solution, in which the Palestinians and the Israelis live side by side in peace, based on the pre-1967 borders, with East Jerusalem as the capital of Palestine is the only viable solution to the Palestinian-Israeli conflict.”The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

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

Morrison’s health handout is bad policy (but might be good politics)



File 20181213 110249 1y7kc3t.jpg?ixlib=rb 1.1
The funding proposal is no fix for Australia’s health system but it could take some political pressure off the Coalition in the lead up to the 2019 federal election.
OnE studio/Shutterstock

Stephen Duckett, Grattan Institute

The A$1.25 billion Community Health and Hospitals Program Prime Minister Scott Morrison announced this week should be awarded a big policy fail.

The move sets back Commonwealth-state relations by decades – and it’s unclear exactly how much money will actually be provided.

Rather than being based on any coherent policy direction, it appears designed to shore up support in marginal electorates.

Bad for Commonwealth-state relations

One of the complicating factors in providing health care to Australians is the fact that the Commonwealth and states each have leadership roles in different parts of the system: the Commonwealth for primary care; and the states for public hospitals.

Health professionals yearn for the Holy Grail of a single level of government being responsible for all aspects of a patient’s care. That quest has proved illusory. But recent policy direction has at least sought to clarify the roles of the two levels of government.




Read more:
Public hospital blame game – here’s how we got into this funding mess


For the past five years, the states have been acknowledged as the “system managers” of the public hospital system. A rational, formula-driven funding framework has been created.

Under this framework, the Commonwealth shares the cost of growth in public hospital activity with the states. This exposes the Commonwealth directly to growing costs of technology-driven needs and giving it an incentive to work with the states to meet needs in the most efficient way.

This framework means there is one level of government to whom all public hospitals are accountable: the state. And it means voters can hold their state government accountable for hospital planning and management.

The new Morrison proposal tramples all over this policy rationality in the interests of electoral expediency. It replaces state-based planning with submission-based funding, which will enable a politician with a whiteboard in Canberra to override state priorities in favour of projects which have the greatest electoral appeal in targeted marginal seats.

It makes accountability for the overall system more confusing, and it assumes Canberra knows best.

It is a federalism fail.

An opaque policy

Labor ran a devastating campaign in the July federal by-elections, especially in the Queensland seat of Longman, which involved calculating and publicising precisely how much worse off the local hospital was under the Liberal health policy – where the Commonwealth funds 45% of hospital growth – compared with Labor’s 50% sharing policy.

In the Longman case, Labor asserted there was a A$2.9 million cut to Caboolture Hospital based on the decisions taken in the 2014 Abbott/Hockey “slash and burn” budget.

Scott Morrison’s new cash splash is no doubt designed to overcome this political weakness for the Coalition.




Read more:
Why scare campaigns like ‘Mediscare’ work – even if voters hate them


However, unlike Labor’s funding, which is ongoing, it’s unclear whether the extra largess the Coalition is offering will continue beyond the budget “forward estimates” (that is, the next four years). It’s unclear how much will be devoured from existing Commonwealth funding agreements, such as the dental agreement, which are coming to an end.

The Commonwealth has responsibility for most aspects of policy to address social determinants of health, particularly employment and income policies. Rational health policy would recognise the importance of considering these issues and balancing the health benefits of, for example, lifting the Newstart allowance, against funding for specific health initiatives. There is no hint this has happened with this announcement.

New handouts under the Morrison package will be portrayed as being for specific areas of “high political need”. But the reality is funding will eventually be swept into the Grants Commission allocation process and redirected according to the Grants Commission formula.

This may restore some rationality into the health handout, albeit with a lag of a few years. But the actual level of funding to be allocated to specific areas will be shrouded in Grants Commission opacity. Insiders will be able to follow the money, but voters will be kept in dismal ignorance about how much they will benefit in the long-term – after the gloss of a local funding handout has worn off.

This policy is a transparency fail.

Politics versus policy

The Community Health and Hospitals Program lists four feel-good, worthy funding targets:

  • specialist hospital services such as cancer treatment, rural health and hospital infrastructure
  • drug and alcohol treatment
  • preventive health, primary care and chronic disease management, and
  • mental health.



Read more:
Morrison government promises $1.25 billion for health care


Everyone has a potential place in this funding Nirvana. Lobby your local MP, and your local hospital or community health program might be the lucky health policy lottery winner!

Provided voters don’t see this as a cynical political exercise – and that is a big risk in an electorate which already ranks politicians low on the trustworthiness scale – then the new policy could be smart politics. We won’t know until the votes in next year’s federal election are counted.

In the meantime, given the drubbing the Liberals received in last month’s Victorian state election, the biggest challenge for the Morrison Government might be deciding which electorates are now marginal and worth shoring up.The Conversation

Stephen Duckett, Director, Health Program, Grattan Institute

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