Vital Signs: the ‘ball-tampering’ budget trick they don’t want you to know about



File 20190418 28103 iz9jvq.jpg?ixlib=rb 1.1
Just not cricket: Politicians make promises but obfuscate how those promises will be paid for.
Shutterstock

Richard Holden, UNSW

The first week of the federal election campaign has been dominated by heated disputes about the numbers behind both government and opposition policies.

Both sides are under pressure. Notably, the cost of Labor’s 45% emissions-reduction target has been rightly questioned.

Opposition leader Bill Shorten’s answer to reporters that “our 45% reduction, including international offsets, has the same economic impact as the Liberals’ 26%” didn’t exactly engender confidence.

But the folly of Labor’s environmental plans is another tale for another column.

Our focus here is on how the Coalition is going to cut personal income tax by A$158 billion and balance the budget.

Wild assumptions

Earlier this week the Grattan Institute pointed out the Coalition’s budget assumption that expenditure will fall from 24.9% of GDP in 2018-19 to 23.6% during the next decade amounts to cutting spending by more than A$40 billion a year in 2029-30.

This raised the natural question of exactly where those cuts will come from. According to the government, it’s from things such as lower welfare payments and lower interest payments on government debt.




Read more:
Your income tax questions answered in three easy charts: Labor and Coalition proposals side by side


The Grattan Institute’s Danielle Wood described these assumptions as “heroic”. Yup.

Now, you might wonder why the Coalition’s plan to cut personal income tax doesn’t fully kick in until 2025. Or, for that matter, why its “enterprise tax plan” on corporate tax is scheduled to be phased in over a decade.

Playing outside the rules

The short answer is that for the four years following a budget – the so-called “forward-estimates period” – there are rules about banking spending cuts.

During those four years, cuts need to be specified, or economic parameters need to be varied. And with good reason. That way the actual assumptions the government is making, however fanciful they may be, are plain for all to see.

But beyond the four-year period no such discipline applies. This allows governments of all stripes to make very specific claims about, for example, tax cuts they plan to deliver without having to be at all specific about how they are going to pay for them.

This is all just a conjuring trick. Politicians try to get us to focus on the tangible, specific thing we want – tax cuts, more money for hospital or schools, free cancer treatment – while obfuscating how they are going to pay for it.

It’s dirty pool. It’s not cricket. It’s the kind of thing a mob accountant does. Pick your favourite metaphor.

Bipartisan failure

Of course, treasurer Josh Frydenberg and finance minister Mathias Cormann didn’t invent this unscrupulous practice. Wayne Swan and Penny Wong, as treasurer and finance minister respectively, were guilty of these kind of shenanigans too.

The specifics of the current round can’t even be debated properly, because ten-year “guesses” don’t lay out specific assumptions that can be checked for internal consistency and plausibility.

Sadly, it seems futile to hope for cultural change among politicians and a shift to integrity.

To some extent, we need to be the change we want.

The fact both sides of politics so brazenly play us for suckers is as much our fault as it is theirs. If politicians thought there were real consequences at the ballot box for this sort of behaviour, they would think twice.

But there aren’t. When both sides are guilty it’s understandable that voters become so cynical that they just factor it in and look to other issues.

If more voters were willing to make “cooking the books” a decisive issue, that might change.

Need for incentives

Politicians respond to incentives. My favourite illustration of that is how United Nations officials used to be exempt from parking tickets in New York City. As economists Ray Fisman and Ted Miguel showed, when norms alone governed behaviour, officials from corrupt countries basically parked wherever they wanted. Once city authorities got the ability to confiscate diplomatic licence plates of violators, things improved radically.

So as long as the mainstream media refuses to issue our politicians with the moral equivalent of parking tickets for cooking the books of public debate, politicians are going to keep doing it.

Now, many commentators do exactly that – and some of them are brilliant and fearless. But other folks, on the right and on the left, seem to have the attitude that both sides play fast and loose with the facts so it’s fine for them to call out whichever side they personally like the least.

Actually, scratch “seem to have the attitude”. They’ll tell you that to your face.

When Australian cricket captain Steve Smith and vice-captain David Warner got caught in a ball-tampering racket, there were consequences.

When our elected representative do something similar, but with our nation’s finances –with consequences for growth, employment, welfare benefits, retirement incomes, and climate change – they get a pass.

That’s got to stop; and we’ve all got our part to play.The Conversation

Richard Holden, Professor of Economics, UNSW

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

Advertisements

Business-as-usual record on transport leaves next government plenty of room to improve


Marion Terrill, Grattan Institute

This article is part of a series examining the Coalition government’s record on key issues while in power and what Labor is promising if it wins the 2019 federal election.


Election season means transport season: just as the recent New South Wales and Victorian elections gave us massive new transport promises, so too is the federal government relying on the enduring popularity of new roads and rail. But look beyond the rhetoric and the past three years have been largely business as usual. That leaves plenty of room for the next government, of whatever colour, to take a fresh look at how transport promises are made – and plenty of room to improve.

Last week’s federal budget committed to transport expenditure of A$7.4 billion in 2019-20, and A$33 billion over the four-year forward estimates period.




Read more:
Budget transport spending is about par for the course, but the pattern is unusual


The government claims it’s spending a record A$100 billion over a decade. Yet the opposition claims: “Across the four years of this budget, Commonwealth investment in infrastructure actually falls, from A$8 billion to A$4.5 billion.” And Infrastructure Partnerships Australia says recent budgets are down on the long-term average by about A$11 billion over the forward estimates.

How much is the government actually spending?

With such polarised views, who are we to believe?

In reality, the expenditure for 2019-20 is absolutely normal. At 0.37% of GDP, it’s close to the midpoint of spending on transport under treasurers Scott Morrison, Joe Hockey and Wayne Swan. In each of the past ten budgets, annual transport spending in the year following the budget has been 0.26-0.53% of GDP.

What is different is the extent of promises that lie beyond the forward estimates period. The move to a ten-year pipeline of promises might be fine in theory, but an interested elector can rely only on what’s in the budget papers. And from that they would conclude there’s nothing unusual to see here.




Read more:
$500m for station car parks? Other transport solutions could do much more for the money


A new enthusiasm for equity investments

All these figures concern grants to state governments, which are responsible for transport networks. But, in addition to these grants, the federal government has developed an enthusiasm for funding projects “off-budget”. In the past two years, the Commonwealth made equity investments of A$9.3 billion in Inland Rail and A$5.3 billion in Western Sydney Airport.

The Charter of Budget Honesty states that an investment can be treated as an off-budget equity injection only if the government has a “reasonable expectation” of recovering the investment. In other words, the entity must be expected to make a positive return over time.

But this gives governments a lot of latitude. A positive rate of return is not the same as a commercial one. And there seems little likelihood of commercial returns in either case.

For Inland Rail, it’s no secret that the Australian Rail Track Corporation will never be asked to repay the A$9.3 billion, even when project revenues start to flow in 2025. Let’s hope the finance minister is right to insist there’s no prospect the project will need even more taxpayer support, despite the risks identified in the budget papers themselves and by the Commonwealth Auditor-General. With no expectation of repayment, there is no practical difference between this “equity investment” and a grant.

For Western Sydney Airport, the government decided to build the airport itself after Sydney Airport Corporation declined its right to build it. The airport operator said the offer as it stood was “deeply uneconomic”. It cited operational, traffic, financial and political risks.

So it’s hard to share the confidence of the then treasurer (and now prime minister), Scott Morrison, when he said the new airport will “generate an income stream that’s going to pay for itself”.

In both cases, if a future government ends up writing down the fair value of these assets, this will appear on the balance sheet as a change to “other economic flows”. It won’t be separately identified. Nor will the write-down show up in the underlying cash balance figure that the media spotlight highlights on budget night.

The unavoidable conclusion is that pushing transport spending off-budget seriously diminishes not only the discipline that comes from competing for funds through the budget process, but also transparency in how public money is being spent.




Read more:
A closer look at business cases raises questions about ‘priority’ national infrastructure projects


A foray into road pricing is stillborn

In November 2016 the government took an unusually bold step: it committed to holding an inquiry into road-user charging. The then minister for urban infrastructure, Paul Fletcher, was in good company. His commitment to commission a review led by an eminent Australian was in response to a 2016 recommendation from Infrastructure Australia, which invoked a similar recommendation in the 2015 Harper Review of competition policy, which in turn referred to a 2014 Productivity Commission recommendation. And the backdrop to all these reports was a recommendation of the 2010 Henry Tax Review.

But time passed and no eminent person was appointed. More time passed, ministers moved portfolio, and no eminent person was appointed. Finally, in October 2018, current minister Michael McCormack declined to commit to the inquiry.

An inquiry is no more than an inquiry, but a non-inquiry is a commitment to the status quo. Roads funding and roads investment are serious topics, and many commentators have argued that they are the laggards of regulatory reform.

A change to how road use is funded could significantly alter which roads are funded, what maintenance is done, and how networks are managed. It appears to have been all too much for this government. This task awaits a future government.




Read more:
Delay in changing direction on how we tax drivers will cost us all


The alternative government’s most important promises aren’t the sexy ones about electric vehicles. They are Labor’s promises that Infrastructure Australia should assess projects before the decision to invest, and to release assessed business cases. These promises may sound worthy and a little dull, but in reality they are big and welcome commitments.

Less obvious is how to square them with federal Labor’s promise to advance high-speed rail, or the promise to work with the Victorian premier “to deliver the visionary Melbourne Suburban Rail Loop”. Both of these are massively expensive projects with nothing approaching an assessed and publicly available business case.

It would be a significant improvement if whichever party wins government next month were to commit to, and follow through on, careful assessment of transport gaps and problems, consideration of the various feasible solutions, and rigorous evaluation of the preferred approach. And it’s not enough just to do this; it should be done in public.

Let’s hope.




Read more:
Missing evidence base for big calls on infrastructure costs us all


The Conversation


Marion Terrill, Transport and Cities Program Director, Grattan Institute

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

Poll wrap: Labor’s Newspoll lead falls to 51-49 on dubious assumptions as Palmer and Coalition do a deal



File 20190429 194633 1mrxn05.jpg?ixlib=rb 1.1
Three weeks before the election, the UAP has been included in the party readout for the first time.
AAP/Glenn Hunt

Adrian Beaumont, University of Melbourne

With 19 days to go until election day, this week’s Newspoll, conducted April 26-28 from a sample of 2,140, gave Labor just a 51-49 lead, a one-point gain for the Coalition since last fortnight. Primary votes were 38% Coalition (down one), 37% Labor (down two), 9% Greens (steady), 5% for Clive Palmer’s United Australia Party (UAP) and 4% One Nation (steady).

Three weeks before the election, the UAP has been included in the party readout for the first time. Prior to this change, the tables show that the UAP had 2% support in the post-budget Newspoll and 3% last fortnight – they were previously published as Others. According to pollster David Briggs (paywalled), both UAP and One Nation preferences are assumed to flow at 60% to the Coalition.

Given results at the WA and Queensland 2017 elections and at the Longman 2018 federal byelection, where One Nation preferences flowed at over 60% to the Coalition, this assumption is justified for One Nation, and was the standard assumption from early 2018.

However, the UAP has no electoral record. At the 2013 election that Palmer contested under the Palmer United Party, PUP preferences split 53.7-46.3 to the Coalition. At that election, PUP recommended preferences to the Coalition in all House seats, the same situation as now, and the Labor government was on the nose.

45% were satisfied with Scott Morrison’s performance (steady) and 46% were dissatisfied (up two), for a net approval of -1. Bill Shorten’s net approval was up two points to -12, his best net approval since May 2016. Morrison led Shorten by 45-37 as better PM (46-35 last fortnight).

Morrison was trusted to keep campaign promises over Shorten by 41-38. In some evidence for UAP preferences splitting to the Coalition, UAP voters favoured Morrison on this question by 53-13, though this is from a subsample of about 100 UAP voters.

The change in party readout and the preference assumptions for UAP explain the narrowing in this poll from 52-48 to 51-49. But there has been a clear overall narrowing trend this year from the last three Newspolls of 2018, which were all 55-45 to Labor. Morrison’s relatively good ratings and greater distance from the events of last August are assisting the Coalition.

The Poll Bludger’s BludgerTrack currently has Labor winning 87 of the 151 seats on a 52.4-47.6 two party vote. The Coalition’s primary vote in Newspoll is 4% down from 2016, but preference changes since 2016 could assist the Coalition, and that is reflected in Newspoll. However, Ipsos polls have shown no difference between last election and respondent allocated preferences since Morrison became PM.




Read more:
Post-budget poll wrap: Coalition gets a bounce in Newspoll, but not in Ipsos or Essential


In economic news, the ABS reported on April 24 that there was zero inflation in the March quarter. While this was bad for the overall economy, it is good for consumers worried about the cost of living. Lower oil prices in late 2018 meant petrol prices fell in January, but have since increased.

YouGov Galaxy poll: 52-48 to Labor

A YouGov Galaxy poll for the Sunday News Ltd tabloids, conducted April 23-25 from a sample of 1,012, gave Labor a 52-48 lead, a one-point gain for the Coalition since late March. Primary votes were 37% Coalition (up two), 37% Labor (steady), 9% Greens (down one), 4% One Nation (down four), 4% UAP (steady) and 9% for all Others (up three). YouGov Galaxy also conducts Newspoll.

Voters were asked if they were impressed or unimpressed with the campaign performances of six party leaders, and all performed poorly. Morrison was the best with a 54-38 unimpressed score, Shorten had a 60-31 rating, Nationals leader Michael McCormack a 38-8 rating, Greens leader Richard Di Natale had a 44-13 unimpressed score, Pauline Hanson a 67-20 rating and Clive Palmer a horrible 69-17 unimpressed rating.

The many don’t knows for Di Natale and McCormack reflect that most people don’t know very much about them. While ratings for Morrison and Shorten would be based to some extent on their campaign performance, those for Hanson and Palmer are much more likely based on voters’ opinions of them before the campaign.

Palmer’s preference deal with the Coalition

Under a preference deal between Clive Palmer’s United Australia Party (UAP) and the Coalition, Palmer would direct preferences to the Coalition in House seats in return for Coalition preferences in the Senate. It is important to note that voters make the choices in both houses now, and can ignore preference recommendations.




Read more:
Grattan on Friday: All is forgiven in the Liberal embrace of Palmer


In 2013, Palmer recommended preferences to the Coalition in all seats, and they flowed to the Coalition by a 53.7-46.3 margin; his party won 5.5% of the national vote in the House. While this split was not more pro-Coalition, analyst Peter Brent suggests that Palmer voters were more inclined to preference Labor, and the preference recommendations had some impact.

If the UAP won 4% of the national vote and their preference recommendations convinced 10% of their voters who would otherwise preference Labor to preference the Coalition, the Coalition’s national two party vote would by 0.4% higher than otherwise.

However, this analysis ignores the risk of doing a deal with someone as disliked by the general public as Palmer. In a January Herbert seat Newspoll, 65% had a negative view of Palmer, and just 24% a positive view.




Read more:
Poll wrap: Coalition gains in first Newspoll of 2019, but big swings to Labor in Victorian seats; NSW is tied


So while a preference deal with Palmer could earn the Coalition some more preferences, it could also damage their overall primary vote, hurting them more than helping. Labor will attack Palmer over the sacked Queensland Nickel workers, and that could impact the Coalition’s support among people with a lower level of educational attainment.

Does early voting make a difference to the results?

Pre-poll voting booths for the election are open from today. Under Australia’s compulsory voting, people are required to vote, and those who vote early are unlikely to have voted differently if they voted on election day unless there was a dramatic late-campaign development. So there is likely to be little overall impact of early voting on the results. In voluntary voting systems like the US, early voting gives people who need to work on election day a greater opportunity to vote.




Read more:
Three weeks of early voting has a significant effect on democracy. Here’s why


If one party was trending up in the polls as election day approached, early voters will decide their vote earlier, and so the trend will also be reflected in early votes.

While early voting overall has little impact, the types of people who vote early can differ markedly from the election day vote. Big pre-poll booths will not report until very late on election night, and the results could change significantly depending on those booths – as happened in the October Wentworth byelection.




Read more:
Wentworth byelection called too early for Phelps as Liberals recover in late counting


The Conversation


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

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

Labor’s childcare plan: parents, children, and educators stand to benefit, but questions remain


File 20190428 194616 rzox.jpg?ixlib=rb 1.1
Hundreds of thousands of Australians parents would be in work if childcare was more affordable.
from shutterstock.com

Jen Jackson, Victoria University

Labor’s proposed A$4 billion reform to the childcare subsidy on Sunday confirms that early childhood is a key policy issue this election. This is on top of Labor’s previous announcement of 15 hours of funded preschool for every Australian three-year-old.

The latest announcement will no doubt be welcomed by families balancing the costs of childcare against the benefits of participation in paid work. In 2015, the Productivity Commission estimated around 165,000 Australian parents would like to work more, but were prevented due to poor accessibility or affordability of suitable childcare.




Read more:
Shorten promises $4 billion for child care, benefitting 887,000 families


Under Labor’s proposal, families on incomes up to A$174,000 with children under five would be better off on average by A$26 a week, or A$1,200 a year per child. Most families earning up to A$69,000 would get their childcare free. Currently, they receive a subsidy of 85%. Labor’s proposal would save them up to A$2,100 annually per child.

The current subsidy gradually tapers down as earnings increase. The lowest subsidy available is 20% for the highest-earning families, before it cuts out at A$351,258.
Families on incomes above A$174,000, under Labor’s plan, would continue to receive the same level of support as under current arrangements.

The current subsidy was introduced as part of the Coalition’s major childcare reforms (worth A$3.5 billion) in 2018, which included a means-tested subsidy and removal of annual caps. The reforms benefitted an estimated one million lower-income families – but also left around 280,000 families worse off, including families with neither parent in work.

ANU modelling had predicted that while the reforms would benefit low-income families, the activity test would mean families not working or studying would be at risk of missing out.




Read more:
Childcare funding changes leave disadvantaged children with fewer hours of early education


This is where early childhood policy gets complicated. Policies can be motivated by different goals. The Coalition reforms were aimed at encouraging parental workforce participation. Labor’s proposal for the childcare subsidy seem similarly motivated.

But parents are not the only beneficiaries of childcare subsidies. Quality childcare also benefits children’s learning. Many childcare programs for four-year- olds (and increasingly, three-year-olds), incorporate preschool. For children of all ages, Australian childcare providers must provide a play-based learning program, guided by the national framework.

That’s why childcare and preschool services are all known as early childhood education and care: whenever children are being cared for, they are also learning. Even a nappy change offers opportunities to support children’s learning, as skilled educators use playful, caring interactions to help young children develop skills like communication, trust and well-being.

Educators can also help families recognise these opportunities, so learning continues at home. Children in low-income households often have fewer opportunities to learn, due to factors such as stress and limited resources for investment.

By supporting access to quality early childhood services, governments can help families learn everyday ways to enhance their children’s learning.




Read more:
Both major parties are finally talking about the importance of preschool – here’s why it matters


To maximise benefits for children, all early childhood services need skilled, professional staff. Labor’s promised wage increase of 20% over eight years for early childhood educators addresses an issue that has been in the too-hard basket for too long.

Research has shown many Australian early childhood educators are paid so little they are financially dependent on others in their households — ironically while enabling financial independence for other working women.

Low wages place downward pressure on the quality of early childhood programs. Educators’ qualifications are lowest in low-income communities, where families cannot afford to meet the costs of higher wages. Government subsidies can help to break the link between educators’ wages and families’ ability to pay fees, so the best educators can reach the children who most need them.

Of course, the devil is in the detail when it comes to policy implementation. Labor has not specified how the wage increases will be delivered, instead committing to further consultation with the sector. Big questions remain about how government subsidies – to parents or educators – will be absorbed into a sector with for-profit and not-for-profit providers.

Close monitoring of the impact on childcare costs will be essential. Labor’s plan includes asking the Australian Competition and Consumer Commission to investigate “excessive” childcare fees. But can support for families be increased without stimulating an increase in fees? Can educators be supported to earn a fair wage, while keeping prices fair for families?

There is much to be gained by engaging with these questions. When parents are working, the economy benefits. When children are learning, everyone benefits, as the impact of early learning lasts throughout school and beyond. Countries like Sweden and Finland show what may be possible when parents’ and children’s needs are prioritised equally.

We owe it to Australia’s children to keep these issues on the election agenda.The Conversation

Jen Jackson, Education Policy Lead, Mitchell Institute, Victoria University

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

Election tightens in Newspoll – Labor lead narrows to 51-49%


Michelle Grattan, University of Canberra

The Coalition has made up ground in Newspoll, now trailing Labor by just 49-51%, compared with 48-52% a fortnight ago.

The tightening of the May 18 race, coming after Scott Morrison was seen to out-campaign Bill Shorten early on, will boost Coalition morale as pre-polling begins on Monday.

But both sides have lost support on their primary votes in the Newspoll, published in the Australian, while Clive Palmer’s United Australia Party is polling 5%, becoming the leading minor party behind the Greens.

Labor is down 2 points to 37%; the Coalition has fallen a point to 38%. The Greens remain on 9% and One Nation is static on 4%.

Shorten’s personal ratings are encouraging for him – he has had a 2 point rise to 39% in his satisfaction rating and reduced the gap on the better prime minister measure.

While Morrison still has a substantial lead as better PM, Shorten has increased his rating by 2 points to 37% and Morrison has fallen a point to 45%.

Morrison’s approval stayed on 45% while his disapproval was 46%, up 2 points, in the poll of 2136 voters taken Friday to Sunday.

Morrison and Shorten have arrived in Perth for Monday evening’s debate, their first face-to-face encounter of the campaign, which has under three weeks to run.

In a day of mega spending, Shorten on Sunday promised A$4 billion over three years to provide 887,000 families with relief on their child care costs; $2.4 billion over the forward estimates for a pensioner and seniors dental plan, and $537 million over the forward estimates to lift the pay of child care workers.




Read more:
Shorten promises $4 billion for child care, benefitting 887,000 families


Under Labor’s dental plan, age pensioners and those holding a Commonwealth seniors’ health card would be entitled to up to $1000 worth of free essential dental care every two years. Some three million people would be eligible under the plan, which would expand Medicare.

Shorten told a rally of volunteers in Melbourne: “Under a Labor government, after May 18 if you’re a pensioner or a seniors health care card holder your dental work will be backed by Medicare for the rest of your life. This is the fair go in action”.

Shorten said an ALP government over the next eight years would boost the average wage of child care workers by about $11,300. This would be on top of any rise in the award rate.

It would be “a 20% pay rise for the early educators because we value early education,” he said.

“This is an investment in quality early education, for good jobs and a strong economy of the future.

“And this is an investment in pay equity for a female-dominated industry. A fair reward for a workforce that has about 96% women, has been undervalued and underpaid for too long.”

Labor says the pay rise would not increase child care fees because the government would fully fund it.

In an initiative on cyber security the government is announcing it would to invest $156 million “to protect older Australians, small businesses and national security assets from the risk of cyber-attacks”.

A range of measures to combat cyber crime would include developing “a comprehensive online cyber security training program providing practical cyber advice for small businesses, older Australians and Australian families”.

The government says cybercrime costs the economy more than $1 billion a year.

In the vulnerable state of Victoria, the government is sandbagging the Liberal heartland seats of Higgins and Kooyong with a promise of $260 million to eliminate a level crossing on busy Glenferrie road in the suburb of Kooyong.

The project would take the train line under the road. The crossing is technically in Higgins but right on the border of Treasurer Josh Frydenberg’s seat of Kooyong. Frydenberg is being targeted by GetUp and various candidates especially on climate change.

In another Victorian seat, Flinders, Health Minister Greg Hunt has been dealt a blow by the decision of Liberal defector Julia Banks to preference Labor ahead of him.

Coalition campaign spokesman Simon Birmingham on Sunday accused her of walking away from her principles. “You’ve really got to wonder about the various positions of Julia Banks, who was until not that long ago urging people to vote Liberal and now is suggesting she will preference Labor. […] I think it shows gross inconsistency on her part”.




Read more:
View from The Hill: Palmer flypaper sticky for both sides


Clive Palmer on Monday is due to formally announce his preference deal with the Liberal party.

The debate about the debates has continued with Morrison wanting the third debate to be hosted by the ABC next week, on Tuesday, Wednesday or Thursday nights.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.

Shorten promises $4 billion for child care, benefitting 887,000 families


Michelle Grattan, University of Canberra

In a big hit announcement before the start of pre-polling, Bill Shorten on Sunday will pledge a A$4 billion boost for child care, making it cheaper for every family earning up to $174,000.

From July 2020, 887,000 families would benefit from the ALP plan, with some being up to $2,100 better off.

Under the initiative:

  • families with children under five on incomes up to $174,000 would be better off on average by $26 a week – $1,200 a year – per child

  • the majority of families earning up to $69,000 would get their child care free. This would save them up to $2,100 annually per child.

Families on incomes above $174,000 would continue to receive the same level of support as under current arrangements.




Read more:
View from The Hill: Palmer flypaper sticky for both sides


The plan is central to Labor’s campaign on cost of living, with Shorten describing it as “massive cost of living relief for nearly one million families struggling with the costs of child care”.

“Under the Liberals, the costs of child care has gone up 28%, costing families using long day care $3,000 more a year.

“Labor will increase the subsidy families receive, we will kick start the process to limit out-of-control child care price increases, and we will review the impact of the system on vulnerable and very low-income families,” Shorten says.

“This is a $4 billion investment in early education, in working parents and in helping families with the rising cost of living. Labor can pay for cheaper child care for working families because unlike Scott Morrison and the Liberals, we aren’t giving bigger handouts to the top end of town,” Shorten says. The $4 billion cost is over three years.


Source: ALP

The main elements of Labor’s plan include:

More child care fee support

The subsidy rate would be increased from 85% to 100% up to the hourly fee cap (currently $11.77 per hour for long day care) for families earning up to $69,000 who meet the activity test. This would make child care free, or almost free, for up to 372,000 families.

The present tapered reduction would be updated to reflect the higher subsidy rate.

Families earning between $69,000 and $100,000 would receive a subsidy rate between 100% and 85%, up to the hourly fee cap.

Families earning between $100,000 and $174,000 would receive a subsidy rate between 85% and 60% up to the cap – an effective increase of 10%.

Families accessing approved Centre Based Child Care, Family Day Care and Outside School Hours Care, including holiday care, would all benefit from the higher subsidy.




Read more:
Lies, obfuscation and fake news make for a dispiriting – and dangerous – election campaign


Cracking down on excessive fee increases

Labor would give the Australian Competition and Consumer Commission a new role of investigating excessive fee increases and unscrupulous child care providers. Findings would be made public through mychildcarefinder.

The ACCC would also look at mechanisms to ensure greater controls on child care fee increases to keep child care affordable.

Reviewing the system for vulnerable children

Labor says that in the nine months of the current subsidy system, the number of vulnerable and very low-income families using it has fallen.

“Reports suggest the numbers accessing the Childcare Safety Net have fallen by almost half, from 35,000 to 21,000.

“Labor will urgently review the new system to make sure that vulnerable and low-income families and children aren’t falling through the cracks,” Shorten says.

Labor has already committed to every three-year-old child being able to receive 15 hours of subsidised preschool. It has also said it would extend the current arrangement for four-year olds.

Shorten says this would create “a two-year program to support the most important years of a child’s development and ensuring our kids don’t fall behind the rest of the world”. For many children this would be free or nearly free.




Read more:
Labor’s crackdown on temporary visa requirements won’t much help Australian workers


Labor is also set to make an announcement on boosting the wages of child care workers, who are among the low paid.

The first votes will be cast at pre-polling stations on Monday, as the campaign ramps up in its final three weeks. Scott Morrison and Shorten will meet in Perth late Monday for their first face-to-face debate.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 brings immigration centre stage with freeze on refugee intake


Michelle Grattan, University of Canberra

Scott Morrison will seek to bring the debate over immigration and refugees to the centre of the election campaign, with an announcement that a Coalition government would freeze the humanitarian intake.

He will contrast this with Labor plans for an increase in the humanitarian component, claiming this would cost many billions of dollars and challenging Bill Shorten to produce more detail about the consequences.

So far immigration has not had a prominent place in the campaign. The border security issue went quiet when the expected large number of applications for transfer from Nauru and Manus after the medevac legislation failed to materialise.




Read more:
View from The Hill: Palmer flypaper sticky for both sides


Morrison on Sunday will announce that the number of migrants coming to Australia as refugees will be frozen at 18,750.

He will appear at a rally with John Howard, who as prime minister was strongly associated with a tough border policy.

The government has already announced a cap on the migration program of 160,000. The previous cap was 190,000, although the actual intake had fallen to about 160,000.

It will contrast its freeze on the humanitarian intake with Labor’s plan to increase it to 32,000 by 2025-26.

Morrison will also outline the proposed makeup of the humanitarian program for the first time. This will include an overall target of 60% of the offshore component allocated to women. Women made up 50.8% in 2017-18.

The Coalition’s Women at Risk program, as a proportion of the offshore component, would be increased from 14% in 2017-18 to 20% (3,500) in 2019-20.




Read more:
Labor’s crackdown on temporary visa requirements won’t much help Australian workers


The government also plans to try to boost the number of refugees and humanitarian entrants settled in regional areas from a target of 30% to 40% in 2019-20. But it stresses that people would not be forced to areas that did not want them.

Some 27% of the humanitarian program will be reserved for Women at Risk and the Community Support Program, which is private sponsorship from church and community groups.

In comments ahead of the Sunday announcement, Morrision said: “We’ve got our borders and the budget under control. We make decisions about who comes here based on what’s in Australia’s interests.

“Australia isn’t just about growing our population – it’s about quality of life. We’re capping and freezing our immigration growth so our government’s record A$100 billion congestion busting program for roads and rail can catch up and take the pressure off our cities.”




Read more:
State of the states: Palmer’s preference deal and watergate woes


Morrison said the government had been upfront that it was reducing the migration intake cap and capping the number Australia let in under its humanitarian program – that was one of the most generous in the world.

“We are telling where we’ll be taking migrants from, who they will be, the skills we want them to have, and working with regions to settle people in towns that want and need more workers, skills and students.

“It’s time for Bill Shorten and Labor to front up and tell Australians about their $6 billion plan to massively increase immigration and where they’re going to house thousands of extra people.

“Labor’s immigration bill is going to go through the roof and the only way they can pay for it is taking $387 billion in higher taxes from Australians.”

The government some time ago put a costing of $6 billion over the medium term on increasing the government-funded humanitarian intake from 17,750 to 27,000 by 2025-26.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.

Poll wrap: Palmer’s party has good support in Newspoll seat polls, but is it realistic?



File 20190424 121262 hzdtbg.jpg?ixlib=rb 1.1
Support for Clive Palmer’s UAP in recent polls is likely overstated.
AAP/Dave Hunt

Adrian Beaumont, University of Melbourne

With 23 days to go until the May 18 election, Newspoll had seat polls of Herbert, Lindsay, Deakin and Pearce. All four polls were conducted April 20 from samples of 500-620. Clive Palmer’s United Australia Party (UAP) had the support of 5% in Deakin, 7% in Lindsay, 8% in Pearce and 14% in Herbert.

Seat polls are notoriously unreliable. In addition, the UAP has clearly been added to the party readout in these seats. Pollsters regularly ask for Labor, the Coalition, the Greens and One Nation. All other voters are grouped as “Others”, although a follow-up question can be asked – if Other, which other?

The strongest indication that UAP support is overstated in these seat polls is that the all Others vote is unrealistically low in three of the four seats polled. In Herbert, Pearce and Deakin, all Others are at just 2%, while they are 8% in Lindsay. It is likely that many of those who will vote for Others at the election said they would vote for the UAP as that party was in the readout.

Herbert was tied at 59-50, unchanged from the 2016 election. In Lindsay, Labor was ahead by 51-49, also unchanged. The Liberals led by 51-49 in Deakin, but this was a solid swing to Labor from 56.4-43.6 to the Liberals at the 2016 election. In Pearce, there was a 50-50 tie (53.6-46.4 to Liberals at the 2016 election).

Primary votes in Herbert were 31% LNP, 29% Labor, 14% UAP, 10% Katter’s Australian Party, 9% One Nation and 5% Greens. In Deakin, primary votes were 46% Liberals, 39% Labor, 8% Greens and 5% UAP. In Pearce, primary votes were 40% Liberals, 36% Labor, 8% Greens, 8% UAP and 6% One Nation. In Lindsay, primary votes were 41% Liberals, 40% Labor, 7% UAP and 4% Greens.

Relative to the national swing, Labor is expected to struggle in the Townsville-based seat of Herbert due to the Adani coal mine issue. In Lindsay, the retirement of Labor MP Emma Husar in controversial circumstances may have made it vulnerable.

Bad ReachTEL seat polls for Labor in Bass and Corangamite

There were two ReachTEL seat polls conducted last week from samples of 780-850. In the Labor-held Tasmanian seat of Bass, the Liberals had a 54-46 lead. In the Victorian seat of Corangamite, which is on no margin following a redistribution, the Liberals led by 52-48. The Bass poll was conducted for the Australian Forest Products Association, and the Corangamite poll for The Geelong Advertiser.

Bass and Tasmania have an older demographic than Australia overall. I wrote last week that, according to Newspoll data, those aged 50 or over are best for the Coalition. Corangamite also has an older demographic than the country overall.




Read more:
Poll wrap: Labor maintains its lead in Newspoll, while One Nation drops; NSW upper house finalised


Labor won Bass by 56.1-43.9 at the 2016 election, a 10.1% swing to Labor. But at the 2013 election, Bass was the best of the five Tasmanian seats for the Liberals, and this also occurred at the March 2018 state election. Labor’s big 2016 swing may have been caused by the unpopularity of hard-right Liberal MP Andrew Nikolic. In the July 2018 federal byelections, Labor had an underwhelming victory in Bass’s neigbouring seat, Braddon.

While seat polls are unreliable, the Corangamite and Bass polls are evidence that, as reported by The Poll Bludger originally from The Australian Financial Review, Scott Morrison appears to have a greater appeal to blue-collar and outer suburban voters than Malcolm Turnbull, and this has helped the Coalition in seats like Bass and Corangamite.

One Nation to contest 59 of the 151 House seats

Nominations for the election were declared this week. Labor, the Coalition, the Greens and the UAP will contest all 151 House seats. One Nation will contest 59 seats, with Fraser Anning’s Conservative National Party running in 48 seats, Animal Justice in 46 and the Christian Democrats in 42.

Until now, national pollsters have assumed One Nation was running in all seats for their polls. With One Nation only running in 39% of seats, most pollsters will reduce their national vote. This reduction may assist the Coalition on primary votes.

In the Senate, a quota for election is one-seventh of the vote, or 14.3%. Labor, the Greens and the Coalition are likely to be in the mix for the final seats in every state. It is possible that the small right-wing parties, such as Anning’s party, the UAP, the Australian Conservatives and Christian Democrats, could cause seats that should go to the right to go to the left instead if they do not tightly preference each other, One Nation and the Coalition.

Voters are told to number six boxes above the line for a formal vote, though only one number is actually required. At the NSW state election, left-wing micro-party voters preferenced more than right-wing micro-party voters, resulting in Animal Justice easily winning the final upper house seat.




Read more:
Poll wrap: Labor maintains its lead in Newspoll, while One Nation drops; NSW upper house finalised


At the federal election, it will be clear that left-wing micro-party supporters need to preference Labor and the Greens in their top six. It will be clear for right-wing micro supporters to preference the Coalition in the top six, but it is not likely to be clear which other right-wing party to preference.The Conversation

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

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

View from The Hill: Palmer flypaper sticky for both sides


Michelle Grattan, University of Canberra

Ahead of the first pre-pollers voting on Monday – and then switching off from the campaign noise – Labor will dangle more big bait – this time on child care.

Bill Shorten flagged the initiative on Friday, saying that “in the very near future, we’ll be announcing new plans to cut the cost of long day child care. And we will announce … a new national push for pay equity, starting with early childhood educators”.

The policy is both pitching to parents, and forming part of the ALP commitment to finding ways to lift wages, especially for the low paid.

Labor mapped out its early campaign weeks to focus on issues of very specific concern to voters. It started with health, featuring its big cancer package, and moved to wages. It will broaden into cost of living, and building for the future on various policy fronts.

While the ALP has handled the presentation of its issues in a very ordered fashion, the same can’t be said of its approach to one of the campaign’s formalities – the leaders’ debates.

The debate over debates

Shorten gave the impression of being dragged to the two now bedded down – in Perth on Monday (sponsored by the West Australian) and Brisbane on Friday (sponsored by News Corp outlets).

Morrison agitated for more; with Shorten pushed on Friday, Labor proposed a third be hosted by the National Press Club.

Morrison is confident on his feet and feels he has nothing to lose by multiple encounters. Shorten should have set out a debates’ proposal early on, rather than appearing to be on the defensive.

One might have expected the Labor leader to be enthusiastic for debates – he prides himself on all those town hall meetings. But he’s now risk averse and, as election favourite, knows debates potentially hold more pain than gain for him.

More broadly, in recent years leaders’ debates have lost a lot of their significance, falling victim to competitive pressure between media outlets. As has been often argued, we should have a “debates commission” to ensure at least two face offs are run as major set piece occasions, not owned by any media organisation.

The deal that’s “no deal”

Apart from the debate about debates, Friday’s campaign argy bargy centred on the Liberals’ preference deal with Clive Palmer’s United Australia Party, due to be announced by Palmer on Monday.

Morrison displays his usual chutzpah over this rather tawdry trade.

On the murky matter of preferences, the Prime Minister would prefer to hide behind the party organisation, an unconvincing line blown apart when he issued his edict about the Liberals putting One Nation behind Labor.

In particularly awkward timing, Morrison was in Townsville – where Palmer’s nickel workers were dudded in 2016 – when he had to field questions about the preference deal.

As one questioner succinctly put it: “Nowhere in the country knows better than Townsville the devastation and how that can be wrought by Clive Palmer. How can you look voters in this city in the eye and say they should direct their preferences to him, especially in the Senate?”

That is a question to which there is no answer that can sound half way good.




Read more:
VIDEO: Michelle Grattan on week two of the campaign #AusVotes


Morrison’s message for the locals was “Vote for Phil Thompson, the LNP candidate. That’s where you should put your vote and that’s the vote I’m interested in.”

Never mind that this ignores the point that voters must allocate preferences and the Liberals are saying allocate them in Palmer’s direction.

Morrison insisted there were “no policy deals that were being done with minor parties” in preference talks.

It was really all a matter of Palmer believing “Labor’s tax policy would be devastating for the Australian economy.”

As far as Morrison was concerned, “ I’m interested in forming a government on the other side of this election. I’m going make sure I do everything I possibly can to ensure that we’re able to form that government”.

He was dismissive of a warning from former Western Australian premier Colin Barnett (still stung by his preference deal with One Nation) that preferencing a discredited Palmer could alienate soft voters, as well as the Chinese.

Both sides now

The preference issue seemed easy pickings for Labor, except it had had a dalliance itself with the big man.

Shorten said there had been “no formal negotiations”, but Anthony Albanese unwisely went further. “Not once have we been talking to Clive Palmer about preferences because we understand it’s a recipe for chaos”.

Palmer immediately blew the whistle on that, revealing Queensland senator Anthony Chisholm had put out feelers. Chisholm, as a former Queensland ALP state secretary, would know quite a lot about such things.

It took the gloss off Labor’s attack on a deal it wanted to cast, in the colourful wording of Penny Wong, as “a marriage of convenience between an ad man and a con man”.




Read more:
Grattan on Friday: All is forgiven in the Liberal embrace of Palmer


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.

Shorten promises $2.3 billion package to relieve costs for cancer patients


Michelle Grattan, University of Canberra

Bill Shorten has promised his government would introduce a A$2.3 billion four year package to slash cancer patients’ out-of-pocket costs, and has committed $1 billion to give extra tax relief for low income earners, above what they would get from Tuesday’s budget.

In his budget reply on Thursday night, the opposition leader pitched to voters on a Labor strength – health – declaring his cancer care plan would be the “most important investment in Medicare since Bob Hawke created it”.

Shorten rejected the government’s second and third tranches of tax cuts, due to start in 2022-23 and 2024-25 and worth about $143 billion of the $158 billion ten year package. The last stage was a “radical, right-wing, flat tax experiment”, far off in time and skewed disproportionately to a relative few, he said.

Stressing Labor’s economic responsibility, Shorten recommitted to delivering “stronger surpluses, paying down debt faster” than the government.

“What we need is a fighting fund for the country, a strong surplus to protect us from international shocks”, he said.

He attacked the government – which has a $7.1 billion surplus in its budget for next financial year – for “shortchanging the NDIS [National Disability Insurance Scheme] by $1.6 billion, to prop up a flimsy surplus forecast”.

Shorten – who in his speech referred to his late mother Ann’s battle with breast cancer – said the cancer care plan would provide for millions of free scans and consultations, and cheaper medicines.

Cancer “is frightening, it’s isolating, it’s exhausting”. And all too often, it was impoverishing, he said.

“For so many people, cancer makes you sick and then paying for the treatment makes you poor. And that’s a fact that I think a lot of Australians would be surprised to learn.

“Because if you haven’t been through it yourself, you might not realise that all those vital scans and tests and consultations with specialists aren’t fully covered by Medicare. Instead, they cost hundreds of dollars, adding up to thousands, out of your own pocket,” he said.

One in four women with breast cancer paid more than $10,000 for two years of scans and tests, he said. Some men with prostate cancer were paying more than $18,000. Most people with skin cancer – and Australia has the highest rates of this cancer in the world – paid more than $5000 for the first two years of treatment.

Each year 300,000 people who needed radiology did not get it, because they couldn’t afford it.

People needing treatment for cancer were often not well enough to work, so they were already under massive financial strain, Shorten said. Those living in regional areas had the extra costs of travel and accommodation.




Read more:
Shorten’s budget reply will outbid government on tax relief for low income earners


A Labor government would:

  • invest $600 million towards eliminating all out-of-pocket costs for diagnostic imaging, with up to six million free cancer scans funded through Medicare – reducing out-of-pocket costs from hundreds of dollars to zero. This would include MRIs too. At present only half the MRI machines were covered by Medicare, and regional patients often had to drive for hours or pay thousands of dollars. “If we win the election, not only will we provide more MRI machines to communities where they are needed most, but Labor will guarantee that every single MRI machine in Australia that meets a national quality standard is covered by Medicare for cancer scans.”

  • invest $433 million to fund three million free consultations with oncologists and surgeons. Over four years this would mean an extra three million appointments were bulk billed, reducing costs of hundreds of dollars to nothing

  • guarantee that every drug recommended by independent experts would be listed on the Pharmaceutical Benefits Scheme.

On tax, Shorten said people earning between $48,000 and $126,000, no matter who they voted for in May, would get the same tax refund.

But the Liberal plan did not do enough for the 2.9 million people who earned less than $40,000 – about 57% of whom were women.

In Labor’s first budget Labor would provide a bigger tax refund for low earners than the Liberals proposed.

“6.4 million working people will pay the same amount of income tax under Labor as the Liberals – and another 3.6 million will pay less tax under Labor,” he said. “All told, an extra billion dollars, for low income earners”.

Under further details provided by Labor, it said workers earning up to $37,000 a year would receive a tax cut of up to $350. For workers earning between $37,000 and $48,000 the value of the tax offset would increase up to the maximum tax offset of $1,080.

A worker on $35,000 would get a tax cut of $255 a year under the Liberals, compared to $350 under Labor. A worker on $40,000 would receive a cut of $480 under the Liberals compared to $549 under Labor.

On TAFE Shorten promised to double the size of Labor’s rebuilding TAFE program – up to $200 million – to renovate campuses.

Labor is committed to paying the upfront fees for 100,000 TAFE places to get more Australians in high priority courses. “I am proud to announce that 20,000 of these places will be allocated to a new generation of aged care workers and paid carers for the NDIS,” Shorten said.

Finance minister Mathias Cormann said Shorten had put forward an agenda for $200 billion in higher taxes that would weaken the economy and bring higher unemployment. The Conversation

Provided by Labor.

Michelle Grattan, Professorial Fellow, University of Canberra

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