Battle won. Our budget woes are behind us


Warren Hogan, University of Technology Sydney

The government’s final budget outcome for 2017-18 is a deficit of A$10.1 billion. That’s an extraordinary A$8.1 lower than the May estimate just months ago, and more than A$19 billion lower than when the 2017-18 budget was originally put together the previous May.

The deficit, a mere 0.6% of gross domestic product, is the smallest in the run of ten that began in the global financial crisis of 2008-09.

The result tells us something important about the Australian economy ten years on from the crisis.




Read more:
Budget deficit comes in at $10.1 billion, in boost for early
return to surplus



First, it’s performing better than expected.

Not only is it growing faster than most forecasters expected, it has been producing more jobs and less inflation than such growth would have produced in the past.

This has allowed much low interest rates than would have once been the case and supported investment across the economy.

Back to normal

So good is the government’s financial position that the heavy lifting has been all but been done.

A return to budget balance is entirely possible this financial year.

Indeed, for most purposes the budget is already balanced.

Federal government revenues and expenses are each about 25% of GDP. Given the complexity and natural variability of the budget and the economy, an outcome within 0.5% of GDP from balance is basically in balance.

The fact that two-thirds of the originally projected 2017-18 budget deficit has vanished due to “forecast error” makes the point.

Fiscal policy is effectively back to normal, with plenty of spending power in reserve should the economy deteriorate.

Better confidence, for now

Solid government finances will support confidence, not least among households that are used to worrying about large deficits boosting future tax burdens or eating away at government services.

That isn’t to say that everything is baked in.

The economy and government finances can go the other way. But the task of budget repair, which started years ago under Treasurer Wayne Swan, is virtually complete. Any further substantive budget tightening will produce growing surpluses rather than shrinking deficits.

More profits, less welfare

Over the past 15 months the big improvement in the government’s financial position has come in two phases.

The first surprise was a revenue windfall received last summer. This was mostly because of higher commodity prices and the boost this gave to corporate profits.

Corporate income tax receipts are 8.7% higher than originally projected, resulting in an almost A$7 billion windfall for the budget. This represents about a third of the A$19 billion budget improvement.




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


This was well known by the time of the May budget and was responsible for most of the improvement in the budget bottom line between May 2017 and May 2018.

The next phase was a substantial drop in government payments near the end of the financial year just concluded.

This was not factored into the May 2018 budget. Most of it is made up of lower welfare and social security payments, partly in response to the stronger economy, and partly due to much lower than anticipated spending on disability assistance.

Disability-related payments, both in terms of payments to states and National
Disability Insurance Scheme spending, are about A$3 billion lower than expected in May last year.

And improvement all around

The rest of the good news is spread across the board. Income tax receipts are higher due to stronger employment growth. The government has collected more duties and excise than it expected. Pension payments have been a little lower than expected, as have infrastructure-related payments to the states.

Because the presentation of the final budget outcomes does not come with any formal update of budget forecasts, the treasurer and his finance minister had very little to say about the government’s fiscal strategy other than to reinforce that its jobs, growth and budget repair strategy is on track.

They’ll say more in the midyear economic and fiscal update (also called MYEFO) in December.

Question time

Ministers Frydenberg and Cormann were asked a number of questions at their Tuesday press conference that they chose not to answer properly.

I thought I would take the liberty of doing it for them.

REPORTER: So does this outcome increase the likelihood that you will return to surplus sooner than predicted?

MY ANSWER: It most certainly it does. The better result is mainly due to a stronger-than-expected economy. At the time of the budget in May 2017 the government had forecast economic growth of 2.75% for the 2017-18 financial year. As it turned out, growth came in at 2.9% and we are taking strong momentum into 2018-19.

It won’t take much to nudge the budget into surplus this year, that is, a year earlier than forecast. Simply factoring in the better baseline performance of the budget from last year should produce a deficit for 2018-19 of around A$5-8 billion. If the recent trends of higher commodity prices, a lower Australian dollar and stronger domestic economic activity persist, as they appear to be doing, then we will easily get a surplus this year.

Complicating the picture is the political cycle. With a government well behind in the polls and an election due in the next six months or so, it will be hard to resist the temptation to spend some of this recent budget improvement.

It will become a political judgment for the new prime minister and his cabinet. Is the political benefit of presenting a budget surplus greater than the electoral impact of new spending measures?

REPORTER: And do you continue to adhere to the budget discipline that all new spending must be accompanied by savings in equal amount?

MY ANSWER: The government should be commended for keeping real spending growth to just 1.9%, the lowest in a generation. It is projecting it to fall even further, to around 1.6% over the next few years. With a tough election contest ahead, my guess is that we may see some slippage on government spending.

REPORTER: You are out by 40% to 45% on the deficit you published in May this year. That’s a wild variation in just 6 weeks. Should Treasury be doing better than that, basically?

MY ANSWER: Revenues total just under A$450 billion and expenses total just over $450 billion. The deficit figure is the result of the calculation of the small difference between those two big numbers.

Rather than thinking about an A$8 billion miss on a A$18 billion deficit we should be thinking about A$8 billion on the $450 billion revenue and expense base.

Instead of a 40% variation, the real variation is less than 2%.

Given that the Treasury only had the March quarter national accounts at its disposal when pulling together the May Budget forecasts and considering the propensity of the Bureau of Statistics to revise the national accounts, the fact that the misses are less than 2% is actually pretty amazing.

The economy is complex and ever changing.

Economic forecasting is hard. Understanding the relationship between government revenues and an economy experiencing significant industrial structural change is far from a perfect science.The Conversation

Warren Hogan, Industry Professor, University of Technology Sydney

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

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Budget deficit comes in at $10.1 billion, in boost for early return to surplus


File 20180925 85755 up06mj.jpg?ixlib=rb 1.1
Estimates out, but happy. Mathias Cormann and Josh Frydenberg announce the smallest deficit in a decade.
Mick Tsikas/AAP

Michelle Grattan, University of Canberra

The budget outcome for 2017-18 shows a deficit of A$10.1 billion –
dramatically less than expected in May, and just 0.6% of GDP.

In this year’s May budget, a mere four months ago, the outcome for the last financial year was forecast to be just over A$18 billion, already revised well down on the more than A$29 billion estimate in the 2017 budget.

The drivers of the better-than-anticipated result were stronger
revenue and lower spending than earlier expected.

Treasurer Josh Frydenberg and Finance Minister Mathias Corman said in
a statement: “At A$10.1 billion, just 0.6 per cent of gross domestic
product (GDP), the underlying cash deficit is the smallest in ten
years.

“Stronger economic growth and much stronger employment growth than
anticipated at the time of the 2017-18 budget have driven increases in
personal income tax and company tax receipts, with total receipts
$13.4 billion higher than expected at the time of the budget.

“Total payments were A$6.9 billion lower than forecast at budget time,
including as a result of lower welfare payments with more Australians
in paid work. Welfare dependency for working age Australians is now at
its lowest level in 25 years and in 2017-18, there were 90,000 fewer
working age Australians on welfare,” they said.

“Real GDP in 2017-18 was stronger than anticipated in the 2017-18 budget.”

Last week Standard & Poor’s ratings agency reaffirmed Australia’s
triple A credit
rating. Frydenberg said Australia was one of only 10 countries with a AAA
credit rating from the three major agencies.

He told a news conference that the budget outcome confirmed the budget
was on the path back to balance in 2019-20.

The mid-year budget update will come in December, with the revisions
at that time setting the scene for the run into the election a few
months later, with the government making economic and fiscal
management a key plank in its campaign.

Shadow treasurer Chris Bowen said the final budget outcome “shows the
deficit came in almost four times worse than forecast in the Liberal
Party’s first budget. This is after the Liberal Party’s massive cuts
to schools, hospitals and the pension.”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 return to surplus built on the back of higher tax – Parliamentary Budget Office


Saul Eslake, University of Tasmania

First, the good news. The Parliamentary Budget Office’s latest medium-term budget projections provide
independent reassurance that the government’s personal income tax cuts, announced in the May budget and passed through parliament in June, can be funded without pushing the budget back into deficit.

But they also sound warnings about the downside risks from weaker-than-assumed economic or wages growth, and from any relaxation of the spending restraint
that successive governments have maintained since 2012.

More income tax

The PBO projects the federal government’s “underlying” cash balance to improve from 0.8% of GDP in 2021-22, the last year of the latest budget’s forward estimates period, to 1.3% of GDP in 2028-29.




Read more:
Budget policy check: does Australia need personal income tax cuts?


That’s after allowing for the revenue forgone by the tax cuts. Without these, and in the absence of any other spending or revenue measures, the surplus would have reached 3.7% of GDP (my calculation, not the PBO’s), largely on the back of the “bracket creep” that would have occurred without some form of personal income tax cuts between now and then.

Even so, there’s an awful lot of bracket creep.

Projected change in average income tax rates by quintile.
Parliamentary Budget Office, 2018-19 Budget: Medium-Term Projections (September 2018), CC BY

The average tax rate across all taxpayers is projected to increase from 22.9% to 25.2% – that is, by 2.3 percentage points. For taxpayers in the second and middle quintiles (the middle fifth and the second-to-bottom fifth) it’s even worse. They will see their average rates rise by more than 4 percentage points. The average tax rate for those in the top and bottom quintiles will climb by less than 1 percentage point.

The PBO’s projections allow for only slight additional relief; small reductions in 2027-28 and 2028-29, worth about 0.4% of GDP, to ensure tax receipts remain within the government’s “cap” of 23.9% of GDP in the final two years of the 10-year projection period.

A helpful backdown on company tax

The PBO’s forecasts don’t allow for the government’s recent decision to abandon
the previously proposed cut in the corporate tax rate for companies with annual turnover exceeding $50 million, which it had been unable to pass through the Senate. That would add the equivalent of almost 0.5 of a percentage point of GDP to the surplus by 2028-29, unless offset by other measures (which it probably will be).




Read more:
The full story on company tax cuts and your hip pocket


By law, the PBO is required to use the same economic assumptions in framing its medium-term projections as those used in the most recent federal budget.

Wishful economic thinking

These requirements mean the projections are conditioned on, among other things, “above-trend economic growth for much of the period” and “a return to close to trend wages growth” by 2021-22.

This week’s national accounts data lend some near-term support to the first of these assumptions, but they (and other data) cast further doubt on the likelihood of wages growth returning to trend in line with the budget assumptions.




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This is what policymakers can and can’t do about low wage growth


The PBO notes that, as a direct result of the government’s personal income tax plan, any weakness in future tax receipts flowing from “weaker economic circumstances” will “flow through directly to the budget bottom line”.

A decade of tight spending

The report highlights the importance of policy decisions in stemming the flow of new spending decisions and tightening eligibility for benefit payments since 2012.

Much of the impact of these will show up more clearly over the next decade. Apart from three areas – the National Disability Insurance Scheme (NDIS), aged care and defence, on which spending is projected to rise by a little over 1 percentage point of GDP over the next decade – other government spending is projected to
fall by around 2 percentage points of GDP between 2017-18 and 2028-29.




Read more:
Government spending explained in 10 charts; from Howard to Turnbull


The PBO notes that “the spending restraint seen over the past few years … may be
increasingly difficult to maintain with an improving budget outlook”.

(Unintentionally) highlighting that risk, the PBO explicitly notes that the proposed further increase in the pension eligibility age to 70 between 2023 and 2035 – which the government abandoned this week – was “projected to have a significant impact on Age Pension spending … over the next decade”.The Conversation

Saul Eslake, Vice-Chancellor’s Fellow, University of Tasmania

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

Shorten promises to reverse budget cut to the ABC


Michelle Grattan, University of Canberra

Bill Shorten has moved to make the ABC an election issue, promising to reverse the Turnbull government’s $83.7 million budget cut and to guarantee funding certainty over the broadcaster’s next budget cycle.

Ahead of appearing on the ABC’s Q&A program, Shorten and frontbench colleagues declared the Coalition had “launched the biggest attack on the ABC in a generation”.

In recent months Communications Minister Mitch Fifield has sent a stream of complaints to the ABC about stories, both online and on air, contesting facts and interpretations. The Prime Minister’s Office has also complained. Government frontbenchers and backbenchers frequently make cracks at or about the ABC, echoing a theme of many conservative commentators.

The ABC is also under constant attack from News Corp, driven by both ideology and commercial interests. The government has an inquiry underway into the ABC’s competitive neutrality, which was part of a deal with Pauline Hanson but also important in the context of News Corp’s argument about the government-funded ABC encroaching on financially strapped commercial media.

When the government made the $84 million budget cut – which took the form of a freeze to indexation – Treasurer Scott Morrison said “everyone has to live within their means”. Managing director Michelle Guthrie said that “the decision will make it very difficult for the ABC to meet its charter requirements and audience expectations.”

In a statement Shorten, communications spokeswoman Michelle Rowland and regional communications spokesman Stephen Jones said Labor’s commitment would ensure the ABC could meet its charter requirements, safeguard jobs, adapt to the digital environment “and maintain content and services that Australians trust and rely on”.

They said the Coalition since 2014 had “overseen $282 million in cuts to the ABC that has seen 800 jobs lost and a drop in Australian content and services”.

“Labor will stand up for the ABC and fight against the conservatives’ ideological war against our public broadcaster,” the statement said.

The promised investment “demonstrates Labor’s commitment to the ABC’s independence and to maintain the ABC as our comprehensive national broadcaster.

“Now, more than ever, Australians need the ABC – our strong, trusted and independent public broadcaster.

The Conversation“At a time when too many Australians feel disengaged from their democracy and distrustful of their representatives, Labor wants to restore trust and faith in our institutions. Part of restoring trust is is supporting a healthy public interest media sector, and protecting that trusted institution – the ABC”.

Michelle Grattan, Professorial Fellow, University of Canberra

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

View from The Hill: With apologies to Mathias, Hanson blows away government hopes on company tax


Michelle Grattan, University of Canberra

Not so long ago, new South Australian independent senator Tim Storer and Victorian crossbencher Derryn Hinch were set to be the pivotal players determining the fate of the government’s tax cut for big companies.

But after the evidence from the banking inquiry Hinch’s doubts about the measure hardened further, while Storer continued to agonise.

The government then looked towards the Centre Alliance senators, Stirling Griff and Rex Patrick, for the two crucial numbers it needed. The rest of the votes were in the bag.

Only it turned out they weren’t. Pauline Hanson, who commands three Senate votes and thus a veto, has suddenly withdrawn the support she earlier pledged. Hanson has flipped-flopped before but she insists this is for real – that she won’t change her mind again.

Hanson says she’s “so disappointed in this government” after the budget it produced. She has a litany of complaints: inaction on debt; intransigence on immigration; the absence of changes to the petroleum resource rent tax; no appearance of promised apprenticeships, and many more.

Hanson denies her reneging is driven by her political needs in the Queensland seat of Longman, though that claim lacks credibility. Tax cuts for the wealthiest companies, including the banks, would hardly appeal to potential One Nation voters, and this byelection will be a test for Hanson’s party, just as it will be for Labor and the Coalition. Bill Shorten had already been exploiting her closeness to the government.




Read more:
Research check: we still don’t have proof that cutting company taxes will boost jobs and wages


As much as the Senate is unpredictable, this does look like the end of the government’s chances of getting its company tax package through parliament before the election.

Senate leader Mathias Cormann, the government’s chief negotiator, said he hoped “that this is not the last word” but admitted “it might well be that we won’t ever get there”.

Once again, Shorten has had a lucky break. The tax cut for big companies, which Labor has strenuously opposed, is still on the political agenda. If the Senate had passed it, Labor would have a diminished target.

It also remains on the books. Admittedly the cost is way into the future, but in these times when parties like to talk in terms of a decade, those notional future dollars are useful to Labor.

Also, if the package isn’t passed, Labor doesn’t have to cope with the question: how can you be sure a Shorten government could persuade a post-election Senate to repeal the cuts?

Most immediately, the opposition on Tuesday was making merry with questions about what “secret deal” the government had with Hanson to try to get the company tax cut through.

A Senate estimates hearing saw an angry clash between Labor’s Senate leader Penny Wong and Cormann, when Wong pursued whether the government was willing to meet Hanson’s various demands. As she went through these, Cormann retorted “I know that you always like channelling Senator Hanson”.

Wong, of Asian heritage, responded ferociously: “Don’t tell me I channel Pauline Hanson. I find that personally offensive. I can tell you what happened to me and my family and people like us, when she stood up in the parliament, possibly before you were here, saying Australia was in danger of being swamped by Asians. I will never do anything other than fight her.”

Cormann accused Wong of “confected outrage”; Wong countered “How dare you!”.

But a few hours later the two had made up.

Wong tweeted: “I will never do anything other than stand up to Pauline Hanson and her views, but I know Mathias is one of the decent people in this Government and accept his assurance he did not mean to cause offence.”

Cormann replied: “While we are fierce political competitors, I value the fact that we always aim to engage in the political contest professionally and with courtesy and mutual respect.”

It’s notable how much genuine respect Cormann commands in a parliament characterised by the lack of it.

Hanson went out of her way to stress she wasn’t blaming Cormann for anything – “his colleagues and the government” had let him down, she said. She told her news conference, “I know he’s devastated”, and she’s said to be genuinely upset that she’s left him in the lurch.

The government says that if there’s not a new turn of Senate fortunes, it will take the company tax policy to the election.

Although some argue the measure should be ditched, which is the superficially attractive course, that would potentially bring fresh difficulties. Not only would it open a brawl with business, but it would undermine the economic argument the government has been making for two years. Killing an albatross can be a dangerous business.




Read more:
Grattan on Friday: Can the Turnbull government make the election all about tax?


It would, however, be popular with the public. Tuesday’s Essential poll reported that when people were asked which in a list of measures they would support to cut government spending, the top item nominated (on 60%) was “not providing company tax cuts for large business”.

The Essential poll brought mixed news on the tax front for the government.

Asked to choose between the budget’s income tax plan and the alternative outlined by Shorten in his budget reply, Labor’s plan was preferred by 45% to 33%. On the other hand, Labor and the Coalition were equal (on 32% each) when people were asked which party they trusted most to manage a fair tax system.

The ConversationParticularly interesting was the poll’s voting figure. The two-party Labor lead has now narrowed to 51-49% (compared with 52-48% in the last poll). This is the closest result since late 2016, and in line with the most recent Newspoll. It reinforces the point that the contest is tightening.

Michelle Grattan, Professorial Fellow, University of Canberra

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

Don’t give anyone a tax cut: Greens


Michelle Grattan, University of Canberra

The Greens are standing out against the bipartisan consensus that tax cuts are needed for middle and lower income earners.

They are ruling out supporting all the budget’s tax relief, and say they are also opposed to the package of larger cuts the opposition has proposed, which would be confined to people in the lower and middle income ranges.

Instead, the funds should be spent on services, the Greens say.

The Coalition tax package will be a focus of this parliamentary fortnight, which sees the House of Representatives sitting and the Senate holding estimates hearings.

The legislation will be passed in the House, while estimates will be used by the opposition to seek the annual cost in the latter years of the seven-year plan, which the government has so far declined to provide. Treasury is before the estimates hearings next week; the Prime Minister’s department is up this week.

The opposition has submitted ahead of time a list of detailed questions about the tax package to try to prevent the delay of answers by officials asking for questions to be put on notice.

Labor supports the first stage of the three-part plan, is vague about the second stage, but has expressed opposition to the third stage, which flattens the tax scale and favours high income earners.

The government says it will not split the bill. It is not clear whether the opposition would vote against the legislation if the government holds firm, or whether the government would be flexible if pushed.

The shadow cabinet meets on Monday night, when the legislation is set to be discussed.

Labor’s alternative tax cuts, announced in Bill Shorten’s budget reply, would be confined to those on incomes up to about $125,000.

While the immediate concentration is on the future of the government’s legislation, the uncertainty of a post-election Senate also raises the issue for Labor of whether an ALP government could get its legislation through.

The Greens said in a statement that the government’s proposed income tax cuts were just a bribe to get the massive company tax cuts passed. People on the minimum wage wouldn’t even see $4 a week, while the wealthiest would benefit the most.

“Both parties’ plans will worsen inequality, and see us lose vital revenue for the essential services people rely upon,” the Greens said.

Greens leader Richard Di Natale said with inequality rising, reinvestment in public services should be the priority.

“For years, politicians have been telling Australians that the budget doesn’t have money to properly fund our public schools, build a world-class NBN, or take action on climate change,” Di Natale said.

“Yet when an election is rolling around both old parties are giving away cheques like a breakfast TV show trying to increase their ratings.”

“This reckless tax auction is nothing more than a distraction from the millions of dollars stripped from our schools, hospitals and social safety net over the past decade.

The Conversation“While Turnbull is busy squabbling with Labor over how much they want to rip out of Australia’s institutions, the Greens are proud to stand up for Medicare, our public schools and hospitals and the environment”.

Michelle Grattan, Professorial Fellow, University of Canberra

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

What was missing in Australia’s $1.9 billion infrastructure announcement


Virginia Barbour, Queensland University of Technology

When we think about infrastructure it’s most often about bridges or roads – or, as in this week’s federal government AU$1.9 billion National Research Infrastructure announcement, big science projects. These are large assets that can be seen and applied in a tangible way.

It’s not hard to get excited over money that will support imaging of the Earth, or the Atlas of Living Australia.

But important as these projects are, there’s a whole set of infrastructure that rarely gets mentioned or noticed: “soft” infrastructure. These are the services, policies or practices that keep academic research working and, now, open.

Soft infrastructure was not featured in this week’s announcement linked to budget 2018.




Read more:
Budget 2018: when scientists make their case effectively, politicians listen


Ignored infrastructure

An absence of attention paid to soft infrastructure isn’t just the case in Australia, it’s true globally. This is despite the fact that such infrastructure is core to running the hard infrastructure projects.

For example, the Open SSL software library – which is key to the security of most websites – has just a handful of paid individuals who work on it. It’s supported by fragile finances. That’s a pretty frightening thought. (There’s another issue in that researchers doing this work get no academic credit for their efforts, but that’s a topic for another time.)

There are other high profile, globally used, open science infrastructures that also exist hand to mouth. The Directory of Open Access journals which began at Lund University relies entirely on voluntary donations from supporting members and on occasional sponsorship.

Similarly, Sherpa Romeo – the open database of publishers’ policies on copyright and self-archiving – came out of projects at Nottingham and Loughborough Universities in the UK.

In some ways these projects’ high visibility is part of their problem. It’s assumed that they are already funded, so no-one takes responsibility for funding them themselves – the dilemma of collective action.




Read more:
Not just available, but also useful: we must keep pushing to improve open access to research


Supporting open science

Other even more nebulous types of soft infrastructure include the development and oversight of standards that support open science. One example of this is the need to ensure that the metadata (the essential descriptors that tell you for example where a sample that’s collected for research came from and when, or how it relates to a wider research project or publication) are consistent. Without consistency of metadata, searching for research, making it openly available or linking it together is much less efficient, if not impossible.

Of course there are practices in place at individual institutions as well as national organisations. The soon-to-be-combined organisations -Australian National Data Service, the National eResearch Collaboration Tools and Resources project and Research Data Services (ANDS-Nectar-RDS) – are supported by national infrastructure funding. These provide support for data-heavy research (including for example the adoption of FAIR – Findable, Accessible, Interoperable and Reusable standards for data).

But without coherent national funding and coordination, specifically for open science initiatives, we won’t get full value from the physical infrastructure just funded.




Read more:
How the insights of the Large Hadron Collider are being made open to everyone


What we need

What’s needed now? First, a specific recognition of the need for cash to support this open, soft infrastructure. There are a couple of models for this.

In an article last year it was suggested that libraries (but this could equally be funders – public or philanthropic) should be committing around 2.5% of their budget to support open initiatives. There are some international initiatives that are developing specific funding models – SCOSS for Open Science Services and NumFocus for software.

But funding on its own is not enough: we need a coordinated national approach to open scholarship – making research available for all to access through structures and tools that are themselves open and not proprietary.

Though there are groups that are actively pushing forward initiatives on open scholarship in Australia – such as the Australasian Open Access Strategy Group, the Council of Australian University Librarians, and the Learned Academies as well as the ARC and NHMRC who have open access policies – there is no one organisation with the responsibility to drive change across the sector. The end result is inadequate key infrastructure – for example, for interoperability between research output repositories.

We also need coherent policy. The government recognised a need for national and states policies on open access in its response to the 2016 Productivity Commission Inquiry on Intellectual Property, but as yet no policy has appeared.




Read more:
Universities spend millions on accessing results of publicly funded research


It’s reasonable to ask whether in the absence of a national body that’s responsible for developing and implementing an overall approach, what the success of a policy on its own would be. Again, there are international models that could be used.

Sweden has a Government Directive on Open Access, and a National Body for Coordinating Open Access chaired by the Vice-chancellor of Stockholm University.

The Netherlands has a National Plan for Open Science with wide engagement, supported by the Ministry of Education, Culture and Science. In that country, the Secretary of State, Sander Dekker, has been a key champion.

The EU has had a long commitment to open science, underscored recently by the appointment of a high-level envoy with specific responsibility for open science, Robert-Jan Smits.

Private interests might take over

Here’s the bottom line: national coordinated support for the soft infrastructure that supports open science (and thus the big tangible infrastructure projects announced) is not just a “nice to have”.

One way or another, this soft infrastructure will get built and adopted. If it’s not done in the national interest, for-profit companies will step into the vacuum.

We risk replicating the same issues we have now in academic publishing – which is in the hands of multi-billion dollar companies that report to their shareholders, not the public. It’s clear how well that is turning out – publishers and universities globally are in stand offs over the cost of publishing services, which continue to rise inexorably, year on year.


The Conversation


Read more:
Publisher pushback puts open access in peril


Virginia Barbour, Director, Australasian Open Access Strategy Group, Queensland University of Technology

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

Post-budget poll wrap: Labor has equal best Newspoll budget result, gains in Ipsos, but trails in Longman



File 20180515 122916 1upszc9.jpg?ixlib=rb 1.1
While this is Malcolm Turnbull’s 32nd consecutive Newspoll loss as PM, the past two have been narrow losses.
AAP/Ellen Smith

Adrian Beaumont, University of Melbourne

This week’s Newspoll, conducted May 10-13 from a sample of 1,730, gave Labor a 51-49 lead, unchanged from three weeks ago. Primary votes were 39% Coalition (up one), 38% Labor (up one), 9% Greens (steady) and 6% One Nation (down one).

This Newspoll is Malcolm Turnbull’s 32nd successive loss as PM, two more than Tony Abbott. However, the past two have been narrow losses.

The total vote for Labor and the Greens was up one point to 47%, while the total for the Coalition and One Nation was steady at 45%. The gain for the left would normally result in a gain after preferences, but rounding probably helped the Coalition again.




Read more:
Poll wrap: Labor’s Newspoll lead narrows federally and in Victoria


39% (up three) were satisfied with Turnbull, and 50% (down three) were dissatisfied, for a net approval of -11, Turnbull’s highest net approval since the final pre-election Newspoll in July 2016. Bill Shorten’s net approval was down two points to -22. Turnbull led Shorten as better PM by 46-32; this is Turnbull’s clearest better PM lead since February.

Newspoll asks three questions after every budget: whether the budget was good or bad for the economy, good or bad for you personally, and whether the opposition would have delivered a better budget.

The best news for Labor was on the third question, where it only trailed by seven points, equal to their deficit after the badly perceived 2014 budget. According to The Poll Bludger, Labor trailed by more during all of the Howard government’s budgets.

This budget was seen as good for the economy by 41-26, and good for you personally by 29-27. The Poll Bludger says it is fifth out of 31 budgets covered by Newspoll on personal impact, but only slightly above average on the economy.

Turnbull led Shorten by 48-31 on best to handle the economy (51-31 in December 2017). Treasurer Scott Morrison led his shadow Chris Bowen 38-31 on best economic manager. By 51-28, voters thought Labor should support the government’s seven-year tax cut package.

Turnbull has delivered a well-received budget, while Shorten’s credibility took a hit after four Labor MPs were kicked out over the citizenship fiasco.

Voters were not sympathetic to politicians who held dual citizenships. By 51-38, they thought such politicians should be disqualified from federal parliament (44-43 in August). By 46-44, voters would oppose a referendum to change the Constitution to allow dual citizens to become MPs.

A key question is whether Turnbull’s ratings bounce will be sustained. The PM’s net approval and the government’s two party vote are strongly correlated, so the Coalition should do better if Turnbull’s ratings are good. Past ratings spikes for Turnbull have not been sustained.

While people on low incomes receive a tax cut, it will not be implemented by withholding less tax from pay packets. Instead, people will need to wait until they file their tax returns after July 2019 to receive their lump sum tax offsets. As the next federal election is very likely to be held by May 2019, this appears to be a political mistake.

In last week’s Essential, 39% thought the Australian economy good and 24% poor. While Australia ran large trade surpluses in the first three months of this year, the domestic economy is not looking as good as it did in 2017 – see my personal website for more.

Ipsos: 54-46 to Labor (53-47 respondent allocated)

An Ipsos poll for the Fairfax papers, conducted May 9-12 from a sample of 1,200, gave Labor a 54-46 lead by 2016 election preferences, a two-point gain for Labor since early April. Primary votes were 37% Labor (up three), 36% Coalition (steady), 11% Greens (down one) and 5% One Nation (down three).

Newspoll is no longer using last-election preferences, so it seems better to compare Ipsos’ respondent allocated preferences with Newspoll, not the last election preferences. By respondent allocated preferences, Ipsos was 53-47 to Labor, a three-point gain for Labor.

Ipsos is bouncier than Newspoll, and the Greens’ support is higher. If you compare Ipsos’ respondent allocated two party vote with Newspoll, the difference is diminished.

Turnbull had a 51-39 approval rating (47-43 in April). This is Turnbull’s best rating in Ipsos since April 2016; Ipsos gives Turnbull his strongest ratings of any pollster. Shorten’s net approval was up three points to -12. Turnbull led Shorten by 52-32 (52-31 in April).

By 39-33, voters thought the budget was fair (42-39 after the 2017 budget). By 38-25, voters thought they would be better off, the highest “better off” figure in Nielsen/Ipsos history since 2006. However by 57-37, voters thought the government should have used its extra revenue to pay off debt, rather than cutting taxes.

Queensland Galaxy: 52-48 to federal Coalition, 53-47 to state Labor

A Queensland Galaxy poll, conducted May 9-10 from a sample of 900 for The Courier Mail, gave the federal Coalition a 52-48 lead, unchanged since February, but a 2% swing to Labor since the 2016 election. Primary votes were 40% Coalition (down one), 33% Labor (up one), 10% Greens (steady) and 10% One Nation (up one). Primary vote changes would normally imply a gain for Labor, but this was lost in the rounding.

By 39-33, Queenslanders thought the budget was good for them personally, rather than bad. By 39-28, they thought the budget would be good for Queensland.

The state politics questions gave Queensland Labor a 53-47 lead, a one-point gain for Labor since February. Primary votes were 38% Labor (up one), 35% LNP (down one), 12% One Nation (up two) and 10% Greens (steady).

Premier Annastacia Palaszczuk had a 46-38 approval rating (44-38 previously). Opposition Leader Deb Frecklington had a 31-28 approval rating (29-25). Palaszczuk led Frecklington as better Premier 47-27 (42-31).

Longman ReachTEL: 53-47 to LNP

The Longman byelection is one of five that will be held soon. A ReachTEL poll, conducted May 10 from a sample of 1,280 for the left-wing Australia Institute, gave the LNP a 53-47 lead, about a 4% swing to the LNP since the 2016 election. Primary votes were 36.7% LNP, 32.5% Labor, 15.1% One Nation and 4.9% Greens.

ReachTEL is using respondent allocated preferences. The two party vote in this poll looks reasonable assuming One Nation preferences flow to the LNP.

National polls and the Queensland Galaxy poll show swings to Labor compared with the 2016 election. It would be highly unusual for a seat to swing so strongly to the Coalition when other polling shows a swing to Labor. In the past, seat polls have been far less reliable than national and state-wide polls.

In better byelection news for Labor, the Western Australian Liberals will not contest either Perth or Fremantle. Fremantle has a 7.5% margin with an incumbent recontesting, but Labor only holds Perth by a 3.3% margin with no incumbent.




Read more:
Centre Alliance’s Rebekha Sharkie most vulnerable at byelections forced by dual citizenship saga


Essential: 52-48 to Labor

This week’s Essential, conducted May 10-13 from a sample of 1,033, gave Labor a 52-48 lead, a one-point gain for the Coalition since last week. Primary votes were 38% Coalition (steady), 36% Labor (down one), 10% Greens (steady) and 7% One Nation (up one).

By 44-28, voters approved of the budget overall. 22% thought the tax cuts would make a difference to their household. 39% supported the tax cuts, with 30% wanting more spending on schools and hospitals and 18% preferring a reduction in government debt.

The ConversationBy 44-40, voters disagreed with giving higher income people larger tax cuts. By 79-14, voters agreed that those earning $200,000 should pay a higher tax rate than those earning $41,000.

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

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

Most of the benefits from the budget tax cuts will help the rich get richer


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Chris Samuel/Flickr, CC BY-SA

Robert Tanton, University of Canberra and Jinjing Li, University of Canberra

In the federal budget, Treasurer Scott Morrison promised tax cuts to all working Australians in the form of an offset and changes to tax income thresholds. But our analysis of Treasury data shows that while the government advertised these as payments to low and middle income Australians, most of the benefits would flow through to high income earners in future years.

If all of the stages of the tax plan passed parliament, there would be a sharp increase in benefits for people earning above A$180,000, due to the reduction of their marginal tax rate from 45% to 32.5%.

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Taxes in most countries are progressive. This means that the more you earn, the higher your marginal rate (the additional amount you pay for each dollar earned).

There are good reasons for this – progressive tax systems mean those on a lower income pay a lower average tax rate, while those on higher incomes pay a higher average tax rate. This reduces income inequality – as you earn more, for each dollar you earn, you will pay more in tax than someone on a lower income.

With the 2018-19 budget, the proposal is for a “simpler” tax system from 2024-25. This means a reduced number of tax brackets, and a lower rate of 32.5% to those earning between A$87,001 and A$200,000.

Treasurer Scott Morrison said following the budget:

Well, you’ve still got a progressive tax system. That hasn’t changed. In fact, the percentage of people at the end of this plan, who are on the top marginal tax rate is actually slightly higher than what it is today.

However this new tax system from 2024-25 is less progressive than the current system. It means higher income inequality – the rich get more of the tax cuts than the poor.

As part of the new proposal, low and middle income earners get a tax offset in 2018-19, with high income earners getting very little. This part of the plan is progressive – more money goes to lower income earners.

However, by 2024-25, the tax cuts means high income earners gain A$7,225 per year, while those earning A$50,000 to A$90,000 gain A$540 per year, and those earning A$30,000 gain A$200 per year.

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Of course, another factor of tax cuts is that they only benefit those who are employed. Tax cuts don’t benefit people like the unemployed, pensioners, students (usually young people) and those on disability support pensions.

The conversation Australians need to have is how we should be spending the revenue boost we are seeing over the next few years. We can either spend this windfall gain on benefits to high income earners, in the hope that this will flow through spending to everyone else; or maybe we should encourage young people into housing through an increase to the first home owners grant, or increased funding for our schools, universities and health system.

The ConversationWe’ve developed a budget calculator so you can see how your family is affected by the 2018 budget.

Robert Tanton, Professor, University of Canberra and Jinjing Li, Associate Professor, NATSEM, University of Canberra

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

Bill Shorten outbids Turnbull’s tax cut for lower and middle income earners



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Shorten pledged to give bigger income tax cuts for 10 million taxpayers.
Lukas Coch/AAP

Michelle Grattan, University of Canberra

Opposition leader Bill Shorten has launched a tax bidding war, promising to top the government’s tax relief for lower and middle income earners, as he prepares to fight a string of byelections in Labor seats.

The Labor alternative almost doubles the budget’s relief for these taxpayers, incorporating the early part of the government’s plan and then building on it.

Delivering his budget reply in Parliament on Thursday night, Shorten pledged to give bigger income tax cuts for 10 million taxpayers. Some four million would get A$398 a year more than the $530 under the government’s plan.

Labor’s “Working Australians Tax Refund”, would cost $5.8 billion more than the government’s plan over the forward estimates.

Labor’s alternative comes as debate intensifies about the latter stage of the government’s plan, when a flattening of the tax scale would give substantial benefit to high income earners.

The ALP hardened its position against that change as modelling cast doubt on its fairness. The opposition launched a Senate inquiry which will report mid June on the tax legislation, introduced into parliament on Wednesday.

The government says it will not split the bill, which it wants through before parliament rises for its winter break, but will be under pressure to do so including from the crossbench.

Under Shorten’s proposal, the ALP would support the government’s budget tax cut in 2018-19. Once in power, it would then deliver bigger tax cuts from July 1 2019, when it began the refund.

In Labor’s first budget “we will deliver a bigger better and fairer tax cut for 10 million working Australians. Almost double what the government offered on Tuesday”, Shorten told parliament.

The Labor plan would give all taxpayers earning under $125,000 a year a larger tax cut than they would get under the budget plan.

In a speech heavy on the theme of fairness, Shorten said: “At the next election there will be a very clear choice on tax. Ten million Australians will pay less tax under Labor”.

He also pitched his budget reply directly at the campaign for the byelections.




Read more:
View from The Hill: ‘Super Saturday’ voters get first say on tax


“This is my challenge to the Prime Minister. If you think that your budget is fair, if you think that your sneaky cuts can survive scrutiny, put it to the test. Put it to the test in Burnie, put it to the test in Fremantle and in Perth.

“I will put my better, fairer, bigger income tax cut against yours. I’ll put my plans to rescue hospitals and fund Medicare against your cuts. I’ll put my plans to properly fund schools against your cuts and I’ll put my plan to boost wages against your plan to cut penalty rates and I’ll put my plans for 100,000 TAFE places against your cuts to apprenticeships and training and I’ll fight for the ABC against your cuts.”

In the Labor model, a teacher earning $65,000 would get tax relief of $928 a year, $398 more than the $530 offered by the government.

A married couple, with one partner earning $90,000 and the other $50,000 would receive a tax cut of $1855, making them $796 a year better off under Labor than under the government.

Shorten said Labor could afford the tax cuts it proposed because it wasn’t giving $80 billion to big business and the big four banks. Also, it had earlier made hard choices on revenue measures.




Read more:
Politics podcast: Mathias Cormann and Jim Chalmers on Budget 2018


An ALP government could deliver “the winning trifecta” – “a genuine tax cut for middle and working class Australians; proper funding for schools, hospitals and the safety net; and paying back more of Australia’s national debt faster”.

Shorten said that the Liberals were proposing to radically rewrite the tax rules in their seven year plan. Research had revealed that $6 in every $10 would go to the wealthiest 20% of Australians, he said .

“Very quickly, this is starting to look like a Mates Rates tax plan”.

“And at a time of flat wages, rising inequality and a growing sense of unfairness in the community”.

Other initiatives he announced include:

· A plan for skills, TAFE and apprentices costing $473 million over the forward estimates.

· Abolition of the cap on university places, re-instating Labor’s demand driven system, at a cost of $140 million over the forward estimates.

· Reversing cuts to hospitals and establishing a Better Hospitals Fund, seeing an extra $2.8 billion flow to public hospitals. This would cost $764 million over the budget period.

· Invest $80 million to boost the number of eligible MRI machines and approve 20 new licences – which would mean 500,000 more scans funded by Medicare over the course of a first Labor budget.

The Conversation· Provide $25m to the Commonwealth Public Prosecutor to establish a Corporate Crime Taskforce. The Taskforce would deal with recommendations for criminal prosecution from the banking royal commission.

Michelle Grattan, Professorial Fellow, University of Canberra

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