How the politics of the budget might play out for a government in trouble



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This budget, led by Scott Morrison and Malcolm Turnbull, will form part of the government’s repositioning as an advocate of equal opportunity and fairness.
AAP/Mick Tsikas

Carol Johnson, University of Adelaide

Given months of polls that show Labor ahead and damaging internal disunity, the politics of this budget are extremely tricky for the government to manage. The Conversation

It is not just that Tony Abbott’s sniping is causing political headaches for Prime Minister Malcolm Turnbull. Some of the government’s budget problems go back to the 2013 election.

In that campaign, Abbott suggested the budget deficit problems would be easily fixed by simply getting rid of Labor, and the government could somehow do so painlessly without cutting health, education or pensions.

However, as then-treasurer Wayne Swan had noted, Australian budget deficit problems were very complex and included substantial falls in government revenue due to the global financial crisis and the end of the mining boom. They weren’t just due to government spending.

Opponents criticised the size of the Rudd government’s expenditure, including its economic stimulus package designed to counter the GFC. Nonetheless, Kevin Rudd argued that Australian government debt was in fact relatively small compared with many other Western countries in a post-GFC world.

Once he won office, Abbott had to face the difficult realities involved in reducing the deficit. The substantial 2014 budget cuts, including to areas Abbott said would be protected, infuriated many voters and contributed to his poor polls and political demise.

The Abbott government’s woes went beyond the failure to fix a difficult budget situation. Other than attacking Labor, it wasn’t clear what its positive vision for the Australian economy was in terms of how to transition after the mining boom, and how to develop new jobs and new industries at a time of rapid economic and technological change.

Tony Abbott’s sniping continues to cause headaches for Malcolm Turnbull.
AAP/Sam Mooy

Replacing Abbott with Turnbull was meant to provide us with such a positive economic vision. However, Turnbull’s mantra of living in innovative and “exciting times” failed to convince many voters. As one anonymous Liberal MP noted, it actually made some voters highly nervous about what was going to happen to their jobs.

Hence Turnbull turned to promising “jobs and growth” during the 2016 election campaign.

However, the Coalition’s narrow win suggested many voters still weren’t convinced the government knew how to ensure job security and a good standard of living in challenging times. In particular, many voters remained unconvinced that substantial business tax cuts would drive the economic growth and improved government revenues that were promised.

Given current levels of underemployment, unusually low wages growth and with inequality increasing, they had reason to be concerned. There is also international research suggesting that corporate tax cuts don’t have the beneficial results claimed.

Fast forward to the 2017 budget, and the Liberals are desperately trying to develop a more convincing economic narrative around good economic management, nation-building, and fairness.

Despite their attempts to blame past Labor policy and more recent Labor intransigence at passing budget cuts in the Senate, Liberal ministers are still having trouble explaining how government debt has increased from A$270 billion under Labor to some $480 billion under the Coalition.

Fortunately for them, Treasurer Scott Morrison now argues there is “good debt” and “bad debt”. Good debt covers areas such as infrastructure that assists economic growth. Bad debt apparently covers areas such as welfare.

Morrison is partly belatedly accepting advice on infrastructure-funding debt from bodies such as the International Monetary Fund, while trying to argue that the government’s new debt policies will be very different from past Labor economic stimulus ones.

Needless to say, these areas of “good” and “bad” debt aren’t quite as simple to define as Morrison suggests. Furthermore, so called nation-building infrastructure spending is sometimes more electoral pork barrelling than economic necessity. Doubts have already been raised over the economic, rather than political, benefits of a second Sydney airport and inter-capital city rail links.

The NBN: ‘good debt’ or ‘bad debt’?
AAP/Mick Tsikas

Meanwhile, Turnbull struggled to explain whether Labor’s National Broadband Network was good or bad debt in terms of building necessary infrastructure.

Australian businesses that are struggling with Turnbull’s cheaper version, with its continuing use of 19th century derived copper wire technology or 1990s pay-TV-derived hybrid fibre coaxial cable technology may be wondering whether the Coalition should have discovered “good” infrastructure debt earlier and supported Labor’s more expensive fibre-optic to-the-premises model.

After all, under Rudd, the NBN was meant to be the nation-building 21st century equivalent of 19th-century government infrastructural expenditure on building railways.

Consequently, the government faces questions about whether its economic policy positions have been consistent, particularly given past Coalition rhetoric about debts and deficits.

Furthermore, while Morrison apparently characterises it as bad debt, providing temporary welfare benefits for those who lose their jobs because of economic downturns or restructuring helps keep up consumption levels. This in turn means it potentially has flow-on benefits for the private sector, as well as the individuals concerned.

It is a central lesson of the Keynesian economics that Robert Menzies’ Liberal Party embraced at its foundation, but was rejected under John Howard in the 1980s.

Does all of this mean that Turnbull is now acknowledging a lesson of the 2016 election: that neoliberalism is harder to sell than it used to be? Are his backdowns on “small-l” liberal values now being combined with back-downs on some of his long-held free-market values?

That seems to be going too far at present, especially given the government’s continued belief in the “trickle-down” benefits of corporate tax cuts and attacks on welfare expenditure.

However, there is some nuancing taking place as Turnbull tries to throw off the image of “Mr Harbourside Mansion” who loves hobnobbing with bright young technology entrepreneurs, and instead stress he is in touch with the concerns of ordinary voters.

Consequently, and much to Labor’s outrage, the government has now repositioned itself as an advocate of equal opportunity and fairness that supports a Gonski-lite needs-based education funding model.

While the government’s cuts to higher education will still have a negative impact on universities, and particularly students, the measures are less harsh than those in the 2014 budget.

It seems likely there will be some attempt in the budget to assist first home buyers. Various options have been canvassed.

Turnbull has already tried to position himself as taking action on household energy costs by criticising renewable energy costs and ensuring gas reserves. Meanwhile, there are suggestions the government will improve Medicare benefits in an attempt to counter Labor’s controversial “Mediscare” campaign at the last election.

All budgets are about politics, not just economics. But this budget will be even more so. Not all the measures are working out politically. Abbott is already threatening dissension over the impact of the education measures on Catholic schools.

This is a government in trouble. On one side it faces internal disunity and pressure from Labor’s emphasis on reducing inequality and fostering “inclusive growth”. On the other it has One Nation’s mobilisation of race and protectionism to appeal to the economically marginalised.

Then there is Cory Bernardi, the Greens, Nick Xenophon and a host of independents and other groups to consider.

After all, the budget is only the beginning. The next test is getting key measures through the Senate, perhaps even wedging Labor by deals with the Greens, so that the Coalition is in a stronger position to face the next election.

Carol Johnson, Professor of Politics, University of Adelaide

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

Turnbull government aims to distance itself from its predecessor with the 2017-18 budget


Saul Eslake, University of Tasmania

One of the primary objectives of the 2017-18 budget is likely to be to put some distance – politically and in terms of economic policy – between the Turnbull government and its predecessor, that of former Prime Minister Tony Abbott. The Conversation

The Abbott government came to office with a view that any and all public debt was “bad”, and that returning the budget to surplus as quickly as possible was a political and economic imperative. Hence, its first budget emphasised cuts in government spending, including in areas where it had previously promised there would be no cuts.

And it increased taxes, despite having previously promised there would be no tax increases under a Coalition government. The political legacy of those broken promises – and the widespread (and largely justified) perception that those measures were manifestly unfair – contributed to Malcolm Turnbull’s near-death experience at last July’s federal election.

The first budget of the returned Turnbull government will be largely about burying the legacy of its predecessor.

Treasurer Scott Morrison will pronounce the death rites for the so-called “zombie” spending cuts left over from the 2014 budget, which the Senate has refused to pass. According to the Parliamentary Budget Office, these are still contributing almost A$8.5 billion to the improvement in the budget bottom line over the four years to 2019-20 (forecast in last year’s MYEFO). It’s also contributing almost A$43 billion of projected savings over the ten years to 2026-27.

The government will of course be seeking savings from the same areas as were to be affected by these zombie measures. But, as we have seen with the announcements last week regarding universities and schools, the savings sought will be smaller.

In addition, greater attention will be paid to perceptions of “fairness” than was the case with the “zombie” measures. The same is likely to be the case with regard to the health measures to be announced in the budget itself.

The budget will also confirm that the so-called “temporary deficit repair levy” will lapse on 1 July. This was the 2% surcharge on the top marginal personal income tax rate which was the only significant taxation measure actually implemented by the Abbott government.

The foreshadowed distinction between “good” and “bad” debt is another element of the budget’s effort to distance the Turnbull government from its predecessor. For all of Tony Abbott’s efforts to portray himself as the infrastructure prime minister, public infrastructure spending actually declined on his watch.

That partly reflected the Abbott government’s unwillingness to accept the advice of then RBA governor Glenn Stevens, the IMF, the OECD and others, that government borrowing, especially at record low interest rates, to fund well-targeted infrastructure investment was a good thing.

In this year’s budget, the government will foreshadow additional borrowing in order to finance additional infrastructure spending. Some of this will be on projects that would clearly meet Glenn Stevens’ criteria of “appropriate governance” and “appropriate pricing” – such as a second Sydney Airport. Some of it will be on projects which, more likely than not, would not pass those tests.

But the government will seek to quarantine this “good” debt from detracting from its policy and political goal of returning the budget to surplus. It will do this by focusing attention on the net operating balance or difference between revenues and operating expenses – as state and territory governments and the New Zealand government have done in their budgets for decades.

Indeed, by focusing on this measure, the budget might be able to proclaim a return to surplus in 2019-20, a year earlier than projected for the underlying cash balance.

Such an achievement would perhaps allow the government to gloss over the fact that the budget will do far less to address the on-going deterioration in housing affordability, than it had foreshadowed earlier this year.

The proposed bond aggregator will provide a vehicle for community and not-for-profit providers of affordable rental housing to borrow larger sums, for longer terms and at lower interest rates, from the bond markets. This is a welcome initiative for a sector of the housing market that has for too long received too little attention from governments.

But the government is clearly unwilling to contemplate any measures that might reduce the competition which low-income renters increasingly face from middle-income households who are no longer able to afford to become home-owners. That’s in no small part because of the competition which they in turn face from investors who enjoy tax concessions more favourable than in almost any other “advanced” economy.

This competition has seen the share of housing loans going to investors rise from less than 20% twenty-five years ago to almost 50% in recent years.

The only measure which the budget is likely to include as a form of purported assistance to would-be home-buyers – a mooted plan to allow prospective first-time buyers to make pre-tax contributions to a dedicated savings account from which they could later withdraw in order to fund a deposit. It’s only marginally less worse than the idea of allowing would-be home-buyers to draw down their superannuation savings in order to enhance their deposits.

This was a proposal which Prime Minister Turnbull rightly described as “thoroughly bad”. But as a piece of product differentiation from the Abbott government, which did absolutely nothing in the housing arena, it fits with what is likely to be the most important theme of this week’s budget.

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

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

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



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

Zareh Ghazarian, Monash University

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

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

Benefits of minor parties merging

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

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

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

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

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

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

Social conservatism

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

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

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

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

Race and immigration

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

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

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

Libertarian

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

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

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

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

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

Liberal-National Coalition

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

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

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

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

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

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

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

Labor gains in Newspoll to move to 53-47 lead


Adrian Beaumont, University of Melbourne

This week’s Newspoll, conducted Thursday to Sunday from a sample of 1710, had Labor leading by 53-47, a one point gain for Labor since last fortnight’s Newspoll that looked like an outlier. Primary votes were 36% for the Coalition (down 1), 36% for Labor (up 1), 10% for the Greens (up 1) and 10% for One Nation (steady). The Conversation

30% were satisfied with Turnbull’s performance (steady) and 59% were dissatisfied (up 2), for a net approval of -29. Turnbull’s ratings since the election have tended to be worse than voting intentions would imply, probably due to discontent from the hard right, who will nevertheless preference the Coalition ahead of Labor. Shorten’s net approval was up six points to -22.

The deal to pass company tax cuts for businesses with an annual turnover of up to $50 million was announced late Friday afternoon, two days into Newspoll’s fieldwork period. Thus this poll does not tell us about public reaction to the deal. I expect next week’s Essential will have questions on the deal.

The tax cut deal is a possible danger for Nick Xenophon. Minor parties that are perceived to have compromised on their principles in dealing with major parties can be wiped out. This happened to the Australian Democrats in the years following Meg Lees’ GST deal with John Howard, and the UK Liberal Democrats were reduced to just eight seats out of 650 at the 2015 UK general election, following five years of coalition government with the Conservatives.

60% of Nick Xenophon Team preferences went to Labor at the last Federal election, and 40% to the Coalition. If Xenophon continues to make deals with an unpopular Coalition government, his left-wing supporters could desert.

Essential at 53-47 to Labor

This week’s Essential, conducted over the last two weeks from a sample of 1800, has Labor ahead by 53-47, a 2 point gain for the Coalition since a blowout 55-45 Labor lead a fortnight ago. Primary votes are 37% Coalition, 36% Labor, 10% Greens, 8% One Nation and 3% Nick Xenophon Team. Additional questions are based on one week’s sample.

28% strongly supported the proposed changes to the Racial Discrimination Act that were defeated in the Senate last week, 27% were strongly opposed and the rest either did not have strong opinions or did not know. 51% supported a carbon emissions trading scheme in the electricity sector, with 21% opposed.

Most organisations to whom money given is tax deductible had at least majority support to remain that way, with the exception of churches and religious groups (34% support these being tax deductible, 51% oppose) and groups that campaign on social issues (34% support, 44% oppose).

Asked whether political parties should be able to receive donations from various entities, individual Australian voters were the only supported source (47-39). All other sources of donations were opposed by at least 55-30, with casinos and foreign companies at the bottom (over 70% opposed). 41% thought activist groups, such as GetUp, should not be allowed to accept foreign donations, with 31% in favour.

50% said it was never justified to break the law, while 37% thought it was sometimes justified.

High Court rules that Bob Day was invalidly elected in 2016

Today the High Court, sitting as the Court of Disputed Returns, ruled that Family First Senator Bob Day was ineligible to be elected at the 2016 election, as he had a financial interest in Commonwealth property.

The Court has ordered that a recount be held to fill Day’s seat. Such a recount will very probably elect Family First’s No. 2, Lucy Gichuhi. Since October 2016, when Day resigned from the Senate, the Senate has had 75 members, with 38 votes required to pass legislation. Gichuhi’s election will bring the Senate back to its normal 76 members, with 39 votes required to pass legislation.

Bob Day was the Coalition’s most reliable crossbench supporter, but it is wrong to say his vote has been missed because the requirement to pass legislation was reduced by one in his absence. A key question now is whether Gichuhi will be a Bob Day clone on legislation, or whether she is more left wing. Gichuhi will not be able to take her seat until the Senate next sits on 9 May.

Had the High Court ruled that Day was validly elected, his replacement would have been selected by Family First. Day’s former chief of staff, Rikki Lambert, would have been the favourite. Lambert is now Cory Bernardi’s chief of staff, and would have probably been a Bob Day clone.

A final twist could occur if the Kenyan-born Gichuhi did not renounce her Kenyan citizenship prior to the 2016 election. In that case, following another High Court challenge, the seat would go to Labor’s Anne McEwen. Fairfax commentator Adam Gartrell tweeted that Family First is confident that Gichuhi is a valid candidate.

Tasmania: Shane Broad defeats Brenton Best to replace Bryan Green

Following former Labor leader Bryan Green’s resignation from Parliament on 17 March, a recount was held Monday in his electorate of Braddon to determine who would replace him using Green’s votes at the 2014 election. While both Broad and Best were Labor candidates at the last election, Best had been a troublemaker in the last Parliament; he was strongly opposed to the Labor/Greens coalition government.

After exclusion of other candidates, Broad defeated Best by 60-40. This will be a relief to Labor, which absolutely did not want Best back in Parliament.

French Presidential election update

The French Presidential election will be held in two rounds. All candidates will compete in the first round on 23 April, with the top two proceeding to a runoff election on 7 May.

Current polls give the centrist Emmanuel Macron about 26% of the first round vote, followed by the far right’s Marine Le Pen on 25%, conservative Francois Fillon on 18%, the hard left’s Jean-Luc Melenchon on 15% and Socialist Benoit Hamon on 10%.

In the last fortnight, the standings of the top three candidates are little changed, with Macron just ahead of Le Pen now after being narrowly behind. However, Melenchon has surged at the expense of Hamon. This probably reflects prominent Socialist politicians backing Macron instead of Hamon, causing Hamon to lose votes on both his left and right flanks.

In the second round, Macron continues to lead Le Pen by about 60-40. However, Fillon’s second round lead over Le Pen is down to 53-47 in one survey, which gives Le Pen a chance in the unlikely event that Fillon rather than Macron makes the runoff.

I will be doing an article on this election for the University of Melbourne’s Election Watch in the days before the first round.

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

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

The government’s company tax cut win a triumph of politics over economics


Brett Govendir, University of Technology Sydney and Roman Lanis, University of Technology Sydney

Now that the first stage of a cut to the corporate tax rate has been passed by the Senate it’s clear the benefits are more political than economic. The cut may signal to the world that Australia wants to be competitive on corporate tax, but it won’t make much of a difference to our largest businesses and multinationals. The Conversation

Company tax cuts have been on the government’s agenda since the 2016 budget, when the cuts were announced. Ultimately, the plan was to reduce the corporate tax rate from 30% to 25% by the 2026-27 financial year for all companies.

The government has secured a cut to businesses with a turnover of under A$50 million, with companies with a turnover of less than A$10 million receiving a reduction in their tax rate (to 27.5%) this financial year. But the second stage of the tax cut is still to be passed, that would give a cut to businesses with a turnover of A$100 million in 2019-20.

The impact is all in Australia’s image

Arms of multinational companies often pay a much lower effective tax rate when compared to their parent company. Until politicians across the globe can agree how to ensure companies pay tax on local earnings, which appears unlikely in the near future, tax rates will remain a signal to multinationals on where to base their business.

The tax cuts have been strongly supported by big companies and even more so by the Business Council of Australia. A major reason put forward by the business community is the need to stay competitive in a global environment.

Our major trading partners such as the United Kingdom and United States are planning to drastically reduce their corporate tax rates and countries such as Ireland (12.5% on corporate trading profit) and Singapore (by 2018 20% capped at $20,000) already have very low corporate tax rates in place. Multinational corporations have the ability to profit shift to lower taxing jurisdictions.

For instance, a multinational can employ tax accountants to structure ownership of intellectual property in a low taxing jurisdiction and reduce gross income by license fees, or via debt loading to a parent company. Tax avoidance is often siphoned through a non-reporting subsidiary, so these accounting tricks occur without the glare of public scrutiny. In other instances multinationals have been able to completely bypass Australian tax by booking revenues overseas.

How it will affect accounting for Australian companies

When you look at what a tax cut might mean to Australian companies, it’s not hard to envisage how a tax cut tied to a specific revenue level creates incentives for accountants and lawyers to exploit new thresholds.

Accounting research from the United States shows companies do take into account tax when considering how to report their profits. For example, a typical strategy is to delay recognising an expense that belongs in the current year, until the next year.

This is usually to make it seem like the company has increased its profits, making it appear better to shareholders. However there have been no studies specifically relating to how companies might do this in relation to revenue (what the Australian government is considering for the tax cut).

At any rate, the net rate of tax on Australian company profits is considerably lower than the current 30% (or the new 27.5%) company tax rate. According to our calculations it should be around 11.3%. This is lower than the company tax rate in other similar economies.

There’s also something unique to Australia which means private companies pay less tax and that’s dividend imputation. This is designed to eliminate the double taxation of dividends in the hands of Australian shareholders.

Since it’s introduction in 1987, dividend imputation has provided strong incentives for firms to pay the full statutory tax rate on all reported profits. The tax paid on dividends flowing to Australian shareholders of Australian companies is reduced by an amount equal to the tax already paid by the corporation, this is known as imputation credits. A shareholder’s marginal tax rate, and the tax rate for the company issuing the dividend, both affect how much tax an individual shareholder owes on what is called a fully franked dividend.

Companies that pay fully franked dividends in Australia, pay on average over 10% additional tax on the same level of earnings than companies not paying franked dividends. Approximately 62.3% of imputation credits are utilised by resident shareholders.

The average effective tax rate of Australia’s largest private companies are much lower than that of the largest public companies (most of which pay fully franked dividends). You can see this in the table below which shows the effective tax rates calculated by two separate studies.

https://datawrapper.dwcdn.net/3Hvfs/2/

One of the studies by the union United Voice looked at the ASX200 companies and the otherby lobby group GetUp examined the largest private companies operated by foreign multinationals.

The corporate tax rate does figure in investment decisions of Australian companies and foreign companies wanting to do business in Australia. However, the rate of corporate tax is at best a second order effect in influencing the decisions of foreign companies. Therefore, the gains from the government win in the Senate appear to be more political than economic.

At best the tax cut may somewhat reduce the burden on smaller Australian companies, albeit at a significant cost to the budget, without impacting the largest Australian and foreign multinationals. Although prospects for further tax cuts for the big end of town (which has a greater impact on the economy) are unlikely in the next five to 10 years without Senate crossbencher support.

Brett Govendir, Lecturer, University of Technology Sydney and Roman Lanis, Associate Professor, Accounting, University of Technology Sydney

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

Labor seizes 55-45 lead in Ipsos with the Greens at an unrealistic 16%


Adrian Beaumont, University of Melbourne

This week’s Ipsos, conducted Wednesday to Saturday from a sample of 1400, had Labor leading 55-45, a 4 point gain for Labor since late November. Primary votes were 34% for Labor (up 4), 33% for the Coalition (down 3) and 16% for the Greens (steady). The headline figure in Ipsos uses the last election preferences method; by respondent allocated preferences, it is 56-44 to Labor, a 5 point gain for Labor. The Conversation

Ipsos’ two polls since the last election have both had the Greens on 16%, while no other poll during that period has had the Greens on more than 11%. In the lead-up to the last election, Ipsos had a strong skew towards the Greens. If anything, that skew appears to have increased.

40% approved of Turnbull’s performance (down 5) and 48% disapproved (up 3), for a net approval of -8. Ipsos has given Turnbull far better ratings than Newspoll. Shorten’s net approval was -18, down 2 points.

Surprisingly, 44% supported reducing company tax rates to 25% over the next ten years, with 39% opposed. Two weeks ago, Essential found that 46% disapproved of the $50 billion in cuts to medium and large business, with 24% approving. Presumably, Ipsos did not mention the cost, or which companies would benefit.

63% thought that more businesses would not open on Sundays and public holidays following the reduction in penalty rates, while 29% thought more businesses would open. A Newspoll question from last week found that 59% thought penalty rates should be higher on Sunday, 29% wanted Sunday penalty rates reduced to Saturday rates, and 10% wanted penalty rates for weekend work abolished.

In Ipsos, 78% thought it should be unlawful to “offend, insult or humiliate” someone on the basis of race or ethnicity, with just 17% for lawful. However, Essential this week found 45% approving of the proposed change to replace “insult, offend or humiliate” with “harass”, with 34% disapproving. Question wording can make a large difference.

With Ipsos at 55-45 to Labor, and Essential at 54-46, it looks as if last week’s Newspoll that showed a 3-point recovery for the Coalition to close to 52-48 may have been an outlier. The next Newspoll will be interesting.

Essential at 54-46 to Labor

This week’s Essential, conducted over the last two weeks from a sample of 1810, was at 54-46 to Labor, a one point gain for the Coalition since last week. Primary votes were 37% Labor, 35% Coalition, 10% Greens, 8% One Nation and 4% Nick Xenophon Team – this is the lowest One Nation support recorded in Essential since January. Additional questions are based on one week’s sample.

40% thought racial discrimination laws were about right, 26% too weak and 16% too strict; these figures are little changed from November.

A question on priorities for the government had 46% nominating health, followed by “ensuring big businesses pay their fair share of tax” at 30% and unemployment at 26%. Cutting company tax was at the bottom, with only 3% nominating it as a priority. Since July 2016, health is down 9 points, education and deficit reduction both down 7 points, renewable energy up 6 and same sex marriage up 4.

41% thought Australia’s relationship with the US was becoming worse, with just 6% for better, presumably due to President Trump. 59% approved of the proposal to expand the Snowy Hydro scheme, with just 12% disapproving.

Newspoll’s additional questions are sometimes skewed to the right

While voting intentions and leaders’ ratings questions are asked in the same format every Newspoll survey, additional questions on the public’s attitude to various issues have sometimes been skewed towards the viewpoint of Newspoll’s publisher, The Australian.

In this article, Kevin Bonham was critical of Newspoll’s question last week on Section 18C of the Racial Discrimination Act. Yesterday, we were told that 47% were in favour of a new coal-fired power station, with 40% opposed (paywalled link).

The question is, “Would you be in favour or opposed to the Federal government helping fund the construction of a new coal-fired power station to improve energy security?” It is not established that a new coal-fired power station, which would take years to construct, would improve energy security. Those four last words should have been omitted from the question.

A February Essential found 45% opposed to new coal-fired power stations in Australia, and 31% in favour.

Rebecca White replaces Bryan Green as Tasmania’s Labor leader

Even though the party vote shares indicated a Labor/Greens parliamentary majority, the last EMRS Tasmanian poll had Premier Will Hodgman crushing Labor leader Bryan Green as better Premier 52-20. Partly as a result of this poll, Green resigned from Parliament on 17 March, and Rebecca White was elected unopposed by the Labor caucus. The next Tasmanian election is due early next year.

A November 2016 ReachTEL poll had 31.5% preferring White as Labor leader, followed by Scott Bacon on 19%, Lara Giddings on 15% and the incumbent Green on just 14%. White was ahead in all five electorates, including Green’s electorate of Braddon.

A countback using Green’s votes will be held to decide his parliamentary replacement. Shane Broad and Brenton Best are the contenders, although only Broad has so far announced he will contest. A Best win would be bad for Labor, as he was rebellious in the last Parliament.

Donald Trump’s Obamacare repeal attempt flops

At the 2016 election, Republicans won a 241-194 majority in the US House, and a 52-48 Senate majority. Despite the large House majority, Republicans were unable to pass a bill in that chamber to repeal and replace the 2010 Affordable Care Act, otherwise known as Obamacare. Republican House Speaker Paul Ryan was forced to withdraw the repeal bill, and said afterwards that Obamacare would be the law for the “foreseeable future”.

The repeal bill failed because it lost the support of both hard right and more moderate Republicans. Appeasing the hard right Freedom caucus would have lost more support from the more moderate Republicans, and vice versa. Of course, Republicans could have made their bill centrist enough to attract some Democrats, but that would have been unthinkable!

It did not help Republicans that the public was strongly opposed to their Obamacare replacement plan. Midterm elections will be held in November 2018, and some Republicans were afraid that supporting this bill could cost their party many seats.

Nate Silver’s FiveThirtyEight website has Trump at 42% approval, 52% disapproval using a poll aggregation method. Over the last few weeks, Trump’s ratings have dropped a net six points, likely due to the health care debate.

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

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

Barnett government looks set for defeat as One Nation looms large in WA election


Image 20170303 24325 kn3mg
The odds are against Colin Barnett still being WA premier after March 11.
AAP/Rebecca Le May

Natalie Mast, University of Western Australia

The past four years have not been kind to Western Australia. Coming off a once-in-a-lifetime boom, the bust, which for some reason the state always forgets to anticipate, is cutting deep, and it’s proving a problem for the Barnett-led Coalition government. The Conversation

It’s the economy, stupid

Treasury’s pre-election financial projections statement has growth for the financial year dropping from 1% to 0.5%.

While the current and next financial year budgets are expected to have smaller deficits than projected, primarily due to a three-year high in iron ore prices, state debt is expected to reach A$41.1 billion in 2020. Treasury does not foresee an operating surplus in the forward estimates period.

Population growth, driven by interstate and international migration, has fallen from 4% a year in 2012 to just over 1%.

Job uncertainty is a major issue. WA now has the highest unemployment level in the country, at 6.5% in January, although the rate has dropped by 0.2% since November 2016.

Many Western Australians are now fearful of losing their jobs while having to maintain large mortgages. This is in a climate in which the median value of a house in Perth has fallen back to 2013 levels, down 2.3% in 2016.

It’s worse in some remote parts of the state, where property prices have dropped by up to 75% over the last three years.

For those who have maintained their jobs, many are still in a worse financial position as bonuses and other financial incentives from the boom dry up. Others managing to find employment now have reduced salaries.

The public education system has increased its share of the students in each of the last five years. Part of this rise has been attributed to the downturn in the economy, as people divert money from school fees to the mortgage and other essentials. This in turn adds costs to the state budget.

Who’s responsible for this situation?

During his two terms, Premier Colin Barnett has projected the image of a leader in control. Treasurers have come and gone, and most ministers have minimal presence in the media. Barnett is the face of the government, and he bares the brunt of a scared and angry population, wondering what happened to his 2009 promise of a 20-year boom with growth of 5-7% a year.

At the time of the 2013 leaders’ debate, state debt was around A$18 billion, but Barnett insisted the rate of increase would not be maintained. Instead, over the last four years, the debt has risen by around A$15 billion.

In August 2014, the state lost its AAA credit rating. In February 2016, Moody’s further downgraded the rating from AA1 to AA2.

During the recent leaders’ debate on February 22, Barnett pointed to his government’s investment in schools and health, with construction of the Fiona Stanley and new Perth Children’s hospitals. The latter has yet to open and is now more than a year behind schedule.

Part of the reason for the government’s high debt levels are investments in Perth infrastructure, such as a new stadium, which will open in 2018, Elizabeth Quay and the sinking of the railway line and bus station in Northbridge.

While of long-term benefit to the city, the last two projects are releasing inner-city land for development at a time when office vacancies are at 30% with retail vacancies at a similar level.

Other key election issues

Without funds to play with, promises are limited. Barnett is arguing that his government is a strong pair of hands for these hard times.

There are two significant issues separating the Labor and Liberal parties at this election.

The first is the privatisation of Western Power, which the government will use to pay off part of the state’s debt.

Labor leader Mark McGowan is running an old-fashioned scare campaign claiming prices will rise if the monopoly is sold. Energy prices have long been contentious in Western Australia, with the Barnett government overseeing a 67% price increase for households since 2009, admittedly off an artificially low base. McGowan is arguing the state should not sell off a revenue-generating monopoly to deal with the debt.

The second issue is public transport. The Barnett government has broken promises to deliver improved services to the outer suburbs of Perth, in places such as Ellenbrook.

The government’s key 2013 election transport promise of Max light-rail was abandoned as the state’s economic situation deteriorated.

Labor has resurrected its highly popular Metronet rail plan from the last election. Federal leader Bill Shorten is promising to help fund the plan should Labor return to government at the national level.

The costs of Metronet appear rubbery at the moment, but WA Labor is also planning to divert federal funding from the controversial Roe 8 highway.

While Prime Minister Malcolm Turnbull has stated the Commonwealth will not allow the diversion of funds, McGowan is pointing to the success of the Victorian Labor government in cancelling the East-West Link and using the funding for other projects.

WA is also seeing an increase in crime, some of which is linked to the so-called ice epidemic. Both parties are promising to be tough on crime. The Liberals are promising mandatory sentencing and Labor is advocating a maximum sentence of life for meth dealers.

During his blink-and-you-miss-it trip west, Turnbull disappointed Liberals with his lack of a plan to provide WA with its fair share of GST. Barnett has been campaigning on this issue for years, and the claimed A$4.7 billion annual shortfall in funds would help with the budget deficit.

Just how big is the swing to Labor?

There are 59 seats in the Legislative Assembly. The Liberals go into the election holding 30 seats and the Nationals seven, for a total of 37. Labor holds 21 seats. There’s one independent, former Liberal minister Rob Johnson.

In the 2015 electoral boundary redistribution, the Liberals notionally gained a seat from Labor.

To win government, Labor needs to win ten seats, with a uniform swing of around 10%.

Polling has been somewhat inconsistent. A ReachTEL poll for The West Australian on February 19 showed a two-party-preferred (TPP) result of 50-50. The two previous polls had Labor at 52-48 on TPP.

On February 23, The West published a private poll of marginal seats funded by advocacy group, The Parenthood, again conducted by ReachTEL. The West noted a surge to Labor, with all six seats polled (Southern River, Perth, Mt Lawley, Wanneroo, Joondalup and Bicton) predicted to fall with an average TPP swing of 15%.

A swing of this magnitude would deliver a decisive Labor victory, with the party winning 41 seats.

Fairfax commissioned a ReachTEL poll published on March 3, in which Labor had a 52-48 lead on the TPP vote. The swing of 9% suggests Labor could fall one seat short in its bid to gain government.

How important are One Nation Preferences?

From a purely pragmatic viewpoint, Barnett’s preference deal with One Nation is a legitimate gamble. His unpopular government is facing electoral defeat and with One Nation’s fortunes on the rise again in WA, shoring up the two party preferred vote is essential.

There are risks in the deal. The first question put to the premier by the panel at the leaders’ debate focused on how a man with integrity could engage in a “dirty preference deal”. While One Nation may have become more politically savvy, the party’s distasteful views remain and trying to suggest the party reflects mainstream opinion is disingenuous.

Barnett risks losing preferences from Nationals who are outraged at being placed behind One Nation in the Legislative Council, Greens who won’t direct their preferences on principle, and moderate Liberals protesting the deal.

The flow of preferences from One Nation supporters isn’t guaranteed either. Despite Pauline Hanson’s “it’s my party, I am the leader and I make the deals” position, a number of WA One Nation candidates are unhappy. Two were disendorsed — although it is unclear how large a role their position on the preference deal played.

A week out, the bookmakers have Labor at A$1.30 and the Coalition at A$3.40. The betting would suggest that WA is about to have a change of government.

Natalie Mast, Associate Director, Business Intelligence & Analytics, University of Western Australia

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

WA ReachTEL: Labor leads 52-48, One Nation down, Greens up


Adrian Beaumont, University of Melbourne

The West Australian election will be held in eight days, on 11 March. A Fairfax ReachTEL poll, conducted Monday night from a sample of 1660, has Labor leading 52-48, a 2 point gain for Labor since a ReachTEL poll for The West Australian, two weeks ago. The Conversation

ReachTEL asked a main voting intentions question with an undecided option, then further queried the 5.1% undecided as to which way they were leaning. Combining responses for these questions gives primary votes of Liberals 34.6% (down 0.8), Nationals 6.8% (down 1.6), Labor 35.2% (up 0.2), Greens 10.7% (up 4.7) and One Nation 8.5% (down 3.2).

The surge for the Greens is likely a correction from previous low Green votes in ReachTEL’s polls. At the 2016 Federal election, the Greens won 12.1% in WA, above their national vote share of 10.2%. In WA, the Greens tend to do relatively well and Labor relatively badly compared to the national vote at Federal elections.

The drop for One Nation may be due to discontent at One Nation doing a preference deal with one of the big parties that its voters despise. Research reported by Possum (Scott Steel) also indicates that many people voting for One Nation are doing so as a protest against the major parties, but they do not agree with One Nation’s policies, and dislike Donald Trump.

If this is the case, some people who currently say they will vote One Nation may desert as the election approaches and they become more aware of One Nation’s policies. This is also happening in the Netherlands; December polls had Geert Wilders’ Party for Freedom easily winning more seats than any other party, but a dramatic slump in their support now has them second. The Dutch election will be held on 15 March.

At the 2013 WA election, the Liberals thrashed Labor 57.3-42.7 after preferences, and the Liberal/National alliance won 38 of 59 lower house seats, to 21 for Labor. Labor notionally lost a seat following a redistribution, so they need to gain 10 seats to win majority government.

On paper, Labor requires a uniform swing of 10.0 points to gain their 10th seat (Bicton). Labor would thus need 52.7% of the vote after preferences to win the election. However, marginal seat polling suggests that Labor is winning the required swing where it counts, though seat polls have not been accurate in the past.

Galaxy poll update Sunday morning: 54-46 to Labor

A Galaxy poll, conducted Wednesday to Friday from a sample of 1115, has Labor leading by 54-46, from primary votes of Labor 40%, Liberals 31%, Nationals 5%, One Nation 9% and Greens 8%.

A Newspoll in late January and this Galaxy poll have both bad Labor well ahead of the combined Liberal/National vote on primaries, while ReachTEL’s polling has been more favourable for the Liberals. It will be interesting to see which pollster is correct next Saturday.

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

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

Coalition trails 45-55% and Turnbull’s ratings sink in Newspoll


Michelle Grattan, University of Canberra

A disastrous Newspoll showing the Coalition trailing Labor 45-55%, One Nation gaining ground and Malcolm Turnbull’s ratings falling will fuel the alarm and anger in the Coalition as it returns to parliament in the wake of Tony Abbott’s outburst. The Conversation

Abbott will cop much blame for the result. But the worsening in Turnbull’s personal numbers also suggests his recent more aggressive performance hasn’t impressed the public as much as it did his colleagues.

The poll, in Monday’s Australian, showed a further deterioration from the 46-54% two-party vote of three weeks ago, which had been the worst result of Turnbull’s prime ministership. One Nation has increased its support from 8% to 10% over the three weeks.

The poll was taken Thursday to Sunday, so Abbott’s provocative Thursday evening speech and TV interview – warning of the risk of a “drift to defeat” and setting out his alternative agenda including a call for lower immigration – would have fed straight into it.

Turnbull’s net satisfaction has plummeted by nine points, from minus 21 to minus 30; Shorten’s net satisfaction has dipped by four points, from minus 22 to minus 26. Turnbull has also lost ground in his lead over Shorten as better prime minister – 40% (down two points) to 33% (up three points).

The Coalition’s primary vote has fallen one point to 34%, with Labor increasing one point to 37%. The Greens are on 10% and “others” are on 9%.

Parliament resumes not only with the government’s division on display but with Labor having ammunition after last week’s decision by the Fair Work Commission cutting Sunday penalty rates for the hospitality, retail, fast-food and pharmacy sectors.

Abbott’s intervention has been condemned by colleagues, but his former chief-of-staff Peta Credlin defended him at the weekend.

She said that as a former prime minister he had every right to make a speech “outlining what he thinks the Coalition needs to do to win back its supporters and govern in Australia’s national interest”, although she was critical of his also doing a media interview.

“Of course, it would have been easier for everyone if he’d given his counsel in private, but the PM has made it clear he doesn’t want Abbott’s advice so it is hard to criticise him for speaking publicly,” she wrote in the Sunday Telegraph.

She said Abbott had come back from a large number of marginal seat visits “so he has no illusions about the anger among Coalition supporters and party members”.

Credlin wrote that despite what Turnbull said, Coalition supporters didn’t believe he “has a conservative bone in his body”.

“Regardless of his promises, Turnbull’s problem has always been a lack of authenticity,” she wrote.

“It comes down to this: Malcolm Turnbull is desperate to hold on to power and Tony Abbott is desperate to hold the Liberal Party together. It’s not necessarily the same thing.”

On Sky Credlin said “there is absolutely no relationship” between Abbott and Turnbull: “it was manufactured to get everybody through the campaign so no one could accuse Abbott of being a wrecker”.

Credlin also said she did not believe Abbott wanted the prime ministerial job again: “I think he would have a hard time reconciling around that cabinet table with people like Christopher Pyne and Julie Bishop and others who would very likely stay in the senior ranks.”

Finance Minister Mathias Cormann, an Abbott loyalist to the end of his prime ministership, who on Friday strongly criticised Thursday’s intervention, told Sky he had “thought it was important to send a very clear message … to essentially signal that enough is enough”. He said that “obviously private messages hadn’t been heeded”.

His Friday criticism of Abbott was not co-ordinated with Turnbull’s office, Cormann said. “It was off my own bat … I made the judgement it was necessary and appropriate to say what I said.”

Shorten on Monday will give notice of a private member’s bill to protect penalty rates. The bill would prevent the decision of the Fair Work Commission from taking effect. It would also ensure that penalty rates could not be cut in future if that resulted in a cut in take-home pay.

In a letter to Turnbull on Sunday, Shorten said at least 600,000 people would be hurt by this pay cut and the brunt of the decision would be borne by low income earners.

Calling for the government to intervene to head off the cuts, Shorten wrote that “a decision not to intervene is a decision to endorse the proposed cuts to pay. There is no doubt that this decision will cause genuine financial hardship. It is simply unacceptable to reduce penalty rates without compensation.

“You have a window to act before the commission issues its determination and the opposition would work with you to ensure this devastating cut to low paid workers’ income never occurs,” Shorten wrote.

The government, aware the pay cut is likely to rebound on it, is stressing it is the decision of the “independent umpire” rather than a government decision.

It also points out that when workplace relations minister, Shorten brought in an amendment that referred to penalty rates being included in the review of awards.

But Shorten said in his letter that his 2013 amendments were intended to ensure the commission took into account “the need to provide additional remuneration for employees working outside normal hours”.

“It was clearly the parliament’s intent that the award review process would not ever result in a cut to worker’s pay.”

On Friday the Greens flagged a private member’s bill to prevent the commission’s decision from coming into effect.

https://www.podbean.com/media/player/j795u-67fef0?from=yiiadmin

Michelle Grattan, Professorial Fellow, University of Canberra

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

Labor leads 55-45 in Newspoll as Turnbull’s ratings tank


Adrian Beaumont, University of Melbourne

This week’s Newspoll, conducted Thursday to Sunday from a sample of 1680, gave Labor a 55-45 lead, a 1 point gain for Labor since the previous Newspoll, three weeks ago. Primary votes were 37% for Labor (up 1), 34% for the Coalition (down 1), 10% for the Greens (steady) and 10% for One Nation (up 2). It appears that One Nation is now in Newspoll’s party readout, so their support should not be underestimated. The Conversation

29% were satisfied with Turnbull’s performance (down 5), and 59% were dissatisfied (up 4), for a net approval of -30, down 9 points. This is a record low net approval for Turnbull; his previous low was -28. Shorten’s net approval also slumped four points to -26.

According to Kevin Bonham, Turnbull and Shorten are now at a combined low net approval of -56, though they are still five points above Abbott and Shorten’s record low of -61. Paul Keating and John Hewson hold the record low net approval with a combined score of -76.

While Turnbull’s parliamentary performance in the first two weeks of sittings won plaudits from the political press, Newspoll suggests it did not impress the general public. Essential’s findings below show that the public is strongly in favour of renewable energy, undermining the pro-coal and anti-renewables rhetoric of the Coalition and their right wing media cheerleaders.

Three weeks ago, I wrote that there was no evidence from the polling under Abbott or Turnbull that Australians want a hard right government. When Turnbull adopts Abbott-type policies and rhetoric, his ratings and the Coalition’s come to resemble those under Abbott. To some extent, Abbott was protected by reluctance to return to Labor after one term, but the Coalition is now into its second term.

An additional Newspoll question finds that 17% would be willing to pay an extra $300 or more per year for renewable energy, 26% would pay an extra $100 and 45% nothing more. These figures are little changed from October 2016.

Essential at 53-47 to Labor

Primary votes in this week’s Essential are 37% Coalition, 37% Labor, 9% Greens, 9% One Nation and 3% Nick Xenophon Team. Voting intentions are based on a two-week sample of 1800, with other questions using one week’s sample.

Since September last year, positive attributes of Turnbull fell slightly and negative attributes rose slightly; the biggest change is for visionary (down 5). Shorten’s attributes moved in the same direction as Turnbull’s, though to a lesser extent. The three biggest attribute differences between the two leaders are on out of touch (Turnbull by 18), intelligent (Turnbull by 12) and arrogant (Turnbull by 12).

44% approved of negative gearing (up 1 since May 2016), and 35% disapproved (down 1). 41% disapproved of investors receiving a capital gains tax deduction on profits made selling properties, and 37% approved. Asked what would be the effect of limiting negative gearing and reducing the capital gains tax concession, 32% said house prices would rise at a slower rate, 19% said house prices would fall and 17% said house prices would rise at the same rate.

46% thought housing affordability was more important for the government to address, while 44% selected rising energy prices. 64% would support a royal commission into banking, with just 16% opposed.

In last week’s Essential, 60% (up 6 since December) thought climate change is happening, and is caused by human activity, while 25% (down 2) thought we are witnessing a normal fluctuation. This is a record high for human caused climate change in Essential’s polling, and probably reflects the effects of the recent heatwave across eastern Australia.

65% supported Labor’s 50% renewable energy target by 2030, with only 18% opposed. 45% blamed the recent SA power blackouts on failures of the energy market, 19% blamed it on privatisation of the energy market, and only 16% blamed renewables. 64% thought renewable energy was the solution to our future energy needs, and only 14% thought it a threat to our energy supply. 45% opposed building new coal-fired power stations, with 31% in favour.

29% approved of the Liberals directing preferences to One Nation in the WA election, and 38% disapproved. 82% thought people required to work outside normal hours should receive a higher hourly pay rate, and only 12% disagreed.

Victorian Galaxy: Labor holds narrow lead, but Andrews has negative rating

A Victorian Galaxy poll had Labor holding a 51-49 lead, a one point gain for the Coalition since a November Galaxy. Primary votes were 41% for the Coalition (down 1), 37% for Labor (steady), 10% for the Greens (down 2) and 8% for One Nation. 35% approved of Premier Daniel Andrews, and 52% disapproved, for a net rating of -17; this question was not asked in November. 52% thought Victoria had become less safe under Labor, with just 15% for more safe. This poll was conducted 16-17 February from a sample of 1090.

A separate Galaxy poll of the Labor-held seat of Werribee, conducted 16 February with a sample of 550, had Labor crashing, probably due to concerns about a proposed youth prison in Werribee. The Liberals held a 51-49 lead, a massive swing of 17 points since the 2014 election. Primary votes were Liberals 35% (up 6), Labor 29% (down 28!), One Nation 21% and Greens 7% (down 2). 85% disapproved of the youth prison, with only 12% in favour.

These two Galaxy polls were taken before the Speaker and deputy Speaker of Victoria’s lower house resigned owing to abuse of parliamentary entitlements.

Queensland redistribution

Last year, the Liberal National Party (LNP) combined with crossbenchers to expand the unicameral Queensland Parliament from 89 to 93 seats, despite the objections of the Labor government. The LNP thought they would lose seats under a redistribution had the old 89 seats been retained.

On Friday, the Queensland Electoral Commission published draft boundaries for the redistribution. Antony Green has calculated the new margins in all seats. He finds that Labor would win 47 of the 93 seats based on votes at the 2015 election. The LNP would win 44, the Katter Party one, and one Independent. The 2015 election result was 44 Labor, 42 LNP, 2 Katter and 1 Independent.

These calculations ignore two defections from Labor and one from the LNP since the last election. They assume standard two party contests, so the surge in support for One Nation could throw them out.

UK Labour suffers disastrous by-election loss

On Thursday, UK by-elections occurred in the Labour-held seats of Stoke Central and Copeland. Labour retained Stoke Central with a small swing against them, but in Copeland the Conservatives won by 44.3% (up 8.5 points since the 2015 election), to 37.3% for Labour (down 4.9). At the 2015 election, Labour won Copeland by 6.5 points.

This is the first time a government has gained a seat at a UK by-election since 1982. In that case, and in several other cases, the opposition’s vote was split at the by-election by sitting members contesting for another party. The last time a UK government won an opposition-held seat at a by-election without vote splitting was 1960, but that seat had only been won by 47 votes at the previous general election. According to Number Cruncher Politics, 1878 was the last time a truly comparable event occurred.

Current polls have the Conservatives in the low 40’s and Labour in the mid 20’s. The Copeland by-election adds to the evidence that Labour faces an utter shellacking at the next general election with Jeremy Corbyn as its leader.

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

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