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


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

Tony Walker, La Trobe University

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

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

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

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

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




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


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

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

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

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

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

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

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

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

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

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

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

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

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

This was the nub of Morrison’s statement:

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

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

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

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

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




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


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

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

This review included consultations with:

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

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

In other words, Australia should adhere to settled policy.

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

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

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

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

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


Peter Martin, The Conversation

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

Modestly improved surpluses

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

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



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



$9 billion in unannounced tax cuts

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

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




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


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

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

Downgraded wage growth

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

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



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

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

Weaker consumer spending, economic growth

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

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

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

But debt has peaked and is headed down

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



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

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



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

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

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

No firm commitment on fiscal discipline

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

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




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


The Conversation


Peter Martin, Editor, Business and Economy, The Conversation

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

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


Danielle Wood, Grattan Institute and Kate Griffiths, Grattan Institute

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

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

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

Target 1: Surpluses on average over the cycle

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

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

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

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

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

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




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


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

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

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

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

Verdict: Fail.



Target 2: Reduce the payments-to-GDP ratio

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

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

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

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




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


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

Verdict: Debateable pass.



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

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

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

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

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

Verdict: Pass.


MYEFO Chart.


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

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

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

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

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




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


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

Verdict: Fail.

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

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

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

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

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

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




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


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

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

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

Verdict: Fail.

Our final verdict

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

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

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

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

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

Government hopes Jerusalem compromise will smooth Indonesian trade deal


Michelle Grattan, University of Canberra

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SUNDAY UPDATE: Malaysia slams Morrison Jerusalem decision

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

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

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

Michelle Grattan, Professorial Fellow, University of Canberra

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

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



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

Stephen Duckett, Grattan Institute

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

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

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

Bad for Commonwealth-state relations

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

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




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


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

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

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

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

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

It is a federalism fail.

An opaque policy

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

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

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




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


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

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

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

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

This policy is a transparency fail.

Politics versus policy

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

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



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


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

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

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

Stephen Duckett, Director, Health Program, Grattan Institute

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

Government agrees to national anti-corruption body – with strict limits


Michelle Grattan, University of Canberra

The government has given in to pressure to set up a new Commonwealth
Integrity Commission
but its operation would be strictly
circumscribed, without the ability to hold public hearings into
allegations of corruption against politicians.

While the new organisation would be the lead body in Australia’s
multi-agency anti-corruption framework, Scott Morrison stressed the
government had learned the lessons of “failed experiments” at state
level.

“I have no interest in establishing kangaroo courts that, frankly,
have been used, sadly, too often for the pursuit of political,
commercial or bureaucratic agendas in the public space”, he told a
joint news conference with Attorney-General Christian Porter.

The announcement comes after crossbench pressure in the final sitting
of parliament for a new federal anti-corruption body, which had
earlier been promised by the opposition. Morrison said the government
had been working on the issue since January.




Read more:
View from The Hill: Day One of minority government sees battle over national integrity commission


Opposition leader Bill Shorten slammed the proposed body as “not a
fair dinkum anti-corruption commission”. It would be limited in scope
and power and have no transparency.

Also – given it would not be able to investigate matters
retrospectively – “Mr Morrison should explain to the Australian people
why he wants to set up a national anti-corruption commission which
curiously exempts himself and the current government from any
scrutiny”.

Morrison and Porter said in a statement that the CIC, an independent
statutory agency, would be headed by a commissioner and two deputy
commissioners, and have public sector and law enforcement integrity
divisions.

“The public sector integrity division will cover departments, agencies
and their staff, parliamentarians, and their staff, staff of federal
judicial officers, and subject to consultation judicial officers
themselves, as well as contractors.”

The Australian Commission for Law Enforcement Integrity would be
reconstituted as the law enforcement integrity division. It would have
an expanded jurisdiction to also include the Australian Competition
and Consumer Commission, the Australian Prudential Regulation
Authority, the Australian Securities and Investment, the Australian
Taxation Office, and the whole of the Agriculture Department.

Both divisions would investigate allegations of criminal corruption.
The criminal law would be amended to add new corruption offences.

The CIC would have the power to conduct public hearings only through
its law enforcement division.

The public sector integrity division would not be able to make public
findings but would investigate potential criminal conduct and refer
matters to the Commonwealth Director of Public Prosecutions.

The government outline of its proposed operation says “it will only
investigate criminal offences, and will not make findings of
corruption at large.

“It will not make findings of corruption (or other criminal
offending). Findings of corruption will be a matter for the courts to
determine, according to the relevant criminal offence. This addresses
one of the key flaws in various state anti-corruption bodies, being
that findings of corruption can be made at large without having to
follow fundamental justice processes.”

The CIC’s investigatory role is to “complement” the work of the
Australian federal Police. “The AFP will retain its role in
investigating criminal corruption outside of the public sector, and
could cooperate with or take over investigations on referral by the
CIC where appropriate”.

The public sector division “will focus on the investigation of serious
or systemic corrupt conduct, rather than looking into issues of
misconduct or non-compliance under various codes of conduct”.

Independent Andrew Wilkie said the proposal was “fundamentally flawed
and entirely unacceptable.”

“For example the public sector integrity division, which will
investigate parliamentarians and their staff, can only investigate a
specific set of criminal offences and can’t make findings of
corruption, which is just bizarre.

“Moreover an MP can only be referred by a particular agency and
there’s no way for the public to refer someone – and there’ll be no
public hearings at all meaning the Commission will operate behind
closed doors”.

Crossbencher Kerryn Phelps tweeted “I can’t speak for the entire
crossbench but I certainly won’t be supporting any proposal that fails
to result in adequate transparency and proper investigative powers”.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.

Grattan on Friday: 2018, the year of governing badly


Michelle Grattan, University of Canberra

Looking back on the federal politics of 2018, voters can conclude
they’ve been given a rough trot.

What’s been dubbed “the permanent election campaign” to which we are
subjected these days is a curse. Too often it encourages expedient
rather than sound decisions and ugly behaviour dominated by noise and
stunts.

Added to that, we’ve had from the Coalition this year an extraordinary
series of leadership, policy and individual meltdowns. A government
that started 2018 with a one-seat majority ends it in a minority,
after the loss of a byelection and a defection to the crossbench.

This has indeed been the year of governing badly.

As the Coalition struggles towards Christmas it has been buffeted this
week by a sex scandal involving an obscure Nationals MP and an attack
from its own side over its energy policy.

The cavorting of Andrew Broad in “sugar baby” land has left the
Nationals looking for a candidate for the Victorian seat of Mallee,
safe in normal circumstances, but not to be taken for granted in these
days of community independents and when the incumbent has been
disgraced. (Broad will be around until the election –
there is no byelection.)

Senior Nationals want a woman to run. The party’s deputy leader,
Senator Bridget McKenzie, is not ruling out seeking preselection but
has no connection with the area. One government source says “it would
be pretty late for her to be carpetbagging” into the seat. A strong
local would seem better.

Whether the Liberals will make it a three-cornered contest is an open
question (though they probably wouldn’t field a candidate if McKenzie
ran).

In 2016 the Nationals contested Murray after a Liberal retired, and won the seat; the Liberals might think they could
benefit in this contest from any backlash against the Nationals over
Broad’s conduct. On the other hand, would they want to spend money on this seat in an election when dollars will be tight?

The Nationals have often been a steady and stabilising force within
the Coalition. Coming out of this year they look like a chaotic rump,
unable to manage their personal and political lives.

Barnaby Joyce destroyed his leadership with an affair and has been
undermining his party as he attempts to get it back. McCormack is a trier
facing a job that often looks beyond him. He’ll last to the election
(well, presumably) but probably not after that.

Prime Minister Scott Morrison is the ultimate trier, believing the
only possible salvation for the government is constant activity. For a
very short time, he looked reasonably effective. But then all the
freneticism started to appear contrived and fake.

One big challenge Morrison has not been able to handle is the
Coalition’s “woman problem”. Minimal female representation in both
Coalition parties, claims of bullying in the Liberals, and the
defection to the crossbench of Liberal MP Julia Banks will inevitably
put off female voters. The Broad scandal feeds into the negative
narrative.

Morrison himself has a “blokey” image that might turn away some female
voters although Liberal sources dispute this.

It’s ironic that neither Coalition party will embrace quotas but
Morrison wanted a female candidate in Wentworth (only to be rebuffed
by the preselectors) and now Nationals president Larry Anthony urges a woman for Mallee.

Women are thought to be useful in desperate circumstances, it seems.

Amid all the year’s bedlam in conservative politics, one major policy
issue remains a complete muddle – or more precisely it is the intersection of
two issues, energy and climate.

The bitter battle within the Liberals over energy didn’t just bring
down Malcolm Turnbull – it stopped the formulation of the sort of
viable policy business pleads for, to give certainty to investors.

This week the Berejiklian government called out its federal
counterpart; state energy minister Don Harwin declared it “out of
touch” on energy and climate policy, saying “it’s time for them to
change course”. But at a testy meeting of the COAG energy council
federal minister Angus Taylor was defiantly unmoved.

Also this week came criticism from the Energy Security Board, which
says in its 2018 Health of the Electricity Market report that when
investment is needed “it is not helpful for the Commonwealth
government to be threatening powers of divestment, price setting and
discretionary asset write-downs.”

Energy policy both symbolises the deep ideological divide in the
Liberal party and is at the core of it. The party won’t be credible on
policy until it can formulate a broad position that is acceptable to
stakeholders and the community. If it goes into opposition next year,
doing so should be a top policy priority.

Its plan for a National Energy Guarantee was scuttled by the
government itself during those crazy coup days in August. But this was
not before devising the scheme had given then energy minister Josh
Frydenberg a chance to show his credentials, as a policy formulator
and a negotiator.

Frydenberg lost the NEG but won his colleagues’ respect. He received
an overwhelming vote for Liberal deputy; as things stand, he’s well
placed to lead his party at some future point.

Now treasurer, Frydenberg is one of the few senior Liberals who has
looked half way impressive this year. His next test will be the April
2 budget, although naturally ownership of that will lie as much or
more with Morrison.

The timetable for a May election is now set. The government wants to
maximise the period it has to try to regroup.

When parliament rose there was speculation the government might not
want it to return in February because the Coalition faced a House
defeat on a amendment to facilitate medical transfers from Manus and
Nauru. This might make a March election more attractive, so the
argument went.

But the government doesn’t seem so concerned about that vote now,
believing some of the crossbenchers will drop off the amendment or
want to weaken it.

Looking to 2019: the betting is firmly on an ALP victory, in the
absence of a surprising turn of events. A win by either side would at
least bring an end to the revolving prime ministerships, thanks to
rule changes.

Assuming Labor won a solid majority, hopefully the voters might also
get a little respite before the continuous campaigning started up
again.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.

View from The Hill: Malcolm Turnbull and his NEG continue to haunt the government



File 20181204 34148 17lkcuy.jpg?ixlib=rb 1.1
The former PM via twitter effectively inserted himself into Question Time – in real time.
Dan Himbrechts/AAP

Michelle Grattan, University of Canberra

If anyone needs further evidence of the self-defeating weird places
the Liberals seem to find themselves in, consider what happened on
Tuesday.

Malcolm Turnbull made another intervention in the political debate,
this time talking about the National Energy Guarantee, when he spoke
at an energy conference on Tuesday morning.

“I’ve strongly encouraged my colleagues to work together to revive the
National Energy Guarantee. It was a vital piece of economic policy and
had strong support, and none stronger I might say, than that of the
current Prime Minister and the current Treasurer,” he said.

This and the rest of Turnbull’s observations on energy policy provided
abundant material for a question time attack by a Labor party bloated
from dining on the unending manna that’s been flowing its way from
some political heaven.

As Scott Morrison sought to counter this latest attack by concentrating on
Labor’s substantial emissions reduction target (45% on 2005 levels by
2030), suddenly a tweet appeared from Turnbull.

“I have not endorsed “Labor’s energy policy”. They have adopted the
NEG mechanism,“ Turnbull said – adding a tick of approval – “but have
not demonstrated that their 45% emissions reduction target will not
push up prices. I encouraged all parties to stick with Coalition’s NEG
which retains wide community support.”

Here was the former PM effectively inserting himself into Question
Time – in real time.

Morrison quickly quoted from the tweet, but it couldn’t repair the
damage done by Turnbull’s earlier comments.

All round, it was another difficult day for the government on the energy front.

The Coalition parties meeting discussed its controversial plan
providing for divestiture when energy companies misuse market power,
with conduct that is “fraudulent, dishonest or in bad faith” in the wholesale market.

The government has put more constraints on its plan than originally
envisaged. Notably, rather than a divestiture decision resting with
the treasurer, it would lie with the federal court (although precisely what this would mean is somewhat unclear).

Treasurer Josh Frydenberg told a news conference: “This power will be on the advice
of the ACCC [the Australian Competition and Consumer Commission] to
the Treasurer, and then the Treasurer will make a referral to the
Federal Court. The Federal Court will then be empowered to make that
judicial order.”

There had already been backbench criticisms of the divestiture proposal expressed to Frydenberg last week; the changes dealt with some of these.

But the plan is still leaving some in Coalition ranks uneasy.

According to the official government version, in the party room 18
speakers had a say, with 14 supporting (though a couple of them were
concerned about the interventionism involved) and four expressing
varying degrees of reservation. No one threatened to cross the floor.

Backbench sources said the strongest critics were Jason Falinski,
Russell Broadbent, Tim Wilson and former deputy Liberal leader Julie Bishop,
while milder criticisms came from Craig Laundy, Scott Ryan and Jane
Prentice.

There were two main worries about the measure – the potential negative
impact on business investment and its inconsistency with Liberal party
free market principles.

Bishop – who, it might be recalled, was recently saying there should
be a bipartisan deal with Labor on the NEG – highlighted the
investment implications and the issue of sovereign risk.

She said: “This is not orthodox Liberal policy. We need to do more
consultation with the industry and we need to be cautious of
unintended consequences of forced divestiture”.

Addressing the concerns, Morrison told the party room that a variety
of principles were at play.

The energy sector was not “a free market nirvana” but rather “a
bastardised market,” he said. The law was targeted at situations where
sweetheart deals came at the expense of consumers.

Energy minister Angus Taylor said governments of the centre-right,
including the Menzies and the Thatcher governments, had acted to
ensure markets operated for consumers.

Taylor invoked an example of the beer drinkers against the brewers,
when Thatcher had been on the side of the beers drinkers.

Frydenberg produced a quote from Menzies’ “Forgotten People”
broadcasts about the need to balance the requirements of industry with
social responsibilities.

The legislation, which is opposed by Labor even with the changes, is
being introduced this week. But there is no guarantee that it can be
passed by the time of the election – not least because there are so
few sitting days next year.

So the most controversial part of the government’s “big stick”, which
has caused so much angst with business, may never become a reality.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.

Liberals adopt new rule to stop the revolving prime ministership


Michelle Grattan, University of Canberra

Scott Morrison has announced a major change in Liberal party rules to
ensure a prime minister who wins an election serves the full term,
unless two thirds of the party decides otherwise.

Morrison said the Liberal party had heard the public and was responding.

The entire party understood “the frustration and the disappointment
that Australians have felt when governments and prime ministers that
they have elected, under their authority, under their power, have been
taken from them through the actions of politicians here in Canberra,”
he said at a joint news conference with Liberal deputy Josh Frydenberg
on Monday night.

This had happened with the Liberal party as well as Labor, Morrison
said. “We acknowledge it and we take responsibility for it.”

The Australian people were “sick of it and we’re sick of it and it has to stop,” he said.

The Liberal party was “willingly and enthusiastically putting this
constraint to return the power of these decisions about who is prime
minister in this country to the Australian people.”

Morrison described the rule change as historic and the biggest in the
74 years of the party’s history.

Frydenberg said: “The changes in Australian prime ministers over the
last decade has diminished the parliament and its representatives in
the eyes of the public. The Liberal party has listened to the
Australian people and the Liberal parliamentary party has responded
tonight.”

Earlier, Liberal members of the ministry approved the new rule, before
it went to an evening special meeting of the Liberal parliamentarians.

Morrison discussed the proposed change with former prime minister John
Howard, but not with Malcolm Turnbull.

He briefed Tony Abbott who was the first speaker from the floor.
Strongly supporting the proposal, Abbott – who lost the prime
ministership before he had served a full term – thanked Morrison for
bringing him into his confidence.

Morrison said the change was carried by consensus. He declined to be
drawn on differences expressed within the meeting.

He said he had asked the party whips, Nola Marino and David Bushby, to
work up a proposal. He’d had a view for some time that something
needed to be done.

The party meeting discussed whether the threshold should be two thirds
or three quarters. There was some questioning about the position of a PM who had the weight of the party against them but was just under the threshold for change.

But speakers who had differences on the detail made it clear they would swing in behind what was finally decided.

The Labor party already has rules that restrain leadership changes
including of an opposition leader, although they could be altered by a
simple majority of caucus.

In August after the ousting of Turnbull, Kevin Rudd urged the Liberals to
follow Labor’s example “to prevent rolling political chaos.”

Howard said then “I don’t think changing the rules is a good idea”, adding “What’s the point of bringing in rules if, in any event, they can be set aside?”

Morrison said the Liberal rule on prime ministers was tougher because
it would take a two thirds majority to alter it. But it does not cover
opposition leaders.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.

View from The Hill: Craig Kelly triumphs in the ‘outwit, outplay, outlast’ game of Survivor


Michelle Grattan, University of Canberra

Rebel right wing Liberal Craig Kelly is a paradox – a man who
chronically lacks the numbers but possesses the power to force prime
ministers to protect him.

On Monday, fresh from a G20 where he was less than feted, Scott
Morrison heavied a few moderates on the NSW Liberal executive. A
wobbly cross-factional deal to preserve Kelly held together.

In the process former prime minister Malcolm Turnbull’s nose was
bloodied. Turnbull had tried to persuade the moderates to veto the
endorsement – which would have pushed Kelly to a preselection ballot he’d have lost.

Turnbull’s foray was counter-productive, for the party and himself.
Moderate backbencher Trent Zimmerman told the ABC that “Malcolm’s intervention made it hard for the executive to do anything other than what they did”.

Though once Morrison’s authority was on the line, the executive could do little but what he wanted.

It was very different from 2016 when Turnbull urged support for Kelly,
writing that he had “a fine reputation for standing up for his local constituents and was unafraid of taking on controversial issues”.

Back then, pressure from Turnbull led Kelly’s opponent Kent Johns to
agree not to stand for the preselection.

Johns kept up his branch numbers and prepared for another tilt. But
lightning struck twice.

In a tweet on Monday that seemed remarkable for its restraint Johns,
who is a NSW Liberal vice-president, said, “While disappointed, I
respect and accept the Party’s decision, and will continue to serve
the Party and proudly campaign for the re-election of the Coalition
Govt”.

Before the last election supporters of Kelly were quoted as warning “a
challenge against him would send the message the party is becoming a
version of the Labor Party.” Kelly’s backers never let up on referring
to Johns’ Labor background.

This year, the times suited Kelly. The right is strong within the
party. And with the Morrison government now dealing with a hung
parliament, the risk that a disendorsed Kelly could defect to the
crossbench, and run as an independent, loomed large.

Morrison asserted on Thursday that the possibility of Kelly going to
the crossbench had “never been the subject of our conversations.”

It didn’t have to be – the threat has hung in the air for months –
although Kelly has been all over the place in his comments.

For example in May the ABC reported Kelly was “understood to have told local members that he will resign from the Coalition and sit as an independent, if the ‘higher powers that be’ do not secure his
nomination’. But he’s now told Sky News he will remain a Liberal no matter what happens.”

Kelly is a favourite of the right wing commentariat.

In 2016 Alan Jones said: “Let me say to Kent Johns and anyone else who’s thinking of standing for the preselection out there and to put a torpedo under this bloke. You’d better pull your head in, Kent Johns. Because I’ll tell you what: if you put your head up, there’ll be a hell of a story that’ll be told about you, Mr Johns.”

On Sunday night Sky’s Paul Murray went through Turnbull’s tweets on the Kelly preselection, branding them “lies”.

Kelly has had a special place on Sky, with so many appearances his
colleagues joke he must have a sleeping bag there.

As chair of the Coalition’s backbench energy and environment
committee, a spruiker for coal, and close to Tony Abbott, Kelly ran a
constant and unhelpful commentary on the Turnbull government’s attempt
to get an energy policy together.

He helped kill the NEG (and thus Turnbull’s prime ministership) – he
was one of those threatening to cross the floor if the associated
legislation on emissions went ahead.

Turnbull is correct when he says that overriding a local preselection
contradicts the recent push by the right of the party for a more
democratic structure.

This point isn’t negated by the fact that the preselection panel Kelly
would have faced was a transition one – changes that have been made to
the system are not fully operating yet. It would have been a more
democratic preselection than the executive deciding to have no ballot
at all.

It is reasonable for some Liberal women, and others, to compare
the treatment of Kelly with that of Jane Prentice, a moderate from the
Queensland LNP.

When she lost a preselection in May, there was no special fix, despite
the fact she was an assistant minister. Prentice did not threaten to
go to the crossbench. She’s now quietly on the backbench serving out
her term.

There are multiple messages in the Kelly affair. They are about the
power of the right; the willingness to abandon process (the closeness
to an election is no excuse – the Kelly preselection should have been
held months ago), and the desperation of the Prime Minister.

Postscript: In the Senate on Monday Labor’s Glenn Sterle asked members
of the public observing proceedings, “How many people in the gallery
respect your politicians? Put your hand up if you do.” No hands went
up.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

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