Rising reliance on personal income tax signals need for bolder reforms


Phil Lewis, University of Canberra

The Parliamentary Budget Office (PBO) has just released a report on trends in Commonwealth taxation receipts. While supporting the expectations of a budget in balance by 2019-20, it exposes worrying trends in the balance of the burden of taxes in Australia. In particular, its analysis of trends in the composition of tax revenue identifies an increasing reliance on personal income tax.

The PBO shows that tax revenue from labour (mostly income tax) was 8.6% of GDP in 1971-72. By 2015/16, this had risen to 12.6% of GDP. Over the same period, tax collections from capital (mostly company tax) as a percentage of GDP was virtually unchanged, from 3.3% to 3.2% – although this increased noticeably during the “economic boom”, which ended when the Global Financial Crisis (GFC) hit in 2007.

Taxes on consumption (such a GST and excise duties) were 5.3% of GDP in 1971-72 and 5.7% of GDP in 2015-16. While the introduction of the GST in July 2001 raised consumption taxes temporarily, revenue from both GST and particularly excise taxes has been in decline as a percent of GDP since.

Figure 2 from the report shows these trends over the decades.

Trends in revenue from categories of Commonwealth taxes.
Source: ATO data and PBO analysis

The main emphasis of the PBO report is on the period since 2001-02. The chart below shows the increased reliance on income tax and declining importance of taxes on consumption and capital.

What is driving these shifts?

The main reason for the rise in income tax revenue is “bracket creep” as incomes increase and taxpayers move into higher marginal tax brackets. This is due to successive governments not fully indexing tax brackets to increases in CPI or average earnings.

Meanwhile, consumers have been changing their tastes and responding to prices by altering their consumption patterns. The so-called “sin taxes”, or rates of excise duties on alcohol and tobacco, have increased significantly over time.

This has been particularly true for tobacco where the volume of consumption has fallen as fewer people smoke and those who do smoke less. However, the percentage fall in consumption has been less than the percentage rise in tax, so tobacco tax revenue has risen.

For alcohol, consumers have been switching from more highly taxed beer to wine, which is more lightly taxed. For instance, a full-strength beer from your bottle shop carries a tax of $37.10 per litre of alcohol. A moderately priced bottle of wine bears a tax less than half that ($17.60 per litre).

What might be considered a distortion in the taxing of alcohol means that changes in tastes towards drinking wine reduce tax revenue. The system of taxing alcohol is distorting in that encourages changing consumption habits away from beer drinking to wine.

Fuel excise is levied on a number of fuels but revenue comes mainly from petrol sales. The indexing of fuel excise rates was abolished in 2001 before being reintroduced in 2014. This reduction in the real excise rates was accompanied by significant reduction in the volume of fuel per household, from 11.4 L/km in 2001 to 10.6 L/km in 2016, as vehicles became more fuel-efficient.

The combination of reduced real excise rates and reduced consumption have reduced fuel excise revenue as a percentage of GDP.

The GST, one of the principal aims of which was to provide a broadly based growth tax, is declining in relative importance. This is mainly due to the exemptions from the GST base. For instance, spending on education and health, which are exempt from GST, is growing faster than spending on other goods and services. There is also some loss in revenue due to online purchases from overseas, which the government is trying to address.

As the share of consumers’ spending continues to switch from GST-liable to GST-exempt items the share of GST revenue will continue to fall.

Company taxes have diminished in importance in Australia and elsewhere because of the way multinational companies can arrange their tax liabilities across national borders to minimise tax. However, there is also worldwide recognition of the need to reduce company tax rates because of the detrimental effects these have on investment and growth.

The need to cut ‘deadweight loss’

When discussing taxes economist often refer to “deadweight loss”, which is the loss to the economy over and above the amount recouped in tax revenue. When revenue is taken from individuals or companies this results in less of a service or good being produced.

It is argued that governments should put more reliance on taxes that cause less distortion – less deadweight loss. That is, they should have as little effect on individuals’ and firms’ behaviour as possible.

A broad-based GST is efficient because all goods and services bear the same tax rate and therefore will not change relative consumption. It is exemptions that bring about inefficiency by encouraging consumption of untaxed items and discouraging consumption of taxed items. Taxing wine more lightly than beer encourages wine consumption at the expense of beer.

The Australian Treasury has named company tax and income tax as having the “biggest deadweight loss” of all the Commonwealth taxes. International research backs this up. The deadweight loss falls on consumers and shareholders but mostly on workers and wages through lower investment.

The Treasury estimates the deadweight loss of company tax could be more than half the revenue raised from taxation. For income taxes, the deadweight loss is estimated to be 21 cents for every dollar of revenue. This comes about from reduced incentives to work, save or invest.

The ConversationThe PBO report suggests that with continuing trends in taxation revenue the budget’s reliance on personal income tax will increase if current levels of Commonwealth taxation are maintained as a percentage of GDP. While proposals to reduce company tax rates will reduce inefficiency of taxes somewhat, a heavy and increasing reliance on personal income tax points to the need for substantial tax reform. But that’s something neither major party seems prepared to do.

Phil Lewis, Professor of Economics, University of Canberra

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

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My Health Record: Deleting personal information from databases is harder than it sounds



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Federal Health Minister Greg Hunt has announced that the My Health Record system will be modified to allow the permanent deletion of records.
Shutterstock

Robert Merkel, Monash University

Since the period for opting out of My Health Record began on July 16, experts in health, privacy and IT have raised concerns about the security and privacy protections of the system, and the legislation governing its operation.

Now federal health minister Greg Hunt has announced two key changes to the system.

First, the legislation will be amended to explicitly require a court order for any documents to be released to a law enforcement agency. Second, the system will be modified to allow the permanent deletion of records:

In addition, the Government will also amend Labor’s 2012 legislation to ensure if someone wishes to cancel their record they will be able to do so permanently, with their record deleted from the system.

But while this sounds like a simple change, permanently and completely deleting information from IT systems is anything but straightforward.




Read more:
My Health Record: the case for opting out


Systems designed for retention, not deletion

The My Health Record database is designed for the long-term retention of important information. Most IT systems designed for this purpose are underpinned by the assumption that the risk of losing information – through a hardware fault, programming mistake, or operator error – should be extremely low.

The exact details of how My Health Record data is protected from data loss are not public. But there are several common measures that systems like it incorporate to greatly reduce the risks.

At a most basic level, “deletion” of a record stored in a database is often implemented simply by marking a record as deleted. That’s akin to deleting something on paper by drawing a thin line through it.

The software can be programmed to ignore any such deleted records, but the underlying record is still present in the database – and can be retrieved by an administrator with unfettered permissions to access the database directly.

This approach means that if an operator error or software bug results in an incorrect deletion, repairing the damage is straightforward.




Read more:
My Health Record: the case for opting in


Furthermore, even if data is actually deleted from the active database, it can still be present in backup “snapshots” that contain the complete database contents at some particular moment in time.

Some of these backups will be retained – untouched and unaltered – for extended periods, and will only be accessible to a small group of IT administrators.

Zombie records

Permanent and absolute deletion of a record in such a system will therefore be a challenge.

If a user requests deletion, removing their record from the active database will be relatively straightforward (although even this has some complications), but removing them from the backups is not.

If the backups are left unaltered, we might wonder in what circumstances the information in those backups would be made accessible.

If, by contrast, the archival backups are actively and irrevocably modified to permit deletion, those archival backups are at high risk of other modifications that remove or modify wanted data. This would defeat the purpose of having trusted archival backups.

Backups and the GDPR’s ‘right to be forgotten’

The problem of deleting personal information and archival backups has been raised in the context of the European Union’s General Data Protection Regulation (GDPR). This new EU-wide law greatly strengthens privacy protections surrounding use of personal information in member states.

The “right to erasure” or “right to be forgotten” – Article 17 of the GDPR – states that organisations storing the personal information of EU citizens “shall have the obligation to erase personal data without undue delay” in certain circumstances.

How this obligation will be met in the context of standard data backup practices is an interesting question, to say the least. While the legal aspects of this question are beyond my expertise, from a technical perspective, there is no easy general-purpose solution for the prompt deletion of individual records from archived data.

In an essay posted to their corporate website, data backup company Acronis proposes that companies should be transparent about what will happen to the backups of customers who request that records be deleted:

[while] primary instances of their data in production systems will be erased with all due speed … their personal data may reside in backup archives that must be retained for a longer period of time – either because it is impractical to isolate individual personal data within the archive, or because the controller is required to retain data longer for contractual, legal or compliance reasons.

Who might access those backups?

Data stored on archival backups, competently administered, will not be available to health professionals. Nor will they be available to run-of-the-mill hackers who might steal a practitioner’s credentials to gain illicit access to My Health Record.

But it’s not at all clear whether law enforcement bodies, or anyone else, could potentially access a deleted record if they are granted access to archival backups by the system operator.

Under amended legislation, such access would undoubtedly require a court order. Nevertheless, were it to be permitted, access to a deleted record under these circumstances would be contrary to the general expectation that when a record is deleted, it is promptly, completely and irrevocably deleted, with no prospect of retrieval.




Read more:
Opting out of My Health Records? Here’s what you get with the status quo


Time required to work through the details

In my view, more information on the deletion process, and any legislative provisions surrounding deleted records, needs to be made public. This will allow individuals to make an informed choice on whether they are comfortable with the amended security and privacy provisions.

Getting this right will take time and extensive expert and public consultation. It is very difficult to imagine how this could take place within the opt-out period, even taking into account the one-month extension just announced by the minister.

The ConversationGiven that, it would be prudent to pause the roll-out of My Health Record for a considerably longer period. This would permit the government to properly address the issues of record deletion, as well as the numerous other privacy and security concerns raised about the system.

Robert Merkel, Lecturer in Software Engineering, Monash University

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

From ‘Toby Tosspot’ to ‘Mr Harbourside Mansion’, personal insults are an Australian tradition


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The insults have becoming increasingly personal, but they don’t always work.
AAP/Lukas Coch

Frank Bongiorno, Australian National University

The insults have been flying thick and fast. Malcolm Turnbull is “Mr Harbourside Mansion”, “Top Hat” Malcolm, “the slick merchant banker”, “the top end of town” man. It is a measure of the unhappiness in the Coalition that not all of these epithets were invented by Labor.

Meanwhile, Bill Shorten is, according to Turnbull, a “sycophant”, a “groveller”, a “man who abandoned workers” while he “tucked his knees under” the table of billionaires like the late businessman Richard Pratt.

The red faces, raised voices and flying spittle that accompany the parliamentary trade in insults are meant to convey passion and spontaneity. But we can be confident the lines have been sorted well in advance.

Turnbull’s insults, for example, made in parliament just recently, largely repeat things he said in February last year when he called Shorten “a social-climbing sycophant” and “would-be tribune of the people”. On the other side, Labor has been seeking to present Turnbull as an out-of-touch Sydney snob from the day he took office.

Do such insults work? We know from the research of Australian political scientists – such as my colleagues here at the Australian National University who produce the Australian Election Study – that elections have become increasingly personalised. Most voters do not comb through policy documents. Rather, they use the party leader as a means of making judgments about the things that matter to them.




Read more:
An evening with the treasurer: how governments belt out budget hits and hope someone is listening


So, the Labor Party hopes that, if it can make enough mud stick to Turnbull, it can present him as unqualified to make decisions about the welfare of ordinary people. Being so rich, they suggest, he is out of touch with their concerns.

The Coalition hopes that if it can make its mud stick, Shorten will be seen as a self-serving opportunist who built a union and political career by taking advantage of the workers he was supposed to represent.

There is nothing new here; the appeal on each side is a traditional one.

Labor cartoonists of a previous era would often draw Mr Fat – an obese capitalist – complete with top hat, tails and cigar, the very embodiment of greed and excess. They would sometimes set him beside a brawny, manly worker determined to resist his wiles.

Phil May, ‘Poverty and Wealth; It all depends on the position of the bundle’, Bulletin, c. 1887.
State Library of New South Wales via Monash University Publishing

The anti-Labor images of the union boss as a parasite on the working man, and of the Labor politician as self-serving careerist, have existed as long as the Labor Party itself.

Political name-calling and insults are sometimes like water off a duck’s back. But others can stick. The radical Daniel Deniehy’s lampooning of William Wentworth and his followers in 1854 for wanting to create “a bunyip aristocracy” of titled men to fill a colonial upper house was recalled for generations. (Personally, I’ve always thought the funniest jibe was Deniehy’s suggestion that James Macarthur’s coat of arms as “Earl of Camden” should include a rum keg, a reference to his father’s role in the commerce and politics of early New South Wales.)

Paul Keating’s question about an Andrew Peacock leadership comeback – “Can a soufflé rise twice?” – was perfect in every way, as was his designation of Liberal leader John Hewson, “the feral abacus”.

But Keating’s quips went down better with the press gallery and the intelligentsia than the ordinary punter, and he had to endure insinuations that an enthusiast for Italian suits and French clocks could not be a true Labor man.

Bob Hawke, more than Shorten, acquired a large coterie of “close personal friends” among the rich and the filthy rich. But this was probably an advantage in his early days as prime minister, when he talked of consensus between workers and bosses in the national interest. As the feeling developed that his friends were doing very nicely while most others were doing it tough, the term “rich Labor mates” became shorthand for the idea that Hawke and Keating had sold out the workers.

Hawke was “the silver bodgie”, a reference to the colour of his still luxuriant hair, somewhat like that of a 1950s “bodgie”, a stylish youth somewhat in the James Dean mould.

But some of our political leaders have had nicknames that were more distinctly pejorative. The Sydney Bulletin called Australia’s first prime minister, Edmund Barton, “Toby Tosspot”: he had been known as “Toby” much of his life and a “tosspot” was a vulgar term for an enthusiastic drinker.

“Affable Alfred”, for Deakin, was affectionate but could be used by opponents sarcastically when he wasn’t being quite so affable. “Jolly John”, for John Gorton, sounds affectionate, until you recall that it was a reference to his erratic personal behaviour.

“Honest John” – for Howard – was mainly used ironically rather than descriptively. But Howard’s own claim that Kim Beazley lacked “ticker” is usually seen as having worked on voters looking for strong leadership and doubtful the Labor opposition leader could provide it.




Read more:
Mis-red: why Bill Shorten is not a socialist


Robert Menzies’ critics on the left called him “Pig Iron Bob” after his role, as a member of the Lyons government, in opposing union bans on the shipping of pig iron to Japan. The epithet, which stuck throughout his long career, was intended to remind people of Menzies’ poor judgment and association with the policy of appeasement of the Axis powers. It was a potent rhetorical weapon during the 1940s and even became the subject of radical folksong but, as the years of his prime ministership rolled on after the war, it seemed to do him no obvious harm.

Highly personal assaults can backfire badly. The best example from Australian politics is Country Party leader Earle Page’s savage attack on Menzies in 1939 for failing to enlist in the first world war. Menzies had wanted to serve but already had brothers at the front, so remained behind as the result of a family decision.

The ConversationPage’s career never recovered from the disgust that his attack induced. That didn’t stop the mischievous Labor firebrand, Eddie Ward, from later joking that Menzies’ brilliant military career had been cut short by the war. It’s a tough place, the federal parliament.

Frank Bongiorno, Professor of History, ANU College of Arts and Social Sciences, Australian National University

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

Barnaby Joyce takes personal leave after horror day


Michelle Grattan, University of Canberra

Former deputy prime minister Barnaby Joyce has abruptly gone on personal leave until the end of June, after a horror day in which he shifted the onus to partner Vikki Campion for the widely-criticised sale of their TV interview.

Facing a mounting public backlash from colleagues, Joyce blamed media intrusion and said Campion had felt “screwed over” by it.

A clip of the interview, for which Channel 7 reportedly paid $150,000, was shown on Tuesday night, with a emotional Campion saying “I couldn’t help it. You can’t help who you fall in love with.”

The full interview, which features the couple and their new baby Sebastian, will be aired on Sunday. They say the money will be put in a trust fund for Sebastian.

Joyce looked visibly under strain during the day and sources said he was not in a good head space.

He sought leave from the Nationals whip, Michelle Landry, and he has been granted a parliamentary pair by Labor – which means the numbers in the House of Representatives will not be affected.

He will miss the June sittings, not returning to parliament until it resumes in August, after the winter recess. Government sources said his actual leave from work was until the end of June.

He immediately drove from Canberra on Tuesday evening.

Joyce said that he would not charge for an interview if it was just with him as a politician.

But “they wanted an interview obviously to get Vikki’s side of the story and like most mothers she said, ‘seeing as I am being screwed over and there are drones and everything over my house in the last fortnight, paparazzi waiting for me, if everybody else is making money then [I am] going to make money out of it’,” he told the Australian.

He said they had “tried just burning this out and that didn’t work,” and argued privacy protections were inadequate.

“If we had a proper tort of privacy we would never have had to do this.”

Senior Coalition figures, picking up the public reaction, have come out in open criticism of the deal. Prime Minister Turnbull, speaking on Tasmanian radio station LAFM, said the paid interview was “not a course of action that I would’ve encouraged him to take”. Turnbull said he would leave the matter for a “private discussion” with Joyce. But in the event, the two did not talk on Tuesday.

Revenue Minister Kelly O’Dwyer told the ABC “most Australians are pretty disgusted” by Joyce’s action.

Nationals leader Michael McCormack said “I wouldn’t do it”, telling Fairfax Media: “At the end of the day all politicians are judged by the court of public opinion and that is what people think of them at the ballot box on election day.”

The ConversationMcCormack had particular reason to be angry at Joyce – the controversy took attention from the recruitment of crossbench senator Steve Martin to the Nationals, which was announced on Monday.

Michelle Grattan, Professorial Fellow, University of Canberra

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

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


Saul Eslake, University of Tasmania

In this series – Budget policy checks – we look at the government’s justifications for policies likely to be in this year’s budget and measure them up against the evidence.

In this piece we look at the need for personal income tax cuts.


A large proportion of any cut in personal income tax – especially if the cuts were skewed towards lower and middle-income households with a higher propensity to spend – would likely provide a greater direct stimulus to the Australian economy than an equivalent cut in company tax.

Cutting personal income taxes seems likely to provide much more of a boost to the Australian economy than cutting company income tax. As the government’s own published modelling shows, the benefits of its proposed cuts to the company income tax rate are small relative to their cost.

Do we need income tax cuts to provide relief from financial hardship?

The treasurer and I have been working on how we can provide more tax relief for hard-working middle income Australian families.

– Prime Minister Malcolm Turnbull

Over the last five years, household spending has grown by just 2.6% per annum in real terms, on average – of which more than half has been the result of population growth – compared with an average of 3.6% per annum over the preceding 12 years. Even with that lower growth rate in their spending, households have reduced their saving rate, from around 7% of disposable income five years ago to around 2.5% in 2017. That’s the lowest saving rate since before the financial crisis.

The key reason for this “squeeze” on household spending and saving is of course the ongoing weakness in the growth rate of household disposable income. Over the past five years, real per capita household disposable income has grown at an average annual rate of just 0.4%, compared with an average of 2.6% per annum over the preceding 12 years.

One reason for this is that Australian households have been paying an increasing proportion of their income in taxes. In the years prior to the onset of the financial crisis, almost every budget included personal income tax cuts in some form or other.

By contrast, there have been no changes to Australia’s personal income tax scale since 2008 – apart from the increase in the tax-free threshold (paid for by an increase in the bottom rate) in 2012, the temporary surcharge on top-rate taxpayers which applied between 2014-15 and 2016-17, and the increase in the threshold for the second-top rate (from A$80,000 to A$87,000) which took effect in the 2016-17 financial year.

As a result, in 2017, Australian households in aggregate paid 19.5% of their taxable incomes in income and other direct taxes – the highest proportion since 2005, and continuing a steady rise since 2011.

Households are also spending almost two and a quarter percentage points more of their after-tax disposable incomes on education, health, insurance and other financial services, and utilities than they did five years ago.

Given all this, it’s little wonder that household spending in more “discretionary” areas has been so weak in recent years.

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Well-targeted personal income tax cuts could thus help to ameliorate this multi-faceted “squeeze” on household incomes, and provide a direct boost to the economy.

Do we need income tax cuts to make up for the fact that we haven’t had a pay rise in a while?

It’s been a long time since any Australians had a decent pay rise…this is a real pressure on Australians…we can give them some relief when it comes to their personal income tax.

– Treasurer Scott Morrison

The other major reason for the very slow growth in real household disposable income over the past few years has been the unprecedented slowdown in wages growth. Wages have risen at an average annual rate of just 2.2% over the past five years (only 0.3 of a percentage point above the inflation rate), down from 3.7% per annum over the preceding 12 years.

Although, as RBA Governor Phillip Lowe noted in a speech that “the latest data suggest that the rate of wages growth has now troughed”, he went on to warn that the pickup which the RBA expects “is likely to be only gradual”.

Recent experience in other advanced economies clearly suggests that the unemployment rate needs to be lower for longer than in previous business cycles before wages growth starts to pick up. So even assuming that Governor Lowe is right, it may be one or two years before Australian households can expect any meaningful improvement in their financial position from faster growth in their wages or salaries.

Well targeted personal income tax cuts could help provide at least some offset to this likely continuing stagnation in wages growth over the next year or so.

What’s the verdict?

Targeted personal income tax cuts could reduce the squeeze on households and make up for persistent low wages.

Of course, it remains crucial that any cuts in personal income tax be sustainable – that is, that they are not funded by bigger deficits, and do not materially detract from the task of putting the nation’s public finances on a sounder footing. This is so we are better placed to withstand any unforeseen economic shocks.

And it’s important to remember that government spending has moved to what appears to be a permanently higher level as a proportion of GDP since the financial crisis. The government’s underlying cash payments averaged 25% of GDP from 2011-12 through 2017-18, up from 24% from 2001-02 through 2007-08. That also represents a constraint on the scope for tax cuts.

However, the apparently greater improvement in the budget so far this financial year, compared with what was forecast as recently as last December’s Mid-Year Economic and Fiscal Outlook, could give the government a little more latitude for financially sustainable personal income tax cuts in the upcoming budget.

The ConversationPerhaps the most sustainable way of providing the “relief” which the treasurer says many Australian households need, would be to abandon the tax cut for companies turning over more than A$50 million a year. The government hasn’t been able to get these through the Senate. These cuts would do far less to boost the Australian economy than well-targeted personal income tax cuts of a similar order of magnitude.

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

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

The US, Russia and China: a twisted tale of personal ego, profound mistrust and foolish nationalism



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In Russia and China, Donald Trump now faces two centres of power that are no longer willing or feel the need to comply with America’s interests and priorities.
Reuters/Carlos Barria

Joseph Camilleri, La Trobe University

Alarm bells are ringing a mere three months into Donald Trump’s presidency. The two global flashpoints, Syria and North Korea, are worrying enough. The Conversation

More troubling still are America’s relations with Russia and China. These are now mired in angst, uncertainty and mutual suspicion. They underlie the failure to create a viable system of crisis prevention and crisis management.

Global power shift

Trump’s first 100 days as president have dramatically demonstrated this failure. For all the rhetoric about “making America great again”, Trump is rapidly discovering that the US has limited capacity to impose its will on the rest of world.

The trend is visible everywhere – in international trade and finance, diplomacy, and numerous conflicts around the world.

In Russia and China, the US now faces two centres of power that are no longer willing to comply with America’s interests and priorities.

Under Vladimir Putin, Russia has been busy reasserting its influence after years of humiliation following the break-up of the Soviet Union.

Starting from a low base, China has sustained over the last three decades the most remarkable rate of economic growth in modern history. Now it is seeking to exert the political influence commensurate with its new economic status.

America’s relative political decline goes back to its military defeat in Vietnam. Temporarily obscured by the end of the Cold War, it became fully apparent during the Bush and Obama years. But Trump is the first president to have run on a platform openly stating that the US is in decline and promising to reverse the trend.

Militarism not isolationism

In his inauguration speech, studded by more references to “America” than any inauguration speech in US history, Trump vowed:

We will make America strong again. We will make America proud again. We will make America safe again. And we will make America great again.

The nationalist card – the one unifying plank of his otherwise chaotic discourse before and since his election – is meant to strike a chord with the many disenchanted Americans hankering for a “golden age” that has long since passed. Trump now faces the immense challenge of delivering on this pledge despite intractable problems at home and abroad.

On the international stage, he has chosen to rely on showing off America’s unmatched military might. This position is supported by some of the most powerful voices in the US military and political establishment.

Soon after taking office, Trump gave the military expanded authority in the conduct of operations against Islamic State in Syria, Iraq and elsewhere. In support of the Saudi bombing campaign against Houthi forces in Yemen, the US carried out 70 airstrikes in March alone. This is more than twice the number for all of 2016.

In the first two weeks of April, the Trump administration:

Yet the utility of military power is diminishing. As one centre of power declines and another rises, new faultlines and tensions emerge, and with them new uncertainties. This helps explain why the US finds it so difficult to set a clear policy direction for relations with Russia and China.

The Russia conundrum

In the case of Russia, Trump’s task has been greatly complicated by the findings of the US intelligence community that the Russian government interfered in the 2016 US election.

Hoping to deflect attention from his campaign’s links with Russia, Trump has allowed relations with Russia to continue on their downward slide. Perhaps it was never his intention to reset the US-Russia relationship.

In any case, he is under considerable pressure from his most senior security advisers to act tough with Russia. Almost certainly, he failed to appreciate that his actions and statements on Syria would provoke Putin’s fury.

The end result is clear. In Trump’s words, US relations with Russia have reached “an all-time low”. Not surprisingly, he has now reversed his previous position on NATO, and announced the alliance is “no longer obsolete”.

Russia, for its part, remains unbending in its support of the Assad government in Syria. It has mercilessly denounced the illegality of the US missile attack, and used its veto power to block a UN Security Council resolution condemning Syrian President Bashar al-Assad for his use of chemical weapons.

And now Russia has forced the US to accept a significant watering down of the UN Security Council resolution condemning North Korea’s latest missile launch.

Russia has been busy reasserting its global influence under the leadership of Vladimir Putin (left).
Reuters/Danish Siddiqui

China’s rise

During his election campaign, Trump repeatedly lambasted China for its currency manipulation and threatened to apply tough restrictions on Chinese exports. Before and immediately after his election he flaunted America’s commitment to Taiwan’s security, and challenged China’s military build-up in the South China Sea.

Yet the tone has since changed markedly. Chinese President Xi Jinping’s visit to the US became an occasion to discuss differences on trade and agree to a 100-day plan for reducing the current US trade deficit with China.

At least in public, Xi stuck to his script about the virtues of bilateral co-operation. Trump presented the talks as forming the basis for “an outstanding relationship”.

The North Korea crisis has exposed the limits of US power. Neither increased US economic sanctions nor the threat of military action are likely to force the North Korean regime into submission.

The US needs China’s help to have any chance of reining in North Korea’s nuclear ambitions. China’s response has been to increase pressure on North Korea while issuing a stern warning to both parties.

And so, the relationship remains at best unpredictable. As much as China and the US need each other, the hawks in the Trump administration – and there are many – will not easily abandon their plans to contain China, challenge its claims to sovereignty in the South China Sea, and maintain the US military’s pre-eminence in the region.

However, none of this will halt China’s rise.

What does the future hold?

The months ahead are less than promising. The use and threat of force will do nothing to resolve any of the longstanding conflicts in the Middle East or east Asia.

The projection of military muscle and modernisation of nuclear arsenals are far more likely to produce greater local and regional instability, and heighten the risk of miscalculation from any of the three major centres of power.

Trump and Putin lead countries that hold some 14,000 nuclear weapons, or close to 95% of global stockpiles. These arsenals cast a shadow over US-Russian security, which seems likely to darken with the advent of new technologies and rising levels of mistrust and suspicion.

Pursuing “America First” or “Russia First” policies in conditions of such mutual vulnerability is an exercise in futility.

A more profitable course for these three centres of power is to recognise each other’s legitimate interests, expand the opportunities for economic and diplomatic co-operation, and develop a co-ordinated approach in the management of actual and potential flashpoints.

To bear fruit, such efforts need to have solid foundations – in particular decisive steps to eliminate nuclear weapons, enhance the effectiveness of international law, and strengthen the UN’s capacity for conflict management and peace-building.


Professor Camilleri will explore these issues in depth at a keynote lecture to be delivered at St Michael’s on Collins, Melbourne, on May 9 and 16.

Joseph Camilleri, Emeritus Professor of International Relations, La Trobe University

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

Australia: NSW – Bushfire Story (One Person’s Story)


The link below is to an article that reports on one person’s experience in the devastating bushfires currently impacting on homes and lives in NSW, Australia.

For more visit:
http://www.biblesociety.org.au/news/im-christian-house-just-burned

Iran: Persecution News Update


The link below is to an article reporting on persecution news from Iran, where prison guards have raided cells of Christians and stolen personal items.

For more visit:
Guards Raid Cells of Christians in Evin Prison

Australia: Gillard Survives While Labor Dies


The ALP has completed its quest for personal destruction by sticking with Julia Gillard and Kevin Rudd ruling himself out as leading the ALP ever again. It is a sad day for the ALP, except for the fact that the ALP doesn’t realise it is. In my view they have ensured they will be in opposition following the federal election, completely ignoring the views of those they are asking to vote for them. I anticipate that the ALP will now suffer an enormous hiding unless ALP supporters can somehow see past the disregard that the party has shown to them and votes for a Prime Minister they don’t want.

The link below is to an article covering the latest dramas unfolding in Canberra throughout the day:

For more visit:
http://www.theaustralian.com.au/national-affairs/in-depth/martin-ferguson-joins-labor-exodus-following-failed-leadership-coup/story-fnhqeu0x-1226603503254

USA: Barack Obama No Christian


The following article reports on the personal religion of Barack Obama. What is clear from the interview is that the answers given to questions that were asked of President Obama, is that Barack Obama is not a Christian as far as the Bible definition of a Christian goes. He may be regarded as a ‘Christian’ in some sort of typical western religious manner, but as far as true Christianity goes, he is not.

http://www.christiantelegraph.com/issue15679.html