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.

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



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The Coalition has narrowed the gap with Labor in the latest Newspoll, and Malcolm Turnbull has a 38-35 lead over Bill Shorten as better prime minister.
AAP/Mick Tsikas

Adrian Beaumont, University of Melbourne

This week’s Newspoll, conducted April 19-22 from a larger-than-normal sample of 2,070, gave Labor a 51-49 lead, a one-point gain for the Coalition since last fortnight. Primary votes were 38% Coalition (steady), 37% Labor (steady), 9% Greens (down one) and 7% One Nation (steady).

While this is Malcolm Turnbull’s 31st successive Newspoll loss as PM (one ahead of Tony Abbott), it is the Coalition’s best position in Newspoll since September 2016. In the last four weeks, the Coalition has gained two points after preferences.

The combined vote for Labor and the Greens was down a point to 46%, the lowest total left vote since July 2017. The left vote is now only one point ahead of the total vote for the Coalition and One Nation.

Since the November 2017 Queensland election, Newspoll has altered its preference flow assumptions for One Nation. Previously, it was assumed half of One Nation voters would preference the Coalition ahead of Labor, in line with the 2016 federal election. Newspoll appears to now be assuming over 60% of One Nation voters flow to the Coalition.

As shown by The Poll Bludger, even with the new assumptions for One Nation preferences, rounding probably helped the Coalition in this Newspoll.

36% were satisfied with Turnbull (up four), and 53% were dissatisfied (down four), for a net approval of -17, up eight points, Turnbull’s highest net approval since early February. Bill Shorten’s net approval was up five points to -20. Turnbull had a 38-35 lead over Shorten as better PM (38-36 last fortnight).

56% thought the current immigration target of 190,000 per year is too high, 28% thought it about right, and just 10% too low. By 57-28, voters thought South Africans should not be treated differently from other asylum seekers.

51% rated increasing health funding one of their top two priorities for the federal budget, followed by 41% for reducing debt and deficit, 30% for increasing infrastructure spending and 28% for both increasing school funding and cutting individual tax rates.

Turnbull and the Coalition have tended to do better when Parliament is not sitting. The Syrian airstrikes may also have boosted the Coalition, though to a lesser extent than the UK Conservatives, who advanced from a tie with Labour to being up by five points in a YouGov poll.

At this point, the Banking Royal Commission has not impacted on the Coalition. Voters do not appear to be blaming the Coalition for the banks’ behaviour. The Coalition could be damaged eventually by the argument that the banks’ behaviour is an example of unfettered capitalism, which it could be perceived as supporting.

After the first Newspoll of this year, I said wages growth was likely to determine the outcome of the next election. Labor and the unions have campaigned on persistently low wages growth. If wages growth improves before the next election, they will have a harder case to make.




Read more:
Turnbull and the Coalition begin the year on a positive polling note – but it’s still all about the economy


Essential: 53-47 to Labor

In contrast to Newspoll, Essential gave Labor a 53-47 lead, unchanged on last fortnight. Primary votes were 37% Coalition (down one), 36% Labor (down one), 11% Greens (up one) and 8% One Nation (up one). This poll was conducted April 19-22 (the same dates as Newspoll) from a sample of 1,026. I believe Essential is still using 2016 election preference flows.

51% said cost of living was one of their three top priorities for the federal government, with improving health care next on 36%. Business tax cuts were only rated a top priority by 6%, and income tax cuts by 15%.

54% thought Australia’s population growth rate is too fast, 31% about right, and just 4% thought it too slow. 64% (up 14 since October 2016) thought Australia’s immigration level over the last ten years is too high, 23% about right (down five) and just 5% too low (down seven).

Voters preferred fewer of all types of temporary visas, with most opposition to short-term working visas (47-12) and permanent refugees (46-19).

Although most sentiments on immigration were negative, voters agreed immigration had made a positive contribution to Australian society by 61-26. By 55-32 (55-33 three years ago), voters thought multiculturalism had enriched the social and economic lives of all Australians, rather than caused social division and dangerous extremism.

Victorian Newspoll: 51-49 to Labor

A Victorian Newspoll, conducted April 13-16 from a sample of 1,023, gave Labor a 51-49 lead, a one-point gain for the Coalition since a February to early March Newspoll. Primary votes were 41% Coalition (up two), 38% Labor (up one), 11% Greens (steady) and 5% One Nation (down one). The Victorian election will be held on November 24.

In late March, the Victorian Ombudsman found that Labor had misused $338,000 of taxpayers money on its 2014 election campaign. On Good Friday (March 30), the Liberals broke pairing conventions in the upper house to defeat Labor’s proposed changes to fire services.

Both leaders’ ratings slumped. 43% were satisfied with Premier Daniel Andrews (down three), and 47% were dissatisfied (up six). Opposition Leader Matthew Guy’s net approval fell 12 points to -13. Andrews had a 41-34 lead over Guy as better Premier (41-30 previously).

Newspoll repeated three questions that were asked in its February to March poll, all with worse results for Labor. Labor led the Liberals by 42-40 on energy supply (44-34 previously). On law and order, the Liberals led Labor by 46-37 (42-37). By 69-23, voters thought Labor should be doing more to reduce gang violence (65-25).




Read more:
Newspoll round-up: Labor leading in Victoria and tied in New South Wales; populists dominate in Italy


South Australian final upper house result

Upper house results for the March 17 South Australian election were finalised Monday. The Liberals won four of the 11 seats up for election, Labor four, SA-BEST two and the Greens one. The Liberals now have nine of the 22 total seats, Labor eight, the Greens two, SA-BEST two and Advance SA (formerly SA-BEST) one.

Labor had 3.46 quotas on primary votes, and the Conservatives 0.42 quotas. Labor’s fourth candidate defeated the Conservatives after preferences by over 6,500 votes, or 0.57 quotas to 0.49. Optional preferential above the line voting meant that more than a quota of votes exhausted.

Conservative upper house member Dennis Hood, who was elected as a Family First member in 2014, defected to the Liberals in late March. With no Conservative elected in 2018, the party has lost its parliamentary representation. Members elected in 2014 will face election in 2022.

On legislation opposed by Labor and the Greens, the Liberals will need support from both SA-BEST and Advance SA.


The Conversation


Read more:
Liberals win South Australian election as Xenophon crushed, while Labor stuns the Greens in Batman


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

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

Gallipoli commemorations of Turkish youth tell us much about politics in Turkey



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Turkish soldiers in a trench at Gallipoli. The way Turkish youth commemorate the battle tells us much about the country’s politics.
Ausstralian Dept of Veterans Affairs

Brad West, University of South Australia and Ayhan Aktar, Istanbul Bilgi University

With ongoing political instability and security concerns in Turkey, we are again likely to see a smaller turnout of Australians and New Zealanders for Anzac Day ceremonies at Gallipoli this year.

But thousands of Turkish youth will be on the battlefields at dawn. They will be re-enacting the march by the 57th Regiment to the highlands, where Ottoman troops halted the Anzac advance in 1915.




Read more:
How a more divided Turkey could change the way we think about Gallipoli


We undertook fieldwork last Anzac Day on this ritual as part of a proposed larger research project examining how the memory of Gallipoli has become central to tension between Turkish republicans and the ruling Justice and Development Party (AKP). The republicans want to protect and restore the secular pro-Western origins of the republic, while the AKP wants to integrate Islam into the nation’s civil institutions and national imagination.

Nowhere is this memory politics more significant than in this re-enactment ritual, which under AKP rule has been renamed the Loyalty March for the 57th Regiment.

While Islamic influence on remembrance rites at Gallipoli has been growing for more than a decade, its political significance has increased dramatically since the July 2016 attempted coup. This has proved to be a transformative event for Turkish politics and society.

The 57th Regiment re-enactment

In the last two decades, Turkish interest in the history of the Gallipoli campaign has grown significantly. It was here that the 57th Regiment came to prominence in Turkish collective memory as the military unit led by Lieutenant Colonel Mustafa Kemal, later Atatürk.

As founding father of modern Turkey and hero of the war of independence, Mustafa Kemal pushed the 57th Regiment to the highlands, preventing defeat in the campaign.

The origins of the re-enactment are closely tied to this mythology – it was originally known as the 57th Regiment March in the Track of Atatürk. Local university students first organised the commemoration in 2006, partly in response to the increasing number of Australian and New Zealand youth on the battlefields for Anzac Day. For the 90th anniversary the year before, the Anzac Day pilgrimage reached its zenith, with about 17,000 participants.




Read more:
Turkish view remains neglected in our understanding of Gallipoli


The structure adopted for the first 57th Regiment re-enactment largely remains today. It involves an eight-kilometre hike from the regiment’s original base at Bigali village to the highlands of the battlefield. The ritual grew rapidly, with 6,000 participants three years after the first march.

Unsurprisingly, given the march’s popularity, the AKP assumed some control of the re-enactment through the Ministry of Youth and Sports. The government began funding the cost of travel and living expenses for young participants. It also oversees official registration and program co-ordination to cap attendance.

Such oversight allowed for representation of youth from around the country, including a greater percentage of participants from AKP stronghold areas who would otherwise struggle to fund the travel. It is this “pious generation” that the AKP and its leader, Recep Erdoğan, have emphasised as central to AKP’s vision of a new Turkey.

Turkish youth march in a Gallipoli re-enactment.
Ayhan Aktar

Cultural contradictions

Historical re-enactment is about comprehending and experiencing the past as it relates to the ordinary citizen. This commemorative form has proved particularly significant for AKP memory politics by allowing a focus on the martyrdom of 57th Regiment, which suffered heavy casualties.

By providing competition to the traditional heroic saviour narrative of Atatürk at Gallipoli, the AKP has been able to counter the secular pro-Western principles around which he founded the republic. Mandatory prayer sessions have been added at the beginning and end of the march. This has been justified as simulating the actions of the ordinary men who constituted the unit.

This more egalitarian historical focus, which cultural scholars refer to as memory “from below”, gives religion a place in commemorations of Gallipoli. This can also be seen in the increased recognition of individual martyrs through a focus on firsthand accounts of the religious zeal of Turkish soldiers against an infidel invader of their homeland.




Read more:
Turkey, the Armenian genocide and the politics of memory


Changes to the memorial landscape on the battlefields have aided this way of telling history while also promoting religious observance at the site. Fallen Turkish soldiers remained in mass graves after the war, a reflection of the stigma of Ottoman history in republican Turkey.

But, since 2005, Turkish authorities have built 11 cemeteries for the fallen soldiers. These have become popular sites for prayer by the 1 million-plus Turkish visitors to the battlefields per year, in large part funded as social tourism by municipalities. Another 15 cemeteries are proposed, with plans for accompanying outdoor mosques.

The AKP has a vested interest in advancing re-enactment as a commemorative form at Gallipoli, as it provides an opportunity for increased religious references and contexts. To ensure the re-enactment remains popular, though, the AKP has retained much of its original carnival-like character. Participants still take “selfies” and engage in jokes, laughter and joyful conversations while walking.

Political opposition

The recreational character of the re-enactment means participants have a range of motivations for their involvement.

Political chants and song, for example, are often recited by small groups. Some of the most common are the songs of the AKP’s political opponents, the Nationalistic Movement Party.

Other participants engage in religious chants such as Allahu akbar (Allah is the greatest) and Tek yol İslam, tek yol şehadet (Only path is Islam, only path is martyrdom).

Arguably the populist nature of the re-enactment legitimises other tourist and unofficial remembrance forms at Gallipoli that work to cap the state’s control over historical interpretation.

The 57th Regiment re-enactment is becoming a popular pilgrimage activity throughout the year. The Republican People’s Party (CHP), for example, had a re-enactment as part of its four-day Justice Congress at Gallipoli in August 2017. The congress was held to highlight violations of the justice system by Erdoğan following the attempted coup.

Like the main April 25 re-enactment, the success and political outcomes of such ritual displays are highly contingent. In the case of the CHP congress, its ability to challenge the AKP’s symbolic alignment with Gallipoli was hampered by photos appearing on social media of congress members drinking alcohol on the battlefields. The images caused a public scandal. A CHP spokesperson admitted:

Such impertinent behavior is completely against the glorious memory of our Gallipoli martyrs.

The ConversationWhether Australians and New Zealanders will return to Gallipoli en masse for future Anzac Days, and how they will be received if they do, is uncertain. But ritual performances on the battlefields on April 25 are almost certain to remain politically significant in Turkey.

Brad West, Senior Lecturer in Sociology, School of Creative Industries, University of South Australia and Ayhan Aktar, Chair Professor, Istanbul Bilgi University

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

With health assuming its rightful place in planning, here are 3 key lessons from NSW



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Health objectives are at last being integrated into all levels of planning in New South Wales, from cities and towns to local places and buildings.
pisaphotography/Shutterstock

Patrick Harris, University of Sydney; Elizabeth Harris, UNSW; Emily Riley, University of Sydney; Jennifer Kent, University of Sydney, and Peter Sainsbury, South Western Sydney Local Health District

The way cities are designed and managed has big impacts on our health. While Australia is considered a world leader in research on health and cities, nationally our planning policies remain underdeveloped relative to our knowledge base. To remedy this, healthy planning advocates need to better understand how urban planning systems can be influenced.

Several recent, mostly positive, experiences in the New South Wales (NSW) planning system provide insights into this process. Each represents a milestone for land-use planning in this state given extensive reforms have been on and off the table for the past decade.




Read more:
The mysterious disappearance of health from New South Wales planning laws


The connections between city planning and health are many and varied. Key aspects include environmental sustainability, pollution risks and liveable places. Being liveable means having access to healthy food, nearby employment and services, and opportunities for active lifestyles.

These issues are increasingly important given projected population growth pressures on urban infrastructure. Other areas facing similar pressures, in Australia and overseas, might wish to take note of what has happened in NSW.

Since 2014 we have used political science to investigate attempts in NSW to include health in legislative reform, strategic city planning and major urban infrastructure assessments. As well as scrutinising relevant policies and associated documentation, we have interviewed more than 50 stakeholders. This has provided insights into how and why recent developments came about.

How has NSW brought health into planning?

Healthy planning has always had champions in NSW, but really hit its stride during a major legislative reform exercise that began in 2011. This came to a head in November 2017, when the state parliament passed amendments to the Environmental Planning and Assessment Act 1979.

This legislation now lists two objects of direct importance for health:

  • protection of the health and safety of occupants of buildings
  • promotion of good design and amenity of the built environment.

Also in 2017, the NSW Office of the Government Architect produced a policy of “design-led planning”. Known as “Better Placed”, this policy positions health as a top priority. It embeds health within design processes, methods and outcomes for different levels of planning from cities and towns to places and buildings.

In our view, Better Placed is an exemplary policy in demonstrating the importance of urban planning for health.

In another positive development, the Greater Sydney Commission recently released Metropolitan and District Plans that position health as a core objective (number 7). The plans consistently refer to health across the central themes of liveability, productivity and sustainability.

To their credit, the NSW government and the commission have developed plans concurrently with transport and infrastructure and released them together. The evidence suggests this integration should have public health benefits. The emphasis across the commission, transport and infrastructure plans on creating a liveable and accessible city increases our confidence in this outcome.




Read more:
A healthy approach: how to turn what we know about liveable cities into public policy


Three key factors in making health a priority

Our research suggests three crucial factors in elevating the status of health in planning.

1. A core group of non-government, government and academic representatives has led health advocacy for over a decade. The group’s messages and activities intentionally focused on collaboration across agencies in the public interest.

This advocacy has grown in sophistication since the early days of making submissions about “health” issues that risked being treated as peripheral to the main game of planning (infrastructure, for instance).

Within government, NSW Health (both state and local departments) has developed an increasingly effective response to urban planning opportunities for promoting and protecting health.

2. The previous minister for planning (Rob Stokes), the Office of the Government Architect and the Greater Sydney Commission have each provided vital policy mechanisms for including health. This illustrates the importance of particular agents in the right place at the right time.

The minister was essential in establishing the commission. This effectively created a respectful distance between strategic planning and the “economics trumps all” planning agenda seen in some policy environments.

The “design-led planning” emphasis came about when Stokes was planning minister. The starring role given to health in Better Placed gives healthy planning advocates, for the time being, unprecedented opportunity to influence strategies and plans.

3. Delivery now requires close attention, as these positive shifts alone have limited power. For instance, the commission’s plans emphasise collaborative infrastructure delivery to create an equitable city. Infrastructure has profound health impacts, costs and benefits.




Read more:
Transport access is good for new housing, but beware the pollution


Shifting infrastructure funding to benefit the city’s West will be the core fault line for delivering on promises of equitable infrastructure provision. However, infrastructure project funding and appraisal are crying out for reform. Better indicators, transparent analyses to inform options, improved governance arrangements and greater accountability have all been identified as required reforms.

The ConversationThe NSW planning system has begun to recognise the importance of urban planning for health. These developments present a tremendous opportunity to influence how healthy public policy can be delivered for the benefit of the whole city.

Patrick Harris, Senior Research Fellow, Menzies Centre for Health Policy, University of Sydney; Elizabeth Harris, Senior Research Fellow, UNSW; Emily Riley, Research Assistant, University of Sydney; Jennifer Kent, Research Fellow, University of Sydney, and Peter Sainsbury, Adjunct Associate Professor, South Western Sydney Local Health District

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

Australian governments don’t work with each other and it’s holding back regional economies in trouble


Andrew Beer, University of South Australia

Even though Australia has enjoyed 25 years of economic growth, many regional communities have either struggled to recover or never recovered from factory closures, declining commodity prices, or a drop in tourists.

My research, with colleagues from Europe and North America, shows Australian development agencies are reluctant, or do not know how, to reach out and work with other government bodies. They are also less inclined than those in Italy, Germany and Finland to build bridges between government departments or tiers of government. Instead, their solutions are constrained by their own resources.

And unlike in the United States, Australia does not have a well-funded economic development agency able to mobilise significant resources in a practised manner. In the United States, local developers often command multi-million-dollar budgets that come from dedicated sales and other taxes, giving them the capacity to bring about change.

Australia’s local development agencies are starved of funding and too often can offer only limited responses to very complex challenges.




Read more:
A housing affordability crisis in regional Australia? Yes, and here’s why


The Productivity Commission says leadership is key to forging a new economic future for these regional communities. But my research shows local leadership, including from business executives, state government and other government agencies, is relatively weak compared with the other countries.

The local leadership gap means Australian regional communities are less able to develop coherent strategies to deal with events like a major plant closure. Even good news, such as the arrival of a new firm, is not guaranteed an appropriate reaction.




Read more:
Here’s 49 small communities innovating as well as the big cities


Part of the challenge lies in the absence of clearly identifiable leaders with the authority to act. Compared with other countries in my study, it is harder to find who in Australia takes ownership of responding to regional economic shocks.

In Australia, mayors often play a role, but have few powers to bring about change. State policitians can be reluctant to associate with adverse news. Few politicians, for example, saw photo opportunities in the closure of Australian car makers.

In Italy, on the other hand, mayors are pivotal in responding to crises like the closure of a car factory. Our research found Italian mayors reach out to the civil sector in times of crisis – the church, non-governmental organisations, unions and even the media. This is done to influence public opinion, build confidence and mobilise private, public and community resources to ensure the well-being of the community.

Transition towns

The American city of Pittsburgh has transformed from a rapidly declining steel town in the 1970s to a prosperous city with an economy built on medical research and services.

Tampere in Finland shifted from being a 19th-century manufacturing base to producing software for Nokia in the 1990s. After 2010 it shifted again to information technology as Nokia itself transformed. The city has also become a hotbed of tech startups.

There are a few reasons these two communities successfully rejuvenated themselves while many Australian communities have spiralled downwards.

In the United States, local development practitioners are important local leaders because they mobilise the support of political leaders at the state and local level. They also provide the intellectual and financial capital needed to shape a new future.

In Finland, local leadership comes from a network of professionals working across departmental lines. In Tampere, for example, they helped to deploy the technical skills of workers. In other places they have moved workers into new technologies and promising new businesses.

Within a few years Chinchilla in Queensland cycled between a gas exploration and development boom, which pushed up prices, to an equally sharp bust as construction crews moved away, leaving excess housing.

Communities in northern Adelaide have been confronted by the need to map out a new future as the car industry closes. What that looks like and how many workers will be able to transition into the defence sector remains very uncertain.

These are not problems limited to a few isolated economies. The southeastern states struggled economically when the nation was in the grip of a mining boom. Communities in Western Australia joined them as real estate prices and labour force growth lagged in the absence of new mine development.




Read more:
Why big projects like the Adani coal mine won’t transform regional Queensland


There are significant leadership deficits within Australia’s regions, towns and communities. These contribute to our failure to promote the vibrancy and resilience of all parts of the nation.

The decision-makers in Australia – largely state and federal politicians – as well as the resources they command, are just too far away from regional centres. Their absence creates a significant gap at the local level.

But all this doesn’t mean that better solutions can’t be found for Australian communities experiencing economic change.

The ConversationWe can give more responsibility to local governments. We can empower communities through the sharing of information and knowledge. And we should give them the resources needed to bring about the changes they see as the bedrock of their future.

Andrew Beer, Dean, Research and Innovation, University of South Australia

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

Abbott suggests sacking bank regulators as ASIC feels the heat


Michelle Grattan, University of Canberra

Former prime minister Tony Abbott has strongly condemned the performance of financial sector regulators, suggesting they should be sacked and replaced by “less complacent” people.

With increasing attention on the apparently inadequate performance of the Australian Securities and Investments Commission (ASIC), Abbott raised the question of what the regulators had been doing as the scandals had gone on.

“We all know there are greedy people everywhere, including in the banks,” he told 2GB on Monday. “But banking is probably the most regulated sector of our economy. What were the regulators doing to allow all this to be happening?”

Abbott said his fear was “that at the end of this royal commission we will have yet another level of regulation imposed upon the banks when frankly what should happen is, I suspect, all the existing regulators should be sacked and people who are much more vigilant and much less complacent go in in their place.”

He said the analogy was, “yes, punish the criminals but if the police are turning a blind eye to the criminals, you’ve got to get rid of the police and get decent people in there”.

Meanwhile Malcolm Turnbull, speaking to reporters in Berlin, defended refusing for so long to set up a royal commission, although he said commentators were correct in saying that “politically we would have been better off setting one up earlier”.

Turnbull said that by taking the course it had the government “put consumers first”.

“The reason I didn’t proceed with a royal commission is this – I wanted to make sure that we took the steps to reform immediately and got on with the job.

“My concern was that a royal commission would go on for several years – that’s generally been the experience – and people would then say, ‘Oh you can’t reform, you can’t legislate, you’ve got to wait for the royal commissioner’s report.’

“So if we’d started a royal commission two years ago, maybe it would be finishing now and then we’d be considering the recommendations … With the benefit of hindsight and recognising you can’t live your life backwards, isn’t it better that we’ve got on with all of those reforms?”

Turnbull dismissed Bill Shorten’s call for the government to consider a compensation scheme for victims by saying this matter was already in the commission’s terms of reference.

Among the reforms it has made, the government highlights giving ASIC more power, resources and a new chair.

But Nationals backbencher senator John Williams, who has been at the forefront of calls for tougher action against wrongdoing in the financial sector, told the ABC that ASIC has got to be “quicker, they’ve got to be stronger, they’ve got to be seen as a feared regulator.

“That is not the situation at the moment,” he said.

He had sent a text message to Peter Kell, ASIC deputy chair, a couple of nights ago “and I said, mate, Australia is waiting for you to act”.

Asked how the culture within ASIC could be changed, Williams said, “I suppose you keep asking them questions at Senate estimates, keep the pressure on them, keep the message going on with the management of ASIC regularly.

“As I have said to the new boss [chair James Shipton], you’ve got to act quickly, you’ve got to be severe, you’ve got to be feared. If you’re not a feared regulator, people are going to continue to abuse the system, do the wrong thing without fear of the punishment”.

He welcomed the increased penalties announced by the government last week.

The chair of the Australian Competition and Consumer Commission (ACCC), Rod Sims, while declining to comment on ASIC, said he agreed with Williams “that you really do have to be feared. And frankly I’d like to think the ACCC is.

“I won’t comment on others but you want people to be really watching out – watch out for the ACCC, watch out that you don’t get caught because if they catch us it’s going to be really dire consequences. And I think we’ve got that mentality,” he told the ABC.

Updated at 4:30pm

The ConversationIn an interview on Sky late Monday, Finance Minister Mathias Cormann admitted, “With the benefit of hindsight, we should have gone earlier with this inquiry.” This was in stark contrast with his colleague, Minister for Financial Services, Kelly O’Dwyer, refusing to make the concession when she was repeatedly pressed in an interview on Sunday.

Michelle Grattan, Professorial Fellow, University of Canberra

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

View from The Hill: Shorten puts heat on government over bank victim compensation, as Coalition gets better poll news


Michelle Grattan, University of Canberra

Sometimes it’s not a bad idea to have a lie-in on Sunday morning. Financial Services Minister Kelly O’Dwyer might wish she’d done so at the weekend.

O’Dwyer should not have gone out – or been put out – on the ABC’s Insiders program with the lines she had on the banking royal commission. The interview was agony to watch, and counter-productive for the government, as she steadfastly refused to admit the Coalition had been wrong in not agreeing earlier to the inquiry, which has produced such devastating disclosures.

So often the government seems to take the public for fools. Scott Morrison’s attempts to turn everything to a discussion of Bill Shorten are ludicrous. O’Dwyer’s effort to avoid any confession of error just drew more attention to the bad call.

Remember O’Dwyer is well-versed in the financial services area. Look at her CV. She was a senior advisor to then-treasurer Peter Costello. Later she worked at the National Australia Bank. She has seen the banking system from inside as well as from her ministerial and advisory roles.

And yet, because of the government’s “admit nothing” strategy, she visibly struggled at every turn in Sunday’s interview.

Asked about her 2016 claim that “for the Labor party to propose a royal commission into banks is reckless and ill-conceived”, she could only fall back to the weak defence that “you can obsess and Labor can obsess about these issues. I’m actually obsessed about fixing the problems”. In other words, the government can be political when convenient but if brought to book, that’s just others “obsessing”.

Labor’s idea of a royal commission had been “a stunt”, she said, but then “there is no question we got it right in establishing the royal commission”. The difference is that the government did it soberly and deliberately, according to O’Dwyer. Grudgingly and belatedly would be a better description.

The alternative strategy would have been for the government to say, “Yes, in retrospect we did not move quickly enough. We were concerned about shaking confidence in the banking system. We did not appreciate how systemic the problems were. We thought we were doing enough but we weren’t”.

Everyone knows the government’s hand was forced in the end by rebel Nationals. Conceding it had been wrong would have been humiliating. But by doing so the government would have gone some way to clearing its own decks. That might have given it a fighting chance of being seen as part of the solution rather than having the attention so sharply focused on its abysmal failure.

Morrison in an interview in AFR Weekend also tried a convoluted avoidance game, as he sought to reconcile being surprised by the royal commission’s revelations with earlier arguing it wouldn’t find issues government didn’t know.

“When I say they were known to government, they were known to government agencies”, he told the newspaper.

“There is a difference between individual ministers being aware of particular things and the regulatory agencies being aware of them.”

Morrison likened his position to that of a police minister not knowing every criminal investigation underway. “I am not aware of every court case and every decision and every practice of every bank in the country any more than anyone else is – indeed than the executives in the banks and they run the things,” he said.

But the issue was not one of knowing “every practice of every bank”. It was a case of being aware of broad malfeasance – and there was plenty of evidence of that, through parliamentary inquiries and what was being said by victims, financial journalists and government backbenchers such as senator John Williams.

When politicians are unwilling to take responsibility, that just adds to the distrust and anger voters feel towards them. It’s a sign they are treating the people with disrespect, so is it any wonder they don’t get respect in return?

This bald-faced refusal to acknowledge their own inconvenient history in part comes from the politicians’ belief that if you just burnish the “spin”, you can get away with saying anything. The idea is that you brainstorm some “lines”, repeat them shamelessly, and hope they will be accepted – regardless of their disconnect from reality.

It might work for an occasional glitch when life generally is going well for a government and the public are in a good mood. These days, neither condition is present.

Meanwhile, as the government implausibly denies being out-manoeuvred over the commission, Shorten is pushing ahead again in the banking debate.

He has released a letter to Turnbull in which he says: “Given the shocking evidence that has been revealed so far, it is time the government gave serious consideration to a compensation scheme for the victims of proven wrongdoing. It’s unacceptable for people to suffer because of the misconduct of others, with no dependable access to justice.”

It will be a popular pitch out in the electorate, just as Labor’s call for a royal commission was.

POSTSCRIPT

The ConversationThe government has received some good news in Monday’s Newspoll in The Australian, with Labor now leading only by a narrow 51-49% in two-party terms. This compares with a 52-48% ALP lead in the poll a fortnight ago, when the Turnbull government passed the 30th consecutive loss landmark. The current poll is the Coalition’s best two-party preferred result since September 2016.

Michelle Grattan, Professorial Fellow, University of Canberra

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

Germany’s (not so) grand coalition may cause ripple effects on European refugee policy


Kelly Soderstrom, University of Melbourne and Philomena Murray, University of Melbourne

After a tumultuous 2017 election and six months of political uncertainty, Germany finally has a government. The so-called “grand coalition” made up of the centre-right Christian Democrats (CDU), its right-wing sister party, the Christian Social Union (CSU), and the centre-left Social Democrats (SPD), will govern Germany for the next four years.

At the centre of it all is the coalition agreement. The 179-page document sets out the goals for the government, including a new approach to Germany’s refugee policy.

The agreement explains “a new direction for Europe, a new dynamic for Germany, a new cohesion for our country”. It notes two changes in German leadership: a change in the power dynamics among the ruling parties, and a strong emphasis on using the European Union (EU) to achieve German political objectives.

With a weakened CDU under Chancellor Angela Merkel ceding considerable control to the anti-immigration CSU and the socialist SPD, the centre of German political power has shifted. This shift will have a profound impact on German and EU refugee policies.




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Angela Merkel wins a fourth term in office – but it won’t be an easy one


The issue of refugees is discussed deeply in German society. Since the height of the refugee crisis in 2016, when 722,370 people applied for asylum in Germany, the number of asylum applicants has decreased significantly.

However, 1.6 million refugees remain in Germany and Europe’s refugee crisis appears to be far from over. Not unexpectedly, this is a huge source of tension in the government.

At first, Merkel gained praise for her humanitarian, liberal refugee policy focused on refugee reception and integration. However, growing anti-immigrant sentiment, evident in the rise of groups like Patriotic Europeans Against the Islamisation of the West (PEGIDA), the electoral success of the far-right Alternative for Germany (AfD) and the difficulties in integrating a large number of refugees all resulted in increasingly protectionist sentiment.

Germany needs to provide a feasible refugee policy that is manageable and does not split the coalition.
Shutterstock

Merkel had pushed for refugee responsibility-sharing across the EU. However, no pan-EU approach drawing on the German example eventuated. Many EU member states refused to honour the major instrument for delegating responsibility for refugees, the Dublin Regulation, or participate in the EU-wide refugee redistribution scheme.

Given Merkel’s weakened position in the coalition, it is not clear that Germany will continue her humanitarian approach.

The government faces two leadership challenges in refugee policy. Firstly, it needs to provide Germany with a feasible refugee policy that is manageable and does not split the coalition. Secondly, it is attempting to lead a different type of coalition – namely, the EU’s 28 member states.




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Why Europe shouldn’t follow Australia’s lead on asylum seekers


Leadership in Germany: Can Merkel still say ‘wir schaffen das’?

In domestic refugee policy, Germany is fractured. Of the three coalition partners, the anti-immigration CSU is the primary winner in migration and refugee policy. CSU leader and Interior Minister Horst Seehofer is leading dramatic restrictions in refugee policy. Although the SPD negotiated a modest victory with 1,000 family reunification visas per month for refugees, government parties are refusing to do more than this.

Creating a cap on refugee visas was a major point of controversy between the CDU and CSU. The CSU prevailed, with the coalition agreement calling for an annual cap of 180,000-220,000 refugees. However, that cap may not take effect as only 198,317 first-time asylum applications were filed in Germany in 2017. Yet this threshold creates distraction from Merkel’s humanitarian approach as it prioritises immigration control over humanitarian obligation.

There is some good news for refugee integration in Germany.
Shutterstock

This, coupled with the limitations on movement of refugees imposed by centralised processing centres and repatriation centres for failed asylum seekers, demonstrates new constraints in refugee policy. This in turn demonstrates the CDU’s diminishing power and the fracturing of the centre of policy leadership.

Yet there is some good news for refugee integration. The grand coalition still maintains a focus on refugee integration, especially through language acquisition and participation in the labour market.

As Germany struggles with its fractured leadership and seeks consolidation and centralisation of refugee processing procedures, the German approach is becoming increasingly binary: if you are not a refugee, you must leave; if you are a refugee, you must integrate.




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Donald Trump’s ban will have lasting and damaging impacts on the world’s refugees


Leadership in Europe?

When it comes to the EU, the grand coalition government has four objectives: halt secondary movement of refugees; toughen the EU’s external borders; tackle external push factors; and create a robust mechanism for responsibility-sharing.

The Common European Asylum System aims for common application procedures for refugees and accommodation standards to prevent asylum-shopping across countries. The German government is also renewing calls for a quota-based refugee redistribution and resettlement scheme among EU states.

In calling for increased policing of the EU’s external borders and a common approach to push factors, these mechanisms paint refugee protection as a security issue rather than a humanitarian one.

During the Eurozone crisis, Germany showed strong leadership in EU policy. However, it has failed to persuade other member states to follow its leadership on refugees. Its leadership may further weaken as other states refuse to follow.

Will Germany step up to lead in Europe?

The EU is deeply divided on refugee policy and distracted by other concerns. The United Kingdom is consumed by Brexit negotiations, while many eastern and central European states refuse to participate in EU-level refugee resettlement schemes.

The anti-refugee populist parties have increased influence across Europe. Merkel has few natural allies, if any, in the grand coalition or within the EU on this issue.




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What Europe can teach Canada about protecting democracy


Yet Germany regards leadership of the EU as the key to achieving its interests. Merkel is emphatic that “Germany will only do well if Europe is doing well”.

However, Germany is falling in line with more restrictive policies, rather than leading the EU towards a more comprehensive and humanitarian solution to the refugee crisis.

The ConversationIf Germany leads EU policy change, we may well see increased blocking of access to the EU for refugees and policies that emphasise control and expediency over humanitarian values.

Kelly Soderstrom, PhD Candidate in International Relations, University of Melbourne and Philomena Murray, Professor, School of Social and Political Sciences and EU Centre on Shared Complex Challenges, University of Melbourne

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

The far-right’s creeping influence on Australian politics


Andrew Markus, Monash University

This article is the last of a five-part series on the battle for conservative hearts and minds in Australian politics. Read part one here, part two here, part three here and part four here.


Far-right political groupings are a constant feature on the fringes of Australian politics. In the 1950s and 1960s, they included the League of Rights and minuscule neo-Nazi parties. In the 1980s, there was National Action, the Australian Nationalist Movement, Australians Against Further Immigration and the Citizens Electoral Council.

In recent years, we have witnessed the emergence of a number of groups that combine online organisation with intimidating street activity: Reclaim Australia, Rise Up Australia, the Australian Defence League, the United Patriots Front, True Blue Crew and Antipodean Resistance.

While hostility between – and within – far-right groups is typical, they are united by their nationalism, racism, opposition to “alien” immigration and disdain for democracy.

Most far-right activists continue to be excluded from polite society. But the endorsement of their ideas by some mainstream political figures has allowed them to make creeping gains into the political culture.

Paranoid style

A feature of far-right movements was characterised in the 1960s by the American political scientist Richard Hofstadter as the “paranoid style”:

a style of mind that … evokes [a] sense of heated exaggeration, suspiciousness, and conspiratorial fantasy.

A common belief concerns conspiracies that are hidden by the media, which disseminates what today is termed “fake news” or “alternative facts”, previously known as propaganda and misinformation.

The conspirators have been identified in various guises, with the common element being the promotion of international and cosmopolitan, as distinct from national, values. They include Freemasons, Catholics (or “Papists”), Jews, Muslims, Communists, Socialists and Fabians.

International organisations such as the United Nations are especially suspect – seen as agents of a “New World Order”. Climate scientists and environmentalists, with their proliferation of international treaties, have become major targets in recent years.

Eric Butler, the driving force of the League of Rights for half a century, strove to unmask what he saw as the “New International Economic Order”, orchestrated by Jews, manifested in the Indigenous land rights movement, the destruction of family farms and small businesses, and the policies of “multi-racialism and multi-culturalism”.

In the 1980s and 1990s, far-right groups focused on their discovery of the “The Grand Plan – Asianisation of Australia”. The 1997 book The Truth, issued in Pauline Hanson’s name by a group of her followers, revealed “the internationalist elite of The New World Order” that was plotting the destruction of Anglo-Saxon Australia through “immigrationism, multiculturalism, Asianisation and Aboriginalism”.

In contemporary Australia, far-right movements focus on Islam. It is seen as an authoritarian force that supposedly seeks world domination through the infiltration of Muslim populations into the West, the establishment of a separate legal system (Sharia Law) enforced through mosques, and the subjugation of non-Muslims through acts of terror.

Hostility to immigration

The distinctive mindset that characterises supporters of minor political parties of the right is evident in public opinion surveys, but findings on members of fringe political groupings are less reliable because their numbers in national surveys are very small.

Nevertheless, we can confidently conclude that a high proportion of people attracted to the far-right have a heightened negative view of their life circumstances, a stronger sense that the area in which they live – and their country – is on a downward path, and negative views of immigration and ethnic diversity.

The 2017 Scanlon Foundation national survey, which I led and analysed, disaggregated attitudes by political alignment. In response to the open-ended question “What do you think is the most important problem facing Australia today?”, immigration (viewed negatively) was the most important issue for One Nation supporters. By contrast, it ranked fifth for Coalition voters, sixth for Labor, and was not ranked at all by Greens voters.

When asked for their view of the level of immigration, 86% of One Nation supporters indicated that the intake was too high, compared with just of 37% of the national sample.

Heightened concern over immigration links to nationalist values. Asked to respond to the proposition that “people who come to Australia should change their behaviour to be more like Australians”, 78% of One Nation voters strongly agreed, compared with 37% of Coalition voters, 30% of Labor and 4% of Greens. An overwhelming 92% of One Nation voters strongly agree that “in the modern world, maintaining the Australian way of life is important.”

Expanding reach

While there is consistency over time in far-right values, in one respect there has been change. Where once these previously fringe political groupings struggled to reach large audiences, they have now improved their messaging and, most importantly, harnessed the power of the internet and social media to grow their networks.

This is illustrated by the “Stop the Mosque” campaign in the Victorian regional centre of Bendigo, which reached a level of activism and civil disobedience that won national and international attention. Opponents of the mosque established a Facebook page in January 2014; within six months, it had amassed more than 8000 followers.

Links were forged with like-minded groups across Australia, the United States and Europe, who provided encouragement, campaign advice, donations and access to resources. Protest activities were maintained for over two years and spread to other areas.

The emphasis on the perceived threat of Islam has been a crystallising issue for the far-right in recent years, helping it to grab headlines and recruit followers. Pauline Hanson and the Liberal National Party’s George Christensen spoke at anti-Islamic Reclaim Australia rallies in 2015.

The politics of the paranoid style remains in vogue among the far-right, which limits its possibilities for growth. But today, as Collette Snowden has observed, its reach is greatly enhanced:

with the dedication and commitment of a few passionate supporters, small and more marginalised groups are able to create a public presence that previously would have required years.

The ConversationThe influence of the far-right should not be overstated, but it is a danger sign when mainstream politicians associate themselves with its hateful agenda.

Andrew Markus, Pratt Foundation Research Chair of Jewish Civilisation, Monash University

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