The government was defeated on the ‘medevac’ bill, but that does not mean the end of the government



File 20190212 174851 1azgk58.jpg?ixlib=rb 1.1
Cross-benchers Kerryn Phelps, Julia Banks and Rebekah Sharkie celebrate the passing of the Medevac bill.
AAP/Lukas Coch

Anne Twomey, University of Sydney

The Morrison government has been defeated in the House of Representatives by the passage of a government bill containing amendments made against its wishes that allow for the medical evacuation of asylum-seekers from Manus Island and Nauru.

At the last minute, the Speaker tabled, against the wishes of the government, advice from the Solicitor-General raising a constitutional problem with the Senate amendments. In short, those amendments provided for an “independent health advice panel”, of which six members would have to be paid. Their remuneration would come automatically under an existing appropriation in the Remuneration Tribunal Act 1973 for the payment of persons who hold public offices. The effect of the amendments in the bill would therefore have increased the amount payable under that existing appropriation.

This is important, because section 53 of the Constitution says that the “Senate may not amend any proposed law so as to increase any proposed charge or burden on the people”. The argument was that even though the Senate amendments to the bill did not contain an appropriation, they would increase a burden on the people by increasing the amount automatically appropriated under the Remuneration Tribunal Act.




Read more:
Explainer: what is a hung parliament and how would it affect the passage of legislation?


Whether this is enough to trigger section 53 is a matter of dispute between the houses. Understandably, the House of Representatives has long considered that Senate amendments of that kind do breach section 53, while the Senate takes a different view.

The issue cannot be decided by a court, because the courts have held that section 53 is an internal matter for the houses, and not one to be determined judicially. This was made clear in the recent case on the same-sex marriage postal survey. So even if the houses chose to ignore section 53 and pass a bill that breached its terms, and the validity of the law was challenged, a court would not find it to be invalid.

The consequence was that this was a battlefield for the two houses. In the absence of any judicial precedents, all we have to guide us is parliamentary practice and the competing views of parliamentary committees. These do not provide clear answers. While the houses are under a moral and political obligation to obey the Constitution, this is difficult when the Constitution itself is unclear and its interpretation is disputed.

The government’s action in seeking to declare the bill to be a money bill also raised the political stakes. In order to govern, a government must retain control over government finance. Defeat on a money bill in the House of Representatives is regarded as a loss of confidence, which by convention requires the government to resign or seek an election. For example, the Fadden Government resigned in 1941 when its budget was reduced by the nominal sum of £1. So if the bill was treated as a money bill by the government, its passage against the wishes of the government would have raised a serious issue of whether it could continue governing.

However, the Labor Party moved an amendment to remove any right to payment of officers of the panel. This should mean that it is not a money bill, with the consequence that the constitutional issues about s53 should go away (although there would still be a precedent of the House of Representatives dealing with the Senate amendments, rather than rejecting their validity outright).

The bill still has to pass the Senate. If it does so, it will then be presented to the governor-general for royal assent. I have previously discussed why it would not be wise for the government to advise the governor-general to refuse royal assent. Assuming that royal assent is given, then the medevac amendments will take effect the day after the bill receives royal assent.




Read more:
Why a government would be mad to advise the refusal of royal assent to a bill passed against its will


Can the Morrison government continue to govern after its defeat on this bill? Yes. As the bill is no longer a money bill and is not one that the government has declared to be a matter of confidence, the government can continue to govern.

If the House of Representatives has truly lost confidence in the government, it can always move a vote of no confidence to make this clear. Unless that happens, the Morrison government can continue governing until the election is held.The Conversation

Anne Twomey, Professor of Constitutional Law, University of Sydney

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

Advertisements

View from the Hill: Shorten’s victory will bring dangerous counter strikes from a desperate government


Michelle Grattan, University of Canberra

An extraordinary amount of hype and some confected hysteria preceded Tuesday’s vote on the medical transfer legislation.

The government threw everything at trying to avoid a defeat. In a last stand, it fell back on a constitutional argument – backed by
Solicitor-General advice – that carried no practical weight and was simply circumvented by the majority that passed the bill in the House of Representatives.




Read more:
Crossbenchers must decide between something or nothing on medical transfers bill


While the government frantically attempted to thwart Labor and the crossbench, Scott Morrison also ran the line that he wasn’t that fussed. Afterwards he told a news conference: “Votes will come and votes will go, they do not trouble me.” That claim wouldn’t pass a fact check.

This was a big vote, and everyone knew it. Morrison operates a
minority government and Tuesday’s loss underscored that he can’t
automatically get his way. (Ironically, in the last days of Turnbull’s majority government, the threat of losing a House vote came from internal dissidents.)




Read more:
The government was defeated on the ‘medevac’ bill, but that does not mean the end of the government


The next test for Morrison will be on whether the House agrees to
extra sitting days to discuss the measures from the banking royal
commission. For procedural reasons, this needs 76 votes, one more than the 75 required on the medical transfer bill. The government has been leaning heavily on Bob Katter, the crossbencher who will be the key.

While the government looked rattled as the votes on the medical
transfer bill proceeded, Labor was calm and steely.

For all the talk about Labor’s misjudgement on the issue, this week it has moved cautiously and methodically.

Originally pushed by the crossbench into taking a stand on
humanitarian grounds – the bill is based on a proposal from
independent Kerryn Phelps – Labor has sought to display compassion but contain the political risk.

Bill Shorten, knowing the danger, decided the version of the bill
coming from the Senate (which Labor had supported there) left the ALP too exposed. He flagged last week he’d like a “middle” course.

So the opposition came up with amendments to give the minister wider discretion and more time in making decisions, and to limit the application of the legislation to those on Nauru and Manus now. The latter change was to minimise the “pull” factor – the extent to which the new arrangement would encourage the people smugglers.

Then it was a matter of persuading the required six crossbenchers.
They accepted in the negotiations that a modified bill was better than nothing (though there was some Greens cavilling).

In the House, the ALP troops were kept carefully in check; the emotion was turned down; the speeches from the bill’s supporters were few and brief. Labor just wanted one thing in the chamber – a win. This wasn’t the time to grandstand.

The government, wounded and worried, is seeing this as one (albeit
major) battle in the long war to the election. Its spruikers will say that in defeat it has had a victory – that Labor has given the
Coalition ammunition for the campaign.

It’s true the bill has breathed new life into the border security
debate, but whether this will be enough to do Labor serious harm is an open question. `

The ALP is always vulnerable on boats. On the other hand, boats are lower in voters’ minds than they used to be.

The government will turn up the dial by announcing “contingency plans” against fresh arrivals. Morrison, having accused Shorten of
undermining offshore processing, is already moving on to the claim that he couldn’t be trusted to be strong on turnbacks.

Goodness knows how the politics would play out if a boat appeared on the horizon in the next few weeks. You can be sure, however, that the government would be quick to tell us about it, and point the finger at Shorten.

In all this, the bill itself (which has to go back to the Senate for a tick off on the amendments) should be kept in perspective.

The minister has a veto on “security” grounds, including being able to exclude anyone who has committed a major crime. The composition of the medical panel which would have the final say on other transfers is broad and balanced.

Probably, over a period, there would be a lot of transfers out of the 1000 people offshore. But there have already been nearly 900 (some after legal action). These transfers have amounted to a backdoor route into Australia.

If the legislation in the longer term opens that door a little wider, it will also be a way of “settling” people in Australia without acknowledging that is being done.

More of the same? Or a radical change? It depends how you look at it.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

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

We don’t know how many asylum seekers are turned away at Australian airports


Asher Hirsch, Monash University; Daniel Ghezelbash, Macquarie University, and Regina Jefferies, UNSW

The immigration department doesn’t keep a record of how many people apply for asylum at Australian airports, and how many are turned away. Documents released under Freedom of Information show a lack of accountability and oversight by Australian immigration officials with regard to people who request asylum at airports.

This means the ultimate decision to admit or deny an asylum seeker entry into Australia rests with the Border Force official who interviews them. Without oversight, an asylum seeker could be turned away and sent back to a country where they may be at harm, after being interviewed behind closed doors and without access to lawyers.

Last week, ABC’s Four Corners reported that two Saudi women were turned back at Sydney Airport after letting customs officers know they intended to apply for asylum. This has led to concerns Australian Border Force officers may be deliberately targeting and blocking Saudi Arabian women, who they suspect may apply for asylum, from entering the country.

Until 2014, a person could apply for a permanent protection visa before being cleared at customs, also known as immigration clearance. However, amendments passed in 2014 mean those stopped before being cleared can only apply for a three-year temporary protection visa or a five-year safe haven visa.

Had the two women not disclosed their intention to seek asylum at the airport, they would generally have been cleared at customs and allowed to enter Australia. They would be able to apply for a permanent protection visa after leaving the airport.

But by making an asylum claim at the airport, they were subsequently detained and then deported from Australia without a chance to apply for protection, or access to lawyers, in violation of Migration Act.

The ABC report suggested at least 80 Saudi women have sought asylum in Australia in recent years, many of them fleeing Saudi Arabia’s male guardianship laws, which allow their husbands, fathers, brothers, uncles and sons to control their lives.




Read more:
Are women escaping family violence overseas considered refugees?


A response from the Department of Home Affairs to a Freedom of Information request for the number of individuals who have made protection claims before, or at, immigration clearance at airports since 2008, said:

the location of the applicant in Australia at the time of lodgement … is not relevant to the assessment of the applicant’s asylum claims, and therefore is not recorded in the Department’s database. As such, the Department does not hold existing documents as falling in the scope of the request.

But this can’t be correct given the disparity between the safeguards available before and after an asylum seeker clears customs.

Asylum seekers who have passed through customs can appeal their application for protection if it is rejected in the first instance.
from shutterstock.com

Australia has non-refoulement obligations under the 1951 Refugee Convention, various human rights treaties and customary international law. These prohibit the return of asylum seekers to places where they would face certain types of persecution or harm.

This extends to returning asylum seekers to transit countries where they may fear harm, or be at risk of being returned to their home country where they fear harm.

As part of the non-refoulement obligation, Australia must fairly and efficiently assess the claims of any person who applies for asylum under its territory or jurisdiction. Australia may not remove, or refuse admission at the border to, an asylum-seeker while considering that individual’s claim.

The demarcation of immigration clearance zones, or international zones has no consequence to Australia’s obligations under international law.

The Department of Home Affairs sets out the procedures to follow when an asylum claim is made at immigration clearance. The policies – which cannot be accessed publicly, but we have provided screenshots here – require that “if the person raises protection related claims, the interviewing officer should interview the person for a second time and explore the protection claims”.




Read more:
Explainer: how Australia decides who is a genuine refugee


If the person “makes a prima facie protection claim that is not considered to be ‘far-fetched and fanciful’, they are considered to be a person who potentially engages Australia’s non‑refoulement obligations” and must be permitted to enter Australia.

We do not know whether the department followed its own policies in the case of the two Saudi women. The interviews took place behind closed doors, and the minister has not made a comment on the cases. Even if the policy was followed, it still leaves much discretion to the interviewing officer.

There are no clear standards that must be followed when determining whether a claim meets the threshold of not being “far-fetched and fanciful”. The words are not found in the Migration Act, or the Migration Regulations, which govern migration determinations.

If Australia returned these women without a proper consideration of their asylum claims, it will be in breach of its international obligations. The failure to keep or share these statistics compounds the lack of accountability.The Conversation

Asher Hirsch, PhD Candidate, Monash University; Daniel Ghezelbash, Senior Lecturer, Macquarie Law School, Macquarie University, and Regina Jefferies, Scientia PhD Scholar, UNSW

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

Morrison may reopen the Christmas Island detention centre


Michelle Grattan, University of Canberra

Scott Morrison has foreshadowed the re-opening of the Christmas Island detention facility, announcing his government would be stepping up border security after the medical transfer bill passed the Senate on Wednesday.

The legislation was carried 36-34, with the support of Labor, Greens, Centre Alliance, Tim Storer, and Derryn Hinch – who delayed revealing his position until after he was briefed on security issues.

Morrison told a news conference cabinet’s national security committee had met early Wednesday to discuss the contingency planning already in train in anticipation of the bill’s passage.

“A range of strengthenings” had been put in place in the border operations.

He hinted at an advertising campaign in Indonesia and elsewhere.

“I’ll be engaging in direct messaging as part of Operation Sovereign Borders with people smugglers and with those who might be thinking of getting on boats,” he said.

“I’m going to be engaged in very clear and direct messaging to anyone who thinks they should get on a boat, I’m here. And I will stop you.”

He would be sending the very clear message “that my government is in control of the borders. As long as my government is here you can expect strong border protection and resolve to be in place.

“Under a Labor government you can expect them to see fold like a pack of cards, like Bill Shorten did yesterday”.

Morrison stressed all the government’s actions and decisions were
implementing the recommendations of the security agencies and
officials presented to the cabinet committee on Wednesday morning.

Declining to go into detail about the measures he said: “This
parliament has already tipped its hand enough to the people
smugglers”.

He said the government had approved “putting in place the reopening of the Christmas Island detention facilities, both to deal with the prospect of arrivals as well as dealing with the prospect of transfers”.

The government at the weekend released a costing of reopening
Christmas Island at more than $1 billion over several years.

People transferred from Nauru and Manus for medical care can be kept in detention or released into the community.

Labor Senate leader Penny Wong told the Senate the government was telling lies about the bill.

“They are doing it because they are desperate. They are desperate.
They are led by a desperate prime minister, who is leading a bitterly divided government. He is clearly only concerned about one thing: clinging on to his job, she said.

“Rather than running these lies, why don’t you just call an election?”

Hinch said he had been swayed by the amendment specifying the
legislation would apply only to the present cohort on Manus and Nauru.

“It is not an encouragement, I believe, to people smugglers who are despicable and should be despised, because it will only apply to people who are there.”The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

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

Explainer: how will the ‘medevac’ bill actually affect ill asylum seekers?


Nicholas Procter, University of South Australia and Mary Anne Kenny, Murdoch University

Both the House of Representatives and the Senate have now passed amendments to the Migration Act 1958 that allow for the medical evacuation of asylum-seekers from Manus Island and Nauru. These amendments are also known as the medevac bill.

So, how will the situation for asylum seekers and refugees on Manus Island and Nauru change with the provisions in place?




Read more:
The government was defeated on the ‘medevac’ bill, but that does not mean the end of the government


What’s in the Bill?

The medevac bill allows for the transfer of asylum seekers or refugees on Nauru or Manus Island to Australia for “medical or psychiatric assessment or treatment”. Family members will also be transferred if recommended.

It gives a clear pathway for medical specialists to make medical decisions. Two doctors must assess – either in person or remotely – the person and make the recommendation for transfer. The criteria used in the initial assessment and in any review is that the person:

  • needs medical or psychiatric assessment or treatment
  • is not receiving appropriate medical or psychiatric assessment or treatment in Nauru or Manus Island, and
  • must be transferred for appropriate medical or psychiatric assessment or treatment.

The recommendation is given to the Minister for Home Affairs who must either approve or refuse the transfer within 72 hours. The minister can refuse the transfer if the person has an adverse security assessment or if the person has a “substantial criminal record”.

The minister may also refuse the recommendation on the basis he does not accept the transfer is necessary on medical grounds. In those cases an expert medical panel – known as the Independent Health Advice Panel (IHAP) – would be formed to reassess the recommended transfer.




Read more:
Morrison government defeated on medical bill, despite constitution play


If the panel recommends the person’s transfer should be approved, the minister must transfer the person unless satisfied there are security or character grounds for refusing the transfer.

The panel will consist of at least eight members, including the Chief Medical Officer for the government, the Department of Home Affair’s Chief Medical Officer and the Surgeon-General of the Australian Border Force. Other members would be appointed by the minister based on nominations by various professional medical bodies.

Medical transfers to Australia are for a temporary period only, so those currently in Australia could still be returned to Nauru or Manus Island following their treatment. This will continue to be the case even now this bill is passed.

These procedures are only applicable to asylum seekers and refugees who are on Nauru and Manus Island currently. The law will not apply to anyone who comes after the passage of this bill. Anyone brought to Australia for medical treatment must be kept in onshore immigration detention.

Three examples

Medical transfers that have occurred to date are mostly for psychiatric reasons or a combination of psychiatric and other medical reasons. The importance of provided, rapid medical assessment and response to critically ill, or at-risk-of-dying, refugees and asylum seekers cannot be overstated.

Under the provisions of the medevac bill, asylum seekers with medical or psychiatric conditions can be transferred to Australia.
from shutterstock.com

In August, 2014 a 24-year-old Iranian detainee on Manus Island, Hamid Khazaei, fell ill and presented to clinicians at the detention centre with “flu-like symptoms” and a small lesion on his leg. After a course of antibiotics, his condition deteriorated and he was transferred to a hospital in Papua New Guinea. He died a few days later.

A coronial inquest identified ambiguous and deficient policies for emergency evacuation, finding Mr Khazaei’s death was preventable. If his clinical deterioration was recognised and responded to in a timely manner, and he was evacuated to Australia within 24 hours of developing severe sepsis, Khazaei could have survived.

Medical evacuations are time sensitive because of the nature of the emergency and the logistics of the transfer itself. Were the provisions of the medevac bill in place at the time, independent expert overview of clinical decisions could have saved Khazaei’s life.

Another case was that of a refugee woman on Nauru who attempted suicide. An order was made for her to be urgently transferred to Australia. This was based on reports from a psychiatrist and a surgeon who expressed concerns that, without urgent surgical intervention, she could develop peritonitis (a life-threatening inflammation resulting from her suicide attempt) and die.

This case was heard by the Federal Court within four days of her attempt. Evidence demonstrated she needed complicated surgical intervention and psychiatric care that appeared not to be available on Nauru. Medical evacuation to Australia was requested as soon as possible, and the woman was brought to Australia.




Read more:
Self-immolation incidents on Nauru are acts of ‘hopeful despair’


With the medevac provisions in place, the woman could have been brought to Australia earlier for an independent assessment of her physical and mental health prior to her situation deteriorating to a point where emergency management was required. The costs and delays involved in seeking intervention of the courts to order medical evacuations would also have been reduced with the provisions in place.

Another recent case involved a 46-year-old refugee on Manus Island who had lost vision in his right eye after a traumatic injury during a riot on the island. Vision in his left eye was also deteriorating and there was a lack of appropriate treatment in PNG. His mental health had also deteriorated to a point where he was assessed as being at high risk of suicide.

The evidence was that Manus Island did not have adequate facilities to treat his physical deterioration and suicidality. The court ordered his transfer to Australia as soon as possible for assessment and treatment.

Again, this man could have been brought to Australia earlier for an independent assessment, prior to emergency life saving treatment being required. The bill’s provisions will now allow for this. This translates to continuity and consistency of care and reduced deadlocks over treatment decisions.

Medical care can’t be political

Aside from being a circuit breaker to current arrangements, the bill is a new opportunity to establish agreed governance arrangements and a clinical pathway for recognising and responding to medical need without political interference. In the past bureaucrats and politicians have invalidated medical evidence and clinical decision making processes.

To provide safe and high quality care to refugees and asylum seekers based on medically assessed need, independent medical experts must be provided with all available relevant information about the patient. Giving the best medical and health advice must be free from delay and political interference.The Conversation

Nicholas Procter, Professor and Chair: Mental Health Nursing, University of South Australia and Mary Anne Kenny, Associate Professor, School of Law, Murdoch University

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

Morrison government defeated on medical bill, despite constitution play


Michelle Grattan, University of Canberra

The government has suffered a historic defeat in the House of Representatives, with Labor and crossbenchers passing the legislation facilitating medical transfers from Manus and Nauru by 75-74.

This came after a dramatic last-minute government ploy to try to head off the bill by declaring it was unconstitutional and so should not be considered by the House.

But Labor and the crossbench pressed on, with six of the seven crossbenchers backing the ALP amendment to the bill that had come from the Senate.

They were Kerryn Phelps, on whose proposal the legislation is based, Andrew Wilkie, Cathy McGowan, Rebekha Sharkie, Julia Banks and the Greens Adam Bandt. The other crossbencher Bob Katter voted with the government.

The last times governments were defeated on major substantive votes were the Fadden government in 1941 (on a budget vote) and the Bruce government on legislation in 1929.

Before the bill was considered Speaker Tony Smith tabled correspondence from Attorney-General Christian Porter saying the bill, passed by the Senate last year, contravened the constitution’s Section 53.

This provides that the Senate “may not amend any proposed law so as to increase any proposed charge or burden on the people”.

The Solicitor-General, Stephen Donaghue, said in an opinion that the bill breached Section 53 because the medical panel it would set up would be paid.

But the opinion also said it was “ultimately for the House of Representatives to decide whether it considers the Senate amendments to be consistent” with Section 53, and the matter was not justiciable.

In his letter to Smith, Porter asked the Speaker to keep the Solicitor-General’s opinion confidential but Smith said the House should have it and tabled it with Porter’s letter.

The vote culminated a day of drama as Labor negotiated its amendments to the bill as passed by the Senate with its support.




Read more:
Why a government would be mad to advise the refusal of royal assent to a bill passed against its will


These widen the grounds on which a minister could refuse a transfer to cover those with a substantial criminal record, allow the minister up to 72 hours (instead of 24) for making a decision on transfers, and confine the application of the legislation to the present cohort of refugees and asylum seekers.

Labor moved to circumvent the Section 53 issue by adding a further amendment providing that members of the medical panel not be paid.

Leader of the House Christopher Pyne declared Labor and the crossbenchers “don’t care about the Australian constitution”.
“The English fought a civil war over this matter,” he said.

Bill Shorten said: “This bill and our amendments are about Australia’s character.
It’s about how we treat sick people in our care.”




Read more:
View from the Hill: Shorten’s victory will bring dangerous counter strikes from a desperate government


Scott Morrison said Labor was “failing the test of mettle … failing the test of duty to the Australian people. This is now on your head, Leader of the Opposition.”

The final vote came after the government lost procedural votes by the same margin.

The bill has to go back to the Senate to approve the amendments passed in the House.

Morrison told a Tuesday night news conference that the vote had not been unexpected and the government had already been working on contingency plans.

He would have “more announcements to make about the actions and decisions the government will be taking to address now the risk and the threat that Labor and Bill Shorten have created”.

He indicated the government would not frustrate the bill getting royal assent once it passed the Senate. Home Affairs Minister Peter Dutton told the ABC the government would abide by the law.

Morrison dismissed any suggestion that the defeat amounted to a no confidence motion in the government, referring back to what Phelps had said. Phelps has consistently emphasised the bill should not be viewed as a confidence matter.

The Prime Minister also played down the historic nature of the defeat, pointing to the Labor government losing a vote on superannuation in 2013.

The government will use the Labor success to ramp up its attack on the opposition. In the run up to the vote Morrison has turned up the rhetoric, accusing Labor of undermining offshore processing.

At his press conference Morrison said that Shorten would also be weak on turning back boats. Shorten “can’t be trusted to do that either,” he said.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

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

Vital Signs. If needed, this man can and will cut rates during the election campaign


Richard Holden, UNSW

It was a great story.

Philip Lowe had taken over as Reserve Bank governor after 25 years of uninterrupted economic growth. The Australian economy was transitioning nicely away from the country’s biggest-ever mining boom. Interest rates had been cut to historic lows in the wake of the 2008 financial crisis and had bottomed out. Inflation and wages growth were about to pick up. Unemployment was falling. And the new governor would preside over a return to “new normal”, with gradual rate rises up to a cash rate of 3.5-4.0%.

Then a funny thing happened on the way to the fairytale ending.

In a remarkable speech at the National Press Club on Wednesday, Lowe essentially admitted that the bank might well need to take extra remedial action to get the economy moving again.

Gone was the mantra that “the next movement in interest rate will likely be up”. Rather, Lowe said:

…here are scenarios where the next move in the cash rate is up, and other scenarios where it is down. Over the past year, the next-move-is-up scenarios were more likely than the next-move-is-down scenarios. Today, the probabilities appear to be more evenly balanced.

Translation: “I don’t want to freak you out, but we’re probably going to have to cut rates. And do it sooner rather than later.”

Consider the two main things driving the Reserve Bank’s decision.

Inflation is stubbornly low. As I pointed out last week, the bank has long had an inflation target of 2-3%, but it keeps undershooting it, and not just missing the centre, but missing the lower bound. In two and a half years with Lowe as governor, inflation has averaged just 1.87% – and has never been inside the target band. The latest figure is 1.8%.



Related to that, wages growth is anaemic. For five years it has barely kept up with inflation.

This is broadly true in advanced economies around the world (although our wages are doing worse than those in the United States) and suggests the unemployment rate will need to be pushed down further than in the past in order to reignite wages pressure and hence inflation. That suggests we’ll need even lower interest rates than we’ve got in order to provide what the boffins call monetary stimulus.



And the Reserve Bank’s cash rate — the rate that most other rates are set in reference to — is already the lowest on record, at just 1.5%.

Meanwhile, the housing market has taken a big hit, which isn’t over. Nationwide, the market is down 6.1% from its October 2017 peak. In Sydney and Melbourne, the falls are double that.

They are the mainly the result of a credit crunch that flowed from the Australian Prudential Regulation Authority’s decision to wake from its multi-year slumber and tighten lending rules at about the same time the banks responded to the royal commission by impersonating frightened turtles.

Sinking property prices sink spending

Sliding property prices shrink household spending, which makes up roughly 60% of economic activity.

On Tuesday, in the statement it released after its first board meeting for the year, the bank obliquely signalled that it had cut its GDP growth forecasts, mentioning forecasts of 3% this year and less in 2020 instead of the 3.5% this year and less in 2020 it had mentioned after its December meeting.

Add in the global headwinds from the US-China trade tensions and the fallout from the bungled Brexit, and it’s hard to find much that’s encouraging about the Australian economy in the year ahead.

Lowe didn’t want to state explicitly that he might have to cut rates between now and the election (and if necessary during the campaign itself), but he didn’t need to. He has been as clear as governors get.

Rates could be cut on budget day

A decent bet is the bank will cut 25 points on the first Tuesday in May, after the release of the updated (and possibly weak) inflation data on April 24.

Another possible date is the first Tuesday in April, April 2, after the March release of the December quarter economic growth figures, especially if economic growth turns negative. Coincidentally, April 2 is the day the government has set aside for the early budget, so it can hold the election in May.

If it does there will be some who will try to spin it as good news. In 2007 John Howard campaigned under the slogan that rates would be “lower under the Coalition”.

Don’t think it couldn’t happen

His treasurer Peter Costello was under the impression the bank wouldn’t dare move rate during the campaign, unwisely telling broadcaster Jon Faine it would keep them put.

“He looked me in the eye. He put his thumb down as he sat there…and he said, ‘There will not be a rate rise in November. Take it from me’,” Faine said.

Having marked out the territory, there is no doubt the bank will use it if needed. To do otherwise would be to invite questions about whether it had favoured one party or the other by holding off.

The hard truth is that we live in a secular-stagnation world, with too much saving chasing too few profitable investment opportunities.

Rates no longer need to be particularly high

That means that interest rates don’t need to be anything like as high as they once did to attract enough money to fund good ideas. And even if the ideas are good, it is likely they won’t need as much money as they did. Whereas once it took tens of billions of dollars to create a globally significant company (like BHP or US Steel) all it takes now is maybe $2,000 and a laptop, as with Facebook and Google.

A massive mining boom caused by the transition of China to a market economy and then a huge property bubble masked the new reality here for while.

Now it is here for all to see, the Reserve Bank governor included.




Read more:
No surplus, no share market growth, no lift in wage growth. Economic survey points to bleaker times post-election


The Conversation


Richard Holden, Professor of Economics, UNSW

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

Forty years on from the Iranian Revolution, could the country be at risk of another one?



File 20190211 174880 1r6pcj5.jpg?ixlib=rb 1.1
The last four decades in Iran have been marked by internal tension due to its political system, which combines theocratic and republican elements.
from shutterstock.com

Naser Ghobadzadeh, Australian Catholic University

Iran’s ruling clergy are celebrating the 40th anniversary of the 1979 revolution, during which Shi’ite Islamists, led by religious leader Ayatollah Khomeini, toppled Mohammad Reza Shah’s secular monarchy.

The linchpin of the Islamic Republic’s political system is Ayatollah Khomeini’s doctrine of Wilayat-i Faqih, or guardianship of the jurist, which makes a Shia religious jurist the head of state. The jurist’s legitimacy to hold the most powerful position in the state is claimed to be based on divine sovereignty.

As its name suggests, the Islamic Republic of Iran’s current system combines theocratic and republican elements. The president and parliament are democratically elected, while the members of powerful institutions such as the Guardian Council and the judiciary are appointed by the Supreme Leader (Walī-yi Faqīh).

The Guardian Council oversees elections and the final approval of legislation. According to the Constitution of the Islamic Republic, all legislation, policies and programs must be consistent with the observance of Islamic principles.
The Guardian Council has a duty to monitor all legislative decisions and determine whether their implementation would cause a violation.




Read more:
World politics explainer: the Iranian Revolution


This unprecedented political system brought in four decades of internal conflict. The established Islamic Republic of Iran also ceased being a US ally and instead became an enemy. International sanctions, along with the clergy’s mismanagement and endemic corruption, have resulted in a dire economic situation. There is a strong fear the high unemployment and inflation rate will continue to rise.

Under these circumstances, there are now doubts the Islamic Republic can survive. And some wonder whether we may soon see another revolution. So, what is the situation in Iran 40 years after the Shah was overthrown and who is agitating for change?

Decades of unrest

After Ayatollah Khomeini died in 1989, a more conservative Supreme Leader, Ayatollah Khamenei, came to power and strengthened the theocracy.

The reformist movement emerged in the mid-1990s to counter the newly established conservative regime. They had little chance of gaining power through theocratic institutions, so they focused on the electoral side. They campaigned for women’s rights, democratic rule and a civil-military divide.

Reformists gained power twice: from 1997 to 2005 and from 2013 – with the election of the relatively moderate president, Hassan Rouhani – until now. In these years, reformists controlled electoral institutions such as the presidency and the parliament.

For decades, reformers have struggled to limit the power of theocratic institutions – while still broadly complying by the laws of the clergy, and the principles set in place by Khomeini – and expand the power of republican institutions. However, they were no match for the Khamenei-led resistance, and theocratic institutions are more powerful today than they were in the mid-1990s.

Iran has also continually had tense relations with the international community. In addition to eight years of war with Iraq, Iran has been under sanctions for almost all of the past four decades. These have been imposed by the US, the EU, and the United Nations over claims Iran breached its nuclear obligations.




Read more:
Why the Iran nuclear agreement is a deal worth honouring


Today, the Donald Trump-led US government is pursuing an extremely hostile approach to Iran. Crucially, the US has withdrawn from a nuclear deal negotiated with the Obama administration – under which Iran agreed to limit its nuclear program. The US has reapplied previous sanctions (which were lifted under the deal) and imposed new ones. Iranians are also the most affected of the Muslim majority countries included in Trump’s travel ban.

Reformists have made some progress towards easing economic hardship, loosening social control, and initiating a temporary easing of tensions with the outside community. But the parlous nature of the political structure empowers the theocrats to manipulate the system and stymie any reform effort that promises a path to democratisation.

Reformists or pro-regime opposition

The protests that swept Iran between December 2017 and January 2018 showed that many Iranians don’t consider the reformists capable of bringing about meaningful change. Protestors expressed their anger over increasing economic hardship, as well as Iran’s support and funding for foreign conflicts, namely the civil wars in Yemen and Syria. They also chanted slogans calling for an end to the rule of clerics.

Rampant corruption, the failure of Rouhani to fulfil his promises – such as boosting the economy, extending individual and political freedoms, ensuring equality for women and men, and easing access to the internet – and the return of sanctions have combined to shatter hope of reform. This has been expressed in global protests by the Iranian diaspora calling for a change to the government.

It seems unlikely the reformists will be able to maintain their positions in the country’s electoral institutions. The sad reality is that even if they have another chance, the result will only compound their failures.




Read more:
Why Iran’s protests matter this time


These circumstances have led to another stream of opposition – one agitating for a toppling of the Islamic Republic and regime change – gaining currency. Most members of this group are in exile, including Iran’s ex-prince and son of the Shah overthrown by the revolution, Reza Pahlavi.

But there is profound disagreement between the opposition groups in exile. Although they share a similar goal, they have consistently proven unable to agree on an overarching framework. The profound divisions among the groups has drained both their resources and intellectual capacity, which has rendered them incapable of contesting the country’s ruling clergy.

Those advocating for regime change have also been incapable of articulating a viable alternative to the Islamic Republic. All opposition groups overuse the abstract notion of “secular democracy” without clearly explaining what exactly they have in mind.

Pahlavi’s desire is reportedly not to put himself back on the throne, but to let the people decide what the political system would look like. He has said:

It’s not the form that matters, it’s the content; I believe Iran must be a secular, parliamentary democracy. The final form has to be decided by the people.

While this is a legitimate statement, figures like Pahlavi ought to offer viable alternatives that would help bring opposition groups together. Potential alternatives should also be structured to appeal to the masses, a considerable segment of whom have expressed disillusionment with the ideal of an Islamic state.

Opposition groups are absorbed in delegitimising the Islamic Republic, questioning the way the clergy run the country. In doing so, they forget the the people who have already expressed widespread dissatisfaction with the clergy.

The opposition needs to skilfully craft an alternative to the Islamic Republic and a comprehensive plan for the transition to democracy. Until an alternative political system is formulated and popularised, the opposition will remain impotent and unable to initiate a transformation in the country.

Of course, change is not impossible. A military confrontation with Israel or the US, the departure of 79-year-old Ayatollah Khamenei, or a spontaneous mass uprising could prove a game changer.The Conversation

Naser Ghobadzadeh, Senior lecturer, National School of Arts, Australian Catholic University

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

Poll wrap: Labor maintains Newspoll lead but Morrison’s ratings up, and Abbott behind in Warringah


File 20190211 174890 j1yv7p.jpg?ixlib=rb 1.1
While Scott Morrison remains preferred PM, Labor maintains an election-winning two-party preferred lead in the latest Newspoll.
AAP/Ellen Smith

Adrian Beaumont, University of Melbourne

This week’s Newspoll, conducted February 7-10 from a sample of 1,570, gave Labor a 53-47 lead, unchanged from last fortnight. Primary votes were 39% Labor (up one), 37% Coalition (steady), 9% Greens (steady) and 5% One Nation (down one) – One Nation’s lowest Newspoll vote since February 2018.

43% were satisfied with Scott Morrison (up three), and 45% were dissatisfied (down two), for a net approval of -2, up five points. Bill Shorten’s net approval was down two points to -15. Morrison led Shorten by 44-35 as better PM (43-36 last fortnight).

There has been much debate in the last fortnight about Labor’s proposal to abolish franking credit cash refunds. Voters were opposed by 44-35, but this is down from 48-30 opposition in December. Opposition was strongest among those aged over 65 (59-28 opposed).




Read more:
Words that matter. What’s a franking credit? What’s dividend imputation? And what’s ‘retiree tax’?


Voters supported reducing investor tax breaks, such as negative gearing and capital gains tax deductions, by a 51-32 margin (47-33 in November).

It has been over five months since Morrison replaced Malcolm Turnbull as PM in late August 2018. In nine Newspolls, his net approval has been in the single digits, positive or negative.

The last three Newspolls of 2018 were all 55-45 to Labor, while the first two of 2019 have been 53-47. I believe the Coalition has been assisted by Morrison’s relative popularity and a greater distance from the events of last August.

In Turnbull’s last four Newspolls as PM, the Coalition trailed by just 51-49, but Turnbull’s ratings were weaker than Morrison’s, with a peak net approval of -6. However, Turnbull’s ratings would have been better if not for the hard right’s hatred of him; it is plausible that 10% of the electorate disliked him from the right. Morrison has no problem with his right flank.

The Coalition is perceived as too close to big business (see Essential below), and Greg Jericho wrote in The Guardian that the latest data are not good for the Australian economy. A key question is whether Morrison’s ratings eventually fall due to the unpopularity of most Coalition policies. Economic credibility is likely to be important if the economy slows.

Essential poll: 52-48 to Labor

Last week’s Essential poll, conducted January 23-31 from a sample of 1,650, gave Labor a 52-48 lead, a one-point gain for the Coalition since Essential’s mid-January poll. Primary votes were 38% Coalition (steady), 36% Labor (down two), 10% Greens (steady) and 7% One Nation (steady).

The fieldwork period and the sample size were both larger than usual for Essential – normally Essential is conducted over four days with a sample a bit over 1,000.

By 47-41, voters agreed that one of the reasons why there are relatively few female MPs is that women choose not to get involved with politics. By 46-39, they disagreed with the proposition that voters preferred to elect men, rather than women. By 72-20, they disagreed with women being less capable politicians. Gender quotas were supported 46-40, but Coalition voters were opposed 50-37.

37% supported a separate national day to recognise Indigenous Australians alongside Australia Day, 15% thought Australia Day should be replaced, and 40% did not support a separate day.

At least 50% thought that private health insurance companies, big banks, mining companies and big business wanted the Coalition to win the next election. Labor had a lead on this question with pensioners and people with a disability, and at least 50% with families with young children and the unemployed.

Seat polls of Warringah, Stirling and Pearce

A ReachTEL poll of the NSW seat of Warringah for GetUp, from a sample of 622, gave independent Zali Steggall a 54-46 lead over incumbent Tony Abbott. Primary votes and fieldwork dates were not included in the media report. In 2016, Abbott won Warringah by 61.6-38.4 against the Greens, and 61.1-38.9 against Labor.

60% thought Abbott’s performance as a local member poor, and 60% said they were more likely to vote for a candidate who would tackle climate change – 78% among those who had defected from Abbott.

A Labor internal poll of the WA seat of Stirling, conducted after Michael Keenan announced his retirement from a sample of 950, gave Labor a 1.5% lead after preferences. In 2016, Keenan won Stirling by a 6.1% margin. Labor and the Liberals were tied at 36% each on primary votes with 6.8% undecided.

A GetUp ReachTEL poll of the WA seat of Pearce, conducted January 16 from a sample of 674, gave the Liberals a 52-48 lead over Labor (53.6-46.4 at the 2016 election).

Seat polls are very unreliable, but Stirling and Warringah are inner metropolitan seats, while Pearce is outer metropolitan. I believe the Coalition will struggle most in better-educated inner metropolitan seats.

The three seat polls were commissioned by left-aligned groups. However, ReachTEL asks for voting intentions first. Media-commissioned polls are superior to polls from political interest groups, but seat polls are unreliable in any case.

SA byelections and NSW pill testing Newspoll

Byelections occurred on Saturday in the South Australian state seats of Cheltenham and Enfield, following the resignations of Labor’s Jay Weatherill and John Rau respectively. Labor retained both seats easily, with primary vote swings to Labor of 6.6% in both Cheltenham and Enfield since the March 2018 election. The Liberals did not contest either seat.

In an additional question conducted with last fortnight’s NSW Newspoll that had a 50-50 tie, voters were in favour of the NSW government providing a pill testing service at music festivals by a 56-35 margin. Over 70% of Labor and Greens voters supported pill testing, while Coalition voters were narrowly opposed 49-45.




Read more:
Poll wrap: Coalition gains in first Newspoll of 2019, but big swings to Labor in Victorian seats; NSW is tied


US government shutdown aftermath

On January 25, the US government shutdown ended when President Donald Trump accepted a bill that would reopen the government until February 15 without funding for the southern border wall he had demanded. The 35-day shutdown was the longest, beating the previous record of 21 days from 1995-96. Trump has suggested declaring a national emergency if Congress cannot agree to fund the wall by February 15.

In the FiveThirtyEight poll aggregate, Trump’s ratings fell to 39.3% approve, 56.0% disapprove on January 26. Since then, his ratings have recovered to 40.2% approve, 55.1% disapprove. However, Trump’s ratings among Republicans are well over 80% approve.




Read more:
Record US government shutdown harms Trump’s ratings, plus Brexit chaos and Australian Essential poll


A second shutdown could occur after talks between Democratic and Republican members of Congress broke down. To avert a shutdown, new funding must be passed by Friday (Saturday Melbourne time).

Given strong opposition to Trump in the polls, he needs the US economy to stay strong to have a reasonable chance of re-election in 2020. Despite the January shutdown, the economy added 304,000 jobs in that month.The Conversation

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

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

Labor leads 53-47% in Newspoll as Shorten struggles with medical transfer bill


Michelle Grattan, University of Canberra

The government goes into the resumption of parliament this week
trailing Labor 47-53% on the two-party vote in Newspoll, unchanged
from a fortnight ago.

The poll comes as Labor’s stand on the legislation to facilitate
medical evacuations hangs in the balance, with Bill Shorten having
indicated he would like to find a compromise and speculation about a Labor retreat from its earlier support.

Shorten receives a briefing on the implications of the bill from the secretary of the Home Affairs Department, Mike Pezzullo on Monday. Shadow cabinet and caucus will discuss Labor’s position.

The opposition has been under concerted attack from the government
over its backing for the legislation, which passed the Senate last
year with ALP support.

Shorten is worried about Labor being wedged, because border protection is always a politically vulnerable area for the ALP.

Scott Morrison says the government will not shift from outright
opposition to the bill, which is based on a proposal originally coming from independent Kerryn Phelps but subsequently refined.

Newspoll, published in The Australian, has Labor’s primary vote up a point to 39%; the Coalition’s vote remains on 37%. The Greens are on 9%; One Nation is polling 5%, down a point.

Morrison has increased his lead over Shorten as better prime minister by 2 points to 44-35%.

Morrison’s satisfaction rating is up 3 points to 43%; his
dissatisfaction rating has fallen 2 points to 45%. Shorten has a net approval rating of minus 15, a worsening by 2 points.

The tactical battle over the medical transfer amendments will dominate the run up to Tuesday’s first day of the sitting. On another front, the opposition is trying to muster the numbers for extra sitting days to consider measures from the banking royal commission.

In comments on the medical transfer bill Opposition spokesman Shayne Neumann said on Sunday: “Labor has always had two clear objectives – making sure sick people can get medical care, and making sure the minister has final discretion over medical transfers.”

The bill provides that where there a dispute between the two doctors recommending a transfer and the minister, the final say on medical grounds would be in the hands of a medical panel.

The minister could override medical decisions only on security grounds (“security” is as defined in the ASIO act).

Passage of the legislation, which would require support from Labor and all but one of the crossbench, would be a big rebuff for the
Coalition.

But the government has managed to turn the heat onto Labor, claiming the legislation would undermine Australia’s border protection.

The briefing Shorten will receive will put more pressure on the
opposition, because Home Affairs will presumably reinforce the
argument it advanced in advice to the government.

The government has now declassified this advice – which last week it provided more informally to The Australian.

The advice, which has some sections blacked out, says: “The
effect of the Bill will undermine the Australian Government’s regional processing arrangements.

“Conduct which would come within the security exception to transfer
based on the minister’s reasonable belief that the transfer would be prejudicial to security, does not include all criminal conduct”.

“Ultimately, the amendments provide that the approximate 1000
transferees currently located in Papua New Guinea (PNG) and Nauru
could have access to a transfer to Australia within weeks of any Royal Assent,” the advice says.

“It is not expected that the Minister’s ability to refuse transfer on security grounds will significantly reduce the number of potential transfers”.

Neumann said on Sunday: “Labor has great respect for our national
security agencies and we’ve always worked cooperatively with them.”The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

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