Budget 2017: Medicare levy rise finances NDIS and banks hit for budget repair


Michelle Grattan, University of Canberra

Taxpayers will be hit with a rise in the Medicare levy and the big banks face a new tax in a budget that pitches to win back disillusioned voters and to reassure the rating agencies. The Conversation

The government will fully plug the funding hole in the National Disability Insurance Scheme (NDIS) with an increase of 0.5% in the Medicare levy from July 2019, taking it to 2.5%. The increase will raise A$8.2 billion over the budget period.

In the other major tax hike in the budget delivered by Treasurer Scott Morrison on Tuesday night, the five major banks will pay a levy raising $6.2 billion over the forward estimates “to support budget repair”.

Morrison cast the budget as based on the principles of “fairness, security, and opportunity”. It commits to more and better paying jobs, guaranteeing essential services, putting downward pressure on the cost of living, and Australia living within its means.

It is squarely directed at trying to undo continuing damage from the harsh Abbott government 2014 budget. Morrison confirmed a raft of so-called “zombie measures” that have failed to pass parliament have been dropped, at a cost of $13 billion. Morrison called the extra revenue raising needed to cover these measures “a Senate tax for things not going through”.

Among its initiatives directed to avoiding a future “Mediscare” campaign, the budget promises to “guarantee” Medicare, progressively unfreeze the Medicare rebate, and maintain the bulk-billing incentives for pathology and diagnostic imaging services.

A Medicare Guarantee Fund will be established to pay for all expenses of the Medicare Benefits Schedule and the Pharmaceutical Benefits Scheme (PBS). Revenue from the Medicare levy will be put into this fund plus the amount from general income tax that’s needed to cover the total cost. Morrison said this would “provide transparency about what it really costs to run Medicare and the PBS and a clear guarantee on how we pay for it”.

The government is also restoring the pensioner concession card to people that were hit by the pension assets test change this year.

A housing affordability package includes a “first home super savers scheme” that will provide a tax cut for those trying to get a deposit together. They will be able from July 1 to salary sacrifice into their superannuation account, separate from their compulsory superannuation contributions.

The contributions will receive the tax advantages of superannuation, with contributions and earnings taxed at 15% rather than marginal rates. Withdrawals will be taxed at the marginal rates, less 30 percentage points. Contributions will be limited to $30,000 per person and $15,000 per year.

Morrison said this plan would mean “most first-home savers would be able to accelerate their savings by at least 30%”.

Older Australians will be encouraged to downsize by being able to make a non-concessional contribution of up to $300,000 into their superannuation fund from the sale of their home.

While the general provisions of negative gearing are untouched, the government will disallow deductions for travel expenses related to the properties. For properties bought from now it will limit plant and equipment depreciation deductions.

There will be tougher rules for foreign investors in the housing market.

Morrison painted an optimistic picture of the economic outlook, while acknowledging the pain Australians have been feeling, saying that not all people had shared the country’s economic growth and “many remain frustrated at not getting ahead”.

He said there were signs of an improving global economy and “there is clearly the potential for better days ahead”.

The budget forecasts wages growth – which has been around 2% – will increase to as much as 3.75% by the end of the budget period. This is regarded by many economists as very optimistic.

For the coming 2017-18 year, growth is forecast at 2.75% and unemployment at 5.75%.

Morrison said the budget had a “fair and responsible path” back to balance, which is due to be reached in 2020-21, with a projected surplus of $7.4 billion, somewhat higher than previously estimated. The forecast deficit for 2017-18 is $29.4 billion.

The budget contains an extensive infrastructure program, pledging to deliver $75 billion in infrastructure funding and financing over a decade.

The government will inject up to $5.3 billion into the construction of the second Sydney airport. It will provide $8.4 billion in equity into the planned Melbourne-Brisbane inland rail project.

Morrison also said that as well as the intention to further develop the Snowy Hydro, “the Commonwealth is open to acquiring a larger share or outright ownership” of the scheme from the Victorian and New South Wales governments.

The levy on the banks will be 0.06% on their liabilities, starting on July 1. Morrison said it was similar to measures in other advanced countries and “will even up the playing field for smaller banks”.

He indicated that the banks should not pass the levy onto customers, said the Australian Competition and Consumer Commission would monitor the situation, and advised people to switch to one of the smaller banks if they thought they were being shortchanged.

A Financial Complaints Authority will be set up as a one-stop-shop to deal with grievances customers have with banks and other financial institutions.

The chief executive of the Australian Bankers’ Association, Anna Bligh, slammed the plan, saying it was policy on the run, and “reckless”. “They have done it because they think banks are an easy target,” she said.

Welfare recipients have again been in the government’s sights. There will be a drug testing trial for 5,000 new welfare recipients. JobSeeker recipients testing positive would be placed on the Cashless Debit Card.

“We will no longer accept, as an excuse from repeat offenders, that the reason they could not meet their mutual obligation requirements was because they were drunk or drug-affected,” Morrison said.

The disability support pension will be denied for a disability caused solely by a person’s substance abuse.

Shadow Treasurer Chris Bowen said the government had “tried to catch up with Labor but they have failed miserably”. But Labor signalled its agreement with the bank tax.

Business Council president Jennifer Westacott said it was a budget for “a reality world”. It was “practical and workable”.

“We welcome the government’s discipline in restricting real spending growth to 1.9% over the forward estimates,” she said.

But she said “the banking levy effectively represents double-taxation of some of Australia’s most successful companies, which already pay $11 billion in company tax each year”.

The Greens attacked the planned drug testing trial for some new welfare recipients was “a violation” and a “very dangerous precedent”. They would seek advice about its legality.

https://www.podbean.com/media/player/yahw4-6a9eae?from=yiiadmin

Michelle Grattan, Professorial Fellow, University of Canberra

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

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Out of the ashes of Afghanistan and Iraq: the rise and rise of Islamic State


Greg Barton, Deakin University

Since announcing its arrival as a global force in June 2014 with the declaration of a caliphate on territory captured in Iraq and Syria, the jihadist group Islamic State has shocked the world with its brutality.

Its seemingly sudden prominence has led to much speculation about the group’s origins: how do we account for forces and events that paved the way for the emergence of Islamic State? In the final article of our series examining this question, Greg Barton shows the role recent Western intervention in the Middle East played in the group’s inexorable rise.


Despite precious little certainty in the “what ifs” of history, it’s clear the rise of Islamic State (IS) wouldn’t have been possible without the 2003 invasion and occupation of Iraq. Without these Western interventions, al-Qaeda would never have gained the foothold it did, and IS would not have emerged to take charge of northern Iraq.

Whether or not the Arab Spring, and the consequent civil war in Syria, would still have occurred is much less clear.

But even if war hadn’t broken out in Syria, it’s unlikely an al-Qaeda spin-off such as IS would have become such a decisive actor without launching an insurgency in Iraq. For an opportunistic infection to take hold so comprehensively, as IS clearly has, requires a severely weakened body politic and a profoundly compromised immune system.

Al-Qaeda founder Osama bin Laden.
AAP

Such were the conditions in Goodluck Jonathan’s Nigeria from 2010 to 2015 and in conflict-riven Somalia after the fall of the Barre regime in 1991. And it was so in Afghanistan for the four decades after conflict broke out in 1978 and in Pakistan after General Zia-ul-Haq declared martial law in 1977.

Sadly, but even more clearly, such are the circumstances in Iraq and Syria today. And that’s the reason around 80% of all deaths due to terrorist attacks in recent years have occurred in five of the six countries discussed here, where such conditions still prevail.

An unique opportunity

The myth of modern international terrorist movements, and particularly of al-Qaeda and its outgrowths such as IS (which really is a third-generation al-Qaeda movement), is that they’re inherently potent and have a natural power of attraction.

The reality is that while modern terrorist groups can and do operate all around the globe to the point where no country can consider itself completely safe, they can only build a base when local issues attract on-the-ground support.

Consider al-Qaeda, which is in the business of global struggle. It wants to unite a transnational ummah to take on far-off enemies. But it has only ever really enjoyed substantial success when it has happened across conducive local circumstances.

The Soviet occupation of Afghanistan in the 1980s provided an opportunity uniquely suited to the rise of al-Qaeda and associated movements. It provided plausible justification for a defensive jihad – a just war – that garnered broad international support and allowed the group to coalesce in 1989 out of the Arab fighters who had rallied to support the Afghans in their fight against the Soviets.

The declaration of independence by Chechnya in 1991 led to all-out war with the Soviet military between 1994 and 1996.
EPA

Further opportunities emerged in the Northern Caucasus, where local ethno-national grievances were eventually transformed into the basis for a more global struggle.

The declaration of independence by Chechnya in 1991 led to all-out war with the Soviet military between 1994 and 1996, when tens of thousands were killed. After a short, uneasy peace, a decade-long second civil war started in 1999 following the invasion of neighbouring Dagestan by the International Islamic Brigade.

The second civil war began with an intense campaign to seize control of the Chechen capital, Grozny. But it became dominated by years of fighting jihadi and other insurgents in the Caucus mountains and dealing with related terrorist attacks in Russia.

In Nigeria and Somalia, Boko Haram and al-Shabaab now share many of the key attributes of al-Qaeda, with whom they have forged nascent links. But they too emerged primarily because of the failure of governance and the persistence of deep-seated local grievances.

Musab al-Zarqawi positioned himself in Iraq ahead of the invasion by Western powers.
Petra/EPA

Even in Afghanistan, al-Qaeda struggled to transform itself into a convincing champion of local interests in the 1990s. After becoming increasingly isolated following the September 11 attacks on the US, it failed to gain support from the Afghan Taliban for its global struggle.

But something new happened in Iraq beginning in 2003. The Jordanian street thug Musab al-Zarqawi correctly intuited that the impending Western invasion and occupation of Iraq would provide the perfect conditions for the emergence of insurgencies.

Al-Zarqawi positioned himself in Iraq ahead of the invasion and deftly rode a wave of anger and despair to initiate and grow an insurgency that in time came to dominate the broken nation.

Initially, al-Zarqawi was only one of many insurgent leaders intent on destabilising Iraq. But, in October 2004, after years of uneasy relations with the al-Qaeda leader during two tours in Afghanistan, he finally yielded to Osama bin Laden’s request that he swear on oath of loyalty (bayat) to him. And so al-Zarqawi’s notorious network of insurgents became known as al-Qaeda in Iraq (AQI).

From the ashes

Iraq’s de-Ba’athification process of May 2003 to June 2004, during which senior technocrats and military officers linked to the Ba’ath party (the vehicle of the Saddam Hussein regime) were removed from office, set the stage for many to join counter-occupation insurgent groups – including AQI.

Without the sacking of a large portion of Iraq’s military and security leaders, its technocrats and productive middle-class professionals, it’s not clear whether this group would have come to dominate so comprehensively. These alienated Sunni professionals gave AQI, as well as IS, much of its core military and strategic competency.

Like this view of Aleppo in Syria from September 2015, many other cities in Syria and parts of Iraq have been destroyed by violence and war.
AAP/Alaa Abdulrahman

But even with the windfall opportunity presented to al-Zarqawi by the wilful frustration of Sunni interests by Nouri al-Maliki’s Shia-dominated government from 2006 to 2014, which deprived them of any immediate hope for the future and confidence in protecting their families and communities, AQI was almost totally destroyed after the Sunni awakening began in 2006.

The Sunni awakening forces, or “Sons of Iraq”, began with tribal leaders in Anbar province forming an alliance with the US military. For almost three years, tens of thousands of Sunni tribesmen were paid directly to fight AQI, but the Maliki government refused to incorporate them into the regular Iraqi Security Force. And, after October 2008 – when management of these forces was handed over by the US military – he refused to support them.

The death of al-Zarqawi in June 2006 contributed to the profound weakening of the strongest of all post-invasion insurgent groups. AQI’s force strength was reduced to several hundred fighters and it lost the capacity to dominate the insurgency.

Then, in 2010 and 2011, circumstances combined to blow oxygen onto the smouldering coals.

Former prime minister Nouri Al-Maliki’s government deprived Iraqi Sunnis of immediate hope for the future and confidence in protecting their families and communities.
Aude Guerrucci/EPA

In 2010, the greatly underestimated Abu Bakr al-Baghdadi, a local Iraqi cleric with serious religious scholarly credentials, took charge of AQI and began working to a sophisticated long-term plan.

Elements of the strategy went by the name “breaking the walls”. In the 12 months to July 2013, this entailed the movement literally breaking down the prison walls in compounds around Baghdad that held hundreds of hardcore al-Qaeda fighters.

Islamic State, as the group now called itself, also benefited from the inflow of former Iraqi intelligence officers and senior military leaders. This had begun with de-Ba’athification in 2003 and continued after the collapse of the Sunni awakening and the increasingly overt sectarianism of the Maliki government.

Together, they developed tactics based on vehicle-borne improvised explosive devices and the strategic use of suicide bombers. These were deployed not in the passionate but often undirected fashion of al-Qaeda but much more like smart bombs in the hands of a modern army.

And the US military withdrawal from Iraq in late 2011, well telegraphed ahead of time, provided an excellent opportunity for the struggling insurgency to rebuild. As did the outbreak of civil war in Syria.

A helping hand

Al-Baghdadi initially dispatched his trusted Syrian lieutenant, Abu Mohammad al-Julani, to form a separate organisation in Syria: the al-Nusra front.

Abu Bakr al-Baghdadi’s trusted Syrian lieutenant, Abu Mohammad al-Julani, quickly established Jabhat al-Nusra in northern Syria.
Hamid Khatib/Reuters

Jabhat al-Nusra quickly established itself in northern Syria. But when al-Julani refused to fold his organisation in under his command, al-Baghdadi rebranded AQI (or Islamic State in Iraq) Islamic State in Iraq and al-Sham/the Levant (ISIS/ISIL).

Then, a series of events turned IS from an insurgency employing terrorist methods to becoming a nascent rogue state. These included the occupation of Raqqa on the Syrian Euphrates in December 2013; the taking of Ramadi a month later; consolidation of IS control throughout Iraq’s western Anbar province; and, finally, a sudden surge down the river Tigris in June 2014 that took Mosul and most of the towns and cities along the river north of Baghdad within less than a week.

IS’s declaration of the caliphate on June 29, 2014, was a watershed moment that is only now being properly understood.

In its ground operations, including the governing of aggrieved Sunni communities, IS moved well beyond being simply a terrorist movement. It came to function as a nascent rogue state ruling over around 5 million people in the northern cities of the Euphrates and the Tigris, and defending its territory through conventional military means.

In 2010, Abu Bakr al-Baghdadi took charge of AQI and began working to a sophisticated long-term plan.
EPA/Furqan Media

At the same time, it skilfully exploited the internet and social media in ways the old al-Qaeda could not do – and that its second-generation offshoot, al-Qaeda in Arabian Peninsula (AQAP), had only partially achieved.

This allowed IS to draw in tens of thousands of foreign fighters. Most came from the Middle East and Northern Africa, but as many as 5000 came from Europe, with thousands more from the Caucusus and from Asia.

Unlike the case in Afghanistan in the 1980s, these foreign fighters have played a key role in providing sufficient strength to take and hold territory while also building a global network of support.

But without the perfect-storm conditions of post-invasion insurgency, this most potent expression of al-Qaedaism yet would never have risen to dominate both the region and the world in the way that it does.

Even in its wildest dreams, al-Qaeda could never have imagined that Western miscalculations post-9/11 could have led to such foolhardy engagements – not just in Afghanistan but also in Iraq.

Were it not for these miscalculations, 9/11 might well have precipitated the decline of al-Qaeda. Instead, with our help, it spawned a global jihadi movement with a territorial base far more powerful than al-Qaeda ever had.


This is the final article in our series on the historical roots of Islamic State. Catch up on the rest of the series, if you haven’t already.

The Conversation

Greg Barton, Chair in Global Islamic Politics, Alfred Deakin Institute for Citizenship and Globalisation; Co-Director, Australian Intervention Support Hub, Deakin University

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

Australian Politics: 11 July 2013


Labelled a stunt by many and ignored by Tony Abbott, a proposed political debate between Kevin Rudd and Tony Abbott didn’t happen at the National Press Club today. The debate was proposed by Kevin Rudd, but Tony Abbott wanted nothing to do with it. So instead of a debate, Kevin Rudd delivered an address on the economy. The link below is to an article that reports on the address.

For more visit:
http://www.guardian.co.uk/world/2013/jul/11/kevin-rudd-seven-point-plan


Meanwhile, in Queensland the great politicians pay rise debate has continued with the premier now taking ‘action.’


Then of course there was more Kevin Rudd bashing by all and sundry. This time over a Twitter photo. My take – what’s wrong with Kevin Rudd being human and normal. I think the whiners need to take a long cold shower.

Australia: Queensland – Government Seeks to Block Pay Rise for Public Servants


They aren’t bad this lot. The Queensland government has just awarded themselves a $57 000 pay rise and are now seeking to block a pay rise for public servants. I probably shouldn’t express what I think of this Queensland government in public. The link below is to an article that reports on the public outrage in Queensland.

For more visit:
http://www.couriermail.com.au/news/queensland/newman-government-heads-to-supreme-court-in-bid-to-block-pay-rise-for-public-servants/story-fnihsrf2-1226675622419

Europe: The Rise of Germany


The link below is to an article that looks at the continuing rise of Germany as the power of Europe.

For more visit:
http://www.guardian.co.uk/world/2013/mar/31/is-germany-too-powerful-for-europe

Africa: Persecution News


The link below is to an article that considers the rise of Islam in Africa and the persecution of Christians.

For more visit:
http://www.wnd.com/2013/03/rise-of-islam-fuels-christian-persecution/