Claims that North Korea could fire nuclear weapons at the continental US present a serious threat to global security. But its hostile activities don’t end there. North Korea has also become an aggressive cyber power, regularly using cyber attacks to advance its interests.
Last month, a threat intelligence firm, Recorded Future, reported that North Korea may have been using New Zealand’s internet networks as proxies to launch cyber attacks worldwide. The New Zealand government’s Communications Security Bureau is assessing the veracity of these claims.
The report suggests that North Korea may have both a physical and a virtual presence in New Zealand. It raised the possibility of a network of “patriot hackers” using New Zealand cyber networks to pursue the aims of the North Korean regime.
North Korea’s history of cyber attacks
Cyber attacks have become a wide-ranging tool in the arsenal of authoritarian governments to coerce and intimidate foreign governments, to subvert democratic processes, and to impose costs on their adversaries.
In North Korea’s case, this pattern of activity stretches back many years. North Korea is estimated to have an army of 6,000 hackers, engaging in malicious cyber activity regularly.
In March 2013, hackers linked to North Korea attacked South Korean banks and media agencies, causing widespread disruption. In November 2014, cyber attacks against Sony Pictures followed the release of the film The Interview, which caricatured and mocked the North Korean leader.
In 2016, a Bangladeshi bank became the victim of North Korean hackers. Reports said that US$81 million were lost through compromised financial transactions.
Most recently, the WannaCry ransomware attack, which affected computers in more than 150 countries, has been linked to the Lazarus group of hackers, which has links to the North Korean regime. This suggests North Korea is now using state-sponsored hackers to help raise revenue for a country starved of access to international markets and funding.
Cyber attacks further threat to nuclear security
Analysis of North Korea’s activities often misses the connections between cyber and nuclear security. North Korea’s nuclear program has itself become a victim of cyber attacks.
A report in the New York Times in March this year revealed that the Obama administration ordered a campaign of cyber subversion aimed at North Korea’s nuclear and missile programs. It mirrors the now infamous Stuxnet attacks directed against Iran in 2010.
In the absence of progress on North Korean disarmament, delaying its ability to pursue nuclear weapon programs through cyber attacks has become a feature of US strategy. It’s a strategy that may yield short-term results, but presents significant escalatory dangers.
Cyber attacks pose increasingly serious risks to classified nuclear information, the security of nuclear facilities, and the integrity of the components that nuclear arms and missile technologies rely on.
Last year, the UK government was warned that its trident nuclear submarine program was vulnerable to cyber intrusions. The think-tank report Hacking UK Trident: A Growing Threat argued that a cyber attack directed against the submarines could:
… neutralise operations, lead to loss of life, defeat or perhaps even the catastrophic exchange of nuclear warheads (directly or indirectly).
Another concerning aspect of the cyber-nuclear nexus is that hacking could facilitate the proliferation of nuclear materials and technology to other aggressive states and non-state actors.
Reining in North Korea
The growing connections between nuclear and cyber security are changing the strategic balance between nuclear powers in subtle and undetermined ways. Approaches to dealing with the North Korean regime must treat these issues as related.
So what can be done about North Korea’s aggressive use of the internet? Unfortunately, just as with its nuclear program, there few good options. Sanctions imposed on the regime for its cyber activity, such as those following the Sony hack, have proved ineffective at changing the regime’s behaviour.
China and Russia may have a role to play in persuading Kim Jong-un to “play nicely” in cyberspace, but both countries also have a long history of malicious cyber operations.
There are examples where states have given up destructive weapons programs. These include Colonel Gaddafi’s regime in Libya and the more recent Iran deal. However, the difficulty of verifying whether offensive cyber programs have been dismantled presents a major obstacle.
Cyber armies operating from a virtual realm can easily be hidden. Given that punishing the North Korean regime for its behaviour has not yielded results, it may be time to start thinking about a range of positive inducements to bring the country back into the international community, including offering diplomatic talks without precondition.
Rewarding North Korea for its errant behaviour may be unpalatable, but the combined danger of its nuclear and cyber capabilities would appear to warrant a significant shift in strategy.
The arrests and raids in Sydney over the weekend, as well as the 12 so-called “terrorist plots” disrupted by police since September 2014, ought to raise questions over whether Australia’s efforts to counter violent extremism are actually working.
Of this $40 million, only around $2 million was given out in 2015 to 42 of the 97 applicants. This money was to support grassroots organisations to develop new, innovative services to move people away from violent extremism. This funding round was developed to improve Australia’s capability to deliver localised and tailored intervention services.
So, there is a significant imbalance between sharp-end funding and piecemeal, short-term, community-level grants. The money is clearly not being invested wisely or even reaching the right places, such as those at-risk communities willing to engage and desperately seeking funding. Many more terror-related arrests will follow in the foreseeable future as a result.
All the while, it’s been full steam ahead in relation to security, legislation, corrections, police and intelligence. This has come at the expense of community resilience and building up protective mechanisms within vulnerable youth and communities.
From my research with Muslim communities over the past two years, the government’s approach is verging on being counter-productive. It now risks trampling on the basic rights and freedoms of young Muslims, their families and their communities more broadly.
This approach will actually worsen the many underlying issues – such as discrimination, alienation, marginalisation and rejection – that seem to contribute to offending in the first place.
The safety of all Australians should remain a key government priority. And getting the balance right between security and youth and community welfare is difficult. But the government seems hell-bent on pre-crime arrest, prosecution and punishment, while falling short on providing the necessary long-term support for the young vulnerable people it really needs to protect and prevent from engaging in serious anti-social behaviour.
For those from minority communities in particular, the criminal justice system is a very slippery slope. Once in it, the prospects of positive and meaningful futures are slim.
Where Australia’s approach is lacking
As with the UK’s Prevent program, Australia’s approach suffers from multiple, mutually reinforcing structural flaws. Its foreseeable consequence is a serious risk to the wellbeing of young Muslims and Australian multiculturalism more broadly.
Much of the centrepiece of the government’s countering violent extremism strategy rests on the theory of radicalisation and the social engineering of radical views and cultures to become more conservative and “Australian”.
However, for the concept of radicalisation alone, there seems to be very little clarity about the term and the tools that measure it. If such tools are used to help determine the destiny of a young Muslim person, whether it be in a school or criminal justice situation, then these must be made more available for wider peer review – rather than held in secrecy within the government.
For those deemed “radicalised” or on the pathway to radicalisation, there are very few community-based secondary-level intervention programs designed to support them. Nor are there programs they are willing to participate in voluntarily. This is largely because most current programs are led by government and police, which seem to lack a crucial understanding about the many cultural, religious and ethnic nuances required for effective intervention.
Without close community partnerships and community-led approaches, programs will never be able to fully understand the highly complex nature of families and communities.
Getting access to vulnerable youth and their families, and then encouraging them to participate in interventions, requires close and trusted community partnerships. To date, partnerships between government and the more conservative community groups have not been fully developed. This is particularly the case with the more hard-to-reach groups, which have many of the young people requiring support or intervention.
Put together, this has limited the government’s capacity to support and fund communities working with the most at-risk or vulnerable youth.
The government’s position on these communities is that they are too risky to work with. In reality, it is too risky not to work with them.
To make us truly safe – not just from terrorism, but from other serious crimes too – the government needs to go back to basics. Australia should invest a lot more in longer-term community partnerships and develop more preventive measures, such as community-led interventions. These interventions must be developed by those outside the government’s national security apparatus.
A major government rethink is required if it is truly going to keep us safe.
Population growth has profound impacts on Australian life, and sorting myths from facts can be difficult. This article is part of our series, Is Australia Full?, which aims to help inform a wide-ranging and often emotive debate.
Australia feeds a lot of people. As a big country with a relatively small population, we have just over two arable hectares per person, one of the highest ratios in the world. Our diverse soils and climate provide a wide variety of fresh food all year round.
Historically we produce far more than we consume domestically. We sell around 65% of farm production overseas, making Australia a leading food-exporting nation. We therefore contribute to the food security not just of Australia, but of many other nations.
However, despite being a net food exporter, Australia also imports foods such as coffee, chocolate, processed fruit and vegetables, and key ingredients used in baking our daily bread. We are part of a global food system.
How will a swelling population, projected to reach between 36.8 million and 48.3 million by 2061, affect our food security? Are we set up to weather the storm of climate change, the degradation of our natural resources, and competition for land and water use from mining and urban expansion?
By the numbers
Current Australian government policy is to increase agricultural production and food exports, with a specific focus on developing Australia’s north.
In addition to providing food and nutrition security, the Australian food sector is a key driver of public health, environment, the economy and employment. The gross value of production from Australia’s 135,000 farmers varies between A$55 billion and A$64 billion a year, with exports accounting for between A$45 billion and A$48 billion.
Horticultural production (fruit, nuts and vegetables) will swell as Australian growers move to satisfy growing Asian demand.
Australian food processing companies add a further A$32 billion of value from 150 large food processors. We exported $A26 billion worth of processed food and beverages in 2015-16 and imported A$16.8 billion, resulting in a trade surplus of A$9.1 billion (rounded to one decimal place).
The food retail sector has an annual turnover around A$126 billion, with about 70% of Australians shopping at Woolworths or Coles. It’s also worth noting that considerable land and water resources are devoted to non-food commodities such as forestry, cotton and wool, and to environmental outcomes such as carbon sequestration or biodiversity plantings.
For the sake of this exercise, let’s leave aside food we import, and assume that Australia will continue to export 65% of the food we produce.
Currently, our exports feed (at least in part) 36.6 million people outside Australia. If we add that to our domestic population, 61 million people will eat Australian food in 2017.
If we apply the same assumptions to projected high and low Australian populations for 2061, we arrive at a total (domestic plus export) population fed by Australian production of 92 million to 121 million, or an increase of 51-98%.
Could Australia double the number of people we feed by 2061? The answer is yes, but not simply by doubling the amount of food we produce. Three broad strategies will need to be integrated to reach this target:
Increase food productivity. We need to aim for 2% growth in annual food production by increasing investment research and development for food and agriculture. For comparison, between 1949 and 2012 we have averaged 2.1% annual growth, although from 2000-12 that slumped to 0.6%. Achieving this productivity target will be difficult, given the challenge of climate change and other constraining factors.
Reduce food waste. We currently waste around 30% of the food we produce. Reducing food waste benefits the environment and the economy. This strategy requires ongoing improvements in supply chain efficiency, changes in marketing, and consumer education.
Change our eating patterns. Moving towards sustainable diets will improve public health and environment outcomes. Reducing overconsumption (a contributor to obesity), eating more vegetables and less discretionary “junk” foods represent initial steps in this direction.
The next few decades will present unprecedented challenges and opportunities for the Australian food sector. Placing the consumer at the centre of healthy, sustainable and ethical food systems will be increasingly important, whether that consumer lives in Brisbane or Beijing. New ways of connecting consumers to producers will become commonplace, creating more informed and empowered consumers, and rewarding innovation.
It’s easy to conclude that Australia can feed many more people than we currently do, but the real issue is to do this while ensuring our food system is healthy, sustainable and fair. Ultimately, exporting the research, technology and education that underpin our future food system will benefit far more people than those directly consuming food produced in Australia.
You can read other articles in the Is Australia Full? series here.
The importance of understanding how routers work and how to protect them from malicious attacks was highlighted by WikiLeaks’s recent revelations about the existence of an alleged CIA hacking tool, code named “CherryBlossom”. This tool can apparently hack routers, allowing the perpetrator to monitor traffic and perform software exploits on victims.
The average person is unlikely to be targeted by this level of attack. But if you’re going to have a router at home, it’s important to understand exactly how it works.
How does a router work?
A router is like a post office for the internet: it acts as a dispatcher, choosing the fastest and most effective delivery paths.
Let’s assume you have a smartphone at home that’s connected to your router and through that, the internet. You’re keen to find a song to listen to. Here’s how it works:
Your smartphone takes your song request, and converts it into a radio signal using the specification (it’s called a 802.11 Protocol) that controls how your Wi-Fi works
This information is sent to the router, including your smartphone’s Internet Protocol address (essentially, its internet street address) and the track you requested
This is where the Domain Name Server (DNS) comes into play. The main purpose of this platform is to take a text based address (let’s say, http://www.spotify.com) and convert it into a numeric Internet Protocol address
The router will then send off the request information to your internet provider, through their proxy and then on to Spotify.com
Along this journey from your home to your internet provider to Spotify.com, your request information will “hop” along different routers. Each router will look at where the the requested information has to reach and determine the fastest pathway
After going through a range of routers, an agreed connection between your home internet, your iPhone and Spotify will be established. As you can see in the image below, I have used a trace route service from Australian-based company Telstra to Spotify showing 16 routers along the journey
Then data will begin to travel between the two devices and you’ll hear the requested song playing through your smartphone.
Explaining the back of your router
Even if you now understand how your router works, the machine itself is covered in mysterious ports and jargon. Here are some to look out for:
Ethernet ports: these exist to enable hard wired networking to the router itself in cases where a Wi-Fi connection is not possible.
SSID: this refers to “Service Set Identifier”, and is an alphanumeric set of characters that act as your Wi-Fi network’s identifier.
Telephone/internet port: this port allows your router to gain a hard wired (RJ-45) connection to the internet, usually through telephone lines.
WPS: this stands for “Wi-Fi Protected Setup”. It allows users faster and easier access to Wi-Fi, because they will not have to enter in the passkey once pushed.
LAN: a “Local Area Network” refers to a grouping of computers and devices being networked together, typically with cables and routers in a singular space – often a university, small company or even just at home.
WAN: when we take a series of geographically distributed LANs and connect them together with routers, this is what we call a “Wide Area Network”. This is useful for larger companies that want to connect all their office locations together.
WLAN: closely related to a LAN, “Wireless Local Area Networks” are LANs whereby users who are on mobile devices can connect through a Wi-Fi connection, allowing complete mobility and thus reducing the need for any cables.
Cyber safety with routers
It’s important to protect your router and Wi-Fi network from being compromised.
Change your router’s administrator password and make it strong
change the identifying SSID name so it doesn’t give away any details about the model of your router or who owns it
ensure encryption is turned on in the router settings: this will ensure the traffic travelling over your network is unreadable
change the passkey you enter in when connecting to Wi-Fi
ensure your router’s firmware – the software that’s hard coded into your router – is up to date.
Routers ensure your home and internet service provider can stay connected. Look after your router, and it will (hopefully) look after you.
Federal and state leaders have ramped up anti-terrorism provisions and plan to meet again soon for a broad review of the nation’s legal and practical security preparedness.
Malcolm Turnbull won support from the Council of Australian Governments for a tougher approach to parole and bail, where people have had terrorist connections.
States and territories agreed to strengthen their laws to ensure a presumption against granting bail or parole when people had “demonstrated support for, or have links to, terrorist activity”.
In the wake of this week’s Melbourne attack by Somali-born Yacqub Khayre, Turnbull demanded that state attorneys-general should sign off on parole applications when there was a terrorism link, rather than parole authorities.
Khayre, who killed the receptionist at a serviced apartment block before he was shot by police, had been out on parole, despite having a violent history and known past links to terrorism.
Turnbull said what COAG had agreed to was consistent with recent changes made by New South Wales.
He said if the change had been in place, it was inconceivable Khayre would have been given parole. The challenge of overcoming the presumption against release would be “very high indeed”.
The leaders also decided to hold a special COAG meeting as soon as practicable “to fully and more comprehensively review the nation’s laws and practices directed at protecting Australians from violent extremism”.
Victorian Premier Daniel Andrews, speaking at the joint news conference after the meeting, delivered a blunt warning that people had to expect curbs on civil liberties.
“I think we are at a point in our nation’s history where we have to give very serious consideration to giving law enforcement some tools and powers that they don’t enjoy today,” he said.
That might be unpopular with the civil liberties community, and involve curtailing the rights and freedoms of a small number of people, he said. But “that is what will be needed in order to preserve and protect a great many more”.
COAG had reports from ASIO, the Australian Federal Police, Turnbull’s cyber-security adviser, Alastair MacGibbon, and the counter terrorism co-ordinator, Tony Sheehan. The meeting had originally been expected to be dominated by a briefing from Chief Scientist Alan Finkel, who presented his report on energy security. But the recent events in Britain and Melbourne meant that terrorism was an equal focus.
Also on security, the leaders:
agreed to having security-cleared corrections staff as part of the counter-terrorism team in each jurisdiction. This is designed for better sharing of information;
agreed on the importance of close co-operation between all levels of government and with the private sector in protecting crowded public places;
discussed strengthening the security of public and private IT systems in the context of the WanaCry ransomware campaign, which locks computer files and demands payments to unlock them;
committed to governments continuing to work together and with industry to manage the security risks coming from foreign involvement in the nation’s critical infrastructure; and
ordered further work on a nationally consistent approach to organised crime legislation.
Turnbull stressed that when it came to overcoming the terrorist threat, “governments cannot simply set and forget”.
While these measures are a good start, more can be done. A focus on disruption, encryption, recruitment and creating counter-narratives is recommended.
Disruption: remove content, break flow-on
Disruption of terrorists on social media involves reporting and taking down of radical elements and acts of violence, whether that be radical accounts or posted content that breaches community safety and standards.
Taking down accounts and content is difficult as there is often a large volume of content to remove. Sometimes it is not removed as quickly as needed. In addition, extremists typically have multiple accounts and can operate under various aliases at the same time.
Encryption: security authorities need access
When Islamic extremists use encrypted channels, it makes the fight against terrorism much harder. Extremists readily shift from public forums to encrypted areas, and often work in both simultaneously.
Encrypted networks are fast becoming a problem because of the “burn time” (destruction of messages) and the fact that extremists can communicate mostly undetected.
The extremists set up a unique way of communicating within encrypted channels to offer advice. That way a terrorist can directly communicate with the Islamic State group and receive directives to undertake an attack in a specific country, including operational methods and procedures.
This is extremely concerning, and authorities – including intelligence agencies and federal police – require access to encrypted networks to do their work more effectively. They need the ability to access servers to obtain vital information to help thwart possible attacks on home soil.
It was once thought that the process of recruitment occurred over extended periods of time. This is true in some instances, and it depends on a multitude of individual experiences, personality types, one’s perception of identity, and the types of strategies and techniques used in the recruitment process.
There is no one path toward violent extremism, but what makes the process of recruitment quicker is the neurolinguistic programming (NLP) method used by terrorists.
Extremists use NLP across multiple platforms and are quick to usher their recruits into encrypted chats.
Key terms are always used alongside NLP, such as “in the heart of green birds” (which is used in reference to martyrdom), “Istishhad” (operational heroism of loving death more than the West love life), “martyrdom” and “Shaheed” (becoming a martyr).
If social media companies know and understand these key terms, they can help by removing any reference to them on their platforms. This is being done by some platforms to a degree, but in many cases social media operaters still rely heavily on users reporting inappropriate material.
Create counter-narratives: banning alone won’t work
Since there are so many social media applications, each with a high volume of material that is both very dynamic and fluid, any attempts to deal with extremism must accept the limitations and challenges involved.
Attempts to shut down sites, channels, and web pages are just one approach. It is imperative that efforts are not limited to such strategies.
Counter-narratives are essential, as these deconstruct radical ideologies and expose their flaws in reasoning.
But these counter-narratives need to be more sophisticated given the ability of extremists to manipulate arguments and appeal to emotions, especially by using horrific images.
This is particularly important for those on the social fringe, who may feel a sense of alienation.
It is important for these individuals to realise that such feelings can be addressed within the context of mainstream Islam without resorting to radical ideologies that leave them open to exploitation by experienced recruiters. Such recruiters are well practised and know how to identify individuals who are struggling, and how to usher them along radical pathways.
Ultimately, there are ways around all procedures that attempt to tackle the problem of terrorist extremism on social media. But steps are slowly being taken to reduce the risk and spread of radical ideologies.
This must include counter-narratives as well as the timely eradication of extremist material based on keywords as well as any material from key radical preachers.
The budget contains several measures designed to boost energy security, including:
A$90 million to expand gas supplies, partly through increased unconventional gas exploration
a potential Commonwealth buyout of an expanded Snowy Hydro scheme
up to A$110 million for a solar thermal plant at Port Augusta
monitoring of gas and electricity prices by the Australian Competition and Consumer Commission.
Below, our experts react to the measures.
Gas price problem far from solved
Roger Dargaville, Deputy Director, Melbourne Energy Institute, University of Melbourne
The budget contains a broad range of funding in energy-related areas, with a significant focus on gas resources, making A$78 million available for onshore unconventional gas exploration and reform in the gas markets, and A$7 million for studies into new gas pipelines to South Australia, from both Western Australia and the Northern Territory.
Interestingly, there is A$110 million in equity available (but not guaranteed) for a solar thermal plant in Port Augusta. And most notably, the government has proposed purchasing the Snowy Hydro Scheme from the New South Wales and Victorian governments, ensuring that the scheme stays in public hands.
The budget also includes A$13 million for CSIRO to improve energy forecasting tools, and A$8 million for the ACCC to investigate consumer energy pricing issues.
Overall, the budget highlights the government’s desire to do something about gas prices, but offers little to make a significant difference to a very difficult problem. Gas market reform and new pipelines are unlikely to reduce the exposure of the domestic market to price rises driven by international exports.
Importantly, there is little new funding in the budget directly relating to reducing carbon emissions and meeting the pledges made in the Paris Agreement (a 26-28% emission reduction relative to 2005 levels by 2030). Also noteworthy is the fact that funding for the carbon capture and storage flagship ceases in 2018-19.
‘On energy this budget is small fry’
Tony Wood, Energy Program Director, Grattan Institute
Government facilitation of gas development and beefing up the energy capability of the Australian Energy Regulator and the ACCC are simple logic, and the one- off payment to pensioners to help with electricity bills will be welcomed by them.
Major public funding for further feasibility studies is a little more questionable. If the gas crisis can’t galvanise support from pipeline companies and gas consumers for pipelines, why would governments reach a different conclusion?
And finally, one can only speculate as to why the federal government is contemplating buying out the NSW and Victorian governments’ share of Snowy Hydro. Presumably it is because the feds are concerned about securing support for the proposed expansion.
In summary, on energy this budget is small fry ahead of major policy decisions that rest on the forthcoming Finkel Review of the National Electricity Market next month, and the climate change policy review later in the year.
A step towards radical energy reform?
Hugh Saddler, Honorary Associate Professor, Centre for Climate Economics and Policy, Australian National University
Few announcements in the budget speech are more emblematic of complete policy reversal than the announcement that the Commonwealth would buy the shareholdings in Snowy Hydro Limited of the governments of NSW (58%) and Victoria (29%), to add to the 13% currently owned by the Commonwealth. This comes almost exactly 11 years after Prime Minister John Howard, responding to vociferous public opposition, pulled the plug on plans by all three governments for a public float of their entire shareholdings. What is more, Treasurer Scott Morrison has now announced that, once owned by the Commonwealth, Snowy Hydro would remain in public ownership.
This announcement of course accompanies the government’s Snowy 2.0 proposal, for a fivefold increase in the Snowy scheme’s current 500 megawatt pumped storage capacity (at Talbingo). This was used, after commissioning in 1974, to allow inflexible coal fired power stations to operate with constant output levels day and night, but is now almost never used. This presumably reflects commercial decisions by Snowy Hydro, as it trades in the National Electricity Market.
The rationale for Snowy Hydro 2.0 is to facilitate operation of a grid with a high share of renewable generation, by smoothing out variations in wind and solar supply. Does this announcement mean that the government envisages moving away from a strictly commercial approach to using the assets of the Snowy scheme? Is this a first step towards radical restructuring, or even dismantling, of the National Electricity Market?
Stronger legislation needed
Alan Pears, Senior Industry Fellow, RMIT University
The detailed A$265 million energy package includes a number of useful measures to strengthen the weak regulatory culture of the energy sector that has allowed our energy crisis to evolve. But it is still limited: strong legislative reform and active support of emerging competitors will also be needed. It is a modest investment compared with recent multibillion-dollar energy cost increases. If it is successful, it will deliver vary large net benefits to the economy by limiting energy price increases. Unfortunately, past efforts to fix the energy situation have largely failed to deliver real outcomes: we need clear objectives for outcomes, and a mechanism to implement contingency strategies if they are not achieved.
In a context of increasing urgency for stronger action on climate, and the reality that the global “burnable carbon” budget is very limited, investment to encourage more gas development seems misplaced. More emphasis on energy efficiency, renewables and smart energy systems would make much more sense. Energy efficiency already saves billions on energy costs and could save much more, while renewable energy is becoming cheaper than fossil fuel alternatives. They also help to achieve our climate targets. And fossil fuels are responsible for almost three-quarters of Australian emissions, so we need strong action to meet our international obligations.
The extension of the A$20,000 tax write-off for small business spending on equipment is a measure that, at least for small businesses, offsets a significant barrier to investment in energy efficiency. Firms will also be able to continue to claim the write-off to improve the economics of investments in on-site renewable energy and storage. Of course, the problem still remains for spending over A$20,000 by small businesses, and for larger businesses.
The energy security plan, which includes funding for ACCC to police energy industry behaviour is only a small step towards fixing the disastrous failures of energy policy and a transition to a 21st century energy policy framework. Much more will need to be done.
The government hopes to save A$632 million over five years from 2016-17 by strengthening penalties for non-compliance in Work for the Dole programs. Failure to meet requirements will result in suspended payments, and then escalating penalties.
Defence spending will rise to 2% of GDP by 2020-21 as the government increases spending by $50 billion over the forward estimates. The Australian Federal Police will receive $321.4 million over four years to support counter-terrorism, and operations against organised drug imports, violent criminal gangs, cybercrime and serious financial crimes.
Foreign aid has risen with inflation to $3.9 billion in the budget, and will rise again to $4.01 billion in 2018-19. However, it will remain at that level for the following two years.
The current broadcaster licence fees will be replaced with new ones, costing the government $414.5 million over the forward estimates.
The Conversation’s experts respond to these and other aspects of the budget below.
A populist attack on welfare recipients
Ben Spies-Butcher, Senior Lecturer in Economy and Society, Department of Sociology, Macquarie University
For a budget that has shifted considerable ground in areas like education and health – and, to a lesser extent, housing – it strongly plays to existing Coalition themes on welfare. These reinforce punitive welfare measures and the divide between the “deserving” and the “undeserving” poor.
There are some mildly positive reforms for older Australians – enabling access to state concessions – and some additional funds to assist single parents return to work. However, it is strongly punitive towards many of the most vulnerable.
The budget seeks to save $4 billion in new “integrity” and “mutual obligation” reforms. There is no funding to increase what is now a tragically low unemployment benefit (Newstart). Instead, there are new enforcement measures. These are largely constructed around drug and alcohol use. They include measures to force more recipients to access their money through a “cashless welfare card” that directs how people spend their money.
More surprisingly, there are harsh measures that include trials of drug tests, harsher breaching rules (that often leave recipients with no income), and even restrictions on accessing support for disabilities related to substance use.
That reflects a very strong populist attack on some of the most vulnerable. It also reaffirms an important political dynamic in Australia: when we frame action for everyone (as we do with health, education and housing), it is much easier to achieve equitable action. And when action is focused on the very poor, the political instinct is to attack.
Aid gets another cut, but not the unkindest
Robin Davies, Associate Director, Development Policy Centre, Crawford School of Public Policy, Australian National University
The Coalition once again cut overseas aid, as it has done now for several years running. However, the cuts in this budget will not be felt for another two years and are smaller in annual terms than those inflicted in the previous two years.
Aid spending will, as promised last year by Foreign Minister Julie Bishop, increase in line with CPI in 2017-18, rising from $3.8 billion to $3.9 billion, and also in 2018-19, when it will reach $4 billion.
For the following two years, though, the indexation of aid to CPI will be suspended and the resulting savings, $303 million, redirected to “other policy priorities” of the government. CPI indexation, according to the government, will resume thereafter.
Since coming to power in late 2013, the Coalition has fashioned five aid budgets, starting with its revision of Labor’s 2013-14 aid budget. In addition, it has now set notional bottom lines for the next three, out to 2020-21.
Over these aid budgets, aid has been or will be cut in real terms six times. The biggest cuts were in the last two budgets, 2015-16 and 2016-17, where aid was cut by 20.2% and 7.4% respectively.
After the reprieve in 2017-18 and 2018-19, when there will no real growth in aid, the cuts resume in 2019-20 and 2020-21 at the modest rate of 2.5% per year. The cumulative cut in aid from 2013-14 to 2020-21 will be 32.8%: basically one-third.
Australia’s aid as a proportion of its gross national income will stagnate at the historically low level of 0.22% for several years, and could fall to 0.2% by 2020-21. Australia’s aid generosity is now very far below the OECD average of 0.32%. We rank 17th among our peer countries on this measure.
It appears that The Australian was taking some dramatic licence when it reported, just before the budget, that:
The Turnbull government will divert foreign aid funds to boost Australia’s intelligence agencies as part of its escalation of the war on terror.
However, it had the basic story about right.
The Coalition pledged in late 2013 to increase aid in line with inflation. Last year, implying that it had finished cutting aid, it revived that pledge.
However, the Coalition has only maintained aid in real terms in two of eight years. While it cannot be claimed that aid is funding domestic policing or foreign intelligence, these are prominent among the “other policy priorities” the government is able to pursue by cutting aid.
No news is good news for defence
Andrew Carr, Senior Lecturer in Strategic and Defence Studies, Australian National University
Defence wasn’t expecting anything in tonight’s budget, and didn’t get it. The 2016 Defence White Paper and the 2016-17 budget both proposed minimal changes for defence in 2017-18. This was not because of a lack of support, but because the ten-year funding plan to raise the defence budget to match 2% of GDP by 2020-21 is largely backloaded, and because the Department of Defence is struggling to spend the funds it already has.
The 2017-18 budget papers’ main change was an efficiency reclaim of $304.1 million over the next four years, aimed at:
… reductions in the numbers of consultants and contractors used in Defence, as well as limiting the costs of non-operational overseas and business travel.
There is also $350 million in support for Veterans Health – an important and popular measure that was announced two days ago.
Freed of the need to devote new significant resources, the treasurer’s speech confidently reiterated the government’s commitment to the 2% target. While there are underlying issues with the notion of tying defence spending with the health of your economy — namely the worse the global situation, the easier the 2% target becomes – this stability itself is welcome.
Over the last decade, defence has seen significant promises of spending and some harsh cuts on budget night. So no news is good news.
Many will also be pleased to see the return to surplus remains a priority. While not a defence measure, this provides additional flexibility and resilience, which could be important for Australia’s security in the unpredictable Trump era.
Government levels the playing field for traditional media
Andrew Dodd, Program Director – Journalism, Swinburne University of Technology
There are no big shocks for the ABC in this budget, as the national broadcaster is only one year into its current round of triennial funding. SBS has won a cash injection to make up for lost advertising revenue, and broadcasters in general have won a reprieve from licence fees.
However, it’s women’s sport on pay TV that seems to have done best of all out of the 2017 budget.
The government has levelled the playing field for media companies that are struggling to compete against internet-based media by abolishing licence fees for broadcasters and datacasters that use broadcast spectrum. However, it is also broadening the revenue base through a new regime of apparatus licence fees for broadcasting spectrum. The change is estimated to cost $414.5 million over the forward estimates period.
The budget provides a “transitional support package” for those licensees who will be left worse off. The Treasury estimates state this:
… support package is estimated to have a cost of $24.8 million over the forward estimates period.
And the Australian Communications and Media Authority will receive a small cash injection to make the transitional support package work.
The budget is also providing $30 million over four years to support:
… underrepresented sports on subscription television, including women’s sports, niche sports, and sports with a high level of community involvement and participation.
In addition, $6 million will be spent over two years to support the development of Australian film and television content.
SBS will get $8.8 million in 2017-18 to:
… restore revenue that could not be raised due to the delayed passage of legislation, which would allow SBS further flexibility in the way it advertises.
Science flies under the radar
Les Field, Vice-President & Deputy Vice-Chancellor (Research), UNSW
Science has largely flown under the radar in a restrained budget, with no big spending measures and no major cuts apart from the university funding changes announced last week.
It is pleasing to see an astronomy partnership with the European Southern Observatory that will ensure Australia’s access to world-leading optical astronomy facilities, as well as new funding and administrative improvements in health and medical research, including the first investments from the Medical Research Future Fund.
It is also positive that the tried-and-tested CRC program will benefit from the government’s advanced manufacturing industry focus. But it was disappointing that the budget didn’t include any of the recommendations of the review of the R&D tax incentives.
There are small decreases in indexation of funding across the forward estimates equating to savings of several million dollars per year in agencies such as ANSTO and CSIRO, and funding programs such as the ARC and NHMRC. These will certainly be absorbed, but will add to the challenge of doing important science and innovation in areas of critical national importance.
The science sector will now look ahead to the 2030 Strategy for Science and Innovation, to be finalised by the end of the year, and the government’s response to the Research Infrastructure Roadmap – which will determine priorities for new capital investment.
John Rice, Adjunct Professor, University of Adelaide
As far as science is concerned the 2017 budget could be described as 2014 budget-lite. There is no vision for the role of science and technology in Australia’s future. Instead what stands out are the cuts to universities and to the CSIRO.
The National Innovation and Science Agenda (NISA) made the 2016 budget very exciting, even if a little disconcerting. There wasn’t much new money behind it and what there was largely reversed the disasters of 2014 and 2015.
But NISA was the kind of vision that we ought to expect from a budget, a vision for the economic direction of the country, one that can guide its productive capacity, meet current challenges and show the way to continuing prosperity.
Where did that vision go? There is none of it in the 2017 budget.
A less-than-enthusiastic electorate reminded politicians there needs to be more to an innovation-driven economy than everyone developing an app. Clearly the average citizen needed to understand where innovation-driven automation and other labour productivity improvements leave them in relation to earning a living.
If the 2017 budget does nothing else it confirms that the government has not risen to these challenges, and has lost its faith. In the face of the electoral blowtorch it has simply melted away.
There are a few modest and sensible initiatives that are a legacy of the 2016 rush of blood. Their gestation has been so long, like the activation of the Medical Research Futures Fund, that you would have expected an elephant rather than a mouse, but they are positive moves nonetheless.
What is seriously disappointing is the cutting of funding to the universities and to the CSIRO. Universities contribute probably more than three-quarters of Australia’s basic research. University research is seriously underfunded, and the underfunding is made up via transfers from other areas, particularly teaching. The cuts will make this worse, which leaves no room, let alone incentive, to engage university research and teaching more with industry.
What this budget represents for science is a retreat from any serious vision for an innovation-based economy, and a return to the unthinking cost cutting of the 2014-15 budgets.
The deadly terror attack in Brussels has again raised the issue of safety and security at airports. But expanding the “security bubble” around airports might not be the best response.
Europe barely had the time to recover from the horror of the Paris attacks last November before another of its capital cities was hit at its heart, presumably by ISIS terrorists.
In a devastated Brussels, investigations are running at full speed and authorities are already flooded with questions about the vulnerability of their critical infrastructure.
Unfortunately, this refrain seems to resurface every time a terrorist attack achieves its goals.
Traditionally, governments respond to these events by setting higher security standards. In this sense, modern airports epitomise the significant improvements that have been achieved in security over the past decades, especially after the September 11 attacks in the US in 2001.
Security screening has proved to be an effective deterrent against acts of terror such as hijacking and bombing. Following a procedure that is typical of security risk management, the security bubble around the vulnerable element – in this case, the airplane – has been progressively expanded in order to keep malicious individuals out.
The sterile area in a modern airport is among the most secure places on Earth. However, the terminal buildings can still be threatened, such as when the Glasgow airport was hit by a vehicle ramming attack in 2007.
In the aftermath, more stringent regulations were put into place to prevent vehicles from getting too close to the terminal buildings. Thus the security bubble was further expanded.
Even so, in 2011 two suicide bombers managed to kill more than 30 people at Moscow’s Domodedovo airport by walking into the baggage claim area and activating their Improvised Explosive Devices (IEDs). This was an act strikingly similar to what just happened in Brussels.
What should be our response to the latest attack? In the next few days we will probably hear more requests for strengthened airport security. Some might argue for a further expansion of the security bubble in order to cover the check-in area or entrance of the terminal buildings.
Would that be an effective solution? I don’t think so, for three main reasons.
First, the costs associated with the implementation of such a security system would largely outweigh the benefits; the bigger the area, the more expensive its protection.
Second, the associated operational disruptions would require some time (and a lot of patience) to be contained. When the perceived threats are low, people tend to consider security measures as an annoyance rather than a safeguard. Most of time, security awareness is not an ingrained mindset.
Third, and most important, the effectiveness of this new security system would still be questionable. Expanding the bubble would just move its boundaries outwards, with no guarantee that a new attack won’t happen on its edge.
For example, if security were increased before reaching the check-in at the airport, that might cause crowds to gather outside the main doors, and this would present a new target for terrorist attack.
So expanding the bubble would be just another symmetric response to an issue that has proven highly asymmetric.
This last point, in particular, emphasises that the Brussels’ airport attacks are not just a matter of airport security. They involve the need to reconsider our perception of modern security risks.
Where people gather
Airport security works very well these days. The problem is that, especially in some countries, any gathering involving more or less large crowds is a vulnerable target for terrorist attack.
Sport events, public transport, concerts, and even the queue in front of a museum, constitute a potential target for malicious individuals.
This requires governments to adopt a different approach to security. Security management needs to be performed at an asymmetric level, penetrating our societies and engaging terrorists at the individual level.
Random security checkpoints, enhanced intelligence networks and additional investments in street-level security technologies are some examples of asymmetric countermeasures that should be strengthened.
Technology, in particular, seems to be a powerful ally in our fight against terrorism. Especially when technological development is associated with the reduction of security costs.