The aims behind forcing car makers to close were superficial, and the ramifications will be dreadful.
Treasurer Joe Hockey will use the $200,000 he won in his defamation case against Fairfax Media today to buy exclusive access to Treasurer Joe Hockey, it can be revealed.
A range of intimate meetings will take place in VIP private boardrooms in Sydney and Canberra, with personal business ventures likely to be discussed.
“It’s not easy to get the ear of the Treasurer these days, so this windfall will definitely come in handy,” a spokesperson for Mr Hockey said today.
Mr Hockey assured the public that Mr Hockey’s opinions and requests would not have any influence whatsoever over Government policy or the Federal Budget.
Facing the prospect of financial ruin thanks to an out-of-control debt and deficit disaster, Greek Prime Minister Alex Tsipras today rang Australian Treasurer Joe Hockey, for guidance on making budget emergencies vanish.
“Australia was on the absolute brink just a few years ago, but they seem to be tracking quite well now. So I just wanted to get an understanding of some of the techniques they used to avert disaster,” Tsipras said.
Tsipras described the phone call as ‘confusing’. “He [Hockey] asked me to imagine a fire burning out of control, and then a fire brigade coming to get things under control. I’m not exactly sure what he meant. Maybe he’s offering to donate water to Greece? Maybe it’s a cultural thing”.
Mr Hockey was unavailable for comment.
Every year, the Government hands out around $6 billion dollars in fuel tax subsidies – and the coal mining industry is one of the largest recipients. It’s all in a report released this week by the Australian Conservation Foundation, which would make for some handy reading for our Treasurer who’s weighing up different options to save the Government money.
Think Mr Hockey should raise revenue by stopping handouts to billion-dollar mining corporations instead of creating $100k university degrees?
Join the Brighter Budget campaign to fight for fairer budget. www.getup.org.au/brighter-budget
The star chamber is in session. Any foot-draggers in the cabinet are due to be hauled before it if they fail to offer up 25% or even 40% cuts in time for the mass slaughter of the public sector next month. A wail of pleas for mercy has gone up to at least stop shortsighted purging that will end up costing the state more.
The recent cut in teenage pregnancy prevention programmes will add to future spending. Cuts in early mental health treatment will lead to more florid cases arriving in hospital. Cutting home care for the frail will send more into costly care homes. The arts can prove how every £1 the Arts Council spends generates another £2. Everywhere you turn, there are compelling arguments for upfront investment to save money later. But the Treasury is implacable, fingers in ears, sceptical about future savings that have a habit of vanishing into their departments. Myopia is part of Treasury DNA, pessimism about putative paybacks hardwired into its circuit board – now, more than ever.
But the Treasury should heed the voice in its own backyard, Revenue & Customs, which brings in the money, cash in hand, here and now: it could bring in enough to deal with the deficit. The World Bank estimates £70bn a year goes missing in Britain’s shadow economy – and its last report found tax evasion rising.
On average a senior tax inspector on £50,000 brings in about £1.5m, while lower-level inspectors on £25,000 bring in £300,000 each – in all 10 times more than is recouped by Department for Work and Pensions fraud-chasers. Yet Revenue staff have already been cut by a third to 68,000. How can they now lose another 25%? Top brass is fighting hard to resist it, suggesting a state-financed “investment plan” to recover lost funds.
Revenue has been accused of going soft on using the law: the Association of Revenue and Customs union reports HMRC brought 200 cases last year, while the DWP brought 9,000 for considerably less lucrative benefit fraud. Three huge firms recently settled out of court, but critics said all three would have paid more if these cases had proceeded. Each handed over at least £1.25bn in unpaid tax: one had set aside nearly twice as much as a contingency. HMRC settled these cases at the door of the court as they had each already drained £12m from its diminished resources. Now they say only high-risk big businesses are targeted. Overt organised crime such as VAT carousel fraud and carbon-trading fraud have “hoovered up our resources”, so most big evaders are under-scrutinised.
“There is a tipping point where without enough investigation, more of the fiddlers think they can fiddle more,” senior officials warn Osborne. A culture of honesty soon evaporates without the constant threat of arrest. HMRC tells how a recent crackdown on doctors spread the word fast: 10% came forward and confessed to cheating. Now the HMRC says bluntly: “We need to send more people to jail so people recognise that it is not worth cheating.” The honesty tipping-point comes when too many people know someone who is getting away with cheating: why pay if no one else does? Research shows the deterrent effect: every £1 detected deters another £1 in potential fraud.
HMRC says it needs resources for urgent scrutiny of the wealthy who are converting their income into capital to avoid the 50% income tax rate: City law partners are among the many awaiting investigation. The big four accountancy and consulting firms are still devising avoidance schemes, although they are required to register each new loophole. An honest rich man called a top tax inspector last month to report an approach by a big four firm offering a complex new capital gains tax wheeze involving “rescindable contracts”.
A brisk official call sent the firm into a “flat spin”; it subsequently withdrew it. But the dangerous impression is that the taxman is always a plod behind, short of resources, depending on tip-offs and settling out of court to save money. The National Audit Office’s report says “lack of funding” is preventing efficient debt recovery, with a 17m backlog of PAYE cases. Some £26.1bn is owed in back PAYE, according to tax expert Richard Murphy: “They haven’t enough people to get on the phone and knock on the door to get the money in.”
The Guardian’s Tax Gap report showed the vast scale of corporation tax avoidance. Meanwhile, a meagre 100 HMRC inspectors do their best to police the entire country’s employers for compliance with the minimum wage.
Britain is historically a nation of relatively compliant taxpayers, but that is changing. Lord Oakshott, the Lib Dem Treasury spokesman, told the Lords: “Tax-dodging in Britain is a deep-seated, pervasive, pernicious disease … Highly organised, aggressive, abusive tax avoidance which used to be a marginal and rather spivvy operation, that was frowned on by the main banks and shunned by top accountants and lawyers who were mainly concerned with reputational risk, has now mushroomed out of all recognition.”
He questions why the government is willing to give the big four and City law firms state contracts while they earn fortunes helping to deplete the Treasury. Until its last year Labour turned a blind eye to tax havens and other dodges; can the coalition do better? The BBC’s Robert Peston points out in his blog that the Conservative party is exceptionally beholden to donors from high finance and hedge funds. Sir Philip Green’s bizarre appointment as an anti-waste tsar undermined the coalition’s promise to “actively examine tax avoidance”.
HMRC top brass fear George Osborne needs to prove he is cutting his own department as savagely as all others. But cutting any further on tax collection would show beyond doubt that government cuts are ideological and totemic, and not based on sound economics.
After the Institute for Fiscal Studies showed cuts falling hardest on the poor, the coalition could restore some credibility by ensuring at least that taxes are collected fairly from all, and not just paid by Leona Helmsley’s “little people”. Why not deny state contracts to the consultants who help the wealthy drain the Treasury? And strengthen HMRC so inspectors can put the fear of jail into tax-dodgers. Conservatives could find it easier than Labour to launch an unflinching moral assault on the greedy culture of evasion, avoidance, off-shoring and cheating that has become poisonously socially acceptable.
PM moves vote forward shortly after Malcolm Turnbull emphasises the importance of keeping it on Tuesday, angering numerous MPs
Tony Abbott has brought forward the vote on the leadership spill motion by one day, shortly after Malcolm Turnbull emphasised the importance of keeping it on Tuesday.
The decision to rush the vote angered numerous MPs, including NSW senator Arthur Sinodinos, a former assistant treasurer and the chief of staff to John Howard.
Time is running out for Tony Abbott’s chaotic and dysfunctional government
Lenore Taylor political editor
The backbench MP for Brisbane, Teresa Gambaro, warned against an “internal climate of fear and intimidation” and said: “We cannot govern the country through belligerence and hubris.”
The prime minister announced he had asked the chief government whip, Philip Ruddock, to call a special party room meeting for 9am on Monday to consider the spill motion.
The spill motion brought by two West Australian backbenchers was originally expected to be considered at Tuesday’s regular party room meeting, the first of the year.
Abbott said it was “important to end the uncertainty at the very beginning of the parliamentary sitting week” and deal with the spill motion and “put it behind us”.
“The normal party room meeting scheduled for Tuesday morning will also go ahead in the usual way,” he said.
“The only question – the only question – for our party is do we want to reduce ourselves to the level of the Labor party in dragging down a first-term prime minister,” he told reporters in Sydney on Sunday.
“Obviously, I’ve been talking to many colleagues over the last few days and my very strong sense is that we are determined to do what we were elected to do, to clean up Labor’s mess and to give our people the economic security and the national security that they need and deserve.”
Abbott left the media conference without taking any questions from reporters.
Bringing the vote on early raised the possibility of some people not being able to make it to Canberra in time. Ruddock said 101 of the 102 Liberal party room members were confirmed to attend, while he was checking the status of the final person.
Earlier on Sunday, Turnbull said Abbott had “shown great respect for the party room by saying that the meeting will be on Tuesday” rather than rushing it forward to Monday.
“He knows members coming to Canberra who will have been getting lots of phone calls and talking to their constituents, many of which will be uncertain, will want to have the opportunity to sit down and talk to each other in the nation’s capital in the course of that Monday leading up to the Tuesday,” the communications minister and former Liberal leader said.
Turnbull’s supporters have indicated he is likely to run for the top job if the party room passes the initial spill motion declaring open the leadership positions.
Turnbull said on Sunday he would vote against the spill motion because that was what was expected of all cabinet members, but refused to rule out being a contender if the motion succeeded.
“It’s very important to remember that the leadership of the Liberal party is, as John Howard said, the unique gift of the party room,” he said. “Now, what that means is that members of the party room have got to have the time to talk to each other, backbenchers talking to each other, backbenchers talking to frontbenchers, frontbenchers talking to frontbenchers and so forth.”
In an apparent reference to Abbott supporters fronting the media to push their case, Turnbull said it was important to talk to colleagues directly “rather than, you know, giving them advice or lecturing them or trying to communicate with them through the media, through the megaphone of the media”.
Turnbull also praised Abbott for suggesting the spill motion would be voted on through a secret ballot, saying this would allow the party room “to make its own decisions without any pressure, without people feeling that if they go one way or another, they’ll be subject to some sort of recrimination or vindictiveness or something like that”.
Gambaro issued a strongly worded statement after Abbott’s announcement.
“We cannot govern ourselves in an internal climate of fear and intimidation,” the Brisbane MP said. “And that is the unacceptable situation we have endured for the past five years.
“Equally we cannot govern the country through belligerence and hubris. In our parliamentary democracy, MPs, as elected officials, have the individual honour to serve the people of their respective electorates and as such deserve to have their voices heard. This is the path to good government.”
The manoeuvring came as a new poll suggested a leadership change would boost the Coalition’s standing with voters, but not would not place the government in an election-winning position.
The Galaxy poll for News Corp showed Labor was leading the Coalition 57% to 43% after preferences. Labor’s lead would shrink to 51% to 49% under Turnbull, the poll suggested.
In another scenario put to respondents, with the Coalition led by Julie Bishop, Labor’s lead would be 53% to 47%.
The Galaxy poll also asked whether Abbott should stand down, with 55% of respondents saying that he should and 35% disagreeing.
Senior ministers moved on Sunday to quash speculation Abbott could strike a peace deal by dumping Joe Hockey as treasurer and placing Turnbull in the key economic role.
News Corp reported that several cabinet ministers had urged Abbott to replace Hockey in the role. But the finance minister, Mathias Cormann, told the ABC’s Insiders program: “Joe Hockey has the full and complete support of the prime minister. That story is wrong.”
The Coalition’s Senate leader, Eric Abetz, emphatically rejected claims he had suggested the treasurer should be replaced. “I continue to support the leadership team and I continue to support all of my ministerial colleagues, including the treasurer,” he said.
The News Corp executive chairman Rupert Murdoch called on the Liberal party not to change leaders. Murdoch tweeted on Sunday: “Abbott, good guy, not perfect but no case for rebellion. Remember last one gave us Gillard disaster. Country still paying for it.”
— Rupert Murdoch (@rupertmurdoch) February 7, 2015
Abbott, good guy, not perfect but no case for rebellion. Remember last one gave us Gillard disaster. Country still paying for it.
Abbott has brought forward the spill motion to Monday but said the normal party room meeting scheduled for Tuesday morning would also go ahead in the usual way.
LAST Thursday, Sheldon Silver, the speaker of the New York Assembly for the past 20 years, was arrested and charged with mail and wire fraud, extortion and receiving bribes. According to Preet Bharara, the federal prosecutor who brought the charges, the once seemingly untouchable Mr. Silver took millions of dollars for legal work he did not do. In exchange, he used his official power to steer business to a law firm that specialized in getting tax breaks for real estate developers, and he directed state funds to a doctor who referred cases to another law firm that paid Mr. Silver fees.
Albany is reeling, but fighting the kind of corruption that plagues not only New York State but the whole nation isn’t just about getting cuffs on the right guy. As with the recent conviction of the former Virginia governor Bob McDonnell for receiving improper gifts and loans, a fixation on plain graft misses the more pernicious poison that has entered our system.
Corruption exists when institutions and officials charged with serving the public serve their own ends. Under current law, campaign contributions are illegal if there is an explicit quid pro quo, and legal if there isn’t. But legal campaign contributions can be as bad as bribes in creating obligations. The corruption that hides in plain sight is the real threat to our democracy.
Think of campaign contributions as the gateway drug to bribes. In our private financing system, candidates are trained to respond to campaign cash and serve donors’ interests. Politicians are expected to spend half their time talking to funders and to keep them happy. Given this context, it’s not hard to see how a bribery charge can feel like a technical argument instead of a moral one.
The former governor of New York David A. Paterson, for example, said that he had trouble understanding where the criminality lay in the allegation that Mr. Silver accepted payments from law firms for referrals, including referrals by a doctor to whom Mr. Silver funneled state health research funds. Mr. Paterson said, “in the legal profession, people refer business all the time. And theoretically, as a speaker, you could do that as well.”
The legal shades into the illegal. The real estate developers represented by the law firm that allegedly shuttled payments to Mr. Silver for fake legal services were also major campaign contributors. One developer mentioned in the charges gave more than $10 million to political campaigns in the past decade, including $200,000 to Mr. Silver and his political action committees.
The structure of private campaign finance has essentially pre-corrupted our politicians, so that they can’t even recognize explicit bribery because it feels the same as what they do every day. When you spend a lifetime serving campaign donors, it may seem easy to serve them when they come with an outright bribe, because it doesn’t seem that different.
Mr. Silver retained such tight control over budgets and lawmaking in Albany that his staffers were regarded as more powerful than most elected representatives. As a Democrat who cares about education, I can’t say that I loved seeing Mr. Silver, a great public school advocate, in handcuffs. For others, there’s glee in seeing the perp walk. But one high-profile indictment does not represent the dawn of a new democracy.
We’ve known for some time that the Good Ship Abbott was in trouble, and with MPs now seemingly jostling for position could it be a case of man overboard? Paula Matthewson writes.
That sound you hear is the whisper of Liberal Party MPs carefully shuffling around a Prime Minister who’s taken on water and is listing dangerously.
They’re hoping to avoid being dragged down with him into the dark waters of electoral opprobrium and are eyeing those who hope to replace the PM as potential lifeboats.
We’ve known for some time that the Good Ship Abbott was in trouble, partly because it was constructed using shonky policies and shattered expectations, but also because it was steered with the reckless abandon that comes from political hubris mixed with a misguided sense of entitlement.
The summer break provided an opportunity to put the ship in dry dock, replace the defective policies and adjust the political navigation system. At least that was the point of Tony Abbott’s “reset” press conference and the ministry reshuffle conducted late last year.
However, it would appear that no such reset actually took place. Instead Abbott pressed on, continuing to make poor political decisions like the no-media visit to Iraq while bushfires raged in three Australian states, and even worse policy decisions like the unannounced $20 cut to the Medicare rebate.
Now a leak about the Medicare cut from the Cabinet’s expenditure review committee over the weekend suggests hope is fading fast for HMAS Abbott to be successfully refloated, and that the decks are being cleared for a regime change.
Ministers are already jostling to be in the new leadership line-up, and the weekend’s leak flags that Joe Hockey, the one-time heir-apparent but now only the beleaguered Treasurer, wants to be back in contention. It would also appear Hockey is unafraid to tarnish the PM’s reputation while seeking to rehabilitate his own.
According to a newspaper report of the leak, Hockey and then health minister Peter Dutton “opposed the move during a ‘heated’ exchange with the Prime Minister” but the PM insisted on the $20 cut the Medicare rebate for short GP consults, which apparently were “developed by the Prime Minister’s Office and then costed by the Department of Finance and Health”.
This isn’t the first time efforts have been made to shift responsibility for the budget from Hockey to Abbott, particularly by drawing attention to the PM’s insistence on chairing every meeting of the Expenditure Review Committee as it put the budget together.
One well-briefed commentator wrote around that time:
The core problem with the budget is the design, and responsibility for design faults ultimately lands at the feet of the Prime Minister … Abbott used his authority to take charge of the Government’s first budget, yet he seems to be using his political skills to sidestep responsibility, leaving ownership of the document with Hockey.
Since then, the Abbott Government has begun to leak like a scuttled dinghy. Political observers have been treated to a flotilla of leaks to the media, seemingly to position ministers impatient for promotion in the best possible light, or put the case for one ambitious backbencher over another.
It would seem not even the Prime Minister’s Office has been above such shenanigans, appearing to provide leaks to the media at various times to rein in potential leadership contenders such as Foreign Minister Julie Bishop.
Another recent leak, aimed at the Treasurer and suspected to also have come from the Prime Minister’s Office, was described by one press gallery stalwart as exposing the disunity, paranoia and distrust that currently exists at the highest levels of the Government.
This latest leak in Hockey’s favour won’t change the perception of omnishambles, nor will it dissuade voters from booting out the Abbott Government as swiftly as the Rudd-Gillard one if the rot is not soon arrested.
This certainty is what occupies the minds of the shuffling MPs.
The only factor that remains in Abbott’s favour is that there’s no clear front-runner to replace him. Traditionally the leadership team is agreed mostly between NSW and Victorian MPs because combined they have the most votes in the party room. Hockey re-entering the field complicates matters, but at least gives NSW MPs another option other than the invidious choice between the left’s darling, Malcolm Turnbull, and the hard-right’s poster boy, Scott Morrison. Victoria doesn’t have a leadership contender but could supply an able deputy.
And at this point it’s anyone’s guess what deals the Western Australians might do with NSW or Victorian MPs to put Bishop into the top job.
What is clear is that now Abbott has apparently single-handedly botched the “reset”, he’ll likely be deemed unseaworthy and slated for a visit to the ships’ graveyard, perhaps by mid-year.
Meantime we can expect to see a veritable ocean of leaks to the media and other forms of self-promotion as the contenders set their spyglasses on the leadership and set sail for what is guaranteed to be a deceptively perilous journey.
While we were all mesmerised by the tragic and horrific events unfolding in yesterdays siege at the Lindt cafe, Treasurer Joe Hockey and Finance Minister Mathias Cormann quietly slipped in to deliver the midyear budget update.
It was also horrific, but in a different sense. Horrific in that 16,500 people will lose their jobs due to the government’s savage cuts (in their vain attempt to deliver a surplus that they never will), and for the raft of essential services that will be scrapped.
The cuts announced by Hockey and Cormann have received minimal coverage in the mainstream media. I found the list on a Facebook page called Where’s My Ostrich, and I credit them for this extensive (and it seems secretive) list.
- Cuts the Australian Government Solicitor
- Cuts the Telework Advisory Panel
- Cuts the Protection Zone Committees
- Cuts the Forces Entertainment Board
- Cuts the Antarctic Research Assessment Committee
- Cuts the Australian Antarctic Names and Medals Committee
- Cuts the Biological Diversity Advisory Committee
- Cuts the Climate Adaptation Outlook Independent Expert Group
- Cuts the Australian Sports Anti-Doping Authority Advisory Board
- Cuts the Health and Hospitals Fund Advisory Board
- Cuts the National Advisory for Tertiary Education, Skills and Employment
- Cuts the Inspector of Transport Security
- Cuts the Reconstruction Inspectorate
- Cuts the Development Allowance Authority
- Abolishes the Artbank Advisory Committee
- Abolishes the Australian and New Zealand Standard Diagnostic Procedures Working Group
- Abolishes the Benchmarks Working Group which monitors acute hospital performance
- Abolishes the Department of Agriculture – Live Animal Export Division – Industry
- Government Implementation Group
- Abolishes the Forestry and Forest Products Committee
- Abolishes the National Surveillance and Diagnostics Working Group
- Abolishes the Laboratories for Emergency Animal Disease Diagnosis and Response Working Group
- Abolishes the National Strategies Working Group
- Abolishes the New Test Evaluation Working Group
- Abolishes the Rabies Preparedness Working Group
- Abolishes the Subcommittee on Animal Health Laboratory Standards
- Abolishes the Australian Defence Force Financial Services Consumer Council
- Abolishes the Department of Defence Diversity Advisory Group
- Abolishes the Committee which was overseeing reform to the repair and maintenance of the Navy’s ships
- Abolishes the Department of Defence CEO’s round table
- Abolishes the Standing Council on School Education and Early Childhood Joint Working Group to Provide Advice on Students with Disability
- Abolishes the Fair Work Building and Construction Independent Assessor
- Abolishes the National Precincts Board
- Abolishes the Pharmaceutical Industry Working Group
- Abolishes the Bureau of Resources and Energy Economics Advisory Board
- Abolishes the Inter-Jurisdictional Working Group
- Abolishes the Local Government Ministers’ Forum
- Abolishes the National Disaster Recovery Taskforce
- Abolishes the Urban Policy Forum
- Abolishes the Australian Council of Local Government
- Abolishes the Official Establishments Trust
- Abolishes the ANZAC Centenary Public Fund Board
- Abolishes the Australian National Memorial New Zealand Advisory Panel
- Abolishes the Community Nursing Clinical Advisory Committee
- Abolishes the eHealth Technical Advisory Group
- Abolishes the Gulf War Study Advisory Committee
- Abolishes the Medicines Advice and Therapeutics Education Services Practitioner Reference Group
- Abolishes the Medicines Advice and Therapeutics Education Services Veterans Reference Group
- Abolishes the Medicines Advice and Therapeutics Education Services Writing Group
- Abolishes the Peacekeepers Study Advisory Committee
- Abolishes the research working group
- Dismantles the Vietnam Veterans Education Centre
- Abolishes the Strategic Cross-sectoral Data Committee for Early Childhood, Education and Training
- Dismantles the Australian Qualifications Framework Council
- Wipes out the Education Investment Fund Advisory Board
- Cancels the COAG Select Council on Workplace Relations
- Abolishes the Antarctic Science Advisory Committee
- Abolishes the Bureau of Meteorology Water Accounting Standards Board
- Abolishes the COAG Standing Council on Environment and Water
- Disbands the Commonwealth Environmental Water Stakeholder Reference Panel
- Abolishes the Emissions Intensive – Trade Exposed Expert Advisory Committee
- Abolishes the Fuel Standards Consultative Committee
- Disbands the Iconic Sites Taskforce
- Gets rid of the Indigenous Water Advisory Committee
- Abolishes the National Landscapes Reference Committee
- Disbands the National Marine Mammal Advisory Committee
- Abolishes the National Marine Mammal Scientific Committee
- Disbands the Australia Awards Board
- Abolishes the Tourism Quality Council of Australia
- Disbands the Anti-Doping Research Panel
- Disbands the Department of Human Services Council on Strategy and Innovation
- Abolishes the Gas Market – Industry Reference Group
- Abolishes the Technical Advisory Committee for the Coal Mining Abatement Technology Support Package
- Annuls the Infrastructure Coordinator
- Silences the Northern Australia Indigenous Experts Forum on sustainable Economic Development
- Terminates the Expert Advisory Panel on Northern Australia
- Abolishes the Marine Council
- Dismantles the Northern Australia Ministerial Forum
- Annuls the Regional Australia Standing Council
- Cancels the Australia in the Asian Century Advisory Board
- Abolishes the First Peoples Education Advisory Group
- Cancels the Indigenous Development effectiveness Initiative Steering Committee
- Abolishes the Aged Care Standards and Accreditation Agency Ltd
- Cancels the Aged Care Planning Advisory Committee
- Annuls the Aged Care Reform Implementation Council
- Cancels the Healthy Life Better Ageing Committee
- Silences the Minister’s Dementia Advisory Group
- Abolishes the National Children and Family Roundtable
- Silences the National Injury Insurance Scheme Advisory Group
- Abolishes the Australian Financial Centre Taskforce
- Abolishes the Current and Former Members of the ADF Emerging Issues Forum
- Cancels the National Health, Aged and Community Care Forum
- Abolishes the Operational Working Party which advises government on the needs of the ex-service community
- Cuts funding for the National Trade Cadetships programme
- Ceases payments to apprentices under Support for Adult Australian Apprenticeships program
- Abolishes the Australian Workforce and Productivity Agency
Horrific, don’t you think?
Tony Abbott and Joe Hockey have been at pains to tell us it’s all about “jobs and growth”. Now that we have “a number” the economies of the world will be saved. But how do we intend to reach this magical figure of “2% growth above what is expected”?
The government’s action plan has listed five “key commitments” to underpin its pledge.
The first key commitment to expanding economic activity is infrastructure spending, including its “asset recycling initiative” – encouraging state governments to privatise assets and then plough the proceeds into new projects.
Considering we are selling the profitable Medibank Private to invest in railways for dubious Indian coal mining ventures, this seems an avenue to privatising profits and socialising losses. No doubt some Liberal Party donors will do well out of it.
“Employment welfare reforms” is ranked as the No 2 commitment, and notes that the changes will “strengthen participation and activation strategies”.
By cutting payments entirely to some unemployed and requiring jobseekers to search for more jobs to qualify for payments, the government argues it will spur the unemployed to look for work rather than live on welfare, thereby boosting economic activity.
But that boost can only come if there are jobs for the unemployed to get and there seems little in the way of a plan to create jobs beyond “axe the tax” and “build some roads”.
Anglicare Australia commissioned a report called “Beyond Supply and Demand” which rubbished the Abbott government’s treatment of the long-term unemployed, calling for a “life first” rather than a “work first” approach to end joblessness.
Anglicare executive director Roland Manderson said
“It’s a problem if the public debate hinges on an assumption that people can just try harder and get work, that’s not true. What is true is that people can get work and develop really great work but you need to put that investment in at the front end. The problem with the ‘earn or learn’ (budget measure) is it makes the assumption that any training will do the trick. It’s disempowering to train people who might find work for a short time, but then are out of work again because they haven’t worked through their life barriers.”
Labor assistant treasury spokesman Andrew Leigh said cuts to welfare payments such as the unemployment benefit, family tax benefits and the pension would act to suppress economic growth.
“If you produce a budget that reduces the income of the poor, it has an impact on consumer demand because they spend everything they’ve got,” he said. “That will detract from economic growth.”
The other key commitments are “cutting red tape”, “contributing to global trade liberalisation” and “creating self-reliant industries”.
If one thing came out of the many millions spent on inquiries into the Home Insulation Program, it was to underline the dangers of “cutting red tape” and oversight.
The most obvious result of this commitment is to fast track development and mining approvals without regard to environmental impacts, and to remove rights of appeal.
The detail of the China Free Trade Agreement, or Memorandum of Understanding to be more accurate, is yet to be released so it is difficult to assess its impact but one concession we made was to allow Chinese companies to bring in their own workers. I’m not sure how selling our assets to foreign companies who send their profits back home and who employ foreign workers will actually boost our economy.
Andrew Robb also admitted that Treasury has not done modelling on the overall impact of this agreement and he does not know how it will affect our balance of trade.
The commitment to “create self-reliant industries” seems to fly in the face of Abbott’s staunch resistance to reducing fossil fuel subsidies. And how does Newman’s Galilee railway and Hunt’s Emissions Reduction Fund fit into that plan?
As was forcibly pointed out over the weekend, renewable energy is an industry of the future, but rather than taking advantage of the billions available for investment in this area, Abbott seems determined to kill off this industry and the tens of thousands of jobs that go with it, presumably because it offers competition to those humanitarian coal producers and users.
Which seems strange as the Coalition’s plan for more jobs is based on improving productivity and competitiveness.
Across the globe, mining productivity has declined by 20 per cent over the past seven years, despite the push for increased output, and declining market conditions.
Efficiency in the Australian mining industry has received a stern rebuke from PricewaterhouseCoopers (PwC), rated as one of the least productive regions in the world.
The damning report ‘Mining for Efficiency’ states that Australia is the second least productive mining region in the world, with Africa taking the wooden spoon, and North America beating Australia on all classes of equipment.
The report claims there is an inherent conflict between the productivity plans of the mining boom which were based on increased volumes, and plans based on cost reduction which are now coming to the fore of business strategy.
Despite claims by industry lobby groups that high wages in Australia will impact on our competitiveness, results actually show “significant divergences” between mines in close proximity chasing the same minerals under the same industrial relations conditions.
Equipment and the way it is used is a key focus of the report, which shows that productivity differences between the best and worst performing mines are stark, with some of the best practice outputs coming in at more than 100 per cent greater than the median performers.
“The popular tagline of the mining sector is that the miners are serious about productivity,” PwC states.
“We suggest that most are reducing costs and increasing volumes but there are precious few with legitimate claims to improving core productivity in their open cut operations.”
Comments in the report echoed the new fashion for cost reduction employed by the major miners who continue to sell off ‘non-core’ assets, such as BHP Billiton had done earlier this year with Nickelwest operations.
“Miners are banking the first available dividend, selling or segregating mines deemed too hard to fix and tempering expectations of further productivity gains by citing a combination of labour laws, high costs, regulatory hold ups and mine configuration constraints,” Lumley said.
And then this morning, we are hit with the news that the axe has fallen again at Australia’s research agency, the CSIRO, with another 75 researchers retrenched across the organisation’s future manufacturing, agriculture and digital productivity programs.
All three affected areas belong to the CSIRO’s flagship “impact science” division, set up in 2003, which aims to partner with universities and the private sector to bring “large scale and mission directed science” to bear on major national priorities.
Future manufacturing research will be hardest hit, losing up to 45 full-time positions, including in advanced fibres, biomedical manufacturing and high-performance metals.
Among the work to which future manufacturing research scientists have contributed is state-of-the-art ceramic body armour for Australian soldiers, the southern hemisphere’s first Arcam additive manufacturing facility, which enables 3D printing of metals, and a spray-on topcoat for aircraft.
But this shouldn’t surprise us from a government who thinks coal is the industry of the future and a Treasurer who thinks that climate change is “absolutely not” an impediment to economic growth
Within hours of the news that Gough Whitlam had died, age 98, the mantra of ‘hopeless economic management’ started to flow.
According to those who clearly loathe Whitlam and anything vaguely socially progressive, Fairfax and The Australian had stories where the Tea Party faithful in Australia wrote or were quoted saying, Whitlam was the worst Prime Minister Australia had seen, he was economically damaging, that he set up the culture of entitlement especially for health and university education, that he created the mentality of the dole bludger and so on.
I am sure you get the drift.
The criticisms were, as far as I can tell, nothing to do with managing the macroeconomy or the budget. They were focussed on the perception that he allocated too much government money to healthcare, education and the aged. That may or may not be the case, but no one has said why it matters or indeed, by how much the spending was excessive and exactly why it remains a problem.
No one has articulated and demonstrated why the clear and dramatic lift in government spending some four decades ago is so damaging today. Nor have they shown how those criticisms have manifest themselves into things Australia has not experienced such as prolonged sluggish economic growth, falling living standards, problems on the budget, chronic unemployment or whatever.
No substance, only high brow fact-free opinion and zealotry.
The scathing criticisms of Whitlam and his legacy need to be put in some context.
Since his sacking, some 39 years ago, the Coalition parties have been in power for about 20 years, so one would have thought that if the Whitlam legacy was so bad, so damaging, so horribly yukky, that Fraser’s seven years, Howard’s 11 and a half years and Abbott’s 13 months in office would have, in at least one of their budgets, scaled back, reversed and once and for all ended, the Whitlam economic legacy.
On that score, it is interesting to note that in 1975-76, government spending to GDP was 24.3 per cent. The Fraser government saw this rise to 25.8 per cent of GDP by 1982-83. (Not those bloody facts again!)
With Mr Hockey’s budget less than six months ago, government spending to GDP, even allowing for the cuts that were announced, was estimated to be 25.3 per cent of GDP in 2014-15 and at or above 24.7 per cent of GDP in every year of the forward estimates. So Abbott and Hockey’s small government budget had spending a bit lower that Fraser, but still above the ‘big spending’ Whitlam budgets.
That’s the first point to note.
Could it be the electorate like the government to have some role in health, education, aged and disability care?
My guess is ‘yes’. Look at the public’s reaction to the Abbott government’s proposed Medicare co-payment, university fee hikes and cuts to unemployment benefit eligibility.
It is also interesting to note that in the early 1970s, government spending in the US rose sharply, by around 3 per cent of GDP in about half a decade. Surely Gough did not influence Nixon and Ford to spend, spend, spend? Maybe the social changes of the 1960s and 1970s in the western world saw the electorate demand, and get, a greater role from government.
And a few final fiscal facts:
Whitlam government left zero net government debt to Fraser – in June 1976, net debt was minus 0.4 per cent of GDP (that is, the government had financial assets). When The Fraser government lost in 1983, it had boosted net government debt to 7.5 per cent of GDP.
When Whitlam left office, the tax to GDP ratio was around 20 per cent. The Howard government got this up to an all time record tax take exceeding 24 per cent of GDP (in today’s dollars, 4 per cent of GDP is a stonking $65 billion per year).
Even Mr Hockey’s ‘low tax’ budget has the tax take at 23.2 per cent of GDP by 2017-18, some 3 per cent of GDP above anything Whitlam achieved.
Small government, big government?
It is funny how facts can smash perceptions.
Footnote: All the data on spending and tax are from Mr Hockey’s budget papers.