Afternoon politics
I am finishing a little earlier today, good blogans, because it is not an actual sitting day. I also need to finish adding to my Chipp budget folder, otherwise known as Keeping the Bastards Honest. In the lock-up, you need all the research material you can get, lest you forget where the bodies are buried.
But today, though, here is a short summary of the goings on.
- The LNP senator and middle bencher Zed Seselja suggested that, if the US left the Paris climate agreement, things would change. That might mean something for Australian government energy policy or it might not.
- The last tidbits of budget ahead of official release included $321m for the Australian federal police and a Productivity Commission review on the banking competition. There were strong hints, via the Financial Review, on allowing bank customers to move banks more easily, ie transferable accounts.
- Bill Shorten copped flak for a new Labor ad for marginal seats that puts Australians first. The problem is the group of ordinary Australians looked pretty white. Anthony Albanese, who is on the national executive, said he had not seen the ad but it was “a shocker” and should not be run.
That’s it from me. The blog will run tomorrow first thing and parliament will be sitting from midday. There will be party room meetings tomorrow morning. Remember Tony Abbott has already warned his leadership that he will raise his opposition to the school funding policy. What could go wrong?
Good night and see you in the morning.
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The budget think pieces are coming thick and fast.
The independent economist Saul Eslake has written a longer comment piece at the Conversation.
He reminds readers that the “temporary deficit repair levy” will lapse on 1 July. This was the 2% surcharge on the top marginal personal income tax rate, which was the only significant taxation measure by the Abbott government.
He also goes into the good debt v bad debt debate. This is the distinction that the treasurer himself has drawn, allowing him to borrow for infrastructure, without leading to the terrible outcome of the formerly known debt and deficit disaster.
Eslake makes a number of points:
- Abbott says he was the infrastructure prime minister but spending declined on his watch.
- That’s because Abbott did not accept the advice of people who know stuff like RBA governor Glenn Stevens, the IMF, the OECD and others. Their advice said that, while interest rates are low, well-targeted infrastructure building is the goods.
- Morrison is expected to outline additional borrowing for infrastructure. Some, such as the second airport, will pass the economists’ ruler, others will not.
This is what you need to know about the change in reporting of good debt/bad debt by Eslake:
But the government will seek to quarantine this “good” debt from detracting from its policy and political goal of returning the budget to surplus. It will do this by focusing attention on the net operating balance or difference between revenues and operating expenses – as state and territory governments and the New Zealand government have done in their budgets for decades.
Indeed, by focusing on this measure, the budget might be able to proclaim a return to surplus in 2019-20, a year earlier than projected for the underlying cash balance.
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The Australian Medical Association president, Michael Gannon, has been doing interviews regarding the expected lift in the Medicare rebate freeze.
A crossbench senator:
.@amapresident Stop pretending you are interested in "investment". You're a union leader and you want more money spent on your members. https://t.co/2Sb02znCTx
— David Leyonhjelm (@DavidLeyonhjelm) May 8, 2017
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Not only do they excel behind a camera, they are naturals in front of the lens.
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The other funding promised, which can be filed in the “about time” basket, is $220m for veterans’ mental health, suicide prevention and transitioning back to civilian life.
Australian veterans who were exposed to radiation from British nuclear testing will also get free healthcare in the budget, which is a long time coming.
The Greens MP Scott Ludlam has been campaigning for this for years.
It was a loophole that successive governments of both stripes were happy to let fly and they were waiting the men out.
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Another thing for the “What we know so far” file.
The Xen Master is out today, welcoming the government’s funding of a $100m manufacturing fund squarely aimed at the auto industry. The industry minister, Arthur Sinodinos, announced it earlier today. These two had been negotiating on it for a while.
Hello South Australia.
The $100m advanced manufacturing fund includes:
- $24m over two years for advanced manufacturing research projects to stimulate development of new products and processes;
- $10m over two years for two advanced manufacturing innovation labs to test new manufacturing products and services and build business capability;
- $5m over two years for student research scholarships to maintain the flow of highly trained automotive design engineers;
- $13.5m over five years to reduce tariffs on imported vehicles and components to boost design and engineering activities for the development of global platform vehicles;
- $47.5m over two years for grants to South Australian and Victorian manufacturers to undertake capital equipment upgrades to make their businesses more competitive.
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Zed Seselja: if the US pulls out of Paris agreement, well ...
Australia is committed to the Paris agreement on climate change “as it stands” but the nature of the agreement would “change” if Donald Trump pulled the United States out, the assistant minister for social services and multicultural affairs, Zed Seselja, has said.
On Sky News on Monday, Seselja was asked about Australia’s commitment and replied:
We are committed to it. We’ve put forward our targets and they are strong measures: 26-28% [in greenhouse gas reductions]. So we are doing more than our share, in my opinion.
When it comes to the US’s position, that is a matter for the new US administration. Obviously you wouldn’t want to speculate but, if they were to pull out, obviously that would change the nature of that agreement. But, as it stands, the Australian government is committed to the Paris agreement.
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Straying into energy policy, Four Corners will tonight do over the general clusterduck that is energy policy in this country.
Michael Brissenden reports that the lack of carbon price is paralysing the country and domestic power prices could surge because of it.
Post Paris, the government agreed to the broad principle of keeping temperature rises to 1.5C by 2050. Most scientists say this means developed countries like ours will have to reach zero net emissions by 2050.
But the environment and energy minister, Josh Frydenberg, has told Four Corners he was less confident Australia would be able to meet that aspiration.
We’ll get to zero net emissions over the course of this century.
The Australian Conservation Foundation says the admission is pretty much a recognition of gross policy failure by the government.
Any remaining credibility this government has on energy policy is now in tatters. It is simply leaping from one band aid solution to another like new coal and gas export controls because of its ideological opposition to power from the wind and sun. Even Snowy 2.0 if proven feasible is a longer term solution to an immediate crisis.
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Lunchtime politics
- Bill Shorten has been roundly condemned for a Labor marginal seat advertisement, which uses a group appearing to be mostly Caucasian Australians, to sell the message: “Build Australian first, buy Australian first and employ Australians first.”
- Senior Labor frontbencher and one-time leadership rival Anthony Albanese labelled the ad “a shocker” and said it was not the sort of ad his party should be promoting.
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Budget speculation continues over various measures including more cuts to the foreign aid budget, in order to funnel money towards national security. We already know there will be a new school funding policy, infrastructure spending off budget (think Sydney’s second airport), lifting the Medicare rebate freeze, more money for the AFP and new immigration (revenue raising) measures.
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Albo carpets Labor Australians First ad: a shocker
Labor’s shadow infrastructure minister, Anthony Albanese, has labelled Labor’s Australians First ad a shocker.
At a doorstop in Canberra, Albanese said the ad “should never have been produced and it should never be shown”.
It is not the sort of ad I want my party to be promoting.
Asked what was wrong with the ad – which appears to almost exclusively feature Caucasian people – Albanese said “anyone who sees it will know exactly what’s wrong with it”.
I have no idea [what the approval process was]. I know because of Channel Nine’s exclusive – clearly it was dropped to Channel Nine to be shown last night – I don’t know what the process is. I am a member of the ALP national executive. I assure you that I hadn’t seen it.
Albanese said that Bill Shorten had “said quite rightly that the ad is inappropriate and it will be withdrawn”, summarising an earlier statement from Shorten that the ad “should have had more diversity in it”.
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Fairfax journalists are bussing it into parliament for a democracy sausage fest on the front lawn, to highlight their campaign over job cuts at the SMH and the Age. The papers will lose one in four journalists. There will be some very familiar faces, who will not be covering the budget this year as a result of the seven-day strike. They will be sizzling sausages at 2pm and I am sure Mike Bowers will be there to record the event.
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Paul Karp has done a full take on the Labor ad minus diversity.
Bill Shorten has conceded that people with more diverse backgrounds should have been in Labor’s new Employ Australians First ad, in response to complaints that it was racist.
The ad, set to air in marginal seats and previewed on Channel Nine news on Sunday evening, features Shorten promising to “build Australian first, buy Australian first and employ Australians first”.
The final image of the ad features Shorten with a group of 12 workers, almost all of whom appear to be white.
I want to touch on schools. The Canberra Times reports:
Parents of Canberra’s Catholic primary school students will fork out up to $5,000 a year more in fees under the government’s planned funding changes, new modelling shows ...
Fee hikes would reach more than $5,000 for two schools, St Thomas More’s Primary School, in Campbell, and St Bede’s Primary School, Red Hill, under estimates that compare expected fees under the Coalition’s proposed needs-based model with net recurrent fees that exclude money raised for capital costs.
The education minister, Simon Birmingham, rejects the need for any fee rises, saying funding for ACT Catholic schools would grow by $2m over four years. Quit with the scare campaign, Birmingham says.
It was the reason why Bill Shorten chose St Thomas More’s primary school for his doorstop this morning.
This marvellous school community at St Thomas Moore’s, what we see is a school community of about 150 students. There’s half of the kids here whose parents work in defence. This school community is faced, because of Mr Turnbull’s cuts to education and schools funding, this school community faces every parent paying an extra $5,000 per year – an extra $5,000 increase in fees per year because of Mr Turnbull’s cuts.
Remember that the Catholic education system gets its funding mostly in one bucket and then redistributes it. A report by Gonski panellist Kathryn Greiner suggested that, in previous years, once the cheque was passed over, that money from poorer bush schools was redirected to bigger city schools. A spokesman for the system said that was a former funding method that no longer applies. But still, there is no transparency.
When considering school policy, you have to separate two things.
- The embrace of the Gonski needs-based funding formula by the Coalition will, if passed, put in the framework for per child formula across all states and territories. This is an unambiguously good thing if you believe every child in every school should receive the same funding based on their needs.
- The amount of funding is what Labor is cranky about. But if the schools funding formula is passed, presumably if the Coalition loses the next election, Labor will able to be load up education funding to their hearts’ desire. And they could do it without the bareknuckle brawl with the Catholic education sector. Surely, they must be hoping the bill will pass.
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Walk with me, though the budget theatre.
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This, from Australia’s first Indigenous youth climate network, looks pretty amazing.
This is our message for @TurnbullMalcolm + @billshortenmp. Our land rights come before Adani and your other mining mates. #protectcountry pic.twitter.com/nH5GVubA0u
— Seed (@SeedMob) May 7, 2017
Foreign aid: the first bucket to raid
Just back to the AFP $321m boost. Simon Benson at the Oz reports that the money will be diverted from the foreign aid budget.
At the same time, Shane Wright from the West Oz has chimed in with a reminder of where the gummint spends its money.
Pop quiz. What does the Australian government spend most on — foreign aid, the age pension or unemployment benefits?
Before you read the answer, a little context. In the Budget that Treasurer Scott Morrison will hand down tomorrow, total revenue collected by Canberra will come in around $441bn.
So, if you answered foreign aid, you would be wrong. In the coming year the government will spend about $3.4bn on aid or less than 0.8 per cent of the total Budget. If you answered unemployment benefits, sorry, that’s also incorrect. Income support for the unemployed is forecast to be about $10.3 billion (a little less if the Budget expects the jobs market to improve over the coming 12 months).
But you get an A if you chose the age pension. At $46.8bn, the age pension is the single biggest expense facing Morrison and the government.
Bill Shorten was asked about the snow white ad. He has a bob each way. Get the message in and disown the ad at the same time.
It is rubbish. I am not in the business of making ads. We have too many rorts in the visa system. I had a look in the final product and I think we need more diversity and I will speak to the Labor party about that.
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The ad agency behind "Australians First" is the Moss Group, who also did the Mediscare campaign with Bob Hawke https://t.co/qvBLe5VgsX
— Mark Di Stefano 🤙🏻 (@MarkDiStef) May 7, 2017
Bill Shorten is speaking now about the schools policy. But the issue for Shorten is the social media storm over his latest ad, screaming EMPLOY AUSTRALIANS FIRST, with a group of people “Australians” who look very Anglo.
Here is a taste of the reaction:
I haven't seen the ad but I hope the soundtrack is of a Shorten media staffer being given their notice pic.twitter.com/PHGASeUJeu
— Liam Hogan (@liamvhogan) May 7, 2017
Guys, you can stop freaking out about this ad now because Bill Shorten's office has confirmed all these people have lots of ethnic friends. pic.twitter.com/ObM4eQSZ9J
— Adam Liaw (@adamliaw) May 8, 2017
Bill Shorten's latest TV ad, appealing to nativism and xenophobia, is disgusting, degrading and shows appalling judgment #auspol pic.twitter.com/ztLv8lHro3
— Troy Bramston (@TroyBramston) May 8, 2017
Hancock prospecting boss Gina Rinehart has got some advice for Malcolm Turnbull, via the Daily Tele.
Be more like Donald Trump.
He’s [Trump’s] doing a fantastic job. I think Australia needs to learn from President Trump. I’m not going to comment on [whether Turnbull is the right man for the job], I just hope that he learns from America.”
The $6bn woman wants to cut spending.
We have to do more to cut out spending. We’ve got to cut out a big slab of the expense of government.
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Malcolm Turnbull's budget message: Fair go (forget 2014)
Here is a taste of the story that the prime minister will be bowling up in the budget.
This budget will be committed to fairness, opportunity and security, ensuring that Australians are given the opportunity to get ahead. The economic growth that enables them to get ahead, to get a better job, [a] better-paying job, to start a business, grow a business, to realise their dreams and will also deliver the security and assurance.
National security, we’ve been talking about this morning, but also the security about essential services and essential government services – education and health. Above all, this budget will be a thoroughly fair budget. It is a commitment to fairness, Australians understand that.
We are the nation of a fair go, it is in our DNA and our budget will reflect that.
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Malcolm Turnbull says he got a text back from Emmanuel Macron after he congratulated the French president elect. (Apologies for my lack of hyphens today. My keyboard is cactus.)
Asked about Khaled Sharrouf’s latest images, the prime minister says:
The despicable conduct of Khaled Sharrouf in using his child to promote the barbaric, terrorist activities of the organisation of which he is part, is almost beyond belief. But that is the depths of barbarity, of cruelty, of savagery, that Isil [Islamic State], or Daesh, have sunk to. That is why we are committed, with our allies, to destroy Isil in the field.
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Malcolm Turnbull declines an invitation to drop the efficiency dividend for security agencies, currently across the public service, rather than giving one off funding boosts. Nor does he say where the money is coming from. Wait for the budget, says he.
Malcolm Turnbull is officially announcing the extra $321m for the Australian federal police.
The AFP stands in the front line, keeping us safe. That is the first duty of every government, and my government has committed more resources than ever to keeping Australians safe.
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If you were having a life over the weekend, you may have missed the large wads of cash sent west to the newly elected Labor state government.
Hannah Barry of WA Today, reported:
- $1.86bn reallocated from the dumped Perth Freight Link project (including $1.2bn in federal funding)
- $211m from savings on existing road projects (including $166m in federal funding)
- $226m from the latest federal government GST top-up payment for Western Australia.
The Perth Freight link was the project that enthused the federal and state Coalition governments but not the WA Labor opposition. Labor wanted to use the money to expand the state railway Metronet project. When Labor’s Mark McGowan won office earlier this year, we were all waiting to see if the feds would pull the funding promised for the freight link.
After all, during the Abbott reign, a very similar fight went on in Victoria over the East West Link. Abbott wanted East West Link built and Labor in opposition campaigned openly against the project, preferring the money to be put into metro rail. When Labor premier Dan Andrews surprised everyone and won government after just one Liberal term, Abbott took his bat home and said he wasn’t giving the committed funds to Andrews for anything other than the East West Link. It became a long-running battle and slowly Victoria is chipping away to get some of the money.
Looking closely at the WA numbers, Turnbull obviously decided it was not going down that path again and so announced that the money would be handed over, notwithstanding federal distaste.
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Scott Morrison did the usual prebudget Laurie Oakes interview on Sunday and our very own Paul Karp has a take of it here.
I was reminded that the Nick Xenophon one-off payments for power increases will be in this year’s budget. That was the deal done in return for the Xenophon votes for the company tax cuts.
Morrison confirmed the budget will contain $75 payments for single parents and single pensioners and $125 for couples on pensions to be paid by 30 June.
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Just a reminder on the Medical Research Future Fund.
This was the fund announced in the 2014 Abbott Budget of Doom, as the repository for the $7 copayment. While the copayment was dumped, the fund lived on.
In last year’s budget, this is where the MRFF funding was up to.
The Medical Research Future Fund (MRFF) was established on 26 August 2015 to provide additional funding for medical research and medical innovation.
The first credit to the MRFF of $1.010bn, which represented the uncommitted balance of the Health and Hospitals Fund (HHF), occurred on 22 September 2015.
The second credit of $2.139bn, comprising savings from the health portfolio, and residual amounts from the HHF, was transferred to the MRFF on 1 December 2015.
Remaining credits to the fund will consist of the estimated value of health function savings published in the 2014‑15 budget including any subsequent associated government decisions, until the capital value of the MRFF reaches $20 billion. The MRFF is expected to reach a balance of $20bn in 2020-21.
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The Turnbull government has been sending up smoke signals on the Medicare rebate freeze since the beginning of the year. You can read this development in the context of Labor’s Mediscare campaign and the 2016 election. (Government loves Medicare almost as much as Bernie Sanders).
Cutting the rebate could cost the government $3bn but the freeze will be lifted for some GP visits, some specialists and other medical procedures over the next three years.
The government is also expected to put $700m into medical research, as a first withdrawal from the Medical Research Future Fund, Fleur Anderson of the Fin reports.
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Breaking font news:
Looks like the cover of the budget papers has a new font... https://t.co/C7rFJXzaBf
— Stephen Koukoulas (@TheKouk) May 7, 2017
It is widely reported that the government will lift the Medicare rebate freeze. This will delight the medical profession, which has been complaining about the freeze since it was introduced by Labor in 2013 as a temporary budget savings measure.
While the Coalition also criticised the move, since it came to government, it has been trying to find ways to save money in the health portfolio, including the ill fated $7 copayment.
Bonjour budget enthusiasts
Here we are, the Monday before the Tuesday, the Tuesday being budget day. One wonders, given the “leaks” over the weekend, on top of the announcements piled on top of announcements, there is anything left in the budget papers. Of course, leaks aren’t really leaks. They are part of a communications strategy to get the messages out over ahead of the day in a fashion that suits the government. The government is proceeding as governments do.
Meanwhile, your humble blogger faces the week with a prebudget cold. The only thing to attempt a cure was standing under a hot shower with Prince up full blast. It did clear the head and lift my spirits, so let’s crack on to the information you actually need. As opposed to my preoccupations.
Remember this is not a sitting day, so what I propose to do is work through the things we know so far, in an attempt to sketch out the general thrust of the budget. I promise to sprinkle those budget items liberally with the news of the morning, as MPs roll, skip and straggle into the nation’s capital.
This morning, there were two new budget bits:
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Phil Coorey at the Fin reports:
The Turnbull government will go after the banks in tomorrow’s federal budget with new measures to boost competition, as well a Productivity Commission inquiry into further changes, including the possible separation of the banks’ retail and financial advice arms.
It comes from an interview with Scott Morrison. The treasurer appeared to be dropping hints all over the place, such as...
There will be changes announced on budget night to improve competition in the finance sector, possibly including superannuation. Mr Morrison hinted strongly the government would implement, among other measures, a so-called open data policy that would give customers power over their own data and enable them to demand their bank send it to a rival in search of a better deal.
The Greens had been pushing a royal commission and in its absence, a parliamentary commission of inquiry, with independent Bob Katter and LNP MP George Christensen.
Labor has promised a royal commission on the banks.
So a PC inquiry is the government’s answer to increase pressure on the banks without a royal commish. But as Nick Xenophon pointed out this morning, the PC does not have the power to call witnesses like a royal commission or a commission of inquiry.
2. There is $321.4m for the Australian federal police (AFP) to hire specialist personnel.
ABC reports, up to 300 personnel are expected to be hired, including negotiators, tactical response officers, bomb squad technicians and forensic specialists.
There are many more to list but let’s get this blog up. Mike Bowers is in the capital so talk to both or either of us on the Twits @gabriellechan and @mpbowers. Or on Facebook. Or in the thread. Let’s go crazy.
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