Nighty night
Big day. That’s enough for now. Thank you muchly for your company on what has been a mildly crazy day.
Let’s wrap Wednesday. There were two main issues.
- Today, the government’s tax woes got worse rather than better. The prime minister and the assistant treasurer had competing versions about what Labor’s negative gearing policy would mean for home owners, and their efforts to marry their contradictory statements looked less than convincing. Malcolm Turnbull also stumbled in the House by declaring Labor’s Tony Burke owned investment properties when he didn’t.
- Labor’s divisions over Senate voting reform were on public display. The shadow special minister of state, Gary Gray, stood up in parliament and argued the opposition’s position on the issue stank, but because he was a good soldier he would support it. The government clapped its hands happily. But late in the day, the government had to amend its own package to deal with some technical problems. Small car crash, only minor cuts and abrasions.
Have a great evening. See you in the morning.
Updated
Sorry for the brief break in transmission – someone I needed to see. While I’ve been off air it’s become clear the government has fumbled the Senate voting reform bill. The government has this evening had to produce a page of amendments addressing a couple of technical things, such as ensuring there is counting on election night of Senate votes. This was an issue that the ABC’s election analyst, Antony Green, identified as a problem with the package a couple of days ago.
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Bless Matthew Davey.
@murpharoo #Housageddon. #fourrealestateagentsoftheapocolypse pic.twitter.com/z61fd8L6FF
— The Matt Hatter (@MattGlassDarkly) February 24, 2016
The manager of government business, Christopher Pyne, cannot believe the hypocrisy of the Labor party. You are going to oppose this bill, Pyne says. You’ve made up your mind. Let’s get on with it.
Updated
In the House, the manager of opposition business, Tony Burke, is going postal about the government’s efforts to push its Senate voting reform package through the House of Representatives.
Updated
The innovation minister, Christopher Pyne, has just done his regular radio spot on 2GB with the opposition spokesman on infrastructure, Anthony Albanese. Pyne has reported he’s observing FebFast but assures “he’s through the cranky stage. The first week was hell.” Albanese then lined up a birthday drink for next week. “It’s my birthday!”
After the pleasantries, it was straight to WWE. A couple of throw-downs about Gary Gray telling parliament today that he thought Labor’s position on Senate voting reform stank but he was going to observe it anyway. Then to negative gearing and CGT.
Pyne says once house prices go down courtesy of Labor’s policy on negative gearing the banks will move in to claim the houses of people when what they owe on their mortgage exceeds the value of the asset. Not content with that, he observes that Labor has swallowed a pig.
Anthony Albanese:
Who knows what that analogy means?
Pyne says pigs are notoriously indigestible. That’s what it means. Albanese says the government has nothing to say on housing affordability. Pyne says neither does Labor. Albanese ended by advising him to stick to the pig analogies.
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THANK YOU NEVADA! WE WILL MAKE AMERICA SAFE & GREAT AGAIN! https://t.co/ClAnLIg0AD pic.twitter.com/zVvyVCIaD4
— Donald J. Trump (@realDonaldTrump) February 24, 2016
By the way, Donald Trump has just won the caucus in Nevada.
The day hasn’t allowed me much slack to get into the various feelpinions of conservatives about the safe schools program (the one the government is reviewing because said conservatives believe it amounts to rainbow ideology).
The LNP senator Barry O’Sullivan told his chamber before question time that material associated with the program had kids perusing options about their gender and sexuality like they were reading a Chinese menu.
Then they go on to provide some 13 options, none of them as an option are heterosexuality ... Here we have a program with young people in this very vulnerable state, being educated that here are your options. You can go and shop down like a Chinese menu – you can pick any one of the following that you like, it’s OK. It’s all perfectly normal.
(I’m indebted to my colleague Shalailah Medhora for these quotes.)
Updated
On over-egging and repositioning
Julie Bishop. Eyes on you.
A few ideas to throw into the mix this afternoon.
The government’s resort to the scare campaign on negative gearing and capital gains tax is, at one level, politics 101. It’s conventional wisdom. If your opponent offers you an easy target, you go for the bullseye. And as bad as things look for the government this week, we need to remember Labor’s policy carries distinct political risks. This is a tough sell to the investor class of Australia. The government has made a calculation to go with politics 101, and Turnbull today was escalating, not retreating.
But when you go politics 101, you really do need to have your lines straight. Right now, Turnbull and Kelly O’Dwyer are both sticking by their respective assessments that Labor’s policy will force housing values both up and down. Turnbull says down, everywhere. Housing-ageddon. O’Dwyer says prices down for existing homes and up for new property.
We really do need one story here, and preferably backed by evidence of some kind, because the escalation in the language is bordering on pantomime.
And today’s great inspiration to start name checking parliamentarians in possession of investment properties as if they’ve got some ulterior motive – what on earth was that about? Just think about that one for five seconds. If Labor is moving to close access to a tax concession for a certain class of property, that suggests it is prepared to limit its options for future tax effective investing. Isn’t the government the one arguing that the tax concession should remain in place, not the opposition? Don’t you, by random act of name checking, then invite some gratuitous analysis of your own motives?
Apart from the clutter and the overstatement and the own goals, the government has another problem. Right now Labor is setting the terms of the debate. We are talking about Labor’s policy as if Labor was odds-on favourite to win the next election. By banging on about your opponent’s agenda day in and day out, you elevate their status.
All this week Turnbull has been acting like an opposition leader, not a prime minister. The fear campaign is last legs stuff: circling the wagons, saving the furniture. The government should be setting the policy agenda. Instead it’s responding constantly on the terms of its opponents, and in so doing, highlighting the fact its own tax policy is a complete vacuum.
And going for broke creates a couple of practical complications down the track for Turnbull. The government is making it ever more difficult to do something – anything really – on negative gearing and capital gains tax itself.
Both of these things should be looked at if the prime minister meant what he said about having a genuine policy debate. Every day, it’s limiting its own agency.
The other risk associated with the Great Big Scare is if it doesn’t bite, if your match doesn’t hit dry tinder out there in voter land, then how on earth do you reposition? What does the prime minister say by why of explanation?
Oh, yes, all that stuff I said about Labor’s policy, that was all just huff and blow. I didn’t mean any of it. Don’t take any notice of me, I’m just the prime minister.
Updated
Further questions have been placed on the notice paper. I’ll be back shortly with some thoughts on that session.
Some chamber brilliance from Magic Mikearoo.
Updated
Bill Shorten is back.
Q: My question is to the prime minister. Yesterday the prime minister expected Australians to forget that his comments on capital gains tax referred to no increase whatsoever. Now today the prime minister expects Australians not to notice that when the assistant treasurer spoke about housing prices going up she said it would be for all Australians. Prime minister, how did we get to a situation, day after day, where the PM keeps asking Australians to not believe what he and his ministers have said?
Malcolm Turnbull:
Mr Speaker, every Australian knows that Labor has made another massive economic blunder. They haven’t thought this through. They couldn’t think past the press release.
They are putting at risk Australia’s most important asset; they’re putting at risk the fundamental asset base of our economy.
Updated
Back to the prime ministerial stuff-up. A version of Tony Burke’s register of interests, filed on 10 December 2013, indicated he owned three properties (two of which provided him with rental income):
* Roselands, NSW – residential (Sydney)
* Kingston, ACT – investment/residential (Canberra)
* Kingston, ACT – investment
However, the same compilation document, available on the parliamentary website, shows he subsequently updated his register. In February 2015, Burke notified the parliament he had sold one of the Kingston properties. Then, in June 2015, he updated his register to reflect the sale of a Kingston property and the Roselands property. In October 2015, Burke disclosed that he had purchased property in Jackeys Marsh, Tasmania.
Updated
Speaking of Scott Morrison, he’s up now on the poor rich. I use that crude shorthand to remind you of a post I shared earlier pegged off that research by the ANU’s Ben Phillips, the research that made the point that people lower their taxable incomes through the use of negative gearing concessions. In other words their pre-concession incomes are actually higher than they seem.
But by all means, take it away Scott Morrison:
As a percentage of people in that occupation, more train and tram drivers negatively gear than solicitors, real estate agents and veterinarians. On an equity measure it’s a big fail from those opposite because they don’t get it.
The mums and dads are just investing to put themselves in a better position for their future.
Updated
Meanwhile.
Evicted for displaying mythical creatures as treasurer Morrison was speaking @TimWattsMP & @PatConroy1 @murpharoo pic.twitter.com/cmcRBlOOax
— Mikearoo (@mpbowers) February 24, 2016
My colleague Lenore Taylor has been namechecked for the analysis she wrote on Turnbull’s evidence-free assault on Labor’s policy. The prime minister is batting on in highly subdued fashion.
Updated
Turnbull has just withdrawn his suggestion earlier that Tony Burke owns geared investment properties.
I should just add in fairness to the honourable member for Watson, he is quite correct to pick me up when the parliament began he did record two properties, three properties, one of which was a residence and two of which were investment properties, and he has subsequently sold them all.
A complete cock-up. Shocker. The perils of kicking the hornet’s nest.
Updated
A Dorothy Dixer for Scott Morrison, which allows the government to crow about Gary Gray’s speech on Senate voting reform that I covered earlier on today. Morrison says Gray’s position on this issue has been consistent, unlike the rest of the Labor party, which is engaging in spiv politics.
Updated
Turnbull also weighs into the personal as political, a course of action I’d characterise as somewhat rash. That’s some hornet’s nest to kick.
Malcolm Turnbull:
The honourable member opposite for Watson who interrupts so frequently, he owns two investment properties, both of which are geared. I don’t know whether they’re negatively geared or not but he is very well aware of the economics of this matter.
Burke rises to the dispatch box seemingly to contest this point. He’s sat down by the Speaker, who advises there are other forms of the House for corrections.
Manager of opposition business, Tony Burke.
Q: My question is to the prime minister. I refer to his earlier answers. Is it now the PM’s position that under Labor’s reforms for negative gearing housing prices will go up, housing prices will also go down and Australians are meant to be afraid of both?
Malcolm Turnbull:
The Labor party’s policy as I said earlier is confused, chaotic and contradictory. What it seeks to do is to make existing housing, established houses which are obviously the vast bulk of the housing stock, it aims to make them less valuable by removing from the demand from the buyers in excess of one-third of buyers.
From 1 July 2017, no investor could safely buy residential property in Australia if the Labor government introduces its policy.
That is calculated, it is designed to reduce the value of every single home in Australia.
(So only Kelly O’Dwyer thinks Labor’s policy increases the price of new homes?)
George Christensen, to Malcolm Turnbull.
Q: My question is to the prime minister. Will the prime minister outline to the House why housing values are the bedrock of certainty and security for Australian families?
The prime minister will, as a matter of fact.
If house prices were to fall by just 5%, that would wipe $278bn off the national balance sheet.
Updated
"All investors will be gone ..."
The Labor leader, Bill Shorten, has a question for Malcolm Turnbull. Does the competing scare campaigns on negative gearing (house prices up and house prices down) suggest the government is now in complete chaos?
The prime minister is now suggesting there will be two contradictory shocks in the housing market as a consequence of Labor’s policy.
Massive shocks, to the residential housing market.
They are proposing to remove from the market for established dwellings one-third of demand.
All investors would be gone. Now, and when I say all investors, I mean all investors.
(All investors? All?)
It is the most ill-conceived, potentially destructive policy ever proposed by any opposition. How could you do something so destructive as that?
(As Bernie Sanders might say, HYOGE. If true.)
Updated
The foreign affairs minister Julie Bishop is providing an update to parliament on the cyclone in Fiji.
Updated
Chris Bowen, to O’Dwyer:
Q: My question is to the assistant treasurer. In a trainwreck of an interview this morning, the assistant treasurer said the government had no plans to change “capital gains tax arrangements with respect to negative gearing”. Is the assistant treasurer aware that these are two separate things? What on earth was the assistant treasurer talking about this morning?
O’Dwyer says some Labor people are concerned about Labor’s negative gearing policy.
The member for Fraser in the past has worried about the impact of changes to negative gearing.
In 2013 ...
Updated
"A Mark Latham moment ..."
Just while the prime minister is taking a Dorothy Dixer about the defence white paper I can fill you in about Bernardi and the infinite sadness. Bernardi has had a spray in the chamber at Bill Shorten over a heated exchange the pair engaged in this morning. Bernardi told the Senate a few moments ago that Shorten had his “Mark Latham moment” by calling the senator names. “He was in full homophobe mode ... This man is unfit to put forward an agenda for this country.”
Updated
Question time
Sticking with the House for now. Labor opens on Kelly O’Dwyer’s prediction that its negative gearing policy would increase the cost of housing for all Australians.
The shadow treasurer, Chris Bowen:
Q: Really? All Australians?
The assistant treasurer, Kelly O’Dwyer.
O’Dwyer says she relishes the chance to talk about Labor’s terrible policy.
This will have a very significant impact on demand and we know that in the property market when you reduce demand prices fall. Under the same policy, those buyers, though, who are looking to invest and negatively gear will be forced into new property. This has the impact of increasing demand for new property and when you increase demand for new property, you will push up prices.
(So Labor’s policy will now push down prices and push up prices. Thus far Turnbull has only spoken about the smashing component of the policy. Not the pushing up prices part.)
Updated
There was more sadness in the Senate chamber a moment ago. I’ll bring you that shortly. Cory Bernardi and the infinite sadness. Question time now.
Updated
Meanwhile.
Senator Bernardi is sad.
It's disappointing someone seeking to be PM resorts to name calling when confronted with a different policy view. @billshortenmp
— Cory Bernardi (@corybernardi) February 24, 2016
Labor’s deputy leader Tanya Plibersek has replaced Alex Hawke in the ABC studio.
Q: What do you say, or what does your modelling show, on the price effect on established homes under Labor’s policy?
I’ll make this other point as well.
(A point which declines to engage with modelling.)
Q: Just before we move on, what work if any has Labor done to quantify the withdrawal of demand that might accompany this policy?
Frankly it’s been modelled to death.
(No, it hasn’t. Not really. If anyone sees modelling addressing specifically the price effects of Labor’s policy could you send it my way please?)
Updated
Q: Is there a problem, though, that the message is not being communicated effectively?
Alex Hawke:
No, I think this is a complex economic debate and the Labor party is trying to dumb it down to something very silly because these areas of capital gains tax and individual taxation and superannuation and the nexus of property prices and people’s personal private wealth are complex. They have to be a complex discussion. So for Labor to try to reduce it to something so simple is a mistake.
(I seek leave to table the following documents Mr Speaker: #StopTheBoats #AxeTheTax #JakartaNotGeneva)
Meanwhile, back on the hill, in the ABC studios, grinding out the content. Liberal MP Alex Hawke has taken up the task on ABC24 of explaining how Kelly O’Dwyer was taken out of context this morning, that she didn’t in fact, directly contradict the prime minister (which of course she did.)
Alex Hawke:
Look Kelly’s a highly capable cabinet minister ...
Updated
Scott is asked about his attitude to the government’s media reform package. He’s having a bet both ways. He says given the media landscape now includes unregulated players such as Facebook and Google the current restrictions on ownership and reach are hard to justify – but people need to understand the changes will have an impact.
How does he feel about the death of newspapers? Scott says he’ll be sad if they disappear, but this is a reality we are dealing with. The prognosis is grim and getting grimmer. He references a recent article from Michael Wolff (in USA Today, from memory) which posits the notion there may no sustainable business model for commercial journalism.
Scott says the industry has been hacking away on this conundrum for 15 years or more and no clear answers have emerged. Once again, he reasons from a government perspective, the ABC might be the only safe bet. Please give us more money is the pitch.
(Hmm, yes. I can think of a few other approaches than increasing funding for public broadcasters, but I don’t have time to get into that today.)
Updated
Q: On advertising, the BBC does it online. Is there no capacity [for advertising on the ABC]?
Mark Scott:
They do it online internationally. We do it online internationally. We don’t do it domestically.
Updated
They are into questions now at the press club.
Cath McGrath, from SBS, wonders if Scott is having a “look-over-there” moment about the ABC-SBS merger.
Q: The journo in me wonders if this is a bit of a “look-over-there” moment as you leave your role. Would it perhaps have been a time to talk more about ABC charter and meeting ABC charter?
Scott thinks he isn’t having a look-over-there moment.
I’m saying down the track this is a mature conversation we need to have.
Updated
Scott wraps the address this way.
May [the ABC] outlast us all, and may the ABC’s best days lie ahead.
Updated
The outgoing ABC boss is working exhaustively through funding promises, subsequently broken. He notes the only way the ABC will be strong and relevant in the future is with the government’s adequate financial support. He’s now canvassing the bringing together of the ABC and SBS, a proposal he’s floated before.
Mark Scott:
Some years ago, towards the end of his term as SBS managing director, Sean Brown and I had a number of conversations about how a peaceful merger might work. One that would safeguard a distinct identity and remit for SBS and allow the public broadcasters to be more distinctive in clearly delineated space – no overlap. No bidding against each other, schedules developed side by side to maximise specialist audiences, using studios more efficiently. And shared back-office support that would deliver economies of scale.
We felt we could come up with a public broadcasting proposition for government that worked in the interest of audiences, the taxpayers, the broadcasters. A shared solution, not a takeover, but a friendly merger in the interests of the owners. But it wasn’t to be. The idea was rejected at the SBS board level and Sean wasn’t given license to pursue the conversation further.
It ended there. But down the track, I think the time will come for a real investigation of this possibility.
Updated
Mark Scott, on editorial standards:
The ABC is popular but it’s not perfect. Flawed at times with mistakes triggered by a tyranny of live microphones or rushed judgments, occasional blind spots, misreading of public taste, stories overlooked or perspectives not considered. At times we make mistakes that give our critics a very easy ride. We do recognise the trust the public places in us and we are constantly looking to improve our performance.
Updated
Mark Scott, on funding:
Will the ABC be granted the resources to grow and evolve to meet changing audience demands and expectations or will it have to contend with a budget that offers it no alternative but to cut, shrink and retreat?
Here’s the Scott pitch.
A well-funded ABC is one sure bet in an uncertain, unstable media world. It is the way of ensuring that Australian conversations and cultures and stories, the stories that shape our Australian identity, are present in our media mix, available free of charge in every Australian home.
Updated
Now to Mark Scott, down at the press club, ringing in all that good news for the media industry as he departs the ABC.
A lot can happen in three years but the pattern is already set. The potential is there for us to see.
And it would not be unreasonable to anticipate the following in the next three years: the demise of weekday print editions of some of the nation’s most important newspapers, the closure of many regional newspapers and the continued loss of local content makers in the bush with fewer regional, radio and television services. We might anticipate further dramatic newsroom cuts and the increased siphoning of advertising revenues from traditional media players to newer giants like Google, Facebook and Apple.
We might expect to see pressure from commercial TV networks to lessen their Australian content requirements and see a continued erosion of the percentage of Australian content on our screens as massive global libraries are unlocked through YouTube, Netflix and other (streaming services).
All of these scenarios are possible, many are likely, some are simply inevitable and this isn’t idle speculation it’s simply a continuation of well established trends that are being accelerated by other factors such as the growth of fast broadband and the ubiquity of mobile devices.
Closed local media markets have become open global ones. The old link between locally created content and local advertising markets has been broken. The push to get audiences to pay for content is constrained by the countless content choice they have and by the quality of the cheap or free global offering.
It’s hard to see a traditional news or broadcast media company anywhere in the world that thriving through their traditional business model.
Updated
Let's pause for a moment and recap the day, thus far
Quite the day, this, crackling away nicely. Let’s take a moment to consider the edited highlights.
The government thought early in the day that today would be defence white paper day, not making our tax policy and positions up as we go along day.
The prime minister held a short press conference in order to make some observations about the defence white paper, only to face questions about some breakfast television analysis by the assistant treasurer, Kelly O’Dwyer. Turnbull had spent question time yesterday telling the voters of Australia that Labor would smash house prices through its reckless policies curbing negative gearing concessions. O’Dwyer for her part early this morning thought the Labor policy would lead to an increase in housing prices. Not a smashing in sight. Wrong-footed, the prime minister moved on to his next appointment. A short time later O’Dwyer released a clarifying statement indicating she was talking about new houses – those prices would go up. Otherwise she was in complete agreement with the prime minister.
Bill Shorten noted that the tax reform debate had reached a new nadir – now there were potentially duelling scare campaigns, where the opposite could also be true. While he was opining on this and other matters, including noting that if he was prime minister, he would leave it to the military to determine whether or not we’d conduct freedom-of-navigation exercises in the South China Sea, the South Australian Liberal Cory Bernardi strolled on by. He strolled on by right at the moment Shorten was decrying the various fixations of the right wing of the Liberal party. Time for a spot of sick burns. Bernardi thought Shorten a fraud and noted as much. “At least I’m not a homophobe,” was the Shorten comeback off the cuff as the cameras rolled. Then everyone moved on with their business.
The business included the shadow special minister of state, Gary Gary, wandering into parliament and saying he thought Labor’s position on Senate voting reform was absurd and potentially undemocratic but he was obliged to support it anyway so he would because he was a good soldier. Oh yes, and Liberal Dennis Jensen though if Indigenous people wanted to live out their lives as noble savages they could do it on their own coin because that life wasn’t all Rousseau made it out to be. Eric Abetz through the ABC was a communist stronghold but no one cared.
The ABC managing director, Mark Scott, is up at the press club now. I’ll bring you some of that in the next post.
Updated
After sounding like he was going to break with the shadow cabinet position on Senate voting reform, Gray swerves back to inform the parliament of the sad reality he is faced with.
Gary Gray:
I lost the argument in my party rom on Senate reform, so Labor will oppose the substantive reforms enshrined in this bill. I think this is sad but it is the reality.
And my party has moved that it will be opposing this bill and therefore I oppose this bill.
I lost the debate internally.
(Pretty amazing speech, this. My colleagues are idiots.)
Updated
Gary Gray, off the reservation, walking briskly
Put up your hand if you are on the reservation today.
Right now, Gary Gray is off the reservation on Senate voting reform.
Despite recommending caucus colleagues vote against the government’s Senate voting reform package when he saw them yesterday, Gray is now telling the parliament people should change the system.
Gary Gray:
It is self evidently the case that our parliament needs to act on electoral reform ... Fixing the Senate system is as important as one vote one value. It’s as important as the franchise.
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You’re welcome.
Not all Libs are afraid of diversity 👏 👏 @jeff_kennett @beyondblue joining forces w #kinkybootsoz 4 #JustBe campaign pic.twitter.com/DAwoS7cYav
— Catherine Andrews (@CathLAndrews) February 24, 2016
Just in case anyone still cares, the Liberal senator Eric Abetz has called on the outgoing ABC managing director, Mark Scott, (who is at the National Press Club today) to get rid of the lefty love-in, whatever that might be.
ABC Managing Director must get rid of lefty love-in #politas #auspol https://t.co/GxMmpWcFCm
— Eric Abetz (@SenatorAbetz) February 23, 2016
Scott, for his part, thinks the views of Tasmanians might be relevant to the Tasmanian senator.
Perhaps the views of your voters are relevant @SenatorAbetz. They want more ABC funding. https://t.co/1QQPidsVIB https://t.co/BmG7ewOoKk
— Mark Scott (@mscott) February 23, 2016
Updated
Late last week, Labor’s defence spokesman, Stephen Conroy, didn’t seem to want to wait for advice. He said countries like Australia should “demonstrate that they are not prepared to be bullied by China” by conducting a freedom-of-navigation exercise within 12 nautical miles of islands claimed by Beijing.
Updated
What am I? An admiral or something?
Again, while I can hear myself think, I should have noted during the Shorten press conference that he was asked about the defence white paper, and about tensions in the South China sea.
Shorten says whether or not a future Labor government conducts freedom-of-navigation exercises depends on whether the military think that is a good idea.
Q: There seems to be from the reports quite a focus on naval strength. Do you welcome this in light of China’s assertive foreign policy in the South China Sea, and do you agree with Stephen Conroy that we should be conducting freedom-of-navigation exercises in the South China Sea within that 12 nautical mile radius?
Bill Shorten:
On the defence white paper, whilst there’s been selective leaks dropped for whatever reason, probably for the government to not talk about their tax mess, we’ll wait and see the detail.
Labor has always been strong supporters of the Royal Australian Navy. In terms of freedom of navigation, Labor absolutely is committed to freedom of navigation. The government and Labor are of one mind on that. We want to make sure that China goes and uses the international forums to resolve its claims and doesn’t just assert through military capacity its rights, which frankly need to be resolved in international forums.
Q: Will you be conducting more operations within the 12 nautical mile radius?
I won’t try to be the admiral of Australia.
What I do respect, though, is if our military people feel that that’s necessary, then they’ll get Labor’s backing.
Updated
Just while I have five minutes, I think it’s worth a short post addressing one of the running arguments about negative gearing that we’ve heard the government advance in recent days.
People who have been plugged in will know that the treasurer, Scott Morrison, likes to say that many people on ordinary incomes take up negative gearing tax concessions: teachers, nurses and the like.
Here’s an excerpt of some work from Ben Phillips, economics/public policy principal research fellow at the ANU’s centre for social research and methods. He’s looked at the existing population of taxpayers who negatively gear their rental investment properties. He notes that a number of families will also negatively gear other investments, such as shares.
Make sure you read through this excerpt to the end.
This analysis focuses on the rental investors – the majority of investment by families in Australia. We expect by 2017-18 the median income of a negatively geared investor would be $69,900 per year while the rest of the population has a median income of $46,600.
The negatively geared investors have an income that is 50% larger than the remainder of the population. Where we add the negatively geared portion of income back on to taxable income, their median ‘adjusted’ taxable income increases to $78,200. We expect that around 22.4% to have a taxable income of over $100,000 per annum in 2017 compared to 10.1% of the remaining population.
While negatively geared investors do typically have larger incomes it is also true that their spread of incomes covers low, middle and high incomes.
Some of these investors will have a low taxable income on account of a large number of negatively geared properties and therefore a large tax deduction owing to negative gearing.
It’s about chicken and eggs, basically. People who invest and claim the tax breaks are in a position to lower their taxable income courtesy of the concessions. So Scott’s strivers, the average punters, who use the concessions are a bit of an illusion.
Updated
There’s an interesting story in the Australian Financial Review this morning about Li Ruipeng, “the Chinese businessman on the run from authorities in China and at the centre of a luxury watch-gifting scandal in Canberra”.
In case you’ve already forgotten the watch-gifting scandal, this is the one unearthed by the Herald Sun a few weeks back where the businessman gave Rolex watches to several Liberal MPs (including Tony Abbott and the former resources minister Ian Macfarlane). The parliamentarians assumed the watches were fakes. Naturally they were not fakes. This story bubbled up during the all controversy about Stuart Robert and his mate Paul Marks, the businessman and political donor.
The AFR (Lisa Murray and Primrose Riordan) report the Chinese businessman “has been hiding out on the Gold Coast, according to local business associates”.
He is ‘basically in hiding’, the associate said, adding that he had been asking for money to dig himself out of legal trouble in China. Court documents show Mr Li is involved in 27 legal disputes on the mainland, owes creditors at least $30m and is being investigated for illegal fundraising.
Updated
A little bit more on the defence white paper while we can. The opposition’s assistant defence spokesman, David Feeney, was on the radio earlier today and was asked about the reported commitment in the white paper to increase the defence spend to 2% of GDP.
Q: Two per cent of GDP within 10 years. That’s a lot more specific than your stated aim of 2% “sometime in the near future” which you put in Labor’s last white paper in 2013, isn’t it?
David Feeney
Well the 2% has its origins with the Labor party, that’s true. We said 2% when fiscally responsible.
Q: Is this fiscally responsible to do it now within 10 years?
Well, Bill Shorten made very plain in a speech he gave to the Australian Strategic Policy Institute last year that Labor would be ready and willing to support a plausible plan to get towards a 2% spend. So I guess the challenge has always been for this defence white paper to set out that trajectory and to do it in a way that means it can become a bipartisan commitment. The 2% has its origins in Labor party policy and it’s something we’ll support so long as it can be set out in a way that is real and tangible.
Andrew Wilkie, a former security analyst and now Tasmanian independent, is in one of the courtyards now objecting to the increase in spending.
There is more than enough money for the ADF to do the job the government gives it and the community gives it, so we can’t afford it. Secondly, it is not necessary.
The fact is we have now downsized greatly our commitment to Afghanistan and into the Middle East. Our major commitment there is over. The need for more resources has come and gone so there is no need to expand the defence force at a time that we’re actually de-escalating our defence involvement overseas.
If anything, there should be a public discussion about whether the defence force now can even be downsized or restructured. I mean, let’s put this in perspective. We have a very modest overseas commitment currently, we have no significant threat to Australia from a military sense, but yet we certainly have seven infantry battalions, almost 100 classic Hornets and Super Hornets, we have six submarines, we have a very effective, very professional, very competent, very effective defence force.
It’s big enough. It doesn’t need to be increased in size.
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Just in case you’d like to view the drive by slagging.
OL @billshortenmp brands @corybernardi a "homophobe" in corridor exchange. More on the blog https://t.co/Z0b17shjXR pic.twitter.com/1tsoaSeGmz
— Anna Henderson (@annajhenderson) February 23, 2016
It feels like hours ago now, but earlier today Malcolm Turnbull delivered an emotional address at the Teal Ribbon day breakfast, which raises awareness of ovarian cancer.
Turnbull choked up when thanking one of the event’s organisers for disclosing her own battle with the deadly disease.
He also praised former Liberal party senator Jeannie Ferris who fought to raise awareness of ovarian cancer until her death from the disease in 2007. “We are talking more openly about ovarian cancer. Greater awareness is a critically important step on a road to more effective treatment and greater survivorship,” Turnbull said.
The opposition leader, Bill Shorten, also spoke at the event, saying the heartfelt stories relayed by survivors reminded him how much he hates cancer. “You are reluctant conscripts in a war you never sought, a war against cancer,” he said. “We salute the exhausting ordeal of what people go through.”
Just under 1,500 women are expected to be diagnosed with ovarian cancer in 2016, the Cancer Australia says.
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A clarifying statement from Kelly O’Dwyer.
Of course I meant new property.
Kelly O'Dwyer moves to clarify comments that ALP's negative gearing policy will increase housing costs @SkyNewsAust pic.twitter.com/kgqc1dVmPr
— James O'Doherty (@jmodoh) February 23, 2016
Here’s O’Dwyer’s quote again from this morning, minus the qualification.
The Labor party has a very irresponsible campaign. They have got a policy that will increase the cost of housing for all Australians, for those people who own a home and for those people who would like to get into the housing market through their negative gearing policy.
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Let’s hope for a cessation in crazy long enough to nail a couple of things.
Media reform first. It’s been clear for several weeks that the government is accelerating towards a new round of deregulation of media ownership restrictions. I referenced a news break yesterday from Fairfax Media’s Matthew Knott that cabinet had signed off on a package scrapping the reach and two-out-of-three rules. In the event I’m speaking double dutch, the reach rule stops TV networks from broadcasting to more than 75% of the population. Two out of three stops media proprietors controlling a newspaper, television and radio station in the same market.
The communications minister, Mitch Fifield, has told reporters he’s aiming “not to let the grass grow on media reform”. That means legislation, to the parliament, soon.
Here’s what Labor thinks about it. From the ABC last night, the opposition spokesman on communications, Jason Clare.
Obviously the government doesn’t think it’s that urgent because Malcolm Turnbull’s spent two and a half years working on this, talking about it, tiptoeing around this issue. But hasn’t brought a proposal in front of the parliament. It now seems like the government made a decision last night but we still haven’t seen the details of it. And we will judge it on its merits when the legislation finally appears. There’s options here available to the government. There are non-controversial elements of what we think the government is proposing to do. They could have a relatively quick introduction to the parliament and consideration by the parliament.
Q: So you would support them on the reach rule, on getting rid of the reach rule?
It hasn’t been to our shadow cabinet or our caucus processes yet. We proposed this in government and I think there’s a strong argument for it to be reformed.
(Presumably Clare means only the reach rule. Labor in government did not propose touching the ownership restrictions, arguing they were necessary to safeguard diversity. If I were you folks, I’d watch that space.)
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Savages, frauds and homophobes
We need to pause and recap that frantic last 40 minutes or so before I push on to other matters of the day.
- The government has attempted to change the conversation from the daily debacle about tax policy by tipping out elements of the defence white paper, which will be released tomorrow.
- But the daily tax debacle has pressed back regardless. Malcolm Turnbull is continuing to argue that Labor’s policy restricting negative gearing concessions to new housing stock will smash housing prices. But the assistant treasurer, Kelly O’Dwyer, says Labor’s policy will increase the cost of housing for all Australians (which is what the housing industry says it will do).
- Liberal MP Dennis Jensen has invoked noble savages and lifestyle choices to criticise policies for Indigenous people, leading Bill Shorten to criticise the intervention and the obsessions of various rightwingers in the Liberal party.
- That analysis has prompted the Liberal MP Cory Bernardi to call Bill Shorten a fraud. That character reference prompted Shorten to brand Bernardi a homophobe.
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Mike and I call this sequence “Drive by slagging”
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"At least I'm not a homophobe … "
At the tail end of the Shorten press conference, the Liberal senator Cory Bernardi swung by just as the Labor leader was being asked about Dennis Jensen’s remarks about noble savages and lifestyle choices.
Shorten slapped Jensen down, and also referenced yesterday’s debate about safe schools, the program that aims to support LGBTI kids.
We see this ridiculous obsession by the right wing of the Liberal party ...
Bernardi broke in from the sidelines:
At least I’m honest, Bill.
Shorten shot back.
I’m least I’m not a homophobe either, mate.
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Meanwhile on the ABC in Melbourne, a reader tells me Liberal MP Sarah Henderson sounds like she’s having a bet both ways.
@GrogsGamut @murpharoo Sarah Henderson just got a bet in each way on @774melbourne - new house prices to soar, rest to fall.
— Anna Gunn (@annzier) February 23, 2016
Bill Shorten, on O’Dwyer v Turnbull: prices going up and up and up v smashing the housing market.
I mean, what the assistant treasurer said this morning contradicts what the prime minister said yesterday in parliament. I mean, this is the assistant treasurer. It’s not one of the Cory Bernardi brigade up in the Senate – the Turnbull haters within the Liberal party.
This is the assistant treasurer of Australia, contradicting the prime minister.
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Back to Shorten. Where’s the modelling on your negative gearing policy?
Bill Shorten:
Our proposals have been modelled to death.
Malcolm Turnbull persisted in his own view in the press conference.
What Labor is proposing is a massive shock and it will have inevitably, will have the result of cutting housing prices.
So if the Labor party’s policy is to cut the value of housing, is to smash people’s property values, is to cut their equity.
Just in case we are sprinting too quickly here, and in case you are just tuning in, let me step you through this.
This was Malcolm Turnbull in the chamber yesterday.
They [Labor] want the price of your home to go down, that is their objective, and if they win the election they will succeed in smashing home values ... Vote Labor and be poorer. Vote Labor and see your house price go down.
This was Kelly O’Dwyer this morning.
The Labor party has a very irresponsible campaign. They have got a policy that will increase the cost of housing for all Australians, for those people who own a home and for those people who would like to get into the housing market through their negative gearing policy.
(I should note that O’Dwyer’s analysis is consistent with what the housing industry says, as my colleague Lenore Taylor noted in an analysis piece this morning.)
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Bill Shorten, addressing reporters now, says the government can’t even get it’s scare campaign straight.
Assistant treasurer contradicts the prime minister on housing prices
I’m listening to the prime minister but thanks to my colleague, Shalailah Medhora, here’s what Kelly O’Dwyer said earlier. It’s straight up and down: she’s contradicted the prime minister. This is from the Seven Network this morning.
Q: OK, the prime minister has been under attack over the government’s tax policy. Malcolm Turnbull has put an increase in the capital gains tax back on the agenda. There has been some confusion. Are you prepared for Labor to keep up the pressure until we see the government’s full tax policy? Are you preparing a full tax policy?
Kelly O’Dwyer:
Well, there has only been confusion because some people have been very misleading. The prime minister has made it very clear the government is not going to be changing the capital gains tax arrangements with respect to negative gearing. We have been very clear on that. The prime minister said it a lot.
The Labor party has a very irresponsible campaign. They have got a policy that will increase the cost of housing for all Australians, for those people who own a home and for those people who would like to get into the housing market through their negative gearing policy.
We think it’s reckless and irresponsible. We think that you need a considered and adult conversation with the Australian people to let them know what the implications are.
This is what’s known in the trade as a debacle.
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Reporters aren’t particularly interested in changing the conversation. They are back to tax, which has been the government’s rolling debacle of the week.
Q: This morning on television, your assistant treasurer, Kelly O’Dwyer, said house prices would rise as a result of Labor’s negative gearing policy. Yesterday in parliament and previously you said they will be smashed. So which one is correct? Will they rise or will they fall?
Malcolm Turnbull hasn’t seen O’Dwyer on the telly. Neither have I. I’ll chase it up. The prime minister sails forth by holding the line on what he said yesterday (Labor’s policy will push the price of housing down), although he notes on the way that “house prices rise and fall like any other asset class”. He suspects O’Dwyer “was referring to new housing which, of course, is a very small percentage of the housing stock”.
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The prime minister has just been stopped by reporters outside a function he was attending to raise awareness about ovarian cancer.
Malcolm Turnbull notes the interest this morning in the defence white paper.
I’ve noticed some interest in an announcement tomorrow, the release of the defence white paper. Obviously that is a very substantial piece of work. It sets out the plan for Australia’s defence, security, investment; it’s focused on securing our nation, decades into the future.
It will set out how we will give our defence forces the resources they need, the capabilities they need, to keep us safe and to ensure that we play our part in delivering and ensuring regional security. It is fully costed, it is a thoroughly, carefully, fully costed document, and in that sense it is very different to the last defence white paper delivered by the Labor party under which, of course, there were substantial cuts to defence spending.
(Anyone think we might be “changing the conversation” this morning? Just me?)
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Let’s kick off with the defence white paper. I mentioned to readers on Monday I expected to see the white paper this week. Last night, in the lovely Muse bookshop in Kingston, I told a bunch of folks who had come out because they are interested in political reform that we’d see it Thursday.
The Australian’s defence correspondent, Brendan Nicholson, has what looks like a good chunk of it this morning. Nicholson reports that an extra 5,000 people will be recruited to the services, and Malcolm Turnbull will keep Tony Abbott’s promise to increase defence spending to 2% of GDP within 10 years of the Coalition’s election. He says the Royal Australian Navy’s submarine fleet will be increased from six to 12, and the white paper “will also include a strong recommitment by the Turnbull government to regional engagement, stressing the need to work closely with all of Australia’s neighbours”.
For people who haven’t followed the white paper debate closely, this document has been delayed several times, largely because of the revolving door of defence ministers under this government. You might recall David Johnston moved on from the portfolio after observing helpfully that the Australian Submarine Corporation couldn’t build a canoe, then Kevin Andrews lost the portfolio after Malcolm Turnbull took the leadership from Tony Abbott, then the new defence minister, Marise Payne, wanted to put her own stamp on proceedings.
White papers are pored over for what they say about defence posture in the region, which is really code for how Australia views the intentions of our near neighbours. That’s all good stuff. But I for one will be quite interested to see what the new white paper has to say on the subject of climate change.
Small thing I know, but during the consultations leading up to the production of the white paper, climate change was raised consistently by various stakeholders as an issue the defence white paper needed to grapple with. And I have lived long enough to see this government release an energy white paper that failed to invoke that subject. One would assume grappling with climate change and the imperative of carbon constraint was quite fundamental to energy policy planning, so it must have been quite hard to produce a white paper failing to reference the elephant in the room. Can the government actually pull that one off twice?
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A reader on Twitter thinks it’s too early for Dennis Jensen. This is more than likely correct. I’ll be back shortly with less vexatious matters.
Good morning soldiers of political fortune and welcome to Wednesday. I don’t know how you are all feeling, but I’ve been buoyed by a glorious sunrise in Canberra this morning – pink and gold light, with a full moon still high in the sky.
There’s lots in the political news cycle this morning: previews of the defence white paper (which will be released tomorrow), discussion about media reform, analysis of the prime minister’s tax troubles yesterday, a good story from my colleague Lenore Taylor about hospital funding – but I’m not going to open on any of those issues.
I’m going to start today with the Liberal MP Dennis Jensen, who made a speech to parliament earlier this week that flew under my radar.
Jensen (for those who may have never heard of the West Australian Liberal MP) is a man of strong views. This week he’s arguing that Australia should not have any specific Indigenous policies. In fact, he believes there should be no race descriptors. Positive discrimination and affirmative action, he told parliament, was a “40-year failed experiment”.
Dennis Jensen:
We need to have policy to address issues, not race. Very few policy problems are absolutely unique to Aborigines, and even where they do exist they are best addressed in terms of the issue, not the race.
So we should not deal with Aboriginal alcoholism, Aboriginal child abuse, Aboriginal incarceration or a whole host of other issues. Instead, we should deal with alcoholism, child abuse, incarceration etc, wherever we find it.
There’s more, and it’s a brave man who invokes the noble savage as a descriptor in the Australian parliament, but I think we’ve established by now that Jensen is a brave sort.
Spoiler alert. Lifestyle choices is also coming up, just over the hump.
Dennis Jensen:
I put it to the members of this place that the taxpayers of Australia should not be funding lifestyle choices. Yes, I agree with the former prime minister, the member for Warringah, when he refers to Indigenous Australians’ choice to live in remote communities as ‘a lifestyle choice’.
In essence, if the ‘noble savage’ lifestyle, a la Jean-Jacques Rousseau, the same one often eulogised, is true, then there is nothing stopping any Indigenous men or women from pursuing such an existence on their own. Just do not expect the taxpayers to subsidise it.
My contention is that the ideal of the noble savage may be less sanguine and altogether more Hobbesian: ‘nasty, brutish and short’.
I felt quite sure readers would be interested in this intervention, hence the sharing. I’m a supporter of blue sky thinking when it comes to Indigenous policy given the data shows us the current approach is not delivering the outcomes we want when it comes to closing the gap.
The difference between Dennis Jensen and me (well one of them anyway) is I’m conscious that I’m a privileged white woman and as such, it is ridiculous for me to be ladysplaining the various problems and delivering Indigenous people the benefit of my non-existent wisdom. I don’t think you can patronise or troll your way to a solution. I’d respectfully submit that we’ve already done far too much of that, and it shames all of us.
Indigenous people have made it perfectly plain that they would like to determine what happens in a policy sense in the future, that they need to set their own roadmaps rather than have the wise white man and woman treat them like bit players in their own drama. As a case study in what not to do in this space, this morning we all raise our tea cups to salute Jensen and his contribution to the marketplace of ideas.
Speaking of the marketplace of ideas, the thread is wide open for your business. Magic Mikearoo and I are up and buzzing on the Twitters. He’s @mpbowers and I’m @murpharoo
Gather round. Here comes Wednesday.
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