Round of applause, please
Something about Zoolander economics that made me want to say goodbye with this picture. Signing off with a bit of Blue Steel.
Now huge thanks to the readers for being here in such numbers throughout the parliamentary fortnight when there’s been big news everywhere. Mike and I salute you.
I’ll wrap with a few thoughts about the fortnight.
We’ve seen a significant intensification of activity. All the denizens of parliament house have the whiff of an election in their nostrils, and the pace of the political day shows it.
There’s been a significant chest bump between Tony Abbott and Malcolm Turnbull. Turnbull has sent a message to Abbott that he’s not inclined to tolerate sniping and undermining. It will be interesting to see how Abbott responds. Does he pull his head in for the good of the government, does he escalate to destructive effect?
Labor and the Greens war for progressive votes has been particularly brutal over this fortnight, with the flashpoint being the Senate voting reform package. The Greens siding with the government on the voting reform package is a bold strike by them: they are trying to project themselves into permanent balance of power. John Howard was quite right to draw attention to that being the logical consequence of the change, and to wonder out loud whether his Coalition colleagues had really thought this one through. But in the long term, there’s a big reckoning for Labor. Do you continue the turf war, or do you contemplate some form of long term coalition? And if it’s to be coalition, the Greens will have to resolve their constant tension between being a party of protest and a party of government.
Apart from the scrap with the Greens, Labor is walking around with a spring in its step, sensing weakness in the government. They are right, there is weakness in the government. But life will become more challenging if Abbott can avoid the impulse to behave destructively. It looks like the government is going to occupy the “modest/incremental” space for the election contest, leaving the “bold/reform” space for Labor. I’ve said all along I think Labor’s negative gearing policy is politically risky, particularly if the government steps back from politically tough tax reform and leaves Shorten right out there. There are tough days ahead, and Labor won’t always be saved by stupid over reach by various government folks. Some days the government will get it together, leaving Labor to fight a tough fight.
Anyway, enough for now. Have a great weekend, and be safe until we meet again for the final sitting week before the budget.
The minister for women, Michaelia Cash, says she’s disappointed by the findings of a new report that says women in senior management earn an average $100,000 less a year than their male counterparts. The report into into the gender pay gap, released by the Workplace Gender Equality Agency overnight, makes a number of alarming findings including that women earn an average of $600,000 less over ten years by the time they reach senior management. Once they’re in senior management, women are likely to continue earning less. “I was very disappointed by the data,” Cash told the Senate. “If we can get more women into work and particularly into those jobs where they can earn a comparable salary to a man, we will take steps towards reducing the gender pay gap.”
In clear evidence I need to stop live blogging shortly, I call this sequence, “does my face look flabbergasted in this?” A former prime minister and defence minister, a current defence secretary and defence minister.
Blame Magic Mike.
Updated
Backtracking slightly to cover off the departure of Michael Lawler from the Fair Work Commission. Lawler resigned today as the vice-president of the Fair Work Commission a day before he was due to respond to a report investigating his use of sick leave.
The employment minister, Michaelia Cash, confirmed Lawler had notified the governor general of his resignation, which “commences with immediate effect”, she told the Senate today.
He had been the subject of a four-month investigation by former judge Peter Heerey over his use of sick leave while on a $435,000 salary.
At the time the investigation was announced in October Lawler had taken about nine months of the past year as leave.
Concurrently he was also assisting his partner, Kathy Jackson, fight allegations she had embezzled money from the Health Services Union, which she led.
Lawler had until Friday to respond to the report, received by the government in February.
David Johnston would be remembered by many Politics Live readers as the defence minister who once observed that the Australian Submarine Corporation could not build a canoe. He was removed from his portfolio by Tony Abbott and replaced by Kevin Andrews.
Johnston is on Sky News at the moment. He’s been asked by Sky political editor David Speers about whether he, like Tony Abbott, was “flabbergasted” when the prime minister pushed back the timetable for the acquisition of submarines in the defence white paper.
Johnston isn’t bothering to be very diplomatic.
No, I wasn’t because I understand what’s involved.
Q: So why didn’t Tony Abbott?
Because I was across the detail.
I’ve had a quick chat with Chris Bowen’s office to try and clarify some of the points raised by the prime minister in question time today.
The simplest way of explaining Labor’s policy is probably this: if there is an “active” investment, like the prime minister’s example in question time of two people investing in a truck, then people will continue to be able to gear their investment. If it’s a “passive” investment – like property, or shares (which you finance through practices like margin lending), then Labor’s policy kicks in.
As further and betters come to hand, I’ll update. Right now I need to press on. Former defence minister David Johnston is speaking about submarines.
Further questions have been placed on the notice paper. Give me a minute to survey the landscape and I’ll be back with the afternoon.
Have you ever wondered whether there was more to life than being ridiculously good looking?
The prime minister:
I have never heard of a proposal to deal with negative gearing beyond the residential housing sector. Maybe there have been. I’ve not seen them. This proposal is a dramatic, extensive attack on the entire Australian economy.
The agriculture minister, Barnaby Joyce:
This one is truly Zoolander economics. What do we do with things such as margin lending? What do we do with things such as negative gearing on housing? How do we deal with partnerships?
How does this economy work under this form of Zoolander economics?
Turnbull, continuing.
What the opposition is doing is proposing that there can be no negative gearing in respect of any other asset class, including shares and any assets other than new residential property.
Mr Speaker, we know the Labor party hasn’t modelled the impact of their policy on housing. Nobody would have ever modelled this proposal because it is so inconceivable, so reckless!
What possible relationship to housing affordability does a person’s capacity, under normal income tax principles, to negatively gear an investment in shares or some machinery or a vehicle?
What we are not going to do is make policy on the run.
(The prime minister in answer to a question about whether he’ll rule out adjusting super taxes as part of the tax policy.)
Malcolm Turnbull, undeterred:
What this document does is restrict the ability of every Australian to invest in any other asset class apart from new residential property and claim a net loss against their other income.
So no more business partnerships, unless you want to run the risk of paying for the losses out of after-tax income. No more investing in businesses, or setting up a company, it might be a couple of tradesmen, tradeswomen setting up a company – they won’t be able to do that because if they borrow money to buy the shares and they don’t get enough dividends to offset the interest then they won’t be able to deduct it against income.
Malcolm Turnbull:
Let me detail Labor’s negative gearing policy ..
Chris Bowen:
You might as well detail Labor’s because you can’t detail your own!
Just letting you know.
#BREAKING: Fair Work Commission Vice President Michael Lawler has resigned from the commission effective immediately.
— Sky News Australia (@SkyNewsAust) March 3, 2016
I’ll come back to this when time permits.
Labor’s Kate Ellis.
Q: Isn’t it the case that by rejecting Labor’s housing affordability plan the prime minister is choosing to protect $32bn of tax loopholes at the same time he is cutting $30bn from our schools?
Malcolm Turnbull goes to his critique of the policy.
I suspect some Honourable Members opposite ... were not aware of how radical this policy is. The policy document is headed “housing affordability”, but in fact what it does is it removes the right to offset the losses from any investment against wages or salary, personal income, unless that investment is a piece of new residential housing. It expressly prohibits negatively gearing investments in shares and other assets as the shadow treasurer said this morning.
If some people set up a business and borrowed money to buy the shares in the company, they could not offset any losses against their income. Mr Speaker, what this constitutes is a full-frontal assault on business in Australia. It seeks to restrict citizens’ ability to invest, not just in established residential property but in every single asset class, every single asset class other than new residential property.
The scale of this disruption is enormous.
I suspect this breaches the no props rule.
Dorothy Dixers have trended back now to terrible unions and how much Labor loves terrible unions.
Just a mild observation. In general, the government’s arguments this week about the potential deficiencies in Labor’s negative gearing policy have been much sharper, far less hysterical, than the scare campaign of week one.
If the government didn’t keep over-egging with silly sorties like the BIS Shrapnel report, we would have spent more of this week looking at the detailed arguments: does the Labor policy advantage higher income earners/will it trigger a bunch of unintended consequences in the housing market/will it impact the resale market for investors in damaging ways?
These are all reasonable questions. But the government keeps muffling its legitimate critique with silly overstatement and over-reach.
Shorten again.
Q: Today the treasurer’s continually staked his credibility on the credibility of the BIS Shrapnel report. Is the prime minister aware that respected economist John Daley of the Grattan Institute has rejected that same report, saying: “Voters should be asking themselves whether a responsible government would rely on this sort of nonsense in a public policy debate.” Is this morning’s farcical performance from the treasurer what the prime minister meant when he promised to respect the intelligence of the Australian people?
Malcolm Turnbull outlines his critique of Labor’s policy. He finally winds round to BIS Shrapnel. Labor’s policy is ..
... so much worse than that contemplated by BIS Shrapnel.
Nobody – no-one could have imagined such a reckless assault on Australia’s economic freedom as this!
Back briefly to Bert Van Manen and life insurance. A spokeswoman for Van Manen has now confirmed the Queensland MP is opposed to bolstered regulation for the life insurance industry – including the scaling back of up-front and ongoing commission payments.
“He’s been in consultation with quite a few independent financial advisors who are going to be significantly affected by this. He has spoken to Kelly O’Dwyer and let her know that ... because of a few apples, a lot of people will be punished,” she said. “It’s not about protecting mates of anything like that. He just understands people will be worse off, punished when they’re not doing the wrong thing.”
As ASIC review of the industry, which prompted these changes, found a strong correlation between high up-front commissions and poor outcomes for consumers, including being “churned” through a number of different, largely unnecessary products.
Updated
Independent Bob Katter asks about the backpacker tax, which has been controversial in the regions. Morrison acknowledges the controversy and suggests the proposal could be adjusted in the coming budget.
On the BIS Shrapnel report now. The shadow treasurer Chris Bowen would like the treasurer Scott Morrison to admit he’s a goose.
Q: Does the treasurer admit his claims were wrong and he attached himself to a report with a $1 trillion error?
No, Morrison is not inclined to admit he is a goose.
It is true the BIS Shrapnel modelling does not include all the elements of Labor’s policy. It doesn’t include the 50% increase in capital gains tax, Mr Speaker!
The member for McMahon has come to the dispatch box all hairy-chinned and hairy-chested, Mr Speaker.
He’s come here and he’s talked about a typo in the report.
Morrison says Bowen can’t quibble about typos, given there’s a typo in his book which turned billions into millions.
You want to talk about typos - check your own book!
Labor is back now on the leak to the Australian.
Q: Will the prime minister today explicitly express confidence that this leak has not come from any current or former member of the national security committee of cabinet?
Manager of government business Christopher Pyne says how can the prime minister answer this question given the police have been asked to investigate the leak and identify the leaker?
Speaker Smith waves it through.
Malcolm Turnbull:
Of course I have confidence in all of my ministers.
Mr Speaker, as this matter is part of an ongoing investigation ... I am not going to comment on it any further and the leader of the opposition should consider whether he wants to continue to make mischief out of what is a very serious matter.
Updated
First Dorothy Dixer is pulling the levers of government.
Question time
Gather round for the last hour of glower of the week. The Labor leader Bill Shorten is picking up on the Pell evidence.
Q: Will the prime minister join with Labor and commit to a single national redress scheme for survivors of child sexual abuse?
Malcolm Turnbull says the government recognises the importance of developing a national approach to redress as quickly as possible.
Survivors want redress, they deserve redress to assist with the healing process.
He then throws to Christian Porter, the minister for social services, who says this.
I don’t think anyone in this House should underestimate the intense difficulty which will be occasioned in trying to workout a national scheme or national approach, and we favour the latter, but this will revolve around issues of funding.
One of the reasons we determined to follow the second of the two options the Royal Commission noted is that it will necessarily involve cooperation and agreement from each and every jurisdiction.
We are trying the second way and I do believe we can be successful.
Chalmers notes the government is an ..
... economic omnishambles!
Warning. Do not play this clip if you are uncomfortable with bad language.
But if omnishambles is a new concept for you, and you don’t mind a cuss, this clip will provide valuable context.
Cheeky of Chalmers, given Labor has endured Gary Gray’s theatrical freelancing and Joe Bullock’s resignation this week, but at least this will give us a pre question time laugh.
Speaking of question time, just over the hump. Pour yourself a stiff scotch.
I think we can take Hawke’s comments as confirmation a backbencher has fallen off the wagon on the life insurance bill.
Liberal Alex Hawke is attempting to clean up now at the dispatch box.
Hawke says Bert Van Manen is allowed to disagree.
We handle disagreement well.
(Laughter from across the dispatch box.)
Alex Hawke:
You laugh because you are bunch of communists. You execute people who disagree with you!
Updated
In the House.
On a day when it is just total mayhem ...
This is Labor’s Jim Chalmers, who says a government backbencher, Bert Van Manen, has just told the chamber he will not support the government’s life insurance bill.
This is a very big deal, Mr Speaker. This government is hopelessly divided on economic policy.
(I was watching Peter O’Neill and didn’t see his intervention. I’ll check when there’s a moment.)
Updated
Meanwhile, back to the negative gearing fracas. That BIS Shrapnel report? It wasn’t us, says the property council (the lobby group representing property developers.) We didn’t commission it. We didn’t release it.
Property Council say they didn't commission the BIS Shrapnel report into negative gearing #auspol pic.twitter.com/uddgL3kT5N
— Political Alert (@political_alert) March 3, 2016
Manus Island detention centre has damaged PNG's reputation, says prime minister
Over at the press club, PNG prime minister Peter O’Neill has been asked whether he feels the Manus Island detention centre harms his country’s reputation. Yes, is the answer.
It has done a lot more damage for PNG than anything else.
O’Neill says he inherited the detention facility from the previous government. We have a responsibility to make sure it works, that refugees are resettled, that non genuine refugees are sent back, he says. O’Neill says there are issues around the costs of resettlement – PNG can’t afford to resettle these people.
He suggests conditions on Manus aren’t bad. In terms of the refugee safety, they [the detainees] have been very well looked after.
He says it is up to the Australian government whether they close down the centre or not.
But for his part, he’d like out of this arrangement.
At some stage of course, we need to close the centre. These people can’t remain on Manus forever.
Updated
Reports today have quoted Malaysian officials saying debris washed up in Mozambique may be from a Boeing 777 – the same type of aircraft as the missing Malaysia Airlines flight MH370, which disappeared two years ago.
The transport minister, Darren Chester, has issued a statement.
A piece of metal, approximately one metre in length, has been found on a beach in Mozambique. The debris is to be transferred to Australia where it will be examined by officials from Australia and Malaysia, as well as international specialists.
The location of the debris is consistent with drift modelling commissioned by the Australian Transport Safety Bureau (ATSB) and reaffirms the search area for MH370 in the southern Indian Ocean.
MH370 disappeared on 8 March 2014 en route from Kuala Lumpur to Beijing with 239 people aboard. As we approach the second year anniversary, our thoughts remain with the loved ones of those on board and in particular those who have called Australia home.
Updated
Laments. I've got a few.
I missed this earlier on today but I’m told Labor’s Gary Gray is still rattling around the place unhappy about Senate voting reform. Readers on board the Politics Live express yesterday will remember that Gray is no longer the shadow special minister of state. Those responsibilities have been transferred to Brendan O’Connor.
Gray (who will retire at the coming election) has recently been embroiled in hand-to-hand combat with the Senate leadership of the ALP over the government’s proposal to change Senate voting rules. He supports the government, while Penny Wong and Stephen Conroy do not support the government.
In a statement to the federation chamber today, Gray was still fighting the good fight.
The bill that the House of Representatives will deal with is an amended bill that was pretty darn good. The amendments that will be put forward in the House of Representatives will improve that bill even further.
I regret I won’t vote for that bill. I won’t vote for that bill because my party won’t vote for the bill.
I think that’s sad, I’ve lamented on that matter before ...
Politics this lunchtime
Keep calm and grip and grin.
Let’s take stock of Thursday’s cabaret.
- Treasurer Scott Morrison grabbed the nearest flotation device, a report from BIS Shrapnel suggesting imminent ruination if any government touched negative gearing. This document was a very damning indictment of Labor’s policy, the treasurer told the ABC shortly after sunrise, and reporters shortly after 7.30am. Except of course it wasn’t. About 30 minutes later BIS Shrapnel said it had not examined any policy at all in work it had done for a client, who like Lord Voldemort, could not be named. The shadow treasurer, Chris Bowen, declared this cock up meant the treasurer had failed the credibility test.
- The government is continuing to edge the idea they will do anything themselves on negative gearing to the kill zone without actually killing off the idea formally. Apparently one should not rush to killing off an idea let that appear reckless, like Labor’s recklessness. Or perhaps no decision has yet been taken.
- The prime minister has declared himself not interested in personalities the day after calling in the federal police to investigate a leak which the former prime minister Tony Abbott amplified by providing on the record commentary about confidential documents obtained by The Australian. Malcolm Turnbull professed interest in regular walking to stave off obesity and creating jobs for our children and grandchildren.
- Agriculture minister Barnaby Joyce observed that honeymoons don’t last forever.
Onwards and upwards to 2pm.
Updated
Just before I post the summary, my colleague Lenore Taylor has some news.
The former defence minister Kevin Andrews sought to appoint a long-serving adviser to a key defence force position during the time between the Turnbull leadership coup and the new leader announcing Andrews would be losing his ministerial position, Guardian Australia has been told.
Senior sources said Andrews, a loyal supporter of the former prime minister Tony Abbott who was widely tipped to lose his ministerial spot after the leadership change, sought to appoint his long-term adviser to the position of inspector general of the Australian defence force during the six days between the September 14 leadership ballot and the September 20 announcement of the new Turnbull ministry.
(I did tell readers yesterday two tribes in the government have gone to war. If you plan on visiting Parliament House in the near future, perhaps bring some body armour. Might be a reasonable precaution. Just saying.)
Updated
Various ministers from the government of Papua New Guinea are in town.
Peter O’Neill, the PNG prime minister, is due to address the National Press Club in just a little while. I’ll take stock of the morning in the next post.
Updated
Quite obviously honeymoons don't go on forever ..
Earlier today, on the wireless, Joyce thought it was time for a truce between Turnbull and Abbott. Primrose Riordan from the Australian Financial Review has a couple of quotes from the interview.
Barnaby Joyce:
I think we’ve got to all get to get together as one, we’ve got to go to the election unified there will be an election this year. Quite obviously honeymoons don’t go on forever. Ultimately the press want a competition, it’s in their interest. The press have a role and responsibility to be the critical arbitrators of the forth estate and that’s precisely what they do.
Updated
Down in another courtyard, the agriculture minister, Barnaby Joyce.
Q: Has the government ruled out negative gearing?
Um, good try.
We’ll follow a methodical process.
There’s budget coming up. The budget itself is a tax plan.
Updated
Release the ferrets! All the ferrets!
Terrific picture from Mike Bowers of the shadow treasurer in full flight.
Updated
Wrong on a family blog, but I’ll share it anyway.
@murpharoo the reverse ferret comes before or after the squirrel grip?
— Farmering Dad (@DamienCWalker) March 3, 2016
On reflection it’s not so much reversing the ferret as picking up the ferret and shoving it in the face of your opponent.
I know it’s obvious but I’ll say it anyway: overstatement tends to exist in close proximity to election campaigns. The closer the campaign, the greater the tendency for over reach.
Let’s cut through here.
Morrison shouldn’t have presented a report that didn’t even look at the Labor policy on negative gearing as a savage condemnation of Labor’s policy. That’s any port in a storm behaviour unworthy of the office he holds. Desperate, tabloid and dumb.
But this nonsense from Morrison is just garden variety intra-day political opportunism. Utegate was on a whole other level.
Down in the courtyard, the shadow treasurer Chris Bowen is out declaring Scott Morrison is shrinking before our eyes. Bowen says Morrison needs to stop lying and release his own tax policy.
This goes to Scott Morrison’s character and credibility as treasurer.
Labor is busy attempting to reverse the ferret on the BIS Shrapnel report, given the consultancy has now clarified that the report being pushed by the government today is not, actually, an analysis of Labor’s negative gearing policy.
Bowen is attempting to liken this episode to the Godwin Grech affair, where fakery damaged Malcolm Turnbull when he was opposition leader.
Back in the Senate, the Family First senator Bob Day is now fretting about children in the Netherlands.
Day says safeguards in euthanasia legislation are not safe. [Brief pause].
Nor are they guards.
Updated
Word around the building is the prime minister isn’t sold on the idea of going to a double-dissolution election, despite all the groundwork the government is putting in to set one up.
Various ministers, including Christopher Pyne, have been lunging out of the blocks on the double D point, presenting it as a near certainty from the government’s point of view – leading John Howard to note somewhat archly over the last couple of days that public statements about elections really should reside with prime ministers.
With Turnbull’s cool feet in mind, it’s interesting to read Niki Savva in the Australian today making a vigorous case for him pulling the double dissolution trigger. Just get on with it Malcolm is her analysis.
If he waits and allows a double dissolution to slip away, he runs the risk that he will not be able to fully capitalise on measures to combat union corruption that will provide his trigger.
He also runs the risk his tax policy and the budget will disappear into the 24-hour media vortex, and that the drumbeat will begin again after a brief respite for another new agenda for the election. There is much to fear from a long campaign but, given it is already effectively under way, there is little to gain by waiting and the campaign becomes longer still.
Waiting will also ensure the survival through another term of most of the crossbenchers, some of whom have earned the right to spend more time at home with their families, where they can eat Maccas whenever they like and we won’t have to pay for it.
Sooner rather than later, Turnbull needs to put his agenda to the people and he has to stamp his authority on the party and on the policies he puts forward. Last time I checked neither Tony Abbott nor Cory Bernardi won last year’s leadership ballot.
Updated
Q: Are any changes to negative gearing under consideration? Or is it in the GST ‘too hard’ basket?
Turnbull starts with the history of the tax review. He says nothing under his prime ministership has been kicked into the long grass for political reasons. He says the government looked at the GST very carefully before determining action wasn’t worth it. He says when the government has completed the rest of the process it will let the public know.
Q: Negative gearing prime minister?
Turnbull says there are dangers rushing into policy that hasn’t been thought through. He says the government respects the intelligence of the Australian people by looking at the evidence and then making announcements.
Q: So it’s still on the table?
We are not going to be providing a running commentary on our own processes.
Updated
The prime minister is asked whether he believes Tony Abbott when he says he didn’t leak sensitive cabinet material to the Australian. The prime minister says he isn’t interested in personalities.
Q: Do you believe Tony Abbott is undermining you?
My focus is on ensuring we have great jobs for our children and grandchildren ...
Updated
The prime minister has bobbed up at today’s off campus event. Right now Malcolm Turnbull is extolling the benefits of walking. Walking prevents people from becoming obese.
Once you draw a line in the sand, there are always demands for the line to be moved. It’s human nature.
Cory Bernardi, still talking about people being killed because they have anorexia.
Outside the chamber, the number of children in immigration detention has fallen to 58, according to the immigration minister, Peter Dutton, who revealed the figure during his weekly radio interview with Ray Hadley. “We’re getting the number closer to zero,” Dutton said. He acknowledged that the legal wrangling over Baby Asha will likely continue, labelling it a “stalling tactic” by lawyers. “We’re likely to be back in the high court,” Dutton said.
Updated
In the Senate, the Liberal Cory Bernardi is speaking about the “slippery slope” in the event that euthanasia laws clear the parliament. I mentioned earlier in the week there’s a cross-party group attempting to get a euthanasia bill through the parliament. He’s worried about children in the Netherlands, who he says are permitted to die under the prevailing regime in that country. Or the elderly, who may feel under pressure. Or depressed people who want to die, but then get treatment and subsequently recover. He’s speaking about a 44-year-old woman who died because she had anorexia. Euthanasia is dangerous, he says.
Updated
There’s another NBN leak this morning. Earlier in the week there was an internal document suggesting delays and cost blow-outs in the rollout, now, Fairfax reports, the company building the national broadband network has “quietly trialled a new, low-cost fibre-to-the-premises technology that could achieve the speed and reliability of an all-fibre system to the home, as originally intended by Labor, but at a reduced construction price. But despite the promising results, NBN Co has so far declined to release them, as the government defends its preferred model, which relies principally on copper phone connections for the final link from the neighbourhood cabinet – or node – to the premises.”
I suspect we’ll hear a little of this in question time later on.
Updated
Just a quick recap, Malcolm Turnbull and Bill Shorten both attended an International Women’s Day breakfast in Parliament’s Mural Hall earlier this morning. Both leaders paid tribute to their deputies and the women who make up their frontbenches. The prime minister talked of the importance of encouraging greater economic participation by women, labelling it a priority for any government. He reiterated his argument that all violence against women starts with disrespect and urged parents to “ensure that their sons respect the women in their lives”. The opposition leader called for reform of the family court system, saying that survivors of domestic violence face a “long and impoverished” battle to get help. He said awarding perpetrators of violence equal access to their children was “just wrong” and needed to be reviewed.
Updated
I haven’t had a chance yet to get to The Leak and its consequences. Readers with me yesterday will know that there was a significant escalation in tensions between Tony Abbott and Malcolm Turnbull yesterday. Abbott was quoted earlier in the day in the Australian bagging the current prime minister’s position on submarine purchases, in an article that also referenced leaked material from the national security committee of cabinet. Turnbull decided not to take that one on the chin. He called in the AFP.
Scott Morrison was asked about these developments this morning. He hopes the investigation identifies a culprit.
Well, people will make their judgments about who the target was on all these sorts of things. I’m just not going to get into a commentary on it because the right action has been what the prime minister has done. I mean he’s focused on this on what is in Australia’s interests and that is to protect our national security and ensure that the integrity of the way these sensitive matters are handled and respected is preserved. Now that’s why he’s taken the action he’s taken and whoever the culprit was, well, I certainly hope the secretary of defence gets their man or woman.
Updated
Scott Morrison from earlier today on the report that the authors say doesn’t actually model Labor’s policy.
[The BIS Shrapnel work] is a credible report and it shows what we said would happen with Labor’s policy. It would have a significant impact on property values; it’s going to push many people into housing stress. It’s going to require compensation of hundreds of millions of dollars, more than is actually raised by the policy itself.
And what it shows is [Labor] just haven’t done their homework on this. They’ve rushed out there with this policy, they’ve cobbled it together. It has a devastating impact on property markets and people’s homes.
Dear world. If there is any modelling out there to this effect (or to any other effect), by all means, send it my way.
This modelling was not directed at any policy at all: BIS Shrapnel
Kim Hawtrey from BIS Shrapnel has done an interview this morning with ABC NewsRadio. Key quote. This modelling was not directed at any policy at all.
Q: Labor not surprisingly has rejected your findings, they say this isn’t real modelling and this is not modelling based on any Labor policy.
Kim Hawtrey
Well the report was written over the last few months before Labor released its policy and it wasn’t directed at any particular policy at all and in fact we’ve made no recommendations, our job was simply to chase the effects on the economy by crunching the numbers and looking at what might happen if you did this kind of change.
Q: The vital bit of information missing from your account, which has been pointed to by many this morning, is who commissioned it? Who did pay for this modelling?
Kim Hawtrey:
I’m not at liberty to say that but I can say that it’s not a political organisation or anyone affiliated with a political organisation, it’s simply a private client.
Q: Is it the building, developers lobby interests?
Kim Hawtrey:
No, it’s not and it’s commissioned for commercial reasons not for political reasons, and there’s no mystery or sinister plot there to uncover.
Q: Well there is a mystery and some people are seeing it as sinister, why so secretive?
Kim Hawtrey:
That’s a request of the client.
Q: But modelling simply in – it’s a universal of modelling that modelling supports the finding that clients want, you pay the piper you get your tune.
Kim Hawtrey:
No, we’re an independent company and we are simply doing what economists do and we are impartial and dispassionate in the way that we conduct our economic analysis.
Q: But what economists do is build models based on assumptions and it depends on who’s providing the assumptions, clients provide assumptions without knowing who the client is, this is simply an anonymous press release.
Kim Hawtrey:
No it’s a piece of analysis by an economics consultancy firm and it’s based on a set of assumptions that could be implemented and the purpose is to trace the likely effects of that on the economy.
Q: Did you mention to your clients that if they want to remain anonymous questions are going to be asked about who paid for this modelling.
Kim Hawtrey:
Well I suppose so but we’re releasing the report as a BIS Shrapnel report which is perfectly within our scope to do.
Updated
The Labor leader, Bill Shorten, has stopped to talk to reporters after the breakfast to sass the BIS Shrapnel report, a report he says was compiled before the ALP compiled its policy.
Q: Where’s Labor’s modelling on its policy?
This issue has been modelled to death.
(It hasn’t, actually.)
Q: Why don’t you fight the scare campaign with your own modelling?
We are fighting the scare campaign every day and I’m glad you recognise its a scare campaign.
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Malcolm Turnbull and Bill Shorten have been at an International Women’s Day breakfast this morning. I’ll catch up on the remarks there in due course.
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To another couple of substantive issues still in the budget/economy space. There are reports again this morning that the government has dumped the option of touching negative gearing. Earlier this week a number of backbenchers, including Tony Abbott, told the prime minister and the treasurer to back off negative gearing. Both John Howard and Peter Costello have both publicly advised against going there.
Morrison yesterday left negative gearing on the table. This morning he hasn’t taken it off the table but he’s certainly pushed it to a zone I’d call teetering on the edge. He’s said the government continues to do its homework on all the tax options (apart from a GST increase, which has already clattered to the floor) but he’s aware of the very great risks of messing with negative gearing concessions. In case we missed that, Morrison noted the dangers are very real.
There is also another report around picking up a theme first revealed by my colleague Lenore Taylor – who about a week ago reported the prime minister was attempting to stitch up an interim funding deal with the states on hospitals to stop premiers going berko during an election campaign about not having enough money to run their health systems.
Morrison was asked this morning about the status of this deal. He noted that sort of report is premature.
Some important context here. Morrison has been for some period of time saying the states need to fix their own budgetary problems rather than rely on Canberra doling out the cash for services. He’s made it abundantly clear he wants the states to sort this out, not the commonwealth – a rather brave stance in the Humphrey Appleby sense. From what he’s said publicly, I think it entirely safe to assume the treasurer would not be on board with ‘Operation Shut Up the States’. This morning he’s indicated all this remains very much work in progress.
Scott Morrison:
You shouldn’t assume there is a settled position.
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Chris Bowen, on Radio National Breakfast.
I was surprised [the BIS Shrapnel report] wasn’t predicting a locust plague.
Sticking with negative gearing, the ABC’s Michael Brissenden would like to know who commissioned this BIS Shrapnel report.
Q: Who commissioned it?
Scott Morrison:
I have no idea who commissioned it.
Q: How can we trust it?
Because it’s BIS Shrapnel’s report. Everybody knows who BIS Shrapnel are. Are you suggesting BIS Shrapnel is not a credible agency?
The shadow finance minister, Tony Burke, on Sky News.
If the government wants to wave a document around that’s clearly different to Labor’s policy then we’ve completely descended to vaudeville.
The shadow treasurer, Chris Bowen, on ABC Radio National Breakfast.
If they are trying to model Labor’s policy, they’ve got the basic facts wrong.
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Hello, it's Thursday
Good morning good people and welcome to Thursday, the final sitting day for the week. Many in the building will be recovering from a knees up last night marking the 20th anniversary of the election of the Howard government.
Gabrielle Chan was at the nostalgia fest and has filed a brilliant fly-on-the-wall account of proceedings. Unfortunate, given the events of yesterday, leaks and police investigations and all that, that Malcolm Turnbull and Tony Abbott found themselves seated together at the top table.
Gabrielle Chan:
Turnbull and Abbott sat within range but there was no interaction after the first handshake. No eye contact. It was like having the divorced parents at the same wedding table.
I’ll come back to last night’s event once we are up and running. Right now, all the action in the early morning political news cycle is around a new BIS Shrapnel report which is critical of changes to negative gearing.
According to the Financial Review the BIS Shrapnel report claims Labor’s negative gearing plans will increase rents by an average of 10%, or $2,600 a year, depress new home construction by 4% and shrink gross domestic product by $19bn a year. The Australian characterises the paper as bombshell modelling.
But a couple of significant caveats. 1. No one knows who commissioned this modelling. 2. Labor says the scenarios modelled are not Labor’s policy scenarios.
But given it’s been a ragged week for the government, the treasurer, Scott Morrison, has grabbed the spreadsheet warriors at BIS Shrapnel and given them a great big bear hug. The treasurer has been on the ABC and held a press conference afterwards at 7.30am. This new report, Morrison noted, is a “very damning indictment on Labor’s policy”.
[Labor’s policy] will drag growth, it will drag growth backwards.
We will never drag growth backwards on Politics Live. We are relentlessly forward types. Our readers are forward types too, and I’ve created the opportunity for forward marching by throwing open today’s comments thread. Go early, go hard.
Magic Mike and I are also up and about on the twits. He’s @mpbowers and I’m @murpharoo
Today’s motto? Live large – but don’t make yourself the subject of police interest. Here comes Thursday.
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