Politicians

Growth Rate Indicators

June 24, 2016 by James J. Morrison W.G. Dupree Leave a Comment

With many economic indicators over the past few years showing a downturn as Alan Austin has pointed out, it interesting that growth in the economy is a mantra for the conservatives. The LNP government’s assertions inherent in their three word slogan of “Jobs and Growth” presumes we are experiencing these in certain quarters. Let us begin examining a few.

Australia’s net population growth is still positive. Moving steadily from 19M in 2000 to 24M in 2016. The net populations growth by itself is the product of accumulated ebbs and flows. For example, in 2012-13 a total of 91,761 people indicated that they left Australia permanently. Many of them professionals but only half of them were actually born overseas. A concern for the department of immigration which sees it as “a loss of skills and experience as well as a loss of social investment in fields such as education, training, health services and settlement costs of immigrants”.

Diminishing population growth rates in Australia

The growth rate per year although, has been decreasing over time. From it’s highest point in 2008 of 1.22% it had fallen steadily to 1.09% in 2014 according to Miguel Barrientos founder of IndexMundi. From this site other statistics from multiple sources have been garnered. Australian birth rates have been steadily dropping from 13.08 in 2000 to 12.19 per 1,000 persons in the population (per 1K/Pop) in 2014. Death rates since 2000, have been increasing as would be expected our ageing population dominating and rose to 7.07 per 1K/Pop in 2014. So why, with thousands leaving, a growing death rate and slowing birth rate do we have a steady total Australian population growth? The answer to that and the anomaly of change you may have noted between 2007 and 2008 on all the graphs, is migration. The influx in migrants, whether they be asylum seekers, visa holders or all manner of foreigners, maintain our growth. Much to the ire of many red-neck Australian “tea party” proponents who would rather we send even more “back where they came from” than the 91K we lose in a year. While the Department of Immigration is optimistic that net migration rates will increase in the future – and has published optimistic forward estimates figures – the actual historical statistics shown no such trend. Net migration rate which was at 5.74 immigrants per 1K/Pop in 2014, has been steadily decreasing since 2008 when it was 6.34. Despite the annual departures without the larger influx, the total Australian population growth might be in serious decline. Given the financial, social and intellectual contribution the likes of migrants, including asylum seekers, have proven to supply Australia, it remains economically irrational to be restricting their entrance. They don’t take jobs as that irrational argument by some protests, they create them. The example of Karen refugees making $40m worth of contributions to the economy in Nhill, Victoria, is a classic case. Spending 1.2 Billion a year to keep them in detention, when they could be boosting our economy by millions is both wasteful and sheer economic vandalism. Taken for reasons that have more to do with politics of fear mongering that is pandering to the emotional insecurity of a racist Australian population. It certainly has nothing to do with good economic management of a resource that is, desperate to be here and that we are blocking. So if we are socially & politically inhibited in using the resources of people to aid our economy, are we working well with the population we have in seeking to grow our net wealth?

Our economic results are reported as positive news. Recent quarters have shown Australia’s economic growth has beaten expectations. This is particularly good news especially after our total GDP dipped in US dollar terms from 2013 to 2014. Unfortunately the growth rate in GDP despite numerous fluctuations, has been showing a falling trend generally since 1999. GDP per capita although, has shown a stead increase over the same time. It looks prosperous, provided you fail to account for wealth inequality.

One of the noticeable absences from Joe Hockey’s Intergenerational Report (IGR) last year, was no indicator of the Gini coefficient (a normally standard reporting indicator in previous IGR’s for socio-economic impact of policies). The Australian National University has noted that wage inequality has increased steadily from early 1980s onwards [1] and ACOSS has noted an increase in numbers of citizens living below the poverty line.

Poverty numbers in Australia thrust upward to 2.55 million in 2014 (over .6 million of that being children). This continues the long-term trend of growing inequality in Australia. This factors certainly skew the per capita growth in GDP towards the already wealthy demographic.

So many conservatives hope the coalitions focus on Jobs and Growth is a progressive step in the right direction to shift the burden of growing poverty and provide jobs that can lift our limited growth population out of poverty. So are jobs the solution and have jobs increased? Scott Morrison is loudly boasting, “yes they have!” And if you want to retain that shallow positivist joy, this is where you should stop in your examination.

Participation in the labour force has continued to increase to just over 12.78 million in May 2016. It was just over 12.46 million when the coalition government came into power. Unemployment has of course increased while available jobs in the market have decreased. Jobs growth (according to the Coalition) of 300,000 since they came into power, is not actually keeping up with labour force growth, let alone expanding to overcome the decreasing population growth rate aforementioned. When you consider that we have just turned over 11 months of consistent part-time job increases measured against the fifth straight months of full-time job decreases, then it is not hard to know where the real “Jobs and Growth” are occurring.

When Scott Morrison got excited about apparent jobs growth in recent ABS statistics, he did not delve too deeply into their makeup. But isn’t any job even if it is a part-time one, at least “a job”? Probably not when it cuts you off from Newstart support but just like “Newstart”, still leaves you in poverty. The recent years have seen the rise of an unemployment problem called “the working poor”. A phenomenon where working families who are subsidised by wages, live below the poverty line. Another unique employment issue (even recognised by the Telegraph who have a reputation for a lack of sympathy for the unemployed) is the homeless but fully employed demographic. The National Coalition for the homeless claimed 44% of homeless people have jobs and that was a claim from back in 2009. Given that the ABS does not rate you as unemployed if you have worked for as much as one hour in a month, none of these homeless demographics register as “unemployed” but they do qualify as part of the “jobs growth solution” boasted about by the Liberals.

But at least if you have one of Joe Hockey’s “good” jobs (or your family needs a couple of them) and can afford a home, you have to be making some leeway? Chances are, if you are not a baby boomer who has finally paid off your home and retired, you are burdened by an enormous amounts of private debt. Millions of Australians are lumbered with housing debt. Private Debt zipped past our GDP to loom above it by over 123%. The over $2 Trillion in private debt is being chased by it’s little brother, “Foreign Debt” who has only grown to over $1 Trillion but has ambitions. Australia is already living beyond its means with faint ambitions by the average wage earner to grow their wealth.

It is therefore a shame that Morrison’s “growth” part of the equation doesn’t include Australia’s hourly rates of pay. These have been steadily diminishing over the term of this government. Even the Reserve Bank has expressed their concerns over the how wage growth has declined markedly in Australia over the last few years. What has been growing at a rate that is outstripping our economic growth – that Morrison can boast about – is housing. As the global property guide proclaimed. “House prices rose by 11.4% in Australia´s eight major cities during the year to end-Q3 2015 (9.72% inflation-adjusted), up from an annual rise of 9.23% in a year earlier and the highest y-o-y increase since Q2 2010, based on figures from the Australian Bureau of Statistics.”

So in summary, Debt and housing costs are growing but wages to afford the debt and housing is not. If I were to provide advise, it would be if you have a full-time job, don’t leave it. They are vanishing and there is only growth in part-time jobs. If all you can find is a part-time job, the chances of you descending into poverty are statistically significant. Don’t live in major cities. Given there are at least 8 times the number unemployed as there are jobs in the market, your chances of getting a job,- even a part-time one – are slim to none. Australia won’t allow highly motivated foreigners – like asylum seekers – into the country to boost our economy, as they have historically proven to do over decades. In fact we would rather spend billions abusing them in offshore gulags, then give them that opportunity. This is the price of being insular and parochial. Conservatives with a reputation for a love of money would rather spend billions on locking people up when you could be exploiting them to create millions. Am I the only one that is puzzled by this? So with a slowly diminishing rate of growth for population, GDP, hourly wages, full-time employment, and innumerable other economic indicators and a rapid rise in debts, housing prices, part-time employment, poverty and inequality, has it occurred to anyone that something is wrong here?

The record of the current government is laid out in its last three years of office. On July 2^nd you have a chance to ensure this continues. That choice is your’s Australia!

——–//——–

[1] “Is Inequality Increasing?”, Powerpoint Presentation for Parliamentary Library Vital Issues Seminar, 10 October 2012 by Peter Whiteford, Crawford School of Public Policy

July afterthought.

With a heavy heart, I have only one comment to add to this article in the July that followed that election.

Australia, you have failed again! <sigh>

Negative Gearing

June 18, 2016 by James J. Morrison W.G. Dupree 1 Comment

Private debt in Australia has escalated beyond the $2 Trillion mark shooting past Australia’s GDP of $1.6 Trillion by 123%. Housing affordability is reaching crisis levels driven beyond the budgets of many Australians, by negative gearing and capital gains concessions.

In fact, we have just bypassed Denmark (the previous first placeholder) to hold the prize for the single largest ratio of household debt to GDP. Our government net deficit/debt is minuscule by comparison at only 17% of GDP. It was only 11% when Labor left Office. At the time, Australia had the third smallest net government debt relative to GDP in the OECD. Unfortunately, the sheer hysteria over government debt expressed by Joe Hockey led many voters to believe this was significant. Ignoring that Australia used to be one of the world’s best-performing economies in 2013. One of the predominant components of any magic act is the art of distraction. Hockey, and later Morrison, frequently shrieked at the “mouse” of Government debt to catch your eye, while allowing the “elephant” of private debt to sneak across the stage. Despite doubling our deficit since then, we are still in an internationally enviable position as far as Government net debt is concerned.

A little perspective on the debts of our nation?

The issue of negative gearing has been confusing for both the Coalition and the public. Kelly O’Dwyer was contradicting Malcolm Turnbull on whether or not the revocation of negative gearing would result in house prices falling or rising, did nothing to assure the public.

ABC’s Lateline hosted a debate between IPA Stalwart, Sinclair Davidson and economist Saul Eslake on the 10^th of May 2016. Saul suggested Negative Gearing (which he has opposed for 30 years) was costly and ineffective for its originally intended goal. Saul referenced the Reserve Bank’s analysis and the Grattan Institute’s research, as supporting his case. Davidson referenced his own personal “number crunching” but mainly appeared to channel his inner apprehensions over losing negative gearing. Curiously he claimed the “poor folks” who earned only $100K a year were not “rich”. (Despite that only 10% of Australian taxpayers can earn more than that.) With that redefinition of “relative poverty” in place, he argued negative gearing was not “a lurk or a rort for the rich”. He provided neither his “modelling” nor independent evidence that the absence of negative gearing would cause housing prices would decline. He was, although, perfectly prepared to disparage the modelling conducted by the Grattan Institute. In fact, pages 30 to 32 of the report go to some length to explain why it is unlikely to do as Davidson feared. These pages explain that a 2% reduction in the normal 7.3% average growth experienced since 1999 is the most its absence would affect the rate of growth.

Negative gearing is designed to compensate for the losses encountered by a borrower for an investment property where the rent and costs of managing the investment exceed the cost of borrowing. In Australia and New Zealand deductions for negatively geared losses on a property can be made against income from any other source. In other countries, this is quarantined. For example, in Canada, losses cannot be offset against wages or salaries. Similar restrictions exist in the UK and Netherlands. Australia has by far the most generous conditions now. Before 1985 it had been quarantined so losses could not be transferred to an individual’s income from labour.

Between July 1985 and 1987, the Hawke government abolished it and rent prices fell everywhere except in Perth and to a lesser extent in Sydney. This price fall was not due to Negative Gearing’s absence, but the meagre “available” vacancy rates and competition from inflated rent prices. (Grattan Report: Page 34-34) After that though, a less quarantined negative gearing was reinstated.

Housing & Rent prices rose but not at the rate they have since 1999. What mitigated the potential effects on the economy of unchecked negative gearing, was the 1985 introduction of a CPI indexed Capital Gains Tax. In 1999, the Howard government removed indexing and introduced a 50% discount for capital gains for individuals. From that point on, housing prices (and rent) skyrocketed an average of 7.3% annually. (Grattan Report: Page 31) The 2010 Henry Tax Review recommended reining it in, and at the very least, capping the deductions. The Labor and subsequent Liberal governments chose to ignore this. In 2013-2014 these features of Negative Gearing & Capital Gains cost the Tax department $11.7B a year in deductions claimed. (Grattan Report: Page 34-34)

Negative Gearing was originally touted as a means to increases the supply of rental property and decreases the rent charged by Landlords. Lobby groups with enormously financially vested interests such as the Taxation Institute of Australia and Real Estate bodies continue to do so. Like bad journalism, they have a dislike for when the facts get in the way of a good story. In fact, precisely the opposite of their claims has occurred.

While housing construction has grown, occupancy or use has not. Sydney, by way of a singular example, is a City of between 90,000 unoccupied homes. There are 83,000 in Melbourne. Notably, we have 45,000 homeless, Australia wide.

So the myth of housing scarcity that requires Negative Gearing to support it is not born out of anything other than a fabrication. That isn’t to say that the “scarcity” isn’t artificially maintained by refusing access to these unoccupied properties. These properties are primarily bought by Chinese investors needing to launder illicit funds.

The argument put forward by the Government though is that the majority of negatively gearing taxpayers earn under $80,000 and revoking it would adversely impact these “mum & dad” investors from “getting ahead”.

As Tax earnings go, it’s an interesting choice from which to start. Especially when you consider that the median wage in this country is more accurately $52,000. Only 40% of negatively gearing taxpayers lie below this median income. So why do the Liberals and the IPA spokesman, Sinclair Davidson, begin focusing on $80K? It’s not the average medium wage, so what does it represent? Is it because it is the lowest rounded number figure in which the majority of negative gearing taxpayers exists below? That being 67%. (Cart before horse thinking?) It’s the point at which the Liberals can confidently say the “majority exist”. Taxpayers that earn greater than that $80k demarcation represent only 20% of all taxpayers.

There are three problems with this analysis spoken of in these terms.

The large percentages are a deception because we are talking about a minimal subset of all taxpayers.
We are using taxable income as the measure after they are adjusted for negative gearing.
The undeclared interest these politicians have in maintaining the status quo.

Notice the use of the term “negatively gearing taxpayers” because the reality on the larger scale is, that “negatively gearing taxpayers” represent just under 10% of ALL taxpayers. So regarding total taxpayers it is 6.7% of all taxpayers that negatively gear and earn less than $80,000. Conversely only 4% of all taxpayers therefore negatively gear and earn less than the median wage of $52K. More than 90% of taxpayers don’t negatively gear and just want an affordable home in which to live.

The level of “earning” is based on declared income to the Tax department after negative gearing losses have been deducted. As many corporate figures and recent tax avoidance scandals do suggest, there must be a lot of individuals pulling in very, very large incomes but whose “declared” income is so modest that they pay negligible tax. The whole purpose of negative gearing is to lower your “taxable income”. (Grattan report: Pages 27&28) So using a measure of “Taxable income” as a valuation is a smart statistical deception. “The typical tax savings for negatively geared individuals is $1,800 per year”, although it may be as much as $11,800. An individual could conceivably be earning the pre-gearing taxable income of $90K a year and still fall into the category of being “below $80K of taxable income”. If you take out rental losses from negative gearing from taxable income then only 56% of people who negatively gear are in reality earning less than a disposable income of $80K (or 5.6% of all taxpayers). A similar adjustment for the median average taxable income is 33% (or 3.3% of all taxpayers). Negative gearing mainly benefits those on higher incomes as the top 10% of taxpayers receive almost 50% of the benefits from it. (Grattan report: Pages 27-29) The suggestion that it doesn’t, borders on hallucinatory ideology or deceit. This is the realms of magicians and conjurers.

Even before becoming Prime Minister as a high-profile Communications Minister, Malcolm Turnbull owned an impressive portfolio of seven properties, and many of his ministers have similar conflicts of interest. Interestingly it is Turnbull’s electorate who are the biggest negative gearers in the country. It is no wonder the Government resists any action to repair the economic damage done by this facility.

Warnings about housing bubbles bursting have appeared for a while. As Jessica Irvine wrote in the SMH, Sydney houses now cost “12 times the annual income”, up from four times from Gough Whitlam’s time. Jessica went on to describe it as a “classic Ponzi scheme” which is even how Liberal Backbenchers like John Alexander have described it. Walled Aly discussed these faults on “The Project” on the Coalitions negative gearing claims, which may engage from the perspective of the graphics, the numbers quoted and the nonpolitical research provided.

If economic rationalism, the deterioration of wages, rising living costs and housing & rent price explosions hadn’t caused as much damage as it has to our economy, negative gearing could have been easily dismissed. It has become a much more complex and entrenched mechanism. Labor’s grandfathering negative gearing strategy is one safer way to ease out of the problem. Affordable housing will continue to evade the grasp of average Australian in pursuit of the “great Australian dream” of home ownership while the current system is maintained. The only hope many Australian’s have for affording to buy a home in the future is if negative gearing and the capital gains concessions are dismantled. (Grattan report: Pages 46-47)

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Tax Cuttings

May 28, 2016 by James J. Morrison W.G. Dupree Leave a Comment

Tax bills are perceived, by many wealthy entrepreneurs, as the slicing guillotine blade of government. Ever since the French introduced Madame la Guillotine’s blade as their historical precedent for resolving differences with the wealthy upper class, the wealthy 1% have been understandably nervous. Anything that separates them from their beloved wealth irks them mightily. They traditionally hold it securely, so none of it can trickle out or hide it in havens, lest any be taken from them. To settle the proletariats, the government must be observed to be taxing the bourgeois, without actually removing their entitlements to wealth. The Liberal Party’s 2016 budget is an illusion of mastery of this particular magic. Allow me to paint a scenario.

The stage is dark. The white haired magician enters stage left. He is tall, imposing with a smug look of self-assurance. All born of the certainty this is a trick he has had much personal experience. Having performed it in Panama, the Cayman and the Virgin Islands. Doing it before an Australian audience of stupefied Aussies should be a milk run. Malcolm the Magnificent waves his hands and the lights fall upon Madame la Guillotine. It’s fearsome blade poised over a skimpily covered, but not too revealing $100 bill. Dame Nelly bats her eyelids and smiles up at the poised blade. All eyes watch as the blade descends, threatening to tax Dame Nellie Melba, right before our very eyes.

The Government’s latest trick is the traditional guillotine illusion where the blade falls upon the “victim”, but nothing is cut off. Tax cuts and tax management were a predominant topic of the Budget. Shaving off a little less for the not even 1/5th of the taxpayers that earn over $80K but apparently pursuing deeper cuts from they that hoard their treasures. Certainly, none of the Liberal Party’s largest donors in the corporate world wants to have Madame la Guillotine chop their perceived entitlements.

In fact many corporations and wealthy bourgeoisie protest and quite legitimately, to ATO auditors that everything is above board and legal. Let us consider the three primary ways that companies avoid Madame la Guillotine’s taxing burden. The basics for facilitating reduction of their taxes.

Offshore Registration of your business in a foreign municipality with a cheaper rate of Tax aids companies in avoiding tax in the country wherein they may do business.
Transfer Pricing makes use of a subsidiary firm - again in a foreign country with cheaper tax rates – in which that firm is the official sales agent. An agent is selling your Australian product. Much like Google does by selling Australians advertising locally (to the tune of $2 Billion in 2015). Although it is officially billed to Singapore where they pay only 2.5% tax (or $5M). The business pays reduced tax on profits acquired at the foreign rate, not the local rate. It’s essentially a legal means of money laundering.
Tax Havens are numerous, such as Panama, Luxembourg, Cayman Islands (our Prime Minister’s choice to hold his stash), Bahamas, Seychelles, Maldives, Malta, Tonga, Singapore, Bahrain, Channel Islands, San Marino, Hong Kong, Nauru, Cook Islands, Costa Rica, Marshall Islands, Switzerland, the Virgin Islands and many others. They all provide the facility for companies to set up holding companies on paper. Practices such as:

- IP Licensing – where you sell your intellectual IP back to your business and
- Debt Loading – where your foreign holding company lends money to your subsidiaries in Australia.

In the latter case, the Australian firm pays back the “loan” at crippling interest rates reducing any profits the company would otherwise make. As a result of this “loan sharking” manoeuvre, profits vanish. Often the interest acquired overseas is not even taxed at all. All their hard earned profits disappear in a puff of smoke. The cabinet that cute little tax dollar walked into, is reopened, to reveal the cupboard is bare. Nothing to tax here!

This disappearing act is not unlike the magic performed by the “Murdoch the Mystic” when the Tax office held in their very hands the $882M that they had taken in tax from him. With a wave of his wand, the profit he made in Australia was relocated to foreign US shores. Before you could pronounce “expecto patronum”, the $882M had relocated itself back into Rupert Murdoch’s bank account. It was coincidental, of course, that this occurred during the election period, which resulted in Abbott being magically levitated onto the public stage as Prime Minister. Mr Hockey who was hysterically alarmed by our enormous national debt never raised the spectre of these funds vanishing from the public purse. Perhaps he was befuddled by the mind manipulating force that emanated from a Sith Lord.

Apple booked $8B in revenue in Australia yet paid us only $85M. Something must have gone drastically wrong with their profit redirection to be paying as much as 1%. I am sure they have fixed the trap-door now, so everything vanishes down it cleanly. Certainly no longer leaving any caught sliver of clothing that the tax-man can scavenge.

These corporate raiders have made use of the resources of our country. They pay for our labour (but not the development of it), transport (but not what it moves on), ports (but not their construction), power & rent (but not the infrastructure that supports it). Every other small business in Australia pays for this as well, because the rest of us pay taxes! Taxes paid by their customers, employees, and even the staff that clean their offices. Individually any of these often pay more tax then have these companies. They are allowed to exploit our country by taking money (and sometimes resources, technology and/or minerals) out of the country. They deplete the wealth of this country for their profit but don’t pay the cost. It is no wonder we have a net foreign debt of 1 Trillion dollars with all that draining from the country.

So how does one lower Madame la Guillotine’s blade without chopping off anything? Mr Morrison announced “1,000 specialist staff in the ATO to police and prosecute companies, multinationals and high wealth individuals not paying the tax they should”. Whish, down comes the “blade” to be “combating tax avoidance, especially by multinationals, with new measures to ensure everyone pays the tax they should on what they earn in Australia, not avoid tax by shifting their profits offshore”, said Morrison. The joint media release later elaborated that “The Taskforce will have around 1,300 jobs in the ATO, including 390 new specialised officers.”

But does the blade cut anything?

First off and the most obvious, 1300 newly minted Tax officers are hardly a replacement for the 4700 very experienced ATO officers that lost their jobs since Hockey cut their funding. They weren’t keeping up with the multinationals that weren’t paying tax when they had that many. Now they are short-changed by 4400 staff and have lost a world of experience.

Less obvious is to what extent these new diverted profits laws are applied. These new laws came into effect on 1^st Jan 2016 and applied where the annual turnover is more than $1Billion. This will positively affect Apple and Google, but many foreign interests who carry on through subsidiaries in Australia will not be affected. The only real targets will be the top mining and technology sectors where services, research or marketing performed in Australia is booked to overseas subsidiaries.

What needs to be reiterated is companies like, Amazon, Google, Energy Australia, GE, Bhp Billiton, Facebook and the like, practice legal tax avoidance. They will modify their strategies, as booking transactions to overseas is just one strategy. Certainly, companies with $1 Billion in turnover can well afford to restructure and break their turnover up amongst multiple entities to go below the threshold. While an obvious strategy, I am sure they will come up with better ones. Remember none of their tax avoidance practices is illegal, immoral, yes, but not illegal. They may stonewall in Senate hearings because they are embarrassed and want to avoid public distaste and a drop off in profits, but they HAVE DONE NOTHING ILLEGAL. These Billion dollar turnover companies may lose a few locks of hair to Madame la Guillotine’s blade, but certainly no head.

Unless the government changes the Law, to significantly cast, a wider net encompassing transactions made in Australia facing tax liability, not much will change. The falling blade of Madame la Guillotine’s blade is nothing more than another clever illusion. Mr Morrison’s taxing blade may apparently thrill your perverse appetite for expecting blood on the scaffolding. But the results will ultimately disappoint your blood lust. There is little hope of seeing the corporations and wealthy spill as much as one drop of their precious blood money into the dry, thirsty, cracked soil of the still economically barren landscape of Australia.

Internships and Growth

May 18, 2016 by James J. Morrison W.G. Dupree Leave a Comment

Scott Morrison the magician, illusionist extraordinaire, has made all Australia’s failing job & economic growth problems vanish in a puff of smoke and mirrors (with apologies to John Passant for stealing his phrase). He has created a grand facade of jobs springing miraculously from the presumption of Australia’s economically fertile soil. Drought resistant and immune to the emerging heat of anthropomorphic climate change (which was provided with no new solution in the 2016 Budget) our economy is expected to blossom with “-Jobs and Growth”. Prosperity is forthcoming to the families of Australia, except for those who are too lazy to earn over $80K a year! To cheers of “Hear! Hear!” amongst his colleagues, Morrison & Turnbull supercharged the great Australian dream of owning your own home. It is now, apparently, attainable by one year’s olds and children of financially well-endowed parents throughout the land. Not earning enough, then fret not! Our unregulated “scandal-free” banks will inflate your income on their paperwork. Hence your appearance as a newly minted millionaire will allow you access to funds you never dreamed you could have, much less pay back. Foreign investors looking at the bank’s books will loan us cheap money because they are too addled by the theatrics of our slight of hand. So hoodwinked that they fail to recognise a proliferation of highly leveraged loans. They barely acknowledge that countries where much smaller housing price to personal income ratios than Australia’s, have been characterised by collapsing economies. (Australian repayment rates in Sydney are 12.2 times the median salary) These lessons from history are nothing but smoky memories. Their amnesia over housing crises that have collapsed economies previously makes these investors inept at recognising our negatively geared Ponzi scheme. Certainly, no one pays attention to the fact that Australian mortgage debt is equivalent in value to 123% of Australian GDP. In the next term under the Liberals, we will all have jobs producing wealth enough for us to continue to support this mountain of debt? Wow! Welcome to Australia, a land of magic, miracles and illusion. Let us dazzle your senses, while we pick your pocket in search of some way to raise our revenue to maintain helicopter riding politicians’ out of pocket expenses.

Budget 2016 was a menagerie of shameless self-promoting political aggrandisement and back slapping. All designed to create an illusion they have a magically restorative budget that will provide jobs for us all. But as any pundit watching a magic show wants to know, “how do they do that?” So let the revelation begin.

ABS V Roy Morgan - size matters — ABS V Roy Morgan – size matters

The unemployed begins the illusion. That much maligned 10.4% of the workforce (April Roy Morgan stats) that the ABS desperately tries to sell you like 5.7%, so you don’t understand how significant the issue is. If a Newstart recipient works for so much as an hour (paid or unpaid) in four weeks, they are no longer registered as unemployed by the ABS. They still, although, may retain dole payments because they have earned little to nothing. Unemployed people who cannot declare they are ready to work immediately, whether because of other commitments or because they are so completely in a state of dysfunction that they cannot respond, are also eliminated. Hence single parents with responsibilities to children or disabled persons moved across to Newstart, simply don’t count and are not counted. The ABS’s methodology hides the real size of the “rabbit” the Government is trying to keep under their hat.

But as Michaleia Cash would intimate, all you had to do is follow the golden Liberal “PaTH”! Announcing the unemployment solution of “internships”! That government conjuration that pays businesses $1000 to accept unemployed people to perform 25 hours of tasks for them a week. The government funds interns at below minimum wage rates. They are compensating “interns” with a surplus $100 a week. To redress that, the government cut the “newstart” base support rate in the 2016 budget. Despite the Business Council of Australia arguing “the Newstart Allowance is so low it may be bad for the economy as it prevents people finding work and risks entrenching poverty.”

Contrary to some hysteria of $4/hr that social media is alarmed about; that is the $100 incremental rate change. Given the current single person’s dole rate of $263.30 a week after adding $100, the aggregate rate represents around $14.53/hr. That valuation is nothing about which to boast. It is still well below the poverty line. It is certainly less than the legislated minimum wage that was of concern to the Business Council. All for the aspirations of the unemployed who crave a chance at ongoing work for a fair wage.

Why would not businesses take advantage of “PaTH” interns as free labour and simply churn through them? Michaelia Cash’s claim, to be able to block companies from doing that, outlines no viable strategy to accomplish this? Why might I suggest businesses will exploit interns? Because businesses already have!!

The Monthly’s Richard Cook points out: “An Interns Australia report in 2015 found 86.4% of interns surveyed were not paid or were paid below minimum wage, and 78.92% reported that their internship did not lead to paid work with the same company. This unpaid precariat accept it as part of the price (or lack of price) for this brave new world of workplace flexibility and personal entrepreneurship.”

So “internship” solves everybody’s problem! Satisfies those “communists” on the left wing of the Business Council of Australia, who want to pay unemployed youth more. The true believers on the right wing of the BCA are granted free labour for 12 weeks. All participating businesses get $1000 for each unemployed person they consume. Unemployment plummets because they have “worked” for more than one hour. The jobless vanish from the ABS’s books. Workers compensation is not required as technically; interns are branded as volunteers. The government has solved everyone’s issues in one single policy. Well except for the unemployed, that crave a real job. But then they don’t matter, as they don’t have the financial capacity to bequeath wealth as political party donations. The Rabbit has vanished, and the black hat is empty!

Magic performed! The unemployed vanish beneath the ABS cloak of invisibility. Business’s unskilled, manual labour workload disappears as the unpaid fairies at the bottom of the garden do all the work. The government has apparently found more people work as they are less unemployed. Businesses are booming as costs are down, and CEOs can award themselves higher wages. Prosperity lavished on all. The last vanishing act will be the business profits as they are stashed overseas in Panama or the Virgin Islands. And that, dear reader, is how job’s growth is performed.

Jobs and Growth – Part 2

May 2, 2016 by James J. Morrison W.G. Dupree Leave a Comment

Jobs and Growth – Part Two

As already outlined in part one of examining the mantra of the Coalition’s claim to be creating “jobs and growth”, jobs in the economy are in inadequate supply. Indeed when you consider the vast numbers of under and unemployed on record, as well as the numbers of foreigners eligible to look for and consume jobs in the market, jobs are relatively non-existent. But if there is potential for economic growth in the Australian market, albeit little hope for millions of Australians to find suitable work in the short term, then perhaps there is hope for the long term holds. Perhaps, given enough time, the Coalition – who want you to believe they pride themselves on being “THE economic managers” – can pull a “rabbit out of the hat” and grow the economy to generate more job vacancies for the unemployed to fill than the rate of expansion of the workforce. For now, they are struggling to do this.

Growth?

The discrepancies between perception and reality in Mining

So, with the Coalition supposedly focusing on “Jobs and Growth”, exactly what infrastructure is the government committing to, to creating growth in our economy? There is a big focus to one of the large contributors to the LNP, of the Mining Industry. Mining reaps the benefit by our largess in revoking emissions trading and mining taxes and billions in subsidisation of fuel, exploration costs, grants and cheap loans. All of which results in profit margins well in excess than these subsidies, most of which goes overseas, as mining is 83% foreign owned. Despite the big sell of the benefits of mining by the government – which the public largely buys – the reality is quite different. Mining investments are a diminishing industry with declining jobs – now down to 2% and a negligible contribution to GDP. In fact nothing at all in the Dec 2014 quarter. As jobs were disappeared from mining, the expected pickup in Construction did not occur and had in fact begun failing us as well – as it fell 3.6% in the last December Quarter with every expectation of it continuing to weaken. Any new mines – despite exaggerated claims to the contrary by the coalition about the Adani Mine – will take up tiny numbers of our unemployed as Rod Campbell demonstrates in “The Australian”. So no growth in these industries, unless you are talking about increasing workplace deaths in which case the reintroduction of the ABCC in construction is useful. The previous regime of the ABCC saw dramatic rises in construction industry deaths under the Howard Government because of a lack of the union’s ability to enforce safety standards. There was a rapid drop off of deaths once it was abolished. This would be a small boon for employment as more workers die quickly then vacancies in the construction industry will arise more often. The uptake of the unemployed into construction will help reduce unemployment’s numbers. So while mining and construction are not growing, and is shedding employee numbers, the rollover of employees through the implementation of ABCC style legislation may be of benefit to the unemployed – should they survive the experience. It certainly has no powers to combat corruption so there must be other reasons for its existence. The government’s desire to expand this style of legislation into other industries such as the Registered Organisations Bill, would potentially expand businesses capacity to roll through the unemployed as they “dropped” off, while not necessarily contributing to the real growth of the businesses in question or addressing any union corruption issues.

Exploring other industries, we might note the government have undercut our manufacturing sector as car manufacturers will bleed 200,000 jobs and as much as $29 billion in lost economic output. The steelmaking company Arrium, which employs one in ten people in the South Australian town of Whyalla, just went into administration in April this year (2016). SPC fruit canning industry only needed a tiny fraction of the money we hand out to mining to protect the industry and jobs. The Manufacturing Worker’s Union had no success at convincing Abbott to adopt a less hard-line approach to our canneries.

Proportion of electricity generated from renewable sources in Europe

RET and renewable energy changes from both Abbott and Turnbull have devastated a growing industry that had a vibrant future. This is evidenced by the progress established in multiple European countries who despite many having less sunshine & wind access than Australia, are contributing significantly to their energy needs and in Norway’s example exceeding their energy requirements from renewables.

The change from public transport initiatives to road building means people are more dependent on vehicles at a greater cost to the consumer and the environment. (Perhaps Joe Hockey will be right after all, and poor people won’t be able to afford cars) Other OECD countries have developed public transport that keeps travel costs low by the clever development of properties around the transport hubs (school, hospitals, shopping centres, etc.transport). The lack of investment in public housing in city CBDs means that disenfranchised people are more remote than ever from employment opportunities, health and education services. So no growth in transport or city building infrastructure except for the most etransportation options for the public.

Health follows wealth and employment follows education, so the inadequate or lack of infrastructure development in these areas will equate to the failure to invest in human capital. This represents appalling short-sightedness at a time when China’s tertiary sector, Singapore, South Korea and Japan (and in time, Indonesia) are making dramatic consolidations around trade and education. They are gearing their workforce up to be able to participate effectively in 21st-century technology economies while Australia’s professional full-time occupations are declining according to the Graduate Careers Survey from the CGA. As degree qualifications become more expensive, the long-term outlook is not optimistic. Integral to this is that Australia is creating an NBN system that has us ranked down from 30th in the world to 60th in internet speeds. The educational advantages of online learning specifically for a country like Australia where distance education is a pertinent need is undercut by our pathetic internet offerings. Cutting the Gonski funding for our children reduces the future level of education for our nation. It’s simply short-sighted. From education to health, the prognosis is also heart stopping. Given the reduction in funding by removing previous indexing arrangements for hospital funding to “save” $80 Billion, the Government’s commitment to health in the midst of a population with an increasing proportion of aged care needs is counter-productive. If you want your population’s retirement age to be delayed as Howard, Abbott and Hockey suggested, then you need to cater for rising health costs, not diminish them. So no growth in health and education.

working for a goal may achieve different results

Under the coalition, Australia has dismantled active market labour programs creating the ineffective “work for the dole” scheme, where people are forced to paint community halls and rake garden paths. This semi skilled meaningless busy work is not dissimilar to the enforced programs that you see in North Korea. It is, after all, a means by which people are forcibly employed at below minimum wage rates with penalties extracted for failures to comply. Perhaps a North Korean labour camp is not that big of a jump, conceptually? Neither scheme in Australia or North Korea results in fulfilling full-time work.

Tourism and Agriculture although are key growth areas for Australia. Given there are 267,000 tourism businesses in Australia 95% of which are micro businesses which outside of the casino industry and hotel and hospitality association are not broad enough to afford to donate to the Liberal Party to attract favourable considerations. Given Mining can do so; it is no surprise that it is given priority over tourism and agriculture. As the Australian Institute has pointed out: “The expansion of mining causes a contraction in non-mining industries, particularly manufacturing, tourism, agriculture and education. This results in business closures and job losses”. Recent government decisions in regards tailings dumping on the Great Barrier Reef and the Shenhua mine’s resumption of farming land in NSW bear these assumptions credit. Support for these industries by the government is certainly not a priority.

Given the history of ongoing falls in consumer and business confidence, apart from a temporary boost at the change of Coalition leadership, there has been too little evidence of worthwhile growth in Australia. In fact, if it were not for the way we account for defence spending, by only accounting for all previous payments as one lump sum presumed to be paid in total on the final instalment for an “item”, Australia’s economic outlook would be dire. Change the accounting convention to recognise the defence payments when they were made, and Australia would be officially in recession.

Unemployment is an pernicious problem not being dealt with by a government that is busy dismissing public servants and growth industries and their support mechanisms (Renewable Energy projects) and undermining manufacturing in this country and reducing funding for numerous Not-for-Profits (i.e ABC, SBS, CSIRO, the Climate Commission and dozens of expert advisory bodies). All of these resulting in massive retrenchments, increasing the stress levels of employees in these and related industries leading to the aforementioned reduction in economic growth that this country is experiencing.

So, given the coalition’s reluctance to tax the wealthy or large businesses which contribute significantly to the Liberal Party but next to nothing in taxes to the Australian people’s health, wealth, infrastructure and even employment, where will we find the revenue to support Australians? The continued reluctance to pull back the massive welfare subsidisation of such companies which contribute so little to our GDP – such as mining & construction, is deeply inegalitarian when one considers how little welfare we supply to Australians who have real financial needs. The service sector contributes 68.7% of our GDP, but where the government’s policies do either so little for or are inhibiting the non-finance segments of it, from what do we then build national revenue? An economy where it is no longer possible to raise sufficient revenue from income tax because people don’t have jobs, explains the coalitions desperate bids to reduce services to the community. “JOBS AND GROWTH” have been the mantra of the Government for the last three years, worryingly resulting in such a poor performance that we risk further economic collapse. And, in the next financial year, we may not have fully paid off the next defence purchase in time to hide the reality, that Australia, will be in a recession.

Jobs and Growth – Part 1

May 1, 2016 by James J. Morrison W.G. Dupree Leave a Comment

The capacity for people to be cruel and disparaging, born of opinionated judgements of self-righteousness is one of the qualities at which human beings excel. Whether it’s our attitude to foreign refugees or racial discrimination among our indigenous people, if there is a “them” to our “us”, we are determinedly resistant to human unity. None is more apparent that that of the economic divide between the “haves” and the “have nots”. The social pariah (the unemployed, the disabled, the un-superannuated elderly and just poor) is the drain on society that our government would happily have removed from any significant social benefit.

—–//—–

The 2014 Budget’s proposal to eliminate six months of unemployment benefits, amongst other cuts, was the carefully considered resolution to our “economic debt crisis”. The response from the public, alternative media, professional agencies and senate surprised them. These were the unemployed, the dole bludgers, the welfare cheats, and later on, the double dippers, who were the malignant sore on the face of a civil society that needed to be lanced. So it was a mystery to the conservatives that anyone existed who wished to preserve or subsidise this lowly contingent of “un-people”, especially, when mining companies were clamouring for continued subsidies. (See Part 2 for further commentary on this.)

Punishment of Jobless

Unemployment under the coalition accelerated and coasted around 6% of the Australian workforce according to the ABS and MSM. The Liberal party claimed to be creating jobs while these bludgers were just not taking them up. These recalcitrants apparently wouldn’t attend appointments with the selfless private enterprise employment agencies who do every thing in their power to find them jobs. So Malcolm Turnbull devised an appropriate punishment for these malingering jobless. On the spot fines for failure to comply with the directions of these agencies, in relations to appointments, behaviour or training. Of course, should appeals lodged against these fines find them unjustly applied, then the job seeker will eventually be reimbursed after four months. This new disciplinary power rewards employment agencies for their “exemplary services” in spite of these “malingerers”. These are the same agencies depicted by the “Four Corners” expose “The Job Game” in February last year. The federal government presumably thought, after recovering $41M worth of false claims by these agencies following that report, that these were the most trustworthy organisations to enforce penalties on the unemployed. Perhaps, dear reader, you are beginning to suspect that there is something that is not quite kosher with the attitudes indicated above.

First off, let’s examine the veracity of the claim that 6% is our unemployment rate. Not only have the ABS stats have been rubbished by a former head of ABS who said they are “not worth the paper they are written on“, but also they have been criticised by Steve Keen a writer for Murdock’s “The Australian” paper. He doesn’t hold to the validity of the ABS statistics on “unemployment”. Steve noted that: “The ABS uses the internationally sanctioned definition of unemployment, which is similar to Tom Waits’ definition of being drunk: you have to be really, really out of it to qualify. Not only must you not be in employment, but you can’t have done even one hour of paid or unpaid in the four weeks before the survey. Nor can you be discouraged by the absence of available jobs either – you must have applied for something in the previous four weeks – and you must be available to start immediately.” The truth is, as Steve continues that the Roy Morgan’s statistics measure real unemployment in Australia – not the ABS.

If not ABS then…

Snapshot Changes in workforce Numbers from Sept 13 to Feb 16

So what does Roy Morgan tell us? As of Feb 2016, of the 13,174,000 people in the workforce, 1,319,000 are unemployed, and 2,480,000 Australians are unemployed or underemployed. This is 18.8% of the workforce. Participation in the workforce had risen steadily from the 12,467,000 when Abbott was elected. A reflection of numerous factors including a population growth of 1.75%, and a net migration growth of over 1%. (These add approximately 400K and 200K per year to the population respectively). Other factors include the growing propensity for later retirement. Each time the share market drops, diminished returns for superannuation funds which directly impact the capacity for those profits to fund people’s retirement capacity results in an increasing tendency to remain in the workforce beyond retirement age. Add the rising numbers of women entering the workforce. Add the single parents and the disabled; beings reassigned to “Newstart” and expected to “look” for work despite their apparent disenfranchisement. Let’s not forget, also, each year Australia has around 300K school leavers many of whom become new entrants into the workforce. Every year HSC and university graduates eventually enter the labour force via traineeships, apprenticeships, a job or the unemployment line.

Vacancy Index - Dept of Employment — Vacancy Index – Dept of Employment

Thwarting all their efforts to be employed is the pitifully small numbers of job vacancies within Australia. ANZ bank’s survey of newspaper and Internet ads for February noted a 1.2% decrease to 154,748. The Department of Employment’s Internet Vacancy Index (IVI) observed a decline of 4000 jobs to 163,000 in February. The Index does not include the declining number of newspaper ads or limited copy ads employers may put on shop windows or their websites. The ABC reported in January that “…newspaper ads rose 0.4 per cent last month, but now make up less than 5 per cent of employment advertising…”. Let’s be as generous as possible to our government in assessing the number of jobs the Australian market has – therefore ignoring ANZ Bank’s smaller estimate – and add around 5% to the government’s Vacancy Index. That makes a generous estimate of 171,000 vacancies available to 1.3 Million unemployed (or nearly 2.48M if you add the underemployed). The opinion of the Employment Minister Michaelia Cash is that there are jobs for Australians to find?

Beyond Numbers

Numbers, of course, never tell the whole story as one need also consider issues such as locality & accessibility limitations, skill & education levels, competition, financial limits, literacy, and the arbitrary selection processes and criteria of employers. Let me give you an example of locality issues. NSW and Victoria supply 64% of all Australian job vacancies. You certainly don’t want to be looking for employment in Tasmania; the Northern Territory, ACT or South Australia whose combined percentage of vacancies do not exceed 9% for the Australian market. Skills and education levels in Australia are eroded by the fall off of trade apprenticeships, and the growing expenses inherent in TAFE qualifications and university costs. Need I expand further with all the rest?

Other factors for which I have not made adjustments, are the issues around foreign workers with rights to work in Australia. In May of 2015, the SHM reported that there were 167,000 457 visa workers and, that the 1.2 million foreigners who have work rights include 160,000 with working holiday visas or more than 623,000 New Zealand special visa holders. Now to be fair to the government, the number of 457 visa holders has recently dropped to just over 100K, although that is officially only the number of direct visa holders and does not include accompanying families. It is not that all these foreigners are competing for the jobs available to Australians but that they can, and of course, many do. Companies claim to bring in foreigners on 457 Visas because of the absence of appropriate skills in this country. What does that, therefore, say about the level of education we provide or our commitment to education? (more in part 2)

Non-Australian participants

Even for the ABS stats, for what ought to be reclassified as the “absolutely, desperately, undeniably unemployed”, there are five people for every vacancy. For the more realistic Roy Morgan numbers of merely unemployed, there is an 8:1 ratio. Add in the underemployed, and the ration becomes 14:1. Add in the 1.2M foreigners with work rights and your competition for work becomes a ratio of 21:1. Given the requirement for the 1.3M to write 20 applications a month to – to at the most – 171Kvacancies, statistically, the average employer might receive 154 letters a month. These numbers, would, of course, vary due to local accessibility, skill/education required, etc. and be dependant on a given vacancies attractiveness to foreign workers, including 457 visa workers, or underemployed and employed “drifters” (fully employed people who would like to change jobs).

Poverty

Should the unemployed suffer difficulties inherent in limited access to appropriate finance, transport, training, education, online facilities, social connectivity, digital literacy, access to health services, housing, clothing, live in the wrong State or city and have to busy “working” for the dole or be occupied be irrelevant training and paperwork from your employment agent; then they can kiss any job prospects goodbye! Worth noting is that unemployment “wages” are $391 below the international poverty line. On top of that, the mainstream media goes out of their way to find someone, anyone in fact, who looks as though he/she is not actively searching for work, and labels them as “dole bludgers” on the front page of a Murdock press paper or a current affairs program. This effectively extends that label – with no justification – to nearly a fifth of Australia’s workforce. That 18.8% of the workforce constitutes a workforce that probably lives below or close to the poverty line, which has some correlation to ACOSS’s claim that over 2.5M Australians live in poverty. Following an attack by the media, or being treated disparagingly and/or having been fined by the very people who are supposed to assisting them find jobs – that actually are statistically irrelevant – and having to “work for the dole” to receive a “pay rate” far below minimum wages, what would you believe is their level of psychological resilience?

Telling someone “get a job” as though it was simple, expresses an opinion (a dismissal of reality in actuality). It reflects ignorance of the real facts evident in the real factually non-opinionated numbers of jobs available and the vastly larger numbers of people competing for them and the real (not imagined or opinionated) sociological issues associated with being unemployed.

Job creation?

So are the Liberal party policies facilitating jobs creation in Australia? Alan Austin questioned the media and Coalition’s take on unemployment in February referencing Scott Morrison’s claim that Australia had generated more than 300,000 jobs since the coalition was elected. Alan focused on ABS figures pointing out numerous flaws in the coalitions numbers. What, though, are the numbers from Roy Morgan’s perspective? It would appear 300K jobs generated, grows to 685K jobs since September 2013. Looking so much better than you would have to wonder why the Government only uses ABS’s figures until you look at the larger realistic unemployment numbers.

Workforce Numbers, jobs and Vacancies

It is, however, the Department of Employment’s vacancy index that has shown relatively slow marginal growth in job vacancies of only 23.6K over the full LNP term of office. [IVI Sept 2013 vacancies: 139K and Feb 2016: 163K] Keep in mind that NET unemployment only (RM figures), has increased by 22K and net participation has grown by 707K during the coalition occupation. [Roy Morgan Sept 2013 unemployed: 1297K to Feb 2016: 1319K and RM Sept workforce: 12467K to Feb 2016: 13174K]. With such a small rise in vacancies, it becomes concerning that no matter which statistics, either ABS’s or Roy Morgans job growth are used, it is evident that it is only just keeping ahead of the increase in workforce participation. The net change of growth of employment (vacancies plus occupied jobs) 709.9K with the total workforce change 707K (highlighted in yellow in the spreadsheet) suggest the market is only just keeping its head above the rising water of workforce population growth by 2,900 jobs in three years. Statistics – is a game that has margins of error – if you were to use ANZ’s vacancy numbers, then we would be drowning by 14,000 jobs. Either way, you look at it, if Australia fails to maintain a better margin in the growth of jobs, then the workforce participation growth would overtake jobs; and unemployment will skyrocket. As a country, we had better hope there are no significant job losses on the horizon like, oh … a major loss of manufacturing jobs for example. At best, this country is just “treading water” in a desperate “dog paddle” to stay afloat, and at worst, they are peering over a chasm into a very deep valley and an economy about to collapse into recession.

Continuity with change

March 31, 2016 by James J. Morrison W.G. Dupree Leave a Comment

Many have noted the re-emergence of the three-word slogan, as Malcolm Turnbull attempts to trigger a double dissolution that will rid him of these “damnable” cross benchers in the Senate. Copying his predecessor’s style, Turnbull repeated this slogan four times within two minutes in a recent interview with Leigh Sales.

“Continuity with Change“! Turnbull stated that as he had been a part of the Abbott Government, he was maintaining policy continuity. Even Abbott confirmed this when he said from London “It’s very easy for me to campaign for the election of the Turnbull Government because the Turnbull Government is running on the Abbott Government’s record, and it’s a very strong record.”. Malcolm although, has claimed he’s made changes that were allegedly uniquely his.

It would become apparent that others had come up with this slogan also. Although, unfortunately for Malcolm, it was specifically chosen for its meaninglessness! Simon Blackwell one of the writers for the comedy “Veep” wrote in a Tweet:

Could he have come up with a more meaningless slogan?

“In Season 4 of Veep we came up with the most meaningless election slogan we could think of. Now adopted by Australian PM.”

Malcolm is desperately distancing himself from the slogan now, but is it meaningless for him or does it betray a strategy for “change” that is uniquely his?

Aspects of Malcolm’s changes began to fit a familiar pattern which was expressed in his own words via last year’s science prize awards speech. Let’s examine the “changes” that Malcolm mentioned in the ABC as mentioned above interview, with a few he forgot, thrown in to illustrate the pattern.

Senate voting reform
Mass transit and public transport in cities
Media ownership reform
Domestic violence agenda
CSIRO changes in funding & management
Business continuity and changing corporate bankruptcy laws
Clean energy innovation projects fund.
The resurrection of the ABCC

I will deal with each only briefly. You can look up the links provided for more detailed analysis.

Senate Voting reform was an initiative of the Greens (rather than Malcolm or the Liberals) that began a decade ago with Bob Brown in 2004 introducing legislation to reform Senate voting. Idealistically to limit party control over preferences between parties for “Above the Line” (ATL) voters, the new system still harvests preferences through the order in which candidates are listed. Ungrouped Candidates don’t get a look in at all with ATL voting. So independents will most certainly be disadvantaged. Yet it is the independents which have often held the major parties to account adequately for their policies to the people, rather than the normal a priori of factions, lobbyists and party ideology. People at the voting booth rarely have the time, inclination or education to understand all the issues. People’s political allegiances in most “democracies” are largely driven by irrational fears, family alliances, emotional opinions unrestrained by cognitive dissonance, and driven by self-interested media manipulation. When you consider that despite the protests about preferences, that each voter has complete control over them by simply voting “Below the Line” (BTL), and yet only 3% do, then what does that say about the average voter? Does not the problem with voting and preferences boil down to the propensity of Australians to be too lazy, too busy, too preoccupied, too disinterested, too ambivalent, too apathetic, too overwhelmed, too angry, too helpless, too pessimistic, too disempowered to make complex choices about voting. And that is what the Greens and the Liberal Government are counting on.

Turnbull’s policies for mass transit/public transport in cities arrived with a new minister and new Cities and Built Environment portfolio. He gave this portfolio to the infamous Jamie Briggs, a junior minister without a significant expenditure capacity and without significant regulatory powers and under the “environmentally responsible” influence of Greg Hunt and the administrative support of the Department of Environment. This Underpowered portfolio has its origins in the Rudd Gillard government’s series of reports on City infrastructure issues as Alan Davis listed out in an earlier Crikey article. Perhaps that is from where Malcolm got his ideas?

Malcolm Turnbull’s own words about Media ownership reform to Leigh Sales were that they were “…kicked into the long grass, never to be seen again, apparently; taken out. It is now the Government’s policy.“. Historically, not even the “captain’s calling” Abbott had tried to deregulate the media laws despite his efforts to reduce what he referred to as “Red Tape“. Instead the influences appear to originate from lobbyists from commercial media outlets that have worn bare, the red carpet trail to Canberra to argue their case. Does the public want a diminishment of media laws that results in fewer voices in rural media or local news and permit a concentration of media in singular hands (guess who’s) as mergers and acquisitions occur?

Funding for domestic violence prevention from Turnbull represented a fraction of the money originally stolen by Abbott (1/3^rd), which he then re-invested in an odd assortment of extras not highly sought after by any woman’s support groups. Websites, GPS bracelets, alternative legal aid, police counselling, locks, CCTV & 20,000 mobile phones benefit IT professionals, security companies, police, and communication providers more than it does abused women. What women’s groups asked for was Shelters but wherever Malcolm got his ideas from it wasn’t from the afflicted women.

CSIRO was another example of only a portion of the $110M Abbott cut being reallocated with completely unasked for commercial provisions. As with Domestic Violence where many of the legal services and shelters were gone by the time Malcolm gave some money back, several CSIRO projects complete with the experts that researched them were also gone. Abbott had installed a venture capitalist, Larry Marshall, as CSIRO chief executive who only a month ago astonished the scientific world by abandoning climate data gathering and modelling. Turnbull’s refunding itself was tied to increased commercialisation of research.

Malcolm’s efforts for business continuity and changing corporate bankruptcy laws are based on the Productivity Commission’s report on insolvency law, where such things as “reducing personal bankruptcy to one year”, “introducing a safe harbour for directors during restructuring” and “nullifying ipso facto contract clauses” have captured Malcolm’s attention. Malcolm has cherry picked these from the Productivity report – which in other circumstances he appears not to have read (see point 8). The collective of Australia’s less reputable fraudsters in Business are positively ecstatic at these protections for consumers dissolving. The question has to be for whom does the benefit of such changes serve, Business corporates or consumers? Let the buyer/voter beware!

Abbott’s aggressively ideological agenda to protect coal at the expense of the Clean Energy Finance Corporation (CEFC), by directing it to cease investment in wind farms and domestic-scale solar projects and the cutting of $435 million from the Australian Renewable Energy Agency’s budget (ARENA); has seen some change under Malcolm Turnbull. Originally Malcolm had refused to support the CEFC which had been turning a profit at 3 per cent over the bond rate. Then in a rapid change of mind, Malcolm announced a new “Clean Energy Innovation Fund” (CEIF) to be in a manner managed by both these organisations. The problems with the proposal are multiple.

The term “fund” is a misnomer because what it is, is a loan.
ARENA’s management is limited as it has been stripped of its powers
Requiring a return on investment will limit the scope of renewable innovation in Australia.

Malcolm’s “change” to turn grants into loans, was to placate the conservatives in the coalition who preferred to be dismantling the agencies. The remit for the CEIF is oddly very similar to what ARENA was already doing in the area of renewable energy, so it seems apparent Malcolm is just repackaging an existing concept in a more conservatively climate-denying placation of his backbench.

On ABC national Radio on the 22^nd March, the morning show with Michael Brissenden, Malcolm spoke of the Heydon royal commission’s findings as “compelling” and “recommended” support for the ABCC. The Royal Commission’s 79 recommendations made no mention of the ABCC. In fact, upon reading the report, Hayden had recommended continuity of the pre existing regulator with beefing up investigatory and compulsory powers.

Turnbull in his interview with Leigh Sales said “The Howard Government set up the Australian Building and Construction Commission to have a strong industry watchdog which reduced disputes. It improved productivity by 20 per cent. The Labor Party in government, Mr Shorten in fact as the minister, abolished the ABCC …” Leigh Sales replied , “… a report by the Productivity Commission in 2014 found that the introduction of the ABCC didn’t improve construction productivity overall and nor did the removal of it have a negative effect. Overall its impact was fairly marginal.” When Malcolm Turnbull disputed this she held up the report in her hand and said she had it with her. The claim of 20% improvement along with the suggestion it was bringing $6 Billion to the economy was based on a discredited report by Econtech which even the ABCC removed from their website. The bad safety record of the ABCC alone should be reason enough to be concerned it is an inappropriate solution.

Safe work Data show more workers died under ABCC

So why resurrect a commission that in truth had such a minimal impact on productivity and a downfall on safety? Malcolm had certainly read the Productivity Commission’s report to have implement it’s recommendations on insolvency law (as mentioned earlier) but apparently only cherry picked from it? Econtech was discredited a long time ago, so why try to sell it as something is wasn’t? As Michael Brissenden pointed out to Malcolm, “ABS figures from December last year show overall industrial disputes diminishing and days lost due to industrial disputes down considerably from 2012”? Instead of supplying evidence against either ABS or the Productivity report Malcolm resorted to anecdotal opinions based loosely on the maligned Royal Commission saying it found there was a “culture of lawlessness in the construction sector”. Despite the Commission’s Aug 2015 findings that referred 30 people for various charges, already 5 of these have had their charges dismissed.

Let’s face it if Malcolm were honestly concerned about corruption, then why resist the numerous calls to have a federal ICAC instigated in the face of the NSW illegal donations discoveries? Is the pot calling the kettle, “black”? So why try to resurrect a Howard initiative for a lack lustre body like the ABCC with a dubious success record, for a single industry, that already has regulators in place and have that as a trigger for a Double Dissolution?

This in more of a late mention or side note as this change isn’t in yet, but after Abbott made $57 billion in health cuts, apparently Mr Turnbull wants to return $5 billion and thinks that is a solution of merit to take to the next budget. Anyone yet figured out one of the patterns in his approach?

All these “changes to continuity” have a common thread or theme emerging from them that is a measure of what Malcolm sees as “changes” from Abbott’s policies. Best exemplified in the transcript of a speech by the Prime Minister to the science prize awards dinner in Canberra last year, “If somebody else has done something that is even better than what we have thought of, then we will, recognising that plagiarism is the sincerest form of flattery; we will pinch it and use it.”

In his own words, this soft “plagiarism“, dominates the changes he has wrought. There is a typical pattern of evidence of previous governments, reports and communities that have held pre-existing ideas which appear to have been mostly regurgitated, modified, re-costed with cheaper alternatives, to be released as his re-badged “changed from continuity” policy. Not withstanding the couple of additions I’ve included, Malcolm was happy to call them his changes to Leigh Sales. Despite his penchant for spending millions promoting his innovative “ideas boom” ($28 million to date) there is nothing revolutionary, innovative or creative being generated in these “changed” policies.

Now to be honest, is there anything that says a policy has to be innovative? No! It is also fair to say that many of these are at least a partial recovery from the ideological destructiveness of the Abbott Government (ABCC not included). It is also fair to say that none of these organizations or causes have a hope of recovering to the point they had progressed to, before the Abbott Government under any of these “changes to continuity”. Most of them will, in fact, be easy targets for abuse and/or mismanagement.

For Malcolm, these are low-risk manoeuvres that fly under the radar of his neo-conservative right-wing backbench, that – where they will fail – he can pass them back to the originator of their idea, but where they succeed (if any of these possibilities can) for which he can claim credit. Win-Win for him, perhaps not for us.

So as many, including Tony Abbott, are saying the Coalition’s policies represent a continuation of the Abbott government, Malcolm was pitching for “Continuity with changes”! Re-branded, reworked, low cost, low impact, policy changes that represent the re-branded concepts of other people, introduced in a manner that has largely dismantled their previous record of success and for which future successful outcomes are in considerable doubt. Simon Blackwell in an interview with the Guardian described the slogan as “hollow and oxymoronic”, but perhaps that is the way we ought to explain the changes from the Abbott continuity implemented by this, new leadership.

Misogyny in Leadership

February 21, 2016 by James J. Morrison W.G. Dupree Leave a Comment

Outgoing Australian of the Year, Rosie Batty

When Rosie Batty stepped down from the Australian of the year and David Morrison stepped up, albeit, with considerable controversy after his appointment, there was a consistent demand for the leadership of the country to address sexism and violence against women proactively. While this columnist has recently highlighted the current government’s continuing misogynous approach to legislative drafting, it’s time to consider in other respects how our government is, (or is not) leading the battle for change.

Leadership style is a significant predictor on how any organisation will respond to issues that arise. In fact, while “trickle down economics” is a recognisable farce, trickle down culture is a psychologically generated reality. There is a premise in organisational psychology that the people in an organisation will adopt aspects of the leadership with which they are provided. It is just as applicable in the context of a national ethos as it is a corporate one. So how is it that our national leadership, protects and facilitates progress for women in our society?

Malcolm's Words, to be followed by what deeds? — Malcolm’s words, to be followed by what deeds?

On the plus side, Prime Minister, Malcolm Turnbull returned $100M of the $300M Abbott cut from the front-line support of domestic violence issues and commented: “… violence against women begins with disrespecting women.” Turnbull then went on to admit, “this is a big cultural shift.” It was a remarkable admission from a party, which not long before, had been embarrassed by Julia Gillard’s famous speech on Abbott’s Misogyny. Lauded internationally by everything but the mainstream media, her speech went viral to the clapping of women high fiving one another – or where alone – thrusting a fist into the air. Of course, defending the charge against the leadership of the day by proclaiming Abbott was married and had three daughters and that he did not see sexist signs he was standing next to when rallying the faithful, did not help. On the first point, should not his defenders be less concerned about what Abbott accomplished for his daughters? Rather the focus should be on women who were not his daughters?

Tony Abbott in front of "ditch the witch" - Photo: Andrew Meares — Tony Abbott in front of “ditch the witch” – Photo: Andrew Meares

The signs proclaiming Julia as a “witch” were ironic given the controversy that would later surround Peter Dutton. Aside from ignoring the signs of the time, Abbott’s history of frequent sexist gaffes and attitudes did not exhibit leadership in support of women either before or after becoming their ministerial representative. But you may correctly point out that we have moved on from his leadership.

Turnbull’s reign, of course, sliced into a dreadful recent history where women in Australia had suffered violent deaths – 84 in 2014 and 79 in 2015 – most due to domestic violence. If foreign terrorists had inflicted these deaths, the government would have declared a state of emergency.

Malcolm Turnbull, although, vigorously defended all of Tony Abbott’s policy decisions as evidenced by an interview with Alan Jones – the transcript of which – is on his website. He later released a Christmas Budget with changes to Medicare, Family Benefits, Day Care amongst numerous cuts that will disproportionately affect women.

Initially, when Turnbull returned a third of the Abbott cuts, the funding was redirected to the placid response of alternative legal aid, police counselling, locks, CCTV & 20,000 mobile phones. Who would benefit from these offerings – security companies, police, communication providers (which was Turnbull’s last portfolio) and locksmiths certainly?

But if you are a woman being abused, to where do you run? Most shelters once supported are now closed. The new $5M website with its “RESPECT helpline” offers trained police who may:
1. believe you; (disbelief was a problem previously); and.
2. put you in contact with a locksmith and security advisor to setup your CCTV.
This will not assist if your partner comes home drunk or angry and having spotted him in advance on your CCTV, you seek to grab your kids and head out the back door to a shelter. Oh, that’s right – what shelter? (Abbott closed those!)
You might find a newly formed one-stop legal support group to advise you. However, they are unlikely to have experienced staff, because all experienced legal practices moved on when Abbott defunded their pre-existing services. Knowledge and intellectual capital take time to accumulate.

It’s important for those in leadership to understand that:
• at least 62% of domestic abuse occurs in the victim’s home. (Some have suggested it as high as 73% as the ABS statistics do not include unreported assaults);
• only 3.8% of assaulted women are hurt by strangers. In fact statistically, your child is safer with a stranger (despite the claims of stranger danger) than they are from a child’s immediate or extended family.

So victims often need somewhere else to go – as do their children. Cutting resources for safe support is therefore not showing much leadership on the issue, despite Mr Turnbull himself having successfully courted popularity amongst female voters. The popularity that described his efforts in terms that ranged from that of “a good start…” to Mia Freedman’s associate’s reaction of “I can’t decide whether I want Malcolm Turnbull to adopt me or ravish me”. Women have expressed significant hope for the positive and well-articulated message Turnbull delivered, despite no gains in significant policy for safe support against domestic violence. Much verbosity but a domestic violence package that was too small, misdirected and some may suggest a patronisingly political snow job to solicit loud applause simply because it appeared to be different to Abbott – despite doing nothing to undermined Abbott’s previous funding cuts. In fact, Tony Abbott has been consistently and correctly stating, that nothing has actually changed since his ejection from leadership, regarding what policy he instituted.

"First Dog" makes sexism clear. — “First Dog” makes sexism clear.

But even Turnbull’s message of strong condemnation of abuse of women has been tainted. Jamie Brigg’s unsolicited advances on a woman smack of all the hypocrisy of male privilege and misuse of power. Thankfully he was dismissed by the unanimous vote from his party brethren, including Peter Dutton. The hypocrisy of Peter Dutton’s “mad [effing] witch” text about a female journalist who dared to point out Brigg’s misogyny just reinforces the denigration. Peter Dutton’s faux pas with his texts, clearly demonstrates that despite voting with his party for Brigg’s dismissal (presumably to be seen to be politically correct), his private sympathies were for Jamie Briggs.

So why does Turnbull fail to decry this behaviour amongst his ranks in an unambiguous manner that Lieutenant General David Morrison addressed the defence force over misogyny in the army? It is absolutely clear that David Morrison is completely unambiguous in his delivery of the speech – written by Cate McGregor – about what he considers unacceptable behaviour. Where as there is a great deal of ambiguity in Malcolm’s approach. He seems ambivalent, cagey and unwilling to “prosecute” his front bench. Surely it is time to be unambiguous about any sexism. Good leadership must dictate an unequivocal stance.

Articles reporting on Rosie Batty’s attendance at Mr Turnbull’s announcement of the return of one-third of the Abbott funding cut were expressed as a “good start” and “heading in the right direction” (perhaps in the hope they may be witness to the missing $200M being returned). However, there would appear to be no evidence from party leaders that they have even left their starting blocks on these issues. The starter gun has sounded, echoed and dissipated and it is past time that our leaders implement real progress in culture, word and deed. Without all three, Turnbull’s words remain as nothing more than the cleverly articulated whispers of empty “sweet nothings” into the ears of Australian women.

Misogyny in Legislation

February 7, 2016 by James J. Morrison W.G. Dupree Leave a Comment

The legislated law consists of the rules and sanctions to which a society agrees. But legislation may itself be immoral or moral such the facilitation of slavery Australia once engaged in or the apparent abolition of slavery. The founders of many western countries believed that emerging legislation would often require a constitution for a baseline moral imperative. It was hoped the constitution would guide the emerging politics of their fledgling nation. Centuries later the limitations of their predictive capacity of how a nation would evolve are evident. Australia’s founders, for example, would not have contemplated women’s rights to vote, or to be treated equally in private or public endeavours. Let’s face it, England was setting up an offshore penal colony much like Australia has been doing in the 21st Century to refugees, so women’s rights were not high on the agenda. The struggles of only a century ago by woman to acquire the right to vote as depicted in the current movie, “The Suffragette” remind us that political legislative reflection of societies morality can be slow to catch on. So in the 21st century, how does our legislative morality stack up on the subject of the protection of women?

When Prime Minister, Malcolm Turnbull, apparently appeared to have reversed Mr Abbott’s harsh cuts by returning $100M in funding to support domestic violence sufferers, it seemed the political morality had begun to shift. Few focused on the fact that Abbott had cut $300M in the financing of legal aid, shelters and other support services for domestic violence. In Abbott’s first fortnight in Sept 2013 he:

dismantled a $1.5B in wage increases for 350K childcare workers (a female dominated workforce),
appointed only one woman to his cabinet,
announced his position as “Minister for Women” not held by a man since the 1970s – when it was created as a position,
scrapped the Social Inclusion Board which provided guiding policy on poverty issues (suffered predominately by women).

His government’s asylum seeker record was particularly harsh on women. He started by separating a refugee mother from her newborn baby in November. After that, he hid information about the government’s treatment of asylum seekers and the sexual assault and pressuring of women for sexual favours by the guards. These failures of the duty of care were later revealed by the government’s own Moss Report after the government had disparaged Gillian Trigg’s earlier similar account. Then, the independent Immigration Health Advisory Group for asylum seekers was disbanded in December which had been actively lobbying for attention to the health needs of female asylum seekers (including dental and neonatal health and adverse health consequences of trauma such as early menopause).

Abbott also:
• suspended the Wage Connect program – despite its good outcomes for unemployed people, particularly women attempting to return to the workforce after raising children;
• converted Start-Up Scholarships to loans and increased student debt of 80,000 students by $1.2 billion, hampering those with discontinuous careers. (wherein the loan interest accruals continued even during periods of low to no wage earning when debt repayment requirements are suspended)

The end of Wage Inequality ... news! — The end of Wage Inequality … news!

As for wage inequality, that appears to be disappearing. Apparently?! Much just like the sloganistic “Stop the Boats” policy, it was not that the inequality or boats stopped – it was just that the reporting stopped. In March Abbott removed the “red tape” which required companies to report on inequality in the workplace. In this case, silence also descended for “on wage matters“, as all private sector companies with more than 100 employees no longer had to report on gender inequality in the workplace. What isn’t measured, isn’t managed.

Minister for Aboriginal desperation and deprivation

Abbott’s failures towards indigenous people are a matter of very public record, especially as once their resident Minister. (He was neither black nor female yet purportedly represented both.) When he abolished the position of Co-ordinator-General for Remote Indigenous Services he removed a position that managed dealings across a range of different government portfolios. This increased the risk that women and children’s health and safety issues would deteriorate.

Short lists of Abbott's cuts to Women's safety — Short lists of Abbott’s cuts to Women’s safety

The AusAID graduate program eliminated 38 jobs when it was abolished. The program had also contained equity requirements, which promoted female graduates. When he defunded the Public Interest Advocacy Centre by $34M, it returned prioritising access to the law to those with the deepest pockets and the fattest bank balances instead of promoting public interests issues for economically disadvantaged groups, such as women. Women were also more significantly impacted by Abbott’s scrapping of the Home Energy Saver Scheme which helps women from low-income households lower their electricity bills by an average of $300 less a year. Interestingly on this point, delegating his greatest achievement as Minister for Women to throwing out climate legislation as it allegedly created a $550 a year benefit for the average family. This achievement was somewhat undercut by killing the Home Energy Saver Scheme. Aside from the fact many women thought to deal with climate mattered, for most households, the savings of $550 a year never eventuated.

Abbott also extended his reach to harm the interests of women overseas by cutting Australia’s contribution to overseas aid initially by $4.5 billion, and then even more later. These programs supported those in extreme poverty including the participation of girls in schools, micro businesses predominately run by women and interventions against domestic violence and women’s health. It is worth noting that Tanya Plibersek asked Malcolm Turnbull, “Can the Prime Minister confirm how much he will restore to the foreign aid program after the cabinet he was part of cut the budget by $11.3 billion?” He refused to answer and as yet nothing has changed.

Which leads us to the question – what has really changed now that Tony Abbott is out and Malcolm Turnbull is in?

From Abbott to Cash, which woman chose this?

Turnbull’s first reshuffle was to introduce more women on the Government’s front bench, although this flies in the face of his record on appointing women to boards and the small numbers of women in his previous shadow cabinet. So is this a renewed genuine interest in women or a politically strategic face saving? Which ever this is, is increasing the numbers of women in politics a major women’s issue? I am not sure the current female incumbent is doing anything of a better job. Instead, women are more likely to be seeking representation that results in being considered with equity and fairness in society, finance, politics and leadership. The distinction therein does matter!

In relation to Malcolm’s $100M domestic violence funding support (always keeping in mind Abbott took $300M), the most generous comments by women support group representatives is: “It’s a great start…”. The reference to “start” pre-presumes there is more to come. Everyone who can read the list of items being funded realises that it’s not refunding anything Abbott cut. It is not refunding the women’s shelters Mr Abbott closed. The crippling of Community Legal aid was hardly positive news for women. Abbott’s wavering on defunding, then reneging, only to propose defunding later on, of Legal support entities resulted in many closures. There were few (possibly no) women’s groups desperately asking for phones, locks or security cameras and yet, that was what was offered.

Rebate Cuts or funding private insurance?

Interestingly, the Turnbull government’s latest private health insurance survey is exploring allowing private health funds to discriminate against people on the basis of age, gender or health status. Already the items removed from the Medicare Benefits Scheme target children’s surgeries and the removal of Pap smears, blood tests, urine tests and imaging services that will have a direct impact on Women’s health issues, not to mention the plan to phase out Family Tax Benefit (FTB) payments to the tune of $260.4 million in budget cuts. In addition, the government has decided to:

make cuts of $441.0 million to reduce the Child Care Subsidy,
cap the number of places in the Interim Home Based Carer Subsidy program,
remove the access to the affordability support element under the Community Child Care Fund, and
slash $930.6 million so that family day care educators can not receive Commonwealth child care fee assistance for family day care sessions provided to their children on the same day that they provide family day care to other children.

(This last point is taken almost verbatim from the December Budget papers.) Flexible, high quality & affordable childcare is essential to balance work and parenting responsibilities. The government is not only making it less affordable but is not addressing access to childcare. A recent report demonstrated that childcare centres in the city couldn’t cope with the demand by families, undermining the ability of women to return to work. Why are we engaging in this penny pinching from women and children when there are billions in subsidies to mining, elite schools, private health insurers? Changing the tax laws to stop tax avoidance by companies would earn billions more than what is being cut. How can anyone suggest these cuts don’t represent a discriminatory bias?

Surely though, there is a voice for women in the Government that will be heard on issues of sex discrimination? Is that not the role of the Sex Discrimination Commissioner? It would if the role was filled appropriately. The last commissioner, Elizabeth Broderick, left the post in early September before Tony Abbott was replaced by Malcolm Turnbull. While Gillian Triggs was assigned to act in that role temporarily, being onlyno full-time replacement has been announced under Mr Turnbull’s leadership, despite many questions as to why. Many will be aware of how responsive this government has been to Gillian Trigg’s in her primary portfolio, so one can expect her to receive the same response in her part-time job. Perhaps overburdening her is part of a strategy.

For a government that expresses such concern for women’s issues, what sort of legislative morality is Mr Turnbull exhibiting? Certainly not one that has changed anything significant in policy or legislation that Abbott initiated. When I say “anything significant”, I am making a concession for DV support, being only one-third of the funding preciously cut. The question should be though, how significant was that concession? Given the domestic violence refunding added new and mostly unlobbied for support for our current death toll of two women a week, but revoked none of the cuts Abbott made, does this constitute a significant legislative change in support of women? Should it more appropriately be seen as a cynically manipulative change to elicit applause from women because it was apparently differentiated from Abbott’s moral compass? If the legislation and policies of politics have remained predominately unchanged in direction since Abbott left, what is the direction of moral compass exhibited overall by legislative and strategic direction of this government in regards the women of Australia?

Coalition’s Christmas legacy

January 3, 2016 by James J. Morrison W.G. Dupree Leave a Comment

Christmas, one normally assumes a time of goodwill and charity. We read and absorb selected stories because they are ones that remind us of our need to give to others. At this time charities take advantage of the spirit of goodwill of this time, to promote their work amongst the community, and gather the bounty of “grain into the barn” sufficient to last them through the dry seasons that follow this outpouring of generosity. People are also distracted with matters of family, consumerism, charity, religious observances, friends, barbecues, children, school year completions, holidays and – in areas that aren’t in the retail industry – a slowing down for office workers. Parliament closes down for the year, and so one assumes that political machinations take a break. It is also assumed, of course, that no one is listening to them at this time of the year. However, what is recognized as a lull in proceedings (where everyone is preoccupied), it would appear that the LNP party has been surprisingly active. Those who have not taken their eye from the Liberal party’s agenda were surprised to discover activity in the making.

The liberal party’s ideals of charity and goodwill for Christmas appear to have taken a turn towards making decisions that continue to act against our collective good as a nation and as a people. Perhaps, they thought we weren’t looking, and many of us were not!

ENVIRONMENT

Tourism in Australia is eclipsing mining as a revenue source for our economy. As real commodity prices continue to drop – as they have since 2011 – and expectations in an international environment committed to a reduction in coal usage; hope for a return to commodity price booms are diminishing year by year. As the mining industry continues to employ now less than 2% of the workforce, and a diminishing return to the GDP. (Actually, mining contributed nothing/zero/zip/nada to economic growth in the last December 2014 quarter – dropping from 5.6% in 6 months.) It would appear to be an unusual and short-sighted resolution to approve a massive expansion of the Abbott Point coal terminal. Given that such a conclusion will result in the mass destruction of our coral reefs, which form one of the major attractions (that being tourism) in this region, how does trashing tourism and favouring mining make for an economically sustainable decision? The ENVIRONMENT minister, Greg Hunt’s Christmas time decision, to approve the expansion as mentioned above – which will involve dredging 1.1 million cubic meters of spoil near the Great Barrier Reef Marine Park. This surely will be questioned as environmentally irresponsible in the courts as previous attempts to progress this mine have been.

FOREIGN AFFAIRS

Peter Dutton appears to have followed similar levels of compassion as did the former Minister for Immigration, Morrison’s charitable inclinations. The flip-flopping over the decision to deny a terminally ill Pakistani man (Hassan Asif) to see his family, and this he suddenly reversed AFTER holding a press conference defending his decision to deny the visa. It is notable that his first instinct was to deny access to this dying man’s family. Hassan was NOT a refugee or an asylum seeker or someone who came here by boat. Aside from having flown here legitimately, he was a student studying in Melbourne, who discovered that he had terminal cancer. Oddly (to Dutton’s perceptions), his parents wanted to be with their son as he died. Unfortunately, as no commercial airline would fly him home in his condition, the only option available was for his family to fly to him. Christmas charity, or any charity for that matter, was certainly not foremost on Mr Dutton’s mind. But this is consistent with the nature of the compassion exhibited by all Ministers for Immigration produced by the Liberal Party to date.

WORKING PENALTIES

Christmas was also the time that the productivity commission report into workplace relations was released. Amongst its recommendations, the slashing of penalty rates for Sundays confirmed the inclination to revoke these rights that have been a long running preoccupation of the Liberal party to worker’s rights in Australia. Workplace relations minister, Michaelia Cash, has particularly avoided addressing the issue with the press and criticised Labor and the unions for “scaremongering”. Despite attempts to relegate the report to an arena of objective non-governmental decision-making, it is – to date – surprisingly aligned with the conversations about revoking penalty by members of the Liberal party. In a country of high unemployment where the unemployed outnumber the jobs available in the country by a very wide margin, the proposal that the savings would allow businesses to hire more people has numerous inherent fallacies socio-economically and mathematically.

Example calculation of the mathematical Savings in Penalty rate changes.

The majority of Australian workplaces (85.1% of all businesses) are micro businesses (i.e. less than five employees). The savings from penalty reductions would not be enough to fund the employment of additional staff. Under the current proposal, a business would save itself a quarter of the hourly rate on a Sunday (Double time on Sunday reduced to 1.5 times hourly rate – according to the productivity commission report). By my calculations, a business would need to be employing at least a dozen employees (depending on the mix of days any given staff may be employed in a business), so that penalty rate reductions could fund an additional full-time employee. Small businesses that employ 5 to 19 people represent 10.8% of Australian Businesses. The argument that this is beneficial simultaneously for micro to small businesses and employment rates is simply not true for the vast majority of Australian workplaces. That is 95.9% of businesses for those who haven’t yet done the math.

ABS Stats on percent of real business numbers in Australia

It is only the larger industries (0.3% of businesses) and medium sized industries (3.8% of businesses) which employ more than 20 people in their enterprise that may find significant enough savings to afford to make a change to unemployment in this country – always providing they were so willing. When employment in larger industries is diminishing (such as mining, manufacturing & construction), consumer confidence is low, retail sales data shows diminishing returns, and wage growth is already sadly small, why exactly would large. Where is the economic stimulus being directed?

There is, in fact, little evidence that changing penalty rates will do anything to change employment rates. If you diminish the wages available to employees in small businesses, less money will be expended in the economy by these employees, as they reduce discretionary spending to pay more “essential” bills. There is an argument that in fact, such steps will only push us further into recession. We have only avoided an official classification of a recession in the last term of 2015 because of the national accounting practices in relation to recording defence spending, not because, we have had any real growth in the economy.

The personal cost of absent penalty rates

Essentially revoking penalty rates is a massive wage cut for many already poorly paid workers. What they are paid is usually entirely spent within their local community/economy. The LNP claim that reducing penalty rates will allow a small business to employ more people is fallacious, as has already pointed out. The consequence of having your small number of employees paid less, is that they withdraw discretionary spending which would otherwise be supporting a local economy spread over a diverse range of businesses. The singular café owner who circulates his saved costs over a less diverse range (or saves it, as margins on many small enterprises are minimal) producing a smaller economic effect. Consequently, less money with a smaller circulation range results in a more recessed economy. Add now a nation wide multiplier effect.

Penalty rate reductions do provide a boost to large company’s bottom line. Many of these corporate organisations – as we have recently become aware – channel profits overseas and pay no tax (or very little).

These companies removing money from our economy partially accounts for a huge national balance of payment inequity. These corporation’s contributions are therefore limited to:

direct wages (which will reduce with fewer penalty rates to pay),
local chattels & infrastructure,
local services providers,
good or services they produce,
and of course, large donations to the Liberal and Labor parties.

COMMUNICATIONS (NBN)

The next Christmas present is the one the government has provided to the increasingly privatised Telstra organization. We have now been witness to the most absurd parody where the already over-costed but inferior speed internet NBN design choice has resulted in an $80 Million Christmas gift to Telstra. What for, you may ask? We are apparently paying Telstra to repair the copper network the NBN had already bought from Telstra in the first place for $11 billion. Apparently, the ageing copper wires need to be replaced, and this was announced on the Monday before Christmas. Merry Christmas Telstra, Turnbull disguised as Santa Claus, has delivered a significant parcel of money to fix the crappy copper network you sold to us in the first place. It is no wonder the government wanted to sneak that one quietly past us all. We have a history of chronic failure and escalating costs dogging the steps of the National Broadband Network from the days it began. Especially since the Liberal party changed the parameters under which our national network should work. This latest farcical payment is just another reason for the nation to shake their head in despair for us ever becoming competitive internationally with nations that are far in advance of where we are.

Low Tech NBN Internet super dirt-track Plans

Just as a refresher on the National Broadband Network which began with Howard in which the increasingly obsolete copper was reviewed for preference for a fibre network by a Senate committee in 2003. Despite several false starts it never really floated until Labor announced its intention to build it, as an election platform in 2007. Submissions abounded till 2009 when Labor proposed a Fiber to the Premises/House (FTTP/FTTH) solution. NBN Co was created in 2009, and both criticism and praise followed the complicated progress of its creation and funding. Labor’s FTTH (Fiber to the House) model provided for 100Mb/sec transfer rates and public surveys showed over 70% public popularity. Malcolm Turnbull in opposition began advocating a Fibre to the Node (FTTN) model but took no account of how degraded the copper network and street hubs were to connect from nodes to home and workplaces despite being otherwise advised. The promise was 25Mb/sec by 2016. The Abbott government changed the strategy mid operation to an FTTN model in a politically motivated review. Nobody managed to keep any of their promises or claims and pricing rises, and technological obstructions multiplied. The result has been a short sighted waste of time that has squandered billions of dollars on obsolete technology that will leave our country lagging behind the developed world. (44th for Internet speeds in the world so far).

HEALTH AND EDUCATION

Economic prosperity for any country can only be enhanced by the health and education of its participants. Undercutting both education and health can only ultimately be detrimental to economic growth and prosperity. Two days before Christmas, the Federal Health Minister, Sussan Ley, announced that 23 tests and procedures formally covered by Medicare would be dropped. Amongst these tests and procedures – which cost $6.8 million in 2015 – including ear, nose and throat surgery and diagnostic imaging. But who uses such tests you might ask? Whoever it was, that used these tests and surgery, accessed it over 52,000 times in 2015. Therefore, Sussan Ley’s claim that these items removed, “was obsolete”, does not stack up statistically. The Australian Medical Association has, of course, been up in arms over the loss of these items from the Medicare benefits schedule. The financial cost to the community alone is not one that will contribute to the economic prosperity of our country.

Even the Health Minister, Sussan Ley, admitted some patients “may be worse off”. The AMA has accused the government of restructuring health costs to families as a way of introducing a form of co-payment by stealth following repeated failures to convince the senate it was a “viable” idea.

CUT, SNIP, CHOP

If you were one of the early Christmas shoppers, you might have noted Malcolm Turnbull’s latest budget was delivered in early December as the Christmas trees were appearing in our stores. Malcolm’s early Christmas contributions included cuts to aged care, health bodies, aged pension, income support payments, welfare payments, family assistance/payment/tax benefit/day care, green environmental programs, numerous health programmes and a plethora of education and training programs. These and other cuts demonstrate the continued failure of the Liberal government to want to support the health and education of the Australian people. On the next subject of Education – already late in the Christmas season – members of the government are saying the Turnbull government will not fund the final two years of the Gonski school funding. Merry Christmas to our children!!

INNOVATION

All of these cuts were implemented to fund a $1 billion innovation package announcement, which was vaguely delivered without real detail. It seems vaguely reminiscent of a similar announcement was made by Kevin Rudd made in April of 2008 at the “Australia 2020 Summit convention”. The irony of that seems to have escaped the Liberal Party despite social media commenting on it incessantly. Most of this is not provided by way of direct funding but by way of tax cuts and exemptions. Other encouragements such as foreshortening bankruptcy periods will most certainly be exploited by unscrupulous individuals to avoid debt repayment and allowing them a faster return to business. Thereby repeating the process by fleecing another group of undiscerning victims. The large business concerns, will, of course, rebrand themselves as “innovators” to take advantage of even more lax tax laws resulting in providing even less contribution to the Australian economy. This is the Liberal Party’s version of the solar panel and insulation scheme. Failure to attend to detail is something of which both major parties are guilty. That said, it’s not hard to determine who will benefit from Turnbull’s package.

Innovation will only work when supported by:

technology (strike the NBN),
a healthy population (strike GP Co-payments & Medicare reductions),
educated community (strike industrial skills, Gonski and expensive Tertiary education)
and a number of stimulus programs which would support workforce participation in innovation.

If your party is already undercutting education initiatives (with plans now submitted to the senate many times) to render the burden of education across the community in higher debt levels to participants, then from where does the appetite for innovation come? Certainly not from educated Australians who are burdened with debts. Indebtedness reduces people’s willingness to participate in “risk” that Turnbull is fond of suggesting we take. It also provides a sociological inhibitor to undertaking high-risk innovation, when a safe low-risk office job that will ensure financial capacity to repay debt is in the offering, although with our massive unemployment levels and relatively tiny job vacancies … perhaps not.

Turnbull does correctly realise that Australia’s private sector industries are often too risk-averse to invest in the commercialisation of new technologies and innovations without massive government support. His $1 billion initiative is such a “support”. Historically brilliant Australian innovations are developed and exploited overseas. As a result, many innovative research and development workers find work and support away from Australia. As it is, Australia businesses frequently outsource technical jobs overseas and bypass local intellectual and creative industry workers for reasons usually related to cost of wages and recruitment. (as do the banks, communications and travel industries along with every small business person who gets their work done by cheap foreign labour). All of these practices undercut Australian innovation and development. The private sector enterprises unwilling to develop innovative ideas to a commercial level, preferring instead to survive by sponging off the taxpayer through subsidies and driving down wages and conditions of their employees. So who exactly is Turnbull hoping will engage in all this innovation by providing, even more, taxpayer funded “subsidies” or tax relief? Is this an approach that will work or backfire? Funding to organisations that have historically contributed to innovations in technology such as CSIRO has been savagely cut under this government. So one has to question just how much thought has been put into the practical applications of this idea.

CSIRO

Now there is much talk about Turnbull providing an extra $100 million in funding to the CSIRO. This step is not dissimilar to the situation in regards his much-publicised increases to domestic violence funding of $100 million after Abbott had previously cut $300 million and overseen closures of numerous shelters. The situation here is remarkably similar. It turns out that Abbott cut $111 million in the May budget to CSIRO resulting in organisation wide staffing cuts. Twenty percent of CSIRO’s staff have already left. Suggesting that CSIRO now has sufficient funding to re-employ these experts is naïve. It overlooks the fact that science is a global labour market and the disengagement that comes from arbitrary retrenchment. Further, there has been a loss of momentum on resource & time critical projects that have been closed for months now. Very much like the D.V. situation where shelters had already closed and had not been reopened, CSIRO projects have similarly closed. Again a striking similarity of language used by the recipients of Domestic Violence and CSIRO funding where the term “first step to repair” was frequently used. Projects have already been irrevocably damaged by the loss of intellectual capital provided by long-term researchers. The damage has already been critical and funding a recovery will cost far more than was taken initially. It is also the case that the funding is tied to certain commercial provisions, so CSIRO is no longer free to return to its original directions even if they were able. If Turnbull is contributing less than that which was taken, it is simply insufficient to repair damage already incurred. The consequence is that real innovation from an organisation, which has historically delivered numerous technological breakthroughs, has already been lost.

MERRY CHRISTMAS FROM THE GOVERNMENT

I believe this covers all the Christmas contributions that the Liberal Party have offered to Australia for 2015.

Happy Christmas from the Liberal Party taking support from the elderly pensioners, penalty rates for low-income earners, Medicare rebates from the ill, education programs from students, tourism from tourists, sustainability from the environment, hope from refugees (or any ‘bloody’ foreigner), and research funding from scientists. Unlimited charity and generosity are extended to mining and big business interests, particularly those that fund their party – to the tune of million$.