by Alan Thornhill
Malcolm Turnbull might well find it hard to sell the budget strategy his government will introduce into parliament on Tuesday.
Not that there is anything particularly striking about it.
Indeed early indications that the Treasurer, Scott Morrison, gave in a television interview on Sunday, suggest that his first budget is likely to be a timid document.
The most attractive thing the Turnbull government is offering is an extra $1.2 billion for Australia’s schools, if they agree to meet new minimum standards of literacy and numeracy.
The Labor government, of Julia Gillard, tried that.
It didn’t work, then, and is difficult to believe that it will work in future.
That’s largely because our politicians, not our educators would, once again, be setting those standards.
Labor learnt from its mistake and has advanced some thoughtful ideas, under its Gonski proposals.
The Prime Minister has also ceded some ground to Labor, with his less that adroit handling of the election, itself.
He might well have allowed the current session of Federal parliament to run its full term.
That would have meant a full parliamentary election about September, or perhaps even a little later.
But he was not satisfied with that.
So he threatened to call an early election, if the Senate would not agree to his plan to revive the Australian Building and Construction Commission.
The Senate called his bluff.
That has left Mr Turnbull facing an unusually long election campaign, with little to say.
Yes, there will be some tax cuts, for people earning more than $80,000 a year, some tightening of the superannuation tax rules, for what Mr Morrison calls people on “very high” incomes, and tobacco taxes will be increased.
But negative gearing and the GST will both be left alone.
And, yes, our new submarines will be built in Australia.
But this still looks more like nervous politicians’ strategy, drawn up to win the next election, than the bold reforming approach, the country may actually need.
And John Howard’s former chief of staff, Peta Credlin, might well have a point.
She was quoted, in the Murdoch press, at the weekend, saying the Opposition Leader, Bill Shorten, is the man to watch now, as he has been busily working away at policies, while all this has been going on.
by Alan Thornhill
Trend employment growth in Australia has eased.
The Bureau of Statistics reported today that this indicator, which the Bureau regards as the most reliable it produces, fell to just 2.2 percent in March.
That was down from 2.6 per cent in December last year.
On its more commonly used seasonally adjusted measure, the Bureau reported that the number of Australians with jobs rose by 26,100 in March.
That left the nation’s seasonally adjusted labour force participation rate for March at 64.9 per cent.
The Bureau said too that – on the same basis – the number of people unemployed fell by 7,300 during the month
This left Australia with a seasonally adjusted unemployment rate of 5.7 per cent for the month, 0.1 percentage points below the February level.
by Alan Thornhill
Malcolm Turnbull and Bill Shorten meet again tonight for the second of their pre-election debates: ABC
Barrack Obama visits Hiroshima ABC
More than 100 leading scientists say the Rio Olympics should be moved or postponed over the Zika outbreak BBC
by Alan Thornhill
The Turnbull government may be facing the rare prospect of a defeat in Federal parliament which could lead to an early election.
This prospect has arisen because the government of Prime Minister Malcolm Turnbull does not control the Senate and he is anxious to set up a building industry watchdog, the Australian Building and Construction Commission Bill.
This is one of a number of bills on which debate between the two houses of parliament, the House of Representatives and the Senate is deadlocked.
Control of the Senate is currently shared by the Labor party, the Liberals and Nationals, the Greens and various micro parties.
The micro-parties and independents would probably be wiped out if voting reforms that the government is also proposing area adopted.
For that reason – if no other-a fierce and messy debate on these plans has been predicted this week -and – in fact – it has already begun.
The Treasurer, Scott Morrison, was severely embarrassed yesterday when he was forced to admit in parliament that that cuts he had flagged earlier, for this year’s budget are no longer likely to be realised.
This led Labor members to suggest that his position is now untenable.
MrMorrison is now saying that individual tax cuts – which he has previously flagged – will not be possible until the budget is in better shape – he Morrison has dashing hopes he had previously raised, in that area. Now, he is saying that only tax cuts for business are still on the cards. Mr Morrison regards them as a tangible “growth dividend.” That is Treasury-speak for economic growth and higher employment rates.
So some opposition members are now wondering if the Treasurer is engaging in the traditional pre-budget game of expectation management, where gloomy predictions are seeded before delivering a bretter than expected outcome on budget nigh, to to sighs of relief.
However the shadow treasurer Chris Bowen sees the government’s mixed messages on tax changes with glimpses of a higher offset by loweri aand now earlier cuts in tax rates as evidence that Mr Morrison lacks authority.
“It took Joe Hockey two years to crash and burn,” Mr Bowen told Parliament.
It’s taken Scott Morrison six months.”
“When it comes to economic policy and tax reform, the last three years have been a waste, with the government promising three more years of the same.”
He said it was time Mr Morrison “considered his position”.
The comments followed media reports that the Treasurer has told colleagues that a lack of “fiscal headroom” made tax cuts for individuals impossible at present.
This is despite the fact htat Mr Morrison wasg among the most vociferous advocates of returning “bracket creep” to taxpayers who through wage inflation had drifted into higher taxation brackets.
The government effectively surrendered the scope for large-scale tax reform once it pulled out out of lifting the GST – a measure it was understood Mr Morrison was more inclined towards than Prime Minister Malcolm Turnbull.
On Tuesday, Mr Morrison attacked Labor’s proposed halving of the capital gains tax discount on housing, arguing it would inhibit rather than encourage investment.
Confusion over the finalisation and release of the tax package had seen it flagged for April, then in the budget, and then both, although a government source said it was merely a matter of keeping release options open allowing budget details to be reported in the days leading to it.
But the date of the budget itself remains in play
by Alan Thornhill
Barnaby Joyce’s imminent rise, to the post of Australia’s Deputy Prime Minister, is producing some apprehension in the nation’s capital, Canberra.
Not least on the issue of decentralisation.
Mr Joyce’s promotion became inevitable last week, when his National Party colleagues chose him to succeed the party’s previous leader, Warren Truss, who is retiring.
The National Party, now the junior partner in Malcolm Turnbull’s coalition government, was once called the Country Party.
And Mr Joyce retains its strong rural and regional focus.
That is reflected in his attitudes to decentralisation.
So no-one in Canberra was particularly surprised when plans to decentralise government scientific and other work to the Great Southern region, near Albany in Western Australia’s Great Southern region, Northam in that State’s Wheatbelt, or even to Tasmania, seemed to take on new life, with the announcement of Mr Joyce’s new job.
He doesn’t actually become Deputy Prime Minister, of course, until he takes the oath of office.
That is scheduled for Thursday this week,at Government House in Canberra.
Those looking for differences between Mr Joyce and Mr Turnbull, won’t have too much trouble finding them.
Mr Turnbull is, after all, a free-trader, right to the soles of his highly polished shoes.
There is something of a protectionist about Mr Joyce.
He would not shrink from a direct intervention in a market, if he believed that to be valuable.
All this is illustrated, clearly enough, in his attitude towards decentralization.
But he is clever about it.
Earlier this month, while announcing the relocation of three research organisations from Canberra to regional Australia, he said:”I have accepted proposals from three Canberra-based research and development corporations to increase their regional presence, which will boost jobs and growth in Dubbo, Wagga Wagga, Toowoomba and other areas.
“As well as being home to vibrant farming communities, these regions also have some of the best agricultural universities and research facilities in the country.
“It is logical that strong links should exist between the RDCs, universities and farmers on the ground in each industry.
“Being geographically closer to the industries they serve will strengthen their relationships and help the RDCs better understand their individual industry’s needs.”
There are limits to this kind of thing, of course.
Valuable knowledge, built up over years, in a sophisticated city like Canberra, which offers a wide range of educational and medical services, can be lost if a key scientist, chooses to leave a particular project, rather than accept a particular transfer.
And that whole process can become economically expensive, if adopted for political, rather than industrial reasons.
There are some fine questions of balance, here.
by Alan Thornhill
Malcolm Turnbull declared that his new cabinet “combines youth, new talent, and experience” as he announced its membership at a press conference in Sydney today.
The truth, always, is a little more complicated.
The reshuffle that the Prime Minister had announced, just months before the next Federal election, was not his choice.
It was forced on him by the resignation of a minister, Stuart Robert, who had held the Human Services Portfolio.
Until Labor pursued him relentlessly in Federal parliament.
It alleged Mr Stuart had used his public office to promote the interests of a company that donates generously to the Liberal party.
And that he did so while on a private visit to China.
Meanwhile the Opposition Leader, Bill Shorten, was cheered enthusiastically at a Labor conference, also in Sydney.
That happened as he explained new tax policies meant to make new home purchases more affordable for young Australians.
Beyond that there was a sense, in the conference room, that Labor’s fortunes might have changed.
And that it might now have at least some chance of defeating the government in the forthcoming elections, even though it has been trailing the Coalition in the polls for several months.
But who has found a place in Mr Turnbull’s new Cabinet?
The Prime Minister congratulated Barnaby Joyce and Fiona Nash on their respective elections as Leader and Deputy Leader of the National Party, the junior partner in his Coalition government.
And he said:” Barnaby Joyce will consequently be sworn in as the Deputy Prime Minister and he will retain his portfolio of Agriculture and Water Resources.
“His Deputy, Senator Fiona Nash, will be sworn in as the Minister for Regional Development, Regional Communications and Rural Health.”
Mr Turnbull also said:” I’m appointing Andrew Robb as a Special Envoy for Trade between now and the election so that he can support Steven in the transition into the new portfolio and ensure that Andrew’s remarkable range of international contacts will be introduced to his successor.
Darren Chester will take on Warren Truss’s responsibilities for infrastructure and transport. Darren will make a formidable contribution in this portfolio.
He has been one of the younger stars in the Parliament and recognised as such for a long time.
Mathias Cormann will retain his responsibilities that he’s taken on in an acting capacity but he’ll retain them formally as the Special Minister of State in addition to being the Finance Minister.
“As you know, Mal Brough informed me earlier today that he did not wish to be considered for a position in the new executive line up given the fact that the police investigations are continuing and will continue at least for some months, as he understands.”
Senator Scott Ryan will be sworn in as the Minister for Vocational Education and Skills.
Now this ministry was previously, has been held by Luke Hartsuyker and he is not featuring in the National Party’s ministerial line up on this occasion.
‘I want to thank Luke for his contribution in that portfolio.
“He also has made a great contribution to the Coalition in opposition as well and we worked very closely together when I was the Shadow Communications Minister and he was the Shadow Minister for Regional Communications.
“He’s a great parliamentarian, a great coalitionist and he will be missed.”
“Alan Tudge will be sworn in as the Minister for Human Services.
|“Dan Tehan will be sworn in as the Minister for Defence Materiel and the Minister for Veterans’ Services.|
“Senator Concetta Fierravanti-Wells will be appointed and sworn in as Minister for International Development and the Pacific.
“This is a very exciting promotion for Connie and recognises her extremely successful and very important work as the Assistant Minister for Multicultural Affairs.
“Senator Matt Canavan from Queensland will be sworn in as the Minister for Northern Australia.
“He will work closely with the senior minister in that portfolio, Josh Frydenberg and the Cabinet Minister.
“This is a policy area of Northern Australia, of northern development which is absolutely central to Australia’s growth and future prosperity.
Mr Turnbulll said the changes ‘in the Assistant Minister ranks would be:-
Keith Pitt will serve as the Assistant Minister to the Deputy Prime Minister.
Craig Laundy will become the Assistant Minister for Multicultural Affairs.
Jane Prentice will be the Assistant Minister for Disability Services working with Christian Porter.
Angus Taylor will serve as the Assistant Minister to the Prime Minister with special responsibility for Cities and Digital Transformation. These are two key whole of government areas and they will be taken, continued to be driven through my leadership and my department in the future.
Dr Peter Hendy will serve as Assistant Minister in the Finance portfolio supporting Mathias Cormann and also as Assistant Cabinet Secretary.
Senator James McGrath will continue to serve as my assistant minister but will take on additional duties supporting Peter Dutton as Assistant Minister for Immigration.”
The Prime Minister said his new team would be sworn in on Thursday morning.
by Alan Thornhill
Australia may soon be seeing more students from Singapore.
This is part of the adjustment that this country has been forced to make to the collapse in iron ore and coal prices.
We are now looking to expand service industries – like education – instead.
Australia’s Trade and Investment Minister, Andrew Robb, who is now in Singapore to drum up business is well aware of all that.
In a statement today Mr Robb said he would be seeking both to assess the Australia-Singapore Comprehensive Strategic Partnership and to advance progress with it,
The Prime Ministers of both countries launched the partnership last June.
It marked the 50th anniversary of diplomatic relations between the two countries.
Mr Robb said the new partnership identifies a wide range of initiatives across the economic, foreign affairs, defence and security fronts.
“One of the many initiatives identified was an early review of the Singapore-Australia Free Trade Agreement (SAFTA), which entered into force back in 2003,” he added.
“ The review is scheduled for completion by July this year,” he said.
“Other economic initiatives include expanding two-way investment flows and exploring investment opportunities in sectors such as food, agribusiness and infrastructure in areas like northern Australia.”
Mr Robb also spoke of increasing the flow of skilled labour and visitors; joint tourism cooperation; building additional research and development partnerships and enhancing aviation and maritime connectivity.
“There are also various initiatives to deepen defence cooperation in areas such as military training, exchanges and postings; intelligence sharing, counter-terrorism, organised crime and cyber-crime,” he said.
“A strong focus has also been placed on deepening links between our educational, scientific and research institutions, including new opportunities for students under the New Colombo Plan,” he said.
“There will also be more cooperation between our arts institutions,”Mr Robb added.
He said, too, that a shared strategic perspective and complementary economies are the cornerstones of the Australia-Singapore relationship.
“To me our ambition for deepening our relationship and economic integration should be akin to the close relationship we enjoy with New Zealand,” he added.
Mr Robb said the FTA is an important component of our economic relationship, and the review provides an opportunity to further strengthen our bilateral trade and investment links with our fifth largest trading partner and foreign investor.
“The review of the FTA is timely and consideration is being given to enhancements in areas such as goods trade, services, investment and government procurement,” he said.
“There are significant opportunities to build on our relationship across a range of sectors including in science and research, advanced manufacturing, agribusiness and infrastructure.”
by Alan Thornhill
Australia’s exporters have more reason than other Australians to celebrate the New Year according to the Federal government.
In a statement today the Department of Foreign Affairs and Trade said that’s because new tariff cuts, under Free Trade Agreements with both China and Korea kick in from today.
It said:”“ Tariffs on Australian exports to China have now been cut twice in less than a fortnight, following initial reductions when ChAFTA entered into force on 20 December 2015.”
“The tariff reductions on exports to Korea will be the third round of cuts under KAFTA, since its entry into force on 12 December 2014.”
“”The positive results of these agreements are already being seen.”
” RBK Nutraceuticals, based in Sydney, have increased their exports into Korea by a huge 161 per cent since the beginning of the agreement.”
“Tasmanian cherry growers have also enjoyed huge increases in demand due to the commencement of KAFTA with the state exporting 185 tonnes of cherries into Korea over last summer compared with just five tonnes the previous year.”
“Our beef exports increased more than 30 per cent to be worth over $550 million after the 2015 tariff reduction.”
“The conditions are right for this year’s tariff cut to strengthen the tailwinds for this valuable trade even further.”
Each year KAFTA puts up to $40m back into the Australian beef industry instead of into paying tariffs.”
“Importantly, these recent cuts also bring us closer to our competitors.”
“Never again will the differential between Australia and USA beef exports be greater than 5.4 per cent.”
The Departmennt also said:” Remaining tariffs on Australian resources and energy exports will also be further reduced.
It said the three agreements have made Australia vastly more competitive in a market of more than 1.5 billion people.
The Department said:” Detailed information on each agreement can be found at the Department of Foreign Affairs and Trade and Austrade websites, or www.openforbusiness.gov.au.
Weathercoast by Alan Thornhill
A novel on the murder of seven young Anglican Christian Brothers in the Solomon Islands.
Available now on the iTunes store.
Alan Thornhill is a parliamentary press gallery journalist.
Private Briefing is updated daily with Australian personal finance news, analysis, and commentary.
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