by Alan Thornhill
The Prime Minister, Malcolm Turnbull, is trying to steer the election campaign back to where it started.
That is with his attempt to restore peace in the building and construction industry.
And in a speech to the American Australian Association & US Studies Centre last night, Mr Turnbull also argued that Australia’s increasing involvement with Asia is making this country’s reliance on America more important than ever.
He said the government had launched an unusually long –eight week – campaign for re-election “in order to break the deadlock between the House of
Representatives and the Senate over two critical pieces of legislation relating to industrial relations.
“and one of those is the restoration of the Australian Building and Construction Commission,” Mr Turnbull said.
That aim had – previously – been hardly mentioned during the campaign, which has now passed its half-way mark.
But, last night, Mr Turnbull declared that the course he had chosen is: “the only way we can get the rule of law restored to the construction sector.”
He said the sector employs one million people.
“ and the restoration of law to that sector is a vital economic reform, and part of our economic plan to secure our prosperity.”
“the only way we can get that passed is through this double dissolution and getting the numbers collectively in the House and the Senate to pass that law and restore rule of law through a joint sitting of the parliament,” Mr Turnbull said.
“ That’s our commitment,” he added.
Mr Tunbull also paid tribute to a previous Liberal Prime Minister, John Howard, who attended last night’s function.
He said: “John understood that the United States is the irreplaceable anchor to the global rules-based order – an order built upon shared political values and common economic and security interests.
“The truth of his insight has been affirmed by every subsequent Prime Minister of Australia.
“Earlier this year I visited and thanked our men and women serving alongside US forces in Afghanistan, in what is now the longest commitment in our military history.
“And also our forces in Iraq, where we are together with the United States and other allies jointly pushing back, rolling back the brutality and barbarity of Daesh or ISIL.
“And not a day, truthfully not a minute, goes by without our intelligence agencies working together – saving lives – in the fight against terrorism.
“Our ANZUS alliance and broader relationship is anchored in a history that is even deeper and richer than many of us realise,” Mr Turnbull concluded.
by Alan Thornhill
The Prime Minister, Malcolm Turnbull, told coalition MPs today that an early Federal election might well be a “live option.”
He also signaled in Federal parliament later that he is prepared to fight that election on industrial relations in the building industry, when he declared that his government would again introduce a bill to set up an industrial relations watchdog, the Australian Building and Construction Commission.
The Senate has already rejected a similar bill.
Mr Turnbull also told parliament that he is prepared to construct his government’s policies for economic recovery on the “very strong” base of the construction industry, which directly employs more than 1 million Australians.
Every lever of the government and every lever of our economic policies will be directed towards producing a big performance,” Mr. Turnbull declared.
An election had not been expected until September, when the present government’s three year term is due expire.
However it could be delayed until 2016.
The Prime Minister also welcomed remarks the Reserve Bank Chairman, Glenn Stevens had made slightly earlier, when he said that the bank’s marker interest rate would stay on hold at the historically low rate of 2 per cent for another month, as expected.
The PM said he was not prepared to accept the level of industrial disruption and strikes which had persisted in building and construction, after it had subsided in other sectors of the economy.
These led, eventually, to the appointment of a Royal Commission to investigate the industry.
It has just reported, although the government has kept some volumes of its report secret.
Mr Turnbull also welcomed observations Mr Stevens made about signs of improvements already evident in both the Australian and global economies.
He said, too, that Australia’s economic growth is roughly twice that of Canada, which is also resource based.
Mr Stevens said in his statement that recent information suggests the global economy is continuing to grow, though at a slightly lower pace than earlier expected.
“ While several advanced economies have recorded improved growth over the past year, conditions have become more difficult for a number of emerging market economies, ” he said
:”Commodity prices have declined further, especially oil prices.
This partly reflects slower growth in demand but also very substantial increases in supply over recent years.
“The decline in Australia’s terms of trade, which began more than four years ago, has therefore continued.
Financial markets have once again exhibited heightened volatility recently, as participants grapple with uncertainty about the global economic outlook and diverging policy settings among the major jurisdictions.
“Appetite for risk has diminished somewhat and funding conditions for emerging market sovereigns and lesser-rated corporates have tightened. But funding costs for high-quality borrowers remain very low and, globally, monetary policy remains remarkably accommodative.
In Australia, the available information suggests that the expansion in the non-mining parts of the economy strengthened during 2015 even as the contraction in spending in mining investment continued. Surveys of business conditions moved to above average levels, employment growth picked up and the unemployment rate declined in the second half of the year, even though measured GDP growth was below average.
“The pace of lending to businesses also picked up.”
Mr Stevens said”:”Inflation continues to be quite low, with the CPI rising by 1.7 per cent over 2015.
“This was partly caused by declining prices for oil and some utilities, but underlying measures of inflation are also low at about 2 per cent. With growth in labour costs continuing to be quite subdued as well, and inflation restrained elsewhere in the world, consumer price inflation is likely to remain low over the next year or two.
“Given these conditions, it is appropriate for monetary policy to be accommodative. Low interest rates are supporting demand, while regulatory measures are working to emphasise prudent lending standards and so to contain risks in the housing market.
“Credit growth to households continues at a moderate pace, albeit with a changed composition between investors and owner-occupiers. The pace of growth in dwelling prices has moderated in Melbourne and Sydney over recent months and has remained mostly subdued in other cities.
“”he exchange rate has continued its adjustment to the evolving economic outlook.
Mr Stevens said”’ “At today’s meeting, the Board judged that there were reasonable prospects for continued growth in the economy, with inflation close to target.
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by Alan Thornhill
Some might call it a mini-budget.
All the Prime Minister said, in an interview with Leigh Sales on the ABC last night, though, is that his government would release “an innovation statement” within the next two weeks.
Well, perhaps he did add a little dressing, to make the prospect enticing.
By promising, for example, that he would would “set out a very large number of substantial measures. to drive the innovation that would ensure that Australians, their children and grandchildren, will have great jobs.”
“…better jobs in the future that will drive our economy,” he added.
Then he laid it on the line.
“I don’t think anybody has any doubt that if we are to remain the high wage, generous social welfare net country, first world country that we want to be then we need to be more innovative, more competitive, more productive and the innovation statement will be a good example of the measures the government is undertaking to achieve that.”
Yet Mr Turnbull, himself, has some catching up to do in this regard.
He saddled Australia with the pursuit of an internet system which, even if achieved, would offer speeds be well below those of many other first world countries, such as France.
Of course, with its vast expanses to connect, Australia does have difficult – and expensive – problems to overcome, in building anything that could – even remotely – be called a fast internet system.
Yet the picture emerging from Mr Turnbull’s attempt to do so – on the cheap – has not been impressive, so far.
Long waits for connection.
There can be no doubt about one thing.
This “innovation statement, when it appears, will be drawn up to underwrite Mr Turnbull’s bid for re-election next year.
Politically, his situation has its difficulties, despite what some are calling his initial “honeymoon” period.
He is still the man who became Prime Minister, without a popular mandate.
And he is not short of opponents who stand ready to remind him of that fact, if he starts making mistakes, as most Prime Ministers do, as they start to settle into office.
Mr Turnbull also declared during his interview last night that he is “comfortable” in his new job.
But make no mistake.
His handling of the Brough affair is already being watched very closely.
by Alan Thornhill
On-line retail sales eased by 0.1 per cent in May, according to the National Australia Bank.
The Bank said this was a significant slowdown on the 1.6 per cent trend growth seen in April.
However the bank added:” We estimate that online sales are now 9.0 per cent higher compared to a year ago.”
And it said that:” In dollar terms, we estimate Australians spent $17.1 billion on online retail in the 12 months to May 2015.
“This level is equivalent to 7 per cent of spending at traditional bricks & mortar retailers as measured by the ABS – excluding cafés, restaurants and takeaway food, to create a like-for-like comparison- in the 12 months to April 2015.” the Bank said.
by Alan Thornhill
Tony Abbott woke this morning to find the post budget surge in support for his government among both voters and business crumbling.
A Morgan poll, published today, showed Labor’s support, on a two party preferred basis, rising 2 per cent to 53 per cent, to the government’s 47 per cent.
That would put Labor clearly ahead, if an election was held now.
And a Dun&Bradstreet survey showed that business expectations for the start of the next financial year have dropped sharply despite business friendly concessions in last month’s Federal Budget.
The Prime Minister, though, will find some consolation in the results of the latest Newspoll.
It shows Tony Abbott now enjoys a stronger overall approval rating than Bill Shorten.
Gary Morgan said:” The ‘Budget Bounce’ for the Coalition Government has proved short-lived.”
He attributed Labor’s revival, largely, to Bill Shorten’s moves to support marriage equality.
He noted that gay marriage had been supported, overwhelmingly, in Ireland’s recent referendum.
And he added:”A Roy Morgan poll conducted in 2011 found an even larger majority of Australians – 68 per cent – support the right of gay people to get married compared to only 30 per cent who think they shouldn’t have this right.”
The government will be bitterly disappointed by the results of the D&B survey.
The Treasurer, Joe Hockey, in particular, has been making much of the enthusiastic response he says he has encountered, to the government’s $5.5 billion worth of tax cuts for small business, which he announced in last month’s budget.
But the D&B survey of Business Expectations showed that the expectations of business executives are weak.
D&B said executives had returned a weak third quarter outlook on their expected sales, profits, investments and employment levels.
This took the Business Expectations Index down to 13.4 points from 20.7 points in the previous quarter and 19.5 points at the same time last year.
“The sharp drop in third quarter expectations confirms that businesses are looking beyond this year for support from an economy that is growing at less than three per cent,” D&B said in a statement.
“Concerns about the current and short-term potential of the Australian economy were reinforced by last week’s capital expenditure numbers from the ABS, which showed a seasonally-adjusted 4.4 per cent drop in Q1 2015,” it added.
by Alan Thornhill
This coming week is likely to be uncomfortable for some of Australia’s top executives.
They will be facing the Senate Economics Committee, at hearings in Sydney, Canberra and Melbourne.
The Committee – one of the toughest in the business – will be conducting “an inquiry into tax avoidance and aggressive minimisation” by companies registered in Australia or just trading here.
The hearings follow weekend reports that just 10 companies channeled more than $30 billion out of this country last financial year, mostly to tax havens overseas.
These executives do have friends in the Federal Treasury, where senior economists believe Australia’s corporate tax rate – at 30 per cent – is both uncompetitively high and expensive to collect.
Some have even been talking – in public – of cutting that rate to zero.
They would prefer to see the necessary revenue collected through a higher goods and services tax, instead.
But that idea is not wildly popular.
However the Tax Office – which will be watching this week’s Committee proceedings very closely – is having none of it.
It noted, in a submission to the Committee, that “while most corporates pay the tax they are required to under Australian law,” others do not.
The ATO identified these as “Some private groups linked to complex group structures.”
It said they:” display more aggressive tax behaviours and characteristics.”
And it added: “Some multinational enterprises engage in complex profit shifting structures.”
The ATO then said:” These present tax avoidance risks threaten the level playing field of business.”
The tax man has a message for all who travel down that path.
It might be summarised as: “We’re watching you.”
Those listed to appear before the Committee, on its first day of this week’s hearings, on Wednesday in Sydney include Ms Maile Carnegie, the Managing Director of Google in Australia and New Zealand, Bill Sample, Microsoft’s Corporate Vice-President (Worldwide Tax) and Tony King, the Managing Director of Apple Pty. Ltd. in Australia and New Zealand.
Steam is already escaping.
Google, for example, has been a favourite target of the Treasurer, Joe Hockey, when he is talking of tax minimisation, through profit shifting.
He has, reportedly, been considering a “diverted profits tax” to tackle international profit shifting.
Even though the independent Parliamentary Budget Office has warned that such a tax – which some are already calling “a Google tax” – risks breaking Australia’s international tax treaties.
Google has clearly been stung, by this kind of talk.
It’s submission, to the Committee, strikes a distinctively defensive note.
It says many countries, including advanced economies, compete for investment adding:-
“Google is exactly the kind of innovative, risk-taking company that many governments are seeking to incentivise, through their tax regimes.”
That includes Australia.
“Australia incentivises investment through its R&D tax credits,” the IT giant said.
Google doesn’t, exactly, add:” So no more snitchy comments, then!”
But some will – undoubtedly – read something very like that into its submission.
Rupert Murdoch’s global conglomerate, News Limited, is also keen to be seen to be pulling its weight, tax-wise.
It has presented a table to the Committee showing that its “actual tax paid – including withholding tax” amounted to an impressive $417.3 million over its past five income years.
But doubts persist.
One broadly based organisation, United Voice, for example declared in its submission to the Committee that:” well known brands such as Apple, Google, IKEA and Chevron have become the public face of corporate tax avoidance.”
It said this had prompted a number of positive responses, including the formation of the Committee’s inquiry.
And, of course, Joe Hockey’s announcement of an audits into ten foreign multinationals operating in Australia.
This should be an interesting week.
by Alan Thornhill
The New South Wales Premier, Mike Baird, is set for a comfortable victory in today’s State elections, according to a new poll.
The Morgan poll puts the vote for the conservative coalition he leads at 57.5 per cent, against Labor’s 42.5 per cent, on a two party preferred basis.
However the Labor Leader, Luke Foley, still hasn’t given up hope of snatching victory, in a late run.
But pollster, Gary Morgan, said: “…. Mike Baird is set to win tomorrow’s NSW State Election comfortably despite the L-NP support falling substantially since the 2011 NSW Election.”
“The ‘Presidential-style’ campaign run by the NSW Liberal Party – concentrating heavily on the popular Baird – Australia’s most popular political leader – appears to have worked,” Mr Morgan added.
He said Luke Foley had attempted to ‘scare’ voters out of handing Baird his first election victory as leader by warning of increased electricity prices if the Coalition pass their controversial legislation leasing 49 per cent of the ‘poles and wires’ for 99 year to private enterprise.
However Mr Morgan added:” judging by the momentum in the final week of the campaign, the positive messages presented by Baird on the campaign trail have proved to be ‘the winner’ against Foley’s negativity.”
by Alan Thornhill
The Prime Minister, Tony Abbott, says that although Australia is in a “querulous” time, he expects to serve at least a full term as prime minister.
He was speaking to reporters in Auckland, after meeting his New Zealand counterpart, John Key.
They questioned him closely, on his expectations about the Liberal leadership.
Mr Abbott replied: “… I was elected first of all by my Party Room and then by the Australian people to do a job.
“The government of a country is not easy.
” Particularly at a time when Australians are focusing on the glass half empty rather than the glass half full.
“This is a particularly febrile and querulous time in our national life.
” But I’m just pushing on with the job. I’m, as you would expect, undistracted and undeterred by the hyperventilating which seems to be taking place at least amongst the media.
“And every day, I work for a better Australia and that’s what the party expected of me when they elected me back in 2009, and that’s what the public expected of me when they elected me 18 months ago.
“I’m looking forward to every day continuing to earn the confidence of the Party Room.
“And I’m looking forward to continuing to have the confidence of the Australian people.
“And I’m looking forward to submitting myself to their judgment some time towards the end of next year.”
That is when the next Federal election is due.
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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