by Alan Thornhill
Malcolm Turnbull’s policy speech yesterday was a polished performance.
He managed to suggest, for example, that something very like the Brexit disaster could well sink Australia, too, if we don’t vote the right way on July 2.
Without actually saying so.
So is there a danger, in his message that might not be immediately apparent?
Is the lustre, of his carefully crafted message, for example, brighter than its bluster?
The Prime Minister assured voters, constantly, throughout his speech, that his Coalition has a plan to deal with all eventualities, that might arise over the next three years.
Without saying, too specifically, what it was
He also boasted that some 300,000 new jobs had been created, on his government’s watch.
Without mentioning that most of them are part time positions, with pay rates that don’t cover grocery bills
This has left many Australians, particularly the young and the old, without a place in Australia’s modern work-force
So it might well be worth looking again at just what the Turnbull forces are planning to do, as well as what Mr Turnbull, himself, is actually saying.
Tax cuts, both for Australians on high incomes – and the big corporates – are at the heart of his plan.
It may well be worth remembering, at this point, that much of the vote for Britain’s exit, from the EU, came from poor areas, in Britain’s north.
That is from the very people who have suffered most, over the years, from the austerity that came with Thatcherism, and its successors.
Eminent economists, like America’s Paul Krugman are not impressed by arguments that rising wealth for the rich will produce more jobs for the poor.
Krugman says that’s like relying on “the austerity fairy” to overcome unemployment.
However that argument still appeals, even if its strongest appeal is to those who benefit most from it.
by Alan Thornhill
Malcolm Turnbull says: “the shockwaves in the past 48 hours from Britain’s vote to exit the European Union are a sharp reminder of the volatility in the global economy.”
Delivering his policy speech in Sydney for the July 2 elections, the Prime Minister also spoke of the need for stable majority government, experienced economic leadership and a national economic plan.
An edited copy of his 4,000 word speech is reproduced below.
After praising senior Liberals who attended the launch, Mr Turnbull said Australia needs a national economic plan which “recognises the nature of our times – both the opportunities and challenges – and gives us the resilience we need to succeed.”
“Only the Liberal National Coalition can deliver that plan, that security, that leadership,” he added.
“Everything we seek to achieve, all of our hopes, our dreams depend on strong economic growth, “ Mr Turnbull said.
In a strong economy, business is confident and prepared to risk investing, expanding and hiring.”
Mr Turnbull said: “Our business tax cuts encourage small and medium businesses to do just that.
“A strong economy means a mum whose kids are now at school and wants to work a few more days, or work full time, will have plenty of opportunities to do so,” Mr Turnbull said.
“And our childcare reforms will make it easier for her to do so too,” he added.
“It means that young men and women who have left school and are looking for a job will find an employer who is hiring and is happy to give them a start.”
“Our PaTH program with job training and internships will provide additional support to youth employment,”Mr Turnbull added.
A strong economy means we can fund our Innovation and Science Agenda to ensure our kids learn the digital skills of the 21st century, our research is commercialised to create jobs here at home and investors support start-up companies.
A strong economy means that senior Australians know their children will be in good jobs, their investments will deliver better returns and that Government will have growing revenues to support their pensions and health care.
It means that the farmer is getting much better prices for his cattle and can afford to hire a local contractor to replace his fences, clean out a dam or build a new hay shed.
It means the cafe, the restaurant, the hotel has more tourists and they hire more staff to cater for them.
All thanks to our export trade deals.
A strong economy means that builders will be hard at work on new homes and tradesmen will have more jobs.
It means that a manufacturer has more export orders, can buy more equipment, hire more workers and expand their business.
A stronger economy means we can fund over $50 billion in 21st century road, rail and other infrastructure including the Western Sydney Airport and the 39,000 jobs it will create.
“A stronger economy means we can afford to fund world-class education and health services, including Medicare, without weighing down our children and grandchildren with more debt and deficits,” Mr Turnbull said.
A strong economy means we can meet and beat our international obligations to address climate change and do so without massive hikes in electricity prices as Labor would do.
“We have a national economic plan because the prosperity and security of 24 million Australians depend on it,” he said.
Mr Turnbull said success in the 21st Century cannot be taken for granted.
“Always expect the unexpected.”
“We will need to renegotiate vital trade deals with Europe and Britain,” Mr Turnbull said.
“We concluded five in the last three years – Japan, Korea, China, Singapore and the Trans Pacific Partnership.
“In six years Labor concluded none,” he said.
“We have carefully considered what we need to do to succeed, to make the transition from an economy fired up by a once in a century mining construction boom to one that is more diverse, more innovative, smarter, more productive – an economy that wins, and keeps on winning.”
“So there is a clear cut choice at this election,” Mr Turnbull said.
“We present our fellow Australians with a national economic plan every element of which supports more investment, stronger economic growth and more jobs.
“Our plan invests $1.1 billion to promote leading-edge innovation in our industries and to prepare our children for the jobs of the future.”
Our plan promotes export trade deals to generate 19,000 new export opportunities, giving our businesses premium access to the biggest economies in our region.
Our plan invests in local defence industries to ensure every defence dollar possible supports advanced manufacturers and thousands of Australians jobs.
Our Enterprise Tax Plan provides tax relief to tens of thousands of small-to-medium family businesses now and to all companies over time so they can invest, grow and hire more Australians.
“On the other hand, our opponents in the Labor Party have no economic plan.”
“Labor believes its best hope of being elected is to have trade union officials phone frail and elderly Australians in their homes at night, to scare them into thinking they are about to lose something which has never been at risk,” Mr Turnbull said.
“That’s not an alternative government, that’s an Opposition unfit to govern.”
Every element of Labor’s platform would discourage investment and employment.
He described it as: “a recipe for economic stagnation.”
“If returned at this election, we will convene a joint sitting to restore the rule of law in the construction industry and reinstate the Australian Building and Construction Commission, Mr Turnbull said.
So Australians could have the building infrastructure they need “at a price they can afford.”
He said: “housing values would fall in a fragile property market and rents would rise, because of Labor’s investment destroying ban on negative gearing and 50 per cent hike in capital gains tax.
“This threat is real.
“ So we need to be crystal-clear about what our votes will mean,” Mr Turnbull said.
“If your local vote is for Labor, Greens or an Independent, and you are in one of the 20 or so key battleground seats across the country, it is a vote for the chaos of a hung Parliament, a budget black hole, big Labor taxes, less jobs and more boats,” he warned.
Only a Liberal or National vote ensures stable government, a clear economic plan, real funding for the aged, Medicare and education; more jobs and strong borders.
Mr Turnbull urged Australians to: ““Vote for your local Liberal or National in the House and in the Senate.”
“In the last calendar year, there were 300,000 new jobs,” the Prime Minister said.
“Our unemployment rate of 5.7 per cent is well beneath what was anticipated when the Coalition came to office,” he added.
None of this happens by chance. Strong economic leadership supporting hard-working Australians means that, even with difficult global headwinds, we continue to grow our economy and expand our workforce.
And, today, I can announce additional policies from our Coalition team to support our national economic plan for jobs and growth.
Mr Turnbull said his government is determined to ensure none of our regional communities are left behind as we make the transition to a stronger new economy.
“… our regions must be at the frontline of the drive for innovation, jobs and growth,” Mr Turnbull said.
Our ‘Regional Jobs Fund’ is a major commitment… he added.
“As we build a stronger economy, it is vital that we also do all we can to ensure all Australians, especially young Australians, are not left behind,” he added.
So the Coalition woulds deliver a record $73.6 billion over the next four years for all Australian schools,” he said.
“Today, I can announce an additional $48 million for scholarships under the Smith Family’s Learning for Life program, to help disadvantaged students to complete year 12 and transition to work or further education and training,” he added.
“The Coalition will also invest $31 million in programs to encourage more girls and women to study and work in science, technology, engineering and mathematics,” Mr Turnbull said.
It would also help older Australians get smartphones.
He said only about one household in five, with people aged 60 or above, had a smartphone.
“To make their lives easier, to help them retain their independence, and to keep them connected to families and friends, I am announcing today a $50 million Coalition strategy to assist seniors who want to improve their digital literacy skills,” he said.
“And as announced earlier today, my Government will be investing $192 million more in front line mental health services including twelve suicide prevention sites around Australia and ten more headspace centres; and at the same time using smart phone and other technology to make these services more accessible,” he said.
This complements our support for Veterans’ mental health programs, itself a reminder that we best honour the diggers of Gallipoli and Fromelles by supporting the veterans and their families of today.
Mr Turnbull said; “only a strong Australia can be a safe Australia.
“After six years of abject Labor neglect and indecision, our continuous shipbuilding strategy will ensure Australia retains a sovereign capability to build and sustain naval vessels, securing thousands of advanced manufacturing jobs for decades to come,” he added.
Mr Turnbull said:”Labor’s abandonment of John Howard’s proven border protection policy opened the door to the people-smugglers:
The results had included:-
- 50,000 unauthorised arrivals on 800 boats,
- 1200 deaths at sea, of which we know,
- Over 8000 children put into detention,
- 17 detention centres opened, and
- An $11 billion border protection budget blowout.
“In contrast, the Coalition has restored security at the border, integrity to our immigration program – and with it, public trust,” he said.
“I am proud to announce that today marks 700 days without a successful people-smuggling venture to our country,” he added.
“I am also very proud to announce that we have removed every child from detention in Australia,” Mr Turnbull said.
Labor had failed Australia before.
“The people-smugglers are looking for the earliest sign that an Australian government will waver,” he added.
Mr Turnbull said: “our policies are tough.
“But these policies have stopped the drownings at sea, and restored the integrity of, and trust in, our large but orderly immigration and refugee programs,” he added.
To further strengthen our domestic security I announce initiatives that go to that most fundamental of liberties – the right to live without fear of violence.
Mr Turnbull also said: “my first announcement as Prime Minister was a new $100 million package to encourage all Australians to confront squarely and honestly the ugly truth of violence against women and children in our society.
“Today, I can announce a $64 million commitment to crack down on the trafficking of illegal firearms on our streets, in particular by criminal gangs,” he added.
He said he is asking Australians to make a clear choice — to back a strong and stable Coalition majority government that can press ahead with its plan for a stronger new economy.
That would deliver the economic security that enables Australians to fulfill their aspirations.
“That is why I am asking my fellow Australians at this election to support our Coalition’s National Economic Plan for a Strong New Economy,” he said.
by Alan Thornhill
Labor has targeted tax breaks enjoyed by Australians on high incomes, in the Federal budget revisions that it announced today.
The Opposition Leader, Bill Shorten, the Shadow Treasurer, Chris Bowen and Shadow Finance Minister, Tony Burke, said these would include negative gearing and capital gains tax concessions on property purchases.
They said they were advancing a budgdet repair plan “which is fair.”
But many will not agree.
In a joint statement the three Labor leaders said: “Labor has been announcing budget repair measures over the last two years to improve the budget and support our investments in schools and Medicare.
“Today we are announcing a $10.1 billion improvement to previously-announced budget measures, as a result of 2016-17 Budget update.
“This includes boosts to our negative gearing and capital gains reforms, and VET-FEE HELP loan caps.
“Labor’s announced savings from these measures now total $122 billion over the medium term,” they added.
Then they said: “Labor is today announcing a further $6.1 billion in budget improvements through measures that better target the Private Health Insurance (PHI) rebate, reduce wasteful spending and better target family payments.
These measures have been designed to limit the impact on the household budgets of low and middle income families.
They saiid the savings would include:-
*$3.0 billion from better targeting the PHI rebate over the medium term, by continuing the Government’s 2016-17 threshold freeze and removing the rebate from natural therapies.
*Reforming Industry Growth Centres, saving $0.5 billion over the medium term.
*Re-directing DFAT spending to other budget priorities, including the abolition of the Innovation Xchange which focussed on purchasing bean bags. This saves $0.4 billion over the medium term.
by Alan Thornhill
Malcolm Turnbull is facing pressure from all sides over his plan to place caps on the tax advantages that come with superannuation.
While some Liberal Senators are already threatening revolt if the Prime Minister goes ahead with his plan, after winning the July 2 elections a much bigger group-pensioners- is letting him know that they will be unhappy if he doesn’t.
They made their views known, in a news statement early today.
They said:”The nation’s seniors peak body, COTA Australia, and the Australian Council of Social Service (ACOSS) signed a joint letter to the Prime Minister, concerned that good policy was under threat from pressure being applied by a small number of adversely effected individuals.
COTA recently surveyed its membership Election Panel and 87 per cent agreed that ‘the current tax concessions on superannuation contribution favour the well-off’.
The COTA and ACOSS joint letter calls on the Government to hold firm on key features of its Budget superannuation reforms:
“we write to urge you to hold firm in resisting calls to weaken, defer or abandon the key features…of the superannuation reform package contained in your recent Federal Budget.
We have…been very concerned that the tax treatment of superannuation prior to this Budget was not ‘fit for purpose’.
“Superannuation had become a wealth and estate management tool, especially for those with the highest incomes, and this has been having a seriously negative affect on the integrity, credibility and cost of our superannuation system.
“The Budget measures to limit the amount of accumulated superannuation on which earnings will be tax free; to place a lifetime limit on the level of non-concessional contributions; and to lower the annual limit on concessional contributions all go a significant way to addressing those concerns.
“The existing tax system offers too little support for people with low incomes, most of whom are women. The proposed tax offset for low income earners…will have a positive impact…and must be pursued.”
COTA and ACOSS also wrote to the Opposition Leader and Leader of the Greens to urge consensus:
by Alan Thornhill
The Reserve bank has cut its cash rate by 25 basis points to 1.75 per cent
In a statement explaining the decision the bank’s Governor, Glenn Stevens, said:”At its meeting today, the Board decided to lower the cash rate by 25 basis points to 1.75 per cent, effective 4 May 2016.
This follows information showing inflationary pressures are lower than expected.
“The global economy is continuing to grow, though at a slightly lower pace than earlier expected, with forecasts having been revised down a little further recently.
” While several advanced economies have recorded improved conditions over the past year, conditions have become more difficult for a number of emerging market economies.
‘”China’s growth rate moderated furthe”r in the first part of the year, though recent actions by Chinese policymakers are supporting the near-term outlook.
“Commodity prices have firmed noticeably from recent lows, but this follows very substantial declines over the past couple of years.
“Australia’s terms of trade remain much lower than they had been in recent years.
“Sentiment in financial markets has improved, after a period of heightened volatility early in the year.
“However, uncertainty about the global economic outlook and policy settings among the major jurisdictions continues. Funding costs for high-quality borrowers remain very low and, globally, monetary policy remains remarkably accommodative.
“In Australia, the available information suggests that the economy is continuing to rebalance following the mining investment boom.
“GDP growth picked up over 2015, particularly in the second half of the year, and the labour market improved.
Indications are that growth is continuing in 2016, though probably at a more moderate pace. Labour market indicators have been more mixed of late.
“Inflation has been quite low for some time and recent data were unexpectedly low. While the quarterly data contain some temporary factors, these results, together with ongoing very subdued growth in labour costs and very low cost pressures elsewhere in the world, point to a lower outlook for inflation than previously forecast.
“Monetary policy has been accommodative for quite some time. Low interest rates have been supporting demand and the lower exchange rate overall has helped the traded sector.
“Credit growth to households continues at a moderate pace, while that to businesses has picked up over the past year or so.
“These factors are all assisting the economy to make the necessary economic adjustments, though an appreciating exchange rate could complicate this.
“In reaching today’s decision, the Board took careful note of developments in the housing market, where indications are that the effects of supervisory measures are strengthening lending standards and that price pressures have tended to abate.
“At present, the potential risks of lower interest rates in this area are less than they were a year ago.
“Taking all these considerations into account, the Board judged that prospects for sustainable growth in the economy, with inflation returning to target over time, would be improved by easing monetary policy at this meeting,”Mr Stevens said.
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
The Federal government will use its economic heft, over the next few days, to force the States to impose their own income taxes, to cover an $80 billion cut in Federal health and education funding.
It says the cuts, over 10 years, have been necessitated by shortfalls in expected revenue growth.
However figures published by the Australian Bureau of Statistics today, suggest otherwise.
They strongly suggest, that the argument Malcolm Turnbull has advanced, in this case, represents little more than an elaborate job shuffle.
At first, it all seems simple.
The Federal government and the States remain at odds over a tax reform plan that Malcolm Turnbull will put to the Premiers over the next few days.
The Prime Minister will urge the Premiers, at a dinner he will host for them tonight, to impose their own State income taxes to cover an $80 billion cut in Federal revenue, over the next 10 years.
The dinner will launch proceedings in the latest meeting of the Council of Australian Governments, or COAG.
But Mr Turnbull’s already widely discussed proposal has not found favour with the Premiers.
However the Prime Minister will insist that shortfalls in expected economic growth have made the cuts necessary.
He will, almost certainly, urge the Premiers over the next few days, to show patience as there are now fresh signs of strength emerging in the economy.
So what do we have, so far?
Another predictable argument between the Federal government and the States, over the carve up of the money used to govern this country.
But let’s take a closer look at the figures the ABS published today.
They show a remarkably strong trend increase of 3.1 per cent in the number of job vacancies between in Australia between November last year and February this year .
That left Australia with 172,900 job vacancies in February this year.
The Bureau also reported a spectacular trend rise – of 13.4 of cent – in these vacancies since February last year.
Remarkably, the public sector led the way – with a 24.8 per cent trend rise – over the year, to February.
The private sector also turned in a strong performance with a 12.4 per cent trend rise.
But as the Federal government is urging the States to do something they don’t want to do – that is impose their own taxes – they would be quite entitled to ask what these figures mean.
Does the spectacular rise in public sector job vacancies, for example, cover a lot of job churning?
The Premiers might ask, for example, whether highly publicised job cuts – imposed by the Federal government, were real or illusory.
That is were there a significant number of Federal public servants who were sacked in economy drives, say on Fridays, who were back at new desks, perhaps by the following Mondays.
If job churning of this kind was significant, doesn’t that cause the Commonwealth case for State income taxes to collapse?
In any case, the Federal government will be hoping that all vacancies are filled quickly.
That would mean that many more people would – once again – be paying tax and easing the Federal government’s budgetary problems.
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
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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