by Alan Thornhill
The Federal government says it is “absolutely critical” that Bill Shorten sticks to his promise to support some $650 billion worth of budget cuts.
But, speaking in a television interview, the Minister for Revenue and Financial Services, Kelly O’Dwyer, also hinted at the possibility of further adjustments to a superannuation policy that the Prime Minister, Malcolm Turnbull, once described as ironclad.
Ms O’Dwyer said it is for the Opposition Leader, Bill Shorten, not the government, to explain why Labor is no longer saying that it will support the budget repair measures that it promised to back, before the July 2 elections.
She said Mr Shorten would have: “…no economic credibility if he is prepared to walk back from the commitment that he made to the Australian people prior to the election.
“ Now they banked on over $6.5 billion worth of savings, they banked that in their bottom line, in their Budget figures.
“If they are saying now, ‘no we didn’t really mean it,” that would show that Labor cannot be trusted.
“ We absolutely believe it is important for Bill Shorten to honour his commitments,” Ms O’Dwyer said.
Several Liberal MPs, particularly in the Senate, have been pressing the government for bigger tax breaks on super, than it was prepared to concede before the election.
And Ms O’Dwyer’s reply, when questioned on the subject today, suggests that they may have been making some progress.
She said : “What we have said on superannuation is that as the fiscal pressures increase and as our demographics change we need to make sure that superannuation is fit for purpose going forward.
“That it is affordable, that it is sustainable and that it is flexible and that it allows Australians to be able to save for their retirement.
“We’re going to be legislating an objective for superannuation that says that it is for the retirement incomes of Australians that will either supplement or substitute for the Age Pension.
“What we’re doing at the moment is we are having discussions with stakeholders, we’re having discussions with colleagues as we would ordinarily do…”
She said that is being done with an open mind.
“ We’re encouraging people to put money into their spouse’s superannuation if they’ve got a lower income spouse.
“And we’re giving them a tax offset to do that.
“ We’re making it a level playing field for people who want to be able to have tax deductions for their superannuation contributions so that if they’re employed by a small business that doesn’t actually offer this, they’re not put at a disadvantage.
“ We’re creating a level playing field for people to be able to contribute to their superannuation because at the end of the day, it’s their retirement income and we want them to be able to have a good and strong retirement,” Ms O’Dwyer said.
by Alan Thornhill
Tony Abbott has missed out on a place in Malcolm Turnbull’s new ministry and Christopher Pyne is to become Australia’s new minister for defence industry.
The Prime Minister has also named Josh Frydenberg Australia’s new environment minister.
This has angered environmentalists who say Mr Frydenberg has always favoured the coal industry over the Great Barrier Reef.
Mr Turnbull’s new ministry and cabinet are to be sworn in next week.
The Prime Minister’s decision to leave his predecessor, Mr Abbott, off his front bench comes as no surprise, even though hard right MPs, within the Liberal Party, would have welcomed such a move.
As he promised do before the election, Mr Turnbull generally avoided unecssary changes changes when he announced his new team today.
But Mr Frydenberg will become minister for the environment and energy.
Mr Turnbull said all his previous cabinet ministers had been reappointed although there had been some changes and expansions in their duties.
He said: “Senator Fiona Nash will add Local Government and Territories to her Regional Development and Regional Communications roles.
“Christopher Pyne will be appointed to the new role of Minister for Defence Industry, within the Defence portfolio.
“Mr Pyne will be responsible for overseeing our new Defence Industry Plan that came out of the Defence White Paper.
“This includes the most significant naval shipbuilding program since the Second World War.
“This is a key national economic development role. This program is vitally important for the future of Australian industry and especially advanced manufacturing.
“The Minister for Defence Industry will oversee the Naval Shipbuilding Plan which will itself create 3,600 new direct jobs and thousands more across the supply chain across Australia.
“Beyond shipbuilding, there is a massive Defence Industry Investment and Acquisition Program on land, in the air and inside cyberspace.
“This is a massive step change set out in the Defence White Paper. This investment in Defence Industry, as you know, is a key part of our economic plan.
“It will drive the jobs and the growth in advanced manufacturing, in technology, right across the country. And I’m appointing Christopher to be the Minister to oversee that and ensure that those projects are delivered.
“As I said at the outset, this is a term of government for delivery.
“We will be judged in 2019 by the Australian people as to whether we have delivered on the plans and the programs and the investments that we have promised and set out and described in the lead-up to the election.
Greg Hunt will move from Environment to become the Minister for Industry, Innovation and Science, where he will drive the National Innovation and Science Agenda.
“Can I say that Mr Hunt has been an outstanding Environment Minister and he served in that portfolio in Government and indeed, in opposition.
“He has a keen understanding of innovation, he has a keen understanding of science and technology and he will give new leadership to that important portfolio and those important agendas so central to our economic plan.
“Josh Frydenberg will move to the expanded Environment and Energy portfolio combining all the key energy policy areas.
“These include energy security and domestic energy markets for which he has been previously responsible in the current portfolio. Renewable energy targets, clean energy development and financing and emission reduction mechanisms which are part of Environment.
“Senator Matt Canavan will be promoted to Cabinet as the Minister for Resources and Northern Australia and I welcome Senator Canavan to the Cabinet in this key economic development role,” Mr Turnbull said.
by Alan Thornhill
A body representing older Australians is urging the government to “stick to” its promised reforms to superannuation.
The Council on the Ageing says its “integrity will be at stake” if it doesn’t.
The council’s, Chief Executive Ian Yates said a small number of Liberal members are seeking bigger tax breaks for the rich, at the expense of less well off Australians.
In a statement today. Mr Yates said: ““The Coalition Party Room needs to stand strong on this.
He said that is necessary: “.. in the interests of good social and economic policy, electoral integrity and Budget reform
“… otherwise they will send a message that they govern for the financial interests of the top few percent of wealthy Australians.
Mr Yates said there are fundamental equity issues here .
“…superannuation tax breaks cost over $25 billion in foregone revenue.
He said that is“ – over ten per cent of income tax – and growing fast.
“Middle and lower earners, the majority of whom are women, have to pay more in taxes – both now and in the future – to pay for super tax breaks that largely benefit high-income men,”Mr Yates said.
He said: “…said the fact that the Prime Minister and Treasurer are under pressure to reverse sound policy to make super fairer, based on a weak narrative about selected poor election results and fewer well-heeled supporters manning polling booths, would be laughable if it wasn’t so serious.”
“In fact a few Coalition dissenters giving air to the complaints of a privileged minority created space during the campaign for Labor to ‘dog whistle’ a so-called threat to super; while later banking the whole of the savings from the super reforms” Mr Yates said.
by Alan Thornhill
By late tomorrow (Monday), we should know what the new Turnbull government will look like, but not what it will do about its proposed changes to superannuation.
The Prime Minister, Malcolm Turnbull, signalled yesterday that a decision on that matter is still some way off.
Labor called that a “humiliating back down.”
Its superannuation spokesman, Jim Chalmers noted that Mr Turnbull had had said before the July 2 election that the government’s proposed changes to superannuation were “absolutely ironclad”.
There are many critics, including some critical ones within the Liberal party, who don’t like the caps the government is proposing to put on tax free contributions to super.
Mr Turnbull, though, insists that they are needed, to make the system fairer.
But he warned reporters in Sydney today not to expect a quick resolution of this issue.
That’s good advice, as those internal critics, in particular, are very powerful.
And they would seriously embarrass the Prime Minister if they forced him to back down, from a position that he, himself, has described as “fair,” so soon after an election.
Mr Turnbull told reporters today that he is listening “very carefully” to the concerns that “my colleagues and others” have raised at the proposed superannuation tax reforms.
“And they will go through the normal Cabinet and party room process.
“We are listening very keenly, I am listening very keenly and carefully to concerns that have been raised by my colleagues, and of course by other people in the community as well,” he said.
But Mr Turnbull added that he would not say more at a press conference.
Mr Chalmers ridiculed Mr Turnbull’s new stance.
“Well, it will be champagne flutes at twenty paces tonight at The Lodge as the members of the Turnbull Government gather to brawl about their superannuation changes,” he said.
“ No amount of taxpayer-funded champagne and prawns will fix the deep divisions in the Liberal Party, in the Turnbull Government, over the mess they’ve made of superannuation,” Mr Chalmers added.
Mr Turnbull also coonfirmed today that there would be some changes between his old ministry cabinet and cabinet and his new ones.
His junior Coalition partner, the Nationals, for example, are expected to get at least one extra seat, because they polled well in the July 2 elections.
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by Alan Thornhill
What happens now that Malcolm Turnbull has at least the 76 lower house seats that he needs to form majority government?
We can expect to see tight government, as the Prime Minister takes up the reins, to start his fresh three year term.
Not quite as tight, though, as the independent Bob Katter has suggested.
Mr Katter warned, not altogether seriously, that a government with a majority of one, might lose a critical vote, if he left Parliament to attend his mother’s funeral, or to respond to a call of nature.
That’s not a worry
Australian parliaments, thankfully, have civilised arrangements called “pairing” to deal with exigencies like these.
The Opposition Leader, Bill Shorten, though, did raise as serious matter, when he warned of divisions in the Liberal party, particularly those involving the hard right, which supported Tony Abbott against Malcolm Turnbull, last September.
They have not forgotten or forgiven.
That became clear this week, when one member, Cory Bernardi, sent e-mails to supporters, urging them not to “… allow the political left to keep eroding our values, undermining our culture and diminishing our important institutions.”
The ratings agency, Standard and Poors, delivered the biggest challenge Mr Turnbull will face late last week, though, when it put Australia’s triple A credit rating on “negative watch.”
It cited both uncertainties which then existed about the July 2 election results and high levels of both domestic and international debt.
This means that the agency might well downgrade Australia’s presently excellent credit rating, if we don’t get those issues under control, over the next two years.
An astute Prime Minister might see it as more than that, too.
A “get out of jail free card” in fact.
Even governments which want to keep their pre-election promises often find it very difficult to do so.
So what could Mr Turnbull do, if he finds himself in that all-too-likely position?
Mr Shorten warned, during that eight week election campaign, that this is no time to be giving big companies $50 billion worth of tax cuts, over 5 years, even if they are to be phased in slowly.
And a report funded by Getup and published just days before the election said big miners and cigarette companies would be among the main winners, from that policy, which Mr Turnbull repeatedly said would create more “jobs and growth.
The miners, perhaps.
The cigarette companies.
So some adjustments can be expected there.
Nick Xenophon might also be in for some disappointment when he comes to Canberra, seeking more money, to protect the jobs of steel workers, in his home State of South Australia.
Mr Turnbull might even be able to convince voters that some restraint in these areas is virtuous, as well as necessary, to avoid extra interest rate pain, for home buyers and others.
If he is astute enough.
by Alan Thornhill
The financial services giant IOOF will be required to accept a measure of external surveillance, under arrangements announced today by the industry watchdog, the Australian Securities and Investments Commission.
However ASIC stopped short of taking further action against IOOF, which offers superannuation products, financial advice and many other similar products.
It noted that, in July last year, it had commenced inquiries into allegations made against I.O.O.F. Holdings Limited and its subsidiaries (IOOF), including issues raised by a former employee of IOOF.
It said the allegations have been the subject of several media articles and an inquiry by the Parliamentary Joint Committee on Corporations and Financial Services.
And it added: “ASIC has now finalised its inquiries.”
It had investigated several issues, including allegations of insider trading,raised by a former employee of IOOF.
ASIC said the allegations had also been the subject of several media articles and an inquiry by the Parliamentary Joint Committee on Corporations and Financial Services.
“ASIC has now finalised its inquiries,” the commission said.
It said the allegations of insider trading concerned an IOOF staff member’s involvement in insider trading before research reports became public.
The commission found that although this did occur it failed to move the share price enough to warrant action.
ASIC’s inquiries also included a review into allegations relating to corporate governance and licensee breaches by IOOF.
It said: “This review identified a number of concerns relating to IOOF’s compliance arrangements, breach reporting, management of conflicts of interest, staff trading policy, disclosure, whistleblower management and protection and cyber security.
And added:” We have raised these concerns with IOOF.
“We have also advised IOOF that in our view the corporate culture at that time within IOOF contributed to these issues occurring.”
Then the commission said: “Concurrent with ASIC’s inquiries, IOOF appointed Price Waterhouse Coopers to conduct an independent review of its regulatory breach reporting policy and procedures and the control environment within its research team.
And it added: “IOOF has made significant changes to their policies and procedures as a result.
The commission said: “While ASIC welcomes such initiatives and steps taken by IOOF to rectify these issues, ASIC has also reached an agreement with IOOF to engage an external compliance consultant to conduct an expanded, broader and more comprehensive review of compliance arrangements within all IOOF business units.”
“ASIC will continue to monitor and work cooperatively with IOOF and its board to ensure the necessary changes are properly effected,it added.
by Alan Thornhill
The Federal government and opposition differed sharply today, after a major ratings agency, Standard and Poors, put Australia’s prized triple A status on negative watch.
It did so citing both the still unresolved Federal election result and high levels of both household and external debt.
The Treasurer, Scott Morrison, said the agency’s move, “reaffirmed the government’s fiscal direction and the need to “stick to the plan” the Coalition set out in its last budget.”
However the shadow treasurer, Chris Bowen, said it underlined the government’s “fiscal failure” and cast further doubt on its budget projections.
The agency’s warning means that Australia’s AAA credit rating might be slashed in future if there is no improvement in its budgetary performance.
This could increase government borrowing costs and weaken international investment.
Mr Bowen said S&P statement is “sombre reading.”
He said the agency “…calls out the Government on three years of fiscal failure, based on unrealistic Budget revenue forecasts and savings measures that will never pass the Parliament.
“S&P makes it clear that it doesn’t have much faith in the Government’s Budget revenue forecasts – a point Labor has consistently made since the Budget in May,” Mr Bowen added.
However Mr Morrison took a different view.
He said the agency’s warning reinforces the government’s message that Australia must “live within its means”.
He said S&P were clearly concerned about the outcome of the election and that “the pace of fiscal consolidation may be postponed”.
Mr Morrison said it would be irresponsible to increase the deficit over the next few years, because “that increases the debt and you can’t get that money back”.
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by Alan Thornhill
Australia’s political leaders will be hitting their phones this week, trying to scrape together enough support to give the country stable government for the next three years.
The main rivals, Prime Minister, Malcolm Turnbull, who heads a conservative coalition and Bill Shorten, who leads the Labor party both found themselves short of the 76 seats they would need, in the House of Representatives, to govern in their own right, at the end of the initial, but still incomplete, count.
Late yesterday, Labor had 67 seats, the Coalition 65, others 5 and 13 were still in doubt.
The Australian Electoral Commission had counted 78.2 per cent of the votes cast, at that point.
It will not resume the count until Tuesday, and the final result, for the House, will probably not be known until some time next week.
Mr Turnbull had made much of the need he saw for stability, during the late stages of the eight week election campaign, particularly after Britain’s vote to leave the EU.
However the swing to Labor, evident in Saturday’s election, showed that voters were more impressed with Mr Shorten’s warning that only Labor could be trusted to protect Australia’s health insurance system, Medicare.
Mr Turnbull had sought support for a plan centred on tax cuts for big companies and high income earners.
He had warned that a big spending Labor government could not be trusted to manage Australia’s economy responsibly.
And, at a news conference today, he welcomed a question from a reporter who asked him if the election result could threaten Australia’s TripleA credit rating.
He thanked the reporter and said: “This is why it is very important … for me to explain what is happening at the moment.”
“We are simply going through a process of completing a count,” Mr Turnbull said.
The Prime Minister also said that he could still form a new government, for the next three years.
However Bill Shorten greeted the initial count with a triumphal declaration.
He conceded that the public might not know the outcome of Saturday’s election : “…for some days to come.”
“But there is one thing for sure – the Labor Party is back.” he said.
But which of these two men is likely to be Australia’s Prime Minister over the next three years?
The answer to that question will depend, very much, on their relative telephone skills.
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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