by Alan Thornhill
How’s Tony going?
With Federal parliament about to begin its winter sittings that is, undoubtedly, the central question in Australian politics now.
But let’s take a broader look.
The bounce that the government has received in the polls after its second – and more user friendly – budget was predictable.
What we don’t know yet is whether Tony Abbott can hold – and build on his new found support – or whether things will slip back to where they have been over recent months.
There are several complications.
Neither of the major parties, for example, has its natural leader at its helm.
In retrospect, the independents Tony Windsor and Rob Oakeshott had a point – when they decided after the 2010 election that Tony Abbott didn’t have the stability needed to be a Prime Minister – and supported Labor instead.
And many Liberals would still feel more comfortable under their former leader, Malcolm Turnbull, than Mr Abbott as they move towards the next elections.
Mr Turnbull, certainly, has his faults.
But he also has an eloquence – and related gifts – that Tony Abbott simply cannot match.
A look over the fence, though, shows that Labor isn’t led by its best man, either.
With names like Gough Whitlam, Bob Hawke and Paul Keating, still ringing in Australian politics, Labor has produced some real political pizzazz in recent years.
Bill Shorten is not – yet – being compared with any of those Labor heroes.
The most common complaint, in Labor circles, about the current Opposition Leader is that he is simply “not cutting through.”
Not yet, at least.
And the time – before the next election – whether early or not – is running out very quickly.
But Chris* Bowen who is – probably – Labor’s best bet – if Bill was to go – has simply shown no interest so far in trying out for the nation’s top job.
Tony Abbott bases much of his political appeal on something very deep – and not particularly respectable – in the Australian political psyche.
He does that as he boasts,constantly, about stopping the boats.
And, none too modestly reminds us of the much feared “refugee flood.”
However a growing number of voters is recognising the contribution that Vietnamese refugees are making to the sophistication of Australian life.
And many are starting to back the Greens.
This moving batch includes a substantial clutch of voters who have, traditionally, supported Labor.
That is causing senior people, in the Labor movement, to ask whether their party’s policy of falling into line with the Libs, on border protection, isn’t producing an unintended consequence.
That is setting up the Greens, as a third force, in Australian politics.
Couldn’t Australia do better by looking for something better in the – admittedly complex – field of refugee management?.
As some of our closest neighbours are already doing.
Then, of course, there’s the economy.
With growth slow – and the Reserve Bank assuring us that it is likely to remain so – over the politically critical period ahead – this is an area in which Labor should be able – at least – to make a real fight of it.
While it is true, at least, that the Abbott government’s second budget isn’t as bad as the first, in the public mind, that is not – necessarily – saying all that much.
The most detailed analysis of the latest budget, so far, is undoubtedly that produced by the Australian Council of Social Service.
It has not added to the euphoria, that has greeted Joe Hockey’s second budget, so far.
Quite the opposite.
As the Australians Greens Senator Rachel Siewert, says:”analysis by ACOSS shows that Mr Hockey’s two budgets rip an estimated $15 billion from low and middle income households over four years.
“This entrenches the Abbott Government’s vicious agenda to pursue our most vulnerable rather than the big end of town.
“Mr Hockey should be ashamed of this figure, especially considering his by-line urging all Australians to ‘have a go’.
“Each day this Government pursues these measures they further disadvantage those in need.
“The Abbott Government’s pursuit of vulnerable Australians is intensified by his failure in the budget to address the inadequacy of income support payments such as Newstart.
“People will continue to slip further behind and vital services that would have provided support have been cut.
“We know that the Government is harsh and paternalistic when attempting to balance the nation’s purse, but they will find it difficult to push harsh measures that pick on our most vulnerable through the Senate.
“I urge the Government to move away from severe measures that hurt our most vulnerable.
“This includes keeping people under 25 off income support for a month, offering a ‘families package’ at the expense of cuts to Family Tax Benefit Part B, and no increase to the Newstart Allowance.
“We are a caring society and can do better,” Senator Siewert said.
ACOSS is not a natural friend of the government.
But analysis, like this, carries weight.
That is still not clear.
*An earlier version of this story had the name as Lionel, not Chris Bowen. My mistake
by Alan Thornhill
Can we clear that congestion on our roads?
And what is the best way to do it?
The Prime Minister, Tony Abbott, has welcomed the release of a report today, that attempts to answer those questions.
The First National Audit on Infrastructure confirms that the congestion we see every day is not just annoying.
It is also expensive.
Indeed Mr Abbott notes:” ….road congestion in Australia is currently costing some $13.7 billion per year.
And he adds:”If we don’t take action, the cost will be $53 billion a year by 2031.”
So what is happening?
The Prime Minister says:” The Government has already taken significant steps to address our nation’s infrastructure backlog, after years of under-funding by previous governments.
“Last year, the Commonwealth Government embarked upon the biggest infrastructure investment programme in our nation’s history, with a $50 billion infrastructure package that is improving road and rail links in every state.
“Investing in the right infrastructure will support Australia’s economic growth and unlock our economic potential.”
And he added: “Our Asset Recycling Initiative is freeing up states to invest in a range of productive infrastructure.”
Mr Abbott also made a plea for co-operation.
“All levels of government need to work with the private sector to build more and plan to deliver innovative congestion-busting projects that eliminate traffic gridlock and transform our cities,” he said.
“The Commonwealth Government has delivered on our election commitment to rebuild Infrastructure Australia into a more robust and independent authority to facilitate smarter infrastructure investment and delivery by governments and the private sector.
“Later this year, we will release Infrastructure Australia’s 15 year plan which will outline our infrastructure priorities to ensure we build a stronger and more prosperous future.
“The Commonwealth invites the states and territories to support the development of this 15 year plan, because Australians want governments to work together to make their lives and their transport systems better,” Mr Abbott said.
A copy of the audit is available at:http://www.infrastructureaustralia.gov.au/
by Alan Thornhill
The Federal government will not hold an inquiry into Australia’s iron ore industry, even though the Prime Minister was talking about doing so last week.
The Treasurer, Joe Hockey, made the announcement, in a two sentence statement overnight.
He said:” Over recent days, there has been some speculation about whether a parliamentary inquiry into the iron ore sector was necessary.
“After discussing the issue with regulatory bodies and stakeholders across the resources sector, the Government will not be initiating an inquiry at this time,” Mr Hockey said.
Pressure for an inquiry started with complaints by smaller miners that bigger ones were deliberately ramping up production, to swamp the market, and force them out of business.
Fortescue boss, Twiggy Forrest, led the campaign.
The Opposition Leader, Bill Shorten, has described the government’s indecision, over recent days, as a debacle.
“There is no doubt the Prime Minister’s actions and those of his Ministers have damaged the industry,” he said.
“This has been a debacle entirely of the Government’s own making.
“It has taken too long for the Prime Minister to admit he got this wrong,
” Mr Shorten said.
by Alan Thornhill
Australians bought 95,288 new motor vehicles in April on trend figures the Bureau of Statistics published today.
This was a rise of 0.5 per cent for the month, to a level 3 per cent higher than that of the same month last year.
The Bureau said that sales – on this measure – set a new record for April.
Sports utility vehicles were particularly popular.
The Bureau said SUV sales rose by 1.9 per cent in April, on trend estimates.
Sales of passenger vehicles fell by 0.4 per cent last month and sales of other vehicles rose by 0.1 per cent.
On trend figures, new vehicle sales rose in all Australian States and Territories last month, except Western Australia, where they fell.
by Alan Thornhill
Wage growth in Australia has hit its lowest level in almost 17 years.
This is reflected in figures the Australian Bureau of Statistics published today.
These show wage growth of 0.5 per cent in the March quarter and just 2.3 per cent in the 12 months to the end of March.
The Bureau said this annual growth was the lowest seen in this series, which began in the September quarter of 1998.
Public sector wages grew by 2.4 per cent over the past year, while private sector wages rose by 2.2 per cent.
by Alan Thornhill
Federal budgets are always eagerly awaited events.
And this year’s, which the Treasurer, Joe Hockey, will bring into Parliament tonight, is no exception.
But there is one important difference this time.
Interested parties usually wait until the budget is delivered before they comment on it.
But not now.
Kate Carnell, of the Australian Chamber of Commerce and Industry, for example, has already welcomed “the government’s focus on small business in tonight’s budget.”
Ms Carnell, clearly, expects the government to live up to its pre-budget talk of tax relief for Australia’s enterprising small business men and women.
On the other side of the social fence, the peak welfare organisation, the Australian Council of Social Service, has also welcomed the government’s $350 billion child care package, meant to help mothers re-enter the nation’s paid work force.
Even though ACOSS did describe the package as “unbalanced.”
Perhaps the nation’s spooks will come out as well, to publicly thank the government for the extra $450 million they will get, to tackle “death cult” recruiting, on social networks.
We haven’t heard a lot, though, from the 30 big international companies, that Mr Hockey believes have been minimising their tax payments in Australia, through complex profit shifting arrangements.
Perhaps they have been too busy, searching for the Tax Office moles in their ranks, who have dobbed them in.
Overseas companies selling digital products and services into Australia have also been silent, on Mr Hockey’s threat to make them collect GST, on their sales into Australia, as their locally based competitors already do.
Overall, though, early responses to the still unseen budget, though mixed, have been fairly favourable.
That might be because the government has been more active than usual, in stage managing the traditional pre-budget leaks.
Especially in letting us look at what it believes are the good bits, first.
Perhaps that’s how a “dull” budget is made to look exciting.
With a slow strip tease act, over several days.
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by Alan Thornhill
So Joe won’t be sacked.
The Prime Minister is adamant about that.
Tony Abbott declared, in a radio interview last week, that Joe Hockey will still be Treasurer, up to the time of the next election.
What Mr Abbott did not say, though, is that Mr Hockey will be relieved of a key duty.
The Social Services Minister, Scott Morrison, is to be top salesman, for Tuesday night’s budget.
This decision, by a Prime Minister who once, famously, declared that “no one – “however smart, however well-educated, however experienced … is the suppository of all wisdom” is a clear slap down for the Treasurer.
After all, Mr Hockey has still not convinced Australians, at large, that his first budget, last year, was what Australia needed.
So why let him loose, on the public, again?
But the show must go on.
And Mr Morrison, is to be the star.
Still, all this is very strange.
Let’s lift the curtains a little, to see what is happening.
Mr Hockey’s first budget, last year, was based on a false, but powerful analogy.
That is a comparison between family finances and the national budget.
His message was, apparently, simple.
Paraphrased, it goes something like this.
“We all know if we spend too much, we will get into trouble.
“Labor spent too much and now we have to clean up the mess.
“So we have to cut back on our spending.
“Austerity is necessary.”
Many find that message is hard to accept, from a comfortably proportioned man, who likes his cigars.
But is it well based?
If it was, Australia would certainly have lost the high international credit rating, that it won under Labor.
But it hasn’t.
In fact in a world flushed with money, that isn’t all that sure about where it should go, Australia is still has its high spot among the world’s safest places to invest.
Could Keynes have been right, after all?
John Maynard Keynes, the greatest economist of them all, declared during the Great Depression of the 1930s, that governments could – and should – spend a little more to get economies moving, when thing are slow.
As they are again now, though not as slow as they were back then.
The Reserve Bank confirmed that, last week, in its latest statement on monetary policy.
It declared then that Australia’s economic growth is not only below trend, but likely to stay that way for longer than even it had expected, as recently as February.
The bank’s recognition of this grim situation was – undoubtedly – behind its decisions to cut official interest rates, to a new low of just 2 per cent.
In making these decisions – in February and May – the bank defied the risk that its cuts might simply stoke the Sydney home price boom.
That has seen home prices in the Harbour City soar by an average 14.5 per cent over the past year and leap by as much as 42 per cent in some suburbs.
But the bank knows – as well as anyone – that rate cuts – alone – won’t restore economic growth.
With both investment – and consumer spending – still low – a little pump priming will be necessary to restore both economic growth – and government finances – to robust health.
That should start with Tuesday night’s budget.
But Joe Hockey, the man – and his austere message – are now so closely associated, that they can’t be separated in the public mind.
That’s why Scott Morrison got the role.
Our Scott is, undoubtedly, a tough man.
One who gets things done.
The man who “stopped the boats.”
But none of that will matter, if Tony doesn’t realise that his pre-budget dance is, essentially, a two-step.
If he doesn’t also ease back on the austerity – and allow a little pump priming ahead, Australians will see grim times, of low growth and rising unemployment, extending well into their futures.
That is not an ideal picture, for a government facing an election in less than 18 months.
The remedies, required now, go well beyond a switching the leading man, in its Budget sales play.
by Alan Thornhill
The Reserve Bank today delivered a sharp reality check on the state of the Australian economy.
It admitted that slow growth is likely to persist for longer than even it had expected as recently as February.
In its Statement on Monetary policy today, the bank also admitted that it has seen no sign of an early return to the extra-ordinary levels of growth in China, which really kept the Australian economy buzzing over recent years.
The good news, in its analysis, if there is any, is that Australia’s interest rates are likely to remain low, for some time yet.
But the bank is offering little – if any – reason to hope that it might cut its marker rate below the record low – of just 2 per cent – that it hit last week.
And it warns that Australia’s unemployment rate is likely to keep on rising, while ever economic growth is below trend.
So what does all this mean to you?
That depends, very much, on your circumstances.
If you are lucky enough to be an adult with a secure, full-time job, things might work out well for you.
But not, necessarily, for your son or daughter, who wants to get a job, later this year..
Economic growth of some 4 per cent is needed to absorb each year’s school-leavers into the nation’s work-force.
And, if the Reserve Bank is right, that just isn’t in sight.
Australia’s shopkeepers face more tough times, too.
The bank says wage growth is likely to be subdued, over the next year or so.
That, combined with rising insecurity – overall – in Australia’s job market – is not likely to a great deal for consumer confidence, either.
And that has already been – conspicuously – lacking over recent months.
But there’s always a bright side, for those prepared to dig deeply enough to find it.
And the Reserve Bank certainly was.
It noted that the subdued wage growth – that we are likely to see over the next year or so – could well make Australia “more competitive” in world markets.
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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