The god of long reports makes sure no one reads them. Having released its 600-page draft report on competition in the Australian financial system, the Productivity Commission would do well to keep the candles at that god’s shrine burning
The god of long reports makes sure no one reads them. Having released its 600-page draft report on competition in the Australian financial system, the Productivity Commission would do well to keep the candles at that god’s shrine burning
With Australians settling back into work after the summer break, last week’s release of the latest estimates of productivity growth suggests we are still struggling to increase the efficiency with which we use the nation’s resources.
With Donald Trump’s first year as 45th President of the United States drawing to a close, America’s economy is growing strongly, the unemployment rate is at an 18-year low (and that for black Americans is lower than at any time since data began to be collected in 1972), consumer and business confidence are high, and the stockmarket has reached new peaks.
With the politics of envy in full swing, it is worth remembering that the millions who came to these shores since the First Fleet arrived 230 years ago were driven not by the prospect of living at other people’s expense but by the aspiration to forge a better life for themselves and their children.
Arriving in Australia many decades ago, the first thing I learned was that real Australians never complain. In this country, outrageous fortune seemed to be wasting her time: the cruellest slings and arrows were met with a stoicism that made Seneca look like a whingeing Pom.
Paul Keating’s attack on Robert Menzies is merely the latest episode in the politicisation of Australian history. Lost in that attack, which seeks to portray Menzies as an appeaser who would have left Australia undefended in World War II, is even the slightest pretence of historical accuracy.
Not long ago, Andrew Leigh, the opposition assistant Treasury spokesman and spokesman on competition, told us that “Australia’s markets are more concentrated than those in comparable countries” — and, brace yourself, “the problem is getting worse”.
When the voters of Bennelong turfed John Howard out exactly 10 years ago, “Kevin 07” seemed to offer a fresh alternative to a government that was scarred and wearied after four terms in office.
Dual citizenship: this parliament of ‘foreigners’ is listing
As braces of bloodhounds scour Parliament House for dual nationals, section 44(i) of the Constitution has crippled the government and, depending on the outcome in the seat of Bennelong, may make Bill Shorten prime minister.
In an age where the default approach is for people to yell at each other, Leith van Onselen prefers to bellow, as he did last week on the Macrobusiness blog with me as the target (https://www.macrobusiness.com.au/2017/11/henry-ergas-jukes-stats-falling-workers-share-2/). I don’t know van Onselen, but he describes himself as ‘unconventional.’ Never was a truer word said.
Today in The Australian
It is a truth universally acknowledged that we live in a post-truth age.
That Sally McManus’s speech on the 110th anniversary of the Harvester decision last week is replete with claims whose only relationship to reality is that they contradict it may therefore be par for the course.
“Lenin lived, Lenin lives, Lenin will live!” proclaimed the banners in the Moscow mausoleum as Lenin’s embalmed body was laid to rest; but 100 years after the storming of the Winter Palace, all that remains of the communist utopia the Bolsheviks promised when they seized power on November 7, 1917, is the dust and ashes of its victims.
If there is a lesson from Australian energy policy, it is that it is far easier to make a fish soup out of an aquarium than vice-versa. But even though Malcolm Turnbull and Josh Frydenberg have not worked a miracle, their National Energy Guarantee could be a first step to reversing the harm caused to what was once a relatively well-functioning electricity market.
Faced with legitimate questions about the future submarine program, Christopher Pyne’s approach has been to mimic the great name-calling scene in Waiting for Godot: “Ceremonious ape!”, “Punctilious pig!”, “Moron!”, “Vermin!”, “Sewer-rat!”, “Curate!”, “Cretin!” — culminating in Estragon’s most devastating of insults to Vladimir: “Crritic!”
The continuing crisis in Catalonia highlights once again the dangers plebiscites pose to social coherence and stability. By reducing complex problems to simple questions, they can exacerbate divisions rather than build agreement, while worsening the tyranny of the majority.
Having won a fourth term, Angela Merkel has secured a place in the pantheon of German chancellors alongside her fellow conservatives Konrad Adenauer and Helmut Kohl. But there is no denying that the coalition she leads of the Christian Democrats and the Christian Social Union has emerged battered and bruised from last Sunday’s election.
Tomorrow “Jacindamania” could propel Jacinda Ardern, the New Zealand Labour Party’s 37-year-old leader, into the prime ministership. No doubt local factors will play a role: having been in government almost a decade, the National Party, despite a solid record, has struggled to convince voters it has much to offer.
Australian citizenship is qualification enough to serve in parliament
If so many parliamentarians risk being disqualified under section 44(1) of the Constitution, it is because parliament’s composition broadly reflects that of Australian society. With 49 per cent of Australia’s population either born overseas or having a parent who was, dual nationality, or at least the entitlement to dual nationality, has become widespread.
The problem with the National Broadband Network was always very simple. The project’s goals were worthy: to provide a new, albeit extremely costly, high-speed network, earn a reasonable return on taxpayers’ investment and charge readily affordable prices.
When Bill Shorten says “tax reform” what he means is the largest peacetime increase in tax rates since federation.
A dogma, Groucho Marx might have said, is a man’s best friend. After all, no one could deny that a fixed set of beliefs can sustain good combat, soothe defeat and simplify hard choices.
It’s those wretched Catholics again. If you believe the press, they are spending substantially less than they should on Catholic schools in low-income areas, while using taxpayer dollars to subsidise the ones that compete with independent schools at the top end. Yet there they go, howling about the new school funding package.
French election: Macron’s huge majority a misleading guide to France
In Britain, voters split on left-right lines; in France, they moved to the centre. Little wonder the commentary has been all over the place, with some pundits claiming the swing to Jeremy Corbyn heralds a revival of the clash between left and right, while others have hailed Emmanuel Macron’s triumph as signalling a move away from the politics of division.
If Macron beats Le Pen, he will still face a divided France
Like all populists, Marine Le Pen, the National Front candidate in France’s presidential election, gives bad answers to good questions. And like so many of their opponents, Emmanuel Macron, her leading rival, would rather avoid those questions altogether.
It is easy to imagine what people thought as they heard the news from London: this will never end. But they will also have thought: this cannot be allowed to continue.
With the US Court of Appeals for the Ninth Circuit decisively rejecting the Trump administration’s application for its executive order on immigration to be reinstated, the question of whether the checks and balances America’s system of government imposes on the new administration will remain effective has moved to the centre of the political debate.
Released just before Australia Day, the British Supreme Court’s decision on Brexit reminds us of a fundamental truth: the British system of government, which was Britain’s greatest gift to its former colonies, rests on the supremacy of parliament.
There was good news this week for Donald Trump, with a poll by Politico finding that the “America First” message of his inaugural address resonated with 65 per cent of Americans. Yet the new President’s bellicose economic nationalism is as dangerous for the US as it is for the world.
“Protection will lead to great prosperity and strength.” With those eight words, placed at the heart of his inaugural address, Donald J. Trump, 45th President of the US, ended America’s long-standing commitment to an open, rules-based, trading system.
There was good news late last year for governments struggling with soaring pension costs: according to a study published in the prestigious journal Nature, it may not be possible to extend the human lifespan beyond the ages already attained by the oldest people on record.
It is a truth universally acknowledged that we now live in a “post-truth” world. But the notion that there was a golden age in which political truth readily triumphed over falsehood is so fanciful as to exemplify the very phenomenon the term “post-truth” describes.
Little wonder Donald Trump swept the rural states: this year’s Christmas Price Index, which calculates the cost of buying the full basket of goods and services specified in The Twelve Days of Christmas, shows America’s milking maids are doing it tough, as are the country’s suppliers of swans, geese and partridges in pear trees.
Last Thursday, when he announced he would not stand for re-election, French President Francois Hollande became merely the latest victim of the year of political head-rolling. Hollande’s fall at the guillotine of politics follows a string of errors and miscalculations that saw his satisfaction rating plummet to barely 4 per cent. But with the National Front fracturing the political equilibrium, it also reflects the difficulties both France’s Socialist Party and its centre-right opponents have had in regaining their hold on the country’s political system.
You can, so to speak, count on the Italians. As opinion polls may not be published in the two weeks leading up to a vote but can still be taken, blog sites have sprung up that report the results in terms of entirely imaginary wagering opportunities, with names that allow readers to readily identify the yes and no sides in tomorrow’s constitutional referendum.
Recommending new taxes should not be done lightly. But while it is full of strong claims, last week’s Grattan Institute report proposing a tax on sugar-sweetened soft drinks ignores relevant evidence and is marred by serious errors of analysis.
Having promised to return manufacturing jobs to the US, Donald Trump’s macroeconomic policies may instead accelerate their demise.
According to a recent poll in the French daily Le Monde, 57 per cent of French voters believe democracy works badly, more than a third would like to see it replaced by an alternative and one in five think that alternative should allow a “chief” to override the present checks and balances.
Having captured the presidency, retained control of both chambers of congress and secured majorities in states the Democrats considered their own, the Republicans have achieved far more than seemed possible six months ago. But this victory’s foundations are far from stable and leave the GOP’s future as uncertain as it has ever been.
Today in The Australian
That this year’s American presidential contest is unusual hardly needs to be said. What remains to be seen is just how far the outcomes diverge from the norm. To help you assess the results, here are five features of American presidential elections worth knowing. Two weeks ago, they were all going Hillary Clinton’s way; that is less clear today.
Set against the turmoil that has racked Australian politics since 2007, John Howard’s masterly series on the Menzies era reminds us of what stability looked like.
When Walt Whitman, writing in 1856, observed that Americans aspire to a “democracy of manners”, he meant that they expect to be treated not only equally but also respectfully. Well, you don’t need to know much about politics to know that Donald Trump’s remarks about groping women don’t meet that standard.
Although it is unlikely to precipitate a broader crisis, the turmoil affecting Deutsche Bank — the biggest bank in Europe’s largest economy — highlights the risks still confronting the global financial system. And as markets struggle with those risks, there are serious questions to be asked about the decisions Australian regulators are taking to ensure the stability of our banking sector.
William McChesney Martin Jr, who chaired the US Federal Reserve in the 1950s and 60s, famously observed that central bankers are the people who take away the punch bowl just as the party is heating up. Nowadays, his successors are the fellows who spike the drinks.
Stephen Conroy’s decision to quit the Senate so as to establish a red underwear business has been hailed by his colleagues.
There is a fundamental defect in the government’s superannuation proposals that has been entirely overlooked. Instead of growing in line with average earnings, the $1.6 million “transfer balance” cap, which limits the amount that can be held in the withdrawal phase, is only indexed to consumer prices.
Finding anything good to say about Labor’s proposed royal commission on banking is a challenge. But no matter how ill-conceived it might be, at least it will eventually fade away.
To Australians, who are regularly told by the Cancer Council not to venture into the sun without being covered from head to toe, the ban on the burkini always seemed far-fetched. We may have to fight the terrorists on the beaches, but only the Gallic mind could believe that replacing liberte, egalite, fraternite by liberte, egalite, nudite would drive the Islamists, repelled by serried ranks of scantily clad women and men in budgie smugglers, into the sea.
As you ponder the census fiasco, take a moment to remember Matthew Gregson, Australia’s first statistician, whose story seems even more relevant today than when I recounted it five years ago. Transported for “feloniously embezzling Bills of Exchange and other Money”, Gregson, on arriving in 1824, promptly found work in the Colonial Secretary’s office, where his skills with numbers were desperately needed to compile the badly overdue Blue Book.
Perhaps the best that can be said for hauling the banks before the House of Representatives’ Standing Committee on Economics is that it is unlikely to do much harm. But rather than being dragged behind Labor’s populism, isn’t it time the government moved to reset the economic agenda?
If Labor has an ethical standard that guides its conduct it is no better than this: hurt your enemies, help your friends. Now, with the government’s refusal to nominate Kevin Rudd as a candidate for secretary-general of the UN, the Coalition risks sinking to its opponent’s level.
The trouble with voters in western Sydney, pollster Mark Textor apparently told the Liberal partyroom when it met last week to consider the election campaign, is their “entrenched cynicism”.
France takes centre stage in the clash of civilisations
When the first anniversary of the storming of the Bastille was celebrated on July 14, 1790 in an elaborate “Feast of the Federation”, the 20-year-old Wordsworth rhapsodised that “Bliss was it in that dawn to be alive, but to be young was very heaven,” while an ageing Kant mused that humanity might finally have “matured”. Two centuries later, at least 10 children and 74 adults lie dead, mowed down as they celebrated Bastille Day on Nice’s iconic Promenade des Anglais.
As Republicans gather in Cleveland, Ohio, for next week’s Grand Old Party convention, a poll from the Pew Research Centre finds that just 38 per cent of Republican and Republican-leaning voters believe the party will “solidly unite” behind Donald Trump. And with Hillary Clinton estimated to have a four to 12 percentage point lead nationwide, it is scarcely surprising the Republican Party remains troubled and divided.
With Australians choosing paralysis at best, chaos at worst, our only answer to the challenges the country faces seems to be the hope that something will turn up.
Britain joined the European Economic Community in the turmoil of the 1970s. As its entry occurred, Australia embarked on the Whitlam experiment, which crippled our ability to adjust to the shocks that hit the world economy and condemned us to two decades of misery.
From the moment it lost office, Labor set itself one and only one fiscal goal: to prevent the Coalition from achieving the surplus Labor had repeatedly promised and repeatedly failed to deliver. Now, as Bill Shorten struggles to develop a credible fiscal strategy, the consequences are coming home to roost.
With Hillary Clinton securing the 2383 delegates needed to clinch her party’s nomination, the race for the Democratic nomination is finally over. Now, after a campaign that saw her move sharply to the left, the challenge Clinton faces is to broaden her base of support in an electorate that is fractured, polarised and distrustful. The question is whether she can do so given the positions she has adopted and the baggage she carries.
First there was the splurge on schools that will more than pay for itself (so long as you don’t mind waiting until your unborn grandchildren reach pension age). Then came the tertiary education spending that will boost GDP by $26 for every dollar spent (so long as the economic return on education rises twentyfold).
If you believe its opponents, the only thing cutting company income tax rates won’t do is cause cholera. Then again, absolute perfection, even in evil, is not of this world. As far as policy proposals go, however, this one apparently comes close, with the critics portraying it as a giveaway whose benefits, if any, are trivially small, long deferred and mainly for the “billionaire class”, while its costs are immediate and material.
This week’s gross domestic product figures, which showed our economy powering ahead, were no accident. Rather, they reflect the hard work Australia’s mining industry has put into cutting costs and boosting productivity.
Here’s a disturbing fact: “Since 2008, the market share of Coles and Woolworths has risen from 60 per cent to 73 per cent.”
Or so Andrew Leigh, Labor’s spokesman on competition, tells us, in proposing yet more regulation.
Let’s start by clearing up the confusion which seems to have clouded even Judith Sloan’s usually razor-sharp insights. The government’s changes to superannuation, whatever one may think of them, are not retroactive: they do not seek to alter the state of the law at a time prior to their announcement.
In theory, putting your jewels in a safe protects them from theft. In practice, thieves know safes are where the jewels are kept. And if the thief has a key, you’re in trouble.
That, in a nutshell, is the story of super. There are, no doubt, many twists in the saga; but all the latest episode confirms is that when they are desperate for cash, governments can be trusted to breach whatever trust we have placed in them.
So it’s Trump. And what a win.
After all, the field was one of the strongest in Republican history, ranging from Jeb Bush, whose family had produced two presidents and who had a solid claim in his own right, through to heavy hitters such as Marco Rubio, John Kasich and Ted Cruz. And the losers were hardly short of cash, consistently outspending Donald Trump in critical contests. Yet the prize has gone to the man who seemed to come out of nowhere.
Did you realise “investors now account for more than half of new loans for housing, up from 29 per cent two decades ago”?
You would if you had read Hot Property, the Grattan Institute’s latest call to scrap negative gearing and increase capital gains taxes. Except that it isn’t true. Indeed, the statistical series the report cites as its source shows 35.8 per cent of new housing loans went to investors in February 2016.
It is easy to understand why Labor wants to increase taxes on higher-income earners. And it does not take much nous to figure out why the government might feel under pressure to do so too. But what does require explaining is how the need to raise taxes in next month’s budget has become an unchallenged part of the conventional wisdom.
In an age of inclusivity, the least one can ask is to be included. Or so the University of Sydney Student Union — which has threatened to deregister the university’s evangelical union unless it drops the requirement that members be evangelical Christians — seems to believe.
COAG: more pressure needed to force reforms to tax regime
The premiers had a choice. They could simply demand more money, knowing that, with an election looming, Malcolm Turnbull would be hard pressed to refuse; or they could take responsibility for raising the revenues they claim they need and accept that voters would then hold them to account for the taxes they impose. That they chose as they did is no less disappointing for being utterly predictable.
It is a pity no government has thought to build a tomb of the unknown saver or a cenotaph for fallen superannuants. With the opportunities it offers for iconic memorials gracing our suburbs, a worthier use of public funds would surely be hard to find.
“In a society like ours,” Gore Vidal wrote some years ago, “politics is improvisation”: policies are announced, tactics invented and slogans launched with consequences “no one can foresee and everyone has to live with”. But if Labor’s proposed tax changes prove anything, it is the dangers that involves.
Donald Trump’s march to the Republican nomination took another leap forward this week as his Super Tuesday wins added 237 delegates to the 82 he had already gained. Having secured about 44 per cent of the GOP delegates chosen so far, Trump seems increasingly difficult to beat, heightening the tensions within the Republican Party.
With Labor spending last week denying the obvious about its proposed tax hikes, it was hard not to be reminded of writer Hannah Arendt’s warning, which ought to be emblazoned on every street corner, that “no one has ever counted truthfulness among the political virtues”.
And then there were seven, Agatha Christie might have said. But even with 16 candidates leaving the field since the outset of the primary season, there is still a lot of blood to be spilled before the line-up for the US presidential election is finally determined.
Even for a political party with a pronounced death wish, it seems reckless to propose a clampdown on negative gearing just as an NAB survey shows the housing market slowing and the share of established properties sold to local investors dropping to record lows.
Hearing Donald Trump, Groucho Marx’s comment springs to mind: he may look like an idiot and speak like an idiot, but don’t let that fool you — he really is an idiot. Yet with the Iowa caucus and the New Hampshire primary only days away, Trump’s standing in the polls is similar to that Barack Obama had at this point in 2008, and is stronger than Mitt Romney’s was four years later.
With the world’s stock markets reeling after their worst-ever start to a year, it is important to remember that the adjustments at the heart of the current turmoil are inevitable and desirable. But that doesn’t make them any less dangerous. And as the threats mount, strengthening our economy’s capacity to withstand a global downturn becomes ever more urgent.
China’s leaders may not have a clue as to where they are going, but they seem determined to get there as soon as possible. The question is how much damage will be done to the world economy along the way. With world stockmarkets alternating between precipitous falls and short-lived rallies, commodity prices tumbling and economic growth forecasts slashed, the answer seems to be plenty.
With the Mid-Year Economic and Fiscal Outlook only a sleep away, the Treasurer is facing his baptism of fire. But whatever the political risks involved in acknowledging the seriousness of our fiscal challenge, simply closing one’s eyes and wishing really hard for the deficit to disappear is hardly an option. Rather, while avoiding both alarmism and complacency, Scott Morrison must show the government has a credible strategy for budget repair.
With commodity prices plummeting, the pressures on our resource sector seem certain to intensify. But despite the damage that will inflict on commonwealth revenue, and hence on the forecasts of the budget bottom line in next week’s mid-year economic and fiscal outlook, it would be a serious mistake to write off mining’s contribution to the Australian economy.
Speaking in Brisbane 10 days ago, the Treasurer called for a national conversation about what needs to be done to “ensure our superannuation system can provide higher standards of living for retirees”.
Another week, another call from the Grattan Institute to increase taxes. And yet again it is superannuation in the crosshairs.
After last week’s police raids in Saint-Denis, just outside Paris, and in the Brussels district of Molenbeek, it is only natural for Australians to wonder whether it could happen here.
Barack Obama is right to call Friday’s terrorist attacks in Paris an attack on humanity. But they are first and foremost an Islamist attack on the West. And it is only by destroying radical Islam that we can end the ever-escalating savagery that threatens our cities, our culture and our way of life.
“People died last time you were in charge”, senator Stephen Conroy, mad-eyed as Ahab and trembling with fury, barked at Bill Morrow, the chief executive of NBN Co, when Morrow, at a parliamentary committee late last month, questioned Conroy’s assertions about the company’s performance.
With tough economic choices looming, coming weeks will see the Turnbull government face its first real stress test. For all his weaknesses, Bill Shorten thrives on galvanising the frightened, the resentful and the ill-informed: and even the merest suggestion of any serious tax reform will offer him a feast of opportunities for mischief.
Widely cited claims by the International Monetary Fund that subsidies to fossil fuels amount to a staggering 6.5 per cent of global income have been savaged by David Henderson, former chief economist of the OECD, in a letter to London’s Financial Times published on Friday.