Penny Wong is well-suited for all these roles, alternating between the higher-intensity Peking opera, the low-intensity Kabuki form, and the diplomatic shirtfront. Thus, she said she was disturbed by China’s confronting behaviour in the South China Sea, concerned about China’s human rights abuses and “shocked” by the suspended death sentence meted out to Australian citizen Yang Hengjun for allegedly spying.

Having got that off her chest, she was also pleased that relations between Australia and China had “stabilised” under the Albanese government, enabling the resumption of what diplomats call a high-level foreign and strategic dialogue. That process had fallen into disuse under the more combative and, as it turned out, less constructive approach taken by the previous Australian government.

As for Wang Yi, the Chinese foreign minister provided a relatively enigmatic foil in his public encounters with Australian leaders, including Wong and prime minister Anthony Albanese. In private, he will no doubt have given as good as he got: as a long-serving foreign minister he is no stranger to difficult encounters triggered by China’s  assertiveness.

Wong and Wang won’t have neglected the implications of an extremely unstable global security environment for regional peace and stability. While they may not have dealt directly with a possible return of Donald Trump to the White House, it will have been part of their calculations about what lies ahead.

Offstage we had a staple of Peking opera, with a villain in the shape of Paul Keating, whose meeting with the Chinese foreign minister was portrayed in some excitable media quarters as treason. In a world of high-stakes diplomacy in which one of Beijing’s stocks-in-trade is divide and prevail, the meeting with a former prime minister who is a critic of Australia’s China policy will have served a symbolic purpose.

What was achieved by all this activity?

The answer is straightforward. The Wong–Wang meeting served both countries’ interests. For Australia, it demonstrated that relations with its cornerstone trading partner are in mutually beneficial shape. For China, it suggested Canberra had not moved irredeemably into Washington’s orbit.

The encounter was realpolitik writ large in preparation for a visit to Canberra later this year of Chinese premier Li Qiang. To use a phrase borrowed from Chinese leader Xi Jinping, it had a win–win outcome for the two countries, though not for Australia’s China hawks.

Much of this movement, including an easing of restrictions on Australian exports to China, would have been off limits under Scott Morrison’s government — a time when Australia’s trade minister could not get his counterpart on the telephone.

In the eighteen months since Labor took office, bilateral encounters have occurred monthly at least, and with increasing frequency more recently. Contrast this with the paucity of meetings, invariably restricted to encounters on the sidelines of international gatherings, under Morrison.

Absent from Wong’s remarks about the relationship on this occasion was the bromide that Australia would disagree with China where it must, and agree where it can, or words to that effect. Increasingly, we now have Wong saying that Australian wants a “stable and constructive” relationship with China “in the interests of both countries.”

This might be bad news for those critics of China who have put us on a “red alert,” as a febrile newspaper series in Age and the Sydney Morning Herald described it last year. A “constructive” relationship would seem to be in Australia’s own interests, though it shouldn’t be at the expense of Australia’s treaty arrangements, its national interest or its values — a fact that shouldn’t need to be repeated ad nauseum.

In their quite lengthy talks Wong and Wang will have dwelled no doubt on a trading and people-to-people relationship that has rebounded since the Covid crisis subsided. Goods and services exports to China gained 13 per cent to A$203.5 billion in the 2022–23 financial year, with China accounting for a shade over a quarter of total exports. Service exports to China were up 27 per cent as a result of the return of students and tourists. The country is far and away Australia’s biggest export market.

If there is an impediment from China’s point of view, it is the obstacles facing Chinese enterprises attempting to gain a foothold in Australia’s investment market by the Foreign Investment Review Board. China’s investment stock in Australia stands at just A$44 billion, or 4 per cent of total foreign direct investment. It ranks sixth among foreign investors, far behind the United States, the European Union and Britain.

Among jarring aspects of Wang Yi’s visit, and one that raised questions about China’s willingness to engage more broadly, was the foreign minister’s unwillingness to avail himself of the opportunity to answer questions from the Australian media. Wang and his advisers won’t have overlooked the hostile tenor of some of the reporting ahead of his visit, and the near certainty that this hostility would have permeated an encounter with an Australian media loaded for game.

In all of this, participants in the diplomatic jousting will continue to play their roles for both a domestic and a wider audience. Senator Wong is proving quite good at it. The question, as always, is how much substance is there behind the shadow play. •

The post Shadow play appeared first on Inside Story.

Labor had long endorsed AUKUS, but now a Labor PM was standing beside US president Joe Biden and British prime minister Rishi Sunak to announce how it would be implemented. The political symbolism was sharp; what had previously been endorsed by Labor was now being wholeheartedly embraced.

Soon after, former prime minister Paul Keating appeared at the National Press Club to drop a rhetorical depth charge. He called the Albanese government’s embrace of AUKUS Labor’s “worst international decision” since Billy Hughes tried to introduce conscription. Suddenly the debate opened up, and since then doubts and criticisms of AUKUS — among them my book The Echidna Strategy — have barely let up. As former Foreign Affairs and Trade secretary Peter Varghese put it during Adelaide Writer’s Week in February, the anti-AUKUS argument is now reasonably complex and sophisticated while the pro-AUKUS position rarely rises above platitudes.

In the two-and-a-half years since the deal was announced, we have not once heard — either from the Morrison government or its successor — what the order for eight nuclear-powered submarines is actually designed to achieve. With neither a prime minister nor a senior minister providing any kind of strategic rationale for the deal, the case for AUKUS has not advanced beyond clichés and truisms about “deterrence.” Apart from pacifists, everyone is in favour of deterrence; the debate is solely about how we deter, and on this point the pro-AUKUS side has barely engaged.

Still, for all the strength of AUKUS scepticism, it seems unlikely to have any perceptible impact on government policy. Foremost among the reasons is the fact that major-party support for AUKUS remains steadfast: neither Labor nor the Coalition is likely to move away from AUKUS because they have nothing to gain by doing so.

AUKUS was conceived by a Liberal-led government, and the Liberal Party typically feels that national security is its electoral strong suit. So, barring a major reversal in the practical implementation of AUKUS (more on that in a moment), it is difficult to see what they could gain by revising what they regard as a signature policy initiative. Former prime minister Scott Morrison recently said that history would record AUKUS as the best decision his government made.

Of course, it’s not unprecedented for subsequent leaders to walk away from policy stances championed by their predecessor. But Peter Dutton was defence minister when AUKUS was conceived so he is closely associated with the policy and will stand by it.

Is Labor support for AUKUS more fragile? A heated debate took place at the party’s national conference in September last year, but ultimately a resolution backing the initiative passed with a comfortable majority. Former Labor leader Kim Beazley was moved to describe AUKUS as a “core Labor value,” evoking a sense of grassroots support and deep historical resonance. Beazley called the conference vote “the most significant move in the party since the 1963 Labor Federal Conference,” which dealt with the establishment of the North West Cape naval communications station.

But there is reason to doubt the sincerity of Labor’s conversion. Before AUKUS, no senior Labor figure had ever campaigned for nuclear-powered submarines. Indeed, support for such subs was a fringe position even in the Australian strategic debate. Then, in September 2021, the Morrison government gave the Labor opposition less than a day’s notice before announcing AUKUS. Labor, fearing a khaki election, instantly threw its support behind the initiative.

By any measure, it was a lightning-fast conversion on a huge policy question. And it seemed to be based largely on political calculation rather than deep principle or historical affiliation. Beazley’s “core Labor value” declaration looked like an attempt at what American political strategists call “astroturfing” — political elites creating an artificial semblance of grassroot activity.

But even assuming support for AUKUS inside the Labor caucus is a mile wide and an inch deep, does that matter for the future of the project? Perhaps less than we might think. Major political questions are never decided purely on principle or on the careful weighing of policy alternatives divorced from party-political considerations. Politicians can change their minds, but they change them faster if arguments align with incentives. At present, that’s simply not the case.

Prime Minister Albanese has spoken openly about his plans to entrench Labor in office for several terms to guarantee its reforms can’t be undone (as was the carbon price) by the Liberals. To win successive elections, he and his senior ministers appear to believe that Labor should never give Australian voters reason to doubt its national security credentials. And the cost of providing that reassurance is, for the moment, manageable.

AUKUS spending is not expected to peak for some years. Of a total project cost of between A$268 billion and A$368 billion, the government expects to spend A$58 billion over the next decade, but with less than a quarter of that sum due in the first five years. In budgetary terms, therefore, the decision is easy. Why offer the opposition a stick with which to beat the government at the next election when avoiding that fate costs the government so little?

Labor doesn’t even have an incentive to encourage debate about the deal by having the prime minister or defence minister give a major address. Policy wonks want such a debate, but who gains? What powerful political force would be quieted by a prime ministerial statement? Critics of AUKUS are unlikely to be satisfied; supporters just want to see the project go ahead.

This reflects two things about the structure of Australian politics: first, the number of people who care about defence policy is tiny, and so government doesn’t feel an urgent need to be accountable; second, the number of key decision-makers in defence and foreign policy can be counted on one hand. Unlike in the United States, no alternative base of power exists in the legislature to encourage accountability.

But political incentives change, and this project will rise or fall on its practicalities. Once a steady drip of news reports about cost overruns and program delays begins, internal critics will emerge. (The latest worry concerns the capacity of US shipyards to fill Australia’s order while keeping the US navy itself supplied with new subs.) There are AUKUS sceptics in the parliamentary Labor Party, but scepticism will need to turn to disaffection and resentment. When ministers and parliamentary secretaries see their budgets sliced while AUKUS is fed, internal grumbling may begin.

What else could crack Labor’s AUKUS consensus? The most immediate threat, if he takes office next year, will be Donald Trump. It’s unlikely Trump even knows what AUKUS is right now, but if he’s confronted with its existence he may reel. Australians remember his blistering response when prime minister Malcolm Turnbull described to him a refugee resettlement agreement that his administration had inherited from Barack Obama. It was a testament to Turnbull’s deft handling of the call that the president didn’t renege on what he described as “the worst deal ever.” Goodness knows what he will make of an agreement that makes the US navy smaller so a foreign navy can grow larger.

Presently, Australia is responding to the prospect of a second Trump term in much the same way as America’s other allies — lots of fretting and crossed fingers but precious little policy change. The assumption appears to be that if Trump wins, allies are in for another rough four years before the situation returns to “normal,” much as it did when Biden replaced Trump.

That interpretation requires a good deal of optimism and a peculiar reading of recent history, yet it remains the prevailing view. It is remarkable to recall that Australia proposed AUKUS to the Biden administration just a few months after the 6 January assault on the US Capitol. Our government was evidently so convinced that this outrage, and the president who had provoked it, were aberrant rather than an expression of enduring change that they almost immediately proposed to his successor the most dramatic upgrade to the ANZUS alliance since it was signed in 1951.

While media and political attention is focused on whether AUKUS can be delivered, in the background lurks a strategic question: even if we can get AUKUS done, is it even a good idea? That’s the issue The Echidna Strategy focused on. Australia’s biggest strategic asset is distance — Beijing is closer to Berlin than it is to Sydney — yet the AUKUS submarine project is effectively an attempt to compress that distance when we should be exploiting it. If China ever wants to project military force against Australia, let it traverse the vast oceans that separate us. There is no pressing reason for Australia to project military power to China’s near seas and onto its landmass.

Such arguments have no purchase on either major party right now, but the real job of books like mine is to open the “Overton window” — to make the unthinkable thinkable. When AUKUS begins to sink under the weight of its misdirected ambition, political leaders will look for new ideas. An alternative defence strategy exists that is prudent and affordable, not weighted with ideological baggage from either extreme, and based on realistic assumptions about the future of Chinese and American power in our region. •

The post Spiky questions remain for AUKUS proponents appeared first on Inside Story.

The problem is clear in the latest Closing the Gap annual report, a masterful example of sophisticated political management and bureaucratic obfuscation. This tightly organised combination of new and previous policy commitments, 2023 achievements and key actions for 2024 purports to outline the Commonwealth’s strategic priorities for the next year. But closer analysis reveals deep-seated flaws in policy design, strategic omissions and evasions and a deep-seated lack of ambition, all wrapped in a slick presentation replete with selective case studies, graphics, some useful governance charts and an avalanche of uninformative facts and figures. There is nothing strategic about this document.

The previous government was more inclined to blame the victim, cut funding and pursue punitive policies. It reshaped the Closing the Gap architecture, reconstituting and expanding its targets. Most importantly, it created a new National Agreement on Closing the Gap that directly engaged First Nations in shaping policy while shifting the bulk of political and policy responsibility — and future blame — to the states and territories.

For Labor, the failure of the Voice referendum has exposed a deficient policy framework and diminished its preparedness to pursue substantive reform. In desperation, it has fallen back — holus bolus — on the previous government’s policy architecture.

Despite their tactical and ideological differences, both major parties have used excessively complex bureaucratic processes, extremely low transparency, high-flown promises and the tactical politicisation of specific issues to divert attention from more important underlying issues. Their guiding principles appear to be to deflect, defer and delay.

A fundamental problem with the national agreement is that its policy architecture is extraordinarily over-engineered. It was designed not by a single committee of state, territory and Commonwealth bureaucrats but by negotiations between that committee and a committee of Indigenous representatives. The asymmetric power imbalance inevitably produced an imperfect structure.

It is hard to believe that the government negotiators didn’t see the ramifications of the extraordinarily complex structure that emerged from the negotiations. It created multiple choke points at which multi-party consultation and coordination is required, encouraging a culture of inertia and stasis.

To take just one important example, the agreement identifies nineteen targets and four priority reforms and allocates responsibility for implementation to eight state and territory jurisdictions along with the Commonwealth and the Australian Local Government Association. The Coalition of Indigenous Peaks — which itself has a nascent federal structure in each state and territory — is also ostensibly an equal partner.

No line of sight nor responsibility exists between any one target and any one government or minister: responsibilities and accountability are shared across a highly complex geographical and sectoral matrix involving layers of mainstream and Indigenous-specific programs. National-level data is deficient across all targets and all four priority reforms, at least partly because the targets themselves have been poorly chosen and loosely specified. Most importantly, the targets are not aligned with dedicated investment strategies.

The four priority reforms at the heart of the agreement would best be seen as overarching frameworks. But they have been broken down into arbitrary elements to be measured and reported on, notwithstanding the vagueness of these elements and their poor fit with existing data. Instead of bringing macro-level strategic coherence the four priorities have been converted into arenas of micro-focused navel-gazing.

While the agreement requires each jurisdiction to publish an annual report and develop an on-going implementation plan, the joint council that manages its operation decided some years ago to shift to annual implementation plans, adding a further layer of process. Instead of being a roadmap laying out each jurisdiction’s multi-year pathway to each target, the plans merely recount innumerable actions and funding decisions, most with limited timeframes.

The latest Commonwealth implementation plan lists sixty-five commitments of varying significance; state and territory plans are generally much more complicated. A requirement that jurisdictions explain how they would “close the gap” has been transformed into a requirement to publish a profusion of meaningless facts and intentions to develop plans.

By combining that latest implementation plan with its annual report the Commonwealth has signalled its unwillingness to develop and lay out a longer-term roadmap. Its decision-making is very much at odds with the recent Productivity Commission review of Closing the Gap, which recommends that implementation plans reflect a more strategic approach.

Any serious attempt to lay out such a roadmap would involve two elements that are seemingly anathema to the Australian government. First, the Commonwealth would need to establish a framework to coordinate the disparate and largely inadequate efforts of the states and territories. This is a glaring hole in Closing the Gap’s architecture and desperately needs attention not just from the Indigenous Australians minister but also from the treasurer, the finance minister and the prime minister.

Notwithstanding its potential to give First Nations people access to policymaking, the national agreement has formalised a regression across the federation towards the inertia last experienced before 1967. Labor would face few insurmountable obstacles if it resolved to reverse direction and effectively coordinate government efforts to deal with Indigenous disadvantage across the federation. A failure to do so will risk Closing the Gap imploding under its own weight.

The second element of a realistic and effective roadmap would be an estimate of the size of the multi-year investments required. This would facilitate better decision-making, assist in placing the myriad demands on governments in perspective and assess the financial costs — the imputed shortfalls in funding, in other words — that First Nations Australians continue to bear.

Unfortunately the Commonwealth’s latest implementation plan appears designed to preclude even modest reforms like these.

Many other questions and issues aren’t dealt with in the Commonwealth’s plan. There’s space here to look at just two of them.

The Community Development Program provides income support and job search for around 40,000 participants in remote Australia. This year’s Closing the Gap annual report lists a total 1950 new jobs employment placements/jobs created under CDP. Even so, the prime minister announced that the government was “moving on” from the “failed Community Development Program” and establishing a Remote Jobs and Economic Development Program to help community organisations create 3000 jobs over three years in remote areas, at a cost of $707 million. This funding for real jobs in regions where employment opportunities are scarce or non-existent is welcome and long overdue. Unfortunately, it is pathetically unambitious. And what is the future for the 37,000 CDP participants? Will they continue in a “failed” program?

A second example: the report lists ninety-eight actions from last year’s implementation plan and reports on their status. Most are mere process matters. Nine are listed as delayed; one as “stopped.” The latter is target 9b, relating to remote essential services infrastructure (though that’s not spelt out in the report). The target, which was approved by ministers in August 2022, states:

By 2031, all Aboriginal and Torres Strait Islander households:

• within discrete Aboriginal and Torres Strait Islander communities receive essential services that meet or exceed the relevant jurisdictional standard

• in or near to a town receive essential services that meet or exceed the same standard as applies generally within the town…

Last year the Commonwealth declared that “delivering on Target 9b will provide vital infrastructure to support liveable, safe, sustainable and healthy communities for all First Nations peoples… The initial focus for the target will be on the development of a new Community Infrastructure Implementation Plan, in collaboration with the National Aboriginal Community Controlled Health Organisation (NACCHO) and key stakeholders.”

Why then, without explanation, has work on the implementation plan for “vital infrastructure” been stopped? Perhaps the Commonwealth fears a remote infrastructure implementation plan would encourage the states to demand increased Commonwealth funding. So much for mobilising all avenues and opportunities to overcome the entrenched inequality faced by too many Aboriginal and Torres Strait Islander people.

All in all, the latest Closing the Gap report makes for depressing reading. It comes across as a convoluted box-ticking exercise, overflowing with plans, partnership committees, good news stories and the like. It makes no serious attempt to look behind the available data to acknowledge and reflect on the challenges of those families caught up in extreme poverty, cycles of alcohol-and drug-induced despair, youth suicides, and the trauma of extraordinary rates of incarceration and unfathomable out-of-home-care rates for Indigenous children.

The report’s implicit agenda is to defer committing financial resources, and delay making difficult decisions. Sure, governments can’t solve all the nation’s problems, but it is inexcusable that, where governments do invest, resources don’t flow equitably.

The Closing the Gap process is perhaps the most useful way to bring these problems to the nation’s attention. Its success will require vision, political commitment and a preparedness to think through the policy issues and make decisions commensurate with the size and severity of the challenges. The Albanese government, like the government before it, has so far failed on all counts.

In his 1963 “Letter from Birmingham Jail,” Martin Luther King Jr. famously wrote that “justice too long delayed is justice denied.” It is time the government commissioned an independent strategic review of the Indigenous policy domain, akin to the recent 2023 Defence Strategic Review, aimed at bringing a much greater degree of discipline, rigour and, most importantly, urgency to a worsening crisis blighting the life opportunities of many tens of thousands of First Nations citizens.

The fact that the depth and severity of this crisis is largely invisible to most Australians increases the responsibility on governments to act; it is not an excuse or rationale for inaction. •

The post Gap years appeared first on Inside Story.

If you live in Frankston and you’ve got a problem with Victorian women being assaulted by foreign criminals, vote against Labor.

If you do not want to see Australian women being assaulted by foreign criminals, vote against Labor.

Send Labor a message.

— Sussan Ley (@sussanley) February 29, 2024

Having happened to watch question time that day, I can attest that she (or her staffer) was fully on song with the opposition’s chief theme: that Melburnian women should be terrified of being assaulted by convicted sex offenders — foreign (ie. dark-skinned) ones to boot — released into the community by the Albanese government.

It’s a very Peter Duttonesque message, but he and his team usually deliver it with more subtlety — it sticks better if recipients have to join a few dots — and, crucially, with deniability. By blundering in with the quiet bits out loud, Ley made it more obvious, if not necessarily more objectionable.

It’s all part of the Dunkley frenzy, of course. As with all federal by-elections seen as contestable between the major parties, this one, caused by the death of Labor MP Peta Murphy, has gone from being cast as a useful indicator of how the parties are “travelling” to something incredibly important in its own right: massive tests for the prime minister and opposition leader.

Whenever I write about a by-election I devote some words to explaining why these events are useless predictors of anything and why they only matter because the political bubble believes they do. Readers familiar with these observations can skip the next few pars.

There are two main reasons. The first is that the sample, while huge, is neither random nor scientifically weighted. It’s just one electorate. At the 2022 general election a national 3.7 percentage point swing comprised a spread of 151 seat swings, from 14.2 points to Labor in Pearce (Western Australia) to 7.2 points to the Liberals in Calwell (Victoria). (The 8.3 points to the Lib in Fowler (New South Wales) was bigger, but that was an independent–Labor contest and the two-party-preferred figure comes from an Electoral Commission recount for purely academic purposes.)

So even at a general election, one seat’s swing will rarely approximate the national one.

But perhaps more importantly, by-elections (except in the rarest of cases) are not about who will form government. It’s true that a proportion of the electorate — probably still a majority, but a shrinking one — will always vote for a particular major party out of loyalty, but for the rest the triviality of the contest liberates them to act on other impulses. “Sending a message” is tried and tested (see tweet above).

Candidates also make more of a difference at by-elections. So might the weather. Low turnout is a feature of this genre, worth potentially a couple of percentage points one way or the other.

Still, by-elections do end up being important, precisely because the political class believes they are. They can influence the future, particularly leaders’ job security, but only because of how they’re interpreted. (Would we have ever seen a Bob Hawke prime ministership if Liberal Phillip Lynch had not resigned in Flinders in 1982?)

The magic number here is the margin: 6.27233 per cent to be precise. A swing to the opposition above that figure would shake parliament’s walls, generate shock and awe in the press gallery and even, perhaps, send Labor’s leadership hares out for a trot. After the Voice “debacle,” Anthony Albanese fails another electoral test!

A swing to the government would similarly damage Peter Dutton, rendering his chances of surviving until the next election worse than they are now. And anything in between will be energetically spun by both sides and their media cheersquads.

So what can we say about Dunkley? Antony Green’s page is up, and I’ve followed his lead when calculating average swings by restricting the time period to 1983 onwards. But I’ve also excluded by-elections caused by section 44 of the Constitution — of which we had a slew around six years ago — because in all of them (or at least those with identifiable with two-party-preferred swings) the disqualified MPs ran again. These deserve their own category given that the absence of the personal votes of sitting MPs is the big driver of the difference between swings in opposition-held seats and government-held seats.

That leaves twenty-three by-elections in the past forty-one years with two-party-preferred swings. In the ten opposition-held seats (including Aston and the low-profile Fadden last year) the average swing was an almost negligible 0.8 points to the opposition.

Those caused by resignations by government MPs (eleven in total, the most recent in Groom in 2020) average to a much bigger number, 7.6 points to the opposition. And when they’re brought on by the death of a government MP — it’s a tiny sample of two (Aston 2001 and Canning 2015) — the swing is 5.5 points to the opposition. If we include that pair with the resignations we get 7.2 points to the opposition from thirteen events.

(There were no opposition by-elections caused by death with two-party-preferred swings in that period.)

So you might want to use that 5.5, which would see Labor retain the seat, or 7.2, which wouldn’t. Or you could slot in any other number, because another feature of by-elections is that they’re unpredictable.

The graph below shows Labor two-party-preferred votes in Dunkley since 1984. To adjust for redistributions, notional swings are subtracted from results going backwards. The blue dots show the actual vote at each election; the fact that so many are below the orange line reflects a 2018 redistribution that favoured Labor by an estimated (by the AEC) 2.5 points after preferences.

The big gap between the orange and red lines from 1998 to 2013 (particularly from 2001) is largely because of the big personal vote built up by the energetic Liberal Bruce Billson, first elected in 1996. He ended up in Tony Abbott’s shadow cabinet and then in cabinet; he was subsequently dropped by new prime minister Malcolm Turnbull in 2015 and retired at the 2016 election. See the dramatic narrowing between red and orange at that election with the absence of his name on the ballot.

Dunkley was retained by the Liberals’ Chris Crewther, but the aforementioned redistribution saw the electorate going into the 2019 poll as notionally Labor. In that year Victoria was the only state to swing to the opposition, and Murphy (who had also contested in 2016) took Dunkley (or retained it vis-à-vis its notional position) with a swing slightly above the state average. If Crewther generated a sophomore surge in that single term, it was counteracted by other factors, perhaps including the Labor candidate and campaign. Murphy seems to have enjoyed a surge in 2022, registering a swing well above the state average. Which takes us to where we are now, and that margin of 6.3 points.

Note that the orange line is above 50 per cent in 1998, 2010 and 2016. All else being equal, this suggests Labor would have won on the current boundaries in those years. All else ain’t equal, and the assumption gets more questionable the further back we go because of demographic changes and compounding errors in those post-redistribution estimates of notional margins. (Notional margins are rather hit and miss. For one thing they can’t take into account postal votes; for another they ignore personal votes in booths from neighbouring electorates.)

But it is reasonable to believe that Dunkley, as it is defined today, would probably have been won by Labor in 2010 and 2016. So although Dunkley was long held by the Liberal Party it’s not really accurate to call it a natural Liberal seat.

Other factors?

Federal electorates tend to be pulled by state tides. One element is the standing of those second-tier governments, and while Victoria’s Labor government under new premier Jacinta Allan is still ahead in opinion polls, the leads are more modest than under Dan Andrews. Put less clinically, Andrews was an accomplished communicator, including on behalf his federal counterparts, and he is gone.

Working the other way, Victorian Liberal leader John Pesutto still seems as pitiably bogged down by his party’s right wing as he was eleven months ago during Aston.

Then there’s the personal vote. On the evidence, which isn’t substantial, Murphy had a good one. (The bigger her personal vote, the worse for Labor’s chances on 2 March.)

The Liberal candidate is the Frankston mayor Nathan Conroy, who should bring a ready-made personal vote in parts of the electorate. Labor’s Jodie Belyea has long been involved in the local community but from reports lacks his profile. As noted above, attitudes to candidates can matter a lot at by-elections.

Conroy drew the top ballot spot and Belyea the bottom. That’s got to be worth a point or two for the Liberal overall.

Dutton is reported to be spinning “that a swing of between 3 per cent and 5 per cent would be a respectable outcome,” which suggests his party is expecting something bigger. YouGov, with a small sample, puts the Liberals on 51 per cent after preferences (about a 7 point swing). Polling before by-elections, including surveys conducted by the parties, is notoriously rubbery.

Anything can happen at by-elections, but if forced to choose I would tip a Liberal victory. If that does eventuate, the media frenzy about Labor’s leadership, including whispers from unnamed party sources, will not be for the faint-hearted.

December’s “one-term government” sightings will certainly make a comeback. •

Further reading, in alphabetical order

• ABC’s aforementioned Antony Green
• Kevin Bonham
• Pollbludger (William Bowe)
• Tallyroom (Ben Raue)

The post Dunkley’s Rorschach test appeared first on Inside Story.

January’s rejigged Stage 3 tax cuts announcement — warmly received in voterland, it seems, and made an ostentatious meal of by the opposition — has turned a new page. Now the political class has all but unanimously declared the return of the prime minister’s mojo. Albanese is in control again, looking and acting confident. But the Dunkley by-election on 2 March could change all that, of course, potentially dramatically.

So what’s the point of these incessant, whiplash-inducing analyses of how the parties and leaders are “travelling”? At core they must be about the next election; they can have no purpose otherwise. But once we’ve voted, this term of government will be viewed through the lens of the 2025 result and all today’s twists and turns will be forgotten. The caravan will move on to how the next election is shaping up.

One popular school of thought sees the media’s incessant horse-race adjudications as self-fulfilling. It is in a party’s interests to be described as being on track for electoral victory because the happy vibes will help it get there. With apologies to Sting, I don’t subscribe to this point of view. The narrative certainly influences reality, even around the edges of opinion poll results, but its effects on elections are usually minor and unpredictable.

The idea matters a lot to politicians and their staffers, though, partly because many of their jobs are dedicated to generating good reviews and partly because those reviews can ultimately affect their professional survival.

Peter Dutton, who was always facing a battle to remain Liberal leader for the full term, went into the summer break looking rather happy, but now he’s biting his nails about Dunkley. Albanese, who as prime minister enjoys more institutional fortification, would be harder to shift in the event of a bad result, but government MPs and staffers still imbibe the commentary. No leader enjoys forlorn troops and nervous backbenchers.

Judgements about how the participants are travelling are largely driven by opinion polls — and most of all, far ahead of the others, by Newspoll in the Australian. The tendency reached a nadir of sorts back in 2015 when Malcolm Turnbull talked about Tony Abbott “losing” all those Newspolls. (Albanese borrowed that formulation on the ABC’s 7.30 this month to point out his government has never “lost” one.)

The first Newspoll of 2024, in early February, found 62 per cent believed the government “did the right thing” by rejigging the tax cuts, with just 29 per cent saying they “should have kept their promise and implemented the tax cuts without changing them.”

Voting intentions and personal ratings were virtually identical to Newspoll’s final 2023 survey, which is widely seen as evidence the government didn’t “take a hit” for breaking that election promise. Along with the problems the decision caused (and will continue to cause) for the opposition right through to the next election, and along with the fact that the government was taking control of its destiny, the figures were enough to make it a “win.”

Just between us, though, Labor was a bit lucky with Newspoll’s phrasing. The fact that the changed policy represented the breaking of an ironclad, repeated promise was hidden in one of the responses, the one very few people nominated.

When another pollster, Redbridge, conducted a big survey at about the same time, it posed several questions about those Stage 3 tax cuts. The first (on page 21) simply asked if the government should stick to its repeated promise not to change them; it received a slight plurality in support of sticking with the cuts designed by the Coalition. The second (page 26) described the reported changes and asked about approval; this time the rejigged policy received large support, rather like that found by Newspoll.

All these pollsters’ questions are valid; the point here is that different wording can produce different headlines. A Newspoll question that resembled Redbridge’s first one would have generated very different perceptions about how the changed policy had been received by punters.

Redbridge also found a decrease in the government’s two-party-preferred support from 52.8 per cent in December to 51.2 per cent in February. Yet despite this “swing” the survey was reported very positively for the government in News Corp tabloids. Perhaps it can be difficult to break from the press gallery consensus.

Note that the prime minister is a bare relic of the figure, a year ago, who could do no wrong. How might voters have reacted if he’d announced these changes back then? He might well have taken that “hit” from those sky-high poll numbers. We’ll never know.

Broken election promises are as old as politics itself. From electors’ point of view Albanese is now just another politician; perhaps he had already become one last year. All prime ministers end up like that. “My word is my bond” is henceforth a punchline, like “Honest John” Howard in a previous era.

Like his predecessors, the prime minister is relying on the allure of incumbency: yes, I’m less than honest at times but I get the job done; I make the hard calls for the nation, and that’s what matters.

He even trotted out, also on 7.30, the sense of “trust” reclaimed by both Howard (in 2004) and Gillard (2012). “Australians,” he told Sarah Ferguson, “can trust me to be prepared to have the strength to take the right decisions that are needed.”

It was an overly long sentence, with spits, starts, lulls and twists, but he got there eventually. Rather like the government’s path to Stage 3 Mark II. •

The post How’s he travelling? appeared first on Inside Story.

Australian citizen Yang Hengjun’s arrest, imprisonment and suspended death sentence for espionage could draw comparison with the case of Francis James, the eccentric publisher of the Sydney church newspaper the Anglican, who Gough Whitlam managed to spring from a Chinese jail in 1973 after convincing Beijing he was a harmless prankster.

But the two cases are quite dissimilar, especially as the comparison doesn’t give Yang credit for his genuine efforts for liberal reform in China.

As recounted by Japan-based ex-diplomat Gregory Clark, who covered the Francis James case for the Australian, James had concocted an entirely fictitious account of travelling to the Chinese nuclear test site at Lop Nor in Xinjiang and sold it to the London Sunday Times in 1969. After he was exposed by Derek Davies of the Far Eastern Economic Review as having skirted around rather than visited China, James invented another preposterous story and then went openly to China in November 1969. He was promptly arrested as a suspected spy.

Why so reckless? Getting arrested was deliberate, Clark conjectured. “Get into China via the Canton Fair, behave suspiciously, get arrested dramatically and mysteriously, and the world will have no choice but to believe that here indeed is a person who could once have roamed the secret nuclear installations of northwest China,” he wrote.

“True, being arrested by the Chinese police in those days was no joke,” Clark went on. “But he has a plan. Because he behaves outrageously and courts arrest, the Chinese will quickly realise he is a harmless eccentric playing games and throw him out of the country. Being expelled from China will add even more to the James legend.”

But things don’t quite work out that way. “The Chinese decide that he is not mad or playing games, that he really is on some secret spy mission. What James thought would be a short-term escapade ends up as incarceration and interrogation for four years. The joke very nearly ends up as a tragedy.”

Yang’s case could very well turn into a tragedy. His death sentence has been suspended for two years on condition he doesn’t re-offend. How he might spy from a prison cell is a mystery, but Chinese security would no doubt find some evidence if it wanted to. And Yang, fifty-eight, has a large lesion on one of his kidneys that could be renal cancer, treatable if operated on in time. In a previous high-profile case, that of detained Nobel Prize winner Liu Xiaobo, Chinese authorities allowed liver cancer to develop beyond hope of treatment.

Despite five years of detention and hundreds of interrogation sessions, China’s Ministry of State Security could only come up with one plausible accusation of espionage. This involves an operation thirty years ago, in 1994–97, when Yang was working for the ministry itself as an undercover officer in Hong Kong as the territory’s handover from Britain to China was approaching. Back then, according to the limited summary of evidence released with the verdict, Yang passed on forty documents containing Chinese secrets to Taiwan’s intelligence service.

But Yang had long told confidants that his superiors in State Security gave him the job of opening contact with Taiwan operatives to help ensure a smooth transition and had been happy with his trading some low-level information to win confidences. So pleased with his performance had his superiors been that they let him go to Washington with his then wife for two years as a visiting fellow at the Atlantic Council, a think tank, while still on the ministry’s books.

The resurrection of the Hong Kong episode suggests that Yang’s interrogators found no evidence of espionage in the decades since, unless it has been withheld. So the arrest must have been for something else. And the answer surely lies in the evolution of Yang’s career as an academic researcher, popular fiction writer and political blogger, and how State Security, as guardian of the Chinese dictatorship, saw his work as a challenge and threat.

Early on, Yang certainly teased the ministry: not something that should be done lightly given it is perhaps the largest intelligence agency in the world, with an estimated 110,000 staff encompassing foreign intelligence, domestic counter-intelligence and increasingly cyber and industrial espionage. It even has its own think tank, the Institute for Contemporary International Relations, to engage with foreign counterparts and release open-source assessments. At its favoured hotel in central Beijing, troublesome figures are invited in for a “cup of tea” as a warning.

Reflecting the ministry’s staid, bureaucratic character, its cadres are supposed to be pillars of communist rectitude. At the insistence of its former political master, premier Zhou Enlai (the leader Whitlam prevailed on to release James), it has forsworn “honey traps” (sexual entrapment) and doesn’t seem to go in for overseas “wet jobs” (assassinations), at least according to John Byron, the pseudonymous co-author of Claws of the Dragon, a book based on the personal papers of Kang Sheng, Mao Zedong’s spy chief and orchestrator of his purges.

Yang tried to liven up that dour image with a trilogy of spy novels published in Hong Kong and Taiwan around 2004–05. According to those who’ve read them, they contain the mix of sex and murder found in spy books about Western intelligence services. The hero, a Chinese named Yang, is a double-agent in a vicious war between the State Security and the CIA. Smuggled copies gained a wide readership in China.

Yang joined the ministry’s elite intake as a brilliant graduate of Shanghai’s Fudan University, one of the country’s best foreign-studies schools. He received the Hong Kong assignment after a posting to the foreign department of Hainan’s provincial government.

But his role ended with his Washington sojourn. In 1999 his then wife, a professional interpreter and translator, gained a skilled migration visa for Australia. Yang emigrated too, as her dependent. The move appears not to have been a “defection.”

In Australia, as well as writing his spy books, Yang plunged back into academic study, supported by his wife, first at the University of New South Wales and then at the University of Technology Sydney, where he gained a PhD in 2007 for a thesis on political messaging on the Chinese internet, then subject to tightening surveillance and blocking.

Research contacts enabled Yang to develop a huge following for his Chinese-language blogs discussing political reform, says his UTS doctoral supervisor, Feng Chongyi. The large following gained him some income but he also relied on hospitality from friends and contacts. At some point his marriage broke up.

Although his spy books had been “too sensitive for China,” Feng tells me, Yang continued to travel in and out of China, by then as an Australian citizen. One awkward moment came on a visit to Guangzhou in 2011, when local police officers detained him. Uprisings were then sweeping the Middle East in the Arab Spring and China’s security apparatus had been told to nip any local buds. With help from Julia Gillard’s government, Feng got Yang released after four days on the condition that his detention was not publicised.

At their peak, says Feng, Yang’s blogs were followed by about a hundred “Yang Groups” in some fifty Chinese cities. But with Xi Jinping’s ascension as Communist Party secretary in October 2012 the atmospherics started changing. Xi methodically purged all rival factions, including the Shanghai faction of former leader Jiang Zemin and the Communist Youth League faction of predecessor Hu Jintao (who was later frogmarched out of the 2022 party congress that gave the green light for Xi’s indefinite rule).

Xi also cracked down on civil society: lawyers, academics, media outlets, non-government organisations. With his blogging career faced with ever-tightening controls, Yang became noticeably more cautious in what his writing and speaking, according to a foreign correspondent he used to meet in Beijing. His high-level party contacts, including former vice-president Zeng Qinghong, a key lieutenant to Jiang Zemin, were themselves on the outer.

Yang had also embarked on a relationship that raised questions among his following. His new wife, Yuan Ruijuan (also known as Yuan Xiaoliang), had been labelled a “patriotic blogger” — or, more disparagingly, a wumao (fifty-cent warrior) for the half-yuan these bloggers were supposedly paid for each post supporting the official line. Her reputation sat uneasily with Yang’s long-time aim of political opening. Some wondered whether Yang had been playing both sides of China’s internal divide.

Nonetheless, Yang was in the sights of State Security. The contacts he had made with Zeng Qinghong, a former vice-premier who had been a key lieutenant of Jiang Zemin, would have been enough to ensure that. “The CCP reforming wing under Zeng embraced globalisation whole-heartedly and pushed for alliance with the West,” says Feng. “Zeng even went so far as to find an exit for the CCP.”

In March 2017 Feng Chongyi was himself detained during a research trip in Guangzhou. Before pressure from Canberra and his university secured his release, Feng says he was questioned intensively about Yang’s activities and connections. “They said: Women hui shoushi ta! We will get rid of him!” Feng recalls.

Feng then helped Yang get a two-year visiting fellowship at New York’s Colombia University, his income to be augmented by informal daigou trading of American luxuries to China. After the fellowship ended in January 2019, Yang and his second wife, heading back to Australia, made the fateful decision to visit relatives on the way. Unlike Francis James, it was not a showdown gesture: Yang must have thought the State Security officers in his intake, by then in senior ranks, would keep a lenient eye on him.

“I told him not to go back to China,” says Feng. “He said, if they want to take me, they would have done it long ago.”

Yang’s arrest may partly have been precautionary, aimed at silencing a potentially influential figure ahead of two big anniversaries coming up in 2019: the centenary of the 4 May 1919 student uprising over the foreign concession ports reaffirmed in the Versailles Treaty, and the thirtieth anniversary of the Tiananmen massacre.

China’s relations with US-aligned nations were already spiralling downwards. A month earlier, Canada had arrested Huawei’s heiress-apparent Meng Wanzhou on a US warrant for breaking sanctions on Iran. In return, two Canadians working in China had been arrested, effectively as hostages. Members of the Five Eyes intelligence group, which includes Australia, were blocking Huawei from their 5G mobile networks on suspicion the technology could be used for Chinese espionage or sabotage. The party and State Security had added to the deteriorating atmosphere with a new intelligence law requiring all Chinese citizens and enterprises to cooperate with intelligence services when asked.

In Australia, Malcolm Turnbull’s government had enacted new laws on foreign influence while Yang was in New York. A month after his detention Canberra blocked the Chinese businessman Huang Xiangmo, a permanent resident, from re-entering Australia because of payments to politicians allegedly to build pro-China sentiment.

Yang was in contact with Australian officials preparing the anti–foreign influence crackdown. In New York he appears to have engaged with Boxun, a US-based website and news aggregator that promotes democracy and human rights and exposes alleged corruption in China. Blocked in China itself, Boxun has been subject to cyber-attacks attributed to Beijing. Its founder, Meicun “Watson” Meng, has strongly defended Yang against his latest charges.

Yang’s harsh sentence has undermined the feeling in Canberra that relations with China, though never expected to be warm, were at least unlikely to deliver more shocks. The hope, no doubt, was that Yang would be released after sentencing for time served.

To Canberra’s China hawks, the sentence suggests that Beijing wants Australians to be a bit afraid. And the court’s two-year good behaviour: did that apply to the Australian government, they wonder, as well as Yang?

But Richard McGregor, the China specialist at Sydney’s Lowy Institute and author of widely praised book, The Party, plays down the idea that Beijing is sending a message to Australia. “It’s less about Australia and more about them,” he tells me. “On the one hand, the MSS [State Security] is likely largely indifferent to the deleterious impact Yang’s verdict will have on relations with Australia. But you could imagine that State Security deliberately demanded the harshest sentence possible as a warning to pro-democracy activists that they are risking their lives.”

For State Security, foreign relations are mere collateral damage. So is economic confidence. After a revised anti-espionage law introduced last July expanded the range of activities that can be considered espionage, raids targeted US-linked consultancy and due-diligence firms.

As the well-informed Hong Kong journalist and academic Wang Xiangwei has pointed out, State Security has gone public with its warnings, launching a WeChat account last August. “Since then, it has boldly asserted itself not only on espionage matters but also on national and international topical issues ranging from China–US relations to economic subjects, including one in which it warned against badmouthing China’s economic growth prospects,” Wang wrote.

Then, late last year, State Security put out posts blasting people who were bearish about China and “badmouthing” China’s economic growth prospects, Wang said. A few weeks later, in late January, it laid out ten conditions — mainly concerning national security, state secrets and anti-espionage law — that could lead to questioning by its agents.

State Security is unlikely to be doing this without Xi’s firm approval. Minister Chen Yixin is a longtime associate of Xi — so close that he is believed to be working on a new chapter of “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era,” the official ideology that ranks Xi with Mao. A “pillar” of state security seems likely to join existing pillars of the economy, diplomacy, military, environment, legal affairs and culture in the official document.

Without a signal from Xi, no one in Beijing is likely to resist the expanded ministry. “In any political system it’s difficult to push back against the internal security service,” says Lowy’s McGregor. “Eventually with wolf-warrior diplomacy there was a top-level political intervention and it largely stopped. So far, the MSS’s role seems very much in line with the direction Xi Jinping has set for the country. The only incentive in China is to exceed what you think the leader wants.”

In the meantime, Anthony Albanese is no Gough Whitlam, and Xi Jinping is no Zhou Enlai, and for the China of 2024, unlike in 1973, the Russians are its second fiddle and the Americans fearful of its rise. The best hope for Yang appears to be an effort to stress his precarious health and, unfairly as it may be, downplaying the seriousness of his challenge to the Party.

The MSS cadres are unlikely to know James Thurber’s 1939 story “The Secret Life of Walter Mitty” or the 1947 Danny Kaye movie, but they might have seen the 2013 remake with Ben Stiller. •

The post Collateral damage appeared first on Inside Story.

As it happens, I don’t think we did ever find a story the Rudd government could tell the Australian people. Nor do I recall hearing anything further about this grand mission afterwards. A year or so later, of course, Rudd was gone and, at the 2010 election, so — almost — was the government itself. Julia Gillard, who led Labor to minority government, called Rudd’s “a good government… losing its way.”

It has recently been hard not to wonder: is Albanese’s going the same way?

In many respects, the comparison is unfair. This Labor government has plainly learnt a great deal from the last and has gone out of its way not to repeat its errors. Many of its ministers were there, in more junior roles, last time. Albanese himself, as a rising figure during that era and leader of the House for almost the entire period before ending up as deputy prime minister, sometimes seemed traumatised by the infighting that more than anything wrecked Labor in government.

The differences matter. Rudd wanted to win the media every day. Albanese often seems more like Malcolm Fraser in his aspiration to keep politics off the front page. Rudd talked a big game in opposition about keeping government accountable but then failed to follow through by calling inquiries into the grand failures and scandals of the Howard era such as the Iraq war and the Australian Wheat Board affair. Albanese’s government, by contrast, has called one inquiry after another, most of them exposing the sheer badness of the Coalition on issues ranging from immigration policy through to robodebt.

Barely six months into the life of his government, Kevin Rudd was being called Captain Chaos by the Australian’s John Lyons. Albanese has gone out of his way to emphasise the careful, orderly and process-driven nature of his government. Albanese probably intends such remarks as a rebuke of Scott Morrison, but they often sound equally applicable to Rudd.

The Albanese government has a right to consider itself a good government, even allowing for the fairly low standards we have so often seen this century in Canberra. It has fulfilled many election promises. It has grappled effectively with key areas of Coalition failure and neglect, including stagnant wages and a shambolic immigration policy. It has responded to the general challenge of rising inflation and the particular one of spiralling energy costs. It has conducted that bewildering range of inquiries — not, seemingly, just to kick a can down the road but with the apparent aim of consulting widely and doing good policy — which gives substance to its commitment to evidence and process.

If good government receives its due reward, you might imagine that this is a government coasting to a comfortable election victory next time round. It is remarkable to consider that Labor won a resounding victory in the Aston by-election as recently as 1 April 2023; at the time, it seemed unassailable.

But politics is rarely so simple, and it tends not to be terribly fair either. Recent opinion polling has been discouraging for the government: Newspoll had the two-party-preferred vote at 50–50 in November, and then Labor at 52 to the Coalition’s 48 just before Christmas. That’s not disastrous — the middle of a term often looks grim for incumbents — but it would have given Labor Party strategists plenty to worry over.

Three issues have figured in the commentary. Almost everyone gives significant weight to the cost of living, which is hitting lower- and middle-income families hard. Pollsters and pundits argue that Labor’s support in the outer suburbs is fragile and it needs to do more to show it is on the side of struggling families. Peter Dutton and the Liberals, meanwhile, see these same voters as their only serious pathway back to government. November’s Victorian state election gave signs that Labor’s vote on Melbourne’s suburban frontiers might be a little more fragile than many assumed at the 2022 federal election. The forthcoming Dunkley by-election will test some of the claims made in recent months.

The second issue was the defeat of the Indigenous Voice to Parliament. Labor championed this cause: it became part of the government’s brand from the moment of Albanese’s victory speech on the evening of 21 May 2022. When, therefore, it went down, it was inevitable that the government’s reputation should go down with it. Governments have not historically been thrown out of office on the back of such a defeat, but failure at a referendum can wrong-foot a government struggling under other pressures — as the defeat of its attempt to ban the Communist Party in 1951 did to a Menzies government grappling with 20 per cent inflation.

Third, there is the Gaza war. The horrors that have occurred in Israeli border communities, in the West Bank and East Jerusalem, and in Gaza will move anyone with a sense of humanity, but the political reality is that they have tended to move different groups of people in rather different ways. Labor’s problem here is that for large parts of the left, the Palestine issue is the defining cause of the age; for them, it divides pretend progressives from real ones.

There are parallels here with the Spanish civil war of 1936–39, which was also a divisive issue for a Labor Party that contained secular leftists and others who supported the Republican government, and Catholic right-wingers who leaned towards Franco and the Nationalist rebels. It was a part of John Curtin’s achievement as federal Labor leader that he was able to steer a course through these turbulent waters, largely by committing his party — then in opposition — to isolationism.

That kind of approach isn’t available to Anthony Albanese and Penny Wong. But they still must steer a course that takes into account Australia’s alliance commitments, its support for the so-called rules-based order and international law, the pressures of the domestic political scene and challenges of electoral politics, and its attachments to basic decency, humanitarianism and justice. The government’s hostility to Hamas is taken for granted everywhere except among the unhinged populist right, whose extremism nonetheless now often finds a platform in parts of the commercial media.

But we can be equally certain that it gives Australia’s Labor government no great pleasure to be seen as too close to the present government of Israel, a regime that is for very sound reasons deeply unpopular in Israel itself as well as among many Australian Jews. There is little doubt that in negotiating these pressures, which it has actually done with fair success, the government has nonetheless at times sounded windy and looked wobbly.

By Christmas, I would not have been alone in wondering if this government was going the way of Rudd’s and Gillard’s amid these pressures. A great part of the difficulty has seemed to me the particular combination of policy wonkery and electoral opportunism that has come to hold too much sway in the Labor Party this century. We all like good, evidence-based policy, and we all like electoral professionalism. Successful political parties need both to get anywhere.

But politics is also an aspect of culture. Otherwise highly intelligent Labor politicians can sometimes appear very naive about such matters. The Rudd and Gillard governments are a case in point: who in the Gillard government, for instance, came up with the idea of appointing a former Liberal Party leader, Brendan Nelson, as director of one of the country’s leading public institutions, the Australian War Memorial — in the lead-up to the centenary of the first world war, of all times? And under this government, which seems to support a new direction for the memorial on the issue of representing frontier warfare, it reappointed to the council a former Liberal prime minister, Tony Abbott. Such statesmanship!

These matters might seem trivial beside the problem of ensuring that millions of Australians can pay for their next power bill. But the political right has fewer illusions — Coalition governments stack boards as if their very existence depended on it. Labor shouldn’t follow that lead, but it should pay much closer attention than it does to the points of intersection between civil society, cultural authority and state power.

The Italian Marxist Antonio Gramsci developed the concept of hegemony to explain how power and culture work in capitalist societies. The “common sense” of the ruling class — coinciding with its interests — comes to be seen as that of society as a whole — the “national interest,” to use some contemporary parlance. Conservatives apply Gramsci’s ideas faithfully in their relentless efforts to dominate culture. Their success in the recent Voice referendum was testament to such efforts. Labor governments imagine that so long as they can get that cost-of-living relief through the parliament next week, winners are grinners. That notion rests on a remarkably shallow understanding of how power operates in a society of any serious complexity.

This is why January has been a good month for the Albanese government. Two things happened almost at the very same time, one in “the economy,” the other in “the culture.” In the economy, it recast the stage three tax cuts to ensure that there was a redistribution of benefits towards low- and middle-income earners. Alan Kohler, so often a devastatingly astute commentator on such matters, was right to point out that this was somewhat of an argument over loose change: the tax system as a whole continues to favour those who are best-off. Yet it was something. Albanese, in a National Press Club speech and elsewhere, has framed the shift as a response to changed circumstances, and especially the cost-of-living crisis. A bolder leader would also have said that social democratic governments support progressive income tax and oppose massive hand-outs to those who already have enough.

At the same time as the upholders of national political integrity were launching philosophical disquisitions about Albanese’s “backflips,” “lies” and “betrayals” — often the same journalists and politicians who met far worse from Scott Morrison with vigorous shrugging or lavish praise — Labor was also attending to the culture. The appointment of Kim Williams as new chair of the ABC suggested a government that has an interest in ensuring that one of the country’s most influential public institutions is led by someone who has not only impeccable professional credentials but also sufficient commitment to public culture, the arts and the goals of excellence, independence and balance to align with values supposedly supported by the government itself.

The government can’t expect an easy run over the second half of its term. Media hostility has been increasingly uncompromising and will be relentless on the issue of tax cuts. The cost-of-living crisis, moreover, doesn’t lend itself to easy solutions.

On broader issues of policy, Labor’s Achilles heel seems to me to be housing. It has acted, but it has not done enough, and the Greens have made this one their own. It is ideally calculated to appeal to anyone under forty, and others too. The Coalition will also continue to pretend it has the solution, which involves allowing people with virtually no superannuation savings to use the little they have for a home deposit. The real estate industry will be delighted.

Labor would be well advised to craft a radical solution to housing in the spirit of the 1945 Commonwealth–State Housing Agreement — one that involves not only bold solutions to private provision but also a renewed emphasis on social housing. Even more than the “backflip” on taxes, a bold, evidence-based, well-costed housing policy could set Labor up for an extended period in office and a genuine opportunity to reinvigorate social democracy in this country. •

The post Gramsci’s message for Anthony Albanese appeared first on Inside Story.

The result of all that consulting has just been summarised in a thirteen-page report that shows respondents want governments to do much more than just “manage” homelessness. They want them to prevent and eliminate it by making sure “all Australians have access to safe and adequate housing.”

The summary identifies twelve principles to guide the plan towards this worthy outcome. The principles are sound, and include recognising housing as a basic human right, ensuring housing is accessible and sustainable, and engaging people who have experienced homelessness in designing programs and services. They also propose a “housing first” approach to homelessness that gives people a home before helping them to deal with challenges like mental illness, addiction and unemployment.

The report lists a few practical suggestions too, including stronger tenants’ rights and inclusionary zoning rules to guarantee new residential developments incorporate social and affordable housing.

Many of its key proposals, though, come down to money: building more social housing where it is most needed, for example, and providing sufficient homelessness services to meet demand.

Such aims can’t be achieved without a much higher level of dedicated, consistent government funding. Indeed, the report includes “secure funding and support” as one of its twelve guiding principles. Yet it offers no guidance as to how the necessary revenue might be raised. This is not because people engaged in the consultations failed to put forward ideas; rather, it’s because the most obvious way to secure funding for housing initiatives is to change the way housing is taxed and that’s something the government doesn’t want to talk about. Right from the start the consultation was framed to bracket out any such discussion.

Two new pieces of research reinforce just how glaring and regrettable this exclusion is.

The Centre for Equitable Housing has drawn together current and historical budget data from across different government portfolios to provide a comprehensive picture of federal housing expenditure over time. It found that tax concessions like negative gearing and the capital gains tax discount are eclipsing expenditure on other housing programs. The combined annual value of these tax breaks is more than ten times the sum Canberra disburses each year to the states and territories to build social housing and tackle homelessness. As a result, 43 per cent of federal government housing support is flowing to the top fifth of income earners, while just 23 per cent goes to the bottom fifth.

The report also found that the numerous but disparate housing-related measures in the federal budget lack clearly articulated objectives. In their absence, negative gearing and the capital gains tax discount operate as “a shadow housing policy” driving up prices by encouraging speculative investment in existing housing stock rather than new construction.

The Everybody’s Home campaign, meanwhile, has calculated that the revenue lost to investor tax breaks over the coming decade could fund 550,000 new homes for low-income households. That would be more than enough to eliminate social housing waiting lists around the country.

The single mention of tax in DSS’s summary of its consultations comes in this sentence: “Private investors and landlords need incentives like tax breaks and subsidies to provide more social and affordable housing.” It’s as if negative gearing and the capital gains tax discount are invisible, or don’t exist, and we’re being asked to invent a set of new industry supports to build affordable homes without any reference to the multibillion-dollar concessions already in place.

Again, this isn’t because participants in DSS’s consultations forgot to mention negative gearing and the capital gains discount. Both were raised at the “community conversation forum” I attended in Geelong (and not just by me). While DSS has yet to upload all 517 submissions to its Engage platform, many of those that are available raise tax reform as an essential consideration in the development of the national housing plan. These include submissions by local governments such as the City of Melbourne and Brimbank City Council, by housing providers and support services such as Mission Australia and the Western Homelessness Network, and by expert organisations such as RMIT’s Centre for Urban Research and SGS Economics and Planning.

In a joint submission, the peak industry bodies National Shelter and the Community Housing Industry Association state the problem clearly:

Currently the ability for housing markets to supply enough homes to meet the population’s needs is distorted by settings for capital gains tax and negative gearing that prioritise speculative housing acquisition for capital return over strategies that aim to ensure every household is able to meet their need for affordable housing. A key goal for the Plan should be to explore opportunities to apply taxation settings that support achievement of long-term housing outcomes over speculative investment returns.

True, statements like this go beyond the narrow focus areas offered up for discussion in the original DSS issues paper, and every page of the summary report includes a disclaimer that it “may not include all views presented by stakeholders.” Yet the same disclaimer says that the document doesn’t represent the views of the Australian government. So even though Labor finds it politically inconvenient to talk about negative gearing and capital gains tax, that’s no reason for the report to shy away from such topics.

To invite community members, housing practitioners and experts to engage in a national dialogue and then to ignore what they have to say makes a mockery of the process of consultation. The Albanese government said it wanted to hear ideas on how to tackle one of the most pressing social and economic issues confronting the nation. Many of us took that invitation at face value and went to considerable lengths to contribute. We can only feel let down. •

The post On housing, is Labor listening? appeared first on Inside Story.

Evidence of seemingly immovable obstruction isn’t hard to find. Oil and gas companies have resumed investment in exploration on the assumption that internal-combustion vehicles and gas-fired electricity generation will be around for some time to come. Everywhere the expansion of solar and wind power is being obstructed by NIMBY objections to new transmission lines, complex permitting procedures, and grids designed to distribute power generated by coal and gas. Higher interest rates have added to the obstacles facing solar and wind projects.

Against this seemingly immovable resistance is ranged the irresistible force of massive reductions in the cost of solar photovoltaics, or PV, and, to a lesser extent, wind. The result has been a huge expansion in production capacity, estimated at 650 gigawatts a year in China alone. Geopolitical concerns have meanwhile driven the United States and other countries to reduce reliance on China through “friendshoring,” the expansion of production capacity outside China.

The International Energy Agency estimates that global solar PV manufacturing capacity will reach almost 1000 gigawatts in 2024. This exceeds current projections of demand so much that the IEA warns “the industry is rushing headlong into a supply glut.”

That warning implies that stocks of unsold inventory will build up, as is already occurring. As the growth of stocks becomes unsustainable, prices will fall to a point where demand and supply are brought back into balance. Where will that equilibrium be found?

It is easier to look at the supply side first. Solar module prices have fallen to historically low levels of US$0.14 per watt, a decline of nearly 40 per cent since the beginning of 2023. These are stunningly low prices. In the absence of soft costs, and assuming 7 per cent interest, and 2000 hours of operation per year, the cost of electricity from such a module would be a mere 0.5 cents per kilowatt hour. Even at these prices, though, solar PV producers are rushing to invest in new production capacity.

The decline has been accelerated by a fall in the price of polysilicon, the raw material for a solar cell, as well as reductions in the amount required for a cell with given capacity. Solar cells now require only two to three grams of polysilicon per watt of capacity. With polysilicon prices now below US$10 per kilogram, that’s no more than 3 cents per watt.

The next big input to the production of solar cells is electricity itself. Solar PV manufacturing has tended to be located in coal-intensive provinces of China, notably Xinjiang and Jiangsu. But as the glut of solar modules develops, manufacturers will find it more economical to “eat their own dogfood,” using surplus modules to supply the electricity to produce new ones at ever lower costs.

Improvements in the efficiency of solar cells along with increases in the surface area of modules translate into reductions in installation costs. With solar cells now very cheap, manufacturers have an incentive to focus on design changes that produce lighter and more flexible modules, further reducing costs.

In other words, even a severe glut seems unlikely to result in sustained reductions in output. Rather, manufacturers will accept lower profit margins and seek ways to cut costs even further.

The demand for energy is growing and nearly all of this demand can be met by electricity in one way or another. As solar generation capacity increases, the benefits of using solar PV to meet the growing demand will become more and more evident. Battery storage is expanding rapidly too, threatening the role of gas-fired electricity as a source of “dispatchable” electricity — electricity that can be turned on or off at short notice.

What happens when such an unstoppable flood of generation capacity runs into the seemingly immovable barriers of entrenched interests and political resistance? The outcome will undoubtedly be messy, but one way or another the flood will find its way around, over or perhaps under the barriers.

The problem of transmission lines provides one example. New solar generation is now commonly sited near where coal-fired power plants have been shut down, thereby taking advantage of already-installed transmission lines. But once solar costs fall enough, it becomes economically sensible to buy and demolish coal plants in order to use their transmission capacity for solar. That’s increasingly true even when the plants are nowhere near the end of their operational life.

Rooftop solar provides another way of avoiding constraints on transmission capacity. It’s politically popular, so regulators have shied away from onerous permit requirements in most jurisdictions. Thanks to the incentives provided by the Small-scale Renewable Energy Scheme, as well as its sunny climate, Australia has been a world leader in rooftop solar. That will only accelerate as the cost of solar modules drops. In fact, the cost reduction associated with that decline is so great that, even in the absence of government incentives, rooftop solar will soon be an attractive option in any sunny climate.

Another possible path is the production of “green hydrogen” using electrolysis to split water into its components, hydrogen and oxygen. The low price of electricity implied by a severe glut of solar PV would make electrolysis competitive with coal-based technologies. Replacing these polluting technologies with electrolysis to meet existing demand for hydrogen would use about 2300 terawatt hours, or nearly twice the global total solar PV generation for 2022.

The shift to hydrogen would be constrained by the massively increased need for electrolysers, which are currently produced on a much smaller scale than would be needed. Nevertheless, production of even a modest share of current hydrogen demand would absorb any glut in solar PV production. And the prospect is that demand will increase sharply, most notably in steel production.

One way or another, the force of massively increased solar production capacity and ever lower costs will breach the “immovable barriers.” But compared with an efficient and orderly transition, the process will be slower than is needed, and the costs will be much greater. •

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Then there was the unexpected jump in numbers. Net overseas migration for the 2022–23 financial year hit a record 510,000 people, more than 25 per cent above the 400,000 anticipated in the May budget and more than double the October 2022 forecast of 235,000. Not only are more people arriving but fewer are leaving, especially students; the catch-up after Covid means many international students are still in the early stages of their courses and won’t return home for two or three more years.

Combined with the shenanigans of sacked former home affairs secretary Mike Pezzullo, these developments have made it easy for the opposition to conjure up an image of out-of-control migration and link this to housing shortages and other pressing issues. Immigration isn’t the cause of a housing crisis decades in the making, but the surge in arrivals does make a tight rental market even worse.

Arrival numbers would have been no lower under a Coalition government and Australia’s population would be higher if not for Covid. But facts count for little in an overheated debate. Migration is now Labor’s problem and it would be easy to construe the release of its new strategy as an attempt to wrest back the initiative on this fraught topic.

But the strategy is no knee-jerk response. It is the product of months of work, building on an expert panel’s finding that the migration program is “broken” and a report by former Victorian police commissioner Christine Nixon confirming widespread abuse of Australia’s visa system.

The strategy adds detail to the government’s early responses to those two reviews and affirms its commitment to keeping both unions and business onside. It shows a government aspiring to wholesale reform rather than bolting yet more fixes onto an already unwieldly, overloaded and outdated migration machine.

In its existing form, the system satisfies no one. Employers and migrants complain about high costs, slow processing and uncertain outcomes, while the public questions the scale and integrity of the program. In their joint foreword to the strategy, the responsible ministers, Clare O’Neil and Andrew Giles, recognise the need to restore migration’s “social license.”

The strategy articulates four policy objectives, and while they are not ranked, the tone and content of the strategy indicate a descending order of priority. Migration, it says, should first, raise living standards; second, ensure a fair go in the workplace; third, build stronger communities; and fourth, strengthen international relationships.

To achieve the primary aim of higher living standards the government wants to refine migration to boost productivity, counter the perceived impacts of an ageing population, fill skills gaps and expand exports.

One step is to reform the points test, which scores and ranks applicants for permanent skilled migration according to their age, qualifications, experience and English language proficiency. A discussion paper will canvass options that are likely to give greater weight to the skills and qualifications of an applicant’s partner and downgrade factors that are “poor predictors” of labour market success, such as studying in a regional area and fluency in a community language. The aim is to reward skill over “perseverance” so that international student graduates working in their professional fields have a faster route to settlement while graduates stuck in lower-level jobs are screened out and leave Australia.

Another measure introduces a “skills in demand” visa to replace the “temporary skills shortage” visa. This is more than a name change. The government had already lifted the threshold wage for temporary skilled migrants from $53,900 to $70,000 to ensure that these visas are not used to recruit cheap labour. (The threshold, frozen since 2013, will now be indexed annually.) New rules allow temporary migrants to switch employers and sectors more easily, which should improve productivity as these workers move to jobs where their skills are more highly valued.

Labour market testing will be simplified, employers can pay sponsorship fees periodically instead of up front, and visas will be issued more swiftly, with the government committing to a median processing time of just seven days for applicants in the top “specialist skills pathway.” This applies to workers earning at least $135,000, who will no longer have to match one of the occupations in demand identified by Jobs and Skills Australia (though the category is closed to trade workers, machinery operators, drivers and labourers).

Workers paid between $70,000 and $135,000 are on the “core skills pathway” and must still have an occupation identified as being in shortage, with a promise that these lists will be updated more frequently to better reflect rapidly changing labour market needs. Both the core and specialist pathways will offer a route to permanent residency.

The details of a third “essential skills” pathway are yet to be worked out. This option will apply to lower-paid, hard-to-fill jobs with a focus on the care economy. The government says it will “further consult” on lower-wage migration next year, but any arrangements will be sector-specific, capped in size, closely regulated and designed to maintain the primacy of Australia’s relationship to the Pacific as “a guiding principle.”

The latter is a reference to objective four of the strategy — strengthening international relationships — and we can expect further development of PALM, the Pacific Australia Labour Mobility scheme, which has its genesis in a seasonal labour program for workers from Pacific island nations and Timor-Leste. Only 3000 Pacific islanders were working seasonally in Australia in 2016, but by October 2023 there were more than 38,000 PALM participants. The original scheme was broadened from horticulture to meat processing and other agricultural industries, and then extended to encompass tourism, hospitality, retail and care. It is mostly limited to regional and rural areas, but is no longer just seasonal, with workers granted visas for between one and four years.

But the scheme remains purely temporary, with no path to permanent residency. Pacific workers can bid for one of 3000 new Pacific Engagement Visas offered annually, but success is a matter of luck. Former top immigration official Abul Rizvi has highlighted a sharp rise in PALM workers applying for protection as refugees and attributes this to dissatisfaction with their treatment in Australia. He says the “silliness” of the Pacific visa lottery will just add to PALM workers’ frustrations and suggests the government should instead help them “develop higher level skills as a pathway to permanent residence, especially skills relevant to the regional communities in which they are currently working.”

Rizvi’s sensible suggestion points to an enduring dilemma of low-skilled migration. Once workers secure permanent residency they tend to quit poorly paid jobs in remote locations and move to better-paid positions in cities. Keeping migrants on temporary visas limits their labour market mobility and ensures they stay put, but it’s a recipe for disaffection and exploitation.

The structure of the PALM scheme runs counter to the second major policy objective in the new migration strategy, “ensuring a fair go in the workplace.” By allowing temporary skilled migrants to shift jobs more easily, the government has increased their power to challenge underpayment and resist unreasonable demands. Temporary skilled migrants who suffer abuse will have six months instead of two to find an alternative sponsor and be less reliant on any single employer to support their applications for permanent residence. The contrast with the purely temporary PALM scheme that ties workers to specific employers and regions is stark.

To tackle abuse, the government has introduced a bill to make it a criminal offence for employers to misuse visa programs to exploit temporary migrant workers. This recommendation by Allan Fels’s 2019 Migrant Workers’ Taskforce was ignored by the previous government.

The idea of a “fair go” also has a domestic element. The government wants to ensure that migrants don’t displace local workers or bring down their wages. Its primary move here is to tighten entry requirements for international students to ensure that their main intention is to study, not work. The strategy erroneously calls this closing “back doors and side doors” when, in reality, Australia opened the front door wide to support the growth of education for export; unsurprisingly, international students walked through in large numbers.

New barriers are being erected. International students must pass a higher English language test and prove they have significantly more savings. They will find it harder to switch from one course to another, especially if they appear to be going backwards — by, for example, swapping from a degree to a certificate-level course. The government will prioritise visa processing based on the “risk level” of educational institutions. Applications to study at top-tier universities will sail through while visas to attend private colleges languish in the bureaucratic pipeline.

The Australian Skills Quality Authority will also have extra funding to crack down on ghost colleges, those dodgy providers that are shopfronts for obtaining a visa with work rights.

Evidence of a more stringent approach is already apparent. In 2018–19, the last full year of Coalition government before Covid, only 13 per cent of student visa applications lodged outside Australia were rejected. In 2022–23 (the first full year of a Labor administration) 20 per cent were knocked back. The change was especially pronounced in offshore VET applications, where average rejection rates grew from 38 per cent under the Coalition to 46 per cent under Labor. The perception that Dutton was tougher on border control than his successor as home affairs minister doesn’t match reality.

Labor is also winding back generous post-study work visas, which the Morrison government made even more attractive in late 2021 to help international education “roar back” after Covid. Visas will be shorter: three years instead of four for a PhD and two years instead of three for coursework masters. The eligible age limit will be reduced from fifty to thirty-five years.

When the Gillard government introduced the 485 post-study work visa a decade ago, some of us warned that it would produce a large new cohort of “permanently temporary” graduates — migrants living and working in Australia for years without any prospect of settling. This has come to pass. Of the almost 200,000 temporary graduate visa holders in Australia, most are stuck in limbo. They struggle to find jobs in line with their qualifications and do low-skill work that will never enable them to amass the points needed to qualify as skilled migrants. It makes sense to rein the scheme in.

Over time, these measures could see international student and graduate numbers decline further than they would have, which may reduce the pool of casualised and precarious labour staffing kitchens and delivering meals. On the other hand, the government has reinstated restrictions on working hours lifted during the pandemic. Students can work a maximum of forty-eight hours each fortnight, up from forty hours pre-Covid. Some will need to work more “off the books” to make ends meet, making them vulnerable to ruthless employers.

The government will also evaluate another visa category rife with wage theft, poor working conditions and sexual harassment — working holiday visas — which have morphed from a cultural exchange program into a low-wage labour scheme, especially for agriculture. The scale of abuse has repeatedly been documented over the past decade, and it’s hard to see how the program can be rehabilitated short of scrapping the second and third visas backpackers can acquire if they complete three or six months of “specified work” in regional Australia. As with the PALM scheme, linking work and visas makes young travellers beholden to employers, often in remote towns and isolated workplaces. The PALM scheme is, at least, more closely regulated.

Improved conditions for student workers and backpackers would be a significant achievement and help to restore public faith in the migration program, even if we had to pay more for our food and collect our own takeaway. Whether the proposed measures can achieve this is an open question, but Labor is at least demonstrating a level of intent that was absent under the Coalition. In the words of former senior public servant Martin Parkinson, who chaired the expert review, the migration system has suffered “a decade of almost wilful neglect.”

The government hopes to meet the third objective of the migration strategy, “building stronger communities,” by shifting the emphasis from temporary to permanent migration and providing greater clarity about who can (or can’t) hope to settle here.

The commonsense implication is that permanent migration is more conducive to building “a cohesive multicultural society.” But the strategy is silent on family migration, apart from the strange formulation that the government will support “relationships with family abroad.” That doesn’t sound promising for overseas-born Australians who want to bring parents here to live with them. Parent migration could build stronger communities but clearly runs counter to the higher-priority goals of boosting productivity, filling skills shortages and slowing demographic ageing.

The conundrum of parent visas has been left to fester so long that the shocking blow-out in applications and waiting times means many parents are likely to die before they get a visa. This is causing distress and anxiety for tens of thousands of families.

One immediate option would be to suspend new applications pending a review of the system, just as Canada did in 2011. This would halt the growth in the waiting list and buy time to figure out what to do while working through the backlog. It is cruel to keep applications open and foster false hopes.

The migration strategy draws quite a clear outline of the government’s vision for skilled migration, even if there is lots of colouring in to do. When it comes to family migration, though, the page remains virtually blank, and the government is still “exploring” what visa settings are “appropriate.”

To support all four objectives, the migration strategy promises to make the system easier to navigate and administer. This entails, among other things, merging or closing some of the one hundred “visa products” to simplify offerings, as well as adding extra staff and upgrading IT systems.

The challenge will be to find a balance between the clear regulations and procedures needed to process a high volume of visas efficiently, on the one hand, and retaining enough flexibility to fit individual circumstances, especially in compassionate cases, on the other. Whenever the migration system re-gears, some people get chewed up, including many with compelling reasons to stay in Australia. Foreign parents of Australian-citizen children, for example, will often cycle through a series of temporary visas in a desperate bid to stay close to their sons or daughters. This will get harder as visa rules tighten. It would be ironic and disappointing if attempts to streamline migration mean even more decisions landing in the lap of the immigration minister in the form of last-ditch appeals for him to exercise discretion under various “god powers.”

The strategy is pitched as a bid to get migration working for the nation: “For workers. For businesses. For all Australians.” Noticeably absent from this top-line list is a desire to get migration working for migrants. The strategy (and the ministers’ language promoting it) tends to present migrants, especially student visa holders, as highly calculating and instrumental — as people who use “back doors and side doors” to milk the system for whatever they can get or even engage in outright rorts.

What gets forgotten is that circumstances and aspirations change, especially for young adults at a formative stage of life. Students may come to Australia with every intention of leaving when they complete their courses but then discover new freedoms and possibilities that were not previously available to them. Perhaps they can openly express their sexuality, their creativity or their politics for the first time. Perhaps they find a new vocation or meet the love of their life.

Yet the strategy essentially tells young temporary migrants: please come to Australia for a few years but don’t put down any roots, or even put out feelers, unless you are pursuing an occupation in demand and can help build Australia’s economy. Not only is this unrealistic, it also shows we might be the ones who are calculating and instrumental.

As long as we rely on international students to fund our higher education system and backpackers to pick our produce, temporary migration will continue at a high level. The least we can do is be honest with temporary visa holders about their limited prospects for building a life in Australia, and the new strategy points in that direction. Yet we should recognise that this might inflict an emotional and psychological toll.

In their foreword to the migration strategy, the immigration and home affairs ministers say they want to bring migration levels “back to normal.” It’s not clear what might constitute “normal” in 2024, but a better-targeted and more efficient system would certainly be an achievement, especially if it offers greater clarity and certainty, reins in workplace exploitation, and reduces the number of migrants who are rendered permanently temporary and stuck in a state of being not quite Australian. What it won’t do is resolve the practical and ethical challenges that arise when the number of migrants coming to Australia on temporary visas is so much greater than the number who can hope to settle here. •

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Yet, having spent six months studying one of the nation’s most pressing issues, the committee failed to transcend the predictable ruts of partisan politics and reach shared conclusions.

At their best, parliamentary inquiries are powerful democratic instruments and an aid to good government. Inquiring minds delve into complex issues, build up an evidence base, interrogate expert witnesses and listen to the stories of those directly affected by the matter at hand. Rival parliamentarians with diverse convictions work collegially to piece together a coherent picture of a messy problem and then offer joint suggestions as to how it might be tackled. In the past, this has been particularly true of Senate committees, which are more likely to involve influential crossbenchers, and where major-party senators felt less constrained by party discipline than their colleagues in the lower chamber.

My first appearance before a Senate committee in 2006 strengthened my confidence in Australia’s democratic institutions and processes. The questioning was acute, engaged and nonpartisan. Committee members were well briefed and had read our submission carefully. Most impressively, the senators were genuinely interested in discussing novel approaches to a difficult policy area — in this case the future of the horticultural labour force — including proposals that sat in tension with their party platforms.

But my appearances before a few other committees since then have failed to match that experience. Most committee members appeared to listen attentively and grapple with issues in good faith, yet over the years I sensed a growing tendency for parliamentary inquiries to become venues for political theatre. Genuine engagement and collaboration are giving way to point scoring as committee members select evidence to confirm their established positions.

I can’t comment on the day-to-day conduct of the 2023 rental inquiry. I made a submission but wasn’t invited to appear, and I haven’t studied the transcripts of public hearings. But the final report is a missed opportunity that reaches no substantial conclusions.

The committee affirmed that “a dwelling of good standard and equipment is not only the need but the right of every citizen” — a view first articulated in 1944 by the Commonwealth Housing Commission and often honoured in the breach. The report, released on the last day of parliament for 2023, proposes no new measures to realise that failed wartime ambition, simply saying that “while the problems are significant and self-evident, the solutions are less clear.”

The report’s concluding comments include two recommendations carried over from September’s interim report and outline some other points of agreement that are too general to have policy impact. These are followed by three separate sets of recommendations — one from government senators, one from Coalition senators and one from committee chair, retiring Victorian Greens senator Janet Rice.

No one expected members of rival parties to find common ground on questions where battlelines are entrenched and heavily fortified. Labor and the Coalition were never going to back the Greens’ call for a two-year rent freeze or agree to reform negative gearing and other tax concessions and invest the extra revenue in social housing. But given the stakes, senators from all parties should have joined forces to make at least some constructive suggestions.

They had plenty of material to work with in the report itself, which is a concise and easy-to-read digest of some key drivers of our rental crisis that fairly canvasses competing views.

The report’s main sections focus on boosting the stock of social and affordable rental housing, immediate financial relief for renters, improving rental conditions and strengthening tenants’ rights. Along the way, it looks at the impact of short-stay accommodation like Airbnb (and options for its regulation), considers the potential of the build-to-rent sector, and examines arguments for planning reform and rent regulation.

But senators failed to make common cause on topics where evidence is overwhelming and uncontested. Take the lack of affordable homes for renters on very low incomes. Across the political spectrum, it’s generally agreed that providing homes for this group is the responsibility of governments, not private investors. A “conservative” official estimate is that 377,000 households need social and affordable housing today, and a statutory review of the National Housing Finance and Investment Corporation Act found that an extra 614,000 social housing dwellings are required by 2036.

Given such daunting numbers, the interim report’s joint recommendation that the Australian government “continue investment in public, social, community and genuinely affordable housing” is so vague as to be risible. There is no shared view on how much should be built or what proportion of Australia’s rental stock should be subsidised.

Committee chair Janet Rice called on the government to quantify the annual investment needed to meet the shortfall in public and community housing. But this was a step too far for Labor senators, whose additional comments at the conclusion of the report essentially rehash current policies, including the Housing Australia Future Fund, the $2 billion social housing accelerator, the $3 billion in incentives to build 1.2 million homes in five years and the 15 per cent increase in Commonwealth Rent Assistance.

Labor senators claim these measures constitute “the most significant investment in social and affordable housing in more than a decade.” True, but that’s not much of a claim since the Coalition abandoned the housing field almost entirely from 2013 to 2022. The Albanese government’s initiatives to date are welcome but fall far short of what is needed.

The second recommendation carried over from the interim report is for the federal government to take “a coordinating role to implement stronger rental rights.” Labor’s senators seem to feel this has already been achieved thanks to the “better deal for renters” struck at national cabinet in August. Their additional comments essentially reiterate what was agreed there, including better protecting tenants’ personal data, “phasing in” minimum standards for rental properties, establishing a nationally consistent policy on reasonable grounds for ending a lease, and making it illegal to solicit rent bids — that is, stopping agents from asking prospective tenants to pay more than the advertised rate. Such measures will improve the situation of tenants but are weak and short on detail.

The report warns, for example, that bans on “soliciting” rent bids fail because desperate prospective tenants will voluntarily offer higher amounts anyway. Widely used rental technology platforms also ask tenants to specify the amount of rent they are willing to pay, which essentially amounts to a blind auction.

In response to this evidence, the best the senators could agree on was that “further consideration of state tenancy regulation may be required to close this potential loophole.” To call this response wishy-washy would be too kind.

Is Labor so determined to distinguish itself from the Greens that it couldn’t sign on to Rice’s unremarkable proposal to ban unsolicited rent bidding, ensuring that the advertised rent matches the actual rent agreed in the lease?

Similarly, Labor could have found common cause with the Greens’ call for more specific minimum quality standards for rental properties, such as basic levels of energy efficiency and thermal comfort. The committee was told that Australia could borrow from New Zealand’s Healthy Homes standards for heating, insulation, ventilation, moisture, drainage and draught stopping.

Yet all Labor senators could come up with to improve renters’ welfare was a suggestion that “the contents of the committee report may be useful guidance” for the states and territories as they update tenancy regulations. Coalition senators, meanwhile, seem less concerned with helping tenants than with protecting the existing rights of property investors — those “overwhelmingly quiet, aspirational Australians looking to safeguard their retirement.”

Coalition senators see the best response to Australia’s rental crisis as an individual one — pay your own mortgage instead of someone else’s and avoid getting “stuck in a rent trap.” This rubs salt in the wounds of generations of Australians who’ve watched rising real estate values rapidly outstrip wages, mostly on the Coalition’s watch. For decades, the dogged support for first homebuyers offered by both major parties has coincided with falling rates of home ownership, the misguided subsidies simply making the problem worse by pushing up property prices. Yet the Coalition senators’ main recommendation is to “to revitalise the culture of home ownership” by letting first homebuyers access their super.

Senators could have made a united call for a review of Commonwealth Rent Assistance. The committee heard the scheme is ripe for reform because funds are flowing to some households that are relatively well off while others in dire need miss out. Research shows that reallocating rent assistance to better reflect housing need could have saved $1.2 billion in 2022 — or about a quarter of the annual cost to taxpayers in that budget cycle. Given that spending on rent assistance will rise to $5.5 billion this financial year, there is a compelling case to evaluate the program to see if money might be better targeted. Political rivalry seems to have overwhelmed any inclination to pursue such evidence-based initiatives.

The views of renters themselves might not have influenced the recommendations but they did make it into the interim report. With the first of its terms of reference referring to “the experience of renters and people seeking rental housing” the inquiry made a significant effort to hear directly from Australians struggling to keep or find a home.

Ada, a public servant in Canberra, described how, heavily pregnant, she holed up in the smallest room in her house in a desperate bid to keep warm. She blocked the vents, covered the windows in bubble wrap and only splashed out on heating her whole home after going into labour.

Amity in Sydney told the committee that her 11-year-old son had already moved house five times.

The last few years people have been asking me, “Which high school will he go to?” “I don’t know,” has been my reply because on a periodic lease I know that I can be evicted an any time for no reason with only ninety days’ notice.

Mark, a father in Brisbane, told the inquiry that rental stress prevents him and his partner from being their best selves:

The burden absorbs so much of our headspace. We have not been able to do our best as a spouse, a parent a friend or an employee… We have been left constantly worrying about where we are to live and how we are to pay our next bills. This is not healthy for us or our family or our child.

In their separate concluding comments and recommendations, Greens, Labor and Coalition senators thanked those who gave evidence to the committee. But if I were Ada, Amity or Mark I would feel let down by their failure to transcend party politics and agree on ways to jointly advance tenants’ cause.

The committee says it “heard a diversity of views on possible strategies and measures to address the crisis.” But their job was to do more than admire the problem; they needed to reach shared conclusions about how to fix it. •

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The gold in Anthony Albanese’s Midas touch, meanwhile, has turned to something of a slightly different colour, and the flat, syllable-mangling delivery that was once the secret to his connection with unpretentious middle Australia is now dreary and uninspiring. It gets worse: apparently he’s “weak,” a “follower, not a leader” and a “beta male” (ouch), according to focus group quotes plastered over News Corp’s Sunday tabloids.

Last week I did a very challenging thing: I watched question time, or at least large chunks of it, over a couple of days. I wanted to see how both major parties are behaving within this new Labor-is-acutely-mortal paradigm.

I expected cost of living to be on high rotation among opposition speakers. After all, it’s the biggest and most intractable problem the government faces. To my surprise Dutton instead asked question after question of the prime minister about his supposed failure to “stand up to China,” as he and Scott Morrison dedicated so much time to doing, with little evident damage other than to themselves, in the dying days of the last government.

Other questions focused on the repercussions of the High Court decision that set free a refugee child sex offender and all the other “hardened criminals” now in the community. Exactly the sort of thing you’d expect this former home affairs minister to jump on, and something that is at least more likely to hit a short-term nerve in voterland.

And in the government too: if there’s one issue that produces a sinking feeling in the collective Labor gut it’s the whole asylum seeker, refugee and immigration tangle. Unlike with the questions about China, the government’s response — and not just under parliamentary privilege — was completely over the top: hysterical and desperate, with some frontbenchers even bellowing about Dutton being soft on paedophiles.

It’s one thing to chip away at the opposition leader’s self-proclaimed toughness on the issue by revealing home truths about incompetence on his watch. Digging up letters to the current immigration minister from WA Liberal senator Dean Smith requesting the release of a convicted child sex offender certainly highlights the opposition’s disingenuousness.

But “protecting paedophiles” sounds grubby and deranged. It tells voters the government is scared. And who would believe it of any opposition leader in living memory?

Unlike during the Rudd era, Albanese’s Labor has managed to keep the boats stopped. Assuming it remains that way up to the election, “boat people” won’t be an issue. The extent of this general topic’s impact on past election results is generally overstated anyway. And why play on Dutton’s preferred terrain?

There’s a strand of Labor that yearns for the pre-Whitlam days, before Kim Beazley Senior’s famous “dregs of the middle class” hijacked the party of workers and White Australia. We saw it when Julia Gillard replaced Rudd and immediately started channelling John Howard. Some thought it awfully clever politics, at least at first, but it ended up reinforcing Tony Abbott and Morrison’s messaging and normalising their gross behaviour.

I still believe Dutton is unlikely to be opposition leader at the next election, assuming it’s in 2025. Just today Nine papers carry a piece about his deputy’s plan to win back teal seats. Sussan Ley is everything Dutton is not, and the obvious replacement should one be needed.

As pathetic as it sounds, it’s likely both sides are desperate to do well in the final Newspoll of the year so they can relax over the summer. But a truly clever prime minister would try to keep Dutton in place, because when he goes the government will sorely miss him.

Which is, I suppose, what he’s doing, if inadvertently. But there are better ways than lowering your own stature to raise your opponent’s.

Perhaps that’s being too simplistic, though. Troops need to be kept happy. Bill Shorten still has a lean and hungry look, and while the chances of a comeback are not even minuscule, we have seen many times how unsuccessful challengers (on the Coalition’s side in 2018, for instance) can make an incumbent’s position unsustainable.

It was only in June this year (though it feels a lot longer ago) that I finished a piece with these words:

We are only one year in, which as past governments have shown tells us nothing about how things will pan out. And we’ve not seen how Albanese copes under pressure, in difficult times. They will come, sooner or later.

Those times have arrived. And the answer to how he’s coping? Not well. •

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Might it continue dropping? (The rather jumpy Roy Morgan had Labor support dipping to 49.5 earlier in November before bouncing back to 52.5 per cent. Let’s see what December brings.)

Coming after the Voice result, the trajectory has led at least a couple of excited commentators to anticipate a one-term Albanese government. The Australian’s Peta Credlin has penned a rallying of the troops and a hoorah for Liberal leader Peter Dutton. In the Nine papers, Shaun Carney’s rather tendentious offering, aimed squarely at prime minister Anthony Albanese, even implies the PM might not last until the next election.

A fortunate by-product of the narrowing is that we no longer need to endure stories of the Coalition’s existential crisis because of low support among young voters.

But how much do surveys this far before an election tell us about the upcoming result? The answer: nothing at all. This was true when the Labor government was way ahead, and it’s true today. It’s only big, sustained leads for oppositions that should give us pause, and even then we’ve seen the last-minute government comebacks getting bigger over recent decades.

Can we treat this as routine midterm doldrums? Dutton “cutting through”? Damage inflicted by the Voice referendum and the perception that it was an expensive indulgence? Kudos for the opposition leader for backing the right horse?

Or is it the economy — with hip pockets screaming about high inflation, particularly among that not-insignificant minority of voters with variable mortgages?

Or was this always going to happen once the honeymoon ended?

Everyone with a keyboard can explain what the government’s been doing wrong, but that’s all post hoc rationalisation of the polls, much as we saw in the Voice campaign. The next election will be decided by voters’ perceptions of the alternatives on offer, not illusory poll-generated “momentum.”

Still, as the year comes to a close, Mr Albanese must be a rather gloomy prime minister. For election watchers and the political bubble, opinion polls tell us how parties are “travelling” — and who doesn’t want to be seen to be “travelling well”? It makes for an easier life in the media and keeps MPs, most importantly marginal seat holders, and the wider party content. Most would agree that the current polls don’t predict the next election result, but they do measure something approximating the electorate’s happiness with the government.

It’s all indisputably good news for Dutton. The polls, and the interpreting of them, buttress his leadership. And if more friendly ones arrive in December he’ll be able to relax over summer.

But is what’s good for Dutton’s position good for the Coalition — specifically, its chances of forming government after the next election?

The Liberal leader has explicitly repositioned his party away from big business, with its “woke” attitudes and “virtue signalling” — and implicitly away from voters in wealthy, urban, formerly blue-ribbon electorates too — towards the “outer suburbs and regions.” Such politicking, politely referred to as “values”-driven, involves encouraging a fear of the outside world and, at home, resentment towards ethnic minorities. This is Dutton’s political comfort zone and indeed his brand. It’s what drove his rise to the top of his party.

In olden days the Liberals had to tread carefully on this path lest they alienate voters in wealthy blue-ribbon electorates. Now they’ve lost most of those seats, the constraint has loosened. It’s easier to forgo potential gains than consciously sacrifice current sitting MPs.

The six teal 2022 wins were all at the expense of Liberal “moderates.” Each of those Liberals supported Malcolm Turnbull against Dutton in the 2018 leadership spill, for instance. Who in the current party room is vulnerable to teal-like incursions? Paul Fletcher (Bradfield) and Julian Leeser (Berowra) on Sydney’s north shore come to mind. They also supported Turnbull, so perhaps would be no great loss from Dutton’s point of view.

The strategy might work, but it would probably require a very big national vote for the Coalition. Anything around 51–49 either way would likely produce a hung parliament, and while the teals won’t necessarily vote as a bloc, it’s difficult to imagine the six, and independents Zali Steggall (Warringah) and Helen Haines (Indi), supporting a Dutton-led Coalition.

Put simply, Peter Dutton is not a Liberal leader the teals would be likely to elevate to the prime ministership.

And then there are voters in teal seats. We don’t know what the crossbench will look like in 2025. If Steggall’s 2022 re-election is any guide then the six will romp home. But that was against a poor Liberal candidate, and Scott Morrison as prime minister.

Detestation of Morrison was a core driver of the teals’ success. And many of the characteristics those voters couldn’t abide in Morrison are shared by the current Liberal leader.

We do live in unpredictable times, with low primary vote support on both sides leaving more to the vagaries of preferences and how-to-vote cards. With those teal seats in the way, the Coalition will very likely need a lot more than 50 per cent of the national two-party-preferred vote to form government at the next election. More like 52 or 53 per cent.

Or another leader. One the crossbenchers felt they could work with. •

The post Peter Dutton’s momentum appeared first on Inside Story.

Initially, Menzies’s options were limited by the ten-year Commonwealth State Housing Agreement he inherited from Chifley. The 1945 agreement granted the states long-term loans to build homes for low-income families on the understanding that “a dwelling of good standard and equipment is not only the need, but the right of every citizen.” Its focus was on rental housing, with an option for sitting tenants to purchase their homes on favourable terms.

When the agreement came up for renegotiation, Menzies undermined its intent by encouraging middle-class families to buy public housing too, even though they didn’t live in it. Social affairs minister Bill Spooner argued that it was not “fair” to sell homes to working-class families with “no culture of thrift or sense of community obligation.” Not fair, it seems, to Menzies’s “forgotten people.”

To his credit, Menzies at least built lots of dwellings. Between 1947 and 1961, a period of mass migration, Australia’s housing stock grew about 10 per cent more than its population, with governments responsible for almost a quarter of new construction. Menzies also recognised that the state could play a fundamental role in stabilising a construction industry plagued by booms and busts. As he said in his 1949 campaign speech — the same “little capitalists” speech Kohler quotes — governments could plan public works “for periods when private building falls off.” Subsequent governments have forgotten this insight.

Home ownership rates jumped dramatically under Menzies — rising from about 50 per cent at the end of the war to over 70 per cent in 1966, largely due, claims Kohler, to the aggressive selling of public housing stock forced on the states. With their partisan bias towards home ownership, Menzies and Spooner “set the scene for decades of mistakes by their successors in the Coalition.”

Not that Labor hasn’t made its fair share of housing mistakes. It too failed to invest sufficiently in public housing: prior to the 1983 election, the party promised to double the proportion of public housing stock, but when Bob Hawke replaced Bill Hayden as leader the pledge was dropped.

Equally significant was Labor’s failure to stick to its guns on negative gearing. Treasurer Paul Keating eliminated negative gearing in 1985, arguing that allowing high-income earners to claim interest costs so they could trade forty-year-old Bondi flats “was not adding to the stock of housing or to the stock rental accommodation.” Keating was right, but the Hawke government buckled to the property industry and reinstated negative gearing two years later. If it had followed Keating’s logic and only restored the tax concession for new builds, then the trajectory of Australia’s housing might have been different. Nearly three decades later, having taken such a policy to election defeats in 2016 and 2019, Labor has abandoned it altogether.

Labor has also failed to restore housing to the political and administrative status it enjoyed federally in the postwar years. Chifley had a separate department for works and housing, but Menzies shifted housing to social services, where it sits today. The current deeply flawed development of the Albanese government’s promised national housing and homelessness plan is evidence for Kohler’s view that housing doesn’t belong in the Department of Social Services. Government comes at housing “as a welfare issue rather than an economic one,” he writes, yet housing is “almost everything” in the Australian economy.

Over the past two decades, rocketing real estate prices have taken household debt from 40 per cent to 120 per cent of GDP, tying up capital that could be used for far more productive purposes. Excessive housing costs dampen consumer spending and force families to delay having children. Long commutes in sprawling cities hamper productivity, harm health and worsen the climate catastrophe.

The Reserve Bank “manages the economy mainly through housing”— that is, by changing interest rates — which Kohler labels “a policy of cruelty” because the burden of economic adjustment is borne by those “who are already living on the edge.” Worst of all, Australia’s excessive housing costs drive inequality and erode social mobility. “Education and hard work are no longer the main social determinants of how wealthy you are; now it comes down to where you live and what sort of house you inherit from your parents.”

The most notable policy mistakes that made housing the driver of inequality were Coalition tax concessions. The first was the abolition of inheritance taxes in the 1970s and the second was the halving of the capital gains tax by treasurer Peter Costello in 1999. This was “kerosene on the smouldering coals of negative gearing and the lack of an inheritance tax, and turned property investment from a niche activity into the leaping flame of everybody’s tax avoidance scheme.”

This sets Australia apart: “whereas in the rest of the world investing in real estate is all about getting rental income from tenants, in Australia it’s about getting an income tax deduction and then a capital gain.” It helps explain why Australia’s rental market is dominated by small-scale landlords rather than institutional investors — it is small investors, not big ones, who benefit from tax concessions. Australia has virtually no “build to rent” projects because tax settings encourage developers to build to sell to “individual negative gearers” instead.

Coinciding with Costello’s halving of capital gains tax, which spurred real estate speculation, was a new migration boom that added to supply shortages. Unlike his hero Menzies, though, prime minister John Howard failed to use public investment to help housing keep pace with demand. The result was a two-decade-long price boom that saw the cost of housing diverge sharply from wages. Prior to 2000, the average home cost three or four times average annual earnings; now the multiple is seven or eight.

Kohler also has plenty to say about planning and zoning. He laments that Australia didn’t follow Britain’s postwar lead and standardise development controls across the nation, instead leaving them in the hands of state and local governments. This has created a fragmented, complicated system that not only impedes private construction but also hobbles public projects because state authorities must compete with developers to buy land at market rates. As a result, efforts to address housing need through the planning system are “piecemeal, local initiatives.”

Kohler identifies “two tribes” that dominate housing debates in Australia: “One tribe says the problem is tax breaks that boost demand too much and the other says it’s zoning and planning that restrict supply.”

He avoids taking sides, making clear that the fix for our housing mess will require action on a range of fronts — including not just tax reform and streamlined planning and zoning but also mechanisms to consolidate land in established suburbs. Consolidation would encourage the redevelopment of separate blocks with detached single houses as high-quality European-style medium-density apartments, along with a new vision for urban public transport.

But Kohler is not optimistic about the prospects for change. The politics of housing is “both simple and difficult,” he says. Australia is a “bankocracy” and thanks to Menzies’s legacy housing is “a cartel of the majority.” The most powerful players have good reason to want the cost of housing to keep going up. Those with less clout, like renters in the private market, have the odds stacked against them and will lose out. Ultimately, we’ll all be worse off. •

The Great Divide: Australia’s Housing Mess and How to Fix It
By Alan Kohler | Quarterly Essay | Black Inc. | $27.99 | 144 pages

The post And that’s housing appeared first on Inside Story.

None of this was controversial. The ex-judge was Tom Bathurst, most recently chief justice of New South Wales. His confidant was the state’s attorney-general, Michael Daley. And the high-profile figure was Kathleen Folbigg. Twenty years after being convicted of suffocating her four children, she was released from a Grafton prison.

Asked when Bathurst’s actual report would come out, Daley replied, “Without giving away any confidences, I think it would be appropriate to say that it will be weeks and not months.” The report was published last week, more than five months after Folbigg’s release.

Bathurst is the latest in a very lengthy string of judges who’ve ruled on Folbigg’s murder convictions. Six appeal judges, rejecting her first two appeals, all expressly said they agreed with the jury’s verdict. Three High Court judges (who had all once sat on the same appeals court) refused a further appeal, adding that the prosecution evidence was strong.

Just four years ago, in a different official inquiry, a former judge (previously head of a different New South Wales court) not only declared Folbigg guilty as charged but said that the further evidence he had heard “makes her guilt of these offences even more certain.” Two years ago, yet another appeal panel found ample basis for their former colleague’s ruling.

That’s twelve judges and one former one who’ve ruled Folbigg’s conviction safe, with no dissenters or doubters. Until now.

As he foreshadowed to Daley, Bathurst has told the state governor (a former head of the appeals court who had already pardoned Folbigg) that “there is reasonable doubt as to Ms Folbigg’s guilt” of each of her alleged crimes.

What created the doubt, according to Bathurst’s report, was new evidence that emerged just as the previous inquiry reported. Rather than supporting the finding that Kathleen Folbigg smothered her children, it showed that her two daughters shared a gene that could kill them. Other new evidence firmed up the likelihood that one of her son’s multiple afflictions also had natural causes. Bathurst accepted most, but not all, of this expert evidence.

Also presented was fresh psychological evidence about how to read diaries written by people under stress. Folbigg had written, for instance, of her husband’s “morbid fear” of their fourth child dying, “Well I know there’s nothing wrong with her. Nothing out of ordinary any way. Because it was me not them,” adding “I’ve learnt once it’s getting to me to walk away… With Sarah [her third child] all I wanted was her to shut up. And one day she did.” Bathurst said that these, and similar entries, were “evidence of self-blame” and concluded that the diaries contained no “reliable admissions of guilt.”

But it’s not only evidence that changes with time. As academic Emma Cunliffe details in her masterwork on Folbigg’s case, shared assumptions about multiple infant deaths have shifted with the decades. Once, those deaths were attributed to sleep apnoea, but then New York police investigated a family whose experience had been presented as key evidence of that theory and came away with the mother’s confession to five infant murders. Unsurprisingly, maternal suffocation became the preferred go-to, until the doctor who coined the term “Munchausen syndrome by proxy” was disgraced for giving bad statistical evidence in homicide trials. Folbigg’s misfortune was to be tried just before genes’ and trauma’s stars rose as explanation for such family tragedies.

Another change is simply that Folbigg’s trial is now much less recent. As anger, shock and memories recede and anticipated confirmations — confessions, revelations, similar cases — fail to materialise, space opens up for murderers to be unmade in the public’s mind. (Folbigg has long had champions including, startlingly, Alan Jones.)

Given the myriad possible explanations for the late turnabout in Folbigg’s case, I’m content to put aside the less palatable ones — medical fashion, malleable opinion, multiple wrong judges or jurors, or error on the part of Bathurst himself — and pin it all on the fresh evidence.

But there’s a further uncomfortable fact that Bathurst, Daley and others never mention, and that I’m not content to let slide: Kathleen Folbigg was unfairly tried in 2003, something New South Wales’s judges have known perfectly well for at least seventeen years.

Kathleen Folbigg’s two-month trial nearly collapsed in its second week. The trouble started when a new lawyer named Annabel dropped by to watch the proceedings and immediately recognised one of the jurors. She phoned a friend to confirm that her boyfriend was on the panel and then asked, “Did you know that was the case I was working on?” Annabel had done her student training at legal aid and had helped to prepare Folbigg’s defence.

It belatedly dawned on her that her phone call may have worsened the situation. Still worse, her friend had been part of her uni study group and may have been there when she described her work on the case. Worst of all, she might have told the group her personal view: that Folbigg was guilty as charged but shouldn’t be jailed. She promptly told the trial lawyers everything.

Folbigg’s prosecutor was dismissive — jurors often hear others’ takes in high-profile cases — but the defence fretted that Annabel’s opinions may be given particular weight. The judge, loathe to act on mere possibilities, opted to put the juror on the stand. He testified that he knew Annabel and about her phone call to his girlfriend, but, asked whether he had heard any of the lawyer’s opinions about the case, replied, “None whatsoever.” He was returned to the jury room with instructions to discuss the case with no one, including his girlfriend.

Justice Graham Barr made many decisions in 2003 that have aged well. Crucially, he barred all of the medical experts from opining on the likelihood of four natural infant deaths in a single family, restricting them to discussing each child individually. Bathurst ruled that Barr’s take matched the state-of-the-art medical thinking two decades later, and disclaimed the stance of then prosecutor Mark Tedeschi, who likened the defence case to a person being “hit by lightning four times.”

Tedeschi repeatedly tried to inform the jury of another startling fact about Kathleen Folbigg: that her father had killed her mother. The prosecutor initially said that it “provided an explanation for why the accused may have smothered her children.” Later, he claimed that it explained how Folbigg’s self-description in her diary as “my father’s daughter” amounted to a confession to the murders. Finally, he argued that the jury needed to know the history to understand her discussions about it with her husband and, later, the police.

Barr knocked back each of these attempts in turn, explaining that “the risk of misuse of the evidence is so great that I doubt whether any direction can obviate it.” This year, Folbigg’s ex-husband Craig complained that her troubled childhood was scarcely mentioned in Bathurst’s inquiry. He urged that it should be put in the report to the governor as evidence of his former wife’s possible inherited traits, mental illness and consciousness of guilt. Bathurst’s report dismissed this “rank speculation,” instead listing Craig’s unreliable trial testimony as a further reason to doubt the jury’s verdict.

It is a tribute to Barr that the courts have identified only one mistake he made: giving Folbigg too harsh a sentence. On the morning of 17 February 2005, the first three judges to review her case upheld her conviction but lowered her sentence from Barr’s forty years to thirty, leaving her eligible for parole in 2028. “Any person who was properly informed, sensible and thoughtful” would see how her “tragic background” — which effectively left her an orphan — “explains to some extent, although it does not excuse to any extent, how the crimes came to be committed.”

Barr’s excellent judging was something of a misfortune for Folbigg. A fair trial means a fair verdict. Or so it seemed that morning. That afternoon, Annabel emailed legal aid with some bad news about Folbigg’s jury.

Two brief court judgements are the only public insight into the flurry of behind-the-scenes events kicked off by Annabel’s email from early 2005 to late 2007. Even the judgements that emerged are unusual, because courts typically cannot rule on evidence that emerges after (here, hours after) a convicted offender loses her first appeal. Bizarrely, a missing staple on her court file allowed an exception in Folbigg’s case.

Thanks to the missing staple, we know that Annabel’s email recounted how a juror she “knew” had told her that “one of the jurors had researched Kathy’s history etc on the internet” during the trial. A year-long court-ordered investigation followed. Thanks to the rules protecting jurors and their deliberations, the only public outcomes of that investigation are terse summaries of “two instances of potential irregularity in the conduct of the jury trial.”

One involved the fact that some of the infants’ bodies were warm when paramedics arrived. The jurors were curious about how long bodies stay warm, and one asked a nurse friend. Such inquiries are forbidden, but the court ruled that, luckily, what the jury was told — that bodies stay warm for quite a while — helped the defence.

The other irregularity was far more serious. A juror googled “Kathleen Folbigg,” read “several related sites” and told others what they said: that Folbigg’s father killed her mother when Folbigg was an infant. This discussion happened early in the trial, while Tedeschi tried and Barr refused to let the jurors know this very fact, blissfully unaware that their debate was moot.

The jury verdict would also be moot unless the court was “satisfied” that what the jury discovered had not affected their verdict. And here’s where the story took another turn.

Chief judge Peter McClellan explained the appeals judges’ take in a single paragraph:

Even though the appellant was the child of a person who killed another I do not believe there was any likelihood that a juror would reason that it was more likely that the appellant would kill her own children. The killing of a spouse may tragically occur in circumstances of the breakdown of a relationship or be occasioned by temporary loss of control accompanied by a violent and fatal act. The circumstances and motive for the killing are likely to be quite different from those which will exist if a mother has killed her own children. There could be no suggestion that the killing of the appellant’s mother by her father indicated any tendency in the appellant to kill her own children. In my judgment the knowledge obtained by the juror did not lead to a miscarriage of justice.

Judges Carolyn Simpson and soon-to-be-High-Court-justice Virginia Bell agreed without comment. The panel, satisfied that the juror’s research hadn’t affected the jury’s verdict, dismissed Folbigg’s second appeal and caused her to spend sixteen more years in prison.

There is no nice way to say this: what the court says here is wrong. It’s possible that the sheriff’s investigation turned up a quite different reason to be satisfied that the jury’s verdict was unaffected by the learning about Folbigg’s childhood, but the reason the court gave — that the jury would have simply shrugged and ignored it — is ridiculous.

Don’t just take my word for it. Take the word of prosecutor Mark Tedeschi, who argued that the jury could use the information to apply “the attachment theory, which is that children who have gone through the sort of early life that this accused went through may have difficulty themselves bonding with their own children.” Or trial judge Graham Barr, who acknowledged that the family history had “substantial” value in interpreting Folbigg’s diary, but that that still did not outweigh “the danger of unfair prejudice.”

Or why not appeal judge Peter McClellan? A decade after ruling on Folbigg, he headed the royal commission into institutional child abuse. There, he wrote eloquently about how “adverse childhood experiences can negatively influence a person’s emotional, social and cognitive development.” But he also bemoaned the “misconception… that victims of child sexual abuse go on to sexually offend against children themselves,” a conception sadly voiced by some victims when they privately confessed their own crimes to the commission.

My point, of course, isn’t that Folbigg’s history casts light on her guilt or innocence. Rather, it’s the possibility that one or more jurors may have seen such a link themselves, much as her ex-husband and others did. Or, as Barr feared, that one or more of them might have somehow irrationally judged her for her father’s crimes. I struggle to imagine why the appeal judges couldn’t imagine these possibilities.

Indeed, I have a further, more speculative worry, based on what Folbigg wrote in her diary between the death of her third child and the conception of her fourth:

I’m ready to continue my family time now. Obviously, I’m my father’s daughter. But I think losing my temper stage and being frustrated with everything has passed.

Craig Folbigg, the police and Tedeschi all thought the middle sentence was a confession to a homicidal temper. Barr ordered that it be whited out in the jury’s copy of the diary, and belatedly told Tedeschi not to mention the word “But” either.

But I fear that the jury could well have puzzled out what was behind the white-out, for two reasons. First, Craig Folbigg himself blurted the hidden sentence from the diary to the jury in the trial’s first week, the same period when one juror turned to Google. And, second, they were highlighted in pretrial articles about the case, ones that also reveal the history that juror found via Google. This makes it possible that Folbigg’s jurors in 2003 may have mimicked the very moment in 1999 when Craig Folbigg says that he started to think his wife was a murderer.

Fortunately, there’s no need to dwell on whether Folbigg’s seventh, eighth and ninth judges were wrong, any more than whether the other ten were wrong. Nor is there any need to engage in some undoubtedly uncomfortable speculation about why. Instead, as of this week, we can let all of that slide.

Just as evidence, and our takes on it or particular cases shift with time, so do courts’ takes on what is, and isn’t, a fair trial.

Juror research was once a matter of jokes, shrugs and warnings, but now it’s a crime in most parts of Australia. And, just this week, Australia’s High Court ruled that the past approach of the NSW courts to juror misconduct, including the test applied to dismiss Folbigg’s appeal, was wrong. Rather, when jurors knowingly disobey a judge’s direction, other than a trivial one, it will always be a miscarriage of justice.

The case before the High Court, like Folbigg’s, involved the discovery, after a trial, that one juror had searched the internet early in the case and had told the others what he found. The majority’s new test in such cases is to ask whether a layperson might reasonably apprehend that any juror might, as a consequence, not have decided the accused’s guilt on the evidence, according to law. If so, the majority declared, the trial would be “incurably flawed.”

The majority went on to rule that the new test wasn’t met in the case before it, but only because the juror had searched for information about how crimes are sentenced rather than about the accused or the case or the rules of proof. That was still wrong, they said, but it simply wasn’t clear either way whether the juror (and the other jurors, who didn’t report him during the trial) realised it was wrong.

Last year, I said much the same about the juror who brought an academic article about false rape accusations into a jury room, perhaps in the belief that such general research was allowed. Cases like these sharply contrast with what Folbigg’s juror did, specifically googling her name, reading websites about her case, and telling other jurors what was there. There is no way that could pass muster after this week.

Again, you don’t have to take my word for it. The other two judges in the High Court case, James Edelman and Simon Steward, who would have sent the case before them to a lower court for a rethink, decided to illustrate why the previous New South Wales approach was so dangerous. The example they chose was Folbigg’s appeal, during which, they said, the appeal panel “applied the wrong test,” “placed itself in the position of the jury” and “effectively reversed the usual onus.”

This step — effectively becoming the fifteenth and sixteenth judges to weigh in on Folbigg’s convictions — is extraordinary. It is also, surely, no coincidence that it comes after Bathurst’s report, which should be prompting many Australian judges to wonder what went wrong in that particular prosecution.

This week, three more NSW judges — the seventeenth through nineteenth, by my count — will be asked to weigh in on Folbigg’s conviction. Although Folbigg is out of jail (and cannot go back), she remains a convicted child murderer, unless and until a court holds otherwise.

Bathurst referred Folbigg’s case back to his former court so they could explore the same issue he’d decided: whether or not there is reasonable doubt about her conviction. But there is no need for the new court to, yet again, weigh up all of the evidence for or against.

The new judges can, and should, simply quash her jury’s verdicts because her trial was unfair, as their predecessors should have done sixteen years ago. •

The post Judging Kathleen Folbigg appeared first on Inside Story.

Many politicians and public servants have described to me his rare magic in combining academic rigour with clear communication and a talent for finding a cut‑through line. His retirement this year is a good excuse, if one were needed, to talk about tax reform, the subject of his major academic and policy contributions. Indeed, his research and writing read like a tax reform to‑do list.

Pick up the Financial Review on any given day and you’ll find opinion pieces grounded in John’s decades-long efforts to unpick the efficiency and equity impacts of different tax reform options. He has also made the case for these reforms directly to government as a consultant to the Henry tax review, on the review panel of the NSW Federal Financial Relations Review and in other forums.

And while he has done the hard work of tilling the ground, and has no doubt been pleased with some of the progress made on tax reform, much of the broad agenda he has articulated remains on the shelf.

The question is: why? Why, after so many decades of discussion and so many points of broad economic consensus, does tax reform remain so challenging? Is progress possible or is tax reform simply an impossible dream?

To answer this question, we need to first understand why someone with John’s rare talents decided to use them to make the case for tax reform. The bottom line is that tax matters. It matters to all of us: how much we collect and how it’s collected have implications for economic activity, governments’ capacity to deliver services, and levels of inequality.

One challenge we face when we talk about tax reform is that different people start with very different objectives. So let’s unpack some of those.

The first is economic efficiency. Economists rightly focus on the fact that how we collect tax — that is, what we tax and how much — affects the “economic drag” created by the tax system. Almost all taxes come with some loss of welfare, but some drag on growth more than others.

In a static sense, this can be measured by the “marginal excess burden” — how much economic activity is lost for every dollar collected. As Treasury and others have reminded us, this varies significantly between taxes.

But while there can be big differences in the estimates different modellers come up with, they broadly agree that a tax-mix switch from higher-burden to lower-burden taxes would deliver an economic dividend.

The most clear-cut example is a move from stamp duties to taxes on land. Stamp duties are among the most inefficient of taxes. Treasury estimates suggest that every dollar collected can reduce economic activity by up to 72 cents. Stamp duties discourage people from moving to housing that better suits their needs, and sometimes discourage people from moving to better jobs. Overall, they distort choices and gum up the economy.

Another reason we might advocate for tax reform is to make government budgets sustainable and future‑proof our tax system. At a time when the treasurer has just delivered the first budget surplus in fifteen years and we are seeing apparently endless revenue “upgrades,” it may seem strange to be having this conversation right now.

But government spending overall is projected to average 26.4 per cent of GDP over this period — compared with less than 25 per cent over the three decades before Covid — and revenues have not kept up. The federal government’s latest Intergenerational Report reminds us that the ageing population and the fallout from climate change will only see this fiscal challenge grow over the next forty years. The same is true of state budgets.

The implications of not taking policy action are clear: we are asking future generations to bear the costs of today’s inaction.

Governments have three levers they can pull to tackle long-term budget challenges: they can make economic reforms to “grow the pie,” they can increase taxes and they can reduce spending.

Pursuing policies to boost growth is critical. Much of Grattan Institute’s work has focused on this first lever. And I look forward to pursuing this in a big way when I join the Productivity Commission in a couple of weeks’ time. But, as Grattan highlighted in our Back in Black? report earlier this year, we can’t rely on higher growth alone to close the budget gap.

Given the scale of the challenge, governments will also need to find ways to reduce spending and/or boost revenue. After a decade of looking at this challenge I have come to the view that we will need to do both. The scale of the challenge, and the greater buy‑in that can come when the costs are spread across the population are arguments for looking to both sides of the budget for answers.

If we do accept that some additional revenue is needed to respond to the structural challenge outlined, then we want to make sure that additional revenues are collected with the lowest possible economic costs. In fact, this can also help us grow the pie: more efficient, less distorting taxes are one of the Productivity Commission’s “enduring policy priorit[ies]” for productivity growth.

On the other hand, if we do nothing, we may end up on the path of least resistance: collecting ever-more revenue through ever‑creeping taxes on wage and salary earners. Bracket creep may be the most politically painless way to raise revenues, but it is far from the best.

Tax reform for budget sustainability should aim to broaden the base of income taxes — looking at loopholes and overly generous concessions as well as orientating our collections towards more efficient bases such as consumption, wealth, externalities or resource rents. In other words, we need to revisit the John Freebairn back catalogue.

The atrophying of tax reform in recent decades might make us pine for a golden era. In truth, though, tax reform has never been easy. So let’s take a short history lesson — five decades of tax reform in five minutes — and see what we can learn.

Let’s start in 1975. Many elements of our tax system today can be traced back to the 1975 Asprey tax review. This comprehensive, independent review was commissioned by the McMahon government in response to concerns about bracket creep and tax evasion. (Sound familiar?)

The review outlined the basic principles of efficiency, fairness and simplicity that remain our lodestars and made the case for many aspects of the system we have today, including fringe benefits tax, capital gains tax and a broad-based consumption tax.

But the report initially had little impact. Landing in the final, tumultuous year of the Whitlam government, it was written off in the media as a “tax flop,” and its main recommendations not adopted.

It took another decade for momentum to build. In 1985, fresh off the Prices and Incomes Accord and the floating of the dollar, prime minister Bob Hawke and treasurer Paul Keating turned their attention to tax reform. They released a draft white paper on reform options and hosted a tax summit with unions, business and community groups.

These processes resulted in the adoption of some of Asprey’s recommendations, including a capital gains tax, negative gearing reform, fringe benefits tax, dividend imputation and taxation of foreign source income.

But it was a case of “two steps forward, one step back.” A broad-based consumption tax was central to Keating’s original vision but failed to win support and was dropped. And the pioneering negative gearing reforms were repealed two years later.

So the Asprey blueprint was partly implemented. Another long reform slumber followed. The next big push was John Hewson’s Fightback! platform for the 1993 election, which proposed, among other things, a broad-based consumption tax. Fightback! proved to be a false start — Hewson lost the “unlosable” election — but consumption taxes were back on the agenda.

Another six years had to pass for the reform dream to become reality. Prime minister John Howard took a proposal called A New Tax System, which included the GST, income tax cuts and the abolition of a host of inefficient state taxes, to the 1998 election. He narrowly won and the legislation ultimately passed in 1999, twenty-four years after the release of the Asprey report.

We’ve seen precious little in the way of significant, lasting tax reform since then. The landmark Henry review is close to celebrating its fourteenth birthday with most of its meaty recommendations untouched. State and territory tax reform has also, mostly, been a non-starter, despite a succession of reviews converging on similar recommendations.

So what should we take from this history? What can we learn from those rare moments when we managed to overcome the many barriers I outlined before? I see four key steps for would-be reformers.

Step 1: Put reform on the agenda

History shows that an external push is often needed to put tax reform on the agenda. In 1985, fears about Australia’s economic decline and resentment about tax avoidance pushed the discussion forward. In 1997, the High Court’s decision to strike down a key state tax left a significant hole in the states’ budgets and opened the reform window for the GST.

The optimist in me can’t help but draw parallels with last month’s High Court decision to strike down Victoria’s electric vehicle levy. Perhaps we might have another golden opportunity for a grand intergovernmental tax reform bargain on our hands?

Tax reform was hardly on the radar for the Howard government until civil society groups — representing both social services and business — started championing the cause. The Australian Council of Social Service and the Australian Chamber of Commerce and Industry, in particular, pushed in a coordinated way, culminating in the National Tax Reform Summit in 1996. The strong and united messaging put the GST and tax reform firmly back on the political agenda.

Today many groups feel similarly. Federal independent MP Allegra Spender has been spearheading a push to unite academic, business and civil society leaders to build some consensus on the need for tax reform and the way forward.

Step 2: Build a coherent package

While rewriting thousands of pages of the tax code at once would be a recipe for chaos, relying on incremental changes is probably not going to get the job done either.

History shows that reform packages can work well. In 1985, reforms that broadened the income tax base were bundled with income tax rate cuts and tax avoidance measures — a coherent story to sell to the public. In 1999, removing narrow and inefficient, but lucrative, state taxes and widely variable wholesale sales taxes made sense in the context of the broader GST deal shoring up state budgets.

Packages provide the opportunity to dull the sting of reform by sharing the costs more broadly and perhaps offering some compensation to the losers.

The major tax reforms of the past two decades have come at an upfront cost. The GST package overcompensated households by about $12 billion a year, through personal income tax changes and increases to pensions and family payments. This was a key part of its sales pitch. Former Treasury secretary Ken Henry recalled that:

the distributional tables outlining the impact of the GST were the most “thumbed” part of the documentation, certainly by those Treasury officers answering phone queries. Of course, it helped that every individual and family represented across all income levels appeared better off.

Compensation packages are particularly important where there are equity implications for lower-income households. Australians tend to reject reforms that seem unfair. But, crucially, potentially regressive reforms, such as broadening the base of the GST, can form part of larger, fairer reform packages. For example, the carbon tax package involved substantial assistance for households, particularly lower-income households, to address concerns that poorer households would be particularly affected by higher energy and food prices.

Given the long‑term budget challenges, high‑cost packages of the type needed to ensure there are “no losers” from tax changes are difficult to justify. But it is certainly possible to design packages with much lower upfront costs that still compensate vulnerable households. For example, Grattan’s previous work on the GST proposed a revenue-positive package, with a 15 per cent GST, cuts to income taxes, and an increase in welfare payments, that would leave the lowest 40 per cent of income earners better off on average.

Packages might also help address some of the other political economy challenges of reform. Ironically, opening up more fronts in the tax debate may quiet some of the more over-the-top reactions. As Ken Henry has argued, “if you give a lot of well-armed people only one target to shoot, it will take a pounding. Incrementalism sets up a single target on a battlefield occupied by well-resourced attack forces.”

And while my goal here is not to opine on the “what” of tax reform, let me give a sense of some of the types of packages that a government could put forward.

• On income tax reform, we could return to the logic of 1985: broadening the income tax base by winding back loopholes and overly generous concessions, to support a cut in rates. This could include targeting discretionary trusts and super tax concessions, or reforming capital gains tax — either by reducing the capital gains tax discount or returning to the indexation of gains.

• Another package could tackle the inconsistent tax treatment of different savings options, to reduce the distortion in savers’ choices and simplify the system. This would mean lower taxes on interest from bank accounts and bonds, and somewhat higher taxes on other savings vehicles such as superannuation (which is very lightly taxed even after accounting for the long holding periods). An even “bigger bang ” version would be a dual income tax where income from savings is taxed at a consistent low rate, regardless of source.

• On the corporate tax front, we could better tax resource rents to fund a company tax cut. We could also consider more wholesale reforms such as an allowance for corporate equity or a cash flow tax.

• For states, inefficient stamp duties could be swapped for land taxes over time, along the lines of the ACT government’s gradual phase-in or Victoria’s switch for commercial and industrial property.

• In transport, distance-based congestion charges that vary by location and time of day would be a more efficient replacement for the declining fuel tax base.

• Finally, to aid the climate transition, the government could substantially expand and strengthen the safeguard mechanism, while eliminating many higher-cost interventions to reduce emissions, such as the fringe benefits tax exemption for electric vehicles. The package would deliver both faster and lower-cost emissions reduction.

But while packages make a lot of sense, would‑be tax reformers can’t be too purist. Incremental changes in the right direction are still an improvement on the status quo, and in some cases these more incremental steps can ultimately take us towards more comprehensive packages.

Step 3: Embrace the “vomit principle”

The next step is making a compelling case for change. Complicated reforms that can’t be explained are unlikely to win support, and are more vulnerable to scare campaigns. We saw this in 2019 with the confusion about franking credits — irredeemably branded a “retirement tax” — and in 1993, when John Hewson’s tortured explanation of the effect of a GST on the price of a birthday cake helped turn the tide of popular opinion against the new tax.

Convincing the public of both the necessity of change and the proposed solution takes time and political capital. Howard and Costello spent two years and a lot of political energy highlighting the structural problems with Australia’s tax base prior to releasing their reform package in 1998.

While no one likes to pay extra tax for the fun of it, many are more inclined to agree when higher taxes are linked to better services. The proportion of Australians favouring “less tax ” has declined since the late 1980s, according to the Australian Election Study, and the proportion preferring “more spending on social services” has risen. At the time of the 2022 election, 39 per cent indicated they would prefer less tax, 31 per cent more social spending and the remainder said “it depends” — presumably on the nature of both the tax and the spending increases.

My reading is that when our political leaders do the work of tilling the ground and explaining changes and why they are needed, then hearts and minds can shift.

A more recent example, albeit one contrary to received wisdom, was the then‑Labor opposition’s 2016 policy to wind back negative gearing and reduce the capital gains tax discount. We have already discussed some of the public challenges that reform faced, but it is also worth remembering that negative gearing had formerly been viewed as a “political untouchable.”

Indeed, since the Hawke government lost its nerve and reversed its decision to wind back negative gearing in 1987, it has been considered the “sacred cow” of Australian politics. When Labor announced it would introduce these changes to improve housing affordability and contribute to the budget bottom line in 2016, just over a third of Australians supported removing or limiting negative gearing.

But, over time, as shadow treasurer Chris Bowen and others made the case, support gradually increased. Support for limits on negative gearing climbed almost 10 percentage points, from 34 per cent in March 2016 to 43 per cent in December 2018. By the time of the 2019 election, the Australian Election Study estimated that 57 per cent of Australians supported limiting negative gearing.

To me this is a textbook example of what some political strategists call the “vomit principle ” — repeat something until you feel like you are going to vomit. Only then are you cutting through.

Labor has since dropped the policy, of course, and many reading the media commentary would have gained the impression that the tax reform agenda was deeply unpopular and “to blame” for Labor’s surprise election loss in 2019. The reality was far more complex.

In any case, it’s not just down to politicians to argue for reform. Successful tax reforms need a diverse cheer squad. Historically, academics, premiers, public policy institutions, and community groups have all been important advocates for tax reform. Providing incentives for academics and non-profit organisations to participate in public debate would be a useful step to building these coalitions today.

Step 4: Make it stick

Somewhat dispiritingly, even after these hurdles have been overcome and tax reform has been passed, the job isn’t done. Tax issues tend to linger on the agenda, often for entire parliamentary terms, and reforms sometimes don’t stick. As we’ve just seen, negative gearing reforms were undone after just two years in 1987. The carbon tax and mining tax were repealed. The Perrottet government’s hesitant steps towards stamp duty reform were wound back by the new NSW Labor government.

But in other cases the controversy does die down after reform is enacted. Sometimes social norms change quickly — for example, in Stockholm, congestion charging was much more popular after it had been implemented than before, and many people did not even remember that they once opposed the idea.

In Australia, plenty of tax changes that were controversial at the time — the GST, fringe benefits tax, capital gains tax — are now so entrenched that there is no constituency or any visible public appetite for their removal.

Reforms are more likely to stick if they create positive feedback loops — for example, if they result in institutional shifts, if reform winners can be used as advocates, or if businesses make big investments under the new regime. Taking the GST as an example, the Australian Taxation Office and businesses made significant investments in the infrastructure for administering the new scheme; and the changes to federal financial relations created a key constituency — state governments — who had a strong interest in its continuation.

What are the prospects for tax reform? I, for one, remain optimistic.

First and foremost, I don’t think we have much choice. The slow‑burning platform is still on fire, and over the coming decade the gap between our spending needs and our tax system’s capacity to meet them without ever higher taxes on employment income will be stretched to breaking point.

More and more questions are being raised about the sustainability and intergenerational fairness of our current tax mix. Without action, expect them to get louder and louder over the coming decade. Tax must also come into the conversation if we are going to deliver our policy objectives in other areas, including the green transition.

Second, I am confident that our leaders can make a positive case. While I have focused on the challenges, I am also heartened by the leadership we are seeing on difficult reforms in other areas.

Over the past three months the Commonwealth and state governments have made strong commitments to boost the supply of housing through politically challenging reforms to planning laws. If they can pull it off, this would be a huge economic and social reform, and one that has been in the too-hard basket for many decades.

As a reform proposition, making the case for greater housing density is probably of the same order of difficulty as making the case for major tax changes, and yet we are seeing both levels of government go after it in a big way.

Third, I think there is appetite across a broad swathe of interested parties to shift the dial. Allegra Spender’s tax reform round tables suggest at least a consensus among business, academia and civil society that something needs to change, even if there is not yet broad agreement on the reform priorities. A process to harness this agreement, ideally led and shaped by government, could help move the conversation forward.

Finally, I have confidence in the Australian people to see through the noise. Scare campaigns and a shouty media are one thing, but if state and federal governments can hold their nerve in the rule in/rule out game long enough to make a positive case for change, and keep making it, history shows that people can be brought along.

Tax reform is hard, but it’s not impossible. It’s time we woke up from our slumber and became a little less afraid and a little more Freebairn. •

This is an edited version of this year’s Freebairn Lecture, delivered at the University of Melbourne last week. The full lecture, with charts and footnotes, is here.

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This split, he believes, is “a threat to a cohesive and successful Australia as it tries to adapt to the globalised economy.”

Wait, apologies, I jumbled my notes. That was Kelly after the 1999 vote on the republic, a cause he was very much in favour of.

This time round his columns have run passionately against the proposed Voice, and his tea-leaf reading of very similar voting patterns — the Yes vote fading the further from CBDs — sits on a much more ideological plane.

Once again the big No vote points to a “divided nation,” but now the goodies and baddies are very clear. That “confident, educated, city-based middle class” cohort has become something malignant, purveyors of “progressive sophistry” and “progressive values” and “experiments… tampering with the once accepted but now eroding universal norms that defined the Australian nation.”

The fourteenth of October, to underline the point, was a “repudiation of elite morality and assumed moral superiority.” On and on Kelly goes, for more than 2300 words; quoting various “experts” to categorise this as our Trump/Brexit moment, the revenge of everyday, ordinary citizens tired of being scolded and looked down on.

The Professor has been castigating “elites” (with all the unacknowledged irony this encompasses from a person of his means and position) since at least the late Howard years, but whereas the group once largely consisted of inner-urban Labor and Greens supporters working in academia and the arts, big business — with its public pronouncements in favour of marriage equality and tackling climate change — seems also to now stand in Paul’s naughty corner. “Elite(s)” appears no less than seventeen times in last month’s tirade, along with thirteen mentions of “progressive(s).”

That pattern of higher support in the inner city ebbing lower as you approach the bush can actually be observed in every referendum this side of Robert Menzies’s attempt to ban communism in 1951. It was more pronounced in the 1999 vote (both for the republic and for a new constitutional preamble) and more pronounced again in 2023.

A Labor–Coalition city–rural split has also been growing at general elections, reaching its apogee in May last year. There is change afoot in the electoral arena, and it is also seen dramatically in the ever-plummeting support for major parties.

Kelly’s bitter deep dive is worth citing because it conveniently contains most elements of the gloating-dressed-as-analysis that has emerged from the No-supporting commentariat. Even more than most political journalists, he seems to be a hostage to the present, inhaling the current zeitgeist and reciting it with deep meaning and drama — and often at great length.

So what does the 40–60 Voice outcome tell us about the country? That Australia is racist? Or colour-blind? Or doesn’t like elites?

I don’t think this result should change or even reinforce anyone’s opinion about the nature of this country. Instead it verifies that Australians can be relied on to bury Labor government midterm referendums, regardless of the topic. Set your watch by it: early opinion polling shows overwhelming support; Liberal leader eventually opposes (because to do otherwise would be professionally fatal); the government, encouraged by the polling, still presses ahead. Then it all becomes an orgy of scarifying tales about the danger of messing with the Constitution — the blueprint of this country, the envy of the world. Former judges are exhumed to warn of the risk. Why are the government and its mates so desperate to do this? They’re spending how many millions on it? Such self-indulgence, such arrogance, who can resist reminding them who’s boss?

With counting over, the Voice slots in fourth out of Labor’s eleven midterm attempts to change the Constitution since federation. That’s not particularly bad.

What does set this vote apart is its makeup. Last century, decent statistical correlations could be observed between Labor two-party-preferred support at the previous election and Yes votes. Traditional high-income Liberal electorates reliably took their party’s cue and joined outer-suburban and regional Coalition supporters to deliver, overwhelmingly, above-average Nos.

This time around, that high-income territory is mostly in teal hands (but the locals still vote Liberal over Labor in two-party-preferred terms), and those electorates voted a higher-than-average Yes. It was much like the republic vote, when they could still be loyal Liberals by siding with treasurer Peter Costello rather than prime minister John Howard.

This change in behaviour in the former Liberal heartland was a major driver — perhaps the major driver — of the record city–bush divide.

That might have been because, as Kelly writes, the Voice was seen as a “moral” issue. How might a referendum on something mundane, like recognising local government, have gone? As a Labor midtermer it would have been thrashed, but would it have exhibited those heightened geographic differences or settled back to something more predictably partisan?

Kelly was just as strongly against marriage equality, and that 2017 survey also exhibited the city-to-bush pattern (overlaid by outsized No votes in some suburban electorates with high numbers of people from non-English-speaking backgrounds), but the overall outcome, a big win for Yes, precluded triumphalism. On that occasion, the elites were apparently vindicated.

There is one other tendency in the recent analysis, and not just on the No side. Some people see the referendum as an electoral test failed by the Albanese government. It was so out of touch on this issue, can it recover?

The vote has certainly brought Anthony Albanese, who evidently believed his special skill set would bring this home, thuddingly down to earth. It’s damaged him in the eyes of the political class — they will no longer marvel at his prowess — but does that matter in the long run? Probably not; he had to get real sometime. It was something people were forced to vote on, a tenth-order issue for the overwhelming majority, and won’t feature at all in the next campaign. There’s nothing in the historical record to suggest referendum losses portend the same at subsequent elections.

Kelly was at it again last week, presenting a strategy for Peter Dutton’s path to the Lodge — courtesy of the Voice vote. Acknowledging that it “is easy to exaggerate the meaning of the referendum,” he proceeded to do just that, finding in it a “strategic pathway” for the opposition and piling on advice for the Liberal leader’s “approach post-Voice.”

The old pro-business warrior now sounds decidedly blue Labo(u)r (or should that be “populist”?): companies get a serve for “defending their economic bottom line while doubling down on their promotion of social and environmental values.”

That tedious old chestnut, Menzies’s “forgotten people,” gets an awfully long workout in the context of an imaginary two-term strategy for Dutton, à la (without mentioning him by name) Tony Abbott. Back on terra firma, Dutton will be lucky to survive for just one term as opposition leader, let alone two. •

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It’s almost a decade since I wrote those words in the Medical Journal of Australia — and yet, despite a succession of papers, reports and policy proposals, surprisingly little progress has been made. The consequences, and the dollar costs, of poor oral and dental health, often preventable, continue to drag on the community.

It’s well recognised that dental decay and tooth loss can cause pain, problems eating and speaking, and loss of self-esteem. But poor oral health is also linked to heart disease, diabetes, stroke, pneumonia, autoimmune diseases like rheumatoid arthritis, chronic kidney disease, dementia, low-birthweight babies and more. In older people it is associated with a greater risk of all-cause mortality.

Apart from poor dental hygiene, oral ill-health can be brought on by certain medical conditions and treatments, including diabetes, HIV/AIDS, osteoporosis, lupus, Sjögren’s syndrome (dry mouth), chemotherapy and radiotherapy, and a range of medications.

Dentists play a key role in screening for oral cancers. While these cancers are more common in older smokers, recent research shows an increase in diagnoses among young Australians without identifiable risk factors. In particular, the number of women under forty-five diagnosed with tongue cancer is rising significantly faster than for women over forty-five and men.

For those reasons alone, better integration of dental and medical care should be a priority. Many patients with coexisting medical and dental issues require multidisciplinary care plans involving doctors and dentists. Collaboration of this kind improves the quality of care and its results, including patients’ quality of life.

Given the costs (to both the healthcare system and patients) and the consequences of a failure to better integrate dental and medical care, increased access to affordable dental services should be a particular priority. This need could and should be considered separately from the provision of universal dental care: it goes beyond the preventive and early-intervention measures that ensure a healthy smile to the health of the body as a whole.

The current system’s failures are especially pronounced for two categories of patients: those with congenital heart disease, or CHD, and those with cancer, especially cancers of the head and neck. Patients with CHD and gum disease are particularly at risk. The bacteria that cause gum disease can cross into the blood stream, enter the heart chamber and directly infect the valves. These patients need special care for even the simplest dental procedures, and additional screening and safeguards before any surgery.

A German study published in 2022 found that children and teenagers with CHD were significantly more likely to experience dental decay and inadequate dental hygiene. This may be because their regular hospitalisation is interfering with normal dental check-ups, a deficiency exacerbated by a shortage of experienced paediatric dentists.

There’s no reason to believe the situation is any different in Australia. While national data are lacking, the paediatric dental team at Westmead Children’s Hospital found that about 27 per cent of children with CHD had a history of dental infections. The cost of extractions (the majority of services) and restorations under anaesthesia for these children is substantial: the mean number of days in hospital was 1.43 and the mean cost was  $4395 per child treated. The paper makes the point that clear referral pathways to dental care are a key need for children with CHD.

Richard Widmer, the leader of the team, told me that he and his colleagues often spend many hours and thousands of dollars on dental care before Westmead’s patients, often from regional and rural New South Wales, can get the operations they need. This is a potentially avoidable burden on the public health system and obviously distressing for the children.

A witness at the current parliamentary inquiry into dental services described how a patient at St Vincent’s Hospital in Sydney had a left-ventricular assist device implanted at a cost of more than $150,000. This life-saving work was almost undone because his poor oral health, which was not assessed before the operation, caused a life-threatening infection. The patient needed costly intensive care and further surgery.

Cancer patients — especially patients with head and neck cancers — also need special attention. They often have poor dentition to start with, have faced surgery, chemotherapy and radiation therapy, and must then manage chronic dental problems that frequently worsen over time.

Nectarios Andrews, a dentist who works with multidisciplinary head and neck teams at several Sydney hospitals, describes the people he works with as the “most vulnerable of patients” who have “already battled a cancer diagnosis [and] are too often doomed to a life of devastating dental pathology with crippling functional and emotional outcomes.”

New technologies and techniques are delivering remarkable results for these patients. Jonathan Clark’s team at Chris O’Brien Lifehouse in Sydney has a dedicated craniomaxillofacial reconstruction program that combines advanced reconstructive surgical techniques (using dental prosthetics produced by 3D printers) with virtual surgical planning (where the surgery is digitally simulated to increase the accuracy of reconstructive surgery). Evidence suggests these procedures deliver clinical benefits and increased rates of dental rehabilitation, leading to improvements in key health-related quality-of-life outcomes, including speech, aesthetics, swallowing and eating.

Too often, though, the amazing multidisciplinary treatment and care delivered to these patients in (mostly public) hospitals can’t be completed because specialised dental services are lacking. Hospital-based dental services are only available for low-income healthcare card holders and most patients with head and neck cancers can’t afford private dental care that can cost as much as $100,000 beyond what is covered by health insurance. Some patients have very complex requirements for which general dentists are neither trained nor equipped.

As impressive and affordable as the work is at Chris O’Brien Lifehouse, only one-in-ten patients are dentally rehabilitated following oral cancer surgery. New public and private funding options are needed to improve patients’ access to these services. As it currently stands, many patients come through extensive surgery and treatment for oral cancers only to face poor quality of life because they can’t get access to dental prostheses and ongoing dental care.

Better links between oncology, hospital-based dental services and private dentistry are also needed. Dental information is shared in some but not all cases to assist dentists looking after these patients in the community, but dental records are excluded from My Health Record. This information is crucial: cancer patients who have had, for example, extensive radiation to their jaw are at risk of poor healing after dental extractions.

Australia’s National Oral Health Plan 2015–2024 identifies four priority population groups with relatively poor oral health and inadequate access to care. These include people with additional and/or specialised healthcare needs, a category that covers most of the patients described above.

The parliamentary committee’s interim report makes mention of the need for greater coordination between medical and dental services. It quotes one witness stating that “preventing (oral) infection is a medically necessary service and therefore essential health care” (emphasis in the report).

Peter Foltyn, a consultant dentist at Sydney’s St Vincent’s Hospital, is quoted as recommending that any oral and dental health services needed before medical treatment should urgently be integrated into the Medicare Benefits Schedule, or MBS, and that medical undergraduate training should include education on the important relationship of oral health to systemic health.

If they meet certain requirements, dentists already have access to a number of MBS items. These include items for multidisciplinary case conferencing and the preparation of treatment plans for cancer patients; consultations (including telehealth) for oral and maxillofacial patients; and assistance at operations. But no analysis of the use of these items is publicly available, and they apply only to services delivered either in the community or to private patients.

Even if new Medicare items and increased funding for public services were provided tomorrow, little will change for patients unless and until medical and dental cultures change and professional siloes are broken down. This has been done successfully in other medical settings — mostly in multidisciplinary cancer teams — but this kind of integration needs to be universal.

The key barrier is medicine’s and dentistry’s distinct education systems, clinical networks, records, and funding and insurance arrangements. Necessary changes would include interdisciplinary education, shared training, and a recognition that dental services are an integral part of primary care and essential for the treatment of some medical conditions.

An article published  several years ago in the Australian Journal of General Practice did an excellent job of exploring the history of the medicine–dentistry divide and the challenges it creates, and suggested how these might be tackled. Its authors made a strong case that education is the place to start.

A 2018 study of the hours dedicated to oral health education in medical schools in Australia highlighted that imperative. It showed that Australian medical school graduates have little if any foundational knowledge of oral health, including dental caries, oral cancer, dental emergencies, and the relationship between diabetes and periodontal disease. Only a few hours in multi-year programs were dedicated to teaching these topics, and no medical school reported hands-on training in an oral health setting.

We can hope that things have changed since that study was published, but only an optimist would believe that the shift has been sufficient to overcome the current siloes.

It’s time for the federal government to make the system changes and introduce the financial incentives across both the public and private sectors that will push medicine and dentistry into a partnership to improve health and health outcomes for all Australians, starting with those most affected by poor dental and oral health. •

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Often acerbic and sometimes irascible in public, Hayden had a fine sense of humour, a passion for political intrigue and a liking for journalists. As Geoff Kitney noted in a tribute in the Australian Financial Review, he loved to hear and trade gossip, preferably salacious.

After a tour of the private quarters of Ferdinand and Imelda that day in 1986, Hayden emerged to present us newshounds with a global scoop. Imelda might have been famous for her vast wardrobe of shoes, but she also had another collecting passion. Her rooms, he gleefully reported, contained a formidable stash of pornographic cassette tapes.

Hayden is mostly remembered as the Labor leader whose keys to The Lodge were snatched by Bob Hawke; as the fleeting but steadying treasurer in the last inglorious days of the Whitlam government; and as a principal architect of Medicare and the landmark economic reforms of the 1980s. He should also be celebrated as one of Australia’s most determined and effective foreign ministers.

When he fell on his sword, enabling Hawke’s unstoppable ascendancy to the Labor leadership to go unchallenged on the cusp of the 1983 federal election, Hayden had already anointed Paul Keating as the next treasurer and instead took foreign affairs as his consolation prize.

In his five years in the job, he would lay the groundwork for a peace settlement in Cambodia, strengthen the campaign against South Africa’s apartheid regime during Australia’s tenure on the UN Security Council and weather a period of bruising conflict with France over nuclear testing at Mururoa atoll, the Rainbow Warrior scandal and Paris’s intransigence on self-determination for its Polynesian subjects. He worked hard to build closer and deeper ties between Australia and its Asian and Pacific neighbours.

Hayden brought a stubborn determination and moral clarity to a job that saw him open talks over Cambodia with Vietnamese prime minister Pham Van Dong in defiance of the United States, face down French bullying, and oversee a sensitive review of the ANZUS treaty. Through it all, he consistently spoke out in defence of what he saw to be Australia’s best interests.

In the same year as his visit to Manila, Hayden embarked on a grand tour of the nations of the South Pacific — if a two-week island-hopping expedition aboard an ageing Royal Australian Air Force Hawker Siddeley turboprop aircraft can be considered grand. At Funafuti, the tiny main island of Tuvalu, I vividly remember the plane almost getting bogged on the short grassy runway.

I missed another of the ports of call. The night before departure, a greatly amused Bill Hayden announced to his entourage over drinks, “We’re all off to Tonga tomorrow, but not Mr Baker, who has been declared persona non grata!” This is the first I knew of a ban imposed after I had detailed the extravagant lifestyle of the feudal court in Nuku‘alofa during an earlier visit to Tonga.

I rejoined the caravan in time for Western Samoa. On a free day, the travellers set off with togs and towels to a beautiful but treacherous beach on the north of the main island. To the consternation of his retinue, Hayden ignored the warnings, dived straight into the surf and swam far out to sea. Mercifully, Harold Holt’s fate was not replicated.

During the trip there was some engagement between the travelling journalists and the locals that went beyond the conventional scope of diplomatic intercourse. Hayden revelled in the gossip. At his first press conference at Old Parliament House after returning to Canberra he began by serenading one of the journalists with a variation on “I Left My Heart in San Francisco.”

Hayden was also notorious for collecting outsized souvenirs on his global travels, many of them of dubious artistic merit. It was said that the garden of his Ipswich home was a Disneyland of kitsch, many of the pieces acquired on his travels around the world.

During a visit to Papua New Guinea Hayden alarmed his advisers by taking a particular shine to a large garamut, a slit drum fashioned from a tree trunk, that he spotted in the garden of the Mount Hagen hotel where his party was staying. Such was his enthusiasm that the hotel owner appeared to feel compelled to offer it as a gift to his distinguished guest.

The minders and the media — and perhaps the hotelier — concluded there was little risk of the gift being accepted given its great size and weight. Not so. By early the next morning it had been loaded aboard the VIP jet and found its way back to Ipswich via RAAF Amberley.

Throughout the tribulations and triumphs of his long political career, Hayden’s devotion to Dallas, his wife of sixty-two years, was a constant. In 1987 he was poised to travel to the frontline states of southern Africa at the height of the campaign against apartheid. It was a trip at the heart of Hayden’s determination to see an end to the racist regime in Pretoria — with the bonus of some exotic sightseeing and the chance to augment the Ipswich artefact collection. Days before departure, Dallas suffered a mental health episode and without hesitation Hayden cancelled the trip to stay with her while she recovered.

Among many fine tributes paid to Hayden in recent days was one by Laurie Oakes, former doyen of the Canberra press gallery. “They don’t come much better than Bill Hayden,” Oakes tweeted. “He would have made a great PM. Inheriting Bill’s policies and the people he’d put in key roles gave Hawke a head start. A politician in the finest Labor tradition. Humble, decent, clever, game as they come, Bill’s contribution was immense.”

Prime minister Anthony Albanese singled out Hayden’s achievements as foreign minister for particular praise: “Without Bill Hayden’s instinctive grasp of the relationship between facing our nation to the world and securing our prosperity for the future, the government in which he served might not have achieved the same degree of engagement in our region that still benefits Australia today.”

Had that vision been embraced and effectively driven by all of those who followed Hayden as foreign minister, Australia might not be struggling with some of the formidable challenges it now faces with its neighbours, not least in the South Pacific. •

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We will never be able to make even modest changes to what is a modest, institutionally focused Constitution as long as “Don’t know, Vote no” is a simple and effective go-to for opponents of change. That flaw in the rules of our democracy is, however, far from explaining the hefty loss of the Voice proposal.

Yes garnered less than 40 per cent of the vote, despite having recorded more than 60 per cent in opinion polls before the No cause assembled its grab-bag of arguments. It did so despite enjoying the lion’s share of donations and support from high-profile corporations and cultural influencers alike. (This was one reason there were no serious moves from the left to trial expenditure limits in the referendum, even while rightly clamouring for such limits for elections.)

There will be much hand-wringing about the result of this referendum. Friends and family, particularly from overseas, contacted me before referendum night was complete. They bemoaned having once been Queenslanders, or said they wanted to “hide” as Australians.

Unsurprisingly, given the long, deliberative process that gave us the Uluru Statement from the Heart, Aboriginal and Torres Strait people, taken collectively and by large margins, supported the Voice. It is for them to react to this setback: whether in anger or sorrow, and whether with a renewed push for treaties, re-engagement through existing organisations and parties, or disengagement.

For the rest of us, it is time to reflect on what the results might mean. We could, like one senior political scientist, tell ourselves that “Australian politics is at a dead end” because “Australia is a morally backward society.” (This was penned in a progressive blog for public servants and analysts.) Or we could pause to reflect on what the referendum process and voting patterns have to tell us.

On voting patterns, we must await the full results. Even then, at best we will find correlations between polling booths and local demography rather than clear causal explanations. The data will also be clouded by pre-poll voting at giant booths covering numerous localities. Early votes appear to have skewed even more than the rest, partly because younger voters are less likely to vote early and partly, perhaps, because No voters were on the whole more firm-minded than Yes.

Older voters skewed heavily No. The other utterly clear pattern is that the further from the urban, the less likely any region was to vote Yes. Of just over one-in-five seats to register a Yes majority at the time of writing, twelve were in Melbourne, eight in Sydney, three in Brisbane, three in Canberra, two in Perth and two in Hobart. The seats encompassing Newcastle and Wollongong were the only non-capital electorates to support the Voice.

Indeed, Yes electorates were almost all inner-city. The Greens’ seats of Melbourne and Sydney, the prime minister’s electorate around Marrickville, and the Labor stronghold in inner Canberra recorded between 70 and 77 per cent support. Teal seats like Kooyong, North Sydney and Warringah also voted around 60 per cent in favour. My own, diverse Brisbane electorate of Moreton broke nearly 50–50. Its strongest Yes booth was in a leafy riverside area; its strongest No in the well-to-do, but more suburban, Chinese enclave of Sunnybank.

Truly suburban electorates invariably voted No. Beyond that ring, No reached over 75 per cent in all the vast and remote electorates of South Australia, Western Australia and Queensland, topping nearly 85 per cent in Maranoa in western Queensland. Even in Lingiari, the non-Darwin based Northern Territory seat, No prevailed.

While the socioeconomic and ethnic aspects of all this have yet to be teased out, the clearest lesson is that — Indigenous communities excepted — the more distant, culturally and geographically, from the heart of the capitals, the heavier the proposal was rejected.

On the process, the potential for misinformation to swirl at gale-force speed was again shown to be a feature of the internet age. No one knows how to mitigate that. The worst elements of the No movement exploited this. If you muddy the waters, it is easier for confused electors to follow the conservative instinct of “don’t risk it.”

That said, neither the government nor the Yes movement pushed to trial “truth in political advertising” laws at the referendum, even though we are on the cusp of such a law for national elections.

Pragmatically, this was understandable. Such rules only restrain good-faith participants and campaigners with an institutional reputation, not ad hoc movements. They may have led to stories about campaign tactics detracting attention from the underlying referendum question itself. And even the Yes camp wanted to run claims that were less factually true than emotionally reassuring (for example, that such a Voice was “not about race”).

A hallmark of the Australian system, as ANU law professor Geoffrey Sawer observed sixty years ago, is that “constitutionally speaking, we are a frozen continent.” It’s a hot place, but the Constitution is like pack ice. Any change comes glacially, through High Court tweaks and the evolution of less formal intergovernmental arrangements.

This appeals to conservatives, who regard a written constitution as a bedrock document. But geology doesn’t govern sociology. Times change, and the underlying rules of governance need to evolve too. Opposition to change for its own sake is as bad as change for its own sake. Thoughtful conservatives know our 1901 Constitution is rickety, not least in its federal–state imbalances.

The other hallmark of our constitutional system is that it is a “small brown bird,” as High Court Justice Pat Keane put it. It is not a soaring eagle like the United States’s constitution or its rhetorically flourishing Declaration of Independence. Nor is it dense with rights and values, unlike the modern constitutions of, say, South Africa, Canada or Papua New Guinea.

In that company, the Australian Constitution is a thin document. It is focused not on limiting power or emancipating people but on dividing power between branches and levels of government. This very blandness is a strength: very few people project their own fantasies onto it.

But this also means constitutional literacy in Australia is low. Such ignorance is not irrational: in truth, it reflects the constitution’s authors intention to leave the interesting questions of regulation and social norms to the political process.

Where did the Voice fit into this? As the two-pronged official Yes case put it, it fitted at two levels. One dealt with the “why?” of constitutional change? It was about symbolic recognition: actually mentioning Aboriginal and Torres Stair peoples as the First Nations, in a Constitution that effaced them.

The other, more substantive, question was “why a Voice?” Here, the argument was an institutional one about improving politics. The proposal was consciously tailored to appeal to constitutional conservatives: not a bill of Indigenous rights, but an institution to advise the Commonwealth government and parliament.

The first, symbolic element, initially appealed to the majority of Australians. The second, institutional question, elicited something between indifference and disquiet. The indifference was formally rational: why research the potential role or design of a Voice that would merely advise on policy on behalf of a relatively small minority?

The disquiet was another Achilles heel for Yes. “Politics is broke, this will help” is a good argument on its face. But coming from longstanding politicians it risked being an own goal or, worse, inviting the resentful reaction “well, why reform just for Indigenous peoples?” To deal with that reaction then required deep history and socioeconomic lessons.

In the end, it remains a folly to try to force people to have a considered view on this kind of institutional law reform, narrow in scope and topic. The Australian Constitution itself was a product of voluntary voting, and referendums for the first twenty-five years were voluntary.

Years ago, at an academic briefing for MPs on referendums, I put this view. My academic colleagues, bless them, disagreed. All we need is more education, they insisted. Well, educators would say that; but I’m not sure the overwhelmed school curriculum is really to blame.

As for MPs, Mark Dreyfus (now attorney-general) told me gently that voluntary voting at referendums was an interesting idea, worth discussing. But he reminded me that his Labor colleagues were wedded to a belief that compulsion was inherently social democratic.

It is true, as political scientist Lisa Hill has demonstrated, compulsory voting at elections is the best way to avoid politics slipping into exclusivity. If you don’t vote, your interests don’t count for most politicians. A habit of voting at elections is developed, and in the big questions that decide elections such as ideology, “do I trust Albo or ScoMo with the levers” or “are we better or worse off as a society than three years ago,” everyone’s view is equal.

Referendums, unless they engage a general social concern (like marriage equality) or an existential question (like Brexit) are not so engaging. Worse, unlike a regular election, once we say No (or Yes) to a constitutional question, that decision is all but locked-in for a generation or more.

In the end, what have we learnt? Australia is not “morally backward” even if, as a whole, it is no closer to facing up to history. Democracy is hard, and reform even harder, when reliable information is lost in a swirl of misinformation or when reform is perceived as elite-driven or remote from the concerns of the majority.

Above all, it is important not just to pose the right questions, but also not to force the rationally uninterested to wield a power of veto over reform. •

Postscript

After results were finalised, I looked for examples of extreme differences between polling booths. In Queensland, the highest Yes vote, not surprisingly, was in the Far North, where Indigenous communities are often small but tight.

More than 87 per cent of those who voted via the “Other Mobile Teams 1 and 2” wanted the Voice. Those teams serviced 102 voters at the Lotus Glen Correctional Centre, near Mareeba. Its “catchment” runs from Mt Isa in the far west through to the Torres Strait Islands. (Anyone on remand or convicted but serving a sentence of fewer than three years is still entitled to vote.)

The nearest booth of comparable size was Mutchilba, about twenty-five kilometres inland. There, the free men and women voted 90 per cent No. A similar distance away, but towards the coast, of more than 85 per cent of the 8000-plus votes cast in Mareeba were also No.

The No case labelled the referendum inherently divisive. But a more telling or poignant illustration of the existing divide is hard to imagine.

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Recent censuses have documented a quite extraordinary growth in the Indigenous population, largely in southeastern Australia, driven by growing self-identification and rising numbers of mixed Indigenous and non-Indigenous relationships. As a result, the national profile of the Indigenous population is changing, accompanied by even greater levels of income inequality. Very high levels of income inequality exist within the Indigenous community, levels that are greater than those that exist within the non-Indigenous community.

Alongside these shifts has been a growth in the diversity of political perspectives among leading Indigenous figures. The contrasting views of Indigenous No campaigners Jacinta Nampijinpa Price and Nyunggai Warren Mundine, on the one hand, and Lidia Thorpe and author/lawyer Michael Mansell, on the other, are just one example.

The geographical, social and linguistic heterogeneity of Indigenous Australians has long been recognised by policymakers yet only sometimes taken account of. The regionally organised Aboriginal and Torres Strait Islander Commission (1990–2005) was a rare example of a positive recognition of heterogeneity; in other cases — tighter conditions on social security in remote Australia, for instance — the recognition has come with a punitive veneer.

This diversity has increasingly been overlaid (though not replaced) by a pan-Indigenous focus on identity and identity politics that has begun to permeate the national imagination. The emphasis on a single identity — rather than on layered identities, as Noel Pearson advocates — has created a unity with its own fragility.

These strands have created social, economic and political complexities that undercut the possibility of building an enduring consensus among First Nations on virtually any issue. If substantial Indigenous consensus on policy aspirations is just as elusive as it is among the non-Indigenous population, then all-encompassing Indigenous representation is inherently elusive, particularly nationally.

The referendum result alone won’t drive this complexity; it has been emerging for at least two decades. But the vote will inevitably be perceived as a political and societal inflection point. The notion that governments should seek to discern an overarching and representative Indigenous perspective is likely to give way increasingly to multiple Indigenous interest groups, themselves engaged in the cut and thrust of interest-group politics both within the Indigenous domain and between the Indigenous domain and the wider political domain.

Virtually all recent public commentary has been on the politics of the Voice: the campaign, the tactics of the Yes and No camps, the effectiveness of the most prominent advocates, the implications for social cohesion and reconciliation, and the implications for Australia’s international reputation. The shape of the post-referendum policy framework has received almost no attention. Yet it will determine the opportunities available to First Nations citizens and inevitably shape the nation’s future in ways that are difficult to predict but nevertheless consequential and far-reaching.

In a hyper-rational world, the obvious response to the referendum loss would be to press ahead with legislation to create a Voice. After all, if it is important enough to be constitutionally entrenched, why wouldn’t the government seek to establish it legislatively?

We don’t live in an entirely rational world. Prime minister Anthony Albanese explicitly ruled out a legislated Voice before the vote, primarily on the basis that the process of legislating a Voice would become hyper-politicised. Opponents would argue that the referendum result made crystal clear that Australians don’t want a Voice, thus depriving any such proposal of an electoral mandate. Its design would become deeply contentious both in wider political circles and among Indigenous interests. Without constitutional enshrinement, a legislated Voice’s views and policy perspectives would arguably carry less weight and be more susceptible to being ignored by governments.

One alternative path would be to create an appointed Voice, though the prime minister appears to have implicitly ruled this out too. Governments often appoint specialist groups to provide advice; in fact, the previous government appointed a prime minister’s Indigenous Advisory Council in September 2013 with Warren Mundine as its first chair. It was silently abandoned in 2019 when its advice on how best to progress the Uluru Statement and the proposed Voice became politically inconvenient.

Since then, reflecting the triumph of political considerations over rationality, the Coalition government (and now Labor) operated without a formal Indigenous advisory mechanism while simultaneously funding elaborate bureaucratic and legal processes to design and implement a proposed Voice.

The government’s most likely move will be to embrace the role of the Coalition of Peaks, the alliance of eighty-plus Indigenous peak bodies that emerged in early 2019 from discussions between representatives of fourteen Aboriginal community-controlled organisations and prime minister Scott Morrison. Those discussions ultimately led to the National Agreement on Closing the Gap. According to its latest annual report, the Coalition of Peaks directly and indirectly represents more than 800 organisations and at least 550,000 Indigenous people across numerous sectors.

Announcing a greater reliance on the Coalition of Peaks — or, more probably, gradually lifting engagement — has several political advantages. The coalition encompasses a wide swathe of Indigenous policy, it was established and funded by a Coalition government, and it is capably led by its convenor, the experienced former bureaucrat Pat Turner. Perhaps even more importantly, building on the coalition requires no legislation and can accurately be characterised as a continuation of the status quo.

If it pursues this option, Labor will presumably take the opportunity to signal its increased commitment by allocating new Indigenous funding in the coming 2024 budget. One obvious spending opportunity championed by Turner and the Coalition of Peaks is housing, a policy domain with implications for health, education, criminal justice and domestic violence. As the government develops its new National Housing and Homelessness Plan, which will encompass new intergovernmental funding arrangements, it could earmark increased funding to Indigenous communities.

The Coalition of Peaks is, of course, quite different from the proposed Voice. Unlike previous Indigenous representative bodies, it seeks to represent the interests of “community-controlled” organisations rather than the entire Indigenous constituency. Its members cover a broad range of Indigenous interests, but obvious gaps include the educational and economic development sectors. Implicit in any greater engagement would be a shift to engaging with coalition’s constituent peak bodies.

At the core of the Coalition of Peaks is NACCHO, the National Aboriginal Community Controlled Health Organisation, which represents 145 Aboriginal community-controlled health organisations across the country employing around 6000 staff. NACCHO’s members service more than 550 primary care sites delivering more than 3.1 million episodes of care to more than 400,000 people.

Apart from their sheer breadth of activity, NACCHO members have the advantage of receiving mainstream healthcare funding for their services, thus ensuring a substantial level of political independence. That advantage does not extend to most of the Coalition of Peaks’s other members, which rely to a greater or lesser extent on discretionary government funding. So too does the Coalition of Peaks’s policy secretariat, creating a major risk to its continued independence.

As a member of the council overseeing the National Agreement on Closing the Gap, the Coalition of Peaks has guaranteed cabinet-level access to every jurisdiction in the Australian federation. This is unprecedented in modern Australian history, though the reality is that it is outnumbered and outgunned by the sheer institutional heft of the states and the federal government, and particularly by the size and intellectual capital of their bureaucracies.

Of course, governments will continue to engage with Indigenous interest groups outside the Coalition of Peaks, and will draw on specialist advisory bodies where necessary, as already occurs in the mainstream policy domain. When both Indigenous and non-Indigenous interests are involved, governments will continue to appoint Indigenous members to relevant advisory committees.

The advantages of using the Coalition of Peaks to underpin the future framework of Indigenous policy are significant, but there are also significant challenges.

Foremost is the fact that the extraordinarily complex policy architecture of Closing the Gap is unfit for purpose and requires serious attention. Its bureaucratic complexity ties the Coalition of Peaks down in never-ending process, across eight jurisdictions, virtually guaranteeing it cannot focus consistently on strategic policy opportunities. Complicating its work is the fact that the Coalition government shifted political responsibility for most targets to the states and territories and stepped back from any overt leadership role, a move not reversed so far by Labor.

These problems should have been tackled head-on in the Productivity Commission’s recent draft report on the National Agreement on Closing the Gap. Although the report is critical of progress, its strategically underwhelming analysis is a lost opportunity to take stock and shift course to ensure governments take their commitments seriously. The machinery of Closing the Gap will not collapse in the short term, but neither will it survive into the medium term without focused attention.

Governments are inherently conflicted on this issue: reform of the policy architecture and a stronger Coalition of Peaks will inevitably make life harder for them. Visionary political leadership within government, always in scarce supply, will be required to crack this nut.

A second implication of the referendum defeat is that governments and First Nations will be forced to reconsider the preparedness of the Australian electorate (and the nation’s underlying political settlement) to accept treaties as a mechanism for advancing Indigenous aspirations. While many First Nations leaders and their supporters will intensify their calls for treaties, the risk of devoting decades of work to inchoate policy reforms, and the challenges of agreement-making with reluctant governments could fracture Indigenous views on the benefits of such a strategy. Pragmatic leaders could well see better and more immediate uses for scarce advocacy resources.

It is also worth mentioning that while a successful referendum would have paved the way for a vote on an Australian republic, the defeat is likely to dampen enthusiasm in the current decade. Perhaps paradoxically, it may also increase the likelihood of an Indigenous person being appointed as Australia’s head of state in the interim.

Progress on Indigenous constitutional recognition, meanwhile, appears more remote than ever. Short-sighted self-interest has triumphed over visionary reform. The 1967 referendum gave the Commonwealth an implicit mandate to lead on Indigenous policy, one it has progressively walked away from over the past decade. The Indigenous leadership, encouraged by progressive Liberals, decided to shift away from the recommendations of the 2012 report of the expert panel on constitutional recognition and replace it with the Voice proposal, a move that now seems a well-intentioned error of judgement.

Led by Pat Dodson and Mark Leibler, the expert panel recommended the repeal of section 51(xxvi) of the Constitution, which allows the federal government to enact adverse and discriminatory laws based on race, and called for a new provision prohibiting racial discrimination.

The nation’s Indigenous policy framework over the coming decades will inevitably focus on particular Indigenous interests rather than a notional general interest, tempered by more of the same: more rhetoric over substance, more evasion of responsibility, more blame shifting, less transparency and ministerial accountability, and continued policymaking aimed merely at giving the appearance of action.

If they are to force their way into the dominant bloc of interests that controls Australia’s institutions, Indigenous interests will need to look beyond governments for support and as the sole locus of political action. To be effective, they must build alliances, institutionalise the independence of their advocacy capabilities, and create their own policy institutions. They will need to span their diverse aspirations, and build and sustain the intellectual capital necessary to achieve inclusionary policy reforms in the face of opposition from mainstream interests concerned to protect the status quo. Inevitably, this will be a multigenerational struggle. •

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Early polling indicates overwhelming support. Liberal opposition leaders, regardless of their personal inclinations, lack the authority to support Labor’s proposals. If a Labor government is crazy enough to hold the referendum midterm, it suffers a particularly ghastly fate.

The Voice in 2023 was almost a carbon copy of Labor’s last referendums, in 1988, with overt racism added.

The table tells the story:

The content of the question matters a little, but only a little. It could’ve been purely symbolic recognition, or putting local government into the founding document, or taking out “race” or correcting a typo. If it’s a Labor proposal, and it isn’t held with an election, it gets walloped.

On current counting, the Voice is number 21 on this table, pretty much in the middle of Labor midterm results.

What else can we say?

Tasmania underperformed against general expectations; although, as electoral maestro Kevin Bonham points out, only Newspoll consistently had the smallest state’s support at a more modest relative position. On current counting it has slipped above New South Wales (all state numbers are at the AEC here) to reach second place after Victoria (third after the ACT if we’re including the two territories), which is itself worthy of a mini-headline. Tasmania hasn’t been in third place since, as it happens, that famous 1967 referendum that took out all references to “aboriginals” and “natives.” It hasn’t been in second place since an unsuccessful 1910 proposal.

South Australia’s relative support was always a bit of an unknown, and it came in very low.

In common with the 2017 marriage-equality survey and the 1999 republic referendum, and to varying degrees all referendums back to 1967, Yes was highest around the CBDs of the capital cities, and gradually got lower the further out you went. This routine fact is being turned over and over in the media, but they have to write and talk about something.

(This table on Twitter does show “outer metro” support for marriage equality lowest of all, which can probably be sheeted to its unpopularity in electorates with high numbers of people from non-English-speaking backgrounds. For the Voice, however, there is little evidence of this cohort deviating from the rest one way or the other.)

The figures strongly show big majority support for the Voice among Indigenous communities — if nothing like that 80 per cent January figure that the Yes case cited right up to and including polling day. Several late surveys had Yes support among First Nations people dropping by about the same proportion as the rest of the country, to about 60 per cent, and that looks about right from the polling booth numbers.

(Projecting remote community statistics onto First Nations people who live elsewhere, such as in the cities and towns, is fraught.)

During Saturday night’s ABC TV coverage, federal Liberal MP Keith Wolahan (a No supporter) warned against winners’ hubris, and so far the gloating anticipated on Friday has been restrained.

Late on Saturday evening Jacinta Nampijinpa Price did get defensive when asked about the strong support among Indigenous communities in her electorate of the Northern Territory. She implied an Australian Electoral Commission–Yes campaign conspiracy, and further questions made Warren Mundine so angry he shouted at journalists before they both walked out.

Another normal day for the No campaign. Despite its repeated disarray it wins bragging rights for an outcome that the proverbial drover’s dog could’ve presided over.

The Yes campaign by contrast has announced a week of silence, and who can blame them? The hot takes alone will be more than anyone can endure. While most of us get on with our lives, those who have been involved in this attempted change for a decade or more will obviously feel devastated, and not for a short time.

Anthony Albanese doesn’t seem to be taking it well either, at least twice in the past week describing himself at press conferences as a “conviction politician,” as if this will make voters see him as such.

(Note to Anthony: if you insist on these clunky phrases, it’s best to get someone else to utter them on your behalf. Also, you only get perceived that way by making unpopular decisions and then getting re-elected.)

The prime minister is getting a media pasting. It will be character-building.

On the other side, Peter Dutton is being feted as a winner. But as opinion polls fail to reveal any sustained improvement in his and his party’s standing, the backgrounding will begin in earnest.

How long until we read and hear the inevitable Liberal source’s lament that “we can’t win with Peter”? By June 2024 Dutton will probably be an ex–opposition leader. •

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You never see anything near that kind of variance in ordinary voting-intention polls, though that’s at least partly because the pollsters are posing quite different questions from each other this time. Whose is the best? Referendum polls are a more imprecise science than election ones, so let’s talk about it after the results are in.

But no pollster has Yes ahead, alas, or even approaching it.

At last year’s federal election, people who followed the count from 6pm Australian Eastern Daylight Time experienced an early burst of déjà vu: was this 2019 all over again? The first numbers came predominantly from Tasmania, which happened to be the only state or territory to swing to the Morrison government. By around 7.30 the direction and approximate size of the national swing was clear, and it was an altogether different direction.

There’s a good chance the Apple Isle will again be the renegade on Saturday night, registering the biggest Yes of all states and perhaps generating some excitement for a while. But with only two piles for the ballot paper to be sorted into (plus one for informals) the Australian Electoral Commission’s counting should be faster than at a general election. Even under the Morgan scenario the overall result should be clear by 7pm.

Yet the telecast is scheduled to last until 10pm. What on earth will they talk about?

A referendum passes if it receives a majority of national votes and a majority of votes in a majority (at least four) of states. House of Representatives electorates have nothing to do with it, though they will be of academic interest; according to Antony Green the ABC website will publish all electorate results live online and discuss ones of interest on TV.

Tasmania, that wildest card, has a proud anti-Canberra — or maybe just anti-mainland — tradition of returning relatively high No votes in referendums, but this time the polls, albeit with small sub-samples, pretty consistently show it as the most supportive.

Not coincidentally, Tassie has the only state Liberal government in the country, and that government is supporting the Voice. And the high-profile federal Liberal member for Bass, Bridget Archer, a long-time irritant to her party, is energetically advocating Yes. Voters love major-party mavericks, and not just in their own electorates. But might the Tasmanian government’s meltdown over the past fortnight dampen the effect?

Of the states and territories up on the mainland, the city-territory of the ACT will record the highest Yes and Victoria can be expected to come second — unless South Australia or New South Wales does. It would be very surprising if Queensland and Western Australia don’t bring up the rear. But the rest is rather unpredictable.

Counting in South Australia and the Northern Territory won’t start until 6:30pm AEDT and Western Australia 9pm.

As a broad rule, the “big” states of New South Wales and Victoria, plus South Australia — second-least populous but displaying less of an outlier mentality than Queensland and Western Australia — have been relatively supportive of referendums. We saw it, for example, with both questions at the last set in 1999.

(In 1988, in a very rare break from tradition, Queensland recorded the biggest Yes votes for all four because one of them, for “free and fair elections,” was expected to apply particularly to the electoral malapportionment engineered by the Bjelke-Petersen government.)

Pollsters are broadly predicting these state trends to continue tomorrow. And yet… New South Wales came stone-cold last of all states and territories in the 2017 marriage equality survey. In crude terms, this was due largely to socially conservative religious white people outside the capital and many socially conservative religious people of colour in Sydney, particularly in the west. While the former can be expected to vote heavily No to the Voice, some pollsters have found people from non-English-speaking backgrounds/immigrants more likely to support Yes nationally than the rest.

That last expected dynamic seems counterintuitive. So it will be worth tracking seats in Sydney’s west, and consequently New South Wales as a whole, on the night.

The “inner-urban” professionals–heavy, high-income electorates, including the ones with teal MPs, can be expected to lean Yes. Not so the middle- to high-income, low-NESB ones such as (in Sydney) Lindsay, Hughes and Cook.

Does it go without saying that young people will be much more supportive of the Voice than old ones? That can’t be determined by the voting results, only by surveys. For gender, too, we must rely on opinion polls. For some other cohorts, where census data indicates they constitute a big majority in certain polling places, analysis can provide clues. (Ideally such analysis would adjust for aggregate state or territory votes.)

This time the topic of the referendum adds another geographic dimension. Attention will focus heavily on Indigenous booths, particularly in the Northern Territory, which has more First Nations voters than any other jurisdiction.

The electorate of Lingiari, although only 40 per cent Indigenous (with a lower proportion among voters, given a relatively low median age and a lower, if recently improved, enrolment rate), will come in for outsized attention, but the seat’s aggregate vote won’t tell us much. Turnout in Lingiari is another matter, however, and is (at the risk of tempting the ecological fallacy gods) an okay indicator of, if not the exact level, then the seriousness of low turnout among First Nations voters. In June last year the new prime minister made a big fuss about its low 65.8 per cent.

“That was part of the former government’s design. It wasn’t by accident,” thundered Anthony Albanese, “and they should be held to account for it!” He had a point — the Coalition wasn’t much interested in raising Indigenous participation — but only a small one, because the low Indigenous turnout there reflected a range of factors.

The Australian Electoral Commission has in the last year pulled out many stops to bring estimated Indigenous enrolment up to near the national figure, presumably at least partly by selectively relaxing the rules of its direct enrolment and update program. That’s excellent, but it will — all else being equal — make the turnout worse; after all, the figure will show voting as a percentage of the roll, not of estimated eligible people.

But all else won’t be equal for this referendum. We can expect a higher degree of interest from those voters, and the AEC is pulling out many stops to get their ballots. No doubt others on the ground are also encouraging people to register their vote.

When the counting is done, Lingiari’s turnout will attract attention. It might or might not be higher than at the 2022 election. But the more comprehensive Indigenous electoral roll will come back to bite Anthony Albanese at the next general election.

Probably a dozen or two of our 151 electorates will vote Yes, and maybe, perhaps, one state, Tasmania. The expected thrashing is consistent with your correspondent’s long-expressed deterministic mindset. Midterm Labor government referendums get slaughtered, partly because Liberal opposition is all but inevitable. The content of the proposal only affects the size of the defeat. And this would also apply to merely “symbolic” recognition: the Liberals in opposition would have opposed that too, regardless of what they say (or believe) now.

So expect Saturday night to degenerate into indulgent hot takes as self-identified campaign “old hands” compete to tell the tallest tales, and how they would have run Yes instead. The endless analyses, the gloating dressed up as advice will not be for the faint-hearted. And it won’t stop then but will last for weeks, no doubt joined by intra-Yes sniping.

What does it say about Australia? To this observer, the result will tell us nothing we didn’t already know.

So, no, the No campaign wasn’t brilliant, and the Yes one wasn’t that awful. The devastation about to engulf people on the affirmative side, particularly those for whom this has been a decade-long project, might not be leavened by this knowledge, but this result was a fait accompli once the decision was made to hold the vote apart from an election.

Amid the celebrations, Peter Dutton might even believe this will save his leadership. Perhaps he should have a word with his mentor John Howard, who likely reckoned the same in September 1988 but was out of a job eight months later. •

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She didn’t repeat that call in front of 1300 delegates at the National Housing Conference in Brisbane, but she came close, saying it should be possible to have a grown-up conversation about tax. She said Australia’s taxes encouraged property investors to focus on capital gains rather than a steady income from rents. A “healthy” housing market, she said, would prioritise “homes not assets.”

Lloyd-Hurwitz now chairs the interim National Housing Supply and Affordability Council, set up at the start of the year to advise the federal government on housing policy. In wide-ranging comments, she spoke passionately about the need to build a better and more secure rental sector, pointing out that more than 200,000 poor households hand over at least half their income to their landlords. She described housing as essential infrastructure akin to schools and hospitals, something that can’t be left to the private sector to sort out.

Yet a major thrust of the federal government’s response to the housing crisis does just that. In the updated National Housing Accord accepted by national cabinet, Labor wants the private sector to build 1.2 million “well-located” homes in five years, in the expectation that those new dwellings will bring down prices and make finding an affordable home easier.

Meeting this ambitious target would require an unprecedented rate of building: 60,000 new dwellings every quarter for five years straight. Steven Rowley from Curtin University told the conference that Australia has never achieved that level of residential construction, and only briefly approached it in early 2017. Currently, at just over 40,000 new homes a quarter, the industry is falling well short.

The federal government sees more efficient planning as the key to unlocking the residential construction boom required to meet its target. A blueprint adopted by national cabinet and supported by $500 million in competitive grants aims to streamline approvals, boost local decision-making capacity and fund essential infrastructure. Canberra is also holding out $3 billion worth of incentives to get the states and territories to improve planning systems. The money will flow as bonus payments once a threshold level of new dwellings is passed.

Rowley doubts such measures will be enough. While people love to blame the planning system for a lack of housing supply, he said, it’s market conditions that determine construction levels. And market conditions “just aren’t right.” “The last three years have seen unprecedented cost growth,” he added, “and that means development is unlikely outside the highest return areas.”

Tanya Steinbeck, chief executive of the Urban Development Institute of Australia WA, spoke about the situation in Perth, where construction costs render medium- and high-density residential projects unviable unless the underlying land values are already high. In other words, only upmarket developments in wealthy suburbs are likely to proceed.

According to Rowley, the only way we’ll get 1.2 million new homes is by dramatically rebalancing developers’ costs and the prices they can command. Construction stimulated by a sharp increase in property prices and rents would defeat the purpose of a scheme that aims to make housing more affordable.

Falling costs offer a more hopeful way forward, but Rowley believes costs have been driven up by factors that are largely beyond government control — labour shortages and the rising price of building materials, for example, and more expensive finance. Governments don’t set interest rates and have little influence over the cost of timber, bricks and steel. And while they can, over time, train more tradespeople, governments can’t stop qualified workers defecting to get better wages in the mining sector.

Even if costs moderate and supply chains flow more smoothly, it will take time for industry to respond to improved conditions. The construction tap can be turned off swiftly, said Rowley, but turning it on again is much slower.

Innovation holds out some promise. “We can do things faster without compromising quality,” said Lloyd-Hurwitz, describing an experiment carried out by Mirvac. Twelve terrace houses were built using traditional methods and twelve using a modular approach, with components of the houses made in factories and assembled on site. The modular homes were completed more quickly, with less waste and less neighbourhood disruption.

More generally, prefabrication is growing rapidly. It can help overcome skills shortages and the difficulty of getting workers and materials into remote locations like western Queensland.

But possible savings from innovation may be offset by other factors that make building more expensive. After all, we don’t just need more houses, we need better houses. From the floor of the conference, delegates called for homes that people with a disability can live in easily and homes that allow residents to “age in place.” Updated design standards often increase costs in the short term, even if prices come down again once economies of scale are achieved.

Extreme weather events, meanwhile, are prompting tighter planning controls over where homes can be located, and more stringent building codes in areas at risk from floods and fires. Energy-efficient homes are needed in greater numbers, built from materials with lower embodied emissions, but governments are dragging their feet.

In 2022, after years of negotiation, the states and territories agreed to making seven-star energy efficiency mandatory under the National Construction Code, with the changes to take effect in May this year. After industry lobbying, most states have delayed implementation, saying builders need more time to prepare. The result is grim: no improvement in housing efficiency standards since 2009. Ralph Horne from RMIT told the conference that if higher standards eventually take effect, they will only match ratings for new homes achieved twenty years ago in comparable nations.

The qualifier “well-located” poses another challenge to building 1.2 million homes. It’s code for increasing urban density in established suburbs using medium-rise developments to fill in the “missing middle” — a reference to both the lack of new homes in middle-ring suburbs and the lack of mid-rise apartment projects. A break with the pattern of going up in the centre and out at the edges has so far proved elusive.

More than two decades ago, the Victorian government’s Melbourne 2030 plan aimed to locate a “substantial proportion” of new housing in sites that had good access to services and transport, and to set “clear limits to metropolitan Melbourne’s outward development.” The aim has been partially met by high-rise inner-city towers sprouting up in the CBD, but greenfield estates on the urban fringe continue to accommodate most of Melbourne’s population growth. Some “transit oriented” residential development has sprung up around train stations — Box Hill is a notable example — but new housing in middle-ring suburbs is otherwise limited.

As Lloyd-Hurwitz pointed out, the average dwelling density of middle-ring suburbs is typically around 750 homes per square kilometre, whereas new greenfield estates now achieve densities of 2000 homes (thanks in part to smaller block sizes). Tanya Steinbeck said that while Perth’s established suburbs are dominated by freestanding houses with three to five bedrooms, the growing demand is for one-bedroom apartments, leading to massive underutilisation of existing housing stock.

Transformation of the urban landscape could be encouraged, Steinbeck said, by shifting from stamp duty paid on sales to a broad-based property tax, another long-sought policy reform. This would reduce the financial barrier to people “right sizing” their homes as their circumstances change. The ACT has gone done this path, but other states and territories are unlikely to follow unless the federal government plays a coordinating role. So far, it’s shown no inclination to do so.

There was talk of easier permitting for backyard granny flats, hardly a recipe for top-quality urban redevelopment. But Lloyd-Hurwitz also referred to Auckland’s 2016 “upzoning” to enable the conversion of family homes on suburban blocks into mid-rise developments without running the gauntlet of planning objections. This has been credited with precipitating a boom townhouse development that has slowed the increase in Auckland rents and real estate prices relative to other New Zealand cities (although causal link is disputed).

The aim, said Steinbeck, is not just density, but density done well. The risk of liberalising planning rules is that we’ll get what she called “dumb density” — small-scale developers replacing family homes on large blocks with two or three townhouses that lack energy efficiency and don’t make the best use of scarce land. Such piecemeal infill occurs without upgraded infrastructure and amenity to improve the neighbourhood for all residents.

My conversations with delegates during the conference breaks often came back to this challenge. Doing density well is hard because it means assembling fragmented housing blocks into parcels big enough to develop at scale — few developers have pockets deep enough to engage in such activity and there are few explicit incentives in planning schemes.

The National Housing Accord also includes an aspiration for 20,000 of the 1.2 million “well-located” new homes to be “affordable.” To put it kindly, this is a modest ambition, amounting to less than 2 per cent of all new dwellings over the next five years. If we include the 40,000 social and affordable homes that are supposed to be built with money flowing from the newly established Housing Australia Future Fund and the extra billions extracted by the Greens — and an extra 20,000 dwellings completed independently by state governments over the same time frame (a generous estimate) — that still amounts to only 80,000 “affordable” homes or less than 7 per cent of 1.2 million new dwellings.

Affordable is, in any case, a notoriously vague and contentious term. It’s usually taken to mean rents 20 per cent lower than the prevailing rate for a similar dwelling in the same area. But, as Lloyd-Hurwitz remarked, a discount in a high-priced market isn’t necessarily affordable, especially for tenants on low and moderate incomes.

Despite the challenges, the overall mood at the National Housing Conference was upbeat. As AHURI managing director Michael Fotheringham said in his welcoming remarks, housing has never been more prominent in public discussion than it is today. There was palpable excitement, especially among not-for-profit community housing providers, about bidding for a share of the new funds flowing in their direction. They want to get on with building homes for the people who most need them.

Delegates welcomed the federal government’s efforts to coordinate tenancy reforms via national cabinet so renters around the nation get a better deal, and they are encouraged by the new dynamism apparent at the state level. Since May, Queensland has a dedicated housing department for the first time, led by a minister, Meaghan Scanlon, whose parents both grew up in public housing. Rose Jackson, housing minister in the new NSW government, has launched herself into the job with energy and plain speaking, and Victoria has just released its long-anticipated housing statement.

If there was a general view of the five-year target of 1.2 million homes, it was probably that the ambition is welcome even if it’s unrealistic. Meeting the target would increase Australia’s total housing stock by about 2.4 per cent every year. Curtin University’s Steven Rowley said this could have a moderate impact on rents and house prices, but he doesn’t think it will make homes dramatically more affordable.

What’s needed, he thinks, is sustained public investment to build new social housing in perpetuity, allowing us to steadily build the stock of decent homes that are truly affordable for Australians on the lowest rungs of the income ladder. He worries that the current burst of new funding could again be short-lived. Like everyone else at the conference, I hope he’s wrong. •

Peter Mares facilitated a session at the National Housing Conference and AHURI paid for his travel from Melbourne to Brisbane.

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After this year’s startling rises in global temperatures and climate-related disasters, we may need to move the goalposts. Scientists at the European Union’s Copernicus Centre estimate that Earth’s average surface temperature was already 1.23°C higher by August 2023 than in pre-industrial times. At that rate, the temperature anomaly will top 1.5°C by 2035.

By chance, 2035 is also the next milestone year for which all countries must put forward new targets under the Paris agreement. And last week the International Energy Agency, the OECD’s energy counterpart, warned that current policy settings mean the world is on course for temperatures to be 2.4°C warmer by 2100 than in days of old.

The IEA is funded by Western governments, including Australia. It advocates a rapid “clean energy transition” to net zero emissions — but it knows that success ultimately depends on support from key developing countries, especially China and India. So its pitch is diplomatic; where activists see climate disaster ahead, the IEA sees a glass half full. Before the 2015 conference in Paris, the agency notes, its equivalent modelling found global warming would lift average temperatures in 2100 by 3.5 degrees.

The IEA’s latest report, Net Zero Roadmap: A Global Pathway to Keep the 1.5°C Goal in Reach, updates its 2021 Roadmap ahead of the coming COP28 ministerial meeting on climate in Dubai. Essentially, it’s a blueprint for ministers and their governments: if you’re serious about reducing greenhouse gas emissions to net zero by 2050, something like this is what you should be aiming for.

Its advice is pitched at countries in general: it offers no specific recommendations to any of them. But on one key question in the Australian debate — is it right to expand coal and gas fields for exports? — the IEA’s stance puts it clearly in line with the Greens and against the two major parties.

“There is no need for investment in new oil and gas projects,” the IEA’s executive director, Turkish energy economist Fatih Birol, declared at the report’s launch in Paris. A few countries would still use oil and gas in a world of net zero emissions, or NZE, but the IEA estimates global demand for fossil fuels will peak in this decade and then fall precipitously. That makes new investments a risky proposition.

If the IEA’s roadmap to NZE is followed, which is unlikely, global oil consumption will be just 7 per cent of today’s levels by 2050, gas consumption just 5 per cent, and consumption of coal just 2 per cent. But, as the report keeps pointing out, we’re not there yet.

Laura Cozzi, the IEA’s director of sustainability, technology and outlooks, pointed out that global emissions in the energy sector hit a new record level last year despite significant falls from 2019 levels in advanced economies. Certain unnamed countries, she noted, are still building new coal-fired power stations, expanding fossil fuel projects and heavily subsidising fossil fuels. She summed up the world’s prospects of keeping global warming to 1.5°C: “Not. Good.”

And yet the IEA’s key message is that it’s still possible. “While the global pathway to net zero by 2050 has narrowed, it is still achievable,” Dr Birol concluded. “It is too soon to give up on 1.5°C.”

Why? Partly, perhaps, because if the IEA gave up on that goal then governments would be free to do so as well. But partly, too, because the transition is going very well in some respects — and if governments and business bring the same focus to where they’re lagging, they could dramatically change the global trajectory.

First, the good news. In some key areas, the world is moving fast enough to meet the milestones set out in the 2021 roadmap. In two of them, it’s on track to do better than that. All this is bending the curve of our trajectory from fossil fuels to renewables, but governments have to maintain momentum by progressively tightening that curve.

For example: the decline in future global warming under current policies from the 3.5°C the IEA estimated in 2015 is not enough, but it is a dramatic start. It reflects significant shifts in government policies, business costs, technological development and investment decisions.

Back in 2015, the report implies, the IEA was expecting the global energy sector to be emitting about 42.5 gigatonnes (Gt, or billion tonnes) of greenhouse gases by 2030. Eight years later, it now expects the same sector to be emitting 35 Gt, a drop of 7.5 Gt, or 18 per cent, in just eight years.

Okay, numerous factors are involved in that. They include reduced economic growth as a result of Covid, technological breakthroughs in many areas, and the IEA’s past underestimation of the scale of the shift to solar. That aside, though, government, business and people have changed their priorities in some areas to abandon unsustainable ways of doing things in favour of sustainable ones.

The IEA report estimates that almost half of that 7.5 Gt difference in its new and old forecasts of the energy sector’s 2030 emissions has come from breakthroughs in just one sector: solar energy. It kept expecting solar energy’s dazzling growth to fizzle out, but got that very wrong; instead, solar’s price kept falling, demand kept rising, and month by month it has been replacing coal and gas power. The report estimates that by 2030, under existing policies, solar and wind will each generate roughly 15 per cent of the world’s electricity.

In Australia, solar already has that share of the market, wind slightly less. Our problem lies in creating the storage and transmission capacity to operate a system based on intermittent power sources. Australia is the world’s number one in per capita use of solar, but its transmission network was built for another age, and it has a charming tradition of allowing its farmers to be the world’s number one NIMBYs.

The IEA’s report unfortunately sheds no light on how we should fix these problems. But it does tell us that solar energy use is growing even faster than its 2021 report hoped for, and wind almost as fast, and their combined growth has provided 5 Gt of the 7.5 Gt saving in 2030 emissions.

Another 1 Gt comes from another renewable (or potentially renewable) source: electric vehicles. Here too, like everyone else, the IEA was caught by surprise. In 2015 it expected that electric cars would make up 2.5 per cent of the global car market by 2030. Now it predicts they will make up almost 40 per cent — or more if policies and research moves to bring them on faster, especially for trucks and commercial vehicles.

Some of their growth is due to policy shifts. Governments in the European Union and the United States stared down the car manufacturers, imposing tough emissions standards that forced them to switch strategy to focus on making electric cars. India and some other developing countries rolled out financial incentives and charging stations to replace the masses of tuk-tuks (two-/three-wheelers) on their roads. And, like the boom in solar, the boom in electric cars was made possible by China’s goal of creating new global industries it can dominate (though that has its own problems).

On some issues, some governments are getting serious about trying to stop global warming. And if they’re not, business is doing it for them. The IEA reports that in the last two years business investment in low-emissions energy grew by 40 per cent to US$1.8 trillion, more than Australia’s entire annual output. That’s just as well, because from 2022 to 2030, on the IEA’s roadmap, it will need to grow to US$4.5 trillion.

“We now estimate that global manufacturing capacities for solar PV and electric vehicle batteries would be sufficient to meet projected demand in 2030 in the updated NZE Scenario, if announced projects proceed,” the report concludes. “This progress reflects cost reductions for key clean energy technologies — solar PV [photovoltaic], wind, heat pumps and batteries — which fell by close to 80 per cent… between 2010 and 2022.”

The glass is half full. Unfortunately, it is also half empty.

The IEA’s roadmap to NZE has not changed much since 2021, but its presentation has. Reading it, you’re struck by the repeated entreaties for “fair and effective international cooperation” to help developing countries other than China to “unlock clean energy investment” so their economic growth will not require emissions growth.

You’re also struck by statistics showing that different countries are on very different paths. From 2019 to 2022, the IEA estimates, energy sectors in the European Union and the United States cut their greenhouse gas emissions by 4.5 per cent. But despite its world-leading roles in developing solar, wind and electric cars, China increased its emissions by 7.5 per cent, while emissions in other developing economies rose by 4.5 per cent.

You might think that’s because Westerners pump out far more emissions than China. Not so. The IEA report doesn’t analyse the issue, but its statistics tell us that the combined emissions from energy sectors in the European Union and the United States are 7.5 Gt a year. That’s just 20 per cent of the world total.

If the advanced economies meet their upgraded targets under the Paris agreement — a big if, as British politics shows — their emissions in 2030 would be 5.5 tonnes of greenhouse gases per head, whereas China emits 7.5 tonnes per head and growing. (Australia is an outlier, its total emissions being roughly 20 tonnes of greenhouse gases per head if you exclude the big discount it claims for stopping land clearing.) “The policies currently in place are inadequate to meet [countries’] stated national commitments, let alone longer-term net zero emissions pledges,” the IEA concludes.

Europe has led the way in reducing emissions, but the cynicism with which British prime minister Rishi Sunak has now reversed course to try to win re-election suggests that public support for that role is fragile. The Biden administration has made the United States another global leader, but if the Republicans win back the White House next year, then that too will go into reverse.

Xi Jinping doesn’t have to worry about re-election, and global net zero emissions would be unthinkable without China’s leadership in developing low-cost solar power technology and componentry for wind turbines, electric cars and heat pumps. But China under Xi has also built most of the world’s new coal-fired power stations; it now has 71 per cent of all coal-fired plants in the global pipeline.

However urgent the need for action, there is nothing inevitable about the world achieving net zero emissions within a generation. The European Union and rich countries on this side of the Pacific have written their net zero pledges into law, but few developing countries have followed. And, of course, the United States can no longer make bipartisan commitments.

But as I pointed out in reporting the IEA’s 2021 roadmap, the developing countries are the ones that matter most. They will be generating most of the world’s economic growth from here to 2050, and they will decide how to power it. Not only China and India, Indonesia and Brazil, but Africa too. In general, they’ve been cautious about what they commit to, and with good reason. They claim the West has kept promising financial help to develop clean energy, but has sometimes failed to deliver.

The IEA report frequently alludes to this, emphasising the developing world’s needs for financial and technological support. It suggests that the West bring forward its net zero target date from 2050 to 2045, China advance its deadline from 2060 to 2050, and other developing countries (most of whom are relatively minor emitters) take their time. The cause needs them on board.

The IEA’s milestones are challenging. In 2022, the world generated 61 per cent of its electricity by burning coal, gas and oil. (In Australia it was 68 per cent.) The IEA wants that dependence swept away, cutting fossil fuels’ share to 29 per cent by 2030 and just 9 per cent by 2035. Australia has set itself an even more ambitious target to cut fossil fuels to just 18 per cent of electricity generation by 2030, but there’s a growing consensus that we won’t make it.

The IEA wants 70 per cent of new vehicles sold globally by 2030 to be electric, up from 13 per cent in 2022, and then 98 per cent by 2035. By 2030 it proposes that space heating and cooling systems in all new buildings use energy-efficient heat pumps (or split systems), a huge change from less than 1 per cent in 2022.

It sounds dramatic, but the IEA argues that electric cars and heat pumps will save the customer money in the long term — just as solar and wind energy are cheaper than burning coal and gas. That’s why these four cheap, mature technologies are its priorities for action now.

The report skates over the problems that Australia and other countries are experiencing as solar and wind energy make coal-fired power uneconomic in daylight hours, yet it remains a necessity at night. Its recent report on Australia acknowledged the problem, but offered no solution except a sort of “try harder.”

But much in the report is relevant to Australia. It implicitly rejects Labor’s policy of phasing out fossil fuels at home while expanding exports for others to burn. If our goal is to stop global warming, you can’t do it by transferring emissions from power stations here to power stations in Asia. You can argue the detail of how the transition to renewables should be managed, but the IEA insists that fossil fuels must be phased out throughout the world. As Dr Birol explains, “What matters is emissions, regardless of which country produces them.”

Reducing the destructive methane emissions caused by mining fossil fuels is another of the IEA’s key priorities. Often, it says, it would be far cheaper for miners to capture the escaping gas and use it. Australia was a late signatory to the global pledge to try to reduce methane emissions by 30 per cent by 2030. They have become the fastest-growing source of Australia’s greenhouse gas emissions.

The climate debate here focuses on renewables vs fossil fuels, but the IEA’s focus is on “low-emissions sources of electricity.” That includes nuclear power and carbon capture, usage and storage. Both are outcasts in Australian debates — the Howard government even banned nuclear power stations — but remain in the IEA’s toolkit, albeit for use only in rare cases.

It’s safe to assume that the Coalition’s new campaign for nuclear power in Australia is primarily aimed at renewing the climate wars; nuclear would be an expensive way to provide backup power at nights and on gloomy days. Even the IEA, as strong an advocate as any, sees nuclear providing just 2.7 per cent of the new “low-emissions” capacity it advocates for the world.

Rather, its emphasis is on the potential savings the world could make by focusing on energy efficiency: in homes, offices, shops and factories, cars, planes, ships, everywhere. As an example, redesigning new fridges and air conditioners could cut their electricity consumption almost in half by 2035.

Nothing would score better in human welfare than a global campaign to give every household in the developing world access to clean cooking technology to replace their deadly old indoor wood fires. If this could be done by 2030, the IEA estimates, it would remove 1.5 Gt a year of greenhouse gas emissions and save 3.6 million premature deaths. And that would cost just 1 per cent of the world’s annual energy investment.

But these changes require political or business decisions. The IEA offers only nonpartisan expertise — something that governments here and elsewhere don’t value as much as they should. The agency has to keep its mouth zipped, especially on how to solve the problems it exposes. Take energy efficiency. The obvious way to increase efficiency is a carbon price: make it more expensive to waste energy, and people will find ways to cut its use. But to many on the right, a new tax is taboo. So the IEA has to tiptoe around by suggesting second-best solutions.

The Albanese government is in danger of overpromising on targets while underdelivering on policies to achieve them. Its carbon price is limited to 200-odd companies, it is walking both sides of the street on fossil fuels, and most of the reviews it has launched have yet to produce outcomes. This is what happens when you allow the political staff to take charge of policy. •

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Never mind, it’ll win the vote hands down. That’s right, I refer to the official No case, which any visitor to this country with a mind unpolluted by survey results and media analysis would award very low marks indeed for its frequent drifts from covert to overt racism, its individual meltdowns, and its contradictions.

This, of course, is not how the political class sees it. They who adjudicate campaigns’ “performances” through the opinion polls — currently around 60 per cent for No — are in furious agreement that the Yes campaign has been atrocious.

This recent Nine article is a classic of the genre, with the inevitable Labor “senior figures with years of experience” proclaiming Yes “the worst [campaign] they have seen” while delivering glowing reviews to the No side, and particularly its — try not to laugh — “discipline.” (Meanwhile, in this week’s news, No leader Warren Mundine tweets of his desire to see one of the Yes identities bashed up.)

Now it’s true that the Yes side has made its share of mistakes and has its own inherent inconsistencies. We can all identify things that could have been done differently. But the No side wins the “undisciplined” crown hands down.

But the quality and professionalism of the campaigns isn’t the key issue, and it certainly isn’t responsible for the upcoming result. The scripts write themselves and the individuals are bit players, swept up by larger currents.

Why, in September 1988, some thirty-five years ago, did 62.4 per cent of Australian voters write “No” next to a constitutional referendum to “provide for fair and democratic parliamentary elections throughout Australia”? It surely wasn’t because they don’t believe elections should be fair and democratic. They would have had their purported reasons: it’s unnecessary, the government’s motives are suspect, the whole exercise is a waste of money.

And they would have had reasons for rejecting the other three questions posed at the same time, which all also got Yes support in the 30s.

The real reason was that it was a Labor referendum and it was being held midterm. That’s what always happens in these cases, and it’s happening now.

What did the huge 90.8 per cent Yes vote in 1967 tell us? It certainly wasn’t that racism was dead in Australia. That referendum’s most important consequence lay in activating the “race power” to enable the federal government to make special laws for First Nations people, but that detail was largely kept from the electors.

“Vote Yes for Aborigines” was the slogan, and the Yes campaign enjoyed the support of every member of federal parliament and every state government. Gough Whitlam’s Labor opposition campaigned energetically for it, as did Harold Holt’s government.

Today the 1967 result is steeped in mythology. The Uluru Statement was read out on its fiftieth anniversary. It was a motivator for next month’s vote.

And when the No case wins the only thing it tells us is that Labor governments shouldn’t hold midterm constitutional referendums. They go down, and badly, regardless of the topic.

Advocating for serious policy change in this country is never a fair contest. The proponents attempt to keep it simple and explain the modest benefits, trying to slide through journalists’ pesky questions without misspeaking into the evening news. They never promise nirvana, just modest improvement.

Opponents are not so constrained. Free to exaggerate and scream disaster, they fly a variety of kites, and if one crashes they simply send up another. All they have to do is sow doubt and confusion. They might cover themselves in mud in the process, but it doesn’t matter.

“If you don’t understand it, vote No.” It worked for Paul Keating against John Hewson and the GST in 1993 and it works today.

In reality, most change is never actually voted on. Instead, governments announce and implement changes (the Senate willing) within a term, and by the next election voters are largely used to them and the caravan moves on. When a party is unwise enough to take something substantial to an election, it influences some votes, sometimes enough to make a difference. Two stand-out cases are 1993 and 2019.

Constitutional referendums occupy a sub-category of their own. It’s not about who will form government. Australians, barely aware of the Constitution’s existence, are reminded that it is dangerous to tamper with the founding document of a country that, as we all know, is the “envy of the world.” The term “lawyers’ picnic” always gets trotted out.

We can all recite — let’s put it to music — that bipartisanship is a necessary but not sufficient condition for referendum success. The counterargument that bad proposals are unlikely to receive bipartisan support has some merit, but is let down by the fact that the non-Labor parties (the Liberals and Nationals and their earlier iterations) have sometimes opposed a change in opposition and then attempted to get the same thing passed in government.

The clearer pattern is that Labor government referendums are particularly prone to failure, and that’s largely because Liberal opposition leaders simply lack the authority to support them. Peter Dutton’s decision earlier this year was based solely on his desire to survive as leader; to grasp this we only have to try to imagine the opposite: Dutton ordering the party room to campaign for Yes. He’d probably be an ex-leader by now.

In the end, driven by the shocking Aston by-election result to seek comfort from the party base, Dutton opted for a particularly harsh No stance. Until then, total freedom for the rest of the party room — like the republic vote in 1999 — seemed an option.

Liberal prime ministers, on the other hand, usually possess the ability to ride roughshod over the party room — certainly that was true for Malcolm Fraser when he held referendums in 1977 and for Harold Holt ten years earlier. Both had massive election wins under their belts. Labor oppositions led (both times) by Gough Whitlam gave their full support, because Labor in its DNA believes in constitutional “reform” whereas the Coalition parties are innately suspicious of it. Out of the Coalition’s six proposed amendments in those two years, four passed, one received a majority of votes but not states, and one was badly beaten.

So if you want to know why the Liberals opposed a simultaneous elections referendum in 1974, proposed exactly that in government in 1977 and then ran against it again in 1984 (when it was more accurately referred to as “terms of senators”), that’s the reason.

And (I know I’m repeating myself) Labor mid-term referendums suffer a particularly harsh fate. This chart, colour-coded with mid-term elections in white and ones with concurrent elections in yellow, tells the story.

The dynamic holds true largely regardless of the actual proposed amendments. If a proposal is inherently ambitious (as the Voice could be characterised) it presents a juicy target; if it’s trivial, the apparent gratuitousness of the exercise becomes an issue. And there’s always some former judge or lawyer on hand, or at least someone with a law degree, to supply quotable words.

Recall also Tony Abbott in 2013, having agreed with the Gillard government to support recognition of local government, jumping ship at the last minute after a party-room revolt.

So any purported analysis that assumes agency on Dutton’s part — that he thought it would be good politics or was acting with sincerity — is just theatre. He did what he thought maximised his chances of being Liberal leader at the next election; his personal inclinations, whatever they were, barely mattered.

Like this year, 1988’s set of four questions started with very high support that whittled down (and eventually halved) by voting day. Yet two referendums run just four years earlier, with the 1984 election, did much better. Barely remembered today, and little thought about at the time because they were swamped by the election proper, they received Yes votes of 50.6 and 47.1 per cent.

A loss is a loss is a loss, but some losses come closer to succeeding than others. Labor government referendums held with elections have historically received much higher support, four of them managing national majorities and one actually passing (in 1946). The average Labor government midterm referendum Yes vote is 37.9 per cent; with elections it’s 49.3.

(Incidentally, with tiny Tasmania set to break with referendum tradition and deliver a higher Yes vote than the national average, the likely space for a sixth “double majority” loss shrinks substantially. Electoral maestro Kevin Bonham uses survey data to put it at 50 to 51 per cent. That is, anything more than 51 per cent nationally would probably pass. This is of less relevance to the 14 October vote, which will struggle to even get into the 40s, than to the road not travelled of a referendum held with the next election.)

The Voice proposal came not from the Albanese government but from the Uluru Dialogues. But it was the government’s decision to hold the vote midterm. It presumably believed bipartisanship would be difficult to achieve with a general election — that a midterm vote would facilitate an uncluttered national conversation — and it was encouraged by the early surveys into believing that this time bipartisanship mattered less.

Tick, tick and tick, all just like 1988. Labor, the party that obsesses over its own history, seems determined not to learn this particular lesson. •

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To be sure, it is a familiar enough sight in Australian politics more broadly — ours is a political class obsessed with infrastructure boondoggles — but for the Andrews government major projects were more than a recurring theme; they were the state religion. The premier performed the rites of sod turning and site inspecting as regularly as Mass and recited figures on level crossings removed or hospitals built like counting rosary beads.

And he backed up these prayers and incantations with billions of dollars. As of the last budget, Victoria had approximately $200 billion in projects under way, and was planning to spend an average of almost $20 billion a year over the coming four years on its infrastructure program.

So big was the Big Build — fiscally, politically, physically — that it competes with the state’s traumatic lockdown experience as the dominant element of Daniel Andrews’s legacy. The psychological scars of that time will stay with many of us for a lifetime, but Andrews’s projects are the very fabric of our daily lives. Millions of Victorians use the infrastructure built over the past nine years several times a day. They envelope Melbourne and wind out into the regions, many of them dominating our skylines or otherwise rearranging our neighbourhoods. It is a legacy inscribed in the physical, in concrete and steel; Danist monuments in nearly every quarter of the state.

But what does this tangle of level crossings and tram upgrades, flyovers and tunnels, hospital wards and transmission cables add up to? What, beyond a personal message from Dan to “look on my works, ye mighty, and despair,” does all this stuff actually mean? What is the Andrews infrastructure legacy?

The first thing to say is that the Big Build’s message isn’t coherent. The Andrews government has never adopted a formal, public, long-term infrastructure strategy. It has published documents that claim to put the state’s many and various projects together, but these are retrofilled scrapbooks based around projects chosen with little consideration of how they all work together. As I have argued previously, the Big Build is ad hocery writ large. That makes the program especially vulnerable to the seductions of the boondoggle — projects that look impressive on paper but don’t work out to be all that helpful in practice.

These problematic projects are easier to catch out in the framework of a long-term plan — new schemes only get in if they actually fit into the bigger picture, meet the overarching goals, work well with the other elements. Andrews’s Big Build fails to do this. At best, it speaks of expedience and pragmatism — build now; don’t let the perfect be the enemy of the good. At worst, it is cynically opportunist — build something, anything, and we will get the political dividend. Who cares if it works in the long run? They might as well be pyramids.

And, in many cases, unfinished pyramids at that. The Melbourne Metro, the megaproject Andrews spruiked on his way out the door, is one of vanishingly few projects running ahead of schedule — and even that project has run billions over budget. Others have been bigger fiascos: the West Gate Tunnel, meant to be a simple project to better connect the Melbourne’s port with road freight, has become a quagmire — ensnared in complicated disputes over contaminated soil, three full years behind schedule and in the neighbourhood of $4.5 billion over budget, or almost double the initial price tag.

The Melbourne Airport Rail, meanwhile, due to connect Tullamarine Airport to the metro rail system in 2029, has been put on pause, alongside the Geelong Fast Rail, pending the federal government’s infrastructure review findings. The Suburban Rail Loop’s total cost has been estimated by the Parliamentary Budget Office at double the original forecast — more than $100 billion for the full project, which isn’t due to be fully complete until the 2080s. These half-built, might-never-be-complete projects stand as monuments to the government’s naivety, its impatience, its imprudence.

Finally, the Big Build tells us interesting things about the role of the state under Andrews. Labor brought with it a renewed commitment to an active and interventionist state — a profound step away from the neoliberal model that had dominated state politics since the coming of Liberal premier Jeff Kennett in 1992. This more active posture has held across a broad range of policy domains, including housing, energy, domestic violence, industrial relations, TAFE, early childhood education, and health product subsidies. The Big Build is the big outlier.

True, the government’s infrastructure program constitutes public investment on a scale unseen for a generation. But the Big Build has also been big business. If Daniel Andrews’s rail bridges and road tunnels, hospital wings and prison expansions had credits chiselled into them, top billing would not belong to the State of Victoria but to private contracting companies, private consultancies, private financiers and toll road operators.

They have been the ones actually doing the building, often at considerable profit. Billions upon billions of public dollars have helped engineering firms, design consultancies, contract lawyers and construction companies not only keep afloat but expand massively. At times, private companies have also been the ones to own the assets at the end — or else new public infrastructure has been financed by the sale of old public assets, as with the Port of Melbourne sale that funded many level crossing removals.

More than this, the private sector is also deeply involved in planning, assessing and even suggesting major projects. These are all roles that were once the domain of the public service. Yes, they have been increasingly outsourced since the Kennett era — it is not a wholly new phenomenon. But under Andrews the trend towards contracting policymaking out has accelerated rather than abated. The private sector now intrudes further into the process than ever before.

Some of the Big Build’s biggest projects have been devised from their earliest stages by the likes of PwC and Transurban. It is companies like this that are setting the priorities, developing ideas, planning routes, proposing programs — policymaking on a vast scale, with an eye-watering budget and long-term consequences for millions of people, devised by private, profit-driven, non-transparent and unaccountable businesses.

The Big Build, then, illustrates the profound alliance Daniel Andrews has forged with big business. While he may have brought back a more interventionist state in many realms of Victorian life, he has also given over swathes of the state’s treasure and territory to the private sector. RMIT politics scholar David Haywood calls it the rise of the Rentier State.

Did it all come to an end this week? Does the exit of Dan, alongside the recent departure of his longstanding infrastructure tsar Corey Hannett, and the end of the cheap finance that fuelled the infrastructure boom, spell the end of the Big Build? We should doubt it. In her first press conference as Labor leader yesterday, Jacinta Allan pointed to her experience as the minister for infrastructure as one of the things that prepared her for the premiership. The projects have been as much hers as Dan’s. When Andrews has been on site, in hi-vis, Allan has been at his side, hardhat fastened. The Big Build will plough on.

But can Allan use the chance of a leadership reset, and a faltering budget situation, to rein in the Big Build’s excesses — to transform it from boondoggle city to a coherent plan that prioritises the needs of the public over the profits of the private sector? Or will she simply continue digging the hole deeper? •

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Ministerial staff, on the other hand, have provoked much greater curiosity. In the 1970s, principal private secretaries Ainsley Gotto and Junie Morosi carved swathes during the Gorton and Whitlam governments, though few have since matched their flair. Much less colourful as an adviser was the current prime minister, who cut his political teeth on the staff of Tom Uren, local government minister in the Hawke government, and Bob Carr, premier of New South Wales.

Whether in the Gotto–Morosi or the Albanese mould, ministerial staff still grab a headline or two, if sometimes for the wrong reasons. They inhabit an area of the public service where accountability is minimal but proximity to power gives a sense of dash, even of gravitas — whispering in ministers’ ears, digging their leaders out of strife, telling senior public servants what to do, flitting around sometimes in VIP planes and perhaps glugging on a beaker or two of pinot grigio in a Qantas Chairman’s Lounge.

So when things go wrong with ministerial staff, people prick up their ears. And things have gone wrong with them, and with their ministers and other members of the federal parliament — wrong enough for the Human Rights Commission to be asked to review the scene. Its 2021 report, Set the Standard, made many recommendations about how Parliament House could be smartened up as a workplace.

One consequence of that report is legislation to create a new statutory body, Parliamentary Workplace Support Services, which will deal with staffing, complaints, education and training, and related matters affecting Parliament House’s denizens.

Set the Standard also recommended a review of the Members of Parliament (Staff) Act, now fondly known as the MOPS Act, which provides a legal base for the employment of MPs’ staff. The review, recently completed by the Department of the Prime Minister and Cabinet, is important because ministerial staff have become a linchpin between ministers’ offices and the public service. Where that connection has not worked as it should, things have often turned sour.

Before I say any more about the bill, though, a little history.

In 1983, Labor offered voters a pre-election policy on, of all things, the public service. That policy proposed reserving a proportion of senior executive service positions for political appointments, a move — however well intentioned — that would have disastrously compromised merit staffing.

The MOPS Act was designed as an alternative to Labor policy. (I confess I played a role in advising on and implementing it.) It allowed ministers, under certain conditions, to engage ministerial consultants who could be employed within departments. But it avoided a further politicisation of the public service by limiting the tenure of consultants to the period for which the appointing minister was in charge of the relevant department. Almost as an afterthought, the MOPS also gave ministers and other MPs legal power they’d not previously had to employ their office staff.

The MOPS legislation came into effect in 1984 and it has not been materially changed since then.

Now, based on the review by the Department of the Prime Minister and Cabinet, comes a bill that would materially change the MOPS Act. Some of the proposed changes are for the good, some are not, and some that should have been made have been left on the shelf. The MOPS Amendment Bill might not be as bad as the ridiculously inadequate Public Service Act Amendment Bill, also now in parliament, but it could have been a lot better.

On the positives, the MOPS Amendment Bill would do three important things. It would introduce employment principles designed to improve the behaviour of MPs and their staff. It would better define the employment responsibilities of ministers and other MPs, and elucidate different categories of staff. And it would clarify and improve termination arrangements in association with provisions in the Parliamentary Workplace Support Services Bill dealing with dismissal, grievance procedures and so on.

Given that the optimistic assumptions about the behaviour of MPs and their staff that underpinned the MOPS Act have been invalidated over the years, these changes are welcome. Unfortunately, though, the MOPS Amendment Bill heads south from that point on.

The bill would cut the heart out of the MOPS Act by removing the ministerial consultant provisions. It is as if the bill’s designers have taken fright at the word “consultants” (now an eleven-letter swear word) and simply reacted by removing it from the bill. Their explanation is that the provisions have not been used and are therefore “obsolete.”

But the consultant provisions were never intended to be greatly used. Their purpose was to protect against any return of Labor’s notion of reserving a proportion of senior executive service positions for political appointment, and to block insidious, backdoor pressures from ministers to insinuate their nominees into the public service. Any ministers trying such tricks could be deflected by the consultant provisions.

The fact that they’ve not been much used is not a sign of obsolescence; it’s a sign of success. Their planned demolition ignores the deterrent value of many little-used laws. Indeed, getting rid of laws because they’re not much used would probably wipe out half of what are now on the books.

As the MOPS Amendment Bill errs in what removes, so too is it deficient in what it fails to include.

The administrative code of conduct for ministerial staff has been around for many years. Because it doesn’t seem to have done much good, the 2019 Thodey review of the public service and the robodebt royal commission recommended it be replaced with a legislated code. The government has squibbed on those recommendations; the MOPS Amendment Bill doesn’t propose a code for ministerial staff or one for other MOPS staff.

That’s a shame because a legal code of conduct would provide a clear and unavoidable statement of expectations about proper behaviour and a solid base for keeping staff up to the mark, including with disciplinary measures.

For these reasons parliament has put a legal code of conduct for departmental and agency staff into the Public Service Act. For the government to refuse to do likewise for ministerial staff is hypocritical. If it is not to join the government in this two-faced mire, parliament should insist on legislated codes of conduct for ministerial and all other staff employed by MPs.

For all their value, legal codes of conduct are at risk if recruitment procedures allow ratbags to be employed. The MOPS Amendment Bill includes a provision requiring ministers and MPs to assess whether staff they wish to employ have the appropriate capability. That too-small step is typical of this bill.

True, it provides for the prime minister to regulate what kinds of staff can be employed and to establish related arrangements and conditions, but the powers are unspecific. For ministerial staff, the government (or the prime minister) should be required to establish by delegated legislation suitably tight procedures for selecting ministerial staff, for receiving independent advice on appointments, for security and other vetting, and for induction and training.

Unlike recruitment to public service departments, current procedures for ministerial staff are opaque and vulnerable to shady dealing. While ministers (and other MPs) need scope to employ staff with whom they can get on, more open recruitment procedures would promote public confidence and minimise the ratbag risk.

During the Hawke government, many senior positions in ministers’ offices were occupied by public servants on secondment, a factor contributing to a high point in productive relations between ministers and the public service. While those days are long gone, ministers would do themselves a favour by seeing that their offices include a reasonable seasoning of competent public servants.

There is, however, a disincentive for public servants to sign up with ministers’ offices. In doing so they effectively rule themselves out of promotion within the public service, often for years. With the Hawke government this disincentive was reduced by arrangements whereby public servants returning from ministers’ offices could be reintegrated into their department at a level appropriate to the length of time they’d been on secondment and the kind of work they’d done during it. These provisions should be brought back.

Finally, the Parliamentary Workplace Support Services Bill’s provisions for reporting on employment under the MOPS Act are insufficient. It should be up to the government itself (or the prime minister) to report on the employment of ministerial staff; after all, those given statutory powers by parliament should account directly for their exercise rather than rely on others to do so. Points of authority and accountability should match up.

It’s a pity the MOPS Amendment Bill is so modest and weak, errs significantly in removing the ministerial consultant provision, and omits more important provisions than it contains. Timidity, public service incapacity, an unwillingness or inability to see what’s important in the historical background and a sheer lack of imagination continue to dog attempts to improve the Commonwealth public service. •

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In return for an extra $1 billion in social housing investment, the Greens dropped their demand that the bill include a two-year rent freeze, although housing spokesperson Max Chandler-Mather says the party is still committed to rent control and clearly sees this as a winning strategy in inner-urban seats.

“For us this fight has just started,” he told ABC Radio National Breakfast. “Nine months ago, no one cared about renters in the media and political establishment. Now they are a national news story.” The Greens had forced national cabinet to meet and discuss national renters’ rights, he said, referring to an August agreement by the states and territories to move towards a nationally consistent policy on tenancy laws.

National cabinet’s agreed measures would prevent landlords from terminating a lease without reasonable grounds or from raising rents more than once a year. They would also “phase in” minimum standards for rental properties — though the limp language doesn’t inspire great confidence that the lives of tenants will materially improve, especially given that the examples of “minimum standards” cited in the national cabinet communiqué are “stovetop in good working order, hot and cold running water.”

As well as setting up the HAFF, other bills before the Senate will create an independent body to provide housing research and advice to the federal government. The National Housing Supply and Affordability Council will fill an important gap created when the Abbott government abolished a similar body a decade ago.

Community housing activists have told me the Greens shouldn’t get all the credit for the progress, since the sector has also been lobbying hard, as has Labor for Housing and other ALP ginger groups. Other members of the Senate crossbench have been influential too.

Still, if the Greens hadn’t blocked the HAFF bill it’s hard to imagine that the government would have found an extra $3 billion to build homes for low-income Australians — the June commitment of a $2 billion social housing accelerator, and the additional $1 billion just announced. This new money will bolster the National Housing Infrastructure Facility and can be used to build new social and affordable homes or to pay for critical infrastructure needed to support them. The facility is administered by NHFIC, the National Housing Finance and Investment Corporation, which will become Housing Australia.

Under the original HAFF bill, the government set an annual cap of $500 million on disbursements from the fund to finance new homes. The Greens and other crossbench senators convinced the government to convert this ceiling into a floor — $500 million is now the minimum spend from the HAFF each year, rather than the maximum.

And independent senator David Pocock was also instrumental in getting these annual payouts indexed, which means their real value will be maintained over time rather than eroded by inflation.

The breakthrough on the HAFF is welcome news to not-for-profit housing providers. According to Wendy Hayhurst, chief executive of the Community Housing Industry Association, it will give the sector confidence to plan and deliver new homes.

Despite its designation as a “future fund,” though, the HAFF only offers five years of certainty. After that, there is no guarantee that more public funds will be available.

This isn’t the impression the government wants to give. In its issues paper promoting discussion of a new National Housing and Homelessness Plan it says the HAFF will “build 30,000 new social and affordable houses in its first five years” (my emphasis). Together with the name, this gives the impression that another 30,000 houses could be built in each of the subsequent five-year periods.

Housing minister Julie Collins has allowed this misapprehension to take hold by saying, for example, that “we’re talking about… a fund that in perpetuity each and every year would be delivering at least $500 million into social and affordable rental homes in Australia.”

At first glance, you might think that $500 million will be spent on new homes in every year of the fund’s twenty-five-year life. But that’s not how it works. Proceeds from the fund won’t provide up-front capital to finance new construction but will instead cover providers’ recurrent costs after the housing is built.

This is sometimes referred to as an “availability payment.” It’s essentially a subsidy to not-for-profit housing providers to bridge the gap between the cost of building and operating new homes and the low rents paid by social housing tenants. As a guaranteed future income flow it enables community housing organisations to raise commercial finance to build new dwellings. After five years almost all proceeds from the HAFF will be fully committed to covering the gap between housing providers’ costs and their rental income (at least until 2050).

The benefit of the model is that the HAFF leverages a modest amount of public money into larger sums of private capital. And once the funds are committed, it will be hard for the scheme to be undone by an incoming Coalition government: abolishing the scheme would mean interfering with commercial contracts.

But the HAFF is a complex way to fund housing. As business journalist Michael West writes, the biggest winners could be whoever manages the government’s investment. There’s a simpler alternative: as an analysis for the Australian Housing and Urban Research Institute concluded, “the cheapest and most efficient way to fund new social housing is direct public investment.” That’s why the Greens are crowing about directing an extra $3 billion from the government — six times the amount the HAFF will generate annually — straight into building new homes.

It’s certainly a good time to get money out the door. With the volatile construction sector heading for a downturn, this counter-cyclical release of new investment will help keep workers employed and firms afloat.

But all the extra investment will barely make a dent in the lack of rental homes for households on very low incomes. What is still sorely needed is a bipartisan commitment to financing new social housing for decades into the future.

The chances of that happening are slim. Shadow housing minister Michael Sukkar accused the government of waving the white flag on the great Australian dream because the HAFF does nothing for Australians who want to buy a home. In refusing to countenance support for the government’s social housing initiatives or engage with the struggles of renters, the opposition has dealt itself out of any role in tackling one of the nation’s most urgent challenges.

This leaves the Greens with a powerful hand in negotiations over other looming housing bills, including federal and state legislation to underpin Labor’s Help to Buy shared equity scheme, which is designed to help people into home ownership with a 2 per cent deposit.

The Greens demonstrated a tough pragmatism in the HAFF negotiations. As Chandler-Mather says, the media, the community housing sector and their fellow crossbenchers pressured the Greens for months to pass the bill without seeking further concessions. “We were told when we started this, that we were absurd and crazy, for pushing for more funding for public housing,” he said. “And look how far the debate has shifted.”

But it’s hard to see the party’s demand for a “rent freeze” gaining traction. The phrase promotes a binary understanding of rent control as a switch that is either on or off, rather than a dial that can be calibrated. It mobilises well-founded opposition based on evidence that blunt controls of this kind have unintended consequences.

As a report from the Centre for Equitable Housing notes, “hard” rent freezes, or “first generation” rent controls, have had negative effects elsewhere, deterring new housing investment and discouraging landlords from spending on maintenance. The report adds that a national one-size-fits-all rent freeze doesn’t account for regional differences and could drive some investors to switch their properties out of long-term rental and into short stays instead.

A range of more nuanced measures — what the report calls “second and third generation rent stabilisation” — could be used to moderate rent increases. These approaches, widely used in Europe, are more focussed on limiting rapid spikes than on bringing rents down overall. They may allow landlords to increase rents between tenancies, for example, or offer allowances for spending on maintenance.

The centre concludes that it is possible to develop rent stabilisation policies that allow the market “to play the defining role in setting rent prices but in a moderated and predictable fashion.”

The next test for Labor and the Greens will be whether they can move beyond the rent-freeze stand-off and begin a nuanced discussion about how to develop a more stable and affordable private rental market. That will require compromise on both sides. •

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Crucially, these new approaches envisage Australia working with neighbouring governments on a range of challenges including climate change, global economic uncertainty, and the need to build “effective, accountable states that drive their own development.” These strategies aren’t straightforward: they will involve not only grappling with challenging political realities in Asia and the Pacific but also navigating the contending ideas and interests jostling to shape Australia’s foreign policy.

The late Alan Gyngell, one of Australia’s foremost foreign policy analysts, argued that Australia lacks the power or resources to shape politics in the region and must therefore focus on building partnerships with existing governments through statecraft and diplomacy.

Like the paper released last month, Australia’s 2017 foreign policy white paper argued that such partnerships can tackle a wide range of challenges, including the spread of “terrorism and extremist ideas” and “growing transnational challenges such as crime and people smuggling.” They can even enable “effective programmes to promote economic reform and inclusive growth, reduce poverty and address inequality.”

Partnerships with regional governments would focus on “shared values” and “enduring ties” — assumptions also found in the terms of reference for the current parliamentary inquiry. But it isn’t always easy to identify those common values. Experience in Southeast Asia shows how electoral democracy and pro-market governance can mask the reality of rule by highly illiberal and anti-democratic forces.

Does this matter? Not so much, it seems, when Australia’s foreign policy increasingly places a priority on security by supporting political leaders and governments seen to provide social order and political stability — governments that can act as a bulwark against China and contain insurgency and unrest within the region.

But can the two strategies — fostering security and fostering democracy — work together? Writing for the Lowy Institute, Kevin Casas-Zamora argues that democracy “is not separate from security — the first begets the second.” The United States Studies Centre’s Lavina Lee contends that policies promoting democracy, good governance and a more open Southeast Asia are important tools in protecting the region from the influence of autocratic regimes, notably China.

Australian foreign policy has taken a different route in recent years, drawing a sharp divide between its security goals and programs aimed at democratic and social reform. As former prime minister Tony Abbott famously declared in 2016, “moral posturing” was never allowed to threaten Australia’s security interests under his government. His comment reflects the cold war fear that democracy and social reform in developing societies open the door to social disorder and political instability.

Perhaps the central question, though, is whether strategies promoting democracy and civil society are possible while certain governments and allied elites remain entrenched? Governments themselves, and their apparatus of officials, politicians and security forces, are often the primary causes of repression and consequent unrest. Reformers can face pervasive systems of money politics and assaults on independent judiciaries and media or find their efforts blocked by purportedly democratic constitutions that use restrictive electoral laws to limit political competition. In some cases, they confront extra-legal and state-sponsored violence and, in the extreme, military coups.

Rather than being orthodox defence forces, these militaries were always vehicles for protecting powerful ruling interests against opponents and critics.

It should have come as no surprise when the militaries in Thailand and Myanmar overthrew democratically elected governments or when the military and security forces in Cambodia played the central role in consolidating a repressive one-party state in that country. Australian efforts to help bail out an inept Philippines military struggling to control a ragtag Islamist insurgency may also have simply helped prop up the creaking system of oligarchic politics that underlies a long history of exploitation and repression in that country.

Outside the mainstream, civil society organisations including farmers’ associations, workers’ unions and environmental movements face land grabbing by politically backed elites or illegal logging and deforestation by large mining and palm oil conglomerates. Like human rights groups, professional and business associations aligned with anti-corruption movements struggle to hold police or militaries to account for abuses of power.

Expectations that Australia can partner with countries to promote a “rules-based order” and good governance also collide with governments and elites in the region whose power and wealth is rooted in rent-seeking. This has been illustrated especially by sustained but often futile attempts to control endemic corruption. Indonesia’s anti-corruption commission, the KPK, is a striking example of how an effective and popular reformist institution can be undermined — in this case by vested interests in parliament and the police service.

Efforts to introduce reform through pro-market policies, including privatisation and deregulation, have similarly been co-opted by entrenched rent-seeking coalitions, turning public authority and resources into private monopolies and translating property rights into land grabbing. As in the dramatic case of Russia, market reform has enabled the rise of powerful political and business oligarchies in Southeast Asia.

Clearly, as Gyngell argued, there are limits to Australia’s capacity to reshape these factors within the region. Nevertheless, important opportunities exist to bolster reformist strategies by tackling deep problems of policymaking within Australia itself.

What would such a foreign policy entail?

To begin with, it would mean reinvesting in the authority and resources of a public sector overly reliant on consultants and outsourcing. This reliance has fatally compromised Australia’s understanding of how democracy or good governance are built, reducing officials to roles of accounting, processing and tendering work to private consultants and contractors.

It would mean replacing process-driven approaches that diminish the importance of analysing the environments in which development and other assistance programs operate. An important example is how “statecraft” — now conceived as a set of context-free tools — operates without recognition of the structures of power and wealth in the region.

It would also mean taking “soft power” seriously and harnessing it to support reformist forces in Southeast Asia. This involves leveraging the very liberal nature of what Australia can offer, including the appeal of our universities for regional students as distinctive sites of new ideas and ways of thinking about societies and their governance.

Identifying reforms is one thing, but implementing them is quite another, when foreign policy has become a proxy for deeper political and ideological conflicts in Australia. Rolling back the vast and pervasive influence of security-focused foreign policy–makers will be difficult given the breadth and power of their interests inside and outside the state, and their formidable lobbying networks.

With their emphasis on continuing threats and uncertainty, these policymakers and networks provide the basis for electoral appeals to nationalism and xenophobia by right-wing politicians and parties. This creates a powerful conservative political coalition. They also support a vast apparatus of defence and security institutions extending into the Department of Foreign Affairs and Trade and universities. A large and well-funded think tank, the Australian Strategic Policy Institute, projects their ideological claims.

Above all, it is difficult to find any cohesive force or set of ideas driving Australia’s promotion of democracy. It may indeed be simply another case of Australia mimicking the United States by following the Free and Open Indo-Pacific strategy announced by US secretary of state Antony Blinken in late 2021.

A successful program for promoting democracy and good governance must provide a case for how this will be in Australia’s national interest. Will the Labor government provide this reformist agenda? Can it arrive at a coherent engagement strategy that transcends the rhetoric of AUKUS and the American alliance, or will it revert to the position taken in the 2017 defence white paper and confirm that the old cold war thinking is again ascendant? Sadly, Labor in government seems to be embedding itself in a deepening subordinate relationship with the United States focused firmly on issues of security. •

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The facilitator says she’s sorry there’s no tea and coffee in the room because the urn is fixed to the wall in the kitchen out the back, but she encourages us to duck out and help ourselves to a cuppa. She apologises that the staff from the Department of Social Security will be late because their plane was delayed by Canberra fog.

This modest Monday afternoon gathering in a suburban hall in East Geelong is the first of twenty public consultations — or “community conversation forums” — to help the federal government draft a national housing and homelessness plan.

There is a lot riding on the process. As Chris Martin from the City Futures Research Centre at UNSW has pointed out, Australia has never really had a national housing strategy. What we have had, he told a recent online forum organised by National Shelter, is a series Commonwealth–State agreements regulating how much housing money flows to the states and what Canberra expects in return. Starting in 1945, those multi-year agreements have focused solely on social housing and homelessness; a bigger vision of how housing fits into the economic and social life of the nation has always been lacking.

Martin hopes the new national plan will be more ambitious in scope and help to end the fragmentation of policy within and between different levels of government. He wants to see housing integrated with other policy areas, including employment, welfare, immigration, urban development, climate change, disability and closing the gap.

But the issues paper designed to kick off our “conversation forum” in Geelong is not a promising start. Like many earlier housing inquiries, it seems to assume that Australia’s complex housing challenge has a simple answer — just build more dwellings. It foresees a happy land where homes are available, and affordable, for all. All that’s blocking the way is restrictive zoning, onerous planning processes, cumbersome building regulations and constraints on the release of land. Cut through that thicket of regulation and our destination is within reach.

This popular supply-side explanation to our housing problems was evident at August’s national cabinet meeting, where the states and territories agreed to build 1.2 million new homes over five years from 2024. That’s 200,000 more than the target announced just ten months earlier under the National Housing Accord.

As an incentive to meet this stretch target, Canberra pledged an extra $3 billion to fund $15,000 bonus payments to the states for each additional dwelling. Another $500 million was set aside to “kick-start housing supply in well-located areas” by delivering public services and amenities or bolstering planning capacity. State and local governments will vie for this money under a competitive funding program.

Anthony Albanese calls it “the most comprehensive housing strategy that we’ve seen for a generation.” Even if that’s true, it’s hardly a big claim. With a limited exception during the Rudd years, when Tanya Plibersek was minister, federal governments have dodged responsibility for housing for decades.

Still, the Grattan Institute reckons the prime minister is right to talk up the new deal. It calculates an extra 200,000 homes could make rents 4 per cent lower than they would be otherwise. Its researchers argue that “state and local governments… restrict medium- and high-density developments, largely to appease existing residents in established suburbs.”

Denita Wawn from Master Builders Australia agrees. Welcoming the national cabinet announcements, she said Australia needs to reform planning, zoning, and building approvals to ensure that we’re “not just going out in the suburbs, but up as well.”

In the hope of slicing through the red tape strangling our housing dreams, national cabinet also agreed to a National Planning Reform Blueprint to promote “medium and high-density housing in well-located areas close to existing public transport connections, amenities and employment.”

Rather than a blueprint, though, this is a vague grab bag of sometimes conflicting proposals. While it aims for more timely development approvals, for instance, it also wants to rectify “gaps in housing design guidance and building certification to ensure the quality of new builds.” And while it wants stronger “call-in powers” for state planning ministers it also favours better “community consultation processes.”

Victorian premier Daniel Andrews has already committed Victoria to reducing the role of local councils in significant planning decisions. Yet his government’s record inspires little confidence that this will dramatically boost supply. There’s been little action on a 2017 plan to devote surplus government land to new housing, and the state government can be just as sensitive to resident opposition as local councils are.

Examples can be found in electorally significant sandbelt seats in Melbourne’s southeast. After Kingston Council refused in 2018 to rezone a disused golf course to allow Australian Super to build more than 800 dwellings, the state government intervened and commissioned an independent inquiry. Two years after it reported, its recommendations are still under consideration.

Then there’s what locals call the Great Wall of Frankston. Developers proposed two apartment buildings side by side overlooking Frankston beach — one fourteen storeys high and the other sixteen. The council approved a development overlay that would have allowed twelve storeys. The matter was before the Victorian Civil and Administrative Appeals Tribunal when planning minister Sonya Kilkenny intervened and imposed interim controls to reset the height limit to just three storeys.

National cabinet’s blueprint also calls for states to “consider” the “phased introduction” of inclusionary zoning, which would force developers to incorporate social and affordable housing in any major project — a common practice overseas. The caveat is that this should be done “in ways that do not add to construction costs.”

It’s hard to see such a limply worded proposal generating much change. In 2022, Victoria sought a similar outcome by requiring developers building three or more dwellings to contribute to a social housing growth fund. In the face of property industry opposition, and claims this would push up the cost of buying a home, the proposal was scrapped within a fortnight.

The national planning reform blueprint appears to draw inspiration from work by the Productivity Commission, including a 2021 information paper identifying planning and zoning reforms and last year’s review of the National Housing and Homelessness Agreement. Both reports argue that reforms to planning, zoning and land release are crucial to increasing the supply and affordability of housing.

Many of the Productivity Commission’s recommendations make sense. Its call for state and local planning to be more closely aligned is a good example: a state-wide housing target has little point if local councils refuse to accept their share of new builds or greater density. The commission also wants fewer and broader land-use zones, permitting a wider range of activities without explicit council approval or costly variations. This would make it easier to have mixed developments that combine business, retail and housing.

But a close reading of the commission’s work reveals that many proposals in national cabinet’s planning blueprint are already in train. To varying degrees, all jurisdictions have been “streamlining approval pathways,” especially for significant projects, often by replacing council decision-makers with expert panels. State and local governments have also put considerable energy into removing “barriers to the timely issuing of development approvals.”

In other words, state and territory governments have been reforming planning for a long time without any appreciable effect on housing affordability. As Sydney University planning expert Nicole Gurran points out, more than 90 per cent of multi-unit development applications in New South Wales are approved and decisions issued within about three months.

Nor is there great evidence of planning and zoning being a significant brake on development. Australian Bureau of Statistics data show that more than a million dwellings were completed between December 2017 and December 2022. So, the government’s original Housing Accord target of one million new homes over five years only seeks to match what went before.

An anticipated decline in prospective construction activity has less to do with planning, zoning and land release than with the cyclical nature of the property industry. As this chart shows, the industry is characterised by peaks and troughs. What is more, dwelling completions lag, but rarely match, dwelling approvals. Considerably more housing gets approved than gets built, which points to factors other than planning influencing the supply of housing.

Dwelling approvals and completions 1984–2022

Source: ABS, 8731.0 Building Approvals, Australia and 8752.0 Building Activity, Australia

Among the factors currently dampening activity are higher interest rates, subdued consumer sentiment, weather problems, labour shortages, increased construction costs, bottlenecks in the supply of building materials and construction firms going bust. On top of all that, the Covid-era stimulus brought forward construction that would otherwise have occurred later. None of these adverse factors will be fixed by planning and zoning reform.

Even in a blue-sky world of light-touch regulation, devoid of constraints on labour and materials, a rational developer would avoid bringing so much housing to market that prices would fall, cutting their profit margins.

When I was researching my book about housing in 2018, I visited the 1000-lot Madora Bay development in the growth region of Mandurah south of Perth and chatted to a bored estate agent flogging house-and-land packages. He told me he would get in strife if he clocked up too many sales. His instructions were to sell a certain number of blocks each year, and no more, to keep a floor under prices.

A recent study suggests Madora Bay is not an isolated case. Prosper Australia examined the sales history of nine master-planned communities in three states and found a striking pattern. Sales peak in the early years when a greenfield development is just getting off the ground. But as the project matures, the sales rate slows, even though there is still plenty of land available and demand for new housing has not diminished.

Take the example of Woodlea, a 711-hectare estate twenty-nine kilometres northwest of the Melbourne CBD that will eventually be home to about 20,000 people. When the first of its 6500 lots were released in 2015, sales were brisk, and over the next two years about 14 per cent of the total development was sold — an average of forty-five properties each month. But then sales slowed substantially, even though land prices were still climbing fast. Over the next three years, only about 6.5 per cent of the total lots were sold — an average of just thirteen properties a month.

“Supply effectively reduced from February 2017 all the way through to January 2020, despite rising prices,” writes Prosper economist Karl Fitzgerald. He infers that Woodlea’s developers needed to wind back supply “for fear of price reductions.”

The property industry is one of the loudest voices calling for more land releases and looser planning and zoning rules, arguing that this will enable them to increase supply and reduce the price of housing. But Fitzgerald says this isn’t how property markets operate and it’s illogical to expect private developers to bring on excess supply and, in effect, undercut their own product.

It isn’t just on the suburban fringe that approved residential developments are slow to manifest as dwellings for sale or rent. In July 2015 developer Sterling Global bought the Australian Federal Police building on La Trobe Street in central Melbourne for $70.7 million. Plans were approved in November 2016 for a 70-storey tower including a hotel and 488 apartments. But Sterling Global instead sold the site to Mirvac for $122 million dollars (booking a 73 per cent capital gain in three years) in 2018. In June 2021, the City of Melbourne endorsed new plans for a 31-storey office complex. Construction was due to commence in 2022 but there is no sign of work. The AFP has moved out and the existing five-storey building now sits empty.

UNSW housing expert Professor Hal Pawson advises scepticism about housing strategies based solely on the belief that regulations are limiting building activity. “In reality,” he writes, “the prime consideration for private developers and their financial backers is expected market conditions when constructed homes are saleable.”

The Planning Institute of Australia also points out that planning “doesn’t control the speed with which housing is developed — nor affect powerful drivers for investment in housing.”

“It is simply wrong to say that planning is what is holding back our housing supply,” urban planner Marcus Spiller told National Shelter’s online forum. Yet he says this is the “intellectual architecture” underpinning the government’s approach to a national plan.

The founding partner of SGS Economics and Planning and former national president of the Planning Institute of Australia, Spiller is a veteran of Australian housing debates and has served on numerous state and federal boards and advisory committees. In his view, it is fanciful to assume that we can deregulate planning and then rely on competitive markets to meet the housing needs of low- and middle-income Australians. There is no trickle-down solution to the housing crisis, he says, and government and public policy must play a much stronger role.

If governments had kept building social housing at the same average rate as between 1955 and 1985, Spiller calculates, then Australia would now have 330,000 more homes for low-income earners. Instead, we shifted to providing rent assistance so tenants could find the housing that best suits them in the private market. The theory was that they would become masters of their own destiny. “It’s a compelling economic proposition that we have been pursuing for thirty or forty years,” says Spiller. “And I think it’s time to ask the question, has it worked?”

Clearly, it has not. Barely one in a hundred rentals is affordable for essential workers in full-time jobs, hundreds of thousands of households are forking out more than half their income on rent, and vacancy rates are at record lows. But the conventional supply-side wisdom can never be disproven. If there’s not enough housing or if housing is too expensive, then that must mean we have not yet deregulated enough, and must deregulate more.

In May this year former Reserve Bank economist Tony Richards published a long article in the Australian Financial Review describing how to solve Australia’s housing crisis. Despite the Financial Review’s simplistic spruiking — “1.3 Million Missing Homes Blamed on Councils and NIMBYs” — it is a complex and thoughtful examination of the issues. Richards recognises the need to build more social housing and acknowledges that we could use the tax system to moderate demand. But I was struck by what Richards does and doesn’t say about one of the local governments he picked out as anti-development.

Like all Sydney councils, Hunters Hill must develop a local housing strategy. Astonishingly, though, the council projects that this relatively low-density area just six kilometres from the GPO will lose population between now and 2036. Richards concludes that getting more medium-density housing in such a well-located area may mean taking powers away from local councils, so decisions are not just based on “the preferences of current residents, including NIMBYs,” but also encompass “the needs of the broader city and of future generations of potential residents.”

Richards commends the work of economist Peter Tulip from the Centre for Independent Studies, who has made a detailed analysis of apartment development in local government areas in Sydney and concludes that units are not being built where they are most wanted. Parramatta, for example, is increasing in density much more rapidly than Randwick.

Tulip says we should “build more housing where people want to live, as judged by their willingness to pay for a location.” Mosman is more expensive than Penrith, therefore also more desirable, and so that’s where we should build more apartments — and if we did, this would bring down prices there.

I have very little argument with this line of reasoning, and I think Tulip’s suggestion of a carrot-and-stick approach requiring councils to meet predetermined housing targets is worth pursuing — though Boris Johnson’s efforts to impose mandatory building targets in Britain quickly shattered when worried backbench MPs rebelled against forcing new developments on their wealthy constituents.

And this is what I think is missing from the Richards–Tulip analysis. It fails to draw the connection between housing and wealth. Tulip recognises that “planning restrictions reflect a desire for social exclusion” — that is, rich people want to live near other rich people and not near poor people — but he fails to consider that planning restrictions may also reflect the political power that wealth brings. Perhaps a more progressive income tax would generate a more egalitarian planning regime.

Or perhaps planning is not the issue. Analysing census data in the United States, Seth Ackerman finds a much stronger correlation between housing costs and household incomes than between housing costs and planning restrictions: “Rents and land values in a particular location are determined by the income and wealth of the people and businesses in and around that location. Put plainly, it’s the presence of rich people that makes rents expensive: they can pay more.”

Nor does a conventional supply-side approach concern itself with the fact that rich people generally consume more housing. As British housing economist Geoff Meen observes, housing demand comes “not just from newly forming households, but also existing households as incomes rise.” We need to consider the distribution of housing as well as supply.

“What happens when you build and you have no plan to distribute the housing to people who need it is wealthy people use more housing,” says Maiy Azize from the Everybody’s Home campaign. “They live in smaller households and they buy second homes.”

Excess consumption of housing by the rich pushes up prices for all, but this demand side of the housing equation is rarely mentioned. If we want to promote more efficient use of housing — like people living in apartments instead of freestanding homes with empty bedrooms — then changing how we tax housing and land could make a real difference.

Of course, planning and zoning matter in housing, but not necessarily as barriers — at least not in the way they are normally presented. They can also help overcome systemic problems.

When the Albanese government emphasises the need to build “well-located homes” or Denita Wawn from Master Builders talks about going up in the suburbs as well as out, they are responding to a major problem, often summarised as the “missing middle,” something Richards also identifies in his piece for the Financial Review.

The “missing middle” is primarily a reference to the lack of medium-density apartment dwellings of three or four storeys — the midpoint between high-rise towers and detached family homes. But it can also be applied spatially, to designate the lack of significant new construction in middle-ring suburbs.

A quick summary of where new housing has been built in Melbourne in the past decade illustrates the issue. Between the 2011 and 2021 censuses, dwelling supply in Melbourne’s nine inner-city councils — members of the M9 alliance — increased by about a third. In the City of Melbourne, housing supply almost doubled in that time, from 53,000 to 103,000 dwellings, as new high-rise residential towers sprouted up across the Hoddle grid, Southbank and Docklands.

The supply of housing on the urban fringe rose by more than 50 per cent over the decade, mostly in the form of detached housing in residential developments on former farmland. But the supply of housing in Melbourne’s middle- and outer-ring suburbs grew by just 13 per cent. These are the “well-located” suburbs that the government is targeting for newer denser housing because they have good access to public transport, services, jobs and amenities.

Percentage of dwellings added in Melbourne local government areas 2011–21

Author’s calculations based on ABS Census data

These suburbs might have the most restrictive planning regulations and the most vociferous and well-heeled resident action groups. But I suspect something else is at work.

Unlike central Melbourne, these suburbs don’t have brownfield sites — disused docklands or railyards that can be home to high-rise residential towers. Unlike inner-city Fitzroy, Brunswick or Footscray, they have few warehouses or workshops that can be redeveloped into medium-density apartment blocks. And unlike the city’s outer-urban growth areas, no greenfield sites are available to be transformed into housing estates.

Melbourne’s middle- and outer-ring suburbs are sometimes called “greyfields.” They are, characteristically, residential neighbourhoods dominated by detached homes on separate blocks, with little in the way of industry. That makes urban regeneration challenging, even as buildings age and are due for replacement. Without strategic planning, redevelopment generally takes the form of piecemeal infill — a single family home is demolished to make way for two or perhaps three townhouses. Gardens and trees give way to garages and driveways. Density is increased but the amenity of suburban life is diminished with little planning for the extra demand on services, roads and public transport. No wonder existing residents object to new developments.

More than a decade ago, researchers Shane Murray and Peter Newton identified more than a quarter of a million middle-suburban properties in Melbourne with “high potential for regeneration, in localities where residential building stock is failing and infrastructure is in need of upgrade.” But the historical pattern of residential development based on freestanding houses on separate titles makes it very hard to assemble parcels of land big enough to carry substantial redevelopment projects — the “missing middle” of European-style medium-density housing. This challenge will be even greater in future decades, when current growth areas with smaller lot sizes are ripe for redevelopment.

The Planning Institute of Australia puts its finger on the problem: “many of the easiest candidate sites for housing development are already spent.” It calls for governments to take a leading role in land markets to overcome the inefficiencies caused by fragmented ownership. What’s required to address the “missing middle” is not for governments to get out of the way but for them to intervene more to assist private capital to carry out high-quality, precinct-level redevelopment.

Melbourne, says Marcus Spiller, needs to add one extra dwelling for every existing 1.3 dwellings over the next thirty years, all within the existing urban footprint, “a level of transformation that is difficult to wrap your head around even as a professional planner.” We won’t achieve that with the “hunt and catch, opportunistic, fragmented approach that we’ve had until now,” he says. “The real issues with housing supply lie in land withholding, land assembly, insufficient infrastructure and land fragmentation, all of which require concerted policy effort and public intervention.”

Chris Martin agrees. In a report for the Australian Housing and Urban Research Institute, Martin and his co-authors call for a mission-oriented approach to the national housing strategy. Drawing on the thinking of leading economist Mariana Mazzucato, they argue that the state must play a larger role in “innovation and value creation” and “actively create and shape markets.” Rather than a level playing field in which market can compete, Mazzucato says the state should tilt the playing field towards achieving publicly chosen goals.

The mission, says Martin, can be plainly stated: everyone in Australia needs adequate housing.

We reach a similar conclusion in the community hall in East Geelong. The first session is focused on social housing and homelessness, and our initial task is to share three words to describe what a new national housing plan should achieve. An app collates our responses and projects a word cloud dominated by concepts like affordability, safety and security.

Many of my fellow participants work in public and community housing. They are deeply knowledgeable, their comments detailed and passionate. They talk about renters in the private market needing help to hold on to tenancies — it’s better to support someone in housing than see them slip into homelessness. Yet so many services only kick in after someone is in crisis.

They talk about the lack of emergency housing, about mouldy homes, and about extending Victoria’s approach to domestic violence to the rest of the country — it is the only state that has a policy of removing the perpetrator from the home, regardless of who holds the lease. And they talk about the burgeoning number of applications on the priority list for social housing — 7000 in the Barwon region alone.

After ninety minutes, the top half of our sheet of butcher’s paper is a cluttered jumble of coloured sticky notes. This is where we’ve been asked to identify challenges in addressing homelessness and improving access to social housing. The lower half — where we’ve been asked to identify what is working well — is more thinly populated.

Afternoon has turned into evening and it’s time for a break. Fresh fruit and an abundant supply of traditional baked goods compensate for soggy sandwiches. I load my paper plate with lemon slice and hedgehog and buckle down for another ninety minutes of discussion, this time on housing markets. Our numbers have shrunk from twenty-one to ten.

I am the first to speak and express my dismay that the government’s issues paper makes only passing references to tax, most of them referring to recent changes to promote the build-to-rent sector. The paper ignores debates about the relative merits of stamp duty and broad-based property taxes, and makes no mention of negative gearing, the capital gains tax discount or the exemption of the primary residence from the pension assets test — generous tax concessions that encourage property speculation and over-investment in housing.

The facilitator writes notes and thanks me for my contribution. A few others in the room offer supportive comments. But when we eventually disperse I wonder whether our views, falling outside the parameters of the “issues” offered for discussion, will make any impression on the final consultation paper developed from all these community forums. •

The post Flawed foundations appeared first on Inside Story.

There is, however, one prediction that can be made, with almost perfect safety. For the foreseeable future, Australia’s political class will continue to worry about declining birth rates and “population ageing.”

Worries of this kind have been around since the late nineteenth century, when families first began exercising some control over the number of children they had. The panic over declining fertility was briefly interrupted by an unexpected baby boom after 1945, which coincided with an economic boom. But concerns about ageing resumed with increasing force from the 1980s, when the fact that baby boomers would one day retire started to enter budget calculations just as the prospects of continued strong growth were fading. Worse, unlike previous generations, the boomers showed a propensity to live well beyond the official pension age.

This resurgence in concern has coincided almost exactly with my own working life, and I have spent a fair bit of that time trying to debunk it. My attempts began before the first Intergenerational Report in 2002, and have continued, with very limited success, right up to last month’s release of the latest.

Criticising alarmism about fertility and ageing is something of a family tradition. In 1988, my mother Pat, a demographer, produced No Rising Generation: Women & Fertility in Late Nineteenth Century Australia, a study of the first panic about declining fertility. The title, a quotation from a typically gloomy pro-natal advocate, would work perfectly well as a summary of views being stated today.

Alarm is expressed most commonly in terms of the “old-age dependency ratio”: the ratio of people aged sixty-five and over, assumed to be dependent, and those between fifteen and sixty-four, who must therefore work to support them.

The ages built into the ratio reflected the economic realities of 1909 (at least for men), when the age pension was first introduced. Most men left school and entered the workforce at fifteen, possibly after a brief apprenticeship. Young and strong, they reached their peak earning power in their twenties. If they made it to the pension age of sixty-five they were worn out and, in many cases, incapable of working any longer. At that point, they could expect to live another ten years or so.

Women, meanwhile, were expected to leave paid employment when they married, as nearly all of them did. They then undertook the work of caring for children — an activity ignored by the dependency ratio and left out of calculations of national income. Reflecting their limited employment opportunities, women could (if single or widowed) receive the age pension at sixty.

Apart from some fluctuations, these patterns didn’t change much for the next fifty years or so. The birth rate fell sharply during the Great Depression but rebounded in the baby boom. Women entered the workforce in large numbers during the second world war but were pushed out again to make room for returned servicemen. And although reductions in premature deaths (especially infant mortality) produced a big increase in average life expectancy, prospective longevity barely changed for sixty-five-year-olds between 1900 and 1960.

After 1960, though, things changed radically at both ends of the age distribution. Leaving school at fifteen ceased to be a sensible (or even a feasible) option. By the late twentieth century nearly all young people finished high school and most went on to post-school education and training. Dependence on parents, and on publicly provided or subsidised education, continued to around twenty years of age.

At the other end of the age distribution, the number of healthy years someone could expect to live after sixty-five increased steadily. The abolition of official retirement ages meant people could choose to work until they were seventy or even older. Yet the trend of the late twentieth century — exacerbated when the 1990s recession consigned many older workers to apparent unemployability — was towards earlier retirement.

It was in this context that Coalition treasurer Peter Costello launched the first Intergenerational Report. Its predictions (or projections) were less important than the rhetorical purpose: to spread the message that reductions in public spending, and particularly in welfare payments, were urgently needed if unacceptable increases in taxation were to be avoided.

These claims were repeated in successive reports, reaching the height of absurdity under treasurer Joe Hockey, who warned that the 2015 report would make us “fall off our chairs” and raised the prospect of newborn Australians living to 150. (He forgot to mention that these future Methuselahs would not even reach pension age until the last decades of the twenty-first century.)

The alarmist tone of the Intergenerational Reports was based on the idea that old people will represent an unsustainable burden on both the health system and the retirement income system. But most of the policy changes necessary to fix retirement incomes were well under way by the time the first report came out.

First, income and assets tests for the age pension, largely abolished in the 1970s, had been reintroduced in the 1980s. Then, beginning in the early 1990s, defined benefit superannuation schemes were replaced by accumulation schemes that put the burden on workers to plan the retirement investments on which they would live.

The final step, beginning in the late 1990s, was a gradual increase in the age of eligibility for retirement incomes of all kinds. The pension age for women was increased to sixty-five. Further changes in 2009 began the process of increasing the pension age to sixty-seven, which has just been completed.

Ironically, the most important backward steps in this process were taken by Costello himself. His tax concessions for superannuation, of particular benefit to self-managed superannuation funds, have proved both unsustainable and politically hard to undo. It has taken fifteen years of effort by governments of both parties to wind them back. The absurdly generous franking credits system, against which Labor campaigned in 2019, now looks untouchable.

The resolution of the retirement income problem was finally acknowledged, with some justifiable partisan spin, in the 2023 report. As treasurer Jim Chalmers observed, “Our population is ageing but our spending on the age pension will fall — that’s the intergenerational genius of super. Super is delivering on its promise — providing a better retirement for more Australians and a better outcome for the budget over the next forty years.”

Despite this, the 2023 report sticks with the outdated dependency ratio, noting that the term “refers to the number of people aged sixty-five and over for every 100 people of traditional working age (fifteen to sixty-four).” The only concession to twenty-first-century reality is the word “traditional,” hinting that a document supposedly designed to prepare for the future is still using the mental categories of the past.

But if we use a more realistic age distribution, and take account of the fact that both young and old people are dependent, the apparent crisis vanishes. There are currently about two people aged under twenty or over seventy for every three people in between. This ratio will barely change between now and 2063.

And what about the old bugbear of health spending? Ever since the first Intergenerational Report, critics of the conventional wisdom have pointed out that the growth in health expenditure has been driven mainly by the new and better treatments that lead to longer and healthier lives. This is the reverse of the alarmist claim that an increase in longevity (the cause of which is left unstated) means longer periods of late-life illness and greater demand for medical services.

New medical technologies are part of the process of structural change inherent in modernity. In the first half of the twentieth century, manufacturing displaced agriculture as the central focus of economic activity, only to be displaced in its turn by services. Now change is occurring within the service sector, with information technology and artificial intelligence replacing some services and enhancing the importance of others.

Much of the growth in the service sector comes from human services like health and education, which governments are best placed to provide or at least fund. This will indeed require an increase in the share of national income going to government, and therefore an increase in tax rates. Rather than calling for alarm, the Intergenerational Report ought to be raising awareness of the need for these structural changes.

Like its predecessors, the latest Intergenerational Report will almost certainly fail to create the hoped-for sense of alarm among voters. But in two crucial respects it ought to be generating some alarm in the political class that produced it.

First, the report spells out the need for more tax revenue. Yet the major parties have a bipartisan commitment to cutting taxes for those with the greatest ability to pay. The stage three tax cuts, designed by Scott Morrison first as treasurer and then as prime minister, will put a hole in tax revenue that will take decades to fill. And Labor’s 2019 election defeat led it to abandon most proposals to close tax loopholes.

Our government ought to be even more alarmed about global heating. For the first time, this year’s Intergenerational Report at least attempts to estimate some of the monetary costs of the disaster towards which we are accelerating. But the government that commissioned it is doing little to improve the situation, and a great deal to make it worse.

Every day, it seems, we read of a new coalmine being approved or a new gas project receiving massive subsidies. And every day the results are evident around the world in catastrophic fires, devastating floods and the accelerating destruction of natural habitats.

We are, indeed, driving younger generations of Australians towards a poorer future. But this poverty won’t be caused by higher tax rates or the costs of aged care. Rather, our poisoned bequest will be the unliveable planet that is already in plain view. •

The post The ageing alarmists won’t let go appeared first on Inside Story.

Like others, I often wonder why the ABC I have so enjoyed and relied on can be irritating and sometimes infuriating. If it was on the edge of a cliff, there are days I’d have given it a push. Often that’s when the ABC seems to have no idea what it’s doing or no idea why people use it.

I look at ABC websites that sometimes have PR blurbs presented as news content. I watch Insiders who insist on framing every issue with their personal opinion, the first-person pronoun in heavy employ. News programs give me convoluted versions of a policy or event’s implications, but nothing of the actual policy or event itself. Above all, streams of programming have themes but not surprises. Lots of answers. Too few questions.

Ms Doogue raised the possibility (I think) of the ABC’s irrelevance. It’s the question that all media have had to face since the distribution of content was inverted. What used to be a limited, controlled flow of information and entertainment is now a dispersed, popular network that is both ubiquitous and constant. Technology allows people almost anywhere to view, read or hear almost anything: from live news like the Georgia grand jury’s indictment of Donald Trump to the video replay of all twenty minutes of the Matildas’ World Cup penalty shootout with France. Commercial aggregators like Apple and Netflix offer seemingly unlimited choices. Very soon algorithms will interpret your question, search the digital universe and present you with a composed briefing (which may be what News Corp sees as the future for “news”).

Former BBC director-general Mark Thompson, who was hired by the New York Times when it was mired in poor performance (and fixed it) and has now been picked to repair the ailing CNN, made a useful point recently. American television, he said, seemed to be stuck in the 1980s. With endless sources of opinion, what people really want is accurate and relevant news. Who’d have thought it?

Since the moment consumers began to find serious value in digital channels, the traditional media have been struggling — most often with their financial sustainability, but almost always with their direction and purpose. When the media most needed to revisit fundamentals, many leading players did the opposite — they chose the values that suited them.

Audience numbers are the traditional measure of media strength. Commercial media generally pursued large audiences to justify their advertising rates. The newspapers or broadcasters that captured the largest consistent audiences generally made the most money.

Digital media fractured that concept in two ways. Aggregators of audiences (Google, Meta) offered advertisers far bigger audiences than any incumbent — and did so at a fraction of the cost. Other digital arrivals (Netflix, YouTube) catered extremely well to particular interests and were able to commercialise that offering at a global level; driven by consumers, they turned media measurement on its head.

But much of the established media stuck with tradition and used raw, aggregate numbers to measure their performance. This is why a lot of news media gave away valuable content online, at least in the early years of the internet. More importantly, the measurement of digital traffic encouraged a trend towards crude preferences: by favouring content that drives traffic it promotes popularity over value. Commercial media that didn’t pursue inherent value struggled to get enough people to pay.

The logical endpoint for a content business chasing pure numbers is fairly obvious. Pornography, or its intellectual equivalent, gets eyeballs and doesn’t cost much. People like Tucker Carlson and Alan Jones — not to mention Rupert Murdoch — discovered this formula ages ago.

The ABC has a different problem. The people who pay for the ABC are taxpayers and the people who decide how much they pay are politicians. Why pay? Because Australians want and value a service that isn’t sustained by commercial means. That is, they want something that commercial providers don’t provide. So the ABC should have been better placed than commercial media to respond to a media environment driven more by value than by mass. Yet it seems to have fallen for the same error that its commercial counterparts did.

While ABC aggregate audiences are holding up, its own measures of value, still strong, are declining. But these data don’t tell the full story.

Digital media aggregated audiences but also disaggregated content creation. People who have common preferences and prejudices can stay in the lane they prefer. For a person interested in news, it’s bit like walking down a busy street and asking each person for an opinion. Or, for those who don’t like discordant views, like choosing only the news offered by one’s priest or football coach.

I would have expected the ABC to start dealing with the new environment by asking some very blunt questions. Like: why are we different? What is value for our constituents? How do we impose discipline on our work to deliver value to the people who pay for it?

Jeff Bezos was, I think, one of the first to align a media strategy closely with value. One of the interesting results, to my eyes, is that his Washington Post is much more about news — facts that inform — than its competitors are. Bezos measures everything, but his metrics are about value and how the people who pay judge value.

The ABC does a lot of things well, but it doesn’t do them consistently. I suspect the reason for that is the absence of discipline guided by a clarity about what its paying customers (taxpayers) value. A strong emphasis on news and facts, clearly presented, would overcome the natural tendency of traditional media towards celebrity thinking. (Seriously, do all those TV and radio folk really think people want their opinion on what the Reserve Bank does?)

The ABC could be more obviously bringing Australia into our homes. It could be more obviously filling gaps in the media. It could be asking really interesting questions — not gotcha questions — and providing really helpful information.

I fear the ABC will fail to win sustained support and resources because it didn’t ask the right questions about the new media environment. The main one being: what is value for Australian taxpayers? •

The post Asking the right questions about the ABC appeared first on Inside Story.

It was “completely outrageous,” the opposition leader thundered to Fordham. “Australians want a fair election, not a dodgy one.” That turned a storm in a teacup into mainstream news.

Soon enough, the Australian Electoral Commission felt obliged to point out that “the formal voting instructions for the referendum are to clearly write either ‘yes’ or ‘no,’ in full, in English.” In the 1999 republic referendum, said the AEC, a tiny 0.86 per cent of votes were informal (the accompanying constitutional preamble question got a slightly higher 0.95). Given that there are obviously many ways of voting informal, these numbers represent the very maximum number of ballot papers discarded because they were marked with a cross.

The current interpretation of ticks and crosses was adopted in the late 1980s. The Coalition has never expressed any concerns about it, and certainly didn’t this year when many of its MPs voted to pass the Voice referendum legislation in March. The interpretation isn’t in any legislation, but it’s in legal advice obtained by the AEC.

This sudden kerfuffle is of course part of the No side’s grievance campaign: the government and other elites, it says, are pulling a swifty on ordinary voters. One likely outcome of the beat-up will be more ticks and crosses on ballot papers than would otherwise have been the case.

An irony of all this is that when jurisdictions across the country count ticks and/or crosses as formal, they are deemed to mean the same thing: a vote for whatever party or candidate they are written next to. In the Senate, for example, a tick or cross is taken to mean a “1.” It’s the same in NSW elections: a cross or tick next to a candidate or party is interpreted as a “1.”

The last twenty constitutional referendums (there have been forty-four since Federation) have used the current ballot paper design. It might be reasonable to wonder, soberly, whether the legal advice should be overridden by legislation. It could be done: parliament sits this month. But sowing confusion — “If you don’t know vote No” — was the real purpose of the exercise.

The evolution of the referendum voting paper illustrates two features of Australian elections: that instructions for one ballot paper can have a negative impact on how voters mark another paper they must fill in on the same day; and how the AEC uses “savings provisions” to deal with some incorrectly filled-in papers.

A well-known case of the unintended crossover arose when the Senate ballot paper was redesigned in 1984. This was the first outing for two new features: group voting tickets and the above-the-line option of simply putting a tick (a cross was also accepted) next to a group. The chief purpose was to reverse the explosion in informal Senate votes, which had reached 9.9 per cent in 1983. The above-the-line option worked a treat, cutting Senate informality by more than half to 4.7 per cent.

Unfortunately, some voters applied the Senate instructions to the House of Representatives ballot paper as well, and informal votes for the lower house more than tripled, from 2.1 in 1983 to 6.8 per cent. Oops.

(Thanks partly to a voter-education campaign, lower house informality subsequently decreased, but it has never again been as low as 1983’s 2.1 per cent. The lowest in the past four decades was 3.0 per cent in 1993. These days the main causes of informal votes — not necessarily in this order — are increasing candidate numbers, more voters from non-English-speaking backgrounds, the confusion created by optional preferential voting at state or territory level, and a rise in the number of people deliberately voting informal. Group voting tickets were abolished in 2016.)

The savings provisions, meanwhile, allow the AEC to count a ballot paper filled in incorrectly — with ticks or crosses against candidates’ names, for example — so long as the voter’s intention is clear.

People of a certain age might recall what became known as the Langer vote, a savings provision introduced in the 1980s for House of Representatives elections. Despite the stated requirement that voters number all candidates, the AEC accepted ballot papers where a voter appeared to have inadvertently failed to fully comply with preferencing (by numbering 1, 2, 3, 4, 4, for example).

Like most savings provisions, the difference this made to the count was tiny, but it wasn’t long before interested parties cottoned on to the fact that a voter could use it, in effect, to make a full allocation of preferences optional. Most importantly — at least from the major parties’ point of view — you could cast a valid vote without your preferences ending up with either Labor or the Coalition. Parliament’s first response was to make it illegal to urge anyone to vote in this manner; after a series of court cases, and after an activist called Albert Langer did time in the slammer, parliament got rid of the Langer vote altogether.

Several Australian jurisdictions have laws against advising voters to avail themselves of savings provisions. During a NSW campaign, for example, it is illegal to “print, publish, distribute or publicly display any electoral material that encourages any elector to place a tick or a cross in a square on a ballot paper” even though, as described above, it would still in many cases be counted as formal.

The current referendum ballot paper, which has just one square and instructions to write Yes or No inside it, was first used for the 1967 referendums. Since the 1980s the AEC has acted on legal advice to accept ticks as “Yes” but throw crosses onto the informal pile. I haven’t been able to find out how the commission and its predecessor treated ticks and crosses at referendums from 1967 to 1984.

A sketch of the journey of referendum ballot papers goes like this. The first ones, created and used in 1906, contained two boxes, next to the words Yes and No, and voters were instructed to put a cross inside the box next to the option they wanted. Referendums in that first decade of federation were held with general elections; voting for both houses of parliament also required putting crosses in boxes (one cross for the lower house, three for the upper) and that left little potential for confusion.

(Those three referendums, in 1906 and 1910, still had rather high informal votes, much higher than the accompanying elections.)

In 1918 the federal government replaced first-past-the-post with full preferential voting, requiring the ranking of all House candidates with numbers, like today. (At the next election, in 1919, informality for the House increased only slightly, but this was masked by the fact that voters who persisted in writing a cross next to their desired candidate benefited from savings provisions that counted their vote as formal if only two candidates ran in their electorate, which was the case for 64 per cent of those votes.)

The two referendums held with the 1919 election used the 1906 ballot paper, and average informality was a very big 13.6 per cent. Two midterm referendums in 1926 averaged a low 4.5 per cent informality. So it seemed reasonable to surmise that running referendums with elections caused some confusion.

In 1928, two months before an election at which a referendum would also be held, the ballot paper was radically redesigned. Referendum voters were still presented with Yes and No with a square after each, but now they had to put a “1” next to their choice and “2” next to the other. No more mentions of crosses on any ballot instructions (although — hullo savings provision! — a ballot with a single cross was still counted as if it was a “1”). Relative to the pair of referendums held with the 1919 election, informality dropped dramatically to 6.6 per cent.

This referendum ballot design remained through to 1965, when the Menzies government changed it to what we have today: just one square, with instructions to write either Yes or No. Country Party MP (and future party leader) Doug Anthony told parliament it would be “a more positive and, I believe, a more correct form of voting at a referendum.”

Anthony also noted that the “present provisions which provide that a ballot paper marked only with a cross or marked only with the figure 1 constitutes a formal vote will no longer be appropriate.” Back then, of course, a cross was accepted as indicating support for either Yes or No. Did this influence the later legal advice to the AEC regarding crosses? I’m no lawyer.

In 2023, it’s not even clear that most people who put a cross inside the referendum box are expressing opposition. Many times — in banks, at hospitals — they will have been asked to mark their preference with a cross. A more responsible party leader would have politely declined the invitation to buy into this ridiculous circus, but we are where we are, with ticks and crosses in the news and the commission having to devote resources to answering questions about them, sincere and otherwise. •

Update: Kevin Bonham covers similar territory, in parts in greater detail.

The post No diversion unticked appeared first on Inside Story.

In government just a year later and in power for almost a decade, the Coalition made frequent promises to lift the uptake of private health insurance even as doubts intensified about its value and cost. Along the way, private hospitals labelled private insurance as the health system’s “weakest link” and the private health funds themselves worried about an exodus of customers.

With analysts increasingly predicting a health insurance industry “death spiral,” the Morrison government made moves over several years to — as officials described it — “improve the value proposition of private health insurance for all Australians.” In reality, that was code for the government’s efforts to rescue the funds from what industry insiders have called “the jaws of death.” (Together these concerns raise the question, to which we’ll return, of whether the funds have any useful role to play.)

The changes enacted by the Coalition were mostly ineffective. Efforts to make health insurance policies easier to understand were undermined by industry lobbying, leaving the system as confusing as it ever was. Discounts for younger members appear not to have lifted the participation rate for hospital cover.

A deal to keep premiums lower was undermined by the failure to achieve savings on the prostheses list, a government-maintained register of medical devices for which insurers are required to pay a benefit. A costs-finder website designed to reveal out-of-pocket costs for specialist medical services has done nothing to increase the affordability and uptake of private insurance.

Through those years the means-tested rebate remained untouched. Never a government to take on difficult issues, the Coalition was confronted with the reality that meaningful options were risky, controversial or both.

Labor’s current consultations on private health insurance had their genesis in Coalition health minister Greg Hunt’s review of the sector, which he launched in July 2019. “I’ve already been meeting with private hospitals, insurers and medical leaders on the next stage in terms of private health insurance reforms,” he said at the time. A few months later he reported that he was working on ways to enable health funds to cover hospital-in-the-home and specialist treatment delivered outside hospitals at a lower cost, starting with mental health and orthopaedics.

This work appears to have stalled. The 2020–21 budget papers announced that the Morrison government would begin consulting the private funds about expanding community-based mental health and rehabilitative care in October 2020, with the changes to take effect on 1 April the following year. I can find no evidence that progress was made towards this goal.

The following year’s budget papers proposed a review of the Medicare levy surcharge (a penalty payable by higher earners who don’t have hospital health cover) and the private health insurance rebate (the means-tested government subsidy to help offset the cost of private insurance). They said that the prostheses list needed modernising and its administration improved, and foreshadowed scrutiny of private hospital default benefit arrangements (the benefits insurers pay to private hospitals if they have no standing financial agreement).

The need for reform has only intensified since Labor took office. Housing and cost-of-living pressures mean that many people, especially if they’re young, can’t afford an expensive discretionary purchase like private insurance. Out-of-pocket costs for private healthcare services continue to rise. The ageing of private fund members is threatening the funds’ sustainability. The cost to government of the private insurance rebate is expected to be around $28 billion over the four years from 2021–22.

But private insurance reform is not a topic health minister Mark Butler is talking about, at least in public. In his media releases and statements this year I can find only one passing reference to the government’s reform program: a mention of reducing private health prostheses prices and enhancing the Medical Costs Finder. The work on major reforms appears to be happening under the radar.

Given the impact any changes could have on all Australians, it’s surprising the health minister isn’t keeping the public informed. We can be sure the other stakeholders — the health insurance industry, the private hospitals and the doctors’ groups — are being kept in the loop.

Labor’s work draws on commitments made by the Coalition in recent years, and reports commissioned by its last health minister, Greg Hunt. But tracking the efforts of both governments is hindered by a lack of transparency and a dearth of publicly accessible documents. Complicating the task is the fact that many of the proposals currently up for analysis and discussion are highly technical, demanding expertise in insurance, taxation and risk management that most health policy experts — let alone the general public — lack.

An online search for official information on private insurance reform reveals a single page on the health department’s website — and despite being dated July 2023 it is clearly a relic of the Morrison era. An invitation to find out more about the reforms it mentions takes the visitor to a budget 2021–2022 fact sheet.

The government’s consultation hub is more forthcoming. It includes a report from consultancy firm EY on hospital default benefits and reports from Finity Consulting on lifetime health cover (May 2022), risk equalisation (September 2022) and a mix of other insurance issues (2023).

This is where the story gets complicated. The latest Finity report recommends retaining the Medicare levy surcharge, the insurance rebate and lifetime health cover (no surprises there), and offers options for optimising both the surcharge and the rebate by targeting incentives more effectively. It offers no options for reforming lifetime cover, with the implication that this is inextricably linked to changes in the surcharge and the rebate.

In its earlier lifetime cover report, Finity found evidence that the penalties for delaying the purchase of private insurance, or for purchasing it only when it was felt to be needed, were having a weaker effect and/or becoming less relevant for younger Australians faced with financial constraints.

A single-page departmental consultation paper requests feedback on these studies’ recommendations and how they might be implemented. It also seeks views on a number of policy and regulatory issues not canvassed in the consultants’ reports and wants to hear back about “the readiness of participants in the private health sector to work constructively together to the benefit of policyholders and the performance of Australia’s private healthcare system, and whole of sector mechanisms that can facilitate this outcome.”

The consultation period was open from 6 June to 15 August. The consultation paper had mysteriously disappeared from the consultation hub when I looked for it on 20 August but was reposted after my email enquiry. No submissions have yet been posted on the website. While we can assume that Private Healthcare Australia (the industry’s peak representative body), the Australian Private Hospitals Association, medical organisations and, it’s to be hoped, consumer and patient groups are keenly interested in the outcomes, to date only the Australian Medical Association and the Australian Private Hospitals Association have made their submissions public.

A separate consultation process on EY’s recommended changes to hospital default benefits arrangements took place in August–September 2022, but despite the release of a consultation strategy the recommendations appear to have gone no further. Without changes to the current default policy, patients using smaller hospitals and hospitals in under-serviced areas will be increasingly out-of-pocket, or those hospitals will receive increasingly inadequate compensation.

Thankfully, a paper by several academics who worked with Finity Consulting helps navigate through this welter of studies. According to its authors, the studies have produced three key findings: that financial incentives for consumers to purchase private health insurance are effective overall but inefficient in achieving their desired objectives, including reducing pressure on public spending; that options for reforming those incentives have been designed only as short-term solutions; and that price changes have little effect on insurance uptake.

Reduced to these three key points, the consultants’ work can justly be regarded as unnecessary. A succession of recent analyses and reports from universities and elsewhere have shown how incentives to take out private insurance do and don’t work and what might be done to improve its value for those who purchase it.

A 2021 paper from ANU’s Tax and Transfer Policy Institute looked at the effectiveness of various sticks and carrots used to encourage private insurance, in particular the changes made by the Gillard government in 2012. It found that the Medicare levy surcharge had a greater bearing than the premium rebate on decisions to purchase insurance.

Research by economists Yuting Zhang and Nathan Kettlewell, on the other hand, showed that increasing the levy surcharge wouldn’t meaningfully increase take-up of private insurance because higher-income people who aren’t already buying insurance appear to be highly resistant to financial incentives and disincentives.

A four-step plan to fix the private health insurance system released by the Grattan Institute called for restraints on price-gouging specialists, measures to stop insurers increasing premiums if they can’t demonstrate value for money, and market competition to control the costs of prostheses.

Amid these reports, what messages have the insurers and providers of private healthcare been pushing in their communications with government, the media and the public?

Private Healthcare Australia, the funds’ lobby group, is strongly focused on two issues: restoring the full private insurance rebate — removing the means test, in other words — and cutting back the costs of medical devices, which are much more expensive in private hospitals than in public hospitals. It recently called for a review of the Morrison government’s prostheses changes, which it described as an “inflationary medical device deal.” Tackling both these issues, says the group, will lower premium costs and increase the uptake of private insurance. (Mark Butler announced a series of changes to the prostheses list in January 2023, but they won’t be fully implemented until July next year.)

The Australian Private Hospitals Association argues that the appeal of private insurance will decline if private hospitals aren’t viable. It accuses the funds of profit-taking at the expense of the long-term viability of private hospitals. The association objects in particular to the default funding arrangements for the treatment of private patients in public hospitals.

The Australian Medical Association deserves some credit for recognising the impact of high-priced health insurance premiums on patients. Its submission to the consultation pushes reforms the AMA first put forward in 2020, including the creation of a Private Health System Authority charged with protecting patients, instilling confidence in this highly complex system and driving reform. The AMA has also called for the private health sector to adopt (and fund) more innovative and efficient models of care, including home- and community-based care.

The loud voices of these well-resourced organisations are not easily ignored by governments. The needs, concerns and growing dissatisfaction of the general public, meanwhile, aren’t readily marshalled, presented and heard. While the biggest concern in the community is that insurance should deliver value for money and be accessible when needed, the evidence shows that many Australians value public hospitals more, especially in a crisis. One in four patients who hold private insurance choose to use public hospitals.

What’s glaringly absent from the current consultations are several basic questions that deserve to be taken seriously. Chief among these is whether the government should withdraw its financial support for private insurance altogether and invest the billions of dollars it would save in Medicare and public hospitals (or cut out the funds and directly support private healthcare).

Which of course raises the question of whether private insurance actually does reduce the burden on public hospitals — a belief challenged by recent research from the Melbourne Institute (summarised in the Conversation) that found it doesn’t make much difference to hospital admissions and waiting-list times.

In debating the public–private divide, it’s important to separate the delivery of private healthcare from private insurers, which are simply financial intermediaries — and surprisingly small ones at that. Australia’s total health budget in 2020–21 was $220.9 billion, of which governments contributed $156 billion, individuals $33.2 billion and private insurance $18 billion. Moreover, to quote insurance industry expert Ian McAuley, there isn’t any aspect of private insurance that isn’t done more efficiently and more equitably by Medicare.

The debate on these issues has always been hindered by the fact that Medicare was introduced without planning for how two health insurance systems, Medicare and private insurance, would coexist. Now might be the time to face the problem squarely.

I have yet to see any response from health stakeholders to the government’s plea for signs of a willingness to cooperate constructively for the benefit of health consumers — but that is surely what is needed if the necessary reforms are to be made. A new openness with the public about the existing consultations would be a good place for both the health minister and his department to start. •

The post The weakest link appeared first on Inside Story.

Years ago, David Gonski and his panel also visited schools as part of their deliberations. But something got lost when their recommendations were translated into spending by state and federal governments. Will it be different this time around for the schools visited by the latest panel, and the 24,000 people who recently completed the review’s survey? Will the review, as its title suggests, create a better and fairer future?

Looking at the schools Gonski visited in 2011 might help answer those questions. Are they any better off, or do they still exhibit the contrasts and inequalities that have dogged schools for so long?

The Gonski panellists certainly witnessed contrasts. Gonski himself saw them firsthand in two little schools, one public and the other private, in western Sydney. The principal of the public school spoke to him about the struggle to get all the kids to school. His counterpart in the Catholic school had a solution: “If we have truancy, I tell the parents to take their kids away.” He had witnessed Australia’s unlevel school playing field in action.

Between them, members of Gonski’s panel visited thirty-nine public and private schools in urban, regional and remote settings. While those schools may not have been representative in any statistical sense, they certainly influenced the deliberations of panel members.

Ample information is available on thirty-two of those “Gonski schools,” information that suggests where they ended up a decade later. To enable a closer look, the schools can be grouped according to the socioeconomic (or in the case of schools, socio-educational) slice of Australia they served, then and now.

A school’s place in the sun can hinge on many things: location, leadership, the quality of teaching, the diversity and appeal of its programs. Changes in policy and practices are important, as are changes in the neighbourhood population, school openings, closures and amalgamations, and increases or decreases in resources.

My School data, especially covering who goes to which school, provide consistent clues to the profile, image and progress of schools. My School tells us that the top half of all schools, according to the Index of Community Socio-Educational Advantage, were 10 per cent bigger on average in 2018 than in 2012, and the bottom half almost 6 per cent smaller. Government schools, especially, enrolled an increasing proportion of the most disadvantaged students.

What about funding? Total funding (from government and fees) generally went up during this time, but not in ways that reflected differences in student need. On average, annual funding per student increased about 28 per cent — but less for government schools (25 per cent) and more for independent (32 per cent) and Catholic (38 per cent) schools. Capital funding per student favoured independent, Catholic and government schools in that order.

Income from fees lies at the core of Australia’s divided system of schooling, and largely explains what it does, and doesn’t, deliver. Many Australians value our apparent diversity of schools and school choice, but that choice usually comes with a price tag. Fees shape the whole system.

They also shape our impressions of school quality. Surprisingly, when schools with similar student demographics — public and private — are compared, school achievement doesn’t vary greatly. But different students increasingly go to different schools, and the differences in their achievement have increasingly been associated with the socioeconomic status of their peers and their school. Who goes to which schools matters: students themselves are a key and very unequal resource for the schools they attend.

What happened to the Gonski schools, and do they reflect these trends?

First, those on top stayed on top. When the Gonski schools are grouped by the socioeconomic status of their enrolments, a group of nine at the top stands out from the rest. My School shows that they increasingly serve the most advantaged students and families. They also started — and finished — the post-Gonski era with the highest levels of funding from fees and government, now averaging more than $27,000 per student.

Importantly, while most of this group are large and wealthy independent schools, their public funding increased as much as it did for the schools down the school ladder. Most importantly, the average fee — the price tag for entry into these nine schools — is now around $18,000.

These Gonski schools include Geelong Grammar School in Victoria and four in Sydney: Moriah College, Santa Sabina College, SCEGGS Darlinghurst and St Andrews Cathedral School. Girton Grammar School in Bendigo joined this group, shedding some of its disadvantaged students and gaining more of the most advantaged. The two public schools in this group, Narrabundah College in Canberra and Adelaide High School, formed a second tier in terms of the socioeconomic status of their enrolments. Interestingly, the NAPLAN scores of most of these schools remained largely unchanged over the post-Gonski years.

In the middle and more diverse group of Gonski schools ranked by socioeconomic advantage are eleven mainly private schools. Contrasting with the first group, these schools grew, and their total income per student, averaging around $17,000, was much lower. Their NAPLAN scores also varied, with a tendency to dip.

Some of these schools ended up with a more disadvantaged overall enrolment: for instance, Ashdale Primary School and Living Waters Lutheran College in Western Australia, Al Amanah College in Sydney and Bendigo South East Secondary College in Victoria. School enrolments shifted towards the advantaged end, meanwhile, in Holy Cross College in suburban Perth, and Caroline Chisholm Catholic College and Ilim College, both in suburban Melbourne.

A closer look at one locality reveals some of the dynamics at play. Since 2012, enrolments at the independent Ilim College have grown dramatically, but disadvantaged students make up a falling share. As is commonly the case, many of the latter students ended up at the nearby Hume Central Secondary College — as have certain students from other nearby government schools. Hume Central has also grown, but with a significantly less advantaged enrolment (though its NAPLAN scores compare favourably with those of nearby schools). This story plays out in many communities: no school is an island.

The average price tag for entry into this middle group of schools is just over $3000 per student, not as much as for the first group but enough to admit some students and screen others.

While the experience of schools in the “middle” varied, the dozen lowest-socioeconomic status schools — five Catholic and seven public — reveal a more consistent story. At both the beginning and the end of the post-Gonski decade, most of these schools enrolled among the most disadvantaged students in Australia.

Most had also stopped growing or had lost enrolments. Half, both public and Catholic, increased their enrolment of the strugglers. Among them, in the main, the schools with improving NAPLAN results were those that managed to hold their portion of advantaged students. There were exceptions. One school, Roseworth Primary School in Girrawheen, Western Australia, lost some advantaged students but still managed an improvement in NAPLAN. Results at Bradshaw Primary School in Alice Springs also improved, as did those at St James Catholic College in Tasmania.

Did funding make enough difference? On average, the increasingly disadvantaged schools were funded at around $22,000 per student — mostly public funding, regardless of sector. The remainder averaged close to $18,000, again mostly public funding. It is easy to argue that the difference is nowhere near enough to lift the former. What also stands out is that the changing composition of school enrolments, as much as the dollars going into the schools, appears to have most affected student prospects and school achievement.

These schools serve families and communities at the struggling end, which is well illustrated by their average price tag of just $890 a year, and often much less.

Gonski warned that the increasing concentration of disadvantaged students had a significant impact on educational outcomes. The message still resonates, arguably more so.

A majority of the most disadvantaged Gonski schools enrol an increasing concentration of low socioeconomic status students. Many advantaged students in those schools seem to have fled and taken their higher scores with them. The schools they have left behind have stopped growing — and, in relative terms, many of them have also stopped achieving. The contrasts between the Gonski schools at the top and those at the bottom have become even more evident. The families in the “top” schools can pay the entry fee, the ones at the bottom cannot.

Some commentators seem to believe the blame lies inside the school gate and behind the classroom door, as if the lower-achieving of the Gonski schools have collectively decided to underperform. Hence, we need more data, more targets and school reforms, fewer teachers leaving the system, and schools and systems made more accountable.

Those kinds of reform are always needed, but they don’t deal with the fundamental problem. As Gonski found, public funding arrangements need to reflect the nature of the educational challenges faced by a system or school. That is now widely accepted, but it is only after a decade that all sectors and governments agree.

Money does matter, but the trajectory of the Gonski schools suggests that certain students can be just as important a resource for schools — that the collective impact of peers on learning can make or break a school’s reputation. Small wonder that the schools towards the top of the pile compete to get the “best” students while those towards the bottom struggle to lift those left behind.

This is what the system does, and indeed seems designed to do. The consultation paper issued by the current review has bravely warned that the education system needs to be careful not to introduce additional forms of disadvantage through the design of the schooling system itself. That warning needs to morph into long-overdue structural reform of our framework of schools.

Gonski’s review was A Review of Funding for Schooling. A decade later, the current review is A Review to Inform a Better and Fairer Education System. We can’t wait for another decade for A Review to Rebuild Australia’s Framework of Schools, yet it is clear this must be done as part of a process of school reform.

We need to start by confronting the regressive impact of current policies and practices. The challenge is to strip the education system of the discriminators, including price, that have become firmly entrenched, endemic and destructive.

No one should be surprised by proposals that include abolishing fees and fully funding all schools, regardless of sector, that commit to inclusivity and a public purpose. We need big solutions and considerable structural change, starting now.

The story of the Gonski schools is evidence enough that a class system of schools does nothing for fairness and comes at a considerable cost in money, opportunities and school achievement.

The talented team supporting the current review has a chance to embrace a more global view of school reform. It can identify the drivers of segregation in our school framework, explain the links between this and our mediocre national achievement, and recommend that work start now to reverse the current trends. Without this, what happened to the Gonski schools will increasingly become Australia’s future. •

The post What happened to Gonski’s schools? appeared first on Inside Story.

Resources minister Madeleine King announced that all activities at the site will end immediately, apologised for the “uncertainty” experienced by Kimba residents and acknowledged her regret for the “profound distress” experienced by Traditional Owners — the Barngarla people — during the decision-making process.

King’s announcement came less than a month after the Barngarla Determination Aboriginal Corporation’s campaign against the facility culminated in a breakthrough Federal Court verdict. Justice Natalie Charlesworth ruled that the decision to store Australia’s nuclear waste at Napandee was subject to “apprehended bias” and should thus be set aside. Her decision has been labelled a “king hit” for plans to dispose of Australia’s low- to intermediate-level nuclear waste.

But while many assume that the ruling rested on native title (an issue that was certainly discussed), the minister wanted to make clear that the “question raised in this case was about a decision-making process, not a claim of native title.” In reality, the judgement was a comment on consecutive Australian governments’ inability to take public anxieties about nuclear waste seriously, a tendency stretching back decades.

As Justice Charlesworth detailed, the evidence led her to conclude that former resources minister Keith Pitt had “already made up his mind about the selection of Napandee as the site” ahead of its formal determination. By making statements “to the effect that the Australian Government had made a commitment or promise to the people of Kimba that a radioactive waste facility would be situated at Napandee,” Pitt was judged to have shown apprehended bias — that is, his mind was “foreclosed” to the possibility that the post-nomination consultation would change the outcome.

Justice Charlesworth found that Pitt also displayed a “dismissive attitude to its key opponents, the Barngarla people.” Describing the judgement as the conclusion of a “David and Goliath” battle, the Barngarla Determination Aboriginal Corporation’s chair, Jason Bilney, reflected on the outcome in light of truth-telling: “It’s about listening to the First Nations people, and here we are today and we prevailed and we won.”

Napandee was a latecomer to the process of deciding where Australia’s nuclear waste would be stored. The first round of applications had resulted in just one suitable site: Wallerberdina Station, near Hawker, in South Australia’s Flinders Ranges. Seeking further options in late 2016, resources minister Matt Canavan approved an amendment to the nomination guidelines to allow private landholders to nominate their own properties for consideration. Early the following year, the federal government received several new sites for consideration; one of them was Napandee, a 160-hectare property put forward by owner Jeff Baldock.

With these new sites in contention, efforts began in Hawker and Kimba to gauge local support for the facility. Several ballots conducted as part of the consultation process returned a slim majority vote against hosting Australia’s nuclear waste in Hawker (48–52) and a majority for hosting it in Kimba (62–38). Both communities were divided, and in both cases the Traditional Owners argued they had been “locked out” of voting and not adequately consulted. Once Napandee was selected as the final location in 2020, the Barngarla committed to having the decision reversed.

Justice Charlesworth’s judgement might be a welcome one for the Traditional Owners but it by no means marks the end of the wider debate over the storage of Australia’s nuclear waste. After all, Australians have been here before and will undoubtedly find themselves here again.

If it feels as though the issue of radioactive waste has been in the news for a very long time, that’s because it has. For decades, politicians, experts and the public have debated the ins and outs of radioactive waste storage and disposal in Australia. As the debate rages on, the nation’s nuclear waste mounts.

Australia’s existing waste consists mainly of low-level radioactive waste products and contaminated materials used in medicine, industry and scientific research: contaminated PPE, for example, and unused radiopharmaceuticals and contaminated gowns and bedlinen. The nation’s radioactive waste burden is partly the consequence of saving countless lives: in 2022 alone, 300,000 nuclear medicine diagnostic exams were claimed on Medicare, each of them producing both low- and intermediate-level nuclear waste.

Regardless of radioactive materials’ positive uses, the mental leap from nuclear waste to barrels of toxic sludge, ballooning mushroom clouds and radiation sickness shouldn’t be dismissed. Uncertainty about radioactivity’s association with cancer and other serious health concerns, its impact on the environment and the contradictory way it appears to be handled and approached by authorities induce unease. Rather than treat these anxieties as baseless, decision-makers need to face them head-on and deal with them seriously.

This was exactly the advice given to the Keating government in the No Time to Waste report released by the Senate Select Committee on the Dangers of Radioactive Waste in 1996. The committee found that the rules and regulations governing nuclear waste storage were not only difficult to understand but were also inadequately enforced. The rules themselves hadn’t kept up with shifting international standards and appeared to operate differently from state to state. Coming after a nuclear waste spill at Port Augusta in 1991, these conclusions would only have increased public concern.

The more recent case of a radioactive capsule lost in remote Western Australia is a good reminder of why such concern prevails. Australians were told not to be concerned by the misplaced 8mm diameter capsule, but — in the same breath — were “urged” not to touch it. Chief health officer Andrew Robertson, who chairs the Radiological Council of Western Australia, warned that coming into contact with the tiny capsule “could cause radiation burns or severe illness.”

Once it was found, though, the public health risk associated with the capsule was reported as having been extremely remote. The contradictory messages, and the lapses of security with which they were associated, caused understandable apprehension.

But accidents like these don’t just fuel anxiety. They also fuel discussion of the need for a national remedy to the risks posed by the decentralised handling of potentially dangerous radioactive materials. At present, Australia’s nuclear waste is housed at over one hundred sites across the country — some of them in populous areas — including hospitals, universities, mines and the Lucas Heights reactor in Sydney. Proposals for national repositories to centralise these storages extend back at least to 1998.

The proposal most like the one successfully opposed last month came in 1998, when prime minister John Howard took up the Senate committee’s recommendation of two years earlier that the government begin seeking a site for a national, well-regulated waste repository. Opposition flowed thick and fast, laced with fears that placing the waste in the desert would merely put it “out of sight, out of mind.”

Ever conscious of the radioactive legacies of British nuclear testing at Maralinga and Emu Field, and also aware of the waste generated at the large-scale Olympic Dam mine, many South Australians resented the suggestion that theirs would become the nuclear waste state. But it wasn’t the state’s nuclear past that determined the repository’s fate; it was the government’s determination to stick to a “decide and defend” model of site location, as Griffith University’s Ian Lowe recently described it.

Cabinet papers released earlier this year detail the Howard government’s plans to defy opposition from South Australians. They reveal cabinet’s commitment to defending the government’s choice of site through “the compulsory acquisition of… native title rights and interests in the area” and the overriding of “any South Australian legislation which seeks to prohibit the establishment of the national repository.”

South Australia’s Rann government brought a Federal Court case against the Commonwealth in 2004, arguing that attempts to compulsorily acquire land in South Australia for nuclear waste storage were unlawful. As it did last month, the Federal Court ruled in favour of the applicants.

Howard subsequently announced the government’s decision to “abandon” the repository because of a “failure of the states and territories to cooperate with the Australian Government in finding a national solution for the safe and secure disposal of low level radioactive waste.” What might have been interpreted by Howard as a failure by the states to cooperate with his government would have been interpreted by affected communities as the federal government’s failure to cooperate with them. Precisely the same accusation was levelled by the Barngarla.

In light of this month’s ruling, and echoing Howard, Minister King last week reaffirmed her government’s commitment to safely storing and disposing of Australia’s nuclear waste. Looking ahead, though, AUKUS and Australia’s acquisition of nuclear submarines will profoundly affect this commitment. And only last week Nationals leader David Littleproud reaffirmed the Coalition’s view that Australia should go nuclear.

Larger-scale nuclear pursuits — including nuclear submarines — would undoubtedly complicate Australia’s nuclear waste disposal. To date, Australian governments, Coalition and Labor, have been unable to secure widespread public support for a national storage or disposal facility for low- to intermediate-level radioactive waste. Yet the AUKUS security pact makes Australia responsible for the storage of high-level waste produced by its submarine fleet.

Despite assurances that this won’t be a problem until at least the 2050s, the prospect is well worth considering in light of the Federal Court’s ruling. This judgement, like those that came before it, demonstrates that nuclear waste storage and disposal in Australia isn’t necessarily an issue of technical ability (though this remains up for debate); rather, it requires governments to both obtain community consent and allay public concerns.

As King made clear, a national waste facility “requires broad community support.” This doesn’t mean simply obtaining the support of ratepayers or property owners — it means the whole community. And while this is undoubtedly an immense task, if the recent and earlier judgements teach us anything, it is that an issue like this won’t be resolved until communities’ voices are heard and apprehensions adequately considered. •

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What did catch their attention was the government’s cagey response when it was questioned about the decision. The 2020 stripsearch of Australian passengers in Doha cracked a mention, and there was vague talk about decarbonisation targets.

When transport minister Catherine King did finally admit that the decision had all been about defending national markets, the next question was obvious: why the initial obfuscation?

One explanation is that the government was alert to political sensitivities. The obvious beneficiary of its decision to block Qatar is Qantas, an airline that no longer attracts the national affection it once did. Revealing the real reason for the decision would have raised the question of how Qantas manages to get its way so often, despite growing resentment in the electorate. And pretty soon the talk would have turned to lobbying.

Coincidentally, Qantas’s Chairman’s Lounge — the airline’s network of free luxury lounges for handpicked chief executives, judges, politicians and senior bureaucrats — has been the subject of critical comment in the Australian Financial Review this month. The paper reported that Nathan Albanese, the prime minister’s twenty-three-year-old son, was among those entitled to enjoy the Lounge’s benefits, which include food, drink and business facilities in pleasant, secluded locations at most Australian capital city airports.

Singling out one Lounge member might have been unfair, but it did raise an important question: should politicians be accepting a gift of such value from a government-regulated company? Blocking Qatar’s expansion into Australia harms both consumers and Qantas’s domestic rival Virgin Australia, which has been denied the additional passengers Qatar Airways would have fed into its routes. All of the cabinet members who made that decision have been offered — and we know have accepted — membership of an exclusive club.

The fact that key politicians list their Chairman’s Lounge membership in parliament’s register of members’ interests — usually alongside their free Foxtel subscription — doesn’t make it right. Lawmakers (and their spouses and other family members) are receiving the equivalent of thousands of dollars from an Australian company that benefits directly from their decisions. The register’s limited transparency doesn’t change that.

And it’s not just about Qantas. Among the gifts declared by federal parliamentarians are memberships of their local RSL or racing clubs and tickets to concerts and high-profile sports events. The quid pro quo may not be clear, but it’s there — if not, who would bother? It may be that businesses are out to buy access, or simply to promote an event by luring well-known faces into the audience. Either way, they want something.

Whatever the motivation, the quo being bought by the sponsor’s quid isn’t the politicians’ to give. Their reputations, their influence and any executive power they wield is res publica — a public thing. It belongs to the Australian state and, by implication, to the Australian people.

But there’s a second reason why membership of the Qantas Chairman’s Lounge is a concern: it comes against a backdrop of a transparency regime that is miles behind those of other Western democracies.

While the European Union’s transparency arrangements aren’t perfect, at least journalists and other outsiders can broadly sketch out what lobbyists are up to. For example, we know that EU competition commissioner Margrethe Vestager met with Amazon on 21 June to discuss artificial intelligence, and that Meta had discussed digital-platform regulation with her a couple of days earlier. It’s all logged and readily accessible; and only registered lobbyists are allowed to book a meeting.

Ireland’s mandatory lobbying register goes even further. Any contact between politicians or public servants and company lobbyists has to be reported — by the company. Even a chance meeting in the aisles of a supermarket needs to be logged. A few clicks of your mouse will reveal the dates meetings occurred, who was there, and what was discussed.

Here in Australia we only know that Qatar Airways enlisted Australian lobbying firm GRACosway on 27 July because the airline, owned by the Qatari state, has to report its movements to Australia’s foreign influence register. Yet Qatar Airways doesn’t appear among GRACosway’s clients on the separate lobbyist register.

There’s simply no way to find out what contact there has been between lobbyists and government officials; meetings aren’t made public and it’s impossible to know what was discussed. The names of the lobbyists engaging on specific issues aren’t disclosed.

The lobbyist register does tell us that Qantas uses SEC Newgate, a firm with registered lobbyists that include an adviser who worked in Albanese’s office between May 2022 and March 2023. But we don’t know what meetings were held between the firm and government decision-makers in the lead-up to the Qatar Airways decision, or who attended those meetings.

This Wild West of lobbying means that an invitation-only club that counts most federal politicians as member becomes an opportunity for access — access that’s ultimately controlled by the chairman of Qantas, who issues the invitations. Any lobbyist or company executive lucky enough to have a membership in his or her pocket can easily find a way to bump into decision-makers while the warm face washers are being handed out or have a chat while queuing up for the hors d’oeuvres.

Managing this kind of access to our elected representatives is a remarkable amount of power for the Australian state to hand over to a business — a business that stands to gain from policy settings put in place by the lawmakers who accept its hospitality. The government’s decision to stymie Qatar Airways’ Australian expansion may well have been justified, but it has been tarnished by an institutional lack of transparency and the conflicts of interest underpinning Australia’s political classes. •

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Many saw the election result as a tipping point, signalling that Australia’s longstanding and very stable two-party system was finally on its way out. Its dominance had been gradually eroding and, this time, more than 30 per cent of voters looked elsewhere to cast their primary vote. As it transpired, Labor won government with a majority of seventy-seven seats in the House of Representatives but a lower primary vote than it had achieved in 2019. It optimistically attributed this to “strategic voting” by supporters temporarily shifting their primary votes to non-Labor candidates deemed capable of beating Liberal incumbents. Labor polled exceptionally strongly in Western Australia, winning four seats from the Liberal Party.

While the Coalition parties made much of their primary vote being slightly higher than Labor’s, the Liberal Party also had a historically low primary vote. In other democracies, the Covid-19 pandemic shored up some faith in the “wartime” governments dealing with it, at least initially. By 2022, though, the same incumbency benefit was not enjoyed by the federal government in Australia. Nor did the lowest unemployment rate in almost fifty years save the government from defeat (or the treasurer from losing his own seat in Kooyong). Prime minister Scott Morrison, who had become the most unpopular Liberal leader for more than thirty years, was targeted relentlessly during the campaign. The “miracle” of his 2019 electoral victory, in the face of opinion polling predicting a Labor win, did not occur twice.

The longer-term trend in Western democracies — reinforced by the Australian election result  — is that the major (or traditional) parties can no longer rely on lifelong voters. The success of Australia’s teal independents reflected widespread reaction against major parties perceived to be operating in the interests of the political class and donors, and ignoring substantive policy issues — such as climate change — that mattered to Australians. Political scandals over sexual misconduct contributed to this disenchantment and to the increased salience of gender issues.

If the 2022 election could be seen as a watershed moment for Australian voters, the extraordinary events that transpired between the 2019 and 2022 elections certainly increased the importance of certain policy issues and voters’ critical stance on the government. The Morrison government, like its counterparts across the globe, faced the daunting task of dealing with a global pandemic. Significantly, the 2022 Australian election campaign coincided with a period in which the country had the highest daily infection rates in the world.

Climate change also loomed large in the wake of record-breaking bushfires and floods since the 2019 election. Between September 2019 and March 2020 the Black Summer bushfires burned an unprecedented 18.6 million hectares of bushland. “Once in a century” floods in March 2021 severely affected communities in greater Sydney, the Hunter region and the mid-north coast of New South Wales, and around Queensland’s Gold Coast. These events were repeated a year later, with severe flooding affecting Brisbane, the NSW Northern Rivers and Sydney. The Insurance Council of Australia reported almost 200,000 claims from the 2022 floods, or more than $3.3 billion in insured losses.

Despite the severity of these events, the theme of climate change was not prominent in the campaigns of the major parties, although the prime minister’s apparent lack of empathy with flood and fire victims became part of the negative campaigning against him. The Coalition government was particularly vulnerable on climate change, and its attempts to reframe the issue were singularly unsuccessful. One discursive tactic tried well before the campaign proper was that climate change would “ultimately be solved by ‘can-do’ capitalism, not ‘don’t-do’ government.” This attempt at free-market framing was no more successful than the ubiquitous “freedom” ads of the United Australia Party funded by billionaire Clive Palmer.

Voters were looking for alternatives to the two-party system and they were also engaging in politics in new ways, both online and offline, in the community organising of the “Voices for…” movements. The election campaign moved further online, and citizens creating and sharing memes were as visible as more traditional party efforts. Within this landscape the visual elements of campaigning were more important than ever. Digital disruption and disinformation — so prominent in 2019 — were also a feature, but so were more concerted efforts to deal with them.

Not only did the election bring a change in government; it also saw the lowest primary votes for both major parties and the election of the greatest number of independents to the lower house since the formation of the Australian party system. The success of the teal independents and the Greens, and the appetite voters showed for “doing politics differently” suggested the dominant model of electoral competition might no longer be the two-party system. At the very least, the continued usefulness of the two-party-preferred vote as a way of conceptualising and predicting Australians’ voting behaviour has been cast into serious doubt.

A key outcome of the election was a widening split between the salience for voters and the salience for the major parties of long-term issues such as climate change and transparency in government. “Localised” politics, community campaigning and candidate quality were more prominent than in recent elections, in combination with the changing nature of campaigning in an evolving digital media landscape.

Another issue that unexpectedly took off was the Coalition’s broken promise to introduce a federal integrity commission. Integrity issues were highlighted by the teal independents and the Greens and, along with gender issues, became part of the negative depiction of Morrison that dominated social media. The Coalition unsuccessfully attempted to deflect attention from integrity issues by suggesting they were of no interest to ordinary voters and that the focus should instead be on cost-of-living issues and economic management — their usual electoral strengths.

Along with climate change and integrity issues must be mentioned gender issues, which were more prominent than in any election since 1972. The Morrison government’s seeming incapacity to deal with issues of sexual misconduct in the parliamentary precinct served as a touchstone for women’s disenchantment with the government on a range of issues. Veteran political journalist Paul Kelly was taken by surprise (and won a Gold Ernie Award) for his 2021 prediction that “the women’s movement won’t decide the next election.”

With so many high-profile ministers (and purported future party leaders) falling victim to independents’ campaigns on these issues, the Liberal Party faces the daunting task of rebuilding and — along with the Nationals — re-establishing its relevance with Australian voters, particularly women, socially progressive economic liberals and younger Australians.

The 2022 federal election also marked a profound shift in how the country runs its elections. A record proportion of voters cast their ballot before election day through either early or postal voting. While this trend was no doubt accelerated in 2022 by Covid-19, it builds on an underlying preference for convenience and arguably on disengagement from politics — with voters casting an early ballot to switch off from the long campaign.

With fewer than half of all voters casting their vote on election day, it appears that we have moved from an election day to an election period. This is a trend that is highly unlikely to be reversed, with potentially significant implications for the nature of elections as democratic rituals. It also has implications for small parties and independents because non-incumbent candidates can struggle to staff polling booths for extended periods.

The traditional media were criticised during the campaign for a seeming preoccupation with the performance of leaders and the possibility of missteps, with the hashtag #ThisIsNotJournalism trending on Twitter. In the very first week, Labor leader Anthony Albanese was unable to recall either the unemployment or the cash rates during a press conference. The government and the conservative media seized on the misstep to discredit Albanese’s economic expertise and cast doubt on his leadership abilities. But it also became illustrative of a style of politics that characterised the election: a focus on “gotcha” moments and detail from which bigger policy issues and debates were notably absent.

Having learned from the mistake of campaigning in 2019 on complex reforms (such as overhauling tax policy in areas like imputation credit refunds), the Labor Party focused on a slimmed agenda of manufacturing, wage growth, gender pay parity and housing. The Coalition responded by repeatedly emphasising its record of economic management, leading to what it described as “jobs and growth.” This dynamic left major policy issues prominent in the minds of voters — such as climate change — out of the contest between the major parties and in the hands of the Greens and the teals.

Despite the major parties’ best efforts to keep the campaign focused on preset announcements and policy agendas, significant events occurred during the official campaign period that challenged both leaders to respond in ways that were not scripted. These included the announcement of Solomon Islands’ security pact with China early in the campaign, which made regional security a significant issue, though not in a way favourable to the government.

On 3 May, the Reserve Bank of Australia lifted the official cash rate by 0.25 per cent — the first of eight increases during 2022. This was the first time since the 2007 federal election (when Liberal prime minister John Howard was ousted by Labor’s Kevin Rudd) that such an increase had occurred during a campaign, and it cemented economic management, the cost of living and housing affordability as key campaign issues.

Compared with other recent federal election campaigns, the 2022 election saw a heightened focus on individual candidates and constituencies. While all elections feature scandals involving candidates, the attention given not just to individual seats but also to the competencies of individual candidates was highly unusual. In part this focus can be explained by the momentum behind the localised campaigns of the teal and “Voices for…” independents, but it could have also been a broader consequence of the renewed importance of place and community that was felt so acutely during the Covid lockdowns.

The national media were captivated by the controversial candidate Katherine Deves, who was selected by Morrison to contest the northern Sydney seat of Warringah against independent Zali Steggall. Deves’s vocal stance against the rights of trans Australians was interpreted as a dog whistle to the Liberals’ conservative voter base. In other electorates, meanwhile, the suitability of candidates was being questioned based on geographic representation and appropriate reflection of ethnic diversity.

Labor’s Andrew Charlton and Kristina Keneally — both contesting seats in western Sydney — were caught up in these debates. Charlton — despite his political credentials as a former adviser to prime minister Kevin Rudd — was criticised for not living in the electorate. Former NSW premier and senator Kristina Keneally, also attempting to win a House of Representatives seat, was criticised in a similar way — but the party also faced strong opposition to the fact that it had not fielded a candidate who reflected the diversity of the electorate’s population. Independent and Vietnam-born candidate Dai Le ultimately won the seat of Fowler from Labor.

The victorious Albanese government got to work quickly, embarking at high speed on its election commitments, including preparation for a referendum on a Voice to parliament, legislation to introduce a federal integrity commission, and a jobs and skills summit. Both Albanese and foreign minister Penny Wong embarked on international diplomatic visits to the Pacific region, to security summits in Japan and Spain, and to Paris to “reset” Australia’s relationship with France, which deteriorated after the cancellation of a multibillion-dollar defence submarine contract in 2018.

The government itself was more diverse than ever before, with a record number of women — including an Indigenous woman, Linda Burney, holding the Indigenous Australians portfolio.

Doubt continued about the legacy of the Morrison government. In August 2022, it was revealed that Morrison had been secretly sworn into multiple ministerial portfolios, including health, finance, home affairs and industry. He defended these actions as necessary in a time of unprecedented crisis and uncertainty caused by the Covid-19 pandemic, but his actions were widely criticised as contrary to fundamental principles of collective ministerial responsibility and open and transparent government.

While the implementation of Albanese’s policy agenda began with considerable speed, the economic context created — and will continue to create — significant challenges for the new government. Saddled with its election commitment to proceed with the Stage 3 tax cuts for the wealthy, the government faces an incredibly difficult mix of rising inflation, rising interest rates and falling wages. This will significantly constrain its fiscal policy options and presents a scenario for industrial unrest that could become difficult for Labor to resolve given its voter base and election commitments. •

This is an edited extract from Watershed: The 2022 Australian Federal Election, edited by Anika Gauja, Marian Sawer and Jill Sheppard and published by ANU Press, the latest in a series of detailed post-election analyses dating back to 1975. Contributors to the book — which can be downloaded free of charge — include Carol Johnson, Murray Goot, Marija Taflaga, Glenn Kefford and Stephen Mills, and Anthony Green.

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Can the tricky manoeuvre be executed successfully? Well, the experiment is under way, let’s put it that way. It is too early to tell.

Can older creatives even hope to discern the preferences of younger consumers? Can cultural institutions like the ABC still preside over broad-based platforms that avoid the trying-to-be-all-things-to-all-people trap — platforms that nevertheless offer satisfying and stimulating material to enough subgroups of citizens, in any one week, to justify their continued existence?

Pity the programmer or decision-maker in any creative outlet pitching ideas amid constant social media reactions and furious streaming competition. A publicly funded broadcaster’s challenge is especially tough. It must be distinctively different from commercial offerings, read the emerging culture acutely, and maintain (most) pre-existing standards — all despite constantly challenged budgets.

This is hard, hard work. In the life-cycle rhythms of the past, younger people weren’t attached to institutions like the ABC — or orchestras or newspapers, for that matter. But they tended to shift closer once mortgages and children arrived and households were formed.

But to glance at the current figures for under-forties viewing, say, the ABC’s 7pm TV news is to see vividly the demographic cliff that prompts such consternation within the broadcaster and among other traditional news outlets. More than 80 per cent of broadcast viewers for this service are fifty-five or older.

To my mind, though, the vital question is this: how should the ABC, rather than panic, react wisely to changing patterns of cultural life? Many younger people do still rely on the ABC’s digital news offerings, which collectively rank as the second-most-visited digital news outlets in Australia. But are they actually trying as a group to keep up with the news cycle the way older Australians once did? It’s not too long since the question could reliably be answered “yes,” but not now, or not in the same way.

So how are broadcasters around the world approaching similar shocks? If the recent European Broadcasting Union conference is any guide, then a lot of them are busily absorbed in the same quandary. The Danes distilled it into a few words: younger people are seeking more content, and older listeners spend more time listening.

Attendees created various “audience-needs states” to describe the drivers of media consumption: keeping me in the loop, helping me escape, keeping me company, broadening my horizons and helping me buy “social currency” (presumably to join in water-cooler conversations). As they concluded, you could hit two audience-needs states at once, but not easily three.

The Danes are looking at the gaps: where are needs being met and where not? The phenomenal growth of podcasting has been documented virtually everywhere (the BBC reported a 27 per cent rise in titles so far this year), and it was no surprise that true crime was the most popular genre — interestingly followed by psychology and climate.

Swedish radio is actively engaged in this expansion, setting up trans-functional teams to release new podcasts, and trading on their experience managing complex production and content. The Canadians, via their CBC network, are particularly active in developing audio resources.

Some of the standout podcasts offered fascinating insights. The Moth, which has prioritised people telling their own life stories over its successful ten-year life, emphasises this advice to its would-be participants: “Tell stories about your scars not your wounds.” Then it works with them to achieve just that.

Slow Burn, a Slate production, has achieved a phenomenal one hundred million downloads over its six-year lifespan. It is highly produced, and thus not cheap, and makes much use of archive material to animate recent historical events, including Watergate, the Bill Clinton impeachment, the move to the Iraq war, and the Rodney King/LA riots of 2021.

The News Agents is the star achiever of Britain’s newest kid on the block, Global Media & Entertainment. Backed by big money and using well-known ex-BBC talent including Emily Maitlis, Jon Sopel and Lewis Goodall, it has been downloaded a massive twenty-four million times over the past seven months (compared with BBC News’s eighty-five million over four years). Significantly, the company puts immense emphasis on strategically marketing their material via Twitter, TikTok and YouTube.

In fact, one of the common strands that emerged at the conference was summarised nicely by Radio France people: produce less, distribute more. The need to spread good-quality content across younger people’s platforms was seen as critical.

Other interesting insights about changing cultural tastes came last month from the perceptive RedBridge group in Melbourne. In a nutshell, after talking to young consumers, the research shows they follow each other’s news choices. “In terms of how news is consumed now,” writes the company’s Alex Fein, “news items from major outlets are now divorced from their publication’s context — that is, almost no one is actively going to news sites and reading them as though they are digital analogues of newspapers.” She goes on:

Instead, news items are read by people in an entirely new context: through the validation of their social networks. People in their social networks will link to an article, thus conferring some (limited) legitimacy to the item on its own. And this is key: the item’s legitimacy is fast becoming less the product of the source publication and far more a product of who inside the social network has recommended it. Some, particularly older people, are still watching television news, but they are watching it sceptically.

Young people, Fein argues, are increasingly rejecting both the form and content of old-style news. They find much of it “not relevant to their lives” and see a lot of media as “a small group of people largely talking to themselves.” And they find the news unspeakably “depressing” and actively avoid it for their own mental health. But she does say that new media outfit Crooked Media in the United States — which promises to not “just focus on what’s broken, but what we can do to fix it” — has developed a model that shows a different approach is not only possible but can be done very profitably as well.

I don’t claim to have sampled all these possibilities, but surely this is material for the ABC to work with? What I do know is that the broadcaster’s employees are constantly being told that demographic cliffs pose an existential crisis for us — that the once-assumed ABC brand identification among the broad populace is dropping, that usage patterns are moving increasingly fast.

Naturally, this prompts questions about our purpose as a public broadcaster. Do we understand our audiences? Can we articulate the tone that must be striven for and the tone that must be avoided?

An intriguing public service metric has been developed within the European Broadcasting Union — a kind of public service algorithm — with points notionally assigned to elements of the production to determine its fit. The yardsticks are telling: variety in terms of depth and breadth; importance (or what listeners and viewers need to know); age appropriateness; topicality; quality; local versus global; distinctiveness; and locally relevant languages. It comes back to the irritate–alienate dilemma.

Those two verbs are mine, by the way, based on gut instinct and personal experience of big changes in the past that didn’t turn out as planned. The 1985 revamp that turned the ABC’s 7pm TV news into The National, starting at 6.30pm, aimed to recruit a bigger available audience earlier in the night and fulfil the dream of a much wider audience. What wasn’t anticipated were complaints from diehard ABC consumers arriving home from work too late to access the earlier timeslot and furious about the disruption to their established household habits.

We were fiddling with an institution that was important in people’s lives. They didn’t approve and said so very loudly. I was there, and it is seared into my memory. Whatever the cool analysis, the move backfired, even though it helped shake up ABC newsrooms. The main bulletin, such a shopwindow of ABC information-giving and prestige, moved back to 7pm a year later.

Tastes and habits have fundamentally altered since then, of course, and are changing as we speak. But The National’s fate encapsulates an exquisite dilemma well known to many advertisers and marketing types: how to refresh an established, even venerable, brand and attract newer consumers while not losing your regulars? Never be cavalier about existing customers, as one adman insisted to me.

So engagement is still there. But that sure-footed confidence about gaining, in any one week, a decent slice of broad-church Australian viewing has become more brittle.

In times of extraordinary volatility — around cultural values, technological change, emerging communities of new chums — the challenge surely lies in posing the right questions about what will last beyond taste-frenzies, and what offers depth and delight to a majority of the culture. This is hard creative work — a dose of humility never hurt either — but supremely worthwhile.

The respected community researcher Neer Korn, who has advised previous ABC boards, insists that the overwhelmingly important factor governing Australians’ attitudes towards the broadcaster is trust. We are a known factor, warts and all. He reiterated to me recently, notwithstanding all these changes I’ve outlined, that the importance of maintaining this trust — via our people, our overall approach — can’t be overstated.

Denial is no solution but neither is panic. And never forget Joni Mitchell’s “Big Yellow Taxi” wisdom: you don’t know what you’ve got till it’s gone. •

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US president Joe Biden had rushed back to Washington from the G7 summit in Hiroshima to negotiate a debt-ceiling deal with Congress. Otherwise he would have joined Modi, Albanese and Japan’s prime minister Fumio Kishida in Sydney for a meeting of the Quad, that relatively new grouping seen in American and Australian circles as a way of countering the two Asian countries’ diffidence about lining up against China. (Japan’s diffidence reflects its post-1945 constitution’s bar on non-defensive use of force, India’s its longstanding non-alignment doctrine.)

But what if the Quad instead became a forum for Japan and India to enlist Australia’s help in persuading Washington to give China some space? Just such a proposal is put forward in “Asia’s Future at a Crossroads: A Japanese Strategy for Peace and Sustainable Prosperity,” a paper published in Tokyo at the end of July.

The paper comes not from familiar members of Japan’s left but from Japanese scholars and a South Korean co-author who mostly gained their doctorates in the United States. The two lead authors, Mike Mochizuki and Kuniko Ashizawa, are professors at George Washington University in the American capital.

In essence, the paper argues that Japan should lead a “middle power” effort to lower tensions in Asia. “As part of its middle power diplomacy,” the scholars write, “Japan could also build on the Quad… and take the lead in promoting a ‘middle power coalition’ among Japan, Australia, and India, and thus lead the agenda-setting of the Quad.”

The coalition could then be extended to include other middle powers in the region, including South Korea and the ASEAN countries: “In this process, it would be effective to envision a ‘middle power quad’ by inviting South Korea to join the Japan–Australia–India coalition. By building on its partnerships with middle powers in Asia and in Europe, Japan should vigorously engage China to stabilise bilateral relations as well as to cooperate on pressing transnational challenges.”

The paper’s critique and proposals may upset comfortable assumptions in Washington and Canberra. “Rather [than] being solely dependent on the United States,” it says, “Japan needs a more autonomous foreign policy — what might be called a ‘pro-American, autonomous diplomacy.’” Instead of being “self-righteous” about values-oriented foreign policy, Japan should respect political diversity and promote peaceful coexistence, resisting efforts to divide Asia into a struggle between democracies and autocracies.

This vision is offered as a counterpoint to the concept of the “Indo-Pacific” — a formulation developed by Canberra pundits and adopted by the United States — which “diminishes the importance of continental Asia and suggests a regional orientation designed to counter and even contain China.”

The authors see the National Security Strategy announced by Prime Minister Kishida in December as a “180-degree turnaround” from longstanding Japanese defence policy. It included a doubling of defence spending to 2 per cent of GDP and an arsenal of new Tomahawk cruise missiles designed to strike back at China and North Korea. Commenting on the counterstrike capabilities of the missiles, they argue that “what would only be of tactical use during a military conflict is recklessly justified from the logic of strategic deterrence.”

Rather than treating Australia as Japan’s most important partner in middle-power diplomacy, the authors turn to South Korea: an established democracy and developed economy (one of the world’s ten largest) with per capita income equal to or exceeding Japan’s.

“Both countries [Japan and South Korea] are close allies of the United States; and they both see North Korea’s nuclear and missile programs as acute threats and are concerned about China’s military build-up and coercive behaviour,” says the paper. “But at the same time, they share a deep interest in preventing a military conflict in East Asia that would have devastating consequences for both countries; and they want to maintain close and stable economic relations with China, which is their largest trading partner. In short, both Japan and South Korea desire an Asia that is not divided into two conflicting camps and would prefer a region that is open and inclusive.”

The scholars believe the new version of the Trans-Pacific Partnership — the trade, investment and data pact Australia and Japan pressed ahead with after Donald Trump withdrew the United States — should be opened to simultaneous admission to both China, once it meets its qualifications, and Taiwan.

The paper’s authors aren’t arguing for an unarmed Japan. But they fear that conflict over Taiwan would have a devastating impact on Japan, probably as a result of Chinese attacks on US bases there. They agree that the United States must show it could beat off a Chinese invasion of Taiwan. “Japan can best contribute to this deterrence by denial by improving the resilience and survivability of US and Japanese defence assets in Japan and by strengthening Japan’s own capabilities to defend its own territory, especially its southwest island chain that is close to Taiwan.”

The key point is that the capacity to strike Chinese military targets on the mainland with missiles would not add greatly to deterrence, since China has too many targets and could rain fire back on a more compact Japan.

While the Biden administration has recently emphasised that America’s “One China” policy hasn’t changed, calls by Congress members and former officials to drop the policy, extend diplomatic recognition to Taiwan and defend Taiwan unconditionally are “especially provocative” and have raised the danger of conflict over Taiwan.

Japan’s aim “should be to maintain the conditions for preserving the status quo until the day comes when China and Taiwan can find a peaceful solution to the issue of unification,” the scholars urge, adding: “Moreover, Japan should not base its policies on forecasts of imminent military conflict or Chinese purported deadlines on unification and should not support the drawing of various ‘redlines.’”

The proposals in “Asia’s Future at a Crossroads” are likely to be welcomed by those senior figures in Australia’s foreign affairs and strategic circles — mostly out of government positions now — who criticise an increasingly security-oriented approach to Asia, along with our tightening “interoperability” with US forces and an apparent concurrence in US primacy.

They also chime with the kind of ideas the foreign minister, Penny Wong, was putting forward in opposition, which have been submerged by the unequivocal embrace of the AUKUS agreement on nuclear-powered submarines and advanced technologies.

Some of Kishida’s December proposals are similar to contentious Australian moves by Scott Morrison and now Anthony Albanese. Notable among these are a closer commitment to the defence of Taiwan and general alliance war-fighting capability, and the acquisition of 2000-kilometre-range Tomahawks and other missiles to strike back at China. The difference here is that Australia’s missiles would have to be fired from submarines, ships or aircraft some thousands of kilometres away from Australia.

The key question is: how much influence will “Asia’s Future at a Crossroads” have in Japan? The answer is not much, at least immediately. The paper was published two days before Japan’s defence ministry, the Self-Defence Agency, came out with a new white paper that, as defence minister Yasukazu Hamada said, “explains how we will drastically reinforce our defence capabilities.”

On Taiwan, the white paper doesn’t go as far as Kishida’s Liberal Democratic Party predecessors — Shinzo Abe said a Taiwan conflict would be an “emergency” for Japan and Taro Aso suggested Japan could join Taiwan’s defence — but it strongly supports the “counterstrike” capability in case Japan comes under fire.

Still, the yearning for peace in Japan, ingrained since the wartime US firebombing and atomic attacks on its cities, will act as a political brake on rearmament and assertive power play. Despite the belligerent drift in Chinese security policy since 2012 under Xi Jinping, the notion of an underlying Asian affinity also remains.

That notion last surfaced in 2009 when a splinter of the Liberal Democratic Party called the Democratic Party of Japan, led by former LDP politician Yukio Hatoyama, swept into power, interrupting near-unbroken LDP rule since the end of the Allied occupation in 1952. The foreign policies of the incoming government so concerned Washington that US secretary of state Hillary Clinton handed Japan policy to the Pentagon. (One of the authors of “Asia’s Future at a Crossroads,” Kiyoshi Sugawa, was an adviser in the Democratic Party government.)

Three years later, with the Democratic Party in disarray, the LDP was back under Shinzo Abe, who set about turning Japan into a militarily “normal” state.

Yet the LDP’s Kishida has gone part of the way in the direction proposed in “Asia’s Future at a Crossroads” by rescuing Japan’s relations with Seoul from the plunge under Shinzo Abe over South Korean grievances dating from Japan’s 1910–45 annexation of that country. Helped by South Korea’s election last year of a more conservative president, Yoon Suk Yeol, and stepped-up missile testing and nuclear threats by North Korea’s Kim Jong Un, Kishida has developed a warmer partnership on several fronts, including defence.

In June, he also announced plans to expand staff in Japan’s foreign ministry to 8000 by 2030, a 20 per cent increase on current levels, in order to step up Japan’s engagement with the world, especially Asia, and counter China’s influence. While most reporting focused on China’s 7 per cent increase in defence spending this year, Beijing also said it was spending 12.2 per cent more on its diplomacy.

In Australia, meanwhile, the military brass section still dominates the foreign policy orchestra. The latest formal talks between Australian and US foreign and defence ministers, in Brisbane on 28–29 July, will have pleased China hawks and made critics of the alliance drift grind their teeth. In the background, some 30,000 American, Australian and allied defence personnel were engaged in the biannual Talisman Sabre war games.

Australia will be hosting more US forces, manufacturing missiles for both countries in two years, somehow getting hold of its US nuclear submarines despite problems in the US Congress, and — mentioned only vaguely — becoming more deeply involved in US space warfare capability. Albanese is out to pre-empt any criticism at the upcoming Australian Labor Party national conference in Brisbane.

The growing closeness to Washington has so far earned Labor no evident traction in getting WikiLeaks founder Julian Assange free of US efforts to extradite and charge him under its espionage law.

Some sign of a resurgence in the influence of the Department of Foreign Affairs and Trade came in April, when the government’s Defence Strategic Review recommended that it “be appropriately resourced to lead a nationally determined and strategically directed whole-of-government statecraft effort in the Indo-Pacific.” And glimmers of Foreign Affairs influence were evident when Albanese stressed the importance of diplomacy as well as deterrence and the need for “guardrails” to avoid conflict, and praised Biden for talking to China, at the annual Shangri-la Dialogue in Singapore in early June.

But Foreign Affairs still seems undernourished for a more central role. A departmental spokesperson tells me that “work is under way across agencies to implement the government’s response to the Defence Strategic Review,” but evidence Foreign Affairs is still a supporting act to Defence can be seen in one of its latest budget allocations: $52.7 million over two years from 2023–24 “to provide international policy advice and diplomatic support for the nuclear-powered submarine program.”

The sophisticated debate in Japan and India’s ambivalence about deeper military ties under the Quad (including its late withdrawal from the Talisman Sabre exercise) indicates the department has much work to do in guiding its political masters around this complicated region. And if Donald Trump does return to the White House, the idea of Japan, India and Australia using the Quad to handle America might not be so far-fetched. •

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The No pamphlet: equivocations and divisions

The negativity of the No pamphlet is striking, but it also raises a broader and more important question: what if its arguments are so effective that the No case wins? Apart from acknowledging that “we all want to help Indigenous Australians in disadvantaged communities” the pamphlet has nothing to offer if the referendum is lost. Labor may legislate the Voice anyway, but would the Coalition — which dominated the drafting of the No case — support such a bill?

The No pamphlet quotes a December 2022 warning by former High Court judge Ian Callinan: “I would foresee a decade or more of constitutional and administrative law litigation arising out of a Voice…” But the quote omits significant words that immediately follow: “… whether constitutionally entrenched or not.” What Callinan really believes, in other words, is that even if the Voice were merely legislated, as the Liberal Party has proposed, its actions would be subject to litigation in Australia’s highest court. The No pamphlet’s view is that such litigation risks creating “delays and dysfunctional government.”

The pamphlet’s omission of the words “whether constitutionally entrenched or not” is significant because Callinan was questioning Liberal policy, not just Labor policy. The Coalition had committed to legislating for a Voice, allocating $31.8 million towards that goal in the March 2022 budget. And Peter Dutton has since goaded the Albanese government to take the legislative path, saying this is the only way voters will know whether the Voice is worth having.

The pamphlet evades the question of a legislated Voice by declaring “There are better ways forward” but failing to propose any such way. It mentions a “less risky Voice option” without saying what that might be. Indeed, it suggests we should be satisfied with Australia’s existing machinery for Indigenous representation:

There are currently hundreds of Aboriginal and Torres Strait Islander representative bodies at all levels of government. This year the Government has allocated $4.3 billion for the National Indigenous Australians Agency, which has 1400 staff. This Agency’s website and corporate plan says: “We… ensure Aboriginal and Torres Strait Islander peoples have a say in the decisions that affect them.” There is no suggestion that this Voice will replace any of these. It will operate as one bureaucracy among many.

We can deduce from the No pamphlet that the Coalition is reluctant to take a clear position on a legislated Voice. It is keeping open its option to oppose; it will sniff the wind after the referendum. Partisan tactics determine the No pamphlet’s equivocations.

One of the Coalition’s tactical needs is to preserve a semblance of unity on the issue of Indigenous representation. This is difficult because among the No camp there are those who, on principle, reject not only a constitutionally enshrined Voice but any Indigenous Voice at all. Some of them present themselves as strict liberals, affirming a principle of formal equality that would never countenance any institution or law that differentiated among Australians. “Enshrining in our Constitution a body for only one group of Australians,” says the No pamphlet, “means permanently dividing Australians.”

There are two things to say about this assertion. First, merely legislating such a body would also “divide” Australians (if not “permanently” then for as long as that body existed). So (again) is the No camp for or against a legislated Voice?

Second, what is meant by “dividing”? In law and policy, governments are always making distinctions. Distinctions of age and income determine who is entitled to an age pension and who is not. Distinctions of region are part of our tax administration via the remote area tax offset. The Native Title Act and our heritage protection laws make use of the distinction between Indigenous and non-Indigenous Australians.

Both sides of politics accept the necessity of such distinctions. So no principle is violated if a parliament legislates a representative institution for Indigenous people. To enshrine such an institution in the Constitution would simply give a greater degree of permanency to a distinction that law and the policies of both sides of politics have been making for years.

The pamphlet implies (and invites you to agree) that any government that treats some people differently from others violates the principle that all Australians are “equal before the law.” This is nonsense presented with solemnity. The principle “equal before the law” is not violated when governments “divide” Australians in ways that are relevant to governing them. The point of a Voice — whether or not it is the subject of a referendum — is to give Indigenous Australians a say in how they are differentiated.

So the No pamphlet not only fails to be clear on the question of a legislated Voice, it also engages in muddled word play with the terms “divide” and “equality.” The primary purpose of the No pamphlet is to evoke risk and advocate No as prudence. There is no telling what the Voice might do; it “opens the door for activists.” Best keep that door shut.

To a remarkable extent the No pamphlet evokes danger by quoting the aspirations of Yes advocates — Megan Davis, Gabrielle Appleby, Thomas Mayo (twice) and Teela Reid. What they want is what we should fear, it implies. The pamphlet also quotes Greg Craven’s warning that the Voice may comment on “everything from submarines to parking tickets.” In what may be read as a dig at voting “from the heart,” the pamphlet tells us that Craven has said he will set aside his critique (“fatally flawed”) and vote Yes.

But the No pamphlet is no less emotional, appealing not to our hearts but to our self-preserving flight reflexes: “If you don’t know, vote no.” The pamphlet encourages readers to feel that the world is unknowable and we are menaced by “activists” who could even cancel Australia Day. This characterisation of named Indigenous Australians as a threat is intended to counter the aura their Indigeneity has acquired.

Reverence and gratitude for Indigenous Australia have been prominent themes for Yes. In the parliamentary debate on the referendum bill, nearly all the Yes advocates urged recognition of the duration of Indigenous occupation (sixty to seventy thousand years) as the nation’s ancient lineage. The Yes pamphlet restates the view that a Yes vote respects this deep history.

In the 118 speeches on the referendum bill, MPs differed in their treatment of the Uluru Statement. Nearly every Coalition MP simply ignored it, as if there had never been a Referendum Council (2015–17), twelve regional dialogues, a national assembly at Uluru in May 2017, and the poetic, consensus Statement from the Heart.

To ignore the Referendum Council process is essential to the No case, for it was in these meetings and in their eloquent climax that Indigenous Australians told fellow Australians the form they want constitutional recognition to take. The No speakers and the No pamphlet — while professing support for constitutional recognition — turn away from the dignity of that utterance and the integrity of the process that produced it. The only “process” to which the speakers and the pamphlet refer is the one they say the government denied them: “a Constitutional Convention to properly consider options and details.” The government, it says, has been “rushed and heavy-handed.”

In only one sentence does the 2000-word No pamphlet concede that the Uluru Statement exists: “the Uluru Statement from the Heart says a Voice is a first step, before a treaty and truth telling.” More to fear! For, as the pamphlet explains, “a treaty is an agreement between governments.” Although the Uluru Statement was careful to say that Indigenous sovereignty “is a spiritual notion” and that it “co-exists with the sovereignty of the Crown,” the No pamphlet traduces the Uluru Statement as foreshadowing an Indigenous government.

The Yes pamphlet: usefulness above all, but where’s parliament?

Most Labor and Greens speeches during the May–June debate on the referendum bill celebrated the Uluru Statement, some explaining that it was the product of a long, unprecedented and decentralised process of deliberation. Many Yes MPs enriched their speeches with phrases and sentences they clearly admired as eloquent and poetic. Many characterised the Uluru Statement as gracious, generous and a gift.

While the Yes pamphlet continues with the argument that a Yes vote will pay “respect to 65,000 years of culture and tradition,” the tone seems to have shifted since the parliamentary debate ended on 16 June. The Yes pamphlet eschews the Uluru Statement’s rhetorical firepower; in fact it doesn’t quote the Statement at all, simply saying that “the idea [of the Voice] comes from Aboriginal and Torres Strait Islander people” and “Aboriginal and Torres Strait Islander people have given us a once-in-a-generation chance.”

The Yes pamphlet’s primary argument is that the Voice will be useful. It will improve life expectancy, infant mortality and health, education and employment. Why? Because listening to the clients of a policy improves the effectiveness of the policy. How do we know this? Because although “the current approach isn’t working,” here and there governments are already listening.

The pamphlet offers three examples of programs that work well because Indigenous people are involved in their implementation: community-controlled medical services, a school in Arnhem Land, and Indigenous Rangers working on country. At this point, a reader undecided about how to vote might ask: but if such programs are already possible, do we really need to change the Constitution? Why doesn’t the government just legislate for Indigenous involvement in the design and implementation of every program?

The closest the Yes pamphlet comes to addressing this question is to say that “putting the Voice in the Constitution gives it stability and independence, now and into the future,” enabling Indigenous Australians to give “frank advice” and to avoid “getting caught up in short-term politics.” “The current approach is broken and the Voice is our best chance to fix it. No one thinks the Voice will instantly solve everything — but we will finally have the right approach in place.” These words illustrate the difficulty of the “useful” argument: the causal chain between constitutional entrenchment and “outcomes” is long.

The Yes pamphlet responds to the No camp’s months of fear-mongering by quoting Robert French (a former chief justice) and Geoffrey Lindell (a University of Adelaide emeritus professor of law) saying that constitutionally entrenching the Voice brings a “low risk” of litigation “for a high return.” Strangely, the Yes pamphlet doesn’t make the point that parliament — subsequent to the referendum — will have every chance to further reduce that “risk.”

In the weeks immediately before the Albanese government introduced the bill, much more attention was given to the role parliament would play in designing the Voice. The No pamphlet elides this step, implying with its analogies (buying an unseen house or an undriven car, signing a blank cheque) that the victory of Yes in the referendum would immediately bring the Voice into being.

When the No pamphlet mentions parliament, it implies that it is a weak body, subordinate to the government and likely to be weakened further by a bossy High Court. “Once the High Court makes an interpretation, parliament can’t overrule it.” While this is not wrong, it understates parliament’s authority.

When the High Court said in 1992 that “native title” exists, the parliament couldn’t say “no it doesn’t,” but it did have discretion over how to legislate native title. The case law on the Native Title Act refers to the legislation as authoritative, applying the principle that parliament, the locus of popular sovereignty, is the supreme maker of Australian law. If the referendum endorses the Voice in principle, parliament will have much scope to mould it.

The Yes pamphlet could have made much more of parliament’s post-referendum role. It makes clear that the Voice can only advise parliament and executive, but it fails to mention that parliament will ultimately design the Voice and determine its budget. Was it not worth a paragraph to assure voters that parliament will design a Voice it can live with?

Even more surprising is that the Yes pamphlet doesn’t make a feature of the eight “design principles” Linda Burney began to promote at the Woodford Festival in December last year — her response to the demand for “detail.”

Whether through evasion, negativity or omission, neither pamphlet makes a particularly impressive contribution to the referendum campaign. •

The post Yes and No: the official (but curiously incomplete) cases appeared first on Inside Story.

To recap. A decade ago a federal minister divided society into “lifters and leaners.” It was a variant on the old “dole bludger” trope that imagined many of the unemployed as spongers needing to be cracked down on, hard. Public compassion had to be tightly rationed and a sense of guilt imposed on those reliant on government support as an incentive for them to, somehow, pull themselves up by their bootstraps. Social welfare was to be as much a source of savings as it was a salve to society’s wounds. The “lifters” should be asked to lift as little as political calculation permitted.

In this nest robodebt was hatched. A minister proud to flaunt himself as a “welfare cop” and ambitiously keen to impress his colleagues was on the hunt for big savings. Obliging officials concocted an automated scheme using tax data to estimate the annual income of welfare recipients to see if they’d been overpaid. Debt notices, inaccurately calculated, were issued to hundreds of thousands.

But the scheme was illegal — and this was known by those developing and advancing it, who between them allowed cabinet to be misled and opinions about illegality ignored or suppressed. Attempts were made to deceive the ombudsman; inconvenient decisions by the Administrative Appeals Tribunal were treated with little respect and the member who made them failed to be reappointed.

The scheme was brought undone in various ways. While it had promised savings of a billion dollars, its resolution has cost taxpayers around twice that, and there could be more.

As the royal commissioner writes in her preface:

It is remarkable how little interest there seems to have been in ensuring the Scheme’s legality, how rushed its implementation was, how little thought was given to how it would affect welfare recipients and the lengths to which public servants were prepared to go to oblige ministers on a quest for savings. Truly dismaying was the revelation of dishonesty and collusion to prevent the Scheme’s lack of legal foundation coming to light. Equally disheartening was the ineffectiveness of what one might consider institutional checks and balances… in presenting any hindrance to the Scheme’s continuance.

How could it have come to this?

In some ways the answers can be found in the obverse of the royal commissioner’s recommendations.

Holmes stresses that developing a public service strong enough to prevent a repeat of something like the robodebt scheme “will depend on the will of the government of the day, because culture is set from the top.” She says that “politicians need to lead a change in social attitudes to people receiving welfare payments,” that “anti-welfare rhetoric is easy populism” not “confined to one side of politics” and that politicians “need to abandon for good (in every sense) the narrative of taxpayer versus welfare recipient.” They must abandon the “lifters and leaners” rhetoric, in other words, which has contributed to unemployment beneficiaries being pointedly designated as “JobSeekers” and the rate of payments kept at an impoverishing level.

In summary: robodebt is a failure of the very political leadership needed to avoid it. Cultural change must happen at the top.

But Commissioner Holmes also understands that cultural change is not a rabbit that can be pulled from a hat. It requires changes in organisational structures, laws, procedures and people.

On organisation, she recommends “an immediate and full review to examine whether the existing structure of the social services portfolio, and the status of Services Australia as an entity, are optimal.” It’s likely they are not.

Although the commissioner refrains from recommending Services Australia be made a statutory authority, it makes sense to do so. Where government functions and decision-making need protection from ministers, this is the best form of organisation to protect them. That’s why taxation, public broadcasting and other functions are housed in statutory authorities. The government should give cultural change a big shove and make Services Australia a statutory authority with clearly defined powers, better protecting it from inevitably resurgent political pressures to portray welfare support in “lifters and leaners” terms.

The commissioner recommends many changes to laws and procedures. They include establishing a legal framework for automated government services and a body to “monitor and audit” such services; reinstating a six-year statute of limitations on welfare debts; strengthening the ombudsman’s powers; reviving the Administrative Review Council; giving the public service commissioner powers to investigate the behaviour of former agency heads; providing a legislated code of conduct for ministerial staff; and much more. Curiously, none of the proposed legislative changes were anticipated in the Public Service Amendment Bill touted as a major reform and now before the parliament. Regardless, the commissioner’s legal and procedural reforms should be fully accepted.

But those recommendations don’t go far enough. While making telling observations about “the lengths to which public servants were prepared to go to oblige ministers,” the “lack of independence” exercised by departmental secretaries” and evidence of senior public servants being “excessively responsive to government, undermining the concept of impartiality and frank and fearless advice,” the commission could have done more to investigate why this is so. Yet Holmes says quite reasonably that she had “neither the time nor the resources” to consider wholesale public service reform.

Still, she does say that “the current government has emphasised that the public service must be empowered to be honest and truly independent” and has asked the public service commissioner to see that the performance assessments of senior staff “cover both outcomes and behaviour.” But that’s been the case for decades: the notion that performance assessments would ignore behaviour is absurd, and the commission drolly observes that the government’s instruction “does not go far enough.” Indeed it doesn’t.

For this reason the commissioner endorses those recommendations of the 2019 Thodey review of the public service that deal with the appointment and tenure of departmental secretaries. She observes, however, that “the extent to which these have been endorsed by the government is unclear.” Too right it is. Incredibly, there’s nothing about them in the current Public Service Amendment Bill, and that self-proclaimed bastion of integrity, the Department of the Prime Minister and Cabinet (encompassing the Office of the Secretary for Public Service Reform) refuses to say which Thodey recommendations have been implemented.

The departmental secretary, Glyn Davis, has recently mused about the need for a rethinking of Westminster guardrails: “How do we reinstate the idea that yes, ministers in the end are the decision makers, but public servants have this really important role about providing detailed advice, getting it right, making sure ministers have information and can tell them when they can’t do something?”

Rethinking? The fundamental failings in the public service’s robodebt advice were well known long before the royal commission reported. Davis and Gordon de Brouwer, the public service commissioner and before that the secretary for public service reform in Davis’s department, have had a year in which to think deeply. If the Public Service Amendment Bill is anything to go by, they have thus far come up empty-handed on the “guardrail” front.

It’s time to put aside exhortations from on high; they only seem to make things worse. And a stopper should be put on the dispiriting flow of modern management jargon, clichés and platitudes with which officials have clothed their thus far modest and in some cases ill-conceived proposals for improvement. It’s time to do something.

So, in addition to considering what should be done to ministers and officials whose behaviour fell so far short during the life of robodebt and thoroughly implementing the royal commissioner’s recommendations about structures and processes, Davis and de Brouwer should be pressing the government to implement Thodey’s recommendations on the appointment and tenure of departmental secretaries, as endorsed by the royal commissioner. They shouldn’t need to do any more “deep thinking” — they were both members of the Thodey review.

They should also turn away from the distracting dead cat dragged across the path by former departmental secretary and Crown Resorts board member, Jane Halton, who has piously said that, “What worries me is that there is a whole cadre of people who don’t understand that [providing frank advice] is essentially their job.” That’s nonsense. Officials who’ve failed with robodebt have likely understood their responsibilities only too well and their failings can’t be mitigated on the basis of misunderstandings.

So why has the commission found evidence of senior public servants being “excessively responsive to government, undermining the concept of impartiality and frank and fearless advice”? There’s no simple answer to that and the situation is befuddled by the character, motivation and working methods of the ministers and senior officials involved.

One thing can be said with certainty: the present laws whereby departmental secretaries can be summarily dismissed and left on the streets with shadows over their reputations does not encourage frank and fearless advice. Officials understand all too well it can be better not to rile ministers and then see their careers and reputations destroyed.

For the thousands of years of public administration, rulers have used intimidation to keep their servants in line. Mostly that has left rulers badly served by corrupt administrations. The great reform movements in Britain in the middle of the nineteenth century tried to stop this rot partly by developing a public service in which the appointment and tenure of officials were based on merit. Their dismissal was regulated by due processes and for stipulated causes because this was thought to provide efficient, effective and stable administration in which officials are better placed to advise ministers free of apprehensions about dismissal.

Australian public services inherited these tenets, but they’ve been progressively abandoned in the federal service over the past thirty years. Secretaries have been summarily sacked without explanation; concerns have grown and been forcefully reiterated by Commissioner Holmes.

Public Service Commissioner de Brouwer says a lack of tenure “doesn’t stop me from doing what I think I have to do.” Well, no one likes to admit to being intimidated, but it’s idle to think it’s not happening and that the intimidation doesn’t seep down the hierarchy. The arbitrary sackings have sent a message that’s been heard.

De Brouwer also says he’s not seen the traditional tenure protection for secretaries as a “core driver,” whatever this might mean. That is, he’s happy to turn a blind eye to what has been fundamental in British-derived public administration for going on 200 years. Yet if it’s not a “core driver,” would he like to open up all public servants to arbitrary dismissal? Or might that be too much for a public service aiming to be what it calls “a model employer”?

Certainly governments should be readily able to move departmental secretaries around, but that should not put them in the JobSeeker queue. As was the case for the first hundred years of the Australian Public Service, every effort should be made to find them other secretary positions or positions of a comparable status and remuneration. This has been a “core driver” — or in Glyn Davis’s language a “guardrail” — of Commonwealth public administration and its restoration would make a serious contribution to avoiding another robodebt. •

The post Do the robodebt recommendations go far enough? appeared first on Inside Story.

As I never tire of pointing out, by-election results tell us nothing about the next election. Because the stakes for electors are so small — nothing as important as who will govern for three years — they can vote on other things. Such as “sending a message.” Candidates can make much more difference at by-elections than at general elections.

So they are not dry runs for the main event, and any “momentum” generated by a result is illusory and short-lived, strictly limited to the reporting bubble.

But by-elections are invested with all sorts of magical properties by the political class, and so they can often matter, a lot, particularly when it comes to the fortunes of political leaders.

The Longman (Queensland, margin 0.8) by-election in July 2018 played a very large role in ending Malcolm Turnbull’s prime ministership. The result, a 3.7 per cent swing to the opposition, was routine and unexciting; not so Aston, Victoria (margin 2.8) in April this year, which delivered a 6.4 point swing to the government that opposition leader Peter Dutton is still feeling today.

Three years ago this month, at the Eden-Monaro (NSW, margin 0.9 per cent) by-election, Anthony Albanese faced his own first “electoral test” as Labor opposition leader, and it came very close to being a similar disaster.

Triggered by the resignation of the popular member Mike Kelly, it was held in the early months of the Covid pandemic when prime minister Scott Morrison, his summer troubles behind him, was recording the highest approval ratings of his career (in the high 60s). Those voters ended up giving only a small swing to the government, and Labor candidate Kristy McBain won with a 0.4 per cent margin.

Labor was very lucky to hold Eden-Monaro. The electoral commission’s ballot draw alone, with McBain above the Liberals’ Fiona Kotvojs, was probably worth more than 0.4 per cent. So was the decision of the Shooters, Fishers and Farmers Party to advocate (on how-to-vote cards) preferences for McBain before Kotvojs.

McBain’s candidacy itself was a very fine pick; before nominating she was mayor of Bega Valley Shire, which comprises a large chunk of the electorate. Like many political identities, her profile had risen during those disastrous 2019–2020 fires. The booths in that part of Eden-Monaro swung to her, the rest swung against. And Kotvojs, who had run in 2019, was hardly an inspired choice. A much stronger candidate, NSW Liberal MP Andrew Constance — still a rock star because of his criticism of Morrison during the fires — was in the mix for a while but didn’t make the final cut.

Back to this Saturday, though, with the hullabaloo following Dutton’s presiding over the first opposition by-election loss to a government since 1920 still ringing in the ears. The defeat damaged his leadership, and it is a brave person who would predict Dutton will still be leading his party in 2025.

It’s the exact bullet Albanese dodged in Eden-Monaro July 2020.

But all is not lost for the opposition leader, for the Labor Party is offering him a chance at redemption.

Fadden’s margin is 10.6 per cent. No government has contested an opposition-held seat with a margin of that size since Bob Hawke’s Labor ran in Groom (Queensland) in 1988. Its candidate didn’t even make it to the two-candidate-preferred count.

That’s not saying much, because in recent decades governments have been reluctant to run in opposition seats. The Howard government sat on its hands for all six (where margins ranged from 6.4 to 15.1 points). The new Rudd government fielded a candidate in Gippsland (Victoria, margin 5.9) in 2008, copped a nasty 6.1 per cent swing, and ignored the next four (margins ranging from 7.1 to 13.5).

Tony Abbott’s Coalition government ran in Griffith, Queensland, in 2014 (margin 3.0), and got a pretty good 1.3 point swing, but not enough to win it. Under Turnbull the government ran in Braddon, Tasmania (2.2) and the aforementioned Longman.

And Labor thinks it has a chance of a 10.6 point swing this Saturday? Obviously not. Even if it did snatch the seat, it would be lost again at the next general election. (Aston is different: with the benefit of incumbency Labor stands a better-than-even chance in 2025.) Is Albanese high on his own supply, assuming there’ll at least be a decent swing to Labor and the media will coo and fawn again, make life even easier for him and destabilise his opponent?

Or is a longer game afoot? The chances of a second by-election win in a row are astronomically small. A Liberal National victory would revitalise the opposition leader somewhat, and there’s actually a decent chance Fadden will swing substantially his way. And that would stiffen Dutton’s faltering standing. Is that what the prime minister wants? Does he just like having Dutton around?

Albanese seems to take “narrative” nonsense less seriously than most political leaders. The least inspiring opposition leader in memory, he stuck to his guns and refused to placate the commentariat’s demands for shock and awe. Small and steady won the race.

He probably would prefer to face Dutton than any of the likely alternatives (deputy Sussan Ley is the most likely) at the next election. Still, politicians don’t usually take steps like this, no matter how much sense they make in theory. They prefer an easy life in the short term.

Labor is running heavily on robodebt, the Liberal Nats on the cost of living. How will the competing “send a message” messages pan out?

Fadden will be in the headlines on Sunday, though we don’t know the font size yet. Any repercussions for federal leaders will take longer to play out.•

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In the early 2000s, the mining boom gave us full employment without any need for it to be an objective. But concerns that policy was not doing enough to deal with joblessness returned in the 2010s: with slower economic growth, the unemployment rate remained fixed in a range between 5 and 6 per cent without bringing forth any deliberate action by policymakers to shift it lower.

All the signs, however, are that the 2020s will be a new era of emphasis on full employment. The federal government’s 2022 Jobs and Skills Summit gave priority to the goal of achieving full employment. And in April this year the government immediately accepted the recommendation of the Reserve Bank review that the bank “should have dual monetary policy objectives of price stability and full employment, with equal consideration given to each.”

Achieving full employment — ensuring that the maximum possible number of the nation’s available workers are employed in jobs for as near as possible to the number of hours they want — has two main benefits. It maximises national output, and hence overall living standards. And it significantly improves equity, by lifting the incomes of people who would otherwise be unemployed and on income support, or are underemployed.

Pushing employment as high as possible also has the greatest benefits for the people who find it hardest to get work, including lower-skilled workers, the young, and people living in disadvantaged regions.

With Australia’s low unemployment rate of 3.5 per cent these equity benefits are on full display. Just one example highlights the point: in the 25 per cent of regions that had the lowest proportion of employed people before the pandemic, the employment rate grew by 2.2 percentage points in 2022 — about three times more than in the 25 per cent of regions with the highest employment rates.

The benefits of employment are, of course, broader than income. As Treasury secretary Steven Kennedy has emphasised, “working is associated with better mental health and lower rates of psychological distress [and] strong intergenerational benefits [because] children with parents who work are more likely to work themselves.”

All this might suggest that our objective should be to have everyone who wants to be employed in a job working exactly the number of hours they want — effectively abolishing unemployment and underemployment. But it’s universally accepted that’s not going to be feasible.

The labour market is in continual flux. For most new workers, looking for and finding a job takes time. Similarly for workers who lose their jobs, and often also for those who leave a job. Inevitably, at any point in time, some of the available workforce won’t be in work.

The costs of pushing employment growth too far also impose a limit. More of the available workforce in employment means less spare labour available to fill new jobs that are created, forcing employers to compete for workers by offering higher wages. Historical experience tells us that eventually wage inflation will become excessive, imposing major costs.

High wage inflation cuts off jobs growth. It also feeds into higher price inflation, making society worse off in other ways: the cost of living rises, the wealth of savers is reduced and economic activity is destabilised (including by the likely policy response of higher interest rates).

Setting a full employment objective is a balancing act. We want to use as much of the available workforce as possible to benefit national output and equity. But we want to avoid excessive wage inflation. The critical decision is what rate of unemployment achieves that balance. Many commentators see the trade-off resulting in a jobless rate of more than 4 per cent. But if I were setting a full employment objective at present, I’d be aiming for close to the current rate of 3.5 per cent.

Maintaining this rate would generate substantial benefits for national output and equity, compared with going back to our average rate of 5.5 per cent through the 2010s. Wage inflation has not been excessive at this rate of unemployment, either at present or on the other recent occasion when the rate of unemployment fell to about the same level, during the mining boom of the late 2000s. While wage inflation has picked up in recent months, much of this can be attributed to efforts to compensate for high price inflation rather than the effects of a tight labour market.

Fears that our low rate of unemployment could take us back to the spiralling inflation of the 1970s therefore don’t seem well founded. The Australian labour market is a different place today. Reforms to the wage-setting system in the early 1990s — primarily the shift to enterprise-level bargaining — and the fall in price inflation since that time have enabled unemployment to fall further before provoking concerns about wage inflation.

So far I’ve been talking about a full employment objective expressed as a target rate of unemployment, which is how it is usually thought of. But the shift back to a full employment objective also gives us an opportunity to consider whether that’s the best approach.

An alternative would focus on labour underutilisation, which takes in both unemployment and underemployment. We want people to have a job, but we will only make the fullest use of their labour if they are also working the number of hours they want. This matters because underemployment is an increasing share of labour underutilisation. By 2022, of the extra hours that could have been worked in Australia, about 45 per cent were a result of underemployment.

Having a broader measure also matters for how low we think it’s possible to push the rate of unemployment. More underemployment means the economy has greater spare capacity than the raw unemployment figures show. Wage pressures are therefore not as great as they have been at any given rate of unemployment. In this environment, holding down the unemployment rate poses less of a risk for wage inflation. It’s another reason why a target rate of 3.5 per cent is realistic.

In the short-term, existing Australian Bureau of Statistics data could be used to calculate underutilisation among members of the labour force. Longer term, a measure could be developed that also encompasses spare capacity among people not currently in the labour force.

Working to achieve a specific target for full employment means policy is directed towards improving wellbeing; and having a target that is easy to communicate also creates accountability.

Yet, it’s important to recognise that, even if the overall target is achieved, some groups will still be missing out to an unacceptable degree: First Nations people, people with disabilities, people living in disadvantaged regions, and other groups. So, beyond an overall target, goals to improve employment outcomes for those groups are an essential element of a full employment objective. •

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All the better when the incoming government employs its new-found authority to trash the former outfit’s legacy, a task the current administration has been discharging with some vigour.

Pollsters, meanwhile, have the government way ahead in two-party-preferred terms and the prime minister trouncing the opposition leader on personal ratings. This too is par for the course.

Tony Abbott, the most recent of this government-from-opposition species, was an outlier. Like Albanese, he had never enjoyed high personal ratings, but unlike this incumbent his post-election boost was modest. Within months of the September 2013 election the Labor opposition was ahead, and it largely remained there until Abbott was replaced by Malcolm Turnbull in 2015.

But the three incoming PMs before Abbott, Kevin Rudd (elected in November 2007), John Howard (March 1996) and Bob Hawke (March 1983), all generated voting-intention numbers and personal ratings during their first twelve months that peaked above anything seen under Albanese.

At this point in Rudd’s tenure, the GFC stimulus payments were starting to arrive in voters’ bank accounts. That financial calamity gave much-needed purpose to his leadership, which had seemed trapped in a news spin-cycle, addicted to quickly devised policy announcements.

Howard in April 1997 was a long way from his Port Arthur–elevated honeymoon, had three embarrassing ministerial resignations under his belt — and four more to come, mostly victims of his strict code of ministerial conduct — but his first budget had been very well received (much more, from surveys, than this year’s) and had worked brilliantly as a political exercise in delivering bitter medicine and blaming it on thirteen years of Labor. Still, by the one-year mark his personal ratings and the government’s polled two-party-preferred leads had slid to slightly below Albanese’s and Labor’s today.

By the end of 1997 the opposition was ahead, assisted by the government’s embrace of a GST and Democrats leader Cheryl Kernot’s defection to Labor.

Further back, Hawke was still riding high in early 1984, even if he was disappointing the true believers who had expected more Whitlamesque cage-rattling. His personal and party ratings remained stratospheric — until he called an election for December and the gap gradually narrowed to a modest victory. Howard, of course, after a shaky first re-election in which he lost the national two-party vote, went on to have the last and longest laugh.

Ultimately the GFC-induced fiscal problems proved diabolical for the Rudd government, providing a jarring contrast to the boom and the surpluses under Howard. On top of that, treasurer Wayne Swan was about as woeful a chief economic communicator as could be imagined.

What about the current government? According to the polls — and unlike Rudd’s and Julia Gillard’s, but like Hawke’s a lot of the time — it is generally seen as a better economic manager than the opposition. All else being equal, two strands often make it hard for Labor to do well on this rather important measure: the Liberals are generally seen as more economically responsible; and a party in office will score better than it does in opposition. I can’t think of a time when a Coalition government was not viewed as superior on economics, but there have been plenty of times when Labor governments weren’t.

The before-and-after economic situation around the 2022 election has been very different. By pure luck, this government can boast the first surplus in fifteen years. Treasurer Jim Chalmers learned his politics at the feet of Swan, but from such dire beginnings has developed into an effective public politician. His “trillion dollars of debt” mantra — as unfair as the “debt and deficits” narrative Abbott used against Rudd and Gillard — undoubtedly has at least some persuasive power.

And the prime minister? What are we to make of him?

Albanese’s rise to the top of his party was driven not by popular demand — he was little-known outside the political bubble — but by wheeling and dealing. It was his turn. As a factional boss, and someone immersed in politics his whole working life, his timing was brilliant: he reached the peak when a highly winnable election was in the offing. Remaining opposition leader for three years was arguably the bigger challenge.

America’s longest-serving president, Franklin D. Roosevelt (1933–1945), was once characterised as possessing “a second-class intellect but a first-class temperament” (a description that might apply even more aptly to Joe Biden). Albanese’s intellect is better than that, but unlike most predecessors he doesn’t seem to be a policy wonk or a details man.

From closer to home comes a 1996 quip from political commentator Cate McGregor (sometimes wrongly attributed to the late Labor speechwriter Graham Freudenberg): that new Labor leader Kim Beazley was the first since Ben Chifley “who doesn’t have a major personality disorder.”

It’s a good line when you think of the parade of grandiosity, narcissism and exploding egos we’ve witnessed, especially if we extend McGregor’s words through to Rudd. Albanese would sit in the Beazley category. But does it make for a good national leader?

We saw from 2019 to 2022 that Albanese has a realistic if unexciting view of what drives changes of government. Not for him the wild tales of opposition leaders dazzling the electorate with feats of derring-do, engaging the enemy in hand-to-hand combat on values, winning the hearts of the middle Australians who hold up the scorecards on election day. (The most obvious of this variety was Mark Latham, 2003–04.)

In reality, federal changes of government tend to occur when voters wish to dispose of incumbents and don’t find the alternative too threatening. In both 1983 and 2007 that fact was camouflaged by the extraordinary personal popularity of Labor’s leader — Hawke and Rudd respectively — though it ultimately had a questionable impact on actual votes. (In both cases the massive polled leads narrowed dramatically by election day.)

Albanese in opposition set no one’s pulse racing and never enjoyed high personal ratings or huge voting-intentions leads. Which means, one imagines, that he commenced his prime ministership without Rudd-like delusions of electoral grandeur.

He had plenty to be modest about. The election of 21 May 2022 was the first in which a party took office from opposition despite suffering a primary vote swing against it. Both sides recorded lows not seen since the second world war, and the winner lost the primary vote by 3 per cent. Preferences from a record-high Greens vote flowed 86 per cent to Labor, and it took office with a two-party-preferred vote of 52.1 per cent, the smallest for a federal change-of-government election since 1949.

A vague, bland quantity, Albanese got out of the way of electors’ anger and allowed the votes, either directly or through preferences, to flow through to him and his party. The electorate’s “pox on both their houses” attitude was also reflected in the record-sized crossbench.

But now Albanese is prime minister — and a rather well-regarded one at that, at least for the time being.

“Small target,” coined in 1996, is not the only Howard comparison Albanese invites. Both are decidedly charisma-free and not particularly eloquent, and so our storytellers have settled on their very ordinariness as explainers of their success. But Howard had shown more policy ambition by this stage. His government broke promises and blamed it on the Keating government and its finance minister, who was now opposition leader.

Howard also enjoyed a much friendlier Senate. While the current one’s “progressive majority” excites some Labor true believers, it is highly problematic for the government. Legislation can only be passed with the cooperation of either the Coalition or the Greens plus someone else (most likely ACT independent David Pocock). That’s not as difficult as Rudd experienced during most of his first term, when (if the Coalition opposed) the government needed the Greens plus Nick Xenophon plus Family First’s Steve Fielding, but it’s still very restrictive.

Further back, Hawke had a one-stop option in the “centrist” Democrats. Howard (before his 2005–07 Senate majority) had it even easier, able to choose either the Democrats or someone else.

Unlike under Julia Gillard, the Greens currently have no incentive to make life easy for the government. In fact, product differentiation — being seen to drag Labor to its positions — is the chief string in the minor party’s electoral bow. We are currently seeing this play out with housing policy, but it will afflict other issues in the years to come.

Given the reality of the upper house, perhaps there’s little point in trying to do too much. The Abbott government’s first budget showed the disaster that can come from broken election promises jammed in the Senate: the odium of unpopular policies without the payoff of having those policies settled into law.

So maybe the Senate partly explains the government’s policy timidity.

There is one area in which Albanese does appear to differentiate himself from recent predecessors: his refusal to get trapped in the twenty-four-hour news cycle. This afflicted Rudd most obviously, but also most prime ministers since. The idea that the media beast can’t be ignored, that it must be fed or it will devour you, enjoyed much currency only a few years ago but is little-heard now.

Is this the product of a level-headed PM and his office, or has the nature of the beast changed? Is Albanese just getting an easy media run (outside News Corp) — and if so, will it turn eventually?

In the past, prime ministers’ longevity (and treasurers’) has been underpinned by economic booms, which are mostly dependent on the international climate. That precondition doesn’t seem likely in 2023 or the foreseeable future. The inflation, the declining real wages, the high interest rates and the housing shortage aren’t going away. The possible international recession will continue to hover threateningly.

Can we detect in this prime minister a Kevin-like aversion to jeopardising the strong polls? Rudd also began his term determined not to break campaign promises, but he eventually ended up doing so closer to the next election, when it was harder to sheet it home to the defeated government. Rudd, instead of developing the authority that comes from making voters eat their greens, ended up being seen as a prime minister afraid of making difficult decisions.

We are only one year in, which as past governments have shown tells us nothing about how things will pan out. And we’ve not seen how Albanese copes under pressure, in difficult times. They will come, sooner or later. •

The post How far will level-headedness take Anthony Albanese? appeared first on Inside Story.

Security and defence agencies in both countries seem determined to drain any warmth from a relationship founded on a high degree of economic complementarity. In the Pacific, China’s attempts to become the security partner of small island nations have set off alarm bells; on the mainland, a vague new anti-espionage law has rattled foreign businesses. In Australia, shrill warnings continue about China’s influence-building, spying and emerging military threat, and the federal police have charged an Australian IT specialist in Shanghai under the Turnbull government’s foreign interference law.

The international setting isn’t helping. The United States and China, the two contestants for hegemony in the Western Pacific, are in the midst of a profound re-evaluation of the economic paradigms of the past forty years and how their two economies should connect.

China’s longstanding economic model, which fuelled rapid growth out of Maoist poverty, has come to the end of its road. After a decade’s reliance on construction, its domestic economy is burdened by large-scale debt and enormous numbers of empty apartments. Hopes of graduating from simple manufactures into high-tech products are threatened by American, European, Japanese and South Korean moves to retain control of the advanced semiconductors that run them.

America is abandoning the neoliberal doctrines it has followed since the Reagan era, adopting industrial policies aimed at bringing key industries back to home territory or friendly allies, chiefly through the trillions of dollars of subsidies and spending in Joe Biden’s Inflation Reduction Act. Transfers of American intellectual property and advanced equipment to China and other adversaries are under greater scrutiny.

In Australia’s case, an announcement of a Beijing visit by prime minister Anthony Albanese sometime later this year will signal that the thaw is still on. In contrast to his willingness to visit countries aligned in suspicion of China, though, Albanese is not looking at all eager.

“He doesn’t seem to have a lot of enthusiasm for this trip,” says Geoff Raby, a former Australian ambassador to China who is now a trade and business consultant in Beijing. “I’m really not sure what’s going on.”

From late last year, all the signs were that China’s leadership wanted to back away from the trade sanctions and freeze on political contacts imposed in 2020 in response to the Morrison government’s claim that Beijing was hiding the origins of the Covid-19 pandemic. China’s sharp tariff increases and other restrictions on a swathe of Australian exports — coal, barley, lobsters, copper, wine and timber — added up to about $20 billion in lost sales. Though small compared with our major exports to China (especially iron ore, which actually grew in value) the sanctions hit particular industries and regions hard.

At around the same time, a domestic national security case in China saw Chinese-Australian journalist Cheng Lei suddenly disappear from her job with Chinese state television in Beijing. She later underwent a closed-court trial for allegedly passing state secrets abroad, though no verdict or sentence has been announced. All China-based correspondents for Australian media were withdrawn by their employers for fear of arrest.

The defeat of Morrison’s government in May 2022 changed the atmosphere. Informal talks on the fringe of multilateral meetings — notably Chinese leader Xi Jinping’s encounter with Albanese at the G20 summit in Bali last November — led to foreign minister Penny Wong’s meeting with China’s senior foreign affairs minister, Wang Yi, in Beijing on 21 December. It was the first Australian ministerial visit to China in more than three years.

Steps to ease the trade sanctions soon followed. The ban on Australian coal lifted in January, with exports jumping to the point that Queensland’s budget had an unexpected surplus for the year just ending. China’s consul-general in Perth visited a major lobster fishing cooperative, suggesting that the ban would soon end. In Canberra, Chinese ambassador Xiao Qian expressed a hope that the two countries would come back to “a normal kind of relationship” and praised Albanese’s “pragmatic approach.”

Talks ensued between senior officials at Davos and elsewhere. Australia agreed to suspend its action at the World Trade Organization over the barley ban. Then, in early May, trade minister Don Farrell went to Beijing to meet his counterpart, commerce minister Wang Wentao.

A few days later, Beijing announced it would resume timber imports from Australia, with no mention of the pest infestations cited as the reason for the ban. The trade had previously been earning Australian exporters about $700 million a year.

Xiao, the ambassador, also expressed concern for the imprisoned Cheng Lei, who has not seen her children in “such a long time.” “Personally, as a Chinese ambassador to this country, I can share with you: I have my personal sympathy to her and to her family,” he said. “So based on humanitarian grounds, I have been trying, I will continue to try to do my utmost to facilitate more access, that she could have some kind of access granted to her partner and friends and families to let them know that she’s OK.”

Further steps are awaited. Australia’s ambassador in Beijing, Graham Fletcher, who was barred from attending Cheng Lei’s trial in early 2022, was able to visit her in prison recently, but detected no change in her situation. Punitive tariffs on Australian wine and the halt in the lobster trade remain. No date has been set for a visit to Australia, mooted for July, by China’s new foreign minister, Qin Gang. (Qin replaced the long-serving Wang Yi, who remains in a supervisory role as head of the Chinese Communist Party’s foreign affairs department.)

“They’ve achieved stabilisation — that’s good. Cabinet ministers are all disciplined in what they say about China — all that’s good, but I think the whole thing’s stalled in the last couple of months,” says Raby. “There’s not a lot of activity at the moment. The foreign minister’s dates haven’t been announced and July’s on us now. And they’re dicking around over the prime minister’s visit.”

But James Laurenceson, head of the Australia–China Relations Institute at the University of Technology Sydney, sees improvement, with China’s share of Australia’s trade starting to rise again after a sharp dip in the last two years and new items — electric vehicles from China and lithium ore going the other way for their batteries — gaining importance.

A new Lowy Institute poll, meanwhile, shows the Australian public’s concern about a threat from China easing, though still high and (short of sending troops) in favour of helping Taiwan defend itself. As a major threat, China has been overtaken by worries about cyber attacks from various sources.

Even if there has been a pause in the thaw, Australia’s experience still makes for quite a contrast to the state of relations between the United States and China, which US secretary of state Antony Blinken’s recent visit to Beijing to talk with Qin have barely warmed. Blinken pushed the line that Washington sought a “de-risking” of economic ties with China rather than “decoupling” and assured Qin that Washington doesn’t support Taiwan’s independence from China.

China seems not to have been mollified — and president Joe Biden’s subsequent reference to Xi Jinping as a “dictator” hasn’t helped. Chinese warships and aircraft continue to cut across US patrols through the Taiwan Strait and the South China Sea. In Washington, Congress members and senators on both sides of the aisle compete in tough talk about China. The Chinese defence minister is still refusing to talk to his US counterpart, Lloyd Austin, or re-open a military-to-military hotline.

While not directly accusing China, Albanese has aligned his government with America’s assertive defence manoeuvres in the Western Pacific and its cultivation of closer strategic ties with Japan and India. But for Biden’s debt-ceiling negotiations with the Republicans, Australia would have hosted all four leaders of this Quad in Sydney immediately after the recent summit of the Group of Seven advanced economies in Hiroshima.

And, of course, Albanese has fervently adopted the AUKUS agreement forged by Morrison to equip the navy, one day, with nuclear-powered submarines capable of projecting power far from Australian shores. The agreement has drawn predictable condemnation from Beijing, though it hasn’t been an economic deal-breaker.

Perhaps China’s leaders anticipate the AUKUS deal eventually collapsing under the weight of its contradictions, as a Marxist would say. Its embassy will be keenly watching the groundswell against AUKUS in Labor branches ahead of the party’s national conference in August. More broadly, the Lowy Poll found the Australian public “somewhat” supportive of AUKUS but unsure about its rationale or benefits.

China’s willingness to overlook far-off defence postures by minor powers is evident in this week’s visit to Beijing, Shanghai and Tianjin by NZ prime minister Chris Hipkins and a large business delegation. It’s only a few months since Qin, the Chinese foreign minister, blasted his NZ counterpart Nanaia Mahuta over former prime minister Jacinda Ardern’s strong warning about China’s attempts to form security partnerships in the South Pacific.

More recently, a New Zealand frigate sailed through Chinese-claimed waters in the South China Sea and was challenged by Chinese warships. But Wellington’s diplomatic deftness in recent years — not thrusting itself forward on things like the Covid investigation or security risks in Chinese telecom systems — has enabled it to keep channels open.

Australia’s hesitancy may come from the American mood playing into Canberra, Raby believes. “I think the pressure comes from the security and intelligence area in the US, through Shearer [Andrew Shearer, head of the Office of National Intelligence] and the security and defence people in Australia,” he says. “We are hobbled by these people. They don’t care if the New Zealand prime minister goes and takes a trade delegation and gets some deals. That’s not their agenda at all. Their agenda is to stay as close to the US as possible.”

Meanwhile, outside the defence–intelligence camp, other departments are working to keep up the economic momentum. Raby says talks are going on privately to extract the best advantage from a prime ministerial visit. “There is a negotiation about a package of outcomes,” he said. “And while everyone probably knows where you land, for some reason it seems to be difficult — I think on our side — to get there.”

Albanese has indicated that a complete lifting of the 2020 trade restrictions is required. He would also be hoping for resolution of Cheng Lei’s case, and preferably her release. “It would be very hard for Albanese to go without getting some concession on Cheng Lei,” says one of Canberra’s leading China specialists, who asked not to be named.

Beijing would want assurances that discrimination against Chinese foreign investment on national security grounds would be eased back from the absurd paranoia that ruled under Morrison’s government, when treasurer Josh Frydenberg blocked a Chinese company from taking over a Japanese-owned milk depot in Victoria.

In return for a resolution of Cheng Lei’s case, China would also want a promise that Australia won’t oppose its bid to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a trade agreement covering e-commerce and intellectual property as well as conventional goods. Taiwan’s parallel application to join the CPTPP complicates this issue.

Given the barely concealed message of much mainstream media commentary in recent years — that seeking business deals with China amounts almost to treason — Albanese won’t want to look too enthused. Despite the easing of public concern about China, the Lowy Institute poll also found that 70 per cent of respondents want Australia’s supply chains to run through friendly countries.

For economist John Edwards, this is at odds with how Australians actually behave. “Australian homes are chock-a-block with Chinese-made kitchen equipment, refrigerators and washing machines, their garden sheds with Chinese-made tools, their desks cluttered with Chinese-made phones, computers, printers and peripherals,” Edward wrote last week in the Australian Financial Review.

“We wear clothes made in China and are now beginning to buy cars made in China,” Edwards went on. “In a roundabout way, these imports are paid for with exports of iron ore, coal, lithium, and other metals and minerals, often to China. They are also paid for by revenue from Chinese students in Australia, and Chinese tourists in Australia, with China the predominant source of both.”

A vast number of imports also come from third countries like South Korea and Japan that use Chinese components for their products. Allies like Britain and the United States meanwhile account for a very small proportion of Australia’s trade. For all its talk of “friend-shoring,” the Biden administration’s main focus, subsidising semiconductor manufacture in the United States, will be at the expense of two friends, Taiwan and South Korea.

And it’s not just Australian households that are chock-a-block with Chinese goods. The difficulty of disconnecting from China was shown in an interview this month by the chief executive of the huge US defence and aerospace group Raytheon. “We can de-risk but not decouple,” Greg Hayes told the Financial Times. “Think about the US$500 billion of trade that goes from China to the US every year. More than 95 per cent of rare earth materials or metals come from, or are processed in, China. There is no alternative.”

If Raytheon were to withdraw from China it would spend many years rebuilding its supply chains either in the United States or friendly countries, Hayes said. “We are looking at de-risking, to take some of the most critical components and have second sources but we are not in a position to pull out of China the way we did out of Russia.”

Raytheon is deeply involved in Australia’s defence. It provides the combat system for the Collins-class submarines, air defence for the army and missiles for the air force, and it helps run the space warfare ground station at Exmouth, Western Australia. All, it seems, reliant on Chinese-made components — and paid for, in large part, by our exports to China. Trading with “frenemies” is the international norm. •

The post A pause in the thaw? appeared first on Inside Story.

Kudos if you said that those countries cap the amount anyone may donate to a political party or candidate. Double the kudos if you know that the entire eastern seaboard in Australia also has such caps, not just for state parties but for state electoral purposes too.

It is forty years since the Hawke government begat the regime that still essentially governs the funding of campaigns for federal elections. That regime still rests on twin pillars: public funding for parties or candidates that attract above 4 per cent of the vote, in return for disclosure requirements whose lack of timeliness is redolent of the paper-and-pen era in which they were hatched.

True, the federal “transparency register” has been widened to include lobby groups that campaign at national elections. But the national electoral laws don’t drill deeply into the financial affairs of parties. Compare Britain, where parties’ audited financial accounts must be published annually — and parties there don’t receive public funding for electoral purposes like their Australian counterparts do.

Whether in an absolute sense, or relative to our usual democratic comparators, the electoral funding and disclosure rules in the Commonwealth Electoral Act remain lax. This state of affairs may align with liberal philosophy in the abstract, but it is not merely passé in terms of developments in the field in the last forty years; it is also corrosive of faith in the integrity and political equality in Australian elections.

With a Labor government ostensibly driven by social democratic norms and an expansive crossbench of Greens and independents committed in principle to more fairness in electoral participation, what are the prospects for renewal? To discuss this, we need to consider the three main dishes on the regulatory menu — disclosure, donation caps, expenditure limits — and then ask if reform is imminent after all these years.

Disclosure is broke: time to fix it

Disclosure at the national level needs to be tighter and more timely. Parties must declare “gifts” — donations earmarked to fund national electioneering — only after the end of each financial year. Their declarations don’t then need to be published by the Australian Electoral Commission, or AEC, until February of the next year. So resources given to parties in the lead-up to the May 2022 federal election need not have been made public until between eight and twenty months after they were received.

In addition, parties need only disclose individual gifts above an indexed threshold that now sits at $15,200 per annum. (Donors are meant to keep tabs on whether a series of gifts exceeds that threshold and, if so, disclose the fact annually.) It gets worse: given our federal structure and history, parties can consist of up to nine registered entities — their national secretariat plus their mainland state and territory divisions. The disclosure threshold applies to each of those entities, not to the party as a whole. So the effective threshold for gifts for national electioneering can be well over $100,000 per party.

You might think, “Well at least this annual ‘disclosure dump’ gives the media a deliberative focus.” It is true that having “real-time” disclosure — say on a weekly basis — and at too low a level could simply snow investigators. The answer to that is to improve the presentation of the data by including tools to easily aggregate and map disclosures across time spans, related parties and entities, and geography.

It is also important to bear in mind the inherent limits of any disclosure system. Disclosure is essentially a kind of freedom-of-information tool that allows the media and rival political players to ask questions. By itself it is no guarantee of integrity, let alone a means to political equality. It can even heighten cynicism or normalise unlovable donation practices. Companies may think they need to keep up with the largesse of competitors seeking to ingratiate influence; party treasurers can hit up donors to a rival party and say, “What about us?”

Regardless of such considerations, the national disclosure system is clearly broken: that much has been known for years. But the major parties have also increasingly driven a truck through the system, and the AEC hasn’t stood in their way.

How? The major parties operate business-oriented fundraising arms under names like the Liberal Party’s Australian Business Network and the Federal Labor Business Forum. These outfits charge huge subscription fees: not to be a member of the party proper, but to belong to a kind of exclusive networking club. To magnify the exclusivity, fees have been tiered across “platinum,” “gold” and “silver.” The fee for the highest tier has reportedly inflated from $110,000 to $150,000 in recent years.

When these fundraising arms organise notionally come-one, come-all dinners (like Labor’s $5000-a-head budget dinner hosted by PwC or a $5000-a-head “boardroom lunch” with treasurer Jim Chalmers), the ticket cost is set below the disclosure threshold. This is an old practice; the scandal today is that these large, tiered subscription fees are not being disclosed.

Under electoral law, a political donation is something given for “inadequate consideration.” But the parties happily encourage subscribers to claim they are receiving more than adequate consideration. Quelle surprise! As Woodside Energy’s CEO explained some years back, this leaves it up to people like him to decide whether to make “voluntary” disclosures.

Despite being armed with significant forensic powers, the AEC has taken such assertions at face value. It told the ABC recently that it leaves it up to the subjective — and conflicted — view of those paying for access to the parties. Donations up to ten times the disclosure threshold can therefore be hidden in plain sight.

All this ignores the objective nature of value in most real-world dealings. Parties are hardly in the events industry. The AEC could demand to be informed of the events held by each forum/network and then commission experts to assign an upper market value to the event-as-an-event (including an allowance for the attendance time of ministers or MPs). The AEC could also inspect the accounts of these fundraising arms to see what surplus they generate, per average subscriber, for the party coffers.

In short, the major parties are nakedly soliciting revenue, with a nod-and-wink as to anonymity, in return for selling premium access — and the regulator is standing by. Selling access corrupts basic public law values: politics as a public trust and the franchise as an emblem of the equal worth of all people. Why on earth would an ordinary person voluntarily join one of the major parties today when they are seen as largely superfluous to the electoral machine? As if rubbing salt in the wound, last year the major parties convinced the courts that any membership rights contained in their own rules are legally unenforceable.

Capping donations

Presently, the only “real” limit on national political donations is a ban on “foreign” donors, a recent development driven by concerns about Chinese money. I put “real” in quotes, since nothing is more fluid than international finances. That means the law is not really enforceable offshore, and so assumes that receipts are careful screened by Australian political actors. While the parties have been willing to twist and stretch disclosure law, the opprobrium for breaching a “foreign” donor ban is probably sufficient for the parties to self-police the source of gifts.

That leaves non-foreign, ridgy-didge Aussie donors: a residual category that ranges from citizens (wherever located) and permanent residents through to businesses incorporated here or simply possessing a principal place of activity here. Unlike in the sample of countries listed at the start of this piece, they face no donation limits. Is this a problem?

It may be, for political integrity and equality. If disclosure requirements were more meaningful, and if the new National Anti-Corruption Commission performs to its potential, we might be right to leave political integrity to those regimes.

What then of political equality? Political donations are partly acts of political association. This means they cannot, constitutionally, be banned outright. But they can be limited — in their size and in who makes them. Generally, we should welcome donations from a wide range of sources to help keep parties connected to a broad social base. Indeed, donations to parties and candidates of up to $1500 per annum are tax-deductible for individuals. On the other hand, big donations, even those made on the basis of mateship or ideology, undermine political equality.

Given this pervasive effect on political equality, why are donation caps not more prevalent in Australia? One clue lies in two countries absent from the list of those with caps: Britain and New Zealand. Like Australia, they have a longstanding Labor Party (albeit they spell it properly, as “Labour”).

“Surely these parties of the ordinary worker would support caps?” you say. Well yes, in principle. But when caps are introduced, the law is confronted by the problem of how to deal with the affiliation fees paid by the trade unions that formed those parties and still prop them up in the lean times of opposition. (Modern Labo(u)r parties do okay from corporate donations when they are in power or on the verge of power, but less well when facing the wilderness, thanks to their pragmatism and that of business donors.)

A second hurdle for caps is whether new political forces may need an injection from a sugar daddy in order to challenge the might of the existing major parties. This is less relevant for an eponymous self-funded party like the former Palmer United Party (now the United Australia Party) but very important for a more genuine movement like the teal independents who were turbocharged last year by Climate 200 support.

The key figure behind Climate 200, a progressive entrepreneur who inherited part of the vast mining and corporate raiding fortune of Australia’s first billionaire, has even written a book celebrating the movement. It may be no coincidence that teal candidates did much better in the 2022 federal election — without caps on donations or expenditure limits — than in this year’s NSW election, where both are capped.

Limiting spending

The third option on the menu is expenditure limits, which constrain how much parties, candidates and lobby groups can spend on certain electioneering costs. These limits are now common for state elections in most of Australia, as this table shows. (Victoria and Western Australia are the odd ones out, Tasmania only has them for its upper house elections, and in South Australia they are nominally “opt-in” as a condition of public funding.)

Limits on expenditure drive the British and New Zealand systems, and are a feature across Europe and the Americas. (They cannot be mandated in the United States, and opt-in spending limits there have fallen by the wayside.)

In principle, expenditure limits do several jobs. They squarely address the “arms race” problem, which Mr Palmer has reignited in Australia. In constraining the parties’ demand for money, these limits free up them and their leaders to focus on genuine public business and may reduce demand for dodgy donations. They may also help deliberation by making campaigns less cacophonous, something that is a turn-off for many electors.

Expenditure limits should also be easier to police than donation limits. While donations are inherently behind-the-scenes, campaigning needs to be public to be effective. That remains the case even with the advent of highly targeted online campaigns, although that development requires transparency from social media companies.

When it comes to expenditure limits, the devil lies in the legislative detail. With no fixed terms for federal parliament, the capped period is not easy to define. (At Westminster, it is up to a year ahead of an election.) Exactly what is covered by “electoral expenditure” also needs careful design and definition. And the coordination of campaigns — between trade unions or corporate groups, for example — needs to be controlled to keep caps from being rorted.

Most vexed of all is the question of what limits should be put on lobby group electioneering — not least with some members of the High Court suggesting, in 2019, that the idea of a level electoral playing field limits differential treatment of parties/candidates and lobby groups. If so, this is an odd heresy. Representative elections are necessarily focused on parties and candidates; parties have ongoing reputations to protect, and party leaders and MPs are publicly accountable in myriad ways that lobby groups are not.

Reforming the morass

Fifteen years have passed since the states began modernising the law of money in electoral politics. Yet substantive change has been absent nationally. If inertia had its way, this dual track of state innovation and national enervation would be unlikely to change.

As we have seen, the national transparency net has widened to rope in electioneering lobby groups but has simultaneously frayed. Observers are optimistic, however, that federal disclosure rules will be tightened to include a lower disclosure threshold and more frequent disclosure obligations. None of this is rocket science. Models exist aplenty, from New York City to Queensland, for something approaching continuous disclosure in the internet era. On the question of which income will need to be disclosed, we must pray that the Greens and crossbenchers lean on Labor to deal with the “business forum” loophole it helped manufacture.

Tasmania is on the verge of becoming the latest (and last) subnational jurisdiction to update its law in the area, and its bill is instructive about what not to do. Across 265 pages it weaves an intricate web of registration and accounting requirements. Yet it does little more than bring in a regular disclosure regime, sweetened with generous public funding for elections and for party administration. The Liberal government wants to set the disclosure threshold at $5000 per annum: pretty high for a small state.

After self-inseminating his party with over $200 million over the past two national elections (mostly via Mineralogy Pty Ltd), Mr Palmer’s recent forays into electoral politics may leave one main legacy: some form of donation cap. To have any effect, it will need to include a suturing of that business forum/network loophole.

Any federal cap is likely, I suspect, to be set at a high level. The major party treasurers — along with otherwise “progressive” electioneering groups like Get Up! and Climate 200 — will baulk at setting donation caps anywhere near as low as some states have. (Victoria is the most parsimonious — just $4320 currently over the four-year term.)

This leaves expenditure limits as the main new item on the menu. Again, the shadow of Mr Palmer looms large; but not just his. Finding himself outspent by a teal rival in a previously blue-riband Sydney seat in 2022, a Liberal MHR complained that his opponent’s spending had been “immoral.” Is it too cheap to note that his party could have swallowed its economically libertarian instincts at any time during its three terms in government and legislated limits? Better late than never! Temperance bandwagons were mostly full of recovering addicts; and, as St Augustine ironically put it, “Lord, make me chaste and celibate, just not yet.”

Federal parliament’s Joint Standing Committee on Electoral Matters, a multi-party committee with fourteen members, has held public hearings, including on electoral finance reform, over a seven-month period. (MPs, even more than public lawyers, seem fascinated by electoral law.) Its report is due soon enough. The mix of compromise, competing principles and self-interest manifest in its recommendations will make for compelling reading. •

This article first appeared under the title “Money in Australian Electoral Politics: Reforming the Morass” in AusPubLaw.

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Twitter in particular has witnessed some egregiously bad behaviour by “Covid Zero” advocates seeking public vengeance for what they paint as a malign conspiracy to deny the hidden truths of Covid-19 — its transmission via the airborne route, its prevention via public masking and lockdowns, the threat of Long Covid and disability, and the need to aim for elimination rather than mitigation.

I was genuinely shocked to see a senior researcher, a full professor, seeking to humiliate a PhD student with whom they disagreed by naming and shaming his supervisors, implying guilt by association. I was staggered to see a medical doctor describe people at an airport not wearing masks as “oldies, fatties and crumblies.”

It sickens me to watch as one prominent ventilation advocate launches abusive screeds targeting doctors working on the Covid frontline. I feel sorry for clinicians abused because they don’t wear the level of PPE favoured by Covid Zero advocates.

If the case for Covid Zero is strong, it shouldn’t be necessary to try to publicly shame people who disagree with it. These tactics call into question the strength of the arguments that underpin this campaign. They highlight the non-rational drivers of these positions: the traumatic affects that are being given full voice on social media platforms.

As a queer person working in HIV, I’ve lived through this before, and our present situation gives me a powerful sense of pandemic déjà vu. I can’t overstate the importance of excising these practices from socially acceptable norms of conduct, while undertaking the kind of cultural production that helps us understand where they are coming from — the traumatic affects, experiences and practices to which pandemics give rise.

This can be an exceptionally slow process, prone to sparking “history wars” and paroxysms of public rage over seemingly benign topics. The queer community fought all-in battles over the changing meanings of HIV. First, as the HIV response became professionalised rather than resting in the hands of activists and volunteers. Then, following the widespread uptake of effective antiretroviral treatments, as the meaning of HIV changed from a death sentence to a lifelong, manageable condition. Finally, as the advent of preventive medication meant condoms were no longer the only game in town.

On each occasion, community figureheads took up purist and punitive positions and strategies. The damage caused to vulnerable members of the community was incalculable; it was toxic shaming at its absolute worst. It wasn’t enough to win the argument; it wasn’t even a debate in any rational sense — chosen scapegoats had to be obliterated, if not from this earth then, at least, from public view; they were shamed into silence. Each time this happened, necessary debates over HIV prevention policy and programming were set back years, if not decades.

Traumatic affect was clearly playing out in those conflicts. In 1995, at the peak of the AIDS crisis in the United States, 50,000 people were dying each year in communities that made up, on contemporary estimates, about 1.5 per cent of the adult population. That’s 1.2 per cent of that community’s population dying each year — for reference, that’s four times the mortality rate of Covid-19 in the mainstream US population.

These dry calculations only thinly approximate the human, social, relational and emotional impacts of the epidemic. It falls to cultural products like film and television and books to account for the incalculable costs.

One film that does this especially well is Robin Campillo’s 120 BPM (2018) about ACT UP Paris. (It is available to rent for $5 on Apple TV.) The film opens in a lecture theatre, in a loud and only loosely organised collective meeting, as newcomer Nathan (Arnaud Valois) watches activists planning their next protest and, while this happens, checks out cute firebrand Sean (Nahuel Pérez Biscayart). The film tells the story of the collective, their protests against recalcitrant governments and drug companies, and the emerging relationship between Nathan and Sean, which ends in scenes of unbearable tenderness.

The film interweaves the moments of tragedy and agency that were simultaneously embodied in the queer community’s response to HIV and AIDS, and powerfully evokes its protagonists’ overwhelming perception of government and the public: “They don’t give a fuck about us.” (A perception that is no doubt familiar to the many people left behind as Australia transitions into a Covid-Normal existence.) It highlights the diversity of people and groups engaged in the battle against HIV, rather than presenting cisgender, white, educated middle-class men as the heroes of the epidemic response.

Right now, we are missing two things.

First is the community infrastructure that, in the HIV epidemic, enabled affected communities to respond effectively with prevention programs, and to care for and support people living and dying with HIV and AIDS. We have a Heart Foundation, Cancer Councils, AIDS Councils, PWDA, but no organisation dedicated to representing the people most affected by Covid-19. This gap harms people who are vulnerable to severe illness and people fighting for recognition, treatment, services and research on Long Covid. In the absence of a representative body we are only hearing the loudest voices, not voices informed by the diverse needs and experiences of this community.

Second, we urgently need an investment in public storytelling that can help us understand Covid-19 as a mass traumatising experience. There is scholarly debate over whether Covid-19 lockdowns had lasting impacts on people’s mental health, often judged using simplistic measures of depression and anxiety included in longitudinal survey research. But the whole point about trauma is that symptoms often take time to emerge, and they are often quite indirect — it’s not immediately obvious where they are coming from and what has triggered them.

Trauma also has effects that play out at the collective level, reshaping how a group of people sees itself and organises its everyday life. Public narrative is one of the most powerful therapeutic interventions for grappling with and resolving individual and collective traumatic experience.

For this to happen we need the discourse over Covid-19 to shift gears. Public rage and pathos-filled personal narratives can pay off; both are ways of building an audience. But it is possible to get hooked on rage, stuck in the black-and-white, blame-and-shame mindset it produces. There is little possibility of processing the traumatic experience when you are spending hours each day marinating your brain in other people’s digitally mediated stress hormones. It is time for the merchants of rage to take a breath or take a seat. •

The post Pandemic déjà vu appeared first on Inside Story.

Yet the quality of government and the wellbeing of citizens depend critically on the effectiveness and integrity of the Australian public service, or APS. As that wise old owl Adlai Stevenson once said, “Public confidence in the integrity of government is indispensable to faith in democracy; and when we lose faith in the system, we have lost faith in everything we fight and pay for.”

It’s true that Australian governments have shown bursts of interest in the condition of the APS. At the federal level, the Whitlam and Fraser governments commissioned significant reports, with Whitlam’s (a royal commission headed by H.C. Coombs) reporting to Fraser and Fraser’s (a review headed by J.B. Reid) reporting to Hawke. These reports were taken seriously by the governments of the day and most of their recommendations were implemented.

But federal government interest has waned since the mid 1990s. Major reports during the Rudd and Turnbull governments were largely ignored, and many of the changes made as a result of the Coombs and Reid reports have been abandoned.

More than that, governments have made life progressively harder for the APS:

• They have levied an “efficiency dividend” uniformly across all agencies regardless of circumstances — a lazy way of saving that has slyly reduced service standards and probably reduced efficiency.

• They have increasingly used consultants, contractors and labour hire to perform public service jobs. While some of these engagements have been reasonable, others have not. Thus, the merit appointment provisions of the Public Service Act have been worked around and swathes of capability have been outsourced. In 2020–21, this “external labour force” equalled around 54,000 staff at a cost of $21 billion.

• They have reduced the tenure of heads of departments to zero and sacked many of them arbitrarily. As a consequence, there is widespread concern that departmental advice is consequently being tempered to avoid giving offence that would lead to dismissal. (Do robodebt, sports rorts and car-park rorts ring a bell?) At the same time governments now rely much more for policy advice on ministerial staff — who know everything about politics and little about policy development — rather than officials.

• Appointments to statutory positions have been politicised and the importance of the appearance and reality of independence forgotten. The AAT might be an egregious example but it isn’t the only one.

• Central management of the APS has been degraded. The Public Service Commission is essentially powerless, no apparent mechanism exists to coordinate the activities of the other central agencies, and much goes into the Secretaries Board — composed of all departmental heads and a few others — but little comes out. The board’s most notable achievement is its advice to the Morrison government to knock back important recommendations of David Thodey’s public service review, commissioned by Malcolm Turnbull.

• Devolved fixing of pay and conditions has created wide disparities in remuneration between departments based on the dishonest pretence that pay rates reflect individual agencies’ productivity, something that can’t be measured. This has debased classifications, damaged staff transfers and promotions, and disconnected levels of remuneration from the outside market. Recruitment has consequently become a hit-or-miss affair.

• Senior management structures in departments have become grossly top-heavy while bureaucratic and political empire building — divorced from sensible principles about the machinery of government — flourishes. The most notable example is the unwieldy Department of Home Affairs, which appears to have been designed to fail and continues heroically to do so.

There’s more, but that list gives a good sense of what has gone wrong and how governments have contributed.

Will this change under Labor? Anthony Albanese’s public service minister is senator Katy Gallagher, a former ACT chief minister who has shown an interest in and sensitivity about public administration. As well as her commentary in the budget papers, she has made several important speeches setting out her aim of getting the APS into better shape.

Useful steps taken by the new federal government include:

• removing the Federal Police from the Home Affairs portfolio — although, regrettably, it left ASIO there and didn’t reconstitute a standalone immigration department

• setting up a National Anti-Corruption Commission

• abolishing and reconstituting the Administrative Appeals Tribunal to negate the malign effects of politicised appointments

• significantly cutting back the use of external consultants and contractors

• removing arbitrary staff ceilings (although the so-called “efficiency dividend” has been retained)

• reintroducing reviews of agency capability and evaluations of the effectiveness of programs

• taking tentative steps to clean up the remuneration and job classification mess (although the underlying policy remains markedly deficient)

• investing significantly in data and digital.

The government also created a position of secretary for public sector reform and appointed former senior public servant Gordon de Brouwer to the job. He was given the support of an APS Reform Office headed by a deputy secretary in the prime minister’s department. Like de Brouwer, that department’s head, Glyn Davis, was a member of the public service review initiated by Malcolm Turnbull.

These early signs were so promising that Peter Woolcott, public service commissioner at the time, forecast public service reform “on steroids.” That rhetorical enthusiasm has been so little matched by reality that the steroid dealer should be asked for a refund. When de Brouwer recently took over Woolcott’s job, the position of secretary for public sector reform was left vacant.

Some of APS Reform’s proposals — described in a four-and-a-half-page “consultation paper” and an “exposure” bill to give effect to five changes to the Public Service Act — are bafflingly wrongheaded, risky or trivial. Although they took a year to prepare, little time was allowed for consultation (eight days on the bill), which amounted to nothing more than the posting of the papers on a website with a request for comment.

First, “stewardship” is to be included in the Public Service Act as a public service “value.” Leaving aside the fact that stewardship is a function rather than a value, the exposure draft bill defines stewardship by declaring that the APS “builds its capability and institutional knowledge and supports the public interest now and into the future, by understanding the long-term impacts of what it does.” That’s all well and good, but capability and institutional memory are essentially secured by providing appropriate resources, structures and procedures. A mere “understanding of long-term impacts” guarantees nothing.

Second, the paper proposes an “inspiring” public service “purpose statement” which, it is claimed, “will provide a common vision through which to view problems, develop solutions and make difficult decisions.” This statement is to be settled by a deliberative committee of forty people, with the minister relegated to observer status. Can it reasonably be imagined that the product of this insular thinking will make the slightest difference to the hardworking staff managing social security counters, collecting taxes or slaving away in naval stores, other than perhaps to demoralise them?

The paper’s other proposals include requiring that decisions be taken at the lowest possible levels and proposing agency capability reviews, published staff census data and “long-term insight reports” are generally unobjectionable, although why legal heads of power are required for any of them is neither explained nor obvious. It’s also a pity that the “long-term insight reports” are not defined, though it is claimed they can “build the capability of the APS as a whole to consider cross-cutting issues in a linked-up way.”

But the fundamental disappointment of these proposals is that they ignore the big things that need to be done. For example:

• improve the central management of the APS as a whole by bolstering the power of the Public Service Commission, restricting the role of the Secretaries Board and providing a mechanism for better coordination between the central agencies

• make the Public Service Commissioner the primary adviser on the appointment and tenure of departmental heads

• abolish fixed-period appointments for departmental heads and put them in a position where they are more likely to believe they can provide full and frank advice without the risk of being sacked

• make it legislatively clear that the merit appointment provisions of the Public Service Act should not be avoided by placing consultants and contractors in APS positions

• give legislative effect to the oft-proclaimed desire for greater diversity and inclusiveness in public service employment

• require the publication of surveys on issues — such as agencies’ adherence to service standards — in which citizens have a genuine interest

• legislate procedures for appointments to statutory offices that would minimise the risk of public confidence being undermined by political association

• tighten the regulation of community development grants so they serve the public interest rather than the interests of those in marginal or government-held electorates

• legislate rules to avoid conflicts of interest in the post-separation employment of public officials

• legislate a code of conduct for ministerial staff.

There is much more to be done, but any one of the above is more important than the whole of the legislative proposals presently on offer.

So why are the proposed legislative changes for the APS so confused, illogical and insipid?

There is probably no simple answer to that question, although a lack of stomach and imagination is evident. It may also be said that big changes would shift relative powers at the official and, to a lesser extent, ministerial levels. When that happens, it is all too common for the losers to circle their wagons and protect their territory. Could that be happening here? It’s hard to tell, but it would be nice to know.

Meanwhile, the reform cart moves slowly on with so lightweight a cargo that a former public service commissioner, Andrew Podger, has suggested that it should be parked until the report of the robodebt royal commission is available. That’s not a bad idea: it’s short odds that the commission’s report will show up the present legislative proposals as wholly inadequate and provide the grounds for a fresh, useful and more courageous attempt to raise the integrity and effectiveness of the federal public service. •

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At the beginning of April, when Newspoll last reported on support for putting a Voice into the Constitution, it estimated the level of approval at 53 per cent and opposition at 39 per cent; 8 per cent said “Don’t know.” Two months later, the corresponding figures are rather different: 46–43–11.

On the face of it, this looks like support has declined by seven points, the opposition has risen by four points, and the “Don’t knows” have gone up by three. And it looks like that’s the result of a couple of months in which the No side has campaigned hard and the Yes side has been on the back foot, with some of its erstwhile supporters either switching to No or putting off a firm decision and “parking” their vote, as Newspoll’s former boss Sol Lebovic used to say, under “Don’t know.”

Thus, Dennis Shanahan, in a comment for the Australian: “The latest Newspoll figures… suggest there is an across-the-board movement against the voice and a surge in uncertainty.”

Not so fast. There are two reasons for caution when comparing the June results with the April results: a change in Newspoll’s question and a change in what we might call, borrowing a phrase from Richard Thaler and Cass Sunstein’s Nudge, its “choice architecture.”

The question: The Australian notes that the question asked in its latest poll is not the same as the question asked in its previous polls. The obvious implication is that its figures need to be interpreted with care.

In April, Newspoll explained that “There is a proposal to alter the Australian constitution to establish an Aboriginal and Torres Strait Islander Voice to Parliament.” It then asked: “Are you personally in favour or against this proposal?”

In its latest poll, Newspoll used a slightly different preamble: “Later this year, Australians will decide at a referendum whether to alter the Australian Constitution to recognise the First Peoples of Australia by establishing an Aboriginal and Torres Strait Islander Voice”(with those italicised words underlined in the questionnaire). It then asked: “Do you approve this proposed alteration?” This made it “the first Newspoll survey to present voters with the precise question they will be asked at the ballot box when the referendum is held later this year.”

If the differences in the wording of the two questions explains, at least in part, the differences in the two sets of responses, it is not clear how it does. Did the reference to “recognition” deflate support? That seems unlikely: since “recognition” has wide public support, its inclusion is more likely to have boosted support than deflated it. Did the prospect of having to vote at a referendum boost opposition? Again, that seems unlikely, though at a time when voters may have more pressing things to worry about, it’s probably the better bet. Perhaps the heavy black underlining of the proposal caused concern.

According to a quote in the Daily Telegraph, another News Corp masthead, polling analyst Kevin Bonham believes Newspoll is “likely more accurate” than many other polls because it has been the first to use the exact wording of the referendum proposal. However commendable that might have been, we cannot assume that the wording necessarily makes a difference to respondents.

A polling purist might baulk at Newspoll’s switch from: (a) asking respondents whether they are “in favour or against” (balanced alternatives) a proposal to alter the Constitution to establish a Voice; to (b) asking respondents whether they “approve” this proposed alteration, with no balancing alternative (“disapprove”). It might also have been better practice to ask respondents how they intended to act (that is, vote) rather than how they felt (“in favour or against”; “approve”).

The choice architecture: What the Australian overlooks — and what Newspoll itself fails to note — may be something more important than the change in the question: the change in the poll’s choice architecture. In April, Newspoll not just posed a different question; it also offered a different array of response options: “Strongly in favour,” “Partly in favour,” “Partly against,” “Strongly against,” “Don’t know.” In its most recent poll, by contrast, the options offered to respondents were simply: “Yes,” “No,” “Don’t know” — a set of responses, it should be acknowledged, better suited to a referendum than the set Newspoll previously offered.

How might this change have affected the results? With a wider number of response options, the proportion that chose “Don’t know” was relatively small; in April’s Newspoll, it was 8 per cent, with the numbers in February (7 per cent) and in March (9 per cent) having been almost the same. Polls by other companies in February, March or April that offered the same sort of choices as Newspoll offered in its latest poll reported higher figures for “Don’t know,” just as Newspoll now does.

The assumption that we can compare polls that use different architectures (Yes/No/Don’t know as against Strongly in favour/Partly in favour/Partly against/Strongly against/Don’t know) simply by collapsing categories (Yes = Strongly in favour + Partly in favour) is mistaken.

It is difficult to say how much the change in the Yes and No responses can be explained as an effect of the change in the choice architecture. But this doesn’t leave us without any bearings. As we would expect, the “Don’t know” number in June (11 per cent) is higher than it was in April (8 per cent); the “surge in uncertainty” is therefore almost certainly an illusion — an effect of changes in the response categories.

If the “Don’t know” number is higher, then the Yes and/or No vote has to be lower. In this Newspoll, the Yes vote is lower but it is also lower than we might have expected on the basis of a switch in choice options alone. And the No vote, far from being lower, is higher.

Allowing for changes in the choice architecture, this suggests that, over the two months since Newspoll’s last survey, the Yes side has lost support and the No side has gained support.

This is hardly news: a tightening of the contest is what almost all the polling has shown for some time. The intriguing question is how much of a tightening would Newspoll have shown — with or without its new question — had it not changed its response options.

Nor is it news that fewer than half of those polled intend to vote Yes. Since March, none of the polls that use the standard architecture (Yes/No/Don’t know) — Freshwater, Morgan, Resolve — have reported Yes majorities. The only way of conjuring Yes majorities from these polls has been by assuming either that the “Don’t knows” won’t vote or that enough of them will vote — and vote Yes — to get the proposal over the line.

According to Simon Benson, who wrote the Australian’s main story, the Newspoll results “suggest the debate is now shaping up as one being led by elites on one side and everybody else on the other.” What this means is unclear. There are “elites” in both camps. But even if the “elites” were only on the Yes side, the polls don’t show “everybody else” on the other. Benson has reprised a dichotomy, pushed by some on the No side, without thinking it through. The poll results, he says, “stand as a warning sign for advocate business leaders that their customer base and employees may not necessarily be signed up to the inevitability of the referendum’s assumed success.”

Is the Australian’s clearest contribution to the debate its headline? In February, the website run by Fair Australia, the name under which senator Jacinta Nampijinpa Price’s Advance is campaigning against the Voice, advertised its plans to “build an army of Aussies” to “defend our nation.” Now, told by the Australian that most “Aussies” don’t intend to vote Yes, the undecided may draw some reassurance that it’s okay to vote No. •

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Why Hungary, and why now? A tagline revealed that Sheridan, the Australian’s foreign editor, is just back from a week as a visiting fellow at Budapest’s Danube Institute. What the newspaper didn’t tell readers is that this evocatively named organisation is funded by the Hungarian government (via its Batthyány Lajos Foundation) as part of its breathtakingly generous bankrolling — to the tune of billions of dollars in funds, buildings and other assets, according to Foreign Policy magazine’s Ana Luiza Albuquerque — of conservative institutes based in Budapest.

The job of these institutes is to host visiting fellows like Sheridan, often for months at a time, and run seminars, publish reports and periodicals, and generally promote what Orbán calls “illiberal liberalism.” (Orbán has also described Hungary as “the last Christian conservative bastion of the Western world.”) The Danube Institute alone publishes three journals, the European Conservative, the Hungarian Review and the Hungarian Conservative. Other Budapest-based institutes with government links include the Mathias Corvinus Collegium and the Hungarian Institute of International Affairs.

Orbán’s largesse is no doubt part of the reason for the sharp rise in his stocks in recent years among English-speaking conservatives of a more hardline bent. But it is his record of four consecutive election wins since 2010 — however tainted by bribes, crackdowns and electoral tampering — that has become a talisman for those American conservatives who worry that real democracy will never guarantee them the power they want.

Prominent among Orbán’s beneficiaries is the American conservative Christian writer Rod Dreher, who crops up repeatedly in media coverage of Hungary’s cross-Atlantic appeal and has benefited from Danube Institute hospitality. Dreher is the thread running through Foreign Policy’s account of Orbán’s spending on the institutes, and he’s also the larger-than-life centrepiece of a New Yorker article investigating the appeal of Hungary’s authoritarianism for figures on the Republican right.

For Dreher, Orbán’s example is “so inspiring: this is what a vigorous conservative government can do if it’s serious about stemming this horrible global tide of wokeness.” He was especially struck when Orbán told a group of visiting conservatives, “We hope you will think of Budapest as your intellectual home.”

Where Sheridan ignores Fidesz’s excesses, Dreher believes “we expect too much of these post-Communist countries if we judge them by Western standards of clean government.” He takes the credit for having persuaded Fox News’s then-presenter Tucker Carlson to broadcast a week’s worth of programs — even less critical of Orbán than Greg Sheridan’s piece — from Budapest in 2021.

But another figure also keeps appearing in the New Yorker piece. One moment he’s lunching in a bistro in Budapest wearing “a pin-striped suit and a tie from Liberty, the London clothier once favoured by Oscar Wilde.” Then he’s in his nearby office, assuring the magazine’s Andrew Marantz that his long wait for permission to attend the Budapest-hosted Conservative Political Action Conference is “merely an oversight.” (It wasn’t; Marantz’s request was eventually refused.) Here he is — with an “Ah, good, you made it!” — when Marantz slips into the conference reception at the five-star Párisi Udvar hotel. And here he is, when a friend of Dreher lends Marantz a spare pass, giving the reporter a friendly slap on the back.

This genial scamp is the eighty-year-old British journalist John O’Sullivan, who has been president of the Danube Institute since its inception in 2013. O’Sullivan has impeccable conservative credentials: he wrote speeches for Margaret Thatcher in the late 1980s and later helped draft her memoirs; he took over from William F. Buckley as editor of the New York–based National Review in 1990; he was editor-in-chief of United Press International and then executive editor of Radio Free Europe in the early 2000s.

But one job is missing from the New Yorker’s summary. During 2015 and 2016 O’Sullivan was editor of Quadrant — yes, Australia’s Quadrant — and since then he has been the magazine’s international editor. More than that, he appears to have stayed on as president of the Danube Institute throughout his editorship.

It’s strange thought: that decades-old tribune of the Australian right, Quadrant, being edited by an Englishman who also held the most senior position in a Budapest-based think tank funded by the Hungarian government. Did he continue to be paid by the institute? Did he spend much time in the Quadrant office in Sydney?

Quadrant hasn’t been entirely candid about O’Sullivan’s relations with the government of Hungary. When the magazine announced his appointment as editor in February 2015, his work at the Danube Institute was mentioned only in the past tense. I can’t find any instance where the dual role was made clear to readers during his editorship.

Even after he moved to the international editor’s job, his relationship with the institute barely rated a mention — even at the foot of a piece he wrote in September 2021 about Tucker Carlson’s “polite questioning” of Orbán (a good thing, in O’Sullivan’s view) — although he did fleetingly mention his work at the institute in a piece a couple of months later. This year the institute has cropped up a couple of times in O’Sullivan’s articles on general topics, but without any reference to its generous backer.

Other Quadrant contributors admire Hungary too (though not all contributors to O’Sullivan’s old magazine, National Review, do). Former Liberal frontbenchers Tony Abbott and Alexander Downer have all accepted invitations to speak at Danube Institute, and former diplomat (and Abbott adviser) Mark Higgie took up a fellowship there.

Unlike O’Sullivan, Sheridan is worried by one characteristic of Orbán’s Hungary: its hardline enforcement of immigration controls. But for the Australian’s foreign editor, “freedom” (whatever that means in a country fast slipping down the democracy rankings) trumps everything. Freedom, above all, from “coercive and ideological contemporary left-liberalism.”

Surely Australian conservatives haven’t caught the Hungarian disease from the more intemperate of their American counterparts? Maybe not all of them, but there are signs that Greg Sheridan has. Should he have mentioned to readers that the think tank that hosted his visit is funded by foreign minister Németh and his colleagues? I’d say so, but perhaps he sees the battle with left-liberals as so vital, and so unequal, that such niceties must be sacrificed. •

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That firepower wasn’t enough. In a succinct summary of his judgement yesterday, Justice Anthony Besanko found that three newspapers — all of them part of the Fairfax group at the time — and their journalists had established the “substantial truth” of their reports that Roberts-Smith had murdered and assaulted unarmed Afghan prisoners. A Victoria Cross–winning war hero was instantly labelled a war criminal.

Notably, Justice Besanko accepted as true the report that Roberts-Smith had kicked an unarmed and handcuffed captive, Ali Jan, backwards off a cliff and then ordered a subordinate soldier to shoot him dead. Further details will emerge when the full 1000-page judgement is published on 5 June. A further fifty pages containing sensitive national security details goes to a more select readership.

What next? Roberts-Smith remains a free man. The defamation case was not a criminal trial. A judge finding substantial truth on the balance of evidence in a civil trial is not the same as a judge or jury finding guilt beyond reasonable doubt in a criminal case, as some of Roberts-Smith’s former colleagues in the Special Air Service Regiment were quick to point out.

The Seven Network — whose owner Kerry Stokes paid for Roberts-Smith’s legal expenses over 110 days of hearings as well as those of some supporting witnesses — has said Roberts-Smith continues in his job of managing the network in Queensland, though on leave, pending review.

Lead counsel Arthur Moses SC asked for and received stay of judgement to consider an appeal. An estimated $25 million has already been spent by the two sides; whether Stokes wants to put up more of his money remains to be seen. The defence side will seek to claim its share of this from Roberts-Smith and “third parties” (entities controlled by Stokes). So the Perth-based magnate could be up for most of the legal bill.

Will he quit or double down? If an appeal does proceed, it could delay a final resolution of the civil action for another year or more.

Watching it all closely will be the Office of the Special Investigator, or OSI, the war crimes unit that was revealed during the trial to be examining Roberts-Smith’s actions in Afghanistan. Will an appeal be an obstacle for the OSI if it is thinking of a move against the former soldier?

The OSI was set up after the defence force inspector-general, Justice Paul Brereton, found “credible” evidence that twenty-five current or former special forces personnel participated in the unlawful killing of thirty-nine individuals and the cruel treatment of two others during the Australian army’s deployment in Afghanistan between 2005 and 2016. Where the evidence justified it, the OSI was charged with launching prosecutions.

Under a former secretary of the federal attorney-general’s department, Chris Moraitis, and with former Victorian Supreme Court justice Mark Weinberg as special investigator, the office has a powerful array of federal police and legal investigators hard at work. Its first fusillade came in March, when a former SAS soldier, Oliver Schulz, became the first Australian serviceman or veteran to be charged with the war crime of murder, in his case for the alleged killing of an Afghan man in Uruzgan province in 2012. Schulz, who was given bail, is expected to be tried next year or in 2025.

Some other governments that fought in Afghanistan, including Britain and Belgium, are believed to be closely studying the Australian model. The OSI has also opened a close liaison with the International Criminal Court in The Hague, an important move because Australia, as a signatory to the Rome Statute setting up that tribunal, must show it is vigorously investigating and prosecuting any war crimes or crimes against humanity committed by its own armed personnel or citizens. Otherwise, the ICC is entitled to launch cases itself, with Australia having to hand over the suspects.

We also now know that the United States warned Canberra in early 2021 — via a US embassy defence attaché to Australian defence force chief General Angus Campbell — that the human rights violations detailed in the Brereton report might oblige the US military to suspend cooperation with Australian special forces under US legislation known as the Leahy Amendment.

Some might find this threat a bit rich given the United States’ counterinsurgency record and the character of some local forces it has sponsored, but the American military for many years cut contact with the Indonesian special forces, Kopassus, over its killings and abductions of government critics. That Australia now risked being tarred with the same brush must have been a shock.

With the Americans watching and Brereton having found credible evidence of specific war crimes, the Morrison government had little choice but to follow the judge’s recommendation for a formal criminal investigation. Now, with a federal judge finding “substantial truth” in the allegations against Roberts-Smith, the current government has added interest in the OSI’s work.

A finding for Roberts-Smith would have been a strong warning light for the OSI. The light has turned green, though the OSI would need to feel confident it has the high standard of proof required for a successful prosecution. It must be encouraged by the fact that former members of the tight-knit SAS have moved from being anonymous sources for the Fairfax journalists to protected and indemnified witnesses for Brereton, and then to in-camera sworn witnesses before Justice Besanko.

That these soldiers have risked ostracism to testify does, to a large extent, save the “honour of the regiment” for the SAS. Since Brereton, the unit has also been intensively retrained in the rules of war. The warped command system described by Brereton, whereby seasoned non-commissioned officers came to overawe both the younger lieutenants and the captains above them, has also been tackled.

But the question of responsibility doesn’t end with the soldiers committing the alleged offences. Fellow soldiers didn’t come forward. Officers failed to monitor their soldiers closely, signed off on falsified reports of enemy encounters, or implicitly condoned the practice of planting “throwdowns” (weapons or radio sets) on the bodies of killed civilians.

One of the most sickening allegations against Roberts-Smith was that he murdered a one-legged Afghan man and took his prosthetic leg back to base as a war trophy. In an unauthorised bar on the main Australian army base in Uruzgan known as the “Fat Ladies Arms,” Roberts-Smith and other soldiers used this leg as a beer-drinking horn.

The existence of this bar, flouting the rules against alcohol on operations, can hardly have escaped the attention of any of the officers or non-commissioned officers running the operation. That this breach of orders was tolerated perhaps shows the leeway afforded the SAS troops.

In the wake of the Brereton report, at least two serving or retired generals tried to hand in medals won as commanders in Afghanistan but were asked to hold off. ADF chief Angus Campbell’s decision to withdraw the unit citation from special forces personnel who’d served in Afghanistan was overruled by Peter Dutton as defence minister.

This week in Senate hearings, Campbell said a review handed to defence minister Richard Marles two weeks ago had considered whether “a small number of persons who held command appointments” should lose medals or honours. Campbell himself was commander of the Middle East task force covering Afghanistan in 2011–12, regularly visiting Australian troops in the field from his base in the United Arab Emirates, and was awarded the Distinguished Service Cross for his role. Pushed by independent senator Jacqui Lambie, a soldier for ten years, Campbell said he was himself included in the review.

A wider responsibility rests on the political leaders and policy advisers who sent soldiers into an unwinnable conflict in which forty-one would be killed and many more injured, and after which dozens would commit suicide and others, partly for want of control and discipline, seem likely to face imprisonment.

Kim Beazley, newly appointed chair of the Australian War Memorial council, faces some immediate challenges. Two of his predecessors — Kerry Stokes and former defence minister Brendan Nelson, who appeared as a character witness for Roberts-Smith — left an unexploded bomb: an exhibit of Roberts-Smith’s combat gear and material extolling his heroism.

It may be tempting to simply remove the display. But rather than a historical airbrush, an exhibit about the Brereton inquiry and the OSI might better suit the times. Even Charles Bean, the AWM’s founder, included the 1918 rampage in 1918 by Anzac troops against Palestinians at Surafend in his official history of the first world war.

A sad reminder that the whole operation was never really about the Afghans came when the Department of Foreign Affairs and Trade withdrew its embassy from Kabul at the first sign of US withdrawal, two months before the city fell to the Taliban in August 2021. Thousands of Afghans who had worked with Australian forces or agencies were left at risk of vengeance.

This week Australia’s former inspector-general of intelligence and security, Vivienne Thom, reported on their plight to the government. Responding, ministers including Marles, foreign minister Penny Wong and attorney-general Mark Dreyfus blamed the Morrison government and said criteria for asylum would be expanded. But Afghans have been given only until the end of November to apply — how they would do that in the absence of an embassy is unclear — and the program will close at the end of May next year.

Brereton’s recommendation that Canberra not wait for the end of investigations and trials to pay compensation to Afghan victims and bereaved families was put in the too-hard basket eight months later when the Taliban took Kabul.

The dust of Uruzgan, as sung about the Australian diplomat who performs under the name Fred Smith, will keep blowing in. •

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But Besanko’s incendiary finding early yesterday afternoon that Ben Roberts-Smith, the most highly decorated and revered Australian soldier since the Vietnam war, was “a murderer, a war criminal and a bully” — as the headline in the Age instantly trumpeted its victory — is a watershed moment for the future of investigative journalism and, more profoundly, for the future of our military forces, upon whose reputation much of our national self-esteem has been cultivated for more than a century.

Besanko ruled that Roberts-Smith murdered or was complicit in the murder of multiple unarmed civilians while serving in Afghanistan. He found, on the balance of probabilities, that Roberts-Smith kicked a handcuffed prisoner off a cliff in 2012 before ordering another soldier to shoot him dead. He further found that in 2009, the SAS corporal ordered the killing of an elderly man found hiding in a tunnel in a bombed-out compound and, during the same operation, murdered with a machine gun a disabled man with a prosthetic.

The decision was not a criminal conviction but a civil judicial determination of truth on the “balance of probabilities.” But the reputation of Victoria Cross and Medal for Gallantry winner Roberts-Smith lies in tatters, along with that of the Special Air Service Regiment, with which he served, and the troubled Australian deployment in Afghanistan for which he was once a poster boy. And an air of grim foreboding hangs over the coming Afghanistan war crimes prosecutions in which Roberts-Smith is front and centre among many soldiers accused of grave abuses.

Roberts-Smith’s decision to sue for defamation must go down as one of the biggest own goals in history. As Age reporter Nick McKenzie pointed out after the verdict, the journalists had not wanted to go to court and neither had the SAS soldiers forced to give evidence against their former comrade. Roberts-Smith gambled that by taking defamation action he would intimidate and silence his media accusers. Instead, he simply amplified massively the damaging publicity in a case that dragged out over five years, thanks to Covid, and ended by vindicating his accusers.

Had Roberts-Smith simply professed his innocence and rejected the allegations in the Age reports, however damning they were, the media coverage would likely have subsided until the findings of the Brereton inquiry evolved into war crimes prosecutions, a process that clearly still has a way to run. At that point, if charged, he would have been judged alongside others accused of equally heinous crimes, with perhaps a better opportunity to introduce mitigating evidence and supportive witnesses — instead of flying solo into the sun in the civil courts.

Nine Entertainment, dating back to when it was known as Fairfax Media, has been rightly applauded for backing its journalists in this case. Had it lost, it would likely have been up for the bulk of the costs of the two legal teams — estimated at as much as $25 million — aside from any award of damages. (Another $10 million is estimated to have been spent by the Commonwealth on its representation in the case.) Even with an expected costs order in its favour, Nine is likely to finish out of pocket to the tune of several million dollars. But given the gravity of the matters at the heart of the stories, the company really had no choice but to stand and fight, for the sake of its own reputation as much as that of its star journalists.

The modern history of media defamation cases in Australia, including at Fairfax, has been mostly about negotiating early settlements and quick payouts to avoid the potentially crippling costs of going to trial and losing — a fact that often has only emboldened litigants whose misconduct was a proper target of journalistic investigation but who have plenty of money to stare down the media and muddy the waters with writs.

Had Nine lost to Roberts-Smith, the fallout would likely have been very serious for the future of investigative journalism in Australia. The huge financial toll would have made all publishers and broadcasters even more wary about tackling big stories challenging high-profile, well-resourced entities, more likely to fold than fight when their journalism was challenged legally, and probably less enthusiastic about investing the big bucks needed to employ and deploy good investigative journalists.

The decision in the defamation case has no formal bearing on the war crimes proceedings, which is why defence minister Richard Marles was able to escape yesterday with a brusque “no comment” on the civil matter when his office will undoubtedly be consumed with analysis of the fallout from the case. But the intense publicity surrounding the trial and its shocking conclusion will sharpen expectations of a timely and thorough interrogation of the conduct of Australian forces in Afghanistan, which is now a full-blown national scandal and an international embarrassment.

On the steps of the court after the verdict, Nick McKenzie — whose formidable career and reputation also hung in the balance with the trial’s outcome — rightly pointed out that the decision involved one soldier not his entire regiment, many of whose members had bravely spoken out about his conduct. “I’d like Ben Roberts-Smith to reflect on the pain that he’s brought on lots of men in the SAS who stood up and told the truth about his conduct,” McKenzie said. “They were mocked and ridiculed in court. They were bullied. They were intimidated.”

But with many other SAS soldiers under active investigation for murder and other very serious war crimes, and with the brutal and ugly culture of the unit drawn in graphic detail during the defamation hearings, the future of the SAS Regiment is in serious question if not untenable. It is painfully evident that much of the behaviour that led to the alleged atrocities thrived under an elitist and secretive code. Some SAS members were clearly emboldened to believe they could act with impunity and in defiance of international law.

The indications that multiple offences occurred over many years in Afghanistan calls into serious question not only the failure of the SAS commanders to maintain discipline but also the lack of supervision by the entire command structure of the Australian Defence Force.

Just as the misconduct of a minority has tarnished the reputation of the entire SAS and all those who fought with courage and dedication in Afghanistan, so too has that misconduct cast a shadow over the reputation of the entire ADF, its proud legacy in two world wars and multiple other conflicts, and its claim to be the repository of the hallowed Anzac spirit and a standard-bearer of the Australian character.

The problem has been compounded by sections of our defence establishment who have resolutely defended Ben Roberts-Smith and denounced the work of those journalists who dared to challenge his record, not least within the previous leadership of the Australian War Memorial. Most egregious among them was former AWM director and later chairman Brendan Nelson who, after the first reports appeared in the Age, accused the journalists of running a scurrilous and unfounded campaign against the SAS and Roberts-Smith in particular.

“Australians need to understand that we have amongst us a small number of real heroes and Ben Roberts-Smith is one of them,” Nelson declared. “I say to the average Aussie, if you see Ben Roberts-Smith, wave and give him a thumbs up.” When he appeared as a witness in the Federal Court two years ago, Nelson said he had been cautioned by a senior member of government about his effusive support for the soldier, and went on to say that he had rung Roberts-Smith after reading the story about him: “I told him I’d read the story, I knew it was about him. I told him that I believed in him. I was very sorry that such an article should be published about him.”

The $25 million question is how Ben Roberts-Smith will foot the bill for his and Nine’s costs in the likely event that the court orders him to pay. It has been reported that his boss and principal backer, Seven Network magnate Kerry Stokes, lent him $2 million to pursue the action against Nine. Stokes, who was chairing the AWM board when the case was launched, yesterday expressed disappointment with the decision and appeared to try to dismiss it as a disagreement between soldiers.

“The judgement does not accord with the man I know,” Stokes said. “I know this will be particularly hard for Ben, who has always maintained his innocence. That his fellow soldiers have disagreed with each other, this outcome will be the source of additional grief.”

It has been reported that the Stokes loan to Roberts-Smith was secured with his Victoria Cross medal. If so, this could well prove one of the worst commercial decisions in the shrewd businessman’s career.

As I have written previously, it would be politically and morally untenable for a soldier found to have committed murder to be allowed to keep a Victoria Cross — and an insult to the memory of all other VC winners. If Roberts-Smith’s right to wear the VC is revoked for dishonourable conduct, the medal will have little value beyond that of a historical curiosity, and certainly won’t be worth the $1 million-plus that Kerry Stokes has generously paid to acquire other Australian VCs for the AWM.

The court victory is another feather in the illustrious cap of veteran journalist Chris Masters but it cements McKenzie’s place as the pre-eminent Australian investigative journalist of his generation, if not all generations. Over two decades he has exposed a succession of scandals in Australian public, corporate and criminal life, but none more serious or consequential than the rot at the core of Australia’s armed forces. •

The post Murder he wrote appeared first on Inside Story.

At state level, however, boxes aren’t so often needed. Labor premiers Bob Carr (New South Wales), Steve Bracks (Victoria) and Peter Beattie (Queensland), for example, all retired on their own terms in the mid 2000s after securing three election victories.

WA premier Mark McGowan seemed likely to follow suit. After winning office easily in 2017 and then spectacularly in 2021, a comfortable election win in 2025 was assured. It was widely assumed he would then hand over the leadership to someone else. But on Monday this dominant figure in WA politics shocked almost everyone by announcing his resignation as premier and from parliament.

With the benefit of a few days’ hindsight, perhaps we should not have been quite so surprised. Remaining in office until the next election, due in March 2025, and for a respectable period after that would have meant three more years in the job — three more years of “normal” politics in which the only direction was down, given the heights McGowan had reached.

And what heights! Politically, McGowan achieved the greatest electoral victory in Australian history in 2021, securing almost 60 per cent of the primary vote for Labor — which translated into fifty-three out of fifty-nine seats in the state’s Legislative Assembly — and reducing the Liberal Party to a derisory two seats.

On top of that, Labor took outright control of the upper house for the first time in its history, and promptly reformed the electoral system to remove Australia’s last case of egregious rural vote weighting. McGowan then played a pivotal role in Anthony Albanese’s bid for the prime ministership, helping Labor win four WA seats from the Liberals at last year’s federal election.

Added to that, McGowan’s period as leader has been accompanied by record budget surpluses, driven by booming iron ore and gas prices and a deal brokered with Scott Morrison that ensures at least 70 per cent of GST raised in Western Australia is returned to the state. The economy is strong, and McGowan has a respectable record of reform on issues such as voluntary assisted dying, environmental protection and public transport investment through Labor’s signature Metronet suburban rail project.

All of this, of course, was underpinned by McGowan’s deft handling of the Covid crisis, in which his hard border closures fed into Western Australia’s inherent independent streak. By becoming “an island within an island,” the state largely kept Covid out, allowing daily life to continue almost as normal while the mining industry powered on. Toss in disputes with Clive Palmer, the Morrison government and the NSW Liberal government, and the rest is history.

Of course, there were failures — most noticeably in the youth detention system, the destruction of Juukan Gorge, and lax regulation of Perth’s only casino (which led to a royal commission) — as well as problems in health and housing. But overall, McGowan’s legacy is assured politically, economically and financially.

What happens now?

After a day of factional drama on Tuesday within the Labor caucus, deputy premier Roger Cook has emerged as the premier-elect. Cook has been Labor’s deputy leader since he entered the parliament in 2008. Like McGowan, he had a good pandemic: as health minister he was often by the premier’s side, and the state’s low incidence of Covid gave him a prominent and largely positive public profile in a portfolio that is often a poisoned chalice for an ambitious minister.

As Covid’s prominence fell during 2021, though, problems in the health system mounted and Cook was shifted into the economic portfolios of state development, tourism and science. He later added hydrogen industry to his responsibilities, and he has been active in promoting the state’s critical minerals industry. In retrospect, the shift was shrewd, allowing him to demonstrate a breadth of interests.

Cook has promoted himself as the continuity leadership candidate, but he does represent a departure from McGowan in some important respects. He has described himself as “born and bred” in Western Australia — subtly differentiating himself from McGowan and his main challenger for the leadership, health minister Amber-Jade Sanderson, both of whom were born in New South Wales.

He is also the first strongly factional Labor leader for many years, having been senior in the party’s Left faction. By contrast, McGowan — like former premiers Geoff Gallop and Alan Carpenter — was factionally unaligned.

Cook has always had a strong interest in Aboriginal issues, having worked for several Aboriginal advocacy organisations before entering parliament. Whether this leads to a change in the government’s hard-nosed approach to juvenile detention — for which McGowan was increasingly facing criticism — will be closely watched.

The main issues facing the new premier and his government will be those facing most state governments around the nation — health and housing systems under stress, cost-of-living pressures, and labour and skill shortages. Unlike in other states, however, Cook has a large budget surplus, a strong economy, a weak opposition and a massive electoral buffer. He now has twenty-one months to prove himself.

For Anthony Albanese, McGowan’s resignation is undoubtedly a blow. Before 2022, Western Australia had been a Liberal stronghold federally. But McGowan’s popularity saw massive swings to Labor, with four seats switching to Labor, which also gained a senator. With McGowan gone, those seats are potentially back in play.

Western Australia’s support for the Voice referendum may also come into question. Albanese has been diligently paying attention to the state, visiting twelve times in his first year, including holding a cabinet meeting in Port Hedland in the state’s Pilbara iron ore region. While some state and territory leaders have raised the possibility of rewriting the state’s GST deal now its architect is leaving the scene, there is little prospect of that happening. It would spell certain electoral disaster in Western Australia for any federal political party. •

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The HAFF is supposed to deliver 30,000 social and affordable homes over five years. It would be the first significant federal investment in rental homes for low-income earners since the Rudd government’s social housing initiative a decade and a half ago. That $5.6 billion scheme in response to the global financial crisis built almost 20,000 new dwellings and repaired another 12,000, some of which had become uninhabitable.

After that sugar hit, though, it was back to the usual lean years for not-for-profit housing providers, who once again had to cobble together funds from a range of sources to complete one-off projects, always uncertain where the next bucket of money or parcel of land would come from.

The result: Australia’s share of social housing, where rent is fixed at no more than 30 per cent of tenant income, continued its long-term decline to fall from just over 5 per cent of all dwellings in 2001 to 3.8 per cent at the last census.

Given the rarity of substantial public funding, many in the community housing sector are keen to see the HAFF proceed. Yet few could deny that the Greens’ critique is correct — Labor’s scheme is a meagre response to the scale of the problem.

More than 163,000 households are waiting for social housing. Since many of those households are couples and families with children, the number of people stuck in the queue is well over 300,000 and their wait could be longer than ten years. Four in ten households are classified as “greatest need” — in other words, they’re not just struggling to keep a roof over their heads but may be homeless or at risk of homelessness, fleeing family violence, or living in housing that makes them sick.

In its latest State of the Nation’s Housing Report, the National Housing Finance and Investment Corporation estimates that 331,000 low-income households are in rental stress, spending more than 30 per cent of their income in rent and unable to afford other essentials such as food, heating and transport. But, as the corporation acknowledges, this estimate is conservative. Other recent analysis puts unmet housing need at 640,000 households. The Greens are right to say that the 30,000 homes promised under the HAFF will barely touch the sides of Australia’s housing crisis.

Another strand to the Greens’ critique is that it will take too long for any homes to get built. In the interim, thousands of low-income tenants are at risk of being forced out of their current homes as they are removed from the expiring National Rental Affordability Scheme (another Rudd initiative).

The $10 billion for the HAFF will be invested rather than spent directly on housing. Only its returns, at least a year away, will fund construction. And, as the Greens also point out, Australia’s existing Future Fund lost money last financial year, so it could be several years before proceeds are available to invest.

The government says that up to $500 million from the HAFF could be invested in housing each year but it hasn’t specified a minimum annual spend.

Even assuming immediate positive returns, money from the fund won’t provide up-front grants to build dwellings. Instead, they will be used to bridge the gap between the rents low-income tenants can afford to pay and the costs of building, maintaining and operating housing. The idea is to give not-for-profit housing providers revenue certainty so that they can borrow from other sources. In this way, modest sums of public money are used to leverage large amounts of private capital for a positive social purpose.

At least that’s the theory. Analysis for the Australian Housing and Urban Research Institute concluded that “no amount of ‘innovative’ procurement or financing will yield a government ‘free lunch.’” The researchers found that the cheapest and most efficient way to fund new social housing is direct public investment — which is what the Greens are pushing for.

“Our point to the government is that you would not fund schools or hospitals via an uncertain gamble on the stock market,” housing spokesperson Max Chandler-Mather told the Conversation’s Michelle Grattan. “We’re much better off investing money directly in building public and affordable housing every year.”

Like Rudd’s GFC stimulus package, the HAFF will soon be fully committed. New builds will grind to a halt and we’ll be back to square one.

The Greens want the government to commit $5 billion in social housing funding annually. They say the money could come from reining in negative gearing and the capital gains concessions to property investors, or repealing the stage three tax cuts.

They are also calling for a two-year rent freeze. This sounds like a pitch to voters in the urban seats they hope to pinch from Labor at the next election, and it may well strike a chord in electorates with a high proportion of renters, like Macnamara in Melbourne, where Labor narrowly defeated the Greens on preferences in 2022. But it is a very blunt instrument likely to deter new private investment and have other unintended consequences.

A better approach could involve adapting sophisticated European models of rent regulation. Germany, where 58 per cent of households rent, has a system of reference rents for similar-quality dwellings in the same city or region. Landlords can’t raise rents more than 15 or 20 per cent above this level in any three-year period. Rents can rise in response to cost increases and wage increases, but only in a predictable and gradual manner. As economics writer Peter Martin has pointed out, the ACT limits rent increases to CPI and “Canberra landlords don’t seem to have withdrawn from the market.”

The government regards rent and tenancy laws as a matter for the states and territories. The Greens counter by pointing to the role Canberra played in preventing evictions during Covid. And Labor has undermined its own argument by making efforts to strengthen national renters’ rights a key priority at the most recent meeting of national cabinet.

The government could also use the National Housing and Homelessness Plan, which it is developing at the moment, and the next National Housing and Homelessness Agreement to develop measures with the states and territories to moderate rent rises and improve tenant security by getting rid of no-cause evictions and lease terminations.

The Greens’ overall critique of the HAFF is in many respects well founded. But are they letting the perfect be the enemy of the good by blocking the legislation?

The current stoush is reminiscent of the stand-off over Kevin Rudd’s carbon pollution reduction scheme, which the Greens refused to back in 2009, arguing that it would not reduce carbon pollution for at least twenty-five years. The following year they backed Julia Gillard’s carbon price instead. The outcome was a better policy.

Yet the Greens continue to wear opprobrium for that decision, not least because Gillard was so weakened by the broken “carbon tax” promise that her government and its carbon price were thrown out at the next election, ushering in a decade of inaction on climate.

Would it therefore be wise for the Greens to back the HAFF, despite all its shortcomings, and use it as a building block for better policy?

That’s certainly the view of their crossbench colleague senator Jacqui Lambie, who has labelled the Greens’ opposition “disgusting.” “For goodness sake, just tick off on it,” she said earlier this month. “Let’s get these homes built.”

Labor’s Penny Wong, leader of the government in the Senate, is similarly impatient. She has accused Chandler-Mather of prioritising media attention and his own ego “over housing for women and kids fleeing domestic violence.”

But Labor may be underestimating its opponent. A self-declared “massive housing nerd,” Chandler-Mather has a firm grasp of the policy issues and has a demonstrated capacity to get his message across to key audiences, especially younger voters. After all, that’s how he won the Brisbane seat of Griffith from Labor’s shadow environment minister, Terri Butler, at the federal election.

Labor leaders may also be misjudging the political moment. Many of its own members think the party’s housing policy is too weak and have put negative gearing reforms on the agenda for debate at Labor’s national conference in August. While prime minister Anthony Albanese dismissed such moves, the mood may be shifting.

A long-term trend is shifting households away from home ownership towards renting, and it isn’t only young people who are affected. Growing numbers of families with children are renting, and an increasing cohort of older long-term renters face the prospect of their precarious housing circumstances extending into old age as they leave the workforce and their incomes fall.

Late last year the government appointed Susan Lloyd-Hurwitz as the interim head of its National Housing Supply and Affordability Council “to deliver independent advice to Government on ways to increase housing supply and affordability.” As the former head of Mirvac Property and a former president of the Property Council, Lloyd-Hurwitz is not a usual suspect when it comes to debates about tax breaks for property investors. Last week she told the Financial Review that she thinks that concessions like negative gearing and the capital gains tax discount drive up prices and should be reined in.

Chandler-Mather says the Greens’ demands are “a public starting position” and “they’d like to meet the government half way.” If Labor wants to get the HAFF over the line, then it could offer more. It could, for example, go beyond the treasurer’s oblique hints that there will be more money and pledge that the HAFF will be only the first tranche of a pipeline of investment. It could also indicate more clearly how it might work with the states and territories to improve conditions for tenants in the private rental market.

Affordable housing policy consultant Jennifer Kulas recommends that the government tweak the scheme to provide greater certainty that much-needed funding will be made consistently available to the sector over time. She says it could remove the $500 million cap on annual disbursements and formally guarantee a minimum yearly amount from the HAFF instead. Those funds could be indexed in line with construction costs, which rose almost 12 per cent last year. The government could also promise to increase the HAFF’s base capital each year so that the fund continues to grow and fund new housing beyond its current five-year horizon.

By pushing the HAFF to the brink, Albanese appears to be wagering that Labor can see off the Greens’ challenge at the next election by arguing that they stopped any new homes from getting built. But given the way the debate about housing in Australia is developing, that may not be the safest bet. •

On Tuesday 23 May, Peter Mares will be facilitating a free online forum on Australia’s housing crisis for La Trobe University’s Ideas and Society Program.

The post The perfect versus the good appeared first on Inside Story.

A few days after the report’s release, a Resolve poll showed a further decline in support for constitutional change. The finding served to highlight the notions of “risk,” “pragmatism” and “compromise” that are central to the committee’s report.

Pragmatism in particular — as strength or weakness — quickly became a theme of public debate. Encouraged by the minority report of the committee’s Liberal members, former Indigenous social justice commissioner Mick Gooda counselled the government’s Indigenous advisers to give up the hope of the Voice having the constitutional right to advise the executive. Responding on ABC Radio National, Noel Pearson spurned Gooda as a compromiser, leaving the public to infer that Anthony Albanese’s Indigenous advisers, having made compromises in the past, have now drawn their line in the sand.

The committee was examining the wording of section 129, which has four elements: introductory words recognising Aboriginal and Torres Strait Islander peoples as the First Peoples of Australia; subsection 129(i), providing for the establishment of the Aboriginal and Torres Strait Islander Voice; subsection 129(ii), saying that the function of the Voice is to make representations to parliament and the executive; and subsection 129(iii), giving parliament power to legislate the Voice, including its composition, functions, powers and procedures.

Because Section 129 is intended as an act of “recognition,” it faces a decisive test: does it attract the assent of those to be recognised? On the basis of the evidence it received, the committee accepted that “the Voice, as established by the Bill, is the preferred method of recognition sought by Aboriginal and Torres Strait Islander peoples in the Constitution.”

The National Party member of the committee, Pat Conaghan (MHR for Cowper), didn’t agree that recognition should take this form. His dissenting report asserts that the bill “conflates two entirely separate issues”: whether to recognise Indigenous Australians in the Constitution at all; and whether a constitutionally enshrined advisory body should be the form recognition takes. He didn’t declare his hand on the first issue, but he is clearly in the No camp on the second.

But if recognition is a reciprocal process — with recogniser and recognised negotiating agreement about its terms — then voters have only one issue to decide: whether to demonstrate recognition by putting a Voice in the constitution. A majority of committee members were satisfied that “the words contained in the Bill do give effect to what Indigenous Australians have asked for, in processes such as the Uluru Statement from the Heart and the Final Report to the Australian Government on the Indigenous Voice Co-Design Process.”

Law professor Megan Davis, one of the key figures in development of the Uluru Statement, reinforced this point when she appeared before the committee on 14 April. Referring to a January 2023 Ipsos poll, she declared that “80 per cent of our mob support… constitutional recognition to empower their people.” (She could have added that only 10 per cent of Indigenous respondents to Ipsos said they opposed the constitutional amendment, with 10 per cent undecided.)

Davis also referred to Reconciliation Australia’s latest Reconciliation Barometer: “They’ve got the number at 88 per cent.” The Reconciliation Barometer 2022 asked Indigenous respondents to rate the importance of protecting the Indigenous Voice by putting it in the constitution: 57 per cent said this was “very important” and a further 30 per cent “fairly important.”

The question of what proportion of Aboriginal and Torres Strait Islander Australians really wants the Voice matters because Indigenous dissent is being highlighted by the No campaign. Dissident figures Nyunggai Warren Mundine and senator Jacinta Nampijinpa Price have emerged as the faces of the official No campaign’s advertising and media appearances; and at the other end of the political spectrum, senator Lidia Thorpe — who I understand has not yet finalised her position — urged ABC Radio National’s Patricia Karvelas to hear the “progressive no” case. According to Senator Thorpe, Indigenous people are being drowned out by a “loud” Yes campaign bankrolled by corporate Australia.

In raising doubt about what Indigenous Australians want, the No campaign received assistance from Liberal committee member Kerrynne Liddle, an Arrernte woman who represents South Australia in the Senate. She persistently questioned Indigenous witnesses about whether it was possible for a national representative process to cover the diversity of their opinion.

On 14 April she posed such a question about the regional assemblies that culminated in the Uluru Statement from the Heart. On 17 April she asked a Wiradjuri witness similar questions: “Who was your representative at that dialogue? Are you aware who that was? Did you have anybody from here [Orange] that was a representative at that dialogue?”

On the assumption that the government will legislate the model proposed by Tom Calma and Marcia Langton, Liddle expressed doubts about the new body’s capacity to represent Indigenous diversity. She asked witnesses from Queensland whether the Calma–Langton model gave enough seats to Queensland. She asked Western Australian witnesses whether the regional diversity of their state would be adequately represented.

In pursuing this line, Liddle was following her leader. Peter Dutton has said that a body that aspires to be representatively “national” will succeed only in becoming a “Canberra” Voice — though he may have surprised his own colleagues when he made this point. When the Liberal Party met to confirm it was in the No camp, according to the Nine papers’ David Crowe, its position had three facets: recognition of “First Peoples” in the Constitution; legislated local and regional Indigenous bodies; and a legislated national Voice. At his press conference after the meeting, Dutton rubbished the idea of a national body, legislated or otherwise.

Liddle also wondered what the amendment would really recognise. “Have you actually looked carefully at the words to see whether it really, truly even acknowledges us, as opposed to acknowledging a Voice, and do you have any thoughts on that?” she asked former Liberal Indigenous Australians minister Ken Wyatt on 28 April. Why no mention of “First Nations,” she wondered. (The phrase in the amendment is “First Peoples.”)

On the same day, Liddle challenged George Williams, a professor of constitutional law, with the observation: “An Aboriginal and Torres Strait Islander Voice is referred to three times in the wording of the three paragraphs — not Aboriginal Torres Strait Islander people, not a Voice separately, just an Aboriginal and Torres Strait Islander Voice.”

When Warren Mundine and his lead researcher Vicki Grieves Williams each appeared before the committee, they too stressed Indigenous diversity, arguing that the structures of the Voice (as imagined in the Calma–Langton report) are not authentic to First Nations culture. Grieves suggested that historians and anthropologists know this to be true but are holding back.

In her evidence on 14 April, Anne Twomey, another professor of constitutional law, defended the proposed amendment but scrupulously refused to speak with certainty about what Indigenous Australians want by way of recognition. “My only knowledge, to the extent that I have any, was of the views of the Referendum Working Group,” she said. “But other people may argue that the Referendum Working Group is not sufficiently representative of Aboriginal and Torres Strait Islander people, and I can’t speak to that…”

Yet Liddle and two Liberal colleagues, Keith Wolahan MP and senator Andrew Bragg, made no mention in their dissenting report of these doubts about how Indigenous Australians wishes have been represented and will be represented in the future. So why do I mention them at all?

Doubts about “what Indigenous people really want” — doubts that evoke Indigenous Australia as too diverse and localised to have an identifiable aggregated interest — are likely to remain prominent No campaign themes. Pitched to voters who would like to be recognisers — people of goodwill — they will create uncertainty about whether the government has found the form of recognition that pleases the largest possible proportion of Indigenous Australians.

Even if such doubts are in the minds of only a small minority of voters with weak attachment to the Yes side, the effect could be damaging to Yes. Pitched to those who are already poised to vote No, they provide a socially acceptable reason for voting No.

After the referendum — whether it is carried or not — will come further debate about what Indigenous Australians want and who speaks for them. This will be the inescapable context of parliament’s debate on a bill to set out the form, functions and powers of the Voice. The path to the Voice is land-mined with the very questions about representation that the Voice proposal is meant to resolve.

Risk in another key theme of the No forces. As Keith Wolahan (Liberal MHR for Menzies) remarked during the committee’s questioning, “Our task as a parliamentary committee is to assess and quantify risk.” He and others agreed that there were two kinds of risk to consider: the risk to our system of government of a weakening of executive power, and the risk to national unity if the referendum resulted in only a slender Yes majority or — worse — a majority No vote.

A strand of Australian political thought holds that the unelected judiciary should have as few opportunities as possible to use its power to challenge decisions by the executive. This view has been acclaimed as “conservative,” though how widely it is shared remains an open question. The Liberals’ dissenting report explained the danger of judicial overreach by pointing to what it sees as a great strength of our Constitution: it “confers very few rights” and “instead leaves it to the parliament to make laws providing for rights where necessary, with the flexibility to adjust to changing circumstances over time.”

Viewed from this perspective, the problem with the words in the proposed section 129 is that the High Court could interpret them “in a way that imposes duties on the executive.” What duties? A duty to consult, and a duty to consider.

Under a duty to consult it would be mandatory for the executive to give the Voice an opportunity to submit a representation before making decisions on matters relating to Aboriginal and Torres Strait Islander people. Under a duty to consider, it would be mandatory for the executive to consider representations from the Voice before making decisions on matters relating to Aboriginal and Torres Strait Islander people. According to these Liberals, executive duties that derive from the Voice’s “right” to be consulted and considered, would have “profoundly disruptive effects on the operation of government.”

Would a High Court ever deliver judgements that profoundly disrupted the operation of government? Those who are happy with the amendment as it stands think this very unlikely. “I don’t think the High Court is in that business,” says former High Court chief justice Robert French. “Do we really seriously think that the High Court is in a position that it would do that?” asks Anne Twomey. “And my answer is: no, I’m sorry, I don’t.” Former High Court justice Kenneth Hayne took a similar line.

Why are Liberals not reassured? Wolahan made it clear that he is troubled by what has happened to Australia’s system of government in the era of human rights. Like other liberal polities, Australia has tried to reconcile executive efficiency (the ability of ministers and their public servant delegates to make binding decisions within timeframes judged as reasonable) with our commitment (in statute and treaty) to human rights. In Australia the difficulty has been felt most acutely in decisions about who is entitled to be in Australia.

As Wolahan asked one legal expert on 1 May, “If we were to compare the migration area of law in the review that occurs in that area of law, we would see that there’s broad agreement that there is more red tape and delay [in] those decisions. Is there not a risk that that gets expanded to a broader array of executive government decision-making?”

In their dissenting report, Bragg, Liddle and Wolahan list recent senior court cases they believe to have trammelled the executive, remarking: “There are many other examples of decisions that have invalidated legislation or government decisions, especially in the field of migration.” Yes, many people have noticed that, but not all of us lament the trend.

The argument over the Voice has become the latest flashpoint in an ongoing struggle over how to build “human rights” into Australia’s system of government. When Mark Latham and John Howard agreed in 2004 to abolish the Aboriginal and Torres Strait Islander Commission, or ATSIC, they taught Indigenous Australians an unforgettable lesson in the frailty of legislated rights.

And the political risk? The committee considered the possibility the referendum might be lost. Most members and most witnesses dreaded that outcome. “A referendum failure would haunt our country for decades; it will haunt all of us,” the Liberals’ Julian Leeser said. “The question will be: did we make it as easy as possible for Australians to vote yes?”

In contemplating that possibility, the benchmark of the 1967 referendum, when 91 per cent voted Yes, seemed to weigh heavily. Sean Gordon, chair of Uphold and Recognise, laid out the Yes advocates’ dilemma. “The most important thing,” he told the committee, “has always been that we need to put forward a position that is worth winning from the perspective of Indigenous people, but it also needs to be winnable, given that we need 90 per cent of the population to support this.”

Why 90 per cent? Gordon recalled the 1967 referendum as a “nation-building” moment. He wants the 2023 referendum to be another: “a 51 per cent win isn’t going to create that nation-building effect.” Questioned by Senator Liddle, Ian Trust, chair of the Empowered Communities national leaders’ group, agreed that a 51 per cent victory would raise a “question… as to how much it is supported… 51 per cent is obviously not high enough.”

When Liddle repeated this enlarged notion of referendum success to Leeser, he first reminded her of the constitutional definition of a successful referendum. He then added that he wants the referendum to win “handsomely, because I think that is better for the reconciliation process and… for national unity…” Constitutional lawyer Father Frank Brennan remarked, “Let’s try and get the wording as right as we can so that we can really get the country to ‘yes,’ and not just get over the line but do it in a way which attracts mass support.”

The ambition to win “handsomely” to create “national unity” gives impetus to the changes to the proposed amendment suggested by these men — changes that would reduce the possibility of the High Court one day ruling that the executive has a duty to consult the Voice and a duty to consider what the Voice says. In the words of Senator Bragg, “If the legal risk is minimised, then the chances of a successful referendum are maximised.”

Bragg joined constitutional lawyer Greg Craven in proposing that when the bill is legislated subsection (iii) should include seven more words: “and the legal effect of its representations.” The practical legal effect of this amendment would be “to guarantee the parliament’s capacity to legislate the scope of the Voice’s representations and manage future legal effects.”

Bragg assumes that parliament can be relied on to design a Voice whose rights are legislated but not subject to judicial review. He assumes that Indigenous Australians (forgetting the fate of ATSIC) will accept recognition in this form. He claims to know a lot about what Indigenous Australians will accept as recognition and what will reassure a voting public worried by the possible disruption of the system of government.

Two changes discussed in the committee — each advocated as a means of making it easier for voters to say Yes — focus on the proposed subsection (ii). Brennan would like the Voice to be constitutionally restricted to addressing only one part of “the executive,” the “ministers of state.” Leeser would prefer that all of subsection (ii) be deleted. Uphold and Recognise points to yet another pathway to a win for Yes: they would like the referendum to amend section 75 of the constitution to enable parliament to prevent or restrict the Voice from pursuing judicial review proceedings in the High Court.

By rejecting all of these proposed changes, a majority of the parliamentary committee placed some of these risk minimisers in a delicate position. Leeser, Craven, Brennan, and Uphold and Recognise have all said they will vote Yes, even if the government goes ahead with the words they have sought to change. Each of them dreads the defeat of constitutional recognition more than the “legal risk” to executive efficiency.

So, will they continue to feed political risk by persisting in speaking and writing about the “legal risk” they see in the recognition on offer? What will they say when the No campaign quotes their arguments? Brennan believes that he has acted in consideration of a section of the voting public who “want to be sure that what is there is legally watertight.” If the government goes ahead with the words that he has found risky, will he urge voters to join him in taking the risk? •

The post The referendum’s lines in the sand appeared first on Inside Story.

Unlike any government for many decades, the Labor government explicitly committed itself to full employment. In opposition, Anthony Albanese promised to hold a jobs summit and commission a white paper on full employment. No doubt deliberately, the fact that it would be a “White Paper” called to mind the founding document of postwar Australian prosperity, the 1945 White Paper on Full Employment in Australia.

Commissioned by John Curtin’s wartime Labor government and written by a team led by economist H.C. “Nugget” Coombs, the 1945 paper used John Maynard Keynes’s economic model as the basis for a commitment to use taxes and spending to maintain full employment.

At the same time, the Chifley government turned the Commonwealth Bank into a modern central bank. Having refused to help save the economy during the Great Depression, the bank would now be explicitly focused on maintaining full employment. Coombs was appointed governor, and retained the position after Robert Menzies’s Liberals took government.

Later, still under Menzies, the Reserve Bank Act of 1959 split off the commercial functions of the Commonwealth Bank and created a new Reserve Bank of Australia with three statutory objectives: price stability, full employment and general prosperity.

Changes in monetary policy were also in prospect when Albanese and his colleagues took government last year. The shift to inflation targeting in the early 1990s, implemented using adjustments to central bank lending rates, had put the Reserve Bank in full control of macroeconomic policy. Like other central banks, it reinterpreted full employment to mean the “non-accelerating inflation rate of unemployment,” or NAIRU, a model-based construct derived from the work of Milton Friedman. (Friedman preferred to call this the “natural rate” of unemployment.) Estimates of the NAIRU aren’t stable (they are usually above the actual rate of unemployment), but have recently been near 4 per cent.

Events since the global financial crisis have challenged the belief that inflation targeting can ensure financial and economic stability. For much of the decade after 2008, central bank interest rates were stuck at or near zero in most countries. Australia was heading in the same direction, with the cash rate down to 0.75 per cent, when the pandemic hit. Responding to this and other unexpected developments, the new government commissioned a review of the Reserve Bank.

The stage seemed set for a return to the policies that gave us the postwar Golden Age. But it didn’t take long for the lights to dim. The jobs summit turned into a “jobs and skills summit” dominated by employers complaining about “skills shortages.” It wasn’t so much a shortage of specific skills; rather, employers had come up against the fact that full employment makes it as hard for an employer to fill a vacancy as it is for a worker to find a job.

Then the word “Full” disappeared from the title of the Albanese government’s Employment White Paper, which is still a work in progress. True, maintaining full employment still appears at the head of the list of objectives, but discussion so far suggests it will get short shrift when the white paper actually appears.

When it was released last month, the Reserve Bank review reflected a similar tendency. Most attention was focused on internal restructuring, while the desirability of a higher inflation target and other issues were kicked down the road. Discussion of the full employment objective in the bank’s charter was limited. Most damagingly, the review recommended removing the treasurer’s power to override decisions of the bank via an announcement to parliament. Although it has never been used, the existence of this option was central to the integrated operation of fiscal and monetary policy in the decades before the shift to inflation targeting.

And, finally, we come to the budget. The scene had been set by the report from the government’s new Economic Inclusion Advisory Committee, which recommended a large increase in the poverty-level JobSeeker benefit and a commitment to full employment. Labor treasurer Jim Chalmers immediately signalled that the first of these recommendations would be rejected as both unaffordable and politically unpopular.

Eventually the government was shamed into a modest increase in JobSeeker, but full employment disappeared from the agenda. The budget projected an unemployment rate of 4.5 per cent — exceeding estimates of the NAIRU, let alone any measure of full employment based on actual labour market outcomes (such as requirement that there should be as many vacancies as unemployed workers). During his budget speech Chalmers described the rate as “low by historical standards,” effectively confirming that his benchmark is the last fifty years of failure rather than any notion of full employment. He then returned quickly to the central theme of the government’s policy, the need to reduce inflation.

Even this short period of full employment has had hugely beneficial consequences. Workers who previously have been dismissed as unemployable have suddenly found employers willing to take them on. Remote work has persisted since the lockdowns because employers who demand five-day attendance lose workers and can’t find replacements. Even more radical ideas like the four-day week are gaining traction.

With luck, and full employment will persist a little longer. But if it does, no thanks will be due to this Labor government. •

The post Five minutes of sunshine? appeared first on Inside Story.

Chalmers’s former boss, Wayne Swan, forecast a $21.7 billion surplus in the 2008–09 budget. The global financial crisis took care of that. Four years later, heedless, Swan forecast an implausible $1.5 billion surplus. He was only $20 billion out. And we remember the hubris of Josh Frydenberg and Scott Morrison at the time of the 2019–20 budget, with their coffee cups printed “Back in Black.” Their budget was already heading for red when Covid arrived and gave them a good excuse.

This time, it’s the current financial year that Chalmers says will end in surplus. We’re in May now, and the year ends on 30 June. It would be a bad shot if he missed from this close. Let’s assume the long wait is over: Australia’s federal budget is finally back in surplus, even if only by $4 billion or so.

But will it last? The Murdoch hunting pack has focused on the budget’s forecast that this will be a one-off, and next year the budget will be back in a deficit that will then grow bigger still. And yes, that is what the budget forecasts say. But when you read the assumptions underlying those numbers you realise they’re not really forecasts, but rather a worst-case scenario. They assume a collapse of global commodity prices.

Why does Treasury give us a worst-case scenario? Because we don’t like unpleasant surprises. If a tradie promises to do the job for $1000 but then lifts his bill to $2000, we get cross. But if he promises to do it for $2000, but then after doing it, says “No, that was easier than I expected, $1000 will do,” we think he’s a great bloke.

Treasury now works on the same principle. It begins by forecasting a worst-case scenario: in this case, adopting the lowest market forecasts for prices of iron ore, gas and coal. The bears always predict a price collapse; that would flatten the profits of Australian miners, and hence Australia’s company tax revenue.

On that basis, Treasury forecast in October that company tax receipts would crash from $127 billion this financial year to $100 billion in 2023–24. But now it’s May, and prices are still high. Treasury has had to upgrade this year’s forecast to $138 billion, and the worst it can come up with for next year is now $129 billion.

Don’t assume it will end in deficit: no one knows yet. The future will reveal itself, as it always does. We could be entering a new era of surpluses or slumping back to the old run of deficits. Treasury is no longer trying to guess those numbers. It just starts with a gloomy forecast, so the eventual reality will be better than we expected, and we’ll hail their boss, the treasurer, as a good economic manager.

That’s how governments want us to see them. An unexpected budget surplus, especially the first for fifteen years, is a gold star on the treasurer’s report card. Well done, Jimmy Chalmers!

And by and large, he has done well, on the macro front. This budget is far from perfect. But as Chalmers keeps pointing out, it had to balance the need for restraint to bring down inflation with the reality that a lot of Australians are experiencing big falls in real income, the economic outlook has darkened, and the worst is yet to come. And those who have won or lost will be voting on the government in two years.

Economists in the ivory towers of academia or Murdoch’s propaganda machine feel free to ignore the pain felt by less fortunate Australians, or the government’s reasons for doing something for them. In the real world, though, Chalmers is right: government, of whichever party, has to find a balance between these goals.

Here’s a concise comparison from the budget’s key table on macro matters: table 3.3 in budget paper 1. (“Parameter variations” are the changes in Treasury’s baseline estimates with no policy changes. And remember: by the 2021 budget, the economy was already roaring ahead, and by the 2022 budget, inflation was emerging as an issue):

Neither side would appreciate the comparison, but the balance Labor struck this time is remarkably similar to that of Josh Frydenberg’s budget a year ago. He banked 75 per cent of his windfall gains from Treasury’s upgraded bottom line; Chalmers has banked 81 per cent of his. Frydenberg was facing an election two months later; Chalmers is facing a more difficult economic situation.

An important note. The net effect of policy changes is not “new spending” as our ABC mates keep mislabelling it, but new spending minus new revenue. For the four years, the budget estimates a net $41.4 billion of new spending, only partially offset by $21.9 billion of net new revenue.

Chalmers points out that $7.5 billion of that new spending was required to correct unfunded or underfunded commitments left by the Coalition government, including underfunding our biosecurity program, digital health infrastructure, the Brisbane Olympics and Canberra’s national institutions. (While the War Memorial was given a $500 million expansion, all the other cultural institutions were starved by the Coalition, perhaps to pay for it.)

After perusing the departmental expenses table in budget statement 4, I doubt that Labor has dealt with all the underfunding. Excluding the National Disability Insurance Agency, the budget assumes that the cost of running departments and agencies will grow on average by just 2.8 per cent annually over the four years, down from an annual average of 5.3 per cent over the last four years. I’ll believe that when I see it.

There are lots of spending cuts in this budget, though relatively few are specified. The government says its two budgets so far have achieved almost $40 billion of “savings and spending reprioritisations.” We’ll come to them later, but the allusions to them in the budget papers are full of management speak: there are no “spending cuts,” just spending “efficiencies” or “streamlining and modernising.” Using that language must make cuts easier on the cutters.

Still, Treasury estimates that this budget restraint will have a significant impact. In the past three years, it estimates, public demand in real terms grew by 18.9 per cent. In the next three years, it is forecast to grow by just 5.3 per cent — about the same as expected population growth. Three years of zero growth per head in public spending will be a big brake on the economy.

While we’re on the macro issues, three important things to note. First, the mix of higher commodity prices, high job growth and strong GDP growth has caused a dramatic improvement in the budget outlook, even through Treasury’s gloomy binoculars. And that has dramatically changed Australia’s debt outlook.

Instead of gross federal government debt peaking in 2030–31 at 46.9 per cent of GDP, Treasury now forecasts it will peak in 2025–26 at 36.4 per cent. That’s a big turnaround, and if it happens a great relief that increases our ability to cope with future shocks.

Second, be aware that, like the International Monetary Fund, Treasury thinks worse times are on the way. Retail sales — which had been way above trend in 2022 — are now falling as higher interest rates bite. Employment growth is forecast to shrink to 1 per cent a year for the next two years: that implies only a third as many new jobs will be created as in the past two years. Unemployment would rise, and real GDP growth would fall to just 1.5 per cent in 2023–24 and 2.25 per cent the following year. Those forecasts sound plausible.

Finally, Treasury predicts a ray of sunshine on wages. By the first half of next year, it believes, wages will be rising faster than prices, giving Australian workers their first growth in real wages for four years. But even if that is right — and Treasury has often overestimated wage growth in the past — real wages will have fallen 7.5 per cent in that time. It’ll be years before Australian workers get back to where they were before Covid.

Treasury predicts that inflation as measured by the consumer price index will decline to 3.25 per cent by the middle of next year — helped by several budget measures designed specifically to lower the CPI. That could mean less reason for the Reserve Bank to increase interest rates. But while the Reserve might ignore these budget tricks as it focuses on underlying inflation, the case for further interest rate rises now looks weak indeed.

The gloomy macro outlook makes it even more important to get the microeconomic policies right. On that score, this budget has big problems.

Labor is selling its budget as a package of measures designed to provide “cost-of-living relief” targeted to “looking after the most vulnerable.” It does some of that, but only sporadically, where it has spotted an opportunity that appeals to it.

Until the last fortnight or so saw a clamour of protest against its decision to ignore the report of its Economic Inclusion Advisory Committee urging a big rise in JobSeeker benefits, it’s clear that Labor’s only plan for JobSeeker was to move fifty-fives to sixties into the slightly less poverty-stricken category with those over sixty.

Labor’s moral and political antennae were askew. Anthony Albanese was lucky that he grew up in an era when to be poor in Australia meant the government gave you an austere but liveable income and cheap housing. That is no longer true. Albo needs to get back in touch with the angry teenager he used to be. The smug, rich sixty-year-old he has become might have something to learn from that boy.

At least the budget included a last-minute decision to lift the JobSeeker benefit by $20 a week. That’s $2.86 a day: there’s not much you can buy with that, and the budget offered no prospect of any further increases — not because it can’t afford them, but because it just doesn’t see the unemployed as a priority.

By contrast, under the stage three tax cuts — totally unmentioned in the budget papers, prompting News Corp journalist Samantha Maiden to dub them Voldemort — people with incomes of more than $200,000 a year will get an extra $25 a day. That’s more like the rise Labor’s expert committee said the unemployed should be getting. How can Labor claim it is focused on those “most in need”?

The budget papers estimate that the two changes to JobSeeker combined will cost $1.3 billion a year, in a budget of $700 billion a year. Questioned by Maiden yesterday, Chalmers implied Voldemort will initially cost $23 billion a year when it takes effect on 1 July 2024. It’s just a matter of priorities.

The government gave a better hearing to the inclusion committee’s second priority, an increase in rental assistance payments for the hard-up. They will rise 15 per cent, costing roughly $700 million a year.

And it went much further for single parents whose youngest child is aged between eight and fourteen: their benefits will rise from JobSeeker-level to pension-level — an increase of nearly $90 a week as against the $20 a week rise for those left behind on JobSeeker.

The story the spin doctors left for the budget itself was perhaps the best of all. Labor has finally acted to stem the flow of doctors out of general practice, which has seen more than sixty GP clinics close their doors in recent years, some leaving towns without doctors. But their way of fixing it, while interesting, might just backfire.

The GP crisis stems from the long freeze in Medicare rebates, begun by Labor’s Wayne Swan and continued for years by the Coalition. This effectively cut GPs’ incomes by about 25 per cent. Frydenberg ended the freeze, but it has never been made up, and only 11 per cent of new doctors now nominate general practice as their future career.

Health minister Mark Butler deserves our thanks for having listened, and persuaded his colleagues to act. But Labor won’t increase the rebates, which would have seen benefits flow to all patients. Instead, it will roughly treble the separate incentive it gives to doctors to bulk-bill.

This should more or less restore GPs’ real earnings, and see more patients treated for free. That in turn could reduce medical cost pressures on the CPI. Labor estimates that 11.6 million Australians will be able to get free (bulk-billed) care from their GP. But that also implies about fifteen million Australians will not. Watch this space.

Still, the biggest issue in health funding appears finally resolved. But the biggest issue in housing is getting further and further from a solution.

The budget forecasts that residential investment will decline 7.5 per cent in the three years to 2024–25 — at the same time as national rental vacancies have hit a record low of 1 per cent and advertised rents have risen by 10 per cent in the year to April.

Yet the budget simultaneously reveals that in the year just ending, population growth will exceed 500,000 for the first time. In the year about to begin, it is forecast to be close to another 500,000. In three years, almost 1.5 million more people will join us, yet housing is in record short supply, new construction is slumping, and every week builders are going broke.

Population growth mostly comes from net overseas migration, which is mostly under the control of the federal government. This is as bad a failure of policy coordination as I’ve ever seen.

The solutions are obvious: put the brake on immigration — especially since job growth is forecast to collapse — and put the accelerator on housing. This is now a crisis. The government should stop persisting with a patently inadequate target and funding mechanism, sit down with its crossbench critics and the industry, and work out solutions that fit the scale and urgency of the problem.

The other big problem with this budget is Labor’s fear of increasing taxes, which are far below the levels of comparable countries overseas. Just read the list of its “major budget improvements”:

The government is still frightened to impose significant new taxes on business, or any tax on “ordinary Australians.” Instead, it targets groups with no voice in public debate, like smokers and tourists. Yet many of the “most vulnerable” Labor wants to look after are smokers: the household expenditure survey shows smokers tend to be older and lower-income. Labor has hit them more heavily than the gas companies that make huge profits but pay little tax.

Cutting government-funded beds in aged care facilities from seventy-eight to sixty places per thousand people received little budget coverage. It’s one way of responding to staff shortages and “the increasing preference of older Australians to remain in their homes,” but it looks like a cynical move. It is expected to save eight times more than Labor’s extra spending on home care.

This budget is like a house with an impressive framework, built in difficult conditions, but puzzling in its detail. The further you explore inside this apparently attractive home, the more worried you become. •

The post The devils in Chalmers’s details appeared first on Inside Story.

The report’s “highest” and “immediate” priority” was for a large enough increase in JobSeeker to significantly reduce poverty among the unemployed. The right amount, it suggested, would be 90 per cent of the age pension, or an increase of $256 a fortnight.

The government has responded by increasing the rate by just $40 a fortnight, or $2.86 a day. Yes, it did some other things — a slightly increased rate for unemployed people aged between fifty-five and sixty, an increase in rent assistance by $31 a fortnight, more money for single parents with children between eight and fourteen, incentives for more bulk-billing under Medicare, and help with energy bills. That will make a difference, but not — with the exception of the single parents’ payment and perhaps some people’s energy bills — a substantial one.

The increase in JobSeeker and the youth allowance will cost an estimated $1.3 billion next financial year out of an expected $668 billion in total revenue. Despite the professed concern about the impact on inflation of pushing more money into the economy, the inflation rate is coming down, the economy is slowing and the budget has been taking more money out of the economy than it is putting in.

No doubt the government believes it got the politics right. I mean, what were the members of the advisory committee thinking by suggesting such a huge increase in JobSeeker? Even $40 a fortnight was far too high in the eyes of people like Robert Gottliebsen, who wrote in the Australian that “it is particularly galling to see able-bodied younger people gaining extra money to pursue a non-working lifestyle at a time of labour shortages.”

How can a committee of experts possibly compete with such deep-seated prejudices, and with a government that feels it must indulge them?

It was ACT independent senator David Pocock who secured the government’s commitment to set up the Economic Inclusion Advisory Committee during the negotiations over industrial relations legislation last November. He called it a “game changer” for people living below the poverty line, especially as the government agreed that the committee’s expert advice about how the most vulnerable are faring “and what needs to change to ensure we don’t leave them behind” would be released publicly before each budget.

The government honoured the promise, appointing a stellar cast of committee members. At their head is Jenny Macklin, a former Labor minister with a legacy of major reforms (including the National Disability Insurance Scheme) and a record as a researcher and expert adviser on health and welfare issues extending back to the Hawke era.

She was joined by leading academic experts in relevant fields, including Professor Peter Whiteford on welfare payments, Professor Jeff Borland on the labour market and Associate Professor Ben Phillips on inequality. Then there were representatives of the major interest groups, including the Australian Council of Social Service’s Cassandra Goldie, the ACTU’s Sally McManus and someone even Mr Gottliebsen couldn’t place among the usual suspects — Jennifer Westacott, head of the Business Council.

The government shouldn’t have been surprised by the committee’s findings. Yet it did its best to bury the report, sneaking it out late in the day, distracting attention to other issues and writing Pocock out of the script.

This response wasn’t just part of the annual political ritual of lowering expectations before the budget. Treasurer Jim Chalmers had clearly decided that tackling what the report called the “serious inadequacy” of payments to the unemployed was not sufficiently important.

As its track record shows, Labor has higher priorities than that, such as politics. It didn’t get around to increasing unemployment benefits when it was last in government. Then, in opposition, it remained sufficiently unmoved by evidence that the unemployed couldn’t survive on the prevailing rate of $40 a day as to promise no more than a review in government.

Even that commitment was dropped before the last election. It was left to the Morrison government to provide a permanent $50 fortnightly increase ($10 more than in this budget) following the withdrawal of the Covid emergency payment.

Labor’s attitude stems from deep-rooted myths about unemployment. In the words of the Grattan Institute’s Danielle Wood, the myths’ most pervasive image is “a work-shy twenty-something playing video games in their parents’ basement.” The same attitude convinced the Morrison government it was on a winner with its ill-starred robodebt scheme and accompanying rhetoric about welfare bludgers.

Department of Social Services figures show that just 16.8 per cent of people on JobSeeker and Youth Allowance are under twenty-five. Anti-Poverty Week executive director Toni Wren points out that half of those on JobSeeker are over forty-five and 28 per cent over fifty-five — many of them facing overt or covert age discrimination.

Forty-three per cent of JobSeeker recipients have been assessed as having only a partial capacity to work, mainly because higher eligibility hurdles have barred them from the more generous disability support pension. Many of them are forced to apply for eight jobs each month to continue receiving their payment.

About 10 per cent of the unemployed are single parents with children between eight and fifteen who would have qualified for the higher parenting payment before the Howard and Gillard government reduced the cut-off age for children from sixteen to eight. This move has now been largely reversed, which will improve the lives of some of the one in six Australian children living in poverty — a figure that Toni Wren points out has not changed in twenty years.

In short, the figures reveal a very different profile of the unemployed from the stereotype.

JobSeeker has become the fallback payment for many of those who have been locked out of higher income support options by increasingly restrictive eligibility requirements. This has very little to do with the populist rhetoric that anyone should be able to get a job when the unemployment rate is down to 3.5 per cent.

Danielle Wood points out that the Macklin committee’s proposed increase of $128 a week would still take the payment to only just over half the minimum wage, leaving a very significant financial incentive to work. Better employment services for those who face large barriers to employment would help; ACOSS says Australia’s spending on those services is less than half the OECD average.

The government is reviewing employment programs, and it’s to be hoped they’ll improve, but this is no substitute for a decent level of JobSeeker. As the Macklin committee stressed, the payment’s current inadequacy is also itself a barrier to finding work.

Was David Pocock too optimistic about the Macklin committee being a game changer? Perhaps not, if we look to the future. Its first report shifted the public debate to an extent that must have unsettled the government, though not enough to take proper action. Otherwise, perhaps there wouldn’t have been even the $40 increase, which was decided only near the very end of the budget process when the government learned it had more money coming in.

The Macklin report’s message cut through the pre-budget communications clutter, despite the government’s best efforts and its equivocal response. It generated an outpouring of support from an unusually broad political spectrum. Among the 350-plus signatories to ACOSS’s follow-up letter to Anthony Albanese were four federal Labor backbenchers — and others came out in public separately — Liberal MP Bridget Archer, the teals, other independents and the Greens, former Labor and Liberal ministers and backbenchers, prominent economists, and church and community leaders. The letter made several pointed references to not leaving people behind — a sentiment Anthony Albanese expressed in his election victory speech last year and has repeated since.

The Macklin report’s impact came not only from its official, if reluctant, government sanction. Step by step it builds the argument for the sheer inadequacy of JobSeeker. In the twenty years to 2020, the rate for a single adult rose by less than 3 per cent in real terms. The post-Covid increase in 2021 lifted this to 13.7 per cent, still far short of the 47 per cent increase in disposable income received by median households. In the same period, the gap between JobSeeker and the age pension grew in real terms from $35 a week to $160.

As a proportion of the national minimum wage, JobSeeker fell from 47 per cent in 2002 to 41 per cent in 2021, making it the third-lowest rate, after Britain and New Zealand, among the thirty-four developed countries of the OECD. Including housing costs, for which assistance is more generous in both those countries, puts Australia at the very bottom of the OECD rankings. “When an average earner becomes unemployed their income drops by more than [in] any other high-income country,” says the report.

And then there is the moral argument. JobSeeker recipients told the committee about looking around the house for things to sell, choosing between medicines and paying electricity bills, and doing without meat and fresh fruit and vegetables. This is the face of poverty in Australia — one of the richest countries in the world, but one where inequalities in income and wealth have been growing.

Under the agreement with Pocock, the Macklin committee will report annually before the budget. The pressure to turn into reality the prime minister’s words about leaving no one behind and holding no one back will continue.

Has the government made a rod for its own back by agreeing to the committee, as the Australian Financial Review’s Phillip Coorey has argued, given how many worthy, competing and unavoidable demands are made on the budget?

To the contrary, if it helps dispel ignorance and misunderstanding about Australia’s unemployed and pushes the government to do more to help them, it may be to Labor’s political advantage. Voters may be less inclined to defect to the Greens and independents if the government implements more real Labor policies for which the arguments are so compelling. •

The post Jenny Macklin’s mythbusters appeared first on Inside Story.

This time last year that particular cookware-coating descriptor would have been the last to come to mind in describing the Labor leader. Halfway through the election campaign, “charisma bypass” might have been more appropriate for an uninspiring, somewhat blundering opposition leader whose demeanour contrasted with the incumbent’s energetic confidence. Whatever you thought of Scott Morrison, everyone agreed, he remained a formidable campaigner, while Albo, even within the famed “small target” paradigm, erred on the side of saying as little as possible. And his campaign, to put it mildly, was not blemish-free.

The published opinion polls from March 2022 to the election did put Labor comfortably ahead after preferences but found nothing to celebrate in Albanese’s approval ratings. Were they better than Bill Shorten’s had been three years earlier? Arguably, but you had to look closely to see it. They might have been similar to Tony Abbott’s during the last change-of-government campaign in 2013, but even the much-deflated Morrison usually bested him as preferred/better prime minister.

But when the election result became clear at approximately 8pm AEST on 21 May 2022, Albanese went from zero to hero. If observers had previously struggled to imagine him as prime minister, their perspective changed the moment he became one, or at least one-elect. Suddenly it all made sense.

Had he been a good opposition leader? He won, didn’t he, so he must have been.

Now we are used to Albanese as calm and capable PM. From the highest office in the land he pulls the levers of state with ease and aplomb, authority oozing from his pores, journalists hanging off his words. One day he is hobnobbing with the international great and good, the next munching a white-bread sausage sanger at the footy with the hoi polloi. Is there nothing this everyman can’t do?

And because, despite all the accoutrements of high office, he still decidedly lacks personal magnetism, some close politics watchers judge that — you guessed it — his very ordinariness, his unthreatening lack of eloquence, these are the secrets to his success. So he is more a John Howard than a Kevin Rudd.

On the other side, Scott Morrison quickly became an embarrassing, somewhat demented punchline. And the less said about the federal opposition, led by the faintly ridiculous figure of leader Peter Dutton, stripped of his powerful portfolios, the better. Did this clown show really run the country for eight and a half years?

Elections are routinely followed by shifts in public perceptions of leaders and parties, and the most dramatic come after a change of government and/or a result that has turned out to be different from what was widely anticipated. (Some Newspoll examples are here.) In Albanese’s case, this graph from Essential nicely illustrates his huge leap in stature.

The shape of the graph shows the total reinvention, in the public mind, of the persona of one Anthony Norman Albanese.

The moral of this long-winded introduction? If you want to measure public perceptions of Albanese as an opposition leader you should survey them when he is doing that job. Ideally, you do that as close as possible to when people vote, but certainly before 6pm Saturday eastern time, when votes start to be tallied and the how-and-why tales start to unfold.

And that’s exactly what the regular public polls — Newspoll, Essential, Resolve, Ipsos et al. — did during the campaign.

There is, however, one election survey, much used in academia and often cited in the media, that attempts to measure voters’ attitudes to leaders — along with a host of other factors that influence votes — but collects its data after the election. And not just a few days after, but weeks and in many cases months afterwards. That’s the Australian Election Study, or AES.

Run out of the Australian National University, the AES began at the 1987 election, in some ways as a successor to the Australian National Political Attitudes Surveys. Its counterparts overseas include British and American surveys.

These days the AES is mostly done online. It contains a large number of political questions and a veritable census of demographic ones, most of which are usefully repeated at each election, allowing for comparisons over time. Its sample sizes (2508 in 2023) are a bit on the low side for analysis of some of the cohorts, but its strength is in its breadth of content and repetition across the decades.

Late last year, as after every election, the AES team released a report, some datasets and various accessories. Its trends paper, in particular, has fascinating graphs showing (in some cases) dramatic changes in attitudes on immigration, abortion, the republic, attitudes towards democracy and other topics.

But its huge weakness, all but fatal, lies in the fact that, as its website puts it, the AES is conducted “post-election.” Respondents completed the 2022 survey, for example, between 24 May and 30 September, an average of thirty-two days after the election.

Among the findings given in the forty-page 2022 report is one that received substantial media coverage: “Anthony Albanese was evaluated more favourably than any political party leader since Kevin Rudd in 2007, scoring 5.3 on a zero to ten popularity scale.” This is the relevant graph:

But we know that’s not really how Australians saw the opposition leader at the time of the election, and nor is it what the publicly released polling said. The most popular leader on either side since 2007? You only have to go back to the surveys from the 2019 campaign to find a party leader more popular than Albanese: Scott Morrison. Malcolm Turnbull in 2016 was also rated more highly, even scoring a few net positive results (approval greater than disapproval) during the campaign (something Albanese never did). Julia Gillard in 2010 provides another counter-example.

And the AES’s report itself, in a summary of the Morrison government’s final term, describes the Labor leader entering the campaign in a “not exceptionally popular or inspiring” way.

Beneath the report’s headline, “popular” turns out to mean how much the leader is liked, as in “using a scale from zero to ten, please show how much you like or dislike the party leaders.” That’s a slightly different question from satisfaction and approval; so might that be true of Albanese? Contemporaneous data on this specific question are much scarcer, but what I could find also jarringly contradict the AES.

A Newspoll of “leaders’ character traits” published in March 2022, around ten weeks before the election, had 51 per cent finding Albanese “likeable.” According to Newspoll’s chart, which went back to 2015, that was a much lower proportion than the 68 per cent who said the same about Malcolm Turnbull six weeks before the 2016 poll. Even Bill Shorten managed a higher score in May 2016 of 57 per cent.

Yet in the AES graph above, Turnbull (2016) languishes five spots below Albanese (2022). Could Turnbull have become so much less liked between late May and 2 July? Could Albanese have dramatically grown in likeability during his campaign? Anything is theoretically possible, but the best evidence — satisfaction/approval ratings taken during the campaigns — didn’t show a dramatic rise or fall for either man.

The much more likely reason for Turnbull’s low spot on the AES’s graph is, again, the fact that the survey was conducted after — an average of thirty-eight days after — the last person voted. The 2016 election result, which was significantly worse for Turnbull’s government than was widely expected, provoked a rather bitter election-night speech about Labor’s “Mediscare” campaign. It also set the Liberal leadership hares running, generated universal adverse press coverage and had some in the wider Liberal movement (think Sky After Dark) calling for his head. From then until his demise a little over two years later Turnbull was under pressure — and behaved like it.

This was the prime minister respondents were scoring — just as Albanese’s relatively high “like” score can’t be disentangled from his election success and subsequent popularity in office.

The AES’s retrospectivity affects not just leaders’ ratings but also many other questions probing respondents’ attitudes to issues that might help explain the election outcome. It even includes a question about when respondents made up their minds whom to vote for.

I believe the timing pollutes the responses, rendering much of the AES’s data all but unusable. It’s such a shame given the expertise and expense and skill of the people involved, and the hours they put in. But as far as I’ve ever been able to tell, no one associated with the study believes the timing matters. And nor, presumably, do most of the dozens of academics who analyse the data and present these findings at conferences and in refereed papers in journals.

The sheer length of the questionnaire presents challenges. It skews the sample to people who are willing to go through the arduous process — namely, those who are particularly interested in politics. Attitudes to elite institutions (like the university whose name appears on the survey) might influence people’s decision to participate: only 2.1 per cent of 2022’s respondents said they voted for One Nation or the United Australia Party, for example, which is less than a quarter of the actual 9.1 per cent at the election.

This is probably unavoidable for a long-form survey like this, and in theory weighting (which they do, using actual election results as one of the ingredients, and provide in a separate field) should ameliorate much of it. But the regular pollsters, with a less demanding workload for respondents, probably obtain more representative raw data.

Then there are two long-term, corporate habits of presentation in the various AES reports that are at least in theory fixable.

One is the definitiveness with which the findings are presented. The very first in last year’s report provides a perfect illustration. It reads: “A majority of voters (53 per cent) cast their ballots based on policy issues, down from 66 per cent in 2019” and “just 11 per cent did so based on the party leaders.”

Now, call me difficult, call me pedantic, but deriving such firmly stated conclusions about voters’ intentions from their multiple-choice responses to the question “In deciding how you would vote in the election, which was most important to you?” (available answers: “The party leaders,” “The policy issues,” “The candidates in your electorate” or “The parties taken as a whole”) is absurd, even leaving aside the timing issue.

Many people like to think they’re rationally deciding their vote on policy matters but are actually driven by emotion, tribal loyalty, resentment or just the vibe. We can probably all agree that a healthy economy is, all things being equal, more conducive to re-election than an unhealthy one. On the other hand, longevity can prove an insurmountable obstacle for any incumbent. Neither of these dynamics can be captured in that question. We’ve all met people who always vote for a particular party but justify it by referencing something else. The campaigners, if they’re doing their jobs right, are influencing voters in fleeting, subliminal ways.

And what about those who just reckoned that after nearly nine years of this government it wouldn’t hurt to give the other side a go? Humans are deeply fallible when it comes to understanding, let alone elucidating, their own motivations. There’s a reason why many pollsters have psychology degrees.

So, the AES reckons that in 2022 most people’s votes were largely driven by the parties’ and candidates’ policies. The believability of that might depend on what we mean by “policies.” Does it, for example, include perceptions of the fruits of past policies, such as those of Labor’s last stint in office, 2007–13?

Now, asking the question itself is not without value. The relevant 1996–2022 graph in the trends paper is worth a look — the “policy” line is ridiculously high, but the interest is in the fluctuations. (The two peaks are at the 1998 “GST election” and 2019.)

Changing the wording to “a majority of voters… claimed…” and moving the finding down the list to deprioritise its significance would have been much less misleading. And in the second finding, in fact — “The most important issues in the election identified by voters included…” — the words I’ve italicised make the statement much more defensible.

My complaint here isn’t about a few missing words in one finding. This mode of presentation is a key feature of the AES across its thirty-five years, and comes from an ingrained inability to acknowledge human complexity, both individual and collective. It flows through all the AES reports and associated papers. (Political scientist Murray Goot covered a lot of this in a strongly worded review of a book based on AES findings a decade ago.)

It even turns out, according to the AES, that you can use its data to calculate the value of various drivers of the election outcome. An example from 2019 is that “[b]ased on… voter responses, it is estimated that the net effect of leadership [Morrison versus Shorten] on the vote was 4 per cent against Labor.” This is calculated by taking the proportion who nominated “The party leaders” as the key factor in the question mentioned above, splitting them up by whom they said they voted for, and applying them to the actual election results.

The arithmetic was not repeated in 2022, and giving it a go myself I could see why: it gives Labor an advantage that rounds to zero, which is surprising if you’re dealing with a face-off between the most and least popular leaders since 2007. The closest we get is “With Anthony Albanese as party leader, Labor attracted more votes based on leadership than in the 2016 and 2019 elections.”

I don’t believe it is possible to quantify leaders’ influence on votes. (Should we try, for example, to account for the fact that any other leader might not have made Shorten’s decision to take a big policy suite to the 2019 election?) But if there is a way, this ain’t it. And across the decades calculations of this nature abound.

The other bad habit of the AES is a tendency to write for media headlines.

Political journalists and commentators have an awful tendency to cast (a) the latest election result and (b) the latest opinion poll as representing the new normal, as how voters henceforth will behave. You can observe it today, fuelled by the Aston by-election; these voting snapshots are assumed to showcase patterns as they will always be, and the prognosis for whichever side lost the last (by-)election (and is trailing in the polls) is dire.

Last year’s general election, the first Labor has won in more than a decade (and since 2007 if we’re talking about majority wins), suddenly became evidence of the Coalition’s inability to ever again form government — and here, says the AES, are the reasons. That’s despite the fact that these supposedly fatal electoral drivers didn’t prevent the Coalition from winning the previous three contests.

This Sydney Morning Herald article, headlined “Young Coalition Voters an Endangered Species,” could’ve been published today but is in fact dated September 2009, when the Rudd government was still riding high. AES data back then showed that the Coalition faced intractable demographic hurdles, namely a lack of support among young voters. This was a popular theme at the time, but we know what happened soon after, beginning with 2010’s tied election. Those seemingly insurmountable demographic changes were somehow surmounted, and then it was Labor that faced an existential challenge, due to (other) demographic developments.

In 2023 we’re back with the Coalition at death’s door — because of young people again, and this time specifically “millennials” (voters born between 1981 and 1996). In some cases the individuals singing from this song sheet were only two years ago administering last rites for Labor.

We expect data nerds and academics to be constrained and sober in their analysis, not to be permanently trapped in the present and not to succumb to the hot take. But sadly it ain’t always so.

The 2022 AES report makes quite a big deal of the Coalition’s deteriorating support among young people. “Between 2016 and 2022, millennials record a large decline in Coalition support, falling from 38 per cent to 25 per cent in just two election cycles,” it reports. “Changes of this magnitude and this pace are rare in Australian electoral history.”

I’ve reproduced its graphs below, and you can see that the starting point of 2016 for millennials (middle bottom) wasn’t chosen at random. It was a year the AES found to be exceptionally good for the Coalition among this age group, better than at any time since 2004.

Now, these rather gimmicky age cohorts are no doubt used for popular digestibility. In particular, millennials’ membership has not been constant over the graph; those born in 1996, for example, didn’t join the electoral roll until 2014. And the sub-samples are rather small — just 251 people aged twenty-five to forty-one participated in last year’s survey, implying about a 6 per cent error margin. But let us accept that these figures truly reflect the relevant component of the full electorate.

That 2016 election did exhibit some unusual swings, with the Labor opposition doing very well in low- to middle-income urban electorates, even snatching the hitherto bellwether seat of Lindsay, while the Liberals shored up their wealthy safe electorates. The persona of the ultra-rich, urbane and progressive prime minister Turnbull must have played a part, and perhaps millennials disproportionately warmed to him. That’s interesting, for sure. But to present these figures as a neutral point in the data is simply cherrypicking.

Further down, less sensationally, the report notes that “millennials entered the electorate in the early 2000s with about 35 per cent of this generation supporting the Coalition, a level which has now fallen to 25 per cent.” Is that a big drop? The “Coalition’s historic low levels of support among younger voters” in 2022 can’t be interpreted meaningfully on its own. There are two crucial pieces of context that should be taken into account.

The first is the Coalition’s rock-bottom primary vote in 2022. That 35.7 per cent was the smallest since the formation of the Liberal Party in 1944. Record low support in the aggregate should be expected to translate to low support across most cohorts; there should really only be a sub-headline when one group of people deviates significantly from that shift. Does the AES show a bigger drop among millennials than among the rest of the electorate since 2001?

It does a bit. The ten-point decline since 2001 sits within an overall drop of 7.2 per cent in the Coalition primary vote, from 42.9. A 2.5 to 3 per cent difference (we are subtracting a rounded number from an unrounded one, and giving “2.8 per cent” as the outcome does go against my grain) is still worthy of note. (A trend line over those dots produces something a bit smaller, around 2 per cent.) So, on this evidence, the last two decades have seen an outsized drop in Coalition support among young people. But what happens if the Liberals choose another Turnbull-like leader?

The second missing piece in the gloom and woe about the Coalition’s irretrievably dire situation is that in 2022 Labor’s national primary vote was also historically tiny; at 32.6 per cent it was even smaller than the Coalition’s (it was this fact which made the “net effect of leadership” calculation unpublishable) and was Labor’s nadir since at least the 1930s. Surely if we insist on using primary votes as indicators of electability, this can’t be ignored.

Under our federal compulsory (full) preferential voting system, preferences from other candidates produced a two-party-preferred Labor win of 52.1 to 47.9. The Coalition’s 47.9 was not by past measures spectacularly bad; not as low as in the last three elections (2007, 1983 and 1972) that turfed them out of office. But its current lower-house presence is proportionally smaller than at any time since (again) the Liberal Party came into being, and that’s because nine of the electorates in which it defeated Labor in two-party-preferred terms were won by an independent or minor party instead. That’s a function of its low primary vote. But Labor also missed out on seats in this way — seven, in fact — and that’s because of its low primary vote.

That the AES deals only with primary votes is increasingly problematic, although it’s not clear how to fix the issue. But Labor’s historically small primary vote must, by definition, also translate to splash-friendly depths in some cohorts. On the AES age numbers one could craft a terrifying tale about “boomers” and the “greatest generation,” and to an extent generation X drifting away from Labor. (The more popular one until last year had to do with lack of support among a shrinking working class.) Except, of course, Labor formed government, and so analysis like this doesn’t fit the narrative.

The big story about Australian electoral behaviour is, or should be, the continuing decline of primary votes for both major parties. It’s the two-party system that is under existential pressure, not just whoever happens to be in opposition today, and the record-sized crossbench is the most obvious symptom.

Labor is currently in office. One day it won’t be. One day also Peter Dutton won’t be Liberal leader, and the opinion polls might start to look more competitive. Commentators, finding themselves on the other side of the fishbowl, will simply internalise and recite the current vibe. Academics, I hope, won’t.

Analysing election results is serious stuff. When we write and say things, we should really mean them.  It’s better to remain silent than announce a conclusion from a piece of work that ticks all the statistics boxes but rests on hopelessly flawed assumptions.

The individuals involved in the AES are smart, well-credentialled and statistically literate. Most of the data they collect, which don’t purport to deal with the hows and whys of the election results, make for excellent observation and, in their comprehensiveness and multi-decade extent, are unique. The problems lie in some institutional practices

The AES isn’t alone in the academic world in producing statistics-based work in this glib genre. But it does run a big, important poll, widely used, whose post-election aspect is a big flaw. If its personnel found a way to have their surveys completed before election night the value of their data would increase immensely. Not claiming to quantify the unquantifiable with simplistic calculations, and avoiding playing to the media zeitgeist, would improve their reports. •

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At 3.5 per cent, the unemployment rate is close to the lowest it has been in the forty-five years since monthly numbers began. And that isn’t because of low immigration: on the contrary, the workforce is much bigger than before the epidemic. The number of people with jobs and total hours worked are also at record highs. (In the years between the global financial crisis and 2019, by contrast, unemployment didn’t get below 5 per cent.) By the second half of last year real income per head was also at a record level.

Inflation is certainly too high, and occupies most of our attention. Yet in recent quarters it has been decelerating. Underlying inflation was running at an annualised rate of about 4.8 per cent in the March quarter, still way beyond the Reserve Bank’s target range of 2–3 per cent. To get back towards the midpoint of that band we need to see that underlying rate decelerate from 1.2 per cent for the March quarter this year to around 0.7 per cent a quarter. That’s a big move, but smaller than the decline in quarterly underlying inflation over the six months to March.

The key point here is that underlying inflation has markedly decelerated despite firm output growth and despite unemployment remaining near a record low. Wages growth remains modest.

The Australian pattern is remarkably similar to America’s. There, trimmed-mean personal consumption inflation (which removes the most extreme price changes) peaked in January with a 6.1 per cent annualised rate, and by March was down to a 3.4 per cent annualised rate. Unemployment was down to 3.4 per cent in March — the lowest rate since 1953.

On last Friday’s Reserve Bank forecasts, annual underlying inflation won’t fall below 3 per cent for two years (and even then it will only be just under). But its forecast numbers are consistent with the quarterly underlying rate (measured by the trimmed mean) coming back within the target band by this time next year. On the quarterly numbers, underlying inflation will be consistent with the band long before the headline annual rate is back within it. Once the quarterly numbers are within the band, the inflation problem is over.

We have a good chance of getting inflation down without a serious recession and perhaps, as the RBA also forecast on Friday, with continuing gains in employment and the jobless rate still below where it was before Covid.

With inflation contained, the time will have come to recognise our long-term constraints, which are considerable.

First, inflation may well decelerate without a recession, but not without two years of slowing growth and rising unemployment. The low-inflation world to which we are returning was also a world of slow growth and somewhat higher unemployment. It will likely be a world of markedly lower interest rates, a point the IMF made in its recent World Economic Outlook.

As we were reminded in those four or five years before Covid, however, low interest rates don’t necessarily spur rapid output growth. With much higher government debt and with the Reserve Bank running down rather than building up its government bond holdings, we should also expect contractionary fiscal policy for all circumstances short of a serious downturn.

Another constraint is that it is quite a while since Australia (like most other rich countries) has seen much increase in output per hour worked, or productivity growth. That doesn’t give room for real wage increases, or for real income increases more generally. With population growth through immigration likely to exceed GDP growth, Australians will be no better off in real terms in two years than they are today.

Then there is the budget, and the discretionary spending options open to the Albanese government. With revenue flattered by big increases in nominal GDP, and spending pressures eased by high employment and the withdrawal of Covid spending, tomorrow’s budget outcome and forecasts for the coming financial year will be more favourable than predicted in the budget revision of October last year. Even so, the path ahead is difficult. Last October’s budget forecast higher deficits for 2023–24 through to 2025–26, even with modest average spending increases and revenues close to previous records as a share of GDP.

Perplexed by the immediate concerns about high inflation and rising interest rates, we have not focused on these underlying constraints. By the middle of next year, all going well, they will begin to become more evident. Going into a 2025 election, after two years of slower growth and rising unemployment, they will be more evident still.

For the Albanese government, the appealing story will have to be about the next term, not this one. That story will need to include the balance between fiscal and monetary policy over coming years, a topic elided in the recent review of the Reserve Bank. It will also need to include measures to stimulate productivity growth. Getting productivity up will be harder than getting inflation down — a good reason to elevate the search for ways and means to the centre of national attention. •

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Along with Honolulu, those were the only places the two visited outside Australia to seek views on the strategic picture. Not Tokyo, nor New Delhi, Singapore, Jakarta or Port Moresby.

In their wake, many observers are mystified by the relationship between the Defence Strategic Review and Australia’s acquisition of nuclear-powered submarines, a decision sprung on voters in September 2021 by Scott Morrison and endorsed with less than a day’s study by then opposition leader Anthony Albanese.

The parts of the Smith–Houston review curated and released by defence minister Richard Marles confirm that it didn’t question the Australia–United Kingdom–United States agreement, known as AUKUS. If Smith and Houston discussed what role the extraordinarily expensive submarines will actually perform, they did so in the still-classified parts of their review.

Press gallery defence reporters have already started the game of trying to winkle out of anonymous sources the scenarios that might have been canvassed by the review, including the defence of Taiwan and the lodging of Chinese forces in the Solomon Islands. Presumably Smith and Houston looked at the possibility that China would strike at Australia in the event of a Taiwan conflict in order to disable Pine Gap, North West Cape and other US war-fighting installations.

Sydney University historian James Curran, newly appointed international editor of the Australian Financial Review, raises a scenario that probably wasn’t mooted: the cutting of Australian shipments of iron ore and other commodities to China. “Such a devastating blow to Australia’s economy is never mentioned in these strategic reviews — economics and national security remain in uncooperating silos,” Curran writes.

As for the text that was released, many commentators have detected unsupported assertions and logical leaps. Most glaring perhaps was the reference to an “AUKUS Treaty” when the tripartite agreement was simply a joint statement by the three leaders at the US navy’s San Diego base in March.

Neither Morrison nor Albanese has presented the agreement to parliament for explanation and debate, let alone set in motion the ratification required of a treaty. Nor have the other two governments to their legislatures. Both Joe Biden and Rishi Sunak face elections next year and could be gone — in America’s case, possibly replaced by Donald Trump.

Those elections aren’t the only stumbling blocks. Washington’s agreement to sell between three and five Virginia-class submarines to the Australian navy from the early 2030s could be contingent on its own navy managing to step up production of these hunter-killer vessels, known as SSNs.

The Americans currently have about fifty SSNs, well below their force level goal of sixty-six. They hope to increase production of new Virginia-class boats to two a year, but the current rate works out at about 1.3 boats per year. At the AUKUS ceremony, it was disclosed that Australia would be investing perhaps $3 billion in helping the two US submarine yards speed up work, but the impact is likely to be quite marginal.

As it is, the US navy’s thirty-year shipbuilding plan shows the SSN force reaching the sixty-six-boat target in 2049 at the earliest. So the sale to the RAN will subtract from the American fleet — unless, of course, the vessels effectively operate as part of the US navy’s Indo-Pacific fleet. Marles has denied any such agreement or condition; veteran defence-intelligence analyst Brian Toohey scoffs at such assurances.

The three to five Virginia-class subs provided to Australia will already be about halfway through their thirty-year reactor life, and are seen as a holding capability until a jointly designed successor to Britain’s current Astute-class SSNs can be built. The first of those future submarines will be laid down in the early 2030s and delivered — from Barrow-in-Furness in England for the British navy, and from Adelaide for the Australian navy — in the 2040s.

But not from the American yards, despite the promised US contribution to the design. The US navy doesn’t want them, and is instead persisting in developing its own successor to the Virginia-class, known as the SSN(X). This raises an obvious question: having inducted an American boat into its fleet, why wouldn’t the Australian navy stick with the Americans for its successor?

It also brings us to perhaps the most perplexing thing about AUKUS: the involvement of the United Kingdom. Why did Morrison need to get his British counterpart Boris Johnson involved in approaching the Americans? Even if the Australian navy was inclined to Britain’s Astute-class, an American sign-off was required for the transfer of its reactor technology, a closely held US secret.

The proposed joint AUKUS submarine thus hangs on Britain, a declining power in great economic disarray. The Tories must be quietly chortling at having roped in the Australians to subsidise their naval plans. Adding to the puzzle is the post-politics job Morrison is said to be negotiating with a British defence group.

Australia’s close strategic alliance with the United States is generally accepted in our region. Japan and South Korea have similar alliances, Singapore and Thailand more tacit ones, and India and Vietnam a growing closeness. To revive close strategic ties with Britain undercuts decades of diplomacy designed to project Australia as an authentic regional partner. Surely the Australian navy has moved on from pink gins?

Meanwhile, the Smith–Houston review has rearranged our defence capacity around the nuclear submarines and their projected $368 billion cost. From a “balanced” force with a bit of everything, it is to become “focused” on projecting power further from Australia.

Ships and aircraft are to be equipped with longer-range missiles, their stockpiles built up by local production rather than imports. The army will also be more of a missile force, with the US artillery–missile hybrid known as the HIMARS extending its strike range to 500 kilometres and a greater amphibious capacity to move forward against threats.

To pay for this, the army loses a second battery of heavy guns, and its planned new fleet of South Korean– or German- designed, locally built armoured personnel carriers will be cut from 450 to 139, enough for a single brigade. At a mooted cost of $27 billion — averaging $60 million per vehicle — the project did seem absurdly inflated, but Smith and Houston mentioned no other means for protecting soldiers.

Nor do they discuss the fate of the army’s heavy tanks — its fifty-nine M1 Abrams and the updated replacements ordered by Morrison’s government. Perhaps a contribution to Ukraine, to be announced by Albanese when he is a guest at the NATO summit in July?

Accompanying the partial publication of the defence review has been some spin-doctoring designed to create the impression that the longstanding “Defence of Australia” doctrine, which has prevailed since senior defence official Paul Dibb’s 1987 white paper, was designed to deal only with low-level threats and is consequently obsolete. Actually, under the earlier doctrine Australia possessed quite an extended punch using air-refuelled F-18 strike aircraft and the six Collins-class conventional submarines.

Former army chief Peter Leahy is one who believes that Smith and Houston’s “all new” doctrine is really Defence of Australia Extended. “Its authors boldly state that it is not ‘just another defence review,’ but that is exactly what it is,” writes former defence official Hugh White, who wrote a defence white paper in the Dibb tradition in 2000.

Members of the hawkish commentariat, meanwhile, are apoplectic at the government’s failure to back with big money the review’s dire warnings of rising threats and a defence force “not fit for purpose.” They point out that many of the proposed new capabilities had been announced over the past three years. Some of them point to the government’s post-review backpedalling on capabilities already in the works. A committee headed by a retired US admiral will see whether the navy’s surface fleet needs all of the nine Hunter-class large frigates to be built in Adelaide, or a larger number of smaller corvettes.

“The Defence Strategic Review is worthless unless Defence stops deliberately dragging the chain,” declared the Australian’s foreign editor, Greg Sheridan. “Strategy without dollars is just noise.” For Peter Jennings, former director of the Australian Strategic Policy Institute, the review was “a collection of unfunded compromises and shocking policy gaps.”

The funding gaps are not just directly in the military domain of the “national defence” strategy propounded in the review. Referring to increasing calls on the defence forces to help out in natural disasters caused by climate change, Smith and Houston suggest a separate emergency agency. They point to Australia’s small reserves of fuel and dwindling refining capacity, declaring that the energy industry should be directed to come up with remedies.

A different criticism of the review comes from White. “The choice we face today is whether to build armed forces designed to help the US defend its strategic position in Asia against China’s challenge and preserve the old US-led order,” he writes, “or build forces that can keep us secure as American power in Asia fades and a new order dominated by China and India takes its place.”

We can’t do both, White adds, “because that pulls our force priorities in very different directions.” On the one hand, AUKUS was all about supporting the United States against China in Northeast Asia. On the other hand, the defence review — despite its emphasis on the US alliance — focuses on the defence of the Australian continent and its approaches.

At points, the review doesn’t seem sure which way to jump. As White observes, it argues that Australia’s forces must be able to deter “unilaterally” but then, in the same paragraph, it says this can only be achieved by working with the United States. “Australia’s nonchalance about this,” says White, “is typified by the reckless gamble of entrusting our future submarine capability to the impossibly protracted, complex and risky AUKUS nuclear program, when much faster and more cost-effective conventional options are available.”

The Lowy Institute’s Sam Roggeveen sees “tension and ambiguity” between the review and the AUKUS plans. “If the navy should be ‘optimised for operating in our immediate region,’ why do we need submarines optimised for operating thousands of kilometres north of it?” he writes. “Why is the RAAF Tindal air base being modernised so the United States can operate long-range bombers from there?”

A deeper contradiction looms for Peter Varghese, the former secretary of the Department of Foreign Affairs and Trade and director of ONA, Australia’s top intelligence assessment agency. Talking to James Curran for the AFR, Varghese agreed that Australia should stick with the United States as the most important player crafting a new balance of power in the Indo-Pacific region.

“Whether we can sustain this position without handcuffing ourselves to the maintenance of US strategic primacy is the big challenge for our strategic policy,” Varghese said. “A balance of power which favours our interests and adopting US strategic primacy as a vital Australian interest are not the same thing, and it would be a mistake to conflate them.” •

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The first of those inquiries, the royal commission into the former federal government’s “amateurish, rushed, disastrous and ethically indefensible” robodebt scheme, is undoubtedly the more consequential of the two. The scheme involved large sums of money, affected significant numbers of vulnerable people with sometimes fatal consequences and — despite politicians’ efforts to lay the blame on public service advisers — left an ineradicable taint of corruption on all of those involved.

The second inquiry, the Operation Daintree probe by the Victorian Independent Broad-based Anti-corruption Commission, or IBAC, concerned the Andrews government’s awarding of a $1.2 million training contract to an entity controlled by the Health Workers Union not long before the 2018 state election. Compared with robodebt, it appears small beer; indeed, premier Daniel Andrews has shrugged off the inquiry’s recent report as a merely “educational” account covering long-ago events and containing “no findings against anyone.”

Integrity experts think otherwise. Griffith University’s A.J. Brown described the premier’s response as a “serious mischaracterisation” of the report, while a former judge, Stephen Charles, KC, declared that the facts found by IBAC “amount on Transparency International’s definition to findings of clear corruption.”

In its present form, IBAC can’t make such findings. The corruption body is constrained by the necessity of identifying an indictable criminal offence or narrowly defined common law crimes such as bribery, perverting the course of justice, and misconduct in public office. It is precisely this higher bar that allowed Andrews to spin the narrative on this occasion, as he also did in relation to the “red shirts” scandal and other instances of “grey corruption.” His success in so doing is reflected in one of the nicknames he has acquired, Teflon Dan.

For IBAC, the evident breach of standards reflected the centralisation of power under the premier’s watch and a “significant erosion” of ministerial accountability, a conclusion equally relevant to the robodebt fiasco. The two scandals might be different in scale and seriousness, but I’d argue they were similar in kind — and were fuelled by similar changes within the parties, similar changes in what is expected of leaders, and a similar spread and intensification of partisan advisory structures now evident in every state and territory.

The class and community coalitions and party loyalties that once sustained the major political parties evaporated in the late twentieth century. The smaller, professionalised party organisations that emerged in their place relied instead on their leader to articulate a message, often mediated by polling, focus groups and marketing research, to “win the vote.”

Leaders have been given more resources — including partisan staff in their private office — with corresponding high expectations of their performance. If the party base, a now-small group of true believers whose views increasingly diverge from the mainstream, isn’t satisfied, then conflict is likely within the party room. If the message doesn’t “play” (by building broad polling support or arresting decline) and colleagues become convinced that the leader can’t capture popular support, they are likely to attack.

Leaders who have failed to sell the message and resolve these contradictory demands have repeatedly been torn down in recent times. What can we learn from Morrison’s and Andrews’s contrasting experiences?

Morrison took office in precisely the circumstances I’ve described. The incumbent leader, Malcolm Turnbull, was challenged when he failed to contain the battles within the party room after trying to introduce a National Energy Guarantee. Peter Dutton triggered the challenge, but Morrison came through the middle and seized the leadership. He was able to contain early division by winning the vote at the 2019 election, not by proposing policy innovation but by negating everything Labor proposed under Bill Shorten. It was a highly successful exercise in communication and marketing.

Having won that miracle election, Morrison set about gaining control of the public service and amplifying the centrality of his prime ministerial office. But once he neutered the public service and ensured ministerial minders could interfere wherever they chose, he struggled to find larger objectives, save for the AUKUS deal in which, arguably, he was not the lead player.

He sought instead to manage the perception of events, thus exercising power without purpose. Dutton later conceded that the party had not “stood for any substantive policy formulation” during Morrison’s prime ministership. Since Tony Abbott was removed, he argued, “we allowed ourselves to be defined by our opponents.”

But Morrison’s preoccupation with control led him to entertain the remarkable delusion that the media and the opposition held him responsible for “every single thing that was going on, every drop of rain, every strain of the virus, everything that occurred over that period of time.” During the pandemic he secretly took on the additional portfolios he thought necessary to meet those expectations.

In doing this, Morrison displayed an extraordinary misunderstanding of his role, and of the necessity of distributed leadership imposed by cabinet conventions and responsible government. His view of his role helped explain the mindset that led to the Coalition’s defeat in 2022, with the “Morrison brand” tagged as a decisive negative factor and former Liberal leader John Howard admitting that “the absence of a program for the future… the absence of some kind of manifesto, hurt us very badly.”

Daniel Andrews has also been a controlling leader, but of a different stripe. Unlike Morrison, he was a policy activist from the first, with big projects in mind and always ready to front the press to insist on how and why they needed to be done.

Political scientist Paul Strangio has astutely summarised the characteristics that have enabled Andrews to succeed: a kind of electoral genius; a series of giant infrastructure projects that have reshaped the state and its economy; progressive and in some instances trailblazing social policy; and an ability to withstand the torrents of conservative criticism. The last of those skills bewilders and incenses his opponents but leaves them unable to lay a glove on him. Strangio also acknowledges that Andrews’s grip on the government and tactics for evading scrutiny and accountability have created a democratic deficit.

Where Morrison was the wannabe strong leader, hungry for power but with no strong sense of what to do with it, Andrews is the real thing. He believes his role is to make the tough decisions and he is ruthless in pursuing his objectives. Anyone who fails to fall into line is brutally excised from his executive and politically marginalised, with the late Jane Garrett, once seen as a possible future leader, the standout but far from only example.

If this is how Andrews deals with able colleagues, how likely are public servants to resist his or his staff’s impositions? The capacity of the Victorian premier’s office to intrude on conventional practice has been amplified by its growth under Andrews to something approaching four times the size he inherited when he took office.

Which brings us back to what Andrews has dismissed as relatively inconsequential: the recent IBAC report. Its findings of undue centralisation of power, improper process, inappropriate influence over and intimidation of public servants by the premier’s staff, and a significant erosion of ministerial responsibility drew on the testimony of former ministers Jill Hennessy and Jenny Mikakos, with the latter describing how Andrews’s office had “its tentacles everywhere.” Ministerial responsibility is meaningless, Hennessy observed, when “ministers are directed by the premier’s office about how to manage their departments.”

As political scientist Patrick Weller found in Don’t Tell the Prime Minister, his pioneering study of just such an episode during Howard’s time, staffers knew what the boss wanted and did whatever it took to make it happen — while carefully avoiding letting him know the inconvenient details. Thus, confronted with assertions about intimidation by premier’s office staff, Andrews can safely say that he was unaware of any pressure applied.

These are two different cases, but each of them involved a concentration of power and each was criticised during formal reviews in similar ways. Collective cabinet decision-making and ministerial responsibility had been overridden or subverted, due process and transparency had suffered, and accountability was unattainable.

It might be said that Morrison’s failure shows that the public notices when a democratic deficit emerges, and reacts accordingly. But what of Andrews’s longevity? Does his endurance show that the public is willing to forgive a lot if a leader does what is promised, notwithstanding dodgy deals on the margins? And could bigger problems flow from small democratic deficits?

The Liberal Party’s Victorian branch is heavily factionalised, torn between moderates, keen to adopt positions more attuned to demographic change and public opinion, and conservatives demanding a harder right-wing line. It has repeatedly been unable to persuade most Victorians that it is fit to govern. With no effective opposition, no one — aside from the hapless journalists Andrews has faced down for twelve years — is asking the hard questions.

The bigger danger for Victoria, as Paul Strangio has also intimated, is that Andrews, in bending the state to his will, might unwittingly be paving the way for what would effectively be a one-party state. The Westminster system assumes parties of government will be held to account by parties in opposition — and its breakdown would serve none of us well. •

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It might sound like the minister wants to go back to the future, and revert to a twentieth-century model in which permanent settlement was the norm and temporary migration the exception. But O’Neil has no intention of returning to the past — and that would be impossible anyway for an Australia that depends on visa holders to pick our fruit, process our meat, deliver our takeaway, care for our sick and fund our universities.

What the minister wants to do is to build a simpler, more efficient and fairer migration system that simultaneously boosts productivity, fills pressing skills gaps in the labour market and delivers greater benefits to business. She envisages a streamlined visa system with pathways to permanent residence, and eventually citizenship, for temporary migrants who want to stay and whose skills are in high demand.

In the process, she hopes to end workplace abuse and release long-term visa holders from the limbo state of being “permanently temporary.” Australia, she says, needs “a skilled worker program, not a guest worker program.”

The aims are laudable, but balancing the competing interests won’t be easy.

To take one example, O’Neil promises simpler, faster pathways to permanent residence for international students who, after graduation, possess the qualifications and capabilities Australia needs. Yet she also wants to improve the integrity of international education by “tightening the requirements for international students studying in Australia” to ensure that students are here to study rather than work.

Stricter visa rules for international students would hit the bottom line of universities and vocational colleges, who have come to rely on those students’ fees to fund their operations. They would also reduce the supply of international students to stack supermarket shelves, serve in restaurants, staff late-night convenience stores and much else besides. These are low-paid jobs, and in an already tight labour market they won’t be easy to fill with local workers.

The government’s approach is predicated on an understanding that Australia is in an increasingly intense global competition for talent. We are facing off against other migration countries — Canada is often mentioned — in a race to attract the best and brightest to our shores.

Rather than the postwar impulse to “populate or perish,” the twenty-first-century challenge is to “skill up or sink.” A simplified visa system, clear routes to permanent residency, and a crackdown on workplace exploitation are presented as the keys to success.

The government has already taken three decisive and welcome steps. The first two tackle the limbo experienced by two groups of temporary visa holders. The third seeks to “skill up” temporary migration.

Step one, in February, was to begin the process of enabling refugees on temporary protection visas to become permanent residents, fulfilling an election promise and easing the distress for people who arrived in Australia by boat and have been living with uncertainty for a decade.

Then, just before Anzac Day, step two brought a straightforward pathway to citizenship for New Zealanders who live in Australia long-term. New Zealanders have long had the right to stay in Australia permanently. But the Howard government amended the definition of “Australian resident” in social security laws to block their access to most government services and payments.

New Zealanders who arrived after that 2001 change might “settle” and build lives here but they would remain on a special category visa and never become legally “resident.” While they could work and get Medicare, they were denied most other forms of public assistance. In hard times, for instance, they weren’t entitled to unemployment benefits or other income support.

Howard’s change also had flow-on effects in some states and territories. In some places, New Zealanders might be denied emergency housing or find that their children were not eligibility for disability services. When the National Disability Insurance Scheme was introduced, New Zealanders were required to pay the levy but weren’t eligible for support.

And the only way New Zealanders could become permanent residents was by applying for another visa, usually a skilled visa. That was impossible for many, and expensive for all, with the result that hundreds of thousands of New Zealanders were permanently marginal.

Long-term campaigners for a better deal for New Zealanders were surprised and elated by the Labor government’s new pathway to citizenship, which exceeded their expectations. It not only resolves a longstanding irritant in trans-Tasman relations by treating New Zealanders much more fairly but also enhances Australia’s democracy. Hundreds of thousands of long-term residents who were previously unrepresented in our political system can now join the electoral role, cast a vote and lobby their MPs as citizens.

Then came the third step, announced by Clare O’Neil in her address to the National Press Club: a sharp increase in the Temporary Skilled Migration Income Threshold, or TSMIT. This is the minimum income that an employer must pay if it wants to bring a migrant worker to Australia on a temporary skilled visa.

The Abbott government froze the TSMIT at $53,900 in July 2013. In the decade since then, it has not risen in line with inflation or wages and has fallen far below what most full-time workers earn. From 1 July this year, it will jump to $70,000.

The new threshold follows a recommendation by the Grattan Institute, which argued that the frozen TSMIT “allowed employers to sponsor a growing number of low-wage workers with fewer skills” and left them vulnerable to exploitation and abuse. Grattan says these low-paid workers also lacked the bargaining power to secure wage rises. In O’Neil’s words, it allowed a skilled worker program to become a guest worker program.

For many migrants and their employers, this change will make no difference. According to the most recent data, the average nominated base salary for temporary skilled workers is already above $100,000, and it’s even higher in sectors like finance, IT, healthcare, mining and construction. More likely to be affected are sectors like hospitality, retail and agriculture, where the average nominated salary for temporary migrant workers is much lower.

More than 1000 cooks are in Australia on temporary skilled visas, for example, and they are regularly included in the top fifteen professions nominated by employers. Yet Seek reports that the average wage for a cook is between $55,000 and $65,000. How commercial kitchens will fill these jobs after 1 July remains to be seen, but a sudden rush of Australians into this hard, low-paid work seems unlikely.

Lifting the Temporary Skilled Migration Income Threshold is the government’s first response to the review of the migration program by the former secretary of the prime minister’s department, Martin Parkinson, and migration experts Joanna Howe and John Azarias.

The government has also released the outline of a migration strategy indicating the direction it will take in responding more fully to the review.

Key initiatives include:

• A simplification of the welter of highly specific visa subclasses that create a “bureaucratic nightmare” for migrants, employers and government, and force a heavy reliance on the professional services of migration agents for even straightforward applications.

• A redesign of the points test, which tabulates factors such as age, English-language proficiency and qualifications to determine whether a skilled migrant is granted a permanent visa.

• A formal role in the migration system for the government’s arm’s-length advisory agency Jobs and Skills Australiato determine the extent and location of skills shortages. Drawing on advice from government, business and unions, this process will replace the cumbersome, complex and inflexible “skilled occupation lists” currently used to decide which occupations are eligible for visas. O’Neil says the aim is for Jobs and Skills Australia to integrate the migration system and the education and training system when it comes to meeting labour market needs.

• Better coordination between the Commonwealth and the states and territories on the impacts of migration and population growth (for example, demand for housing).

Labor’s renewed focus on Australia’s migration system is long overdue. With its obsessive focus on boats and border security, the previous government downgraded the role of migration in nation-building and social inclusion. And by profiling minority groups — remember the “African gangs” that made Victorians feel unsafe to go out at night — it undermined the ethos of Australia as a cohesive, multicultural society.

The Coalition allowed processing times to blow out, stranding hundreds of thousands of people on bridging visas for months and then years (a backlog the new government has been working hard to address). Despite consistent and mounting evidence of labour exploitation, the Coalition did next to nothing to address the workplace abuse of temporary visa holders. And when Covid-19 hit, prime minister Scott Morrison simply told them to go home.

Yet O’Neil’s claim that Australia’s skilled worker program “morphed into a guest worker program” while Peter Dutton was in charge of immigration is partisan hyperbole. The permanent shift towards temporary migration began long before Dutton’s reign and runs much deeper.

It was the Hawke government that began internationalising the education sector by allowing Australian universities to accept full-fee international students. By 1996, the immigration department was already granting more than 100,000 student visas each year and education was on the way to becoming a major export industry.

The first temporary skilled worker visa (the 457 visa) was an initiative of the Keating government, although it only came to fruition under John Howard. In 2005, when the agricultural sector was losing workers to the booming mining sector, Amanda Vanstone enticed backpackers to pick fruit by transforming the working holiday scheme from a predominantly “cultural” visa into a labour market program.

It was the Rudd government that trialled and then implemented the seasonal workers program for Pacific Islanders in 2009, and it was the Gillard government that established it as an ongoing program three years later. It was Gillard, too, who introduced the 485 post-study work visa that enabled international students to stay and work in Australia after graduation, though not necessarily in the field for which they had studied. Around 167,000 of these visa holders are in Australia at the moment, almost all of whom will end up spending at least five years here without necessarily qualifying for a visa as a skilled migrant.

The shift in emphasis from permanent to temporary migration is not the result of bureaucratic bungling by the previous government. It is a long-term trend in response to global economic change and demographic forces.

The government has signalled a pushback, at least when it comes to skilled workers. The greater emphasis on pathways to permanent residency is the right thing to do and will make Australia a more attractive destination for young, highly qualified professionals who can help build the nation’s economy and contribute in other ways to society.

Yet big questions remain, particularly about how the government will manage the demand for lower-skilled workers.

Take the example of health and aged care. “Our ageing population will demand more workers in health and aged care than our domestic population can supply,” O’Neil said yesterday. That’s true, though many of those jobs won’t be classified as skilled and attract salaries over $70,000.

O’Neil added that we need “to create proper, capped, safe, tripartite pathways for workers in key sectors, such as care.” But what this means is unclear. Will low-paid caring roles be reclassified as skilled and have a route to permanent residency?

If so, this would run counter to government programs like the Pacific Australia Labour Mobility scheme, which specifically targets the aged care sector as a potential employer. The PALM scheme recruits workers from Pacific Island nations and Timor-Leste to fill “unskilled, low-skilled and semi-skilled positions” but limits a migrant’s stay in Australia to a maximum of four years, with no prospect of settlement. It is a guest worker scheme by another name.

The same issues arise when it comes to filling lower-paid jobs in childcare, disability care, horticulture, meat processing, tourism and many other sectors.

If the government is determined not to have a class of guest workers, then the big question arising out of its reform of the migration system is how Australia fills those low-skilled gaps in the labour market. And how how does it do that without resorting to a system of temporary visas that offer no prospect of a transition to permanent residency and a shadow workforce of international students and other temporary visa holders “who bounce from visa to visa” and end up being permanently temporary.

Clare O’Neil says she wants a conversation about migration that is “direct and honest.” There are more difficult discussions to come. •

The post Skill up or sink appeared first on Inside Story.

Howard’s promise was a dog whistle to Australians that he would end the continual economic change of the Hawke–Keating years and the turmoil caused by the 1990–91 recession and other policy errors. Under pressure from big business, he broke his promise and introduced the GST, but in the generation since then, the only substantial reform we’ve seen has been the short-lived carbon tax.

Almost a year into its term, the Albanese government has fine-tuned many small things but embarked on no really big changes, and none are foreshadowed. It’s unleashed no surprises other than committing future governments to spend up to $14,000 for every Australian on nuclear-powered submarines. Nothing the PM and his team have learned in office seems to have changed their priorities or their sense of what Australia needs.

At each policy announcement, Albanese reminds us that Labor put this policy to voters at the election. Fulfilling campaign promises has become his mantra, his commitment: it proves that his word can be trusted. He is governing as he campaigned: as a small target, promising changes only if they are popular. And politically, as the opinion polls show, it’s working.

After almost a year of Labor in power, perhaps the main surprise is that so little has changed. It feels a bit like Orwell’s Animal Farm. Refugees remain locked up in Nauru, but now it’s a Labor government that is paying a US security firm hundreds of millions of dollars to provide “garrison and welfare” services. Whistleblowers David McBride (Afghanistan) and Richard Boyle (tax office intimidation) are still being prosecuted for exposing unwelcome truths, but now by a Labor attorney-general, Mark Dreyfus.

The real wages of Australian workers are falling even faster than before, yet the Labor government plans to deliver tax cuts to the rich. Australians on lower incomes remain priced out of home ownership, endless economic debates bring no action, and sky-high energy prices haven’t lifted the budget out of a structural deficit the International Monetary Fund now estimates at 3.25 per cent of our GDP — more than $80 billion a year.

This is one of the few Western countries with no economy-wide carbon price and no vehicle-emission standards, and no plans for the former and endless reviews for the latter. Sure, the Voice to Parliament could prove an important step forward, maybe, if it works well and governments listen to it. But the pace of reform generally under Albo’s rule has been a gentle trot.

Welcome to Australia 2023, where life is relaxed and comfortable.

Have Anthony Albanese and his ministers found no urgent issues in their first year that can’t be solved by Labor’s 2022 campaign promises? Given the problems we face, is it enough for them to stick to their pre-election script and aim to keep out of trouble?

Or is the reality, rather, that Labor’s campaign policies, designed to be popular, do too little to fix some of the biggest problems confronting us? It will be challenging for just 215 selected companies to deliver Labor’s target of reducing emissions to 43 per cent below 2005 levels by 2030 — assuming integrity reforms ensure those reductions are genuine. Australia’s per capita emissions will probably remain the highest in the Western world.

Labor’s policies are clearly inadequate to fix the problems of the economy, or of the budget: more on that in a moment. Across the board, its problem is that as the traditional party of social justice it has raised expectations it has no plans to meet. By camping in the middle ground, it leaves its traditional radical base looking for an alternative. Increasingly, they are finding one.

As psephologist Ben Raue of The Tally Room has pointed out, Labor won the election with 52.1 per cent of the two-party-preferred vote — but only 32.6 per cent of voters gave the party their first preference. Three in every eight voters in the broader Labor camp preferred Labor to the Liberals but chose to vote first for other parties (mostly, the Greens) or independents.

It’s been a long-term trend, and it’s getting stronger here and around the world. Ten years ago, the Socialists ruled France: today they are a minor party. Germany’s Social Democrats are gradually being overtaken by the Greens.

When Labor came to power in 2007, the House of Reps had just two crossbenchers, Bob Katter and Tony Windsor. Today it has sixteen, with another eighteen in the Senate. Overwhelmingly, they are to the left of Labor. Sure, they won’t support the Coalition. But if Labor keeps losing voters and seats to the left, will this be its last majority government?

Contrast the responses treasurer Jim Chalmers gave to two key reports he released last week. The first, by the government’s expert Economic Inclusion Advisory Committee, reported that Jobseeker and related benefits for people of working age are “seriously inadequate,” leaving many recipients in such financial stress that some “[have] to choose between paying for their medicine or electricity bills.”

Chalmers released the report at 5.10pm on Tuesday evening, too late for it to get appropriate media coverage, and issued a statement making it clear that Labor would not implement its proposals. “We can’t fund every good idea,” he said, emphasising that support for those most in need had to be “responsible and affordable… and weighed up against other priorities and fiscal challenges.”

Two days later, Chalmers released another report, this time on the Reserve Bank, by three monetary policy experts, essentially into how interest rates should be set. He announced that all fifty-one recommendations would be accepted, including its core proposal that interest rates be set by a committee of experts, as in the United States, to embrace a wider spread of informed opinion.

The contrast was striking. Labor today feels at home with highbrow issues of economic policy, and is willing to act swiftly and decisively on them. But it doesn’t want to know about the problems of those most in need, and does not intend to do anything about them.

Yes, the budget is in a desperate situation, and this is no time for unfunded new spending (such as $380 billion to buy a dozen or so submarines). That’s why many of us have been arguing that Australia needs to get the budget back in the black by closing the tax loopholes that mean we raise far less revenue than most other Western countries.

A recent report by Grattan Institute economists Danielle Wood, Kate Griffiths and Iris Chan conceded that there are no easy options but proposed getting there mostly by closing loopholes — and making normal budget rules apply to politically driven spending on infrastructure and defence. We don’t need to raise taxes: we can get there by scrapping tax concessions.

For example:

• Reduce tax breaks for superannuation, especially for retirees and high-income earners.

• Redesign the stage 3 tax cuts to eliminate the overcompensation of high-income earners.

• Scrap the Coalition’s decision to tax small business profits at a lower rate than those of bigger firms.

True, Grattan also recommends some tax rises on mainstream Australia, notably lifting the GST to 15 per cent, widening its base, and compensating only the bottom 40 per cent of income earners for their losses. But closing loopholes is easier politically than raising the GST or tightening the assets test for pensions.

A Resolve Strategic poll last weekend in Nine’s Sunday papers found that only 17 per cent of Australians say they want to close the deficit by raising taxes, whereas 40 per cent say they want to close it by cutting spending (and another 26 per cent want to just keep running up debt). But the poll failed to ask what spending the cutters wanted to cut, whereas it asked everyone what they thought of specific tax increases. And, hey, most of them attracted more support than opposition.

For example:

• Increase taxes on the profits of resources companies: 58 per cent support, 12 per cent oppose, 30 per cent undecided.

• Reduce tax concessions for negative gearing: 44 per cent support, 21 per cent oppose, 35 per cent undecided.

• Cancel or reduce stage 3 income tax cuts: 34 per cent support, 23 per cent oppose, 43 per cent undecided.

• Reduce tax concessions for superannuation: 37 per cent support, 28 per cent oppose, 35 per cent undecided.

• And, on raising the $50 a day rate paid to unemployed people reliant on Jobseeker benefits: 43 per cent support, 31 per cent oppose, 26 per cent undecided.

That contrasts sharply with voters’ usual knee-jerk opposition to any tax rises. The more Australians have been talking about it, the more people have come to see them as necessary. On negative gearing, for example, the number opposed to reform is now about the same as the number of people who own rental properties. Unfortunately, one of those is Anthony Albanese.

Chalmers has been given a looser rein to let us know that the budget is in bad shape, and has led the way in encouraging debate on tax increases. But Albo himself has seemed to stand above all that. He is not warning Australians of hard times ahead. He is not asking us to make any sacrifices. And above all, he is not drumming home a message that things must change. His message is: business as usual.

But times are tough. The IMF recently downgraded its forecasts of Australia’s economic growth to 1.6 per cent this year and 1.7 per cent in 2024. With our population swelling at a record 400,000 a year, that implies two years of zero or negative growth in per capita GDP. It hasn’t led to rising unemployment yet, but if the IMF forecast is correct, it will.

What wasn’t reported here was that the IMF’s medium-term projections see Australia’s growth per capita sliding towards the bottom of the pack: over the next five years, only Canada will rank lower among the dozen largest advanced economies. On the IMF’s projections, Australia would also lose its proud position as one of the world’s twenty largest economies. (That’s on the IMF’s preferred measure, which adjusts for differing cost levels to measure the real volume of production.)

With real wages set to fall by 8 to 10 per cent over this period, it seems a very strange time to be delivering tax cuts costing more than $25 billion a year and directed overwhelmingly to high-income earners — those who by definition are doing well and least need help.

We can all understand Labor’s desire to be seen as keeping its word. But this was a bad reform that ordinary households’ loss of buying power has made worse. I suggest a compromise that keeps some key elements of the package but redistributes the gains more fairly. Rather than abolishing the 37 per cent marginal tax rate, reduce it to 35 per cent with the same thresholds as now — but add a new 40 per cent rate for income from $180,000 to $200,000, and a timetable to raise that threshold to $250,000. Over time, that would save the budget a lot of money, without taking everything from those who would gain from the plan Labor promised them.

As the Grattan Institute report points out, the budget is in even more trouble than it seems to be, because it assumes continued underspending in areas where that is clearly unsustainable. In areas like aged care and regional hospitals, jobs can’t be filled because governments have failed to ensure enough funding to pay the going rates. Country and even suburban GPs are closing down because the long Medicare freeze on rebates has made general practice unviable as a career.

These are just some of the many areas where Labor has raised expectations of change that it can’t deliver with existing revenues. Australia already has full employment; mineral prices are already close to record highs. This budget can’t be fixed, and the underspending lifted to adequate levels, without revenue increases on a wide range of fronts. Labor is flagging a few nibbles at tax reform in the 9 May budget. That won’t do it.

In the end, these are moral issues: we should raise the rate of Jobseeker because it is wrong to make people relying on it (40 per cent of whom have mental health issues) live in such abject poverty. One told last week of taking the lightbulb with her from room to room because she couldn’t afford a second one. But the moral issues don’t seem to resonate with the cynical hardheads running Labor.

They ignore them on political grounds. The Coalition won’t do anything about them, so there’s no need for Labor to do anything either. Most voters, they say, don’t care how low the dole goes — at $50 a day, it’s now about a third of the median wage — and those who do are soft-hearted lefties who end up having to vote Labor anyway.

But wait. Yes, back in 2007, when Rudd was elected, voters on the left had no other choice. Labor had 43.8 per cent of the votes, while the combined vote of the Greens and independents of all shades was 10 per cent. The Greens won 20 per cent of the three-party vote in just one seat, when a young lawyer named Adam Bandt pipped the Liberals for second place in Melbourne. They couldn’t win seats: their role was to help Labor win seats.

Fifteen years later, that reality has gone. At the 2022 election Labor won just 32.6 per cent of votes for the House of Reps, while the Greens and independents won 17.5 per cent. Their vote has been swollen by former Labor supporters who have moved left because of issues like these. They don’t want unemployed people to be condemned to live in dire poverty. They don’t want refugees to be locked up on Pacific islands. They don’t want whistleblowers to be prosecuted, or Australia to keep dragging its feet on action to slow global warming. Labor is no longer their party.

Peter Dutton is risking giving Liberal voters more reason to abandon his party and vote independent. Albanese risks giving Labor voters more reason to abandon his party to vote for the Greens. Last year they took Griffith from Labor, overtook it to claim the marginal Liberal seats of Brisbane and Ryan, and came just 300 votes short of taking Macnamara (formerly Melbourne Ports), a seat Labor has held since 1906.

Honeymoons rarely last until the next election. If Labor alienates more of its base by inaction or half-hearted measures on issues that matter to them, it risks losing more seats. Macnamara would fall to the Greens in a swing of 0.3 per cent, while its neighbour Higgins (2.4) and Richmond (1.3) in laid-back northern New South Wales are very marginal. Another seven Labor seats had a margin of less than 10 per cent over the Greens — and while that’s big, the Greens won most of their seats with higher swings than that.

Remember 2010. The media focus was on Tony Abbott and Julia Gillard, but the vast bulk of the voters who deserted Labor went to the Greens. Their vote jumped from 7.8 to 11.8 per cent, and they picked up Melbourne — and four extra seats, and the balance of power, in the Senate. Labor has never regained the seats it lost.

Another swing like that would take a lot more seats with it. It could mean this is Labor’s last majority government. •

The post Albo’s choice appeared first on Inside Story.

A closer look reveals grounds for optimism in relation to coal, the most polluting of all carbon-based fuels. With the important exception of China, construction of coal-fired power stations has virtually ceased. Coal-fired power is already in decline in most developed countries, notably including the United States. The brief bounce in Europe following the closing of Russian gas pipelines has already ended.

According to the International Energy Agency, solar PV and wind are meeting nearly all of the growth in global electricity demand. Solar cell production is expected to increase, as is the installation of wind power following Europe’s removal of a variety of planning restrictions.

If new solar PV and wind supply more electricity at zero marginal cost than is needed to meet increased demand, they will inevitably displace coal and gas generation. Existing plants must either run at lower capacity or else be scrapped. Since China is pushing ahead fast on solar PV, it is likely that many of the coal plants being constructed at the moment will become stranded assets.

All this suggests that global carbon dioxide emissions from electricity generation will peak soon. But electricity accounts for only around a third of all carbon dioxide emissions. Transport’s energy transition is much less advanced, and that’s particularly the case with cars. The vast majority of cars on the road rely on internal combustion engines.

Demand for road travel and for motor vehicles certainly dropped sharply during the lockdown phase of the pandemic. As with most other things, though, demand bounced back as restrictions were lifted.

But this bounce obscured the fact that sales of internal-combustion vehicles had peaked even before the pandemic. A study by Bloomberg found that sales of petrol- and diesel-fuelled cars (including sales of traditional hybrids like the Toyota Prius) peaked at eighty-six million units in 2017, a year in which only one million battery-electric and plug-in hybrid vehicles were sold.

In 2022, by contrast, sales of internal-combustion vehicles fell to sixty-nine million but plug-in hybrids and battery electrics rose about ten million. With the cost of batteries falling steadily and more models coming on to the market, these trends are unlikely to reverse. Importantly, and unlike coal-fired power, China has been a leader in the transition to electric vehicles, which have already captured more than a quarter of the market there.

Declining sales of internal-combustion vehicles don’t translate immediately into a smaller number on the road. This will only happen when the number of new cars falls below the number being scrapped. Most of the cars being retired now were built ten to twenty years ago, when sales were still rising. It’s for this reason that Bloomberg estimates the number of internal-combustion vehicles on the road to remain roughly constant for the next few years before starting to decline in earnest from 2026 onwards.

Defenders of the internal-combustion engine point to a variety of obstacles to a rapid transition. The most notable are the higher initial cost of electric vehicles and the limited availability of charging stations. Neither of these objections stand up to scrutiny.

The lifetime cost of an electric vehicle, taking account of lower maintenance and running costs, is already below that of comparable internal-combustion vehicles. And, with battery prices falling, the initial cost differential is also declining.

As for charging, the technology is far less complex than the process of fuelling an internal-combustion vehicle. Electric vehicles don’t require the elaborate chain from oil wells to refineries to specially constructed service stations.

The simplest solution, for most users, will be to charge overnight at home or during the day at a parking lot or parking garage. Plug-in hybrids can be charged overnight with an ordinary trickle charger. A normal home EV charging station, sufficient to charge a fully electric vehicle overnight, will cost between $1000 and $3000.

Rapid charging at service stations is also technologically simple, even if somewhat more expensive. The availability of such stations will readily increase in line with the growth in the electric vehicle fleet.

Against this background, US president Joe Biden’s new target — electric vehicles making up 50 per cent of sales by 2030 — seems eminently feasible. A question for the longer term is how we can get post-2030 internal-combustion vehicles off the road in time to achieve net zero emissions by 2050. Given that a large proportion of vehicles run for twenty years or more, this won’t happen automatically.

One possibility is a version of the “cash for clunkers” scheme introduced in the United States and briefly proposed by the Gillard government in Australia. The US scheme involved subsidising people who traded in old gas-guzzlers and bought more fuel-efficient alternatives. The inadequately funded scheme — undermined by a complex and arbitrary set of rules about which cars could be traded in, which replacements were eligible and how the money was disbursed — was wound up fairly quickly.

A similar scheme to get internal-combustion vehicles off the road need not face the same difficulties. Once the sale of new petrol- and diesel-driven vehicles ended, complex trade-in requirements would be unnecessary; instead, a simple cash payment would be made for old vehicles. The scheme could be self-financing, with increased registration charges or petrol taxes also raising the cost of continuing to operate an internal-combustion vehicle.

As with the energy transition in general, the technological problems of a shift to electric vehicles have mostly been solved. The remaining questions are those of policy design and political will.

Unfortunately, that’s exactly what still seems to be lacking in Australia. The Labor government’s electric vehicle strategy, announced this week, included a series of small-scale initiatives but no target dates or specific goals. It committed the government to developing a fuel-efficiency target that would presumably increase demand for electric vehicles, but gave no specifics, despite already having a plan on its books prepared by the Climate Change Authority under the Turnbull government.

On this, as on many other aspects of climate policy, Australia remains an international laggard. Neither of our major political parties seems much interested in changing that.

Fortunately, the rest of the world is acting. Internal-combustion vehicles are being abandoned by most major carmakers. If government action doesn’t drive the shift to electrics, technological obsolescence will do the job sooner or later. •

The post Time to get out of the slow lane appeared first on Inside Story.

And yet, when you toggle to the “students with similar backgrounds” rating, things change dramatically. The aquas and greens start being replaced by a series of pink and red cells. Compared with schools that enrol a similarly privileged clientele, Girton’s scores are often below, or even well below, average. As far as NAPLAN results can be relied on, the most that can truthfully be said is that students who are already on the road to success tend to start Year 7 at Girton Grammar. The school’s claims about its role in their progress seem to reverse cause and effect.

It’s not just Girton. Any school that recruits lots of already high-achieving students will almost inevitably star in NAPLAN league tables and end-of-school awards lists. And those top-line results will help greatly in generating more demand for enrolment places. This gives schools a systematic incentive to focus on marketing their flashy buildings and state-of-the-art facilities rather than the harder, more complicated and more important work of taking students from whatever point they start at and helping them realise their full potential.

Girton Grammar is the kind of school that Melbourne University’s John Hattie, the apostle of educational effectiveness, has termed a “cruiser school.” It clearly succeeds at enrolling already high-achieving and socially advantaged students (56 per cent of them from the top quarter of the Australian population) and excluding children from disadvantaged backgrounds (just 4 per cent from the bottom quarter). But in terms of adding value, and materially enhancing the trajectory its students are already on, the available evidence shows few signs of success.

Cruiser schools, says Hattie, are “a major contributor to Australia’s declining educational performance,” a view endorsed by the second Gonski report on achieving educational excellence. In particular, cruiser schools are responsible for significant declines in achievement among Australia’s most advantaged and high-performing students. In the OECD’s PISA tests, for example, maths literacy among high-achieving students declined by around thirty-five points between 2003 and 2018, equivalent to a year and a quarter of learning. That was an even sharper decline than among low-achieving students. A successful strategy of attracting high-SES students at the individual school level, applied over and over again throughout the country, has been a recipe for national failure.

Cruiser schools are mostly, though by no means only, private schools, simply because we have decided that these schools should be exempt from the obligations imposed on most public schools. The elaborate enrolment application process for Girton Grammar, for instance, makes it clear that admission, as well as expulsion, is entirely at the discretion of the head. Then there are the tuition fees, which range between $12,000 and $15,000 a year, and that’s before you add in the non-refundable application fee, the capital fee and the curriculum levy.

Girton Grammar principal Emma O’Rielly insists that “Girton enrols students from a wide range of backgrounds, from families where parents have made substantial sacrifices from their after-tax income to educate their children in a school that matches their needs.” The school, she told me, “offers a range of means-tested scholarships for students whose parents would not ordinarily be able to access a Girton education due to their financial circumstances.”

And yet the impact of the various barriers to entry is palpable. Ten minutes away at the government secondary school, Weeroona College, 55 per cent of students come from the most disadvantaged quarter of Australian families, a strikingly higher figure than Girton’s 4 per cent.

Across Australia private schools use their resource advantage to attract students from better-off families yet fail to add significantly to their students’ overall educational achievements. Study after study after study has concluded that even though non-government schools have more income per student than public schools, their contribution to student achievement (adjusted for the socioeconomic profiles of students) is no higher. Despite much greater financial resources, non-government schools only manage to produce the same results as less well-resourced public schools.

Jenny Chesters, a researcher at the Melbourne Graduate School of Education, has gone further. Using data from the Longitudinal Survey of Australian Youth project, she found that there is “no statistically significant association between type of school attended and employment status, occupation or earnings at age twenty-four.”

Why do non-government schools need more resources — building, grounds, staff and marketing budgets — to produce the same output, in academic terms at least, as their public counterparts? And why, more generally, is Australia bedevilled by the problem of cruiser schools?

In a perceptive paper on designing successful school systems, the OECD singled out the harmful effects of allowing schools to pursue success, or the appearance of it, by cherrypicking already high-achieving students. “The international evidence suggests that schools that are selective in their admissions tend to attract students with greater ability and higher socioeconomic status, regardless of the quality of the education they provide,” say the paper’s authors. They continue:

Given that high-ability students can be less costly to educate and their presence can make a school more attractive to parents, schools that can control their intake wind up with a competitive advantage. Allowing private schools to select their students thus gives these schools an incentive to compete on the basis of exclusiveness rather than on their intrinsic quality. That, in turn, can undermine the positive effects of competition.

That sounds embarrassingly like what we do in Australia. While all schools receive taxpayer funding, some are allowed to pick and choose the students they enrol (and keep) and charge admission fees as they please. Taxpayer funding, meanwhile, gives the exclusive schools the significant resource advantage that helps them attract those who can afford the ever-increasing fees. Australia’s “cruiser schools” don’t exist in spite of public policy but because of it.

Critical to this dynamic is the fact that ever-increasing public subsidies have abjectly failed to improve the affordability and accessibility of private schools. The most recent research pointing to this reality came from the Blueprint Institute, a pro-market think tank with former Liberal ministers Bruce Baird and Robert Hill on its board. The institute’s Ensuring Choice report revealed that “the average independent school has raised its fees by 50 per cent over the last decade ending in 2020 — far outstripping wage growth (29 per cent) and inflation (22 per cent) over the same period.”

The result: “middle-income families are priced out of contention for enrolment spots.” The institute could have added that the pattern of the last decade was a perfect replica of the ten years before that, or that Catholic leaders long ago publicly acknowledged that their schools now largely exclude the poor.

Australia has one of the most socially segregated school systems in the OECD. Students from underprivileged families face the “double disadvantage” of their socioeconomic background combined with attendance at schools where they are surrounded by similarly disadvantaged peers. An abundance of evidence indicates that concentrating disadvantaged children in the same schools only further stacks the odds against them.

Students from more privileged families, conversely, might be expected to benefit from the “double advantage” of high family socioeconomic status and a cohort of similarly privileged peers. But, as we have seen, this is not how it plays out in practice. Instead, these students are falling further and further behind their international counterparts, floundering in schools more focused on intake than output. Allowing and even encouraging some schools to cherrypick their students has succeeded only in undermining both equity and overall achievement.

All of the above might plausibly have provoked a series of questions among Productivity Commission staff as they wrote their recent report on the National School Reform Agreement, the four-year funding deal that defines how Australian schools are resourced, on what terms and to which ends. Why, for instance, does intense competition between Australian schools fail to generate the productivity gains economists might expect? Why has a huge increase in government funding to private schools yielded no discernible return in terms of either affordability or student achievement?

And then there is an even more fundamental question that goes beyond outcomes, effectiveness and productivity to the role of schools in the cultural formation of citizens. This question returns us to those two schools in Bendigo, ten minutes apart, that serve young people from completely different social worlds — a dynamic that repeats itself in towns and suburbs across the country in a pattern of segregation that inevitably includes a racial as well as a class dimension. What is the hidden curriculum embedded in these arrangements? What are the lessons contained in this organisation of learning and learners?

To the Productivity Commission’s credit, its report acknowledged some dimensions of the problem. It reported evidence that “students from priority equity cohorts demonstrated, on average, less learning growth… if they attended a school with higher concentrations of students experiencing disadvantage.” It also recognised that these schools “tend to have less experienced teachers on average and are more likely to struggle with staff shortages and classroom management.”

But the commission didn’t examine how concentrations of disadvantage and privilege have resulted from the way we resource and regulate our schools. Notwithstanding its broader preoccupation with competition, there was little attention to how it works in Australia’s school sector.

In ignoring these matters, the Productivity Commission’s work reflects a myopia that dates back at least as far as the governments of John Howard and Julia Gillard, whose respective policies are primarily responsible for the shape of our school system today. This narrow orthodoxy either takes Australian-style school competition for granted, as though there is no alternative, or assumes that all competition is good without contemplating the unlevel playing field on which it occurs. A similar silence descends when it comes to the failure of ever-increasing public spending to achieve its ostensible purpose of expanding school choice.

Outside this Australian orthodoxy, alternatives exist. Numerous comparable countries, including Canada, New Zealand, the Netherlands and Scotland, have arrangements in which all schools, government and non-government alike, are fully publicly funded on a common basis and universally prohibited from charging admission fees or applying selective enrolment policies, other than those strictly defined to support their special ethos.

As Chris Bonnor and I argue in our new report, Choice and Fairness: A Common Framework for All Australian Schools, it would now be surprisingly affordable to adopt similar arrangements in Australia — largely because so many private schools in this country already receive at least as much taxpayer funding as comparable public schools.

A framework in which all schools are eligible for full public funding, and are free to the user, would tackle the problem the Productivity Commission — along with many others — has not. It would minimise social segregation, reduce the outsized impact of negative peer effects on student achievement, and ensure that schools compete not on their ability to attract additional resources and the “right” students but on their capacity to help each child achieve a full year of learning, every year, and to realise their full potential.

All schools receiving public funding would be open to children of all abilities and prohibited from excluding children on the basis of entrance tests and other similar discriminators. Non-government schools could continue to apply enrolment and other policies necessary to promote their specific religious or educational ethos, but if they are unwilling to accept funding obligations, they would forfeit their public funding.

The obvious objection is that a proposal like this is politically unthinkable. But there is a circularity in such an objection. The question is: why is it unthinkable to challenge the basic assumptions underlying Australia’s unique — and uniquely bad — dual system of taxpayer-funded schools?

This complex question has many answers, but here is one. Advocates for public education typically frame their argument in exclusively egalitarian terms, either ignoring the case for choice and competition or regarding it with active hostility. This approach accepts that there is an inescapable trade-off between choice and equity, and then vigorously argues that the latter should trump the former.

In political terms, this is a losing strategy, as a half-century of failed attempts to implement needs-based funding attests. There is just too large a constituency who like choice, either because they prefer something other than a secular, government-owned and -operated school, or because they place a premium on the capacity to opt out.

In embracing the choice-versus-equity dichotomy, champions of public education have failed to point out that we currently enjoy neither. Instead of offering meaningful choice, existing policies have created non-government schools that openly acknowledge they price out the poor. Instead of putting downward pressure on fees, public subsidies have enhanced the market power of exclusive schools. Instead of creating the competition that engenders diversity, dynamism and innovation, public policy has succeeded only in producing cruiser schools.

Rather than continuing the false debate between choice and equity, it is time to affirm the value of both and explore how each could be realised more effectively than at present. The first step is for critics of the status quo to engage in the task of reimagining how choice and competition could be shaped to advance the common good. If we think the choice for Australian schooling is between the unthinkable and the indefensible, it is time we thought harder. •

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It’s one thing for a prime minister with authority, such as Malcolm Fraser in 1977 or Harold Holt a decade earlier, to hold referendums and campaign in unison with the Labor opposition; it’s quite another for a Liberal opposition leader to support a Labor initiative. Some form of federal opposition naysaying was always a fait accompli (even if Dutton and shadow minister Julian Leeser didn’t realise it until early this year), though the form it took, of binding shadow cabinet, was at the severe end of the spectrum. Total freedom à la Republic 1999 would surely have made life easier for everyone, including the leadership.

Why did Dutton choose this path? The answer must be the Aston by-election, when those several hours of counting on April fool’s night gradually turned into a wrecking ball aimed at the Liberal leader’s already modest authority.

Now, it is my firm belief that by-election results don’t actually tell us much about anything — certainly not the next general election result.

(When I chatted with The Tally Room’s Ben Raue a couple of days after the vote, he made the excellent point that even if by-elections did portend the next general election result in a particular electorate — which they certainly don’t because who will govern isn’t up for grabs — seat swings themselves vary wildly at elections. In 2022, for example, the national 3.6 point shift to Labor translated on the ground to everything from 14.2 to Labor in Pearce, Western Australia, to 7.2 to the Liberals in Calwell, Victoria. What would a 7.2 per cent swing to the Liberals at a Calwell by-election in, say, 2021, have told us about the 2022 general election? Nothing.)

But by-elections enjoy divine status within the political class, and Dutton, suddenly insecure, did what such leaders often do: he embraced the party’s true believers, the self-proclaimed “base.” It’s the opposite of what rational analysis would suggest, which is to try to elevate one’s standing in the general community, but it is the path of least resistance.

In this case the “base” is the party’s right wing, for which the current party room isn’t actually a bad proxy. (According to some reports, Dutton piled extra humiliation on the phone-box-full of remaining “moderates” by excluding from his public announcement an agreed-on legislated Voice.)

The reaction has been condemnation in some quarters and exuberance in others. For the latter — in opinion pages and, one imagines, on Sky after Dark — the leader is finally standing for something. No guts, no glory.

And so the referendum is cast as Dutton’s big gamble, with a big payoff coming if the No case prevails. But politics doesn’t really work that way.

It might be true that a Yes victory would destroy him. But it’s not the case that the opposite would mean salvation. People of a certain age might recall Liberal leader John Howard celebrating in September 1988 after successfully opposing a set of four Labor-initiated referendums that recorded the biggest loss in history. Eight months later he was out of a job. Opposition leaders’ fates ultimately depend on their public standing, largely reflected in opinion polling, and there is no reason to believe a No win would endear Dutton to the electorate.

Would it damage prime minister Anthony Albanese, which in a zero-sum game might be an equally positive outcome for the Coalition? It would affect medium-term perceptions of the prime minister’s political nous and prowess, which would influence media coverage and probably shift the opinion polls a little. But it’s all rather transitory. The caravan moves on. In terms of the next election, and in the long run that’s what matters for Albanese, it will mean little.

Internal Labor skulduggery would be an outside risk, but Rudd’s Rules put an institutional plank under Labor prime ministers these days.

When a leader prioritises singing to the choir it is a symptom of leadership decline, and usually also ends up being a cause. That makes it difficult to see Peter Dutton lasting until 2025. Perhaps his best chance of contesting the next election as leader is if Albanese is foolish enough to, as some contemplate, call an early one off the back of a successful referendum.

Hot off the presses — in for a penny, in for a pound — he’s appointed the combative Jacinta Nampijinpa Price to replace Liberal Julian Leeser in the shadow Indigenous Australians portfolio. While Leeser’s other portfolio, attorney-general, has gone to Liberal Michaelia Cash, this represents an improvement in the Nationals’ front bench representation. Nats, whoever they are, don’t get a vote in the Liberal leadership.

And what of the referendum itself? The Yes case is lumbered with the reality that Albanese is not a details man. During a constitutional referendum the attorney-general is normally the go-to minister for curly questions; on this occasion it’s Indigenous Australians minister Linda Burney, who is no lawyer. Both Albanese and Burney have made misstatements requiring backtracking, and are likely to make more.

The nitpicking, the “gotchas,” are only getting started. “If you don’t know, vote No” is the standard theme against any political change, even if it’s not always an official slogan. Mounting the case for change is challenging, even in government.

I’ve generally been pessimistic about the Voice’s chances, but am slightly less so after Aston. Referendums can be a chance for some voters to deliver a kicking to a government, so the apparent absence of such an anti-Labor dynamic in Aston can’t be ignored.

Nor can the incompetence of the No campaign. The proposal to hold another referendum to recognise immigrants as well as Indigenous Australians is a doozy, creating a target where none was needed. It also eliminates what has historically been a key substructure of No cases: that this whole exercise is a waste of money by a self-indulgent government. Warren Mundine himself was running the price-tag line only days before his second-referendum brainwave.

The public face of Recognise a Better Way is also very last century; did I actually hear former Nationals leader John Anderson recently intoning about “intelligent Aborigines” in a radio interview?

Every state premier and territory chief minister has announced in favour of Yes. The fact that Tasmania, whose vote has made the difference at three of the five “double majority” referendum failures, has a sympathetic Liberal government bodes well in the event of a close outcome. Ditto the fact that the high-profile Liberal member for Bass, Bridget Archer, will be campaigning Yes. (Is this combination of universal second-tier support and a lack of federal bipartisanship a first? Probably.)

The federal opposition leader doesn’t enjoy wide appeal. The campaigning on Alice Springs crime, like John Howard’s 2007 Northern Territory intervention, is at its heart designed to kindle fear of Aborigines “out of control.” It has a limited constituency, and voter cynicism about such tactics abounds.

One day Mundine will be interrogated about his “recognise immigrants” plan. (Like, what constitutes an immigrant?) Other prominent figures on the No side, Pauline Hanson and Tony Abbott, are niche products. (Of the No campaigners, John Howard is probably the only one the Yes camp would love to have onside.) Meanwhile the opinion polls continue to show majority support in every state. (Even the recent Newspoll, once you eliminate undecideds.)

But there’s still six months to go. And it’s a Labor government referendum held in the teeth of federal opposition. Historically, these are very, very difficult obstacles to overcome. •

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The reclassification would encourage smokers to discuss with their GP “the best way to give up smoking, such as using other products including patches or sprays,” the government argued. If e-cigarettes were still required, the GP would write a prescription.

It looked promising on paper, but the plan failed to deliver the desired result, a fact that even Nationals leader David Littleproud now admits.

The failure had complex causes, including shortcomings in state and federal enforcement of the laws that regulate importing, wholesaling and retailing of e-cigarettes at both federal and state/territory levels. Complicating these efforts is the fact that only laboratory testing can detect whether vaping products contain nicotine, which means that importers and retailers can misleadingly label vaping products as nicotine-free to avoid scrutiny.

But there was another unanticipated obstacle to controlling e-cigarettes: the emergence of a welter of online nicotine-prescribing services offering vaping products outside traditional general practices, often with little or no contact with doctors.

These new businesses are being fuelled by a combination of unfortunate timing and poor policy design. The reclassification of nicotine as a prescription-only drug coincided with the accelerated adoption of telehealth consultations during the pandemic; more importantly, though, the new Medical Benefits Scheme number for these consultations didn’t require patients to have an existing relationship with the prescribing doctor — unlike most other telehealth services.

The new prescribing services are a long way from the GP oversight envisaged by Hunt when he introduced this restriction. They don’t provide any healthcare services other than nicotine prescribing. Their doctors don’t have an ongoing relationship with the patient. Worse, in some cases patients have no direct contact at all with a doctor; they simply fill out an online form requesting a prescription, which is then sent to them via text or email. The websites’ claim that these requests are “reviewed” by a doctor is impossible to verify

Many of these prescribing services operate outside Medicare and typically charge less than a Medicare-funded consultation for a prescription. Some also sell vaping products (or refer consumers to an affiliated supplier) and then rebate the prescribing fee against the purchase of vaping products.

Not surprisingly, GPs and health experts have raised a range of safety and quality concerns about the growth of these services. Among those to speak out is Chris Moy, a South Australian GP and former national vice-president of the Australian Medical Association, who is concerned that consultations provided by these services are disconnected from the type of holistic patient care offered by traditional general practice. Because the nicotine-prescribing doctor has no access to a patient’s history, he says, continuity of care can break down. Patients could develop side effects without the knowledge of their usual GP.

The vice-president of the Royal Australian College of General Practitioners, Bruce Willett, says that while the dangers of vaping aren’t yet fully understood, the increasing use of e-cigarettes, particularly among young people and school-age children, is deeply concerning. He believes that online prescription services come with “numerous risks” and enable nicotine products to be more easily obtained by vulnerable consumers.

“My message to anyone thinking about using these services to get a prescription for nicotine e-cigarettes is to think again — and book an appointment with your GP instead,” he adds.

Another concern being raised about these new services is the conflict of interest that could arise if prescribers have a financial interest in selling vaping products to their patients or if businesses selling vaping products have a financial relationship with a prescriber.

The prescribing and selling of medicines are deliberately kept separate in our health system to remove any possibility of doctors’ decisions being influenced by financial interests. But the law doesn’t prohibit all financial relationships between prescribers and dispensers. While the terms of the Community Pharmacy Agreement prohibit doctors from owning a pharmacy, for example, pharmacies can employ doctors perfectly legally.

That means pharmacies can set up online prescribing services employing doctors to provide electronic nicotine prescriptions that encourage consumers to fill these prescriptions at the pharmacy — by linking the prescription directly to the pharmacy, for example, or by rebating the cost of the consultation against purchases.

Pharmacies are also allowed to produce or import their own vaping products and can promote these to consumers without violating the Therapeutic Goods Advertising Code — for example, by listing them above other products when directing consumers to their website to fill their prescriptions.

Regardless of legality, Chris Moy is concerned about the potential for conflicts of interest if pharmacies or other business that sell vaping products have a financial relationship with nicotine-prescribing services. “A doctor’s sole interest should be in the health of their patient,” he says, “but the situation becomes muddied if the doctor makes a profit from selling a product they prescribe, or if they are employed by a business which does so.” Willett also stresses the need for providers to make any conflict of interest — “anything that could affect, or could be perceived to affect, patient care” — clear to patients.

Measuring exactly how many nicotine prescriptions are being provided by standalone services is impossible. The Therapeutic Goods Administration’s register of authorised nicotine prescribers lists 1635 Australia-wide, of which around fifty-five prescribe only online. But the TGA doesn’t collect information about the level and type of interactions the prescribing doctors have with their patients. Medicare keeps records of the number of nicotine prescriptions issued via telehealth but doesn’t record the proportion written in a traditional general practice setting.

Given the significant health and economic harms caused by smoking, it is clearly important to make quitting tools accessible to smokers. Recent evidence suggests that e-cigarettes can be a useful quitting tool for some smokers (although researchers’ views differ about their effectiveness). But the potential benefits of making e-cigarettes available to smokers need to be balanced against the risks of non-smokers (particularly children and young people) accessing these products.

The new standalone prescribing services make it easier for consumers to access e-cigarettes for purposes other than quitting smoking. They raise concerns about conflicts of interests between prescribers, dispensers and retailers, and create ethically questionable opportunities for healthcare professionals to profit from the spread of vaping in the Australian population.

Health minister Mark Butler’s recently announced plan to ban personal importation of nicotine is a step forward — albeit a belated one — in tackling the public health threat of vaping. But unless it is part of a comprehensive strategy that also regulates how nicotine is prescribed online, it seems likely to divert demand from overseas providers to these services, further entrenching this business model within the Australian health system. If the government is serious about reducing the rate of vaping in Australia, it needs to look carefully at this growing sector and the role government policy plays in its spread throughout the Australian community. •

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