McCrann on Turnbull
Whether the Coalition will have enough seats to form government remains unclear and it is by no means certain that it will be able to remain in government. But one or two certainties are clear. Most importantly, the governing of Australia will be much more difficult, perhaps as difficult as it was under Whitlam when the initial budget was put together by Whitlam and his Deputy on their own. The Turnbull government has already introduced a budget but that has still be considered by Parliament. Labor will doubtless argue that Turnbull’s bad election result means that this budget needs to be revised. As Terry McCrann points out below, any budget now needs to alsotake account of the likely reduction in Australia’s AAA credit rating.
Election Result & Muslim Leader on Homosexuality
Whatever the outcome of the election, the 2.8% swing against the Coalition, and thenow very real possibility that it will be unable to form government on its own, is clearly a vote of no confidence in Turnbull and the policies he presented since taking-over from Abbott – or rather the lack of them. Those who were characterised as Del-Cons, which included myself, correctly identified that Turnbull is at heart a big government interventionist who lacks the capacity to adopt policies which would encourage private enterprise and should not be a leader of the Liberal Party. His attempt to persuade the electorate that he had an “economic plan” was unconvincing and wrongly used the word “plan”. Concern remains that a government led by him would aggressively pursue policies supported by him in the past, such as global warming, but not outlined before or during the election campaign.
Some Important Implications of Brexit, Failures in Interpreting Muslim Religion
David Cameron has been British PM since May 2010 and won a second term in May 2015 with an all Conservative government (his first government was a Coalition with the Liberal Democrats). That second term was won with a much larger majority (331-232) than predicted by polls, probably because the polls under-estimated the (then) unpopular proposals by Labour Leader Millibrand (now replaced by the extremist Corbyn!). An independent inquiry into the polling suggested that the polling methods resulted in conservative voters being under-represented. The 72.7% who voted on the EU referendum exceeded the proportion in the May 2015 election (66.4%) and the 1975 European referendum’s 64.62%. Reports indicate that those who voted to leave appear to have comprised a high proportion of lower-middle income groups.
Sloan on Budget Outlook
Recipients of my recent Commentaries will be well aware of my expressions of concern about the budget outlook in the last couple of weeks. Friday’s Commentary expressed additional concerns after the publication by the heads of Treasury and Finance in PEFO of their concerns, albeit expressed diplomatically (at the same time it was reported that Treasury head Fraser would resign after the election: he will be a serious loss and his successor under either party will find him difficult to follow). I also drew attention to the Spectator Article by John Stone, which not only savaged the Coalition’s budget but pointed out that neither Labor nor “independent” journalist commentators have (with one or two exceptions) drawn attention to the seriousness of the economic problem Australia now faces. I concluded by suggesting that the Coalition should acknowledge the problem and indicate that after the election it will start a program of reducing spending by at least 2% of GDP over the next three years.
The Budget Outlook after the PEFO
As expected, today’s publication by Treasury and Finance of updated fiscal and economic estimates and projections – the so called PEFO published under the Charter Of Budget Honesty - do not show any significant change since the Budget of 3 May. I have include the most important sections of PEFO here.
Will there be Real Budget Tests Available Publicly before the Election?
Today’s Financial Review has published my letter (see below) drawing attention to the importance of providing analysts with an accurate picture of the effects on the budget of policy announcements by both major parties. Separately, the AFR has reported (also shown below) that the Treasury will actually publish its assessment of the budgetary effects on Friday. But one question is whether sufficient detail will be provided to allow a meaningful analysis of for example the extent to which Federal government expenditures are drawing on national resources and further adding to the higher tax burden which the 2016-17 budget already proposes. Similarly, will we be provided with revised estimates of the deficit and (the likely) higher debt levels?
Shanahan on threat to Turnbull, Stone on Turnbull’s Views
In the election now under way the Turnbull government has so far been selling its re-election on the theme of “jobs and growth”. In my last two Commentaries I have given reasons why this poses problems, based as it is on a budget presented as an economic plan which has very limited substance in terms of either its aggregates or its components. As The Australian’s Economic Editor Uren put it, “taken together, the initiatives in the budget will not shift the dial on national growth one way or another to a measurable extent”. This is already reflected in dissatisfaction amongst Coalition members, with no lift in polling following the budget (in Newspoll the Coalition’s TPP remained fractionally below Labor’s), a majority of voters judging that the budget left them worse off but with Turnbull still well ahead as the better PM. There has also been questioning of the components by media and other commentators. Further, in the first public debate in front of a supposedly undecided audience, Shorten easily won the head count. On the ABC’s Insiders today there was agreement from the four participants (all with the left inclinations that the ABC normally gives preference to) that Turnbull has so far shown less ability than Shorten to get his message across.
Budget & Economic Plan (Sic)
How to interpret the Budget? My initial reaction was “much ado about nothing”, by which I meant that while there have been reductions in superannuation “concessions” and in tax rates for small businesses offset by increases in tobacco excise, together with a small initiative on youth employment and commitments to fund various types of infrastructure, there was little change over the next two years in estimates of total government spending and revenue relative to the total economy.
Workplace Relations Reforms, The US in Syria? Iraq, Earth Day
Malcolm Turnbull has been prepared to risk forcing a double dissolution to obtain a vote by both houses sitting together on legislation to pass the Registered Organisations bill and to re-establish the Australian Building and Construction Commission. That body was abolished under the Gillard government in May 2012 and replaced by Fair Work Building & Construction with much reduced regulatory powers. Turnbull also secured the winding up of the Roads Safety Remuneration Tribunal established under Gillard at the behest of the Transport Workers union and effectively designed to favour unions able to collude with transport companies.
Turnbull Visit to China & Stone on Split Within Liberal Party
Turnbull’s 36 hour visit to China and his meetings (and banquets) there with President Xi and Premier Le Keqiang may have enhanced his role as a PM able to get on with important leaders from other countries. Many of his reported comments also appeared to be designed to show that he is knowledgeable about Chinese history. But the question is whether anything came out of the visit.