Institute for Private Enterprise » Industrial Relations

The First Week

Des Moore — Fri, 09 Feb 2018 21:48:36 +0000

Joyce

Parliament’s first week back after the summer break witnessed quite a bit of excitement, with Deputy PM Joyce leading the way or should I say presenting a new partner and, at the same time, making sure that 7.30 (and those watching) know that it’ a “private matter”. The following extract from today’s Cut and Paste certainly shows Joyce at full throttle

“Well, Leigh, what I want to do is make sure that private matters remain private … I don’t think it profits anybody to drag private matters out into the public arena … it’s a private matter … I will keep private matters private … salami slicing of a private life … private matters should remain private and that’s part of my private life … private matters remain private and I’m going to keep my private life private …”

Of course, it isn’t just a private matter when the Deputy PM and Leader of the National Party decides to change partners, the more so as it is reported to have been known around the traps for some time but somehow “the media” decided not to mention a word. Amazing – one wonders how many other VIPs’ private matters are being kept “secret”.

Voters (and particularly members of the relevant party)are surely entitled to know if those they have elected have become constrained in carrying out their roles because of illness, serious financial difficulties, or serious family problems. The importance of the latter is illustrated by those senior MPs and business leaders who resign from their positions and quite frequently say “I have to spend more time with my wife and family”. Joyce will doubtless say that he has been working hard but could it have affected his judgement on policy, even intra Nationals, issues?

Even though Nationals must have been concerned about Turnbull’s consistent poor polling,it has certainly been difficult to detect any hint from Joyce of a difference between the two parties on issues such as climate change where one might expect rurals to be more skeptical. Joyce’s popularity within the Nationals may also have suffered because of his role in moving fellow National Darren Chester out of ministerial responsibility for transport and infrastructure, and out of Cabinet completely, in the pre-Christmas Cabinet changes.

Turnbull on Tax Reform

Some may have been expecting that, after the two months summer break, the Turnbull government would be announcing new policies or at least significant variants of existing policies. But, on the key issue of tax policy, what has emerged is uncertainty. In question time Turnbull accused Shorten of being a “job-destroying, business hating populist” for opposing company tax cuts and in effect he fell back to Plan B by switching to cuts in personal income tax for the May budget. But here the Coalition’s promise of returning to a budget surplus by 2021 provides scope for only limited tax reductions unless major cuts in spending can be effected. These show no sign of emerging. In fact, additions to spending on child care and on subsidies for (of all things) arms exporters have occurred.

Turnbull will in any event find Labor (and some in the Senate) also opposing reductions for those in the high income brackets. As the election gets closer it appears that the scope for making promises which affect the budget, and the scope for promises, is diminishing unless Turnbull can adopt a more aggressive role on spending.

Workplace Relations

One of the Cabinet changes made before Christmas was to move Michaela Cash to Jobs & Innovation and to make Craig Laundy responsible for what was her responsibility, Workplace Relations. This appears to be something of a downgrade for workplace relations and a confirmation that Turnbull will not attempt major changes in the regulatory system and the excessive role played by unions. Although Laundy has now indicated that he intends to seek changes to the regulations, that would be within the Fair Work system. And, although he has three workplace bills before Parliament which would give the government more power over unions and union officials, it is unlikely that the Senate will pass them.

An important policy issue here is also the minimum wage, which the Minister and the PM need to be on top of (surprisingly the Treasurer seems to have little to say on IR). Last week Shorten called for a large increase hourly pay for low income workers –adding that “the minimum wage is no longer a living wage”.”Our goal should be a real, living wage – effectively raising the pay of all Australians, particularly the 2.3 million who depend upon the minimum rates in the awards,” he said (see Minimum Wage). The reality is that raising the wage of lowly skilled workers not only risks lowering their employment levels. Under present Fair Work distribution rules, it also means the so-called minimum will be paid to people who are also in households well up the income scale. As expert analyst Mark Wooden (professor at the Melbourne Institute) points out in the attached, “Almost 44 per cent are in the top half of the income distribution, and only 16 per cent are in the bottom quintile.” So much for the minimum wage.

Greens Need to be Rebutted

Shorten’s proposal for establishing a “real, living wage” reflects the far left policy adopted by UK Labour leader Corbyn to “help those who are left behind” and have the government playing a much bigger role in society. Such policies form part of the policies adopted by the Greens in Australia. Their attitude has sprung to attention by the astonishing attack by Greens MP Adam Bandt on new Senator Jim Moran, a retired major general who led Australian and US forces against Islamic extremists in Iraq. According to Bandt, Moran is a “complete coward” (and a few other similar epithets).

Bandt’s remarks, and those of his leader’s Di Natale, indicate the threat to society that would result if the party (which gets about 10% of votes) manages to influence policies adopted by the two big parties. In fact it has already had a direct influence through the rainbow coalition with Gillard when she was PM and, desperate to stay in government, agreed to a carbon tax (see this excellent article on Kenny on Greens). And it has been able to influence outcomes in the Senate.

Now that the outlandish views of the Greens have been exposed there is an opportunity for Turnbull to take the matter further and benefit the Coalition. Although the Coalition is unlikely to win the by-election on 17 March in the Batman electorate (just north of Melbourne), it should nominate a candidate on the basis that he will seize every opportunity to expose the faults in the policies of the Greens, who have been thought to have a good chance of winning (the seat was held by Labor). The fact that this is a possibility is an indication of the failure of liberal views to be exposed and spread by both federal and state Liberal parties. A launching of the program of a Coalition candidate for Batman could be the start of a revival of the polling for the Coalition.

Of course, that requires improvements in policies presently advocated by Turnbull. Some are mentioned above; others have been explained in earlier Commentary.

Trump’s Polling Improving

A report by Breitbart refers to the latest Rasmussen poll showing that Trump’s job approval rating is at 48 percent, about 4 percentage points higher than Obama’s at this time in his own presidency. A smaller percentage disapproved of the job being done by Trump (see this document which is titled Media Fail: Trump More Popular than Obama at This Point in Presidency).

The magazine, which is of course pro Trump, portrays this as “a massive failure for the American media.” Much the same can be said about most of the Australian media, particularly the ABC and SBS, in their treatment of Trump.

Also, as mentioned in my previous Commentary, with cuts in taxes and increased spending Trump faces major fiscal and debt problems. This in turn is pushing up market interest rates and the Fed may also raise official rates. Similarly, the share market, already down about 10%, is almost certain to fall further.

Big World Temperature Fall Not Published, ABCC Passed

Des Moore — Tue, 29 Nov 2016 22:29:01 +0000

Yesterday my Commentary drew attention to the 1C fall in average world temperature since the middle of the year and I assumed that would be published in Australian media today. But I have not been able to find any reference to a fall anywhere in the media. In one sense this might be regarded as “just typical”. But I still find it astonishing given the graphical presentation below and the fact that the temperature measurement comes from a NASA satellite. A fair interpretation would be that, once the El Nino peaks are set aside on the ground that they are temporary, there has been little or no change in temperature since 1996.

I also draw your attention to the Comment by the HR Nicholls Society on the passage of the legislation allowing the restoration of the ABCC. In a word there is a lot more to be done to improve workplace relations.

Abetz and other Speakers at HRNicholls Dinner

Des Moore — Sun, 23 Oct 2016 11:28:34 +0000

On Friday evening I attended the annual dinner of the HR Nicholls Society and gave the vote of thanks to the speaker, Senator Eric Abetz. His address was highlighted by The Weekend Australian giving it the front page lead story (see below) and the SMH also reported it, but not The Age. Abetz, who was dropped by Turnbull from ministerial ranks (he was Minister for Employment under PM Abbott) and from being Coalition leader in the Senate, used the HRN dinner as an opportunity to criticise Turnbull for failing to make reform of workplace relations a major policy issue at the election on 2 July. He pointed out that, with the ammunition provided by two major reports (the Heydon Royal Commission and the Productivity Commission), a policy advocating further reform had been a “gimme” and he noted that “not even the unlegislated elements of the 2013 election policy were taken forward such as changes to right of entry, transfer of business and individual flexibility arrangements”.

My vote of thanks supported the need to do more than restore the Australian Building & Construction Commission and amend the Registered Organisation legislation to reduce corruption within the union movement. I also expressed regret that when Opposition Leader Turnbull had decided not to vote against the Fair Work legislation initiated by Gillard when she was PM.

In the full text of his address, Abetz makes a number of points relevant to the recognition of the unionism of Shorten and the need for reform, including the following:

Kimberley Kitching, who is the replacement nominee for the retired Senator Conroy and was “championed” by Shorten, “was found by the Fair Work Commission to have provided false evidence on a number of occasions (something that eminently qualifies her to be a Labor Senator)”;
If given the chance, Shorten says “he would govern our nation like a trade union boss”;
Officials of the Western Australian Branch of the Maritime Union of Australia, publicly admired by Shorten, are “regularly before criminal and civil courts for significant breaches, including for assault in addition to harassing workers with ‘scab’ posters and other breaches of the Fair Work Act”;
Shorten has effected “sleazy deals doing the low paid workers out of pay for self or trade union enrichment”;
His (Abetz’s) engagement in considerable negotiations with cross bench senators, some successful, showed it is possible to obtain agreement to legislative changes;
When Labor was in office Shorten extended “misconceived favours” to the MUA which have resulted in a considerable reduction in the number of major Australian registered ships and in their share of Australian freight. Reform in that area has not yet been started but needs urgent attention;
On the basis of advice received before the 2013 election that there was “reform fatigue”, it was decided to limit the proposed reforms for that election.

The final paras of his address are as follows:

“It is vital that the Government advance workplace reform as a top tier priority if it is to achieve its stated desire of pursuing jobs and growth. The hard yards have been done, we have two large reports that don’t only recommend change but make an unassailable case why that change is imperative. And, I can attest, there is a Department of professional and dedicated men and women who could implement this agenda. All that is needed is the political will. A failure of determination will have a lasting effect on our economy, on employers but above all on workers and their families who will be denied a self-sustaining work opportunity. Encouraged by the luminaries of the H. R. Nicholls Society, I will continue to agitate for such vital reform”.

The Weekend Australian report also refers to the promise made by Turnbull, after the Heydon Royal Commission report was published early this year, that the government would publish an assessment. Employment Minister, Michaela Cash, said then that it would “try to implement the overwhelming majority of the Heydon royal commission recommendations”. No such assessment has been released but Cash told a Senate Committee earlier last week that the government planned to introduce reformative legislation next year (see this report by Workplace Express).

Abetz’s address shows that he retains considerable expertise on workplace relations and it makes a strong case for the Coalition to propose a more comprehensive set of reforms in the current Fair Work arrangements even though it would be difficult to get changes through the Senate even with the support of One Nation, whose workplace relations representative, Senator Malcolm Roberts, told the HR Nicholls conference that they would be supportive. Roberts has been given access to the secret document submitted to the government by the Royal Commission. If reformist proposals are backed by justified reasoning and examples of union misbehaviour that should attract public support.

The address to the conference by Victorian Shadow Minister for Industrial Relations, Robert Clark, provided added support to the case for reforms which reduce the capacity of unions to obtain increases in wages and/or conditions of employment that are not justified for those employed by state governments or their agencies. He gave numerous examples of “concessions” obtained by unions in Victoria which use their political relationships with the Labor government and its ministers ( including Premier Andrews) and threats of various types of disruptions if such concessions are not granted. Clark referred particularly to the dispute over the attempts to exercise union control over the country fire volunteers and to stop Boral providing cement to construction projects in Melbourne. He praised the decision of the then Labor Minister Garrett to refuse to kow-tow to union pressure on fire volunteers as an example of obtaining public/media support when the lack of substance of union claims is revealed.

Other speakers at the conference spoke in support of a lesser set of regulatory arrangements that allow or require managements of businesses to be more involved. Judith Sloan argued that the attempt in the legislative changes made by Peter Reith to encourage enterprise bargaining has failed and that, outside governments and large businesses, such bargaining agreements are no longer the first choice. I suggested that what had happened was a restoration under the Fair Work arrangements of the centralised intervention system whose role Reith had tried to markedly reduce and that major changes needed to be made to the Fair Work arrangements to put businesses in a position where they are able to prevent union disruptions if they do not have all their demands met.

Turnbull Satisfies Electorate Less than Shorten, Enterprise Bargaining, Global Warming, Presidential Candidates’ Health

Des Moore — Wed, 31 Aug 2016 12:29:29 +0000

Adverse Start Poll

The first Newspoll since the election on July 2 shows only a slight fall in the Coalition’s TPP from 50.4 per cent to 50 per cent but a large drop in Turnbull’s net satisfaction ratio to the point where it is now less than Shorten’s (minus 18 cf minus 14). Late last year Turnbull was plus 38 while Shorten was minus 38. While Turnbull still has the Better PM rating, the gap has narrowed sharply. Importantly, the poll also shows that “Reducing debt and deficit” are strongly supported by both Coalition and Labor voters, almost as strongly as “Maintain border security” (see below).

Relevant here is that, while the Coalition is attempting to legislate to save $6.5 bn (now reduced to only $6.1 bn) because Labor has already agreed to the proposed savings, it appears that it is proposing to spendhalf the savings on assistance for childcare and family assistance (added only yesterday!). This is scarcely consistent with Turnbull’s recent emphasis on the need for a tougher budget policy and does not provide any follow up to Treasurer Morrison’s address reported in my Commentary on Sunday. There Morrison drew attention to the problem of the increasing extent of government assistance and of those who are not net payers of tax. An analysis of the assistance provided to those with above average incomes could provide a useful starting point. Turnbull has also attracted criticism from more conservative senators, such as Bob Day (see Response to Turnbull).

Polls are always difficult to interpret but this is not a good start for the Coalition and will further encourage an aggressive Labor attitude, including the development of no confidence motions in Reps. If confirmed in the next couple of polls the Coalition will be faced with media assessments and comments from Labor that an election now would be even closer than the July 2 one (if that is possible) or would produce a Labor victory. Within the Coalition there would also be discussion about the need for a different leader before the next election. There will certainly be additional pressure on Turnbull to personally present a more conservative approach to policy.

Enterprise Bargaining

One of the legislative proposals by the Coalition which seems likely to be passed by Parliament is Turnbull’s promise to prevent the Victorian United Firefighters Union taking control of the Volunteer Fire Brigades Authority, a “deal” promised by Victorian Premier Andrews. This has also led to heavy criticism of Andrews by the Herald Sun (and others), which claims in today’s editorial that “there are simmering concerns within the Labor Party about the Premier’s judgement” and that he may be in debt to the head of the union (with his latest ill-informed decision today to stop accessing gas by fracking on land, Andrews seems certainly to have adopted a policy not conducive to encouraging development in Victoria). As I have previously suggested, Turnbull’s proposed protection from union control of the volunteer group is all good in itself but should be extended to provide greater flexibility in other workplace arrangements between employers and employees.

Relevant here is a decision by the Fair Work Commission which has been strongly criticised by the relevant union. This highlights one of the inflexibilities of the existing workplace relations arrangements in that it effectively over-ruled an agreement between the union and the employer (Coles) and approved by 90% of employees. The decision by FWC seems to have been based on the requirement that enterprise agreements should meet the better-off-overall-test and the existence of penalty rates applicable to some employees. According to The Australian’s Workplace Editor, “the commission’s interpretation of the better-off-overall-test would mean employers must ensure every individual worker covered by an agreement was not worse off”. In addition to the obvious question of whether there should be any de facto “statutory” penalty rates, the better-off test also reduces the flexibility of arrangements where the employer needs to reduce wage rates when faced with competitive pressures. This has recently occurred in the case of Arrium, which is now under administration and which has secured some reduction in wages with its workers but seeks more. Such circumstances occur from time to time in a modern economy (for further details on the Coles arrangements, see Enterprise Bargaining?).

Another example of inflexibility arises from the decision of the Federal Court to approve the claim by the Fair Work Ombudsman that a cleaning company had not (as it claimed) entered independent contracts with its individual employees but had in fact been engaging in employment with another company. The assessment by the Federal Court judge is contentious and is seemingly based on trying to bring the arrangements made within the Fair Work Act rather than allowing details settled with individual employees. The judge declared that employee entitlements such as minimum wages, penalty rates, annual and personal leave and super were not met but had presumably been accepted by the employees (see FWO & Independent Contractors).

Global Warming

While there continue to be new analyses which supposedly support the threat of dangerous global warming, there have also been analyses which contradict such claims. Encouragingly too, an article in today’s AFR points out that global warming ranks near the bottom on the list of voters concerns in the US Presidential race (the author is himself concerned, however). This is surprising given the attempt by Obama to make it a major issue throughout his Presidency by grossly exaggerating the relationship between increased emissions and changes in temperature. There is also increasing evidence suggesting that the official temperature measurements have considerably over-stated the increase in temperatures. My colleague, Dr Tom Quirk, has just completed a detailed analysis of Melbourne’s temperatures which confirms his earlier analysis suggesting such an over-statement. More generally, there has been a consistent refusal by governments to have an independent inquiry into the claim.

Importantly, today’s Australian publishes an article by well-known and highly regarded sceptic Matt Ridley which answers some recent expressions of concern that there have been developments in the Arctic region which suggest complete melting is coming soon. Ridley points out that there appears to have been considerable variation of sea ice in the past, including periods when there was none for whole years, and that polar bears clearly survived the ice-free seasons. He also reminds us that melting of sea ice does not affect sea levels and concludes that an Arctic without sea ice for a whole year would have only a small effect on human welfare.

Health of Presidential Candidates

The health of the two US Presidential candidates is receiving increased attention. A report on Clinton indicates that when she was Secretary of State she received advice on the treatment of Alzheimer’s, Parkinson’s and Multiple Sclerosis. The drug used for such treatment is said to be a stimulant which treats excessive sleepiness. There is no indication that Clinton may have experienced such diseases. The report adds that a new bunch of emails will be released in the week before the election

Trump is reported as having had a medical check up and that his doctor indicated he has no problems.

Both reports are in the attachment Heath of Presidential Candidates.

Budget Savings, Protecting Voluntary Agencies, Clinton’s Health, Syrian War

Des Moore — Wed, 24 Aug 2016 12:26:52 +0000

More Budget Savings Needed

With the imminent resumption of Parliament some warming-up is occurring. In The Australian Finance Minister Cormann is reported as making new claims that the Coalition has already made large budget savings ($221bn over 10 years locked in) and that more could be made with Labor support. It appears Cormann refers to possible savings additional to those proposed by Turnbull to implement a miniscule $6.5 billion in budget savings said to have been agreed by Labor. But why hasn’t the Coalition detailed some possible additional savings?

Why also hasn’t Labor been constantly reminded that, thanks to ministers Keating and Walsh and the Coalition’s support, the then Labor government in the mid 1980s reduced federal outlays by more than three per cent of GDP ? I had some involvement in this response to concerns about the increase in external debt (gross) from 9 to 40 per cent of GDP over the previous ten years, accompanied by the lower terms of trade.

And guess what? Over the eight years since the Coalition’s last year in 2007-08 external debt has again increased by about 30 per cent of GDP and the terms of trade have again dropped. Unfortunately, on this occasion such a warning signal has led to an increase in government outlays of 2.5 percent of GDP since that date. The response should now be obvious to both major parties.

Turnbull’s Proposed Amendment to Laws Governing Workplace Relations

During the election Turnbull announced that he would legislate to protect the Victorian voluntary Country Fire Authority (CFA) from action being taken by Victorian Premier Andrews to ensure that the United Firefighters Union acquired de facto control over the CFA. On the surface this seemed an appropriate initiative to provide reduced regulation in this segment of the labour market and to reduce the unwarranted power of the union directly supported by the Premier and his government (Premier Andrews has close relations with the most aggressive and law breaking union, the CFMEU). Turnbull obtained strong support from the CFA and his announcement probably helped his re-election: some say that the resultant antipathy to Premier Andrews and Labor in Victoria may have prevented a Labor victory.

The legislation now proposed would involve a rather strangely titled Fair Work Amendment (Respect for Emergency Services Volunteers) Bill, would be a joint bill by Turnbull and Employment Minister Michaelia Cash and would seek to ensure that an enterprise agreement or a clause in such an agreement cannot be used to undermine the capacity of an emergency services organisation to deal with its volunteers. But even if this amendment is passed by Parliament, it would be open to different interpretations. As indicated in Judith Sloan’s comments (see Turnbull’s Proposed Change to FWC Legislation), the Fair Work Commission is prone to interpret legislation in favour of unions.

More generally, it is passing strange that Turnbull should involve himself post-election to such a degree in what is essentially a limited reform. If he is prepared to legislate to protect volunteers from union involvement, why not do the same for individuals/other groups who are prepared to work under conditions which are not accepted by unions? That would of course require a major change in the role of the Fair Work Commission. But it would improve the operation of the labour market and improve productivity.

US Presidential Election –Can Hillary Make It?

The US Presidential election is not until November and Hillary Clinton currently has a handy lead over Trump. But questions are now being increasingly raised as to whether, at aged 68, she has the medical capacity to be President. Last week John Stone drew my attention to a series of online videos which indicated that she has had seizures and other illnesses and which suggest she may not have that capacity. Stone noted that it is known that some years ago Hillary suffered a blood clot in the brain and had had to be hospitalized and he pointed out that she never holds press conferences. Another US report refers to a recent interview on a California radio show with a doctor who expressed concern at Clinton’s health and referred to blood clots in her legs and a rare clot that she experienced after a fall in 2012. Such talk led the Clinton campaign to dismiss around mid August questions about her health as right-wing conspiracy theories and to her doctor to state that she is in “excellent health”.

Then on NBC news on 22 August Rudy Guiliani, former NY Mayor who is a close adviser to Trump, claimed that Clinton’s heath is failing and referred to the videos I mentioned (see Guiliani on Clinton’s Health). This was mentioned in last night’s SBS news.Meanwhile, while Trump has repeatedly stated that Clinton does not have the stamina to be a President, he has not made so far any reference to the adequacy of her health.

In any election campaign it is difficult to assess who is telling the truth. But it is difficult to avoid the conclusion that it does seem that Clinton carries at least a risky medical situation. It seems likely that this will become a major issue closer to the actual election and that, in the meantime, Australian government and Opposition spokespersons need to have regard to the increased possibility of a Trump win.

US Involvement in Syrian Civil War

There is rarely a day goes by when we see and hear news of the horrendous war within Syria, which seems to be steadily destroying habitation in most parts, not to mention the deaths and injured. The attached editorial from today’s Australian (US Role in Syria) argues with some justification that “the lame duck US President is too weak even to support a no-fly zone that would halt Russian attacks against humanitarian convoys”. This is of course just one example of Obama’s retraction of the US as a leader of the western world and his failure to recognize that, under Putin, Russia is taking over regardless of the casualties it is causing and of its support of dictatorial regimes. It will be too late for any successor to Obama to correct the situation.

Outcome in Senate, NT Royal Cn, Rudd, Bank Interest Rates, US Defence Policy, CFMEU Behaviour

Des Moore — Fri, 05 Aug 2016 02:42:17 +0000

Since the election on July 2, Turnbull has continued his record of mistaken decisions as to both substance and process, plus a failure to indicate what substantive policies will be pursued other than the legislation already foreshadowed to restore the Australian Building and Construction Commission and to make unions more accountable under the registered organisation arrangements. But unless the (recounted) loss of Herbet by 37 votes is successfully challenged and another election held there (which seems too risky a venture), he has a majority of only one in the Reps and a deficit of 16 in the Senate.This means that if the two houses sit together he would need 9 votes from cross benchers (who include no less than 4 from One Nation and 3 from Xenophon) to obtain a majority to pass that legislation, which is a possibility but clearly uncertain. It is of some importance to climate change and extremist terrorist policy that One Nation ended up with 4 Senate seats, including one held by a sceptic (Malcolm Roberts) on global warming who is well versed in the data.

The arithmetic indicates the ongoing difficulty of governing over the next three years under a government that has no mandate and is led by a PM who has shown no abilityto lead a party which has a strong group of small government supporters and no capacity to tackle the major policy issues. The possibility of Coalition members crossing the floor is enhanced and under Turnbull the Liberal Party membership may well decline. An indication of such a possibility is provided by the response to Senator Cory Bernardi’s invitation to join a conservative group, which has already attracted 50,000 members and has raised enough money to appoint a spokesperson (Liberal Party membership is said to be about 80,000).

Northern Territory Royal Commission

Turnbull decided to establish a Royal Commission on juvenile detention policy in the NT almost immediately after watching an ABC TV program which purported to show unjustified use of violence by staff to control aggressive Aboriginal juveniles. The program included the portrayal of a youth strapped to a chair and wearing a hood to prevent him spitting (see picture below). It appears Turnbull made this decision without any investigation of the accuracy of the ABC program and without checking on the causes and difficulty of controlling such delinquents. It is by no means clear that violent action is not justified in certain circumstances, such as preventing self harm.

With Attorney General Brandis’s agreement, Turnbull also appointed a Royal Commissioner without checking on a possible conflict of interest (which was pretty clear to almost anyone checking the Commissioner’s record). Fortunately the Commissioner himself decided to resign one day later. But Turnbull then agreed, with Brandis, to appoint two Royal Commissioners of whom one is Aboriginal. This decision appears to have been made in response to complaints (including by Shorten) that without an Aboriginal a decision by a Royal Commissioner would not be accepted by the Aboriginal community. However it was apparent that the appointment has been made despite a prior public statement by the Aboriginal that the NT Government should be sacked. Although he subsequently retracted the statement, it must affect the credibility of the RC report.

Below is an article on this incident by Andrew Bolt, who argues that either Brandis or the Aboriginal must go. My view is that Turnbull has not only botched this decision and should be the one to retract.He saw it as an opportunity to become involved in an issue for which he would be praised. He could have simply asked his relevant Minister (Scullion) to investigate.

Rudd & UN Sec General

Turnbull’s decision not to support the appointment of Rudd as UN Secretary General was warranted even though he might have been a better candidate than the others who are seeking the appointment. The UN should not be regarded as an important body (rather the contrary) and Australia is better placed to be able to readily attack or praise its decisions with a foreigner appointee. That is not to rule out the support of an appointment of a former Opposition leader to an international body: if Rudd had been a more “sober” candidate he could have been “acceptable”.

However, Turnbull’s handling of the Rudd issue appears to have been faulty in having given the impression some time ago that he (Rudd) at least had a chance of being given Australian support.

Bank Interest Rates

Another example of poor performance by Turnbull is his too-quick decision to call on the banks to explain why they have not passed on the full amount of the Reserve Bank’s 25 basis points cut in official rates. Turnbull also ran a different line to that by Treasurer Scott Morrison, who had commented initially that “it’s for the banks to explain, not the government”. There has not necessarily been full pass-ons for some time and the banks quickly responded by pointing out that other costs have not come down. Once the banks had made that point Turnbull changed his position and “ordered” the banks’ executives to appear once a year before the Reps committee on Finance. (See this article from AFR).

Again, Turnbull’s handling of this issue appears to reflect an attempt to present himself as on top of policy matters when in fact he went off half cocked.

US Defence Policy

As Obama suddenly decided that the US would start air strikes against IS in Libya, the Syrian government under Asaad has continued to conduct its air strikes against “rebels” in Aleppo with support from Russia. According to one report 300,000 are now trapped in the Aleppo“city” (or what little of it is left) and Asaad will in effect take over Syria and Russia will have established a secure foothold in the Middle East. The West will have vacated, thanks mainly to Obama’s decision not to involve the US after initially threatening to do so. (See this article on Russia in Mid East). The US should at least conduct air strikes against Assad’s air force.

Meantime, the US has condemned the latest North Korean launch of ballistic missiles, as has Japan. One such missile landed 250km off the Japanese coast (for the first time inside Japan’s EEZ) and N Korea claims it has miniaturized a nuclear warhead for the missile. The US installation of an anti-missile system in S Korea is not scheduled for completion until the end of next year.

CFMEU Behaviour

This is an excellent OpEd article in the AFR by the executive director of the HR Nicholls Society on the Federal Court handling of CFMEU disruption of the site of the Gold Coast Commonwealth Games stadium.

Unfavourable Polling for Coalition & Some Reactions to Turnbull Dinner

Des Moore — Thu, 23 Jun 2016 22:31:09 +0000

The reactions to Turnbull’s dinner at Kirribilli House with “dozens” of Muslims vary but will likely have only limited electoral influence in a context where the latest Fairfax –Ipsos poll shows for the second time that Labor is ahead at 51/49 on a TPP basis. While the Newspoll of marginal seats suggests this may not be sufficient to win (because the support for Labor is not fully reflected in marginal seats), the Fairfax poll seems to confirm that there has been a slight swing against Turnbull since the election started. In one sense this is surprising given the greater extent of promised additional unjustified expenditures announced by Labor, the fact that it has acknowledged that it would have higher Budget deficits than the Coalition over the next four years, and numerous policy announcements that provided the opportunity for extensive criticism, including the claim that Turnbull would privatise Medicare (Turnbull favours government interventions and the claim just gave him justification to confirm that without upsetting colleagues). But Turnbull has so far failed to exploit Shorten’s poor budget policy partly because the Coalition itself has already budgeted for high deficits and this makes it more difficult to distinguish between the two major parties. In addition, Turnbull has continued to announce expenditures which while claimed as already provided for in the Coalition budget estimates (The Australian’s SPEND-O-METER shows $5bn announced by Turnbull cf $16.2bn for Labor during the election campaign) give the impression that both sides are adding to deficits and that the differences between the two are small.

Important also is the limited extent of announcements by Turnbull of policies in other areas. On workplace relations, for example, the announcements extend beyond the re-instatement of the ABCC to only a very limited extent and do not make use of the Heydon Royal Commission’s recommendations (see Workplace Relations). Equally, no indication has been given on Australia’s defence involvement in the Iraq/Syrian war against IS even though the US Defence Secretary publicly invited an increase in Australian participation. And on climate change, Turnbull’s announcement with the Coalition’s “Greenie” Hunt of extensive funding to protect the Great Barrier Reef came after it was revealed that an acknowledged expert on coral bleaching has concluded that the dangers of damage are much less than other experts have judged and in fact exposed research errors by them (which led to him being told in effect to fall into line with his colleagues!).

The failure of Turnbull to present a convincing role for the Coalition across all major policy areas, and to sufficiently distinguish the Coalition from Labor, has contributed to the indication that there will be a large vote for minor parties and an almost certain repetition of the difficulty of securing passage of legislation in the Senate. On present indications even if the Coalition is returned Turnbull will present himself as a failed leader with a limited mandate for reform.

Turnbull’s Dinner for Muslims

The Age has given no coverage to this incident, the ABC’s Insiders program gave it limited coverage but News Limited publications have included extensive comments additional to those made on the day after the dinner and reported in yesterday’s Commentary. These include an editorial pointing out inter alia that

“A quick Google search by Mr Turnbull’s staff, however, would have revealed that the sheik[invited to the dinner]also condoned stoning to death for adultery, insisted Islam would take over the world and said wives must obey their husbands to enter heaven. Other guests shared his disdain for homosexuals, including Australian Federation of Islamic Councils head Hafez Kassem, who said active homosexuals should be “treated”. Other religions also regard homosexual acts as sinful. But they do not prescribe the death penalty for that or any other “sin”. Under sharia law, death is the penalty for homosexuality in at least 10 theocratic Islamic states — a practice defended yesterday by Yusuf Peer, president of the Council of Imams Queensland: “That is what Islam teaches and that will never change.” Homosexuals are not the only people, however, whose human dignity is affronted by Islamic leaders. A decade ago, Australia’s most senior Muslim cleric, Sheik Taj Din al-Hilali, blamed immodestly dressed women not wearing head coverings for being preyed on by men. He likened such women to abandoned “meat” attracting voracious animals” (see Editorial on Turnbull Dinner).

In addition to an excellent Op-Ed in The Australian by Janet Albrechtsen entitled “Shut Down The Sheiks Who Incite Violence by Muslims” and an article by Peta Credlin in the Sunday Herald-Sun arguing that the offending sheik should have been removed from his leadership of head of the Imams Council the next day, several letters were published on the views expressed by Muslims. My letter below (written before the Turnbull dinner) calls for a public statement indicating that support of violent activity and preaching will not be accepted. Note also the letter by Senator Cory Bernardi in similar vein.

Election Proposals Omit Structural Reforms Too

Des Moore — Wed, 25 May 2016 11:52:39 +0000

My Commentary sent out late Sunday (thanks to those who sent compliments) drew particular attention to the article by Judith Sloan on the Federal budget and her conclusion that “Labor is completely out of control fiscally; the Coalition is slightly better but no cigar”. This followed other strong critiques, including by John Stone. Meantime we have Turnbull and Shorten buying votes as they go from electorate to electorate and adding up to $100mn a day to budget spending. What does the odd million matter?

Now Judith has written an equally devastating article on the bipartisan failure to either implement or propose significant structural reforms (see below). My favourite “missing” policy is workplace relations and it is relevant that today’s The Australian leads its Talking Points with five letters on that issue (see Letters on IR Reform). While Turnbull has a bad record on workplace relations, it is astonishing that he has so far made only very limited use of the Heydon Royal Commission. Shorten must feel (to use a Turnbull phrase) “very very” relieved. Of course, Turnbull did use the Senate blocking of legislation to tighten regulation in (mainly) the construction industry as the vehicle for calling a double dissolution. But why stop there? Reform is needed across the whole area of workplace relations.

There is one reform item which Sloan failed to mention, doubtless because she judges it would be a No,No politically. I am referring to global warming, on which Turnbull agreed to stick with the policy Abbott had endorsed but which he would like to change. My view is that there is an opportunity for those candidates who are sceptics to say publicly that Australia may have to modify its climate change policy if Trump becomes US President, which is now a real possibility (one US opinion poll shows Trump equal with Clinton). While Trump tends to change his policies quite frequently, there is significant questioning in the US of the extent of the global warming threat (this extract from a Pew Survey in the US made just before the Paris Conference shows that only 20% of Republicans regard CChange as a “very serious” problem and no more than 50% support action to limit emissions).

Here in Australia there are significant numbers who are concerned about the adverse economic effects of measures limiting emissions, notably on electricity prices, which are already being taken to (supposedly) deal with the alleged threat even though Australia only emits about 1.3% of total world emissions. Even Turnbull has criticised as excessive proposals by Labor and the Greens to (in particular) more rapidly increase the use of renewable energies from wind and solar sources(which are two to three times more expensive than fossil fuels).

Coalition candidates in this election who have sceptical views of one degree or another do not need to indicate that they oppose limiting emissions. All they need to say is that they oppose proposals by Labor and the Greens because they judge it wise not to take further measures than the government has announced as Australia would need to review its policies if Trump becomes President. Such statements could set a different atmosphere on global warming policy after the Australian election.

Where to now?

There are major responses to PEFO and the Newspoll showing Labour as possible winners. The left-wing media (The Age, SMH, and ABC) is running the line that the deterioration in support of Turnbull is because he has failed to show the “real” Malcolm ie the progressive Malcolm. But writing in today’s Australian, Greg Sheridan argues that is “100 per cent wrong” (see Sheridan on Turnbull). He argues that Turnbull must change to be leader of the centre-right of the party and that, if he doesn’t, even a win would give him reduced authority and the strength of his authority would be “very problematic”. Put another way, the strength of the Coalition will be much reduced and Australia will face another period of poor governance and miniscule reform.

Another article in The Australian (by Troy Bramston) claims Turnbull is “not a natural politician” and that there is a disaffected section in the Liberals (one might add the Nationals) who won’t vote for the party or will temporarily switch their allegiance in the Senate. There is no doubt that a large number of Coalition supporters have this in mind if Turnbull continues on his present path. Bramston even canvasses possible leaders if the Coalition loses the election. He concludes that “a return to Abbott post-election cannot be ruled out” (see Bramston on Abbott).

As I went for my morning walk through the Botanic Gardens this morning a flock of twenty or so birds winged by and, after swirling around, settled on a damp piece of grass hiding the worms. And, as Milton Friedman once observed about bird flocks, this flock was led by a bird that knew where to find the worms. We are certainly missing that bird in this electioneering. Are there any in the flock who might persuade the leader where the best worms are?

What’s Missing from Turnbull

Des Moore — Tue, 17 May 2016 12:05:21 +0000

While the Morgan Poll is not generally regarded as being the most accurate, its latest result gives Labor a potential winning lead with a TPP of 52.5 to 47.5% and Queensland being the only State where the LNP is leading. This is the largest lead since Turnbull was elected leader of the Coalition and it also has a 30.5% vote for minority parties. While it is too early to be definitive, this suggests that the electorate is not attracted by either major party and that neither will have control over the Senate.

It also suggests that if anything Turnbull has lost potential Coalition supporters even since he obtained a double dissolution. As a hitherto consistent Liberal voter, experienced conservatist journalist Tom Switzer wrote in yesterdays’ Sydney Morning Herald (see Switzer on Turnbull) that:

“What’s different about Turnbull is that he has not actually done anything to explain his rapid downhill trajectory. He is no Paul Keating or Campbell Newman, legislating unpopular big-bang reforms in the national interest or spending cuts to rein in budget deficits as far as the eye can see. Contradicting himself almost every week, Turnbull has stood fast in indecision. He has been consistently indecisive”.

A prime example is his failure to espouse a definitive national security policy, as indicated by Greg Sheridan in the article below. His early naïve venture into arguing that the terrorist threat from extremist Islamists has nothing to do with religion has been only very slightly modified and unlike Abbott he has not sought to push for an increased role for Australian troops in Iraq/Syria. Further, although the attempt by five Australian to travel by boat to Syria offered an opportunity to announce a further tightening of counter-terrorist laws, he has had nothing of substance to say about the extent of the obvious extremism involved. While he is also reputed to have a “flexible” view on the treatment of refugees, it seems that it is only because the bipartisan policy agreed with Shorten is under attack within the Labor Party that he has emerged in public support of not allowing refugees to cross our borders by boats.

Other policy problems with Turnbull’s own party include workplace relations where he has made only limited use of the Heydon Royal Commission and, despite supporting the passage of tougher regulatory legislation on (mainly) the construction industry which allowed him to have a double dissolution, he has not taken advantage of the obvious need for major reform of the whole field of regulatory legislation covering workplace relations. His record here is bad in that when Opposition Leader he refused to vote against the Gillard government’s union-favoured legislation. A not dissimilar attitude exists on climate change, where having accepted the mainly National’s view that to become PM he should not change what Abbott had done, he has made only very limited criticism of the extraordinary proposals by Labor let alone the Greens. As I have previously mentioned, the idea that renewable energy should provide 50% of energy by 2030 should be attacked on practical grounds as well as being not required.

It remains to be seen whether further polling will force Turnbull to adopt policies more consistent with the views of the conservative wing of the Coalition. A further deterioration along the lines of the Morgan Poll could well lead to an internal revolt unless that is done. A lot could happen to Coalition policies in the next six weeks, particularly if the budgetary analysis by Treasury/Finance in ten days time reveals an opportunity for the Coalition to exploit the outlook provided by Labor’s future budgets and their composition (assuming sufficient data is provided by it). Instead of reviewing Backpacker’s licences (as announced today) Turnbull needs to announce that (for example) in government he will review (or better still) reduce the regulation of workplace relations ie as Switzer suggested, he needs some intended big-bang reforms.

Heydon Report – Ministerial Behaviour- A Hydrogen Bomb?- Saudi Arabi v Iran

Des Moore — Sat, 09 Jan 2016 00:42:35 +0000

The behaviour of the Turnbull Government continues to raise questions.

Workplace Relations

Immediately following the publication by Justice Heydon of the Royal Commission on Trade Union Governance and Corruption, on 30 December the government issued a press release by the joint team of Turnbull, Brandis and Cash acknowledging the assessment of “a ‘widespread’ and ‘deep seated’ culture of lawlessness among many union officials. It also said it would submit improved legislation on regulating the construction industry and (separately) on the governance of trade unions. It promised to give full and careful consideration to the recommendations in the final report and “announce a detailed response to the public in early 2016”.

Four out of the twelve parts of Volume 2 of the final report contained critical commentary on the behaviour of the CFMEU. One such commentary (on CFMEU Queensland) provides an idea of the tone, viz

“The mass destruction of documents by the CFMEU Queensland was as great a danger to the rule of law as any threat of violence on a building site, any illegal strike, any corrupt payment, any blatant non-compliance with legal standards”.

Potential criminal offences were listed and 10 CFMEU officials or former officials were listed as referrals for possible prosecution.

Today’s Australian reports that, notwithstanding the widespread corruption and criminality revealed in the report, Employment Minister Michaelia Cash had indicated that the government would “not move to deregister the CFMEU but will instead seek to transform the ‘perverse culture’ and ‘mindset’ across the construction industry” (see Heydon – CFMEU). It appears that, as the report did not recommend deregistering, the government has decided there should be no deregistration come what may. The report itself offer some support for this viz “Cancelling the registration of the whole union may have a disproportionate effect on union members who have not been involved in illegal activity”.

But this seems an odd comment for the government to accept as a basis for a decision on the treatment of the CFMEU: would investors in a project be allowed to keep their investment if they were not involved in the criminal activity which caused the project to collapse? The large number of CFMEU members who have participated in marches may have included some who have not been involved in illegal activity but they certainly supported it and would have been well aware of the lawless action being taken by their union.

More importantly, the decision and other comments by Minister Cash, doubtless with guidance from Turnbull, in this article seem to be sending the “soft” signal before the detailed response to the report is made. She is wrong, for example, to imply that lawless action is confined to the construction industry and that legislative reform of the regulatory arrangements in that industry should be the principal aim.

My letter published in the AFR (see Heydon Report – IPE Reaction) points out (in the unexpurgated version) that “Australia’s workplace relations problems derive from the collective bargaining arrangements established under the Gillard government. These arrangements have provided unions with a quasi-monopoly position that allows them and those directly involved in the bargaining of deals to garner benefits to the disadvantage of others and the wider community. In short, the regulatory system itself creates a situation which allows exploitation and the kind of offences identified in Heydon”. The article published in the AFR by HR Nicholls Society President Bisits also includes a suggestion to trial “alternatives, free of the Fair Work Commission, as long advocated by Senator Bob Day”.

Ministerial Behaviour

Turnbull’s handling of the misbehaviour of Briggs and Dutton continues to attract criticism and questions as to his judgement as a leader. In this article (see Minsterial Behaviour above) a genuine expert on gender relations, Bettina Arndt, argues “There’s a pattern emerging here as the Prime Minister seems determined to go overboard on such issues — stressing the seriousness of the “inappropriate behaviour” and making endless motherhood statements about “respect for women”. …Many women were concerned by Turnbull’s first major policy announcement on domestic violence, which whitewashed this complex issue by presenting men as the only villains… Politicians who play gender politics risk antagonising not only men fed up with the constant male-bashing but also women determined not to live their lives as victims, women who want responsibility for aggressive, offensive behaviour to be sheeted home to the true perpetrators — male or female”.

A Hydrogen Bomb?

There appears to be a serious doubt that North Korea has tested a hydrogen bomb, which is much more destructive than a nuclear one. But the fact that this is the fourth such test, and that NK has simply ignored the sanctions (partly because China has helped it do so), raises the same question as arises with Islamic State and other extremist Islamist groups. How long do western countries allow extremist groups, of which NK is clearly one, operate with weaponry that has the capacity to be massively destructive? At present the extremist Islamic groups do not appear to have such weaponry, and NK’s stock is small. But …

Saudi Arabia v Iran

The 43 executions by Saudi Arabia has produced widespread protests against that country even though it appears that most of those executed were members of Al Qaeda ie the Saudis can claim that this was (mainly) an anti-terrorist action. That it also involved the execution of a Shia living in SA, but protesting against the royalty running SA, has brought Shia Iran into the protesters. But Iran is reported as having executed last year many more of its citizens than SA did of its. It is difficult to find sympathy with either side.