Institute for Private Enterprise » Des Moore

Robin Hood & Costs of Inaction

Des Moore — Wed, 08 May 2019 11:26:36 +0000

As Election Time Approaches Shorten Proposes Increasingly Unrealistic Policies

Part of my upbringing involved learning nursery rhymes one of which covered the life of Robin Hood. In those days Robin Hood was portrayed, at least to me, as an outlaw who lived in the forest and whose income came either from the proceeds of his attacks on the local town or from those passing through the forest. But he was portrayed as a hero because he (supposedly) gave the proceeds to the poor. It was only later that I realized that RH’s “fair go” came from failing to allow the local sheriff from observing the law and protecting those who maintained it.

In her article today Janet Albrechsten portrays Shorten as like a Robin Hood who is promising a plethora of “fair go’s” if he receives the necessary votes on May 18. But use of that term inevitably creates problems. Albrechtsen also makes the important point that his historical Labor approach to government is not in Labor’s tradition as represented by Hawke and Keating but more like Whitlam’s. My (considerable) experience of Whitlam is that, while he is still regarded as Labor’s icon, under his regime it was a complete shambles. That led to him only winning an internal challenge from Jim Cairns by one vote and forced him to make Cairns the Treasurer of Australia. But economic management went adrift.

If Shorten wins on May 18, it is likely that his government’s regime would operate similarly to Whitlam’s, although it would be difficult to be as bad. Shorten would likely be followed fairly quickly by left Anthony Albanese becoming the leader (in the internal election in 2013, which included party members as well as members of Parliament, Albanese got more votes than Shorten but not have enough under this system to obtain the Opposition leadership). The large number of policy changes under Shorten, would cause internal disruption even within the Labor party and would be likely to force him out. It would almost certainly make economic management much harder and could see a recession.

Albrechtsen draws attention to policies which are focused on distributional issues and which would cause concern within the party as well as outside it. This would be particularly so in regard to industrial relations, which PM Morrison has dodged in the debates between him and Shorten. By “industrial relations” I include the latter’s policies on relativities between sections of the workforce , such as child care. In my previous Commentary I suggested that Morrison needed to attack the large economic deficiencies in many of these items, including the overall effect on the economy. But while he handled the specifics well in tonight’s debate, he again failed to drive home the inadequacies for the economy.

One of these inadequacies is Shorten’s attempt to dodge the adverse economic effects of his climate policy. His refusal to acknowledge that his policy would have no such effect without taking account of the (unstated) costs of inaction left open a wide area of exposure of which Morrison did not make use. My letter published in today’s Australian obviously (see below) did not reach Morrison or his advisers.

Climate plan costs unjustified

Letter published By The Australian,12:00AM May 8, 2019

You report that, when asked on ABC’s Q&A program about the costs of his environmental policies, Opposition Leader Bill Shorten told host Tony Jones that “you can’t have a debate about climate change without talking about the costs of inaction”.

Well, let’s have a debate about the costs of inaction.

Perhaps the best expert asked to estimate the costs of inaction was Dr Ross Garnaut, who published two long reports for the government on the dangerous warming threat. His conclusion was that the most likely cost of inaction was that dangerous warming would occur in the next century.

One wonders whether Shorten agrees with Garnaut’s best estimate and, if not, when he predicts dangerous warming would start. It is dumb for the Opposition leader to rely on a Garnaut-like estimate but at the same time justify aggressive costs being incurred before 2030 with his economically damaging proposal to reduce emissions by 45 per cent.

Des Moore, South Yarra

Uncertainty in Labor’s Policies; Islamic Threat

Des Moore — Thu, 25 Apr 2019 09:48:13 +0000

What Are Labor’s Policies?

Today’s Australian has published considerable material on the failure of Labor to clearly enunciate its policies. I have previously drawn particular attention to Labor’s failure to publish aggregates alternative to those in the Coalition’s budget and to costings for the economy of its global warming policy. This defect remains.

But the recent emergence of many questions about Labor’s policies on specific policy issues has opened the way for much wider challenges to be made. The opening up of this area should also allow Morrison to reduce his announcements of funding small projects, which appear too much as vote buying, and focus more on attacking Shorten. It has also led The Australian to inter alia run the main letters column today with the heading Uncertainty Surrounds Labor’s Announced Policies. I was fortunate in having my epistle included as “lead letter” – as set out below.

Uncertainty Surrounds Labor’s Announced Policies

Letter Published in The Australian, April 25, 2019 (Bits in square brackets omitted by Ed).

Those closely following the election had been expecting that after Easter Labor would publish proposed budget aggregates and their costings – just as the Coalition did in its budget. No such luck. What we are getting are reports that material distributed by some Labor candidates omit to mention Shorten is their leader.

This may reflect the failure of Labor to decide [internally] on detailing the reasons for some of its decisions. Take the decision to require half of new vehicles to be electric by 2030.

It now appears that the recording of high electric sales in Norway [(much tinier than Australia)] may be due [importantly] to a near 100 per cent sales tax there on non-electric cars. Would Labor provide that “incentive” here?

Then there is the proposed Adani coal mine, for which the Coalition has given approval to all legal federal requirements.

But despite having said that he is being “governed by the law”, Shorten is not prepared to accept such approvals. Instead, he says this proposed investment by an Indian company is a matter for the Queensland government. Does this mean that Labor would cease to have the federal government determine foreign investment policy?

The foregoing are not the only Labor policy issues which are uncertain. Decision time has surely arrived.

Des Moore, South Yarra, Vic

I also include in this Commentary some very brief references to recent commentaries on some other specific issues, viz

After humming and hawing Shorten now says he would not review environmental decisions made by the Coalition. Yet at the same time Labor would not sign the “pledge” by the largest union, the CFMEU, tosupport the coalmining industry and, in implied support for the proposed Adani mine, for “coalmining developments that meet regulatory requirements”. Contrary to Shorten, some Labor candidates say they would leave the question of reviews open (see Shorten Says No Adani Review);
Shorten leaves open the possibility of tax reductions for those on high incomes (see this article);
Wong (Shadow Minister for Foreign Affairs) refuses to answer questions on the Australia-US alliance, Taiwan and refugees (see this article);
GetUp has removed its extraordinary ad denying (in effect) that Abbott is a surf life saver and, while agreeing with the removal, Abbott’s main challenger (Stegall) amazingly denies she has any connection with GetUp (see this article);
How can Shorten’s promise to alleviate the cost of living be met with the latest zero increase in the cost (see this article)?

The other two attachments reflect, firstly, the differences of view about the role of Muslims in the Sri Lankan bombings and the over 300 killings . As Andrew Bolt points out, it has exposed a general refusal of the political left to openly “admit” that one Islamic aim is to eliminate Christians, which is now certain in the case of the Sri Lankan killings. Of particular interest is the possibility that the SK killings are a revenge for the killings of Muslims in Christchurch New Zealand. Bolt’s analysis is revealing in identifying prominent politicians, including Obama and Hilary Clinton, who have refused to even acknowledge that the death of Christians has been the aim (see Bolt on Denials of Muslims in Sri Lankan).

The second attachment outlines the extent of persecution of Christians and the widespread failure of believers in Christianity to do much about it. The author is Bill Muelenberg who is an expert in Jihadism and who worked in the Institute of Public Affairs when I was also there. He points out that “there have been 34,891 deadly Islamic terror attacks since 9/11. That occurred 6,431 days ago. So we are now averaging five and a half such attacks each day since then. It is getting worse”(see attached Sri Lanka, Jihadist Massacres, and Western Denial).

In an earlier Commentary I have also written about Mark Durie who has written a new book, THE QUR’AN AND ITS BIBLICAL REFLEXES, which convincingly argues that the Koran requires Muslims to kill non-Muslims.

Election Campaign Still Not Informing Voters

Des Moore — Tue, 16 Apr 2019 22:18:41 +0000

I start by mentioning that my daughter, Lisa, is re-visiting us in Australia after performing in America (where she presently lives) to give piano recitals here. She has recently played on several occasions in New York and has had excellent reviews in the NY Times. Her first recital here on this occasion is at the Melbourne Recital Centre next Wednesday at 6pm (the program is here and tickets are available – phone 9699 3333).

Election Campaign A Scatter: But Started Favouring Morrison

Yesterday’s electioneering has started across scattered issues, with both sides seemingly stuck on announcing every day small amounts of new money for initiatives regarding which the great majority know little about (other of course than to “buy votes”). The Coalition needs to focus more on the economic picture which, Morrison says, is what the Coalition is all about. Rather surprisingly, Shorten has attracted media criticism while Morrison has come off largely scot free. Of particular interest was that the leftish Australian Financial Review drew considerable attention to Shorten’s problems. It is encouraging that this section of the media has (almost) given a bipartisan view/comment.

The heading of the AFR article “Shorten’s $34b Super Gaffe” clearly does not help Shorten. It relates partly to Shorten’s response at a press conference that “We have no plans to increase taxes on superannuation … (or) to introduce any new taxes on superannuation.” In fact, it appears that there is a Labor policy which would raise $37bn over a decade from the super industry. As the article says, “Labor has announced four superannuation policies ahead of the election campaign, which the Coalition estimates would see a $34 billion increase in tax over a decade, hitting hundreds of thousands of workers” ( for details see article). Excuses have been made by Labor spokesmen and Shorten now seems to be saying that he meant no additional taxes are intended.

In what the article describes as an “awkward press conference”, Shorten also “repeatedly declined to answer questions about the impact the opposition’s carbon emissions reduction policies would have on the economy”. The Australian also reports on this press conference (see Shorten in Testy Clash with Reporter) and, if more journalists were prepared to follow suit, voters might get a reasonably accurate picture of what both sides are proposing. In an interview tonight Shorten did say that he does not agree with the model produced by Dr Fisher (that was reported in an earlier Commentary now on my web). But Shorten did not offer any estimate other than to say that the economy will grow by a particular amount, which interviewer Dr Stone claimed would mean a slower rate.

But changes need to go further than this. As I have argued in earlier Commentary, an attempt should be made by the media and other organizations to highlight the failure of Labor to produce an alternative Budget to the 2019/20 to 2022-23 one recently presented to Parliament by the Coalition. This is “standard practice” and should concentrate on what might happen in the next four years, not the next ten for which any figuring is pretty meaningless (in fact, budgets normally describe any figures after the next two years as “projections”, not estimates).

Today’s Australian published my letter (see below) expressing concern that Labor has not done the same as the Coalition and arguing that at least Bowen should ask the Parliamentary Budget Office (with whom Bowen appears to have been in close contact and which body has (properly) advised Bowen) to produce a Labor budget.

The absence of any such alternative budget by Labor has led to a suggestion made on Sky News tonight by Dr Judith Sloan and Dr Andrew Stone that Labor has gone into the election without being adequately prepared and is now in a catch up phase. As the AFR article says, “Labor was forced on the backfoot over revelations it had deleted dozens of paragraphs of details over its negative gearing and capital gains tax policies from its website”. Shorten should certainly be pressured by the media and of course by the Coalition to produce a full explanation of its policies as well as an alternative budget.

Bowen needs to back up his economics policies with proper costings

Letter Published by The Australian, April 17, 2019 (Bit in square brackets deleted by Ed).

Your survey of the initial election promises by the two main parties (“Voter disillusionment fed by dishonesty in politics”, 16/4) raises concerns about their effect on total budget spending and revenue [and whether some promises can actually be implemented]. The Coalition has already provided an estimated budget for the next four years, including tiny surpluses, and this should be updated during the campaign if even further additional spending is announced.

There is particular concern that Labor is not providing any alternative budget except to claim its surpluses will be larger than the Coalition’s. But how can we voters assess that claim without also having estimates for spending and revenue.

True, estimates by Treasury made before the campaign started show that the level of taxation under Labor would reach 26 per cent of GDP whereas the Coalition has confirmed it would not rise beyond 23.9 per cent.

Surprisingly, Labor Treasurer Chris Bowen has questioned Treasury estimates but without providing any himself. This despite the public’s legitimate interest and his access to the Parliamentary Budget Office, which he should now ask to publish its assessment of Labor’s costings as soon as possible.

Des Moore, former deputy secretary, Treasury, South Yarra.

RBA Publishes Surprise Pre-election Analysis Of CC

Des Moore — Thu, 14 Mar 2019 10:42:54 +0000

Is RBA Preparing for a Labor Government

I was surprised yesterday to see a report on a speech made by the RBA’s Dep Gov, Guy Debelle, on climate change and the possible implications for the economy and monetary policy (see RBA Dep Gov Says CC Has Trend Effects). I judged that, with just a few weeks until the election, it would be wrong to publish an analysis on how to treat changes in climate when that subject is probably the most controversial between the political parties. Statements by government bodies which can influence attitudes, add to the controversy and possibly favour one party, should not be made at this time. This generally accepted rule applies to the Reserve Bank notwithstanding its claim to be “independent” and the more so as Debelle claims climate change influences monetary policy.

I wrote a letter to The Australian pointing out the foregoing and adding that “Debelle enhances the problem of analysis by claiming that “we need to think in terms of trend rather than cycles in the weather” and “to reassess the frequency of climate events”. Yet he provides no evidence to justify this claim and he omits an important conclusion by the IPCC that cyclones do not exhibit a trend, that is they occur but infrequently. Analysis by Australian experts, not quoted, suggest the same as regards droughts. I call on the Governor of the RBA to state that his deputy’s speech does not necessarily reflect the bank’s official view” (see Climate Change). My letter was not published today.

In addition to having potentially improper political influences, it is concerning that this speech by Debelle was made at a forum run by the Centre For Policy Development (CPD) in Sydney. This organisation was started in 2007 and its stated objective is “long-term policy development” (as distinct from what it describes as “short term fixes and political gains”). While such an objective is obviously acceptable , and the CPD claims to be “independent and non-partisan”, it was started by John Menadue who was private secretary to Gough Whitlam for 7 years from 1960 to 1967. Although Menadue also later worked at News Ltd and for Malcolm Fraser, his public comments today remain strongly left-inclined (he publishes a public affairs blogsite). Menadue also continues as a “Fellow” of CPD, which also has several Fellows with stated Climate Change “expertise” and its publications on that subject adopt the dangerous warming thesis. The current Board Chair is Terry Moran who was appointed Secretary of PM&C by Kevin Rudd (and continued there under Julia Gillard) from March 2008 to September 2011 (Gillard continued as PM until 2013). I have not been able to establish whether it has government funding but it would not be surprising if it has. It names Julian Burnside and Fred Chaney as its Patrons.

In short, it is clear the CPD is Labor-inclined and supportive of the alleged threat from dangerous warming. Also, Labor supporters naturally recognise the importance of having senior Labor-inclined public servants. While Tony Abbott appointed a “conservative” head of PM &C (Michael Thawley), he resigned soon after Turnbull became PM and we now have his appointee, Martin Parkinson, as head of PM&C (Parkinson was the inaugural head of the Climate Change Department). It seems likely that Parkinson will remain head of PM&C if Labor wins the election. Debelle’s speech might have had this in mind.

Debelle’s Analysis

I judge there are serious questions about the analysis by Debelle in his speech (see Debelle on Climate Change). The essence of his analysis is that changes in climate not only affect the economy around the time they occur but they have trends and therefore have effects which continue over time. This means, he says, we need to reassess how to handle such changes both generally and in regard to monetary policy. Specifically, Debelle says the following on page 2:

“We need to think in terms of trend rather than cycles in the weather. Droughts have generally been regarded (at least economically) as cyclical events that recur every so often. In contrast, climate change is a trend change. The impact of a trend is ongoing, whereas a cycle is temporary.

We need to reassess the frequency of climate events. In addition, we need to reassess our assumptions about the severity and longevity of the climatic events. For example, the insurance industry has recognised that the frequency and severity of tropical cyclones (and hurricanes in the Northern Hemisphere) has changed. This has caused the insurance sector to reprice how they insure (and re-insure) against such events.

We need to think about how the economy is currently adapting and how it will adapt both to the trend change in climate and the transition required to contain climate change. The time-frame for both the impact of climate change and the adaptation of the economy to it is very pertinent here. The transition path to a less carbon-intensive world is clearly quite different depending on whether it is managed as a gradual process or is abrupt. The trend changes aren’t likely to be smooth. There is likely to be volatility around the trend, with the potential for damaging outcomes from spikes above the trend.

Both the physical impact of climate change and the transition are likely to have first-order economic effects.

Debelle then devotes a considerable proportion of the rest of his lecture to considering examples of possible climate occurrences which may have what he classifies as trend effects. He refers in particular to reports by the IPCC and Australia’s BOM and CSIRO, viz

“The United Nations’ Intergovernmental Panel on Climate Change (IPCC) report documents that 1 degree of warming has already occurred from pre-industrial levels as a result of human activities.[2] It provides strong evidence that another half degree of warming will occur in the next 10 to 30 years if warming continues at the current rate. That is the average outcome, with some areas experiencing greater warming.

There is also likely to be significant volatility around that outcome, with an increase in the frequency of extreme temperatures. This volatility is highlighted in the first graph in the recent Bureau of Meteorology (BoM) and CSIRO report, State of the Climate. The report states that ‘Australia’s climate has warmed by just over 1 degree C since 1910, leading to an increase in the frequency of extreme heat events’, and expects further warming over the next decade.[3] These extreme events may well have a disproportionately large physical impact.

There is also a greater possibility of compound events, where two (or more) climatic events combine to produce an outcome that is worse than the effect of one of them occurring individually. Combined with the increased volatility, this increases the likelihood of non-linear impacts on the economy.

Both the IPCC and the BoM/CSIRO reports highlight the changed environment that the economy will need to adapt to. They also provide evidence on what change is predetermined and what can be affected by actions to strengthen the global response to the threat of climate change.

These analyses of climate and its effects from changes by Debelle are highly controversial and are subject to extensive queries. For example, while there is general agreement that temperatures are higher than they were in pre-industrial levels, there has been at least one considerable period (from the late 1940s to the mid 1970s) when official temperatures used by the IPCC fell at the same time as carbon emissions were increasing. This suggests there is no trend in temperatures and that there is no evidence suggesting that predetermination of temperatures can be effective from a policy viewpoint.

Further, future periods predicting warming need to be examined to see whether some may be due to unpredictable natural events (as has sometimes been the case) or to human activity involving the production of greenhouse gases from usage of fossil fuels. Debelle refers to models in his speech but he makes no mention of the failure of the existing predictive models to even get close to actual temperatures. More questions can also be raised about the assertions by both the IPCC and BOM quoted by Debelle, including in regard to the accuracy of temperature measurements. In effect, Debelle is simply accepting the view of dangerous warmists without examining the detail of what happened. and his thesis of trends does not stand up.

Importantly, Debelle also provides no explanation of the large benefits from the considerable agricultural and forest growth having occurred under existing policies. In other words, while we and others have had droughts, these have been more than offset by the growth in output from agriculture and forestry.

Debelle’s thesis of trends does not stand up to close examination.

Coalition Must Take Now Risks with Policies & leaders

Des Moore — Tue, 12 Mar 2019 07:32:43 +0000

Time to Take Risks

In yesterday’s Commentary I argued that, given the latest Newspoll (and for policy reasons too), the Coalition should “change courses” asap. I also sent a letter to OZ (unpublished) advocating the cancellation of Turnbull’s membership of the Liberal Party. My advocacies are based on my perspective that, although risky, the Coalition needs to take risks now if it is to have any chance of winning the election and that an improved set of policies would in any event provide a better starting point in Opposition to a Labor government.

It was encouraging to receive a number of responses in basic agreement with this approach. And in his article yesterday’s Herald Sun (see Bolt on Abbott as Possible Leader), and again in his presentation last night on Sky News, Andrew Bolt rejected the idea of a new leader who is “a near-unknown that no one hates” because “such risk-aversion rarely ends well”. Instead, he suggests that Abbott would be best and that “helping him will mean that the Liberals after the election will again be overwhelmingly conservative, given how many of the Left are resigning or likely to lose”.

Of course, in principle nobody wants yet another change in leadership. But while Morrison has tried hard, the polling and such limited policy changes as he has offered, are clearly insufficient to swing voters. This is particularly the case with the policy that will be most important in the period prior to the election – energy. Yet Morrison has just rejected the idea of withdrawing from the Paris Agreement and has ignored the adverse economic effects from the retention of the Coalition’s target to reduce emissions by 26-28 per cent by 2030. Except for possible initial “voluntary” falls, the promised lower electricity prices would only occur if dictated by Federal Energy Minister Taylor.

However, in today’s Herald Sun, Terry McCrann points out, first, that while “the government’s proposed 26-28 per cent cuts are anything but timid, (they) are among the biggest cuts proposed by any country anywhere in the world”. And, second, that Labor’s proposed cuts in emissions of 45 per cent are equivalent to 55 per cent in per capita terms, which would be “entirely and exactly pointless. Those cuts can’t and won’t move the ‘Earth’s temperature’ even by one-ten-thousandth of a degree” (see Labor’s 45% Emissions Cuts Equal 55% per Cap: McCrann).

This analysis could provide a basis for a leader of the Coalition to at least moderate its emissions target and tell voters that Labor’s energy policy would cause much greater economic damage than the Coalition’s. Abbott as a leader would be well placed to convey that to voters if the Liberal’s were prepared to take that risk.

Monetary Policy

These days not many observers of the politico/eco scene take a close interest in monetary policy and many look to central banks to just keep them as low as possible without considering possible adverse economic effects. But it is important to recognise that “low” interest rates may have such adverse effects, including over a period of time. On 11 March I had a letter published in the AFR pointing out that the household saving ratio fell from 10% in 2008-09 to just over 5% today and this has been reflected in an increase in household debt and may account for “an increased tendency to reduce spending rates on consumption and housing. One possible explanation is that monetary policy allowed interest rates at relatively low levels for too long, resulting in higher borrowings and excessive debt levels” (see letter as published below).

In short, the recent slow-down in economic growth may be partly reflecting a pause in spending as household debt reaches levels which consumers and small businesses judge to be too high in present “risky” political conditions. Almost coincidentally, it was reported that RBA experts found that, ”all else being equal, a 1 per cent drop in interest rates would, over the long run, boost house prices by 17 per cent. The cash rate has been slashed from 4.75 per cent throughout most of 2011 to its current record-low level of 1.5 per cent as the central bank attempted to offset the end of the mining boom and encourage activity in the housing and consumption sector” (see RBA Analysis Suggests “Low” Interest Rates Stimulate Housing Construction).

In other words, the RBA may have allowed interest rates to go down too far or to go too low for too long, resulting, first, in excessive house prices and debt and, second, that this may have contributed to the current slow-down in GDP. If this is correct it may mean that, contrary to some analysts, there should not be any further reduction in interest rates – unless of course an unlikely recession occurs.

Interestingly, the US Federal Reserve has made four increases in interest rates whereas our RBA Head, Phillip Lowe, after threatening increases, has backed off. Of course, it would not be a good time politically for Lowe to increase rates even if he felt the inclination: from that viewpoint better to stay at present rates. Note that the head of the US Fed, Jerome Powell, has been under pressure from Trump to “keep rates low” with a view to help maintaining the strong growth in the US. But in what has been described as an “unusual” interview in public, Powell has asserted his independence (see Fed Chair Makes Unusual Interview). Lowe would be well advised to make his independence clear when he reports RBA monthly meetings to Treasurer Frydenberg.

Rate Cut Wrong in an Era of High Debt
(Letter by Des Moore published in AFR, 11 March 2019)

Should Coalition Change Any Policies?

Des Moore — Sun, 10 Mar 2019 21:00:56 +0000

The latest Newspoll shows that, after three successive results on 47/53 TPPs, the Coalition has now fallen to 46/54. Even though Morrison’s personal approval ratings improved a single point to 43 per cent so too did Shorten’s and, while Morrison’s disapproval numbers fell from 48 per cent to 45 per cent, Shorten’s also fell two points. These ratings gaps have not altered to any significant extent over the last fortnight and, although they still favour Morrison, there is no real sign that the Coalition can close the overall gap on TPPs by the May election (see Coalition’s Newspoll Down To 46/54).

What Now?

“The Australian’s National Affairs editor argues that “Scott Morrison is approaching the point of no return. He either sticks with the current political strategy in the hope it will eventually start to bite, or he changes course before it’s too late. Both options are loaded with risk. The polls suggest that whatever the Coalition is doing, it is not working. But to restart the government agenda now would be ridiculous. There is no other narrative for Morrison. The economy and national security are what Coalition governments do. Cooler heads within government will be advising colleagues that the real driver of the polling numbers are the constant, and one would have to assume tactical, interventions. (see Morrison Near Point of No Return)

My belief is that the Coalition should in fact “change courses” asap. Even if it is too late now to win an election, it should aim to provide a better base from which to counter Labor in office. Such changes should include

A statement that policies operated during Turnbull’s reign will hitherto be revised to better reflect the Liberal Party’s small government and competition market beliefs. That should be accompanied by indicating that moves will be made to expel Turnbull from leadership of the Liberal party (see Turnbull).
Morrison should offer to subject himself to another election contest and indicate that he would support the appointment of Abbott if he won such a contest.
An indication that policy changes include changes in climate change policy involving a withdrawal from the Paris agreement, a major reduction in the emissions reductions target, a major lowering of the renewable target, the elimination of related subsidies, no increase in refugees from the already high level, a substantive reduction in immigration from the present rate, a closing of any gaps that allow asylum seekers to obtain unwarranted residence, and a reduction in government expenditure over the next three years to the level reached in the last year of the Howard government (to 23.% of GDP from the present rate of about 24.5%) to be set out in the April budget, with a reduction in the income levels at which social welfare is provided.

More Ministers Quit; Treasury Officer’s Life

Des Moore — Sun, 03 Mar 2019 22:31:36 +0000

Can Morrison Cope with Two More Cabinet Departures

Last Friday’s Commentary suggested that the latest Coalition’s Newspoll of 47/53 for the third successive time indicated that the Morrison government was still in serious trouble. I suggested that the additional policy decisions announced by Morrison on climate policy would be unlikely to help close the gap.

These measures included acceptance of the Paris agreement and an expanded use of renewable through the establishment of the very uneconomic Snowy2.0 and the usage of “big batteries”. Energy Minister Taylor also claimed the new measures would cut energy bills while lowering emissions but this failed to take account of the additional costs from using the Snowy or from back-ups needed when other renewable are not available. I noted that it seemed unlikely that the Energy Minister would be able to reduce electricity prices except through the adoption of a regulatory system which legally limited the maximum price able to be charged by retailers.

While the Cabinet elevation of Senator Reynolds to Defence Minister (from Assistant Minister for Home Affairs) means the Morrison cabinet now has the greatest representation of women in the senior ministry of any government, Pyne will stay as head of that ministry until after the election, when he will not stand for return to Parliament. Mr Morrison said of Senator Reynolds: “When you can call up a brigadier, in the form of Linda Reynolds, to take on the role of defence minister, it shows we have a lot of talent on our bench to draw from. Linda will be the second female to serve in a cabinet-ranked defence portfolio. She will bring the number of female members in the cabinet to seven. “This is the highest number of any cabinet since federation.” More importantly, in the interviews she has conducted since her appointment, Reynolds has shown she should have become a cabinet minister some time ago.

The recent loss of several Coalition Ministers, including (until the election) of Pyne as a senior Minister and the immediate resignation of Defence Industry Minister Ciobo, has led some to question whether this might not allow Morrison greater freedom to run the “ship” and to have the Coalition become a genuine “conservative” party with a reduced influence from so-called moderates. Of particular importance in this regard is the end of Pyne, who is reported as once saying he could have stood for Labor, and ran as a Liberal only because he lived in a Liberal seat (see Norington’s Analysis of Pyne or Realities of Politics). With both Turnbull and Pyne departing, the potential for a move of the Coalition to conservatism in greatly enhanced.

In today’s Herald Sun, commentators Andrew Bolt and Rita Panahi both argue that this situation may help the electoral position of the Coalition. Bolt argues that

“Malcolm Turnbull gone, Julie Bishop and Kelly O’Dwyer going, and now Christopher Pyne, too. Know what some Liberals call that? A good start. The election will do the rest. Check Sportsbet’s seat-by-seat odds. They tip that from the ruins of this Morrison Government after the May election will crawl a Liberal party where conservatives will again have the numbers and most of the talent. The Liberal Left has destroyed not just the party but itself, and that’s why some of its leaders are now deserting — and slamming the door in fury” (see attached Coalition May Become Conservative).

Of course, there is a lot of water to pass under the bridge before the election and Bolt acknowledges that Morrison himself is “ideologically flighty”. But Morrison has a much improved outlook if he can present himself as a leader who believes in the Menzian “small” government approach and who will spend more time attacking the policies being canvassed by Shorten.

Responses to Assessment of Treasury Life

During the time I was in Treasury (for 27 years until 1987) I naturally had several acquaintances with David Morgan who joined in 1980 at age 33 and left in 1990 to join Westpac. He did not work for me during that time but I became familiar with his economic and political views, although unlike some others I was not invited to his marriage to a Labor minister. His decision to have a book written about his life, titled David Morgan: An Extraordinary Life by an Oliver Brown and published at age 72, reflected his somewhat aggressive approach to letting the world know of his views. On 2-3 March the AFR published an article by Brown who says that at Westpac “he was given a brutal assessment of his management skills”.

The Australian’s Business journalist Richard Gluyas has also written about Morgan’s experiences and his article of 2-3 March is attached (see Gluyas on Morgan). That article however does not appear to provide a completely accurate picture of the then Secretary to the Treasury, John Stone. This has resulted in letters published by each of Stone and myself below.

Ros Kelly warning ‘did not happen’

Letters Published in The Australian, John Stone, Des Moore, 12:00AM March 4, 2019

8 Comments

I refer to Richard Gluyas’s Business Review article (“How a banker’s life lessons were forged”, 2-3/3) regarding David Morgan’s biography. In the article Morgan is quoted from the book as saying: “Over drinks one Friday night in Canberra, before (Morgan) married (Ros) Kelly in 1983, the arch-conservative then-Treasury secretary John Stone scowled at Morgan: ‘If you marry that woman, you will never be secretary to the Treasury’.” That is untrue.

I would never have said such a thing about Ros Kelly, nor would I have thought of Morgan (then a relatively junior officer) as a possible future secretary to the Treasury. My subsequent invitation (which I accepted) to attend their wedding renders the allegation even more bizarre.

I have known Morgan for 47 years. His intellectual abilities have never been in doubt. It was for an entirely different reason, when he asked some time ago that the author of his then planned biography might speak to me, that I declined.

John Stone, Lane Cove, NSW

In his commentary on David Morgan’s book on his own life, Richard Gluyas writes that “after an early career at the International Monetary Fund”, Morgan switched over to Treasury where he formed a tight bond with fellow thinkers who allegedly “marginalised” Treasury secretary John Stone, who “then exited Treasury”.

I have not read this book but am puzzled by this assertion.

As a deputy secretary Treasury at the time Stone resigned in 1984, I was in close contact with him at that time and I do not recall him attributing his resignation to any pressure from within Treasury. To the contrary.

Regarding the exchange rate float in 1983, Paul Keating’s concerns later of the danger of us becoming a banana republic suggest Stone correctly advised implementing other regulatory and policy changes with the float.

Des Moore, South Yarra, Vic

“Far Right” Views Assessed; France Crisis

Des Moore — Wed, 09 Jan 2019 11:50:31 +0000

Senator Anning Stirs the Migrant Pot But Morrison Misses Opportunity

It is not clear whether or not Senator Anning’s attendance at a small St Kilda protest rally was intended to stir public discussion and comments from Morrison and Shorten. But this has happened and some points made in my Commentary on Monday have also been reflected in that discussion. Importantly, The Australian has published a number of letters (see OZ Letters on “Far-Right”), including my own as what is sometimes called the lead letter, viz

Not just extreme Right who have migrant concerns

The Australian, Letters, 12:00AM January 9, 2019 (Ed deleted bits in square brackets)

Your coverage of the [small]protest rally on St Kilda beach attended by Queensland senator Fraser Anning draws attention to his unverified relationship with Vietnamese traders who had been disrupted by youths of African origin [and] who had also caused disruption at the very same beach (”Anning not with us: Vietnamese”, 8/1). [Anning acquired his Senate seat through the back door and is no longer a member of a party. And while he is claiming his expenses, it seems that is legitimate]

[True,] Anning is said to have a “far Right” view but his expressed concern about immigrants having Islamic characteristics or having African origin may not be confined to those with a “far Right” view. As indicated by the recent debate on immigration, most Australians recognise there is limited absorption capacity both in terms of numbers and characteristics which extend beyond our Euro-Judeo culture.

The UK is attempting to stop illegal immigration across the English channel from many who see it as an El Dorado. And while France is still officially welcoming migrants, surveys reveal a majority of the French population want immigration halted or regulated drastically. That President Macron’s polling has fallen to only 18 per cent, and that changes are favoured to the hundreds of no-go zones under the control of imams and Muslim gangs, indicates the importance of having an acceptable population mix from immigrants.

Des Moore, South Yarra, Vic

My main intention was to refer to the possible implications of one of Anning’s reported observations at the rally (“I would not bring any more Muslims or Sudanese in the country. I would put a ban on that. And if any of them committed a crime, I would be shipping them home to where they came from”). As is evident from the heading made by The Australian to its main published letters the key point is that it is “Not just extreme Right who have migrant concerns”.

My letter, and Monday’s Commentary, sought to draw attention to other countries which have “migrant concerns”, notably France now led by President Macron with polling of only 18 percent and a “far-right” Marie le Pen hot on his trail. The latest report on the French crisis indicates that the French PM has taken over from Macron the handling of the “yellow vesters” and some arrests are being made (see French PM To Respond To Vesters). But it appears that France has become ungovernable unless imprisonment action is taken against violent groups, who might even include some in the Antifa movement whose members here took part in our St Kilda rally (see PS below). Other European countries have migrant concerns as indeed does the United States, with Trump about to make a major statement in support of constructing a wall to help control migrants entering from Mexico.

But most remarkable is the failure of Morrison to use the public discussion/debate on Anning and the rally to recognise that Australia itself has “migrant concerns”. In Monday’s Commentary of 7 January I noted that both Morrison and Shorten deemed it necessary to criticise Anning’s attendance at the rally and quoted Morrison as saying that “Australians are not anti-migrant nor racist. Genuine concerns held by fair minded Australians about immigration levels, border protection or law and order should not be used as a cover or be hijacked to push hateful and ugly racist agendas.”“As I did yesterday, I’ll always be prepared to call out extremism in all its forms.”

But immigration policy is not simply “calling out extremism in all its forms”. While there is no media statement for 6 January on Morrison’s media releases web, it appears that he has missed the opportunity to make a general statement along the lines that, as I say in my letter, “most Australians recognise there is limited absorption capacity both in terms of numbers and characteristics which extend beyond our Euro-Judeo culture”. Some such observation would likely put the Coalition ahead of Labor on an important policy issue.

I note that the letter published by The Australian from a Mr Jeremy Browne refers to the Antifa movement being at the St Kilda rally. That movement has US origins but is described in Wikepedia as “a conglomeration of left wing autonomous, militant anti-fascist groups in the United States. The principal feature of antifa groups is their use of direct action. They engage in varied protest tactics, which include digital activism, property damage, physical violence, and harassment against those whom they identify as fascist, racist, or on the far-right. Conflicts are both online and in real life. They tend to be anti-capitalist and they are predominantly far-left and militant left, which includes anarchists, communists and socialists. Their stated focus is on fighting far-right and white supremacist ideologies directly, rather than through electoral means”. It seems likely that it was people belonging to this movement who ensured that the rally was not a peaceful one.

Dutton’s Exposure of Turnbull

Des Moore — Mon, 31 Dec 2018 21:57:31 +0000

More on Dutton’s Exposure of Turnbull Problem

In last Sunday’s Commentary I pointed out that, while in August Dutton challenged Turnbull for the leadership he did not really spell out the reasons for doing so, but Dutton had now covered much more ground than any former Cabinet minister has done since Turnbull’s departure in an article published that day written by a journalist. In particular that the Coalition would have lost 25 seats under Turnbull and that he was all talk and little action (see Commentary 30/12).

Yesterday I received a comment from Quadrant Ed, Roger Franklin, who indicated that he had “excerpted your latest bulletin’s thoughts on Dutton and Turnbull and used them as the day’s Essential Reading item at Quadrant online”. Franklin added “Can Morrison really lack the nous to draw a heavy black line under the Turnbull catastrophe? Or is it that he lacks the courage to face down a Banks-style mutiny?” (see RE:thanks).

Today The Australian has published a number of letters on the exposure issue, including mine as lead letter (see Letters in Australia (1/19)). My letter showing edits is below.

Dutton simply said Libs couldn’t win under Turnbull

Letter published in The Australian, January 1, 2019 (Bits in square brackets deleted by Ed)

The significance of Peter Dutton’s exposure of the problems experienced by the Coalition under Malcolm Turnbull’s leadership has received a limited understanding.

Your editorial rightly points to Turnbull’s failure to “seize opportunities to hammer the opposition” (“A political year of turmoil with uncertainty ahead”, 31/12). But Dutton also said that under Turnbull “the Liberal Party had become unrecognisable to our supporters and people who had voted for us for years had switched off”. This led to 38 unfavourable Newspolls [in a row] and meant the Coalition would not have been re-elected.

The decks are now cleared to develop policies that [more widely] distinguish Scott Morrison’s Coalition from Turnbull’s imposed policies. Morrison has already modified energy policy from being the “greatest moral challenge of our time” to one that can have a more believable scientific base. If Morrison can reduce electricity prices that could be an election winner. [He has also recognized the threat from the Islamic sources to which Turnbull kow-towed to an extent].

[Morrison should now move to distance himself from the advice Turnbull obtained from the public service, particularly on energy policy].

Des Moore, South Yarra, Vic

Regrettably, The Herald Sun’s editorial yesterday failed to understand the basic reason for Dutton’s exposure and argued that “the blunt comments could well have been avoided had Mr Dutton chosen to bat away questions about the coup which he helped lead but in which he failed in his own bid to secure the prime ministership”. It also published a brief article claiming that “Liberal MPs across the country continued to privately express their fury at Mr Dutton’s comments this week outlining why he tried to topple Malcolm Turnbull”.

Why Dutton did so should be obvious to existing Coalition MPs and to an editor of the Herald Sun : with Turnbull as leader they had no chance of winning the election. With a new leader they have some chance of doing so provided Morrison gets his energy, immigration and budgetary policies etc on the right track. There is no evidence to suggest that Dutton was making another attempt to be leader.

The importance of having a more believable scientific base for global warming is reflected in contrasting existing Coalition and Labor policies. As pointed out in my Commentary of 22 December, the Morrison government has announced that it will carry-over emissions credits from under the first and second Kyoto agreements to help meet the 2030 target of a 26% reduction in carbon emissions set by Turnbull in Paris.

In total, Australia’s carbon emissions in 2030 would now be only 7% lower than in 2005 but this would be in accord with the 26% lower target. Although that will still require further reductions in emissions between now and 2030, it will be much less than if the 26% reduction was followed. The Coalition is now in a much better position to contrast its policy with the 45% reduction adopted by Labor for 2030. In particular, it will give the Coalition scope to argue that its policy will have a relatively small adverse affect on the economy/international competitiveness compared with Labor’s policy.

In the meantime, the Fairfax press in conjunction with warmists in the Bureau of Meteorology are continuing to present to the public a misinterpretation of the significance of temperatures recorded for 2018. They present this as “for mean temperatures, 2018 will also come in among the top five” on record for Australia. And “for the globe as a whole, 2018 is likely to be the fourth-warmest year on record, continuing the recent pattern of very warm years,” the bureau said. Temperatures are now about 1.1 degrees above the pre-industrial norm. That’s more than half way to the 2-degree upper limit of warming almost 200 nations agreed to work towards under the Paris climate agreement signed in 2015” (see SMH on Climate in 2018).

But no explanation is provided as to what caused the increase since the so-called “pre-industrial norm”. This is not the place to delve into detailed analysis but an important omission from the explanation of the higher temperatures is that they significantly reflect natural not human influences. As such they are not “half way” to any dangerous global warming caused by usage of fossil fuels by humans. This and other failures to properly explain the higher temperatures should be corrected by the Morrison government.

Morrison Changes CChange Policy

Des Moore — Sat, 22 Dec 2018 07:04:00 +0000

A Breakthrough on CChange Policy?

It would be premature to claim a breakthrough in the Morrison government’s climate change policy. But a potential starting point may have been made with its decision to count carried-over emissions credits from under the first and second Kyoto agreements to help meet the 2030 target of a 26% reduction in carbon emissions set by Turnbull in Paris. What this seems to mean is that energy section emissions will now have to fall by only 17 per cent, while transport and agriculture emissions are actually forecast to continue rising until at least 2030.

In total, Australia’s carbon emissions in 2030 would be only 7% lower than in 2005 but this would be in accord with the 26% lower target. That will still require further reductions in emissions between now and 2030 but much less than if the 26% reduction was followed. If Morrison sticks with this “new” policy, the Coalition would be in a much better position to contrast its policy with the 45% reduction adopted by Labor for 2030.

In particular, it will give the Coalition scope to argue that its policy will have a relatively small adverse affect on the economy/international competitiveness compared with Labor’s policy. Although Labor has not said it will not use credits, Labor spokesman Butler commented that “It is clear the Liberals are burying their heads in the sand and ignoring the vast majority of Australians who are crying out for desperate action on climate change”. This suggests it will stick with its 45% reduction policy (see Morrison Uses Carbon Credits to Meet Target).

Of course, it would be much better if Morrison were to indicate that Australia will now not make any further emissions reductions, which it appears to have done in regard to transport and agriculture. There is an implicit acknowledgement here that those industries should not suffer any adverse economic effects. So, why not go the whole hog?

OZ Attitude on CC Also Seems More Flexible

Today’s Australian also seems to adopted a more flexible approach to CC policy. It does this in three ways.

First, it has published more letters which mostly question the science (sic) used to justify emissions reduction policies (see OZ Letters Complain on CChange “Science”). These included my letter as follows

A Failure to Explain Climate-change Link with CO2

Letter Published in The Australian on 22 December (Ed Deletions in Square Brackets)

You correctly point out that “Australia should not accept measures that would damage our economy for nugatory gains in climate mitigation” and that “too often there is a yawning gap between climate rhetoric and reality” (Editorial 21/12). [Too often too the rhetoric originates from the UN Chief you quote].

The missing reality is the failure of some climate scientists and politicians to examine whether the predicted effects of climate changes actually happen. [Yet ]since the year 2000, temporary increases aside, global temperatures have been relatively stable despite the strong increase in carbon emissions staying in the atmosphere. Temperatures also remained stable in the post WW2 period to the late 1970s in the face of increasing emissions. Where is the explanation of the apparent lack of a correlation between increases in carbon emissions and temperatures, which the rhetoricians claim?

This unanswered question suggests the [danger] threat from usage of fossil fuels has lost credibility and policies aimed at reducing emissions should be re-examined . Australian governments should not continue policies to reduce emissions unless climate scientists can explain the periods of relative price stability in the face of increasing emissions. As Doug Hurst wrote yesterday, “the best Christmas present we could give ourselves would be to accept reality and cancel our futile and wasteful renewables policies”.

Des Moore, South Yarra, Vic

Second, it supports the adoption by Morrison of past carbon credits as part of its policy of reducing emissions by 26% by 2030. This is an acknowledgement by The Australian that it does not see the need for Australia to adopt such a large reduction adopted under Turnbull. Even the Fairfax press seems to accept that it is legitimate to adopt “UN accounting rules … which are effectively turning it into a 15 per cent cut on 2005 levels” (The Age, 22/12).
Third, The Australian’s editorial says “it is reasonable to argue that by meeting its Paris commitments Australia is doing too much. It is entirely unreasonable to suggest we are not doing enough. Those who argue that global warming is a looming crisis — if they are interested in science and facts — can only conclude the crisis is escalating despite our costly efforts. Yet they argue to double down on this futility”. This again adopts a more flexible approach towards how to treat Climate Change policy in a world where it is increasingly evident that many other countries are not taking the dangerous threat seriously (see OZ Supports Use of Credits to Meet Targets).

The foregoing, together with other developments mentioned in my earlier Commentary, provides more hope that CC policies are moving in the right direction.