Institute for Private Enterprise » Fair Work Australia

Minimum Wage & S African Unemployment

Des Moore — Thu, 15 Mar 2018 23:14:54 +0000

Minimum Wage

Among the many important issues which are at present subject to debate in society and the media, there is an inclination to let pass the determination by the Fair Work Commission of the minimum wage. It has received limited attention partly because the body allocated the job of regulating workplace relations has long determined the minimum and even though its analyses have been poor. The FWC has made decisions which have put Australia’s minimum rate at or very close to the highest in the world (over $36,000 pa). But this has not benefited the less skilled because employers cannot afford to pay such a rate for them. Instead of being employed they go on to welfare or crime.

The main advocates of the minimum (trade union leaders) are of course paid well above that minimum but present themselves (wrongly) as “protecting the workers”. They are also accustomed to the regular procedure whereby they announce they are seeking a large increase in the knowledge that the FWC (which is well staffed with ex-trade unionists or supporters of trade unions) will award something less. Employers are usually too scared to announce opposition to whatever is awarded.

As it happens, the National Retail Association has bravely submitted to FWC that there should be no increase on the existing minimum. In my letter published in The Australian on 15 March I argued that the Turnbull government should also favour no increase but it has not said what it should or shouldn’t be. This is a disgrace.

Pay Rises Hurt the weak

(Letter Published in The Australian, 15 March. Last sentence in brackets omitted)

Your editorial rightly observes that the 7.2 per cent increase in the minimum wage proposed by the ACTU would “no doubt lead to job cuts amongst our most vulnerable workers”(ALP and unions set to pull the wrong levers on wages”, 13/3). And, as Judith Sloan points out, the Fair Work Commission’s contradictory justifications for its past decisions makes it a poor judge (“Until productivity improves, spare us the excuses for a wage lift”, 13/3).

In fact, the HR Nicholls Society has also long argued that the FWC (and its predecessor) has been unfair in effectively ignoring the adverse effects on employment of lesser skilled workers. As a result, FWC decisions cause unemployment to be higher than it should be and the poorer to bear the brunt.

The Turnbull government should submit to FWC that no increase be made in the present, high wage level. [It should support its submission by pointing to the 26.7 per cent unemployment rate in South Africa, where the union movement sought and partly obtained large increases in the minimum wage].

Des Moore, HR Nicholls Society, South Yarra Vic

South African Wages

The Letters Ed omitted the last sentence in the above letter I submitted, possibly because he/she thought any comparison with South Africa and its large black population is not relevant to Australia. Yet it is relevant to the lesser skilled and the very high rate of unemployment there. Official South African data indicates that there has been a very large increase in average wages (about 300 per cent since 2004) and that the “real” rate of unemployment is 36%, about 10 percentage points higher than the official figure.

I thought, however, that there would be some interest in the South African situation given that the election of a new President (Cyril Ramaphosa) has attracted attention in Australia. Ramaphosa has come up through the union movement and is reported to now be the richest man in the country (this is a rather scrappy section on him from Wikepedia, Ramaphosa). South Africa has a strong union movement and a highly regulated wage system (sic) but one which seems to have made decisions with no regard to possible adverse employment effects.

Also of interest for Australia is the considerable number of South Africans and Rhodesians who have emigrated here (about 200,000 S Africans), reflecting in part from the evictions of rural landholders from their land, often carried out violently and sometimes inflicting deaths. On becoming President, Ramaphosa indicated that land reform would be a top priority for him (purportedly to reduce inequality) and it seems likely that more white farmers will lose their land, with increased deaths. I have signed a petition by Q Society in support of additional migrant applicants being accepted (about 10,000 have signed so far). The seriousness of the situation for white farmers is indicated in the two attached articles from The Australian (see under South African Land Grab).

Ironically, the new Rhodesian government is reportedly appealing to white farmers to come back!

The report that the Minister for Home Affairs, Peter Dutton, is considering special visa arrangements for white farmers deprived of their land to come to Australia, and has done so in a way that suggests that South Africa is not a “civilized” country, has caused the SA government to demand a retraction (see South Africa Complains). Turnbull has not specifically supported Dutton but has claimed that we have a non-discriminatory visa scheme. This doesn’t seem to be correct (see also Turnbull on South Africa).

Just what is or is not civilized is hard to determine. But there is no doubt that South Africa is in serious economic and social difficulties, with the black population suffering the most (except for the few having political/union power) and the white landholders facing violent attacks and deaths that are likely to increase. In these circumstances Turnbull should give Dutton full support instead of giving half-backed answers to questions about S Africa and possible visas or admissions. In fact, there is a case for Australia querying at the UN whether its citizens (black and white) are being fairly treated by the government.

In The Right Direction?

Des Moore — Fri, 27 Oct 2017 11:53:42 +0000

The kerfuffle over the ministerial handling of the Australian Federal Police raids on the Australian Workers Union raises serious questions about why the Turnbull government timed such action now and whether Turnbull himself was more closely involved than appears in the media. It followed Turnbull’s decision to announce a new energy policy with important details absent and a promise that these will be “explained” in due course. These “rush” decisions by Turnbull may well be connected with an attempt to lift his continued disastrous polling in Newspoll and prevent any move to replace him before Christmas. Yet an examination of recent developments suggests the polling is now more likely to fall than even stay put.

Lack of NEG Details Suggests Rush Job by Turnbull

As we wait to learn the details of Turnbull’s new energy policy (NEG), comments and queries about it have quietened a little because even some critics see it as being “a step in the right direction”. This quietening appears to be based mainly on the decision to cease the subsidisation of renewable after 2020. That decision supposedly reflects a belief that, by then, the cost of renewable will be similar to the cost of obtaining power from coal-fired generators and that renewable can then compete in the market without government assistance. Such a belief may take insufficient account of the considerable cost of back-up power needed to deal with the unreliability of renewable.

In any event, at best the cessation of subsidisation by the Commonwealth must be regarded as only “a baby step” in the right direction. Under NEG many wrong steps would remain in place in circumstances where an opportunity existed (and still does) to make more substantial changes with potential economic benefits and no risk of adverse effects on temperatures. For example, a smaller emissions reduction target than the 26-28% by 2030 could be made without unravelling the agreement in Paris, which allowed other countries to have lower targets (and even zero for China and India). A lower such target for Australia would add virtually nothing to global temperatures even if they suddenly became closely related to emissions (which they haven’t been and which has recently been acknowledged as occurring in recent years even by scientists who are GW believers).

For renewable, it would be desirable to seta smaller Commonwealth target than the supposed existing 23.5% by 2020. That target comprises 16% for large scale projects compared with about 10 % now (hydro would provide 7%). Hydro aside, action is also needed to prevent the estimated total usage reaching 28-36 per cent in 2030. This estimate, which emerged out of the blue by Environment Minister Frydenberg in his 18 October article in The Australian, has not had its basis explained and is just one of the many missing “details” still to be announced about NEG. The estimate of 28-36% by 2030 appears right at the end of the advice provided to Frydenberg by the supposed experts constituting the Energy Security Board. Astonishingly, it too provides no justification and simply says that the expected power mix “will also be analysed by the AEMC as part of the detailed modelling requested by the Commonwealth”. Its apparent acceptance by Frydenberg (and hence Turnbull and his Cabinet) without further checking and explaining its basis as part of NEG can only be described as irresponsible.

In further explanation of this scheme the Turnbull government should announce that renewable usage is kept to no more than ,say, 20%. This would allow some increase in renewable and could make sense for the moment. It would reduce the Commonwealth’s budgetary cost of subsidies on renewable which continue after 2020 (although under NEG subsidies will cease on projects started after 2020, they would continue on pre-2020 projects). Lower renewable would also mean a reduced risk of unreliability in the grid system.

Such changes would almost certainly also lead to reductions in the now high power prices resulting mainly from the supposed clean energy policies pursued to date. But they would also need to involve State governments, which seem to have been largely ignored by the Commonwealth in its development of NEG. Yet it is the states which run electricity and they should be told that policies involving high usage of renewable (such as in South Australia) are not in the national interest and will be taken into account in determining the distribution of grants.

Overall, the handling by Turnbull of the development and launch of a new energy policy illustrates once again not only his poor leadership. It also reveals that the group of experts he set up to advise the government on energy policy appear to support the dangerous warming thesis – hence it advises the need for detailed government intervention which would also be accepted at the state level where there are GW believers. The solution is to replace Turnbull and the advisers he has been using.

Another Rush Job in Attacking Opposition Leader

The decision to instigate a police raid on the premises of the AWU appears to based on a report by the Registered Organisations Commission (ROC) that it had received a warning of damage to documents held by the AWU on Shorten’s decisions, when head of the AWU about ten years ago, to donate union funds to left inclined bodies which support Labor, such as GetUp. For present purposes the question is whether Shorten’s decisions had been properly made and recorded in minutes of AWU meetings.

The ROC is an independent watchdog tasked with the role of monitoring and regulating registered organisations (both unions and employer groups). In 2014 the Abbott Government announced a Royal Commission into Trade Union Governance and Corruption, tasked specifically with enquiring into the governance arrangements of trade unions. In Volume 5 of the final report Justice Heydon identified a number of problems with the existing regulatory framework and recommended additional law reform options to address some of the governance inadequacies identified. The bill for an ROC was one of the triggers for the double-dissolution of Parliament in 2016 and was subsequently passed by both houses of Parliament on 22 November 2016 as one of the Turnbull government’s achievements.

This is not the place to discuss whether Shorten’s actions some time ago were in accordance with the regulations then administered by the Fair Work Commission. It appears, however, that the documents relevant to his actions are likely to be held within the AWU and to be important evidence in any judicial consideration of his and the AWU actions at the time. As an independent body the ROC is not subject to direction by Minister Cash and it decided to secure a warrant authorising investigation of the threat, which it then sought the AFP to undertake.

The questions that do not have clear answers at present, however, are

whether the ROC was at all influenced by the Minister in deciding to seek a warrant. The ROC has not explained who its informer was and whether his/her warning was acceptable given that the documents appear to have been at the AWU for about ten years and it is only now that they have come under threat;
whether the decision of the independent AFP to accept the warrant was at all influenced by the Minister.

On the surface there seems no reason to think that the Minister was involved other than in regard to the leaking of the police raid and the resultant adverse publicity. However, her decision to deny any involvement by herself or her staff, and then to acknowledge that there was involvement of staff, might be said as reflecting an expectation of activity but a failure to check those knowing about the raid. In fact, it also appears that knowledge of the police raid was quite widely spread. It is relevant that both Turnbull and herself might have considered it useful to try to move media attention away from energy policy and to make Shorten the subject of attention. One way or the other, it is difficult to believe that neither the ROC nor the police would have given Cash and/or Turnbull advance notice of a police raid on the AWU.

Newspoll & Why Policy Changes Must be Made

Des Moore — Mon, 20 Mar 2017 21:38:38 +0000

As a new Parliamentary week starts, the political editor of The Australian interprets the latest Newspoll as putting Turnbull “back in the game” (see below). But while the Coalition’s TPP has improved to 48/52 (from 45/55), it remains a long way short of a recovery let alone a Coalition leadership position. Importantly also, the polling still continues to confirm dissatisfaction with Turnbull. In terms of net satisfaction with leaders (only available on the web), Turnbull and Shorten are both about the same in negative terms (about -28) and, although Turnbull is slightly better than Abbott was when he lost the leadership (-33), he has lost the very favourable position he had when he took over in September 2015 (+19). He is also still below what he was even six months ago (-22). In reality, voters are very unhappy with both leaders and there is an opportunity for a new leader for either party.

Note also that One Nation has retained its improved vote (10% cf 1.3% at the 2016 election) and is now competing directly with the Greens (9% cf 10% at 2016 election). While Hanson has been criticised for her performance at the WA election , her focus on two important issues (climate change and Islamism) attracted only minimal attention in that election. The continued support for One Nation suggests that the Coalition has an opportunity to adopt policies which take a sceptical view on climate change and which strengthen counter-terrorism provisions and attitudes to extremist activities (we need to avoid the French situation, where there is now talk of compulsory military service). Sensible policy improvements would help improve the Coalition’s polling and further reduce that of the Greens, whose leader now wants us to work only 4 days a week!

However, as I argued in last Saturday’s Commentary, such improvements would need to involve a major change in energy and climate policy. For reasons stated in that Commentary, these policies are going in the wrong direction both practically and politically. If Turnbull were to be serious about improving Coalition polling he would abandon his apparent fear of being accused as “Trumplike”. Yet he has now adopted Trump’s use of Twitter to send (daily?) messages on government policy (more power to the PM and less to Cabinet let alone Parliament).

Andrew Bolt’s main article today is in line with my Saturday Commentary (for access see my web). Note in particular that the feasibility study on expanding the Snowy hydro (announced by Turnbull after implying that it is “all OK”) seems a lost cause. Bolt refers us to experts at ANU who suggest that the study will show that “it costs 20 per cent more to pump water uphill than you get from the hydro-electricity produced when it flows back down”. The economics of the Snowy are also likely to be negative if a proper analysis is done. In short, even as an attempt to attract political support let alone deal sensibly with the energy problem, Turnbull’s Snowy project is already a flop.

In his second article below, Bolt does, however, suggest that Turnbull may be moving in the right direction on some issues. Note in particular that Bolt draws attention to Turnbull’s now continued use of “Islamic terrorism”, a reference he could not accept when he first became PM. These developments (sic) in the Turnbull philosophy have been extended since Bolt’s articles were published by his “discovery” today of the Heydon Royal Commission report on Trade Unions, which reported in December 2015. He had his employment Minister introduce legislation today to penalise trade unions and employers for making or accepting “corrupt” payments. If properly and practically framed, such action goes to the heart of the powers exercised by trade unions and hence the role of Labor at present. This is a counter to the decision by Labor to attempt to legislate against any reduction in penalty rates decided by the Fair Work Commission and the statement by Shorten to make this reduction (with which Turnbull eventually said he agreed) an issue right up to the election.

It would be difficult to accept that Turnbull has suddenly become a conservative or even that he has decided to adopt conservative policies. Perhaps these latest developments are designed to give him time. But time to do what?

Turnbull on the Fence

Des Moore — Fri, 03 Mar 2017 22:45:49 +0000

The Weekend Australian is replete with discussion about Turnbull’s incapacity to govern and about possible changes in leadership. The editorial below suggests “Mr Abbott’s urgings for the Prime Minister to take up the positive, economic liberation arguments on penalty rates and to deliver reform on 18C are wise” and, rather than rejecting them, Turnbull should “lead the debate rather than aspire to acting as a chief national conciliator hoping to broker consensus on every contentious issue”. As it concludes, “the markets, the public and Mr Turnbull’s own culpable colleagues are running out of patience”.

Strangely in one sense, the AFR’s chief political correspondent also claimed “the Turnbull government did not help itself choosing to sit on the fence during the review and not make a submission” on the FWC’s review of penalty rates (see Coorey on Penalty Rates). But his sympathies tend to be in accord with Shorten’s and, despite him being a writer for our main economic newspaper, he overlooks that the economic case for reducing penalty rates is that even FWC head Ross indicated the cut may increase employment and the income of those consequentially employed. Coorey’s final aim seems to be to let Turnbull off the hook and to ensure no credit is given to Abbott or the so-called conservatives in the Coalition (my attempt earlier last week to point out Coorey’s analytical errors did not find any space in the AFR, pesumably because they failed to publish any letters on two days last week).

Discussion of the current situation in Canberra at Prahran market this morning led to a reference HG Wells and his attempts to predict the future, on which he was only four months out in predicting in the early 1930s the start of the second world war. One of his novels The Island of Doctor Moreau attempts to portray the significance of a doctor on an island using his surgical skills to transform animals into men. This is described in this summary as, “among other things, an exploration of unchecked ambition”, which might be regarded as relevant in current Canberra circumstances.The horror of the story comes from the suffering of the animals, which two shipwrecked human arrivals on the island witness. They find that Moreau argues that the pain from his surgery is “needless” and that as we evolve our need for pain will be redundant because our intellect will protect and preserve us. In the face of the suffering, however, the two arrivals don’t do anything to stop Moreau’s cruelty. Wells seems to present a very pessimistic view that in our regard for others man is perhaps the most beastly creature. This morning’s discussants concluded that “something needs to be done” in Canberra and our pain and suffering needs to be stopped.

John Stone has previously predicted the need for a radical change. In this week’s Spectator he takes another step and predicts what an Abbott Cabinet might comprise (see below). As Parliament is not sitting for the next two weeks, there will be an opportunity for such a change during that period .

Turnbull Must Go

Des Moore — Mon, 27 Feb 2017 10:00:09 +0000

Newspoll Confirms Turnbull Must Go

Today’s Newspoll shows that, despite Turnbull’s very recent decision to start attacking Shorten more aggressively, the Coalition’s polling has dropped a further percentage point (to 45/55 on a TPP) and Turnbull’s personal polling has dropped sharply to 29/59 satisfied compared with 33/54 last time. This has occurred after Shorten was not only unable to state the estimated cost of Labor’s 50% target for renewable energy but also announced that he would try to reverse the decision by Fair Work Australia to slightly reduce penalty rates even though he had previously supported a review when he was minister under Labor! With Labor on the back foot, the Coalition’s polling ought to have improved.

Turnbull’s immediate response to the poll is to blame Abbott’s speech on Thursday launching a new book of essays and suggesting the need for policy changes on inter alia energy and immigration. At a press conference today, Mr Turnbull began with a standard dismissal of the opinion poll that it was a snapshot of voters at least two years before the election proper. But he then attacked Abbott (without mentioning his name) “We saw an outburst on Thursday and it had its desired impact on the Newspoll. It was exactly as predicted and as calculated.” “He knew exactly what he was doing and he did it.”

Such a quick effect on the poll seems highly unlikely. In reality, Turnbull’s continuance as leader under the existing policy regime would ensure a loss at the next election. In this article, Andrew Bolt claims “His government will fall. And conservatives will never get what they want from the Liberals while Turnbull leads”. Terry McCrann has already said much the same, concluding that we need a “down-under Trump”. It appears that some so-called conservatives have already been discussing alternative policies outside the party room and have adopted the title of ‘deplorables”, as Hilary Clinton christened some of her opponents in the US Presidential campaign.

The failure of Turnbull to respond to Abbott by indicating possible policy reviews has now deepened the division within the Coalition and ensured that more voters will move to support One Nation, which now shows a primary vote of 10% in Newspoll, the same as for the Greens. This is particularly the case with his (latest) energy policy. While Turnbull rightly attacked Shorten for his 50% renewable target, as Bolt indicates Turnbull “promises more wind power himself as bills keep rising and the electricity starts flickering”. Interestingly, even The Australian seems to have has been reluctant to run critical commentary on the adverse effects from the Coalition’s 23% renewable policy (I have had several letters on this rejected by The Australian and AFR). Turnbull has now vowed to maintain the policy – almost because Abbott suggested the renewable target be dropped!

More criticism of the 23% policy seems bound to emerge in the near future, with a letter signed by 300 scientists being sent to Trump by MIT professor emeritus Richard Lindzen calling on the United States and other nations to “change course on an outdated international agreement that targets minor greenhouse gases,” starting with carbon dioxide. “Since 2009, the US and other governments have undertaken actions with respect to global climate that are not scientifically justified and that already have, and will continue to cause serious social and economic harm — with no environmental benefits,” said Mr. Lindzen, a prominent atmospheric physicist (see attached 23 February article from Washington Times headed Hundreds of scientists urge Trump to withdraw from U.N. climate-change agency). Our Alan Moran is also about to start publicising his new book on Climate Change Treaties and Policies In The Trump Era in association with Andrew Bolt, Terry McCrann, Nick Cater, Ian Plimer and Senator Malcolm Roberts at locations in Melbourne, Sydney and Brisbane.

Islamic Policy

Turnbull also missed an opportunity to use the (extended) successful visit to Australia by Israeli PM Netanyahu to drive home the threat from militant Islam. While he rightly criticised the anti-Israeli resolutions in the UN and supported a two-state-solution for Palestine (albeit unjustifiably supporting a return to negotiations now), he should have indicated concern about the threat from Iran and that country’s likely acquisition of nuclear weapons. As Greg Sheridan points out in the attached article (Bibi Warns on Iran), it was left to Netanyahu himself to indicate the seriousness of the potential problem (Sheridan also separately savaged the support given to premature “recognition” of Palestine by three former Labor leaders, but not by Shorten).

Turnbull also missed an opportunity to correct activist Yassman Abdel-Magied for her soft interpretation of the Koran as supporting a feminist religion. Our PM should use every opportunity to provide an interpretation of the Koran which is commonly used by imams but is inacceptable in western culture. Unless we indicate now what is inacceptable, we will be stuck with a very divided society in ten or so years. The publication of an assessment that France is already close to that illustrates the importance of indicating now what is inacceptable. Turnbull does not show any inclination to sounding such a warning.

Turnbull to Follow Downer?

A possible alternative position for Turnbull would be to have him move to London as the High Commissioner to succeed Alexander Downer, who is due back about mid-year. Such a “solution” would be better for the Coalition than continuing the division which is now out in the open and which will likely make the polling worse. It would require a push from a considerable number of current MPs.

What Next for Turnbull?

Des Moore — Sun, 12 Feb 2017 11:39:05 +0000

What Next for Turnbull?

Turnbull’s attempted recovery from declining polls appears to involve two immediate strategies. First, expose and publicise dubious activity by Shorten when he was head of the AWU. Second, attack the energy policy adopted by Shorten now that he is leader of the Opposition. This approach seems to have been welcomed by most members of the Coalition and praised by some in the media, both of whom reacted with comments to the effect “why the hell has he taken this long to point out the defects in Shorten as Labor leader” or words to that effect.

However, some also question the extent to which this will work in practice.

Yesterday’s Herald Sun carried an article by veteran commentator Laurie Oakes suggesting that “One intensely personal speech bagging the Opposition Leader might take the heat off Turnbull for a while, but it will not solve the problem for the PM in the longer term. He needs to apply the same passion and rhetorical skill to explaining his policies and disproving Labor’s case” (see attached Oakes on Turnbull). Spot on.

In fact, yesterday’s AFR did have an article which suggests that Minister for Employment, Senator Michaelia Cash, might be allowed by Turnbull to emerge from her semi-retirement and introduce legislation to cover “ gifts such as free travel and housing renovations ‘reasonably soon’ and require greater disclosure of gifts to union officials, a government spokesman said. It is unclear how the law would work if the union leader had a family-like relationship with the employer” (see Cash on Shorten Relationship with Pratt.). Such action would of course be a reform of sorts but it would not do more than touch on the massive reforms needed to the regulation of workplace relations and the role of the Fair Work Commission, on which Turnbull has made only limited legislative progress by pursuing Abbott’s ABCC initiative.

More to the point perhaps may be that the new (sic) Turnbull himself makes greater use of the Heydon Royal Commission’s report, which as the article notes “identified four separate cases where the AWU received payments that may have been corrupt between 2003 and 2010. The findings, where were referred to police, led to a demotion for Mr Shorten’s protege and successor at the Victorian division, Cesar Melhem, in the Victorian Parliament, where he is now a Labor MP”. There is scope to use such findings (why are they still with the police?) to not only attack Shorten personally but justify the case for more broadly based reforms. As mentioned in my Commentary on Thursday, former Treasurer Costello told the HR Nicholls AGM dinner that the government has not yet made any response to the resignation from the FWC of Vice President Graeme Watson and his exposure of the unworkability of that body.

As to Energy Policy, Turnbull is on delicate ground in attacking the Opposition on “extreme” targets for using renewable energy when the Government itself has a target of 23 percent by 2020, which experts say is not achievable and which would in any event put Australia ahead of most Western countries. This article by Chris Kenny outlines the absurd situation in which South Australia has got itself under its Labor government (but on which Liberal leader Marshall seems unable to announce opposition on energy policy notwithstanding continued blackouts). But the problem extends beyond South Australia to the Turnbull government. As Kenny says,

“The serious complication for Malcolm Turnbull is that while Weatherill’s climate crusade is all his own doing and the political consequences for him ought to be dire, it has all occurred under a federal RET that has had bipartisan support. It is classic case of our muddled federation where we have different levels of government acting at cross-purposes. Setting a national RET at less than 25 per cent doesn’t stop self-harming states using it to achieve their own unilateral targets of 50 per cent (Queensland is aiming for 50 per cent, Victoria 40 per cent and Western Australian Labor has been flirting with 50 per cent).The states are responsible for their own foolhardiness. And the Turnbull government’s RET ambitions seem eminently responsible compared to Bill Shorten’s shapeless and uncosted plan to more than double the RET to 50 per cent by 2030. Yet Turnbull and his Environment and Energy Minister, Josh Frydenberg, need to deal with the reality that the current chaos is occurring under a RET to which they subscribe.Remedial action is urgently needed to turn their political ascendancy on energy policy into a practical prescription’.

Turnbull may try to escape from the problem by drawing on advice from Chief Scientist Finkel, who has been commissioned to review energy security. But experts outside government say that Finkel has no background in climate policy and is likely to produce a report which would accept the use of “up to” a limit of renewable sources. The AFR is running an article this weekend (not accessible digitally) which mistakenly claims that Finkel is “highly regarded”. Finkel has also chosen a panel of two supporters of climate change policy. The article quotes Finkel as saying it would be “hard to change the rules” for South Australia but limits on renewable might be an option for other states. That would of course create a (further) problem for federal-state relations and raise the question as to how the Commonwealth would enforce limits.

As previously suggested, the Turnbull government needs to change its climate policy by markedly reducing the target for renewable on the ground that it has adverse economic effects and telling states that it will reduce grants to any who do not observe the lower target. That would indicate that we have a really “new” Turnbull. Perhaps an opportunity for our new Conservative Party to move in the Senate?

Bolt on Turnbull, Interpreting Bernardi, Costello at HRN

Des Moore — Thu, 09 Feb 2017 12:17:10 +0000

For the second day in a row Turnbull has “savaged” Shorten in Parliament – and outside it. The savaging included an accusation about the benefit to Shorten arising from “managing” one of the deals done by the union he led before he became an MP and Labor’s leader, as outlined in the Heydon Royal Commission. The opportunity for the government to use those investigations has so far been largely neglected and the attack on Shorten presumably reflects a number of recent unfavourable developments, such as the drop in Coalition polling to 46/54 on a TPP, the resignation from the Liberal Party of Senator Bernardi, and the apparent success of Trump in effecting major changes in policy in the US (one of which was even quite favourably regarded in a poll here).

While the initial response of Coalition MPs and some media has been favourable to Turnbull’s attack initiative, the question is whether this will be followed by major policy announcements and initiatives. That is much more difficult to achieve under Australia’s political “system” than it is under America’s, which seems to allow the President himself greater power to implement executive decisions. But there is ample scope to attack the Opposition here on the basis of it’s reliance on support from unions which, in most cases, are exploiting their power via the Fair Work Commission and its union-based interpretations of the legislation implemented under Gillard. Equally, there is scope to mount a major attack on the failure of the Opposition to support budget measures sufficient to reduce the deficit.

Turnbull might also indicate support for many of Trump’s initiatives and for Brexit. As indicated in Sheridan’s article, the resignation by Bernardi is “symptomatic of the broader crisis in Western politics”. He also points out that “this is still a government which doesn’t show enough fight”. The problem is whether a Turnbull led government is capable of identifying issues which it could use to attack the Opposition and, at the same time, persuade sufficient of the electorate to reverse the recent polling. The adoption of major changes in environmental policy is a very obvious track to follow given the almost certain major changes in the US and the increased evidence that the so-called experts have made major analytical errors, even using deliberate manipulation of data to obtain non-existent warming. Imagine for a moment that Turnbull announced a major agreement with Trump on correcting the mistakes made by past respective governments. The trouble is that it is virtually impossible for a Turnbull to take such an initiative.

Not surprisingly, therefore, Andrew Bolt published an article on 8 Feb (before Turnbull’s first savaging) arguing that Turnbull must be dumped. While Bolt does not make it clear who he favours to succeed him, it certainly appears that the Coalition cannot win the next election through a legislative reform initiative given the difficulty of securing passage through the Senate. Arguably, it would be better to give one of the possible candidates a chance now (Bolt mentions a number) rather than wait until the months close to the election (which is uncertain anyhow). But there is no sign that such possible candidates are ready to engage in a battle for the leadership.

I am also attaching a summary version of the speech made by Peter Costello at last night’s AGM dinner by the HR Nicholls Society, which I attended. I continue on the board of that Society but mainly in hope rather than expectation that the Government will push for a major reduction in the regulatory arrangements presently in place and their obvious anti-productivity effects. As Costello points out, the Turnbull government has made no comment about the resignation of Vice President Watson (who also attended the dinner along with about 80 others) and his very serious criticism of the workings of these arrangements. Again, this could be an opportunity to attack the Opposition for installing the present arrangements and resisting sensible changes.

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.