Institute for Private Enterprise » Herald Sun

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 I also sent a letter to OZ (unpublished) advocating the cancellation of Turnbull’s membership of the Liberal Party.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)

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

Ispos Poll Shows Big Improvement in Coaliton Polling

Des Moore — Mon, 18 Feb 2019 08:57:19 +0000

Has the Tide Really Turned?

Today’s polling, not by NewspolI but by Ispos for Fairfax press, must have come as a bit of a surprise to those associates with that media group, as it also has for those supporting the Coalition. Most of the latter have been expecting an improvement in the Morrison government’s polling from the 46/54 TPP result last December but not by three percentage points to a 49/51 TPP. That is close enough to the election result in July 2016 under Turnbull (50.4/49.6) to lead the Fairfax media (and the ABC) to downplay it as much as they can.

But they also find it difficult to explain away the two percentage point increase in Morrison’s performance rate since December which means he is now a nine percentage points better performer than Shorten (49/40) and ten percentage points more preferred than Shorten as PM. (Strangely, Ispos have asked to interview me tomorrow morning, to which I have agreed).

Of course, this polling may be only a “one off” and we have to wait until the next Newspoll (which is probably next Monday) to see if it also shows a big improvement in the Coalition’s electoral hopes. But there can be no doubt that this poll provides a major “scare” to Shorten and Labor. Even the leftish political editor of the Fin Review has had to acknowledge this (see Coorey Says Test of Nerve For Labor). Note his comment on last week’s debate on whether to allow “exceptions” to border controls, viz

“There was a great deal of trepidation within the party last week over whether it had done the right thing by opening the door on boats, an entrenched political weakness which has cost it at least two elections this century”.

As I argued in last Friday’s Commentary, “Morrison’s attack on Shorten for showing weakness in handling Caucus is obviously correct (as the emergence of Deputy Albanese on TV suggests) and provides a useful stick for Morrison to use and argue that, if Labor were to win the election, they would again allow border controls to be breached. Morrison has already established that up to 300 refugees have obtained the approval of doctors to be transferred to Australia. It seems likely that under Labor border controls would be eased and smugglers would again penetrate access in one way or another”.

It is not only the AFR which is having to pull its horns in. As Andrew Bolt points out in his article in today’s Herald Sun:

“So how to stop them? Labor’s media shills offer two fixes. First, suggests The Age: “The turnback policy is cited by experts and insiders as the most effective deterrent … It would be prudent to buttress this barrier.” Pardon? Turning back boats is the Tony Abbott policy which The Age was still damning in 2015 as “morally repugnant”, and “ruthless and despicable”. It’s a policy many on Labor’s Left still hate. So why did turnbacks go from “morally repugnant” to something The Age wants more of? Why? Because The Age knows Labor has put sugar on the table for the people smugglers, and if boats now turn up it could lose the unlosable election. That’s why many Leftist journalists also insist Prime Minister Scott Morrison stop saying Labor has weakened our borders. He’s giving people smugglers ideas, they say. Guardian Australia’s Murphy even accused Morrison of “looking like you are whistling up new boats for a bit of cheap partisan advantage”.

Many leftist journalists insist Prime Minister Scott Morrison stop saying the policy has weakened Australia’s borders. How crazy. The Liberals now can’t inform voters that Labor’s policy is dangerous? And how dumb do journalists think the bosses of those multimillion-dollar people smuggling cartels are? They don’t need Morrison to tell them what Labor has done — especially not with activists celebrating at high decibels” (see Bolt on Fairfax Support for Labor).

Bolt’s article today would have been written before the editorial in today’s Age, which has done some backtracking even to acknowledging with mixed views that “There is, however, a legitimate issue for this election about whether the ALP is the better party to manage asylum seekers. The left of the party has only accepted Mr Shorten’s approach with great reluctance”. The Age adds that it “reported from Indonesia on Saturday that asylum seekers stranded there since 2013 said the bill had not made them more inclined to take the risk of boarding boats, but one source, long known to this organisation for having links to people smuggler networks, said that if the ALP won government, Mr Shorten could face a test of his nerve”. But it then makes the astonishing addition that there is no reason why the ALP cannot face down the challenge from people smugglers just as resolutely as the Coalition, apparently forgetting what happened to attempts to control borders under the Rudd/Gillard/Rudd governments! (see the full text of today’s Age editorial, which should surely lead to a change in editor of a paper which claims it is “independent always”).

Of course, the asylum seeker issue is only one of several explanations for the narrowing of Shorten’s lead in the polls.As today’s Age also acknowledges, Shorten “may also be suffering from some of his tax policies. Many voters, including, surprisingly, 30 per cent of ALP voters, are worried about his plans to end cash refunds of franking credits. Still, it is the issue of asylum seekers that appears to be weighing most heavily on the electorate. To maintain his lead, Mr Shorten will have to prove his mettle both to voters here and also to those waiting in Indonesia for a sign of weakness”.

As electorally beneficial as the border control issue is likely to be, Morrison can’t rely only on using that as a stick to beat Shorten with. Other policies need to be finalized and presented, including the budget before the election.

Turnbull Can No Longer Be Accepted As a Liberal

Des Moore — Thu, 07 Feb 2019 03:38:03 +0000

Morrison Could Now Distance Himself From Turnbull

In today’s Herald Sun, Andrew Bolt points out that on Tuesday Malcolm Turnbull “gave a ludicrously generous endorsement to Liberal turncoat Julia Banks, the MP now running as an independent against Liberal Health Minister Greg Hunt” and rightly describes this and other actions by Turnbull as “treachery” which however many journalists have failed to so characterize (see Turnbull’s Party Betrayal Must Be Called Out).

Bolt argues that “Turnbull has now done all that’s needed for the Liberals to expel him as a saboteur. The constitution of the party’s NSW branch, to which Turnbull belongs, states: ‘State Executive may expel a member where the member has actively assisted a candidate other than a candidate endorsed or approved by the organisation for election to office.’”

Bolt also argues that “Turnbull is involved in the spate of so-called ‘independents’ and ‘moderates’ now standing against his Liberal foes and all pushing his signature cause of global warming”;
Turnbull shows “other clear signs of vengeance against the Liberals who failed to see how utterly brilliant, loved and successful he really was”;
Turnbull “publicly attacked” Morrison’s proposal to move Australia’s Israel’s embassy to Jerusalem;
He lobbied Liberals to refer Peter Dutton’s to the High Court to determine his eligibility as an MP;
Followed a new “Vote Tony Out” Instagram campaign against Tony Abbott re-election in Warringah.

Bond concludes that Turnbull “just wants the Liberals to lose” and yet “Morrison is too scared to take on Turnbull publicly”.

Bolt is far from being the only commentator who is critical of Turnbull’s behavior from the viewpoint of the Liberal Party. An article in The Australian on 6 Feb, jointly authored by Greg Brown and National Affairs Editor Simon Benson, reports that “Liberal Party federal president Nick Greiner criticized Mr Turnbull for suggesting in an interview that Ms Banks was an ‘outstanding parliamentarian’. Mr Greiner, a former NSW premier who was the former prime minister’s pick for party president, said Mr Turnbull should “follow his own advice” about the behaviour of former prime ministers after they leave politics” (see Greiner Criticizes Turnbull).

One day in the near future Liberal President Greiner may be asked to support a motion to expel Turnbull.

Janet Albrechtsen is another liberal commentator who has been extremely critical of Turnbull’s behavior. In an important article in The Australian on 6 Feb she correctly claimed that “last week, Malcolm Turnbull was further marked down in senior government circles as the culprit who has one final act in Australian politics: to bring down the Morrison government and destroy those who tossed him out for being a poor prime minister last year, using his totemic issue of demanding further action on climate change”( see Albrechtsen Exposes Turnbull).

Albrechtsen also points out that “Turnbull’s political history points to a man who burns people who thwart his ambition. Following the 2007 election, when Brendan Nelson beat Turnbull for the leadership, Turnbull wasted no time in tearing Nelson down”. Nelson’s chief of staff, Peter Hendy, told a Fairfax journalist that “Turnbull told me that my job was to get Brendan to resign in the next few weeks because Brendan was hopeless and he would damage the Liberal brand so much that by the time he, Turnbull, took over, the next election would no longer be winnable. Turnbull said much the same to Nelson”.

Important in the present context, Albrechtsen claims that “when Turnbull lost the prime ministership to Scott Morrison last year, he did everything he could to destroy the Morrison government. Turnbull refused to help Liberal candidate Dave Sharma during the Wentworth by-election. Those close to Turnbull pleaded with him to write a letter supporting Sharma. He refused”. She also suggests that the Turnbull may have a hand in the rise of a batch of fake independents, assisted by GetUp, running against his longstanding nemesis Tony Abbott, Greg Hunt too for voting against Turnbull in the leadership coup, and even the member for Mackellar, Jason Falinski. The so-called independents have this in common with Turnbull — a fixation on more action on climate change. She also recalls that in October 2009 Turnbull said “I will not lead a party that is not as committed to effective action of climate change as I am.” And Abbott’s response: “OK then, don’t.”

As to Banks herself, the following picture accompanying Albrechtsen’s digitalized article itself tells its own story.

Malcolm Turnbull visits the then newly elected member for Chisholm Julia Banks in Oakleigh in 2016. Picture: Jake Nowakowski

Her false claim to have “unfinished business” on climate change action is reflected in what she told the ABC’s Rafael Epstein, viz that ‘we should meet or exceed the Paris targets’. “That was news to Jane Hume, a Victorian Liberal MP who once supported Banks but said she had never heard Banks raise such matters on climate change in the party room. A new-found conviction then? Maybe one assisted by her good friend, the former PM, and his son”.

There is much more that could be said about Turnbull’s character and ruthlessness. John Stone has had a number of articles published pointing out that, for a variety of reasons, he was totally unsuited to be head of the Liberal party. Most of these were re-published in my Commentary now on my web.

The most important policy implication now is that the revelations cited above provide an opportunity for the Morrison government not to say publicly that Turnbull is no longer accepted as a Liberal but to say that some of the policies adopted by Turnbull have been reviewed and are being improved. Morrison should not be “scared” to take on Turnbull, as Bolt suggests he is. The Coalition should say that they now judge themselves more likely to be accepted by the electorate than present polling suggests by making an updating in some policy areas.

This requires a change in what is the most important “political” policy for the election, viz climate change. In particular, the policy being developed by Energy Minister Taylor should include a departure from the Paris Accord by eliminating or at least reducing Australia’s targets for reducing carbon emissions and also reducing the renewable target. Morrison should also strongly reaffirm the other main policy, viz that on border controls and on immigration policy generally including a major reduction. This appears to be mainly (but not entirely) on track (see Morrison Will Vote Against Bill On Medical Treatment).

With the resumption of Parliament next week these changes in policy, and their explanations, should be settled before then.

Newspoll Lift Helpful But Coalition Has a Long Way to Go

Des Moore — Tue, 29 Jan 2019 10:24:15 +0000

Helpful Lift in Coalition Newspoll But Still Well Behind

Today’s first Newspoll for 2019 shows a helpful improvement for the Coalition in its TPP gap from 45/55 in early December to 47/53 but Morrison’s “Satisfactory” rate as PM went down from 42 to 40 and his “Dissatisfaction” rate went up from 45 to 47. By contrast, the “Satisfactory” and “Dissatisfaction” rates for Shorten each improved by a point and left him only 3 rates behind Morrison. In the “Better PM” rate Morrison also dropped a point while Shorten’s rate was unchanged, albeit at 7 points behind Morrison. This Newspoll was taken during the period when three ministers announced they would not stand at the next election (see Newspoll TPP Loss Reduced to 53/47).

One might say that the improvement in the Coalition’s TPP is not cancelled out by the deterioration in satisfaction and better PM rates. But the improved TPP has also to be assessed by noting that it is still suggests a 3.4 per cent swing against the government since the July 2016 double dissolution election won by Turnbull by one vote. Remember also that the Turnbull government itself experienced a swing against it then of over 3 per cent ie the Coalition has a lot of ground to make up.

The NSW State election on 23 March (for all seats in the lower house) will provide the next electoral test for the Coalition, although there will also be more Newspolls before then.

In my Commentary on 27 January I argued that Morrison needed to get cracking on enunciating policies asap and drew particular attention to the problems arising from existing energy and climate change policies, including of course the large blackouts in Victoria. Commentary concluded that “the cost of producing more power, and reducing electricity prices, would also be reduced if the existing policy of reducing emissions from coal usage was either dropped or substantially reduced and the non-binding agreement in Paris was dropped or reduced”. I also argued that increased usage of renewable is not the way to reduce electricity prices.

Note too that, according to Simon Benson at News, Morrison believes that the Coalition’s attack on Labor’s negative gearing and dividend imputation policies “represent a significant vulnerability in Labor’s economic argument”. But the (correct) attack on such policies is likely to have only a limited effect on polling.

So far there is no sign of any movement on the most important policies and Morrison’s announcement today of tax concessions for small businesses, apparently at a cost of $750mn , is only touching the edges of policy (see Morrison Announces Tax Concessions for Small Businesses). Equally, to meet his prediction that there will be an increase in jobs of 1.25 mn over the next five years (similar to Abbott’s successful prediction), appropriate policies and circumstance will need to be in place.

In today’s Herald Sun et al, Terry McCrann says “Sorry Scott and Josh, but there ain’t anything you can do to stop it. Labor is going to win the federal election. The two of you, and especially Scott, won’t do the two big things that are so critical to Australia’s future and, properly argued “axe-the-tax style”, could at least make a fight of it. That’s to slash immigration and walk away from the Fake Paris Climate Accord” ( see McCrann: Labor will Shutdown Lights/Economy)

Morrison needs to address in a substantive way the “two big things” mentioned by McCrann.

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.

Newspoll; Chief Scientist Finkel

Des Moore — Mon, 10 Dec 2018 11:59:05 +0000

Newspoll Show No Improvement But Identifies Turnbull Problem

In yesterday’s Commentary I said that, while an early election as suggested by Terry McCrann would risk the Morrison government being portrayed as a “cut and run” attempt at winning and avoiding outstanding issues, it would have the potential to bring the Liberal party closer together and take advantage of various issues on which Morrison seems actually or potentially head of Shorten, including the now near absence of Turnbull as a policy maker. In particular, an election in March would “lock in” the likely favourable budgetary and economic forecasts in the MYEFO publication (next Monday) and prevent any significant change in the Pre-Election Economic and Fiscal Outlook (PEFO) which is made by Treasury before an election.

Today’s Newspoll shows no change in the Coalition’s Two-Party Preferred vote of 45/55 (the third time) but a slight decline in the assessment of Morrison’s own performance (higher are Less Satisfied and lower as Better PM). But the most important part of the poll is that dealing with the role of Turnbull, viz

40% of all voters assess him as DISLOYAL, with 56% of the Coalition doing so;
29% of all voters say he should be EXPELLED from the Liberal Party, with 36% of the Coalition. Interestingly, the highest proportion of those against expulsion was in Labor voters (64%). This might be taken as indicating that Labor wants to have Turnbull around as a Liberal party member.

The Australian’s political editor, Simon Benson, rightly describes Morrison as having a “titanic task” to turn the Coalition’s position around and says that Newspoll has “all but written it off” despite Morrison having delivered a “significant blow” against Shorten last week on border protection and national security. Benson does acknowledge however that the poor standing of the Coalition importantly reflects the disloyalty shown by Turnbull (see Benson on Turnbull. Note that the detail of Newspoll can be seen by clicking the sentence “mobile users click here to see PDF”which occurs after the Newspoll heading).

In previous Commentary I have argued that, since becoming PM in a party room vote, Morrison has been too slow in distancing himself from Turnbull. Now, with the Newspoll showing a majority of the Coalition assessing Turnbull as disloyal, it would be timely to make a statement which, in effect, says that the policies stated by Morrison are what the Coalition is now pursuing and, at the same time, provide a list of them.

This list would need to include as part of energy policy that it will aim to produce a major reduction in electricity prices: an emphasis on such a reduction could be an election winner if properly explained. It would also need to indicate that the idea of legislating to provide authority for directing electricity producers to set prices will be abandoned (if an early election was to be held there would of course be no opportunity to legislate). In addition, part of energy policy would be to indicate that the emissions reduction target set by Turnbull in Paris would be lowered to bring it more into line with what other countries are doing, viz lower than promised in Paris.

Bolt v Finkel

In an unusual step Chief Scientist Finkel, who was appointed by Turnbull, has accused leading journalist Andrew Bolt of wrongly interpreting his view on climate change. This was done by sending letters to various newspapers referring to opinion pieces by Andrew Bolt which they published and which “included a reference to me ‘admitting’ that we “could stop all Australia’s emissions – junk every car, shut every power station, put a cork in every cow – and the effect on the climate would still be ‘virtually nothing’”. Finkel wrote that “those are Andrew Bolt’s words, not mine, and they are a complete misrepresentation of my position. They suggest that we should do nothing to reduce our carbon emissions, a stance I reject, and I wish to correct the record” (see Finkel on Andrew Bolt).

Finkel’s letter includes an acknowledgement he had previously made at a Senate hearing, and which sceptics have frequently used, that the elimination of Australia’s 1.3% of total carbon emissions would have virtually no effect on climate. But in his letter he now adds that he “immediately continued by explaining that doing nothing is not a position that we can responsibly take because emissions reductions is a little bit like voting, in that if everyone took the attitude that their vote does not count and no-one voted, we would not have a democracy. Similarly, if all countries that have comparable carbon emissions took the position that they shouldn’t take action because their contribution to this global problem is insignificant, then nobody would act and the problem would continue to grow in scale”.

Bolt has now responded in an article in today’s Herald Sun and again on Sky News. In regard to Finkel’s statement that he “rejects the notion that we should do nothing to reduce emissions” Bolt says “actually, nowhere have I said or suggested that this was Finkel’s stance, even though it clearly should be. It is my stance. So there is nothing in my article to “correct”.

In regard to Finkel’s addition in the paragraph above, Bolt rightly says “Tosh”. I note that Finkel was not a climatologist: his CV says he is a neurologist, engineer, entrepreneur, philanthropist.

New Measures to Stop Terrorists; Morrison Attacks Labor’s Energy Policy

Des Moore — Thu, 22 Nov 2018 03:42:07 +0000

Possible Additional Measures to Stop Terrorists

Not surprisingly there has been no response to my suggestion in yesterday’s Commentary that Victorian Attorney General Pakula should resign because he falsely told Victorians that the Victorian police had not received information from Federal agencies indicating that Shire Ali was a jihadist. Now, we also know that, for six days, Victorian Premier Andrews “kept to himself the fact that Shire Ali … had actually been out on bail” (see Bolt on Muslim Immigrants).

This mishandling by Victorian ministers and police of the Shire Ali incident could have cost more than one life but fortunately they recognized the risk in time to arrest the three jihadists who had been planning for some months to attack a crowd in Melbourne. But the mishandling of Shire Ali case reflects the generally poor administration by Victorian Labor as outlined in today’s Herald Sun (see Victoria Under Andrews).

Opposition leader Matthew Guy did not take full advantage of this poor administration when he debated Andrews last night at a public forum (the only one of such happenings during the election) and, in particular, he should have made more use of the mishandling of the Shire Ali incident and the gangs of Sudanese. There are more examples quoted in the above piece by Bolt, who suggests that “Victoria takes the cake”.

The most encouraging development in handling terrorism is this morning’s report that “the Morrison government is preparing to strip extremists of their Australian citizenship if they are entitled to acquire a foreign one based on where they, their parents or even their grandparents were born. The plan to deport terrorists who are solely Australian citizens is also understood to have been discussed at the high-level National Security Committee of Cabinet and the indication that the government is also planning to announce strong new laws around dual-national terrorists living in Australia. The current legislation is unworkable because it requires an extremist to have been convicted of a terror offence with a sentence of six years or more before they can be booted out of the country” (see Possible Additions to Anti-Terrorist Legislation). Some more details are in Terrorist Laws to be Tightened before Xmas.

If the changed laws can be passed by Parliament before Christmas, it will be the most important action taken since the Morrison government started and may indicate that Morrison is more clearly separating himself from Turnbull, who is reported as taking action to try to prevent Abbott from standing in his electorate and generally undermining the Liberal party. It appears that several branches of the Liberal Party in NSW favour expelling Turnbull from the party (see Turnbull Sabotages Libs). Such action would not be supported by Morrison, and would pose difficulties for the so-called moderate section of the party, but Turnbull’s views will have a much reduced influence.

Energy Policy

Meantime there are signs that the Morrison government may be prepared to modify its climate change policy in response to Shorten’s announcement of Labor’s energy policy. It is reported that Morrison “lashed out at Mr Shorten’s energy policy, which promises to put $15 billion into fixing the national energy network and subsidising solar storage batteries for 100,000 households”. Dutton has also joined the offensive against Labor’s planned $2000 handout for home battery installations, invoking Kevin Rudd’s botched home insulation scheme and the “Cash for Clunkers” program this morning as he dismissed Mr Shorten’s plan. “This pink batteries debacle is like the Cash for Clunkers,” he told 2GB, “These people just don’t learn the lesson.” (see Labor’s Energy Policy on Batteries).

If the Coalition can at least modify its present emissions reduction policy as part of an attack on Labor’s policy, that could also improve its polling. The fact that Dutton has joined the attack, which would not have happened under Turnbull’s leadership, is promising.

ABC, Energy Policy, Trump at UN

Des Moore — Sat, 29 Sep 2018 23:21:47 +0000

Morrison’s Departmental Review of ABC on Wrong Track

There is one thing that emerges from the ABC shenigans, viz it establishes a strong case that there is now no need to have a public broadcaster covering the field, even if there was when it was established. The private sector now has many broadcasters and has ready access to “news” about what is happening overseas and to the views of visiting “experts” from overseas. This extends to the rural sector as well as the urban, although the former does not have as wide an access. There is a marvellous opportunity for the government to review the role of public broadcasting (see Future of ABC and ABC).

But the reaction of the Morrison government to the dismissal by the board of CEO Guthrie, and to the subsequent reported comments by board Chair Milne (who then resigned), seems wrong. Morrison’s decision to commission an inquiry to “establish the facts” by the head of the Communications Department is surely going in the wrong direction. The facts are clear enough and a departmental inquiry is likely to produce no more than a limited range of checks and balances to which the existing ABC could be subject. From this kind of response it will be difficult to escape and the ABC is likely to basically stay as is, with the continued bias.

Of course, given the ABC’s left bias Labor would be dead against any move to sell the ABC. But that is what Morrison should be considering now or at the very least saying it is one possible outcome. Instead, on 27 September Morrison publicly supported Turnbull’s denial that he did not “harbour a hatred” for ABC reporters. According to Morrison, “I mean he didn’t. I actually spoke to Malcolm today,” Mr Morrison said. “I speak to Malcolm pretty frequently, and no, what the former prime minister did, just like I have as a minister, and I’m sure others … you know, the ABC isn’t perfect, you know, they make mistakes, and it’s all right for people to call them out on that and raise those issues with the ABC”.

It would also be difficult for the Departmental head to recommend a further cut, preferably large, in the ABC’s budget. But that is the second best outcome and it could be done by stipulating that in future the budget will be limited to broadcasting which the private sector has a limited capacity to undertake and which is judged to be in the national interest. It should be indicated that the ABC’s funding for this financial year will be reviewed in the mid-year budget report which usually occurs in December.

The ABC aside, it is not good news that he speaks to Turnbull “pretty frequently”. He should be establishing in the community’s mind that the Coalition will have policies different to those followed by Turnbull, who made as much use for personal benefits from the ABC as he could (including by appointing a friendly chairman).

Energy Policy Also Astray

In previous Commentary I have argued that Morrison’s promise to reduce power prices, and his appointment of Angus Taylor as the minister responsible for achieving this, will not work if the government continues to have a policy to reduce emissions by 26% by 2030 and one that continues to subsidize the usage of renewables. Morrison continues to say that such policies will remain. Yet the implementation of such policies adds to power prices unless the government increases subsidies.

In the Podcast Peta Credlin did last Friday on Sky News she urged the government to withdraw from the Paris accord and the gist of her presentation is in today’s Herald Sun (see Credlin on Paris Agreement). She acknowledges that, when Abbott was PM (and she was his chief adviser), wrong decisions were made. But she argues that

Three years on, we now know that even existing emissions reductions policy is putting power prices through the roof, sending jobs offshore, and risking blackouts when the wind doesn’t blow and the sun doesn’t shine. We now know, that the emissions commissars will soon turn their attention to culling our animal herds and putting a carbon tax on cars. What’s more — and this should be the clincher — we now know, that three of the four biggest emitters will make no commitments whatsoever, to reducing their emissions, leaving Australia in an even worse position than before.

Now, when circumstances change, smart people change their position. Tony Abbott has said that if we’d known then, what we know now, he’d never have agreed to a 26 per cent emissions reduction. Let’s never forget that it was Turnbull government who signed the Paris Agreement and then raced out and ratified it the day after Trump was elected knowing the US were out. So far, and without much conviction, Prime Minister Morrison has said we’re staying in — but that shouldn’t mean that we hand over even more money to global green bureaucrats.

To big note himself at the Paris conference, Mr Turnbull promised “up to a billion dollars” for this UN green climate fund that was supposed to total no less than one hundred billion dollars each and every year. Now, something called the World Resources Institute says this week that Australia should be the sixth biggest donor to this fund — behind just America, Britain, Japan, Germany and Canada — because of our wealth, and because of our historical contribution to carbon dioxide emissions — and what was initially supposed to be a one-off contribution, of billions, could even be converted to an annual tax at the December meeting in Poland.

Credlin does not mention that Graham Lloyd reported in Weekend Australia that Treasurer Frydenberg has announced that, while Australia has already given through DFAT $200mn to the Green Climate Fund, there will be no increase in our commitment (see Australia’s Contribution to GCF). Note that a former board member claims that funding for new projects has “effectively stopped” ie Australia appears to have no real commitment to the GCF.

Importantly, whether that is correct or not, the fact that the Morrison government decided not to make any further commitment to a body which forms part of the Paris accord should mean that it ought to have no concern about modifying its agreement to effect a smaller reduction in its federal emissions target. Our commitment is, in any event, voluntary.

A problem facing the Morrison government is that some of Australia’s states are setting their own targets, as is the Labor party. But an announced reduction in Australia’s federal commitment to the Paris accord would provide a basis for supporting Liberal parties at the state level and could be important for the upcoming NSW (March) and Victorian (November) elections. Credlin also refers to three of the biggest emitters who have no commitment: she might have referred also to the report that China is constructing much greater coal-fired generators than had been thought. In short, there is plenty of support for a major change in energy policy.

Trump’s Address to the UN

This is Trump’s address to the UN on 25 September which I have read because, while overstated in parts, it provides an indicator of priorities in US foreign policy and of the underlying beliefs held by Trump. The contrast with those of his predecessor is remarkable and should be supported by Australia because it is in our interests to do so, as should be the case with Western democracies but is not.

Unfortunately, Australia’s new minister for foreign affairs, Marise Payne, continued in her address to the UN to support the Europeans’ policy of opposing the US decision to withdraw from the Iran nuclear deal and re-impose nuclear sanctions. Trump indicated that additional sanctions on Iran will be imposed in November and his overt support for a two nations agreement between Israel and the Palestinians has been welcomed by Israel, which is experiencing massive attacks by Hamas on its borders.

The tone of Trump’s UN speech is slightly less aggressive than was last year’s but has been followed by an aggressive assessment of the potential threat from Iran by chief White House adviser John Bolton who, inter alia, said

According to the mullahs in Tehran, we are ‘the Great Satan,’ lord of the underworld, master of the raging inferno. So, I might imagine they would take me seriously when I assure them today: If you cross us, our allies, or our partners; if you harm our citizens; if you continue to lie, cheat, and deceive, yes, there will indeed be HELL to PAY.

The Iran Deal was the worst diplomatic debacle in American history. It did nothing to address the regime’s destabilizing activities or its ballistic missile development and proliferation. Worst of all, the deal failed in its fundamental objective: permanently denying Iran all paths to a nuclear bomb.

The ayatollahs have a choice to make. We have laid out a path toward a bright and prosperous future for all of Iran, one that is worthy of the Iranian people, who have long suffered under the regime’s tyrannical rule.

The recent shoot-up of Iranian soldiers, apparently by Arab groups, indicates that parts of Iran are exposed to attacks. It is relevant that Trump has announced that the US is developing a Middle-East policy.

Morrison Fails to Get Over It

Des Moore — Thu, 13 Sep 2018 13:01:06 +0000

Morrison Fails to Get Over It

In yesterday’s editorial The Australian concluded by saying that “at some stage we need a serious debate about what we are doing and why” on energy policy (see OZ Editorial on Energy Policy, 12/9). Also yesterday Morrison answered Shorten’s question in the House about why Turnbull has been sacked by telling him to “get over it”. But he is the one who needs to “get over it” – the “it” being Turnbull, who is reportedly still busy from New York telling colleagues to have Dutton’s eligibility to be a minister tested in the High Court. Morrison had no real option but to reject this proposal.

The trouble is that Morrison has made no attempt to explain Turnbull’s abandonment and, what’s more, it is difficult to see any substantive difference between the energy policy announced so far and that followed under the Turnbull government. In fact, while Morrison has drawn attention to areas which require policy attention neglected under Turnbull, such as industrial relations and banking, he has given no indication as to what he might have in mind.

True, he continues off and on to say the number one priority is to reduce power prices. But yesterday he made the absurd statement that Australia has to adopt climate change policies supported by Pacific Islands (a well known regular attempt to get more aid but which would not benefit from the changes sought). Today he is reported as assuring two backbenchers that he will not dump renewable energy targets (see Morrison Endorses Renewable (13/9).

Further, Morrison’s abandonment of the NEG policy, and the legislation embracing the Paris agreement to reduce carbon emissions, do not themselves reduce power prices. The policy that seems to have replaced Paris still involves the same reduction in emissions and the target for renewable is retained. Both of these increase costs once the required additional back-ups are taken into account.

Some reduction may be achieved through possible operative reforms of the energy market as suggested in the ACCC report. But the reported rise in prices in the futures market since the abandonment of NEG suggests downward pressures would have minimal effect. Unless the new government adopts a credible energy policy its Newspoll will be stuck at an unelectable level.

As National Political Editor James Campbell points out in today’s Herald Sun, if the polling booths repeat anything like the Newspoll of a Coalition primary vote of only 34 per cent (Labor 42 per cent), that would slaughter the government (see Campbell on Morrison(13/9). He argues that the Coalition has no chance of winning unless its primary vote is above 40 per cent.

Today’s article by Chris Kenny (who has experience working in a minister’s office) identifies a number of problems areas, viz

“The change in style is everything to Scott Morrison. And this looms as a strategic mistake because he needs to reshape the substance as well”.
“The new leader couldn’t resist the temptation to remake the Coalition in his own image, looking to neutralise most areas of conflict with Labor”.
“Turnbull lost the leadership because he had taken the party to the left, so Morrison needs to show he is taking it back to the mainstream right-of-centre where it belongs. Climate and energy policy is key”.
” Already several backbenchers are agitating to withdraw from Paris and former assistant minister Keith Pitt has rejected a frontbench position to argue this stance. Critics portray them as ideologues, whereas in fact supporting cheap energy is practical and pragmatic; it is making costly and futile climate gestures that is ideological”.
” Our Prime Minister ought to make clear that if something needs to give on electricity prices, reliability or emissions targets, it is the climate goals that will be disregarded”.
”If Morrison runs a version of the Turnbull government, only with an approachable and down-to-earth style, he won’t implode but he won’t win. If he backs that up with a few substantial measures demonstrating his government is firmly rooted in mainstream Coalition territory, winning won’t be out of the question.