Institute for Private Enterprise » Josh Frydenberg

Commonwealth Budget 2019/20

Des Moore — Wed, 03 Apr 2019 08:53:18 +0000

Commonwealth Budget For 2019/20 Won’t Save The Bacon

Today’s Media has included many comments on the Morrison Government’s Budget for 2019-20 as well as estimates of revenue and expenditure for the following three years. These include a large number of decisions and it would not be appropriate here to examine them in any detail: indeed I challenge anyone to examine what one journalist described as “a budget speech littered with references to plumbers, couriers, cranes, hard hats, teachers, tradies and nurses”. My general conclusion on the speech I watched on TV was that it did not impress most on the Coalition benches and some of those there tended to drop off and, after a time, showed little encouragement as Frydenberg continued well after the half-hour finishing time allocated to budget speeches. In consequence, what my comments below mainly relate to are the totals of revenue, expenditure and what is commonly treated as the deficit or surplus for the four years.

But these need also to take account of the possible reactions to budget decisions on taxation and spending on capital projects which increasingly purport to extend beyond the four years. For instance, the Morrison government’s budget announcement included an addition of $25bn to the existing infrastructure program of $75bn which is spread over in ten years. This reflects the increasing involvement of the Commonwealth in what are (or should be) basically State matters including the congestion resulting from higher immigration but which the Federal government also believes it needs to be involved in order to attract votes. The result of the election in NSW, in which both the Liberal and National parties lost seats, led the Morrison government to publicise in the Federal budget its involvement in regional NSW. On tax, the difficulty in assessing the tax policy is that the second round of personal tax reductions will not start until 2022-23 and that is then reflected in a reduction in about half the estimated surplus for that year.

In interpreting the budget it is also important to realise the Coalition will face the election in May with electoral polling which indicates it is almost certain to lose. As such, apart from possibly indicating the Coalition’s budget as no more than a manifesto with which to start the election debate, the same applies to the manifesto which Shorten has announced. He is now further developing that by announcing yesterday the 50% compulsory electric cars by 2050, which has (rightly) been widely characterised as absurd. Shorten has also failed to indicate the costs of his environmental policies. This situation further widens the gap between the two parties on the issue of dangerous global warming which appears likely to be a major discussion item. Unfortunately, the Treasurer’s budget address re-stated the Coalition’s existing policy of reducing emissions as stated in Paris and announced a $3.5bn “climate solution package” apparently designed to soften the moderates within the Coalition. Another bad poll would provide the opportunity to moderate this policy but it looks as though such a moderation is not politically possible.

Yet it is reported today that three senior ministers, including Morrison, have decided over-night to add over $300mn to energy supplements and amend the budget the day after it was introduced!

In a situation of emergency one possible policy change on the environment might extend to pointing out that the prediction in temperatures by supposed climate experts has been three times higher than the actual increase in temperature as published by the IPCC. This failure of “scientists” to get anywhere near a meaningful prediction in temperatures indicates the need to urgently review the dangerous warming belief and provides a basis for at least moderating current policies (see advertorial Global Warming as published in today’s Australian by the Climate Study Group). This research indicates that the most highly likely warming over the period to 2100 does not justify the current expenditure by governments of squillions of dollars on reducing the usage of coal.

Following are my brief comments on the major items in the Budget:

Overall, there is no indication that the Morrison government aims to reduce the size of government. Estimated payments (ie expenditure) by the Federal government are about the same proportion of GDP throughout the four years covered by the budget (24.5 -24.6%). That is fractionally lower than in 2018-19 (24.9%) but that probably reflects a spending splurge in that year to reduce the amount to be allocated in the budget year. That is estimated at 25.2% of GDP, which is fractionally higher than in the last year of the Keating government in 1995-96 and is higher than in the last few years of the Howard government;
Treasurer Frydenberg (and Morrison) have claimed that the budget showed they had not increased taxation. But tax as a proportion of GDP is shown as slightly higher in 2019-20 than in the previous year (23.1%) and only fractionally lower in the last of the four budget years (2022-23) for what that may be worth. As there is no data readily available on the split between company and personal income tax, the increase in company profits may mean that personal tax proportion of GDP may have been reduced. But total estimated taxation in the current and next three years is the highest proportion of GDP since the final years of the Howard government in early 2000s;
As has been much acclaimed by the Treasurer and Morrison, after 11 years in budget deficits and a consequent increase in net debt, a surplus is estimated for 2019/20 (0.2% of GDP). But this is not a result that a government would normally boast about, which is probably why Frydenberg has limited his reference to the four year total. It is also exposed to possible minor adverse effects from reduced company profits due to falls in commodity prices. It’s good to be “back in the black” but the aim should be to achieve a much higher surplus and pay off more debt.

Overall this is a useful budget (a “B” perhaps) but it falls short of what is needed to avoid scattering spending to buy votes, to reduce debt and does not provide a bulwark against attack from serious adverse changes in economic conditions here or overseas. It does provide a test for whether Labor is prepared to maintain the aim or fall back to the deficits incurred by Rudd. Hopefully, the latter are so recent that Shorten will be able to persuade his left wing to stick to the surplus aim.

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)

Border Controls; Early Election Now Likely

Des Moore — Thu, 14 Feb 2019 01:11:34 +0000

Morrison Says No Early Election – But For How Long Can He Run A Minority Government

On Tuesday I referred to Andrew Bolt’s suggestion on Sky News that the decision by Labor to push legislation through the lower House allowing asylum seekers on Nauru and Manus Island to “doctor” themselves to Australia for treatment without ministerial approval and, by obtaining court approval, to then “recuperate” here for a indefinite period. With the support of the Greens et al, this legislation has now passed the Senate too but, despite his strong attack on Shorten and accusation that he has broken what had seemed a bipartisan agreement on border control, Morrison has said that he will not call an early election. Even so, Bolt tonight again repeated on Sky News his advocacy of an early election by taking advantage of the policy windfall provided by Labor.

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 (see Possible Effects of Labor Legislation on Refugeesand Bolt Says Labor’s Legislation Allows Asylum Seekers to Come To Aus). It seems likely that under Labor border controls would be eased and smugglers would again penetrate access in one way or another (see Sheridan Says Labor Shameful).

But as electorally beneficial as it would likely be, Morrison can’t rely only on using such a stick. Other policies need to be finalized and presented, including the budget.

It also remains to be seen how long he can run a minority government where there is an opposition which is able to force legislation right through Parliament and effectively change the Coalition’s policies on other matters too. There has already been a (failed) attempt today to establish a Royal Commission on some failure of access to disabilities and there will inevitably be a debate on aspects of the budget set to be presented in early April. That would provide Labor/Greens with opportunities to have amendments to the budget passed through Parliament not by the Coalition but by the Opposition.

Labor’s success in obtaining the passage of legislation on Manus/Nauran refugees has changed the management of government picture and makes it more realistic for the Coalition to think of an early election. This is not simply to take advantage of its win on border control strategy but to avoid the potential loss of control of Parliament and its own policies.

Energy Policy

I have already criticized the energy policy developed by Energy Minister Taylor particularly its retention of the targets for reducing emissions and his support for increased usage of renewable and the emergence of estimates of much higher costs for the latter than previously thought. I have also questioned the use of divestiture powers by a minister who would be doing so on the basis that he accepted advice that a company displayed “market disconduct” and was not allowing prices to fall.

Reports emerged this afternoon that, instead of voting on a bill to give effect to Taylor’s “model” (sic), Treasurer Frydenburg has announced that the divestiture power would become a component of election policies. He is reported as saying that

“Our legislation to prohibit energy market misconduct is an important reform that aims to hold the big energy companies to account and drive competition in the market and lower prices for consumers. We will be taking this policy to the election which forms our response to the ACCC inquiry into retail electricity prices. It was on the Labor Party’s watch when they were last in government that electricity prices doubled and now they are obstructing key reforms which save money for Australian families and businesses” (see Coalition Says Big Sticks Policy Now To Be Taken to The Election).

The report also makes it clear that had the government attempted to pass the bill now it would have faced major amendments from Labor. This seems to confirm that there is likely to be an early election – possibly immediately after the budget.

Election Campaign Start? No Comprehensive Coalition Policy; Cabinet Re-Shuffle Needed; Mistakes Made By Climate Warmists; Others Have Walls

Des Moore — Thu, 17 Jan 2019 03:59:31 +0000

Unofficial Election Campaign Starts – But Slowly

While Morrison says he will not attempt an early election, the New Year is seeing the re- emergence of debate on issues such as border controls. It is pointed out that, while “Labor softened its asylum-seeker policy at its national conference last month by formally endorsing doctor-ordered medical evacuations off Manus Island and Nauru, it remains committed to boat turnbacks when safe to do so, offshore processing and regional resettlement.” But Morrison claims “they will abolish temporary protections visas and last year voted to end offshore processing as we know it in the parliament. And they had no clue what they had done’’ (see Dispute over OZ Border Policy).

However, the most “issues-attention” has been given by Treasurer Frydenberg and Home Affairs Minister Dutton and there is no sign yet of a more comprehensive presentation of Coalition policies even though Turnbull has gone and he seems to receive less media coverage. The decision by Morrison to make the present official visit to Vanuatu and Fiji is obviously driven mainly by the increasing attention being given by the Chinese to Pacific Islands. But the development of a comprehensive Coalition policy seems more important and the Foreign Affairs Minister should be able to handle the Pacific Islands. True, a more knowledgeable/presentable person than Payne could be useful (she was initially appointed by Morrison after Bishop resigned). Indeed, it would be desirable to have a major re-shuffle of Cabinet before the election, including the re-appointment of Abbott and Abetz.

An important election issue has emerged from the revelation in an OECD report that Australia relies on revenue from company taxes for 16 per cent of budget revenue, which is the highest share in the advanced world and compares with an advanced nation average of 9 per cent. As David Uren points out, “the failure of the Turnbull government to break the Senate gridlock last year to legislate a phased reduction in the company tax rate for big businesses to 25 per cent has left Australia among a group of 18 nations with a standard company tax rate of at least 30 per cent, nearly all of them developing nations” (see Australia Has High Company Tax Rate).

Another important election issue is, of course, energy policy and the promise to reduce electricity prices. I drew attention in the 12 January Commentary to Alan Moran’s analysis showing there is scope to start doing this by effecting a reduction in government subsidies. Recent evidence of statements by warmists which have been shown to be badly wrong could also be used as a basis for justifying the moderation of Australia’s policy.

These include a survey by the UK’s The Global Warming Policy Foundation, started by a former UK Chancellor of the Exchequer, Nigel Lawson, from 1983-89. The incorrect warmist sayings are summarized below for each month of 2018:

January 2018: Worst-case global warming scenarios not credible: Study. PARIS (AFP) – Earth’s surface will almost certainly not warm up four or five degrees Celsius by 2100, according to a study released Wednesday (Jan 17) which, if correct, voids worst-case UN climate change predictions. A revised calculation of how greenhouse gases drive up the planet’s temperature reduces the range of possible end-of-century outcomes by more than half, researchers said in the report, published in the journal Nature.

February: ‘Sinking’ Pacific nation Tuvalu is actually getting bigger, new research reveals. The Pacific nation of Tuvalu — long seen as a prime candidate to disappear as climate change forces up sea levels — is actually growing in size, new research shows. A University of Auckland study examined changes in the geography of Tuvalu’s nine atolls and 101 reef islands between 1971 and 2014, using aerial photographs and satellite imagery. It found eight of the atolls and almost three-quarters of the islands grew during the study period, lifting Tuvalu’s total land area by 2.9 percent, even though sea levels in the country rose at twice the global average.

March: BBC forced to retract false claim about hurricanes. You may recall the above report by the BBC, which described how bad last year’s Atlantic hurricane season was, before commenting at the end: “A warmer world is bringing us a greater number of hurricanes and a greater risk of a hurricane becoming the most powerful category 5.” I fired off a complaint, which at first they did their best to dodge. After my refusal to accept their reply, they have now been forced to back down

April: Corals can withstand another 100-250 Years of climate change, new study. Heat-tolerant genes may spread through coral populations fast enough to give the marine creatures a tool to survive another 100-250 years of warming in our oceans.

May: Climate change causes beaches to grow by 3,660 square kilometers. Since 1984 humans have gushed forth 64% of our entire emissions from fossil fuels. (Fully 282,000 megatons of deplorable carbon “pollution”.) During this time, satellite images show that 24% of our beaches shrank, while 28% grew. Thus we can say that thanks to the carbon apocalypse there are 3,660 sq kms more global beaches now than there were thirty years ago.

June: Antarctica not losing ice, NASA researcher finds. NASA glaciologist Jay Zwally says his new study will show, once again, the eastern Antarctic ice sheet is gaining enough ice to offset losses in the west.

July: National Geographic admits they were wrong about notorious starving polar bear-climate claims. The narrative behind the viral photo of a polar bear starving, reportedly thanks to climate change, has been called into question by the National Geographic photographer who took it in the first place.

August: New study shows declining risk and increasing resilience to extreme weather in France. This risk factor for French residents of cities stricken by a disaster has been falling with every passing decade.

September: Coral bleaching is a natural event that has gone on for centuries, new study. Coral bleaching has been a regular feature of the Great Barrier Reef for the past 400 years, with evidence of repeated mass events dating back to well before European settlement and the start of the industrial revolution.

October: Climate predictions could be wrong in UK and Europe. Current climate change predictions in the UK and parts of Europe may be inaccurate, a study conducted by researchers from the University of Lincoln, UK, and the University of Liège, Belgium, suggests.

November: Number and intensity of US hurricanes have remained constant since 1900. There’s been “no trend” in the number and intensity of hurricanes hitting the continental U.S. and the normalized damages caused by such storms over the past 117 years, according to a new study.

December: Alarmist sea level rise scenarios unlikely, says climate scientist Judith Curry. A catastrophic rise in sea levels is unlikely this century, with recent experience falling within the range of natural variability over the past several thousand years, according to a report on peer-reviewed studies by US climate scientist Judith Curry.

Today’s Australian also runs an article by climate expert Emeritus Professor Ian Plimer disparaging the claim still often made that 97 per cent of scientists conclude that humans are causing global warming. Plimer asks “Is that really true? No. It is a zombie statistic. In the scientific circles I mix in, there is an overwhelming scepticism about human-induced climate change. Many of my colleagues claim that the mantra of human-induced global warming is the biggest scientific fraud of all time and future generations will pay dearly” (see Plimer Disparages 97% Consensus on Global Warming).

There are many other examples of errors, in some cases deliberately made by “scientists” including for reasons not actually scientific, which could be used as a basis for reducing the emissions target set in Paris by Malcolm Turnbull when PM, but who had no scientific expertise on the causes of climate change.

Another important development in this context is the establishment by climate expert Viv Forbes of a Saltbush Club to conduct a national campaign to support Australia’s immediate withdrawal from the Paris Climate Agreement. Along with many others I have joined this club, which has now issued a press release pointing out, inter alia, that “Australia will suffer badly from the destructive energy policies being promoted in the UN’s war on cheap, reliable hydro-carbon fuels such as oil, diesel, gas and coal and the backbone industries that rely on them – mining and smelting, farming, fishing, forestry, processing and manufacturing” (see EXIT PARIS AGREEMENT- Break the Climate Chains Now).

Unfortunately, Morrison has already said that Australia must stick with the Paris Agreement even though it is not binding. He has probably been heavily influenced in making this decision by advice from his department, which includes staff who are strong believers in the dangerous global warming thesis. But, one way or another, he needs in the Coalition’s interests to over-rule such advice.

US Wall Policy

In the Commentary of 12 January I argued that “the President of the US is correct in identifying an immigration problem” arising in part from the absence of adequate control on the border with Mexico and noted that Greg Sheridan took a similar view. Subsequently, Trump has “declared he will never back down from his border wall to protect Americans, paving the way for a prolonged deadlock over what is already the longest government shutdown”. This view was strengthened somewhat by “a Washington Post-ABC News poll which shows that while a majority oppose the wall, support for it has grown over the past 12 months, from 34 per cent to 42 per cent” (see Trump on Walls).

It may also be strengthened by a survey published by Breitbart showing that government agencies and prominent individuals make use of walls. The survey shows extensive photos of such walls including those constructed by Hungary, Israel and Bulgaria (on the border with Turkey) as protection against illegal migrants. The survey covers a number of prominent US politicians (including Hilary Clinton) who have opposed the funding of the Mexican wall but who have themselves used protective walls in the US (see photo of Hungary’s Border Wall).

No doubt the controversy over the wall and the partial shut-down in Washington will continue. The latest development is an attempt by Speaker Pelosi to alter the State of Union address by Trump scheduled for 29 January. It appears that her reasons for alteration are rejected even by Democrat-leaning media (see Pelosi Tries to Postpone State of Union Address).

Morrison’s Poor Attempts at Compromise

Des Moore — Thu, 25 Oct 2018 10:45:17 +0000

If you are going to “do a deal”, and start from a weak position, you will doubtless have to compromise. But not so that you undermine the essentials of your position. But that is what Morrison is in fact doing with his energy policy: he says that his prime aim is to reduce power prices but at the same time he sticks to the emissions reduction policies and does nothing to reduce subsidies for renewable. This is a contradiction and lower power prices will not be achieved in any degree if the joint energy policy statement by Taylor, Morrison and Frydenberg is realised.

Morrison has also made the astonishing decision to send Turnbull to a UN Bali conference which will be attempting to agree on climate change policies which would (somehow, but nobody knows how in fact) protect the oceans. This decision further undermines confidence in the capacity of the Morrison team, which has ministers who could have gone. Some such conferences are even attended by the local ambassador and it is unbelievable that Morrison implied that only Turnbull had to replace him because of his other (undisclosed) commitments.

Andrew Bolt and Terry McCrann have shown how absurd the current attempt is at compromising. Bolt’s analysis is below and McCrann’s is attached in McCrann on Morrison.

Andrew Bolt: Turnbull no good for ScoMo and must be dumped

POOR Scott Morrison is in an abusive relationship and can’t get out. Memo to the Prime Minister: dump him. Don’t send Malcolm Turnbull to Bali. Turnbull is no good for you. You keep giving in to him but he’ll keep slapping you around.

So here’s where you make a stand: tell that bully he’s out. You’re not sending him as your representative to next week’s Ocean Conference in Bali after all.

It is astonishing that Morrison does not see how stupid it is to send Turnbull to a conference where organisers say “participants are encouraged to announce their commitments …. to preserve the oceans’ health” from threats including “climate change-related impacts”.

Really? What a dumb decision from the get-go. After all, Morrison has been trying to convince voters he’s actually keener on cutting their power prices than on cutting global-warming emissions, which was Turnbull’s obsession. He’s boasted how he won’t send another dollar to the United Nations’ Green Climate Fund, to which the Liberals handed $200 million. So how does it help the Morrison Government to now send a red-hot, global-warming believer like Turnbull to a conference demanding more action on global warming?

It can only make Morrison seem a flake or a fraud. If he really needs to send an ex-prime minister to Bali, he should send climate sceptic Tony Abbott, instead. That would send a more accurate or consistent message.

But I get it. Morrison was desperate to keep Turnbull sweet after he was dumped as prime minister two months ago. He didn’t want Turnbull lashing out in his famous fury, leak damaging secrets or wrecking the Liberals’ recovery — just like Turnbull ratted out late billionaire Kerry Packer to the Australian Broadcasting Tribunal when they fell out over their bid to buy the Fairfax newspapers. Scott Morrison should send climate sceptic Tony Abbott to Bali instead, to send a more accurate or consistent message.

So Morrison gave Turnbull this Bali trip as a sop to his wounded pride. He also guaranteed him a travel fund and, at every stage, insisted on praising Turnbull rather than burying him. But with every gift, how did Turnbull reward him? With a slap in the face.

Turnbull quit parliament, forcing a totally unnecessary by-election in his seat of Wentworth that would cost the government its one-seat majority. Turnbull also pointedly rejected urgent appeals to help Liberal candidate Dave Sharma, who lost narrowly.

Meanwhile, Turnbull surrogates and relatives urged voters to reject the Liberals and made fake claims of Liberal MPs bullying women. Someone also leaked Cabinet secrets to rob Morrison of credit for government announcements.

It was pathetic. And it was war. How much more evidence does Morrison need that Turnbull has a deep need for the Liberals to fail, to prove to himself that they were wrong to sack him? Turnbull will keep abusing the Liberals, perhaps for the rest of his life, so for Morrison to keep trying to placate the implacable makes him seem a poor judge of character.

But, worse, it makes Morrison look weak, and in every which way. Here is Morrison rewarding a man who sabotaged his campaign to save Wentworth. That’s weak.

Here is Morrison even now making Turnbull look needed, as if sacking him really was an awful mistake by a party which can’t now survive without him.

That’s weak, too. How does it help the Morrison Government to now send a red-hot, global-warming believer like Turnbull to a conference demanding more action on global warming?

Morrison is also presenting Turnbull as the best person he could find — better than himself, his Foreign Minister or his Environment Minister — to represent Australia in Indonesia. That makes his whole government look weak. What’s more, Morrison is giving a platform to a former prime minister who now wants the Liberals dead. That doesn’t just make the Liberals look weak, but makes them so.

And Morrison is using Turnbull to promote exactly the global- warming issue that Labor, the Greens and the ABC will use to smash the Liberals at the next election. That weakens the Liberals even more. Morrison needs to show some strength and independence from the ghost he’s invited on to his table.

So ring Turnbull, Prime Minister. Tell him he is a backstabber. Tell him he’s neither wanted nor needed. Tell him there are plenty of people in the government who could represent Australia better.

Dump him. No Bali for him. Of course, you risk having Turnbull’s dwindling bunch of mates in the government — people like the ineffable Craig Laundy, say — then going the full jihad on their own side.

That would weaken the government, too. But in this battle of the weak, wouldn’t it be good not to seem weak yourself?

I have succeeded in having a letter published in today’s Australian, albeit with a chunk deleted (see text below). The Australian also ran other letters (see OZ Letters) which are sympathetic to the sceptic view as reflected in an article by Senator Williams published in The Australian pointing out the large number of, but still increasing, coal-fired power stations in overseas countries. The Australian, which has a new editor, also published a rather “mixed” article on attitudes to climate change within the Coalition and to the meeting being arranged by Energy Minister Taylor with State counterparts tomorrow (see Morrison “Selling” Energy Policy).

I have been unable to download today’s AFR’s lead article headed “Labor rejects big stick on energy”, but which implies that Labor will generally support what would amount to the de facto nationalisation of the electricity industry by Morrison, assuming his policy is fulfilled.

Closing off coal would result in self-inflicted wounds

Letter by Des Moore Published in The Australian, 25 October 2018 (Bits in square brackets deleted by Ed).

You report that [, following its electoral defeat at the Wentworth by-election,] the Morrison government will set a price benchmark for power bills from next July. This is on the advice of Chief Scientist Finkel [appointed by Malcolm Turnbull] that the government should do more on climate change because it is an issue of concern to “everyday voters”, despite Finkel’s acknowledgement that the reduction in emissions by Australia is having no effect on the climate.

Perhaps Morrison’s decision also reflects the view of the Wentworth winner, Dr Phelps, that the government has lurched “too far to the right”. Instead the Morrison government will take its first step towards a socialist economy under which governments controls electricity prices.

[Will the next step be to adopt Dr Phelps objective of having 100 percent renewable? As Alan Jones suggested on 2gb this morning, perhaps Morrison could experiment with electricity fuelled by100 percent renewable in Wentworth, with numerous wind farms along its coastline.]

Interpreting Wentworth Result

Des Moore — Mon, 22 Oct 2018 07:29:49 +0000

Wentworth A Victory for Turnbull ?

It is now well known that Turnbull initially sought to join the Labor party and it was recently reported that it was the then PM Bob Hawke who knocked him back. Turnbull then tried the Liberal party and succeeded in twice being elected leader and, after succeeding in forcing out Abbott as PM, he became PM himself. But he was only there for a short period before Newspoll put the Coalition behind Labor on a TPP basis and that continued to be the case for 40 successive polls. On 24 August he lost his position as PM and resigned from Parliament and his seat in Wentworth after Scott Morrison was elected.

From the final Coalition TPP poll under Turnbull of 49/51 on August 12, Scott Morrison experienced an initial fall to 44/56 on August 12 but there has been some recovery to 47/53 on October 14. I wrongly assumed there would be another poll today but that will presumably occur next Monday. However the big swing against the Liberal Party in the Wentworth by-election ( currently put at about 19 per cent) suggests that Newspoll is likely to fall back.

The main reasons for making this assessment are that Morrison has refused to attribute any blame for the Wentworth loss to Turnbull and has failed to make any substantive indication of the policies he and his main partner Treasurer Frydenberg will adopt under their government. I have dealt with some of the confusion which has emerged in my previous Commentary. Today we have numerous media comments assessing the situation but, in my view, the two best are both by Andrew Bolt in the Herald Sun and other newspapers, as well as on TV.

This Bolt report outlines some of the problems with Turnbull as PM and here are some of the problems he assesses with Scott Morrison’s handling of the situation since he became PM almost a month ago. It is difficult to see how Morrison can continue as leader of the Liberal Party and stand any chance of a Coalition win in the general election whenever that occurs. More importantly in a way, it is difficult to see how the Coalition can present itself as a substantive political party unless it reverts to Abbott’s leadership and he brings out (again) the main policies which it supports.

Wentworth Loss Requires Policy Revisions

Des Moore — Sun, 21 Oct 2018 05:12:34 +0000

Wentworth Loss Much Worse Than Expected

In Friday’s Commentary I said that it was ‘almost certain’ that the Wentworth seat would be lost – but not by as much as actually happened, with the swing against the Liberal Party being around 20 percent. It is not appropriate here to repeat all the problems now faced by the Coalition with a hung Parliament (see Friday’s Commentary on Wentworth Almost Certainly Lost now on my website www.ipe.net.au). Nor to repeat what many recommended some time ago, viz that Turnbull should have then been dumped. But it is not only Wentworth that poses serious problems: the next Newspoll, presumably tomorrow, will send bad news too.

One question is whether the strong Turnbull influence on Wentworth voters needs to carry through to the federal election. While it is risky to attempt to implement major changes in key policies, and a reshuffle of ministers, this now seems the only way to reverse the bad polling which developed and persisted under Turnbull. But do the present top two leaders, Morrison and Frydenberg, have the capacity to persuade their colleagues to agree to major changes?

One starting point could be energy policy or what is commonly called climate change. A start has been made there with the abandonment of NEG and the decision not to contribute further funds to the UN’s $100bn pa aid project for developing countries. But it needs to go much further.

Relevant here is the discussion on TV which I watched on last night’s SKY News after the booths in Wentworth had closed. During that period editor David Speers chaired a panel of four and in due course asked what they thought had been the major influence on voters decisions. It quickly became clear that they judged it to be “climate change”, that is, that the Morrison government had made the wrong decision in moderating the policy they inherited from Turnbull. The winner at Wentworth, Phelps, had in fact made “do more on climate change” an important component in her comments that included that the Coalition has gone “too far to the right”.

This implies it would be wrong to effect further moderations in Australia’s climate change policy. But that is the kind of risk that Morrison, with help from others such as Abbott, needs to take if the Coalition is to have a chance of winning the general election and, of course, if it is not forced prematurely to hold such an election by the now five independents who would be able to oppose legislation in the Lower House and support no confidence motions by Labor.

Government Policies/Advocacies

Des Moore — Thu, 04 Oct 2018 00:56:06 +0000

Today’s media contains reports which are of serious concern in regard to the capacity of governments and political leaders to operate or propound policies which are in the interests of communities considered as an entity rather than of particular groups. These are briefly described below and, except for two, the attachments.

Morrison Government Policies

I have already expressed some concern that the Morrison/Frydenberg government is portraying itself as too close to the Turnbull regime. This seems to be reflected in statements and policies which are now being made and/or implemented by those two. For a start, it is now reported that, instead of distinguishing his government from Turnbull’s, Morrison has in fact offered Turnbull in New York that some of his travel costs on “government business” could be met (see Turnbull’s Travel Costs Offered by Morrison). This comes on top of his acknowledgement of having frequent contact with Turnbull in NY.

And, although Morrison is attacked front page in the Fairfax press on failures (sic) to implement climate change policies or indeed to take them further (see Fairfax Attacks Morrison for Abandoning NEG), Fairfax overlooks his retention of emissions reductions and increased renewables while continuing, contradiction ally, to claim that power prices will be reduced and that he has appointed a minister to do this. No indication has been given as to what attitude the government takes to the IPCC report to be released on Sunday next and which is already reported to once again be endorsing the dangerous warming theory. This despite it being the umpteenth such report which has made incorrect temperature predictions and failed to attribute to reasons other than CO2 increases which may have caused temperature increases (see attached letter published in The Australian by expert analyst William Kininmonth on CChange).

As to the budget, the Australian’s David Uren notes that while “the Morrison government appears to have decided that budget repair is mission accomplished,

big spending decisions — the $4.6 billion fix for school funding and the $9bn fix for Western Australia’s GST — are unlikely to be offset by savings. There is still a drought package, a small business tax package and a federal election to come” (see Morrison/Frydenberg to Ease Budget Policy?). Yet while both Frydenburg and Morrison have acknowledged that new spending should be offset by savings, they do not give any undertaking of such action. Uren rightly concludes that “there should be a greater buffer against adversity in the budget before we start spending surpluses that are yet to arrive”.

As to the ABC, apart from the appointment of the very pro-ABC Ferguson as acting chair (for which there has been no explanation), Morrison seems happy that the inquiry by the Departmental head will provide a satisfactory basis for possible changes. Yet controversies continue about what actually happened to instigate the sacking of Guthrie and why Ferguson could not have been requested by the Minister for Communications to make obviously-needed changes as a condition of her appointment. In the attached article (ABC Stuck with Greenism) former Chair Maurice Newman identifies many but his reference to the failure to handle complaints (0.5% upheld !), and the rejection of an analysis by expert Meteorologist Bob Fernley-Jones, indicate the need for immediate change (and for there to be a change which would give credibility to the government).

As to foreign policy, the increased foreign activity by a China, now run by a Marxist who has “shuffled” leaders to centralized power in himself, requires much greater expressions of concern by Australia. This applies to inter alia a number of Chinese activities including in the South China sea. Defence Minister Pyne, who addressed a dinner I attended on Wednesday evening, said that Australia will be participating in an official group which will be sailing through the SC sea but did not say whether that group would accept any Chinese restrictions and what it would do if the Chinese acted as it did against a US ship (see Chinese Threaten US Warship).

Morrison’s attempt to explain that Australia has good relations with both the US and China fell short of what our foreign policy requires, which would include endorsement of US policy supporting independent nations and which recognises how important to us the US is militarily. Pyne mentioned that we have increased defence spending since the cut-backs under Labor and said the aim is to lift defence spending to 3% of GDP from the 1.9% aim in 2018-19. But we are small and the planned new subs have not yet been started and will not be ready until 2030.

This situation requires closer support of US defence/foreign policies, including the de-nuclear policies in regard to Iran, which has now attempted a bomb plot in France where the counter-government for Iran is situated (see France Threatened by Iran). The US describes Iran as “the world’s top sponsor of terrorism” and it has conducted terrorist activity in countries distant from itself. Australia should recognise and support the US policy on Iran.

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.

Coalition Goes Backward Under Morrison

Des Moore — Mon, 10 Sep 2018 12:13:45 +0000

Newspoll Confirms Morrison Failure

One might have thought that the second Newspoll after the election of Scott Morrison as PM would produce something of a lift since the one published a fortnight ago on 27 August. That showed the Coalition on a TPP of 44/56 (and a primary vote of only 33) after Turnbull was dismissed on 24 August. But now we have on 10 September the same TPP for the Coalition and only a one percentage point lift in its primary vote – but, and for Labor too.

The Australian headlines this as “PM offers hope but rout looms” and editorialises that “provided Liberal MPs are prepared to put the national interest ahead of internal gripes, Scott Morrison has a fighting chance of leading the Coalition out of its electoral malaise. Doing so will require more than a change of style and philosophy, although these factors matter. Bold policy changes that differentiate his government from the opposition are more important, along with the ability to sell them to a weary electorate and highlight the costly pitfalls of the Labor alternative” (see Oz Editorial on Morrison).

This is an improvement on the softly, softly approach adopted hitherto by The Australian. But it fails to identify the urgent need for Morrison to expose the problems he has inherited and to acknowledge that he was wrong to accept Turnbull for so long. If his expositions continue down the same path as recently, that will encourage Turnbull (and sympathetic media) to claim victory – “I succeeded in moving the Liberal Party well to the left”.

And his Deputy Frydenberg must also change his absurd exposition that he regrets having to dispose of the NEG he composed for Turnbull! This despite the fact it would have hanged a very large stone around the neck of the Liberal party. Amazingly, he told the ABC (why it?) “Well, no one is more disappointed than I am about ” having to dispose of NEG. Even leaving aside the stone, his claim that it passed through the party room thrice suggests it is still OK. Yet the decision to kill it off has not been through that room but was presumably taken by the Morrison/Frydenberg clique!! (see Strewth) And it still leaves an unworkable policy.

Nor has the party room approved the new energy policy announced by Morrison (and presumably approved by Frydenberg). Properly analysed, this policy is worse than the NEG compiled by Frydenberg with Turnbull’s approval. It is not surprising that Labor is saying that it might adopt NEG or a version of it. Morrison also has a Cabinet which John Stone described in last Friday’s Spectator as “little changed in orientation from its predecessor” (text of Stone is attached to my Commentary of 8 September on my web www.ipe.net.au).

In considering voters assessments of the “Most Important Issues”, Newspoll displays the following, viz

Energy prices 22

Hospital and aged care 21

Assistance to farmers 21

The Budget Deficit 16

National Security/Refugees 11

School Funding 5

Uncommitted 4

By comparison, in today’s Herald Sun Andrew Bolt presents more immediate priorities to which Morrison should have regard, viz

“MORRISON’S NO-BUT-YES WILL DESTROY THE LIBERALS

Scott Morrison and Josh Frydenberg are giving a lot of no-but-yes waffle.

No, they won’t cut emissions rather than cut electricity prices, but, yes, they want emission targets and will stick with the Paris Agreement.

No, the Paris Agreement emissions targets don’t cost us, but, yes, Labor’s targets will.

No, Energy Minister Angus Taylor says he won’t back green schemes that cost plenty but don’t cut the temperature, but, yes, he’ll keep funding lots more renewable energy.

No, the answer to this (unspecified) bullying of Liberal women is not quotas for female MPs, but, yes, the Liberals need more of them.

No, Morrison won’t fight culture wars, but, yes, he thinks we need more religious freedom.

No, Morrison doesn’t think we should cut immigration, but, yes, there is a problem.

No, this new leadership isn’t a change from Turnbull, but, yes, Morrison said will be different “points of emphasis“.

The Liberals desperately need a clear new direction, but their new leaders seem too scared to give one. The Liberal Left would revolt.

Conclusion: unless this changes fast, the Liberals simply cannot fight for what most conservatives want. They are not fit for service.

So now what?”

PS The failure of Liberal Party leadership is not confined to the Federal Party. The dramatic loss of votes in the NSW by-election in Wagga Wagga, and the almost certain loss of the seat, exposes deficiencies in the NSW leadership too (see NSW Loses Wagga). The Liberal Coalition in Victoria will also suffer in the imminent November election.