Institute for Private Enterprise » TPP

Coalition Facing Almost Certain Electoral Defeat

Des Moore — Wed, 07 Mar 2018 23:51:25 +0000

Coalition Still Faces Electoral Defeat

Although the Newspoll published on 5 March showed no change between the Coalition and Labor on a TPP basis (47/53), Turnbull’s Dissatisfaction rate fell from 54 to 57 and is now worse than Shorten’s (56). As to who is a Better Prime Minister, Turnbull’s rate fell from 40 t0 37 while Shorten’s rose from 33 to 35.

There is no doubt that the Joyce affair (which now seems more extensive than portrayed) contributed to his polling deterioration and some have suggested that this may be a one-off. But arguably the deterioration reflected more on Turnbull’s capacity as a leader than the exposure of the affair itself. It is particularly pertinent that the Newspoll took place after an apparently successfully official visit to Trump, with considerable apparently favourable publicity. The Australian’s political editor, Dennis Shanahan, described developments prior to Newspoll (including the outburst by Senator Michaelia Cash) as reflecting

“ a confused and dispirited government. Cash, who is still under pressure and awaiting a federal police investigation into the advance leaking to the media of a police raid on AWU headquarters, is clearly Labor’s next target for destruction. These gulls aren’t settling for one chip. They want the lot and the battered fish to boot.

Labor has the bonus of not only deflecting legitimate criticism but also burying the Coalition’s undoubted achievements with the farces played out before the nation. Turnbull has clearly struck a responsive chord with US President Donald Trump after a rocky start. He is standing firm on Chinese interference, the economy is doing well, the numbers on welfare are falling and job growth is strong.

But there are only three more sitting days for the House of Representatives before the budget in May, three days that are likely to lose more ground for the Coalition, three days that won’t provide time for a reasoned budget explanation, and three days likely to ensure Turnbull faces 30 losing Newspolls in a row, his own definition of leadership failure.

Turnbull holds on to the $4 billion pumped-hydro scheme, Snowy 2.0, as if it were a talisman and hopes it will turn his fortunes. But if the government’s behaviour of late is any guide, he will have to do what Snowy 2.0 is meant to do — push water uphill(see Shanahan on Turnbull)

As to Turnbull’s visit to Trump, the transcript of the press conference held by both togetherconfirms that Turnbull’s visit was a success inasmuchas it covered the main issues of interest to Australia and our bilateral relations with the US (see Press Conference by Trump/Turnbull 24/2, where I have highlighted some particular references). It also indicated that Turnbull regards Trump as someone he now feels comfortable in dealing with –“100 years of mateship” –although no mention is made of climate change policy or tariffs on either side, implying perhaps that Trump did not think Turnbull was an important player in those areas.

In fact, as Terry McCrann suggests, it is doubtful if Turnbull understands that Trump does not operate as President in the way that other Presidents would have (see McCrann on Turnbull). By way of example McCrann points out that

“Trump had said he would take the US out of the Paris accord; Turnbull acted as if that was all just blather and that President Trump would come round to behaving exactly the same as a president Clinton. Maybe he’d even notice Turnbull’s global leadership and recognise the error of his ways. Certainly couldn’t hurt.On the latter Turnbull would have been right; Trump couldn’t give too hoots what Turnbull said or did. For heaven’s sake, has the PM noticed how Trump has blown off all and sundry? Trump has gone ahead and signalled he will stick to offing Paris”.

McCrann gives other examples of “Trump behavior” which should be taken into account in framing Australian policy, viz the TPP trade agreement which two of the biggest traders (the US and China) have not signed but Australia has and Trump’s decisions to impose tariffs on aluminium and steel. The decision by Turnbull (and others) to raise concern about the possibility of a “trade war” involving retaliatory exchanges of tariff increases is legitimate. But fails to take account of the other measures that protect domestic industries and that should in theory be abandoned. These involve much more than tariffs, such as the large subsidies of agricultural production in the European Union which have adverse effects on Australia. Turnbull has not shown any recognition of this component of protectionism.

Trump’s tariffs can thus be seen as adding only another item of fairly limited significance to the overall level of protection and may be justifiable because the main offender (China) is subsidizing its production of steel and aluminium. World Trade Organisation data also shows China has one of the highest average tariff rates on non-agricultural goods (almost double the US’s). Yet protective governments, such as China and the EU, are threatening to “retaliate” and may already have started to do so. If this goes to the WTO for discussion (which is the normal procedure, one of which I briefly attended when it was GATT) it would then open up debate between the three (and others) about relative protective levels. That could result in even higher tariffs or other measures, or it could produce a more efficient outcome. It may be recalled that the Doha round of discussions failed to reach agreement on lowering protection and this does not suggest a good outcome.

But Trump’s initiative may have stirred the pot again and this might even lead to a better outcome on protection generally. Meantime, today’s news reports that a US steel manufacturer has announced the re-employment of 500 workers. Trump’s initiative certainly doesn’t warrant the comments (incl by our RBA governor) that imply that its tantamount to starting a trade war.

As to interpreting climate policy, the article published in today’s The Australian by Maurice Newman refers to a number of expert critics (there are many more) of climate change policies and adds that

“Not feeling duped, are successive Australian governments that have become committed members of a green-left global warming movement promoted by the UN. On dubious scientific grounds they have agreed to accept meaningless, anti-growth, CO2 emission targets that enrich elites and burden the masses” (see Maurice Newman on Climate Theories).

Newman’s article is less important in outlining the views of expert critics than it is by being published by a leading newspaper: media reports which suggest that climate policy is falsely based have improved here and in the US but are still fairly rare. My Commentary series helps and readers may be reminded that I have been summarizing the analytical situation as follows

“ There has been no correlation between increases in emissions and temperatures, with the latter actually falling in the 30 years prior to the late 1970s, the increase in the next 20 or so years reflecting temporary natural influences not usage of fossil fuels, and there then being a much smaller rate of increase in temperatures than in carbon emissions”.

In short, as more historical evidence emerges of changes in temperatures and in CO2 emissions, and as Trump’s policy widens in the US, the stage is being reached where existing climate change policies have less and less credibility as do the governments and ministers who promulgate them. This has been heightened recently by the report by a US Congress Committee that indicates that Russians are using the international communications network to send out messages through Facebook, Twitter et al warning that the US must take more aggressive action to prevent dangerous global warming!

In Australia I have received a message on climate policy which names our Environment Minister as “Frightenberg”, presumably implying that he is frightened that his credibility may be diminished if he doesn’t sticks to a policy that is politically popular. Yet one of the reasons for the poor polling of the two major parties is their unequivocal endorsement of the dangerous warming thesis and their refusal to recognize that, even if the whole Paris Agreement is met (which it certainly won’t be), it would have a miniscule effect on temperatures. While there has been no independent government review of the climate policy, the average citizen in Australia is becoming more and more skeptical about it.

Energy Policy, Turnbull Down 3 Points

Des Moore — Mon, 19 Jun 2017 08:02:39 +0000

The debate over energy policy (which is really about climate policy) looks like continuing apace, with today’s AFR reporting a discussion at tomorrow’s joint Party Room on what it describes as “the energy crisis”. The fact that the Nationals are invited certainly suggests that there is a crisis of sorts (as a separate party, they do not normally participate). Deputy PM Joyce is pictured in the attached digital version practicing with his whip (see Mix of Energies Will Do) and as suggesting that there may be a discussion of a government-owned coal-fired generator. It surely can’t be that such a possibility might be seriously discussed: with an energy policy involving an increase in renewable (under a Finkel 42% by 2030) coal usage would progressively decline and there would be no new investments in coal-fired generators. In such circumstances any government coal-fired generator would lose money and would have to be subsidized. It would not on its own “save” coal.

In similar vein Joyce’s comment about being “completely agnostic” about the mix of energy sources does not stand up: any energy policy involving a large usage of renewable, and a plan to further increase that usage, would spell the end of coal-fired power. Any realistic discussion has to include a serious consideration of allowing Australia to not strictly observe the target of a 26-28% reduction in carbon emissions. I suggest this in my lead letter in today’s Financial Review below.

Emissions target should be reviewed (Letter published in AFR, 19 June 2017)

Phillip Coorey has rightly pointed out that “the energy industry is years ahead of the political process and long ago started following the money trail towards cleaner forms of energy” (“Every galah in the pet shop is now an energy expert”, 17-18 June 2017). He refers in particular to one 2017 forecast for renewable to “take 76 per cent of the $88 billion Australia will invest in new power generating technology over the years to 2040”.

One wonders, however, whether they have used the right model. Australian energy producers, and the businesses and households who purchase their product, need to recognise that they will face competition from their counterparts in one of the three countries which are the biggest emitters (China, India and the US). Policies in those countries are not designed to achieve lower targets of emissions before 2030, which means they will have lower costs than Australian businesses which will increasingly rely on energy from the much higher cost renewable. Electricity prices will rise even further.

It seems possible that in due course other countries may follow the three biggest emitters by deciding not to strictly observe the emissions targets which they voluntarily agreed to in Paris (there is no penalty for missing a target). For Australia, our government may need to consider the possibility of following the three largest emitters, viz at least for the time being, drop the target of a 26-28 per cent reduction in emissions by 2030.

Des Moore, South Yarra, Vic

The need for such a major policy change is not simply related to having a sensible climate policy. The latest Opinion Poll suggests it is needed as a start for the Coalition to save the next election. The fact that the Coalition’s poll has now been well below Labor’s on fourteen successive occasions sends a message that it either has to have a complete reversal of policies or Turnbull has to be replaced – or probably both. Although the TPP of 47/53 has not got worse, Turnbull’s net satisfaction rate did and his performance rate actually went down 3 percentage points to 32 per cent (see Turnbull’s Same TPP Polling but worse Performance). Enough said!

Polling Result for Budget

Des Moore — Mon, 15 May 2017 10:58:08 +0000

There are three things which stand out from today’s polling:

Both Newspoll and the Fairfax/Ipso poll show Labor the same distance ahead of the Coalition with Labor holding a lead of 6 percentage points on a TPP basis (53/47) in each poll;
Neither leader has a favourable net satisfaction ratio in Newspoll, with Turnbull on 33/53 and Shorten on a 32/54 satisfied to dissatisfied ratios;
The total who feel worse off after the budget (45%) is less than after the 2014 budget under Abbott (69%) in Newspoll. But more feel worse off than after each of the last three years of Labor’s budgets. Note that only 19% feel better off and 36% are uncommitted after this year’s budget. The age group which feels worst off after this year’s budget is the 35-49ers, with over 50s feeling least worse off ;

The media treatment of the implications of the two polls differs, with Fairfax arguing that the reduction in the Coalition’s TPP from 45/55 since the last Fairfax poll should be treated as a “boost in support and voters have applauded its big tax increases and spending measures” (see Coorey on Fairfax Poll). However, the reduction in the TPP under Newspoll (from 48/52) is interpreted by The Australian’s political editor Shanahan as a failure of the Coalition’s attempt to make “the 2017 budget unashamedly as a political document”. He also points out that “with barely a nod to real economic issues, the Prime Minister and Treasurer ditched decades of Liberal precepts and principles with the aim of lifting Coalition two-party-preferred support in today’s Newspoll”. He adds that Turnbull has now “delivered his 12th consecutive loss to Labor — almost halfway to the death sentence of “30 losing Newspolls” he delivered Tony Abbott” (see Shanahan on Newspoll). Crowe says the poll is “a blow to Malcolm Turnbull’s plan for a political recovery, voters have shifted to Labor and the Greens while voicing concern about budget tax increases, with 45 per cent saying they will be worse off from the budget” (see Crowe on Newspoll).

All in all, there is no way that even the Fairfax poll’s improvement can be regarded as a boost in support for the Coalition. Rather, the opposite. On either poll the Coalition remains well behind Labor following the Budget and The Australian’s editorial identifies some of the problem’s which now emerge viz Treasurer Morrison’s pre-budget remark that he “regarded the budget as make-or-break for his own career and the government” and that ”within the Coalition the Newspoll strengthen the hand of Turnbull critics who resent the government’s leftward shift on to Labor turf and its divergence from conservative principles of smaller government and lower taxation” (see Aus Editorial on Budget).

Both leaders are now trying to “sell the Budget” (or not). In reality, as the polling of net satisfaction ratios indicate, voters dislike both and it is difficult to see how either can turn those ratios around. Of course, Labor will not make any changes while Shorten continues to be in front. And on the Coalition side nobody seems willing to put their hand up. We certainly don’t seem to be set for “exciting times”.

Newspoll & Why Policy Changes Must be Made

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

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

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

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

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

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

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

Turnbull Must Go

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

Newspoll Confirms Turnbull Must Go

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

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

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

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

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

Islamic Policy

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

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

Turnbull to Follow Downer?

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

Bolt on Turnbull, Interpreting Bernardi, Costello at HRN

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

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

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

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

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

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

Turnbull, Shorten & Trump

Des Moore — Thu, 02 Feb 2017 07:10:26 +0000

Turnbull on Border Controls & Relationship with Trump

Turnbull’s address to the National Press Club was supposed to set out his policy agenda for 2017. Perhaps the first thing to note is that his text made no mention at all of the election of Trump as the new President of the US and the possible need for Australia to change some of its policies as the result of the major changes being implemented by Trump. This was surprising if only because of the importance of the US as a world power and our alliance with this country. But also because Trump appears to be reversing many of the major policies pursued by Obama, some of which have implications for Australia’s.

Perhaps that was because there appeared to be some uncertainty as to whether Trump would hold to the assurance he had given in his conservation with Turnbull that the US would accept the asylum seekers now on Nauru and Manus Island. Yet when, after his address, Turnbull was interviewed on 7.30 on the same day he told the interviewer ( a new man of Aboriginal descent who seems better than Leigh Sales) he had received confirmation earlier that day. He also told the interviewer that their resettlement would first be subject to a rigorous vetting by the US which, he claimed, is also true of Australia’s treatment of refugees. That this was not included in the text of his address seems passing strange as it could well mean that some of those on Nauru/Manus Island will not be accepted by the US.

Less passing strange is that the Washington Post has reported that Trump claimed the refugee resettlement deal formerly struck with Obama was “the worst deal ever”, before abruptly ending the 25-minute phone call. Trump reportedly accused Turnbull of seeking to export the “next Boston bombers” to the US, and complained that the deal was going to kill him politically. He reportedly said “I don’t want these people” while discussing the resettlement deal. This suggests that the vetting will likely to be rigorous!

Presumably reflecting also the wider controversy over Trump’s immigration policy, Turnbull did not say that Trump is adopting the same policy as Australia in “restoring integrity” to borders. Protesters in America and other countries (including Australia) have objected to the apparent temporary banning of entry from seven Middle East countries (and indefinite banning re Syria) and the resultant inclusion of some who hold US passports/visas or green cards. But such conclusions seem largely incorrect, possibly because the announcement was unclear. As pointed out by Times journalist Melanie Phillips “ Access to the US by the vast majority of the world’s Muslims will remain unchanged. The order doesn’t target people for their religion or nationality. It is aimed solely at countering the terrorist threat to America. The temporary seven-states ban allows for more rigorous vetting of individuals from those countries who are seeking entry to the US. The threat from these states is acute. Last November a radicalised Ohio State University student, Abdul Razak Ali Artan, ploughed a car into a campus crowd and stabbed people with a butcher’s knife. He was a Somali refugee who came to the US in 2014”. Phillips also refers to examples of immigration restrictions/bans under previous US governments, including Obama.

One of Trump’s Executive Orders also involves a tightening of controls on the US’s southern borders with Mexico, where Trump says he intends to strengthen the wall which covers part of the border. It is possible that Australia may at some future time tighten controls over additions to PNG residents seeking to cross the Torres Strait.

Some Other Aspects of Turnbull’s Address

It is hard to escape from Trump’s implementation of what Turnbull promised –“exciting times” – but has failed to deliver. Indeed “Essential” polling suggests that the Coalition is on a TPP debit of 46/54, with a primary vote of only 35 and the One Nation vote on 10 (see Bolt on Turnbull & Shorten). The last Newspoll had a debit of 48/52 in December. By comparison, and despite the protests which receive so much media coverage, a Rasmussen poll in the US shows that 56/34 support Trump’s policies (see Bolt on Trump). In short, Turnbull is losing ground in circumstances where “conservative” policies in the US are being supported.

Of course, it is early days and the “excitement” in the US is unlikely to last as the difficulties of implementing Trump’s policies become more apparent. But with such polling, Republican majorities in both houses are likely to run with the wolves. For Australia, Bolt and Sloan refer to the limited nature of the policies given play in Turnbull’s address. There is very little there that will attract attention from the electorate or the media.

Thus Bolt talks of Turnbull “spruiking child care and business tax cuts. He too talked of a crackdown on politicians’ expenses, but that was it … he staked out what will indeed be a big battleground until the election: electricity prices. Turnbull attacked Labor’s insane promise to triple the renewable electricity it will force Australians to use by 2030 — a promise of a 50 per cent renewable energy target costing an estimated $50 million. But the two big parties are satisfied if they just beat the other”. Sloan argues that Turnbull’s address was “ predictable, unenlightening guff. It was also gutless. Soaring rhetoric about opportunity and hand-ups doesn’t really cut it when the policy cupboard is so bare… We learnt very little in terms of any new policies from a leader who comes across as a classic insider while weirdly denying that he is a political hack. That the world may have moved on doesn’t seem to have dawned on him” (see Sloan on Turnbull).

If the Coalition allows Turnbull to continue as leader it now seems very likely that it will lose the next election and that, assuming she can attract suitable candidates, Pauline Hanson will win more seats in the Senate as well as in the Queensland elections, which could be held this year. Whether the LNP can become government in Queensland (it is currently on a TPP debit of 49/51) may depend on whether it forms a coalition of some form with One Nation, which has named 36 candidates for the next election there. Its effect at the Federal level may depend on how well it fares in Queensland but it does not seem to be a party that could help persuade the electorate to adopt the type of policies that are missing from the present Coalition ie the latter needs to dramatically lift its policies by changing leaders asap.

The Coalition’s “missing” policies include workplace relations (not mentioned in T’s address); defence policy (no indication by T of support for Trump’s executive order to destroy ISIS and no acknowledgement of the growing threat from extremist Islamic groups); climate change policy (no indication by T of any review of the dangerous warming thesis, of any possible reduction in Australia’s renewable or emissions targets and implied acceptance of the Chief Scientist’s extremely faulty preliminary report on the electricity sector); budget policy (T said savings on family tax benefit reductions would be spent on increased child care and gave no indication of a program of reducing middle class welfare).

Turnbull & Trump

Des Moore — Wed, 25 Jan 2017 13:04:11 +0000

As we get closer to the resumption of Parliament on Tuesday 7 Feb, many have increasingly wondered what issues the Turnbull government will prioritise in the New Year and how it will react to the new Trump government in the US. In today’s Herald Sun (see below), Terry McCrann suggests that Turnbull has offered few indications of the policies he intends to pursue actively and gives the impression that he is ill prepared to handle the new policies which Trump has indicated he intends to pursue in the US. This confirms, McCrann says, what he said back last April when he wrote that “Turnbull was a complete dud”. Perhaps Turnbull will make his position clearer in his promised major address on February 1.

As regards Australia’s foreign trade policy, it is pertinent that Trump has quickly confirmed what he repeatedly said during the election that the US will not be a participant in the Trans Pacific Partnership (TPP) agreement (Clinton said that too). The TPP was signed in February 2016 by only 12 countries after seven years of negotiations but has not come into effect because only Japan had ratified it before Trump confirmed his position. True, the agreement contained measures to lower both non-tariff and tariff barriers to trade and was presented by all member governments as conducive to increased trade and economic growth. True also is that, along with his decision to re-negotiate the North American Free Trade agreement and his threat to offset alleged subsidization of Chinese exports, Trump is therefore widely seen as a “protectionist” and a threat to international trade generally.

But it is in reality difficult to say to what extent this is or will be the case. There are certainly some analysts who dispute that there would have been net benefits from the TPP as agreed by only 12 countries and who see the current international treatment of Chinese trade more as a political policy aimed at modernise China and open up that country’s economy and social relationships. It is also possible that, as the supposed world leader in freeing up trade, the US has accepted trade agreements or trade policies which have not been favourable to it in net terms and which the Trump would be justified in changing.

Whatever, McCrann is right in saying that the TPP is dead, buried and cremated. It was futile for the Turnbull government to have Trade Minister Ciobo apparently attempting in Washington to revive the TPP by persuading Republicans to support such a policy. Surely our government would have decided before Trump took over that it would accept a US withdrawal from the TPP given that Trump had announced such a policy early in the US election campaign? Surely too it would have recognised that any attempt to have China take the place of the US, as Turnbull has seemed to suggest is a possibility, would be unrealistic given that China was not involved in the TPP negotiations and that Australia already has a “free” trade agreement with China?

What has quickly become clear is that Trump intends to pursue the same extended policy as Obama viz wherever possible, and wherever he judges it will benefit America, he will use his executive power to make decisions which reverse those made by Obama. Moreover, Trump is making these decisions as quickly as possible on the basis that he has an electoral mandate. It remains to be seen how far he can go with such an approach without experiencing legal challenges. But it seems likely that he will be able to reverse the many executive decisions made on environmental policy either by Obama himself or through his direction to the Environmental Protection Authority. Such reversals have important implications for Australian environmental policies and, judging by his handling of trade policy, Turnbull and his Cabinet will not have already considered them adequately, if at all.

As more is revealed about the background to Obama’s decisions in other areas, Trump is likely to implement more reversals. I have already mentioned that the now former head of CIA, John Brennan, had denied any connection between Islamic religion and militancy. This evening’s news reported that Trump has announced a policy of restricting immigration and access to the US for refugees and visa holders from Iraq, Iran, Libya, Somalia, Sudan, Syria and Yemen ie countries with predominantly Muslim populations. Also reversed are the prayer arrangements apparently made at the White House for Muslims and some other religions (see article below from a conservative news organisation in the US on Obama Crushed After Trump Orders White House To Stop His Sickest tradition).

Many commentators have complained that Trump’s policies have created uncertainty that will have adverse effects for his government and there is no doubt that there are numerous groups strongly protesting and demonstrating against his decisions. The other side of that coin is that Obama created uncertainty about US policies, both foreign and domestic, through the many major changes he made over the eight years he was in office and which also had many adverse effects. Arguably, while most of the media did not support Trump’s proposals, they were all subjected to intense scrutiny during a long election campaign in a democracy and should now be accepted as legitimate. Interestingly, the NY Times has apologised for its treatment of the election campaign. Perhaps the opposition will now start to moderate to the norm in democracies.

Turnbull’s Status Since the July Election

Des Moore — Sun, 04 Dec 2016 12:00:10 +0000

With the end of the Parliamentary session it is timely to assess the status of the Turnbull government and the latest “achievements” of a Coalition which offers itself as a provider of small government.

Will Turnbull’s Polling be Lifted?

The last Newspoll on 20 November showed the Turnbull Government with a TPP of 47/53, the exact opposite to what it was on 23 Nov in 2015 and down from the 50/50 TPP as recently as 12 September. Judging by what happened last year, there will be another poll in early December ie very soon. This should provide an indication of the extent to which, as Turnbull claimed in addressing the Party Room on 29 Nov (see Turnbull on Performance), “we are delivering … on the National Economic Plan” (sic). It will be recalled that, after an extended eight-week official campaign period and with the first election under a new voting system for the Senate that replaced group voting tickets with optional preferential voting, the Coalition lost 14 seats in the 2 July election. It is left with only a one seat majority and a Senate with 11 cross-benchers of diverse views (and 35 Labor/Greens and 30 Coalition).

Turnbull’s address to the Party Room on 2 Dec included claims of “delivery” since the July election on:

Over $20 billion in gross budget “savings” (these are over four years and mainly take the form of tax increases. Detail will be available on the latest budget position in the Mid-Year review due on 19 Dec);
”Reforming” of the superannuation system (this “saves” about $3bn pa and is entirely a tax increase agreed to by Labor and affecting better-off superannuants);
Agreement with Singapore to build $2.25bn of new defence infrastructure in Australia and send up to 14,000 military personnel to Australia for training, up from the 6000 a year now (negotiations started under the Abbott government);
Abolition of the Tribunal providing unwarranted regulation of truck drivers favourable to unions (done before the last election);
Amendment of Fair Work legislation to protect volunteer fire fighters in Victoria (as promised during the election campaign) ;
Passage of amended Registered Organisations legislation designed to make unions accountable for members money;
Legislation to restore the regulatory authority of the Australian Building and Construction Commission (passed, but with major changes after the Party Room meeting);
Passage of a tax of 15% on income earned by back-packers (this was accomplished after the Party Room meeting and was the subject of horse-trading, notably with the Greens, and providing $100 mn for landcare);
Passage of legislation authorising the retention of high risk terrorist offenders ( this also occurred after the Party Room meeting and was the third piece of national security legislation passed in the last fortnight).

The media has given a general assessment that Turnbull has made modest progress in reforms since the July election and that he can claim to have justified the double dissolution election on Labor’s refusal to pass legislation restoring the ABCC and improving the Registered Organisations arrangement to upgrade the applicability to unions. However, even with Turnbull’s many TV appearances it would be surprising if the Coalition’s TPP has improved.

First, the process of obtaining of the passage of legislation on the ABCC and Registered Organisations exposed the weakness of the Coalition’s support in Parliament and the resultant horse-trading is unlikely to have appealed to the electorate. The headline to Paul Kelly’s article in the Weekend Australian – TURNBULL’S VICTORY AMID SENATE BEDLAM – paints the picture.

Second, and more importantly, the substance of the changes is minimal from a reform perspective. In the attached article in the Weekend Australian, economic analyst Judith Sloan concludes that the Turnbull government has failed to “safeguard the use of taxpayers’ money and to talk to them in frank and honest terms” (Sloan on Turnbull 3 Dec 2016). On the budget, I was surprised to learn that the claimed budget savings “were already on the books” but, whether they are or not, there has been no attempt to either reduce expenditure or present the case for doing so. Yet Sloan gives examples of where there are obvious cases for spending reductions and/or a tightening of eligibility – child care funding, breaches of the work test for the Newstart Allowance (the dole), and loans for vocational education (for which a new scheme was legislated on 2 Dec). No attempt has been made to explain the broader need for reducing middle class welfare: indeed Turnbull has praised the importance of the middle class and, notwithstanding his public support for “small government”, he is in reality not a supporter.

Sloan also rightly argues that, with the changes made to the ABCC legislation after the Party Room meeting, the new regulator will have a minimal effect in reducing workplace relations problems. Importantly, the ABCC applies only to the building and construction industry (although now including offshore oil and gas projects) and major problems in other industries will continue (it is reported that Turnbull has indicated –at last – that some attention will be given in 2017 to the Heydon Royal Commission analysis).

In the construction industry itself, the changes made because of Senate negotiations mean that builders with current enterprise agreements, or whose agreements have expired, will not be able to change to the new “freer” (less regulatory) construction code until November 2018. The fact that one such prominent builder whose EBA has expired is already faced with rolling strikes and further industrial action by the CFMEU confirms that the industry will continue to experience serious union-inspired problems. In any event, builders seeking to use the new code will first have to advertise vacant positions in Australia (so as not to give preference to possible temporary employees from overseas); new procurement rules will apply to projects worth more than $4 million; maximum civil penalties are tripled but the amounts of $36,000 for individuals and $180,000 for bodies corporate will not deter disruptions by powerful unions;deals between employers and unions stopping the ABCC from taking legal action are outlawed; there will be an increase in the oversight of ABCC and its use of coercive powers. In short, the “reformed” ABCC still contains an excessively regulatory system which will limit the capacity of building employers to negotiate with potential employees who are not unionists and will continue to inhibit negotiations with unions too.

Sloan’s conclusion is that the ABCC is now “a lamb duck with expensive, onerous and protectionist appendages… this is a case (where) a win is a loss”. Turnbull will almost certainly find it difficult in 2017 to claim he implemented a significant reform.

Turnbull on Climate Change

Turnbull did not say anything about climate change to the Party Room but he has adopted a strategy of attacking targets for the usage of renewables which he and Environment Minister Frydenberg rightly regard as “excessive”. These include the 50% targets of Federal Labor and those also adopted by the three Labor states of Victoria, South Australia and Queensland. He has been (unintentially) helped by the further blackouts in South Australia (which already use 45% renewables) and by BHP even deciding for once that it needed to make a “political” statement critical of the SA government after its Olympic Dam project was out of power for about 10 days. Colleague Jim Brooks, who lives in SA, has sent the following comments on the further blackout there and the reactions of SA Treasurer, Koutsantonis:

While Koutsantonis said there was no way renewable energy generation in SA could be blamed for the loss of power, wind farms were only generating at 6% of their rated capacity when the fault hit. So having the state relying 40% on renewables that were not operating when needed means the lack of power was not attributable to renewable energy policy.
Koutsantonis blamed BHP for not having its own redundant power supply (as opposed to a backup supply for emergencies).
Thus the problems are not the fault of South Australia’s green government driving the state electricity grid to the brink of collapse. The problem is BHP made the mistake of expecting reliable electricity – they should have built redundant backup systems, like they do in corrupt idiocracies in the third world.
If BHP wanted to make a coal fired ultra super critical plant nearby, it could probably sell electricity to South Australians at half what they currently pay, still make a profit, cut emissions (not that that matters) and have its own guaranteed supply. But the SA government won’t let it do that. If SA Customers want to buy that cheap electricity, the SA government won’t let them.

The problem with Turnbull’s policy position is reflected in the following comments he made in a radio interview on SA’s 5AAA:

PRIME MINISTER: “Well you’ve had a state Government that has pursued renewables from an ideological point of view. Again I want to be very clear about this, I am totally non-ideological about renewables versus fossil fuels versus any other source, solar, wind, etc. All of them can contribute to our energy mix and all of them do. But you have to take the ideology out of this. Take that Left ideology that somehow or another we can pursue these enormous energy targets. I mean Bill Shorten wants to have a 50 per cent renewable target. He has no idea of how to get there. He has no idea of how that will maintain security, no idea of what it will cost. No idea of what it involves. These are big ideological statements and what happens is when they get converted into government policy, you start to get the problems that you’re facing now. So the targets have got to be, and this is why we have Dr Finkel, the Chief Scientist, undertaking the review that Josh Frydenberg has set up. The focus has got to be on achieving those three goals – security, affordability and meeting your emissions reductions” (see Turnbull interview with 5AAA).

Thus the supporters of renewables are said by Turnbull to have failed to take account of security and cost, and have “no idea of how to get there”. But the Turnbull government has failed to say anything about the adverse effects on costs of adopting its renewables target of 23.5% for electricity generation by 2020 (7.4% in 2014), ahead of most other countries. Nor, of course, has it attempted to justify the policy of reducing CO2 emissions to prevent the supposed risk of dangerous global warming by 2100. With the likely change in US emissions policy under Trump, such a justification is now badly needed.

Temperature Measurements

In my Commentary of 30 Nov I reported that the NASA satellite showed a fall in average world temperature of 1C since the middle of the year. This was sourced from the UK Global Warming Policy Foundation and published in Sunday Mail in London. It now appears that this was mistaken and, according to Roy Spencer’s satellite-based temperature for the lower atmosphere, there was in fact a slight increase in November. However, the graph still shows a large fall since the El Nino peak earlier in 2016.

New Polling on Political Parties and Use of Renewable Energy, Limits to Use of Windpower

Des Moore — Tue, 11 Oct 2016 07:34:48 +0000

Newspoll Confirms Labor Lead and Questions Renewables

The latest Newspoll confirms Labor’s lead of 52/48 on a TPP basis and shows a slight worsening in Turnbull’s net satisfaction to minus 25 (from minus 23), although he remains “better PM”. This outcome seems to confirm that Turnbull’s meetings and photos with world leaders during the break in Parliament did not impress the electorate. Nor did his photo op in a train with Lucy help.

But the supplementary question on renewables is of considerable interest following the blackout in South Australia. It shows that in a year 44% would not be prepared to pay anything for renewable energy and 28% would be prepared to pay only $100 pa (see Newspoll 10 Oct). While the blackout would have increased the extent of negativity, any “recovery” seems doubtful as questions continue to be raised about the extent to which renewables should be used if a secure supply of electricity is to be assured (see further below). Also, the publication by Energy Minister Frydenberg of his department’s estimated capital costs alone (there would be additional operating costs too) is likely to add to the electorate’s caution. Thus the estimate for meeting announced targets would be Victoria $14 billion and Queensland $27bn in capital costs for extra renewable energy capacity, with federal Labor’s renewable energy target of 50 per cent by 2030 requiring “10,000 new wind turbines’’, costing $48bn.

The Usefulness of Windpower

The South Australian blackout has raised serious questions about the usefulness of windpower in particular, which has not been previously discussed publicly, and the additional cost compared with electricity generated by fossil fuels. My letter in today’s AFR (see South Australia Blackout Inquiry) only touches on the issue. But it argues that the South Australian experience suggests that, given the need for security of supply, renewables should be used to meet no more than 20-40% of demand in circumstances where heavy storms occur from time to time. In short, the basic source of supply would be from generators using fossil fuels or nuclear energy and these basic sources would provide a back-up in the event that the wind farms are unable to operate because the wind is either too strong or too low.

In reality, where wind is intermittent and highly variable there needs to be a back up to windpower and that back up cannot come from windpower itself because it cannot be switched on and off by controllers. This also applies to Victoria, NSW, and Tasmania because those states have similar weather patterns to South Australia. This makes it essential that NSW and Victoria in particular retain sufficient generators that use fossil fuels to provide back up when any windpower established by them stops. These states already operate some windpower and the Victorian government has indicated an intention to close down the major fossil fuel generator system at Hazelwood early next year. Should Victoria substantially increase its usage of windpower, South Australia would no longer be able to rely on its interconnection to Victoria (which in any event failed to supply when it was needed by that State).

The attached article by Andrew Bolt (see Bolt on SA Blackout) brings out the failure of the government of South Australia to take account of the potential problems of using windpower. Note in particular that part of the possible back up if wind stopped – the coal-fired power station at Port Augusta – was actually blown up with explosives!! Bolt also points out that, in the case of 15 of the 22 towers damaged in the storm, that occurred after the blackout and could not have caused it. Reinforcing the Newspoll questions about preparedness to financially support renewable, Bolt also points out that a survey by the Climate Institute last month found that only 30 per cent of Australians still believe the world is warming and humans were mostly to blame.

At the end of Bolt’s article are some comments by believers in the dangerous warming thesis, denials that the use renewable energy contributed to the blackout, and that it should continue to be used. In fact the Greens still support moving to 100% use of renewables. We will see more of such commentary in the period ahead because there remain a substantial proportion of political, business and academic leaders who have stuck out their necks on the issue and will not recant easily. Hopefully however this could be the start of a real turning point.