Saturday salon 5/9

1. The real deal on the FTA and Chinese workers

Craig Emerson in the AFR lifts the lid on what is really going on with the Chinese free trade agreement and the right to bring in their own workers on projects worth more than $150 million.

The Government says this would have to be done under Australian law, which requires testing the market for Australian labour.

Emerson points out that Australian law allows the Government to waive 457 provisions on a case by case basis. The Chinese clearly expect this to happen, otherwise why have it in the FTA?

Emerson’s solution of passing legislation to remove the Government’s discretion but leave the FTA as it is would surely upset the Chinese.

Nick Xenephon told Patricia Karvelas on RN Drive that he’d read Emerson’s article and he won’t be voting for the FTA.

Xenephon also said he couldn’t vote for the investor state relations clause, which he saw as a threat to our sovereignty. That’s where international companies can sue governments for adverse decisions, like plain packaging and health warnings on cigarettes.

The Government is obviously expecting trouble with the cross bench, so they are putting the weights on Labor.

Henry Sherrell, policy analyst at the Migration Council Australia in his AFR column says labour mobility and migration are going to feature increasingly in trade agreements. It’s good for us and we should get used to it!

2. No gain in ending bracket creep

Brian Toohey in a column in the AFR takes a look at bracket creep, which Hockey has promised to return to taxpayers.

Bracket creep would scarcely be noticed by taxpayers, he says. It would cost someone on $37,000 pa less than $1.50 per week. Exactly the same result applies up to $80,000.

The budget, however, would suffer big time. The cost would be $25 billion over four years.

In short it’s a dumb thing to do until the budget is in surplus.

3. Corbynated politics

Mark has an excellent overview of what has been happening with Jeremy Corbyn and Labour in the UK:

    What is intriguing about Corbyn’s candidacy and the excitement it has generated is twofold. First, although hardly a fiery orator, Corbyn treats audiences and publics not just with respect but as interlocutors. For me, one of the most interesting aspects of following his candidacy from afar has been watching something in the many videos of his speeches or responses to questions online that we see so very rarely: a politician engaging in public reasoning as well as persuasion. The fit between his persona and his politics is part of this appeal too; Corbyn is a person of integrity, and has been the UK’s most parsimonious claimer of parliamentary expenses.

    Secondly, the unlikely frontrunner has engaged and inspired generations said to have become deeply cynical about politics and public affairs – precisely because he is not part of the ‘Westminster bubble’. His proposals for participatory policy making, both within and beyond the Labour Party, are fascinating because they are well grounded, as Corbyn himself says, in the ability and the desire of citizens to articulate and reason around their own views.

4. Economic growth flatlines

GDP growth was just 0.2% seasonally adjusted and 2% over 2014-15 year and net national disposable income fell by 0.3%.

Here’s Bernard Keane at Crikey:

    Given that, under Hockey, the budget deficit has more than doubled, net debt has soared, unemployment is up 0.7 points to its highest level since Simon Crean was Labor leader, growth has slumped, wages are stagnant and infrastructure spending has collapsed, you might be forgiven for wondering what things would be like if his economic plan weren’t working.

Hockey says the figures were “encouraging” and “The economic plan that we laid down is actually delivering the dividends.”

Treasurers are apt to talk the economy up; the ABC captured some of it here, but it begs the question of what his plan actually is to save the economy. What saved us from dipping below the line this time was government expenditure, albeit the fortuitous purchase of three warships in the quarter. Keane points out that government expenditure levels are actually quite high measured against the Swan years.

Hockey does not seem to be able to find a convincing narrative, and there has been internal LNP chatter about removing him.

For now I think we settle down, the Liberals will win Canning, Hockey will stay, as will Abbott. However, even by December if the economy continues to tank, there could be personnel changes.

Fleur Anderson in the AFR says the Government seems to be adopting a small target strategy, behind the mantra of “jobs, growth and community safety”. We’ll need more than that to get the animal spirits of business and consumer spending moving.

She has been seen as strangely conservative, or sucking up to conservative interests, whereas she was actually more radical than most.

Introduction to Saturday salon

Because of the way the blog currently presents posts on the home page I think it’s better to remove the introductory material to a different place. For new readers, here’s the rationale for this space.


An open thread where, at your leisure, you can discuss anything you like, well, within reason and the Comments Policy. Include here news and views, plus any notable personal experiences from the week and the weekend.

For climate topics please use the most recent Climate clippings.

The gentleman in the image is Voltaire, who for a time graced the court of Frederick II of Prussia, known as Frederick the Great. King Fred loved to talk about the universe and everything at the end of a day’s work. He also used the salons of Berlin to get feedback in the development of public policy.

Fred would only talk in French; he regarded German as barbaric. Here we’ll use English.

The thread will be a stoush-free zone. The Comments Policy says:

    The aim [of this site] is to provide a venue for people to contribute and to engage in a civil and respectful manner.

32 thoughts on “Saturday salon 5/9”

  1. Heavens to Betsy I hope for the end of Abbott as PM. I see no progress on anything while he ” steers” the ship.
    If Abbott is deposed who will succeed him?
    If Labor prevails at the next election are they likely to be any better than an Abbott-free LNP government?
    Not very original thinking I guess but it made me wonder if any Australian government can bring us out of the present era of lost creativity, lost balls and adversarial governance.

  2. If Abbott is deposed who will succeed him?

    Probably Bishop or Morrison. I don’t think the right wing of the party will allow Turnbull.

    On Canning, it requires a 12% swing. They say deduct 2.5% for a by-election, about 3% for personal following. Anything beyond a 6% swing will cause discomfort. A couple of polls have it 51-49 to the LNP, Reachtel 3 or 4 points more favourable. I doubt Canning will cause any change in leadership.

    If Sept GDP is negative and Labor continues about 6 points better in the polls, there might be panic towards the end of the year, but even then the lesson of Labor will be in their minds.

    But, yes, we are a bit short of political leadership. I think Chris Bowen is a steady lad, but I doubt the whole crew has the creativity, dynamism and imagination we need.

  3. Sophie Morris has an excellent article in The Saturday Paper on the Chinese FTA. Too complex to summarise, but of interest is the notion that labour market testing is not effective and easily avoided by employers with intent.

    Henry Sherrell

    favours increased fees for employers hiring migrants to encourage firms to recruit locally instead. “Employers respond to prices, not paperwork,” says Sherrell…

  4. Jocob Greber has a sobering view of our economic prospects and the Governments strategy:

    Hockey’s entire long-term budget plan rests on the increasingly stoical belief the economy will soon stage a rapid recovery before punching out five straight years of 3.5 per cent growth from 2017-18 onwards.

    That’s also the moment when a surge of spending commitments fall due. Education, defence, disability services and a rapidly ageing population will all weigh on the budget.

    That means there is no room for error. Yet Hockey’s projection appears more fanciful with every day. Even Reserve Bank governor Glenn Stevens has questioned whether our new “normal” may be around a fifth slower than Treasury’s expected rate, at about 2.75 per cent.

  5. A fabulous article by agricultural scientist Steve Savage.

    The Green Left have their boot on the throat of global agriculture and are stopping the development and rollout of technologies that will make the global food supply more resilient in the face of climate change, soil depletion, herbicide resistance, emerging agricultural pests and a growing world population.

    While most people have their eyes exclusively on climate change, it will come as no surprise to me if the Green anti-Enlightenment cult ends up being responsible for just as much if not more death and suffering.

  6. Karen, I’m not in a position to judge how important GM is going to be in adapting to climate change, but I’ve always accepted that it had a potential role.

  7. The Andrew Rob interview on Insiders is educational on the Cafta issue.

    ( the rest of the show is absolute guff, don’t bother unless you like that kind of rubbish )

  8. Yes, I heard it Jumpy. Robb is actually one one the more competent ministers IMO.

    In the Sophie Morris article I linked to she says Shorten has politicised the issue and will end up having to let the FTA through. But not before Canning.

  9. If all they can whinge about, in a massively comprehensive deal, is not changing the bit the ALP put in place, it must be as brilliant as all the former ALP bigwigs and current ALP Premiers say it is.

    Shorten is really giving off an anti-Asian smell.
    Not good when we are part of the Asia-Pacific region.

  10. Brian, you said, ” …. labour market testing is not effective and easily avoided by employers with intent”.

    My oath it is!

    Most people seem to imagine that anti-Australian discrimination in employment, in renting, in lending and perhaps in education opportunities started only several months ago or is yet to happen. Far from it.

    Discrimination in lending was thriving by the mid-Seventies. Those who nowadays howl loud-and-long about how Profiling is racist and wrong have been remarkably silent about how racist and wrong it has been over the past forty years – when it was applied Caucasian, native-born Australians.

    Discrimination in employment was well and truly underway by the late-Eighties, despite various government bodies being well-aware that it was being committed with impunity.

    Discrimination in renting was also going strong by the same time.

    I have had direct personal experience of all three types of Aussie-bashing discrimination and racism -and I’m certainly not alone in having that sort of direct personal experience.

    Rarely, I did get a chance to get my own back. Like many years ago, the time I made an appointment for a job interview, in the first language of the firm’s operators and using my pseudonym in that language. The receptionist was very busy when I arrived for the interview so I just sat down and waited. When things quietened down, her boss came out and said (in their language), “Hasn’t the guy for the 9:30 job interview turned up yet?”. Whereupon I stood up, smiled and said (in their vernacular), “Yep. That’s me”. Shock! Horror! One of the subhuman natives had tricked them into a job interview. “No. No. The job’s gone”, “We didn’t have any job vacancies”. And I was given the bum’s-rush out of the place as quick as a flash. Never mind, I did find an inventive though questionably legal bit of revenge for that bit of racist discrimination.

    If politicians and public servants have consistently striven to close their eyes and ears to wide-spread manifest Aussie-bashing racism and discrimination for a couple of decades, then there is fat chance they will do anything at all about enforcing any real labour market testing before or after the China FTA.

  11. People are nervous about their jobs.

    Tell me about it. If things don’t pick up here I’ll have to let good men go.
    As early as next week !
    I’ve been pricing at below cost for a while now and I can’t sustain it any longer.
    Things are grim.

  12. Jumpy, the economy is definitely patchy. I heard an ‘analyst’ on the radio this morning. She thinks we’ll probably avoid a recession, but…

    I heard also that construction had picked up last month for the first time in yonks, but obviously not where you are.

    I’m sorry and hope things work out.

  13. Thanks Brian,
    The AIG performance indices have Manufacturing, Services and Construction all up last month.
    Haven’t seen that for a very long time.
    So I must be in a bad pocket atm.
    Everyone in Mackay is feeling it but there is cautious optimism the closer to xmas we get the more it will improve, as it traditionaly does.

    On the plus side, 2 small jobs fell in my lap today, so the team stays together for the rest of the month, at the very least. 🙂

    ( running a business give one a fellowship like sympathy for bipolar sufferers, I know that much. )

  14. Well, now that the AIG PCIs for September are in, we can compare the effect of Abbotts PMship to the others.

    Manufacturing and also Services can be found HERE as well.

    ( There will be a lag into Turdballs PMship, obviously )

  15. Jumpy: Investors in things like coal and renewable power will both be waiting to see to what extend the Tea party faction in the LNP retains its grip on policy and is able to limit what Turnbull decides to do. Despite what they believe I doubt MP’s in marginal seats are going to be keen on supporting Tea party faction attempts to stop things that are clearly popular with the electorate.

  16. John, I haven’t a clue what that has to do with my comment.
    As for “….the Tea party faction in the LNP …”, if Wiki is to be believed ;

    The Tea Party movement is an American political movement known for its conservative positions and its role in the Republican Party. Members of the movement have called for a reduction of the U.S. national debt and federal budget deficit by reducing government spending. In addition, they have also called for lowering taxes.

    Then I hope they have massive influence.
    I’m not optimistic though, the Libs voted in the most leftist leader the party has ever had, just to save their cowardly arses by picking a toff that the media love.

    Isn’t it obvious that since the media have gone off the attack the polls have shifted so much ?

    The media decide which policies are good or bad and relentlessly persuade the swinging portion of the audience toward their objectives. The fact that those in media are majority left is what gives Turdball the advantage.
    Till they decide he’s not left enough, of course.

  17. In fact the voter, now, has a choice of 2 centre left parties, a far left party or a bag full of random independents.

  18. JD I’m hoping the new government under Turnbull will produce a somewhat altered paradigm for Australian politics. I’m hoping the Press will stop being a participant in political play and return to reporting on events, not as provocateurs.
    I think there is pretty wide support for that view.
    Allow me then, without too much rancor, to comment that your association of the US Tea Party with Australian politics is both snide and unproductive. It should be clear (from prior posts) that I am all for solid government in Australia, and especially so after too many horrific recent years. We deserve better, and better deserves a better chance than throwing around Tea Party politics. You know that. And don’t forget, the Greens support a Labor politic, the same one currently being found wanting by a Royal Commission.

  19. And lastly, might I say that you identified the main problem with investment that holds back job growth an investment in this Country;

    Investors in things like coal and renewable power will both be waiting to see to what extend the Tea party faction in the LNP retains its grip on policy and is able to limit what Turnbull decides to do.

    It’s called uncertainty and Sovereign Risk.
    Big Governments excel at it.

  20. Yep, uncertainty paralyses so much. And it has downstream multiplier effects too. Look at the uncertainty in education and communications to name just two.
    Universities don’t know whether they are researchers or teachers. The NBN has blighted communication investment for years by the expectation that further investment (even maintenance investment) is unlikely to be fruitful because of the expected wondrous NBN service trumping all other services.

  21. Jumpy: Crowding of government is terrible when it stops you doing something you want to do but good when it protects you from more powerful people who want to abuse their power.

  22. John
    Could you please provided a couple of examples, I’m not sure what you’re getting at ?

  23. Jumpy an example would be the protection of US copyright on music. Don’t know quite where we would be if US copyright was not so well protected. Feel better?

    But John I think we are talking about a blight on free enterprise investment with the obscure knowledge that government was charging in with a scheme that would likely stuff any ROI plans for that part of the comms sector. Who would invest against a big lumbering behemoth such as a government supported NBN? No one really so private infrastructure has been seriously blighted. Cairns, a bit to the south of me, is a strong regional focus for tourism, transport, export, agriculture, education and more. Yet there are wide ares where mobiles don’t work indoors and broadband barely competes with (old) dial-up. Pretty tough on the locals, especially when the reaction of investors is to go elsewhere.
    I venture that NBN could have more artfully presented and been more inclusive of existing stakeholders. Sigh…if only I were the King.

  24. Well, from where I stand, it looks as though much of corporate Australia is risk adverse when it comes to investing in anything long-term and innovative, on the one hand – and is like a gambling addict in a casino or at a racetrack when it comes to get-rich-quick schemes, on the other.

    The reluctance to invest in, say, telecommunications now that the NBN is toddling along, may not be prudence both sloth and cowardice.

    Also, the reluctance of successive governments to maintain existing services and to bring in much needed new ones to rural and remote areas could be to discourage people from moving away from the big cities and so deflating the real estate rackets and reducing the pool of unemployed and casualized workers. (b.t.w., I notice that most of the Syrian refugee intake will be dumped into the big cities).

    Jumpey: I take your point about the “news(??)” media interfering in our government – and suggest nationalizing all of The Ministry Of Truth’s assets here. We certainly could not be worse off at all – and we would get an even more diverse range of real news for a change and, if we are really lucky, a return to democracy.

  25. Jumpey: I take your point about the “news(??)” media interfering in our government – and suggest nationalizing all of The Ministry Of Truth’s assets here. We certainly could not be worse off at all – and we would get an even more diverse range of real news for a change and, if we are really lucky, a return to democracy.

    Graham, given O’Sullivans First Law * , that may suit you but it would not deliver the benefits of which you speak, so would not suit me ( nor indeed about half of the Australian population)

    * [ “All organizations that are not actually right-wing will over time become left-wing.”]

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