Let’s talk about tax

Taxes are the things that provide services to the community. They provide transport, social security, defence, education, parks, rubbish removal and so on.

While state and local government provide most of the services we Australians consume on a daily basis, the federal government is the level of government with the majority of the powers to enable taxation to be collected to provide those services. So state governments have to go to the federal government to ask for money, and local governments rely on grants from the state government (because local governments are prevented by the constitution to go directly to the federal government). Yup — it’s as clear as mud but that’s the system as it currently operates. How it works is complicated. You may remember when the Victorian state government changed in 2014 and the new premier Daniel Andrews wished to replace a road tunnel under central Melbourne with a train tunnel. Then PM Abbott, who admitted he wasn’t a fan of public transport, wanted his road-tunnel funding back. Current PM Turnbull, who posts selfies on buses and train stations, is in the process of returning the funding taken from Victoria. Clearly, the higher level of government can impose its will over the subordinate levels.

It seems that when Mike Baird (Premier of NSW) suggested he would look favourably at a GST increase during 2015, he started (either consciously or unconsciously) the great tax debate of 2016. Baird’s rationale for the comments about a GST increase was that the federal government was planning to rip $80 billion from the grants given to the states to run healthcare and education. The money from the GST goes (in theory) entirely to the states and so an increase would mean the states would get their money back.

The losers here are the members of the public as we would all have to pay the additional tax on the majority of goods and services we purchase. In addition, the discussion included proposals to widen the GST so that goods and services that are currently exempt from the tax would be a ‘taxable supply’ item. The suggestion was that the federal government would retain some of the increase to ‘mitigate’ the increased taxation on those who could least afford it.

By application and implementation, any consumption tax such as the GST mounts a greater attack on the wallets of those on the lower income levels. Various groups who have a number of clients from a low socio-economic level claimed it was a bad idea, including the South Australian Council of Social Services, which claimed amongst other things that:
… in South Australia, the current GST accounts for 9.8% of disposable household income for the lowest income households, but only 4.9% of income for the highest income households.

Broadening the base of the GST to include fresh food, education, health, financial services and other miscellaneous goods and services would make the tax even more regressive. Based on the NATSEM [National Centre for Social and Economic Modelling at the University of Canberra] modelling, SACOSS has calculated the impact of broadening the GST. Table 1 shows the impact with lowest income households paying 41.8% more GST than currently, while the highest income households would pay only 36.7% more.
The government proclaimed that an increase in the rate of the GST was only one of the options ‘on the table’; they were ‘consulting widely’; and that ‘no decision had been made’. Sounds very Yes Minister-ish doesn’t it?

During February 2016, the prime minister ruled out any increase to the GST following considerable adverse publicity generated by the Opposition as well as groups representing those that would have been adversely affected by the plan. According to the federal government, the reason for dumping the GST increase was:
After you take into account all of the compensation that you would need to ensure the change was equitable, it simply is not justified in economic terms.
Those of us with a little cynicism might be more inclined to believe that other factors, such as the number of LNP politicians who would lose their seat in an election fought on a GST increase also played a part. It also lays bare the claim that all options were on the table as well.

Fresh from his information/scare campaign (depending on your viewpoint) against the increase to the GST, Opposition Leader Shorten then announced a policy to gradually remove the opportunity to negatively gear most investments within Australia. As negative gearing is complicated to explain in writing, we’ll get Waheed Aly from Network 10’s The Project do it instead with words and graphics (assuming your internet is fast enough to avoid buffering — another LNP policy failure).

According to Network 10, 1.2 million Australians use negative gearing to reduce their income. The ‘magic’ number here is $80,000 — which is the taxable income you can earn before you advance onto the second highest income tax rate. So when Turnbull et al suggest that changing the rules on negative gearing would affect a lot of ‘mums and dads’ who have a taxable income below $80,000 he’s cherry-picking his facts. The objective of negative gearing is to get your taxable income below $80,000 so you pay a lesser tax rate and are eligible for more government benefits. (Again those of a cynical bent amongst us could suggest that those that only reduce their taxable income to $80,000 aren’t trying hard enough — but that’s another discussion altogether.)

The Conversation is a website run by academics that comments on current issues: they have the people with appropriate qualifications and experience available to look at an issue factually. So, when discussing negative gearing, the Grattan Institute — an economic research institute seed funded by the federal and Victorian governments — probably has the knowledge and ability to justify an article discussingThree myths on negative gearing the housing industry wants you to believe’ and discuss why you shouldn’t go there.

So it seems obvious, doesn’t it? Remove negative gearing and gradually the ‘budget emergency’ promoted by Abbott and Hockey will fix itself as people’s taxable income will not be altered by deliberately making a loss on investments. They pay more personal income tax, the states get money for health and education, prices for ‘entry level’ dwellings stabilise as well, causing the world to be a happier place. Unfortunately, it’s not that easy. Despite noted economist Stephen Koukoulas writing in The Guardian that ‘Labor’s negative gearing reform is economically responsible’, Turnbull is claiming that reducing the avenues for negative gearing ‘harms average earners’. However, Fairfax is reporting:
independent modelling shows there will be "significant" long-term savings from Labor's proposal to quarantine negative gearing to new housing investments from July 2017, eventually raising between $3.5 to $3.9 billion a year.

It also shows Labor's proposal to cut the capital gains tax discount from 50 per cent to 25 per cent would raise about $2 billion a year in the long term. It shows the vast majority of savings would be at the expense of the top 10 per cent of earners who negatively gear their properties.

It also estimates that by restricting negative gearing to new housing, the policy would "increase the share of investment housing devoted to newly built housing" by 10 to 20 per cent.

It does not say house prices would drop.

"Our modelling shows that negative gearing benefits high-income families with 52.6 per cent of the benefit going to the top 20 per cent of incomes," the paper says.

"Only 5.2 per cent of benefits go to the bottom 20 per cent of incomes. This result is mostly driven by high-income families being more likely to negatively gear, having larger negatively geared deductions, and a progressive tax system that magnifies the gains for higher income persons.

The modelling was done by the Australian National University's Centre for Social Research and Methods.

It was not commissioned by any political party, organisation or individual.
Could the real issue here be politics? The process basically benefits those on a large cash income who can’t minimise their tax through income splitting or other methods. So you are looking at those who don’t have the ability to incorporate themselves into a small business where income can be split between two or more people (such as ‘mum and dad’ businesses, where there is the potential for all the owners of the incorporated business to perform some work for the entity, and be paid accordingly). Those on a higher income and in ‘prestigious professions’ are more frequently supporters of the conservative side of politics. Those on a higher income also are more likely to look for ways to reduce their income to pay less tax — it is to their benefit to do so. To a large extent, politicians’ campaigns are funded by donations from those with the means to do so, not the taxpayer.

It’s time to follow the money.

The annual report on who donated to whom is issued by the Australian Electoral Commission in February. As you would imagine, it’s not something that you would download. ABCTV’s The Weekly looked at the issue soon after the report was issued — according to the host of the show, Charlie Pickering, they have the time to do so.


While no one is all that surprised that Clive Palmer’s Queensland Nickel donated millions to the Palmer United Party, it is somewhat concerning that the names responsible for 40% of political donations did not need to be reported. Perhaps even more concerning is that the Australian Electoral Commission (AEC) has never prosecuted anyone for a breach of donation law since the laws were enacted in 1918 (yes 98 years ago). Even worse, the AEC asked for details of potential breaches identified by the people that put The Weekly together. In effect, we don’t know where nearly half of the donations come from and what might be expected in return for the donation. We don’t know if someone making a decision on, let’s say, the future of negative gearing is in parliament due to the donations of property developers, finance companies and real estate agents.

If for example you asked F1 racing car driver Nico Rosberg (the gentleman on the left in the picture at the top of this article) what type of mobile phone he prefers, you wouldn’t be a bit surprised if he rubbished Samsung and Apple devices while promoting Blackberry. And why wouldn’t he? — he and his team are obviously benefiting considerably from a commercial relationship with Blackberry. Unfortunately, we’re not in the same position of knowledge when it comes to our political parties. While the proposal (referenced in the clip from The Weekly) in California to make politicians wear stickers that identify their supporters is probably over the top, there is clearly a need for some rigour in the disclosure laws in Australia.

Turnbull and Morrison are mouthing all the right words about making taxes equitable, understandable and progressive. The reduction in availability of negative gearing addresses all three required outcomes as well as producing some income for funding services for our community. A host of economists can give you chapter and verse on why the proposal makes sense and won’t necessarily reduce the value of your house. We don’t know what, if any, external influences any politician might be under if they come to a view that negative gearing is a valuable part of the tax system and should not be altered.

Taxes pay for government services: so next time you are stuck in a traffic jam, walk through a park or are waiting in the phone queue at Centrelink being told that your call is important, think about how governments around Australia could get more money to rectify service delivery; then think about those who receive the top 20% of income who can legally reduce their income by consciously choosing to lose money on investments. As we all drive on the roads or ring Centrelink at some point, surely we should all pay a proportionate amount for the privilege of doing so.

What do you think?


Safe Schools, Unsafe Politicians



Now we see it, the Christian-Right Liberal reactionaries digging their cruel claws into PM Turnbull over the ‘Safe Schools’ program, one specifically designed to help kids understand that different individuals have different feelings about their sexuality, and that all of us ought to understand, respect, and accept these differences.

‘Safe Schools’ is aimed at helping lesbian, gay, bisexual, trans and/or intersex (LGBTI) school students. According to its website, the ‘Safe Schools Coalition’ offers “…resources and support to equip staff and students with ‘skills, practical ideas and greater confidence’ to create a safe and inclusive environment for same-sex attracted, intersex and gender diverse students, staff and families.”

One end point of the program is to lessen the bullying which differences in sexual identity and sexual preferences too often engender. Bullying and ridicule of those whose sexual orientation does not match their gender have superseded the bullying and ridicule heaped upon kids with red hair or freckles or short stature that we once saw when we were young. This pernicious social transformation has resulted in distress, depression and sometimes suicide. ‘Safe Schools’ was developed as an antidote; its website explains that it is: “…aimed at creating safe and supportive school environments for these same-sex attracted, intersex and gender diverse people by reducing homophobic and transphobic bullying and discrimination in schools"

Do the reactionaries see it that way? No, they see it as an assault on their ‘Christian’ beliefs. As they see it, God has ordained that there should be men and women with clearly defined and different sexual attributes. Men should be attracted to women and vice versa. No in-between position is allowable. ‘Safe Schools’ accepts the reality of a variety of different sexual orientations that do not match gender. The reactionaries do not, and never will. There is right and wrong, and they believe they are right – God and the Bible say so.

Prominent among the objectors are the usual suspects: Cory Bernardi and Eric Abetz, as 2353NM mentioned in Karma is a bugger.



Bernardi told the ABC that the program was seeing children "…being bullied and intimidated into complying with a radical program", and called on the Government to withdraw funding for the program. For starters, he demanded an enquiry into the program. “’It's not about gender, it's not about sexuality,’ he said. ’It makes everyone fall into line with a political agenda. Our schools should be places of learning, not indoctrination.’

PM Turnbull has gone along with Bernardi and other Liberal agitators and has requested an investigation into the Safe Schools program. Simon Birmingham, Minister for Education and Training, will carry out the enquiry.



Appearing on The Drum Abetz acknowledged that everyone supports stamping out bullying and protecting students, but insisted that the Safe Schools program went far beyond this. He told John Barron “...trying to lock young people into the Safe Schools program's particular views about gender and sexuality is ‘unhelpful and unhealthy’, and that a clear distinction between boys and girls, ‘especially at primary school’, is something that should be protected.

“[There are] circumstances where this program suggests that if a boy feels like being a girl, he should be allowed to use the girls' toilet facilities, which might be good for him, but what about all the girls that are then submitted to a boy being in their change rooms or in their toilets?”


Abetz also argued that many members of the community did not support the Safe Schools program: “It is a program of social engineering where parents, when they get to understand what it is, rebel against it and in fact vote for their schools not to be involved.”

Now ghost-from-the-past Tony Abbott has chimed in with: “It’s not an anti-bullying program, it’s a social engineering program. Its funding should be terminated.

Writing in The Guardian, Shalailah Medhora writes that of the 495 schools in the program, only one school has quit the Safe Schools program after parents' objections. Another example of Abetz’ overblown rhetoric.

Bernard Keane of Crikey hit the nail on the head in his article: The rise and rise of Malcolm Abbott and the sex-obsessed right with these words:
This is simple cultural warfare by the extreme right within the Liberals, and it's no surprise to see the likes of Andrew Nikolic and Andrew Hastie involved.

“Victorian Premier Daniel Andrews nailed it when he said: "I don’t think these extreme Liberals are actually offended by the structure of the program, or the teachers who lead it. I just think they’re offended by the kids who need it."
Keane continued:
“These are politicians who are obsessed with sex - specifically, people who might be sexually different to their own white middle-aged heterosexual male selves. Obsessed enough that it's all they want to talk about in their party room meeting, bandying about terms like ‘cultural Marxism’ because they read it in the paper the other day. Not merely does the idea of alternative forms of sexuality offend them, it terrifies them, because it's yet another symbol of a world that no longer grants automatic ascendancy to men like them.

“Safe Schools is one more reminder that the planet no longer revolves around them. That its purpose is to protect kids, to prevent them from being bullied, is of no moment; these men were never the ones bullied at school for being different. They've always enjoyed privilege, entitlement, status.

“Turnbull might think that giving them an inquiry is the smart play - the inquiry will be controlled by the civil and sensible Education Minister Simon Birmingham. The inquiry will find no, or minor, concerns; further complaints can be addressed by noting the program has been reviewed and all's well.

“Except, the review also legitimises this kind of cultural war, a war in which LGBTI kids are collateral damage, just like domestic violence victims are collateral damage in the culture war waged by the likes of Mark Latham and Miranda Devine against their mythical ‘middle class feminist’ enemy. And reviews are never enough for the far right - their concerns validated, they will push into more areas. For middle-aged white reactionary males, there's always something about the 21st century to be outraged by. In fact, they've barely finished getting upset about the late 20th century.

“Turnbull might merely be playing for time - to hold out until the election, then once he has secured victory, move to positions that more closely match his own principles. But if there's one truth we've learnt from recent years and especially from Tony Abbott, it's that it's awfully hard to change your style once you're in power. Abbott could never shed his relentless negativity once he became prime minister. If Malcolm Turnbull thinks he can veer back to the middle after pandering to the right, it might be much harder than he thinks.”
The response of these reactionary Liberals to the Safe Schools program points to an entrenched way of thinking about sexuality. We saw it just a short time ago during the sexual equality debate. We saw similar delaying tactics. Abbott’s insistence that this matter could not be resolved by a parliamentary debate, and instead must be put to a plebiscite of the people after the next election, was simply obfuscation writ large. His hope was that this delay would kill the idea of sexual equality and its awful sequel – same sex marriage! There was the hope too that the delay would force a public debate, which would allow the Australian Christian Lobby to spread its biased propaganda, propagate its nasty attitudes, and strike fear into those unprepared for the distasteful diatribe that would surely follow. A taste of what the ACL will do and say comes from its director, Lyle Shelton, who is already mouthing off about the Safe Schools program, which he describes as “radical sex experimentation”. He has a petition to the Queensland government with almost 11,000 signatures asking for the cessation of the program. If you want to see how this man operates, and how divisive he is in this debate and the one on sexual equality, take a look at the February 29 edition of Q&A, where he proclaimed: "...gay people are stealing babies"!

Now the outspoken radical George Christiansen, in a speech to the House last week, shocked parliamentarians by likening the Safe Schools program to ‘grooming’ undertaken by sexual predators: “If someone proposed exposing a child to this material, the parents would probably call the police, because it would sound a lot like grooming work a sexual predator might undertake...”.. Such men seem unconstrained in their language and vitriol.



Writing in Daily Life, in Safe Schools is important, because LGBTQI students shouldn't need to justify their right to exist, Maeve Marsden notes: “It should come as a surprise to no one that the Prime Minister is…interested in placating the right-wing factions of his party…it is utterly predictable that he would throw the rights of LGBTQI kids to enjoy a safe school environment and better mental health outcomes under the bus."

In her article in The Age: Safe Schools program: why zealots are trying to drag us back to the dark ages, Jill Stark reveals the disturbing statistics that made the program necessary:
It was set up in Victoria in 2010 in response to requests from teachers to help them support a growing number of LGBTI students who were wrestling with their identity. It has the backing of beyondblue, the Australian Secondary Principals Association, the Australian Education Union and the Australian Council of State School Organisations.

“Adding to teachers' concerns were alarming statistics from La Trobe University's 2010 Writing Themselves In study which revealed 75 per cent of LGBTI young people had experienced physical or verbal homophobic bullying. Eighty per cent said the abuse happened at school. These students are up to six times more likely to attempt suicide and self-harm than their peers.”
Jill Stark backs up her statistics with a real-life example in her article in The Age: Go kill yourself, faggot': Gay teen says Somerville Secondary ignored bullying. 15-year-old Nathan Whitmore, who attempted suicide after being terrorised at school for two years and beaten with a skateboard says he was bullied for being gay and told: 'You're a gay faggot who everyone hates, just go kill yourself and get it over with, everyone would be happy and better off'. He claims his school failed to protect him and he is planning legal action against the Victorian Education Department, arguing that his pleas for help were ignored for two years.



Writing in the AIMN in Turnbull sells out young people to the deranged, to save himself, Jennifer Wilson says: “Turnbull’s support of those who would cause suffering to the young, based entirely on religious ideology, must be greatly discouraging to young people as well as to those adults who want to make acceptance of difference commonplace. Turnbull has made a Mephistophelean covenant with religious extremists. If there is such a thing as a soul, he has likely sold his in an exchange that benefits himself to the detriment of the young.”

There are some stark realities about these issues of sexuality and the reactions to LGBTI matters that need to be accepted.

The Christian Lobby, and the likes of Bernardi, Abetz, Christensen, et al will never be persuaded from their views; indeed they cannot change them. Their views and attitudes are hard wired into their brains; they probably have been since their upbringing as small children. Facts, figures and logical reasoning cannot change them. Argument and reasoning are useless.

As a political strategy, there seems to be just a few things that can be done:
- Use facts and reasoning to persuade those voters frightened by the rhetoric of the radicals that their facts are wrong, their conclusions flawed, their demands unreasonable and unnecessary, and that the need for the Safe School program is backed by hard evidence and sound professional opinion. The radicals are inconvincible, but the public can be convinced.

- Use political force to counter the radicals. They understand counting and votes. Don’t concede an inch, as Turnbull has foolishly done, because, as Keane points out, no matter how positive the outcomes of an investigation turn out to be, the radicals will never accept them. They will not go away. They will wage a war of attrition. Brute force is the only response they understand.

What we need is not just Safe Schools; we need Safe Politicians. It is a national disgrace that in our federal parliament we have such a motley collection of Unsafe Politicians: radical, heartless reactionaries who believe they are absolutely right and their opponents always wrong, ever ready to intimidate those whose opinions differ from theirs, primed to bully them into submission, and if they don’t succumb, to cast them cruelly into outer darkness, where they believe they belong, along with the LGBTI school students these Unsafe Politicians refuse to support.

What do you think?
What are your views about this contentious matter?

We look forward to reading your views and your comments.


Turnbull and authenticity

Question: What do Donald Trump (Republican Presidential hopeful) and Jeremy Corbyn (Leader of the British Labour Party) have in common? Well it can’t be their politics.

Trump comes from the right hand side of the spectrum — he wants to keep the ‘illegals’ out, defeat Islamic State, favours traditional marriage (he’s been married three times), argues that climate change is a hoax and government borrowing and stimulus measures are detrimental to the US and objects to Chinese and Japanese interests manipulating their currencies and flooding the US with low-cost exports (despite Trump branded products coming out of China).

Corbyn by contrast voted against bombing Islamic State interests in Syria, supported investing in infrastructure to grow the economy, creating a National Education Service, renationalising British railways, scrapping tuition fees introducing rent control in unaffordable areas and investing in the arts.

The answer is they both seem to be saying what they believe, not necessarily what their minders and party hierarchy want them to say. They are both outsiders from the party machine and appear sincere, qualities which resonate with voters, as even if the voter hasn’t personally met the leader there is a connection.

One of the current management-speak buzzwords is authenticity. A dictionary definition of the word is ‘the quality of being authentic; genuineness’ which sort of seems obvious really! Corbyn and Trump are not the only people in the world to have entered politics claiming to acknowledge and reflect on the concerns of ‘the common (wo)man’, but it could be argued that these two who are diametrically opposed politically have similar abilities to represent their views in a way that resonates with people.

Being authentic is actually quite difficult. Not only do you have to present your ideas in a way that people can understand and respond to, you have to demonstrate that you also share the ideas and implement them in your personal and professional lives. While Corbyn and Trump have no ability to govern ‘authentically’ at this stage, they will be held to account for the actions that they can control — such as their behaviour at rallies, media occasions and public appearances. In addition, they would be expected to promote their apparent values and demonstrate how genuine they are in their interactions with their staff and the public. Incidents such as greeting a member of the public warmly, appearing to listen to their concerns and stage whispering that the person was a nutter soon after would place a large dent in their credibility.

Justin Trudeau in Canada brought his party from a distant third in a three horse race to government in a short space of time. This article in The Guardian soon after Trudeau won discusses the problems Trudeau faces; namely that he promised real and immediate change — now he has to deliver. Written soon after his ascension to power, this Huffington Post article lists some of the expectations of Trudeau. Yahoo News suggests that ‘After stumble, Canada’s Trudeau glides through first world trip’. It’s a good start, but there is a great deal of expectation. To be fair he was probably ‘helped’ by his predecessor as Prime Minister, Stephen Harper, making increasingly banal, personal attacks on Trudeau, including TV advertising criticising his hairstyle. Now that Trudeau has the top job he has to deliver on his authenticity in the view of the Canadian electorate, which will probably be a harder ask than the promotion.

It could be argued that Bob Hawke was an Australian authentic leader (before the term came into vogue). After a long career in the union movement, earning the reputation for being a builder of consensus to resolve conflict, he entered Parliament in the 1980 election. He challenged Bill Hayden for the leadership on 16 July 1982 and lost; then challenged again on 3 February 1983 almost at the same time as then Prime Minister Fraser was calling an early general election. Fraser lost the election and Hawke as prime minister won the next four elections until the eventual challenge and replacement by Paul Keating in 1991.

Soon after election, Hawke convened an ‘Economic Summit’ during April 1983 where political, employer and union leaders met over a number of days at Parliament House in Canberra to form a national consensus on future economic policy. The ‘Prices and Incomes Accord’ between the Hawke government and the union movement, where the unions promised to minimise wage increases and the government promised to minimise inflation, introduce a ‘social wage’ and increase spending on education and welfare was a result. As well as the economic reform managed by Hawke and his Treasurer Paul Keating, he also modernised legislation regarding industrial relations and social security while introducing legislation covering World Heritage area protection, outlawing sex discrimination, safeguarding privacy and establishing organisations such as ATSIC and the Australian Postal Commission. While Hawke’s personal reputation was not immaculate either before or during office, he publically promised to give up drinking while he was prime minister:
There is no doubt that excessive drink sometimes brought out an unpleasant personality change which, had I continued to drink, would have made me unfit to be Prime Minister.
The point here about Hawke is the authenticity he demonstrated as a leader, of both the union movement and government, to encourage people to accept compromise for the common good. Those that can remember the era would probably also remember that when the ‘Summit’ was announced, there was general derision that it would not end well. The reality is that the Accord held for the majority of the Hawke years as prime minister albeit with various amendments to reflect changing conditions and circumstances.

Unlike Kevin (I’m from Queensland and I’m here to help) Rudd who sold his message well, Hawke demonstrated that the item they purchased in the election was as advertised on the box. While Rudd did sign the Kyoto Agreement and say sorry to the stolen generations, Hawke delivered meaningful change on an ongoing basis, leading to a long term of prime ministership. While Rudd was afraid to use his political capital to push through action on climate change, Hawke made brave and calculated decisions for the betterment of Australia — and took the majority of the voters along on the ride with him. Howard also took calculated decisions that could have used a lot of his political capital: namely the GST, gun control and his treatment of refugees. It seems that while those actions were acceptable to the majority of voters, his attempt to restructure workplace relations crossed the line.

The history of the challenges between current Prime Minister Turnbull and former Prime Minister Abbott is well known and it’s not worth re-hashing it here. Suffice to say that the (reasonably) recent challenge to Abbott by Turnbull was not the first vote on his leadership. The first one was in February 2015, where no one put up their hand to replace Abbott. Abbott won by a less than convincing 61 to 39. Just think about that for a minute; 39 of his own colleagues preferred ‘anyone but Abbott’ less than two years after a ‘famous’ election victory.

Clearly Abbott, in the view of the majority of his colleagues, had lost his mojo, so to try and get their message across, the baton was passed to Turnbull (despite his previous history). AAP (via Yahoo News) reported:
Deputy Labor leader Tanya Plibersek said Mr Turnbull's personal quest for the top job was now fulfilled but she wondered where that left the country.

"He's very smooth and I think that'll work for him in the short term but people will very quickly come to see that smoothness as a sort of slick merchant banker approach to public life," she told ABC radio.
ALP Leader Bill Shorten said:
“I think it is a good thing for this country that Tony Abbott is no longer PM of Australia,” Mr Shorten said.

“I certainly believe that with the change in leadership in the Liberal Party, the chances of having an intelligent discussion and negotiation, I certainly hope they’ve improved.”
So how’s Turnbull going? Well for a start, he hasn’t changed much as predicted by Plibersek. Despite the claims of being a new government with new ideas, the ‘steady as she goes’ mindset doesn’t bode well for the LNP when part of Abbott’s problem was that one of the key deliverables in government was a budget in May 2014 that still hasn’t passed the Parliament in full — hardly the work of an authentic leader.

While Shorten’s personal approval has taken a gigantic hit with the advent of Turnbull’s prime ministership, William Bowe’s Pollbludger (an average of the polls taken in the last month) suggests that the ALP is doing considerably better in the polls than Shorten’s popularity and a win in 2016 is not a laughable suggestion. Bob Hawke in what has become an annual speech at the Woodford Folk Festival is reported to have said
When asked whether the Member for Wentworth was a threat to his party, Mr Hawke replied "of course he is".

But he was far less effusive of the PM's predecessor, who he said "wasn't a great prime minister but he was a decent man".
So Hawke suggests that Turnbull is at least competitive — but is he an authentic leader? He was rolled in 2009 because he supported the ALP’s Carbon Pollution Reduction Scheme. Now he supports the LNP’s Direct Action, just as Abbott did. Turnbull was the leader of the Republican movement in the late 1990’s when the referendum was held: today he supports Abbott’s monarchy. Turnbull in 2009 supported same sex marriage: today he supports Abbott’s plebiscite (if it ever happens). So what are the differences. The SMH article linked above gives a few wishy-washy examples where the words have ‘wriggle room’ so large that you could drive a bus through.

Maybe that’s it. Turnbull has tweeted that he likes catching the 389 or 333 bus to Circular Quay from his electorate office. Abbott (if he used public transport) would get the Manly ferry. Turnbull also seems to dress better than Abbott (and probably would never be seen in ‘budgie smugglers’). Small and incremental change doesn’t win elections, just ask Malcolm Fraser (who lost to Hawke in 1983) or the various LNP leaders in the 1980’s and 1990’s. Stephen Harper may also have a few comments from a Canadian perspective.

Shorten came to fame as a Union leader who managed to achieve results for his members while maintaining the ability to work with management — sound familiar? Turnbull is showing no signs of authentic leadership, except for a predilection for ‘nice’ suits and catching buses. As soon as he suggests a change, Andrews, Abetz, Abbott or Bernardi get on the airwaves and the suggestion is taken quietly down a dark alley; then strangled.

With an election later this year it’s not a hard choice to find the authentic leader and he isn’t on the 389 from Bondi.

What do you think?


The year of the union

For the Chinese, 2016 is the ‘Year of the Monkey’ but I think in Australia it may well be the year of the union — although not in a positive way. As it is an election year, and in the light of the Trade Union Royal Commission (TURC) report in December, we can expect the Coalition government to have a lot to say about unions during the year. Turnbull, in releasing the TURC report, has already indicated that he will make union ‘corruption’ an election issue if his legislation to implement the TURC recommendations, including the reintroduction of the Australian Building and Construction Commission (ABCC), does not pass parliament.

Unions of course will not take this lying down. The ACTU responded to the release of the TURC report by stating:
The ACTU rejects any accusation of widespread corrupt, unlawful behaviour in the union movement. We take a zero-tolerance approach to unlawful conduct, whether in the union movement or elsewhere. Isolated instances of unlawful conduct must always be referred to the police. Unions stand united to ensure any individuals convicted should feel the full force of the law. There is no place for crooks in our movement.

The ACTU welcomes sensible discussions about best practice governance. Prime Minister Malcolm Turnbull must allow space and time for these discussions to occur. This report should not be used to rush legislation that removes employee rights.
It also saw that the TURC report and a Productivity Commission review, which recommended a reduction in penalty rates, were related:
It is clear from the timing of the Royal Commission’s report that these two reports were always designed to attack the rights and pay of working people and undermine unions who defend their rights and pay.
We do not often see issues discussed in terms of workers’ rights in Australian media but the International Trade Union Confederation (ITUC, representing 180 million workers world-wide and currently led by former ACTU president Sharan Burrow) has rated Australia as having ‘regular violation of rights’. This appears in the ITUC Global Rights Index which tracks legislation that limits workers’ rights and actual incidents of violations: these are tallied together and each country then given a score between 1 and 5, where 1 represents rights being generally guaranteed and 5 being no guarantee of rights.

Australia’s score of 3 means:
Governments and/or companies are regularly interfering in collective labour rights or are failing to fully guarantee important aspects of those rights. There are deficiencies in laws and/or certain practices which make frequent violations possible.
By comparison, the USA scores 4 (systematic violations of rights) and Brazil 2 (slightly weaker collective labour rights than those with a rating of 1 but certain rights have come under repeated attack).

Interestingly, however, the USA, since a 1977 Supreme Court decision, has had a rule that public sector workers who benefit from union representation — such as higher wages and improved conditions — can be made to pay their fair share to the union and a number of states did introduce laws to enforce this. In other words, in the land of ‘free enterprise’ the union basically can claim a ‘fee for service’. (That is currently being challenged in another court case, with a ruling expected in June 2016).

In Australia, governments across the country have introduced ‘fee for service’ models into all sorts of public services but refuse to recognise it in respect to union activities and are doing as much as they can to undermine unions and workers’ collective rights. In fact, ‘fee for bargaining services’ is explicitly made illegal in Australia, other than union membership dues — but because a person cannot be made to join a union, it is possible in Australia to have ‘free riders’ who benefit from union bargaining without making any contribution. (The ‘free rider’ effect was what led to the original US Supreme Court decision.) In that regard, the ILO (International Labour Organisation) has found that in Australia, although less than 20% of employees are union members, 60% of employees work under collectively bargained conditions.

The ITUC provides quite a long list of the problems in Australia — note that these relate to a period up to early 2014: the link is here but also click on ‘In Practice’ to see the rest of the list. It includes:
  • employers have a discretionary right to refuse to bargain with representative trade unions
  • prior authorisation or approval by authorities is required to hold a lawful strike
  • restrictions with respect to the objective of a strike (eg economic and social issues, political, sympathy and solidarity reasons are not allowed)
  • authorities’ or employers’ have power to unilaterally prohibit, limit, suspend or cease a strike action
  • employers are using delaying tactics to avoid collective bargaining
  • individual agreements are undermining collective bargaining
  • many employers (particularly in the mining sector) do their best to frustrate trade union activity
Some employers try to avoid bargaining with a union and the ITUC assessment provides one extreme example:
The employer went to great lengths to avoid bargaining with the union by closing the mine for three months (to avoid certain transfer provisions in the Fair Work Act), hiring a small number of employees (21 from a required total of over 400) who were thought to be non-members, and negotiating an agreement directly with the employees and excluding the union. The employer essentially forced the employees to relinquish their rights to be represented by the union by having them appoint themselves as their own representatives for the bargaining.
In America, and to some extent in Australia, this is done under the banner of the ‘right to work’. That is a neo-liberal banner that claims each individual should be free to choose the manner and conditions of their work and not be ruled by external influences — like collective bargaining and union involvement. It was an idea that was originally abandoned in Australia in the Harvester decision in 1907 when Mr Justice Higgins determined that:
The provision of fair and reasonable remuneration is obviously designed for the benefit of the employees in the industry; and it must be meant to secure to them something which they cannot get by the ordinary system of individual bargaining. [emphasis added]
Since the 1970s, however, individual bargaining has eased its way back towards centre stage.

The attempts to reduce workers’ rights and working conditions, and remove unions from the equation, has been reflected in agreement negotiations in the Australian Public Service. Some public servants have not had a pay rise since 2014 as, at the direction of the government, public service departments delayed negotiations or included proposals that staff could not agree to. One interesting approach was to offer to maintain conditions but to remove them from agreements and make them ‘policy’. In December 2015, the CPSU (Community and Public Sector Union) warned staff in the agriculture department that:
If your rights are taken out of your agreement and put into policy, they can be removed or changed at any time. In some agencies that have voted yes this is already happening!

Just weeks after a small majority of workers said yes in DSS, management moved to change their consultative arrangements in a way that meant union delegates were no longer being consulted.
Effectively taking unions out of the industrial relations loop is part of the ‘right to work’ approach and has been pursued by the Howard, Abbott and now Turnbull governments. Turnbull may cloak it in fine words but the intention of his proposed legislation in response to the TURC report is to further erode the influence of unions.

All this may not mean much to many in the electorate but there are 1.6 million union members in Australia: that is the ABS figure for 2014, whereas the ACTU claimed late in 2015 that the membership in its records suggested a figure of 1.8 million. Either way, that is certainly the lowest level of union membership in the workforce since detailed records have been kept: it has come down from about 40% of the workforce in 1992.

While the official ABS figures suggest union membership is down to 14% of those in employment, that is slightly misleading because the ABS counts owner-managers of both incorporated and unincorporated enterprises and many, if not most, of those would not be likely to join a union in any case. Union membership only for those who are employees is somewhat higher at 17%, or 19% if we use the ACTU figure.

As at 30 September 2015, there were 15,259,399 enrolled voters in Australia. Union membership, therefore, represents between 10.5% (using the ABS figure) and 11.7% (the ACTU figure) of voters — which gives unionists about half the electoral power of those aged 65 and over, who represent 21.8% of the electorate (which also gives a clear indication why the ‘grey vote’ is so important). Even so, about 12% of the electorate is a figure that cannot really be ignored and especially so if one considers that there may be influences to non-union members in a person’s family or circle of friends.

The problem is that union members are not evenly distributed across electorates. Although I do not have actual figures, I suspect they are disproportionately represented in what are strong or safe Labor seats which is why the government believes it can launch its union attacks. It knows the attacks may cost votes in Labor seats but that will make no difference to an election outcome. It is hoping that by bashing the unions, it can gain enough votes in ‘swinging’ seats to hold on to government.

The government, however, should note that, as reported in The Guardian, Essential Research found in 2015 that 62% of Australians believed unions were important (that figure had increased since 2012) and 45% believed workers would be better off if unions were stronger (compared to 26% who thought workers would be worse off). Given those figures, government attacks on unions can backfire if that 62% begin to believe that the government is going too far — as they did when Howard introduced WorkChoices.

Before people start believing the government’s rhetoric regarding unions they should consider some of the facts, even as revealed by the ABS which by no means can be considered a propagandist for unions. The median weekly income for employed persons in a union in 2013‒14 was $1,200 compared to $960 for non-union employees (and the mean was $1,295 compared to $1,162). Overall 24% of those in employment did not have paid leave entitlements: while this includes the owner-managers, it would also include some casual and part-time workers. Of union members, however, 91% had paid leave entitlements.

In America, workers have no nationally mandated paid leave: it is entirely a matter for employers and employees and to some extent state and local regulations. It was found in 2006 that workers who were union members in the USA received on average 13 days paid leave and 8 paid public holidays while non-union workers received 9 days paid leave and 6 paid public holidays. Given our experience in Australia, it is difficult to comprehend that the amount of leave a worker is entitled to can be dependent on whether or not one is a union member.

Even with all the changes that have taken place in Australia, the Fair Work provisions include ten nationally mandated minimum standards including:
  • a standard 38-hour week
  • four weeks paid annual leave
  • ten days paid personal/carer’s leave each year and two days paid compassionate leave for each eligible bereavement
  • long service leave
  • a right to request flexible working arrangements
While these conditions may now be legally mandated, they did not arise out of the blue nor out of the goodness of heart of employers or government. Those conditions, now accepted as the norm, were fought for over many years by unions. If the role of unions is further diminished in coming years, where will improvements in workers’ conditions come from in the future?

Turnbull may think he is on a winner bashing the unions but the effectiveness of his campaign will depend on two crucial external factors:
  • the effectiveness of any union campaign against the changes he proposes (they did, after all, mount an effective campaign against WorkChoices), and
  • whether the 62% of Australians who support unions perceive that he is going too far (the unions will certainly do their best to foster that view)
So his task will not be easy and can unravel and backfire on him and on the Coalition’s electoral chances. Despite the risks, I believe Turnbull and the Coalition will persist with it because it is consistent with their neo-liberal economic agenda and has the support of their big supporter — big business.

What do you think?
Why did Turnbull promise to make union ‘corruption’ an election issue? Is it no more than his pursuit of an ideological agenda in support of big business?

Please let us know what you think are the pros and cons of Turnbull’s approach both for the Coalition and Labor.