News&Views, No 19, May 29 to June 2.
Updated: Jun 5, 2022
The Oz, May 29, P17, Paul Kelly, ‘Anthony Albanese signals a new style of government that may fit the times’.
‘Anthony Albanese’s position as a new prime minister is stronger than it appears. Albanese benefits because this election delivers two results – a narrow ALP governing majority and a structured collapse in the social and cultural foundation of the Liberal Party vote.
‘This is a real realignment election and Albanese becomes a realignment prime minister. This is the pivotal point and his unique opportunity. The enlightenment gives Labor more advantages than is apparent. Albanese has signalled a new style of Labor government that may fit times.’
In conclusion: ‘Expect the Teals to keep or even expand their seats. That means the Liberals are in a structural trap. There is no way the Liberals can claw back solely from Labor all the seats they need to win government next time. Albanese has hidden strengths in our realigned politics – but as a conscript of history he will need them’.
Dennis Shanahan, P 17, ‘Liberals will need to take on board some hard lessons’.
‘A win is a win, and tears, recriminations, claims of a lack of mandate, the lowest primary vote on record or that Labor is only a hybrid government tinged irrevocably teal and green from its independent allies vanquishing the Coalition are pointless.
Janet Albrechtsen, P 21, ‘Dutton won’t be fazed by gibes from the hateful left’.
‘There is a cottage industry about to take off like a Telsa-fuelled rocket-taking Peter Dutton.
Sections of the left especially will revel in interpreting every grimace. A raised eyebrow here, a sideways glance there. They will mock Dutton’s bald head’.
Today I watched Mr Dutton’s presentation for 50 minutes. He only smiled once, but his presentation was excellent. He will make a fine leader and eventually (my guess) an excellent Prime Minister.
Greg Sheridan, P 22, ‘This strange, and perhaps golden, first week for the incoming federal government has involved a degree of improvisation and, so far, it is working’.
‘The security challenges confronting Australia are enormous. There is no guarantee at all that Australia, and any government, can successfully navigate these’.
AFR, May 29, P1, ‘Australia hits refresh. Anthony Albanese in his first week met with world leaders, pushed back against China and rejected Greens demands but, as the victory euphoria fades, the new PM faces difficult challenges – rising prices, wages and increasing interest rates.’
Editorial&Opinion, ‘An upright start to governing in sobering times.’
‘Albanese has begun his prime ministership with a brisk, upright and orthodox approach to most of the country’s biggest challenges with China, the budget and on energy and inflation. Flying to Tokyo for the Quad summit barely 48 hours (and a quick swearing in) after declaring an election victory was awkward timing but an unmissable opportunity.
‘Australia’s new PM underscored the US alliance, our relationship with Asian giants Japan and India, and Labor’s commitment to the Quad as a collective response to an overbearing China.
‘Just as importantly, Mr Albanese restated Australia’s terms for a restart in relations to Beijing after Premier Le Keqiang extended the olive branch a little further. China declared this trade warc, and it’s China who should call it off. Mr Albanese has not changed anything different here.
‘The prime minister also used the Quad to dispel the idea that Australia is a global climate laggard.’ Read on gentle readers.
Also look at David Rowe’s cartoon. Albo, dressed as a girl looking out of her door, with a large, bald blue-faced person looming behind Albo. ‘Morning Albo’ the blue-faced man said.
Albo, holding a dog called Toto, said ‘I have a feeling we’re not in Marrickville any more.’
The Oz, 30 May, P1, Patrick Commins, ‘Alert on $45bn Labor spree’.
‘Labor risks putting the country’s triple-A credit status is in danger if it races to implement nearly $45bn in ‘off-balance-sheet’ election promises, one of the top rating agencies warns.
‘As Anthony Albanese flags the potential for additional cost-of-living support, Standard & Poor’s Global Ratings lead country analyst Anthony Walker told The Australian that further government spending risked stoking inflation and a more aggressive Reserve Bank response.
‘Mr Walker also said those risks would provide a further brake on recovery, and place pressure on the Commonwealth’s finances.’
The following para tells us about items that supposedly make up the additional $45bn of spending. Time will tell, but many savings from the Coalition’s budget would be needed or the new budget would play havoc with the economy.
May 30, P 12, ‘Economic reality bites with AAA rating in the balance.’
‘S & P is awaiting more information from the treasurer on the government’s budgetary intentions, which ‘will set the fiscal tone for the new budget, and set the tolerance they have for spending’, Mr Walker said. Dr Chalmers will provide an economic update when parliament resumes next month in July, followed by a new budget in October’.
P13, Paul Dibb, ‘Humiliated and weakened, Putin more dangerous’.
‘The military humiliation of Russia and its Ukrainian quagmire rises the ultimate question for Moscow; is this now the end of Russia as a major power? In many ways, what we are witnessing in Ukraine today may be the prolonged death throes of the Russian empire, which started 30 years ago with the end of the Soviet Union. But how much weaker and smaller may it become?
AFR, 30 May, P 38, Editorial&Opinion, ‘Labor needs to reverse-engineer budget mandate’.
‘The AFR view. The new Labor government has said mostly the right things on Australia’s fiscal challenge. In post-election mode, Treasurer Jim Chalmers and Finance Minister Katvdy Gallagher have switched to warning about the more ‘dire’ position of the federal budget and the ‘huge’ spending pressures – such as healthcare, aged care, disability services and defence – building up over the rest of the decade.
‘As urged by the Australian Financial Review, Anthony Albanese has recommitted his government to the Coalition’s legislated stage three personal income tax that from mid-2024 will leave most taxpayers paying no more than 30c in every dollar earned’. …
‘Labor’s line item review by Treasury and the Department of Finance needs to be backed by robust cost-benefit analysis of new spending promises, including for its promised childcare subsidies. …
‘… Labor should not only support a tax cap, but commit to reversing the increase in government spending as a percentage of GDP. And it should commit during its first term to a credible return to surplus by the end of the decade, to start building the nations fiscal buffers and to stop throwing more borrowed money on the nation’s public debt pile’.
P 38, James Curran, ‘It’s back to diplomacy as destiny’.
‘The Albanese government’s national security team can now bring a greater degree of conceptual thinking to handling China’s assertiveness.’
P 39, Alex Joiner, ‘Aggressive interest rate tightening could trigger housing crash’.
‘The RBA must not compound its inflation failures with a second growth-weakening error. This would risk a prolonged and painful ‘balance sheet’ recession.’
I must say there is room for debate in this matter. Philip Lowe says the cash rate ‘might reach 2.5 %’. Inflation in the US looks as if it might be slowing, but at a much higher rate of inflation than it seems likely might be lower here but if it is not, Dr Lowe’s benchmark will be higher. In fact, my general rule is ‘goods and services inflation needs to be not much lower than cash interest rates’. The RBA’s 0.1 %, now raised with more rising to come, played with serious silliness.
I would be happy to be part of the proposed review of the RBA. My phone number is 0403 048 105.
The Oz, May 31, P1, Geoff Chambers, ‘Dutton takes fight to suburbs.’
Peter Dutton has set up a show-down with Anthony Albanese over climate change and the economy, warning that the new Labor government’s policies will drive up electricity prices, inflation and the cost-of-living.
‘After being selected unopposed [Josh Frydenberg having failed to win at Kewyong] – as the 15th Liberal Party leader and the first from Queensland on Monday – Mr Dutton made a pitch to the ‘forgotten people’ in the suburbs and regions, and promised to win back multicultural and women who abandoned the party at the federal election.’
Greg Sheridan, P 11, ‘No place for separate voice in a liberal ethos’.
‘Peter Dutton is the right choice to lead the Liberal party. This is the time for a pragmatic conservative. …
‘Perhaps, most important this term is that they should oppose, in principle, the move to establish in the Constitution an elected voice to parliament exclusively for Indigenous people. Dutton is right to wait for the details of Labor’s proposal, but people should make the in-principle argument against racial classification in the Constitution or a bad and emotional decision will be made’.
A long article but well worth reading.
Judith Sloan advises that ‘Fast-growing wages would put us all at risk.’
I am in total agreement, but who can decide how to increase productivity? Everyone sensible says ‘productivity must be increased’ but no-one seems to have view of how to do it. Please turn brains to this vital matter
Please send me your thoughts (email@example.com)
AFR, 31 May, P 38, Editorial&Opinion, ‘The Liberals must now be the party for everywhere.’
‘The key practical point for the opposition now is that Labor’s election promises on cost-of-living relief, higher wages and cheaper, cleaner and reliable power are about to collide with the global energy crisis, higher inflation, rising interest rates and continued low real wage growth. There appears no quick way out of this. The way out needs to start with a major productivity-enhancing industrial relations breakthrough at Mr Albanese’s foreshadowed jobs summit. This could offer fertile territory for someone with Mr Dutton’s cut-through skills who says his primary job will be to hold the government to account.
‘When both major parties have converged on the net zero target, that should not require restarting the climate wars by playing hard ball on Labor’s 2030 interim emission targets. That would be in keeping with Mr Dutton’s hardman reputation as a conservative warrior, as his turning the federal integrity commission on the government by calling for a stronger model that would probe Labor’s union links. But Mr Dutton also knows that his aspiration must be to set out an alternative governing agenda to take to the next election – which, if effective, can make the Liberal Party an everywhere party for all Australians; in the cities, suburbs and the regions too.’
The Economist, 28 May, P 67, ‘The rest is history’.r
‘Even as a boy, Ismail Can, a Turkish shepherd, knew that the large mound outside his village, known as Karahan Tepe, contained wonders.
‘Flint fragments, once used as tools, littered the mountainous area, …
‘Large slabs of limestone, clearly hewed and shaped by human hands, emerged from the earth’.
In conclusion: ‘Whatever brought the hunter-gathers of Upper Mesopotamia together endured. Gobekli Teke was used more or less continuously from 9500 BC to 8000 BC, the same span of time between from the collapse of the Roman and the advent of space travel.
‘The temples seem to have lived and died with their architects. Every few generations the enclosures were buried, along with the monoliths, only for new ones to be erected next door. No one knows why. Today, one shovel of dirt at a time, they began to come back to life.’
The Oz, June 1, P13, Paul Kelly, ‘Dutton must aim for Liberal renovation.’
‘Facing a debilitating loss, new Liberal leader Peter Dutton has signalled his technical grasp of two fundamentals – make the Albanese government the issue and prioritise stability and unity within a deeply damaged Liberal party.
‘Defeat breeds frustration, anger division. The first task is healing and repair within. Dutton’s opening remarks identify, as much as possible, a road ahead. That’s vital in creating a sense of purpose amid the ruins.
‘But the liberals need to grasp that Labor is unlikely to fall apart in office, that just holding Labor to account won’t do the trick, and that the liberals need a strategy of organised and managed change of their party, top to bottom.’
Alan Dupont, ‘China our biggest test since Japan in WW11.’
‘Despite the rejection of his ambitious trade and security deal by Pacific Islands leaders, Chinese Foreign Minister Wang Yi’s diplomatic road show underlines the strategic nature of Beijing’s unprecedented investment in the South Pacific and the extent of the challenge to our economic and security interests.’
Lovely cartoon by John Spooner. Sitting on a log, surrounded by ducks and soaked by rain, Albo reads from a sheet of paper: ‘Under my government we will end this dangerous global warming cold climate weather divisive war.’
AFR, June 1, P1, Angela Macdonald-Smith, ‘Gas price ‘chaos’ forces caps’.
‘A forecasted spike in wholesale gas prices in Victoria of more than 50 times normal levels has prompted the Australian Energy Market Operator to intervene and impose a price cap, after a polar blast hitting Victoria drives up household demand to a record and more gas is used in power generation’.
Chanticleer, P 44, ‘Labour shortage at crisis levels’.
‘A fruit grower in South Australia who is funded by one of the big banks had arranged visas for a group of South Pacific Islands to come to his farm for fruit picking.
‘The team of workers flew to Adelaide and were being taken by bus to the fruit grower’s property when the bus was flagged down by a neighbour who persuaded the workers to work on his property on higher remuneration’.
Very not nice, but shows the power of naked capitalism.
The Oz, June 2, P1, Perry Williams, Patrick Commins, ‘Gas, power in short reply’.
Regulators have warned Victoria, South Australia and Tasmania face potential gas shortages while power supplies in NSW and Queensland will be stretched over the next 24 hours, as Jim Chalmers declared a ‘perfect storm’ of energy price spikes confronted the economy.
‘In an emergency telephone hook-up on Wednesday, the Australian Energy Market Operator, which runs the power grid and gas markets, warned more than 100 industry players they might be forced to cut gas use if the shortfall materialised. AEMO also invoked an emergency supply guarantee mechanism on gas producers for the first time since it was introduced in 2017’.
P 10, Editorial column, ‘Economy resilient, despite inflationary pressures’.
Dr Chalmers said while the national accounts contained ‘some pleasing elements’, the nation faced serious constraints and economic challenges.
‘Inflation and interest rates have been higher at the end of March, petrol prices were up 12 per cent since the end of April, and wholesale electricity and gas prices were significantly higher. Amid ongoing inflation, the Reserve Bank will meet again on Tuesday to review interest rates’. …
And Jim Chalmers said is a separate article: ‘There’s no use mincing words: our challengers are dire’.
AFR. P1, Andrew Tillett, ‘Political’ links need to mend before China drops trade bans’.
The ever friendly Chinese Ambassador has rebuffed ‘Anthony Albanese’s demand that trade sanctions targeting more than $20 billion of Australian exports be listed, saying it will not happen until there is an improvement in the ‘political relationship’.’
Fair enough I guess. Meanwhile several small Pacific nations told another Chinese official that they did not want such an all-encompassing agreement, and the Chinese proposal was withdrawn. A lesser offering is assumed to be in the works.
Moving from P1 to P54 provides more information. The Ambassador has said: ‘… lifting Beijing’s trade sanctions against Australian wool, wheat, beef and wine will be conditional on a ‘better political relationship’.
‘It was foreign affairs novice Albanese who last week hit on the right formula for how the reset should work.
‘Responding to Chinese Premier Li Keqiang’s letter of congratulation, Mr Albanese called on Beijing to mend relationships by removing its economic coercion. If China is serious about an improved relationship, it should stop yielding the trade stick’.
P 55, John Kehoe, ‘Hot pay rises would do us more harm than good.’
‘If Australia is to successfully avoid repeating the wage-price spiral afflicting the overheating US economy, most workers need to begrudgingly accept a real wage cut over the next year.
‘It’s a bitter pill to swallow, but necessary medicine to help control inflation, limit the number of interest rate rises, and avoid thousands of people losing their jobs’.’
Great work if it can be done.
Fiona Prior muses on the Johnny Depp/Amber Heard relationship calamity. Celebrities have better looks, more money and potentially far greater scope to be nasty to each other than we mere mortals. More here.