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  • Peter Jonson

News&Views No 20, June 2-3 to June 8

The Oz, 4-5 June, Greg Sheridan, ‘Welcome to the job, now the hard work on defence begins.’

‘Some ideas for Team Albanese on how to fix long-neglected capability’.

Dear Anthony and Richard,

Congratulations on your election win – majority government amid political fragmentation is no small achievement. I know you both care deeply about national security. It’s because our nation is facing a time of unique danger, and your government faces fateful decisions and dangers of its own, that I’m writing you an open letter, something I have never done before’.

‘One day we may not have the Americans to save us. We must be able to save ourselves’.

Anthony and Richard, you have huge decisions to make about submarines, missiles, drones, armour, and defence industrialisation…

If you get the existing Defence Organisation to inquire into these matters, they will tell you to stick with all the existing purchases and strategy, but that advice is no good. As a retired admiral said to me lately: ‘Business typically fails quickly and cuts its losses. The navy fails slowly. And as it’s failing, it keeps spending money’…

‘Drop the truly absurd tank purchases. Cut the armoured vehicle order from 450 to 200. Spend those billions on long-range, ground fired missiles’…

‘We must have another conventional sub …

‘Stick with the AUKUS subs in the meantime or we could end up with no subs, as we did in WWII …

‘We got the F-18 fighter aircraft only because Brendan Nelson could see more clearly than Defence that the F-35 would be delayed’ …

‘The Hunter frigates are a ridiculous waste of money. They are overweight, overpriced, delayed and don’t have enough missile launchers to be competitive against Chinese ships...

‘You will have to increase the defence beyond 2 per cent of gross domestic product if you acquire any subs, AUKUS or conventional in the meaningful. But you must be ruthless in spending the current budget …

‘And within defence itself, put Mike Pezzullo, the secretary of the Home Affairs department. He ain’t pretty but he gets things done.

This is an entirely vital reform of Australia’s defence program. Sadly, I believe, total annual spend should rise until it is 5 % of GDP.

Paul Kelly, P 17, ‘Tests for the Voice at a time of dissent’.

‘The Albanese government has won a mandate to put before the people an ambitious referend for an indigenous voice to parliament that can succeed only if across the nation that if there is a widespread that this will lead to a more united and reconciled Australia. This is the test’.

Chris Kenny, P 18, ‘It is an abiding insult to our indigenous people that after all the blood, sweat, tears and years go put into the proposal, it was dismissed out of hand by them prime minister Malcolm Turnbull within days. But the power of the idea and the goodwill of Australians cannot be so easily rebuffed, not can the fundamentally conservative nature of the model.’

AFR, 4-5 June, P1, John Kehoe et al, ‘Labor backs coal to fix power crisis.

‘Resources Minister Madeleine Kinh has said coal-fired generation must step up to help reduce soaring energy prices, as she cast doubt un pulling the so-called ‘trigger’ to force export gas into the domestic market.

‘Describing the energy price spike as a ‘perfect storm, Ms King said big gas producers were doing as much as they could to maximize supply and it was important that coal filled the void to push energy prices down.’

Editorial&Opinion, 4-5 June, P 38, ‘Gas-fired baptism for a new cabinet with much to do’.

‘Like much else in the post-pandemic world, an inflation topped with an energy by forces beyond Canberra’s control. After three years of blaming Scott Morrison, the best Labor can do is admit it doesn’t know any quick fixes either’.

The Oz, June 6, P1, Ben Packham, ‘PM protests Beijing’s fighter plane intercept’.

‘Australia’s air force will keep flying over the South China Sea despite a dangerous interception by a Chinese J-16 fighter that placed the crew of an RAAF surveillance jet is one of the most serious peacetime incidents of its type involving an Australian aircraft’.

‘Chief of the Defence Force Angus Campbell and Defence secretary Greg Moriarty lodged furious protests with their People’s Liberation Army counterparts after the Chinese aircraft buzzed the Royal Australian Air Force P-SA Poseidon, launching flares and ‘chaff’ countermeasures, and the lives of its crew.’

A totally idiotic and dangerous manoeuvre.

AFR, Editorial&Opinion, 6 June, P 38, ‘Time for realistic net zero plan’.

‘Climate Changes and Energy Minister Chris Bowen is correct about the climate wars leaving Australia ill-prepared for the full-blown energy crisis that has landed in the lap of the new Labor government. There are now no quick fixes to the perfect storm of global and domestic events that has produced a gas shortage and sharply higher electricity prices.

‘Australia must transform its carbon-intensive intensive resource in a world moving towards net zero by 2050. But the lesson of the crisis is that the decades long transition that matches to cleaner energy simply to cleaner energy cannot be simply by flicking the off-switch on fossil fuels’.

'China‘. The Economist 28 May, P 22. ‘How to see X’.

Amid their frantic efforts to halt the spread of covid-19 and revive a sputtering economy, officials around China have also had to attend some routine meetings. They involve lectures on the need for absolute loyalty to the country’s leader Xi Jinping.

AFR, 7 June, P 38, Editorial&Opinion, ‘Indonesian ties an opportunity and a challenge’.

‘Antony Albanese has made bolstering the Australia-Indonesia relationship the first signature diplomatic move of the new Labor government, having blamed China’s security and economic incursions in the South Pacific on the Morrison government’s supposed neglect of Australia’s backyard.

‘The perennially underdone relationship with Indonesia is ripe for revitalising. It’s a big opportunity but also involves considerable challenges. Despite the shared interests in a peaceful, secure, and rules-based Indo-Pacific, deeper ties will have to navigate Indonesia’s different perspective on regional security.

‘Those differences were exposed by Jakarta’s warning that the AUKUS nuclear submarine packed – which the Albanese government fully backs – could trigger a regional arms race that militarises the Indo-Pacific. This has been further underlined by President Joko Widodo’s warning that US-China strategic competition in the region must be well managed to avoid open conflict’.

The Oz, June 8, P1, Patrick Commins, ‘RBA’s biggest hit in 20 years’.

‘The Reserve Bank has warned more large interest rate hikes are on the way after delivering the biggest single increase in two decades, leaving homeowners facing of dollars more in monthly mortgage payments.

‘RBA governor Philip Lowe signalled a new-found a new-found sense of urgency to return to ‘normal’ monetary policy settings as inflation rises faster than previously anticipated, lifting the cash interest rate by 50 basis points to 0.85 per cent’.

Henry Thornton, Free economist, June 8, ‘What does ‘normal’ interest rates mean?

‘The first mistake was cutting the cash interest rate to 0.1 %. A record, designed to give a rapid jerk to the economy.

‘Now the economy is headed, according to Dr Lowe’s guess, ‘perhaps 2.5 %. Still well below a ‘normal’ rate, possibly 5 %.

‘As former RBA Chief Ian Macfarlane says, an even more plausible top rate might be 8 %.

‘Talking recently with Mrs Thornton, Henry nominated 8-10 %, close enough to Macca that it just shows how great minds think alike.

‘How to restore ‘normal’ rates may take another decade and a severe recession. Dr Lowe will hardly be helping his deputy who will need a far stronger board once the serious revamp of the RBA board is introduced. A non-executive Chairperson will, one hopes, be appointed with a full-time ‘governor’ and ‘deputy governor’.

AFR, John Kehoe, 8 June, P1, ‘Super-size hike with wage warning’.

‘The shock and awe of the first 0.5 rate rise in 22 years is a signal that the Reserve Bank of Australia is nervous about the Albanese government, unions and workers demanding wages must keep pace with inflation.

‘A now hawkish RBA is determined to ensure the inflation spike is temporary.’

The Oz, June 9, P1, Ben Packhan, Following Peter Dutton, ‘Secret plan to fast-track nuke subs’.

Peter Dutton, ‘I am speaking out because Labor is on the cusp of making a very dangerous decision which would be against our national security interests.’

Please turn to P13 to find Mr Dutton’s full expose.

Mr Packham starts as follows: ‘Defence was working on a plan to purchase two Virginia-class nuclear-powered submarines from the US by 2030 – art least a decade before their scheduled arrival if they were built in Australia’.

Henry Thornton has suggested such an outcome for some time, at least two years, and this is another example of great minds at work.

AFR, June 9, P 38, Editorial&Opinion, ‘Budget prudence is now needed to fight inflation’.

‘The day after the Reserve Bank signalled that it would do whatever it took to normalise monetary policy to fight inflation, the focus has turned to re-anchoring the budget expectations set loose by the pandemic and an election campaign in which neither side would commit to fair dinkum fiscal repair.

‘Both arms of macroeconomic policy must work in unison to contain the outbreak of consumer price inflation that, amid the energy shock, could spiral to 8 per cent, according to former RBA governor, Ian Macfarlane.

‘Now, Treasury secretary Steven Kennedy has warned that the fiscal strategy endorsed endorsed by both the Coalition and Labor – relying on continued growth and ultralow interest rates to reduce the size of and the budget and public debt an a share of GDP – has been thrown off course by the inflation shock that triggered the start of the central bank’s tightening cycle’.

Andrew Mohl, June 9, P 51, ‘The RBA’s failings are logion. It needs a truly independent review’.

’The Reserve Bank did not forsee the surge in inflation. It would be naïve to believe it can now forecast now and when it can be tamed.’

(*With thanks to Mr Spooner)

Peter Dutton, Ian Macfarlane, Andrew Mohl, Steven Kennedy, even Henry Thornton, together have advised Mr Albanese and his troops. If these warnings fail, Australia’s macroeconomic decision will become as a rotted towel.

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