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Chalmers derides Dutton’s ‘hyperventilating hyperbole’ over super changes
Paul Karp
The treasurer, Jim Chalmers, has hit back at the opposition leader, Peter Dutton, for suggesting Labor is running a socialist agenda.
Chalmers told Radio National:
He’s getting more and more ridiculous every day. We’ve finally found someone more negative than Tony Abbott, more divisive than Scott Morrison, and more ridiculous with every passing day. He is the poster child for the sort of politics Australians rejected in May, and he seems to have learned nothing from that. These ridiculous scare campaigns, and this hyperventilating hyperbole every day [show he has] learned nothing from the last wasted decade of needless conflict.
Earlier, Dutton claimed that Labor’s super tax changes will “disincentivise young Australians from putting their money into super”.
He told the Australian Financial Review conference:
The government is beating the drums of class war. Whether you’ve got $30,000 dollars, $300,000 dollars or $3 million in your super fund is not the point. The point is that the government’s super tax is an attack on aspirational Australians who have worked hard all their life. Hard-working Australians put their money into super – from savings, inheritance and windfalls – to support their retirement. They do so based on assurances on taxation stability … If Labor can’t keep its promise to leave your super alone, any super tax cap will not be set in stone.”
Dutton also set a test for Labor to stick to its promise to deliver the stage three tax cuts in full, warning a backflip “would be an absolute betrayal of Australians’ trust” and “tantamount to economic incompetence”
Dutton took aim at Chalmers’s January essay in which he wrote of wanting to “build a better capitalism” and “reimagining and redesigning markets”, claiming this amounted to an “experiment with the same system of socialism which has devastated nations wherever and whenever it has been implemented”.
On the substance of income tax cuts, Chalmers noted that the July 2024 start date is “a couple of budgets away”. He said “we don’t know what the conditions will be at that time … at some point the Australian economy will shift from inflation to growth” and Labor would weigh up all the factors at the time.
Key events
Adeshola Ore
Victorian premier, Daniel Andrews, has defended his government’s use of taxpayer-funds for polling that investigated the public’s views about the state’s lengthy Covid lockdown.
The Australian has reported that QDOS research undertook regular monitoring of Victorians’ views on Covid measures such as the 8pm curfew and 5km travel limit.
The report is based on documents released by the Department of Premier and Cabinet following a two-year freedom of information battle. The documents reveal that QDOS reveal was also probing public perception of Andrews’ leadership.
Speaking to reporters on Wednesday, Andrews said being popular during the pandemic was “absolutely unimportant”:
When you’ve got a very difficult message to send and a very difficult story to tell and you want people to comply with rules that are deeply unpopular, deeply disruptive, then you need to test and make sure you’ve got your messaging right. Nothing more or nothing less.
‘I’m not … suggesting that women should raid their super funds’: Ley on proposal to allow women to buy homes with super
The ABC Radio AM host Sabra Lane also asked Sussan Ley about superannuation:
Lane:
Let’s turn to superannuation. A fortnight ago, you were talking up a possible expansion of Coalition policy to allow women to access their super to buy a house saying it had helped secure their financial independence. Have you convinced your colleagues to back that policy?
Ley:
If you heard Peter Dutton in the budget reply last year, we talked about backing in our first homeowner superannuation scheme, which actually allows people to use their super to buy the asset that will appreciate the most in their lifetimes.
When it comes to super, Sabra, we’re focused on supporting the choices of women, not making their choices for them.
Now, a sensible extension of this would be to allow women who need to buy their own home access to their super. At the moment as it stands, you might, for example, be a 58-year-old woman who has had marriage breakup or domestic violence. Only when the situation is extremely desperate, only then can you get your super; by then it is too late.
Lane:
So sorry, just on the question of your colleagues, are your colleagues supporting an expansion of that policy? And new research actually points out today that women will retire with $136,000 less than men. Won’t this idea just further diminish women’s retirement balances and push up the cost of housing?
Ley:
If you buy your house early, and you don’t withdraw all of your super you actually build your overall assets over your lifetime.
I have to be clear on this, Sabra: I’m not asking women or suggesting that women should raid their super funds to fund their own crisis management in an emergency, or to not actually have super there for retirement.
That statistic that you gave me then, that worries me. It worries me that women don’t have enough superannuation as they retire.
But you know, today’s not the day to finalise our policy. The statement I make is a values statement; women need financial independence.
Lane: So your colleagues aren’t on board yet?
Ley:
Oh, we will develop policy as we go forward as we will in a range of areas, and we’ve already developed policy for women. One was the ability to let older women use their pension bonus to spend more hours working, if they choose, and not be financially penalised.
That’s an important thing that Peter Dutton announced soon after we came into opposition and when I travel through small businesses in Australia, they really respond positively to it.
Sussan Ley says Liberals no closer to supporting no campaign in voice debate
The Coalition isn’t supporting the Referendum Machinery Act changes – it wants changes to the funding that the government doesn’t want to make.
Sussan Ley was asked this morning on ABC radio AM if that meant the Liberals were closer to supporting no in the actual referendum:
It’s not a sign of that. We need the detail that we’ve continually asked for and every day we hear more confusion from the government, so many different positions, particularly on whether the voice would have a role to the executive of government or to the parliament.
Very early on when we saw the desperation in Alice Springs one member of the government said the voice would fix that; another member, the prime minister, said it probably wouldn’t.
When I travel, as I do around the country, and I spent a week in Western Australia recently, people are actually asking me, how will it work in practice? And I’m unable to actually answer them.
The Greens’ new First Nations spokeswoman Dorinda Cox – I note that she said she was surprised Labor didn’t try to legislate the voice to give the model time to evolve and be tested and then take it to the Australian people with a referendum. Now that’s just a sensible idea.
Paul Karp
‘Moral and financial black hole’: ASRC director criticises Labor and Coalition’s voting down of evacuation to safety bill
Jana Favero, the director of advocacy at the Asylum Seeker Resource Centre, has taken aim at Labor and the Coalition for voting down the Greens’ evacuation to safety bill.
Favero told Guardian Australia:
It’s disappointing but not unexpected. It was really telling what wasn’t said – I sat through all of those speeches – I didn’t hear a clear argument from either major party why vote against the bill. They were relying on fear and division again.
The Greens and David Pocock both spoke about people affected. Neither major party referenced the refugees impacted by the bill, nor did the Senate inquiry report. Thirteen pages – not one mention of the case studies. It shows it’s a political football, to make the people invisible to suit the political agenda … It’s disgraceful bipartisanship to play politics with people’s lives.
It’s ironic, on the same day UK is passing a law to set up offshore processing, that the Australian parliament considering a bill to urgently evacuate 150 people from offshore detention, recognising the harm it’s caused. It’s a moral and financial black hole and a policy failure.
Caitlin Cassidy
Deakin University to become first foreign tertiary institution with campus in India
Australia’s peak university body has welcomed the news Deakin University will be the first foreign university to establish a Gift campus in India.
The $4m campus will be announced on an official prime ministerial visit to India this week.
Universities Australia chief executive Catriona Jackson is accompanying Anthony Albanese on the trip alongside vice-chancellor of Deakin university, Prof Iain Martin, and vice-chancellor of University of Melbourne, Prof Duncan Maskell.
Jackson said increased research collaboration would also be on the table as the Australia-India bilateral relationship moved ahead in “leaps and bounds”.
India’s goal of educating 500 million students by 2035 is nation-changing, and our universities are here to help. Another exciting development comes with the news that Australian universities are opening campuses in India. This will support India’s hugely ambitious education reforms.
On the evacuation to safety bill:
Chalmers derides Dutton’s ‘hyperventilating hyperbole’ over super changes
Paul Karp
The treasurer, Jim Chalmers, has hit back at the opposition leader, Peter Dutton, for suggesting Labor is running a socialist agenda.
Chalmers told Radio National:
He’s getting more and more ridiculous every day. We’ve finally found someone more negative than Tony Abbott, more divisive than Scott Morrison, and more ridiculous with every passing day. He is the poster child for the sort of politics Australians rejected in May, and he seems to have learned nothing from that. These ridiculous scare campaigns, and this hyperventilating hyperbole every day [show he has] learned nothing from the last wasted decade of needless conflict.
Earlier, Dutton claimed that Labor’s super tax changes will “disincentivise young Australians from putting their money into super”.
He told the Australian Financial Review conference:
The government is beating the drums of class war. Whether you’ve got $30,000 dollars, $300,000 dollars or $3 million in your super fund is not the point. The point is that the government’s super tax is an attack on aspirational Australians who have worked hard all their life. Hard-working Australians put their money into super – from savings, inheritance and windfalls – to support their retirement. They do so based on assurances on taxation stability … If Labor can’t keep its promise to leave your super alone, any super tax cap will not be set in stone.”
Dutton also set a test for Labor to stick to its promise to deliver the stage three tax cuts in full, warning a backflip “would be an absolute betrayal of Australians’ trust” and “tantamount to economic incompetence”
Dutton took aim at Chalmers’s January essay in which he wrote of wanting to “build a better capitalism” and “reimagining and redesigning markets”, claiming this amounted to an “experiment with the same system of socialism which has devastated nations wherever and whenever it has been implemented”.
On the substance of income tax cuts, Chalmers noted that the July 2024 start date is “a couple of budgets away”. He said “we don’t know what the conditions will be at that time … at some point the Australian economy will shift from inflation to growth” and Labor would weigh up all the factors at the time.
What level of unemployment is acceptable to the Reserve Bank?
Lowe:
I don’t want to kind of put a figure on it. Our forecasts that we released a month ago have the unemployment rate rising to 4.5% or maybe a bit above that.
That’s a percentage point above where it is now.
Before the pandemic we were above 5%.
And we wondered whether we could get in a sustainable way below 5. I think it’s possible – there’s still a lot of uncertainty – I think it’s possible we can sustain an unemployment rate below 5% in Australia. I certainly hope so. And if we can travel that narrow path we’ll do that. We want to minimise the rise in unemployment.
But acknowledge that slower growth does mean higher unemployment.
But if we can stay on that narrow path we can keep it below 5%.
What about the top end of town? Is Philip Lowe changing how he spends? Sending a message to the other 1% to do the same?
Lowe:
I’m just one person in 26 million. So, my personal circumstances, aren’t going to affect the aggregate, are they?
It’s difficult because monetary policy is falling unevenly across the community and the people who have been most affected are people who have borrowed in recent times and having to pay a higher mortgage payment.
So that’s where the effect is being most felt.
But, higher interest rates have diffused [inflationary] effects. If we didn’t raise rates, the change rates would be much lower.
If you shop around, and please shop around for deposits, you can [receive up to the high] fours on your savings.
So shop around, that increases the incentive to save. And housing prices have fallen, partly because of higher interest rates, and at least for some people the lower wealth they feel as a result of lower housing prices mean they spend less.
There’s diffuse transmission channels but the most direct one is on higher mortgage payments. I know it’s tough.
RBA governor meeting with Suicide Prevention and Lifeline next month
How much attention does Philip Lowe and the board pay to messages from people in financial distress, especially in light of the head of Suicide Prevention Australia asking for a meeting?
Lowe:
That’s a difficult message, it is, but it’s the truth. If inflation stays high, we know it will lead to higher interest rates, people losing jobs, and more pain. That’s the reality we face.
It’s an uncomfortable reality but that’s the reality and it’s a very difficult message for people to hear.
At yesterday’s board meeting I went through with the board the mail I’ve been receiving and the – we discussed in quite a lot of detail the difficulties that many people are facing, who borrowed in recent times and are facing big increases in mortgages.
People write to me about how it’s affecting their families and mental health.
In the next month I’m meeting with Suicide Prevention and Lifeline so we’re very alert to that. It weighs heavily on my heart and the hearts of the board members.
But, at the same time, we know if we don’t get on top of inflation [it will mean] higher interest rates, more unemployment, more pain. We think we can navigate this narrow path and bring inflation down.
If we don’t get inflation down, we’ll be in all sorts of trouble. So that’s – it’s a difficult message at an individual level, and, it weighs on us a lot. I read the many letters and often I respond to them.
But it’s interesting, we’ve been receiving letters recently saying, since the first time I’ve been the governor, thank you for preserving the value of money. There are parts of the community who know how damaging inflation is. It’s a difficult time.
Lowe: More data changes meant changes to language on future rate rises
Why was the RBA’s language on possible future rate rises so different from February to March?
Phil Lowe:
This month was kind of a bumper month for data. For the first time ever we had the national accounts, inflation, wages, and the labour force all in one month.
Those data, on balance were a bit softer than we had expected. And it’s appropriate we modify our language as the data changes. We’re very much in a data-dependent world and when the data changes, we’re going to change the language.
But the underlying message has been the same. Inflation is too high, we need to keep raising rates and we will. When and how much remains to be determined.
What could the RBA governor be doing better?
He thinks “I could be communicating better” and that many people would probably think that.
Lowe:
I will be looking forward to their advice on how to do that better. I think the forward guidance we gave in the pandemic has come with costs, hasn’t it?
So, how we communicate with the market, that’s the main thing I would be looking for and there are a range offer issues. I know the review committee is looking at those, but perhaps at a future event we can talk about
Unemployment rate plays balancing role with inflation
The bit there about keeping unemployment below 5% is because a certain level of unemployment is built into the infrastructure to combat inflation.
It’s called the Non-Accelerating Inflation Rate of Unemployment (the Nairu) and it’s “the lowest unemployment rate that can be sustained without causing wages growth and inflation to rise”.
So a certain level of the working population being unemployed is part of the plan. Which is just one of many, many reasons why the jobseeker rate needs to be raised. The economy relies on some people not working to combat inflation. They are taking one for team Australia, so they should be treated better.
RBA governor: We want inflation back to 3% by mid-2025 – any earlier means giving up jobs
The forecasts say inflation should get back to the RBA’s target range by mid-2025. Is that what the RBA governor thinks?
Lowe:
If inflation comes back to 3% by mid-’25, and we can keep the unemployment below 5%, that will be a fantastic outcome, won’t it? We discussed the case for being even more aggressive with from rates and trying to get inflation back to 3% before the end of ‘25.
It will be possible to do that, but it would come at the cost of forgoing many of the labour force gains, and our judgment at the moment is that the benefit we would get from getting inflation back to 3% six months earlier at the cost of a lot of job losses isn’t worth it. But I agree we want inflation back to 3% by ‘25.
Extending it beyond that is too long. To get it back more quickly, we give up jobs. I don’t think it’s worth it.
Dr Philip Lowe is taking some questions this morning.
Does he think the US Fed inflation warning is something Australia needs to worry about?
Lowe:
Well, we are closer to a pause … it’s a matter of logic. As you increase interest rates higher, you get closer to the point where it is appropriate to stop for a while and assess the flow of data.
We’ve done a lot in a short period and at some point it will be appropriate to sit still and assess the effects of that.
Before the next board meeting we will have important data on employment, we’ll have another monthly inflation indicator, we will have more data on retail spending and the business survey.
They are important pieces of data that we can look at before the next board rating. If collectively they suggest the right thing is to pause we will do that, but if they suggest we need to keep going, then we will do that.
We have an open mind about what happens at the next board meeting.
Peter Hannam
Philip Lowe says pause in rate rises is ‘closer’ after 10th straight increase
For those unable to access RBA governor Philip Lowe’s live speech (the webcast via the bank’s own site seems to be on the fritz), the key parts are also in this article we’ve just published:
As you can see, the RBA is poised to pause rate rises – we’re not quite sure when, and nor is he.
Lowe has highlighted that the rate rises already in the works (including yesterday’s) will lift mortgage payments to a record 9.5% share of household disposable income later this year. Housing values, meanwhile, were also declining but it was “difficult to determine the effect of this on spending as there had earlier been a large run-up in prices”, he said.
It’s notable that Lowe now refers to a prices-wages spiral rather than a wages-prices spiral, since we haven’t seen wages rise much at all. Price rises are the prompt, not the other way around, as the ACTU and others have been arguing for months (if not longer).
The data so far “suggest that the risk of a prices-wages spiral remains low,” Lowe said. “This is helpful as we navigate that narrow path and it means that Australia is in a better position than some other countries.”
By this, he particularly means the US, where wages have risen much faster. (They typically don’t have multi-year wage agreements and also had many more people as a share of the labour market affected by Covid, some fatally.)
“Notwithstanding this, we remain alert to the risks here given the combination of a tight labour market, the high level of capacity utilisation and the run of high inflation numbers,” he said. “If this risk did materialise, the costs would be very high.”
While a pause might be closer, the RBA would remain vigilant.
“Given these uncertainties, the board is monitoring the data very carefully month to month,” Lowe said. “It has the flexibility to respond as needed.”
Stats to watch for include jobs numbers on 16 March, which may show the labour market remains very tight.
Also to watch for will be the February consumer prices index due out on 29 March. We may see then whether inflation has peaked and continues to decline.
Peter Dutton accuses government of ‘beating the drums of class war’ over super
Peter Dutton delivered his speech to the AFR Business Summit in Sydney this morning.
The Fin had a preview (as you would expect) and for those who haven’t seen it, it included:
The government is beating the drums of class war.
Whether you’ve got $30,000 dollars, $300,000 dollars or $3 million in your super fund is not the point.
The point is that the government’s super tax is an attack on aspirational Australians who have worked hard all their life.
Hardworking Australians put their money into super – from savings, inheritance and windfalls – to support their retirement.
They do so based on assurances on taxation stability.
(I mean, there is a slight difference between having $30,000, $300,000 and $3m in your super account, but I say that as someone with below the average $150,000 in mine.)
And at the same time as criticising the government for not doing enough to help people with the rising cost of loving, Dutton has also accused the government of being “socialist”*.
This government wants to experiment with the same system of socialism which has devastated nations wherever and whenever it has been implemented.
Ignoring the lessons of history, Labor arrogantly thinks it can succeed where others have failed.
Without an economic plan – but with an ideological agenda – Labor is steering our nation towards a dark place.
*Which, lol. Actual lol.
Community detention for asylum seekers under consideration in Senate
The parliament sitting has commenced – in the house, it is all about the Financial Accountability regime legislation, while in the Senate is Nick McKim’s Migration “evacuation to safety” amendment.
That second one would “compel the government to offer transfer to Australia to all persons subject to offshore processing still in PNG or Nauru who are not subject to an adverse security assessment by the Australian Security Intelligence Organisation (ASIO) under the Australian Security Intelligence Organisation Act 1979”.
Persons accepting the Government’s offer will be transferred to Australia where they will remain until they are provided with a durable third-country solution with a state party to the United Nations’ 1951 Convention Relating to the Status of Refugees or the 1967 Protocol relating to the Status of Refugees.
All persons accepting the Government’s offer will automatically be placed into community detention.
This Bill will compel the Government to make offers of transfer to all eligible persons within one month of the commencement of the Bill.
Sarah Collard
The minister for Indigenous Australians, Linda Burney, has responded and said it’s extremely disappointing that the data seems to be showing that some of the Closing the Gap targets are moving in the wrong direction.
More of the same isn’t good enough. We need to do things differently by working in partnership with communities to get better results.
Burney and assistant minister, Malarndirri McCarthy are urging all governments to “redouble their efforts” to improve the outcomes for Indigenous peoples across all these areas.
Closing the Gap between Aboriginal and Torres Strait Islander Australians and the wider Australian community is a top priority for the Albanese Labor Government. The gap is not closing fast enough. I know many people are frustrated by the lack of progress.
It is particularly disappointing to see the target for healthy birthweights for babies has gone from being ‘on track’ to ‘not on track’,”
The media release discusses what funds they have committed to addressing these issues with more than $400m being slated to close the gap including improving access to safe and clean water to communities who currently don’t have access to clean drinking water, new funding for remote housing, and tackling food insecurity.
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