20 April 2019

Labor has complained to Facebook about a “fake news” campaign, demanding the posts be removed. The posts are obvious fakes, because they accuse Labor of having the guts to introduce a good policy — an inheritance tax. As Danielle Wood explained late last year, “Taxing inheritances makes a lot of sense from both an economic and fairness perspective. Taxes on inheritances drag on the economy less than other taxes, such as income taxes. Inheritances taxes also promote what economists call ‘horizontal equity’ — ensuring that people in similar economic circumstances pay similar amounts of tax. People without well-off parents are entitled to feel miffed that they are taxed on their income from working while others can derive a similar sum from an inheritance and pay no tax whatsoever. Australia is an outlier among developed countries in not taxing inheritances.” Even the rate referred to in the fake ads is far from radical; it would match the rate of inheritance tax in the UK, which remains at the same 40% as when it was introduced by the Communist prime minister Margaret Thatcher. The sooner Labor stops sucking up to the Anthony Pratts of the world, the better off we would all be.

19 April 2019

The so-called Fair Work Commission’s decision to cut public holiday pay rates for some of Australia’s lowest paid workers will bite particularly hard over the next fortnight. According to analysis by the Centre for Future Work: “The unique concentration of public holidays within the 10 days starting on Good Friday (amounting to a total of 6 holidays or Sundays in most states) dramatically highlights the scale of those losses. Over that 10-day period, we estimate that wages will be $80 million lower than if penalty rates had been maintained.” And because the cuts are still being phased in, by 2020 the loss will be $107 million over ten days. At the same time, the economic benefits bosses promised have not materialised: “hiring in sectors where penalty rates were not reduced has been five times faster since July 2017 than in the retail and hospitality sectors (where penalty rates were cut)”. Elsewhere, we learn: “New research from the University of Wollongong measured Sunday shifts worked before and after the penalty rate cuts in July last year; … the rate has now slumped to below 2017 figures.” Lower wages and less work.

Dominic Kelly’s Political Troglodytes and Economic Lunatics is an excellent history of the web of single-issue interest groups that drove a significant rightward shift in Australian politics, especially in the years of the Howard Government. They were: “On industrial relations, the HR Nicholls Society wanted to topple the arbitration system, abolish the minimum wage and strip trade unions of their legal privileges. On constitutional issues, the Samuel Griffith Society wanted a renewed federalism, and fought passionately against the Mabo judgment and the proposed Australian republic. On Indigenous affairs, the Bennelong Society opposed land rights and reconciliation, and argued for a return to the assimilation policies of the mid-20th century. On climate change, the Lavoisier Group joined with denialists around the world in discouraging governments from taking meaningful action.” Kelly meticulously and neutrally describes their views, methods, and influence. Their shared model — a tight ideological focus, clubbish culture, emphasis on shifting elite opinion, and use of dinner speeches and opinion columns to furnish conservative MPs with talking points — was remarkably successful across a number of policy areas, and understanding the current state of politics is not possible without appreciating how these groups operated.

17 April 2019

Australia’s track record of abusing Timor-Leste [$] in order to steal oil revenues from the Timorese people is long and ongoing — endorsing Indonesia’s brutal occupationbullying the fledgling Timorese government after independence, spying on the Timorese government on behalf of an oil company[$], prosecuting a whistleblower and their lawyer in a secret trial, and now, failing to ratify a treaty more than a year after signing it: “The delay has meant that Australia continues to draw profits from the Bayu-Undan fields, which had previously been split 90-10 but was confirmed by the treaty to have belonged entirely to Timor-Leste. Estimates vary between $350,000 and $2.9m per week that Australia is drawing by continuing to claim 10% of the Bayu-Undan revenue.” The Timorese economy is almost entirely dependent on oil revenues, and its government is desperately trying to diversify before the money runs out. By continuing to steal from our neighbours, we are dooming them to future poverty. Not only should Australia immediately return the post-treaty Bayu-Undan oil revenues to Timor-Leste, we should also make reparation for the oil we stole by collaborating with the Indonesians for decades.

16 April 2019

Nathan J Robinson: “One of the most important aspects of leftist thought is its insight that ‘power’ is more than just the government putting people in jail. Power relationships are everywhere… And you can make people freer in lots of different ways. If you have strong laws protecting political speech, then while an employer is less free to discipline people for what they do outside of work, the employees are freer to speak their minds. If you are free to easily unionize, then workers have the power to collectively withhold their labor if there are managers who abuse their power. If being a single mother wasn’t such a financially terrifying prospect, because we had a more generous welfare state that made it easy to raise children, the idea of leaving a bad marriage or relationship wouldn’t be quite as difficult to contemplate. If healthcare is provided free at the point of use, and funded through progressive taxation, then people are freer to go about their lives without having to worry about whether they can afford to get sick. … Having fairer and more equal society is not in tension with having a free society. It is a free society.”

Gay Alcorn has written a detailed and thoughtful overview of Australia’s awful policy response to unemployment and poverty. Low rates of welfare payments, the marketisation of support, invasive and punitive behaviour controls, and vicious dehumanising rhetoric. Jacqui Phillips of ACOSS says, “What we’ve got now is a toxic trifecta, of the lowest unemployment payment in the OECD among some of the harshest conditions in the OECD and one of the least resourced employment system systems, half the OECD average of funding. It’s a nasty combination of policies.” Elsewhere in the Guardian, Greg Jericho uses graphs to highlight how bad Australia performs — and he makes this shocking observation: “A comparison with the OECD nations also shows that our tax and transfer system is not as effective as is others. Prior to the redistribution of taxes and transfers we have the 11th lowest rate of poverty; after taxes and transfers, however, we fall to 19th.” This ought to be a national disgrace.

15 April 2019

The Prosper Australia Research Institute analyses Melbourne water usage data to identify properties where so little water is used that it is likely the property is vacant. They use this to estimate the number of residential properties that are being hoarded by investors, rather than being used as homes. This year’s Speculative Vacancies report found that “Absolute vacancies using zero litres of water revealed 21,326 residential properties at 4.6% of the total rental market. The short term vacancy rate of 3.3% (SQM Research) could equate to 7.8% of investment properties if absolute vacancies were added. Up to 16.2% of investor owned rental properties were potentially vacant.” If we want houses to be used as homes instead of speculative commodities, we need to make it more expensive to keep them vacant. Prosper argues that a “reformed State Land Value Tax (SLVT) must be broadened to replace Stamp Duties. This is a more holistic technique to discourage vacancy that actively counters the market power land bankers enjoy. Such a policy switch will signal that both lazy land use and property flipping are no longer valid market activities.”

10 April 2019

Over 150,000 people marched in Melbourne today, in support of the Change the Rules campaign. (I was there with my hand-drawn anti-wage theft placard…) The key issues were wage growth, job security — and an immediate federal election. Olisa Heard, a cleaner, told the crowd, “The contractors treat us like dirt because this government don’t care for us lowly-paid workers, this government were the ones who dissolved our weekend penalty rates. If we get a pay increase with one company they lose the contract to a cheaper company because whoever bids the lower tender gets the contract … so our wages don’t go up.” One of the core Change the Rules demands is that workers should be able to bargain where the real power is — with the head contractor, host company, or on an industry basis. When Morrison eventually calls the election, think about workers like Olisa when you decide where to direct your vote.

Activists in Berlin have a plan to deal with “rent sharks” who hoard vast property holdings and squeeze tenants for higher rent: “Activists have started collecting signatures for a ballot proposal that would require the city to take back properties from any landlord that owns more than 3,000 apartments. Polls suggest such a measure could pass, forcing the city to consider spending billions of euros buying privatized housing back.” Is this where Melbourne will be after the Andrews Government privautises public housing?

“If you’d told me a few years ago that a conservative government would criminalise wage theft, I would not have believed it,” writes Professor Anthony Forsyth. “That’s how far the dial has shifted.” However, he argues the recommendations of the Migrant Worker Taskforce (adopted by the government) are weak on labour hire operators: “the worrying term in the taskforce’s recommendation for national labour hire registration is ‘light touch’.” He says we need a “robust type of enforcement agency, with investigatory powers to enforce licensing standards… We need a ‘zero tolerance’ approach to effectively combat worker exploitation”. The experience of the light-touch Fair Work Ombudsman, which has allowed wage theft to become a widespread and deeply entrenched business model, suggests he is right.