Tony Abbott: pragmatic but don’t expect to see a U-turn

TWO urgent steps are needed in the essential repair job facing the Abbott government: the Prime Minister and Treasurer need to rethink their presentation of the budget and begin to prepare the next stage of their reform agenda.

The strength of the government’s position is that Australia, now living beyond its means, does face the need for substantial reform on both the spending and revenue sides of the budget with the inescapable reality of significant public hardship.

Community denial of this situation may be fading faster than the coalition of obstruction, Labor-Greens-Palmer, realises. But this will not assist Tony Abbott unless he can re-position his government and his message.

At stake is Abbott’s persona as a Prime Minister able to mobilise the battler vote to undermine Labor at the 2013 election. Labor’s branding of the budget as unfair is about far more than the budget — the aim is to ruin Abbott’s profile given that he will never be a truly popular PM.

“I am very proud of the budget,” Abbott said yesterday. But the test is not Abbott’s pride. It is about political viability and that means his ability to listen and adapt. Abbott and Joe Hockey need a circuit-breaker and there is broad agreement about how it begins — radical surgery on Abbott’s paid parental leave scheme to prove the government has listened and acted.

For Abbott, however, there is no U-turn. He will make concessions along the road, on PPL and on section 18c of the Racial Discrimination Act. But Abbott’s strategy is to operate from strength as a budget restoration and national security guardian PM. These are his foundation stones in office. His intent is to stay the course with some pragmatic adaptations.

There will be no lurch into a mini-budget, no panic into changing his Treasurer, no hastening into a ministry reshuffle or abandoning his budget repair objectives. The gulf between Abbott and the political commentary industry, as usual, remains huge.

Abbott understands that panic destroyed the former Labor government. The idea that Abbott might ditch Hockey is a fantasy: it would send the Liberal Party into a tailspin that would finish the government.

Abbott, Hockey and Finance Minister, Mathias Cormann, met 10 days ago to review the budget position. The message is negotiate, negotiate, negotiate. The problem is that some of the new crossbenchers are so raw they don’t know what they want.

Ultimately, however, Abbott and Hockey must turn Senate rejection of many budget measures into a plus; at this point they need to initiate a new debate with fresh proposals, tough but fairer, as part of their budget restoration quest. That must involve revenue measures that hit the big end of town.

But the bottom line remains — the fiscal problem is a Labor legacy and Senate obstruction risks both a deteriorating budget and threatens investor confidence. Abbott believes the public will eventually accept the fiscal reality.

At the same time Abbott’s profile as national security guardian will remain high. Abbott believes US President Barack Obama may yet deploy ground forces into Iraq and, if so, Australia, probably the SAS, will be involved. There will be no independent Australian presence.

But if our allies commit then Australia will commit. It is the Abbott Doctrine. His message is that such an event would constitute humanitarian protection and have no parallel with the 2003 allied invasion to remove Saddam Hussein.

A few weeks ago Abbott was ready to send 1000 Australian troops into Ukraine. Detailed plans had been drawn up for a joint Dutch-Australia troop deployment. Abbott was deadly serious, but abandoned this option when it became unnecessary.

Abbott is determined to legislate new national security laws. He takes advice from the intelligence agencies at face value and with deep seriousness. Given the genuine concern about a domestic terrorist attack on Australian soil Abbott believes any prime minister who had advice to act and declined to act or backed down under pressure would be culpable of betraying his responsibility to protect the public. Such a failure would be graphically exposed and documented by an inquiry after any such attack.

ASIO Director-General David Irvine recently said Australians were involved in Iraq and Syria in unprecedented numbers mixing with “the worst of the worst”. This constitutes a new and fundamental security issue.

Past planning for mass casualty attacks in Australia has been foiled. But many Australians, Irvine says, have chosen allegiance with the most extreme groups drawn by the combination of violent ideology and nihilistic intent. They are involved in recruitment of others and spreading of panic.

While Abbott’s office runs too centralised an operation, Abbott’s instinct is to support his ministers and forgive mistakes. Contrary to reports, he has no intention of removing David Johnston as Defence Minister and, not surprisingly, believes Julie Bishop has been superb as Foreign Minister in the recent crisis.

Abbott sees Communications Minister Malcolm Turnbull as one of the government’s most effective ministers but is unmoved by the torrent of media criticism that Turnbull should have been involved in the cabinet National Security Committee decision on metadata. The laws being discussed were the responsibility of the Attorney-General, not the Communications Minister.

Hockey’s blunder this week when defending indexation of petrol excise, saying “the poorest people either don’t have cars or actually don’t drive very far in many cases”, reduces our budget debate to even deeper tragic farce. Hockey was silly and insensitive.

There are two ways of looking at this: families in the top 20 per cent pay three times as much for petrol as families in the bottom 20 per cent yet poorer families pay a higher proportion of their income on petrol than better-off families. Consider, however, that in the current year indexation will add an estimated 1c a litre to the cost of petrol. That’s what this row is about.

Indexation would merely restore the status quo existing before John Howard’s abolition decision. Given that the nation has this tax, it is sensible to have it indexed. It is an efficient tax. Indexation raises significant revenue (up to $990 million by 2017-18). It has an environmental dividend. Given the budget position, the argument for indexation is persuasive.

This week Hockey’s poor language became the issue, not the measure’s merit. Labor and the Greens are playing cynical politics in rejecting this measure. That is widely recognised.

The idea that no single budget measure can be accepted unless it is progressive in its own right is ludicrous. That is no way to run a country or conduct public policy.

The truth is that Australia has pretty much the most progressive tax-transfer system in the OECD. It is widely recognised through means testing as the most targeted social security system; it is also recognised as having one of the most progressive tax systems in the OECD.

The upshot: Australia re-distributes more to the bottom 25 per cent than virtually any other industrialised nation. In Australia the bottom 60 per cent of households are net winners from the welfare state with the top 40 per cent of households the net contributors. This has been hardly mentioned during the recent hysteria that the nation’s social compact is being destroyed. The claim is nonsense.

Is the budget unfair? Yes, every analysis shows that. The problem is not so much individual measures but collective impact. For Abbott and Hockey, this is a policy and presentation problem.

Howard’s recent advice is pertinent. Howard says the public will accept tough budget measures provided two conditions are met: they must seem justified (that is, the problem is real) and they must seem to be fair.

Abbott and Hockey failed both steps at the outset. Across time, however, the public is starting to realise the budget needs serious repair. This begins to meet Howard’s first condition. But his second condition is not met.

“Once you decide to cut a deficit by action on the spending side you end up imposing a greater burden on low-income households because that’s where a lot of the money goes,” Bank of America Merrill Lynch economist Saul Eslake said yesterday.

The logic is inescapable. When Abbott and Hockey regroup with a final budget containing a large black hole they will face two tasks. They will recommit to budget repair but they will need a new basket of measures to do the job. That means putting negative gearing and superannuation tax breaks for high-income earners on the table

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NSW minister Dominic Perrottet endorses Uber and Airbnb

A senior NSW cabinet minister has endorsed ride-sharing service Uber and home-sharing app Airbnb by saying "governments should not stand in the way" of them despite both services being under scrutiny by his government.

NSW Minister for Finance and Services Dominic Perrottet said in a speech on Thursday night at Sydney's Intersect showcase that the apps – part of what he called the "collaboration economy" – were a good thing for society.

My view is that governments should not stand in the way of this change but seek to facilitate it.

NSW Minister for Finance and Services Dominic Perrottet
"As someone on the Liberal side of politics, we should welcome the sharing economy as something profoundly conservative," Mr Perrottet said.

He's even asked the Office of Finances and Services to consider using a car-pooling scheme for government employees using such apps and services, because he said they could help "drive savings".

"This is the free market on steroids. It's individuals, or businesses, seeking to make the best use of their existing assets, for a profit. It's being an entrepreneur at a grassroots level. It's a mix of technology, trust and low-cost options to effectively meet demand – and it's all done without government intervention."

The sharing economy was "here to stay", he added.

"The more people move online and take up social, mobile and reputational platforms, the more this is going to grow. It's an efficient use of resources and the uptake so far already shows that the market has spoken. My view is that governments should not stand in the way of this change but seek to facilitate it."

Mr Perrottet's comments came after NSW Roads and Maritime Services began cracking down on Uber by issuing fines to drivers. The City of Sydney has also warned residents they risked fines by sharing or renting out their home for money on Airbnb without approval.

On Friday, Roads and Maritime Services confirmed it was continuing enforcement action for drivers who are found to be breaching the Passenger Transport Act 1990.

"Fines already issued have been paid," a Roads and Maritime Services spokesperson said.

It is understood Mr Perrottet is making his views known to cabinet colleagues, including Transport Minister Gladys Berejiklian.

Mr Perrottet said it was no surprise that "most left-wing jurisdictions like New York" cracked down on sharing economy companies. He did not mention the NSW government was cracking down on them too.

"This is because they are stuck in the old world of heavy regulation, union dominance, high fees, high taxes and inflated prices that please no one but those at the top who reap a profit," Mr Perrottet said of New York and other governments that had not embraced the new services.

"The sharing economy presents an opportunity for conservatives, if they are savvy enough to see it."

Mr Perrottet also noted and welcomed news the Western Australia Liberals passed a motion to consider the regulations surrounding companies like Uber last weekend.

Despite endorsing the apps, he said they should still be regulated.

"Some have argued that governments should play no role in regulating these new app businesses," he said.

"I disagree. I think we very much have a role in ensuring that the public are safe and things like health and safety are considered.

"These are paramount. Even the freest of markets requires some regulation to function."

The question for government should not be "should you regulate", he said, but "with what mindset do you regulate?"

"Do you regulate to stifle innovation? Or do you regulate to ensure certain basic principles like safety are met – and let the free market take care of the rest?"

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Antisemitic abuse demands our leaders' condemnation

 Antisemitic attacks are on the increase in Australia. Conflict in Gaza as well as the rise of the vicious Islamic State have inflamed racial tensions here.

But the nostrums of political correctness and a fear of causing offence to certain privileged minority groups are making our leaders reluctant to speak out.

Now six Sydney schoolboys stand accused of chanting antisemitic abuse and threatening violent assault on a bus carrying Jewish school children.

Protests in support of BDS sanctions against Israeli businesses such as Max Brenner have normalised the idea that targeting Jewish groups is acceptable.

All six of the bus thugs come from prominent Eastern Suburbs schools. But so far, Education Minister Adrian Piccoli and staff in his department have said nothing.

Local police commander Jason Box thinks the racist attack was isolated and random, and thinks the disgraceful behaviour was really fuelled by alcohol.

Minister for Citizenship and Communities, Victor Dominello, says that all racial intimidation is deplorable. But few other senior state politicians have spoken out.

Even Premier Mike Baird has remained silent. The best the NSW Government was able to do was refer the incident to the State Transit Authority.

But an antisemitic attack on a bus is no more a transport matter than it would be a sporting matter had it occurred in the grandstand of a Saturday morning football game.

Deputy Premier Andrew Stoner has rightly condemned this behaviour as having no place in a harmonious, multicultural country such as Australia. But it is here.

A past President of the NSW Jewish Board of Deputies tells me this is the worst antisemitism he has seen here in more than 30 years of community leadership.

Placards at recent rallies in support of Israel called for peace and an end to the rockets. Those in support of Hamas bore images of a Jew drinking a child's blood.

The Scanlon Foundation's most recent Mapping Social Cohesion report shows that the vast majority of Australians support multiculturalism.

But true respect for multicultural diversity demands that we must work much harder to secure the safety and well-being of all ethnic groups in Australia.

Antisemitism is a scourge fuelled by bigotry, malice and hatred. All political leaders must condemn it unequivocally if their pursuit of tolerance is sincere.

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NSW government gets it right on reading instruction

The best way to improve the quality of school education is to ensure that there is a good, if not great, teacher in every classroom every day. This is achieved by selecting the best candidates and educating them well. It sounds like an obvious strategy, but submissions to the federal government's review of teacher education argue that this is not par for the course in teacher education.

There is a growing consensus that entry standards for teacher education courses at university are often too low and must be elevated, based on consistent evidence that teacher quality is highly correlated with the teacher's own academic ability. But there is also the question of how well teacher education courses prepare prospective teachers for the classroom.

One of the most important responsibilities of primary school teachers, in particular, is to teach children to read. Obviously the home literacy environment provided by parents also plays a role, but the first two years of school are critical in a child's reading development.

The best evidence from methodologically rigorous, well-designed studies on literacy development shows that early reading instruction must have five key elements: phonemic awareness, phonics, fluency, vocabulary and comprehension. Research also shows that explicit and systematic instruction is more effective than teaching strategies that assume children will acquire these skills naturally, just by memorising words and being read to. Unfortunately, not all primary teacher education courses provide sufficient training and education on the essential elements of reading or the most effective pedagogies to teach them.

Phonemic awareness and phonics instruction, in which children learn that speech and language is made up of distinct sounds, and that these sounds correspond with the print on the page, are often the least well understood by teachers and therefore the least well taught. It is very difficult for teachers to teach what they do not know.

The NSW government has acknowledged that this is a problem and has moved to ensure that all teachers have the knowledge and skills to teach phonics effectively, by pushing universities to include phonics in teacher education courses and providing professional development to teachers. This is a landmark policy and, if implemented well, one which has the potential to have a significant impact on literacy achievement.

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