Australian Politics

If the supply of goods and services remains largely static, putting more money into people's pockets MUST fuel inflation

Cooking the books via electricity bills will not alter that

The most surprising thing about last week’s Australian Bureau of Statistics inflation figures was not that annual CPI had fallen back under 3 per cent – a huge drop from our horror December 2022 number of 8.4 per cent.

And it was not that the Reserve Bank of Australia looks no closer to cutting interest rates despite the US, Europe, Britain, Canada and many other places pushing out rate cuts.

For me, the most surprising factor of the monthly Consumer Price Index Indicator data was the huge impact government handouts have had on official inflation. State based electricity rebates combined with the federal government’s $75 quarterly electricity bill discounts – for everybody – to push electricity prices down 17.9 per cent in the year to August 2024.

When Treasurer Jim Chalmers announced the $300 annual electricity credits in his budget earlier this year, he seemed pleased with himself that the policy would push down official inflation.

And it has. A 17.9 per cent fall in one CPI component will always bring down the overall annual inflation figure.

The big problem is that the Reserve Bank of Australia and economists see right through this government-engineered inflation game.

For starters, RBA governor Michele Bullock and her board don’t focus on the headline inflation figure when deciding to raise or cut interest rates. They use the “trimmed mean” measure of inflation, which ignores volatile items such as energy and is still 3.4 per cent, well above the RBA’s 2-3 per cent target range.

Ms Bullock reiterated last week that the cash rate is the only tool the RBA has to impact inflation. It raises the cash rate to lower CPI by reducing consumer spending and overall demand in the economy, as it has done with 13 rate rises since May 2022.

Conversely, cutting interest rates – which many countries are already doing – aim to support spending and inflation.

And it’s clear that governments cannot try to trick the RBA by lowering inflation artificially. Unless the federal government continues spending billions of bucks annually on recurring electricity bill credits, their removal will eventually send electricity prices higher.

It’s silly to hear the government complaining that it is working to lower inflation pressures when it is clearly pumping extra money into the economy, which fuels demand and inevitably higher inflation.

It’s even sillier to hear the Greens holding the Albanese government to ransom by refusing to support other legislation unless the government forces the independent RBA the cut rates. To quote a former Labor Prime Minister, fair shake of the sauce bottle, mate!

All this government and RBA argy bargy is a sideshow to the real problems facing households: mortgage repayments that have jumped 60-plus per cent in Two-and-a-half years, surging rents and other living costs, and expensive loans and other bills that have smashed business owners.

The good news for borrowers is that rate cuts are coming, albeit not as fast as in the US and elsewhere, where inflation is much lower than it is in Australia.

Most economists believe RBA rate cuts should start in the first few months of 2025, with several pencilled in for next year. Just like we imported higher inflation amid global supply squeezes following the pandemic, we should import lower global inflation too.

Our relatively high interest rates keep the Aussie dollar strong, which also puts downward pressure on inflation and interest rates.

Borrowers – both business and households – just need to get through the next few months before long-awaited relief arrives.

https://www.theaustralian.com.au/business/wealth/inflation-down-interest-rates-still-up-why-were-not-yet-moving/news-story/675d1671f97fdac8963e7a00c3c95980

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Lawyer Lana Collaris faces heavy backlash after refusing to take part in Acknowledgement to Country

It's fundamentally racist

A top lawyer has hit back after being accused of racism for refusing to participate in an Acknowledgement to Country procedure at the Victorian Bar Council.

At meetings of the Victorian Bar Council, the president Georgina Schoff precedes matters with an acknowledgement of the Aboriginal group associated with the land on which it is held.

At a recent such meeting, barrister Lana Collaris instead acknowledged all Australians and then posted the minutes of the meeting on social media.

She was quickly met with a barrage of criticism, including being called a 'racist', a 'visitor' and an 'introduced species'.

Ms Collaris was also attacked by two Bar Council colleagues and was told by the Indigenous Justice Committee that she had brought the Victorian Bar into disrepute.

The under fire lawyer stood by her actions and told Sky News she could not tolerate the ubiquity of the Welcome to Country ceremonies.

'The reason why I decided to acknowledge all Australians that day is because I'd had enough of this implicit ceding of sovereignty before every meeting, before every Zoom meeting, before every time we land on a Qantas flight,' Ms Collaris said.

'I'd had enough and just wanted to take a stand against it.'

She said the implication of the welcome messages was that non-Aboriginal people are of a lesser status, and to say so was at odds with the law she had sworn to uphold.

'It's the constant repetition of this message that's being given to us, that sovereignty does not exist within the Crown in some way, and that's what I've got an issue with.

'It's wrong in law and it's wrong in fact as well and that's why I decided to make a stand.'

Ms Collaris said the response she got online was no surprise.

'I got fairly predictable personal attacks levelled towards me.

'And that's what made me think "I'm going to sit down and I'm going to express my views clearly in writing", and that's what I did.'

In that article, published by The Australian, she wrote that 'acknowledgments of country are not about respect but were part of a political agenda.

'We show respect to Indigenous Australians by celebrating their culture and language, by valuing their historical knowledge, and by holding them to the same standards as all other Australians, not by making ubiquitous acknowledgments of country.'

The barrister said Welcome to Country ceremonies go against 'the fundamental guiding principle of our constitution today (which) is the quality of citizenship.

'If you're going to take a stand that's different to that by making these repeated acknowledgements of country, which repeatedly chip away at that sovereignty, then I think Australians have an instinct and they know that something is not quite right and they understand that there is a political push behind this.

'For as long as people continue to make political statements by way of acknowledgments of country, I will continue to acknowledge all Australians, signalling my support for an Australia where we are all equal and subject to the same laws regardless of our race.'

https://www.dailymail.co.uk/news/article-13905187/lawyer-hits-accused-racist-refusing-Welcome-Country.html?ico=related-replace

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A radical proposal: bring back coal

Up to the year 2000, coal was responsible for over 80 per cent of Australia’s electricity generation. Its share today for the country as a whole is under 50 per cent.

In 2000, we had among the lowest electricity prices in the world. We now have among the highest.

In 2000, Australia had a smoothly-functioning electricity system. The system is now tottering, with supply interruptions and regular threats of blackouts.

Fixing our electricity system requires a completely different way of thinking about it.

Electricity demand over the next 15 years – between now and 2040 – is likely to increase by 20-25 per cent. To meet this additional demand, we need new generating capacity.

This means new coal-fired plants. There are no other options for reliable, low-cost electricity.

Natural gas is in short supply in the eastern states and, in any case, is roughly twice the cost of coal for electricity generation.

Nuclear power, if accepted in Australia, will not be in place before the mid-2030s and will play no major role before the 2040s.

Wind and solar farms are not suitable as they cannot generate reliable electricity, given that cloud cover and wind are variable.

In addition, they are inherently expensive. This is because of high transmission costs (which form roughly 40 per cent of total electricity costs) and because the development of wind and solar farms to meet the needs of the grid requires serious overbuilding.

To illustrate the point on overbuilding, to match the electricity produced by one coal-fired plant of (say) 500 megawatts requires wind and solar farms and rooftop solar panels with total capacity of at least 1,500 megawatts.

The reason? Coal-fired plants can operate 85-90 per cent of the time, about three times the average for wind and solar farms.

Such overbuilding is enormously wasteful.

Conventional thinking requires that there should be a transition in Australia from coal to renewables.

The transition should be the other way around, from renewables to coal.

The critical first step in making this transition is mounting the case for new coal-fired plants.

And a way of starting this process would be the preparation of a concept studies of new plants, one (say) in the Latrobe Valley and one (say) in the Hunter Valley. The studies would almost certainly show that coal was the most cost-effective way of meeting Australia’s immediate electricity needs.

Widespread dissemination of such studies would stimulate public discussion on the way forward for our electricity system and put pressure on Labor and Liberals to say why the coal route should not be pursued.

Who will provide the financial and organisational support for such studies and their dissemination?

To date, there has been no clear answer to this question, given that opponents of our current approach to electricity have been scattered and lacking organisation.

However, the launch in August of a new organisation, Coal Australia, raises the possibility that support is at hand.

Mobilising coal companies and others to join Coal Australia, an effort led by Nick Jorss, Executive Chairman of Bowen Coking Coal, has been an impressive achievement.

The organisation aims to promote the industry in Australia, focusing on both thermal coal (used for electricity generation) and metallurgical coal (used for steel production).

It recognises that ‘without our coal industry, Australia would not have reliable and affordable baseload electricity’.

But is it willing to take the next step and support new coal-fired plants?

A serious problem in this context is Coal Australia’s apparent support for the goal of reaching Net Zero emissions.

For example, it says on its website that it ‘strongly supports the work of Australia’s mining industry associations, such as the Minerals Council of Australia, Queensland Resources Council and NSW Minerals Council’.

But the Minerals Council says that it ‘and its members have a strong commitment to climate action, supporting the Paris Agreement and an industry ambition of Net Zero by 2050’.

This is nowhere challenged by Coal Australia.

Coal Australia also says on its website that ‘by investing in low emissions technologies, together with carbon capture and storage, the industry can contribute to meeting both our energy needs and emissions goals’.

It wants to be seen as contributing to ‘emissions goals’, whose end game is Net Zero emissions.

The Net Zero goal entails the death of the coal industry in Australia – and the death of Coal Australia itself.

In supporting Net Zero, Coal Australia is attempting to walk both sides of the street, supporting coal and supporting those trying to destroy coal.

It should change course and oppose the target of Net Zero emissions If this is a bridge too far, it should at least not take any position on emissions.

Coal Australia may consider the conclusion here to be wrong – that it can walk both sides of the street.

If so, would it consider supporting the preparation of concept studies for new plants, in the Latrobe Valley and the Hunter Valley respectively?

And would it consider moving quickly on this work, completing and starting to disseminate the concept studies by February next year?

This would allow it to play a significant role in stimulating discussion of coal in the lead-up to the next Federal election (due by May 2025), with the chance that such discussion would force political decision makers to stop pretending that coal can be ignored for electricity generation.

It would be wonderful way of supporting coal.

Finally, a little post script on the topic of Net Zero. Not only does the Net Zero goal entail the death of the coal industry, it is also a fundamentally-flawed concept.

It risks the destruction of our economy as we know it, requiring impossible levels of expenditure to achieve ($7,000-9,000 billion according to a comprehensive study released last year, chaired by Professor Robin Batterham, former Chief Scientist of Australia).

And it is a disastrous concept when applied to countries poorer than ours.

For example, electricity consumption per capita in India, Indonesia, the Philippines, Pakistan, Bangladesh, and Sri Lanka is less than 15 per cent of that in Australia.

‘In Africa, electricity is so scarce that the total electricity available per person is much less than what a single refrigerator in the rich world uses.’ (Bjorn Lomborg)

Addressing these problems overwhelmingly requires fossil fuels, notably coal and natural gas, not renewables.

‘Fossil fuels are the most important factor in explaining the advance of modern civilisation.’ (Vaclav Smil, Professor Emeritus at the University of Manitoba, Canada)

In addition to being economically threatening, the Net Zero concept is contentious on scientific grounds.

While scientists agree that emissions contribute to global warming, there is no agreement that they are the main driver of warming.

Other drivers are at work, something that is clear from warming periods in the past, most recently in the Medieval period (around 950 to 1,200 AD) and the Roman period (around 300 BC to 300 AD).

These warming periods, referred to as ‘natural cycles’, had nothing to do with emissions, which did not start increasing until about 1850.

Natural cycles are probably solar related; they (not emissions) may be the main driver of the current warming period, which started around 1800.

Michael Asten, a retired professor of geophysics at Monash university who has done considerable work in this area as part of an international team, says that ‘until mainstream climate-science opinion can be reconciled with observations of natural cycles, climate science can be considered a work-in-progress’.

Or in the words of Judith Curry, a prominent US atmospheric scientist, ‘The climate system is way more complex than just something that you can tune with a carbon-dioxide control knob’.

On political and economic grounds, the goal of Net Zero emissions should be strongly opposed.

On scientific grounds, it should also be opposed, unless future climate science reaches the firm conclusion that emissions are the main driver, not just one driver, of global warming.

https://www.spectator.com.au/2024/09/a-radical-proposal-bring-back-coal/

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Pandemic confusion in NSW

NSW’s COVID-19 public health orders were a one-size-fits-all approach forced upon the police, who struggled to decipher the ever-changing rules they did not request nor want, the state’s former top officer has told a panel of business and community leaders.

The former NSW Police commissioner Mick Fuller, who led the force throughout the COVID-19 pandemic, said updates to the health orders – which dictated what people could and could not do as NSW Health tried to stem the spread of the virus – often made little sense and were not always enforceable.

The orders made under the Public Health Act covered a range of restrictions at different stages of the pandemic, from how many guests could attend a wedding or funeral, to patron numbers in cafes and restaurants, trading rules and social distancing. Even who could take to a dance floor was at one stage determined by a health order.

A panel of six experts – which included Fuller – convened by The Sydney Morning Herald to interrogate NSW’s approach to lockdowns and policing agreed that the health orders lacked clarity, should have been more localised and continued for too long once COVID-19 vaccines were available. The health orders also risked creating serious social division.

Fuller said the health orders were fast-moving and did not pass the usual parliamentary scrutiny of any other legislation. For the first three months of the 2020 lockdown, NSW Police did not have a legal representative at the table as the orders were drafted.

“There was a light-level approval process. Brad Hazzard, minister of health at the time, would sign off and ultimately that would empower those orders. Then police had to operationalise those as best as possible,” Fuller said.

Fuller said he did not know how many health orders were enacted – “I would hate to think” – but he only ever requested one. That was a $5000 on-the-spot fine for “people who cough or spit on health workers, police, pharmacists, paramedics or other public officials”.

It’s been more than four years since China’s COVID-19 outbreak was deemed a public health emergency of international concern, heralding the start of a traumatic period many of us would prefer to forget. While a federal government inquiry is examining some national responses to the crisis, key decisions made by states will not be properly scrutinised.

The Herald is concerned our political leaders have not adequately studied the lessons – good and bad – of our most recent experience, and we asked tough questions about the pandemic’s impact on education, health and lockdowns and policing.

This is the last in our three-part series with six expert panellists looking at the impacts of border closures, lockdowns and policing during this period.

In November 2022, 33,121 of the 62,138 fines handed out since the start of the pandemic were withdrawn after Revenue NSW conceded in court that they were not valid.

Fuller said police did the best they could, bar one incident on March 31, 2020, when a convoy of five patrol cars drove through Rushcutters Bay Park, in Sydney’s east, directing people to comply with the latest social distancing orders. At the time, the eastern suburbs had been identified as a COVID hotspot.

Fuller conceded it was a “terrible” look for police. “The cops should have been out of the cars and talking to people and just explaining it,” he said. However, beyond that incident, Fuller said the police were just carrying out their job, albeit one they did not relish.

“It was a challenging time. I don’t feel as though we over-policed, but I totally understand the community disliked the health orders, and police didn’t like them either, to be honest,” Fuller said.

“One of the toughest things about the orders were the exemptions that would follow the next day.”

A city divided

While the image of police officers descending on Rushcutters Bay played on Fuller’s mind for months after, Adam Leto, the chief executive of think-tank Western Sydney Leadership Dialogue, has an equally powerful recollection.

Two months into what would become the 107-day Delta lockdown in 2021, south-western and western Sydney – home to the most ethnically diverse communities in the city – had far tighter restrictions imposed on them than the rest of NSW. Twelve council areas were declared “areas of concern” as virus case numbers climbed.

By late August, those 12 hotspots were slapped with a 9pm to 5am curfew and outdoor exercise was limited to one hour a day. The rationale was that too many people were moving around western Sydney, taking the virus with them. The result was that Sydney became a city divided.

“I think there was a failure to really understand that that movement wasn’t residents spiting the government or spiting the system, it was born out of necessity,” Leto said.

“People couldn’t work at home. Some didn’t have digital connectivity. Their work required them to move. Their life required them to move. They had care responsibilities. They had extended families. So there was a lot of movement.”

Former president of Local Government NSW and City of Sydney councillor Linda Scott said she vividly recalls driving to south-western Sydney when the announcement was made, passing military personnel on the way. It was a stark difference to much of the city.

Scott said the risk of serious social unrest in western Sydney was very real. On August 20, 2021 – the day 12 areas of concern were declared – she held a press conference in her capacity as Local Government NSW president with then mayor of Canterbury-Bankstown Khal Asfour, whose council was one of the dozen affected.

There was a dangerous vacuum of information, Scott said.

“Nobody, none of the mayors, none of the local leaders, could tell their community what it meant for them. We couldn’t tell them why. We couldn’t tell them what it meant. None of us were clear on what people were allowed to do or not,” Scott said.

“It was a very dangerous point for social cohesion, where communities did not understand and did not accept why they had been chosen.”

Leto said western Sydney residents were watching vision of people picnicking at Bondi Beach while they were only allowed out for an hour a day for exercise. The panel agreed that far better communication was needed, involving community members and religious leaders, before the poorest areas of the city were plunged into a stricter lockdown.

The panel concurred that stay-at-home orders and restrictions needed to be “place-based”.

“Not all western Sydney is the same so your methods and your approach to Penrith are going to be different to what your message is and how you communicate that to Fairfield,” Leto said.

“It needed to be nuanced. It needed to be considered, and it needed to be consulted with local councils, with [community] leaders.”

Leto said the south-western Sydney lockdowns took him back to the Cronulla race riots of 2005.

“It had a mood and a tone to it that I could see that if it wasn’t handled appropriately, that there were enough ingredients to spark something. East versus west was real, and tensions were high. It didn’t get to that point, thankfully, and that’s a credit to the government and Mick [Fuller].”

Whiplash responses

Nationals MP and former deputy premier Paul Toole was a member of the Coalition government’s crisis cabinet, which met daily for much of the pandemic.

He said the priority “from day one” was the health of all NSW residents. That was the right approach, he said. However, that attitude continued for too long and, ultimately, at the expense of the economy.

The panel – which also included Professor Patrick McGorry, a leading adolescent psychiatrist and 2010 Australian of the Year – agreed with Toole’s assessment.

“If you went by the advice of Health, we would probably be in lockdown still today,” Toole, a former police minister, said.

Toole said the early days of the pandemic brought whiplash responses, as a little-known virus from Wuhan, China made its way into Australia. Suddenly, NSW was grappling with the same deadly disease that was killing people on the other side of the world.

Toole said the then-customer service minister Victor Dominello was the first to provide briefings to the cabinet and then-premier Gladys Berejiklian. Every decision, Toole said, was based on NSW Health advice. But eventually, as the pandemic dragged into its second year, the public stopped paying attention.

“There were public health orders that just kept changing. Even when the premier stood up and did an 11 o’clock presser every day, people were starting to get fatigued by the end of it,” Toole said. “There’s another public health order. There’s another change. So people then stopped listening.”

Toole said the public health orders were often too city-centric, especially when it came to restrictions around how far people could move. “Travel in the city is very different to travel in the regions and sometimes it was, hang on, this is not going to work. This might work here in the city, but this is just ridiculous having a public health order for the regions,” Toole said.

A previous panel of health experts convened by the Herald to probe pandemic decision-making warned that while the public largely complied with health orders, the population’s willingness to forgo freedoms would not likely be repeated.

NSW Police would also be less willing to enforce the orders.

While police were responsible for enforcing the health orders, Fuller said there were some requests that could not be delivered, such as a Melbourne-style ring of steel around south-western Sydney. Hundreds of police staffed Victoria’s “ring of steel” for about four months in 2020 when Melbourne was under tighter restrictions than the rest of the state.

Fuller was asked to do the same. He refused. “There were 330 roads they wanted me to lock down. It was logistically impossible, but it was morally wrong as well,” Fuller said. There was also another flaw to that plan: local governments owned many of those roads and they had not been consulted.

Scott said it was another example of poor communication. “There was this instruction to close roads that we owned, that we didn’t know about, that we couldn’t enforce,” she said. “Everyone was trying to act in the public interest, of course, but there was a complete failure of communication about what needed to be implemented and what could be implemented.”

Ultimately, a more effective response to a ring of steel was found, Fuller said.

“It was, in fact, the local police relationships, with the imams and the other community leaders and local government, that really saved the day there, to be honest,” he said.

Keep it simple

The panel also took issue with the complex nature of the restrictions and their multitude of exemptions, saying in a future emergency they should be kept as simple as possible. Margy Osmond, head of lobby group the Tourism and Transport Forum said: “If you’re a business that has multiple outlets in different parts of the city … keeping up with all the difference was just diabolical.”

Leto said the ambiguity around the restrictions caused “tension and frustration” in western Sydney. “I think a lot of people in western Sydney thought that there was one set of rules for some and one set of rules for them,” he said.

Scott agreed. “We had great trouble interpreting the health orders and then managing the infrastructure. The curfews were very difficult in particular.”

“We had some councils interpreting the health orders as ‘we should rope off playgrounds’, which at the time may have seemed sensible, but in retrospect probably meant that less people were using outdoor spaces and congregating indoors,” she said.

“Any decision has consequences but communication about how to interpret those things – giving a clear reason why they were put in place … would have really helped. They revealed the inequities in green space across Sydney in a very stark way.”

Fuller said some of the rules NSW eventually implemented during the Delta wave, such as the five- to 10-kilometre travel radius, were more about “trying to get the community to come on board” and understand the importance of social distancing or staying home, rather than because they had a specific purpose in stopping the spread.

“Some of them I think were more hopeful than [really thinking] they were ever going to be enforced. And I think that’s OK,” Fuller said. “We were never going to police it properly.”

Chris Minns took over as Labor opposition leader in June 2021, just before the Delta wave hit NSW, and generally offered bipartisan support for restrictions and health measures introduced by the then Coalition government.

Now as premier, Minns said it was important to reflect critically on the COVID-19 response, but would not buy into specific conclusions drawn by the Herald’s expert panel.

“At the end of the day leaders across the world were asked to make critical decisions that would impact millions of people in a very uncertain environment, based on the information they had available,” he said.

“Not every call was right, not every call was wrong. There are always things we can do better to ensure we are prepared for emergencies like another pandemic.”

https://www.smh.com.au/politics/nsw/the-morally-wrong-restriction-the-police-refused-to-follow-20240923-p5kcw3.html