The Australia Institute Feed Items

ABC journalist and podcaster Matthew Bevan joins Dr Emma Shortis on this After America to discuss the Democratic National Convention and Trump’s to set the agenda.

This discussion was recorded on Monday 26 August 2024 and things may have changed since recording.

Guest: Matthew Bevan, host and writer of If You’re Listening, the ABC // @MatthewBevan

Host: Emma Shortis, Senior Research for International & Security Affairs, the Australia Institute // @EmmaShortis

Show notes:

‘Harris delivers warm and strong acceptance speech as Democrats take joy, hope and renewal to the electorate’ by Emma Shortis, The Conversation (August 2024)

Theme music: Blue Dot Sessions

One of the most regular and biggest scare campaigns Australians are subjected to is that Australia is about to run out of gas – that households will not be able to run heaters in winter or the light will go out in summer and the air conditioners will stop working because there will be no gas to power the electricity.

These warnings are increasingly shrill. In March for example The Australian newspaper warned that “Urgent action needed if Australia is to avoid catastrophic gas shortfall”. Despite getting through winter without a catastrophe this morning The Australian newspaper is now warning, that a “Perfect storm’ warning” has been issued to Australia’s east coast energy market.

It is all balderdash.

Australia digs up and exports a lot of gas. A really, really large amount. How much? Try 82,000,000 tonnes of the stuff each year. That is the 2nd largest amount of LNG production in the world, suggesting we are pretty good at it. But all that gas ends up as global greenhouse gas emissions and we’re meant to be reducing emissions.

For over two years now it has been clear that profits have been the main culprit of inflation, and that wages have not driven prices despite repeated warnings from the Reserve Bank and business groups that a wages breakout could be about to come and start a mythical “wage-price spiral”

The latest data on wage growth in Enterprise Agreements from the Fair Work Commission (FWC) is just the latest evidence that reveals how wrong those spreading a fear campaign about wages have been.

In the 3 months to 26 July this year, the 3 month weighted average of annual wage growth in enterprise agreements lodged with the FWC was 3.7% – down from a peak of 4.3% in October 2023. The last time the average was this low was in August last year. Importantly the 3.7% growth is lower than the most recent annual inflation figure of 3.8%.

While business groups and conservative media outlets continue to argue that wage growth is keeping inflation high, in reality – as has been the case for the past 2 years – wages are not driving inflation, indeed they are lowering it.

While the intention to reduce the influence of corporate political donations is welcome, the proposed legislation would disproportionately advantage incumbent parties, including enormous increases in public funding, much of which could be spent on election campaigning.

The Australia Institute’s submission to the government consultation into the Bill finds that:

On this episode of Dollars & Sense, Greg and Elinor get out the world’s tiniest violin for Australia’s big banks, who are finally having to compete to offer better mortgage rates, and discuss why three of the ‘big four’ are now offering less for term deposits.

Greg Jericho is Chief Economist at the Australia Institute and the Centre for Future Work and popular columnist of Grogonomics with Guardian Australia. Each week on Dollars & Sense, Greg dives into the latest economic figures to explain what they can tell us about what’s happening in the economy, how it will impact you and where things are headed.

Host: Greg Jericho, Chief Economist, the Australia Institute // @GrogsGamut

Host: Elinor Johnston-Leek, Senior Content Producer, the Australia Institute // @ElinorJ_L

Theme music: Blue Dot Sessions

We’re told it’s a cost-of-living crisis, but not everyone is feeling the pinch. New Australia Institute research shows that the ultra-rich are getting richer, thanks in part to Australia’s distorted tax system. On this episode of Follow the Money, Dr Richard Denniss and Dave Richardson join Dr Alice Grundy to discuss the growing problem of inequality and what we can do to fix it.

This discussion was recorded on Tuesday 20 August 2024 and things may have changed since recording.

Guest: Richard Denniss, Executive Director, the Australia Institute // @RDNS_TAI

Guest: David Richardson, Senior Research Fellow, the Australia Institute // @daverr01

Host: Alice Grundy, Anne Kantor Research Manager, the Australia Institute // @alicektg

Show notes:

Wealth and inequality in Australia by David Richardson and Frank Stilwell, the Australia Institute (August 2024)

‘The Morrison election: What we know now’ by Richard Denniss, The Monthly (June 2019)

The billboards explain that major gas companies in the NT pay no royalties or petroleum resources tax, and that NT drivers contribute 30 times more in vehicle registration to NT Government revenue than the gas industry.

Key Points:

• Australia Institute research has found over the last four years, multinational companies made $149 billion exporting gas they got for free, including $37 billion from the NT. If royalties had been charged on this gas, at least $13.3 billion ($3.4 billion from NT) in revenue could have been raised.
• Reasons provided by Darwin Airport to not run the advertisements include that they were:
  • Negative in nature.
  • Political in nature.
  • Directed at other clients of Darwin Airport advertising services.
• Similar billboards in other jurisdictions, such as Western Australia, have been accepted as legitimate advertising.

“Democracies function best when the public is well-informed, and this becomes a challenge when private companies are deciding what information people can see,” said Richard Denniss, Executive Director of the Australia Institute.

“I think most people would be surprised to learn that vehicle registrations contribute far more to Northern Territory Government revenue than the gas industry, but the reason they’re surprised to hear it is because, as we’ve seen, there are barriers to sharing this type of information in public places like airports.

While the gas industry has been busy trying to tell you that we need more gas, we’ve been busy countering their spin with facts, especially in Western Australia and the Northern Territory.

However, not everyone is as enthusiastic as we are for the message to get out.

A billboard too far?

We wanted to let the people of the Northern Territory know the facts about gas, so we designed this billboard and tried to put it up at Darwin airport.

The Airport refused our business saying it was “negative” and “directed at one of its clients”.

No worries, we’ll leave Santos out of this.

We came back with this design.

On this episode of After America, political scientist Associate Professor Zim Nwokora joins Dr Emma Shortis to discuss the DNC and the Trump campaign’s failure to cut through against a new Democratic candidate.

This discussion was recorded on Friday 16 August 2024 and things may have changed since recording.

Guest: Zim Nwokora, Associate Professor, Deakin University

Host: Emma Shortis, Senior Research for International & Security Affairs, the Australia Institute // @EmmaShortis

Show notes:

‘Sweet home, Chicago: the Democrats return to the site of their most tumultuous convention. This time, they are united’ by Emma Shortis and Liam Byrne, The Conversation (August 2024)

Theme music: Blue Dot Sessions

This would see products like period underwear and tampon inserters placed in the same category as vapes, gambling and gaming PCs.

This isn’t the first time federal policy has made menstrual products harder to afford.

People who menstruate, most of whom are women, fought for nearly two decades for the goods and services tax (GST) to be removed from sanitary products such as tampons. The campaign lasted from before the GST was introduced in the year 2000, all the way up until 2018, when state and federal governments finally agreed to act.

The decision to exempt sanitary products cost the budget $30 million.

This might sound like a lot of money, but in budgetary terms, it’s next to nothing.

By way of comparison, tax breaks for luxury utes cost Australians $250 million last year, according to recent research by The Australia Institute.

While car sales data is not broken down by gender, few would contest that this tax break is mainly enjoyed by men.

And not just any men. The tax break only applies to new vehicles that cost over $80,000. Some of these utes cost up to $250,000, so we’re talking about very rich men.

There is widespread public support for banning gambling advertisements on free-to-air media because of the harm caused by gambling. The main objection is that Australia’s free-to-air networks, hit by declining revenues and fragmenting audiences, can’t afford to lose the money.

But there’s a simple solution.

A small levy on the many billions of dollars gambling companies extract from Australians could compensate the media for the lost revenue – with enough left over to increase funding for the ABC.

Such a levy would cost the gambling industry less than a quarter of a billion dollars a year.

That’s a tiny fraction of the money lost on wagering.

Each year, losing bets cost Australians about $25 billion dollars, according to the Australian Institute of Health and Welfare and the Australian Gambling Research Centre.

That doesn’t include the cost to society of problem gambling, which feeds addiction and mental health problems.

According to the Australian Bureau of Statistics, gambling company revenues totalled $17.2 billion dollars in 2022-23.

Meanwhile, the industry spent about $239 million advertising on free-to-air TV, metropolitan radio, and online.

Key Points:

• Gambling company revenues totalled $17.2 billion dollars in 2022-23.
• Meanwhile, the industry spent about $239 million advertising on free-to-air TV, metropolitan radio, and online.
• Therefore, a levy on gambling revenues of just 1.4% could replace all that lost advertising income.
  • Round it up to 2% and the government could replace some of the money the ABC has lost in budget cuts as well.

“Politically, this policy is definitely worth a punt, with good odds that it would be a vote-winner,” said Stephen Long, Senior Fellow at the Australia Institute.

“A 2% levy on the gambling industry, which represents a tiny fraction of the money lost on wagering, could compensate the media for any lost revenue resulting from a gambling ads ban. There would even be enough left over to replace some of the money that the ABC has lost in budget cuts as well.

“For the media and the Australian public, this represents a rare win-win scenario.

“Implementing such a policy would reduce the harm to the community that gambling advertising causes, while simultaneously guaranteeing a revenue stream for public interest broadcasting.

“The free-to-air networks could then sell the advertising slots the gambling companies occupied to other businesses while pocketing the levy as well, producing a revenue bonanza.

On this episode of Dollars & Sense, Australia Institute Senior Economist Matt Grudnoff and Elinor discuss the government’s gambling reforms and new research showing that the wealth of Australia’s richest 200 people nearly tripled over the last two decades.

Each week on Dollars & Sense, we dive into the latest economic figures to explain what they can tell us about what’s happening in the economy, how it will impact you and where things are headed.

Host: Matt Grudnoff, Senior Economist, the Australia Institute and Centre for Future Work // @MattGrudnoff

Host: Elinor Johnston-Leek, Senior Content Producer, the Australia Institute // @ElinorJ_L

Show notes:

‘Give Junk Food & Gambling Ads the Punt’, The Australia Institute (2022)

‘Wealth and inequality in Australia’ by David Richardson and Frank Stilwell, The Australia Institute (2024)

Theme music: Blue Dot Sessions

Columbia University Professor and former World Bank Chief Economist Joseph E Stiglitz joins Ebony Bennet on this episode of Follow the Money to discuss inequality and the rise of Trump, Australia’s “environmental deficit” and his new book, The Road to Freedom: Economics and the Good Society.

This discussion was recorded on Tuesday 13 August 2024 and things may have changed since recording.

Guest: Joseph Stiglitz, Nobel Prize-winning economist // @JosephEStiglitz

Host: Ebony Bennett, Deputy Director, the Australia Institute // @ebony_bennett

Show notes:

The Road to Freedom: Economics and the Good Society by Joseph E Stiglitz (2024)

Theme music: Pulse and Thrum; additional music by Blue Dot Sessions

On this special episode of After America, recorded live at the State Library of New South Wales, Dr Emma Shortis is joined by Professor Joseph Stiglitz and the Hon Malcolm Turnbull AC to discuss the role of inequality in US politics and dealing with the Trump White House.

This discussion was recorded live on Monday 29 July 2024 and things may have changed since recording.

Guest: Joseph Stiglitz, recipient of the Nobel Prize for Economics and Professor at Columbia University Business School // @JosephEStiglitz

Guest: Malcolm Turnbull, former Prime Minister of Australia // @TurnbullMalcolm

Host: Emma Shortis, Senior Research for International & Security Affairs, the Australia Institute // @EmmaShortis

Show notes:

The Road to Freedom: Economics and the Good Society by Joseph E Stiglitz (2024)

‘How the World Can Deal with Trump’ by Malcom Turnbull, Foreign Affairs (2024)

Theme music: Blue Dot Sessions

Nobel-Prize winning economist, former World Bank Chief Economist Professor Joseph E. Stiglitz joined Q+A to explain what’s really causing inflation.

Professor Stiglitz is touring Australia as a guest of the Australia Institute, as part of our 30th anniversary celebrations in 2024.

The post Greedflation: what’s really causing inflation | Joseph Stiglitz on Q+A appeared first on The Australia Institute.

The wealth of Australia’s richest 200 people nearly tripled over the last two decades. In 2020-21, capital gains exceeded all other types of income combined. Tax reform is needed to address this problem.

The post Wealth and inequality in Australia appeared first on The Australia Institute.

Key Points:

• • Inequalities of incomes and wealth in Australia have grown in recent decades and the tax system is making the situation worse.
  • The wealth of those on the Rich 200 list rose from the equivalent of 8.4% of the nation’s GDP in 2004 to 23.7% of GDP in 2024.
  • In 2020-21, capital gains exceeded all other types of income combined.
  • The estimated revenue forgone through the failure to fully tax realised capital gains in 2023-24 is estimated to be $19 billion.
  • Three types of tax reform could restrain the growth of wealth inequality in Australia:
    • more comprehensive taxation of capital gains,
    • the introduction of an annual tax on wealth above a specified threshold, and
    • the introduction of a wealth transfer tax.

• Any one of these would make a big difference; all three would be transformational.

“Australia is getting more unequal. Wealth inequality is growing rapidly, and the tax system is making it worse. Australia needs new ideas and new policies to fix it,” said David Richardson, Senior Research Fellow at the Australia Institute.

“Growing economic inequality is making life worse for millions of Australians and holding our country back. The International Monetary Fund and others have shown how economic inequality tends to reduce a nation’s economic growth.

As experienced elder states-people from both major parties slam the deal as disastrous for Australia’s long-term interests, it is clear that Australia should end its conciliatory deference to the U.S.A and instead begin advocating in our own national interest.

“Australians found out about this new deal via a release from the White House, continuing a longstanding trend of secrecy around an agreement that lacks transparency and accountability,” said Emma Shortis, Senior Researcher in International & Security Affairs at the Australia Institute.

“Secrecy is not security, and Australians have a right to know what the government is agreeing to.

“The AUKUS deal has been met with dismay by Australia’s Pacific partners. It badly damaged our relationship with the French government, undermined our multilateral commitments and relationships, and dramatically misinterpreted the trajectory of American power. It unnecessarily escalates tensions with China.

“Australia is unlikely to get these submarines. More importantly, we do not need them.

“The deal was merely an announceable for a government seeking to shore up its position before an election and wedge the opposition. It is an outrageously expensive, unnecessary plan that will probably fail. And even if it wasn’t all of those things, it will not make Australia or our region safer – it will do the opposite.”

On this episode of Dollars & Sense, Greg and Elinor discuss the pay increase for childcare workers, what’s happening in the stock market and the decision to keep interest rates on hold.

Greg Jericho is Chief Economist at the Australia Institute and the Centre for Future Work and popular columnist of Grogonomics with Guardian Australia. Each week on Dollars & Sense, Greg dives into the latest economic figures to explain what they can tell us about what’s happening in the economy, how it will impact you and where things are headed.

Host: Greg Jericho, Chief Economist, the Australia Institute // @GrogsGamut

Host: Elinor Johnston-Leek, Senior Content Producer, the Australia Institute // @ElinorJ_L

Theme music: Blue Dot Sessions

We’d love to hear your feedback on this series, so send in your questions, comments or suggestions for future episodes to podcasts@australiainstitute.org.au.

Are the home affairs and immigration portfolios a poisoned chalice for the new minister, Tony Burke? And are the opposition’s attacks on the government over the economy having an impact ahead of the election? On this episode of Follow the Money, we discuss the latest in federal politics with Paul Bongiorno.

This discussion was recorded on Tuesday 6 August 2024 and things may have changed since recording.

Guest: Paul Bongiorno, columnist, The Saturday Paper and The New Daily // @PaulBongiorno

Host: Greg Jericho, Chief Economist, the Australia Institute // @GrogsGamut

Theme music: Pulse and Thrum; additional music by Blue Dot Sessions

We’d love to hear your feedback on this series, so send in your questions, comments or suggestions for future episodes to podcasts@australiainstitute.org.au.

New APRA figures show the impact the Reserve Bank’s program of official interest rate increases has had on the Australian economy.

From the low of 0.10% in April 2022, official interest rates have increased by 425 basis points to 4.35%. Thankfully the Reserve Bank has this month kept rates steady, but the damage to the economy has already been done.

Since the March quarter of 2022, quarterly interest payments to the banks from the rest of the Australian economy went from $25.8 billion to $78.95 billion in March 2024. If we annualise these figures that means there has been a $212 billion increase in payments to the banks since official rates were increased.

Since that low of March 2022, each 25 basis point increase in the official interest rate increased banks’ annualised interest charges by around $12 billion. For comparison that is slightly more than the Australian government is budgeted to spend in this financial year on support for carers.

Over the same period, quarterly payments to the banks for home loans increased from $13.5 billion to $32.8 billion. The increase of $19.3 billion per quarter equates to just over $77 billion per annum. It also means that each 25 basis point increase in the official rate increases annualised interest charges on home loans by $4.5 billion per annum. Each 100-basis point increase increased the banks’ annualised interest charges on home loans by $18 billion.

Patricia Karvelas peppered the Treasurer with questions this morning, asking whether there is there anything the government can do to slow “non-essential projects” to “allow flow back to housing”.

The short answer is yes. There is one particular kind of infrastructure the government can cut back on first: fossil fuels.

Every time the government approves new coal mines or gas expansions, it’s giving the go ahead to projects that soak up labour and equipment — taking resources away from the construction of essential infrastructure like dwellings, roads, and railways.

Some $41 billion worth of new fossil fuel projects are gobbling up the construction supply chain.

Recent research by the Australia Institute using official government data has found that fossil fuel projects make up 53% of the total funding committed to resource and energy infrastructure across Australia.

Woodside, for example, has committed an estimated $18 billion to oil and gas projects in Western Australia; Santos $4.3 billion to the Barossa gas project in the NT. Further billions are flowing to coal projects in NSW and Queensland.

In the wake of the Reserve Bank’s latest forecasts, Treasurer Jim Chalmers is facing calls to cut back infrastructure investment to relieve inflation pressures and ramp up housing construction – cutting back on fossil fuels is an easy first step to address this problem.

Key Points:

Washington DC-based international policy expert Dr Nancy Okail joins Dr Emma Shortis on this episode of After America to discuss America’s relationships with China and the Middle East, and possibility a more progressive approach to foreign policy led by Kamala Harris.

This discussion was recorded on Friday 2 August 2024 and things may have changed since recording.

Guest: Nancy Okail, President and CEO, Centre for International Policy // @NancyGEO

Host: Emma Shortis, Senior Research for International & Security Affairs, the Australia Institute // @EmmaShortis

Show notes:

‘Ukraine and Israel and the Two Joe Bidens’ by Matthew Duss, The New Republic (December 2023)

‘The Killing of a Hamas Leader Is Part of a Larger War’ by Matthew Duss and Nancy Okail, The New York Times (August 2024)

Theme music: Blue Dot Sessions

The wording of the Western Australian Government’s fact sheet on petroleum resources exemplifies the way in which the country’s resources are described to the public:

“Petroleum resources are owned by the community and a royalty is a purchase price for the resource. The community expects a fair return for the loss of its non-renewable petroleum resources.”

This rhetoric does not reflect reality. While the community might expect a fair return for the loss of its resources, in many cases it gets no return at all, fair or otherwise.

Australia has ten facilities that export gas as liquified natural gas (LNG). Six of these projects—both of the Northern Territory’s facilities and four of the five operating in Western Australia—pay no royalties, either state or federal. These facilities represent 56% of Australia’s gas export capacity. This means that all the gas exported from the NT, and more than half the gas exported from Australia, is given for free to the companies exporting it.

The monetary value of this gas is enormous. The total value of LNG exports over the last four years is estimated at $265 billion Australia-wide, $37 billion of which was exported from the NT. All of the NT’s LNG exports were royalty-free and Australia’s royalty-free exports totalled $149 billion. To put this another way: in the last four years alone, Australians have given away the gas that made $149 billion worth of LNG, for free.

This one simple change could redirect much of the clean, cheap renewable energy that is currently being wasted, or “curtailed”, by the National Energy Market during the day.

Key Findings:

• Annual forced curtailment for 2023-24 was around 4,000 gigawatt-hours (GWh).
• This represents around 9.3% of Australia’s total generation from wind and utility solar.
• Historically, Off-peak hot water systems have been set to operate at night, but they could be reconfigured to consume electricity during the middle of the day, when there is an abundant supply of renewable electricity.
• Switching off-peak hot water to the middle of the day could provide around 4,000 GWh of flexible demand, almost the exact current level of renewable curtailment.
• This could save up to $6 billion in household electricity and energy costs by 2040.

“The fact that we in Australia choose to waste cheap and clean renewable energy on a regular basis is absurd,” said Dr Richard Denniss, Executive Director at the Australia Institute.

“While the persistent claims of a looming energy crisis and gas shortage ring out across the country, we are turning our back on nearly 10% of the current renewable capacity in our grid.

“The time for inflexible, expensive and polluting electricity from fossil fuels has come and gone. It is now up to the Federal Government to make the necessary changes that will allow Australians to properly access clean, cheap renewable energy.

This “curtailment” is carried out to maintain grid stability by preventing an oversupply of electricity at a time when there is simply not enough demand for it.

Analysis of NEM data suggests that annual forced curtailment for 2023-24 was around 4,000 gigawatt-hours (GWh). This represents around 9.3% of Australia’s total annual wind and utility solar generation.

A possible source of flexible demand for this generation is residential off-peak hot water. Off-peak systems account for around 30% of Australian household hot water systems. They are designed to use power overnight, a period when electricity demand has historically been lowest, but during which coal-fired generators have kept producing electricity regardless.

Today, off-peak times could be redefined, and off-peak systems reorganised to consume renewable electricity during the middle of the day, when there is an abundant supply of renewable electricity. Research by the Institute for Sustainable Futures at the University of Technology Sydney estimates that switching off-peak hot water to the middle of the day could have provided around 4,000 GWh of flexible demand in 2020—coincidentally, almost the exact level of renewable curtailment in 2023–24.

The shots fired at Donald Trump at a rally in Pennsylvania on Saturday are being investigated as an assassination attempt of the former president and current Republican presidential nominee.

Assassination attempts on presidents and presidential nominees are littered throughout American history. What happened in Pennsylvania is horrifying, but sadly not surprising.

I’ve been really struck by how many senior political figures in the United States came out after the shooting and said political violence has no place in America. US President Joe Biden said violence of this kind is “unheard of” in the US.

That is pretty astounding. The United States was founded on political violence, and incidents of political violence mark its entire history.

In fact, Biden began his political career framing himself as the political heir to the murdered Kennedy brothers – President John F. Kennedy, who was assassinated in 1963, and Robert F. Kennedy, assassinated in 1968.

However, for this incident to occur in this moment, given the volatile nature of the presidential campaign so far and the deep divisions in the United States, is deeply concerning.

The Wrap with Ebony Bennett

Nobel Prize-winning economist Professor Joseph E. Stiglitz kicked off his Australian tour this week and has well-and-truly hit the ground running.

There were full houses in Sydney and Hobart to see the former World Bank chief economist and best-selling author, who’s visiting Australia as a guest of the Australia Institute, as part of our 30th anniversary celebrations.

Here are three key takeaways from the first week of his tour:

1. Australia’s democratic institutions are the envy of the world

Mandatory, preferential voting and an independent electoral commission have helped Australia avoid some of the “perverse” outcomes seen in the United States, according to Professor Stiglitz.

“If the US had had rank order voting, Trump would not have been on the ballot in the first election in 2016.”

Professor @JosephEStiglitz unpacks three democratic institutions that Australia does better than the US.#auspol pic.twitter.com/5zY6zJ3HbS

— Australia Institute (@TheAusInstitute) July 30, 2024

The Australia Institute surveyed a nationally representative sample of 1,014 Australians about whether they support public funding for political parties and candidates to run election campaigns and cover administrative costs.

The results show that:

• Three in five (60%) Australians oppose public funding of political parties and candidates. Only one in four (27%) Australians support public funding.
• A majority of voters for all political parties oppose public funding.
• Seven in ten (71%) Australians oppose increasing public funding for political parties and candidates. Only one in six (18%) Australians support increasing it.
• A majority of voters for all political parties oppose increasing public funding. Opposition was highest among voters for One Nation (92%), the Coalition (78%) and Other/Independent candidates (71%).
• Earlier polling research finds that Australians would be more likely to use an alternative public funding system, “democracy vouchers” (39% are likely), than to donate under the status quo (16% are likely).

The post Polling – Public funding for political parties and candidates appeared first on The Australia Institute.

Superannuation tax concessions are meant to encourage saving for retirement, but the system is being gamed to help the wealthiest avoid paying tax. Australia Institute Chief Economist Greg Jericho joins Ebony Bennett on this episode of Follow the Money to bust some super myths and discuss what a fairer system should look like.

This discussion was recorded on Tuesday 30 July 2024 and things may have changed since recording.

Guest: Greg Jericho, Chief Economist, the Australia Institute // @GrogsGamut

Host: Ebony Bennett, Deputy Director, the Australia Institute // @ebony_bennett

Show notes:

‘Who benefits? The high cost of super tax concessions’ by Minh Ngoc Le (June 2024)

‘Superannuation tax concessions are making inequality worse’ by Greg Jericho (July 2024)

Theme music: Pulse and Thrum; additional music by Blue Dot Sessions

You can see Professor Joseph E Stiglitz speak live in several cities across Australia as part of the Australia Institute’s 30th anniversary celebrations. Tickets are available via our website.

On this episode of Dollars & Sense, Greg and Elinor discuss Australia’s uncompetitive airline industry, the cost of privatising essential public services, and the latest inflation figures.

Greg Jericho is Chief Economist at the Australia Institute and the Centre for Future Work and popular columnist of Grogonomics with Guardian Australia. Each week on Dollars & Sense, Greg dives into the latest economic figures to explain what they can tell us about what’s happening in the economy, how it will impact you and where things are headed.

Host: Greg Jericho, Chief Economist, the Australia Institute // @GrogsGamut

Host: Elinor Johnston-Leek, Senior Content Producer, the Australia Institute // @ElinorJ_L

Theme music: Blue Dot Sessions

We’d love to hear your feedback on this series, so send in your questions, comments or suggestions for future episodes to podcasts@australiainstitute.org.au.

As a parent, I’m always careful to remind them that super powers are fun for pretending, but they are not real.

Unfortunately, it’s hard to teach this to kids when federal government ministers say things like “green hydrogen is at the heart of our vision for Australia as a…renewable energy superpower.”

SOCK! POW! KAZAAM!

As much as kids and ministers might like to play green hydrogen superpowers they should not be used when crossing the road or formulating tax and energy policy.

Which brings us to the federal government’s Hydrogen Production Tax Incentive, which was open for consultation until last Friday.

This program will see the Government subsidise eligible hydrogen production by $2 per kilogram. Budget documents (p68) give an estimated cost of “$6.7 billion over ten years from 2024–25 (and an average of $1.1 billion per year from 2034–35 to 2040–41).”

The FMAA aims to support investment in Australian value-added manufacturing initiatives relating to the renewable energy transition. While it remains to be legislated, the budget suggests the FMAA will entail approximately $23 billion of new public spending over ten years. The majority of this is accounted for by two new tax credits which incentivise private investment into domestic critical minerals processing and renewable hydrogen production. These credits are available from 2027 and, while currently uncapped, are estimated to entail $13.7 billion in public industrial support by 2035-35. Also notable is approximately $4.5 billion in new funding for the Australian Renewable Energy Agency (ARENA) across several new initiatives, providing grants, subsidies, and investment for the manufacturing and development of renewable technologies, including batteries and solar panels.

The average pay for the principal of an elite private school in Sydney is about $687,000 a year. At least four get a salary and benefits package worth over $900,000, and one of those is on over $1 million a year.

It took the leak of confidential data to find this out because, despite being heavily subsidised, private schools in most parts of Australia don’t have to tell anyone what they pay their headmasters. The Australian Charities and Not-for-profits Commission’s reporting requirements come close, but they don’t require schools to say how much they pay individual staff in particular positions.

Even if $600,000 is only a rough estimate, it’s a lot more than the principals of NSW’s public schools get. Their salaries – which are published by the NSW Government – range between $140,000 and $216,000 a year. Seek puts the average pay for a school principal in Australia at between $165,000 and $185,000 a year.

This pay gap is symptomatic of the widening inequality between the ‘haves’ and the ‘have nots’ of our education system.

The Victorian Electoral Matters Committee recommendations include:

• Truth in political advertising laws.
• Changes to how the Victorian upper house is elected.
  • The Committee acknowledges that “If group voting tickets were eliminated but the current structure of regions continued, major parties would likely be over-represented in the Upper House and there would likely be fewer minor parties and less diversity”.
• Prohibiting groups other than the Electoral Commission from distributing certain postal voter applications.
• Improving access to polling places for voters with disabilities.
• Parties to establish codes of conduct for their members in relation to their behaviour on social media.
• Further restricting which party names, abbreviations and logos can be registered, as is the case at the Commonwealth level.

“The Victorian Electoral Matters Committee has conducted a thorough and detailed investigation that gives the Victorian public a lot to consider,” said Bill Browne, Director of the Australia Institute’s Democracy & Accountability Program.

“With the multi-party Committee repeating its recommendation for truth in political advertising, there is no excuse for further delays from the Victorian Government.”

Truth in political advertising

“In Victoria, it is perfectly legal to lie in a political ad, and it shouldn’t be,” said Bill Browne.

Historian Dr Prudence Flowers joins Dr Emma Shortis to discuss the politics of reproductive rights in American politics, Project 2025 and the wave of support for Kamala Harris since Joe Biden’s withdrawal from the race.

This discussion was recorded on Friday 12 and Thursday 25 July 2024 and things may have changed since recording.

1800RESPECT is the national domestic, family and sexual violence counselling, information and support service. Call 1800 737 732, text 0458 737 732, chat online or video call via their website.

Guest: Prudence Flowers, Senior Lecturer in US History, Flinders University // @FlowersPGF

Host: Emma Shortis, Senior Research for International & Security Affairs, the Australia Institute // @EmmaShortis

Show notes:

‘‘Kamala IS brat’: how the power of pop music has influenced 60 years of US elections’ by Prudence Flowers, The Conversation (July 2024)

On this episode of Dollars & Sense, Greg Jericho discusses the economic impact of a second Trump presidency for Australia and the region – and why four more years of Trump could be a disaster for the climate.

Greg Jericho is Chief Economist at the Australia Institute and the Centre for Future Work and popular columnist of Grogonomics with Guardian Australia. Each week on Dollars & Sense, Greg dives into the latest economic figures to explain what they can tell us about what’s happening in the economy, how it will impact you and where things are headed.

Host: Greg Jericho, Chief Economist, the Australia Institute // @GrogsGamut

Host: Elinor Johnston-Leek, Senior Content Producer, the Australia Institute // @ElinorJ_L

Theme music: Blue Dot Sessions

We’d love to hear your feedback on this series, so send in your questions, comments or suggestions for future episodes to podcasts@australiainstitute.org.au.

1. Fossil fuel exports.
   Minister Bowen did not address, and no one asked about, the fact that Australia is the world’s third largest fossil fuel exporter. With over 100 new fossil fuel projects in the development pipeline, as well as four new coal mines and at least 116 new gas wells approved since 2022, the Australian Government shows no intention of changing this status. Just this week, the government opened areas of Commonwealth waters off the coasts of South Australia, Victoria and Tasmania for offshore gas exploration.
2. Emissions outside of electricity.

The United Nations and the IEA have been clear that there can be no new coal, oil or gas projects if we are to avoid dangerous climate change. There is no ‘clean energy transition’ while governments keep approving highly polluting new fossil fuel projects

Key Points:

• A series of new offshore gas and sea dumping exploration permits have been granted by the Federal Minister for Resources, The Hon Madeleine King, today.
• The projects are off the coast of Western Australia and Victoria.
• Sea dumping (described by the gas industry as CCS) increases emission by enabling new fossil fuel projects. Just three Australian coal fired power stations emit more carbon pollution than the entire world’s current CCS capacity.

“This government was elected to take action on climate change and reduce emissions, but they are opening new fossil fuel projects instead,” said Mark Ogge, Principal Advisor at The Australia Institute.

“Expanding Australia’s gas production in the middle of a climate emergency is not just short-sighted: it treats our Pacific Island neighbours and future generations with contempt.

Dr Emma Shortis and Ebony Bennett, host of the Australia Institute’s Follow the Money podcast, reflect on Joe Biden’s legacy, his endorsement of Kamala Harris and what it could mean for the election campaign.

This discussion was recorded on Monday 22 July 2024 and things may have changed since recording.

Host: Emma Shortis, Senior Research for International & Security Affairs, the Australia Institute // @EmmaShortis

Host: Ebony Bennett, Deputy Director, the Australia Institute // @ebony_bennett

Theme music: Blue Dot Sessions

You can see Professor Joseph E Stiglitz speak live in several cities across Australia as part of the Australia Institute’s 30th anniversary celebrations. Tickets are available online.

The deepfake, which is marked as “AI-generated content”, depicts Premier Miles dancing, to make fun of Miles for posting a video of himself making a sandwich.

Effective truth in political advertising laws already exist; they have operated in South Australia since the 1980s, were legislated in the ACT in 2020, and been proposed in other jurisdictions – including by Queensland Labor rank-and-file.

“Even when political ads are marked as AI-generated, political parties and candidates should be wary about running them. No one benefits from a race to the bottom where fake content is used to ridicule political rivals,” said Bill Browne, Director of the Australia Institute’s Democracy & Accountability Program.

“Queensland saw the use of one of the first political deepfakes in Australia, at the 2020 state election. It looks like the trend is continuing.

“While this deepfake was marked as AI-generated, it shows how easy it has become to create fake content – and there is no guarantee that other fake content in the Queensland election will be clearly identified. In Queensland, it is perfectly legal to lie in a political ad, and it shouldn’t be.

“Elections elsewhere around the world have seen deepfake images and videos used with the deliberate intent to deceive.

“Truth in political advertising laws in Queensland, along the lines of those already in place in South Australia and the ACT, would help ensure that voters are not misled.”

To do so, Australia will need to abandon its conciliatory deference to the U.S.A and instead begin advocating strongly in our own national interest.

Australia has power and agency in the US-Australia relationship. With a second Trump Presidency remaining a real possibility, Australia also has a significant stake in the survival of US democracy and global leadership.

“Biden had nowhere to go, and that’s where he went,” said Dr Emma Shortis, Senior Researcher for the Australia Institute’s International & Security Affairs Program.

“Biden has endorsed Vice President Kamala Harris, which was the only logical choice. Harris is now an experienced Vice President, accustomed to the national stage and particularly strong on the issue of reproductive rights.

“While American politics has been preoccupied with recent events, this issue is one that motivates voters to turn out. It did in the 2022 mid-terms, and it likely will do again.

“There is a long way to go until November, but Trump currently remains ahead in the polls.

“What Australia does matters on the world stage, and we can no longer blindly rely on the United States to defend us.

“Instead of considering how Australia can accommodate America under Trump, we can instead focus on standing up for what matters to us and push hard for our interests and values. It’s time that we learned to work with America, not just for it.”

Even though the transport sector is the third largest source of Australian emissions and accounted for 21% of national emissions in 2023, the Australian Government continues to incentivise the sale of big utility vehicles (utes) relative to other car options. Over the last twenty years, the number of utes on our roads has grown much faster than the number of passenger vehicles.

While utes are necessary to a range of occupations, their proliferation, particularly of larger heavier models, damages the environment, damages roads, and incurs a range of other costs on society. A key example of this incentivisation is an exemption from Luxury Car Tax (LCT), which applies to essentially all utes.

Large vehicles impose considerable costs on society, from their higher carbon emissions and rates of road damage to serious safety concerns. The Australian Government should ensure that these costs are accounted for by properly taxing and regulating these vehicles, starting with removing the LCT exemption for utes. These policies would curb the growth in expensive and damaging vehicles in Australia and limit the use of utes to legitimate commercial purposes rather than personal luxuries.

The post Luxury Car Tax and the Ute Loophole appeared first on The Australia Institute.

A loophole in Australia’s tax law effectively subsidises large utes such as Ram and Chevrolet pick-up trucks by avoiding the Luxury Car Tax (LCT) that other imported vehicles pay, regardless of if the vehicles are used for work, recreation or just commuting.

The $250 million cost of this subsidy is more than ten times the Federal Government’s Active Transport Fund for the construction and upgrade of cycle paths every year.

Key Findings:

• Luxury car tax is paid on the sale or importation of most cars valued above $81,000.
• However, any vehicle that can carry twice the weight in payload that it can carry in people, is exempt regardless of what it is used for.
• Non-luxury utes, used by most tradies, sit below this threshold and would be unaffected by the removal of the luxury ute loophole.

“The Australian public is subsidising big, dumb utes by hundreds of millions of dollars each year,” said Rod Campbell, Research Director at the Australia Institute.

“These vehicles are damaging roads, reducing safety and increasing emissions, yet they are given a massive tax break.

“Removing the luxury car tax exemption will not affect most ute drivers, particularly tradies.

“Instead it targets those buying large luxury vehicles, worth sometimes hundreds of thousands of dollars, for personal use.

The Wrap with Ebony Bennett

Watching the bin fire that is the American presidential race, Australian democracy is looking pretty good.

There are without doubt some key things to be grateful for.

Our system of compulsory preferential voting, for example, which ensures no vote is wasted – unlike in the United States and the United Kingdom.

The Australia Electoral Commission, which ensures our elections are transparent and fair; free of the blatant gerrymandering we see in the States.

Even the secret ballot, an essential component of democracy worldwide, is an Australian invention.

But we cannot take our democracy for granted.

We need truth in political advertising laws that make it illegal to lie in political ads so public trust in our system doesn’t erode irreparably.

We need political finance reform exposes the undue influence of fossil fuel companies and others – and that doesn’t rig the system against independents and minor parties.

We also need to have a serious conversation about inequality, which undermines faith in democracy.

The government is currently legislating to reduce the tax concessions available on superannuation balances of more than $3m. While this measure would affect only around 80,000 people out of the 17m holders of superannuation conservatives and lobbyists of the wealthiest are arguing this will hurt those who have saved for their own retirement.

In reality, the use of superannuation tax concessions has been completely abused. The purpose of superannuation is to reduce the burden on the pension system, but now we see in articles such as in the Financial Review today, people arguing that they are using superannuation to build up their inheritance for their children and grandchildren and that these measures to reduce tax concessions on super balances of over $3m are “stealing my children’s inheritance”.

Superannuation tax concessions for the wealthiest only serve to entrench inequality in our society, but worse, because the concessions allow the wealthy to reduce the tax they pay on their income before retirement, it means Australian taxpayers are in effect funding the retirement of the very wealthiest in the country.

The cost of these taxation concessions puts lie to the line that they are “self-funded” retirees.

On this episode of Dollars & Sense, Greg Jericho discusses the latest International Monetary Fund Update on the global economy, the possible impact of American tariff hikes on global efforts to tackle inflation, and the real story behind Australia’s seemingly rosy unemployment data.

Greg Jericho is Chief Economist at the Australia Institute and the Centre for Future Work and popular columnist of Grogonomics with Guardian Australia. Each week on Dollars & Sense, Greg dives into the latest economic figures to explain what they can tell us about what’s happening in the economy, how it will impact you and where things are headed.

Host: Greg Jericho, Chief Economist, the Australia Institute // @GrogsGamut

Host: Elinor Johnston-Leek, Senior Content Producer, the Australia Institute // @ElinorJ_L

Theme music: Blue Dot Sessions

It’s said that ‘disunity is death’ in Australian politics, but – as several major party politicians found out in the 2022 election – falling in behind an unpopular policy agenda can be pretty dangerous for your career as well. On this episode of Follow the Money, Australia Institute Executive Director Richard Denniss joins Ebony Bennett to discuss the big changes taking place in Australian politics and how they might influence the next election.

This discussion was recorded on Tuesday 16 July 2024 and things may have changed since recording.

Guest: Richard Denniss, Executive Director, the Australia Institute // @RDNS_TAI

Host: Ebony Bennett, Deputy Director, the Australia Institute // @ebony_bennett

Show notes:

Power sharing in Australian parliament by Bill Browne and Richard Denniss (July 2024)

Theme music: Pulse and Thrum; additional music by Blue Dot Sessions

You can see Professor Joseph E Stiglitz speak live in several cities across Australia as part of the Australia Institute’s 30th anniversary celebrations. Tickets are available via our website.