A glass half-full
The world’s biggest free-trade deal should boost confidence
Australia’s agreement to quickly finalise the Regional Comprehensive Economic Partnership is a sliver of good news, not because hopes of a seamless market across the Indo-Pacific region will ever be realised, but because the deal could prove a bulwark against rising protectionism and is a shot in the arm for positive globalism. The Australian Financial Review reports [$] today that the partnership, which will be signed early next year, provides a framework for deeper political cooperation between the 15 member countries – and hopefully India, having negotiated this far, will decide to rejoin before too long. ANU economic professor Peter Drysdale, considered to be the intellectual architect of APEC, told the AFR that the RCEP would calm spooked investors, and begin to “rebuild confidence where confidence has been fractured in the international economy”. That has got to help Australia, where confidence is on a knife edge.
Reserve Bank governor Philip Lowe, keeping interest rates on hold this afternoon as expected, reiterated the view that the economy has passed a “gentle turning point” with an upswing in the Sydney and Melbourne housing markets, but the official forecasts for unemployment, inflation and growth paint a picture of stagnation continuing right through next year. Yesterday’s dire retail trade figures, the worst in nearly 30 years, barely rated a mention in the statement. The per-capita recession, which some economists expected might end in the June quarter, has dragged on.
The verdict certainly seems to be in that the government’s planned $1080 tax refund for low and middle income earners has fizzed – Crikey’s Bernard Keane today likens [$] the policy to 1080 poison, while the Nine newspapers’ Shane Wright showed on the weekend that the average refund per taxpayer was a barely noticeable $420. Everybody seems agreed that monetary policy is reaching its limits, and that the government should do more to stimulate the economy using the budget – as 13 out of 13 economists surveyed for The Conversation by Peter Martin indicated yesterday.
What will the government do? Pressure is building for some kind of stimulus package before the end of the year that will take in the need to boost investment, offer drought relief and provide extra funding for aged care. The very best solution to boost consumer spending, as Ross Gittins told Michelle Grattan in this valuable podcast episode, would be to raise the rate of Newstart. Treasurer Josh Frydenberg has flagged some form of investment allowance for business, but as shadow assistant minister for Treasury Andrew Leigh told Sky News Australia today: “The treasurer has done the absolute worst thing possible with that. He said he might do it in the next budget. In other words, he’s effectively saying to Australian firms ‘hold off on your investment, you’ll probably get a better deal next fiscal year’. That’s exactly the wrong policy. The treasurer ought to be implementing an investment allowance right now. Bring forward a budget update, and let’s get it done.”
The treasurer today discarded [$] his idea of rewriting the RBA’s mandate to keep inflation between 2 and 3 per cent – so what was all that about then? – and it is hard to escape the impression the policy locker is empty. Delivering next year’s budget surplus remains the hard-wired political objective, and hope is the rest of the strategy. But, as economist Stephen Kokoulas wrote recently, there are grounds for hope that the economy will perk up, forecasting an increase in private capital expenditure, government spending and household consumption. “For the first time in quite a while,” he wrote, “I am getting a bit excited about the upside for the economy in 2020.”
With the world’s biggest free-trade deal in the offing, a no-deal Brexit off the table, fears of an all-out US–China trade war easing, and local house prices recovering, it is at least possible to see the glass half-full.
“The people protesting over climate change are not quiet Australians. They are being loud because the government is quiet on the climate. Choosing not to do business with companies that threaten the health of the planet is everyone’s basic right. It’s a way to get business to do the right thing, because we are all accountable.”
“…Typically, the ABC was not interested in [the] facts as they were contrary to the sensational and dramatic effect of the program. It can only be assumed, therefore, that having the truth would have ruined the ABC agenda to show the racing industry in the worst possible light … As with a previous live sheep export story, the ABC surely hoped for an industry to be irreparably damaged.”
The Sydney broadcaster lashes out at the ABC in an op-ed today.
Highlight: Rosie Batty’s next fight
After the Morrison government announced another inquiry into the family courts, to be co-chaired by Pauline Hanson, advocates in the sector expressed concern it was a distraction. One of them was Rosie Batty.
“Businesses and consumers are free to make up their own minds about the merits of the campaign. A public advocacy campaign is therefore distinct from a secondary boycott – the latter aims not just to influence but also to hinder or prevent the supply or acquisition of goods or services.”
An excerpt from the 2015 Competition Policy Review, chaired by Melbourne Business School dean Ian Harper, which recommended against scrapping the secondary boycott exemptions for environmental and consumer protection campaigns, but not industrial action.
“In Peter Sheppard’s shoe shop, a woman of mature years is slumped sideways in a chair with her head on its armrest, sound asleep. Beside her a slightly younger woman, attended by a shop assistant, busily continues to try on shoes. Her unembarrassed physical proximity to the sleeper seems to indicate that they’re companions, or even sisters. To let yourself go out like a light in a public place! How wonderful! How free! I edge closer. Her upper lip, like mine, is an open fan of wrinkles. I would like to cover her gently with a cotton blanket.”
“Water whistleblowers will be protected, and obstructionist public officials sanctioned, under powers enabling the new Murray–Darling Basin inspector-general, Mick Keelty, to tackle corruption and overextraction in the nation’s largest river system.”
“Instantly identifiable from his curly hair, trademark long scarf, wide-brimmed hat, penchant for jelly babies and robotic dog called K-9, Tom Baker appeared in 172 episodes over the seven years of his tenure as Doctor Who. But in only one of his TARDIS-propelled adventures did he share the small screen with Gai Smith, a young Australian actress who subsequently became Gai Waterhouse, racehorse trainer and ongoing ornament to the antipodean track.”
Paddy Manning is contributing editor (politics) at The Monthly and has worked for the ABC, Fairfax, Crikey and The Australian. He is also the author of three books, including a recently updated unauthorised biography of Malcolm Turnbull, Born To Rule?
Australia’s agreement to quickly finalise the Regional Comprehensive Economic Partnership is a sliver of good news, not because hopes of a seamless market across the Indo-Pacific region will ever be realised, but because the deal could prove a bulwark against rising protectionism and is a shot in the arm for positive globalism. The Australian Financial Review reports [$] today that the partnership, which will be signed early next year, provides a framework for deeper political cooperation between the 15 member countries – and hopefully India, having negotiated this far, will decide to rejoin before too long. ANU economic professor Peter Drysdale, considered to be the intellectual...