Australia politics live: Chalmers to meet with backbenchers over stage-three tax cut concerns; OECD tips sluggish growth and interest rates cuts

Chalmers to meet with backbenchers over stage three tax-cut concerns

Jim Chalmers is also meeting with backbenchers today who have concerns over the stage-three tax cuts, after “input” from their communities. There are also concerns that not enough is being done for cost-of-living relief.

Chalmers says he is happy to meet with them:

Well, first of all the colleagues know that we are delivering relief already, you know, tens of billions of dollars in cost of living relief, to take some of the edge off these cost of living pressures without adding to inflation.

But it’s not unusual for me to confer with my parliamentary colleagues about our economic policies.

I do that in all kinds of different ways, small groups, individually, bigger groups. I do that all the time. And I think it’d be strange if I didn’t do that, frankly. And I respect my colleagues, I value their input. I look forward to catching up with them today.

Jim Chalmers will catch up with backbenchers today to discuss the stage-three tax cuts. Photograph: Lukas Coch/AAP

Key events

Paul Karp

Asked if he is prepared to give state treasurers a guarantee that the commonwealth will compensate states for any lost excise tax as a result of the Vanderstock high court decision, federal treasurer Jim Chalmers said he does “want to work with the states on ensuring they can raise the revenue that they need to fund the services that our people rely on”.

I don’t think that’s a matter of compensation,” Chalmers told reporters in Canberra.

I think it’s a matter of ensuring that they have the appropriate assurances about the tax bases that they rely on.”

This is going to be a really important part of the discussions that I’ll have with my state and territory counterparts tomorrow in Brisbane: making sure that they can raise the revenue that they need and we can continue to raise the revenue that we need to serve the people that we both represent.”

Chalmers said he was also aware that “part of the conversation is about the GST carve-up as well”.

He said:

It is neither unprecedented, nor especially surprising that state governments would like more money from the Commonwealth. That’s a story as old as federation itself. The state governments have done quite well out of the Albanese government in ways that we are proud of, because it means better funding for the people that we represent.

We’ve seen that in billions of extra dollars for housing, for example, or skills. Or in other areas. Now, as we have this important discussion about the GST carve-up, we need to recognise the pressures on both sense of budgets: commonwealth, and state, and territory. And not just the pressures on state budgets. That’s a really important thing.

And we need to recognise and remember that the GST deal, that was struck by Scott Morrison a few years ago, has blown out in costs by $27bn and so that’s not irrelevant to the conversation either. So I genuinely want to work closely with my state and territory counterparts.

I understand the pressures on their budgets, I’m asking them to understand the pressures on the commonwealth budget as well.”

Yesterday in the senate, WA Labor senator Fatima Payman made a statement which ended with her again calling for a permanent ceasefire in Gaza.

Payman was one of the first Labor MPs to call for a ceasefire, and the first term senator has not backed away from her views:

On 25 November we mark the start of 16 Days of Activism Against Gender-Based Violence.

This is an opportunity for all of us to stand against violence, but we need to remain committed to ending gender based violence every single day.

Violence against women continues here and abroad. Many women still live in fear within the confines of their homes, workplaces and communities.

In Australia, one in six women have experienced physical and/or sexual violence by a current or previous partner since the age of 15. I stand in solidarity with activists who are campaigning to end violence against women and children here in Australia and abroad.

In Afghanistan, my country of birth, girls are being denied education, in contradiction of Islamic and international laws and practices.

In Gaza, the cruel, relentless, and indiscriminate violence continues against women and children, in contradiction of human values. Our duty extends beyond borders, it transcends political divides and it demands a united front against the injustice suffered by all women around the world.

I call on the Taliban in Afghanistan to allow girls access to education.

I call on Israel and its government to end the indiscriminate killing of women in Gaza.

Winter is about to come to Gaza. A humanitarian catastrophe stares at the conscience of every one of us. We must act. I call for an immediate and permanent ceasefire in Gaza. I call for unimpeded access to humanitarian aid without restrictions. As Australians, let us condemn violence in all its forms and work tirelessly towards the safety and security of all women.

McCormack’s unusual dig at Queensland deputy premier for Canberra visit

Late last night as a Treasury amendment was being debated, the former deputy prime minister Michael McCormack had some thoughts about the delegation from Queensland who travelled to Canberra yesterday to argue for more infrastructure funding.

McCormack’s thoughts strayed to the deputy premier, Steven Miles, who led the delegation.

Seems he is a fan?

Today we had the unedifying spectacle of Steven Miles – handsome fellow that he is. He’s not an unedifying spectacle as far as looks and image are concerned. But he shouldn’t have needed to be in the federal parliament today. He should be in Queensland doing his job, but the Deputy Premier of Queensland has had to come to Canberra with at least four mayors of regional councils—Western Downs, Ipswich, Toowoomba and Isaac Regional—to argue the case for infrastructure for Queensland. It’s one of our powerhouse states—a state which should be helping to lead the economic recovery, but, no, he’s here arguing the toss about infrastructure with the member for Ballarat.

When your own Labor premiers, deputy premiers, treasurers, roads ministers and transport ministers are condemning their federal Labor colleague, you know things are crook in Tallarook. You really do. But not just Tallarook—everywhere around the nation.

Labor will come to the argument and say, ‘Yes, but they pork barrelled, and they had colour coded spreadsheets.’ Unfortunately, this mob has colour coded spreadsheets, but they’re all red. They’re all red for Labor, and so many projects out of envy, jealousy—I don’t know what you’d call it.

Queensland deputy premier Steven Miles (right) leads a delegation of regional mayors at Parliament House on Wednesday. Photograph: Mick Tsikas/AAP

Stage-three tax cuts ‘baked in’ to inflation forecasts, Chalmers says

And on the stage-three tax cuts? No changes there, says Jim Chalmers.

They are due to start rolling out next year – are they inflationary?

Chalmers:

The impact of these tax cuts, because they were legislated so long ago they have been factored into the baseline of the Reserve Bank’s inflation forecasts, indeed the Treasury’s inflation forecast as well, so they are baked in because they were legislated some time ago, when it comes to the Reserve Bank or the Treasury’s assessment of inflation.

As you heard the PM say yesterday, as I have said to you, probably countless times by now, we haven’t changed our position on stage three.

We do understand that people would like us to do that.

One of the reasons they’d like us to do that is because they want to make sure that we’re helping people on lower middle incomes as well and we are.

People on lower middle incomes are the primary focus of our tens of billions of dollars in cost of living help – we have found better and sooner ways to help people who are doing it toughest.

Q: So no change to this tax that’s going to be delivered next year?

Chalmers:

We haven’t changed our position. We found a better way and a sooner way to deliver cost-of-living help for people on low and middle incomes.

Anthony Albanese and Jim Chalmers in parliament. Photograph: Mike Bowers/The Guardian

Chalmers says states have ‘done really well out of’ commonwealth ahead of treasurers meeting

The states shouldn’t count on the “no state will be worse off” GST agreement Scott Morrison struck continuing for ever. That will be one of the discussions the nation’s treasurers will have in Brisbane tomorrow when they meet with Jim Chalmers.

But you know, the states wanting more money from the commonwealth isn’t exactly breaking news. Neither is the commonwealth saying it has it’s own pressures. Such is the tension at the heart of our constitution.

Chalmers:

I will always work with them (the states and territories) to do the best we can for the people that we represent. But that means recognising that there’s not just pressure on state budgets, there’s pressure on the commonwealth budget as well.

And we also need to recognise that the share of state revenue coming from the commonwealth has gone up, not down. Payments have gone up not down, there are other GST top ups being paid.

We’ve paid billions of extra dollars for housing and skills. And the states have done really well out of us. And that’s a good thing if it means better services for the people that we represent.

Chalmers warns of bumpy waters: ‘There is still a lot of uncertainty’

The treasurer is still warning of some bumpy waters ahead when it comes to the economy (or headwinds, as eco-types like to call them).

I heard Mathias Cormann on AM a moment ago talking about a soft landing in the global economy that is now assumed but it’s not assured.

There’s a lot of uncertainty in China. Around the world. We’ve got two conflicts, one in the Middle East, one in Europe.

We’ve got uncertainty at home when it comes to the way that these interest rate rises are biting in our economy.

So there’s still a lot of uncertainty. The assurance I give to all of your listeners, is that we will always carefully calibrate our economic policy and our budget strategy to make sure that we can deliver for people in a way that recognises that inflation is still the defining challenge in our economy, and that’s why it’s pleasing and encouraging to see the ABS and Deloitte and the OECD and others saying that our policies are helping

Chalmers to meet with backbenchers over stage three tax-cut concerns

Jim Chalmers is also meeting with backbenchers today who have concerns over the stage-three tax cuts, after “input” from their communities. There are also concerns that not enough is being done for cost-of-living relief.

Chalmers says he is happy to meet with them:

Well, first of all the colleagues know that we are delivering relief already, you know, tens of billions of dollars in cost of living relief, to take some of the edge off these cost of living pressures without adding to inflation.

But it’s not unusual for me to confer with my parliamentary colleagues about our economic policies.

I do that in all kinds of different ways, small groups, individually, bigger groups. I do that all the time. And I think it’d be strange if I didn’t do that, frankly. And I respect my colleagues, I value their input. I look forward to catching up with them today.

Jim Chalmers will catch up with backbenchers today to discuss the stage-three tax cuts. Photograph: Lukas Coch/AAP

Chalmers not getting ‘carried away’ but fall in inflation ‘very welcome’

Jim Chalmers says the government isn’t getting too excited by the October inflation figure that showed the annual inflation rate fell from 5.4% to 4.9%. He said people are still struggling and the inflation dragon still hasn’t been completely tamed.

But there are good indications it’s on the right path:

We don’t get too carried away by the monthly figures. Because we understand that inflation is still too high and those numbers bounce around a bit. But it remains the case that what we saw yesterday was a very substantial and a very welcome moderation in inflation. And one of the encouraging parts of that is that the ABS has made it very clear as have Westpac as have others who commented on this in the last 24 hours is that the government’s policies are putting downward pressure on inflation.

Don’t expect a surplus in mid-year budget update, Chalmers says

The treasurer is asked about whether there will be a second budget surplus forecast – the Commonwealth bank’s analysts have predicted there would be, because of strong tax collections (more people working means more income tax, for instance).

Jim Chalmers says hmmmmm, maybe.

People shouldn’t anticipate in the mid year update that I release at this stage the week after next, people shouldn’t anticipate that we will print a second surplus in that mid year budget update.

They should expect to see a really substantial improvement in the bottom line. But we’re not yet forecasting that second surplus.

(A reminder that a budget surplus is just money the government isn’t spending on you)

Chalmers: ‘We are making some welcome progress in the fight against inflation’

Is Jim Chalmers confident that interest rates could fall from next year?

He tells ABC radio RN Breakfast he doesn’t make interest rate predictions.

My job is to focus on this fight against inflation. And we saw overnight from the OECD, we saw from Deloitte Access Economics, we saw in the Bureau of Statistics data which came out yesterday, that we are making some welcome progress in the fight against inflation and that will determine the future directory trajectory of interest rates

There is some irony in it being former Coalition finance minister Mathias Cormann, now head of the OECD, delivering the news that the think tank believes inflation has peaked and there will need to be interest rate cuts in order to head off a sluggish economy.

If interest rates are cut from mid-next year, that is in line with where treasurer Jim Chalmers had first predicted. More recent predictions had inflation sticking around until 2025, with no interest rate relief and potentially more raises.

That is still on the cards because no one knows what is actually going to happen. The RBA is still warning of future interest rate increases and Chalmers is telling people to strap in.

But still, today’s news from the OECD is going to give the government a bit of a lift on the inflation front.

Large parts of Australia facing an increased bushfire risk

Despite widespread heavy rain and floods, large areas of all states have been placed on heightened alert, with the release of the Seasonal Bushfire Outlook for Summer 2023.

Significant rain over the past few years has in fact led to more vegetation growth and difficult conditions to complete hazard reduction burns, according to the National Council for fire and emergency services.

The conditions will continue to dry out fuel loads in areas across Australia, including some affected during the 2019-20 Black Summer season, increasing the risk of large bush and grassfires.

Emergency management minister Murray Watt says the outlook is a clear reminder all Australians need to be prepared.

Compared with the spring outlook, more capital cities are facing increased risk and of course a lot of Aussies moved to new areas post-COVID, which means larger populations that may be less familiar with bushfire and heatwave preparation.

I urge people to be aware of the local risk, update their bushfire plans and pack emergency and evacuation kits.

A water-bombing helicopter near the town of Wallangarra in Queensland earlier this month as crews battled bushfires. Photograph: Darren England/AAP

There have been concerns raised about Australia’s privacy act for some time – and this story from Josh Taylor points to why some people want it reformed.

Good morning

A very big thank you to Martin for starting us off this morning – one of the last sitting days of the year.

The Senate has another week by itself and the house has at least one more day scheduled. We sat at least because there is every chance shenanigans are played and we all end up here longer than any of us want.

But for now, we have made it to the end of the last joint sitting week. That’s an achievement. Kind of.

It’s a four coffee morning. You have Amy Remeikis with you. Ready? Let’s get into it.

Natasha May

Doctors call on attorney generals to raise the age of criminal responsibility

The peak body for Australian physicians is calling for a national agreement to raise the age of criminal responsibility to at least 14.

The Royal Australasian College of Physicians is urging the first law officers from all governments to agree to raise the minimum age of criminal responsibility when they meet tomorrow, to protect the health and wellbeing of young Australians.

The standing council of attorneys general meeting, to take place on Friday, is scheduled to include an update from all commonwealth, state, and territory attorneys general on the minimum age of criminal responsibility in their jurisdiction.

Paediatrician and president of the RACP, Dr Jacqueline Small, said the meeting was a “historic opportunity” to modernise Australia’s criminal justice system and improve health outcomes of Australian children and young people”:

Some jurisdictions have made a step in the right direction. We praise the NT and the ACT especially, noting they have more to do, and the leadership from the Commonwealth.

Aboriginal and Torres Strait Islander children are disproportionately represented in the criminal justice system, reflecting the ongoing health inequities they experience and reinforcing cycles of intergenerational trauma.

This is a moment for optimism. Now is the time for governments across Australia to work together and show that they value the health and wellbeing of young Australians.

Wrap-around social supports and community-supported alternatives can lead to better outcomes than putting our children in the criminal justice system.

Daniel Hurst

Aukus export controls bill to be introduced to parliament

The federal government will overhaul Australia’s export control laws, introducing a bill to parliament today to smooth the way for the Aukus pact.

Under existing laws, Australia regulates the supply of military and dual-use goods and technologies to foreign nationals or entities overseas.

The proposed new bill is expected to extend the existing controls to include the supply of these items to foreign persons or entities within Australia, and between entities overseas. This is believed to be part of an attempt to reassure the US and the UK about Australia’s commitment to protecting defence technology.

The bill is expected to regulate the provision of services related to military items (such as training in the use of munitions) to foreign nationals and entities.

But the government says the bill will also provide a national exemption from the licence requirements for the trade of defence goods or technologies with the US and the UK – the two countries that together with Australia have formed the Aukus partnership to collaborate on advanced defence capabilities.

Government sources said export applications to the US and UK accounted for 900 of the 3,000 applications assessed each year, so the national exemptions would mean almost a third of these applications were no longer required.

By value, about $5bn worth of exports each year are set to gain this country-level exemption.

The defence minister, Richard Marles, said the legislation would “provide defence industry, science and research sectors with greater opportunities for collaboration and trade with our Aukus partners without the burdensome red tape”:

Earlier this week we announced the allocation of Commonwealth supported places for graduates in STEM courses, today we are announcing additional legislation which will remove red tape for defence industry. As we continue to deliver on the pathway to acquire nuclear-powered submarines, the Albanese government is working for Australians by delivering in practical ways for jobs and industry.

Later today Marles is due to fly out of Australia bound for California where the US defence secretary, Lloyd Austin, will host a meeting of the Aukus defence ministers. The UK’s defence secretary, Grant Shapps, is also due to attend the talks on Friday.

Martin Farrer

OECD suggestions for managing finances cite ageing population and climate transition

The OECD also revisited its suggestions for improving the nation’s finances as it manages an ageing population and a climate transition, as outlined in a survey last month.

Both spending savings were suggested, such as more patient care in primary care settings and preventive health policies, as well as tax reform.

Squeezing more out of the goods and services tax and further limiting concessions on superannuation were highlighted as suitable revenue raising options.

The role of immigration in the labour market was also mentioned, with Australia urged to consider making its skilled migrant intake more responsive to the changing needs of industry.

The treasurer, Jim Chalmers, said Australia was facing challenging global circumstances from a position of strength, with a resilient labour market and good prices for its exports:

The Albanese government’s economic agenda aligns with key OECD recommendations for advanced economies, including investing in our people and their skills, broadening and deepening our industrial base, and embracing the opportunities of the net zero transformation and digitalisation.

The report also says the federal government’s budget policy will have a “slightly contractionary influence on economic growth” during the next two years.

Australia’s economy heading for sluggish year, OECD says

Martin Farrer

Australia is heading into a sluggish year for economic growth that the Organisation for Economic Co-operation and Development warns could be even more muted if inflation proves stubborn or China’s economy slumps, Australian Associated Press reports.

The OECD’s most up-to-date projections for Australia’s economic activity are largely unchanged from earlier forecasts, with GDP growth tipped to slow from 1.9% in 2023 to 1.4% in 2024.

In 2025 the economy is expected to recover and expand 2.1%.

The OECD also notes that interest rates are projected to hold at 4.35% and stay at that restrictive level until inflation starts coming down convincingly, with cuts expected in the third quarter of 2024.

The thinktank expects higher interest rates and inflation to weigh on housing investment as well as on spending for households without big savings buffers:

Continued strong working-age population growth and higher exports as foreign student arrivals further recover will partly offset these headwinds.

Inflation has already been moderating and the OECD expects it to return to the Reserve Bank of Australia’s two-three target band by early 2025, a little earlier than the central bank’s own late-2025 forecast:

More persistent inflationary pressures or a sharper slowdown in China than expected pose downside risks to GDP growth.

Shoppers during Black Friday sales in Melbourne last week. Photograph: Con Chronis/AAP

Welcome

Martin Farrer

Good morning and welcome to our rolling coverage of the day in politics – and more besides. I’m Martin Farrer, kicking things off with our top overnight stories before my colleague Amy Remeikis picks up the ball shortly.

As delegates gather in Dubai for the start of the Cop28 climate summit today, the Albanese government will attempt to get on to the front foot in the debate after years of Coalition denial. Chris Bowen will tell MPs today that global heating threatens political instability in the Pacific region and is a threat to national security, as well as posing an existential danger to island nations. We’ll have all the main news from Dubai as it happens.

The Albanese government is coming under increasing pressure from Labor members to take a stronger line on Gaza with about 40 party branches in New South Wales passing motions demanding a full ceasefire. Ministers indicated yesterday that they would support further extensions to the temporary truce between Israel and Hamas to allow the release of hostages and delivery of “much-needed” aid to Gaza. But a party insider says the feeling among grassroots supporters is for a more emphatic position. It comes as the Sydney Theatre Company has apologised after a Jewish board member resigned over an on-stage pro-Palestinian protest by three of its actors.

Minister might also be grappling with a slowing economy judging by the overnight verdict of the Organisation for Economic Co-operation and Development which the country is facing uncertain growth. And it says it could get worse if inflation proves stubborn or China’s economy slumps. The thinktank’s most up-to-date projections for Australia tip GDP growth to slow from 1.9% in 2023 to 1.4% in 2024, notwithstanding those downside risks.

More coming up soon on that – and on legislation to be introduced today that will change export controls on defence technology in order to smooth the way for Aukus.

source: theguardian.com