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From today’s media coverage there seems to be no let up by various papers and (now) the Opposition on questioning not only Gillard’s past behaviour but increasingly also her recent decisions and wild misogynistic accusations and, now, her (and Bowen’s) incorrect accusation that Abbott fluffed his interview with Yudhoyono. There are indications that this media attention is not going to stop any time soon – see in particular the Editorial below from today’s The Australian. But while that paper is taking the lead, it is significant also that The Age has continued last week-end’s extensive coverage with a front page lead on “missing” (sic) files regarding Gillard’s earlier activities.

The civil action taken against Thomson by FWA and the indication of criminal action against him by NSW police have opened a challenging front not only for him but for Gillard too.

Importantly also is the now clear mishandling of the Ashby case by Attorney General Roxon and, in particular, her misleading of Parliament.

Other important developments include the indication that the MYEFO will be published next week, well before its normal time, and the decision to make two statutory appointments to the FWA. One interpretation of these decisions is that an election announcement may be close.

Des Moore

No need to be coy, Ms Gillard

Editorial, The Australian, October 17, 2012

THE question of whether the procurement of prostitutes constitutes sexist or misogynist behaviour is widely contested in feminist circles. Yet there is, to put it mildly, a hint of hypocrisy in Julia Gillard's forceful condemnation of Tony Abbott last week in view of her silence on former Labor MP Craig Thomson's alleged use of Health Services Union funds for sexual services.

As Fair Work Australia's statement of claim against Mr Thomson lodged in the Federal Court says, "no reasonable person" could have believed that the use of his union credit card "to incur escort services was in the best interests of the HSU". The same goes for the alleged expenditure of union members' funds on airfares for his family and his election campaign.

While allowing Mr Thomson the presumption of innocence, the Prime Minister should have welcomed the fact that the matters are to be tested in court, and dissociated her government from the discredited union.

Ms Gillard may come to regret hiding behind a counterfeit smokescreen of sub judice. As with her prevarication over the behaviour of former Speaker Peter Slipper, Ms Gillard runs the risk that by failing to express abhorrence for alleged misdeeds they will come back to bite her. The Prime Minister says she will not "war-game a lot of hypothetical questions about a matter that is before the courts". Mr Thomson, however, made a mockery of her reluctance yesterday by giving an extensive television interview on Sky News. And Trade Minister Craig Emerson tried, without much conviction, to turn the issue on the Opposition Leader, accusing Mr Abbott of acting as "judge and jury". The problem is that Mr Thomson is the government's problem, not Mr Abbott's. Fair Work Australia's legal action and the issues raised in its 200-page statement of claim make the issue fair game for political debate and squarely in the public interest.

Ms Gillard consistently expressed "full confidence" in Mr Thomson after the allegations against him arose. When that position became untenable she encouraged him to move to the crossbenches because "a line has been crossed". It is now untenable for Ms Gillard to keep silent about a shameful issue of probity at the heart of the labour movement. She and her ministers won't gag this debate.

Police will charge 'more than one' over HSU graft

Ean Higgins and Milanda Rout, The Australian, October 17, 2012

NSW police have said for the first time that they will lay criminal charges, possibly before Christmas, over allegations of systemic corruption in the Health Services Union's NSW branch.

They have also confirmed that independent MP Craig Thomson remains a subject of inquiries.

The senior officer overseeing Strike Force Carnarvon, Detective Superintendent Col Dyson, told The Australian that more than one person would be charged over the original allegations levelled by HSU national secretary Kathy Jackson.

Mr Dyson's revelations came as Mr Thomson yesterday hit the airwaves to again deny any wrongdoing following Fair Work Australia's levelling of civil charges against him in a Federal Court application seeking fines and compensation potentially involving hundreds of thousands of dollars.

The Australian has learned that FWA may issue subpoenas to determine the identity of a mystery individual on the NSW central coast whom Mr Thomson rang on some of the nights he allegedly spent with prostitutes.

FWA's statement of claim submitted to the Federal Court on Monday seeking hundreds

of thousands of dollars in fines and compensation from Mr Thomson lists three occasions when, in the evening, he rang the number from hotels when he is also alleged to have rung escort services.

Mr Thomson yesterday dismissed the FWA allegations that he rorted HSU national union funds for prostitutes and other personal projects as fabrications, saying: "I am absolutely confident that this civil action taken by FWA will fall over."

He said he had no knowledge of impending criminal charges from separate investigations by Victoria and NSW police.

NSW police launched Strike Force Carnarvon late last year after Ms Jackson alleged, among other claims, that Mr Thomson, when he was HSU NSW assistant general secretary, took secret commissions in the form of American Express credit cards on the account of graphic designer John Gilleland, who had a long-running lucrative contract with the union.

Mr Thomson and Mr Gilleland strenuously deny the allegations.

Speaking of Strike Force Carnarvon, Mr Thomson told Sky News: "There is then a further NSW investigation, but I think we have seen in the last few weeks, where that is focused, and who that is focused on."

Mr Dyson told The Australian that "more than one person will be charged in relation to the broader investigation", although such arrests could be made sequentially.

Mr Thomson refused NSW police requests to be interviewed over the Carnarvon investigation.

Mr Dyson said: "No person of interest has been eliminated."

He also said, when asked about Mr Thomson: "This investigation goes back to the mid- to late 1990s."

This covers the period when Mr Thomson was HSU NSW assistant general secretary, from 1999 to 2002, after which he moved to Victoria as national secretary before entering parliament in 2007 as a Labor member.

Mr Thomson is also the subject of an ongoing Victorian police investigation that is examining whether his alleged misspending of union funds constituted fraud or another crime.

Opposition legal affairs spokesman George Brandis yesterday predicted Mr Thomson might soon face criminal charges in the wake of the detailed FWA civil claims. "It would be very surprising if in view of these facts . . . a criminal charge isn't long in coming," Senator Brandis said.

His comments were attacked by frontbencher Craig Emerson. "For a shadow attorney-general to say that criminal charges can't be far away is frankly outrageous, and I condemn it completely," Dr Emerson said.

He said such comments denied Mr Thomson "any sense of natural justice".

The Australian understands Victoria Police still have not finished their year-long investigation into Mr Thomson and any charges are not likely for at least some weeks.

It is believed that the former Labor MP, now an independent, is still the main focus of the HSU fraud inquiry in Victoria, rather than Ms Jackson, against whom factional adversaries brought allegations that she rejects.

Mr Thomson also rejected claims of possible bankruptcy yesterday - despite earlier taking hundreds of thousands of dollars from the ALP to help pay for his legal fees - saying it is "not something we have looked at" and he planned to fight the FWA charges.

He also reiterated that he was no longer receiving money from the ALP.

"I will be meeting my own costs in relation to this matter," he said.

Gillard files missing, say lawyers

The Age, October 17, 2012, Mark Baker

A FILE detailing Julia Gillard’s role in helping set up a union slush fund from which her former boyfriend stole hundreds of thousands of dollars has disappeared.

Law firm Slater & Gordon yesterday said it could find no documents relating to the work done by Ms Gillard — a former salaried partner of the firm — in establishing the Australian Workers Union Workplace Reform Association in 1992.

Police believe the association was used by Ms Gillard’s former boyfriend and senior AWU official Bruce Wilson to steal more than $400,000, including about $100,000 which helped fund the purchase of a Fitzroy unit bought with Ms Gillard’s professional assistance.

Slater & Gordon managing director Andrew Grech told The Age last night that the firm had not been able to locate any documents relating to the controversial transaction.

‘‘We have not been able to identify any such documents following extensive searches of our archival records,’’ Mr Grech said.

‘‘If there are such documents, we don’t have them. They could have been misplaced, or lost. I simply don’t know.’’

Ms Gillard resigned from Slater & Gordon after being challenged in September 1995 about her role in setting up the association without consulting senior colleagues and without opening a formal file on the firm’s computer system. She has repeatedly denied any wrongdoing.

Ms Gillard did, however, keep an unofficial file detailing the work which was found in a cabinet in her office after she initially claimed to have sent it to an undisclosed third party.

During a meeting with then senior partner Peter Gordon and general manager Geoff Shaw, Ms Gillard was shown and acknowledged the file, described in a transcript released two months ago as being ‘‘exactly right in front of’’ her.

Confirmation that the file is missing comes a day after the federal opposition called on Slater & Gordon to make public all records relating to the formation of the association to see whether a fresh police investigation was warranted.

Shadow attorney-general George Brandis claimed Ms Gillard may have broken the law by vouching for the bona fides of an organisation she later confirmed was a union election slush fund.

Registration documents prepared with her advice declared that the association was formed for the purpose of ‘‘development of changes to work to achieve safe workplaces’’.

But Ms Gillard confirmed at a media conference in August that she had told Mr Gordon and Mr Shaw that the association was a ‘‘slush fund’’ for union election campaigning.

A report in last Saturday’s Age revealed that the association had only been registered after Ms Gillard vouched for its legitimacy to West Australian authorities.

A copy of a letter she wrote to answer objections raised by the WA Corporate Affairs Commission about the association’s union connections is believed to have been contained in the missing file.

In response to a series of questions from The Age, Mr Grech said Slater & Gordon had been unable to find any documents about the forming of association — including any letter sent to the Corporate Affairs Commission.

‘‘These matters relate to events occurring more than 18 years ago. In the ordinary course of events client files are destroyed after seven years unless there is some regulatory or other reason not to do so,’’ Mr Grech said.

For the past five weeks lawyers representing Ralph Blewitt, the former AWU state secretary and close associate of Bruce Wilson who registered the Workplace Reform Association, have been seeking access to records held by Slater & Gordon.

In a letter dated September 24, partner Leon Zwier of Arnold Bloch Leibler, representing Slaters, challenged Mr Blewitt’s claim.

‘‘It is not sufficient to claim that any documents we hold concerning the AWU Workplace Reform Association belong to your client simply because he was at some point an office holder of the association,’’ Mr Zwier wrote.

In reply, lawyers Galbally Rolfe, representing Mr Blewitt, said: ‘‘We note your admission on behalf of Slater & Gordon that they hold documents concerning the AWU Workplace Reform Association.’’

Mr Grech rejected as ‘‘highly defamatory and wrong’’ claims the firm was withholding information from former clients.

Julia Gillard staffer 'did not act alone'

Mark Schliebs and Joe Kelly, The Australian, October 17, 2012

DUMPED Labor minister Robert McClelland finds it hard to believe that only a junior member of Julia Gillard's office helped spark a chain of events that led to this year's violent Australia Day protest.

The former attorney-general also said the incident "thwarted" plans to hold a referendum on constitutional recognition of indigenous people at the next election.

He said a more serious inquiry should have been held into the circumstances leading up to the "outrageous" violence and the involvement of others in the Prime Minister's office.

Mr McClelland did not believe media adviser Tony Hodges acted alone in providing information to protesters.

Mr Hodges was forced to resign after it emerged he had told protesters that Tony Abbott had said the Aboriginal tent embassy in Canberra should be dismantled. This led to an angry confrontation in which Ms Gillard and the Opposition Leader had to be shielded from the protesters by police.

"I personally don't think a relatively junior member of a media staff would have phoned up . . . without higher authority," he told the annual conference of the Police Association of South Australia in Adelaide yesterday

"I'm not saying it went to the highest level, but I think from higher in the office.

"I think a much more detailed inquiry should have occurred, both on whether there was any authorisation and whether there was a culture -- even if authorisation hadn't occurred, which I doubt -- such that a relatively junior officer thought that sort of conduct was appropriate."

An Australian Federal Police investigation found no evidence of criminal offences in the passing on of the information.

The Prime Minister's office declined to comment yesterday, but Ms Gillard has always said Mr Hodges acted alone.

Mr McClelland was emergency management minister at the time, and said he was at the same Canberra restaurant as Ms Gillard when the protests erupted.

The ugly scenes had given the public an inaccurate impression of indigenous people, he said.

"We will not see at the next election a referendum to recognise indigenous Australians in our constitution. I think that event, as much as any event, has thwarted that because of the bad look.

"I was outraged by that because I thought the Aboriginal protesters were duped, to induce them to do it."

Mr Hodges has conceded that he told Canberra union activist Kim Sattler that Mr Abbott said it was time to "move on" from the tent embassy and disclosed the Opposition Leader's attendance at a nearby function.

This information was relayed to protesters who believed Mr Abbott had called for the tent embassy to be levelled, and protesters cornered him and Ms Gillard at The Lobby Restaurant where they were presenting the inaugural national emergency medals.

But AFP documents released under Freedom of Information laws in July suggested that the "situation may have been as a result of the lack of foresight by Mr Hodges".

The documents concluded that the information passed on by Mr Hodges was "in the public domain prior to his phone conversation with Ms Sattler" and that he accurately conveyed Mr Abbott's comments.

May Abbott continue, says Gillard

What's in a name? That which we call a misogynist Nancy Reagan who goes the biff

The Age, October 17, 2012, Michelle Grattan, Political editor of The Age

JULIA Gillard was put on the spot at a youth leadership forum yesterday when she was asked whether she disliked Tony Abbott.

The Prime Minister admitted it was a hard question - then answered by saying: ''I hope he is Leader of the Opposition for the rest of his life.''

The question came from the forum moderator after a woman quizzed Ms Gillard about her experience as a female politician.

Ms Gillard said she did not spend a lot of time thinking about Mr Abbott. ''I don't bear him any ill will.''

She said that Australia was at the mid-point of change in regard to women in politics. ''We still see examples of sexism.''

Ms Gillard said the question about whether being a woman had been difficult for her was ''a bit of a topical one''.

She said there had been some examples of sexism in our political dialogue recently and ''I decided to call it out'' last week. She admitted she had not expected the speech would be talked about on social media in India.

Ms Gillard wanted to see women reach 50:50 representation in Parliament and our political dialogue to be ''gender blind''.

Caught out: the proof that Nicola Roxon did try to shut down James Ashby case

Dennis Shanahan and Milanda Rout, The Australian, October 17, 2012

NICOLA Roxon moved to "strike out" James Ashby's claims of sexual harassment against the former Speaker Peter Slipper, as well as seeking to have the case declared an "abuse of process", after being briefed on the lurid sex texts and seeking to use them to sack the government employee.

The Attorney-General has previously denied the government sought to strike out Mr Ashby's claims against Mr Slipper and the commonwealth to keep the lurid exchanges confidential, and told parliament it had only used the secret court evidence in its defence against the staffer's claims of sexual harassment. On June 15 Ms Roxon said at a press conference: "We aren't bringing a strikeout application; Mr Slipper is."

Last night the Senate estimates committee on legal affairs heard allegations Ms Roxon was briefed on the contents of the "vast bulk" of the texts four days before she instructed the Australian Government Solicitor to seek to have Mr Ashby's claim against the government struck out without a hearing, and to use the still-confidential sexually explicit texts to sack Mr Ashby. It had previously been known that the government sought to have the Ashby case declared an abuse of process and vexatious. It is now known that it also sought alternatively to have the proceedings permanently stayed, or struck out.

Mr Ashby has since been paid $50,000 in damages from the commonwealth to settle his claim of sexual harassment and still has a civil case against Mr Slipper.

Mr Slipper stood aside as Speaker in April when Mr Ashby's claim was made in court and resigned last week when the full texts, including sexually suggestive and degrading comments, were made public.

His fate became the centre of parliamentary debate last week when the opposition moved to have him sacked because of the sexually explicit texts and the Gillard government defended him.

Estimates hearings last night revealed Ms Roxon was briefed as Attorney-General on the contents of the lurid texts - which have since been condemned by her and Julia Gillard - as early as June 9 and four days before the commonwealth asked the Federal Court to judge Mr Ashby's case as an "abuse of process", to have it struck out and to be able to break the confidentiality agreement of the court documents to act on Mr Ashby's "employment".

Opposition legal affairs spokesman George Brandis told the Senate last night that it was unbelievable that the government Solicitor and Attorney-General's Department had sought the "extremely radical step" of striking out Mr Ashby's claim while not in possession of the full facts of the case.

Ms Roxon has specifically denied the commonwealth sought to strike out the Ashby claim and told parliament the texts were used only for the legal purposes of the case involving Mr Ashby and Mr Slipper.

But court documents reveal Ms Roxon sought on June 13 to strike out the staffer's claim and to be allowed to use the lurid texts to remove Mr Ashby as an employee before his case was heard.

Ms Roxon has refused to reveal when she knew the detail of the denigrating texts of Mr Slipper's messages despite the government digging in to defend Mr Slipper's position as Speaker.

Last night, the deputy secretary of the Attorney-General's Department, David Fredericks, said Ms Roxon attended four meetings and teleconferences about the Slipper-Ashby case on June 9, June 13, August 14 and September 27.

"There were four occasions where a conference or a teleconference was held (with) officers of the AGS, officers of the AGD and counsel and the Attorney," he said.

Senator Brandis quizzed the secretary of the Attorney-General's Department, Roger Wilkins, on whether Ms Roxon was briefed on the text messages at the meeting on June 9.

"May we take it that Ms Roxon talks about having been briefed on the text messages prior to the applications being filed and that must have happened at the conference on the 9th of June?" Senator Brandis asked.

"We can take that on notice, Senator," Mr Wilkins replied. "That's probably a question that might be better addressed to the A-G but let's assume what you are saying is correct."

After a few more moments, he then stated: "I don't think we should assume that, actually, at this point."

Mr Fredericks said it was "impossible" to have knowledge of all the text messages.

"The number of SMS text messages that was on that CD-rom was 15,400 text messages. I certainly, speaking on my own behalf, as at the 9th of June, and as at the 13th of June, have no knowledge of all of the 15,400 text messages," he said.

"We knew we had a record of the text messages, but given the volume it was impossible to have knowledge of all of the text messages."

Senator Brandis said this was an "extraordinary comment".

"You are telling me, Mr Fredericks, that the commonwealth commenced a summary judgment application in relation to material supplied by an applicant as particulars of (Ashby's) claim and it didn't even know what all that material was that's an abuse of process," Senator Brandis said.

Mr Fredericks denied Senator Brandis's assertion, saying there was "sufficient" knowledge in the AGS of the texts to support the strike-out application.

Senator Brandis said Mr Ashby's sexual harassment was "largely based on text messages, so it was extraordinary that the commonwealth of Australia brought a strike-out application without having analysed the particulars".

"It would not be possible and it would not be proper for the commonwealth to form a view that the case should be struck out as an abuse of process," he said.

The secretary of the Attorney-General's Department, Roger Wilkins, said his office looked at the "vast bulk of the text messages" and he would take the question about whether every single text message was examined on notice.

Mr Wilkins later clarified the department's "methodology" in looking at the "vast bulk" of the text messages.

"Prior to the filing of the abuse of process application, I am advised that the following text review had taken place; the entire communication chain between Mr Ashby and Mr Slipper . . . Mr Ashby and Ms (Karen Doane) . . . were looked at," he said.

"All communications between the period December 2011 and April 2012 were looked at."

Australian Government Solicitor chief executive Ian Govey said: "I am confident that sufficient work was done by my colleagues to justify the position that was taken in the proceedings."

Bad choices come home to roost

Editorial, AFR 17 Oct 2012,

Attorney-General Nicola Roxon has twisted herself into knots over the past week in trying to explain her involvement in the cases against former speaker Peter Slipper. Ms Roxon has acknowledged that she knew of the general nature of sexually explicit texts from Mr Slipper to his former staff member, James Ashby, in May. On one hand she stated publicly that she believed the Ashby case against the Commonwealth was vexatious and an abuse of process, but the Attornery-General also claims that because the sexual harassment claim Mr Ashby brought against Mr Slipper is sub judice, she cannot comment on its merits. The Attorney-General looks to be applying a double standard, promoting her view of Mr Ashby’s cases for political purposes when it suits but then hiding behind the sub judice defence when it doesn’t suit. Her actions clearly suggest she never expected the texts to become public.

Prime Minister Julia Gillard would not have been forced into the shabby deal to promote Mr Slipper to the speaker’s job if she had not promised independent Tasmanian MP Andrew Wilkie that she would introduce poker machines gambling limits to guarantee his support for her minority government, a promise she subsequently reneged on. The question now is which other ministers knew of the lewd and inappropriate text messages and why wiser heads in the government did not seek to remove Mr Slipper as speaker as a matter of principle.

The Australian Financial Review

Truth lost as Julia Gillard targets asylum talks

Dennis Shanahan, Political editor, The Australian, October 17, 2012

TONY Abbott raised the Coalition's border-protection policies in his face-to-face talks with Indonesian President Susilo Bambang Yudhoyono, including the interception of people-smuggler boats.

The controversial Coalition policy of turning back boats to Indonesian waters was discussed in detail at lower-level talks after the leaders' meeting.

Julia Gillard and Immigration Minister Chris Bowen yesterday accused the Opposition Leader of lacking "the guts" to talk to Dr Yudhoyono in person about his signature policy of turning back asylum-seeker boats in Indonesian waters.

The Australian understands that during the meeting between Mr Abbott and Dr Yudhoyono in the Indonesian presidential palace on Monday, it was agreed the full range of options for dealing with people-smuggler boats would be discussed in depth at a ministerial level.

The high-level discussions included references to the latest boat arrivals in Australia from Indonesia over the weekend, which continued to break records.

The Prime Minister, who is in India on a state visit, yesterday leapt on initial reports suggesting Mr Abbott had failed to discuss turning back the boats during his rare meeting with Dr Yudhoyono.

"This is a very cowardly approach from Mr Abbott," Ms Gillard said. "Firstly, looking at it through domestic eyes, Australian eyes, what it means is . . . that Mr Abbott does not have the guts to raise with international leaders issues that he says are important.

"So he beats his chest at home but when he is overseas he doesn't have the guts to raise them."

The Immigration Minister added to the attack, accusing the Opposition Leader of being "a lion in Canberra and a mouse in Indonesia".

"He is simply not willing to try and talk to the President of Indonesia about this policy, which he beats his chest about whenever he's got TV cameras in front of him in Australia, but won't even raise it with the people who are the key to making it work," Mr Bowen said.

He claimed Mr Abbott failed to raise the issue of turning back the boats with Dr Yudhoyono because he knew the Indonesians disapproved of the policy.

Mr Abbott's Jakarta visit has evolved into a political controversy, with the government and Coalition at odds over the Coalition's policy to "turn back the boats".

The opposition's immigration spokesman, Scott Morrison, said Coalition frontbenchers had had meetings with Dr Yudhoyono, Foreign Minister Marty Natalegawa, other ministers and officials.

"People-smuggling, as the (Indonesian) Foreign Minister said, was discussed at that meeting and it was intended and flagged that we would then go into the detail of our policies about that when we met with the Foreign Minister in the afternoon, which Julie (Bishop) and I did," he said. Mr Morrison said Mr Abbott and the Coalition were not about to be lectured "from the government on diplomacy or border protection".

"This is a government that hasn't stood up to people-smugglers so they can hardly be running around offering lectures on this," he said from Jakarta yesterday.

"We've had almost an unprecedented opportunity while Tony and myself and Julie and John Cobb have been up here over the last four or so days."

Mr Abbott, Mr Morrison, Ms Bishop, the foreign affairs spokeswoman, and Mr Cobb, the agriculture spokesman, had a series of meetings with the Indonesian leadership, ministers and their officials.

Ms Bishop told The Australian yesterday: "I'm not going to make the mistake of revealing the content of private discussions, but the talks with President Yudhoyono were broad-ranging and, as agreed, there were detailed talks between me, Scott Morrison and Foreign Minister Natalegawa.

"At the ministerial-level talks we took the opportunity to brief Foreign Minister Natalegawa of our whole suite of border protection measures."

On Monday, Dr Natalegawa said the meeting with Ms Bishop had been useful because "we had a chance to learn more deeply about the issues that have been discussed with Mr President beforehand, whether bilateral relations between Indonesia and Australia, development in the region, and appreciation from Australia on Indonesia's role in the region.

"The meeting especially gave a chance to discuss in detail Indonesian-Australian efforts in handling the people-smuggling issue. We have heard carefully the Coalition's policy on this issue. I think the result is (we are) more informed about the Coalition policies on this issue."

Senior Liberal senator Eric Abetz said that it made sense for Mr Abbott to discuss the "broad umbrella issues" with the President while the finer details were left for Mr Morrison to discuss in later meetings with Indonesian ministers.

Ms Gillard and some of her ministers had accused Mr Abbott of being gutless and cowardly in not raising the Coalition's policy on people-smuggling of turning boats back to Indonesia when Mr Abbott met the Indonesian President in Darwin in April.

Speaking in New Delhi, Ms Gillard rejected suggestions that Mr Abbott's access to high-ranking Indonesia government officials, including Dr Yudhoyono, meant the Indonesians were anticipating a Coalition victory at the federal election in 2013.

"It's absolutely routine," she said.

Budget update to beat gloom

The Age October 17, 2012, Phillip Coorey and Peter Martin

THE federal government will release its midyear budget update next week, prompting accusations it is bringing the document forward to avoid factoring in worsening revenue predictions and jeopardising its promised surplus for this financial year.

It is believed the midyear economic and fiscal outlook will be released as early as Monday, more than a month earlier than last year's release on November 29.

The Reserve Bank of Australia minutes published yesterday contributed to the downbeat assessment of the economic outlook, a scenario that paves the way for more rate cuts.

The government has promised to return the budget to surplus this financial year but is having to make more cuts because the economic outlook has worsened since the May budget and the cost of handling asylum seekers has blown out.

The Age understands university research grants valued at $240 million are at risk after the government put on hold this year's grants round. So-called discovery grants in fields including science, economics and medicine are normally announced in late October. Informally, academics have been told not to expect announcements this year and that next year's round is also on hold.

Yesterday, during Senate estimates hearings,

George Savvides, the head of Medibank Private, the government-owned health insurer, confirmed Medibank was set to hand the government a $300 million special dividend, the second such payment in three years.

Other areas that have been subject to speculation about savings include superannuation and a 25 per cent increase in tobacco taxes.

The government is sticking to its surplus promise despite falling revenues, declining commodity prices and an uncertain global outlook.

The May budget predicted a slender surplus of $1.5 billion for this financial year compared with a $47 billion deficit the year before.

Shadow finance minister Andrew Robb said releasing the midyear statement early would avoid the forecasts being based on assumptions more downbeat than they were at present.

''Releasing it this early will be a cynical snow job to disguise the anticipated haemorrhaging of tax revenue resulting from softening commodity prices and terms of trade,'' he said.

''It's not a half-yearly forecast, it's a quarterly forecast. They've brought it so far forward it's meaningless.''

He pointed to yesterday's RBA minutes, which noted that despite a small recovery in commodity prices, mining investment was likely to peak earlier and at lower levels than previously forecast.

Fair Work reshuffle queried

AFR 17 Oct 2012, Mark Skulley

A major employer group has queried whether the Gillard government will use changes to workplace law to make “partisan appointments” at the top of the national tribunal, Fair Work Australia.

The Australian Mines and Metals Association said it was puzzling that the government planned to create two additional statutory positions of Fair Work vice-presidents, despite such a move not being recommended by an independent review.

AMMA chief executive Steve Knott said the government had not explained whether two current Fair Work vice-presidents, Graeme Watson and Michael Lawler, would be appointed to the two new positions. “If these existing members are not going to be confirmed as the two new statutory positions with the proposed change to the legislation, the Minister should be upfront and tell us so,” Mr Knott said.

“It appears, without any real justification for the re-creation of the vice-president positions, the Minister is setting the scene for further appointments from a union or Labor-leaning background in an attempt to further influence the direction of the tribunal.”

A spokesman for Workplace Relations Minister Bill Shorten last night did not respond to questions on what would happen to the existing vice-presidents or whether they were being side-lined. The spokeman said the new positions would support the work of president Iain Ross. “Appointments to these new positions will be made in line with the Government’s processes for appointing statutory office holders,” he said.

Earlier this year, Justice Ross expressed concern over a speech made by Mr Watson, in which the vice-president said the government’s review of the Fair Work Act could end up “missing the boat entirely’’ and that the industrial relations system’s emphasis on adversarial disputes was undermining productivity.

VP Lawler is the partner of Health Services Union official Kathy Jackson. She has argued that Mr Lawler has been subjected to a “smear campaign” by her enemies within the strife-torn union.

The Australian Financial Review

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