return to Hot Off the Press list
After four years Thomson’s long awaited conviction has not produced any reaction from those in the Parliamentary Labor party, including Shorten, who declared themselves believers (in him) even when he was obviously a liar. The editorial in The Australian (below) rightly confirms Labor is “a prisoner of the unions”. That is a serious problem not only for the Labor Party but for the functioning of our democracy.
A bit more difficult to understand (but just as worrying) is Labor’s continued adherence to the need to combat dangerous global warming even when most other countries have much less aggressive policies and this reduces Australia’s international competitiveness. As Wall St journalist Stephen points out below in commenting on the worrying extent of US Secretary of State Kerry’s warmism, “When Kerry speaks, people wonder: is he seriously clever or totally oblivious? Profound or void? Detective Columbo or Chance the gardener?”
This is much worse than the advice our Joe Hockey proposes to give those visiting G20 Finance Ministers able to leave home (3 absentees so far) that the key to growth is infrastructure and private investment in it. A missed opportunity for Joe to tell them about the need to encourage private enterprise more widely by reducing the size of governments.
One newspaper suggests Abetz will next week introduce legislation to reduce some of the regulations of workplace relations and that this will include two (rights of entry and strike first, talk later) for which he argues Labor had no mandate. The (political) inability to go further misses what seems to be an opportunity, with almost all business associations waking from their sleep and arguing for much more. Requests by Labor and unions for a “jobs plan” could be answered by instituting a major deregulation and justifying it by pointing to the major revelations since the election.
Finally, while problems with stopping-the- boats, spying and refugees continue, Abbott and Scott Morrison are performing well and holding the line. Morrison is turning out to be an excellent immigration minister. His “what do you expect” type response on the injuries to refugees (one dead) who broke out of the Manus detention centre contrasts with the attempt by The Age (below) to blame the security forces.
Des
ALP must clear the air on links to union
Article by Andrew Bolt published in the Herald Sun, February 19, 2014
Craig Thomson leaving the Magistrates’ Court in Melbourne. Source: HeraldSun
FORMER Labor MP Craig Thomson had been found guilty at last and we can get on with the real question. What’s this about Labor?
Why did it for years protect Thomson when his guilt stank to the heavens?
Indeed, the royal commission into union corruption should investigate why Labor has been so soft on so much union lawlessness. Thomson is only the most obvious example.
Thomson, once national secretary of the Health Services Union, was found guilty this week of using members’ money for hookers and $10,000 in cash withdrawals.
His tale of enemies framing him by using his credit card in brothels became a complete joke in 2011 when broadcaster Michael Smith asked him why his handwriting and drivers’ licence number were on the payment vouchers.
Yet Bill Shorten, then a Labor minister, still backed Thomson: “Oh, yeah, I believe him”.
Prime Minister Julia Gillard kept backing the MP who held Dobell and kept her in power: “I have complete confidence in the member for Dobell.”
NSW Labor even gave Thomson almost $350,000 for his legal costs.
Add this: Michael Williamson, national president of Thomson’s union, has since admitted ripping off about $1 million of member’s money, some while he was Labor’s national president and with his daughter working for Gillard.
But there’s more. Why did the Keating Government in 1996 ignore appeals by a then co-secretary of the Australian Workers’ Union for a royal commission into rip-offs by AWU official Bruce Wilson, using a slush fund he set up with the help of his lawyer and girlfriend, Julia Gillard? (Gillard says she did not know what Wilson was up to and did nothing wrong.)
Why did the secretary then get offered a NSW government job?
Why did the AWU run dead on the investigation, with a former AWU state president saying Shorten, a fellow official, told him to “move on”? (Shorten denies it.)
Why did AWU faction bosses later help install Gillard as Prime Minister?
Still there’s more. Why did Gillard ‘s government agree to demands by the militant CFMEU, led by another former Gillard boyfriend, to scrap the Australian Building and Construction Commission, a watchdog that had cracked down on union lawlessness and referred 39 possible crimes to police?
Why won’t Labor still not back a royal commission into the corruption since exposed in the CFMEU and other unions?
Labor needs a good airing.
Labor turned a blind eye to Craig Thomson’s rorts
Editorial published in The Australian, February 20, 2014
Comment
WHEN an ashen-faced Craig Thomson exited the Melbourne Magistrate’s Court on Tuesday, learning he had been found guilty of defrauding the Health Services Union while serving as its secretary, the only people surprised were his former colleagues in the Labor Party. That is, of course, if you believe them. In 2009, it was reported Mr Thomson had stolen thousands of dollars from the union and spent the money on prostitutes, fine dining and luxurious travel. Large cash withdrawals from bank accounts were made. Documentary evidence supported these allegations. In 2012, a Fair Work investigation found Mr Thomson guilty of misusing union funds, breaching HSU rules and breaking industrial laws. Union whistleblowers added their support to the allegations. The HSU leadership never doubted Mr Thomson had stolen money from the union. The ACTU disaffiliated the HSU from its ranks.
Yet, Mr Thomson continued to enjoy the support of his Labor Party colleagues, including prime minister Julia Gillard. It was not until April 2012, by which point Mr Thomson had inflicted great damage on the party, that Ms Gillard decided “a line had been crossed”. Mr Thomson moved to the crossbenches. But Ms Gillard had to be dragged to this position. In August 2011 - eight months earlier - we argued here that Mr Thomson would continue to tarnish the party unless he was exiled to the crossbench. Yet Ms Gillard repeatedly stated she had “full confidence” in the disgraced MP. So did treasurer Wayne Swan, senior minister Anthony Albanese and many other MPs, including new leader Bill Shorten. “I believe him,” Mr Shorten said in 2011.
The voters, however, had long made up their minds about Mr Thomson. Labor should have done the same. The party denied Robertson MP Belinda Neal the opportunity to run for re-election in her neighbouring NSW central coast seat following an ugly spat at a local restaurant. Yet Labor allowed Mr Thomson, who faced far more serious allegations, to be re-endorsed ahead of the 2010 election.
That decision provided an insight into the corrupted internal workings of Labor. The party is a prisoner of the unions. Too many officials end up representing the party in parliament. They serve their own interest rather than the public interest. The unions determine the party’s policies. They control its personnel. The unions are the party’s recruitment agency. When faced with allegations of union rorting, the party did not take action; it provided protection. Labor also turned a blind eye to new revelations published in this newspaper about the AWU “slush fund” scandal of the 1990s. They are doing it again regarding the allegations of corruption in the CFMEU.
Mr Thomson is a poster boy for the royal commission into union corruption. He has been found guilty by a court. The HSU is seeking the repayment of nearly $400,000 in stolen money. Parliament’s privileges committee should hold Mr Thomson accountable for claiming he was innocent and blaming former HSU official Marco Bolano for the misuse of funds. Labor must also take responsibility for Mr Thomson. Mr Shorten owes it to the voters and to the unionists who were defrauded to ensure that it never happens again.
Huge price for green policies that don’t work
Article by Andrew Bolt published in the Herald Sun, February 19, 2014
HOW many more manufacturing workers must be sacked, thanks to green policies that only pretend to stop global warming?
How many of the jobless won’t be able to heat or cool their homes, with these same mad policies helping to hike power prices by 110 per cent in only five years?
And all this pain to make no difference to the world’s temperature. What a fraud.
True, the carbon tax and less-known Renewable Energy Target did not themselves kill Alcoa’s Point Henry smelter or Toyota’s Australian plants this month.
But the carbon tax alone cost Alcoa $137 million last year. How brainless is that, when its Australian smelters were already battling to survive competition from leaner competitors overseas?
The carbon tax also cost Toyota $115 a car. How stupid is that, when Australian-made cars were already struggling to compete against cheaper imports?
Apologists for the carbon tax claim it’s nothing compared with everything else smashing our manufacturers — a high dollar, green tape, crazy workplace restrictions and bloody-minded unions.
But it’s a straw breaking the back of a lot of camels.
Last year Penrice Soda quit making soda ash, sacking 60 people and leaving unpaid the $1 million it owes under the carbon tax it claims was indeed that final straw.
Grain Products Australia sacked half its 68 employees, saying the carbon tax and other green levies cost it $500,000 a year.
Packaging giant Amcor cut 160 workers at its Petrie mill, telling them the carbon tax was in part to blame, costing $400,000 in one year.
In 2012, Norsk Hydro shut its Kurri Kurri aluminium smelter and sacked 300 workers, blaming not only a high dollar and low prices but saying its “long-term viability will be negatively affected by ... increasing energy costs and the carbon tax”.
None of this was an accident. When the Gillard Government designed its “Strong Growth, Low Pollution” policy, carbon tax included, it produced Treasury costings showing the output of the electricity-intensive aluminium industry would fall 61.7 per cent by 2050.
And when Alcoa announced this week it would indeed close its Point Henry smelter, former Chief Climate Commissioner Tim Flannery said this was just the price we had to pay to save us from a “filthy” planet.
Around Australia, businesses are paying this “price”. They struggle with power bills that were once the lowest in the developed world but are now among the highest, in part because of policies to make coal-fired electricity so expensive that we use less of it.
Electricity bills for business have jumped almost 80 per cent since 2009. How many jobs has that cost?
And think of all those other failed and rorted global warming schemes we’ve had to pay for — the solar hot water rebates, the Green Loans scheme, the free insulation disaster, the solar cities program, the solar power subsidies.
Think of the millions Labor lost in grants to white elephants, like the $300 million to the Global Carbon Capture and Storage Institute and the $90 million for Geodynamics, whose shareholders include Tim Flannery, a spruiker of the geothermal technology which proved a dud here.
You’d weep at the waste.
No wonder many people now demand we stop this vandalism, especially with unemployment now hitting 6 per cent.
Australians have already voted in a new Abbott Government promising to scrap the carbon tax, although Labor and the Greens still use their numbers in the Senate to save it.
The Government also announced this week that business leader Dick Warburton, a sceptic, would head a review on the Renewable Energy Target.
This RET forces electricity companies to source some of their supplies from “green” power such as expensive solar and wind farms, costing the average family $102 a year.
But few Australians yet realise these schemes aren’t just unaffordable but mad, making zero difference to the temperature they are meant to lower.
Well, not exactly zero. Victoria University’s Professor Roger Jones, a warmist, figured the carbon tax could lower the world’s temperature in 2100 by just 0.0038 of one degree.
Other experts think it would been even less, since the world’s temperature hasn’t risen now in 16 years, suggesting our emissions don’t make as much difference as once thought.
But consider. Think of the thousands of companies struggling to keep afloat. Think of the sacked workers and your soaring bills.
We’re suffering like this so we can cut the world’s temperature by so little that no one could even measure it?
Mad. This global warming craze has destroyed not just our industries but our reason.
Asylum flow to Indonesia slashed, says UN
Article by Peter Alford and Brendan Nicholson published in The Australian, February 20, 2014
AUSTRALIA’S crackdown on boatpeople has slashed the number of asylum-seekers arriving in Indonesia, new UN refugee agency data shows.
Monthly applications for asylum-seeker registration handled by the UN High Commissioner for Refugees office in Jakarta — overwhelmingly the busiest in Indonesia — dropped 71 per cent between February 2013 and last month.
The monthly totals of asylum-seekers newly registered throughout Indonesia fell almost 44 per cent in that time to 434 people in January.
The scale of reduction supports Abbott government claims that Australia’s refusal to accept boatpeople — and, since December, turning their boats back — benefits Indonesia by discouraging many asylum-seekers from entering its borders.
The UN data emerged as Immigration Minister Scott Morrison yesterday released the much-awaited report on intrusions by Operation Sovereign Borders vessels into Indonesian territorial waters during turn-back operations.
The six incidents between December and last month, which exacerbated Indonesian fury over the Abbott government’s strategy, occurred because the commanders of Australian naval and customs vessels had not been given clear information by their headquarters about the location of the maritime boundary, the report said.
The need for vessels to stay clear of Indonesian territory “did not receive adequate attention during the planning of Operation Sovereign Borders”, it said.
Indonesia’s Foreign Minister, Marty Natalegawa, who has made running attacks on turn-backs and the Coalition’s border protection strategy generally, said yesterday he had no immediate comment on the report.
The latest UNHCR Indonesia data, which is available to Jakarta authorities, appears to demonstrate that hard-line Australian policy since last July has had a significant effect in diminishing the number of asylum-seekers coming into Indonesia.
While there is no accurate measure of people arriving in Indonesia seeking passage to Australia, refugee officials regard asylum-seeker applications — the first step towards UN certification — as a good proxy measure.
In the past four months it has become an even better indicator, as foreigners staying in Indonesia but previously unregistered realised their only real chance of getting to Australia was through the UN refugee registration. That triggered a surge in applications for asylum-seeker registration at UNHCR Jakarta in July and September, following then PM Kevin Rudd’s announcement that nobody who arrived in Australia by boat would be allowed to stay.
In the words of refugee agency officials, “people realised they would have to join the system in Indonesia, to have any chance of getting a visa for Australia”.
The number of applications for asylum-seeker status (those registered immediately and those sent away with later appointments) soared from 1229 in February last year to 2489 in July and more than 1600 in each of August and September.
Since, then the monthly totals at UNHCR Jakarta have fallen from 1608 at the end of September to 296 in December, although there was a moderate uptick last month to 356.
The plunge in applications has also taken pressure off UNHCR Indonesia — in the first half of last year 600-900 a month were being sent away from the Jakarta office, with appointments to return later.
But since October every applicant for asylum-seeker status has been registered on the day they walked in.
The Australian was last night seeking a response to the data from Mr Morrison’s office.
An Indonesian presidential adviser, former long-time foreign minister Hassan Wirajuda, yesterday dismissed the reduced flow as “a temporary phenomenon”.
Dr Wirajuda’s reply suggests Canberra has a long way to go to persuade the Yudhoyono administration.
“Yes, for a while Indonesia may benefit, because temporarily potential refugees might postpone their intention to go to Australia,” he said. “But who can guarantee that next year they will not try again, because the root causes, like conflicts, war, poverty, push people to migrate.”
Dr Wirajuda said his experience over more than a decade of dealing with refugee flow through the region suggested the slowdown was temporary.
ACTU says government must defuse the ‘wages’ bomb
Article by Ewin Hannan published in The Australian, February 20, 2014
Graphic: Greg Sommer Source: The Australian
ANNUAL wages growth has fallen to the lowest level on record, failing to keep pace with inflation and prompting Labor and unions to demand the Abbott government retract its warning that the economy risked a wages explosion.
Figures released yesterday by the Australian Bureau of Statistics show the seasonally adjusted wage price index rose 0.7 per cent in the December quarter and 2.6 per cent over the past year, the lowest annual figure since 1997 when the data was first collected.
Electricity, gas, water and waste services recorded the largest yearly growth of 3.3 per cent while professional, scientific and technical services was the smallest at 1.6 per cent.
Mining wages growth has slowed to 3.1 per cent annually compared with 5.1 per cent a year ago. The annual increase was not enough to offset an increase in the cost of living of 2.7 per cent during the same period, meaning real wages have fallen over the past 12 months.
ACTU secretary Dave Oliver said the data showed it was time the government “came clean about the non-existent wages blowout ... The truth is that we are seeing the slowest wages growth on record and it’s time for the Abbott government to be honest and upfront with workers,” Mr Oliver said.
“Australia is in the midst of a job security crisis with thousands of workers losing their jobs and many others pushed into casual insecure work. Meanwhile, under the banner of a so-called ‘wages blowout’, the Abbott government has blamed every economic fallout on workers.”
The Australian Chamber of Commerce and Industry said the wages data was further evidence of the need for workplace relations changes.
The chamber’s chief operating officer John Osborn said the combination of rising unemployment and falling real wages “must be a wakeup call” for all political parties, particularly the ALP and Greens, which were frustrating important changes in the Senate.
“The inescapable reality of business is that employment costs impact on employers’ decisions to hire workers. This is worsened when those costs become out-of-step with the productivity growth that underpins real wages growth,” he said.
“The tragedy of the situation we face is that much of it is avoidable. It is within our power as a nation to cut the excessive regulation and government interference that is holding back job creation.”
Opposition workplace relations spokesman Brendan O’Connor said Employment Minister Eric Abetz must substantiate his “dangerous claims” that Australia faced a “wages explosion”.
“While there is no doubt some parts of our economy are doing it tougher than others, Mr Abetz has not been able to substantiate his claims that wages earned by hard-working Australians are spiralling out of control,” Mr O’Connor said.
“Mr Abetz is trying to build a narrative based on a falsehood so the Abbott government can return to what it does best: attacking the rights and entitlements of workers.
“Tony Abbott and Mr Abetz are either out of touch or are deliberately misleading Australians with their claims about an explosion in wages.”
Senator Abetz said last night: “I have never said Australians are paid too much.
“This is the ultimate straw man effort by a desperate opposition.
“What I said was that we ‘risk seeing something akin’ to a wage explosion, if employers and employees do not accept the mutual responsibility of ensuring that enterprise agreements are not bogged down with unproductive and outdated work practice.”
Border breaches 'in error'
Editorial published in The Australian, February 20, 2014
COMMANDERS of Australian naval and Customs vessels on border protection operations strayed into Indonesian waters six times because their headquarters did not give them clear information about where the maritime boundaries were.
A review of the incursions, which occurred during December and January while the vessels were turning or towing boats back to Indonesia as part of Operation Sovereign Borders, has found that the breaches were inadvertent and the result of a "miscalculation" by Australian crews.
The review said that with the main focus on safety, the need for the vessels to stay out of Indonesian territory "did not receive adequate attention" in the operation's planning.
It recommended that Navy Chief Ray Griggs examine each incursion by naval vessels for any lapses in professional conduct.
The commanders of Customs vessels involved in incursions should receive more extensive training in the provisions of the UN Convention on the Law of the Sea, the report said.
The joint Customs and Defence review suggested crews were not provided with sufficient information to determine where the border was. "This information should also have been available in the shore headquarters and used as a reference for task oversight and approval recommendations," it said.
The reviewing officers noted that the activities the Australian patrol vessels were involved in at the time were considered to be beyond their terms of reference.
While the portion of the report that was released contains little detail, it appears the breaches were caused by a combination of factors including the fact Indonesia is a sprawling archipelago of 17,000 islands with a vast number of overlapping marine boundaries.
The review was carried out jointly by senior officers from the Australian Customs and Border Protection Service and the Australian Defence Force.
It said that despite clear guidance to operational headquarters and assigned units, the imperative to remain outside Indonesian waters did not receive adequate attention during mission execution or oversight.
"The report found that Indonesian maritime boundaries constituted important operational information that should have been provided by the headquarters to the commanders of vessels assigned to Operation Sovereign Borders," it said.
"This information should also have been available in the shore headquarters and used as a reference for task oversight and approval recommendations."
The Abbott government has formally apologised to Indonesia for the breaches.
The chairman of Indonesian parliament's Defence and Foreign Affairs Commission, Mahfudz Siddiq said Indonesians would find the assertion that the violations were inadvertent "difficult to understand".
"Australian ships certainly are equipped with modern navigation systems that can figure out where is Australian waters and where is Indonesian waters," he said.
Coalition to outlaw ‘strike first, talk later’ industrial tactics
Article by Mathew Dunckley published in the Australian Financial Review, February 19, 2014
AiGroup chief executive Innes Willox...“Chief executives, company directors and senior managers are appointed to make decisions in the interests of shareholders and companies. In some circumstances just saying No to all union claims is not a sound commercial decision.”
The federal government is poised to unveil changes to industrial relations laws next week amid increasing calls for action from business.
There is strong speculation that Employment Minister Eric Abetz will use the next sitting week to introduce the Coalition’s promised legislation to change laws around right of entry and so-called greenfields agreements covering new workplaces or projects.
Mr Abetz confirmed the government would also use the legislation to stamp out “strike first, talk later” bargaining activity.
“Labor made specific promises in 2007 to not amend the right of entry laws and that ‘strike first, talk later’ would not be a feature of the Fair Work Laws – both those promises were broken,” he said.
“Our bill will deliver on Labor’s 2007 election commitment and I’m hopeful that Labor will support the legislation given that it implements their 2007 policies.”
Australian Industry Group chief executive Innes Willox on Wednesday called on the government to move quickly to introduce its promised changes to bargaining laws that will require parties to show they have discussed productivity improvements before any protected industrial action.
But he said there were much broader changes needed, including a greater ability to vary agreements, particularly for businesses under stress, and a clampdown on pattern bargaining.
He also suggested the looming royal commission into unions examine the financial arrangements that benefited some unions that were locked in through large pattern deals.
Mr Willox said that there were a number of ways to lift productivity, including through technology, innovation and better management but workplace relations reform was a “major ingredient” and often an enabler of those other measures.
“The enterprise bargaining system . . . imposes some major barriers to productivity and these barriers need to be redressed without delay.
“The fact is with each bargaining round many employers have been coerced by unions to accept provisions in their agreements which impose significant barriers to productivity improvement and high cost structures,” he said.
Mr Willox also rebutted claims by Mr Abetz that companies had too often “caved in” to union demands and then demanded the government take action.
“You hear similar critical sentiments from time to time from armchair commentators who have no idea of the circumstances or consequences for the business.
Industrial action can be extremely damaging, indeed crippling to a business, its customers and its suppliers,” he said.
“In some circumstances just saying ‘no’ to all union claims is not a sound commercial decision.”
Australian Mines and Metals Association executive director Scott Barklamb was pleased the government was set to move on reform, particularly on rights of entry and greenfields agreements.
“These two areas have been dogging the resource industry since the previous government introduced the Fair Work Act.
“We urgently need to start to restore some balance and practicality.
“Further investment and job creation means we cannot wait any longer for urgent changes to our nation’s workplace laws,” Mr Barklamb said.
What Should the Minimum Wage Actually Be?
Article by Michael C. Bender published in the Australian Financial Review, February 20, 2014
Minimum Wage Job-Loss Report Is Cause for Republican Punt
Boosting the minimum wage may cost as many as 500,000 people their jobs, said a new report from Congress’s financial scorekeeper that diminishes chances for an agreement on one of President Barack Obama’s priorities.
The effort by Obama and Senate Democrats to raise the minimum wage to $10.10 an hour already faced opposition in the Republican-led House. Yesterday’s report from the Congressional Budget Office provided more fodder for Republicans who have been arguing the proposal would kill jobs.
“This is going to give some angst to Democrats,” said former Representative Bart Stupak, a Michigan Democrat.
The report also showed that raising the minimum wage from $7.25 an hour may lift about 900,000 Americans out of poverty, supporting Democrats’ arguments in favor of the legislation.
Still, Republicans said the potential job losses outweighed those findings. Brendan Buck, a spokesman for House Speaker John Boehner, said the CBO report “confirms what we’ve long known.”
Debating the Impact of Income Inequality
“With unemployment Americans’ top concern, our focus should be creating -- not destroying -- jobs for those who need them most,” Buck said in a statement.
Maurice “Hank” Greenberg, a Republican donor and former chief executive officer of American International Group Inc., said his party was on the wrong side of the issue. A Jan. 8 poll by Quinnipiac University found that 71 percent of Americans, including 52 percent of Republicans, support a higher minimum wage.
“The Republicans must not be viewed as the party that killed it,” Greenberg said today in a Bloomberg Television interview. “If they do that, they’re going to have a tough time in the forthcoming elections. So from a practical point of view I’d hope they’d get it done.”
A campaign built around raising the minimum wage can help Democrats win political races in battleground states, said Richard Trumka, president of the AFL-CIO federation of 56 unions with 12.5 million members.
“Raising wages for Americans, for all workers, is the issue of our time and hopefully will be the issue of this election,” Trumka said today on a conference call with reporters. “They can yell all they want but this is a winning issue.”
The change would most affect leisure and hospitality companies, which employed 51 percent of minimum-wage workers in 2012, according to a Bloomberg Government analysis. At least 50 companies and industry groups are lobbying Congress on the issue, including Yum! Brands Inc. (YUM), the operator of Kentucky Fried Chicken and Taco Bell restaurants.
Companies, including Darden Restaurants Inc. (DRI), which owns Red Lobster and Olive Garden, cite a potential minimum wage increase as a risk factor in filings with the
U.S. Securities and Exchange Commission.
Others, such as Costco Wholesale Corp. (COST), back the change, saying it would help reduce turnover and increase productivity.
Senate Majority Leader Harry Reid, a Nevada Democrat, plans to bring a minimum wage increase proposal to the Senate floor in March. In a statement, he emphasized a finding in the report that the move would increase pay for 16 million Americans.
“The Koch brothers made over $18 billion in 2013 alone, but middle-class families have watched their incomes stagnate for decades,” Reid said, referring to billionaire energy executives Charles and David Koch, supporters of the small-government Tea Party.
“Our economy should work for everyone, not just the top 1 percent,” Reid said.
The proposal, backed by Senator Tom Harkin, an Iowa Democrat, is opposed by Boehner. The Ohio Republican told reporters Jan. 28 that raising the minimum wage is “bad policy.”
The report is the second this month that injects the nonpartisan budget office into a political fight in Congress. A Feb. 4 report from CBO showed Obamacare will reduce hours Americans work.
Jason Furman, chairman of the White House Council of Economic Advisers, yesterday took issue with the CBO’s findings on how raising the wage would affect jobs, saying it doesn’t reflect the consensus view of economists.
Most studies show that minimum wage increases have little or no effects on employment, he said on a conference call with reporters yesterday.
“There are dozens and dozens of other studies on the minimum wage that we can draw and infer from,” Furman said, adding that the White House was taking the CBO report “seriously.”
Other parts of the CBO report support raising the minimum wage, including the conclusion that a higher wage would boost the economy by raising consumption, Furman and Council of Economic Advisers member Betsey Stevenson wrote on the White House website.
CBO Director Doug Elmendorf declined to respond directly to White House criticism today at a Christian Science Monitor breakfast in Washington. He told reporters that his agency’s conclusions were “consistent with the latest thinking” of most economists.
Gene Sperling, director of the National Economic Council at the White House, said there was no loss of jobs when New Jersey raised its minimum wage, nor was there any effect on neighboring Pennsylvania. A study by economists involving 500 counties and neighboring counties showed similar results, Sperling said.
“All of them they found, raised wages and that did not hurt jobs,” Sperling said today on MSNBC’s “Morning Joe” program. Raising the minimum wage “improves morale, it improves productivity, improves retention.”
Senator John Thune of South Dakota, chairman of the Senate Republican Conference, said on the same program that the CBO report showed raising the minimum wage “could cost a million jobs.”
“Why would we be putting policies in place that have the potential to reduce the number of jobs?” Thune said.
The CBO report estimated that companies would shed about 500,000 jobs by late 2016. Higher-wage workers would give employers an incentive to hire less or upgrade technology, according to the report.
The effect on employment could be larger or smaller, it said, ranging from a “very slight reduction” to losses of about 1 million.
The boost for low-wage workers would total $31 billion, though just 19 percent of that total would go to families living below the poverty threshold, CBO said.
Still, their average family income would be increased by about 3 percent, and about 900,000 people would be moved out of poverty, among about 45 million people who would be below that threshold under current law, according to CBO.
To contact the reporter on this story: Michael C. Bender in Washington at mbender10@bloomberg.net
G20 can be optimistic but never complacent
Article by Joe Hockey published in the Australian Financial Review, February 20, 2014
The G20 leaders class of 2013 in St Petersburg. Homework included bringing a growth strategy to Brisbane this year.Photo: NYT
Finance ministers and central bank governors from across the globe are coming to Sydney this weekend as part of the first ministerial meeting of Australia’s Group of 20 host year.
Growth in advanced economies, particularly the US, Britain and Japan, looks to be picking up.
Emerging market economies, as a group, are expected to continue to make strong contributions to global growth, despite recent episodes of market volatility that some have experienced.
For the G20 economies, I believe the future is optimistic. At the same time, we cannot afford to be complacent.
The global economic recovery is not yet sufficiently strong or broadly based enough to create the number of jobs we need to sustain growth. There are also significant risks on the downside for many of our member economies.
To boost growth, we will need a fresh approach to encourage private investment in the right infrastructure.
Something that would help in this, I believe, is a common global understanding of the risks associated with different projects. That could provide a signal for each investment decision.
Infrastructure will be a key
This is a conversation I look forward to having over coming days with my international ministerial counterparts, because infrastructure will be a key as we try to boost economic growth and create jobs.
The G20 brings together countries to share their policies, allowing others to assess the potential impacts of these policies on their economy.
It is an important forum for collective action on global economic issues, particularly as it includes central bank governors and finance ministers from developed and emerging economies.
One of the G20’s major strengths is having the right players in the room to pursue strong global co-ordination.
We are currently managing a period of increased volatility in financial markets and capital flows.
This is driven by a combination of changes in global monetary policy settings and expectations, structural weaknesses in some countries and fluctuations in the risk appetite of some financial markets.
Bringing back monetary policy to a more normal level in some countries has been a slow and steady process.
This is a welcome development. It shows increasing confidence that growth is recovering in advanced economies.
The G20 will consider how episodes of financial market volatility are affecting emerging market economies. Some of these economies are experiencing exchange-rate pressures, high inflation and capital outflows – and these three issues can be appropriately managed at a global level.
Changes in policies in one economy obviously have an impact on other economies. The G20 must be focused on increasing growth rates across the world. If you raise the tide, all boats will rise.
Individual growth strategies to be presented
Strengthening growth and jobs has always been a priority for all governments. After the St Petersburg G20 Leaders Summit last year, finance ministers were asked to return with their own growth strategy in time for the 2014 Brisbane Summit. This year, each G20 finance minister will present their comprehensive growth strategy focused on investment, employment, trade and competition.
These strategies will look at global gaps and deficiencies based on analysis by international organisations, such as the IMF and the OECD, to demonstrate how G20 members can work together to lift global growth and create jobs.
The G20 in Sydney will enhance its objective of setting up clear, practical goals and co-ordinated individual and collective actions to achieve strong, sustainable and balanced growth. Co-ordinated global reform is highly complex and challenging. Our task will not be easy. The first G20 finance ministers and central bank governors meeting in Australia’s host year have a full but focused agenda.
I look forward to welcoming our international guests to Sydney on the weekend to work through these important issues.
Joe Hockey is the federal Treasurer.
Kerry espouses Strong views of a true believer
Article by Bret Stephens published in The Wall Street Journal, February 20, 2014
US Secretary of State John KerrySource: AFP
THE weirdest thing about John Kerry’s weekend speech on climate change — other than the fact that this is the same guy who in 1997 voted to forbid the US from signing the Kyoto Protocol — is that it begins by quoting something Maurice Strong said at the UN’s 1992 Earth Summit in Rio de Janeiro: “Every bit of evidence I’ve seen persuades me that we are on a course leading to tragedy.”
Maurice who? Strong, a former oil executive from Canada (he was Pierre Trudeau’s pick to run state-owned Petro-Canada in the mid-1970s), was for many years the UN’s ultimate mandarin. He organised many of its environmental mega-confabs, including the 1972 Stockholm Conference and the 1992 Rio summit, before rising to become Kofi Annan’s right-hand man. At various times Strong has served as director at the World Economic Forum, chairman of the Earth Council and the World Resources Institute, vice-chairman of the Chicago Climate Exchange and chairman of the China Carbon Corporation, to name just a few of his many prominent affiliations.
In 2005 it emerged that Strong, who was the chairman of the UN panel that created the Office of the Iraq Program, had accepted a cheque for close to $US1 million from a South Korean businessman named Tongsun Park, who in the 1970s had been involved in an effort to bribe US politicians. Strong claimed that the cheque, from a Jordanian bank, was meant as an investment in a family company that later went bankrupt. Park (who also sublet office space from Strong) later went to prison for trying to bribe UN officials overseeing the Oil-for-Food program that was propping up Saddam Hussein’s regime in Iraq. Strong was accused of no wrongdoing and has denied involvement in Oil-for-Food. He left the UN that year and moved to Beijing.
Draw your own conclusions. Ask yourself: is this a guy who deserves a shout-out from the US Secretary of State?
When Kerry speaks, people wonder: is he seriously clever or totally oblivious? Profound or void? Detective Columbo or Chance the gardener?
The secretary devoted much of his speech to venting spleen at those in the flat earth society who dispute the 97 per cent of climate scientists who believe in man-made global warming.
“We should not allow a tiny minority of shoddy scientists and science and extreme ideologues to compete with scientific fact,” he said. Once upon a time people understood that scepticism was essential to good science. Now Kerry is trying to invoke a specious democracy among scientists to shut down democratic debate for everyone else.
This is of a piece with the amusing notion that the only thing standing in the way of climate salvation is a shadowy, greedy and powerful conspiracy involving the Koch Brothers, MIT’s Dick Lindzen, US senator Jim Inhofe and The Wall Street Journal’s editorial page. Oh, the power!
And yet there goes Kerry extolling Strong, who really does stand at the obscure intersection of public policy, private profits and the climate science that joins the two. “I have to disclose my own association with this process in my earlier role in the United Nations negotiations which established the basis for the development of these new (market) opportunities,” Strong said in a 2007 speech, noting his roles in the Chicago Climate Exchange and the China Carbon Corporation.
If George W Bush had left office and immediately joined the boards of defence contractors building MRAPs for Iraq, hard questions would be raised. When Strong, Al Gore and other climate profiteers seek to enrich themselves from policies they put into place while in office, it scarcely raises an eyebrow.
It should. The carbon-trading schemes enacted with such fanfare just a few years ago have effectively ceased to operate amid collapsing prices. The sustainable-energy craze produced the expensive bankruptcies of solar-panel maker Solyndra, Fisker
Automotive and battery maker A123 Systems, to name a few. Germany, which has taken its climate change fetish further than any other major economy, is now coming to grips with a comprehensive fiasco of higher energy prices and higher carbon emissions. Who would have thought that when the sun doesn’t shine or the wind doesn’t blow, people might still want to switch on the lights?
It is now the dogma of the left that any hint of doubt when it comes to predictions of climate doom is evidence of greed, stupidity, moral turpitude or psychological derangement.
“Climate denial” is intended to be the equivalent of Holocaust denial. And yet the only people who’ve predicted anything right so far are those who foresaw that the Kyoto Protocol would fail, that renewable energies didn’t really work, and that climate bureaucrats accountable to nobody but their own sense of virtue and taste for profit were a danger to everyone.
Rereading Kerry’s speech, I have to say he really does come across as a true believer. That it begins by citing Maurice Strong, the ultimate cynic, tells you what you need to know about where this strain of true belief leads.
Keeping the friendship afloat
Editorial published in The Australian, February 20, 2014
THE Australia-Indonesia relationship is going through a very rough spot. There is tragedy here, for there are many Indonesians and many Australians filled with goodwill for each other.
Just now, there is a perfect storm. This relationship has always had plenty of bumps and difficulties. Australia helped Indonesia secure independence from the Dutch in the 1940s. But in the 50s and 60s the strength of the Indonesian communist movement worried Australia profoundly. In the mid-60s, there was the period of military confrontation between Indonesia and newly created Malaysia. Australia helped Malaysia. Things improved as Suharto consolidated, but then in 1975 came the invasion of East Timor.
In 1986, a single article in The Sydney Morning Herald alleging high-level corruption in Indonesia put the relationship in the deep freeze. It recovered when foreign ministers Gareth Evans and Ali Alatas forged a strong partnership. But it went temporarily back into crisis in the early 90s with the Santa Cruz killings in East Timor. It recovered quickly, but went back into crisis over Australia’s role in East Timor’s gaining independence.
Things have gone up and down since, with Canberra’s response to the tsunami of 2004 pivotal. The two Bali bombings, though devastating, actually brought the two governments together in shared grief and shared counterterrorism co-operation.
I recite all these episodes only to show that, while this is an intensely important relationship, it has a long history of crisis and renewal. What it has always lacked is a vast economic connectedness, and wide people-to-people contact.
Right now, there are two distinct dynamics of difficulty causing trouble, and although they are not inherently related they are becoming hopelessly intertwined. These are the revelations by former US security contractor Edward Snowden of Australian spying on Indonesia and the disagreement over Canberra’s determination to turn back boats.
Of the two, the Snowden revelations have had by far the bigger impact. First came the news the Australian Signals Directorate had eavesdropped on the phones of Indonesia’s President Susilo Bambang Yudhoyono, his wife and senior associates.
Now, this week it is revealed the ASD passed on secret information about Indonesia-US trade negotiations, and that the ASD had the capacity to decrypt and intercept thousands of internal Indonesian communications.
Revelations like these would cause a nationalist reaction anywhere in the world. In Indonesia, with its history of having endured centuries of European colonialism, with having had to fight to get rid of that colonial rule, with the sense that at times in its history Western powers have conspired against it, with a certain fragility, anyway, in its sense of nationhood, there is a wholly understandable charge in the reaction.
The problem for Tony Abbott is that there is almost nothing he can do about the Snowden effect. Everything so far revealed by Snowden happened when either Kevin Rudd or Julia Gillard was prime minister. Abbott cannot change the intelligence past, nor can he promise to hobble intelligence agencies in the future.
The boats issue is the more important in the short run for Australian policy. The Abbott government sees the boats issue as a central matter of Australian sovereignty and national interest. It is far less of an issue in Indonesia, but the Indonesians object to the policy of turning boats around, of towing people back to the edge of Indonesian waters.
There are many levels of tragedy in this issue. Not least is the way it reinforces in each nation the stereotypes held about the other. Over-simplifying things rather drastically, many Indonesians see our approach to the boats issue as being all about Australian selfishness. They can see no sensible reason why the previous government dismantled the effective Pacific Solution, put the sugar back on the table and started the people-smuggling trade up again.
It strikes them that this was all about Australian smugness, the desire of Australians to see themselves as morally superior. Now they believe the new policy, again, is all about Australian selfishness, that it shows a lack of Australian engagement in the region. They believe Australia has played to fear and prejudice and that we don’t care about the effects of Australian policy on Indonesia; in particular, that we don’t really care what Indonesia’s views are. This is where it links up with the Snowden issue. Australia has the power to do things, so it does them, whether Indonesia likes it or not.
Similarly, they believe Indonesian views are only of importance in Australia if they reinforce one side or the other of our domestic political arguments. They also see the Abbott government’s determination on this issue as a disregard for the importance of the Indonesian relationship itself. And the fact that we constantly talk about the issue means that anything they don’t like about it is endlessly replayed in their media.
Finally, this all plays into the Indonesian sense of victimhood. Australia stands in for hundreds of years of European misbehaviour in Asia. That is an Indonesian stereotype of Australia. From Australia’s point of view, many Australians see Indonesia as a nation that won’t actually do anything substantial about a shared problem, which can never take helpful co-operative action in a timely fashion, which takes offence where none is intended, which values the form of a good relationship, but which is not prepared to take concrete steps to make that relationship productive for both nations.
In truth, Abbott is doing exactly what he said he would do before the election, and it is working. It is also benefiting Indonesia, as the numbers of people coming into Indonesia purely in order to come to Australia has declined sharply.
The biggest threat to the Abbott government’s policies is just the sheer scale and complexity of holding everything together. The Manus Island disturbances are part of the serious battle of wills that the Rudd and Gillard governments so dismally failed.
The Abbott government must mobilise whatever level of resources is needed to make Manus work properly, including in a way that respects the human rights of everyone involved.
A failed policy would be infinitely more expensive. It would also, long term, damage the vitally important relationship with Indonesia.
Armed PNG locals behind vicious attack on Manus Island
Article by Michael Gordon and Sarah Whyte published in The Age, February 20, 2014
Tents at the detention centre on Manus Island, 2013. Photo: Jason South
PNG locals employed by security guards at the Manus Island detention centre attacked asylum seekers with machetes, knives and rocks, an interpreter employed by the Immigration Department has claimed.
Azita Bokan alleges asylum seekers used plastic chairs as shields when they were attacked by locals who entered the centre as tensions spilled over on Monday night.
She said she saw asylum seekers who had suffered ''massive head injuries'' when locals entered the centre after some detainees had pushed down a fence within the centre.
''Definitely, 100 per cent, I stand by the statement that the local people, including some employed by (security contractor) G4S, they were the ones who caused this drama,'' Ms Bokan told Fairfax Media after flying out of Manus Island on Wednesday.
Ms Bokan said she did not witness the violence, but was in the area where the injured were taken, and was told injuries were caused by machetes, knives, rocks and table legs.
''There was blood everywhere. The number injured was horrific: people with massive head injuries, at least one with a slashed throat,'' she said.
Immigration Minister Scott Morrison said he had no ''verification or any clarification'' of the allegations. ''This is going to be a very difficult process … it was a very unruly incident,'' he said.
G4S has said none of its employees were involved in Monday night's disturbance. It has not responded to Ms Bokan's allegations.
Ms Bokan says she had been employed by the department for 12 months and had been on Manus for a week. She claims that unrest on Sunday was sparked when the asylum seekers were told there was no prospect of resettlement in Australia, a third country or PNG.
In explosive claims, Ms Bokan also says the asylum seekers had not complained about serious mental and other health concerns for months because they were told that their claims would not be processed and that no other country would give them protection.
She claims many asylum seekers suffered headaches, ear infections and such serious dental decay they had had teeth pulled out by a local.
Ms Bokan says she intervened when guards attacked an asylum seeker the morning after Sunday night's unrest, and implored authorities to ''let us talk and calm the situation down''.
''I said, 'Just give them some hope', but there was no hope to be given. We knew it was a bad night.''
She said she was ''disciplined'' by the Department when she intervened on behalf of an asylum seeker. Documents show she was then suspended by the Department on Tuesday.
Ms Bokan said she was not allowed to speak to the media under the terms of her contract, but could not remain silent. ''I am seeking a lawyer to protect me because I know they will come after me with all that they have.''
The Immigration Minister has increased the number of security guards at the Manus Island detention centre by more than a third, following days of violence that left one asylum seeker dead and scores of others severely injured.
On Wednesday afternoon Mr Morrison announced he would be sending the commander of Operation Sovereign Borders, General Angus Campbell, and a team of private security guards to the Papua New Guinea island.
General Campbell will arrive in Manus Island on Thursday to assess the ''stability'' of the centre, Mr Morrison said on Wednesday.
Senior navy officers and customs officials face possible disciplinary action over six incursions into Indonesian waters while turning back asylum-seeker boats.