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Thu 31 Jul

Australia Institute Live: Final day of first sitting brings challenges on Gaza, climate and what the Coalition stands for. As it happened

Amy Remeikis – Chief Political Analyst

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Reading through the senate hansard I see that Tasmanian Labor senator Josh Dolega gave his first speech to the chamber late yesterday:

It’s not lost upon me—the sense of responsibility of being Labor’s first openly gay senator for Tasmania. I hope me being here today can give hope to young queer people that you, too, can come to this great place. But, more importantly, I hope you know that you’re already seen, you’re understood and you are represented.

I acknowledge other LGBTQI+ MPs and senators and the contributions that they have made to progress for our community.
As a young person I experienced some tough times for being who I am. There were some dangerous times when I was faced with violence and hatred. There were times when I wondered if I’d ever find someone to love and to love me back. I don’t bring all this up as a sign of weakness but to give a sense of hope and as a shining light to young queer people. If you are going through a tough time, if you’re wondering if someone will love you, if you’re wondering if things will get better, I want you to know that, yes, you can find love and that you are loved and that things will be okay.

Find your safety net and latch on to what makes you happy.

Well actually….

Greg Jericho
Chief Economist

As Amy reporter just now

Opposition frontbencher Michaelia Cash said it was a good thing inflation was falling, but Australians were still doing it tough because prices had grown faster and for longer than elsewhere in the world.

“So Jim, take all the credit you like. But the bad news is you’re the architect of the cost-of-living crisis that Australians live under your government,” she told Nine’s Sunrise program.

I don’t want to do a “Well Actually”, but WELL ACTUALLY!!!!

Australia’s inflation did not grow faster or higher or was up for longer than elsewhere in the world.

Take the USA. If we use the monthly figures – inflation went up at about the same pace, peak higher, but Australia inflation came down faster! It took 25 months for the US’s inflation to get below 3% after its peak; in Australia it took 20

So maybe Jim should take all the credit he likes…

RBA failing on inflation

Matt Grudnoff
Senior Economist

The Reserve Bank of Australia (RBA) has a target to keep headline inflation between 2% and 3%. By any reasonable measure it has completely failed on this over the last decade.

The June quarter released this week shows that inflation has been within the band for the last four consecutive quarters. This is the first time we have seen four consecutive quarters in the RBA target band since 2014.

Since the end of 2014 there have been just eight quarters where inflation has been in the target band and those eight quarters include the four most recent ones. That means just eight of the last 43 quarters have been in the band. How can that be judged as anything but a complete failure?

Most recently the inflation rate has been higher than 3%, but for most of the past decade it has been outside the band because it has been below 2%.

In the 43 quarters since December 2014 inflation has been too high for 12 quarters but too low for 23 quarters.

You might think that inflation is bad and so having inflation below 2% is a good thing. But there is a reason that the RBA inflation target has a lower limit.

Low inflation comes with sluggish economic growth and higher unemployment. The RBA review actually rebuked the RBA for not doing enough to increase inflation in the years before the pandemic. They said that the RBA had kept interest rates too high for too long when inflation was below 2% which resulted in more people being unemployed.

Remember the RBA is not just supposed to keep inflation within the band, they also have an objective to maintain full employment.

Throughout the inflationary spike following the pandemic the RBA has talked tough on getting inflation back to target. He frequently said “The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that outcome.”

The fact that inflation spiked and was outside the target band is not the fault of the RBA. This spike in inflation was worldwide and was caused by factors far beyond their control.

But actions speak louder than words and the last 10 years have highlighted that they show a lot of concern when inflation is above the band and too little concern when the inflation is below the band. This means they have not shown enough attention to the employment side of their mandate.

This history is important because there is now a real risk that the RBA will fall back into bad habits. The most recent quarterly inflation data in June 2025 shows inflation has fallen to just 2.1%, the very bottom of the target band. The monthly inflation for June was just 1.9%. It is important to note that the monthly inflation figures are not a complete read on inflation like the quarterly figures.

Despite this the RBA seems more concerned about a sudden outbreak of inflation that might push inflation back up above 3%, than the risk that unemployment might rise. Has the RBA failed to heed the review? Will it allow inflation to fall below 2% and for unemployment to continue to rise?

If the RBA lets inflation fall too low, then people will lose their jobs and those with mortgages will continue to be squeezed. We can’t go back to the failure of the pre-pandemic period.

The new defence housing bill we were speaking about earlier this week and which the Canberra Times reported on last week has drawn the ire of the Greens – and understandably.

The bill opens up defence housing (so public housing) for overseas defence personnel here as part of the Aukus deal. So the government will now build new defence housing for US troops. In the middle of a housing crisis where we are told time and time again the government can not get into the housing market because that is not the role of government anymore.

Yup!

Here is what David Shoebridge had to say on it:

You cannot make this up. The Albanese Government spent the last Parliament attacking the Greens for wanting more public housing, saying this call was unrealistic. Now, in Labor’s first big move in the housing space, it is building public housing not for people doing it rough, but for Trump.

There is no financial impact statement in this Bill, as if there is no cost to building hundreds of homes. It is another secret deal to put Australian public funds into the pockets of the US military, another bottomless pit of money for AUKUS.

What this government is doing by passing this Bill in the first sitting period is sending a clear message that their priority is to keep Donald Trump happy, even if that means building the Mar-a-Lago of Perth paid for by the Australian public.”

Barbara Pocock also weighed in:

The Government’s priorities are clear – US troops are deemed more worthy of public housing than people in Australia desperately needing a roof over their heads.

In our current housing crisis, the Government is choosing to play politics. Labor says it wants to solve the housing crisis but all they’re doing is pandering to US interests.

Labor is proving they can deliver on public housing. So if the Government can provide public housing for US troops, why can’t they do it for vulnerable Australians desperately needing a roof over their head? 

Housing is a human right. The Greens call on Labor to take the housing crisis seriously by delivering public housing for Australians.” 

Time to face the music

Skye Predavec
Anne Kantor Research Fellow

As the Australian National University faces ongoing resistance to its planned across-the-board cuts as part of its “Renew ANU” plan, their rebuttals to criticism are getting increasingly flimsy. 

One of the latest proposals is to merge the School of Music into another school and halt individual lessons.

The ABC is quoting Dean of the College of Arts and Social Sciences, Professor Bronwyn Parry as saying:

“Music is not under threat, we are investing in its future through a revitalised structure and a renewed curriculum that reflects more than two years of planning, research and consultation.”

Anyone who takes a look at what the ANU has planned for music would have difficulty squaring Professor Parry’s statement with reality. The Renew ANU plan to merge the school of music has faced criticism from the Canberra Symphony Orchestra, and prompted students opposed to the move to put on an overnight concert in protest. It’s difficult to see how folding the school of music into another school can be interpreted as “investing in its future”, but this kind of doublespeak is unsurprising from a university that faces an ever-worsening crisis of governance.

While its vice-chancellor rakes in almost a million dollars a year, and its chancellor spends hundreds of thousands on speechwriting and travel, Australia’s national university has taken a slash-and-burn approach to cutting costs. In 2023, the ANU spent around $54 million on consultants, but now staff and students are bearing the costs of dealing with the budget.

The ANU isn’t the only Australian university plagued by financial and governance problems. The higher education sector needs urgent reform, and Australia Institute research shows what the path forward could look like.

The submission “A Higher Purpose” recommended:

  • A focus on education and public research, rather than commercial performance
  • Requiring universities to provide an itemised disclosure report for spending on consultants (as is currently the case in Victoria)
  • Real-time disclosure of conflicts of interest
  • A cap on vice-chancellor salaries and a ban on vice chancellors taking on other paid work
  • Funding increased to 1% of GDP
  • Empowering the Australian Tertiary Education Commission to scrutinise universities whose governance, course quality and health and safety standards are inadequate
  • Amending the establishing acts of universities to ensure the majority of those on governing bodies are democratically elected
  • Requiring the councils or governing bodies of universities to hold public meetings

Staff and students deserve better than endless workshopped statements that aim to hide severe cuts to their university. It’s time for the ANU to fix up its act, and for our university sector to return to its focus on research and education.

ABC releases new statement on Gaza

This has just been sent out by the ABC:

ABC Director, News Justin Stevens: 

The ABC is the only Australian media organisation with a permanent presence in the region and we have repeatedly tried to get reporters back into Gaza. We had reporters in Gaza prior to the 7 October terrorist attack, but since then Israeli authorities have blocked access to international media to operate independently.  

In order to keep Australians fully informed, we rely on a network of freelance journalists and individuals on the ground to tell the story of what they are witnessing. We are deeply concerned about their health and safety.  

According to the Committee to Protect Journalists, at least 186 journalists and media workers, mostly Palestinian, have been killed while gathering evidence of the war inside Gaza since 7 October. That number includes journalists who have done work for the ABC. 

We’re now seeing the effects of food shortages on journalists we work with, which our correspondents have reported on: The hunger crisis inside Gaza will affect the news you see about the war

The ABC calls on Israel to again allow international journalists to report independently from Gaza, to allow all journalists to move in and out of Gaza and to ensure journalists in Gaza are safe.  

AAP

A promising fall in inflation has been heralded by a top Reserve Bank of Australia official, whose dovish comments will reinforce expectations of another rate cut.

The central bank’s deputy governor, Andrew Hauser, said data released by the Australian Bureau of Statistics a day earlier was “very welcome”.

The RBA’s preferred measure of inflation, the trimmed mean, fell from 2.9 per cent to 2.7 per cent in the June quarter.

Mr Hauser said the central bank had been looking for more evidence that inflation was moving sustainably back to the midpoint of its two to three per cent target band.

“And we’ve had another piece of that jigsaw yesterday,” he told an economic forum hosted by investment bank Barrenjoey on Thursday.

The central bank official reiterated the RBA’s strategy of ensuring interest rates brought inflation back to 2.5 per cent sustainably while keeping unemployment low.

“And to do that through a policy that is gradual, considered, measured. There’s lots of words – predictable,” he said.

The RBA stunned analysts by leaving rates on hold in July, with governor Michele Bullock telling a recent event its board preferred a “measured and gradual” approach to easing interest rates.

Money markets and economists widely expect the central bank board to lower the cash rate to 3.6 per cent, from a current 3.85 per cent, at its meeting in August.

Another interest rate cut would be “welcome relief” for mortgage holders, Treasurer Jim Chalmers said.

It reflected the “remarkable progress” Australia had made in cutting inflation in the last three years.

“But it’s never mission accomplished because the global environment is uncertain – we’ve got some persistent structural issues in our economy, growth in our economy is soft, and people are under pressure,” Dr Chalmers told ABC TV.

Opposition frontbencher Michaelia Cash said it was a good thing inflation was falling, but Australians were still doing it tough because prices had grown faster and for longer than elsewhere in the world.

“So Jim, take all the credit you like. But the bad news is you’re the architect of the cost-of-living crisis that Australians live under your government,” she told Nine’s Sunrise program.

In a bid to address structural issues in the economy, Dr Chalmers has convened a roundtable of experts, business and unions to discuss Australia’s productivity woes. They will gather in late August.

Building more homes sooner will be a central focus of the roundtable, the treasurer hopes.

“The primary focus there, I think, at the roundtable will be around how we speed up approvals and get the zoning for housing right, because we desperately need more homes,” he said.

But fault lines have opened up between businesses and unions on issues like the use of artificial intelligence.

Peak union body, the ACTU, has called for tougher regulations to ensure AI does not lead to job losses, while business groups have warned against regulation that could stifle the adoption of the technology.

Independent MP Zali Steggall called for the government to appoint a special envoy for AI and the future of work to drive adoption of the technology while addressing growing public distrust.

“I am concerned it’s going to be unions trying to put a lid on it,” Ms Steggall told AAP.

“Look, I am supportive of guardrails. It has to be done safely, but to suggest that you can put the genie back in the bottle is unrealistic.”

The former Winter Olympian on Thursday launched her economic plan to re-energise the economy while speeding the transition to net zero, by encouraging clean energy investment and reducing the cost of housing.

Representation counts

Skye Predavec
Anne Kantor Research Fellow

Australia has a politician problem: not too many, but too few.

Each of Australia’s 150 members of Parliament (MPs) must split their attention between more constituents than ever before: 120,659 voters per MP, over 6000 more than in 2022.

But while there are nine times as many registered voters today as in 1903 (the first election where women could vote), the number of electorates has only doubled.

Since then, Australia’s population, and voting rights, have expanded significantly: Aboriginal and Torres Strait Islander voting rights took until 1963, and the voting age was lowered from 21 to 18 in 1974.

As the number of voters per MP grows, the access any individual voter will have to their member necessarily decreases – Australia Institute polling research in 2022 found that only 15% of Australians had ever spoken to their local MP (and only 36% knew their name).

The more voters there are in an electorate, the larger a campaign needs to be to make any difference to the result, giving communities less power to kick out an unrepresentative or under-performing MP.

Australia is a lot bigger and more complicated than it was fifty or a hundred years ago. Australia’s first government, headed up by Edmund Barton, had 10 ministers while Albanese’s first ministry had 30 (plus 12 assistant ministers). That leaves fewer backbenchers to do important committee work and means a smaller talent pool from which to choose government ministers.

Expanding the lower house by 50% – to 225 seats – would bring Australia’s representation more in line with comparable democracies, as well as the states and territories.

It’s time for our representative democracy to get a bit more representative.

Greg Jericho

The Fair Work Amendment Bill also included an amendment by the Member for Wentworth, Allegra Spender

Her amendment stated that the following be included (also worth noting she is not seeking to have the bill defeated)

1             (a) Australia has just had the worst decade for productivity in the past 60 years;

(b) boosting productivity is the only way Australia can sustainably increase wages over time;

(c) the Government’s agenda to lift Australia’s productivity is not comprehensive without considering the role of Australia’s industrial relations system; and

(d) in 2023, the Productivity Commission’s report Advancing Prosperity recommended that the Fair Work Act be amended to explicitly include productivity as an objective of modern awards; and

(2)  calls on the Government to amend subsection 134(1) of the Fair Work Act such that Productivity is an objective of modern awards, as per Recommendation 7.13 of the Productivity Commission’s report Advancing Prosperity”—

Now that is all nice a well, but penalty rates don’t actually affect productivity.

Remember that Labour productivity is the amount of output a worker does in the time they do it.

The amount they are paid does not come into it. That might affect profits, but not productivity.

And as former director of the Centre for Future Work, Jim Stanford wrote in his excellent paper on productivity  better wages can actually lead to better productivity.

As Jim writes, “improved compensation can motivate workers to perform better, and also reduces labour turnover (which hurts productivity due to the time and cost of replacing departing workers).” Essentially if you are well paid, you are motivated, if not, you turn up and do a half-arse job (as Homer Simpson would say).

Also if workers are well paid that actually creates and incentive for employers to invest in new and more productive equipment because they need to get as much value as they can out of the workers. With low paid workers, profits are good and companies can actually become lazy and low productive.

So all up – higher wages are good, penalty and overtime rates are fair, and we should not suggest they need to be cut at all to fix productivity.

In news that will shock absolutely no one, the Coalition is not budging on recognising a Palestinian state, even as Australian allies move in that direction because it is now seen as the only way to start a sustained peace process. Which in this case means – an end to the Israeli slaughter of Palestinian civilians in Gaza.

Here was James Paterson this morning at a doorstop:

I don’t, I don’t think the Australian government should recognise a Palestinian state until and unless there has been a successful negotiation of peace between Israel and Palestine as consistent with our long-standing bipartisan position on the resolution of this conflict. We support a two-state solution. We do not support recognising a state which is right now, today, governed in part, by a listed terrorist organisation that is holding 50 hostages, that swears the destruction of the Israeli state, and that’s just Hamas in Gaza.

There are profound problems with the governing authority in the West Bank as well, the Palestinian Authority, which hasn’t held an election for 20 years, which is deeply corrupt, which has paid money to the families of suicide bombers who have blown up Israelis, and which promotes hatred against the State of Israel and the Jewish people, and has not accepted their right to exist. So it is extraordinary that the Australian government would contemplate recognising such a state.

Members of Israel’s leadership are currently wanted by the ICC on allegations of war crimes. And yet that doesn’t seem to enter into Paterson’s concerns here at all.

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