Saturday’s good reading and listening for the weekend

Sep 4, 2021
Australian-American Pacific War Memorial – 70 years of ANZUS

What people in other forums are saying about public policy.

Contents


Last week’s roundup of good reading and listening


Last Sunday’s weekly email to Pearls and Irritations subscribers did not include any reference to the good reading and listening roundup.

The roundup was, and still is, on the website. The part on the pandemic is now history, but the parts on Afghanistan, the far right, and refugees are all current, as is a reference to John Menadue’s part in past refugee policy.

If ever you miss the weekend roundup, or want to look at earlier entries, there are links on my website www.ianmcauley.com.

My thanks to all those who e-mailed me last week asking if I had died, had another bicycle accident, or joined the National Party. Be assured that I’m still ferreting out political and economic content for Pearls and Irritations readers.

Ian McAuley


The pandemic’s progress


Coronavirus politics

The 70% and 80% spin

If we listen to Prime Minister Scott Morrison, to New South Wales Premier Gladys Berejiklian, or to most journalists who deliberately or inadvertently pass on Liberal Party spin, we would believe that we are on the path to 70% and 80% vaccination and that we can enjoy marvellous freedoms once we meet these targets – “a different life” once we reach 70% to quote Berejiklian.

Those 70% and 80% figures are a gross deception. They relate to a portion of the population – those aged 16 and over (80% of the whole population). So “70%” equates to only 56% of the whole population, leaving 44% of Australians unvaccinated. Similarly for “80%”, which equates to 64% of the whole population, leaving more than a third of the population unvaccinated, providing a huge pool of people for the virus to rip through. These are national averages: some regions may be well below these levels. Any significant opening up in these early stages would soon overload not only our hospitals but also our mortuaries. No responsible government would go beyond making only minor concessions at these levels of vaccination.

It makes perfect sense for governments to push people to become vaccinated, but the figure on which we should focus is the proportion of the population that is not vaccinated. The table below, derived with straightforward arithmetic from ABS population statistics, converts the Liberal Party spin into meaningful percentages of the population eligible for vaccination (12 and over), percentages of the whole population, and, most importantly, the percentage of the population not vaccinated.

Most epidemiologists are talking about the need to get vaccination rates of the whole population up to the 80s or 90s. Health experts are warning that opening up at 80% of the 16+ population won’t be safe.

In this table we draw attention to Singapore, a city-state of 5.7 million, similar to Sydney and Melbourne in many ways. Their vaccination level is 80%, heading to at least 83% (93% among the 40-59 age group). Even at these levels the Singapore Government says it is still in the preparatory stage of transition to endemic COVID-19, and has a wide range of restrictions, such as a daily limit of household visitors, severe restrictions on the unvaccinated, and widespread mask mandates. Its daily death rate over the last three weeks has been about 0.1 per million, which would equate to about 2.5 daily deaths in Australia – about 900 a year.

By contrast in many European countries vaccination rates are tending to plateau at between 55% and 70% – around the “70% and 80%” thresholds in the Liberal Party spin. Their daily death rates are much higher than Singapore’s – around 1.0 per million in the UK which has a 63% vaccination rate. The USA, with a vaccination rate of 52% (not much lower than our “70%”) and generally loose public health and safety measures, has a daily death rate of 4.0 per million. That would equate to 100 deaths a day or 37,000 deaths a year in Australia.

With these experiences to go by, it is no wonder that in our remaining states and territories where the delta variant is yet to take hold, chief ministers and premiers are hesitant about opening up. But Treasurer Josh Frydenberg doesn’t seem to be concerned that Victoria’s attempt to eliminate COVID-19 has failed, as if it is better for Victoria to go through the same period of misery as New South Wales, rather than keeping its economy running Covid-free until it can achieve a high rate of vaccination. If only those recalcitrant Labor premiers of Queensland and Western Australia follow his advice! (Older Australians who can remember when recalcitrant premiers thwarted every move by the Whitlam government must be enjoying a little Schadenfreude. Political memories are long.)

Election tactics

That all begs the question why the Coalition is taking such a hard-line approach to “opening up”. Crispin Hull suggests that they want to see the economy opened up prematurely to find a sweet spot when we start to enjoy freedom from lockdowns and other public health and safety measures, with a chance to hold the election before the death toll starts to mount. But that would be politically disastrous. If we were to dispense with most controls when we hit 80% of the 16+ population vaccinated, possibly in December, we may enjoy a January of “normal life”, but the misery of hospitalisations, overworked health care workers, deaths, and community fear would kick in faster than the election.

The more likely possibility, already foreshadowed by Berejiklian (who is far from fully on board with Morrison) is that the concessions will have to be modest, and confined to the fully vaccinated. That would be a let down for many people, and would really annoy those who are still waiting for their second doses and who, reasonably or unreasonably, are worried that vaccines for children would still not be approved.

Surely it would be politically better for the Commonwealth, with support from all states, to abandon its 70 and 80 and go for meaningful rates of vaccination, with tangible progress as we approach the election date.

Maybe Morrison realises that such a path is impossible in view of the committed schedule of vaccine supply. (But will the 4 million doses of mRNA vaccines from the UK, enough to vaccinate 8% of our population, prompt him to change his message?) Ross Gittins sees much of the problem in terms of the Coalition’s small government obsession: fiscal cost-cutting may lie behind the government’s stinginess in buying vaccines and its refusal to invest in quarantine facilities. Maybe, as we suggested last week, Morrison does not want to go too hard in encouraging vaccination, lest he alienate a petulant crowd of anti-vaxxers and libertarians – such the group of truck drivers, accompanied by Pauline Hanson, who blocked a freeway to protest against lockdowns and vaccine mandates. Writing in The Saturday Paper Paul Bongiorno sees signs that the Coalition is looking forward to support from Clive Palmer and renegade Craig Kelly in the election, and may even be thinking of an election in November. Unlike conservative parties in Europe, Coalition strategists are incapable of imagining a path to government without having to rely on the extreme right.

The ABV Test

One Pearls and Irritations reader points to an article in The Australian two weeks ago by Robert Gottliebsen, “ABV test” threatens Australia’s mRNA vaccine push (paywalled).

Belatedly, in May this year the Commonwealth called on biotech firms to make preliminary bids to make mRNA vaccines in Australia. CSL is one of the front runners and already has an mRNA research program, according to Donna Lu, writing in The Guardian: Covid abnormal: why is Australia so far behind on making its own mRNA vaccines?

Gottliebsen confirms that CSL has such an interest. CSL people have met with Canberra officials, he writes, and they were told there would be Commonwealth support for such a project “provided it meets the ‘ABV test’”.  “ABV” is an acronym for “Anywhere but Victoria”, in spite of the fact that all of CSL’s facilities and expertise are in Victoria, and the Victorian Government has already announced that it would support such a project.

He writes that “the hatred of Daniel Andrews runs deep in Canberra and New South Wales and Queensland is where money can be well spent to gain votes”. He goes on to write about the meeting:

Neither the prime minister, (Health Minister Greg) Hunt, the treasurer or (Industrial Relations Minister Michaelia) Cash were involved, but if they succumb to the ABV infection, the nation is headed for a terrible period as we head to the election because vote buying won’t stop there.


Our path through the mess

The outbreak

Thursday night’s 7.30 starts with Norman Swan’s outline of the situation in New South Wales and Victoria.

In New South Wales the virus is still spreading with neat, textbook exponential growth. (The fitted equation for daily cases is 75.057 x e0.579 x, where x is the number of days since July 15. The coefficient of correlation is 0.99.) It’s still on a path to double every 12 days. That equation would have daily cases reaching 6500 by the end of September. At some point the growing level of vaccination should start to slow down the virus’s spread: Swan suggests that will be in early October. Over the coming weeks we will see if there is any inflection from this so-far constant rate of growth. No sense in a graph – it’s a boring straight line on a logarithmic scale.

In Victoria cases are now in the hundreds with a daily growth rate of 10% (doubling in a week). That’s significantly faster growth than in New South Wales so far.

The ACT may have its outbreak under control. The government acted expeditiously, did not yield to every demand by “small business”, and applied measures across the territory rather than trying to cordon off hotspots. Markus Mannheim of the local ABC, using Google travel data, has produced some analysis – a tale of three cities – lending strong weight to claims that the New South Wales government could have done far better in its initial and ongoing approach to the delta outbreak. It is evident from his graphs that people in Sydney and Melbourne were ahead of their governments in taking precautions. Maybe the ACT will clean up its outbreak but because of its location and the New South Wales government’s laxity in restricting movements, any periods of zero-Covid in the ACT are likely to be short.

Vaccination

From here on we will cover vaccination progress every two weeks: the weekly graphs by age group were getting a little crowded. One hint of where New South Wales and Victoria may be headed in the near term is an analysis of COVID-19 infections in the ACT made last week  by local ABC journalists. As at Friday, 84% of the territory’s 327 cases have been under 45. The article includes a chart, updated to August 28, showing the age distribution of infections. The incidence of infections among those aged 10 to 19, particularly young women, is striking. By contrast there have been very few cases among people over 60. In the ACT 43% of the population is now fully vaccinated, and more than 95% of those over 70 have had at least a first dose, on their way to full vaccination. But as in other jurisdictions there is a low rate of vaccination among those under 40, particularly among the very youngest.

It is possible that this will be the experience in New South Wales and Victoria as older people rapidly become more fully vaccinated and younger people are left waiting. In passing we might note that the voting age is 18: that may go some way towards explaining the Morrison government’s indifferent approach to vaccination for young people.

Contrary to rhetoric about a “roadmap” (a meaningless metaphor anyway) there is no one clear path from here on. We have the Doherty model, with its key findings and implications well spelled-out. It’s a model driven by three variables – the level of vaccination, the extent of public health and safety measures (PHSM), and the effectiveness of trace, test, isolation and quarantine (TTIQ). A model with three variables has a huge range of possible outcomes –  it would take a 3-dimensional hologram to display the range.  On Monday’s Health Report, with help from Sharon Lewin of the Doherty Institute, Norman Swan gives a short summary of the report (14 minutes), stressing the need to maintain some PHSM measures, including the occasional lockdown, at those 70 and 80% levels. TTIQ effectiveness is a crucial variable, and Swan suggests, based on overseas experience, that contact tracing starts to break down at 50 cases a day – a point also made by Richard Denniss.

The outcome in terms of hospitalisations and deaths is highly sensitive to small changes in those three variables. The Doherty model shows a way to get the virus’s reproduction rate, R, below 1.0, but it doesn’t take much variation from their optimal values to push it above 1.0. If New South Wales still has a high number of daily infections when it reaches that 70% (44% of the population unvaccinated), even if case numbers are on the way down, contact tracing will still be lagging and any loosening of PHSM measures could see the virus growing once more.

Another person stressing these points about the sensitivity of the situation is entrepreneur Matt Barrie in his detailed critique and explanation of the model: Australian public fed nonsense as country heads to “irreversible” decision, essentially emphasising parts of the Doherty report that are relevant to a situation where TTIQ resources are overloaded.

We should keep in mind that Doherty’s is a model of fixed assumptions and behaviours, but the way people interact with the virus isn’t fixed. When R is above 1.0 infection grows exponentially, less than 1.0 it peters out (also exponentially but in the negative direction). If R stays above 1.0 for a time and the outbreak gets to be intolerable, people react: people hunker down and/or demand that their governments take tough measures. If R stays below 1.0 for a time, and the virus virtually disappears, then people become slack, and put pressure on governments to ease restrictions, resulting in R going back above 1.0.

Those are the dynamics of a virus interacting with people. Any idea that R can be held exactly at 1.0, in some imagined equilibrium between stress on hospitals and the performance of the rest of the economy, is fanciful. But that’s the way some people seem to be interpreting the Doherty model.


COVID-19 in Aboriginal communities

Remember that document grandiosely called the COVID-19 vaccine national roll-out strategy, promising 87,000 doses for “Aboriginal and Torres Strait Islander people >55” in Phase 1b, and 387,000 doses for “Aboriginal and Torres Strait Islander people 18-54” in Phase 2a?

It was just another piece of Morrison spin.

It turns out that fewer than 12% of Aboriginal and Torres Strait Islander people living in New South Wales are fully vaccinated, according to Kalinda Griffiths, writing in The Conversation: The first indigenous Covid death reminds us of the outsized risk NSW communities face. This is in spite of specific warnings having been sent to Morrison 18 months ago about the urgent need to protect the people of Wilcannia where, by early last week, 69 of the town’s 720 people had contracted coronavirus.

On Tuesday’s ABC News Breakfast Peter Malouf of the Aboriginal Health and Medical Research Council pointed out that there were 700 active cases in Aboriginal communities, mainly in western New South Wales. He had believed that the Commonwealth had a plan to vaccinate indigenous people in remote communities, but it turns out that such a plan is only now being developed. On the same program Linda Burney said she was “sick of the federal government blaming vaccine hesitancy for the outbreak”.

Wilcannia Hospital

The rest of the world

World figures

World figures show a miniscule fall in total deaths, but as we have suggested before, death figures from countries where the virus may be spreading strongly are flaky. In our own region deaths in Indonesia and Malaysia seem to be on the way down, but they are still rising in Myanmar.

Intellectual property

Ten countries have used 85% of 5 billion doses of vaccine so far produced in the world – a world that needs up to 15 billion to achieve a safe level of vaccination and to suppress the likely emergence of new variants. Standing in the way of such an outcome are WTO rules on intellectual property. Even though mRNA technology has been almost entirely funded by public investment, the profits have been appropriated by private drug companies.

These are the theme of a 50-minute webinar (thankfully with a transcript) by the Institute for New Economic Thinking: The Obscene Obstacles to Global Vaccine Distribution with Lori Wallach of Global Trade Watch and Jayati  Ghosh of the University of Massachusetts. One revelation is that mRNA vaccines are actually simpler and easier to produce than traditional vaccines.

Living with Covid in the USA

The Atlantic has two articles on living with Covid:

Americans are losing sight of the pandemic endgame by epidemiologist Céline Gounder. It’s about people’s hopes, or even expectations, that vaccines can give 100% protection, and people’s idea that the virus can be eliminated. With some biological details in plain language, she puts a convincing case for vaccination, based both on community health and personal protection.

Vaccine refusers don’t get to dictate terms anymore by Juliette Kayyem, former Assistant Secretary for Homeland Security under President Barack Obama. She puts the case for going beyond “nudges” and soft incentives for people to get vaccinated, and for using tougher sanctions against those who refuse vaccination.  “The vaccinated have for too long carried the burden of the pandemic” she writes. It’s a warning about a possible loss of sympathy for the unvaccinated, particularly in situations where there is competition for scarce health care resources.


Data sources

See our separate web page of hyperlinks to generally reliable information and analysis about COVID-19, including data on vaccination and the World Health Organisation COVID-19 epidemiological updates.


Other politics


The greater good is what’s good for Morrison

John Hewson has become a regular contributor to The Saturday Paper. His piece last week was The politics of the greater good. In a way that Labor never quite manages, he captures Morrison’s impoverished idea of democracy:

For Morrison the good always goes to the greatest number of people, even if that is only the slim majority of so-called ‘quiet Australians’ required to hold office. The greater good is what’s good for him.

In his contribution Hewson calls on Australians to embrace a different form of politics – one that allows us to confront the challenge of climate change with the same energy and cooperation as we are dealing with the pandemic.


How to establish a thousand-year Reich

The survival of parliamentary democracy depends on “an equality of arms” to use George Monbiot’s term in his post How to rule forever. He lists the mechanisms used by autocrats including Narendra Modi, Viktor Orbán, Recep Tayyip Erdoğan, Jarosław Kaczyński, Vladimir Putin and Alexander Lukashenko to “maintain the process and appearance of democracy – including elections and parliaments – while ensuring it doesn’t work”. New surveillance tools, such as Pegasus spyware, add to the autocrats’ armoury.

He is particularly concerned about already-established measures, and proposals in his own country – the UK – to strengthen the government’s hold on power, for example a proposal to abolish the electoral commission.

In view of the way UK practices tend to shape some of our own politics, we should heed Monbiot’s warning.


The Biloela family

Writing in Eureka Street, barrister and migration lawyer Paul Cutler considers the legal situation of the Murugappan family – well-known as the “Biloela family” – of Tamil asylum seekers now that the High Court has refused special leave for the youngest daughter to make a visa application –  What is a just outcome for the Biloela family?  He points out that there is plenty of scope for the minister to grant this family settlement visas without setting any precedent that may weaken Australia’s immigration laws.

Those seeking a little more background on the Murugappan family’s case can find it in Josh Taylor’s Guardian article: High court rejects bid to appeal Biloela child Tharnicaa Murugappan protection visa case.


The far right and misinformation


Misinformation and how we absorb it

We’ve probably come across Daniel Kahneman’s work Thinking fast, thinking slow (good lockdown reading). ANU PhD student Matthew Nurse has studied the way people respond to COVID-19 misinformation, finding that people who think based on their instincts are more likely to believe and share COVID-19 misinformation: on health matters we do well to engage our slow thinking capabilities. People tend to dismiss far-out statements such as “The coronavirus is not a virus. It’s 5G that’s actually killing people and not a virus”, but are more ready to accept uncritically a statement such as “The truth is that the WuXi pharma lab located in Wuhan, China, is where COVID-19 was developed and conveniently broke out”.

Matthew Nurse has a five-minute interview on the ABC’s PM: Intuitive thinkers more prone to misinformation.


Misinformation – the supply side

It pays to approach all news sources with a degree of scepticism and to have well-honed bullshit detectors. It is also useful to take a look at the sources of fake news and other misinformation.

That’s what Richard Aedy and Siobhan Marin, do in the second episode of the ABC’s This much is true. With the help of a cast of experts they take us into the world of dreamweavers – people who make stuff up (as opposed to people who simply get stuff wrong). They talk about “influencers” in the “wellness” industry who appeal to our individualistic instincts to convince us that we wouldn’t need vaccination if we followed their ideas of managing our bodies.

Money is one motivator – there are people employed by scammers who can profit from fake news, but a desire for self-promotion is another. There are plenty of epidemiologists, for example, who will all give much the same advice about COVID-19. But someone with a crazy theory can make a name for himself or herself.

They take us into some of the tactics of fake-news mongers, particularly those used by right-wing strongmen. They start with what is credible before taking us into plausible conspiracy theories before getting into weirder and weirder theories. They also report that some fake news starts with jokes or hoaxes. It can be fun to spook people or to test people’s gullibility, but it can get out of one’s control.


A resurgence of far-right terrorism

“In 2020, the number of domestic terrorist plots and attacks in the United States reached its highest level since 1994.”

That’s a quote from Cynthia Miller-Idriss of the Polarization and Extremism Research and Innovation Lab at American University in her Foreign Affairs article From 9/11 to 1/6. She’s referring to far-right terrorism. The far-right had a resurgence in America and around the world (she specifically mentions Australia and New Zealand) following the 9/11 attacks, and it has only strengthened since. Making use of social media, and exploiting people’s anxieties about immigration and multi-culturalism, it has infiltrated mainstream political movements and gained representation in parliaments. Of even more concern is its “adoption of the Marxist Italian thinker Antonio Gramsci’s call to spur revolution not by physical force but by gaining control over how people think, through education and cultural change”.

Miller Idriss is author of Hate in the homeland: The new global far right.

(It is strange that governments and security agencies tend to differentiate between Muslim terrorists and other terrorists, even though they are united in intolerance, hatred, misogyny, and xenophobia. Jihadists occupy much the same position on the left-right spectrum as the Proud Boys and the Klu Klux Clan.)


The Murdochs in America

If you’ve blown your exercise allowance in lockdown, or if you seek confirmation that Murdoch’s Fox News went from a traditional right-oriented news source to a propaganda arm for Donald Trump, then a two-part Four Corners series – Fox and the Big Lie compiled by Sarah Ferguson – makes for good viewing. (Links to Part 1, and to Part 2.)  Much of the content is based on interviews with former Fox News staff, mainly former political editor Chris Stirewalt. It would be easy to suggest that Ferguson has chosen her sources from the left, but they are generally right-of-centre conservatives. One, for example, is former Fox military analyst, retired Lieutenant Colonel Ralph Peters, who gives a short assessment of Rupert Murdoch:

My country gave him so much. And how did he repay that? By cynically backing Donald Trump. Fox has carved out a market among the people from whom I emerged, among the people with whom my coal mining ancestors worked and he’s turned them into an angry lumpen proletariat. These are inherently decent people. They’re the kind of people that join the military, that do the really crummy jobs to make our country go. The Fox I joined did represent those people, did speak to those people. It was reflecting their views. But over the years, it became a shaper of their views, deforming their views, corrupting their views. And in pursuit of what? More power and money.

The first part goes up to the 2020 election night, concluding with what Murdoch saw as treachery, when Fox News (correctly) called Arizona for Biden, potentially undermining the “stolen election” lie. The second part is about the January 6 insurrection, and a court case brought by voting machine companies, outraged that Trump has accused them of rigging the count in favour of Biden. In reflecting on the insurrection, James Murdoch, who has parted company with News Corp, said:

The storming of the Capitol is proof positive that what we thought was dangerous is indeed very, very much so. Those outlets that propagate lies to their audience have unleashed insidious and uncontrollable forces that will be with us for years.


Economics


Relax – the lights aren’t going out

The story from the fossil fuel lobby is that because renewable energy is intermittent, and because so many of those lovely coal-fired power stations will soon be closing down, we need the assurance of new fossil-fuel generators, perhaps even a new coal-fired one, or at least a subsidy to keep old plants operational for a year or two.  (See “the cost of keeping coal-fired electricity capacity” in last week’s roundup.)

That support is not needed. The Australian Energy Market Operator (AEMO) has produced its annual reliability outlook, finding that there is plenty of supply to meet reliability standards over the next five years. The only possible threat to reliability comes from those old generators’ and transmission lines’ exposure to the risk of climate change:

Continued rapid development of new large-scale and distributed renewable resources and dispatchable firming capacity (battery storage and gas generation) has helped improve the reliability outlook for summer 2021-22 and the first five years of the outlook. Existing and committed future electricity supply is projected to be adequate to support forecast demand under most conditions prior to the expected closure of Victoria’s Yallourn Power Station in 2028, although the power system is also becoming more exposed to extreme weather events that could lead to supply scarcity.


Another rort for the old and wealthy

If you have an account-based superannuation fund – the type most people with a “self-managed” fund use – and are in retirement phase, you are supposed to draw down a certain percentage each year – 5% if you’re aged between 65 and 74, 6% if you’re aged between 75 and 79, and so on. This is to make sure funds are used to fund retirement rather than to build up a family dynasty through inheritance – one small concession to good public policy in a superannuation system that otherwise disregards most notions of equity.

In March last year, as COVID-19 took hold and spooked global stock markets, the Morrison government halved these drawdown requirements as a temporary measure for those lodging a 2019-20 tax return. In view of the tumble in share prices in March, that looked like a good idea at the time: people shouldn’t have to be compelled to drawn down too much from their retirement savings.

Ken Davis, of the University of Melbourne, writing in The Conversation, points out that in May this year the government extended this measure: No longer a temporary Covid measure, the government’s super changes will most help wealthy tax dodgers. Boosted by low interest rates the stock market has boomed over the 2020-21 financial year, and APRA reports that superannuation funds have done very well. There is no justification for this extension.


Responding to recessions

The conventional Australian economic wisdom is that as the business cycle moves into a downturn or recession, “automatic stabilisers” help to stabilise the economy.  Government revenue falls as individuals and businesses pay less income tax, and outlays rise as the government pays out more in social security transfers (mainly unemployment benefits), thus providing a “hands off” fiscal stimulus.

The ABC’s Gareth Hutchens draws our attention to another possible automatic mechanism, now being proposed by Canada’s Conservative Party in opposition, which would automatically give people cash grants once the national unemployment rate hits a threshold: If the economy’s in recession, shouldn’t stimulus payments be automatic?  Research by the Brookings Institute (linked in Hutchens’ article) attests to the effectiveness of cash payments to stimulate the economy because people given a small windfall are  inclined to spend it rather than to save it. (That is in line with the permanent income theory.) Our governments have used cash grants on two occasions – in response to the GFC in 2008 and in response to the pandemic last year – with the benefit that they can be activated in the early stages of a recession.


National Accounts

GDP rose by 0.7% in the June quarter, but there was a fall in GDP per hour worked, indicating a fall in labour productivity. One notable area of growth has been public investment by state and local governments, while investment by the Commonwealth remains subdued. The Commonwealth has been providing transfer payments to firms and individuals, but the stimulus measures with enduring economic benefits are falling to state governments.

Reflecting what has been a good year for shareholders, thanks in part to billions spent on “Jobkeeper” to firms that didn’t need it, the profit share of GDP has resumed its trend to rise at the expense of wages.

Over most of the March-June period, all Australian states were close to Covid-free, apart from a small outbreak in Victoria in June. The New South Wales outbreak got going only in late June, and wouldn’t have affected the June quarter national accounts.

Because of lockdowns in our two largest states, the September quarter will almost certainly show a sharp fall in GDP. Will the economy be in recession, however? Although the Reserve Bank gives a considered and nuanced description of what constitutes a recession, politicians and the media tend to use two consecutive quarters of negative growth to define a “recession” and politicians do anything they can to avoid such an outcome. Thus, two quarters of minor decline in GDP would be called a “recession”, while one quarter of sharp decline, followed by a rapid but only partial recovery, would not be called a “recession”, even if the net result over six months is a worse outcome.  See the sketch below.

Expect to hear a lot more political spin about the word “recession” in the next few months.  There may be some competition for naming rights, but perhaps it should be known as the “Berejiklian recession” or the “recession we didn’t have to have”.


Housing market deteriorates further

In August housing price inflation continued apace at 1.5% over the month, as revealed in the CoreLogic report on housing values.  Over the year to August the annual inflation was 18.4%, the highest for 22 years according to Tim Lawless of CoreLogic. The worst performing market was Hobart, where prices have risen by 7.2% over the year. (Why does the media insist on calling unaffordable housing a sign of a healthy market?)


The financialization of water

Robber barons and high-speed traders dominate Australia’s water market is the title of a Conversation article by Scott Hamilton and Stuart Kells about the way the market for water in the Murray-Darling Basin has become a playground for financial speculators, detached from any notion of efficient resource allocation. In fact the water market is even less regulated than other markets, having been specifically excluded from provisions of the Corporations Act and the ASIC Act.

Pondering financial opportunities in the MDB

They refer to a report by the ACCC, published in March this year, that found:

Trading behaviours that can undermine the integrity of markets, such as market manipulation, are not prohibited, insider trading prohibitions are insufficient, and information gaps make these types of detrimental conduct difficult to detect;

   and

The complex nature of the Basin’s market settings means the market’s trading systems and opportunities are best understood and leveraged by professional traders and large agribusinesses with the time and knowledge to analyse and navigate them.

Stuart Kells also has a 15-minute session on Late Night Live. Their book is Sold down the River: How robber barons and Wall Street traders cornered Australia’s water market.


A universal basic income

Anglicare has presented an analysis, based on a large survey, of how Australians would respond to a universal basic income: Valuing every contribution: what a basic income would mean for Australians. People would adjust their behaviour, allocating more time to work that is currently unpaid – volunteering and caring in particular. Greater income security could give people more confidence to improve their education, and pursue business opportunities. (Economic activity would no doubt increase, while measured economic activity – GDP – would probably decrease.)

Anglicare’s work draws in part on a paper published in The Economic and Labour Relations Review Between universalism and targeting: Exploring policy pathways for an Australian Basic Income by Ben Spies-Butcher, Ben Phillips and Troy Henderson. They model an “affluence-tested” basic income – that is, one retaining some means-testing, but with other characteristics of a UBI. Unsurprisingly they find it would reduce inequality and poverty. It could be funded by raising our taxes (currently near the lowest of all prosperous “developed” countries) to around the OECD average.

The journalist Matt Wade has a short article on basic incomes on the Basic Income March website: A new Basic Income Lab has been established to research how it could apply in Australia. He also has an article in the Sydney Morning Herald$18,500 a year for all: a basic income would reduce inequality, says study, including comments by Emma Dawson of Per Capita who questions whether a UBI might be financed at the expense of important public services, particularly health and education.


Corporate snouts in the public trough

Senator Rex Patrick has been busy attending to the public interest in a way that the Morrison government isn’t.

He wants the tax office to reveal how much companies with a turnover of more than $10 million have received through the “JobKeeper” subsidy and how much they have repaid. “There are some companies that effectively have taken taxpayers’ money and funnelled it through to the wallets of investors and executives through executive bonuses”, he writes.  That is not the purpose for which Parliament allowed the Morrison government to make “Jobkeeper” payments, he points out in a 10-minute interview on ABC Breakfast.  He reminds Executive Government and public servants of their responsibility to Parliament, not just executive government. (10 minutes.)

The case of Harvey Norman has received a deal of publicity: it received $22 million of “Jobkeeper” funding and paid $6 million back, but it enjoyed a bumper year and managed to pay out $473 million in dividends. But there are many other companies that received money they didn’t need, mainly because when they applied for “JobKeeper” they over-estimated the impact of COVID-19 lockdowns on their business. For many, “JobKeeper” should have been a working capital loan to get them through a few tough months before the return of pent-up consumer demand, but they didn’t repay it.

The ABC’s Dan Conifer has used data from the Parliamentary Budget Office to reveal some aggregate figures relating to firms that received JobKeeper while enjoying increased turnover – JobKeeper went to thousands of companies whose turnover tripled at the height of the COVID-19 pandemic in 2020.

If you have seven minutes to spare you might enjoy watching Frydenberg on the 7.30 trying to defend the indefensible in relation to “JobKeeper”.

Patrick’s idea is hardly radical. It is based on the same principles by which Centrelink re-coups over-payments, and on New Zealand’s equivalent of “JobKeeper”. On the New Zealand Ministry of Social Development website you can find full details of payments made to firms. If a firm has repaid its grants it is removed from the database.

While we’re on the subject of slush funds we might be wondering why almost all COVID-19 testing is done in pathology labs, rather than by lower-cost rapid antigen testing. Emilia Terzon’s article on the ABC website – COVID-19 testing is lining the pockets of pathology companies. Now other firms want in – provides some insights.


Foreign affairs


Happy birthday ANZUS, but you are showing your age

Seventy years ago, in the wake of the Pacific War and during the Korean War, Percy Spender, who had just resigned as foreign minister and had become Australia’s ambassador to the US, signed the ANZUS Treaty on 1 September, 1951.

Last week’s Foreign Affair on the ABC’s Saturday Extra is devoted to ANZUS, with a range of commentators – Paul Kelly of The Australian, James Curran of the University of Sydney, and Susannah Patton of the United States Studies Centre – providing both a factual history of our alliance with the US and their views on where it is heading, particularly in light of the end of the Afghanistan war and America’s general retreat from world engagement. We learn, for example, that Menzies was sceptical of the benefit of a treaty with the US.

There are different views among the participants. James Curran states that “the addictive strategic drug of the alliance is so powerful that sometimes it has the capacity to detract from a more self-reliant Australian view of the region and of the world” while Kelly is more positive about the treaty. (32 minutes.)

Emma Shortis of RMIT University, writing in The Conversation, argues that The ANZUS treaty does not make Australia safer. Rather, it fuels a fear of perpetual military threat. She writes “ANZUS does not provide Australia with a security guarantee, and it never will. And, perhaps more importantly, even if it did, it does not make us safer”.

She is author of Our exceptional friend: Australia’s fatal alliance with the United States.


Pakistan and its mates

Understandably recent world attention has been on Afghanistan. But Afghanistan is a country of 38 million, while right next door and through a porous border there are much bigger geopolitical tensions in neighbouring Pakistan, a country of 220 million. Pakistan has been the nursery of the Afghan Taliban and has its own large Taliban presence, tacitly (and often openly) supported by the Pakistan Government.

On last week’s Saturday Extra Geraldine Doogue interviewed Michael Kugelman of Washington’s Winston Center: A pyrrhic victory for Pakistan. His is an account of a heap of state actors (Pakistan, India, Russia, China, the US, Afghanistan) and non-state actors (Pakistan’s Taliban, Afghanistan’s Taliban, ISIS, Pakistan’s security service) who don’t necessarily love one another very much, and who will be adjusting to new power balances and perceived interests.


Where to now for America

Stan Grant, writing on the ABC website, reviews two books about America’s decline on the world stage, with a fair bit of his own insight added in: As the US military leaves Afghanistan, two Americas are on show – and questions about power are swirling. He writes:

America’s has been a slow unravelling. From Korea to Vietnam to Iraq and Afghanistan, it has been fought to a standstill at best and defeated at worst.

At the same time, it has been battered at home: lurching from political scandal and corruption, economic collapse, terrorism, crippling inequality and growing anger. It is a country bitterly politically divided. Abroad it has squandered power and prestige.

Whatever role the US Government may want to play on the world stage, it is constrained by contradictory imperial and liberal aspects of its own history, and by other nations’ expectations and strategic manoeuvrings.

The books he mentions are Daniel Immerwahr How to hide an empire (2019) and Alfred McCoy In the shadows of the American century: the rise and decline of US global power (2017).


Polls and surveys


Newspoll – trend to Labor confirmed

William Bowe’s Poll Bludger reports that the latest Newspoll gives Labor a 54:46 two-party lead over the Coalition. This should be read with caution: each poll includes sampling error and there are many assumptions in calculating two-party support based on primary vote intention. A series pf Newspoll finding, however, confirms that over the last 12 months support for Labor has been growing while support for the Coalition has been falling.

Writing in The Conversation Adrian Beaumont warns that some of the Coalition’s vote is drifting to “others” – specifically far-right allies of the Coalition. “It’s plausible this drop was due to Clive Palmer’s ubiquitous anti-lockdown ads gaining some support from the Coalition’s right”, he writes. That may be overstating the Coalition’s resilience: the Coalition already had Palmer’s strong support in the 2019 election, and even so its 41% primary vote allowed it to just scrape into office. Beaumont’s strong point is that Morrison enjoys a consistent personal lead over Albanese, which presumably can be turned to voting support if he frames the election as a presidential contest.


Essential – political preferences, Covid-19 and Afghanistan 

The fortnightly Essential Report covers a swag of issues.

The political contest

On questions about approval or otherwise and preferred prime minister, the gap between Morrison and Anthony Albanese is slowly closing.  No doubt some people would be approving of Morrison’s performance on the basis that they believe he is hastening his own political demise.

The “preferred” PM curve over the same period is not worth displaying: for more than a year Morrison has had a fairly steady 20% lead over Albanese.

Essential still doesn’t seem game to ask a direct question about voting intention, but they have a question “Which is closer to your own view about the federal Coalition government” with options “Deserves to be re-elected”, “Time to give someone else a go” and “Unsure”.

If the answer to that question predicted voting intention (with “unsure” responses allocated 50:50) that would give Labor a five point two-party lead over the Coalition. There is a significant age gradient in the responses: people aged 18 to 34 would dearly like to see the Coalition out of office, while people over 54 think they deserve to be re-elected.

COVID-19

A slim majority, now just 3% difference between “good” and “poor” assessments, still think the federal government is responding well to the COVID-19 outbreak. People in New South Wales are particularly unimpressed.

In states with lockdowns people are particularly disapproving of their state governments’ handling of COVID-19. The question is about state governments’ “response to the COVID-19 outbreak”, not specifically about lockdowns. A subsequent question asks people in New South Wales and Victoria if they think restrictions are “too strong”, “about right” or “too weak”. More than 60% in most classifications go for “about right”, but of the remainder more go for “too strong” than for “too weak”.  Also 82% of people find the restrictions clear and easy to understand. (There is a lot to be found out about that remaining 18%)  People are more trusting of medical experts and state governments than the federal government as a source of advice, and the media score even more poorly.

On barriers to vaccination, respondents are roughly 50:50 in their allocation of blame to people unwilling to get vaccinated and a shortage of supply.

On what have become important political questions, people were asked about aspects of living with Covid:

On the general approach to Covid:

“Get COVID-19 cases down as close to zero as possible” – 44%;

“Live with a few cases of COVID-19, as long as there are very few hospitalisations and deaths” – 44%;

“Live with COVID-19, even if there are hospitalisations and deaths” – 12%.

On a question about how many deaths a year people would find acceptable, 61% went for less than 100, and a further 25% went for a figure between 100 and 1000. Very few went for a higher number of deaths, suggesting that the lobbies calling for an early opening up are out of touch with public opinion.

On public health and safety measures, most people understand (realistically) that “actions to prevent the spread of COVID-19, like wearing masks in crowds and practising social distancing, should be required even after we achieve the vaccination targets {70 and 80% of the 16+ population}” and a majority believe “we should not be easing COVID-19 lockdown restrictions until a substantial proportion of children are fully vaccinated”.

On the questions relating to COVID-19 there are many disaggregations according to age, gender, party identification and state. In terms of party identification those who identify as “other” (other than Coalition, Labor and Green), are more likely than other respondents to mistrust all sources of information, to feel uninformed, to oppose lockdowns, and to be accepting of high death numbers.

In all, these survey results suggest that people support a cautious opening-up as vaccination levels rise, but they do not go along with the idea of opening up to such an extent that there would be thousands of deaths a year. The Australian on Tuesday used a You Gov survey to support a headline Australians speak: save our jobs, mental health (paywalled), followed by the statement “Australians are more worried about job losses and their mental health than they are about a large breakout of COVID-19 cases and deaths”. Detailed survey results, published in the body of the paper, do not support such a categorical interpretation: People are generally equally concerned about deaths, jobs, mental health, and catching Covid. Some of the survey’s choices are poorly worded, constraining respondents to a narrow and non-encompassing set of choices. But in all it is in line with the Essential survey.

The You Gov survey has a question on vaccination, with one of the choices “Haven’t been vaccinated and I don’t want to be”. In any quality newspaper this should have prompted a headline “Worrying signs of vaccine refusal”, for it shows a 14 per cent agreement with the statement, and a steep age gradient: 20% of those 23 or younger agree, with much lower agreement among older age categories.


Webinars

Australia Institute webinars

Tuesday 7 September, 1100 AEST: Brendan Crabb of the Burnet Institute and Richard Denniss of The Australia Institute, “Controlling Covid –  why we need vaccines plus TTIQ and other public health measures”.

The Australian Institute’s webinars are free, but registration is essential. See the Institute’s seminars web page.  Also from the web page you can find recordings of previous webinars, or you can find them on Australia Institute TV.


Fanfare for the common man and woman

See how Vola, the manufacturer of bathroom hardware, brought the Aarhus Symphony Orchestra to its factory in western Denmark. We will provide a link when Amazon puts on a similar event at its Moorebank warehouse.


If you have comments, corrections, or links to other relevant sources, we’d like to hear from you.  Please send them to Ian McAuley — ian, at the domain name ianmcauley.com

See Michael West Media for more analysis of these and other economic and political issues, and watch out for Peter Sainsbury’s Sunday environment round up.

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