Pearls and Irritations

Dutton regularly proclaims what he opposes, but what he will do in terms of new policies mostly remains a mystery or alternatively will not work.

We are now not much more than a year from the next election. Furthermore, following next Saturday’s by-election for the seat of Dunkley no doubt the political pundits will wax eloquent about what that tells us regarding who will win the main event next year.

It is therefore timely to consider what precisely Peter Dutton would offer by way of leadership, his priorities and what directions would he set?

In fact, as will be discussed below, Peter Dutton has focussed almost exclusively on criticising the Government and is best known for saying “NO!” Rarely has Dutton advanced an alternative policy solution.

Nevertheless, there are a few areas where he has a policy position (of sorts) and it is worth considering what that involves. In addition, the Coalition always see themselves as superior administrators of public moneys and again it is worth examining these claims.

The cost of living

Since Labor won government the Coalition, and especially Dutton have never stopped criticising the government for the increase in the cost of living.

Of course, it is true that since the election prices have risen faster than wages, which is a major reason why the cost of living has increased. But the fact is that this increase in prices relative to wages had already started before Labor took office.

Indeed, in retrospect at least, it is now apparent that the fiscal stimulus provided by the Government during the Covid lockdown was excessive, very poorly administered, and inflationary. The excess demand pressures that consequently developed under the Coalition is why the Reserve Bank started increasing interest rates before the election. Thus, it doesn’t matter who won that election, real wages were bound to fall in the year or more ahead.

Now the Coalition is saying that: “The only way to ensure sustained real wages growth is a back to basics economic agenda. We need to grow the economic pie so everyone can have a bigger slice.” Fair enough, but what exactly does it mean? What precisely is the Coalition proposing to make the economic pie bigger than what Labor is already doing? The truth is that the Coalition has never said what, and it must be doubted if they can.

Lower taxes

Another part of the Coalition’s mantra is that taxes will always be lower under a Coalition government – as if that was all that mattered. Of course, other things being equal we would all like to pay less tax, but at what cost? What would be the services that we then had to go without and what would be the consequences for our society and social cohesion if inequality is allowed to increase rampantly?

Furthermore, we have no idea what Dutton will propose by way of lower taxes, and probably nor does he. He has said that he would like to go back to Morrison’s original Stage 3 income tax scales, but he has also acknowledged that at a cost of $9 bn annually this change would be extremely difficult.

But if, as Dutton knows, there is no money available to finance lower taxes, why does Dutton keep promising that somehow in some unknown way, he will make it happen?

The one source of the necessary savings to finance lower taxes that Dutton has nominated is in the costs of administering government programs. However, as I explained in a previous article (Pearls & Irritations, 21 February), savings in the administrative costs of providing public services will never go anywhere near paying for significant tax relief.

The one change that Dutton has hinted at, is that he wants to stop bracket creep leading to rising average tax rates. In principle, a flatter, more proportional and less progressive income tax rate scale will be less likely to experience rising average tax rates. But how would Dutton hope to pay for any such reform along these lines without making most taxpayers worse off?

Furthermore, Treasury analysis shows that Labor’s change in the bottom tax rate means that average tax rates for the first seven income deciles will rise by less over the next ten years than would have been the case under the Coalition’s original Stage 3 Tax plan.

And in future, if we want to avoid bracket creep the best way would be to index the existing tax thresholds so that they increased regularly in line with inflation. That way the present reasonably progressive tax system would be preserved, and there are good reasons for this as those who find it easier to pay taxes should pay more proportionately.

Migration

Partly because of the recovery in student arrivals and working holiday makers after Covid, migration has been exceptionally high with more than 500,000 long-term and permanent net migration over the last twelve months.

In the midst of a housing affordability crisis, Dutton has seized on this high rate of migration, accusing Labor of wanting too big an Australia. But the Government has taken steps to return net migration to its pre-Covid average, and Dutton has nothing to add about what he would do.

Where Dutton feels on safer ground with his criticism is in relation to asylum seekers who arrive here illegally. Very recently, 37 asylum seekers arrived on a boat and Dutton sprang into his standard scare mode. He blamed the Government for losing control of our borders because of what he said was a cut in border force funding. However that was quickly exposed as a lie. While the boat arrivals were not allowed to stay and quickly dispatched to Nauru.

What Dutton never talks about is the number of asylum seekers who arrive here by plane and are then allowed to stay. Dutton as the responsible Minister, did not do anything to control these illegal arrivals by plane. Indeed, former Deputy Secretary of Immigration, Abul Rizvi, has estimated that while Dutton was directly responsible as the Minister, between 100,000 and 120,000 such asylum applications were lodged, and unlike arrivals by boat, none of these arrivals by plane were shunted into offshore detention (see Pearls & Irritations, 22 February).

Climate Change

Looking to Australia’s future there is no issue more important than the risks posed by carbon emissions leading to climate change.

Labor might be criticised for not doing more and more quickly to limit carbon emissions, but it is nevertheless way in front of the Coalition. While still in government the Coalition somewhat reluctantly did adopt a target of zero emissions by 2050. However, there was never any plan to realise this target, nor any intermediate targets to ensure action here and now.

Nothing has changed under Dutton’s leadership. Indeed, there are signs of further policy deterioration. Senior members of the Coalition are encouraging demonstrations to stop the necessary development of the transmission lines needed to bring the new renewable energy to the customers and opposing emissions standards for cars.

Dutton for his part has become an advocate of next generation nuclear technology which he claims is a climate friendly option. Unfortunately, that claim only reinforces concerns about Dutton and his regard for the truth.

All the experts, including Alan Finkel, the former Chief Scientist during the Morrison years, and a special adviser on low-emissions technology, are on record as saying it would take decades to deploy nuclear technology after the lifting of the present ban, if that were possible. But why will nuclear technology ever be developed as a source of electricity when it is so uneconomic.

For example, the CSIRO has calculated that in 2023 a mix of wind and solar power would generate electricity for $90 to $134 per megawatt hour, falling to $70 to $100 by 2030. This fall in costs is after allowing for the costs of $30bn to upgrade transmission lines and to build back-up power such as hydro.

By comparison, if small nuclear reactors, as favoured by Dutton, were available today, CSIRO has estimated the cost of the electricity they generated would be $380 to $640 per megawatt hour, dropping to $210 to $359 in 2030.

In short, Dutton has no idea what he is talking about when he advocates for nuclear power or else he is trying to deliberately mislead the public.

Management of public moneys

The Coalition has a long record of claiming that it is always a better manager of public moneys than Labor. As a general proposition this claim is debatable, but in Dutton’s case it is easily refuted.

Dutton as a Minister is best known for his time in Home Affairs and Defence. During that time both departments relied heavily on consultants – even excessively on consultants which cost a lot more money than public servants.

Labor has now started winding back this excessive use of consultants replacing them with permanent staff, which in 2022-23 increased by 1431 in Defence and by 1086 plus nearly 300 non-ongoing staff in Home Affairs.

But most importantly, the selection process for choosing these consultants and the monitoring of their performance was very poor. An inquiry into the Dutton-era Home Affairs Department by Dennis Richardson (a former Secretary of Defence and Foreign Affairs, and Head of ASIO) found that companies linked to serious crime were chosen by a non-competitive tender process to run the refugee centres in both PNG and Nauru.

Palladin the company chosen to run the PNG refugee centres breached its performance indicators thousands of times, but their contract was regularly renewed. And when KPMG was contracted to do an internal audit into Palladin, it was later discovered that it had audited the wrong company.

Similarly, the company chosen to manage a $1.8 bn rolling contract in Nauru between 2017 and late 2022 faced a separate Federal Police crime and bribery probe. In 2022 the Nauru offshore processing contracts alone cost $485 million despite there being just 22 refugees and asylum seekers left there.

Finally, the visa system failed miserably as revealed by a review by the former Victorian Police Commissioner Christine Nixon. First, there was inadequate vetting of visa applicants, resulting in many criminals being admitted to Australia. Second, there was inadequate follow-up of visa conditions, with many thousands of visa overstayers being allowed to remain in Australia.

While clearly Dutton’s Department of Home Affairs did not perform satisfactorily not all the blame can be sheeted home to them. As a Minister Dutton must accept final responsibility for such poor administration.

Conclusion

In short, as Chris Wallace wrote in the Saturday Paper, “the Morrison era has not ended – it has simply moved on to a new host.” Dutton leads a Coalition that is best known for what it opposes, rather than the development of positive policies to take the nation forward. Furthermore, he typically chooses scare campaigns, negativism and lies over argument.