Commonwealth of Australia January to June 2023

Abstract

After a relatively long and benign honeymoon since winning office in May 2022, the Albanese government gave all the impressions it had adopted a “softly-softly” pragmatic approach to governing by 2023, articulated by the Prime Minister at a special National Press Club address earlier in the year. It was purposefully eschewing much needed structural reform to instead pursue a range of narrow ideological trade union concerns in industrial relations and the casualisation of labour markets, including the use of contractors and “gig economy” workers. These Labor agendas included: union-preferencing for government contracts, funding a renewal in manufacturing and social housing, increasing wages of low-paid workers in the caring/service sectors through continuing government subsidies, greater access to subsidised child-care for families, increasing the minimum wage, and various job creation schemes. Although the government talked of having better relations with business and regularly professed an interest in enhancing greater productivity, few real initiatives were ever apparent and in fact many Labor policies were detrimental to factor productivity which had stalled and was at an all-time low (indeed the lowest level in sixty years). Job growth in the economy did pick up largely because of the huge increase in migration and in the return of overseas students after the COVID-19 pandemic. Marking the first anniversary in May 2023, PM Anthony Albanese said he wanted Labor to be in office for at least two more terms to establish a “Labor decade” in power.

But the government faced more immediate and pressing problems of inflation and tighter monetary policy settings. The Reserve Bank hiked up interest rates twelve times in thirteen months, placing increased pressure on mortgage-holders who had bought more expensive houses while the cash rate had bottomed at 0.1 per cent and mortgages were as low as under 3 per cent. The RBA took the cash rate to 3.85 per cent by mid-2023 despite the Governor of the Bank Philip Lowe unwisely indicating rates would not rise until 2024. Although Australia was not technically in recession, the GDP rate per capita was declining, leading some economists to claim we were in a per capita recession.

Since its election, the government had called for a myriad policy reviews, inquiries, and consultative discussion papers and issued numerous media-driven policy announcements with little substantiation. These vast number of reviews totalling some 140 over ten months in office, and reminiscent of the Rudd-Gillard approach to governing over the years 2007–13, were labelled a “welter of inquiries.” They included: the scope and cost of the National Disability Insurance Service (NDIS), defence strategy and separate navy review, migration and revised visa arrangements, infrastructure provision, energy and environmental management, emission caps and carbon offsets trading, competition policy, superannuation, a series of inquiries into the impact and policy responses to the COVID-19 pandemic, aged care funding, national hospital funding, overseas aid and development funding, higher education and technical and further education, early learning for pre-schoolers, cultural policies strategy and the multiculturalism framework, communications and TV anti-syphoning, censorship classifications for online gambling, digital defence/cybersecurity and personal privacy/safety regulations, silica kitchen benches, the Port of Darwin Chinese lease, Australian Securities & Investment Commission funding, and administrative review processes. The list was seemingly endless and forever expanding. Interestingly, even the Greens' leader Adam Bandt pointedly described the Albanese administration in an April address to the National Press Club as “tick-a-box government,” suggesting Labor had not done sufficient homework while in opposition.

The new federal National Anti-Corruption Commission was established in late June with a small executive headed by investigative lawyer Paul Brereton who claimed the body would develop a “reputation of being fearless, but fair, independent and impartial.” The cost of the corruption-busting agency was expected to be $262 million over four years, but almost all observers were convinced this figure was a colossal under-estimation once the inevitable “lawyers' picnic” took hold.

The commission soon chalked up an unenviable workload of initial cases to investigate mostly from political opponents. Although there were holier-than-thou claims by NACC's designers that politicians would not be making referrals, in the months leading up to its commencement, Canberra's political elites had promised to make multiplicities of referrals often based purely on political adversarialism and pay-back motivations. Indeed, within a couple of days in operation the commission had received an astonishing 49 referrals (five over the phone and 44 online), and by the end of its first week it had amassed over 180 referrals — principally politically motivated — leading one national cartoonist to quip in mock-congratulation: “that everybody [in Australia] has now been referred”!

Despite polls initially indicating variable levels of support for the Indigenous Voice early in the year, Albanese pushed ahead with the proposal in the face of limited opposition and yet much uncertainty. Opinion polls usually sampling only 1500 to 3500 voters indicated support levels at between 50 and 60 per cent, but with 30+ per cent against and high levels of undecided voters, often up to 20 per cent. A Resolve poll in January found 47 per cent in favour, 30 per cent against, and 23 per cent undecided. In February, as the legislation was about to be introduced, a nationwide Newspoll reported 56 per cent in favour, 37 per cent against, and 7 per cent undecided, but with hardening opposition among Coalition voters and some Labor supporters, the micro parties like One Nation, elderly people and tradies (Newspoll, 7 March 2023). Other polls even before the final wording was known and agreed suggested that few states looked like they would carry the constitutional referendum, with WA and Queensland regularly reporting the lowest level of support. Many in the media especially the ABC actively advocated for the Voice, with some Indigenous affairs journalists even suggesting that there would “not be a No campaign.” The Nationals federal party was hostile from the outset (before the question was formally given), while the Liberals were more ambivalent before eventually finally declaring their opposition, calling it the “Canberra Voice” heralding simply more bureaucracy. The referendum bill eventually was introduced into parliament in March 2023 and budgetary provisions were accordingly allocated in the budget. In a sign of some rising consternation within government ranks, a slimmed-down version of the Solicitor-General's official legal advice on the Voice was publicly released (the edited “highlights”) claiming it would not fetter or impede government, nor responsible and representative government.

A joint parliamentary committee conducted a brief and relatively perfunctory review of the wording to be presented to Australians in the referendum, now featuring Indigenous recognition as well as the proposed establishment of a Voice to parliament and the entire apparatuses of executive government. Unsurprisingly, the majority report of the committee recommended no change to Albanese's wording of the proposed referendum question — although the ignored minority report did — leading critics to claim the review was a “fix” and that alternative proposals had not been properly considered because of political pressure from the PM. When the parliament finally voted on the measure in June, it passed both houses with the Liberals (and Nationals) giving support and “waving it through” arguing that Australians should have the democratic right to cast an opinion (the lower house vote was 121 for and just 25 against). Thereafter, representatives of the major parties began preparing the 24-page referendum booklet with the official Yes and No cases limited to 2000 words of text without any images or pictures. No date for the holding of the referendum was given, leading to much speculation and conjecture. With the legislation passed, much of the “corporate sector and elite activist class” publicly endorsed the proposal joining the “Yes advocacy bandwagon.” These included: state premiers and their governments, big business, the major banks, media organisations, academe and the universities, top lawyers and law bodies, unions, churches and charities, major sporting and community associations, individual sporting stars and celebrities, and many regional Indigenous councils. The Greens senator Lidia Thorpe, herself Indigenous, publicly opposed the proposal and soon quit the Greens party saying it did not go far enough in terms of never-ceded sovereignty, treaty, and truth-telling. One of the leaders of the No vote side, Senator Jacinta Price, gave a notable address to the National Press Club in early July in which she said the referendum was “separatist” and that the regional areas of Australia were not enamoured with the proposal, claiming the Yes side had under 35 per cent support across all the regions, and that in Dubbo the figure was a mere 21 per cent in favour. She had replaced Julian Leeser as Aboriginal affairs spokesperson for the opposition in April, and her analysis proved to be prescient and her prominence key to the No case.

In late February, the Treasurer Jim Chalmers released a poorly conceived “discussion paper” on superannuation seeking to change the existing objective of superannuation, enshrine equity in its objectives and force superannuation funds to invest in social projects which would not maximise client returns. Admitting that 23 million superannuation accounts now existed, the paper ruled out arbitrary draw-downs, denied early access to super, and proposed a possible restricting of inheritance to family members as estate planning. To much criticism and hostility from the sector about breaking election commitments and changing the goalposts, he also suggested that super balances of over $3 million would be taxed at 30 per cent, which a few days earlier had been set at $5 million, forgetting that around one third of superannuants were on defined benefit pensions mostly in the public services and universities. The Treasurer received over 3000 submissions opposing his intentions, which he later referred to as: “the shellacking I got over my superannuation” changes. In April, the Treasurer released the findings of the inquiry into the Reserve Bank of Australia, which not unexpectedly argued for a separate monetary policy board with dedicated monetary expertise. It also recommended that full employment ought to be an equal priority for the bank along with curbing inflation, a long-held Labor shibboleth.

The government announced in March that it would buy an unspecified number of nuclear-powered submarines either from the USA or UK under the AUKUS agreement (and possibly build our own in South Australia as an industry policy measure). Defence minister Richard Marles could not decide whether to buy or make them, and which type of submarine we would acquire — the US Virginia class or the UK Astute-class vessel. The government would need to repeal the legislation banning nuclear power in Australia, create a new as-yet unspecified submarine port, and the expected timelines were also unclear running out well past 2040, if ever we would receive a vessel. The National Audit Office was additionally very critical of a lack of clear objectives and political interference of politicians in major procurement decisions for ships, aircraft, and equipment. The Housing minister Julie Collins was spectacularly unsuccessful in getting her off-budget social housing fund of $10 billion established due to a lack of oppositional support and the balance-of-power Greens seeking far greater funding as well as direct rental assistance. The fund was meant to be invested in the stock market to earn interest of up to $500 million per annum (if successful) and spend the increment on social housing possibly through a housing commission mode of delivery.

In March, a political scandal involving former Greens senator (and subsequently Independent) Lidia Thorpe erupted when it emerged that the senator with access to confidential national security information had had a relationship with a notorious bikie with criminal links. While she was no longer in a relationship with him, it compromised her position (leading some critics to label her a “one person wrecking ball”). She was eventually cleared of contempt by the Senate after she assured her colleagues that she had not discussed any sensitive information with him. She later in June claimed that the Senate was not a safe place for women, claiming a colleague David Van had followed her, aggressively propositioned her and inappropriately touched her. Van shortly quit the Liberal party — but remained in parliament — after multiple inappropriate touching allegations were made against him.

In June, it emerged that a major scandal involving a breach of confidentiality and conflicts of interest had been occurring for years involving the accounting consultancy firm PWC whose senior executives had been privy to internal treasury deliberations about taxing multinational companies intended to help inform the government's future intentions. Instead, PWC executives “disgracefully” circulated the confidential information to its senior staff and to corporate clients to better evade the intended measures and help minimise their tax burden. While the scandal seemed restricted to the consultancy firm's Australian operations, up to 68 partners and senior executives were apparently privy to this confidential sensitive information; a major embarrassment to the firm and to government. A range of corrupt behaviours were referred both to the new NACC and Australian Federal Police.

Despite some misgiving, the government continued to insist it was committed to implementing the Stage 3 tax cuts, legislated in the 2018 Budget by the Coalition before it lost office and coming into effect on 1 July 2024, which some on the left thought too generous to high income taxpayers. In his 2023–24 Budget, the Treasurer spent much of his presentations “Disraeli-style” flattering his ministerial colleagues (probably because he had refused their budget bids in ERC) but managed to predict a small surplus of $4.2 billion which he wanted to try to hang on to. Although cost of living pressures were mounting, Chalmers provided a $14.6 billion relief package (out of a $21 million largesse of additional spending) but only provided relief measures mostly to those already on government welfare benefits (such as pensioners and the unemployed), and not to “middle Australia.” He claimed Labor would make “savings” of $74 billion over the next ten years, a claim that was widely disbelieved as “wishful thinking” with increased spending demands from health, aged care, defence, NDIS, and energy transitioning. Other measures encouraged doctors to triple bulk-billing, $3 billion in “energy relief” including $500 for household electricity bills, and pharmaceutical scripts moving to 60 days' supply up from 30 (not in itself a budget measure but which enraged chemists enormously).

However, future deficits of $35.1, $36.6 then $28.5 billion were predicted in the four-year forward estimates, and the level of net debt was expected to rise to $702.9 billion by 2026–27 (or 24.1 per cent of GDP) up from its present level of $548.6 billion, with gross debt exceeding the trillion-dollar mark at $1067 billion. No real fiscal plan was announced to contain spending or taxation levels. A small number of taxes were increased, including an increased levy on gas producers, higher heavy vehicles levies, tobacco taxes, and departure taxes at airports. Some Labor MPs were publicly angry that the JobSeeker increase of $40 per fortnight was inadequate, advocating an increase of 40 per cent taking the benefit level to over $1000 per fortnight, up from its current figure of $693. Some welfare lobbyists argued the JobSeeker payment should be increased by $266 per fortnight, almost seven times the amount the government offered. The opposition predictably labelled the Treasurer's balancing-act budget as a “dead cat” budget, full of “pie in the sky forecasts” and short-term “sugar hits” (The Australian, 10 May 2023).

Although Labor was cautious and disciplined in government, outer minister Andrew Leigh issued a public critique of the stranglehold Labor's factions exerted over the party and its policies, arguing it was anathema to good policy design, as well as the recruitment of talent and promotion on merit. With 104 Labor members of the federal parliament, only two were non-factional or unaligned, with the rest selected and beholden to the traditional factions identified nominally as “left” and “right” sub-groups. With the collapse of the more intellectual “centre-left” faction by the early 2000s, Labor's factional composition resembled an “undemocratic” cartel, a collusive “duopoly” of anti-progressive forces. Many weaker ministers were in office purely on factional grounds or were Albanese supporters.

In March, the new Speaker, Milton Dick, caused enormous mirth in Question Time when frustrated by interjections he ruled that “the time to interject is when the minister is speaking”; to great guffaws from the assembled members, he corrected his ruling to confirm he meant: “not when the minister is speaking”! His performance as Speaker seemed to be improving, but he still struggled to keep ministers' answers relevant to the opposition's questions.

Other comings and goings included the former PM Kevin Rudd taking up his appointment by Albanese to the plum ambassadorial job in Washington in March, although some questioned his temperament if not his credentials. On taking up the post, Rudd was reportedly furious that Trade minister Don Farrell was going to appoint an old union mate and shoppies official, Chris Ketter, to the plum job of trade commissioner and consul-general to San Francisco despite having no trade or business experience.

Better news for the government was that, with Alan Tudge resigning from parliament in February, the April by-election in the conservative Victorian seat of Aston held by a margin of 2.8 per cent (but was previously over 10 per cent safe) was effectively a two-way contest between Labor and the Liberals. Labor's local union candidate was Mary Doyle who had challenged Tudge in 2022, while the Liberals chose to recruit a member of the Melbourne City Council, Roshena Campbell, who had professional credentials but who was not from the local electorate. Somewhat unexpectedly, Doyle won the seat quite comfortably with a two-party preferred vote of 53.6 per cent to 46.4 per cent giving Labor now 78 seats in the House and a working majority of five. The outcome was described by senior Liberals as a “cataclysmically bad” result and represented the first time in over a century that a government had won a seat from the opposition at a by-election, quite a rare achievement.