June 02, 2022 Edition
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In Australia
we have a new PM and are seeing a frenetic pace being set by the new
government! We now have a new cabinet and an Energy crisis! Oh dear!!
In the US another mass shooting of nippers has triggered soul-searching but no action to date as expected. I wonder if anything will change?
In the UK Boris looks wobbly again while the EU battles the Russian war. I really to hope it end soon…
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Major Issues.
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Why Albanese will face a teal wave in 2025
This election was all about the money: if you had it, you swung against the Liberals. If you didn’t, you swung towards them.
John Black Election Analyst
May 22, 2022 – 2.56pm
The old days of factional elites dictating pre-selections and taking their most loyal supporters for granted ended on Saturday night.
Whatever we eventually see as the national two-party preferred vote and whatever the outcome on the floor of the House of Representatives, the pure Liberal party base vote, 23.7 per cent, has sunk below the point at which it can recover without a major reinvention at the national level and a lot of old-fashioned hard work at the local level.
The Labor Party on 32.8 per cent is not all that far behind them, as our 2019 modelling showed that inner-city ALP seats such as Grayndler and Sydney are now more vulnerable than the Liberals to the teal/independent wave in what were once their safest electorates, as captain’s pick Kristina Keneally proved in Fowler on Saturday night.
The likely Labor majority on the floor of the House of about 79 seats is based on exceptionally slender primary vote margins between Greens and Labor candidates, which decide whether the Greens elect Labor or vice-versa – just as the Liberals are now learning that, if their primary vote drops below 43 per cent, they are likely to lose to an independent teal challenger.
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Liberals will take a generation to recover from loss: polling expert
Hannah Wootton
22 May, 2022
The Liberal Party’s annihilation in Victoria may take a generation to recover from, former Labor strategist and director of strategy and campaigns at RedBridge Group Kos Samaras warned.
“The Liberal Party has a huge problem on its hands - they lost the 2018 Victorian election and lost significant support in its safe seats in Melbourne, and they took no lessons from it whatsoever,” he said.
“Melbourne is effectively now a very centre-left city and the Liberal Party thinks it’s still the 1990s.“
He said the people currently with power in the party were the “byproduct of a system that’s been rejected by people in Victoria, and particularly in Melbourne, to such an extent that it’s going to take a generation to change it” unless the party undergoes widespread personnel change.
He said voters had been driven away from the Liberals “overwhelmingly” because of their lack of climate action, but that integrity concerns also played a role.
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What to expect from the new Labor government
Some early down payments on reform would be helpful, perhaps starting with industrial relations where the parties had made good progress in 2020.
Craig Emerson Columnist
May 22, 2022 – 2.41pm
Updated May 22, 2022 – 5.03pm
On Saturday, Australians elected as their new prime minister the only son of a single mother who lived in a council flat. How good is that? Regardless of how you voted, it’s cause for celebration of the egalitarian streak that defines our great nation.
No-one held back and no-one left behind has been Anthony Albanese’s mantra. That he is passionate about no-one being left behind is easy to understand.
He experienced hardship as a boy and witnessed his mother enduring it, riddled with arthritis, struggling to provide for him, assisted by the state through her entitlement to a pension.
But where along the way did the radical Sydney University student protester embrace the view that no-one should be held back?
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https://www.afr.com/politics/federal/how-the-coalition-lost-the-professional-class-20220522-p5anhk
How the Coalition lost the professional class
The Liberal Party forgot how to understand corporate Australia. It must find a way to remain a part of it.
Michael Roddan National Correspondent
Updated May 22, 2022 – 5.15pm
Late last year, Scott Morrison gave a lengthy pre-election speech to a ballroom of Sydney’s top corporate executives and representatives.
After running over the standard acknowledgement to the Indigenous traditional owners of the land, Morrison also raised an acknowledgement to ex-servicemen and women.
“Can I also acknowledge, as is my habit, anyone who is serving in our defence forces and certainly those who are veterans, and simply say on behalf of a very grateful nation, thank you for your service,” Morrison remarked, in what had become routine for the prime minister.
The senior banker I was sitting next to leaned over and said: “That’s what really gets me about Morrison. He can’t just leave the acknowledgement to itself. He has to make a political point about it.”
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https://www.afr.com/markets/equity-markets/two-parties-are-no-longer-preferred-20220522-p5angn
Two parties are no longer preferred
The federal election has left Australia without a functional opposition, giving the ALP a vast opportunity, as well as great responsibility.
Grant Wilson Contributor
Updated May 22, 2022 – 5.15pm
So, the teal zeal was real. It has consigned the Coalition to electoral oblivion, and durably altered the Australian polity.
Our forecast that the election would be “unprecedented in Australian political history” now seems like an understatement. It will take years, decades even, for the magnitude of what just happened to be fully appreciated.
At the strategic level, the challenge for the ALP will be to co-opt the mandate for change that Australians voted for.
This will be difficult for a party steeped in “It’s Time” mythology, especially if it claws its way to a majority in the House. The natural tendency will be to claim a change mandate of its own, yet to cleave to the small targets articulated during the campaign.
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Election 2022: The hidden economic traps facing Anthony Albanese
Eric Johnston Follow @ejohnno
May 22, 2022
In a little over two weeks time Prime Minister Anthony Albanese and his treasurer Jim Chalmers will be given the unwanted gift of the biggest interest rate rise seen in Australia in more than two decades. That 40 basis point rise is very likely to be followed by another rate hike in July as the Reserve Bank seeks to tame raging inflation.
From surging inflation, a slowing Chinese economy and a real risk the US could slip into a recession, the Australian economy and the new government is set to be tested.
As AMP Capital chief economist Shane Oliver said earlier Sunday: “Governing in a world of higher inflation and interest rates will be the main challenge for the new Government”.
In its May board minutes released last week the RBA said it is concerned about inflationary expectations as it considered a 40 basis point hike in May. The message remains: more hikes are on the way.
Economists see the cash rate hitting as much as 2 per cent by the end of this calendar year from 0.35 per cent currently. This will require the most aggressive round of rate hikes since Paul Keating was Prime Minister in the early 1990s.
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6:00am, May 23, 2022 Updated: 7:08pm, May 22
Alan Kohler: This was Julia Gillard’s election victory
It’s tempting to think the Coalition lost the election purely because of climate change, as I foreshadowed here in April, but there’s much more to it than that.
Women rose up and voted as a group, mostly for the future of the planet, but also for integrity and the better treatment of women.
And while Julia Gillard hardly figured in the campaign, her treatment 10 years ago at the hands of men in both major parties was the unexploded bomb that finally went off on Saturday.
Australia’s only female prime minister, so celebrated and loved by Australian women, was torn down first by Tony Abbott, and then by Kevin Rudd.
Her treatment was flagrantly sexist and unforgettably nasty, and Australian women have not forgotten: For them revenge is a dish served cold.
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High hopes for meaningful education reform under Labor
Julie Hare Education editor
May 22, 2022 – 4.18pm
Bringing a modest education policy agenda to the election should not preclude Labor from bold and strategic reform, starting with the early childhood years.
And Labor’s track record for positive engagement with education policy will go a long way toward mending the toxic relations between the Coalition and the sector.
“We can finally have a meaningful and real conversation about the system that works to provide a sustainable future for education, innovation and how we shape and drive Australia’s future,” vice-chancellor of Monash University Margaret Gardner said.
Labor’s commitment to create an accord that will bring together universities, unions, business, students and parents, and seek to have both Liberal and Labor representation, would rebuild trust and stability in the tertiary education sector.
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No political party can ignore women voters again
The new female dimension in parliament will help end the systematic undervaluing of women’s work.
Diane Smith-Gander Contributor
Updated May 23, 2022 – 10.25am
Elections are people’s chance to say how they want to be governed. And they certainly did that on Saturday.
The election confirmed Chief Executive Women members’ research that climate change was the number one issue facing Australia. Closely followed by gender equality issues and women’s workforce participation.
Let’s be clear – these are economic issues. What are they not? They are not issues for professional working women alone. They are issues for all women in Australia. And, by extension, all Australians.
The teal candidates got it, with many quickly endorsing the election platform CEW was promoting.
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The most important line in Albanese’s victory speech signalled the end of an era
Columnist
Updated May 23, 2022, 10.33am
It took a while to notice: how strange it was, suddenly, to be listening to a different type of language. On screen, Anthony Albanese was telling the country what he believed mattered, in words only a Labor leader was likely to choose. “No one left behind because we should always look after the disadvantaged and the vulnerable,” he said in his victory speech. Liberal language was gone: there was no dividing the country into lifters and leaners, into quiet Australians and those who won’t behave, into those who gave a go and those who apparently deserved whatever misfortune came their way.
This is one of the signal events accompanying a change of government: the sudden shift in background hum that accompanies everything we say and do. On Saturday night, the nation felt different. Listening to Albanese required a retuning of the ear.
Not all of this is about the words themselves. Language acquires force from how firmly it is connected to the world. When Albanese spoke of a government that “will respect every one of you every day”, his phrase gained power from the recent illustration of its opposite. The hateful way in which Scott Morrison attempted to transform some imagined fear of transgender people into a political weapon should remain a stain on his career, and become an enduring symbol of how nasty and devalued politics can become.
Because there is no doubt that Morrison devalued our politics, not just through his willingness to divide. He did so by using words as though they had no meaning. He did so by using crisp and crafted images as though they could displace reality. There are many reasons Morrison fell, but the clearest explanation is that reality became so sharp and urgent it could not be denied. Pandemic, bushfires and sexual violence could not, finally, be pretended away. They had to be dealt with, and Morrison was not interested.
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‘Loyalty no longer exists’: Why the teals could go after Labor next
Michael Read Reporter
Updated May 23, 2022 – 4.23pm
Community-based independents could dislodge Labor MPs from safe seats in Melbourne and Sydney at the next election if the party does not stop taking its voters for granted, a leading pollster says.
Six blue-ribbon Liberal seats fell to teal independents at Saturday’s federal election, but former Labor strategist Kos Samaras, director of strategy and campaigns at RedBridge Group, said the Labor Party could face its own challenge from independents at the next federal election.
Mr Samaras said Labor needed to start taking its safe seats seriously if it wanted to keep them in the fold.
“You can’t have a situation where voters within this electorate receive none of the funding because they are not marginal seats,” Mr Samaras said in an interview.
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Two foreign policy mind-sets that Labor must now adopt
Prime Minister Albanese has swiftly left for the Quad summit in Tokyo. But getting the instincts right on overseas relations means more than any to-do lists.
John McCarthy Former US ambassador
May 23, 2022 – 1.06pm
In the 1972 film, The Candidate, Robert Redford played a United States Senate hopeful, who, having unexpectedly won, turned to his political strategist and asked, “Marvin, what do we do now?”
Anthony Albanese is better prepared for the prize than was Robert Redford’s character, but on Australian external policy, the question would be fair.
The media and the blogosphere have not lacked Marvins suggesting how Australia’s post-election external policy should be conducted, most of which have been sensible.
But rather than try to handle a list of must-do’s, the new government should develop two crucial mindsets; the must-do’s would then follow naturally.
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Labor promised a lot during the election. This is everything you should expect to see
By Kat Wong
May 24, 2022 — 8.45am
Labor made about $18.9 billion of spending commitments on its way to winning the 2022 federal election and has outlined $11.5 billion in cuts to government spending and new revenue measures to cover some of its plans.
In response to increasing cost-of-living pressures, the party announced more generous childcare subsidies, housing affordability measures and cheaper medicines, while holding out the hope of better pay for workers. It also asked Australians to back it to act on climate change, aged care, a federal integrity commission and a “made in Australia” industry policy.
Now that the majority of votes are counted and there’s a new Labor government, we take a look at some of its key promises and what you should expect from Anthony Albanese’s team.
Childcare
Childcare was the biggest single spending measure in the Labor campaign with a $5.4 billion pledge to increase subsidies for 96 per cent of families. The party promised to increase the Higher Child Care Subsidy rate, expand eligibility, and extend the subsidy to outside of school hours care. It said the lowest-income families would have up to 90 per cent of their childcare fees subsidised.
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Mr Albanese goes to Tokyo to face his first big security test
12:00AM May 24, 2022
Anthony Albanese has been handed a golden opportunity to establish his foreign policy and security credentials three days after a remarkable election win.
At the Quadrilateral Security Dialogue leaders summit in Tokyo, Albanese will meet three of Australia’s most significant partners in US President Joe Biden and prime ministers Fumio Kishida of Japan and Narendra Modi of India. First impressions matter. Albanese can make it clear a Labor government will remain a steady security partner during troubling strategic times.
The line about Labor’s bipartisanship on defence and security policy achieved its political aim to stifle a defence debate during the election campaign. Now is the time for Albanese to show our key partners he will drive a creative foreign policy designed to strengthen the rule of law in the Indo-Pacific, push back against the threatening behaviour of China and Russia, and help Southeast Asia and the Pacific Islands resist Beijing’s co-option and undermining.
Our new Prime Minister was right to say on Monday, before leaving for the summit, that Australia’s relationship with China would remain “a difficult one”. Beijing’s Global Times editorialises that this is solely Australia’s fault. So much for olive branches. Albanese needs to accept that the relationship won’t improve easily. Hence the need to shore up ties with the Quad partners.
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https://www.afr.com/wealth/personal-finance/why-more-smsfs-should-hold-bonds-20220519-p5amtt
Why more SMSFs should hold bonds
If you assessed the role of bonds purely on returns over the past 12 months, you would seriously question the point of holding them in your portfolio, but they have been a good investment for decades.
Ben Smythe Contributor
May 24, 2022 – 5.00am
Few investors realise that the global bond market is far bigger than the global stockmarket. Many spend an inordinate amount of time trying to “win” on the stockmarket and ignore the bond market when constructing their self-managed superannuation fund investment portfolio.
The main reason is because of the variability in returns. Bonds have traditionally delivered lower returns than equity markets (particularly recently in a low-interest environment) and with far less volatility. This lack of excitement in return variability, coupled with a less understood market pricing structure, has meant bonds have been typically under-represented in SMSFs.
The mistake that investors often make when looking at bonds and other defensive investments is to analyse their return in isolation. If you assessed the role of bonds purely on returns over the past 12 months, you would seriously question the point of holding them in your portfolio. However, other assets have thrived. In any given year, there will always be some asset classes that have performed well, and others that haven’t.
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https://www.afr.com/politics/federal/the-liberal-party-lost-by-standing-for-nothing-20220523-p5anu0
The Liberal Party lost by standing for nothing
Rather than pander to a loud and privileged elite in teal seats, the Liberal Party must start asking itself what it believes in and seeking support for policies that reflect those beliefs.
John Roskam Columnist
May 24, 2022 – 11.30am Updated May 24, 2022 – 5.31pm
If its behaviour in the three days since it lost the 2022 federal election is anything to go by, the Liberal Party is going to spend the next few years asking itself entirely the wrong the questions.
It’s no great mystery why the Liberals lost.
A lacklustre, tired, policyless and visionless, three-term minority government was asking for another three years in office. Absent another “miracle” the Liberals were always going to lose, exactly what the polls had been showing for at least the last two years.
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Abandoning classical liberalism turns the heartland teal
It is time real Liberals stopped listening to those bastardising their party’s philosophy to shroud Luddite attitudes towards progress and veil naked bigotry.
David Cross
May 24, 2022 – 11.59am Updated May 25, 2022 – 8.12am
Scott Morrison has been thumped by his own base. As the smoke clears from the electoral battlefield, it is clear the Liberal Party’s heartland has been decimated. Wentworth, Kooyong, North Sydney, Goldstein, Mackellar and Warringah: safe blue-ribbon seats that are traditionally held by ministers, prime ministers and future leaders – now in the hands of teal independents.
The recriminations have begun. Some cry foul over the extent to which these independents share policy platforms and funding sources. Others (looking at you, Matt Canavan) – inebriated from consuming after-dark news rhetoric and numb from the reassurances given to them by the populist echo chamber – think the Coalition has been consigned to the opposition benches because of their recent commitment to net zero.
The truth is that the Liberal Party has dragged the Coalition into opposition because it abandoned its commitment to its namesake’s philosophy. Particularly in relation to climate change, Scott Morrison ditched classically liberal policy positions in favour of disjointed populist slogans.
For decades, the Liberal Party held that government exists to ensure equality of opportunity by promoting individual liberty, protecting institutions, embracing the free market, conserving heritage and removing regulatory obstacles.
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What Labor’s election victory means for your money
By John Collett
May 24, 2022 — 11.52am
The new Labor government’s commitment to reducing childcare costs and making medicines cheaper will be a financial shot in the arm for many Australians struggling to keep up with the rising cost of living.
Analysts say the change in government will not impact official interest rates, mortgage repayments or house prices, while petrol prices will continue to be high because of global economic forces.
However, other measures, such as closing the gender pay gap, and a pledge to reduce climate-change emissions to foster cheaper renewable energy, would have longer-term financial benefits to householders.
Shares
The Albanese government’s policies could also impact the performance of several sharemarket sectors.
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Economic risks come stalking as Labor takes office
International economic storm clouds are building and the threat of global stagflation is real. Some economic observers think the 2022 election may have been a good one to lose.
John Kehoe Economics editor
Updated May 25, 2022 – 2.57pm
The previous three times Labor has won office from the opposition benches in the postwar period, international forces and circumstances largely beyond the government’s control quickly dragged Australia into recessionary conditions.
It’s an unlucky coincidence and not a fair reflection of Labor’s ability to govern.
But as the Albanese government takes office, it is a salient warning at a time of heightened economic risks from soaring global inflation, rising interest rates and indebted government budgets.
A global oil price shock ignited the mid-1970s recession under Gough Whitlam, before his big spending and wage rises fanned the flames. Bob Hawke walked into the 1983 recession that resulted from high global inflation, central banks raising interest rates and a local drought. Kevin Rudd faced the 2008 global financial crisis. Australia avoided a technical recession of two consecutive negative quarters of growth, but unemployment rose from 4 per cent to 6 per cent. The new treasurer, Jim Chalmers, was a senior adviser to then treasurer Wayne Swan during that crisis.
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https://www.afr.com/policy/economy/chalmers-dire-budget-pressure-warning-20220525-p5aoea
Chalmers’ ‘dire’ budget pressure warning
Updated May 25, 2022 – 6.21pm, first published at 5.53pm Updated May 26, 2022 – 10.13am
Treasurer Jim Chalmers has warned that the dire budget position and “skyrocketing” inflation mean the Labor government cannot afford extra spending beyond its election commitments, as he accused the Morrison government of failing to disclose all the budget pressures.
In his first news conference as Treasurer, Dr Chalmers said not to expect the budget to improve immediately despite high commodity prices and low unemployment.
In response, budget experts said there could be rising debt repayment costs due to higher interest rates, infrastructure projects cost increases from a shortage of workers and materials, defence spending pressures and cost overruns from the Coalition’s ongoing spending booked as one-off grants.
The very optimistic annual productivity growth assumption of 1.5 per cent used by Treasury for the former government may also need to be revised lower due to the slump in productivity over the last decade.
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Change or die: Liberals need to find ‘sensible centre’ to survive
Award-winning political commentator and author
Updated May 26, 2022, 10.57am
Unless Liberals heed the lessons from the complete repudiation on Saturday of Scott Morrison’s style of leadership and governing, then they are destined to spend a long time in opposition.
It certainly doesn’t mean lurching to the right. Nor does it mean unthinkingly veering left to Labor’s agenda, although to remain relevant they will have to support chunks of it, including on climate change, childcare, the Indigenous Voice to parliament and an integrity commission.
Instead of drifting aimlessly on policies, neither left, right nor centre, as they have been for the past few years under Morrison, searching for culture wars to wage or picking fights over issues which should have been settled long ago, they need to be in the sensible centre to survive with their horizons focused beyond the “Sky After Dark” mob.
They have to stand for something more enduring than whatever spin, stunt or sneaky manoeuvre will get them through the daily news cycle. They either change or they die.
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Wong takes on Beijing over climate, debt and influence
By Eryk Bagshaw
May 26, 2022 — 6.52pm
Singapore: Foreign Minister Penny Wong has warned Pacific leaders a region-wide security and trade deal with Beijing could sacrifice their independence, lead to unsustainable debt levels and endanger the region.
Wong spoke in Suva after new Prime Minister Anthony Albanese blamed the former Coalition government for China’s rising influence in the Pacific, arguing Australia had “dropped the ball” by neglecting its closest neighbours.
Australia's Foreign Minister launches a charm offensive in the Pacific in a bid to counter influence from China.
Albanese said the security deal between Beijing and Solomon Islands signed last month was “just the first of a range of deals that they want to exercise” and that Australia had to increase respect as well as funding for the Pacific.
In her first press conference as foreign minister, at the Pacific Islands Forum on Thursday evening, Wong set off a fight over the future of the region as Canberra and Beijing vie for influence and allies through promises of economic development, security assistance and climate change action.
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Poor decisions, accidents and fate: How the Liberals imploded
The Liberal Party knew it was losing the election, yet some MPs whose careers were destroyed were in denial.
Aaron Patrick Senior correspondent
Updated May 27, 2022 – 1.14pm, first published at 12.07pm
A week out from polling eve, on the evening of Friday, May 13, Prime Minister Scott Morrison politely listened, a smile set on his face, as 30 Liberal Party donors sang him happy birthday around a dinner table in the Toorak compound of Melbourne entrepreneur James Roche.
Each diner had paid $5000 to $10,000 for salmon, lamb and Morrison’s precious time. Two birthday candles, in royal blue, and berries topped the chocolate cake, which served as dessert. The singalong was watched by Liberal MPs Jane Hume, Ben Morton, James Paterson and Katie Allen.
Drinking wine and beer, Morrison struck those present as strangely confident. After regaling his guests with triumphs of his government, he was asked to name one of his favourite books.
A three-part biography of US President Teddy Roosevelt, written by Edmund Morris, Morrison replied, because “Teddy was a bulldozer like me”.
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https://thenewdaily.com.au/finance/finance-news/2022/05/26/liberal-party-policies-alan-kohler/
6:00am, May 26, 2022 Updated: 9:53pm, May 25
Alan Kohler: Here’s a crazy idea for the Liberal Party – sensible policies
Apparently the Liberal Party now has to decide whether to move to the right or to the left.
It’s a very consequential decision, for it and the country, and a debate has started up in and around the party. Everyone and their budgie has an opinion.
“Go left”, say the lefties (aka moderates); “go right”, says the IPA, Sky After Dark and most of the Nationals.
Your correspondent’s opinion, since having one is obligatory, is that if the Liberal Party goes to the right, whatever that means, it will be doomed and politics in Australia will be transformed.
That’s because the teal independent movement – made up largely of climate change conservatives – isn’t going away and at every election from here on, the global temperature will be hotter and extreme weather events more difficult to ignore or explain away.
In other words, global warming will become more of an issue, not less.
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10:00pm, May 27, 2022 Updated: 10:54pm, May 27
‘Resistance‘: Sky News envisions climate revolt in election reaction
10:00pm, May 27
A week after Australia unceremoniously tossed the Coalition onto the opposition benches, an alternative vision for the party has emerged on the Liberal-National TV channel of choice, Sky News.
Its cast of “after dark” shock jocks, fresh from supporting Scott Morrison, have quickly turned carnivorous as the Coalition’s post-election bloodletting hits fever pitch.
Moderates such as NSW Treasurer Matt Kean and Senator Andrew Bragg – a “fool” in the view of host Andrew Bolt – are now nightly targets for derision as a stream of conservative leaders and party apparatchiks appear on the channel for polling post-mortems.
In the world curated by these Fox-News inspired talk shows, last week’s election drubbing (the worst result for the Liberals in 70 years) wasn’t a sign that the Coalition must finally get serious about climate policies.
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The Liberals learnt nothing from this traumatic result
Coalition politicians are blithely carrying on from day to day as if nothing notable happened last Saturday.
Laura Tingle Columnist
May 27, 2022 – 5.25pm
Updated May 28, 2022 – 11.03am
If she had a moment – between the celebration of a successful election campaign, travelling to Tokyo for a meeting with world leaders less than 48 hours later, then to Fiji – Penny Wong might have paused to consider the twists and turns of politics.
Thirteen years ago, as Kevin Rudd’s climate change minister, she worked through the night for two nights at the United Nations climate change conference in Copenhagen, catching power naps on a blow-up mattress, trying to push Australia’s case for international action on climate change.
It didn’t happen, of course. Negotiations collapsed, in a way summarised by her then-prime minister in an immortal quote captured by David Marr in his Quarterly Essay Power Trip as, “those Chinese f--kers are trying to ratf--k us”.
This week, as newly minted Foreign Minister, Wong was back on the world stage; this time she was not trying to persuade the rest of the world they should do something about climate change.
She was trying to persuade the rest of the world that a new government would do something about Australia’s own woeful record in the intervening period, and end the previous government’s willingness to do to an international climate accord what Rudd accused China of doing in 2009.
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by a strong rouble and surging coal, freight rates and shipping insurance costs, the people said.
https://www.smh.com.au/national/australia-didn-t-turn-left-it-wised-up-20220527-p5ap3z.html
Australia didn’t turn left. It wised up
Political and international editor
May 28, 2022 — 5.00am Updated May 28, 2022, 11.20am
When an election is held, powerful explanations for victory and defeat form quickly. They will direct political behaviour for years. Some explanations will be well-founded. Others will be myths.
What explains last week’s election results? Why was the Coalition defeated? Why did Labor win? What’s the meaning of the “teal wave”, the female climate change independents who captured the Liberal Party’s traditional heartland? And the others – Greens, Pauline Hanson, Clive Palmer?
There’s been an immediate effort to claim an overarching ideological shift. Some progressives argue that Australia has moved to the left. And if you put together the gains made by Labor, the teal independents and the Greens, you can see their point.
It’s true that Labor made a net gain of at least seven seats, the teals six, the Greens two. That’s a total of 15 seats in a House of Representatives with 151 seats. But is it true that this represents a shift to the left?
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Election 2022: How Scott Morrison and the Liberals knew party was over
10:53PM May 27, 2022
Late in the evening on Saturday, May 21, Jenny Morrison was dancing with friends in a private room at the Fullerton Hotel in Sydney’s CBD.
Some say she was beaming. Whether it was simply relief from the election campaign finally being over or the joy of knowing she now had her husband back after three grinding years is hard to say.
Whatever it was, the mood at the Liberal Party’s election-day after-party was not exactly what you would have expected following a loss of such catastrophic proportions.
It certainly wasn’t buoyant but it was no funeral dirge either.
To be sure, there were tears. People were emotional, including Scott Morrison’s chief of staff, John Kunkel. Morrison himself was subdued. But he was far from a downcast figure, according to those in the room.
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Dawning of the great national realignment
Anthony Albanese signals a new style of government that may fit the time.
By Paul Kelly
May 28, 2022
Anthony Albanese’s position as a new prime minister is stronger than it appears. Albanese benefits because this election delivers two results – a narrow ALP governing majority and a structural collapse in the social and cultural foundations of the Liberal Party vote.
This is a realignment election and Albanese becomes a realignment prime minister. This is the pivotal point and his unique opportunity. The realignment gives Labor more advantages than are apparent. Albanese has signalled a new style of Labor government that may fit the times.
The dreams of frustrated conservatives that Labor will finish in a first term blow-up are highly improbable. While Albanese scored a narrow win against the Coalition, it is the success of the teals that empowers his prime ministership. This is a gift beyond his making. Albanese is the lucky beneficiary of a segmental defection from the Liberal Party, perhaps the most damaging since its formation by Robert Menzies in 1944.
Prime Minister Anthony Albanese has promised to “do politics better” as he attempts to unite a nation experiencing “conflict fatigue”. Mr Albanese said he looks forward to leading a government that makes Australia proud, pointing to his intention to unite the nation under a “common purpose”. “I think More
The decapitation of the Liberals in their heartland that provided much of their talent, money and momentum makes this election a more serious threat to the party than its previous defining losses in 1972, 1983 and 2007. The Liberals are now victim of the fragmentation of our politics – defeated at this election by Labor in the middle ground and the teals in the high ground. It’s a unique event.
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COVID-19 Information.
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There’s a growing sense of panic in China
Senior business columnist
May 24, 2022 — 11.59am
There’s a whiff of panic in the air in China as its policymakers respond to the sharp economic downturn generated by the country’s zero tolerance approach to the outbreak of the Omicron variant of COVID-19.
On Monday, after a meeting of China’s State Council, they announced more tax rebates, a moratorium on companies’ social security payments, deferrals of loan repayments, new infrastructure spending and cuts to taxes on vehicle purchases.
The People’s Bank of China also announced an effective cut to the interest rates for first home buyers, reducing the rate they will pay from 4.6 per cent to 4.4 per cent, after a collapse in home sales this year. Last month home sales were down 46.6 per cent from a year ago.
The authorities had already been cutting interest rates and taxes and increasing infrastructure spending in response to an economic slowdown that, apart from the economic slump at the onset of the pandemic in 2020, is the worst the country has experienced in decades.
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Climate Change.
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Climate voters herald an irrevocable change to politics
The Coalition, which has weaponised climate change policy at every election since 2010, found itself for the first time on the receiving end, with the most brutal of consequences.
Phillip Coorey Political editor
Updated May 23, 2022 – 10.20am
Anthony Albanese’s feat in becoming just the fourth Labor leader to take the party to victory from opposition since World War II is remarkable in itself.
However, the circumstances in which it was achieved are so utterly unorthodox that Albanese’s victory is but part of a bigger story – one which has perhaps ushered in an irrevocable change to the political landscape.
Consider these aberrations. Labor will form government, quite possibly majority government, from a primary vote of just 32.9 per cent, lower than the 33.3 per cent it received in 2019, a result that was considered then as catastrophic for the ALP.
Even if it scrapes home with a bare majority of 76 seats, the result won’t be emphatic, as every other election since the war has been when there has been a change of government.
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https://www.afr.com/companies/energy/victoria-raises-standing-offer-power-prices-5pc-20220524-p5anxy
Victoria raises standing offer power prices 5pc
Angela Macdonald-Smith Senior resources writer
Updated May 25, 2022 – 9.27am, first published at May 24, 2022 – 5.35pm
The first signs of the price surge feeding through to household power bills came on Tuesday as the Victorian regulator announced a 5 per cent average increase in standing offer power bills from July 1.
Increased standing offer prices are expected to be announced for other states by the Australian Energy Regulator on Thursday, reflecting the leap higher in wholesale costs in recent months.
Wholesale gas prices have doubled this month, coming on top of electricity forward prices that have risen up to five-fold in 12 months. The price surges have triggered fears of an energy price crisis similar to Europe’s and led to warnings that the new Labor government will fall short of targeted price reductions.
The AER decision was delayed in late March by then federal energy minister Angus Taylor until after the election, in which the cost of living and future energy prices became a heated topic of debate.
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https://www.afr.com/companies/energy/nsw-power-bills-to-rise-by-200-a-year-20220525-p5aoe6
NSW power bills to rise by $200 a year
Mark Ludlow and Angela Macdonald-Smith
May 26, 2022 – 9.00am
Electricity prices will surge by up to 8.2 per cent in NSW and 5.5 per cent in Queensland from July 1 after the Australian Energy Regulator released its final default market offer for next financial year.
Higher wholesale prices, the war in Ukraine and soaring coal and gas prices forced the regulator to push up the default regulated prices to allow energy retailers to pass on their higher costs to consumers.
AER chairwoman Clare Savage said it was a tough decision to increase prices, but retailers needed to recover their costs or risk going out of business like in the United Kingdom.
“It’s been an incredibly difficult decision. Nobody wants to put up power prices for customers,” Ms Savage said in an interview with The Australian Financial Review.
“From our perspective, we’ve had to walk a really fine line of protecting customers and making sure they aren’t paying unjustifiably high prices, but making sure retailers can recover their costs.
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Royal Commissions And The Like.
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No entries in this category.
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National Budget Issues.
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https://www.afr.com/policy/economy/inflation-almost-out-of-control-says-jim-chalmers-20220522-p5anfm
Inflation ‘almost out of control’, says Jim Chalmers
Ronald Mizen Economics correspondent
Updated May 22, 2022 – 9.52pm
Incoming treasurer Jim Chalmers said almost out of control inflation was the major challenge for the economy, and record budget deficits would constrain the Albanese Labor government’s spending capacity.
In his first post-election interview, Dr Chalmers also told The Australian Financial Review the business community had “the big role” to play in the post-pandemic recovery, echoing the Business Council of Australia.
“There is no stronger, broader, more inclusive economy without the business community buying in, and I look forward to developing those relationships further as treasurer,” he said.
Treasury secretary Steven Kennedy on Sunday afternoon met with Dr Chalmers at his house in Logan in Brisbane’s outer suburbs to provide the incoming government briefing known as the “red book”.
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New Treasurer Jim Chalmers picks up Frydenberg’s unfinished business
6:31PM May 23, 2022
The global oil market doesn’t stop for Australian elections, with new treasurer Jim Chalmers given the welcome gift of petrol pump prices returning to near record highs.
Average unleaded petrol prices jumped by just over 14 cents last week, marking their third biggest increase ever.
With inflation on the march across the economy, including food and rent or mortgages, Australians are spending more of their income on day-to-day items. In other words it costs more just to stand still.
A more welcome gift came from ratings agency S&P which had an upbeat assessment for Australia’s rolled-gold AAA credit rating. Despite leveraging up on the national credit card during the pandemic, S&P says the change in government has no impact on the ratings or the stable outlook. It also expects Australia’s economic recovery and surge in commodity prices to help the budget bottom better than the March forecasts, while inflation perversely will drive nominal GDP and push up tax revenue.
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https://www.afr.com/policy/economy/chalmers-sees-no-quick-fix-to-economic-challenges-20220524-p5ao0d
Chalmers sees no quick fix to economic challenges
John Kehoe Economics editor
May 24, 2022 – 2.02pm Updated May 24, 2022 – 5.33pm
Treasurer Jim Chalmers says the search for budget savings will extend beyond the $11.5 billion Labor identified before the election, as he kicks off a national conversation about the economic challenges facing the nation.
Dr Chalmers spent his second official day as federal Treasurer speaking to former Labor treasurers Paul Keating and Wayne Swan, state treasurers, and Treasury officials in Canberra.
Seeking to play down the prospect of Labor immediately fixing rising inflation, looming interest rate rises and the $1 trillion in government debt, Dr Chalmers said, “I want to be honest and upfront about it.
“It will take some time for us to turn around these big challenges,” he said on ABC Radio on Tuesday.
“I want to engage the Australian public in this big conversation about our national economic challenges.”
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Our tax burden among the highest in the developed world, says OECD report
7:00PM May 24, 2022
Australia is the fourth-highest income-taxing country in the developed world, according to the latest annual report from the OECD.
The result was one place better than a year earlier, but with a total income tax burden on the average wage earner at 23.2 per cent, Australia remained well above the 14.9 per cent average among 38 OECD nations, and higher than New Zealand’s 19.4 per cent, the US’s 17.2 per cent, Britain’s 14.3 per cent and Japan’s 7.8 per cent.
Only Denmark, Iceland and Belgium imposed a higher income tax burden on their workers, the latest report showed.
ANU tax and transfer policy institute director Bob Breunig said policymakers should be looking at ways to reduce “taxes on effort”.
Professor Breunig said the new and future governments needed to address “the long-term challenge of our inefficient tax system, which everybody knows about: the OECD keeps pointing it out, the IMF keeps pointing it out, as did the Henry review”.
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Labor has ‘massive job ahead’ managing the budget
By Rachel Clun
May 28, 2022 — 5.00am Updated May 29, 2022, 8.32am
Labor faces substantial challenges to rein in the growing costs of defence, health, aged care and NDIS as it prepares for its first budget, with Finance Minister Katy Gallagher acknowledging the significant task of dealing with cost-of-living pressures while controlling spending.
Labor needs to be upfront with Australians about the job ahead, Gallagher said, and promised the government would stick to strict fiscal rules to ensure all future spending would benefit the economy.
“Every budget should look at what we can do around cost of living and areas we can make a difference. But we also want to be honest with people about the situation with the budget,” Gallagher told The Age and The Sydney Morning Herald.
“There is a massive job ahead, the budget repair task will be ongoing and significant.”
Labor enters government for the first time in nearly a decade with Commonwealth debts nearing a trillion dollars, growing interest payments on that debt, and facing a budget deficit for 2022-23 of $78 billion based on the previous Coalition government’s projections.
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Why interest rates won’t increase to mortgage-killer levels
1:03PM May 27, 2022
In less than two weeks, the Reserve Bank of Australia is likely to increase mortgage interest rates again.
It may be by 0.25 percentage points, it may be by 0.4 percentage points, and whatever it is, it won’t be pleasant for borrowers already grappling with this month’s RBA rate rise from 0.1 to 0.35 per cent.
On June 7 the RBA board meets again, and surging inflation means it is expected to keep its foot on the rate rise pedal in the months ahead.
However, forecasts by financial markets, some economists and even RBA modelling of its rate reaching 2.5 per cent in 2023 make me think of Aussie housing icon Darryl Kerrigan’s immortal words: “tell ‘em they’re dreamin’!”
One rate rise of 0.25 per cent was a shock to borrowers’ systems. Two or three rises will put many homeowners into a financial emergency. But 10 of them would mean death to many mortgages.
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Health Issues.
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‘Sexual form of monkeypox’ blamed for global spread of virus
By Jennifer Rigby
May 22, 2022 — 11.11am
London: The World Health Organisation said it expects to identify more cases of monkeypox as it expands surveillance in countries where the disease is not typically found.
As of Sunday, 92 confirmed cases and 28 suspected cases of monkeypox have been reported from 12 member states that are not endemic for the virus, the UN agency said, adding it will provide further guidance and recommendations in coming days for countries on how to mitigate the spread of monkeypox.
“Available information suggests that human-to-human transmission is occurring among people in close physical contact with cases who are symptomatic”, the agency added.
Australia reported its first confirmed cases of monkeypox on Friday in a traveller who had recently flown from Britain to Melbourne and a Sydney man who had returned from Europe.
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Monkeypox likely spread by sex at two raves in Europe: WHO adviser
By Maria Cheng
May 24, 2022 — 5.47am
London: A leading adviser to the World Health Organisation described the unprecedented outbreak of monkeypox in developed countries as “a random event” that might be explained by sexual behaviour at two recent raves in Europe.
Dr David Heymann, who formerly headed WHO’s emergencies department, told The Associated Press that the leading theory to explain the spread of the disease was sexual transmission at raves held in Spain and Belgium.
Monkeypox has not previously triggered widespread outbreaks beyond Africa, where it is endemic in animals.
“We know monkeypox can spread when there is close contact with the lesions of someone who is infected, and it looks like sexual contact has now amplified that transmission,” said Heymann.
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GP drought: Young docs avoid general practice as system on brink of collapse
By Lucy Carroll
May 29, 2022 — 5.00am
The number of young doctors choosing to specialise in general practice has fallen to its lowest in more than five years, a trend doctors warn will push primary care further towards the brink of collapse.
Figures from the Royal Australian College of General Practitioners (RACGP) show that 1394 medical graduates applied to do general practice training in the College’s latest intake, a 30 per cent drop from almost 2000 applications in 2017.
“We are at serious risk of running out of GPs. Young graduate doctors have so many choices, but it is not attractive to them to pursue a career in general practice,” RACGP president Dr Karen Price said.
A Deloitte Access Economic report from 2019 found Australia is heading for a serious undersupply of GPs by 2030, with an anticipated shortfall of 9298 full-time GPs - or almost 25 per cent of the GP workforce - and urban areas likely to see the biggest drop-off.
Price said that while COVID-19 put the brakes on overseas doctors applying for training, the number of applications submitted to the College has been declining for years.
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International Issues.
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The sharemarket crash has only just begun and it will hurt
By Matthew Lynn
May 23, 2022 — 8.37am
It could be tomorrow. It might take until the end of next week. Or it might even wait until June. But it now looks inevitable that we will soon officially be in a bear market. The S&P 500, still the main global benchmark for investors, is already down 18.7 per cent this year. One more bad day and it will be officially in bear territory. The tech-heavy Nasdaq index is already there, and so are many other markets around the world.
A bear market occurs when an index drops 20 per cent from its most recent high. Bear markets come and go. There have been 17 since the end of the Second World War, and they typically last close to a year, with share prices falling by 30 per cent.
But this could be a big one. Why? Because bear markets triggered by recessions are always the worst, and we are now heading for a deep downturn; because valuations were already crazily over-stretched at the peak; and because policymakers are completely out of ammunition to counter the sell-off in equities.
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Is the world’s financial system about to crash? This expert thinks so
It is entering dangerous waters again, warns Columbia professor and author Adam Tooze, a rising star of the Davos circuit and a guru of the Lehman crisis.
Ambrose Evans-Pritchard
May 24, 2022 – 8.13am
If anybody knows where the points of maximum stress lie as monetary tightening collides with epic levels of global debt, it is the man who wrote the definitive opus on the last traumatic blow-up in 2008.
Columbia professor Adam Tooze is the rising star of the Davos circuit. His book Crashed: How a Decade of Financial Crises Changed the World is a superb forensic analysis of the political and economic brew that led to the meltdown of the Western banking system, and led to the Lost Decade that followed, with invidious consequences for Western liberal democracies.
There is a frighteningly long list of shoes to drop as inflation finally forces central banks to do what they desperately wish not to do. That is, is to yank away the debt shield that lulled both investors and the political class into a false sense of security.
“We don’t know what is going to break until it does, but there are a lot of reasons to worry, and there is going to be severe stress,” he said on the eve of the World Economic Forum, the conclave of the great and the good in Davos.
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China’s premier congratulates PM ending years-long freeze
Michael Smith North Asia correspondent
May 24, 2022 – 7.34am
Tokyo | China’s Premier Li Keqiang has congratulated Prime Minister Anthony Albanese on his election victory and says Beijing is willing to work with the new Labor government.
Mr Li sent Mr Albanese a congratulatory message on Monday, ending a two-year freeze on high-level communications between the two countries.
“The Chinese side is ready to work with the Australian side to review the past, look into the future and uphold the principle of mutual respect and mutual benefit, so as to promote the sound and steady growth of their comprehensive strategic partnership,” Mr Li said, according to state news agency Xinhua.
Mr Li said it was in the interests of both countries to have “sound and stable relations”.
The premier, who is the second most senior Chinese official after President Xi Jinping, referenced the establishment of diplomatic ties between China and Australia in the 1970s under former Labor prime minister Gough Whitlam.
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https://www.afr.com/world/europe/ukraine-war-set-to-unleash-world-food-crisis-20220524-p5anw8
Ukraine war set to unleash world food crisis
Hans van Leeuwen Europe correspondent
May 24, 2022 – 4.34am
London | Russia’s war in Ukraine will unleash “the worst food crisis in recent memory” across vast swathes of the developing world, with the potential to create “hell on earth” for some countries, the World Economic Forum in Davos heard on Monday.
As Ukrainian officials including President Volodymyr Zelensky battle to find ways of breaking down a Russian blockade of their exports, a WEF survey of chief economists says the crisis is triggering export restrictions worldwide that will make things even worse.
The survey also revealed that most chief economists reckon Europe is staring down the barrel of stagflation this year, while in the US and Asia-Pacific there is more prospect of economic growth even as prices surge.
According to the survey commissioned by the Switzerland-based WEF for its annual summit in Davos, about 80 per cent of chief economists predict the Middle East and Africa are facing insecurity or high insecurity in their food supplies over the next three years.
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Nowhere to hide from the ravages of stagflation
Investors are now struggling to find attractive places to park their money. But the grim reality is that, in such periods, there are no safe havens.
Karen Maley Columnist
May 23, 2022 – 6.18pm
If investors were hoping that central bankers might feel some responsibility to brighten the despondent mood that’s settled on financial markets, they’ve been sorely disappointed.
Instead, central bankers have gone out of their way to highlight the daunting task they face in bringing inflation under control.
Prices are now rising at the fastest clip in decades, as strong demand has collided with persistent supply shortages, while Russia’s invasion of Ukraine has roiled markets for staple grains and vegetable oils.
Last week, Andrew Bailey, the head of the Bank of England, warned that he would not be able to prevent UK inflation from hitting 10 per cent this year, and admitted to sounding “apocalyptic” about the surge in global food prices.
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https://www.afr.com/policy/economy/are-we-heading-for-stagflation-20220524-p5ao2w
Are we heading for stagflation?
Paul Krugman
Updated May 24, 2022 – 2.57pm, first published at 1.30pm
When I talk to business groups these days, the most commonly asked question is: “Are we headed for stagflation?” I’m pretty sure they find my response unsatisfying because I tell them it depends on their definition of the term.
If they understand it to mean a period of rising unemployment combined with inflation that’s still too high, the answer is that there’s a very good chance that we’ll suffer from that malady for at least a few months. But if they’re referring to something like the extreme pain we suffered to close out the 1970s, it looks unlikely.
To explain the difference, consider two historical episodes.
First, look at 1979 to ’80, which illustrates what I suspect most people have in mind when they talk about stagflation.
At the beginning of 1979, the United States already had 9 per cent annual inflation; the surge in oil prices after the Iranian revolution sent inflation well into double digits. The Federal Reserve, under Paul Volcker, responded with drastically tighter monetary policy, leading to a recession and a sharp rise in unemployment.
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Lies weaken Russia in its trial of strength with the West
The US and its allies specialise in hypocrisy, but their open systems permit the uncovering of painful truths.
Gideon Rachman Columnist
May 24, 2022 – 10.23am
Vladimir Putin has a name for the West. He calls it the “empire of lies”. The Russian leader’s announcement of his “special military operation” in Ukraine was laced with angry references to Western duplicity in Kosovo, Iraq, Libya and beyond.
Putin’s anger is unfeigned. As the political commentator Ivan Krastev observes: “The hypocrisy of the West has become an obsession for him.”
But hypocrisy and lies are not quite the same thing. The distinction may seem semantic, even frivolous – but it matters. The Russian government specialises in outright lies, insisting variously that it has not invaded Ukraine, did not poison opposition leader Alexei Navalny, had nothing to do with the shooting down of flight MH17 and its army has not committed war crimes.
The US and its allies, by contrast, specialise in hypocrisy. The characteristic Western vice is to proclaim an ideal or a policy and then to apply it inconsistently. So Western countries proclaim themselves to be defenders of human rights but compete to sell weapons to Saudi Arabia.
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Japan’s PM flags closer co-operation with Australia in the Pacific
Michael Smith North Asia correspondent
May 24, 2022 – 6.23pm
Tokyo | Japanese Prime Minister Fumio Kishida has flagged closer co-operation with Australia to counter China’s rising influence in the Pacific and says he wants to deepen security ties with the Albanese government.
However, Mr Kishida said Japan was not considering joining the AUKUS alliance between Australia, the United States and the United Kingdom.
“For Japan we are not thinking at all of joining AUKUS right now but our important partners in security and defence like Australia, the United Kingdom and the United States are members of AUKUS. We would like to further strengthen our close partnership with these countries,” Mr Kishida said in response to a question from The Australian Financial Review.
Australia’s security ties to Japan are the most important in the region at a time when the US is seeking closer co-ordination to counter the possibility of China invading Taiwan and resolving other territorial tensions in the South and East China seas.
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Trump is losing his stranglehold on Republicans
Politics is about momentum and the energy behind Donald Trump is dissipating. The bad news for the former president’s detractors is his ‘MAGA’ base isn’t fading.
Edward Luce Columnist
Updated May 25, 2022 – 11.48am, first published at 9.59am
This is not an obituary of Donald Trump. He still has a plausible shot at becoming the first ex-president to be re-elected since Grover Cleveland in 1892.
But politics is about momentum – and the energy behind Trump is dissipating. The bad news for Trump’s detractors is that his “MAGA” base is not fading. The Kraken lives on. It just no longer shows such deference to the man in Mar-a-Lago.
Trump’s handicap is that he is obsessed with one issue – that he was cheated by Joe Biden of his rightful election victory in 2020. Most Republican voters share in that belief, which is a litmus test for candidates.
Yet, the stolen election myth is their politics’ starting point, not its be-all and end-all. By confining himself to rigged elections, Trump is forgetting MAGA’s animating spirit, which is hatred of America’s cultural elites.
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The Fed must act now to ward off the threat of stagflation
Evidence from the 1970s shows that the time to throttle an inflationary upsurge is at the beginning.
Martin Wolf Columnist
May 26, 2022 – 9.16am
Is there going to be a recession in the US and other leading economies? This question has naturally arisen among participants at this year’s meeting of the World Economic Forum in Davos.
This is, however, the wrong question, at least for the US. The right one is whether we are moving into a new era of higher inflation and weak growth, similar to the stagflation of the 1970s. If so, what might this mean?
The similarities are evident between the present “surprise” upsurge in inflation to levels not seen in four decades and that earlier era, when inflation was also a surprise to almost everybody, except the monetarists.
That era was also characterised by war - the Yom Kippur war of 1973 and the invasion of Iran by Iraq in 1980. These wars, too, triggered jumps in oil prices, which squeezed real incomes. The US and other high-income economies experienced almost a decade of high inflation, unstable growth and weak stock markets. This was followed by a sharp disinflation under Paul Volcker, chair of the Federal Reserve, and the Reagan-Thatcher shift towards free markets.
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Forget final victory – Ukraine should start negotiating for peace
This is not 1943. Urging Ukrainians to deliver a final victory against Russia, when NATO is not even thinking of putting boots on the ground, is hypocritical and irresponsible.
Yanis Varoufakis
May 26, 2022 – 8.00am
In 1943, progressives had a moral duty to dismiss calls for a negotiated settlement with Hitler. Cutting a deal with the Nazis to end the carnage would have been unforgivable. Civilised people had only one option: to keep fighting until Allied troops stood over Hitler’s Berlin bunker.
Today, by contrast, it would be a grave error to aim for a final military victory over Russia and to dismiss those of us calling for an immediate negotiated peace.
In 1943, the countries gunning for final victory had skin in the game, with Allied troops and, in many cases, civilian populations, on the frontline.
Today, the West acts like the United States did before the Japanese attack on Pearl Harbour: standing on the sidelines, arming and cheering those who are doing the actual fighting.
Under the circumstances, urging Ukrainians to deliver a final victory against Russia, when NATO is not even thinking of putting boots on the ground or warplanes in the air, is both hypocritical and irresponsible.
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Brave new world: Europe is about to take a risky step into the future
Senior business columnist
May 25, 2022 — 12.00pm
An era, and one of the most aggressive experiments in monetary policy in history, is about to end with the European Central Bank president, Christine Lagarde, signalling a European exit from the unconventional policies it has presided over since the 2008 financial crisis.
In a blog post earlier this week, Lagarde foreshadowed the end of the ECB’s asset purchases – its “quantitative easing” – early in the September quarter this year. That would, she said, enable “lift-off,” or an increase in the ECB’s key policy rate, at its July meeting.
“Based on the current outlook, we are likely to be in a position to exit negative interest rates by the end of the third quarter,” she said.
Before the end of this year, therefore, the experiment with quantitative easing that began during the financial crisis, and the ECB’s negative interest rates that have been in place since Europe’s sovereign debt crisis in 2014, will have disappeared.
The ECB is, like the US Federal Reserve Board, moving to normalise the unconventional monetary policies that have shaped the post-2008 environment for economies and markets.
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China dresses down Japan’s envoy to Beijing over Quad comments, as CCP reach out to Albanese
5:20PM May 25, 2022
China has given a dressing down to a senior Japanese diplomat over comments made at the Quad leaders’ summit, while continuing its outreach to Anthony Albanese, the host of next year’s meeting.
Summoned late on Tuesday evening, Japan’s envoy in Beijing was told off for allowing “negative and erroneous words and deeds concerning China” to be made at the Quad meeting in Tokyo.
“China made solemn representations, expressing strong dissatisfaction and serious concerns,” China’s foreign ministry said in a statement.
The late night chiding was echoed by Beijing’s propaganda department and underlines the challenging road ahead for any improvement of relations between the new Albanese government and China.
Prime Minister Albanese on Tuesday confirmed Australia will host next year’s meeting of the Quad, which Beijing has long accused of being a vehicle to “contain China”.
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https://www.economist.com/europe/2022/05/26/when-and-how-might-the-war-in-ukraine-end
Thinking about the endgame
When and how might the war in Ukraine end?
Western allies are starting to split over the conditions for a peace
May 26th 2022 (Updated May 26th 2022) | KYIV AND WASHINGTON, DC
The war in Ukraine, says its president, Volodymyr Zelensky, will be won on the battlefield but can end only through negotiations. When to stop fighting, and on what terms? The West says that is for Ukraine to decide. Yet three months into the war, Western countries are staking out positions on the endgame.
They are splitting into two broad camps, explains Ivan Krastev, of the Centre for Liberal Strategies, a think-tank in Sofia. One is the “peace party”, which wants a halt to the fighting and the start of negotiations as soon as possible. The other is the “justice party”, which thinks Russia must be made to pay dearly for its aggression.
The argument turns in the first instance on territory: let Russia hold on to the land it has conquered thus far; push it back to its starting line on February 24th; or try to shove it even farther back, to the international border, to recover territories it seized in 2014? The debate revolves around much else besides, not least the costs, risks and rewards of prolonging the war; and the place of Russia in the European order.
The peace camp is mobilising. Germany has called for a ceasefire; Italy is circulating a four-track plan for a political settlement; France speaks of a future peace deal without “humiliation” for Russia. Ranged against them stand mainly Poland and the Baltic states, championed by Britain.
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https://www.afr.com/world/north-america/china-s-trajectory-can-t-be-stopped-blinken-20220526-p5aoxb
China’s ‘trajectory’ can’t be stopped: Blinken
Matthew Cranston United States correspondent
May 27, 2022 – 2.52am
Washington | China is spying, hacking, manipulating and undermining the world order in a deeply destabilising way that is unlikely to change, US Secretary of State Antony Blinken said in his most fiery speech since the Biden administration came to power.
China is seeking an “asymmetric decoupling” from the rest of the world, designed to increase its power across economies and businesses, military forces and civilian populations from Taiwan and the United States to Australia and the Pacific Islands, he said.
“The US can’t rely on Beijing to change its trajectory,” Mr Blinken said, calling China’s behaviour “deeply destabilising”.
“Rather than using its power to reinforce and revitalise the laws, the agreements, the principles, the institutions that enabled it success...Beijing is undermining them.”
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‘Turned Frankenstein’: Sharemarkets in the crosshairs in inflation fight
By Ambrose Evans- Pritchard
May 27, 2022 — 8.08am
The collective warning from Davos is that all-powerful central banks are no longer on your side, so don’t tempt fate by reflexively buying the dips.
The monetary gendarmes have let the inflation genie out of the bottle and will have to squeeze markets until the pips squeak in order to stop it now running wild across the major Western economies.
“The ‘Fed Put’ is over. They don’t mind what happens to markets,” said Jason Furman, former chairman of the White House Council of Economic Advisers. He warned that rates will have to go much higher than the Federal Reserve has so far admitted, or than markets are expecting.
“They haven’t done enough yet to prepare people,” he said, speaking at the World Economic Forum.
There are mounting worries that the Fed will ultimately be forced to dish out the “Volcker” medicine of the late 1970s. It has already begun to engineer a deliberate and (hopefully) controlled crash in equity and asset prices.
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Russia commits 'all its forces' to take Ukraine's Lugansk, Kyiv says
AFP
May 27, 2022
Russia on Thursday made an all-out effort to capture the rest of the industrial region of Lugansk in eastern Ukraine, officials said, as President Volodymyr Zelensky accused Moscow of seeking to commit "genocide" across the eastern Donbas.
As the fighting intensified, Foreign Minister Dmytro Kuleba aired Kyiv's increasing frustration with the West, accusing allies of dragging their feet on arms deliveries and telling his German counterpart that Ukraine needs heavy weapons "as soon as possible."
"The situation remains difficult, because the Russian army has thrown all its forces at taking the Lugansk region," regional governor Sergiy Gaiday said in a video on Telegram.
Russian forces also bombarded Ukraine's second city Kharkiv, killing nine people, and five civilians were killed Thursday in the Donetsk region to the south, according to the governor.
Kyiv has been losing patience with what it views as the West's failure to quickly arm Ukraine and impose a ban on Russian oil exports on top of punishing economic sanctions already in place.
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Inflation bites hard in New Zealand
May 27, 2022
If Australia wants to know what runaway inflation looks like, forget the US. It just has to look across the ditch.
The New Zealand central bank sees inflation peaking at 7 per cent in the June quarter and on Wednesday it put up the official cash rate another 50 basis points to 2 per cent with the expectation of much more to come. Australia’s cash rate currently sits at 0.35 per cent.
“I would say what the New Zealand government has is the early stages of a wages price spiral,” says HSBC chief economist Paul Bloxham
Bloxham is the man who in 2014 dubbed the country the rock star economy. But New Zealand’s rock star status is long gone.
Australia is a little behind in monetary tightening but will it go the same way? It makes New Zealand a compelling watch on central bank strategy, wages policy and housing.
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As Zelensky woos Davos, Putin bets the house on Donbas
The Ukrainians made a full-court press at Davos, fearing that Western resolve will ebb if Putin can use his Donbas onslaught to set the terms of the end-game.
Hans van Leeuwen Europe correspondent
May 27, 2022 – 9.59am
One of the highlights of the World Economic Forum’s annual summit in Davos used to be stopping by Russia House, on the Swiss ski town’s main street.
If you timed your visit right, you might be offered a free nip of vodka. If you stuck around, you might get an invitation to one of the Russian oligarchs’ legendary soirees.
Things have changed. Russians are banned from the summit this year. And to ram the point home, a Ukrainian NGO cheekily nabbed Moscow’s usual shopfront and renamed it “Russian War Crimes House”.
Most Davos participants took time out from their schmoozing and dealmaking to go and ponder the premises’ gruelling exhibition, which documented the civilian death and destruction that Russia is visiting upon Ukraine.
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Emmanuel Macron agrees to ‘rebuild’ France-Australia ties
12:17PM May 27, 2022
French President Emmanuel Macron has told Anthony Albanese he is prepared to rebuild his country’s fractured relationship with Australia through “trust and respect”, and a shared commitment to dealing with climate change and strategic threats.
Mr Macron spoke to Australia’s new Prime Minister by phone on Thursday night to congratulate him on his election win.
A readout of the call, issued by the Elysee Palace, said Mr Macron reminded his new counterpart of Scott Morrison’s “deep breach of trust” in cancelling Australia’s $90 billion submarine contract with France.
The leaders “agreed to rebuild a bilateral relationship based on trust and respect to jointly overcome global challenges, foremost among which is the climate emergency, and the strategic challenges in the Indo-Pacific”, the readout said.
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https://www.afr.com/world/asia/can-australia-and-china-be-the-best-of-frenemies-20220525-p5aodo
Why China and Australia will struggle to be friends again
China’s Premier Li Keqiang is making friendly overtures towards the new Albanese government at the same time the Pacific becomes a Sino-Australian strategic battleground.
Michael Smith North Asia correspondent
Updated May 27, 2022 – 11.38am, first published at 8.13am
Tokyo | Anthony Albanese was winging his way to Tokyo on Monday afternoon just hours after being sworn in as Prime Minister when China reached out.
Premier Li Keqiang did not pick up the phone as some other world leaders have done, but conveyed a congratulatory message to the Labor leader.
“The Chinese side is ready to work with the Australian side,” the message declared, noting that it was another Labor prime minister, Gough Whitlam, who established diplomatic ties with China in the 1970s.
Albanese did not have a lot of time to reflect on the past on that flight. He and Foreign Minister Penny Wong were busy being briefed by Department of Foreign Affairs and Trade and security officials, and prepping for meetings with the leaders of the United States, Japan and India the following day.
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Russia presses eastern Ukraine, Zelensky says situation 'very difficult'
AFP
May 29, 2022
Russia pressed its onslaught on eastern Ukraine Saturday, saying it had captured the strategic town of Lyman and claiming to have surrounded the urban center of Severodonetsk.
Regional officials on Saturday reported the deaths of three civilians at Russian hands, one each in the eastern towns of Bakhmut and Avdiivka, and one in the southern city of Mykolaiv.
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Zelensky locks in G20 summit date – and clash with Putin
9:52PM May 27, 2022
Ukrainian President Volodymyr Zelensky has said he will attend the November G20 summit online to encourage the world’s largest economies to do more to end Russia’s invasion of his country.
Mr Zelensky’s attendance sets the stage for a potentially explosive meeting in Bali given Russian President Vladimir Putin has indicated he too will go.
Speaking by video link to the Foreign Policy Community of Indonesia, Mr Zelensky said the Group of 20 largest economies could play a decisive role in ending the war in Ukraine by halting all trade with Russia.
“The world’s biggest economies are facing challenges and the food crisis is growing,” he said.
“Rather than supporting Russia and trading with them we need to stop them. The G20 has to be able to stop this and support Ukraine.”
Mr Zelensky said he was grateful for Indonesian President Joko Widodo’s invitation to attend the G20 summit in Bali, but could not leave his country at such a critical time.
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I look forward to comments on all this!
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David.
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