Moments of truth puncture ABC’s Budget Q&A – submarines and climate costs ignored

Jim Beatson

Atearful 15-year-old Charlotte was the showstopper on a recent Q&A, ABC TV program, this time examining the 2023-24 Federal Budget.

Charlotte, sitting with her four siblings and single mum, having just received their tenant eviction notice asked, ‘What should we do?’ This questioner, and several other tearful questioners left Treasurer, Jim Chalmers, the sole panelist, lacking practical responses.

The engaged audience was clearly empathetic to Chalmers’ inheritance of ten years of inaction by the outgoing Liberal-National coalition government. And to his clearly expressed sincerity over their sad problems. Yet neither satisfied his audience.

It was Chalmers’ lack of practical answers which underwhelmed the audience. His comments contained only one sting, aimed at Greens MPs.

Chalmers attacked the Greens – threat to block Labor’s housing legislation to build 30,000 homes this year at a cost of $5 billion a year – as the Greens’ first ambit pParliamentary tactical claim. All because the Greens wanted more. It was the sole moment generating instant audience applause.

But no answers from Chalmers over community housing left questioners pleading for the government to invest at least $5 billion a year to build public and affordable housing and commence clearing the waitlists for public housing. Nor answers to ensure rent subsidised homes for teachers, nurses and other essential workers who can’t find an affordable home, especially in regional/ rural areas.

The Greens latest revised gambit is to scale back their demands on housing, offering to pass Labor’s future fund bill in return for $2.5 billion a year of direct spending and $1 billion a year to incentivise the rent freeze.

Op Shop

This is likely to be discussed between the parties, behind closed doors next week.

Community-based critics of the Budget, like another Q&A questioner, asked why the Albanese government won’t lift Jobseeker rent assistance payments above the miserly $3.97 a day as part of the $14.6 billion cost of living package.

Other questions over Centrelink and aged care, where government spending on health, aged care and sport is limited to $137.6 billion in 2023-24, added to the Q&A audience’s anger.

Nuclear subs

But the unacknowledged elephants in the ABC program were a lack of questions focusing on nuclear submarines and climate action costs.

No questions from Q&A’s audience, to replicate questions by some mainstream journalists, plus former Labor leaders, Greens and Teal MPs who’ve asked if all these problems could be fixed by cancelling the gob-smacking $386 billlion for just eight nuclear subs. According to a recent Four Corners program this cost averages $32 million per day, for the next 32 years!

Are the subs essential to our defence? The gGovernment received a resounding ‘Yes’ from military staff with vested interests in wanting more money for the late arriving nuclear-powered submarines. And more ticks from academic defence analysts who, like the military, earn their living typically working within the defence postures of the military.

Celebrated investigative journalists, like Brian Toohey, doubt the value of Australia replacing Aussie-made Collins-class subs with eight nuclear subs based on the British Astute-class subs in the long term. Plus, before that, sometime in the 2030s, five second-hand US Virginia-class nuclear subs to fill the gap.

Brian Toohey, reports: ‘The earliest Astute, laid down in 2001, showed key design and production facilities had atrophied, resulting in delays and cost overruns that continue … today. Basic drafting and engineering skills had deteriorated. Problems emerged with software.

‘After entering service in 2014, the Astute crew suffered from excessive heat and ran aground during sea trials a month after delivery. While The Guardian reported in 2012 that during exercises that year a pipe carrying seawater from the back of the submarine to the reactor sprang a leak, because a cap was made from the wrong metal, but construction records said the right metal had been installed.

‘A confidential Ministry of Defence memo obtained by The Guardian says extensive corrosion is “a cause for major concern”. The memo said the damage means “severe problems” can be expected in future and warns that the submarines will have to spend more time than planned under repair.’

Toohey notes that ‘secret US Navy documents, in Newsweek on 19 April confirmed earlier authoritative reports showing that only a quarter of America’s Virginia-class submarines are operationally available at any one time, due to highly complex maintenance problems.’

It’s a common joke among sub-mariners that cheap conventional submarines, like our Collins-class subs, are invisible when sneaking up alongside the extraordinary expensive nuclear-powered submarines. Nuclearpowered subs are excessively noisy because of the need to keep the nuclear core cool with powerful water pumps, so are unaware of unwelcome neighbours.

Albanese, spent only two hours examining the AUKUS deal in detail with naval experts before saying ‘Yes’, without Caucus approval. Clearly Albanese didn’t want to be wedged by Morrison, with Shorten and Labor’s anticipated victory at the previous election front of mind.

Climate change

Equally worrying is Australia’s improved, but still lacking, funding policy to meet the climate emergency.

The transition from a fossil fuel economy to renewables needs massive investment and while Labor has allocated large sums to rewire the nation, and enable the distribution of renewables, there are big questions about how quickly this can be achieved. Experts insist that there can be no new coal and gas if we are to avert climate catastrophe, yet Labor is pushing ahead with green lights for new coal mines including the massive Beetaloo gas reserve.

The Greens were able to extract a commitment from Labor to fund the transition of households from gas to electricity in order to hasten the transition to renewables. Yet while even a portion of our grid is generated by fossil fuels, we will continue adding fuel to the climate fire.

Australia continues to license more coal – and gas – fired power just as the world’s leading climate change organisation, the Intergovernmental Panel on Climate Change (IPCC) announced a month ago that the long-feared era of disastrous climate change has commenced.

This monumental report definitively linked greenhouse gas emissions to the type of disasters driven by a warmer climate that are touching every corner of the globe this year and are shown on TV bulletins almost nightly.

Should we all have to consider the conclusion section of Neil Barr and John Cary’s 1994 book, Greening A Brown Land, noting Australia has moved from a convict colony of ‘social survival to economic growth to environmental concern’.

And now to a future global climatic collapse?

David Lowe

The announcement of a new Reserve Bank governor last week will be cold comfort to the many Australians groaning under the pressure of twelve interest rate rises since May 2022, but the departure of Philip Lowe should take some political pressure off the Albanese government, even if he’s not actually gone yet.

Treasurer Jim Chalmers told the media, ‘Phil Lowe goes with our respect, he goes with our gratitude, and he goes with dignity, and I want to make that clear.’

After seven years in the top job, the governor’s term was due to expire. The issue was whether his term would be extended again. Cabinet have now declared that his successor for the next three years will be Mr Lowe’s deputy, Michele Bullock.

Philip Lowe will not formally step aside until mid-September, and he’s going to accompany Treasurer Chalmers on one last junket, to the meeting of G20 money men in Gandhinagar, India, this week.

So what went wrong?

Mr Lowe was originally appointed governor of the RBA by Scott Morrison, who was federal treasurer in 2016. He’s presided over the central bank during a particularly turbulent time, which has included the COVID pandemic, war in Ukraine, and record inflation here in Australia.

One of the main jobs of the RBA governor is to put a trustworthy, human face on whatever interest rate percentage the bank decides to inflict on borrowers following its regular board meetings, which is where Mr Lowe has apparently fallen down, despite his best efforts.

In November 2021 Mr Lowe told the country that he didn’t expect interest rates to rise from historic lows during COVID until at least 2024, which encouraged many Australians to go into heavy debt. Since then, the RBA has raised interest rates repeatedly (from 0.1 to 4.1 per cent) in an attempt to curb inflation. Having only one blunt instrument at their disposal, they used it, making life much more difficult for 1.2 million borrowing households.

The Reserve Bank has recently been through a major review, but Philip Lowe won’t be around to see that through, or to benefit in the eyes of the borrowing public from the likely end of steep rate rises and a growing focus on employment. It looks like the end of a well-paid run for the bloke from Wagga Wagga who did a doctorate at MIT and has worked at the RBA on and off since high school.

Mr Lowe has been a significant mentor to his replacement Michele Bullock, who reportedly shares most of his economic philosophy, and will no doubt face further major challenges.

Her vaunted communication skills will be in demand as RBA reforms include eight press conferences a year (compared to Lowe’s total of four in seven years).

Is there another way to

The Australia Institute’s Richard Denniss has been saying for some time that huge corporate profits are driving inflation, along with overseas supply factors, not wage growth, and that raising interest rates is not dealing with the real problem.

The OECD, led by that well known leftie Mathias Cormann, is now in agreement, saying ‘corporate profits contributed far more to Australia’s rise in inflation through the past year than... wages and other employee costs’. So far the Reserve Bank has ignored this.

Economist Jim Stanford has shown that Australian businesses have increased prices by $160 billion per year, over and above their higher labour and tax expenses, and over and above new profits generated by growth in actual economic output. He says that without the inclusion of these excess profits, inflation would have been halved.

Mr Denniss notes that government policies directly influence the cost of many things, ranging from gas to medicine to aged care to electricity to education – along with the opportunity to control associated inflationary pressures – if only big businesses (including the banks) could live with less excessive profits, and politicians were brave enough to take them on.

The gap between rich and poor in Australia is continuing to grow, as those who have assets become richer (especially as interest rates have risen) and those without fall away.

Australia Institute analysis shows there’s been an almost perfect reversal of economic benefits in this country in the last 60 years, with 96 per cent of economic growth going to the bottom 90 per cent of income earners in 1950-60, as opposed to 93 per cent of growth going to the top 10 per cent in 2009-19.

The forthcoming $250 billion of tax cuts for high earners will worsen this situation, along with inflation. With the seat of Fadden swinging further towards the Liberals at Saturday’s by-election, it’s clear that cost of living pressures are the main concern for many Australians, and a major challenge for government, no matter who is in the big chair at the Reserve Bank.

BYRON BAY BYR BY R