The Wrap with Ebony Bennett
Integrity was a key election issue and it’s not difficult to see why. The scandal engulfing PwC has shone a spotlight on just how far the tentacles of the big four accounting firms extend into government, the public service and even into the Australian Federal Police (AFP).
So far entrenched is PwC that when Treasury referred the PwC tax scandal to the AFP for a criminal investigation, subsequent questions in Senate Estimates revealed that the AFP itself has active contracts with PwC for internal auditing services! Nine of them by some reports.
In light of the conflicts of interest revealed by the PwC scandal, we wrote to the Minister for Climate Change and Energy to urge him to review potential conflicts of interests at Australia’s key climate change agency. The Inquiry into consulting services and now Senate estimates has shown us that potential conflicts of interest are not always disclosed, let alone managed well.
Far too often the interests of big business are put before the public interest.
That’s partly why our research into the role of corporate profits in inflation has caused a backlash. While the CEO of NAB is out there warning that an increase in the minimum wage will worsen inflation, and the RBA has presided over multiple interest rate rises, the last thing big business wants is for us to shine a spotlight on the massive profits the banks, airlines, mining companies and supermarkets are raking in during this cost-of-living crisis.
It’s not the first time the Australia Institute has upset big business, the BCA, ACCI and Treasury and it won’t be the last time. It wasn’t that long ago they all thought a $65 billion company tax cut was a fabulous idea, while our research showed there were better ways to grow the economy.
While it’s accepted wisdom to blame wages for inflation (without evidence), apparently it’s heresy to question the role of corporate profits in inflation.
We don’t accept that. At the Australia Institute we barrack for ideas, not ideology. We go where the data and evidence lead us; if that ruffles a few feathers, so be it.
If you value the way our research cuts through, please consider making a tax-deductible contribution to our End-Of-Financial-Year-Appeal.
You will be backing research that reshapes the national debate instead of seeking to shut it down.
— Ebony Bennett, Deputy Director of the Australia Institute
The Big Stories
We’ve Upset Big Business Again
Our report on how profits were driving inflation has clearly hit a nerve. This piece appeared in the AFR, urging us to retract our report, Profit-Price Spiral: The Truth Behind Australia’s Inflation.
While big business and their mates were fearmongering about wages causing inflation, we looked at the actual data and it told a very different story.
While the critics reached for technocratic arguments to try to poke semantic holes in our analysis, they could not say that a single decimal point of our research was incorrect.
So no, we won’t be retracting our research.
Richard Denniss unpacks it all.
The Minimum Wage Increase
The Fair Work Commission (FWC) just announced a 8.65% increase to the national minimum wage, an excellent result for the 200,000 lowest-paid workers.
For the 2.5 million or so workers on national award minimums, the FWC announced a 5.75% increase, which still represents a real wage cut, falling short of the 7% inflation, but still a good outcome that the Fair Work Commission noted will not increase inflation.
But already we are hearing (again) the predictable cries of business groups that it will destroy the economy.
They’re wrong. Our research shows that the minimum award wage could have been increased by 7% with a virtually undetectable impact on inflation.
The economy is about people, not profits. And giving the lowest-paid workers a wage rise that is likely to leave them about where they were last year (at best) is not going to wreck the economy and should not be used by the RBA as an excuse to hike rates even further.
Debunking Big Bank Bullsh*t
Recently the CEO of NAB was very hesitant to support an increase in the minimum wage when asked on ABC Radio National, saying that it would worsen inflation. Again, our research shows that is incorrect, and that the minimum wage could have been increased by 7% with a virtually undetectable impact on economy-wide prices.
He also had some generous advice for those struggling on the minimum wage, just get another job!
Greg Jericho calls out the nonsense in this video.
Those with a HECS/HELP debt were hit with a massive 7.1% increase in their uni debt as the Government ignored calls to freeze or abolish HECS/HELP indexation.
For those earning less than $62,000, the HELP indexation increase for the average debt is bigger than the repayments.
Read more from Eliza Littleton.
The Duck Stops Here: Economic Benefits from Victorian Duck Shooting Ban
The Australia Institute made a submission to a Victorian parliamentary inquiry into native bird hunting, which found that the practice didn’t stack up against Victorian’s concerns about animal welfare.
Our research found that only 0.17% of Victorians actually hunted ducks in 2022, a number dwarfed by the 88% who are concerned about the birds suffering.
Polling also found that if bird hunting was banned, people would also be interested in hunting rabbits, fishing or camping as alternatives, providing activities for hunters and non-hunters alike, and resulting in tourism boosted economic benefits.
New South Wales, Queensland and Western Australia have already enacted a ban with no apparent economic impact, providing a blueprint for Victoria and South Australia to follow.
Keep an eye out for our Follow the Money podcast on duck hunting next week.
Climate Change and the Pacific: Regional Climate Diplomacy Forum 2023
Last week the Australia Institute hosted the Regional Climate Diplomacy Forum, a special event webinar that examined how climate change was affecting some of the most vulnerable countries in the Pacific region.
The key speakers were the Honourable Seve Paeniu, Tuvalu Minister of Finance and Economic Development and the Honourable Ralph Regenvanu, Vanuatu Minister of Minister of Climate Change Adaptation, Meteorology and Geo-hazards, Energy, Environment and Disaster Risk-management.
When asked if it was OK for Australia and other countries to produce new gas and coal if it will be offset, Minister Regenvanu was clear:
“Absolutely not. That’s just greenwashing”
‘Alopi Latukefu, Director of the Edmund Rice Centre for Justice and Community Education was an integral part of organising the event.
If you missed out on the forum, you can watch the full event on our website.
Australia’s rental crisis is going to get worse, with renters facing the possibility of the biggest rent hike in decades. The Governor of the RBA, Phillip Lowe (he’s the one hiking interest rates that are driving the rent increases) had some advice for those struggling. Just get more people in your house!
“We need more people on average to live in each dwelling, and higher prices do that.”
As the real solutions to the housing crisis are ignored, his tip is likely to be cold comfort for those struggling to get by.
Matt Grudnoff explains in 2 mins the simple reality behind the housing crisis that politicians don’t want to admit, and how to fix it. Read or watch below.
No More Native Logging in Victoria
In some good environmental news this month, Victoria will join West Australia in ending native logging as soon as next year – six years ahead of schedule!
The pressure is on Tasmania and NSW to follow suit and join the rest of the country in protecting Australia’s globally significant forests.
The decision was made in part by VicForest’s legal breaches in failing to protect endangered species, and the Victorian government’s recognition that logging increased the risk of severe bushfires, like the Black Summer bushfires of 2019-2020 which resulted in a loss of over 10 million hectares.
Our ongoing research has highlighted the financial, economic and environmental losses involved in native forestry logging. It’s a relatively small sector, heavily subsidised by the taxpayer that results in significant habitat loss and climate change.
Every native forest protected from logging is a win for people, animals and the climate.
Tasmanians might have seen our open letter in the papers, calling on the Tasmanian Government to put an end to logging these magnificent forests.
Add your name to the open letter to help out.
The South Australian government passed new laws this week that dramatically reduce the right to protest in the state, imposing up to $50,000 in fines or three months jail for intentionally or recklessly obstructing the free passage of a public place.
The changes were rushed through the upper house after Extinction Rebellion held a three day protest outside the annual Australian Petroleum Production & Exploration Association (APPEA) conference. The same conference where South Australia’s Minister for Energy and Mining Tom Koutsantonis announced to the oil and gas representatives present that the state government was ‘at your disposal.’
The proposed changes in South Australia are the latest in a worrying trend towards harsher anti-protest laws across the country, following changes in NSW that saw a climate protester jailed.
Australia has a proud tradition of peaceful protest, including the campaign to save the Franklin River from being dammed, boycotts against all-white sports teams from apartheid South Africa and union action to stop exploitative ‘ships of shame’. Protests may be inconvenient, but an Australia without protests would be a democratic disaster.
The Voice to Parliament Handbook with Thomas Mayo & Kerry O’Brien
The Voice to Parliament Handbook by Indigenous leader Thomas Mayo and acclaimed journalist Kerry O’Brien is a clear, concise and simple guide for the millions of Australians who have expressed support for the Uluru Statement from the Heart, but who want to better understand what a Voice to Parliament actually means.
Let’s make this Australia’s biggest book club!
Order your copy of the Voice to Parliament Handbook and register today so Kerry O’Brien and Thomas Mayo can answer your questions about the Voice.
The book explores the history of struggle for an effective Voice, what is a referendum, what is the Uluru Statement and other frequently asked questions.
This is a short book, making it accessible to anyone who wants to better understand the referendum question or is looking for responses in their kitchen table conversations. Australia’s favourite cartoonist Cathy Wilcox has supplied cartoons for each chapter opener, and the design and infographics are created by Gulumerridjin (Larrakia), Wardaman and KarraJarri Saltwater woman Jenna Lee.
Anne Kantor Fellowship Applications
The Anne Kantor Fellowships are a graduate style program that will provide on-the-job training to equip and encourage new voices in Australia’s future policy and democratic debates.
The program is a fantastic opportunity for graduates and early career researchers who are passionate about driving social change.
Applications close 16 June, 2023.
Open Letter to End Native Forest Logging in Tasmania
Emissions from native forest logging in Tasmania have been estimated at 4.65 million tonnes of CO2 equivalent per year, making it the highest emitting sector in the Tasmanian economy.
Since 2011, native logging reduction has been a major factor in the state’s achievement of negative greenhouse emissions, along with hydroelectricity.
Our open letter calls on the Tasmanian Premier to protect Tasmania’s native forests, and end native logging in the state.
The letter has been signed by sixty-seven prominent Australians, including independent federal MPs, Olympians, authors, former federal MPs, and an Australian of the Year.
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Luciana Lawe Davies Media Adviser