HOW SCOMO PLAYED EVERYONE!

Morrison’s ministry was assembled within two days of his win, a fast turnaround for someone not expecting to become prime minister.

It includes sacked former ministers Sussan Ley and Stuart Robert, both of whom are believed to have supported him.

They have been returned to the outer ministry despite having been demoted under Turnbull following controversies over their use of ministerial office and despite Morrison insisting the incoming leadership team of himself and Victorian Josh Frydenberg represent “a new generation”.

HOW MORRISON PLAYED EVERYONE

Prime Minister Scott Morrison announcing his new ministry last weekend.

CREDIT: AAP IMAGE / LUKAS COCH

Scott Morrison planned his assault on the Liberal Party leadership for months, according to senior cabinet sources.

The story of how he replaced Malcolm Turnbull is one of ambition, doublecrossing and outfoxing, with Home Affairs Minister Peter Dutton as an unwitting stooge.

Last week, while positioning himself as a compromise candidate, Morrison and his supporters played off Dutton and Turnbull against each other. Only now have their key supporters realised what happened.

They believe both contenders had been undermining Turnbull with their own ambitions in mind and, in Dutton’s case, with at least the tacit support of Finance Minister Mathias Cormann. Cormann denies this.

Senior figures told The Saturday Paper that before last month’s Longman byelection in Queensland, Turnbull wanted to dump his plan to legislate tax cuts for the biggest companies in Australia – effectively the big banks – because it was clear they would be electoral poison.

But two senior cabinet colleagues opposed him: Morrison and Cormann.

The poor showing in Longman became the catalyst for a leadership challenge.

The Liberal National Party recorded an appallingly low vote and, since then, some colleagues say the two contenders’ camps have been jockeying to be best positioned for when the time was right.

A week before the final challenge, Dutton gave an interview to Radio 2GB host Ray Hadley and set the leadership hares running.

It was more than 24 hours before he issued a Saturday statement on Twitter – at Cormann’s urging – pledging his ongoing support for Turnbull.

But the media frenzy had begun.

 

Turnbull shifted a scheduled Sunday cabinet dinner from The Lodge, where ministers would have had to run the gauntlet of cameras and shouting journalists, to the relative privacy of Parliament House.

The Saturday Paper understands Dutton had told Turnbull he couldn’t get from Brisbane to Canberra in time for the meeting, so Turnbull sent an RAAF VIP aircraft to get him.

Cabinet colleagues noted that Dutton and Cormann both arrived late, at the end of dinner.

Asked if he had been helping Dutton for some time, Cormann said: “The answer is a clear no.”

Between Sunday night and Tuesday morning, then prime minister Turnbull realised the rumoured moves against him were genuine.

Queensland backbencher Luke Howarth told colleagues privately on Monday that he planned to stand up in the party room the following day and ask Turnbull to step down. He confirmed this to The Saturday Paper this week.

When word reached Turnbull, he judged it to be part of a bigger plot, so he made a plan to head it off.

Turnbull began the Tuesday morning party room meeting talking about the national energy guarantee.

He gave his usual discursive address and then suddenly changed tack.

“Things can’t go on like this,” he told stunned colleagues, then blindsided them further by vacating the two leadership positions and announcing a ballot on the spot.

“People who were drinking coffee spat it out,” one MP says of the shock.

Party whip Nola Marino had been alerted and the ballot papers were ready.

MPs were furiously texting – some assumed they were texting journalists and some were. But Dutton’s and Morrison’s supporters were, it seems, also texting each other across the room.

Dutton stood against Turnbull, securing 35 votes to Turnbull’s 48.

Caught off guard and without time to lobby, Dutton’s supporters were jubilant at how well their candidate had done.

It was a stunningly high vote for a challenger from what looked like a standing start, and a diabolical miscalculation for the incumbent prime minister.

The difference of just 13 votes meant only seven MPs needed to switch for Turnbull to be out.

The size of Dutton’s vote guaranteed that far from being resolved, or even eased, the crisis only worsened for Turnbull. It shocked just about all involved – certainly both Turnbull and Dutton.

It appears the person least shocked may have been the then treasurer and now prime minister Scott Morrison.

After a week of disentangling what actually happened, some within both the Dutton and Turnbull camps have reached the view independently that the reason those first numbers for Dutton were so high had less to do with Dutton becoming prime minister than with installing Scott Morrison instead.

Supporters for both Dutton and Turnbull say they believe it was actually Morrison’s backers who secretly forced matters to a head, voting for Dutton in the first ballot to boost his numbers and generate a crisis for Turnbull, while intending all along for their man to prevail.

Although it was the actions of Dutton and then Turnbull that sparked the events of last week, sources in both camps have concluded that the outcome was likely engineered by Morrison’s supporters from the beginning.

One MP pointed to the five extra votes that were lodged in favour of the spill motion that were unaccounted for among Dutton’s supporters.

Turnbull’s supporters and those who did not want another leadership ballot voted against it on Friday morning. They numbered 40, but with 45 in favour, they lost.

In the leadership ballot that followed – after Julie Bishop was swept out with just 11 votes and not a single one from her Western Australian colleagues – Dutton secured 40 votes to Morrison’s 45.

Bishop’s betrayal by her WA colleagues – and many fellow moderates – left her so disillusioned that she would announce she was quitting as foreign minister two days later.

Asked at a news conference if she thought the Liberal Party would ever elect a popular female leader, the woman who consistently tops the polls as preferred leader said dryly: “When we find one, I’m sure we will.”

Back in the party room, what persuaded some MPs that a tricky, hidden power play was under way was the result in the threshold vote on whether to have the second ballot at all.

“The telling vote was the 40 to 45 [in favour of the spill],” an MP says.

“Assuming the Dutton vote was 40 [based on his result in the subsequent ballot], where did the other five come from? They were Morrison people who voted for the spill.”

Several sources also confirmed that New South Wales Liberal Party powerbroker and lobbyist Michael Photios, a supporter of Morrison’s, was instrumental in the manoeuvring during the week.

One person not linked to either camp says Photios was deeply involved.

Multiple sources also confirm his business partner and former NSW Liberal Party president Nick Campbell helped, along with Morrison’s usual numbers man, Alex Hawke. Hawke did not return calls before time of press.

“This was not a ‘defend Malcolm’ exercise,” one Dutton backer said of Morrison’s group. “This was a ‘get Malcolm’ exercise. They came at him from both sides.”

Some who wanted Dutton as prime minister are bitter that his lieutenants – Victorian MP Michael Sukkar, South Australian Tony Pasin, ACT senator Zed Seselja and others – bungled the process, wrongly assumed they had the numbers and were played for mugs.

It’s understood that Sky News commentator Peta Credlin, former chief of staff to ex-prime minister Tony Abbott, was advising them in the background.

The Saturday Paper understands that even after the first vote on Tuesday, Dutton told close colleagues he was still inclined to wait and gather more support for a second challenge when parliament resumed in a fortnight.

But his numbers men persuaded him he needed to move fast – a move that would ultimately benefit Morrison.

Another MP, who is angry at what is now believed to have been a clever game of doublecross, says Morrison’s tacticians played “rope-a-dope” with the home affairs minister.

A spokesman for Prime Minister Morrison told The Saturday Paper: “The prime minister won’t be responding to unsubstantiated reports.”

Mathias Cormann’s public shift against Turnbull was instrumental in hastening the prime minister’s downfall.

Cormann visited Turnbull on Wednesday and told him his support in the party room had collapsed.

It was at this meeting that Turnbull is understood to have told him his switch was akin to giving in to terrorists.

Cormann is believed to have responded that he had no choice.

Others say Cormann did have a choice and it was the choice he made that finally tipped the balance. But Cormann has insisted privately that even after the first leadership ballot he was trying to bring Dutton and Turnbull together.

After his meeting with Cormann, Turnbull called a news conference, insisting both Cormann and Morrison accompany him.

There, he announced he was dumping the top-end tax cuts and reversing plans to scrap the welfare supplement that was originally compensation for the carbon tax that had since been repealed. If Turnbull lost his leadership, he would not let his successor get the benefit of announcing the policy change he had wanted all along.

He also ensured both men would be asked to pledge their loyalty to him – publicly – which they did.

Morrison even put his arm around Turnbull as proof.

That night, Cormann went back to see Turnbull, accompanied by cabinet colleagues Mitch Fifield and Michaelia Cash – who Turnbull had defended throughout her own recent political difficulties. All withdrew their support.

Cormann’s public declaration on Thursday morning that Turnbull had lost majority support, made alongside Fifield and Cash, was what guaranteed a second ballot.

“It’s with great sadness and a heavy heart that we went to see the prime minister yesterday afternoon to advise him that, in our judgement, he no longer enjoyed the support of the majority of members in the Liberal Party party room, and that it was in the best interests of the Liberal Party to help manage an orderly transition to a new leader,” Cormann said.

“I did not want to be in this position. I have loyally supported Malcolm Turnbull since he was elected leader of the Liberal Party. I was wanting to continue to support Malcolm Turnbull for years to come as leader of the Liberal Party. But I can’t ignore reality.”

Turnbull had called a series of meetings the previous night, including with his treasurer, Scott Morrison.

Morrison and his supporters had made it known earlier in the week that he would not be a candidate if Turnbull was going to stand.

But Morrison was willing to position himself as an alternative to Dutton once Turnbull was out of the race.

On Thursday, Turnbull indicated he wouldn’t run if the numbers were against him, but gave colleagues mixed messages on whether he would change his mind. It seems Morrison was already making calls, offering himself as a better alternative than Dutton.

In order to become a candidate, Morrison needed Turnbull to concede defeat and not contest the leadership again. He wanted to take the leadership with clean hands, not burdened by having brought down a prime minister.

It is not clear exactly who persuaded Turnbull that he no longer controlled his own parliamentary party, but whoever did was wrong.

Turnbull decided that if the plotters could prove at least 43 MPs, of a possible 85, wanted a second leadership ballot, he would call a meeting for Friday at noon and hold a vote on whether there should be a second spill for the week. If most were in favour, he would step down.

Some of Turnbull’s supporters began drumming up support for Morrison.

“Malcolm believed that Scott was part of his Praetorian Guard,” one colleague says.

The delay, designed only to force the traitors to put names to their intentions, also gave Morrison extra time to lobby.

On Thursday afternoon, Julie Bishop indicated she would be a candidate. It’s understood she told colleagues she only did so once she was certain Turnbull would not run.

A series of encrypted WhatsApp messages leaked to the ABC’s Insiders program on Sunday revealed that moderate Liberals who might have been inclined to vote for Bishop were being urged to back Morrison instead.

The argument, put in a message from NSW Liberal Paul Fletcher, was that Cormann was “rumoured to be putting some WA votes behind Julie Bishop in round one”.

“Be aware that this is a ruse trying to get her ahead of Morrison so he drops out and his votes go to Dutton,” Fletcher wrote. “Despite our hearts tugging us to Julie, we need to vote with our heads for Scott in round one.”

That meant Bishop ran third and dropped out, leaving a contest between Morrison and Dutton.

The leaked messages also show Christopher Pyne saying he had warned Bishop. She has told others he didn’t.

What did not become clear until after Friday’s final vote – way too late for Turnbull – was that despite the 43 signatures, Dutton never had majority support.

In the end, Morrison won 45 to 40.

Morrison’s ministry was assembled within two days of his win, a fast turnaround for someone not expecting to become prime minister. It includes sacked former ministers Sussan Ley and Stuart Robert, both of whom are believed to have supported him.

They have been returned to the outer ministry despite having been demoted under Turnbull following controversies over their use of ministerial office and despite Morrison insisting the incoming leadership team of himself and Victorian Josh Frydenberg represent “a new generation”.

Cormann has lost part of his portfolio – the special minister of state dimension overseeing electoral issues and parliamentary expenses – to Morrison loyalist Alex Hawke.

Dutton’s junior henchmen are out.

A byelection is now expected in the prized Sydney seat of Wentworth as Malcolm Turnbull bows out of politics.

For the time being, Julie Bishop is staying in her own prized WA seat of Curtin. Close confidants say that’s to keep Attorney-General Christian Porter, whose own seat is very marginal, and Senator Cormann from trying to move in.

And Victorian Liberal MP Julia Banks, the only Liberal to win a seat from Labor at the 2016 election, announced this week that she won’t contest the next election – citing bullying, intimidation and harassment generally, and particularly through last week’s leadership turmoil.

Prime Minister Scott Morrison says he’ll have no truck with such thuggish behaviour.

“One of the things we are moving quickly to do is ensure we restore that strong culture in the Liberal Party and bring the party together and show the stability and unity that is necessary, that Australians are looking to me to provide,” he said.

Good luck with that.

This article was first published in the print edition of The Saturday Paper on Sep 1, 2018 as “How Morrison played everyone”. 

SOURCE:  https://www.thesaturdaypaper.com.au/news/politics/2018/09/01/how-morrison-played-everyone/15357240006796

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HOUSE PRICES FALL IN AUSTRALIA’S LARGEST CITIES

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Since peaking in September 2017, prices have fallen by 0.1 per cent in Sydney … not of much help to Australian First Home Buyers!

RESEARCH TUE 28 AUG 18

HOUSE PRICES FALL IN AUSTRALIA’S LARGEST CITIES

Australian home prices have continued to drift with declines reported across a majority of mainland state capitals.

Research from property data firm Corelogic has indicated that median home price have declined by 0.1 per cent in average weighted terms, leaving the decline over the past for weeks at 0.4 per cent.

Since peaking in September 2017, prices have fallen by 0.1 per cent in Sydney, Melbourne and Brisbane over the week while Adelaide managed register an increase of 0.2 per cent.

Adelaide’s prices have now risen 0.7 per cent over the year with Brisbane also seeing a 0.3 per cent increase.

Related: Is Australia’s Residential Market Experiencing a Credit Crunch?

Capital city home value changes

Capital City Weekly Change Monthly Change Year to date change 12 month change
Sydney -0.1% -0.3% -3.5% -5.6%
Melbourne -0.1% -0.7% -3.4% -1.6%
Brisbane -0.1% -0.1% 0.3% 0.9%
Adelaide 0.2% 0.7% 0.7% 1.0%
Perth -0.3% -2.2% -2.2% -2.2%

Comparatively, values in the other state capitals have all fallen by 2.2 per cent or more in Perth, Sydney and Melbourne.

Combined, the median price in the mainland state capitals has fallen 2.7 per cent so far this year in average weighted terms.

In Sydney, Perth and Melbourne median values have fallen by 5.6 per cent, 2.2 per cent and 1.6 per cent respectively over the past year, leaving the national decline at 3.1 per cent.

The trends across Australia’s regional housing markets – which have previously been more resilient to falls – have recently turned negative.

Melbourne has lead the downturn across capital cities in its monthly change, outpacing Sydney.

Related: Brisbane Leading the Nation in Property Performance Indicators, But Boom Talk Premature

Capital city properties listed for sale

Capital city No of new listings 12 month change (%) No of total listings 12 month change (%)
Sydney 6,512 -7.2% 27,067 22.3%
Melbourne 7,427 -6.5% 31,500 12.2%
Brisbane 3,933 -1.1% 19,790 1.7%
Adelaide 1,699 -6.1% 7,558 -5.5%
Perth 2,963 -9.4% 19,920 -0.3%

There are currently 22.3 per cent more homes up for sale in Sydney compared to a year ago, and 12.2 per cent in Melbourne, contributing to a 7.6 per cent national increase over the same period.

Listings have also increased in Brisbane, offsetting declines in all other capital cities.

While total listings have risen sharply in Sydney and Melbourne, new listings have actually fallen by 7.2 per cent in Sydney, and 6.5 per cent in Melbourne, compared to 12 months ago.

Nationally, 110,104 properties were put up for sale over the past year with 23,631 new listings put up for sale within the last six months.

SOURCE:

https://theurbandeveloper.com/articles/home-prices-continue-to-fall-in-australias-largest-cities?utm_medium=email&utm_campaign=300818%20NSW&utm_content=300818%20NSW+CID_4493b1ff1a4e2e540f771c362e5ebe54&utm_source=email&utm_term=

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Sydney’s water storages plunge as population explodes

Photo supplied:  Cordeaux Dam

WaterNSW has also revealed that housing developments built too close to pipelines and canals in Western Sydney have “already resulted in impacts to the water quality”. “Increasing urbanisation, particularly in western and southwestern Sydney, have resulted in increased pressure on the integrity of critical water supply infrastructure, namely the Warragamba Pipeline and the Upper Canal,” the documents state…

WaterNSW says that housing and land developments need to start considering the impact building is having on water supply. It is investigating “water augmentation strategies” to service the booming population…WHY should we sacrifice our water supply, and its quality … pay more for desalination to fill the coffers of those forcing “A Big Australia” on us??

NOT only high immigration but 1.4 million Visa holders currently in Australia … and this persists!

ANOTHER MAJOR THREAT TO SYDNEY WATER!

IN addition;

-proposal to raise the dam wall to flood substantial areas of the Blue Mountains NP such as the Kowmung (World Heritage)

-the reason that has been given is for flood mitigation downstream …. what it is about is facilitating even more OVERDEVELOPMENT!

-Fuel dumps from an airport located at Badgery’s Creek

-and drought conditions with pipes moving and cracking

-longwall mining and no doubt other factors j

THE GREATER SYDNEY COMMUNITY must UNITE to oppose all these threats to Our WATER!

 

Sydney’s water storages plunge as population explodes

By Leith van Onselen

With NSW declared 100% in drought:

The nosedive in Sydney’s water storages “is even steeper than going into the Millennium Drought”, according to The SMH:

As Sydney closes in on its driest autumn and winter since 2006 during the depth of the Millennium Drought, the city’s storages are at 65 per cent, down a quarter in 12 months…

“The nosedive [in water storage levels] is even steeper than going into the Millennium Drought”… Stuart Khan, a professor at the University of NSW’s School of Civil & Environmental Engineering, said…

Storages held enough water to supply the city’s population “for another two years – even without any rain at all over that period,” he said, adding that authorities “have planned for drought conditions”.

Determining how fast dam levels will drop hinges on water use, catchment rainfall and evaporation losses. At current rates, that 60 per cent level would be reached in about six months but at 0.8 percentage-point rate, it would be hit by early January – both before the desal plant will produce water…

The minister “has chronically underestimated the threat and risks of drought”, Mr Minns said. “Labor is demanding clarity on the water restrictions timetable.”

Justin Field, the Greens water spokesman, said “It makes sense to bring in stage 1 water restrictions earlier to reduce the likelihood of more extreme restrictions down the track”.

As usual, there’s no mention that Sydney has added nearly one million people in only the past 13-years. Nor that the city’s population is projected to balloon by another 1.73 million people over the next 20-years on the back of mass immigration, at the same time as droughts become more common because of climate change:

Around one million of this projected population growth is also expected to occur in Sydney’s West, whose water supply is already buckling:

Documents obtained by The Daily Telegraph can reveal WaterNSW and Sydney Water have voiced concerns that Sydney’s urban sprawl and booming population are putting increasing pressure on the water system, and steps need to be urgently taken to ensure Sydney is not hit by a water shortage.

WaterNSW has also revealed that housing developments built too close to pipelines and canals in Western Sydney have “already resulted in impacts to the water quality”. “Increasing urbanisation, particularly in western and southwestern Sydney, have resulted in increased pressure on the integrity of critical water supply infrastructure, namely the Warragamba Pipeline and the Upper Canal,” the documents state…

WaterNSW says that housing and land developments need to start considering the impact building is having on water supply. It is investigating “water augmentation strategies” to service the booming population…

Water scarcity is the elephant in the room of the population debate, and an issue Australia’s mass immigration ‘Big Australia’ boosters conveniently ignore.

unconventionaleconomist@hotmail.com

SOURCE:  https://www.macrobusiness.com.au/2018/08/sydneys-water-storages-plunge-population-explodes/

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FACTS … HIGH IMMIGRATION IS PUSHING DOWN WAGES

Photograph of Guy Debelle

PHOTO:  RBA Assistant Governor, Guy Debelle

Last week’s speech by RBA Assistant Governor, Guy Debelle, admitted that Australia’s turbo-charged immigration program has held down Australian wages growth …

More evidence mass immigration is pushing down wages

By Leith van Onselen

Last week’s speech by RBA Assistant Governor, Guy Debelle, admitted that Australia’s turbo-charged immigration program has held down Australian wages growth [my emphasis]:

The Bank’s forecast is that, as the labour market continues to tighten, wages growth should gradually pick up, and along with that we would expect market services inflation to also increase. However, as we have noted on a number of occasions, there is considerable uncertainty about the extent of unutilised capacity in the labour market and how quickly a reduction in spare capacity would translate into higher wage and price inflation. It is possible that the unemployment rate could fall faster than expected and wages growth could pick up more strongly as a result. Alternatively, it is possible that the flow of new workers into the labour force could continue to be stronger than usual, so that unemployment declines more slowly than we expect and wage pressures could take longer to emerge.

Clearly, the primary driver of “the flow of new workers into the labour force”, which has caused unemployment to “decline more slowly” and caused “wage pressures… [to] take longer to emerge” is immigration. That’s what happens when 200,000-plus migrants are added to the economy every year, most with work rights, thus ensuring labour supply is continually expanded.

Treasury’s recent propaganda report also admitted that most new jobs created in Australia have gone to migrants:

Recent migrants accounted for two-thirds (64.5 per cent) of the approximately 850,000 net jobs created in the past five years. For full-time employment, the impact is even more pronounced, with recent migrants accounting for 72.4 per cent of new jobs created.

Yesterday, CBA senior economist, Gareth Aird, released a new report confirming that Australia’s mass immigration ‘Big Australia’ program is contributing to low wages growth:

There is a close inverse relationship between underutilisation and wages growth (chart 5). As underutilisation rises (falls) wages growth falls (rises). The fitted line on chart 5 implies that for an underutilisation rate of 14%, wages growth, as measured by the WPI, should be around 2½%pa. In other words, most, but not all, of the current weakness in wages growth can be explained by a high level of labour market underutilisation.

Slack in the labour market is elevated in Australia because the supply of labour has exceeded the demand for workers. Policy has played a role. The decision to run a very high immigration program by OECD standards (charts 6 and 7) has augmented the supply of labour and pushed up the participation rate beyond what would have naturally occurred. That intensifies the competition for existing jobs while of course also adding to the demand for labour. So there is both a supply and demand impact.

The recent evidence suggests that running a high immigration program when there is plenty of slack in the labour market means that “skill shortages” are not able to manifest themselves as quickly as they might have otherwise because employees are able to hire from abroad in sizeable quantities. The relatively high intake of skilled workers looks to be a pre-emptive strike on the expectation that there will be skills shortages in the future. If there was widespread skills shortages then wages growth would be higher than its current rate of 2.1%pa.

Various Productivity Commission modelling has also shown that immigration lowers the wages of incumbent workers (see here). These results were confirmed recently by modelling from Victoria University (see here).

International analysis from the Bank of England and Cambridge University also shows that immigration reduces wages growth (see here).

The economics is simple: continually increasing labour supply via immigration necessarily reduces workers’ bargaining power and ergo wages growth.

Again I ask: why isn’t Australia’s union movement up in arms at Australia’s mass immigration ‘Big Australia’ policy, which is not only eroding workers’ conditions and pay, but also pushing-up their cost of living via housing as well.

unconventionaleconomist@hotmail.com

SOURCE:  https://www.macrobusiness.com.au/2018/08/evidence-mass-immigration-pushing-wages/

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CHINA’s EERIE GHOST CITIES … a‘symptom’ of the country’s economic troubles and housing bubble

64 MILLION EMPTY APARTMENTS IN CHINA!

THIS seemingly wasteful construction is carried out by both state-owned firms and private companies.

WHY doesn’t the Australian government learn from the impending disaster that is China?

WITH its economic growth dependent on the accumulation of debt used to build excess apartment precincts … it is no longer sustainable!

ISN’T it time Australia moved up the Value Chain into more technologically advanced industries?

THAT INNOVATION is the way of the future for our Economy?

OR have we forgotten something?  Like our manufacturers moved offshore for profit gain, and Australia has been seized by the Property Council!!

IN 2008/09 following the GFC, the FIRB ruling changed to allow

developers to sell 100% of “new homes” to foreign buyers … our housing is cheaper than that in China …

 

China’s eerie ghost cities a ‘symptom’ of the country’s economic troubles and housing bubble

Updated 

Media player: “Space” to play, “M” to mute, “left” and “right” to seek.

 

KEY POINTS:

  • There may be as many as 64 million empty apartments in China
  • Many people buy the properties as an investment with no intention of ever moving in
  • Author says ghost cities show growth is driven by debt in China

Fancy villas, high-rise apartment blocks, lakes, parks and sprawling road networks: Ghost cities in China have it all. Just one crucial element is missing — the people.

Built for a population that never came, about 50 of these surreal sites lay desolate across the country. But still the construction continues.

These new cities are usually built in rural areas on the outskirts of existing cities.

Designed for populations numbering in the hundreds of thousands, the mass construction projects can include towering high-rise condominiums, huge shopping centres, city squares, street lights and replicas of cities in Europe and elsewhere.

Dinny McMahon, author of China’s Great Wall of Debt, explained the driving force behind the new construction projects, seemingly built for no-one.

“The phenomenon very much has been driven by the debt splurge that really kicked into gear after the global financial crisis,” Mr McMahon said.

“Local governments around the country tried to juice and stimulate their economies by building more infrastructure and stimulating the property market.”

  • This seemingly wasteful construction is carried out by both state-owned firms and private companies. *

“Private property developers will build housing in places that end up being ghost cities because they believe in the ability of the Chinese property market to only go up and up and up,” he said.

’64 million empty apartments’

China’s housing vacancy rates, like many other potentially sensitive data, is shrouded in secrecy.

It is believed the number of empty apartments could have hit as many as 64.5 million — the number of properties that State Grid Corporation of China confirmed to the Beijing Morning Post as not having used electricity for six consecutive months in 2010. However, the state-owned company refuted that number to another Chinese media outlet just days later.

But not all ghost cities stay ghost cities.

Ghost Cities of China author Wade Shepard — who has been documenting the existence of ghost cities since he first stumbled across a sprawling vacant metropolis in 2006 — sees these cities as simply in a phase between construction and inhabitability.

“A lot of these cities that got their start in 2000, 2003 — they are pretty much developed — if you go there now you will not know that they were a new city,” Mr Shepard said, citing a number of examples including some of China’s most economically viable cities.

“If you look around, you will think this is a normal city and just assume this is the way it always was, not knowing that 10 years ago people were calling it a ghost city, 20 years ago it was just apartments and villages.”

 

Mr Shepard said the same kind of construction phase had been seen throughout global history when developed nations first expanded, just not on the same excessive scale as in China.

“They build more than anybody else, more extensively than anybody else, and they have more of an extensive master plan than pretty much any power, empire or kingdom in history ever had,” Mr Shepard said.

He hails China’s new big city movement as a great success that gives backwater cities the potential to develop and expand.

Unlike many cities across the globe where populations constantly outgrow the infrastructure,leaving city planners to find new ways of dealing with traffic jams and demand for more construction space, China is usually one step ahead.

As one Chinese city mayor said, it was like buying a suit a few sizes too big for a growing boy.

‘Locations where it was just never going to work’

 

Consultancy firm J Capital Research has made it its mission to document every ghost city in China, opening a website to show just how much empty property there is across the country.

Managing partner Tim Murray said many of China’s most prosperous cities had been created in this way, including Shenzen, which borders Hong Kong and is now China’s fourth largest city.

“That is an example of classic designed urbanisation going really well,” he said.

Another example is the Pudong new area of Shanghai which was once a “swamp” across the river from the main city.

“I was working in Shanghai when that was still a dream and I used to look at it and think ‘these guys are nuts just building so much and nobody is gonna use it’,” he said.

“I was wrong. It’s just been so successful.”

But Mr Murray said these examples were the exception, not the rule.

“This has been replicated now so many times all around the country in locations where it was just never going to work; where it just wasn’t a good idea,” he said.

Industry ‘jump-started the ghost city overnight’

Mr McMahon said whether a ghost city became inhabited or not depended on its ability to create jobs and industrial growth.

In the case of Zhengdong in Zhengzhou, capital of Central China’s Henan Province, Mr McMahon said the Government “threw tens of millions of dollars in incentives” to Foxconn, the Taiwanese maker of Apple’s iPhones, so the company agreed to open a factory in the town.

That factory employed 200,000 people and it “jump-started the ghost city overnight,” Mr McMahon, a former journalist for the Wall Street Journal in China, said.

“Most Chinese ghost cities don’t have the resources — or they don’t have the pull — of a major city like Zhengzhou does,” he said.

“So the idea that these places are going to fill up is an absolute dream because more often than not they’re built in places that migrants don’t want to move to, largely because the opportunities aren’t there.”

In Jing Jin New City, a luxury resort town 110 kilometres from Beijing, a high-speed railway line provides hope for a similar “jump-start”.

There are currently only a few small shops, so most home owners only visit during the holidays or on weekends, Ms Fan, who works for Jing Jin New City Real Estate, said.

  • The rail line to Beijing is set to open next year, but new regulations have now restricted the purchase of villas and apartments in Jing Jin New City to local residents, shutting out residents of Beijing who Ms Fan said made up 70-80 per cent of buyers. *

“It’s very difficult to sell now,” she said.

“There are customers who are interested, but they can’t buy it.”

‘Building an incredible amount of waste’

While other ghost cities might be largely empty, the apartments were mostly sold, Mr McMahon said.

Many people buy the property for investment with no intention of ever moving in, so supply significantly outweighed demand.

“And this speaks to the underlying problem of the Chinese economy … the importance of the property market and the extent to which it’s actually a bubble propping up prices,” he said.

“It’s incredibly difficult to measure and it’s incredibly difficult to say if and when things might actually go pear-shaped because the Government has done an incredible job at managing prices and insuring the whole thing doesn’t fall apart.”

Mr McMahon said he believed ghost cities were a “symptom of the problem” of how the Chinese economy worked, where growth was driven by debt.

“We’re now in a position in the Chinese economy where so much debt has been accumulated in the interest of building an incredible amount of waste, whether it be empty housing, empty factories, infrastructure in cities where the local authorities can never repay it … that sort of model of economic growth cannot continue,” he said.

“Everybody knows it. The officials in Beijing know it and have been trying very aggressively to both wean the economy off debt and try and come up with a new driver of growth.”

Officials in Beijing talk a lot about needing to move up the value chain into more technologically advanced industries, and that innovation is the way of the future for the Chinese economy.

“But at the moment, Beijing is really between a rock and a hard place because the economic growth is dependent on the accumulation of debt used to build stuff and it’s no longer sustainable without potentially something going very, very wrong.”

Topics: offbeatpopulation-and-demographicsworld-politicsurban-development-and-planningtravel-and-tourismchinaasia

First posted 

SOURCE:  http://www.abc.net.au/news/2018-06-27/china-ghost-cities-show-growth-driven-by-debt/9912186

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Could Section 44 exclude Tony Abbott and Barnaby Joyce from Parliament?

Could Abbott and Joyce really be disqualified?

A clear answer is needed to the question of whether Mr Abbott and Mr Joyce were offered payment as part of their special envoy roles. Mr Morrison, Mr Abbott or Mr Joyce could each easily answer that question.

If payment was indeed offered as part of the roles, the only way the issue of disqualification could be decided authoritatively is for the House of Representatives, where the government has a slim majority, to refer Mr Abbott and Mr Joyce to the High Court.

It is unlikely the government will refer them to the High Court, and quite likely that the opposition will pursue the issue — and also Peter Dutton’s potential section 44 problem — when parliament resumes in September.

Could Section 44 exclude Tony Abbott and Barnaby Joyce from Parliament?

 

Tony Abbott and Barnaby Joyce have each accepted job offers from new Prime Minister Scott Morrison to serve as his special envoys.

The Prime Minister’s offers may have been a clever way to keep these two former leaders busy and put their abilities to use. But these jobs may have inadvertently rendered both Mr Abbott and Mr Joyce disqualified from parliament under section 44 of the Constitution. That section disqualifies any MP who accepts a paid job in government that is not a ministerial position.

Tony Abbott is now the Prime Minister’s Special Envoy for Indigenous Affairs, whereas Barnaby Joyce is Special Envoy for Drought Assistance and Recovery.

Special envoys are not ministerial positions. Neither Mr Abbott nor Mr Joyce is part of the Morrison ministry. Their roles are to work with the relevant ministers and the prime minister to advance policy in these respective areas. The precise details of what they will be doing are not yet clear.

Section 44 of the Constitution sets out several grounds on which a politician will be disqualified from membership of parliament. Being a dual citizen is only one of them.

 

Another ground for disqualification is set out in section 44(iv). That provision disqualifies anyone holding an “office of profit under the Crown”, unless the position is that of a minister.

The special envoy roles look suspiciously like offices of profit under the Crown.

What is an office under the Crown?

There is no doubt the special envoys hold offices under the Crown.

In Re Lambie (No 2) from March this year, the High Court decided that Jacquie Lambie’s successor, who was the Mayor of Devonport in Tasmania, was not disqualified under section 44(iv).

The High Court held that a position is under the Crown if hiring or firing decisions are made by the executive government. Mayors are voted in and  out by the people, rather than hired and fired by governments.

The Prime Minister, who is the effective head of the executive government, appointed Abbott and Joyce to their special envoy roles. The Prime Minister can also sack Abbott and Joyce as special envoys if he wants.

Positions like Speaker of the House of Representatives, Leader of the Opposition, and Chairperson of a Parliamentary Committee are not “under the Crown”. They are parliamentary positions.

The key issue is whether the special envoy positions are “of profit”.

Is the position of special envoy ‘of profit’?

It has been reported that Abbott and Joyce were offered remuneration for their special envoy roles.

ABC Radio National Presenter Patricia Karvelas tweeted:

PatriciaKarvelas

@PatsKarvelas

Envoy news. Salaries not yet finalised. But both envoys will get extra staff

Access to staff does not make a position “of profit”. Nor does covering of work expenses. But a salary, however small, definitely makes a position “of profit”.

On the same day, having already accepted the special envoy job, Tony Abbott told 2GB radio host Ray Hadley that he would not be receiving any pay for his role as special envoy. Abbott said: “The other thing I want to say, Ray, is that I certainly don’t expect any extra pay”.

Hadley had not asked Mr Abbott about payment. Mr Abbott simply made the comment off his own bat.

This all suggests that Mr Abbott may have been offered remuneration for the special envoy job, but decided to decline that offer.

The High Court has said that to fall foul of section 44(iv) it does not matter whether a person is actually paid. What matters is “the character of the office”.

In the 1992 case of Sykes v Cleary, the High Court held that Philip Cleary, who had won the federal seat of Wills, was disqualified under section 44(iv). Cleary was a teacher who was on leave without pay at the time of the election.

The High Court decided that it doesn’t matter whether a person is actually receiving payment. What matters is whether payment attaches to the position. Cleary held an office of profit under the Crown even though he was not receiving any payment.

Chief Justice Anthony Mason and Justices John Toohey and Michael McHugh said:

The taking of leave without pay by a person who holds an office of profit under the Crown does not alter the character of the office which he or she holds. The person remains the holder of an office, notwithstanding that he or she is not in receipt of pay during the period of leave.

Logically, the same reasoning applies to an office-holder who waives their right to payment or declines to take a salary. A person is not saved from disqualification because they are not currently receiving payment.

 

Abbott and Joyce will be disqualified if, and this is the crux of the issue, remuneration was originally part of the special envoy job offers.

It doesn’t matter if Abbott and Joyce never asked for payment. It doesn’t matter that they declined an offer of payment. And it doesn’t matter that they aren’t actually being paid now.

If a non-ministerial position answers the description of an “office of profit under the Crown” then the holder of that position is disqualified.

Could Abbott and Joyce really be disqualified?

A clear answer is needed to the question of whether Mr Abbott and Mr Joyce were offered payment as part of their special envoy roles. Mr Morrison, Mr Abbott or Mr Joyce could each easily answer that question.

If payment was indeed offered as part of the roles, the only way the issue of disqualification could be decided authoritatively is for the House of Representatives, where the government has a slim majority, to refer Mr Abbott and Mr Joyce to the High Court.

It is unlikely the government will refer them to the High Court, and quite likely that the opposition will pursue the issue — and also Peter Dutton’s potential section 44 problem — when parliament resumes in September.

The section 44 saga continues.

Luke Beck is an associate professor of constitutional law at Monash University. Luke Beck is a member of the Australian Labor Party. This article reflects his views as a constitutional lawyer.

This piece was originally published at The Conversation.

SOURCE:  http://www.abc.net.au/news/2018-08-30/could-abbott-and-joyce-have-a-section-44-problem/10179944

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QUESTIONS RAISED about the CV of the man running Parramatta Council …

Gaping holes in CV of the man running one of Sydney’s most important councils

 

When City of Parramatta councillors met recently to select a chief executive, they had before them a resume that might have seemed fitting for the unprecedented investment flowing into the area.

Mark Stapleton, who had been the council’s director of property for the past year, had his hand up for the top job and was touting his experience with “$35bn of tenders & projects.”

City of Parramatta mayor Andrew Wilson with CEO Mark Stapleton.
City of Parramatta mayor Andrew Wilson with CEO Mark Stapleton.Photo: City of Parramatta

In his application, Mr Stapleton recalled standing on “the empty slab of concrete that was Barangaroo 10 years ago going through a design & capital raising proposal for $4.5bn with Phil Kearns & David Gonski.”

The experience had been an “incredible” one,” Mr Stapleton wrote, “where government private sector and a strong team can create an exceptional outcome.”

However, neither Mr Kearns nor Mr Gonski can recall the $4.5 billion deal, or meeting Mr Stapleton. And other claims made by or about Mr Stapleton, who last month was appointed to lead the 1176-employee council, are under question.

When the City of Parramatta announced his appointment, it told residents about his “senior executive” positions at construction firms Leighton Contractors and John Holland.

Neither company would comment on former staff, but it is understood Mr Stapleton’s job at John Holland was as a design manager on a specific project. “This is not an executive position,” a source said.

The position of chief executive of the City of Parramatta, which comes with a salary around $500,000, is crucial to an array of multi-billion dollar initiatives.

The state government is proposing new metro and light rail lines through the area. It is moving the Powerhouse Museum to Parramatta, investing in the upgrade of the Riverside Theatre, and building a new stadium. Indeed, the entire “three cities” strategy of the Greater Sydney Commission hinges on Parramatta’s success.

And the city has enjoyed significant recent residential and commercial investment. It was in relation to one of these investments that Mr Stapleton first met controversy, when he was suspended from his job late last year by then chief executive Greg Dyer.

The reasons for Mr Stapleton’s suspension have not been disclosed. But it is understood they include misleading councillors about a Walker Corporation development, a bullying allegation against him by a more junior employee, and rude behaviour at meetings.

In a response for this story, lawyers for Mr Stapleton said the allegation for the suspension was independently investigated, and not substantiated.

After Mr Dyer quit the council, Mr Stapleton, who sources said was qualified and capable in his role as property director, was recalled.

Mr Stapleton then emerged as one of two final candidates to replace his old boss. The other was the general manager of Wollongong City Council, David Farmer, who has run councils for more than 20 years.

A meeting to vote on the candidates on June 26 was closed to the public. At that meeting, mayor Andrew Wilson, deputy mayor Michelle Garrard, and independent Lorraine Wearne all requested they be recorded as voting against Mr Stapleton’s appointment.

At the following public meeting, councillors mentioned the vote to appoint Mr Stapleton had been split: seven against, eight in favour.

The City of Parramatta councillors that voted for Mark Stapleton. Top, L-R: Paul Han, Andrew Jefferies, Sameer Pandey, Benjamin Barrak. Bottom L-R: Martin Zaiter, Pierre Esber, Steven Issa, Bill Tyrrell. 
The City of Parramatta councillors that voted for Mark Stapleton. Top, L-R: Paul Han, Andrew Jefferies, Sameer Pandey, Benjamin Barrak. Bottom L-R: Martin Zaiter, Pierre Esber, Steven Issa, Bill Tyrrell.Photo: City of Parramatta

“I’ve never seen a CEO vote before where we had a split chamber,” Cr Wearne said at the July 9 meeting.

Contacted for this story, Cr Wearne said Mr Stapleton was “unqualified” for the job.

Cr Garrard said: “I don’t have confidence that he will be able to be impartial within the organisation, from a staff perspective and from a councillor perspective.”

Councillors who voted for Mr Stapleton included Liberals Steven Issa, Martin Zaiter, Bill Tyrrell, Benjamin Barrak, Andrew Jefferies and Sameer Pandey, as well as Labor representatives, Pierre Esber and Paul Han.

Cr Issa, who is on the State Executive of the NSW Liberal Party representing the party’s local government assembly, said Mr Stapleton emerged as the best candidate after a thorough process that included interviews and psychometric testing.

Cr Issa credited Mr Stapleton’s familiarity with the area, and experience delivering major projects.

“There’s a level of pragmatism there that I saw that I think would serve the City of Parramatta well.”

However the nature of Mr Stapleton’s project experience is unclear from the job application provided to the councillors, and which has been obtained by the Herald.

Many of the claims in the application, which is riddled with poor grammar and syntax, are unverifiable. The application includes diplomas in “commercial estate” and accounting, from unnamed institutes of technology and community colleges.

To view documents related to the application for the position:

 

One of the few testable claims was the account of having worked on a billion-dollar deal with Mr Gonski and Mr Kearns.

“After much brow furrowing neither of us have any recollection of this,” Mr Kearns told the Herald.

In emailed questions, the Herald asked Mr Stapleton about his contact with Mr Kearns and Mr Gonski, but did not receive a response on the issue.

Through his lawyers, Mr Stapleton denied being dishonest or fraudulent in his job application, or being unqualified to hold the position of chief executive.

Neither David Gonski nor Phil Kearns can recall a meeting with Mark Stapleton.
Neither David Gonski nor Phil Kearns can recall a meeting with Mark Stapleton.Photo: Fairfax Media

Since Mr Stapleton’s appointment, Parramatta’s director of strategic outcomes, Sue Weatherley, and head of HR, Leigh Yardy, have left the council.

In his own words, Mr Stapleton makes a virtue of shaking things up.

Under the heading “People & High Performance & Mindfulness & Industrial Psychologists,” Mr Stapleton writes in his successful application: “I feel its worth investing in the people in the various teams and go on the journey with them not being afraid to challenge the status quo.”

Jacob Saulwick

Jacob Saulwick is City Editor at The Sydney Morning Herald.

SOURCE:  https://www.smh.com.au/national/nsw/gaping-holes-in-cv-of-the-man-running-one-of-sydney-s-most-important-councils-20180829-p500jt.html

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FIRST AUSTRALIAN SUB-MARKET OF BUILD-TO-RENT ‘CO-LIVING’ PROPERTIES SET TO OPEN IN SYDNEY

WITH MILLENNIALS robbed of entry into the home market by a rodentine business sector …

that is looking to, it seems, indentured tenancy for a Whole Cohort of Australians.

Not only are they proposing “Build-to-Rent” but a sub-market of “Co-Living”; to live under one roof with a landlord leasing out rooms in an apartment complex with communal areas, services of cleaning and laundry, and a host to organise group activities … all included in the rent.

 

With the housing boom alleged to be in decline (despite RE Agents now on the ground across Asia; a delay to medium-density housing until after the March 2019 NSW Election) co-living is now set to also gain traction!

Prices for a room start from $525 a week, depending on the room type.

-room sizes range from 24 to 30 square metres 

HERE’s the not so funny punchline … will there be “coffin homes” across our cities?

“… I do like to be optimistic that councils and regulations around this type of building may relax when it comes to DA (development application) requirements and maybe even room-size requirements.

That could really help with housing affordability and shortage.”  *

 

FIRST AUSTRALIAN CO-LIVING PROPERTIES SET TO OPEN IN SYDNEY

August 28, 2018

UKO is set to launch in Stanmore in late September 2018.

Image: ATWD Studio

Hotel group Veriu co-founders Alex Thorpe and Rhys Williams are opening the doors of their co-living property UKO on September 21, with the first location at 30-34 Parramatta Road, Stanmore, in Sydney’s inner west, having 33 studios.

Separately, property investment company Caper Property, led by Chrystan Paul, is also expecting to unveil its co-living project in an inner Sydney location around the same time.

Furniture can be packed away to save space and change the room layout. Image: ATWD StudioFurniture can be packed away to save space and change the room layout. Image: ATWD Studio

Co-living is a sub-market of the build-to-rent sector where renters – mostly millennials – live under one roof. The real estate is owned by one landlord or a joint venture, meaning units are not built to be sold off individually, but rather leased out over the long term.

The property is typically an apartment complex with communal areas and also comes with services such as cleaning and laundry, as well as a host who organises group activities to foster a sense of community, all of which is included in the rent.

While it is a new concept in Australia, it has taken off in the US, Britain and Asia, with brands including WeWork’s WeLive, Common, The Collective and Vanke’s Port Apartment being the big players in the industry.

At UKO Stanmore, prices start from $525 a week, depending on the room type and the extra features it comes with, such as a balcony or courtyard. The minimum rental period is one week.

Room sizes range from 24 to 30 square metres and all studios include an ensuite, kitchenette, dishwasher and Wi-Fi. Despite the smaller sizes, the rooms can be reconfigured using the slide-away furniture to save space.

Mr Thorpe and Mr Williams aim to create a network of co-living properties through UKO across “core” Sydney areas, with properties in Paddington and Newtown set to open from 2019.

Co-living projects have a strong focus on community, with organised group activities and communal spaces. Photo: UKOCo-living properties have a strong focus on community, with organised group activities and communal spaces. Photo: UKO

“There is a growing mindset that people are constantly forced to compromise on how they live and work, especially in growing urban cities such as Sydney. We want people to feel that they are getting a return on their rent, almost as an investment, rather than dead money,” UKO general manager David Fitzpatrick said.

“We do this by offering access to a personal and professional network facilitated by the onsite community host.”

Mr Fitzpatrick said the places “would blend the concepts of live, work, learn and play” to create a community, through features such as the communal courtyard.

Emerging industry

While Caper Property has not confirmed where its first co-living development will be, Mr Paul revealed to Commercial Real Estate that the company had a pipeline of six properties, three of which they own.

He also confirmed that three properties will come online over the next 12 months, all of which will be in inner Sydney suburbs.

One of the properties includes Leichhardt’s Bald Faced Stag, which Caper will redevelop into a 120-bed co-living space, anchored by a restaurant and bar precinct, as well as a cinema and live music venue. That is slated to launch in late 2021.

The company acquired the inner west pub for $7.98 million in April 2018, and more recently bought the Hannah’s Pies site in Ultimo for about $20 million.

Another one of Caper’s co-living projects is in Camperdown, which is “expected to be one of the largest co-living developments of its kind” when completed, according to its website.

The Bald Faced Stag in Leichhardt could be redeveloped into co-living. Photo: Google MapsThe Bald Faced Stag in Leichhardt could be redeveloped into co-living. Photo: Google Maps

“We chose these two suburbs (Camperdown and Leichhardt) as we have identified them as long-term growth corridors. Keeping in mind that the benefit of a build-to-rent model (ie. co-living) is that we can invest in areas where there will be long-term growth,” Mr Paul said, adding that they are developing and holding the assets for the long term.

He said that the strong returns from other asset classes due to the property boom over the past few years had discouraged investors from exploring co-living, and this had prevented the sector from gaining traction in Australia.

“Property investors/developers have been able to yield healthy returns in most property sectors and they have used these returns as a benchmark when assessing new projects and asset classes,” Mr Paul said.

“In a boom market, co-living wouldn’t appear to stack up as its yields fall somewhere between traditional residential and a hotel, let’s say. However, as the market starts to cool, investors can no longer use the same benchmarks when assessing new projects and they value stability and cash-flow over capital gains.

“Co-living is a sub-sector of the build-to-rent sector and we will benefit from the same momentum of build-to-rent, which is already gaining traction in light of the cooling market and a change in investor appetite.”

And as more millennials give up on or further delay buying property, the growing pool of renters in Australia who will consider co-living is on the rise, Mr Paul said.

Another co-living company Kin is scheduled to launch its first property, with a capacity of 20 people, in early 2019 in the Newcastle region, co-founder Daniel Harris said.

He has received applications from up to 60 people, but had to stop accepting registrations as details were still unconfirmed.

“The demand side is definitely no issue and people want to be living in these types of things and we even had people say ‘I did this overseas and I’ve been waiting for it to come here’,” he said.

Mr Harris said that if any market required the sector it was Sydney, given its affordability issues.

*

“I predict we’re catching on to this and I do like to be optimistic that councils and regulations around this type of building may relax when it comes to DA (development application) requirements and maybe even room-size requirements. That could really help with housing affordability and shortage.”  *

SOURCE:  https://www.commercialrealestate.com.au/news/first-australian-co-living-properties-set-to-open-in-sydney/?utm_campaign=featured-masthead&utm_source=smh&utm_medium=link

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BILL SHORTEN … the Australian People are over A Big Australia …

Labor leader Bill Shorten says he's ready to face a Scott Morrison-led government.

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Bill Shorten backs a ‘Big Australia’

By Leith van Onselen

Any hope that Australia’s major political parties would support a more sustainable immigration have been hosed over the past 24 hours. Hot on the heels of Prime Minister Scott Morrison launching his decentralisation smokescreen, Labor leader Bill Shorten has backed the current intake on ABC Radio and deployed his own infrastructure smokescreen:

FAINE: And congestion is directly tied to immigration which was one of the drivers for the Liberal Party’s unrest last week.

SHORTEN: Well first of all, I understand the frustration of Australians about crowded infrastructure, and our immigration should be what’s in the national interest but part of that debate has to be fixing up our infrastructure.

But going back to where we started with the proposal from Victorian Labor about a railway…

FAINE: But this is about people’s concerns as cities become increasingly congested, people’s response is not to blame politicians for the failure to deal with infrastructure but instead to turn around and say let’s cut immigration. Does Bill Shorten want to cut immigration?

SHORTEN: Listen, our immigration is one issue but let’s talk about the failure of politics. The reason why I went back in detail to the history of an outer ring railway in Melbourne…

FAINE: So on immigration, simple yes or no answer, do you want to change the way we do immigration? Do you want to reduce the number of people who get permission to move to Australia?

SHORTEN: It’s not a simple yes or no issue. If we can take people in based upon our infrastructure, based upon the moving to the regions that’s a plus.

FAINE: So you agree with Alan Tudge, the newly sworn-in Minister, who says let’s try and get migrants to go to the regions rather than Sydney and Melbourne.

SHORTEN: Yeah I think that there is – and it’s not just the regions. You know, South Australia, there are plenty of places who would like to take some migrants. Immigration has been good for Australia but there’s no point in bringing in masses and masses of people if our infrastructure isn’t keeping pace. So I guess what I’m saying is you can’t just look at one part of it. We’re an immigrant nation and immigration has been good.

Jon your family, my family, pretty much anyone other than a first Australian came from somewhere else. But having said that we’ve got to make sure that we’re not you know just being ignorant of what happens if we’re overcrowding our cities so that’s why you’ve got to deal with the frustration people have on infrastructure.

Who is representing the Australian people? The past five opinion polls on the issue have clearly shown that Australian voters want immigration to be reduced:

  • Australian Population Research Institute: 54% want lower immigration;
  • Newspoll: 56% want lower immigration;
  • Essential: 54% believe Australia’s population is growing too fast and 64% believe immigration is too high;
  • Lowy: 54% of people think the total number of migrants coming to Australia each year is too high; and
  • Newspoll: 74% of voters support the Turnbull government’s cut of more than 10% to the annual permanent migrant intake to 163,000 last financial year.

Labor’s inequality agenda would be greatly strengthened by also halving the permanent migrant intake – i.e. returning it back to something more in line with the historical average.

Income inequality and home ownership would be improved as there would be less upward pressure on house prices, particularly in Sydney and Melbourne, and less economic rents flowing to the owners of capital (who benefit the most from mass immigration while ordinary residents bear the costs).

Wages growth would also improve, other things equal, as there is less competition for jobs and workers’ bargaining power is increased, which would also help to reduce inequality.

There would be less youth unemployment, as employers are incentivised to hire and train young workers and graduates rather than taking the easy route of importing a migrant.

Australia’s economic growth and job creation would also become more broad-based and less concentrated in inner Sydney and Melbourne. Lower population growth would take pressure off interest rates and the currency.

Thus, the Australian dollar would fall more quickly than otherwise helping to cushion the post mining-boom adjustment as tradable sectors become more competitive more quickly.

This would spread benefits much more widely than just the “citizenship export” sectors of education, as well as simply piling more unproductive consumers into Sydney and Melbourne (blowing the current account deficit and increasing debt).

Lower population growth would also lift productivity and income by decongesting cities and, over the long-run, shares the depleting Australia’s fixed national endowment of resources among fewer people, also ensuring higher income per capita.

Labor needs to ask itself: how is maintaining a mass immigration program – which is projected to flood Sydney and Melbourne with 87,000 and 97,000 people a year respectively for decades to come – compatible with a fairer, more sustainable and socially cohesive Australia?

Such turbo-charged immigration necessarily will make housing affordability worse, dilute workers’ bargaining power, enrich the capital owners and wreck overall livability (e.g. via worsening congestion).

unconventionaleconomist@hotmail.com

CHINA’s AID TO PAPUA NEW GUINEA THREATENS AUSTRALIA’s INFLUENCE

 

Papua New Guinea’s prime minister Peter O’Neill with China’s president Xi Jinping in June.

From 2012 to 2021, the AUSTRALIAN aid budget fell by 32% while all other government spending increased by 31%. Australia’s aid budget, as a proportion of national income, is the lowest it has ever been.

And Pryke, director of the Lowy Institute’s Pacific Islands program, said Australia’s aid program was not well understood by the public. A Lowy Institute poll this year found Australians believed the government spent about 14% of the federal budget on aid funding, and should reduce that figure to 10%. Australia actually spends 0.8% of its budget on aid.

“We think of ourselves as a generous country, and that our aid program will reflect that,” Pryke said.

“But we don’t concern ourselves with the details; we trust the government to do what’s right. But the government is not doing what is right.”

CHINA’s AID TO PAPUA NEW GUINEA THREATENS AUSTRALIA’s INFLUENCE

China is increasing its sway with ‘few-strings-attached’ loans while Australia’s aid is seen as paternalistic

Ben Doherty

Last modified on Tue 3 Jul 2018 07.43 AEST

Papua New Guinea’s prime minister Peter O’Neill with China’s president Xi Jinping in June.  Photograph: Fred Dufour/AFP/Getty Images

China’s aid spending in Papua New Guinea – with its focus on infrastructure and “few-strings-attached” concessional loans – risks eroding Australia’s influence in the country, with Australian aid sometimes viewed as paternalistic and unwieldy.

A Deakin University submission to a parliamentary inquiry, based on interviews with Papua New Guinean business, political, academic and community leaders argues Australia risks being diminished by rising Chinese spending.

PNG is Australia’s closest neighbour, and for reasons of proximity and a shared history – PNG was under Australian administration until 1975 – Australia has been its most significant international partner.

But China has recently dramatically increased its aid spending in PNG, with a particular focus on signature pieces of infrastructure and concessional loans.

Warning sounded over China’s ‘debtbook diplomacy’
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According to the Deakin University submission, “those interviewed noted the differences of the structure, transparency and detail of Australian aid planning to that of the more opaque Chinese aid. For one interviewee, this made ‘Chinese aid more effective. Chinese aid is unconditional, no strings attached … the government can use this aid more flexibly’.”

There was a view from some respondents that Australian aid – highly accountable, and focused on the human sectors, such as education, health and gender – was sometimes seen as paternalistic.

“It was also noted that ‘Australia’s influence has diminished considerably as a result of the rise in Chinese aid flows to PNG,” the submission says.

One of the authors of the submission, Prof Matthew Clarke, told the Guardian China’s aid to PNG was recognised there as a vehicle for increasing Beijing’s influence in the country, its trading sphere and leverage in the region.

“When it talks to PNG, China talks about a ‘south-to-south’ relationship,” Clarke said. “It sees itself as being a developing economy, as much more of an equal partner, which is well-received in PNG.

“And the type of aid China is offering also lends itself to the Melanesian context, the ‘big man’ political culture, where leaders can point to a piece of infrastructure and say, ‘look what I’ve delivered, look what I’ve brought’.”

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Clarke said the PNG government was pragmatic about aid, and willing to play one donor off against another in order to achieve a desired outcome.

“There are probably two broad lessons: that this is not an issue that just involves Australians and China – that the voices and views of Papua New Guineans must be considered. If we fail to listen, we won’t have a good outcome,” he said.

“And that Australia needs to be smarter with its aid. For Papua New Guinean leaders, it is easier to critique the Australian aid program because another is there to compete and take its place.”

The parliament’s joint standing committee on foreign affairs, defence and trade is undertaking an inquiry into the effectiveness of Australia’s aid in the Indo-Pacific region and “its role in supporting our regional interests”.

Australia is the largest aid donor in the Pacific, with 90% of its $3.9bn aid budget directed towards partners in the Indo-Pacific.

But China’s growing interest has been followed by reports of plans to build military bases in countries such as Vanuatu, and its assertiveness in militarising atolls in the South China Sea is seen as a template for increased military influence.

Australia remains the dominant aid partner. The Lowy Institute estimates that between 2006 and 2016, Australia has dedicated $7.7bn in aid to the region, dwarfing China’s $1.7b. However, there are concerns over China’s rising interest.

There is a real risk in trying to outcompete China. The reality is they have deeper pockets
Jonathan Pryke

The foreign minister, Julie Bishop, said small states in the region could be harmed by unsustainable debt through aid “loans”, with debt-for-equity swaps imperilling their sovereignty.

“We’re concerned that the consequences of entering into some of these financing arrangements will be detrimental to their long-term sovereignty,” she said.

Australia also remains the largest donor to PNG, but Australia’s aid to PNG performs badly in terms of its efficacy and accountability.

“That,” argues Jonathan Pryke, director of the Lowy Institute’s Pacific Islands program, “is a reflection of how difficult an environment to operate in PNG is, and how important engagement is.”

Pryke said it was risk for Australia to view China’s rising presence in PNG solely as a threat.

“We should not look to be rivalling with China,” he said. “Looking at our aid program through the lens of a cold war mentality – that could actually result in aid being less effective. There is a real risk in trying to outcompete China. The reality is they have deeper pockets.”

But there are growing concerns over how aid is delivered. China’s approach to aid – by engaging directly with the political elites – is already undermining the weak institutions that countries like Australia seek to work through, Pryke said.

“The way countries like China go straight to the ministerial level – they come in with few strings attached and do whatever the minister wants – that really undermines the strategic planning of government agencies,” he said.

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Pryke said Australia needed to bring a collaborative approach to aid in PNG and across the Pacific.

“I think the line Julie Bishop had was about right: recognising that other countries will be in the region, but that Australia wants to be the ‘partner of choice’,” he said.

Pryke said the parliament’s review of aid was welcome. After years of disruption, the subsuming of AusAID into the Department of Foreign Affairs and Trade, the loss of development professionals inside the public service, and massive budget cuts, a re-evaluation of Australia’s aid priorities and direction was needed, he said.

From 2012 to 2021, the aid budget fell by 32% while all other government spending increased by 31%. Australia’s aid budget, as a proportion of national income, is the lowest it has ever been.

And Pryke said Australia’s aid program was not well understood by the public. A Lowy Institute poll this year found Australians believed the government spent about 14% of the federal budget on aid funding, and should reduce that figure to 10%. Australia actually spends 0.8% of its budget on aid.

“We think of ourselves as a generous country, and that our aid program will reflect that,” Pryke said. “But we don’t concern ourselves with the details; we trust the government to do what’s right. But the government is not doing what is right.”

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SOURCE:  https://www.theguardian.com/world/2018/jul/02/chinas-aid-to-papua-new-guinea-threatens-australias-influence

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