Australia's two most senior legal officers square off

Attorney-General George Brandis is making the news again for all the wrong reasons.

The Sydney Morning Herald, 5 October 2016:

Attorney-General George Brandis is facing calls to resign after the government's top legal adviser accused him of misleading Parliament, in a dramatic escalation of a toxic row between the country's two most senior legal officers.

Senator Brandis has come under fire over a contentious move to restrict his ministerial colleagues' ability to seek independent legal advice directly from Solicitor-General Justin Gleeson, SC.

Documents released at a Senate inquiry on Wednesday suggest same-sex marriage laws and a proposal to strip dual nationals involved in terrorism of Australian citizenship were flashpoints in a simmering feud between the two men.

Mr Gleeson, the government's top legal adviser, said in an explosive submission to the inquiry that he had not been consulted about a change requiring all ministers – including the prime minister – to obtain the written approval of Senator Brandis before seeking his advice.

Senator Brandis claimed in Parliament Mr Gleeson was consulted about the legally binding change, made days before the election.

Mr Gleeson said he had taken steps to have the change "withdrawn and for a proper consultation process to commence" but they had "proved futile".

"Had I been consulted ... I would have made a submission to the Attorney-General, in the strongest terms, that [the change] should not be made," Mr Gleeson said.

Legal experts have expressed concern the change is a power grab that restricts the independence of the Solicitor-General.

Mr Gleeson said there had been times since his appointment in 2013 when he had been asked directly by "persons, such as a Prime Minister or Governor-General" to provide confidential advice and it was "critically important" this should continue.

The Sydney Morning Herald, 5 October 2016:

Mr Gleeson wrote to Senator Brandis in November 2015, raising concerns the Australian Government Solicitor (AGS) rather than his office was consulted on a marriage equality proposal that was "under active consideration by the government".

Mr Gleeson also said he was not consulted about significant changes to a proposal to strip dual nationals involved in terrorism of Australian citizenship. Senator Brandis later made public statements that Mr Gleeson had advised there was a "good prospect" the law would withstand a High Court challenge….

The Guardian, 5 October 2016:

So what did George Brandis tell the Senate? He tabled an unequivocal statement that he had consulted the solicitor general in relation to the Legal Services Direction:

“Section 55ZF of the Judiciary Act 1903 empowers the attorney general to issue directions, which are to apply generally to Commonwealth legal work, or are to apply to Commonwealth legal work being performed, or to be performed, in relation to a particular matter. As the Direction relates to the process for referring a question of law to the solicitor general, the attorney general has consulted the solicitor general.”

A document obtained under Freedom of Information by The Guardian newspaper demonstrates that the Attorney-General has a rather odd notion of what consultation entails.

This letter clearly highlights the fact that there had been no prior consultation on changes to Legal Services Direction 2005:

Unfortunately for Senator Brandis the current Senate Standing Committee on Legal and Constitutional Affairs' inquiry into the Nature and scope of the consultations prior to the making of the Legal Services Amendment (Solicitor-General Opinions) Direction 2016 allows the Solicitor-General of the Commonwealth to give a full and frank explanation of the circumstances surrounding the Attorney-General's blatant power grab.

Something Justin Gleeson SC avails himself of in Submission No. 3 to the inquiry:

Evidence given at the 5 October 2016 inquiry hearing supports the contention that the Solicitor-General was only consulted about a guidance document (now superseded) not the directions document.

It  would appear that the Attorney-General has indeed knowingly mislead the Australian Parliament.

A position that sections of the mainstream media support.

Crikey.com.au, 6 October 2016:

George Brandis has blatantly misled parliament and has to resign. And his reluctance to use a better lawyer than himself for advice is behind the debacle……

Brandis has clearly, plainly misled Parliament, and on a very important issue. There’s no wriggle room or get-out clause for the provincial lawyer from Brisbane. He’s got to go.

As to a motive imputed to Brandis by the Crikey journalist - I suspect that the Solicitor-General holds a similar view although more diplomatically worded here:

Political Career Path by ‏tweeter @interrogativus

House of Representatives Standing Committee on Economics' Review of Australia's Four Major Banks - Days 1 & 2

On 15 September 2016 the Australian Treasurer asked the House of Representatives Standing Committee on Economics to inquire into and report on a Review of Australia's Four Major Banks.

Public hearing were conducted on 4 to 6 October.

News.com.au reporting on the Commonwealth Bank appearance on 4 October 2016:

Commonwealth Bank chief Ian Narev to face parliamentary inquiry into banking system…..

On Tuesday Mr Narev admitted an independent review found one in 10 customers received “inappropriate financial advice” from the bank.

Speaking to MPs, he said an independent report last week found of 8000 customers who asked for their financial advice to be reviewed, 6000 had been completed.

It found more than 10 per cent of those were given inappropriate advice. The bank had paid out $11 million in claims since its initial payout of $52 million several years ago.

Mr Narev defended the time it had taken to resolve the matter and said it would be wrapped up by the end of the year.

“We’ve gone back a large number of years in this program to statements of advice that go back prior to the global financial crisis,” he said. “So yes it has taken a period of time to do that but we’ve done it thoroughly, with independent oversight.”…

When asked by Labor’s Pat Conroy about whether there had been disciplinary consequences for CommInsure officers who rejected insurance claims from terminally ill people or refused to pay out life insurance, Mr Narev said there had been no terminations of employment.

“There are certainly individuals where we know enough about them that they’ve had some consequences related to remuneration but at this stage we have not had individuals terminated because of this because we’ve not seen the need to do that,” he said.

Independent committees within the bank will decide on disciplinary action after the review is completed.

Mr Narev said he expected there would be more cases of poor customer outcomes, but said this would be followed by more announcements regarding compensation due to customers…..

This was The Canberra Times commenting that same day:

Power is a funny thing.

It shifts and flows, is both tangible and vague.

Often, it is most identifiable when it is missing. 

As Ian Narev, the Commonwealth Bank CEO who received $12.3 million in pay last financial year, fronted the first of what are to be annual parliamentary committee hearings, who held the power was clear.

And it wasn't the government.

As far as Narev was concerned, everything he needed to say was said at his opening statement - the bank had not always done right by customers, but it was learning and changing and on the whole, its customers were "the most satisfied they've been".  

It was all, he said, about being strong and fair.  Strong banks equalled a strong economy. And that was almost an excuse for anything, even if they needed to work on being a little more fair.

Throughout the three-hour hearing, he often referred to what he said at the beginning, to the point where it became a mantra, no matter how many cases were mentioned.

On 5 October it was The Sydney Morning Herald which noticed what is probably a Brian Loughnane-inspired evidential trend:

This time, it was Shayne Elliott, the ANZ chief executive officer, who was very sorry.

He was very sorry for the issues within its wealth management division and its rural lending business, which saw ANZ foreclose on drought-stricken farmers.  

He was very sorry for not supplying all the promised services to thousands of financial planning customers, resulting in $30 million compensation. 

Very sorry for overcharging fees.

Very sorry for errors of a "reasonable magnitude" which saw more than 1.3 million customers within the OnePath financial advisory and life insurance arm suffer, including 1400 who had their superannuation directed to the wrong account.

These apologies are the opening moves.

But they were "mistakes", and the bank has since "put it right".

Processes have changed, systems have been put in place.  There's no reason to push further, Mr Elliott implied.  He's "proud of the culture of the bank", because when it's made aware of problems, it fixes them.

There's nothing more to see here.

Herald Sun, 5 October 2016:

Regarding the treatment of customers, Mr Elliott said ANZ had “not always met the standards we set for ourselves or that the community rightly expects of us”. He revealed the bank had seen off 40 financial planners in the past year after the bank breached regulatory rules.

Mr Elliott also admitted the bank had “poorly managed” an incident when 1400 customers had superannuation directed into the wrong account.

The Sydney Morning Herald, 6 October 2016:

So how remiss had the banks previously been in dealing with their indiscretions?

Let's take ANZ. Last year it reported 45 breaches by its financial planners to the regulator. That is one in 20 and in one year. But the year before there were only six reported.

As Pat Conroy noted,  that was a 750 per cent increase in reported breaches in the space of a year so either there was a massive jump in adviser breaches or they had not been reported in the past.

Elliott had to admit the latter was more likely.

Thus far the big banks have been all but laughing openly at parliament and the general public.  

Commencing at 9.15am this morning it's NAB and Westpac's turn to pretend to care tuppence.

Hearing transcripts can be found here.

Using tax offsets as a principal funding device to encourage self-assessing corporations to conduct research and development. What could possibly go wrong?

Providing a tax incentive for industry to conduct, in a scientific way, experimental activities for the purpose of generating new knowledge or information in either a general or applied form. [C’wealth Income Tax Assessment Act 1997 - SECT 355.5]

What could possibly go wrong when a federal government primarily funds business research and development (R&D) by offering private corporations tax offsets for conducting such activities, while at the same time allowing them to self-assess whether they are eligible for these tax incentives and whether their research is genuine?

Well for a start, the companies involved tend to employ less science, technology, engineering and mathematics graduates to conduct their R&D.

Given that on 15 June 2016 The Australian reported that; the Productivity Commission says STEM graduates fare poorly in the job market, apart from those who have studied healthcare, mining engineering and surveying. The outlook for mathematics and computer science qualifications are only slightly below average, however there are big gaps for graduates in life sciences, chemistry and the physical sciences. Employment outcomes improve three years after graduation, but 20 per cent of people with bachelor degrees in natural and physical sciences have still not got a job. Of those who do get work, many are in an unrelated field. About a quarter of people with science degrees say their qualifications are not relevant to their employment, one has to wonder why business and industry in Australia are not availing themselves of these qualified graduates.

Then there is the fact that it appears that this government program is not always well targeted.

Another flaw in this system is that voters have no way of knowing which companies are receiving these tax incentives and how much they are receiving, or of assessing what government foregoing so much tax income annually actually achieves as outcomes for the economy.

If science actually matters to the Turnbull Government it should matter not just in universities and identified research institutes but in all its aspects – including allegedly market-driven R&D.

One has to suspect that a little more academic discipline in business research and development might lead to better outcomes.

BACKGROUND

Dept. of Industry, Innovation and Science, Review of the R&D Tax Incentive (Ferris, Finkel and Frasier) 4 April 2016:

The R&D Tax Incentive (the Incentive) is the largest component of Australian government support for innovation, with around 13,700 entities performing $19.5 billion of R&D at an estimated cost to government of $2.95 billion in 2013-14. The Government commissioned this review to:

‘identify opportunities to improve the effectiveness and integrity of the R&D Tax Incentive, including by sharpening its focus on encouraging additional R&D spending.’

Reviewing the programme against these terms of reference involves the evaluation of the programme against its objectives, weighed against the costs, to measure the net social benefit.

The objectives, as stated in the programme’s legislation, are to ‘encourage industry to conduct research and development activities that might otherwise not be conducted…to benefit the wider Australian economy’. In other words, the Incentive seeks to encourage additional R&D (additionality) that benefits others (spillovers).

Most OECD countries have incentive schemes for R&D. Australia and most other countries use tax incentives as part of their public support, but Australia, Canada and the Netherlands are unusual in having tax measures as the principal form of support for business R&D. Countries such as Finland, Germany and Sweden are examples at the other end of the spectrum, in that they do not use tax incentives at all but rather support business R&D through direct measures such as competitive grants.

Overall assessment

The review panel finds that the programme falls short of meeting its stated objectives of additionality and spillovers. There are a number of areas where improvements could be sought in order to improve the effectiveness and integrity of the programme and achieve a stronger focus on additionality.

Based on the best estimates of additionality and spillovers, the panel found that the programme could be better targeted. The areas of improvement identified in this review would be likely to generate greater benefit from the programme for the Australian economy.….

The panel notes that there is a modest amount of collaboration with publicly-funded research organisations (PFROs) within the programme, but it is not an explicit focus. The panel also notes the low employment level of Science, Technology, Engineering and Mathematics (STEM) PhD graduates in Australian industry relative to other OECD countries. This represents a lost opportunity for greater spillovers of knowledge between larger companies, PFROs and the broader marketplace…..

The panel notes that despite the level of coordination between AusIndustry and the ATO, the significant growth in the scale of the programme is placing increasing strain on the administrative and compliance model for the programme. The Government should consider options to improve administration. These could include: adopting a single application process rather than the current separation of registration and claims, introducing a single database for the entire programme, reviewing whether both AusIndustry and the ATO should continue to administer the programme jointly and closer collaboration and streamlining around review and findings. Either or both agencies may require additional resourcing to enable such improvements.

To place the programme into alignment with modern expectations and to allow public visibility of companies receiving public support for their activities, tax secrecy provisions should be adjusted to allow the publication of the names of companies claiming the Incentive and the amounts of R&D they have claimed…..

Australian Federal Police spokesperson careful not to say that investigation had 'cleared' Brough & Ashby

This was The Daily Examiner (News Corp) take on the completion of the Australian Federal Police investigation into the unlawful disclosure of information by Commonwealth officers alleged to have occurred when a member of the Speaker of the House of Representatives’ staff photocopied details of the diary and gave it to a person desirous of unseating Peter Slipper:

However, what the Australian Federal Police (AFP) stated was not a clearing of anyone’s name.

As at the time of writing there is no published media release from the AFP one has to rely on details gleaned from various media articles.

“Following a thorough investigation material was provided to the Commonwealth Director of Public Prosecutions for certain advice. As a result of the advice provided by the CDPP the matter did not proceed further. The length of this investigation has been influenced by a number of factors, including, but not limited to the availability of individuals to provide statements, the provision of materials from third parties, and the substantial volume of material that needed to be assessed.”

http://www.couriermail.com.au/news/queensland/police-drop-investigation-into-alleged-copying-of-peter-slippers-diary/news-story/956daed844f1908d04b8eda5e29d3a2f

In a statement to the ABC, the AFP said it considered the matter now finalised.

"In September 2014 the AFP received a request to investigate matters relating to the alleged unauthorised disclosure of information from the official diary of former speaker of the House of Representatives, Peter Slipper," the statement read.

"Following a thorough investigation material was provided to the Commonwealth Director of Public Prosecutions (CDPP) for certain advice.

"As a result of the advice provided by the CDPP the matter did not proceed further."

http://www.abc.net.au/news/2016-10-04/afp-drops-investigation-into-peter-slipper's-diary-leaks/7902172

Mr Slipper said on Tuesday his lawyers has been informed by AFP assistant commissioner Shane Connelly that the investigation had been closed.  In a letter, Mr Connelly said a review found the available evidence was insufficient for any potential prosecution. 

http://www.smh.com.au/federal-politics/political-news/peter-slipper-diary-james-ashby-and-mal-brough-in-clear-as-afp-drops-investigation-20161004-gruiib.html

In a letter to Mr Brough’s lawyers, AFP Assistant Commissioner Shane Connelly said the investigation had been finished and no charges laid.

“I write to advise you of the outcome of the Australian Federal Police ‘AFP’ investigation into the allegation a former staff member of then Speaker of the House of Representatives Peter Slipper had disclosed parliamentary diary entries of Mr Slipper without his authority,’’ the letter says.

“A review of the evidence available to support a potential prosecution has determined the evidence is not sufficient to prove all elements of the relevant ­offence ... as a result, the AFP will be taking no further action in ­relation to the matter.’’

http://www.theaustralian.com.au/national-affairs/mal-brough-blasts-afp-for-killing-my-career/news-story/8e55735cefd5c0eee8af1036e8a53063

I write to advise you of the outcome of the Australian Federal Police ‘AFP’ investigation into the allegation a former staff member of then speaker of the House of Representatives Peter Slipper had disclosed parliamentary diary entries of Mr Slipper without his authority … A review of the evidence available to support a potential prosecution has determined the evidence is not sufficient to prove all elements of the relevant offence, being the disclosures of information by Commonwealth officers as described in section 70 of the Crime Act 1914 (CTH). As a result, the AFP will be taking no further action in relation to the matter.

https://www.themonthly.com.au/today/sean-kelly/2016/04/2016/1475559898/it-ends-whimper

The trouble with blueberries....

An Coffs Harbour man and a Canadian multimillionaire decide to farm water-hungry blueberries in the Clarence Valley.

The Daily Examiner, 3 October 2016, p.12:

VOICES FOR THE EARTH

Media reports in August of a proposed 850 hectare blueberry development at Bawdens Bridge raise serious issues that add to growing community concerns about the industry.

The application to Water NSW to extract 66ML of water annually from the Orara River indicated the proposed orchard size would be just 30 hectares.

In a meeting with concerned neighbours, the proponent scoffed at rumours they intended to plant as much as 100ha, explaining there just wasn't enough available water.

That comment is supported by the Department of Primary Industry's Primefacts which states: "Water storage facilities of 2-3 megalitres per hectare are required for blueberry production".

Currently there is only 90ML available to the proponent as a harvestable right (collected run-off in dams), plus the 66ML from the river if the licence is approved. So where will the remaining 2000ML come from, and how will it be stored?

Council's director environment, planning and community, Des Schroder, was quoted in the media, describing the partnership between a Coffs Harbour grower and Vancouver businessman Luigi Aquilini, as providing "a multi- national presence in the region", and seemingly in awe of Mr Aquilini describing him as, "a Rupert Murdoch figure in Canadian business circles".

However, as the former manager of the NSW Department of Land and Water Conservation, Mr Schroder should be well aware that, in a drought year, there would be insufficient water in the Orara River to pump at all, much less irrigate 850ha of blueberries.

Proponents engaged in intensive horticulture can legally clear native vegetation, even supposedly protected vegetation, to build massive harvestable rights dams, and can transform the rural landscape into an industrial complex, covered end to end by netting or plastic, without applying for approval, or any need to consult honestly with neighbours.

So the industry needs to do much more to change that perception, and open and transparent consultation would be a good way to start.

John Edwards

Clarence Valley Conservation Coalition

BACKGROUND

The Land, 19 August 2016:

THE sale of Grafton’s old abattoir to Golden Eagle Berries and its planned conversion to packing and cold store signals a new direction for the Clarence Valley with the business saying it will require 1200 picking jobs by 2018 – as much as the abattoir ever used to employ.

Clarence land previously deemed too poor for agriculture remains very attractive to the industry as blueberry shrubs prefer an acid soil, well draining.

Last year Mr Dosanjh formed a partnership with Vancouver businessman Luigi Aquilini and together they are growing blueberries on 120ha at Clarenza and will develop another 850ha at Waterview Heights.

Mr Dosanjh is both excited and a little frightened of a bright berry future in the valley. There is potential for employment and career paths but high prices are overdue for correction. The new reality will require smart farming.

“Unless we can export blueberries the industry may go the way of bananas,” says Mr Dosanjh.

Fruit fly protocall for markets like Japan remains the greatest obstacle but cold storage at low temperatures will kill fruit fly larvae.

NSW Government Gazette No 21 of 24 March 2016:

WATER ACT 1912

An application under section 10 of the Water Act 1912 for a 150 Megalitre dam & 150mm pump on UNNAMED WATERCOURSE has been received from HARJAP SINGH DOSANJH for irrigation and farming purposes (150 megalitres) on Lot 137 DP 751362 Parish Clarenza County Clarence. (30SL067326)

An application under section 10 of the Water Act 1912 for a 150mm pump on ORARA RIVER has been received from DOSANJH INVESTMENTS PTY LTD for irrigation and farming purposes (66 megalitres) on Lot 262 DP 751383 Parish Rushforth County Clarence. (30SL067327)

Objections to the granting of this licence must be registered in writing to Locked Bag 10, Grafton NSW 2460 within 28 days of this notice. The objection must include your name and address and specify the grounds of objection. Any queries please call (02) 6641 6500.

PETER HACKETT Water Regulation Officer. Department of Primary Industries (DPI) Water

Clarence Environment Centre Newsletter Winter 2016:

There is no gazetted Water Sharing Plan for the Clarence River, with only a Draft Report Card for the Lower Orara River available on the DPI web site, which is now rendered obsolete by the permanent closure of the Nymboida Power Station.

We also learned that the proponent had already begun work on a very large dam on a local creek line known as “Chain of Ponds”, removing some 300m of gully vegetation. Enquiries to Council revealed that, despite the Local Environment Plan clearly indicating the water storages cannot be built on land of that zoning, the proponent can in fact construct a dam big enough to store the property's harvestable rights, without any approval. Those rights, for the 1000 hectare plus property, amount to some 90 megalitres annually.

Because blueberries are highly chemical dependent, there are other matters of concern, particularly the potential for pollution of the Orara River, which runs along the property's boundary. Pollution could impact on threatened species like the endangered Eastern Freshwater Cod, and the unique riparian vegetation community. Dominated by a mix of Black Bean (Castanospermum australe), Silky Oak (Grevillea Robusta) and Satinash (Syzygium floribundum), that community, to the best of our knowledge, only occurs along the lower reaches of the Orara and nowhere else in the world.

Vancouver Sun, 9 September 2013:

a vast family empire that owns the Vancouver Canucks hockey team, development companies, investment and hotel properties, North America’s largest blueberry and cranberry farms, and a lot more. The empire is wrapped up tightly in an extraordinarily complex trust system that Francesco’s father Luigi set up years ago to protect the family assets for his wife Elisa, their three sons Francesco, Roberto and Paolo, and others.

The multinational Aquilini empire outlined here.

Turnbull Government barely keeping its fiscal head above water?

The 2015‑16 Final Budget Outcome document was released on Friday 30 September 2016 by Australian Treasurer Scott Morrison and the Minister for Finance Mathias Cormann. It can be downloaded here.

This is Stephen Koukoulas writing on the subject in The Guardian on 3 October 2016:

The treasurer, Scott Morrison, and the finance minister, Mathias Cormann, "took out the garbage" last Friday afternoon, dumping the final budget outcome for 2015-16 on the Treasury website under the cover of the football grand finals, a long weekend and the start of school holidays around much of the country.

Morrison and Cormann came close to breaching the Charter of Budget Honesty, which requires the release of each budget outcome for the prior financial year by 30 September each year. They made it with a few hours to spare.

They also released it without a press conference or detailed media release, making sure there was miniscule coverage of something that would normally be a key area of economic and fiscal management. This is especially the case with "budget repair", the "return to surplus", "paying off debt" and dealing with the "budget emergency" being the basis that saw the Coalition elected to power in both September 2013 and July 2016.

Looking at the budget outcome document, it is clear why it was released in the shadows of the Friday night without any fanfare.

The 2015-16 budget deficit was $39.6bn or 2.4% of gross domestic product. When the former treasurer Joe Hockey delivered the first budget of the Coalition government in May 2014, the budget deficit for 2015-16 was forecast to be $17.1bn.

Much of the blowout was due to decisions of the Coalition government. Foregoing revenue from the carbon price, gifting $8.8bn to the RBA and ramping up spending on border protection without any offsets were vital.

The Coalition, contrary to all perceptions, has been spending at an alarming rate. In 2012-13, the last full year of the previous Labor government, the ratio of government spending to GDP was 24.1%. In 2014-15, this had risen to 25.6% and, in 2015-16, it rose to 25.7% of GDP. The 1.6% of GDP blowout in spending between 2012-13 and 2015-16 is about $26bn and accounts for more than the blowout in the deficit from the time of the 2014 budget.

The deficit blowout fed into the level of government debt as it had to ramp up its borrowing to cover the ever growing shortfall.

Net government debt rose to $296.4bn at June 2016, up from $153bn in June 2013 just before the Coalition took power. As a share of GDP, net government debt has risen from 10% to 18%, just off the all-time high in the wake of the second world war. When the 2016 Myefo is released before year end, net government debt will be at a 60-year high and rising.

Gross government debt, according to the final budget outcome documents, rose to $420.4bn, or 25.5% of GDP, in June 2016. This is at the highest since 1971-72 when the Vietnam war effort was being funded.

Government debt is growing at a pace that will no doubt be the focus of the credit ratings agencies. Unless there is some miracle in terms of a growth spurt that fuels an unexpected windfall revenue gain to the government, further large budget deficits are likely in the near term, as are further increases in government debt……