State of the Australian economy as it enters 2020

On 16 December 2019 Australian Treasurer and Liberal MP for Kooyong, Josh Frydenberg, put out a glowing media release concerning the health of the national economy which bears little resemblance to data his own department released on that same day.

Treasury on behalf of the Morrison Coalition Government informed Australia that it now has less income than was anticipated just prior to the 2019 federal election and, that economic growth is now slower.

Total receipts have been revised down by about $3.0 billion in 2019-20 and $32.6 billion over the four years to 2022-23.

These falls are due to less money coming into Treasury from individuals taxes, company tax and superannuation tax, as well as less dollars being collected through the tax on goods & services (GST) and lower non-tax income.

Federal government net debt is expected to be $392.3 billion in 2019-20 (19.5 per cent of GDP). Gross debt now stands at over $560.8 billion.

Slower economic growth is explained as due in part to decreased production and lower export levels in the farming sector, a decline in iron ore prices, softer wages growth, diminished business confidence & investment uncertainty.

Gross Domestic Product (GDP) nominal growth is 3.25 per cent but is expected to fall to 2.25 per cent in the coming financial year.

Wages growth is still under performing at 2.5 per cent and, there is no guarantee that the revised projection of 3 per cent wage growth by 2022-23 is achievable.

Unemployment is beginning to rise.

The number of people who had jobs fell by 19,700 individuals between the May federal election and October 2019. Employment numbers are projected to fall over the next 5 years in Agriculture, Forestry & Fishing, Manufacturing and Information, Media & Technology.

Cost of living (CPI) is not coming down. CPI rose 1.7 per cent through the year to the September 2019 quarter. This followed a through the year rise of 1.6 per cent to the June 2019 quarter. Retail prices, particularly for clothing, footwear, meat, dairy, bread and cereal products, have risen.

As for the much lauded budget surplus for 2019-20, it has shrunk from $7.1 billion to $5 billion. While the rubbery figures in forward estimates see the expected surplus for 2020-2021 reduced from $11 billion to $6.1 billion, then from $17.8 billion down to $8.2 billion in 2021-22, with the fiscal year after that supposed to bring in a surplus of only $4 billion instead of the projected $9.2 billion.

One can almost hear Morrison ordering a funding red pen through even more health, disability and welfare services/programs in a vain attempt to avoid intensifying the economic squeeze his flawed political ideology is imposing on the nation.

Notes:

* Australian Treasurer Josh Frydenberg 16 December 2019 media release at 

http://ministers.treasury.gov.au/ministers/josh-frydenberg-2018/media-releases/2019-20-mid-year-economic-and-fiscal-outlook

* Mid-Year Economic and Fiscal Outlook (MYEFO) December 2019 at https://budget.gov.au/2019-20/content/myefo/download/MYEFO_2019-20.pdf

* Pre-Election Economic and Fiscal Outlook (PEFO) April 2019 at https://treasury.gov.au/publication/2019-pefo

* Australian Office of Financial Management (AOFM) federal government debt updates at https://www.aofm.gov.au/

* Cost of Living data at https://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/6401.0Media%20Release1Sep%202019?opendocument&tabname=Summary&prodno=6401.0&issue=Sep%202019&num=&view=

* Labour Market Information Portal, “Industry Projections – 5 years to 2024” (Excel) at http://lmip.gov.au/PortalFile.axd?FieldID=2787734&.xlsx

Yet another indicator that tax minimisation is out of control in Australia

The Australian Taxation Office (ATO) as part of its transparency commitments released the latest corporate tax transparency report on 12 December 2019 covering 2,214 of the highest income companies trading in Australia in 2017-18.

These 2,214 companies reported annual incomes ranging from $66.87 billion down to $100.01 million.

Contained in the total number of companies were,1,791 with annual incomes over $100 million. Amongst this group were 1,197 foreign-owned entities.

The 32 per cent companies with tax payable in 2017-18 had tax liabilities ranging from $4.3 billion on an income of $42.37 billion down to $1,600 on an income of $125.36 million.

Additionally, 710 companies on the ATO list did not pay any tax that financial year.

ABC News, 12 December 2019:

The reasons why 710 companies did not pay any tax in 2017-18 included:

• 269 entities that reported a taxable income but prior-year losses were available to deduct against that profit, so no tax was payable
• 242 entities reported an accounting loss
• 146 entities reported an accounting profit but reconciliation items (such as tax deductions allowed at higher rates than accounting permits) resulted in a tax loss
• 53 entities reported a taxable income but were also entitled to offsets (such as the research and development tax incentive) at least equal to the tax otherwise payable

THE TOP 20 NON-TAXPAYING COMPANIES IN 2017-18 (going from highest annual income of $10.51 billion to lowest annual income of $3.03 billion) are:

TOYOTA MOTOR CORPORATION AUSTRALIA LTD, EXXONMOBIL AUSTRALIA PTY LTD, FLORA GREEN PTY LTD, VIRGIN AUSTRALIA HOLDINGS LIMITED, TOLL HOLDINGS LIMITED, AUSTRALIA PACIFIC LNG PTY LTD, CHEVRON AUSTRALIA HOLDINGS PTY LTD, AMCOR LIMITED, PEABODY AUSTRALIA HOLDCO PTY LTD, HOPE DOWNS MARKETING COMPANY PTY LTD, QGC UPSTREAM HOLDINGS PTY LIMITED, FERROVIAL SERVICES AUSTRALIA PTY LTD, GRAINCORP LIMITED, SANTOS LIMITED, VODAFONE HUTCHISON AUSTRALIA PTY LTD, BBP AUSTRALIA HOLDINGS PTY LTD, CBH GRAIN PTY LTD, ROY HILL HOLDINGS PTY LTD, PIONEER SAIL HOLDINGS PTY LTD, IBM A/NZ HOLDINGS PTY LIMITED.

* Image from.zippia.com 

In which certain Clarence Valley elected councillors and senior council management try to pretend that a resolution at a NSW LGA conference has the force of law......

Given that local government is potentially the most corruptible of all three tiers of government in Australia, it comes as no surprise that transparency is still resisted though it is very disappointing to see Clarence Valley Council searching about for an excuse not to do the right thing.

One of the risible objections to having Disclosures of Interest published online was that it would be difficult to redact staff signatures & residential addresses and, is "considered a waste of valuable staff resourcing" [Item 6c.19.090, CVC Ordinary Monthly Meeting, Minutes, 29 November 2019].

Another was a suggestion that councillors and staff may be at physical risk if declarations were published online, even though these declartions are already available for inspection at council offices and have been for some years.

Clarence Valley Independent, 11 December 2019:

Councillor Karen Toms has lodged a rescission motion to try and overturn a decision, made at the November Clarence Valley Council (CVC) meeting, which raised the ire of the NSW Information and Privacy Commission (IPC).

Councillors Lysaught, Ellem, Kingsley, Baker, Williamson and Simmons voted against uploading councillors’ and senior staff’s declarations of interest to the CVC website. 

Following the decision, which was contrary to a guideline developed under the Government Information (Public Access) Act issued in September, Information Commissioner Elizabeth Tydd released a statement. 

She said three local councils – Gosford City, Mid-North Coast and Clarence Valley – had “publicly stated their intention to adopt practices that appear to offend the requirements of the GIPA Act and Guideline 1”. 

“The resolutions by councils, as they seek to deviate from clear requirements under the GIPA Act, [to] justify non-compliance for privacy reasons will be something I consider carefully,” she said. 

“It is important to stress that the guideline was developed in consultation with the NSW Privacy Commissioner.” 

She said the interests required to be declared by councillors and senior decision makers include business and pecuniary interests. 

She said declaring these interests is “a demonstrably effective tool in preventing corruption and promoting integrity. “These are strong factors in favour of disclosure, particularly in the local government sector where decisions impact the everyday lives of people,” she said. 

“Those factors must be balanced against factors against disclosure, including privacy. “However, declarations of business interests will not necessarily disclose any information impacting personal privacy.” 

At the November CVC meeting, general manager Ashley Lindsay said: “…on behalf of staff and designated persons … I think it is unfair for them to have their information on the website.” 

Councillor Greg Clancy suggested that any “sensitive information could be redacted”. “What’s the problem with having [the disclosures] on the website?” he said. 

Mr Lindsay advised councillors that the recent Local Government NSW conference had resolved to support a motion by Mid-Coast Council, which “strongly objects to the [disclosures] … being published on any website”. “…We should support the Local Government NSW motion,” 

Mr Lindsay said when answering a question from Cr Toms. “If unsuccessful, we can come back and change [CVC’s decision] and comply,” he said. Referring to the IPC guideline during debate on the matter, mayor Jim Simmons said it “may not be legislation” and that he thinks “there is some doubt … so I intend to vote for” not uploading the disclosures. 

However, he said “if it becomes clear to me in the next day or two [that it is legislation] I’ll support a rescission motion”.

BACKGROUND

Information Access Guideline 1 - For Local Councils on the disclosure of information (returns disclosing the interest of councillors and designated persons) at https://www.ipc.nsw.gov.au/information-access-guideline-1.

https://www.lgnsw.org.au/files/imce-uploads/581/2019_Record_of_Decisions_-_FINAL.pdf

Just in time for Christmas the Morrison Government's risible greenhouse gas emission projections up to 2030 have been released

Well the federal parliament closed its doors for the year in early December so there is going to be no questioning of the Morrison Government on the floor of the House of Representatives until 4 February 2020.

It follows that it was time to release some of the government untruths packaged between paper covers or boxed in a PDF - just in time for Christmas.

On the first Tuesday of December the Morrison Government released
Australia’s emissions projections 2019, accompanied by a misleading fanfare from the Minister for Energy and Emissions Reduction & Liberal MP for Hume, Angus Taylor.

In part this emissions fairytale tells us that:

Australia’s 2030 target (26–28 per cent below 2005 levels) 

• Emissions in 2030 are projected to be 511 Mt CO2 -e, 52 Mt CO2 -e lower than the 2018 estimate for 2030 of 563 Mt CO2 -e. 

• To achieve Australia’s 2030 target of 26 to 28 per cent below 2005 levels, emissions reductions of 395 to 462 Mt CO2 -e between 2021 and 2030 are required. When overachievement of 411 Mt CO2 -e from previous targets is included, Australia will overachieve by 16 Mt CO2 -e (26 per cent reduction) and will require 51 Mt CO2 -e of cumulative emissions reduction between 2021 and 2030 to meet the 28 per cent reduction target. 

• Compared to the 2018 projections, the downward revision in the 2019 projections reflects: 

– the inclusion of the Climate Solutions Fund which will reduce emissions by 103 Mt CO2 -e, particularly in the Land Use Land Use Change and Forestry (LULUCF) sector;

 – the inclusion of other measures in the Climate Solutions Package including energy efficiency measures in the electricity and direct combustion sectors; 

– stronger renewables deployment – due to increased uptake of small and mid-scale solar photovoltaics (PV) projected by the Clean Energy Regulator (CER) and Australian Energy Market Operator (AEMO), and the inclusion of 50 per cent renewable energy targets in Victoria, Queensland and the Northern Territory; and 

– updated forecasts of electricity demand.

Sounds good until you look at the numbers.

In the original Kyoto Agreement Australia's baseline for accounting greenhouse gas emissions was 1990 and total national greenhouse gas emissions for that year were recorded as 610MT CO2-e.

Australia came away unhappy with the conference outcome, so bitched and griped at every turn until the baseline was moved, eventually being extended out to 2005.

In 2005 Australia's total greenhouse gas emissions were 611MT CO2-e if land use is included. The total changes to 522MT CO2-e if land use is excluded. 

The predictions for 2030 in the recent emissions projections are 511MT CO2-e land use included and 521MT CO2-e land use excluded.

There is a 100 point drop in the 2030 projection including land use and a 1 point drop with land use excluded.

It's  still a reduction right? Even if the Morrison Government got there by using an accounting trick?

Well no. Because - even with the carryover 'carbon credits' accounting trick which allows the the Morrison Government to subtract a total of 411MT CO-e from greenhouse gas emissions across selected annual totals - Australia is not meeting the undertakings made to the international community at the U.N. 2015 Paris climate change conference (COP 21).

In fact we have spent the six years between 2013 (when emissions total was 530MT CO2-e) and 2019 (when emissions total was 532MT CO2-e) just treading water, while the days and nights became hotter, our rivers ran dry and our forests burned. 

Next year emissions are expected to rise again to what they were in 2014, 534MT CO2-e.

In Paris Australia agreed to reduce national greenhouse gas emissions by 26-28 per cent by 2030.

That would mean that Australia's emissions target in 2030 should be somewhere between 440MT CO2-e and 450MT CO2-e.

There is a shortfall in meeting those targets.

With land use included the target shortfall in projections is between est. 59MT CO2-e and 71MT CO2-e. With land use excluded the shortfall is between est. 69MT CO2-e and 81MT CO2-e.

That is a lot of mega tonnes. Especially if we were to correct the Morrison Govenment's creative accounting and remove this carryover credits from the equation.

Then the 2030 emissions reduction target shortfall would probably grow by arround est. 80-84 per cent.

Angus Taylor attended the 2-13 December 2019 UN Madrid Climate Change Conference (COP25) armed with his copy of that creative government accounting - probably believing that representatives of other nations would find his spiel believable. Though I rather suspect whenever he was at the other end of the room a number would have had their heads together quietly laughing at him. 

Notes:

Emissions are recorded as totalling 532MT CO2-e In 2018 and 2019. However using Morrison & Co's accounting trick it is reduced to a total of 328MT CO2-e in 2018 and -6MT CO2-e in 2019. See http://www.environment.gov.au/system/files/resources/4aa038fc-b9ee-4694-99d0-c5346afb5bfb/files/aust-emissions-projects-chart-data-2019.xlsx.

All data the Australia's emissions projections 2019 relies on can be found at -
http://www.environment.gov.au/climate-change/publications/emissions-projections-2019.

If readers want emissions totals & projections per year from 1990 to 2030 in a more digestible form, there is currently an interactive graph at -
https://www.theguardian.com/business/grogonomics/2019/dec/10/the-coalition-isnt-being-honest-about-the-climate-crisis-but-neither-is-labor.

There is no stepping back from the fact that Australia is a significant factor in spreading the cancer of greenhouse gas pollution across the Earth's atmosphere

Australia's annual greenhouse gas emissions for the year to December 2015 were est. 529.2 Mt CO-e and annual greenhouse gas emissions for the year to December 2017 were estimated to be 533.7 Mt CO2-e.

By the year to June 2019 (and with 6 months of the year yet to go) greenhouse gas emissions were estimated to be 532.0 Mt CO2-e.

Now the Abbott-Turnbull-Morrison Government has always been fond of implying that figures such as these do not matter - saying that Australia is only a minor contributor to global emissions at est. 1.3% of the combined world total.

However, there is no stepping back from the fact that Australia is a significant factor in spreading the cancer of greenhouse gas pollution across the Earth's atmosphere.

In part because successive Australian federal and state government have encouraged investment in the mining of our natural resources.

Just 100 of all the hundreds of thousands of companies in the world have been responsible for 70.6% of all global greenhouse gas emissions that caused global warming in the 27 year period between 1988 and 2015, according to The Carbon Majors Database, a report published by the Carbon Disclosure Project (CDP) in 2017.

These 100 fossil fuel industry companies can be broken down into the following categories:

41 publicly listed investor-owned;

16 privately held investor-owned;

36 state-owned; and

7 state producers.

The top 50 of these companies are:

China Coal Group

Saudi Arabian Oil Company (Aramco)

National Iranian Oil Co

ExxonMobil Corp operating in Australia since 1895

Coal India Limited planning to acquire assets in Australia

Petroleos Mexicanos (Pemex)

Russia Coal Co

Royal Dutch Shell PLC operating in Australia

China National Petroleum Corp (CNPC) operating in Australia

BP PLC operating in Australia

Chevron Corp operating in Australia

Petroleos de Venezuela SA (PDVSA)

Abu Dhabi National Oil Co

Poland Coal

Peabody Energy Corp operating in Australia

Sonatrach SPA

Kuwait Petroleum Corp

Total SA operating in Australia

BHP Billiton Ltd operating in Australia

ConocoPhillips operating in Australia

Petroleo Brasileiro SA (Petrobras)

Lukoil OAO operating in Australia

Rio Tinto operating in Australia

Nigerian National Petroleum Corp

Petroliam Nasional Berhad (Petronas)

Rosneft OAO

Arch Coal Inc operating in Australia

Iraq National Oil Co

Eni SPA operating in Australia

Anglo American operating in Australia

Surgutneftegas

Alpha Natural Resources Inc operated in Australia

Qatar Petroleum Corp

Pertamina

Kazakhstan Coal

Statoil ASA operating in Australia

National Oil Corporation of Libya

Consol Energy Inc operating in Australia

Ukraine Coal

Oil & Natural Gas Corp Ltd operating in Australia

Glencore PLC operating in Australia

TurkmenGaz

Sasol Ltd operating in Australia

Repsol SA operating in Australia

Anadarko Petroleum Corp

Egyptian General Petroleum Corp

Petroleum Development Oman

Czech Republic Coa.

Between them these 50 companies were responsible for est. 63.2% of the cumulative global greenhouse gas emissions between1988 and 2015 according to the CDP report.

The report also recorded global emissions for the year 2015 in which the following companies were listed as contributing significantly to global greenhouse gas emissions:

Shenhua Group Corp Ltd (2% global CO2-e) operating in Australia

Shandong Energy Group Co Ltd (0.7% global CO2-e) operating in Australia. 

In the face of the increasing negative impacts from climate change, Australia allows 22 of the world's top polluters to conduct business in Australia without even a pretence of limiting their greenhouse gas emissions. 

Australian Election Study survey conducted after 2019 federal election found Scott Morrison is most popular leader since 2007 - but not as popular as Kevin Rudd in his heigh day

The Australian Election Study (AES) has surveyed voters since 1987. With the exception of 1987 and 2007 the survey has been funded by the Australian Research Council and its predecessors.

AES surveyed a nationally representative sample of 2,179 voters after the 2019 Australian federal election to find out what shaped their choices in the election.

The respondents were composed of two groups - those who originally took part in the 2016 Australian Election Study and those who were newly surveyed for the 2019 study.

apo.og.au, Australian Election Study, 6 December 2019, Sarah Cameron, Ian McAllister, 2019 Australian federal election: results from the Australian Election Study, Description, excerpt: 

Highlights: 

Policy issues 

• A majority of voters (66%) cast their ballots based on policy issues. 

• The most important issues in the election identified by voters include management of the economy (24%), health (22%) and environmental issues (21%). 

• Voters preferred the Coalition’s policies on management of the economy, taxation, and immigration. 

• Voters preferred Labor’s policies on education, health, and the environment. 

Leaders

• Scott Morrison is the most popular political leader since Kevin Rudd in 2007, scoring 5.1 on a zero to 10 popularity scale. [Note: In 2007 AES recorded Kevin Rudd as 6.3 on a zero to 10 popularity scale**]

• Bill Shorten is the least popular leader of a major political party since 1990. 

• A majority of voters (74%) disapproved of the way the Liberal Party handled the leadership change in 2018, when Scott Morrison replaced Malcolm Turnbull. 

Political trust 

• Satisfaction with democracy is at its lowest level (59%) since the constitutional crisis of the 1970s. 

• Trust in government has reached its lowest level on record, with just 25% believing people in government can be trusted. 

• 56% of Australians believe that the government is run for ‘a few big interests’, while just 12% believe the government is run for ‘all the people’.  [my additional notation]

According to AES in 2007 eighty-six per cent of Australians were satisfied with the way democracy was working. However since then democratic satisfaction has fallen by twenty-seven per cent and “there has been a pattern of declining citizen trust in the political system. Trust has not declined significantly since the 2016 election, but nor has it recovered from record low levels”. 

That 2019 record low trust level represented a twenty percent decline after 2007.

In the Abbott-Turnbull-Morrison years the perception that people in government look after themselves rose from 66% in 2013 to 74% in 2016 and 75% in 2019.

After the 2019 federal election only 1 in 4 Australians believe that people in government can be trusted to do the right thing.

The complete study can be read and downloaded here.

** other leaders besides Kevin Rudd who have gone to an election with an AES popularity score higher than that of Scott Morrison were; Bob Hawke (1987 & 1990), Kim Beazley (1988 & 2001), John Howard (1993,1996, 1998, 2001, 2004) and John Hewson (1993).

A quote that resonates down the years to Australia in 2019

"What is courage? We know it by instinct. We see it. We feel it.
Courage is a firefighter standing before the gates of hell unflinching, unyielding with eyes of steel saying, “Here I stand, I can do no other. 
Courage is neighbour saving neighbour. 
Courage is stranger saving stranger."
[Then Australian Prime Minister Kevin Rudd, National Day of Mourning speech, February 2009]