Extract from ABC News
Analysis.
Late last month it was revealed that the Albanese government had signed a contract worth almost $422 million over three years to run Australia's offshore detention centre in Nauru.
The Guardian, which reported the story, noted there were between 65 and 70 people immured on Nauru — compared to a peak of 1,200 people who were once confined there. Those still there "live in the Nauru community, but cannot leave the island".
"The Australian-controlled detention centre is empty but on stand-by for future arrivals," The Guardian said.
So taxpayers are paying $420 million for an empty facility.
This week it emerged someone had allowed Nauru's designation as a regional processing country (which has all sorts of legal implications) to lapse in October, prompting a rushed move when parliament returned to address the lapse.
In justifying extending the designation for ten years, Home Affairs Minister Clare O'Neil told parliament that: "At the last election, our prime minister spoke of the need to be strong on borders without being weak on humanity."
"Regional processing is about both.
"I appreciate that there are people in this place who think very differently about this issue, but I would point out that regional processing has been settled policy on both sides of politics for over a decade."
The crux of the issue
And here is the crux of the issue: offshore detention (ie. "regional processing") is "settled policy on both sides of politics". Neither side of politics will deviate from the policy formulation of boat turnbacks and offshore detention.
Unfortunately for the status quo, this is not "settled policy" on the parliamentary cross benches — the disrupters on a whole range of "settled policy" in recent months, from a net zero emissions to a national anti-corruption commission.
It's not that the crossbench wants to immediately rip up the policy. But its members question whether offshore detention is really a deterrent — citing research that shows it is really boat turnbacks that deter asylum seekers coming here by boat.
More significantly they point out that regional processing is supposed to happen quickly; that people should be assessed within months, not left to rot on Nauru for years.
By happenstance, the very day parliament was dealing with Nauru's status, there was a once inconceivable visit to the building by Kurdish-Iranian refugee and journalist Behrouz Boochani, who in 2019 was accepted as a refugee by New Zealand after enduring the horrors of Manus Island for years.
The two events have refocused attention on the question of asylum seeker policy at a time when it would be fair to say that it is "settled policy" on the government benches that they would rather not talk about it.
The government must reframe the question
The Albanese government has quite a lot on its plate, what with a tricky but important referendum to shepherd through the year, a faltering economy, a housing affordability crisis, climate change and budgetary problems, just to name a few.
But there's an element of political PTSD in the constraints Labor feels in talking about issues from asylum seekers, to climate change, to tax — all issues on which it had been sliced and diced over the years by the Coalition. But equally all issues it will have to confront — if only rhetorically — sooner or later.
Politics can so often be determined not by what you do but by your capacity to reframe the question. Consider John Howard and the GST as a classic example. But also how Paul Keating pivoted spectacularly into "fiscal stimulus guy" in 1991 and 1992 in the depths of a recession and as he remade himself for his leadership foray against Bob Hawke.
It turns out that not only can politicians survive such turnarounds, but they can actually prosper. Policy dexterity is applauded and rewarded by voters who are prepared to be convinced that policy should be able to change with the times.
Labor used to have an equally traumatic relationship with interest rates. In the Keating days, the government set interest rates. Record high interest rates savaged the economy in a way that many have never forgotten.
One of the changes that occurred as a result was that the Reserve Bank stepped out of the shadows to make its own statements about what it was doing, an arrangement subsequently formalised in a charter of independence for the bank.
From a time when it said literally nothing public about what it was doing, the RBA — mostly through its governors — became a regular contributor to the public debate.
By the time COVID was looming in Australia, the RBA's senior executives were giving up to 50 public presentations a year. Transparency is the obvious first argument as to why the bank should be out in public.
But as the conduct of monetary policy has developed over the past couple of decades, central banks globally discovered the benefits of "jawboning": using pronouncements to help set expectations on both interest rates and the broader economic outlook.
This sometimes meant central banks didn't have to act to move interest rates as they might otherwise.
Public utterances from the RBA are not helpful
In Australia, given the very long periods since 1990 when monetary policy has carried a disproportionate load in setting economic conditions — because of political obsessions with "debt and deficits" or equally political caution with using tax and spending policies to affect economic activity — the Reserve Bank has been centre stage, often when it should not have had to be there.
The most effective task for a central bank is fighting inflation. And for the first time in a very long time, we have faced inflationary shocks.
Unfortunately, the public utterances of current Reserve Bank governor Philip Lowe, in trying to boost confidence during COVID by saying interest rates were not going to rise for a couple of years, has caused all sorts of grief to individuals, and for that matter, to Lowe's credibility.
His utterances this week have also not helped. In announcing another (expected) rate rise, he set about changing expectations about where interest rates were heading next. That is, they had a long way to go up, before they would come down.
Given the immense pressure already on households from rate rises to date, and the admission from Lowe that the effects of rate rises to date are still to flow through, it is perhaps not surprising that we started to see the torches and pitchforks come out for the governor among our politicians this week.
Australia's inflation story has turned a chapterHe will face their ire when he appears at a Senate economics committee meeting on Thursday.
Central amongst the questions should be why he felt he had to apply a sledgehammer to expectations when the RBA's own statement of monetary policy on Friday noted repeatedly that inflation seems to be peaking around the world and that inflationary expectations, and wages, are not ratcheting up spectacularly.
The biggest inflationary pressures now stem from a serious crisis in affordable housing — something not in the bank's direct capacity to fix — and from international forces. Ditto.
Overlooked in much of the commentary about the RBA's latest moves, however, are other crucial forecasts: that unemployment will rise from 3.5 per cent to 4.5 per cent by mid-2025 and that the economy is slowing.
These indicators, if nothing else, suggest it is time to change the "settled" anti-inflationary tune.
Laura Tingle is 7.30's chief political correspondent.
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