Politics with Michelle Grattan

Despite the government still considering his proposal for a clean energy target (CET) – after endorsing his other 49 recommendations – Chief Scientist Alan Finkel is optimistic the CET remains firmly on the agenda. Finkel’s challenging task has been to put forward a scheme to bring Australia’s energy market into the future, providing certainty for investment and supply. His plan has required a balance between appeasing consumers on prices and meeting Australia’s commitments on climate change. This is made harder by the desire of many in the government to push on with developing new “clean-coal-fired” power stations, a term Finkel describes as “a murky concept”. “There is no prohibitions in any of our recommendations. The government has to decide whether to license new technologies,” he says. Asked about the concept of “reverse auctions” – better called competitive tenders – he says this is “widely recognised to be the most cost-effective means of bringing the lowest cost solution into the market”. But that’s dependent on the wisdom of the entity running the auction rather than the wisdom of investors. Overall, Finkel acknowledges there’s a hard road ahead for policymaking on energy. “Transitions are always painful,” he says.

NSW Premier Gladys Berejikilian is alert to the challenge of operating in today’s difficult electorate. “The digital age has brought a sense of empowerment. It’s brought a sense of greater appreciation of democracy and the political process and we need to not only respond to it but adapt to that and make sure that we are listening during our term in office, not just at election time.” With her government having just handed down a budget with an enviable surplus, she says the federal government’s Gonski legislation will leave NSW better off “in terms of dollars”. But she is very concerned about what she sees as an urgent need to review the numerous and “clumsy” federal-state partnerships. She’d prefer a more fundamental overhaul but that’s not on the horizon. “I don’t want piecemeal reform - I would prefer to have wholesale reform but I can’t see that happening in the near future and for that reason I think as a state leader I have to deliver as much as I can under the existing circumstances”.

Malcolm Turnbull declared on Wednesday he'd "provided decisive leadership on energy". It is a claim perhaps better cast in the future tense. The debate over the Finkel panel's recommendation for a clean energy target (CET) is just beginning, and already it is clear that reaching an outcome that brings the certainty the business community needs to invest will be a hard slog for Turnbull, who will be undermined by critics on his own side. In this podcast we talk Finkel with Energy Minister Josh Frydenberg, Nationals backbencher George Christensen, and opposition climate spokesman Mark Butler. Frydenberg, charged with the detailed heavy-lifting, tells Michelle Grattan: "We have to work together as a team to land this difficult policy area." Christensen proudly wears the agrarian socialist title as he advocates for radical changes to the regulation of Australian energy prices. "Being bold is the answer and market intervention has to happen." He's sceptical of a CET without seeing the modelling and data. Butler believes a CET is workable but it has to be consistent with principles, which means such a scheme shouldn't incorporate so-called "clean" coal. "The discussion of the Finkel report shouldn't include concessions for the hard-right-wing," he says.

Events in Britain, the New South Wales coroner’s report on the Lindt Cafe siege, and a new attack in Australia have given a much sharper edge to the debate about how to handle Islamist terrorism. Amid the hype, ANU security expert John Blaxland provides a reality check. He says while there’s an escalation of and change in the nature of terrorist attacks, collaboration between Australian police and intelligence services is world class. On the Lindt Cafe siege, Blaxland says that although in hindsight the police could have done things differently, it’s “preposterous” to insist the special forces were required to resolve it. “We actually need to be very circumspect about over-committing our military.” He’s sceptical of the push for a homeland security department, saying a “refined set of arrangements” is in place for interdepartmental co-operation. On the question of the local Muslim population, he says most don’t subscribe to a fundamentalist, expansionist Islam – violent jihadists are outliers. “They’re people that have been on the edge, if not mentally then certainly socially.” Speaking about this week’s revelations of Chinese influence in Australia, Blaxland says the scale is enormous and unprecedented. “We have had an ongoing growing tension emerge between our security and strategic consciousnesses and our economic consciousness.”

The Coalition has backed the Adani Carmichael coal mine but there’s debate about assistance for the project, and argument about the jobs it would create in the region. Matt Canavan argues there’s a role for the government to invest in large scale infrastructure. He tells The Conversation this mine is only one part of a plan for “opening up the Galilee Basin” to provide investment opportunities, exports, and employment. “This coal is not for Australia, it’s for our region.” On last week’s Uluru statement calling for an Indigenous body to be enshrined in the constitution Canavan says he’s concerned about creating another organisation, especially if it were to be based on different racial definitions. He says options should be explored for greater recognition of Indigenous people in the political process without “necessarily making changes to the constitution”. On the coming Queensland election - with polling close - he says either side’s for the taking. “The Queensland Labor government has had a pretty rough time in the last week but I pick up a lot of frustration in North Quensland and I think they’ve got a lot of work to pick up trust.”

Dennis Richardson, one of Australia’s most respected federal public servants, has just retired after an illustrious career. He served as head of the foreign affairs department, the defence department, and ASIO, and was Australian ambassador in Washington. He was also once chief-of-staff to then-prime minister Bob Hawke. Richardson was never afraid to tell ministers what he believed they should hear, and any grudges they had as a result they apparently got over very quickly. He urges bureaucrats to be forthright with their political bosses, but also to be strategic in how they go about trying to persuade. “Providing frank and fearless advice is not about getting something off your chest, it’s about seeking to influence for an outcome that you think is the right one.” In this interview with The Conversation he reflects on trends in the public service, and discusses the implications of the Trump presidency and the future of China. He also recalls as a very young public servant being sent to play squash with Billy McMahon – and beating him. Not long after, he handed out how-to-vote cards for Labor in the “It’s Time” election.

Labor has come under fire for some of its budget responses, including its opposition to the schools package, and only partial support for the Medicare levy increase. Shadow treasurer Chris Bowen rejects the government’s argument about the schools plan being more “needs based” than present arrangements, telling The Conversation its “one-size fits all” approach will put pressure on families and the public system. “Being needs-based is a bit like being pregnant, isn’t it? You either are or you aren’t.” Bowen defends targeting the Medicare levy rise only at higher income earners by saying Australia’s low wage growth and other factors mean the circumstances are different from when Julia Gillard raised the levy across the board. Small and medium-sized businesses – with a turnover up to $50 million - are waiting to find out whether a Labor government would cancel their legislated tax cut. Labor is “taking a bit of time” before announcing its position, Bowen says, to look at “all the implications.” He’s commissioned work from the Parliamentary Budget Office. “There’s all sorts of stuff on the public record that I carefully sift through so that when I make a recommendation to shadow cabinet it’ll be a good one and a firm one and enable a good discussion.” On the controversial Adani Carmichael coal mine, which is dividing Queensland Labor and is publicly opposed by several federal ALP MPs, Bowen stresses the project’s future must rest squarely on its own merits, without government subsidy. “If it stacks up, it stacks up.”

The shadow assistant minister for schools, Andrew Giles, says the strong opposition from Catholic schools to the government’s education package is because they were given “almost no notice” of the funding changes. “What’s different in the Catholic system from the independent sector is the practice of making systemic decisions. And that’s something that has been fundamentally ignored by the minister in the manner in which this has been outlined.” Giles says that “people will be waiting a long time … a lifetime” to see tangible resourcing outcomes from the government’s package. As to other measures to tackle inequality in Australia, he says: “if we’re serious about tackling inequality we need to think really hard about taxes”. A member of Labor’s left faction, Giles is an advocate of a Buffett rule, a proposal that would see high-income earners paying a mandated minimum rate of tax. However, this remains a side debate within the party at this stage. Shadow Treasurer Chris Bowen has ruled out the idea for a Labor government, and says it wouldn’t be pushed at the ALP conference next year. As Giles says: “The challenge for those in the more radical wing is to get the balance right between discipline and dissent.”

This week, the government made big announcements about the future funding of schools and universities. Haunted by the unpopular 2014 budget, it is treading more carefully with its new education policies. Education Minister Simon Birmingham says one of the challenges of the 2014 budget was that there were “a lot of different pieces of policy reform all announced simultaneously”. Birmingham - who took on the education portfolio after Christopher Pyne - is at pains to emphasise the government’s preparation this time around. “We’ve gone through, in university reform, a very methodical process - putting out a discussion paper before the last election that aired, if you like, all of the different options and scenarios very openly,” Birmingham says. “In terms of schools funding - I’ve met with David Gonski, members of his panel, I’ve had numerous discussions with state and territory ministers, with independent and non-government Catholic school representatives.”

Professor John Hewson, a former Liberal leader and chair in the Tax and Transfer Policy Institute at the Australian National University, describes the uncertain economic climate into which Treasurer Scott Morrison will deliver next week's budget. "I think it's an occupational hazard for treasurers that they're always optimistic - always try to put a better gloss than is the case," Hewson says. "I've been analysing and forecasting economies since the late '60s and I picked up most of the big turning points over that period, but I'd have to say that right now I think it's harder than it's ever been to say what might happen next." Hewson nominates the after-effects of the global financial crisis, geo-political tensions and environmental challenges as some of the factors driving his doubt. There is also the matter of Donald Trump. "He's quite unpredictable and his capacity to govern in the United States is really quite limited. Although he might have been a reasonably succesful property developer, it's not easy to run a government off that skill set in Washington and he's finding the reality of that." ___ _This podcast is co-published with the University of Canberra's [Institute for Governance and Policy Analysis](http://www.ausbudget.org/)_

Jane Halton, a former finance department secretary and an adjunct professor, appeared at cabinet’s expenditure review committee over nearly 30 years. Halton describes the inner workings of the federal budget in what’s known as “the razor gang”. The razor gang, comprised of the treasurer, the finance minister and then a couple of senior ministers, scrutinises the government’s spending and savings in the budget process, Halton says. “They would scrutinise – and sometimes it’s seen as interrogate – the ministers who bring forward proposals, things that they would like to do. And they will either agree with them or ask for more information or say ‘no, we’re not doing that’. And they do exactly the same with savings proposals as well.” In the process, if a minister wants to bring a spending measure forward, they also have to propose a savings measure. Whether or not it gets through depends a little bit on personality and a bit on the circumstances, Halton says. As to the upcoming federal budget, Halton says things are a “little tight”. “We know there’s very little wages growth and there will however I expect, be slightly more revenue than they were expecting.” This podcast is co-published with the University of Canberra’s Institute for Governance and Policy Analysis

As North Korea continues to antagonise the US and its allies, the prospect of war hangs in the air. But Peter Jennings, executive director of the Australian Strategic Policy Institute, says he doesn’t think we’ll see armed conflict with North Korea any time this year. “I think the US has now resolved that it’s going to exhaust all diplomatic options first before it thinks about pre-emptively striking at the North’s missiles and nuclear facilities. "And really what that means is – one more try to see if the Chinese are prepared to apply the type of sanctions that would hurt North Korea sufficiently,” Jennings says. Weighing up North Korea’s nuclear capabilities, Jennings says that up until about 18 months ago, their nuclear program was “going nowhere fast”. “But in the last 18 months, what we’ve seen is a significant acceleration of the North’s nuclear testing.” “The different calculation the Americans have to factor in is that the North is getting close, and it now sees itself within a decent sprint of being able to weaponise a missile that could hit Los Angeles.” With Malcolm Turnbull’s New York meeting with US President Donald Trump now confirmed for next week, Jennings has some words of counsel for the prime minister. “My first piece of advice to the PM would be to say ‘you’ve got nothing to be embarrassed about. We’re actually an ally in good standing’. The next piece of advice would be to say ‘but don’t wait for president Trump to come to you with a list of things he’d like Australia to do’. "I think we’d always be in a much better situation if we could go to the Americans and say ‘now here are the things we want to do that will strengthen our alliance’.”

This week, the government announced it would abolish the 457 visa and replace it with a new temporary skill shortage visa program. The change has met a mixed response from businesses. Jenny Lambert, director of employment, education and training at the Australian Chamber of Commerce and Industry, says the key issue for the business community is to “try and reset the button on confidence in the temporary skilled migration system”. “We really have accepted that we have to get rid of the 457 visa and put in place arrangements that the community can be more confident in. That said, we’ve got some issues about the detail and we’re willing and wanting to work with the government on that,” Lambert says. Lambert maintains that rorting was never a big part of the 457 visa program. “When you look at the bigger picture of use of the 457 over the last few years, the predominant users are state governments in their health portfolios, universities and academia bringing in specialist researchers and scientists … and also highly skilled CEOs and managers of multinational corporations. So 75% of the use of 457 over the last five years has been in that high-skilled end. So when we talk about rorting, we’ve always seen it as more at the margins, at the lower-skilled end of the program.”