Picking Retirees' Pockets

Daily Telegraph 12 December 2018

After a decade of deficits, Australia is set to return to a budget surplus next year under the Coalition. 

Yet the Labor Party is promising to introduce a swag of new taxes – on shares, housing and trusts. 

If elected, Labor will deploy a new tax on the shares held by 310,000 New South Wales retirees.

The new retiree tax would ban tax refunds to self-funded retirees where companies in which they hold shares have already paid tax. 

The kicker is Labor’s new tax on shares only applies to self-funded retirees! 

Retirees will pay tax on already taxed profits. Australia’s system of dividend imputation which supplies franking credits was designed to abolish this form of double taxation. 

For decades, Australians have planned for retirement on the fair assumption the system of franking credits, which has enjoyed bipartisan support, will exist in future.

 This new retiree tax does not discriminate between the city and bush or rich or poorer electorates. In the South Coast seat of Gilmore, 8587 will be affected. In the seat next door of Eden Monaro it is 6918 and inner city Wentworth has 8443 people who will lose out.

There are three big problems with this tax. 

Firstly, the retiree tax is premised on Australia not having enough tax revenue – even as we are about to approach a surplus budget. 

Labor take their advice from extreme activists like the Australia Institute who say: “Australia is a low-taxing country… Australia raises far less tax revenue than most developed countries.”

This “less revenue” claim is based on misleading apples with oranges international comparisons from the OECD and World Bank which try and compare economy wide tax systems that are wildly different. 

The Productivity Commission says these comparisons are “complicated by the fact that some benefits provided by employers (for example, employer superannuation contributions) are not measured as a tax in Australia but are part of SSCs [social security contributions] in other countries.” 

Thankfully the PC disagrees with the Australia Institute and has said: “taxation revenue as a share of GDP from all other sources would be higher in Australia than the OECD average…”

With the OECD average tax to GDP ratio being 33%, Australia comes in at 34% under an apples with apples comparison. 

Anyone who lives in Australia knows we are not a low taxing nation. Labor doesn’t want to manage the budget properly – their only solution is more taxes.

Secondly, this policy is not targeted at wealthier people. 

The 310,000 NSW retirees to be hit by the retiree tax are not the cigar chomping, caviar set. They are self-funded retirees living in Bateman’s Bay or Bondi. 

Treasurer Josh Frydenberg has said of the hit to NSW retirees: “The people (Labor) are hurting most are those on lower taxable incomes, with about 84 per cent of those impacted having a taxable income of less than $37,000.”

This flies in the face of Labor’s policy statement that this new tax is about “reducing superannuation tax concessions for millionaires.”

Labor says “Low wealth households typically don’t benefit from the current taxation arrangements – they have little capacity to accumulate the wealth needed to do so.” 

Clearly, they have not done their homework or do not understand their own policy. 

A typical self-funded retiree to be impacted by this policy has simply invested in Australian shares (inside or outside of super) and is planning to use the tax refunds to pay for their retirement. 

 The losses for many will be significant. For example, a couple that retires today with $800,000 in their superannuation fund and a 25 per cent allocation to Australia equities will lose $3,080 if this new tax is enacted.

This is a typical allocation to Aussie shares most retirees have in their super fund; which suggests thousands of retirement plans will onlynow be viable if the Coalition is re-elected.  

Thirdly, the policy is retrospective in practice. 

When planning retirement, Australians plan decades in advance. Retirement savings plans are set with the expectation a future government will not pull the rug from underneath. 

Self-funded retirees are heroes in our community. People who have scrimped and saved to be totally self-sufficient.

Many people retiring now invested heavily in Australian shares which were demutualised or privatised in the past two decades: Commonwealth Bank and Telstra for instance. 

The franked dividends paid by these companies underwrite many retirement plans. No one would have foreseen a future government overturning the long held principle of taxing a person at their marginal tax rate.

Retrospective taxes are commonly found in dictatorships and unstable nations – not Australia.  

The fact is, the new tax would apply to existing investments. It would apply to all Australian shares held by self funded retirees. It is therefore retrospective and has not been “grandfathered”.

 How could you possibly plan for the future under these circumstances? When the goal posts are moved in mid-match, you cannot win. 

 In this half-baked proposal, Labor would expose 310,000 NSW retirees to a new retrospective tax. 

Self-funded retirees deserve our total support and should never be collateral damage – especially as Australia is finally returning to surplus budgets. 

 Andrew Bragg is a Liberal Senate Candidate for New South Wales

ACTU's "Change The Rules" would be economically disastrous

The Australian 25 October 2018

While Australia burned through five prime ministers in the past decade, our global competitiveness ranking sank from 16 to 21.

This would be the worst time to “Change the Rules”, as the unions sought in their marches this week.

The World Economic Forum says “restrictive labour regulations” are the biggest single drag on our competitive position.

Nations enter permanent decline when narrow vested interests work against the greater good and are given what they want.

However, we now face dropping to 30th place if the most powerful vested interests in Australia, the unions, are allowed to have their way on their insular Change the Rules agenda.

We have to be competitive to attract foreign investment, which has paid our way since European settlement.

In a place such as the north of Tasmania, foreign capital pays for the slaughterhouse, the fertiliser distributor, the cheese factory and the aluminium smelter.

These jobs are the direct result of foreign investment.

In the past decade, unions have taken on an anti-worker program of higher taxes, less free trade and endless regulation to undermine new employment opportunities.

If adopted, three policies in the ACTU’s Change the Rules list will further erode the nation’s competitiveness and hurt workers.

First, ending enterprise bargaining and replacing it with industry or “pattern bargaining” is the radical proposal in the Change the Rules pack. It says: “The rules around enterprise bargaining are too restrictive and bosses have found ways to exploit them.”

Since 1993, Australia has had agreements negotiated workplace by workplace, reflecting the varying needs of businesses.

The threat of pattern bargaining was reinforced in ACTU secretary Sally McManus’s Press Club speech in March in which she said workers should be allowed to negotiate “across a sector or industry, should they choose to do so”.

Think about it from the business point of view: two or more unrelated enterprises having to bargain collectively for no reason other than the unions have relevance deprivation syndrome.

The bigger problem is not enough flexibility. The WEF says two of the primary contributors to our restrictive labour regulations deadweight are “hiring and firing” rules and “flexibility of wage determinations”. Multi-employer or industry-wide bargaining would set Australia back 30 years, to the pre-internet days.

Pattern bargaining would be like demanding houses have to be the same price, even though in Burnie the average house price is $279,000 and in Sydney it is $1.1 million.

It would be an act that fails to acknowledge the technological, globalised world in which Australia must compete at the small and medium enterprise level.

While we are at it, should we also raise tariffs, increase taxes and lower the pension age?

Second, killing flexible work will be next. The ACTU wants to grant casual employees the right to convert to permanent employment after six months.

It also wishes to restrict labour hire and abolish independent contracting as found in the so-called gig economy. Millions of Australians who undertake this type of work would be at risk.

Levels of casual work have not changed much in the past decade. What has changed is the opportunities.

Ten years ago, we didn’t have iPhones that allow rapid food delivery on bikes to hungry people, or match nannies with families in need of urgent cover.

This provides casual work opportunities for Australians from all walks of life.

Third, abolishing institutions that insist on the rule of law is also on the agenda.

One of the areas Australia has made a marginal improvement in the WEF’s index is in such institutions. This refers to the revival of the Australian Building and Construction Commission and establishment of the Registered Organisa­tions Commission after the last election. 

The ABCC is trying to rein in unlawful behaviour in the building sector, which is led by the CFMEU. Last month Federal Court judge Richard Tracey said of the CFMEU: “The union has adopted the attitude that it will not comply with any legislative constraints placed on its operations with which it disagrees. Such an approach is an anathema in a democratic society.”

We clearly need this regulator. It should not be abolished.

If we end up with a trifecta of pattern bargaining and abolition of flexible work as well as regulators like the ABCC, we can kiss goodbye to more investment and any growth for jobs in Australia.

These policy changes will be sought by the richest campaigners in Australia. The Menzies Research Centre believes the top 15 unions earned $750m in revenue last year and sit on $1.5 billion in assets. Prepare to hear “change the rules” regularly and mindlessly uttered by activists.

The Labor Party did the right thing by ignoring union demands to block the Trans-Pacific Partnership trade deal. The Change the Rules madness must also be rejected. For all of us.

Andrew Bragg is author of the trade and foreign policy book Fit for Service (Connor Court 2017).

Australia can't afford populism on foreign money & people

Australian Financial Review 17 October 2018

Populist economic policies such as tariffs, subsides and the White Australia policy failed our nation in the 20thcentury. Rational economics has delivered 27 years of growth. Chiefly this involves lower taxes, less regulation, more trade, more foreign investment, more immigration.  

Two tests of whether economic populists are winning are the policies on trade / foreign investment and immigration. 

It is easy to rag on foreign money and foreign people. There will be a real cost to Australian workers if policies to demonise either are adopted.

Firstly, on trade and foreign investment.

Free flowing global capital is essential to Australia. The unions’ attitude to the new trade and investment deal, the Trans Pacific Partnership, provides a contemporary risk to this pipeline. 

Labor had done the right thing by pledging support for the TPP.

However it appears union bosses have extracted a deal which will effectively rob Australia of future trade deals, investment, exports and jobs. 

Union opposition to the TPP is based on dogma and concealed protectionism. The unions resist a clause which supports the rule of law and investment known as “Investor State Dispute Settlement”.

We have seen this movie before: ISDS is used as an excuse to avoid doing trade deals.

The Howard Government started negotiations on the China trade agreement in 2005 but Labor in office from 2007-2013 couldn’t conclude the China or Korean deal, because unions oppose ISDS. 

ISDS is a legal framework to resolve investment disputes. Australia has been a signatory to 27 agreements with ISDS since 1988. There has been one case brought against us which we won.  

No Australian law on social, environmental or health grounds has ever been affected by ISDS.

ISDS is used as a red herring by protectionists who are afraid to be transparently protectionist. 

Sadly, very few people have taken the time to look at what ISDS actually achieves and choose to believe the union protectionist dogma. 

Similar dogma on foreign investment is commonplace, usually from the other end of the political spectrum. 

The fact remains we rely on foreign investment and have done so since 1788 which is why we have a current account deficit. 

In 2017-18 the current account deficit was $54 billion. That is $54 billion of foreign money invested into Australia that we do not have.

Yet Independent MP Bob Katter says: “the Government … profoundly believes in encouraging what they call foreign investment, they are what I describe as a traitor selling out his country...”

This colourful point ignores the fact Australian super funds and banks are unwilling to fund regional projects in places like Far North Queensland. 

Despite having the fourth largest super pool of assets in the world at $2.7 trillion, super funds are largely index hugging managers unwilling to take risks to back rural Australia. 

No Australian backed in Arrium steelworks in Whyalla which employs 3000 people. 

It was a Briton, Sanjeev Gupta that came to the rescue last year by acquiring the steelworks, providing the capital needed to keep 3000 people employed. 

It’s a similar story in places like Northern Tasmania where the abattoir is owned by a Brazilian company and the cheese factory is owned by a Japanese firm.    

Secondly, migration is easy to argue is the cause of all evil. 

One Nation Senator Pauline Hanson said earlier this year there should be a plebiscite on immigration: 

“The question to be put would be along the lines of ‘what level of immigration should we be taking into Australia?”

Indiscriminate proposals to cut immigration ignore the complicated equation of what makes up our net migration intake. 

Congestion is a used as a populist excuse to cut immigration. 

Yet congestion is primarily a failure of many state governments to build infrastructure to support growing communities. 

If less migrants moved into Sydney or more moved into regional areas, as has been proposed, it would surely improve services in the bush but would not necessarily solve congestion problems in Sydney and Melbourne.   

Whatever the policy is on decentralisation and regional migration, it is intellectually dishonest to push for an aggregate “number” of people. 

Most migrants are brought in to fill skill shortages or as foreign students contributing to Australia’s third biggest export: education. Our education system is now a $17.7 billion export.

68 per cent of migration to Australia is for work that Australians cannot or will not do.

Sectors as diverse as professional services and meat working are the primary users of this system.

This is the hard truth about migration in Australia today. 

It is not a family reunion extravaganza of decades past. The boats have been stopped so migration is now an orderly process largely based on the need to either fill skill shortages or secure education exports.

Australia simply cannot afford to let the populists win. We need the money and the people.

Andrew Bragg authored “Fit for Service” a short book on foreign and trade policy (Connor Court) - @ajamesbragg

Enforcement or bust for Royal Commission

Australian Financial Review 27 September 2018

The Hayne royal commission is hurtling towards its conclusion after having pulled the finance sector apart.

Hayne has demonstrated how wrong so many of us were at the breadth and depth of malfeasance and dishonesty in the sector – myself included. It was only the full weight of a royal commission's unfettered power which could get to the bottom of the issues.

I spent most of this decade working on financial regulation – and before we even see Hayne's report, there are two key lessons.

Firstly, it is intellectually bankrupt to keep on piling on new laws and regulations unless they are enforced. We risk wasting Hayne's work unless enforcement is front of mind for policymakers.

I am a believer that less regulation is generally better for the economy. No one could argue financial services was lightly regulated.

Even the best laws will be ineffective if they are not enforced.

Reforms such as "Stronger Super" and the "Future of Financial Advice" or FOFA into the superannuation and financial advice sectors were ambitious but they were not fully enforced.

The laws they replaced which existed before and during the financial crisis were weaker. They were also not fully enforced.

Thats has meant that we have not been living in a caveat emptor world. For example, before the financial crisis, there were laws which required advisers to "know your client" and "give appropriate advice". Yet during the crisis many Australians were given terrible advice by licensed advisers.

There will always be a few crims and spivs who manage to escape the policeman, but the scale of the malfeasance shows the whole enforcement approach was unrealistic and simply not up to scratch.

This resulted in ASIC revealing in April that just one criminal prosecution was achieved against a financial adviser in the last decade.

Perhaps the most significant reform over the past few years came as a commitment from the now Prime Minister to ensure ASIC has a commissioner with prosecution experience.

Prosecution is now the key word. Even if the Hayne commission produces the greatest blueprint for policy reform and cultural change Australia has seen, it will all be a waste of time if there is a regulator unable to enforce the new laws.

Perhaps the best way to get immediate change is to make some prominent examples of those that have contravened the existing law.

That will help ensure that any new laws are treated more seriously by the institutions and the regulator. People avoid breaking the law partly because the police will catch them. The same mentality should apply to all industries.

A tough regulator is a prerequisite for any industry that wants to end the groundhog day of endless reviews.

The second lesson is that law reform is not a silver bullet. Expectations were sky high for the financial services reforms delivered over the past decade. Those expectations have not been met.

Policy-based law reform should not be expected to deliver a trifecta of raising standards, changing culture and delivering redress. Many of us in the sector, with the best of intentions, were naive in thinking it would.

For example, after the immediate response to the global financial crisis, the medium term policy response was the structural reforms of the superannuation (Stronger Super) and financial advice (Future of Financial Advice or FOFA) industries.

The reforms banned commissions, lowered superannuation fees, established a fiduciary like duty for advisers and banned or regulated wholesale payments within the industry.

Standards were raised in law but cultural change did not occur and compensation was not required.

When treasury or independent reviews looked at the policy landscape and made policy recommendations, misconduct was not in scope.

The problem was the FOFA and Stronger Super reforms created an expectation gap. Many inside and outside of the industry worked on the basis these extremely expensive reforms would solve all of the problems.

The commission's hearings have revealed the problems were not solved. 

In fact, following the changes, there are multiple examples of consumers being put last.

The noise for a royal commission didn't go away because too many people were still being hurt by institutions and/or advisers and felt they were entitled to compensation.

At least the aged care sector is starting out with a royal commission which will likely provide a policy framework as well as looking at culture and redress. This approach is less likely to leave skeletons in the closet.

If there is a culture of non-compliance and failed enforcement in the aged care industry, the new royal commission must deliver the consolidated policy, culture and redress framework in one whack.

If a banking royal commission has been conducted after the financial crisis, that industry would now be thinking about how to grow, not how to deal with more laws and victims.

The "royal commission up front approach" should therefore work in the long term interests of the aged care sector.

Hayne will soon provide his further reform blueprint. Hopefully law enforcement and properly setting expectations will drive the response.

It will be another lost opportunity if these two lessons are lost.

Andrew Bragg was a former director of policy at the Financial Services Council.

Australia needs the world much more than it needs us

The Australian 5 September 2018

As part of the Forgotten People radio addresses, Robert Menzies wrote “Scrap Iron for Japan”. It was a defence of Australia’s trade with Japan when he was Prime Minister the first time from 1939-41. 

Menzies argued Australia must always be open for trade. 

Australia’s fundamentals are similar today. We are a medium sized nation, with an enormous land mass and untapped productive capacity.

We rely upon open markets and a competitive economy for our high living standards. We have never had enough money to reach our potential. Protectionism would destroy the economy, 40 per cent of which is trade exposed.

My rewrite of the Menzian classic offers three lessons.

First  – protectionism is harder to spot today but has never gone away.  

There has always been discontent about the waves of foreign investment Australia has relied upon since the First Fleet. First Americans, then Japanese now Chinese. 

Fig leaves are used to justify protectionism. 

A little-known clause called Investor State Dispute Settlement is the latest fig leaf. ISDS provides for investment disputes to be resolved by independent tribunals run by the World Bank or Permanent Court of Arbitration.

The ACTU has said of ISDS: "Our democratically elected governments must be free to make laws that put people first without fear of being sued in a secret court. These are bad clauses that sell out our sovereignty and we shouldn't agree to deals that include them."

Translation: don’t do trade deals. The truth is ISDS reinforces the rule of law as a conscious act of sovereignty, Australian companies use ISDS to resolve disputes abroad, there is no such thing as a secret court and ISDS drives investment into developing nations. 

We have had ISDS in 27 separate trade and investment deals since 1988 and just one case has been brought against Australia which was won by the Australian government.  

Second, Australia cannot afford to flirt with protectionism. 

With a much bigger domestic market, cheap energy and a less trade exposed economy, the Americans can probably try some highly risky ideas we could not.

President Trump’s risky tariffs on steel are having an immediate impact on the US economy. 
A full blown trade war could emerge from the US President’s desire to change China’s trading behaviour. 

This objective could be met through an free trade deal with China - a way to address US concerns on market access into China, dumping and intellectual property transfers. I said in February last year:

"Australia should be prepared for a Nixonian move by Trump. Richard Nixon, the great anti-communist, shocked the world when he recognised Red China. Trump may well do the same through a trade deal with China in this presidential term."

However the initial consequence of the tariffs in the U.S. are higher input costs and some component parts for manufacturing are now unaffordable.

China is retaliating with tariffs of their own on US produce including a major US agricultural export: soybeans.  

Soybeans going into China now face a 25% tariff and massive subsidies have been announced to buttress U.S. farms.

The stakes are high. The US Chamber of Commerce has produced cutting analysis here to highlight the local impact of the tariffs.

The President’s strategy is surely to get China to the negotiating table. 

The deal making cannot take forever as soy bean farmers cannot live with the 25% Chinese tariffs permanently. 

Third, calmly maintaining public confidence in foreign investment remains essential.  

The Foreign Investment Review Board was established in 1976 following the acquisition of the Chiko Roll company by American investors. 

From investment rules to foreign interference laws, Australia must be prepared to set firm national interest boundaries which are fair, transparent and non-discriminatory.

We have spent 18 months debating Chinese influence in Australia. China is borrowing the playbook used by the great powers of the past century – they seek to influence all parts of the foreign nation in which they have an interest.

Australia should calmly and coolly view China through this historical prism and address foreign interference in a non-discriminatory fashion – set the boundaries on an equal basis.  

We cannot let emotion drive our decisions. Menzies said of the opposition to his Japan trade deal:

 I have the honour to be supported in the Commonwealth Parliament by 100 members. Of these, 69 are ex members of the armed services. Their love of Australia is proved in action. Of these, no fewer than 32 served against the Japanese in the recent war. Of these, five were prisoners of war in Japanese hands. Are these members pro-Japanese? Or have they realised that the happiness of the future depends upon the future and not nursing the bitterness of the past for cheap political gain.

Long may we remember this sentiment. Bold, realist leadership which spurns protectionism and populism will best serve Australian interests. Australia needs the world more than the world needs Australia.

Andrew Bragg wrote Scrap Iron for Japan in the new book “The Forgotten People: Updated” (Connor Court) 


Scrap Iron for Japan: UPDATED


Featured in Paul Ritchie's The Forgotten People Updated (Connor Court) 2018 

Menzies’ home truth to Australians during our battle for survival in World War II, Scrap Iron for Japan was: Australia will either trade or die. 

The principle is timeless. We must permanently nourish the argument that an open, outward looking, competitive economy delivers opportunity for all Australians. 

Menzies noted on face value, not every single international transaction would appear immediately desirable, but exports were essential for prosperity. 

He said in the broadcast: “the whole economy of this country has rested upon our great exports, and upon the willingness of foreign countries to buy them.” 

Menzies took the opportunity to defend accusations his 1939-1941 government provided scrap iron to Japan which was subsequently used in ammunition against Australian soldiers. 

His simple response was Australia provided Japan an enormous amount of wool and wheat over the same period and there is no difference between feeding, clothing and arming soldiers and being selective about exports would only lead to ruin. 

A timeless principle

To demonstrate the timelessness of the principles, a similar discussion was held in the mid 1980s on the desirability of uranium trade: Australia is now the world’s third largest exporter of uranium. 

Yet this was not assured until the Hawke government won the argument against internal constituents who wanted to lock uranium up and leave it in the ground forever. 

Thirty years on, any reasonable person would agree failing to utilise the world’s biggest deposit of uranium would be scandalous. The almost 5,000 jobs in the Australian uranium industry are found in very remote parts where employment opportunities can be few and far between. 

The principles equally apply henceforth to energy policy. We must not forget Australia is an energy superpower. 

All policy settings applying to energy and resources such as coal and gas must be evaluated through the prism of trade and competitiveness. 

This does not mean we have an excuse to avoid climate change commitments Australia makes through the United Nations and other bodies. 

But it does mean we cannot afford to put ideology before science when we consider the policy settings applying to renewable energy, gas exploration and any other market intrusion such as a carbon tax. As we consider the future of onshore gas exploration, much of which is locked up, we ought to remember the uranium debate was nearly lost. 

No person, and certainly no country, can be granted great endowments and decide not to use them because last year’s profits or efforts can be relied upon. 

It is not a sustainable model. Opportunities are finite and the culture of the lucky country will not do. 

We must turn the endowments into opportunities. We must make the opportunities count.

The truth is, we in Australia, with a large landmass with a small population, now on the doorstep of Asia’s booming middle class, are born to look outwards. 

The mere fact trade opens opportunities and improves lives should be ingrained by the millions of individual experiences of typical Australians. 

It was in my family. For instance, my grandfather James from Stawell in Victoria, fought the Japanese in New Guinea in the 1940s but would only purchase Mitsubishi cars by the 1980s. He did so because they provided the best station wagon to suit his fishing gear. 

We cannot survive without open trade. Yet, this fact will be contested forever. 

Two lessons

Scrap Iron’s framework attains timelessness by doing two things for us today: 

1.    Reasserting the value of trade to Australia and the ever-present opportunities of our geography  

2.    Calling out protectionism in all its guises

The opportunity of trade

Australians exploiting trade opportunities dates to Macarthur and his wool bales at the beginning of the 19th century. Trade is in our DNA. 

We should remember the key statistics. Australia did not become the 12thlargest economy on earth with just the 50thlargest population by accident.  

Exports account for 40 per cent of our gross domestic product and one in five jobs is directly linked to export trade. 

The development of export industries such as iron ore, gas, gold and coal was the result of vision, tenacity and opening frontiers in domestic development, such as Lang Hancock and Peter Wright in Western Australia, but also through opening international trade opportunities. 

Menzies’ capacity to see the benefit of trade with the most brutal of enemies in the middle of WWII was truly remarkable. He followed up with the 1957 Australia Japan Commerce Agreement which opened iron ore exports to Japan. 

But we have not continued to grow for 26 years without being competitive. In most export markets, our customers have other options and we do not enjoy a monopoly.   

Recent prosperity rests upon a combination of industry and political leadership to develop the country combined with a reform dividend from decades past which boosted our national competitiveness. 

By 2030, three billion people will be in the Asian middle class to our north. 

That’s roughly a billion in each of India, China and South East Asia. 

Our largest trading partners are already in North Asia and the emergence of India, Indonesia and South East Asia will only provide more opportunities to export products and services. 

Services are just 17 per cent of our exports yet represent 70 per cent of our gross domestic product. As the middle classes of Asia swell, they will increasingly demand services – think accounting, legal, architecture, education, tourism, finance and professional services. 

With Australia’s population unlikely to exceed 40 million in coming decades, we must do all we can to plug into the extraordinary growth of the Asian middle class. 

With this at stake, realism not dogma must govern our mindset.

Protectionist messages are commonplace in Trump’s America and omnipresent in the European Union, which has failed to be a paragon of free trade beyond its own borders. 

Australia cannot afford to follow the leader on talk or actions which reflect protectionism. This would be the worst time to succumb to protectionism. 

The trouble is, we often suffer collective amnesia on sometimes dry policy areas like trade and look to ideas we dismissed just a generation ago. 

On the domestic side of the coin, we see suggestions of reimposing Australian tariffs or local content requirements floated on a regular basis. 

The highly protected, rigid and uncompetitive “Australian settlement” featured high tariffs, subsidies, centralised wage fixing and Canberra-controlled banking arrangements. It was established in the years following federation in 1901 and became an article of faith for all political parties. 

The Settlement was finally despatched to the dustbin in the 1980s and 1990s after decades of work from Bill Carmichael, Bert Kelly and others. Australia’s economy responded with 26 years of growth (so far) after being opened to the world.

One risk of Trump’s new nationalism (America First) is we feel compelled to exhume some of these discredited policy settings. 

It provides an opportunity to pursue competitiveness at all costs. Long may we remember the great lesson of the “Australian Settlement”: it did not work. 

We should not seek “rinky dink” solutions such as tariffs, prescriptive local content requirements, new taxes or indiscriminate cuts to immigration. 

The Productivity Commission estimate a trade war which adopts a cascading “America First” approach would cost Australia 100,000 jobs and reduce $1,500 from average incomes.

If it was impossible to coset Australia away from 1901 to 1980, it would be futile to try it in an age of increasing capital mobility, technology and rapid communication. 

As President Trump looks to renegotiate the highly successful North American Trade Agreement and pull back on international collaboration, we should thrust forward to pursue all available trade agreements. 

If we keep all our irons in the fire, we will maximise our chances of getting deals done. Bilateral, multilateral or pluilateral should all be in the mix. All irons in the fire should be our credo for trade policy.

Regional agreements such as the Trans Pacific Partnership and the Regional Comprehensive Economic Partnership bear the makings of an Asian region free trade zone. 

As it is likely to take decades to assemble the regional architecture, a programme for bilateral agreements with all major Asian economies should be completed by 2025. 

The trouble with trade agreements is once they are inked by the Trade Minister, there is a perception it is the end of the work. The truth is that a trade agreement is just the beginning.  

Two outcomes must be top of mind for Australian trade policy development in the coming decades.

One: a programme for implementation of trade commitments should be rolled out to every industry and regulator to reflect a trade agreement is the “end of the beginning” of an export, not the “beginning of the end”.

Two: every trade agreement must have a schedule for review and continuous improvement above and beyond conventional trade agreement mechanisms such as “most favoured nation” clauses.  

Spotting protectionism

Protectionists always use red herrings to make their case. 

Prejudice or dogma typically drive the protectionists. This must be unpacked and destroyed with reason and argument. 

Menzies was no shrinking violet. His quips in response to critics “on the stump” were legendary. But perhaps more important is his reputation as a fighter and an advocate for his cause which is displayed throughout his many works. 

The 2018 equivalent of hysteria on 1940s Scrap Iron for Japan is surely Investor State Dispute Settlement (ISDS).

At a functional level, ISDS provides a mechanism for resolving cross border investment disputes between business and nations which is embedded in trade and investment treaties. Typically, disputes are addressed through global tribunals established by the World Bank or Hague Convention.

ISDS therefore reinforces the rule of law and strengthens investment into developing countries as Asian Development Bank studies have shown. 

No nation has ever lost an ISDS case which has impinged a social, health or environmental law.

Australian companies are starting to make the most of the opportunities of the Asian middle class by investing in the region. In South East Asia, the legal systems are less certain and Australian companies have used ISDS to resolve investment disputes.

Most of the discussion in Australia’s media over the past decade on ISDS has focused on a negative idea that “foreign companies shouldn’t sue governments”. It may sound good but it smacks of provincialism and ignores key democratic principles.

This very unscientific argument neglects to remember we accept in a democracy that no person, lawmaker or government is above the law and that we can test laws in the courts. 

Such is the misguided hype on ISDS that it took a decade to resolve trade deals with China and Japan which only occurred after ISDS was put back on the table by former Trade Minister Andrew Robb to seal a North Asian trifecta in 2014.

The often-cited ISDS case is Philip Morris’ action against the Australian Government on plain packaging cigarettes. This case is held out as a reason to never again agree to ISDS clauses or worse, to reopen every single trade agreement Australia has struck and renegotiate it to remove ISDS.

Talk about flagging your strategy to your competitors before commencing negotiations!

The fly in the ointment on cigarettes is Australia won the Philip Morris case. So did Uruguay in a similar case brought under an ISDS clause.

With entire protest movements now established to fight ISDS, we must ask why? It must be the latest iteration of the protectionists’ tools.     

Arguing against ISDS is akin to arguing directly against trade. We must not succumb to the simplicity of the arguments and look behind to see it for what it is: dogma-driven protectionism. 

Whether we keep the gates open to trade and investment will heavily determine the ultimate length of Australia’s world-beating run of economic growth. 

Freedom without discrimination

The Ruddock Review into religious freedom has sent its report to the government.


Freedom of conscious, thought and religion is the bedrock of a free society. Anyone who’s read George Orwell’s 1984 knows as much.


The review should tell us whether we can exercise our conscious freely under Australia law. 


But this review must not pave the way for Australia to (1) reintroduce discrimination or (2) transfer power to unelected judges through a bill of rights. 


If the review seriously entertains either of these proposals, it risks missing the main objective – to ensure religious freedom of institutions and individuals. 


Churches, worried their freedoms could be encroached, asked the government for the review during the heat of the same sex marriage debate in 2017. 


Churches continue to play a critical role in Australian life. For instance, 600,000 children (20 per cent of all kids) are currently enrolled in Catholic schools. 


The broad review is an opportunity to determine whether universal freedom of religion exists in Australia, which is extremely important in our liberal democracy. 


The big questions for the review include whether to establish a religious protection of freedom in state constitutions, determine if the wording in section 116 of the Constitution is broad enough and whether anti-discrimination laws maintain religious freedom.


Now to the two things the review should not do.


First, the freedom of religious institutions to teach, manage and serve a religious view of marriage is not the same thing as whether bakers and butchers should serve a gay wedding.


Churches and religious institutions must remain sovereign and their choices to marry or not marry two people must always be protected by law. 


But the idea that a commercial business could say no to serving a cake or a tailoring a suit or driving a taxi to a gay wedding is wrong. 


It would wind the clock back decades on anti discrimination laws.


Yet the Australian Christian Lobby says:


“Where a business is a small business operated by individuals with a genuinely held conscientious or religious belief about marriage and/or family, or where the business is a large business with governing principles that express a genuinely held conscientious or religious view about marriage and/or family, such businesses must be free to operate in accordance with those beliefs.”


This suggests the Sex Discrimination Act ban on refusing to supply goods and services because of gender identity should be overturned.


If we allowed businesses such as cab drivers, bakers and tailors to select on a whim who they serve based on sexuality, where we do stop? Do we allow discrimination for race or age? 


This is the thin edge of the wedge and must be rejected. Businesses are not religious institutions. 


One of the strongest arguments for same sex marriage was equal rights under the law.

Prior to same sex marriage, de facto rules in each state and territory and nationally did not deliver the rights marriage automatically bestow upon a couple.

Equally, next-of-kin arrangements were not equivalent. It was much harder, or impossible, to prove a partner in a same-sex relationship could have been the legal next of kin.

Having legislated the same marriage rights for all, Australia must not replace discrimination with discrimination. 


Sexual profiling in shops could potentially become racial profiling.


Multiethnic Australia has long rejected profiling in our cohesive, diverse nation.  


Second, a bill of rights has been proposed by constitutional scholars and Christian groups as a solution.


This has rightly been pilloried by conservatives for decades as a massive transfer of power and responsibility to the courts from the legislature.


As John Howard said in 2009


'A bill of rights would further diminish the prestige of Parliament, it would politicise the appointment of judges, it would increase the volume of litigation and it would not increase the rights and protections now available to Australian citizens.'' 

''A charter or bill of rights would represent the final triumph of elitism in Australian politics - the notion that typical citizens, elected by ordinary Australians, cannot be trusted to resolve great issues of public policy.''

Creating a bill of rights would effectively say the Parliament has given up on rights. 


Courts would make judgements on all legal rights and freedom affecting our whole citizenry – well beyond freedom of religion. 


By ceding responsibility to the courts, we would undermine Australian Parliamentary democracy forever. We would end up picking judges on their politics rather than their skills.


The review should therefore set aside proposals to introduce a bill of rights. 


Equally Ruddock should reject any form of commercial discrimination as the panel considers the issues raised by churches and other religious groups to which we should all bring an open mind. 


Freedom without discrimination please. 


Andrew Bragg led the 2017 Liberals and Nationals for Yes campaign


Stop the Super PAC

Australia is witnessing the creation of our first 'Super PAC': superannuated unions.

In the United States, a ‘Super PAC’ is an aggregator of cash that makes maximum noise and ruckas for its donors whatever the cost to the nation. The unions now meet that classification.   

Even though union representation has fallen to 15 per cent of the overall workforce and just over 10 per cent of the private sector, trade unions now sit on assets of more than $1.5 billion.

Cash flows from industry funds and their opaque related parties back to the union bosses: $60 million in the past ten years.

At the current growth rate, payments are on track to hit $22 million per year within the next decade. If you are a member of an industry superannuation fund, every cent of these payments is taken directly from your retirement savings.

Few people would be aware of two laws which empower these faceless union bosses: lax governance and restricted competition.

At a conference this past Sunday I gave a presentation explaining how the opaque relationship between industry superannuation funds and trade unions has built a war chest of considerable political influence.

In its report released today on the efficiency and competitiveness of the super sector, the Productivity Commission has called time on the cosy relationship between the industrial relations system and super funds.

There are two reforms which must be progressed within the life of this Parliament: the first is improving superannuation governance laws.

The Senate should immediately act in the national interest by passing a bill to require independent directors on all super fund boards.

The second is a sorely needed change to increase competitive tensions between funds.

This can be done after both the Royal Commission and Productivity Commission finished their work later this year.

The Royal Commission is yet to turn its blowtorch to the fraught governance arrangements and related party transactions at union super funds. When it does it would surely be interested in the almost $5 million in payments to unions from companies owned by Industry Super Holdings.

Often the largest payments to unions stem from opaque companies that sit under a wholly owned parent company called 'Industry Super Holdings' (ISH), such as Industry Fund Services and Industry Funds Management.

ISH has long been surrounded by controversy and is a blight on the record of its largest shareholder, the mammoth ACTU-run fund AustralianSuper.

Take, for example, the ISH owned Industry Fund Management's (IFM) failed investment in Pacific Hydro, which allegedly lost consumers $700 million in one transaction. 

A detailed report into the failure allegedly was buried. Only snippets have ever been exposed, and that was by Chanticleer column in 2015:

"[The] review, code named Project Primavera, has not only been kept secret IFM Investors has gone to extraordinary lengths to keep it under wraps.

Any investors in the IFM Australia Infrastructure Fund or asset consultants wanted to look at the 200-page Project Primavera report must sign a confidentiality agreement."

No other compulsory product or service in Australia could justify such an opaque and arrogant approach. 

Second, competition in super can only improve the troubled system.

Industrial laws ensure millions of consumers who do not choose their own superannuation fund are "defaulted" into union-controlled funds to the tune of $10 billion per year.

In calling for the Fair Work Commission to be stripped of its role selecting default funds, the PC has given a strong, evidence based policy basis for a major transformation of the superannuation sector.

Consumers are free to decide whether or not to personally join a union, and a record 85 per cent of Australians have decided not join one or support their anti-worker campaigns.

Most consumers would be unaware their retirement savings may be skimmed to help fund union operations and their political campaigns, run by the likes of the lawless Construction, Forestry, Maritime, Mining and Energy Union.

We must not forget CFMEU boss John Setka said last week:

"We get fantastic pay rises and good conditions for our members because we fight it outside the law. And if that sometimes brings us on the wrong side of a bad law – and there [are] bad laws – then so be it."

It is the hard-working non-unionised, law abiding workers who are automatically signed up to funds like CBUS that are helping contribute to the CFMEU's $15 million legal bill for breaking our laws. CBUS has actually paid $13 million of workers retirement savings to the CFMEU in recent years!

Nowhere else in the Australian economy has the legal framework and consumer protections been twisted so monstrously to separate Australians from their own savings. In doing so it has propped up the shrinking union movement and enable it to become such a formidable campaign force.

Foreshadowing the release of the PC report in a recent article Adele Ferguson was right to question how much longer the "super gravy train" of fees, related party transactions and sub-scale funds that erode consumers' balances, could keep running.

Proponents of the gravy train argue that payments to unions, are simply yhr product of innocent payment of directors fees from funds to the trade unions, on behalf of the union representative that sits on the board. This simply cannot be true. Large, one-off payments, are sometimes worth over $1 million at a time.

The Australian Finiancal Review reported the Productivity Commission's Deputy Chair Karen Chester on Monday saying that "if data is bad and you can't follow the money in terms of outcomes for members and related party transactions, it is warning bell number one."

The Senate needs no more evidence to pass the super governance bill and should do it urgently. Subsequently it should vote to increase competition once both the Royal Commission and PC have finished their important work. Workers are waiting for better value.

Andrew Bragg formerly at the Financial Services Council. Twitter @ajamesbragg

First published here: https://www.afr.com/opinion/columnists/default-super-funds-and-stacked-boards-help-build-union-super-pac-20180529-h10o48 



Unions' super sidelide II

Daily Telegraph 10 April 2018

As the Royal Commission into financial services kicked off, I wrote in the Daily Telegraph about the biggest secret in the industry: financial and political support unions receive from industry super funds.

Unions are desperate to defend their superannuated sheep stations, to keep the laws which give union bosses tycoon status – where their interests are put ahead of workers.

Industry super funds have sent $50m in political payments to unions in the past decade - growing rapidly to $22m per annum within a decade.

That is, your retirement savings sent to unions like the CFMEU to pay for political campaigns.

If there were independent directors of these ”not for profits”, the boards would not allow millions of dollars of retirement savings to be paid to unions.

Despite industry funds being investors of $460 billion, so much union activity is now working against the interests of super investors.

In the most brazen example of talking out of both sides of your mouth, unions told voters last election in NSW, the government should be defeated as the poles and wires would be sold to the Chinese.

Poles and wires were then subsequently bought by the very same union backed industry super funds!

Unions also campaign against tax cuts and trade deals, both of which make the Australian companies (which they own through super) more profitable. 

One of the major laws which sustains this rot are superannuation governance laws where unions control half of the super board seats.

I provide two real examples of poor governance which should be eliminated by a reform idea that’s been on the table for a decade: mandatory independent directors for super funds.

First, it is generally accepted that a larger super fund can deliver lower fees and better returns for investors.

Mergers between smaller funds are therefore desirable. Unfortunately, many proposed mergers between industry funds have collapsed because the union owners squabble over board seats – because the union’s interests come first. To be fair, some have also been completed.

Equipsuper is a $14 billion fund with two failed mergers in the past five years at the hands of unions.

The Equipsuper chairman Andrew Fairley said after the 2012 merger with VisionSuper failed because:

“… at the heart of the problem was an inability to agree on which trustees from both boards would form the newly-merged board. Put simply, industry fund boards are made up of an equal number of union-backed trustees and employer-backed trustees, so each representative organisation wants to keep its ratio of spots.”

Again in 2017, another merger between Equipsuper and Energy Super failed. Leaked emails revealed the Queensland ETU, which controls board seats on Energy Super, sought Queensland Government support to block the merger as the union would lose board seats.

Clearly, the interests of the union is trumping the mums and dads who invest their super in industry funds.

In other cases, we see bloated boards.

CBus super fund has a board of 19 people. All of these people need board fees – sometimes the cash goes back to the union.

Over a ten year period CBus paid unions an unbelievable $4.2 million in retirement savings.

These points illustrate exactly why Labor and Coalition governments have repeatedly been advised to rebalance these boards with independent, non-union directors. 

This would ensure mergers occur in the interests of investors and stop payments to unions.

Second, another key principle is directors of investment companies like super funds should be picked for their expertise and understanding of... investing money.

There is a case unfolding as the Royal Commission rolls on where automatic union control of a super fund by union officials is creating a crisis.

Vision Super is becoming a walking billboard for the need for independent directors. AEC data shows it has sent $300,000 to the Australian Services Union (ASU) in the past two years.

In recent weeks, the Chairman of the Vision Super Brian Parkinson was accused by the fund’s co-owner, the ASU’s Victorian boss Michelle Jackson of “gross misbehaviour and gross neglect of duties."

Jackson’s said: "Mr Parkinson was dismissed from his current honorary office of national conference delegate and the union has withdrawn our endorsement of Mr Parkinson as an ASU nominee of the Vision Superannuation board."

The union’s very actions have demonstrated that being a senior union representative should not create an automatic right to become a superannuation trustee without consideration of competence.

This is even more important because unions control 50 per cent of boards and as we have seen, union bosses can and do put their interests before workers.

Parkinson is digging in. He says it is all wrong and he is innocent. Who knows? It is unclear what happens next. He is still Chairman.

This case has demonstrated the howling conflict which will only be solved with more independence in super funds boards – the very reform unions are asking the Senate to block.

The fund should have the best guardians of workers’ nest eggs, not be chocked full of union and employer representatives whose day job is to be a union or employer advocate.

All types of corporations have problems from time to time. Banks have been no exception.

Yet no other sector has invented a smokescreen to maintain 30 year old laws that no longer serve workers by claiming to be purer than Bambi.

Worse, “not for profit” status has been asserted whilst industry funds have paid massive profits to union owners.

The real life examples show that opposing independent directors is an unsustainable position.

Andrew Bragg worked in the financial services industry for almost a decade – Twitter @ajamesbragg 

Unions' super sideline

Daily Telegraph 27 February 2018

The Royal Commission into financial services kicked off with public hearings.

The second most common source of complaints so far have been recorded against superannuation funds. This makes sense, our $2 trillion superannuation system is now the second biggest part of the financial sector.

If only the full truth were known, there would be riots.

There is a reason the powerful industry superannuation fund lobby wanted superannuation carved out of the Royal Commission despite it being a systemically important part of Australia’s financial system.

The reason is money. Pure self-interest. As former NSW Premier Jack Lang famously said eight decades ago “in the great race of life, always back self-interest, at least you know it’s trying.”

Industry superannuation funds are some of Australia’s biggest self-promoters.

Last year they spent $37 million on advertising – much of it to stop laws to make super funds work in the public interest – more transparency and fewer rorts.

The $37 million of workers’ savings spent on advertising is closer to a justifiable business expense than direct cash payments to political campaigners such as unions.

Yet this is precisely the great dirty secret of financial services: over the past decade industry super has sent over $50 million of workers’ retirement savings to support affiliated trade unions. The same unions that have been suffering chronically declining membership.

Australian Electoral Commission returns show the opaquely named payments as “other receipts” - these are simply direct payments of real cash to unions.

Without change, payments from industry super funds to unions will balloon to $22 million each year within a decade.

Industry super funds hilariously claim to be “not for profit” and many people believe it.

This claim would have no credibility were these payments better known.

As union representation heads to less than 10 per cent, unions are getting richer than ever on workers’ hard earned cash.

There is a litany of examples where unions have put their own interests ahead of the people they claim to represent.

From family board appointments to cover ups, to failed mergers to secret payments, it is a smorgasbord of self interest. 

In coming weeks, I will profile these issues with real examples which should be the focus of the Commission’s attention.

There are two sets of laws the union movement will do anything to preserve because they provide the cover for this great transfer of wealth from people to union bosses.

The first is the rule that lets super funds have any type of board it wants.

The board of choice for industry super funds is a one where unions take 50 per cent of the seats.

50 per cent of the board while representing 10 per cent of workers! Sound like a time warp?

It is a remnant of the 1980s when super was set up and union representation levels were closer to 50 per cent.

For the last 30 years, this has locked effective control of industry super in the hands of unions.

Major financial reviews for both Liberal and Labor governments have recommended this law be changed to require compulsory independent directors. 

In 2010 former ASIC Deputy Commissioner Jeremy Cooper’s structural review of superannuation recommended at least one third of superannuation directors be independent.

In 2015 former Commonwealth Bank and Future Fund Head David Murray’s Financial System Inquiry recommended there be a majority of independent directors. 

These repeated warnings reflect the fact no other financial sector law has remained static for 30 years.

To put this into perspective, in 1998, the Australian Prudential Regulation Authority (APRA), the financial sector’s prudential regulator was 10 years away from establishment.

The Australian Stock Exchange was just one year old and the global financial crisis was 20 years away.

No one would argue any financial or public institution should have a 1988 governance model in 2018.

Doing so would mean banks would hold next to no mandatory capital against their liabilities, there would be no ASX corporate governance disclosures, no UN principles of responsible investment and no comprehensive supervision of major financial institutions.

The second law the industry super tycoons want to keep is the very mechanism for receiving big money through industrial laws.

Each and every year, industry super funds receive over $9 billion in compulsory super contributions which are allocated by the Orwellian Fair Work Commission.

Award workers who do not choose a fund are automatically allocated to a fund the Fair Work Commission has picked after receiving advice from the union.

The union owns the fund and takes half the board seats.

Howling conflict some would say.

It might be better described as making the unions judge and jury or putting Dracula in charge of the blood bank. 

These FWC-selected funds become compulsory for small businesses – they cannot select a different fund for their employees. In many cases, workers are also unable to get out of an industry fund into another.

Both of the major reviews conducted in the past decade have also recommended this system be dismantled. 

Unions have done everything to preserve their status as financial tycoons.

But they surely won’t survive the Royal Commission with their governance and Fair Work Commission lurks intact.

Andrew Bragg worked for nearly a decade in the financial services industry – twitter @ajamesbragg

Investor protections help Australia make the most of TPP Mark 2

Australian Financial Review 31 January 2017

Investor State Dispute Settlement (ISDS) are four words we can expect to hear constantly as the Trans Pacific Partnership Mark II is finalised and ratified.  

ISDS is an investment clause which is a critical component of a cohesive and sustainable pan Pacific trade and investment deal.

The protectionist and isolationist union movement is already using ISDS as their chief reason to oppose the TPP.

The unions don’t like ISDS for the same reason they don’t like company tax cuts, trade deals or anything to encourage a competitive economy: their business model relies on a closed shop.

Union leaders are consistent in their laughable denial that Australia does not require foreign investment. We do and we want to be integrated into our region as it booms.

AMWU Secretary Andrew Dettmar said last week:

“We are gravely concerned at the implications of the investor-state dispute settlement provisions which allow foreign corporations to sue the Australian Government. It is a direct attack on Australia’s sovereignty and we should never sign up to a deal that gives multinationals a stick to beat us with.”

This is nonsense – purely spin and dogma which must not be accepted without proper examination.

It would be the epitome of intellectual laziness if this statement became a legitimate part of the TPP debate.

Previously rich nations like Argentina were driven to the brink through this type of provincial thinking. For a nation that relies on free trade and two way foreign investment, the ISDS dogma has to be unpacked and destroyed.

There are three things to note on ISDS as a clause in trade deals.

It reinforces the rule of law, encourages investment and has never compromised a health, safety or environmental law.

Firstly, the rule of law is strengthened by ISDS is it provides a mechanism for disputes to be resolved by transparent, weighty institutions such as the Permanent Court of Arbitration or the World Bank.

The Permanent Court of Arbitration which was set up by the Hague Convention heard the plain packaging cigarette case which Australia won.

The proponents of international law who believe in the United Nations surely also believe in these institutions?

These provisions have been part of trade deals for decades, they allow companies that have invested abroad to protect their investment within a credible legal institution.

Mr Dettmar’s statement that ISDS “(allows) foreign corporations to sue” fails to consider Australian companies investing abroad which presumably fails to enter the isolationist mindset.

Secondly, there are two sides to investment. On outbound investment, this is the time for Australia to encourage it. The rise of the Asian middle class – expected to be $3 billion strong by 2030 is the opportunity of lifetime.

Australia now has over $500 billion in outbound foreign direct investment – much of it in very different legal systems. The fifth largest source of offshore Australian investment is China.

Encouragingly, seven per cent of our FDI now heads to ASEAN nations – a good start but it should increase if we are to supply the growing middle classes’ desire for higher end products and services.

Australian investors have used ISDS three times in recent years – where in one case, they were successful.

There is also the moral case to reflect upon in nations less wealthy than our own.

London School of Economics and Asian Development Bank research shows a link between ISDS and investment where “developing countries that sign more bilateral investment treaties receive more FDI inflows” and ISDS “is likely to promote foreign investment”.

Thirdly, governments do not give away rights in putting in place ISDS clauses. Our own experience should not be forgotten.

We have had ISDS in trade and investment agreements for decades. There has been one case against Australia on cigarette packaging which was won. Uruguay also won its case on plain packaging.

The United States has a similar record. 13 wins from 13 cases.

To put this another way, trade deals with ISDS do not give away sovereignty. Parliaments maintain the right to legislate.

The TPP I text specifically stated that each nation would maintain rights to legislate for public welfare, safety, health and environmental purposes. Inclusion of this text is simply belts and braces on an already certain case that ISDS is good for Australia.

The fact remains, no union leader can point to a case where such a law or sovereignty was compromised.

As Dartmouth trade guru Douglas Irwin wrote in Foreign Affairs last year, we have been here before:

“And despite populist claims to the contrary, the TPP’s provisions for settling disputes between investors and governments and dealing with intellectual property rights are reasonable. In the early 1990s, similar fears about such provisions in the WTO were just as exaggerated and ultimately proved baseless.”


Andrew Bragg is the author of a monograph on trade policy Fit for Service (Connor Court) 2017


Australia needs the world more than the world needs Australia

Daily Telegraph 24 January 2017

Australia needs the world more than the world needs Australia. Foreign capital underwrites our lives and therefore the nation cannot afford isolationism.

Covering our ears to ignore Trump’s seismic Christmas tax cuts and the need to secure foreign investment would be a reckless start to 2018.  

So many of today’s self-proclaimed “globalists” masquerade under this banner but are actually isolationists.  

The Australia Institute, green groups and unions dangerously advocate isolationist economic policy. They demonise foreign investment and falsely argue tax rates do not impact investment decisions, jobs and our quality of life.   

These insular groups suggest Australia alone can solve the genuine problem of global tax avoidance by conflating tax rates with multinational avoidance.

The nation’s history holds the answers for the debates of 2018.

We have tried the isolationist or closed shop approach of high tariffs, subsidised production and the lie Australia could swim against the tide by rejecting foreign investment and open markets.

The globalist approach has delivered for Australia as a capital importer. It speaks to the truths that Australia has relied on foreign investment since the First Fleet, the rules based order set down after World War II and our participation in the construction of the UN, APEC and the G-20.

The isolationists have been out talking about the evils of cutting corporate tax in the wake of Trump’s seismic company tax cuts in December. So many of Trump’s detractors have been so obsessed over his waistline and Russia, they are missing the implications of his signature legislative achievement.

Trump has cut U.S. company tax from 35 to 21 per cent virtually overnight.

Australia’s plan is to cut the 30 per cent rate for companies to 25 per cent in 2025.

Tax is a major determinant of investment decisions – the World Economic Forum ranks tax as one of the most significant decision making factors.

The Australia Institute’s advice: pretend it didn’t happen.

There are two inherently xenophobic points the Australia Institute bears in its innumerate argument that “the Australian Govt’s Trump style tax cut means less money for schools and hospitals.”

First, the general demonization of foreign investors.

Australia Institute says “the big winners from the company tax cut are tax avoiders and foreign shareholders. The benefits of the company tax cut mostly go to foreign shareholders…”

Setting aside the poor logic of “tax avoiders” getting a tax cut, the real problem with this rhetoric is the attitude towards foreign investors which built Australia.

No mention here of jobs or better lives which have resulted from the evils of foreign investment in Australia.

Here are the basic facts:

Australia has never had enough capital to develop our nation and we continue to be poor savers. That's why we have $3 trillion of foreign investment stocks in Australia and a national savings gap which has not moved over the past 35 years despite the adoption of mandatory superannuation.

To uphold our current standard of living, we need to attract more foreign investment as our tax and savings base shrinks with the ageing population. We have a small population and we are a high-cost country. Australia competes in world markets for investment and export to survive.

The more specific fact is we heavily rely upon the United States to fund our jobs and lifestyles.

Trump’s tax cuts are material to us.

The United States is Australia’s largest investor with $173.5 billion of direct investments which is 25 per cent of total direct foreign investment (FDI). 

There is also a city - country divide which the city slickers and shock jocks don’t talk about.

Often the only game in a small town is foreign investment. It might be a Tasmanian dairy or a West Australian airstrip that wouldn’t have job creating capacity without foreign cash.

Australia’s super funds with $2 trillion in assets barely invest in the bush as they are determined to have a similar low risk asset allocation – a mix of cash, bonds, global and Aussie shares.

Secondly, tax avoidance by large companies, known as base erosion and profit shifting, is no reason to ignore Trump’s tax reforms.

Some large companies have used transfer pricing schemes to avoid paying tax in some jurisdictions. This is wrong and must be fixed.

Yet the only credible approach to deal with global issues such as climate policy or tax policy is via a global agreement. Australia alone cannot solve profit shifting as it cannot solve climate change. The OECD and G20 are working on a global framework to stamp out this problem.

The deliberate conflation of the question of Australia’s company tax rate and the phenomenon of transfer pricing is a handy isolationist tactic which the nation cannot afford. 

Our largest investor has materially changed its tax system which determines the nature and level of investment, jobs and lifestyles we can expect in Australia. That is a fact we must accept as globalists before determining the next move.

Andrew Bragg is the author of a monograph on trade policy Fit for Service (Connor Court) 2017 – Twitter @ajamesbragg


Libs must learn from glorious past

The Australian 22 December 2017

Liberals have been negligent in ­recording and defending the ­contribution of the conservative and liberal tradition to advancing Australia. 

We don’t know where we’re going if we don’t know where we’ve come from.

So many old policy issues are new again.

Memory is essential when we debate the merits of higher versus lower taxes, pro­tected versus closed economies and free­dom versus more state control of our lives.

The Liberal Party has been on the right side of so much of our ­nation’s history.

As we prepare for another year canvassing policy matters such as tax, trade and the role of the state in our lives, it’s time for a refresher on two long dead prime ministers.

Monday’s mid-year economic and fiscal outlook provided $7 million to create the Menzies Library within the University of Melbourne — Sir Robert Menzies’ alma mater.

It marks a permanent marker for Australia’s longest serving prime minister, just as Labor ­funded a similar institution for Gough Whitlam in 2012.

Menzies has had a welcome ­revival of late. At a re-enactment of the “forgotten people” radio ­address this year, Tony Abbott rightly said: “Long may we ­remember Bob Menzies.”

Too few of us are aware of Menzies’ magnificent contribution to Australia.

He described his ethos in his farewell address to the Liberal Party that he created:

“As the etymology of our name ‘Liberal’ indicates, we have stood for freedom. We have realised that men and women are not just ­ciphers in a calculation but are ­individual human beings whose individual welfare and development must be the main concern of government … We have learned that the right answer is to set the individual free, to aim at equality of opportunity, to protect the individual against oppression, to create a society in which rights and duties are recognised and made effective.”

Yet Paul Keating has spent decades pouring scorn on the man. As late as last week, this newspaper ran a piece from Keating accusing Menzies of being vacuous and weak.

There are three great things Menzies did that we ought to ­remember.

First, he presided over an enormous postwar migration program that transformed Australia. Under Menzies, non-British (southern European) people ­became the dominant group of migrants in the mid-1950s as millions of New Australians arrived.

Second, Menzies opened the door to trade with Asia. Menzies’ 1957 pivot to Japan occurred just 12 years after the end of World War II. Asia was not discovered by Whitlam in 1972.

The landmark 1957 Australia-Japan Commerce Agreement was opposed by the Labor opposition as well as by the strongest lobby groups of the day, such as the Chamber of Manufactures.

Deputy opposition leader ­Arthur Calwell wrote in a newspaper article of Labor’s opposition to the deal: “Of the three parties, Labor is the only one that can be relied upon never to give way to Japanese cajolery, bluff and blackmail.”

As Japan industrialised, it ­became a major customer for our iron ore, which would become one of our largest exports. The ban on exporting iron ore was removed by the Menzies government.

Without Japan, Australia would have experienced a much greater economic shock when Britain joined the European Common Market in 1973.

He was also the education prime minister. Many new universities were created and many people made it to university because of the Menzies scholarships.

My own father grew up in a house in Frankston, outside Melbourne, where, if the eggs were dropped on the way home from the shop, there would be no eggs for the week. He won a Menzies scholarship and an education our family could not otherwise afford.

This month also marked the 50th anniversary of the death of Harold Holt — a man who has become famous for being lost at sea. Yet there was so much more to Holt.

Two things in particular should be remembered. Holt dismantled the White Australia policy. The 1966 Immigration Act changes ­established equality in Australian law. As the National Museum said, Holt’s changes delivered “the same rules and restrictions with regard to acquiring visas, and (people) were eligible to become Australian citizens after the same waiting period of five years. ­Migrants to Australia were to be selected for their skills and ability to contribute to Australian ­society, rather than their race or national affiliation.”

Holt also ushered through the 1967 referendum that removed discrimination against indigenous Australians in the Constitution.

The commitment of Menzies and Holt to civil rights and open engagement with our ­region should be better known. Certainly, their opponents have been quick to claim credit for the big strides forward.

A contemporary example serves as a warning.

Deputy Labor leader Tanya Plibersek said this week “same-sex marriage happened despite the Turnbull government, not ­because of it”. This is exactly where the history wars begin.

Members of the Turnbull government should be proud of three important contributions to delivering another significant rights reform under a Liberal government.

First, the postal survey was conceived and efficiently and credibly delivered by Mathias Cormann.

Second, the Liberals and ­Nationals ran the only separately branded party-based campaign for the Yes vote, which delivered Yes majorities in 71 of 76 Coalition seats and generated $4.15 million in earned (free) media. This campaign was launched by Malcolm Turnbull on the day before voting began.

Third, Dean Smith created and shepherded the legislation to ­deliver marriage for all.

No other party can claim to have done anything as material on marriage reform.

Long may the nation and the Liberal Party remember this and what works for Australia: openness, competitiveness and liberty for all our citizens.

Andrew Bragg is a member of the Liberal Party of Australia (NSW Division). 


Union tycoons win super war

Australian Financial Review 7 December 2017

The stalling of the proposed reforms to superannuation governance laws has exposed the brute but concealed force of union power. It has also reinforced the need for the banking royal commission to cover super.

After a decade of reports to governments of all colours arguing for independent directors on super fund boards, this was supposed to be the week the Senate would deliver the importantce governance reform.

Every listed company and prudentially regulated company must already have a majority of independent directors on their boards.

The proposed change was designed to ensure one-third of directors would represent members – not unions or banks. The result would be more transparency and fewer conflicts on boards where the interests of savers would be protected against directors seeking to advantage a union or bank.

It is the standard that every investor on the ASX Corporate Governance Council, including industry super, demands of Australian companies.

It is arguably more important in superannuation, where Australians do not choose but are compelled to pay 9.5 per cent of their salaries and wages over to super funds.

Independent directors crucial for consumers

The 2010 Cooper Review recommended it but was rejected by the government of the day. The 2014 Financial System Inquiry went further, recommending half the boards be independent.

Yet on Monday, the Turnbull government suddenly pulled the legislation.

The Senate crossbench, most notably One Nation and the Nick Xenophon Team had indicated support for these changes. Over the weekend that support suddenly and strangely evaporated.

As I have written this year, the campaign capacity of the union movement is truly incredible.

Their campaign against independent directors has been and is being waged because unions have collected over $50 million from industry super funds in the past decade.

Without reforms to stop payments of retirement savings to unions, this will reach $22 million per year in a decade.

The union campaign against reforms

Making one-third of directors independent from unions, industry associations and banks loosens the financial control of unions that which are dying elsewhere. Unions now represent only 10 per cent of the entire Australian workforce.

This latest campaign has had three elements:

The first was to flood the crossbench with threats that unions would campaign in upcoming state elections – South Australia in particular – against parties that which backed the changes.

This is a threat that would put thousands of union officials, organisers and members on the street corners to campaign against parties such as NXT. This is a problem a fledgling party doesn't need.

The second was to lean on the industry body most likely to campaign for change.

In this case, my former employer, the Financial Services Council, has been the champion of this reform for years.

In Back in 2010, as the representative body of wealth management in Australia, we knew the Cooper recommendation on directors was right. Even though it cost the FSC members and caused a lot of restructuring and pain, we implemented the Cooper recommendation through a compulsory industry standard.

FSC fought members for independent directors

The government had decided not to implement the best-practice recommendation, so we did it.

It was not tenable for every director on our members' super fund boards to be all bank or insurance company representatives. Some directors needed to be there solely for the consumer.

We believed in the standard we had implemented and the FSC proudly advocated the changes so that all superannuation members could benefit.

Sadly, the unions have found a way to muffle the FSC's and the wider industry's public advocacy during the current debate.

Why? Because wealth management is intermediated and industry funds can threaten their suppliers (insurers and asset managers and their industry bodies such as the FSC.

The threat goes something like this: "if you don't shut up or cannot get the FSC to shut up about independent directors, and you remain a member of the FSC, we will pull our business and move it to a life insurer or asset management company that is not an FSC member.'

With $500 billion in assets behind the threat, it largely worked).

A number of FSC members have encouraged the FSC to stay quiet or they would resign their membership. Equally, financial institutions have run dead in the current debate despite previous support for the reforms.

Unable to win on the merits of the argument, the unions resorted to threats. These threats worked and resulted in less public advocacy.

Royal commission right to cover super

The third element has been an advertising blitz using members' retirement savings.

Industry super spent $37 million on advertising in the past year to bolster their market position.

In addition, another $9.4 million was spent by the lobby group Industry Super Australia on advertising – predominantly on political advertising. For example, Industry Super Australia ran adverts during the AFL grand final under its own brand even though consumers can't invest in "industry super", but specific funds such as HostPlus or REST.

Many of these adverts – "Don't let bank foxes into the super hen house" – were designed to collect information from the community by harvesting data and drive peer-to-peer sharing of the anti-reform message.

Once people start sharing the message, it provides the appearance of a grassroots campaign, even through it is funded and created by unions.

The trifecta of threats to senators, infiltrating their opponents and spending millions of retirement savings to protect a union's income stream worked.

In the immediate term, it means the banking royal commission terms of reference are right to look at super.

The Hayne Commission should examine the threats and bullying that which has neutered key advocates of this reform.

Justice Hayne should also ask why it is appropriate that a single dollar – let alone $50 million in retirements savings – has been paid to unions.

Andrew Bragg is a former director of policy and global markets at the Financial Services Council (2013-2016) and was senior policy manager for superannuation (2010-2013) responsible for introducing the superannuation governance standard for the FSC. Twitter: @ajamesbragg

Pro business politics needs to get with the data program

Pro business politics needs to get with the data program

Australian Financial Review 5 December 2017 

In the past year, my career has taken me from the leadership of a major industry body to a think tank and to the role of acting federal director of the Liberal Party.

In each case, I have been staggered by the volume of money, superior tactics and ultimately greater impact of aligned interests standing against business and liberalism in support of the political left.

In this series for The Australian Financial Review, I explore the corporate campaign model which is used by a group of close fellow travellers: unions, GetUp, environmentalists and industry super.

It is an explanation of the financial, tactical, data and "on the ground" advantage enjoyed by the modern left at a time where every debate on the role of government, taxation, regulation and even free trade is contested.

Queensland Premier Annastacia Palaszczuk gets to feed meerkats during a visit to Australia Zoo on the Sunshine Coast. Reaching different vote groups with the right content at the right time is crucial. Fairfax Media

Unless the political right and business can counter and ultimately get ahead in the financial, technological and tactical campaign race, too many wrong decisions will be made, red and green-tinged governments will be elected and all Australians will be poorer.

Queensland's election result again demonstrated that data is king of campaigns. Getting it and using it is crucial to campaigning, be it for business and political parties. It helps guide organisations to use social media to target their voters, customers or people that they want to hear their messages.

It is used very effectively by the left of politics – such as anti-business groups such as Getup and environmentalists – that ran a coordinated campaign in support of Queensland Labor. They have a prescription for national decline: more tax, less development, more regulation and more big union power.

Corporate Australia's reputation problems won't go away unless it too can directly communicate with its consumers on matters of tax, regulation and development.

Opposition Leader Tim Nicholls speaks to the media during a press conference. Th right of politics needs to step beyond traditional TV campaigning to use data to present itself in new and engaging ways. Bradley Kanaris

The first two articles in this series explained how money is amassed by anti-business groups and invested in data and technology for campaigning purposes.

Any organisation wanting to have an impact should ask three questions:

  1. Who do we need to influence?
  2. What are their interests, issues and concerns?
  3. What is the best platform to directly engage with people?

Getting the data

Protesters including Greenpeace and Getup supporters, as well as those who had backed Labor, wave cut outs representing bleached coral, while a protester dressed as Pixar character Nemo "died". Amy Remeikis

Businesses, and at the very least industries looking to win a public argument or get something done, should be able to answer each question with data sources.

This is the formula used by unions, Getup, environmental groups and others which stand against enterprise and development.

Many political parties have also invested in the systems which unpack myriad data points. They're using systems such as i360, Cambridge Analytica and others.

The fact is it isn't all that hard to get good answers to each question and execute an effective campaign. Compared to television advertising or full-page newspaper adverts20 years ago, the cost of cutting through can be cheap.

To show how easy it is, i360 highlights how Republican presidential candidate Marco Rubio created a highly successful data-driven campaign for re-election to the United States Senate when he had just 139 days between announcement and election.

Campaign managers want access to algorithms which deliver highly reliable voter/customer predictability into a campaign. Data scientists have created algorithms which draw upon myriad data points which actually predict what people are likely to think about issues as they arise.

Fattening the pig

It's similar to time travel into the future: only the DeLorean from Back to the Future isn't required. All you need is money to purchase access to an algorithm or a data scientist's services.

A famous political maxim on the Liberal side is John Carrick's belief that "you can't fatten the pig on market day". It means your campaign planning takes years, not weeks.

While there is much in Carrick's statement that retains its contemporary relevance, political and business leaders must remember that Emmanuel Macron simultaneously created and fattened his pig in under two years.

The University of Pennsylvania's Richard Robert wrote of Macron's campaign:

"[Macron's party was] created less than two years ago by a young political entrepreneur with a small, efficient team, it was able to take over and even to take down large, well-established organisations, the Republicans and the Socialist Party, the very duopoly actually that had alternately held the presidency since the foundation of the Fifth Republic in 1958. The duopoly hardly realised it was being seriously challenged before it was already too late. This unexpected disruption was certainly the result of a deep understanding of digital tools."

The change demonstrated by Macron's campaign makes it worth conducting a fitness assessment of the two major local opposing interests.

To avoid confusing business policy communication with political partisanship, it should be clear that it is not the role of third-party groups to barrack for political parties.

However, it is their role to strongly back policies they support by using all available communication methods. At different times, that will mean supporting particular political party policies.

The fitness assessment

In the red corner we have the anti-business cabal of unions, Getup and co.

The blue corner has the business collective, represented by individual businesses and industry bodies.

1. Who do we need to influence?

First, it is highly likely that both sides will have at least basic polling information on the popularity of policy concepts.

Polling is more accessible than it was a decade ago – more organisations provide tracking services and it can even be done by internally using simple software.

For the purposes of this example, point one is a draw: everyone should be able to find the impressionable or moveable voter/consumers in the community.

2. What are their interests, issues and concerns?

There is currently a mismatch: the red corner reaps the benefit of their sustained investment into data and technology to complete their picture of the marketplace gained in point one.

The aggregation of data is supported by algorithms which allow unions, for instance, to tell thousands of swinging voters that the government is "giving away" money to "big corporations" through business tax cuts, for instance.

But this is also where we find that third parties have used the Holy Grail of baseline data: the electoral roll.

It is legal for political parties to access the roll. Third-party activists are not permitted access but it seems likely a number of related third parties have access to the electoral roll as a result of the close formal, financial and cultural links between unions and the Labor Party.

Earlier in the year, for example, former state secretary of NSW Labor Jamie Clements was convicted for accessing the electoral roll for personal purposes.

And then we saw the spectacle of Construction Forestry Manufacturing and Energy Union's Victorian boss John Setka state he knew who was and who wasn't on the electoral roll in a threatening rant about Australian Building & Construction Commission inspectors in Melbourne in June.

On the business side, the timidity towards both the media and politicians – as well as the fact that they are busy trying to generate returns for shareholders – mean the electoral roll is not a term that passes the lips of people in corporate life. In almost a decade working in accountancy and financial services, I've never heard the words "electoral roll".

The cultural difference between business and unions couldn't be more pronounced. One side has officials who have spent their whole professional lives campaigning and dealing with electoral roll matters whereas the other is accustomed to business-to-business transactions.

Business is never going to enjoy access to the electoral roll, so has to work harder to understand the community.

3. What is the best platform to directly engage with people?

There are two elements to this question: where to go and who is talking.

The best platform is, unsurprisingly, the platform used by people to regularly access news and information.

With seven in 10 Australians using Facebook on a daily basis, social media is now king.

However, there are a wide range of social media and traditional advertising channels that can be used to target messages directly to receptive or swinging voters.

A World Economic Forum study found 64 per cent of us search online for news more than once a day.

The "who" element takes us to the credibility of the messenger. Unions have spurned soft, cuddly consumer-facing offspring like Getup and industry super funds.

So far, business is sticking with the business-as-usual approach which hands the unions a massive campaign advantage. Unions own more brands than, say, Westpac to choose from when an issue arises.

Royal commission: banks will need to do more than just submit

In the long run, a communications agenda will only be successful if punters can see that a particular industry is valuable to them, their community and/or the country at large. It's a classic case of an alignment of interests and it is fair enough.

In July, Bankers Association CEO Anna Bligh said she fretted about the industry's reputation:

"[Banks] need to be doing everything that they can to improve their trust with the community and to be communicating that with the community."

Banks provide a great example of an industry which seems to have lost capital within the community. The strong support for a royal commission in the community is evidence of lost trust which has been chipped away by poor behaviour but also amplified by social media. The royal commission will not improve the standing of banks in the community – they will have to do much more than write submissions to Hayne.

The most recent industry reputational turnaround playbook was written by the miners.

In the mid-1990s mining's reputation was in the toilet when BHP's Ok Tedi mine had ruined the lives of 50,000 people living in Papua New Guinea's Western Province.

Fast forward to 2010 and the Rudd government's super profit tax was deeply unpopular because the industry was able to convince people that the majority of Australians felt damaging mining would weaken both Australia and Australians.

The rehabilitation of mining's reputation occurred because the community's perception was that the interests of workers, the businesses and the country were all aligned. Damaging mining would damage your jobs, your super, and the taxes Canberra gathered to pay for your hospitals. The result: the tax was deeply unpopular and scuttled.

Every industry must think about its reputation this way. It may force some tough decisions but it will be worth it in the long run.

To complement reputation repair, the birth of new entities to argue a small government agenda would be useful. But business shouldn't hold its collective breath. If I had a dollar for every time someone told me they were about to set up the right-wing Getup, I'd be a millionaire.

Andrew Bragg is former acting federal director of the Liberal Party. Views expressed here are his own. Twitter @ajamesbragg

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Marriage campaign lessons

The Australian 20 November 2017

The debate on same sex marriage is over. Australia will become the 27th nation to legalise marriage for all. We will join the Anglosphere and Catholic Spain and Argentina in clearly separating civil and religious marriage by allowing every citizen to participate in civil marriage.

In a few weeks, Parliament will pass the 21st set of amendments to Menzies’ 1961 Marriage Act.

Great institutions evolve and marriage is no different. Before we move on, there are three lessons from the campaign.

Firstly, you can win with a positive campaign. The Yes camp stuck to three pronged message of ‘families, fairness and getting it done”.

Families naturally takes the focus onto brothers, sisters, sons, daughters, friends and colleagues. 

This resonated because everyone knows someone who is gay or they are close to someone who is gay.

On fairness, the lack of recognition same sex relationships suffer was a strong point for the Yes camp.

Simple social recognition of relationships was a touchstone. Social recognition outshone denial of equal de facto and next of kin rights which marriage confers on a straight couple - the legal basis of unfairness.

Support for fair and equal recognition of relationships drew upon a “live and let live” vibe.

Proposals to call marriage between same sex couples names other than marriage such as “garriage” fell on deaf ears.

As Northern Territory Senator Nigel Scullion said at the Parliamentary launch of Liberals & Nationals for Yes in September, “you can’t have two forms of equal”.

“Getting it done” simply referred to the long time period Australians had to decide on same sex marriage. People had made up their minds. The final result of 61 per cent is largely consistent with published polls over the past few years.

Second, conflation tactics did not work. There were red herrings galore and people didn’t buy it. There was no rerun of Mediscare.

This issue was about who can and who can’t get married which is exactly what Liberal Party Federal President and our Patron Nick Greiner said in these pages in late August:

“The deliberate conflating of issues only happens when people know they cannot win an argument on its merits. Conflation should be called out for what it is, a debating device.”

The no camp tried to make it about two other things: schools and religion.

Schools was probably the least effective part of the No campaign.

While many Australians are right to be concerned about some elements of Safe Schools, there is simply no link between the nation’s marriage laws and school education.

A Yes or No vote would not improve or worsen school curriculum including Safe Schools.

The other attempted scare was that gay marriage would restrict religious beliefs of schools, churches, temples and synagogues that marriage is between a man and a woman.

This was most ineffective because almost every Australian has been to both civil and religious weddings.

Civil and religious weddings are different events held in different places with different words.

A wedding in church is not compelled to read out the monitom that “marriage, according to law in Australia, is the union of a man and a woman to the exclusion of all others, voluntarily entered into for life."

It is obviously different to a civil wedding, where for the next few weeks, those words must be read out aloud by every civil celebrant in Australia.

After the Dean Smith Bill passes in some form, solemisation and teaching of religious marriage within these institutions will continue as it does today.

No one wants to change what the church thinks about marriage. It is essential every religious institution’s view on marriage is protected.

Thirdly, proposals to change institutions should not automatically be viewed as attacks that must be resisted. This is the path to reactionary politics which would make the Coalition unelectable.

71 of 76 Coalition seats voted yes and there is not much of a country / city divide.

The strongest nine seats against change are all Labor seats – mainly in Western Sydney.

While Wentworth and Warringah seats voted 80 and 75 per cent in favour of marriage for all, 15 of 16 National seats voted Yes.

Many did so strongly – country seats in every state voted in big numbers such as Corangamite at 71 per cent, Calare with 60 per cent, Wannan 61 per cent, Grey 53 per cent, Forde 60 per cent and Canning 60 per cent.

It means as social issues arise, we conservatives should not instinctively seek to block every change.

Change which moves institutions forward should not be seen as threats to institutions.

The institution of marriage is an evolving institution which will now be stronger thanks to universal access.

Tony Abbott’s speechwriter Paul Ritchie made this point when he wrote the book on the conservative case for same sex marriage in 2016.

If only he’d written it a decade before, the long debate on marriage could have been avoided.

Stopping people from joining the conservative institution of marriage always seemed a contorted conservative position.

71 of 76 Coalition seats voting Yes shows that it was.

Andrew Bragg is national director of Liberals & Nationals for Yes.

Three prong focus on same sex marriage survey

Sydney Morning Herald 25 October 2017

I was married on November 15, 2014. Like all couples, this was the happiest day of our lives and we shared our vows of commitment and love in front of family and friends.

The only sour moment of the day was the monitum in the Marriage Act, which must be read aloud in a civil wedding. I can recite it without reference to the text: "Marriage, according to law in Australia, is the union of a man and a woman to the exclusion of all others, voluntarily entered into for life."

These words are particularly confronting because one of my groomsmen is gay. He is one of the most important people in my life. We have been through everything together.

It is deeply hurtful and unfair that we are obliged to tell people we love they are less equal under the "law in Australia".

I strongly believe in the rule of law, liberal democracy and a level playing field for every Australian.

Because of the monitum, we asked our celebrant to add that "Melanie and Andrew hope that the law changes so that everyone can be married should they wish".

This additional statement to the assembled friends and family simply expressed our view on fairness.

Spontaneous applause from the assembled followed and to be honest, I could never have dreamt that three years later that exact date – November 15, 2017 – would be the day Australia would learn the fate of a postal survey on that very change.

As we enter the closing weeks of the survey, I believe there are three things that must be done.

First, we should focus on the real issues: people's lives and equality in Australian law.

The fact is, same-sex couples do not have equivalent legal rights.

Australian Christian Lobby head Lyle Shelton's claim of equal rights already existing is simply not true when we look at de facto and next-of-kin laws.

De facto rules in each state and territory and nationally do not deliver the rights marriage automatically bestow upon a couple.

Next-of-kin arrangements are similarly not equivalent. It is much harder, or impossible, to prove a partner in a same-sex relationship can be the legal next of kin.

The second element is that the tone and tenor the debate must be respectful, even as the clock runs down.

Many people have a strong view that marriage is solely between a man and a woman. Their opinion deserves respect, even if we do not agree.

Free speech is precious and should never be muffled, no matter how much we disagree.

The conflation tactics the "no" campaign has tried on education and religion should be respectfully called out for what they are.

There is a clear difference between marriage and education policy, just as there is a difference between civil marriage and religious marriage.

Third, we should be focused on the outcomes from November 15 onwards if there is a majority for "yes".

In this scenario, the outcome we seek is to have marriage for all Australians by Christmas 2017.

A "yes" vote should not result in further endless discussion about the merits of the issue. We should be solely dedicated to executing the will of the people.

If a "yes" vote is recorded, the job of the Parliament is to extend the right of marriage to same-sex couples, which is a relatively minor legislative amendment. It would be the 21st change to the Marriage Act since 1961.

The vehicle for the change should be a private member's bill with a strong protection for religious freedom.

The bill, and any amendments, should then be considered and agreed before Parliament breaks in early December. The issues relating to this minor legislative change are well known and can be swiftly addressed.

All sorts of distractions will emerge if there is a "yes" vote, which is why the clear focus on outcomes is warranted. Until then, there is no place for complacency.

Andrew Bragg is national director of the Liberals & Nationals for Yes campaign.

What business must do to beat Getup activists on social media

In this series for The Australian Financial Review, I will explore the corporate campaign model which is used by a group of close fellow travellers: unions, GetUp, environmentalists and industry super.

It is an explanation of the financial, tactical, data and "on the ground" advantage enjoyed by the modern left at a time where every debate on the role of government, taxation, regulation and even free trade is contested.

Unless the political right and business can counter and ultimately get ahead in the financial, technological and tactical campaign race, too many wrong decisions will be made, red and green-tinged governments will be elected and all Australians will be poorer.

This article looks at the growth in assets and the focus of expenditure.

Former British MP and chick-lit author Louise Mensch said: "money gives you the power to do whatever you want to do. I like the idea of being in complete control of my life."

Australia's well organised opponents of enterprise live this credo every day.

They are relentless in using an estimated $200 million per annum more than the business lobby to further boost their campaign advantage over their business opponents and centre right political parties.

Data is king and the modern left has mastered the use of this modern magic. Data is used to drive political agendas without many people realising. Companies like Google or Facebook that collect data know more about you than you know about yourself.

The money which drives investment into campaign technology will only grow. Menzies Research Centre calculations show the gap will grow by another $100 million in the next decade to a gap of $300 million.

"Grassroots" fronts such as GetUp are small beer compared to the big two activists: industry super and environment groups.

Industry super is an unbelievable case in point. $50 million has been paid into unions from super funds over the past decade.

This is expected to grow to $22 million each year within a decade. This will not change unless Parliament enforces proper governance and competition requirements in superannuation.

As canvassed in the first piece in this series, environmental groups, undertaking naked political activity, spent over $80 million on campaigning in 2015-16.

With their deductible gift recipient status now under threat, they might get back to conservation, not politics.

What these organisations do with their money is just as important to understand. The cash is typically ploughed into direct, not indirect, communication with voters/customers.

Their use of resources to invest in relationships with consumers is the opposite orientation of industry associations representing business.

Business advocacy groups are designed to influence Canberra and the media by focusing their efforts on the big national clearing houses such as newspapers, radio and the ABC.

Almost all business advocacy is therefore indirect.

Almost all anti business advocacy is direct to consumer. For example, GetUp focuses on direct engagement with people either physically on the street or through rallies, or online through Facebook.

The anti-business brigade has thus adopted a favourite tactic of Paul Keating and John Howard – direct dialogue with voters. In the 1980s and 1990s it was talkback radio which allowed the politicians to go "over the top" of the Canberra press gallery.

Today, social media delivers the same option with better targeting thanks to data.

Business' engagement in social media is instructive. Vast resources are spent by listed entities to build up Twitter and Linkedin profiles. With some notable exceptions, the weight of social media effort has gone into business to business focus.

The trouble is their better resourced opponents are adept are going direct to consumer.

GetUp, industry super and environment groups also talk to the media but their fundamental disposition is to deal directly with consumers.

GetUp have half a million followers on Facebook. That's where you want to be if you're in the direct-to-the-punter game.

There is no more intimate communication platform than Facebook. You like "a page" such as GetUp, and they can talk to directly on your newsfeed when you're anywhere in the world with your smartphone.

It literally follows you around.

The organisation which is being "liked" is also given a treasure trove of data about the community of people that have clicked 'like'.

For political and now business campaign purposes, data is king. Facebook provides age, gender, location and potentially a bunch of other data points such as other interests to "liked" organisations.

This is incredibly valuable because it permits direct targeting of voters based on their interests and preferences as collected in real time. This is exponentially better than running a $2 million TV advert during the 6pm news which is simply a scattergun approach.

Few people realise that every time they 'like' or interact in any way with anything on Facebook, they are creating a rich footprint for advertisers.

As canvassed in Scout in February, since 2012, it has been possible to "(correlate) subjects' Facebook Likes with their OCEAN scores – a standard-bearing personality questionnaire used by psychologists – to identify an individual's gender, sexuality, political beliefs, and personality traits based only on what they had liked on Facebook."

"…with a mere ten 'likes' as input a model created (by former Cambridge University director Dr Michel Koisinski) could appraise a person's character better than an average coworker. With seventy, it could 'know' a subject better than a friend; with 150 likes, better than their parents. With 300 likes, Kosinski's machine could predict a subject's behaviour better than their partner. With even more likes it could exceed what a person thinks they know about themselves."

The upshot of this is simple: targeting of adverts on Facebook based on the rich data means there are hundreds of micro campaigns starting or taking place in Australia at any particular moment.

Simon Kuper explained the changes and capacity of Facebook in the Financial Times in June:

"Until about 2012, Facebook kept ads separate from user content and shared little user data with marketers. But then it floated on the stock market and investors demanded more ad revenue, especially from smartphones. 

"Now ads appear in the user's feed, amid media news items and updates from friends. Many users don't even realise an ad is an ad. By now, Facebook knows everything about its users (which means most inhabitants of western countries). You may be living as heterosexual but it can deduce from your tastes that you're gay."

Patrick Gorman, the man who successfully ran the Western Australia Labor election campaign in March, told a social media gathering Labor promoted one of their election policies to bring UFC – the global cage fighting competition – to Australia.

"We could target our policy on that to people based on their liking of ultimate fighting, So the Hulk or other mixed martial arts players and it didn't get to any of the rest of you in the room."

Gorman's bragging demonstrates the dividend that's accruing to organisations which have invested in Facebook.

In political terms, election campaigns are no longer just about the national (or state) message.

Trump discovered this last November. As Martin Moore of King's College Media Centre explained in the Guardian just after the election: "They [the Trump campaign] were using 40-50,000 different variants of ad every day that were continuously measuring responses and then adapting and evolving based on that response."

Trump used an organisation known as Cambridge Analytica, its CEO Alexander Nix has a message for Australian business:

"It's by understanding what individuals care about and what motivates them that campaigns can become genuine grassroots movements. Organisations will have to get better at harnessing data. This will not only empower campaigns while lowering costs; it also empowers individuals, as campaigns become more responsive and take more of a 'bottom-up' approach, rather than a 'top-down' one."

In Australian parlance, anyone who wants to win an argument will target or perish.

This is the message from Crosby Textor's Australian CEO Yaron Finkelstein who told me: " A couple of tweets and an opinion piece drafted by your PR team won't cut it". If you're not engaging directly with the community and voters about your issue, be prepared to lose the debate. Your opponents are doing it every day and in turn using them to persuade governments to move against you."

The idea of flying blind with mass TV and newspaper advertising is simply passé.

One big difference between the United States and Australia is our approach to privacy legislation. Australian privacy restrictions may make it hard to replicate the detailed data picture of voters / consumers as is possible in the United States. Nix told me:

"Individual level consumer and lifestyle data are commercially available in the United States, and are widely used for marketing and political outreach. In Europe and Australia however, legislation regarding the use of data is different. For this reason, our work outside the US often focuses on helping clients extract value from their own first party data sets before exploring to what extent third party data is available and legally permissible for use."

Translation: start collecting your own data.

The data business legally collects will be an important input into a framework that business should already have in mind.

The upshot of this is that every organisation wanting to have an impact on public opinion should apply a framework of three questions:

1. Who do we need to influence?

2. What are their interests, issues and concerns?

3. What is the best platform to engage?

The persuasion framework applies equally to business as it does to politics. Given business has been on the losing side of rational arguments on taxation, industrial relations, trade and investment, leaders should spend more time thinking about these questions.

Many leaders respond to an event rather than driving a framework. The corollary is an executive will invest in data and information technology systems without answering these fundamental questions.

Too many executives purchase solutions to other people’s problems rather than their own. Beware the salesman!

By answering the three questions above, many data inputs are required.

On point one, much of the answers will come from commissioned or public polling.

Better understanding people comes from a range of sources such as Facebook and Google buttressed by deeper market research and publicly available data. It may involve buying specialised data sets from developers of IPhone apps.

Information to answer point three comes from advertising agencies, social media and more surveys.

The range of inputs mean we are no longer talking about a simple customer relationship management or CRM system.

Once each question has been furnished with the data, we are in business and can start a targeted campaign.

Rest assured your anti business opponents are working on it now.

Original article: http://www.afr.com/opinion/columnists/what-business-needs-to-do-to-beat-getup-and-activists-on-social-media-20171003-gyttn8


The web of money & influence in left wing politics

Australian Financial Review 13 September 2017

In the past year, my career has taken me from the leadership of a major industry body to a think tank and to the role of acting federal director of the Liberal Party.

In each case, I have been staggered by the volume of money, superior tactics and ultimately greater impact of aligned interests standing against business and liberalism in support of the political left.

In this series for The Australian Financial Review, I will explore the corporate campaign model which is used by a group of close fellow travellers: unions, GetUp, environmentalists and industry super.

It is an explanation of the financial, tactical, data and "on the ground" advantage enjoyed by the modern left at a time where every debate on the role of government, taxation, regulation and even free trade is contested.

Unless the political right and business can counter and ultimately get ahead in the financial, technological and tactical campaign race, too many wrong decisions will be made, red and green-tinged governments will be elected and all Australians will be poorer.

The democratic deficit

Anyone who has watched the Wizard of Oz knows the scene where Dorothy and co are told to "pay no attention to the man behind the curtain".

The same could be said of Australian politics. This article aims to show just how money is amassed through various consumer fronts from strange and foreign sources and how legal structures such as charities – with tax-deductible status – are then used to channel those funds and run political campaigns.

The playing field is not level: $320 million supported the traditional left and $115 million was behind the traditional right in the 2015-16 financial year. That's a shortfall of $200 million. I call it Australia's "democratic deficit".

If the playing field isn't levelled, Australia risks becoming the Argentina of the 21st century: blessed with opportunity but captured by isolationists, special interest groups and quasi-socialists.

The anti-business agenda can be summed up as the following: more tax, more regulation and less free trade. The money comprising the $200 million democratic deficit is actual spending each year, not the total assets held by the organisations, which are often much greater.

The leftist web we weave

The modern left is a large grouping of coordinated bodies which carefully plan and choreograph their moves. There are four main groupings undertaking non-party but direct political activity: GetUp, environmental "charity" groups, unions and the industry superannuation lobby.

These organisations form a powerful web of interests that help finance campaigns to advance the interests of the broader political left. They help, for example, members of the Labor Party mount porous arguments for campaign finance reform such as banning foreign donations because Labor doesn't, itself, need the money. That's because a non-party political grouping has grown to do much of Labor's campaign work for it.

While much is made of banning foreign donations, this is just the latest trap to crimp funding for centre-right political parties: Such a ban wouldn't apply to GetUp, environmental groups or unions. Accordingly, I am in favour of maintaining foreign donations providing they are fully disclosed.

We also should be wary of knee-jerk campaign finance laws such as the silly property developer donation ban in NSW.

Are we really saying that under a system which delivers transparency on donations to parties we cannot trust our public officials to receive property developer donations, as opposed to any other group in society that could be the beneficiaries of government decisions?

Yet Australia allows opaque foreign sources to fund environmental groups to run political campaigns and have no idea why they are doing it. At least we know who property developers are and can guess their motivations.

The timidity of business

An equally pressing problem is that the growth in the democratic deficit is underwritten by cultural timidity among business to engage in the democratic process through donations and by being outflanked by stupid laws.

One of the great coups of recent years has been unions and Labor convincing Australia's corporate sector to create "50/50" donation policies.

This means donations from many companies are evenly split between the two major parties. It neutralises a traditional Coalition advantage which Labor retains exclusively with union campaign support. Elsewhere many businesses have simply switched off political donations.

Neutralising and switching off the taps which favour the Liberal Party has been allowed to happen without almost any resistance from business or the Liberal Party apparatus itself.

The leftist war chest

A large proportion of $320 million spent by the anti-business cabal is drawn from legal structures which are specifically designed to build cash resources for advocacy purposes.

You see the results of it when GetUp develops and sends out an advert on a particular issue advert or when conservation groups drive protest trucks through an urban electorate like Kooyong in Victoria.

Where does the money come from to fund these seemingly organic activities? Is it really from punters? Mums and Dads and cats and dogs?

Unsurprisingly, it is not. There are major organisations using questionable tactics to amass this great wealth.

According to the Australian Electoral Commission, GetUp spent $10 million last year on direct campaigning in marginal seats. The closer you get, the stranger it looks. GetUp is in fact the front of a corporate campaign model unions have created and funded for a decade. GetUp runs campaigns for its big donors. It's an AstroTurf mob – a term derived from the US to describe the practice of masking the sponsors of a message, organisation or campaign. Think the US Tea Party movement at the height of its power in 2010.

GetUp: bought and paid for by the CFMEU

There are financial links between George Soros and his Open Society lobby group, Avvaz, and GetUp. Indeed, Avvaz has sent over $200,000 to GetUp since 2014. We have no idea why.

But of course, these big donations from opaque foreign organisations are much smaller than the contributions of big unions.

Few have bothered to examine this link but the CFMEU provided GetUp with $1.1 million in a single year – 2011 – their biggest single donation.

Other unions have made contributions in excess of $10,000 such as the Australian Services Union which reared the current Australian Council of Trade Unions secretary Sally McManus, the Australian Education Union and the Public Sector Union.

Why would the CFMEU, in particular, stick over $1 million of members' money into GetUp?

The answer is they purchased GetUp's advocacy for a pro big union agenda which included opposition to reinstating the Australian Building & Construction Commission and the creation of the Registered Organisations Commission.

The objective of these proposals is to stop lawlessness and cost blowouts on building sites largely perpetrated by the CFMEU and subject militant unions to corporate governance provisions applicable to corporations.

But GetUp and co told a parliamentary committee:

"The Registered Organisations Bill may create barriers to participation in workplace democracy for many Australians. Our organisations run on volunteers and voluntary action, we are concerned that this bill increases the compliance obligations on volunteers and voluntary groups to a level that will discourage their participation entirely, undermining an important part of our democracy and undermining our rights in the workplace."

Translation: we do not think unions should be held to the same standards as companies and we like to keep our financial arrangements a secret.

Rounding on Xenophon

But the big overreach from GetUp on the policy front in the past six months arose from the Senate's passage of the business tax cut package for small and medium companies with a turnover of less than $50 million.

This was achieved with Nick Xenophon's support. The same Xenophon who had backed the restoration of the ABCC.

In the wake of Xenophon's support for the ABCC and corporate tax cuts, GetUp's Natalie O'Brien said they would be "highlighting his corporate tax sellout".

"An on-the-ground organising presence in South Australia will build the sort of electoral power that can cause the Xenophon team real pain at the ballot box," she said.

"We're going to ensure that the next time Senator Xenophon thinks about cutting a deal, he can expect a people-powered reckoning on his home turf."

Yet GetUp had previously been on the record as backing small and medium business tax cuts for the three million businesses, employing six million Australians. That made the ferocity of the attack against Xenophon particularly brazen.

We can put it down to GetUp's major donors: the CFMEU, which also happened to declare war on Xenophon in February.

The industry super lobby

Another case is the industry superannuation movement. Industry super isn't as bad as GetUp, after all their self-interest is evident. They constantly argue against reforms to super fund competition and governance laws to protect their own monopoly with $37 million of your retirement savings each year. They spend your money to get more for themselves. And because they control it all, there is no need to check with you!

Yet another case, and one of the most egregious, is environmental activists either using deductible gift recipient (DGR) status and opaque foreign money to run political campaigns. Hyper-partisan groups like the Australian Conservation Foundation and Sunrise are not legitimate public interest charities. The Menzies Research Centre has calculated that they spend $80 million on direct political campaigning every year.

When it comes to DGR status, the laws are weak. There's poor clarity on "political activity" in our electoral laws.

For example, green activist group the ACF declared just $174,000 in 2015-16 in political spending to the AEC, but their financial reports reveal expenditure of almost $13 million.

Discrepancies in legislation allow activists to campaign against business and development, subsidised by the taxpayer to the tune of $45 million in lost revenue from tax-deductible donations.

Are these really non-political activities?

A recent parliamentary inquiry headed by WA Senator Linda Reynolds documented examples of DGR status organisations undertaking naked political action:

  • Friends of the Earth passed on a deductible donation of $262,000 from Graeme Wood to the political group GetUp!
  • In August 2015, the ACF authorised a one-page advertisement against Greg Hunt. The advertisement included the logos of five other entities that are both registered environmental organisations and registered charities.
  • The ACF hired a truck to drive through Josh Frydenberg's electorate during the 2016 election displaying a banner criticising the minister for refusing to sign the ACF's pledge.
  • The Wilderness Society (Queensland) authorised campaign material during the 2015 Queensland state election urging voters to "Put the LNP last".

Sensibly there is now a Treasury consultation paper which is trying to determine whether these blatant political activities should continue to be underwritten by the taxpayer.

The bigger question is whether such organisations will shake the community's faith in charities.

As with GetUp's foreign-sourced income, the motivations behind political activity undertaken by "environmental" groups are kept secret. Even if Sam Dastyari's plan to ban foreign donations to political parties succeeded, (which he has previously accepted for party and personal purposes), it would not capture environmental groups, unions or GetUp.

Desperate to avoid disclosure

A ban on foreign donations to political parties will please the non-party political campaigners no end. We know they're worried about disclosure and we can thank Wikileaks' capturing of Hilary Clinton's campaign chairman John Podesta's emails for providing us with some idea of their worries.

One of the groups campaigning against coal and the proposed Adani mine in Queensland is the Sunrise Group. In July it worked with the Stop Adani group to organise a protest at Parliament House, which you'd think was political activity.

An email from Sunrise's John Hepburn to the Sandler Foundation which found its way to Podesta said:

" … we are seeking advice on steps we might take to avoid disclosure, challenge and limit disclosure, or to ensure that any disclosure is limited to the committee members and is not made public. I have no concerns whatsoever about our compliance with our charitable obligations but I do have concerns about the potential PR impact of disclosure of both our funding and grantees – should that eventuate."

Hepburn's attempt to maintain opaque funding for his political campaigns is simply not an option available to the political parties.

The playing field should be levelled and we shouldn't forget sunlight is the best form of disinfectant.

Read more: http://www.afr.com/opinion/columnists/andrew-bragg-on-the-web-of-money-and-influence-in-australian-leftwing-politics-20170910-gyeljc#ixzz4uOks6c56
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Publish or perish: The Fair Go

The Guardian 15 July 2017

Australia’s campaign landscape is genuinely imbalanced.

The weight of money and tactical advantage lies with a carefully coordinated bunch of groups against enterprise, development and individual freedom: unions, GetUp!, “conservation groups” and so on.

The Liberal Party launched The Fair Go, not as a silver campaign bullet, but as one element to start levelling the playing field in Australian democracy.

There has been a huge response to the launch – our opponents seem irate that we’ve added our voice to the fray. As many of these commentators don’t appear to have taken the time to read The Fair Go, I offer an overview of three elements here: one, the contemporary campaign playing field; two, our objective and approach; and three, the genesis of the name.

Firstly, the campaign playing field: our research shows around $320m was spent in the last financial year by anti-Liberal groups.

Much of the money is spent by unions, sectional interests such as union aligned-industry super or Greenpeace, GetUp! and think tanks such as the Australia Institute.

On the other hand, organisations which broadly support a Liberal / enterprise agenda spent just $120m. It is a major imbalance in Australian politics akin to a $200m democratic deficit.

It is unlikely that the Liberal Party and fellow travellers will ever amass the assets and money controlled by big unions alone. A nimble but comprehensive response is therefore required.

Any student of disruption during the past decade knows that waiting for your Kodak moment doesn’t work. New things must be tried.

Accordingly, The Fair Go is simply a publishing arm which should be supported by a broader agenda for modernisation including:

         Vigilance, to stop the march through the institutions; a salient example is the appointment of GetUp! to the Press Council Board

         Law reform to deliver more transparency, better governance and a level playing field in unions and groups undertaking “political activity” under electoral law

         Culturally encouraging and protecting people and organisations to speak out against union thuggery as the Small Business Council and Master Builders have proposed

         Ensuring the Liberal Party is match-fit to fight elections in the digital age

         Supporting the development of organisations to balance the playing field (The Fair Go and others).

Secondly, our objective is simply to provide a clearinghouse for liberal and conservative viewpoints on a range of social and economic issues.

We have adopted the motto: publish or perish.

This is not to supplant the role of the traditional media but to recognise that people gather information in differing ways.

We are responding to the same factors which have led to creation of online newspapers such as The Guardian and the same disruption which threatens a number of traditional media outlets.

Ideally it will reach beyond the existing cohort of fellow travellers to speak to undecided and swing voters by arming supporters with bottom-up perspectives on public policy issues.

Our approach is entirely transparent. The site clearly states the Liberal Party is powering the Fair Go and material is accompanied by a political authorisation.

While it is very clear the Liberal Party is driving The Fair Go, the same cannot be said for GetUp!, which claims to be a grassroots organisation when it is predominantly funded by big players.

GetUp!’s advocacy against the Australian Building & Construction Commission and new mines in Queensland is evidence of a supposed “people’s movement” working against the interests of the hardworking Australians.

Menzies would have regarded many workers in sectors servicing construction or mining industries for example as his “forgotten people”.

Thirdly, the name refers to a core idea of Robert Menzies – a fair go for all.

Menzies regularly talked about fairness and justice. It was part of his worldview. He said in 1960 that peace came from “peoples of the world that they live in a state of justice, that they have, each of them, a fair deal”.

Another Menzies quote from 1964 explains his theory of success: “We have greatly aided social justice. We have not just kept the right and allowed victory to go to the strong … we have shown that industrial progress is not to be based upon the poverty or despair of those who cannot compete”.

Fairness remains a critical lens with the powerful, such as union bosses, now masquerading as the weak, thus silencing the genuinely weak. There is in fact, just as in Menzies’ time, a class of “forgotten people”.