Follow the Money LIVE!

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Don't be scared. - We'll just end up burning a third-rate economy in a different part of the Republic. - I want an economy that works for people, not the other way around. - Just follow the money. (audience applauding) - G'day, and welcome to our live recording of Follow the Money, the Australia Institute's podcast where we explain big economic issues in plain English. I'm Ebony Bennett, deputy director at the Australia Institute, and I want to begin by acknowledging that we're recording tonight and broadcasting from Ngunnawal and Nambri country, and pay my respects to elders past and present. Sovereignty was never ceded, and this always was and always will be Aboriginal land. So it's very exciting for us here tonight. This is the first time we've done a live recording of Follow the Money. I want to thank you all for coming out tonight. We had one of our panel members, Audrey Quick, couldn't make it 'cause she was ill, and I know COVID is definitely doing the round. So thank you all so much for coming out tonight. We're really excited about tonight's event. So basically, as you all know, we've got a new government and a new parliament, and before that new parliament begins sitting, we thought it would be good to talk about the opportunities and challenges the parliament and the labour government will be tackling across a whole range of public policy issues, international and security affairs, climate and energy, and democracy and accountability are some of the programs that we run at the Australia Institute, and there's a huge number of issues already to get stuck into there. Prime Minister, return from Europe this way. Prime Minister tours the suburban devastation of war-ravaged Ukraine. It's great to be here in Suva. Fantastic to be participating in the Pacific Island for. A stroll through the sights and sounds of her childhood, Penny Wong lived at Kotakina Balu till she was eight. So, you've done. Have you made your strike the right balance between overseas and domestic priorities? The flooding emergency in New South Wales shows no sign of abating with 45,000 people under evacuation orders. The worst flooding in seven decades. We all have enshrined a 43% carbon emissions reduction target. We need to be at much more than 50% by 2030. I want to see a target with integrity. There's some real concerns about the way that we're actually getting to whatever target we set. Because at the same time, the government appears to still be approving a significant number of gas projects, and there's a lot of coal projects in the works. The former government promised a gas-fired recovery and left us a gas-bin fire. Is there something you can do right now to ensure that my next power bill's not an absolute nightmare or trial? Drop the case against with display! Today, I have discontinued the prosecution of Mr Bernard Kaleri under Section 71 of the... Truth in political advertising. What changes are needed? The federal government has said they will look at this. As you will well know, the Albanese government has been very busy since taking office. The Prime Minister and many other ministers have been on a bit of an international charm offensive. To mend fences with allies and other countries and other relationships that have deteriorated. At home, Minister for Climate Change, Chris Bowen, has made it clear that legislating Labor's 43% emissions reduction target will be a priority in the first sitting weeks of the new parliament. The Attorney General has been busy as well, dropping the prosecution against Bernard Kaleri and announcing a review of the AAT. So we'll get stuck into that. All that and more. And on that note, I'm delighted to introduce our panel tonight. Alan Beam is head of our International and Security Affairs program. Sumitri Venkatesubramanyan is one of our Encanto fellows, our fabulous Encanto fellows. I think there's a few others in the audience here tonight working in our Climate and Energy program. And Bill Brown is the head of our Democracy and Accountability program. A round of applause for our panel tonight, please. (APPLAUSE) And I think special thanks to Sumitri, who's filling in very much at the last minute. So we very much appreciate that. Alan, I want to start with you. The Prime Minister, as I said, has been very busy internationally, as well as a lot of his ministers. He's not the only one been attending important forums and things like that. What are some of the key outcomes that people should know about from this charm offensive they've been on and the various meetings they've been to? Well, Aberdeen, charm offensive is your word, and I think it is completely accurate. Because God only knows, for the last decade or so, we've been pretty charmless. And it was about time, I think, that a government did something about our position and our image internationally. And, boy, didn't they start quickly. Penny Wong was out of the blocks very early to go to the Solomons and Fiji and try to do something about restabilising the Pacific. The Prime Minister was straight off to Japan for a meeting of the Quad. Claire O'Neill went to Sri Lanka because we'd had some refugee issues just in the lead-up to the election. Tanya Plibersek went to the Oceans Conference in Lisbon. Then Penny Wong went to Indonesia with the Prime Minister. She went then on to Malaysia and went to her hometown, which I think was a really significant thing for her to do and something which people in Asia really understand because that's what you do if you come from a hometown. You go back there. And I think the resonance of that was really immediate in Malaysia and in Singapore. Richard Miles went to Singapore, then he went to India, and he's right now in the United States. So that's a pretty active sort of first six, seven weeks for a new government, and all of it very necessary. I think the most important of those meetings, apart from the early step into the Pacific by Penny, was the Prime Minister's visit to Indonesia. I think that was an incredibly important visit. It's a country that we have neglected very seriously. And I think the Prime Minister's visit to Madrid was also a very significant visit, not least of all because of a stunning change in strategic policy on the part of the Europeans, and particularly NATO. Any of you who've had a look at NATO's new strategic concept would have been, I think, really surprised, as I was, to find that there was a paragraph dedicated to China which says that China is a threat to their interests, to their security, and to their values. And I understand that to mean that the Europeans have given recognition to the arrival of China as a global power and have recognized that global power as a threat to them. I think that's really significant, and the Prime Minister was in the midst of that. So I think that sort of, to sum it, and the Prime Minister's right now in the Pacific Islands for a meeting. So I think with all of that, it means that we have a government which is seeking to reposition Australia as a country with some significant agency that is capable of making a change of contributing to prosperity and the betterment of the conditions of the people in the world, but particularly in our part of the world. And I think, just to finally sum that up, it's a recognition that a country such as Australia, which has really very considerable power, is at last in a position to accept that it has that power and that it is prepared to exercise that power, not only to its own benefit, but to the benefit of its neighbours. We'll come back to some of those things that you've mentioned. But, Sumitri, I want to come to you next. Alan's been talking about all the international travel, and climate change was such a huge part of that, the government kind of really announcing, I guess, that, you know, there's been a change of government, and we do take climate change seriously. Australia's got a pretty poor reputation internationally when it comes to climate change. How is the new labour government going about fixing that? So, you know, if you think about Australia's international reputation on climate, you know, just think back to the end of last year at COP26, the UN climate conference, and how Australia was there spruiking fossil fuels. You know, so it's clear that there's tons of room for improvement for what Australia can do on the international front. And one thing is that, you know, Labour's bid to host a COP climate conference in the next two years that will create lots of opportunity for climate diplomacy, for collaboration, and if they're going to host it in partnership with Pacific Island nations, that's going to, you know, really reinforce that we care about these relationships, that we're taking seriously this issue that is a massive threat and of massive importance to these countries in our region. But it's not just about saying, you know, the things that we're going to do. It's also about having real policy at a domestic level and an international level to show that Australia is changing our direction and is really taking strong action on climate. You know, for example, in 2019, Australia stopped contributing to the UN's Green Climate Fund. So that's a fund which finances programs for emissions reduction and climate resilience in developing countries. So recommitting to the Green Climate Fund is a way of, you know, showing our commitment to climate action. So I think that there's lots of opportunity. And because, in a way, Australia is kind of starting from zero, right, we've got such a bad reputation. Really, there's so much that we can do. And I think there's a real opportunity here to flip it from us being in a really terrible position where everyone looks at us like we're a loser to being a leader on an international scale on climate. - Yeah, it's pretty rough to be in the company of kind of Russia and Saudi Arabia when it comes to the climate front. Bill, I'll come to you next. The Australia Institute really branded the 22 federal election as the integrity election. We've seen integrity issues really come to the fore quite a lot. But I did wanna start with the decision of the Attorney General to drop the prosecution against Bernard Caleri. That's been an ongoing and kind of shameful episode. How important is it for the Attorney General to have made that decision? And what are the implications for other whistleblowers? - Yeah, thank you. It feels like it has been a weight lifted with that prosecution coming to an end. And I hope it's not the end of the truth telling around what's happened with Timor-Leste in our relationship there. But it's not the only whistleblower prosecution that's been going on. There are cases regarding the alleged war crimes in Afghanistan, the Afghan files, as well as reports about the ATO being overzealous in its pursuit of small and medium businesses. And those prosecutions are ongoing and represent years or decades of potential imprisonment for the whistleblowers involved. The law itself, in terms of law reform, there's been promising noises from the Attorney General, Mark Dreyfuss. So he was responsible for the Public Interest Disclosure Act back in 2013. And he's been very open about its limitations, a review in 2016 went mostly neglected under the coalition government and it's been revisited by the Labor Party. The laws have been described by the courts as obtuse even to lawyers, which is not kind of the position you wanna be in if you're a public servant who's made a report internally and you're not sure now what your options are in terms of going public or going privately but outside of your organization, outside of your approved reporting process. So you can fall afoul of the laws for passing on information to a member of parliament, for example. So as much as they can to clean up those laws, as well as reconsider the other prosecutions, I think would help with this growing openness. - Yeah, it's really outrageous that they're prosecuted essentially for revealing government wrongdoing. And I know there's a lot of people in Canberra who've been very staunch supporters of both Witness K and Bernard Caleri and I'm sure this huge relief from Bernard Caleri and his team at the moment. Alan, I wanna come back to you. Part of Anthony Albanese's trip overseas was visiting the NATO summit. He also visited Ukraine. It's fair to say there's a fair bit happening over there at the moment on that front. I know you've talked a little bit about the changes in direction for NATO. Can you tell us a little bit more about those significant changes and how they impact Australia's interests? - Yes, well, the recognition of China as a global power is obviously very significant for NATO. But more significant for NATO at the moment is, of course, Russia's invasion of Ukraine. That has done something which I shouldn't have thought Putin really wanted to happen. And that was that NATO coalesced once again. It came together very, very quickly because of the implications of the attack on Ukraine. And many in the audience might remember that only three years ago, President Macron described NATO as brain dead. And Putin has managed to affect the first brain transplant in history, I think. That originally was my line, by the way. But I know that Narela used it on insiders the week before, the Sunday before last. But that's a very significant thing to happen, to strengthen the spirit and the resolve of NATO. But not only to do that, but to persuade two previously neutral countries, Sweden and Finland, that their security was better guaranteed by membership of NATO than by remaining independent. And for a country like Finland, that is a very, very big step because they share a border with Russia and they know what fighting against Russia is like because that's how, for them, the Second World War began. So the Ukraine episode has been very significant for NATO. Of course, it's been most significant for Ukraine. It is a war of very considerable destruction. It has smashed the Ukraine economy. The people are proving, for the time being, to be very resilient and to take the war right up to the Russians. Nonetheless, it looks as though it's going to settle into a rather long engagement and possibly one of quite serious attrition. And at the same time, Russia hasn't won anything. I mean, it's occupied the Donbass and the Hansk areas, but it really didn't meet the walkover that it actually thought it was going to. So the whole thing for Russia has been a disaster, I think. It has been a disaster for Ukraine, but Ukraine's not isolated. And it's allowed, I think, one final thing to happen, which is for America to restore something of the strategic credibility that had so evidently lost during the Trump presidency. So altogether, a pretty significant event. Yeah, lots to unpack there. Smithia, I want to come back to you. We've talked about what's happening internationally, but domestically, Labor's also seeing a bit of a baptism by fire here. We've got, within the first few months of them, coming to power devastating floods on the east coast of Australia, an energy crisis, a crisis in our national electricity market, although long-term listeners will know it's not a gas crisis, it's a gas export crisis, as we've talked about before. But what does this mean for Labor and how has it approached it in the early days of its government? So I think that what these crises mean is that people in Australia are living through the current impacts of policy decisions, of a lack of action on climate, of decisions that have been made on how we navigate energy policy in Australia. So this is not something that we can think about, we'll deal with this in 10 years, we'll deal with this in the future, like this is here now, we're not going to deal with it in 2050, for example. And I think that there is a real opportunity here to really rethink how we're approaching things like the energy sector in Australia. As you were mentioning, this is not an issue with supply of gas or anything, this is an issue with exports, because what's happening here is that Australia has lots of gas supply, and what we're doing is we're exporting it. Australia is the leading exporter of coal and gas in the world, and what happens is that locally, domestically, we're competing on the international market for our resources, and that drives prices up. But addressing this could, Australians could have cleaner, cheaper, more reliable energy and electricity if we transition to renewables, because right now we are subsidising our fossil fuel industry in the year 2020, 2021, in the federal budget, there were $9 billion that went to subsidising and supporting the fossil fuel industry. If we take that money, and we use that to fund a transition to renewable energy, then that will not only address this energy crisis, but also coincidentally, and really conveniently, also put us on a path where Australians don't have to worry and be living in fear of floods and fires and not knowing what the future has for us. - Yeah, because some of those communities, it's the third or fourth time they've flooded this year, a lot of them experienced bushfires in the couple of years before that, so it really is climate impacts that are here with us right now. As you said, it's not 2050. - Yeah, and I think that the Labour government has said that they want 82% of electricity in Australia to come for renewables. I think that's great. But even if we do put a lot of money and investment into growing renewables, if we're still doing the fossil fuel thing, then we're still gonna have emissions. We're not going to be stopping climate change. Having more renewables without reducing fossil fuels is not going to solve the issue of climate change. What we really need to do is to make a clear shift from fossil fuels to renewables. - Bill, coming back to you on integrity issues, we've seen a recent announcement too. I know the Australia Institute for a long time now has been pushing truth in advertising, political advertising laws. I was saying to our executive director, I have to eat my hat 'cause a couple of years ago, he told me he wanted us to start working on this issue. And I just said, yeah, all right, that'll never happen, like, and here we are with an announcement that it might do. But tell us a little bit about the history of truth in political advertising laws because it has been, I think, a long time coming. And what is the new parliament kind of looking at? What is Labour proposing to the new parliament? - So, truth in political advertising laws in Australia go back to the 1980s when South Australia, with little fanfare, just introduced them. And they kind of ticked along there from 1985 with revisions in 1995, survived Supreme Court challenges on constitutionality. So, if we go back to South Australia, they kind of set a model that other reformers have followed, which is that you have provisions for the ability to make a complaint to the electoral commissioner if you feel that a political ad is misleading and deceptive to a material extent. So, you can't just make a small error. It's got to be something that goes to the heart of the advertising. The commissioner has the ability to review, and then they can order that to be withdrawn or attracted or both. So, ad taken down, but then also you have to explain that you are misleading people. And South Australia kind of survived as an enclave doing things like that for 30 years, with pushes from time to time at the state level or the federal level as well. But, I think in recent years, the promising news is there's been this growing momentum for truth in political advertising, but part of the reason for that is because it feels like the misleading advertising has become so much more prevalent, so much harder to combat, and that's kind of necessitated this further push. So, recently in 2020, here in the ACT, we got truth in political advertising laws legislated, thanks to a Greens cross-bencher, Caroline Lakuta, but with the unanimous support, Labor, Liberal, and the Greens all voting in favour. - I'm heard of. - Yeah. That's right, and it really helps, I think, with ensuring that these laws endure, that they do have the support of all parties. They haven't been tested in a territory election yet, they came into force last year, but now we've got federal labor lending its support as well, and that reiterated by special minister of State Don Farrell last week. That probably owes as well to Zali Stegel, who's been pushing this with her own private members bill, and she's provided something of a template for how you could do it at the federal level with innovations on the South Australian model, 30 years old at this point. So, it's kind of promising, it's more promising than it has been, but it'll go to JSCAM, which is the Joint Standing Committee on Electoral Matters, before it gets legislated. It's one thing that we've found, the more that we've worked on it, I think people are always shocked that you can lie, it's perfectly legal to lie in a political ad, so good to see some movement on there. Alan, China is obviously, you've mentioned it a couple of times already. It's certainly, I think, part of the discourse around the PIF at the moment, and its lobbying efforts in the Pacific to date, but I'm also sensing, particularly from some people in the conservative side of politics, a real pushback about the idea of mending any fences with China, about picking up the phone to China, it seems to be that kind of any contact there is suspect, but I know you've been very invested in saying, we've got to invest in diplomacy, and we've seen the foreign minister, Penny Wong, meet with her counterpart on the edge of the G20. How important is that to kind of resetting that relationship, or at least defrosting it? Well, it's terribly important. The fact is China's here, there's nothing we can do about that, and it is continuing to grow. It's gonna be more here than it has been. It is interesting to think, isn't it, that in December this year, it'll be 50 years, since we recognised China and established diplomatic relations, 50 years ago, China's economy was smaller than Australia's. So in two generations, we have what is arguably the second largest, if it's not the largest economy in the world, and it's going to keep growing. So we've got to get our minds around what that means for us, what it means for us strategically, what it means for us from a national defence point of view, but also, I think, as importantly, what it means for us economically, what it means for us politically and socially. Now, we haven't done that, and the last way you tackle those problems is to go out and start barking at the moon. It just doesn't help. It might make you feel good, but it does nothing for the moon, and it does even less for anyone else who happens to be watching you. So we've had a lot of free advice from the countries of Southeast Asia about how we might more profitably conduct ourselves, and it looks as though we're beginning to listen to that advice. But you're quite right in saying that the echoes of confrontation and dissent continue. The interpretations, for example, put on what are being variously called the "for-demand" or whatever one wants to call, the items listed in the Chinese version of what happened between Foreign Minister Penny Wong and the Chinese Foreign Minister Wang. The fact of the matter is that the Chinese made no demands whatsoever. That a good translation of the communicate put out by the Chinese Embassy here in Canberra is actually quite positive. It's constructive and quite gentle in its language, and yet you would be forgiven for thinking that the Chinese have dug themselves in and that we should dig ourselves in as well. Those of you who might have seen Richard Mild's conversation with the Bloomberg team after his discussions with the Chinese Defence Minister would also have noticed a quite sort of clear move in the language of the Deputy Prime Minister. The Prime Minister has retained a fair bit of firmness in his language, he hasn't moved much, but Penny Wong certainly has. It's interesting that she's moved away from the word "normalisation" because she recognises, as I think most of us do, that we're going to head towards a new normal, not the old one, so she's using a word like "stabilisation" in the relationship. And I think just yesterday, the junior foreign minister, Pat Conroy, said in the Pacific that we're quite happy to cooperate with China in projects conducted in the Pacific so long as they make sense. So all of the signals are out there that at last a few adults have come to the table and they're making a bit of a difference. It'll take them a little while, I think, to bring the rest of the community along with them. But already, I know from my own discussions with the business community that it's high time for them to stabilise the economic relationship and they're right behind what the government has started to do. Yes, I should think there'd be a huge number of Australian producers who'd like to be very much exporting back to China again. Smithry, the new parliament has effectively a climate supermajority. Climate was a very big issue for not only Greens voters in the election of Greens in particular Brisbane, but obviously all the independent candidates who rang on strong platforms of climate action. We know that labour is going to be legislating its 43% target when parliament returns. Just walk me through what some of labour's, I guess, key climate priorities are and how we think they'll go with the target and other things as parliament begins with this new kind of push and focus and support for it within the parliament. People in Australia voted for climate, but not only do they vote for climate, they also voted for integrity. A lot of those independents who ran on a platform of climate were also calling for stronger integrity measures in Australian institutions, and I'm sure that Bill can speak very well to that. And I think that bringing those two concepts together, climate and integrity, is something that the new government has recognised as a priority for their policies. So previous Australia Institute research, as well as research by other organisations, has shown that, as an example, the Emissions Reduction Fund, which is Australia's only legislated climate policy, doesn't have integrity. And what that means is that there is the potential where we're paying industry to pollute in the name of reducing emissions. And we're funding things, I guess, false solutions like carbon capture and storage in the name of climate action. And the... But it's not actually reducing emissions. No, no. Which is where this whole idea of integrity comes in, right? Which says that if we're saying that we're reducing emissions, it actually has to happen. And part of the challenges there are that, you know, there's a lack of transparency about how decisions are made, of what methods are approved under the Emissions Reduction Fund. And the government has announced a review of the Emissions... of the Emissions Reduction Fund, of the carbon market in Australia, which is really welcome, because what it shows is that the government does not only care about climate, but it also cares about integrity, and it cares about climate integrity. And I think that that's really promising. And I think it's a great first step. And presumably, that should get support from this new parliament, as well, from the Greens and Independents as well. Can you talk a little bit about specifically that target 43%? A lot of Greens and Independents will probably be pushing for greater climate ambition. What's the discourse around that at the moment? So the target is 43% of reduced emissions over 2005 levels by 2030. So the target at the end of the day is, you know, a number that we say that we want to achieve this by this date. I think it would be really great if we go above and beyond. I'm sure that a lot of people in the audience would agree as well, that, you know, a target is sort of like the floor. It's the minimum that we want to achieve. There's nothing really stopping the government from doing much more than that. But I think what really matters is that whatever the target is, it is achieved in a way that we're actually reducing emissions to that extent. You know, those four solutions that I mentioned just now, carbon capture and storage, all of that stuff that's unproven. And we don't know that that actually does lead to emissions reduction. And so if in name, you know, we got to 80% emissions reduction, but it was all four solutions, then really it would be much better for us to have a target that we actually do achieve and that we do meet in a way that represents the strong belief in climate action that not only labor, but the Greens and independence had been running on for the election. There's probably a whole nother podcast in the coalition's approach to climate following this election. But Bill, I'll come to you next and to the AAT now I want to move to. So the Australian Institute had done some research on political appointments to the AAT. Can you tell us a little bit more about that and some of the latest announcements on what might happen there? Yeah, so the administrative appeals tribunal, the AAT, was the subject of one of the biggest studies of cronyism in appointments, perhaps in the world, certainly in Australia, by the Australian Institute, Deb Wilkinson and Liz Morrison worked on that. And what they found is a really stark increase in the share of political appointments to the AAT over time. So starting in 1996, through the Howard and Rudd and Gillard years, about 5% to 6% of appointments to the AAT were political. That goes up to 32% during the coalition government. And then within the Abbott, then Turnbull and Morrison governments, there's also an increasing trend of political appointments. So the AAT, for those not familiar with it, is responsible for merits reviews of certain government decisions. So, questions like child support, welfare payments, visas for immigration or for refugees, veterans entitlements, among many others. So administrative questions, but with the potential to be life and death decisions for you. And the kind of thing that you'd really expect for your case to be heard by someone who is absolutely independent, impartial, as well as highly qualified. You know, AAT decisions are meant to be the legally correct decision. So you really want to have legal expertise in the people who are hearing your case. And did the political appointments have lots of legal expertise, Bill? No, there was a stark difference between political appointees with legal qualifications, as well as the duration of legal experience and those without. And that was true even for senior members. So those are the ones who are supposed to be advising the rest of the membership and providing support there. And there's a stark contrast in the share who have those qualifications from the political appointees. So that report made 10 recommendations for how you could improve the appointment process, have a spill of the AAT to allow fresh appointments that are independent and comply with that process, and locking that into legislation so it can't be rolled back by future government without taking their case to the parliament first. There's been promising moves from the Attorney General. He's committed to a transparent merit-based process, which includes advertising for the positions publicly so that people can apply. And a novel. Yeah, as well as leaving the decision-making to be done by combination of a representative from the AAT, senior public servant and so on, a committee of three. He's also conducting a review of the AAT more generally. It doesn't go all the way to the recommendations in the Australia Institute's paper, which includes stricter rules about who can be appointed, as well as a particular appointment process that's laid out and, as I said, locked into legislation so it's secured, and an independent review rather than one happening through a minister. But it's a promising start, and I think suggests that they're taking this seriously. And I hope it's just the beginning. I'm afraid that's all we've got time for. Thanks very much, everyone. This episode was recorded live on Wednesday, the 13th of July, and things may have changed since recording. Can I get a round of applause for our panel, please? You can visit australianstitute.org.au for all our latest research, and we're on Twitter at the Aus Institute with an AUS. My Twitter handle is ebony_benet with a double N double T, and this episode was produced by Jennifer Macy. You can find her @JenniferMacy. Our theme music is by Jonathan McFeet from Pulse and Thrum with additional music from Blue Dot Sessions. Stay safe out there, and thanks for listening.