Författare: Michelle Grattan Professorial Fellow University of Canberra

In the free-for-all between the Australian government and Big Tech boss Elon Musk this week, the government had to be on a winner.

Most people would have little sympathy with Musk’s vociferous opposition to being told to take down from X (previously Twitter) the video of the stabbing of bishop Mar Mari Emmanuel at a Sydney Assyrian church.

Admittedly the matter isn’t clear cut, and the bishop himself has now said he wasn’t opposed to the video being on the platform, citing freedom of speech and freedom of religion.

But in this case public interest in removing (partially – it can still be found) the depiction of a violent alleged crime trumps arguments about censorship.

The alleged attack, over which a 16-year-old boy has been charged, fell within the definition of a terrorist act. The video’s suppression is justified to try to reduce the risk of further violence – the stabbing had been followed by a riot – including copycat attacks.

This point was reinforced when this week counter terrorism police raided Sydney houses and arrested minors with alleged connections to the boy. Five were later charged with terrorism-related offences. Police had been keeping watch on the youths but decided they “posed an unacceptable risk to the people of NSW, and our current purely investigative strategies could not adequately ensure public safety”.

The fight between Musk and the government is in court. But in the court of public opinion, Anthony Albanese’s rejection of the up-yours attitude of the man he labels an arrogant egotistical billionaire is Likely to resonate with many Australians.

This isn’t just, or even mainly, because of the video incident. It’s that so many people are increasingly alarmed about the harm social media is doing. For all its pluses, its destructive aspects are becoming more and more threatening, and frustration at the (often ugly) muscle of the tech companies is growing.

Leave aside the way these platforms have debased political debate, with many users losing all inhibitions as they lash out, not to mention trolling and the like.

Go to the issue of domestic violence, which Attorney-General Mark Dreyfus described the other day as an “epidemic”. It has multiple roots, but there’s little doubt appalling material on parts of the internet is a contributor.

Some parents despair about how addiction to social media can capture their children as strongly as addition to hard drugs. Young kids access degrading porn. Susceptible teens have their mental health destabilised. Parents are told to monitor their children’s use of social media, but that often proves impossible.

Tech companies see themselves as free markets for communications. But dysfunctional markets require regulation, or effective self-regulation.

Ways to do this may not be easy or obvious. But you get the impression Big Tech is on notice and the pressure will only become greater. Big Tech needs to win a social licence, something it often fails to comprehend.

Another battle the Albanese government has been waging is over the decision of Meta (which owns Facebook and Instagram) to stop paying for news content harvested from other sites.

The former government, under Treasurer Josh Frydenberg, struck a deal for platforms to pay for content they obtained from other media, the proceeds of which went back into journalism. With the deal expiring, Meta has walked away from the arrangement, and Facebook has just closed its news tab in Australia although it still has news in its feed. It says this is part of its general step back from news. The implied threat is to stop carrying news in Australia – a course Meta has followed in Canada.

The money involved is peanuts, while the implications for an Australian community where so many young people access their news through these platforms, rather than in the legacy media (TV, newspapers, radio), are significant.

On yet another front, this week the chief of ASIO Mike Burgess and the Australian Federal Police Commissioner Reece Kershaw appeared jointly at the National Press Club with a plea for more cooperation from the tech companies, especially in dealing with the challenges the expansions of end-to-end encryption poses for intelligence gathering and law enforcement.

Burgess said he wasn’t asking the government for more powers. “I am asking the tech companies to do more. I’m asking them to give effect to our existing powers and to uphold existing laws.

”Without their help in very limited and strictly controlled circumstances, encryption is unaccountable. In effect, unaccountable encryption is like building a safe room for terrorists and spies, a secure place where they can plot and plan.”

Kershaw said: “Some of our children and other vulnerable people are being bewitched online by a cauldron of extremist poison on the open and dark web.

”That’s one serious problem. The other is that the very nature of social media allows that extremist poison to spray across the globe almost instantaneously.

”We can look at it another way. Social media companies are refusing to snuff out the social combustion on their platforms. Instead of putting out the embers that start on their platforms, their indifference and defiance is pouring accelerant on the flames.”

Opposition communications spokesman David Coleman is urging a minimum age (say 16), with age verification, for access to social media. While this would see pushback from young people and difficulties in enforcement, Coleman points to legal obligations related to age in both the United Kingdom and Florida. He concedes no online regulation is perfect but argues it would be far better than the current situation.

Coleman says the eSafety Commissioner recommended a trial of “age assurance” technology, which could include social media in its scope. “The fact that kids are seeing this horrendous, violent material on social media is just completely unacceptable. We wouldn’t accept it if it was TV. We wouldn’t accept it if it was movies, we wouldn’t let ten-year-olds access this sort of material. And yet on social media, it happens every single day,” he said on radio this week.

The debate over social media has brought back into the frame the government’s proposed legislation to crack down on “misinformation” and “disinformation”. An exposure draft it earlier released has been on the backburner, with more consultations after a broad backlash on freedome-of-speech grounds.

The government hopes the fuelling of concern about social media by recent events will help muster support for whatever new version of this legislation it produces. But while there is overlap, the misinformation/disinformation debate should be treated separately. It involves core free speech issues, and the balance of risks is different from the harms caused by the worst aspects of social media. It is dangerous territory and should be approached very warily. Läs mer…

With Jim Chalmers’s third budget on May 14, Australians will be looking for some more cost-of-living relief – beyond the tax cuts – although they have been warned extra measures will be modest.

As this week’s consumer price index showed, the battle with inflation has not yet been won. The government can’t afford to have an over-generous budget add to inflation and further delay a pre-election reduction in interest rates.

In this podcast, we’re joined by independent economist Chris Richardson to discuss the budget and Australia’s economic outlook.

Richardson say while the growth figure will be downgraded in the budget, not all is bad,

It will be downgraded, for the year just finishing, for the financial year just soon to start. It is tough times. To be fair, the Australian economy is growing. There hasn’t been a recession. There hasn’t been some of the problems that people expected.

On inflation, however, he says the new figures paint a much bleaker picture,

They are ugly. So, in the last three months, prices grew by 1%. Over the last year, they grew by a bit more than 3.5%. And yes, it’s falling. It’s not falling as fast as the Reserve Bank had predicted. There’d been hopes from some people that there might be an interest rate cut sooner rather than later.

But those numbers today, I tell you: absolutely, you are not getting a rate cut in Australia until the end of this calendar year at best.

Like many other economists, Richardson is critical of Anthony Albanese’s Future Made in Australia interventionist industry policy. He says while there’s some potential benefit, the government doesn’t seem to be focused on the right areas,

You look at something like solar panels, and throwing money at that is just spectacularly dumb. That is just a waste of money. It’s the equivalent of asking taxpayers to smoke $100 notes. And I do worry that bits of the new industry policy are a little bit more around having announcements in some key marginal seats in Queensland, for example, then they are around good policy. Läs mer…

ASIO is investigating a number of Australians in a nationalist and racist extremist network who are using an encrypted chat platform to communicate with offshore extremists.

In a Wednesday speech to the National Press Club, ASIO chief Mike Burgess will say technology companies should do more to work with security agencies to ensure access to encrypted messages, where that access is lawful.

Burgess stresses in his speech, extracts of which have been released ahead of delivery, that he is not asking for new laws, powers or resources, or wanting a cessation of end-to-end encryption.

“I am not asking the government to do anything. I am asking the tech companies to do more. I’m asking them to give effect to our existing powers and to uphold existing laws.

”Without their help in very limited and strictly controlled
circumstances, encryption is unaccountable. In effect, unaccountable encryption is like building a safe room for terrorists and spies, a secure place where they can plot and plan.

”Imagine if there was a section of a city where violent extremists could gather with privacy and impunity. Imagine if they used this safe space to discuss terrorism and sabotage, and vilify Muslims, Jews, people of colour and the LGBTQIA+ community. And imagine if the security service and police were stopped from entering that part of town to investigate and respond.”

This is not hypothetical, Burgess says, highlighting the network ASIO is probing.

Burgess says the chatroom is encrypted. ASIO is devoting significant resources to monitor the Australians involved but is impeded in its ability to investigate.

“Having lawful and targeted access to extremist communications would be much more effective and efficient. It would give us real time visibility of their activities.”

Burgess says the technology companies are expanding their use of end-to-end encryption.

“I believe technology should not be above the rule of law […] Privacy is important but not absolute.”

“If the threat, evidence, safeguards and oversight are strong enough for us to obtain a warrant, then they should be strong enough for the companies to help us give effect to that warrant. To make encryption accountable.”

Burgess also warns AI is likely to boost foreign interference, especially disinformation and radicalisation.

“We are aware of offshore extremists already asking a commercially available AI program for advice on building weapons and attack planning,” he says.

“The internet is [already] […] the world’s most potent incubator of
extremism. AI is likely to make radicalisation easier and faster.”

Burgess’s warnings come as the government is in a fight with X’s chief Elon Musk over the eSafety Commissioner’s order X take down the footage of the stabbing of the bishop at a church in the Sydney suburb of Wakeley last week. Läs mer…

Anthony Albanese will trek the Kokoda track on Tuesday and Wednesday, before attending the Anzac Day Dawn Service at the Isurava memorial site that commemorates one of the toughest battles the Australians fought in the second world war.

The trek is a favourite with politicians, more often made as they scramble up the political ladder. Kevin Rudd and Joe Hockey famously walked together in 2006, with Hockey ever after boasting of how he fished the future PM out when he’d slipped crossing a stream.

Apart from the deep historic symbolism, Albanese’s trek involves some jungle diplomacy, part of the Prime Minister’s continuing efforts to reinforce Australia’s ties with its close northern neighbour.

Marape plans to join Albanese on the trek, and will be at Thursday’s dawn service. The two leaders will already have had a meeting before the gruelling walk starts.

Apart from the long historical, geographic and political ties between the two countries, PNG, a nation beset with economic, tribal and social problems, has become increasingly important in the battle between China and Australia for influence in the Pacific. Australia signed a security and policing agreement with PNG last year.

Chinese Foreign Minister Wang Yi was in PNG at the weekend, when, in a remark seen as a crack at Australia, he told the media that Pacific Island countries “are not the backyard of any major country”.

Wang also took a swipe at AUKUS, saying that the partnership threatened regional peace and security. “Instigating division is not in line with the urgent needs of Pacific Island countries,” he said.

Albanese has met Marape frequently and the two leaders have addressed each other’s parliament. In his address in February Marape said the bilateral security agreement reflected the focus on PNG becoming a strong, economically resilient nation.

“A strong, economically empowered Papua New Guinea means a stronger and more secure Australia and Pacific,” he said.

Ian Kemish, high commissioner in PNG from 2010-2013, who is Distinguished Adviser at the Australian National University’s National Security College, says “it’s significant Albanese is visiting for several days and is spending so much time with Marape”.

Kemish says Australia is in a stronger position in PNG than in some other parts of the Pacific, because of the very broadly-based bilateral relationship.

“It’s not all government-to-government,” he says. There are extensive economic and trading links, links through development aid, and cultural links. (On the sports front, the federal government strongly backs PNG’s bid become a National Rugby League team 2027, on which talks continue.)

Kemish says China has had “a few runs at Papua New Guinea”, but these have amounted to very little at the political or strategic level.

But China has moved in significantly at the commercial level, in construction including building roads and bridges.

“While there is not a lot of vulnerability [to China] at the national political level, there are opportunities for China at the provincial level, where it can do economic and resource deals and convert them into strategic opportunity over time – for example if China engaged with a frustrated Bougainville. The regions are frustrated with the centre,” Kemish says.

The Kokoda campaign ran from July to November 1942, and involved some 56,000 Australians, of whom about 625 wre killed and more than 1600 wounded along the track.

Albanese said at the weekend: “The Kakoda campaign and the Kokoda track form part of our national identity, a defining chapter in the story of those who risked and lost their lives in defence of Australia and in our shared history with Papua New Guinea.

”Kokoda is a name that lives in Australian legend. It captures the spirit of courage, endurance, mateship and sacrifice forged between Australia and Papua New Guinea during world war two.

”Participating in this walk is a solemn way to honour, to reflect on the sacrifices made by those who walked this same ground, people from Papua New Guinea and Australia, serving and sacrificing together in defence of their home.”

The trip will yield plenty of pictures but probably none so striking as when in 1992, PM Paul Keating fell to his knees and kissed the ground at the Kokoda Monument. As Don Watson, historian and Keating’s speechwriter, later wrote, “Even by Keating’s standards it was a remarkable act”. Läs mer…

When ASIO boss Mike Burgess delivered his annual threat assessment earlier this year, he stressed the rising danger posed by espionage and foreign interference.

“In 2024, threats to our way of life have surpassed terrorism as Australia’s principal security concern,” he said.

But ASIO also remained concerned about “lone actors” – individuals or small groups under the radar of authorities with the potential to “use readily available weapons to carry out an act of terrorism”.

It was a concern “across the spectrum of motivations – religious and ideological”.

With minor variations, Burgess might have been describing what allegedly happened at Sydney’s Wakeley Assyrian Orthodox Church on Monday night, where Bishop Mar Mari Emmanuel was attacked with a very “readily available weapon” – a knife.

Monday’s incident would have set off shock waves in ordinary times, especially given it was followed by an ugly riot as angry locals converged on the scene, trying to get at the alleged perpetrator, a 16-year-old boy.

In this case, the fear the attack triggered was dramatically heightened by context.

Tensions, especially in western Sydney, are much elevated because of the Middle East conflict. And the Wakeley attack came just two days after the Bondi shopping centre stabbings, which killed six people. While that atrocity did not fall under the definition of “terrorism”, inevitably the two incidents were conflated by an alarmed public.

The mix, further stirred by incendiary social media, increases the difficulty of keeping a sense of proportion about the church incident, which isn’t the first instance of a terrorist act in Australia and presumably won’t be the last.

We don’t know the background of the attack on the bishop. We do know that the wider pressures on our social cohesion – including dramatic rises in antisemitism and Islamophobia – are deeply troubling. Australia’s multiculturalism is enduring unprecedented strains, with all the difficulties that brings for political and community leaders.

When there are security crises, terror-related or not, the default call is, not surprisingly, for authorities to DO SOMETHING. More police (or security guards). Greater law enforcement powers. Tougher penalties. New controls on social media. (After the church incident, the eSafety commissioner ordered tech companies to take down images of the attack. These were widely available, because the church service had been live-streamed.)

Sometimes calls for action may be warranted, but often they’re little more than a knee-jerk response – and can open other debates (for example, over the justification for censoring certain images but not others).

The challenge for political leaders is not just dealing with the immediate increasing threats to cohesion, but with longer term policy.

Prime Minister Anthony Albanese recently flagged, when he met a Jewish youth group, that the government planned to appoint an envoy against antisemitism (a post existing in other countries) and a matching envoy against Islamophobia. There’s no timetable for these appointments.

Looking to the future, what’s unclear, given the present tensions, is the likely trajectory of Australia’s multiculturalism.

Will the strains worsen, seriously fracturing the society? Or will they ameliorate in the years to come? Multiculturalism is likely in transition, but what will be its pathway? And what are the political implications?

Labor is particularly worried about the erosion of its support among Muslim voters in western Sydney seats.

The cat was belled on the suburban multicultural vote in 2022, ironically not by a Muslim candidate but a Christian of Vietnamese heritage. Dai Le, whose family fled the Vietnam war, seized the previously safe Labor seat of Fowler in Sydney’s outer south-west.

It remains to be seen whether this is a one-off, or if more strong independent candidates will start to emerge as people from multicultural communities fight for a bigger direct presence in politics, or to exert more influence through strategic voting.

A recently-registered group called Muslim Votes Matter styles itself as “shaping our future through informed voting and collective influence”. It says on its website, “There are over 20 seats where the Muslim community collectively has the potential deciding vote”.

Kos Samaras, from the Redbridge Group, a political consultancy, says “the fire” has been raging for some years in multicultural communities in areas such as north-western Melbourne and western Sydney. The Israel-Hamas war has obviously fuelled it.

Samaras says the Muslim political alienation from the major parties has been strongest among members of the those communities who were born in Australia – people in their 20s, 30s and 40s.

This week, after the church attack, NSW premier Chris Minns called in faith leaders. But it is a moot point whether this consultation with predominantly older people reaches the younger, more alienated generation.

Young Australian Muslims grew up in a post-September 11 world, Samaras says, with a sense of being outsiders in the country. We saw this feeling during the pandemic, in the complaints about the different treatment of people in Sydney’s eastern and western suburbs.

Notably, Muslim community leader Jamal Rifi, speaking this week to Sky on behalf of the 16-year-old’s family, referenced the fact the Bondi killings were not labelled “terrorism” by the authorities while the church incident was. “I understand there is a difference between the two but unfortunately the overwhelming feeling in the community [is] that it is, you know, Tale of Two Cities,” he said.

Andrew Jakubowicz, emeritus professor of sociology at the University of Technology Sydney, highlights the three separate elements of multiculturalism. These are

“Settlement policy, which deals with arrival, survival and orientation, and the emergence of bonding within the group and finding employment, housing and education
”Multicultural policy, which ensures that institutions in society identify and respond to needs over the life course and in changing life circumstances, and
”Community Relations policy, which includes building skills in intercultural relations, engagement with the power hierarchies of society and the inclusion of diversity into the fabric of decision-making in society – from politics to education to health to the arts.”

Australia has been fairly good at the first, not so good on the second and “very poor” on the third, he says.

The Albanese government last year commissioned an independent review of the present multicultural framework. The report has recommendations for the short, medium and long terms. It envisages changes to institutions as well as policies and at federal and state levels.

Although the review is not due for release until mid-year, the May budget is likely to see some initiatives.

But there are differences between ministers about how far and how fast reform should go. A febrile combination of local and international factors is making crafting a multicultural policy for the next decade a much more sensitive operation than might have been envisaged when the review was launched. Läs mer…

After the stabbing of Bishop Mar Mari Emmanuel in an Assyrian Orthodox Church in Wakeley on Monday, and the killings in Bondi Junction shopping centre just two days earlier, many people in Sydney and in Australia more widely are tense.

With constant protests against Israel’s actions in Gaza and fears about a wider Middle East conflict, social harmony among religions and cultures in Australia is straining.

Dai Le is the independent member for the seat of Fowler, where the church incident took place. Hers is one of the most diverse electorates in the country.

On how the local community is feeling, Dai Le stresses:

The community is currently feeling on edge and there is tension in the community, since the attack.

As you can appreciate, people are on tenterhooks at the moment […] This just follows on from the Bondi killings that happened as well. So it’s just one day after another.

Talking about the alleged attacker, who is a teenager, she highlights some of the struggles facing young people:

Our young people are often very much feeling cut off from society. And I think that they are struggling with mental health issues. They’re struggling with the cost of living. They’re struggling with finding their identity and where they belong in today’s society, where it’s so fast paced, where there’s lots of expectations.

I can’t speak around this young man because I don’t know much about his history.

I do know is that young people need a lot of support, and need a lot to feel that they belong, that they are valued. And how do we do that? What can we create to make sure that they are valued members of our community?

Dai Le still remains hopeful and proud of Australia’s role as a multicultural society:

I still believe, though, that we are still a wonderful multicultural community. I believe that we have that great uniqueness. And Australia has always been welcoming, and I hope that Australia will continue to maintain our wonderful cohesiveness and harmony. If everybody, all the leaders, we work together to ensure the message is out there, that people are welcomed, that people have the right to practice their faith, that people feel that they belong in the community.

Finally, on her hopes for the budget, Dai Le focuses on the kitchen table issues:

I’ve asked the Prime Minister before to extend that excise fuel tax cut, because that will obviously bring down the petrol prices, which is above $2.10 and sometimes up to $2.50, for people because our community travels a lot for work. The grocery food prices that is kind of really just beyond anybody’s imagination how much it costs nowadays to do your grocery shopping. Läs mer…

Two major critical minerals projects in Queensland and South Australia are to receive hundreds of millions of dollars in federal government loans as part of the Albanese government’s new Future Made in Australia policy.

New loans worth $400 million will go to the Australian company Alpha HPA to deliver Australia’s first high-purity alumina processing facility in the Queensland port city of Gladstone.

The project is expected to create about 490 jobs during construction and more than 200 when it is completed.

The company will use Australian-owned intellectual property and technologies to produce high purity alumina, which is a critical mineral used in LED lighting, semiconductors, lithium-ion batteries and other high- tech applications.

The loans will be provided by Export Finance Australia through the government’s $4 billion Critical Minerals Facility and Northern Australia Infrastructure Facility.

The government is also lending $185 million to Renascor Resources to fast track the first stage of its South Australian Siviour Graphite Project at Arno Bay on South Australia’s Eyre Peninsular.

An earlier loan for the project was approved in February 2022.

Stage One will deliver about 150 construction jobs and 125 ongoing jobs when the project is operational. Stage Two is expected to involve another 225 construction jobs and more than 120 jobs operational once operating in Bolivar near Port Adelaide.

Renascor Resources will deliver purified graphite for lithium-ion batteries needed for electric vehicles and renewable technologies.

Prime Minister Anthony Albanese said the two projects would help bring “good and secure jobs in manufacturing, and clean, reliable energy”.

Resources Minister Madeleine King said Australia’s critical minerals and rare earths were “key to building renewable technologies such as solar panels, batteries and wind farms, as well as defence and medical technologies”.

Read more:
Anthony Albanese puts interventionist industry policy at the centre of his budget agenda

Queensland Premier Steven Miles – who faces an election this year – said the announcement by the Prime Minister showed “the confidence government and industry have in the great state of Queensland”.

Critical minerals are defined as metallic or non-metallic elements found in the earth that are both crucial for modern technologies or national security and face the risk of supply chain disruption.

Australia has identified 26 such minerals, and in Feburay added nickel to the list.

Albanese announced plans to introduce a Future Made in Australia Act last week, saying he wanted to “bring together in a comprehensive and co-ordinated way a whole package of new and existing initiatives to boost investment, create jobs and seize the opportunities of a future made in Australia”.

On Monday the government announced a Medical Science Co-investment Plan that identified priorities for government support including digital health, medical devices, innovative therapeutics and sustainability. Läs mer…

Treasurer Jim Chalmers has flagged substantial public investment, likely tax breaks and other incentives in next month’s budget to encourage industry, while stressing there won’t be a “free-for-all” of public funds.

“We’re talking about incentivising private investment rather than replacing it,” he said, as debate rages about Anthony Albanese’s announcement last week of his new interventionist policy.

Chalmers also said he will soon unveil reforms to the government’s foreign investment guidelines. These will streamline processes for some bids but make the rules tougher for others.

The May 14 budget is still expected to have a surplus. But poor growth in the Chinese economy and a tumble in the iron ore price have produced headwinds.

Chalmers told the ABC the treasury had downgraded the forecast for China’s growth.

China’s growth was expected to have “a four in front of it, for three consecutive years,” Chalmers said. That would be the slowest period of growth in China since that country began opening in the late 1970s. More figures on the Chinese economy will be out on Tuesday.

The plunge in iron ore prices has delivered a hit to the budget’s bottom line. The price has gone from more than US$130 a tonne in January to the low US$90s. According to treasury, this fall has reduced the upgrade to the nominal economy by A$35 billion and cut the upgrade to tax receipts by nearly AU$9 billion over the forward estimates.

A major reason for the price plunge has been concern about demand for steel from China.

Chalmers sought to play down criticism of the government’s industry policy from the head of the Productivity Commission, Danielle Wood, whom he appointed. Wood last week warned of the danger of support becoming entrenched and urged there be an exit strategy.

“Danielle Wood made some important points but some obvious points about making sure we get value for money. We’ve got strict frameworks, we’ve got exit strategies and off-ramps and we’re taking into consideration the impact of these plans on the economy more broadly.”

Chalmers said the policy would align Australia’s national and economic security interests. “It’s how we deliver another generation of prosperity, by making ourselves an indispensable part of the global push to net zero.

”When it comes to public and private investment, it’s really important to remember that what we’re talking about here isn’t some kind of free‑for‑all of public funds, we’re talking about incentivising private investment rather than replacing it.

”The heavy lifting will still be overwhelmingly done by the private sector but there’s an important role to play by governments and by public investment as well.

”That will still only be a sliver of the hundreds of billions of dollars that we need to land this energy transformation, to make ourselves a renewable energy superpower and to secure our place in a future which will be dominated by the net zero economy.”

Chalmers said there would be “substantial” public investment in the budget.

“But it still won’t be the biggest piece of the story here and that’s why the budget will also have a very big focus on how we attract and deploy and absorb private sector investment as well in the service of these really important national economic objectives.”

Whatever is done on tax won’t include a cut in the company tax rate, the Treasurer said.

Chalmers will visit Washington this week for a round of economic meetings. Läs mer…

Among the critics emerging to find fault with Anthony Albanese’s interventionist industry policy, the one who gave the most damaging prick to the Prime Ministerial balloon was Danielle Wood, the new head of the Productivity Commission,

Wood, former chief of the Grattan Institute, a policy think tank, made extensive comments to the Australian Financial Review and The Australian on Thursday, the day of the PM’s speech.

She said that while the government was responding to a changing world (a point stressed by Albanese), “we shouldn’t pretend … that this is going to be costless”.

“If we are supporting industries that don’t have a long-term competitive advantage, that can be an ongoing cost,” she said. It meant workers and capital were diverted from other parts of the economy.

“We risk creating a class of businesses that is reliant on government subsidies, and that can be very effective in coming back for more.” An “exit strategy” was needed, where support was stepped back from or at least reviewed.

The Productivity Commission is well known for its free market approach. In that sense, the views of its current head were not just unexceptional but the sort of thing someone in the role would likely say. The commission, there to give advice to the government, is (up to a point) independent.

But two factors made Wood’s contribution both surprising and potent. She had been appointed by Treasurer Jim Chalmers. And she was being very forthright, immediately after its launch, about what is a major government economic and political initiative.

Where it can’t manage the messages the Albanese government likes to be able to anticipate where the counter-messages will come from.

It was blindsided by the Wood critique – not least because it was before the full detail of the policy, centred on a yet-to-be-released Future Made in Australia Act, are known.

While Wood going public might have been unexpected, the substance of what she said was not. Everything she’s argued in the past would have led you to think she wouldn’t be a fan of the Albanese policy.

By her strong comments, Wood has sent a clear signal that she is determined, on occasion, to have a public voice in the economic debate. That can only be a good thing.

Former treasurer and current ALP president Wayne Swan fired off a salvo, telling morning TV Wood was “completely out of touch with the international reality”. Swan said: “We need energy independence and to do that, we’ve got to make up for a lost decade”.

Chalmers held his tongue. He and Wood get on well personally. When he does publicly respond, you can be sure he’ll be a lot more diplomatic than his old boss Swan.

Chalmers, for all that he might be uncomfortable that Wood has spoken out, will know her remarks contain some significant warnings.

With the new interventionism the government is embarking on a risky (and expensive) strategy. It will be vital the policy, when fleshed out, contains whatever safeguards can be mustered to ensure if wrong decisions on support are made, they are spotted early and there is, indeed, an “exit strategy”. One of the prime dangers in interventionism is that it become a rort for the rent seekers.

Wood’s advice is important, even if it was delivered inconveniently for the government through a megaphone. Läs mer…

Among the critics emerging to find fault with Anthony Albanese’s interventionist industry policy, the one who gave the most damaging prick to the Prime Ministerial balloon was Danielle Wood, the new head of the Productivity Commission,

Wood, former chief of the Grattan Institute, a policy think tank, made extensive comments to the Australian Financial Review and The Australian on Thursday, the day of the PM’s speech.

She said that while the government was responding to a changing world (a point stressed by Albanese), “we shouldn’t pretend … that this is going to be costless”.

“If we are supporting industries that don’t have a long-term competitive advantage, that can be an ongoing cost,” she said. It meant workers and capital were diverted from other parts of the economy.

“We risk creating a class of businesses that is reliant on government subsidies, and that can be very effective in coming back for more.” An “exit strategy” was needed, where support was stepped back from or at least reviewed.

The Productivity Commission is well known for its free market approach. In that sense, the views of its current head were not just unexceptional but the sort of thing someone in the role would likely say. The commission, there to give advice to the government, is (up to a point) independent.

But two factors made Wood’s contribution both surprising and potent. She had been appointed by Treasurer Jim Chalmers. And she was being very forthright, immediately after its launch, about what is a major government economic and political initiative.

Where it can’t manage the messages the Albanese government likes to be able to anticipate where the counter-messages will come from.

It was blindsided by the Wood critique – not least because it was before the full detail of the policy, centred on a yet-to-be-released Future Made in Australia Act, are known.

While Wood going public might have been unexpected, the substance of what she said was not. Everything she’s argued in the past would have led you to think she wouldn’t be a fan of the Albanese policy.

By her strong comments, Wood has sent a clear signal that she is determined, on occasion, to have a public voice in the economic debate. That can only be a good thing.

Former treasurer and current ALP president Wayne Swan fired off a salvo, telling morning TV Wood was “completely out of touch with the international reality”. Swan said: “We need energy independence and to do that, we’ve got to make up for a lost decade”.

Chalmers held his tongue. He and Wood get on well personally. When he does publicly respond, you can be sure he’ll be a lot more diplomatic than his old boss Swan.

Chalmers, for all that he might be uncomfortable that Wood has spoken out, will know her remarks contain some significant warnings.

With the new interventionism the government is embarking on a risky (and expensive) strategy. It will be vital the policy, when fleshed out, contains whatever safeguards can be mustered to ensure if wrong decisions on support are made, they are spotted early and there is, indeed, an “exit strategy”. One of the prime dangers in interventionism is that it become a rort for the rent seekers.

Wood’s advice is important, even if it was delivered inconveniently for the government through a megaphone. Läs mer…