Who will be more embarrassed - Glenn Stevens or Craig Thomson?

Picture this. Nine days time, Friday August 26. 9.30 am, Melbourne Town Hall.

The chair of the parliament's economics committee will greet Reserve Bank governor Glenn Stevens and ask him a few questions about the economy to kick off the governor's half-yearly parliamentary grilling.

A class act right? The parliament of Australia will call the governor to account over his stewardship of the nation's finances.

The chair is Craig Thomson.

Two months ago he dropped a defamation case against Fairfax Media over articles detailing the use of his union credit card to pay for prostitutes and make cash withdrawals of more than $100,000.

The Labor Party helped him out with his and Fairfax Media's legal bills.

Background below, including his purported signature, on a credit card payment slip.

Will he still be chair of the economics committee by the then?

MP linked to prostitutes

Date: December 07 2010

Geesche Jacobsen

THE federal Labor MP Craig Thomson's mobile phone records, driver's licence details and credit card vouchers with his signature show he used a Health Services Union credit card to pay for the services of a Sydney escort agency, the Supreme Court was told yesterday.

The court was hearing legal argument in a defamation case brought by Mr Thomson, the Labor member for Dobell, against Fairfax Media, publisher of the Herald. The paper last year published allegations concerning the use of a credit card issued by Mr Thomson's then employer, the Health Services Union.

Fairfax's barrister, Sandy Dawson, told the court credit card statements for $2475 and $385 in Mr Thomson's name showed two entries in the name of Keywed Pty Ltd Restaurant in Surry Hills, on April 9, 2005 and August 16, 2007. That company name was linked to the escort agency Sydney Outcalls, he said, and it was not unusual for adult services to make the entry on financial records ''look like a culinary experience rather than a more sensual one''.

The credit card vouchers for the transactions were issued in Mr Thomson's name, were signed and noted a driver's licence number. According to subpoenaed RTA records, a licence with that number was issued to Mr Craig Robert Thomson of Bateau Bay. NSW drivers' photo licences can be used to verify a person's identification.

Mobile phone records for a number listed as Mr Thomson's on a 2006 union press release showed two calls to phone numbers associated with the escort agency, Mr Dawson told the court.

Around midnight on April 8, 2005 and on August 16, 2007 the records show a call to a number listed on the internet as belonging to the service. The records of August 15, 2007 also show calls placed in Bateau Bay in the morning as Mr Thomson had ''plainly come down the Pacific Highway down from Bateau Bay … to Sydney'', Mr Dawson said.

According to documents filed with the court, the calls were made to telephone numbers for ''Sydney Escorts - Room Service'' and ''Sydney Escort Connections'', both apparently associated with the Sydney Outcalls escort agency.

Mr Thomson has strongly denied using the credit card to pay for the services of an escort agency or other adult services. In court yesterday his barrister repeated his denials that he had signed the credit card vouchers or used ''the services in question''. ''These facts are hotly contested,'' Sue Chrysanthou said.

Mr Dawson alerted the court to the records, contained in an affidavit filed in court, when arguing Fairfax had properly sought an order for costs relating to dispute in the process of discovery for the defamation hearing.

Mr Dawson said Mr Thomson had supplied only an ''unverified list'' in which he listed no credit card documents for discovery.

But Mr Thomson's barrister responded by saying Fairfax had acted unreasonably and its original motion for discovery was ''ridiculous''. Ms Chrysanthou argued Fairfax was trying to ''bully and harass'' Mr Thomson and ''take advantage of their superior financial position and resources''.

''We never defended the motion … We just wanted the matter resolved, we just wanted the proceedings brought on,'' she said before Registrar Christopher Bradford, who reserved his decision on the application.

Mr Thomson is suing Fairfax over a series of articles dating from April 2009, claiming, according to his statement of claim, he has been defamed by suggestions he had been guilty of using his HSU credit card fraudulently and he had dishonestly used his employer's credit card to pay for the services of prostitutes.

Fairfax denies defamation and says the articles are true.

Senate Hansard

Wednesday June 15 2011

Senator RONALDSON (Victoria) (13:00): At the heart of this Gillard Labor government lies the truth that it is an illegitimate government. The government is not only illegitimate but also hopelessly divided. Only today we read how Labor backbenchers are at war with each other about policy decisions taken by their own party. It is a tale of zombies and daleks. The members—described by one of their own as 'zombies'—are generally too frightened to speak out. The factional warlords—the 'daleks', according to one past leader—are angry at their loss of power and influence. Today's media reports describe a vicious exchange in yesterday's caucus meeting between a backbencher from the New South Wales Central Coast, the member for Dobell, Mr Craig Thomson, and his New South Wales Labor colleague Senator Doug Cameron.

Paul Keating famously declared that where New South Wales Labor goes, so too goes the nation. This is indeed a troubling omen for our nation. Today I wish to discuss renewed allegations against the said Mr Thomson—all of which are on the public record. Mr Thomson's actions go to the heart of this government's legitimacy. Mr Thomson is now into his second term as a member of the House of Representatives. Nevertheless, serious concerns remain about Mr Thomson's past as a union heavy in the Health Services Union. There are serious allegations including allegations of fraud and electoral misconduct. It is time to end Labor's deafening silence concerning these very serious allegations. Put simply, it is time for the Prime Minister to show leadership. Mr Thomson is not fit to be a member of parliament and he should be stood down immediately. Of course, the Prime Minister knows this. In normal circumstances the member for Dobell would not be allowed to continue. But, in the so-called 'new paradigm' where the government has only a wafer-thin majority, the Prime Minister lacks the courage and the leadership authority to deal with the member for Dobell appropriately.

Before he entered parliament, the member for Dobell was National Secretary of the Health Services Union. His union provided him with a credit card which was to be used for union related expenditure. The member for Dobell was entrusted by the union to spend its funds appropriately—something he ultimately would not do. It is alleged that over a five-year period the member for Dobell withdrew $101,533 in cash advances from his union credit card. Further, it is alleged he used his union credit card to fund his election campaign for Dobell. Without any authorisation to do so, Mr Thomson allegedly spent over $104,000 of the HSU's money on his own election campaign. This alleged breach of trust by the member for Dobell resulted in both the HSU and Mr Thomson filing false election expenditure disclosure reports with the Australian Electoral Commission. So cavalier was the member for Dobell with his union credit card that it is alleged by Fairfax media that on at least four occasions he used the card to pay for prostitutes. Fairfax detailed those allegations, and I will not repeat them here today. Is this what the hardworking members of the HSU expect their union dues to be spent on? Is it right that the money that mums and dads gave to their union to represent them in the workplace is siphoned off for such activities? The answer is, of course, an emphatic no.

I will turn now to the HSU investigation. Ms Kathy Jackson took over as National Secretary of the Health Services Union when Mr Thomson entered parliament in 2007. She was reportedly appalled by the rorting that went on during Mr Thomson's tenure. Ms Jackson advised the union's lawyers, Slater and Gordon, to engage BDO Australia to conduct a forensic audit of the HSU national office. The member for Dobell was owed $191,913 in employee entitlements when he resigned from the HSU. However, due to the cloud that hung over his head concerning misuse of union funds, the HSU instructed its lawyers to write to Mr Thomson informing him that he would not receive his entitlements. Ms Jackson, courageously, reported the member for Dobell to Fair Work Australia for further investigation. Fair Work Australia's investigation into the member for Dobell is ongoing. Amongst other things, the investigation will determine whether his credit card expenditure breached any fiduciary duties which he owed to the union.

On the back of media allegations against him, Mr Thomson's inappropriate dealings have been raised on a number of occasions in Senate estimates with both the Australian Electoral Commission and Fair Work Australia. It has now become apparent that, despite his serious breach under the Electoral Act, Mr Thomson will avoid being charged with the serious indictable offence of providing a false declaration to the Com­mon­wealth. We have also learned that 12 people have been interviewed during the Fair Work Australia investigation and that several demands have been made for documents to be handed over. While Mr Terry Nassios of Fair Work Australia still has conduct of the day-to-day affairs of the investigation, and he believes that it would not compromise the investigation for it to be made public exactly who was interviewed, he has been overruled by the Gillard government at Senate estimates. The reason for being overruled remains unclear. Or is it? We are not allowed to know the names of the people interviewed or what they said. The investigation, we are told, will be completed in the latter half of this year. Following the investigation, Fair Work Australia will seek advice from the Director of Public Prosecutions as to whether to prosecute Mr Thomson. The matters I have raised today are not new. They were revealed exclusively by Mark Davis of the Sydney Morning Herald on 9 April 2009. At the time, the member for Dobell denied the allegations. He began defamation pro­ceedings against Fairfax. He complained to Simon Benson of the Daily Telegraph, 'Unfortunately as a politician you have to go through a legal process to prove your innocence.'

Mr Thomson's defence was that he was interstate at the time of some of the escort agency transactions. However, in interlocutory proceedings it was revealed that phone calls were made from Mr Thomson's own telephone to one of those agencies. It was also revealed that his drivers licence number matched the licence number taken down on the credit card slip when he paid for one of the escort agency services. At one point during the interlocutory proceedings, Mr Thomson was ordered to pay Fairfax's costs. On Monday, 6 June 2011, we found out that just days before a three-week jury trial was scheduled to begin Mr Thomson filed a notice of discontinuance with the Supreme Court of New South Wales. What does this mean? It means that, despite every opportunity to prove that he did not rip off his union and spend their money inappropriately on himself and his election campaign, Mr Thomson surren­dered. It shows that, despite the opportunity to prove in court, before a jury of his peers, that the serious allegations against him were false, Mr Thomson folded.

On 6 June this year, in a Sydney Morning Herald article headed, 'Labor MP drops case against Fairfax', Geesche Jacobsen wrote:

Fairfax Media, publisher of the Herald, was defending the case on the basis the allegations were true. It alleged that Mr Thomson was unfit to be a federal MP. Fairfax stands by the allegations published in the articles, which appeared from April 2009.

By filing a notice of discontinuance in his defamation proceedings against Fairfax, Mr Thomson has ensured that the allegations have now become the truth. It was reported in vex.news.com on 8 June that Mr Thomson is now alleging that Fairfax breached the terms of a confidential settlement and that he has again referred the matter to his lawyers. It is another action designed to stall the inevitable. It is another action that we know will not be followed up with completed legal proceedings.

In conclusion, this issue no longer rides on the back of the Fair Work Australia investigation or Mr Thomson's defamation proceedings, which is the subtle message being pushed by the ALP. The Prime Minister knows the truth. If she does not, then she should read the newspapers and Hansard more carefully. She must act now. These very serious allegations require her full attention. Her crumbling credibility and the diminishing authority of her government rest on her satisfactory handling of this matter. It is time for the Prime Minister to say whether or not she supports Fairfax media's statement. If she believes Mr Thomson is fit to be a member of parliament, the Prime Minister must make a clear statement explaining why. In doing so, she must publicly refute the allegations of fraud, inappropriate use of union funds for pros­titutes and syphoning of funds to support an election campaign; if not, she must immed­iately sack Mr Thomson. Mr Thomson refused to defend his credibility at trial and, as a result, the Prime Minister's credibility is now on trial.

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What'll we be left with after the boom? - RBA

Australia is more exposed to the risk of a downturn in Asia than at any time in the past two decades and our productivity growth is abysmal, meaning we will soon no longer be able to afford reasonable wage rises according to new Reserve Bank research.

Unveiled as the Bank released the minutes of its August board meeting the paper by assistant governor Philip Lowe says Australia “looks to have moved out along the risk-return frontier,” gaining far more from high commodity prices than ever before but facing a much greater risk should they wind back.

Iron ore and coal now account for one third of Australia’s total export income, up from one tenth eight years ago. Almost two thirds of Australian exports go to Asia, with Japan and China getting two-thirds of them, the paper says.

“In the decade ahead it is highly unlikely the rise in the terms of trade will be repeated. This means that if living standards are to continue to rise at the rate we have become accustomed to, productivity growth will need to pick-up significantly,” the paper warns.

Dr Lowe says productivity growth has been close to zero in recent years making current wage rises of 4 per cent per year unsustainable. Over time wages and profits can only climb as fast as productivity and the inflation target combined, which is at the moment around 3 per cent.

The minutes show board members expressed alarm at “weak” productivity growth during the August board meeting noting most of Australia’s recent income growth has been the result of higher export prices... rather than higher production per dollar and worker.

“A significant pick-up in productivity growth would be required to sustain real income growth around the rates seen in recent decades,” the minutes say. “The task facing monetary policy would become more difficult if a continuation of poor productivity growth were combined with an expectation of growth in nominal wages and profits at the same sorts of rates seen over the past two decades.”

The minutes show the board decided against lifting rates in August because of grave concern about financial market turmoil, concluding if turmoil continued household and business confidence could slip further. The decision was unanimous.

As the board meeting took place four days before the United States lost one of its top credit ratings and share markets collapsed, the minutes suggest the board is also unlikely to lift rates at its next meeting, due September 6.

The board does not believe inflation is a problem at present, despite the high headline rate of 3.6 per cent. It expects fruit prices to fall and notes that the Bureau of Statistics is about to rework the consumer price index to exclude an erratic index that has been boosting measured inflation.

But over the medium term it expects wage growth to push inflation up unless productivity improves, necessitating higher rates.

Futures traders wound back their bets on lower interest rates after reading the minutes. Market pricing late yesterday (TUES) factored in a 50 per cent chance of a double rate cut of 0.50 percentage points next month, down from 91 per cent a few days before.

Centrebet cut the payout on no change at the meeting from $1.60 per $1.00 bet to $1.32 as money swung behind the bank keeping rates on hold.

Published in today's SMH and Age


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Koukoulas - Why the RBA should cut, now

Stephen Koukoulas was until a month ago Gillard's macroeconomic advisor.

He went public over the weekend in The Drum.

He says we can't rely on fiscal policy. It'll be up to the Bank.

"In looking for the RBA to start an interest rate cutting cycle, it is hugely encouraging to see the Prime Minister Ms Gillard and Treasurer Mr Swan sticking to their guns on the objective of a budget surplus for 2012-13. A moderate cooling in economic growth will not and should not prompt fiscal stimulus measures.

Rather, the management of the business cycle should be left to the RBA. In other words, the tighter the handle on the budget, the more interest rates can and will be cut.

Another critical thing about interest rate changes from the RBA is that they don't cost any money! Unlike fiscal stimulus measures, which are costly and often difficult to wind back, the RBA can cut - and hike - interest rates by any amount and at any time without costing the budget a cent.

Of course, the automatic stabilisers in the budget should be allowed to work and they will dampen government revenue and the 2012-13 budget surplus may yet slip into a tiny deficit. Who knows. It is way too early to be sure of the parameters that will determine the budget balance next year."

HT: Christopher Joye


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Punters don't believe traders. "Rates are going up."

Money market professionals are banking on big rate cuts, but the rest of us don’t believe it.

A special question added to the latest Westpac Melbourne Institute consumer survey finds an overwhelming 73 per cent of us expect mortgage rates to climb over the coming twelve months, with 29 per cent expecting at least four hikes, pushing up mortgage rates more than one percentage point.

Four more hikes would add $200 to the monthly cost of servicing a $300,000 mortgage.

The Westpac survey finds just 11 per cent of us expect interest rate cuts, up from an even smaller 4 per cent when the question was last asked in June.

The survey found overall consumer confidence at recessionary levels with a near-record 36 per cent of those surveyed expecting worse family finances in the year ahead.

The futures market shares none of the pessimism on rates. Pricing late Friday assigned an extraordinary 87 per cent probability to a double rate cut of 0.50 points at the Reserve Bank board’s next meeting... The market is pricing in three rate cuts by October, four by November and five by February.

“Consumers can be excused for being in two minds,” said said Westpac economist Matthew Hassan. “Those picking increases look to the high inflation headline and the hawkish Reserve Bank rhetoric. Those expecting cuts point to the deteriorating domestic picture and threat from financial turmoil.”

Reserve Bank board minutes due tomorrow will be closely scanned for indications of the Bank’s thinking but they will be of limited usefulness given the financial turmoil in the fortnight since the board met.

Steven Koukoulas, until recently economic advisor to Prime Minister Gillard has pleaded with the Bank to start cutting rates in an open letter published over the weekend.

“Have a look at the following: house prices have fallen for six straight months; employment growth has stalled; retail spending has just had its weakest year in half a century and consumer confidence is at a level consistent with recession. What's more, corporate insolvencies are at the second highest on record, the stock market is weak and outside mining business confidence is in the doldrums,” he writes.

Published in today's SMH and Age

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Reopening Manus?

Here's background.

My colleague Olivia Rousset travelled to Manus Island in PNG in 2004 to report The Last Man on Manus

The transcript is below.

Click on the picture above to see what she found.

And click on the Related Posts below see what our other detention facilities do to our guests and those of us who work there.




Last Man on Manus Island

The last time Dateline sent a reporter to investigate Australia's immigration detention centre on remote Manus Island, he got as far as Port Moresby before being marched back to the airport by PNG officials. Like Nauru, Manus was clearly off limits to the media and anyone else wanting to pry into Australia's island detention system. Now, there's only one detainee left on Manus, but the Australian Government is still paying a small fortune to keep it open. The PNG Government has now allowed Olivia Rousset to visit the centre's lonely inmate.

REPORTER Olivia Rousset: I'm flying to remote Manus Island in Papua New Guinea. Along with Nauru, it's one of the two processing centres set up for asylum seekers under the Howard Government's Pacific Solution. Deliberately placed far from human rights workers, lawyers and the media, for a long time it was almost impossible for an outsider to visit here.

PNG GUIDE: This is the gate, be aware of that gun pointing at you on the right. Good morning. SBS.

PNG OFFICER: OK, we'll have to direct you down to the commander officer and we go down there and you will see him and talk to him. I will come with you.

Since September 2001, asylum seekers have been brought to the Lombrum Naval Base, where they're guarded by the PNG military at Australia's request. But now there is only one person left here, a 25-year-old Palestinian refugee from Kuwait - Aladdin Sisalem.

REPORTER: Hello, Aladdin. Olivia, nice to meet you.

Aladdin has been here for 15 months, he's been alone for the past seven. I am his second visitor in that time...

ALADDIN SISALEM: All that I can do now is remember things. Remember that some people were with me here and just to forget that I am living here alone.

Aladdin's solitary confinement has cost the Australian taxpayer about $5 million dollars so far. The detention centre can house around 1,000 asylum seekers. It has gym, a mess area, a children's playground, and even a makeshift mosque. But most of Aladdin's day is spent in his room, plotting his escape on the computer.

ALADDIN SISALEM: The Internet is the only window I can look out from this detention centre. So I spend all my day inside the room. Finding research for information, trying to find help outside, that's all that I can do here.

When Aladdin first arrived, there were about 150 people here.

ALADDIN SISALEM: They are in Auckland now. This is in Auckland as well, New Zealand.

Of all the asylum seekers brought to Manus, Aladdin was the only one to have actually made it to Australia. But he was also the only one left behind when his friends departed.

ALADDIN SISALEM: This is when the first group of New Zealand was going.

REPORTER: How did you feel when they left? Did you think that you would go soon?

ALADDIN SISALEM: I just felt happy for them. I just wished that some day I would leave like them.

The guards are discouraged from talking to the sole inmate here so his only company is a stray cat - Honey.

ALADDIN SISALEM: Hi, Honey. Give me your hand.

Aladdin's prolonged incarceration has had a heavy impact on his state of mind. He used to take five different pills daily, until the psychiatrist and the doctor left along with the rest of the asylum seekers.

ALADDIN SISALEM: I told them don't stop this medicine because they tried to stop it.

Now a guard gives him just one anti-anxiety tablet each afternoon. Even so, he's still plagued by thoughts of suicide.

ALADDIN SISALEM: I don't see the government planning for any end for my situation. Only just to maybe they want me to end it myself. And I can't. I don't have the courage to do that. And I won't do it. And I need my rights to live. And I want to live. I don't want to be forgotten here until I make my own decision. I don't want that. I can't do it.

ERIC VADARLIS, ALADDIN’S LAWYER: There is no doubt in my mind that Aladdin is really stuck between a hard place and a rock. He's not in a place of his own choosing, he came here because he believes that Australia was a free country, you know, signatory to the convention on refugees, obligated to give refuse to those people seeking asylum and unfortunately he was wrong because we're a hard-arsed country here.

Eric Vadarlis is a prominent Melbourne solicitor who's taken on Aladdin's cause. He says that in 27 years of practising law, he's never seen a case like this.

ERIC VADARLIS: He is a classic refugee. He's a classic person for whom the convention was created back in 1947. Classic. And yet, he comes here, he's stateless, he's a Palestinian, he's got no travel documents, he really can't be anywhere. I mean, he can't go to Mars, and yet they put him on Manus Island.

How Aladdin ended up on Manus Island is an extraordinary story. He was born in Kuwait but as the son of a Palestinian refugee he didn't have automatic right to residency. Unable to work legally and harassed by the police, he left three years ago after getting a tourist visa to Indonesia. When he arrived in Jakarta he applied for asylum with the United Nations High Commission for Refugees, or UNHCR. But after a year of living on the streets and no progress with his application, he set off for Papua New Guinea.

ALADDIN SISALEM: I come with the ship from Java, Indonesia...

Aladdin got a ship to Indonesian West Papua and travelled through dense jungle to the border with PNG.

ALADDIN SISALEM: This is the closest point between Indonesia and PNG and I arrive at about here.

After trekking for two weeks through the rainforest with no food, he arrived in Kiunga, Papua New Guinea. When he requested asylum he was told to walk back through the jungle to West Papua. Aladdin refused to go. He was jailed for illegal entry and says he was beaten in prison.

ALADDIN SISALEM: I spent seven months in Port Moresby trying with the immigration department...

When he was told that PNG doesn't take asylum seekers from terrorist countries, he finally decided to try his luck in Australia.

ALADDIN SISALEM: So I flew from Port Moresby to Daru Island, this one here, Daru Island, PNG, Daru island. You see the border, it is close. And this is Saibai Island, Australia's Saibai Island. It's not far from the PNG border.

A fisherman took Aladdin to Australia's Saiwai Island in the Torres Strait. At this critical moment he says he approached local immigration officers and asked for asylum. He was then flown to Thursday Island where officials in Canberra interviewed him by telephone. Aladdin thought his 2-year journey was finally over.

ALADDIN SISALEM: And in the morning they come, the immigration officers, the same ones they come and took me to the airport. I said "What's happening? Where we going?" They said "We're going to Manus Island." I said "Why?" They said "It's Australian centre, immigration centre. We'll put you there and process your case."

Aladdin waited here in the detention centre for nearly two months to hear about the processing of his case. But no-one approached him about it.

ALADDIN SISALEM: I see them come and talk to the other asylum seekers, told them about their situation but nobody tell me about my case. So I feel confused. And they told me - the immigration officer said to me - the same one who interviewed me for my asylum claim - he said to me "We don't have an asylum application for you." Now I start to understand the situation. I start to find it's getting serious.

As a signatory to the UN refugee convention, Australia is obliged to grant asylum to anyone who lands in the migration zone, if they ask for it, and are found to be a refugee. Since arriving on Manus, Aladdin has been granted refugee status by the UNHCR. So what about Australia's obligation to him, given that he sought asylum in Australian territory? The Government says he didn't ask for the right form.

ALADDIN SISALEM: I didn't want Australia to ask for tourist visa. I mean, I didn't risk my life to enter some remote Australian remote island because I want - I am economy migrant or something like this. I needed help. I went there and first thing I asked, I asked for asylum. I was interviewed. I mean, if Australian immigration does not consider me as an asylum seeker why they ask me about the harms I suffered in Kuwait and the persecution? Why they ask me about that, if they don't want to process my application for asylum?

REPORTER: Minister, can you tell me what someone's required to do once they land within the Australian migration zone to ensure that a visa application for asylum is under way?

SENATOR AMANDA VANSTONE, MINISTER FOR IMMIGRATION: Well, look, if someone wants some advice on how to make an asylum claim they should get it from the Immigration Department.

REPORTER: But if someone - if a refugee, say, lands within the migration zone of Australia, what do they need to do?

SENATOR AMANDA VANSTONE: As I say, if someone wants some advice on the legal requirements for making a claim, they can get that from the Immigration Department.

REPORTER: But if there's someone who has -

SENATOR AMANDA VANSTONE: You've asked me that twice and I've given the same answer twice. I know why you've asked me that twice and I'm going to give you the same answer every time.

ERIC VARDARLIS: There's no special way for a person to claim asylum. I mean logic helps because this guy landed on Saibai Island, in northern most part of Australia on his own and he's a Palestinian and he sought asylum. I mean he says "I sought asylum" they said "No, you didn't because you didn't fill out the form."

When Aladdin did submit a written claim for asylum he received this letter from the Department of Immigration.

DEPARTMENT OF IMMIGRATION, LETTER: Dear Mr Sisalem, Australia does not have an obligation to extend protection to a person who is outside Australia. You are currently in Papua New Guinea and have applied for asylum there. Papua New Guinea is a signatory to the UN convention relating to the status of refugees.

ERIC VADARLIS: When this hit my desk the first time around I looked at it and I thought somebody must have ticked the wrong box for this man to be in the position he's in today. I thought it was a simple misunderstanding that it would be sorted out fairly quickly.

Eric Vadarlis will be representing Aladdin in a Federal Court case next month, attempting to prove Aladdin is Australia's responsibility.

ERIC VADARLIS: I think we need to go back a step and work out how Aladdin got there. Aladdin didn't get there because he bought a ticket to Manus Island. He was taken there by the Australian Government, specifically taken and dumped there. Now whose problem is he? So, you know, is the Australian Government into the slave trade? Do they pick people up and just take them off to Manus Island and drop them there and say they are someone else's problem?

In fact this is precisely what the Minister for Immigration and Multicultural Affairs claims.

SENATOR AMANDA VANSTONE: Well, you've asked me this a couple of times, I've indicated to you Mr Sisalem is not the responsibility of the Australian Government.

REPORTER: It just doesn't seem very clear that the PNG Government says that as far as they're concerned the detention centre is Australian property, it's virtually Australia. You've got a guy who entered the migration zone here and was flown by Australian authorities to Manus Island detention centre where he's being looked after by people who are paid by the Australian Government, how can he not be Australia's responsibility?

SENATOR AMANDA VANSTONE: Well, as I've indicated to you he's not the Australian Government's responsibility. I understand that's agreed. I'm not privy...

With Aladdin's court case pending, Immigration Minister Amanda Vanstone refuses to discuss his case in detail. While Aladdin sits alone, the locals enjoy a Sunday soccer match just outside the fence of the detention centre. As no-one can visit him, they know nothing about him.

GIRL (Translation): We've heard that he's married to a Papua New Guinean woman so he comes out, he walks around...

In fact, Aladdin hasn't left the centre since early February when he was taken out for a couple of hours escorted by guards. He no longer wants to go outside, he's afraid that Australia is pressuring PNG to give him asylum and based on prior experiences, he's terrified he'll be killed.

ERIC VADARLIS: I think Aladdin is very scared at the moment. He really doesn't know what's going on. It's all a bit beyond him. And frankly I don't blame him. He's been imprisoned by the PNG system, so really he wouldn't have very much faith in the process and I don't blame him.

Aladdin says the manager of the camp knows he's in danger.

ALADDIN SISALEM: He told me, he agreed with me that if I left PNG authorities my body would be in the jungle and he said "That's why I don't want you out of here." But he's still pushing me to get out.

The Papua New Guinean Foreign Minister Sir Rabbie Namaliu wants to close the gates when the lease comes up at the end of this year.

SIR RABBIE NAMALIU, PNG FOREIGN MINISTER: Well, our feeling is that the detention centre has probably served its purpose. There's only one soul left at the centre, and if that is going to be the case, we feel there is no point in continuing with the centre.

For the time being, Australia is happy to keep the camp open with Aladdin as its sole occupant, at a cost of $23,000 a day.

ALADDIN SISALEM: There is not any reason to keep me on my own here, OK. What between them and Australia and the PNG government, this is their own business, their own work. Myself, I need my right for freedom and safety.

ERIC VADARLIS: The way things look he's going to be there forever, in a sort of Gilligan Island's scenario. We're just going to sit out and wait. So there's a human being involved and he ought to be processed in accordance with the law and promptly.

REPORTER: There's someone who for seven months has been alone and has only had two visitors in that time and is slowly going mad from that experience. Do you feel sorry for him as a genuine refugee who's tried for two years to get asylum in Indonesia, then Papua New Guinea and then Australia and has found himself sort of in this detention centre all on his own not knowing what's going on?

SENATOR AMANDA VANSTONE: With respect, I might have some different information from that which you have and no, I cannot say that I have any sorry for Mr Sisalem's position.

REPORTER: You don't feel sorry for a stateless refugee?

SENATOR AMANDA VANSTONE: You've just asked me a question and I've answered it.

Aladdin is allowed only two phone calls each month. He's calling his family in Kuwait where they live as refugees.

ALADDIN SISALEM (Translation): The whole world is talking about it, but it's no use.

His father hasn't left the house in 15 years and recently had a stroke brought about by the stress of Aladdin's perilous journey.

ALADDIN SISALEM (Translation): Look after my father, all right? Look after my father.

REPORTER: Do they worry about you?

ALADDIN SISALEM: They just feel helpless. They feel helpless. They have their own problems to worry about. They have a lot. So actually, I am the one who worries about them.

REPORTER: What do they say to you?

ALADDIN SISALEM: Don't give up.


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"How do you sleep at night?" How minister Ludwig coped

Centrelink telephone operators answered calls to the department of agriculture and letters of complaint to minister Joe Ludwig went unanswered in frenzied attempts to deal with an outpouring of public concern in the wake of the Four Corners program on live animal exports aired on May 30.

Freedom of Information documents released to The Age suggest each one of the 500 complaints sent to the department or minister in the four days after the program wanted live exports banned or suspended.

“People working at the department must find it hard to face their children at the end of the working day,” said one website comment sent within minutes of the program going to air. “Do you pretend you work elsewhere? Do you say it’s not your fault?”

A letter received by the minister two days after the program said the writer had had trouble sleeping.

Another read: “I grew up on sheep and cattle stations, and was killing my own meat the age of 14, but I have no stomach for the collection of various tortures I have witnessed inflicted upon the species bred by us, to sustain us. You want to hope there is no animal-sympathetic entity to which we will all, one day, become accountable.”

The documents show the department adopted a triage system of responding to complaints, deciding not to respond to the 80 per cent of messages it dismissed as “standard campaign mail”.

Where the text of one email was identical to another only the “originator” received a response. Hundreds of others did not.

Letters from people identified as special - “MPs, industry associations, famous/important people etc.”... were given red carpet treatment, receiving individually-tailored replies.

Other members of the public received identical replies regardless of the content of their complaints.

The first draft opened by saying the government “shares community concerns”. The final draft was strengthened to say anyone who had seen footage “would have been shocked”.

Within a day of the program going to air the department diverted its inquiry line to Centrelink, where call centre staff answered as if they were from the department and used a preprepared script to tell callers their concerns would be noted.

The documents released to The Age provide no indication of the way in which the concerns were noted. The department released to The Age a representative sample of 20 of the 500 letters of complaint.

Asked whether it was right not to reply to form letters but to use form letters and Centrelink call centre operators in its own replies to members of the public the minister’s office told The Age he took community views seriously and had worked hard to ensure they were properly responded to.

Published in today's SMH and Age

How do you sleep at night?

What we said

“I truly do wonder how you sleep at night knowing that you work for a government that allows millions of innocent animals to be tied down and tortured before being slaughtered.”

Tuesday May 31


“All of the people working at the department of agriculture, fisheries and forestry must find it hard to face their children at the end of the working day. Do you pretend you work elsewhere? Do you say it’s not your fault?”

Monday May 30


“Minister I trust your dept’s website is under gridlock as a result of your inaction over the last 10 years. To see the suffering that those animals went through on 4 corners using Aust government approved (and probably funded) installations is beyond belief.”

Tuesday May 31

“I am sick to my very core on what I have seen on the program. As a developed society with values on cruelty to animals we can not let these practises continue.”

Tuesday May 31


“I grew up on sheep and cattle stations and was killing my own meat the age of 14, but I have no stomach for the collection of various tortures I have witnessed inflicted upon the species bred by us, to sustain us. You want to hope there is no animal-sympathetic entity to which we will all, one day, become accountable.”

Tuesday May 31

Correspondence to the department of agriculture, fisheries and forestry released to The Age under freedom of information act.

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Consumer confidence by voting intention - I've made a graph

Thank you Michael Chua of the Melbourne Institute.

WHAT THE NUMBERS ON THE LEFT HAND SIDE MEAN

Each month the Melbourne Institute asks five questions:

. Family finances vs a year ago: better or worse?

. Family finances next 12 months: better or worse?

. Economic conditions next 12 months: better or worse?

. Economic conditions next 5 years: better or worse?

. Good or bad time to buy major household items?

For each question it subtracts the per cent who say worse/bad from the percentage who say better/good. It then adds 100.

The result gives an index number which is greater than 100 if there are more optimists than pessimists, less than 100 if there are more pessimists than optimists.

The overall index is an average of the five index numbers.

This means the more pessimistic the responses, the lower the index number.

Any result above 100 means optimists outweigh pessimists.


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Jobs growth. The damage.

Its worse than it looks

Jobs growth has stalled, slipping way below the rate of population growth, throwing budget forecasts into doubt and prompting new talk of a series of interest rate cuts.

The latest jobs figures for July show employment inching ahead a mere 26,000 over the entire six months since January. By contrast throughout much of 2009 employment was surging at an average pace of 39,000 per month.

Since January employment has been climbing at an annualised pace of just 0.5 per cent. The May budget forecast employment growth of 1.75 per cent. The Bureau of Statistics says the population of employable Australians is growing at an annualised rate of 1.24 per cent.

“The data is worse than it looks,” writes Goldman Sachs economist Richard Coppleson in a note to clients. “Full time employment is falling, and that’s probably a better measure of underlying conditions. Unemployment has climbed from 4.9 to 5.1 per cent. It is clear it won’t settle there.”

Goldman Sachs has abandoned its previous forecast of an interest rate increase and is now predicting two interest rate cuts by Christmas...

“Although the exact timing will be subject to emerging news flow, we believe that the Reserve Bank will favour a September interest rate reduction of 0.25 percentage points followed by a further 25 percentage points reduction in November. This will be sufficient to take broader financial conditions from a moderately contractionary setting to a moderately expansionary setting,” Mr Coppleson said.

Goldman Sachs joins Westpac which since July has been predicting a series of four interest rate cuts over the next twelve months.

Futures trading yesterday pushed up the implied probability of rate cut next month from 79 to 91 per cent.

The market is pricing in five rate cuts within a year.

“These job numbers could could put the cat among the pigeons,” said BT securities economist Chris Caton. “While the economy still looks ‘okay’, the upward move in unemployment is ominous. Recall that recessions usually start from a low level of unemployment.”

“Building approvals and retail trade are weak, and consumer sentiment has fallen off a cliff. Last week, the Reserve Bank made it clear it was still concerned about inflation, but so much has changed since then.”

NSW has lost 25,600 jobs since January and Queensland 6100. In contrast Western Australia has taken on 19,000 more workers and Victoria 17,400.

Victoria suffered a reversal of fortune in July shedding 20,700 of its previous gain.

Premier Ted Baillieu said the reverse showed showed the government should cancel its planned carbon tax.

“Business and consumer confidence has been affected by the announcement of the carbon tax by Labor and this has added to the pressure the high Australian dollar had already placed on business,” a spokesman said.

NSW reversed its run of job losses, gaining 19,700 workers.

The national figures show a drop of 22,200 in full-time employment in July offset by a jump of 22,100 in part-time employment.

The Bureau of Statistics said in its view the 30,000 extra part-time census workers it put on at the start of July would not have skewed the result.

“We can't we can't be certain but that’s what previous experience suggests,” a spokesman said.

Most census workers are already employed.

Market economists expect Australia’s unemployment rate to climb from 5.1 to 5.25 per cent by year’s end.

Published in today's SMH and Age


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6202.0

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Confidence is how low?

Consumer confidence has slumped to recessionary levels and confidence amongst Coalition voters is near the lowest on record.

The latest Westpac Melbourne Institute survey, presented on a scale where 100 means optimists balance pessimists, shows overall confidence at 89.6, down from 119.2 a year before.

Confidence amongst Coalition voters has slipped from an encouraging 110.2 a year ago to a bleak 74.9, the lowest result the Melbourne Institute was able to find in easily assessable records.

Labor voters remain on balance optimistic, but much less so. Their confidence has slipped from 129.8 to 110.5

Crucially, most of the survey was conducted in the week before Friday’s share market plunge meaning it probably overstates the Australian mood.

A near-record 48 per cent of those surveyed said their family finances had worsened in the past year. A near-record 36 per cent expected even worse family finances in the year ahead.

Both results are worse than any recorded during the global financial crisis....

The index tracking tracking views on the outlook for economic conditions over the year ahead has fallen 30 per cent since the May budget.

Westpac chief economist Bill Evans said the four successive slides in the index reflected concern over financial turmoil, interest rates, house prices, the carbon tax, “and potentially jobs”.

The Bureau of Statistics releases the next update on unemployment today (THURS). The rate has held steady at around 4.9 per cent since March.

The one positive in the Westpac survey is the high number of Australians believing now is a good time to buy a major household item. An unusually high 56 per cent of those surveyed agreed now was a good time to buy compared to only 28 per cent who did not. Retailer Harvey Norman yesterday reported a 3.6 per cent drop in full-year sales when measured on a like-for-like basis.

Separately released lending figures show housing, personal and commercial borrowing at five year lows. Borrowing slid a further 3.9 per cent in June.

The Australian share market recovered further Wednesday, climbing another 2.6 per cent - a rise matched in Asia and European early trade.

But share prices remain nearly 8 per cent down on their level of early last week before concern about a new global recession.

Future Fund chairman David Murray yesterday called on the government to significantly cut its debt in order to restore market confidence.

“We are a highly indebted nation overall if you add up all government debt in Australia plus private sector debt,” Mr Murray told ABC radio.

“We need a significant reduction in government debt, we need policies that will drive private sector investment and success, which generally means in the business sector lower taxes.”

Volitility in financial markets could last another 20 years as governments unwound “excessive debt” built up around the world.

Published in today's SMH and Age


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The National Disability Insurance Scheme - Where Gillard squibbed

The Productivity Commission recommended:

• The scheme would gradually be rolled out from mid-2014. It would start in a few
regions. That would allow fine-tuning of the scheme, while providing high quality
services to many thousands of people. In 2015-16, the scheme should cover all
regions of Australia for the highest priority groups, and should progressively expand
until the scheme covered all people by the end of 2018-19.

From Gillard nothing about a trial. Nothing whatsoever.

They are worried they are skint.


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Gillard's response: "Let's get started"

The Gillard Labor Government today announced that it will start work immediately with states and territories on measures that will build the foundations for a National Disability Insurance Scheme, following the release of the Productivity Commission’s final report into the matter.

The Government asked the Productivity Commission to examine reform of disability support services because we believe that the system we have today is not delivering the kind of care and support Australians expect for people with disability.

The main recommendations of the Productivity Commission are:

. A National Disability Insurance Scheme should be created to provide all Australians
with insurance for the costs of support if they or a family member acquire a disability.
The scheme will provide individually tailored care and support to around 410 000 people
with significant disabilities.

. A National Injury Insurance Scheme should be created to provide no fault insurance
for anyone who suffers a catastrophic injury.

The Productivity Commission’s report finds that it would take at least seven years to transform disability services.

The Australian Government supports the Productivity Commission’s vision for a system that provides individuals with the support they need over the course of their lifetime, and wants reform of disability services that is financially sustainable.

The Productivity Commission outlines the creation of these schemes would ensure that every Australian can have confidence that they will receive the care and support they need if they acquire or are born with a disability.

However, the Productivity Commission makes clear that important work needs to be done before further progress can be made – and we want to get that under way.

While we have a lot of work to do before the Government could determine the design of a scheme, we believe it is important that work begins now to lay the foundations for this reform.

In line with the Productivity Commission’s recommendations, the Government, with the States and Territories, will start work immediately on building the foundations for reform. We will:

. Deliver an immediate, additional $10 million, consistent with the PC recommendations, to support this technical policy work;

. Move to establish a COAG Select Council of Ministers from the Commonwealth, States and Territories to lead reform in this area at COAG next month;

Take steps to establish an Advisory Group to the Select Council, led by Dr Jeff Harmer, to provide expert advice on delivering the foundations for reform and preparation for launch.

The current system is not delivering the kind of care and support Australians expect for people with a disability.

Care and support should be based on people’s needs, not a lottery of what kind of disability they have, how they acquired it or where they live.

That’s why the Government put disability reform on the agenda and we thank the Productivity Commission for their work.

Future reform of disability services will require investment from all levels of Government.

Further policy work

The Productivity Commission recommended that foundation reforms were a necessary precursor to
the establishment of a functional and efficient national scheme. Work is required to:

· develop common assessment tools to determine eligibility for support

· develop service and quality standards so that people with disability can expect high quality support irrespective of what disability they have or how they acquired it

· develop a national pricing structure

· build the capacity of the disability sector

· build workforce capacity

Work on these foundation reforms will recognise the roles and responsibilities of governments as outlined in the National Disability Agreement and recently reaffirmed in the National Health Reform Agreement.

Select Council

The Prime Minister will seek to establish a Select Council on Disability Reform at the next meeting of the Council of Australian Governments. This would bring together Commonwealth and State Treasurers and Disability Ministers to do the work needed to lay the foundations for change.

The Select Council would be chaired by the Treasurer and Minister Macklin, and would be supported by an Advisory Group of experts and leaders on disability reform.

In response to the Productivity Commission’s recommendations for the states and territories to harmonise their approach to catastrophic injury, the Government will also convene a working group led by the Assistant Treasurer to work with State and Territory Governments, lawyers and other stakeholders to progress this important complementary reform.

Advisory Group

The Advisory Group will be led by Dr Jeff Harmer AO, and the Commonwealth will nominate highly regarded national disability advocates Mr Bruce Bonyhady AM and Dr Rhonda Galbally AO to this Advisory Group.

Suggestions for additional nominees to this group have also been sought from the states and territories.

These reforms will be delivered in a way that is consistent with the Government’s fiscal strategy.

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Australia's National Disability Insurance Scheme - Main points

From the Productivity Commission:

• Most families and individuals cannot adequately prepare for the risk and financial
impact of significant disability. The costs of lifetime care can be so substantial that
the risks and costs need to be pooled.

• The current disability support system is underfunded, unfair, fragmented, and
inefficient, and gives people with a disability little choice and no certainty of access to
appropriate supports. The stresses on the system are growing, with rising costs for
all governments.

• There should be a new national scheme — the National Disability Insurance Scheme
(NDIS) — that provides insurance cover for all Australians in the event of significant
disability. Funding of the scheme should be a core function of government (just like
Medicare).

• The main function (and source of cost) of the NDIS would be to fund long-term high
quality care and support (but not income replacement) for people with significant
disabilities. Everyone would be insured and around 410 000 people would receive
scheme funding support.

• The NDIS would have other roles. It would aim to better link the community and
people with disabilities, including by using not-for-profit organisations. It would also
provide information to people, help break down stereotypes, and ensure quality
assurance and diffusion of best practice among providers.

• The benefits of the scheme would significantly outweigh the costs. People would
know that, if they or a member of their family acquired a significant disability, there
would be a properly financed, comprehensive, cohesive system to support them. The
NDIS would only have to produce an annual gain of $3800 per participant to meet a
cost-benefit test. Given the scope of the benefits, that test would be passed easily.

• The scheme should involve a common set of eligibility criteria, entitlements to
individually tailored supports based on the same assessment process, certainty of
funding based on need, genuine choice over how their needs were met (including
choice of provider) and portability of entitlements across borders. There would be
local area coordinators and disability support organisations to provide grass roots
support. The insurance scheme would take a long-term view and have a strong
incentive to fund cost effective early interventions, and collect data to monitor
outcomes and ensure efficiency.

• The above features would be best met by a having a single agency overseeing the
NDIS — the National Disability Insurance Agency. It would be created by, and report
to, all Australian governments. It would have strong governance arrangements, with
an independent commercial board, an advisory council of key stakeholders, clear
guidelines to ensure a sustainable and efficient scheme, and legislation that
protected the scheme from political influences.

• It would be the assessor and funder, but not the provider of care and support.
Services would be provided by non-government organisations, disability service
organisations, state and territory disability service providers, individuals and
mainstream businesses. Increased funding, choice and certainty are the key features
of the recommended scheme. Advocacy would be funded outside the scheme.

• An alternative but inferior option would be a ‘federated’ NDIS. This would give state
and territory governments control over their own systems, but with some common
core features. Such an arrangement could easily revert to the current flawed and
unfair system, with ‘agreements’ breaking down into disputes about who is to pay,
how much and for what.

• People would have much more choice in the proposed NDIS. Their support
packages would be tailored to their individual needs. People could choose their own
provider(s), ask an intermediary to assemble the best package on their behalf, cash
out their funding allocation and direct the funding to areas of need (with appropriate
probity controls and support), or choose a combination of these options.

• The NDIS would cover the same types of supports currently provided by specialist
providers (but with sufficient funding), give people more opportunity to choose
mainstream services, and encourage innovative approaches to support.

• The Australian Government currently provides funding to the disability sector of
around $2.3 billion, while state and territory governments provide funding of around
$4.7 billion — a total of over $7 billion.

• Current funding for disability is subject to the vagaries of governments’ budget
cycles. People with disabilities have no certainty that they will get reasonable care
and support over the long run. Resourcing might be good one year, but insufficient
the next, with many people missing out. The Commission estimates that the amount
needed to provide people with the necessary supports would be about double
current spending (an additional $6.5 billion per annum).

• The Commission proposes several options for providing certainty of future funding.
Its preferred option is that the Australian Government should finance the entire
costs of the NDIS by directing payments from consolidated revenue into a ‘National
Disability Insurance Premium Fund’, using an agreed formula entrenched in
legislation. The amount needed could be funded through a combination of cuts in
existing lower-priority expenditure, fiscal drag, and if necessary, tax increases.

• A less preferred option is that all governments could pool funding, subject to a longrun
arrangement based on the above formula, and with pre-specified funding
shares. This would need to be closely monitored by transparent accounting and
penalties for failure to meet commitments.

• The scheme would gradually be rolled out from mid-2014. It would start in a few
regions. That would allow fine-tuning of the scheme, while providing high quality
services to many thousands of people. In 2015-16, the scheme should cover all
regions of Australia for the highest priority groups, and should progressively expand
until the scheme covered all people by the end of 2018-19.

• A separate scheme is needed for people requiring lifetime care and support for
catastrophic injuries — such as major brain or spinal cord injuries. Currently, many
Australians get poor care and support when they acquire such injuries because they
cannot find an at-fault party to sue.

• A no-fault National Injury Insurance Scheme, comprising a federation of individual
state and territory schemes, would provide fully-funded care and support for all
cases of catastrophic injury. It would draw on the best schemes currently operating
around Australia. State and territory governments would be the major driver,
developing a comprehensive scheme by 2015.

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It's D-Day - National Disability Insurance Scheme Day. To recap...

Here's what the Productivity Commission recommended in its Feburuary draft report - the birth of a new Medicare.

Today's final report is firmer.

And it'll get the green light.

Main Points:

• The current disability support system is underfunded, unfair, fragmented, and inefficient, and gives people with a disability little choice and no certainty of access to appropriate supports.
• There should be a new national scheme - the National Disability Insurance Scheme (NDIS) - that provides insurance cover for all Australians in the event of significant disability. While Australians would pay more taxes (or governments would cut other spending), people would know that if they or their family acquired a significant disability, they would have a properly financed and cohesive system to support them.
• The NDIS would fund long-term high quality care and support (but not income replacement). Around 360 000 people would receive scheme funding.
• Beyond that main function (and the biggest source of its costs), the NDIS would have several other important roles, including mustering community resources, providing information to people, quality assurance, diffusion of best practice among providers, and breaking down stereotypes.
• The needs of people with a disability and their carers would be assessed rigorously by NDIS-appointed local assessors, with careful management to avoid assessment 'softness' or 'hardness'. Assessment would lead to individualised support packages. Strong governance would be necessary to contain costs and ensure efficiency.
• The agency overseeing the NDIS - the National Disability Insurance Agency - would be a federal agency created by, and reporting to, all Australian governments. It would have strong governance arrangements, with an independent board, an advisory council of key stakeholders, clear guidelines to ensure a sustainable scheme and with legislation that protected the scheme from political influences.
• Support packages would be portable across state and territory borders, as would assessments of need.
• People would have much more choice in the NDIS. Based on their needs assessment and their individualised support package, they would be able to:
  • choose their own service providers
  • ask a disability support organisation (an intermediary) to assemble the best package on their behalf
  • cash out their funding allocation and direct the funding to areas of need they think are most important. There would have to be some controls over the latter to ensure probity and good outcomes. People would need support to adopt this option and, given overseas experience, it would take some time for many to use it.
• The NDIS would cover the same range of supports currently provided by specialist providers, but would give people more opportunities to choose mainstream services and would encourage the development of innovative approaches to support.
• In 2009-10, the Australian Government provided funding to the disability sector of around $1.7 billion, while state and territory governments provided funding of around $4.5 billion - or a total of $6.2 billion.
• The Commission's preliminary estimates suggest that the amount needed to provide people with the necessary supports would be an additional $6.3 billion, roughly equal to current funding. Accordingly, the real cost of the NDIS would be around $6.3 billion per annum. That could be funded through a combination of cuts in existing lower-priority expenditure and tax increases.
• Current funding for disability comes from two levels of governments, with an annual budget cycle - making it hard to give people with disabilities any certainty that they will get reasonable care and support over the long-run
  • currently, supports might be good one year, but insufficient the next.
• The Commission is proposing that the Australian Government take responsibility for funding the entire needs of the NDIS. This is because the Australian Government can raise taxes more sustainably and with fewer efficiency losses than state and territory governments.
• State and territory governments should offset the Australia-wide tax implications of the NDIS by either:
  1. reducing state and territory taxes by the amount of own-state revenue they currently provide to disability services or
  2. by transferring that revenue to the Australian Government.
  • The Commission prefers option (a) because it leads to a more efficient way of financing the NDIS, with greater certainty of long-run funding, and with a no greater level of Australia-wide taxes than other options. Compared with most of the alternatives, it would also have a lower risk that jurisdictions would not meet their ongoing commitments.
• To finance the NDIS, the Australian Government should direct payments from consolidated revenue into a 'National Disability Insurance Premium Fund', using an agreed formula entrenched in legislation. A tax levy would be a second-best option.
• The scheme would commence in early 2014, commencing with a full scale rollout in a particular region in Australia. That would allow fine-tuning of the scheme, while providing high quality services to many thousands of people. In successive years, the scheme would:
  • extend to all Australia in 2015
  • progressively expand to cover all relevant people with a disability, commencing with all new cases of significant disability and some of the groups most disadvantaged by current arrangements.

A separate scheme is needed for people requiring lifetime care and support for catastrophic injuries - such as major brain or spinal cord injuries. Currently, many Australians get poor care and support when they experience such injuries because they cannot find an at-fault party to sue. A no-fault national injury insurance scheme (NIIS), comprising a federation of individual state and territory schemes, would provide fully-funded care and support for all cases of catastrophic injury. It would draw on the best schemes currently operating around Australia. State and territory governments would be the major driver of this national reform.

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Countdown to the October Tax Summit. Chart of the day.

The effective rates facing a parent returning to work, after the latest changes:

It's not so bad if you are in an allegedly "high" tax bracket.


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