As the treasurer lauds supply-side economics, a once-controversial recovery theory is gaining traction.This is the essence of modern monetary theory – that government budgeting is nothing like household or business budgeting, for the simple reason that government can create money.
Taylor twist as Morrison phones a ‘friend’
Scott Morrison’s handling of the police investigation into Energy Minister Angus Taylor this week brazenly flouted conventions of propriety and integrity. The prime minister actually phoned the New South Wales police commissioner, Mick Fuller, and then told parliament based on that call he was not required to stand the minister aside.
Nobody was more gobsmacked than Morrison’s immediate predecessor, Malcolm Turnbull. He told Sky News: “It is always critically important that in any police inquiry, particularly something that involves a politician, that the police are, and are seen to be, acting entirely free of any political influence.” He said, “Being blunt about it, it’s a call that I would not have made.” Neither, if the record is correct, would John Howard. As prime minister, he once told colleagues that when they were the subject of a police investigation the police should be allowed to carry out the investigation “without let or hindrance from me or anybody in the federal government”.
Turnbull showed old-fashioned sensitivity to ministerial standards when he required two of his ministers to stand aside while they faced investigations into their behaviour. Sussan Ley stood aside while her travel claims were investigated by a senior public servant. Mal Brough went to the sin bin while police investigated how he obtained former speaker Peter Slipper’s diaries. And when Tony Abbott was prime minister, Arthur Sinodinos went to the backbench until he was exonerated by a NSW Independent Commission Against Corruption inquiry.
Three decades ago High Court judge Lionel Murphy was charged with perverting the course of justice when a police phone tap caught him attempting to do favours for his “little mate”, Morgan Ryan, who was facing trial over an immigration racket. Murphy was found guilty of trying to influence the magistrate in the trial with what at face value was an innocuous query about how Ryan was going. An appeal court overturned the conviction. But the point is no one doubted the gravity of the matter.
This week a tapped phone call wasn’t needed. Morrison told parliament he had asked the commissioner directly about the investigation and how it would affect Taylor. He said he asked about the initiation, the nature and the substance of the inquiries. Why he didn’t leave that phone call to his chief of staff has old heads perplexed. One view is that Morrison last year in a 3AW interview claimed Fuller was one of his best mates. The commissioner in a doorstop interview midweek denied this point blank. He said he didn’t have the PM’s number, never socialised with him and knew him only professionally. They were once neighbours, but the commissioner says he was joking with 2GB’s Ben Fordham when it was suggested Morrison used to bring in his bins on garbage night. The commissioner’s distancing of himself in this way is a clear indication that he knows Morrison has put him in what looks like a compromised position. Fuller claimed the “prime minister didn’t ask me any questions that were inappropriate” and he was “comfortable” with the brief discussion, but he could hardly say anything else publicly.
Fuller said in his call with the prime minister he “talked around” a police statement that was released on Tuesday. It revealed detectives from the State Crime Command’s Financial Crimes Squad had launched Strike Force Garrad to investigate the reported creation of fraudulent documentation. While Fuller said he offered no opinion on whether the prime minister should stand aside Taylor, he said the complaint in a “well-constructed letter” from shadow attorney-general Mark Dreyfus, QC, went to “an obscure part of the crimes act”.
Fuller seemed all over the place in the news conference. He said he didn’t “feel as though the allegations themselves are serious in terms of the things that I would normally stand up and talk about the types of crimes, but at the end of the day they are public figures”. He said he assumes the public and the media would “expect we take all matters seriously against public figures”. But he then conceded his highly trained computer expert police may find Taylor was involved in a crime.
Taylor assured parliament he would fully co-operate with the police investigation. Similar assurances were given by Employment Minister Michaelia Cash when investigations were launched into her role in raids launched by the Registered Organisations Commission on the offices of the Australian Workers’ Union. Cash, as is her right, refused to be interviewed by police. So far Taylor, while denying he or his office created the fraudulent document that hyper-inflated the travel expenses of City of Sydney councillors, has refused to say where he got the document – except to claim it was taken from the council’s website, something the council’s metadata evidence and public internet archives show is not the case.
Taylor’s performance is not impressing the government backbench. One of his colleagues says the Rhodes scholar is a “smart-arse” and a dill. He has been criticised for attacking Sydney’s lord mayor, Clover Moore, in the first place. What triggered his first letter was an attempt to expose her council’s hypocrisy for declaring a “climate emergency” while at the same time not curbing in a practical way their own emissions. According to him, the council spent $1.7 million on international travel and $14.2 million on domestic travel. The council’s annual report, unaltered since it was posted, shows $1727.77 spent on international travel and $4206.32 on domestic travel. Maybe Taylor was trying to repair his reputation on climate change after years of antipathy and undermining Turnbull’s national energy guarantee with what was in the end dumb virtue signalling.
As with so many things that escalate into political fiascos, it is the cover-up that is more damaging than the original offence. The Dreyfus submission is that the fraudulent document was designed to illegally influence councillors in the exercise of their duty. Labor is probably on firmer ground because Taylor has obstinately refused to correct the parliamentary record on the origin of the false document. If he is not protecting his own hide, who is he covering for and why has the prime minister not told him to simply come clean?
The parliamentary tactics of the government hardly inspire confidence in Taylor. The leader of the house of representatives, Christian Porter, has repeatedly shut down any opposition attempt to debate the issue. This easily leads to the conclusion that credibly defending the trouble-magnet minister is simply too hard to do. Labor leader Anthony Albanese accused Morrison of ignoring the “usual rules of integrity and accountability”. The PM countered with the incongruous claim that Labor was raising the Taylor imbroglio as a distraction from the union-targeting Ensuring Integrity Bill, which was being debated in the senate. That ignored the fact the timing of the police investigation was not in the opposition’s hands.
Morrison’s exasperation was compounded by the even bigger distraction provided by the scandal at Westpac dramatically highlighting double standards when it comes to applying laws for “integrity”. The Coalition’s record of dealing with the banks is one of reluctance and indulgence. Some of the first actions taken by the Abbott government were to gut the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority of funding, causing massive staff losses that further hampered their already tame performance as watchdogs. Only the senate stymied the Coalition’s attempts to unwind Labor’s reforms ending financial advice conflict of interest that saw customers lose out.
Had a threatened revolt by elements of the Nationals not forced the Turnbull government to set up the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, it would not have happened. Implementing its 54 recommendations for government action is a slow process. So far only eight have been implemented, although Treasurer Josh Frydenberg is promising more than 50 will be implemented by the middle of next year.
Former consumer watchdog Allan Fels says the heavy fines imposed on these multibillion-dollar businesses aren’t good enough. He claims criminal penalties are the only way to deter highly paid executives from massive law breaking.
Morrison and his ministers can’t bring themselves to refer to banking executives as “thieves” and “brigands”. But they can, in trying to garner support for their latest attempts at union busting, attack union leaders for being “militant thugs”. Albanese was accused in one prime ministerial outburst of “running a protection racket for union thugs”. The government is scathing of militant industrial unions such as the Construction, Forestry, Maritime, Mining and Energy Union paying huge fines as part of their business model but silent on the big banks for evidently adopting the same practice.
These contradictions have been noted by key senate crossbenchers, making government senate leader Mathias Cormann’s task harder as he tries to end the year with wins on medevac and unions. Senator Pauline Hanson says she’s in “no rush to bash unions”. She was joined in this sentiment by the Tasmanian independent Jacqui Lambie. Senator Lambie voted with the two One Nation senators, Labor and the Greens to defeat the union-busting bill. Lambie says the government’s bill did nothing to get rid of the CFMMEU’s John Setka and it would only tie up a lot of other workers in the courts.
Lambie was locked in negotiations late Thursday over repealing the medevac bill. Sources say her condition was that the government had to allow those still held on Manus Island and Nauru to take up New Zealand’s offer of settlement.
Cormann won’t be around much longer to deal with the compromises and contradictions of bare-knuckle politics. His colleagues say he’s quitting politics at the end of this parliamentary session. The unexpected election win had merely delayed his planned departure by eight months. The defeat of “integrity” on several fronts this week would do nothing to persuade him to stay.
This article was first published in the print edition of The Saturday Paper on Nov 30, 2019 as "Making the wrong call".
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