Via Paul Kelly:
The new law will give the Foreign Minister discretion similar to that enjoyed by the Treasurer on foreign investment decisions. In relation to agreements between Australian states and other governments, Foreign Minister approval will be required at two points — before negotiations begin and when the agreement is finalised. The minister can veto at either point. In relation to lesser agreements, at state, province, city or university level, notification is required and the minister can veto.
The purpose of this law is designed to change behaviour. The main targets at present seem to be Victoria’s BRI and Confucius Institutes. The government has identified, so far, about 135 agreements that will be assessed. Don’t expect vetoes en masse. That’s not the purpose and would be a blunder. There will be a public register established listing all agreements. The symbolism may prove to be more important than the substance. The government is still sorting how far to draw the line on university agreements.
…The law has wide support. Former trade minister Robb told the ABC it made “complete sense”. Former defence, foreign affairs and ASIO chief Dennis Richardson said: “In principle I think it’s perfectly reasonable.” He said it was “unwise” for Victoria to sign up to the BRI and give China “a propaganda win”. Raby, a strong advocate of China trade, said: “If the commonwealth feels it needs this legislation for greater clarity, then so be it.” Labor can be expected to support the law.
…For universities, the risks are obvious — that the Morrison government is adding yet another layer of regulation likely to inhibit genuine Australia-China research collaboration. Not all university agreements will be caught up in the new net but those closely related to Chinese government interests will fall under the new law. The cultural gulf between the Morrison government and the university sector is only deepening — the lack of trust within the cabinet for university leaders has become a national liability.
Richardson said universities were seen by the intelligence community as a “point of vulnerability” that “needs to be closed” but that Australia must beware the idea that any agreed research with China was bad. He said that would be a “foolish” conclusion.
It would be impolite to single out wildly-pivoting China apologists. The China fire was out at the AFR as well on the weekend (though there are embers today). A squeak from ABC soft-touch, Laura Tingle, is all we got:
Payne and Morrison’s views at the time reflect the difference between day-to-day diplomacy and politics, as much as they do questions about when exactly an agreement by a state government becomes a matter of international relations.
This is not day-to-day politics. Political normatives are a powerful thing. They govern reputation and access. Which is why the China apologists are…err…swapping guernseys. Grab a green and gold one yourself, Laura.
That said, Tingle does make a very good point about timing.
It is by now abundantly clear that the CCP strategy on Australia is to respond with increasing economic force. You can see why from Sauron’s Xi’s point of view. If pissant Australia can push around the CCP then anybody can. That’s untenable for the dictator. His power is much better served by the example of a burning post-China failure than by joyful post-China hobbits frolicking Downunder.
That means we will see fewer Chinese students and tourists in due course. Local acquisitions by Chinese firms are over. Any and every commodity trade will be pressured wherever it is possible – coal, softs, LNG, eventually iron ore – they already are.
In short, Australia’s great China era just ended and it will be all downhill from here.
Which brings us back to the timing of the pivot. Is Scotty from Marketing ready for this? If he were, then he would be busy creating a very different economic plan than the one he has, which might be summarised as:
- open all domestic borders to spread COVID-19 across Australia so he can reopen the national border;
- flood the joint with foreign students and temporary foreign workers to reboot mass immigration, and
- force up house prices.
That plan can be labeled ‘Homicidal Howardism’. For its general outline, let’s turn to a speech by Immigration Minister Alan Tudge on Friday:
Addressing the National Press Club, Mr Tudge said Australia’s fast population growth of recent years had largely relied on migration.
It was now “effectively down to zero” and Mr Tudge said it would take some time to get back towards normal.
Once migration processing services got back to normal, the government would focus on those people who could make a substantial economic boost.
“It’s going to take some time before we’re anywhere near back to where the [net overseas migration] figures were,” he said.
“When that happens, we’re going to want to prioritise those people who will be job-making migrants who will come here to help create jobs for further Australians.”
“Back to normal”. Cripes it was never “normal”. It was out of control on every economic measure. Far above long term averages and astronomically above previous periods of wide output gaps.
The results for that “normal” are in for anybody with eyes. Crushed wages, force-fed house prices and crush-loaded living standards. There is no “job-making migrant” to support mass immigration. There is only a hoard of insecure and unskilled workers banging down the gates.
And that’s before we even consider who will replace the lost Chinese numbers, which were the wealthiest and most “job-making” migrants of the lot.
Tudge said more. There’ll be free and unlimited English-language training for migrants going forward which is great. Plus, as yet undisclosed stricter Australian values considerations (knowing Bradman’s average?), as well as warnings about further pushback against the CCP exploiting the Chinese diaspora with fear (yes, ban WeChat).
So, even as he unleashes the political and strategic pivot from China, Morrison’s only economic plan is to shift backwards into Homicidal Howardism, an untenable foreign student and cheap foreign labour trade while radically boosting the marketing apparatus around it.
Which brings us back to Tingle’s point about timing. Such a “plan” makes Morrison’s China pivot look like it dropped out of thin air. That is not to say that the pivot is not real. It is and it has been a trend with very popular political support. But the Morrison Government clearly has no understanding of the gravity of it beyond it’s belief in the power of marketing to make everything hum.
Consider. If the economic plan to reboot immigration succeeds then the Australian economy is in for a terrible time as Aussie wages and consumption free fall into the post-COVID output gap grand canyon while fiscal policy is run too tight. Property is an open question but may deflate anyway given the extraordinary wages assault and no more rate cuts.
Or, the plan fails, and the Australian economy is in for a terrible time as Aussie wages and consumption crash into the post-COVID output gap grand canyon, fiscal policy turns chaotic, property deflates, but markets take time time to figure it out and the Australian dollar crashes too late.
A measure of just how far short of any kind of China-pivot economic plan is Morrison is what it should actually look like:
- massive taxation and export tariffs on mining rents shoved into a sovereign wealth fund;
- RBA and APRA banged together and Phil Lowe replaced by a mercantilist to force all monetary easing into the currency;
- negative gearing reform to deflate property;
- any and every productivity reform unleashed;
- get the universities off the Chinese tit and fund research publically;
- gut the gas cartel to crash energy prices;
- a huge push into renewable energy and post-carbon economy;
- massive tax and regulatory incentives to rebuild the industrial base;
- huge infrastructure investments to keep the nation employed as we transition.
That is, a competitiveness and nation-building agenda so far outside of the world view of contemporary IPA-driven Coalition trickle-down numbskulls that it is heresy.
Now, some in the Canberra bubble argued on the weekend implicitly (that is, without realising it) that the lack of an economic alternative is a part of the Morrison China strategy. That the Government is happy to push back against CCP violations of sovereignty and wait for the diplomatic and economic largesse to resume. Morrison himself confirmed this at the AFR today:
Australia is dealing with China using a doctrine of “strategic patience and consistency” and will never trade away its sovereignty or security in the face of threats to its economy, Prime Minister Scott Morrison says.
Mr Morrison said it was in Beijing’s interest to recognise its relationship with Australia was “mutually beneficial” because the two-way trade between the countries had “been of great benefit to China”.
“If you’re asking me what’s changed in several years, I would say that our positions haven’t changed, and so it is open to analysis then what has,” he told The Australian Financial Review in an exclusive interview.
Yet, if that is a plan, then it sure ain’t anything much more promising than crossing your fingers under the table. Such a notion relies on the assumption that Xi Jinping can change. In the case of the US, there is evidence that China is in a tactical retreat as Trump turns assertive. But for Australia? Moreover, it leaves all of the economic power in the hands of the CCP to wield as it sees fit. Hardly risk mitigation in the national interest.
If we are going to pivot away from China politically and strategically then we should do so as best we can economically at the same time to share and mitigate the adjustment to keep Australiana intact. This is a political opportunity as well, as much for Labor as it is the Coalition. Australians understand this in their bones even if the political gangs do not:
The Morrison Government has finally scattered the CCP roaches, as it should (we won’t mention the Gladys problem). In all good parental conscience, we couldn’t keep going down the path of absorption into the illiberal Chinese empire under its dictator Xi Jinping. But the Government appears to have absolutely no idea what the alternative economic policy path looks like.
