The Turnbull Government handed down its first budget this week. The Interpreter looked at the consequences for Australia's diplomatic network, its aid program and also how the budget was framed in terms of the global economy. First, Stephen Grenville placed the budget in context:
It's too early for a definitive assessment of how the transition from the resources boom is going, but so far the cautious optimists like John Edwards are ahead. There is now a wider acceptance that the impact of the resources boom was exaggerated. Half the increase in resource investment was spent on imports rather than in the domestic economy; the calculation of the terms-of-trade impact on income left a lot of room for different interpretation; and so much of the resources sector is foreign-owned that the big swings (both up and down) are felt more by foreign investors than by locals. Coal miner Peabody is now in Chapter 11 insolvency and Xstrata-owner Glencore is restructuring its balance sheet, but these are wholly foreign-owned.
Tristram Sainsbury looked at how the Treasurer framed the budget in terms of the international economy:
The scant international content in the Treasurer's remarks is particularly striking in light of the 0.25% interest rate cut announced this morning by Reserve Bank of Australia Governor Glenn Stevens. In justifying the interest rate decision, the key factors cited by the Reserve Bank Board were primarily global in nature. Weighing on the Board was a confluence of downgrades in global economic forecasts, uncertainty about the economic outlook, difficult conditions in emerging-market economies, and the divergence in monetary policy settings.
The Treasurer cited precisely none of these factors in his speech.
And Alex Oliver examined how the Budget would affect Australia's diplomatic network and talked about the public sector 'efficiency dividend':
Adding to this efficiency drive is the ongoing public sector ‘efficiency dividend’. This is a government-wide initiative, introduced back in 1987, to reduce the annual costs of departmental operations by a fixed percentage. Some agencies (but not DFAT) are exempt. The dividend has ranged from 1% to a high of 4% in 2012, and now sits at 2.5%. For a department the size of DFAT, with an operating budget of around $2 billion, this means $50 million in savings must be found each year. The 2015-16 budget promised to reduce it to a more manageable 1% in 2017-18; this budget overrides that, maintaining the 2.5% for the next two years, winding it down to 1.5% in 2019-20.
For a thorough look at Australia aid budget, check out Jonathan Pryke's piece this week. It looks bleak:
A run through the numbers provides a bleak picture of the aid program. When adjusted for inflation, the $224 million cut this year amounts to a 7.4% cut to the program. This is the sixth-largest cut in any one year in our program’s history, a painful fact the aid community is no doubt numb to after last year, when the program was slashed by 20%. After four consecutive years of budget cuts, the aid program is now 30% smaller in real terms than it was at its peak under Labor in the 2012-13 budget. Our aid generosity, as measured by aid expenditure as a proportion of gross national income, has also dropped from 0.34% to 0.23%. This is the lowest in our nation’s history and well below the OECD average
Moving on from the Budget, journalist Norman Bell on Trump and democracy in America:
He fills a perceived void as a strong and decisive leader, a CEO-in-chief, in a time when the country is tired of political correctness and compromise. Whether that style will work in the 21st Century world remains to be seen but a healthy cohort of Americans hope it will.
Do we need to start considering the border in a strategic context? John Coyne thinks so:
Arguably, borders now have a resurgent strategic relevance to national security and geopolitics. In response to this trend, it’s time to lift border security policy discourse to a strategic level. The best way of achieving this strategic border security discourse is through multi-disciplinary discussion and debate: involving subject matter experts from international relations, economic, geographic, environmental, international relations and national security.
Erin Watson-Lynn looked at the pros and cons of Narendra Modi's efforts to increase women's safety in India:
Modi’s ‘panic button’ policy does little to address the cause of crimes against women in India. The high-profile Delhi gang rape sparked significant legislative change and ignited an increased pressure on the Government to address women’s safety. The Modi Government is desperate to implement policies that illustrate its commitment to reducing crimes against women to its domestic and international observers. However, critics have noted that the panic button is reactive and shifts the blame to women, that mobile phone ownership is often at the discretion of men, and that the GPS function is a proxy for surveillance.
Reporting from Germany, Andrew McCathie talks about the recent trials of Angela Merkel:
Up until recently, Ms Merkel’s personal approval ratings have remained remarkably high despite the concerns about the refugee crisis and a sharp slump support for her conservative Christian Democrat-led political bloc in the wake of a deep split among her supporters about her handling of the migrant drama.
If Ankara meets its side of the bargain, the EU has promised to recommend on Wednesday that EU states approve visa-free travel for Turks. A recent Politbarometer poll suggested 80% of Germans believed the chancellor had made too many concessions to Turkey in her negotiations with Ankara over the refugee crisis.
An excellent post from Brittany Betteridge on digital policy in Indonesia:
Large tech firms must negotiate Indonesia's current digital censorship regulations and uncertain business incorporation entity rules, which are barriers to these companies entering and expanding in Indonesia. The time is right for Jokowi to streamline bureaucracy for technological start-ups and increase investment in digital entrepreneurs and higher research/education to ensure young Indonesians are ICT job ready.
Australia rejected an FDI bid from a a Chinese company, Dakang, for the Kidman cattle range last week. James Laurenceson says the Government's reasons for the rejection don't hold up:
The Treasurer's first objection is that Kidman’s portfolio is big. Even with the property at Anna Creek carved out,there are still 11 cattle stations up for sale that cover 77,000 square kilometres.
Yet in 2009 London-based private equity group, Terra Firma had no trouble taking a 90% stake in Consolidated Pastoral Company (CPC), another Australian business with sprawling cattle station holdings. CPC’s portfolioincludes 20 properties, covers 57,000 square kilometres and has more than double the herd carrying capacity of Kidman. And several decades ago, UK company, Vesteys held cattle stations covering an area of Australia more than twice that now for sale by Kidman.
One thing that is certain over the last couple weeks in PNG is that the Supreme Court and constitution have proven resilient. Lisa-Marie Tepu:
The PNG judiciary and legal profession have gone through some challenging times in the past few years, so this well-considered landmark decision was a welcome event. We should all stand and applaud the ruling of the Supreme Court and its fearless defense of our constitution and the human rights enshrined in it. Let us hope that our nearest neighbors will respect PNG’s sovereignty and abide by the decision handed down by the highest court in our land.
President Obama will likely not make an apology for Hiroshima when in Japan later this month, says Robert Kelly:
Obama's impulse to apologise is morally laudable. As a student of Martin Luther King and Nelson Mandela, he sees that reconciliation and trust-building are achieved in part through the mutual recognition of error and inappropriate violence. Obama, unlike so many Americans, seems willing to recognise that even the US has done some pretty awful stuff (if he wants an even greater challenge, consider how the US should reckon with the fate of Native Americans). There is in fact a pretty good case that the bomb drop was unnecessary.
The Syrian cease-fire is falling apart, and Aleppo is at the centre of it, says Rodger Shanahan:
And while the 'cessation of hostilities' has more or less held and led to a reduction in deaths, a golden thread has started to unravel the cessation; Aleppo. This is not only because Aleppo has been a strategic focus of the regime since the introduction of Russian airpower allowed Syrian and allied forces to resume offensive operations, but also due to the fact that Jabhat al-Nusra operates within it.
Casper Wuite on unrest in Egypt:
A survey carried out by Baseera, an Egyptian polling organisation, showed that 30% of respondents believed the islands were Egyptian while almost half were unsure or even unaware the islands existed. But in a country where public opinion polls are notoriously unreliable and political engagement remains low, an important measure of the public mood will be the level of parliamentary resistance. According to the Egyptian constitution, parliament will have to vote on the deal. Egypt expert Michael Hanna has rightly argued that 'if a legislative body that is often seen as little more than a rubber stamp chooses to assert itself on such a highly contentious and sensitive matter, it will be a major setback for the Sisi regime.'
Merriden Varrall thinks there is danger in the security and defence community repeating assumptions about China's motivations and supposed intentions in the South China Sea:
I do not mean to single this article for particular scrutiny; it is just one of many, largely from within the defence and security community in Australia and the US, that places the onus of responsibility for peace in the region at China's feet. The authors are of course well intentioned: in their line of business, being acutely sensitive to and highly anxious about the national interest is their bread and butter. But, like all of us, their background and position colours their perspective. As such, their analyses tend to rest on assumptions of what China is trying to achieve and why, or on a conviction that motivations don't actually matter when the reality is so clear. But the truth is, most of them, like the rest of us, actually do not know.
Abhijit Singh commented on a recent report from Ashley Townshed and Rory Medcalf on China's 'passive assertiveness' on the South China Sea:
This is an insightful report on China's contemporary maritime behaviour and it makes some useful observations. Despite its informed assessments about China's revised maritime posture in the Pacific littorals, however, it overlooks some critical political and maritime developments, which suggest Beijing's recent maritime turn is more in the nature of a 'strategic pause' marked by a political expediency rather than a considered re-calibration of national maritime strategy.
Photo courtesy of Flickr user MomentsForZen.