Three tax alternatives to restore sovereignty to Australia’s states

Gregory Melleuish, University of Wollongong

If it happens it will overturn nearly a century of the Commonwealth accumulating power at the expense of the states, commencing with the Engineers Case in 1920.

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The Uniform Taxation Act in 1942 helped to accelerate the process by giving the Commonwealth exclusive control over income tax.

The long-term consequences have been that while the states continue to deliver crucial services to the public, especially in health and education, they lack the financial capacity to fund those services without Commonwealth assistance. Hence, beginning in the 1950s, the Commonwealth began funding education, firstly universities and later schools, as the states proved incapable of providing sufficient funds for them.

This condition where the central government raises more money than it needs and the states are incapable of doing so is referred to as vertical fiscal imbalance. It means, in practice, that the Commonwealth is able to use its excess funds to dictate policy to the states. The states become subordinate entities to the Commonwealth.

It is interesting to note that Turnbull refers to the states as sovereign entities. They are in their areas of responsibility, but the power conferred on the Commonwealth through vertical fiscal imbalance has seriously eroded that sovereignty. The states have become mendicants who regularly go to Canberra to beg for money.

Equally of note is the use of the word “subsidiarity” in the Commonwealth government’s first federation issues paper from 2014:

“subsidiarity, whereby responsibility lies with the lowest level of government possible, allowing flexible approaches to improving outcomes.”

If subsidiarity is to be a fundamental principle of governing in Australia, then those responsible must also be financially responsible. Otherwise they cannot be sovereign and just become tools of the central government.

In the final analysis it all comes down to finance and financial independence.

The problem is that at present the Commonwealth holds the whip hand in financial matters. To achieve subsidiarity and make states genuinely responsible they will need to find sources of funding outside of going to the Commonwealth.

Unfortunately, the cards are stacked against them as the High Court has ruled that “excise”, which Section 90 of the Constitution says is granted exclusively to the Commonwealth, also covers sales taxes. This is why the Commonwealth became the exclusive owner of the GST, which it distributes to the states.

As the states lost the capacity to levy income tax in 1942, their taxation options are very limited. There is land tax (including council rates), stamp duty and payroll taxes, none of which raises an enormous amount of money. They also run lotteries. This is why income taxes are viewed as the best way of restoring some of the financial independence of the states.

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If the states are to levy income taxes, it only makes sense if, in the longer term, each state can determine the rate of that income tax. The great fear is that this will contravene the principle of horizontal fiscal equalisation, or the idea that each state should have the same level of service as the others. Competition, it is argued, will lead to a “race to the bottom”, with the consequence that lower taxation will lead to a lower quality of service in health and education.

But to truly restore sovereignty and the principle of subsidiarity, some power to tax income must revert to the states.

Alternative options

Turnbull has sought to encourage innovation and “agility”, and perhaps there may be other ways out of this dilemma. Here are some possibilities.

Give states power over sales tax

As the High Court defines sales tax as excise, the wording of Section 90 could be changed so that sales tax is explicitly excluded from the definition of excise. This would require a referendum, but it would give the states much greater flexibility in their taxing regime. It wold mean that states could, in effect, raise their own equivalents of the GST, as happens in some other countries, thereby allowing the Commonwealth to lower the rate of its GST.

Expand land tax

Whenever this topic is raised one response that is invariably raised is that the states should look at ways of expanding their land tax. This could be done by increasing the rate at which land is taxed and/or lowering the threshold at which payment begins.

Restore inheritance taxes

The states once raised funds through inheritance taxes, but these were abolished some 40 years ago. Given the amount of money now locked up in real estate in places like Sydney and Melbourne, there could be significant sums to be raised in this way.

Moreover capital acquired by simply living in a house for a certain number of years can hardly be compared to the money one earns working at an occupation. Beneficiaries of an estate cannot be construed as having deserved their inheritance.

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In all of the cases listed above the imposition of any such state taxes would need to be matched by a decrease in Commonwealth taxes.

The restoration to the states of some power to impose income tax appears on the surface to be the best way of both restoring sovereignty and embedding subsidiarity into the practice of government in Australia. There is much to be said for doing it. But if we are to grasp the opportunities of the present we need to consider other possible options.

What matters is less the means than the end: to restore Australia to a genuine federation.

Gregory Melleuish receives funding from the Australian Research Council. He is a member of the Academic Advisory Board of the Menzies Research Centre

Aboriginal artefacts found at Sydney light rail site

Thousands of Indigenous artefacts have been uncovered during excavation works for Sydney’s light rail project in the eastern suburbs.

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The project managers have stopped work on the site for now, but there are calls for a complete halt, with concerns it could be a mass Aboriginal grave.

The New South Wales government is not confirming whether it will continue construction on a section of Sydney’s new light rail line where thousands of Indigenous artefacts have been found.

About 20,000 artefacts were discovered in excavation pits around the rail line’s proposed tram stable yard in Randwick, in the city’s east.

They include items believed to have been traded from the state’s Lower Hunter Valley which have never been seen before.

Transport for New South Wales recognised the significance of the find between late 2015 and January this year, but has not said if it will stop work on the $2.1 billion project.

Altrac Light Rail chief executive Glen Bentley says the company is communicating with all the stakeholders.

“With the heritage experts and Aboriginal stakeholders, with all that evidence, we’ll be able to put together the story of what happened here.”

Indigenous heritage advocates have called for the site to be classed as an Aboriginal heritage area.

Some of the excavations could contain graves.

A cultural heritage specialist with the consultancy Tocomwall, Scott Franks, says it is a significant find.

“This is a site of significance, nationally. Whatever means, we need to know. It’s holding the Australian government to account, or the Crown. It’s about understanding what happened here, so our old peoples can rest.”

Another cultural heritage specialist with Tocomwall, Danny Franks, says the range of objects is of major historical significance.

“The density of artefacts that were found go into the tens of thousands, and a higher proportion of them were tips, blades. Now this leads us to suggest there was conflict here, which very well was a high probability of meaning there was death associated with this site.”

Citing journals from 1791, Scott Franks says it could have been the site of conflict between traditional landowners and Governor Arthur Phillip’s troops.

“This site represents a clear confrontation of women, children and men who were taken from the land. Ripping this up and not treating it like a proper archaeological dig is criminal.”

While the objects have been recovered and catalogued, there is no guarantee the site will be protected.

Altrac Light Rail’s Glen Bentley says it is too early to tell what will be done with the discovery.

“So there’s no works happening in this area, where we’re continuing with this investigation. So, until we finish that investigation, there will be no further works. The social value of this to the local Aboriginal community is immense, and we’re very committed to continue working with Aboriginal stakeholders to unlock the puzzle.”

 

 

 

 

 

Kyrgios into Miami Masters semi-final

Like him or loathe him, Nick Kyrgios is the new king of Australian tennis after breaking new ground in Miami.

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Kyrgios will crack the world’s top 20 and leapfrog Bernard Tomic to become Aussie No.1 on Monday after upsetting power-serving 12th seed Milos Raonic 6-4 7-6 (7-4) to reach his maiden Masters 1000 semi-final.

Three weeks shy of his 21st birthday, the volatile talent is the youngest man ever to make the last four in Miami and first Australian to do so since Lleyton Hewitt in 2002.

He next faces Japanese sixth seed Kei Nishikori for a likely shot at world No.1 Novak Djokovic in Monday’s (AEST) title match.

Raonic has been one of the hottest players on tour in 2016, downing Roger Federer to win the season-opening crown in Brisbane and racking up 17 wins from 20 matches.

His only previous losses this year came against Andy Murray in a five-set Australian Open semi-final thriller and to Djokovic in the Indian Wells Masters final.

But the Canadian was on the back foot from the outset after Kyrgios made a flying start by breaking Raonic in the opening game of the match.

“To be honest, I didn’t think I was going to break during the match,” Kyrgios said.

“I came out really energetic and got pretty lucky. That definitely made me more relaxed.

“I really learned how to return this year. That’s the major thing this year. I am giving myself so many more chances and getting so many more opportunities to take over matches.”

On Monday, Kyrgios is guaranteed to rise to at least 20th in the world and eclipse Tomic to become only the third player to hold Australia’s top ranking in the past seven years.

Tomic ended Samantha Stosur’s unbroken six-and-a-half-year stint as the country’s highest-ranked player – man or woman – last September, but is projected to fall out of the top 20 next week after skipping Miami with a wrist injury.

Nishikori overcame five match points to deny Frenchman Gael Monfils 4-6 6-3 7-6 (7-3) in their quarter-final.

The 16th-seeded Monfils was soaked with sweat on a sweltering afternoon but rallied from a 4-1 deficit in the final set.

Nishikori fell behind 0-40 serving at 4-5 but erased those match points and another in that game, and overcame one more match point serving in the 12th game.

He played a solid tiebreaker and closed out the victory with a forehand winner.

Djokovic faces Belgian 15th seed David Goffin in the first semi-final on Friday (Saturday AEDT) before Kyrgios takes on Nishikori.

Myles lucky in Origin tackle: Barrett

Nate Myles was lucky to escape with an elbow injury after being on the receiving end of an ugly tackle in Queensland’s State of Origin I loss, says Manly coach Trent Barrett.

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Myles has all but been ruled out of Sunday’s NRL match against Canberra after scans on Thursday confirmed the Maroons veteran had torn a ligament in his elbow.

Barrett initially feared Myles had his shoulder ripped out by Blues skipper Boyd Cordner, but could now be back as soon as next week’s clash against Newcastle.

It also means the under-pressure forward would be available for the Maroons in game two.

“I think he’ll be right. If it was a semi-final type game on Sunday, he’d put his hand up to play. He’s not happy about it,” Barrett said on Friday.

“But I’ve got to think about the club and we’ve got a five-day turnaround after this. I’m banking on him being available for that.”

Barrett also said he had no issue with the tackle, which Myles bravely played through and went unpunished by the match review committee.

“(Cordner) didn’t mean it. It was more his body. It wasn’t a chicken wing, I didn’t think. Just put in an awkward position and lucky to get out of it with what he’s got,” he said.

“I thought it was more his shoulder. He’s come out of it okay, it could’ve been a lot worse.”

While the 31-year-old received good news on the injury front, he is facing increasing pressure to keep his Maroons spot following their insipid loss at Suncorp Stadium.

A number of ex-Queensland stars have already called for his axing, however Barrett insisted Myles was in good form for the Sea Eagles heading into the series.

“I haven’t read anything about any backlash to be honest. I thought NSW were dominant across the park and it was good to see,” Barrett said.

“Defensively he’s very good around the middle of the ruck. He tightens it up, does a lot of stuff here off the field, particularly with our younger guys. He’s certainly helping their development.”

Barrett also addressed rumours Myles could be granted an early release from the final year of his contract to join Melbourne in 2018.

“Nate’s contracted here until the end of next year,” he said.

Anger as Trump announces US withdrawal from Paris climate deal

In a sharply nationalistic address from the White House Rose Garden, Trump announced the United States would immediately stop implementing the “bad” 195-nation accord.

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“I cannot, in good conscience, support a deal that punishes the United States,” he said, decrying the “draconian financial and economic burdens the agreement imposes on our country”.

Trump repeatedly painted the pact – struck by his predecessor Barack Obama – as a deal that did not “put America first” and was too easy on economic rivals China, India and Europe. 

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“I was elected to represent the citizens of Pittsburgh, not Paris,” he said. “We don’t want other leaders and other countries laughing at us anymore. And they won’t be.”

Trump offered no details about how, or when, a formal withdrawal would happen, and at one point suggested a renegotiation could take place. 

“We’re getting out but we’ll start to negotiate and we will see if we can make a deal that’s fair. And if we can, that’s great. And if we can’t, that’s fine,” he said.

That idea was unceremoniously slapped down by furious allies in Europe, who joined figures from around the United States and the world in condemning the move.

“The agreement cannot be renegotiated,” France, Germany and Italy said in a joint statement.

‘Reject the future’

The United States is the world’s second largest emitter of greenhouse gases after China, so Trump’s decision could seriously hamper efforts to cut emissions and limit global temperature increases. 

Amid Trump’s domestic critics was Obama, who said the United States was “joining a handful of nations that reject the future.” 

Nicaragua and Syria are the only countries not party to the Paris accord, the former seeing it as not ambitious enough and the latter being racked by a brutal civil war.

Hillary Clinton, Trump’s opponent in last year’s White House race, called the decision to pull out an “historic mistake”.

“The world is moving forward together on climate change. Paris withdrawal leaves American workers & families behind,” she said in a tweet.

Watch: ‘US climate deal withdrawal is a mistake’: Macron

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Obama insisted that US business, state governors and mayors of major cities would step up.

The Democratic governors of New York, California and Washington states indeed formed a quick alliance, vowing to respect the standards agreed on under the Paris deal.

With much of the implementation of the accord taking place at the local level, the Paris accord’s supporters hope the deal will be in hibernation rather than killed off entirely.

Trump’s decision is likely to play well with the Republican base, with the more immediate damage on the diplomatic front.

The US president called his counterparts in Britain, Canada, France and Germany to explain his decision.

But traditional US allies were uncharacteristically blunt in their condemnation of the move, which comes amid already strained relationships with the hard-charging president.

Germany said the US was “harming” the entire planet, and European Commission President Jean-Claude Juncker called the decision “seriously wrong.”

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Ever the showman, the 70-year-old Trump had given his decision a reality TV-style tease, refusing to indicate his preference either way until his announcement.

Opponents of withdrawal – said to include Trump’s  daughter Ivanka – had warned that America’s leadership role on the world stage was at stake, along with the environment.

A dozen large companies including oil major BP, agrochemical giant DuPont, Google, Intel and Microsoft, had urged Trump to remain in the deal.

Ultimately, the lobbying by Trump’s environmental protection chief Scott Pruitt and chief strategist Steve Bannon urging the president to leave won out.

In the wake of the announcement, Tesla and SpaceX boss Elon Musk and Disney chief Robert Iger announced they would no longer take part in presidential business councils. 

“Climate change is real. Leaving Paris is not good for America or the world,” Musk said.

GE head Jeff Immelt said he was “disappointed” with the decision: “Climate change is real. Industry must now lead and not depend on government.”

Related readingChina pledge

White House officials acknowledged that under the deal, formal withdrawal may not take place until after the 2020 election.

Hours ahead of Trump’s announcement, China’s Premier Li Keqiang pledged to stay the course on implementing the climate accord in a joint press conference with German Chancellor Angela Merkel, and urged other countries to do likewise.

China has been investing billions in clean energy infrastructure, as it battles to clear up the choking pollution enveloping its cities.

China and the US are responsible for some 40 per cent of the world’s emissions and experts had warned it was vital for both to remain in the Paris agreement if it is to succeed.

The leader of Asia’s other behemoth, Indian Prime Minister Narendra Modi – who is due to visit the White House shortly – has said failing to act on climate change would be “morally criminal”.

Mixed signals

Trump’s announcement comes less than 18 months after the climate pact was adopted in the French capital, the fruit of a hard-fought agreement between Beijing and Washington under Obama’s leadership.

The Paris Agreement commits signatories to efforts to reduce greenhouse gas emissions that cause global warming, which is blamed for melting ice caps and glaciers, rising sea levels and more violent weather events.

They vowed steps to keep the worldwide rise in temperatures “well below” two degrees Celsius from pre-industrial times and to “pursue efforts” to hold the increase under 1.5 degrees Celsius.

Watch: Trump’s full speech

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$8b offshore wind farm plan for Vic

Australia’s first offshore wind farm off the eastern coast of Victoria could provide almost a fifth of the state’s energy.

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The proposed plant would see 250 turbines built off the Gippsland coastline and produce enough energy to power 1.2 million homes.

Offshore Energy says the project could bring $8 billion worth of investment into Victoria and create 12,000 jobs during the construction phase, with local campaigners hoping recently retrenched coal workers can be retrained.

Managing director Andy Evans says the wind farm could reduce carbon emissions by 10.5 million tonnes a year.

“When placed in the right wind conditions, like those off the coast of Gippsland, offshore wind delivers a high, consistent flow of electricity,” Mr Evans said in a statement on Friday.

The feasibility phase is expected to take three years, the company says.

Energy Minister Lily D’Ambrosio says a preliminary analysis of the proposed site is promising.

“This is a massive project. It’s an exciting project; it is unprecedented and one that our government supports and we’ll continue to work alongside Offshore Energy to work through all of the planning requirements,” Ms D’Ambrosio told reporters on Friday.

Gippsland has been hit hard by job cuts with the closure of the Hazelwood coal-fired power station, and Environmental Justice Australia lawyer, Bronya Lipski, says coal workers could move to the renewable energy sector.

“In Wyoming, in the USA, a wind farm manufacturer recently jumped at the opportunity to retrain former coal workers to take advantage of their electrical and mechanical expertise,” Ms Lipski said.

“There is no reason why this can’t happen for Latrobe Valley workers.”

The government hopes the project will be generating power in time to contribute to its renewable energy target of 40 per cent by 2025.

Victorian Greens leader Greg Barber says the plan has the potential to “displace highly polluting brown coal generators from Victoria’s electricity grid”.

But Mark Wakeham from Environment Victoria cautioned it will have to prove it doesn’t impact marine life.

Right-wing extremism on rise

Right-wing extremism is on the rise in Australia with the potential for violence to be used, according to experts.

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Professor Geoff Dean from Griffith University is the co-author of a recent study published in the Journal of Policing, Intelligence and Counter Terrorism.

Prof Dean says there is evidence of a significant shift in Australia’s right-wing movement towards a more extreme far-right ideology and, in some instances, violence.

The study identified six core themes to the “new” right-wing groups; anti-immigrant, anti-establishment, protection of western values, commitment to democratic reforms, traditional values and a “strong state”.

It examined the online comments of four “new” groups (Reclaim Australia, United Patriots Front, Australian Liberty Alliance and Nationalist Alternative) as well as four “old” groups (Blood and Honour, Southern Cross Hammerskins, Women for Aryan Unity and Australian Sovereign Citizens).

Prof Dean told AAP there had clearly been a rise in right-wing extremism not only in Australia but globally.

“It’s spread through America and France, and Australia is not immune to that,” he said.

“And Pauline Hanson is riding on the back of that.”

Prof Dean said right-wing extremism represented three types of threat to western society; political, security and community.

“The political threat is about gaining political support and a broad base. Their populist politics resonate well, especially when globalisation has taken peoples’ jobs away.

“Remember it was the rust belt of America that put Trump in.”

He said the security threat was about inciting violence and it was the “old groups” or disaffected members of the radical right who were more likely to be involved.

“The security threat is minimal, but it’s there,” Prof Dean said, pointing to last year’s arrest of a Melbourne right-wing extremist for plotting a bomb attack.

The community threat is illustrated by Senator Hanson’s campaign for a ban on Muslim migrants.

“If they can create a backlash against all Muslims … all (right-wing political groups) have something to gain,” Prof Dean said.

“They want to create a community out of fear.”

He said right-wing groups were not a homogenous movement, but there were some basic steps governments could take to reduce their support base.

“Long-term solutions have to be at the political level – where people feel the government is helping them rather than just delivering political spin,” Prof Dean said.

Tackling the rising cost of living and unemployment, taking on the banks, providing a more nuanced picture of Muslims, and explaining globalisation were some of the steps which could be taken.

The brothers who bombed Nazi Germany

In war-gripped London – then occupied by eight million people – Murray Maxton stumbled upon his brother in a small cafe in The Strand.

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After overcoming a bout of the measles, the RAAF pilot was picking up the mail at Australia House in 1943 when he thought he would grab a coffee.

“You wouldn’t believe this but there was my brother sitting there,” he said.

“I didn’t even know he was in London.”

Murray and Eric, a wireless operator, realised they were both being sent to an airfield in Lincolnshire the next morning.

“We went and had too many beers – forgot about the coffee.”

That serendipitous meeting would begin a rare military association – they flew in the same Bomber Command crew over Germany.

“Wherever I went in the air there he was with me,” Murray said.

Their mother was kept in the dark until they had completed their 30 operations.

Both didn’t want to join the army because their father, who was gassed in the First World War, warned them against it.

Murray couldn’t join the navy as he didn’t have the education after leaving school at 14.

Now well into his 90s he recalls being none too happy about bombing German cities towards the end of the war.

“But when I heard what (Hitler) was doing to the German jews, gassing them then I thought everyday we could shorten the war, we’d just bomb the hell out of them.”

Murray was on the “hotline to heaven” one night – their 27th mission – when a German night fighter damaged their aircraft. While Eric fired shots at the enemy, Murray corkscrewed the plane into a cloud and to safety.

Visiting the Australian War Memorial in Canberra on Friday, Murray stepped into the cockpit of ‘G for George’ – the Lancaster bomber he flew once to the south of England.

He remembered the main spar being much lower – but then again he was only 20 back then – but the throttles and controls were all the same.

His visit to the memorial coincides with the 75th anniversary of RAAF squadrons joining combat operations with Bomber Command.

“These men were the brightest and the best,” memorial director Brendan Nelson told reporters.

“They volunteered knowing only 40 per cent would survive the 30 operations.”

After the war Murray moved to a farm outside Albany and agreed to a mate’s request to give a young German a job.

They worked alongside each other for years before he discovered he was one of Hitler’s bodyguards.

“He’d never take his shirt off because the SS were branded under the arm,” he remembered, even on a day that reached 100 degrees.

“We never mentioned the war.”

Murray said he married a good cook and the pair made apple pies every day for 30 years – nowadays they’re self-funded retirees.

“I’m proud to say I haven’t cost Australia one cent. I’ve paid my taxes, earnt enough money to retire on and we’re just going to live happily every after.”

US factory activity, private payrolls up

US factory activity has ticked up in May after slowing for two straight months and private employers have stepped up hiring, suggesting the economy is regaining speed after struggling at the start of the year.

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The signs of renewed vigour in the economy and labour market tightness could encourage the Federal Reserve to raise interest rates later in June.

“The economy is moving forward at an acceptable pace and the Fed is likely to hike rates in June, but there is a cloud over the path of rates later on this year,” said Chris Rupkey, chief economist at MUFG in New York.

The Institute for Supply Management (ISM) said its index of national factory activity ticked up to a reading of 54.9 in May from 54.8 in April. The index hit a two-and-a-half-year high of 57.7 in February amid optimism over President Donald Trump’s pro-business policy proposals.

It had declined for two consecutive months as concerns mounted in the business community that political scandals could derail the Trump administration’s economic agenda, including its push to cut corporate and individual taxes.

A reading above 50 in the ISM index indicates an expansion in manufacturing, which accounts for about 12 per cent of the US economy. The manufacturing recovery remains underpinned by the energy sector as steady increases in crude oil prices boost drilling activity, fuelling demand for machinery.

The ISM survey’s new orders sub-index increased to 59.5 in May from 57.5 in April. A measure of factory employment jumped to a reading of 53.5 from 52.0 in April. Manufacturers of food and fabricated metals products reported difficulties finding qualified workers.

Manufacturers continued to steadily increase inventories and still viewed their customers’ stocks as too low, according to the survey. While raw materials prices rose for a 15th straight month, the pace of increase slowed sharply in May.

The upbeat economic data helped lift US stocks, with each of the major indexes hitting record highs. The dollar rose against a basket of currencies, while US Treasury debt prices fell slightly.

The ADP National Employment Report showed private payrolls increased by 253,000 jobs last month, beating economists’ expectations for a gain of 185,000 jobs. Private payrolls rose by 174,000 jobs in April.

The ADP report is jointly developed with Moody’s Analytics and was released ahead of the Labor Department’s more comprehensive nonfarm payrolls report on Friday, which includes both public and private-sector employment.

The ADP report, however, is not a good predictor of the private payrolls component of the employment report. According to a Reuters survey of economists, payrolls likely increased by 185,000 jobs in May after a gain of 211,000 in April. The unemployment rate is forecast to be unchanged at a 10-year low of 4.4 per cent.

Still, the ADP report added to data this week showing an acceleration in consumer spending in April.

The economy grew at a 1.2 per cent annualised rate in the first quarter. The Atlanta Fed is forecasting gross domestic product increasing at a 4.0 per cent pace in the second quarter.

Minutes of the Fed’s May 2-3 policy meeting, which were published last week, showed that while policymakers agreed they should hold off hiking rates until there was evidence the growth slowdown was transitory, “most participants” believed “it would soon be appropriate” to raise borrowing costs.

The US central bank hiked rates by 25 basis points in March. It is expected to do so again at its June 13-14 policy meeting.

In a third report on Thursday, the Labor Department said initial claims for state unemployment benefits jumped 13,000 to a seasonally adjusted 248,000 for the week ended May 27.

It was the 117th straight week that claims were below 300,000, a threshold associated with a healthy labour market. That is the longest such stretch since 1970, when the labour market was smaller.

A Labor Department official said claims for California and seven other states were estimated because of the Memorial Day holiday on Monday, which could have distorted the data.

The four-week moving average of claims, considered a better measure of labour market trends as it irons out week-to-week volatility, rose only 2,500 to 238,000 last week.

“While the claims report put a damper on what has been a pretty upbeat run for most of the recent labour market data, we still have a fairly favourable view of labour market conditions,” said Daniel Silver, an economist at JPMorgan in New York.

The Fed on Wednesday said in its Beige Book report of anecdotal information on business activity collected from contacts nationwide that labour markets continued to tighten from early April through late May.

It also said “most” districts had cited worker shortages across a broadening range of occupations and regions.

A fourth report by global outplacement consultancy Challenger, Gray & Christmas showed layoffs announced by US-based employers surged 41 per cent to 51,692 in May. Nearly 40 per cent of the job cuts were announced by Ford Motor Co, according to the report.

‘Make our planet great again’: Macron tells Trump it’s a ‘mistake’ to abandon Paris agreement

And cheekily adapting the nationalist slogan used by Trump on his election campaign trail, Macron urged defenders of the climate to “make our planet great again.

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In a TV address broadcast both in French and English, Macron said he respected Trump’s decision, “but I do think it is an actual mistake both for the US and for our planet.”

“Climate change is one of the major issues of our time. It is already changing our daily lives but it is global,” Macron said.

“Everyone is impacted and if we do nothing our children will know a world of migrations, of wars of shortage, a dangerous world, it is not the future we want for ourselves, it is not the future we want for our children, it is not the future we want for our world.”

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Referring to Trump’s idea of redrawing the 2015 accord, he said, in the French version, “we will not in any way renegotiate an agreement that is less ambitious” than the present one.

“I reaffirm clearly that the Paris Agreement remains irreversible and will be implemented not just by France but by all the other nations,” Macron vowed.

He added: “To all scientists, engineers, entrepreneurs, responsible citizens who were disappointed by the decision of the president the United States, I want to say that they will find in France a second homeland.

“I call on them, come and work here with us, to work together on concrete solutions for our climate, our environment.”

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Macron said that he would move swiftly to define “a common strategy and to launch new initiatives” with France’s partners.

“We will succeed because we are fully committed, because wherever we live, whoever we are, we all share the same responsibility: make our planet great again,” said Macron, tweaking the “Make America great again” slogan promoted by Trump.

Bombers need Hooker up forward: Worsfold

Essendon coach John Worsfold insists he has no plans to send misfiring forward Cale Hooker back to a defensive post.

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Hooker, an All-Australian defender in 2014, was held goalless in last week’s loss to Richmond, but will line up in attack when the Bombers face Greater Western Sydney on Saturday.

Former Melbourne great Garry Lyon blasted Hooker’s performance, saying he played like “he has no clue what he’s doing” in the loss to the Tigers.

The 28-year-old, who is in the first season of a lucrative five-year deal, has managed just 16 goals in 10 games in 2017.

“At the moment we think that our best forward line has Cale in it,” Worsfold told reporters on Friday.

“We’re really pleased (with him) … our forward line efficiency has been outstanding.

“The one game we won the inside 50s we won by 10 goals. So there’s other areas of our game that we’ve got to improve to make sure that that forward line gets more opportunity.

“Cale’s performed the role pretty well.”

The Bombers are currently ranked 16th in the competition for inside 50s, averaging 46.9 a game.

Worsfold made three changes for the Spotless Stadium clash, recalling Martin Gleeson, Brent Stanton and Ben Howlett.

James Kelly (groin), Darcy Parish (calf) and Matt Dea (omitted) all depart the side that sits 11th on the ladder with a 5-5 record.

Parish will likely miss two games and resume after the Bombers’ bye round, but the news isn’t as good for Patrick Ambrose, who has re-injured the quad muscle that has kept him out since round five.

Matthew Leuenberger has recovered from the illness that ruled him out last week, but Tom Bellchambers was preferred to lead the ruck against the Giants after his 40-hitout performance in round 10.

“Tommy had an interrupted pre-season, so Leuey was in there through being available and up and going,” Worsfold said.

“And it was up to Tommy to stay in really good form and wait for opportunities, which he did.

“Now the pressure’s back on Leuey to win the spot back.”

Essendon midfielder Brendon Goddard will play his 300th AFL game on Saturday. Worsfold said the 32-year-old’s form warranted a new contract for 2018, but added a decision won’t be made until later this season.

Concerns over growing shisha tobacco black market

A federal politician and Australia’s customs agency fear a decade-old tax change has turned ethnic business owners away from legally importing tobacco popular in shisha bars.

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Molasses tobacco is commonly smoked through water pipes and is popular in Sydney and Melbourne ethnic communities in so-called “shisha,” or “hookah,” bars.

The tobacco is placed in a pipe, then heated by charcoal, and smokers inhale it through a mouthpiece.

But a federal politician warns a change in the way wet shisha tobacco is taxed may have opened a window for a black-market trade.

South Australian senator Skye Kakoschke-Moore is sitting on parliament’s inquiry into illegal tobacco.

“Nobody seems to know exactly how much of this product is coming into Australia that’s not being declared and how big the actual market is. We know from KPMG that they estimate the entire illicit tobacco market in Australia is around 14 per cent. Border Force disputes that, but they don’t have their own model yet to determine how much of the market is illegal.”

In 2008, tariff rules were changed so the tax on molasses tobacco was based on its overall weight, rather than just its tobacco content.

That made it more expensive.

The wet, heavy substance contains more than just tobacco, including ingredients such as honey, glycerin and chemicals to give it flavour.

Australian Border Force commissioner Roman Quaedvlieg told a Senate Estimates hearing last month molasses tobacco’s popularity and the declared amounts entering the country appear to conflict.

“There is a disparity between declared molasses and what we think is the consumption rate. That tells me indicatively that we have an illegal molasses-importation problem, and it’s something that we’re looking at.”

Senator Kakoschke-Moore says authorities should have anticipated it.

“It has been nearly a decade, and I think what’s happened here is there’s been a breakdown, in terms of forward planning. When the tax office changed their treatment of shisha, I don’t think that they anticipated it would drive the market underground to the extent that it did and that, in 10 years’ time, we’d be in a situation where the majority of our shisha has been imported illegally.”

Melbourne shisha-bar owner Ali Adam says the 2008 tax change had a severe effect on his business.

“When that happened, probably we lost about 30 to 40 per cent of our customers, just due to the price rise. (If) we start charging fair tax for this product, that will stop the smugglers, it will stop everything. (If) that will be the right price, it will go through the right channels.”

Senator Kakoschke-Moore says she is worried the profits made on shisha tobacco could be funding crime.

“It could be quite sophisticated criminals operating in a broader criminal network. The AFP have said that they would only look at this issue if they believed that there was a link between the importation of shisha and broader criminal-network involvement. Anecdotally, they’re starting to see that now. I would like to see that anecdotal evidence move to hard physical evidence.”

Border Force deputy commissioner Michael Outram says he agrees it needs further investigation.

“We’ve taken on investigations in relation to molasses tobacco. Again, one of the areas that’s of potential concern for us is the amount of money that can be raised and then sent back to other parts of the world and then used for nefarious purposes, and that’s another angle that we’re looking at.”

Last year’s federal Budget boosted funding for the Border Force’s Tobacco Strike Team by $7.7 million over two years.

Border Force officials say the force has expanded its mission from simply intercepting illegal tobacco shipments at the borders to disrupting and dismantling organised-crime rings.

 

Emissions scheme needed for electricity

The Turnbull government is under renewed pressure to establish an emission intensity scheme after two of its agencies said it was their preferred option for affordable, secure and lower emissions electricity generation.

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In joint advice to the government, the Australian Energy Market Commission and the Climate Change Authority recommended better integration of energy and emissions reduction policies.

Doing so would help keep electricity prices as low as possible while improving power system security, they said in a report released on Friday.

It’s the second report in six months to endorse an EIS, following a draft report by Chief Scientist Alan Finkel who described the scheme as having “the lowest economic costs and the lowest impact on electricity prices” of all options.

Dr Finkel’s final report will be released next week.

Energy Minister Josh Frydenberg has ruled out an EIS, saying it would “push out” coal-fired power generators and destabilise the electricity grid.

Crossbench senator Nick Xenophon – who convinced the government to commission the AEMC-CCA report – said the Liberal-Nationals coalition would be “toast” at the next election unless it took action to bring down power prices and improve electricity reliability.

“This would mean cheaper prices and it would mean more energy security,” Senator Xenophon told reporters in Canberra on Friday.

“Unless we solve the energy crisis in this country, expect to see tens of thousands of jobs being lost, expect to see industries leaving our shores because energy-intensive industries cannot afford gas prices doubling and tripling.”

He said bipartisan support for such a policy would unlock billions of dollars in investment.

Senator Xenophon will meet with government figures next week to discuss the issue.

However, he ruled out using support for an EIS as leverage for passing budget measures through the Senate such as the schools funding plan.

Labor energy spokesman Mark Butler said it was unfortunate the government had rejected an EIS.

“It is endorsed by industry, the energy market, and experts as the way to deliver clear energy policy to stop the investment strike in new generation, cut pollution and transition to modern, clean energy,” he said.

Australia is committed to a 26 to 28 per cent reduction by 2030 of emissions on a 2005 baseline.

The CCA said in the report that in the absence of government support for an EIS, a low emissions target for the electricity sector should be considered.

The target could be expressed in terms of low emissions generation or it could be set in line with a desired level of emissions intensity per unit of electricity generated.

However, the AEMC said such a target was unlikely to be as effective as an EIS.