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GRACosway Weekly Wrap Up
31 March 2017 
Following last week’s improvement in Newspoll results for the Government, a recent Fairfax-Ipsos poll reveals a decrease in support for the Coalition who now sits on 45 per cent compared to Labor’s 55 per cent on a two-party preferred (2PP) basis. Despite remaining preferred Prime Minister on 45 per cent, Malcolm Turnbull’s overall approval rating has also fallen (to 40 per cent). Notably, the latest polling results indicate popular support for a proposed reduction in company tax rates, a key issue on the Government’s upcoming budget agenda.
Severe Tropical Cyclone Debbie lashed Queensland this week as it reached landfall as a category 4 cyclone between Bowen and Airlie Beach and caused significant damage and flooding across the State. In a show of bipartisan support, Prime Minister Malcolm Turnbull and Opposition Leader Bill Shorten jointly toured affected areas in North Queensland earlier in the week, with Mr Turnbull saying the Federal Government will work closely with the Queensland Government to provide ongoing support and assistance in the recovery and reconstruction of services and infrastructure, including the activation of assistance through the jointly-funded Commonwealth-State Natural Disaster Relief and Recovery Arrangements (NDRRA). The Insurance Council of Australia has declared a catastrophe for damage caused by the cyclone and is anticipating thousands of claims, while primary producers also expect to suffer heavy crop losses.
The Federal Government’s $48.7 billion company tax plan faces considerable opposition in the Senate, where the debate will continue across the final sitting day of Parliament until a resolution is reached. Pauline Hanson’s One Nation has withdrawn its support in an attempt to force an intervention regarding the ongoing Queensland sugar industry dispute. In a similar move, Senator Nick Xenophon is withholding his support for the Government’s tax proposal while pressing for action on an emissions intensity scheme for the electricity sector. See the media coverage here.
Plans to amend Section 18C of the Racial Discrimination Act 1975 have been rejected this week, with Labor, the Greens and the Nick Xenophon Team voting down the Government’s proposal to replace the words “offend”, “insult” and “humiliate” with “harass” and introduce a “pub test” in a late sitting of the Senate on Thursday night. In support of the outcome, Labor multicultural affairs spokesperson Tony Burke commented that “Those who attempted to trivialise the damage caused by racist hate speech should hear this message and find a cause that doesn't give licence for insults, offence and humiliation”. The Human Rights Legislation Amendment Bill 2017 passed the Senate late on Friday however, which will introduce operational changes to the Australian Human Rights Commission. See the media coverage here.
Prime Minister Turnbull has announced an Australian Competition and Consumer Commission (ACCC) review into retail electricity prices. In a joint statement, Mr Turnbull and Treasurer Scott Morrison indicated the inquiry will form part of the Government’s broader strategy in maintaining energy security and affordability. The Australian Energy Council (AEC) has suggested the inquiry “will bust the myth that competitive retail electricity markets are the problem”. The ACCC will produce a preliminary report within six months and a final report by 30 June 2018.  See media release: ACCC to review electricity prices.
Following meetings with Chinese Premier Li Keqiang last week, the Government has elected not to ratify a 10-year-old extradition treaty with China. Labor, the Greens and crossbenchers including conservative Cory Bernardi all expressed an intention to disallow the treaty; Foreign Minister Julie Bishop and Trade Minister Steven Ciobo argued for the treaty’s ratification in the hours preceding the Prime Minister’s decision. In response to the decision, Chinese Ambassador Cheng Jingye reportedly told Minister Bishop that Beijing was “disappointed” but approved of the Government’s decision to immediately repeal the treaty and avoid a fruitless Senate debate. See the media coverage here.
In an historic move, UK Prime Minister Theresa May begun the formal process to trigger Brexit, signing a letter to European Council President Donald Tusk to start two years of negotiations with the European Union. During a speech in Westminster, the Prime Minister stated that “This is a historic moment from which there can be no turning back: we are going to make our own decisions and own laws…and take the opportunity to build a stronger, fairer Britain. That is our ambition and our opportunity.” See the media coverage here.
Legislation proposing a “dominant purpose” test for Federal MPs travel expenses has been introduced tinto Parliament, which will create a new Independent Parliamentary Expenses Authority (IPEA) to oversee the entitlements system. A “value for money” test will also be used to minimise unnecessary expense claims. Special Minister of State Scott Ryan indicated that travel expense claims will be published on a monthly basis to ensure greater transparency. See the media coverage here.
The NSW Supreme Court has ruled former Labor Minister Ian Macdonald guilty of misconduct in public office for issuing a mining licence to the John Maitland-run company Doyles Creek Mining in the absence of a competitive tender process. Mr Maitland, who is the former head of the he Construction, Mining, Forestry and Energy Union (CMFEU), has been found guilty as an accessory. A sentencing hearing for both individuals will be held within six weeks. See the media coverage here.
South Australian Member for Florey Frances Bedford has announced her resignation from the Labor Party following preselection of Health Minister Jack Snelling as the next candidate for the Florey electorate. Ms Bedford indicated she will remain in her role until the next election in 2018, at which time she will potentially run as an independent candidate for the seat of Florey. See the media coverage here.
Marilyn Warren has announced her retirement as Chief Justice of the Victorian Supreme Court. Chief Justice Warren was the first female Chief Justice in the Supreme Court of any state/territory who notably advocated for the end of the traditional use of judges’ and barristers’ wigs in the Supreme Court and encouraged greater racial and gender diversity on the bench. See the media coverage here.
The NSW and Tasmanian parliaments sit next week. Federal Parliament will not sit again until after the Budget is handed down in May.


Federal Developments
Federal Parliament has passed legislation to establish the Diverted Profits Tax, which aims to stop multinationals with a global income of over $1 billion and a domestic income of over $25 million from shifting profits offshore. Commencing on 1 July 2017, the new tax will improve integrity in the tax system and is expected to raise $100 million in revenue a year from 2018-19. See media release: Diverted profits tax passes Senate.
Revenue and Financial Services Minister Kelly O'Dwyer has introduced legislation into Parliament to amend the tax system in order to incentivise and reward innovation. The Treasury Laws Amendment (Enterprise Incentives No. 1) Bill 2017 will create a more flexible approach to accessing company losses and allow owners of intangible assets to self-assess to increase their depreciation benefits. See media release: Government improves tax system to encourage innovation.
The Australian Bankers’ Association (ABA) has released its response to the independent review of the Code of Banking Practice. In its report, the peak banking lobby group has supported 61 recommendations in full; 29 recommendations in principle or in part; and nine either required further consideration or were not supported. See media release: ABA responds to Code of Banking Practice review.


Federal Developments
The Senate Environment and Communications References Committee has handed down its report into the retirement of coal-fired power stations. The Committee viewed it as inevitable that many of Australia’s older coal-fired power stations will close in the medium term and several of its recommendations are in line with a view to transition towards renewable energy sources. The Coalition committee members included a dissenting report with no further recommendations;  Labor committee members additionally included their own dissenting report with a further three recommendations. 
Deloitte Access Economics have released Mining and METS: engines of economic growth and prosperity for Australians for the Minerals Council of Australia. The Report found that the economic contribution of the mining and associated industry represents approximately 15 per cent of Australia’s economy and 10 per cent of total full-time equivalent (FTE) employment. This economic contribution was found to be much higher in the Pilbara (WA), the Bowen-Surat (QLD) and Hunter (NSW) regions.
Environment and Energy Minister Josh Frydenberg, Minister for Industry, Innovation and Science Arthur Sinodinos and Minister for Resources and Northern Australia Matt Canavan met with representatives of the pipeline industry to seek support of measures agreed with the gas industry earlier this month. The Government secured commitments to market transparency, peak demand supply and market reform. Read the media release: Gas pipeline companies to work with Turnbull Government to ensure gas delivery.
State Developments
The Weatherill Government has introduced the Emergency Management (Electricity Supply Emergencies) Amendment Bill 2017 into the South Australian Parliament to provide Energy Minister Tom Koutsantonis additional power to activate electricity generators in the event of an electricity supply emergency. The Minister will additionally direct the Australian Energy Market Operator (AEMO) to control the flow of the Victorian interconnector, circumventing the requirement for a State of Emergency declaration. Read the media release: New legislation puts power back in South Australians’ hands.
KGL Resources Limited’s $190 million Jervis Copper-Silver-Gold Project has been awarded Major Project Status in the Northern Territory. Construction is expected to begin by late 2018 at the remote site 270 km north-east of Alice Springs. Resources Minister Ken Vowles said “This Government recognises the importance of the mineral and resources sectors as vital contributors to our economy, creating jobs for Territorians.” Read the media release: $190 million project awarded major project status

Construction of a $1 billion solar battery farm has been announced for the South Australian Riverland and is expected to be operational by December 2017. Lyon Group and Downer EDI – a partnership backed by Mitsubishi and US hedge fund Magnetar Capital – is building the 300 megawatt solar farm with a 400 megawatt hour battery storage capacity. Project head David Green said “we can provide full performance warranties up to 20 years.” The project is not reliant on the 100 megawatt tender announced by the Weatherill Government two weeks ago although the tender outcome could influence the final configuration. Read the media coverage: Lyon Solar $1b solar-battery farm for SA by Xmas.

Federal Developments
Sydney Airport CEO Kerrie Mather has announced her retirement after 15 years in the role. This comes ahead of the corporation’s decision as to whether it will construct the second Sydney airport at Badgerys Creek, which has previously been assessed by Ms Mather as “a deeply uneconomic investment proposition”. Ms Mather will remain in the role until a new Chief Executive is appointed. See media coverage: Sydney Airport CEO Kerrie Mather retires.
Minister for Infrastructure and Transport Darren Chester has announced significant growth in both freight movement and passenger patronage in the domestic aviation sector between January and December last year. Minister Chester indicated that cargo movements increased by 20.5 per cent and domestic aviation saw a 2 per cent increase in patronage to a total of 61.34 million passengers, with a predicted continuing trend in growth based on January 2017 figures. See media release: Domestic aviation continues to grow following strong 2016.
State Developments
NSW Premier Gladys Berejiklian has announced that two new ferry routes will be established from October this year. Premier Berejiklian indicated an additional 85 weekly ferry services will help support services growth, making the Sydney Harbour “a much more attractive transport alternative for commuters”. Minister for Transport Andrew Constance said that the new ferry service will run every twenty minutes in the peak and every thirty minutes during the off-peak. See media release: Ferry nice: more routes, more services.

Federal Developments
More than 1100 medicine brands listed on the Pharmaceutical Benefits Scheme (PBS) will be cheaper from 1 April, with medicines for conditions including high cholesterol, Parkinson’s disease, depression, breast cancer, eczema and psoriasis dropping in price. New treatments will also be added to the PBS, including for two rare cancers, Hodgkin Lymphoma, an advanced type of skin cancer, arthritis, schizophrenia and iron deficiency. Minister for Health Greg Hunt said the reductions are expected to save Australians $135 million over the next four years and will deliver $455 million in savings to the Budget. See the media release: Millions of Australians set to benefit from new and cheaper medicines.
Prime Minister Turnbull has presented Closing the Gap, a report which reveals that all Australian governments are failing to meet targets in reducing the discrepancy in life expectancy and health outcomes between Indigenous and non-Indigenous Australians. Progress has been made in improving Indigenous child mortality and life expectancy however, and a recent decline in smoking rates is expected to contribute to health outcomes in the future.
State Developments
Victorian Health Minister Jill Hennessy officially opened the new $250 million Monash Children’s Hospital, which is expected to meet the growing demand for healthcare in Melbourne’s south-east. The first patients will move into the new hospital on April 19, with an additional 7000 children to be treated each year. See the media release: World-Class Monash Children’s Officially Opens its Doors.
Minister Hennessy has also announced 15 successful projects under the 2016 Victorian Telehealth Specialist Clinic initiative, which will set up new or expand existing telehealth services. Sharing in $5 million of funding, the projects will connect patients to their medical specialists via video consultations, reducing the burden of travel for regional and rural patients. See the media release: Telehealth Boost Brings Specialist Care Closer to Home.
About GRACosway
GRACosway is Australia's leading public affairs and corporate and financial communications counsel. We provide a full suite of integrated services to a range of domestic and international clients across all industry sectors, including public policy, communications, regulatory, issues management and media relations advice. From offices in Sydney, Melbourne, Brisbane, Adelaide, Canberra and Perth (GRA Everingham), GRACosway’s clients benefit from the combined experience, expertise and strategic perspective of our team of professionals in addressing complex and commercially sensitive projects. For more information, visit
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