Money Games

TPP: Devil in the detail

Media commentators have begun sifting through the fine detail of the Trans-Pacific Partnership (TPP), a trade and investment agreement between 12 countries, since it was officially signed last week.

MOJO-Business-Logo (1)The AFR reported the trade pact will “eliminate 98 per cent of all tariffs for the export of beef, dairy, wine, sugar, rice, horticulture, manufactured goods, resources and energy”.

“[It will] set sweeping new rules for trade, investment, intellectual property, labour, e-commerce, the flow and storage of data, state-owned enterprises and the environment across Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam.”

The Guardian published an explainer on how the TPP will affect certain industries in Australia.

Experts in intellectual property and innovation law, public health and law evaluate the trade pact’s “winners and losers” in The Conversation.

Trade Minister Andrew Robb said at a press conference in Atlanta the pact will “turbo charge regional supply chains and global supply chains and reduce costs”.

Prime Minister Malcolm Turnbull said it was a “giant foundation stone for our future prosperity”.

But the details of the trade pact haven’t been disclosed with negotiations taking place in private. Leaks from whistleblower organisations have provided most of the information in the public domain.

In Crikey, economist and freelance journalist Jason Murphy wrote that certain parts of the trade pact have raised concern among economists and the wider public.

These include the Investment-State Dispute Settlement (ISDS) mechanisms, which allow multi-national corporations to sue foreign governments for introducing legislation adverse to their interests.

But safeguards have been carved out to prevent corporations suing governments over regulations that are in the public interest.

Mr Robb said this would prevent tobacco giant Phillip Morris International from taking action against the Government over its plain packaging laws.

But Crikey political editor Bernard Keane questioned the effectiveness of the safeguards.

“Taxation will not be protected from ISDS suits, meaning if Australia undertook serious efforts to prevent multi-nationals avoiding tax, they could be thwarted via a lawsuit from a multi-national corporation,” he wrote.

But in The Conversation, Jean Monnet Chair in Politics and Economics at Monash University Remy Davison and Jessi Canny, from Politics & International Relations, wrote that Australia had previously signed up to ISDS provisions in 26 trade agreements.

Companies are unsuccessful in suing governments under ISDS in 86 per cent of cases, they wrote, meaning “[it] will be no more controversial under TPP than under any previous agreements”, they wrote.

But the devil in the detail is expected to create barriers for passing the trade pact in the parliaments of 12 nations before it is enacted.

The Greens oppose the TPP, while some crossbenchers have also shown their dissatisfaction for the deal.

But Labor is “broadly supportive of the [trade liberalisation] arrangement” in theory, but is holding back from showing outright support until they see the full text.

‘Inevitable’ end for high Sunday penalty rates

Malcolm Turnbull said on 3AW radio that it’s “inevitable” that Sunday penalty rates will be reduced in the near future.

He said weekend rates should be adjusted to reflect the fact that we live in a “seven-day economy”.

Staff only earn double the hourly wage on Sunday, compared to time-and-a-half on Saturday because of Australia’s church-going history, he said.

An August Productivity Commission report recommended Sunday rates be reduced to time-and-a-half to boost employment and encourage businesses to open up on the weekend.

Some commentators have noted that high Sunday rates have not slowed growth in the hospitality sector.
Some commentators have noted that high Sunday rates have not slowed growth in cafes and restaurants.

But Ben Eltham wrote in New Matilda: “Penalty rates do not seem to be holding back Australia’s booming café and restaurant sector.”

The closure of most banks, law offices, accountancy firms and the Australian stock exchange reflect the fact that the seven-day economy “simply isn’t true”, he wrote.

Bernard Keane wrote in Crikey that the rate of growth in the hospitality sector exceeded the overall economy.

Employment in food and beverage service grew 18 per cent in the past five years, he wrote, disproving the idea that penalty rates were “killing businesses and costing jobs”.

“Cutting penalty rates now would exacerbate the current problem of weak, or non-existent, wages growth, which is not helping overall demand levels or the government’s fiscal problems,” he wrote.

Liberal Democrats senator David Leyonhjelm wrote in the AFR that he introduced a Bill in August to retain penalty rates on public holidays, but remove them during weekends.

“Any business, other than a sole trader, that restricts trading hours is closing off a job opportunity for someone,” he wrote.

“It is ludicrous that business owners are being forced to restrict trading hours, and therefore job opportunities, because regulated pay rates deny profitable trade.

“My Bill removes regulations that are past their use-by date and will encourage new jobs in a vibrant, resilient 21st century economy.”

SBS news reported that Labor leader Bill Shorten and the Australian Workers’ Union were “gearing up to fight the next election on the hot issue of penalty rates”.

But Shorten was criticised for saying that “the extra income is the difference between parents sending their children to private schools over public schools”.

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