IMPLICATIONS EXPLORED FOR NEW ANTI-ENCRYPTION MEASURES

Commentators continue to speculate on the implications of the Government’s Telecommunications and Other Legislation Amendment (Assistance and Access) Bill which was passed into law in a late Senate sitting last week. The law allows Australian security authorities to compel technology companies to provide access to encrypted messages. The Government says the new powers will be used to target terrorists, child sex offenders and other organised criminals, but critics have highlighted several unintended consequences which could arise from the legislation including provisions which would force companies to build a function which allows access to encrypted data. Technology companies argue this could create systemic vulnerabilities which could be exploited by malicious actors who may replicate the bypass function and apply it to encrypted data in other areas, such as online banking, stock trading, voting and critical infrastructure. Technology companies are also concerned that to comply with Australian regulations could require them to reshape their approach to encryption and lead to reputational damage internationally, particularly for Australian companies who export encrypted platforms. The laws will be revisited by the Opposition when Parliament resumes next year, but as its main concern is with overreach the fundamental aspects of the law are likely to remain in place with some amendments.

GOVERNMENT SEEKS TO EXPLOIT OPPOSITION WEAKNESS ON BORDER PROTECTION

Prime Minister Scott Morrison’s Government has attempted to exploit a perceived weakness by the Opposition on immigration and border protection by asserting that its policies will play into the hands of people smugglers and threaten national security. In response, the Opposition has attempted to solidify its position, hardening its support for the Government’s policy of turning back illegal arrivals by boats, while considering a review of the current asylum seeker processing system. Its formal position will be decided at the Australian Labor Party (ALP) Conference next week where it will look to find consensus on potentially divisive issues like this. While the current approach to boat turn-backs has proven successful under successive Coalition Governments, a leaked email this week from the Australian Border Force alleging cost-cutting activities has raised questions about the Government’s commitment to border protection.

OTHER POLITICAL NEWS

Analysis of latest poll results

This fortnight’s Newspoll shows the two-party preferred result remaining at 55 to 45 in favour of the Opposition for the third poll in a row. If an election were held today, a uniform swing would deliver the Opposition an 89-seat majority in the House of Representatives, considerably more than the 77 seats it would need to govern. Mr Morrison’s position as preferred Prime Minister has weakened slightly, with his 12-point lead over Mr Shorten contracting to eight points.

Government reverses its position on a federal integrity commission

Mr Morrison has announced a plan to establish a Commonwealth Integrity Commission which will investigate allegations of corruption against all government bodies. The Commission will be divided into the Law Enforcement Integrity Commission and the Public Sector Integrity Commission, with the latter having jurisdiction over all parliamentarians. The Public Sector Integrity Commission will not involve public hearings and will only be able to investigate complaints raised by other public agencies, prompting criticism from Opposition and crossbench politicians and other commentators that the Commission lacks transparency and potency. Mr Morrison stated his model was designed to avoid the Commission becoming a media circus and aimed to learn from the experience of state based anti-corruption bodies. Mr Morrison had previously dismissed the necessity for such an integrity commission, but the issue attracted significant crossbench support in the final parliamentary sitting period. This announcement is an attempt by Mr Morrison gather support from independents and minor parties, on whom his minority government will rely heavily when Parliament resumes in February.   

OECD WARNS AUSTRALIA OF POTENTIAL HOUSING MARKET CRASH

The Organisation for Economic Co-operation and Development (OECD) has released a report on Australia which warns the housing market could pose a threat to the broader economy. The report suggests inflated house prices and significant household debt could turn the expected gradual market decline into a collapse. While a serious economic downturn is still unlikely, this would restrain consumer spending and limit construction activity enough to slow economic growth considerably. An increase in home loan defaults would also discourage bank lending to businesses, which is already restricted due to the Royal Commission into financial services. House prices in major Australian cities have begun to decline recently, following over a decade of remarkable growth, with house prices in Sydney and Melbourne more than doubling since 2005.

OTHER ECONOMIC NEWS

Opposition Treasurer calls for large surplus

Shadow Treasurer Chris Bowen has stated Australia needs to prepare for a global economic downturn by creating a significant budget surplus. The Government also supports a strong budget surplus and plans to deliver one at in the April 2019 Budget, if not earlier. Despite this bipartisan position, both sides of politics can be expected to announce popular spending measures next year due to the presence of an election, so a rapid expansion of the planned surplus is unlikely.