View from The Hill: a budget for a pandemic, with next year’s election in mind

Originally published on

Treasurer Josh Frydenberg calls this a “pandemic budget” – one to sustain the economy in times that are still uncertain – but it also has a substantial element of an election budget.

That’s not to suggest Prime Minister Scott Morrison will rush to the polls this year. But given the election has to be held by May 21, 2022, this is likely to be the last budget of the cycle. Another could be squeezed in, as in 2019, but it would have to be brought forward from the normal time.

Last year the treasurer said budget repair and debt repayment – otherwise known as the hard and unpleasant decisions – wouldn’t be undertaken before unemployment was “comfortably” below 6%.

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Vital Signs. The RBA wants to cut unemployment, and nothing — not even soaring home prices — will stand in its way

Now unemployment is 5.6% (the March figure) but Frydenberg has shifted the goal posts, so the emphasis remains on recovery, with more difficult reckonings a way off – beyond the election.

Given a grim COVID picture internationally and a long way to go with the vaccine program locally, that is sound – and also politically convenient.

In this budget, the government’s policy approach is firmly aligned with that of the Reserve Bank, with Frydenberg embracing the bank’s objective of pushing unemployment well below pre-pandemic levels, which means to a rate with a 4 in front of it.

Two central spending areas in the budget have been, in effect, imposed on the government.

It had to respond to the damning findings of the aged care royal commission. The fact most Australian COVID deaths occurred in aged care underlined how unfit for purpose the system is. Frydenberg told the ABC there will be more than $10 billion spending on aged care over the forward estimates.

The budget’s “women’s” focus — a sharp contrast to last year — has drivers that go beyond the urgent need to do more to combat violence against women, and other imperatives.

Morrison’s “women problem”, which exploded with the demonstrations following the high-profile allegations of rape, most obviously increased the attention on women in this budget, which will include a women’s statement with initiatives on health, safety, and economic security.

Also, Labor’s decision to make childcare one of its main policy pitches, promising a big spend, reinforced economic considerations pushing the government to produce its own childcare policy (which doesn’t start until July 2022).

Even in the middle of the pandemic last year, few would have thought that by now we’d still have no firm idea when our international borders will re-open.

Morrison is cautious about it, and judges that’s in line with the thinking of the Australians public at the moment. He can read those state electoral results as well as anyone — he knows people put health safety above all else.

“International borders will only open when it is safe to do so”, he said on Facebook at the weekend. “Australians are living like in few countries around the world today.”

On the other hand, the pressure for students to come, migration to resume and people to be allowed to travel must build sooner or later.

The budget’s assumptions will put the reopening in 2022, Frydenberg told the ABC at the weekend.

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Frydenberg promises housing breaks in ‘pandemic budget’

Economist Saul Eslake says while keeping the country closed to the outside world is obviously not sustainable in the long run, it has, in a perverse way, some short run plusses for the government’s economic objectives.

“It’s very easy to get unemployment down when the border is closed. You only need to create 5000 new jobs a month to prevent unemployment rising.

“Previously [with migrants coming] you needed 16,000 new jobs a month. Currently we’re creating 60,000 a month,” Eslake says.

Migrants stimulate growth. But so does having Australians unable to travel overseas, Eslake says. They can only spend domestically – or save – the $55 billion they would normally be spending abroad. They appear to be spending quite a deal of it on things like home equipment, furnishings, renovations, cars, and even clothing.

While fiscal repair is formally delayed, the budget will show it is gradually, to a degree, repairing itself.

The quicker-than-expected bounce back of the labour market, which reduces welfare costs and boosts tax revenue, and the similar rebound in corporate profits, help the bottom line. Frydenberg says that, despite JobKeeper coming to an end, 105,000 people came off income support in April. High iron ore prices are also a godsend to revenue.

Chris Richardson, from Deloitte Access Economics, has forecast a deficit for this financial year of about $167 billion, compared with the December budget update figure of $198 billion. For 2021-22 , the Deloitte forecast is a deficit of about $87 billion compared with the update’s forecast of $108 billion.

Still, a balanced budget will be some years off, Richardson says.

He gives four reasons: substantial structural spending on aged care, mental health, childcare, disability and the like; low wage and price inflation (inflation helps budgets); missing migrants; and interest payments on debt (helped by low interest rates but still significant).

On what we know, the budget will be safe rather than adventurous. And while budgets can always unexpectedly trip over their own feet, and inevitably have plenty of critics, this will be the sort of benign one that doesn’t go out of its way to hurt or offend voters.

Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

Frydenberg promises housing breaks in ‘pandemic budget’

Originally published on

Josh Frydenberg says he will bring down a “pandemic budget” on Tuesday, warning that despite Australia’s strong recovery, there is “still a great deal of uncertainty out there”.

The Treasurer points to new strains of the coronavirus, the COVID crisis raging in India, and local lockdowns. “We can’t take for granted the strong economic recovery we’ve seen. We’ve got to lock in those gains,” he said on Friday, speaking to The Conversation.

Touted as big spending, the budget will contain, besides a large reform package for aged care, significant outlays on mental health.

In measures on housing, it will increase from $30,000 to $50,000 the maximum amount of voluntary contributions aspiring home buyers can take from the First Home Super Saver Scheme.

This scheme allows people to make voluntary contributions to superannuation to save for their first home.

At present these contributions are capped at $15,000 a year and $30,000 in total.

With the rise in house prices, the current cap on the amount that can be released is a diminishing proportion of the deposit needed.

There will also be another 10,000 places added to the First Home Loan Deposit Scheme, which can only be used for new housing. This means-tested measure allows first home buyers to build a new home or buy a newly-built one with a deposit of as little as 5%.

The budget will have an “improved bottom line, particularly in 2021”, compared with the earlier forecasts, Frydenberg confirmed.

This will be thanks in large part to a stronger-than-expected labour market as well as high iron ore prices.

The aim of pushing unemployment down below 5% will be a central feature of the budget.

“There’s a historic opportunity to drive the unemployment rate back to where it was pre pandemic and even lower,” Frydenberg said.

“And that’s why in this budget, you’ll see significant investments in energy, infrastructure, skills, the digital economy and lower taxes. Strengthening our economy will lead to a stronger budget position.”

Frydenberg said the dire predictions about what would happen with the end of JobKeeper in late March had not been fulfilled. In fact fewer people had been on income support after JobKeeper ended.

“And what you’ll see is that the budget improves as a result of the labour market strength, even more so than it does as a result of the higher iron ore price, because you get lower welfare payments and you get more tax revenue coming in from people at work.”

The budget will push out the assumptions about when Australia will reopen its international border. Last October’s budget assumed the border closure easing by the latter part of this year.

Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

Vital Signs. The RBA wants to cut unemployment, and nothing — not even soaring home prices — will stand in its way

Originally published on

Ahead of the definitive official read of the economy from the treasury in the budget on Tuesday, the Reserve Bank has given us two special insights into its own thinking in the space of 14 hours.

They suggest that (first) the economy is improving, and (second) the bank is not going to let up on driving that improvement, not for anything — including concern about climbing home prices — until it has pushed unemployment down and wage growth back up to where it believes it should be.

The first insight was in Deputy Governor Guy Debelle’s Shann Memorial Lecture on Thursday night. The second was in Friday’s Statement on Monetary Policy

Growth without inflation

The statement emphasised that the although the bank expects economic growth to bounce back fairly strongly, getting inflation back within the bank’s 2-3% target band and getting wages growth up will take much longer

As the statement put it:

despite the stronger outlook for output and the labour market, inflation and wages growth are expected to remain low, picking up only gradually.

On one measure just 1.1%, the lowest on record, underlying inflation is to climb to 1.5% over the course of 2021 before gradually climbing to close to 2% by mid 2023.

It’s well short of the bank’s target of 2-3% which is only likely to be achieved with much higher wages growth driven by much deeper inroads into unemployment.

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Those inroads will be easier to achieve if COVID is firmly under control.

The bank explicitly linked its forecasts of an improving economy to an assumption that Australia’s vaccine rollout accelerates in the second half of the year. It could have added to that (but didn’t) the importance of getting purpose-built quarantine facilities up and running.

Its baseline forecast has economic growth of 4% in the year to June 2022 and 3% in the year to June 2023.

RBA Statement on Monetary Policy, May 7 2021

But there is a fairly wide range around its downside and upside scenarios.

Economic growth might be as low as 2.5% or as high as 5% in 2022 and as low as 2% and as high as 3% in 2023.

Similarly, the unemployment forecast is somewhere between 4.25% and 5.25% by June 2022 and in a very wide range of 3.75% and 5.5% by June 2023.

RBA Statement on Monetary Policy, May 7 2021

These forecasts produce below-target inflation forecasts of between 1.5% and 2% in June 2022 and 1.5% to 2.25% in June 2023.

What the bank will do to help drive the upside scenario, and what else will need to happen, was laid out by Debelle in Thursday night’s Shann Memorial Lecture.

The Debelle Doctrine

Adjectives like “seminal” are bandied about liberally these days, but for me, Debelle’s speech on Monetary Policy During COVID was a masterpiece.

He began by outlining the suite of measures the bank introduced from the beginning of the pandemic in March 2020. They involved

cutting the cash rate to a record low of 0.25% and then cutting it again to 0.1%

undertaking to not increase the cash rate target until the bank is confident that inflation will be sustainably within the 2–3% target band

cutting the rate paid on private banks’ exchange settlement balances with the bank to 0.1% and then to 0.0%

buying enough three-year government bonds to target a yield of 0.25%, later 0.1%

guaranteeing to buy $5 billion of five-year and ten-year state and Commonwealth week-in week-out whatever the economic circumstances

buying bonds as needed to address the “dysfunction” in the bond market

offering banks cheap lending finance through a new term funding facility

ensuring that the financial system has sufficient liquidity

Debelle methodically described how each of these measures are likely to flow through into economic activity.

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That is, he articulated what economists call the “transmission mechanism” — how the measures work.

As an example, the following chart he provided summarises the transmission mechanism for bond purchases.

And then he delivered the setup for the punchline.

The tools the bank is using might affect all sorts of things, including house prices. But the bank plans to focus on just one thing — getting unemployment down until it gets inflation back up to its target band.

Then the punchline itself: the bank will do this even if it leads to higher house prices

there are a number of tools that can be used to address the issue. But I do not think that monetary policy is one of the tools. Monetary policy is focussed on supporting the economic recovery and achieving its goals in terms of employment and inflation

It was important to remember that while housing prices may not rise as fast without low interest rates, unemployment would definitely be materially higher without low interest rates.

Unemployment has serious consequences.

What it all means

The Debelle Doctrine is that the bank will focus on a narrow range of objectives, and will not be timid about using the tools in its arsenal to achieve them.

This may not be a seismic shift, but it is significant.

It gives the bank a much clearer focus; it gives others a much better way to judge how it is performing; and it makes clear that if the government is concerned about rising house prices, it’ll have to do something itself (perhaps by tightening the tax rules governing capital gains and negative gearing).

Debelle produced a clear, precise, and authoritative statement of what the Reserve Bank can, should, and will do.

In a word, it was gubernatorial.

Richard Holden is affiliated President-elect of the Academy of the Social Sciences in Australia.

How The Conversation’s journalism made a difference in April

Originally published on
A lab technician in South Africa. Jerome Delay/AP

Every month, we ask The Conversation authors what happened after we published their articles. Here are some of their stories from April 2021.

Academic insights reached millions

The story that garnered the most interest from our audience in April was this piece on why new COVID variants necessitate a global ‘maximum suppression’ strategy. It has been read more than 1.1 million times!

It was also republished by more than 28 other media outlets around the world –
including The Guardian, ABC and the South China Morning Post. 84% of its readers were from countries outside Australia.

The second most-read piece was Ritesh Chugh from CQUniversity’s piece on how to deal with water damage to your phone, which received more than 570,000 reads. Ritesh said:

“As an academic, such a wide readership provides great testimony of our public scholarship”

On social media, we turned Shams Rahman and Aswini Yadlapalli from RMIT’s revealing piece on the exploitation of garment workers into an Instagram video, visualising the tiny percentage of remuneration workers derive from an average t shirt’s cost. It was viewed more than 33,100 times.

Putting expertise in front of decision makers

The articles which most clearly impacted government action in April were Lucinda McKnight from Deakin University’s piece about teaching students to work with robot writers, and Marcus Carter from the University of Sydney’s piece on why screen games are still ‘real play’.

Both McKnight and Carter were invited by the NSW Department of Education to contribute their expert analysis to the department’s teaching journal. McKnight was also contacted by a London-based start-up and RMIT academics to discuss artificial intelligence and future advisory collaborations.

After Neeraja Sanmuhanathan from the University of Notre Dame wrote about survivors of sexual assault, NSW Health republished the article in their community health newsletter and she was contacted by a Mandela University psychologist and Curtin University journalist for possible collaboration.

Turning to the NGO space, Anti-Slavery Australia turned four comics The Conversation created for this article by UTS’s Jennifer Burn into four short animation videos. They’re also incorporating them into a course on understanding and identifying modern slavery. It’s good to see the article is still making waves two years on!

Impacting our cultural institutions

Multiple authors have also seen their articles impact museums and cultural institutions.

After Paola Balla’s wrote about Dark Mofo’s call out for Indigenous Australians’ blood, she has been in regular contact with Fiona Hamilton, a Trawoolway artist in Tasmania who has worked with Dark Mofo and MONA over the past seven years. She gave a very detailed account of the troubled history there with local Aboriginal community and artists, and spoke directly with museum owner David Walsh. Hamilton has since severed her working relationship with the museum and its festival offshoot. Paola said:

“Thanks again for the invitation to write for The Conversation, it is my first
time and has been a very rewarding process seeing that Aboriginal community members and other writers and academics have been very supportive. Most importantly Tasmanian Aboriginal artists have shared their approval and support and feel that they are being listened to on a national and international scale.”

After UWA’s Kailah Thorn wrote about how to hunt fossils responsibly Tom Kapitany, rock, mineral and fossil retailer/exporter with Crystal World visited Kailah at the Edward de Courcy Clarke Earth Science Museum where she works. This resulted in a donation from Tom of a local fossil specimen for display in the museum for education and outreach purposes.

Finally, after explaining how DNA and the sequence of coronavirus makes surprisingly lovely music, Mark Temple from Western Sydney University – who
was also a drummer with the 90s Sydney band The Hummingbirds – was
invited to do a public talk and play the music at Sydney’s city recital hall.

US support for waiving COVID vaccine intellectual property is a huge step. Australia must follow

Originally published on

Yesterday, the US Biden administration declared its support for waiving intellectual property rights, including patents, for COVID-19 vaccines.

This decision represents a huge breakthrough in discussions at the World Trade Organisation (WTO) that have been deadlocked for more than six months.

Shortly afterwards, New Zealand’s trade minister Damien O’Connor announced his country’s support on Twitter, quickly followed by Canada’s expression of support for the proposal.

Other nations that have so far resisted pressure to support the waiver are likely to fall like dominoes in the wake of the US in coming days.

Today, Australia’s trade minister Dan Tehan said the waiver “will be an important part of trying to get a resolution in the World Trade Organisation”, but it remains unclear whether Australia has unequivocally thrown its support behind the proposal.

Waiving intellectual property rights is a necessary first step to scaling up the global supply of COVID-19 vaccines and correcting worsening inequities in access to these desperately needed products.

A decision by Australia to support the waiver would indicate we value human lives more than pharmaceutical industry profits, and are committed to bringing the pandemic to an end globally.

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Over 700 health experts are calling for urgent action to expand global production of COVID vaccines

Why do we need to waive intellectual property rights?

The exclusive rights to manufacture COVID-19 vaccines are currently held by a small number of companies that control the global supply. This is despite the huge amounts of public funding funnelled into their development.

Some of these companies have entered into licensing arrangements with other manufacturers to increase production, such as AstraZeneca’s contracts allowing CSL in Australia and the Serum Institute of India to make its vaccine.

But most have not. And no pharmaceutical company has taken steps to share its intellectual property, know-how, and technology through the COVID-19 Technology Access Pool, a platform set up by the World Health Organisation (WHO) for this purpose almost a year ago.

The exclusive rights held by these companies are governed by the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights, commonly known as “TRIPS”. WTO members are required by TRIPS to provide patent terms of at least 20 years, along with other types of intellectual property protection, such as protection of trade secrets.

Suspending patents and other intellectual property rights relevant to pharmaceuticals will remove legal barriers, allowing vaccine developers to enter the market more quickly without worrying about the prospect of litigation over potential infringements of intellectual property rights.

It will also mean vaccines manufactured in one country can be exported to others without having to navigate a legal maze.

What’s been happening at the WTO?

India and South Africa first put a proposal to the WTO in October 2020 for a waiver of certain intellectual property provisions in TRIPS for COVID-19 medical products for the duration of the pandemic. As envisaged by its sponsors, the waiver would apply to vaccines along with other medical products to fight the pandemic such as treatments, diagnostic tests and medical equipment.

Over the ensuing six months, more than 100 of the WTO’s 164 members moved to support the TRIPS waiver proposal.

But several countries have prevented negotiations from moving forward, including the US, the European Union, the United Kingdom, Switzerland, Japan, Brazil, Norway and Australia. If Australia now adds its wholehearted support to the US proposal for a waiver for vaccines, this could help shift the dynamics at the WTO further towards a resolution.

Meanwhile, the pandemic has been accelerating and inequities in vaccine access have been worsening. The director-general of the WHO, Tedros Adhanom Ghebreyesus, noted in April that one in four people in rich countries had been given a vaccine dose, but only one in around 500 in low-income countries had received a dose.

It has become increasingly clear that unless governments take urgent action, the global supply of vaccines won’t be adequate to meet demand for a long time to come. COVAX, the global program for equitable distribution of COVID-19 vaccines, has so far been able to deliver only 54 million of the two billion vaccine doses it planned to distribute by the end of 2021.

Read more:
The best hope for fairly distributing COVID-19 vaccines globally is at risk of failing. Here’s how to save it

Why is the US about-face so significant?

Historically, the US has been the world’s staunchest advocate for intellectual property rights. It has demanded its trading partners provide high levels of protection for IP in exchange for access to US markets, and has named and shamed countries it sees as providing insufficient IP protection, singling them out for trade sanctions.

The change in the US position signals how clearly the success of every country in fighting the pandemic depends on vaccinating the whole world. The risk of variants emerging in areas of uncontrolled transmission means no country can gain control of the situation just by vaccinating its own population.

The US move will give confidence to other countries to support the waiver and will isolate any countries that continue to oppose it.

Source: Médecins Sans Frontières

Does the US support for the waiver go far enough?

The US has agreed to support a waiver only for vaccines. This is short-sighted. COVID-19 treatments could become a more important part of the medical toolkit for fighting the pandemic further down the track — as treatments called “antiretrovirals” have proved crucial to reigning in the spread of HIV. And many countries are lacking sufficient diagnostic tests, which are critical for getting outbreaks under control.

The waiver also isn’t enough on its own: it’s necessary but not sufficient. Governments will need to incentivise pharmaceutical companies — or if they continue to drag their feet, force them — to share their knowledge of manufacturing processes and their technology through initiatives like the WHO Technology Access Pool.

And governments will need to invest in building production capacity in low- and middle-income countries and find solutions to problems like shortages of raw ingredients, rather than relying on the market to solve these structural problems.

What needs to happen next?

Given the consensus-based decision-making process at the WTO, the TRIPS waiver will still need to win the support of the remaining countries standing in the way.

Gaining the EU’s support will probably be the most difficult battle. The EU, where a large proportion of the world’s pharmaceutical companies are headquartered, has so far emphasised donations of vaccines as the way out of the pandemic. But European Commission President Ursula von der Leyen has at least signalled the EU’s willingness to discuss the US proposal.

Once consensus is reached, it will be important for the negotiations to be transparent, with draft texts shared publicly, as the benefits that flow from the waiver will rely on the detail of its wording.

Negotiations will also need to progress at speed. There have been millions of deaths from COVID-19 since the proposal was first tabled six months ago. The world can’t afford another long wait.

Deborah Gleeson has received funding in the past from the Australian Research Council. She has received funding from various national and international non-government organisations to attend speaking engagements related to trade agreements and health. She has represented the Public Health Association of Australia on matters related to trade agreements and public health.

From baby blue-tongues to elephant doulas: motherhood across the animal kingdom

Originally published on

Diana Robinson, Author provided

With Mother’s Day around the corner, it’s a good opportunity to ask what being a mother looks like across the animal kingdom. Most of us have a solid concept of human motherhood, but in nature maternal care comes in many forms.

Let’s take a closer look at the diversity of ways animals provide care, to give young the best chance of success.

The power of the placenta

For many species, life begins in the womb. One of the most significant ways mothers support their young before birth is via a placenta, the temporary organ that grows inside the uterus to support a fetus. Placentas not only act as the interface between mother and baby, but can provide all fetal nutrition, allow for exchange of oxygen and carbon dioxide with the mother, and even remove the fetus’s waste.

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While our close relatives (eutherian or placental mammals) are known for having a placenta, we are not unique in having one. In fact, the placenta has evolved more than 100 times independently in the animal kingdom!

Blue-tongued lizard with her newborn young.
National Parks and Wildlife Service, South Australia

Other placental species include some reptiles such as the blue-tongued lizard, and many sharks including the Australian sharpnose. Even marsupials have a placenta, although it typically only supports young for a few days.

Marsupial mothers

Outside the womb, the queens of maternal care are marsupials such as kangaroos, koalas and Tasmanian devils. Marsupial mothers provide food and protection from predators through a prolonged period of lactation inside the pouch.

In marsupials, pregnancy is relatively short but young spend a long time in the pouch afterwards. For example, tammar wallabies’ pregnancy can be as short as four weeks, but mothers can provide milk to their young in the pouch for almost a year. During this time the babies increase in weight 2,000-fold. In comparison, human infants increase in weight threefold during their first year of life.

A kangaroo mother, looking after her joey in the pouch.
Ethan Brooke/


An African rock python, looking after her eggs. Python mothers will coil around their eggs while they incubate, and can even shiver to keep the eggs warm.
J. Lanki/wikimedia

In contrast to animals that develop a placenta, egg-laying animals typically lay nutrient-rich eggs to support development. Parents of some species consider their job done after the eggs are laid, but others continue to care for their young by protecting the eggs and providing food once the babies hatch.

A Port Jackson Shark egg. After laying eggs, mothers carry them in their mouth and screw them into a secure rock crevice, hoping they will be protected for their 10-12 months of development.
Kate Bunker/flickr

Some egg-laying sharks continue to provide care after birth. Port Jackson sharks carry their eggs in their mouths until they find a protected rock crevice to hide them in.

Hummingbird mothers look after their young without any paternal support.
Mike’s Birds

In birds, mothers provide warmth and protection while incubating their eggs. In some bird species such as hummingbirds, only the mother provides care after birth. However, in other cases, such as penguins, it’s a team effort with mothers and fathers providing food and protection to their offspring.

For some, it takes a village

For some animals, motherhood extends beyond looking after your own children. Like humans, orcas (killer whales) forgo the potential to reproduce later in life by going through menopause.

Menopause may prevent them from raising any more children, but it allows them to divert their efforts to raising the next generation by looking after their grandchildren.

Orcas and a few of their close relatives (including beluga whales and narwhals) are one of the few non-human mammals that forgo reproduction later in life and enter menopause. This allows mothers to continue to support the next generation by looking after their grandchildren.
Gregory ‘Slobirdr’ Smith/flickr

Many animals need even more support, so some species form societies where the whole community will care for the young, rather than just the parents. Meerkats live in groups of up to 30 individuals where parental duties are shared.

Meerkat mother keeping an eye out for predators with one of her pups.
Theo Stikkelman

Younger females will “babysit” the pups while the rest of the mob forage for food, sometimes having to put their own lives in danger to protect the younger members of the group.

Within elephant herds, the mothers provide milk for their babies but other members of the herd (known as doulas, they can be either male or female) provide encouragement and physical support to both the mother and the growing calves. This same behaviour is seen in dolphins, as well as in several primates including chimpanzees and gorillas.

Pregnant male Hippocampus whitei. Seahorse fathers experience male pregnancy, providing nutrition, gas exchange and protection to developing embryos within his pouch.
Marine Explorer

In a few species, it is the father that provides the most care for offspring. For example, seahorses exhibit male pregnancy, providing nutrition and protection from predators while inside his pouch. For a seahorse mother, her care responsibilities end once she has deposited her eggs into the male’s pouch.

If we can learn anything from the animal kingdom, it’s that motherhood comes in many forms.

Oliver Griffith receives funding from the Australian Research Council.

Jessica Suzanne Dudley does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

Why now would be a good time for the Reserve Bank to publish stress test results for individual banks

Originally published on

Set against the backdrop of an economy healing from 2020’s annus horribilis, this week’s Financial Stability Report (FSR) from the Reserve Bank (RBNZ) was cautiously reassuring: the country’s financial system is sound, though vulnerabilities remain.

Banks have managed to increase their capital buffers, allowing them to better withstand losses on loans and mortgages, which has protected the financial system from the pandemic’s economic fallout. With profits stabilising, the outlook for New Zealand’s banks is bound to improve further.

On the other hand, the report expresses concern about increasing house prices and the strong growth of mortgage lending. Specifically, the RBNZ worries about lending to financially vulnerable first-time buyers and highly indebted borrowers.

RBNZ Deputy Governor Geoff Bascand said “risks are building up” and didn’t rule out a sharp correction in the housing market. Seemingly setting the stage for more initiatives to tame a hot housing market, he said “further resilience is needed”.

So, the FSR is a little two-faced. By comparing the present to the immediate past, it creates the impression all is well because important indicators of bank health have improved.

But the report is much less certain about the future. With the words “vulnerability” and “vulnerabilities” mentioned about 20 times in its 60 pages, the reader can be forgiven for thinking New Zealand’s financial system maybe isn’t that sound at all.

Speculation and confusion

The financial press reflects these concerns. One commentator recently warned about the dangers of extended credit growth in the hot housing market and called for lending restrictions.

Another feared the “amount of money being pumped purely into property, not any other assets, comes with huge financial stability risks”.

The trouble is, without proper empirical evidence, these worries are speculative at best, and certainly confusing. Unsupported claims about vulnerability in the banking system also enable officials to experiment with policies that haven’t proved their effectiveness.

A case in point is the proposed introduction of a debt-to-income tool (DTI), which would complement the current loan-to-value restrictions. According to the RBNZ, this would be the best option for supporting financial stability and sustainable house prices over the medium term.

Unfortunately, at the FSR press conference the RBNZ couldn’t clearly explain details of the DTI, nor could it define the concept of sustainable house prices over the medium term.

Politicians may respond to the confusion by promoting seemingly popular policies, but which might not be in the long-term public interest. For instance, the Green Party has called for rent controls, despite ample evidence from economists they’re not necessarily effective.

Let’s see the stress test results

Which brings us to the importance of stress-testing banks — more importantly, publishing individual bank stress test results, rather than the aggregated and anonymised data the RBNZ traditionally presents.

Such data are not helpful for investors and depositors because this approach hides weak banks that, if they were to fail, could put the financial system as a whole at risk.

Before the Global Financial Crisis, it was standard practice to keep stress test results confidential. However, the US Federal Reserve in 2009 took the then highly unusual step of publicly reporting its stress test findings.

It did this because it believed the disclosure would restore confidence in US banks at a time of great uncertainty. And it worked. Not long after the results were published, banks sprang into action and increased their capital buffers without the need for the government to step in.

Without doubt, the 2009 US stress test contributed to the recovery of the American financial system.

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The European Banking Authority (EBA) learned about stress testing the hard way. It too started testing banks from 2009 on, but initially published only anonymised results.

Unfortunately, shortly after the publication of the results, two Irish banks failed, despite being given a clean bill of health. In 2011, Belgian bank Dexia failed after a good test result.

The EBA responded vigorously, going all out to improve stress test transparency. Since 2011 it has published all relevant data on stress testing: scenarios, time lines and individual bank results. This was as much to restore confidence in the EBA itself as to inform investors and depositors about the resilience of the European banking system.

Transparency is good for everyone

Two important lessons can be learned from the US and European experiences.

First, the publication of individual stress test results allows investors and depositors to see for themselves how resilient the banking system is. It nips unfounded speculation in the bud. This is important because, at the moment, the RBNZ and financial press feed speculative narratives about vulnerabilities in the New Zealand financial system.

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Second, it contributes to the credibility of the RBNZ as a banking supervisor, as well as as to the quality of the stress test. Interested parties will comment on what is published, and this will help improve the stress test, which benefits us all.

As a bank supervisor that relies very much on market discipline and transparency, the RBNZ should consider expediting the publication of updated individual bank stress test results. It is clearly in the public interest, and it would end unfounded speculation about the vulnerability of New Zealand’s banking system.

Martien Lubberink does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

ADHD affects girls too, and it can present differently to the way it does in boys. Here’s what to look out for

Originally published on


Two female Australian comedians recently revealed they’ve been diagnosed with Attention Deficit Hyperactivity Disorder (ADHD).

In an interview before her shows at the Melbourne International Comedy Festival, Fiona O’Loughlin alluded to lifelong challenges including disorganisation and inability to sustain attention.

O’Loughlin, 57, described her diagnosis as a “seismic shift” in her life, and said medication has helped her immensely. But her struggle with focus will be a story familiar to many girls with ADHD.

And in an article published this week, Em Rusciano also revealed she’s been diagnosed with ADHD. For Rusciano, too, treatment has been transformative. The 42-year-old wrote on Facebook:

I don’t feel the world coming at me at 100 all the time anymore. The constant sensory overload has stopped. I don’t feel overwhelmed by life quite as much.

While some of us might perceive ADHD as a condition that affects males (particularly boys), it affects girls and women too. And it’s important to understand that the way it presents in girls can be quite different to the way it manifests itself in boys.

What is ADHD?

Best understood as a persistent, and sometimes lifelong, neurodevelopmental disorder, ADHD includes problems with sustaining attention, resisting distraction, and moderating activity levels to suit the environment (for example, sitting in a classroom).

Young people with ADHD vary considerably in their behaviours. A child might exhibit symptoms of hyperactivity-impulsivity (for example, fidgeting and squirming, or frequently leaving their seat in class), or inattention (careless mistakes, trouble focusing in class, difficulty keeping their belongings in order), or more commonly, both. Hyperfocus (an intense fixation on one activity) can also be a symptom.

Of course, these behaviours are common in childhood to varying degrees. Diagnosis is based on whether symptoms are excessive for the child’s age, developmental level, and cultural background (parents across different cultures may differ in whether they see a child’s behaviour as hyperactive or normal).

A diagnosis is only made if there’s clear evidence that the symptoms impair functioning across several life domains such as at school, at home and with friends.

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Does ADHD look different in girls?

Researchers have only recently started to unravel the expression of ADHD in girls.

The way ADHD presents in girls and boys is in many ways similar, but there are a few noteworthy differences. Most importantly, while symptoms of hyperactivity-impulsivity are present across genders (with some studies showing more hyperactivity in boys), symptoms of inattention, which can be easier to overlook, are seen more frequently in girls.

Further, the onset of ADHD symptoms can differ across gender. Symptoms of hyperactivity tend to present early in school life. Inattentiveness, by contrast, has a slightly later onset. So girls with ADHD can often go undetected until academic and organisational demands increase in late primary and high school.

Girls with ADHD are also at higher risk of developing depression and anxiety than boys. If depression and anxiety occur at the same time as ADHD, it can be more difficult to diagnose ADHD.

A range of possible mechanisms have been implicated in the difference in ADHD expression between genders, from hormonal changes, to cognitive differences, to social factors. But we need more research to truly understand the reasons behind the disparity.

ADHD tends to be recognised in boys earlier than it is in girls.

Boys versus girls

ADHD is the most common psychological disorder among Australian youth. The second Australian Child and Adolescent Survey of Mental Health and Wellbeing, published in 2015, reported 7.4% of 4-17-year-olds had ADHD over the previous 12 months.

Interestingly, more than twice as many boys have ADHD than girls. The disparity in prevalence may be a result of ADHD being historically viewed as a male disorder.

This gender difference in prevalence has prompted controversy about diagnostic criteria and brought the female expression of ADHD into sharper focus.

There’s some suggestion the current diagnostic framework, developed on male-dominated samples, is inadequate for girls and sees more boys than girls get a diagnosis. Some researchers have suggested symptom thresholds for diagnosis in girls should be modified.

Are there female expressions of hyperactivity-impulsivity (for example, internal feelings of restlessness) that could be added to the diagnostic criteria? Should there be gender-specific cut-offs for current criteria (for example, a lower threshold for hyperactivity for girls)?

Until further research is conducted, the jury is out on any changes to the current system.

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Importantly, many parents and teachers have long-held stereotypes of an ADHD child as a disruptive and hyperactive boy with difficulties staying still and keeping on-task. This perceptual bias influences who they recognise as potentially having ADHD and refer to treatment.

Research shows even when students display equivalent levels of impairment, teachers still refer more boys than girls for ADHD treatment.

Some signs of ADHD in girls

Does your child do the following more than other children of her age?

make careless mistakes
daydream or appear spaced out
fail to pay close attention to details
have difficulty remaining focused in class, reading, homework, conversations
doesn’t seem to listen (appears distracted)
have difficulty organising tasks and materials
is reluctant to engage in tasks that require mental effort (schoolwork, homework)
often loses everyday things
is forgetful in daily activities.

Keep an eye out for an increase in symptoms in late primary or early high school, as workload increases.

A good rule of thumb for when it’s time to seek help is when a child is starting to fail, fall behind or perform significantly below their ability either in schoolwork, friendships or family relationships.

There’s no cure for ADHD, but treatment aims to manage symptoms. Across genders, the first line of treatment for children is stimulant medication (such as Ritalin, Adderall or Concerta) and behaviour management (parent training and classroom management).

As more research on female ADHD emerges, we can consider treatment modifications specific to gender.

For many girls, ADHD is a serious and debilitating illness. Ensuring girls are identified early and accurately and that they receive evidence-based treatment is crucial.

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Rachael Murrihy ne travaille pas, ne conseille pas, ne possède pas de parts, ne reçoit pas de fonds d’une organisation qui pourrait tirer profit de cet article, et n’a déclaré aucune autre affiliation que son organisme de recherche.

Grattan on Friday: Unblocking the passage from India

Originally published on


It became clear this week repatriation flights for Australians stranded in India would have to resume ASAP after May 15, whatever the COVID situation in that country.

By going too far in its effort to stop individuals using a third-country “loophole” to get home, the Australian government made it impossible to keep shut the direct flight pipeline.

Cabinet’s national security committee on Thursday approved the resumption as the government finalised arrangements with the Northern Territory, site of the Howard Springs quarantine facility where the arrivals will go.

Meanwhile Chief Medical Officer Paul Kelly was drawing up fresh advice.

The government will give its reasons as to why arrivals from India have become more manageable (although the number will be modest). Notably, it will say the “pause” has provided time to reduce COVID overload in quarantine. By May 14 positive cases at Howard Springs are expected to number between 0 and 5, down from 55 on April 26.

A key reason, however, that won’t be included is that Scott Morrison needs to escape the branding of his government as a moral pariah.

The attack the prime minister has come under is justified, but its strength and breadth are still surprising.

The government would have anticipated criticism from the political left, human rights groups and the like. However, it’s those on the right of the spectrum who have been among the most ferocious, including commentators such as News Corp’s Andrew Bolt and Chris Kenny.

Morrison judged the “quiet Australians” were behind his action. Indeed, one Liberal MP says “80% of the public think the prime minister is a star”. After all, those premiers who closed their borders were heroes to their voters.

But objectively, circumstances are very different when we’re talking about the national border and excluded citizens who are in what amounts to a health war zone.

Even assuming the “quiet Australians” were with Morrison, he could not ignore the near-universal condemnation from a usually divided political class, and he would be disturbed by the sharp reaction from many in the local Australian-Indian community. Most voters will have long forgotten this issue by election time, but those Australians of Indian heritage – to whom Morrison has made a pitch via Facebook – will have longer memories.

It has been impossible to get details from the government about the Australians in India, beyond the basic numbers.

We do know from Australian High Commissioner Barry O’Farrell that the “vulnerable” among the 9,000 registered Australian citizens and permanent residents have increased from 650, the figure given last week, to 900.

We don’t know who the “vulnerable” are and the nature of their vulnerabilities. How many are ill or frail, how many are in financial strife, or homeless? O’Farrell has said they haven’t been asked if they have COVID-19. The Foreign Affairs Department is not answering questions about them.

After last week’s cancellation of all flights from India until May 15, the real trouble for the government came when it went a step further – by invoking the Biosecurity Act and pointing to the act’s penalties to prevent people coming via a third country.

The formal announcement was in a statement issued by Health Minister Greg Hunt, which hit inboxes in the early hours of Saturday morning.

In subsequent days, Morrison tried to row back on the question of penalties. He indicated no one would be sent to prison, and declared it was the media, rather than he or Hunt, that had highlighted jail. The fact the penalty was spelled out in Hunt’s media release was “simply a statement of what the Biosecurity Act does”, Morrison said.

But the government could have left the penalties out of the statement – and made it clear, to those who asked, that it was not on a punitive mission.

For a government so obsessive about controlling its messaging, it is very poor at injecting some subtlety into it.

Indeed, it let its ban appear even worse than it is.

That late-night statement said no one could arrive in Australia who had been in India in the preceding 14 days – meaning there is actually still an indirect long, slow way home (which would land someone here after May 15 if they had left India as soon as the ban came into effect).

Thus former Test cricketer Michael Slater – who has lambasted Morrison on Twitter – is in the Maldives serving out this period. Most of the Australian cricketers have followed him, after their tour was suspended.

On the other hand, most people caught in India don’t have the resources of elite cricketers and their accompanying entourage, and so the option of 14 days in another country is a theoretical one only.

One interesting issue in the use of section 477 of the Biosecurity Act is how the political and the medical elements interacted.

As Kelly noted in his advice to the government, this would be “the first time that such a determination has been used to prevent Australian citizens and permanent residents entering Australia”.

Kelly told the ABC “we were requested to provide advice” on the use of the act, indicating the initiative came from the government.

“There is a particular section under the act which requires that the minister, before he makes a decision, is provided with advice in relation to several matters,” Kelly said.

These include that a ministerial decision must be proportionate, no more restrictive than required, and in place only as long as needed.

Kelly gave the necessary ticks.

But in his written advice Kelly went out of his way to spell out bluntly what could be the bad outcomes of the decision, while arguing they could be mitigated. He covered his back.

“I wish to note the potential consequences for Australian citizens and permanent residents as a result of this pause on flights and entry into Australia,” he wrote.

“These include the risk of serious illness without access to health care, the potential for Australians to be stranded in a transit country and, in a worst-case scenario, deaths.”

Kelly is due to appear before the Senate’s COVID committee late Friday; he can expect to be pushed on the circumstances surrounding his advice.

Apart from the political pressure, one reason the government is anxious to have a plan in place for some, albeit limited, repatriation from India is that the legal challenge against the government’s action is in court early next week.

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Regardless of the legal action’s prospects, by outlining its intentions the government will defuse the case’s impact.

And given the agitation among crossbenchers and even some in his own ranks, Morrison also wants to cool this issue, which has flamed out of control, before the start of budget week.

Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

The government has pledged over $800m to fight natural disasters. It could be revolutionary — if done right

Originally published on


To help Australia adapt to climate change and manage the disasters that come with it, the federal government this week pledged A$600 million towards establishing the National Recovery and Resilience Agency, and $210 million for the Australian Climate Service initiative.

The sizeable investments make sense, as Australia’s threat landscape has changed. Climate change, drought, land clearing, urban growth and other activities have significantly increased the chances of natural hazards and disasters Australia-wide. All of which are costly to recover from.

The new organisations could deliver revolutionary benefits to Australia by better aligning policy and practice in a more agile way that matches the complex set of threats we face.

There are, however, issues that warrant attention. It’s not yet clear how the government plans to bring together Australia’s best experts — including policy thinkers, emergency managers, researchers and practitioners — to address the complex, evolving threats. Currently, it seems the role of universities has not been adequately defined.

Australia’s recent disasters

The 2019-20 bushfire season was arguably the most extreme in living memory. It started earlier than what might normally have been expected and made history for its severity and widespread damage to life, property and the environment.

Bushfires weren’t the only natural hazard Australia dealt with during this period. Insurance claims from hailstorms, flooding and bushfire damage for the 2019-20 period exceeded $5.19 billion.

The March floods in western Sydney peaked at a staggering 12.9 metres.

Then came the severe flooding across New South Wales in March, which peaked at 12.9 metres. As of March 23, policyholders had lodged up to 11,700 insurance claims associated with these storms.

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While these recent disasters were unprecedented in their scale and impact, we can expect disasters in the future to worsen due to climate change, from longer heatwaves to intensifying cyclones and a range of cascading and cumulative impacts on society.

This is why the federal government’s announcement this week is extremely important.

So what will these initiatives do?

The new organisations are in response to recommendations from the recent bushfire royal commission, and as part of next week’s federal budget.

The National Recovery and Resilience Agency will be led by former Northern Territory chief minister Shane Stone, and brings together the responsibilities of the national agencies in charge of flood and bushfire recovery.

Its job is to oversee $600 million that will go towards new programs for disaster preparation and mitigation. It’ll focus on minimising disruptive impacts on communities and assist in making them ready to face future disasters. It will also administer the $2 billion National Bushfire Recovery Fund on an ongoing basis.

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A key enabler of this is the National Climate Resilience and Adaptation Strategy, which is currently getting updated after its first release in 2015. The new strategy will be released later this year, and should be vital in underpinning the direction of the new agency.

The government must ensure the strategy provides guidance that matches the goals of the new agency – in particular that of building resilience. It’s important to recognise that while disaster response is generally similar across the board, the effects of disasters vary depending on the community, urban and physical features, as well as socioeconomic levels and access to services.

And the Australian Climate Service initiative will, according to Environment Minister Sussan Ley:

help provide an environmental road map in our planning for infrastructure, housing and basic services like power, telecommunications, and water [and in] anticipating and adapting to the impacts of [a] changing climate.

Together, the benefits of both new organisations have the potential to be revolutionary.

They — along with a new national research centre focused on hazard resilience and disaster risk reduction (announced in July last year) — may be the largest realignments in disaster management policy and practice for a generation.

But how they’re implemented and coordinated will, ultimately, determine this.

There’s more to do

A potential issue with the Australian Climate Service Initiative that might limit its effectiveness is its emphasis on the roles of the Bureau of Meteorology, CSIRO, the Australian Bureau of Statistics and Geoscience Australia.

This collaboration means the initiative has access to huge amounts of data, information resources, and links to the National Environmental Science Program and Great Barrier Reef Restoration and Adaptation initiatives.

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But we shouldn’t forget many Australian universities have considerable relevant expertise at their disposal, too. Not including the network of expertise and experience of universities means we may be shooting ourselves in the foot.

What’s more, the National Recovery and Resilience Agency intends to provide accredited training for people working in disaster recovery. The deep training and development expertise of universities is a perfect fit for this goal.

To really embed the benefits, we need to break down historical silos between national, state and local agencies. On-the-ground efforts for disaster risk reduction, emergency management and response, and the broad social aspects of recovery are largely state and local government responsibilities.

Crisis response planning and action is a team-based sport, so getting the federal, state and local governments — and the private sector — involved will help streamline the application of the new disaster policies and protocols embodied in the announced changes across the continent.

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We saw this type of team-based effort at a national level when the emergency national cabinet was established to oversee collaborative decision-making in response to the COVID-19 pandemic. It’s joined-up thinking that enables rapid and more complete decision- making.

In short, we need better collaboration. How we can work together and utilise all our capabilities and capacities are questions that need to be at the forefront of national thinking.

This story is part of a series The Conversation is running on the nexus between disaster, disadvantage and resilience. You can read the rest of the stories here.

Dr Paul Barnes is a Research Fellow in Urban disaster Resilience at the University of New South Wales (Sydney).