How Labor became the last champion of neoliberalism

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ESSENTIALS

— Departments to front AI inquiry promising “inclusive growth”

— Zoe McKenzie contrasts colleagues’ blokefest EU trade deal press conference

— PM drives One Nation wedge with staffing offer to David Farley

REQUIRED READING

How Andrew Charlton runs cabinet processes on Anthony Albanese’s behalf — excellent insights from Geoff Chambers for The Australian.

DRIVING THE DAY

DEPARTMENTS FRONT AI JOINT SELECT COMMITTEE, AS LABOR PLANS NEW DATA CENTER LIMITS

All the big departments are fronting the AI joint select committee this morning, as the government desperately seeks a mandate for scaling up data centers. (Voters across the Western alliance are increasingly anxious about them.)

The government will ban AI data centers near residential homes and recreational centers, Ron Mizen reports for AFR, and “force next-generation AI data centres to transition to using renewable energy, and risk having their power turned off if they fail to comply.”

What government departments think about AI

— Data centers shouldn’t force energy prices up or take land meant for housing. (PMC)

— We need domestic capability and “inclusive growth”, but don’t need to build every layer of the AI stack. (Department of Industry, Science and Resources)

— AI will be useful for government work — so long as humans are in charge — but intensify national security threats. (Home Affairs)

— We’re considering AI-specific laws, even though privacy, anti-discrimination and criminal law generally covers it already. (Attorney-General’s)

— AI is more likely to change tasks than eliminate whole jobs, for now. (Treasury)

What departments are worried about on AI

— “Building and maintaining social license.” (PMC)

— “Ensuring Australia does not become a passive, permanent importer of intelligence.” (DISR)

— “Balancing the risks of AI technology with the strategic and operational risks of failing to adopt AI.” (Defence)

— “A risk that developments in AI increase inequality.” (Treasury)

— “AI-enabled surveillance and targeting, AI-enabled remote or autonomous weapons.” (DFAT)

WHO GETS THEIR OWN SLOTS: Defence, DFAT, Home Affairs, Attorney-General’s, DISR, DCCEEW, PMC.

Who’s lumped together: Treasury, Finance, Employment and Workplace Relations.

ANOTHER DAY, ANOTHER MATT CANAVAN EU TRADE DEAL COMPLAINT

The Nationals leader and Coalition trade spokesperson claims the government is “deliberately lying” about the potential benefits of “the worst trade deal in Australia’s history.”

Canavan says the Australian government used EU modeling from 2020 to make the claim that the deal would benefit Australians by “up to $10 billion” a year. DFAT suggests the real figure is more like $7.8 billion by 2030

Yes, but: It’s hard to substantiate a specific number — because a trade deal opens up opportunities, it doesn’t guarantee sales.

Even the best estimate today can’t account for factors such as: What happens to EU-Australia trade if Washington or Beijing slap new tariffs on either side? How are moving exchange rates accounted for?

Of note: The EU study the Nationals are slamming predicts Australia’s GDP gain from a deal will be slightly more than the EU’s; given EU GDP is 12 times greater than Australian GDP, that’s a win for Australia.

Darren Chester, shadow minister for agriculture, said the deal “delivers no material benefits for key agricultural commodities.” DFAT begs to differ in this long list of material benefits.

“Nativist politics”: How Prime Minister Anthony Albanese described the Coalition’s opposition to the deal. He went on in question time to recite the Coalition luminaries, from Mathias Cormann to Simon Birmingham, who back the deal, and the industry groups from the Australian Chamber of Commerce and Industry to the Business Council of Australia to the Minerals Council who likewise support.

WHAT THE COALITION WOULDN’T TELL US:

— What agricultural quotas would be acceptable to them. (The U.K. trade deal is held up as a positive reference point.)

— What they asked from the EU when they were running the negotiations ahead of the 2022 election.

— Whether Donald Trump’s tariffs are a legitimate reason to cut deals quickly and diversify Australia’s export options.

WHAT TRADE DEALS HAVE BEEN RENEGOTIATED?

— On the Australian side: the “China-Australia Investment Facilitation Arrangement.” This is not a free trade agreement and it falls into the difficult but simple category. Difficult because China is a superpower, and simple because it’s authoritarian, not a democratic 27-country union.

— On the EU side: with Mercosur, the 300 million person Latin America trade bloc: This was a debate between two major trading powers. It took 5.5 years to renegotiate, after an initial 19 years of talks.

REALITY CHECK: The European Commission does not have a mandate to renegotiate the deal with Australia, it needs 27 governments to agree to both the renegotiation and its outcome. The bloc isn’t interested in that because it has bigger problems (Hello, Putin! Hello Trump!), and as a 450 million-person market it has other options. Australia, on the other hand, is wedged deeper between the two superpowers and is not negotiating any other deals.

TEA LEAVES: Zoe McKenzie put up a valiant defense of Coalition skepticism on Kieran Gilbert’s News24 show during Thursday lunch hour. Her insistence on JSCOT “careful consideration” was entirely at odds with the bloke-fest press conference of Canavan, Chester, Ted O’Brien and Dan Tehan. McKenzie made a good point that Labor could provide a “letter of comfort” on the deal’s climate provisions, signaling only an egregious breach of Paris commitments would prompt action to suspend the deal.

One Nation’s David Farley tldr: It’s good for red meat but not good for dairy. “It’s a lot better than when we started.”

FRIDAY COLUMN — NOSTALGIA VS. NEOLIBERALISM

In his weekly column, Paul Karp argues that the stoush over the EU free trade deal shows the Coalition is prepared to ditch its free market beliefs to chase voters away from economically nativist One Nation.

As a result, the Labor Party led by left faction leader Albanese finds itself the last one standing in the defense of neoliberalism — on free trade, and increasingly on encouraging the AI data center investment boom.

When the Reserve Bank cited AI and data centers as a cause of strong domestic demand, it gave an already skeptical public another reason to hate the tech: First came the local opposition to data centers; secondly, the job loss fears; and thirdly, the risk of adding to inflation and pressure for interest rate rises.

More AI and free trade might be a good thing economically but many voters seem to want less of them. Symbols of an idealized past are appealing in the face of a scary and uncertain future. The Albanese government’s $3 billion selloff of defense land is another case in point.

If Labor makes economic management its KPI, then it has to hope the RBA can get inflation and interest rates down in time for the 2028 election. Otherwise, it is left defending an unpopular economic system with few results to show for it, while creating too many symbols and standards for its opponents to rally around.

Read the full column: Australian Labor’s free-market turn risks a backlash fueled by nostalgia.

THE PLAYBOOK INTERVIEW

EU PARLIAMENT VICE PRESIDENT VICTOR NEGRESCU — YOU COULD BE CANADA

Negrescu is on a weeklong tour of Australia, lobbying skeptical Coalition MPs to back the FTA. Playbook’s Finn McHugh sat down with Negrescu in Canberra’s Hyatt Hotel.

Read Finn’s story about how Australian could follow Canada into “ever closer association” with the EU.

This transcript has been edited for length and clarity.

Are you surprised at how controversial the EU deal is in Australian politics?

We also had this kind of debate around trade deals. We had a complex conversation around the trade agreement with Canada, that after a long discussion got approved — and proved successful. It’s a debate that we’re having in Europe as well.

Here, there is a clear added value and a potential. New Zealand had in the first year an increase of 8% of trade with the EU.

Is this deal more important given uncertainty in the U.S. and China?

Reducing our dependency is key. It’s a lesson that we learned from the pandemic and the war in Ukraine, where we noticed how dependent we were on Russian energy. We are looking around the world, and Australia is considered by many in Europe as a key partner in supply chain diversification.

You are also confronted with your high dependency on trade to China. Getting access to the European market will offer a lot of possibilities for Australian companies. It’s also about tackling risks together.

If the deal was voted down, how much would that damage Australia’s reputation?

I hope we can avoid that, and I have a clear message: the trade agreement is a good agreement. I honestly do not believe there is room for further improvement. Any renegotiations will delay the process. In Brussels, the conversation is complicated, the conversation with European farmers is also very complicated.

Could an FTA be the start of something deeper?

One interesting experience is the partnership between Europe and Canada. Even though a couple of years back, when we were negotiating an FTA, the discussions were really complicated, this created a special momentum that I think could be an example for Australia. Why not? The Canadian model could be replicated.

Horizon Europe doesn’t get much coverage here. Can you explain the benefits?

The added value is basically: Europe is financing research projects, Australian universities get access to European innovation and research, Australian universities could lead global innovation in partnership with Europe, Australian universities could transfer innovation from Australia to Europe. There is a win-win situation.

My invitation to Australian universities: Identify one flagship program to define common partnership between Australia and Europe on research and innovation.

Can middle powers unite to stand up to big tech companies?

In Europe, we often give the example of the Australian decision to limit social media access. The majority of decision-makers are trying to replicate the Australian model. With the AI Act, we also can provide Australia lessons that we’ve learned.

Has social media changed the threats and rhetoric towards you?

The recent [Helen Haines] incident generated quite a lot of emotions in Europe, because we are facing similar challenges — radicalization, hate speech visible on social media, and difficulty having a proper conversation. The European Parliament has managed to discuss things with each other, but now it’s harder. Voters expect us to be more radical. So there is a vicious circle.

Read the full transcript of Finn’s interview with Victor Negrescu.

CANBERRA PLAYBOOK PODCAST

In Senate estimates, Sen. Deb O’Neill drew attention to ASIC’s handling of one of Australia’s biggest superannuation scandals. Questioning officials over the collapse of the Shield and First Guardian master funds, which meant thousands of Australians lost more than AU$1 billion in retirement savings.

Today on the podcast, Amanda Copp speaks with Super Consumers Australia’s Jessica Spence and CHOICE senior investigative reporter Jarni Blakkarly about his new podcast “The Collapse,” where he finds out where it all went wrong and how the government is trying to make sure it can never happen again.

BY THE NUMBERS

3.2% — That’s what Australia’s official inflation rate would be if the ABS used the actual price Australians pay for tobacco, instead of ignoring how 80% of tobacco is purchased in Australia (illegally, at untaxed prices). That’s per calculations by economist Stephen Koukoulas, former adviser to Prime Minister Julia Gillard. Of note: Tobacco is often trimmed out of the underlying inflation rate (currently 3.6%).

17 — The number of Future Fund staff earning salary packages of more than $1 million

$2.2M — The top Future Fund salary, per Senate estimates evidence by its chief corporate affairs officer, Will Hetherton

QUESTION TIME

GROUNDHOG HOUSE: Playbook entered Thursday’s question time with low expectations of Opposition chances to land punches against the Government. The expectations were met.

BEST PERFORMER: Education Minister Jason Clare. He consistently delivers practical answers, full of real life and moving examples illustrating why the House should take action, and who would benefit. In Thursday’s case, he spoke about taking down vile online content through new regulatory powers under the Digital Duty of Care bill.

An answer from Home Affairs Minister Tony Burke praising recipients of National Police Bravery Awards generated applause for the recipients. At least we can all agree on that.

PARLIAMENTARY PROTOCOL

WHICH? Which senator likes to boil eggs in their Senate office kettle?

STATE OF THE NATION

NO DEFENCE SPEND IS SAFE: In her first estimates appearance as Defence boss, Meghan Quinn couldn’t “rule out changes to any of the programs in the department,” as execs go through spending with a fine-toothed comb. Quinn, an economist who formerly led the industry department, pushed back on a characterization that the department was conducting a formal budget review, saying this was just business-as-usual.

The department has launched a “priority investigation” into how The Nightly got wind of possible cuts at the department.

AUKUS?: “We are working very hard to make sure that we don’t have shifts in deliverables and milestones, but we do not control all elements that affect the delivery of projects.”

FORCE PREPAREDNESS: Nearly a quarter of Australian Defence Force personnel are not considered medically fit to deploy, chief of personnel Lieutenant General Natasha Fox told estimates, The Australian reported.

PARTY ROOM

HAINES’ OFFICE REOPENS: Helen Haines’ Wangaratta office, where the independent MP was repeatedly rammed by a vehicle last week, has reopened with as her staff pledged to “continue supporting [her] constituents.”

SMH reported that Haines’ alleged attacker, Brendan Nugent, has told police hitting the MP with his car repeatedly was accidental.

The ABC reported that a prison assessment of the man has so far found no indication of extremism or links to political groups or ideologies, but rather that he held delusions of being persecuted and was most likely in a state of psychosis.

HODGINS-MAY I ASK YOU A QUESTION?: As the attack prompts questions about abuse politicians face, particularly women, new Greens Deputy Leader Steph Hodgins-May cold-called a lawyer who called her a “stupid bitch” online. Watch the interaction here.

ONE NATION — PM OFFERED FARLEY EXTRA STAFFER: One Nation Leader Pauline Hanson has posted to social media that Anthony Albanese has been meeting her MP David Farley privately and on Oct. 26 wrote him a letter offering him an additional staffer, at the adviser 3 level paid up to $200,000.

Clever wedge, or under interference? “Following these discussions, senior ministers raised grant funding under the sustainable communities program for the Murray Darling Basin. David did not initiate the discussion regarding this program.

“Taken together, these actions have left David and One Nation deeply concerned that the government is seeking to use taxpayer funds to exert undue political influence over politicians,” per Hanson

ONE NATION — THE MEAN MERCH MACHINE ROLLS ON: There’s really no words for this depiction and fundraising around independent Sen. Lidia Thorpe. Expect One Nation officials to face calls to take it down and decommission it.

CANBERRA MEETS WORLD

AFGHANISTAN ALLEGATIONS: A newly published military report has found SAS officers knew their subordinates were planting weapons on dead Afghans to frame them as combatants but did nothing to stop the illegal practice. Liberal frontbencher Andrew Hastie, who served in the SAS in Afghanistan, said many of the report’s findings “ring true.” Read the full story from Finn McHugh.

THE CDF’S PREFERENCE: Chief of the Defence Force Mark Hammond told Sen. Jacqui Lambie he would have preferred if she talked to him before speaking in the Senate about a recording device that had been found on a navy ship.

“The investigation was under way before you drew national attention to it, and my preference — if you would indulge me — would be, where you become aware of an active investigation, perhaps bring it to my attention first.”

History lesson: Hammond is not the first CDF to try to tell Lambie off. Angus Campbell — now Australia’s ambassador to the EU and NATO — accused her of “maliciously attempting to drive a wedge” between senior command and personnel in 2023, comments he later withdrew.

Playbook’s take: Chiding Lambie is not a good look. The federal government is facing a class action alleging sexual harassment and discrimination of women in the ADF between 2003 and 2025. Lambie’s interest in calling attention to this investigation was clearly to promote a safe workplace. Hammond also had every opportunity to make these comments privately, which is the courtesy he was expecting of Lambie.

He also had this to say: “You’ll find an ally in me … 80% of the three star [generals] in this room have partners or children serving in the Australian Defence Force. I assure you we are absolutely committed to eradicating sexual violence in the Australian Defence Force.”

AGENDA ASSISTANT

WE’RE STREAMING ELECTION NIGHT FROM POLITICO HQ: We’re America’s biggest politics newsroom and you can follow all of POLITICO’s live U.S. midterms results coverage from 12 noon Sydney/Canberra time on Wednesday Nov. 4 — on politico.com and the POLITICO app.

More on the POLITICO live stream plans here.

The National Press Club will also screen coverage of the results from 11 a.m. in its lounge.

LOCAL CANBERRA

CANBERRA GETS AUSTRALIA’S 2ND-LARGEST EV-ENABLED APARTMENT BUILDING: Andrew Barr and Alicia Payne are launching EV Charging at The Griffin in Parkes, where 254 apartment owners will have EV charging options from NOX Energy. It happened with $1.5 million from the Australian Renewable Energy Agency (that’s $5,905 per charger).

WHAT TO DO THIS WEEKEND

ROW, ROW, ROW YOUR BOAT: Elite rowers descend on Canberra for the Golden Oar at Black Mountain Peninsula from midday today. It runs through the weekend.

OUI OUI: Telopea Park hosts one of the southern hemisphere’s largest school fetes from 10 a.m. Saturday, complete with French food stalls and live entertainment. If you’re looking for German cuisine (mainly beer), head to the Harmonie German Club for its Oktoberfest celebrations on Friday night and Saturday.

SPOOKY: Canberra’s annual Halloween festival, Ghosts in the City, kicks off in Civic at 4 p.m. Saturday.

COMMUNITY CORNER

HOMECOMING BEE: Parliament’s unofficial animal mascot, the native stingless bees, are returning to their official home on Friday. The creatures’ natural habitat is usually further north, so they take a winter sojourn in Sydney each winter to escape the cold. You can find them in the staff dining room courtyard. Despite being bees, they look more like small black flies.

BIG ON THE BIG THINGS: We asked “what happened to the chicken and leek pasties?” in the Staff Dining Room (aka The Trough) … “they kept exploding” is the answer. So your new offer is a chicken, leek and vegetable pie. Still a reasonable AU$8.80.

MOVES AND APPOINTMENTS

COME WORK WITH POLITICO! Interested in working on the commercial side of POLITICO?

We mentioned a couple of weeks back that we’ve partnered with the good folks at Squiz Media to look after our commercial interests here in Australia. They’re now hiring for a dedicated POLITICO sales and partnerships manager.

If you’re into the Canberra Playbook, have a passion for politics and commercial experience or the potential to make a good salesperson, get in touch with Claire Kimball via claire@thesquiz.com.au.

Christopher Collett has been promoted to deputy secretary at AGD.

Anita Dwyer is now a first assistant secretary at DFAT.

Sarah Roberts is the new general secretary at the National Tertiary Education Union.

BIRTHDAYS

TODAY: Nationals MP Colin Boyce, Queensland minister and former Federal Assistant Minister Amanda Stoker, former senior presidential adviser (and presidential daughter) Ivanka Trump.

TOMORROW: Former NSW Treasurer Andrew Constance, former Senate President Stephen Parry, Indigenous rights campaigner and academic Marcia Langton AO, former Iranian crown prince Reza Pahlavi, former ACT Labor secretary and ANACTA director Ash van Dijk.

SUNDAY: Labor Sen. Raff Ciccone, NSW Attorney-General Michael Daley, Apple CEO Tim Cook, Oscar-nominated Australian actress Toni Collette.