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- 10 December 2012
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It's also funny how for the last six months, while Abbott and Hockey have been saying we have a huge tax deficit problem.
All the "financial gurus" have been poo pahing it saying " we haven't got a problem, just Tony and Joe talking it up"
Now the Treasury and the RBA are saying it, there is a general change of rhetoric, so the gurus don't looked as stupid as they are.lol
It is classic, just dumb reporting, they blew their feet off when Labor were in. Is there any wonder SMSF are on the rise? When you see the so called gurus, making fools of themselves.
I think they were using the term BUDGET CRISIS!!! (yes at least 3 ! because that is how exclaimed they were about it)
Since getting into Govt they have rolled back most attempts by Labor to increase revenues, borrowed another 8 odd billion to pass to the RBA, and well that sense of pre election CRISIS!!! has pretty much disappeared. Throw in Abbott is OK with 5K 2 hour meetings and well, it just feels like they've changed their attitude to the CRISIS!!! now they're actually responsible for balancing the budget, which is going to be VERY VERY difficult now that most of us are actually saving again and consumption is not growing faster than GDP. GST is rising about half the rate of the Howard years, but I don't think the household sector is capable of going on another debt binge like that where we had a couple of years with negative savings.
I'll admit there's plenty of wasteful spending in the budget, even more rent seeking tax reductions like NG and half CG, but there's also a revenue issue since the GFC due to the spending of the transitory mining boom income on tax cuts. Time to pay the piper now that the ToT has started to turn against us and it's only the early stages so far. Mining CAPEX cliff is more like a gentle hill at the moment, but next year is going to be a shocker. Coking coal already down to $140 tonne and still falling, thermal coal is around break even for a lot of Australian mines, iron ore has probably got a long way to fall once the new supply comes online late this year and through 2015 and China continues with their economic rebalancing.
All this while the banks are busily leading as much as they can for housing "investment" while the productive side of the economy is contracting at an alarming rate with nothing to replace it, and the complacency of our politicians is bordering on treason as far as I'm concerned. Abbott picking an ex CBA CEO to run his Financial Services enquiry is just another nail in the coffin of the economy. How does he expect meaningful reform to come from someone so close to the cause of many of the issues?