The Abbott Government

[sydboy007]

I believe by the end of 2015, voters will be thanking Abbott for taking a strong stand on reducing spending and bring some stability in the debt and deficit.

Of course the comrades of the Greens will be expected to keep pounding on about broken promises and will continue to make out everything is rosy when they know damn well they left behind one hell of a mess.

http://www.theaustralian.com.au/nat...to-be-paying-off/story-e6frgd0x-1226910856280

Unless you're arguing Abbott made his promises with a gun to his head, the negative public reaction to them is justified. He used the same broken promises against Labor so should be more than willing to accept the same level of judgement against himself.

The various groups now jumping out to criticise the potential rise in fuel excise should also have been foreseen by Abbott. His opposition to just about every tax measure Labor wanted to introduce to help balance the budget relied partly on fanning the public via the media.

The question is does Abbott, and the L+NP, have the ticker to do what's right for Australia past the next election, or will they focus more on being re-elected? Sadly the other political parties will do their best to make as much political capital from any efforts to rebalance our tax system, but once again Abbott showed them the way.

It will be extremely hard to have much in the way of meaningful reforms with the current lack of bipartisan support for what needs to be done.

If this Government does target some of the massive $120B in tax expenditures then they will have my support. So far the rise in the fuel excise levy is probably the only economic policy kite they've flown that I can support. It does seem fitting that a L+NP PM has to fix this economic vandalism from a previous L+NP PM. A decision brought about by pig headedness to stop applying GST on the petrol + excise price has conservatively cost the budget over $50B since it was made.

 

[IFocus]

Lazy hypercritical Liberals


Tony Abbott's grand infrastructure plan may be an expensive road to nowhere

The prime minister is throwing billions of dollars at projects before any proper cost-benefit analysis has been done

The chairman of the Productivity Commission, Peter Harris – who would seem to be an appropriate person to listen to on this point – was very blunt with his advice in a speech on Friday, targeting the federal government’s intention to set aside a huge honeypot, reportedly as much as $5bn, as top-up funding for states that sell big assets such as power generators or ports and then very quickly reinvest the money in infrastructure.

“Project plans are being dusted off all over Australia in the face of the new incentives for recycling capital from privatisation. We should all hope that there is more than dust being brushed off. But right now we can only hope,” he said. Quite blunt, really (for a Productivity Commission guy).

And here’s the rub. That’s exactly what the Abbott government has done. It has pledged billions of dollars to projects before any business case had been done and is giving some of them even more money in this budget, again without a business case.

Pledging there would be “cranes over our cities” within a year of his election, Abbott make election promises totalling $3bn to the $10bn West Connex toll road in Sydney and the first stage of the East West link road in Melbourne – at a time when neither had business plans, and when Infrastructure Australia, which is supposedly the independent arbiter of the nation’s infrastructure priorities, said neither was “ready to proceed”.

http://www.theguardian.com/world/20...ture-plan-may-be-an-expensive-road-to-nowhere

 

[sydboy007]

Lazy hypercritical Liberals


Tony Abbott's grand infrastructure plan may be an expensive road to nowhere

The prime minister is throwing billions of dollars at projects before any proper cost-benefit analysis has been done

http://www.theguardian.com/world/20...ture-plan-may-be-an-expensive-road-to-nowhere

Lets hope things are handled a bit better than the Vic Government selling of Rural Finance to Adelaide Bendigo bank. Seems fishy to sell a public asset insecret to one party without have some form of competitive tender.

Someone on macrobusiness summed it up quite nicely

Trying to “pay off” government debt by selling assets to private monopolists and tax farmers is rather like trying to “pay off” one’s home loan by having it transferred from the bank to a bunch of loan sharks armed with cricket bats and rottweilers.

Private monopolists and tax farmers are not philanthropists. They are not giving the government money out of the kindness of their hearts. They are doing so in the expectation that they will be able to gouge it back in the form of monopoly pricing on their captive customers and from their farmed taxes.

The deadweight losses associated with monopoly pricing and tax farming are no different from the deadweight losses imposed by taxation. And yet, whereas the wacko laissez-faire extremists will condemn any form of transparent taxation, they will applaud such concealed “private taxation” by rent-extractors.

Private monopolies are classically allocatively inefficient. It’s just that their inefficiency isn’t of the sort that shows up in any published profit and loss statement.

When a [nameless] private airport monopoly, for example, needlessly delays – for years – the building of a second runway, the cost manifests itself “invisibly” in the form of lost time for travellers stuck in holding patterns, and in the form of extra fuel usage by airlines.

For the wacko laissez-faire extremists, however, this would be regarded as “efficient” because it raises the rate of return on the company’s restricted asset base.

When a private road tolling tax farm runs at below capacity because the profit-maximising toll has encouraged drivers onto local streets, the cost manifests itself “invisibly” again in the form of lost time, in extra fuel usage, and in reduced amenity for those affected by the traffic.

For the wacko laissez-faire extremists, however, this would be regarded as “efficient” because it raises the company’s rate of return.

When a privatised grain-handling authority closes regional depots and dynamites the silos (to prevent potential competitors offering to buy them), the cost manifests itself “invisibly” in the form of farmers having to build on-farm storage and transport their grain further by road.

For the wacko laissez-faire extremists, however, this would be regarded as “efficient” because it raises the company’s rate of return.

But even more worrying is the direct line running from privatisation to corruption.

Public agencies put work out to tender on a competitive, transparent, price-based system. In contrast, additional work by private monopolies and tax farms is almost invariably achieved through secretive, “commercial-in-confidence” renegotiations. Invariably the monopolist or tax farmer is in the commercially advantageous position of controlling the critical assets and revenues and thus being able to present a “take-it-or-leave-it” proposal.

(We still don’t know exactly what concession were offered in order to get the announcement of a new runway shortly after the election. Tolls on drivers dropping off passengers perhaps??)

As a matter of cosmetics for the gullible, there is usually an “independent adviser” involved, but having myself worked in this role I can testify that it is worse than useless. Imagine, if you will, a judicial system in which supposedly “independent” judges were selected by the Minister on a case by case basis from a pool of barristers. Imagine, if you will, that their deliberations were held in secret (“judicial-in-confidence”).

Imagine, if you will, that those same barristers were themselves hoping to be involved in other commercial dealings with the government. And imagine that the Minister had made it clear that he wanted a particular verdict to be reached!

If it weren’t so serious it would be laugh-out-loud funny.

There is a direct line running from privatisation to corruption.

But even beyond allocative inefficiency and corruption of the transparent and competitive tendering system, funding infrastructure through private monopolies and tax farms actually degrades public finances.

One only need look at the history of public debt in the United Kingdom. (See (http://www.parliament.uk/briefing-papers/SN05745.pdf). Public sector net debt (excluding financial sector interventions) fell from 44% of GDP in 1980 to 26% in 1991 following the massive Thatcher privatisation program [much of which was actually “good” privatisation aimed at promoting competition . . . unlike today’s scams] but by 1997 it was back up to 42%. It is now above 70%.

In the long run privatisation erodes government finances. While public revenues are being progressively alienated, politicians keep topping up the public debt (to buy votes), but have progressively less and less public revenue to service it.

What we are actually seeing here is the collapse of the corrupt system of elective government.

Politicians facing re-election want to spend money buying the votes of powerful minority voting blocs or marginal electorates. And they want to hide from the majority the cost of what they are doing. They achieve this through privatisation.

Privatisation of this type simply doesn’t address the underlying problem: desperate politicians wasting money trying to buy votes then trying to conceal what they have done.

Politicians won’t stop spending. But the alienation of revenues though privatisation means that public finances deteriorate and politicians become ever more dependent on the rentiers and tax farmers.

This is a throwback to the seventeenth century. It is a throwback to the Stuart kings trying to bypass parliament. It is a throwback to the ancien regime. It is a throwback to Colbert and the ferme generale.

It is not just internally inefficient (involving layers and layers of facilitators and other “ticket-clippers”). It is also a system that imposes layers and layers of deadweight losses: over-pricing and under-investment, costs that are built into every transaction in the economy.

Buy an imported car? It will have an invisible “private monopoly port tax” built into the price. Buy imported clothes? They will have an invisible “private monopoly airport tax” built into the price. Buy some groceries? They will have an invisible “private monopoly toll road tax” built into the price. And so it goes on . . . and on.

Over the time the accumulated deadweight losses of this byzantine system can only grow.This is a slow-ticking time bomb. It is a system that will eventually collapse under the weight of its own accumulated inefficiency.

But there is a reason that ancien regimes becomes “ancien”. The reason is that their members refuse to face up to what is going on around them. They keep pretending to themselves that they can go on squaring the circle.

Until eventually they can’t.

 

[IFocus]

Lazy hypercritical Liberals


Tony Abbott's grand infrastructure plan may be an expensive road to nowhere

The prime minister is throwing billions of dollars at projects before any proper cost-benefit analysis has been done






http://www.theguardian.com/world/20...ture-plan-may-be-an-expensive-road-to-nowhere

Meant for any one who didn't guess hypocritical (thanks Julia)

The Lazy Liberals comes from a Paul Keating quote, hypocritical for all the howls from Abbott in opposition but fails his own test in government.

 

[noco]

Meant for any one who didn't guess hypocritical (thanks Julia)

The Lazy Liberals comes from a Paul Keating quote, hypocritical for all the howls from Abbott in opposition but fails his own test in government.

Now how about this test IFocus......Abbott is going to freeze the salaries of politicians and public servants....now that should put a smile on your face, the Greens and the Comrades of the Greens....or will it?

Hope you a not a public servant because if you are you will be like someone sucking on a lemon.

http://www.couriermail.com.au/news/...and-a-pay-freeze/story-e6freon6-1226913042384

 

[Calliope]

The main theme on Insiders this morning was Abbott's broken promises. Naturally, the panellists neglected to point out that Hockey's promise to deliver a responsibe budget makes Abbott's glib tax and welfare promises redundant.

 

[sydboy007]

The main theme on Insiders this morning was Abbott's broken promises. Naturally, the panellists neglected to point out that Hockey's promise to deliver a responsibe budget makes Abbott's glib tax and welfare promises redundant.

Depends. Is the promise of the party leader bigger in the core non core promise ladder? I think Tony said his promise more often than Joe.

Also, should a political party make conflicting promises?

 

[SirRumpole]

Depends. Is the promise of the party leader bigger in the core non core promise ladder? I think Tony said his promise more often than Joe.

Also, should a political party make conflicting promises?

Of course they should be consistent in their promises. The Coalition have had 6 years to get their policies straight.

Blaming the current situation on Labor is laughable when the Coalition have doubled the budget deficit with their promises. Labor had already started cutting spending, it's something that can be more responsibly done over time, but of course we know that Abbockey wants to make room for sweeteners before the next election in their usual cynical manner.

 

[Calliope]

Depends. Is the promise of the party leader bigger in the core non core promise ladder? I think Tony said his promise more often than Joe.

Also, should a political party make conflicting promises?

Silly promises that impede constructive policies should always be broken. I know you would like Abbott to break the PPL promise. I also suspect you would be happy for him to break his abolition of the Carbon Tax promise and his promise not to legislate for same sex marriage during the life of the government.

 

[SirRumpole]

Silly promises that impede constructive policies should always be broken..

Silly promises that impede constructive policies should not be made in the first place.

 

[Calliope]

Silly promises that impede constructive policies should not be made in the first place.

The facts of life Rumpy are that you have to get elected first, before you can put your constructive policies into play. Hence the promises. Can you name me any political party that doesn't do this?

My attitude is that if the broken promises don't affect me then I don't worry about them. It is similar to your attitude on the Nigerian atrocities. If it doesn't affect you and you can do nothing about it, why bring it up?

 

[SirRumpole]

The facts of life Rumpy are that you have to get elected first, before you can put your constructive policies into play. Hence the promises. Can you name me any political party that doesn't do this?

Gillard broke her promise on the Carbon tax and got thrown out for it. Give me a good reason why it shouldn't happen to the Coalition. Abbott campaigned heavily on 'trust' and not lying to the public. we will see after the budget if he can keep up that charade.

You are basically condoning lying for political gain. Once you go down that road, all faith in politicians is lost, and the biggest liar wins. Is that what you want ?

My attitude is that if the broken promises don't affect me then I don't worry about them. It is similar to your attitude on the Nigerian atrocities. If it doesn't affect you and you can do nothing about it, why bring it up?

I won't be affected if petrol prices go up ?

In any case your attitude is a purely selfish personal approach. See my response to your first quote.

 

[noco]

I won't be affected if petrol prices go up ? .

Why Rumpy?....are you still riding in a horse and buggy or do you ride a push bike?

 

[SirRumpole]

Why Rumpy?....are you still riding in a horse and buggy or do you ride a push bike?

Diesel SUV.

You ?

 

[Calliope]

Gillard broke her promise on the Carbon tax and got thrown out for it. Give me a good reason why it shouldn't happen to the Coalition.

I won't lose any sleep over it.

You are basically condoning lying for political gain. Once you go down that road, all faith in politicians is lost, and the biggest liar wins. Is that what you want ?

Nonsense. I said it was a fact of life.

I won't be affected if petrol prices go up ?

Did I ever say you would be?

In any case your attitude is a purely selfish personal approach.

And yours is not.

You are still avoiding my question. Can you name me any political party that doesn't do this? Your favourite party The Greens easily avoid breaking their ridiculous promises by never winning government.

 

[SirRumpole]

You are still avoiding my question. Can you name me any political party that doesn't do this? Your favourite party The Greens easily avoid breaking their ridiculous promises by never winning government.

Of course they all do it, I'm just saying that we the voters shouldn't let them get away with it.

 

[Calliope]

Of course they all do it, I'm just saying that we the voters shouldn't let them get away with it.

Well good for you. I will follow your campaign "on keeping the bastards honest" with interest.

 

[sydboy007]

Silly promises that impede constructive policies should always be broken. I know you would like Abbott to break the PPL promise. I also suspect you would be happy for him to break his abolition of the Carbon Tax promise and his promise not to legislate for same sex marriage during the life of the government.

So you're saying we have to work out what are the silly and non silly promises made by Abbott before voting for him, yet most of the "promises" he made were the kind he said we could trust ie not off the cuff.

It seems like we're getting to the point we're we can barely trust anything he's said.

Shame he's not be able to hold himself to the same standards he kept demanding of the previous Govt.

 

[Calliope]

So you're saying we have to work out what are the silly and non silly promises made by Abbott before voting for him, yet most of the "promises" he made were the kind he said we could trust ie not off the cuff.

It seems like we're getting to the point we're we can barely trust anything he's said.

Shame he's not be able to hold himself to the same standards he kept demanding of the previous Govt.

Unlike you and Rumpy I can't get worked up about it. As I said previously there are some of his promises you would like him to break... plus his promise to hold a Royal Commision on Union Corruption. And i'm pretty sure you and Rumpy would have supported Gillard breaking her Carbon tax promise

Work on that.

 

[drsmith]

One of the more interesting turns with the deficit tax debate,

The survival of Tony Abbott's controversial "deficit tax" hangs on a fight building within the Greens. Its leader Christine Milne is facing a revolt over her opposition to raising taxes on high-income earners.

With Labor determined to oppose the Prime Minister's "broken promise", Senator Milne has angered colleagues by saying she, too, would oppose the policy.

Her position undermines a core belief of the Greens, which is to redistribute income from the wealthy to the poor. The federal Greens are set to debate the issue early this week.

I reckon the threshold will be set at $180k and then it's over to Bill and Christine.

http://www.smh.com.au/federal-polit...n-fight-within-the-greens-20140510-zr8jt.html