The Abbott Government

[wayneL]

A policy is no more than a party or Government idea.

Where there is no action, there is no substance and no result. So far the Rabbit Guvmints policies are about absolute nought.

Hostile Senate my man. It's hard the govern when the opposition has carte blanche to sabotage the gu'mint via the Senate.

 

[noco]

A policy is no more than a party or Government idea.

Where there is no action, there is no substance and no result. So far the Rabbit Guvmints policies are about absolute nought.

Had the worlds best treasurer (the GOOSE ) told the truth about the deficit being $48 billion instead of $18 billion, then perhaps Abbott may not have found it necessary to break some promises.
The GOOSE said the budget was in surplus before the election then it suddenly rose to $11 billion then to $18 billion when in fact it was $48 billion.
I mean to say just how could the worlds greatest treasurer be so far out.
And then don't forget Penny Wrong who made errors totaling $123 billion over her period as finance Minister.

 

[sydboy007]

You believe pollie promises?

Personally, I don't care about promises, I just want good policy. Promises get you elected, good policy doesn't.

I don't fully agree with that

Good policy is usually attractive to a lot of voters. It might not sway those rusted on to a particular party, but policies that let parents think the future will be better for the children, that pass the pub test on fairness, they generally garner respect and enough swing voters to be enacted.

 

[explod]

Had the worlds best treasurer (the GOOSE ) told the truth about the deficit being $48 billion instead of $18 billion, then perhaps Abbott may not have found it necessary to break some promises.
The GOOSE said the budget was in surplus before the election then it suddenly rose to $11 billion then to $18 billion when in fact it was $48 billion.
I mean to say just how could the worlds greatest treasurer be so far out.
And then don't forget Penny Wrong who made errors totaling $123 billion over her period as finance Minister.

Do not disagree. But you harp on about the past noco. It is not productive but only, in most cases, to deflect attention away from the new Governments innabilities. The blame game is zero sum Champ.

So there is some debt there but it is minor compared to company and personal debt. To borrow for good projects for the future means that those benefitting in the future also contribute. The Government needs to get over this mentality and do something for youth in particular. How about bringing in some form of National Service, would substancially reduce dole numbers and may turn thier lives around and improve discipline.

Now instead of going crook noco, over to you, your turn for some positive ideas with some substance.

 

[noco]

Do not disagree. But you harp on about the past noco. It is not productive but only, in most cases, to deflect attention away from the new Governments innabilities. The blame game is zero sum Champ.

So there is some debt there but it is minor compared to company and personal debt. To borrow for good projects for the future means that those benefitting in the future also contribute. The Government needs to get over this mentality and do something for youth in particular. How about bringing in some form of National Service, would substancially reduce dole numbers and may turn thier lives around and improve discipline.

Now instead of going crook noco, over to you, your turn for some positive ideas with some substance.

The Green/Labor left wing socialist should start thinking of the national interest and stop blocking saving in the senate.....Savings of some $6billion which they proposed themselves before the election ....another broken promise by Shorten.
Shorten also agreed to the construction of the East west freeway and the unions changed his mind for him..

You cannot compare company debt to government debt...that is just crazy talk. Companies can borrow for a certain project like setting up the infrastructure for a mining venture which eventually pays off the debt.
As you well know, the stupid Labor party borrowed to the kilts on hare brain schemes which are still costing the tax payers $1 billion a month in interest.

The blame for all our financial mess is squarely at the feet of the Labor Party just like it is in Queensland....I am still waiting for Palaszczuk to tell us how she is going to pay back the $80 billion debt left by the Beattie/ government.

For you to try and make such comparisons between Government and company debt. shows your ignorance in business management.

 

[explod]

For you to try and make such comparisons between Government and company debt. shows your ignorance in business management.

"... your ignorance... " if you have no answers you attack the man,
as earlier pointed out.

With such a negative approach I wonder if you understand management at all. And how DID my example indicate ignorance?

 

[noco]

"... your ignorance... " if you have no answers you attack the man,
as earlier pointed out.

With such a negative approach I wonder if you understand management at all. And how DID my example indicate ignorance?

plod, I owned four business in my life times and managed one for 28 years.....all with success, so I would hasten to say I do know quite a lot about the way a business in managed.

It was not my intention to attack you personally and it is regrettable if you have taken it that way.

I tried to point out to you the difference with government debt and company debt which you do not seem to understand.

 

[sydboy007]

The Green/Labor left wing socialist should start thinking of the national interest and stop blocking saving in the senate.....Savings of some $6billion which they proposed themselves before the election ....another broken promise by Shorten.
Shorten also agreed to the construction of the East west freeway and the unions changed his mind for him..

You cannot compare company debt to government debt...that is just crazy talk. Companies can borrow for a certain project like setting up the infrastructure for a mining venture which eventually pays off the debt.
As you well know, the stupid Labor party borrowed to the kilts on hare brain schemes which are still costing the tax payers $1 billion a month in interest.

The blame for all our financial mess is squarely at the feet of the Labor Party just like it is in Queensland....I am still waiting for Palaszczuk to tell us how she is going to pay back the $80 billion debt left by the Beattie/ government.

For you to try and make such comparisons between Government and company debt. shows your ignorance in business management.

So Government investing in infrastructure, say a new port, road, rail line, airport, these are not investments that eventually pay themselves off? It's what happened in Australia pretty much since federation till the dud idea of getting the private sector involved and inflated user charges.

It's good to know that all the Liberal state Govts recently kicked out were spending money appropriately. Do you support the prior Vic Liberal Govt, along with the Liberal Federal Govt, from pushing through with funding the world's most expensive road tunnel, that was projected to provide just a 45c in the $ economic return. Is that the kind of hare brained scheme that you accuse Labor of doing?

We have the current Liberal Govt now talking about winding back the lowered tapering rate for access to the pension the prior Liberal Govt brought in. That change alone has cost the budget billions a year, bloating centrelink with thousands of more staff simply to cope with the hundreds of thousands of extra part pensioners from that choice.

Infrastructure Australia has a decent list of projects that make a sound economic case for investment. Isn't it better for the Govt to borrow at < 3% for 15 years. Basically they're getting the money for free as inflation will be not much less that the interest rate they pay. There's plenty of infrastructure projects that would deliver economic returns well in excess of 3%, but the Abbott Govt has woven a straight jacket around itself by demonising debt. Debt that self liquidates is sensible. Debt to keep the lights on not so much. Not all debt is bad, otherwise you'd be telling off people for not paying cash when they buy their homes.

Do you know how much debt Campbell Newman racked up in just 3 years of Office? How about Beattie and Anna Bligh? How much of that debt funded infrastructure? If the Govt hadn't borrowed for the infrastructure, how else would it have been built?

 

[wayneL]

I don't fully agree with that

Good policy is usually attractive to a lot of voters. It might not sway those rusted on to a particular party, but policies that let parents think the future will be better for the children, that pass the pub test on fairness, they generally garner respect and enough swing voters to be enacted.

In some cases. But I doubt the national interest overcomes self interest during election campaigns. Sorry just don't have your faith in the plebeians to think very far ahead at all.

 

[IFocus]

I don't fully agree with that

Good policy is usually attractive to a lot of voters. It might not sway those rusted on to a particular party, but policies that let parents think the future will be better for the children, that pass the pub test on fairness, they generally garner respect and enough swing voters to be enacted.

Actually the sheer ineptitude of the current incumbents to be able to negotiate with one of the biggest conservative cross benches seen for a long time shines the light on what a bunch of dim witted conservative IPA flunky arrogant right wing bone heads ruling the Liberal party now.


Howard would have given his eye teeth for the same set of circumstances when he didn't have the senate.

Now its all about saving Abbott's job nothing about actually running the country.

 

[SirRumpole]

but the Abbott Govt has woven a straight jacket around itself by demonising debt.

Abbott tightened his own straitjacket by repoliticising Infrastructure Australia so he could use infrastructure money to pork barrell for himself and his mates in the States like Napthine.

He came a cropper over the EastWest link when the Victorian electorate told him where to jump, now he should just admit that IA can do a better job of deciding the best infrastructure spend than his pork barell policies can and give them back their independence.

 

[Smurf1976]

So Government investing in infrastructure, say a new port, road, rail line, airport, these are not investments that eventually pay themselves off? It's what happened in Australia pretty much since federation till the dud idea of getting the private sector involved and inflated user charges.

Liberal funnels money to big business just as Labor funnels money to unions.

The whole "must not borrow money, therefore we'll have to get the private sector to build it" argument has absolutely nothing to do with cost, indeed privately owned usually costs more for the simple reason that profit is required. What it's about, is using the fear of debt as an excuse to preclude public ownership, thus enabling private profit from critical infrastructure.

The sad thing is that it reduces Australia's overall economic competitiveness. It's hard to think of a business that doesn't in some way rely on roads, rail, ports, airports, electricity, water, gas or communications infrastructure in order to conduct its' operations. The end result is that a small number of businesses, those who own the infrastructure, profit but that comes at the cost of higher input costs for every other business. That is effectively a tax on virtually all economic activity.

Much was said in the 1990's about the need for Australia to be "competitive" internationally and few would seriously dispute that point today. But if you want to be competitive, then you need to have competitive input costs for business rather than paying unnecessarily high costs for everything from transport to power.

In general terms the whole anti-debt, pro-privatisation push makes a few businesses rich at the expense of just about everyone else and adds to the problem of Australia being a high cost place in which to do business.

 

[wayneL]

On the face of it that makes sense, Im one more in favour of public ownership of utilities for a number the of reasons you've highlighted.
Two questions
1/ I dont think that accounts for the whole reason cost if business is so high here. Can you think of othet factors

2/ How does Oz compare with other similarly privatized economies including US & UK?

 

[sydboy007]

On the face of it that makes sense, Im one more in favour of public ownership of utilities for a number the of reasons you've highlighted.
Two questions
1/ I dont think that accounts for the whole reason cost if business is so high here. Can you think of othet factors

2/ How does Oz compare with other similarly privatized economies including US & UK?

No privatised major airports in the USA. Why provide a monopoly to a company and then give them free reign over access charges say like Sydney Airport? The world's highest parking charges. Darwin airport decided they're prefer to see Jetstar not use them as a base for 1 stop flights on A320s to Asia than negotiate on tranist passenger costs.

The cost of land in Australia is probably the largest issue we face in terms of competitiveness. It feeds through the entire economy whether for business rents or wages pressure. When the land for a factory is multiple times that our our competitors we're already behind the 8 ball.

Next is the lack of a coherent energy policy. No natural gas reservation policy for domestic industries and manufacturing. We've linked ourselves into paying Asia prices and lost a competitive advantage for it, along with putting over 40,000 jobs on the east coast at risk due to escalating costs, and now there's talk of building a pipeline from Darwin to the east coast to bring in gas when there's no need to. The current Government is part of the problem when you have ministers saying stuff like "We've got to make sure that every molecule of gas that can come out of the ground does so. Provided we've got the environmental approvals right, we should develop everything we can".

 

[Smurf1976]

Private toll roads, private airports, sucking all the gas out of the ground....

All this and more could be summed up quite simply. If it can be sold, we've sold or are in the process of selling it. If it can be dug up then we've either already dug it or are about to.

In other words, we're essentially liquidating the nation's public assets, both man-made and natural, in order to fund recurrent expenditure.

That's worse than even running up debt for the same reason. You can repay a debt and start again but we'll never likely see anyone give up a lucrative near-monopoly over airports in any particular region and we sure can't put gas back in the ground.

If a company sells off some of its' assets each year, whilst acquiring few if any new assets, then most would agree that isn't sustainable and that the asset sales are hiding what is most likely an unprofitable underlying business. And yet that's pretty much what we're doing on a grand scale in Australia - selling off public assets and selling off natural resources like there's no tomorrow.

 

[SirRumpole]

and selling off natural resources like there's no tomorrow.

And getting a pittance in return.

A 78% profits tax on oil and gas production in Norway hasn't done their sovereign risk any harm, and they are stashing billions away for when their oil and gas run out.

How stupid are we ?

http://www.theguardian.com/commenti...ustralia-a-thing-or-two-about-managing-wealth

 

[Smurf1976]

http://www.abc.net.au/news/2015-04-24/latest-study-finds-alinta-solar-thermal-power/6418680

The rate of return that we modelled in the study was 12 per cent - that probably wouldn't cut it when you're talking about private investment, not to say you couldn't find some financial model that would make it work, but at the current cost for this technology, it's not something that a private company would invest in

And therein lies the great trouble with government's aversion to debt.

The Port Augusta power station (coal) is closing in the next decade or so regardless, and that's a huge blow to the local economy. And here's a proposal for a new power station (solar) to replace both the energy supply and at least some of the employment created by the present plant.

Private sector can't or won't do it at 12%? Government could do it for half that at most.

I don't blame Alinta by the way, it's the flawed overall structure that is to blame. First the creation of unnecessary financial risk in what is otherwise a very stable industry (electricity) and secondly, using that unnecessarily created risk as justification for higher rates of return. Meanwhile, the real economy gets screwed by higher than necessary prices for an input cost that affects practically every business and household.

There's a proper place for private enterprise certainly, but I'd prefer that it didn't involve rent seeking via critical infrastructure at the expense of the entire productive economy.

Note that I'm not singling out Alinta in that, just using the situation in Port Augusta as an example. The sad thing is, government is more likely to throw money at "make work" schemes or keeping the coal plant running than to address the bigger picture without costing taxpayers a cent.

 

[sydboy007]

http://www.abc.net.au/news/2015-04-24/latest-study-finds-alinta-solar-thermal-power/6418680



And therein lies the great trouble with government's aversion to debt.

The Port Augusta power station (coal) is closing in the next decade or so regardless, and that's a huge blow to the local economy. And here's a proposal for a new power station (solar) to replace both the energy supply and at least some of the employment created by the present plant.

Private sector can't or won't do it at 12%? Government could do it for half that at most.

I don't blame Alinta by the way, it's the flawed overall structure that is to blame. First the creation of unnecessary financial risk in what is otherwise a very stable industry (electricity) and secondly, using that unnecessarily created risk as justification for higher rates of return. Meanwhile, the real economy gets screwed by higher than necessary prices for an input cost that affects practically every business and household.

There's a proper place for private enterprise certainly, but I'd prefer that it didn't involve rent seeking via critical infrastructure at the expense of the entire productive economy.

Note that I'm not singling out Alinta in that, just using the situation in Port Augusta as an example. The sad thing is, government is more likely to throw money at "make work" schemes or keeping the coal plant running than to address the bigger picture without costing taxpayers a cent.

15 year Govt bond rate is around 2.8%. We definitely need to be taking advantage of the hunt for yield in much of the world, while also improving the competitiveness of the country.

I just don't see the current Govt being able to move the goal posts any further than they have ie a reduction in the debt to gdp ratio is as good as reducing debt. To starting talking about good debt and borrowing to invest in the future, it just can't happen with the current ministry because they're all tarnished with their debt is bad mantra. That's the problem when you paint the world in 2 bit black or white and no shades of grey.

labor seems to be flat footing the Govt with their recent policy announcements. Will be very interesting what economic rabbits Hockey has left in his hat.

 

[SirRumpole]

As if we didn't know...

Negative gearing and capital gains tax discount benefit wealthy by $4.3b: report

A new report estimates that more than half the benefits of negative gearing and capital gains tax discounts go to the top 10 per cent of income earners.

The report by GetUp and The Australia Institute, using economic modelling by NATSEM, finds that over a third of negative gearing tax benefits went to the top 10 per cent, while almost three quarters (73 per cent) of capital gains tax (CGT) discounts went to that top income bracket.

The report estimates that negative gearing is costing the Federal Government about $3.7 billion a year in lost revenue, while the 50 per cent capital gains tax discount wipes off $4 billion.

It finds that 56 per cent of this lost revenue, or $4.3 billion, goes to the top 10 per cent of income earners, with just over two-thirds going to the top fifth of households.

The Australia Institute's senior economist Matt Grudnoff told ABC News Online that the typical negatively geared property investor earns substantially more than the typical person who does not use the tax break.

"The median taxable income for those who don't negatively gear is $38,500 a year, whereas the median taxable income for people who do negatively gear is about 45 per cent higher than that," he said.

More at...

http://www.abc.net.au/news/2015-04-...al-gains-tax-discount-benefit-wealthy/6428202

 

[sydboy007]

As if we didn't know...

Negative gearing and capital gains tax discount benefit wealthy by $4.3b: report

the below charts make it a bit easier to understand how NG and CGT concessions are just subsidies to the wealthy to over invest in housing

What doesn't bode well is how Scott Morrison has drunk the Property Council cool aid and sees NG is primarily used by battler, forgetting the fact that the after tax incomes used are after all NG deductions rather than gross incomes. So that 80K battler is doing quite nicely compared to the average of roughly $55K. Could explain the lack of empathy to the true battlers.

This is what the RBA has to say about NG - something the Government is choosing to ignore: http://www.theage.com.au/comment/negative-gearers-are-the-opposite-of-battlers-and-they-dont-build-many-new-homes-20150427-1msy10.html

Reserve Bank calculations suggest the top 20 per cent of earners owe the bulk of investor housing debt (60 per cent). The bottom 20 per cent owe just 2 per cent.

It is disturbing that a government minister would prefer the assessment of the Property Council to that of the Reserve Bank – all the more so when that minister is in charge of social services, the department responsible for working out who really is a battler…

The ANU Tax and Transfer Policy Institute says dumping negative gearing could save up to $7 billion and fund “Reagan-style tax cuts”. The US president Ronald Reagan moved against negative gearing in 1986.

What do we get for it? Very few new homes. The more popular negative gearing has become, the less it has been used to build new homes and the more it has been used to bid up the price of existing ones. Back in the 1980s, every fifth new investor loan built a home. It is now every 15th.

How can the Minister of social services justify a policy that costs billions, that forces up the cost of housing, hurting the very people he's supposed to be advocating for?